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EXHIBIT 1.1
LINCOLN NATIONAL CORPORATION
Stock Purchase Units
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LINCOLN NATIONAL CAPITAL IV
Preferred Securities
(liquidation amount $25 per preferred security)
guaranteed to the extent set forth in the Guarantee Agreement by
LINCOLN NATIONAL CORPORATION
UNDERWRITING AGREEMENT
August 10, 1998
Lincoln National Corporation, an Indiana corporation (the "Company"),
and Lincoln National Capital IV, a statutory business trust formed under the
laws of the State of Delaware (the "Trust" and collectively with the Company,
the "Offerors"), shall issue and sell to the firms (such firms constituting the
"Underwriters" with respect to the Pricing Agreement attached as Annex I hereto
(the "Pricing Agreement") and the securities specified therein) the respective
numbers of stock purchase units (referred to as "FELINE PRIDES(sm)") and
separate Preferred Securities (the "Separate Preferred Securities") identified
in Schedule I to the Pricing Agreement, which Separate Preferred Securities
represent undivided beneficial interests in the assets of the Trust, guaranteed
by the Company to the extent set forth in the Guarantee Agreement (as defined
below and identified in such Pricing Agreement) (the FELINE PRIDES and the
separate Preferred Securities being referred to collectively as the "Firm
Designated Securities"). The FELINE PRIDES will initially consist of (A)
7,000,000 units (referred to as "Income PRIDES") with a stated amount (the
"Stated Amount"), per Income PRIDES, of $25 and (B) 1,000,000 units (referred to
as "Growth PRIDES") with a Stated Amount, per Growth PRIDES, of $25. Each Income
PRIDES will initially consist of a unit comprised of (a) a stock purchase
contract (a "Purchase Contract") under which (i) the holder will purchase from
the Company on August 16, 2001 (the "Purchase Contract Settlement Date"), for an
amount of cash equal to the Stated Amount, a number of shares of common stock,
no par value per share ("Common Stock"), of the Company equal to the Settlement
Rate (as defined in the Purchase Contract Agreement (as defined below)), and
(ii) the Company will pay the holder unsecured contract adjustment payments
("Contract Adjustment Payments") at the rate of 1.35% of the Stated Amount per
annum, and (b) beneficial ownership of a preferred security representing an
undivided beneficial
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(SM) "FELINE PRIDES(SM)," "Income PRIDES(SM)" and "Growth PRIDES(SM)" are
service marks of ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc.
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interest in the assets of the Trust, guaranteed by the Company to the extent set
forth in the Guarantee Agreement (the "Underlying Preferred Securities" and,
together with the Separate Preferred Securities, the "Preferred Securities").
Each Growth PRIDES will initially consist of a unit comprised of (a) a Purchase
Contract under which (i) the holder will purchase from the Company on the
Purchase Contract Settlement Date, for an amount in cash equal to the Stated
Amount, the number of shares of Common Stock of the Company equal to the
Settlement Rate, and (ii) the Company will pay the holder Contract Adjustment
Payments, at the rate of 1.85% of the Stated Amount per annum, and (b) a 1/40
undivided beneficial interest in a zero-coupon U.S. Treasury Security (CUSIP No.
▇▇▇▇▇▇▇▇▇) in a principal amount at maturity equal to $1,000 payable on
August 15, 2001 (the "Treasury Securities"). If specified in the Pricing
Agreement, the Offerors may grant to the Underwriters the right to purchase, at
their election, an additional number of Income PRIDES, Growth PRIDES and
Separate Preferred Securities specified in such Pricing Agreement as provided in
Section 3 hereof (the "Optional Designated Securities"). The Firm Designated
Securities and any Optional Designated Securities are collectively called the
"Designated Securities."
In accordance with the terms of the Purchase Contract Agreement (as
defined below), to be dated as of August 14, 1998, between the Company and The
First National Bank of Chicago, as Purchase Contract Agent (the "Purchase
Contract Agent"), the Underlying Preferred Securities constituting a part of the
Income PRIDES, and the Treasury Securities constituting a part of the Growth
PRIDES (the "Pledged Treasury Securities" and together with the Underlying
Preferred Securities, the "Pledged Securities") will be pledged by the Purchase
Contract Agent, on behalf of the holders of the Designated Securities, to The
Chase Manhattan Bank, as Collateral Agent (the "Collateral Agent"), pursuant to
the Pledge Agreement, to be dated as of August 14, 1998 (the "Pledge
Agreement"), among the Company, the Purchase Contract Agent and the Collateral
Agent, to secure the holders' obligation to purchase Common Stock under the
Purchase Contracts. The rights and obligations of a holder of Income PRIDES in
respect of Underlying Preferred Securities, subject to the pledge thereof, and
Purchase Contracts will be evidenced by Security Certificates (the "Security
Certificates") to be issued pursuant to the Purchase Contract Agreement. The
rights and obligations of a holder of Growth PRIDES in respect of Treasury
Securities, subject to the pledge thereof, and Purchase Contracts will be
evidenced by Security Certificates to be issued pursuant to the Purchase
Contract Agreement. The rights and obligations of a holder of Separate Preferred
Securities will be evidenced by Security Certificates to be issued pursuant to
the Trust Agreement (as defined below).
The Preferred Securities will be guaranteed by the Company (the
"Guarantee") with respect to distributions and payments upon liquidation,
redemption and otherwise pursuant to the Guarantee Agreement, dated as of August
14, 1998 (the "Guarantee Agreement"), executed and delivered by the Company and
The First National Bank of Chicago (the "Guarantee Trustee"), for the benefit of
the holders from time to time of the Preferred Securities, and certain back-up
undertakings of the Company. All of the net proceeds from the sale of the
Preferred Securities will be combined with the entire net proceeds from the sale
by the Trust to the Company of its
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common securities (the "Common Securities" and together with the Preferred
Securities, the "Trust Securities") and will be used by the Trust to purchase
$206,186,000 aggregate principal amount of 6.40% Junior Subordinated Deferrable
Interest Debentures, Series D, due August 15, 2003 (the "Subordinated
Debentures") of the Company. The Trust Securities will be issued pursuant to the
amended and restated trust agreement of the Trust (the "Trust Agreement"), dated
as of August 14, 1998, among the Company, as depositor, ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇▇, as administrative trustees (the "Administrative Trustees"), and
the First National Bank of Chicago, as the property trustee (the "Property
Trustee"), and First Chicago Delaware Inc., as the Delaware trustee (the
"Delaware Trustee" and, together with the Property Trustee and the
Administrative Trustees, the "Trustees"), and the holders from time to time of
undivided beneficial interests in the assets of the Trust. The Subordinated
Debentures will be issued pursuant to the Junior Subordinated Indenture, dated
as of May 1, 1996 (the "Junior Subordinated Indenture"), between the Company and
The First National Bank of Chicago, as Trustee (the "Subordinated Indenture
Trustee"), as supplemented by the First Supplemental Indenture, dated August 14,
1998 (the Junior Subordinated Indenture, as so supplemented and amended, being
referred to as the "Indenture").
Particular sales of Designated Securities may be made from time to time
to the Underwriters of such Designated Securities. This Underwriting Agreement
(the "Underwriting Agreement") shall not be construed as an obligation of the
Offerors to sell any of the Designated Securities or as an obligation of any of
the Underwriters to purchase any of the Designated Securities. The obligation of
each of the Offerors to issue and sell any of the Designated Securities and the
obligation of any of the Underwriters to purchase any of the Designated
Securities shall be evidenced by the Pricing Agreement with respect to the
Designated Securities specified therein. Each Pricing Agreement shall specify
the aggregate number of Firm Designated Securities, the aggregate number of
Optional Designated Securities, if any, the initial public offering price of
such Firm and Optional Designated Securities or the manner of determining such
price, the terms of the Designated Securities, including the terms on which and
terms of the securities for which the Designated Securities will be
exchangeable, the purchase price to the Underwriters of such Designated
Securities, the names of the Underwriters of such Designated Securities and the
number of such Designated Securities to be purchased by each Underwriter and the
commission, if any, payable to the Underwriters with respect thereto and shall
set forth the date, time and manner of delivery of such Designated Securities
and payment therefor. The Pricing Agreement shall also specify (to the extent
not set forth in the Indenture or Trust Agreement or the registration statement
and prospectus with respect thereto) the terms of such Designated Securities. A
Pricing Agreement shall be in the form of an executed writing (which may be in
counterparts), and may be evidenced by an exchange of telegraphic communications
or any other rapid transmission device designed to produce a written record of
communications transmitted. The obligations of the Underwriters under this
Agreement and each Pricing Agreement shall be several and not joint.
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Pursuant to a remarketing agreement (the "Remarketing Agreement") among
the Company, the Trust, the Purchase Contract Agent and a nationally recognized
investment banking firm chosen by the Company, the Preferred Securities (and, in
certain circumstances, the Subordinated Debentures) may be remarketed, subject
to certain terms and conditions set forth in the Pricing Agreement.
The Company and the Trust have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (nos.
333-49201 and 333-49201-02) and post-effective amendment no. 1 thereto covering
the registration of the securities of the Company and the Trust, including the
Designated Securities and the Purchase Contracts and the Preferred Securities
included in, and shares of Common Stock underlying, the FELINE PRIDES, under the
Securities Act of 1933, as amended (the "Act"), including the related
preliminary prospectus or prospectuses, and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the Commission
under the 1933 Act (the "1933 Act Regulations"), and the Company has filed such
post-effective amendments thereto as may be required prior to the execution of
the Pricing Agreement.
Such registration statement, as so amended, has been declared effective
by the Commission. Such registration statement, as so amended, including the
exhibits and schedules thereto, if any, and the information, if any, deemed to
be a part thereof pursuant to Rule 430A(b) of the 1933 Act Regulations (the
"Rule 430A Information") or Rule 434(d) of the 1933 Act Regulations (the "Rule
434 Information") is referred to herein as the "Registration Statement"; and
the final prospectus and the prospectus supplement relating to the offering of
the Designated Securities, in the forms first furnished to the Underwriters by
the Company for use in connection with the offering of the Designated
Securities, are collectively referred to herein as the "Prospectus"; provided,
however, that all references to the "Registration Statement" and the
"Prospectus" shall be deemed to include all documents incorporated therein by
reference pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), prior to the execution of the applicable Pricing Agreement;
provided, further, that if the Offerors file a registration statement with the
Commission pursuant to Section 462(b) of the 1933 Act Regulations (the "Rule
462(b) Registration Statement"), then after such filing, all references to the
"Registration Statement" shall be deemed to include the Rule 462(b)
Registration Statement; and provided, further, that if the Offerors elect to
rely upon Rule 434 of the 1933 Act Regulations, then all references to the
"Prospectus" shall be deemed to include the final or preliminary prospectus and
the applicable term sheet or abbreviated term sheet (the "Term Sheet"), as the
case may be, in the form first furnished to the Underwriters by the Company in
reliance upon Rule 434 of the 1933 Act Regulations, and all references in this
Agreement to the date of the Prospectus shall mean the date of the Term Sheet.
A "preliminary prospectus" shall be deemed to refer to any prospectus used
before the registration statement became effective and any prospectus that
omitted, as applicable, the Rule 430A Information, the Rule 434 Information or
other information to be included upon pricing in a form of prospectus filed
with the Commission pursuant to Rule 424(b) of the 1933 Act Regulations, that
was used after such
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effectiveness and prior to the execution and delivery of the applicable Pricing
Agreement. For purposes of this Agreement, all references to the Registration
Statement, any preliminary prospectus or the Prospectus or any amendment or
supplement to any of the foregoing shall be deemed to include the electronically
transmitted copy thereof filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
or deemed to be incorporated by reference in the Registration Statement, any
preliminary prospectus or the Prospectus, as the case may be; and all references
in this Agreement to amendments or supplements to the Registration Statement,
any preliminary prospectus or the Prospectus shall be deemed to mean and include
the filing of any document under the Exchange Act, which is incorporated or
deemed to be incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
The Offerors understand that the Underwriters propose to make a public
offering of the Designated Securities as soon as the Underwriters deem advisable
after the Pricing Agreement has been executed and delivered.
