SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
AMERICAN STATES FINANCIAL CORPORATION
(Name of Issuer)
Common Stock
(Title of Class of Securities)
None
(CUSIP Number)
Dennis L. Schoff, Assistant General Counsel
Lincoln National Corporation
200 East Berry Street, Fort Wayne, Indiana 46802
Phone: 219/455-1263
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
May 29, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report this acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
Check the following box if a fee is being paid with this Statement [X]. (A
fee is not required only if the filing person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of less than five percent of such
class. See Rule 13d-7.)
Note: See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
<PAGE>
1. Name of Reporting Person S.S. or I.R.S. Identification No. of Reporting
Person:
Lincoln National Corporation 35-1140070
2. Check the Appropriate Box if a Member of a Group (See instructions)
(a) [ ]
(b) [ ]
3. SEC Use Only . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4. Source of Funds (See instructions)
WC
5. Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e) [ ]
6. Citizenship or Place of Organization: Indiana
Aggregate Amount of Shares Beneficially
Owned by Reporting Person with:
7. Sole Voting Power: 50,000,000
8. Shared Voting Power: 0
9. Sole Dispositive Power: 50,000,000
10. Shared Dispositive Power: 0
11. Aggregate Amount Beneficially Owned by Reporting Person: 50,000,000
12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares: [ ]
13. Percent of Class Represented by Amount in Row (11): 83.3% (81.3% if the
entire overallotment is exercised)
14. Type of Reporting Person (See instructions)
HC
<PAGE>
Item 1. Security and Issuer
Title of Securities: Common Stock
Name and Address of Issuer:
American States Financial Corporation
500 North Meridian Street
Indianapolis, IN 46204
Item 2. Identity and Background
(a) Name
Lincoln National Corporation is incorporated under the laws of the State of
Indiana.
(b) Address
The principal office and business address of Lincoln National Corporation is
200 East Berry Street, Fort Wayne, Indiana 46802.
(c) Principal Business
Lincoln National Corporation is a holding company whose operating subsidiaries
are primarily engaged in the insurance and financial services businesses.
(d)-(e) Legal Proceedings
During the last five years, Lincoln National Corporation has not been
convicted in any criminal proceeding nor has it become subject to final
judgment, decree or order enjoining future violations of, or prohibiting or
mandating activities subject to, Federal or State Securities laws or finding
any violation with respect to such laws.
(f) Citizenship
Not applicable.
Item 3. Source and Amount of Funds or Other Consideration
Lincoln National Corporation subscribed for one share of Common Stock of the
Issuer on February 5, 1996 and paid $100.00 cash for the share. On May 16,
1996, Lincoln National Corporation subscribed for an additional 49,999,999
shares of Common Stock of the Issuer and, in exchange for such stock and
other consideration, transferred to the Issuer 1,000,000 shares of the common
capital stock of American States Insurance Company, representing all of its
issued and outstanding capital stock. The 50,000,000 shares of Common Stock
of the Issuer represented all of the issued and outstanding shares of Common
Stock of the Issuer prior to the initial public offering of Common Stock of
the Issuer on May 29, 1996.
Item 4. Purpose of Transaction
The purpose of the transaction was for Lincoln National Corporation ("LNC") to
establish a new holding company for purposes of the initial public offering by
such company (the "Issuer") of its Common Stock. This offering was to be of
newly issued shares of the Issuer constituting no more than 20% of its total
outstanding Common Stock.
(a) Acquisition or disposition of securities of the Issuer
On May 29, 1996 the Issuer completed a primary initial public offering ("IPO")
of 10,000,000 newly issued shares of Common Stock of the Issuer, thereby
reducing LNC's ownership percentage of the Issuer from 100% to 83.3% of the
total outstanding shares of Common Stock of the Issuer. The Issuer has also
granted to the underwriters of the IPO an overallotment option of an
additional 1,500,000 shares. Such option must be exercised within 30 days of
the IPO and, if exercised, LNC's ownership percentage will be reduced to
81.3%. All the shares of the Issuer held by LNC are "restricted securities"
as defined in Rule 144 under the Securities Act and may not be resold in the
absence of registration under the Securities Act or pursuant to exemptions
from such registration. In addition, LNC agreed not to sell or otherwise
dispose of any of the Issuer's Common Stock for a period of 120 days after
May 22, 1996 without the prior written consent of the lead underwriter
(see Exhibit I). Following the 120 day period, pursuant to a Registration
Rights Agreement (see Exhibit II) with the Issuer dated May 29, 1996, LNC
has the right to demand registration under the Securities Act of shares of
Common Stock owned by it and to have shares of Common Stock owned by it
included in future registered public offerings of Common Stock by the Issuer.
LNC currently intends to maintain ownership of the shares of Common Stock of
the Issuer described herein, however, business and investment objectives may
cause LNC to divest some or all of its remaining interest in the Issuer.
(b) Extraordinary corporation transactions
None.
(c) Sale of material amount of assets of the issuer
None.
(d) Change in present board of directors or management
None.
(e) Material change in capitalization or dividend policy
None.
(f) Material change in the issuer's business
None.
