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EXHIBIT 1.1
$82,500,000*
AICI CAPITAL TRUST
ACCEPTANCE INSURANCE COMPANIES INC.
% Preferred Securities
(Liquidation Amount $25 per Preferred Security)
UNDERWRITING AGREEMENT
July ___, 1997
ADVEST, INC.
EVEREN SECURITIES, INC.
As Representatives of the Several
Underwriters
c/o ADVEST, INC.
Xxx Xxxxxxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
AICI Capital Trust (the "Trust"), a statutory business trust organized
under the Business Trust Act (the "Delaware Act") of the State of Delaware
(Chapter 38, Title 12, of the Delaware Business Code, 12 Del. C. Section 3801 et
seq.), and Acceptance Insurance Companies Inc., a Delaware corporation (the
"Company"), as depositor of the Trust and as guarantor, hereby confirm their
agreement with you and the several underwriters, on whose behalf you have been
duly authorized to act as their representatives (the "Representatives"), as
follows:
SECTION 1. Introduction. The Company and the Trust agree, upon the terms
and conditions set forth in this Underwriting Agreement (this "Agreement"), to
issue and sell to the several underwriters identified in Schedule A annexed
hereto (the "Underwriters"), who are acting severally and not jointly, an
aggregate liquidation amount of $82,500,000 (the "Firm Securities") of the
Trust's % preferred securities (the
______________________
* Plus an option to acquire up to an additional $12,375,000 aggregate
liquidation amount of Preferred Securities from the Trust to cover
over-allotments, if any.
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"Preferred Securities"). The Trust and the Company also propose to issue and
sell to the Underwriters, at the Underwriters' option, up to an additional
$12,375,000 aggregate Liquidation Amount of Preferred Securities (the "Option
Securities") in proportion to the amounts set forth opposite their respective
names in Schedule A hereto. The term "Preferred Securities" as used herein,
unless indicated otherwise, shall mean the Firm Securities and the Option
Securities.
The Preferred Securities and the Common Securities (as defined herein) are
to be issued pursuant to the terms of an Amended and Restated Trust Agreement
dated as of August ___, 1997 (the "Trust Agreement"), among the Company, as
depositor, (and, together with the Trust, the "Offerors"), Bankers Trust Company
("Trust Company"), a New York banking corporation, as property trustee
("Property Trustee"), and Bankers Trust (Delaware) ("Trust Delaware"), a
Delaware banking corporation, as Delaware trustee ("Delaware Trustee"). The
Preferred Securities will be guaranteed by the Company on a subordinated basis
and subject to certain limitations with respect to distributions and payments
upon liquidation, redemption or otherwise (the "Guarantee") pursuant to the
Guarantee Agreement dated as of August ___, 1997 (the "Guarantee Agreement"),
between the Company and the Trust Company, as Trustee (the "Guarantee Trustee").
The assets of the Trust will consist of % Junior Subordinated Deferrable
Interest Debentures, due ______, 2027 (the "Junior Subordinated Debentures") of
the Company which will be issued under a Junior Subordinated Indenture dated as
of August ___, 1997 (the "Indenture"), between the Company and the Trust
Company, as Trustee (the "Indenture Trustee"). Under certain circumstances, the
Junior Subordinated Debentures will be distributable to the holders of undivided
beneficial interests in the assets of the Trust. The entire proceeds from the
sale of the Preferred Securities will be combined with the entire proceeds from
the sale by the Trust to the Company of the Trust's common securities (the
"Common Securities"), and will be used by the Trust to purchase an equivalent
amount of the Junior Subordinated Debentures.
The Offerors have filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-28749) and a related
preliminary prospectus for the registration of the Preferred Securities, the
Guarantee and the Junior Subordinated Debentures under the Securities Act of
1933, as amended (the "Securities Act"), and the rules and regulations
thereunder (the "Securities Act Regulations"). The Offerors have prepared and
filed such amendments thereto, if any, and such amended preliminary
prospectuses, if any, as may have been required to the date hereof, and will
file such additional amendments thereto and such amended prospectuses as may
hereafter be required. The registration statement has been declared
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effective under the Securities Act by the Commission. The registration
statement as amended at the time it became effective (including the prospectus
and all information deemed to be a part of the registration statement at the
time it became effective pursuant to Rule 430A(b) of the Securities Act
Regulations) is hereinafter called the "Registration Statement," except that, if
the Company files a post-effective amendment to such registration statement
which becomes effective prior to the Closing Date (as defined below),
"Registration Statement" shall refer to such registration statement as so
amended. Each prospectus included in the registration statement, or amendments
thereof, before it became effective under the Securities Act and any prospectus
filed with the Commission by the Company with the consent of the Underwriters
pursuant to Rule 424(a) of the Securities Act Regulations (including the
documents incorporated by reference therein) is hereinafter called the
"Preliminary Prospectus." The term "Prospectus" means the final prospectus
(including the documents incorporated by reference therein, if any), as first
filed with the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the
Securities Act Regulations. The Commission has not issued any order preventing
or suspending the use of any Preliminary Prospectus.
SECTION 2. Representations and Warranties. Each of the Offerors
represents and warrants to, and agrees with, each of the Underwriters as
follows:
(a) The Company is duly incorporated and validly existing as a
corporation in good standing under the laws of the State of Delaware with power
and authority (corporate and other) to own, lease, and operate its properties
and conduct its business as described in the Prospectus (as defined in Section
2(e) of this Agreement); the Company's principal operating subsidiaries are
Acceptance Insurance Company, a Nebraska corporation, Acceptance Indemnity
Insurance Company, a Nebraska corporation, Phoenix Indemnity Insurance Company,
an Arizona corporation, Redland Insurance Company, an Iowa corporation, American
Growers Insurance Company, a Nebraska corporation, Acceptance Casualty Insurance
Company, a Texas corporation and American Agrisurance Inc., an Iowa corporation
(each a "Subsidiary"); the Company owns, directly or indirectly, beneficially
and of record all of the outstanding capital stock of each Subsidiary free and
clear of any claim, lien, encumbrance or security interest, except as described
in the Prospectus. The Company and each of its Subsidiaries is duly qualified
to do business and is in good standing as a foreign corporation in each
jurisdiction in which any of them own or lease properties, has an office, or in
which the business conducted by any of them make such qualification necessary,
except where the failure to so qualify would not have a material adverse effect
on the condition (financial or otherwise), business, prospects,
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assets, properties, results of operations, or net worth of the Company and its
Subsidiaries taken as a whole ("Material Adverse Effect"); and no proceeding has
been instituted in any jurisdiction revoking, limiting or curtailing, or seeking
to revoke, limit or curtail, such power and authority or qualification.
(b) The Preferred Securities will be duly and validly authorized for
issuance and sale to the Underwriters pursuant to this Agreement and, when
executed and authenticated in accordance with the terms of the Trust Agreement
and delivered to the Underwriters against payment of the consideration set forth
herein, will constitute valid and binding obligations of the Trust enforceable
in accordance with their terms and entitled to the benefits provided by the
Trust Agreement (except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership, moratorium, fraudulent
conveyance or similar laws relating to or affecting creditors' rights generally
or general equity principles (whether considered in a proceeding in equity or at
law)). The Trust Agreement has been duly authorized and, when executed by the
proper officers of the Trust and delivered by the Trust, will have been duly
executed and delivered by the Trust and will constitute a valid and binding
instrument of the Trust, enforceable in accordance with its terms (except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, receivership, moratorium, fraudulent conveyance or similar laws
relating to or affecting creditors' rights generally or general equity
principles (whether considered in a proceeding in equity or at law)). The
Junior Subordinated Debentures have been duly and validly authorized for
delivery by the Company and, when duly authenticated in accordance with the
terms of the Indenture and delivered to the Trust against payment of the
consideration set forth herein, will constitute valid and binding obligations of
the Company enforceable against the Company in accordance with their terms
(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent conveyance or
similar laws relating to or affecting creditors' rights generally or general
equity principles (whether considered in a proceeding in equity or at law)).
The Indenture has been duly authorized and, when executed by the proper officers
of the Company and delivered by the Company, will have been duly executed and
delivered by the Company and will constitute a valid and binding instrument of
the Company, enforceable in accordance with its terms (except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization , receivership, moratorium, fraudulent conveyance or similar laws
relating to or affecting creditors' rights generally or general equity
principles (whether considered in a proceeding in equity or at law). The Trust
Agreement, the Guarantee Agreement, and the Indenture have
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been duly qualified under the Trust Indenture Act; and the Preferred Securities,
the Common Securities, the Trust Agreement, the Guarantee Agreement, the Junior
Subordinated Debentures and the Indenture conform in all material respects to
the descriptions thereof contained in the Registration Statement and the
Prospectus.
