EX 1.2
$200,000,000 AGGREGATE PRINCIPAL AMOUNT
REINSURANCE GROUP OF AMERICA, INCORPORATED
6 3/4% SENIOR NOTES DUE 2011
UNDERWRITING AGREEMENT
December 12, 2001
BANC OF AMERICA SECURITIES LLC
LEHMAN BROTHERS INC.
As Lead Underwriters for the several
Underwriters named herein
c/o Banc of America Securities LLC
9 West 57th Street -- Floor 40
New York, New York 10019
c/o Lehman Brothers Inc.
101 Hudson Street
Jersey City, New Jersey 07302
Ladies and Gentlemen:
Reinsurance Group of America, Incorporated, a Missouri corporation (the
"COMPANY"), proposes, subject to the terms and conditions stated herein, to
issue and to sell $200,000,000 aggregate principal amount of its 6 3/4% Senior
Notes due 2011 (the "SECURITIES") to Lehman Brothers Inc. and Banc of America
Securities LLC (the "LEAD UNDERWRITERS") and the other underwriters named in
Schedule 1 hereto (collectively, the "UNDERWRITERS"). The Securities will be
issued pursuant to an Indenture dated as of December 19, 2001, (the "ORIGINAL
INDENTURE") as supplemented by the First Supplemental Indenture, dated as of
December 19, 2001 (the "SUPPLEMENTAL INDENTURE" and, together with the Original
Indenture, as so supplemented, the "INDENTURE"), in each case, to be entered
into between the Company and The Bank of New York, as trustee ( the "TRUSTEE").
This Agreement and the Indenture are referred to herein collectively as the
"TRANSACTION AGREEMENTS". This is to confirm the agreement among the Company and
the Underwriters concerning the offer, issuance and sale of the Securities.
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants and agrees with the Underwriters that:
(a) Registration statements on Form S-3 (File No.'s 333-74104,
333-74104-01 and 333-74104-02), which also constitute Post-Effective
Amendment No. 2 to Registration Statement No.'s 333-55304, 333-55304-01 and
333-55304-02) setting forth
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information with respect to the Company and the Securities have (i) been
prepared by the Company in conformity in all material respects with the
requirements of the Securities Act of 1933, as amended, and the rules and
regulations of the Securities and Exchange Commission (the "COMMISSION")
thereunder (collectively, the "SECURITIES Act"), (ii) been filed with the
Commission under the Securities Act and (iii) become effective under the
Securities Act. Copies of such Registration Statements and all exhibits
thereto have been delivered by the Company to you. As used in this
Agreement, "EFFECTIVE TIME" means the date and the time as of which the
Registration Statements (collectively, the "REGISTRATION STATEMENT") on
Form S-3 (File No.'s 333-74104, 333-74104-01, 333-74104-02, 333-55304,
333-55304-01 and 333-55304-02), or the most recent post-effective amendment
thereto, if any, was, declared effective by the Commission; "EFFECTIVE
DATE" means the date of the Effective Time; "PRELIMINARY PROSPECTUS" means
each prospectus included in such Registration Statement, or amendments
thereof, before it became effective under the Securities Act and any
prospectus and prospectus supplement filed with the Commission by the
Company with the consent of the Lead Underwriters pursuant to Rule 424(a)
of the Securities Act relating to the Securities; the term "REGISTRATION
STATEMENT" includes such Registration Statements, as amended as of the
Effective Time, including the Incorporated Documents and all information
contained in the final prospectus relating to the Securities filed with the
Commission pursuant to Rule 424(b) of the Securities Act and deemed to be a
part of such registration statement as of the Effective Time pursuant to
Rule 430A of the Securities Act; and "PROSPECTUS" means the prospectus and
prospectus supplement relating to the Securities in the form first used to
confirm sales of Securities. Reference made herein to any Preliminary
Prospectus or to the Prospectus shall be deemed to refer to and include any
Incorporated Documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the Securities Act, as of the date of such Preliminary
Prospectus or the Prospectus, as the case may be and any reference to any
amendment or supplement to any Preliminary Prospectus or the Prospectus
shall be deemed to refer to and include any document filed under the
Securities Exchange Act of 1934, as amended and the rules and regulations
of the Commission thereunder (the "EXCHANGE ACT") after the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and
incorporated by reference in such Preliminary Prospectus or the Prospectus,
as the case may be; and any reference to any amendment to the Registration
Statement shall be deemed to include any annual report of the Company filed
with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act
after the Effective Time that is incorporated by reference in the
Registration Statement. The Commission has not issued any order preventing
or suspending the use of any Preliminary Prospectus or the Registration
Statement.
(b) The conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied or waived.
(c) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all material respects to the
requirements of the Securities Act; the Registration Statement
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and any amendment thereto does not and will not, as of the applicable
Effective Date, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading; and the Prospectus does not and will
not, as of the date hereof and any applicable Delivery Date (as defined
below), 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; provided that, the Company makes no representation or
warranty as to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with written
information furnished to the Company by the Underwriters specifically for
inclusion therein as provided in Section 8(e).
(d) The documents incorporated by reference in the Prospectus (the
"INCORPORATED DOCUMENTS"), when they were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of the
Securities Act and the Exchange Act, as applicable; and none of the
Incorporated Documents, when such documents were filed with the Commission,
contained any 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, in light of the circumstances under which they were
made, not misleading; and any further documents so filed and incorporated
by reference in the Prospectus, when such documents are filed with
Commission will conform in all material respects to the requirements of the
Exchange Act and will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances in
which they were made, not misleading.
(e) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, shareholders,
customers or suppliers of the Company on the other hand, which is required
to be described in the Prospectus which is not so described.
(f) There are no contracts, agreements or other documents which are
required to be described in the Prospectus or filed as exhibits to the
Registration Statement or the Incorporated Documents by the Securities Act
or the Exchange Act, as the case may be, which have not been described in
the Prospectus or filed as exhibits to the Registration Statement or the
Incorporated Documents.
(g) Except as set forth in or contemplated by the Prospectus, neither
the Company nor any of its subsidiaries has sustained, since the date of
the latest audited financial statements included or incorporated by
reference in the Prospectus, any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court or governmental
action, order or decree (a "MATERIAL LOSS"); since such date, there has not
been any material adverse change in the capital stock, short-term debt or
long-term debt of the Company or any of its subsidiaries or any material
adverse change, or any development
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involving a prospective material adverse change, in or affecting the
general affairs, management, consolidated financial position, shareholders'
equity, results of operations, business or prospects of the Company and its
subsidiaries (a "MATERIAL ADVERSE CHANGE"); and subsequent to the
respective dates as of which information is given in the Prospectus and up
to the applicable Delivery Date, except as set forth in the Prospectus, (i)
neither the Company nor any of its subsidiaries has incurred any
liabilities or obligations outside the ordinary course of business, direct
or contingent, which are material to the Company and its subsidiaries taken
as a whole, nor entered into any material transaction not in the ordinary
course of business and (ii) there have not been dividends or distributions
of any kind declared, paid or made by Company on any class of its capital
stock, except for regularly scheduled dividends.
(h) Each of the Company and each of Reinsurance Company of Missouri,
Incorporated, RGA Reinsurance Company, RGA Reinsurance Company (Barbados)
Ltd. and RGA Life Reinsurance Company of Canada Limited (the "SIGNIFICANT
SUBSIDIARIES"), which are the Company's only "significant subsidiaries" (as
defined under Rule 405 of the Securities Act), has been duly organized, is
validly existing as a corporation in good standing under the laws of its
respective jurisdiction of incorporation, has all requisite corporate power
and authority to carry on its business as it is currently being conducted
and in all material respects as described in the Prospectus and to own,
lease and operate its properties, and is duly qualified and in good
standing as a foreign corporation authorized to do business in each
jurisdiction in which the nature of its business or its ownership or
leasing of property requires such qualification, except where the failure
to so register or qualify would not, reasonably be expected, singly or in
the aggregate, to result in a material adverse effect on the properties,
business, results of operations, conditions (financial or otherwise),
affairs or prospects of the Company and its subsidiaries, taken as a whole
(a "MATERIAL ADVERSE EFFECT").
(i) The entities listed on Schedule 2 hereto are the only
subsidiaries, direct or indirect, of the Company. The Company owns,
directly or indirectly through other subsidiaries, the percentage indicated
on Schedule 2 of the outstanding capital stock or other securities
evidencing equity ownership of such subsidiaries, free and clear of any
security interest, claim, lien, limitation on voting rights or encumbrance;
and all of such securities have been duly authorized, validly issued, are
fully paid and nonassessable and were not issued in violation of any
preemptive or similar rights. There are no outstanding subscriptions,
preemptive or other rights, warrants, calls, commitments of sale or options
to acquire, or instruments convertible into or exchangeable for, any such
shares of capital stock or other equity interest of such subsidiaries.
(j) Neither the Company nor any of its subsidiaries is (i) in
violation of its respective charter or bylaws, (ii) is in default in the
performance of any bond, debenture, note, indenture, mortgage, deed of
trust or other agreement or instrument to which it is a party or by which
it is bound or to which any of its properties is subject, or (iii) is in
violation of any law, statute, rule, regulation, judgment or court decree
applicable to the Company, any of its subsidiaries or their assets or
properties, except in the case of clauses
5
(ii) and (iii) for any such violation or default which does not or would
not reasonably be expected to have a Material Adverse Effect.
(k) The catastrophic coverage arrangements described in the Prospectus
are in full force and effect as of the date hereof and all other
retrocessional treaties and arrangements to which the Company or any of its
Significant Subsidiaries is a party and which have not terminated or
expired by their terms are in full force and effect, and none of the
Company or any of its Significant Subsidiaries is in violation of or in
default in the performance, observance or fulfillment of, any obligation,
agreement, covenant or condition contained therein, except to the extent
that any such violation or default would not reasonably be expected to have
a Material Adverse Effect; neither the Company nor any of its Significant
Subsidiaries has received any notice from any of the other parties to such
treaties, contracts or agreements that such other party intends not to
perform such treaty, contract or agreement that would reasonably be
expected to have a Material Adverse Effect and, to the best knowledge of
the Company, the Company has no reason to believe that any of the other
parties to such treaties or arrangements will be unable to perform such
treaty or arrangement in any respect that would reasonably be expected to
have a Material Adverse Effect.
