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EXHIBIT 1.2
American States Financial Corporation
2,000,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: May __, 1996
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TABLE OF CONTENTS
PURCHASE AGREEMENT........................................................... 1
SECTION 1. Representations and Warranties............................. 3
(a) Representations and Warranties by the Company and Lincoln........ 3
(i) Compliance with Registration Requirements.................. 4
(ii) Independent Accountants.................................... 5
(iii) Financial Statements....................................... 5
(iv) Statutory Financial Statements............................. 5
(v) No Material Adverse Change in Business..................... 6
(vi) Valid Existence of the Company............................. 6
(vii) Good Standing of Subsidiaries.............................. 6
(viii) Valid Existence of Lincoln................................. 7
(ix) Capitalization............................................. 7
(x) Authorization of Agreement................................. 7
(xi) Authorization and Description of Securities................ 7
(xii) Absence of Defaults and Conflicts.......................... 8
(xiii) Absence of Labor Dispute................................... 9
(xiv) Absence of Proceedings..................................... 9
(xv) Accuracy of Exhibits....................................... 9
(xvi) Possession of Intellectual Property........................ 9
(xvii) Absence of Further Requirements............................ 10
(xviii) Possession of Licenses and Permits......................... 10
(xix) Title to Property.......................................... 10
(xx) Compliance with Cuba Act................................... 11
(xxi) Investment Company Act..................................... 11
(xxii) Environmental Laws......................................... 11
(xxiii) Registration Rights........................................ 12
(b) Officer's Certificates........................................... 12
SECTION 2. Sale and Delivery to Underwriters; Closing................. 12
(a) Initial Securities............................................... 12
(b) International Option Securities.................................. 12
(c) Payment.......................................................... 13
(d) Denominations; Registration...................................... 14
SECTION 3. Covenants of the Company and Lincoln....................... 14
(a) Compliance with Securities Regulations and Commission Requests... 14
(b) Filing of Amendments............................................. 15
(c) Delivery of Registration Statements.............................. 15
(d) Delivery of Prospectuses......................................... 15
(e) Continued Compliance with Securities Laws........................ 15
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(f) Blue Sky Qualifications......................................... 16
(g) Rule 158........................................................ 16
(h) Use of Proceeds................................................. 17
(i) Listing......................................................... 17
(j) Restriction on Sale of Securities............................... 17
(k) Reporting Requirements.......................................... 17
(l) Rule 463........................................................ 17
SECTION 4. Payment of Expenses....................................... 18
(a) Expenses........................................................ 18
(b) Termination of Agreement........................................ 18
SECTION 5. Conditions of International Managers' Obligations......... 19
(a) Effectiveness of Registration Statement......................... 19
(b) Opinions of Counsel for Company................................. 19
(c) Opinion of Counsel for International Managers................... 20
(d) Officers' Certificate........................................... 20
(e) Accountant's Comfort Letter..................................... 20
(f) Bring-down Comfort Letter....................................... 21
(g) Approval of Listing............................................. 21
(h) No Objection.................................................... 21
(i) Lock-up Agreements.............................................. 21
(j) Completion of Recapitalization.................................. 21
(k) Purchase of Initial U.S. Securities............................. 21
(l) Additional Documents............................................ 21
(m) Conditions to Purchase of International
Option Securities............................................... 21
(n) Termination of Agreement........................................ 22
SECTION 6. Indemnification........................................... 23
(a) Indemnification of International Managers....................... 23
(b) Indemnification of Company, Directors and Officers.............. 24
(c) Actions against Parties; Notification........................... 24
(d) Settlement without Consent if Failure to Reimburse.............. 25
SECTION 7. Contribution.............................................. 25
SECTION 8. Representations, Warranties and Agreements
to Survive Delivery....................................... 27
SECTION 9. Termination of Agreement.................................. 27
(a) Termination; General............................................ 27
(b) Liabilities..................................................... 28
SECTION 10. Default by One or More of the International
Managers.................................................. 28
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SECTION 11. Notices................................................... 29
SECTION 12. Parties................................................... 29
SECTION 13. GOVERNING LAW AND TIME.................................... 29
SECTION 14. Effect of Headings........................................ 29
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American States Financial Corporation
2,000,000 Shares of Common Stock
(No Par Value)
PURCHASE AGREEMENT
May __, 1996
MERRILL LYNCH INTERNATIONAL
Goldman Sachs International
as Lead Managers of the several International Managers
c/o Merrill Lynch International
Ropemaker Place
25 Ropemaker Street
London EC2Y 9LY
England
Ladies and Gentlemen:
Each of American States Financial Corporation, an Indiana corporation (the
"Company"), and Lincoln National Corporation, an Indiana corporation
("Lincoln"), confirms its agreement with Merrill Lynch International ("Merrill
Lynch"), Goldman Sachs International ("Goldman Sachs"), and each of the other
underwriters named in Schedule A hereto (collectively, the "International
Managers", which term shall also include any underwriter substituted as
hereinafter provided in Section 10 hereof), for whom Merrill Lynch and Goldman
Sachs are acting as representatives (in such capacity, the "Lead Managers"),
with respect to the issue and sale by the Company and the purchase by the
International Managers, acting severally and not jointly, of the respective
numbers of shares of Common Stock, no par value, of the Company ("Common
Stock") set forth in said Schedule A, and with respect to the grant by the
Company to the International Managers, acting severally and not jointly, of the
option described in Section 2(b) hereof to purchase all or any part of 300,000
additional shares of Common Stock to cover over-allotments, if any. The
aforesaid 2,000,000 shares of Common Stock (the "Initial International
Securities") to be purchased by the International Managers and all or any part
of the 300,000 shares of Common Stock subject to the option described in
Section 2(b) hereof (the "International Option Securities") are hereinafter
called, collectively, the "International Securities."
It is understood that the Company is concurrently entering into an
agreement dated the date hereof (the "U.S.
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Purchase Agreement") providing for the offering by the Company of an aggregate
of 8,000,000 shares of Common Stock (the "Initial U.S. Securities") through
arrangements with certain underwriters in the United States and Canada (the
"U.S. Underwriters") for which Merrill Lynch, Pierce, Fenner & Smith
Incorporated and Goldman, Sachs & Co. are acting as representatives (the "U.S.
Representatives"), and the grant by the Company to the U.S. Underwriters, acting
severally and not jointly, of an option to purchase all or any part of the U.S.
Underwriters' pro rata portion of up to 1,200,000 additional shares of Common
Stock solely to cover over-allotments, if any (the "U.S. Option Securities" and,
together with the International Option Securities, the "Option Securities").
The Initial U.S. Securities and U.S. Option Securities are collectively called
the "U.S. Securities." It is understood that the Company is not obligated to
sell and the International Managers are not obligated to purchase, any Initial
International Securities unless all of the Initial U.S. Securities are
contemporaneously purchased by the U.S. Underwriters.
The International Managers and the U.S. Underwriters are hereinafter
collectively called the "Underwriters", the Initial International Securities
and the Initial U.S. Securities are hereinafter collectively called the
"Initial Securities," and the International Securities and the U.S. Securities
are hereinafter called the "Securities."
The Underwriters will concurrently enter into an Intersyndicate Agreement
of even date herewith (the "Intersyndicate Agreement") providing for the
coordination of certain transactions among the Underwriters under the direction
of Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (in
such capacity, the "Global Coordinator").