(g) Changes in the issuer's charter or by-laws
None.
(h) Delisting or similar act
None.
(i) Termination of registration
None.
(j) Similar action
None.
Item 5. Interest in Securities of the Issuer
(a) Beneficial ownership: See Nos. 11 and 13 on cover page.
(b) Voting and dispositive power: See Nos. 7 through 10 on cover page
(c) Description of recent transactions:
2/5/96 Lincoln National Corporation subscribed for one share of
Common Stock of the Issuer and paid $100 cash therefor.
5/16/96 Lincoln National Corporation subscribed for 49,999,999
shares of Common Stock of the Issuer and paid for the stock by
transferring to the Issuer 1,000,000 shares of capital stock of
American States Insurance Company, representing all of the issued
and outstanding stock of that company.
(d) Other persons with rights to receive dividends or proceeds: None
(e) Date reporting person ceased ownership of more than 5%: N/A
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
Lincoln National Corporation ("LNC") agreed not to sell or otherwise dispose
of any of the Issuer's Common Stock owned by LNC for a period of 120 days
after May 22, 1996 without the prior written consent of the lead underwriter
(see Exhibit I).
Following the 120 day period as stated above, pursuant to a Registration
Rights Agreement (see Exhibit II) with the Issuer dated May 29, 1996, LNC has
the right to demand registration under the Securities Act of shares of Common
Stock owned by it and to have shares of Common Stock owned by it included in
future registered public offerings of Common Stock by the Issuer.
Item 7. Material to be Filed as Exhibits
Exhibit I Purchase Agreements
Exhibit II Registration Rights Agreement
SIGNATURE
After reasonable inquiry and to the best of my knowledge and believe, I
certify that the information set forth in this statement is true, complete and
correct.
LINCOLN NATIONAL CORPORATION
6/3/96 /s/Robert A. Anker
__________________ By:_______________________________________
Date Name/Title: Robert A. Anker, President
American States Financial Corporation
8,000,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: May 22, 1996
<PAGE>
Table of Contents
PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1. Representations and Warranties. . . . . . . .4
(a) Representations and Warranties by the
Company and Lincoln.. . . . . . . . . . . . .4
(i) Compliance with Registration
Requirements. . . . . . . . . . . . .4
(ii) Independent Accountants.. . . . . . . .5
(iii) Financial Statements. . . . . . . . . .5
(iv) Statutory Financial Statements. . . . .6
(v) No Material Adverse Change in Business.6
(vi) Valid Existence of the Company. . . . .6
(vii) Good Standing of Subsidiaries . . . . .7
(viii) Valid Existence of Lincoln. . . . . . .7
(ix) Capitalization. . . . . . . . . . . . .7
(x) Authorization of Agreement. . . . . . .8
(xi) Authorization and Description of
Securities. . . . . . . . . . . . . .8
(xii) Absence of Defaults and Conflicts.. . .8
(xiii) Absence of Labor Dispute. . . . . . . .9
(xiv) Absence of Proceedings. . . . . . . . .9
(xv) Accuracy of Exhibits. . . . . . . . . 10
(xvi) Possession of Intellectual Property . 10
(xvii) Absence of Further Requirements . . . 10
(xviii) Possession of Licenses and Permits. . 10
(xix) Title to Property . . . . . . . . . . 11
(xx) Compliance with Cuba Act. . . . . . . 11
(xxi) Investment Company Act. . . . . . . . 11
(xxii) Environmental Laws. . . . . . . . . . 12
(xxiii) Registration Rights . . . . . . . . . 12
(b) Officer's Certificates.. . . . . . . . . 12
SECTION 2. Sale and Delivery to Underwriters; Closing. 13
(a) Initial Securities.. . . . . . . . . . . 13
(b) U.S. Option Securities . . . . . . . . . 13
(c) Payment. . . . . . . . . . . . . . . . . 13
(d) Denominations; Registration. . . . . . . 14
SECTION 3. Covenants of the Company and Lincoln. . . . 14
(a) Compliance with Securities Regulations
and Commission Requests. . . . . . . . . 15
(b) Filing of Amendments . . . . . . . . . . 15
(c) Delivery of Registration Statements. . . 15
(d) Delivery of Prospectuses.. . . . . . . . 16
(e) Continued Compliance with Securities
Laws.. . . . . . . . . . . . . . . . . . 16
(f) Blue Sky Qualifications. . . . . . . . . 16
(g) Rule 158.. . . . . . . . . . . . . . . . 17
(h) Use of Proceeds. . . . . . . . . . . . . 17
(i) Listing. . . . . . . . . . . . . . . . . 17
(j) Restriction on Sale of Securities. . . . 17
(k) Reporting Requirements . . . . . . . . . 18
(l) Rule 463 . . . . . . . . . . . . . . . . 18
(m) Compliance with NASD Rules . . . . . . . 18
SECTION 4. Payment of Expenses.. . . . . . . . . . . . 18
(a) Expenses.. . . . . . . . . . . . . . . . 18
(b) Termination of Agreement.. . . . . . . . 19
SECTION 5. Conditions of U.S. Underwriters' Obligations.19
(a) Effectiveness of Registration Statement. 19
(b) Opinions of Counsel for Company. . . . . 20
(c) Opinion of Counsel for U.S.
