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EXHIBIT 1.1
$450,000,000
AFLAC INCORPORATED
(a Georgia corporation)
PURCHASE AGREEMENT
April 16, 1999
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
as Representative of the several Initial Purchasers
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
AFLAC Incorporated, a Georgia corporation (the "Company") confirms its
agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other Initial Purchasers named in
Schedule A hereto (collectively, the "Initial Purchasers," which term shall also
include any initial purchaser substituted as hereinafter provided in Section 11
hereof), for whom ▇▇▇▇▇▇▇ ▇▇▇▇▇ is acting as representative (in such capacity,
the "Representative"), with respect to the issue and sale by the Company and the
purchase by the Initial Purchasers, acting severally and not jointly, of the
respective principal amounts set forth in said Schedule A of $450,000,000.00
aggregate principal amount of the Company's Senior Notes due 2009 (the
"Securities"). The Securities are to be issued pursuant to an indenture dated as
of April 21, 1999 (the "Indenture") between the Company and The Bank of New
York, as trustee (the "Trustee"). Securities issued in book-entry form will be
issued to Cede & Co. as nominee of The Depository Trust Company ("DTC") pursuant
to a letter agreement, to be dated as of the Closing Time (as defined in Section
2(b)) (the "DTC Agreement"), among the Company, the Trustee and DTC. The Company
and the Initial Purchasers will also enter into a registration rights agreement,
dated as of April 21, 1999 (the "Registration Rights Agreement").
The Company understands that the Initial Purchasers propose to make an
offering of the Securities on the terms and in the manner set forth herein and
agrees that the Initial Purchasers may resell, subject to the conditions set
forth herein, all or a portion of the Securities to purchasers
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("Subsequent Purchasers") at any time after the date of this Agreement. The
Securities are to be offered and sold through the Initial Purchasers without
being registered under the Securities Act of 1933, as amended (the "1933 Act"),
in reliance upon exemptions therefrom. Pursuant to the terms of the Securities
and the Indenture, investors that acquire Securities may only resell or
otherwise transfer such Securities if such Securities are hereafter registered
under the 1933 Act or if an exemption from the registration requirements of the
1933 Act is available (including the exemption afforded by Rule 144A ("Rule
144A") or Regulation S ("Regulation S") of the rules and regulations promulgated
under the 1933 Act by the Securities and Exchange Commission (the
"Commission")).
The Company has prepared and delivered to each Initial Purchaser copies
of a preliminary offering memorandum dated April 9, 1999 (the "Preliminary
Offering Memorandum") and has prepared and will deliver to each Initial
Purchaser, on the date hereof or the next succeeding day, copies of a final
offering memorandum dated April 16, 1999 (the "Final Offering Memorandum"), each
for use by such Initial Purchaser in connection with its solicitation of
purchases of, or offering of, the Securities. "Offering Memorandum" means, with
respect to any date or time referred to in this Agreement, the most recent
offering memorandum (whether the Preliminary Offering Memorandum or the Final
Offering Memorandum, or any amendment or supplement to either such document),
including exhibits thereto and any documents incorporated therein by reference,
which has been prepared and delivered by the Company to the Initial Purchasers
in connection with their solicitation of purchases of, or offering of, the
Securities.
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Offering Memorandum (or other references of like import) shall be deemed to mean
and include all such financial statements and schedules and other information
which are incorporated by reference in the Offering Memorandum; and all
references in this Agreement to amendments or supplements to the Offering
Memorandum shall be deemed to mean and include the filing of any document under
the Securities Exchange Act of 1934, as amended (the "1934 Act"), which is
incorporated by reference in the Offering Memorandum.
SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents
and warrants to each Initial Purchaser as of the date hereof and as of the
Closing Time referred to in Section 2(b) hereof, and agrees with each Initial
Purchaser, as follows:
(i) Similar Offerings. The Company has not, directly or
indirectly, solicited any offer to buy or offered to sell, and will not,
directly or indirectly, solicit any offer to buy or offer to sell, in the
United States or to any United States citizen or resident, any security
which is or would be integrated with the sale of the Securities in a
manner that would require the Securities to be registered under the 1933
Act.
(ii) Offering Memorandum. The Offering Memorandum does not, and at
the Closing Time will not, include an 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
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circumstances under which they were made, not misleading; provided, that
this representation, warranty and agreement shall not apply to statements
in or omissions from the Offering Memorandum, or any amendment or
supplement thereto, made in reliance upon and in conformity with
information furnished to the Company in writing by any Initial Purchaser
through the Representative expressly for use in the Offering Memorandum.
(iii) Incorporated Documents. The Offering Memorandum as delivered
from time to time shall incorporate by reference the most recent Annual
Report of the Company on Form 10-K filed with the Commission and each
Quarterly Report of the Company on Form 10-Q and each Current Report of
the Company on Form 8-K filed with the Commission since the filing of the
end of the fiscal year to which such Annual Report relates. The documents
incorporated or deemed to be incorporated by reference in the Offering
Memorandum at the time they were or hereafter are filed with the
Commission complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and, when read
together with the other information in the Offering Memorandum, at the
date of the Offering Memorandum and at the Closing Time, do not and will
not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(iv) Independent Accountants. The accountants who certified the
financial statements and supporting schedules included in the Offering
Memorandum are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of Regulation S-X
under the 1933 Act.
(v) Financial Statements. The financial statements, together with
the related schedules and notes, included in the Offering Memorandum
present fairly the financial position of the Company and its consolidated
subsidiaries at the dates indicated and the statement of operations,
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, except for changes in accounting
methods required by FASB, AICPA or the Commission, throughout the periods
involved. The supporting schedules, if any, included in the Offering
Memorandum present fairly in accordance with GAAP the information
required to be stated therein. The selected financial data and the
summary financial information included in the Offering Memorandum present
fairly, in all material respects, the information shown therein and have
been compiled on a basis consistent with that of the audited financial
statements included in the Offering Memorandum.