Each of the Company and Lincoln understands that the International
Managers propose to make a public offering of the International Securities as
soon as the Lead Managers deem advisable after this Agreement has been executed
and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333 - 2434) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in
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accordance with the provisions of Rule 434 and Rule 424(b). Two forms of
prospectus are to be used in connection with the offering and sale of the
Securities: one relating to the International Securities (the "Form of
International Prospectus") and one relating to the U.S. Securities (the "Form of
U.S. Prospectus"). The Form of International Prospectus is identical to the
Form of U.S. Prospectus except for the front and back cover pages and the
information under the caption "Underwriting." The information included in any
such prospectus or in any such Term Sheet, as the case may be, that was omitted
from such registration statement at the time it became effective but that is
deemed to be part of such registration statement at the time it became effective
(a) pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A
Information" or (b) pursuant to paragraph (d) of Rule 434 is referred to as
"Rule 434 Information." Each Form of International Prospectus and Form of U.S.
Prospectus used before such registration statement became effective, and any
prospectus that omitted, as applicable, the Rule 430A Information or the Rule
434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, is herein called a "preliminary
prospectus." Such registration statement, including the exhibits and any
schedules, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulation is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final Form of
International Prospectus and Form of U.S. Prospectus in the forms first
furnished to the Underwriters for use in connection with the offering of the
Securities are herein called the "International Prospectus" and the "U.S.
Prospectus," respectively, and collectively, the "Prospectuses." If Rule 434 is
relied on, the terms "International Prospectus" and "U.S. Prospectus" shall
refer to the preliminary International Prospectus dated ________, 1996 and the
preliminary U.S. Prospectus dated _________, 1996, respectively, each together
with the applicable Term Sheet and all references in this Agreement to the date
of such Prospectuses shall mean the date of the applicable Term Sheet. For
purposes of this Agreement, all references to the Registration Statement, any
preliminary prospectus, the International Prospectus, the U.S. Prospectus or any
Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("EDGAR").
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company and Lincoln. Each of
the Company and Lincoln, jointly and severally,
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represents and warrants to each International Manager as of the date hereof, as
of the Closing Time referred to in Section 2(c) hereof, and as of each Date of
Delivery (if any) referred to in Section 2(b) hereof, and agrees with each
International Manager as follows:
(i) Compliance with Registration Requirements. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b)
Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to
the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any International Option
Securities are purchased, at the Date of Delivery), the Registration
Statement, the Rule 462(b) Registration Statement and any amendments and
supplements thereto complied and will comply in all material respects
with the requirements of the 1933 Act and the 1933 Act Regulations and
did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading. Neither of the
Prospectuses nor any amendments or supplements thereto, at the time of
filing thereof with the Commission, included or will include an untrue
statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading. If Rule
434 is used, the Company will comply with the requirements of Rule 434.
The representations and warranties in this subsection shall not apply to
statements in or omissions from the Registration Statement or
Prospectuses made in reliance upon and in conformity with information
furnished to the Company in writing by any International Manager through
Merrill Lynch expressly for use in the Registration Statement or the
Prospectuses.
Each preliminary prospectus and the Prospectuses filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when
so filed in all material respects with the 1933 Act Regulations and, if
applicable, each preliminary prospectus and the Prospectuses delivered to
the Underwriters for use in connection with
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this offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(ii) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Registration
Statement are independent public accountants as required by the 1933 Act
and the 1933 Act Regulations.
(iii) Financial Statements. The financial statements included in
the Registration Statement and the Prospectuses, together with the
related schedules and notes, present fairly the financial position of the
Company and its consolidated subsidiaries at the dates indicated and the
statements of income, shareholder's equity and cash flows of the Company
and its consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved. The supporting schedules, if any,
included in the Registration Statement present fairly in accordance with
GAAP the information required to be stated therein. The selected
financial data and the summary financial information included in the
Prospectuses present fairly the information as shown therein and have
been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The pro forma
financial statements and the related notes thereto included in the
Registration Statement and the Prospectuses present fairly the
information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial
statements and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are
reasonable and the adjustments used therein are appropriate to give
effect to the transactions and circumstances referred to therein.
(iv) Statutory Financial Statements. The statutory financial
statements of American States Insurance Company, a wholly-owned subsidiary
of the Company ("ASI") and its subsidiaries, from which certain ratios and
other statistical data contained in the Registration Statement have been
derived, have for each relevant period been prepared in accordance with
accounting practices prescribed or permitted by the National Association
of Insurance Commissioners and the Indiana Department of Insurance or
other applicable regulatory authority, and such accounting practices have
been applied on a consistent basis throughout the periods involved, except
as disclosed therein.
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(v) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectuses, except as otherwise stated therein, (A) there has been
no material adverse change in the condition, financial or otherwise, or
in the earnings, business affairs or business prospects of the Company
and its subsidiaries considered as one enterprise (a "Material Adverse
Effect"), whether or not arising in the ordinary course of business, (B)
there have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries considered
as one enterprise, other than as described in the Registration Statement
and the Prospectuses, and (C) except for the dividends described in the
Registration Statement and the Prospectuses, there has been no dividend
or distribution of any kind declared, paid or made by the Company on any
class of its capital stock.
(vi) Valid Existence of the Company. The Company has been duly
organized and is validly existing as a corporation under the laws of the
State of Indiana and has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each other jurisdiction in
which such qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing would not result in a
Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each "significant subsidiary"
of the Company (as such term is defined in Rule 1-02 of Regulation S-X)
(each a "Subsidiary" and, collectively, the "Subsidiaries") has been duly
organized and is validly existing as a corporation in good standing if the
relevant jurisdiction has a concept of "good standing" under the laws of
the jurisdiction of its incorporation, has corporate power and authority
to own, lease and operate its properties and to conduct its business as
described in the Prospectuses and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except
where the failure so to qualify or to be in good standing would not result
in a Material Adverse Effect; all of the issued and outstanding capital
stock of each such subsidiary has been duly authorized and validly issued,
is fully paid and non-assessable and is owned by the Company, directly or
through
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subsidiaries, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity; none of the outstanding shares of
capital stock of the Subsidiaries was issued in violation of the
preemptive or similar rights arising by operation of law, or under the
charter or by-laws of any subsidiary or under any agreement to which the
Company or any subsidiary is a party. The only subsidiaries of the
Company are the subsidiaries listed on Exhibit 21 to the Registration
Statement.
(viii) Valid Existence of Lincoln. Lincoln has been duly organized
and is validly existing as a corporation under the laws of the State of
Indiana and has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the
Prospectuses and to enter into and perform its obligations under this
Agreement.
(ix) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectuses in the
column entitled "Pro Forma" under the caption "Capitalization" (except
for subsequent issuances, if any, pursuant to this Agreement, pursuant to
employee benefit plans referred to in the Prospectuses or pursuant to the
exercise of convertible securities or options referred to in the
Prospectuses). The shares of issued and outstanding capital stock have
been duly authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights
arising by operation of law, under the charter or by-laws of the Company,
under any agreement to which the Company or any of its subsidiaries is a
party or otherwise.
(x) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by each of the Company and Lincoln.
