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AMERUS GROUP CO.
(an Iowa corporation)
5,000,000 PRIDES(SM)
(Initially consisting of 5,000,000 Income PRIDES(SM))
PURCHASE AGREEMENT
May 21, 2003
"PRIDES" and "Income PRIDES" are service marks of Merrill Lynch & Co., Inc.
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AMERUS GROUP CO.
(an Iowa corporation)
5,000,000 PRIDES(SM)
(Initially consisting of 5,000,000 Income PRIDES(SM))
PURCHASE AGREEMENT
May 21, 2003
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Goldman, Sachs & Co.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
4 World Financial Center
New York, New York 10080
Ladies and Gentlemen:
AMERUS GROUP CO., an Iowa corporation (the "Company"), confirms its
agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") and each of the other Underwriters named in
Schedule A hereto (collectively, the "Underwriters," which term shall also
include any underwriter substituted as hereinafter provided in Section 10
hereof), for whom Merrill Lynch and Goldman, Sachs & Co. are acting as
Representatives (in such capacity, the "Representatives"), with respect to the
issue and sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the respective number of PRIDES(SM) set forth on
said Schedule A (the "Initial Securities"). Each PRIDES initially will consist
of a unit (referred to as "Income PRIDES") with a stated amount of $25 (the
"Stated Amount") comprised of (a) a stock purchase contract (the "Purchase
Contract") under which (i) the holder will agree to purchase from the Company on
August 16, 2006 (the "Purchase Contract Settlement Date"), a number of shares of
common stock, no par value, of the Company (the "Common Stock") equal to the
Settlement Rate (as defined in the Purchase Contract Agreement referred to
below) and (ii) the Company will pay to the holder contract adjustment payments
of 0.75% of the Stated Amount, and (b) a Senior Note of the Company (the
"Notes"), having a stated principal amount of $25. The Company also proposes to
grant to the Underwriters an option to purchase up to 750,000 additional PRIDES
(the "Option Securities" and together with the Initial Securities, the
"Securities"), as described below in Section 2, to cover over-allotments.
In accordance with the terms of the Purchase Contract Agreement, to be
dated as of Closing Time (as defined below) (the "Purchase Contract Agreement"),
between the Company and Wachovia Bank, National Association, as purchase
contract agent (the "Purchase Contract
Agent"), the Notes constituting a part of the Securities will be pledged by the
Purchase Contract Agent, on behalf of the holders of the Income PRIDES, to BNY
Midwest Trust Company, as collateral agent (the "Collateral Agent"), pursuant to
the Pledge Agreement, to be dated as of Closing Time (the "Pledge Agreement"),
among the Company, the Purchase Contract Agent and the Collateral Agent, to
secure the holders' obligations to purchase Common Stock under the Purchase
Contracts. The shares of Common Stock issuable pursuant to the Purchase
Contracts are hereinafter called the "Shares." The rights and obligations of a
holder of Securities in respect of the Notes, subject to the pledge thereof, and
Purchase Contracts will be evidenced by Security Certificates (the "Security
Certificates") to be issued pursuant to the Purchase Contract Agreement.
The Notes will be issued pursuant to an indenture, dated as of June 16,
1998, between the Company and Wachovia Bank, National Association, as trustee
(the "Trustee"), as supplemented by an officer's certificate to be dated as of
the Closing Time (the indenture as so supplemented, the "Indenture").
Pursuant to a Remarketing Agreement (the "Remarketing Agreement") to be
dated as of Closing Time between the Company, the Purchase Contract Agent and
Merrill Lynch, certain Notes may be remarketed, subject to certain terms and
conditions set forth in the Remarketing Agreement.
As used in this Agreement, the term "Operative Documents" means this
Agreement, the Purchase Contract Agreement (including the Purchase Contracts),
the Pledge Agreement, the Remarketing Agreement, the Senior Notes and the
Indenture.
The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission
(hereinafter called the "Commission") a registration statement on Form S-3 (File
No. 333-50249) for the registration of the Securities and certain other
securities of the Company under the Securities Act of 1933, as amended (the
"1933 Act"), and the offering thereof from time to time in accordance with Rule
415 of the rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations"). Such registration statement has been declared effective by
the Commission and the Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended (the "1939 Act"), and the Company has filed
such post-effective amendments thereto as may be required prior to the execution
of this Agreement and each such post-effective amendment has been declared
effective by the Commission. Such registration statement (as so amended, if
applicable), including the information, if any, deemed to be a part thereof
pursuant to Rule 430A(b) of the 1933 Act Regulations (the "Rule 430A
Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule 434
Information"), is referred to herein as the "Registration Statement"; and the
final prospectus and the final prospectus supplement relating to the offering of
the Securities, in the form first furnished to the Underwriters by the Company
for use in connection with the offering of the Securities, are collectively
referred to herein as the "Prospectus"; provided, however, that all references
to the "Registration Statement" and the "Prospectus" shall also be deemed to
include all documents incorporated therein by reference
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pursuant to the Securities Exchange Act of 1934, as amended (the "1934 Act"),
prior to the execution of this Agreement; provided, further, that if the Company
files a registration statement with the Commission pursuant to Rule 462(b) of
the 1933 Act Regulations (the "Rule 462(b) Registration Statement"), then, after
such filing, all references to "Registration Statement" shall also be deemed to
include the Rule 462 Registration Statement; and provided, further, that if the
Company elects to rely upon Rule 434 of the 1933 Act Regulations, then all
references to "Prospectus" shall also be deemed to include the final or
preliminary prospectus and the applicable term sheet or abbreviated term sheet
(the "Term Sheet"), as the case may be, in the form first furnished to the
Underwriters by the Company in reliance upon Rule 434 of the 1933 Act
Regulations, and all references in this Agreement to the date of the Prospectus
shall mean the date of the Term Sheet. A "preliminary prospectus" shall be
deemed to refer to (i) any prospectus used before the Registration Statement
became effective and (ii) any prospectus that omitted, as applicable, the Rule
430A Information, the Rule 434 Information or other information to be included
upon pricing in a form of prospectus filed with the Commission pursuant to Rule
424(b) of the 1933 Act Regulations and was used after such effectiveness. For
purposes of this Agreement, all references to the Registration Statement,
Prospectus, Term Sheet or preliminary prospectus or to any amendment or
supplement to any of the foregoing shall be deemed to include any copy filed
with the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Registration Statement, any preliminary prospectus or the
Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include the filing of
any document under the 1934 Act, which is incorporated by reference in the
Registration Statement, such preliminary prospectus or the Prospectus, as the
case may be.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(d) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b), hereof and agrees with each Underwriter,
as follows:
(i) Compliance with Registration Requirements. The
Company meets the requirements for use of Form S-3 under the 1933 Act.
Each of the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendment thereto has become effective
under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement, any Rule 462(b) Registration Statement or
any post-effective amendment thereto has been issued under the 1933 Act
and no proceedings for that purpose have been instituted or are pending
or, to the knowledge of the Company, are contemplated by the
Commission, and any request on the part of the Commission for
additional information has been complied with.
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At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became effective and at the Closing Time (and, if any Option Securities
are purchased, at the Date of Delivery), the Registration Statement,
the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
the 1939 Act and the rules and regulations of the Commission under the
1939 Act (the "1939 Act Regulations"), and did not and will not contain
an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading. Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any amendment or
supplement was issued and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. The representations and warranties in this subsection
shall not apply to (i) statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any Underwriter
through Merrill Lynch expressly for use in the Registration Statement
(or any amendment thereto) or the Prospectus (or any amendment or
supplement thereto) or (ii) to that part of the Registration Statement
that constitutes the Statement of Eligibility under the 1939 Act (Form
T-1) of the Trustees.
