EXHIBIT 1.2
[FORM OF SUBSCRIPTION AGREEMENT]
4,108,000 SHARES
NATIONWIDE FINANCIAL SERVICES, INC.
CLASS A COMMON STOCK
SUBSCRIPTION AGREEMENT
----------------------
London, England
March ___, 1997
To: Credit Suisse First Boston (Europe) Limited
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International
▇▇▇▇▇▇▇ ▇▇▇▇▇ International Limited
c/o: Credit Suisse First Boston (Europe) Limited
One ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Dear Sirs:
1. Introductory. Nationwide Financial Services, Inc., a Delaware
corporation ("Company"), proposes to issue and sell ("International Offering")
to the several Managers named in Schedule A hereto ("Managers") 4,108,000 shares
("International Firm Securities") of its Class A Common Stock, par value $0.01
per share ("Securities").
It is understood that the Company is concurrently entering into an
Underwriting Agreement, dated the date hereof ("Underwriting Agreement"), with
certain United States underwriters listed in Schedule A thereto (the "U.S.
Underwriters"), for whom Credit Suisse First Boston Corporation ("CSFBC"),
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated are acting as representatives (the "U.S. Representatives"),
relating to the concurrent offering and sale of 16,432,000 shares of Securities
("U.S. Firm Securities") in the United States and Canada ("U.S. Offering").
In addition, the Company proposes to issue and sell (i) to the U.S.
Underwriters, at the option of the U.S. Underwriters, an aggregate of not more
than 2,464,800 additional shares of Securities ("U.S. Optional Securities") and
(ii) to the Managers, at the option of the Managers, an aggregate of not more
than 616,200 additional shares of Securities ("International Optional
Securities"). The U.S. Firm Securities and the U.S. Optional
Securities are hereinafter called the "U.S. Securities"; the International Firm
Securities and the International Optional Securities are hereinafter called the
"International Securities"; the U.S. Firm Securities and the International Firm
Securities are hereinafter called the "Firm Securities"; the U.S. Optional
Securities and the International Optional Securities are hereinafter called the
"Optional Securities". The U.S. Securities and the International Securities are
collectively referred to as the "Offered Securities". To provide for the
coordination of their activities, the U.S. Underwriters and the Managers have
entered into an Agreement Between U.S. Underwriters and Managers which permits
them, among other things, to sell the Offered Securities to each other for
purposes of resale.
The Company hereby agrees with the several Managers as follows:
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the several Managers that:
(a) A registration statement (No. 333-18527) relating to the Offered
Securities, including a form of prospectus relating to the U.S. Securities
and a form of prospectus relating to the International Securities being
offered in the International Offering, has been filed with the Securities
and Exchange Commission ("Commission") and either (i) has been declared
effective under the Securities Act of 1933 ("Act") and is not proposed to
be amended or (ii) is proposed to be amended by amendment or post-effective
amendment. If such registration statement (the "initial registration
statement") has been declared effective, either (A) an additional
registration statement (the "additional registration statement") relating
to the Offered Securities may have been filed with the Commission pursuant
to Rule 462(b) ("Rule 462(b)") under the Act and, if so filed, has become
effective upon filing pursuant to such Rule and the Offered Securities all
have been duly registered under the Act pursuant to the initial
registration statement and, if applicable, the additional registration
statement or (B) such an additional registration statement is proposed to
be filed with the Commission pursuant to Rule 462(b) and will become
effective upon filing pursuant to such Rule and upon such filing the
Offered Securities will all have been duly registered under the Act
pursuant to the initial registration statement and such additional
registration statement. If the Company does not propose to amend the
initial registration statement or, if an additional registration statement
has been filed and the Company does not propose to amend it, and if any
post-effective amendment to either such registration statement has been
filed with the Commission prior to the execution and delivery of this
Agreement, the most recent amendment (if any) to each such registration
statement has been declared effective by the Commission or has become
effective upon filing pursuant to Rule 462(c) ("Rule 462(c)") under the Act
or, in the case of the additional registration statement, Rule 462(b). For
purposes of this Agreement, "Effective Time" with respect to the initial
registration statement or, if filed prior to the execution and delivery of
this Agreement, the additional registration statement means (i) if the
Company has advised CSFBL that it does not propose to amend such
registration
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statement, the date and time as of which such registration statement, or
the most recent post-effective amendment thereto (if any) filed prior to
the execution and delivery of this Agreement, was declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c), or
(ii) if the Company has advised CSFBL that it proposes to file an amendment
or post-effective amendment to such registration statement, the date and
time as of which such registration statement, as amended by such amendment
or post-effective amendment, as the case may be, is declared effective by
the Commission. If an additional registration statement has not been filed
prior to the execution and delivery of this Agreement but the Company has
advised CSFBL that it proposes to file one, "Effective Time" with respect
to such additional registration statement means the date and time as of
which such registration statement is filed and becomes effective pursuant
to Rule 462(b). "Effective Date" with respect to the initial registration
statement or the additional registration statement (if any) means the date
of the Effective Time thereof. The initial registration statement, as
amended at its Effective Time, including all information contained in the
additional registration statement (if any) and deemed to be a part of the
initial registration statement as of the Effective Time of the additional
registration statement pursuant to the General Instructions of the Form on
which it is filed and including all information (if any) deemed to be a
part of the initial registration statement as of its Effective Time
pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is hereinafter
referred to as the "Initial Registration Statement". The additional
registration statement, as amended at its Effective Time, including the
contents of the initial registration statement incorporated by reference
therein and including all information (if any) deemed to be a part of the
additional registration statement as of its Effective Time pursuant to Rule
430A(b), is hereinafter referred to as the "Additional Registration
Statement". The Initial Registration Statement and the Additional
Registration Statement are hereinafter referred to collectively as the
"Registration Statements" and individually as a "Registration Statement".
The form of prospectus relating to the U.S. Securities and the form of
prospectus relating to the International Securities, each as first filed
with the Commission pursuant to and in accordance with Rule 424(b) ("Rule
424(b)") under the Act or (if no such filing is required) as included in
the Registration Statement, are hereinafter referred to as the "U.S.