(c) Neither the Trust nor the Company or any Subsidiary, is, or with
the giving of notice or lapse of time or both will be, in violation or breach
of, or in default under, nor will the execution or delivery of, or the
performance and consummation of the transactions contemplated by this Agreement
(including the offer, sale, or delivery of the Preferred Securities), conflict
with, or result in a violation or breach of, or constitute a default under, any
provision of the organization documents of the Trust or the Certificate of
Incorporation, Bylaws (as amended or restated) of the Company, or other
governing documents of the Trust, the Company or any Subsidiary, or of any
provision of any agreement, contract, mortgage, deed of trust, lease, loan
agreement, indenture, note, bond, or other evidence of indebtedness, or other
material agreement or instrument to which the Trust, the Company or any
Subsidiary is a party or by which any of them is bound or to which any of their
properties is subject, nor will the performance by the Offerors of their
obligations hereunder violate any rule, regulation, order, or decree, applicable
to the Trust, the Company or any Subsidiary of any court or any regulatory body,
administrative agency, or other governmental body having jurisdiction over the
Trust, the Company or any Subsidiary or any of their respective properties, or
any order of any court or governmental agency or authority entered in any
proceeding to which the Trust, the Company or any Subsidiary was or is now a
party or by which it is bound, except those, if any, described in the Prospectus
or which are not material to the Company and the Subsidiaries taken as a whole.
No consent, approval, filing, authorization, registration, qualification, or
order, including with or by any insurance regulatory agency, is required for the
execution, delivery, and performance of this Agreement or the consummation of
the transactions contemplated by this Agreement, other than such that have been
obtained or made, except for compliance with the Securities Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and the Blue Sky Laws
applicable to the public offering of the Preferred Securities by the
Underwriters, the clearance of such offering and the underwriting arrangements
evidenced hereby with the National Association of Securities Dealers, Inc.
("NASD"), and the listing of the Preferred Securities on the New York Stock
Exchange ("NYSE"). This Agreement has been duly authorized, executed and
delivered by the Company and the Trust and constitutes a valid and binding
obligation of the Company and the Trust and is enforceable against the Company
and the Trust in accordance with its terms,
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(except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent conveyance or
similar laws relating to or affecting creditors' rights generally or general
equity principles (whether considered in a proceeding in equity or at law)) and
except as the obligations of the Company under the indemnification and
contribution provisions of Section 11 under this Agreement may be limited by
laws or unenforceable as against public policy and an implied covenant of good
faith and fair dealing.
(d) The Commission has not issued any order preventing or suspending
the use of any Preliminary Prospectus, and each Preliminary Prospectus complies
in all material respects with the requirements of the Securities Act and the
Securities Act Regulations. As of the effective date of the Registration
Statement, and at all times subsequent thereto up to the Closing Date or any
Option Closing Date (as defined below), the Registration Statement and the
Prospectus, and any amendments or supplements thereto, contained or will contain
all material statements that are required to be stated therein in accordance
with the Securities Act and the Securities Act Regulations and conformed or will
conform in all material respects to the requirements of the Securities Act and
the Securities Act Regulations, and neither the Registration Statement nor the
Prospectus, nor any amendment or supplement thereto included or will include any
untrue statement of a material fact or omitted or will omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that no representation or warranty is made as
to information contained in or omitted from the Registration Statement, the
Prospectus or any amendment or supplement in reliance upon and in conformity
with written information furnished to the Company and the Trust by or on behalf
of the Underwriters.
(e) Deloitte & Touche LLP which has audited, reviewed, and expressed
its opinion with respect to certain of the financial statements and schedules
filed with the Commission as a part of the Registration Statement and included
or to be included, as the case may be, in the Prospectus and in the Registration
Statement, and whose report is included in the Prospectus and the Registration
Statement are independent accountants as required by the Securities Act and the
Securities Act Regulations.
(f) The financial statements and schedules and the related notes
thereto included or incorporated by reference in the Registration Statement, the
Preliminary Prospectus, and the Prospectus present fairly the financial position
of the entities purported to be shown thereby as of the respective dates of such
financial statements and schedules, and the results of operations and changes in
equity and in cash flows of the entities purported
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to be shown thereby for the respective periods covered thereby, all in
conformity with generally accepted accounting principles consistently applied
throughout the periods involved, except as may be disclosed in the Prospectus.
All adjustments necessary for a fair presentation of the results of such periods
have been made. The Company had an outstanding capitalization as set forth under
the heading "Capitalization" in the Prospectus as of the date indicated therein
and there has been no material change therein since such date except as
disclosed in the Prospectus. The financial, operating, and statistical
information set forth in the Prospectus under the headings "Prospectus Summary,"
"Selected Consolidated Financial Data," "Use of Proceeds," "Capitalization,"
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," "Business" and "Management" are fairly presented and prepared on a
basis consistent with the audited financial statements of the Company.
(g) There is no litigation or governmental proceeding, action, or
investigation pending or, to the knowledge of the Trust or the Company,
threatened, to which the Trust, the Company or any Subsidiary is or may be a
party or to which property owned or leased by the Company or any Subsidiary is
or may be subject, or related to environmental or discrimination matters, which
is required to be disclosed in the Registration Statement or the Prospectus by
the Securities Act or the Securities Act Regulations and is not so disclosed, or
which questions the validity of this Agreement or any action taken or to be
taken pursuant hereto.
(h) Either the Company or a Subsidiary, as the case may be, has good
and marketable title in fee simple to all items of real property and good and
marketable title to all the personal properties and assets reflected as owned by
the Company or a Subsidiary in the Prospectus (or elsewhere in the Registration
Statement), in each case clear of all liens, mortgages, pledges, charges, or
encumbrances of any kind or nature except those, if any, reflected in the
financial statements described above (or elsewhere in the Registration
Statement) or which are not material to the Company and its Subsidiaries taken
as a whole; all properties held or used by the Company or a Subsidiary under
leases, licenses, franchises or other agreements are held by them under valid,
existing, binding, and enforceable leases, franchises, licenses, or other
agreements with respect to which it is not in default.
(i) Neither the Trust nor the Company or any Subsidiary has taken or
will take, directly or indirectly, any action designed to cause or result in, or
which has constituted or which might reasonably be expected to constitute,
stabilization or
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manipulation, under the Exchange Act or otherwise, of the price of the Preferred
Securities.
(j) Except as reflected or incorporated by reference in the
Registration Statement, since the respective dates as of which information is
given in the Registration Statement and as of the Closing Date and Option
Closing Date (as such terms are hereinafter defined):
(i) neither the Company nor any Subsidiary has incurred any
material liabilities or obligations, direct or contingent, or entered into any
material transaction not in the ordinary course of business without the prior
consent of the Representatives;
(ii) the Company has not declared any dividend or other
distribution with respect to its capital stock and neither the Company nor any
Subsidiary has or will be delinquent in the payment of principal or interest on
any outstanding debt obligations; and
(iii) there has not been and will not be any change in the
capital stock or any material change in the indebtedness of the Company or any
Subsidiary (except as may result from the closing of the transactions
contemplated by this Agreement), or any adverse change in the condition
(financial or otherwise), or any development involving a prospective adverse
change in their respective businesses (resulting from litigation or otherwise),
prospects, properties, condition (financial or otherwise), net worth, or results
of operations which is in either case material to the Company and its
Subsidiaries taken as a whole.
(k) There is no material contract or other document, transaction, or
relationship required to be described in the Registration Statement, or to be
filed as an exhibit to the Registration Statement, by the Securities Act or by
the Securities Act Regulations that has not been described or filed as required.
(l) All documents delivered or to be delivered by the Offerors or any
of their representatives in connection with the issuance and sale of the
Preferred Securities were on the dates on which they were delivered, or will be
on the dates on which they are to be delivered, true, complete, and correct in
all material respects.
(m) The Company and each Subsidiary have filed all necessary federal
and all state and foreign income and franchise tax returns and paid all taxes
shown as due thereon; and no tax deficiency has been asserted or to the
knowledge of the Company
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threatened against the Company or any Subsidiary that would have a Material
Adverse Effect, except as described in the Prospectus.
(n) The Company and each Subsidiary has filed, or has had filed on
its behalf, on a timely basis, all materials reports, documents and information,
including, but not limited to annual reports and reports of examination with
each applicable insurance regulatory authority, board of agency, which are
required to be filed by it, except where the failure to have timely filed such
materials, reports, documents and information would not have a Material Adverse
Effect.
(o) Neither the Trust nor the Company or any Subsidiary has, directly
or indirectly, at any time:
(i) made any unlawful contribution to any candidate for
political office, or failed to disclose any contribution in violation of law; or
(ii) made any payment to any federal, state, local, or foreign
government officer or official, or other person charged with similar public or
quasi-public duties, other than payments required or permitted by the laws of
the United States or any jurisdiction thereof or applicable foreign
jurisdictions.
(p) The Company or a Subsidiary owns or possesses adequate rights to
use all material patents, patent applications, trademarks, service marks, trade
names, trademark registrations, servicemark registrations, copyrights, and
licenses necessary for the conduct of the business of the Company and the
Subsidiaries or ownership of their respective properties, and neither the
Company nor any Subsidiary has received notice of conflict with the asserted
rights of others in respect thereof which has not been resolved.
