Exhibit 1.1
___________ SHARES
[INFINITY]
COMMON STOCK
UNDERWRITING AGREEMENT
[Insert date]
CREDIT SUISSE FIRST BOSTON CORPORATION
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
BANC OF AMERICA SECURITIES LLC
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Dear Sirs:
1. Introductory. American Premier Underwriters, Inc. ("SELLING
STOCKHOLDER"), an indirect, wholly-owned subsidiary of American Financial Group,
Inc. ("AFG"), proposes to sell outstanding shares ("FIRM SECURITIES")
of the common stock, no par value ("SECURITIES"), of [Infinity] an Ohio
corporation ("Company"), and to sell to the Underwriters, at the option of the
Underwriters, an aggregate of not more than
additional outstanding shares ("OPTIONAL SECURITIES") of the
Company's Securities as set forth below. The Firm Securities and the Optional
Securities are herein collectively called the "OFFERED SECURITIES".
At or prior to the Effective Time (as defined below), the Company shall
(i) acquire all of the issued and outstanding capital stock of each of Atlanta
Casualty Company, Infinity Insurance Company, Leader Insurance Company and
Windsor Insurance Company, (ii) execute and deliver (or cause one or more of the
appropriate Company subsidiaries to execute and deliver) the agreements set
forth on Exhibit B hereto (the "INCEPTION AGREEMENTS") including without
limitation the [100% Quota Share Reinsurance Agreement] pursuant to which, among
other things, the Company's subsidiaries will reinsure certain personal lines
property and casualty insurance business written by Great American Insurance
Company and (iii) consummate or cause the consummation of the transactions
contemplated by the Inception Agreements. All of the foregoing are referred to
collectively herein as the "FORMATION."
The Selling Stockholder and AFG hereby agree with the Company and with
the several Underwriters named in Schedule A hereto ("UNDERWRITERS") as follows:
2. Representations and Warranties of the Company, AFG and the Selling
Stockholder. (a) The Company and AFG jointly and severally represent and warrant
to, and agree with, the several Underwriters that:
(i) A registration statement (No. 333- ) relating to the Offered
Securities, including a form of prospectus, has been filed with the
Securities and Exchange Commission ("COMMISSION") and either (A) has
been declared effective under the Securities Act of 1933 ("ACT") and is
not proposed to be amended or (B) is proposed to be amended by
amendment or post-effective amendment. If such
registration statement (the "INITIAL REGISTRATION STATEMENT") has been
declared effective, either (A) an additional registration statement
(the "ADDITIONAL REGISTRATION STATEMENT") relating to the Offered
Securities may have been filed with the Commission pursuant to Rule
462(b) ("RULE 462(B)") under the Act and, if so filed, has become
effective upon filing pursuant to such Rule and the Offered Securities
all have been duly registered under the Act pursuant to the initial
registration statement and, if applicable, the additional registration
statement or (B) such an additional registration statement is proposed
to be filed with the Commission pursuant to Rule 462(b) and will become
effective upon filing pursuant to such Rule and upon such filing the
Offered Securities will all have been duly registered under the Act
pursuant to the initial registration statement and such additional
registration statement. If the Company does not propose to amend the
initial registration statement or if an additional registration
statement has been filed and the Company does not propose to amend it,
and if any post-effective amendment to either such registration
statement has been filed with the Commission prior to the execution and
delivery of this Agreement, the most recent amendment (if any) to each
such registration statement has been declared effective by the
Commission or has become effective upon filing pursuant to Rule 462(c)
("RULE 462(C)") under the Act or, in the case of the additional
registration statement, Rule 462(b). For purposes of this Agreement,
"EFFECTIVE TIME" with respect to the initial registration statement or,
if filed prior to the execution and delivery of this Agreement, the
additional registration statement means (A) if the Company has 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 (B) if the Company 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 statement has not been
filed prior to the execution and delivery of this Agreement but the
Company 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 a part of the initial
registration statement as of the Effective Time of the additional
registration statement pursuant to the General Instructions of the Form
on which it is filed and including all information (if any) deemed to
be a part of the initial registration statement as of its Effective
Time pursuant to Rule 430A(b) ("RULE 430A(B)") under the Act, is
hereinafter referred to as the "INITIAL REGISTRATION STATEMENT". The
additional registration statement, as amended at its Effective Time,
including the contents of the initial registration statement
incorporated by reference therein and including all information (if
any) deemed to be a part of the additional registration statement as of
its Effective Time pursuant to Rule 430A(b), is hereinafter referred to
as the "ADDITIONAL REGISTRATION STATEMENT". The Initial Registration
Statement and the Additional Registration Statement are hereinafter
referred to collectively as the "REGISTRATION STATEMENTS" and
individually as a "REGISTRATION STATEMENT". The form of prospectus
relating to the 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.
(ii) If the Effective Time of the Initial Registration Statement
is prior to the execution and delivery of this Agreement: (A) on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement conformed in all 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
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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, (B) on the Effective Date of the Additional Registration
Statement (if any), each Registration Statement conformed, or will
conform, in all 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 (C) 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 respects to the requirements of the Act and the Rules and
Regulations and none of such documents includes, or will include, any
untrue statement of a material fact or omits, or will omit, to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading. If the Effective Time of the
Initial Registration Statement is subsequent to the execution and
delivery of this Agreement: on the Effective Date of the Initial
Registration Statement, the Initial Registration Statement and the
Prospectus will conform in all 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 Company
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(c) hereof. It is further
understood and agreed that a Registration Statement and Prospectus may
contain special purpose financial statements that present the assets to
be acquired, the liabilities to be assumed and the related underwriting
results of the personal lines agency business of Great American
Insurance Company as agreed to by the representatives of the
Commission.