Prospectus" and the "International Prospectus", respectively, and
collectively as the "Prospectuses". No document has been or will be
prepared or distributed in reliance on Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (i) on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement conformed in all material respects to the
requirements of the Act and the rules and regulations of the Commission
("Rules and Regulations") and did 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, (ii) on
the Effective Date of the Additional Registration Statement (if any), each
Registration
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Statement conformed, or will conform, in all material respects to the
requirements of the Act and the Rules and Regulations and did not include,
or will not include, any untrue statement of a material fact and did not
omit, or will not omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and
(iii) on the date of this Agreement, the Initial Registration Statement
and, if the Effective Time of the Additional Registration Statement is
prior to the execution and delivery of this Agreement, the Additional
Registration Statement each conforms, and at the time of filing of each of
the Prospectuses pursuant to Rule 424(b) or (if no such filing is required)
at the Effective Date of the Additional Registration Statement in which the
Prospectuses are included, each Registration Statement and each of the
Prospectuses will conform, in all material respects to the requirements of
the Act and the Rules and Regulations, and none of such documents includes,
or will include, any untrue statement of a material fact or omits, or will
omit, to state any material fact required to be stated therein or necessary
to make the statements therein not misleading. If the Effective Time of the
Initial Registration Statement is subsequent to the execution and delivery
of this Agreement: on the Effective Date of the Initial Registration
Statement, the Initial Registration Statement and each of the Prospectuses
will conform in all material respects to the requirements of the Act and
the Rules and Regulations, none of such documents will include any untrue
statement of a material fact or will omit to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading, and no Additional Registration Statement has been or will
be filed. The two preceding sentences do not apply to statements in or
omissions from a Registration Statement or either of the Prospectuses based
upon written information furnished to the Company by any Manager through
CSFBL or by any U.S. Underwriter through the U.S. Representatives
specifically for use therein, it being understood and agreed that the only
such information is that described as such in Section 7(b).
(c) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
power and authority (corporate and other) to own its properties and conduct
its business as described in the Prospectuses; and the Company is duly
qualified to do business as a foreign corporation in good standing in all
other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except to the extent
that the failure to so qualify or be in good standing would not have a
material adverse effect (i) on the condition, financial or otherwise,
business, properties or results of operations of the Company and its
subsidiaries taken as a whole, (ii) which affects the issuance or validity
of the Offered Securities or, (iii) which affects the consummation of any
of the transactions contemplated by this Agreement, or (iv) is otherwise
material in the context of the sale of the Offered Securities (a "Material
Adverse Effect").
(d) Each subsidiary of the Company has been duly incorporated and is
an existing corporation in good standing under the laws of the jurisdiction
of its
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incorporation, with power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectuses; and
each subsidiary of the Company is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business requires
such qualification, except to the extent that the failure to so qualify
would not have a Material Adverse Effect; all of the issued and outstanding
capital stock of each subsidiary of the Company has been duly authorized
and validly issued and is fully paid and nonassessable; and the capital
stock of each subsidiary owned (directly or through subsidiaries) by the
Company, is owned free from liens, claims, encumbrances and defects.
(e) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized; all outstanding
shares of capital stock of the Company are, and, when the Offered
Securities have been delivered and paid for in accordance with this
Agreement and the Underwriting Agreement on each Closing Date (as defined
below), such Offered Securities will have been, validly issued, fully paid
and nonassessable and will conform to the description thereof contained in
the Prospectuses; and, except as set forth in the Intercompany Agreement
(as defined in the Prospectuses), the stockholders of the Company have no
preemptive rights with respect to the Securities.
(f) Except as disclosed in the Prospectuses, there are no contracts,
agreements or understandings between the Company and any person that would
give rise to a valid claim against the Company or any Manager or U.S.
Underwriter for a brokerage commission, finder's fee or other like payment
in connection with this Offering.
(g) Except as set forth in the Intercompany Agreement, there are no
contracts, agreements or understandings between the Company and any person
granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to a
Registration Statement or in any securities being registered pursuant to
any other registration statement filed by the Company under the Act.
(h) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement or the
Underwriting Agreement (which shall include, for all purposes of this
Agreement, the Special Dividend (as defined in the Prospectuses) and the
other transactions described in the "Recent History" section of the
Prospectuses (collectively, the "Restructuring")) in connection with the
issuance and sale of the Offered Securities by the Company, except such as
have been obtained under the insurance laws of the State of Ohio (the "Ohio
Insurance Laws"), the insurance laws of the States of California and
5
Michigan, the Act, the Rules and Regulations, and the by-laws of the
National Association of Securities Dealers, Inc. ("NASD") and such as may
be required under foreign or state securities laws (including insurance
securities laws).
(i) Each of this Agreement and the Underwriting Agreement has been
duly authorized, executed and delivered by the Company and constitutes the
valid and binding obligations of the Company enforceable in accordance with
its respective terms (except as may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization or similar laws affecting creditors'
rights generally and by general principles of equity, except that the
remedies of specific performance and injunctive and other forms of
equitable relief are subject to the discretion of the court before which
any proceeding therefor may be brought and except with respect to the
obligations of the Company regarding indemnification and contribution as
provided in Section 7 below).
(j) The execution, delivery and performance of this Agreement and the
Underwriting Agreement, and the issuance and sale of the Offered Securities
will not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any statute, any rule, regulation or
order of any governmental agency or body or any court, domestic or foreign,
having jurisdiction over the Company or any subsidiary of the Company or
any of their properties, or any agreement or instrument to which the
Company or any such subsidiary is a party or by which the Company or any
such subsidiary is bound or to which any of the properties of the Company
or any such subsidiary is subject, or the amended and restated certificate
of incorporation or bylaws of the Company or the articles or amended
articles of incorporation and code of regulations or bylaws, as the case
may be, of any such subsidiary, in each case, except for such breaches,
violations or defaults as would not have a Material Adverse Effect; and the
Company has full power and authority to authorize, issue and sell the
Offered Securities and to consummate the transactions contemplated by this
Agreement and the Underwriting Agreement, respectively.
(k) Except as disclosed in the Prospectuses, the Company and its
subsidiaries have good and marketable title to all real properties and all
other properties and assets owned by them, in each case free from liens,
encumbrances, claims and defects, except where the failure to possess such
title would not have a Material Adverse Effect; and except as disclosed in
the Prospectuses, the Company and its subsidiaries hold any leased real or
personal property under valid and enforceable leases, except where the
failure to hold such property under such leases would not have a Material
Adverse Effect.
(l) The Company and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, servicemarks, trade names and other
rights to inventions, know-how, patents, copyrights, confidential
information and other intellectual property (collectively, "intellectual
property rights") necessary to
6
conduct the business now operated by them, or presently employed by them,
except where the failure to own or possess such intellectual property
rights or the inability to acquire such intellectual property rights on
reasonable terms would not have a Material Adverse Effect, and have not
received any notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights (including, without
limitation, "The Best of America(R)" service ▇▇▇▇) that, if determined
adversely to the Company or any of its subsidiaries, would individually or
in the aggregate have a Material Adverse Effect. Nationwide Life Insurance
Company is the owner, free and clear of any lien, claim or encumbrance of
any kind, of the service ▇▇▇▇ "The Best of America(R)", which is a
registered federal service ▇▇▇▇.