(q) The Company and each Subsidiary have and hold, and at the Closing
Date or Option Closing Date will have and hold, and are operating in compliance
with, and have fulfilled and performed all of their material obligations with
respect to, all material permits, certificates, franchises, grants, easements,
consents, licenses, approvals, charters, registrations, authorizations, and
orders (collectively, "Permits") required under all laws, rules, and regulations
(including, without limitation, laws, rules and regulations applicable to
insurance companies) in connection with their respective businesses, and all of
such Permits are in full force and effect; and there is no pending proceeding,
and neither the Company nor any Subsidiary has received notice of any threatened
proceeding, relating to the revocation or modification of any such Permits.
Neither the Company nor any Subsidiary is (by virtue of any action, omission
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to act, contract to which it is a party or by which it is bound, or any
occurrence or state of facts whatsoever) in violation of any applicable federal,
state, municipal, or local statutes, laws, ordinances, rules, regulations and/or
orders issued pursuant to foreign, federal, state, municipal, or local statutes,
laws, ordinances, rules, or regulations (including those relating to any aspect
of insurance, environmental protection, occupational safety and health, and
equal employment practices) heretofore or currently in effect, except such
violation that has been fully cured or satisfied without recourse or that is not
reasonably likely to have a Material Adverse Effect.
(r) The provisions of any employee pension benefit plan ("Pension
Plan") as defined in Section 3(2) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), in which the Company or any Subsidiary is a
participating employer are in substantial compliance with ERISA, and neither the
Company nor any Subsidiary is in violation of ERISA. The Company, each
Subsidiary, or the plan sponsor thereof, as the case may be, has duly and timely
filed the reports required to be filed by ERISA in connection with the
maintenance of any Pension Plans in which the Company or any Subsidiary is a
participating employer, and no facts, including any "reportable event" as
defined by ERISA and the regulations thereunder, exist in connection with any
Pension Plan in which the Company or any Subsidiary is a participating employer
which might constitute grounds for the termination of such plan by the Pension
Benefit Guaranty Corporation or for the appointment by the appropriate U.S.
District Court of a trustee to administer any such plan. The provisions of any
employee benefit welfare plan, as defined in Section 3(1) of ERISA, in which the
Company or any Subsidiary is a participating employer, are in substantial
compliance with ERISA, and the Company, any Subsidiary, or the plan sponsor
thereof, as the case may be, has duly and timely filed the reports required to
be filed by ERISA in connection with the maintenance of any such plans.
(s) Neither the Company nor the Trust is an open-end investment
company, unit investment trust or face-amount certificate company that is, or is
required to be, registered under Section 8 of the Investment Company Act of
1940, as amended, or subject to regulation under such Act.
(t) Neither this Agreement nor any certificate, statement or other
document delivered or to be delivered by the Offerors or any Subsidiary contains
or will contain any untrue statement of a material fact or omits or will omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
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(u) The Company is not aware of any threatened or pending downgrading
in the rating of any Subsidiary by A.M. Best Company, Inc., and the Preferred
Securities have received the ratings set forth in the Registration Statement.
Any certificate signed by any director or officer of the Company or the
Trust, as the case may be, and delivered to the Representatives or to counsel
for the Underwriters shall be deemed a representation and warranty of the
Company or the Trust, as the case may be, to the Underwriters as to the matters
covered thereby.
Any certificate delivered by the Company or the Trust, as the case may be,
to their respective counsel for purposes of enabling such counsel to render an
opinion pursuant to Section 8 will also be furnished to the Representatives and
counsel for the Underwriters and shall be deemed to be additional
representations and warranties to the Underwriters by the Company and the Trust
as to the matters covered thereby.
SECTION 3. Purchase, Sale and Delivery to Underwriters, Closing. On the
basis of the representations and warranties herein contained and subject to the
terms and conditions herein set forth, the Trust and the Company agree that the
Trust will issue and sell to the Underwriters, and each of the Underwriters
agrees, severally and not jointly to purchase from the Trust, the number of Firm
Securities set forth opposite the name of such Underwriter in Schedule A at a
purchase price of $25 per Firm Security.
Payment of the purchase price for, and delivery of, the Firm Securities
shall be made at the offices of Xxxxxx & Xxxxxx, 399 Park Avenue, New York, New
York, or at such other place as shall be agreed upon by the Representatives, the
Trust and the Company, at 9:00 A.M. local time, on the third or fourth business
day (unless postponed in accordance with the provisions of Section 14) following
the date of this Agreement, or such other time not later than ten (10) business
days after such date as shall be agreed upon by the Representatives, the Trust
and the Company (such time and date of payment and delivery being herein called
the "Closing Date").
As compensation (the "Underwriting Commission") for the commitments of the
Underwriters contained in this Section 3, the Company hereby agrees to pay to
the Underwriters an amount equal to $ ___ per Preferred Security. Such payment
will be made on the Closing Date or on the Option Closing Date (as defined
below) with respect to the Option Securities.
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Payment for the Firm Securities shall be made to the Trust by wire transfer
of immediately available funds, against delivery to the Underwriter of the Firm
Securities to be purchased by it. The Firm Securities shall be issued in the
form of one or more fully registered global securities (the "Global Securities")
in book-entry form in such denominations and registered in the name of the
nominee of The Depository Trust Company (the "DTC") or in such names as the
Representatives may request in writing at least two business days before the
Closing Date. The Global Securities representing the Firm Securities shall be
made available for examination by the Representatives and counsel to the
Underwriters not later than 9:30 A.M. local time on the last business day prior
to the Closing Date.
In addition, on the basis of the representations, warranties, and
agreements contained herein, but subject to the terms and conditions set forth
herein, the Trust hereby grants to the Underwriters an option to purchase,
severally and not jointly, from the Trust the Option Securities in the same
proportion as the number of Preferred Securities set forth opposite their names
on Schedule A bears to the total number of Firm Securities, at the same purchase
price per Preferred Security to be paid for the Firm Securities, for use solely
in covering any over-allotments made by the Underwriters in the sale and
distribution of the Firm Securities. The option granted hereunder may be
exercised at any time (but not more than once) within thirty (30) days after the
date of this Agreement, upon notice by the Representatives to the Trust which
sets forth the aggregate liquidation amount of Option Securities as to which the
Underwriters are exercising the option, and the time and place at which the
certificate representing the Option Securities will be delivered. Such time of
delivery may not be earlier than the Closing Date and herein is called the
"Option Closing Date." The Option Closing Date shall be determined by the
Representatives, but if at any time other than the Closing Date, shall not be
earlier than three nor later than five full business days after delivery of such
notice to exercise. Certificates for the Option Securities will be made
available for inspection at least 24 hours prior to the Option Closing Date at
the offices of the DTC, or its designated custodian, or at such other location
as specified by the Representatives. The manner of payment for a delivery of
the Option Securities shall be the same as for the Firm Securities as specified
in this Section 3.
SECTION 4. Representations and Warranties of the Underwriters. The
Representatives, on behalf of the Underwriters, represent and warrant to the
Company that the information set forth on the inside front cover page of the
Prospectus relating to stabilization and in the first (including the table
thereunder), second, fifth and seventh paragraphs of the section in the
Prospectus entitled "Underwriting" was the only written
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information furnished to the Company by and on behalf of any Underwriter
expressly for use in connection with the preparation of the Registration
Statement, and is correct and complete in all material respects and does not
include any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading.
SECTION 5. Offering by the Underwriters. The Trust and the Company are
advised by the Representatives that the Underwriters propose to make a public
offering of the Preferred Securities, on the terms and conditions set forth in
the Registration Statement from time to time as and when the Underwriters deem
advisable after the Registration Statement becomes effective. Because the NASD
is expected to view the Preferred Securities as interests in a direct
participation program, the offering of the Preferred Securities is being made in
compliance with the applicable provisions of Rule 2810 of the NASD's Conduct
Rules.
SECTION 6. Agreements of the Offerors. Each of the Offerors covenants and
agrees with the Underwriter that:
(a) If any information shall have been omitted from the Registration
Statement in reliance upon Rule 430A, the Company, at the earliest possible
time, will furnish the Representatives with a copy of the Prospectus to be filed
by the Offerors with the Commission to comply with Rule 424(b) and Rule 430A
under the Securities Act, and, will file such Prospectus with the Commission in
compliance with such Rules. Upon compliance with such Rules, the Company will
so advise the Representatives promptly. The Company will advise the
Representatives and counsel to the Underwriters promptly of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or of the institution of any proceedings for that purpose, or of any
notification received by the Company of the suspension of qualification of the
Preferred Securities for sale in any jurisdiction or the initiation or
threatening of any proceedings for that purpose. The Company also will advise
the Representatives and counsel to the Underwriters promptly of any request of
the Commission for amendment or supplement of the Registration Statement, of any
Preliminary Prospectus, or of the Prospectus, or for additional information, and
the Offerors will not file any amendment or supplement to the Registration
Statement (either before or after it becomes effective), to any Preliminary
Prospectus, or to the Prospectus (including a prospectus filed pursuant to Rule
424(b)) if the Representatives have not been furnished with a copy prior to such
filing or if the Representatives reasonably object to such filing.