(vi) No Material Adverse Change in Business. Since the respective
dates as of which information is given in the Offering Memorandum, except
as otherwise stated therein, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its
subsidiaries
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considered as one enterprise (a "Material Adverse Effect"), whether or
not arising in the ordinary course of business, (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 quarterly dividends on the common
stock, par value $.10 per share, of the Company 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.
(vii) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under
the laws of the State of Georgia and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Offering Memorandum and to enter into and perform its
obligations under this Agreement; and the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
other jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure so to qualify or to be in good
standing would not result in a Material Adverse Effect.
(viii) Good Standing of Designated Subsidiaries. Each "significant
subsidiary" of the Company (as such term is defined in Rule 1-02 of
Regulation S-X) (each a "Designated Subsidiary" and, collectively, the
"Designated Subsidiaries") has been duly organized and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the Offering Memorandum and is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business,
except where the failure so to qualify or to be in good standing would
not result in a Material Adverse Effect; except as otherwise disclosed in
the Offering Memorandum, all of the issued and outstanding capital stock
of each Designated 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, claim or equity; none of
the outstanding shares of capital stock of the Designated Subsidiaries
was issued in violation of any preemptive or similar rights arising by
operation of law, or under the charter or by-laws of any Designated
Subsidiary or under any agreement to which the Company or any Designated
Subsidiary is a party. The subsidiaries of the Company other than
Designated Subsidiaries, considered in the aggregate as a single
subsidiary, do not constitute a "significant subsidiary" as defined in
Rule 1-02 of Regulation S-X.
(ix) Capitalization. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Offering Memorandum
in the column entitled "Actual" under the caption "Capitalization"
(except for subsequent issuances, if any, pursuant to this
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Agreement, pursuant to employee benefit plans referred to in the Offering
Memorandum or pursuant to the exercise of convertible securities or
options referred to in the Offering Memorandum).
(x) Authorization of Agreement. This Agreement has been duly
authorized, executed and delivered by the Company.
(xi) Authorization of the Indenture and the Registration Rights
Agreement. The Indenture and the Registration Rights Agreement have been
duly authorized by the Company and, at the Closing Time, will have been
duly executed and delivered by the Company and will constitute valid and
binding agreements of the Company, enforceable against the Company in
accordance with their respective terms, except as rights to
indemnification and contribution may be limited under applicable law and
except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or other similar laws
relating to or affecting enforcement of creditors' rights generally, or
by general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(xii) Authorization of the Securities. The Securities have been
duly authorized and, at the Closing Time, will have been duly executed by
the Company and, when authenticated in the manner provided for in the
Indenture and delivered against payment of the purchase price therefor
(and assuming the due authorization, execution and delivery of the
Indenture by the Trustee) 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 other similar laws
relating to or affecting enforcement of creditors' rights generally, or
by 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.
(xiii) Description of the Securities, the Indenture and the
Registration Rights Agreement. The Securities, the Indenture and the
Registration Rights Agreement will conform in all material respects to
the respective statements relating thereto contained in the Offering
Memorandum and will be in substantially the respective forms previously
delivered to the Initial Purchasers.
(xiv) Absence of Defaults and Conflicts. Neither the Company nor
any of its subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in 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 any of them may be bound, or to which any of the property or
assets of the Company or any of its subsidiaries is subject
(collectively, "Agreements and Instruments") except for such defaults
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that would not result in a Material Adverse Effect; and the execution,
delivery and performance of this Agreement, the Indenture, the
Registration Rights Agreement and the Securities and any other agreement
or instrument entered into or issued or to be entered into or issued by
the Company in connection with the transactions contemplated hereby or
thereby or in the Offering Memorandum and the consummation of the
transactions contemplated herein and in the Offering Memorandum
(including the issuance and sale of the Securities and the use of the
proceeds from the sale of the Securities as described in the Offering
Memorandum under the caption "Use of Proceeds") and compliance by the
Company with its obligations hereunder has been duly authorized by all
necessary corporate action and does 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 a 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 of its
subsidiaries pursuant to, the Agreements and Instruments except for such
conflicts, breaches or defaults or liens, charges or encumbrances that,
singly or in the aggregate, would not result in a Material Adverse
Effect, nor will such action result in any violation of the provisions of
any applicable law, statute, rule, regulation, judgment, order, writ or
decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any of its
subsidiaries or any of their assets or properties, except for such
violations that would not result in a Material Adverse Effect, or in any
violation of the charter or by-laws of the Company or any of its
subsidiaries. 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 of its subsidiaries.
(xv) Absence of Proceedings. Except as disclosed in the Offering
Memorandum, there is no action, suit, proceeding, inquiry or
investigation before or by any court or governmental agency or body,
domestic or foreign, now pending, or, to the knowledge of the Company,
threatened, against or affecting the Company or any subsidiary thereof
which might reasonably be expected to result in a Material Adverse
Effect, or which might reasonably be expected to materially and adversely
affect the properties or assets of the Company or any of its subsidiaries
or the consummation of this Agreement or the performance by the Company
of its obligations hereunder.
(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 Agreement.
(xvii) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and
other authorizations (including, without limitation, insurance licenses
from the insurance regulatory agencies of the various states and
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countries where they conduct insurance-related businesses (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; 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, have a Material Adverse Effect; all of the Governmental
Licenses are valid and in full force and effect, except when the
invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any 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 result in a Material Adverse Effect; and no
insurance regulatory agency or body has issued any order or decree
impairing, restricting or prohibiting the payment of dividends by the
Company's insurance company subsidiaries to the Company.