(m) The Company and each of its subsidiaries hold all licenses,
certificates and permits from governmental authorities (including, without
limitation, insurance licenses from the Insurance Departments of the
various states in which the subsidiaries write insurance business (the
"Insurance Licenses")) which are necessary to the conduct of their
businesses, except where the failure to hold such licenses, certificates or
permits would not have a Material Adverse Effect; the Company's insurance
subsidiaries have fulfilled and performed all obligations necessary to
maintain their respective Insurance Licenses, except where the failure to
perform such obligations would not have a Material Adverse Effect, and no
event or events have occurred which may be reasonably expected to result in
any impairment, modification, termination or revocation of such Insurance
Licenses which individually or in the aggregate would have Material Adverse
Effect.
(n) Except as disclosed in the Prospectuses, neither the Company nor
any of its subsidiaries is in violation of any statute, rule, regulation,
decision or order of any governmental agency or body or any court, domestic
or foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment
or human exposure to hazardous or toxic substances (collectively,
"environmental laws"), owns or operates any real property contaminated with
any substance that is subject to any environmental laws, is liable for any
off-site disposal or contamination pursuant to any environmental laws, or
is subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and to the Company's knowledge,
there is no pending investigation which might lead to such a claim.
(o) Except as disclosed in the Prospectuses, there are no pending
actions, suits or proceedings (including, without limitation, any
proceeding to revoke or deny renewal of any Insurance License) against or
affecting the Company, any of its subsidiaries or any of their respective
properties that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect; and no such actions, suits or proceedings
7
(including, without limitation, any proceeding to revoke or deny renewal of
any Insurance License) are, to the Company's knowledge, threatened or
contemplated.
(p) The financial statements (other than the notes to the financial
statements) included in each Registration Statement and the Prospectuses
present fairly, and the notes to the financial statements included in each
Registration Statement and the Prospectuses present fairly in all material
respects, the financial position of the Company and its consolidated
subsidiaries as of the dates shown and their results of operations and cash
flows for the periods shown, and, except as otherwise disclosed in the
Prospectuses, as being prepared in accordance with the Statutory Accounting
Practices (as hereinafter defined), such financial statements have been
prepared in conformity with the generally accepted accounting principles in
the United States applied on a consistent basis; and the schedules included
in each Registration Statement present fairly the information required to
be stated therein; and the assumptions used in preparing the pro forma
financial statements included in each Registration Statement and each of
the Prospectuses provide a reasonable basis for presenting the significant
effects directly attributable to the transactions or events described
therein, the related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical financial
statement amounts.
(q) Except as disclosed in the Prospectuses, since the date of the
latest audited financial statements included in the Prospectuses there has
been no change, nor any development or event involving a prospective
change, which has had, or would reasonably be expected to have, a Material
Adverse Effect, and, except as disclosed in or contemplated by the
Prospectuses, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(r) The Company is not, and after giving effect to the sale of the
Offered Securities and the application of the proceeds thereof as described
in the Prospectuses, will not be, an "investment company" or entity
"controlled" by an "investment company" required to be registered under the
Investment Company Act of 1940, as amended (the "1940 Act").
(s) Neither the Company nor any of its affiliates does business with
the government of Cuba or with any person or affiliate located in Cuba
within the meaning of Section 517.075, Florida Statutes.
(t) The statutory financial statements of each of the Company's
insurance subsidiaries, from which certain ratios and other statistical
data contained in the Registration Statement have been derived, have for
each relevant period been prepared in accordance with accounting practices
and procedures of the National Association of Insurance Commissioners
("NAIC"), as prescribed or permitted by
8
the Department of Insurance of the State of Ohio (the "Statutory Accounting
Practices"); and such accounting practices have been applied on a
consistent basis throughout the periods involved, except as disclosed
therein.
(u) The Company has filed an application to list the Offered
Securities on the New York Stock Exchange ("NYSE") and has received
notification that such listing has been approved subject to notice of
issuance. The Offered Securities will be registered under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), prior to or
concurrently with the effectiveness of the Registration Statement.
(v) All reserves and other liabilities reflected in lines 1, 2, 3,
4.1, 4.2, 5 and 7.1 of page 3 of the statutory annual statements of each of
the Company's insurance subsidiaries, filed with or submitted to the
Department of Insurance of the State of Ohio, and any other state
department of insurance or similar regulatory authority for the year ended
December 31, 1996 (the "Reserve Liabilities"):
(i) Are computed in all material respects in accordance with
actuarial standards which have been adopted by the
Actuarial Standards Board, consistently applied and are
fairly stated, in accordance with sound actuarial
principles;
(ii) Are based in all material respects on actuarial
assumptions which produce reserves at least as great as
those called for in any contract provision as to reserve
basis and method, and are in accordance with all other
contract provisions;
(iii) Meet all material requirements of the insurance law and
duly adopted regulations, in effect at the valuation date,
of the State of Ohio and are at least as great as the
minimum aggregate amounts required by the insurance law
and duly adopted regulations, in effect at the valuation
date, of the State of Ohio and any other states in which
the Company's insurance subsidiaries file an actuarial
opinion;
(iv) Are computed on the basis of assumptions consistent with
those used in computing the corresponding items in the
annual statement of the preceding year end (except as
noted in the supporting memorandum; and
(v) Include provisions for all actuarial reserves and related
annual statement items which are required under Ohio
Insurance Laws to be established.
9
Adequate provision for all such Reserve Liabilities has been made in
accordance with Ohio Insurance Laws to cover the total amount of all
reasonably anticipated matured and unmatured benefits, claims and other
liabilities of the Company's insurance subsidiaries under all insurance
policies and annuity contracts under which the Company's insurance
subsidiaries had any liability (including, without limitation, any
liability arising under or as a result of any reinsurance, coinsurance or
other similar agreement) on the Closing Date.
(w) Each of the Company's insurance subsidiaries has duly and validly
filed or caused to be filed all material reports, statements, documents,
registrations, filings or submissions that were required by applicable Laws
(as defined below) to be filed; all such filings complied with all
applicable Laws in all material respects when filed, and no material
deficiencies have been asserted with respect to any such filings which have
not been satisfied. All outstanding insurance policies, annuity contracts
and assumption certificates issued by any of the Company's insurance
subsidiaries and now in force are, to the extent required under applicable
Laws, on forms approved by the insurance regulatory authority of the
jurisdiction where issued and utilize premium rates which if required to be
filed with or approved by insurance regulatory authorities have been so
filed or approved, except where the failure to use approved forms or to
file or have approved such premium rates would not have a Material Adverse
Effect, and the premiums charged conform thereto, except where the failure
to conform would not have a Material Adverse Effect.
