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EXHIBIT 10.14
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT ("Agreement"), dated as of _________,
1996, is between LINCOLN NATIONAL CORPORATION, an Indiana corporation ("LNC")
and AMERICAN STATES FINANCIAL CORPORATION, an Indiana corporation (the
"Company").
WHEREAS, LNC is the owner of all of the Company's issued and outstanding
shares of common stock, no par value ("Common Stock") at the date hereof, and
LNC and the Company have determined to cause the Company to offer to the public
(the "Public Offering") up to an aggregate of ___________ outstanding and new
shares of the Common Stock, in a primary offering.
WHEREAS, following completion of the Public Offering, LNC will continue to
own ______% of the outstanding shares of Common Stock ( _____% if the over
allotment option granted to the underwriters of the Public Offering is
exercised in full).
WHEREAS, the parties hereto desire to enter into this Agreement which sets
forth the terms of certain registration rights applicable to the Registrable
Securities (as defined below) subsequent to the Public Offering.
NOW, THEREFORE, upon the terms and conditions, and the mutual promises
herein contained, and for good and valuable consideration, the receipt and
adequacy of which are acknowledged, the parties hereto agree as follows:
1. Certain Definitions. As used in this Agreement, the following
initially capitalized terms shall have the following meanings:
(a) "Affiliate" means, with respect to any person, any other person who,
directly or indirectly, is in control of, is controlled by or is under common
control with the former person.
(b) "Holder" means LNC and any "transferee" (as such term is defined in
Section 11 hereof) which is the record holder of Registrable Securities.
(c) "Registrable Securities" means the Common Stock (as presently
constituted), any stock or other securities into which or for which such Common
Stock may hereafter be changed, converted or exchanged, and any other securities
issued to holders of such Common Stock (or such shares into which or for which
such shares are so changed, converted or exchanged) upon any reclassification,
share combination, share subdivision, share dividend, merger, consolidation or
similar transactions or events, provided that any such securities shall cease to
be Registrable Securities (i) if a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with the plan of
distribution set forth in such registration statement, (ii) if such securities
shall have been distributed
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pursuant to Rule 144, or (iii) if such securities are held by a Holder other
than LNC, unless such Holder shall furnish the Company an opinion of counsel,
which opinion shall be reasonably satisfactory to the Company, to the effect
that all of such securities are not permitted to be distributed by such Holder
in one transaction pursuant to Rule 144.
(d) "Registration Expenses" means all reasonable expenses in connection
with any registration of securities pursuant to this Agreement including,
without limitation, the following: (i) SEC filing fees; (ii) the fees,
disbursements and expenses of the Company's counsel and accountants in
connection with the registration of the Registrable Securities to be disposed
of under the Securities Act; (iii) all expenses in connection with the
preparation, printing and filing of the registration statement, any preliminary
prospectus or final prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof to any Holders, underwriters and
dealers and all expenses incidental to delivery of the Registrable Securities;
(iv) the cost of producing blue sky or legal investment memoranda; (v) all
expenses in connection with the qualification of the Registrable Securities to
be disposed of for offering and sale under state securities laws, including the
fees and disbursements of counsel for the underwriters or Holders in connection
with such qualification and in connection with any blue sky and legal
investments surveys; (vi) the filing fees incident to securing any required
review by the National Association of Securities Dealers, inc. of the terms of
the sale of the Registrable Securities to be disposed of, (vii) transfer
agents', depositaries' and registrars' fees and the fees of any other agent
appointed in connection with such offering; (viii) all security engraving and
security printing expenses, (ix) all fees and expenses payable in connection
with the listing of the Registrable Securities on each securities exchange or
inter-dealer quotation system on which a class of common equity securities of
the Company is then listed, (x) courier, overnight, delivery, word processing
and duplication expenses and (xi) any one-time payment for directors and
officers insurance directly related to such offering, provided the insurer
provides a separate statement for such payment.
(e) "Rule 144" means Rule 144 promulgated under the Securities Act, or any
successor rule to similar effect.
(f) "SEC" means the United States Securities and Exchange Commission.
(g) "Securities Act" means the Securities Act of 1933, as amended, or any
successor statute.
