UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported) March 9, 2016

 

 

AmTrust Financial Services, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   001-33143   04-3106389

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

59 Maiden Lane, 43 rd Floor, New York, New York   10038
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code (212) 220-7120

(Former name or former address, if changed since last report.)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

 

  ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.133-4 (c))

 

 

 


Item 5.03 Amendment to Articles of Incorporation or Bylaws; Changes in Fiscal Year.

On March 9, 2016, AmTrust Financial Services, Inc. (the “Company”) filed a Certificate of Designations (the “Certificate of Designations”) with the Delaware Secretary of State. The Company adopted the Certificate of Designations with respect to its 7.75% Non-Cumulative Preferred Stock, Series E, $0.01 par value per share, with a liquidation preference of $1,000 per share (the “Series E Preferred Stock”) in connection with the pricing of a public offering of depositary shares, each representing a 1/40 th interest in a share of Series E Preferred Stock on March 8, 2016.

For a description of the Certificate of Designations governing the Series E Preferred Stock, reference is made to the information set forth under the heading “Description of the Series E Preferred Stock” in the Company’s Prospectus Supplement, dated March 8, 2016, to the Prospectus, dated June 11, 2015, which constitutes a part of the Company’s shelf registration statement on Form S-3ASR (File No. 333-204870), previously filed with the Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Act”), which information is hereby incorporated herein by reference.

A legal opinion relating to the validity of the Series E Preferred Stock and the Series E Depositary Shares (as defined below) is attached hereto as Exhibit 5.1.

 

Item 8.01 Other Events.

Underwriting Agreement

On March 8, 2016, the Company entered into an Underwriting Agreement with Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities, LLC, as representatives of the several underwriters named therein (the “Underwriters”), relating to the issue and sale of an aggregate of 5,000,000 depositary shares (the “Series E Depositary Shares”), each representing a 1/40th ownership interest in a share of its Series E Preferred Stock (equivalent to a liquidation preference of $25 per Series E Depositary Share), to the Underwriters. Pursuant to the Underwriting Agreement, the Company granted the Underwriters an option to purchase up to an additional 750,000 Series E Depositary Shares (together with the 5,000,000 Series E Depositary Shares, the “Shares”) solely to cover over-allotments, if any. The securities have been registered under the Act, pursuant to the Company’s shelf registration statement on Form S-3ASR (File No. 333-204870) previously filed with the SEC under the Act.

Certain of the Underwriters and their respective affiliates perform various financial advisory, investment banking and commercial banking services from time to time for the Company and its affiliates, for which they received or will receive customary fees and expense reimbursement. The Underwriters and their affiliates may provide similar services in the future. Affiliates of certain of the Underwriters are lenders under the Company’s syndicated revolving credit facility.

Deposit Agreement

The Deposit Agreement, dated as of March 15, 2016 (the “Deposit Agreement”), by and among the Company, American Stock Transfer & Trust Company, LLC, as depositary, and the holders from time to time of the depositary receipts described therein, relating to the Shares, is filed as Exhibit 4.1 to this Current Report on Form 8-K and incorporated herein by reference. The form of depositary receipt representing the Series E Preferred Shares is filed and included as Exhibit A to the Deposit Agreement and is incorporated herein by reference.

 

Item 9.01 Exhibits.

 

(d) Exhibits.

 

Exhibit
No.

  

Description

  1.1    Underwriting Agreement, dated March 8, 2016, by and among AmTrust Financial Services, Inc. and Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities, LLC, as representatives of the several underwriters named therein
  3.1    Certificate of Designations of 7.75% Non-Cumulative Preferred Stock, Series E
  4.1    Deposit Agreement, dated March 15, 2016, among AmTrust Financial Services, Inc., American Stock Transfer & Trust Company, LLC and the holders from time to time of the depositary receipts described therein


  4.2    Form of depositary receipt (included as Exhibit A to Exhibit 4.1)
  4.3    Form of stock certificate evidencing 7.75% Non-Cumulative Preferred Stock, Series E
  5.1    Opinion of Sidley Austin LLP
12.1    Computation of Earnings to Fixed Charges and Preferred Stock Dividends
23.1    Consent of Sidley Austin LLP (included in Exhibit 5.1)


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

AmTrust Financial Services, Inc.

(Registrant)

Date March 15, 2016

 

/s/ Stephen Ungar

Stephen Ungar
Senior Vice President, General Counsel and Secretary

Exhibit 1.1

AmTrust Financial Services, Inc.

5,000,000 Depositary Shares

Each Representing 1/40 th Interest in a Share of

7.75% Non-Cumulative Preferred Stock, Series E

 

 

UNDERWRITING AGREEMENT

March 8, 2016

To the Managers named in Schedule I hereto

for the Underwriters named in Schedule II hereto

Ladies and Gentlemen:

AmTrust Financial Services, Inc., a Delaware corporation (the “ Company ”), proposes to issue and sell to the several underwriters named in Schedule II hereto (the “ Underwriters ”), for whom you are acting as managers (the “ Managers ”), 5,000,000 of its Depositary Shares (the “ Firm Shares ”), each representing 1/40 th of a share of the Company’s 7.75% Non-Cumulative Preferred Stock, Series E, par value $0.01 per share, liquidation preference of $1,000 per share (equivalent to $25 per depositary share) (the “ Underlying Preferred Shares ”). The Underlying Preferred Shares, when issued, will be deposited against delivery of Depositary Receipts (the “ Depositary Receipts ”) evidencing the Securities that are to be issued by American Stock Transfer & Trust Company, LLC as depositary (the “ Depositary ”) under the Deposit Agreement, to be dated March 15, 2016, by and among the Company, the Depositary and the holders from time to time of the Depositary Receipts issued thereunder, as supplemented from time to time (the “ Deposit Agreement ”). For purposes of this Agreement, “ Depositary Shares ” means the depositary shares, each representing 1/40 th ownership interest in an Underlying Preferred Share. The Company also proposes to issue and sell to the several Underwriters not more than the number of additional Depositary Shares set forth in Schedule I hereto (the “ Additional Shares ”) if and to the extent that you, as Managers of the offering, shall have determined to exercise, on behalf of the Underwriters, the right to purchase such Depositary Shares granted to the Underwriters in Section 2 hereof. The Firm Shares and the Additional Shares are hereinafter collectively referred to as the “ Securities .” If the firm or firms listed in Schedule II hereto include only the Managers listed in Schedule I hereto, then the terms “Underwriters” and “Managers” as used herein shall each be deemed to refer to such firm or firms. The Preferred Stock is to be issued by the Company pursuant to the provisions of the certificate of designations relating to the Series E Preferred Stock (the “ Certificate of Designations ”) to be filed by the Company with the Secretary of State of the State of Delaware prior to the Closing Date (as defined in Section 4).

The Company has filed with the Securities and Exchange Commission (the “ Commission ”) a registration statement, including a prospectus, (the file number of which is set forth in Schedule I hereto) on Form S-3, relating to securities (the “ Shelf Securities ”), including the Securities, to be issued from time to time by the Company. The registration statement as


amended to the date of this Agreement, including the information (if any) deemed to be part of the registration statement at the time of effectiveness pursuant to Rule 430A or Rule 430B under the Securities Act of 1933, as amended (the “ Securities Act ”), is hereinafter referred to as the “ Registration Statement, ” and the related prospectus covering the Shelf Securities dated June 11, 2015 in the form first used to confirm sales of the Securities (or in the form first made available to the Underwriters by the Company to meet requests of purchasers pursuant to Rule 173 under the Securities Act) is hereinafter referred to as the “ Basic Prospectus .” The Basic Prospectus, as supplemented by the prospectus supplement specifically relating to the Securities in the form first used to confirm sales of the Securities (or in the form first made available to the Underwriters by the Company to meet requests of purchasers pursuant to Rule 173 under the Securities Act) is hereinafter referred to as the “ Prospectus ,” and the term “ preliminary prospectus ” means any preliminary form of the Prospectus filed with the Commission. For purposes of this Agreement, “ free writing prospectus ” has the meaning set forth in Rule 405 under the Securities Act, “ Time of Sale Prospectus ” means the preliminary prospectus together with the free writing prospectuses, if any, each identified in Schedule I hereto, and “ broadly available road show ” means a “bona fide electronic road show” as defined in Rule 433(h)(5) under the Securities Act that has been made available without restriction to any person. As used herein, the terms “Registration Statement,” “Basic Prospectus,” “preliminary prospectus,” “Time of Sale Prospectus” and “Prospectus” shall include the documents incorporated by reference therein on the date hereof (the “ Incorporated Documents ”). The terms “ supplement ,” “ amendment ,” and “ amend ” as used herein with respect to the Registration Statement, the Basic Prospectus, the Time of Sale Prospectus, any preliminary prospectus or the Prospectus shall include all documents subsequently filed by the Company with the Commission pursuant to the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”), that are deemed to be incorporated by reference therein.

1. Representations and Warranties . The Company represents and warrants to and agrees with each of the Underwriters that:

(a) The Registration Statement has become effective; no stop order suspending the effectiveness of the Registration Statement is in effect, and no proceedings for such purpose are pending before or threatened by the Commission.

(b) (i) The Incorporated Documents, when they were or are filed with the Commission, conformed or will conform in all material respects to the applicable requirements of the Exchange Act and the applicable rules and regulations of the Commission thereunder, no such documents were filed with the Commission since the Commission’s close of business on the business day immediately prior to the date of this Agreement and prior to the execution of this Agreement and the Incorporated Documents, when they were or are filed with the Commission, did not contain or 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 statements therein not misleading, (ii) each part of the Registration Statement, when such part became effective, did not contain, and each such part, as amended or supplemented, if applicable, will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) the Registration Statement as of the date hereof does not contain any untrue statement of a material fact or omit to state a material fact required to be stated

 

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therein or necessary to make the statements therein not misleading, (iv) the Registration Statement and the Prospectus comply, and as amended or supplemented, if applicable, will comply in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder, (v) the Time of Sale Prospectus does not, and at the time of each sale of the Securities in connection with the offering, at the Closing Date and at the Option Closing Date (as defined in Section 2) (as applicable), the Time of Sale Prospectus, as then amended or supplemented by the Company, if applicable, 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, (vi) each broadly available road show, if any, when considered together with the Time of Sale Prospectus, does 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 and (vii) the Prospectus does not contain and, as amended or supplemented, if applicable, will not contain as of its date, the Closing Date and the Option Closing Date (as applicable), 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, except that the representations and warranties set forth in this paragraph do not apply to statements or omissions in the Registration Statement, the Time of Sale Prospectus or the Prospectus based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Managers expressly for use therein.

(c) Each preliminary prospectus filed as part of the registration statement as originally filed or as part of any amendment thereto, or filed pursuant to Rule 424 under the Securities Act, complied when so filed in all material respects with the Securities Act and the applicable rules and regulations of the Commission thereunder.

(d) The Company is not an “ineligible issuer” in connection with the offering pursuant to Rules 164, 405 and 433 under the Securities Act. Any free writing prospectus that the Company is required to file pursuant to Rule 433(d) under the Securities Act has been, or will be, filed with the Commission in accordance with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Each free writing prospectus that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act or that was prepared by or on behalf of or used or referred to by the Company complies or will comply in all material respects with the requirements of the Securities Act and the applicable rules and regulations of the Commission thereunder. Except for the free writing prospectuses, if any, identified in Schedule I hereto, and electronic road shows, if any, each furnished to you before first use, the Company has not prepared, used or referred to, and will not, without your prior consent, prepare, use or refer to, any free writing prospectus.

(e) Neither the Company nor any of its subsidiaries has sustained since the date of the latest audited financial statements incorporated by reference in the Time of Sale Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Time of Sale Prospectus; and, since the respective dates as of which information is given in the

 

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Time of Sale Prospectus, there has not been any change in the capital stock (excluding the issuance of stock option grants, awards of restricted stock or restricted stock units or other equity awards in the ordinary course of business pursuant to the Company’s 2010 Omnibus Incentive Plan, as amended, the exercise of any stock options, or the vesting of restricted stock or restricted stock units, which in each case are outstanding as of the date of this Agreement) 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 business, management, financial position, stockholders’ equity or results of operations of the Company and its subsidiaries, taken as a whole (a “ Material Adverse Change ”), otherwise than as set forth or contemplated in the Time of Sale Prospectus.

(f) The Company and its subsidiaries have good and marketable title in fee simple to all material real property and good and marketable title to all material tangible personal property owned by them, in each case free and clear of all liens, encumbrances and defects except such as are described in the Time of Sale 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 that are material to the Company’s or its subsidiaries’ businesses are held by them under valid, subsisting and enforceable leases with such customary exceptions or 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.

(g) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware, with power and authority (corporate and other) to own its properties and conduct its business as described in the Time of Sale 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, or is subject to no material liability or disability by reason of the failure to be so qualified in any such jurisdiction; and each subsidiary constituting at least 10% of the Company’s total consolidated assets as of December 31, 2015 and the other operating subsidiaries that contribute materially to the Company’s earnings (the “ Material Subsidiaries ”), listed in Annex B hereto, has been duly organized and is validly existing and in good standing under the laws of its jurisdiction of organization.

(h) Each of the Company’s insurance company subsidiaries (an “ Insurance Subsidiary ”) is duly organized and licensed as an insurance company in its jurisdiction of organization or incorporation, as the case may be (whether inside or outside the United States), and each of the Insurance Subsidiaries is duly licensed or authorized as an insurer in each other jurisdiction (whether inside or outside the United States) where it is required to be so licensed or authorized to conduct its business as set forth in each of the Time of Sale Prospectus, in each case, with such exceptions, individually or in the aggregate, as would not result in a Material Adverse Change; each of the Insurance Subsidiaries is in compliance with the requirements of the insurance laws and regulations of its jurisdiction of organization or incorporation, as the case may be, and the insurance laws and regulations of other jurisdictions which are applicable to it, and has filed all notices, reports, documents or other

 

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information required to be filed thereunder (“ Notices ”), in each case with such exceptions, individually or in the aggregate, as would not result in a Material Adverse Change; and, except as otherwise set forth in the Time of Sale Prospectus, neither the Company nor any of its Insurance Subsidiaries has received any notification from any insurance regulatory authority to the effect that any additional consent, approval, authorization, order, registration or qualification (“ Approval ”) from such insurance regulatory authority is needed to be obtained by the Company or its Insurance Subsidiaries in any case where it would be reasonably expected that the failure to obtain such Approval would result in a Material Adverse Change;

(i) Without limiting the foregoing, the Company and each of the Insurance Subsidiaries has filed all Notices pursuant to, and has obtained all Approvals required to be obtained under, and has otherwise complied with all requirements of, all applicable insurance laws and regulations in connection with the issuance and sale of the Securities, in each case with such exceptions, individually or in the aggregate, as would not result in a Material Adverse Change;

(j) The consolidated and parent only historical financial statements and schedules of the Company and its consolidated subsidiaries incorporated by reference in the Time of Sale Prospectus present fairly in all material respects the financial condition, results of operations and cash flows of the Company and its consolidated subsidiaries as of the dates and for the periods indicated, comply as to form in all material respects with the applicable accounting requirements of the Securities Act or the Exchange Act and the rules and regulations of the Commission thereunder and have been prepared in conformity with United States generally accepted accounting principles applied on a consistent basis throughout the periods involved (except as otherwise noted therein). No pro forma financial information is required to be filed with the Commission pursuant to Regulation S-X with respect, individually or in the aggregate, to the acquisitions or dispositions since January 1, 2016;

(k) The 2015 statutory annual statements of each Insurance Subsidiary and the statutory balance sheets and income statements included in such statutory annual statements together with related schedules and notes have been prepared, in all material respects, in conformity with statutory accounting principles and practices required or permitted by the appropriate insurance regulator of the jurisdiction of organization or incorporation (whether inside or outside the United States) of each such Insurance Subsidiary, and such statutory accounting principles and 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 such Insurance Subsidiaries as of the dates thereof, and the statutory basis results of operations of such Insurance Subsidiaries for the periods covered thereby.

(l) The interactive data in eXtensbile Business Reporting Language incorporated by reference in the Registration Statement fairly presents the information called for in all material respects and has been prepared in accordance with the Commission’s rules and guidelines applicable thereto.

 

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(m) As of December 31, 2015, the Company has an authorized and outstanding capitalization as set forth in the Time of Sale Prospectus under the section entitled “Capitalization — Actual”, and except with respect to the grant or issuance by the Company in the ordinary course of its business, or the exercise, forfeiture or surrender of, options or shares of stock, pursuant to, or in connection with, the Company’s existing stock compensation plans, as of the time when sales of the Securities were first made, the Company shall have, in all material respects, an authorized and outstanding capitalization as set forth in the Time of Sale Prospectus under the section entitled “Capitalization”; all of the issued and outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable; and all of the issued and outstanding shares of capital stock of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and (except for directors’ qualifying shares) are owned directly or indirectly by the Company, free and clear of all liens, encumbrances, equities or claims.

(n) The Securities have been duly authorized by the Company and, when issued and delivered and paid for as provided herein, the Securities will be duly and validly issued, fully paid and non-assessable and, upon deposit of the Underlying Preferred Shares with the Depositary pursuant to the Deposit Agreement and the due execution of the Deposit Agreement and the Depositary Receipts by the Depositary, will be entitled to the rights under, and the benefits of, the Deposit Agreement.

(o) The Underlying Preferred Shares have been duly authorized and validly issued and are fully paid and non-assessable, and will have the rights set forth in the Certificate of Designations.

(p) All corporate action required to be taken for the authorization, issuance and sale of the Securities, and the authorization and issuance of the Underlying Preferred Shares, has been validly and sufficiently taken; and the stockholders of the Company do not have any preemptive or similar rights with respect to the Securities or the Underlying Preferred Shares.

(q) The form of certificates used to evidence the Securities complies in all material respects with all applicable requirements of the Delaware General Corporation Law, the New York Stock Exchange (the “ NYSE ”) and the Company’s Amended and Restated Certificate of Incorporation and By-laws, and has been duly authorized and approved by the board of directors of the Company.

(r) The Certificate of Designations, the proposed form of which has been furnished to you, has been duly authorized by the Company and will have been duly filed with the Secretary of State of Delaware, on or before the Closing Date.

(s) This Agreement has been duly authorized, executed and delivered by the Company.

(t) This Agreement conforms in all material respects to the descriptions thereof contained in the Registration Statement, the Prospectus and the Time of Sale Prospectus.

 

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(u) The Deposit Agreement has been duly authorized by the Company, and when duly executed and delivered by the Company, will constitute a valid and legally binding agreement of the Company, enforceable against the Company in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors’ rights generally or by equitable principles relating to enforceability. The Deposit Agreement conforms in all material respects to the description thereof in the Registration Statement, the Prospectus and the Time of Sale Prospectus.

(v) Prior to the date hereof, neither the Company nor any of its affiliates has taken any action which is designed to or which has constituted or which might have been expected to cause or result in stabilization or manipulation of the price of any security of the Company in connection with the offering of the Securities.

(w) The issue and sale of the Securities, the issue of the Underlying Preferred Shares and the compliance by the Company with all of the provisions of the Securities, the Underlying Preferred Shares, this Agreement and the Deposit Agreement and the consummation of the transactions herein and therein contemplated will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement 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, (ii) result in any violation of the provisions of the Amended and Restated Certificate of Incorporation or By-laws of the Company or (iii) result in the breach or violation of any statute or any order, rule or regulation of any court or insurance regulatory authority or other governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties, except in the case of clauses (i) and (iii) above, as would not result in a material adverse effect on the business, management, financial position, stockholders’ equity or results of operations of the Company and its subsidiaries, taken as a whole (a “ Material Adverse Effect ”) or prevent the execution or delivery of this Agreement, the consummation by the Company of the transactions contemplated under this Agreement or the issuance and sale of the Securities; and no consent, approval, authorization, order, registration or qualification of or with any such court or insurance regulatory authority or governmental agency or body is required for the issuance and sale of the Securities or the consummation by the Company of the transactions contemplated by this Agreement except for 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 Securities by the Underwriters.

(x) Neither the Company nor any of its Insurance Subsidiaries is in violation of its respective constitutive documents or By-laws or in default in the performance or observance of any obligation, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound which default would result in a Material Adverse Effect.

(y) The statements set forth in the Time of Sale Prospectus and the Prospectus under the caption “Description of the Series E Preferred Stock”, “Description of the Depositary Shares”, “Description of Preferred Stock”, and “Description of Depositary Shares” insofar as they purport to constitute a summary of the terms of the Underlying Preferred Shares and the

 

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Depositary Shares, and under the caption “Certain U.S. Federal Income Tax Considerations”, insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate, complete and fair.

(z) Other than as set forth in the Time of Sale Prospectus, there are no legal or governmental proceedings pending to which the Company or any of its subsidiaries is a party or of which any property of the Company or any of its subsidiaries is the subject, which, if determined adversely to the Company or any of its subsidiaries, would individually or in the aggregate have a material adverse effect on the current or future consolidated financial position, stockholders’ equity or results of operations of the Company and its subsidiaries; and, to the best of the Company’s knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others.