(l) The execution, delivery and performance by the Company of the
Transaction Agreements, the issuance and sale of the Securities and the
consummation of the transactions contemplated hereby and thereby will not
violate or constitute a breach of any of the terms or provisions of, or a
default under (or an event that with notice or the lapse of time, or both,
would constitute a default), or require consent under, or result in the
imposition of a lien or encumbrance on any properties of the Company or any
of its subsidiaries, or an acceleration of indebtedness pursuant to, (i)
the charter or bylaws of the Company or any of its subsidiaries, (ii) any
bond, debenture, note, indenture, mortgage, deed of trust or other
agreement or instrument to which the Company or any of its subsidiaries is
a party or by which any of them or their property is or may be bound, (iii)
any statute, rule or regulation applicable to the Company, any of its
subsidiaries or any of their assets or properties, or (iv) any judgment,
order or decree of any court or governmental agency or authority having
jurisdiction over the Company, any of its subsidiaries or their assets or
properties, other than, in the case of clauses (ii) through (iv), any
violation, breach, default, consent, imposition or acceleration that would
not reasonably be expected to have a Material Adverse Effect and except for
such consents or waivers as may have been obtained by the Company or such
consents or filings as may be required under the state or foreign
securities or Blue Sky laws and regulations or as may be required by the
National Association of Securities Dealers, Inc. (the "NASD"). No consent,
approval, authorization or order of, or filing, registration,
qualification, license or permit of or with, any court or governmental
agency, body or administrative agency is required for the execution,
delivery and performance by the Company of the Transaction Agreements, the
issuance and sale of the Securities and the consummation of the
transactions contemplated hereby and thereby, except such as (i) would not
reasonably be expected to have a Material Adverse Effect, (ii) would not
prohibit or adversely affect the issuance of any of the Securities and
(iii) have been obtained and made under the
6
Securities Act, state or foreign securities or Blue Sky laws and
regulations or such as may be required by the NASD. No consents or waivers
from any other person are required for the execution, delivery and
performance by the Company of any of the Transaction Agreements, the
issuance and sale of the Securities and the consummation of the
transactions contemplated hereby and thereby, other than such consents and
waivers as (i) would not reasonably be expected to have a Material Adverse
Effect, (ii) would not prohibit or adversely affect the issuance of any of
the Securities and (iii) have been obtained.
(m) Except as set forth in or contemplated by the Prospectus, there is
(i) no action, suit or proceeding before or by any court, arbitrator or
governmental agency, body or official, domestic or foreign, now pending or
threatened or contemplated to which the Company or any of its subsidiaries
is or may be a party or to which the business or property of the Company or
any of its subsidiaries is or may be subject, (ii) no statute, rule,
regulation or order that has been enacted, adopted or issued by any
governmental agency or that has been proposed by any governmental body and
(iii) no injunction, restraining order or order of any nature by a federal
or state court or foreign court of competent jurisdiction to which the
Company or any of its subsidiaries is or may be subject issued that, in the
case of clauses (i), (ii) and (iii) above, (x) would, singly or in the
aggregate, reasonably be expected to result in a Material Adverse Effect,
(y) would interfere with or adversely affect the issuance of any of the
Securities or (z) in any manner draw into question the validity of any of
the Transaction Agreements or any of the Securities.
(n) None of the employees of the Company and its subsidiaries is
represented by a union and, to the best knowledge of the Company and its
subsidiaries, no union organizing activities are taking place. Neither the
Company nor any of its subsidiaries has violated any federal, state or
local law or foreign law relating to discrimination in hiring, promotion or
pay of employees, nor any applicable wage or hour laws, nor any provision
of the Employee Retirement Income Security Act of 1974, as amended, and the
rules and regulations thereunder (collectively, "ERISA"), or analogous
foreign laws and regulations, which would reasonably be expected to result
in a Material Adverse Effect.
(o) Each of the Company and its subsidiaries has (i) good and, in the
case of real property, merchantable title to all of the properties and
assets described in the Prospectus as owned by it, free and clear of all
liens, charges, encumbrances and restrictions, except such as are described
in the Prospectus, or as would not reasonably be expected to have a
Material Adverse Effect, (ii) peaceful and undisturbed possession under all
leases to which it is party as lessee, (iii) all material licenses,
certificates, permits, authorizations, approvals, franchises and other
rights from, and has made all declarations and filings with, all federal,
state and local governmental authorities (including, without limitation,
from the insurance regulatory agencies of the various jurisdictions where
it conducts business) and all courts and other governmental tribunals
(each, an "AUTHORIZATION") necessary to engage in the business currently
conducted by it in the manner described in the Prospectus, except where
failure to hold such
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Authorizations would not reasonably be expected to have a Material Adverse
Effect, (iv) have fulfilled and performed all obligations necessary to
maintain each authorization and (v) no knowledge of any threatened action,
suit or proceeding or investigation that would reasonably be expected to
result in the revocation, termination or suspension of any Authorization,
the revocation, termination or suspension of which would reasonably be
expected to have a Material Adverse Effect. Except as would not reasonably
be expected to have a Material Adverse Effect, all such Authorizations are
valid and in full force and effect and the Company and its subsidiaries are
in compliance in all material respects with the terms and conditions of all
such Authorizations and with the rules and regulations of the regulatory
authorities having jurisdiction with respect thereto. No insurance
regulatory agency or body has issued any order or decree impairing,
restricting or prohibiting the payment of dividends by any subsidiary of
the Company to its parent, other than any such orders or decrees the
issuance of which could not reasonably be expected to have a Material
Adverse Effect. Except as would not have a Material Adverse Effect, all
leases to which the Company or any of its subsidiaries is a party are valid
and binding and no default by the Company or any of its subsidiaries has
occurred and is continuing thereunder, and, to the Company's knowledge, no
material defaults by the landlord are existing under any such lease.
(p) All tax returns required to be filed by the Company or any of its
subsidiaries, in all jurisdictions, have been so filed. All taxes,
including withholding taxes, penalties and interest, assessments, fees and
other charges due or claimed to be due from such entities or that are due
and payable have been paid, other than those being contested in good faith
and for which adequate reserves have been provided or those currently
payable without penalty or interest. The Company does not know of any
material proposed additional tax assessments against it or any of its
subsidiaries.
(q) Neither the Company nor any of its subsidiaries is, or after the
application of the net proceeds from the sale of the Securities and the
sale of $250 million of Trust Premium Income Equity Redeemable Securities
Units of the Company and RGA Capital Trust I (the "UNITS") will be, an
"investment company" as defined, and subject to regulation, under the
Investment Company Act of 1940, as amended, and the rules and regulations
of the Commission thereunder (collectively, the "INVESTMENT COMPANY ACT"),
or analogous foreign laws and regulations.
(r) The authorized, issued and outstanding capital stock of the
Company has been validly authorized and issued, is fully paid and
nonassessable and was not issued in violation of or subject to any
preemptive or similar rights; and such authorized capital stock conforms in
all material respects to the description thereof set forth in the
Prospectus. The Company had at September 30, 2001, an authorized and
outstanding capitalization as set forth in the Prospectus and, except with
respect to the Units or otherwise as expressly set forth in the Prospectus,
there are no outstanding preemptive or other rights, warrants or options to
acquire, or instruments convertible into or exchangeable for, any shares of
capital stock or other equity interest in the Company or any of its
subsidiaries, or any contract, commitment, agreement, understanding or
8
arrangement of any kind relating to the issuance of any capital stock of
the Company or any such subsidiary, any such convertible or exchangeable
securities or any such rights, warrants or options. There has been no
change in the authorized or outstanding capitalization of the Company since
the date indicated in the Prospectus, except with respect to (i) changes
occurring in the ordinary course of business and (ii) changes in
outstanding Common Stock and options or rights to acquire Common Stock
resulting from transactions relating to the Company's employee benefit,
dividend reinvestment or stock purchase plans.
(s) The Company and each of its subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable assurance
that: (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain accountability for assets;
(iii) access to assets is permitted only in accordance with management's
general or specific authorization; and (iv) the recorded accountability for
assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto.
(t) The Company and each of its subsidiaries maintains insurance
covering their properties, personnel and business. Such insurance insures
against such losses and risks as are adequate in accordance with the
Company's perception of customary industry practice to protect the Company
and its subsidiaries and their businesses. Neither the Company nor any of
its subsidiaries have received notice from any insurer or agent of such
insurer that substantial capital improvements or other expenditures will
have to be made in order to continue such insurance. All such insurance is
outstanding and duly in force on the date hereof and will be outstanding
and duly in force on the applicable Delivery Date.
(u) Neither the Company nor any agent thereof acting on the behalf of
the Company has taken, and none of them will take, any action that might
cause the execution, delivery and performance by the Company of the
Transaction Agreements, the issuance and sale of the Securities and the
consummation of the transactions contemplated hereby and thereby to violate
Regulation G (12 C.F.R. Part 207), Regulation T (12 C.F.R. Part 220),
Regulation U (12 C.F.R. Part 221) or Regulation X (12 C.F.R. Part 224) of
the Board of Governors of the Federal Reserve System.
(v) Deloitte & Touche LLP ("DELOITTE & TOUCHE") and KPMG Peat Marwick
LLP ("KPMG") who have certified the financial statements and supporting
schedules included or incorporated by reference in the Prospectus are
independent accountants as required by the Securities Act. The consolidated
historical statements together with the related schedules and notes fairly
present, in all material respects, the consolidated financial condition and
results of operations of the Company and its subsidiaries at the respective
dates and for the respective periods indicated, in accordance with
generally accepted accounting principles consistently applied throughout
such periods, except as
9
stated therein. Other financial and statistical information and data
included or incorporated by reference in the Prospectus, historical and pro
forma, are, in all material respects, accurately presented and prepared on
a basis consistent with such financial statements, except as may otherwise
be indicated therein, and the books and records of the Company and its
subsidiaries.