2. Demand Registration.
(a) At any time after the closing date of the Public Offering, upon
written notice from a Holder in the manner set forth in Section 12(h) hereof
requesting that the Company effect the registration under the Securities Act of
any or all of the Registrable Securities held by such Holder, which notice
shall specify the intended method or methods of disposition of such Registrable
Securities, the Company shall use its best efforts to effect, in the manner set
forth in Section 5, the
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registration under the Securities Act of such Registrable Securities for
disposition in accordance with the intended method or methods of disposition
stated in such request, provided that:
(i) if, within 5 business days of receipt of a registration request
pursuant to this Section 2(a), the Company is advised in writing (with a
copy to the Holder requesting registration) by the managing underwriter
of the proposed offering described below that, in such firm s good faith
opinion, a registration at the time and on the terms requested would
materially and adversely affect any immediately planned offering of
securities by the Company that had been contemplated by the Company prior
to receipt of notice requesting registration pursuant to this Section
2(a) (a "Transaction Blackout"), the Company shall not be required to
effect a registration pursuant to this Section 2(a) until the earliest of
(A) the abandonment of such offering, (B) 90 days after completion of
such offering, (C) the termination of any "hold back" period obtained by
the underwriter(s) of such offering from any person in connection
therewith or (D) 180 days after receipt by the Holder requesting
registration of the managing underwriter s written opinion referred to
above in this subsection (i));
(ii) if, while a registration request is pending pursuant to this
Section 2(a), the Company has determined in good faith that (A) the
filing of a registration statement would require the disclosure of
material information that the Company has a bona fide business purpose
for preserving as confidential or (B) the Company then is unable to
comply with SEC requirements applicable to the requested registration,
the Company shall not be required to effect a registration pursuant to
this Section 2(a) until the earlier of (1) the date upon which such
material information is otherwise disclosed to the public or ceases to be
material or the Company is able to so comply with applicable SEC
requirements, as the case may be, and (2) 45 days after the Company makes
such good-faith determination, provided that the Company shall not be
permitted to delay a requested registration in reliance on this clause
(ii) more than once in any 24-month period; and
(iii) the Company shall not be obligated to file a registration
statement relating to a registration request pursuant to this Section 2:
(A) within a period of 12 months after the effective date of any other
registration statement of the Company demanded pursuant to this Section
2(a); (B) if such registration request is for a number of Registrable
Securities less than10% of the common equity of the Company then owned in
the aggregated by the Holders; or (C) if
Holders in the aggregate own less than 10% of the common equity of the
Company.
(b) Notwithstanding any other provision of this Agreement to the contrary:
(i) a registration requested by a Holder pursuant to this Section 2,
shall not be deemed to have been effected (and, therefore, not requested
for purposes of subsection 2(a)), (A) unless the registration statement
filed in connection therewith has become effective, (B) if after it has
become effective such registration is interfered with by any stop order,
injunction or other order or requirement of the SEC or other governmental
agency or court for any
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reason other than a misrepresentation or an omission by such Holder
and, as a result thereof, not less than 90% of the Registrable Securities
requested to be registered cannot be completely distributed in accordance
with the plan of distribution set forth in the related registration
statement or (C) if the conditions to closing specified in the purchase
agreement or underwriting agreement entered into in connection with such
registration are not satisfied (other than by reason of some act or
omission by such Holder) or waived by the underwriters;
(ii) a registration requested by a Holder pursuant to this Section 2
and later withdrawn at the request of such Holder shall be deemed to have
been effected (and, therefore, requested for purposes of Section 2(a)),
whether withdrawn by the Holder prior to or after the effectiveness of
such requested registration, except that if such request is withdrawn by
a Holder prior to the filing of a registration statement with the SEC,
such Holder can require the Company to disregard for purposes of Section
2(a)(iii) one such requested registration in any twelve month period; and
(iii) nothing herein shall modify Holder's obligation to pay the
Registration Expenses incurred in connection with any withdrawn
registration.
(c) In the event that any registration pursuant to this Section 2 shall
involve, in whole or in part, an underwritten offering, a Holder shall have the
right to designate an underwriter reasonably satisfactory to the Company as the
lead managing underwriter of such underwritten offering and the Company shall
have the right to designate one underwriter reasonably satisfactory to the
Holder as a co-manager of such underwritten offering.
(d) The Company shall have the right to cause the registration of
additional securities for sale for the account of any person (including the
Company) in any registration of Registrable Securities requested by a Holder
pursuant to Section 2(a); provided that the Company shall not have the right to
cause the registration of such additional securities if such Holder is advised
in writing (with a copy to the Company) by the managing underwriter that, in
such firm's good faith opinion, registration of such additional securities
would materially and adversely affect the offering and sale of the Registrable
Securities then contemplated by such Holder.