(aa) There are no statutes, regulations, related party transactions, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement that are not described or filed as required.

(bb) The Company is not and, after giving effect to the offering and sale of the Securities and the application of the proceeds thereof, will not be an “investment company”, as such term is defined in the Investment Company Act of 1940, as amended.

(cc) The Company maintains a system of internal control over financial reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act) that complies with the requirements of the Exchange Act and has been designed by the Company’s principal executive officer and principal financial officer, or under their supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with United States generally accepted accounting principles. The Company’s internal control over financial reporting is effective and the Company is not aware of any material weaknesses in its internal control over financial reporting; it is understood that the Company’s management has not conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting for any period after December 31, 2015.

(dd) Since the date of the latest audited financial statements incorporated by reference in the Time of Sale Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

(ee) The Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the requirements of the Exchange Act; such disclosure controls and procedures have been designed to ensure that material information relating to the Company and its subsidiaries is made known to the Company’s principal executive officer and principal financial officer by others within those entities; and such disclosure controls and procedures are effective.

 

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(ff) BDO USA LLP, who have certified certain financial statements of the Company and its subsidiaries, and have audited the Company’s internal control over financial reporting, is an independent registered public accounting firm with respect to the Company and its subsidiaries, within the applicable rules and regulations adopted by the Public Company Accounting Oversight Board (United States) and as required by the Act and the rules and regulations of the Commission thereunder.

(gg) The Company and its Insurance Subsidiaries maintain insurance against such losses and risks as is, in the Company’s reasonable judgment, prudent and customary in the businesses in which they are engaged; neither the Company nor any of its subsidiaries has been refused any insurance coverage sought or applied for; and neither the Company nor any of its subsidiaries 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 reasonably necessary to continue its business at a cost that would not result, individually or in the aggregate, in a Material Adverse Change.

(hh) The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements, including those of the USA PATRIOT Act, the Currency and Foreign Transactions Reporting Act of 1970, as amended and the applicable money laundering statutes of jurisdictions where the Company and its subsidiaries conduct business, 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 ”), except for any violations of the Money Laundering Laws as would not, individually or in the aggregate, have a Material Adverse Effect, and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.

(ii) None of the Company, any of its subsidiaries or, to the Company’s knowledge, any director, officer, agent, employee, affiliate or other person associated with or acting on behalf of the Company or any of its subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) taken any action, directly or indirectly, that would result in a violation or a sanction for violation by such persons of the Foreign Corrupt Practices Act of 1977 or the U.K. Bribery Act 2010, each as may be amended, or similar law of any other relevant jurisdiction, or the rules or regulations thereunder; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment. The Company and its subsidiaries have instituted and maintain policies and procedures to ensure compliance with the Foreign Corrupt Practices Act of 1977 and the U.K. Bribery Act 2010. No part of the proceeds of the offering will be used, directly or indirectly, in violation of the Foreign Corrupt Practices Act of 1977 or the U.K. Bribery Act 2010, each as may be amended, or similar law of any other relevant jurisdiction, or the rules or regulations thereunder.

 

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(jj) Neither the Company nor any of its subsidiaries nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or any of its subsidiaries (i) is, or is controlled or 50% or more owned by or is acting on behalf of, an individual or entity that is currently the subject of any sanctions administered or enforced by the United States (including any administered or enforced by the Office of Foreign Assets Control of the U.S. Department of the Treasury, the U.S. Department of State or the Bureau of Industry and Security of the U.S. Department of Commerce), the United Nations Security Council, the European Union, the United Kingdom (including sanctions administered or enforced by Her Majesty’s Treasury) or other relevant sanctions authority (collectively, “ Sanctions ” and such persons, “ Sanctioned Persons ” and each such person, a “ Sanctioned Person ”), (ii) is located, organized or resident in a country or territory that is, or whose government is, the subject of Sanctions that broadly prohibit dealings with that country or territory (collectively, “ Sanctioned Countries ” and each, a “ Sanctioned Country ”) or (iii) will, directly or indirectly, use the proceeds of this offering, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other individual or entity to fund or facilitate any activities or business of or with any Sanctioned Person or in any Sanctioned Country, at the time of such funding or facilitation.

(kk) The Company and each of its subsidiaries have (i) timely filed all United States federal, state and local tax returns, information returns, and similar reports that are required to be filed (taking into account valid extensions), and all tax returns are true, correct and complete in all material respects, (ii) paid in full all taxes shown as due thereon and any other assessment, fine or penalty levied against it, except for any such assessment, fine or penalty that is currently being contested in good faith or as would not result, individually or in the aggregate, in a Material Adverse Change, and (iii) established on the most recent balance sheet reserves that are adequate for the payment of all taxes not yet due and payable.

(ll) There is and has been no failure on the part of the Company or any of the Company’s directors or officers, in their capacities as such, to comply in all material respects with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith, including Section 402 related to loans and Sections 302 and 906 related to certifications.

(mm) The Company and its subsidiaries have taken commercially reasonable measures to maintain protections against unauthorized access to, or disruption or failure of, their information technology systems. To the Company’s knowledge, during the past twelve months, neither the Company nor any of its subsidiaries has been subject to unauthorized access to their information technology systems or data maintained by them, except for such occurrences that would not, individually or in the aggregate, have a Material Adverse Effect, provided that the Company has disclosed to the Underwriters any such occurrences of which it has knowledge but which would not, individually or in the aggregate, have a Material Adverse Effect.

2. Agreements to Sell and Purchase . The Company hereby agrees to sell to the several Underwriters, and each Underwriter, upon the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees, severally and not jointly, to purchase from the Company the respective numbers of Firm Shares set forth in Schedule II hereto opposite its name at the purchase price set forth in Schedule I hereto (the “ Purchase Price ”).

 

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On the basis of the representations and warranties contained in this Agreement, and subject to the terms and conditions hereinafter stated, the Company agrees to sell to the Underwriters the Additional Shares, and the Underwriters shall have the right to purchase, severally and not jointly, up to the number of Additional Shares set forth in Schedule I hereto at the Purchase Price; provided, however, that the amount paid by the Underwriters for any Additional Shares shall be reduced by an amount per share equal to any dividends declared, if any, by the Company and payable on the Firm Shares but not payable on the Additional Shares. You may exercise this right on behalf of the Underwriters in whole or from time to time in part by giving written notice not later than 30 days after the date of the Prospectus. Any exercise notice shall specify the number of Additional Shares to be purchased by the Underwriters and the date on which such shares are to be purchased. Each purchase date must be at least one business day after the written notice is given and may not be earlier than the closing date for the Firm Shares nor later than ten business days after the date of such notice. Additional Shares may be purchased as provided in Section 4 hereof solely for the purpose of covering over-allotments made in connection with the offering of the Firm Shares. On each day, if any, that Additional Shares are to be purchased (an “ Option Closing Date ”), each Underwriter agrees, severally and not jointly, to purchase the number of Additional Shares (subject to such adjustments to eliminate fractional shares as you may determine) that bears the same proportion to the total number of Additional Shares to be purchased on such Option Closing Date as the number of Firm Shares set forth in Schedule II hereto opposite the name of such Underwriter bears to the total number of Firm Shares.

3. Public Offering. The Company is advised by you that the Underwriters propose to make a public offering of their respective portions of the Securities as soon after the Registration Statement and this Agreement have become effective as in your judgment is advisable. The Company is further advised by you that the Securities are to be offered to the public upon the terms set forth in the Prospectus.

4. Payment and Delivery. Payment for the Firm Shares shall be made to the Company in Federal or other funds immediately available in New York City on the closing date and time set forth in Schedule I hereto, or at such other time on the same or such other date, not later than the fifth business day thereafter, as may be designated in writing by you. The time and date of such payment are hereinafter referred to as the “ Closing Date .”

Payment for any Additional Shares shall be made to the Company in Federal or other funds immediately available in New York City on the date specified in the corresponding notice described in Section 2 or at such other time or on the same or on such other date, in any event not later than the tenth business day thereafter, as may be designated in writing by you.

Payment for the Securities shall be made against delivery to you on the Closing Date or Option Closing Date, as applicable, for the respective accounts of the several Underwriters of the Securities registered in such names and in such denominations as you shall request in writing not later than one full business day prior to the Closing Date or Option Closing Date, as applicable, with any transfer taxes payable in connection with the transfer of the Securities to the Underwriters duly paid.

 

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5. Conditions to the Underwriters’ Obligations . The several obligations of the Underwriters are subject to the following conditions:

(a) Subsequent to the execution and delivery of this Agreement and prior to the Closing Date and the Option Closing Date, as applicable:

(i) there shall not have occurred any downgrading, nor shall any notice have been given of any intended or potential downgrading in the rating accorded the Company or any of the securities of the Company or any of its subsidiaries or in the rating outlook for the Company by any “nationally recognized statistical rating organization,” as such term is defined in Section 3(a)(62) of the Exchange Act;

(ii) there shall not have occurred any change, or any development involving a prospective change, in the condition, financial or otherwise, or in the earnings, business or operations of the Company and its subsidiaries, taken as a whole, from that set forth in the Time of Sale Prospectus that, in your judgment, is material and adverse and that makes it, in your judgment, impracticable to market the Securities on the terms and in the manner contemplated in the Time of Sale Prospectus; and

(iii) there shall not have occurred any (i) suspension or material limitation in trading on, or by, as the case may be, any of the NYSE, the NYSE MKT LLC or the NASDAQ Global Market, (ii) suspension in trading of any securities of the Company on the NASDAQ Global Market, (iii) material disruption in securities settlement, payment or clearance services in the United States, (iv) any moratorium on commercial banking activities declared by Federal or New York State authorities or (v) outbreak or escalation of hostilities, or any change in financial markets or any calamity or crisis that, in your judgment, is material and adverse and which, singly or together with any other event specified in this clause (v), makes it, in your judgment, impracticable or inadvisable to proceed with the offer, sale or delivery of the Securities on the terms and in the manner contemplated in the Time of Sale Prospectus or the Prospectus.

(b) The Underwriters shall have received on the Closing Date and the Option Closing Date, as applicable, a certificate, dated the Closing Date or the Option Closing Date, as applicable, and signed by an executive officer of the Company, to the effect set forth in Section 5(a)(i) above and to the effect that the representations and warranties of the Company contained in this Agreement are true and correct as of the Closing Date or the Option Closing Date, as applicable, and that the Company has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied hereunder on or before the Closing Date or the Option Closing Date, as applicable.

The officer signing and delivering such certificate may rely upon the best of his or her knowledge as to proceedings threatened.

(c) (i) The Underwriters shall have received on the Closing Date and the Option Closing Date, as applicable, an opinion and negative assurance letter of Sidley Austin LLP, outside counsel for the Company, dated the Closing Date or the Option Closing Date, as applicable, to the effect set forth in Annex A-1 hereto, and such counsel shall have received

 

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such documents and information as they may reasonably request to enable them to pass upon such matters; and (ii) the Underwriters shall have received on the Closing Date and the Option Closing Date, as applicable, opinions of Stephen B. Ungar, General Counsel and Secretary of the Company, on behalf of the Company, Technology Insurance Company, Inc. and Wesco Insurance Company; Berwin Leighton Paisner LLP, counsel for AmTrust Europe Limited; Jeremy Cadle, General Counsel of AmTrust Europe Limited; and Wakefield Quin, counsel for AmTrust International Insurance Ltd., each dated the Closing Date or the Option Closing Date, as applicable, to the effect set forth in Annex A-2 hereto.

The opinions of counsel for the Company described in this Section 5(c) shall be rendered to the Underwriters at the request of the Company and shall so state therein.

(d) The Underwriters shall have received on the Closing Date or the Option Closing Date, as applicable, an opinion and negative assurance letter of Sullivan & Cromwell LLP, counsel for the Underwriters, dated the Closing Date or the Option Closing Date, as applicable, with respect to such matters as the Managers may reasonably request, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.

(e) The Underwriters shall have received, on each of the date hereof, the Closing Date and the Option Closing Date, as applicable, a letter dated the date hereof, the Closing Date or the Option Closing Date, as the case may be, in form and substance satisfactory to the Underwriters, from BDO USA LLP, independent public accountants, containing statements and information of the type ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement, the Time of Sale Prospectus and the Prospectus; provided that the letter delivered on the Closing Date shall use a “cut-off date” not earlier than the date hereof.

The several obligations of the Underwriters to purchase Securities hereunder are subject to the delivery to you on the Closing Date or Option Closing Date, as applicable, of the documents indicated in this Section 5 and such other documents as you may reasonably request with respect to the good standing of the Company and the Insurance Subsidiaries on such Closing Date or Option Closing Date, as applicable, and other matters related to the issuance of such Securities.

6. Covenants of the Company . The Company covenants with each Underwriter as follows:

(a) To furnish to you, without charge, a signed copy of the Registration Statement (including exhibits thereto and documents incorporated by reference therein) and to deliver to each of the Underwriters during the period mentioned in Section 6(e) or 6(f) below, as many copies of the Time of Sale Prospectus, the Prospectus, any documents incorporated by reference therein and any supplements and amendments thereto or to the Registration Statement as you may reasonably request.

(b) Before amending or supplementing the Registration Statement, the Time of Sale

 

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Prospectus or the Prospectus, to furnish to you a copy of each such proposed amendment or supplement and not to file any such proposed amendment or supplement to which you reasonably object.

(c) To furnish to you a copy of each proposed free writing prospectus to be prepared by or on behalf of, used by, or referred to by the Company and not to use or refer to any proposed free writing prospectus to which you reasonably object.

(d) Not to take any action that would result in an Underwriter or the Company being required to file with the Commission pursuant to Rule 433(d) under the Securities Act a free writing prospectus prepared by or on behalf of the Underwriter that the Underwriter otherwise would not have been required to file thereunder.

(e) If the Time of Sale Prospectus is being used to solicit offers to buy the Securities at a time when the Prospectus is not yet available to prospective purchasers and any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Time of Sale Prospectus in order to make the statements therein, in the light of the circumstances, not misleading, or if any event shall occur or condition exist as a result of which the Time of Sale Prospectus conflicts with the information contained in the Registration Statement then on file, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Time of Sale Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to any dealer upon request, either amendments or supplements to the Time of Sale Prospectus so that the statements in the Time of Sale Prospectus as so amended or supplemented will not, in the light of the circumstances when the Time of Sale Prospectus is delivered to a prospective purchaser, be misleading or so that the Time of Sale Prospectus, as amended or supplemented, will no longer conflict with the Registration Statement, or so that the Time of Sale Prospectus, as amended or supplemented, will comply with applicable law.

(f) If, during such period after the first date of the public offering of the Securities as in the opinion of counsel for the Underwriters the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the Securities Act) is required by law to be delivered in connection with sales by an Underwriter or dealer, any event shall occur or condition exist as a result of which it is necessary to amend or supplement the Prospectus in order to make the statements therein, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the Securities Act) is delivered to a purchaser, not misleading, or if, in the opinion of counsel for the Underwriters, it is necessary to amend or supplement the Prospectus to comply with applicable law, forthwith to prepare, file with the Commission and furnish, at its own expense, to the Underwriters and to the dealers (whose names and addresses you will furnish to the Company) to which Securities may have been sold by you on behalf of the Underwriters and to any other dealers upon request, either amendments or supplements to the Prospectus so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances when the Prospectus (or in lieu thereof the notice referred to in Rule 173(a) of the Securities Act) is delivered to a purchaser, be misleading or so that the Prospectus, as amended or supplemented, will comply with applicable law.

 

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(g) To endeavor to qualify the Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as you shall reasonably request, provided that in connection therewith the Company will not be required to qualify as a foreign corporation or file a general consent to service of process in any jurisdiction.

(h) To make generally available to the Company’s security holders and to you as soon as practicable an earnings statement covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the date of this Agreement which shall satisfy the provisions of Section 11(a) of the Securities Act and the rules and regulations of the Commission thereunder.

(i) Whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, to pay or cause to be paid all expenses incident to the performance of its obligations under this Agreement, including: (i) the fees, disbursements and expenses of the Company’s counsel and the Company’s accountants in connection with the registration and delivery of the Securities under the Securities Act and all other fees or expenses in connection with the preparation and filing of the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, any free writing prospectus prepared by or on behalf of, used by, or referred to by the Company and amendments and supplements to any of the foregoing, including the filing fees payable to the Commission relating to the Securities (within the time required by Rule 456(b)(1), if applicable), all printing costs associated therewith, and the mailing and delivering of copies thereof to the Underwriters and dealers, in the quantities hereinabove specified, (ii) all costs and expenses related to the transfer and delivery of the Securities to the Underwriters, including any transfer or other taxes payable thereon, (iii) the cost of printing or producing any Blue Sky or legal investment memorandum in connection with the offer and sale of the Securities under state securities laws and all expenses in connection with the qualification of the Securities for offer and sale under state securities laws as provided in Section 6(g) hereof, including filing fees and the reasonable fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky or legal investment memorandum (together with the fees in (iv), not to exceed $7,500), (iv) all filing fees and the reasonable fees and disbursements of counsel to the Underwriters incurred in connection with the review and qualification of the offering of the Securities by the Financial Industry Regulatory Authority (together with the fees in (iii), not to exceed $7,500), (v) any fees charged by the rating agencies for the rating of the Securities, (vi) all fees and expenses in connection with the preparation and filing of the registration statement on Form 8-A relating to the Securities and all costs and expenses incident to listing the Securities on the NYSE, (vii) the cost of the preparation, issuance and delivery of the Securities, (viii) the costs and charges of any trustee, transfer agent, registrar or depositary, (ix) the document production charges and expenses associated with printing this Agreement, (x) all fees and expenses in connection with the creation of the depositary shares and (xi) all other costs and expenses incident to the performance of the obligations of the Company hereunder for which provision is not otherwise made in this Section. It is understood, however, that except as provided in this Section, Section 8 entitled “Indemnity and Contribution,” and the last paragraph of Section 10 below, the Underwriters will pay all of their costs and expenses, including fees and disbursements of their counsel, transfer taxes payable on resale of any of the Securities by them and any advertising expenses connected with any offers they may make.

 

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(j) To use its commercially reasonable efforts to list the Securities on the NYSE within 30 days of the Closing Date and to maintain the listing of the Securities on the NYSE.

(k) During the period beginning on the date hereof and continuing to and including the date that is 30 days after the date hereof, not to offer, sell, contract to sell or otherwise dispose of any securities of the Company that are substantially similar to the Securities, including any securities that are convertible into or exchangeable for, or that represents rights to receive, the Securities or securities that are substantially similar to the Securities (other than (i) the Securities or (ii) securities or rights permitted with the prior written consent of the Managers identified in Schedule I with the authorization to release this lock-up on behalf of the Underwriters).

(l) To prepare a final term sheet relating to the offering of the Securities, containing only information that describes the final terms of the Securities or the offering in a form consented to by the Managers, and to file such final term sheet within the period required by Rule 433(d)(5)(ii) under the Securities Act following the date the final terms have been established for the offering of the Securities.

(m) If the third anniversary of the initial effectiveness date of the Registration Statement occurs before all the Securities have been sold by the Underwriters, prior to the third anniversary to file a new shelf registration statement and to take any other action necessary to permit the public offering of the Securities to continue without interruption; references herein to the Registration Statement shall include the new registration statement that becomes effective with the Commission.

7. Covenants of the Underwriters . Each Underwriter severally covenants with the Company not to take any action that would result in the Company being required to file with the Commission under Rule 433(d) a free writing prospectus prepared by or on behalf of such Underwriter that otherwise would not be required to be filed by the Company thereunder, but for the action of the Underwriter.

8. Indemnity and Contribution . (a) The Company agrees to indemnify and hold harmless each Underwriter, each person, if any, who controls any Underwriter within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, each affiliate of any Underwriter within the meaning of Rule 405 under the Securities Act, and their respective agents, directors and officers from and against any and all losses, claims, damages and liabilities (including, without limitation, any legal or other expenses reasonably incurred in connection with defending or investigating any such action or claim) caused by any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any amendment thereof, any preliminary prospectus, the Time of Sale Prospectus or any amendment or supplement thereto, any issuer free writing prospectus as defined in Rule 433(h) under the Securities Act, any Company information that the Company has filed, or is required to file, pursuant to Rule 433(d) under the Securities Act, any “road show” as defined in Rule 433(h) under the Securities Act (a “road show”), or the Prospectus or any amendment or supplement thereto, or caused by any omission or alleged omission to state therein a material fact required to

 

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be stated therein or necessary to make the statements therein not misleading, except insofar as such losses, claims, damages or liabilities are caused by any such untrue statement or omission or alleged untrue statement or omission based upon information relating to any Underwriter furnished to the Company in writing by such Underwriter through you expressly for use therein.

(b) Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who sign the Registration Statement and each person, if any, who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Company to such Underwriter, but only with reference to information relating to such Underwriter furnished to the Company in writing by such Underwriter through you expressly for use in the Registration Statement, any preliminary prospectus, the Time of Sale Prospectus, any issuer free writing prospectus, road show, or the Prospectus or any amendment or supplement thereto.