SECTION 1. Representations and Warranties. The Offerors, jointly and
severally, represent and warrant to, and agree with, each of the Underwriters
that:
a. The Company and the Trust meet the requirements for use of
Form S-3 under the Act, and have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on such Form (the file
number of which is set forth in Schedule II to the applicable Pricing
Agreement), which has become effective for the registration under the Act of
the Designated Securities. At the respective times the Registration Statement,
any Rule 462(b) Registration Statement and any post-effective amendments
thereto became effective, the Registration Statement, any Rule 462
Registration Statement and any amendments or supplements thereto complied and
will comply in all material respects with the requirements of the Act and the
1933 Act Regulations and the Trust Indenture Act of 1939, as amended ("Trust
Indenture Act") and the rules and regulations of the Commission under the
Trust Indenture Act (the "1939 Act Regulations") and did not and will not
contain an untrue statement or a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading. The Registration Statement, as amended at the date of this
Agreement, meets the requirements set forth in Rule 415(a)(1)(x) under the Act
and complies in all other material respects with said Rule. The Company and
the Trust have filed and will file with the Commission pursuant to Rule 424
under the Act a supplement or supplements to the form of prospectus included
in such Registration Statement relating to the Designated Securities and the
plan of distribution thereof and have previously advised the Underwriters of
all further
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information (financial and other) with respect to the Company to be set forth
therein. Any such supplemented form of prospectus, in the form in which it shall
be filed with the Commission pursuant to Rule 424 (including the preliminary
prospectus as so supplemented) is hereinafter included in the term "Prospectus"
defined above. Any reference herein to the Registration Statement, the
preliminary prospectus or the Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the date of this Agreement,
or the issue date of the preliminary prospectus or Prospectus, as the case may
be; and any reference herein to the terms "amend," "amendment" or "supplement"
with respect to the Registration Statement, the preliminary prospectus or
Prospectus shall be deemed to refer to and include the filing of any document
under the Exchange Act after the date of this Agreement, or the issue date of
the preliminary prospectus or Prospectus, as the case may be, deemed to be
incorporated therein by reference.
b. As of the date hereof, when the Prospectus is first filed or
transmitted for filing pursuant to Rule 424 under the Act, when, prior to the
Time of Delivery (as hereinafter defined), any amendment to the Registration
Statement becomes effective (including the filing of any document incorporated
by reference in the Registration Statement), when any supplement to the
Prospectus is filed with the Commission and at the Time of Delivery, (i) the
Registration Statement, as amended as of any such time, and the Prospectus, as
amended or supplemented as of any such time, and, in the case of Designated
Securities issued pursuant to an Indenture, the Indenture will comply in all
material respects with the applicable requirements of the Act, the Trust
Indenture Act and the Exchange Act and the respective rules thereunder and (ii)
neither the Registration Statement, as amended as of any such time, nor the
Prospectus, as amended or supplemented as of such time, will contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading; provided, however, that the Company makes no representations or
warranties as to (i) that part of the Registration Statement which shall
constitute the Statement of Eligibility and Qualification (Form T-1) under the
Trust Indenture Act of the Trustee (the "Form T-1") or (ii) the information
contained in or omitted from the Registration Statement or the Prospectus or any
amendment thereof or supplement thereto in reliance upon and in conformity with
information relating to such Underwriters or the underwriting arrangements
furnished in writing to the Company by any Underwriter specifically for use in
the Registration Statement and the Prospectus. As of the date hereof, there is
no stop order preventing or suspending the use of the Registration Statement and
Prospectus.
c. Each document incorporated or deemed to be incorporated by reference
in the Registration Statement and the Prospectus, as amended at the time the
Registration Statement become or becomes effective, complied in all material
respects, with the Exchange Act, and at the time of filing or as of the time of
any subsequent amendment, did not contain an untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which they
were
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made, not misleading; and any additional documents deemed to be incorporated by
reference in the Registration Statement or the Prospectus will, if and when such
documents are filed with the Commission, or when amended, as appropriate, comply
in all material respects to the requirements of the Exchange Act and the 1934
Act Regulations and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Offerors by an Underwriter expressly for use in the Registration Statement or
the Prospectus.
d. The financial statements of the Company and its consolidated
subsidiaries included or incorporated by reference in the Registration Statement
fairly present the financial condition and results of operations of the Company
and its consolidated subsidiaries as of the dates indicated and the results of
operations and changes in financial position for the periods therein specified.
Such financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis throughout
the periods involved. The supporting schedules, if any, included or incorporated
by reference in the Registration Statement and the Prospectus present fairly in
accordance with GAAP the information required to be stated therein. Since the
respective dates as of which information is given in the Registration Statement
and the preliminary prospectus and except as otherwise described in the
Registration Statement and the preliminary prospectus, there has not been any
material change in the capital stock (other than issuances of common stock upon
the exercise of outstanding employee stock options or pursuant to existing
employee compensation plans) or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development involving a
prospective material adverse change, in the condition (financial or other),
earnings, business or properties of the Company and its consolidated
subsidiaries, whether or not arising from transactions in the ordinary course of
business, except as set forth or contemplated in the Prospectus.
e. The Company and each subsidiary of the Company which meets the
definition of a significant subsidiary as defined in Regulation S-X of the
Commission (each a "Significant Subsidiary") has been duly incorporated and is
validly existing as a corporation under the laws of the jurisdiction of its
incorporation (except where the failure to be qualified would not have a
Material Adverse Effect, as defined below), with power and authority (corporate
and other) to own, lease and operate its properties and to conduct its business
as described in the preliminary prospectus and to enter into and perform its
obligations under, or as contemplated under, this Agreement, the Pricing
Agreement, the Remarketing Agreement, the Purchase Contract Agreement, the
Purchase Contracts, the Indenture, the Subordinated Indentures, the Pledge
Agreement, the Guarantee Agreement and each other agreement required hereunder
and thereunder. The Company has been duly qualified as a foreign corporation
for the transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties, or conducts any
business, so as to require such qualification, except
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where the failure to be so qualified would not have a Material Adverse Effect
(as defined herein). For purposes of this Agreement, "Material Adverse Effect"
shall mean, a material adverse change in the condition, financial or otherwise,
or in the earnings, business affairs or business prospects of the Company and
its subsidiaries, considered as one enterprise, whether or not arising in the
ordinary course of business.
f. The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company have
been duly and validly authorized and issued and are fully paid and
non-assessable; all of the outstanding beneficial interests in the Trust have
been duly and validly authorized and issued, are fully paid and non-assessable
and conform to the descriptions thereof contained in the Prospectus. Except as
otherwise stated in the Registration Statement and the Prospectus, all of the
issued and outstanding shares of capital stock of each subsidiary of the Company
have been authorized and validly issued, are fully paid and non-assessable and
all such shares are owned by the Company, directly or through its subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
g. The Designated Securities have been duly authorized, and, when the
Designated Securities are issued and delivered pursuant to this Agreement and
the Pricing Agreement with respect to such Designated Securities, such
Designated Securities will have been duly executed, authenticated, issued,
delivered and will be fully paid and nonassessable and will constitute valid and
legally binding obligations of the respective Offeror. The Designated Securities
will conform in all material respects to the descriptions thereof contained in
the Prospectus and issuance of the Designated Securities is not subject to
preemptive or other similar rights.
h. The issue and sale of the Designated Securities, the Common
Securities and the Debentures and the compliance by the Offerors with all of the
provisions of the Designated Securities, the Purchase Contracts, the Trust
Agreement, the Purchase Contract Agreement, the Indenture, this Agreement, any
Pricing Agreement, the Common Securities, the Subordinated Debentures, the
Guarantee Agreement, the Pledge Agreement and the Remarketing Agreement, the
issuance of the Common Stock pursuant to the Purchase Contracts and the
consummation of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other material agreement or instrument to which the
Company or any subsidiary or the Trust is a party or by which the Company or any
subsidiary or the Trust is bound or to which any of the property or assets of
the Company or any subsidiary or the Trust is subject, except for such
conflicts, breaches, violations, defaults or liens, charges or encumbrances as
would not, individually or in the aggregate, have a Material Adverse Effect on
the Company and its subsidiaries or on the Trust, nor will such action result in
any violation of the provisions of the articles of incorporation or bylaws of
the Company or any Significant Subsidiary or the Trust Agreement, or any
applicable law, statute, rule, regulation,
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judgment, order writ or decree of any court or governmental agency or body,
domestic or foreign, having jurisdiction over the Company, any subsidiary or any
of its respective properties or the Trust or any of their respective assets,
properties or operations; and no consent, approval, authorization, order,
registration or qualification of or with any such court or governmental agency
or body is required for the issuance and sale of the Designated Securities or
the performance by the Company or the Trust of their respective obligations set
forth in this Agreement, the applicable Pricing Agreement, the Remarketing
Agreement, the Purchase Contract Agreement, the Purchase Contracts, the Pledge
Agreement, the Indenture, the Subordinated Debentures, the Guarantee Agreement,
the Trust Agreement and the Trust Securities, except such as have been, or will
have been made or obtained prior to the Time of Delivery under federal
securities laws or under state or foreign securities laws or Blue Sky laws.
i. The Trust has been created and is validly existing in good standing
as a business trust under the Delaware Business Trust Act (the "Delaware Act")
with the power and authority to own property and to conduct its business as
described in the Registration Statement and the Prospectus and to enter into and
perform its obligations under this Agreement, the Pricing Agreement, the
Remarketing Agreement, the Preferred Securities, the Common Securities and the
Trust Agreement; the Trust is qualified to transact business as a foreign
company and is in good standing in each jurisdiction in which such qualification
is necessary, except where the failure to so qualify or be in good standing
would not have a Material Adverse Effect on the Trust; the Trust is not a party
to or otherwise bound by any agreement other than those described in the
Prospectus; and the Trust is and will, under current law, be classified for
United States federal income tax purposes as a grantor trust and not as an
association taxable as a corporation.
j. Each of the Administrative Trustees of the Trust is an employee of
the Company and has been authorized by the Company to execute and deliver the
Trust Agreement.
k. The Purchase Contract Agreement has been authorized by the Company
and, at the Time of Delivery, when validly executed and delivered by the Company
and assuming due authorization, execution and delivery of the Purchase Contract
Agreement by the Purchase Contract Agent, will constitute a legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms except to the extent that enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting creditors' rights generally, or by general equitable
principles (whether considered in a proceeding in equity or at law) (the
"Bankruptcy Exceptions"), and will conform in all material respects to the
description thereof contained in the Prospectus.
l. The Pledge Agreement has been authorized by the Company and, at the
Time of Delivery, when validly executed and delivered by the Company and
assuming due authorization, execution and delivery of the Pledge Agreement by
the Collateral Agent and the
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Purchase Contract Agent, will constitute a legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms
except to the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions, and will conform in all material respects to the description thereof
contained in the Prospectus.
m. The Trust Securities have been duly authorized under the Trust
Agreement and, when issued and authenticated in accordance with the provisions
of the Trust Agreement and delivered against payment therefor as set forth in
the Trust Agreement and the Pricing Agreement, will have been duly executed by
the Trust, will be validly issued, fully paid and non-assessable undivided
beneficial interests in the assets in the Trust and will be entitled to the
benefits of the Trust Agreement; the issuance of the Trust Securities is not and
will not be subject to preemptive or other similar rights; and holders of Trust
Securities 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.
n. The Trust Agreement has been duly authorized by the Company and, at
the Time of Delivery, will have been executed and delivered by the Company and
the Trustees and, assuming due authorization, execution and delivery of the
Trust Agreement by the Property Trustee and the Delaware Trustee, the Trust
Agreement will, at the Time of Delivery, be a legal, valid and binding
obligation of the Company, enforceable in accordance with its terms, except to
the extent that enforcement thereof may be limited by the Bankruptcy Exceptions,
and will conform in all material respects to the description thereof contained
in the Prospectus.
o. The Guarantee Agreement and the Guarantee have been duly authorized
by the Company and, at the Time of Delivery, the Guarantee Agreement will have
been duly executed and delivered by the Company and, assuming due authorization,
execution and delivery of the Guarantee Agreement by the Guarantee Trustee, will
constitute a legal, valid and binding agreement of the Company, enforceable in
accordance with its terms except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions and will conform in all material respects
to the description thereof contained in the Prospectus.
p. The Indenture has been duly authorized by the Company and, at the
Time of Delivery, will have been executed and delivered by the Company and,
assuming due authorization, execution and delivery of the Indenture by the Debt
Trustee, will constitute a legal, valid and binding agreement of the Company,
enforceable in accordance with its terms except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions and will conform in all
material respects to the description thereof contained in the Prospectus.
q. The Subordinated Debentures have been duly authorized by the Company
and, when authenticated by the Subordinated Indenture Trustee in the manner
provided for in the Indenture and delivered to the Trust against payment
therefor as described in the Prospectus, will have been duly executed and
delivered by the Company and will constitute legal, valid and
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binding obligations of the Company, enforceable in accordance with their terms
except to the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions, will conform in all material respects to the description thereof
contained in the Prospectus and will be entitled to the benefits of the
Indenture.
r. The Common Stock, when issued and delivered in accordance with the
provisions of the Purchase Contract Agreement and the Pledge Agreement, will be
authorized, validly issued and fully paid and non-assessable and will conform in
all material respects to the description thereof contained in the Prospectus;
and the issuance of such Shares will not be subject to preemptive or other
similar rights.
s. Other than as set forth in the Prospectus or in the documents
incorporated by reference therein, there are no legal or governmental
proceedings pending to which the Company or any of its subsidiaries or the Trust
is a party or of which any property of the Company or any of its subsidiaries or
the Trust is the subject which would individually or in the aggregate be
reasonably likely to have a Material Adverse Effect on the Company and its
subsidiaries, or on the Trust, or which might be reasonably expected to have a
material adverse effect on the ability of the Offerors to perform their
respective obligations under this Agreement, the Pricing Agreement, the
Remarketing Agreement, the Purchase Contracts, the Purchase Contract Agreement,
the Pledge Agreement, the Guarantee Agreement, the Subordinated Debentures, the
Indenture or the Trust Agreement or to consummate the transactions contemplated
herein or therein; and, to the best of the Company's knowledge, no such
proceedings are threatened by governmental authorities or others. The aggregate
of all pending legal or governmental proceedings to which the Trust, the Company
or any subsidiary of the Company is a party or of which any of their respective
properties or operations is the subject which are not described in the
Registration Statement and the Prospectus or in the documents incorporated by
reference therein, including ordinary routine litigation incidental to their
respective businesses, are not expected to result in a Material Adverse Effect
on the Company and its subsidiaries or on the Trust.
t. Except as described in the Prospectus, there is no action, suit or
proceeding pending, nor to the knowledge of the Company, is there any action,
suit or proceeding threatened, which would be reasonably expected to result in a
material adverse change in the financial condition, results of operations or
business of the Company and its subsidiaries taken as a whole or which is
required to be disclosed in the Registration Statement.
u. To the best of the Company's knowledge and belief, the Company has
complied in all material respects with each, and the conduct of its business and
the conduct of business by its subsidiaries does not violate in any material
respect any, statutes, laws, regulations, rules, orders or directives of any
federal, state and local government authority applicable to the Company and its
subsidiaries.