3. Piggyback Registration. If the Company at any time proposes to
register any of its Common Stock or any other of its common equity securities
(collectively, "Other Securities") under the Securities Act (other than a
registration on Form S-4 or S-8 or any successor form thereto), whether or not
for sale for its own account, in a manner which would permit registration of
Registrable Securities for sale for cash to the public under the Securities
act, it will each such time give prompt written notice to each Holder of its
intention to do so at least 10 business days prior to the anticipated filing
date of the registration statement relating to such registration. Such notice
shall offer each such Holder the opportunity to include in such registration
statement such number of Registrable Securities as each such Holder may
request. Upon the receipt of the Company s notice (which request shall specify
the number of Registrable Securities intended to be disposed of and the
intended method of disposition thereof), the Company shall effect, in the
manner set forth in Section
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5, in connection with the registration of the Other Securities, the registration
under the Securities Act of all Registrable Securities which the Company has
been so requested to register, to the extent required to permit the disposition
(in accordance with such intended methods thereof) of the Registrable Securities
so requested to be registered, provided that:
(a) if at any time after giving written notice of its intention to
register any securities and prior to the effective date of such registration,
the Company shall determine for any reason not to register or to delay
registration of such securities, the Company may, at its election, give written
notice of such determination to the Holder and, thereupon, (A) in the case of a
determination not to register, the Company shall be relieved of its obligation
to register any Registrable Securities in connection with such registration
and (B) in the case of a determination to delay such registration, the Company
shall be permitted to delay registration of any Registrable Securities
requested to be included in such registration for the same period as the delay
in registering such other securities.
(b) (i) if the registration referred to in the first sentence of this
Section 3 is to be an underwritten primary registration on behalf of the
Company, and the managing underwriter advises the Company in writing that, in
such firm's opinion, such offering would be materially and adversely affected by
the inclusion therein of the Registrable Securities requested to be included
therein, the Company shall include in such registration: (1) first, all
securities the Company proposes to sell for its own account ("Company
Securities"), (2) second, up to the full number of Registrable Securities held
by LNC and requested to be included in such registration by LNC ("LNC
Securities") in excess of the number or dollar amount of securities the Company
proposes to sell which, in the good-faith opinion of such managing underwriter,
can be so sold without so materially and adversely affecting such offering,
(3) third, up to the full number of Registrable Securities (other than LNC
Securities) in excess of the number or dollar amount of Company Securities and
LNC Securities, which, in the good faith opinion of such managing underwriter,
can be sold without materially and adversely affecting such offering (and, if
less than the full number of such Registrable Securities, allocated pro rata
among the Holders of such Registrable Securities (other than LNC Securities) on
the basis of the number of securities requested to be included therein by each
such Holder, and (4) fourth, an amount of other securities, if any, requested
to be included therein in excess of the number or dollar amount of Company
Securities, LNC Securities and other Registrable Securities which, in the
opinion of such underwriter(s), can be sold without materially and adversely
affecting such offering (allocated among the holders of such other securities
in such proportions as such holders and the Company may agree); and (ii) if the
registration referred to in the first sentence of this Section 3 is to be an
underwritten secondary registration on behalf of holders of securities (other
than Registrable Securities) of the Company (the "Other Holder"), and the
managing underwriter advises the Company in writing that in its good-faith
opinion such offering would be materially and adversely affected by the
inclusion therein of the Registrable Securities requested to be included
therein, the Company shall include in such registration the amount of
securities (including Registrable Securities) that such managing underwriter
advises allocated pro rata among the Other Holders and the Holders on the basis
of the number of securities (including Registrable Securities) requested to be
included therein by each Other Holder and each Holder;
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(c) the Company shall not be required to effect any registration of
Registrable Securities under this Section 3 incidental to the registration of
any of its securities in connection with mergers, acquisitions, exchange
offers, subscription offers, dividend reinvestment plans or stock option or
other executive or employee benefit or compensation plans; and
(d) no registration of Registrable Securities effected under this Section
3 shall relieve the Company of its obligation to effect a registration of
Registrable Securities pursuant to Section 2 hereof.
