EXHIBIT 1.1
UNDERWRITING AGREEMENT
(Trust Preferred Securities)
October 31, 2001
Torchmark Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Torchmark Capital Trust I
c/o Torchmark Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
We (the "Managers") are acting on behalf of the underwriters (including
ourselves) named below (such underwriters being herein called the
"Underwriters"), and we understand that Torchmark Capital Trust I ("Capital
Trust I"), a statutory business trust created under the Delaware Business Trust
Act, proposes to issue and sell to the several Underwriters $110,000,000
aggregate liquidation amount of 7 3/4% Trust Preferred Securities (the "Firm
Securities") of Capital Trust I.
Capital Trust I also proposes to sell to the several Underwriters not more
than an additional $16,500,000 aggregate liquidation amount of its 7 3/4% Trust
Preferred Securities (the "Additional Securities", and together with the Firm
Securities, the "Offered Securities") if and to the extent that we, as Managers
acting on behalf of the Underwriters, shall have determined to exercise the
right to purchase such Additional Securities.
It is understood that substantially contemporaneously with the closing of the
sale of the Firm Securities to the Underwriters contemplated hereby, (i) Capital
Trust I, its trustees (the "Capital Trustees") and Torchmark Corporation (the
"Company") shall enter into an Amended and Restated Declaration of Trust in
substantially the form of the Form of Amended and Restated Declaration of Trust
attached as Exhibit 4.6 to the Registration Statement referred to below (the
"Declaration of Trust"), pursuant to which Capital Trust I shall (x) issue and
sell the Offered Securities to the Underwriters pursuant hereto and (y) issue
136,083 (or up to 156,496 if the Underwriters' overallotment option is exercised
in full) shares of its Common Securities (the "Common Securities" and, together
with the Offered Securities, the "Trust Securities") to the Company, in each
case with such rights and obligations as shall be set forth in such Declaration
of Trust, (ii)
the Company and The Bank of New York, as indenture trustee,
acting pursuant to an Indenture dated as of November 2, 2001, shall provide for
the issuance of $113,402,075 (or up to $130,412,400 if the Underwriters'
overallotment option is exercised in full) principal amount of the Company's 7
3/4% Junior Subordinated Debentures due 2041 (the "Junior Subordinated
Debentures"), (iii) the Company shall sell such Junior Subordinated Debentures
to Capital Trust I, and Capital Trust I shall purchase such Junior Subordinated
Debentures with proceeds from the sale of the Offered Securities to the
Underwriters and the sale of the Common Securities to the Company contemplated
hereby and (iv) the Company and The Bank of New York, as Guarantee Trustee,
shall enter into a Preferred Securities Guarantee Agreement in substantially the
form of the Preferred Securities Guarantee Agreement attached as Exhibit 4.9 to
the Registration Statement referred to below (the "Guarantee") for the benefit
of holders from time to time of the Offered Securities. The Offered Securities
are being offered and sold pursuant to a shelf registration statement on Form S-
3 (registration no. 333-83411) (as amended to the date hereof, the "Registration
Statement") filed by the Company and Capital Trust I with the Securities and
Exchange Commission pursuant to the provisions of the Securities Act of 1933, as
amended.
Subject to the terms and conditions set forth or incorporated by reference
herein, Capital Trust I hereby agrees to sell and the Underwriters agree to
purchase, severally and not jointly, the aggregate number of Firm Securities set
forth below opposite their names at a purchase price of $25 per Firm Security
(the "Purchase Price"); provided that the Company shall pay to the Underwriters
underwriting commission equal to $.7875 per Firm Security (the "Underwriting
Commission"):
Number of
Firm Securities
Underwriter to Be Purchased
----------- ---------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated 1,126,680
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated 1,126,660
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc. 1,126,660
Banc of America Securities LLC 100,000
Banc One Capital Markets, Inc. 100,000
First Union Securities, Inc. 100,000
▇.▇. ▇▇▇▇▇▇ Securities Inc. 100,000
Quick & ▇▇▇▇▇▇, Inc. 100,000
SunTrust Capital Markets, Inc. 100,000
ABN AMRO Incorporated 20,000
BB&T Capital Markets, A division of ▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇▇▇▇, Inc. 20,000
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Number of
Firm Securities
Underwriter to Be Purchased
----------- ---------------
Bear, ▇▇▇▇▇▇▇ & Co. Inc. 20,000
BNY Capital Markets, Inc. 20,000
▇▇▇▇ ▇▇▇▇▇▇▇▇ Incorporated 20,000
Deutsche Banc Alex. ▇▇▇▇▇ Inc. 20,000
▇▇▇▇▇▇▇▇▇▇ & Co. Inc. 20,000
Gruntal & Co., L.L.C. 20,000
H&R Block Financial Advisors, Inc. 20,000
HSBC Securities (USA) Inc. 20,000
J.J.B. ▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇, Inc. 20,000
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Incorporated 20,000
McDonald Investments Inc. 20,000
▇▇▇▇▇▇ ▇▇▇▇▇▇ & Company, Inc. 20,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Associates, Inc. 20,000
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Co., Inc. 20,000
SWS Securities, Inc. 20,000
Southtrust Securities, Inc. 20,000
Sterne, Agee & ▇▇▇▇▇, Inc. 20,000
TD Securities (USA) Inc. 20,000
U.S. Bancorp ▇▇▇▇▇ ▇▇▇▇▇▇▇ Inc. 20,000
---------
Total 4,400,000
=========
Subject to the terms and conditions set forth or incorporated by reference
herein, Capital Trust I hereby agrees to sell and the Underwriters shall have a
one-time right to purchase, severally and not jointly, up to 660,000 Additional
Securities at the Purchase Price; provided that, in the event that the
Underwriters exercise such right, the Company shall pay to the Underwriters the
Underwriting Commission with respect to the Additional Securities sold. If we
elect to exercise such option, we shall so notify the Company and Capital Trust
I not later than 30 days after the date of this Agreement, which notice (the
"Option Exercise Notice") shall specify the number of Additional Securities to
be purchased by the Underwriters and the date on which such Additional
Securities are to be purchased. Such date may be the same as the Closing Date
(as defined below) but not earlier than the Closing Date nor later than ten
business days after the date of such notice. Additional Securities may be
purchased as set forth below solely for the purpose of covering overallotments
made in connection with the offering of the Firm Securities. If any Additional
Securities are to be purchased, each Underwriter agrees, severally and not
jointly, to purchase the number of Additional Securities (subject
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to such adjustments to eliminate fractional securities as we may determine) that
bears the same proportion to the total number of Additional Securities to be
purchased as the number of Firm Securities to be purchased by such Underwriter
as set forth above opposite the name of such Underwriter bears to the total
number of Firm Securities.
The Underwriters will pay for the Firm Securities upon delivery thereof at the
offices of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
at 10:00 a.m. (New York time) on November 2, 2001, or at such other time, not
later than 5:00 p.m. (New York time) on November 16, 2001, as shall be
designated by us. The time and date of such payment and delivery are
hereinafter referred to as the "Closing Date".
The Underwriters will pay for the Additional Securities upon delivery thereof
at the offices of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m. (New York time) on the date specified in the Option
Exercise Notice. The time and date of such payment and delivery are hereinafter
referred to as the "Option Closing Date".
The Offered Securities shall have the terms set forth in the Prospectus dated
November 30, 1999, and the Prospectus Supplement dated October 31, 2001,
including the following:
Terms of Offered Securities
Designation of the Offered Securities: Torchmark Capital Trust I 7 3/4% Trust
Preferred Securities
Issuer of Offered Securities: Torchmark Capital Trust I
Aggregate Number of Firm Securities: 4,400,000
Maximum Number of Additional Securities: 660,000
Price to Public: $25 per Offered Security
Purchase Price: $25 per Offered Security
Underwriting Commission per Offered
Security: $.7875 per Offered Security
Selling Concession: $.50 per Offered Security
Reallowance: $.45 per Offered Security
Closing Date: November 2, 2001
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Form: Book-entry
Ratings: S&P: BBB+
Moody's: Baa2
Other Terms:
Maturity Date: November 2, 2041, subject to acceleration
under certain circumstances to a date that
is not less than 15 years from the date of
original issuance
Liquidation Amount: $25 per Offered Security
Distributions: 7 3/4% per annum
Distribution Payment Dates: February 1, May 1, August 1, and
November 1 of each year, commencing on
February 1, 2002
Redemption: Redeemable prior to maturity at the
option of the Company (i) on or after
November 2, 2006, in whole at any time
or in part from time to time and (ii) prior
to November 2, 2006, in whole (but not in
part) at any time within 90 days following
the occurrence and continuation of a Tax
Event or an Investment Company Event,
in each case, at par, plus accumulated and
unpaid distributions
Capitalized terms used above and not defined herein shall have the meanings
set forth in the Prospectus and Prospectus Supplement referred to above.
Except as set forth below, all provisions contained in the document entitled
Underwriting Agreement Standard Provisions dated October 31, 2001 (the "Standard
Provisions") relating to the Preferred Securities of Capital Trust I (fully and
unconditionally guaranteed by the Company, based on its obligations under a
guarantee, a trust declaration and an indenture), a copy of which is attached
hereto, are herein incorporated by reference in their entirety and shall be
deemed to be a part of this Underwriting Agreement to the same extent as if such
provisions had been set forth in full herein, except that (i) if any term
defined in such document is otherwise defined herein, the definition set forth
herein shall control, (ii) all references in such document to a type of security
that is not an Offered Security or a related Junior Subordinated Debenture shall
not be deemed to be a part of this Agreement and (iii) all references in such
document to a type of agreement that has not been entered into in connection
with the transactions contemplated hereby shall not be deemed to be a part of
this Agreement.
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Please confirm your agreement by having an authorized officer sign a copy of
this Agreement in the space set forth below.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
Acting severally on behalf of themselves and
as representatives of the several
Underwriters named in the third paragraph
hereof.