(c) In case any proceeding (including any governmental investigation) shall be instituted involving any person in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b), such person (the “ indemnified party ”) shall promptly notify the person against whom such indemnity may be sought (the “ indemnifying party ”) in writing and the indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any others the indemnifying party may designate in such proceeding and shall pay the fees and disbursements of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. It is understood that the indemnifying party shall not, in respect of the legal expenses of any indemnified party in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all such indemnified parties and that all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by the Managers authorized to appoint counsel under this Section set forth in Schedule I hereto, in the case of parties indemnified pursuant to Section 8(a), and by the Company, in the case of parties indemnified pursuant to Section 8(b). The indemnifying party shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the indemnifying party agrees to indemnify the indemnified party from and against any loss or liability by reason of such settlement or judgment. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened proceeding in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party, unless (a) such settlement includes an unconditional release of such indemnified party from all liability on claims that are the subject matter of such proceeding and (b) does not include any statements as to or any findings of fault, culpability or failure to act by or on behalf of any indemnified party.

 

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(d) To the extent the indemnification provided for in Section 8(a) or 8(b) is unavailable to an indemnified party or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each indemnifying party under such paragraph, in lieu of indemnifying such indemnified party thereunder, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (i) 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 hand from the offering of the Securities or (ii) if the allocation provided by clause 8(d)(i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 8(d)(i) above but also the relative fault of the Company on the one hand and of the Underwriters on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, 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 hand in connection with the offering of the Securities shall be deemed to be in the same respective proportions as the net proceeds from the offering of the Securities (before deducting expenses) received by the Company and the total underwriting discounts and commissions received by the Underwriters bear to the aggregate initial public offering price of the Securities as set forth in the Prospectus. The relative fault of the Company on the one hand and the Underwriters on the other hand shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Underwriters’ respective obligations to contribute pursuant to this Section 8 are several in proportion to the respective liquidation amounts of Securities they have purchased hereunder, and not joint.

(e) The Company and the Underwriters agree that it would not be just or equitable if contribution pursuant to this Section 8 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 that does not take account of the equitable considerations referred to in Section 8(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages and liabilities referred to in Section 8(d) shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages that 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 Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity.

 

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(f) The indemnity and contribution provisions contained in this Section 8 and the representations, warranties and other statements of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Underwriter, any person controlling any Underwriter or any affiliate of any Underwriter or by or on behalf of the Company, its officers or directors or any person controlling the Company and (iii) acceptance of and payment for any of the Securities.

9. Termination . The Underwriters may terminate this Agreement by notice given by you to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on, or by, as the case may be, any of the NYSE, NYSE MKT LLC or the NASDAQ Global Market, (ii) trading of any securities of the Company shall have been suspended on the NASDAQ Global Market, (iii) a material disruption in securities settlement, payment or clearance services in the United States shall have occurred, (iv) any moratorium on commercial banking activities shall have been declared by Federal or New York State authorities or (v) there shall have occurred any outbreak or escalation of hostilities, or any change in financial markets or any calamity or crisis that, in your judgment, is material and adverse and which, singly or together with any other event specified in this clause (v), makes it, in your judgment, impracticable or inadvisable to proceed with the offer, sale or delivery of the Securities on the terms and in the manner contemplated in the Time of Sale Prospectus or the Prospectus.

10. Effectiveness; Defaulting Underwriters . This Agreement shall become effective upon the execution and delivery hereof by the parties hereto.

If, on the Closing Date, any one or more of the Underwriters shall fail or refuse to purchase Securities that it has or they have agreed to purchase hereunder on such date, and the aggregate number of Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase is not more than one-tenth of the aggregate number of the Securities to be purchased on such date, the other Underwriters shall be obligated severally in the proportions that the number of Firm Shares set forth opposite their respective names in Schedule II bears to the aggregate number of Firm Shares set forth opposite the names of all such non-defaulting Underwriters, or in such other proportions as you may specify, to purchase the Securities which such defaulting Underwriter or Underwriters agreed but failed or refused to purchase on such date; provided that in no event shall the number of Securities that any Underwriter has agreed to purchase pursuant to this Agreement be increased pursuant to this Section 10 by an amount in excess of one-ninth of such number of Securities without the written consent of such Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Firm Shares and the aggregate number of Firm Shares with respect to which such default occurs is more than one-tenth of the aggregate principal amount of Securities to be purchased on such date, and arrangements satisfactory to you and the Company for the purchase of such Securities are not made within 36 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Underwriter or the Company. In any such case either you or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Registration Statement, in the Time of Sale Prospectus, in the Prospectus or in any other documents or arrangements may be effected. If, on an Option Closing Date, any Underwriter or Underwriters shall fail or refuse to purchase Additional Shares and the aggregate number of Additional Shares

 

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with respect to which such default occurs is more than one-tenth of the aggregate number of Additional Shares to be purchased on such Option Closing Date, the non-defaulting Underwriters shall have the option to (i) terminate their obligation hereunder to purchase the Additional Shares to be sold on such Option Closing Date or (ii) purchase not less than the number of Additional Shares that such non-defaulting Underwriters would have been obligated to purchase in the absence of such default. Any action taken under this paragraph shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.

If this Agreement shall be terminated by the Underwriters, or any of them, because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement the Company will reimburse the Underwriters or such Underwriters as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and disbursements of their counsel) reasonably incurred by such Underwriters in connection with this Agreement or the offering contemplated hereunder.

11. Entire Agreement . (a) This Agreement, together with any contemporaneous written agreements and any prior written agreements (to the extent not superseded by this Agreement) that relate to the offering of the Securities, represents the entire agreement between the Company and the Underwriters with respect to the preparation of any preliminary prospectus, the Time of Sale Prospectus, the Prospectus, the conduct of the offering, and the purchase and sale of the Securities.

(b) The Company acknowledges that in connection with the offering of the Securities: (i) the Underwriters have acted at arm’s length, are not agents of, and owe no fiduciary duties to, the Company or any other person, (ii) the Underwriters owe the Company only those duties and obligations set forth in this Agreement and prior written agreements (to the extent not superseded by this Agreement), if any, and (iii) the Underwriters may have interests that differ from those of the Company. The Company waives to the full extent permitted by applicable law any claims it may have against the Underwriters arising from an alleged breach of fiduciary duty in connection with the offering of the Securities.

12. Counterparts . This Agreement may be signed in two or more counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

13. Applicable Law . This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York.

14. Headings . The headings of the sections of this Agreement have been inserted for convenience of reference only and shall not be deemed a part of this Agreement.

15. Notices . All communications hereunder shall be in writing and effective only upon receipt and if to the Underwriters shall be delivered, mailed or sent to you at the address set forth in Schedule I hereto; and if to the Company shall be delivered, mailed or sent to the address set forth in Schedule I hereto.

 

20


16. Patriot Act . In accordance with the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)), the Underwriters are required to obtain, verify and record information that identifies their respective clients, including the Company, which information may include the name and address of their respective clients, as well as other information that will allow the Underwriters to properly identify their respective clients.

 

21


Very truly yours,
AMTRUST FINANCIAL SERVICES, INC.
By :  

/s/ Stephen Ungar

Name:    Stephen Ungar

Title:

  Senior Vice President, General Counsel and Secretary

[ Signature Page to Underwriting Agreement ]


Accepted as of the date hereof:
MORGAN STANLEY & CO. LLC
By  

/s/ Yurij Slyz

Name:   Yurij Slyz
Title:   Executive Director
UBS SECURITIES LLC
By :  

/s/ Demetrios Tsapralis

Name:   Demetrios Tsapralis
Title:   Executive Director
By :  

/s/ Scott Lopano

Name:   Scott Lopano
Title:   Associate Director
WELLS FARGO SECURITIES, LLC
By :  

/s/ Carolyn Hurley

Name:   Carolyn Hurley
Title:   Director

[ Signature Page to Underwriting Agreement ]


SCHEDULE I

 

Managers:   

Morgan Stanley & Co. LLC

UBS Securities LLC

Wells Fargo Securities, LLC

Managers authorized to release lock-up under Section 6:   

Morgan Stanley & Co. LLC

UBS Securities LLC

Wells Fargo Securities, LLC

Managers authorized to appoint counsel under Section 8:   

Morgan Stanley & Co. LLC

UBS Securities LLC

Wells Fargo Securities, LLC

Registration Statement File No.:    333-204870
Time of Sale Prospectus:    Prospectus dated June 11, 2015 relating to the Shelf Securities and the preliminary prospectus supplement dated March 8, 2016 relating to the Securities
Free Writing Prospectus:    Final Term Sheet filed with the Commission by the Company on March 8, 2016 pursuant to Rule 433 under the Securities Act and attached hereto as Schedule III
Securities to be purchased:    Depositary Shares each representing a 1/40 th interest in a share of 7.75% Non-Cumulative Preferred Stock, Series E, par value $0.01 per share, liquidation preference of $1,000 per share (equivalent to $25 per depositary share)
Number of Firm Shares:    5,000,000 Depositary Shares
Number of Additional Shares:    750,000 Depositary Shares
Purchase Price:    $24.2125 per Depositary Share
Initial Public Offering Price:    $25.00 per Depositary Share
Selling Concession:    $0.50 per Depositary Share
Reallowance:    $0.45 per Depositary Share
Closing Date and Time:    March 15, 2016, 9:00 a.m. EDT

 

I-1


Closing Location:   

Sullivan & Cromwell LLP

125 Broad Street

New York, New York 10004

Address for Notices to Underwriters:   

Morgan Stanley & Co. LLC

1585 Broadway, 29th Floor

New York, NY 10036

Attention: Investment Banking Division

Phone: (212) 761-6691

Facsimile: (212) 507-8999

 

UBS Securities LLC

1285 Avenue of the Americas

New York, NY 10019

Attention: Fixed Income Syndicate

Phone: (203) 719-1088

Facsimile: (203) 719-0495

 

Wells Fargo Securities, LLC

550 South Tryon Street, 5 th Floor

Charlotte, NC 28202

Attention: Transaction Management

Facsimile: (704) 410-0326

Address for Notices to the Company:   

AmTrust Financial Services, Inc.

59 Maiden Lane, 43rd Floor,

New York, NY 10038

Attention: Stephen B. Ungar, Secretary

Phone: (212) 220-7120

Facsimile: (212) 220-7130

 

I-2


SCHEDULE II

 

Underwriter

   Number of Firm Shares
To Be Purchased
 

Morgan Stanley & Co. LLC

     1,250,000   

UBS Securities LLC

     1,250,000   

Wells Fargo Securities, LLC

     1,250,000   

Keefe, Bruyette & Woods, Inc.

     500,000   

RBC Capital Markets, LLC

     500,000   

William Blair & Company, L.L.C.

     112,500   

JMP Securities LLC

     112,500   

Compass Point Research & Trading LLC

     25,000   
  

 

 

 

Total:

     5,000,000   
  

 

 

 

 

II-1


SCHEDULE III

Final Term Sheet

 

III-1


PRICING TERM SHEET

Dated March 8, 2016

A M T RUST F INANCIAL S ERVICES , I NC .

5,000,000 Depositary Shares

Each Representing 1/40 th Interest in a Share of

7.75% Non-Cumulative Preferred Stock, Series E (the “Offering”)

The information in this pricing term sheet relates only to the Offering and should be read together with the preliminary prospectus supplement dated March 8, 2016 to the prospectus dated June 11, 2015, relating to the Offering, including the documents incorporated by reference therein (the “Preliminary Prospectus Supplement”). The information in this pricing term sheet supplements the Preliminary Prospectus Supplement and supersedes the information in the Preliminary Prospectus Supplement to the extent inconsistent with the information contained therein. Terms used herein but not defined herein shall have the respective meanings as set forth in the Preliminary Prospectus Supplement.

 

Issuer:    AmTrust Financial Services, Inc.
Title of Securities:    Depositary Shares (the “Depositary Shares”), Each Representing 1/40 th Interest in a Share of 7.75% Non-Cumulative Preferred Stock, Series E (the “Series E Preferred Stock”)
Size:    $125,000,000 (5,000,000 Depositary Shares)
Over-allotment Option:    $18,750,000 (750,000 Depositary Shares), exercisable for 30 days following March 8, 2016
Term:    Perpetual, unless redeemed at the option of the issuer, as described below
Liquidation Preference:    $1,000 per share of Series E Preferred Stock (equivalent to $25 per Depositary Share)
Dividend Rate (Non-Cumulative):    At a rate per annum equal to 7.75% from the date of issuance or the immediately preceding Dividend Payment Date.
Dividend Payment Dates:    15 th day of March, June, September and December of each year, commencing on June 15, 2016, when, as and if declared by the board of directors of the Issuer
Optional Redemption:    On and after March 15, 2021, the Series E Preferred Stock represented by the Depositary Shares may be redeemed at AmTrust Financial Services, Inc.’s option, for cash, in whole or in part, at a redemption price equal to $1,000 per share (equivalent to $25 per Depositary Share), plus declared and unpaid dividends on the shares of Series E Preferred Stock called for redemption, if any, for prior dividend periods, if any, plus accrued but unpaid dividends (whether or not declared) thereon for the then-current dividend period to, but excluding, the date of redemption, without accumulation of any other undeclared dividends. The Depositary Shares will be redeemed if and to the extent that the related shares of Series E Preferred Stock are redeemed by AmTrust Financial Services, Inc. Holders of Depositary Shares will not have the right to require the redemption or repurchase of the Series E Preferred Stock.

 

III-2


Pricing Date:    March 8, 2016
Settlement Date:    March 15, 2016
Public Offering Price:    $25 per Depositary Share
Underwriting Discounts and Commissions:    $0.7875 per Depositary Share
Net Proceeds (before expenses) to Issuer:    $121,062,500 (excluding any exercise of the Over-allotment Option)
Joint Book-Running Managers:   

Morgan Stanley & Co. LLC

UBS Securities LLC

Wells Fargo Securities, LLC

Lead Manager:    Keefe, Bruyette & Woods, Inc.
Co-Managers:   

RBC Capital Markets, LLC

William Blair & Company, L.L.C.

JMP Securities LLC

Compass Point Research & Trading LLC

Listing:    The Issuer intends to apply to list the Depositary Shares representing the Series E Preferred Stock on the New York Stock Exchange under the symbol “AFSI PR E”.
CUSIP/ISIN:    032359 846/US0323598468

******

This material is for your information only and is not intended to be used by anyone other than you. This information does not purport to be a complete description of these securities. The issuer has filed a registration statement, including a prospectus, with the SEC for the offering to which this communication relates. Before you invest, you should read the prospectus in that registration statement and 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, the issuer, any underwriter or any dealer participating in the offering will arrange to send you the prospectus if you request it by calling Morgan Stanley & Co. LLC at (866) 718-1649, UBS Securities LLC at (888) 827-7275 or Wells Fargo Securities, LLC at (800) 645-3751.

 

III-3


ANNEX A-1

Form of Sidley Austin Opinion

 

A-1-1


ANNEX A-2

Form of Opinions of Stephen B. Ungar, General Counsel and Secretary of AmTrust Financial Services, Inc. and Various External and In-house Counsel of Material Subsidiaries Listed on Annex B

 

A-2-1


ANNEX B

Material Subsidiaries

 

1. AmTrust Europe, Ltd.

 

2. AmTrust International Insurance Ltd.

 

3. Technology Insurance Company, Inc.

 

4. Wesco Insurance Company

 

B-1

Exhibit 3.1

CERTIFICATE OF DESIGNATIONS

OF

7.75% NON-CUMULATIVE PREFERRED STOCK, SERIES E

OF

AMTRUST FINANCIAL SERVICES, INC.

Pursuant to Section 151 of the

General Corporation Law of the State of Delaware

AmTrust Financial Services, Inc. (the “ Corporation ”), a corporation organized and existing under the General Corporation Law of the State of Delaware, does hereby certify that:

The Pricing Committee of the Board of Directors of the Corporation, in accordance with the resolutions of the Board of Directors of the Corporation dated June 23, 2014, June 9, 2015 and February 23, 2016, the Amended and Restated Certificate of Incorporation of the Corporation (the “ Certificate of Incorporation ”) and applicable law, adopted the following resolution on March March 8, 2016, creating a series of 143,750 shares of preferred stock, par value $0.01 per share, of the Corporation designated as “7.75% Non-Cumulative Preferred Stock, Series E”:

RESOLVED , that pursuant to the authority granted to and vested in the Pricing Committee of the Board of Directors of the Corporation, by the Board of Directors of the Corporation on June 23, 2014, June 9, 2015, and February 23, 2016, the Certificate of Incorporation of the Corporation, the Amended and Restated Bylaws of the Corporation and applicable law, a series of preferred stock, par value $0.01 per share, of the Corporation be, and hereby is, created and designated as the “7.75% Non-Cumulative Preferred Stock, Series E” and the Pricing Committee hereby fixes and determines the number of shares, the designations, voting power, preferences, participations, optional, relative or special rights, and the qualifications, limitations and restrictions thereof, of the shares of such series as set forth below:

Section 1. Designation .

The designation of the series of preferred stock shall be “7.75% Non-Cumulative Preferred Stock, Series E” (hereinafter referred to as the “ Series E Preferred Stock ”).

Section 2. Number of Shares .

The Series E Preferred Stock is a single series of authorized preferred stock consisting of 143,750 shares. Such number may from time to time be increased (but not in excess of the total number of authorized shares of preferred stock) or decreased (but not below the number of shares of Series E Preferred Stock then outstanding) by further resolution duly adopted by the


Board of Directors of the Corporation or any duly authorized committee of the Board of Directors of the Corporation and by the filing of a certificate pursuant to the provisions of the General Corporation Law of the State of Delaware stating that such increase or reduction, as the case may be, has been so authorized; provided that any such additional shares of Series E Preferred Stock are not treated as “disqualified preferred stock” within the meaning of Section 1059(f)(2) of the Internal Revenue Code and such additional shares of Series E Preferred Stock are otherwise treated as fungible with the Series E Preferred Stock established hereby for U.S. federal income tax purposes. The additional shares of Series E Preferred Stock would form a single series with the outstanding Series E Preferred Stock. The Corporation shall have the authority to issue fractional shares of Series E Preferred Stock.

Section 3. Definitions .

As used herein with respect to the Series E Preferred Stock:

Business Day ” means each Monday, Tuesday, Wednesday, Thursday or Friday on which banking institutions are not authorized or obligated by law, regulation or executive order to close in New York, New York.

Certificate of Designations ” means this Certificate of Designations relating to the Series E Preferred Stock, as it may be amended from time to time.

Certificate of Incorporation ” means the Amended and Restated Certificate of Incorporation of the Corporation, as amended from time to time.

Common Stock ” means the Common Stock, par value $0.01 per share, of the Corporation.

Corporation ” means AmTrust Financial Services, Inc.

Dividend Payment Date ” shall have the meaning set forth in Section 4(a) hereof.

Dividend Period ” shall have the meaning set forth in Section 4(a) hereof.

Dividend Record Dat e” shall have the meaning set forth in Section 4(a) hereof

DTC ” means The Depository Trust Company, together with its successors and assigns.

Junior Stock ” means any class or series of capital stock of the Corporation that ranks junior to the Series E Preferred Stock either as to the payment of dividends or as to the distribution of assets upon liquidation, dissolution or winding-up of the Corporation.

Nonpayment Event ” shall have the meaning set forth in Section 7(b) hereof.

Parity Stock ” means the previously issued 6.75% Non-Cumulative Preferred Stock, Series A, $0.01 par value per share, $25 liquidation preference per share (the “ Series A Preferred Stock ”), the previously issued 7.25% Non-Cumulative Preferred Stock, Series B, $0.01 par value per share, $1,000 liquidation preference per share (the “ Series B Preferred Stock ”), the

 

2


previously issued 7.625% Non-Cumulative Preferred Stock, Series C, $0.01 par value per share, $1,000 liquidation preference per share (the “ Series C Preferred Stock ”), the previously issued 7.50% Non-Cumulative Preferred Stock, Series D, $0.01 par value per share, $1,000 liquidation preference per share (the “ Series D Preferred Stock ”) and any class or series of capital stock of the Corporation that ranks equally with the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series E Preferred Stock with respect to the payment of dividends and in the distribution of assets on the liquidation, dissolution or winding-up of the Corporation.

Preferred Stock Director ” shall have the meaning set forth in Section 7(b) hereof.

Series A Preferred Stock ” shall have the meaning set forth in the definition of Parity Stock hereof.

Series B Preferred Stock ” shall have the meaning set forth in the definition of Parity Stock hereof.

Series C Preferred Stock ” shall have the meaning set forth in the definition of Parity Stock hereof.

Series D Preferred Stock ” shall have the meaning set forth in the definition of Parity Stock hereof.

Series E Preferred Stock ” shall have the meaning set forth in Section 1 hereof.

