EXHIBIT 1.1
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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
(an Iowa corporation)
Senior Notes due 2012
PURCHASE AGREEMENT
Dated: o, 2002
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AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
(an Iowa corporation)
$150,000,000
Senior Notes due 2012
PURCHASE AGREEMENT
o, 2002
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc.
SAMCO Capital Markets, a Division of
Service Asset Management Company
First Tennessee Securities Corporation
BB&T Capital Markets, a Division of
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇▇, Inc.
c/o Keefe, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
as Representative of the several Underwriters
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
American Equity Investment Life Holding Company, an Iowa corporation
(the "Company"), and American Equity Investment Life Insurance Company, an Iowa
stock life insurance company ("AEILIC"), confirm their agreement with ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc., Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc., SAMCO Capital
Markets, a Division of Service Asset Management Company, First Tennessee
Securities Corp. and BB&T Capital Markets, a Division of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇▇,
Inc., and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 hereof), for whom ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc., Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc., SAMCO Capital
Markets, a Division of Service Asset Management Company, First Tennessee
Securities Corp. and BB&T Capital Markets, a Division of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇▇,
Inc., are acting as representatives (in such capacity, the "Representatives"),
with respect to the issue and sale by the Company and the purchase by the
Underwriters, acting severally and not jointly, of the respective principal
amounts set forth in said Schedule A of $150,000,000 aggregate principal amount
of the Company's Senior Notes due 2012 (the "Securities"). The Securities are to
be issued pursuant to an indenture dated as of __________, 2002 (the
"Indenture") between the Company and U.S. Bank National Association, as trustee
(the "Trustee"). The term "Indenture," as used herein, includes the Officer's
Certificate (as defined in the Indenture) establishing the form and terms of the
Securities pursuant to Sections 3.01 and 3.03 of the Indenture.
The Company and AEILIC understand that the Underwriters propose to make
a public offering of the Securities as soon as the Representatives deem
advisable after this Agreement has been executed and delivered and the Indenture
has been qualified under the Trust Indenture Act of 1939, as amended (the "1939
Act").
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-1 (No. 333-72930) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus in accordance with the provisions of Rule 430A
("Rule 430A") of the rules and regulations of the Commission under the 1933 Act
(the "1933 Act Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of
the 1933 Act Regulations or (ii) if the Company has elected to rely upon Rule
434 ("Rule 434") of the 1933 Act Regulations, prepare and file a term sheet (a
"Term Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in such prospectus or in such Term Sheet, as the case may
be, that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto and schedules thereto at the time it
became effective and including the Rule 430A Information and the Rule 434
Information, as applicable, is herein called the "Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations
is herein referred to as the "Rule 462(b) Registration Statement," and after
such filing the term "Registration Statement" shall include the Rule 462(b)
Registration Statement. The final prospectus in the form first furnished to the
Underwriters for use in connection with the offering of the Securities is herein
called the "Prospectus." If Rule 434 is relied on, the term "Prospectus" shall
refer to the preliminary prospectus dated ________, 2002 together with the Term
Sheet and all references in this Agreement to the date of the Prospectus shall
mean the date of the Term Sheet. For purposes of this Agreement, all references
to the Registration Statement, any preliminary prospectus, the Prospectus or any
Term Sheet or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) REPRESENTATIONS AND WARRANTIES BY THE COMPANY. Each of the Company
and AEILIC, jointly and severally, represents and warrants to each Underwriter
as of the date hereof, and agrees with each Underwriter, as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or
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any Rule 462(b) Registration Statement has been issued under the 1933
Act and no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company or AEILIC, threatened by
the Commission.
At the respective times the Registration Statement, any Rule
462(b) Registration Statement and any post-effective amendments thereto
became or become effective and at the Closing Time, the Registration
Statement, the Rule 462(b) Registration Statement and any amendments
and supplements thereto complied and will comply in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations and the 1939 Act and the rules and regulations of the
Commission under the 1939 Act (the "1939 Act Regulations"), and did not
and will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein not misleading. Neither the Prospectus nor
any amendments or supplements thereto, at the time the Prospectus or
any such amendment or supplement was issued and at the Closing Time,
included or will include an untrue statement of a material fact or
omitted or will 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. If Rule 434 is used, the Company
will comply with the requirements of Rule 434 and the Prospectus shall
not be "materially different", as such term is used in Rule 434, from
the prospectus included in the Registration Statement at the time it
became effective. The representations and warranties in this subsection
shall not apply to statements in or omissions from the Registration
Statement or Prospectus made in reliance upon and in conformity with
information furnished to the Company in writing by any Underwriter
through ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc. expressly for use in the
Registration Statement or Prospectus.
Each preliminary prospectus and the 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 1933 Act,
complied when so filed in all material respects with the 1933 Act
Regulations.
(ii) INDEPENDENT ACCOUNTANTS. The accountants who certified
the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required
by the 1933 Act and the 1933 Act Regulations.
(iii) FINANCIAL STATEMENTS. The financial statements included
in the Registration Statement and the Prospectus (or, if the Prospectus
is not in existence, in the most recent preliminary prospectus),
together with the related schedules and notes, present fairly in all
material respects the financial position of the Company and its
consolidated subsidiaries at the dates indicated and the statement of
income, changes in stockholders' equity and cash flows of the Company
and its consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved (except as otherwise noted therein).
The supporting schedules included in the Registration Statement present
fairly in all material respects the
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information required to be stated therein in accordance with GAAP. The
selected consolidated financial data and the summary consolidated
financial and other data included in the Prospectus present fairly in
all material respects, on the basis stated in the Prospectus, the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements included in the
Registration Statement or with statutory accounting principles ("SAP"),
as applicable (except as otherwise noted therein).