By: ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇
INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Agreed and accepted:
TORCHMARK CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President, Associate Counsel
and Secretary
TORCHMARK CAPITAL TRUST I
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Regular Trustee
TORCHMARK CORPORATION
UNDERWRITING AGREEMENT
STANDARD PROVISIONS (TRUST PREFERRED SECURITIES)
October 31, 2001
From time to time, Torchmark Corporation, a Delaware corporation (the
"Company"), may, together with Torchmark Capital Trust I, a statutory business
trust created under the Delaware Business Trust Act ("Capital Trust I"), enter
into one or more underwriting agreements that provide for the sale of designated
securities to the several underwriters named therein. The standard provisions
set forth herein may be incorporated by reference in any such underwriting
agreement (an "Underwriting Agreement"). The Underwriting Agreement, including
the provisions incorporated therein by reference, is herein referred to as "this
Agreement". Unless otherwise defined herein, terms defined in the Underwriting
Agreement are used herein as therein defined.
Capital Trust I proposes to issue Preferred Securities ("Preferred
Securities") pursuant to the provisions of the Declaration of Trust (as defined
below). Such Preferred Securities will be guaranteed by the Company to the
extent described in the Prospectus (as defined below) with respect to
distributions and amounts payable upon liquidation or redemption pursuant to a
Preferred Securities Guarantee Agreement to be dated as of the Closing Date (as
defined below) executed and delivered by the Company and The Bank of New York,
as Guarantee Trustee (the "Guarantee Trustee"), for the benefit of the holders
from time to time of the Preferred Securities (the "Guarantee").
If Capital Trust I issues Preferred Securities, it will use the proceeds
from the sale of the Preferred Securities and the sale of Common Securities (as
defined below) to purchase from the Company an aggregate principal amount of its
7 3/4% Junior Subordinated Debentures due 2041 (the "Junior Subordinated
Debentures") equal to the aggregate liquidation amount of the Preferred
Securities and Common Securities issued by Capital Trust I pursuant to a
Debenture Purchase Agreement to be dated as of the Closing Date (the "Debenture
Purchase Agreement"). The Junior Subordinated Debentures will be issued under
an Indenture to be dated as of November 2, 2001 between the Company and The Bank
of New York, as trustee (the "Indenture Trustee") (as amended and supplemented
from time to time, the "Indenture"). With respect to the issuance of Preferred
Securities by Capital Trust I, the Company will also be the holder of one
hundred percent of the common securities representing undivided beneficial
interests in the assets of Capital Trust I (the "Common Securities" and,
together with the Preferred Securities, the "Trust Securities"), which shall be
issued pursuant to a Subscription Agreement to be dated as of the Closing Date
(the "Subscription Agreement").
Capital Trust I has been created under Delaware law pursuant to the filing
of a Certificate of Trust (the "Certificate of Trust") with the Secretary of
State of the State of Delaware, and will be governed by an Amended and Restated
Declaration of Trust (the "Declaration of Trust") among the Company, as
2
sponsor, The Bank of New York, as Property Trustee (the "Property Trustee"), The
Bank of New York (Delaware), as Delaware Trustee (the "Delaware Trustee"), and
three individuals who have been selected by the Company, as sponsor. The
Company, as sponsor, has appointed the Property Trustee, the Delaware Trustee
and three individuals who are officers of or affiliated with the Company to act
as administrators with respect to Capital Trust I (the "Regular Trustees" and,
together with the Property Trustee and the Delaware Trustee, the "Capital
Trustees"). The Bank of New York, as Property Trustee, will act as indenture
trustee for purposes of the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement including a prospectus or prospectuses
relating to the Preferred Securities and the Guarantee (collectively the
"Securities") and will file with the Commission a prospectus supplement or
supplements specifically relating to any Preferred Securities pursuant to Rule
424 under the Securities Act of 1933, as amended (the "Securities Act"). The
term "Registration Statement" means the registration statement as amended to the
date of the Underwriting Agreement. The term "Basic Prospectus" means the
prospectus included in the Registration Statement. The term "Prospectus" means
the Basic Prospectus together with the prospectus supplement (other than a
preliminary prospectus supplement) specifically relating to the Preferred
Securities as filed with the Commission pursuant to Rule 424. The term
"preliminary prospectus" means a preliminary prospectus supplement specifically
relating to the Preferred Securities together with the Basic Prospectus. As used
herein, the terms "Registration Statement", "Basic Prospectus", "Prospectus" and
"preliminary prospectus" shall include in each case the material, if any,
incorporated by reference therein.
The term "Firm Underwriters' Securities" means the Preferred Securities to
be purchased by the Underwriters herein. The term "Additional Underwriters'
Securities" means the additional Preferred Securities, if any, that the
Underwriters will have the right to purchase, severally and not jointly, solely
for the purpose of covering over-allotments made in connection with the offering
of the Firm Underwriters' Securities. The Firm Underwriters' Securities and the
Additional Underwriters' Securities are referred to herein as the "Underwriters'
Securities".
The Company and the Underwriters agree as follows:
1. Public Offering. The Company is advised by the Manager that the
---------------
Underwriters propose to make a public offering of their respective portions of
the Preferred Securities as soon after this Agreement is entered into as in the
3
Manager's judgment is advisable. The terms of the public offering of the
Underwriters' Securities are set forth in the Prospectus.
2. Payment and Delivery. Payment for the Underwriters' Securities
--------------------
shall be made by payment in full of the requisite amount of funds specified in
the Underwriting Agreement and in accordance with the procedures set forth in
the Underwriting Agreement, upon delivery to the Manager for the respective
accounts of the several Underwriters of the Underwriters' Securities registered
in such names and in such denominations as the Manager shall request in writing
not less than two full business days prior to the date of delivery. The time
and date of such payment and delivery with respect to the Firm Underwriters'
Securities are herein referred to as the "Closing Date". The time and date of
such payment and delivery with respect to the Additional Underwriters'
Securities are herein referred to as the "Option Closing Date".
3. Conditions of Underwriters' Obligations. The several obligations of
---------------------------------------
the Underwriters hereunder are subject to the accuracy of the representations
and warranties on the part of the Company and Capital Trust I herein on and as
of the Closing Date and, if applicable, the Option Closing Date, to the
performance by the Company and Capital Trust I of their obligations hereunder
and to the following additional conditions precedent:
(a) Subsequent to the execution and delivery of the Underwriting Agreement
and prior to the Closing Date and, if applicable, the Option Closing Date,
(i) (1) the Preferred Securities shall have been assigned at least the
ratings by the rating agencies set forth in the applicable Underwriting
Agreement, and, on the Closing Date, the Company shall have delivered to the
Manager a letter dated the Closing Date, from each such rating agency, or other
evidence satisfactory to the Manager, confirming that the Preferred Securities
have such ratings; and (2) there shall not have occurred any downgrading, nor
shall any notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction of the
possible change, in the rating accorded the Preferred Securities or any of the
Company's or Capital Trust I's securities by any "nationally recognized
statistical rating organization", as such term is defined for purposes of Rule
436(g)(2) under the Securities Act;
(ii) no stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceedings for such purpose shall be
pending before or threatened by the
4
Commission and there shall have been no material adverse change in the condition
of the Company and its subsidiaries, taken as a whole, from that set forth in
the Registration Statement and the Prospectus (exclusive of any amendments or
supplements thereto subsequent to the date of the Underwriting Agreement);
(iii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise, or in
the earnings, business, operations or prospects of the Company and its
subsidiaries, taken as a whole, from that set forth in the Prospectus (exclusive
of any amendments or supplements thereto subsequent to the date of the
Underwriting Agreement) that, in the Manager's reasonable judgment, is material
and adverse and that makes it, in the Manager's reasonable judgment,
impracticable to market the Preferred Securities on the terms and in the manner
contemplated in the Prospectus; and
(iv) the Manager shall have received on the Closing Date and, if
applicable, the Option Closing Date, (1) a certificate, dated the Closing Date
or the Option Closing Date, as the case may be, and signed by an executive
officer of the Company, or any other person authorized by the Board of Directors
of the Company to execute any such written statement (an "Executive Officer"),
and (2) a certificate, dated the Closing Date or the Option Closing Date, as the
case may be, and signed by a Regular Trustee of Capital Trust I,
(A) to the effect set forth in Sections 3(a)(i)(2) and 3(a)(ii) hereof (in
the case of the certificate signed by an Executive Officer of the Company); and
(B) to the effect that the representations and warranties of the Company
and Capital Trust I contained in this Agreement are true and correct as of the
Closing Date or the Option Closing Date, as the case may be, and that each of
the Company and Capital Trust I, as applicable, has complied with all of the
agreements and satisfied all of the conditions on its part to be performed or
satisfied on or before the Closing Date or the Option Closing Date, as the case
may be.
The Executive Officer and the Regular Trustee signing and delivering such
certificate may rely upon the best of his or her knowledge as to proceedings
threatened.
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(b) The Manager shall have received on the Closing Date and, if
applicable, the Option Closing Date, an opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Vice
President, Associate Counsel and Secretary for the Company, dated the Closing
Date or the Option Closing Date, as the case may be, in substantially the form
set forth as Exhibit A.
(c) The Manager shall have received on the Closing Date and, if
applicable, the Option Closing Date, an opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇, P.C.,
special counsel for the Company, dated the Closing Date or the Option Closing
Date, as the case may be, in substantially the form set forth as Exhibit B.
(d) The Manager shall have received on the Closing Date and, if
applicable, the Option Closing Date, an opinion of Morris, Nichols, Arsht &
▇▇▇▇▇▇▇, special Delaware counsel for the Company, dated the Closing Date or the
Option Closing Date, as the case may be, to the effect set forth in Exhibit C.
(e) The Manager shall have received on the Closing Date and, if
applicable, the Option Closing Date, an opinion of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel for the Underwriters, dated the Closing Date or the Option Closing Date,
as the case may be, in substantially the form set forth as Exhibit D.
(f) The Manager shall have received (i) on the date of the Underwriting
Agreement a letter dated such date, (ii) on the Closing Date a letter dated the
Closing Date and, (iii) if applicable, on the Option Closing Date a letter dated
the Option Closing Date, in each case in form and substance satisfactory to the
Manager, from the independent public accountants of the Company, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information contained or incorporated by reference in the
Registration Statement and the Prospectus.
(g) On the Closing Date and, if applicable, the Option Closing Date, the
Preferred Securities shall have been approved for listing on the New York Stock
Exchange, subject to official notice of issuance, and the Manager shall have
received evidence satisfactory to it of such approval.