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(b) For the period during which a Prospectus relating to the
Preferred Securities is required to be delivered under the Securities Act, the
Offerors shall comply with all requirements imposed on them by the Securities
Act, as now and hereafter amended, and by the Securities Act Regulations, as
from time to time in force, so far as is necessary to permit the continuance of
sales or dealings in the Preferred Securities as contemplated by the provisions
hereof and the Prospectus. If any event occurs as a result of which the
Prospectus, including any subsequent amendment or supplement, would include an
untrue statement of a material fact, or would omit to state any material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or if
it becomes necessary at any time during the delivery period referred to in the
preceding sentence to amend the Prospectus, including any amendment or
supplement thereto, to comply with the Securities Act, the Company promptly will
advise the Representatives and counsel to the Underwriters thereof and the
Offerors will promptly prepare and file with the Commission an amendment or
supplement that will correct such statement or omission or an amendment that
will effect such compliance; and, if any Underwriter is required to deliver a
prospectus nine (9) months or more after the effective date of the Registration
Statement, the Company, upon request of the Representatives but at the expense
of such Underwriter, will prepare promptly such prospectus or prospectuses as
may be necessary to permit compliance with the requirements of Section 10(a)(3)
of the Securities Act.
(c) The Offerors will not, prior to the Option Closing Date or thirty
(30) days after the date of this Agreement, whichever occurs first, without the
prior consent of the Representatives, incur any material liability or
obligation, direct or contingent, or enter into any material transaction, other
than in the ordinary course of business, or any transaction with a related party
which is required to be disclosed in the Prospectus pursuant to Item 404 of
Regulation S-K under the Securities Act, except as contemplated by the
Prospectus.
(d) The Company will make generally available to its security holders
and the Representatives an earnings statement of the Company as soon as
practicable, but in no event later than fifteen (15) months after the end of the
Company's current fiscal quarter, covering a period of twelve (12) consecutive
calendar months beginning after the effective date of the Registration
Statement, but beginning not later than four (4) months after such effective
date, which will satisfy the provisions of the last subsection of Section 11(a)
of the Securities Act and Rule 158 promulgated thereunder.
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15
(e) During such period as a prospectus is required by law to be
delivered in connection with sales by an underwriter or dealer, the Company will
furnish to the Representatives, at the expense of the Company, copies of the
Registration Statement, the Prospectus, any Preliminary Prospectus, and all
amendments and supplements to any such documents in each case as soon as
available and in such quantities as the Representatives may reasonably request,
for the purposes contemplated by the Securities Act.
(f) The Offerors will use their best efforts to take or cause to be
taken in cooperation with the Representatives and counsel to the Underwriters
all actions required in qualifying or registering the Preferred Securities for
sale under the Blue Sky Laws of such jurisdictions as the Representatives may
reasonably designate, provided the Offerors shall not be required to qualify
generally as foreign corporations or as a dealer in securities or to consent
generally to the service of process under the law of any such state (except with
respect to the offering and sale of the Preferred Securities), and will continue
such qualifications or registrations in effect so long as reasonably requested
by the Representatives to effect the distribution of the Preferred Securities
(including, without limitation, compliance with all undertakings given pursuant
to such qualifications or registrations). In each jurisdiction where any of the
Preferred Securities shall have been qualified as provided above, the Offerors
will file such reports and statements as may be required to continue such
qualification for a period of not less than one (1) year from the date of this
Agreement.
(g) The Company will furnish to its security holders annual reports
containing financial statements audited by independent public accountants.
During the period ending three (3) years after the date of this Agreement, (i)
as soon as practicable after the end of the fiscal year, the Company will
furnish to the Representatives two copies of the annual report of the Company
containing the audited consolidated balance sheet of the Company as of the close
of such fiscal year and corresponding audited consolidated statements of
earnings, stockholders' equity and cash flows for the year then ended, and (ii)
the Company will file promptly copies of all reports and any definitive proxy or
information statements required to be filed by the Company with the Commission
pursuant to Section 13, 14, or 15 of the Exchange Act. During such three-year
period the Company also will furnish to the Representatives one copy of the
following:
(i) as soon as practicable after the filing thereof, each
document referenced in clause (ii) above or other document filed by the Company
with the Commission;
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(ii) as soon as practicable after the filing thereof, all
reports, statements, other documents and financial statements furnished by the
Company to the New York Stock Exchange ("NYSE") pursuant to requirements of or
agreements with the NYSE; and
(iii) as soon as available, each report, statement, or other
document of the Company mailed to its stockholders.
(h) The Offerors will use their best efforts to satisfy or cause to
be satisfied the conditions to the obligations of the Underwriters in Section 8
hereof.
(i) The Offerors shall take all necessary or appropriate action
within their power to obtain the qualification or listing of the Preferred
Securities on the NYSE.
(j) The Trust shall comply in all respects with the undertakings
given by the Trust in connection with the qualification or registration of the
Preferred Securities for offering and sale under the Blue Sky Laws.
(k) The Trust shall apply the proceeds from its sale of the Preferred
Securities, combined with the entire proceeds from the sale by the Trust to the
Company of the Trust's Common Securities, to purchase an equivalent amount of
Junior Subordinated Debentures. All the proceeds to be received by the Company
from the sale of the Junior Subordinated Debentures will be used in the manner
and for the purposes specified under the heading "Use of Proceeds" in the
Prospectus. The Offerors shall file, and will furnish or cause to be furnished
to the Underwriters and counsel to the Underwriters copies of all reports as may
be required in accordance with Rule 463 under the Securities Act.
(l) Except for the sale of Preferred Securities pursuant to this
Agreement, neither the Company nor any Subsidiary shall, directly or indirectly,
offer, sell, contract to sell, issue, distribute, grant any option, right, or
warrant to purchase or otherwise dispose of any shares of the Preferred
Securities or substantially similar securities, in the open market or otherwise,
for a period of one hundred eighty (180) days after the later of the effective
date of the Registration Statement or the date of this Agreement, without the
express prior written consent of the Representatives.
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SECTION 7. Payment of Expenses and Fees
Whether or not the transactions contemplated hereunder are
consummated, or if this Agreement is terminated for any reason, the Company will
pay or cause to be paid the costs, fees, and expenses incurred in connection
with the offering of the Preferred Securities as follows:
(i) All costs, fees, and expenses incurred in connection with
the performance of the Company's and the Trust's obligations hereunder,
including all fees and expenses of the Company's and the Trust's accountants and
counsel, all costs and expenses incurred in connection with the preparation,
printing, filing, and distribution (including delivery and shipping costs) of
the Registration Statement, each Preliminary Prospectus, and the Prospectus
(including all amendments and exhibits thereto and the financial statements
therein), and amendments and supplements provided for herein, this Agreement and
other underwriting documents, including various Underwriters' letters, and the
Preliminary and Supplemental Blue Sky Memoranda.
(ii) All filing and registration fees and expenses, including
the legal fees and disbursements of counsel, incurred in connection with
qualifying or registering all or any part of the Preferred Securities, the
Guarantee and the Junior Subordinated Debentures for offer and sale under the
Blue Sky Laws.
(iii) All fees and expenses of the Offerors' registrar and
transfer agent; all transfer taxes, if any, incurred in connection with the sale
and delivery of the Preferred Securities to the Underwriters.
(iv) All fees and expenses incurred in connection with obtaining
ratings for the Preferred Securities from Xxxxx'x Investor Services, Inc. and
Standard and Poor's Rating Services.
(v) All fees paid to the NASD relating to its review of the
proposed underwriting arrangements for the Preferred Securities.
(vi) The filing fees of the NYSE and applicable fees charged by
NYSE for listing of the Preferred Securities on the NYSE.
(vii) All other reasonable costs and expenses incident to the
performance of the Company's and the Trust's obligations hereunder which are not
otherwise provided for in this Section 7.
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SECTION 8. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters under this Agreement shall be subject to the
accuracy in all material respects of the representations and warranties on the
part of the Company and the Trust set forth herein as of the Closing Date, and
if applicable, as of the Option Closing Date, as the case may be, to the
accuracy in all material respects of the statements of the Offerors' directors
and officers, to the performance in all material respects by the Company and the
Trust of their obligations hereunder, and to the following additional
conditions, except to the extent expressly waived in writing by the
Representatives:
(a) The Registration Statement and all post-effective amendments
thereto shall have been declared effective by the Commission no later than 5:30
p.m. eastern time, on the date of this Agreement, or such later time as shall
have been consented to by the Representatives, but in any event not later than
5:30 p.m., eastern time, on the third full business day following the date
hereof; if the Offerors omitted information from the Registration Statement at
the time it became effective in reliance on Rule 430A under the Securities Act,
the Prospectus shall have been filed with the Commission in compliance with Rule
424(b) and Rule 430A under the Securities Act; no stop order suspending the
effectiveness of the Registration Statement or any amendment or supplement
thereto shall have been issued; no proceeding for the issuance of such an order
shall have been initiated or shall be pending or, to the knowledge of the
Offerors or the Representatives, threatened or contemplated by the Commission;
and any request of the Commission for additional information (to be included in
the Registration Statement or the Prospectus or otherwise) shall have been
disclosed to the Representatives and complied with to the Representatives'
satisfaction.