(xi) Authorization and Description of Securities. The Securities
to be purchased by the International Managers and the U.S. Underwriters
have been duly authorized for issuance and sale to the International
Managers pursuant to this Agreement and the U.S. Underwriters pursuant to
the U.S. Purchase Agreement, respectively, and, when issued and delivered
by the Company pursuant to this Agreement and the U.S. Purchase
Agreement, respectively, against payment of the consideration set forth
herein and in the U.S. Purchase Agreement, respectively, will be validly
issued and fully paid and non-assessable; the Common Stock conforms to
all statements relating thereto contained in the Prospectuses and such
description conforms to the rights set forth in the
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instruments defining the same; no holder of the Securities will be subject
to personal liability be reason of being such a holder; and the issuance
of the Securities is not subject to preemptive or other similar rights
arising by operation of law, under the charter and by-laws of the Company,
under any agreement to which the Company or any of its subsidiaries is a
party.
(xii) Absence of Defaults and Conflicts. Neither the Company nor
any of its subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or
any of them may be bound, or to which any of the property or assets of the
Company or any subsidiary is subject (collectively, "Agreements and
Instruments") except for such defaults that would not result in a Material
Adverse Effect; and the execution, delivery and performance of this
Agreement and the U.S. Purchase Agreement and the consummation of the
transactions contemplated herein and in the Registration Statement
(including the issuance and sale of the Securities, the Recapitalization
and the use of the proceeds from the sale of the Securities as described
in the Prospectuses under the caption "Use of Proceeds") and compliance by
the Company with its obligations hereunder have been duly authorized by
all necessary corporate action and do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any subsidiary
pursuant to, the Agreements and Instruments except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect, nor will such action result in any
violation of the provisions of the charter or by-laws of the Company or
any Subsidiary or any applicable law, statute, rule, regulation,
judgement, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
the Company or any subsidiary or any of their assets or properties. As
used herein, a "Repayment Event" means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (or
any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
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(xiii) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any subsidiary exists or, to the knowledge of
the Company, is imminent, and the Company is not aware of any existing or
imminent labor disturbance by the employees of any of its or any
subsidiary's principal suppliers, agents, customers or contractors,
which, in either case, may reasonably be expected to result in a Material
Adverse Effect.
(xiv) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation before or by any court or
governmental agency or body, domestic or foreign, now pending, or, to the
knowledge of the Company, threatened, against or affecting the Company or
any subsidiary, which is required to be disclosed in the Registration
Statement (other than as disclosed therein), or which might reasonably be
expected to result in a Material Adverse Effect, or which might
reasonably be expected to materially and adversely affect the properties
or assets thereof or the consummation of this Agreement or the U.S.
Purchase Agreement or the performance by either the Company or Lincoln of
its obligations hereunder or under the U.S. Purchase Agreement; the
aggregate of all pending legal or governmental proceedings to which the
Company or any subsidiary is a party or of which any of their respective
property or assets is the subject which are not described in the
Registration Statement, including ordinary routine litigation incidental
to the business, could not reasonably be expected to result in a Material
Adverse Effect.
(xv) Accuracy of Exhibits. There are no contracts or documents
which are required to be described in the Registration Statement or the
Prospectuses or to be filed as exhibits thereto which have not been so
described and filed as required.
(xvi) Possession of Intellectual Property. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks, trade names or other intellectual property
(collectively, "Intellectual Property") necessary to carry on the
business now operated by them, and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect
to any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if
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the subject of any unfavorable decision, ruling or finding) or invalidity
or inadequacy, singly or in the aggregate, would result in a Material
Adverse Effect.
(xvii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required for the performance by the Company and Lincoln
of its obligations hereunder in connection with the offering, issuance or
sale of the Securities hereunder or the consummation of the transactions
contemplated by this Agreement and the U.S. Purchase Agreement, except
such as have been already obtained or as may be required under the 1933
Act or the 1933 Act Regulations or state securities laws.
(xviii) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them, including (without
limitation) insurance licenses from the insurance departments in the
various states where the Company's subsidiaries write insurance
("Insurance Licenses"); the Company and its subsidiaries are in compliance
with the terms and conditions of all such Governmental Licenses, except
where the failure so to comply would not, singly or in the aggregate, have
a Material Adverse Effect; all of the Governmental Licenses are valid and
in full force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force
and effect would not have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
(xix) Title to Property. The Company and its subsidiaries have
good and marketable title to all real property owned by the Company and
its subsidiaries and good title to all other properties owned by them, in
each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the Prospectuses or (b) do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by
the Company or any of its subsidiaries; and all of the leases and
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subleases material to the business of the Company and its subsidiaries,
considered as one enterprise, and under which the Company or any of its
subsidiaries holds properties described in the Prospectuses, are in full
force and effect, and neither the Company nor any subsidiary has any
notice of any material claim of any sort that has been asserted by anyone
adverse to the rights of the Company or any subsidiary under any of the
leases or subleases mentioned above, or affecting or questioning the
rights as such the Company or such subsidiary of the continued possession
of the leases or subleased premises under any such lease or sublease.
(xx) Compliance with Cuba Act. The Company has complied with, and
is and will be in compliance with, the provisions of that certain Florida
act relating to disclosure of doing business with Cuba, codified as
Section 517.075 of the Florida statutes, and the rules and regulations
thereunder or is exempt therefrom.
(xxi) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectuses will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "1940 Act").
(xxii) Environmental Laws. Except as described in the Registration
Statement and except such violations as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A) neither the Company
nor any of its subsidiaries is in violation of any federal, state, local
or foreign statute, law, rule, regulation, ordinance, code, policy or rule
of common law and any judicial or administrative interpretation thereof
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemical, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials (collectively, "Environmental Laws"), (B) the Company
and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in
compliance with their requirements, (C) there are no pending or
threatened
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administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any environmental Law against the
Company or any of its subsidiaries and (D) there are no events or
circumstances that might reasonably be expected to form the basis of an
order for clean-up or remediation, or an action, suit or proceeding by any
private party or governmental body or agency, against or affecting the
Company or any of its subsidiaries relating to any Hazardous Materials or
the violation of any Environmental Laws.
(xxiii) Registration Rights. Except as described in the
Registration Statement, there are no persons with registration or other
similar rights to have any securities registered pursuant to the
Registration Statement or otherwise registered by the Company under the
1933 Act.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any subsidiary and delivered to the Global Coordinator, the Lead
Managers or to counsel for the International Managers, shall be deemed a
representation and warranty by the Company and Lincoln to each International
Manager as to the matters covered thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to each International Manager, severally and
not jointly, and each International Manager, severally and not jointly, agrees
to purchase from the Company, at the price per share set forth in Schedule B,
the number of Initial International Securities set forth in Schedule A opposite
the name of such International Manager, plus any additional number of Initial
International Securities which such International Manager may become obligated
to purchase pursuant to the provisions of Section 10 hereof.