(xviii) Title to Property. The Company and its subsidiaries have
good and marketable title to all real property owned by the Company and
its subsidiaries and good title to all other properties owned by them, in
each case, free and clear of all mortgages, pledges, liens, security
interests, claims, restrictions or encumbrances of any kind except such
as (a) are described in the Offering Memorandum or (b) do not, singly or
in the aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by
the Company or any of its subsidiaries; and 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 Offering Memorandum, are
in full force and effect, and neither the Company nor any of its
subsidiaries has any notice of any material claim of any sort that has
been asserted by anyone adverse to the rights of the Company or any of
its subsidiaries under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or any subsidiary
thereof to the continued possession of the leased or subleased premises
under any such lease or sublease which would have a Material Adverse
Effect.
(xix) Tax Returns. The Company and its subsidiaries have filed all
federal, state, local and foreign tax returns that are required to be
filed or have duly requested extensions thereof and have paid all taxes
required to be paid by any of them and any related assessments, fines or
penalties, except for any such tax, assessment, fine or penalty that is
being contested in good faith and by appropriate proceedings; and
adequate charges, accruals and reserves have been provided for in the
financial statements referred to in Section 1(a)(v) above in respect of
all federal, state, local and foreign taxes for all periods as to which
the tax liability of the Company or any of its subsidiaries has not been
finally determined or remains open to examination by applicable taxing
authorities.
(xx) Environmental Laws. Except as described in the Offering
Memorandum and except such matters as would not, singly or in the
aggregate, result in a Material Adverse
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Effect, (A) neither the Company nor any of its subsidiaries is in
violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or
administrative order, consent, decree or judgment, relating to pollution
or protection of human health, the environment (including, without
limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or wildlife, including, without limitation, laws and
regulations relating to the release or threatened release of chemicals,
pollutants, contaminants, wastes, toxic substances, hazardous substances,
petroleum or petroleum products (collectively, "Hazardous Materials") or
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials (collectively,
"Environmental Laws"), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements,
(C) there are no pending or, to the knowledge of the Company or any of
its subsidiaries, threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigation or proceedings relating to any
Environmental Law against the Company or any of its subsidiaries, and (D)
there are no events or circumstances of which the Company or any of its
subsidiaries are aware that would form the basis of any liability or
obligation of the Company or any of its subsidiaries, including, without
limitation, any order, decree, plan or agreement requiring clean-up or
remediation, or any action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or any of
its subsidiaries relating to Hazardous Materials or Environmental Laws.
(xxi) Investment Company Act. The Company is not, and upon the
issuance and sale of the Securities as herein contemplated and the
application of the net proceeds therefrom as described in the Offering
Memorandum will not be, an "investment company" as such term is defined
in the Investment Company Act of 1940, as amended.
(xxii) Rule 144A Eligibility. The Securities are eligible for
resale pursuant to Rule 144A and will not be, at the Closing Time, of the
same class as securities listed on a national securities exchange
registered under Section 6 of the 1934 Act, or quoted in a U.S. automated
interdealer quotation system.
(xxiii) No General Solicitation. None of the Company, its
affiliates, as such term is defined in Rule 501(b) under the 1933 Act
("Affiliates"), or any person acting on its or any of their behalf (other
than the Initial Purchasers, as to whom the Company makes no
representation) has engaged or will engage, in connection with the
offering of the Securities, in any form of general solicitation or
general advertising within the meaning of Rule 502(c) under the 1933 Act.
(xxiv) No Registration Required. Subject to compliance by the
Initial Purchasers with the representations and warranties set forth in
Section 2 and the procedures set forth in Section 6 hereof, it is not
necessary in connection with the offer, sale and delivery of the
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Securities to the Initial Purchasers by the Company and to each
Subsequent Purchaser by the Initial Purchasers in the manner contemplated
by this Agreement and the Offering Memorandum to register the Securities
under the 1933 Act or to qualify the Indenture under the Trust Indenture
Act of 1939, as amended.
(xxv) No Directed Selling Efforts. With respect to those
Securities sold in reliance on Regulation S, (A) none of the Company, its
Affiliates or any person acting on its or their behalf (other than the
Initial Purchasers, as to whom the Company makes no representation) has
engaged or will engage in any directed selling efforts within the meaning
of Regulation S and (B) each of the Company and its Affiliates and any
person acting on its or their behalf (other than the Initial Purchasers,
as to whom the Company makes no representation) has complied and will
comply with the offering restrictions requirement of Regulation S.
(xxvi) Statutory Financial Statements. The statutory financial
statements of each of the Company's insurance company subsidiaries from
which certain ratios and other statistical data included or incorporated
or deemed to be incorporated by reference in the Offering Memorandum have
been derived and have been prepared for each relevant period in
conformity with accounting practices prescribed or permitted by the
National Association of Insurance Commissioners and the insurance
department of the state of domicile of each such subsidiary in effect at
such time of preparation ("SAP"), except as otherwise stated therein.
(xxvii) Reinsurance Agreements. All ceded reinsurance agreements
to which the Company's insurance company subsidiaries are a party are in
full force and effect and such subsidiaries are not in violation of, or
in default in the performance, observance or fulfillment of, any
obligation, agreement, covenant or condition contained therein, except
for such violations or defaults which could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect. Such
subsidiaries have not received any notice from any of the other parties
to such agreements that such other party intends not to perform in any
material respect such agreement, and none of such subsidiaries has any
reason to believe that any of the other parties to such agreements will
be unable to perform such agreements, except to the extent that (i) such
subsidiary has established appropriate reserves on its financial
statements or (ii) such nonperformance could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect; and
each of the Company's insurance company subsidiaries is entitled to give
effect in its underwriting results in its most recently filed statutory
financial statements in conformity with SAP for reinsurance ceded
pursuant to such agreements.