4. Expenses. Each Holder, by accepting Registrable Securities, agrees to
pay all Registration Expenses with respect to an offering pursuant to Section 2
hereof, pro rata based on each Holder s number of Registrable Securities
included in such offering, except to the extent the Company causes shares to be
registered for itself or another party pursuant to Section 2(d), in which event
the Company or such other party shall pay the incremental expenses of including
such shares in the offering. The Company agrees to pay all Registration
Expenses with respect to an offering pursuant to Section 3 hereof, except for
the incremental expenses of including a Holder s Registrable Securities in such
offering, which incremental expenses shall be paid by such Holder. All
Registration Expenses to be paid by the Holder shall be paid within 30 days of
the delivery of a statement, such statements to be delivered not more
frequently than once every 30 days.
5. Registration and Qualifications. If and whenever the Company is
required to use its best efforts to effect the registration of any
Registrable Securities under the Securities Act as provided in Section 2 or 3
hereof, the Company, subject to Section 4 hereof, shall:
(a) prepare and file a registration statement under the Securities Act
relating to the Registrable Securities to be offered as soon as practicable,
but in no event later than 45 days (60 days if the applicable registration form
is other than Form S-3) after the date notice is given, and use its best
efforts to cause the same to become effective within 90 days after the date
notice is given (120 days if the applicable registration form is other than
Form S-3);
(b) prepare and file with the SEC such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement effective for 60 days (or, in
the case of an underwritten offering, such shorter time period as the
underwriters may require);
(c) furnish to the Holders and to any underwriter of such Registrable
Securities such number of conformed copies of such registration statement and
of each such amendment and supplement thereto (in each case including all
exhibits), such number of copies of the prospectus included in such
registration statement (including each preliminary prospectus and any summary
prospectus), in conformity with the requirements of the Securities Act, and
such other documents, as the Holders or such underwriter may reasonably request
in order to facilitate the public sale of the Registrable Securities, and a
copy of any and all transmittal letters or other correspondence to, or
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received from the SEC or any other governmental agency or self-regulatory body
or other body having jurisdiction (including any domestic or foreign securities
exchange) relating to such offering;
(d) use its best efforts to register or qualify all Registrable Securities
covered by such registration statement under the securities or blue sky laws of
such jurisdictions as the Holders or any underwriter of such Registrable
Securities shall request, and use its best efforts to obtain all appropriate
registration, permits and consents required in connection therewith, and do any
and all other acts and things which may be necessary or advisable to enable the
Holders or any such underwriter to consummate the disposition in such
jurisdictions of its Registrable Securities covered by such registration
statement; provided that the Company shall not for any such purpose be required
to register or qualify generally to do business as a foreign corporation in any
jurisdiction wherein it is not so qualified, or to subject itself to taxation
in any such jurisdiction, or to consent to general service of process in any
such jurisdiction;
(e) (i) use its best efforts to furnish an opinion of counsel for the
Company addressed to the underwriters and each Holder of Registrable Securities
included in such registration (each a "Selling Holder") and dated the date of
the closing under the underwriting agreement (if any) (or if such offering is
not underwritten, dated the effective date of the registration statement), and
(ii) use its best efforts to furnish a "cold comfort" letter addressed to each
Selling Holder, if permissible under applicable accounting practices, and signed
by the independent public accountants who have audited the Company's financial
statements included in such registration statement, in each such case covering
substantially the same matters with respect to such registration statement (and
the prospectus included therein) as are customarily covered in opinions of
issuer's counsel and in accountants' letters delivered to underwriters in
underwritten public offerings of securities and such other matters as the
Selling Holders may reasonably request and, in the case of such accountants'
letter, with respect to events subsequent to the date of such financial
statements;
(f) immediately notify the Selling Holders in writing (i) at any time when
a prospectus relating to a registration pursuant to Section 2 or 3 hereof is
required to be delivered under the Securities Act of the happening of any event
as a result of which the prospectus included in such registration statement, as
then in effect, includes an untrue statement of any material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and (ii) of any request by the SEC or any other regulatory body
or other body having jurisdiction for any amendment of or supplement to any
registration statement or other document relating to such offering, and in
either such case (i) or (ii) at the request of the Selling Holders, subject to
Section 4 hereof, prepare and furnish to the Selling Holders a reasonable
number of copies of a supplement to or an amendment of such prospectus as may
be necessary so that, as thereafter delivered to the purchasers of such
Registrable Securities, such prospectus shall not include an untrue statement
of a material fact or omit to state a material fact required to be stated there
in or necessary to make the statements therein, in light of the circumstances
under which they are made, not misleading;
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(g) use its best efforts to list all such Registrable Securities covered
by such registration on each securities exchange and inter-dealer quotation
system on which a class of common equity securities of the Company is then
listed, with expenses in connection therewith (not including any future
periodic assessments or fees for such additional listing) to be paid in
accordance with Section 4 hereof; and
(h) furnish unlegended certificates representing ownership of the
Registrable Securities being sold in such denominations as shall be requested
by the Selling Holders or the underwriters with expenses therewith to be paid
in accordance with Section 4 hereof.