4. Certain Covenants of the Company and Capital Trust I. In further
----------------------------------------------------
consideration of the agreements of the Underwriters contained in this Agreement,
each of the Company and Capital Trust I covenants as follows:
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(a) To furnish the Manager, without charge, as many copies of the
Registration Statement, including exhibits and materials, if any, incorporated
by reference therein and, during the period mentioned in paragraph (c) below,
the Prospectus, any documents incorporated by reference therein and any
supplements and amendments thereto or to the Registration Statement, as the
Manager may reasonably request. The terms "supplement" and "amendment" or
"amend" as used in this Agreement with respect to the Registration Statement,
Prospectus or preliminary prospectus shall include all documents filed by the
Company with the Commission subsequent to the date of the Basic Prospectus,
pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), which are deemed to be incorporated by reference in the Prospectus.
(b) Before amending or supplementing the Registration Statement or the
Prospectus with respect to the Preferred Securities, to furnish the Manager a
copy of each such proposed amendment or supplement and not to file any such
proposed amendment or supplement to which the Manager reasonably objects
promptly after reasonable notice thereof.
(c) If, during such period after the commencement of the public offering
of the Preferred Securities as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered with respect thereto, any
event shall occur or condition exist as a result of which the Prospectus as then
amended or supplemented would include any untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances then existing, not misleading, or if it is necessary
to amend or supplement the Prospectus to comply with law, forthwith at its own
expense, to amend or to supplement the Prospectus and to furnish such amendment
or supplement to the Underwriters, so as to correct such statement or omission
or effect such compliance.
(d) To qualify the Preferred Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Manager shall
reasonably request and to pay all reasonable expenses (including fees and
disbursements of counsel) in connection with such qualification.
(e) To make generally available to the Company's security holders as soon
as practicable an earnings statement of the Company covering a twelve month
period beginning after the date of the
7
Underwriting Agreement (but in no event commencing later than 90 days after such
date), which shall satisfy the provisions of Section 11(a) of the Securities Act
and the rules and regulations of the Commission thereunder and to advise the
Manager in writing when such statement has been made available.
(f) During a period of 90 days from the date of the Underwriting
Agreement, without the prior written consent of the Manager, on behalf of the
Underwriters, not to offer, sell, contract to sell, grant any option for the
sale of, or otherwise dispose of, any Preferred Securities or Junior
Subordinated Debentures, any other beneficial interests of Capital Trust I or
any securities of the Company that are substantially similar to the Preferred
Securities or Junior Subordinated Debentures, including the Guarantee, and
including, but not limited to, any securities that are convertible into or
exercisable or exchangeable for or that represent the right to receive Preferred
Securities or Junior Subordinated Debentures or any such substantially similar
securities of either Capital Trust I or the Company (other than the Junior
Subordinated Debentures and the Preferred Securities offered hereby).
(g) Whether or not any sale of Preferred Securities is consummated, to pay
or cause to be paid all expenses incident to the performance of the obligations
of the Company and Capital Trust I under the Underwriting Agreement, including,
without limitation: (i) the preparation and filing of the Registration
Statement and the Prospectus and all amendments and supplements thereto, (ii)
the preparation, issuance and delivery of the Preferred Securities, (iii) the
fees and disbursements of the Company's counsel and accountants, of Capital
Trust I's counsel and of the Capital Trustees and their counsel, (iv) the
qualification of the Securities under securities or Blue Sky laws in accordance
with the provisions of Section 4 hereof, including filing fees and the fees and
disbursements of counsel for the Underwriters in connection therewith and in
connection with the printing or producing and delivery of any Blue Sky or legal
investment memoranda, (v) the printing and delivery to the Underwriters in
quantities as hereinabove stated of copies of the Registration Statement and all
amendments thereto and of the Prospectus and any amendments or supplements
thereto, (vi) the filing fees incident to, and the fees and disbursements of
counsel to the Underwriters in connection with, the review, if any, by the
National Association of Securities Dealers, Inc. (the "NASD") of the terms of
the sale of the Preferred Securities, (vii) any fees charged by rating agencies
for the rating of the Preferred Securities and (viii) all costs and expenses, if
any, incident to listing the Preferred Securities on the New York Stock
Exchange.
8
5. Representations and Warranties of the Company. Each of the Company
---------------------------------------------
and Capital Trust I, jointly and severally, represents and warrants to each
Underwriter that: (a) (i) each document filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or will
comply when so filed in all material respects with the Exchange Act and the
applicable rules and regulations thereunder, (ii) the Registration Statement and
the Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and the applicable rules
and regulations thereunder, (iii) each part of the Registration Statement
(including the documents incorporated reference therein), filed with the
Commission pursuant to the Securities Act relating to the Preferred Securities,
when such part became effective, did not contain and each such part, as amended
or supplemented, if applicable, will not contain any untrue statement of
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iv) the Prospectus,
as of its date, did not contain and, as amended or supplemented, if applicable,
will not contain any untrue statement of a material fact or omit 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; except that the
above representations and warranties do not apply to statements or omissions in
the Registration Statement or the Prospectus based upon information furnished to
the Company and Capital Trust I in writing by any Underwriter expressly for use
therein or to that part of the Registration Statement that constitutes the
Statement of Eligibility and Qualification (Form T-1) under the Trust Indenture
Act of the trustees referred to in the Registration Statement.
(b) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware, has all
requisite corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and is duly qualified
to transact business and is in good standing in each jurisdiction in which the
conduct of its business or its ownership or leasing of property requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a material adverse effect on the Company and its
subsidiaries, taken as a whole.
(d) Each "significant subsidiary" (within the meaning of Rule 1-02 under
Regulation S-X promulgated by the Commission) (the
9
"Significant Subsidiaries") of the Company has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has all requisite corporate power and
authority to own, lease and operate its properties and to conduct its business
as described in the Prospectus and is duly qualified to transact business and is
in good standing in each jurisdiction in which the conduct of its business or
its ownership or leasing of property requires such qualification, except to the
extent that the failure to be so qualified or be in good standing would not have
a material adverse effect on the Company and its subsidiaries, taken as a whole;
all of the issued shares of capital stock of each Significant Subsidiary of the
Company have been duly and validly authorized and issued, are fully paid and
non-assessable and are owned directly or indirectly by the Company, free and
clear of all liens, encumbrances, equities or claims.
(e) Each of the Company and its Significant Subsidiaries engaged in the
business of insurance are duly organized and licensed as insurance companies or
insurance holding companies, as the case may be, in their respective
jurisdictions of incorporation (if so required) and, in the case of the Company,
each other jurisdiction where it is required to be so licensed or authorized to
conduct its business, and, in the case of the Significant Subsidiaries engaged
in the business of insurance, each other jurisdiction in which such Significant
Subsidiary has written 5% or more of the total amount of premiums written by it
during each of the last two calendar years, except for any such jurisdictions in
which the failure to be so licensed or authorized would not have a material
adverse effect on the Company and its subsidiaries, taken as a whole; neither
the Company nor any Significant Subsidiary engaged in the business of insurance
has received any notification from any insurance regulatory authority to the
effect that any additional authorization, approval, order, consent, license,
certificate, permit, registration or qualification from such insurance
regulatory authority is needed to be obtained by the Company or any such
Significant Subsidiary in any case where it would be reasonably expected that
failure to obtain any such additional authorization, approval, order, consent,
license, certificate, permit, registration or qualification would have a
material adverse effect on the Company and its subsidiaries, taken as a whole.
(f) Capital Trust I has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, is a
"grantor trust" for United States federal income tax purposes, has the power and
authority to conduct its business as presently conducted and as
10
described in the Prospectus and is not required to be authorized to do business
in any other jurisdiction.
(g) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company and Capital Trust I.
(h) The Indenture has been duly qualified under the Trust Indenture Act
and has been duly authorized by the Company and, upon execution and delivery
thereof by the Company (and assuming due authorization, execution and delivery
by the Indenture Trustee), will, as of the Closing Date, be a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms except as (i) the enforceability thereof may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, liquidation, moratorium and
other similar laws affecting creditors' rights generally and (ii) is subject to
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(i) The Guarantee has been duly qualified under the Trust Indenture Act
and has been duly authorized by the Company and, upon execution and delivery
thereof by the Company (and assuming due authorization, execution and delivery
by the Guarantee Trustee), will, as of the Closing Date, be a valid and binding
agreement of the Company, enforceable against the Company in accordance with its
terms except as the enforceability thereof (i) may be limited by bankruptcy,
insolvency, fraudulent transfer, reorganization, liquidation, moratorium and
other similar laws affecting creditors' rights generally and (ii) is subject to
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.
(j) The Declaration of Trust has been duly qualified under the Trust
Indenture Act and has been duly authorized by the Company and, upon execution
and delivery thereof by the Company (and assuming due authorization, execution
and delivery thereof by each party thereto other than the Company), will, as of
the Closing Date, be a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms except as the enforceability
thereof (i) may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, liquidation, moratorium and other similar laws affecting
creditors' rights generally and (ii) is subject to general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law.
11
(k) Each of the Debenture Purchase Agreement and the Subscription
Agreement has been duly authorized by the Company and Capital Trust I and, upon
execution and delivery thereof by the Company and Capital Trust I, will, as of
the Closing Date, be a valid and binding agreement of each of the Company and
Capital Trust I, enforceable against each of the Company and Capital Trust I in
accordance with its terms except as the enforceability thereof (i) may be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
liquidation, moratorium and other similar laws affecting creditors' rights
generally and (ii) is subject to general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
(l) The Preferred Securities have been duly authorized by the Declaration
of Trust and, when executed and authenticated in accordance with the provisions
of the Declaration of Trust and delivered to and paid for by the Underwriters in
accordance with the terms of the Underwriting Agreement, will be validly issued
and (subject to the terms of the Declaration of Trust) fully paid and non-
assessable undivided beneficial interests in the assets of Capital Trust I, and
the issuance of such Preferred Securities will not be subject to any preemptive
or similar rights. Holders of the Preferred Securities will be entitled to the
same limitation of personal liability as that extended to stockholders of
private corporations for profit organized under the General Corporation Law of
the State of Delaware. The Common Securities have been duly authorized by the
Declaration of Trust and, when issued and executed in accordance with the
provisions of the Declaration of Trust and delivered to the Company against
payment therefor as set forth in the Subscription Agreement, will be validly
issued undivided beneficial interests in the assets of Capital Trust I, and the
issuance of such Common Securities will not be subject to any preemptive rights.
