EXHIBIT 1.1
[FORM OF UNDERWRITING AGREEMENT]
$100,000,000
NATIONWIDE FINANCIAL SERVICES, INC.
NATIONWIDE FINANCIAL SERVICES CAPITAL TRUST
___ % CAPITAL SECURITIES
(LIQUID AMOUNT $1,000 PER CAPITAL SECURITY)
UNDERWRITING AGREEMENT
----------------------
March __, 1997
Credit Suisse First Boston Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
As Representatives of the Several Underwriters
c/o Credit Suisse First Boston Corporation,
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇
Dear Sirs:
1. Introductory. Nationwide Financial Services Capital Trust, a
statutory business trust organized under the laws of Delaware ("Trust"), and
Nationwide Financial Services, Inc., a Delaware corporation, as depositor of the
Trust ("Depositor of the Trust") and as Guarantor ("Guarantor"), propose that
the Trust issue and sell $100,000,000 aggregate liquidation amount of the
Trust's ___% Capital Securities (Liquidation Amount, $1,000 per capital
Security) ("Offered Securities") as set forth below, guaranteed on a
subordinated basis by the Guarantor as to the payment of distributions, and as
to payments on liquidation or redemption, to the extent set forth in a guarantee
agreement ("Guarantee") between Guarantor and Wilmington Trust Company, as
trustee ("Guarantee Trustee"). The Trust is to purchase ___% Junior
Subordinated Deferrable Interest Debentures Due 2037 ("Subordinated Debentures")
of the Guarantor to be issued pursuant to an Indenture ("Indenture") between the
Guarantor and Wilmington Trust Company, as trustee ("Debenture Trustee"). The
Trust will purchase these Subordinated Debentures using the proceeds from the
Offered Securities and with an aggregate of up to $______________ from the
proceeds of the issuance and sale of its common securities to the Depositor of
the Trust ("Common Securities"). This Underwriting Agreement, as amended,
supplemented or modified from time to time is referred to herein as "this
Agreement." Credit Suisse First Boston Corporation, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated and ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated are
collectively referred to in this Agreement as the "Representatives."
Each of the Trust and the Guarantor jointly and severally hereby
agrees with the several underwriters named in Schedule A hereto (the
"Underwriters") that:
2. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the several Underwriters that:
(a) A registration statement on Form S-1 (No. 333-18533) relating to
the Offered Securities, including a form of prospectus, has been filed with the
Securities and Exchange Commission ("Commission") and either (i) has been
declared effective under the Securities Act of 1933, as amended ("Act"), and is
not proposed to be amended or (ii) is proposed to be amended by amendment or
post-effective amendment. If such registration statement ("initial registration
statement") has been declared effective, either (i) an additional registration
statement ("additional registration statement") relating to the Offered
Securities may have been filed with the Commission pursuant to Rule 462(b)
("Rule 462(b)") under the Act and, if so filed, has become effective upon filing
pursuant to such Rule and the Offered Securities all have been duly registered
under the Act pursuant to the initial registration statement and, if applicable,
the additional registration statement or (ii) such an additional registration
statement is proposed to be filed with the Commission pursuant to Rule 462(b)
and will become effective upon filing pursuant to such Rule and upon such filing
the Offered Securities will all have been duly registered under the Act pursuant
to the initial registration statement and such additional registration
statement. If neither the Trust nor the Guarantor proposes to amend the initial
registration statement or if an additional registration statement has been filed
and neither the Trust nor the Guarantor proposes to amend it, and if any post-
effective amendment to either such registration statement has been filed with
the Commission prior to the execution and delivery of this Agreement, the most
recent amendment (if any) to each such registration statement has been declared
effective by the Commission or has become effective upon filing pursuant to Rule
462(c) ("Rule 462(c)") under the Act or, in the case of the additional
registration statement, Rule 462(b). For purposes of this Agreement, "Effective
Time" with respect to the initial registration statement or, if filed prior to
the execution and delivery of this Agreement, the additional registration
statement means (i) if each of the Trust and the Guarantor have each advised the
Representatives that it does not propose to amend such registration statement,
the date and time as of which such registration statement, or the most recent
post-effective amendment thereto (if any) filed prior to the execution and
delivery of this Agreement, was declared effective by the Commission or has
become effective upon filing pursuant to Rule 462(c), or (ii) if either the
Trust or the Guarantor has advised the Representatives that it proposes to file
an amendment or post-effective amendment to such registration statement, the
date and time as of which such registration statement, as amended by such
amendment or post-effective amendment, as the case may be, is declared effective
by the Commission. If an additional registration
2
statement has not been filed prior to the execution and delivery of this
Agreement but the Trust or the Guarantor has advised the Representatives that it
proposes to file one, "Effective Time" with respect to such additional
registration statement means the date and time as of which such registration
statement is filed and becomes effective pursuant to Rule 462(b). "Effective
Date" with respect to the initial registration statement or the additional
registration statement (if any) means the date of the Effective Time thereof.
The initial registration statement, as amended at its Effective Time, including
all information contained in the additional registration statement (if any) and
deemed to be part of the initial registration statement as of the Effective Time
of the additional registration statement pursuant to the General Instructions of
the Form on which it is filed and including all information (if any) deemed to
be a part of the initial registration statement as of its Effective Time
pursuant to Rule 430A(b) ("Rule 430A(b)") under the Act, is hereinafter referred
to as the "Initial Registration Statement." The additional registration
statement, as amended at its Effective Time, including the contents of the
initial registration statement incorporated by reference therein and including
all information (if any) deemed to be part of the additional registration
statement as of its Effective Time pursuant to Rule 430A(b), is hereinafter
referred to as the "Additional Registration Statement." The Initial
Registration Statement and the Additional Registration Statement are hereinafter
referred to collectively as the "Registration Statements" and individually as a
"Registration Statement." The form of prospectus relating to the Offered
Securities, as first filed with the Commission pursuant to and in accordance
with Rule 424(b) ("Rule 424(b)") under
the Act or (if no such filing is required) as included in a Registration
Statement is hereinafter referred to as the "Prospectus." No document has been
or will be prepared or distributed in reliance on Rule 434 under the Act.
(b) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement: (i) on the Effective Date
of the Initial Registration Statement, the Initial Registration Statement
conformed in all material respects to the requirements of the Act and the rules
and regulations of the Commission ("Rules and Regulations") and did not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, (ii) on the Effective Date of the Additional Registration Statement
(if any), each Registration Statement conformed, or will conform, in all
material respects to the requirements of the Act and the Rules and Regulations
and did not include, or will not include, any untrue statement of a material
fact and did not omit, or will not omit, to state any material fact required to
be stated therein or necessary to make the statements therein not misleading and
(iii) on the date of this Agreement, the Initial Registration Statement and, if
the Effective Time of the Additional Registration Statement is prior to the
execution and delivery of this Agreement, the Additional Registration Statement
each conforms, and at the time of filing of the Prospectus pursuant to Rule
424(b) or (if no such filing is required) at the Effective Date of the
Additional Registration Statement in which the Prospectus is included, each
Registration Statement and the Prospectus will conform, in all material respects
to the requirements of the Act and the Rules and Regulations,
3
and none of such documents includes, or will include, any untrue statement of a
material fact or omits, or will omit, to state any material fact required to be
stated therein or necessary to make the statements therein not misleading. If
the Effective Time of the Initial Registration Statement is subsequent to the
execution and delivery of this Agreement: on the Effective Date of the Initial
Registration Statement, the Initial Registration Statement and the Prospectus
will conform in all material respects to the requirements of the Act and the
Rules and Regulations, neither of such documents will include any untrue
statement of a material fact or will omit to state any material fact required to
be stated therein or necessary to make the statements therein not misleading,
and no Additional Registration Statement has been or will be filed. The two
preceding sentences do not apply to statements in or omissions from a
Registration Statement or the Prospectus based upon written information
furnished to the Trust or the Guarantor by any Underwriter through the
Representatives specifically for use therein, it being understood and agreed
that the only such information is that described as such in Section 7(b) hereof.
(c) The Guarantor has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Prospectus; and the Guarantor is duly qualified to do business
as a foreign corporation in good standing in all other jurisdictions in which
its ownership or lease of property or the conduct of its business requires such
qualification except to the extent that the failure to so qualify or be in good
standing would not have a material adverse effect (i) on the condition,
financial or otherwise, business, properties or results of operations of the
Company and its subsidiaries taken as a whole, (ii) which affects the issuance
or validity of the Offered Securities or, (iii) which affects the consummation
of any of the transactions contemplated by this Agreement or (iv) is otherwise
material in the context of the sale of the Offered Securities (a "Material
Adverse Effect").
(d) Each subsidiary of the Guarantor has been duly incorporated and
is an existing corporation in good standing 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; and each
subsidiary of the Guarantor is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its ownership
or lease of property or the conduct of its business requires such qualification,
except to the extent that the failure to so qualify would not have a Material
Adverse Effect; all of the issued and outstanding capital stock of each
subsidiary of the Guarantor has been duly authorized and validly issued and is
fully paid and nonassessable and is owned (directly or through subsidiaries) by
the Guarantor; and the capital stock of each subsidiary owned (directly or
through subsidiaries) by the Guarantor is owned free from liens, claims,
encumbrances and defects.