(b) International Option Securities. In addition, on the basis of the
representations and warranties herein contained and subject to the terms and
conditions herein set forth, the Company hereby grants an option to the
International Managers, severally and not jointly, to purchase up to an
additional 300,000 shares of Common Stock at the price per share set forth in
Schedule B, less an amount per share equal to any dividends or distributions
declared by the Company and payable on the Initial International Securities but
not payable on the International Option Securities. The option hereby granted
will expire 30 days after the date hereof and may be exercised in whole or in
part from time to time only for the purpose of covering over-allotments which
may be made in connection with the offering and
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distribution of the Initial International Securities upon notice by the Global
Coordinator to the Company setting forth the number of International Option
Securities as to which the several International Managers are then exercising
the option and the time and date of payment and delivery for such International
Option Securities. Any such time and date of delivery (a "Date of Delivery")
shall be determined by the Global Coordinator, but shall not be later than seven
full business days after the exercise of said option, nor in any event prior to
the Closing Time, as hereinafter defined. If the option is exercised as to all
or any portion of the International Option Securities, each of the International
Managers, acting severally and not jointly, will purchase that proportion of the
total number of International Option Securities then being purchased which the
number of Initial International Securities set forth in Schedule A opposite the
name of such International Manager bears to the total number of Initial
International Securities, subject in each case to such adjustments as the Global
Coordinator in its discretion shall make to eliminate any sales or purchases of
fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial International Securities shall be made at the
office of Sidley & Austin, One First National Plaza, Chicago, Illinois 60603,
or at such other place as shall be agreed upon by the Global Coordinator and the
Company, at 10:00 A.M. (Eastern Time) on the third (fourth, if the pricing
occurs after 4:30 P.M. (Eastern Time) on any given day) business day after the
date hereof (unless postponed in accordance with the provisions of Section 10),
or such other time not later than ten business days after such date as shall be
agreed upon by the Global Coordinator and the Company (such time and date of
payment and delivery being herein called "Closing Time").
In addition, in the event that any or all of the International Option
Securities are purchased by the International Managers, payment of the purchase
price for, and delivery of certificates for, such International Option
Securities shall be made at the above-mentioned offices, or at such other place
as shall be agreed upon by the Global Coordinator and the Company, on each Date
of Delivery as specified in the notice from the Global Coordinator to the
Company. Payment shall be made to the Company by certified or official bank
check or checks drawn in Chicago Clearing House funds or similar next day funds
payable to the order of the Company, against delivery to the Lead Managers for
the respective accounts of the International Managers of certificates for the
International Securities to be purchased by them. It is understood that each
International Manager has authorized the Lead Managers, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for,
the Initial
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International Securities and the International Option Securities, if any, which
it has agreed to purchase. Merrill Lynch, individually and not as
representative of the International Managers, may (but shall not be obligated
to) make payment of the purchase price for the Initial International Securities
or the International Option Securities, if any, to be purchased by any
International Manager whose check has not been received by the Closing Time or
the relevant Date of Delivery, as the case may be, but such payment shall not
relieve such International Manager from its obligations hereunder.
(d) Denominations; Registration. Certificates for the Initial
International Securities and the International Option Securities, if any, shall
be in such denominations and registered in such names as the Lead Managers may
request in writing at least one full business day before the Closing Time or
the relevant Date of Delivery, as the case may be. The certificates for the
Initial International Securities and the International Option Securities, if
any, will be made available for examination and packaging by the Lead Managers
in the City of New York not later than 10:00 A.M. (Eastern Time) on the
business day prior to the Closing Time or the relevant Date of Delivery, as the
case may be.
SECTION 3. Covenants of the Company and Lincoln. The Company covenants,
and with respect to Section 3(j) Lincoln covenants, with each International
Managers as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule
430A and will notify the Global Coordinator immediately, and confirm the notice
in writing, (i) when any post-effective amendment to the Registration
Statement, shall become effective, or any supplement to the Prospectuses or any
amended Prospectuses shall have been filed, (ii) of the receipt of any comments
from the Commission, (iii) of any request by the Commission for any amendment
to the Registration Statement or any amendment or supplement to the
Prospectuses or for additional information, and (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening of
any proceedings for any of such purposes. The Company will promptly effect the
filings necessary pursuant to Rule 424(b) and will take such steps as it deems
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will
make every reasonable effort to prevent the
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issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Global Coordinator
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectuses
will furnish the Global Coordinator with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file or use any such document to which the Global Coordinator
or counsel for the International Managers shall object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Lead Managers and counsel for the International Managers,
without charge, signed copies of the Registration Statement as originally filed
and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Lead Managers, without
charge, a conformed copy of the Registration Statement as originally filed and
of each amendment thereto (without exhibits) for each of the International
Managers, If applicable, the copies of the Registration Statement and each
amendment thereto furnished to the International Managers will be identical to
the electronically transmitted copies thereof filed with the Commission pursuant
to EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
International Manager, without charge, as many copies of each preliminary
prospectus as such International Manager reasonably requested, and the Company
hereby consents to the use of such copies for purposes permitted by the 1933
Act. The Company will furnish to each International Manager, without charge,
during the period when the International Prospectus is required to be delivered
under the 1933 Act or the Securities Exchange Act of 1934 (the "1934 Act"),
such number of copies of the International Prospectus (as amended or
supplemented) as such International Underwriter may reasonably request. If
applicable, the International Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to EDGAR, except
to the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion
of the distribution of the Securities as contemplated in this Agreement and in
the Prospectuses. If at
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any time when a prospectus is required by the 1933 Act to be delivered in
connection with sales of the Securities, any event shall occur or condition
shall exist as a result of which it is necessary, in the opinion of counsel for
the International Managers or for the Company, to amend the Registration
Statement or amend or supplement any Prospectus in order that the Prospectuses
will not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading
in light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement any
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectuses comply with such requirements, and the Company will furnish to the
International Managers such number of copies of such amendment or supplement as
the International Managers may reasonably request.
(f) Blue Sky Qualifications. The Company will use all reasonable efforts,
in cooperation with the International Managers, to qualify the Securities for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Global Coordinator may designate and
to maintain such qualifications in effect for a period of not less than one year
from the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary to make generally available to its security holders
as soon as practicable an earnings statement for the purposes of, and to
provide the benefits contemplated by, the last paragraph of Section 11(a) of
the 1933 Act.
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(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the Prospectuses
under "Use of Proceeds."
(i) Listing. The Company will use its all reasonable efforts to effect
the listing of the Common Stock on the New York Stock Exchange.
(j) Restriction on Sale of Securities. During a period of 120 days from
the date of the Prospectuses, neither the Company nor Lincoln will, without the
prior written consent of Merrill Lynch, (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase or otherwise transfer or
dispose of, directly or indirectly, any share of Common Stock or any securities
convertible into or exercisable or exchangeable for Common Stock or file any
registration statement under the 1933 Act with respect to any of the foregoing
or (ii) enter into any swap or any other agreement or any transaction that
transfers, in whole or in part, directly or indirectly, the economic consequence
of ownership of the Common Stock, whether any such swap or transaction described
in clause (i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash or otherwise. The foregoing sentence shall not apply
to (A) the Securities to be sold hereunder, or (B) any options to purchase
Common Stock granted pursuant to existing employee benefit plans of the Company
referred to in the Prospectuses.
(k) Reporting Requirements. The Company, during the period when the
Prospectuses are required to be delivered under the 1933 Act or the 1934 Act,
will file all documents required to be filed with the Commission pursuant to
the 1934 Act within the time periods required by the 1934 Act and the rules and
regulations of the Commission thereunder (the "1934 Act Regulations").
(l) Rule 463. The Company will file with the Commission such reports on
Form SR as may be required pursuant to Rule 463 of the 1933 Act Regulations.
(m) Compliance with NASD Rules. The Company hereby agrees that it will
ensure that the Reserved Securities will be restricted as required by the NASD
or the NASD rules from sale, transfer, assignment, pledge or hypothecation for
a period of three months following the date of the effectiveness of the
Registration Statement. The Underwriters will notify the Company as to which
persons will need to be so restricted. At the request of the Underwriters, the
Company will direct the transfer agent to place a stop transfer restriction
upon such securities for such period of time. Should the Company release, or
seek to release, from such restrictions any Reserved Securities, the Company
agrees to reimburse the International Managers for any
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reasonable expenses including, without limitation, legal expenses they incur
directly in connection with such release.