(w) The 2000 statutory annual statements of each of RGA Reinsurance
Company, a Missouri insurance corporation, Reinsurance Company of Missouri
Incorporated and RGA Life Reinsurance Company of Canada (together, the
"INSURANCE SUBSIDIARIES") and the statutory balance sheets and income
statements included in such statutory annual statements together with
related schedules and notes, have been prepared, in all material respects,
in conformity with statutory accounting principles or practices required or
permitted by the appropriate Insurance Department of the jurisdiction of
domicile of each such subsidiary, and such statutory accounting practices
have been applied on a consistent basis throughout the periods involved,
except as may otherwise be indicated therein or in the notes thereto, and
present fairly, in all material respects, the statutory financial position
of the Insurance Subsidiaries as of the dates thereof, and the statutory
basis results of operations of the Subsidiaries for the periods covered
thereby.
(x) The Company and the Insurance Subsidiaries have made no material
changes in their insurance reserving practices since December 31, 2000,
except where such change in such insurance reserving practices would not
reasonably be expected to have a Material Adverse Effect.
(y) The Company is not aware of any threatened or pending downgrading
of RGA Reinsurance Company's "A+" or any other Significant Subsidiaries'
claims-paying ability rating from A.M. Best Company, Inc. or financial
strength rating of "AA" and "A1" from Standard & Poor's Rating Services,
Inc. and Moody's Investor Services, respectively.
(z) Except as described in the Prospectus, with respect to MetLife (as
defined below) and General American Life Insurance Company ("GENERAL
AMERICAN"), there are no contracts, agreements or understandings between
the Company, any of the subsidiaries of the Company and any person granting
such person the right to require the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company owned or to be owned by such person and MetLife and General
American have executed agreements waiving their rights to require
registration of any securities of the Company held by MetLife as a result
of the transaction contemplated hereby.
(aa) The Company has all necessary corporate power and authority to
execute and deliver this Agreement and to perform its obligations
hereunder; this Agreement has been duly authorized, executed and delivered
by the Company and assuming due authorization, execution and delivery by
the Underwriters, it will be a legally valid and binding agreement of the
Company, enforceable against the Company in accordance with
10
its terms, except (i) as such enforcement may be limited by bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent transfer
or similar laws now or hereinafter in effect relating to or affecting
creditors' rights generally and by general principles of equity, including,
without limitation, concepts of reasonableness, materiality, good faith and
fair dealing, (ii) that the remedies of specific performance and injunctive
and other forms of equitable relief are subject to general equitable
principles, whether such enforcement is sought at law or in equity, (iii)
that such enforcement may be subject to the discretion of the court before
which any proceedings therefore may be brought and (iv) except with respect
to the rights of indemnification and contribution hereunder, where
enforcement hereof may be limited by federal or state securities laws or
the policies underlying such laws.
(bb) The Company has all necessary corporate power and authority to
execute and deliver the Indenture and to perform its obligations
thereunder; the Indenture has been duly authorized by the Company, is
qualified under the Trust Indenture Act and conforms in all material
respects to the requirements of the Trust Indenture Act; when the Indenture
is duly executed and delivered by the Company, assuming due authorization,
execution and delivery of the Indenture by the Trustee, it will constitute
a legally valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms, except (i) as such enforcement
may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium, fraudulent transfer or similar laws now or hereinafter in
effect relating to or affecting creditors' rights generally and by general
principles of equity, including, without limitation, concepts of
reasonableness, materiality, good faith and fair dealing, (ii) that the
remedies of specific performance and injunctive and other forms of
equitable relief are subject to general equitable principles, whether such
enforcement is sought at law or in equity, and (iii) that such enforcement
may be subject to the discretion of the court before which any proceedings
therefore may be brought. The Indenture will conform, when executed and
delivered, in all material respects to the description thereof contained in
the Prospectus.
(cc) The Securities have been duly authorized by the Company and when
the Securities are executed, authenticated and issued in accordance with
the terms of the Indenture and delivered to and paid for by the
Underwriters pursuant to this Agreement, assuming due authentication of the
Securities by the Trustee, such Securities will constitute legally valid
and binding obligations of the Company, entitled to the benefits of the
Indenture, enforceable against the Company in accordance with their terms,
except (i) as such enforcement may be limited by bankruptcy, insolvency,
reorganization, receivership, moratorium, fraudulent transfer or similar
laws now or hereinafter in effect relating to or affecting creditors'
rights generally and by general principles of equity, including, without
limitation, concepts of reasonableness, materiality, good faith and fair
dealing, (ii) that the remedies of specific performance and injunctive and
other forms of equitable relief are subject to general equitable
principles, whether such enforcement is sought at law or in equity, and
(iii) that such enforcement may be subject to the discretion of the court
before which any proceedings therefore may be brought. The Securities will
11
conform, when issued, in all material respects to the description thereof
contained in the Prospectus.
(dd) Neither the Company, nor to its knowledge, any of its Affiliates
(as defined in Regulation C of the Securities Act, an "AFFILIATE"), has
taken, directly or indirectly, any action designed to cause or result in,
or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the
Securities to facilitate the sale or resale of such securities.
(ee) No event has occurred nor has any circumstance arisen which, had
the Securities been issued on the date hereof, would constitute a default
or an event of default under the Indenture as summarized in the Prospectus.
(ff) Each certificate signed by any officer of the Company and
delivered to the Underwriters or counsel for the Underwriters shall be
deemed to be a representation and warranty by the Company to the
Underwriters as to the matters covered thereby.
2. Purchase of the Securities by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell to the several
Underwriters and each of the Underwriters, severally and not jointly, agrees to
purchase from the Company the aggregate principal amount of Securities set forth
opposite that Underwriter's name in Schedule 1 hereto. The price of the
Securities shall be 99.272% of the principal amount thereof. The Company shall
not be obligated to deliver any of the Securities to be delivered on the
Delivery Date, except upon payment for all the Securities to be purchased on the
Delivery Date as provided herein.
3. Offering of Securities by the Underwriters. The several
Underwriters propose to offer the Securities for sale upon the terms and
conditions set forth in the Prospectus.
4. Delivery of and Payment for the Securities. Delivery of and payment
for the Securities shall be made at the office of Simpson Thacher & Bartlett,
425 Lexington Avenue, New York, New York 10017, at 10:00 a.m. (New York City
time) on the fifth full business day following the date of this Agreement, or at
such other date or place as shall be determined by agreement between the
Underwriters and the Company (such date and time of delivery of payment for the
Securities, the "DELIVERY DATE." On the Delivery Date, the Company shall deliver
or cause to be delivered certificates representing the Securities to the
Underwriters for the account of each Underwriter against payment to or upon the
order of the Company of the purchase price by wire transfer in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, the Securities shall be
registered in such names and in such denominations as the Lead Underwriters
shall request in writing not less than two full business days prior to the
Delivery Date.
The Company will deliver, against payment of the purchase price, the
Securities in the form of one or more permanent global certificates (the "GLOBAL
SECURITIES"), registered in the name of Cede & Co., as nominee for The
Depository Trust Company ("DTC"). The Global
12
Securities will be made available, at the request of the Underwriters, for
checking at least 24 hours prior to the Delivery Date.
5. Further Agreements of the Company. The Company agrees:
(a) To prepare the Prospectus in a form approved by the Lead
Underwriters which approval shall not be unreasonably withheld or delayed,
and to file such Prospectus pursuant to Rule 424(b) under the Securities
Act not later than Commission's close of business on the second business
day following the execution and delivery of this Agreement or, if
applicable, such earlier time as may be required by Rule 430A(a)(3) under
the Securities Act; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus prior to any Delivery Date
except as permitted herein; to advise the Underwriters, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed and to furnish the
Underwriters with copies thereof; to file promptly all reports and any
definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d)
of the Exchange Act subsequent to the date of the Prospectus and for so
long as the delivery of a prospectus is required in connection with the
offering or sale of the Securities; to advise the Underwriters, promptly
after it receives notice thereof, of the issuance by the Commission of any
stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such purpose, or
of any request by the Commission for the amending or supplementing of the
Registration Statement or the Prospectus or for additional information;
and, in the event of the issuance of any stop order or of any order
preventing or suspending the use of any Preliminary Prospectus or the
Prospectus or suspending any such qualification, to use promptly its
reasonable best efforts to obtain its withdrawal;
(b) To furnish promptly to the Underwriters and to counsel for the
Underwriters a signed or facsimile signed copy of the Registration
Statement as originally filed with the Commission, and each amendment
thereto filed with the Commission, including all consents and exhibits
filed therewith;
(c) To deliver promptly to the Underwriters such number of the
following documents as the Underwriters shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits) and
(ii) each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus, and, if the delivery of a prospectus is required
at any time after the Effective Time in connection with the offering or
sale of the Securities or any other securities relating thereto and if at
such time any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the
13
circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary to amend
or supplement the Prospectus in order to comply with the Securities Act, to
notify the Underwriters and, upon their request, to prepare and furnish
without charge to the Underwriters and to any dealer in securities as many
copies as the Underwriters may from time to time reasonably request of an
amended or supplemented Prospectus which will correct such statement or
omission or effect such compliance;
(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the reasonable judgment of the Company or the Lead
Underwriters, be required by the Securities Act or is requested by the
Commission;
(e) For so long as the delivery of a prospectus is required in
connection with the initial offering or sale of the Securities, prior to
filing with the Commission any amendment to the Registration Statement or
supplement to the Prospectus or any Prospectus and any document
incorporated by reference in the Prospectus pursuant to Rule 424 of the
Securities Act, to furnish a copy thereof to the Underwriters and counsel
for the Underwriters and obtain the consent of the Lead Underwriters. to
the filing;
(f) As soon as practicable after the Effective Date, to make generally
available to the Company's security holders and to deliver to the
Underwriters an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Securities
Act (including, at the option of the Company, Rule 158 of the Securities
Act);
(g) Promptly from time to time, to take such action as the Lead
Underwriters may reasonably request to qualify the Securities for offering
and sale under the securities laws of such jurisdictions in the United
States and Canada as the Lead Underwriters may request and in such other
jurisdictions as the Company and the Lead Underwriters may mutually agree,
and to comply with such laws so as to permit the continuance of sales and
dealings therein in such jurisdictions for as long as may be necessary to
complete the distribution of the Securities; provided that, in connection
therewith, the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction;
(h) Not to take, directly or indirectly, any action which is designed
to stabilize or manipulate, or which constitutes or which might reasonably
be expected to cause or result in stabilization or manipulation, of the
price of any security of the Company in connection with the initial
offering of the Securities (except after consultation with the Underwriters
and as may be permitted by under federal securities laws);
(i) To use its best efforts to cause the Securities to be accepted for
clearance and settlement through the facilities of DTC;
14
(j) To execute and deliver the Indenture in form and substance
reasonably satisfactory to the Lead Underwriters;
(k) To apply the net proceeds from the issuance of the Securities and
the contemplated sale of the Units as set forth under "Use of Proceeds" in
the Prospectus;
(l) To take such steps as shall be necessary to ensure that the
Company or any of its subsidiaries shall not become an "investment company"
as defined, and subject to regulation, under the Investment Company Act;
(m) For a period of 60 days after the date of the Prospectus not to
(i) offer, pledge, announce the intention to sell, 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, directly or indirectly, any debt securities of the Company
with a maturity of three years or longer or any other securities that are
substantially similar to the Securities or any securities convertible into
or exercisable or exchangeable for such debt securities of the Company (ii)
enter into any swap or other agreement that transfers, in whole or in part,
any of the economic consequences of ownership of any of the Securities or
such other securities, whether any such transaction described in clause (i)
or (ii) above is to be settled by delivery of such debt securities of the
Company or such other securities, in cash or otherwise without the prior
written consent of the Lead Underwriters, which shall not be unreasonably
withheld or delayed, except that the foregoing restrictions shall not apply
to (i) the issuance of the Securities to be sold hereunder and (ii) the
issuance of the 5.75% Junior Subordinated Deferrable Interest Debentures
due 2051 in connection with the issuance of the Units.