Each preliminary prospectus and the 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 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this offering
was identical to the electronically transmitted copies thereof filed
with the Commission pursuant to EDGAR, except to the extent permitted
by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or
deemed to be incorporated by reference in the Registration Statement
and the Prospectus, at the time they were or hereafter are filed with
the Commission, complied and will comply in all material respects with
the requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read
together with the other information in the Prospectus, at the time the
Registration Statement became effective, at the time the Prospectus was
issued and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), did not and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(iii) Independent Accountants. The accountants who
certified the financial statements and supporting schedules included in
the Registration Statement are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
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(iv) Financial Statements. The financial statements
included in the Registration Statement and the Prospectus, together
with the related schedules and notes, present fairly the financial
position of the Company and its consolidated subsidiaries at the dates
indicated and the statement of operations, stockholders' equity and
cash flows of the Company and its consolidated subsidiaries for the
periods specified; except as noted in the Registration Statement, said
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any,
included in the Registration Statement present fairly in accordance
with GAAP the information required to be stated therein. The summary
financial information included in the Prospectus presents fairly the
information shown therein and has been compiled on a basis consistent
with that of the audited financial statements included in the
Registration Statement. The pro forma financial statements and the
related notes thereto included in the Registration Statement and the
Prospectus present fairly the information shown therein, have been
prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly
compiled on the bases described therein, and the assumptions used in
the preparation thereof are reasonable and the adjustments used therein
are appropriate to give effect to the transactions and circumstances
referred to therein.
(v) No Material Adverse Change in Business. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition, financial
or otherwise, or in the earnings, business conditions or business
prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Effect"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one
enterprise, and (C) except for the regular annual dividend on the
Common Stock in amounts per share that are consistent with past
practice, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(vi) Good Standing of the Company. The Company has been
duly organized and is validly existing as a corporation in good
standing under the laws of the State of Iowa and has corporate power
and authority to own, lease and operate its properties and to conduct
its business as described in the Prospectus and to enter into and
perform its obligations under each Operative Document; and the Company
is duly qualified as a foreign corporation to transact business and is
in good standing in each other jurisdiction in which such qualification
is required, whether by reason of the ownership or leasing of property
or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has
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corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect. The only
subsidiaries of the Company are (a) the subsidiaries listed on Schedule
C hereto and (b) certain other subsidiaries which, considered in the
aggregate as a single Subsidiary, do not constitute a "significant
subsidiary" as defined in Rule 1-02 of Regulation S-X.
(viii) Capitalization. The Company has an authorized
capitalization as set forth in the Prospectus, and all of the issued
shares of capital stock of the Company have been duly and validly
authorized and issued, are fully paid and non-assessable and conform to
the description thereof in the Prospectus; and all of the issued shares
of capital stock of each Subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and
(except as disclosed in the Prospectus) all of the issued shares of
capital stock of each Subsidiary are owned directly or indirectly by
the Company, free and clear of all liens, encumbrances, equities or
claims; none of the outstanding shares of capital stock of the Company
or any Subsidiary was issued in violation of the Preemptive or similar
rights of any securityholder of the Company or such Subsidiary, as the
case may be.
(ix) Authorization of Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
(x) Authorization of the PRIDES. The PRIDES (which
include the Income PRIDES) have been duly authorized by the Company and
when executed and delivered by the Company will constitute the valid
and binding obligations of the Company, enforceable against the Company
in accordance with their terms, except as the enforcement thereof may
be limited by bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium
or similar laws affecting enforcement of creditors' rights generally
and except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding
in equity or at law), and will conform in all material respects to the
description thereof in the Prospectus. The Company has applied to list
the Income PRIDES on the New York Stock Exchange; and the issuance of
the Income PRIDES will not be subject to preemptive or other similar
rights.
(xi) Authorization of the Shares. The Shares to be issued
and sold by the Company pursuant to the Purchase Contract Agreement
have been duly authorized for issuance by the Company and, when issued
and delivered in accordance with the provisions of the Purchase
Contract Agreement, will be validly issued and fully paid and
non-assessable; and the issuance of the Shares is not and will not be
subject to preemptive or other similar rights.
(xii) Authorization of the Indenture. The Indenture has
been duly authorized by the Company and duly qualified under the 1939
Act and, when the officer's certificate
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pursuant to the Indenture is duly executed and delivered by the Company
and the Trustee, will constitute a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law). The Indenture will conform in all material respects
to the description thereof contained in the Prospectus.
(xiii) Authorization of the Notes. The Notes have been duly
authorized and, at the Closing Time, will have been duly executed by
the Company and, when authenticated, issued and delivered in the manner
provided for in the Indenture and delivered against payment therefor as
provided in this Agreement, will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding
in equity or at law), and will be in the form contemplated by, and
entitled to the benefits of, the Indenture. The Notes will conform in
all material respects to the description thereof contained in the
Prospectus.
(xiv) Authorization of the Pledge Agreement. The Pledge
Agreement has been duly authorized by the Company and, when validly
executed and delivered by the Company and assuming due authorization,
execution and delivery of the Pledge Agreement by the other parties
thereto, the Pledge Agreement will constitute a valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding
in equity or at law). The Pledge Agreement will conform in all material
respects to the description thereof contained in the Prospectus.
(xv) Authorization of the Purchase Contract Agreement. The
Purchase Contract Agreement has been duly authorized by the Company
and, when validly executed and delivered by the Company and assuming
due authorization, execution and delivery of the Purchase Contract
Agreement by the other parties thereto, the Purchase Contract Agreement
will constitute a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of
whether enforcement is considered in a
7
proceeding in equity or at law). The Purchase Contract Agreement will
conform in all material respects to the description thereof contained
in the Prospectus.
(xvi) Authorization of the Remarketing Agreement. The
Remarketing Agreement has been duly authorized by the Company and, when
validly executed and delivered by the Company and assuming due
authorization, execution and delivery of the Remarketing Agreement by
the other parties thereto, the Remarketing Agreement will constitute a
valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as the enforcement thereof
may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors' rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is considered
in a proceeding in equity or at law). The Remarketing Agreement will
conform in all material respects to the description thereof contained
in the Prospectus.
(xvii) Security Interest. The provisions of the Pledge
Agreement are effective to create in favor of the Collateral Agent for
the benefit of the Company a valid security interest under the Uniform
Commercial Code as in effect in the State of New York on the date
hereof (the "UCC") in all "security entitlements" (as defined in
Section 8-102(a)(17) of the UCC and the Federal Book-Entry Regulations)
now or hereafter carried in to the Notes, the Treasury Securities or
the Applicable Ownership Interest in the applicable Treasury Portfolio
(the "Pledged Securities Entitlements"); and the provisions of the
Pledge Agreement are effective under the UCC and the Federal Book-Entry
Regulations to perfect the security interest of the Collateral Agent
for the benefit of the Company in the Pledged Security Entitlements.
(xviii) Description of Securities. The statements set forth
in the Prospectus as amended or supplemented under the captions
"Description of the PRIDES", "Description of the Purchase Contracts",
"Other Provisions of the Purchase Contract Agreement and the Pledge
Agreement," "Specific Terms of the Senior Notes," "Material Federal
Income Tax Consequences" and "Description of Capital Stock", insofar as
they purport to constitute a summary of the terms of the Securities or
the Operative Documents, are accurate, complete and fair in all
material respects.