(x) Each of the Company's broker/dealer subsidiaries, where
applicable, is registered with the Commission and with each other
governmental authority with which it is required to register in order to
conduct its business as now conducted, and is in compliance with all
applicable United States federal, state, local or foreign statutes, laws,
ordinances, regulations, rules, codes, orders, permits, other requirements
or rules of law (collectively, the "Laws"), except where the failure to
comply would not have a Material Adverse Effect. The Company's insurance
and broker/dealer subsidiaries have filed all forms, reports, statements
and other documents required by Law to be filed by them with the
Commission, all other reports (periodic or otherwise) and registration
statements, including, without limitation, in connection with sales of
variable annuity or variable life contracts, and all amendments and
supplements to all such reports and registration statements, and all such
forms, reports, statements and other documents did not at the time they
were filed (at the time they became effective and so long as they remain
effective in the case of registration statements and amendments thereto)
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
10
(y) Each of the separate accounts of the Company's insurance
subsidiaries that is required to be registered as an investment company
under the 1940 Act is so registered. All forms, reports, statements and
other documents required by Law to be filed with the Commission by or on
behalf of each of the separate accounts of the Company's insurance
subsidiaries, including, without limitation, all registration statements
and all amendments and supplements to all such registration statements, in
connection with sales of variable life insurance policies and variable
annuity contracts, have been so filed by or on behalf of such separate
accounts, and all such forms, reports, statements and other documents,
including, without limitation, those to be filed after the date hereof, did
not at the time they were filed (at the time they become effective and so
long as they remain effective in the case of registration statements and
amendments thereto), or will not at the time they are filed (at the time
they become effective and so long as they remain effective in the case of
registration statements and amendments thereto), contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary in order to make the statement therein, in
the light of the circumstances under which they were made, not misleading.
(z) Except as set forth in the Prospectuses, neither the Company nor
any of the Company's insurance subsidiaries is a party to any contract with
or other undertaking to, or is subject to any governmental order by, or is
a recipient of any presently applicable supervisory letter or other written
communication of any kind from, any governmental authority which (i) has
had a Material Adverse Effect, (ii) relates materially and adversely to its
reserve adequacy, or its investment or underwriting practices or policies
or its sales practices or policies, or (iii) would reasonably be expected
to have a Material Adverse Effect , nor has the Company or any of the
Company's insurance subsidiaries been notified by any governmental
authority that it is contemplating issuing or requesting (or is considering
the appropriateness of issuing or requesting) any such governmental order,
contract, undertaking, letter or other written communication.
(aa) Except as set forth in the Prospectuses, and with respect to all
insurance issued:
(i) No outstanding insurance policy or annuity contract issued or
assumed by any of the Company's insurance subsidiaries entitles
the holder thereof or any other Person (as defined below) to
receive dividends, distributions or other benefits based on the
revenues or earnings of the Company or the Company's insurance
subsidiaries or any other individual, partnership, firm,
corporation, association, trust, unincorporated organization,
governmental authority or other entity, as well as any syndicate
or group that would be deemed to be a person under Section
13(d)(3) of the Exchange Act (each, a "Person").
11
(ii) To the Company's and the Company's insurance subsidiaries'
knowledge, no other party to any reinsurance, coinsurance
or other similar agreement with any of the Company's
insurance subsidiaries is in default thereunder, except
for such default that would not reasonably be expected to
have a Material Adverse Effect.
(iii) Except as set forth in the Prospectuses, all advertising,
promotional and sales materials and other marketing
practices used by the Company and/or the Company's
insurance subsidiaries, or, to the Company's knowledge,
any agent of the Company or the Company's insurance
subsidiaries, have complied and are currently in
compliance with applicable Laws, except where the failure
to comply or be in compliance would not have a Material
Adverse Effect.
(iv) Each annuity contract issued by any of the Company's
insurance subsidiaries qualifies as an annuity contract
under Section 72 of the Internal Revenue Code of 1986, as
amended through the date hereof, except where the failure
to so qualify would not have a Material Adverse Effect.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Company agrees to sell to the
Managers, and the Managers agree, severally and not jointly, to purchase from
the Company, at a purchase price of (U.S.$_____ per share per ordinary share,
the respective numbers of shares of International Firm Securities set forth
opposite the names of the Managers in Schedule A hereto.
The Company will deliver the International Firm Securities to CSFBL for the
accounts of the Managers, against payment of the purchase price in funds
available on the same day by wire transfer to the account of the Company at a
bank acceptable to CSFBL or by official Federal Reserve Bank check or checks
drawn to the order of the Company at the office of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, 1301 Avenue
of the Americas, at 10:00 A.M., New York time, on _______________, 1997 or at
such other time not later than seven full business days thereafter as CSFBL and
the Company determine, such time being herein referred to as the "First Closing
Date". The Company will reimburse the Managers for the additional costs of
effecting payment of the purchase price of the International Firm Securities in
the foregoing manner as compared with payment in New York Clearing House (next
day) funds. For purposes of Rule 15c6-1 under the Exchange Act, the First
Closing Date (if later than the otherwise applicable settlement date) shall be
the settlement date for payment of funds and delivery of securities for all the
Offered Securities sold pursuant to the U.S. Offering and the International
Offering. The certificates for the International Firm Securities so to be
delivered will be in definitive form, in such denominations and registered in
such names as CSFBL requests and will be made available for checking and
packaging at the above office of CSFBL, at least 24 hours prior to the First
Closing Date.
12
In addition, upon written notice from CSFBC given to the Company from time
to time not more than 30 days subsequent to the date of the Prospectuses, the
Managers may purchase all or less than all of the International Optional
Securities at the purchase price per Security to be paid for the International
Firm Securities. The International Optional Securities to be purchased by the
Managers on any Optional Closing Date shall be in the same proportion to all the
Optional Securities to be purchased by the Managers and U.S. Underwriters on
such Optional Closing Date as the International Firm Securities bear to all the
Firm Securities. The Company agrees to sell to the Managers such International
Optional Securities and the Managers agree, severally and not jointly, to
purchase such International Optional Securities. Such International Optional
Securities shall be purchased for the account of each Manager in the same
proportion as the number of shares of International Firm Securities set forth
opposite such Manager's name bears to the total number of shares of
International Firm Securities (subject to adjustment by CSFBC to eliminate
fractions) and may be purchased by the Managers only for the purpose of covering
over-allotments made in connection with the sale of the International Firm
Securities. No Optional Securities shall be sold or delivered unless the
International Firm Securities and the U.S. Firm Securities previously have been,
or simultaneously are, sold and delivered. The right to purchase the Optional
Securities or any portion thereof may be exercised from time to time and to the
extent not previously exercised may be surrendered and terminated at any time
upon notice by CSFBC on behalf of the Managers and the U.S. Underwriters to the
Company. It is understood that CSFBC is authorized to make payment for and
accept delivery of such Optional Securities on behalf of the U.S. Underwriters
and Managers pursuant to the terms of CSFBC's instructions to the Company.