4
(e) The Offered Securities have been duly authorized by the Depositor
of the Trust on behalf of the Trust and, when the Offered Securities have been
delivered and paid for in accordance with this Agreement on the Closing Date (as
defined below), such Offered Securities will have been validly issued, fully
paid and nonassessable beneficial interests in the Trust and will conform to the
description thereof contained in the Prospectus; and, except as set forth in the
Intercompany Agreement (as defined in the Prospectus) the holders of the Offered
Securities of the Trust (the "Securityholders") have no preemptive rights with
respect to the Offered Securities; the Offered Securities will have the rights
set forth in the Trust Agreement (as defined below), and the terms of the
Offered Securities are valid and binding on the Trust; the Securityholders will
be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit under the General Corporation
Law of the State of Delaware.
(f) The Common Securities have been duly authorized by the Depositor
of the Trust and, when the Common Securities have been delivered by the Trust
and paid for by the Guarantor as described in the Prospectus, such Common
Securities will have been validly issued, fully paid and nonassessable and will
conform to the description thereof contained in the Prospectus; and the holders
of the Common Securities of the Trust ("Common Securityholders") have no
preemptive rights with the respect to the Common Securities; and at the Closing
Date, all of the issued and outstanding Common Securities of the Trust will be
directly owned by the Guarantor free and clear of any security interest,
mortgage, pledge or lien, encumbrance, claim or equity.
(g) The Guarantee, the Subordinated Debentures, the Trust Agreement
and the Indenture (the Guarantee, the Subordinated Debentures, the Trust
Agreement and the Indenture being collectively referred to as the "Guarantor
Agreements") have each been duly authorized by the Guarantor and, in the case of
the Guarantee, by the Guarantee Trustee and, in the case of the Trust Agreement,
by the Trustees (as defined below) and, in the case of the Indenture, by the
Debenture Trustee, and, in the case of the Subordinated Debentures, when validly
issued by the Guarantor and validly authenticated and delivered by the Debenture
Trustee such Subordinated Debentures, will be valid and legally binding
obligations of the Guarantor, enforceable in accordance with their respective
terms (except as may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting creditors' rights
generally, except that the remedies of specific performance and injunctive and
other forms of equitable relief are subject to the discretion of the court
before which any proceeding therefor may be brought); the Trust Agreement, the
Indenture and the Guarantee have been duly qualified under the Trust Indenture
Act of 1939, as amended (the "TIA"); the Subordinated Debentures are entitled to
the benefits of the Indenture; and the Guarantor Agreements will conform to the
descriptions thereof in the Prospectus.
5
(h) The Trust has been duly created and is validly existing as a
statutory business trust in good standing under the Business Trust Act of the
State of Delaware ("Delaware Business Trust Act") with the power and authority
to own its property and conduct its business as described in the Prospectus, and
has conducted and will conduct no business other than the transactions
contemplated by this Agreement and as described in the Prospectus; the Trust is
not a party to or bound by any agreement or instrument other than this
Agreement, the trust agreement ("Trust Agreement") between the Guarantor and the
trustees named therein ("Trustees") and the agreements and instruments
contemplated by the Trust Agreement and the Prospectus; the Trust has no
liabilities or obligations other than those arising out of the transactions
contemplated by the Trust Agreement, this Agreement and described in the
Prospectus; and the Trust is not a party to or subject to any action, suit or
proceeding of any nature.
(i) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Trust or the Guarantor and any person
that would give rise to a valid claim against the Trust or the Guarantor or any
Underwriter for a brokerage commission, finder's fee or other like payment in
connection with this offering.
(j) Except as set forth in the Intercompany Agreement, there are no
contracts, agreements or understandings between the Trust or the Guarantor and
any person granting such person the right to require the Trust or the Guarantor
to file a registration statement under the Act with respect to any securities of
the Trust or the Guarantor owned or to be owned by such person or to require the
Trust or the Guarantor to include such securities in the securities registered
pursuant to a Registration Statement or in any securities being registered
pursuant to any other registration statement filed by the Trust or the Guarantor
under the Act.
(k) No consent, approval, or order of, or filing with, any
governmental agency or body or any court is required for the consummation of the
transactions contemplated by this Agreement (which shall include, for all
purposes of this Agreement, the Special Dividend (as defined in the Prospectus)
and the other transactions described in the "Recent History" section of the
Prospectus (collectively, the "Restructuring")) in connection with the issuance
and sale of the Offered Securities by the Guarantor and the Trust, except such
as have been obtained under the insurance laws of the State of Ohio (the "Ohio
Insurance Laws"), the insurance laws of the States of California and Michigan,
the Act, the Rules and Regulations, and the by-laws of the National Association
of Securities Dealers, Inc. ("NASD") and such as may be required under foreign
or state securities laws (including insurance securities laws).
(l) This Agreement has been duly authorized, executed and delivered
by each of the Trust and the Guarantor and constitutes the valid and binding
obligation of each of the Trust and the Guarantor enforceable in accordance with
its
6
terms (except as may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization or similar laws affecting creditors' rights generally
and by general principles of equity, except that the remedies of specific
performance and injunctive and other forms of equitable relief are subject to
the discretion of the court before which any proceeding therefor may be brought
and except with respect to the obligations of the Trust and the Guarantor
regarding indemnification and contribution as provided in Section 7 below).
(m) The execution, delivery and performance of this Agreement, and
the issuance and sale of the Offered Securities and the Common Securities by the
Trust, the purchase of the Subordinated Debentures by the Trust and the
compliance by the Trust with all of the terms and provisions of this Agreement,
will not result in a breach or violation of any of the terms and provisions of,
or constitute a default under, any statute, rule, regulation or order of any
governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Trust or any of its properties, or any agreement or
instrument to which the Trust is a party or by which the Trust is bound or to
which any of the properties of the Trust is subject, or the organizational
documents of the Trust, in each case, except for such breaches, violations or
defaults as would not have a Material Adverse Effect; and the Trust has full
power and authority to authorize, issue and sell the Offered Securities and the
Common Securities, to purchase the Subordinated Debentures and to consummate the
transactions contemplated by this Agreement and the Trust Agreement.
(n) The execution, delivery and performance of this Agreement and the
Guarantor Agreements, the issuance by the Guarantor of the Guarantee and the
Subordinated Debentures, and compliance by the Guarantor with all of the terms
and provisions of this Agreement and the Guarantor Agreements, will not result
in a breach or violation of any of the terms and provisions of, or constitute a
default under, any statute, any rule, regulation or order of any governmental
agency or body or any court, domestic or foreign, having jurisdiction over the
Guarantor or any of its subsidiaries or any of their properties, or any
agreement or instrument to which the Guarantor or any such subsidiary is a party
or by which the Guarantor or any such subsidiary is bound or to which any of the
properties of the Guarantor or any such subsidiary is subject, or the amended
and restated articles of incorporation or the bylaws of the Guarantor or the
articles or amended articles of incorporation and code of regulations or bylaws,
as the case may be, of any such subsidiary, in each case, except for such
breaches, violations or defaults as would not have a Material Adverse Effect;
and the Guarantor has full power and authority to authorize and issue the
Guarantee and the Subordinated Debentures and to consummate the transactions
contemplated by this Agreement and the Guarantor Agreements.
(o) Except as disclosed in the Prospectus, the Trust, the Guarantor
and each of the subsidiaries of the Guarantor have good and marketable title to
all real properties and all other properties and assets owned by them, in each
case free from liens, encumbrances, claims and defects, except where the failure
to possess such title
7
would not have a Material Adverse Effect; and except as disclosed in the
Prospectus, the Trust, the Guarantor and each of the subsidiaries of the
Guarantor hold any leased real or personal property under valid and enforceable
leases, except where the failure to hold such property under such leases would
not have a Material Adverse Effect.
(p) The Guarantor and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, service marks, trade names and other
rights to inventions, know-how, patents, copyrights, confidential information
and other intellectual property (collectively, "intellectual property rights")
necessary to conduct the business now operated by them, or presently employed by
them, except where the failure to own or possess such intellectual property
rights or the inability to acquire such intellectual property rights on
reasonable terms would not have a Material Adverse Effect, and have not received
any notice of infringement of or conflict with asserted rights of others with
respect to any intellectual property rights (including, without limitation, "The
Best of America(R)" service ▇▇▇▇) that, if determined adversely to the Guarantor
or any of its subsidiaries, would individually or in the aggregate have a
Material Adverse Effect. Nationwide Life Insurance Company is the owner, free
and clear of any lien, claim or encumbrance of any kind, of the service ▇▇▇▇
"The Best of America(R)," which is a registered federal service ▇▇▇▇.
(q) The Trust, Guarantor and each of the subsidiaries of the
Guarantor hold all licenses, certificates and permits from governmental
authorities (including, without limitation, insurance licenses from the
Insurance Departments of the various states in which the subsidiaries write
insurance business (the "Insurance Licenses")) which are necessary to the
conduct of their businesses, except where the failure to hold such licenses,
certificates or permits would not have a Material Adverse Effect; the
Guarantor's insurance subsidiaries have fulfilled and performed all obligations
necessary to maintain their respective Insurance Licenses, except where the
failure to perform such obligations would not have a Material Adverse Effect,
and no event or events have occurred which may be reasonably expected to result
in any impairment, modification, termination or revocation of such Insurance
Licenses which individually or in the aggregate would have a Material Adverse
Effect.