(xix) State Insurance Licenses. Each Material Regulated
Insurance Company possesses all state insurance licenses required to be
held by such Material Regulated Insurance Company in each jurisdiction
in which it does business where the failure to be so licensed would
have a Material Adverse Effect. "Material Regulated Insurance Company"
means each subsidiary of the company that (i) is authorized or admitted
to carry on or transact insurance business in any jurisdiction and is
regulated by any Applicable Insurance Regulatory Authority and (ii) has
a statutory surplus equal to or greater than $15 million. "Applicable
Insurance Regulatory Authority" means, with respect to any Material
Regulated Insurance Company, the insurance department or similar
administrative authority or agency located in (X) each state in which
such Material Regulated Insurance Company is domiciled or (Y) to the
extent asserting regulatory jurisdiction over such Regulated Insurance
Company, the insurance
8
department, authority or agency in each state in which such Material
Regulated Insurance Company is licensed.
(xx) Possession of Permits and Licenses. The Company and
its Subsidiaries (i) possess adequate certificates, authorities or
permits issued by appropriate government agencies or bodies necessary
to conduct the business now operated by them and (ii) have not received
any notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit which, in the case of (i) or
(ii) above, if determined adversely to the Company or any of its
subsidiaries, would result, individually or in the aggregate, in a
Material Adverse Effect; each of the Material Regulated Insurance
Companies is in compliance with the requirements of the insurance laws
and regulations of its respective 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 information ("Notices")
required to be filed thereunder, in each case, with such exceptions,
individually or in the aggregate, as would not have a Material Adverse
Effect; and, except as otherwise specifically described in the
Registration Statement and the Prospectus, no Material Regulated
Insurance Company has received any notification from any insurance
regulatory authority to the effect that any additional authorization,
approval, order, consent, license, certificate, permit, registration or
qualification ("Approvals") from such insurance regulatory authority is
needed to be obtained by any of the Material Regulated Insurance
Companies and the failure to obtain such Approvals would have a
Material Adverse Effect.
(xxi) Absence of Defaults and Conflicts. Neither the
Company nor any of its Subsidiaries is in violation of its charter or
by-laws. Neither the Company nor any of its subsidiaries is in default
in the performance or observance of any obligation, agreement, covenant
or condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which it or any of them may be bound, or to which any of the
property or assets of the Company or any subsidiary is subject
(collectively, "Agreements and Instruments") except for such defaults
that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement and the other Operative
Documents, the entry by the Company into the Purchase Contracts
underlying the Income PRIDES, the issuance of the Shares and the sale
of the Shares pursuant to the Purchase Contracts, and the consummation
of the transactions contemplated herein, in the other Operative
Documents and in the Registration Statement (including the issuance and
sale of the Securities, and the use of the proceeds from the sale of
the Securities as described in the Prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations hereunder
and under the other Operative Documents have been duly authorized by
all necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches, defaults or Repayment Events or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor
will such action result in any violation of the
9
provisions of the charter or by-laws of the Company or any Subsidiary
or any applicable law, statute, rule, regulation, judgment, order, writ
or decree of any court, insurance regulatory authority or other
governmental agency or body, domestic or foreign, having jurisdiction
over the Company or any Subsidiary or any of their assets, properties
or operations. As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or
a portion of such indebtedness by the Company or any subsidiary.
(xxii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge
of the Company, is imminent, and the Company is not aware of any
existing or imminent labor disturbance by the employees of any of its
or any subsidiary's principal customers or contractors, which, in
either case, would result in a Material Adverse Effect.
(xxiii) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or brought by any court or
any insurance regulatory authority or other governmental agency or
body, domestic or foreign, now pending, or, to the knowledge of the
Company, threatened, against or affecting the Company or any
subsidiary, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which would reasonably
be expected to result in a Material Adverse Effect, or which would
reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated in the Operative
Documents or the performance by the Company of its obligations
thereunder; the aggregate of all pending legal or governmental
proceedings to which the Company or any subsidiary is a party or of
which any of their respective property or assets is the subject which
are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, would not reasonably be
expected to result in a Material Adverse Effect.
(xxiv) Accuracy of Exhibits. There are no contracts or
documents which are required to be described in the Registration
Statement, the Prospectus or the documents incorporated by reference
therein or to be filed as exhibits thereto which have not been so
described and filed as required.
(xxv) Possession of Intellectual Property. The Company and
its subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property (collectively, "Intellectual Property") necessary
to carry on the business now operated by them, and neither the Company
nor any of its subsidiaries has received any notice or is otherwise
aware of any infringement of or conflict with asserted rights of others
with respect to any Intellectual Property or of any facts or
circumstances which would render any Intellectual Property invalid or
inadequate to protect the interest of the Company or any of its
subsidiaries therein, and which infringement or conflict (if the
subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
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(xxvi) Absence of Manipulation. Neither the Company nor any
affiliate of the Company has taken, nor will the Company or any
affiliate take, directly or indirectly, any action which is designed to
or which has constituted or which would be expected to cause or result
in stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the Securities.
(xxvii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court, insurance regulatory authority
or other governmental authority or agency is necessary or required for
the due execution, delivery and performance by the Company of its
obligations hereunder and under the other Operative Documents, in
connection with the offering, issuance or sale of the Securities
hereunder or under any other Operative Document, or the consummation of
the transactions contemplated by this Agreement or any other Operative
Document, except such as have been already obtained or as may be
required under the 1933 Act or the 1933 Act Regulations or state
securities laws and except for the qualification of the Indenture under
the 1939 Act.
(xxviii) Title to Property. (a) The Company and its
subsidiaries have good and marketable title to all real property and
good and marketable title to all personal property owned by them, in
each case free and clear of all liens, encumbrances and defects except
such as are described in the Registration Statement and Prospectus; and
(b) any real property and buildings held under lease by the Company and
its subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material or do not
interfere with the use made and proposed to be made of such property
and buildings by the Company and its subsidiaries; except, in the case
of (a) and (b), where failure to hold such title or lease would not
result, individually or in the aggregate, in a Material Adverse Effect.
(xxix) Investment Company Act. The Company is not required,
and upon the issuance and sale of the Securities as herein contemplated
and the application of the net proceeds therefrom as described in the
Prospectus will not be required, to register as an "investment company"
under the Investment Company Act of 1940, as amended (the "1940 Act").
(xxx) Environmental Laws. Except as described in the
Registration Statement and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries is in violation of any federal, state,
local or foreign statute, law, rule, regulation, ordinance, code,
policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of
human health, the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface strata) or
wildlife, including, without limitation, laws and regulations relating
to the release or threatened release of chemicals, pollutants,
contaminants, wastes, toxic substances, hazardous substances, petroleum
or petroleum products, asbestos-containing materials or mold
(collectively, "Hazardous Materials") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport
or handling of Hazardous Materials (collectively, "Environmental
Laws"), (B) the Company
11
and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or
threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or
violation, investigation or proceedings relating to any Environmental
Law against the Company or any of its subsidiaries and (D) there are no
events or circumstances that would reasonably be expected to form the
basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency, against
or affecting the Company or any of its subsidiaries relating to
Hazardous Materials or any Environmental Laws.
(b) Officer's Certificates. Any certificate signed by any officer
of the Company or any of its subsidiaries delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby.
SECTION 2. Sale and Delivery to the Underwriter; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, severally and not
jointly, and each Underwriter, severally and not jointly, agrees to purchase
from the Company, at the price per Security set forth in Schedule B, the number
of Initial Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional number of Initial Securities which such
Underwriter may become obligated to purchase pursuant to the provisions of
Section 10 hereof.