(iv) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the
respective dates as of which information is given in the Registration
Statement and the Prospectus, except as otherwise stated therein, (A)
there has been no material adverse change in the condition (financial
or otherwise), business, properties, surplus or capital of the Company
and its subsidiaries taken as a whole (a "Material Adverse Effect"),
(B) there have been no transactions entered into by the Company or any
of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) except for regular
annual dividends on the common stock, par value $1.00 per share, of the
Company (the "Common Stock") and on the Series A participating
preferred stock, par value $1.00 per share, of the Company (the
"Preferred Stock") in amounts per share that are consistent with past
practice, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital
stock.
(v) GOOD STANDING OF THE COMPANY. The Company has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Iowa and has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the Prospectus and to enter into and perform
its obligations under this Agreement; and the Company is duly qualified
to transact business as a foreign corporation and is in good standing
(except in those jurisdictions where the concept of good standing is
not recognized) under the laws of each other jurisdiction in which the
ownership or leasing of its property or the conduct of its business
requires such qualification, except where the failure so to qualify or
to be in good standing would not reasonably be expected to have a
Material Adverse Effect.
(vi) GOOD STANDING OF SUBSIDIARIES. Each of AEILIC and
American Equity Investment Life Insurance Company of New York, a New
York stock life insurance company ("AEILIC New York," and together with
AEILIC, the "Insurance Subsidiaries"), has been duly incorporated and
is validly existing as a stock life insurance company in good standing
under the laws of the jurisdiction of its incorporation. Each other
"significant subsidiary" of the Company (as such term is defined in
Rule 1-02 of Regulation S-X under the 1933 Act) (each a "Subsidiary,"
and collectively with the "Insurance Subsidiaries," the "Subsidiaries")
has been duly organized and is validly existing as a corporation or
other entity in good standing under the laws of the jurisdiction of its
organization. Each Subsidiary has corporate or other 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 as a foreign corporation and is in good standing
(except in those jurisdictions where the concept of good standing is
not
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recognized) in each other jurisdiction in which the ownership or
leasing of its property or the conduct of its business requires such
qualification, except where the failure so to qualify or to be in good
standing would not reasonably be expected to result in a Material
Adverse Effect; except as otherwise disclosed in the Registration
Statement, all of the issued and outstanding capital stock of each such
Subsidiary has been duly authorized and validly issued, is fully paid
and non-assessable and is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage,
pledge, lien, encumbrance or claim, except for such security interests,
mortgages, pledges, liens, encumbrances or claims (i) pursuant to the
Company's bank credit facility or (ii) that are immaterial to the
Company and its Subsidiaries taken as a whole; none of the outstanding
shares of capital stock of any Subsidiary was issued in violation of
the preemptive or similar rights of any securityholder of such
Subsidiary. Each of the Company and the Insurance Subsidiaries is in
compliance with the requirements of the insurance laws and regulations
of its respective jurisdiction of organization or incorporation, as the
case may be, and the insurance laws and regulations of other
jurisdictions which are applicable to it, and has filed all notices,
reports, documents or other information ("Notices") required to be
filed thereunder, in each case, with such exceptions as would not
reasonably be expected to have a Material Adverse Effect; and, except
as otherwise specifically described in the Prospectus, neither the
Company nor any Insurance Subsidiary 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 ("Approvals") from such insurance
regulatory authority is needed to be obtained by any of the Insurance
Subsidiaries in any case where obtaining such Approvals or the failure
to obtain such Approvals would reasonably be expected to have a
Material Adverse Effect. The only subsidiaries of the Company are the
subsidiaries listed on Exhibit 21.1 to the Registration Statement.
(vii) CAPITALIZATION. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus in the
column entitled "Actual" under the caption "Capitalization" (except
that the authorized capital stock of the Company as of the Closing Time
shall be as set forth in the column entitled "As Adjusted" therein and
except for subsequent issuances, if any, pursuant to this Agreement,
pursuant to reservations, agreements or employee benefit plans referred
to in the Prospectus or pursuant to the exercise of convertible
securities or options referred to in the Prospectus). The shares of
issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable;
none of the outstanding shares of capital stock of the Company was
issued in violation of the preemptive or other similar rights of any
securityholder of the Company.
(viii) AUTHORIZATION OF AGREEMENT. This Agreement has been
duly authorized, executed and delivered by the Company.
(ix) AUTHORIZATION OF THE INDENTURE. The Indenture has been
duly authorized by the Company and duly qualified under the 1939 Act
and, assuming due authorization, execution and delivery thereof by the
Trustee, when duly executed and delivered by the Company, will
constitute a valid and binding agreement of the Company, enforceable
5
against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally from time to time in effect
and except as enforcement thereof is subject to general principles of
equity (regardless of whether enforcement is considered in a proceeding
in equity or at law).
(x) AUTHORIZATION OF THE SECURITIES. The Securities have been
duly authorized and, when duly executed and authenticated in accordance
with the provisions of the Indenture and delivered to and paid for by
the Underwriters, and assuming due authorization, execution and
delivery of the Indenture by the Trustee, will have been duly executed
and delivered by the Company and will constitute valid and binding
obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors' rights generally from
time to time in effect and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be in the
form contemplated by, and entitled to the benefits of, the Indenture.
(xi) DESCRIPTION OF THE SECURITIES AND THE INDENTURE. The
Securities and the Indenture will conform in all material respects
to the respective statements relating thereto contained in the
Prospectus and will be in substantially the respective forms filed
or incorporated by reference, as the case may be, as exhibits to the
Registration Statement.