Voting Preferred Stock ” means, with regard to any election or removal of a Preferred Stock Director or any other matter as to which the holders of Series E Preferred Stock are entitled to vote as specified in Section 7 hereof, any and all series of Parity Stock upon which like voting rights have been conferred and are exercisable with respect to such matter.

Section 4. Dividends .

(a) Rate . Dividends on the Series E Preferred Stock will not be mandatory. Holders of Series E Preferred Stock shall be entitled to receive, only when, as and if declared by the Board of Directors of the Corporation or a duly authorized committee of the Board of Directors out of lawfully available funds for the payment of dividends, non-cumulative cash dividends from the original issue date at the annual rate of 7.75% of the liquidation preference amount of $1,000.00 per share of Series E Preferred Stock. Such dividends shall be payable quarterly in arrears on the 15th day of March, June, September and December of each year (each, a “ Dividend Payment Date ”), commencing on June 15, 2016; provided that if any such Dividend Payment Date would otherwise occur on a day that is not a Business Day, such Dividend Payment Date shall instead be (and any dividend payable on the Series E Preferred Stock on such Dividend Payment Date shall instead be payable on) the immediately succeeding Business Day with the same force and effect as if made on such date, and no additional dividends shall accrue on the amount so payable from such date to such next succeeding Business Day. In the event that the Corporation elects to issue additional shares of Series E Preferred Stock after the original issue date of the Series E Preferred Stock in accordance with Section 2, dividends on such additional shares of Series E Preferred Stock may accrue from the original issue date or from any other date as the Corporation shall specify at the time such additional shares of Series E Preferred Stock are issued.

 

3


Dividends, if so declared, that are payable on Series E Preferred Stock on any Dividend Payment Date will be payable to holders of record of Series E Preferred Stock as they appear on the share register of the Corporation on the applicable record date, which shall be March 1, June 1, September 1 and December 1, as applicable, immediately preceding the applicable Dividend Payment Date or such other record date fixed by the Board of Directors or a duly authorized committee of the Board of Directors that is not more than 60 nor less than 10 days prior to such Dividend Payment Date (each, a “ Dividend Record Date ”). Any such day that is a Dividend Record Date shall be a Dividend Record Date whether or not such day is a Business Day.

Each dividend period (a “ Dividend Period ”) shall commence on and include a Dividend Payment Date and shall end on and include the calendar day preceding the next Dividend Payment Date, except that (x) the initial Dividend Period for Series E Preferred Stock issued on the original issue date shall commence on and include the date of original issue of the Series E Preferred Stock, (y) the initial Dividend Period for any Series E Preferred Stock issued after the original issue date shall commence on and include such date as the Board of Directors or a duly authorized committee of the Board of Directors shall determine and publicly disclose at the time such additional shares are issued; and (z) the final Dividend Period with respect to redeemed shares shall end on and include the calendar day preceding the date of redemption. Dividends payable on the Series E Preferred Stock in respect of any Dividend Period shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Dividends payable in respect of a Dividend Period shall be payable in arrears (i.e., on the first Dividend Payment Date after such Dividend Period).

(b) Non-Cumulative Dividends . Dividends on the Series E Preferred Stock shall be non-cumulative. Accordingly, if the Board of Directors of the Corporation or a duly authorized committee of the Board of Directors does not declare a dividend on the Series E Preferred Stock payable in respect of any Dividend Period before the related Dividend Payment Date, in full or otherwise, then such undeclared dividends shall not cumulate and will not accrue and will not be payable and the Corporation shall have no obligation to pay such undeclared dividends for the applicable Dividend Period on the related Dividend Payment Date or at any future time or to pay interest with respect to such dividends, whether or not dividends are declared on the Series E Preferred Stock or any other Parity Stock the Corporation may issue in the future.

(c) Priority of Dividends . So long as any Series E Preferred Stock remains outstanding for any Dividend Period, unless the full dividends for the latest completed Dividend Period on all outstanding Series E Preferred Stock and any Parity Stock have been declared and paid (or declared and a sum sufficient for the payment thereof has been set aside), (1) no dividend shall be declared or paid on the Common Stock or any other Junior Stock (other than a dividend payable solely in Common Stock or other Junior Stock), (2) no Common Stock or other Junior Stock shall be purchased, redeemed or otherwise acquired for consideration by the Corporation, directly or indirectly (other than (i) as a result of a reclassification of Junior Stock for or into other Junior Stock, or the exchange or conversion of one share of Junior Stock for or into another share of Junior Stock, or (ii) through the use of the proceeds of a substantially

 

4


contemporaneous sale of Junior Stock) nor shall monies be paid to or made available for a sinking fund for the redemption of such stock (it being understood that the provisions of this clause (2) shall not apply to grants or settlements of grants pursuant to any equity compensation plan adopted by the Corporation), and (3) no shares of Series E Preferred Stock or Parity Stock shall be repurchased, redeemed or otherwise acquired for consideration by the Corporation other than pursuant to pro rata offers to purchase all, or a pro rata portion, of the Series E Preferred Stock and such Parity Stock except by conversion into or exchange for Junior Stock.

When dividends are not paid (or declared and a sum sufficient for payment thereof set aside) in full on any Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within the Dividend Period related to such Dividend Payment Date) upon the Series E Preferred Stock and any Parity Stock, all dividends declared by the Board of Directors or a duly authorized committee thereof on the Series E Preferred Stock and all such Parity Stock and payable on such Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within the Dividend Period related to such Dividend Payment Date) shall be declared by the Board of Directors or such committee of the Board of Directors pro rata so that the respective amounts of such dividends shall bear the same ratio to each other as all declared but unpaid dividends per share on the Series E Preferred Stock and all Parity Stock payable on such Dividend Payment Date (or, in the case of Parity Stock having dividend payment dates different from the Dividend Payment Dates, on a dividend payment date falling within the Dividend Period related to such Dividend Payment Date) bear to each other.

Section 5. Liquidation Rights .

(a) Liquidation . Upon any voluntary or involuntary liquidation, dissolution or winding-up of the Corporation, holders of Series E Preferred Stock and any Parity Stock shall be entitled to receive, out of the assets of the Corporation available for distribution to stockholders of the Corporation, after satisfaction of all liabilities and obligations to creditors of the Corporation, if any, but before any distribution of such assets or proceeds is made to or set aside for the holders of Common Stock and any other Junior Stock, a liquidating distribution in an amount equal to the liquidation preference of $1,000.00 per share of Series E Preferred Stock or the amount of the liquidation preference of such Parity Stock, as applicable, plus any declared and unpaid dividends. Holders of Series E Preferred Stock will not be entitled to any other amounts from the Corporation after they have received their full liquidation preference plus any declared and unpaid dividends.

(b) Partial Payment . If, in any distribution described in Section 5(a) above, the assets of the Corporation or proceeds thereof are not sufficient to pay the liquidation distribution in full to all holders of Series E Preferred Stock and all holders of any Parity Stock, the amounts paid to the holders of Series E Preferred Stock and to the holders of all such other Parity Stock shall be paid pro rata in accordance with the respective aggregate liquidation distribution of the holders of Series E Preferred Stock and the holders of all such other Parity Stock but only to the extent the Corporation has assets or proceeds thereof available after satisfaction of all liabilities to creditors and the claims of holders of any preferred stock of the Corporation ranking senior to the Series E Preferred Stock and such Parity Stock with respect to the distribution of assets upon any

 

5


liquidation, dissolution or winding-up of the Corporation. In any such distribution, the liquidation distribution to any holder of preferred stock of the Corporation shall be the amount otherwise payable to such holder in such distribution, including any declared and unpaid dividends (and, in the case of any holder of shares of preferred stock of the Corporation other than Series E Preferred Stock and on which dividends accrue on a cumulative basis, an amount equal to any unpaid, accrued cumulative dividends, whether or not declared, as applicable).

(c) Residual Distributions . If the liquidation distribution has been paid in full to all holders of Series E Preferred Stock and any holders of Parity Stock and preferred stock ranking senior to the Series E Preferred Stock with respect to the distribution of assets upon the liquidation, dissolution or winding-up of the Corporation, the holders of other shares of the Corporation shall be entitled to receive all remaining assets of the Corporation (or proceeds thereof) according to their respective rights and preferences.

(d) Merger, Consolidation and Sale of Assets Not Liquidation . For purposes of this Section 5, the merger or consolidation of the Corporation with any other entity, including a merger or consolidation in which the holders of Series E Preferred Stock receive cash, securities or other property for their shares, or the sale or transfer of all or substantially all of the property and assets of the Corporation for cash, securities or other property, shall not constitute a liquidation, dissolution or winding up of the Corporation.

Section 6. Redemption .

(a) Optional Redemption . The Series E Preferred Stock is not redeemable prior to March 15, 2021. At any time on or after March 15, 2021, the Corporation shall be entitled (but not obligated) to redeem, in whole or in part from time to time, the Series E Preferred Stock, at a redemption price equal to $1,000.00 per share plus declared and unpaid dividends on the shares of Series E Preferred Stock called for redemption for prior dividend periods, if any, plus accrued but unpaid dividends (whether or not declared) for the then-current dividend period, to, but excluding, the date of redemption, without accumulation of any other undeclared dividends.

(b) Notice of Redemption . Notice of every redemption of Series E Preferred Stock shall be given by first class mail, addressed to the holders of record of the Series E Preferred Stock to be redeemed at their respective last addresses appearing on the share register of the Corporation, mailed at least 30 days and not more than 60 days before the date fixed for redemption. Any notice mailed as provided in this subsection shall be conclusively presumed to have been duly given, whether or not the holder receives such notice, but failure duly to give such notice by mail, or any defect in such notice or in the mailing thereof, to any holder of shares of Series E Preferred Stock designated for redemption shall not affect the validity of the proceedings for the redemption of any other share of Series E Preferred Stock. Notwithstanding the foregoing, if the Series E Preferred Stock or any depositary shares representing interests in the Series E Preferred Stock are issued in book-entry form through DTC or any other similar facility, notice of redemption may be given to the holders of Series E Preferred Stock in any manner permitted by such facility. Each such notice given to a holder shall state: (1) the redemption date; (2) the number of shares of Series E Preferred Stock to be redeemed and, if less than all the shares of Series E Preferred Stock held by such holder are to be redeemed, the number of such shares of Series E Preferred Stock to be redeemed from such holder; (3) the

 

6


redemption price; and (4) that the shares of Series E Preferred Stock should be delivered via book entry transfer or the place or places where certificates for such shares of Series E Preferred Stock are to be surrendered for payment of the redemption price.

(c) Record Date . The redemption price for any shares of Series E Preferred Stock redeemed pursuant to this Section 6 shall be payable on the redemption date to the holder of such shares against book entry transfer or surrender of the certificate(s) evidencing such shares to the Corporation or its agent.

(d) Payment of Dividends on Redeemed Shares . Any declared but unpaid dividends payable on a redemption date that occurs subsequent to the Dividend Record Date for a Dividend Period shall not be paid to the holder entitled to receive the redemption price on the redemption date, but rather shall be paid to the holder of record of the redeemed shares of Series E Preferred Stock on such Dividend Record Date relating to the Dividend Payment Date as provided in Section 4 above.

(e) Partial Redemption . In case of any redemption of only part of the shares of the Series E Preferred Stock at the time outstanding, the shares to be redeemed shall be selected either pro rata or by lot; provided, however, that the Corporation may redeem only whole and not fractional shares of Series E Preferred Stock. Subject to the provisions hereof, the Corporation shall have full power and authority to prescribe the terms and conditions upon which Series E Preferred Stock shall be redeemed from time to time. If fewer than all of the shares of Series E Preferred Stock represented by any certificate are redeemed, a new certificate shall be issued representing the unredeemed shares without charge to the holder thereof.

(f) Effectiveness of Redemption . If notice of redemption has been duly given and if on or before the redemption date specified in the notice all funds necessary for the redemption and to pay declared and unpaid dividends have been set aside by the Corporation for the benefit of the holders of the shares of Series E Preferred Stock called for redemption, so as to be and continue to be available therefor, then, notwithstanding that any certificate for any share so called for redemption has not been surrendered for cancellation or transferred via book entry, on and after the redemption date, no further dividends will be declared on the shares of Series E Preferred Stock called for redemption, all shares of Series E Preferred Stock called for redemption shall no longer be deemed outstanding and all rights with respect to such shares shall forthwith on such redemption date cease and terminate, except only the right of the holders thereof to receive the redemption price, without interest.

(g) No Sinking Fund . The Series E Preferred Stock is not subject to any mandatory redemption, sinking fund, retirement fund or purchase fund or other similar provisions. Holders of Series E Preferred Stock have no right to require redemption, repurchase or retirement of any shares of Series E Preferred Stock.

Section 7. Voting Rights .

(a) General . The holders of Series E Preferred Stock shall not have any voting rights except as set forth below or as otherwise from time to time required by law.

 

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(b) Right To Elect Two Directors Upon Nonpayment Events . Whenever dividends on any shares of Series E Preferred Stock shall not have been declared and paid for the equivalent of six or more Dividend Periods, whether or not for consecutive Dividend Periods (a “ Nonpayment Event ”), the holders of Series E Preferred Stock, together with the holders of any outstanding shares of Voting Preferred Stock, voting together as a single class, shall be entitled to elect two additional directors to the Board of Directors of the Corporation (the “ Preferred Stock Directors ”), provided that it shall be a qualification for election for any such Preferred Stock Director that the election of such director shall not cause the Corporation to violate the corporate governance requirements of any securities exchange or other trading facility on which securities of the Corporation may then be listed or quoted that listed or quoted companies must have a majority of independent directors. The number of Preferred Stock Directors on the Board of Directors shall never be more than two at any one time.

In the event that the holders of the Series E Preferred Stock, and any such other holders of Voting Preferred Stock, shall be entitled to vote for the election of the Preferred Stock Directors following a Nonpayment Event, the number of directors on the Corporation’s Board of Directors shall automatically be increased by two and such directors shall be initially elected following such Nonpayment Event at a special or annual meeting called at the request of the holders of record of at least 20% of the aggregate voting power of the Series E Preferred Stock or of any other such series of Voting Preferred Stock then outstanding (unless such request for a special meeting is received less than 90 days before the date fixed for the next annual or special meeting of the stockholders of the Corporation, in which event such election shall be held at such next annual or special meeting of stockholders), and at each subsequent annual meeting of stockholders of the Corporation, so long as the rights related to a Nonpayment Event remain in effect. Such request to call a special meeting for the initial election of the Preferred Stock Directors after a Nonpayment Event shall be made by written notice, signed by the requisite holders of shares of Series E Preferred Stock or Voting Preferred Stock, and delivered to the Secretary of the Corporation in such manner as provided for in Section 14 below, or as may otherwise be required by applicable law.

If and when dividends have been paid (or declared and a sum sufficient for payment thereof set aside) in full on the Series E Preferred Stock for at least four consecutive Dividend Periods after a Nonpayment Event, then the right of the holders of Series E Preferred Stock to elect the Preferred Stock Directors shall cease (but subject always to revesting of such voting rights in the case of any future Nonpayment Event pursuant to this Section 7) and the number of Dividend Periods in which dividends have not been declared and paid shall be reset to zero, and, if and when any rights of holders of Series E Preferred Stock and Voting Preferred Stock to elect the Preferred Stock Directors shall have ceased, the terms of office of all the Preferred Stock Directors shall forthwith terminate and the number of directors constituting the Board of Directors shall automatically decrease by two. In determining whether dividends have been paid for four consecutive Dividend Periods following a Nonpayment Event, the Corporation may take account of any dividends it elects to pay for such a Dividend Period after the regular Dividend Payment Date for that period has passed.

Any Preferred Stock Director may be removed at any time without cause by the holders of record of a majority of the aggregate voting power of Series E Preferred Stock and Voting Preferred Stock then outstanding (voting together as a single class), when they have the voting

 

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rights described above. Until the right of the holders of Series E Preferred Stock and any Voting Preferred Stock to elect the Preferred Stock Directors shall cease, any vacancy in the office of a Preferred Stock Director (other than prior to the initial election of Preferred Stock Directors after a Nonpayment Event) may be filled by the written consent of the Preferred Stock Director remaining in office, or if none remains in office, by a vote of the holders of record of a majority of the outstanding shares of the Series E Preferred Stock and any Voting Preferred Stock (voting together as a single class), when they have the voting rights described above. Any such vote of stockholders to remove, or to fill a vacancy in the office of, a Preferred Stock Director may be taken at an annual or special meeting of such stockholders called as provided above for an initial election of Preferred Stock Directors after a Nonpayment Event (unless such request is received less than 90 days before the date fixed for the next annual or special meeting of the stockholders of the Corporation, in which event such election shall be held at such next annual or special meeting of stockholders). The Preferred Stock Directors shall each be entitled to one vote per director on any matter that shall come before the Board of Directors for a vote. Each Preferred Stock Director elected at any annual or special meeting of stockholders of the Corporation or by written consent of the other Preferred Stock Director shall hold office until the next annual meeting of the stockholders of the Corporation if such office shall not have previously terminated as above provided.

(c) Other Voting Rights .

(i) Authorization of Senior Stock . So long as any shares of Series E Preferred Stock are outstanding, in addition to any other vote or consent of stockholders required by law or by the Certificate of Incorporation, the affirmative vote or consent of the holders of at least two-thirds of the outstanding shares of Series E Preferred Stock and any Voting Preferred Stock then outstanding and entitled to vote thereon, voting together as a single class, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be necessary to authorize or create, or increase the authorized amount of, any shares of any specific class or series of capital stock of the Corporation ranking senior to the Series E Preferred Stock with respect to the payment of dividends or the distribution of assets on any liquidation, dissolution or winding up of the Corporation.

(ii) Amendment of Series E Preferred Stock; Share Exchanges, Reclassifications, Mergers and Consolidations . So long as any shares of Series E Preferred Stock are outstanding, in addition to any other vote or consent of stockholders required by law or by the Certificate of Incorporation, the affirmative vote or consent of the holders of at least two-thirds of the outstanding shares of Series E Preferred Stock, given in person or by proxy, either in writing without a meeting or by vote at any meeting called for the purpose, shall be necessary for effecting or validating:

(A) any amendment, alteration or repeal of any provision of the Certificate of Incorporation or this Certificate of Designations so as to adversely affect the rights, preferences, privileges or voting powers of the Series E Preferred Stock; or

 

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(B) any consummation of a binding share exchange or reclassification involving the Series E Preferred Stock, or of a merger or consolidation of the Corporation with another corporation or other entity, unless in each case (x) the shares of Series E Preferred Stock remain outstanding or, in the case of any such merger or consolidation with respect to which the Corporation is not the surviving or resulting entity, are converted into or exchanged for preference securities of the surviving or resulting entity or its ultimate parent, in each case, that is an entity organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and (y) such shares of Series E Preferred Stock remaining outstanding or such preference securities, as the case may be, have such rights, preferences, privileges and voting powers, and limitations and restrictions thereof, taken as a whole, as are not less favorable to the holders thereof than the rights, preferences, privileges and voting powers, and limitations and restrictions thereof, of the Series E Preferred Stock immediately prior to such consummation, taken as a whole;

provided, however, that for all purposes of this Section 7(c), (1) any increase in the amount of the Corporation’s authorized but unissued shares of preferred stock, (2) any increase in the amount of the Corporation’s authorized or issued Series E Preferred Stock, and (3) the creation and issuance, or an increase in the authorized or issued amount, of other series of preferred stock of the Corporation ranking equally with or junior to the Series E Preferred Stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) and/or the distribution of assets upon the liquidation, dissolution or winding up of the Corporation, will not be deemed to adversely affect the rights, preferences, privileges or voting powers of the Series E Preferred Stock.

(d) Changes Not Requiring Consent . Without the consent of the holders of the Series E Preferred Stock, so long as such action does not adversely affect the rights, preferences, privileges and voting powers, and limitations and restrictions, of the Series E Preferred Stock, the Board of Directors of the Corporation, by resolution, may, subject to any vote of stockholders required by applicable law or the Certificate of Incorporation, amend, alter, supplement or repeal any terms of the Series E Preferred Stock:

(i) to cure any ambiguity, or to cure, correct or supplement any provision contained in this Certificate of Designations that may be defective or inconsistent; or

(ii) to make any provision with respect to matters or questions arising with respect to the Series E Preferred Stock that is not inconsistent with the provisions of this Certificate of Designations;

provided that any such amendment, alteration, supplement or repeal of any terms of the Series E Preferred Stock effected in order to conform the terms thereof to the description of the terms of the Series E Preferred Stock set forth under “Description of the Series E Preferred Stock” in the prospectus supplement, dated March 8, 2016, to the prospectus, dated June 11, 2015, of the Corporation relating to the offer and sale of the Series E Preferred Stock, shall be deemed not to adversely affect the rights, preferences, privileges and voting powers of the Series E Preferred Stock.

 

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(e) Voting; Liquidation Preference . On each matter on which holders of Series E Preferred Stock are entitled to vote, each share of Series E Preferred Stock will be entitled to one vote, and when shares of any other class or series of the Corporation’s preferred stock have the right to vote with the Series E Preferred Stock as a single class on any matter, the Series E Preferred Stock and the shares of each such other class or series will have one vote for each $1,000.00 of liquidation preference (excluding accrued and unpaid dividends).