6. Expenses. Whether or not the transactions contemplated by this
Agreement are consummated or this Agreement becomes effective or is terminated,
the Company agrees to pay: (a) the costs incident to the issuance, sale and
delivery of the Securities; (b) the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto any Preliminary Prospectus and any Prospectus or
any amendment or supplement thereto; (c) the costs of distributing the
Registration Statement as originally filed and each amendment thereto and any
post-effective amendments thereof (including, in each case, exhibits), any
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus, in each case, as provided in this Agreement; (d) the costs of
distributing the terms of any agreement relating to the organization of the
underwriting syndicate and selling group to the members thereof, by mail, telex
or other reasonable means of communication; (e) the costs, if any, of producing
and distributing the Transaction Agreements; (f) the fees and expenses of
qualifying the Securities under the securities laws of the several jurisdictions
in the United States and Canada as provided in Section 5(g) and of preparing,
photocopying and distributing U.S. and, if applicable, Canadian Blue Sky
memoranda (including reasonable related fees and expenses of counsel to the
Underwriters in connection therewith); (g) the expenses of the Company and the
Underwriters in connection with the marketing and offering of the Securities,
including, if applicable, all reasonable costs and expenses incident to the
preparation of "road show" presentation or comparable marketing materials and
the road
15
show traveling expenses of the Company in connection with the offering of the
Securities; (h) all fees and expenses incurred in connection with any rating of
the Securities; (i) the fees and expenses of the Company's counsel and
independent accountants and the fees and expenses (including fees and
disbursements of counsel, if applicable) of the Company, the Trustee and the
costs and charges of any registrar and paying agent under the Indenture; and (j)
all other costs and expenses incident to the performance of the obligations of
the Company under this Agreement; provided, however, that, except as provided in
this Section 6 and in Section 11, the Underwriters shall pay their own costs and
expenses, including the costs and expenses of their counsel.
7. Conditions of the Underwriters' Obligations. The several
obligations of the Underwriters hereunder are subject to the accuracy, when made
and on the Delivery Date, of the representations and warranties of the Company
contained herein, to the performance by the Company of its obligations
hereunder, and to the satisfaction of each of the following additional
conditions and agreements:
(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 5(a) of this Agreement; no stop order suspending
the effectiveness of the Registration Statement or any part thereof shall
have been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus or otherwise shall have been complied with in
all material respects.
(b) No Underwriter shall have discovered and disclosed to the Company
on or prior to any Delivery Date, that, in the opinion of Simpson Thacher &
Bartlett, counsel to the Underwriters, the Registration Statement or any
amendment thereto, contained, as of the Effective Date, 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 or that
the Prospectus or any supplement thereto, contains and will contain, as of
the date hereof and the Delivery Date, an untrue statement of a material 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.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of the Registration Statement, the
Preliminary Prospectus, the Prospectus, the Transaction Agreements and the
Securities, and all other legal matters relating to the offering, issuance
and sale of the Securities and the transactions contemplated hereby and
thereby shall be reasonably satisfactory in all material respects to
counsel to the Underwriters.
(d) Bryan Cave LLP, special counsel to the Company, shall have
furnished to the Underwriters its written opinion, addressed to the
Underwriters and dated such Delivery Date to the Underwriters, in form and
substance reasonably satisfactory to the Underwriters, substantially to the
effect that:
16
(i) The Registration Statement was declared effective under the
Securities Act and the Indenture was qualified under the Trust
Indenture Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to the subparagraph
of Rule 424(b) of the Securities Act specified in such opinion on the
date specified therein; and no stop order suspending the effectiveness
of the Registration Statements has been issued and, to the knowledge
of such counsel, no proceeding for that purpose is pending or
threatened by the Commission.
(ii) The Registration Statement and the Prospectus (excluding any
documents incorporated by reference therein) and any further
amendments or supplements thereto made by the Company prior to the
Delivery Date (other than the financial statements and notes thereto
and related schedules and other financial, statistical and accounting
data contained therein or omitted therefrom, as to which such counsel
need express no opinion), when they were filed with the Commission
complied as to form in all material respects with the requirements of
the Securities Act, and the Indenture conforms in all material
respects to the requirements of the Trust Indenture Act.
(iii) The Company has duly authorized, executed and delivered
this Agreement.
(iv) The Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution
and delivery thereof by the Trustee, constitutes a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms.
(v) The Securities have been duly authorized by the Company and,
assuming due authentication thereof by the Trustee, and upon payment
for and delivery thereof in accordance with this Agreement, the
Securities will be valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms and
entitled to the benefits of the Indenture.
(vi) The statements made in the Prospectus under the captions
"Description of the Notes" (including any statements referred to in
the applicable section of the base prospectus included in the
Prospectus), insofar as such statements purport to constitute
summaries of the Indenture and the Securities, constitute accurate
summaries of the matters described therein in all material respects.
The Securities conform in all material respects to the description
thereof in the Prospectus.
(vii) The execution and delivery by the Company of the
Transaction Agreements, the issuance and sale of the Securities by the
Company and the compliance by the Company with all of the provisions
of the Transaction Agreements will not conflict with or result in a
breach or violation of any U.S. federal or Missouri statute or any
order, rule or regulation reasonably recognized
17
by such counsel as applicable to transaction of this kind or, to the
knowledge of any such counsel, any order of any U.S. federal or
Missouri court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties or
assets, except for such conflicts, breaches or violation that would
not be reasonably expected to result in a Material Adverse Effect.
(viii) No consent, approval, authorization, order, license,
registration or qualification of or with any U.S. federal or Missouri
governmental agency or body is required for the sale of the Securities
by the Company or the compliance by the Company with all of the
provisions of the Transaction Agreements, except such consents,
approvals, authorizations, orders, licenses, registrations or
qualifications which have been obtained or made or as may be required
under state securities or Blue Sky Laws in connection with the
purchase and distribution of the Securities by the Underwriters.
The opinions described in paragraph numbers (iv) and (v) above may be
subject to the effect of applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, receivership, moratorium, arrangement and assignment for the
benefit of creditors laws, and other similar laws relating to or affecting the
rights and remedies of creditors generally. The opinions may also be subject to
the effect of general principles of equity, whether applied by a court of law or
equity, including, but not limited to, principles (i) governing the availability
of specific performance, injunctive relief or other equitable remedies, (ii)
affording equitable defenses (e.g., waiver, laches and estoppel) against a party
seeking enforcement, (iii) requiring good faith and fair dealing in the
performance and enforcement of a contract by the party seeking its enforcement,
(iv) requiring reasonableness in the performance and enforcement of an agreement
by the party seeking its enforcement, (v) requiring consideration of the
materiality of a breach or the consequences of the breach to the party seeking
its enforcement, (vi) requiring consideration of the impracticability or
impossibility of performance at the time of attempted enforcement and (vii)
affording defenses based upon the unconscionability of the enforcing party's
conduct after the parties have entered into the contract. Such opinions may also
be subject to the effect of generally applicable rules of law that (i) may,
where less than all of a contract may be unenforceable, limit the enforceability
of the balance of the contract to circumstances in which the unenforceable
portion is not an essential part of the agreed exchange, and (ii) govern and
afford judicial discretion regarding the determination of damages and
entitlement to attorneys' fees and other costs. Such opinions may also be
subject to the qualification that the enforceability of any indemnification or
contribution provisions set forth in any documents or agreements referred to
herein may be limited by federal or state securities laws or by public policy.
In addition, the opinions of such counsel described in this paragraph shall
be rendered to the Underwriters at the request of the Company and shall so state
therein. Such opinions may recite that no opinion is expressed with respect to,
and that such counsel is not passing upon, and does not assume responsibility
for (i) any matters concerning The Depository Trust Company or its policies,
practices or procedures or (ii) any matters relating to insurance laws,
statutes, rules,
18
regulations or policies. In addition, such opinions may contain customary
recitals, conditions and qualifications.
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of Deloitte & Touche, the Underwriters and their counsel in
connection with the preparation of the Registration Statement and the Prospectus
at which conferences the contents of the Registration Statement and the
Prospectus were discussed, reviewed and revised. Although such counsel is not
passing upon, and does not assume responsibility for, the accuracy, completeness
or fairness of such statements and has not made any independent investigation
thereof (except as indicated above), on the basis of the information which was
developed in the course thereof, considered in light of such counsel's
understanding of applicable law and experience such counsel has gained through
its practice thereunder, such counsel will advise the Underwriters that such
counsel has no reason to believe that (i) the Registration Statement, on the
Effective Date, contained an untrue statement of material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading and (ii) the Prospectus (as such Prospectus
may have been amended or supplemented, if applicable), at the time such
Prospectus was circulated and on the Delivery Date, contained or contains an
untrue statement of a material fact or omitted or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading. Such
counsel need not express any view as to the financial statements, notes and
schedules or any other financial, statistical or accounting data included or
incorporated by reference in or omitted from the Registration Statement and the
Prospectus.