(r) Except as disclosed in the Prospectus, neither the Trust, the
Guarantor nor any of the subsidiaries of the Guarantor is in violation of any
statute, rule, regulation, decision or order of any governmental agency or body
or any court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, "environmental laws"), owns or operates any real property
contaminated with any substance that is subject to any environmental laws, is
liable for any off-site disposal or contamination pursuant to any environmental
laws, or is subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect on the Trust, the Guarantor and the
8
subsidiaries of the Guarantor taken as a whole; and to the Trust's or the
Guarantor's knowledge, there is pending investigation which might lead to such a
claim.
(s) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings (including, without limitation, any proceeding to
revoke or deny renewal of any Insurance License) against or affecting the Trust,
the Guarantor, any of the subsidiaries of the Guarantor or any of their
respective properties that, if determined adversely to the Trust or Guarantor or
any of the subsidiaries of the Guarantor, would individually or in the aggregate
have a Material Adverse Effect; and no such actions, suits or proceedings
(including, without limitation, any proceeding to revoke or deny renewal of any
Insurance License) are, to the Trust's or the Guarantor's knowledge, threatened
or contemplated.
(t) The financial statements (other than the notes to the financial
statements) included in each Registration Statement and the Prospectus present
fairly, and the notes to the financial statements included in each Registration
Statement and the Prospectus present fairly in all material respects, the
financial position of the Guarantor and its consolidated subsidiaries as of the
dates shown and their results of operations and cash flows for the periods
shown, and, except as otherwise disclosed in the Prospectus as being prepared in
accordance with the Statutory Accounting Practices (as hereinafter defined),
such financial statements have been prepared in conformity with the generally
accepted accounting principles in the United States applied on a consistent
basis; and the schedules included in each Registration Statement present fairly
in all material respects the information required to be stated therein; and the
assumptions used in preparing the pro forma financial statements included in
each Registration Statement and the Prospectus provide a reasonable basis for
presenting the significant effects directly attributable to the transactions or
events described therein, the related pro forma adjustments give appropriate
effect to those assumptions, and the pro forma columns therein reflect the
proper application of those adjustments in the corresponding historical
financial statement amounts.
(u) Except as disclosed in the Prospectus, since the date of the
latest audited financial statements included in the Prospectus there has been no
change, nor any development or event involving a prospective change, which has
had, or would be reasonably be expected to have, a Material Adverse Effect, and,
except as disclosed in or contemplated by the Prospectus, there has been no
dividend or distribution of any kind declared, paid or made by the Trust or the
Guarantor on any class of its capital stock.
(v) Neither the Trust nor the Guarantor is, and after giving effect
to the sale of the Offered Securities and the application of the proceeds
thereof as described in the Prospectus, will not be, an "investment company" or
an entity "controlled" by an "investment company" required to be registered
under the Investment Company Act of 1940, as amended (the "1940 Act").
9
(w) Neither the Trust, the Guarantor nor any of their respective
affiliates does business with the government of Cuba or with any person or
affiliate located in Cuba within the meaning of Section 517.075, Florida
Statutes.
(x) The statutory financial statements of each of the Guarantor's
insurance subsidiaries, from which certain ratios and other statistical data
contained in the Registration Statement have been derived, have for each
relevant period been prepared in accordance with accounting practices and
procedures of the National Association of Insurance Commissioners ("NAIC"), as
prescribed or permitted by the Department of Insurance of the State of Ohio (the
"Statutory Accounting Practices"); and such accounting practices have been
applied on a consistent basis throughout the periods involved, except as
disclosed therein.
(y) The Company has filed an application to list the Offered
Securities on the New York Stock Exchange ("NYSE") and has received notification
that such listing has been approved subject to notice of issuance. The Offered
Securities will be registered under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), prior to or concurrently with the effectiveness of
the Registration Statement.
(z) All reserves and other liabilities reflected in lines 1, 2, 3,
4.1, 4.2, 5 and 7.1 of page 3 of the statutory annual statements of each of the
Guarantor's insurance subsidiaries, filed with or submitted to the Department of
Insurance of the State of Ohio, and any other state department of insurance or
similar regulatory authority for the year ended December 31, 1996 (the "Reserve
Liabilities");
(i) Are computed in all material respects in accordance with
actuarial standards which have been adopted by the Actuarial
Standards Board, consistently applied and are fairly stated,
in accordance with sound actuarial principles;
(ii) Are based in all material respects on actuarial assumptions
which produce reserves at least as great as those called for
in any contract provision as to reserve basis and method,
and are in accordance with all other contract provisions;
(iii) Meet all material requirements of the insurance laws and
duly adopted regulations, in effect at the valuation date,
of the State of Ohio and are at least as great as the
minimum aggregate amounts required by the insurance laws and
duly adopted regulations, in effect at the valuation date,
of the state of Ohio and any other states in which the
Guarantor's insurance subsidiaries file an actuarial
opinion;
10
(iv) Are computed on the basis of assumptions consistent with
those used in computing the corresponding items in the
annual statement of the preceding year end (except as noted
in the supporting memorandum); and
(v) Include provisions for all actuarial reserves and related
annual statement items which are required under Ohio
Insurance Laws to be established.
Adequate provision for all such Reserve Liabilities has been made in accordance
with Ohio Insurance Laws to cover the total amount of all reasonably anticipated
matured and unmatured benefits, claims and other liabilities of the Guarantor's
insurance subsidiaries under all insurance policies and annuity contracts under
which the Guarantor's insurance subsidiaries had any liability (including,
without limitation, any liability arising under or as a result of any
reinsurance, coinsurance or other similar agreement) on the Closing Date.
(aa) Each of the Guarantor's insurance subsidiaries has duly and
validly filed or caused to be filed all material reports, statements, documents,
registrations, filings or submissions that were required by applicable Laws (as
defined below) to be filed; all such filings complied with all applicable Laws
in all material respects when filed, and no material deficiencies have been
asserted with respect to any such filings which have not been satisfied. All
outstanding insurance policies, annuity contracts and assumption certificates
issued by any of the Guarantor's insurance subsidiaries and now in force are, to
the extent required under applicable Laws, on forms approved by the insurance
regulatory authority of the jurisdiction where issued and utilize premium rates
which if required to be filed with or approved by insurance regulatory
authorities have been so filed or approved, except where the failure to use
approved forms or to file or have approved such premium rates would not have a
Material Adverse Effect, and the premiums charged conform thereto, except where
the failure to conform would not have a Material Adverse Effect.
(ab) Each of the Guarantor's broker/dealer subsidiaries, where
applicable, is registered with the Commission and with each other governmental
authority with which it is required to register in order to conduct its business
as now conducted, and is in compliance in all material respects with all
applicable United States federal, state, local or foreign statutes, laws,
ordinances, regulations, rules, codes, orders, permits, other requirements or
rules of law (collectively, the "Laws"), except where the failure to comply
would not have a Material Adverse Effect. The Guarantor's insurance and
broker/dealer subsidiaries have filed all forms, reports, statements and other
documents required by Law to be filed by them with the Commission, all other
reports (periodic or otherwise) and registration statements, including, without
limitation, in connection with sales of variable annuity or variable life
contracts, and all amendments and supplements to all such reports and
registration statements, and all such forms, reports, statements and other
documents, did not at
11
the time they were filed (at the time they became effective and so long as they
remain effective in the case of registration statements and amendments thereto)
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
(ac) Each of the separate accounts of the Guarantor's insurance
subsidiaries that is required to be registered as an investment company under
the 1940 Act is so registered. All forms, reports, statements and other
documents required by Law to be filed with the Commission by or on behalf of
each of the separate accounts of the Guarantor's insurance subsidiaries,
including, without limitation, all registration statements and all amendments
and supplements to all such registration statements, in connection with sales of
variable life insurance policies and variable annuity contracts, have been so
filed by or on behalf of such separate accounts, and all such forms, reports,
statements and other documents, including, without limitation, those to be filed
after the date hereof, did not at the time they were filed (at the time they
become effective and so long as they remain effective in the case of
registration statements and amendments thereto), or will not at the time they
are filed (at the time they become effective and so long as they remain
effective in the case of registration statements and amendments thereto),
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statement
therein, in the light of the circumstances under which they were made, not
misleading.
(ad) Except as set forth in the Prospectus, neither the Guarantor nor
any of the Guarantor's insurance subsidiaries is a party to any contract with or
other undertaking to, or is subject to any governmental order by, or is a
recipient of any presently applicable supervisory letter or other written
communication of any kind from, any governmental authority which (i) has had a
Material Adverse Effect, (ii) relates materially and adversely to its reserve
adequacy, or its investment or underwriting practices or policies or its sales
practices or policies, or (iii) would reasonably be expected to have a Material
Adverse Effect, nor has the Guarantor or any of the Guarantor's insurance
subsidiaries been notified by any governmental authority that it is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such governmental order, contract, undertaking,
letter or other written communication.