(xii) ABSENCE OF CONFLICTS. The execution, delivery and
performance of this Agreement and the Indenture and the consummation of
the transactions contemplated herein or therein and in the Registration
Statement (including the issuance and sale of the Securities and the
use of the proceeds from the sale of the Securities as described in the
Prospectus under the caption "Use of Proceeds") and compliance by the
Company with its obligations hereunder and under the Indenture and the
Securities have been duly authorized by all necessary corporate action
and do not and will not, whether with or without the giving of notice
or passage of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any Subsidiary pursuant to, any
contract, indenture, mortgage, deed of trust, loan or credit agreement,
note, lease or other agreement or instrument to which the Company or
any of its Subsidiaries is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or any
Subsidiary is subject (collectively, "Agreements and Instruments")
(except for such conflicts, breaches or defaults that would not
reasonably be expected to result in a Material Adverse Effect and
except for such liens, charges or encumbrances that are immaterial to
the Company and its Subsidiaries taken as a whole), nor will such
action result in any violation of the provisions of the charter or
by-laws or other governing documents of the Company or any Subsidiary
or any applicable law, statute, rule, regulation, judgment, order, writ
or decree
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of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any Subsidiary or any
of their assets, properties or operations (except for such violations
of any applicable law, statute, rule, regulation, judgment, order, writ
or decree that would not reasonably be expected to result in a Material
Adverse Effect). As used herein, a "Repayment Event" means any event or
condition which gives the holder of any note, debenture or other
evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or
a portion of such indebtedness by the Company or any Subsidiary.
(xiii) ABSENCE OF PROCEEDINGS. Except as set forth in the
Registration Statement, there is no action, suit, proceeding, inquiry
or investigation before or brought by any court or governmental agency
or body, domestic or foreign, now pending, or, to the knowledge of the
Company or AEILIC, threatened, against or affecting the Company or any
Subsidiary (other than as disclosed therein), which is required to be
disclosed in the Registration Statement, or which would reasonably be
expected to result in a Material Adverse Effect, or which would
reasonably be expected to materially and adversely affect the
consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder.
(xiv) ACCURACY OF EXHIBITS. There are no contracts or
documents which are required to be described in the Registration
Statement or the Prospectus (or if the Prospectus is not in existence,
in the most recent preliminary prospectus) or to be filed as exhibits
thereto which have not been so described and filed as required.
(xv) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
Subsidiaries own or possess, or can acquire on reasonable terms,
adequate patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other
intellectual property which are material to the business of the Company
and its Subsidiaries taken as a whole (collectively, "Intellectual
Property") and necessary to carry on the business now operated by them.
As of the date of this Agreement, neither the Company nor any of its
Subsidiaries has received any written notice or is otherwise aware of
any infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or of any facts or circumstances
which would render any Intellectual Property invalid or inadequate to
protect the interest of the Company or any of its Subsidiaries therein,
and which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in
the aggregate, would reasonably be expected to result in a Material
Adverse Effect.
(xvi) ABSENCE OF FURTHER REQUIREMENTS. No filing with, or
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or
agency is necessary or required for the performance by the Company of
its obligations hereunder, in connection with the offering, issuance or
sale of the Securities hereunder or the consummation of the
transactions contemplated by this
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Agreement or for the due execution, delivery or performance of the
Indenture by the Company, except such as have been already obtained or
as may be required under the 1933 Act or the 1933 Act Regulations, the
Securities Exchange Act of 1934, as amended (the "1934 Act"), or state
securities laws and except for the qualification of the Indenture under
the 1939 Act and approval of the Securities for listing on the New York
Stock Exchange.
(xvii) POSSESSION OF LICENSES AND PERMITS. The Company and its
Subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by
the appropriate federal, state, local or foreign regulatory agencies or
bodies necessary to conduct the business now operated by them, except
where the failure to possess such Governmental Licenses would not
reasonably be expected to result in a Material Adverse Effect; the
Company and its Subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure
so to comply would not, singly or in the aggregate, reasonably be
expected to result in a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except
where the invalidity of such Governmental Licenses or the failure of
such Governmental Licenses to be in full force and effect would not
reasonably be expected to result in a Material Adverse Effect; and, as
of the date of this Agreement, neither the Company nor any of its
Subsidiaries has received any written notice of proceedings relating to
the revocation or modification of any such Governmental Licenses which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would reasonably be expected to result in a Material
Adverse Effect.
(xviii) LEASES. All of the leases and subleases material to
the business of the Company and its Subsidiaries, considered as one
enterprise, and under which the Company or any of its Subsidiaries
holds properties described in the Prospectus, are in full force and
effect, and, as of the date of this Agreement, neither the Company nor
any Subsidiary has received any written notice of any material claim of
any sort that has been asserted by anyone adverse to the rights of the
Company or any Subsidiary under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company
or such Subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xix) INVESTMENT COMPANY ACT. None of the Company or any of
its subsidiaries is or upon the issuance and sale of the Securities as
herein contemplated and the application of the net proceeds therefrom
as described in the Prospectus will be, an "investment company" or an
entity "controlled" by an "investment company" as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xx) STATUTORY STATEMENTS. The statutory annual and quarterly
statements of each of the Insurance Subsidiaries and the statutory
balance sheets and income statements included in such statutory annual
and quarterly statements, most recently filed in each jurisdiction,
have been prepared in accordance with SAP, applied on a consistent
basis, except as may otherwise be indicated in the notes thereto and
any normal year end
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adjustments, and the balance sheets and other information presented
therein present fairly in all material respects the financial position
of the respective Insurance Subsidiaries (on a SAP basis) as of the
dates covered thereby.
(xxi) REGISTRATION RIGHTS. There are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Company under the 1933 Act as a result of the
offering of the Securities.
(b) OFFICER'S CERTIFICATES. Any certificate signed by any
officer of the Company or AEILIC delivered to the Representatives or to
counsel for the Underwriters shall be deemed a representation and
warranty by the Company and AEILIC to each Underwriter as to the
matters covered thereby.