SECTION 4. Payment of Expenses. (a) Expenses. The Company will pay all
expenses incident to the performance of its obligations under this Agreement,
including (i) the preparation, printing and filing of the Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriters of this Agreement, any Agreement among Underwriters and such other
documents as may be required in connection with the offering, purchase, sale and
delivery of the Securities, (iii) the preparation, issuance and delivery of the
certificates for the International Securities to the International Managers,
including any stock or other transfer taxes or duties payable upon the sale of
the U.S. Securities to the U.S. Underwriters and the transfer of the U.S.
Securities between the U.S. Underwriters and the International Managers, (iv)
the fees and disbursements of the Company's counsel, accountants and other
advisors, (v) the qualification of the International Securities under securities
laws in accordance with the provisions of Section 3(f) hereof, including filing
fees and the reasonable fees and disbursements of counsel for the International
Managers in connection therewith and in connection with the preparation of the
Blue Sky Survey and any supplement thereto, (vi) the printing and delivery to
the International Managers of copies of each preliminary prospectus, any Term
Sheets and of the International Prospectus and any amendments or supplements
thereto, (vii) the preparation, printing and delivery to the International
Managers of copies of the Blue Sky Survey and any supplement thereto, (viii) the
fees and expenses of any transfer agent or registrar for the Securities, (ix)
the filing fees incident to, and the reasonable fees and disbursements of
counsel to the International Managers in connection with, the review by the
National Association of Securities Dealers, Inc. (the "NASD") of the terms of
the sale of the Securities, (x) the fees and expenses incurred in connection
with the listing of the Securities on the New York Stock Exchange and (xi) all
reasonable costs and expenses of the International Managers, including the fees
and disbursements of counsel for the International Managers, in connection with
matters related to the Reserved Securities which are designated by the Company
for sale to employees and others having a business relationship with the
Company.
(b) Termination of Agreement. If this Agreement is terminated by the
Global Coordinator in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company shall reimburse the International Managers for all
of their reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the International Managers.
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SECTION 5. Conditions of International Managers' Obligations. The
obligations of the several International Managers hereunder are subject to the
accuracy of the representations and warranties of each of the Company and
Lincoln contained in Section 1 hereof or in certificates of any officer of the
Company or any Subsidiary delivered pursuant to the provisions hereof in all
material respects (except that if any such representations or warranties are
qualified by materiality, the obligations of the several International Managers
hereunder are subject to the accuracy of all such representations and
warranties in all respects), to the performance by each of the Company and
Lincoln of their covenants and other obligations hereunder, and to the
following further conditions:
(a) Effectiveness of Registration Statement. The Registration Statement,
including any Rule 462(b) Registration Statement, has become effective on the
date hereof and at Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any request
on the part of the Commission for additional information shall have been
complied with to the reasonable satisfaction of counsel to the International
Managers. A prospectus containing the Rule 430A Information shall have been
filed with the Commission in accordance with Rule 424(b) (or a post-effective
amendment providing such information shall have been filed and declared
effective in accordance with the requirements of Rule 430A) or, if the Company
has elected to rely upon Rule 434, a Term Sheet shall have been filed with the
Commission in accordance with Rule 424(b).
(b) Opinions of Counsel for Company. At Closing Time the Lead Managers
shall have received the favorable opinions, dated as of Closing Time, of each
of Barnes & Thornburg, Indianapolis, Indiana, counsel to the Company ("Barnes &
Thornburg"), Sommer & Barnard, Indianapolis, Indiana, counsel to the Company
(Sommer & Barnard") and Thomas H. Ober, Esq., Vice President, Secretary and
General Counsel of the Company ("Ober"), in form and substance satisfactory to
counsel for the International Managers, together with signed or reproduced
copies of such letter for each of the other International Managers to the
effect set forth in Exhibits A-1, A-2 and A-3, respectively, hereto and to such
further effect as counsel to the International Managers may reasonably request.
In giving such opinions each of such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the law of the State of
Indiana and the federal law of the United States, upon opinions of counsel
satisfactory to the Lead Managers. Such counsel may also state that, insofar
as such opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of public officials and, in the case of each of
Barnes & Thornburg and Sommer & Barnard, upon
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certificates of officers of the Company, its subsidiaries and Lincoln.
(c) Opinion of Counsel for International Managers. At Closing Time the
Lead Managers shall have received the favorable opinion, dated as of Closing
Time, of Sidley & Austin, Chicago, Illinois, counsel for the International
Managers ("Sidley & Austin"), together with signed or reproduced copies of such
letter for each of the other International Managers with respect to the matters
set forth in (i)(as to the Company only), (v), (vi) (solely as to preemptive or
other similar rights arising by operation of law or under the charter or by-laws
of the Company), (viii) to (x), inclusive, (xiv) (solely as to the information
in the Prospectuses under "Description of Capital Stock--Common Stock") and the
penultimate paragraph of Exhibit A-1 hereto. In giving such opinion such
counsel may rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of Illinois and the federal law of the United States
upon the opinions of counsel satisfactory to the Lead Managers. Such counsel
may also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company, its subsidiaries and Lincoln and certificates of public officials.
(d) Officers' Certificate. At Closing Time there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the Prospectuses, any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise,
whether or not arising in the ordinary course of business, and the Lead Managers
shall have received a certificate of the Chairman, President or a Vice President
of the Company and of the chief financial or chief accounting officer of the
Company, dated as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in Section 1(a)
hereof are true and correct with the same force and effect as though expressly
made at and as of Closing Time, (iii) each of the Company and Lincoln has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been initiated or threatened by the
Commission.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Lead Managers shall have received from Ernst & Young LLP ("Ernst
& Young") a letter dated such date, in form and substance satisfactory to the
Lead Managers, together with signed or reproduced copies of such letter for
each of the other International Managers containing statements and information
of the type ordinarily included in
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accountants' "comfort letters" to underwriters with respect to the financial
statements and certain financial information contained in the Registration
Statement and the Prospectuses.
(f) Bring-down Comfort Letter. At Closing Time the Lead Managers shall
have received from Ernst & Young a letter, dated as of Closing Time, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to subsection (e) of this Section, except that the specified date referred to
shall be a date not more than three business days prior to Closing Time.
(g) Approval of Listing. At the Closing Time the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(h) No Objection. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(i) Lock-up Agreements. At the date of this Agreement, the Lead Managers
shall have received an agreement substantially in the form of Exhibit B hereto
signed by the persons listed on Schedule C hereto.
(j) Completion of Recapitalization. The Recapitalization shall have
occurred in the manner described in the Registration Statement and the
Prospectuses.
(k) Purchase of Initial U.S. Securities. Contemporaneously with the
purchase by the International Managers of the Initial International Securities
under this Agreement, the U.S. Underwriters shall have purchased the Initial
U.S. Securities under the U.S. Purchase Agreement.
(l) Additional Documents. At Closing Time and at each Date of Delivery
counsel for the International Managers shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Lead Managers and counsel for the
International Managers.