6. Conversion of Other Securities, etc. If LNC offers any options,
rights, warrants or other securities issued by it or any other person that are
offered with, convertible into or exercisable or exchangeable for any
Registrable Securities, the Registrable Securities underlying such option,
rights, warrants or other securities shall be eligible for registration
pursuant to Section 2 and Section 3 of this Agreement.
7. Underwriting; Due Diligence.
(a) If requested by the underwriters for any underwritten offering of
Registrable Securities pursuant to a registration requested under this
Agreement, the Company shall enter into an underwriting agreement with such
underwriters for such offering, such agreement to contain such representations
and warranties by the Company and such other terms and provisions as are
customarily contained in underwriting agreements with respect to secondary
distribution, including, without limitation, indemnities and contribution
substantially to the effect and to the extent provided in Section 8 hereof and
the provision of opinions of counsel and accountants' letters to the effect and
to the extent provided in Section 5(e) hereof. The Selling Holders on whose
behalf the Registrable Securities are to be distributed by such underwriters
shall be parties to any such underwriting agreement and the representations and
warranties by, and the other agreements on the part of, the Company to and for
the benefit of such underwriters, shall also be made to and for the benefit of
such Selling Holders. Such underwriting agreement shall also contain such
representations and warranties by the Selling Holders on whose behalf the
Registrable Securities are to be distributed as are customarily contained in
underwriting agreements with respect to secondary distributions. Selling
Holders may require that any additional securities included in an offering
proposed by a Holder be included on the same terms and conditions as the
Registrable Securities that are included therein.
(b) In the event that any registration pursuant to Section 3 shall
involve, in whole or in part, an underwritten offering, the Company may require
the Registrable Securities requested to be registered pursuant to Section 3 to
be included in such underwriting on the same terms and conditions as shall be
applicable to the other securities being sold through underwriters under such
registration. If requested by the underwriters for such underwritten offering,
the Selling Holders on whose behalf the Registrable Securities are to be
distributed shall enter into an underwriting agreement with such underwriters,
such agreement to contain such representations and warranties by the Selling
Holders and such other terms and provisions as are customarily contained in
underwriting agreement with
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respect to secondary distributions, including without limitation, indemnities
and contribution substantially to the effect and to the extent provided in
Section 8 hereof. Such underwriting agreement shall also contain such
representations and warranties by the Company and such other person or entity
for whose account securities are being sold in such offering as are customarily
contained in underwriting agreements with respect to secondary distributions.
(c) In connection with the preparation and filing of each registration
statement registering Registrable Securities under the Securities Act, the
Company shall give the Holders of such Registrable Securities and the
underwriters, if any, and their respective counsel and accountants, such
reasonable and customary access to its books and records and such opportunities
to discuss the business of the Company with its officers and the independent
public accountants who have certified the Company s financial statements as
shall be necessary, in the opinion of such Holder and such underwriters or
their respective counsel, to conduct a reasonable investigation within the
meaning of the Securities Act.