(ae) Except as set forth in the Prospectus, and with respect to all
insurance issued:
(i) No outstanding insurance policy or annuity contract issued or
assumed by any of the Guarantor's insurance subsidiaries entitles the
holder thereof or any other Person (as defined below) to receive dividends,
distributions or other benefits based on the revenues or earnings of the
Guarantor or the Guarantor's insurance subsidiaries or any other
individual,
12
partnership, firm, corporation, association, trust, unincorporated
organization, governmental authority or other entity, as well as any
syndicate or group that would be deemed to be a person under Section
13(d)(3) of the Exchange Act (each, a "Person").
(ii) To the Guarantor's knowledge and the Guarantor's insurance
subsidiaries knowledge, no other party to any reinsurance, coinsurance or
other similar agreement with any of the Guarantor's insurance subsidiaries
is in default thereunder, except for such defaults that would not
reasonably be expected to have a Material Adverse Effect.
(iii) Except as set forth in the Prospectus, all advertising,
promotional and sales materials and other marketing practices used by the
Guarantor and/or the Guarantor's insurance subsidiaries, or, to the
Guarantor's knowledge, any agent of the Guarantor or the Guarantor's
insurance subsidiaries, have complied and are currently in compliance
with applicable Laws, except where the failure to comply or be in
compliance would not have a Material Adverse Effect.
(iv) Each annuity contract issued by any of the Guarantor's
insurance subsidiaries qualifies as an annuity contract under Section 72 of
the Internal Revenue Code of 1986, as amended through the date hereof,
except where the failure to so qualify would not have a Material Adverse
Effect.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Trust and the Guarantor agree that
the Trust shall sell to the Underwriters, and the Underwriters agree, severally
and not jointly, to purchase from the Trust, at a purchase price of $_____ per
share plus accumulated distributions from ____________, if any, on the Closing
Date (as hereinafter defined), the respective number of shares of Offered
Securities set forth opposite the names of the Underwriters in Schedule A
hereto.
The Trust will deliver the Offered Securities to the Representatives for
the accounts of the Underwriters, against payment of the purchase price in funds
available on the same day by wire transfer to the account of the Guarantor at a
bank acceptable to Credit Suisse First Boston Corporation ("CSFBC") or by
official Federal Reserve Bank check or checks drawn to the order of the Trust at
the office of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, 1301 Avenue of the Americas, at 10 A.M., New
York time, on _________, 1997 or at such other time not later than seven full
business days thereafter as CSFBC and the Trust and the Guarantor determine,
such time being herein referred to as the "Closing Date." For purposes of Rule
15c6-1 under the Exchange Act, the Closing Date (if later than the otherwise
applicable settlement date) shall be the settlement date for payment of funds
and delivery of securities for all the Offered Securities sold pursuant to the
offering. The certificates for the Offered Securities so to be delivered will
be in definitive form, in such denominations and
13
registered in such names as CSFBC requests and will be made available for
checking and packaging at the office of CSFBC at least 24 hours prior to the
Closing Date.
As compensation for the Underwriters' commitments, and in view of the
fact that the proceeds of the sale of the Offered Securities will be used by the
Trust to purchase the Subordinated Debentures of the Guarantor, the Guarantor
will pay CSFBC for the Underwriters' proportionate accounts the sum of
$_________ per security times the total number of Offered Securities purchased
by the Underwriters on the Closing Date. Such payment will be made on the
Closing Date with respect to the Offered Securities purchased on such Closing
Date.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Offered Securities for sale to the public as
set forth in the Prospectus.
5. Certain Agreements of the Trust and the Guarantor. Each of the Trust
and the Guarantor agrees with the several Underwriters that:
(a) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Trust and the
Guarantor will file the Prospectus with the Commission pursuant to and in
accordance with subparagraph (1) (or, if applicable and if consented to by CSFBC
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the second
business day following the execution and delivery of this Agreement or (B) the
fifteenth business day after the Effective Date of the Initial Registration
Statement.
The Trust and the Guarantor will advise CSFBC promptly of any such filing
pursuant to Rule 424(b). If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement and an
additional registration statement is necessary to register a portion of the
Offered Securities under the Act but the Effective Time thereof has not occurred
as of such execution and delivery, the Trust and the Guarantor will file the
additional registration statement or, if filed, will file a post-effective
amendment thereto with the Commission pursuant to and in accordance with Rule
462(b) on or prior to 10:00 P.M., New York time, on the date of this Agreement
or, if earlier, on or prior to the time the Prospectus is printed and
distributed to any Underwriter, or will make such filing at such later date as
shall have been consented to by CSFBC.
(b) Each of the Trust and the Guarantor will advise CSFBC promptly of
any proposal to amend or supplement the initial or any additional registration
statement as filed or the related prospectus or the Initial Registration
Statement, the Additional Registration Statement (if any) or the Prospectus and
will not effect such amendment or supplementation without CSFBC's consent; and
each of the Trust and the Guarantor will also advise CSFBC promptly of the
effectiveness of each Registration Statement (if its Effective Time is
subsequent to the execution and
14
delivery of this Agreement) and of any amendment or supplementation of a
Registration Statement or the Prospectus and of the institution by the
Commission of any stop order proceedings in respect of a Registration Statement
and will use its best efforts to prevent the issuance of any such stop order and
to obtain as soon as possible its lifting, if issued.
(c) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with the
sales by any Underwriter or dealer, any event occurs 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 to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any time to amend the Prospectus
to comply with the Act, the Trust and the Guarantor will promptly notify CSFBC
of such event and will promptly prepare and file with the Commission, at its own
expense, an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance with the Act.
Neither CSFBC's consent to, nor the Underwriters' delivery of, any such
amendment or supplement shall constitute a waiver of any of the conditions set
forth in Section 6.
(d) As soon as practicable, but not later than the Availability Date
(as defined below), the Guarantor will make generally available to its
securityholders an earnings statement covering a period of at least 12 months
beginning after the Effective Date of the Initial Registration Statement (or, if
later, the Effective Date of the Additional Registration Statement) which will
satisfy the provisions of Section 11(a) of the Act. For the purpose of the
preceding sentence, "Availability Date" means the 45th day after the end of the
fourth fiscal quarter following the fiscal quarter that includes such Effective
Date, except that, if such fourth fiscal quarter is the last quarter of the
Company's fiscal year, "Availability Date" means the 90th day after the end of
such fourth fiscal quarter.
(e) The Trust and the Guarantor will furnish to the Representatives
hard copies of each Registration Statement (four of which will be signed and
will include all exhibits), copies of each ▇▇▇▇▇ filing of each Registration
Statement (and confirmations for each ▇▇▇▇▇ filing of each Registration
Statement), each preliminary prospectus relating to the Offered Securities, and,
so long as delivery of a prospectus relating to the Offered Securities is
required to be delivered under the Act in connection with sales by any
Underwriter or dealer, the Prospectus and all amendments and supplements to such
documents in each case in such quantities as CSFBC requests. The Prospectus
shall be so furnished on or prior to 3:00 p.m., New York time, the business day
following the later of the execution and delivery of this Agreement or the
Effective Time of the Initial Registration Statement. All other documents shall
be so furnished as soon as available. The Guarantor will pay the expenses of
printing and distributing to the Underwriters all such documents.
15
(f) The Trust will use its best efforts, in cooperation with the
Underwriters, to arrange for the qualification of the Offered Securities for
sale and the determination of their eligibility for investment under the laws of
such jurisdiction as CSFBC designates and will continue such qualifications in
effect so long as required for the distribution; provided, however, that the
-------- -------
Trust shall not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise so
subject.
(g) During the period of three years hereafter, the Guarantor will
furnish to the Representatives, and, upon request, to each of the other
Underwriters, (i) as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year, (ii) as soon as
available, a copy of each report and any definitive proxy statement of the
Guarantor filed with the Commission under the Exchange Act or mailed to
stockholders, and (iii) from time to time, such other information as shall be
furnished by the Guarantor to its stockholders generally and as shall be
reasonably requested by CSFBC.
(h) The Guarantor will pay all expenses incident to the performance
of its and the Trust's obligations under this Agreement for any filing fees and
other reasonable expenses (including reasonable fees and disbursements of
counsel) incurred by them in connection with qualification of the Offered
Securities for sale under the laws of such jurisdictions as CSFBC designates and
the printing of memoranda relating thereto, for the filing fee incident to, and
the reasonable fees and disbursements of counsel to the Underwriters in
connection with, the review by the NASD of the Offered Securities and approval
of the transactions contemplated hereby by the NASD, for all reasonable costs
and expenses of the Underwriters for any travel expenses of the Trust's Trustees
and the Guarantor's officers and employees and any other expenses of the Trust
or the Guarantor in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities and for expenses incurred in
distributing preliminary prospectuses and the Prospectus (including any
amendments and supplements thereto) to the Underwriters.
(i) The Trust and the Guarantor will notify CSFBC of any material
adverse change affecting any of its representations, warranties, agreements and
indemnities herein at any time prior to payment to the Trust on the Closing
Date.
(j) The Guarantor will issue the Guarantee concurrently with the
issue and sale of the Offered Securities as contemplated herein.