(xxviii) Compliance with Insurance Laws. Each insurance company
subsidiary of the Company is in compliance with the requirements of the
insurance laws of the jurisdiction of its incorporation or domicile and
of each other jurisdiction that is applicable to such subsidiary, except
where the failure to comply would not have a Material Adverse Effect.
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(b) Officer's Certificates. Any certificate signed by any officer of
the Company or any of its subsidiaries delivered to the Representative or to
counsel for the Initial Purchasers shall be deemed a representation and warranty
by the Company to each Initial Purchaser as to the matters covered thereby.
SECTION 2. Sale and Delivery to Initial Purchasers; 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 Initial Purchaser, severally and not jointly, and
each Initial Purchaser, 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 Initial Purchaser,
plus any additional principal amount of Securities which such Initial Purchaser
may become obligated to purchase pursuant to the provisions of Section 11
hereof.
(b) Payment. Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the office of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, 425 Lexington Avenue, New York, New York, or at such other place as
shall be agreed upon by the Representative and the Company, at 10:00 A.M. on the
third business day after the date hereof (unless postponed in accordance with
the provisions of Section 11), or such other time not later than ten business
days after such date as shall be agreed upon by the Representative and the
Company (such time and date of payment and delivery being herein called the
"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 Representative for the respective accounts of the Initial Purchasers of
certificates for the Securities to be purchased by them. It is understood that
each Initial Purchaser has authorized the Representative, 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. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not
as the Representative of the Initial Purchasers, may (but shall not be obligated
to) make payment of the purchase price for the Securities to be purchased by any
Initial Purchaser whose funds have not been received by the Closing Time, but
such payment shall not relieve such Initial Purchaser from its obligations
hereunder. The certificates representing the Securities shall be registered in
the name of Cede & Co. pursuant to the DTC Agreement and shall be made available
for examination and packaging by the Initial Purchasers in the City of New York
not later than 10:00 A.M. on the last business day prior to the Closing Time.
(c) Qualified Institutional Buyer. Each Initial Purchaser severally
and not jointly represents and warrants to, and agrees with, the Company that it
is a "qualified institutional buyer" within the meaning of Rule 144A under the
1933 Act (a "Qualified Institutional Buyer") and an "accredited investor" within
the meaning of Rule 501(a) under the 1933 Act (an "Accredited Investor").
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(d) Denominations; Registration. Certificates for the Securities shall
be in such denominations ($1,000 or integral multiples thereof) and registered
in such names as the Representative may request in writing at least one full
business day before the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with each
Initial Purchaser as follows:
(a) Offering Memorandum. The Company, as promptly as possible, will
furnish to each Initial Purchaser, without charge, such number of copies of the
Preliminary Offering Memorandum, the Final Offering Memorandum and any
amendments and supplements thereto and documents incorporated by reference
therein as such Initial Purchaser may reasonably request.
(b) Notice and Effect of Material Events. The Company will immediately
notify each Initial Purchaser, and confirm such notice in writing, of (x) any
filing made by the Company of information relating to the offering of the
Securities with any securities exchange or any other regulatory body in the
United States or any other jurisdiction, and (y) prior to the completion of the
placement of the Securities by the Initial Purchasers as evidenced by a notice
in writing from the Initial Purchasers to the Company, any material changes in
or affecting the earnings, business affairs or business prospects of the Company
and its subsidiaries which (i) make any statement in the Offering Memorandum
false or misleading or (ii) are not disclosed in the Offering Memorandum. In
such event or if during such time any event shall occur as a result of which it
is necessary, in the reasonable opinion of the Company, its counsel, the Initial
Purchasers or counsel for the Initial Purchasers, to amend or supplement the
Final Offering Memorandum in order that the Final Offering Memorandum not
include any untrue statement 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 then existing, the Company will forthwith amend or supplement
the Final Offering Memorandum by preparing and furnishing to each Initial
Purchaser an amendment or amendments of, or a supplement or supplements to, the
Final Offering Memorandum (in form and substance satisfactory in the reasonable
opinion of counsel for the Initial Purchasers) so that, as so amended or
supplemented, the Final Offering Memorandum will not include an 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 existing at the time
it is delivered to a Subsequent Purchaser, not misleading.
(c) Amendment to Offering Memorandum and Supplements. The Company will
advise each Initial Purchaser promptly of any proposal to amend or supplement
the Offering Memorandum, but will not effect any such amendment or supplement to
which the Initial Purchasers shall reasonably object in writing within a
reasonable time after the receipt thereof. Neither the consent of the Initial
Purchasers, nor the Initial Purchasers' delivery of any such amendment or
supplement, shall constitute a waiver of any of the conditions set forth in
Section 5 hereof.
(d) Qualification of Securities for Offer and Sale. The Company will
use its reasonable efforts, in cooperation with the Initial Purchasers, to
qualify the Securities for offering and sale under the applicable securities
laws of such jurisdictions as the Representative may reasonably request and
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will maintain such qualifications in effect as long as required for the sale of
the Securities; provided, however, that the Company shall not be obligated to
file any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified as of the date hereof or to subject itself to taxation in respect
of doing business in any jurisdiction in which it is not otherwise so subject as
of the date hereof.
(e) Rating of Securities. The Company shall take all reasonable action
necessary to enable Standard & Poor's Ratings Services ("S&P"), and ▇▇▇▇▇'▇
Investors Service, Inc. ("Moody's") to provide their respective credit ratings
of the Securities.
(f) DTC. The Company will cooperate with the Representative and use
its best efforts to permit the Securities to be eligible for clearance and
settlement through the facilities of DTC.
(g) 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 Offering
Memorandum under "Use of Proceeds".