8. Indemnification and Contribution.
(a) In the case of each offering of Registrable Securities made pursuant
to this Agreement, the Company agrees to indemnify and hold harmless each
Holder, its officers and directors, each underwriter of Registrable Securities
so offered and each person, if any, who controls any of the foregoing persons
within the meaning of the Securities Act, from and against any and all claims,
liabilities, losses, damages, expenses and judgments, joint or several, to
which they or any of them may become subject, under the Securities Act or
otherwise, including any amount paid in settlement of any litigation commenced
or threatened, and shall promptly reimburse them, as and when incurred, for any
reasonable legal or other expenses incurred by them in connection with
investigating any claims and defending any actions, insofar as such losses,
claims, damages, liabilities or actions shall arise out of, or shall be based
upon, any untrue statement or alleged untrue statement of a material fact
contained in the registration statement (or in any preliminary or final
prospectus included therein), or any amendment thereto or supplement thereto,
or in any document incorporated by reference therein, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading; provided, however,
that the Company shall not be liable to a particular Holder in any such case to
the extent that any such loss, claim, damage, liability or action arises out
of, or is based upon, any untrue statement or alleged untrue statement, or any
omission, if such statement or omission shall have been made in reliance upon
and in conformity with information relating to such Holder furnished to the
Company in writing by or on behalf of such Holder specifically for use in the
preparation of the registration statement (or in any preliminary or final
prospectus included therein) or any amendment thereof or supplement thereto.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of a Holder and shall survive the transfer
of such securities. The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to each Holder, its officers and
directors, underwriters of the Registrable Securities or any controlling person
of the foregoing; provided, further, that, as to any underwriter or any person
controlling any underwriter, this indemnity does not apply to any loss,
liability, claim, damage or expense arising out of or based
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upon any untrue statement or alleged untrue statement or omission or alleged
omission in any preliminary prospectus if a copy of a prospectus was not sent or
given by or on behalf of an underwriter to such person asserting such loss,
claim, damage, liability or action at or prior to the written confirmation of
the sale of the Registrable Securities as required by the Securities Act and
such untrue statement or omission had been corrected in such prospectus.
(b) In the case of each offering made pursuant to this Agreement, each
Holder of Registrable Securities, included in such offering, by exercising its
registration rights hereunder, agrees to indemnify and hold harmless the
Company, its officers and directors and each person, if any, who controls any of
the foregoing within the meaning of the Securities Act), from and against any
and all claims, liability, losses, damages, expenses and judgments, joint or
several, to which they or any of them may become subject, under the Securities
Act or otherwise, including any amount pale in settlement of any litigation
commenced, or threatened, and shall promptly reimburse them, as and when
incurred, for any legal or other expenses incurred by them in connection with
investigating any claims and defending any actions, insofar as any such losses,
claims, damages, liabilities or actions shall arise out of, or shall be based
upon, any untrue statement or alleged untrue statement of a material fact
contained in the registration statement (or in any preliminary or final
prospectus included therein) or any amendment thereof or supplement thereto, or
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, but
in each case only to the extent that such untrue statement of a material fact is
contained in, or such material fact is omitted from, information relating to
such Holder furnished in writing to the Company by or on behalf of such Holder
specifically for use in the preparation of such registration statement (or in
any preliminary or final prospectus included therein). The foregoing indemnity
is in addition to any liability which such Holder may otherwise have to the
Company, or any of its directors, officers or controlling persons; provided,
however, that, as to any underwriter or any person controlling any underwriter,
this indemnity does not apply to any loss, liability, claim, damage or expense
arising out of or based upon any untrue statement or alleged untrue statement or
omission or alleged omission in any preliminary prospectus if a copy of a
prospectus was not sent or given by or on behalf of an underwriter to such
person asserting such loss, claim, damage, liability or action at or prior to
the written confirmation of the sale of the Registrable Securities as required
by the Securities Act and such untrue statement or omission had been corrected
in such prospectus.
(c) Procedure for Indemnification. Each party indemnified under paragraph
(a) or (b) of this Section 8 shall, promptly after receipt of notice of any
claim or the commencement of any action against such indemnified party in
respect of which indemnity may be sought, notify the indemnifying party in
writing of the claim or the commencement thereof; provided that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have to an indemnified party on account of the indemnity agreement
contained in paragraph (a) or (b) of this Section 8, except to the extent the
indemnifying party was prejudiced by such failure, and in no event shall
relieve the indemnifying party from any other liability which it may have to
such indemnified party. If any such claim or action shall be brought against
an indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein, and, to the extent
that it wishes, jointly with any other similarly notified indemnifying party to
assume the defense thereof with counsel
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reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided that each
indemnified party, its officers and directors, if any, and each person, if any,
who controls such indemnified led party within the meaning of the Securities
act, shall have the right to employ separate counsel reasonably approved by the
indemnifying party to represent them if the named parties to any action
(including any impleaded parties) include both such indemnified party and an
indemnifying party or an affiliate of an indemnifying party, and such
indemnified party shall have been advised by counsel either (I) that there may
be one or more legal defenses available to such indemnified party that are
different from or additional to those available to such indemnifying party or
such affiliate or (ii) a conflict may exist between such indemnified party and
such indemnifying party or such affiliate, and in that event the fees and
expenses of one such separate counsel for all such indemnified parties shall be
paid by the indemnifying party. An indemnified party shall not enter into any
settlement agreement which is not approved by the indemnifying party, such
approval not to be unreasonably withheld. The indemnifying party may not agree
to any settlement of any such claim or action which provides for any remedy or
relief other than monetary damages for which the indemnifying party shall be
responsible hereunder, without the prior written consent of the indemnified
party, which shall not be unreasonably withheld. In any action hereunder as to
which the indemnifying party has assumed the defense thereof with counsel
reasonably satisfactory to the indemnified party, the indemnified party shall
continue to be entitled to participate in the defense thereof, with counsel of
its own choice, but, except as set forth above, the indemnifying party shall not
be obligated hereunder to reimburse the indemnified party; for the costs
thereof. In all instances, the indemnified party shall cooperate fully with the
indemnifying party or its counsel in the defense of each claim or action.