(iii) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Ohio, with
power and authority (corporate and other) to own its properties and
conduct its business as described in the Prospectus; and the Company is
duly qualified to do business as a foreign corporation in good standing
in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification.
(iv) The Formation will not result in any tax liability to the
Company or any of its subsidiaries.
(v) Each subsidiary of the Company has been duly incorporated and
is an existing corporation in good standing under the laws of the
jurisdiction of its 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 Company is duly qualified
to do business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification; all of the issued
and outstanding capital stock of each subsidiary of the Company has
been duly authorized and validly issued and is fully paid and
nonassessable; and the capital stock of each subsidiary owned by the
Company, directly or through subsidiaries, is owned free from liens,
encumbrances and defects.
(vi) The Offered Securities and all other outstanding shares of
capital stock of the Company have been duly authorized and validly
issued, fully paid and nonassessable and conform to the description
thereof contained in the Prospectus; as of the date hereof, the Selling
Stockholder owns all of the outstanding shares of capital stock of the
Company; and the Selling Stockholder has no preemptive rights with
respect to the Securities.
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(vii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other like
payment.
(viii) Except as disclosed in the Prospectus, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right to require the Company to file a
registration statement under the Act with respect to any securities of
the Company owned or to be owned by such person or to require the
Company to include such securities in the securities registered
pursuant to a Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the
Company under the Act that have been validly waived or satisfied prior
to the date hereof.
(ix) The Securities have been approved for listing subject to
notice of issuance on The New York Stock Exchange.
(x) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required to be
obtained or made by the Company, AFG or the Selling Stockholder or any
subsidiary of the Company, AFG or the Selling Stockholder for the
consummation of the Formation or the transactions contemplated by this
Agreement in connection with the sale of the Offered Securities, except
such as have been obtained and made under the Act and such as may be
required under state insurance laws (all of which have been obtained
prior to the date hereof) and such as may be required under state
securities laws.
(xi) The execution, delivery and performance of this Agreement and
each of the Inception Agreements, and the consummation of the
transactions herein and therein contemplated and of the Formation will
not result in a breach or violation of any of the terms and provisions
of, or constitute a default under, any statute, any rule, regulation or
order of any governmental agency or body or any court, domestic or
foreign, having jurisdiction over the Company, AFG or the Selling
Stockholder or any subsidiary of the Company, AFG or the Selling
Stockholder or any of their respective properties, or any agreement or
instrument to which the Company, AFG or the Selling Stockholder or any
such subsidiary is a party or by which the Company, AFG or the Selling
Stockholder or any such subsidiary is bound or to which any of the
respective properties of the Company, AFG or the Selling Stockholder or
any such subsidiary is subject, or the charter or by-laws (or similar
corporate documents) of the Company, AFG or the Selling Stockholder or
any such subsidiary.
(xii) Each Inception Agreement has been duly authorized, executed
and delivered by each of the parties thereto, is in full force and
effect and constitutes valid and legally binding obligations of the
parties thereto enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(xiii) This Agreement has been duly authorized, executed and
delivered by the Company, the Selling Stockholder and AFG.
(xiv) Except as disclosed in the Prospectus, the Company and its
subsidiaries have good and marketable title to all real properties and
all other properties and assets owned by them, in each case free from
liens, encumbrances and defects that would materially affect the value
thereof or materially interfere with the use made or to be made thereof
by them; and except as disclosed in the Prospectus, the Company and its
subsidiaries hold any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere
with the use made or to be made thereof by them.
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(xv) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated (or
contemplated by the Prospectus to be operated) by them and have not
received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole
("MATERIAL ADVERSE EFFECT").
(xvi) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
might have a Material Adverse Effect.
(xvii) The Company and its subsidiaries own, possess or can
acquire on reasonable terms, adequate trademarks, 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 (or contemplated by the Prospectus to be operated) by them, or
presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with respect
to any intellectual property rights that, if determined adversely to
the Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect.
(xviii) Except as disclosed in the Prospectus, neither the Company
nor any of its subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or any
court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or
restoration of the environment or human exposure to hazardous or toxic
substances (collectively, "ENVIRONMENTAL LAWS"), owns or operates any
real property contaminated with any substance that is subject to any
environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any
claim relating to any environmental laws, which violation,
contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and the Company is not aware
of any pending investigation which might lead to such a claim.
(xix) Except as disclosed in the Prospectus, there are no pending
actions, suits or proceedings against or affecting the Company, AFG or
the Selling Stockholder any of their respective subsidiaries or any of
their respective properties that, if determined adversely to the
Company, AFG or the Selling Stockholder or any of their respective
subsidiaries, would individually or in the aggregate have a Material
Adverse Effect, or would materially and adversely affect the ability of
the Company, AFG and the Selling Stockholder to perform their
respective obligations under this Agreement or the ability of any party
to any Inception Agreement to perform its obligations thereunder, or
which are otherwise material in the context of the sale of the Offered
Securities or the Formation; and no such actions, suits or proceedings
are threatened or, to the Company's knowledge, contemplated.