(m) The Junior Subordinated Debentures have been duly authorized and, when
executed and authenticated in accordance with the provisions of the Indenture,
and delivered to and paid for by Capital Trust I in accordance with the terms of
the Debenture Purchase Agreement, will be entitled to the benefits of the
Indenture, and will be valid and legally binding obligations of the Company,
enforceable against the Company in accordance with their terms and entitled to
the benefits of the Indenture, except as the enforceability thereof (i) may be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
liquidation, moratorium and other similar laws affecting creditors' rights
generally and (ii) is subject to general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law.
12
(n) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, the Underwriting Agreement, the Indenture,
the Declaration of Trust, the Guarantee, the Subscription Agreement, the
Debenture Purchase Agreement and the Junior Subordinated Debentures and the
issuance and sale of the Preferred Securities as contemplated in the
Underwriting Agreement will not contravene any provision of applicable law or
the certificate of incorporation or by-laws of the Company or any agreement or
other instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any judgment,
order or decree of any governmental body, agency or court having jurisdiction
over the Company or any subsidiary, and no consent, approval, authorization or
order of, or qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under the Underwriting
Agreement, the Indenture, the Declaration of Trust, the Guarantee, the
Subscription Agreement, the Debenture Purchase Agreement and the Junior
Subordinated Debentures except such as have been obtained or may be required by
the securities or Blue Sky laws of the various states in connection with the
offer and sale of the Preferred Securities.
(o) The execution and delivery by Capital Trust I of, and the performance
by Capital Trust I of its obligations under, the Underwriting Agreement, the
Subscription Agreement, the Debenture Purchase Agreement and the Trust
Securities will not contravene any provision of applicable law or the
Declaration of Trust or any agreement or other instrument binding upon Capital
Trust I that is material to Capital Trust I, or any judgment, order or decree of
any governmental body, agency or court having jurisdiction over Capital Trust I,
and no consent, approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by Capital Trust I
of its obligations under the Underwriting Agreement, the Subscription Agreement,
the Debenture Purchase Agreement and the Trust Securities, except such as have
been obtained or may be required by the securities or Blue Sky laws of the
various states in connection with the offer and sale of the Preferred
Securities.
(p) Capital Trust I is not in violation of the Declaration of Trust or the
Certificate of Trust; neither the Company nor any Significant Subsidiary is in
violation of its certification of incorporation or by-laws; none of Capital
Trust I, the Company or any Significant Subsidiary is in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed
13
of trust, loan or credit agreement, note, lease or other agreement or instrument
to which it is a party or by which it or any of its properties may be bound,
except for such defaults that will not have a material adverse effect on the
Company and its subsidiaries, taken as a whole.
(q) There has not occurred any material adverse change, or any development
involving a prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business, operations or prospects of the Company
and its subsidiaries, taken as a whole, from that set forth in the Prospectus
(exclusive of any amendments or supplements thereto subsequent to the date of
the Underwriting Agreement).
(r) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Securities Act, complied when so filed in all
material respects with the Securities Act and the applicable rules and
regulations of the Commission thereunder.
(s) There are no legal or governmental proceedings pending or threatened
to which Capital Trust I or the Company or any of its subsidiaries is a party or
to which any of the properties of Capital Trust I or the Company or any of its
subsidiaries is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or any statutes,
regulations, contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement that are not described or filed as required.
(t) Each of the Company and Capital Trust I is not and, after giving
effect to the offering and sale of the Preferred Securities and the application
of the proceeds thereof as described in the Prospectus, will not be, required to
register as an "investment company" as such term is defined in the Investment
Company Act of 1940, as amended.
(u) The Company and its subsidiaries (i) are in compliance with any and
all applicable foreign, federal, state and local laws and regulations relating
to the protection of human health and safety, the environment or hazardous or
toxic substances or wastes, pollutants or contaminants ("Environmental Laws"),
(ii) have received all permits, licenses or other approvals required of them
under applicable Environmental Laws to conduct their respective businesses and
(iii) are in compliance with all terms and conditions of any such permit,
license or approval, except where such noncompliance with Environmental Laws,
failure to receive required
14
permits, licenses or other approvals or failure to comply with the terms and
conditions of such permits, licenses or approvals would not, singly or in the
aggregate, have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(v) There are no costs or liabilities associated with Environmental Laws
(including, without limitation, any capital or operating expenditures required
for clean-up, closure of properties or compliance with Environmental Laws or any
permit, license or approval, any related constraints on operating activities and
any potential liabilities to third parties) which would, singly or in the
aggregate, have a material adverse effect on the Company and its subsidiaries,
taken as a whole.
(w) Deloitte & Touche LLP, and, with respect to the financial statements
and supporting schedules for the year ended December 31, 1998, KPMG LLP, the
accountants who certified the financial statements and supporting schedules
included in or incorporated by reference in the Registration Statement and the
Prospectus are independent public accountants as required by the Securities Act
and the rules and regulations of the Commission thereunder.
6. Indemnification and Contribution. (a) Each of the Company and Capital
--------------------------------
Trust I, jointly and severally, agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls such Underwriter within the
meaning of either Section 15 of the Securities Act or Section 20 of the Exchange
Act from and against any and all losses, claims, damages, liabilities and any
amounts paid in settlements caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company or Capital Trust I shall have furnished any
amendments or supplements thereto), or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except to the extent
that such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information furnished in writing to the Company and Capital Trust I by any
Underwriter expressly for use therein; provided, however, that the foregoing
-------- -------
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased Preferred Securities, or any
person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company or Capital Trust I shall have furnished
any amendments or supplement
15
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Preferred Securities to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages or liabilities, unless such failure is the
result of noncompliance by the Company with Section 4(a) hereof.
(b) Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless Capital Trust I, the Capital Trustees, the Company, its directors,
its officers who sign the Registration Statement and any person controlling
Capital Trust I or the Company to the same extent as the foregoing indemnity
from the Company and Capital Trust I to each Underwriter, but only with
reference to information relating to such Underwriter furnished to the Company
and Capital Trust I in writing by such Underwriter expressly for use in the
Registration Statement, any preliminary prospectus or the Prospectus or any
amendments or supplements thereto.
(c) If any proceeding (including any government investigation) shall be
instituted involving any person in respect of which indemnity may be sought
pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm (in addition to any local counsel) for all such indemnified
parties, and that all such fees and expenses shall be paid as they are incurred.
Such firm shall be designated in writing by the Manager in the case of parties
indemnified pursuant to the second
16
preceding paragraph and by the Company and Capital Trust I in the case of
parties indemnified pursuant to the immediately preceding paragraph. The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment.
(d) If the indemnification provided for in this Section 6 is unavailable
to an indemnified party under Section 6(a) or 6(b) in respect of any losses,
claims, damages or liabilities referred to therein, then each indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or liabilities (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and Capital Trust I on the
one hand and the Underwriters on the other from the offering of the Preferred
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 and Capital Trust I on the one hand and of 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 and
Capital Trust I on the one hand and the Underwriters on the other in connection
with the offering of the Preferred Securities shall be deemed to be in the same
proportion as the total net proceeds from the offering of such Preferred
Securities (before deducting expenses) received by the Company and Capital Trust
I bear to the total underwriting discounts and commissions received by the
Underwriters in respect thereof. The relative fault of the Company and Capital
Trust I on the one hand and of the Underwriters on the other 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 and Capital Trust I
or by the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
(e) The Company, Capital Trust I and the Underwriters agree that it would
not be just and equitable if contribution pursuant to this Section 6 were
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation which does not
take account of the considerations referred to in
17
the immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and liabilities
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 6, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Preferred Securities
underwritten and distributed to the public by such Underwriter 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 Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriter's obligations to contribute
pursuant to this Section 6 are several, in proportion to the respective
principal amounts of Preferred Securities purchased by each of such
Underwriters, and not joint.
(f) The indemnity and contribution agreements contained in this Section 6
and the representations and warranties of the Company in this Agreement shall
remain operative and in full force and affect regardless of (i) any termination
of this Agreement, (ii) any investigation made by any Underwriter or on behalf
of any Underwriter or any person controlling any Underwriter or buyer on behalf
of Capital Trust I, the Company, its directors or officers or any person
controlling the Company or Capital Trust I and (iii) acceptance of and payment
for any of the Preferred Securities.
7. Termination in Certain Events. This Agreement, and with respect to
-----------------------------
the Option Closing Date, the obligations of the Underwriters to purchase and of
Capital Trust I to sell, the Additional Underwriters' Securities to be purchased
and sold on the Option Closing Date, shall be subject to termination in the
absolute discretion of the Manager, by notice given to the Company and Capital
Trust I, if (a) after the execution and delivery of this Agreement and prior to
the Closing Date or the Option Closing Date, as the case may be, (i) trading
generally shall have been suspended or materially limited on the New York Stock
Exchange or on any other exchange on which the Preferred Securities are listed,
(ii) a general moratorium on commercial banking activities in the State of New
York shall have been declared by either Federal or New York State authorities,
(iii) trading of any securities of or guaranteed by the Company or Capital Trust
I shall have been suspended on any exchange or in any over-the-counter market,
(iv) a material
18
disruption has occurred in commercial banking or securities settlement or
clearance services in the United States or (v) there shall have occurred any
material adverse change in the financial markets, material outbreak or
escalation of hostilities or other national or international calamity or crisis
of such magnitude and severity in its effect on the financial markets of the
United States and (b) such event singly or together with any other such event
makes it, in the reasonable judgment of the Manager, impracticable to market the
Preferred Securities on the terms and in the manner contemplated in the
Prospectus.