Each time for the delivery of and payment for the International Optional
Securities, being herein referred to as an "Optional Closing Date", which may be
the First Closing Date (the First Closing Date and each Optional Closing Date,
if any, being sometimes referred to as a "Closing Date"), shall be determined by
CSFBC but shall be not later than five full business days after written notice
of election to purchase Optional Securities is given. The Company will deliver
the International Optional Securities being purchased on each Optional Closing
Date to CSFBL for the accounts of the several Managers, against payment of the
purchase price therefor by certified or official bank check or checks in New
York Clearing House (next day) funds drawn to the order of the Company, at the
office of CSFBL. The certificates for the International Optional Securities
being purchased on each Optional Closing Date will be in definitive form, in
such denominations and registered in such names as CSFBL requests upon
reasonable notice prior to such Optional Closing Date and will be made available
for checking and packaging at the office of CSFBL, at a reasonable time in
advance of such Optional Closing Date.
The Company will pay to the Managers as aggregate compensation for their
commitments hereunder and for their services in connection with the purchase of
the International Securities and the management of the offering thereof, if the
sale and delivery of the International Securities to the Managers provided
herein is consummated,
13
an amount equal to U.S.$_____ per International Security purchased for each
International Security in ordinary form purchased, which may be divided among
the Managers in such proportions as they may determine. Such payment will be
made on the First Closing Date in the case of the International Firm Securities
and on each Optional Closing Date in the case of the International Optional
Securities sold to the Manager on such Closing Date, in each case by way of
deduction by the Managers of said amount from the purchase price for the
International Securities referred to above.
4. Offering by Managers. It is understood that the several Managers
propose to offer the International Securities for sale to the public as set
forth in the International Prospectus.
The Company and the Underwriters agree that up to 1,437,800 shares of the
U.S. Securities to be purchased by the Underwriters (the "Reserved Securities")
shall be reserved for sale by the Underwriters to certain eligible employees and
persons having business relationships with the Company (including, without
limitation, agents) at the public offering price, as part of the distribution of
the Securities by the Underwriters, subject to the terms of this Agreement, the
applicable rules, regulations and interpretations of the NASD and all other
applicable laws, rules and regulations. Any such Reserved Securities not orally
confirmed for purchase by such eligible employees and persons having business
relationships with the Company by the later of (a) the date on which the
Registration Statement has become effective or (b) if the Company has elected to
rely on Rule 430A promulgated under the Act, the date of this Agreement, will be
offered to the public by the Underwriters as set forth in the U.S. Prospectus.
In connection with the distribution of the International Securities, the
Managers, through a stabilizing manager, may over-allot or effect transactions
on any exchange, in any over-the-counter market or otherwise which stabilize or
maintain the market prices of the International Securities at levels other than
those which might otherwise prevail, but in such event and in relation thereto,
the Managers will act for themselves and not as agents of the Company, and any
loss resulting from over-allotment and stabilization will be borne, and any
profit arising therefrom will be beneficially retained, by the Managers. Such
stabilizing, if commenced, may be discontinued at any time.
5. Certain Agreements of the Company. The Company agrees with the several
Managers that:
(a) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Company will
file each of the Prospectuses with the Commission pursuant to and in
accordance with subparagraph (1) (or, if applicable and if consented to by
CSFBL, subparagraph (4)) of Rule 424(b) not later than the earlier of (A)
the second business day following the execution and delivery of this
Agreement or (B) the fifteenth business day after the Effective Date of the
Initial Registration Statement.
14
The Company will advise CSFBL promptly of any such filing pursuant to
Rule 424(b). If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement and an additional
registration statement is necessary to register a portion of the Offered
Securities under the Act but the Effective Time thereof has not occurred as
of such execution and delivery, the Company will file the additional
registration statement or, if filed, will file a post-effective amendment
thereto with the Commission pursuant to and in accordance with Rule 462(b)
on or prior to 10:00 P.M., New York time, on the date of this Agreement or,
if earlier, on or prior to the time either Prospectus is printed and
distributed to any Manager or U.S. Underwriter, or will make such filing at
such later date as shall have been consented to by CSFBL.
(b) The Company will advise CSFBL promptly of any proposal to amend
or supplement the initial or any additional registration statement as filed
or either of the related prospectuses or the Initial Registration
Statement, the Additional Registration Statement (if any) or either of the
Prospectuses and will not effect such amendment or supplementation without
CSFBL's prior consent; and the Company will also advise CSFBL promptly of
the effectiveness of each Registration Statement (if its Effective Time is
subsequent to the execution and delivery of this Agreement) and of any
amendment or supplementation of a Registration Statement or either of the
Prospectuses and of the institution by the Commission of any stop order
proceedings in respect of a Registration Statement and will use its best
efforts to prevent the issuance of any such stop order and to obtain as
soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any U.S. Underwriter, Manager or dealer, any event occurs as a
result of which either or both of the Prospectuses as then amended or
supplemented would include an untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or
if it is necessary at any time to amend either or both of the Prospectuses
to comply with the Act, the Company will promptly notify CSFBL of such
event and will promptly prepare and file with the Commission, at its own
expense, an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance with the Act.
Neither CSFBL's consent to, nor the Managers' delivery of, any such
amendment or supplement shall constitute a waiver of any of the conditions
set forth in Section 6.
(d) As soon as practicable, but not later than the Availability Date
(as defined below), the Company will make generally available to its
stockholders an earnings statement covering a period of at least 12 months
beginning after the Effective Date of the Initial Registration Statement
(or, if later, the Effective Date of the Additional Registration Statement)
which will satisfy the provisions of
15
Section 11(a) of the Act. For the purpose of the preceding sentence,
"Availability Date" means the 45th day after the end of the fourth fiscal
quarter following the fiscal quarter that includes such Effective Date,
except that, if such fourth fiscal quarter is the last quarter of the
Company's fiscal year, "Availability Date" means the 90th day after the end
of such fourth fiscal quarter.