(xx) The financial statements included in each Registration
Statement and the Prospectus present fairly the financial position of
the Company and its consolidated subsidiaries as of the dates shown and
their results of operations and cash flows for the periods shown, and,
except as otherwise disclosed in the Prospectus, such financial
statements have been prepared in conformity with generally accepted
accounting principles in the United States applied on a consistent
basis and the schedules included in each Registration Statement present
fairly the information required to be stated therein; and the
assumptions used in preparing the pro forma financial statements
included in each Registration Statement and 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
5
the proper application of those adjustments to the corresponding
historical financial statement amounts.
(xxi) Except as disclosed in the Prospectus, since December 31,
2001 there has been no material adverse change, nor any development or
event involving a prospective material adverse change, in the condition
(financial or other), business, properties or results of operations of
the Company and its subsidiaries taken as a whole, 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
Company on any class of its capital stock.
(xxii) The Company is not and, after giving effect to the offering
and sale of the Offered Securities, will not be an "investment company"
as defined in the Investment Company Act of 1940.
(xxiii) Each subsidiary of the Company which is engaged in the
business of insurance or reinsurance (collectively, the "INSURANCE
SUBSIDIARIES") holds such insurance licenses, certificates and permits
from governmental authorities (including, without limitation, from the
insurance regulatory agencies of the various jurisdictions where it
conducts business (the "INSURANCE LICENSES")) as are necessary to the
conduct of its business as described in the Prospectus; the Company and
each Insurance Subsidiary have fulfilled and performed all obligations
necessary to maintain the Insurance Licenses; except as disclosed in
the Prospectus, there is no pending or, to the knowledge of the
Company, threatened action, suit, proceeding or investigation that
could reasonably be expected to result in the revocation, termination
or suspension of any Insurance License which would, individually or in
the aggregate, have a Material Adverse Effect; and except as disclosed
in the Prospectus, no insurance regulatory agency or body has issued,
or commenced any proceeding for the issuance of, any order or decree
impairing, restricting or prohibiting the payment of dividends by any
Insurance Subsidiary to its parent.
(xxiv) Except as disclosed in the Prospectus, the Company and its
Insurance Subsidiaries have made no material change in their insurance
reserving practices since December 31, 2001.
(xxv) All reinsurance treaties and arrangements to which any
Insurance Subsidiary is a party are in full force and effect and no
Insurance Subsidiary is in violation of, or in default in the
performance, observance or fulfillment of, any obligation, agreement,
covenant or condition contained therein; no Insurance Subsidiary has
received any notice from any of the other parties to such treaties,
contracts or agreements that such other party intends not to perform
such treaty and, to the best knowledge of the Company, AFG and the
Insurance Subsidiaries, the Company and the Insurance Subsidiaries have
no reason to believe that any of the other parties to such treaties or
arrangements will be unable to perform such treaty or arrangement
except to the extent adequately and properly reserved for in the
audited historical financial statements of the Company included in the
Prospectus, except where such default or inability to perform would
not, individually or in the aggregate, have a Material Adverse Effect.
(xxvi) The statutory financial statements of the Insurance
Subsidiaries, from which certain ratios and other statistical data
included in the Registration Statement and the Prospectus have been
derived, have been prepared for each relevant period in conformity with
statutory accounting principles or practices required or permitted by
the National Association of Insurance Commissioners and by the
appropriate Insurance Department of the jurisdiction of domicile of
each Insurance Subsidiary, and such statutory accounting practices have
been applied on a consistent basis throughout the periods involved,
except as may otherwise be indicated therein or in the notes thereto,
and present fairly in all material respects the statutory financial
position of the Insurance Subsidiaries as of the dates thereof, and the
statutory basis results of operations of the Insurance Subsidiaries for
the periods covered thereby.
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(b) The Selling Stockholder and AFG jointly and severally represent and
warrant to, and agree with, the several Underwriters that:
(i) The Selling Stockholder has and on each Closing Date
hereinafter mentioned will have valid and unencumbered title to the
Offered Securities to be delivered by Selling Stockholder on such
Closing Date and full right, power and authority to enter into this
Agreement and to sell, assign, transfer and deliver the Offered
Securities to be delivered by the Selling Stockholder on such Closing
Date hereunder; and upon the delivery of and payment for the Offered
Securities on each Closing Date hereunder the several Underwriters will
acquire valid and unencumbered title to the Offered Securities to be
delivered by the Selling Stockholder on such Closing Date.
(ii) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required to be
obtained or made by the Selling Stockholder for the consummation of the
transactions contemplated by this Agreement in connection with the sale
of the Offered Securities, except such as have been obtained and made
under the Act and such as may be required under state securities laws.
(iii) The execution, delivery and performance of this Agreement,
and the consummation of the transactions herein contemplated 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 Selling Stockholder or any
subsidiary of the Selling Stockholder or any of their respective
properties, or any agreement or instrument to which the Selling
Stockholder or any such subsidiary is a party or by which the Selling
Stockholder or any such subsidiary is bound or to which any of the
respective properties of the Selling Stockholder or any such subsidiary
is subject, or the charter or by-laws of the Selling Stockholder or any
such subsidiary.
(iv) If the Effective Time of the Initial Registration Statement
is prior to the execution and delivery of this Agreement: (A) on the
Effective Date of the Initial Registration Statement, the Initial
Registration Statement conformed in all respects to the requirements of
the Act and the 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, (B) on the Effective Date of the Additional
Registration Statement (if any), each Registration Statement conformed,
or will conform, in all 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 statement therein not misleading, and (C) 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 respects to the requirements of the Act and the
Rules and Regulations, and neither 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 respects to the requirements of
the Act and the Rules and Regulations, none of such documents will
include any untrue statement of a material fact or will omit to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading. 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
Company by any Underwriter
7
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(c). It is further understood and agreed that a
Registration Statement and Prospectus may contain special purpose
financial statements that present the assets to be acquired, the
liabilities to be assumed and the related underwriting results of the
personal lines agency business of Great American Insurance Company as
agreed to by the representatives of the Commission.