Underwriters.. . . . . . . . . . . . . . 20
(d) Officers' Certificate. . . . . . . . . . 20
(e) Accountant's Comfort Letter. . . . . . . 21
(f) Bring-down Comfort Letter. . . . . . . . 21
(g) Approval of Listing. . . . . . . . . . . 21
(h) No Objection.. . . . . . . . . . . . . . 21
(i) Lock-up Agreements . . . . . . . . . . . 21
(j) Completion of Recapitalization. . . . . 22
(k) Purchase of Initial International
Securities.. . . . . . . . . . . . . . . 22
(l) Additional Documents.. . . . . . . . . . 22
(m) Conditions to Purchase of U.S. Option
Securities.. . . . . . . . . . . . . . . 22
(n) Termination of Agreement.. . . . . . . . 23
SECTION 6. Indemnification.. . . . . . . . . . . . . . 23
(a) Indemnification of Underwriters. . . . . 23
(b) Indemnification of Company, Directors
and Officers.. . . . . . . . . . . . . . 24
(c) Actions against Parties; Notification . 25
(d) Settlement without Consent if Failure
to Reimburse.. . . . . . . . . . . . . . 25
SECTION 7. Contribution. . . . . . . . . . . . . . . . 26
SECTION 8. Representations, Warranties and Agreements
to Survive Delivery.. . . . . . . . . . . . 27
SECTION 9. Termination of Agreement. . . . . . . . . . 28
(a) Termination; General . . . . . . . . . . 28
(b) Liabilities. . . . . . . . . . . . . . . 28
SECTION 10. Default by One or More of the U.S.
Underwriters. . . . . . . . . . . . . . . . 28
SECTION 11. Notices.. . . . . . . . . . . . . . . . . . 29
SECTION 12. Parties.. . . . . . . . . . . . . . . . . . 29
SECTION 13. GOVERNING LAW AND TIME. . . . . . . . . . . 30
SECTION 14. Effect of Headings. . . . . . . . . . . . . 30
<PAGE>
American States Financial Corporation
8,000,000 Shares of Common Stock
(No Par Value)
PURCHASE AGREEMENT
May 22, 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
North Tower
World Financial Center
New York, New York 10281-1209
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 & Co., Merrill Lynch, Pierce,
Fenner & Smith Incorporated ("Merrill Lynch"), Goldman, Sachs
& Co. ("Goldman Sachs"), and each of the other underwriters
named in Schedule A hereto (collectively, the "U.S.
Underwriters", 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 "U.S.
Representatives"), with respect to the issue and sale by the
Company and the purchase by the U.S. Underwriters, 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 U.S. Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to
purchase all or any part of 1,200,000 additional shares of
Common Stock to cover over-allotments, if any. The aforesaid
8,000,000 shares of Common Stock (the "Initial U.S.
Securities") to be purchased by the U.S. Underwriters and all
or any part of the 1,200,000 shares of Common Stock subject to
the option described in Section 2(b) hereof (the "U.S. Option
Securities") are hereinafter called, collectively, the "U.S.
Securities."
It is understood that the Company is concurrently
entering into an agreement dated the date hereof (the
"International Purchase Agreement") providing for the offering
by the Company of an aggregate of 2,000,000 shares of Common
Stock (the "Initial International Securities") through
arrangements with certain managers outside the United States
and Canada (the "International Managers") for which Merrill
Lynch International Limited and Goldman Sachs International
are acting as lead managers (the "Lead Managers"), and the
grant by the Company to the International Managers, acting
severally and not jointly, of an option to purchase all or any
part of the International Mangers' pro rata portion of up to
300,000 additional shares of Common Stock solely to cover
over-allotments, if any (the "International Option Securities"
and, together with the U.S. Option Securities, the "Option
Securities"). The Initial International Securities and
International Option Securities are collectively called the
"International Securities." It is understood that the Company
is not obligated to sell and the U.S. Underwriters are not
obligated to purchase, any Initial U.S. Securities unless all
of the Initial International Securities are contemporaneously
purchased by the International Managers.
The U.S. Underwriters and the International Managers
are hereinafter collectively called the "Underwriters", the
Initial U.S. Securities and the Initial International
Securities are hereinafter collectively called the "Initial
Securities," and the U.S. Securities and the International
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
U.S. Underwriters propose to make a public offering of the
Securities as soon as the U.S. Representatives deem advisable
after this Agreement has been executed and delivered.
The Company, Lincoln and the U.S. Underwriters agree
that up to 500,000 shares of the U.S. Securities to be
purchased by the U.S. Underwriters (the "Reserved Securities")
shall be reserved for sale by the U.S. Underwriters to certain
eligible employees and persons having business relationships
with the Company at the public offering price, as part of the
distribution of the U.S. Securities by the U.S. Underwriters,
subject to the terms of this Agreement, the applicable rules,
regulations and interpretations of the National Association of
Securities Dealers, Inc. (the "NASD") and all other applicable
laws, rules and regulations. Any such reserved securities not
orally confirmed for purchase by such eligible employees and
persons having business relationships with the Company by the
end of the first business day after either (a) the later of
the date on which the Original Registration Statement and any
Rule 462(b) Registration Statement has become effective or (b)
if the Company has elected to rely on Rule 430A, the date of
this Agreement, will be offered to the public by the U.S.