(e) The Company will furnish to the Managers hard copies of each
Registration Statement (four of which will be signed and include all
exhibits), copies of each ▇▇▇▇▇ filing of each Registration Statement (and
confirmations for each ▇▇▇▇▇ filing of each Registration Statement), each
preliminary prospectus relating to the International Securities, and, until
completion of the distribution of the International Securities as
determined by CSFBL, the International Prospectus and all amendments and
supplements to such documents, in each case in such quantities as CSFBL
requests. The International Prospectus shall be so furnished on or prior to
3:00 P.M., New York time, on the business day following the later of the
execution and delivery of this Agreement or the Effective Time of the
Initial Registration Statement. All other such documents shall be so
furnished as soon as available. The Company will pay the expenses of
printing and distributing to the Managers all such documents.
(f) No action has been or, prior to the completion of the
distribution of the Offered Securities, will be taken by the Company in any
jurisdiction outside the United States and Canada that would permit a
public offering of the Offered Securities, or possession or distribution of
the International Prospectus, or any amendment or supplement thereto, or
any related preliminary prospectus issued in connection with the offering
of the Offered Securities, or any other offering material, in any country
or jurisdiction where action for that purpose is required.
(g) During the period of three years hereafter, the Company will
furnish to CSFBL and, upon request, to each of the other Managers, (i) as
soon as practicable after the end of each fiscal year, a copy of its annual
report to stockholders for such year, (ii) as soon as available, a copy of
each report and any definitive proxy statement of the Company filed with
the Commission under the Securities Exchange Act of 1934 or mailed to
stockholders, and (iii) from time to time, such other information as shall
be furnished by the Company to its stockholders generally and as shall be
concerning the Company as CSFBL may reasonably requested by CSFBL.
(h) The Company will pay all expenses incident to the performance of
its obligations under this Agreement and will reimburse the Managers (if
and to the extent incurred by them) for any filing fee of the National
Association of Securities Dealers, Inc. relating to the Offered Securities,
for any travel expenses of the Company's officers and employees and any
other reasonable expenses of the Company in connection with attending or
hosting meetings with prospective purchasers of the Offered Securities and
for expenses incurred in distributing
16
preliminary prospectuses and the Prospectuses (including any amendments and
supplements thereto) to the Managers.
(i) The Company will notify CSFBC of any material adverse change
affecting any of its representations, warranties, agreements and
indemnities herein at any time prior to payment to the Company on the First
Closing Date or any Optional Closing Date.
(j) The Company will use the net proceeds received by it from the
sale of the Offered Securities in the manner specified in the Prospectuses
under the caption "Use of Proceeds."
(k) The Company will use its best efforts to list the Offered
Securities on the NYSE subject to notice of issuance and to register the
Offered Securities under the Exchange Act.
(l) For a period of 180 days after the date of the initial public
offering of the Offered Securities, the Company will not, and will not
permit Nationwide Corporation to, offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, or file with the Commission a
registration statement under the Act relating to, any shares of Securities,
or Class B Common Stock (as defined below) of the Company, or any other
securities convertible into or exchangeable or exercisable for Securities
or Class B Common Stock of the Company or publicly disclose of its
intention to make any such offer, sale, pledge, disposition or filing,
without the prior written consent of CSFBC, other than grants of options or
shares pursuant to the Company's 1996 Long-Term Equity Compensation Plan.
(m) The Company will cause each of its directors and certain
executive officers listed on Schedule B hereto to agree that after the date
----------
of the initial public offering of the Offered Securities for a period of
180 days, such directors and executive officers will not offer, sell,
contract to sell, pledge or otherwise dispose of, directly or indirectly,
or file with the Commission a registration statement under the Act relating
to, any shares of Securities, or publicly disclose of its intention to make
any such offer, sale, pledge, disposal or filing, without CSFBL's written
permission, except that such officers and directors may sell or otherwise
dispose of Securities to members of their respective families; provided,
--------
however, that such member(s) shall first agree to be bound by the terms of
-------
this paragraph (m).
(n) The Company hereby agrees that it will ensure that the Reserved
Securities will be restricted as required by the NASD or the NASD rules
from sale, transfer, assignment, pledge or hypothecation for a period of
five months following the date of this Agreement. The Company will make
arrangements with ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
("▇▇▇▇▇▇▇ ▇▇▇▇▇") to have ▇▇▇▇▇▇▇ ▇▇▇▇▇ notify the Company as to which
persons will need to be so
17
restricted. At the request of ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), the Company will direct the transfer agent
to place a stop transfer restriction upon such securities for such period
of time. Should the Company release, or seek to release, from such
restrictions any of the Reserved Securities, the Company agrees to
reimburse the Underwriters for any reasonable expenses (including, without
limitation, reasonable legal expenses) they incur in connection with such
release.
(o) The Company shall comply with Section 517.075, Florida Statutes,
if prior to the completion of the Offered Securities it or any of its
affiliates commences doing business with the government of Cuba with any
person or affiliate located in Cuba within the meaning of such Section
517.075, Florida Statutes.
6. Conditions of the Obligations of the Managers. The obligations of the
several Managers to purchase and pay for the International Firm Securities on
the First Closing Date and the International Optional Securities to be purchased
on each Optional Closing Date will be subject to the accuracy of the
representations and warranties on the part of the Company herein, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company of its obligations hereunder and to
the following additional conditions precedent:
(a) The Managers shall have received a letter, dated the date of
delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall
be on or prior to the date of this Agreement or, if the Effective Time of
the Initial Registration Statement is subsequent to the execution and
delivery of this Agreement, shall be prior to the filing of the amendment
or post-effective amendment to the registration statement to be filed
shortly prior to such Effective Time), of KPMG Peat Marwick LLP in the
agreed form.