(v) Except as disclosed in the Prospectus, there are no contracts,
agreements or understandings between the Selling Stockholder and any
person that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other like
payment.
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 Selling Stockholder agrees to
sell to the Underwriters, and the Underwriters agree, severally and not jointly,
to purchase from the Selling Stockholder, at a purchase price of $ per share,
the respective numbers of Firm Securities set forth opposite the names of the
Underwriters in Schedule A hereto.
The Selling Stockholder will deliver the Firm Securities to the
Representatives for the accounts of the Underwriters, against payment of the
purchase price in Federal (same day) funds by official bank check or checks or
wire transfer to an account at a bank acceptable to Credit Suisse First Boston
Corporation ("CSFBC") drawn to the order of the Selling Stockholder at the
office of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, New York, New York, at 10:00 A.M., New York
time, on , or at such other time not later than seven full business days
thereafter as CSFBC and the Selling Stockholder determines, such time being
herein referred to as the "FIRST CLOSING DATE". For purposes of Rule 15c6-1
under the Securities Exchange Act of 1934, the First Closing Date (if later than
the otherwise applicable settlement date) shall be the settlement date for
payment of funds and delivery of securities for all the Offered Securities sold
pursuant to the offering. The certificates for the Firm Securities so to be
delivered will be in definitive form, in such denominations and registered in
such names as CSFBC requests and will be made available for checking and
packaging at the above office of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP at least 24 hours prior to
the First Closing Date.
In addition, upon written notice from CSFBC given to the Company and
the Selling Stockholder from time to time not more than 30 days subsequent to
the date of the Prospectus, the Underwriters may purchase from the Selling
Stockholder all or less than all of the Optional Securities at the purchase
price per Security to be paid for the Firm Securities. The Selling Stockholder
agrees to sell to the Underwriters the number of shares of Optional Securities
specified in such notice and the Underwriters agree, severally and not jointly,
to purchase such Optional Securities. Such Optional Securities shall be
purchased for the account of each Underwriter in the same proportion as the
number of Firm Securities set forth opposite such Underwriter's name bears to
the total number of Firm Securities (subject to adjustment by CSFBC to eliminate
fractions) and may be purchased by the Underwriters only for the purpose of
covering over-allotments made in connection with the sale of the Firm
Securities. No Optional Securities shall be sold or delivered unless the Firm
Securities previously have been, or simultaneously are, sold and delivered. The
right to purchase the Optional Securities or any portion thereof may be
exercised from time to time and to the extent not previously exercised may be
surrendered and terminated at any time upon notice by CSFBC to the Selling
Stockholder.
Each time for the delivery of and payment for the Optional Securities,
being herein referred to as an "OPTIONAL CLOSING DATE", which may be the First
Closing Date (the First Closing Date and each Optional Closing Date, if any,
being sometimes referred to as a "CLOSING DATE"), shall be determined by CSFBC
but shall be not later than five full business days after written notice of
election to purchase Optional Securities is given. The Selling Stockholder will
deliver the Optional Securities being purchased on each Optional Closing Date to
the Representatives for the accounts of the several Underwriters, against
payment of the purchase price in Federal (same day) funds by official bank check
or checks or wire transfer to an account at a bank acceptable to CSFBC drawn to
the order of the Selling Stockholder, at the above office of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
LLP, New York, New York. The certificates for the Optional Securities being
purchased on each Optional Closing Date
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will be in definitive form, in such denominations and registered in such names
as CSFBC requests upon reasonable notice prior to such Optional Closing Date and
will be made available for checking and packaging at the above office of ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP at a reasonable time in advance of such Optional 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 Company, AFG and the Selling Stockholder.
(a) The Company agrees with the several Underwriters and the Selling Stockholder
that:
(i) If the Effective Time of the Initial Registration Statement is
prior to the execution and delivery of this Agreement, the Company 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 Company 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 Company will
file the additional registration statement or, if filed, will file a
post-effective amendment thereto with the Commission pursuant to and in
accordance with Rule 462(b) on or prior to 10:00 P.M., New York time,
on the date of this Agreement or, if earlier, on or prior to the time
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.
(ii) The Company 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 the Company will also advise CSFBC
promptly of the effectiveness of each Registration Statement (if its
Effective Time is subsequent to the execution and delivery of this
Agreement) and of any amendment or supplementation of a Registration
Statement or 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.
(iii) If, at any time when a prospectus relating to the Offered
Securities is required to be delivered under the Act in connection with
sales by any 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 Company 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. 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.
(iv) As soon as practicable, but not later than the Availability
Date (as defined below), the Company 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
9
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.
(v) The Company will furnish to the Representatives copies of each
Registration Statement (three of which will be signed and will include
all exhibits), each related preliminary prospectus, and, so long as 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, on the business day following the later of the execution and
delivery of this Agreement or the Effective Time of the Initial
Registration Statement. All other such documents shall be so furnished
as soon as available. The Selling Stockholder will pay the expenses of
printing and distributing to the Underwriters all such documents.