SECTION 2. SALE AND DELIVERY TO UNDERWRITERS; CLOSING.
(a) SECURITIES. On the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
the price set forth in Schedule B, the aggregate principal amount of Securities
set forth in Schedule A opposite the name of such Underwriter, plus any
additional principal amount of Securities which such Underwriter may become
obligated to purchase pursuant to the provisions of Section 10 hereof.
(b) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of Sidley ▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇, Bank One Plaza, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
or at such other place as shall be agreed upon by the Representatives and the
Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs
after 4:30 P.M. (Eastern time) on any given day) business day after the date
hereof (unless postponed in accordance with the provisions of Section 10), or
such other time not later than ten business days after such date as shall be
agreed upon by the Representatives and the Company (such time and date of
payment and delivery being herein called "Closing Time").
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Securities which it has agreed to purchase. ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Securities to be
purchased by any Underwriter whose funds have not been received by the Closing
Time, but such payment shall not relieve such Underwriter from its obligations
hereunder.
(c) DELIVERY. Delivery of the Securities shall be made through the
facilities of The Depository Trust Company unless the Representatives shall
otherwise instruct.
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SECTION 3. COVENANTS OF THE COMPANY. Each of the Company and AEILIC,
jointly and severally, covenants with each Underwriter as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS. The
Company, subject to Section 3(b), will use its reasonable efforts to comply with
the requirements of Rule 430A or Rule 434, as applicable, and will notify the
Representatives immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall become effective,
or any supplement to the Prospectus or any amended Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of any
request by the Commission for any amendment to the Registration Statement or any
amendment or supplement to the Prospectus or for additional information, and
(iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of
the initiation or threatening of any proceedings for any of such purposes. The
Company will use its reasonable efforts to promptly effect the filings necessary
pursuant to Rule 424(b) and will take such steps as it deems reasonably
necessary to ascertain promptly whether the form of prospectus transmitted for
filing under Rule 424(b) was received for filing by the Commission and, in the
event that it was not, it will promptly file such prospectus. The Company will
make every reasonable effort to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the withdrawal thereof at the earliest
possible moment.
(b) FILING OF AMENDMENTS. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or to the Prospectus,
will furnish the Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and
will not file or use any such document to which the Representatives or counsel
for the Underwriters shall object in good faith.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or
made available or will deliver to the Representatives and counsel for the
Underwriters, without charge, signed copies of the Registration Statement as
originally filed and of each amendment thereto (including exhibits filed
therewith) and signed copies of all consents and certificates of experts, and
will also deliver to the Representatives, without charge, a conformed copy of
the Registration Statement as originally filed and of each amendment thereto
(without exhibits) for each of the Underwriters.
(d) DELIVERY OF PROSPECTUSES. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. On the effective
date, and thereafter from time to time, the Company will furnish to each
Underwriter, without charge, during the period when the Prospectus is required
to be delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus (as amended or supplemented) as such Underwriter may reasonably
request.
10
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. If at any time when a
prospectus is required by the 1933 Act to be delivered in connection with sales
of the Securities, any event shall occur or condition shall exist as a result of
which it is necessary, in the opinion of counsel for the Underwriters or for the
Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading in the light of the circumstances under
which they were made, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus, in each case as then amended or supplemented, in
order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company and AEILIC will cooperate with
the Underwriters, to qualify the Securities for offering and sale under the
applicable securities laws of such states and other jurisdictions as the
Representatives may designate and to maintain such qualifications in effect for
a period of not less than one year from the later of the effective date of the
Registration Statement and any Rule 462(b) Registration Statement; provided,
however, that neither the Company nor AEILIC shall be obligated to file any
general consent to service of process or to qualify as a foreign corporation or
as a dealer in securities in any jurisdiction in which it is not so qualified or
to subject itself to taxation in respect of doing business in any jurisdiction
in which it is not otherwise so subject. In each jurisdiction in which the
Securities have been so qualified, the Company or AEILIC, as applicable, will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the Registration Statement and any Rule
462(b) Registration Statement. The Company and AEILIC will also supply the
Underwriters with such information as is necessary for the determination of the
legality of the Securities for investment under the laws of such jurisdictions
as the Underwriters may request.
(g) RULE 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) USE OF PROCEEDS. The Company will use the net proceeds received by
it from the sale of the Securities in the manner specified in the Prospectus
under "Use of Proceeds".
(i) LISTING. The Company will use its reasonable efforts to effect the
listing of the Securities on the New York Stock Exchange.
(j) REPORTING REQUIREMENTS. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act or the 1934 Act, will
file all documents required to
11
be filed with the Commission pursuant to the 1934 Act within the time periods
required by the 1934 Act and the rules and regulations of the Commission
thereunder.
SECTION 4. PAYMENT OF EXPENSES.
(a) EXPENSES. The Company and AEILIC, jointly and severally, agree to
pay all expenses incident to the performance of its obligations under this
Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the printing and delivery
to the Underwriters of this Agreement, any Agreement among Underwriters, the
Indenture and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectus and any amendments or supplements thereto, (vii)
the preparation, printing and delivery to the Underwriters of copies of the Blue
Sky Survey and any supplement thereto, (viii) the fees and expenses of the
Trustee, (ix) any fees payable in connection with the rating of the Securities,
and (x) the fees and expenses incurred in connection with the listing of the
Securities on the New York Stock Exchange.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section
9(a)(i) hereof, the Company and AEILIC, jointly and severally, agree to
reimburse the Underwriters severally for all of their out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters,
subject to an aggregate cap not to exceed $100,000.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or AEILIC delivered pursuant to
the provisions hereof, to the performance by the Company and AEILIC of their
respective covenants and other obligations hereunder, and to the following
further conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by
the Commission, and any request on the part of the Commission for
additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriters. A prospectus containing
the Rule 430A Information shall have been filed with the Commission in
accordance with Rule 424(b) (or a post-effective amendment providing
such information shall have been filed and declared effective in
accordance
12
with the requirements of Rule 430A) or, if the Company has
elected to rely upon Rule 434, a Term Sheet shall have been filed with
the Commission in accordance with Rule 424(b).