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v. This Agreement, the Remarketing Agreement and the Pricing Agreement
have been authorized, executed and delivered by each of the Offerors.
w. None of the Trust, the Company or any of the subsidiaries of the
Company is, and upon the issuance and sale of the Designated Securities as
herein contemplated and the application of the net proceeds therefrom as
described in the Prospectus will not be, an "investment company" or an entity
"controlled" by an "investment company" as such terms are defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act").
x. The accountants who certified the financial statements of the
Company and its subsidiaries included in or incorporated by reference in the
Prospectus are independent public accountants as required by the Act and the
1933 Act Regulations.
y. Holders of Preferred Securities 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.
SECTION 2. Purchase and Sale. Subject to the terms and conditions set
forth in the Prospectus as amended or supplemented, and in reliance upon the
representations and warranties herein set forth, the Offerors agree to sell to
each Underwriter, and each Underwriter agrees, severally and not jointly, to
purchase from the Offerors, at the purchase price set forth in Schedule II to
the applicable Pricing Agreement, the principal amount or number of shares of
the Firm Designated Securities set forth opposite such Underwriter's name in
Schedule I to the applicable Pricing Agreement.
The Offerors may specify in the Pricing Agreement applicable to any
Designated Securities that the Offerors thereby grant to the Underwriters the
right (an "Over-allotment Option") to purchase at their election up to the
number of Optional Designated Securities set forth in such Pricing Agreement, on
the terms set forth in the paragraph above, for the sole purpose of covering
over-allotments in the sale of the Firm Designated Securities. Any such election
to purchase Optional Designated Securities may be exercised only by written
notice from the Underwriters to the Offerors, given within a period specified in
the Pricing Agreement, setting forth the aggregate number of Optional Designated
Securities to be purchased and the date on which such Optional Designated
Securities are to be delivered, as determined by the Underwriters but in no
event earlier than the First Time of Delivery (as defined in Section 3 hereof)
or, unless the Underwriters and the Offerors otherwise agree in writing, earlier
than or later than the respective number of business days after the date of such
notice set forth in such Pricing Agreement.
The number of Optional Designated Securities to be added to the number
of Firm Designated Securities to be purchased by each Underwriter as set forth
in Schedule I to the Pricing Agreement applicable to such Designated
Securities shall be, in each case, the number of
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Optional Designated Securities which each of the Offerors has been advised by
the Underwriters have been attributed to such Underwriter, provided that, if
each of the Offerors has not been so advised, the number of Optional Designated
Securities to be so added shall be, in each case, that proportion of Optional
Designated Securities which the number of Firm Designated Securities to be
purchased by such Underwriter under such Pricing Agreement bears to the
aggregate number of Firm Designated Securities (rounded as the Underwriters may
determine to the nearest 100 securities). The total number of Designated
Securities to be purchased by all the Underwriters pursuant to such Pricing
Agreement shall be the aggregate number of Firm Designated Securities set forth
in Schedule I to such Pricing Agreement plus the aggregate number of Optional
Designated Securities which the Underwriters elect to purchase.
SECTION 3. Delivery and Payment. Designated Securities to be purchased
by each Underwriter pursuant to the Pricing Agreement relating thereto, in
definitive form to the extent practicable, and in such authorized denominations
and registered in such names as the Underwriters may request upon at least
forty-eight hours' prior notice to the Company or the Trust, shall be delivered
by or on behalf of the Offerors for the account of such Underwriter, against
payment by such Underwriter or on its behalf of the purchase price therefor by
certified or official bank check or checks, payable to the order of the Company
or the Trust in the funds specified in such Pricing Agreement, all in the manner
and at the place and time and date specified in such Pricing Agreement or at
such other place and time and date as the Underwriters and the Company or the
Trust may agree upon in writing. Such time and date for delivery of Firm
Designated Securities pursuant to the Pricing Agreement relating thereto is
herein called the "First Time of Delivery," such time and date for delivery of
Optional Designated Securities, if not the First Time of Delivery, is herein
called the "Second Time of Delivery," and each such time and date is herein
called the "Time of Delivery."
The Underlying Preferred Securities and Treasury Securities underlying
the FELINE PRIDES will be pledged with the Collateral Agent to secure the
holders' obligations to purchase Common Stock under the Purchase Contracts. Such
pledge shall be effected by the transfer to the Collateral Agent of the
Underlying Preferred Securities and the Treasury Securities to be pledged at the
Time of Delivery and appropriate Second Time of Delivery, if any, in accordance
with the Pledge Agreement.
SECTION 4. Agreements. The Offerors agree with the several Underwriters
as follows:
(a) The Offerors shall prepare the Prospectus as amended and
supplemented in relation to the applicable Designated Securities in a form
approved by the Underwriters; shall file such Prospectus pursuant to Rule
424(b) under the Act not later than the Commission's close of business on the
second business day following the execution and delivery of the Pricing
Agreement relating to the applicable Designated Securities or, if applicable,
such earlier time as may be required by Rule 424(b) and shall promptly advise
the Underwriters when such filing has been made; shall make no further
amendment or any supplement to the Registration Statement or
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Prospectus as amended or supplemented after the date of the Pricing Agreement
relating to such Designated Securities and prior to the Time of Delivery for
such Designated Securities which shall be disapproved by the Underwriters for
such Designated Securities promptly after reasonable notice thereof; shall
advise the Underwriters promptly of any such amendment or supplement after such
Time of Delivery and furnish the Underwriters with copies thereof; shall file
promptly all reports and any definitive proxy or information statements required
to be filed by the Company with the Commission pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act for so long as the delivery of a Prospectus is
required in connection with the offering or sale of such Designated Securities,
and during such same period, shall advise the Underwriters, promptly after it
receives notice thereof, of the time when any amendment to the Registration
Statement has been filed or becomes effective or any supplement to the
Prospectus or any amended Prospectus has been filed with the Commission, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any prospectus relating to the Designated Securities, of
the suspension of the qualification of the Income PRIDES, the Growth PRIDES, the
Separate Preferred Securities or the Common Stock for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or the Prospectus or for additional information;
and, in the event of the issuance of any such stop order or of any such order
preventing or suspending the use of any prospectus relating to the Designated
Securities or suspending any such qualification, to use promptly its best
efforts to obtain its withdrawal.
(b) The Company will make generally available to its securityholders as
soon as practicable, but not later than 18 months after the close of the period
covered thereby, an earnings statement of the Company and its subsidiaries (in
form complying with the provisions of Rule 158 of the 1933 Act Regulations)
covering a twelve-month period beginning not later than the first day of the
Company's fiscal quarter next following the "effective date" (as defined in said
Rule 158) of the Registration Statement.
(c) The Company shall furnish the Underwriters with copies of the
Prospectus as amended or supplemented in such quantities as the Underwriters may
from time to time reasonably request, and, if the delivery of a prospectus is
required at any time under the Act or the Exchange Act in connection with the
offering or sale of the Designated Securities or the Common Stock. If at such
time any event shall have occurred as a result of which the Prospectus as then
amended or supplemented would include an untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus or to
file under the Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act, the Exchange Act or the Trust
Indenture Act, the Company shall notify the Underwriters and, upon the request
of the Underwriters, shall file such document and shall prepare and furnish
without charge to each Underwriter and to any dealer in
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securities as many copies as the Underwriters may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance.
(d) The Offerors will promptly from time to time take such action as
the Underwriters may reasonably request to qualify of the Designated Securities,
the Subordinated Debentures, the Guarantees and the Common Stock for offering
and sale under the laws of such jurisdictions as the Underwriters may reasonably
designate, will maintain such qualifications in effect so long as required for
the distribution of the Designated Securities, the Subordinated Debentures, the
Guarantees or the Common Stock and will arrange for the determination of the
legality of the Designated Securities, the Subordinated Debentures, the
Guarantees or the Common Stock for purchase by institutional investors; provided
that in connection therewith neither the Company nor the Trust shall be required
to qualify as a foreign corporation or to execute a general consent to service
of process in any jurisdiction or to subject itself to taxation in respect of
doing business in any jurisdiction in which it is not otherwise subject.
(e) During the 90-day period beginning from the date of the Pricing
Agreement for such Designated Securities, neither the Company nor the Trust
shall for a period of 90 days after the date of the Prospectus, without the
prior written consent of ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated,
directly or indirectly, sell, offer to sell, grant any option for the sale of,
or otherwise dispose of, or enter into any agreement to sell, any Income PRIDES,
Growth PRIDES, Purchase Contracts, Preferred Securities or Common Stock or any
securities of the Company or any affiliate of the Company similar to the Income
PRIDES, Growth PRIDES, Purchase Contracts, Preferred Securities or Common Stock
or any security convertible into or exchangeable or exercisable for Income
PRIDES, Growth PRIDES, Purchase Contracts, Preferred Securities or Common Stock
or any such similar securities, other than (i) to the Underwriters pursuant to
the Underwriting Agreement, (ii) the Subordinated Debentures to be sold to the
Trust and the Common Securities to be sold to the Company, (iii) shares of
Common Stock or options for shares of Common Stock issued pursuant to or sold in
connection with any employee benefit, dividend reinvestment, stock option or
stock purchase plan of the Company and its subsidiaries, (iv) any securities
issued pursuant to a merger or acquisition and (v) the Growth PRIDES or Income
PRIDES to be created or recreated upon substitution of Pledged Securities, or
shares of Common Stock issuable upon early settlement of the Income PRIDES or
Growth PRIDES.
(f) The Company, during a period of three years from the Time of
Delivery, shall make generally available to the Underwriters copies of all
reports and other communications (financial or other) mailed to stockholders,
and shall deliver to the Underwriters promptly after they are available, copies
of any reports and financial statements furnished to or filed with the
Commission or any national securities exchange on which any class of securities
of the Company is listed.
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(g) The Company will keep available at all times, free of preemptive or
other similar rights and liens and adverse claims, sufficient shares of Common
Stock to satisfy any obligations to issue Common Stock upon settlement of the
Purchase Contracts and shall take all actions necessary to keep effective the
Registration Statement with respect to the Common Stock.