(vi) The Company will arrange for the qualification of the Offered
Securities for sale and the determination of their eligibility for
investment under the laws of such jurisdictions as CSFBC designates and
will continue such qualifications in effect so long as required for the
distribution.
(vii) For a period of 180 days after the date of the initial
public offering of the Offered Securities, the Company 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 shares of its Securities or
securities convertible into or exchangeable or exercisable for any
shares of its Securities, or publicly disclose the intention to make
any such offer, sale, pledge, disposition or filing, without the prior
written consent of CSFBC, except grants of employee stock options
pursuant to the terms of a plan in effect on the date hereof and
disclosed in the Prospectus, so long as such options are not
exercisable within the 180-day period, or issuances of Securities
pursuant to the exercise of any employee stock options outstanding on
the date hereof.
(b) The Selling Stockholder and AFG jointly and severally agree with
the several Underwriters and the Company that:
(i) The Selling Stockholder will pay all expenses incident to the
performance of the obligations of the Selling Stockholder and the
obligations of the Company under this Agreement, for any filing fees
and other expenses (including fees and disbursements of counsel)
incurred 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
the review by the National Association of Securities Dealers, Inc. of
the Offered Securities, for any travel expenses of the Company's
officers and employees and any other expenses of the Company in
connection with attending or hosting meetings with prospective
purchasers of the Offered Securities, for any transfer taxes on the
sale of the Offered Securities to the Underwriters and for expenses
incurred in distributing preliminary prospectuses and the Prospectus
(including any amendments and supplements thereto) to the Underwriters.
Notwithstanding the foregoing, the Selling Stockholder and the
Underwriters agree to split, on a 50/50 basis, the cost of any private
aviation used in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities.
(ii) Each of the Selling Stockholder and AFG agree, for a period
of 180 days after the date of the initial public offering of the
Offered Securities, not to offer, sell, contract to sell, pledge or
otherwise dispose of, directly or indirectly, any additional shares of
the Securities of the Company or securities convertible into or
exchangeable or exercisable for any shares of Securities, enter into a
transaction which would have the same effect, or enter into any swap,
hedge or other arrangement that transfers, in whole or part, any of the
economic consequences of ownership of the Securities, whether any such
aforementioned transaction is to be settled by delivery of the
Securities or such other securities, in
10
cash or otherwise, or publicly disclose the intention to make any such
offer, sale, pledge or disposition, or enter into any such transaction,
swap, hedge or other arrangement, without, in each case, the prior
written consent of CSFBC.
6. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the Firm Securities on the
First Closing Date and the Optional Securities to be purchased on each Optional
Closing Date will be subject to the accuracy of the representations and
warranties on the part of the Company, AFG and the Selling Stockholder herein,
to the accuracy of the statements of Company officers made pursuant to the
provisions hereof, to the performance by the Company, AFG and the Selling
Stockholder of their obligations hereunder and to the following additional
conditions precedent:
(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 Ernst & Young LLP in the form set out as Exhibit A to this
Agreement.
(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, 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 AFG, the Selling Stockholder, 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 condition
(financial or other), business, properties or results of operations of
the Company or its subsidiaries which, in the judgment of a majority in
interest of the Underwriters including the Representatives, would be
likely to prejudice materially the success of the proposed issue, sale
or distribution of the Offered Securities, whether in the primary
market or in respect of dealings in the secondary market of the public
offering or the sale of and payment for the Offered Securities; (ii)
any downgrading in the rating of any debt securities or preferred stock
of the Company by any "nationally recognized statistical rating
organization" (as defined for purposes of Rule 436(g) under the Act) or
downgrading in the insurance claims paying ability rating of any
Insurance Subsidiary by A.M. Best Company, or any public announcement
that any such organization has under surveillance or review such rating
(other than an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such
rating); (iii) any change in U.S. or international financial, political
or economic conditions or currency exchange rates or exchange controls
as would, in the judgment of a majority in interest of the Underwriters
including the Representatives, be likely to prejudice materially the
success of the proposed issue, sale or distribution of the Offered
Securities, whether in the primary market or in respect of dealings in
the secondary market; (iv) any material suspension or material
limitation of trading in securities generally on the New York Stock
Exchange, or any setting of
11
minimum prices for trading on such exchange, or any suspension of
trading of any securities of the Company on any exchange or in the
over-the-counter market; (v) any banking moratorium declared by U.S.
Federal or New York authorities; (vi) any major disruption of
settlements of securities or clearance services in the United States or
(vii) any attack on, outbreak or escalation of hostilities or act of
terrorism involving the United States or any declaration of war by
Congress or any other national or international calamity or emergency
if, in the judgment of a majority in interest of the Underwriters
including the Representatives, such attack, outbreak, escalation, act,
declaration, calamity or emergency would be likely to prejudice
materially the success of the proposed issue, sale or distribution of
the Offered Securities, whether in the primary market or in respect of
dealings in the secondary market.