(b) Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
Underwriters, severally and not jointly, to purchase up to an additional 750,000
PRIDES, consisting solely of Income Prides, at the price per share set forth in
Schedule B. The option hereby granted will expire 13 days after the date the
PRIDES are initially issued and may be exercised in whole or in part from time
to time only for the purpose of covering over-allotments which may be made in
connection with the offering and distribution of the Initial Securities upon
notice by Merrill Lynch to the Company setting forth the number of Option
Securities as to which the several Underwriters are then exercising the option
and the time and date of payment and delivery for such Option Securities. Any
such time and date of delivery (a "Date of Delivery") shall be determined by
Merrill Lynch, but shall not be later than seven full business days after the
exercise of said option, nor in any event prior to the Closing Time, as
hereinafter defined. If the option is exercised as to all or any portion of the
Option Securities, each of the Underwriters, acting severally and not jointly,
will purchase that proportion of the total number of Option Securities then
being purchased which the number of Initial Securities set forth in Schedule A
opposite the name of such Underwriter bears to the total number of Initial
Securities.
(c) Pledge. The Notes will be pledged with the Collateral Agent to
secure the obligations of the holders to purchase Common Stock under the
Purchase Contracts. Such
12
pledge shall be effected by the transfer to the Collateral Agent of the Notes at
the Closing Time and appropriate Date of Delivery, if any, in accordance with
the Pledge Agreement.
(d) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Mayer,
Brown, Rowe & Maw, 190 South LaSalle Street, Chicago, Illinois 60603, or at such
other place as shall be agreed upon by the Representatives and the Company, at
9:00 A.M. (Eastern time) on the fourth business day after the date hereof
(unless postponed in accordance with the provisions of Section 10), or such
other time not later than ten business days after such date as shall be agreed
upon by the Representatives and the Company (such time and date of payment and
delivery being herein called "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of global
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. Merrill Lynch, individually and not as Representatives of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(e) Denominations; Registration. Certificates for the Initial
Securities and the Option Securities, if any, shall be in such denominations and
registered in such names as the Representatives may request in writing at least
one full business day before the Closing Time or the relevant Date of Delivery,
as the case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. Covenants of the Company. The Company covenants with
each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission
Requests. The Company, subject to Section 3(b), will comply with the
requirements of Rule 430A and will notify the Representatives promptly,
and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectus or any amended Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii)
of any request by the Commission
13
for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or any document incorporated by reference
therein or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or of any order preventing or suspending the use
of any preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings
for any of such purposes. The Company will promptly effect the filings
necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus
transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file
such prospectus. The Company will make every reasonable effort to
prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. During the period when the
Prospectus is required to be delivered under the 1933 Act, the Company
will give the Representatives notice of its intention to file or
prepare any amendment to the Registration Statement (including any
filing under Rule 462(b)) or any amendment, supplement or revision to
either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, whether pursuant to the
1933 Act, the 1934 Act or otherwise, will furnish the Representatives
with copies of any such documents a reasonable amount of time prior to
such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representatives or counsel for the
Underwriters shall object.
(c) Delivery of Registration Statements. The Company has
furnished or will deliver to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference
therein) and signed copies of all consents and certificates of experts,
and will also deliver to the Representatives, without charge, a
conformed copy of the Registration Statement as originally filed and of
each amendment thereto (without exhibits) for each of the Underwriters.
The copies of the Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered
to each Underwriter, without charge, as many copies of each preliminary
prospectus as such Underwriter reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the
1933 Act. The Company will furnish to each Underwriter, without charge,
during the period when the Prospectus is required to be delivered under
the 1933 Act or the 1934 Act, such number of copies of the Prospectus
(as amended or supplemented) as such Underwriter may reasonably
request. The Prospectus and any amendments or supplements thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation S-T.
14
(e) Continued Compliance with Securities Laws. The
Company will comply with the 1933 Act and the 1933 Act Regulations, the
1934 Act and the 1934 Act Regulations and the 1939 Act and the 1939 Act
Regulations so as to permit the completion of the distribution of the
Securities as contemplated in this Agreement and in the Prospectus. If
at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in
the opinion of counsel for the Underwriters or for the Company, to
amend the Registration Statement or amend or supplement the Prospectus
in order that the Prospectus will not include any untrue statements of
a material fact or omit to state a material fact necessary in order to
make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or
if it shall be necessary, in the opinion of such counsel, at any such
time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or
the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(b), such amendment or
supplement as may be necessary to correct such statement or omission or
to make the Registration Statement or the Prospectus comply with such
requirements, and the Company will furnish to the Underwriters such
number of copies of such amendment or supplement as the Underwriters
may reasonably request.
(f) Blue Sky Qualifications. The Company will use its
best efforts, in cooperation with the Underwriters, to qualify the
Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions as the Representatives may
designate and to maintain such qualifications in effect for a period of
not less than one year from the later of the effective date of the
Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the Company shall not be obligated to file any
general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which
it is not so qualified or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise so
subject. The Company will also supply the Underwriters with such
information as is necessary for the determination of the legality of
the Securities for investment under the laws of such jurisdictions as
the Underwriters may request.
(g) Rule 158. The Company will timely file such reports
pursuant to the 1934 Act as are necessary in order to make generally
available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide the benefits contemplated
by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net
proceeds received by it from the sale of the Securities in the manner
specified in the Prospectus under "Use of Proceeds".
(i) Listing. The Company will use its best efforts to (A)
duly register the Income PRIDES under the 1934 Act and (B) effect and
maintain the listing of the Income PRIDES on the New York Stock
Exchange.
15
(j) Restriction on Sale of Securities. During a period of
ninety (90) days from the date of the Prospectus, the Company will not,
without the prior written consent of Merrill Lynch (A) directly or
indirectly, offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant
any option, right or warrant to purchase or otherwise transfer or
dispose of any PRIDES, Purchase Contracts, Common Stock or any similar
securities or any security convertible into or exercisable or
exchangeable for PRIDES, Purchase Contracts, Common Stock or similar
securities or file any Registration Statement under the 1933 Act with
respect to any of the foregoing; or (B) enter into any swap or any
other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of
PRIDES, Purchase Contracts, Common Stock or similar securities or any
security convertible into or exercisable or exchangeable for PRIDES,
Purchase Contracts, Common Stock or similar securities, whether any
such swap or transaction described in clause (i) or (ii) is to be
settled by delivery of PRIDES, Purchase Contracts, Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall
not apply to (A) the Securities to be sold hereunder, (B) any shares of
Common Stock issued by the Company upon the exercise of an option or
warrant or the conversion of a security outstanding on the date hereof
and referred to in the Prospectus, (C) any shares of Common Stock
issued or options to purchase Common Stock granted pursuant to existing
employee benefit plans of the Company referred to in the Prospectus or
(D) any shares of Common Stock issued pursuant to any non-employee
director stock plan or dividend reinvestment plan.
(k) Reporting Requirements. The Company, during the
period when the Prospectus is required to be delivered under the 1933
Act, will file all documents required to be filed with the Commission
pursuant to the 1934 Act within the time periods required by the 1934
Act and the 1934 Act Regulations.