(h) Restriction on Sale of Securities. During the period from the date
of the Offering Memorandum to the Closing Time, the Company will not, without
the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, issue, sell,
offer or agree to sell, grant any option for the sale of, or otherwise dispose
of, any other debt securities of the Company or securities of the Company that
are convertible into, or exchangeable for, the Securities or such other debt
securities.
(i) Termination of Obligations. Notwithstanding any provisions of
paragraphs (a), (b) or (c) of this Section 3 to the contrary, the Company's
obligations under paragraphs (a), (b) and (c) shall terminate on the date upon
which the Initial Purchasers cease to hold Securities acquired as part of their
initial distribution, but in any event not later than nine months from the
Closing Time.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company agrees to pay all expenses incident to the
performance of its obligations under this Agreement, including (i) the
preparation, printing and any filing of the Offering Memorandum (including
financial statements and any schedules or exhibits and any document incorporated
therein by reference) and of each amendment or supplement thereto, (ii) the
preparation, printing and delivery to the Initial Purchasers of this Agreement,
any Agreement among Initial Purchasers, the Indenture, the Registration Rights
Agreement and such other documents as may be required in connection with the
offering, purchase, sale and delivery of the Securities, (iii) the preparation,
issuance and delivery of the certificates for the Securities to the Initial
Purchasers, including any charges of DTC in connection therewith, (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(d) hereof, including filing fees and the reasonable fees
and disbursements of counsel for the Initial Purchasers in connection therewith
and in connection with the preparation of the Blue Sky Survey, any supplement
thereto and any Legal Investment Survey; provided, that the Company shall not
pay any other expenses of counsel for the
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Initial Purchasers, (vi) the fees and expenses of the Trustee, including the
fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Securities and (vii) any fees payable in connection with the
rating of the Securities.
(b) Termination of Agreement. If this Agreement is terminated by the
Representative in accordance with the provisions of Section 5 or Section
10(a)(i) hereof, the Company agrees to reimburse the Initial Purchasers for all
of their reasonable out-of-pocket expenses, including the reasonable fees and
disbursements of counsel for the Initial Purchasers.
SECTION 5. Conditions of Initial Purchasers' Obligations. The obligations
of the several Initial Purchasers 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 any of its subsidiaries
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) Opinion of Counsel for Company. At the Closing Time, the
Representative shall have received the opinion, dated as of the Closing Time, of
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq., Senior Vice President and General Counsel of the
Company, and of Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, special counsel for
the Company, in the form set forth in Exhibits A and B hereto, respectively,
together with signed or reproduced copies of each of such letter for each of the
other Initial Purchasers.
(b) Opinion of Counsel for Initial Purchasers. At the Closing Time,
the Representative shall have received the favorable opinion, dated as of the
Closing Time, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Initial Purchasers,
together with signed or reproduced copies of such letter for each of the other
Initial Purchasers, in the form set forth in Exhibit C hereto. 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 New York and the federal law of
the United States, upon the opinions of counsel satisfactory to the
Representative. 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.
(c) Officers' Certificate. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Offering Memorandum, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and the
Representative shall have received a certificate of the President or a Vice
President of the Company and of the chief financial or chief accounting officer
or the assistant financial or assistant accounting officer of the Company, dated
as of the Closing Time, to the effect that (i) there has been no such material
adverse change, (ii) the representations and warranties in Section 1 hereof are
true and correct with the same force and effect as though expressly made at and
as of the Closing Time, and (iii) the Company has complied with all
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agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to the Closing Time.
(d) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representative shall have received from KPMG LLP a letter dated
such date, in form and substance reasonably satisfactory to the Representative,
together with signed or reproduced copies of such letter for each of the other
Initial Purchasers, containing statements and information of the type ordinarily
included in accountants' "comfort letters" to initial purchasers with respect to
the financial statements and certain financial information contained in the
Offering Memorandum.
(e) Bring-down Comfort Letter. At the Closing Time, the Representative
shall have received from KPMG LLP a letter, dated as of the Closing Time, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to subsection (d) of this Section, except that the specified date referred to
shall be a date not more than three business days prior to the Closing Time.
(f) Maintenance of Rating. At the Closing Time, the Securities shall
be rated at least "A2" by Moody's and "A" by S&P, and the Company shall have
delivered to the Representative a letter dated the Closing Time, from each such
rating agency, or other evidence satisfactory to the Representative, 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 debt securities or the financial
strength or claims paying ability of American Family Life Assurance Company of
Columbus, a Georgia corporation ("AFLAC"), by any nationally recognized
securities rating agency, and no such securities rating agency shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of the Securities or any of the Company's
other debt securities or the financial strength or claims paying ability of
AFLAC.
(g) Additional Documents. At the Closing Time, counsel for the Initial
Purchasers shall have been furnished with such documents and opinions as they
may 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 satisfactory in form and substance to the Representative and counsel
for the Initial Purchasers.
(h) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Representative by written notice to the
Company at any time at or prior to the 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 1, 7 and 8 shall survive any such termination
and remain in full force and effect.
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SECTION 6. Subsequent Offers and Resales of the Securities.
(a) Offer and Sale Procedures. Each of the Initial Purchasers,
severally and not jointly, and the Company hereby represents, warrants and
agrees to observe the following procedures in connection with the offer and sale
of the Securities:
(i) Offers and Sales Only to Qualified Institutional Buyers or
Non-U.S. Persons Outside the United States. Offers and sales of the
Securities will be made only by the Initial Purchasers or Affiliates
thereof qualified to do so in the jurisdictions in which such offers or
sales are made. Each such offer or sale shall only be made (A) to persons
whom the offeror or seller reasonably believes to be Qualified
Institutional Buyers or (B) to non-U.S. persons outside the United States
to whom the offeror or seller reasonably believes offers and sales of the
Securities may be made in reliance upon Regulation S.