(d) The Representatives shall have received an opinion, dated
such Closing Date, of Keating, Muething, & ▇▇▇▇▇▇▇, P.L.L., counsel for
the Company, to the effect that:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the
State of Ohio, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus; and the Company is duly qualified to do business
as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or
the conduct of its business requires such qualification;
(ii) Each subsidiary of the Company has been duly
incorporated and is an existing corporation in good standing
under the laws of the jurisdiction of its 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 Company is duly
qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or
lease of property or the conduct of its business requires such
qualification; all of the issued and outstanding capital stock
of each subsidiary of the Company has been duly authorized and
validly issued and is fully paid and nonassessable; and the
capital stock of each subsidiary owned by the Company,
directly or through subsidiaries, is owned free from liens,
encumbrances and defects;
(iii) The Formation will not result in any tax
liability to the Company or any of its subsidiaries;
(iv) The Offered Securities delivered on such Closing
Date and all other outstanding shares of common stock of the
Company have been duly authorized and validly issued, are
fully paid and nonassessable and conform to the description
thereof contained in the Prospectus; immediately prior to the
closing, the Selling Stockholder owns all of the outstanding
shares of capital stock of the Company; and the Selling
Stockholder has no preemptive rights with respect to the
Securities;
(v) Except as disclosed in the Prospectus, there are
no contracts, agreements or understandings known to such
counsel between the Company and any person granting such
person the right to require the Company to file a registration
statement under the Act with respect to any securities of the
Company owned or to be owned by such person or to require the
Company to include such securities in the securities
registered pursuant to the Registration Statement or in any
securities being registered pursuant to any other registration
statement filed by the Company under the Act that have not
been validly waived or satisfied prior to the date hereof;
12
(vi) The Company is not and, after giving effect to
the offering and sale of the Offered Securities, will not be
an "investment company" as defined in the Investment Company
Act of 1940;
(vii) No consent, approval, authorization or order
of, or filing with, any governmental agency or body or any
court is required to be obtained or made by the Company, AFG
or the Selling Stockholder or any subsidiary of the Company,
AFG or the Selling Stockholder for the consummation of the
Formation or the transactions contemplated by this Agreement
in connection with the sale of the Offered Securities, except
such as have been obtained and made under the Act and such as
may be required under state insurance laws (all of which have
been obtained prior to the date hereof) and under state
securities laws;
(viii) The execution, delivery and performance of
this Agreement and each of the Inception Agreements, and the
consummation of the transactions herein and therein
contemplated and of the Formation 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 Company, AFG or the Selling
Stockholder or any subsidiary of the Company, AFG or the
Selling Stockholder or any of their respective properties, or
any agreement or instrument to which the Company, AFG or the
Selling Stockholder or any such subsidiary is a party or by
which the Company, AFG or the Selling Stockholder or any such
subsidiary is bound or to which any of the respective
properties of the Company, AFG or the Selling Stockholder or
any such subsidiary is subject, or the charter or by-laws (or
similar corporate documents) of the Company, AFG or the
Selling Stockholder or any such subsidiary;
(ix) Except as disclosed in the Prospectus, to the
knowledge of such counsel, there are no pending actions, suits
or proceedings against or affecting the Company, AFG or the
Selling Stockholder any of their respective subsidiaries or
any of their respective properties that, if determined
adversely to the Company, AFG or the Selling Stockholder or
any of their respective subsidiaries, would individually or in
the aggregate have a Material Adverse Effect, or would
materially and adversely affect the ability of the Company,
AFG and the Selling Stockholder to perform their respective
obligations under this Agreement or the ability of any party
to any Inception Agreement to perform its obligations
thereunder, or which are otherwise material in the context of
the sale of the Offered Securities or the Formation; and to
the knowledge of such counsel, no such actions, suits or
proceedings are threatened or contemplated;
(x) 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 either 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 of the
knowledge of such counsel, no stop order suspending the
effectiveness of a Registration Statement or any 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; such counsel have no reason to believe that any
part of a Registration Statement or any amendment thereto, as
of its effective date or as of such Closing Date, contained
any untrue statement of a material fact or omitted to state
any material fact required to be stated therein
13
or necessary to make the statements therein not misleading or
that the Prospectus or any amendment or supplement thereto, as
of its issue date or as of such Closing Date, contained any
untrue statement of a material fact or omitted to state any
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading; the descriptions in the
Registration Statements 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 do 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 of any contracts or documents of a
character 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 other financial data contained
in the Registration Statements or the Prospectus;
(xi) Each Inception Agreement has been duly
authorized, executed and delivered by each of the parties
thereto, is in full force and effect and constitutes valid and
legally binding obligations of the parties thereto enforceable
in accordance with its terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles;
(xii) This Agreement has been duly authorized,
executed and delivered by the Company, the Selling Stockholder
and AFG;
(xiii) To the knowledge of such counsel (after
reasonable investigation), each Insurance Subsidiary holds
such insurance licenses, certificates and permits from
governmental authorities (including, without limitation,
Insurance Licenses) as are necessary to the conduct of its
business as described in the Prospectus; to the knowledge of
such counsel, there is no pending or threatened action, suit,
proceeding or investigation that could reasonably be expected
to result in the revocation, termination or suspension of any
Insurance License which would have a Material Adverse Effect;
and except as disclosed in the Prospectus, to the knowledge of
such counsel, no insurance regulatory agency or body has
issued, or commenced any proceeding for the issuance of, any
order or decree impairing, restricting or prohibiting the
payment of dividends by any Insurance Subsidiary to its
parent;
(xiv) To the knowledge of such counsel, all
reinsurance treaties and arrangements to which any Insurance
Subsidiary is a party are in full force and effect and such
counsel is not aware of any violation of, or default in the
performance, observance or fulfillment of, any obligation,
agreement, covenant or condition contained therein by any
Insurance Subsidiary; and
In rendering such opinion, such counsel may state that its
opinion is limited to matters governed by the Federal laws of the
United States of America and the laws of the State of Ohio and has
relied on certificates of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., Vice President,
Deputy General Counsel and Secretary of AFG and ▇▇▇ ▇▇▇▇▇, Esq. of
Great American Insurance Company, as to certain factual matters
attached to such opinion. Such opinion shall state that ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP may rely upon such opinion as to matters of Ohio law in
rendering its opinion pursuant to Section 6(f) hereof.