(h) The Offerors covenant and agree with the several Underwriters that
the Company will pay or cause to be paid the following: (i) the fees,
disbursements and expenses of the Trust's and the Company's counsel and
accountants in connection with the registration of the Designated Securities,
the Indenture, the Guarantees, the Subordinated Debentures, the Purchase
Contracts and the Common Stock under the Act and all other expenses in
connection with the preparation, printing and filing of the Registration
Statement and the Prospectus and amendments and supplements thereto and the
mailing and delivering of copies thereof to the Underwriters and dealers; (ii)
the cost of printing or producing any Agreement among Underwriters, this
Agreement, any Pricing Agreement, the Pledge Agreement, the Remarketing
Agreement, the Trust Agreement, the Indenture, the Guarantee Agreement and the
Purchase Contract Agreement, any Blue Sky or similar investment surveys or
memoranda and any other documents in connection with the offering, purchase,
sale and delivery of the Designated Securities; (iii) all reasonable expenses in
connection with the qualification of the Designated Securities, the Guarantees,
the Subordinated Debentures, the Purchase Contracts and the Common Stock for
offering and sale under state securities laws as provided in Section 4(d)
hereof, including the fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the Blue Sky and legal
investment surveys; (iv) any fees charged by securities rating services for
rating the Designated Securities, the Subordinated Debentures or the Guarantees;
(v) any filing fees incident to, and the fees and disbursements of counsel for
the Underwriters in connection with, any required reviews by the National
Association of Securities Dealers, Inc. of the terms of the sale of the
Designated Securities and the issuance of the Guarantees, the Subordinated
Debentures, the Purchase Contracts and the Common Stock; (vi) the cost of
preparing the Designated Securities, the Subordinated Debentures, the Purchase
Contracts and the Common Stock; (vii) the fees and expenses of any Trustee,
Subordinated Indenture Trustee, Delaware Trustee and Guarantee Trustee, and any
agent of any trustee and the fees and disbursements of counsel for any trustee
in connection with the Trust Agreement, the Indenture, the Guarantees and the
Designated Securities; (viii) the fees and expenses of the Purchase Contract
Agent, the Collateral Agent, the Custodial Agent and the Exchange Agent;
(ix) the cost of qualifying the Designated Securities with The Depository Trust
Company; (x) all fees and expenses in connection with the listing of the Income
PRIDES, the Growth PRIDES and the Separate Preferred Securities on the New York
Stock Exchange and the cost of registering the Income PRIDES and the Growth
PRIDES under Section 12 of the Exchange Act; and (xi) all other costs and
expenses incident to the performance of its obligations hereunder and under any
Over-allotment Option which are not otherwise specifically provided for in this
Section. It is understood, however, that, except as provided in this Section and
Section 9, the Underwriters will pay all of their own costs and expenses,
including the fees of their counsel, transfer taxes on
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resale of any of the Designated Securities by them, and any advertising expenses
connected with any offers they may make.
(i) The Offerors will use their best efforts to list, subject to notice
of issuance, the Income PRIDES and the Growth PRIDES on the New York Stock
Exchange and to cause the Income PRIDES and the Growth PRIDES to be registered
under the Exchange Act.
SECTION 5. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase and pay for any Designated
Securities under the Pricing Agreement relating to such Designated Securities
shall be subject, in the discretion of the Underwriters, to the condition that
all representations and warranties and other statements of the Trust and the
Company in or incorporated by reference in the Pricing Agreement relating to
such Designated Securities are, at and as of the respective Time of Delivery for
such Designated Securities, true and correct, the condition that the Trust and
the Company shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectus as amended or supplemented in relation to the
applicable Designated Securities shall have been filed with the Commission
pursuant to Rule 424(b) within the applicable time period prescribed for such
filing by the rules and regulations under the Act and in accordance with Section
4(a) hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with to the Underwriters' reasonable satisfaction.
(b) ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., Executive Vice President and General Counsel
for the Company, shall have furnished to the Underwriters his written opinion,
dated the respective Time of Delivery for such Designated Securities, in form
and substance satisfactory to the Underwriters, to the effect that:
(i) The Company and each Significant Subsidiary has been duly
incorporated and is validly existing as a corporation under the laws of
the jurisdiction of its incorporation, with power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectus as amended or supplemented;
(ii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus (except for subsequent
issuances, if any, pursuant to incentive compensation plan, employee
benefit plan or dividend reinvestment and stock purchase plan
transactions), and the shares of issued and outstanding capital stock
of the Company have been authorized and validly issued and are fully
paid and non-assessable.
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(iii) The Trust is not required to be qualified and in good
standing as a foreign company in Indiana, except to the extent that the
failure to so qualify or be in good standing would not have a Material
Adverse Effect on the Trust; and the Trust is not a party to or
otherwise bound by any agreement other than those described in the
Prospectus.
(iv) The Trust Agreement has been duly authorized, executed and
delivered by the Company and the Administrative Trustees and is a
legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as enforcement thereof
may be limited by the Bankruptcy Exceptions.
(v) The shares of Common Stock subject to the Purchase Contract
Agreement have been validly authorized and, when issued and delivered
by the Company in accordance with the provisions of the Purchase
Contract Agreement, the Purchase Contracts and the Pledge Agreement,
will be fully paid and non-assessable; the issuance of such Common
Stock will not be subject to preemptive or other similar rights arising
by law or, to the best of such counsel's knowledge, otherwise.
(vi) The issuance of the Designated Securities is not subject to
preemptive or other similar rights arising by law or, to the best of
such counsel's knowledge, otherwise.
(vii) This Agreement, the Remarketing Agreement and the Pricing
Agreement have been duly authorized, executed and delivered by each of
the Company and the Trust and constitute valid and binding agreements
of the Company and the Trust, enforceable against the Company and the
Trust in accordance with their respective terms except to the extent
that enforcement thereof may be limited by the Bankruptcy Exceptions.
(viii) The Purchase Contract Agreement has been duly authorized,
executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Purchase Contract Agent, constitutes a
valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions.
(ix) The Pledge Agreement has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and
delivery by the Collateral Agent and the Purchase Contract Agent,
constitutes a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms except to
the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions.
(x) The Guarantee Agreement has been duly authorized, executed and
delivered by the Company and, assuming due authorization execution,
and delivery by
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the Guarantee Trustee, constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by
Bankruptcy Exceptions.
(xi) The Indenture has been duly authorized, executed and delivered
by the Company and, assuming due authorization, execution, and delivery
thereof by the Subordinated Debenture Trustee, is a valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions.
(xii) The Subordinated Debentures are in the form contemplated by
the Indenture, have been duly authorized, executed and delivered by the
Company and, when authenticated by the Subordinated Debenture Trustee
in the manner provided for in the Indenture and delivered against
payment therefor by the Trust, will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(xiii) The entry into the Purchase Contracts underlying the FELINE
PRIDES; the offer of the Designated Securities as contemplated herein
and in the Prospectus; the issuance and sale of the Common Stock by the
Company pursuant to the Purchase Contracts, the execution, delivery and
performance of this Agreement, the Pricing Agreement, the Remarketing
Agreement, the Purchase Contracts, the Purchase Contract Agreement, the
Pledge Agreement, the Trust Agreement, the FELINE PRIDES, the Preferred
Securities, the Common Securities, the Indenture, the Subordinated
Debentures, the Guarantee Agreement and the Guarantees; the
consummation of the transactions contemplated herein, therein and in
the Registration Statement; and compliance by the Offerors with their
obligations hereunder and thereunder will not conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company, any subsidiary of the Company or the Trust pursuant to any
indenture, mortgage, deed of trust, loan agreement or other material
agreement or instrument to which the Company or any subsidiary or the
Trust is a party or by which the Company, any subsidiary or the Trust
is bound or to which any of the property or assets of the Company or
any subsidiary or the Trust is subject, (except for such conflicts,
breaches, violations, defaults or liens, charges or encumbrances as
would not, individually or in the aggregate, result in a Material
Adverse Effect on the Company and its subsidiaries or on the Trust),
nor will such action result in any violation of the provisions of the
articles of incorporation or by-laws of the Company or any Significant
Subsidiary or the Trust Agreement or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any court or
governmental agency or body, domestic or
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foreign, having jurisdiction over the Company, any subsidiary or the
Trust or any of their respective assets, properties or operations.
(xiv) All conditions precedent provided for in the Purchase
Contract Agreement relating to the authentication and delivery of the
Income PRIDES and Growth PRIDES have been complied with and the Company
is duly entitled to the authentication and delivery of the Income
PRIDES and Growth PRIDES in accordance with the terms of the Purchase
Contract Agreement. The certificates evidencing the Income PRIDES and
the Growth PRIDES are in the respective forms contemplated by the
Purchase Contract Agreement and comply with all applicable statutory
requirements and with the requirements of the NYSE, the certificates
evidencing the Preferred Securities and Common Securities are in the
respective forms contemplated by the Declaration, and the certificates
evidencing the Subordinated Debentures are in the form contemplated by
the Indenture.
(xv) There are no actions, suits or proceedings before or by any
court or governmental agency or body, domestic or foreign (including,
without limitation, any insurance regulatory agency or body), now
pending or threatened, which are required to be disclosed in the
Registration Statement or the Prospectus, other than those disclosed
therein, and all pending legal or governmental proceedings to which the
Company, any of its subsidiaries or the Trust is a party or to which
any of their property is subject which are not described in the
Registration Statement and the Prospectus, including ordinary routine
litigation incidental to the business, are, considered in the
aggregate, not material.
(xvi) To the best of such counsel's knowledge and information,
there are no contracts, indentures, mortgages, agreements, notes,
leases or other instruments required to be described or referred to or
incorporated by reference in the Registration Statement or to be filed
as exhibits thereto other than those described or referred to or
incorporated by reference therein or filed as exhibits thereto; the
descriptions thereof or references thereto are true and correct in all
material respects, and no default exists in the due performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, agreement, note, lease
or other instrument so described, referred to, filed or incorporated by
reference.
(xvii) No authorization, approval, consent, order, registration or
qualification of or with any federal or Indiana court or any Indiana
governmental authority or agency (including, without limitation, any
insurance regulatory agency or body) is required for the issuance and
sale of the Designated Securities by the Company or the Trust or the
performance by the Trust and the Company of their respective
obligations in this Agreement, the applicable Pricing Agreement, the
Remarketing Agreement, the Purchase Contract Agreement, the Purchase
Contracts, the Pledge Agreement, the Indenture, the Subordinated
Debentures, the Guarantee Agreement, the Guarantee, the Trust Agreement
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and the Designated Securities, except such as has been made or obtained
prior to the Time of Delivery under the federal securities laws or
under state or foreign securities or Blue Sky laws.
Such counsel shall also furnish you with a letter to the effect that,
as counsel to the Company, he has no reason to believe that, as of its effective
date, the Registration Statement or any further amendment thereto made by the
Company or the Trust prior to the Time of Delivery (other than the financial
statements and related schedules and other financial data therein, as to which
such counsel need not comment) contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that, as of its date, the
Prospectus as amended or supplemented or any further amendment or supplement
thereto made by the Company or the Trust prior to the Time of Delivery (other
than the financial statements and related schedules and other financial data
therein, as to which such counsel need not comment) contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the circumstances in which
they were made, not misleading or that, as of the Time of Delivery, either the
Registration Statement or the Prospectus as amended or supplemented or any
further amendment or supplement thereto made by the Company or the Trust prior
to the Time of Delivery (other than the financial statements and related
schedules and other financial data therein, as to which such counsel need not
comment) contains 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 in which they were made, not misleading; and such counsel does not
know of any amendment to the Registration Statement required to be filed or any
contracts or other documents of a character required to be filed as an exhibit
to the Registration Statement or required to be incorporated by reference into
the Prospectus as amended or supplemented or required to be described in the
Registration Statement or the Prospectus as amended or supplemented which are
not filed or incorporated by reference or described as required; it being
understood that such counsel may state that he has not independently verified
factual statements in the Prospectus (or any such amendment or supplement) and
that no comment need be given as to the portion of the Registration Statement
which shall constitute the Form T-1.
(c) ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, special counsel for the Trust and
the Company, shall have furnished to the Underwriters their written opinion,
dated the respective Time of Delivery for such Designated Securities, in form
and substance satisfactory to the Underwriters, to the effect that:
(i) The Registration Statement is effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made
in the manner and within the time period required by Rule 424(b); no
stop order suspending the effectiveness of the Registration Statement
has been issued under the Act or proceedings therefor initiated, or to
the best of such counsel's knowledge, have been threatened by the
Commission.
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(ii) The Registration Statement, as of its effective date, and the
Prospectus and each amendment or supplement thereto, as of their
respective issue dates (other than the financial statements and the
notes thereto, the financial schedules and any other financial data
included or incorporated by reference therein, as to which such counsel
need express no belief), complied as to form in all material respects
with the requirements of the Act, the 1933 Act Regulations, the Trust
Indenture Act and the regulations thereunder.
(iii) The statements in the Prospectus under the captions "The
Company," "The Trust," "Use of Proceeds," "Description of the FELINE
PRIDES," "Description of the Purchase Contracts," "Certain Provisions
of the Purchase Contract Agreement and the Pledge Agreement," "Certain
Terms of the Preferred Securities," "Description of the Guarantee,"
"Certain Terms of the Subordinated Debentures," "Effect of Obligations
under the Subordinated Debentures and the Guarantee," "ERISA
Considerations," "Lincoln National Corporation," "The Lincoln Trusts,"
"Description of Senior Debt Securities," "Description of Junior
Subordinated Debt Securities," "Description of Preferred Stock and
Common Stock," "Description of Preferred Securities," "Description of
Guarantees," "Description of Stock Purchase Contracts and Stock
Purchase Units," and "Relationship Among the Preferred Securities, the
Corresponding Junior Subordinated Debt Securities and the Guarantees,"
to the extent that they involve matters of law, summaries of legal
matters, documents or proceedings, or legal conclusions, have been
reviewed by such counsel and are correct in all material respects.