(l) Reserved Shares. The Company has reserved and will
keep available at all times, free of preemptive or other similar rights
and liens and adverse claims, sufficient shares of Common Stock to
satisfy its obligations to issue Shares upon settlement of the Purchase
Contracts.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will
pay all expenses incident to the performance of its obligations under each of
the Operative Documents, including (i) the preparation, printing and filing of
the Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters, the other Operative Documents and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery
of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the Securities to the Underwriters, (iv) the fees and
disbursements of the Company's counsel, accountants and other advisors, or
agents (including transfer agents and registrars), as well as the fees and
disbursements of the Purchase Contract Agent, the Collateral Agent, any
depositary and their respective counsel, (v) the qualification of the Securities
under securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky
16
Survey and any supplement thereto, (vi) the printing and delivery to the
Underwriters of copies of each preliminary prospectus and of the Prospectus and
any amendments or supplements thereto, (vii) the preparation, printing and
delivery to the Underwriters of copies of the Blue Sky Survey and any supplement
thereto, (viii) the fees and expenses of the Trustee, including the fees and
disbursements of counsel for the Trustee in connection with the Indenture and
the Securities, (ix) the costs and expenses of the Company relating to investor
presentations on any "road show" undertaken in connection with the marketing of
the Securities, including without limitation, expenses associated with the
production of road show slides and graphics, fees and expenses of any
consultants engaged in connection with the road show presentations, travel and
lodging expenses of the Representatives and officers of the Company and any such
consultants, and the cost of aircraft and other transportation chartered in
connection with the road show, (x) any fees payable in connection with the
rating of the Securities and (xi) the fees and expenses incurred in connection
with the listing of the Income PRIDES and the Shares on the New York Stock
Exchange.
(a) Termination of Agreement. If this Agreement is terminated by
the Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the Underwriters for all of their
out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. Conditions of Underwriters' Obligations. The
obligations of the several Underwriters hereunder are subject to the accuracy of
the representations and warranties of the Company contained in Section 1 hereof
or in certificates of any officer of the Company or any subsidiary of the
Company delivered pursuant to the provisions hereof, to the performance by the
Company of its covenants and other obligations hereunder, and to the following
further conditions:
(a) Effectiveness of Registration Statement. The
Registration Statement, including any Rule 462(b) Registration
Statement, has become effective and at Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have
been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A
prospectus containing the Rule 430A Information shall have been filed
with the Commission in accordance with Rule 424(b) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A).
(b) Opinion of Counsel for Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Skadden, Arps, Slate, Meagher & Flom, counsel for the
Company, in form and substance satisfactory to counsel for the
Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters to the effect set forth in Exhibit A
hereto and to such further effect as counsel to the Underwriters may
reasonably request.
(c) General Counsel Opinion. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of
Closing Time, of Joseph K. Haggerty,
17
Esq., Senior Vice President and General Counsel of the Company, in form
and substance satisfactory to counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit B hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(d) Opinion of Counsel for Purchase Contract Agent. At
Closing Time, the Underwriters shall have received the favorable
opinion, dated as of Closing Time, of counsel to the Purchase Contract
Agent, which counsel shall be reasonably acceptable to the
Representatives, in form and substance satisfactory to counsel for the
Underwriters, to the effect set forth in Exhibit C hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(e) Opinion of Counsel for Underwriters. At Closing Time,
the Representatives shall have received the favorable opinion, dated as
of Closing Time, of Mayer, Brown, Rowe & Maw, counsel for the
Underwriters, together with signed or reproduced copies of such letter
for each of the other Underwriters with respect to such matters as the
Representatives shall request. In giving such opinion such counsel may
rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of New York and the federal law of the United
States, upon the opinions of counsel satisfactory to the
Representatives. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and its
subsidiaries and certificates of public officials.
(f) Officers' Certificate. At Closing Time, there shall
not have been, since the date hereof or since the respective dates as
of which information is given in the Prospectus, any material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in
the ordinary course of business, and the Representatives shall have
received a certificate of the President or a Vice President of the
Company and of the chief financial or chief accounting officer of the
Company, dated as of Closing Time, to the effect that (i) there has
been no such material adverse change, (ii) the representations and
warranties in Section 1(a) hereof are true and correct with the same
force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to
Closing Time, and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or, to their knowledge, are
contemplated by the Commission.
(g) Accountant's Comfort Letter. At the time of the
execution of this Agreement, the Representatives shall have received
from each of Ernst & Young LLP and KPMG LLP a letter dated such date,
in form and substance satisfactory to the Representatives, together
with signed or reproduced copies of such letter for each of the other
Underwriters containing statements and information of the type
ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements
18
and certain financial information contained in the Registration
Statement and the Prospectus.
(h) Bring-down Comfort Letter. At Closing Time, the
Representatives shall have received from Ernst & Young LLP a letter,
dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (g) of
this Section, except that the specified date referred to shall be a
date not more than three business days prior to Closing Time.
(i) Maintenance of Rating. At Closing Time, the
Securities shall be rated at least Baa3 by Moody's Investor's Service
Inc. ("Moody's") and BBB+ by Standard & Poor's Ratings Group, a
division of McGraw-Hill, Inc. ("S&P"), and the Company shall have
delivered to the Representatives a letter dated the Closing Time, from
each such rating agency, or other evidence satisfactory to the
Representatives, confirming that the Securities have such ratings; and
since the date of this Agreement, there shall not have occurred a
downgrading in the rating assigned to the Securities or any of the
Company's other securities or the Company's financial strength or
claims paying ability by Moody's, S&P or Fitch, Inc., and none of
Moody's, S&P or Fitch, Inc. shall have publicly announced that it has
under surveillance or review its rating of the Securities or any of the
Company's other securities or the Company's financial strength or
claims paying ability.
(j) Approval of Listing. The Income PRIDES shall have
been (A) duly registered under the 1934 Act and (B) approved for
listing, subject to official notice of issuance and evidence of
satisfactory distribution, on the New York Stock Exchange, and
satisfactory evidence of such actions shall have been provided to the
Underwriters.
(k) Lock-up Agreements. At the date of this Agreement,
the Representatives shall have received an agreement substantially in
the form of Exhibit D hereto signed by the persons listed on Schedule D
hereto.
(l) Conditions to Purchase of Option Securities. In the
event that the Underwriters exercise their option provided in Section
2(b) hereof to purchase all or any portion of the Option Securities,
the representations and warranties of the Company contained herein and
the statements in any certificates furnished by the Company or any
subsidiary of the Company hereunder shall be true and correct as of
each Date of Delivery and, at the relevant Date of Delivery, the
Representatives shall have received:
(i) Officers' Certificate. A certificate, dated such Date
of Delivery, of the President or a Vice President of the
Company and of the chief financial or chief accounting officer
of the Company confirming that the certificate delivered at
the Closing Time pursuant to Section 5(f) hereof remains true
and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinion
of Skadden, Arps, Slate, Meagher & Flom, counsel for the
Company, in form and substance satisfactory to counsel for the
Underwriters, dated such Date of Delivery, relating
19
to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iii) General Counsel Opinion. The favorable opinion of
Joseph K. Haggerty, Esq., Senior Vice President and General
Counsel of the Company, dated such Date of Delivery, relating
to the Option Securities to be purchased on such Date of
Delivery and otherwise to the same effect as the opinion
required by Section 5(c) hereof.
(iv) Opinion of Counsel for Purchase Contract Agent. The
favorable opinion of counsel for the Purchase Contract Agent,
which counsel shall be reasonably acceptable to the
Representatives, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by
Section 5(d) hereof.
(v) Opinion of Counsel for Underwriters. The favorable
opinion of Mayer, Brown, Rowe & Maw, counsel for the
Underwriters, dated such Date of Delivery, relating to the
Option Securities to be purchased on such Date of Delivery and
otherwise to the same effect as the opinion required by
Section 5(e) hereof.
(vi) Bring-down Comfort Letter. A letter from Ernst &
Young LLP, in form and substance satisfactory to the
Representatives and dated such Date of Delivery, substantially
in the same form and substance as the letter furnished to the
Representatives pursuant to Section 5(g) hereof, except that
the "specified date" in the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to
such Date of Delivery.