(e) The Representatives shall have received an opinion, dated
such Closing Date, of ▇▇▇▇▇▇▇, Muething & ▇▇▇▇▇▇▇, P.L.L., counsel for
the Selling Stockholder, to the effect that:
(i) The Selling Stockholder had valid and
unencumbered title to the Offered Securities delivered by the
Selling Stockholder on such Closing Date and had full right,
power and authority to sell, assign, transfer and deliver the
Offered Securities delivered by
14
the Selling Stockholder on such Closing Date hereunder; and
the several Underwriters have acquired valid and unencumbered
title to the Offered Securities purchased by them on such
Closing Date hereunder;
(ii) No consent, approval, authorization or order of,
or filing with, any governmental agency or body or any court
is required to be obtained or made by the Selling Stockholder
for the consummation of the transactions contemplated by this
Agreement in connection with the sale of the Offered
Securities, except such as have been obtained and made under
the Act and such as may be required under state insurance laws
(all of which have been obtained prior to the date hereof) and
under state securities laws;
(iii) The execution, delivery and performance of this
Agreement and the consummation of the transactions herein
contemplated 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
Selling Stockholder or any of its properties or any agreement
or instrument to which the Selling Stockholder is a party or
by which the Selling Stockholder is bound or to which any of
the properties of the Selling Stockholder is subject, or the
charter or by-laws of the Selling Stockholder; and
(iv) This Agreement has been duly authorized,
executed and delivered by the Selling Stockholder.
In rendering such opinion, such counsel may state
that its opinion is limited to matters governed by the Federal laws of
the United States of America and the laws of the State of Ohio and has
relied on a certificate of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq., Vice President,
Deputy General Counsel and Secretary of AFG, as to certain factual
matters attached to such opinion. Such opinion shall state that ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP may rely upon such opinion as to matters of Ohio law in
rendering its opinion pursuant to Section 6(f) hereof.
(f) The Representatives shall have received from ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP, counsel for the Underwriters, such opinion or opinions,
dated such Closing Date, with respect to the incorporation of the
Company, the validity of the Offered Securities delivered on such
Closing Date, the Registration Statements, the Prospectus and other
related matters as the Representatives may require, and the Selling
Stockholder, AFG and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters. In rendering such opinion, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP may
rely as to the incorporation of the Company and all other matters
governed by Ohio law upon the opinion of ▇▇▇▇▇▇▇, Muething & ▇▇▇▇▇▇▇,
P.L.L. referred to above.
(g) The Representatives shall have received a certificate,
dated such Closing Date, of the President or any Vice President and a
principal financial or accounting officer of the Company in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that: the representations and warranties of
the Company in this Agreement are true and correct; the Company has
complied with all agreements and satisfied all conditions on its part
to be performed or satisfied hereunder at or prior to such Closing
Date; no stop order suspending the effectiveness of any Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are contemplated by the Commission; the Additional
Registration Statement (if any) satisfying the requirements of
subparagraphs (1) and (3) or 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
December 31, 2001, there has been no material adverse change, nor any
development or event involving a prospective material adverse change,
in the condition (financial or other), business,
15
properties or results of operations of the Company and its subsidiaries
taken as a whole except as set forth in or contemplated by the
Prospectus or as described in such certificate.
(h) The Representatives shall have received a certificate,
dated such Closing Date, of the President or any Vice President and a
principal financial or accounting officer of the Selling Stockholder in
which such officers, to the best of their knowledge after reasonable
investigation, shall state that: the representations and warranties of
the Selling Stockholder in this Agreement are true and correct and the
Selling Stockholder has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or
prior to such Closing Date;
(i) The Representatives shall have received a certificate,
dated such Closing Date, of the President or any Vice President and a
principal financial or accounting officer of AFG in which such
officers, to the best of their knowledge after reasonable
investigation, shall state that: the representations and warranties of
AFG in this Agreement are true and correct and AFG has complied with
all agreements and satisfied all conditions on its part to be performed
or satisfied hereunder at or prior to such Closing Date;
(j) The Representatives shall have received a letter, dated
such Closing Date, from Ernst & Young LLP bringing down the letter from
Ernst & Young LLP provided to the Representatives pursuant to Section
6(a) to a date not more than 3 days prior to such Closing Date, in a
form reasonably acceptable to the Representatives and their counsel.
(k) The Selling Stockholder agrees to deliver to CSFBC a
properly completed and executed United States Treasury Department Form
W-9 (or other applicable form or statement specified by Treasury
Department regulations in lieu thereof).
(l) On or prior to the date of this Agreement, the
Representatives shall have received lockup letters in form and
substance satisfactory to the Representatives from each of the
Company's officers and directors.
(m) The Formation (including without limitation the execution
and delivery of all Inception Agreements by all parties thereto) shall
have been consummated as provided in the Prospectus in a manner
acceptable to CSFBC.
The Selling Stockholder, AFG and the Company will furnish the Representatives
with such conformed copies of such opinions, certificates, letters and documents
as the Representatives 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, whether in respect of an Optional
Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Company will indemnify and
hold harmless each Underwriter, its partners, directors and officers and each
person, if any, who controls such Underwriter within the meaning of Section 15
of the Act, against any losses, claims, damages or liabilities, joint or
several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon 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 the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Company by any Underwriter
16
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 (c) below.