(f) Changes After Provision for Redemption . No vote or consent of the holders of Series E Preferred Stock shall be required pursuant to Section 7(b) or (c) above if, at or prior to the time when any such vote or consent would otherwise be required pursuant to such Section, all outstanding shares of Series E Preferred Stock shall have been redeemed, or shall have been called for redemption upon proper notice and sufficient funds shall have been set aside for such redemption, in each case pursuant to Section 6 above.

Section 8. Ranking .

The Series E Preferred Stock will, with respect to the payment of dividends and distributions of assets upon liquidation, dissolution and winding-up of the Corporation, rank senior to Common Stock and any other Junior Stock, equally with any Parity Stock of the Corporation, including other series of preferred stock that the Corporation may issue from time to time in the future the terms of which provide that they rank equally with the Series E Preferred Stock with respect to the payment of dividends and the distribution of assets upon the liquidation, dissolution or winding-up of the Corporation and junior to any series of preferred stock hereafter issued by the Corporation that by their terms are designated to rank senior to the Series E Preferred Stock as to the payment of dividends and distributions upon the liquidation or dissolution or winding-up of the Corporation.

Section 9. Conversion .

The holders of Series E Preferred Stock shall not have any rights to convert such Series E Preferred Stock into shares of any other class of capital stock of the Corporation.

Section 10. Repurchase .

Subject to the limitations imposed herein, the Corporation may purchase and sell Series E Preferred Stock from time to time to such extent, in such manner, and upon such terms as the Board of Directors of the Corporation or any duly authorized committee of the Board of Directors of the Corporation may determine; provided , however , that the Corporation shall not use any of its funds for any such purchase when there are reasonable grounds to believe that the Corporation is, or by such purchase would be, rendered insolvent.

Section 11. Unissued or Reacquired Shares .

Shares of Series E Preferred Stock not issued or which have been issued and redeemed or otherwise purchased or acquired by the Corporation shall be restored to the status of authorized but unissued shares of preferred stock without designation as to series.

 

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Section 12. Preemptive Rights .

The holders of shares of Series E Preferred Stock shall have no preemptive rights with respect to any shares of the Corporation’s capital stock or any of its other securities convertible into or carrying rights or options to purchase any such capital stock.

Section 13. Record Holders .

To the fullest extent permitted by applicable law, the Corporation and the transfer agent for the Series E Preferred Stock may deem and treat the record holder of any share of Series E Preferred Stock as the true and lawful owner thereof for all purposes, and neither the Corporation nor such transfer agent shall be affected by any notice to the contrary.

Section 14. Notices .

All notices or communications in respect of the Series E Preferred Stock shall be sufficiently given if given in writing and delivered in person or by first class mail or if given in such other manner as may be permitted herein, in the Certificate of Incorporation or Bylaws of the Corporation or by applicable law. Notwithstanding the foregoing, if shares of Series E Preferred Stock or depositary shares representing an interest in shares of Series E Preferred Stock are issued in book-entry form through DTC, such notices may be given to the holders of the Series E Preferred Stock in any manner permitted by DTC.

Section 15. Other Rights .

The Series E Preferred Stock shall not have any powers, preferences, privileges or rights other than as set forth herein or in the Certificate of Incorporation or as provided by applicable law.

 

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IN WITNESS WHEREOF, AmTrust Financial Services, Inc. has caused this Certificate of Designations of Series E Preferred Stock to be signed by Stephen B. Ungar, its Senior Vice President, General Counsel and Secretary, this 9th day of March, 2016.

 

AMTRUST FINANCIAL SERVICES, INC.
By:  

/s/ Stephen B. Ungar

Name:    Stephen B. Ungar
Title:  

Senior Vice President, General

Counsel and Secretary

 

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Exhibit 4.1

DEPOSIT AGREEMENT

dated as of March 15, 2016

among

AMTRUST FINANCIAL SERVICES, INC.,

a Delaware corporation,

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC,

a New York limited liability trust company, as Depositary,

AND THE HOLDERS FROM TIME TO TIME OF

THE RECEIPTS EVIDENCING THE DEPOSITARY SHARES

DESCRIBED HEREIN

WHEREAS, it is desired to provide, as hereinafter set forth in this Deposit Agreement, for the deposit of shares of Non-Cumulative Preferred Stock, Series E, $0.01 par value per share, $1,000 liquidation preference per share, of the Company from time to time with the Depositary for the purposes set forth in this Deposit Agreement and for the issuance hereunder of Receipts by the Depositary evidencing Depositary Shares in respect of the Stock so deposited (capitalized terms used herein shall have the meaning assigned to them in Article I below); and

WHEREAS, the Receipts are to be substantially in the form annexed hereto as Exhibit A , with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement.

NOW, THEREFORE, in consideration of the promises contained herein and such other good and valuable consideration, receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS

The following definitions shall for all purposes, unless otherwise indicated, apply to the respective terms used in this Deposit Agreement and the Receipts:

Certificate of Designations ” shall mean the Certificate of Designations to the Amended and Restated Certificate of Incorporation of the Company, filed with the Secretary of State of the State of Delaware, establishing the Stock as a series of preferred stock of the Company.

close of business ” shall mean 5:00 p.m. (New York City time).

Company ” shall mean AmTrust Financial Services, Inc., a Delaware corporation, and its successors.


Deposit Agreement ” shall mean this Deposit Agreement, as amended or supplemented from time to time in accordance with the terms hereof.

Depositary ” shall mean American Stock Transfer & Trust Company, LLC, and any successor depositary hereunder.

Depositary Shares ” shall mean the securities representing a 1/40th interest in one share of Stock, which shall be evidenced by Receipts.

Depositary’s Agent ” shall mean an agent appointed by the Depositary pursuant to Section 7.05 of this Deposit Agreement.

Depositary’s Office ” shall mean the principal office of the Depositary at 6201 15 th Avenue, Brooklyn, New York 11219, at which at any particular time its depositary receipt business shall be administered.

DTC ” shall mean The Depository Trust Company.

DTC Receipt ” shall have the meaning assigned to it in Section 2.01 of this Deposit Agreement.

Person ” shall mean any natural person, partnership, joint venture, firm, corporation, limited liability company, limited liability partnership, unincorporated association, trust or other entity, and shall include any successor (by merger or otherwise) of the foregoing.

Receipt ” shall mean a receipt, substantially in the form set forth as Exhibit A hereto, whether in definitive or temporary form, issued hereunder by the Depositary, evidencing any number of whole Depositary Shares. If the context so requires, the term “Receipt” shall be deemed to include the DTC Receipt (as defined in Section 2.01 hereof).

record holder ” with respect to a Receipt shall mean the Person in whose name a Receipt is registered on the books of the Depositary or any Registrar maintained for such purpose at a given time.

redemption date ” shall have the meaning assigned to it in Section 2.03 of this Deposit Agreement.

Registrar ” shall mean any bank, trust company or registered transfer agent that shall be appointed by the Depositary to register ownership and transfers of Receipts as herein provided and which may include the Depositary.

Securities Act ” shall mean the Securities Act of 1933, as amended.

Stock ” shall mean the Company’s Non-Cumulative Preferred Stock, Series E, $0.01 par value per share, $1,000 liquidation preference per share.

Underwriting Agreement ” shall mean the Underwriting Agreement, dated as of March 8, 2016, by and among the Company and Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities, LLC, as representatives of the several underwriters named in Schedule II thereto.

 

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ARTICLE II

FORM OF RECEIPTS; DEPOSIT OF STOCK; EXECUTION AND DELIVERY,

TRANSFER AND SURRENDER OF RECEIPTS

SECTION 2.01 Book-Entry Form; Form and Transfer of Receipts . All the Depositary Shares shall initially be represented by one or more global receipts (collectively, the “ DTC Receipt ”) registered in the name of DTC or its nominee. The Registrar, or such other entity as is agreed to by DTC, may hold the DTC Receipt as custodian for DTC. The DTC Receipt shall bear such legend or legends as may be required by DTC in order for it to accept the Depositary Shares for its book-entry settlement system. So long as the Receipts are eligible for book-entry settlement with DTC, no Person acquiring Depositary Shares traded on any securities exchange with book-entry settlement through DTC shall receive or be entitled to receive physical delivery of Receipts evidencing such Depositary Shares. Ownership of beneficial interests in the DTC Receipt shall be shown on, and the transfer of such ownership shall be effected through, records maintained by (i) DTC or its nominee for such DTC Receipt or (ii) institutions that have accounts with DTC.

If DTC subsequently ceases to make its book-entry settlement system available for the Depositary Shares, the Company may provide written instructions to the Depositary as to other arrangements for book-entry settlement. In the event that the Depositary Shares are not eligible for, or it is no longer necessary to have the Depositary Shares available in book-entry form, the Company shall provide written instructions to DTC (with prompt written notice thereof to the Depositary) to deliver to the Depositary for cancellation, and the Company shall provide written instructions to the Depositary to cancel the DTC Receipt surrendered to it and to deliver to the beneficial owners of the Depositary Shares previously evidenced by the DTC Receipt definitive Receipts in physical form evidencing their beneficial interest in Depositary Shares. The Depositary shall have no duties, obligations or responsibilities under this paragraph unless and until such written notices have been received by the Depositary. The beneficial owners of Depositary Shares shall not be entitled to receive definitive Receipts in physical form except as herein provided.

Definitive Receipts, if applicable, shall be prepared substantially in the form annexed hereto as Exhibit A , with appropriate insertions, modifications and omissions, as hereinafter provided. Pending the preparation of definitive Receipts, if applicable, the Depositary, upon, and pursuant to, the written order of the Company delivered in compliance with Section 2.02, shall be authorized and instructed to, and shall, execute and deliver temporary Receipts which shall be printed, lithographed, typewritten, mimeographed or otherwise substantially of the tenor of the definitive Receipts in lieu of which they are issued and in each case with such appropriate insertions, omissions, substitutions and other variations as the Persons executing such Receipts may determine (but which do not affect the rights, duties or obligations of the Depositary), as evidenced by their execution of such Receipts. After the preparation of definitive Receipts, the temporary Receipts shall be exchangeable for definitive Receipts upon surrender of the temporary Receipts at the Depositary’s Office, without charge to the holders. Upon surrender for cancellation of any one or more temporary Receipts, the Depositary is hereby

 

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authorized and instructed to, and shall, execute and deliver in exchange therefor definitive Receipts representing the same number of Depositary Shares as represented by the surrendered temporary Receipt or Receipts registered in the name (and only the name) of the holder of the temporary Receipt. Such exchange shall be made at the Company’s expense and without any charge therefor to the holder. Until so exchanged, the temporary Receipts shall in all respects be entitled to the same benefits under this Deposit Agreement and with respect to the Stock, as definitive Receipts.

Receipts shall be executed by the Depositary by the manual or facsimile signature of a duly authorized officer of the Depositary; provided , that if a Registrar for the Receipts (other than the Depositary) shall have been appointed then such Receipts shall also be countersigned by manual or facsimile signature of a duly authorized officer of the Registrar. No Receipt shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose unless it shall have been (i) executed by the manual or facsimile signature of a duly authorized officer of the Depositary or (ii) executed by the manual or facsimile signature of a duly authorized officer of the Registrar for the Receipts, if any. The Depositary shall record on its books each Receipt so signed and delivered as hereinafter provided. The manual or facsimile signatures on the Receipts of individuals who were at any time of execution proper officers of the Depositary or the Registrar, as the case may be, shall constitute adequate signatures hereunder, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the delivery of such Receipts or did not hold such offices on the date of delivery of such Receipts.

Receipts shall be in denominations of any number of whole Depositary Shares.

Receipts may be endorsed with or have incorporated in the text thereof such legends or recitals or changes not inconsistent with the provisions of this Deposit Agreement as may be required by the Depositary and approved by the Company, or which the Company has determined are required to comply with any applicable law or regulation or with the rules and regulations of any securities exchange upon which shares of Stock, the Depositary Shares or the Receipts may be listed or to conform with any usage with respect thereto, or to indicate any special limitations or restrictions to which any particular Receipts are subject, in each case as directed by the Company.

Subject to any limitations set forth in a Receipt or in this Deposit Agreement, title to Depositary Shares evidenced by a Receipt that is properly endorsed, or accompanied by a properly executed instrument of transfer, shall be transferable by delivery of such Receipt with the same effect as if such Receipt were a negotiable instrument; provided, however , that until transfer of a Receipt shall be registered on the books of the Registrar, on behalf of the Depositary, as provided in Section 2.04, the Depositary may, notwithstanding any notice to the contrary, treat the record holder thereof at such time as the absolute owner thereof for the purpose of determining the Person entitled to distributions of dividends or other distributions or payments with respect to the Stock, to exercise any voting or to receive any notice provided for in this Deposit Agreement and for all other purposes.

The Depositary shall not lend any shares of Stock deposited hereunder.

 

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SECTION 2.02 Deposit of Stock; Execution and Delivery of Receipts in Respect Thereof . Subject to the terms and conditions of this Deposit Agreement, the Company may from time to time deposit shares of Stock with the Depositary under this Deposit Agreement by delivery to the Depositary of a certificate or certificates, registered in the name of the Depositary, representing the shares of Stock to be deposited. Such certificate or certificates representing the shares of Stock shall be (i) properly endorsed or, if required by the Depositary, accompanied by a duly executed instrument of transfer or endorsement, in form satisfactory to the Depositary, together with all such certifications as may be required by the Depositary in accordance with the provisions of this Deposit Agreement, and (ii) accompanied by a written order of the Company directing the Depositary to execute and deliver to the Person or Persons named in such order a Receipt or Receipts evidencing in the aggregate the number of Depositary Shares representing interests in such deposited shares of Stock.

All shares of Stock deposited by the Company with the Depositary shall be held by the Depositary at the Depositary’s Office or at such other place or places as the Depositary shall determine.

Upon receipt by the Depositary of a certificate or certificates representing shares of Stock deposited with the Depositary by the Company in accordance with the provisions of this Section 2.02, together with the other documents required as above specified, and upon recordation of the shares of Stock so deposited on the books of the Company (or its duly appointed transfer agent) in the name of the Depositary, the Depositary, subject to the terms and conditions of this Deposit Agreement, shall execute and deliver to, or upon the order of, the Person or Persons named in a written order delivered to the Depositary, a Receipt or Receipts, evidencing in the aggregate the number of Depositary Shares representing interests in the shares of Stock so deposited. Such Receipt or Receipts shall be registered by the Depositary or the Registrar in such name or names as may be requested by the Person or Persons named in the written order. The Depositary shall execute and deliver such Receipts at the Depositary’s Office or such other offices, if any, as such Person may designate. Delivery at other offices shall be at the risk and expense of the Person requesting such delivery.

The DTC Receipt shall provide that it shall evidence the aggregate amount of Depositary Shares from time to time indicated in the records of the Depositary and that the aggregate amount of Depositary Shares evidenced thereby may from time to time be increased or decreased by making adjustments on such records of the Depositary.

Other than in the case of splits, combinations or other reclassifications affecting the Stock, or in the case of dividends or other distributions in the form of shares of Stock, if any, there shall be deposited with the Depositary hereunder not more than 143,750 shares of Stock.

SECTION 2.03 Optional Redemption of Stock . The Stock is not redeemable prior to March 15, 2021. At any time on or after March 15, 2021 the Company shall be entitled (but not obligated) to redeem, in whole or in part from time to time, the Stock; provided, however , that the Company may redeem only whole and not fractional shares of Stock.

Whenever the Company shall elect to redeem deposited shares of Stock in accordance with the provisions of the Company’s Amended and Restated Certificate of

 

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Incorporation, as amended (including the Certificate of Designations), it shall (unless otherwise agreed with the Depositary) give the Depositary not less than 30 days and not more than 60 days prior written notice of the date of such proposed redemption and of the number of such shares of Stock held by the Depositary to be redeemed and the applicable redemption price, determined pursuant to the Company’s Amended and Restated Certificate of Incorporation, as amended (including the Certificate of Designations), including the amount, if any, of declared and unpaid dividends, plus any accrued but unpaid dividends (whether or not declared) for the then-current dividend period to, but not including, the date of such redemption. The Depositary shall mail, first-class postage prepaid, notice of the redemption of shares of Stock and the proposed simultaneous redemption of the Depositary Shares representing the shares of Stock to be redeemed, not less than 30 and not more than 60 days prior to the date fixed for redemption of such shares of Stock and Depositary Shares (the “ redemption date ”), to the holders of record of the Receipts evidencing the shares of Stock to be so redeemed (such holders to be the holders of record on the record date fixed for such redemption pursuant to Section 4.04, if one is so fixed), at the addresses of such holders as the same appear on the records of the Depositary (provided that, if the Receipts evidencing the Depositary Shares are held in book-entry form, the Company may give such notice in any manner permitted by the Depositary), or by such other method approved by the Depositary, in its reasonable discretion; but neither failure to mail any such notice nor any defect in any such notice or in the mailing thereof shall affect the validity of the proceedings for the redemption of any Depositary Shares except as to the holder of the Depositary Shares as to whom such notice was defective or not given.

In connection with the exercise of the right to redeem whole shares of Stock, the Company shall provide the Depositary with such notice in a timely manner sufficient to enable such notice to be mailed to holders in accordance with this Section, and each such notice shall state: (i) the redemption date; (ii) the redemption price per share of Stock; (iii) the number of deposited shares of Stock and Depositary Shares to be redeemed; (iv) if fewer than all the Depositary Shares held by any holder are to be redeemed, the number of such Depositary Shares held by such holder to be so redeemed; (v) the place or places where Receipts evidencing Depositary Shares to be redeemed are to be surrendered for payment of the redemption price; and (vi) the dividend on the Depositary Shares to be redeemed shall cease to accrue on the redemption date. If fewer than all of the Depositary Shares evidenced by a Receipt are called for redemption, the Depositary will select the Depositary Shares to be redeemed pro rata or by lot; provided, however, that the Depositary may select only whole and not fractional Depositary Shares for redemption.

In the event that notice of redemption has been made as described in the second paragraph of this Section 2.03 and the Company shall then have paid in full to the Depositary the redemption price (determined pursuant to Section 6 of the Certificate of Designations) of the shares of Stock deposited with the Depositary to be redeemed (including any declared and unpaid dividends, plus any accrued but unpaid dividends (whether or not declared) for the then-current dividend period to, but not including, the redemption date), the Depositary shall redeem the number of Depositary Shares representing such shares of Stock so called for redemption by the Company and from and after the redemption date (unless the Company shall have failed to redeem the shares of Stock to be redeemed by it as set forth in the Company’s notice provided for in the second paragraph of this Section 2.03), the Depositary Shares called for redemption shall be deemed no longer to be outstanding and all rights of the holders of Receipts evidencing

 

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such Depositary Shares (except the right to receive the redemption price for such Depositary Shares) shall, to the extent of such Depositary Shares, cease and terminate as provided in Section 6 of the Certificates of Designation. Upon surrender in accordance with said notice of the Receipts evidencing such Depositary Shares (properly endorsed or assigned for transfer, if the Depositary shall so require), such Depositary Shares shall be redeemed at a redemption price of $25.00 per Depositary Share plus any declared and unpaid dividends, without regard to any undeclared dividends, to, but not including, the redemption date. The foregoing shall be further subject to the terms and conditions of the Certificate of Designations.

If fewer than all of the Depositary Shares evidenced by a Receipt are called for redemption, the Depositary will deliver upon or promptly after the related redemption date, to the holder of such Receipt upon its surrender to the Depositary, together with payment of the redemption price payable in respect of the Depositary Shares called for redemption, a new Receipt evidencing the Depositary Shares evidenced by such prior Receipt and not called for redemption; provided , however , that the Depositary shall not issue any Receipt evidencing a fractional Depositary Share.

SECTION 2.04 Registration of Transfer of Receipts . Subject to the terms and conditions of this Deposit Agreement, the Registrar, on behalf of the Depositary, shall register on its books transfers of Receipts from time to time upon notice to the Registrar by the Depositary of the surrender of a Receipt for transfer by the holder in person or by duly authorized attorney, which Receipt in each case must be properly endorsed or accompanied by a properly executed instrument of transfer. Upon surrender of a properly endorsed Receipt or Receipt accompanied by an instrument of transfer, the Depositary shall execute a new Receipt or Receipts (or if in book-entry form, shall make appropriate notations) evidencing the same aggregate number of Depositary Shares as those evidenced by the Receipt or Receipts surrendered and deliver such new Receipt or Receipts to or upon the order of the transferee named in the endorsement or instrument of transfer.