(e) James E. Sherman, Esq., Senior Vice President, General Counsel and
Secretary of the Company, shall have furnished to the Underwriters his
written opinion, addressed to the Underwriters and dated the Delivery Date,
in form and substance reasonably satisfactory to the Underwriters,
substantially to the effect that:
(i) The Company and its Significant Subsidiaries which are
incorporated in the United States has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
its respective jurisdiction of incorporation, has all requisite
corporate power and authority to own, lease and operate its properties
and to conduct its business in all material respects as it is
currently being conducted and as described in the Prospectus, and is
duly qualified and in good standing as a foreign corporation
authorized to do business in each jurisdiction described in Schedule 5
in which the ownership, leasing and operation of its property and the
conduct of its business requires such qualification (except where the
failure to be so qualified and in good standing could not reasonably
be expected to have a Material Adverse Effect).
(ii) The entities listed on Schedule 2 hereto are the only
subsidiaries, direct or indirect, of the Company. Except as otherwise
set forth in the Prospectus, the Company owns, directly or indirectly
through other subsidiaries, the percentage indicated on Schedule 2 of
the outstanding capital stock or other
19
securities evidencing equity ownership of such subsidiaries, free and
clear of any security interest and, to the knowledge of such counsel,
any claim, lien, limitation on voting rights or encumbrance; and all
of such securities have been duly authorized, validly issued, are
fully paid and nonassessable and were not issued in violation of any
preemptive or similar rights. There are no outstanding subscriptions,
rights, warrants, calls, commitments of sale or options to acquire, or
instruments convertible into or exchangeable for, any such shares of
capital stock or other equity interest of such subsidiaries owned by
the Company.
(iii) The Company has all requisite corporate power and authority
to execute, deliver and perform its obligations under the Transaction
Agreements and the Securities and to consummate the transactions
contemplated hereby or thereby, including, without limitation, the
corporate power and authority to issue, sell and deliver the
Securities as provided herein.
(iv) The Company had an authorized capitalization as of September
30, 2001 as set forth in the Prospectus.
(v) To the knowledge of such counsel, neither the Company nor any
of its Significant Subsidiaries which are incorporated in the United
States is (i) in violation of its respective charter or bylaws, (ii)
is in default in the performance of any obligation, agreement or
condition contained in any material bond, debenture, note or any other
evidence of indebtedness or in any other instrument, indenture,
mortgage, deed of trust, retrocessional treaty or arrangement, or
other material agreement to which it is a party or by which it is
bound or to which any of its properties is subject or (iii) is in
violation of any Missouri or U.S. federal law, statute, rule,
regulation, judgment or court decree applicable to the Company or its
Significant Subsidiaries which are incorporated in the United States,
except in the case of clauses (ii) and (iii) for any such violation or
default which would not reasonably be expected to have a Material
Adverse Effect.
(vi) The execution, delivery and performance by the Company of
the Transaction Agreements, the issuance and sale of the Securities
and the compliance by the Company with all of the provisions of the
Transaction Agreements will not violate or constitute a breach of any
of the terms or provisions of, or a default under (or an event that
with notice or the lapse of time, or both, would constitute a
default), or require consent under, or result in the imposition of a
lien or encumbrance on any properties of the Company or any of its
Significant Subsidiaries which are incorporated in the United States,
or an acceleration of indebtedness pursuant to, (i) the charter or
bylaws of the Company or any of its Significant Subsidiaries which are
incorporated in the United States, (ii) any bond, debenture, note,
indenture, mortgage, deed of trust or other agreement or instrument
known to such counsel to which the Company or any of its Significant
Subsidiaries which are incorporated in the United States is a party or
by which any of them or their property is or may be bound, (iii) any
U.S.
20
federal or Missouri statute, rule or regulation reasonably recognized
by such counsel as applicable to transactions of this kind, or (iv)
any judgment, order or decree known to such counsel of any U.S.
federal or Missouri court or governmental agency or authority having
jurisdiction over the Company, any of its Significant Subsidiaries
which are incorporated in the United States or their assets or
properties except for any such violations, breaches or defaults which
would not reasonably be expected to have a Material Adverse Effect and
except for such consents as may have been obtained by the Company or
such consents or filings as may be required or such as may be required
under state or foreign securities or Blue Sky laws and regulations or
such as may be required by the NASD. No consent, approval,
authorization or order of, or filing, registration, qualification,
license or permit of or with, any governmental agency, body,
administrative agency or, to the knowledge of such counsel, any court,
is required for the execution and delivery, the issuance and sale of
the Securities compliance by the Company with all of the provisions of
the Transaction Agreements, except such as (i) would not reasonably be
expected to have a Material Adverse Effect, (ii) would not prohibit or
adversely affect the issuance of the Securities or (iii) may be
required under the Securities Act and state or foreign securities or
Blue Sky laws and regulations or such as may be required by the NASD.
No consents or waivers from any other person are required for the
execution and delivery of the Transaction Agreements, the issuance and
sale of the Securities and the compliance by the Company with all of
the provisions of the Transaction Agreements, other than such consents
and waivers as (i) would not reasonably be expected to have a Material
Adverse Effect, (ii) would not prohibit or adversely affect the
issuance of the Securities or (iii) have been obtained.
(vii) To the best knowledge of such counsel, the Company and each
of its Significant Subsidiaries which are incorporated in the United
States has (i) all Authorizations necessary to engage in the business
currently conducted by it in the manner described in the Prospectus,
except where failure to hold such Authorizations would not have a
Material Adverse Effect and (ii) no reason to believe that any
governmental body or agency is considering limiting, suspending or
revoking any such Authorization. To the best knowledge of such counsel
and except as would not have a Material Adverse Effect, all such
Authorizations are valid and in full force and effect and the Company
and its Significant Subsidiaries which are incorporated in the United
States are in compliance in all material respects with the terms and
conditions of all such Authorizations and with the rules and
regulations of the regulatory authorities having jurisdiction with
respect thereto. Except as described in the Prospectus, no insurance
regulatory agency or body has issued any order or decree impairing,
restricting or prohibiting the payment of dividends by any Significant
Subsidiary which are incorporated in the United States of the Company
to its parent, other than any such orders or decrees the issuance of
which could not reasonably be expected to have a Material Adverse
Effect.
21
(viii) The Incorporated Documents or any further amendment or
supplement thereto made by the Company prior to the Delivery Date
(other than the financial statements, notes and schedules or any other
financial, statistical or accounting data included or incorporated by
reference in or omitted from the Incorporated Documents, as to which
such counsel need express no opinion), when they were filed with the
Commission and as of the Delivery Date, complied and comply, as the
case may be, as to form in all material respects with the requirements
of the Exchange Act.
(ix) To the best of such counsel's knowledge, there are no
contracts or other documents which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by the
Securities Act which have not been described or filed as exhibits to
the Registration Statement.
(x) Neither the Company nor any of its subsidiaries is, or after
the application of the net proceeds from the sale of the Securities
and the concurrent sale of the Units will be, an "investment company"
as defined, and subject to regulation under, the Investment Company
Act.
In addition, such counsel shall state that he has, or members of his staff
have, participated in conferences with other officers and other representatives
of the Company, representatives of Deloitte & Touche, the Underwriters and their
counsel in connection with the preparation of the Registration Statements and
the Prospectus at which conferences the contents of the Registration Statements
and the Prospectus were discussed, reviewed and revised. Although such counsel
is not passing upon, and does not assume responsibility for, the accuracy,
completeness or fairness of such statements and has not made any independent
investigation thereof (except as indicated above), on the basis of the
information which was developed in the course thereof, such counsel will advise
the Underwriters that such counsel has no reason to believe that (i) the
Registration Statement, on the Effective Date, contained an untrue statement of
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading and (ii) the
Prospectus (as such Prospectus may have been amended or supplemented, if
applicable), at the time such Prospectus was circulated and on the Delivery
Date, contained or contains an untrue statement of a material fact or omitted or
omits to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. Such counsel need not express any view as to the
financial statements, notes and schedules or any other financial, statistical or
accounting data included or incorporated by reference in or omitted from the
Registration Statement and in the Prospectus.
The opinions of such counsel described in this paragraph shall be rendered
to the Underwriters at the request of the Company and shall so state therein.
Such opinions may contain customary recitals, conditions and qualifications.
(f) Shibley Righton LLP shall have furnished to the Underwriters its
written opinion, as special Canadian counsel to the Company, addressed to
the Underwriters and
22
dated the Delivery Date, in form and substance reasonably satisfactory to
the Underwriters, substantially to the effect that:
(i) Each of the Company's Canadian subsidiaries has been duly
incorporated and is existing under the laws of its respective
jurisdiction of incorporation or continuance, as the case may be, has
all requisite corporate power and authority to own, lease and operate
its properties and to conduct its business as it is currently being
conducted and as described in the Prospectus and is duly qualified and
in good standing as a foreign corporation authorized to do business in
each jurisdiction in which the ownership, leasing and operation of its
property and the conduct of its business requires such qualification
(except where the failure to be so qualified and in good standing
could not reasonably be expected to have a Material Adverse Effect).
(ii) The execution, delivery and performance by the Company of
the Transaction Agreements, the issuance and sale of the Securities
and the consummation of the transactions contemplated hereby and
thereby will not violate, conflict with or constitute a breach of any
of the terms or provisions of, or a default under (or an event that
with notice or the lapse of time, or both, would constitute a
default), or require consent under, or result in the imposition of a
lien or encumbrance on any properties of the Company's Canadian
subsidiaries, or an acceleration of indebtedness pursuant to, (i) the
constating documents of any of the Company's Canadian subsidiaries,
(ii) any material bond, debenture, note, indenture, mortgage, deed of
trust or other agreement or instrument known to such counsel to which
any of the Company's Canadian subsidiaries is a party or by which any
of them or their property is or may be bound, (iii) any material
statute, rule or regulation known to such counsel to be applicable to
any of the Company's Canadian subsidiaries or any of their assets or
properties, or (iv) any material judgment, order or decree known to
such counsel of any Canadian court or governmental agency or authority
having jurisdiction over any of the Company's Canadian subsidiaries or
their assets or properties. No consent, approval, authorization or
order of, or filing, registration, qualification, license or permit of
or with, any Canadian court or governmental agency, body or
administrative agency is required for the execution, delivery and
performance by the Company of the Transaction Agreements, the issuance
and sale of the Securities and the consummation of the transactions
contemplated hereby and thereby.