Underwriters as set forth in the Prospectuses.
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 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 U.S. Securities (the "Form of U.S. Prospectus" and one
relating to the International Securities (the "Form of
International 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 U.S.
Prospectus and Form of International 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 U.S. Prospectus and
Form of International Prospectus in the forms first furnished
to the Underwriters for use in connection with the offering of
the Securities are herein called the "U.S. Prospectus" and the
"International Prospectus," respectively, and collectively,
the "Prospectuses." If Rule 434 is relied on, the terms "U.S.
Prospectus" and "International Prospectus" shall refer to the
preliminary U.S. Prospectus dated April 24, l996 and the
preliminary International Prospectus dated April 24, l996,
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 prospects, the U.S.
Prospectus, the International 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, represents and warrants to each U.S. Underwriter 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 U.S.
Underwriter, 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 U.S. 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 U.S.
Underwriter 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 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.
(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 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 U.S. Underwriters
and the International Managers have been duly authorized
for issuance and sale to the U.S. Underwriters pursuant
to this Agreement and the International Managers pursuant
to the International Purchase Agreements, respectively,
and, when issued and delivered by the Company pursuant to
this Agreement and the International Purchase Agreement,
respectively, against payment of the consideration set
forth herein and in the International 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 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 International
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 Prospectus 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.
(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 International Purchase Agreement or the
performance by either the Company or Lincoln of its
obligations hereunder or under the International 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 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 International 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 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 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 U.S. Representatives or to counsel
for the U.S. Underwriters, shall be deemed a representation
and warranty by the Company and Lincoln to each U.S.
Underwriter 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 U.S. Underwriter, severally and not jointly,
and each U.S. Underwriter, severally and not jointly, agrees
to purchase from the Company, at the price per share set forth
in Schedule B, the number of Initial U.S. Securities set forth
in Schedule A opposite the name of such U.S. Underwriter, plus
any additional number of Initial U.S. Securities which such
U.S. Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof.
(b) U.S. 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 U.S. Underwriters,
severally and not jointly, to purchase up to an additional
1,200,000 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 U.S. Securities but not payable on the U.S.
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 distribution of the Initial U.S. Securities upon notice by
the U.S. Representatives to the Company setting forth the
number of U.S. Option Securities as to which the several U.S.
Underwriters are then exercising the option and the time and
date of payment and delivery for such U.S. Option Securities.
Any such time and date of delivery (a "Date of Delivery")
shall be determined by the U.S. Representatives, 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 U.S. Option Securities, each of the U.S.
Underwriters, acting severally and not jointly, will purchase
that proportion of the total number of U.S. Option Securities
then being purchased which the number of Initial U.S.
Securities set forth in Schedule A opposite the name of such
U.S. Underwriter bears to the total number of Initial U.S.
Securities, subject in each case to such adjustments as the
U.S. Representatives in their 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 U.S. 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 U.S. Representatives 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 U.S. Representatives and
the Company (such time and date of payment and delivery being
herein called "Closing Time").
In addition, in the event that any or all of the U.S.
Option Securities are purchased by the U.S. Underwriters,
payment of the purchase price for, and delivery of
certificates for, such U.S. Option Securities shall be made at
the above-mentioned offices, or at such other place as shall
be agreed upon by the U.S. Representatives and the Company, on
each Date of Delivery as specified in the notice from the U.S.
Representatives to the Company. Payment shall be made to the
Company by wire transfer of immediately available funds to an
account specified by the Company, against delivery to the U.S.
Representatives for the respective accounts of the U.S.
Underwriters of certificates for the U.S. Securities to be
purchased by them. It is understood that each U.S.
Underwriter has authorized the U.S. Representatives, for its
account, to accept delivery of, receipt for, and make payment
of the purchase price for, the Initial U.S. Securities and the
U.S. Option Securities, if any, which it has agreed to
purchase. Merrill Lynch, individually and not as
representative of the U.S. Underwriters, may (but shall not be
obligated to) make payment of the purchase price for the
Initial U.S. Securities or the U.S. Option Securities, if any,
to be purchased by any U.S. Underwriter 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 U.S. Underwriter from its obligations hereunder.
(d) Denominations; Registration. Certificates for the
Initial U.S. Securities and the U.S. Option Securities, if
any, shall be in such denominations and registered in such
names as the U.S. Representatives may request in writing at
least one full business day before the Closing Time or the
relevant Date of Delivery, as the case may be. The
certificates for the Initial U.S. Securities and the U.S.
Option Securities, if any, will be made available for
examination and packaging by the U.S. Representatives in the
City of New York not later than 10:00 A.M. (Eastern Time) on
the business day prior to the Closing Time or the relevant
Date of Delivery, as the case may be.