(vii) No Downgrading. Subsequent to the date of this
Agreement, no downgrading shall have occurred in the rating
accorded the Securities or of any of the Company's other
securities by Moody's, S&P or Fitch, Inc., and none of
Moody's, S&P or Fitch, Inc. shall have publicly announced that
it has under surveillance or review its ratings of any of the
Company's securities.
(b) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the Underwriters shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations
or warranties, or the fulfillment of any of the conditions, herein contained;
and all proceedings taken by the Company in connection with the issuance and
sale of the Securities as herein contemplated shall be satisfactory in form and
substance to the Representatives and counsel for the Underwriters.
(c) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of Option
Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by notice to the Company at
any time at or prior to Closing
20
Time or such Date of Delivery, as the case may be, and such termination shall be
without liability of any party to any other party except as provided in Section
4 and except that Sections 1, 6, 7 and 8 shall survive any such termination and
remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter, its affiliates, as such term is
defined in Rule 501(b) under the 1933 Act (each, an "Affiliate"), its selling
agents and each person, if any, who controls any Underwriter within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), including the
Rule 430A Information, or the omission or alleged omission therefrom of
a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact included in
any preliminary prospectus or the Prospectus (or any amendment or
supplement thereto), or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by Merrill
Lynch), reasonably incurred in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that (A) this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company by any Underwriter through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information, or any preliminary prospectus or the Prospectus (or any amendment
or supplement thereto) and (B) as to any preliminary prospectus, the Prospectus
or any amendment or supplement thereto, this indemnity agreement shall not inure
to the benefit of any Underwriter on account of any loss,
21
liability, claim, damage or expense arising from the fact that such Underwriter
sold Securities to a person to whom there was not sent or given, at or prior to
the written confirmation of such sale, a copy of the Prospectus (excluding
documents incorporated by reference) as then amended or supplemented in any case
where such delivery is required by the 1933 Act if the Company has previously
furnished copies thereof to such Underwriter in the quantities requested and the
loss, claim, damage or liability of such Underwriter results from an untrue
statement or omission of a material fact contained in such preliminary
prospectus, Prospectus (excluding documents incorporated by reference) or
amendment or supplement thereto, which the Company has sustained the burden of
proving was corrected in the Prospectus (excluding documents incorporated by
reference) as then amended or supplemented.
(b) Indemnification of Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information, or
any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through Merrill Lynch expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof and in any event shall not relieve
it from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section 6(a)
above, counsel to the indemnified parties shall be selected by Merrill Lynch,
and, in the case of parties indemnified pursuant to Section 6(b) above, counsel
to the indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such action;
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii)
22
does not include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement.
SECTION 7. Contribution. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (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 pursuant to this Agreement or (ii) if the allocation provided
by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions
which resulted in such losses, liabilities, claims, damages or expenses, 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
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriters, in each case
as set forth on the cover of the Prospectus, bear to the aggregate initial
public offering price of the Securities as set forth on the cover of 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 any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or
23
other expenses reasonably incurred by such indemnified party in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
Notwithstanding the provisions of this Section 7, 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 which such
Underwriter has otherwise been required to pay by reason of any 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 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each Underwriter's Affiliates and selling agents shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. The Underwriters' respective obligations to
contribute pursuant to this Section 7 are several in proportion to the number of
Initial Securities set forth opposite their respective names in Schedule A
hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of (i) any investigation made by or on behalf of any
Underwriter or its Affiliates or selling agents, any person controlling any
Underwriter, its officers or directors or any person controlling the Company and
(ii) delivery of and payment for the Securities.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable or inadvisable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii) if trading in any
securities
24
of the Company has been suspended or materially limited by the Commission or the
New York Stock Exchange, or if trading generally on the American Stock Exchange
or the New York Stock Exchange or in the Nasdaq National Market has been
suspended or materially limited, or minimum or maximum prices for trading have
been fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers, Inc. or any other governmental authority, or
(iv) a material disruption has occurred in commercial banking or securities
settlement or clearance services in the United States, or (v) if a banking
moratorium has been declared by either Federal or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of Underwriters. If one or
more of the Underwriters shall fail at Closing Time or a Date of Delivery to
purchase the Securities which it or they are obligated to purchase under this
Agreement (the "Defaulted Securities"), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the
non-defaulting Underwriters, or any other underwriters, to purchase all, but not
less than all, of the Defaulted Securities in such amounts as may be agreed upon
and upon the terms herein set forth; if, however, the Representatives shall not
have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed
10% of the number of Securities to be purchased on such date, each of
the non-defaulting Underwriters shall be obligated, severally and not
jointly, to purchase the full amount thereof in the proportions that
their respective underwriting obligations hereunder bear to the
underwriting obligations of all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of
the number of Securities to be purchased on such date, this Agreement
or, with respect to any Date of Delivery which occurs after the Closing
Time, the obligation of the Underwriters to purchase and of the Company
to sell the Option Securities to be purchased and sold on such Date of
Delivery shall terminate without liability on the part of any
non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Securities,
as the case may be, either the Representatives or the Company shall have the
right to postpone Closing Time or the relevant Date of Delivery, as the case may
be, for a period not exceeding seven days in order to effect any required
changes in the Registration
25
Statement or Prospectus or in any other documents or arrangements. As used
herein, the term "Underwriter" includes any person substituted for an
Underwriter under this Section 10.
SECTION 11. Tax Disclosure. Notwithstanding any other provision
of this Agreement, immediately upon commencement of discussions with respect to
the transactions contemplated hereby, the Company (and each employee,
Representatives or other agent of the Company) may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax structure of
the transactions contemplated by this Agreement and all materials of any kind
(including opinions or other tax analyses) that are provided to the Company
relating to such tax treatment and tax structure. For purposes of the foregoing,
the term "tax treatment" is the purported or claimed federal income tax
treatment of the transactions contemplated hereby, and the term "tax structure"
includes any fact that may be relevant to understanding the purported or claimed
federal income tax treatment of the transactions contemplated hereby.
SECTION 12. Notices. All notices and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
mailed or transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at 4 World Financial
Center, New York, New York 10080, attention of William Egan; and notices to the
Company shall be directed to it at 699 Walnut Street, Des Moines, Iowa 50309,
attention of Melinda Urion, Chief Financial Officer, with a copy to Joseph K.
Haggerty, Senior Vice President and General Counsel.
SECTION 13. Parties. This Agreement shall each inure to the
benefit of and be binding upon the Underwriters and the Company and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 6 and 7
and their heirs and legal Representatives, any legal or equitable right, remedy
or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters and the Company and
their respective successors, and said controlling persons and officers and
directors and their heirs and legal Representatives, and for the benefit of no
other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 15. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT.
EXCEPT AS OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK
CITY TIME.
SECTION 16. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same Agreement.
SECTION 17. Effect of Headings. The Section headings herein are
for convenience only and shall not affect the construction hereof.
26
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriters and the Company in accordance with its terms.
Very truly yours,
AMERUS GROUP CO.
By: /s/ Thomas C. Godlasky
-------------------------------
Name: Thomas C. Godlasky
Title: Executive Vice President and
Chief Investment Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
GOLDMAN, SACHS & CO.
By: MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ William Egan
------------------------------
Authorized Signatory
For themselves and as Representatives of the
other Underwriters named in Schedule A hereto.
27
SCHEDULE A
Name of Underwriter Number of Initial Securities
------------------- ----------------------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.............................. 4,250,000
Goldman, Sachs & Co................................... 750,000
---------
Total................................................. 5,000,000
SCHEDULE B
AmerUs Group Co.