If the indemnification provided for in this Section 8 shall for any reason
be unavailable to an indemnified party in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to herein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, in such
proportion as shall be appropriate to reflect the relative fault of the
indemnifying party on the one hand and the indemnified party on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party on the one hand or the
indemnified party on the other, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission, but not by reference to any indemnified party's stock
ownership in the Company or proceeds from the offering. In no event, however,
shall a Holder be required to contribute in excess of the amount of the net
proceeds received by such Holder in connection with the sale of Registrable
Securities in the offering which is the subject of such loss, claim, damage or
liability. The amount paid or payable by an indemnified party as a result of
the loss, claim, damage or liability, or action in
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respect thereof, referred to above in this paragraph shall be deemed to
include, for purposes of this paragraph, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
9. Rule 144. The Company shall take such measure and file such
information, documents and reports as shall be required by the SEC as a
condition to the availability of Rule 144 (or any successor provision).
10. Holdback.
(a) Each Holder agrees by acquisition of Registrable Securities, if so
required by the managing underwriter, not to sell, make any short sale of,
loan, grant any option for the purchase of, effect any public sale or
distribution of or otherwise dispose of any securities of the Company, during
the 30 days prior to and the 90 days after any underwritten registration
pursuant to Section 2 or 3 hereof has become effective (or such shorter period
as may be required by the underwriter), except as part of such underwritten
registration. Notwithstanding the foregoing sentence, each Holder subject to
the foregoing sentence shall be entitled to sell during the foregoing period
securities in a private sale. The Company may legend and may impose stop
transfer instructions on any certificate evidencing Registrable Securities
relating to the restrictions provided for in this Section 10.
(b) The Company agrees, if so required by the managing underwriter, not to
sell, make any short sale of, loan, grant any option for the purchase of (other
than pursuant to employee benefit plans) effect any public sale or distribution
of or otherwise dispose of its equity securities or securities convertible into
or exchangeable or exercisable for any such securities during the 30 days prior
to and the 90 days after any underwritten registration pursuant to Section 2 or
3 hereof has become effective, except as part of such underwritten registration
and except pursuant to registrations on Form S-4, S-8 or any successor or
similar forms thereto.
11. Transfer of registration Rights.
(a) LNC may transfer all or any portion of its rights under this Agreement
to any transferee of the lesser of (i) at least 20% of LNC s initial holdings of
Registrable Securities and (ii) all of LNC s remaining Registrable Securities
(each, a "transferee"). No transfer of registration rights pursuant to this
Section shall be effective unless the Company has received written notice from
LNC of an intention to transfer of at least 30 days prior to LNC entering into a
binding agreement to transfer Registrable Securities (10 business days in the
event of an unsolicited offer). Such notice need not contain proposed terms or
name a proposed transferee. On or before the time of the transfer, the Company
shall receive a written notice stating the name and address of any transferee
and identifying the amount of Registrable Securities with respect to which the
rights under this Agreement are being transferred and the nature of the rights
to transferred. In connection with any such transfer, the term "LNC" as
used in this Agreement (other than in this Section 11, Section
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3(a)(1)(2) and Section (1)(c)(iii) hereof) shall, where appropriate to assign
the rights and obligations of LNC hereunder to such direct transferee, be
deemed to refer to the transferee holder of such Registrable Securities. LNC
and such transferees may exercise the registration rights hereunder in such
proportion and upon the demand of such Holder as they shall agree among
themselves, provided that in no event shall the Company be required to effect
more than one registration pursuant to Section 2 of this Agreement in any 12
month period and that each such registration shall be at the request of not
more than one Holder.