(ii) No General Solicitation. No general solicitation or general
advertising (within the meaning of Rule 502(c) under the ▇▇▇▇ ▇▇▇) will
be used in the United States in connection with the offering of the
Securities, nor will any directed selling efforts (within the meaning of
Rule 903 under the ▇▇▇▇ ▇▇▇) be conducted.
(iii) Purchases by Non-Bank Fiduciaries. In the case of a non-bank
Subsequent Purchaser of a Security acting as a fiduciary for one or more
third parties, in connection with an offer and sale to such purchaser
pursuant to clause (i) above, each third party shall, in the judgment of
the applicable Initial Purchaser, be a Qualified Institutional Buyer or a
non-U.S. person outside the United States.
(iv) Subsequent Purchaser Notification. Each Initial Purchaser
will take reasonable steps to inform, and cause each of its Affiliates to
take reasonable steps to inform, persons acquiring Securities from such
Initial Purchaser or Affiliate, as the case may be, in the United States
that the Securities (A) have not been and will not be registered under
the 1933 Act, (B) are being sold to them without registration under the
1933 Act in reliance on Rule 144A or in accordance with another exemption
from registration under the 1933 Act, as the case may be, and (C) may not
be offered, sold or otherwise transferred except (1) to the Company, (2)
outside the United States in accordance with Rule 904 of Regulation S, or
(3) inside the United States in accordance with (x) Rule 144A to a person
whom the seller reasonably believes is a Qualified Institutional Buyer
that is purchasing such Securities for its own account or for the account
of a Qualified Institutional Buyer to whom notice is given that the
offer, sale or transfer is being made in reliance on Rule 144A or (y) the
exemption from registration under the 1933 Act provided by Rule 144, if
available.
(v) Minimum Principal Amount. No sale of the Securities to any one
Subsequent Purchaser will be for less than U.S. $1,000 principal amount
and no Security will be issued in a smaller principal amount. If the
Subsequent Purchaser is a non-bank fiduciary acting on
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behalf of others, each person for whom it is acting must purchase at
least U.S. $1,000 principal amount of the Securities.
(vi) Restrictions on Transfer. The transfer restrictions and the
other provisions set forth in Section 2.13 of the Indenture, including
the legend required thereby, shall apply to the Securities except as
otherwise agreed by the Company and the Initial Purchasers. Following the
sale of the Securities by the Initial Purchasers to Subsequent Purchasers
pursuant to the terms hereof, the Initial Purchasers shall not be liable
or responsible to the Company for any losses, damages or liabilities
suffered or incurred by the Company, including any losses, damages or
liabilities under the 1933 Act, arising from or relating to any resale or
transfer of any Security.
(vii) Delivery of Offering Memorandum. Each Initial Purchaser will
deliver to each purchaser of the Securities from such Initial Purchaser,
in connection with its original distribution of the Securities, a copy of
the Offering Memorandum, as amended and supplemented at the date of such
delivery.
(b) Covenants of the Company. The Company covenants with each Initial
Purchaser as follows:
(i) Due Diligence. In connection with the original distribution of
the Securities, the Company agrees that, prior to any offer or resale of
the Securities by the Initial Purchasers, the Initial Purchasers and
counsel for the Initial Purchasers shall have the right to make
reasonable inquiries into the business of the Company and its
subsidiaries. The Company also agrees to provide answers to each
prospective Subsequent Purchaser of Securities who so requests concerning
the Company and its subsidiaries (to the extent that such information is
available or can be acquired and made available to prospective Subsequent
Purchasers without unreasonable effort or expense and to the extent the
provision thereof is not prohibited by applicable law or contractual
obligation) and the terms and conditions of the offering of the
Securities, as provided in the Offering Memorandum.
(ii) Integration. The Company agrees that it will not and will
cause its Affiliates not to make any offer or sale of securities of the
Company of any class if, as a result of the doctrine of "integration"
referred to in Rule 502 under the 1933 Act, such offer or sale would
render invalid (for the purpose of (i) the sale of the Securities by the
Company to the Initial Purchasers, (ii) the resale of the Securities by
the Initial Purchasers to Subsequent Purchasers or (iii) the resale of
the Securities by such Subsequent Purchasers to others) the exemption
from the registration requirements of the 1933 Act provided by Section
4(2) thereof or by Rule 144A or by Regulation S thereunder or otherwise.
(iii) Rule 144A Information. The Company agrees that, in order to
render the Securities eligible for resale pursuant to Rule 144A under the
1933 Act, while any of the Securities are "restricted securities" (as
such term is defined under Rule 144(a)(3) under the
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1933 Act), it will make available, upon request, to any holder of
Securities or prospective purchasers of Securities the information
specified in Rule 144A(d)(4), unless the Company furnishes information to
the Commission pursuant to Section 13 or 15(d) of the 1934 Act (such
information, whether made available to holders or prospective purchasers
or furnished to the Commission, is herein referred to as "Additional
Information").
(iv) Restriction on Repurchases. Until the expiration of two years
after the original issuance of the Securities, the Company will not, and
will cause its Affiliates not to, purchase or agree to purchase or
otherwise acquire any Securities which are "restricted securities" (as
such term is defined under Rule 144(a)(3) under the 1933 Act), whether as
beneficial owner or otherwise (except as agent acting as a securities
broker on behalf of and for the account of customers in the ordinary
course of business in unsolicited brokers' transactions) unless,
immediately upon any such purchase, the Company or any Affiliate shall
submit such Securities to the Trustee for cancellation.