(iii) To the best knowledge of such counsel, no action has been
taken and no Canadian statute, rule or regulation or order has been
enacted, adopted or issued by any Canadian governmental agency that
prevents the issuance of the Securities; no injunction, restraining
order or order of any nature by a Canadian court of competent
jurisdiction has been issued that prevents the issuance of the
Securities and to the best knowledge of such Counsel, no action, suit
or proceeding is pending against or affecting or threatened against,
any of the
23
Company's Canadian subsidiaries before any court or arbitrator or any
governmental body, agency or official which, if adversely determined,
would prohibit, interfere with or adversely affect the offer or
issuance of the Securities or in any manner draw into question the
validity of the Transaction Agreements or the Securities.
(iv) To the best knowledge of such counsel, each of the Company's
Canadian subsidiaries has (i) all Authorizations necessary to engage
in the business currently conducted by it in the manner described in
the Prospectus, except where failure to hold such Authorizations would
not have a Material Adverse Effect and (ii) no reason to believe that
any governmental body or agency is considering limiting, suspending or
revoking any such Authorization. To the best of such counsel's
knowledge, all such Authorizations are valid and in full force and
effect and the Company's Canadian subsidiaries are in compliance in
all material respects with the terms and conditions of all such
Authorizations and with the rules and regulations of the regulatory
authorities having jurisdiction with respect thereto. To the best of
such counsel's knowledge, no insurance regulatory agency or body has
issued any order or decree impairing, restricting or prohibiting the
payment of dividends by any subsidiary of the Company to its parent.
The opinions of such counsel described in this paragraph shall be
rendered to the Underwriters at the request of the Company and shall so state
therein. Such opinions may contain customary recitals, conditions and
qualifications.
(g) Chancery Chambers shall have furnished to the Underwriters its
written opinion, as special Barbados counsel to the Company addressed to the
Underwriters and dated the Delivery Date, in form and substance reasonably
satisfactory to the Underwriters, substantially to the effect that:
(i) Each of the Company's Barbados subsidiaries has been duly
incorporated and is validly existing under the laws of its respective
jurisdiction of incorporation, has all requisite corporate power and
authority to own, lease and operate its properties and to conduct its
business as it is currently being conducted and as described in the
Prospectus and is duly qualified and in good standing as a foreign
corporation authorized to do business in each jurisdiction in which
the ownership, leasing and operation of its property and the conduct
of its business requires such qualification (except where the failure
to be so qualified and in good standing could not reasonably be
expected to have a Material Adverse Effect).
(ii) The execution, delivery and performance by the Company of
the Transaction Agreements, the issuance and sale of the Securities
and the consummation of the transactions contemplated hereby and
thereby will not violate, conflict with or constitute a breach of any
of the terms or provisions of, or a default under (or an event that
with notice or the lapse of time, or both, would constitute a
default), or require consent under, or result in the imposition of a
lien
24
or encumbrance on any properties of the Company's Barbados
subsidiaries, or an acceleration of indebtedness pursuant to, (i) the
constating documents of any of the Company's Barbados subsidiaries,
(ii) any material bond, debenture, note, indenture, mortgage, deed of
trust or other agreement or instrument known to such counsel to which
any of the Company's Barbados subsidiaries is a party or by which any
of them or their property is or may be bound, (iii) any material
statute, rule or regulation known to such counsel to be applicable to
any of the Company's Barbados subsidiaries or any of their assets or
properties, or (iv) any material judgment, order or decree of any
Barbados court or governmental agency or authority having jurisdiction
over any of the Company's Barbados subsidiaries or their assets or
properties. No consent, approval, authorization or order of, or
filing, registration, qualification, license or permit of or with, any
Barbados court or governmental agency, body or administrative agency
is required for the execution, delivery and performance by the Company
of the Transaction Agreements, the issuance and sale of the Securities
and the consummation of the transactions contemplated hereby and
thereby.
(iii) To the best knowledge of such counsel, no action has been
taken and no Barbados statute, rule or regulation or order has been
enacted, adopted or issued by any Barbados governmental agency that
prevents the issuance of the Securities; no injunction, restraining
order or order of any nature by a Barbados court of competent
jurisdiction has been issued that prevents the issuance of the
Securities and to the best knowledge of such Counsel, no action, suit
or proceeding is pending against or affecting or threatened against,
any of the Company's Barbados subsidiaries before any court or
arbitrator or any governmental body, agency or official which, if
adversely determined, would prohibit, interfere with or adversely
affect the issuance or marketability of the Securities or in any
manner draw into question the validity of the Transaction Agreements
or the Securities.
(iv) To the best knowledge of such counsel, each of the Company's
Barbados subsidiaries has (i) all Authorizations necessary to engage
in the business currently conducted by it in the manner described in
the Prospectus, except where failure to hold such Authorizations would
not have a Material Adverse Effect and (ii) no reason to believe that
any governmental body or agency is considering limiting, suspending or
revoking any such Authorization. To the best of such counsel's
knowledge, all such Authorizations are valid and in full force and
effect and the Company's Barbados subsidiaries are in compliance in
all material respects with the terms and conditions of all such
Authorizations and with the rules and regulations of the regulatory
authorities having jurisdiction with respect thereto. To the best of
such counsel's knowledge, no insurance regulatory agency or body has
issued any order or decree impairing, restricting or prohibiting the
payment of dividends by any subsidiary of the Company to its parent.
25
The opinions of such counsel described in this paragraph shall be
rendered to the Underwriters at the request of the Company and shall so state
therein.
(h) Simpson Thacher & Bartlett, shall have furnished to the
Underwriters its written opinion, as counsel to the Underwriters, addressed to
the Underwriters and dated the Delivery Date, in form and substance reasonably
satisfactory to the Underwriters.
(i) By the date hereof and on the Delivery Date, Deloitte & Touche
shall have furnished to the Underwriters its letters, in form and substance
reasonably satisfactory to the Underwriters, containing statements and
information of the type customarily included in accountants' initial and
bring-down "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectus.
(j) The Company shall have furnished to the Underwriters a
certificate, dated the Delivery Date, of its President or any Executive or
Senior Vice President and its principal financial or accounting officer stating,
in the name of and in their capacity as officers of the Company, that:
(i) The representations, warranties and agreements of the Company
in Section 1 are true and correct in all material respects as of the
Delivery Date; the Company has complied with in all material respects
all its agreements contained herein to be performed prior to or on the
Delivery Date; and the conditions set forth in Sections 7 (a) and
(m) have been fulfilled.
(ii) (A) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from (I) any governmental or
regulatory action, notice, order or decree of a regulatory authority
or (II) from fire, explosion, flood or other calamity, whether or not
covered by insurance, or from any labor dispute or court, in each
case, otherwise than as set forth in the Prospectus; (B) since such
date there has not been any material change in the capital stock,
short-term debt or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company
and its subsidiaries taken as a whole, otherwise than as set forth or
contemplated in the Prospectus; and (C) the Company has not declared
or paid any dividend on its capital stock, except for dividends
declared in the ordinary course of business and consistent with past
practice, otherwise than as set forth in the Prospectus and, except as
set forth or contemplated in the Prospectus, neither the Company nor
any of its subsidiaries has entered into any transaction or agreement
(whether or not in the ordinary course of business) material to the
Company and its subsidiaries taken as a whole.
26
(iii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion (A) the Registration Statement,
as of the Effective Date, did not include any untrue statement of a
material fact and did not omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, (B) the Prospectus, as of the date hereof and as of the
Delivery Date, did not include any untrue statement of a material fact
and did not 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 and (C) since
the Effective Date, no event has occurred which should have been set
forth in a supplement or amendment to the Registration Statement or
the Prospectus.
(k) The Indenture, in form and substance reasonably satisfactory to
the Company and the Underwriters, shall have been duly executed and delivered by
the Company and the Trustee, and the Securities shall have been duly executed
and delivered by the Company and duly authenticated by the Trustee.
(l) On or prior to the Delivery Date, counsel to the Underwriters
shall have been furnished with such documents as they may reasonably require for
the purpose of enabling them to pass upon the issuance and sale of the
Securities as herein contemplated and related proceedings or in order to
evidence the accuracy and completeness of any of the representations and
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 reasonably satisfactory in form
and substance to the Underwriters and their counsel.
(m) The sale of the Units shall have been consummated prior to the
time of the closing of the sale of the Securities on the Delivery Date.
(n) Neither the Company nor any of its subsidiaries (i) shall have
sustained since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus any loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus or (ii)
since such date there shall not have been any change in the capital stock,
short-term debt or long-term debt of the Company or any of its subsidiaries or
any change, or any development involving a prospective change, in or affecting
the general affairs, management, financial position, prospects, stockholders'
equity or results of operations of the Company and its subsidiaries, otherwise
than as set forth or contemplated in the Prospectus, the effect of which, in any
such case described in clause (i) or (ii), is, in the judgment of the Lead
Underwriters, so material and adverse as to make it impracticable or inadvisable
to proceed with the offering or the delivery of the Securities being delivered
on the Delivery Date on the terms and in the manner contemplated in the
Prospectus.
27
(o) Subsequent to the execution and delivery of this Agreement, (i) no
downgrading shall have occurred in the rating accorded the Company's debt
securities by any "nationally recognized statistical rating organization", as
that term is defined by the Commission for purposes of Rule 436(g)(2) of the
Securities Act and (ii) no such organization shall have publicly announced or
privately communicated to the Company that it has under surveillance or review,
with possible negative implications, its rating of any of the Company's debt
securities.