(iv) Each Purchase Contract underlying the FELINE PRIDES being
delivered at the Time of Delivery and at any Second Time of Delivery is
a valid and legally binding agreement of the Company enforceable
against the Company in accordance with its terms, except as may be
limited by the Bankruptcy Exceptions; provided, however, that based on
a review of the Bankruptcy Code and applicable case law, upon the
occurrence of a Termination Event (as defined in the Purchase Contract
Agreement), Section 365(e)(1) of the Bankruptcy Code (11 U.S.C.
Sections 101-1330, as amended) should not substantively limit the
provisions of Sections 3.15 and 5.8 of the Purchase Contract Agreement
and Section 4.3 of the Pledge Agreement that require termination of the
Purchase Contracts and release of the Collateral Agent's security
interest in the Underlying Preferred Securities, the Treasury Portfolio
or the Treasury Securities; provided, however, that procedural
restrictions respecting relief from the automatic stay under Section
362 of the Code may affect the timing of the exercise of such rights
and remedies.
(v) The provisions of the Pledge Agreement are effective to create
in favor of the Collateral Agent for the benefit of the Company, a
valid and perfected security interest under the Uniform Commercial Code
as in effect on the date of such opinion in the State of New York in
the Pledged Preferred Securities, Pledged Subordinated Debentures,
Applicable Ownership Interests (as specified in clause (A) of the
definition
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thereof in the Pledge Agreement) of the Treasury Portfolio and the
Pledged Treasury Securities from time to time credited to the
Collateral Account.
(vi) No authorization, approval, consent, order, registration or
qualification of or with any court or federal or New York State
governmental authority or agency is required for the entry into the
Purchase Contracts underlying the FELINE PRIDES, the issuance and sale
of the Designated Securities by the Offerors to the Underwriters, the
issuance of the Subordinated Debentures to the Trust, or the issuance
and sale of the Common Stock by the Company pursuant to such Purchase
Contracts, or the performance by the Company and the Trust of their
respective obligations under this Agreement, the Pricing Agreement, the
Purchase Contracts, the Remarketing Agreement, the Purchase Contract
Agreement, the Pledge Agreement, the Indenture, the Subordinated
Debentures, the Guarantee Agreement, the Trust Agreement and the
Designated Securities, except such as has been obtained and made under
the federal securities laws or such as may be required under state or
foreign securities or Blue Sky laws.
(vii) The issuance and sale of the Income PRIDES and Growth PRIDES
in accordance with this Agreement do not contravene the Commodity
Exchange Act or the regulations of the Commodity Futures Trading
Commission.
(viii) Neither the Trust nor the Company is, nor upon the issuance
and sale of the Designated Securities as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus, will be, an "investment company" or an entity "controlled"
by an "investment company" required to be registered under the
Investment Company Act.
(ix) The Income PRIDES and Growth PRIDES have been duly authorized,
executed and delivered by the Company (assuming due execution by the
Purchase Contract Agent as attorney-in-fact of the holders thereof and
due authentication by the Purchase Contract Agent), and upon payment
therefor as set forth herein, will be duly and validly issued and
outstanding, and will constitute valid and binding obligations of the
Company entitled to the benefits of the Purchase Contract Agreement and
enforceable against the Company in accordance with their respective
terms, except to the extent that enforcement thereof may be limited by
the Bankruptcy Exceptions. The Common Stock and the FELINE PRIDES are
each registered under the Exchange Act, and the Income PRIDES and the
Growth PRIDES issuable at the Time of Delivery and the Common Stock
issuable by the Company pursuant to the Purchase Contracts have been
authorized for listing on the New York Stock Exchange, upon official
notice of issuance.
(x) (A) The Common Securities have been duly authorized under the
Trust Agreement and upon delivery by the Trust to the Company against
payment therefor as set forth in the Trust Agreement, will be duly and
validly issued, fully paid and non-
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assessable beneficial interests in the assets of the Trust; and at each
Time of Delivery, all of the issued and outstanding Common Securities
of the Trust will be directly owned by the Company free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equitable right. (B) The Preferred Securities have been duly authorized
under the Trust Agreement and, when issued and authenticated in
accordance with the provisions of the Trust Agreement and delivered
against payment therefor as set forth in the Pricing Agreement, will
have been duly executed by the Trust, will be validly issued, fully
paid and non-assessable undivided beneficial interests in the assets in
the Trust and will be entitled to the benefits of the Trust Agreement.
(xi) The issuance of the Designated Securities is not, and issuance
of the Common Stock pursuant to the Purchase Contracts will not be,
subject to preemptive or other similar rights arising by law (assuming
no changes in such law after the date of such opinion) or, to the best
of such counsel's knowledge as of the date of such opinion, otherwise.
(xii) This Agreement, the Remarketing Agreement and the Pricing
Agreement have been duly authorized, executed and delivered by each of
the Company and the Trust and constitute valid and binding agreements
of the Company and the Trust, enforceable against the Company and the
Trust in accordance with their respective terms except to the extent
that enforcement thereof may be limited by the Bankruptcy Exceptions.
(xiii) The Trust Agreement has been duly authorized, executed and
delivered by the Company and the Administrative Trustees and is a
legal, valid and binding obligation of the Company, enforceable against
the Company in accordance with its terms, except as enforcement thereof
may be limited by the Bankruptcy Exceptions; and the Trust Agreement
has been duly qualified under the Trust Indenture Act.
(xiv) The Purchase Contract Agreement has been duly authorized,
executed and delivered by the Company and, assuming due authorization,
execution and delivery by the Purchase Contract Agent, constitutes a
valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions.
(xv) The Pledge Agreement has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and
delivery by the Collateral Agent and the Purchase Contract Agent,
constitutes a legal, valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms except to
the extent that enforcement thereof may be limited by the Bankruptcy
Exceptions.
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(xvi) The Guarantee Agreement has been duly authorized, executed
and delivered by the Company and duly qualified under the Trust
Indenture Act and, assuming due authorization, execution, and delivery
by the Guarantee Trustee, constitutes a valid and binding agreement of
the Company, enforceable against the Company in accordance with its
terms, except to the extent that enforcement thereof may be limited by
Bankruptcy Exceptions.
(xvii) The Indenture has been duly authorized, executed and
delivered by the Company and duly qualified under the Trust Indenture
Act and, assuming authorization, execution, and delivery thereof by the
Subordinated Debenture Trustee, is a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except to the extent that enforcement thereof may be limited by the
Bankruptcy Exceptions.
(xviii) The Subordinated Debentures are in the form contemplated by
the Indenture, have been duly authorized, executed and delivered by the
Company and, when authenticated by the Subordinated Debenture Trustee
in the manner provided for in the Indenture and delivered against
payment therefor by the Trust, will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
Such counsel shall also furnish you with a letter to the effect that,
the Registration Statement and the Prospectus as amended or supplemented and any
further amendments and supplements thereto made by the Company or the Trust
prior to the Time of Delivery for the Designated Securities (other than the
financial statements and related schedules and other financial data therein, as
to which such counsel need not comment) comply as to form in all material
respects with the requirements of the Act and the Trust Indenture Act and the
rules and regulations thereunder; based upon specified participation of such
counsel in connection with the preparation of the Registration Statement and the
Prospectus, such counsel has no reason to believe that, as of its effective
date, the Registration Statement or any further amendment thereto made by the
Company or the Trust prior to the Time of Delivery (other than the financial
statements and related schedules and other financial data therein, as to which
such counsel need not comment) contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that, as of its date, the
Prospectus as amended or supplemented or any further amendment or supplement
thereto made by the Company or the Trust prior to the Time of Delivery (other
than the financial statements and related schedules and other financial data
therein, as to which such counsel need not comment) contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the circumstances in which
they were made, not misleading or that, as of the Time of Delivery, either the
Registration Statement or the Prospectus as amended or supplemented or any
further amendment or
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supplement thereto made by the Company or the Trust prior to the Time of
Delivery (other than the financial statements and related schedules and other
financial data therein, as to which such counsel need not comment) contains 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 in which
they were made, not misleading; it being understood that such counsel may state
that such counsel has not independently verified factual statements in the
Prospectus (or any such amendment or supplement). Such letter shall also state
that each of the documents incorporated by reference in the Registration
Statement or the Prospectus at the time they were filed or last amended (other
than the financial statements and the notes thereto, the financial schedules,
and any other financial data included or incorporated by reference therein, as
to which such counsel need express no belief), complied as to form in all
material respects with the requirements of the Exchange Act and the 1934 Act
Regulations, as applicable; and such counsel has no reason to believe that any
of such documents, when such documents became effective or were so filed, as the
case may be, contained, in the case of a registration statement which became
effective under the Act, an untrue statement of a material fact, or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and, in the case of other documents which
were filed under the Exchange Act with the Commission, an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein not misleading.
(d) ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, special Delaware Counsel to the Trust
and the Company, shall have furnished to the Underwriters, the Company and the
Trust their written opinion, dated the respective Time of Delivery, in form and
substance satisfactory to you, to the effect that:
(i) The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust 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.
(ii) Under the Delaware Business Trust Act and the Trust Agreement,
the Trust has the power and authority to own property and conduct its
business, all as described in the Prospectus.
(iii) The Trust Agreement constitutes a valid and legally binding
obligation of the Company and the Trustees, enforceable against the
Company and the Trustees, in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
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(iv) Under the Delaware Business Trust Act and the Trust Agreement,
the Trust has the power and authority to (a) execute and deliver the
Pricing Agreement (incorporating this Underwriting Agreement) and to
perform its obligations under this Underwriting Agreement and the
Pricing Agreement, and (b) issue and perform its obligations under the
Designated Securities and the Common Securities.
(v) Under the Delaware Business Trust Act and the Trust Agreement,
the execution and delivery by the Trust of the Pricing Agreement
(incorporating this Underwriting Agreement) and the performance by the
Trust of its obligations thereunder, have been duly authorized by all
necessary action on the part of the Trust.
(vi) 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
beneficial interests in the Trust and are entitled to the benefits
provided by the Trust Agreement; the holders of the Preferred
Securities (whether as part of the FELINE PRIDES or independently), 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; provided that such counsel may note that holders of the
Preferred Securities may be obligated, pursuant to the Trust Agreement,
to (a) provide indemnity and/or security in connection with, and pay
taxes or governmental charges arising from, transfers or exchanges of
certificates evidencing the Preferred Securities and the issuance of
replacement of such certificates and (b) provide security and indemnity
in connection with requests of or directions to the Property Trustee
(as defined in the Trust Agreement) to exercise its rights and remedies
under the Trust Agreement.
(vii) The Common Securities have been duly authorized by the Trust
Agreement and are validly issued and represent beneficial interests in
the Trust.
(viii) Under the Delaware Business Trust Act and the Trust
Agreement, the issuance of the Preferred Securities and the Common
Securities is not subject to preemptive rights.
(ix) The issuance and sale by the Trust of the Preferred Securities
and the Common Securities, the execution and delivery of the Pricing
Agreement (incorporating this Underwriting Agreement) and performance
by the Trust of this Underwriting Agreement and the Pricing Agreement,
the consummation by the Trust of the transactions contemplated thereby
and compliance by the Trust with its obligations thereunder will not
violate (a) any of the provisions of the Certificate of Trust of the
Trust or the Trust Agreement, or (b) any applicable Delaware law or
administrative regulation.
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(x) Assuming that the Trust derives no income from or connected
with services provided within the State of Delaware and has no assets,
activities (other than maintaining the Delaware Trustee and the filing
of documents with the Secretary of State of the State of Delaware) or
employees in the State of Delaware, no authorization, approval, consent
or order of any Delaware court or governmental authority or agency is
required to be obtained by the Trust solely in connection with the
issuance and sale of the Designated Securities and the Common
Securities. In rendering the opinion expressed in this paragraph (x),
such counsel need express no opinion concerning the securities laws of
the State of Delaware.
(xi) Assuming that the Trust derives no income from or connected
with services provided within the State of Delaware and has no assets,
activities (other than maintaining the Delaware Trustee and the filing
of documents with the Secretary of State of the State of Delaware) or
employees in the State of Delaware, the Securityholders (other than
those holders of the Securities who reside or are domiciled in the
State of Delaware) will have no liability for income taxes imposed by
the State of Delaware solely as a result of their participation in the
Trust, and the Trust will not be liable for any income tax imposed by
the State of Delaware.