(b) OPINION OF COUNSEL FOR COMPANY. At Closing Time, the
Representatives shall have received the opinions, each dated as of
Closing Time, of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois),
outside counsel for the Company and AEILIC, and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief
Financial Officer and General Counsel of the Company and AEILIC,
together with signed or reproduced copies of such letters for each of
the other Underwriters to the effect set forth in Exhibit A hereto,
subject to customary assumptions and qualifications reasonably
satisfactory to counsel for the Underwriters. In giving such opinions
each such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the laws of the State of Illinois or the State
of Iowa, as applicable, and the federal law of the United States, upon
the opinions of counsel satisfactory to the Representatives. Each such
counsel may also state that, insofar as such opinion involves factual
matters, such counsel has relied, to the extent they deem proper, upon
certificates of officers of the Company and its Subsidiaries and
certificates of public officials.
(c) OPINION OF COUNSEL FOR UNDERWRITERS. At Closing Time, the
Representatives shall have received the opinion, dated as of Closing
Time, of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of
the other Underwriters with respect to the incorporation and authority
of the Company and AEILIC, the validity of the Securities delivered at
the Closing Time, the Registration Statement, the Prospectus, the
Purchase Agreement, the Indenture and other related matters as the
Representatives may require. In giving such opinion such counsel may
rely, as to all matters governed by the laws of jurisdictions other
than the law of the State of Illinois and the federal law of the United
States, upon the opinions of counsel satisfactory to the
Representatives. Such counsel may also state that, insofar as such
opinion involves factual matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and its
subsidiaries and certificates of public officials.
(d) OFFICERS' CERTIFICATE. At Closing Time, the
Representatives shall have received a certificate of the President of
the Company and AEILIC and of the chief financial officer of the
Company and AEILIC, dated as of Closing Time, to the effect that (i)
there shall not have been, since the respective dates as of which
information is given in the Prospectus, any Material Adverse Effect,
(ii) the representations and warranties in Section 1(a) hereof are true
and correct in all material respects with the same force and effect as
though expressly made at and as of Closing Time (provided that those
representations and warranties which are qualified by the words
"material," "Material Adverse Effect" or words of similar import or
effect shall be true and correct in all respects with the same force
and effect as though expressly made at and as of Closing Time), (iii)
each of the Company and AEILIC have complied in all material respects
with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop
order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or
are pending or, to the knowledge of the Company or AEILIC, threatened
by the Commission.
13
(e) ACCOUNTANT'S COMFORT LETTER. At the time of the execution
of this Agreement, the Representatives shall have received from Ernst &
Young LLP a letter dated such date, in form and substance reasonably
satisfactory to the Representatives, together with signed or reproduced
copies of such letter for each of the other Underwriters 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 in the
Registration Statement and the Prospectus.
(f) BRING-DOWN COMFORT LETTER. At Closing Time, the
Representatives shall have received from Ernst & Young LLP a letter,
dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (e) of
this Section, except that the specified date referred to shall be a
date not more than three business days prior to Closing Time.
(g) MAINTENANCE OF RATING. At Closing Time, the Securities
shall be rated at least "BBB-" by Standard & Poor's Ratings Group, a
division of ▇▇▇▇▇▇-▇▇▇▇, Inc., and the Company shall have delivered to
the Representatives a letter from such rating agency, or other evidence
satisfactory to the Representatives, confirming that the Securities
have such ratings; and since the date of this Agreement, there shall
not have occurred a downgrading in the rating assigned to the
Securities or any of the Company's other securities or the Company's or
any Insurance Subsidiary's financial strength or claims paying ability
by A.M. Best & Co. or any "nationally recognized statistical rating
agency," as that term is defined by the Commission for purposes of Rule
436(g)(2) under the 1933 Act, and no such organization shall have
publicly announced that it has under surveillance or review its rating
of the Securities or any of the Company's other securities or the
Company's financial strength or claims paying ability.
(h) APPROVAL OF LISTING. At Closing Time, the Securities shall
have been approved for listing on the New York Stock Exchange, subject
only to official notice of issuance.
(i) ADDITIONAL DOCUMENTS. At Closing Time, counsel for the
Underwriters shall have been furnished with such documents and opinions
as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Securities as herein contemplated, or
in order to evidence the accuracy of any of the representations or
warranties, or the fulfillment of any of the conditions, herein
contained; and all proceedings taken by the Company in connection with
the issuance and sale of the Securities as herein contemplated shall be
reasonably satisfactory in form and substance to the Representatives
and counsel for the Underwriters.