(b) The Preferred Securities, the Guarantee and the Junior
Subordinated Debentures shall have been qualified or registered for sale, or
subject to an available exemption from such qualification or registration, under
the Blue Sky Laws of such jurisdictions as shall have been reasonably specified
by the Representatives and the offering contemplated by this Agreement shall
have been cleared by the NASD.
(c) Since the dates as of which information is given in the
Registration Statement:
(i) There shall not have been any material adverse change, or
any development involving a prospective material adverse change, in the ability
of the Company or any Subsidiary to conduct their respective business (whether
by reason of any court, legislative, other governmental action, order,
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decree, or otherwise), or in the general affairs, condition (financial and
otherwise) business, prospects, properties, management, financial position or
earnings, results of operations, or net worth of the Company or any Subsidiary,
whether or not arising from transactions in the ordinary course of business; and
(ii) Neither the Company nor any Subsidiary shall have sustained
any loss or interference from any labor dispute, strike, fire, flood, windstorm,
accident, or other calamity (whether or not insured) or from any court or
governmental action, order, or decree.
The effect of which on the Company or any Subsidiary, in any such case described
in clause (c)(i) or (ii) above, is in the reasonable opinion of the
Representatives so material and adverse as to make it impracticable or
inadvisable to proceed with the public offering or the delivery of the Preferred
Securities on the terms and in the manner contemplated in the Registration
Statement and the Prospectus.
(d) There shall have been furnished to the Representatives on the
Closing Date, except as otherwise expressly provided below:
(i) An opinion of LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P.,
counsel to the Company, dated as of the Closing Date and any Option Closing
Date, in form and substance substantially in the form attached hereto as Exhibit
A.
(ii) The favorable opinion, dated the Closing Date, of White &
Case, counsel to the Trust Company and Trust Delaware, substantially in the form
attached hereto as Exhibit B.
(iii) The favorable opinion, dated the Closing Date, of
Xxxxxxxx, Xxxxxx & Finger, special Delaware counsel to the Company and the
Trust, substantially to the effect and in the form attached hereto as Exhibit C.
(iv) The favorable opinion, dated the Closing Date, of Xxxxxx &
Xxxxxx, counsel to the Underwriters as to such matters as the Representatives
shall reasonably request.
In rendering such opinions specified in clause (d)(ii), (iii) or
(iv) above, counsel may rely upon an opinion or opinions, each dated the Closing
Date, of other counsel retained by them or the Company as to laws of any
jurisdiction other than the United States or the State of New York or the
General Corporation Law of the State of Delaware, provided that (A) such
reliance is expressly authorized by each opinion so relied upon and a copy of
each such opinion is delivered to the
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Representatives, and (B) counsel shall state in their opinion that they believe
that they and the Underwriters are justified in relying thereon. Insofar as
such opinions involve factual matters, such counsel may rely, to the extent such
counsel deems proper, upon certificates of officers of the Company, its
subsidiaries and the Trust and certificates of public officials.
(e) At the time this Agreement is executed and also on the Closing
Date and the Option Closing Date, as the case may be, there shall be delivered
to the Representatives a letter addressed to the Representatives from Deloitte &
Touche LLP, the Company's independent accountants, the first letter to be dated
the date of this Agreement, the second letter to be dated the Closing Date, and
the third letter to be dated the Option Closing Date, if any, which shall be in
form and substance reasonably satisfactory to the Representatives and shall
contain information as of a date within five days of the date of such letter.
There shall not have been any change set forth in any letter referred to in this
subsection (e) that makes it impracticable or inadvisable in the judgment of the
Representatives to proceed with the public offering or purchase of the Preferred
Securities as contemplated hereby.
(f) On the Closing Date, a certificate signed by the Chairman of the
Board, the President, a Vice Chairman of the Board or any Executive or Senior
Vice President and the principal financial or accounting officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate have
carefully examined the Registration Statement and this Agreement and that:
(i) The representations and warranties of the Offerors in this
Agreement are true and correct in all material respects on and as of the Closing
Date with the same effect as if made on the Closing Date and the Offerors have
complied in all material respects with all the agreements and satisfied in all
material respects all the conditions on its part to be performed or satisfied at
or prior to the Closing Date;
(ii) The Commission has not issued an order preventing or
suspending the use of the Prospectus or any Preliminary Prospectus or any
amendment thereto; no stop order suspending the effectiveness of the
Registration Statement has been issued; and, to the knowledge of the respective
signatories, no proceeding for that purpose has been instituted or is pending or
contemplated under the Securities Act;
(iii) Each of the respective signatories of the certificate has
carefully examined the Registration Statement, the Prospectus, and any
amendments or supplements thereto and neither
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the Registration Statement nor any amendment or supplement thereto includes any
untrue statement of a material fact or omits to state any material fact required
to be stated therein or necessary to make the statements therein not misleading
and, since the date on which the Registration Statement was initially filed, no
event has occurred that was required to be set forth in an amended or
supplemented prospectus or in an amendment to the Registration Statement that
has not been so set forth; provided, however, that no representation need be
made as to information contained in or omitted from the Registration Statement
or any amendment or supplement in reliance upon and in conformity with written
information furnished to the Company and the Trust by or on behalf of any
Underwriter through the Representatives; and
(iv) Since the date on which the Registration Statement was
initially filed with the Commission, there has not been any material adverse
change or a development that is reasonably likely to result in a prospective
material adverse change in the business, properties, financial condition, or
earnings of the Company and its Subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
disclosed in the Registration Statement as heretofore amended or (but only if
the Representatives expressly consent thereto in writing) as disclosed in an
amendment or supplement thereto filed with the Commission and delivered to the
Representatives after the execution of this Agreement; since such date and
except as so disclosed or in the ordinary course of business, neither the
Company nor any Subsidiary has incurred any liability or obligation, direct or
indirect, or entered into any transaction that is material to the Company or
such Subsidiary, as the case may be, not contemplated in the Prospectus; since
such date and except as so disclosed there has not been any change in the
outstanding capital stock of the Company, or any change that is material to the
Company and its Subsidiaries taken as a whole in the short-term debt or
long-term debt of the Company or any Subsidiary; since such date and except as
so disclosed, neither the Company nor any of its Subsidiaries have incurred any
material contingent obligations, and no material litigation is pending or, to
their knowledge threatened against the Company or any Subsidiary.
(g) The Preferred Securities shall have received a rating from each
of Xxxxx'x Investor Service, Inc. and Standard & Poor's Rating Services, each
such rating to be not less than the rating set forth in the Registration
Statement, and no downgrading in the rating accorded the Preferred Securities or
any other debt securities of the Company by any "nationally recognized
statistical rating organization" (as that term is defined by the Securities
Exchange Commission for the purposes of Rule 436(g)(2) under the Securities Act)
shall have occurred, or any public
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announcement that any such organization has under surveillance or review their
ratings of the Preferred Securities or any other debt securities of the Company
(other than an announcement with positive implications of a possible upgrading,
and no implication of a possible downgrading, of such rating), and if, in any
such case, the effect thereof in the reasonable judgment of the Representatives
makes it impracticable or inadvisable to proceed with the offering of the
Preferred Securities.
(h) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents as the
Representatives may reasonably request in connection with the offering of the
Preferred Securities.
If any condition specified in this Section shall not have been fulfilled
when and as required to be fulfilled, this Agreement may be terminated by the
Underwriters by notice from the Representatives to the Company at any time
without liability on the part of any Underwriters, including the
Representatives, or the Company, except for expenses to be paid by the Company
pursuant to Section 7 hereof or reimbursed by the Company pursuant to Section 9
and except to the extent provided in Section 11.
SECTION 9. Reimbursement of Underwriters' Expenses. If the sale of the
Preferred Securities to the Underwriters on the Closing Date is not consummated
because the offering is terminated or indefinitely suspended by the Company or
by the Representatives for any reason permitted by this Agreement, other than a
default of any Underwriter pursuant to Section 12 hereto, the Company will
reimburse the Underwriters for the Underwriters' reasonable out- of-pocket
expenses, including fees and disbursements of their counsel, that shall have
been incurred by the Underwriters in connection with the proposed purchase and
sale of the Preferred Securities in an aggregate amount not to exceed $150,000.
Any such termination or suspension shall be without liability of any party to
the other except that the provisions of this Section 9, and Sections 7 and 11
shall remain effective and shall apply.
SECTION 10. Maintain Effectiveness of Registration Statement. The
Representatives and the Company will use their respective best efforts to
prevent the issuance of any stop order or other such order suspending the
effectiveness of the Registration Statement and, if such stop order is issued,
to obtain the lifting thereof as soon as possible.