(an Iowa Corporation)
5,000,000 PRIDES (Stated Amount of $25 per PRIDE)
consisting of
5,000,000 Income PRIDES
1. The initial public offering price per Security, determined as
provided in said Section 2, shall be $25 per Security.
2. The price per Security to be paid by the several Underwriters
shall be $24.25 per Security.
SCHEDULE C
List of subsidiaries
Name Jurisdiction
---- ------------
AmerUs Life Insurance Company Iowa
AmerUs Annuity Group Co. Kansas
American Investors Life Insurance Company, Inc. Kansas
AmerUs Capital Management Group, Inc. Iowa
ILICO Holdings, Inc. Indiana
IL Annuity and Insurance Company Kansas
Indianapolis Life Insurance Company Indiana
Bankers Life Insurance Company of New York New York
American Investors Sales Group Kansas
Creative Marketing International Corporation Kansas
Senior Benefit Services of Kansas Kansas
Financial Benefit Life Insurance Company Kansas
Family First Insurance Services California
AmerUs Home Equity, Inc. Iowa
SCHEDULE D
List of persons and entities
subject to lock-up
John R. Albers
David A. Arledge
Roger K. Brooks
Alecia A. De Coudreaux
Thomas F. Gaffney
John W. Norris, Jr.
Andrew J. Paine, Jr.
Jack C. Pester
John A. Wing
F.A. Wittern, Jr.
Victor N. Daley
Thomas C. Godlasky
Mark V. Heitz
Gary R. McPhail
Melinda S. Urion
Brian J. Clark
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
Opinion of Skadden, Arps, Slate, Meagher & Flom
1. The Indenture is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
2. The Purchase Contract Agreement is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms.
3. The Pledge Agreement is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms.
4. The Remarketing Agreement is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms.
5. The execution and delivery by the Company of each of the Transaction
Documents and the consummation by the Company of the transactions
contemplated thereby, including the issuance and sale of the
Securities, will not (i) constitute a violation of, or a breach or
default under, the terms of any Applicable Contract or (ii) violate or
conflict with, or result in any contravention of, any Applicable Law.
We do not express any opinion, however, as to whether the execution,
delivery or performance by the Company of each of the Transaction
Documents will constitute a violation of, or a default under, any
covenant, restriction or provision with respect to financial ratios or
tests or any aspect of the financial condition or results of operations
of the Company or any of its subsidiaries.
6. No Governmental Approval, which has not been obtained or taken and is
not in full force and effect, is required to authorize, or is required
in connection with, the execution or delivery of each of the
Transaction Documents by the Company or the consummation by the Company
of the transactions contemplated thereby.
7. When issued and delivered by the Company against payment therefor in
accordance with the terms of the Purchase Agreement, the Securities
will constitute valid and binding obligations of the Company entitled
to the benefits of the Purchase Contract Agreement and enforceable
against the Company in accordance with their terms.
8. When issued and delivered by the Company against payment therefor in
accordance with the terms of the Purchase Agreement, the Notes will
constitute the valid and binding obligation of the Company entitled to
the benefits of the Indenture and enforceable against the Company in
accordance with their terms.
A-1
9. The form of certificate used to evidence the Shares complies in all
material respects with the applicable requirements of the New York
Stock Exchange.
10. The statements in the Base Prospectus under the caption "Description of
Debt Securities" and "Description of Capital Stock," to the extent it
describes the Common Stock, and in the Prospectus Supplement under the
captions "Description of PRIDES," "Description of Purchase Contracts,"
"Other Provisions of the Purchase Contract Agreement and the Pledge
Agreement" and "Specific Terms of the Senior Notes" other than
"Book-Entry System," insofar as such statements purport to summarize
certain provisions of the documents referred to therein, fairly
summarize such provisions in all material respects.
11. The Company is not and upon application of the proceeds as described
under the caption "Use of Proceeds" in the Prospectus and after giving
effect to the issuance of the Notes will not be, an "investment
company," as such term is defined in the Investment Company Act of
1940, as amended.
12. The statements set forth in the Prospectus Supplement under the caption
"Material Federal Income Tax Consequences" insofar as they purport to
constitute summaries of the provisions of the laws referred to therein,
fairly summarize the matters stated therein in all material respects.
13. The provisions of the Pledge Agreement are effective to create, in
favor of the Collateral Agent for the benefit of the Company to secure
the obligations of the holders under the Purchase Contract Agreement, a
valid security interest in the Purchase Contract Agent's rights in all
the Security Entitlements.
14. The provisions of the Pledge Agreement are effective to perfect the
security interest of the Collateral Agent for the benefit of the
Company in the Security Entitlements.
15. The Indenture has been qualified under the Trust Indenture Act and the
Registration Statement was declared effective under the Securities Act,
and we have been orally advised by the Commission that no stop order
suspending the effectiveness of the Registration Statement has been
issued and, to the best of our knowledge, no proceedings for that
purpose have been instituted or are pending or threatened by the
Commission.
Contained in separate Bankruptcy Opinion (in the form usually provided to
Merrill)
16. Subject to the facts, discussion and qualifications set forth in this
opinion, we are of the opinion that in a properly presented and argued
case, as a legal matter and based upon existing case law, upon the
occurrence of a Termination Event, section 365(e)(1) of the Code would
not substantively impair, limit, or restrict the provisions of the
Purchase Contract Agreement or the Pledge Agreement that require (i)
termination of the Purchase Contracts and (ii) release of the security
interest of the Collateral Agent in and to the Pledged Securities and
the transfer of the Pledged Securities to the Purchase Contract Agent
(for the benefit of the Holders). Certain procedural restrictions
requiring relief
A-2
from the automatic stay under section 362 of the Code, however, may
temporarily delay the timing of the exercise of such termination,
release and transfer.
Contained in separate Negative Assurances Opinion
We confirm to you that, on the basis of the information we gained in
the course of performing the services referred to above, (i) the Registration
Statement, at the time it became effective and as of the date of the Company's
2002 Annual Report on Form 10-K (the "Form 10-K") and as of May 21, 2003, and
the Prospectus, as supplemented by the Prospectus Supplement, as of the date of
the Prospectus Supplement, appeared on their face to be appropriately responsive
in all material respects to the requirements of the Securities Act and the
General Rules and Regulations under the Securities Act (except that in each case
we do not express any view as to the financial statements and schedules and
other financial data and financial projections included or incorporated by
reference therein or excluded therefrom or the exhibits to the Registration
Statement, including the Statement of Eligibility on Form T-1 (the "Form T-1"))
and (ii) no facts have come to our attention that have caused us to believe that
the Registration Statement, at the time it became effective and as of the date
of the filing of the Form 10-K and as of May 21, 2003, contained an untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein not misleading or
that the Prospectus, as of the date of the Prospectus Supplement and as of the
date hereof, contained or contains an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading (except that in each case we do not express any view as to the
financial statements and schedules and other financial data and financial
projections included or incorporated by reference therein or excluded therefrom
or the exhibits to the Registration Statement, including the Form T-1).
A-3
Exhibit B
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(c)
Opinion of Joseph Haggerty, General Counsel of the Company
(i) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Iowa.
(ii) The Company has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Prospectus and to
enter into and perform its obligations under the Purchase Agreement and the
other Operative Documents.