(p) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange, the
Nasdaq National Market or the over-the-counter market, or trading in any
securities of the Company on any exchange shall have been suspended, the
settlement of such trading generally shall have been materially disrupted or
minimum prices shall have been established on any such exchange or market by the
Commission, by such exchange or by any other regulatory body or governmental
authority having jurisdiction, (ii) a banking moratorium shall have been
declared by Federal or state authorities, (iii) the United States shall have
become engaged in hostilities, there shall have been an escalation in
hostilities involving the United States, or there shall have been a declaration
of a national emergency or war by the United States, or (iv) there shall have
occurred a material adverse change in general domestic or international
economic, political or financial conditions, including, without limitation, as a
result of terrorist activities, or the effect of international conditions on the
financial markets in the United States shall be such, as to make it in the
reasonable judgment of the Lead Underwriters, impracticable or inadvisable to
proceed with the public offering or delivery of the Securities being delivered
on the Delivery Date on the terms and in the manner contemplated in the
Prospectus.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel to the Underwriters. No opinion shall state that it is to be governed
or qualified by, or that it is otherwise subject to, any treatise, written
policy or other document relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).
All opinions (other than the opinion referred to in (j) above) shall state that
they may be relied upon by Simpson Thacher & Bartlett as to matters of law
(other than New York and federal law) in rendering the opinion referred to in
(h) above.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each Underwriter,
its officers and employees and each person, if any, who controls any
Underwriter within the meaning of the Securities Act, from and against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of the Securities), to
which that Underwriter, officer, employee or controlling person may become
subject, under the
28
Securities Act or otherwise, insofar as such loss, claim, damage, liability
or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any (A)
Preliminary Prospectus, the Registration Statement, the Prospectus or in
any amendment or supplement thereto, or (B) any blue sky application or
other document prepared or executed by the Company (or based upon any
written information furnished by the Company) filed in any jurisdiction
specifically for the purpose of qualifying any or all of the Securities
under the securities laws of any state or other jurisdiction (such
application, document or information being hereinafter called a "BLUE SKY
APPLICATION") or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, the Registration Statement, the Prospectus or in
any amendment or supplement thereto, or in any Blue Sky Application, any
material fact required to be stated therein or necessary to make the
statements therein not misleading; and shall reimburse each Underwriter and
each such officer, employee or controlling person promptly upon demand for
any legal or other expenses reasonably incurred by that Underwriter,
officer, employee or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred; provided, however, that
the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or in any such amendment or supplement, in
reliance upon and in conformity with the written information concerning
that Underwriter furnished to the Company through the Lead Underwriters by
or on behalf of any Underwriter concerning that Underwriter specifically
for inclusion therein which information consists solely of the information
set forth in Section 8(e); and provided further, that the Company shall not
be liable to indemnify any Underwriter or any person who controls such
Underwriter on account of any such loss, liability, claim, damage or
expense arising out of any such defect or alleged defect in any Preliminary
Prospectus or Prospectus if a copy of the Prospectus (exclusive of the
Incorporated Documents), as amended or supplemented, shall not have been
given or sent by such Underwriter with or prior to the written confirmation
of the sale involved to the extent that (i) the Prospectus, as amended or
supplemented, would have cured such defect or alleged defect and (ii)
sufficient quantities of the Prospectus, as amended or supplemented, were
made available to such Underwriter to allow it to deliver such Prospectus
on a timely basis. The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to any Underwriter or to any
officer, employee or controlling person of that Underwriter.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless, the Company, its officers and employees, each of its
directors, and each person, if any, who controls the Company within the
meaning of the Securities Act from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company or any such director, officer, employee or controlling person may
become subject, under the Securities Act or otherwise, insofar as such
loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement
29
or alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any
amendment or supplement thereto, or in any Blue Sky Application or (ii) the
omission or alleged omission to state in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or in any amendment or supplement
thereto or in any Blue Sky Application, any material fact required to be
stated therein or necessary to make the statements therein not misleading,
but in each case only to the extent that the untrue statement or alleged
untrue statement or omission or alleged omission was made in reliance upon
and in conformity with the written information furnished to the Company
through the Lead Underwriters by or on behalf of that Underwriter
specifically for inclusion therein and described in Section 8(e), and shall
reimburse the Company and any such director, officer, employee or
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by the Company or any such director, officer, employee
or controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred. The foregoing indemnity agreement is
in addition to any liability which any Underwriter may otherwise have to
the Company or any such director, officer, employee or controlling person.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have under this Section 8 except to the extent
it has been materially prejudiced by such failure and, provided, further,
that the failure to notify the indemnifying party shall not relieve it from
any liability which it may have to an indemnified party otherwise than
under this Section 8. If any such claim or action shall be brought against
an indemnified party, and it shall notify the indemnifying party thereof,
the indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel satisfactory
to the indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim or
action, the indemnifying party shall not be liable to the indemnified party
under this Section 8 for any legal or other expenses subsequently incurred
by the indemnified party in connection with the defense thereof other than
reasonable costs of investigation; provided, however, that the Underwriters
shall have the right to employ separate counsel to represent jointly the
Underwriters and their respective officers, employees and controlling
persons who may be subject to liability arising out of any claim in respect
of which indemnity may be sought by the Underwriters against the Company
under this Section 8 if, in the reasonable judgment of counsel to such
Underwriters, it is advisable for such Underwriters, officers, employees
and controlling persons to be jointly represented by separate counsel, due
to the availability of one or more legal defenses to them which are
different from or additional to those available to the indemnifying party,
and in that event the reasonable fees and expenses of such separate counsel
shall be paid by the Company; provided further, that the Company shall not
be liable for the fees and
30
expenses of more than one separate firm of attorneys (in addition to one
local counsel in each relevant jurisdiction) at any time for all such
indemnified parties. No indemnifying party shall, (i) without the prior
written consent of the indemnified parties (which consent shall not be
unreasonably withheld) settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be
sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or
proceeding, or (ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with its written consent or if there
be a final judgment of the plaintiff in any such action, the indemnifying
party agrees to indemnify and hold harmless any indemnified party from and
against any loss or liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable or insufficient to hold harmless an indemnified
party under Section 8(a) or 8(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, other
than to the extent that such indemnification is unavailable or insufficient
due to a failure to provide prompt notice in accordance with Section 8(c),
then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand
and the Underwriters on the other from the offering of the Securities or
(ii) if the allocation provided by clause 8(d)(i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only
the relative benefits referred to in clause 8(d)(i) but also the relative
fault of the Company on the one hand and the Underwriters on the other with
respect to the statements or omissions or alleged statements or alleged
omissions that resulted in such loss, claim, damage or liability, or action
in respect thereof, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other with respect to such offering shall be deemed to
be in the same proportion as the total net proceeds from the offering of
the Securities purchased under this Agreement (before deducting expenses)
received by the Company, on the one hand, and the total underwriting
discounts and commissions realized or received by the Underwriters with
respect to the Securities purchased under this Agreement, on the other
hand, bear to the total gross proceeds from the offering of the Securities
under this Agreement, in each case, as set forth in the table on the cover
page of the Prospectus. The relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to
information supplied by the Company or the Underwriters, the intent of the
parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the
Underwriters agree that it would not be just and equitable if the amount of
contributions pursuant to this Section 8(d) were to be
31
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 into account the equitable considerations referred to herein.
The amount paid or payable by an indemnified party as a result of the loss,
claim, damage or liability, or action in respect thereof, referred to above
in this Section 8(d) shall be deemed to include, for purposes of this
Section 8(d), any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 8(d), no
Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it
and distributed to the public was offered to the public exceeds the amount
of any damages which such Underwriter has otherwise paid or become liable
to pay by reason of any untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute as provided
in this Section 8(d) are several in proportion to their respective
underwriting obligations and not joint.
(e) The Underwriters severally confirm and the Company acknowledges
that the statements with respect to the offering of the Securities by the
Underwriters set forth in the last paragraph on the cover page and in the
second sentence of the sixth, seventh, eighth, ninth, tenth and final
paragraphs under the caption "Underwriting" in the Prospectus are correct
and constitute the only information concerning such Underwriters furnished
in writing to the Company through the Lead Underwriters by or on behalf of
the Underwriters specifically for inclusion in the Prospectus and the
Underwriters severally confirm that such statements are accurate and
complete.
9. Defaulting Underwriters. If, on the Delivery Date, any Underwriter
defaults in the performance of its obligations under this Agreement, the
remaining non-defaulting Underwriters shall be obligated to purchase the
principal amount of Securities which the defaulting Underwriter agreed but
failed to purchase on the Delivery Date in the respective proportions which the
principal amount of the Securities set forth opposite the name of each remaining
non-defaulting Underwriter in Schedule 1 hereto bears to the aggregate principal
amount of Securities set forth opposite the names of all the remaining
non-defaulting Underwriters in Schedule 1 hereto; provided, however, that the
remaining non-defaulting Underwriters shall not be obligated to purchase any of
the Securities on the Delivery Date if the total aggregate principal amount of
the Securities which the defaulting Underwriter or Underwriters agreed but
failed to purchase on such date exceeds 9.09% of the aggregate principal amount
of the Securities to be purchased on the Delivery Date, and any remaining
non-defaulting Underwriter shall not be obligated to purchase more than 110% of
the aggregate principal amount of the Securities which it agreed to purchase on
the Delivery Date pursuant to the terms of Section 2. If the foregoing maximums
are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Lead Underwriters who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, the total aggregate principal amount of Securities to be
purchased on the
32
Delivery Date. If the remaining Underwriters or other underwriters satisfactory
to the Lead Underwriters do not elect to purchase on the Delivery Date the
aggregate principal amount of Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase on the Delivery Date, this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter
and the Company, except that the Company will continue to be liable for the
payment of expenses to the extent set forth in Sections 6 and 11. As used in
this Agreement, the term "Underwriter" includes, for all purposes of this
Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 9, purchases which a defaulting
Underwriter agreed but failed to purchase.
Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company for damages caused by its default. If other
underwriters are obligated or agree to purchase the Securities of a defaulting
or withdrawing Underwriter, either the Lead Underwriters or the Company may
postpone the Delivery Date for up to seven full business days in order to effect
any changes that, in the opinion of counsel to the Company or counsel to the
Underwriters, may be necessary in the Prospectus or in any other document or
arrangement.