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SECTION 11. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of the Securities Act or the Exchange Act, against any losses, claims,
damages, expenses, liabilities, or actions in respect thereof ("Claims"), joint
or several to which such Underwriter or each such controlling person may become
subject under the Securities Act, the Exchange Act, the Securities Act
Regulations, Blue Sky Laws or other federal or state statutory laws or
regulations, at common law or otherwise (including payments made in settlement
of any litigation, if such settlement is effected with the written consent of
the Company, which consent shall not be unreasonably withheld), insofar as such
Claims arise out of or are based upon the inaccuracy or breach of any
representation, warranty, or covenant of the Company or the Trust contained in
this Agreement, any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus, or any amendment or supplement thereto, or in any application filed
under any Blue Sky Law or other document executed by the Offerors for that
purpose or based upon written information furnished by the Offerors and filed in
any state or other jurisdiction to qualify or register any or all of the
Preferred Securities under the securities laws thereof (any such document,
application, or information being hereinafter called a "Blue Sky Application"),
or arise out of or are based upon the omission or alleged omission to state in
any of the foregoing a material fact required to be stated therein or necessary
to make the statements therein not misleading. The Company agrees to reimburse
each Underwriter and each such controlling person promptly for any reasonable
legal fees or other expenses incurred by such Underwriter or any such
controlling person in connection with investigating or defending any such Claim
or appearing as a third-party witness in connection with any such Claim;
provided, however, that the Company will not be liable in any such case to the
extent that:
(i) Any such Claim arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
the Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto or in any Blue Sky Application in reliance upon
and in conformity with the written information furnished by or on behalf of the
Underwriters to the Offerors expressly for use therein pursuant to Section 4 of
this Agreement; or
(ii) Such statement or omission was contained or made in any
Preliminary Prospectus and corrected in the Prospectus and (1) any such Claim
suffered or incurred by any Underwriter (or
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any person who controls such Underwriter) resulted from an action, claim, or
suit by any person who purchased Preferred Securities that are the subject
thereof from such Underwriter in the offering of the Preferred Securities, and
(2) such Underwriter failed to deliver a copy of the Prospectus (as then amended
if the Offerors shall have amended the Prospectus) to such person at or prior to
the confirmation of the sale of such Preferred Securities in any case where such
delivery is required by the Securities Act, unless such failure was due to
failure by the Company to provide copies of the Prospectus (as so amended) to
the Underwriter as required by this Agreement.
(b) Each Underwriter severally, but not jointly, agrees to indemnify
and hold harmless the Offerors, each of their directors, each of their officers
who sign the Registration Statement, and each person who controls the Company or
the Trust within the meaning of the Securities Act, against any Claim to which
the Offerors, or any such director, officer, or controlling person may become
subject under the Securities Act, the Exchange Act, the Securities Act
Regulations, Blue Sky Laws, or other federal or state statutory laws or
regulations, at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of such
Underwriter and the Representatives, which consent shall not be unreasonably
withheld), insofar as such Claim arises out of or is based upon any untrue or
alleged untrue statement of any material fact contained in the Registration
Statement, any Preliminary Prospectus, the Prospectus, or any amendment or
supplement thereto, or in any Blue Sky Application, or arises out of or is based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
in each case to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission was made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, or any
amendment or supplement thereto, or in any Blue Sky Application, in reliance
upon and in conformity with the written information furnished by or on behalf of
such Underwriter to the Offerors pursuant to Section 4 of this Agreement. Each
Underwriter will severally reimburse any legal fees or other expenses reasonably
incurred by the Offerors, or any such director, officer, or controlling person
in connection with investigating or defending any such Claim, and from any and
all Claims resulting from failure of such Underwriter to deliver a copy of the
Prospectus, if the person asserting such Claim purchased Preferred Securities
from such Underwriter and a copy of the Prospectus (as then amended if the
Offerors shall have amended the Prospectus) was not sent or given by or on
behalf of such Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of
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the Preferred Securities to such person, and if the Prospectus (as so amended)
would have cured the defect giving rise to such Claim (unless such failure was
due to a failure by the Company and the Trust to provide sufficient copies of
the Prospectuses (as so amended) to each Underwriter).
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) of this Section 11 of notice of the commencement of any action in
respect of a Claim, such indemnified party will, if a Claim in respect thereof
is to be made against an indemnifying party under such subsection, notify the
indemnifying party in writing of the commencement thereof. In case any such
action is brought against any indemnified party, and such indemnified party
notifies an indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate in and, to the extent that it may wish,
jointly with all other indemnifying parties, similarly notified, assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to the
indemnified party and/or other indemnified parties that are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties.
(d) Upon receipt of notice from the indemnifying party to such
indemnified party of the indemnifying party's election to assume the defense of
such action and upon approval by the indemnified party of counsel selected by
the indemnifying party, the indemnifying party will not be liable to such
indemnified party under subsection (a) or (b) of this Section 11 for any legal
fees or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof, unless:
(i) the indemnified party shall have employed separate counsel
in connection with the assumption of legal defenses in accordance with the
proviso to the last sentence of subsection (c) of this Section 11 (it being
understood, however, that the indemnified party shall not be liable for the
legal fees and expenses of more than one separate counsel (plus local counsel),
approved by the Representatives if one or more of the Underwriters or their
controlling persons are the indemnified parties); or
(ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party
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to represent the indemnified party within a reasonable time after the
indemnified party's notice to the indemnifying party of commencement of the
action;
(e) If the indemnification provided for in this Section 11 is
unavailable to an indemnified party or insufficient to hold harmless an
indemnified party under subsection (a) or (b) of this Section 11 in respect of
any Claim referred to therein, then each indemnifying party, in lieu of
indemnifying such indemnified party, shall, subject, to the limitations
hereinafter set forth, contribute to the amount paid or payable by such
indemnified party as a result of such Claim:
(i) in such proportion as is appropriate to reflect the relative
benefits received by the Offerors on the one hand and the Underwriters on the
other hand from the offering of the Preferred Securities; or
(ii) if the allocation provided by clause (e)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (e)(i) above, but also the
relative fault of the Offerors on the one hand and the Underwriters on the other
hand in connection with the statements or omissions that resulted in such Claim,
as well as any other relevant equitable considerations.
The respective relative benefits received by the Offerors on the one hand
and the Underwriters on the other hand shall be deemed to be in such proportion
that the Underwriters are responsible for that portion of a Claim represented by
the percentage that the amount of the Underwriting Commission bears to the
public offering price of the Preferred Securities, and the Company (including
the Company's directors, officers, and controlling persons) is responsible for
the remaining portion of such Claim.
The relative fault of the Offerors on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Offerors on the one hand or the Underwriters on the other hand and the parties'
relative intent, knowledge, access to information, and opportunity to correct or
prevent such untrue statement or omission. The amount paid or payable by a
party as a result of the Claims referred to above shall be deemed to include,
subject to the limitations set forth in subsections (c) and (d) of this Section
11, any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.
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(f) The Offerors and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section 11 were determined by pro
rata or per capita allocation or by any other method or allocation that does not
take into account the equitable considerations referred to in subsection (e) of
this Section 11. Notwithstanding the other provisions of this Section 11, no
underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Preferred Securities underwritten by it
and distributed to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligation to contribute pursuant to this
Section 11 are several in proportion to their respective underwriting
commitments and not joint.
(g) The obligations of the Company, the Trust and the Underwriters
under this Section 11 shall be in addition to any liability that the Company,
the Trust or the Underwriters may otherwise have.
SECTION 12. Default of Underwriters. It shall be a condition to this
Agreement and to the obligations of the Trust to sell and deliver the Preferred
Securities hereunder, and to the obligations of each Underwriter to purchase the
Preferred Securities in the manner described herein, that, except as hereinafter
provided in this Section 12, each of the Underwriters (except a defaulting
Underwriter) shall purchase and pay for all the Preferred Securities agreed to
be purchased by such Underwriter hereunder upon tender to the Representatives of
all such Preferred Securities in accordance with the terms hereof. If any
Underwriter or Underwriters default in its or their obligations to purchase
Preferred Securities hereunder on either the Closing Date or the Option Closing
Date and the aggregate number of Preferred Securities that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed ten
percent (10%) of the liquidation amount of Preferred Securities the Underwriters
are obligated to purchase on such Closing Date, the Representatives may make
arrangements for the purchase of such Preferred Securities by other persons,
including any of the Underwriters, but if no such arrangements are made by such
Closing Date or Option Closing Date the nondefaulting Underwriters shall be
obligated severally, in proportion to their respective commitments hereunder, to
purchase the Preferred Securities such defaulting Underwriters agreed but failed
to purchase on such Closing Date or Option Closing Date. If any Underwriter or
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Underwriters so default and the liquidation amount of Preferred Securities with
respect to which such default or defaults occur is greater than the above
percentage and arrangements satisfactory to the Representatives for the purchase
of such Preferred Securities by other person are not made within thirty-six (36)
hours after such default, this Agreement will terminate without liability on the
part of any nondefaulting Underwriter or the Company including under Section 7,
except to the extent provided in Section 11.
If Preferred Securities to which a default relates are to be purchased by
the nondefaulting Underwriters or by another party or parties, the
Representatives or the Company shall have the right to postpone the Closing Date
or Option Closing Date, as the case may be, for not more than seven (7) business
days in order that the necessary changes, if any, in the Registration Statement,
Prospectus, and any other documents, as well as any other arrangements, may be
effected. As used in this Agreement, the term "Underwriter" includes any person
substituted for an Underwriter under this Section 12. Nothing herein will
relieve a defaulting Underwriter from liability for its default.