(m) Conditions to Purchase of International Option Securities. In the
event that the International Managers exercised their option provided in
Section 2(b) hereof to purchase all or any portion of the International Option
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Securities, the representations and warranties of the Company contained herein
and the statements in any certificates furnished by the Company hereunder shall
be true and correct as of each Date of Delivery and, at the relevant Date of
Delivery, the Lead Managers shall have received:
(i) Officers' Certificate. A certificate, dated such Date of
Delivery, of the Chairman, President or a Vice President of the Company
and of the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant to
Section 5(d) hereof remains true and correct as of such Date of Delivery.
(ii) Opinion of Counsel for Company. The favorable opinions of each
of Barnes & Thornburg, Sommer & Barnard and Ober, each in form and
substance satisfactory to counsel for the International Managers, dated
such Date of Delivery, relating to the International Option Securities to
be purchased on such Date of Delivery and otherwise to the same effect as
the opinions required by Section 5(b) hereof.
(iii) Opinion of Counsel for International Managers. The favorable
opinion of Sidley & Austin, dated such Date of Delivery, relating to the
International Option Securities to be purchased on such Date of Delivery
and otherwise to the same effect as the opinion required by Section 5(c)
hereof.
(iv) Bring-down Comfort Letter. A letter from Ernst & Young, in
form and substance satisfactory to the Lead Managers and dated such Date
of Delivery, substantially in the same form and substance as the letter
furnished to the Lead Managers pursuant to Section 5(f) hereof, except
that the "specified date" on the letter furnished pursuant to this
paragraph shall be a date not more than five days prior to such Date of
Delivery.
(n) Termination of Agreement. If any condition specified in this Section
shall not have been fulfilled when and as required to be fulfilled, this
Agreement, or, in the case of any condition to the purchase of International
Option Securities, on a Date of Delivery which is after the Closing Time, the
obligations of the several International Managers to purchase the relevant
International Option Securities, may be terminated by the Lead Managers by
notice to the Company at any time at or prior to Closing Time or such Date of
Delivery as the case may be, and such termination shall be without liability of
any party to any other party except as provided in Section 4 and except that
Sections 1, 6 and 7 shall survive any such termination and remain in full force
and effect.
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SECTION 6. Indemnification.
(a) Indemnification of International Managers. Each of the Company and
Lincoln, jointly and severally, agrees to indemnify and hold harmless each
International Manager and each person, if any, who controls any International
Manager within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or the Prospectuses (or any
amendment or supplement thereto), or the omission or alleged omission
therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of the failure of eligible employees
and persons having business relationships with the Company to pay for and
accept delivery of Reserved Securities which were subject to a properly
confirmed agreement to purchase;
(iii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission; provided that (subject to
Section 6(d) below) any such settlement is effected with the written
consent of the Company; and
(iv) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by Merrill Lynch),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement
or omission, to the extent that any such expense is not paid under (i),
(ii) or (iii) above;
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provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
International Manager through Merrill Lynch expressly for use in the
Registration Statement (or any amendment thereto), including the 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each
International Manager severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement, and each person, if any, who controls the Company within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Section, as incurred, but only with respect to untrue
statements or omissions, or alleged untrue statements or omissions, made in the
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto) in
reliance upon and in conformity with written information furnished to the
Company by such International Manager through Merrill Lynch expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectuses (or any amendment or supplement thereto).
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve
such indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this
indemnity agreement. In the case of parties indemnified pursuant to Section
6(a) above, counsel to the indemnified parties shall be selected by Merrill
Lynch, and, in the case of parties indemnified pursuant to Section 6(b) above,
counsel to the indemnified parties shall be selected by the Company. An
indemnifying party may participate at its own expense in the defense of any
such action; provided, however, that counsel to the indemnifying party shall
not (except with the consent of the indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or
24
29
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, capability or a failure to act by or
on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and
Lincoln on the one hand and the International Managers on the other hand from
the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company and Lincoln
on the one hand and of the International Managers on the other hand in
connection with the statements or omissions, or in connection with any failure
of the nature referred to in Section 6(a)(ii)(A) hereof, which resulted in such
losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
25
30
The relative benefits received by the Company and Lincoln on the one hand
and the International Managers on the other hand in connection with the offering
of the International Securities pursuant to this Agreement shall be deemed to be
in the same respective proportions as the total net proceeds from the offering
of the International Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting discount received
by the International Managers, in each case as set forth on the cover of the
International Prospectus, or, if Rule 434 is used, the corresponding location on
the Term Sheet bear to the aggregate initial public offering price of the
International Securities as set forth on such cover.
The relative fault of the Company and Lincoln on the one hand and the
International Managers on the other hand shall be determined by reference to,
among other things, whether any such untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by the International Managers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission or any failure of the nature
referred to in Section 6(a)(ii)(A)hereof.
The Company, Lincoln and the International Managers agree that it would
not be just and equitable if contribution pursuant to this Section 7 were
determined by pro rata allocation (even if the International Managers were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to above
in this Section 7. The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above in
this Section 7 shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission.
Notwithstanding the provisions of this Section 7, no International Manager
shall be required to contribute any amount in excess of the amount by which the
total price at which the International Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such International Manager has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged
omission or any failure of the nature referred to in Section 6(a)(ii)(A)
hereof.
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31
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
International Manager within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act shall have the same rights to contribution as such
International Manager, and each director of the Company, each officer of the
Company who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company.
The International Managers' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the number of Initial International
Securities set forth opposite their respective names in Schedule A hereto and
not joint.
SECTION 8. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any International Manager or controlling
person, or by or on behalf of the Company or Lincoln, and shall survive
delivery of the Securities to the International Managers.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Lead Managers may terminate this Agreement,
by notice to the Company, at any time at or prior to Closing Time (i) if there
has been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the International Prospectus, any
material adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material adverse
change in the financial markets in the United States or the international
financial markets, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the judgment of the
Lead Managers, impracticable to market the Securities or to enforce contracts
for the sale of the Securities, or (iii) if trading in any securities of the
Company has been suspended or limited by the Commission or the New York Stock
Exchange, or if trading generally on the American Stock Exchange or the New
York Stock Exchange or in the Nasdaq National market has been
27
32
suspended or limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal, New York or Indiana
authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that
Sections 1, 6 and 7 shall survive such termination and remain in full force and
effect.
SECTION 10. Default by One or More of the International Managers. If one
or more of the International Managers shall fail at Closing Time or a Date of
Delivery to purchase the International Securities which it or they are
obligated to purchase under this Agreement (the "Defaulted Securities"), the
Lead Managers shall have the right, within 24 hours thereafter, to make
arrangements for one or more of the non-defaulting International Managers, or
any other underwriters, to purchase all, but not less than all, of the
Defaulted Securities in such amounts as may be agreed upon and upon the terms
herein set forth; if, however, the International Managers shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-defaulting
International Managers shall be obligated, severally and not jointly, to
purchase the full amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting obligations of all
non-defaulting International Managers, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
U.S. Underwriters to purchase and of the Company to sell the U.S. Option
Securities to be purchased and sold on such Date of Delivery shall terminate
without liability on the part of any non-defaulting International Managers.
No action taken pursuant to this Section shall relieve any defaulting
International Manager from liability in respect of its default.
In the event of any such default which does not result in a termination of
this Agreement or, in the case of a Date of Delivery which is after the Closing
Time, which does not result in a termination of the obligation of the
International Managers
28
33
to purchase and the Company to sell the relevant International Option
Securities, as the case may be, either the International Managers or the Company
shall have the right to postpone Closing Time or the relevant Date of Delivery,
as the case may be, for a period not exceeding seven days in order to effect any
required changes in the Registration Statement or Prospectuses or in any other
documents or arrangements. As used herein, the term "International Manager"
includes any person substituted for a International Manager under this Section
10.