(e) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, counsel to The First National Bank of Chicago,
as Property Trustee under the Trust Agreement and Guarantee Trustee under the
Guarantee Agreement, and to First Chicago Delaware Inc., as Delaware Trustee,
shall have furnished to the Underwriters their written opinion, dated the
respective Time of Delivery for such Designated Securities, in form and
substance satisfactory to the Underwriters, to the effect that:
(i) The Property Trustee is a national banking association with
trust powers, duly organized, validly existing and in good standing
under the laws of the United States with all necessary corporate power
and authority to execute, deliver, and to carry out and perform its
obligations under the terms of, the Trust Agreement and the Guarantee
Agreement.
(ii) The Delaware Trustee is a Delaware corporation, duly
organized, validly existing and in good standing, with full corporate
power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, the Trust Agreement.
(iii) The execution, delivery and performance by each of the
Property Trustee and the Delaware Trustee of the Trust Agreement, and
the execution, delivery and performance by Guarantee Trustee of the
Guarantee Agreement, have been duly authorized by all necessary
corporate action on the part of the Property Trustee and the Delaware
Trustee, respectively, in the case of the Trust Agreement, and by the
Guarantee Trustee, in the case of the Guarantee Agreement. The Trust
Agreement and the
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Guarantee Agreement have been duly executed and delivered by the
Property Trustee and the Delaware Trustee, respectively, in the case of
the Trust Agreement, and by the Guarantee Trustee, in the case of the
Guarantee Agreement, and constitute the legal, valid and binding
obligation of the Property Trustee and the Delaware Trustee, in the
case of the Trust Agreement, and of the Guarantee Trustee, in the case
of the Guarantee Agreement, enforceable against the Property Trustee
and the Delaware Trustee in the case of the Trust Agreement, and
against the Guarantee Trustee, in the case of the Guarantee Agreement,
in accordance with their terms except to the extent enforcement thereof
may be limited by the Bankruptcy Exceptions.
(iv) The execution, delivery and performance by each of the
Property Trustee and the Delaware Trustee of the Trust Agreement, and
the execution, delivery and performance by the Guarantee Trustee of the
Guarantee Agreement, do not conflict with, or constitute a breach of,
the Property Trustee's, the Delaware Trustee's or the Guarantee
Trustee's respective charter or bylaws.
(v) No consent, approval or authorization of, or registration with
or notice to, any Delaware or federal banking authority is required for
the execution, delivery or performance by the Property Trustee and the
Guarantee Trustee of the Trust Agreement and the Guarantee Agreement.
(f) The Law Department of The First National Bank of Chicago, as
Purchase Contract Agent, shall have furnished to the Underwriters its written
opinion, in form and substance satisfactory to the Underwriters, to the effect
that:
(i) The First National Bank of Chicago is duly incorporated and is
validly existing as a banking corporation with trust powers under the
laws of the United States with all necessary power and authority to
execute, deliver and perform its obligations under the Purchase
Contract Agreement and the Pledge Agreement.
(ii) The execution, delivery and performance by the Purchase
Contract Agent of the Purchase Contract Agreement and the Pledge
Agreement, and the authentication and delivery of the Securities have
been duly authorized by all necessary corporate action on the part of
the Purchase Contract Agent. The Purchase Contract Agreement and the
Pledge Agreement have been duly executed and delivered by the Purchase
Contract Agent, and constitute the legal, valid and binding obligations
of the Purchase Contract Agent, enforceable against the Purchase
Contract Agent in accordance with its terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions.
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(iii) The execution, delivery and performance of the Purchase
Contract Agreement and the Pledge Agreement by the Purchase Contract
Agent does not conflict with or constitute a breach of the charter or
by-laws of the Purchase Contract Agent.
(iv) No consent, approval or authorization of, or registration with
or notice to, any Illinois or federal governmental authority or agency
is required for the execution, delivery or performance by the Purchase
Contract Agent of the Purchase Contract Agreement and the Pledge
Agreement.
(g) ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, tax counsel to the Offerors, shall
have furnished to the Underwriters their written opinion, generally to the
effect that based upon current law and the assumptions stated or referred to
therein, under current U.S. federal income tax law:
(i) the Trust will be classified as a grantor trust and not as an
association taxable as a corporation;
(ii) the Subordinated Debentures will be classified as indebtedness
of the Company and
(iii) the discussion in the Prospectus under the caption "Certain
Federal Income Tax Consequences" is a fair and accurate summary of the
matters addressed therein, based upon current law and the assumptions
stated or referred to therein.
(h) LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., counsel for the
Underwriters, shall have furnished their written opinion, in form and substance
satisfactory to the Underwriters, with respect to the issuance and sale of the
Designated Securities, and such other related matters as the Underwriters may
reasonably 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 giving its opinion, such counsel may rely as to certain matters of
Indiana law upon the opinion of ▇▇▇▇ ▇. ▇▇▇▇▇▇, counsel for the Offerors, which
shall be delivered in accordance with Section 5(b) hereof and, as to certain
matters of Delaware law, upon the opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, PA,
special Delaware counsel for the Offerors, which shall be delivered in
accordance with Section 5(d) hereof.
(i) Between the date of this Agreement and prior to the Time of
Delivery, no material adverse change shall have occurred in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Trust or the Company and its subsidiaries, considered as one
enterprise, whether or not in the ordinary course of business.
(j) At the First Time of Delivery, the Underwriters shall have received
a certificate of the President or a Vice-President of the Company and of the
Chief Financial Officer or Chief Accounting Officer of the Company, and a
certificate of an Administrative Trustee of the Trust,
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in each case dated as of the Time of Delivery, to the effect that (i) there has
been no material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Trust or of the
Company and its subsidiaries considered as one enterprise, whether or not in the
ordinary course of business, (ii) the representations and warranties in Section
1 hereof are true and correct as though expressly made at and as of such Time of
Delivery, (iii) the Company and the Trust have complied with all agreements and
satisfied all conditions on their part to be performed or satisfied at or prior
to such Time of Delivery, and (iv) no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings for that purpose
have been initiated or threatened by the Commission.
(k) At the time of the execution of this Agreement, the Underwriters
shall have received from Ernst & Young LLP, a letter dated such date in form and
substance satisfactory to the Underwriters to the effect set forth in Annex II.
(l) At the First Time of Delivery, the Underwriters shall have received
from Ernst & Young LLP, a letter, dated as of the Time of Delivery, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to subsection (j) of this Section, except that the specified date referred to
shall be a date not more than five days prior to the Time of Delivery.
(m) At the First Time of Delivery, (i) there shall not have occurred
any decrease in the rating assigned to the Designated Securities or any other
securities of the Company or of the financial condition of the Company by any
"nationally recognized statistical rating organization," as defined for purposes
of Rule 436(g)(2) under the 1933 Act Regulations, and (ii) no such organization
shall have publicly announced that it has under surveillance or review its
rating of the Designated Securities or any other securities of the Company.
(n) At the First Time of Delivery, the Income PRIDES, the Growth PRIDES
and the Common Stock shall have duly listed, subject to notice of issuance, on
the New York Stock Exchange.
(o) In the event that the Underwriters exercise the options provided in
Section 2(b) hereof to purchase all or any portion of the Optional Designated
Securities, the representations and warranties of the Offerors contained herein
and the statements in any certificates furnished by the Offerors hereunder shall
be true and correct as of, and as if made on, each such Time of Delivery, and at
the relevant Time of Delivery, the Underwriters shall have received:
(i) A certificate, dated such Second Time of Delivery, of the
President or a Vice-President of the Company and the Chief Financial
Officer or Chief Accounting Officer of the Company and a certificate of
an Administrative Trustee of the Trust confirming that the certificate
delivered at the Time of Delivery pursuant to Section 5(j) hereof is
true and correct as of, and as if made on, such Second Time of
Delivery.
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(ii) The favorable opinion of ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., Executive Vice
President and General Counsel for the Company, in form and substance
satisfactory to counsel for the Underwriters, dated such Time of
Delivery, relating to the Optional Designated Securities and otherwise
to the same effect as the opinion required by Section 5(b) hereof.
(iii) The favorable opinion of ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
special counsel for the Offerors, in form and substance satisfactory to
counsel for the Underwriters, dated such Time of Delivery, relating to
the Optional Designated Securities and otherwise to the same effect as
the opinion required by Sections 5(c) hereof.
(iv) The favorable opinion of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, PA,
special Delaware counsel for the Offerors, in form and substance
satisfactory to counsel for the Underwriters, dated such Time of
Delivery, relating to the Optional Designated Securities and otherwise
to the same effect as the opinion required by Section 5(d) hereof.
(v) The favorable opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, counsel to The
First National Bank of Chicago and First Chicago Delaware Inc. in form
and substance satisfactory to counsel for the Underwriter, dated such
Time of Delivery, relating to the Optional Designated Securities and
otherwise to the same effect as the opinion required by Section 5(e)
hereof.
(vi) The favorable opinion of the Law Department of The First
National Bank of Chicago, as Purchase Contract Agent, in form and
substance satisfactory to counsel for the Underwriters, dated such Time
of Delivery, relating to the Optional Designated Securities and
otherwise to the same effect as the opinion required by Section 5(f)
hereof.
(vii) The favorable opinion of ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, tax
counsel for the Offerors, in form and substance satisfactory to counsel
for the Underwriters, dated such Time of Delivery relating to the
Optional Designated Securities and otherwise to the same effect as the
opinion required by Section 5(g) hereof.
(viii) The favorable opinion of LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
L.L.P., counsel for the Underwriters, dated such Time of Delivery,
relating to the Optional Designated Securities and otherwise to the
same effect as the opinion required by Section 5(h) hereof.
(ix) A letter from Ernst & Young LLP in form and substance
satisfactory to the Underwriters and dated such Time of Delivery,
substantially the same in form and substance as the letter furnished to
the Underwriters pursuant to Section 5(k) hereof, except that the
"specified date" in the letter furnished pursuant to this Section shall
be a date not more than five days prior to such Time of Delivery.
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(x) Furthermore, at such Time of Delivery, (i) there shall not have
occurred any decrease in the rating assigned to the Designated
Securities or any other securities of the Company or of the financial
condition of the Company by any "nationally recognized statistical
rating organization," as defined for purposes of Rule 436(g)(2) under
the 1933 Act Regulations, and (ii) no such organization shall have
publicly announced that it has under surveillance or review its rating
of the Designated Securities or any other securities of the Company or
of the financial condition of the Company.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement, or, in the case
of any condition to the purchase of Optional Designated Securities at a Time of
Delivery which is after the First Time of Delivery, the obligations of the
Underwriters to purchase the relevant Optional Securities may be terminated by
the Underwriters by notice to the Company at any time at or prior to the First
Time of Delivery, or such subsequent Time of Delivery, as the case may be, and
such termination shall be without liability of any party to any other party
except as provided in Section 4 and except that Sections 1, 6, 7 and 8 shall
survive any such termination and remain in full force and effect.
SECTION 6. Indemnification and Contribution.
(a) The Trust and the Company will jointly and severally indemnify and
hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter 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 an
untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Designated Securities, or any amendment or supplement thereto,
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, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such action or claim as such expenses are
incurred; provided, however, that neither the Trust nor the Company shall be
liable in any such case 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 or omission or alleged omission made in any preliminary prospectus,
any preliminary prospectus supplement, the Registration Statement, the
Prospectus as amended or supplemented and any other prospectus relating to the
Designated Securities, or any such amendment or supplement in reliance upon and
in conformity with written information furnished to the Trust or the Company by
any Underwriter of Designated Securities through the Underwriters expressly for
use in the Prospectus as amended or supplemented relating to such Designated
Securities and; provided, further, that neither the Trust nor the Company shall
be liable to any Underwriter under the indemnity agreement in this subsection
(a) with respect to any loss, claim, damage or liability resulting from an
untrue or alleged untrue statement or omission or alleged omission of a
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material fact in a preliminary prospectus to the extent that a court of
competent jurisdiction has found by final and nonappealable order that any such
loss, claim, damage or liability of such Underwriter results from the fact that
such Underwriter sold Designated Securities to a person to whom there was not
sent or given, at or prior to the written confirmation of such sale, a copy of
the Prospectus as then amended or supplemented (excluding documents incorporated
by reference), if such Underwriter failed to make efforts generally consistent
with the then prevailing industry practice to effect such delivery and (i) such
delivery to such person is required by Section 5 of the Act, (ii) the Trust or
the Company has furnished copies of such Prospectus as amended or supplemented
to such Underwriter a reasonable period of time prior to the Underwriter being
required so to deliver such Prospectus as amended or supplemented and (iii) such
Prospectus as amended or supplemented corrected the untrue or alleged untrue
statement or omission or alleged omission of material fact contained in the
preliminary prospectus.