SECTION 3. Covenants of the Company and Lincoln. The
Company covenants, and with respect to Section 3(j) Lincoln
covenants, with each U.S. Underwriter as follows:
(a) Compliance with Securities Regulations and
Commission Requests. The Company, subject to Section 3(b),
will comply with the requirements of Rule 430A and will notify
the U.S. Representatives 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 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
U.S. Representatives 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 U.S.
Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the
case may be, and will not file or use any such document to
which the U.S. Representatives or counsel for the U.S.
Underwriters shall object.
(c) Delivery of Registration Statements. The Company
has furnished or will deliver to the U.S. Representatives and
counsel for the U.S. Underwriters, without charge, signed
copies of the Registration Statement as originally filed and
of each amendment thereto (including exhibits filed therewith
or incorporated by reference therein) and signed copies of all
consents and certificates of experts, and will also deliver to
the U.S. Representatives, without charge, a conformed copy of
the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for each of the U.S.
Underwriters. If applicable, the copies of the Registration
Statement and each amendment thereto furnished to the U.S.
Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant
to EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered
to each U.S. Underwriter, without charge, as many copies of
each preliminary prospectus as such U.S. Underwriter
reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act.
The Company will furnish to each U.S. Underwriter, without
charge, during the period when the U.S. 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
U.S. Prospectus (as amended or supplemented) as such U.S.
Underwriter may reasonably request. If applicable, the U.S.
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 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 U.S. Underwriters 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 U.S. Underwriters such number of
copies of such amendment or supplement as the U.S.
Underwriters may reasonably request.
(f) Blue Sky Qualifications. The Company will use all
reasonable efforts, in cooperation with the U.S. Underwriters,
to qualify the Securities for offering and sale under the
applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the U.S.
Representatives may designate and to maintain such
qualifications in effect for a period of not less than one
year from the later of the effective date of the Registration
Statement and any Rule 462(b) Registration Statement;
provided, however, that the Company shall not be obligated to
file any general consent to service of process or to qualify
as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject
itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. 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.
(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 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 l934 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 U.S.
Underwriters for any 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 U.S. Underwriters of this
Agreement, any Agreement among U.S. Underwriters and such
other documents as may be required in connection with the
offering, purchase, sale and delivery of the U.S. Securities,
(iii) the preparation, issuance and delivery of the
certificates for the U.S. Securities to the U.S. Underwriters,
including any stock or other transfer taxes or duties payable
upon the sale of the Securities to the 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 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 U.S. Underwriters 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 Underwriters of copies of each
preliminary prospectus, any Term Sheets and of the U.S.
Prospectus and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the U.S.
Underwriters 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 U.S. Underwriters 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 U.S. Underwriters, including the fees and disbursements of
counsel for the U.S. Underwriters, 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 U.S. Representatives in accordance with the
provisions of Section 5 or Section 9(a)(i) hereof, the Company
shall reimburse the U.S. Underwriters for all of their
reasonable out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the U.S. Underwriters.
SECTION 5. Conditions of U.S. Underwriters' Obligations.
The obligations of the several U.S. Underwriters 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 U.S. Underwriters 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 U.S. Underwriters.
A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b)
(or a post-effective amendment providing such information
shall have been filed and declared effective in accordance
with the requirements of Rule 430A) 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 U.S. Representatives 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 U.S. Underwriters, together
with signed or reproduced copies of such letter for each of
the other U.S. Underwriters 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 U.S. Underwriters 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 U.S. Representatives. Such counsel may
also state that, insofar as such opinion involves factual
matters, they have relied, to the extent they deem proper,
upon certificates of public officials and, in the case of each
of Barnes & Thornburg and Sommer & Barnard, upon certificates
of officers of the Company, its subsidiaries and Lincoln.
(c) Opinion of Counsel for U.S. Underwriters. At
Closing Time the U.S. Representatives shall have received the
favorable opinion, dated as of Closing Time, of Sidley &
Austin, Chicago, Illinois, counsel for the U.S. Underwriters
("Sidley & Austin"), together with signed or reproduced copies
of such letter for each of the other U.S. Underwriters 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 U.S. Representatives. Such
counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company, 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 U.S. Representatives 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 U.S. Representatives shall
have received from Ernst & Young LLP ("Ernst & Young") a
letter dated such date, in form and substance satisfactory to
the U.S. Representatives, together with signed or reproduced
copies of such letter for each of the other U.S. Underwriters
containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information contained in the Registration Statement and the
Prospectuses.
(f) Bring-down Comfort Letter. At Closing Time the U.S.
Representatives 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 U.S. Representatives 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 International Securities.
Contemporaneously with the purchase by the U.S. Underwriters
of the Initial U.S. Securities under this Agreement, the
International Managers shall have purchased the Initial
International Securities under the International Purchase
Agreement.
(l) Additional Documents. At Closing Time and at each
Date of Delivery counsel for the U.S. Underwriters shall have
been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of
the representations or warranties, or the fulfillment of any
of the conditions, herein contained; and all proceedings taken
by the Company in connection with the issuance and sale of the
Securities as herein contemplated shall be satisfactory in
form and substance to the U.S. Representatives and counsel for
the U.S. Underwriters.