SECTION 2.05 Split-Ups and Combinations of Receipts; Surrender of Receipts . Upon surrender of a Receipt or Receipts at the Depositary’s Office or at such other offices as the Depositary may designate for the purpose of effecting a split-up or combination of such Receipt or Receipts, and the receipt by it of all necessary information and documents, subject to the terms and conditions of this Deposit Agreement, the Depositary shall execute and deliver a new Receipt or Receipts (or if in book-entry form, shall make appropriate notations) to the holder thereof or to such holder’s order in the denominations requested, evidencing the aggregate number of Depositary Shares evidenced by the Receipt or Receipts surrendered, and shall deliver such new Receipt or Receipts to or upon such holder’s order of the Receipt or Receipts so surrendered; provided , however , that the Depositary shall not issue any Receipt evidencing a fractional Depositary Share. The Depositary shall give prompt notice of such action and the certificate numbers to the Registrar for the purpose of recording such split-up or consolidation.

SECTION 2.06 Withdrawal of Shares of Stock; Surrender of Receipts . Any holder of a Receipt or Receipts may withdraw any or all of the deposited shares of Stock represented by the Depositary Shares evidenced by such Receipt or Receipts and all money and other property, if any, represented by such Depositary Shares by surrendering such Receipt or Receipts at the Depositary’s Office; provided, however, that a holder of a Receipt or Receipts may not withdraw

 

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such shares of Stock (or money and other property, if any, represented thereby) which have previously been called for redemption; and provided, further, that a holder of a Receipt or Receipts may withdraw only increments of whole shares of Stock (or money and other property, if any, represented thereby). After such surrender, without unreasonable delay, the Depositary shall notify the Transfer Agent for the shares of Stock and shall deliver, or cause to be delivered, to such holder, or to the person or persons designated by such holder as hereinafter provided, the number of whole shares of Stock and all such money and other property, if any, represented by the Depositary Shares evidenced by the Receipt or Receipts so surrendered for withdrawal, but holders of such whole shares of Stock will not thereafter be entitled to deposit such shares of Stock hereunder or to receive Depositary Shares therefor. If the Receipt or Receipts delivered by the holder to the Depositary in connection with such withdrawal shall evidence a number of Depositary Shares in excess of the number of Depositary Shares representing the number of whole shares of deposited Stock to be withdrawn, the Depositary shall at the same time, in addition to such whole shares of Stock and such money and other property, if any, to be withdrawn, deliver to such holder, or (subject to Section 2.04) upon his order, a new Receipt or Receipts evidencing such excess number of Depositary Shares; provided , however , that the Depositary shall not issue any Receipt evidencing a fractional Depositary Share. Delivery of such whole shares of Stock and such money and other property being withdrawn may be made by the delivery of such certificates, documents of title and other instruments as the Depositary may deem appropriate, which, if required by the Depositary, shall be properly endorsed or accompanied by proper instruments of transfer.

If the deposited shares of Stock and the money and other property being withdrawn are to be delivered to a person or persons other than the record holder of the Receipt or Receipts being surrendered for withdrawal of shares of Stock, such holder shall execute and deliver to the Depositary a written order so directing the Depositary and the Depositary may require that the Receipt or Receipts surrendered by such holder for withdrawal of such shares of Stock be properly endorsed in blank or accompanied by a properly executed instrument of transfer or endorsement in blank and such other document as the Depositary shall determine are reasonably required hereunder, including those documents specified in Section 3.01.

The Depositary shall deliver, or cause to be delivered, the deposited shares of Stock and the money and other property, if any, represented by the Depositary Shares evidenced by Receipts surrendered for withdrawal at the Depositary’s Office, except that, at the request, risk and expense of the holder surrendering such Receipt or Receipts and for the account of the holder thereof, such delivery may be made at such other place as may be designated by such holder.

SECTION 2.07 Limitations on Execution and Delivery, Transfer, Split-Up, Combination, Surrender and Exchange of Receipts . As a condition precedent to the execution and delivery, registration of transfer, split-up, combination, surrender or exchange of any Receipt, the Depositary, any of the Depositary’s Agents or the Company may require any or all of the following: (i) payment to it of a sum sufficient for the payment (or, in the event that the Depositary or the Company shall have made such payment, the reimbursement to it) of any taxes, charges or expenses (including any such tax or charge with respect to shares of Stock being deposited or withdrawn) payable by the holder of a Receipt pursuant to Section 5.08, (ii) the production of evidence satisfactory to it as to the identity and genuineness of any

 

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signature (or the authority of any signature) and/or (iii) compliance with the rules and regulations of any governmental body, any stock exchange or any applicable self regulatory body, or such other regulations, if any, as the Depositary or the Company may establish consistent with the provisions of this Deposit Agreement.

The delivery of Receipts against the shares of Stock deposited with the Depositary may be suspended, the registration of transfer of Receipts may be refused and the registration of transfer, split-up, combination, surrender or exchange of outstanding Receipts may be suspended (i) during any period when the register of stockholders of the Company is closed or (ii) if any such action is deemed reasonably necessary by the Depositary, any of the Depositary’s Agents or the Company at any time or from time to time because of any requirement of law or of any government, governmental body or commission or stock exchange or under any provision of this Deposit Agreement.

SECTION 2.08 Lost Receipts, Etc . If any mutilated Receipt is surrendered to the Depositary, the Depositary shall execute and deliver in exchange therefor a new Receipt of like form and tenor in exchange and substitution for such mutilated Receipt. In case any Receipt shall be destroyed, lost or stolen, then, in the absence of notice to the Depositary that such Receipt has been acquired by a bona fide purchaser, the Depositary shall execute and deliver a Receipt to the holder thereof of like form and tenor in exchange and substitution for such destroyed, lost or stolen Receipt, upon (i) the filing by the holder thereof with the Depositary of evidence satisfactory to the Depositary and the Company of such destruction or loss or theft of such Receipt, of the authenticity thereof and of such holder’s ownership thereof, (ii) the holder’s furnishing the Depositary with indemnification satisfactory to the Depositary and the Company, (iii) the holder’s payment of any reasonable expense (including reasonable fees, charges and expenses of the Depositary), and (iv) the holder’s satisfying any other reasonable requirement imposed by the Depositary and the Company.

SECTION 2.09 Cancellation and Destruction of Surrendered Receipts . All Receipts surrendered to the Depositary or any Depositary’s Agent shall be canceled by the Depositary. Except as prohibited by applicable law or regulation, the Depositary is authorized, but not required, to destroy all Receipts so canceled. Any Receipt evidenced in book-entry form shall be deemed canceled in proportion to the amount of Depositary Shares evidenced by the DTC Receipt to be reduced.

ARTICLE III

CERTAIN OBLIGATIONS OF THE HOLDERS OF RECEIPTS ,

THE COMPANY, AND THE DEPOSITARY

SECTION 3.01 Filing Proofs, Certificates and Other Information . Any holder of a Receipt may be required from time to time to file such proof of residence or other matters or other information, to obtain such guaranties of signature, to execute such certificates and to make such customary representations and warranties consistent with the terms of the Stock as the Depositary may deem necessary or proper or the Company may require by written notice to the Depositary. The Depositary or the Company may withhold or delay the delivery of any Receipt, the transfer, redemption, or exchange of any Receipt, the withdrawal of the deposited shares of Stock represented by the Depositary Shares evidenced by any Receipt, the distribution of any

 

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dividend or other distribution or the sale of any rights or of the proceeds thereof, until such proof or other information is filed or such certificates are executed or such representations and warranties are made.

SECTION 3.02 Payment of Taxes or Other Governmental Charges . Holders of Receipts shall be obligated to make payments to the Depositary of certain fees, taxes, charges and expenses as provided in Section 5.08, or provide evidence satisfactory to the Depositary that such fees, taxes, charges and expenses have been paid. Registration of transfer or exchange of any Receipt, or any withdrawal of the shares of Stock represented by the Depositary Shares evidenced by such Receipt, may be refused and delivery of all money or other property, if any, represented by the Depositary Shares evidenced by such Receipt may be refused until any such payment due is made, and any dividends, interest payments or other distributions may be withheld or all or any part of the shares of Stock or other property represented by the Depositary Shares evidenced by such Receipt and not theretofore sold may be sold for the account of the holder thereof (after attempting by reasonable means to notify such holder prior to such sale), and such dividends, interest payments or other distributions or the proceeds of any such sale may be applied to any payment of such fees, taxes, charges or expenses, the holder of such Receipt remaining liable for any deficiency.

SECTION 3.03 Warranty as to Stock . The Company hereby represents and warrants to the Depositary that the Stock, when issued and delivered against payment therefor in accordance with the Underwriting Agreement and the Company’s Amended and Restated Certificate of Incorporation, as amended (including the Certificate of Designations), will be duly authorized, validly issued, fully paid and nonassessable. Such representation and warranty shall survive the deposit of shares of Stock and the issuance of the related Receipts.

SECTION 3.04 Warranty as to Receipts and Depositary Shares . The Company hereby represents and warrants to the Depositary that the Receipts, when issued against payment therefor in accordance with the Underwriting Agreement and this Deposit Agreement, will evidence legal and valid interests in the Depositary Shares and each Depositary Share will represent a legal and valid 1/40 th interest in one share of Stock. Such representation and warranty shall survive the deposit of shares of Stock and the issuance of the Receipts.

SECTION 3.05 Corporate Existence and Authority of the Depositary . The Depositary hereby represents and warrants that it (a) has been duly incorporated and is validly existing as a limited liability trust company in good standing under the laws of the jurisdiction of its formation; (b) has full corporate power and authority and possesses all governmental or other franchises, licenses, permits, authorizations and approvals necessary to enable it to own, lease or otherwise hold its properties and assets and to carry on its business as presently conducted; (c) has been duly qualified as a foreign entity 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; and (d) is a bank or trust company having its principal office in the United States of America and having a combined capital and surplus, along with its affiliates, of at least $50,000,000. The Depositary hereby agrees to promptly inform the Company in the event that any of the statements in the foregoing sentence cease to be true and complete in all material respects.

 

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This Deposit Agreement has been duly authorized, executed and delivered by the Depositary and constitutes a legal, valid and binding obligation of the Depositary, enforceable against the Depositary in accordance with its terms. The Depositary hereby agrees to perform its obligations under this Deposit Agreement with the diligent care of a professional provider of such services, in a timely manner and in conformance with all applicable laws, rules and regulations.

ARTICLE IV

THE DEPOSITED SECURITIES; NOTICES

SECTION 4.01 Cash Distributions . Whenever the Depositary shall receive any cash dividend or other cash distribution with respect to the Stock, including any cash received upon redemption thereof pursuant to Section 2.03, the Depositary shall, subject to Section 3.02, distribute to record holders of Receipts on the record date fixed pursuant to Section 4.04 the pro rata portion, as nearly as practicable, of such dividend or distribution applicable to the number of Depositary Shares evidenced by the Receipts held by such holders; provided, however , that in case the Company or the Depositary shall be required to withhold and shall withhold any monies from any cash dividend or other cash distribution in respect of the Stock on account of taxes or charges or as otherwise required by law, regulation or court process, the amount made available for distribution in respect of Depositary Shares represented by such Receipts subject to such withholding shall be reduced accordingly. The Depositary shall distribute or make available for distribution, as the case may be, only such amount, however, as can be distributed without attributing to any holder of a Receipt a fraction of one cent, and any balance not so distributable shall be held by the Depositary (without liability for interest thereon) and shall be added to and be treated as part of the next succeeding distribution to record holders of Receipts then outstanding. Each holder of a Receipt shall provide the Depositary with a properly completed Form W-8 (i.e., Form W-8BEN, Form W-8EXP, Form W-8IMY, Form W8ECI or another applicable Form W-8) or Form W-9 (which form shall set forth such holder’s certified taxpayer identification number if requested on such form), as may be applicable. Each holder of a Receipt acknowledges that, in the event of non-compliance with the preceding sentence, the Internal Revenue Code of 1986, as amended, may require withholding by the Depositary of a portion of any of the distribution to be made hereunder.

SECTION 4.02 Distributions Other Than Cash . Whenever the Depositary shall receive any property for distribution in a form other than cash with respect to the Stock, the Depositary shall, subject to Section 3.02, distribute to record holders of Receipts on the record date fixed pursuant to Section 4.04 the pro rata portion, as nearly as practicable, of such property received by it applicable to the number of Depositary Shares evidenced by the Receipts held by such holders, in any manner that the Depositary and the Company may deem equitable and practicable for accomplishing such distribution. The Depositary shall not make any distribution of securities to the holders of Receipts unless the Company shall have provided to the Depositary an opinion of counsel stating that such securities have been registered under the Securities Act or do not need to be registered. If in the reasonable opinion of the Depositary, after consultation with the Company, such distribution cannot be made proportionately among such record holders, or if for any other reason (including any requirement that the Company or the Depositary withhold an amount on account of taxes) the Depositary reasonably deems, after consultation with the Company, such distribution not to be feasible, the Depositary may, with the prior

 

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written approval of the Company, adopt such method as it deems equitable and practicable for the purpose of effecting such distribution, including the sale of the property thus received, or any part thereof, in a commercially reasonable manner. The net proceeds of any such sale shall, subject to Section 3.02, be distributed or made available for distribution, as the case may be, by the Depositary to record holders of Receipts in accordance with the provisions of Section 4.01 for a distribution received in cash.

SECTION 4.03 Subscription Rights, Preferences or Privileges . If the Company shall at any time offer or cause to be offered to the Persons in whose names the shares of Stock are recorded on the books of the Company (or its duly appointed transfer agent) any rights, preferences or privileges to subscribe for or to purchase any securities or any rights, preferences or privileges of any other nature, such rights, preferences or privileges shall in each such instance be made available by the Depositary to the record holders of Receipts, pro rata in proportion to the number of the shares of Stock represented by each such Receipt, in such manner as the Company shall instruct (including by the issue to such record holders of warrants representing such rights, preferences or privileges); provided, however , that (i) if at the time of issue or offer of any such rights, preferences or privileges the Company determines upon advice of its legal counsel that it is not lawful or not feasible to make such rights, preferences or privileges available to holders of Receipts by the issue of warrants or otherwise, or (ii) if instructed by holders of Receipts (and to the extent so instructed by such holders) who do not desire to exercise such rights, preferences or privileges, the Depositary shall then, if so directed by the Company and provided with an opinion of counsel stating that if the Depositary undertakes such actions it will not be deemed an “issuer” under the Securities Act or an “investment company” under the Investment Company Act of 1940, as amended, and if applicable laws or the terms of such rights, preferences or privileges permit such transfer, sell such rights, preferences or privileges of such holders at public or private sale, at such place or places and upon such terms as it may deem proper. The net proceeds of any such sales shall, subject to Section 3.01 and 3.02, be distributed by the Depositary to the record holders of Receipts entitled thereto as provided by Section 4.01 in the case of a distribution received in cash. The Depositary shall not make any distribution of such rights, preferences or privileges, unless the Company shall have provided to the Depositary an opinion of counsel stating that such rights, preferences or privileges have been registered under the Securities Act or do not need to be registered.

If registration under the Securities Act of the securities to which any rights, preferences or privileges relate is required in order for holders of Receipts to be offered or sold the securities to which such rights, preferences or privileges relate, the Company agrees that it will promptly notify the Depositary of such requirement and that it will file promptly a registration statement pursuant to the Securities Act with respect to such rights, preferences or privileges and securities and use its reasonable best efforts and take all steps available to it to cause such registration statement to become effective sufficiently in advance of the expiration of such rights, preferences or privileges to enable such holders to exercise such rights, preferences or privileges. In no event shall the Depositary make available to the holders of Receipts any right, preference or privilege to subscribe for or to purchase any security unless and until such registration statement shall have become effective, or unless the offering and sale of such securities to such holders are exempt from registration under the Securities Act and the Company shall have provided to the Depositary an opinion of counsel to such effect.

 

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If any other action under the laws of any jurisdiction or any governmental or administrative authorization, consent or permit is required in order for such rights, preferences or privileges to be made available to holders of Receipts, the Company agrees that it will promptly notify the Depositary of such requirement and that the Company will use its reasonable best efforts to take such action or obtain such authorization, consent or permit sufficiently in advance of the expiration of such rights, preferences or privileges to enable such holders to exercise such rights, preferences or privileges.

SECTION 4.04 Notice of Dividends, Etc.; Fixing of Record Date for Holders of Receipts . (i) Whenever any cash dividend or other cash distribution shall become payable or any distribution of property other than cash shall be made, (ii) if rights, preferences or privileges shall at any time be offered with respect to Stock, (iii) whenever the Depositary shall receive written notice of (a) any meeting at which holders of shares of Stock are entitled to vote or of which holders of shares of Stock are entitled to notice or (b) any election on the part of the Company to redeem any such shares of Stock, or (iv) whenever the Company shall decide it is appropriate and provide written notice of such to the Depositary, the Depositary shall, in each such instance, fix a record date (which shall be the same date as the record date fixed by the Company with respect to the Stock) for the determination of the holders of Receipts who shall be entitled hereunder to receive a distribution in respect of such dividend, distribution, rights, preferences or privileges or the net proceeds of the sale thereof, or to give instructions for the exercise of voting rights at any such meeting, or who should be entitled to receive notice of such meeting or the determination of holders of Receipts who shall be entitled to receive the amount of the redemption price on the shares of Stock on a redemption date payable with respect to their Receipts or for any other appropriate reasons.

SECTION 4.05 Voting Rights . Subject to the provisions of the Company’s Amended and Restated Certificate of Incorporation, as amended (including the Certificate of Designations), upon receipt from the Company of written notice of any meeting at which the holders of shares of Stock are entitled to vote, the Depositary shall, if requested in writing and provided with all necessary information and documents, as soon as practicable thereafter, mail to the record holders of Receipts a notice, which shall be provided by the Company and which shall contain (i) such information as is contained in such notice of meeting and (ii) a statement that the holders of Receipts at the close of business on a specified record date fixed pursuant to Section 4.04 may, subject to any applicable laws and restrictions, authorize the Depositary to exercise the voting rights pertaining to the number of shares of Stock represented by their respective Depositary Shares (including authority to give a discretionary proxy to a Person designated by the Company) and a brief statement as to the manner in which such authorization may be given. Upon the written request of a holder of a Receipt on such record date, the Depositary shall use its best efforts to vote or cause to be voted, in accordance with the authorization referred to above, the votes relating to the shares of Stock (or portion thereof) represented by the Depositary Shares evidenced by all Receipts as to which such authorization has been received. The Company hereby agrees to take all such reasonable action that may be deemed necessary by the Depositary in order to enable the Depositary to vote such shares of Stock or cause such shares of Stock to be voted in accordance with the instructions received by the Depositary. In the absence of specific instructions from the holder of a Receipt, the Depositary will vote all Depositary Shares held by it in proportion with votes cast pursuant to any instructions received from the other holders. The Depositary shall not exercise any discretion in voting any of the Stock represented by the Depositary Shares evidenced by such Receipt.

 

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SECTION 4.06 Changes Affecting Deposited Securities and Reclassifications, Recapitalizations, Etc . Upon any change in par or stated value, split-up, combination or any other reclassification of the Stock, or upon any recapitalization, reorganization, merger, amalgamation or consolidation affecting the Company or to which the Company is a party or sale of all or substantially all of the Company’s assets, the Depositary shall, upon receipt of written instructions from the Company setting forth any adjustments, (i) make such adjustments in the fraction of an interest in one share of Stock represented by one Depositary Share and the ratio of the redemption price per Depositary Share to the redemption price of a share of Stock, in each case as may be required by or as is consistent with the provisions of the Company’s Amended and Restated Certificate of Incorporation, as amended (including the Certificate of Designations), to reflect the effects of such change in par or stated value, split-up, combination or other reclassification of Stock, or of such recapitalization, reorganization, merger, amalgamation or consolidation or sale, and (ii) treat any securities which shall be received by the Depositary in exchange for or in respect of the shares of Stock as new deposited securities so received in exchange for or in respect of the shares of Stock. In any such case the Depositary may, upon the receipt of a written request from the Company, execute and deliver additional Receipts, or may call for the surrender of all outstanding Receipts to be exchanged for new Receipts specifically describing such new deposited securities.

Anything to the contrary herein or in the Receipt notwithstanding, record holders of Receipts shall have the right from and after the effective date of any such change in par or stated value, split-up, combination or other reclassification of the Stock or any such recapitalization, reorganization, merger, amalgamation, consolidation or sale, to the extent that holders of shares of Stock had the right, prior to or on the applicable effective date, to convert, exchange or surrender shares of Stock into or for other stock, securities, property or cash, to surrender such Receipts to the Depositary with instructions to convert, exchange or surrender the shares of Stock represented thereby only into or for, as the case may be, the kind and amount of shares of stock and other securities and property and cash into which the shares of Stock represented by such Receipts has been converted or for which such shares of Stock might have been exchanged or surrendered immediately prior to the effective date of such transaction.

SECTION 4.07 Inspection of Reports . The Depositary shall make available for inspection by record holders of Receipts at the Depositary’s Office, and at such other places as it may from time to time deem advisable during normal business hours, any reports and communications received from the Company that are received by the Depositary as the holder of shares of Stock.

SECTION 4.08 List of Receipt Holders . Promptly, upon request by the Company, the Depositary shall furnish to it a list, as of a specified date, of the names and addresses of all record holders, and the number of shares of Stock represented by the Receipts held by such holders. The Company shall be entitled to receive such list four times annually without charge.