(b) The Selling Stockholder and AFG will jointly and severally
indemnify and hold harmless each Underwriter, its partners, directors and
officers and each person, if any, who controls such Underwriter within the
meaning of Section 15 of the Act, against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon 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 the Selling Stockholder will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement in or omission
or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Company by an 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 (c) below.
(c) Each Underwriter will severally and not jointly indemnify and hold
harmless the Company, its directors and officers and each person, if any, who
controls the Company within the meaning of Section 15 of the Act, AFG and the
Selling Stockholder against any losses, claims, damages or liabilities to which
the Company, AFG or the Selling Stockholder 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 the
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such Underwriter
through the Representatives specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Company, AFG and the Selling
Stockholder 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 concession and reallowance figures appearing in the fourth
paragraph under the caption "Underwriting" and the information contained in the
sixth paragraph, the first sentence of the fourteenth paragraph and the
fifteenth paragraph under the caption "Underwriting"].
(d) 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 an indemnifying party under
subsection (a), (b) or (c) 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), (b) or (c) above. In case any such action
is brought against any indemnified party and it notifies an 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 so to assume the defense thereof, the indemnifying party will not be
liable to such indemnified party under this Section for any legal or other
expenses subsequently incurred by such indemnified party in connection with the
17
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 (i) includes
an unconditional release of such indemnified party from all liability on any
claims that are the subject matter of such action and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of an indemnified party.
(e) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a), (b)
or (c) 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), (b) or (c) above (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company, AFG and the Selling Stockholder on the one hand and the Underwriters on
the other from the offering of the Securities or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, AFG and the Selling
Stockholder 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 Company, AFG and the Selling Stockholder 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 (before deducting
expenses) received by the Selling Stockholder bear to the total underwriting
discounts and commissions received by the Underwriters. The relative fault shall
be determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company, AFG, the Selling
Stockholder 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 (e) 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 (e).
Notwithstanding the provisions of this subsection (e), no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the 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
(e) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(f) The obligations of the Company, AFG and the Selling Stockholder
under this Section shall be in addition to any liability which the Company, AFG
and the Selling Stockholder may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 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 officer of the Company who
has signed a Registration Statement and to each person, if any, who controls the
Company within the meaning of the Act.
(g) The sum of the total amounts payable in indemnity by the Selling
Stockholder and AFG under Section 7(b) and for contribution under Section 7(e)
shall not exceed the gross proceeds received by the Selling Stockholder from the
8. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Offered Securities hereunder on either the
First or any Optional Closing Date and the aggregate number of shares of Offered
Securities that such defaulting Underwriter or Underwriters agreed but failed to
purchase does not exceed 10% of the total number of shares of Offered Securities
that the Underwriters are obligated to purchase on such Closing Date, CSFBC may
make arrangements reasonably satisfactory to the
18
Selling Stockholder 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 and the Selling Stockholder 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 Company or the Selling Stockholder,
except as provided in Section 9 (provided that if such default occurs with
respect to Optional Securities after the First Closing Date, this Agreement will
not terminate as to the Firm Securities or any Optional Securities purchased
prior to such termination). 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
Selling Stockholder, AFG, the Company or their 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 Selling Stockholder, AFG, the
Company or any of their respective representatives, 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 Selling Stockholder shall remain responsible for the expenses
to be paid or reimbursed by it pursuant to Section 5 and the respective
obligations of the Company, AFG, the Selling Stockholder, 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), (v), (vi) or
(vii) of Section 6(c), the Selling Stockholder 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 faxed and confirmed to
the Representatives c/o Credit Suisse First Boston Corporation, Eleven ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Transactions Advisory Group (fax:
(▇▇▇) ▇▇▇-▇▇▇▇), or, if sent to the Company, will be mailed, delivered or faxed
and confirmed to it at , Attention: (fax: ( ) ),
or, if sent to the Selling Stockholder, will be mailed, delivered or
faxed and confirmed to at, or, if sent to AFG, will be
mailed, delivered or faxed and confirmed to at, ; provided, however, that any
notice to an Underwriter pursuant to Section 7 will be mailed, delivered or
faxed 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 officers
and directors and controlling persons referred to in Section 7, and no other
person will have any right or obligation hereunder.
12. Representation. The Representatives will act for the several
Underwriters in connection with the transactions contemplated by this Agreement,
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.
19
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
20
If the foregoing is in accordance with the Representative[s']
understanding of our agreement, kindly sign and return to the Company one of the
counterparts hereof, whereupon it will become a binding agreement among the
Selling Stockholder, the Company and the several Underwriters in accordance with
its terms.
Very truly yours,
..................................
AMERICAN PREMIER UNDERWRITERS, INC.
By.................................
Name:
Title:
[INFINITY]
By.................................
Name:
Title:
AMERICAN FINANCIAL GROUP, 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
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
BANC OF AMERICA SECURITIES LLC
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
Acting on behalf of themselves and as the
Representatives of the several Under-writers.
By CREDIT SUISSE FIRST BOSTON CORPORATION
By........................................
Name:
Title:
SCHEDULE A
NUMBER OF FIRM SECURITIES
TO BE SOLD BY NUMBER OF
FIRM SECURITIES
UNDERWRITER --------------------------- TO BE PURCHASED
----------- ---------------
Credit Suisse First Boston
Corporation.............................
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
Banc of America Securities LLC
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
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Total...........................................
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