(m) Conditions to Purchase of U.S. Option Securities.
In the event that the U.S. Underwriters exercised their option
provided in Section 2(b) hereof to purchase all or any portion
of the U.S. Option 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 U.S. Representatives 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 U.S. Underwriters, dated such Date of
Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the
same effect as the opinions required by Section 5(b)
hereof.
(iii) Opinion of Counsel for Underwriters. The
favorable opinion of Sidley & Austin, dated such Date of
Delivery, relating to the U.S. 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
U.S. Representatives and dated such Date of Delivery,
substantially in the same form and substance as the
letter furnished to the U.S. Representatives 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 U.S. Option
Securities, on a Date of Delivery which is after the Closing
Time, the obligations of the several U.S. Underwriters to
purchase the relevant U.S. Option Securities, may be
terminated by the U.S. Representatives 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.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. Each of the
Company and Lincoln, jointly and severally, agrees to
indemnify and hold harmless each U.S. Underwriter and each
person, if any, who controls any U.S. Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act as follows:
(i) against any and all loss, liability, claim,
damage and expense whatsoever, as incurred, arising out
of any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or
any amendment thereto), including the Rule 430A
Information 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 (A) 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;
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 U.S. Underwriter 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 U.S. Underwriter severally agrees to indemnify and hold
harmless the Company, its directors, each of its officers who
signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of
the 1933 Act or Section 20 of the 1934 Act against any and all
loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as
incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in
the Registration Statement (or any amendment thereto),
including the Rule 430A Information 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 U.S. Underwriter 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 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 U.S. Underwriters
on the other hand from the offering of the Securities pursuant
to this Agreement or (ii) if the allocation provided by clause
(i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of
the Company and Lincoln on the one hand and of the U.S.
Underwriters 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.
The relative benefits received by the Company and Lincoln
on the one hand and the U.S. Underwriters on the other hand in
connection with the offering of the U.S. Securities pursuant
to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting
expenses) received by the Company and the total underwriting
discount received by the U.S. Underwriters, in each case as
set forth on the cover of the U.S. Prospectus, or, if Rule 434
is used, the corresponding location on the Term Sheet bear to
the aggregate initial public offering price of the U.S.
Securities as set forth on such cover.
The relative fault of the Company and Lincoln on the one
hand and the U.S. Underwriters on the other hand shall be
determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates
to information supplied by the Company or by the U.S.
Underwriters 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 U.S. Underwriters agree that
it would not be just and equitable if contribution pursuant to
this Section 7 were determined by pro rata allocation (even if
the U.S. Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not
take account of the equitable considerations referred to above
in this Section 7. The aggregate amount of losses,
liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7
shall be deemed to include any legal or 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 U.S.
Underwriter shall be required to contribute any amount in
excess of the amount by which the total price at which the
U.S. Securities underwritten by it and distributed to the
public were offered to the public exceeds the amount of any
damages which such U.S. Underwriter 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.
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 a U.S. Underwriter 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 U.S. Underwriter, and each
director of the Company, each officer of the Company who
signed the Registration Statement, and each person, if any,
who controls the Company within he 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 U.S. Underwriters'
respective obligations to contribute pursuant to this Section
7 are several in proportion to the number of Initial U.S.
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 U.S. Underwriter
or controlling person, or by or on behalf of the Company or
Lincoln, and shall survive delivery of the Securities to the
U.S. Underwriters.
SECTION 9. Termination of Agreement.
(a) Termination; General. The U.S. Representatives may
terminate this Agreement, by notice to the Company, at any
time at or prior to Closing Time (i) if there has been, since
the time of execution of this Agreement or since the
respective dates as of which information is given in the U.S.
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 U.S. Representatives,
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 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 U.S.
Underwriters. If one or more of the U.S. Underwriters shall
fail at Closing Time or a Date of Delivery to purchase the
U.S. Securities which it or they are obligated to purchase
under this Agreement (the "Defaulted Securities"), the U.S.
Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting U.S.
Underwriters, or any other underwriters, to
purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the U.S. Representatives
shall not have completed such arrangements within such 24-hour
period, then:
(a) if the number of Defaulted Securities does not
exceed 10% of the number of Securities to be purchased on such
date, each of the non-defaulting U.S. Underwriters shall be
obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective
underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting U.S. Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of
the number of Securities to be purchased on such date, this
Agreement or, with respect to any Date of Delivery which
occurs after the Closing Time, the obligation of the 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 U.S. Underwriter.
No action taken pursuant to this Section shall relieve
any defaulting U.S. Underwriter from liability in respect of
its default.
In the event of any such default which does not result in
a termination of this Agreement or, in the case of a Date of
Delivery which is after the Closing Time, which does not
result in a termination of the obligation of the U.S.
Underwriters to purchase and the Company to sell the relevant
U.S. Option Securities, as the case may be, either the U.S.
Representatives or the Company shall have the right to
postpone Closing Time or the relevant Date of Delivery, as the
case may be, for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or
Prospectuses or in any other documents or arrangements. As
used herein, the term "U.S. Underwriter" includes any person
substituted for a U.S. Underwriter 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 U.S.