(iii) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(iv) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized, are fully paid and non-assessable and
conforming in all material respects to the description of the capital stock in
the Prospectus. Other than as described in the Prospectus, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a registration
statement under the 1933 Act to include any securities in the securities
registered pursuant to a registration statement filed by the Company under the
1933 Act, including the Registration Statement.
(v) Each Subsidiary has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate its
properties and to conduct its business as described in the Prospectus and is
duly qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would not
result in a Material Adverse Effect. Except as otherwise disclosed in the
Registration Statement, all of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity that materially interferes with the Company's ownership and
control of such Subsidiary. None of the outstanding shares of capital stock of
any Subsidiary was issued in violation of the preemptive or similar rights of
any securityholder of such Subsidiary.
(vi) Each Material Regulated Insurance Company possesses all state insurance
licenses required to be held by such Material regulated Insurance Company in
each jurisdiction in which it does business where the failure to be so licensed
would have a Material Adverse Effect. "Material Regulated Insurance Company"
means each subsidiary of the company that (a) is
B-1
authorized or admitted to carry on or transact insurance business in any
jurisdiction and is regulated by any Applicable Insurance Regulatory Authority
and (b) has a statutory surplus equal to or greater than $15 million.
"Applicable Insurance Regulatory Authority" means, with respect to any Material
Regulated Insurance Company, the insurance department or similar administrative
authority or agency located in (x) each state in which such Material Regulated
Insurance Company is domiciled or (y) to the extent asserting regulatory
jurisdiction over such Regulated Insurance Company, the insurance department,
authority or agency in each state in which such Material Regulated Insurance
Company is licensed.
(vii) The Shares to be issued and sold by the Company pursuant to the
settlement of the Purchase Contracts have been duly authorized and reserved for
issuance by the Company and, when issued by the Company in accordance with the
provisions of the Purchase Contract Agreement and the Purchase Contracts, will
be validly issued, fully paid and non-assessable; and the holders of outstanding
shares of capital stock of the Company are not entitled to preemptive or other
rights to subscribe for the Securities pursuant to the Company's articles of
incorporation or by law;
(viii) The issuance of the Securities is not subject to the preemptive or
other similar rights of any securityholder of the Company.
(ix) The Purchase Agreement and the other Operative Documents have been duly
authorized, executed and delivered by the Company.
(x) To the best of my knowledge and other than as set forth in the
Prospectus, there are no legal or governmental proceedings pending or threatened
against the Company or its Subsidiaries or of which any property of the Company
or any of its Subsidiaries is subject that are reasonably likely to have a
Material Adverse Effect.
(xi) Neither the Company nor any Subsidiary is in violation of its articles
of association or by-laws.
(xii) The execution, delivery and performance of the Purchase Agreement and
the other Operative Documents and the consummation of the transactions
contemplated in the Purchase Agreement and the other Operative Documents
(including the offering, issuance, sale or delivery of the Securities, the
Senior Notes and the Shares (upon settlement of the Purchase Contracts)) and
compliance by the Company with its obligations under the Purchase Agreement and
the other Operative Documents do not and will not, result in any violation of
(i) the provisions of the articles of association or by-laws of the Company or
any Subsidiary; (ii) any applicable law, statute, rule, regulation, judgment,
order, writ or decree, known to me, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any subsidiary or any of their respective properties, assets or
operations, other than, in the case of clause (ii) such violations that,
individually or in the aggregate, would not have a Material Adverse Effect.
In addition, such counsel shall state that:
"No fact has come to my attention that has caused me to believe that the
Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if
B-2
applicable), (except for financial statements and schedules and other financial
data included or incorporated by reference therein or omitted therefrom, as to
which I need make no statement), at the time such Registration Statement or any
such amendment became effective, contained an untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading or that the Prospectus
or any amendment or supplement thereto (except for financial statements and
schedules and other financial data included or incorporated by reference therein
or omitted therefrom, as to which I need make no statement), at the time the
Prospectus were issued, at the time any such amended or supplemented prospectus
was issued or at the Closing Time, included or includes an untrue statement of a
material fact or omitted or omits to state a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading."
In rendering such opinion, such counsel may rely as to matters of fact (but not
as to legal conclusions), to the extent he deems proper, on certificates of
responsible officers of the Company and public officials.
B-3
Exhibit C
FORM OF OPINION OF COUNSEL TO
PURCHASE CONTRACT AGENT
TO BE DELIVERED PURSUANT TO
SECTION 5(d)
Opinion of [Purchase Contract Agreement's counsel]
(i) _________________ is duly incorporated and is validly
existing as a national banking association with trust powers
under the laws of the United States with all necessary power
and authority to execute, deliver and perform its obligations
under the Purchase Contract Agreement, the Pledge Agreement
and the Remarketing Agreement;
(ii) The execution, delivery and performance by the
Purchase Contract Agent of the Purchase Contract Agreement,
the Pledge Agreement and the Remarketing Agreement, and the
authentication and delivery of the Securities have been duly
authorized by all necessary action on the part of the Purchase
Contract Agent. The Purchase Contract Agreement, the Pledge
Agreement and the Remarketing Agreement have been duly
executed and delivered by the Purchase Contract Agent, and
constitute the legal, valid and binding obligations of the
Purchase Contract Agent, enforceable against the Purchase
Contract Agent in accordance with their respective terms,
except (a) as such enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws
affecting creditors' rights and remedies generally and (b) as
such enforcement may be limited by general principles of
equity, regardless of whether enforcement is sought in a
proceeding at law or in equity.
(iii) The execution, delivery and performance of the
Purchase Contract Agreement, the Pledge Agreement and the
Remarketing Agreement by the Purchase Contract Agent does not
conflict with or constitute a breach of the charter or by-laws
of the Purchase Contract Agent; and
(iv) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any
New York state or federal court or other New York state or
federal governmental authority or agency is necessary or
required in connection with the due authorization, execution
and delivery of the Purchase Agreement and the other Operative
Documents and the consummation of the transactions
contemplated by the Purchase Contract Agreement, the Pledge
Agreement and the Remarketing Agreement and compliance by the
Company and its obligations under such agreements.
C-1
FORM OF LOCK-UP FROM DIRECTORS, OFFICERS OR OTHER STOCKHOLDERS PURSUANT TO
SECTION 5(K)
Exhibit D
May __, 2003
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
Goldman, Sachs & Co.
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
c/o MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
4 World Financial Center
New York, New York 10080
Re: Proposed Public Offering by AmerUs Group Co.
Dear Sirs:
The undersigned, a stockholder and an officer and/or director of AmerUs
Group Co., an Iowa corporation (the "Company"), understands that Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") and
Goldman Sachs & Co. propose to enter into a Purchase Agreement (the "Purchase
Agreement") with the Company providing for the public offering of 5,000,000
PRIDES (initially consisting of 5,000,000 Income PRIDES)(the "Securities"). In
recognition of the benefit that such an offering will confer upon the
undersigned as a stockholder and an officer and/or director of the Company, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the undersigned agrees with each underwriter to be
named in the Purchase Agreement that, during a period of 90 days from the date
of the Purchase Agreement, the undersigned will not, without the prior written
consent of Merrill Lynch, directly or indirectly, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant for the sale of, or
otherwise dispose of or transfer any Securities, Purchase Contracts or shares of
the Company's Common Stock or any securities convertible into or exchangeable or
exercisable for Common Stock, whether now owned or hereafter acquired by the
undersigned or with respect to which the undersigned has or hereafter acquires
the power of disposition, or file, or cause to be filed, any registration
statement under the Securities Act of 1933, as amended, with respect to any of
the foregoing (collectively, the "Lockup Securities") or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence of ownership of the
Lockup Securities or any securities convertible into or exchangeable for any
Lockup Security, whether any such swap or transaction is to be settled by
delivery of any Common Stock or other securities, in cash or otherwise.
D-1
Very truly yours,
Signature:
Print Name:
D-2