10. Termination. The obligations of the Underwriters hereunder may be
terminated by the Underwriters by notice given to and received by the Company
prior to delivery of and payment for the Securities if, prior to that time, any
of the events described in Sections 7(n), 7(o) or 7(p) shall have occurred or if
the Underwriters shall decline to purchase the Securities for any reason
permitted under this Agreement.
11. Reimbursement of Underwriters' Expenses. If (a) the Company shall
fail to tender the Securities for delivery to the Underwriters by reason of any
failure, refusal or inability on the part of the Company to perform any
agreement on its part to be performed, or because any other condition of the
Underwriters' obligations hereunder required to be fulfilled by the Company
(including, without limitation, with respect to the transactions other than as a
result of the condition described in Section 7(p)) is not fulfilled or (b) the
Underwriters shall decline to purchase the Securities for any reason permitted
under this Agreement (including the termination of this Agreement pursuant to
Section 10 other than as a result of the condition described in Section 7(p)),
the Company shall reimburse the Underwriters for all reasonable out-of-pocket
expenses (including fees and disbursements of counsel) incurred by the
Underwriters in connection with this Agreement and the proposed purchase of the
Securities, and upon demand the Company shall pay the full amount thereof to the
Underwriters. If this Agreement is terminated pursuant to Section 9 by reason of
the default of one or more Underwriters, the Company shall not be obligated to
reimburse any defaulting Underwriter on account of those expenses.
12. Notices, etc. Notices given pursuant to any provision of this
Agreement shall be given in writing and shall be addressed as follows:
(a) if to the Underwriters, to Banc of America Securities LLC, 9 West
57th Street -- Floor 31, New York, New York 10019; Attention: Lily Chang,
Esq. (Fax No.: 212-847-6442) and to Lehman Brothers Inc., 101 Hudson
Street, Jersey City, New Jersey,
33
07302, Attention: Fixed Income Syndicate Department (Fax No.:
201-524-5175), with a copy to the General Counsel's Office, 101 Hudson
Street, Jersey City, New Jersey, 07302;
with a copy to Simpson Thacher & Bartlett, 425 Lexington Avenue,
New York, New York 10017, Attention: Michael Nathan, Esq. (Fax No.:
212-455-2502).; and
(b) if to the Company, to 1370 Timberlake Manor Parkway, Chesterfield,
Missouri 63017, Attention: Jack B. Lay, Executive Vice President and Chief
Financial Officer (Fax No.: 636-736-7839), with a copy to James E. Sherman,
Esq., Senior Vice President, General Counsel and Secretary, at the same
address (Fax No.: 636-736-7886); and
with a copy to Bryan Cave LLP, One Metropolitan Square, 211 North
Broadway, Suite 3600, St. Louis, Missouri 63102, Attention: R. Randall
Wang, Esq. (Fax. No.: 314-259-2020);
provided, however, that any notice to an Underwriter pursuant to Section 8(c)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to Lehman Brothers
Inc. or Banc of America Securities LLC, as the case may be, which address will
be supplied to any other party hereto by Lehman Brothers Inc. or Banc of America
Securities LLC, as the case may be, upon request. Any such statements, requests,
notices or agreements shall take effect at the time of receipt thereof. The
Company shall be entitled to act and rely upon any request, consent, notice or
agreement given or made on behalf of the Underwriters by the Lead Underwriters
on behalf of the Underwriters.
13. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Company, and
their respective successors. This Agreement and the terms and provisions hereof
are for the sole benefit of only those persons, except that (A) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the officers,
directors and employees of the Underwriters and the person or persons, if any,
who control any Underwriter within the meaning of Section 15 of the Securities
Act and (B) any indemnity agreement of the Underwriters contained in this
Agreement shall be deemed to be for the benefit of directors, officers and
employees of the Company, and any person controlling the Company within the
meaning of Section 15 of the Securities Act. Nothing contained in this Agreement
is intended or shall be construed to give any person, other than the persons
referred to in this Section 13, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
14. Survival. The respective indemnities, representations, warranties
and agreements of the Company and the Underwriters contained in this Agreement
or made by or on behalf of them, respectively, pursuant to this Agreement, shall
survive the delivery of and payment for the Securities and shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any of them or any person
controlling any of them.
34
15. Definition of the term "Business Day." For purposes of this
Agreement, "BUSINESS DAY" means any day on which the NYSE is open for trading.
16. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
[The rest of this page has been left blank intentionally; the signature
page follows.]
35
If the foregoing correctly sets forth the agreement between the
Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
REINSURANCE GROUP OF AMERICA,
INCORPORATED
By:
------------------------------------
Name:
Title:
Accepted and agreed by:
BANC OF AMERICA SECURITIES LLC
LEHMAN BROTHERS INC.
For themselves and the other Underwriters
named in Schedule 1 hereto
By BANC OF AMERICA SECURITIES LLC
By:
----------------------------------------
Authorized Representative
By LEHMAN BROTHERS INC.
By:
----------------------------------------
Authorized Representative
SCHEDULE 1
AGGREGATE PRINCIPAL
AMOUNT OF SECURITIES
UNDERWRITER TO BE PURCHASED
- ----------- --------------------
Banc of America Securities LLC................................ $ 50,000,000
Lehman Brothers Inc........................................... 50,000,000
BNY Capital Markets, Inc...................................... 33,334,000
Fleet Securities, Inc......................................... 33,333,000
A.G. Edwards & Sons, Inc...................................... 33,333,000
------------
Total............................................... $200,000,000
============
SCHEDULE 2
LIST OF SUBSIDIARIES AND AFFILIATES OF
REINSURANCE GROUP OF AMERICA, INCORPORATED
AS OF DECEMBER 12, 2001
Reinsurance Group of America, Incorporated: subsidiary, of which approximately
48.3% is owned by Equity Intermediary, 9.6% is owned by MetLife, and the balance
by the public.
General American Argentina Sequros de Vida S.A.: Argentinean subsidiary
100% owned by RGA, engaged in business as a life, annuity, disability and
survivorship insurer.
RGA Argentina S.A.: Argentinian subsidiary 100% owned by RGA.
Reinsurance Company of Missouri, Incorporated: 100% wholly owned subsidiary
formed for the purpose of owning RGA Reinsurance Company.
RGA Reinsurance Company: 100% wholly owned subsidiary engaged in the
reinsurance business.
Fairfield Management Group, Inc.: 100% owned subsidiary.
Reinsurance Partners, Inc.: 100% wholly-owned subsidiary of
Fairfield Management Group, Inc., engaged in business as a
reinsurance brokerage company.
Great Rivers Reinsurance Management, Inc.: 100% wholly-owned
subsidiary of Fairfield Management Group, Inc., acting as a
reinsurance manager.
RGA (U.K.) Underwriting Agency Limited: 100% wholly-owned by
Fairfield Management Group, Inc.
RGA Reinsurance Company (Barbados) Ltd.: 100% subsidiary of Reinsurance
Group of America, Incorporated formed to engage in the exempt insurance
business.
RGA Financial Group, L.L.C.: 80% owned by RGA Reinsurance Company
(Barbados) Ltd. and 20% owned by RGA Reinsurance Company. Formed to
market and manage financial reinsurance business to be assumed by RGA
Reinsurance Company.
Triad Re, Ltd.: Reinsurance Group of America, Incorporated owns 100% of all
outstanding and issued shares of the Company's preferred stock. Reinsurance
Group of
America, Inc. owns 66.67% of all outstanding and issued shares of the
Company's common stock. Schmitt-Sussman Enterprises, Inc. owns 33.33% of
all outstanding and issued shares of the Company's common stock.
RGA Americas Reinsurance Company, Ltd.: Reinsurance Group of America,
Incorporated owns 100% of this company.
RGA International Ltd.: a Canadian corporation 100% wholly-owned by
Reinsurance Group of America, existing to hold Canadian reinsurance
operations.
RGA Canada Management Inc.: a Canadian corporation 100% wholly-owned
by RGA under CBCA.
RGA Life Reinsurance Company of Canada Limited: a Canadian corporation
100% wholly-owned by RGA Canada Management Inc.
RGA International Co. (Nova Scotia ULC): 100% owned by Reinsurance Group of
America, Incorporated.
RGA Financial Products Limited: 100% owned by RGA International Co.
(Nova Scotia ULC) (100 Class A shares and 100 Class B shares).
RGA Holdings Limited: 100% owned by Reinsurance Group of America,
Incorporated, holding company formed in the United Kingdom to own three
operating companies: RGA UK Services Limited, RGA Capital Limited, and RGA
Reinsurance (UK) Limited.
RGA Capital Limited: 100%, company is a corporate member of a Lloyd's
life syndicate.
RGA Reinsurance (UK) Limited: 100%, company to act as reinsurer.
RGA UK Services Limited: 100%, (Formerly RGA Managing Agency Limited):
inactive company.
RGA Australian Holdings Pty Limited: 100% owned by Reinsurance Group of
America, Incorporated, holding company formed to own RGA Reinsurance
Company of Australia Limited.
RGA Reinsurance Company of Australia Limited: 100%, formed to reinsure
the life, health and accident business of non-affiliated Australian
insurance companies.
RGA South African Holdings (Pty) Ltd.: 100% owned by Reinsurance Group of
America, Incorporated formed for the purpose of holding RGA Reinsurance
Company of South Africa Limited.
RGA Reinsurance Company of South Africa Limited: 100% owned by RGA
South African Holdings (Pty) Ltd.
Regal Atlantic Company (Bermuda) Ltd.: 100% owned by Reinsurance Group of
America, Incorporated.
Malaysian Life Reinsurance Group Berhad: 30% owned by Reinsurance Group of
America, Incorporated.
RGA Sigma Reinsurance SPC (Cayman Islands): 100% owned by Reinsurance Group
of America, Incorporated
SCHEDULE 3
JURISDICTIONS OF FOREIGN QUALIFICATION
RGA Reinsurance Company
Alabama
California
Colorado
Florida
Virginia
RGA Life Reinsurance Company of Canada
British Columbia
Alberta
Saskatchewan
Manitoba
Ontario
Quebec
[Note: the other entities (Reinsurance Group of America, Incorporated,
Reinsurance Company of Missouri, Incorporated, and RGA Reinsurance Company
(Barbados) Ltd.) are not qualified in any foreign jurisdictions.]