8. Defaulting Underwriters. If, on the Closing Date or the Option
-----------------------
Closing Date, as the case may be, any one or more of the Underwriters shall
default in its or their obligations to take up and pay for the Preferred
Securities or otherwise fail or refuse to purchase Preferred Securities which it
or they have agreed to purchase hereunder on such date, and the aggregate number
of Preferred Securities which such defaulting Underwriter or Underwriters agreed
but failed or refused to purchase is not more than one-tenth of the aggregate
number of the Preferred Securities to be purchased on such date, the non-
defaulting Underwriters may make arrangements satisfactory to the Company and
the non-defaulting Underwriters for the purchase of such Preferred Securities,
but if no such arrangements are made, the non-defaulting Underwriters shall be
obligated severally in the proportions which the aggregate number of Preferred
Securities set forth opposite their names in the Underwriting Agreement bear to
the aggregate number of Preferred Securities set forth opposite the names of all
such non-defaulting Underwriters, or in such other proportions as the Manager
may specify, to purchase the Underwriters' Securities which such defaulting
Underwriter or Underwriters agreed but failed or refused to purchase on such
date; provided that in no event shall the aggregate number of Preferred
--------
Securities which any non-defaulting Underwriter has agreed to purchase pursuant
to the Underwriting Agreement be increased pursuant to this paragraph by an
amount in excess of one-ninth of such number of Preferred Securities without the
written consent of such non-defaulting Underwriter. In any such case either the
Manager or the Company shall have the right to postpone the Closing Date, or the
Option Closing Date, as the case may be, but in no event for longer than seven
days, in order that the required changes, if any, in the Registration Statement
and in the Prospectus or in any other documents or arrangements may be effected.
If any Underwriter or Underwriters shall fail or refuse to purchase Preferred
Securities and the aggregate number of Preferred Securities with respect to
which such default occurs is more than one-tenth of the aggregate number of the
Preferred Securities, and arrangements satisfactory to the Manager and the
Company for the purchase of such Preferred Securities are not made within 36
hours after such default, this Agreement, or with respect to the Option Closing
Date, the obligations of the Underwriters to purchase and of Capital Trust I to
sell, the Additional Underwriters' Securities to be purchased and sold on the
Option
19
Closing Date, will terminate without liability on the part of any non-defaulting
Underwriter or of the Company. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
9. Reimbursement of Underwriters' Expenses. If this Agreement shall be
---------------------------------------
terminated by the Underwriters or any of them because of any failure or refusal
on the part of the Company or Capital Trust I to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason the
Company or Capital Trust I shall be unable to perform its obligations under this
Agreement, the Company and Capital Trust I jointly and severally agree to
reimburse the Underwriters or such Underwriters as have so terminated this
Agreement, with respect to themselves, severally, for all out-of-pocket expenses
(including the fees and disbursements of their counsel itemized in detail
reasonably satisfactory to the Company) reasonably incurred by such Underwriters
in connection with the Preferred Securities.
10. Counterparts. This Agreement may be signed in any number of
------------
counterparts, each of which shall be an original, with the same affect as if the
signatures thereto and hereto were upon the same instrument.
11. Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of New York.
12. Parties In Interest. This Agreement has been and is made solely
-------------------
for the benefit of the Underwriters, the Company and Capital Trust I, and the
controlling persons, directors and officers referred to in Section 6 hereof, and
their respective successors, assigns, executors and administrators. No other
person shall acquire or have any right under or by virtue of this Agreement.
13. Section Headings. The Section headings in this Agreement have been
----------------
inserted as a matter of convenience of reference and are not a part of this
Agreement.
20
EXHIBIT A
FORM OF OPINION OF ▇▇▇▇▇ ▇. ▇▇▇▇▇, ESQ.
VICE PRESIDENT, ASSOCIATE COUNSEL AND SECRETARY
FOR THE COMPANY
[Date]
[Names and Addresses of Managers]
Dear Ladies and Gentlemen:
I am Vice President, Associate Counsel and Secretary of Torchmark
Corporation, a Delaware corporation (the "Company"), and, as such, have served
as counsel for the Company in connection with the issuance and sale to the
several Underwriters named in the Underwriting Agreement dated October 31, 2001,
(the "Underwriting Agreement") of $110,000,000 in liquidation amount of 7 3/4%
Trust Preferred Securities (liquidation amount $25 per Preferred Security) (the
"Preferred Securities") of Torchmark Capital Trust I, a Delaware business trust
(the "Trust") to be issued pursuant to the Declaration (as defined below).
Terms used in this opinion and not otherwise defined have the same meanings as
in the Underwriting Agreement.
In connection with the issuance of the Preferred Securities, the Trust is
also issuing $3,402,075 in liquidation amount of its Common Securities
(liquidation amount $25 per Common Security) (the "Common Securities"),
representing undivided beneficial interests in the assets of the Trust. The
entire proceeds from the sale of the Preferred Securities and the Common
Securities (collectively, the "Trust Securities") are to be used by the Trust to
purchase $113,402,075 aggregate principal amount of 7 3/4% Junior Subordinated
Debentures due 2041 of the Company (the "Junior Subordinated Debentures"). The
Junior Subordinated Debentures are to be issued pursuant to an indenture, dated
as of November 2, 2001, between the Company and The Bank of New York, as
indenture trustee, and an Officer's Certificate, dated as of such date and
issued pursuant thereto (collectively, the "Indenture").
The Trust Securities are being issued pursuant to the amended and restated
declaration of trust of the Trust, dated as of November 2, 2001 (the
"Declaration"), among the Company, as sponsor, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
and ▇▇▇▇ ▇▇▇▇▇▇▇, as regular trustees (the "Regular Trustees"), The Bank of New
York (Delaware), as Delaware trustee (the "Delaware Trustee"), The Bank of New
York, as property trustee (the "Property Trustee") and the
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holders from time to time of undivided beneficial interests in the assets of the
Trust.
The Preferred Securities are to be guaranteed by the Company with respect
to distributions and payments upon liquidation, redemption and otherwise
pursuant to and to the extent set forth in the Preferred Securities Guarantee
Agreement, dated as of November 2, 2001, between the Company and The Bank of New
York, as guarantee trustee (the "Guarantee").
I am familiar with and have examined such documents and records as I deemed
necessary to render this opinion, including the Underwriting Agreement, the
Indenture, the Declaration, the Guarantee, the Subscription Agreement, the
Debenture Purchase Agreement and the Junior Subordinated Debentures.
In my examination I have assumed but have not independently verified the
genuineness of all signatures on all documents examined by me, the conformity to
original documents of all documents submitted to us as certified or facsimile
copies and the authenticity of all such documents.
Based on the foregoing, and subject to the qualifications hereinafter set
forth, I am of the opinion that:
(i) the Company (1) has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to own, lease and operate its properties
and to conduct its business as described in the Prospectus and (2) is duly
qualified to transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect on the
Company and its subsidiaries, taken as a whole;
(ii) each of Liberty National Life Insurance Company, Globe Life And
Accident Insurance Company, United American Insurance Company, United Investors
Life Insurance Company and American Income Life Insurance Company (collectively
the "Designated Subsidiaries"), (1) has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the jurisdiction of
its incorporation and has all requisite corporate power and authority to own,
lease and operate its properties and to conduct its business as described in the
Prospectuses and (2) is duly qualified to transact business and is in good
standing in each jurisdiction in which the conduct of its business or its
ownership or leasing
A-2
of property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on the Company and its subsidiaries, taken as a whole; all of the issued
shares of capital stock of each such Designated Subsidiary have been duly and
validly authorized and issued, are fully paid and nonassessable and are owned
directly or indirectly by the Company free and clear of any all liens,
encumbrances, equities or claims;
(iii) each Designated Subsidiary is duly qualified and/or licensed to
transact the business of insurance and is in good standing in each jurisdiction
in which, during either of the last two calendar years, it wrote five percent
(5%) or more of the total premiums written by it;
(iv) the execution and delivery by the Company of, and the performance by
the Company of its obligations under, the Underwriting Agreement, the Indenture,
the Declaration, the Guarantee, the Subscription Agreement, the Debenture
Purchase Agreement and the Junior Subordinated Debentures and the issuance and
sale of the Preferred Securities as contemplated in the Underwriting Agreement,
will not contravene any provision of applicable law or the certificate of
incorporation or by-laws of the Company or, to my knowledge, any agreement or
other instrument binding upon the Company or any of its subsidiaries that is
material to the Company and its subsidiaries, taken as a whole, or any judgment,
order or decree of any governmental body, agency or court having jurisdiction
over the Company or any subsidiary, and no consent, approval, authorization or
order of, or qualification with, any governmental body or agency is required for
the performance by the Company of its obligations under the Underwriting
Agreement, the Indenture, the Declaration, the Guarantee, the Subscription
Agreement, the Debenture Purchase Agreement and the Junior Subordinated
Debentures except such as have been obtained or may be required by the
securities or Blue Sky laws of the various states in connection with the offer
and sale of the Preferred Securities;
(v) after due inquiry, I do not know of any legal or governmental
proceedings pending or threatened to which the Company or any of its
subsidiaries is a party or to which any property of the Company or any of its
subsidiaries is subject that are required to be described in the Registration
Statement or the Prospectus and are not so described or of any statutes,
regulations, contracts or other documents that are required to be described in
the Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement which are not described or to be filed as required;
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(vi) the statements (a) in Part I of the Annual Report on Form 10-K of the
Company for the year ended December 31, 2000, under the captions "Item 1--
Business--Regulation" and "Item 3--Legal Proceedings" and (b) in Part II of the
Quarterly Reports on Form 10-Q of the Company for the quarters ended March 31,
2001 and June 30, 2001, under the caption "Item 1--Legal Proceedings", in each
case insofar as such statements constitute summaries of legal matters, documents
or proceedings referred to therein, fairly summarize the matters referred to
therein in all material respects; and
(vii) I am of the opinion that each document incorporated by reference in
the Registration Statement and the Prospectus (other than the financial
statements, notes, and schedules and other financial data included or
incorporated by reference in such documents, as to which I express no opinion)
complied as to form when filed with the Securities and Exchange Commission in
all material respects with the Securities Act of 1933, as amended, and the rules
and the regulations of the Securities and Exchange Commission thereunder.
I am licensed to practice law only in the State of Alabama, and,
accordingly, I offer no opinion as to the application of decisions or statutory
law (including conflict of law rules) of any jurisdiction other than the State
of Alabama, the State of Delaware and the United States of America.
This opinion is delivered pursuant to Section 3(b) of the Underwriting
Agreement at the request of the Company and is intended solely for your use as
Underwriters. As such, it may not be relied upon by any other person or for any
other purpose other than for the legal conclusions expressed herein.