(b) If the Effective Time of the Initial Registration Statement is
not prior to the execution and delivery of this Agreement, such Effective
Time shall have occurred not later than 10:00 P.M., New York time, on the
date of this Agreement or such later date as shall have been consented to
by CSFBL. If the Effective Time of the Additional Registration Statement
(if any) is not prior to the execution and delivery of this Agreement, such
Effective Time shall have occurred not later than 10:00 P.M., New York
time, on the date of this Agreement or, if earlier, at the time either
Prospectus is printed and distributed to any Manager or U.S. Underwriter,
or shall have occurred at such later date as shall have been consented to
by CSFBL. If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, each of the
Prospectuses shall have been filed with the Commission in accordance with
the Rules and Regulations and Section 5(a) of this Agreement. Prior to
such Closing Date, no stop order suspending the effectiveness of a
Registration Statement shall have been
18
issued and no proceedings for that purpose shall have been instituted or,
to the knowledge of the Company or the Managers, shall be contemplated by
the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (A) a change in U.S. or international financial,
political or economic conditions or currency exchange rates or exchange
controls as would, in the judgment of CSFBL, be likely to prejudice
materially the success of the proposed issue, sale or distribution of the
International Securities, whether in the primary market or in respect of
dealings in the secondary market, or (B)(i) any change, or any development
or event involving a prospective change, in the condition (financial or
other), business, properties or results of operations of the Company or its
subsidiaries which, in the reasonable judgment of CSFBL, is material and
adverse and makes it impractical or inadvisable to proceed with completion
of the public offering or sale of and payment for the International
Securities; (ii) any downgrading in the rating of any debt securities or
preferred securities (including preferred trust securities of any trust
affiliated with the Company) of the Company by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g)
under the Act), or any public announcement that any such organization has
under surveillance or review its rating of any debt securities or preferred
securities (including preferred trust securities of any trust affiliated
with the Company) of the Company (other than an announcement with positive
implications of a possible upgrading, and no implication of a possible
downgrading, of such rating); or any downgrading of the financial and
operating performance of the Company's insurance subsidiaries by A.M. Best
Company that results in the Company's insurance subsidiaries being rated
lower than A- (Excellent); (iii) any suspension or limitation of trading in
securities generally on the NYSE, or any setting of minimum prices for
trading on such exchange, or any suspension of trading of any securities of
the Company on any exchange or in the over-the-counter market; (iv) any
banking moratorium declared by U.S. Federal or, New York or authorities; or
(v) any outbreak or escalation of major hostilities in which the United
States is involved, any declaration of war by the United States Congress or
any other substantial national or international calamity or emergency if,
in the judgment of CSFBL, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and payment
for the International Securities.
(d) The Managers shall have received an opinion, dated such Closing
Date, of LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., special counsel for the
Company, in the agreed form.
(e) The Managers shall have received an opinion, dated such Closing
Date, from W. ▇▇▇▇▇▇ ▇▇▇▇▇, general counsel to the Company, in the agreed
form.
19
(f) The Managers shall have received from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, counsel
for the Managers, such opinion or opinions, dated such Closing Date, with
respect to the incorporation of the Company, the validity of the Offered
Securities delivered on such Closing Date, the Registration Statement, the
Prospectuses and other related matters as the Managers may require, and the
Company shall have furnished to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters. In rendering
such opinion, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ may rely as matters governed the laws of the
States in which such counsel is not licensed to practice upon the opinions
of local counsel.
(g) The Managers shall have received a certificate, dated such
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers, to
the best of their knowledge after reasonable investigation, shall state
that: the representations and warranties of the Company in this Agreement
are true and correct; the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied hereunder
at or prior to such Closing Date; no stop order suspending the
effectiveness of any Registration Statement has been issued and no
proceedings for that purpose have been instituted or are contemplated by
the Commission; the Additional Registration Statement (if any) satisfying
the requirements of subparagraphs (1) and (3) of Rule 462(b) was filed
pursuant to Rule 462(b), including payment of the applicable filing fee in
accordance with Rule 111(a) or (b) under the Act, prior to the time either
Prospectus was printed and distributed to any Manager or U.S. Underwriter;
and, subsequent to the date of the most recent financial statements in the
Prospectuses, there has been no change, nor any development or event
involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Company and its
subsidiaries which has or could reasonably be expected to have a Material
Adverse Effect except as set forth in or contemplated by the Prospectuses
or as described in such certificate.
(h) The Managers shall have received a letter, dated such Closing
Date, from KPMG Peat Marwick LLP which meets the requirements of subsection
(a) of this Section, except that the specified date referred to in such
subsection will be a date not more than three business days prior to such
Closing Date for the purposes of this subsection.
(i) The Offered Securities to be sold by the Company at the Closing
Date shall have been duly listed on the NYSE subject to notice of issuance
and shall have been registered under the Exchange Act.
(j) The Managers shall have received the lock-up letters of the
Company and the directors and executive officers as contemplated by
Sections 5(1) and 5(m), respectively.
20
(k) On such Closing Date, the U.S. Underwriters shall have purchased
the U.S. Firm Securities or the U.S. Optional Securities, as the case may
be, pursuant to the Underwriting Agreement.
(l) On or before the Closing Date, the Company shall have received
from the Ohio Insurance Department its consent and approval of those
transactions contemplated by the Restructuring requiring Ohio Insurance
Department approval.
(m) On or before the Closing Date, the Company shall have received
from the Staff of the Commission an exemptive order (or, with the approval
of the CSFBL, which shall not be unreasonably withheld, a no-action letter)
in form and substance reasonably satisfactory to CSFBL with respect to the
non-applicability of Section 17 of the 1940 Act and the rules and
regulations promulgated thereunder to the offering, sale and resale of the
Offered Securities contemplated by this Agreement and the Underwriting
Agreement to affiliates of the Company or to affiliates of affiliates of
the Company that are registered investment companies. Such exemptive order
(or, if applicable, no-action letter) shall not have been withdrawn or
amended in any manner by the Staff of the Commission and shall be in full
force and effect as of the Closing Date.
Documents described as being "in the agreed form" are documents which are in the
forms which have been initialed for the purpose of identification by ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, copies of which are held by the Company and CSFBL with such changes
as CSFBL may approve. The Company will furnish the Managers with such conformed
copies of such opinions, certificates, letters and documents as the Managers
reasonably request. CSFBL may in its sole discretion waive on behalf of the
Managers compliance with any conditions to the obligations of the Managers
hereunder, whether in respect of an Optional Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Manager against any losses, claims, damages or liabilities,
to which such Manager may become subject, under the Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect thereof) (i)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any Registration Statement, either of the
Prospectuses, or any amendment or supplement thereto, or any related preliminary
prospectus, or arise out of or are 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, or (ii) arise out of or are based
upon any actions or inactions taken by or omitted to be taken by the Managers in
respect of or pursuant to the implementation of the reserved share program and
the sale of the Reserved Securities contemplated by the 12th paragraph of the
"Subscription and Sale" Section of the International Prospectus, and will
reimburse each Manager for any legal or other expenses reasonably incurred by
such Manager in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
-------- -------
that the Company will not be liable in any such
21
case (A) to the extent that any such loss, claim, damage or liability arises out
of or is based upon an untrue statement or alleged untrue statement in or
omission or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by any Manager
through CSFBL specifically for use therein, it being understood and agreed that
the only information furnished by any Manager consists of the information
described as such in subsection (b) below or (B) with respect to any preliminary
prospectus to the extent that any such loss, claim, damage or liability of such
Manager results from the fact that such Manager sold Offered Securities to a
person who was not sent, at or prior to the written confirmation of such sale, a
copy of the Prospectus and the loss, claim, damage or liability of such Manager
results from an untrue statement or omission of a material fact contained in the
preliminary prospectus that was corrected in the Prospectus; provided that the
Company delivered the preliminary prospectuses to the Managers in requisite
quantity and on a timely basis to permit such sending.