(k) The Trust will use the proceeds received by it from the sale of
the Offered Securities, and the Guarantor will use the net proceeds received by
it from the sale of the Subordinated Debentures in the manner specified in the
Prospectus under the caption "Use of Proceeds."
16
(l) The Trust and the Guarantor will use their best efforts to list
the Offered Securities on the NYSE subject to notice of issuance and to register
the Offered Securities under the Exchange Act in accordance with the Rules and
Regulations.
(m) For a period of 90 days after the date of the initial public
offering of the Offered Securities, neither the Trust nor the Guarantor will
offer, sell, contract to sell, pledge or otherwise dispose of directly or
indirectly, or file with the Commission a registration statement under the Act
relating to, any additional units of Offered Securities or securities
convertible into or exchangeable or exercisable for Offered Securities or the
Subordinated Debentures or any debt securities substantially similar to the
Subordinated Debentures or any equity securities substantially similar to the
Offered Securities (except for the Subordinated Debentures and the Offered
Securities offered thereby), other than grants of options or shares pursuant to
the Company's 1996 Long-Term Equity Compensation Plan.
(n) The Guarantor will cause each of its directors and certain
executive officers listed on Schedule B hereto to agree that after the date of
----------
the initial public offering of the Offered Securities for a period of 90 days,
such directors and executive officers will not offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, or file with the
Commission a registration statement under the Act relating to, any additional
units of Offered Securities or securities convertible into or exchangeable or
exercisable for Offered Securities or the Subordinated Debentures or any equity
securities substantially similar to the Offered Securities (except for the
Subordinated Debentures and the Offered Securities offered thereby), or publicly
disclose of its intention to make any such offer, sale, pledge, disposal or
filing, without CSFBC's written permission, except that such officers and
directors may sell or otherwise dispose of Securities to members of their
respective families; provided, however, that such member(s) shall first agree to
-------- -------
be bound by the terms of this paragraph (n).
(o) The Trust shall comply with Section 517.075, Florida Statutes, if
prior to the completion of the Offered Securities it or any of its affiliates
commences doing business with the government of Cuba with any person or
affiliate located in Cuba within the meaning of such Section 517.075, Florida
Statutes.
6. Conditions of the Obligations of the Underwriters. The obligations of
the several Underwriters to purchase and pay for the Offered Securities on the
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Trust and the Guarantor herein, to the accuracy of
the statements of the Trust's Trustees and the Guarantor's officers made
pursuant to the provisions hereof, to the performance by the Trust or the
Guarantor of its obligations hereunder and to the following additional
conditions precedent:
17
(a) The Representatives shall have received a letter, dated the date
of delivery thereof (which, if the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, shall be on
or prior to the date of this Agreement or, if the Effective Time of the Initial
Registration Statement is subsequent to the execution and delivery of this
Agreement, shall be prior to the filing of the amendment or post-effective
amendment to the registration statement to be filed shortly prior to such
Effective Time), of KPMG Peat Marwick LLP confirming that they are independent
public accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating to the effect that:
(i) in their opinion the financial statements and schedules
audited by them and included in the Registration Statements comply as
to form in all material respects with the applicable accounting
requirements of the Act and the related published Rules and
Regulations;
(ii) on the basis of a reading of the latest available
interim financial statements of the Trust and the Guarantor, inquiries
of officials of the Trust and the Guarantor who have responsibility
for financial and accounting matters and other specified procedures,
nothing came to their attention that caused them to believe that:
(A) at the date of the latest available balance sheet read
by such accountants, or at a subsequent specified date not more
than three business days prior to the date of this Agreement,
there was any change in the capital stock or, at the date of the
latest available balance sheet read by such accountants, there
was any increase in short-term indebtedness or long-term debt of
the Trust or the Guarantor and its consolidated subsidiaries, or,
at the date of the latest available balance sheet read by such
accountants, there was any decrease in total assets or
stockholders' equity as compared with amounts shown on the latest
balance sheet included in the Prospectus; or
(B) for the period from the closing date of the latest
income statement included in the Prospectus to the closing date
of the latest available income statement read by such accountants
there were any decreases, as compared with the corresponding
period for the previous year and with the period of corresponding
length ended the date of the latest income statement included in
the Prospectus, in the total or per share amounts of total
revenues or net income;
18
except in all cases set forth in clauses (A) and (B) above for
changes, increases or decreases which the Prospectus discloses have
occurred or may occur or which are described in such letter; and
(iii) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Registration Statements (in each case to
the extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of the
Guarantor and its subsidiaries subject to the internal controls of the
Guarantor's accounting system or are derived directly from such
records by analysis or computation) with the results obtained from
inquiries, a reading of such general accounting records and other
procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in
agreement with such results, except as otherwise specified in such
letter; and
(iv) they have examined the statutory financial statements
of the Guarantor's insurance subsidiaries, from which certain ratios
and other statistical data contained in the Registration Statement
have been derived, and in their opinion such statements, with respect
to each such insurance subsidiary, have for each relevant period been
prepared in accordance with accounting practices prescribed or
permitted by the appropriate Insurance Department of the state of
domicile of such subsidiary, except as disclosed therein;
(vi) with respect to the pro forma financial information
included in the Registration Statement, they have performed the
procedures specified by the American Institute of Certified Public
Accountants Statement on Standards for Attestation Engagements No. 1,
"Reporting on Pro Forma Financial Statements"; and
(vii) on the basis of the procedures referred to in clause
(vi) above, inquiries of officials of the Trust and the Guarantor who
have responsibility for financial and accounting matters and other
specified procedures, nothing came to their attention that caused them
to believe that the pro forma financial information and statements
included in the Registration Statements do not comply as to form in
all material respects with the applicable accounting requirements of
the Act and the related published Rules and Regulations or any
material modifications should be made to such pro forma financial
information and statements for them to be in accordance with such
requirements and generally accepted accounting principles.
19
For purposes of this subsection, (i) if the Effective Time of the
Initial Registration Statement is subsequent to the execution and delivery of
this Agreement, "Registration Statements" shall mean the initial registration
statement as proposed to be amended by the amendment or post-effective amendment
to be filed shortly prior to its Effective Time, (ii) if the Effective Time of
the Initial Registration Statement is prior to the execution and delivery of
this Agreement but the Effective Time of the Additional Registration Statement
is subsequent to such execution and delivery, "Registration Statements" shall
mean the Initial Registration Statement and the additional registration
statement as proposed to be filed or as proposed to be amended by the post-
effective amendment to be filed shortly prior to its Effective Time, and (iii)
"Prospectus" shall mean the prospectus included in the Registration Statements.
(b) If the Effective Time of the Initial Registration Statement is
not prior to the execution and delivery of this Agreement, such Effective Time
shall have occurred not later than 10:00 P.M., New York time, on the date of
this Agreement or such later date as shall have been consented to by CSFBC. If
the Effective Time of the Additional Registration Statement (if any) is not
prior to the execution and delivery of this Agreement, such Effective Time shall
have occurred not later than 10:00 P.M., New York time, on the date of this
Agreement or, if earlier, at the time the Prospectus is printed and distributed
to any Underwriter, or shall have occurred at such later date as shall have been
consented to by CSFBC. If the Effective Time of the Initial Registration
Statement is prior to the execution and delivery of this Agreement, the
Prospectus shall have been filed with the Commission in accordance with the
Rules and Regulations and Section 5(a) of this Agreement. Prior to such Closing
Date, no stop order suspending the effectiveness of a Registration Statement
shall have been issued and no proceedings for that purpose shall have been
instituted or, to the knowledge of the Company or the Representatives, shall be
contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event involving a
prospective change, in the conditions (financial or other), business, properties
or results of operations of the Trust or the Guarantor or the subsidiaries of
the Guarantor which, in the reasonable judgment of a majority in interest of the
Underwriters including the Representatives, is material and adverse and makes it
impractical or inadvisable to proceed with the completion of the public offering
or sale of and payment for the Offered Securities; (ii) any downgrading in the
rating of any debt securities or preferred securities (including preferred trust
securities of any trust affiliated with the Guarantor) of the Trust or the
Guarantor by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Act), or any public announcement
that any such organization has under surveillance or review its rating of any
debt securities or preferred securities (including preferred trust securities of
any trust affiliated with the Guarantor) of the Trust or the Guarantor (other
than an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating) or
20
any downgrading of the financial and operating performance of the Guarantor's
insurance subsidiaries by A.M. Best Company that results in the Guarantor's
insurance subsidiaries being rated lower than A- (Excellent); (iii) any
suspension or limitation of trading in securities generally on the NYSE, or any
setting of minimum prices for trading on such exchange or system, or any
suspension of trading of any securities of the Trust or the Guarantor on any
exchange or in the over-the-counter market; (iv) any banking moratorium declared
by U.S. Federal or New York authorities; or (v) any outbreak or escalation of
major hostilities in which the United States is involved, any declaration of war
by Congress or any other substantial national or international calamity or
emergency if, in the judgment of a majority in interest of the Underwriters
including the Representatives, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and payment for
the Offered Securities.