Very truly yours,
▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
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EXHIBIT B
FORM OF OPINION OF ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇, P.C.
SPECIAL COUNSEL FOR THE COMPANY
[Date]
[Names and Addresses of Managers]
Dear Ladies and Gentlemen:
We have acted as special counsel for Torchmark Corporation, a Delaware
corporation (the "Company"), and Torchmark Capital Trust I, a statutory business
trust created under the Business Trust Act of the State of Delaware (the
"Trust"), in connection with the issuance and sale by the Company to the Several
Underwriters named in the Underwriting Agreement, dated October 31, 2001 (the
"Underwriting Agreement"), of $110,000,000 in liquidation amount of 7 3/4% Trust
Preferred Securities (liquidation amount $25 per Preferred Security) (the
"Preferred Securities") of the Trust to be issued pursuant to the Declaration
(as defined below). Terms used in this opinion and not otherwise defined have
the same meanings as in the Underwriting Agreement.
In connection with the issuance of the Preferred Securities, the Trust is
also issuing $3,402,075 in liquidation amount of its Common Securities
(liquidation amount $25 per Common Security) (the "Common Securities"),
representing undivided beneficial interests in the assets of the Trust. The
entire proceeds from the sale of the Preferred Securities and the Common
Securities (collectively, the "Trust Securities") are to be used by the Trust to
purchase $113,402,075 aggregate principal amount of 7 3/4% Junior Subordinated
Debentures due 2041 of the Company (the "Junior Subordinated Debentures"). The
Junior Subordinated Debentures are to be issued pursuant to an indenture, dated
as of November 2, 2001, between the Company and The Bank of New York, as
indenture trustee, and an Officer's Certificate, dated as of such date and
issued pursuant thereto, (collectively, the "Indenture").
The Trust Securities are being issued pursuant to the amended and restated
declaration of trust of the Trust, dated as of November 2, 2001 (the
"Declaration"), among the Company, as sponsor, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
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▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇, as regular trustees (the "Regular Trustees"), The
Bank of New York (Delaware), as Delaware trustee (the "Delaware Trustee"), The
Bank of New York, as property trustee (the "Property Trustee") and the holders
from time to time of undivided beneficial interests in the assets of the Trust.
The Preferred Securities are to be guaranteed by the Company with respect
to distributions and payments upon liquidation, redemption and otherwise
pursuant to and to the extent set forth in the Preferred Securities Guarantee
Agreement, dated as of November 2, 2001, between the Company and The Bank of New
York, as guarantee trustee (the "Guarantee").
We have participated in the preparation of the Company's Registration
Statement on Form S-3 (File No. 333-83411) (other than the documents
incorporated by reference in the prospectus included therein (the "Incorporated
Documents")) filed with the Securities and Exchange Commission (the
"Commission") pursuant to the provisions of the Securities Act of 1933, as
amended (the "Securities Act"). Although we did not participate in the
preparation of the Incorporated Documents, we have reviewed such documents. In
addition, we have reviewed evidence that the Registration Statement was declared
effective under the Securities Act and that the Declaration, the Indenture and
the Guarantee were qualified under the Trust Indenture Act of 1939, as amended,
on November 30, 1999. The registration statement (including the Incorporated
Documents and the prospectus supplement dated October 31, 2001 specifically
relating to the Preferred Securities (the "Prospectus Supplement")) as amended
to the date of the Prospectus Supplement is hereinafter referred to as the
"Registration Statement", and the prospectus included in the Registration
Statement (the "Basic Prospectus") as supplemented by the Prospectus Supplement
is hereinafter referred to as the "Prospectus".
As special counsel, we have examined the Underwriting Agreement, the
Indenture, the Declaration, the Guarantee, the Debenture Purchase Agreement, the
Subscription Agreement and the forms of Preferred Securities and Junior
Subordinated Debentures, and originals or copies of certain corporate documents
of the Company; certificates and statements of public officials, corporate
agents, officers of the Company, and other persons; and such other documents as
we have deemed necessary as a basis for our opinions set forth below. In this
connection, we have assumed the genuineness of all signatures and the
authenticity and correctness of all copies of documents examined. Also, we have
relied upon such certificates and statements of public officials, corporate
agents, officers of the Company, and other persons with respect to the accuracy
of material factual matters that were not independently established.
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Based on the foregoing, and subject to the qualifications hereinafter set
forth, we are of the opinion that:
(i) The Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
(ii) The Declaration has been duly qualified under the Trust Indenture
Act, and has been duly authorized, executed and delivered by the Company and the
Regular Trustees and is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms except as the
enforceability thereof (i) may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, liquidation, moratorium and other similar laws
affecting creditors' rights generally and (ii) is subject to general principles
of equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(iii) The Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended, and has been duly authorized, executed and delivered by the
Company and is a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, liquidation, moratorium and other similar laws affecting
creditors' rights generally and (ii) is subject to general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law;
(iv) The Guarantee has been duly qualified under the Trust Indenture Act
of 1939, as amended, and has been duly authorized, executed and delivered by the
Company, and is a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as (i) the
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, liquidation, moratorium and other similar laws
affecting creditors' rights generally and (ii) is subject to general principles
of equity, regardless of whether such enforceability is considered in a
proceeding in equity or at law;
(v) Each of the Debenture Purchase Agreement and the Subscription
Agreement has been duly authorized, executed and delivered by the Company and is
a valid and binding agreement of the Company, enforceable against the Company in
accordance with its terms except as the enforceability thereof (i) may be
limited by bankruptcy, insolvency,
B-3
fraudulent transfer, reorganization, liquidation, moratorium and other similar
laws affecting creditors' rights generally and (ii) is subject to general
principles of equity, regardless of whether such enforceability is considered in
a proceeding in equity or at law;
(vi) The Junior Subordinated Debentures have been duly authorized and,
when executed and authenticated in accordance with the provisions of the
Indenture and delivered to and paid for by the Underwriters in accordance with
the Underwriting Agreement, will be valid and binding obligations of the
Company, enforceable against the Company in accordance with its terms and
entitled to the benefits of the Indenture, except as (i) the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent transfer,
reorganization, liquidation, moratorium and other similar laws affecting
creditors' rights generally and (ii) is subject to general principles of equity,
regardless of whether such enforceability is considered in a proceeding in
equity or at law;
(vii) The execution and delivery by the Company of, and the performance by
the Company of its obligations under, the Underwriting Agreement, the Indenture,
the Declaration, the Guarantee, the Subscription Agreement, the Debenture
Purchase Agreement and the Junior Subordinated Debentures will not contravene
any provision of applicable law or the certificate of incorporation or by-laws
of the Company;
(viii) No consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the performance by the
Company of its obligations under the Underwriting Agreement, the Indenture, the
Declaration, the Guarantee, the Subscription Agreement, the Debenture Purchase
Agreement and the Junior Subordinated Debentures except such as have been
obtained or may be required by the securities or Blue Sky laws of the various
states in connection with the offer and sale of the Preferred Securities;
(ix) Each of the Company and Capital Trust I is not, and after giving
effect to the issuance of the Preferred Securities and assuming the application
of the proceeds thereof as described in the Prospectus, will not be, required to
register as an "investment company" under the Investment Company Act of 1940, as
amended;
(x) Under current law, Capital Trust I will be classified for United
States federal income tax purposes as a grantor trust and not as an association
taxable as a corporation;
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(xi) Under current law, the Junior Subordinated Debentures will be
classified for United States federal income tax purposes as indebtedness of the
Company;
(xii) The statements (a) in the Basic Prospectus under the captions
"Description of Securities -- Description of the Trust Preferred Securities,"
"Description of Securities -- Description of Debt Securities" and "Description
of Securities -- Description of Trust Preferred Securities Guarantees," (b) in
the Prospectus Supplement under the captions "Description of the Trust Preferred
Securities", "Description of the Junior Subordinated Debentures", "Description
of the Guarantee," "United States Federal Income Tax Consequences", "ERISA
Considerations" and "Underwriting" and (c) in the Registration Statement in Item
15, in each case insofar as such statements constitute summaries of legal
matters, documents or proceedings referred to therein, fairly summarize the
matters referred to therein in all material respects.
We have not ourselves checked the accuracy, completeness or fairness of, or
otherwise verified, the information furnished with respect to other matters in
the Registration Statement or Prospectus. We have generally reviewed and
discussed with your representatives and with certain officers and employees of,
and counsel and independent public accountants for the Company, the information
furnished, whether or not subject to our check and verification. On the basis
of such consideration, review and discussion, but without independent check or
verification, except as stated, nothing has come to our attention that causes us
to believe that (i) the Registration Statement and the Prospectus (except for
the financial statements and financial schedules and other financial data
included or incorporated by reference therein, as to which we express no belief,
and except for that part of the Registration Statement that constitutes the
Statement of Eligibility and Qualification of the trustees referred to in the
Registration Statement (the "Form T-1")) do not comply as to form in all
material respects with the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder, (ii) the Registration
Statement (except for the financial statements and financial schedules and other
financial data included or incorporated by reference therein, as to which we
express no belief, and except for the Form T-1), 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 (iii) the Prospectus (except for
the financial statements and financial schedules and other financial data
included or incorporated by reference therein, as to which we express no belief,
and except for the Form T-1), as of its date and as of the date hereof,
contained or contains any untrue statement of a material fact or omits
B-5
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.
We are members of the Bar of the State of Alabama, and this opinion is
limited in all respects to the laws of the State of Alabama, the General
Corporation Law of the State of Delaware, and the United States of America. As
to all matters governed by the laws of the State of New York with respect to our
opinions in paragraphs (iii), (iv), (v) and (vi), we are relying on the opinion
dated today of your counsel, ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇. As to all matters governed
by the laws of the State of Delaware (other than the General Corporation Law of
the State of Delaware) with respect to our opinion in paragraphs (ii), we are
relying on the opinion dated today of Morris, Nichols, Arsht & ▇▇▇▇▇▇▇, special
Delaware counsel to the Company and the Trust.
This opinion is being delivered to you at the request of the Company and
the Trust in connection with the Underwriting Agreement and the transactions
contemplated by the Underwriting Agreement, and may not be relied on by any
other person or for any other purpose without our prior written consent.