SECTION 4.09 Withholding . Notwithstanding any other provision of this Deposit Agreement, in the event that the Depositary determines that any distribution in property is

 

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subject to any tax or other charge that the Depositary is obligated by law to withhold, the Depositary may dispose of, by public or private sale, all or a portion of such property in such amounts and in such manner as the Depositary deems necessary and practicable to pay such taxes or charges, and the Depositary shall distribute the net proceeds of any such sale or the balance of any such property after deduction of such taxes or charges to the holders of Receipts entitled thereto in proportion to the number of Depositary Shares held by them, respectively; provided , however , that in the event the Depositary determines that such distribution of property is subject to withholding tax only with respect to some but not all holders of Receipts, the Depositary will use its best efforts (i) to sell only that portion of such property distributable to such holders that is required to generate sufficient proceeds to pay such withholding tax and (ii) to effect any such sale in such a manner so as to avoid affecting the rights of any other holders of Receipts to receive such distribution in property.

ARTICLE V

THE DEPOSITARY, THE DEPOSITARY’S AGENTS,

THE REGISTRAR AND THE COMPANY

SECTION 5.01 Maintenance of Offices, Agencies and Transfer Books by the Depositary; Registrar . Upon execution of this Deposit Agreement, the Depositary shall maintain, at the Depositary’s Office, facilities for the execution and delivery, registration and registration of transfer, surrender, redemption, split-up, combination and exchange of Receipts and for the deposit and withdrawal of shares of Stock, and at the offices of the Depositary’s Agents, if any, facilities for the delivery, registration of transfer, surrender, redemption, split-up, combination and exchange of Receipts and for the deposit and withdrawal of shares of Stock, all in accordance with the provisions of this Deposit Agreement.

The Depositary shall, with the approval of the Company, appoint a Registrar for registration of such Receipts or Depositary Shares in accordance with any requirements of any applicable stock exchange in which the Receipts or the Depositary Shares may be listed. Such Registrar (which may be the Depositary if so permitted by the requirements of such exchange) may be removed and a substitute Registrar appointed by the Depositary upon the request or with the written approval of the Company. If the Receipts, the Depositary Shares or the shares of Stock are listed on one or more other stock exchanges, the Depositary will, at the request and expense of the Company, arrange such facilities for the delivery, registration, registration of transfer, surrender, redemption and exchange of such Receipts, such Depositary Shares or such shares of Stock as may be required by law or applicable stock exchange regulation. The Depositary shall serve as the initial Registrar.

The Registrar shall maintain books at the Depositary’s Office (or at such other place as shall be determined by the Registrar and of which the holders of Receipts shall have reasonable notice) for the registration of transfer of Receipts, which books shall be open for inspection during normal business hours by the record holders of Receipts for any purpose reasonably related to any such record holder’s interest as a holder of Receipts; provided that the exercise of such right by the holders of Receipts shall be governed by the provisions of the General Corporation Law of the State of Delaware, as amended, or any successor provision thereto, anything herein to the contrary notwithstanding.

 

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The Depositary may cause the Registrar to close the books with respect to the Receipts, at any time or from time to time, when the register of stockholders of the Company is closed with respect to the Stock or when such action is deemed necessary or advisable by the Depositary, any Depositary’s Agent or the Company because of any requirement of law or of any government, governmental body or commission, stock exchange or any applicable self-regulatory body.

SECTION 5.02 Prevention or Delay by the Depositary, the Depositary’s Agents, the Registrar or the Company . Neither the Depositary nor any Depositary’s Agent nor any Registrar nor the Company shall incur any liability to any holder of any Receipt if by reason of any provision of any present or future law, or regulation thereunder, of the United States of America or of any other governmental authority or, in the case of the Depositary, the Depositary’s Agent or the Registrar, by reason of any provision, present or future, of the Company’s Amended and Restated Certificate of Incorporation, as amended (including the Certificate of Designations), or, in the case of the Company, the Depositary, any Depositary’s Agent or the Registrar, by reason of any acts of God, fire, war, terrorism, floods, strikes, civil or military disorder, work stoppage, accident, electrical outages or other circumstance beyond the control of the relevant party, the Depositary, any Depositary’s Agent, the Registrar or the Company shall be prevented or forbidden from, or subjected to any penalty on account of, doing or performing any act or thing that the terms of this Deposit Agreement provide shall be done or performed; nor shall the Depositary, any Depositary’s Agent, any Registrar or the Company incur any liability or be subject to any obligation to any holder of a Receipt (i) by reason of any nonperformance or delay, caused as aforesaid, in the performance of any act or thing that the terms of this Deposit Agreement provide shall or may be done or performed, or (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement, except in the event of the gross negligence or willful misconduct (each as determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction) of the party charged with such exercise or failure to exercise.

SECTION 5.03 Obligations of the Depositary, the Depositary’s Agents, the Registrar and the Company . Neither the Depositary nor any Depositary’s Agent nor any Registrar nor the Company assumes any obligation or shall be subject to any liability under this Deposit Agreement to holders of Receipts, the Company or any other Person other than for its own gross negligence, willful misconduct or omission, bad faith or fraud (each as determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction). Notwithstanding anything to the contrary contained herein, neither the Depositary, nor any Depositary’s Agent, nor any Registrar nor the Company shall be liable for any special, indirect, incidental, consequential, punitive or exemplary losses or damages of any kind whatsoever, to any Person, including, but not limited to, lost profits, even if such Person alleged to be liable has knowledge of the possibility of such damages or has been advised of the likelihood of such loss or damage and regardless of the form of action. Any liability of the Depositary, any Depositary’s Agent or any Registrar under this Deposit Agreement shall be limited to the amount of annual fees paid by the Company to such Person.

Neither the Depositary nor any Depositary’s Agent nor any Registrar nor the Company shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding with respect to the shares of Stock, Depositary Shares or Receipts that in its

 

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reasonable opinion may involve it in expense or liability, unless indemnity reasonably satisfactory to it against all reasonable out-of-pocket expense and liability be furnished as incurred.

Neither the Depositary nor any Depositary’s Agent nor any Registrar nor the Company shall be liable to any party hereto for any action or any failure to act by it in good faith reliance upon the written advice of legal counsel or accountants, or information from any Person presenting shares of Stock for deposit or any holder of a Receipt. The Depositary, any Depositary’s Agent, any Registrar and the Company may each rely and shall each be protected in acting upon or omitting to act upon any written notice, request, direction or other document believed by it to be genuine and to have been signed or presented by the party or parties specified in this Deposit Agreement.

In the event the Depositary shall receive conflicting claims, requests or instructions from any holders of Receipts, on the one hand, and the Company, on the other hand, the Depositary shall be entitled to act on such claims, requests or instructions received from the Company, and shall incur no liability and shall be entitled to the full indemnification set forth in Section 5.06 in connection with any action so taken.

The Depositary shall not be responsible for any failure to carry out any instruction to vote any of the Stock or for the manner or effect of any such vote made, as long as any such action or non-action does not result from gross negligence or willful misconduct on the part of the Depositary (each as determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction). The Depositary undertakes, and shall cause any Registrar to undertake, to perform such duties and only such duties as are specifically set forth in this Deposit Agreement, and no implied covenants or obligations shall be read into this Deposit Agreement against the Depositary, any Depositary’s Agent, any Registrar or against the Company with respect to the Depositary and any Registrar. The Depositary, any Depositary’s Agent, any Registrar and the Company may own and deal in any class of securities of the Company and its affiliates and in Receipts, Depositary Shares or shares of the Stock or become pecuniarily interested in any transaction in which the Company or its affiliates may be interested or contract with or lend money to or otherwise act as fully or as freely as if it were not the Depositary, a Depositary’s Agent or the Registrar hereunder. The Depositary, any Depositary’s Agent or the Transfer Agent may also act as transfer agent or registrar of any of the securities of the Company and its affiliates or act in any other capacity for the Company or its affiliates.

It is intended that neither the Depositary nor any Depositary’s Agent shall be deemed to be an “issuer” of the securities under the federal securities laws or applicable state securities laws, it being expressly understood and agreed that the Depositary and any Depositary’s Agent are acting only in a ministerial capacity as Depositary for the shares of Stock; provided, however , that the Depositary agrees to comply with all information reporting and withholding requirements applicable to it under law or this Deposit Agreement in its capacity as Depositary.

Neither the Depositary (or its officers, directors, employees, agents or affiliates) nor any Depositary’s Agent makes any representation or has any responsibility as to the validity of the registration statement pursuant to which the Depositary Shares are registered under the

 

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Securities Act, the shares of Stock, the Depositary Shares, the Receipts (except its countersignature thereon) or any instruments referred to therein or herein, or as to the correctness of any statement made therein or herein; provided, however , that the Depositary is responsible for its representations in this Deposit Agreement, for the validity of any action taken or required to be taken by the Depositary in connection with this Deposit Agreement and for any information provided to the Company in writing for the purpose of including such information in any such registration statement.

In the event the Depositary, any Depositary’s Agent or the Registrar, in its reasonable judgment, believes any ambiguity or uncertainty exists in any notice, instruction, direction, request or other communication, paper or document received by it pursuant to this Deposit Agreement, such Person shall promptly notify the Company of the details of such alleged ambiguity or uncertainty, and may, in its sole discretion, refrain from taking any action, and such Person shall be fully protected and shall incur no liability to any Person from refraining from or for taking such action, absent gross negligence or willful misconduct (each as determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction), unless and until (i) the rights of all parties have been fully and finally adjudicated by a court of appropriate jurisdiction or (ii) such Person receives written instructions with respect to such matter signed by the Company that eliminates such ambiguity or uncertainty to the satisfaction of such Person.

Whenever in the performance of its duties under this Deposit Agreement, the Depositary, any Depositary’s Agent or the Registrar shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking, suffering or omitting to take any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively provided and established by a certificate signed by any one of the President, any Vice President, the Treasurer, the Secretary, or Assistant Secretary of the Company and delivered to the Depositary, any Depositary’s Agent or the Registrar; and such certificate shall be full and complete authorization and protection to the Depositary, any Depositary’s Agent or the Registrar and the Depositary, any Depositary’s Agent or the Registrar shall incur no liability for or in respect of any action taken, suffered or omitted to be taken by it under the provisions of this Deposit Agreement in reliance upon such certificate. Neither the Depositary nor any Depositary’s Agent nor the Registrar shall be liable for or by reason of any of the statements of fact or recitals contained in this Deposit Agreement or in the Receipts (except its countersignature thereof) or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only.

Neither the Depositary, nor any Depositary’s Agent nor the Registrar will be under any duty or responsibility to ensure compliance with any applicable federal or state securities laws in connection with the issuance, transfer or exchange of the Receipts, the shares of Stock or the Depositary Shares.

Notwithstanding anything herein to the contrary, no amendment to the Certificate of Designations shall affect the rights, duties, obligations or immunities of the Depositary, any Depositary’s Agent or the Registrar hereunder.

 

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The Depositary and the Registrar hereunder:

(i) shall have no duties or obligations other than those specifically set forth herein (and no implied duties or obligations), or as may subsequently be agreed to in writing by the parties;

(ii) shall have no obligation to make payment hereunder unless the Company shall have provided the necessary federal or other immediately available funds or securities or property, as the case may be, to pay in full amounts due and payable with respect thereto;

(iii) shall not be obligated to take any legal or other action hereunder; if, however, the Depositary or the Registrar determines to take any legal or other action hereunder, and, where the taking of such action might in such Person’s judgment subject or expose it to any expense or liability, it shall not be required to act unless it shall have been furnished with an indemnity satisfactory to it;

(iv) may rely on and shall be authorized and protected in acting or omitting to act upon any certificate, instrument, opinion, notice, letter, facsimile transmission or other document or security delivered to it and believed by it to be genuine and to have been signed by the proper party or parties, and shall have no responsibility for determining the accuracy thereof;

(v) may rely on and shall be authorized and protected in acting or omitting to act upon the written, telephonic, electronic and oral instructions, with respect to any matter relating to the Depositary’s or the Registrar’s actions as depositary or registrar covered by this Deposit Agreement (or supplementing or qualifying any such actions), of officers of the Company;

(vi) may consult counsel satisfactory to it (who may be an employee of the Depositary or the Registrar), and the advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted to be taken by it hereunder in accordance with the advice of such counsel;

(vii) shall not be called upon at any time to advise any Person with respect to the Depositary Shares or Receipts;

(viii) shall not be liable or responsible for any recital or statement contained in any documents relating hereto or the Depositary Shares or Receipts; and

(ix) shall not be liable in any respect on account of the identity, authority or rights of the parties (other than with respect to it’s own) executing or delivering or purporting to execute or deliver this Deposit Agreement or any documents or papers deposited or called for under this Deposit Agreement.

The obligations of the Company set forth in this Section 5.03 shall survive the replacement, removal or resignation of any Depositary, Registrar or any Depositary’s Agent or the termination of this Deposit Agreement.

 

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SECTION 5.04 Resignation and Removal of the Depositary; Appointment of Successor Depositary . The Depositary may at any time resign as Depositary hereunder by notice of its election to do so delivered to the Company, such resignation to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided.

The Depositary may at any time be removed by the Company by notice of such removal delivered to the Depositary, such removal to take effect upon the appointment of a successor depositary and its acceptance of such appointment as hereinafter provided. Upon any such removal or appointment, the Company shall send notice thereof by first-class mail, postage prepaid, to the holders of Receipts.

If the Depositary acting hereunder shall at any time resign or be removed, the Company shall, within 60 days after the delivery of the notice of resignation or removal, as the case may be, appoint a successor depositary, which shall be (i) a Person having its principal office in the United States of America and having a combined capital and surplus of at least $50,000,000, or (ii) an affiliate of such a Person. If a successor depositary shall not have been appointed and have accepted appointment within 60 days after delivery of such notice, the resigning or removed Depositary may petition a court of competent jurisdiction to appoint a successor depositary. Every successor depositary shall execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder and agreeing to become a party to this Deposit Agreement, and thereupon such successor depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor and for all purposes shall be the Depositary under this Deposit Agreement, and such predecessor, upon payment of all sums due it and on the written request of the Company, shall promptly execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder, shall duly assign, transfer and deliver all right, title and interest in all shares of Stock deposited with such predecessor and any monies or property held hereunder to such successor and shall deliver to such successor a list of the record holders of all outstanding Receipts and such books, records and other information in its possession relating thereto. Any successor depositary shall promptly mail notice of its appointment to the record holders of all outstanding Receipts.

Any Person into or with which the Depositary may be merged, consolidated or converted, or any Person to which all or a substantial part of the assets of the Depositary may sell all or substantially all its assets, shall be the successor of such Depositary without the execution or filing of any document or any further act. Such successor depositary may authenticate the Receipts either in the name of the predecessor depositary or in the name of the successor depositary.

The provisions of this Section 5.04 as they apply to the Depositary shall also apply to the Registrar, as if the Registrar was specifically referenced herein.

SECTION 5.05 Corporate Notices and Reports . The Company agrees that it will deliver to the Depositary, and the Depositary will, if requested in writing by the Company and provided with all necessary information and documents, promptly after receipt thereof, transmit to the record holders of Receipts, in each case at the address recorded in the books of the

 

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Depositary or the Registrar, all notices and reports (including without limitation financial statements) required by law, the rules of any national securities exchange upon which the shares of Stock, the Depositary Shares or the Receipts are listed or by the Company’s Amended and Restated Certificate of Incorporation, as amended (including the Certificate of Designations), to be furnished by the Company to record holders of Receipts. Such transmission will be at the Company’s expense and the Company will provide the Depositary with such number of copies of such documents as the Depositary may reasonably request. In addition, the Depositary will transmit to the record holders of Receipts at the Company’s expense such other documents as may be requested in writing by the Company. Notwithstanding the foregoing, the Company shall have no obligation to transmit any such documents that are actually filed by the Company on the Electronic Data Gathering, Analysis, and Retrieval system of the Securities and Exchange Commission, unless specifically requested by a holder of a Receipt in writing.

SECTION 5.06 Indemnification by the Company . The Company shall indemnify the Depositary, any Depositary’s Agent and any Registrar against, and hold each of them harmless from, any loss, liability, damage, cost or reasonable out-of-pocket expense (including the reasonable costs and expenses of defending itself) which may arise solely from third-party claims based directly on acts performed, suffered or omitted to be taken in connection with this Deposit Agreement and the Receipts by the Depositary, any Registrar or any of their respective agents (including any Depositary’s Agent), except for any liability arising out of gross negligence, willful misconduct or omission, bad faith or fraud (each as determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction) on the respective parts of any such Person or Persons. The obligations of the Company set forth in this Section 5.06 shall survive the replacement, removal or resignation of any Depositary, Registrar or Depositary’s Agent or any termination of this Deposit Agreement.

SECTION 5.07 Indemnification by the Depositary . The Depositary will indemnify the Company against, and hold it harmless from, any loss, liability, damage, cost or reasonable out-of-pocket expense (including the reasonable costs and expenses of defending itself) which may arise solely from third-party claims based directly on acts performed, suffered or omitted to be taken by the Depositary, including when such Depositary acts as Registrar, or the Depositary’s Agents in connection with this Deposit Agreement due to its or their gross negligence, willful misconduct or omission, bad faith or fraud (each as determined by a final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction). The obligations of the Depositary set forth in this Section 5.07 shall survive any termination of this Deposit Agreement and any succession of any Depositary, Registrar or Depositary’s Agent.

SECTION 5.08 Charges and Expenses . The Company shall pay all fees, charges and expenses of the Depositary in connection with the initial deposit of shares of Stock and the initial issuance of the Depositary Shares represented by Receipts, all withdrawals and any redemption or exchange of the shares of Stock. All other transfer and other taxes and charges shall be at the expense of holders of Receipts. The Depositary shall have no duty or obligation under any section of this Deposit Agreement that requires the payment of taxes or charges unless and until it is satisfied that all such taxes and/or charges have been paid, and the Depositary may refuse to effect any transfer of a Receipt or any withdrawal of shares of Stock evidenced thereby until all such taxes and charges with respect to such Receipt or shares of Stock are paid by the holder thereof. If, at the request of a holder of Receipts, the Depositary incurs charges or expenses for which it is not otherwise liable hereunder, such holder will be liable for such charges and expenses.

 

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All other charges and expenses of the Depositary and any Depositary’s Agent hereunder and of any Registrar (including, in each case, fees and expenses of counsel) incurred in the preparation, negotiation, delivery, amendment, administration, modification, waiver, performance, enforcement and execution of this Deposit Agreement and incident to the performance of their respective obligations hereunder will be paid by the Company as previously agreed between the Depositary and the Company. The Depositary (and if applicable, the Registrar) shall present any statement for fees, charges and expenses to the Company once every three months or at such other intervals as the Company and the Depositary may otherwise agree.

ARTICLE VI

AMENDMENT AND TERMINATION

SECTION 6.01 Amendment . The form of the Receipts and any provisions of this Deposit Agreement may at any time and from time to time be amended by agreement between the Company and the Depositary without the consent of the holders of Receipts in any respect that the Company and the Depositary may deem necessary or desirable; provided, however , that no such amendment that shall materially and adversely alter the rights of the holders of Receipts shall be effective unless such amendment shall have been approved by the record holders of Receipts representing at least a majority of the Depositary Shares then outstanding. Every holder of an outstanding Receipt at the time any such amendment becomes effective shall be deemed, by continuing to hold such Receipt, to consent and agree to such amendment and to be bound by this Deposit Agreement as amended thereby.

SECTION 6.02 Termination . This Deposit Agreement may be terminated by the Company or the Depositary for any reason upon 60 days prior written notice to the other party, or immediately if the other party has materially breached this Deposit Agreement or if (i) all outstanding shares of Stock shall have been redeemed, or (ii) there shall have been made a final distribution in respect of the Stock in connection with any liquidation, dissolution or winding up of the Company and such distribution shall have been distributed to the record holders of Receipts pursuant to Section 4.01 or 4.02, as applicable. In the event of such termination, other than pursuant to clause (i) or (ii) above, the Company will appoint a successor depositary and inform the Depositary of the name and address of any successor depositary so appointed, provided that no failure by the Company to appoint such a successor depositary shall affect the termination of this Deposit Agreement or the discharge of the Depositary as depositary hereunder. Upon any such termination, the Depositary shall be relieved and discharged of any further responsibilities with respect to its duties and obligations hereunder. Upon payment of all outstanding fees and expenses hereunder, the Depositary shall promptly forward to the successor depositary or its designee any shares of Stock held by it and any certificates, letters, notices other document that the Depositary may receive after its appointment has so terminated.