(d) The Representatives shall have received an opinion, dated such
Closing Date, of LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., special counsel for the
Trust and the Guarantor to the effect that:
(i) Each of the Guarantor is an existing corporation in good
standing under the laws of the state of its incorporation, with power
and authority (corporate and otherwise) to own its properties and
conduct its business as described in the Prospectus; the Guarantor is
duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification,
except to the extent that the failure to so qualify would not have a
Material Adverse Effect;
(ii) The Offered Securities delivered on such Closing Date
have been duly authorized by the Depositor of the Trust on behalf of
the Trust, and, with respect to the Offered Securities, when issued
and delivered to, and paid for by the Underwriters in accordance with
the terms of this Agreement, will be validly issued, fully paid and
nonassessable beneficial interests in the Trust; the description of
the Offered Securities contained in the Prospectus fairly and
accurately sets forth the material terms of such stock; the Offered
Securities are entitled to the benefits provided by the Trust
Agreement; and the securityholders of the Guarantor have no preemptive
rights with respect to the Offered Securities except as provided in
the Intercompany Agreements;
(iii) No consent, approval, authorization or order of, or
filing with, any governmental agency or body, or any court is required
for the consummation by the Guarantor of the transactions contemplated
21
by this Agreement in connection with the issuance or sale of the
Offered Securities by the Trust, except such as have been obtained and
made under the General Corporation Law of the State of Delaware, the
Ohio Insurance Laws, the insurance laws of the States of California
and Michigan, the Act, the Rule and Regulations, the bylaws of the
NASD, the TIA and such as may be required under foreign securities
laws or state securities laws (including insurance securities laws);
(iv) The execution, delivery and performance of this
Agreement and the issuance and sale Offered Securities and the Common
Securities by the Trust, and the purchase of the Subordinated
Debentures by the Trust and the compliance by the Trust with all of
the terms and provisions of this Agreement, will not result in a
breach or violation of any of the terms or provisions of, or
constitute a default under the organizational documents of the Trust;
and the Trust has full power and authority (corporate and otherwise)
to authorize, issue and sell the Offered Securities and the Common
Securities, to purchase the Subordinated Debentures and to consummate
the transactions contemplated by this Agreement and the Trust
Agreement;
(v) The Initial Registration Statement was declared
effective under the Act as of the date and time specified in such
opinion, the Additional Registration Statement (if any) was filed and
became effective under the Act as of the date and time (if
determinable) specified in such opinion, the Prospectus was filed with
the Commission pursuant to the subparagraph of Rule 424(b) specified
in such opinion on the date specified therein or was included in the
Initial Registration Statement or the Additional Registration
Statement (as the case may be), and, to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement or any other part thereof has been issued and
no proceedings for that purpose have been instituted or are pending or
contemplated under the Act, and each Registration Statement and the
Prospectus, and each amendment or supplement thereto, as of their
respective effective or issue dates, complied as to form in all
material respects with the requirements of the Act and the Rules and
Regulations; the descriptions in the "Business--Regulation,"
"Management's Discussion and Analysis of Financial Condition and
Results of Operations-Liquidity and Capital Resources" and "Business--
Legal Proceedings" in the Registration Statement and Prospectus of
statutes, legal and governmental proceedings and contracts and other
documents are accurate and fairly present the information required to
be shown; and such counsel does not know of any legal or governmental
proceedings required to be described in a Registration Statement or
the Prospectus which are not described as required or any contracts or
documents of a character
22
required to be described in a Registration Statement or the Prospectus
or to be filed as exhibits to a Registration Statement which are not
described and filed as required; it being understood that such counsel
need express no opinion as to the financial statements or schedules or
other financial and statistical data contained in the Registration
Statement or the Prospectus;]
(vi) This Agreement and the Guarantor Agreements have been
duly authorized, executed and delivered by the Guarantor and
constitute the valid and binding obligations of the Guarantor
enforceable in accordance with their respective terms (except as may
be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting creditors' rights generally,
except that the remedies of specific performance and injunctive and
other forms of equitable relief are subject to certain equitable
defenses and the discretion of the court before which any proceeding
therefor may be brought, and except that no opinion need be expressed
with respect to the obligations of the Guarantor regarding
indemnification and contribution as provided in Section 7 below); the
Trust Agreement, the Indenture and the Guarantee have been duly
qualified under the TIA; the Subordinated Debentures are entitled to
the benefits under the Indenture, and the Guarantor Agreements conform
to the description in the Prospectus;
(vii) The execution, delivery and performance by the
Guarantor of this Agreement and the Guarantor Agreements, the issuance
by the Guarantor of the Guarantee and the Subordinated Debentures and
the compliance by the Guarantor with all of the provisions of this
Agreement and the Guarantor Agreements will not result in a breach or
violation of any of any of the terms and provisions of, or constitute
a default under the amended and restated articles of incorporation or
bylaws of the Guarantor or any such subsidiary; and the Guarantor has
full power and authority to issue the Guarantee and the Subordinated
Debentures and to consummate the transactions contemplated by this
Agreement and the Guarantor Agreements;
(viii) The issue and sale by the Trust of the Securities
being delivered on the Closing Date, the compliance by the Trust with
all the provisions of this Agreement, the purchase by the Trust of the
Subordinated Debentures and the consummation of the transactions
contemplated by this Agreement and in the Trust Agreement will not
conflict with or result in the breach of any of the terms or
provisions of, or constitute a default under, any agreement or
instrument known to such counsel to which the Trust is a party or by
which the Trust is bound or to which any of the property or assets of
the Trust is subject;
23
(ix) The statements in the Prospectus under the captions "Description
of Capital Securities," "Description of the Guarantee," "Description
of the Junior Subordinated Debentures" and "Effect of Obligations
under the Junior Subordinated Debentures and the Guarantee" insofar as
they purport to constitute a summary of the terms of the securities
therein described, and under the caption "Underwriting" (other than
statements based on information furnished by an Underwriter expressly
for use or incorporation by reference therein); insofar as they
purport to constitute summaries of the terms of the documents referred
to therein, and the statements in the Prospectus under "Business--
Regulation," "Management's Discussion and Analysis of Financial
Conditions and Results of Financial Information--Liquidity and Capital
Resources," and "Business--Legal Proceedings" insofar as they purport
to constitute descriptions of laws, rules, regulations or NAIC model
laws, fairly summarize the terms of such documents or fairly and
accurately present the information disclosed therein in all material
respects;
(x) All statements contained in the Registration Statement
under the heading "Certain Federal Income Tax Consequences" are true
and correct in all material respects;
(xi) Neither the Trust nor the Guarantor is, and after
giving effect to the offering and sale of the Offered Securities and
the application of the proceeds thereof as described in the
Prospectus, will not be an "investment company" or an entity
"controlled" by an "investment company" as defined under the
Investment Company Act of 1940; and
(xii) The Guarantor has filed an application to list the
Offered Securities on the NYSE, and has received notification that
such listing has been approved subject to notice of issuance and the
Offered Securities have been registered under the Exchange Act.
Such counsel also shall state that no facts have come to the attention
of such counsel that have caused it to believe that (except for financial
statements and schedules and other financial and statistical data, as aforesaid)
the Registration Statement and the Prospectus, at the time the Registration
Statement became effective, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements therein not misleading, or that the Prospectus, as amended
or supplemented, if applicable (except for financial statements and schedules
and other financial and statistical data, as aforesaid), contain, at the time
distributed, any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
24
In making the statement referred to in the preceding paragraph, such
counsel shall state that their opinion and belief are based upon their
participation in the preparation of the Registration Statement and the
Prospectus and any amendments or supplements thereto and review and discussion
of the contents thereof, but are without independent check or verification
except as specified.
In rendering the foregoing opinions, such counsel may rely as to matters of
fact upon certificates of the Trust's Trustees and officers of the Guarantor and
its subsidiaries, as to matters involving good standing, authorization to do
business and other matters within their knowledge, upon certificates of public
officials, and, as to matters involving the application of laws of any
jurisdiction other than the State of New York or the United States, upon
opinions of local counsel which opinions shall state that they believe both you
and they are justified in relying upon such certificates and opinions.