Very truly yours,
B-6
EXHIBIT C
FORM OF OPINION OF MORRIS, NICHOLS, ARSHT & ▇▇▇▇▇▇▇,
SPECIAL DELAWARE COUNSEL FOR THE COMPANY AND THE TRUST
[Date]
[Names and Addresses of Managers]
Re: Torchmark Capital Trust I
Ladies and Gentlemen:
We have acted as special Delaware counsel to Torchmark Capital Trust I, a
Delaware statutory business trust (the "Trust"), in connection with certain
matters of Delaware law relating to the formation of the Trust and the proposed
issuance of Preferred Securities by the Trust pursuant to and as described in
the Registration Statement (and the Prospectus and the Prospectus Supplement
forming a part thereof) on Form S-3 filed with the Securities and Exchange
Commission by Torchmark Corporation, a Delaware corporation (the "Company") and
the Trust, on July 21, 1999, as amended by Pre-Effective Amendment No. 1 thereto
(as amended, the "Registration Statement"). Capitalized terms used herein and
not otherwise herein defined are used as defined in the Amended and Restated
Declaration of Trust of the Trust dated as of November 2, 2001 (the "Governing
Instrument").
In rendering this opinion, we have examined and relied upon copies of the
following documents in the forms provided to us: the Certificate of Trust of the
Trust as filed in the Office of the Secretary of State of the State of Delaware
(the "State Office") on July 21, 1999 (the "Certificate of Trust"); the
Declaration of Trust of the Trust dated as of July 21, 1999 (the "Original
Governing Instrument"); the Governing Instrument; the Junior Subordinated
Indenture dated as of November 2, 2001 between the Company and The Bank of New
York, as trustee; the Preferred Securities Guarantee Agreement dated as of
November 2, 2001 between the Company and The Bank of New York, as trustee; the
Underwriting Agreement dated as of October 31, 2001 relating to the Preferred
Securities among the Company, the Trust and the several underwriters named
therein (the "Underwriting Agreement"); the Debenture Purchase Agreement dated
as of November 2, 2001 between the Trust and the Company (the "Debenture
Purchase Agreement"); the Subscription Agreement dated as of November 2, 2001
between the Trust and the Company (the "Subscription Agreement"); the
Registration Statement; and a certification of good standing of the Trust
obtained as of a recent date from the State Office. In such examinations,
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we have assumed the genuineness of all signatures, the conformity to original
documents of all documents submitted to us as drafts or copies or forms of
documents to be executed and the legal capacity of natural persons to complete
the execution of documents. We have further assumed for purposes of this
opinion: (i) the due formation or organization, valid existence and good
standing of each entity (other than the Trust) that is a party to any of the
documents reviewed by us under the laws of the jurisdiction of its respective
formation or organization; (ii) except to the extent addressed by our opinion
set forth in paragraph 3 below, the due authorization, execution and delivery
by, or on behalf of, each of the parties thereto of the above-referenced
documents (including, without limitation, the due authorization, execution and
delivery of the Governing Instrument and the Underwriting Agreement, the
Debenture Purchase Agreement and the Subscription Agreement by the parties
thereto prior to the first issuance of the Common Securities and the Preferred
Securities); (iii) that no event has occurred subsequent to the filing of the
Certificate of Trust that would cause a dissolution or liquidation of the Trust
under the Original Governing Instrument or the Governing Instrument, as
applicable; (iv) that the activities of the Trust have been and will be
conducted in accordance with the Original Governing Instrument or the Governing
Instrument, as applicable; (v) that the required consideration for the Preferred
Securities and the Common Securities is paid in accordance with the terms and
conditions of the Governing Instrument, the Underwriting Agreement, the
Subscription Agreement and the Registration Statement and that the Preferred
Securities and the Common Securities are otherwise issued and sold in accordance
with the terms, conditions, requirements and procedures set forth in the
Governing Instrument, the Underwriting Agreement, the Subscription Agreement and
the Registration Statement; (vi) that each of the Trust and the Company does not
and will not conduct any business or activities in the State of Delaware (other
than, with respect to the Trust, activities incidental to its formation and
continued existence as a Delaware statutory business trust); (vii) that the
Trust is a grantor trust for federal income tax purposes as owners of either all
of, or their liquidation and accrued but unpaid share of, the Debentures held by
the Trust; (viii) that the Securities and the Debentures are executed and
delivered outside the State of Delaware; and (ix) that the documents examined by
us are in full force and effect, express the entire understanding of the parties
thereto with respect to the subject matter thereof and have not been amended,
supplemented or otherwise modified, except as herein referenced. We have not
reviewed any documents other than those identified above in connection with this
opinion, and we have assumed that there are no other documents that are contrary
to or inconsistent with the opinions expressed herein. Further, except to the
extent addressed by our opinion set forth in paragraph 10 below, we express no
opinion with respect to, and assume no responsibility for the contents of, the
Registration Statement or any other offering material relating to the Common
Securities or the Preferred Securities. No opinion is expressed herein with
respect to the requirements of, or compliance
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with, federal or state securities or blue sky laws. As to any fact material to
our opinion, other than those assumed, we have relied without independent
investigation on the above-referenced documents and certificates and on the
accuracy, as of the date hereof, of the matters therein contained.
To the extent our opinion in paragraph 4 relates to the violation of any
Delaware law, rule, or regulation, or the requirement for consent, approval,
authorization or order of, or filing with, any governmental agency or body of
the State of Delaware, our opinions relate only to laws, rules, regulations and
requirements of law that are of general application and that, in our experience,
are likely to have application to transactions of the nature herein referenced
(and not to laws, rules, regulations or requirements of law that might be
implicated by reason of the specific business activities of any of the above-
referenced entities).
Based on and subject to the foregoing, and limited in all respects to
matters of Delaware law, it is our opinion that:
1. The Trust has been duly formed and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, 12 Del. C.
(S)(S) 3801 et seq. (the "Delaware Act").
2. Under the Governing Instrument and the Delaware Act, the Trust has the
requisite business trust power and authority to (A) conduct its business as
described in the Prospectus, (B) execute and deliver the Underwriting Agreement,
the Debenture Purchase Agreement and the Subscription Agreement, and perform its
obligations thereunder and (C) issue and perform its obligations under the
Preferred Securities and the Common Securities.
3. The execution and delivery by the Trust of the Underwriting Agreement,
the Debenture Purchase Agreement and the Subscription Agreement, and the
performance of its obligations thereunder, have been duly authorized by all
requisite business trust action on the part of the Trust.
4. The issuance and sale by the Trust of the Preferred Securities and the
Common Securities, the execution, delivery and performance by the Trust of the
Underwriting Agreement, the Debenture Purchase Agreement and the Subscription
Agreement and the consummation by the Trust of the transactions contemplated
thereby will not violate (A) the Governing Instrument or (B) any applicable
Delaware law, rule or regulation. No consent, approval, authorization or order
of, or filing with, any governmental agency or body of the State of Delaware
that has not
C-3
been obtained is required for the execution, delivery and performance by the
Trust of its obligations under the Underwriting Agreement, the Debenture
Purchase Agreement and the Subscription Agreement or the issuance and sale of
the Preferred Securities and the Common Securities by the Trust.
5. Under the Governing Instrument and the Delaware Act, the issuance of
the Preferred Securities is not subject to preemptive rights.
6. Assuming that the Trust derives no income from or connected with
services provided within the State of Delaware and has no assets, activities
(other than maintaining the Delaware Trustee and the filing of documents with
the Secretary of State of the State of Delaware) or employees in the State of
Delaware, the Holders of the Securities (other than Holders of the Securities,
or Persons who are partners or S corporation shareholders for federal income tax
purposes in such Holders of the Securities, who reside or are domiciled in the
State of Delaware or who are otherwise subject to income taxation 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.
7. The Governing Instrument constitutes a legal, valid and binding
obligation of the Company and the Capital Trustees, enforceable against the
Company and the Capital Trustees in accordance with its terms, except to the
extent that enforcement thereof may be limited by (A) bankruptcy, insolvency,
receivership, liquidation, fraudulent conveyance, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and remedies, (B) general principles of equity (regardless of whether considered
and applied in a proceeding in equity or at law) and (C) considerations of
public policy and the effect of applicable law relating to fiduciary duties.
8. The Preferred Securities have been duly authorized for issuance by the
Governing Instrument and, when issued, executed, authenticated, delivered and
paid for in accordance with the Governing Instrument and the Underwriting
Agreement, will be fully paid and, subject to the qualifications set forth
below, non-assessable undivided beneficial interests in the assets of the Trust.
Under the Governing Instrument and the Delaware Act, each Preferred Security
Holder of the Trust, in such capacity, will be entitled to the same limitation
on personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of Delaware;
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provided, however, that we express no opinion with respect to the liability of
any Preferred Security Holder who is, was or may become a named Trustee of the
Trust. Notwithstanding the foregoing, we note that, pursuant to the Governing
Instrument, Preferred Security Holders may be obligated to make payments or
provide indemnity or security under the circumstances set forth therein.
9. The Common Securities have been duly authorized for issuance by the
Governing Instrument and, when issued, executed, authenticated, delivered and
paid for in accordance with the Governing Instrument and the Subscription
Agreement, will be fully paid and, subject to the qualifications set forth
below, non-assessable undivided beneficial interests in the assets of the Trust.
We note that, pursuant to the Governing Instrument, Common Security Holders may
be obligated to make payments or provide indemnity or security under the
circumstances set forth therein.
10. The statements in the Prospectus under the caption "The Trusts" and in
the Prospectus Supplement under the caption "Prospectus Supplement Summary --
Torchmark Capital Trust I" to the extent such statements address matters of
Delaware law are correct statements of such law in all material respects.
This opinion speaks only as of the date hereof and is based on our
understandings and assumptions as to present facts, and on our review of the
above-referenced documents and the application of Delaware law as the same exist
as of the date hereof, and we undertake no obligation to update or supplement
this opinion after the date hereof for the benefit of any person or entity with
respect to any facts or circumstances that may hereafter come to our attention
or any changes in facts or law that may hereafter occur or take effect. We
understand that the law firms of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇, P.C., and ▇▇▇▇▇ ▇▇▇▇ &
▇▇▇▇▇▇▇▇ wish to rely as to matters of Delaware law on the opinions set forth
above in connection with the rendering of its opinion to you dated on or about
the date hereof concerning the Underwriting Agreement, and we hereby consent to
such reliance. Except as provided in the preceding sentence, the opinions
herein expressed are intended solely for the benefit of the addressees hereof in
connection with the transactions contemplated by the Underwriting Agreement and
may not be relied upon by any other person or entity, or for any other purpose,
without our prior written consent.