Whenever the Deposit Agreement has been terminated pursuant to clause (ii) of the preceding paragraph, the Depositary will mail notice of such termination to the record holders of all Receipts then outstanding at least 30 days prior to (or promptly thereafter if 30 days is not commercially reasonable) the date fixed in that notice for termination of the Deposit

 

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Agreement. If any Depositary Shares remain outstanding after the date of termination, the Depositary thereafter will discontinue the transfer of Depositary Shares, will suspend the distribution of dividends to the holders thereof, and will not give any further notices (other than notice of such termination) or perform any further acts under this Deposit Agreement, except that the Depositary will continue (i) to collect dividends on the outstanding shares of Stock and any other distributions with respect thereto and (ii) to deliver or cause to be delivered shares of Stock, together with such dividends and distributions, or principal and interest, and the net proceeds of any sales of rights, preferences, privileges or other property (other than real property) in exchange for Depositary Shares surrendered. At any time after the expiration of three years from the date of termination, the Depositary may, but shall not be obligated to, sell the shares of Stock then held by it at a public or private sale, at such place or places and upon such terms as it deems proper and may thereafter hold the net proceeds of such sale, without liability for interest, for the pro rata benefit of the owners of the Depositary Shares which have not theretofore been surrendered. Subject to applicable escheat laws, any monies set aside by the Company in respect of any payment with respect to the shares of Stock represented by the Depositary Shares, or dividends thereon, and unclaimed at the end of three years from the date upon which such payment is due and payable shall revert to the general funds of the Company, after which reversion the holders of Receipts evidencing such Depositary Shares shall look only to the general funds of the Company for payment thereof.

Upon the termination of this Deposit Agreement, the parties hereto shall be discharged from all obligations under this Deposit Agreement except for their respective obligations under Sections 5.03, 5.06, 5.07 and 5.08.

ARTICLE VII

MISCELLANEOUS

SECTION 7.01 Counterparts . This Deposit Agreement may be executed in any number of counterparts, and by each of the parties hereto on separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed an original, but all such counterparts taken together shall constitute one and the same instrument. Delivery of an executed counterpart of a signature page to this Deposit Agreement by facsimile or pdf shall have the same authority, effect and enforceability as delivery of a manually executed counterpart of this Deposit Agreement.

SECTION 7.02 Exclusive Benefit of Parties . This Deposit Agreement is for the exclusive benefit of the parties hereto, and their respective successors hereunder, and shall not be deemed to give any legal or equitable right, remedy or claim to any other Person whatsoever.

SECTION 7.03 Invalidity of Provisions . In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced, modified or disturbed thereby; provided, however , that if such provision affects the rights, duties, liabilities or obligations of the Depositary or the Registrar, such Person shall be entitled to resign, and such resignation shall take effect, upon seven (7) days’ notice in writing to the Company.

 

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SECTION 7.04 Notices . Any and all notices to be given to the Company hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail or overnight delivery service or by electronic mail or facsimile transmission, confirmed by letter, addressed to the Company at:

AmTrust Financial Services, Inc.

59 Maiden Lane, 43 rd Floor

New York, New York 10038

Attention: Stephen Ungar, Senior Vice President, General Counsel and Secretary

E-mail: Steve.Ungar@amtrustgroup.com

Facsimile: (212) 220-7130

or at any other address and to the attention of any other Person of which the Company shall have notified the Depositary in writing.

Any and all notices to be given to the Depositary hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail or by facsimile transmission, telegram or telecopy confirmed by letter, addressed to the Depositary at the Depositary’s Office, at:

American Stock Transfer & Trust Company, LLC

6201 15 th Avenue

Brooklyn, New York 11219

Attention: Corporate Trust Department

Facsimile: (718) 331-1852

with a copy to:

American Stock Transfer & Trust Company, LLC

6201 15 th Avenue

Brooklyn, New York 11219

Attention: General Counsel

Facsimile: (718) 331-1852

or at any other address and to the attention of any other Person of which the Depositary shall have notified the Company in writing.

Any and all notices to be given to any record holder of a Receipt hereunder or under the Receipts shall be in writing and shall be deemed to have been duly given if personally delivered or sent by mail, recognized overnight delivery services or by facsimile transmission, confirmed by letter, addressed to such record holder at the address of such record holder as it appears on the books of the Depositary or the Registrar, or if such holder shall have filed in a timely manner with the Depositary or the Registrar a written request, which is reasonably acceptable to the Depositary or the Registrar, that notices intended for such holder be mailed to some other address, at the address designated in such request.

 

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Delivery of a notice sent by mail or overnight delivery shall be deemed to be effected at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a facsimile) is deposited, postage prepaid, in a post office letter box, or in the case of overnight delivery service, when deposited with such overnight delivery service, fees prepaid. The Depositary or the Company may, however, act upon any facsimile received by it from the other or from any holder of a Receipt, notwithstanding that such facsimile shall not subsequently be confirmed by letter or as aforesaid.

SECTION 7.05 Depositary’s Agents . The Depositary may from time to time appoint any Depositary’s Agent to act in any respect for the Depositary for the purposes of this Deposit Agreement and may at any time appoint additional Depositary’s Agents and vary or terminate the appointment of such Depositary’s Agents. The Depositary will promptly notify the Company of any such action.

SECTION 7.06 Holders of Receipts are Parties . By acceptance of delivery of the Receipts, any holder from time to time of such Receipt shall be deemed to have agreed to become a party to this Deposit Agreement and to be bound by all of the terms and conditions hereof and of the Receipts to the same extent as though such Person executed this Deposit Agreement.

SECTION 7.07 Governing Law . THIS DEPOSIT AGREEMENT AND THE RECEIPTS AND ALL RIGHTS, CLAIMS, CONTROVERSIES AND DISPUTES HEREUNDER AND THEREUNDER AND PROVISIONS HEREOF AND THEREOF SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

SECTION 7.08 Inspection of Deposit Agreement . Copies of this Deposit Agreement shall be filed with the Depositary and the Depositary’s Agents and shall be open to inspection during business hours upon reasonable notice at the Depositary’s Office and the respective offices of the Depositary’s Agents, if any, by any holder of a Receipt.

SECTION 7.09 Headings . The headings of articles and sections in this Deposit Agreement and in the form of the Receipt set forth in Exhibit A hereto have been inserted for convenience only and are not to be regarded as a part of this Deposit Agreement or the Receipts or to have any bearing upon the meaning or interpretation of any provision contained herein or in the Receipts.

 

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IN WITNESS WHEREOF, the Company and the Depositary have duly executed this Deposit Agreement as of the day and year first above set forth, and all holders of Receipts shall become parties hereto by and upon acceptance by them of delivery of Receipts issued in accordance with the terms hereof.

 

AMTRUST FINANCIAL SERVICES, INC.

By:  

/s/ Stephen Ungar

  Authorized Officer                        

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC,

as Depositary
By:  

/s/ Michael Legregin

  Authorized Officer

 

[ Signature Page to Deposit Agreement ]


EXHIBIT A

FORM OF RECEIPT

 

RECEIPT NO.             CERTIFICATE FOR
  

 

DEPOSITARY SHARES

TRANSFERABLE

DEPOSITARY RECEIPT

   CUSIP 032359 846
   SEE REVERSE FOR CERTAIN DEFINITIONS

DEPOSITARY RECEIPT FOR DEPOSITARY SHARES, EACH DEPOSITARY SHARE REPRESENTING A 1/40TH INTEREST IN ONE SHARE OF NON-CUMULATIVE PREFERRED STOCK, SERIES E

AMTRUST FINANCIAL SERVICES, INC.

A Delaware Corporation

American Stock Transfer & Trust Company, LLC, as Depositary (the “ Depositary ”), hereby certifies that

is the registered owner of                                  DEPOSITARY SHARES (“ Depositary Shares ”), each Depositary Share representing a 1/40th interest in one share of Non-Cumulative Preferred Stock, Series E, $0.01 par value per share, $1,000 liquidation preference per share (the “ Stock ”), of AmTrust Financial Services, Inc., a Delaware corporation (the “ Company ”), on deposit with the Depositary, subject to the terms and entitled to the benefits of the Deposit Agreement, dated as of March 15, 2016 (the “ Deposit Agreement ”), among the Company, the Depositary and the holders from time to time of Depositary Receipts evidencing the Depositary Shares. By accepting this Depositary Receipt, the holder hereof becomes a party to and agrees to be bound by all the terms and conditions of the Deposit Agreement. This Depositary Receipt shall not be valid or obligatory for any purpose or be entitled to any benefits under the Deposit Agreement unless it shall have been executed by the Depositary by the manual or facsimile signature of a duly authorized officer or, if a Registrar in respect of the Depositary Receipts (other than the Depositary) shall have been appointed, by the manual or facsimile signature of a duly authorized officer of such Registrar.

Dated:                     

AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC,

as Depositary and Registrar

By:  

 

  Authorized Officer


AMTRUST FINANCIAL SERVICES, INC.

AMTRUST FINANCIAL SERVICES, INC. WILL FURNISH WITHOUT CHARGE TO EACH HOLDER OF A RECEIPT WHO SO REQUESTS A COPY OF THE DEPOSIT AGREEMENT AND A COPY OF THE CERTIFICATE OF DESIGNATIONS ESTABLISHING THE DESIGNATIONS, RELATIVE RIGHTS, PREFERENCES AND LIMITATIONS APPLICABLE TO SHARES OF THE NON-CUMULATIVE PREFERRED STOCK, SERIES E. ANY SUCH REQUEST SHOULD BE ADDRESSED TO AMTRUST FINANCIAL SERVICES, INC., 59 MAIDEN LANE, 43 RD FLOOR, NEW YORK, NEW YORK 10038, ATTN: GENERAL COUNSEL.

ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this Depositary Receipt, shall be construed as though they were written out in full according to applicable laws or regulations:

 

TEN COM    - as tenants in common
TEN ENT    - as tenants by the entireties
JT TEN    - as joint tenants with right of survivorship and not as tenants in common

UNIF GIFT MIN ACT -                          Custodian                         

                                                 (Cust)                               (Minor)

 

under Uniform Gifts to
Minors Act                      
        

(State)      

        

UNIF TRF MIN ACT -                  Custodian                  (until age          ) (Cust)              under Uniform Transfers to Minors Act (Minor)                  (State)

Additional abbreviations may also be

used though not in the above list.

SIGNATURE GUARANTEED

NOTICE: The signature(s) must be guaranteed by a participant in a Medallion Signature Guarantee Program at a guarantee level acceptable to the Company’s transfer agent.

Exhibit 4.3

[FACE OF CERTIFICATE]

THIS CERTIFICATE IS REGISTERED IN THE NAME OF AMERICAN STOCK TRANSFER & TRUST COMPANY, LLC, AS DEPOSITARY (THE “DEPOSITARY”). THIS CERTIFICATE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY, BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH A SUCCESSOR DEPOSITARY.

AMTRUST FINANCIAL SERVICES, INC.,

a Delaware corporation

7.75% NON-CUMULATIVE PREFERRED STOCK, SERIES E,

$0.01 par value per share

CUSIP NO. 032359 838

CERTIFICATE NO. 1

This Certifies that American Stock Transfer & Trust Company, LLC, as depositary, is the registered owner of 125,000 FULLY PAID AND NON-ASSESSABLE SHARES OF 7.75% NON-CUMULATIVE PREFERRED STOCK, SERIES E, $0.01 par value per share, with a liquidation preference of $1,000.00 per share (“ Shares ”), of AMTRUST FINANCIAL SERVICES, INC., a Delaware corporation (the “ Company ”), transferable on the books of the Company by the holder hereof in person or by duly authorized attorney upon surrender of this Certificate properly endorsed. This Certificate and the Shares represented hereby are issued under and shall be subject to all the provisions of the Amended and Restated Certificate of Incorporation of the Company and the Certificate of Designations relating thereto approved by the Board of Directors (or an authorized committee thereof) of the Company and any amendments thereto, copies of which are on file with the Transfer Agent, to all of which the holder by acceptance hereof assents. This Certificate is not valid until countersigned and registered by the Transfer Agent and Registrar.

WITNESS the seal of the Company and the facsimile signatures of its secretary and a duly authorized officer.

 

Dated: March 15, 2016

 

[SEAL]

 

 

   

 

Secretary     Authorized Officer
    Chief Executive Officer and President

COUNTERSIGNED AND REGISTERED: AMERICAN STOCK TRANSFER AND TRUST COMPANY, LLC,

    as TRANSFER AGENT AND REGISTRAR

   

 

By:

 

 

  Authorized Signature


[REVERSE OF CERTIFICATE]

The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

 

TEN COM - as tenants in common    UNIF GIFT MIN ACT or U/G/M/A - Uniform Gifts to Minors Act
TEN ENT - as tenants by the entireties   

JT TEN - as joint tenants with right of survivorship

                and not as tenants in common

Additional abbreviations may also be used though not in the above list.

For Value Received,                  hereby sell, assign and transfer unto                                          [                ] (Please insert social security number or other identifying number of assignee and print or typewrite name and address including postal code of assignee)

                                          Shares represented by the within Certificate, and do hereby irrevocably constitute and appoint

                                          Attorney to transfer the said Shares on the books of the within named Company with full power of substitution in the premises.

Dated                     

 

 

NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

Signature(s) Guaranteed:

 

 

 

THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE INSTITUTION (BANKS, STOCKBROKERS, SAVINGS ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN ANY APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, MUTILATED OR DESTROYED, THE COMPANY WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE OF A REPLACEMENT CERTIFICATE.

Exhibit 5.1

[Sidley Austin LLP letterhead]

March 15, 2016

AmTrust Financial Services, Inc.

59 Maiden Lane, 43rd Floor

New York, New York 10038

 

Re: AmTrust Financial Services, Inc.

Registration Statement on Form S-3 (Registration No. 333-204870)

Ladies and Gentlemen:

This opinion is furnished to you in connection with the above-referenced registration statement (the “ Registration Statement ”) that was filed by AmTrust Financial Services, Inc., a Delaware corporation (the “ Company ”), on June 11, 2015 (Registration No. 333-204870) with the Securities and Exchange Commission (the “ SEC ”) under the Securities Act of 1933, as amended (the “ Securities Act ”), relating to the registration of debt securities, warrants, units, preferred stock, depositary shares and common stock to be issued from time to time by the Company.

Pursuant to the Registration Statement, the Company is issuing up to 5,750,000 depositary shares (including 750,000 shares to be subject to the underwriters’ over-allotment option) (the “ Depositary Shares ”), each representing a 1/40th interest in one share of the Company’s 7.75% Non-Cumulative Preferred Stock, Series E, par value $0.01 per share, liquidation preference of $1,000 per share (the “ Preferred Stock ”).

We are familiar with (i) the Registration Statement, (ii) the prospectus dated June 11, 2015 included in the Registration Statement (the “ Base Prospectus ”), (iii) the prospectus supplement dated March 8, 2016 (the “ Prospectus Supplement ” and, together with the Base Prospectus, the “ Prospectus ”) supplementing the Base Prospectus and relating to the Depositary Shares, (iv) the Underwriting Agreement, dated March 8, 2016, by and between the Company on one hand, and Morgan Stanley & Co. LLC, UBS Securities LLC and Wells Fargo Securities, LLC on the other hand, as representatives of the several underwriters named in Schedule II thereto (the “ Underwriting Agreement ”), (v) the Deposit Agreement, dated March 15, 2016 (the “ Deposit Agreement ”), to be entered into among the Company, American Stock Transfer & Trust Company, LLC (the “ Depositary ”) and the holders from time to time of the depositary receipts described therein, including the form of depositary receipt (the “ Depositary Receipt ”) attached thereto, (vi) certain resolutions of the Board of Directors of the Company adopted on June 23, 2014, June 9, 2015 and February 23, 2016, as certified by the Secretary of the Company on the date hereof as being true, complete and correct and in full force and effect, relating to, among other things, the offer, issuance, sale and distribution of the Preferred Stock and the Depositary Shares and the establishment of a Pricing Committee of the Board of Directors, (vii) certain resolutions of such Pricing Committee adopted on March 8, 2016, as certified by the Secretary of the Company on the date hereof as being true, complete and correct and in full force and effect, (viii) the Amended and Restated Certificate of Incorporation of the Company and the Amended and Restated By-Laws of the Company, in each case as currently in effect and as


certified by the Secretary of the Company on the date hereof as being true, complete and correct and in full force and effect, and (ix) the Certificate of Designations relating to the Preferred Stock dated March 9, 2016 (the “ Certificate of Designations ”). We have also examined originals, or copies of originals certified or otherwise identified to our satisfaction, of such records of the Company and other corporate documents, have examined such questions of law and have satisfied ourselves as to such matters of fact as we have considered relevant and necessary as a basis for the opinions set forth herein. We have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures, the legal capacity of all natural persons and the conformity with the original documents of any copies thereof submitted to us for our examination.

Based on the foregoing, and subject to the qualifications and limitations set forth herein, we are of the opinion that:

1. The issuance of the Preferred Stock covered by the Registration Statement has been duly authorized and, when issued and delivered as contemplated by the terms of the Underwriting Agreement and the Deposit Agreement, the Preferred Stock will be validly issued, fully paid and non-assessable.

2. The issuance of the Depositary Shares covered by the Registration Statement has been duly authorized and, when issued and delivered as contemplated by the terms of the Underwriting Agreement and the Deposit Agreement, the Depositary Shares will be validly issued and entitle the holders thereof to the rights specified in the Deposit Agreement.

3. The issuance of the Preferred Stock covered by the Registration Statement in connection with any exercise of the option to purchase additional Depositary Shares granted by the Company to the several underwriters pursuant to the Underwriting Agreement has been duly authorized by the Company, and when issued and delivered as contemplated by the terms of the Underwriting Agreement, the Preferred Stock issuable pursuant to such option will be validly issued, fully paid and non-assessable.

4. The issuance of the Depositary Shares covered by the Registration Statement in connection with any exercise of the option to purchase additional Depositary Shares granted by the Company to the several underwriters pursuant to the Underwriting Agreement has been duly authorized by the Company, and when issued and delivered as contemplated by the terms of the Underwriting Agreement and the Deposit Agreement, the Depositary Shares issuable pursuant to such option will be validly issued and entitle the holders thereof to the rights specified in the Deposit Agreement.

For the purposes of this opinion letter, we have assumed that, at the time of the issuance, sale and delivery of the Preferred Stock and Depositary Shares pursuant to the underwriters’ option to purchase additional Depositary Shares: (i) the authorization thereof by the Company will not have been modified or rescinded, and there will not have occurred any change in law

 

2


affecting the validity thereof; (ii) the Underwriting Agreement and the Deposit Agreement will have been duly executed and delivered by the Company and the underwriters; and (iii) the Amended and Restated Certificate of Incorporation of the Company and the Amended and Restated By-Laws of the Company, as currently in effect, will not have been modified or amended and will be in full force and effect.

This opinion letter is limited to the laws of the General Corporation Law of the State of Delaware.

We hereby consent to the filing of this opinion letter as an Exhibit to the Company’s Current Report on Form 8-K filed with the SEC on March 15, 2016 and to its incorporation by reference into the Registration Statement and to the use of our name under the caption “Legal Matters” in the Prospectus which is part of the Registration Statement. In giving such consent, we do not thereby admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act or the related rules promulgated by the SEC.

 

Very truly yours,

/s/ Sidley Austin LLP

 

3

Exhibit 12.1

AmTrust Financial Services, Inc.

Computation of Ratio of Earnings to Fixed Charges and Preferred Stock Dividends

(Amounts in Thousands)

 

    Year Ended December 31,  
    2015     2014     2013     2012     2011  

Earnings:

         

Pretax income from continuing operations before adjustment for income or loss from equity investees

  $ 552,462      $ 471,933      $ 379,249      $ 196,857      $ 171,259   

Fixed charges

    57,203        48,458        34,691        28,508        16,709   

Company share of pre-tax losses of equity investees for which charges arising from guarantees are included in fixed charges

    —          —          —          —            
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  $ 609,665      $ 520,391      $ 413,940      $ 225,365      $ 187,968   

Less:

         

Interest capitalized

  $ —        $ —        $ —        $ —        $ —     

Non-controlling interest in pre-tax income (loss) of subsidiaries that have not incurred fixed charges

    6,928        (416     (1,633     6,873        20,730   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    6,928        (416     (1,633     6,873        20,730   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Earnings

  $ 602,737      $ 520,807      $ 415,573      $ 218,492      $ 167,238   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Fixed Charges:

         

Interest expensed and capitalized, and amortized premiums, discounts and capitalized expenses related to indebtedness

    57,203        48,458        34,691        28,508        16,709   

Expense of the interest within rental expense (1)

    —          —          —          —          —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Fixed Charges

  $ 57,203      $ 48,458      $ 34,691      $ 28,508      $ 16,709   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Preferred Stock Dividends:

         

Preferred dividends

    31,590        12,738        3,989        —          —     

Preferred dividends grossed up to a pre-income tax basis

    48,600        19,597        6,137        —          —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total combined fixed charges and preferred dividends

  $ 105,803      $ 68,055      $ 40,828      $ 28,508      $ 16,709   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ratio of Earnings to Combined Fixed Charges and Preferred Dividends

    5.7        7.7        10.2        7.7        10.0   

 

(1)   Deemed to be immaterial