(e) The Representatives shall have received an opinion, dated such
Closing Date, from W. ▇▇▇▇▇▇ ▇▇▇▇▇, general counsel to the Guarantor and the
Trust to the effect that:
(i) Each of the Guarantor's subsidiaries is an existing
corporation in good standing under the laws of the state of its
incorporation, with power and authority (corporate and otherwise) to
own its properties and conducts its business as described in the
Prospectus; each of the Guarantor and it's subsidiaries has been duly
incorporated and each of the Guarantor's subsidiaries is an existing
corporation in good standing under the laws of the state of its
incorporation, with power and authority (corporate and otherwise) to
own its properties and conduct its business as described in the
Prospectus; and each of the Guarantor's subsidiaries is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification, except to the
extent that the failure to so qualify would not have a Material
Adverse Effect; all of the issued and outstanding capital stock of
each subsidiary of the Guarantor has been duly authorized and validly
issued, and is fully paid and nonassessable and is owned (directly or
through subsidiaries) by the Guarantor; and all of the capital stock
of the subsidiaries is owned (directly or through subsidiaries) by the
Guarantor; and the capital stock of each subsidiary owned (directly or
through subsidiaries) by the Guarantor is owned free from liens,
claims, encumbrances and defects;
(ii) Except for the Intercompany Agreement, there are no
contracts, agreements or understandings between the Trust or the
Guarantor and any person granting such person the right to require the
Trust or the Guarantor to file a registration statement under the Act
25
with respect to any securities of the Trust or the Guarantor owned or
to be owned by such person or to require the Trust or the Guarantor to
include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant
to any other registration statement filed by the Trust or the
Guarantor under the Act;
(iii) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required
for the consummation by the Guarantor of the transactions contemplated
by this Agreement in connection with the issuance or sale of the
Offered Securities by the Trust, except such as have been obtained and
made under the General Corporation Law of Delaware, the Ohio Insurance
Laws, the insurance laws of the States of California and Michigan, the
Act, the Rules and Regulations, the bylaws of the NASD and such as may
be required under foreign securities laws or state securities laws
(including insurance securities laws);
(iv) The execution, delivery and performance of this
Agreement and the issuance and sale of the Offered Securities and the
Common Securities by the Trust, and the purchase of the Subordinated
Debentures by the Trust and the compliance by the Trust with all of
the terms and provisions of this Agreement, will not result in a
breach or violation of any of any of the terms and provisions of, or
constitute a default under, any statute, any rule, regulation or order
of any governmental agency or body or any court having jurisdiction
over the Trust or any of its properties, or any agreement or
instrument to which the Trust is a party or by which the Trust is
bound or to which any of the properties of the Trust is subject;
(v) The execution, delivery and performance by the Guarantor
of this Agreement and the Guarantor Agreements, the issuance by the
Guarantor of the Guarantee and the Subordinated Debentures and the
compliance by the Guarantor with all of the provisions of this
Agreement and the Guarantor Agreements will not result in a breach or
violation of any of the terms and provisions of, or constitute a
default under, any statute, any rule, regulation or order of any
governmental agency or body or any court having jurisdiction over the
Guarantor or any subsidiary of the Guarantor or any of their
properties, or of any agreement or instrument to which the Guarantor
or any such subsidiary is a party or by which the Guarantor or any
such subsidiary is bound or to which any of the properties of the
Guarantor or any such subsidiary is subject; and
26
(vi) The Guarantor and each of its subsidiaries hold all
licenses, certificates and permits from all governmental authorities
(including, without limitation, Insurance Licenses) which are
necessary to the conduct of their respective businesses, except where
the failure to hold such licenses, certificates or permits would not
have a Material Adverse Effect; the insurance subsidiaries of the
Guarantor have fulfilled and performed all obligations necessary to
maintain their respective Insurance Licenses, except where the failure
to perform such obligations would not have a Material Adverse Effect,
and no event or events have occurred which may be reasonably expected
to result in any impairment, modification, termination or revocation
of such Insurance Licenses which individually or the aggregate would
have a Material Adverse Effect.
(f) The Underwriters shall have received an opinion, dated such
Closing Date, of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Finger, P.A., special Delaware counsel to
the Trust and the Guarantor, 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 Guarantor and the Trust, enforceable against
the Guarantor and the Trust, in accordance with its terms (except as
may be limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting creditors' rights generally,
except that the remedies of specific performance and injunctive and
other forms of equitable relief are subject to certain equitable
defenses and the discretion of the court before which any proceeding
therefor may be brought);
(iv) Under the Delaware Business Trust Act and the Trust
Agreement, the Trust has the power and authority to (a) execute and
deliver, and to perform its obligations under, this Agreement and
(b) issue and perform its obligations under the Offered Securities and
the Common Securities;
27
(v) Under the Delaware Business Trust Act and the Trust
Agreement, the execution, delivery and performance by the Trust of
this Agreement constitutes the valid and binding obligation of the
Trust enforceable in accordance with its terms (except as may be
limited by bankruptcy, insolvency, fraudulent conveyance,
reorganization or similar laws affecting creditors' rights generally,
except that the remedies of specific performance and injunctive and
other forms of equitable relief are subject to the discretion of the
court before which any proceeding therefor may be brought and except
with respect to the obligations of the Trust regarding indemnification
and contribution as provided in Section 7 below);
(vi) The Offered 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 Securityholders, 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 the Securityholders
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 representing the shares of the Offered Securities
("Securities Certificates") and the issuance of replacement Securities
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 Offered Securities and the Common
Securities is not subject to preemptive rights;
(ix) The issuance and sale by the Trust of Offered Securities
and the Common Securities, the execution, delivery and performance by
the Trust of this 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;
28
(x) Assuming that the Trust derives no income from or in connection with
services provided within the State of Delaware and has no assets,
activities (other than maintaining the Delaware Trustee (as defined in
the Trust Agreement) 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 Offered
Securities and the Common Securities; and
(xi) Assuming that the Trust derives no income from or in
connection 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.
(g) The Representatives shall have received on the Closing Date an
opinion (in form and substance reasonably satisfactory to the Representatives
and their counsel), dated as of the Closing Date, of ________________, special
counsel to the Wilmington Trust Company ("WTC"), as Property Trustee and
Delaware Trustee under the Amended and Restated Declaration of Trust, dated as
of ____________, 1997 (the "Declaration"), by and between the Company, as
"Sponsor" and WTC, as "Property Trustee" and as "Delaware Trustee," Trustee
under the Indenture, dated as of ____________, 1997 (the "Indenture"), by and
between the Company and WTC, as "Trustee," and Guarantee Trustee under the
Capital Securities Guarantee, dated as of ____________, 1997 (the "Guarantee"),
by and between the Company and WTC, as "Capital Securities Guarantee Trustee" to
the effect that:
(i) WTC has been duly incorporated and is validly existing as a
banking corporation in good standing under the laws of the State of
Delaware;
(ii) WTC has full corporate trust power and authority to enter
into and perform its obligations under the Declaration, the Indenture
and the Guarantee; and
(iii) Each of the Declaration, the Indenture and the Guarantee
has been duly authorized, executed and delivered by WTC and
constitutes a valid and legally binding agreement of WTC enforceable
against WTC, in accordance with its terms, subject, as to enforcement
29
of remedies, (a) to applicable bankruptcy, insolvency, reorganization,
and other similar laws affecting the rights of creditors generally,
and (b) to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(h) The execution and delivery by WTC of the Declaration, the
Indenture and the Guarantee and the performance by WTC of its obligations
thereunder have been duly authorized by all necessary corporate action of WTC
and do not conflict with or result in a violation of the charter documents or
bylaws of WTC.
(i) No consent, approval or authorization of, or registration,
declaration or filing with, any court or governmental agency or body of the
United States of America or the State of Delaware having jurisdiction over the
trust powers of WTC is required for the consummation on the part of WTC of any
of the transactions contemplated in the Declaration, Indenture or the Guarantee,
except such as have been obtained.
(j) The Representatives shall have received from ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
counsel for the Underwriters, such opinion or opinions, dated such Closing Date,
with respect to the organization of the Trust and the incorporation of the
Guarantor, the validity of the Offered Securities delivered on such Closing
Date, the Registration Statements, the Prospectus and other related matters as
the Representatives may require, and the Trust and the Guarantor shall have each
furnished to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters. In rendering such opinion, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ may rely as matters governed the laws of the states in which such
counsel is not licensed to practice, upon the opinions of local counsel.
(k) The Representatives shall have received a certificate, dated such
Closing Date, of a Trustee of the Trust and the President or any Vice-President
and a principal financial or accounting officer of the Guarantor in which such
Trustee or officers, to the best of their knowledge after reasonable
investigation, shall state that: the representations and warranties of the
Trust and the Guarantor in this Agreement are true and correct; the Trust and
the Guarantor have complied with all agreements and satisfied all conditions on
its part to be performed or satisfied hereunder at or prior to such Closing
Date; no stop order suspending the effectiveness of any Registration Statement
has been issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission; the Additional Registration Statement (if any)
satisfying the requirements of subparagraphs (1) and (3) of Rule 462(b) was
filed pursuant to Rule 462(b), including payment of the applicable filing fee in
accordance with Rule 111(a) or (b) under the Act, prior to the time the
Prospectus was printed and distributed to any Underwriter; and, subsequent to
the date of the most recent financial statements in the Prospectus, there has
been no change, nor any development or event involving a prospective change, in
the
30
condition (financial or other), business, properties or results of operations of
the Trust, or the Guarantor and the subsidiaries of the Guarantor which has or
could reasonably be expected to have a Material Adverse Effect except as set
forth in or contemplated by the Prospectus or as described in such certificate.
(l) The Representatives shall have received a letter, dated such
Closing Date, from KPMG Peat Marwick LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred to in
such subsection will be a date not more than three days prior to such Closing
Date for the purposes of this subsection.
(m) The Trust Agreement, the Guarantee and the Indenture shall have
been executed and delivered, in each case in a form reasonably satisfactory to
CSFBC.
(n) The Offered Securities to be sold by the Trust at the Closing
Date shall have been duly listed on the NYSE subject to notice of issuance and
shall have been registered under the Exchange Act.
(o) The Representatives shall have received lockup letters of the
Guarantor and the directors and executive officers as contemplated by Sections
5(m) and 5(n).