(b) Each Manager will severally and not jointly indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any Registration Statement, either of the
Prospectuses, or any amendment or supplement thereto, or any related preliminary
prospectus, or arise out of or are based upon the omission or the 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 reliance upon and in
conformity with written information furnished to the Company by such Manager
through CSFBL specifically for use therein, and will reimburse any legal or
other expenses reasonably incurred by the Company in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred, it being understood and agreed that the only such
information furnished by any Manager consists of (i) the following information
in the International Prospectus furnished on behalf of each Manager: the last
paragraph at the bottom of the cover page concerning the terms of the offering
by the Managers, the legend concerning over allotments and stabilizing on the
inside front cover page, and the first, fifth, sixth, seventh, eighth, ninth and
fourteenth paragraphs and second sentence of the eleventh paragraph under the
caption "Subscription and Sale".
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate
22
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Managers on the other from the offering of
the International Securities or (ii) if the allocation provided by clause (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 (i) above but
also the relative fault of the Company on the one hand and the Managers on the
other in connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Company on the one hand
and the Managers on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering of the International Securities (before
deducting expenses) received by the Company and the total underwriting discounts
and commissions received by the Managers bear to the total price to the public
of the Offered Securities. The relative fault 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 Company or the Managers and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Manager shall be required to contribute any amount in excess of the amount by
which the total price at which the International Securities underwritten by it
and distributed to the public were offered to the public exceeds the amount of
any damages which such Manager has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning
23
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Managers'
obligations in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions to each officer of the Company, to each
person, if any, who controls any Manager within the meaning of the Act; and the
obligations of the Managers under this Section shall be in addition to any
liability which the respective Managers may otherwise have and shall extend,
upon the same terms and conditions, to each director of the Company, to each
officer of the Company who has signed a Registration Statement and to each
person, if any, who controls the Company within the meaning of the Act.
8. Default of Managers. If any Manager or Managers default in their
obligations to purchase International Securities hereunder on either the First
or any Optional Closing Date and the aggregate number of shares of International
Securities that such defaulting Manager or Managers agreed, but failed, to
purchase does not exceed 10% of the total number of shares of International
Securities that the Managers are obligated to purchase on such Closing Date,
CSFBL may make arrangements satisfactory to the Company for the purchase of such
International Securities by other persons, including any of the Managers, but if
no such arrangements are made by such Closing Date the non-defaulting Managers
shall be obligated severally, in proportion to their respective commitments
hereunder, to purchase the International Securities that such defaulting
Managers agreed but failed to purchase on such Closing Date. If any Manager or
Managers so default and the aggregate number of shares of International
Securities with respect to which such default or defaults occur exceeds 10% of
the total number of shares of International Securities that the Managers are
obligated to purchase on such Closing Date and arrangements satisfactory to
CSFBL and the Company for the purchase of such International Securities by other
persons are not made within 36 hours after such default, this Agreement will
terminate without liability on the part of any non-defaulting Manager or the
Company, except as provided in Section 9 (provided that if such default occurs
with respect to International Optional Securities after the First Closing Date,
this Agreement will not terminate as to the International Firm Securities or any
International Optional Securities purchased prior to such termination). As used
in this Agreement, the term "Manager" includes any person substituted for a
Manager under this Section. Nothing herein will relieve a defaulting Manager
from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company and its officers and of the several Managers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Manager, the Company or any of their respective representatives, officers
or directors or any controlling person, and will survive delivery of and payment
for the International Securities. If this
24
Agreement is terminated pursuant to Section 8 or if for any reason the purchase
of the International Securities by the Managers is not consummated, the Company
shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 5 and the respective obligations of the Company and the
Managers pursuant to Section 7 shall remain in effect and if any International
Securities have been purchased hereunder the representations and warranties in
Section 2 and all obligations under Section 5 shall also remain in effect. If
the purchase of the International Securities by the Managers is not consummated
for any reason other than solely because of the termination of this Agreement
pursuant to Section 8 or the occurrence of any event specified in Section
6(c)(A) or clause (iii), (iv), or (v) of Section 6(c)(B), the Company will
reimburse the Managers for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the International Securities.
10. Notices. All communications hereunder will be in writing and, if sent
to the Managers, will be mailed, delivered or telexed and confirmed to CSFBL at
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇ England, Attention: Company Secretary, or, if
sent to the Company, will be mailed, delivered or telegraphed and confirmed to
it at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention: President (with
a copy to the General Counsel); provided, however, that any notice to a Manager
-------- -------
pursuant to Section 7 will be mailed, delivered or telexed and confirmed to such
Manager.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
12. Representation of Managers. CSFBL will act for the several Managers
in connection with this financing, and any action under this Agreement taken by
CSFBL will be binding upon all the Managers.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws.
The Company hereby submits to the non-exclusive jurisdiction of the Federal
and state courts in the Borough of Manhattan in The City of New York in any suit
or proceeding arising out of or relating to this Agreement or the transactions
contemplated hereby.
25
If the foregoing is in accordance with the Managers' understanding of our
agreement, kindly sign and return to the Company one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the several
Managers in accordance with its terms.
Very truly yours,
Nationwide Financial Services, Inc.
By:___________________________________
Name:
Title:
The foregoing Subscription Agreement is hereby
confirmed and accepted as of the date first above written.
Credit Suisse First Boston (Europe) Limited
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
By Credit Suisse First Boston (Europe) Limited
By:_____________________________________
Name:
Title:
26
SCHEDULE A
MANAGER
-------
NUMBER OF
INTERNATIONAL FIRM SECURITIES
-----------------------------
Credit Suisse First Boston (Europe) Limited
-----------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. International Limited
-----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ International
-----------------------------
----------------------------
Total........................
============================
27
SCHEDULE B
DIRECTORS AND EXECUTIVE OFFICERS TO SIGN LOCK-UPS
Dimon ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇.........................................................
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇...............................................................
▇▇▇▇▇ ▇. ▇▇▇▇▇▇................................................................
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇............................................................
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇............................................................
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇...............................................................
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.........................................................
▇▇▇▇▇ ▇. ▇▇▇▇▇.................................................................
W. ▇▇▇▇▇▇ ▇▇▇▇▇................................................................
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.........................................................
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇...............................................................
▇▇▇▇▇ ▇. ▇▇▇▇▇▇................................................................
▇▇▇▇▇▇ ▇. Click................................................................
▇▇▇▇▇ ▇. Diamond...............................................................
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇..............................................................
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇...............................................................
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.......................................................
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇..............................................................
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇........................................................
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇............................................................
▇▇▇▇▇ ▇. ▇▇▇▇▇▇................................................................
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.............................................................
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇...............................................................
28