SECTION 11. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
International Managers shall be directed to the Lead Managers c/o Merrill Lynch
& Co., 5500 Sears Tower, Chicago, Illinois 60606, Attention: David C.
Sherwood, Director, and notices to the Company or Lincoln shall be directed to
the Company at 500 North Meridian Street, Indianapolis, Indiana 46204,
Attention: F. Cedric McCurley.
SECTION 12. Parties. This Agreement shall inure to the benefit of and be
binding upon the International Managers, the Company, Lincoln and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the International Managers, the Company and Lincoln and their respective
successors and the controlling persons and officers and directors referred to
in Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the
International Managers, the Company and Lincoln and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm
or corporation, No purchaser of Securities from any International Manager shall
be deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. Effect of Headings. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
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34
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the International Managers, the Company and Lincoln in accordance with its
terms.
Very truly yours,
AMERICAN STATES FINANCIAL
CORPORATION
By:
___________________________
Name:
Title:
LINCOLN NATIONAL CORPORATION
By:
___________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH INTERNATIONAL
GOLDMAN SACHS INTERNATIONAL
By:
_______________________________
Authorized Signatory
For themselves and as Lead Managers of the other
International Managers named in Schedule A hereto.
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35
SCHEDULE A
Number of
Initial
Name of International Managers Securities
- ------------------------------ ----------
Merrill Lynch International.................
Goldman Sachs International.................
---------
Total....................................... 2,000,000
=========
Sch A-1
36
SCHEDULE B
American States Financial Corporation
2,000,000 Shares of Common Stock
(No Par Value)
1. The initial public offering price per share for the
International Securities, determined as provided in said Section 2,
shall be $__________.
2. The purchase price per share for the International
Securities to be paid by the several International Managers shall
be $__________, being an amount equal to the initial public
offering price set forth above less $__________ per share; provided
that the purchase price per share for any International Option
Securities purchased upon the exercise of the over-allotment option
described in Section 2(b) shall be reduced by an amount per share
equal to any dividends or distributions declared by the Company and
payable on the Initial International Securities but not payable on
the International Option Securities.
Sch B-1
37
SCHEDULE C
[List of persons and entities
subject to lock-up]
Sch C-1
38
EXHIBIT A-1
FORM OF OPINION OF BARNES & THORNBURG
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly organized and is validly existing as a
corporation under the laws of the State of Indiana. Lincoln has been duly
organized and is validly existing as a corporation under the laws of the State
of Indiana.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
Registration Statement and each of the Company and Lincoln has corporate power
and authority to enter into and perform its obligations under the International
Purchase Agreement.
(iii) The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
(iv) The authorized, issued and outstanding capital stock of the Company
is as set forth in the Prospectus in the column entitled "Pro Forma" under the
caption "Capitalization" (except for subsequent issuances, if any, pursuant to
the International Purchase Agreement or pursuant to reservations, agreements,
employee benefit plans or the exercise of convertible securities or options
referred to in the Prospectuses); the shares of issued and outstanding capital
stock have been duly authorized and validly issued and are fully paid and
non-assessable; and none of the outstanding shares of capital stock of the
Company was issued in violation of the preemptive or other similar rights of
any stockholder or warrant-holder of the Company arising by operation of law,
under the charter or by-laws of the Company, under any agreement to which the
Company or any of its subsidiaries is a party or, to the best of our knowledge
and information, otherwise.
(v) The Securities have been duly authorized for issuance and sale to the
International Managers pursuant to the International Purchase Agreement and,
when issued and delivered by the Company pursuant to the International Purchase
Agreement against payment of the consideration set forth in the International
Prospectus, will be validly issued and fully paid and non-assessable.
A-1
39
(vi) The issuance of the Securities is not subject to preemptive or other
similar rights arising by operation of law, under the charter or by-laws of the
Company, under any agreement to which the Company or any of its Subsidiaries is
a party or, to the best of our knowledge and information, otherwise.
(vii) Each Subsidiary has been duly organized and is validly existing as
a corporation in good standing if the relevant jurisdiction has the concept of
"good standing" under the laws of the jurisdiction of its incorporation, has
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Prospectuses; all of the issued and
outstanding capital stock of each Subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and, to the best of our
knowledge and information, is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equity.
(viii) The International Purchase Agreement has been duly authorized,
executed and delivered by the Company and Lincoln.
(ix) The Registration Statement, including any Rule 462(b) Registration
Statement, has been declared effective under the 1933 Act; any required filing
of the Prospectuses pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); and, to the best of our
knowledge and information, no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(x) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectuses and each amendment or supplement to the
Registration Statement and Prospectuses as of their respective effective or
issue dates (other than the financial statements and supporting schedules
included therein, as to which no opinion need be rendered) complied as to form
in all material respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
(xi) If Rule 434 has been relied upon, the Prospectuses were not
"materially different," as such term is used in Rule 434, from the prospectus
included in the Registration Statement at the time it became effective.
(xii) The form of certificate used to evidence the Common Stock complies
in all material respects with all applicable statutory requirements, with any
applicable requirements of the charter and by-laws of the Company and the
requirements of the New York Stock Exchange.
A-2
40
(xiii) To the best of our knowledge, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which the Company or
any Subsidiary is a party, or to which the property of the Company or any
Subsidiary is subject, before or brought by any court or governmental agency or
body, which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and adversely
affect the properties or assets thereof or the consummation of the
International Purchase Agreement or the performance by the Company of its
obligations thereunder or the transactions contemplated by the Registration
Statement;
(xiv) The information in the Prospectuses under "Certain Relationships
and Related Transactions," "Description of Capital Stock" and "Certain Federal
Income Tax Consequences to Non-U.S. Holders" and in the Registration Statement
under item 15, to the extent that it constitutes matters of laws, summaries of
legal matters, the Company's charter and bylaws or legal proceedings, or legal
conclusions, has been reviewed by and is correct in all material respects.
(xv) All descriptions in the Prospectuses of contracts and other
documents to which the Company or its subsidiaries are a party are accurate in
all material respects; to the best of our knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in all material
respects.
(xvi) To the best of our knowledge, neither the Company nor any
Subsidiary is in violation of its charter or by-laws and no default by the
Company or any Subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other agreement
or instrument that is described or referred to in the Registration Statement or
the Prospectuses or filed or incorporated by reference as an exhibit to the
Registration Statement.
(xvii) No filing with, or authorization, approval, consent or order of any
court or governmental authority or agency (other than under the 1933 Act and the
1933 Act Regulations, which have been obtained, or as may be required under the
securities or blue sky laws of the various states, as to which we need express
no opinion) is required in connection with the due authorization, execution and
delivery of the International Purchase Agreement or for the offering, issuance
or sale of the Securities to the Underwriters;
A-3
41
(xviii) The execution, delivery and performance of the International
Purchase Agreement and the consummation of the transactions contemplated in the
International Purchase Agreement and in the Registration Statement (including
the issuance and sale of the Securities and the use of the proceeds from the
sale of the Securities as described in the Prospectuses under the caption "Use
of Proceeds") and compliance by the Company with its obligations under the
International Purchase Agreement will not, whether with or without the giving
of notice or lapse of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined in Section 1(a)(x) of the International
Purchase Agreement) under or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to any contract, indenture, mortgage, deed of trust, loan
or credit agreement, note, lease or any other agreement or instrument, known to
us, to which the Company or any subsidiary is a party or by which it or any of
them may be bound, or to which any of the property or assets of the Company or
any subsidiary is subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not have a Material Adverse Effect),
nor will such action result in any violation of the provisions of the charter
or by-laws of the Company or any subsidiary, or any applicable law, statute,
rule, regulation, judgment, order, writ or decree, known to us of any
government, government instrumentality or court, domestic or foreign, having
jurisdiction over the Company or any subsidiary or any of their respective
properties, assets or operations.