(c) Resale Pursuant to Rule 903 of Regulation S or Rule 144A. Each
Initial Purchaser understands that the Securities have not been and will not be
registered under the 1933 Act and may not be offered or sold within the United
States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the 1933 Act or pursuant to an exemption from
the registration requirements of the 1933 Act. Each Initial Purchaser represents
and agrees that, except as permitted by Section 6(a) above, it has offered and
sold Securities and will offer and sell Securities (i) as part of their
distribution at any time and (ii) otherwise until forty days after the later of
the date upon which the offering of the Securities commences and the Closing
Time, only in accordance with Rule 903 of Regulation S or Rule 144A.
Accordingly, neither the Initial Purchasers, their Affiliates nor any persons
acting on their behalf have engaged or will engage in any directed selling
efforts with respect to Securities, and the Initial Purchasers, their Affiliates
and any person acting on their behalf have complied and will comply with the
offering restriction requirements of Regulation S. Each Initial Purchaser agrees
that at or prior to confirmation of a sale of Securities (other than a sale of
Securities pursuant to Rule 144A), it will have sent to each distributor, dealer
or person receiving a selling concession, fee or other remuneration that
purchases Securities from it or through it during the restricted period a
confirmation or notice to substantially the following effect:
"The Securities covered hereby have not been registered
under the United States Securities Act of 1933, as
amended (the "Securities Act"), and may not be offered
or sold within the United States or to or for the
account or benefit of U.S. persons (i) as part of their
distribution at any time and (ii) otherwise until forty
days after the later of the date upon which the offering
of the Securities commenced and the date of closing,
except in either case in accordance with Regulation S or
Rule 144A under the Securities Act. Terms used above
have the meaning given to them by Regulation S."
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Each Initial Purchaser severally represents and agrees that it has not entered
and will not enter into any contractual arrangements with respect to the
distribution of the Securities, except with its Affiliates or with the prior
written consent of the Company.
SECTION 7. Indemnification.
(a) Indemnification of Initial Purchasers. The Company agrees to
indemnify and hold harmless each Initial Purchaser and each person, if any, who
controls any Initial Purchaser 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, arising out of any untrue statement or alleged
untrue statement of a material fact contained in any Preliminary Offering
Memorandum or the Final Offering Memorandum (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 7(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 ▇▇▇▇▇▇▇ ▇▇▇▇▇,
except to the extent otherwise expressly provided in Section 7(c)
hereof), 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 this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising 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 by any
Initial Purchaser through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Offering
Memorandum (or any amendment thereto); provided further, that the foregoing
indemnity with respect to the Preliminary Offering Memorandum shall not inure to
the benefit of any Initial Purchaser (or to the benefit of any person
controlling such Initial Purchaser) from whom the person asserting any such
losses, claims, damages or liabilities purchased Securities if (i) such untrue
statement or omission made in the Preliminary Offering Memorandum was eliminated
or remedied in the Final Offering Memorandum (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto to such
Initial Purchaser prior to confirmation of the sale of such
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Securities to such person by such Initial Purchaser) and (ii) a copy of the
Final Offering Memorandum (as so amended and supplemented) was not furnished to
such person at or prior to the written confirmation of the sale of such
Securities to such person, unless such failure to deliver was a result of
non-compliance by the Company with Sections 3(a) or 3(b), and the claims
asserted by such person do not include allegations of other untrue statements or
omissions of material facts made in the Final Offering Memorandum which
allegations are upheld in a final judgment.
(b) Indemnification of Company, Directors and Officers. Each Initial
Purchaser severally agrees to indemnify and hold harmless the Company, its
directors, its officers 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, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Offering Memorandum in reliance upon and in conformity
with written information furnished to the Company by such Initial Purchaser
through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Offering Memorandum.
(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 respect of which 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 7(a)
above, counsel to the indemnified parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇,
and, in the case of parties indemnified pursuant to Section 7(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
indemnification or contribution could be sought under this Section 7 or Section
8 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
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nature contemplated by Section 7(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. Notwithstanding the immediately preceding sentence,
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 shall not be liable for any settlement of the nature
contemplated by Section 7(a)(ii) effected without its prior written consent if
such indemnifying party (i) reimburses such indemnified party in accordance with
such request to the extent it considers such request to be reasonable and (ii)
provides written notice to the indemnified party substantiating the unpaid
balance as unreasonable, in each case prior to the date of such settlement.
SECTION 8. Contribution. If the indemnification provided for in Section 7
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 on the one
hand and the Initial Purchasers 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 on the one hand and of the
Initial Purchasers 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 on the one hand and the
Initial Purchasers 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 the total underwriting discount received by the Initial
Purchasers bear to the aggregate initial offering price of the Securities.
The relative fault of the Company on the one hand and the Initial
Purchasers 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 or by the Initial Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
The Company and the Initial Purchasers agree that it would not be just
and equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation (even if the Initial Purchasers 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 8. The
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aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 8 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 8, no Initial Purchaser
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
Initial Purchaser 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 ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, each person, if any, who controls an
Initial Purchaser 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 Initial
Purchaser, and each director of the Company, each officer of the Company who
signed the Offering Memorandum, 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 Initial
Purchasers' respective obligations to contribute pursuant to this Section 8 are
several in proportion to the principal amount of Securities set forth opposite
their respective names in Schedule A hereto and not joint.
SECTION 9. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement, or in certificates of officers of the Company submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Initial Purchaser or controlling
person, or by or on behalf of the Company, and shall survive delivery of the
Securities to the Initial Purchasers.
SECTION 10. Termination of Agreement.