Underwriters shall be directed to the Representatives 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 U.S. Underwriters, 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 U.S. Underwriters, 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 U.S. Underwriters, 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 U.S.
Underwriter 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.
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
Underwriters, the Company and Lincoln in accordance with its
terms.
Very truly yours,
AMERICAN STATES FINANCIAL
CORPORATION
/s/ Thomas M. Ober
By:
Name: Thomas M. Ober
Title: Secretary
LINCOLN NATIONAL CORPORATION
/s/ Barbara S. Kowalczyk
By:
Name: Barbara S. Kowalczyk
Title: Senior Vice President
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
GOLDMAN, SACHS & CO.
By /s/ David C. Sherwood
Authorized Signatory
For themselves and as U.S. Representatives of the other U.S.
Underwriters named in Schedule A hereto.
<PAGE>
SCHEDULE A
Number of
Initial
Name of Underwriter Securities
Merrill Lynch, Pierce, Fenner & Smith Incorporated 1,412,500
Goldman, Sachs & Co. 1,412,500
ABN AMRO Securities (USA) Inc. 150,000
Bear, Stearns & Co. Inc. 150,000
Sanford C. Bernstein & Co., Inc. 150,000
Alex, Brown & Sons Incorporated 150,000
CS First Boston Corporation 150,000
Dillon, Read & Co. Inc. 150,000
Donaldson, Lufkin & Jenrette Securities Corporation 150,000
A.G. Edwards & Sons, Inc. 150,000
Lazard Freres & Co. LLC 150,000
Lehman Brothers Inc. 150,000
Morgan Stanley & Co. Incorporated 150,000
Oppenheimer & Co., Inc. 150,000
Paine Webber Incorporated 150,000
Prudential Securities Incorporated 150,000
Salomon Brothers Inc. 150,000
Schroder Wertheim & Co. Incorporated 150,000
Smith Barney Inc. 150,000
Wasserstein Perella Securities, Inc. 150,000
EVEREN Securities, Inc. 75,000
Edward D. Jones & Co. 75,000
Ladenberg, Thalmann & Co. Inc. 75,000
Advest, Inc. 75,000
Robert W. Baird & Co. Incorporated 75,000
M.R. Beal & Company 75,000
J.C. Bradford & Co. 75,000
City Securities Corporation 75,000
Conning & Company 75,000
Dain Bosworth Incorporated 75,000
Dominick & Dominick, Incorporated 75,000
Dowling & Partners Securities, LLC 75,000
First Manhattan Co. 75,000
Fox-Pitt, Kelton Inc. 75,000
Furman Selz LLC 75,000
J.J.B. Hilliard, W. L. Lyons, Inc. 75,000
Janney Montgomery Scott Inc. 75,000
Kirkpatrick, Pettis, Smith, Polian Inc. 75,000
Legg Mason Wood Walker, Incorporated 75,000
McDonald & Company Securities, Inc. 75,000
Morgan Keegan & Company, Inc. 75,000
NatCity Investments, Inc. 75,000
David A. Noyes & Company 75,000
Pacific Crest Securities 75,000
Piper Jaffray Inc. 75,000
Principal Financial Securities, Inc. 75,000
Ragen MacKenzie Incorporated 75,000
Raymond James & Associates, Inc. 75,000
The Robinson-Humphrey Company, Inc. 75,000
Roney & Co., LLC 75,000
Traub and Company, Inc. 75,000
Utendahl Capital Partners, L.P. 75,000
Wheat, First Securities, Inc. 75,000
Total 8,000,000
<PAGE>
SCHEDULE B
American States Financial Corporation
8,000,000 Shares of Common Stock
(No Par Value)
1. The initial public offering price per
share for the U.S. Securities, determined as
provided in said Section 2, shall be $23.00.
2. The purchase price per share for the U.S.
Securities to be paid by the several U.S.
Underwriters shall be $21.70, being an amount equal
to the initial public offering price set forth above
less $1.30 per share; provided that the purchase
price per share for any U.S. 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 U.S. Securities but not payable on the
U.S. Option Securities.
<PAGE>
SCHEDULE C
1. F. Cedric McCurley
2. William J. Lawson
3. Jerome T. Gallogly
4. David N. Hafling
5. Todd R. Stephenson
6. Harry R. Simpson
7. Thomas M. Ober
8. J. Robert Coffin
9. Janis E. Stoddard-Smith
10. Ronald K. Young
11. Robert A. Anker
12. Edwin J. Goss
13. Stephen J. Paris
14. Paula M. Parker-Sawyers
15. William E. Pike
16. Gabriel L. Shaheen
17. Milton O. Thompson
<PAGE>
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 U.S.
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 U.S.
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 U.S. Underwriters pursuant to the
U.S. Purchase Agreement and, when issued and delivered by the
Company pursuant to the U.S. Purchase Agreement against
payment of the consideration set forth in the U.S. Prospectus,
will be validly issued and fully paid and non-assessable.
(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 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 U.S. 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.