(b) Each Underwriter will indemnify and hold harmless the Trust and the
Company against any losses, claims, damages or liabilities to which the Trust or
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 an untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus, any preliminary
prospectus supplement, the Registration Statement, the Prospectus as amended or
supplemented and any other prospectus relating to the Designated Securities, or
any amendment or supplement thereto, 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, 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 any
preliminary prospectus, any preliminary prospectus supplement, the Registration
Statement, the Prospectus as amended or supplemented and any other prospectus
relating to the Designated Securities, or any such amendment or supplement in
reliance upon and in conformity with written information furnished to the Trust
or the Company by such Underwriter through the Underwriters expressly for use
therein; and will reimburse the Trust or the Company for any legal or other
expenses reasonably incurred by the Trust or the Company in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
-34-
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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 shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation; provided, however, that an indemnified party shall have
the right to retain its own counsel, with reasonable fees and expenses to be
paid by the indemnifying party, if the indemnified party reasonably believes
that representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding (it being understood that in no event shall the
indemnifying parties be liable for fees and expenses of more than one counsel
(in addition to one local counsel in each applicable jurisdiction) separate from
their own counsel for all indemnified parties in connection with any one action
or separate but similar or related actions in the same jurisdiction arising out
of the same general allegations or circumstances). No indemnifying party shall,
without the written consent of the indemnified party, effect the settlement or
compromise of, or consent to the entry of any judgment with respect to, any
pending or threatened action or claim in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified party is an
actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (ii) does not
include any statement as to, or an admission of, fault, culpability or a failure
to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Trust and the Company on the one hand and the
Underwriters of the Designated Securities on the other from the offering of the
Designated Securities to which such loss, claim, damage or liability (or action
in respect thereof) relates. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Trust and the Company
on the one hand and the Underwriters of the Designated Securities on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Trust and the Company on the one hand and such Underwriters on the other shall
be deemed to be in the same proportion as the total net proceeds from such
offering (before
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deducting expenses) received by the Trust less the total underwriting
compensation paid by the Company bear to the total underwriting discounts and
commissions received by such Underwriters. 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 Trust and the Company on
the one hand or such Underwriters on the other and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Trust, the Company and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this subsection (d)
were determined by pro rata allocation or by any other method of allocation
(even if the Underwriters were treated as one entity for such purpose) which
does not take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a result
of the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in 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 such action or claim. Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the applicable Designated Securities underwritten by it and distributed to the
public were offered 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 statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The obligations of the Underwriters of Designated
Securities in this subsection (d) to contribute are several in proportion to
their respective underwriting obligations with respect to such Designated
Securities and not joint.
(e) The obligations of the Trust and the Company under this Section 6
shall be in addition to any liability which the Trust and the Company may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section 6 shall be in addition to
any liability which the respective Underwriters may otherwise have and shall
extend, upon the same terms and conditions, to each officer and director of the
Company, to each administrative trustee of the Trust and to each person, if any,
who controls the Trust or the Company within the meaning of the Act.
SECTION 7. Default by an Underwriter.
(a) If any Underwriter shall default in its obligation to purchase the
Firm Designated Securities or the Optional Designated Securities which it has
agreed to purchase under the Pricing Agreement relating to such Designated
Securities, the Underwriters may in their discretion arrange for themselves or
another party or other parties to purchase such Designated Securities on the
terms contained herein. If within thirty-six hours after such default by any
-36-
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Underwriter the Underwriters do not arrange for the purchase of such Firm
Designated Securities or such Optional Designated Securities, as the case may
be, then the Trust and the Company shall be entitled to a further period of
thirty-six hours within which to procure another party or other parties
satisfactory to the Underwriters to purchase such Designated Securities on such
terms. In the event that, within the respective prescribed period, the
Underwriters notify the Trust and the Company that they have so arranged for the
purchase of such Designated Securities, or the Trust and the Company notify the
Underwriters that they have so arranged for the purchase of such Designated
Securities, the Underwriters or the Trust and the Company shall have the right
to postpone the Time of Delivery for such Designated Securities for a period of
not more than seven days, in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus as amended or
supplemented, or in any other documents or arrangements, and the Trust and the
Company agree to file promptly any amendments or supplements to the Registration
Statement or the Prospectus which in the opinion of the Underwriters may thereby
be made necessary. The term "Underwriter" as used in this Agreement shall
include any person substituted under this Section with like effect as if such
person had originally been a party to the Pricing Agreement with respect to such
Designated Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Firm Designated Securities or Optional Designated Securities, as the case may
be, of a defaulting Underwriter or Underwriters by the Underwriters and the
Trust and the Company as provided in subsection (a) above, the aggregate number
of such Designated Securities which remains unpurchased does not exceed
one-eleventh of the aggregate number of the Firm Designated Securities or
Optional Designated Securities, as the case may be, to be purchased at the
respective Time of Delivery, then the Trust and the Company shall have the right
to require each non-defaulting Underwriter to purchase the number of Firm
Designated Securities or Optional Designated Securities, as the case may be,
which such Underwriter agreed to purchase under the Pricing Agreement relating
to such Designated Securities and, in addition, to require each non-defaulting
Underwriter to purchase its pro rata share (based on the number of Firm
Designated Securities or Optional Designated Securities, as the case may be,
which such Underwriter agreed to purchase under such Pricing Agreement) of the
Firm Designated Securities or Optional Designated Securities, as the case may
be, of such defaulting Underwriter or Underwriters for which such arrangements
have not been made; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Firm Designated Securities or Optional Designated Securities, as the case may
be, of a defaulting Underwriter or Underwriters by the Trust and the Company as
provided in subsection (a) above, the aggregate number of Firm Designated
Securities or Optional Designated Securities, as the case may be, which remains
unpurchased exceeds one-eleventh of the aggregate number of the Firm Designated
Securities or Optional Designated Securities, as the case may be, to be
purchased at the respective Time of Delivery, as referred to in subsection (b)
above, or if the Trust and the Company shall not exercise the right described in
subsection (b) above to require non-defaulting
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Underwriters to purchase Firm Designated Securities or Optional Designated
Securities, as the case may be, of a defaulting Underwriter or Underwriters,
then the Pricing Agreement relating to such Firm Designated Securities or
Optional Designated Securities, as the case may be, shall thereupon terminate,
without liability on the part of any non-defaulting Underwriter, the Trust or
the Company, except for the expenses to be borne by the Trust, the Company and
the Underwriters as provided in Section 4 hereof and the indemnity and
contribution agreements in Section 6 hereof; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
SECTION 8. Representations and Indemnities to Survive. The respective
indemnities, agreements, representations, warranties and other statements of the
Trust, the Company and the several Underwriters, as set forth in this Agreement
or made by or on behalf of them, respectively, pursuant to this Agreement, shall
remain in full force and effect, regardless of any investigation (or any
statement as to the results thereof) made by or on behalf of any Underwriter or
any controlling person of any Underwriter, or the Trust, the Company, or any
officer or director or controlling person of the Trust or the Company, and shall
survive delivery of and payment for the Designated Securities.
SECTION 9. Termination. (a) If any Pricing Agreement or Over-allotment
Option shall be terminated pursuant to Section 7 hereof, neither the Trust nor
the Company shall then be under any liability to any Underwriter with respect to
the Firm Designated Securities or Optional Designated Securities covered by such
Pricing Agreement except as provided in Section 4 and Section 6 hereof; but, if
for any other reason, Designated Securities are not delivered by or on behalf of
the Trust or the Company as provided herein, the Trust and the Company will
reimburse the Underwriters for all out-of-pocket expenses approved in writing by
the Underwriters, including fees and disbursements of counsel, reasonably
incurred by the Underwriters in making preparations for the purchase, sale and
delivery of such Designated Securities, but the Trust and the Company shall then
be under no further liability to any Underwriter with respect to such Designated
Securities except as provided in Section 4 and Section 6 hereof.
(b) This Agreement shall be subject to termination in the absolute
discretion of the Underwriters, by notice given to the Company prior to delivery
of and payment for the Designated Securities, if prior to such time (i) trading
in the Company's Common Stock or any preferred stock or Preferred Securities
shall have been suspended or materially limited by the Commission or the New
York Stock Exchange or trading in securities generally on the New York Stock
Exchange shall have been suspended or limited or minimum prices shall have been
established on such Exchange, (ii) a general moratorium on commercial banking
activities shall have been declared either by Federal or New York State
authorities, or (iii) there shall have occurred any outbreak or escalation of
hostilities or the declaration by the United States of a national emergency or
war that, in the judgment of the Underwriters, makes it impracticable or
inadvisable to market the Designated Securities in the manner contemplated.
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SECTION 10. Notices. All statements, requests, notices and agreements
hereunder shall be in writing, and if to the Underwriters shall be delivered or
sent by mail, telex or facsimile transmission to the addresses of the
Underwriters as set forth in the Pricing Agreement; and if to the Trust or the
Company shall be delivered or sent by mail, telex or facsimile transmission to
the address of the Trust or the Company set forth in the Registration Statement:
Attention: Corporate Secretary, with a copy to Lincoln National Corporation, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. Attention: Office of the
Treasurer, Facsimile Transmission No. (▇▇▇) ▇▇▇-▇▇▇▇; provided, however, that
any notice to an Underwriter pursuant to Section 7(c) hereof shall be delivered
or sent by mail, telex or facsimile transmission to such Underwriter at its
address set forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Trust and the Company by
the Underwriters upon request. Any such statements, requests, notices or
agreements shall take effect upon receipt thereof.
SECTION 11. Parties. This Agreement and each Pricing Agreement shall be
binding upon, and inure solely to the benefit of, the Underwriters, the Trust
and the Company and, to the extent provided in Section 4 and Section 8 hereof,
the officers and directors of the Trust or the Company and each person who
controls the Trust, the Company or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement or any such
Pricing Agreement. No purchaser of any of the Designated Securities from any
Underwriter shall be deemed a successor or assignee by reason merely of such
purchase.
SECTION 12. GOVERNING LAW. THIS AGREEMENT AND EACH PRICING AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK.
SECTION 13. Miscellaneous. This Agreement and each Pricing Agreement
may be executed by any one or more of the parties hereto and thereto in any
number of counterparts, each of which shall be deemed to be an original, but all
such respective counterparts shall together constitute one and the same
instrument.
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If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, and upon acceptance hereof by you,
this agreement shall constitute a binding agreement between each of the
Underwriters, the Trust and the Company. It is understood that your acceptance
of this agreement is or will be pursuant to the authority set forth in a form of
Agreement among Underwriters, the form of which shall be submitted to the
Company for examination upon request, but without warranty on the part of the
Underwriters as to the authority of the signers thereof.
Very truly yours,
LINCOLN NATIONAL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
LINCOLN NATIONAL CAPITAL IV
By: Lincoln National Corporation, as Depositor
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Administrative Trustee
Accepted as of the date hereof:
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
Title: Vice President
BT Alex. ▇▇▇▇▇ Incorporated
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
CIBC Oppenheimer Corp.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Managing Director
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ANNEX I
PRICING AGREEMENT
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
BT ALEX. ▇▇▇▇▇ INCORPORATED
CIBC OPPENHEIMER CORP.
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters
World Financial Center - North Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Sirs:
Lincoln National Capital IV, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), and Lincoln National
Corporation, an Indiana corporation (the "Company"), propose, subject to the
terms and conditions stated herein and in the Underwriting Agreement, dated
August 10, 1998 (the "Underwriting Agreement"), between the Company and the
Trust on the one hand and the Underwriters named in Schedule I to the
Underwriting Agreement, on the other hand, to issue and sell to the Underwriters
named in Schedule I hereto (the "Underwriters") the Securities specified in
Schedule II hereto (the "Designated Securities" consisting of Firm Designated
Securities and any Optional Designated Securities the Underwriters may elect to
purchase). Each of the provisions of the Underwriting Agreement is incorporated
herein by reference in its entirety, and shall be deemed to be a part of this
Agreement to the same extent as if such provisions had been set forth in full
herein; and each of the representations and warranties set forth therein shall
be deemed to have been made at and as of the date of this Pricing Agreement,
except that each representation and warranty which refers to the Prospectus in
Section 2 of the Underwriting Agreement shall be deemed to be a representation
or warranty as of the date of the Underwriting Agreement in relation to the
Prospectus (as therein defined), and also a representation and warranty as of
the date of this Pricing Agreement in relation to the Prospectus as amended or
supplemented relating to the Designated Securities which are the subject of this
Pricing Agreement.
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Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined. The Underwriters of the Designated
Securities and their addresses are set forth at the end of Schedule II hereto.
An amendment to the Registration Statement, or a supplement to the
Prospectus, as the case may be, relating to the Designated Securities, in the
form heretofore delivered to you is now proposed to be filed with the
Commission.
Subject to the terms and conditions set forth herein and in the
Underwriting Agreement incorporated herein by reference, (a) the Company and the
Trust agree to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company and
the Trust, at the time and place and at the purchase price to the Underwriters
set forth in Schedule II hereto, the number of Firm Designated Securities set
forth opposite the name of such Underwriter in Schedule I hereto, and (b) in the
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Designated Securities, as provided below, the Trust agrees to
issue and sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Trust at the purchase price to
the Underwriters set out in Schedule II hereto that portion of the number of
Optional Designated Securities as to which such election shall have been
exercised.