(j) TERMINATION OF AGREEMENT. If any condition specified in
this Section shall not have been fulfilled in all material respects
when and as required to be fulfilled (provided that any such condition,
including the certification required under Section 5(d)(ii) of this
Agreement, which is qualified by the words "material," "Material
Adverse Effect" or words of similar import or effect, shall be
fulfilled in all respects), this Agreement may be terminated by the
Representatives by notice to the Company at any
14
time at or prior to Closing Time, and such termination shall be without
liability of any party to any other party except as provided in Section
4 and except that Sections 6 and 7 shall survive any such termination
and remain in full force and effect.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION OF UNDERWRITERS. The Company and AEILIC, jointly
and severally, each agrees to indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, insofar as such losses, liabilities,
claims, damages and expenses arise out of any untrue statement or
alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), including the Rule
430A Information and the Rule 434 Information, if applicable, or the
omission or alleged omission therefrom of a material fact required to
be stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact included in any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such settlement is effected
with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, Inc.), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under (i) or (ii) above;
PROVIDED, HOWEVER, that the Company and AEILIC will not be liable in any such
case to the extent any loss, liability, claim, damage or expense arises out of
any untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with written information furnished to the
Company or AEILIC by any Underwriter through ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, Inc.
expressly for use in the Registration Statement (or any amendment thereto),
including the Rule 430A Information and the Rule 434 Information, if applicable,
or any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto);
15
PROVIDED, FURTHER, that such indemnity with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter (or any such other
person) from whom the person asserting any such loss, liability, claim, damage
or expense purchased Securities which are the subject thereof to the extent that
any such loss, liability, claim, damage or expense results from the fact that
such Underwriter failed to send or give a copy of the Prospectus (as amended or
supplemented) to such person at or prior to the confirmation of the sale of such
Securities to such person in any case where such delivery is required by the
1933 Act and arises out of or is based upon any untrue statement or omission of
a material fact contained in such preliminary prospectus that was corrected in
the Prospectus (or any amendment or supplement thereto) unless such failure to
deliver the Prospectus (as amended or supplemented) was the result of
noncompliance by the Company with Section 3(d) of this Agreement.
(b) INDEMNIFICATION OF COMPANY, AEILIC, DIRECTORS AND OFFICERS. Each
Underwriter severally agrees to indemnify and hold harmless the Company, AEILIC
and each of the Company's directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section (with the Company being
substituted for ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, Inc. in clause (ii) thereof), as
incurred, but only with respect to untrue statements or omissions, or alleged
untrue statements or omissions, made in the Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any preliminary prospectus or the Prospectus (or
any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company or AEILIC by such Underwriter
through ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, Inc. expressly for use in the Registration
Statement (or any amendment thereto) or such preliminary prospectus or the
Prospectus (or any amendment or supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve such indemnifying
party from any liability hereunder to the extent it is not materially prejudiced
as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. In the
case of parties indemnified pursuant to Section 6(a) above, counsel to the
indemnified parties shall be selected by ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, Inc., and,
in the case of parties indemnified pursuant to Section 6(b) above, counsel to
the indemnified parties shall be selected by the Company. An indemnifying party
may participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
16
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. CONTRIBUTION. If the indemnification provided for in Section
6 hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company and AEILIC
on the one hand and the Underwriters on the other hand from the offering of the
Securities pursuant to this Agreement or (ii) if the allocation provided by
clause (i) 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 AEILIC on the one hand and
of the Underwriters on the other hand in connection with the statements or
omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company and AEILIC on the one
hand and the Underwriters on the other hand in connection with the offering of
the Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and AEILIC and the total underwriting discount received by the
Underwriters, in each case as set forth on the cover of the Prospectus, or, if
Rule 434 is used, the corresponding location on the Term Sheet, bear to the
aggregate initial public offering price of the Securities as set forth on such
cover.
The relative fault of the Company and AEILIC on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether any such untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company and AEILIC or by the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
17
The Company, AEILIC and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 7 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 equitable considerations referred to above in this Section 7. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 7 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any 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 ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Section 7 are several in
proportion to the principal amount of Securities set forth opposite their
respective names in Schedule A hereto and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company, and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. TERMINATION OF AGREEMENT.
(a) TERMINATION; GENERAL. The Representatives may terminate this
Agreement, by notice to the Company, at any time at or prior to Closing Time (i)
if there has occurred any material adverse change in the financial markets in
the United States, any outbreak of hostilities or escalation thereof or other
calamity or crisis or any change or development involving a prospective change
in national or international political, financial or economic conditions, in
each case the effect of which is such as to make it, in the good faith judgment
of the Representatives, impracticable to market the Securities or to enforce
contracts for the sale of the
18
Securities, (ii) if trading generally on the American Stock Exchange or the
New York Stock Exchange or in the Nasdaq National Market has been suspended
or materially limited, or (iii) if a banking moratorium has been declared by
either Federal, New York or Iowa authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this
Section 9, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
6 and 7 shall survive such termination and remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or more
of the Underwriters shall fail at Closing Time to purchase the Securities which
it or they are obligated to purchase under this Agreement (the "Defaulted
Securities"), the Representatives shall have the right, within 24 hours
thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms herein set forth; if, however, the Representatives shall not have
completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10%
of the aggregate principal amount of the Securities to be purchased
hereunder, each of the non-defaulting Underwriters shall be obligated,
severally and not jointly, to purchase the full amount thereof in the
proportions that their respective underwriting obligations hereunder
bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the
aggregate principal amount of the Securities to be purchased hereunder,
this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Representatives or the Company shall have the
right to postpone Closing Time for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to the Representatives at the offices of ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ and ▇▇▇▇▇, Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, attention of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇; and notices to the Company and AEILIC
shall be directed to it at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇▇ ▇. ▇▇▇▇▇.
19
SECTION 12. PARTIES. This Agreement shall each inure to the benefit of
and be binding upon the Underwriters, the Company and AEILIC and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriters, the Company and AEILIC and their respective successors
and the controlling persons and officers and directors referred to in Sections 6
and 7 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters, the Company and
AEILIC and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities from
any Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 13. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. ALL
SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 14. EFFECT OF HEADINGS. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
SECTION 15. COUNTERPARTS. This Agreement may be executed in two (2) or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
SECTION 16. REGULATORY APPROVAL. Not later than five (5) business
days following the date of this Agreement, AEILIC shall file this Agreement
with the Iowa Department of Insurance to obtain approval under Section 521A.5
of the Iowa Insurance Code and the rules and regulations promulgated
thereunder. Each of the Company and AEILIC agrees to use their respective
reasonable efforts to obtain such approval from the Iowa Department of
Insurance. Notwithstanding any other provision of this Agreement, this
Agreement shall become effective as against, and shall be binding upon,
AEILIC only upon AEILIC obtaining such approval, and such approval shall be
retroactive for all purposes hereof to the date of execution of this
Agreement.