(p) On the Closing Date, the Guarantor shall have received from the
Ohio Insurance Department its consent and approval of those transactions
contemplated by the Restructuring requiring Ohio Insurance Department approval,
and such consents and approvals shall be in full force and effect.
(q) On or before the Closing Date, the Guarantor shall have received
from the Staff of the Commission an exemptive order (or, with the approval of
the Representatives, which shall not be unreasonably withheld, a no-action
letter) in form and substance reasonably satisfactory to the Representatives
with respect to the non-applicability of Section 17 of the 1940 Act and the
rules and regulations promulgated thereunder to the offering, sale and resale of
the Offered Securities contemplated by this Agreement and the Guarantor
Agreements to affiliates of the Guarantor or to affiliates of affiliates of the
Guarantor that are registered investment companies. Such exemptive order (or,
if applicable, no-action letter) shall not have been withdrawn or amended in any
manner by the Staff of the Commission and shall be in full force and effect as
of the Closing Date.
(r) Each of the agreements described in the Prospectus under the
caption "Certain Relationships and Related Transactions - New Arrangements with
the Nationwide Insurance Enterprise" shall have been entered into by the
Guarantor (and, if applicable, any and all affiliates of the Guarantor) and the
Cost Sharing Agreement described in the Prospectus under the caption "Certain
Relationships and
31
Related Transactions - Existing Arrangements with the Nationwide Insurance
Enterprise" shall have been amended, in each case in a form reasonably
satisfactory to CSFBC, and such agreements shall be in full force and effect,
and represent the valid, legal and binding obligations of each of the parties
thereto.
The Trust and the Guarantor will furnish the Representatives with such
conformed copies of such opinions, certificates, letters and documents as the
Representatives may reasonably request. CSFBC may in its sole discretion waive
on behalf of the Underwriters compliance with any conditions to the obligations
of the Underwriters hereunder.
7. Indemnification and Contribution. (a) The Trust and the Guarantor will
indemnify and hold harmless each Underwriter against any losses, claims, damages
or liabilities 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 any untrue statement or alleged
untrue statement of any material fact contained in any Registration Statement,
the Prospectus, or any amendment or supplement thereto, or any related
preliminary prospectus, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
each Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
-------- -------
that neither the Trust nor the Guarantor will be liable in any such case (A) to
the extent that any such loss, claim, damage or liability arises out of or is
based upon an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in conformity
with written information furnished to the Guarantor by any Underwriter through
the Representatives specifically for use therein, it being understood and agreed
that the only such information furnished by any Underwriter consists of the
information described as such in subsection (b) below or (B) with respect to any
preliminary prospectus to the extent that any such loss, claim, damage or
liability of such Underwriter results from the fact that such Underwriter sold
Offered Securities to a person who was not sent, at or prior to the written
confirmation of such sale, a copy of the Prospectus and the loss, claim, damage
or liability of such Underwriter results from an untrue statement or omission of
a material fact contained in the preliminary prospectus that was corrected in
the Prospectus.
(b) Each Underwriter will severally and not jointly indemnify and
hold harmless the Trust and the Guarantor against any losses, claims, damages or
liabilities to which the Trust and the Guarantor may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue upon any
true statement or alleged untrue statement of any material fact contained in any
Registration Statement, the Prospectus, or any amendment or supplement thereto,
or any related preliminary
32
prospectus, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Guarantor by such
Underwriter through the Representatives specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the Trust or the
Guarantor in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred, it being understood
and agreed that the only such information furnished by any Underwriter consists
of the following information in the Prospectus furnished on behalf of each
Underwriter: the last paragraph at the bottom of the cover page concerning the
terms of the offering by the Underwriters, the legend concerning stabilizing on
the inside front cover page, and first and third paragraphs under the caption
"Underwriting."
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election to or assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on any claims that are the subject
matter of such action.
(d) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Trust and the Guarantor on the one hand and the Underwriters on the other
from the offering of the Offered Securities or (ii) if the
33
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Trust and the
Guarantor on the one hand and the Underwriters on the other in connection with
the statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Trust and the Guarantor on the one hand and
the Underwriters on the other shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Offered Securities (before
deducting expenses) received by the Trust and the Guarantor and the total
compensation received by the Underwriters bear to the total price to the public
of the Offered Securities. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Trust, the Guarantor or the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The amount
paid by an indemnified party as a result of the losses, claims, damages or
liabilities referred to in the first sentence of this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim which is the subject of this subsection (d). Notwithstanding the
provisions of this subsection (d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which
the Offered 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 Underwriters' obligations in this subsection (d) to
contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Trust and the Guarantor under this Section
shall be in addition to any liability which the Trust and the Guarantor may
otherwise have and shall extend, upon the same terms and conditions to each
Trustee of the Trust, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 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 director of the Company, to each Trustee of the Trust, to
each director of the Guarantor, to each officer of the Guarantor who has signed
a Registration Statement and to each person, if any, who controls the Trust or
the Guarantor within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Offered Securities hereunder on the Closing
Date and the aggregate number of shares of Offered Securities that such
defaulting Underwriter or
34
Underwriters agreed, but failed, to purchase does not exceed 10% of the total
number of Offered Securities that the Underwriters are obligated to purchase on
such Closing Date, CSFBC may make arrangements satisfactory to the Trust and the
Guarantor for the purchase of such Offered Securities by other persons,
including any of the Underwriters, but if no such arrangements are made by such
Closing Date, the non-defaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Offered
Securities that such defaulting Underwriters agreed but failed to purchase on
such Closing Date. If any Underwriter or Underwriters so default and the
aggregate number of shares of Offered Securities with respect to which such
default or defaults occur exceeds 10% of the total number of shares of Offered
Securities that the Underwriters are obligated to purchase on such Closing Date
and arrangements satisfactory to CSFBC, the Trust and the Guarantor for the
purchase of such Offered Securities by other persons are not made within 36
hours after such default, this Agreement will terminate without liability on the
part of any non-defaulting Underwriter, the Trust or the Guarantor, except as
provided in Section 9. As used in this Agreement, the term "Underwriter"
includes any person substituted for an Underwriter under this Section. Nothing
herein will relieve a defaulting Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Trust and its Trustees and the Guarantor and its officers and of the several
Underwriters set forth in or made pursuant to this Agreement will remain in full
force and effect, regardless of any investigation, or statement as to the
results thereof, made by or on behalf of any Underwriter, the Trust, the
Guarantor or any of their respective representatives, trustees, officers or
directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If this Agreement is terminated pursuant to Section
8 or if for any reason the purchase of the Offered Securities by the
Underwriters is not consummated, the Guarantor shall remain responsible for the
expenses to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Trust, the Guarantor and the Underwriters pursuant to Section
7 shall remain in effect, and if any Offered Securities have been purchased
hereunder, the representations and warranties in Section 2 and all obligations
under Section 5 shall also remain in effect. If the purchase of the Offered
Securities by the Underwriters is not consummated for any reason other than
solely because of the termination of this Agreement pursuant to Section 8 or the
occurrence of any event specified in clause (iii), (iv) or (v) of Section 6(c),
the Guarantor will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent
to the Underwriters, will be mailed, delivered or telegraphed and confirmed to
the Representatives, c/o Credit Suisse First Boston Corporation, ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇▇▇-▇▇▇▇, Attention: Investment Banking Department--
Trans-
35
actions Advisory Group, or, if sent to the Trust or the Guarantor will be
mailed, delivered or telegraphed and confirmed to it at Nationwide Financial
Services, Inc., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, Attention:
President (with a copy to General Counsel); provided, however, that any notice
-------- -------
to an Underwriter pursuant to Section 7 will be mailed, delivered or telegraphed
and confirmed to such Underwriter.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
trustees, officers and directors and controlling persons referred to in Section
7, and no other person will have any right or obligation hereunder.
12. Representation of Underwriters. The Representatives will act for the
several Underwriters in connection with this financing, and any action under
this Agreement taken by the Representatives jointly or by CSFBC will be binding
upon all the Underwriters.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of laws.
Each of the Trust and the Guarantor hereby submits to the non-exclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
36
If the foregoing is in accordance with the Representatives' understanding
of our agreement, kindly sign and return to the Trust one of the counterparts
hereof, whereupon it will become a binding agreement among the Trust, the
Guarantor and the several Underwriters in accordance with its terms.
Very truly yours,
NATIONWIDE FINANCIAL SERVICES CAPITAL TRUST
By: NATIONWIDE FINANCIAL SERVICES, INC., as Depositor
By:_____________________________________________
Name:
Title:
NATIONWIDE FINANCIAL SERVICES, INC.
By
Name:
Title:
The foregoing Underwriting Agreement is hereby confirmed and accepted as of
the date first above written.
Credit Suisse First Boston Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
By Credit Suisse First Boston Corporation
By
Name:
Title:
37
SCHEDULE A
UNDERWRITER PRINCIPAL
----------- AMOUNT OF
OFFERED SECURITIES
------------------
[$]_________________
38
SCHEDULE B
DIRECTORS AND EXECUTIVE OFFICERS TO SIGN LOCK-UPS
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇. ▇▇▇▇▇
W. ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. Click
▇▇▇▇▇ ▇. Diamond
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇ Mecheaux ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
39