Very truly yours,
MORRIS, NICHOLS, ARSHT & ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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EXHIBIT D
FORM OF OPINION OF ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
COUNSEL FOR THE UNDERWRITERS
[Date]
[Names and Addresses of Managers]
Dear Ladies and Gentlemen:
We have acted as counsel for you as representatives of the several
underwriters (the "Underwriters") named in the Underwriting Agreement dated
October 31, 2001 (the "Underwriting Agreement") with Torchmark Corporation, a
Delaware corporation (the "Company") and Torchmark Capital Trust I, a Delaware
business trust (the "Trust"), in connection with the purchase by the several
Underwriters of $110,000,000 in liquidation amount of 7 3/4% Trust Preferred
Securities (liquidation amount $25 per Preferred Security) (the "Preferred
Securities") of the Trust to be issued pursuant to the Declaration (as defined
below).
In connection with the issuance of the Preferred Securities, the Trust is
also issuing $3,402,075 in liquidation amount of its Common Securities
(liquidation amount $25 per Common Security) (the "Common Securities"),
representing undivided beneficial interests in the assets of the Trust. The
entire proceeds from the sale of the Preferred Securities and the Common
Securities (collectively, the "Trust Securities") are to be used by the Trust to
purchase $113,402,075 aggregate principal amount of 7 3/4% Junior Subordinated
Debentures due 2041 of the Company (the "Junior Subordinated Debentures"). The
Junior Subordinated Debentures are to be issued pursuant to an indenture, dated
as of November 2, 2001, between the Company and The Bank of New York, as
indenture trustee, and an Officer's Certificate, dated as of such date and
issued pursuant thereto, (collectively, the "Indenture").
The Trust Securities are being issued pursuant to the amended and restated
declaration of trust of the Trust, dated as of November 2, 2001 (the
"Declaration"), among the Company, as sponsor, ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
and ▇▇▇▇ ▇▇▇▇▇▇▇, as regular trustees (the "Regular Trustees"), The Bank of New
York (Delaware), as Delaware trustee (the "Delaware Trustee"), The Bank of New
York, as property trustee (the "Property Trustee") and the
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holders from time to time of undivided beneficial interests in the assets of the
Trust.
The Preferred Securities are to be guaranteed by the Company with respect
to distributions and payments upon liquidation, redemption and otherwise
pursuant to and to the extent set forth in the Preferred Securities Guarantee
Agreement, dated as of November 2, 2001, between the Company and The Bank of New
York, as guarantee trustee (the "Guarantee").
We have examined an executed copy of the Underwriting Agreement, the
Declaration, the Guarantee, the Indenture, the Debenture Purchase Agreement, the
Subscription Agreement and forms of the Preferred Securities and the Junior
Subordinated Debentures. We have examined originals or copies, certified or
otherwise identified to our satisfaction, of such other documents, corporate
records, certificates of public officials and other instruments as we have
deemed necessary or advisable for the purpose of rendering this opinion.
We have participated in the preparation of the Company's Registration
Statement on Form S-3 (File No. 333-83411) (other than, in each case, the
documents incorporated by reference in the prospectus included therein (the
"Incorporated Documents")) filed with the Securities and Exchange Commission
(the "Commission") pursuant to the provisions of the Securities Act of 1933, as
amended (the "Act"). Although we did not participate in the preparation of the
Incorporated Documents, we have reviewed such documents. In addition, we have
reviewed evidence that the Registration Statement was declared effective under
the Act and that the Declaration, the Indenture and the Guarantee were qualified
under the Trust Indenture Act of 1939, as amended, on November 30, 1999. The
registration statement (including the Incorporated Documents and the prospectus
supplement dated October 31, 2001 specifically relating to the Preferred
Securities (the "Prospectus Supplement")) as amended to the date of the
Prospectus Supplement is hereinafter referred to as the "Registration
Statement", and the prospectus included in the Registration Statement (the
"Basic Prospectus") as supplemented by the Prospectus Supplement is hereinafter
referred to as the "Prospectus".
We have assumed the conformity of the documents filed with the Commission
via the Electronic Data Gathering, Analysis and Retrieval System ("▇▇▇▇▇"),
except for required ▇▇▇▇▇ formatting changes, to physical copies of the
documents delivered to the Company and submitted for our examination.
Capitalized terms used but not otherwise defined herein are used as defined
in the Underwriting Agreement.
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Upon the basis of the foregoing, we are of the opinion that:
(i) the Underwriting Agreement has been duly authorized, executed and
delivered by the Company;
(ii) the Indenture has been duly qualified under the Trust Indenture Act,
has been duly authorized, executed and delivered by the Company, and is a valid
and binding agreement of the Company, enforceable in accordance with its terms
except (a) as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium, fraudulent conveyance and
other similar laws affecting creditors' rights generally and (b) as the
enforceability thereof is subject to general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law;
(iii) the Guarantee has been duly qualified under the Trust Indenture Act,
has been duly authorized, executed and delivered by the Company, and is a valid
and binding obligation of the Company enforceable in accordance with its terms
except (a) as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium, fraudulent conveyance and
other similar laws affecting creditors' rights generally, (b) as the
enforceability thereof is subject to general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law;
(iv) the Declaration has been duly qualified under the Trust Indenture Act,
has been duly authorized, executed and delivered by the Company, and is a valid
and binding obligation of the Company enforceable in accordance with its terms
except (a) as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium, fraudulent conveyance and
other similar laws affecting creditors' rights generally, (b) as the
enforceability thereof is subject to general principles of equity, regardless of
whether such enforceability is considered in a proceeding in equity or at law;
(v) each of the Debenture Purchase Agreement and the Subscription Agreement
has been duly authorized, executed and delivered by the Company and is a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms except as the enforceability thereof (i) may be
limited by bankruptcy, insolvency, fraudulent transfer, reorganization,
liquidation, moratorium and other similar laws affecting creditors' rights
generally and (ii) is subject to
D-3
general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law; and
(vi) the Junior Subordinated Debentures have been duly authorized by the
Company and, when executed and authenticated in accordance with the provisions
of the Indenture and delivered and paid for as described in the Prospectus, will
be entitled to the benefits of the Indenture and will be valid and binding
obligations of the Company, enforceable in accordance with their terms except
(a) as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, liquidation, moratorium, fraudulent conveyance and other similar
laws affecting creditors' rights generally and (b) as the enforceability thereof
is subject to general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.
We have considered the statements relating to legal matters or documents
included in (a) the Basic Prospectus under the captions "Description of
Securities -- Description of the Trust Preferred Securities," "Description of
Securities -- Description of Debt Securities" and "Description of Securities --
Description of Trust Preferred Securities Guarantees," and (b) the Prospectus
Supplement under the captions "Description of the Trust Preferred Securities,"
"Description of the Junior Subordinated Debentures," "Description of the
Guarantee" and "Underwriting". In our opinion, such statements fairly summarize
in all material respects such legal matters or documents.
We have not ourselves checked the accuracy, completeness or fairness of, or
otherwise verified, the information furnished with respect to other matters in
the Registration Statement or Prospectus. We have generally reviewed and
discussed with your representatives and with certain officers and employees of
and independent public accountants for the Company, the information furnished,
whether or not subject to our check and verification. On the basis of such
consideration, review and discussion, but without independent check or
verification, except as stated, nothing has come to our attention that causes us
to believe that (i) the Registration Statement and the Prospectus (except for
the financial statements and financial schedules and other financial data
included or incorporated by reference therein, as to which we express no belief,
and except for that part of the Registration Statement that constitutes the
Statement of Eligibility and Qualification of the trustees referred to in the
Registration Statement (the "Form T-1")) do not comply as to form in all
material respects with the requirements of the Securities Act and the applicable
rules and regulations of the Commission thereunder, (ii) the Registration
Statement (except for the financial statements and financial schedules and other
financial data included or incorporated by reference therein, as to which we
express no belief, and except for
D-4
the Form T-1), at the time the Registration Statement became effective,
contained an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or (iii) the Prospectus (except for the financial statements and
financial schedules and other financial data included or incorporated by
reference therein, as to which we express no belief, and except for the Form T-
1), as of its date and as of the date hereof, contained or contains an 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.
We have examined the opinions of (a) ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., Vice President,
Associate Counsel and Secretary of the Company, (b) ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇,
P.C., special counsel for the Company and the Trust, and (c) Morris, Nichols,
Arsht & ▇▇▇▇▇▇▇, special Delaware counsel for the Company and the Trust, each
dated the date hereof and delivered to you pursuant to Sections 3(b), 3(c) and
3(d), respectively, of the Underwriting Agreement, and we believe that such
opinions are substantially responsive to the requirements therefor. We have
also examined the letters dated October 31, 2001, and the date hereof of
Deloitte & Touche LLP, independent public accountants for the Company, relating
to the financial statements included or incorporated by reference in the
Registration Statement and certain other matters referred to in such letters,
delivered to you pursuant to Section 3(f) of the Underwriting Agreement. We
participated in discussions with representatives of Deloitte & Touche LLP and
your representatives relating to the forms of such letters and we believe that
they are substantially in the forms agreed to.
We are members of the Bar of the State of New York and the foregoing
opinion is limited to the laws of the State of New York, the General Corporation
Law of the State of Delaware and the Federal laws of the United States. As to
all matters governed by the laws of the State of Delaware (other than the
General Corporation Law of the State of Delaware), we have relied upon the
opinion dated today of Morris, Nichols, Arsht & ▇▇▇▇▇▇▇, special Delaware
counsel to the Company and the Trust.
This opinion is rendered solely to you in connection with the above matter.
This opinion may not be relied upon by you for any other purpose or relied upon
or furnished to any other person without our prior written consent, except that
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇, P.C., special counsel to the Company, may rely on our
opinions in paragraphs (ii), (iii), (v) and (vi) as to matters governed by the
laws of the State of New York in rendering their opinion to be delivered
pursuant to the Underwriting Agreement.
Very truly yours,
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