(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 U.S. 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 U.S. Purchase Agreement or for the offering, issuance
or sale of the Securities to the Underwriters;
(xviii) The execution, delivery and performance of the
U.S. Purchase Agreement and the consummation of the
transactions contemplated in the U.S. 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 U.S. 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 U.S.
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, government instrumentality
or court, domestic or foreign, having jurisdiction over the Company or
any subsidiary or any of their respective properties, assets or operations.
(xix) 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
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 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 qualifed by, or
that it is otherwise subject to, any treatise, written policy or other
documents relating to legal opinions, including, without limitation, the
Legal Opinion Accord of the ABA Section of Business Law (1991).
<PAGE>
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, 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).
<PAGE>
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 U.S.
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.
(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
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 prospectuses 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).
<PAGE>
Exhibit B
May 22, 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 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:
American States Financial Corporation
2,000,000 Shares of Common Stock
PURCHASE AGREEMENT
Dated: May 22, 1996
<PAGE>
Table of Contents
PURCHASE AGREEMENT . . . . . . . . . . . . . . . . . . . . . .1
SECTION 1. Representations and Warranties. . . . . . . .3
(a) Representations and Warranties by the Company and
Lincoln. . . . . . . . . . . . . . . . . . . . . . .4
(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. . . . . 16
(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
(l) Compliance with NASD Rules . . . . . . . . . . . . 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. . . . . . . . . . . . . . . . . 22
(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
SECTION 11. Notices. . . . . . . . . . . . . . . . . 29
SECTION 12. Parties. . . . . . . . . . . . . . . . . 29
SECTION 13. GOVERNING LAW AND TIME . . . . . . . . . 30
SECTION 14. Effect of Headings.. . . . . . . . . . . 30
<PAGE>
American States Financial Corporation
2,000,000 Shares of Common Stock
(No Par Value)
PURCHASE AGREEMENT
May 22, 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.
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
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 April 24, 1996 and the preliminary U.S.
Prospectus dated April 24, 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, 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 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.
(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 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 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.
(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 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 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 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 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 wire
transfer of immediately available funds to an account
specified by 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 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 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 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.
(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 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.
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
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 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
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.
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;
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 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.
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.
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
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 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.
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: /s/ Thomas M. Ober
Name: Thomas M. Ober
Title: Secretary
LINCOLN NATIONAL CORPORATION
By: /s/ Barbara S. Kowalczyk
Name: Barbara S. Kowalczyk
Title: Senior Vice President
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH INTERNATIONAL
GOLDMAN SACHS INTERNATIONAL
By: /s/ David C. Sherwood
Authorized Signatory
For themselves and as Lead Managers of the other
International Managers named in Schedule A hereto.
<PAGE>
SCHEDULE A
Number of
Initial
Name of International Managers Securities
Merrill Lynch International..................... 825,000
Goldman Sachs International..................... 825,000
Banque Nationale de Paris....................... 70,000
Barclays de Zoete Wedd Limited.................. 70,000
Fox-Pitt, Kelton N.V............................ 70,000
NatWest Securities Limited...................... 70,000
RBC Dominion Securities Inc..................... 70,000
Total...................................... 2,000,000
<PAGE>
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 $23.00.
2. The purchase price per share for the
International Securities to be paid by the several
International Managers shall be $21.70, being an
amount equal to the initial public offering price
set forth above less $1.30 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.
<PAGE>
SCHEDULE C
1. F. Cedric McCurley
2. William J. Lawson
3. Jerome T. Gallogly
4. David N. Hafling
5. Todd R. Stephenson
6. Harry R. Simpson
7. Thomas M. Ober
8. J. Robert Coffin
9. Janis E. Stoddard-Smith
10. Ronald K. Young
11. Robert A. Anker
12. Edwin J. Goss
13. Stephen J. Paris
14. Paula M. Parker-Sawyers
15. William E. Pike
16. Gabriel L. Shaheen
17. Milton O. Thompson
<PAGE>
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.
(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.
(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;
(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 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).
<PAGE>
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).
<PAGE>
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.
(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).
<PAGE>
Exhibit B
May 22, 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 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:
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT ("Agreement"), dated
as of May 29, 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 11,500,000
outstanding and new shares of the Common Stock, in a primary
offering.
WHEREAS, following completion of the Public Offering, LNC
will continue to own approximately 83% of the outstanding
shares of Common Stock (approximately 81% 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 pursuant to Rule
144 or Rule 144A, 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 or Rule 144A.
(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) "Rule 144A" means Rule 144A 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 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, (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 than 10% 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 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 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 sol 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;
(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 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 t 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;
(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 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 base
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 reasonably
satisfactory to the indemnified party. After notice form 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 part,
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. As indemnified party will 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
part; 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. 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 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 measures 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
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
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 in order 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 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;
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.
[next page is signature page]
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
/s/ Barbara S. Kowalczyk
By: ____________________________
Name: Barbara S. Kowalczyk
Title: Senior Vice President
AMERICAN STATES FINANCIAL CORPORATION
/s/ Thomas M. Ober
By: _____________________________
Name: Thomas M. Ober
Title: Secretary