* * * * *
20
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and AEILIC a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement between the Underwriters, the Company and AEILIC in accordance
with its terms.
Very truly yours,
AMERICAN EQUITY INVESTMENT
LIFE HOLDING COMPANY
By
-------------------------------------------
Title:
AMERICAN EQUITY INVESTMENT
LIFE INSURANCE COMPANY
By
-------------------------------------------
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, INC.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Inc.
SAMCO capital Markets, a Division of
Service Asset Management Company
First Tennessee Securities Corp.
BB&T Capital Markets, a Division of
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇▇, Inc.,
by ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc.
By
--------------------------------------------------
Authorized Signatory
For themselves and as Representatives of
the other Underwriters named in Schedule A hereto.
21
SCHEDULE A
Principal
Amount of
Name of Underwriter Securities
------------------- -------------
▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, Inc....................................
Friedman, Billings, ▇▇▇▇▇▇ & Co., Inc...........................
SAMCO Capital Markets, a Division of Service Asset Management
Company.........................................................
First Tennessee Securities
Corp............................................................
BB&T Capital Markets, a Division of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇▇▇,
Inc.............................................................
------------
Total............................................................ $150,000,000
============
Sch A-1
SCHEDULE B
AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY
$150,000,000 Senior Notes due 2012
1. The initial public offering price of the Securities shall be __% of
the principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Underwriters for the Securities
shall be __% of the principal amount thereof.
3. The interest rate on the Securities shall be __% per annum.
4. The Securities will mature on ____________, 2012, unless earlier
redeemed at the option of the Company in accordance with the terms of such
Securities.
Sch B-1
EXHIBIT A
FORM OF OPINIONS OF COUNSEL TO THE COMPANY
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
The form of opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Illinois) is as
follows:
(i) AEILIC New York has been duly incorporated and is validly
existing as a stock life insurance company in good standing under the
laws of the State of New York.
(ii) AEILIC New York has 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 (except in those jurisdictions where the
concept of good standing is not recognized) under the laws of each
jurisdiction in which the ownership or leasing of its property or the
conduct of its business requires such qualification, except where the
failure so to qualify or to be in good standing would not reasonably be
expected to have a Material Adverse Effect.
(iii) The Indenture constitutes a valid and binding agreement
of the Company, enforceable against the Company in accordance with its
terms.
(iv) When executed and authenticated in accordance with the
provisions of the Indenture and issued and delivered by the Company
against payment therefor in accordance with the terms of the
Purchase
Agreement, the Securities will constitute valid and binding obligations
of the Company entitled to the benefits of the Indenture and
enforceable against the Company in accordance with their terms.
(v) The Securities and the Indenture conform as to legal
matters in all material respects to the descriptions thereof contained
in the Prospectus.
(vi) The Registration Statement, at the time it became
effective, and the Prospectus, as of its date, appeared on their face
to be appropriately responsive in all material respects to the
requirements of the Securities Act and the rules and regulations
thereunder except that in each case we do not express any opinion as to
the financial statements and schedules and other financial data
included therein or excluded therefrom, or the exhibits thereto, and we
do not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or
the Prospectus.
(vii) The statements in the Prospectus under the caption
"Description of the Notes," insofar as such statements purport to
summarize certain provisions of the documents referred to therein,
fairly summarize such provisions in all material respects.
Exh. A-1
(viii) The statements set forth in the Prospectus under the
captions "Certain United States Federal Tax Consequences" and "ERISA
Considerations," insofar as such statements purport to summarize
certain provisions of the laws referred to therein, fairly summarize
such provisions in all material respects.
(ix) Except for approval of the Iowa Department of Insurance
with respect to execution of the
Purchase Agreement by AEILIC,
no Governmental Approval which has not been obtained or
taken and is not in full force and effect is required to authorize, or
is required in connection with, the execution or delivery of the
Purchase Agreement, the Indenture or the Securities (collectively, the
"Transaction Documents") by the Company or the consummation by the
Company of the transactions contemplated thereby.
(x) Except for approval of the Iowa Department of Insurance
with respect to execution of the
Purchase Agreement by AEILIC,
the execution and delivery by the Company of each of the
Transaction Documents and the consummation by the Company of the
transactions contemplated thereby, including the issuance and sale of
the Securities, will not violate or conflict with, or result in any
contravention of, any applicable law or applicable order.
(xi) The Company is not, and upon application of the proceeds
as described under the caption "Use of Proceeds" in the Prospectus,
will not be, an "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
We have been orally advised by the Commission that the
Indenture has been qualified under the Trust Indenture Act and the
Registration Statement was declared effective under the Securities Act
at [o] [p.m.] on July [o], 2002, and we have been orally advised by the
Commission that no stop order suspending the effectiveness of the
Registration Statement has been issued and, to the best of our
knowledge, no proceedings for that purpose have been instituted or are
pending or threatened by the Commission.
In addition, we have participated in conferences with officers
and other representatives of the Company, counsel for the Company,
representatives of the independent accountants of the Company and you
and your counsel at which the contents of the Registration Statement
and the Prospectus and related matters were discussed. We did not
participate in the preparation of the Incorporated Documents but have,
however, reviewed such documents and discussed the business and affairs
of the Company with officers and other representatives of the Company.