(ixx) To the best of our knowledge and information, there are no persons
with registration or other similar rights to have any securities registered
pursuant to the Registration Statement or otherwise registered by the Company
under the 1933 Act.
(xx) The Company is not an "investment company" or an entity "controlled"
by an "investment company," as such terms are defined in the 1940 Act.
Nothing has come to our attention that would lead us to believe that the
Registration Statement, including the Rule 430A Information and Rule 434
Information (if applicable), (except for financial statements and schedules and
other financial data included therein, as to which counsel need make any
statement), at the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectuses or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included therein, as to which
such counsel need make no statement), at the time the Prospectuses were issued,
at the time any such amended or supplemented prospectus was issued or at the
Closing Time, included or
A-4
42
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not 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).
A-5
43
EXHIBIT A-2
FORM OF OPINION OF SOMMER & BARNARD
TO BE DELIVERED PURSUANT TO SECTION 5(b)
(i) The Registration Statement, including any Rule 462(b) Registration
Statement, the Rule 430A Information and the Rule 434 Information, as
applicable, the Prospectuses and each amendment or supplement to the
Registration Statement and Prospectuses as of their respective effective or
issue dates (other than the financial statements and supporting schedules
included therein, as to which no opinion need be rendered) complied as to form
in all material respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
Nothing has come to our attention that would lead us to believe that the
Registration Statement, including the Rule 430A Information and Rule 434
Information (if applicable), (except for financial statements and schedules and
other financial data included therein, as to which counsel need not make any
statement), at the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectuses or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included therein, as to which
such counsel need make no statement), at the time the Prospectuses were issued,
at the time any such amended or supplemented prospectus was issued or at the
Closing Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not 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).
A-6
44
EXHIBIT A-3
FORM OF OPINION OF
THOMAS H. OBER, ESQ.
(i) To the best of my knowledge, there is not pending or threatened any
action, suit, proceeding, inquiry or investigation, to which the Company or any
Subsidiary is a party, or to which the property of the Company or any
Subsidiary is subject, before or brought by any court or governmental agency or
body, which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and adversely
affect the properties or assets thereof or the consummation of the
International Purchase Agreement or the performance by the Company of its
obligations thereunder or the transactions contemplated by the Registration
Statement;
(ii) The information in the Prospectuses under "Business--Regulation,"
"Business--Legal Proceedings," "Business--Properties," "Certain Relationships
and Related Transactions" and "Description of Capital Stock" and in the
Registration Statement under item 15, to the extent that it constitutes matters
of laws, summaries of legal matters, the Company's charter and bylaws or legal
proceedings, or legal conclusions, has been reviewed by and is correct in all
material respects.
(iii) To the best of my knowledge, there are no statutes or regulations
that are required to be described in the Prospectuses that are not described as
required.
(iv) All descriptions in the Prospectuses of contracts and other
documents to which the Company or its subsidiaries are a party are accurate in
all material respects; to the best of my knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments required to be described or referred to in the Registration
Statement or to be filed as exhibits thereto other than those described or
referred to therein or filed or incorporated by reference as exhibits thereto,
and the descriptions thereof or references thereto are correct in all material
respects.
(v) The Company and its Subsidiaries possess such Governmental Licenses
issued by the appropriate federal, state, local or foreign regulatory agencies
or bodies necessary to conduct the business now operated by them, including
(without limitation) Insurance Licenses; to my knowledge the Company and its
subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply, singly or in the
aggregate would not have a Material Adverse Effect.
A-7
45
(vi) To the best of my knowledge, neither the Company nor any Subsidiary
is in violation of its charter or by-laws and no default by the Company or any
Subsidiary exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, loan agreement, note, lease or other agreement or
instrument that is described or referred to in the Registration Statement or
the Prospectuses or filed or incorporated by reference as an exhibit to the
Registration Statement.
(vii) Each Subsidiary is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
property or the conduct of business, except where the failure so to qualify or
to be in good standing would not result in a Material Adverse Effect.
Nothing has come to my attention that would lead me to believe that the
Registration Statement, including the Rule 430A Information and Rule 434
Information (if applicable), (except for financial statements and schedules and
other financial data included therein, as to which counsel need make any
statement), at the time it became effective, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading or that the
Prospectuses or any amendment or supplement thereto (except for financial
statements and schedules and other financial data included therein, as to which
such counsel need make no statement), at the time the Prospectuses were issued,
at the time any such amended or supplemented prospectus was issued or at the
Closing Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact
(but not as to legal conclusions), to the extent they deem proper, on
certificates of public officials. Such opinion shall not 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).
A-8
46
EXHIBIT B
May ___, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
Goldman, Sachs & Co.
as Representatives of the several Underwriters
c/o Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
as Representatives of the several
Underwriters to be named in the
within-mentioned Purchase Agreement
North Tower
World Financial Center
New York, New York 10281-1209
MERRILL LYNCH INTERNATIONAL
Goldman Sachs International
as Representatives of the several International Managers
c/o Merrill Lynch International
25 Ropemaker Street
London EC 249L4
England
Re: Proposed Public Offering by American States
Financial Corporation
Ladies and Gentlemen:
The undersigned understands that American States Financial
Corporation, an Indiana corporation (the "Company"), Merrill Lynch, Pierce,
Fenner & Smith ("Merrill Lynch") and Goldman, Sachs & Co. ("Goldman Sachs")
propose to enter into a U.S. Purchase Agreement providing for the public
offering of shares (the "Securities") of the Company's common stock, no par
value (the "Common Stock") and that Merrill Lynch International ("Merrill Lynch
International") and Goldman Sachs International ("Goldman Sachs International")
propose to enter into an International Purchase Agreement with the Company also
providing for the public offering of the Common Stock. In recognition of the
benefit that such offerings will confer upon the undersigned as a director,
officer or stockholder of the Company, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
undersigned agrees with each underwriter to be named in the U.S. Purchase
Agreement and in the International Purchase Agreement that, during a period of
120 days from the date of the U.S. Purchase
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Agreement, the undersigned will not, without the prior written consent of
Merrill Lynch and Merrill Lynch International, directly or indirectly, offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option for the sale of, or
otherwise dispose of or transfer any shares of the Company's Common Stock or any
securities convertible into or exchangeable or exercisable for Common Stock,
whether now owned or hereafter acquired by the undersigned or with respect to
which the undersigned has or hereafter acquires the power of disposition, or
file any registration statement under the Securities Act of 1933, as amended,
with respect to any of the foregoing or (ii) enter into any swap or any other
agreement or any transaction that transfers, in whole or in part, directly or
indirectly, the economic consequence of ownership of the Common Stock, whether
any such swap or transaction described in clause (i) or (ii) above is to be
settled by delivery of Common Stock or other securities, in cash or otherwise.
Very truly yours,
Signature: __________________________
Print Name:__________________________
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