The Company and the Trust hereby grants to each of the Underwriters the
right to purchase at their election up to the number of Optional Designated
Securities set forth opposite the name of such Underwriter in Schedule I hereto
on the terms referred to in the paragraph above for the sole purpose of covering
over-allotments in the sale of the Firm Designated Securities. Any such election
to purchase Optional Designated Securities may be exercised by written notice
from the Underwriters to the Trust and the Company given within a period of 30
calendar days after the date of this Pricing Agreement, setting forth the
aggregate number of Optional Designated Securities to be purchased and the date
on which such Optional Designated Securities are to be delivered, as determined
by the Underwriters, but in no event earlier than the First Time of Delivery or,
unless the Underwriters, the Company and the Trust otherwise agree in writing,
no earlier than two or later than ten business days after the date of such
notice.
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43
If the foregoing is in accordance with your understanding, please sign
and return to us eight counterparts hereof, and upon acceptance hereof by you,
on behalf of each of the Underwriters, this letter and such acceptance hereof,
including the provisions of the Underwriting Agreement incorporated herein by
reference, shall constitute a binding agreement between each of the
Underwriters, the Trust and the Company. It is understood that your acceptance
of this letter on behalf of each of the Underwriters is or will be pursuant to
the authority set forth in a form of Agreement among Underwriters, the form of
which shall be submitted to the Company for examination upon request, but
without warranty on the part of the Underwriters as to the authority of the
signers thereof.
Very truly yours,
LINCOLN NATIONAL CORPORATION
By:___________________________________
Name:
Title:
LINCOLN NATIONAL CAPITAL IV
By: Lincoln National Corporation, as Depositor
By:_________________________________
Name:
Title:
Accepted as of the date hereof:
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
By: ___________________________
Name:
Title:
BT Alex. ▇▇▇▇▇ Incorporated
By: ___________________________
Name:
Title:
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp.
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44
By:
Name:
Title:
SCHEDULE I
Number of Firm
Separate
Number of Firm Number of Firm Preferred
Income PRIDES Growth PRIDES Securities
Underwriters to be Purchased to be Purchased to be Purchased
------------ --------------- --------------- ---------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated...............................
BT Alex. ▇▇▇▇▇ Incorporated...................
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp.........................
--------- --------- ---------
Total......................................
========= ========= =========
Maximum
Number of
Optional
Income PRIDES
Underwriters to be Purchased
------------ ---------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated...............................
BT Alex. ▇▇▇▇▇ Incorporated...................
CIBC ▇▇▇▇▇▇▇▇▇▇▇ Corp.........................
---------
Total......................................
=========
-1-
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SCHEDULE II
Offerors:
Lincoln National Corporation
Lincoln National Capital IV
Title of Designated Securities:
FELINE PRIDES, consisting of Income PRIDES and Growth PRIDES, Stated
Amount $__ per Security
____% Preferred Securities, Series D
Aggregate Principal Amount:
Aggregate principal amount of Firm Designated Securities:
__________ Income PRIDES with an aggregate Stated Amount of $_____________;
__________ Growth PRIDES with an aggregate Stated Amount of $_____________;
__________ Separate Preferred Securities with an aggregate liquidation
value of $__________.
Maximum aggregate principal amount of Optional Designated Securities:
_____________________________________
Price to Public:
$______ per Income PRIDES
$______ per Growth PRIDES
$______ per Preferred Security
Underwriters' Compensation:
$______ per Income PRIDES (Gross Spread)
$______ per Growth PRIDES (Gross Spread)
$______ per Preferred Security (Gross Spread)
Purchase Price by Underwriters (reflecting Underwriters' Compensation):
$______ per Income PRIDES
$______ per Growth PRIDES
$______ per Preferred Security
Specified Funds for Payment of Purchase Price:
New York Clearing House same-day funds
Accountants' Letter to Be Delivered on Date of Pricing Agreement:
Yes.
-1-
46
PURCHASE CONTRACT AGREEMENT:
Purchase Contract Agreement dated as of August __, 1998, between the
Purchase Contract Agent and the Company
TRUST AGREEMENT:
Amended and Restated Trust Agreement dated as of August __, 1998, between
the Company and the Trustees named therein
INDENTURE:
Junior Subordinated Indenture dated as of May 1, 1996, between the Company
and The First National Bank of Chicago as Subordinated Debenture Trustee
(the "Indenture"), as supplemented by the First Supplemental Indenture
dated as of August __, 1998
GUARATEE:
Guarantee Agreement, dated as of August __, 1998, between the Company and
Guarantee Trustee with respect to the Preferred Securities
PLEDGE AGREEMENT:
Pledge Agreement dated as of August __, 1998 between The Chase Manhattan
Bank, as Collateral Agent, and the Company with respect to Underlying
Preferred Securities and the Treasury Securities underlying the Growth
PRIDES
REMARKETING DATE FOR PREFERRED SECURITIES:
August __, 2001
MATURITY:
Purchase Contracts underlying Income PRIDES and Growth PRIDES: August __,
2001
Underlying Preferred Securities comprising part of the Income PRIDES:
August __, 2003
Treasury Securities comprising part of the Growth PRIDES:
August __, 2001
Subordinated Debentures underlying Preferred Securities:
August __, 2003
INTEREST/DISTRIBUTION RATE:
Income PRIDES: ____% per annum (____% Disribution from Preferred Security
and ____% Contract Adjustment Payments)
Growth PRIDES: ____% per annum - Contact Adjustment Payments
Preferred Securities: ____% per annum - Distributions
INTEREST PAYMENT DATES:
February 16, May 16, August 16 and November 16, commencing November 16,
1998
INTEREST DEFERRAL:
Not to exceed August __, 2003 (maturity date for Subordinated Debentures)
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REDEMPTION PROVISIONS:
The redemption provisions set forth in Section 4.2 of the Trust Agreement
shall apply to the Preferred Securities and the underlying Subordinated
Debentures and the Common Securities.
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SINKING FUND PROVISIONS:
No sinking fund provisions.
FIRST TIME OF DELIVERY:
9:00 a.m., New York City time, August __, 1998
OVER-ALLOTMENT OPTION:
Exercisable for 30 days, for ______________ Income PRIDES
CLOSING LOCATION:
LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
NAMES AND ADDRESSES OF UNDERWRITERS:
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
World Financial Center - North Tower
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ Mass, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
BT Alex. ▇▇▇▇▇ Incorporated
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
CIBC Oppenheimer Corp.
One World Financial Center
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
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ANNEX II
Accountants' Letter
Pursuant to Section 5(j) of the Underwriting Agreement, the
Company's independent certified public accountants shall furnish letters to the
effect that:
(i) they are independent certified public accountants
with respect to the Company and its subsidiaries within the
meaning of the Act and the applicable published rules and
regulations thereunder;
(ii) in their opinion, the financial statements and
any supplementary financial information and schedules (and, if
applicable, prospective financial statements and/or pro forma
financial information) examined by them and included or
incorporated by reference in the Registration Statement or the
Prospectus comply as to form in all material respects with the
applicable accounting requirements of the Act or the Exchange
Act, as applicable, and the related published rules and
regulations thereunder; and, if reasonably requested by the
Representatives (as defined below), they have made a review in
accordance with standards established by the American
Institute of Certified Public Accountants of the consolidated
interim financial statements, selected financial data, pro
forma financial information, prospective financial statements
and/or condensed financial statements derived from audited
financial statements of the Company for the periods specified
in such letter, as indicated in their reports thereon, copies
of which have been furnished to the representatives of the
Underwriters (the "Representatives");
(iii) they have made a review in accordance with
standards established by the American Institute of Certified
Public Accountants of the unaudited condensed consolidated
statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the
Prospectus and/or included in the Company's quarterly reports
on Form 10-Q incorporated by reference into the Prospectus as
indicated in their reports thereon, copies of which have been
separately furnished to the Representatives; and on the basis
of specified procedures including inquiries of officials of
the Company who have responsibility for financial and
accounting matters regarding whether the unaudited condensed
consolidated financial statements referred to in paragraph
(vi)(A)(i) below comply as to form in all material respects
with the applicable accounting requirements of the Act and the
Exchange Act and the related published rules and regulations,
nothing came to their attention that caused them to believe
that the unaudited condensed consolidated financial statements
do not comply as to form in all material respects with the
applicable accounting
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requirements of the Act and the Exchange Act and the related
published rules and regulations;
(iv) the unaudited selected financial information
with respect to the consolidated results of operations and
financial position of the Company for the five most recent
fiscal years included in the Prospectus or incorporated by
reference from Item 6 of the Company's Annual Report on Form
10-K for the most recent fiscal year, agrees with the
corresponding amounts (after restatement where applicable) in
the audited consolidated financial statements for the five
such fiscal years which were included or incorporated by
reference in the Company's Annual Reports on Form 10-K for
such fiscal years;
(v) on the basis of limited procedures, not
constituting an audit in accordance with generally accepted
auditing standards, consisting of a reading of the unaudited
financial statements and other information referred to below,
a reading of the latest available interim financial statements
of the Company and its subsidiaries, inspection of the minute
books of the Company and its subsidiaries since the date of
the latest audited financial statements included or
incorporated by reference in the Prospectus, inquiries of
officials of the Company and its subsidiaries responsible for
financial accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to
their attention that caused them to believe that:
(A) the unaudited condensed consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows included
or incorporated by reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus (if any) do not comply as to form in
all material respects with the applicable accounting requirements of the
Exchange Act as it applies to Form 10-Q and the related published rules and
regulations thereunder, or any material modifications should be made for them to
be in conformity with generally accepted accounting principles applied on a
basis substantially consistent with the basis for the audited consolidated
statements of income, consolidated balance sheets and consolidated statements of
cash flows included or incorporated by reference in the Company's Annual Report
on Form 10-K for the most recent fiscal year;
(B) any other unaudited income statement data and balance
sheet items included in the Prospectus do not agree with the corresponding items
in the unaudited consolidated financial statements from which such data and
items were derived, and any such unaudited data and items were not determined on
a basis substantially consistent with the basis for the corresponding amounts in
the audited consolidated financial statements included or incorporated by
reference in the Company's Annual Report on Form 10-K for the most recent fiscal
year;
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(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited condensed financial
statements referred to in Clause (A) and any unaudited income statement data and
balance sheet items included in the Prospectus and referred to in Clause (B)
were not determined on a basis substantially consistent with the basis for the
audited financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do not comply
as to form in all material respects with the applicable accounting requirements
of the Act and the published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical amounts in the
compilation of those statements;
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the consolidated capital
stock (other than issuances of capital stock upon exercise of options and stock
appreciation rights or pursuant to existing benefit plans and upon conversions
of convertible securities which were outstanding on the date of the latest
balance sheet included or incorporated by reference in the Prospectus) or any
increase in the consolidated short-term borrowings or long-term debt of the
Company and its subsidiaries or any other items specified by the
Representatives, or any decreases in total investments, total assets,
consolidated common shareholders' equity of the Company and its consolidated
subsidiaries or any other items specified by the Representatives, in each case
as compared with amounts shown in the latest balance sheet included or
incorporated by reference in the Prospectus, except in each case for changes,
increases or decreases which the Prospectus discloses have occurred or may occur
or which are described in such letter;
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to the
specified date referred to in Clause (E), there were any decreases in
consolidated net revenues or operating profit or the total or per share amounts
of consolidated net income or other items specified by the Representatives, or
any increases in any items specified by the Representatives, in each case as
compared with the comparable period of the preceding year and with any other
period of corresponding length specified by the Representatives, except in each
case for increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(vi) in addition to the examination referred to in
their report(s) included or incorporated by reference in the
Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in
paragraphs (iii) and (v) above, they have carried out certain
specified procedures, not constituting an audit in accordance
with generally accepted auditing standards, with respect to
certain amounts, percentages and financial information
specified by the Representatives which are derived from the
general accounting records of the
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Company and its subsidiaries, which appear in the Prospectus,
or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Representatives or in
the Company's Annual Report on Form 10-K for the most recent
fiscal year and in the Company's quarterly reports on Form
10-Q incorporated by reference in the Prospectus specified by
the Representatives, and have compared certain of such
amounts, percentages and financial information with the
accounting records of the Company and its subsidiaries and
have found them to be in agreement.
All references in this Annex II to the Prospectus shall be
deemed to refer to the Prospectus (including the documents incorporated by
reference therein) as defined in the Underwriting Agreement as of the date of
the letter delivered on the date of the Pricing Agreement, if so delivered, for
purposes of such letter and to the Prospectus as amended or supplemented
(including the documents incorporated by reference therein) in relation to the
applicable Designated Securities for purposes of the letter delivered at the
Time of Delivery for such Designated Securities.
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