SECTION 13. Effective Date. This Agreement shall become effective
immediately on the date hereof.
SECTION 14. Termination. Without limiting the right to terminate this
Agreement pursuant to any other provision hereof, this Agreement may be
terminated by the Representatives prior to the Closing Date and the option from
the Company and the Trust referred to in Section 3, if exercised, may be
canceled by the Representatives at any time prior to the Option Closing Date,
if:
(a) The Offerors shall have failed, refused, or been unable, at or
prior to the Closing Date or Option Closing Date, as the case may be to perform
any agreement on its part to be performed hereunder.
(b) Any other condition to the obligations of the Underwriters
hereunder is not fulfilled; or
(c) In the Representatives' reasonable judgment, payment for and
delivery of the Preferred Securities is rendered impracticable or inadvisable
because:
(i) Additional governmental restrictions, not in force and
effect on the date hereof, shall have been imposed upon trading in securities
generally or minimum or maximum prices shall have been generally established on
any national securities exchange or over-the-counter market, or trading in
securities generally shall have been suspended on any national securities
exchange or on the Nasdaq Stock Market, or a general banking
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29
moratorium shall have been established by federal or state authorities;
(ii) Any event shall have occurred or shall exist that makes
untrue or incorrect in any material respect any statement or information
contained in the Registration Statement or that is not reflected in the
Registration Statement but should be reflected therein to make the statements or
information contained therein not misleading in any material respect; or
(iii) Any outbreak or escalation of major hostilities or other
national or international calamity or any substantial change in political,
financial or economic conditions shall have occurred or shall have accelerated
to such extent, in the Representatives' reasonable judgment, as to have a
material adverse effect on the general securities market or make it
impracticable or inadvisable to proceed with completion of the sale and payment
for the Preferred Securities as provided in this Agreement.
Any termination pursuant to this Section 14 shall be without liability on
the part of any Underwriter to the Company or on the part of the Company to any
Underwriter (except for expenses to be paid by the Company pursuant to Section 7
or reimbursed by the Company pursuant to Section 9 and except as to
indemnification and contribution to the extent provided in Section 11).
SECTION 15. Representations and Indemnities to Survive Delivery. The
respective indemnity and contribution agreements of the Company and the
Underwriters, and the representations, warranties, covenants, other statements
of the Offerors and of their directors and officers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of any Underwriter, the Offerors, or any
of its or their partners, officers, directors, or any controlling person, as the
case may be, and will survive delivery of and payment for the Preferred
Securities sold hereunder. The respective indemnity and contribution of the
Company and the Underwriters, the provisions of Section 7(a) and Section 9 of
this Agreement, and the representations and warranties of the Offerors will
survive the termination or cancellation of this Agreement.
SECTION 16. Notices. All communications hereunder shall be in writing
and, if sent to the Representatives, will be mailed, delivered, or telecopied
(with receipt confirmed) to Advest, Inc., at 00 Xxxxx Xxxxx Xxxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000, Attention: Xxxxx T.W. Minot, Managing Director (Fax No. (860)
000-0000) with a copy to Xxxxxx Xxxxxx, Xxxxxx & Xxxxxx, 000 Xxxxxxx Xxxxxx,
X.X., Xxxxxxxxxx, X.X. 00000, (Fax No. (000) 000-0000); and if
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30
sent to the Company or the Trust will be mailed, delivered, or telecopied (with
receipt confirmed) to Acceptance Insurance Companies Inc., 000 Xxxxx 00xx
Xxxxxx, Xxxxx 000 Xxxxx, Xxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. Xxxxxx
(Fax No. (000) 000-0000) with a copy to Xxxxxx X. Xxxxxxxxx, LeBoeuf, Lamb,
Xxxxxx & XxxXxx, L.L.P., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (Fax No.
(000) 000-0000).
SECTION 17. Successors. This Agreement will inure to the benefit of and
be binding upon the parties hereto and their respective successors or assigns,
and to the benefit of the directors and officers (and their personal
representatives) and controlling persons referred to in Section 11, and no other
person shall acquire or have any right or obligation hereunder. The terms
"successors or assigns," as used in this Agreement, shall not include any
purchaser of the Preferred Securities from any Underwriter merely by reason of
such purchase.
SECTION 18. Partial Unenforceability. If any section, subsection, clause,
or provision of this Agreement is for any reason determined to be invalid or
unenforceable, such determination shall not affect the validity or
enforceability of any other section, subsection, clause, or provision hereof.
SECTION 19. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
SECTION 20. Entire Agreement. This Agreement embodies the entire
agreement among the parties hereto with respect to the transactions contemplated
herein, and there have not been and are no agreements among the parties with
respect to such transactions other than as set forth or provided for herein.
SECTION 21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
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31
If the foregoing is in accordance with your understanding of our agreement,
kindly sign and return to us the enclosed counterparts hereof, whereupon it will
become a binding agreement among the Company, the Trust and the Underwriters,
including the Representatives, in accordance with its terms.
Very truly yours,
ACCEPTANCE INSURANCE COMPANIES INC.
By: ________________________________
Title: _____________________________
AICI CAPITAL TRUST
By: ACCEPTANCE INSURANCE COMPANIES INC.
as Depositor
By: ________________________________
Title: _____________________________
ADVEST, INC.
EVEREN SECURITIES, INC.
As representatives of the several
Underwriters named in Schedule A hereto.
BY ADVEST, INC.
By: ________________________________
Title: _____________________________
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32
AICI CAPITAL TRUST
ACCEPTANCE INSURANCE COMPANIES INC.
SCHEDULE A
Liquidation Amount of
Firm Securities to be
Name of Underwriter Purchased
------------------- ---------------------
Advest, Inc............................................. $
EVEREN Securities, Inc..................................
Aggregate Liquidation Amount............................ $82,500,000
===========
33
EXHIBIT A
The opinion of special counsel to the Company to be delivered pursuant to
Section 8(d)(i) of the Underwriting Agreement shall be substantially to the
effect that:
1. The Company and each Subsidiary are validly existing as corporations in good
standing under the laws of their jurisdiction of incorporation, with corporate
power and authority necessary to own, lease, and operate their respective
properties and conduct their respective businesses as described in the
Registration Statement.
2. The Company has corporate power and authority necessary to execute, deliver,
and perform the Underwriting Agreement and to issue, sell, and deliver the
Preferred Securities to be sold by it to the Underwriters as provided herein;
the Underwriting Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding obligation the Company and is
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, receivership, moratorium,
fraudulent conveyance or similar laws relating to or affecting creditors' rights
generally and to general principles of equity (whether considered in a
proceeding in equity or in law) and except as the obligations of the Company
under the indemnification and contribution provisions of Section 11 under this
Agreement may be limited by laws or be unenforceable as against public policy,
as to which no opinion is expressed.
3. The Trust Agreement has been duly authorized, executed and delivered by the
Company, and constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, receivership, moratorium,
fraudulent conveyance or similar laws relating to or affecting creditors' rights
generally and to general principles of equity (whether considered in a
proceeding in equity or in law).
4. The Guarantee Agreement has been duly authorized, executed and delivered by
the Company and constitutes a valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, subject to
applicable bankruptcy, insolvency,
34
reorganization, receivership, moratorium, fraudulent conveyance or similar laws
relating to or affecting creditors' rights generally and to general principles
of equity (whether considered in a proceeding in equity or in law).
5. The Indenture has been duly authorized, executed and delivered by the
Company, has been duly qualified under the Trust Indenture Act, and constitutes
a valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, receivership, moratorium, fraudulent conveyance or similar laws
relating to or affecting creditors' rights generally and to general principles
of equity (whether considered in a proceeding in equity or in law).
6. The Junior Subordinated Debentures have been duly authorized, executed and
delivered by the Company and when duly authenticated in accordance with the
Indenture and delivered and paid for in accordance with the Junior Subordinated
Debenture Purchase Agreement dated as of August ___, 1997, by and between the
Company and the Trust, will constitute valid and binding obligations of the
Company, entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, subject to applicable bankruptcy,
insolvency, reorganization, receivership, moratorium, fraudulent conveyance or
similar laws relating to or affecting creditors' rights generally and to general
principles of equity (whether considered in a proceeding in equity or in law).
7. The Trust is not an "investment company" or an entity "controlled" by an
"investment company," as such terms are defined in Investment Company Act of
1940, as amended.
8. The statements set forth in the Prospectus under the headings, "Description
of Preferred Securities," "Description of Junior Subordinated Debentures,"
"Description of Guarantee" and "Relationship Among the Preferred Securities, the
Junior Subordinated Debentures and the Guarantee," insofar as they purport to
constitute summaries of the terms of such documents referred to therein, fairly
summarize the terms of such documents in all material respects.
9. The statements in the Prospectus under the headings "Certain Federal Income
Tax Consequences," "Risk Factors -- Risk Factors Relating to the Company --
Regulation"
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35
and "Business -- Regulation," insofar as they constitute a summary of the legal
matters referred to therein, fairly present subject to assumptions and
conditions described therein, the information contained therein with respect to
such legal matters.