(b) After any such transfer, LNC shall retain its rights under this
Agreement with respect to all other Registrable Securities owned by LNC.
(c) Upon the request of LNC, the Company shall execute a Registration
Rights Agreement with such transferee or a proposed transferee substantially
similar to this Agreement, and any demand registrations granted to such
transferee shall not limit the demand registrations to which LNC is entitled
under Section 2(a) hereof.
12. Miscellaneous.
(a) Injunctions. Each party acknowledges and agrees that irreparable
damage would occur in the event that any of the provisions of this Agreement
was not performed in accordance with its specific terms or was otherwise
breached. Therefore, each party shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically the terms and provisions hereof in any court having
jurisdiction, such remedy being in addition to any other remedy to which such
party may be entitled at law or in equity.
(b) Severability. If any term or provision of this Agreement held by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms and provisions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and
each of the parties shall use its best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term or provision.
(c) Further Assurances. Subject to the specific terms of this Agreement,
each of the parties hereto shall make, execute, acknowledge and deliver such
other instruments and documents, and take all such other actions, as may be
reasonably required to effectuate the purposes of this Agreement and to
consummate the transactions contemplated hereby.
(d) Waivers, etc. No failure or delay on the part of either party (or the
intended third-party beneficiaries referred to herein) in exercising any power
or right hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right or power, or any abandonment or
discontinuance of steps to enforce such a right or power, preclude any
other or further exercise thereof or the exercise of any other right or power.
No modification or waiver of any provision of this Agreement nor consent to any
departure therefrom shall in any event be effective unless the same shall be in
writing and signed by an authorized officer of each of the parties, and then
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such waiver or consent shall be effective only in the specific instance and for
the purpose for which given.
(e) Entire Agreement. This Agreement contains the final and complete
understanding of the parties with respect to its subject matter. This
Agreement supersedes all prior agreements and understandings between the
parties, whether written or oral, with respect to the subject matter hereof.
The paragraph headings contained in this Agreement are for reference purposes
only, and shall not affect in any manner the meaning or interpretation of this
Agreement.
(f) Counterparts. For the convenience of the parties, this Agreement may
be executed in any number of counterparts, each of which shall be deemed to be
an original but all of which together shall be one and the same instrument.
(g) Amendment. This Agreement may be amended only by a written instrument
duly executed by an authorized officer of each of the parties.
(h) Notices. Unless expressly provided herein, all notices, claims,
certificates, requests, demands and other communications hereunder shall be in
writing and shall be deemed to be duly given (i) when personally delivered or
(ii) if mailed registered or certified mail, postage prepaid, return receipt
requested, on the date the return receipt is executed or the letter refused by
the addressee or its agent or (iii) if sent by overnight courier which delivers
only upon the signed receipt of the addressee, on the date the receipt
acknowledgment is executed or refused by the addressee or its agent:
(i) if to LNC, to:
Lincoln National Corporation
200 East Berry Street
Fort Wayne, Indiana 46802
Attention: Jack D. Hunter, Executive
Vice President and General Counsel
(ii) if to the Company, to:
American States Financial Corporation
500 North Meridian
Indianapolis, Indiana 46204
Attention: President
and
(iii) if to a Holder of Registrable Securities, to the name and
address as the same appear in the security transfer books of the
Company;
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or to such other address as the party (or Holder of Registrable Securities) to
whom notice is to be given may have previously furnished to the other party
(or, in the case of a Holder of Registrable Securities, to the Company) in
writing in the manner set forth above.
(i) GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
INTERNAL LAWS OF THE STATE OF INDIANA.
(j) Assignment. Except as provided herein, the parties may not assign
their rights under this Agreement. The Company may not delegate its
obligations under this Agreement.
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IN WITNESS WHEREOF, LNC and the Company have caused this Agreement to be
duly executed by their authorized representative as of the date first above
written.
LINCOLN NATIONAL CORPORATION
By: ____________________________
Name:
Title:
AMERICAN STATES FINANCIAL CORPORATION
By: _____________________________
Name:
Title:
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