Although we are not passing upon, and do not assume any responsibility
for, the accuracy, completeness or fairness of the statements contained
in the Registration Statement or the Prospectus and have made no
independent check or verification thereof (except to the limited extent
referred to in paragraphs (vii) and (viii) above), on the basis of the
foregoing, no facts have come to our attention that have led us to
believe that the Registration Statement, at the time it became
effective, contained an untrue statement of a material fact or omitted
to state any material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectus,
as of its date and as of the date hereof, contained or contains an
untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading,
except that we express no opinion or belief with respect to the
financial statements, schedules and other financial data included or
Exh. A-2
incorporated by reference therein or excluded therefrom or the exhibits
to the Registration Statement including the Form T-1.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of the laws of the State of New York,
upon the opinion of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP and (B) as
to matters of fact (but not as to legal conclusions), to the extent
they deem proper, on certificates of responsible officers of the
Company and public officials.
The form of opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, General Counsel to the Company, is as
follows:
(i) The Company has been duly incorporated and is validly
existing in good standing under the laws of the State of Iowa, and
AEILIC has been duly incorporated and is validly existing in good
standing under the laws of the State of Iowa.
(ii) Each of the Company and AEILIC has corporate power and
authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus and
to enter into and perform its obligations under the
Purchase Agreement.
(iii) Each of the Company and AEILIC is duly qualified to
transact business as a foreign corporation and is in good standing
(except in those jurisdictions where the concept of good standing is
not recognized) in each jurisdiction in which the ownership or leasing
of its properties or the conduct of its business requires such
qualification, except where the failure so to qualify or to be in good
standing would not reasonably be expected to result in a Material
Adverse Effect.
(iv) The Company has an authorized capitalization as set forth
in the Prospectus.
(v) Except as otherwise disclosed in the Registration
Statement, all of the issued and outstanding capital stock of each
Subsidiary has been duly authorized and validly issued, is fully paid
and non-assessable and, to the best of my knowledge, is owned by the
Company, directly or through subsidiaries, free and clear of any
security interest, mortgage, pledge, lien, encumbrance or claim, except
for such security interests, mortgages, pledges, liens, encumbrances or
claims that are immaterial to the Company and its Subsidiaries taken as
a whole.
(vi) The
Purchase Agreement has been duly authorized, executed
and delivered by the Company and AEILIC.
(vii) The Indenture has been duly authorized, executed and
delivered by the Company.
(viii) The Securities have been duly authorized, executed
and delivered by the Company.
Exh. A-3
(ix) To the best of my knowledge, except as otherwise
disclosed in the Registration Statement, there is not pending nor
threatened any action, suit, proceeding, inquiry or investigation, to
which the Company or any Subsidiary is a party, or to which the
property of the Company or any Subsidiary is subject, before or brought
by any court or governmental agency or body, domestic or foreign, which
would reasonably be expected to result in a Material Adverse Effect, or
which would reasonably be expected to materially and adversely affect
the consummation of the transactions contemplated in the
Purchase
Agreement or the performance by the Company of its obligations
thereunder.
(x) The statements in the Prospectus under the captions "Risk
Factors--Changes in State and Federal Regulation May Affect
Profitability," "Risk Factors--We Face Risks Relating to Litigation,"
"Business--Reinsurance," "Business--Regulation," "Business--Legal
Proceedings," "Business--Property", "Business--Regulatory Matters",
"Business--Litigation" and "Certain Transactions," and in the
Registration Statement under Item 14, insofar as such statements
purport to summarize certain provisions of the laws, charters, bylaws
or legal proceedings referred to therein, fairly summarize such
provisions in all material respects.
(xi) Except for approval of the Iowa Department of Insurance
with respect to execution of the Purchase Agreement by AEILIC,
no Governmental Approval, which has not been obtained or
taken and is not in full force and effect, is required to authorize, or
is required in connection with, the execution or delivery of the
Purchase Agreement, the Indenture or the Securities (collectively, the
"Transaction Documents") by the Company or the consummation by the
Company of the transactions contemplated thereby.
(xii) Except for approval of the Iowa Department of Insurance
with respect to execution of the Purchase Agreement by AEILIC,
the execution and delivery by the Company of each of the
Transaction Documents and the consummation by the Company of the
transactions contemplated thereby, including the issuance and sale of
the Securities, will not (a) conflict with the Articles of
Incorporation, including Articles of Amendment, and Amended and
Restated Bylaws, (b) constitute a violation of, or a breach or default
under, the terms of any applicable contract or (c) violate or conflict
with, or result in any contravention of, any applicable law or any
applicable order.
(xiii) To the best of my knowledge, there are no persons with
registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise
registered by the Company under the Securities Act as a result of the
offering of the Securities.
In addition, I have participated in conferences with other
officers and representatives of the Company, counsel for the Company,
representatives of the independent accountants of the Company and you
and your counsel at which the contents of the Registration Statement
and the Prospectus and related matters were discussed. Although I am
not passing upon, and do not assume any responsibility for, the
accuracy,
Exh. A-4
completeness or fairness of the statements contained in the
Registration Statement or the Prospectus and have made no independent
check or verification thereof (except to the limited extent referred to
in paragraph (x) above), on the basis of the foregoing, no facts have
come to my attention that have led me to believe that the Registration
Statement, at the time it became effective, contained an untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, as of its date and as of
the date hereof, contained or contains an untrue statement of a
material fact or omitted or omits to state a material fact necessary
in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, except that this opinion
does not address matters with respect to the financial statements,
schedules and other financial data included or incorporated by
reference therein or excluded therefrom or the exhibits to the
Registration Statement including the Form T-1.
In rendering such opinion, such counsel may rely, as to
matters of fact (but not as to legal conclusions), to the extent she
deems proper, on certificates of responsible officers of the Company
and public officials.
▇▇▇. ▇-▇