10. The Registration Statement was declared effective under the Securities Act
as of the date and time specified in such opinion and, to such counsel's
knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued under the Securities Act and no proceedings therefor
have been initiated or threatened by the Commission.
11. The Registration Statement and the Prospectus and any amendment or
supplement thereto made by the Company prior to the Closing Date or any Option
Closing Date (other than the financial statements and the notes thereto and
financial and statistical information and data included or referred to therein,
and the Statement of Eligibility and Qualification of Indenture Trustee under
the Indenture, the Guarantee Trustee under the Guarantee and the Property
Trustee under the Trust Agreement as to which no opinion need be rendered), when
it or they became effective or were filed with the Commission, as the case may
be, and in each case at the Closing Date or any Option Closing Date, complied as
to form in all material respects with the requirements of the Securities Act,
the Trust Indenture Act and the applicable rules and regulations under said
acts.
12. No approval, authorization, consent, registration, qualification or other
order of any public board or body is required under the Delaware General
Corporation law, the laws of the State of New York, the insurance laws of the
States of Arizona, Iowa, Nebraska and Texas or the Federal laws of the United
States in connection with the execution and delivery of this Agreement, the
Trust Agreement, the Guarantee Agreement, and the Indenture or the issuance and
sale of the Preferred Securities or the consummation by the Company of the other
transactions contemplated by this Agreement, the Trust Agreement, the Guarantee
Agreement, or the Indenture, except such as have been obtained under the
Securities Act, the Exchange Act and the Trust Indenture Act or such as may be
required under the blue sky or securities laws of various states in connection
with the offering and sale of the Preferred Securities (as to which such counsel
need express no opinion).
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36
13. The execution and delivery of this Agreement, the Trust Agreement, the
Guarantee Agreement, and the Indenture, the issue and sale of the Preferred
Securities and the Junior Subordinated Debentures, the compliance by the Company
with the provisions of the Preferred Securities, the Junior Subordinated
Debentures, the Indenture and this Agreement and the consummation of the
transactions herein and therein contemplated will not conflict with or
constitute a breach of, or default under, the Certificate of incorporation or
by-laws of the Company or a breach or default under any contract, indenture,
mortgage, loan agreement, note, lease or other instrument known to such counsel
to which either the Company or any Subsidiary is a party or by which either of
them or any of their respective properties may be bound except for such breaches
as would not have a material adverse effect on the Company and its Subsidiaries
considered as one enterprise, nor will such action result in a violation on the
part of the Company or any Subsidiary of the Delaware General Corporation law,
or any applicable law or regulation of the State of New York, or any applicable
insurance law or regulation of the States of Arizona, Iowa, Nebraska and Texas
or the Federal laws or regulations of the United States or of any
administrative, regulatory or court decree known to such counsel.
In rendering the opinion expressed in paragraph 11 above, such counsel may
state that they necessarily assume the correctness and completeness of the
statements by the Company made or incorporated by reference in the Registration
Statement and Prospectus and no responsibility therefore. In the course of the
preparation of the Registration Statement and the Prospectus, such counsel had
conferences with certain of the officers and employees of the Company and with
independent auditors for the Company and reviewed certain corporate records,
documents and proceedings. Based upon such counsel's examination of the
Registration Statement and the above-described procedures, such counsel has no
reason to believe that the Registration Statement (it being understood that such
counsel has not been requested to comment and does not express any comment with
respect to the financial statements and the notes thereto and the related
statements, supporting schedules and other financial and statistical information
included or referred to therein or omitted therefrom, or as to the Statement of
Eligibility and Qualification of the Indenture Trustee under the Indenture, the
Guarantee Trustee under the Guarantee or the Property Trustee under the Trust
Agreement), at the time the Registration Statement became effective, contained
an untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to
37
make the statements therein not misleading, or that the Prospectus (it being
understood that such counsel has not been requested to comment and does not
express any comment with respect to the financial statements and the notes
thereto and the related statements, supporting schedules and other financial and
statistical information included or referred to therein or omitted therefrom, or
as to the Statement of Eligibility and Qualification of the Indenture Trustee
under the Indenture, the Guarantee Trustee under the Guarantee or the Property
Trustee under the Trust Agreement), at the time it was filed with the Commission
or at the Closing Date or any Option Closing Date, contained an untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
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EXHIBIT B
The opinion of counsel to the Trust Company and Trust Delaware to be delivered
pursuant to Section 8(d)(ii) of the Underwriting Agreement shall be
substantially to the effect that:
1. The Trust Company is duly incorporated and is validly existing in good
standing as a banking corporation with trust powers under the laws of the State
of New York.
2. The Indenture Trustee has the requisite power and authority to execute,
deliver and perform its obligations under the Indenture, and has taken all
necessary corporate action to authorize the execution, delivery and performance
by it of the Indenture.
3. The Guarantee Trustee has the requisite power and authority to execute,
deliver and perform its obligations under the Guarantee Agreement, and has taken
all necessary corporate action to authorize the execution, delivery and
performance by it of the Guarantee Agreement.
4. The Property Trustee has the requisite power and authority to execute and
deliver the Trust Agreement, and has taken all necessary corporate action to
authorize the execution and delivery of the Trust Agreement.
5. Each of the Indenture and the Guarantee Agreement has been duly executed and
delivered by the Indenture Trustee and the Guarantee Trustee, respectively, and
constitutes a valid and binding obligation of the Indenture Trustee and the
Guarantee Trustee, respectively, enforceable against the Indenture Trustee and
the Guarantee Trustee, respectively in accordance with its respective terms,
except that certain payment obligations may be enforceable solely against the
assets of the Trust and except that such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium, liquidation, fraudulent
conveyance and transfer or other similar laws affecting the enforcement of
creditors' rights generally, and by general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good faith and fair
dealing (regardless of whether such enforceability is considered in a proceeding
in equity or at law), and by the effect of applicable public policy on the
39
enforceability of provisions relating to indemnification or contribution.
6. The Junior Subordinated Debentures delivered on the date hereof have
been duly authenticated by the Indenture Trustee in accordance with the terms of
the Indenture.
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40
EXHIBIT C
The opinion of counsel, as special Delaware counsel to the Company and the Trust
to be delivered pursuant to Section 8(d)(iii) of the Underwriting Agreement
shall be substantially to the effect that:
1. The Trust has been duly created and is validly existing in good standing as
a business trust under the Delaware Business Trust Act, 12 Del. C. Section 3801
et seq. (the "Delaware Act"), and all filings required under the laws of the
State of Delaware with respect to the creation and valid existence of the Trust
as a business trust have been made.
2. Under the Delaware Act and the Trust Agreement the Trust has the trust power
and authority to own its property and to its conduct its business, all as
described in the Prospectus.
3. The Trust Agreement constitutes a valid and binding obligation of the
Company and the Property Trustee and the Delaware Trustee, and is enforceable
against the Company and the Trustees, in accordance with its terms.
4. Under the Delaware Act and the Trust Agreement, the Trust has the trust
power and authority to execute and deliver, and to perform its obligations
under, the Underwriting Agreement and to issue and perform its obligations under
the Preferred Securities and the Common Securities.
5. Under the Delaware Act and the Trust Agreement, the execution and delivery
by the Trust of the Underwriting Agreement, and the performance by the Trust of
its obligations thereunder, have been duly authorized by all necessary trust
action on the part of the Trust.
6. The Preferred Securities have been duly authorized by the Trust Agreement
and are duly and validly issued and, subject to the qualifications set forth
herein, fully paid and nonassessable undivided beneficial interests in the
assets of the Trust and are entitled to the benefits of the Trust Agreement.
The Holders, as beneficial owners of the Trust, will be entitled to the same
limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the State
of Delaware. We note that the Holders may be obligated
41
pursuant to the Trust Agreement, (i) to provide indemnity and/or security in
connection with and pay taxes or governmental charges arising from transfers or
exchanges of Preferred Securities certificates and the issuance of replacement
Preferred Securities certificates, and (ii) to provide security or indemnity in
connection with requests of or directions to the Property Trustee to exercise
its rights and powers under the Trust Agreement.
7. Under the Delaware Act and the Trust Agreement, the issuance of the
Preferred Securities and Common Securities is not subject to preemptive rights.
8. The Common Securities have been duly authorized by the Trust Agreement and
are duly and validly issued undivided beneficial interests in the assets of the
Trust and are entitled to the benefits of the Trust Agreement.
9. The issuance and sale by the Trust of the Preferred Securities and Common
Securities, the purchase by the Trust of the Junior Subordinated Debentures, the
execution, delivery and performance by the Trust of the Underwriting Agreement,
the consummation by the Trust of the transactions contemplated by the
Underwriting Agreement and the compliance by the Trust with its obligations
thereunder will not violate (i) any of the provisions of the Certificate of
Trust or the Trust Agreement or (ii) any applicable Delaware law or Delaware
administrative regulation.
10. Trust Delaware is duly incorporated and is validly existing in good
standing as a banking corporation with trust powers under the laws of the State
of Delaware.
11. Trust Delaware has the requisite power and authority to execute and deliver
the Trust Agreement, and the Trust Agreement has been duly authorized, executed
and delivered by Trust Delaware.
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