(a) Termination; General. The Representative may terminate this
Agreement, by notice to the Company, at any time at or prior to the Closing Time
(i) if there has been, since the time of execution of this Agreement or since
the respective dates as of which information is given in the Offering
Memorandum, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (ii) if there has occurred any
material adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or
21
22
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 judgment of the Representative, impracticable to
market the Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in any securities of the Company has been suspended or limited
by the Commission or the New York Stock Exchange, Inc., or if trading generally
on the American Stock Exchange or the New York Stock Exchange, Inc. or in the
NASDAQ National Market System has been suspended or limited, or minimum or
maximum prices for trading have been fixed, or maximum ranges for prices have
been required, by any of said exchanges or by such system or by order of the
Commission, the National Association of Securities Dealers, Inc. or any other
governmental authority, or (iv) if a banking moratorium has been declared by
either Federal, New York or Georgia authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, 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 1, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 11. Default by One or More of the Initial Purchasers. If one or
more of the Initial Purchasers shall fail at the Closing Time to purchase the
Securities which it or they are obligated to purchase under this Agreement (the
"Defaulted Securities"), the Representative shall have the right, but not the
obligation, within 24 hours thereafter, to make arrangements for one or more of
the non-defaulting Initial Purchasers, or any other Initial Purchasers, 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; provided, however,
that if the Representative shall not have completed such arrangements within
such 24-hour period, then this Agreement shall terminate without liability on
the part of any non-defaulting Initial Purchaser.
No action pursuant to this Section shall relieve any defaulting Initial
Purchaser 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 Representative or the Company shall have the right
to postpone the Closing Time for a period not exceeding seven days in order to
effect any required changes in the Offering Memorandum or in any other documents
or arrangement. As used herein, the term "Initial Purchaser" includes any person
substituted for an Initial Purchaser under this Section 11.
SECTION 12. 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 Initial
Purchasers shall be directed to the Representative at ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, attention of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇; notices to the Company shall be directed to it at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, attention of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
22
23
SECTION 13. Parties. This Agreement shall each inure to the benefit of
and be binding upon the Initial Purchasers and the Company 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
Initial Purchasers and the Company and their respective successors and the
controlling persons and officers and directors referred to in Sections 7 and 8
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 Initial Purchasers and the
Company 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 Initial Purchaser shall be deemed to be a successor by reason merely of such
purchase.
SECTION 14. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 15. Effect of Headings. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.
[Rest of page intentionally left blank.]
23
24
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Initial Purchasers and the Company in accordance with its terms.
Very truly yours,
AFLAC INCORPORATED
By:
-------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ &
▇▇▇▇▇ INCORPORATED
By:
----------------------
Authorized Signatory
For itself and as Representative of the other Initial Purchasers named in
Schedule A hereto.
24
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SCHEDULE A
Principal
Amount of
Name of Initial Purchaser Securities
------------------------- ----------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated........... $247,500,000
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇................................. 50,625,000
First Union Capital Markets Corp............................. 50,625,000
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC........................ 50,625,000
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. ................................... 50,625,000
------------
Total ............................................. $450,000,000
----- ============
Sch A - 1
26
SCHEDULE B
AFLAC INCORPORATED
$450,000,000 Senior Notes due 2009
1. The initial offering price of the Securities shall be 99.733% of the
principal amount thereof, plus accrued interest, if any, from the date of
issuance.
2. The purchase price to be paid by the Initial Purchasers for the
Securities shall be 99.083% of the principal amount thereof at maturity.
3. The interest rate on the Securities shall be 6 1/2% per annum and will
be payable semi-annually on April 15 and October 15 of each year commencing
October 15, 1999.
4. The Securities will mature on April 15, 2009.
5. The Securities will be redeemable at the option of the Company, in
whole or in part, at any time and from time to time, upon not less than 30 nor
more than 60 days' notice, at a redemption price equal to (i) 100% of the
principal amount of the Securities being redeemed, plus accrued and unpaid
interest thereon and Additional Interest, if any, to the redemption date, and
(ii) a make-whole amount, if any.
Sch B - 1
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Exhibit A
FORM OF OPINION OF ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ESQ.
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
April 21, 1999
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
First Union Capital Markets Corp.
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: AFLAC Incorporated 6 1/2% Senior Notes
Due 2009
Ladies and Gentlemen:
I am the Senior Vice President, Secretary & General Counsel of
AFLAC Incorporated, a Georgia corporation (the "Company"). This opinion is
delivered in connection with the issuance and sale by the Company of
$450,000,000 aggregate principal amount of the Company's 6 1/2% Senior Notes Due
2009 (the "Senior Notes") pursuant to the Purchase Agreement, dated as of April
16, 1999, between you and the Company (the "Purchase Agreement").
This opinion is being furnished pursuant to Section 5(a) of the
Purchase Agreement. Capitalized terms not otherwise defined herein have the
respective meanings set forth in the Purchase Agreement or, if not therein
defined, the Indenture, dated as of April 21, 1999 (the "Indenture"), between
the Company and The Bank of New York, as Trustee (the "Trustee").
In connection with this opinion I have examined and am familiar
with originals or copies, certified or otherwise identified to my satisfaction,
of (a) the Offering Memorandum,
A - 1
28
dated April 16, 1999, relating to the Senior Notes (the "Offering Memorandum");
(b) an executed copy of the Purchase Agreement; (c) an executed copy of the
Indenture (including the form set forth therein of certificates evidencing the
Senior Notes); (d) an executed copy of the Registration Rights Agreement dated
April 21, 1999, between you and the Company (the "Registration Rights
Agreement"); (e) the Certificate of Incorporation of the Company and each of its
subsidiaries, as amended to date; (f) the By-laws of the Company and each of its
subsidiaries, as amended to date; (g) certain resolutions of the Board of
Directors of the Company and the Note Pricing Committee of the Board of
Directors of the Company relating to the issuance and sale of the Senior Notes
and (h) such other documents as I have deemed necessary or appropriate as a
basis for the opinions set forth below. I have also examined the originals or
copies, certified or otherwise identified to my satisfaction, of such records of
the Company and such agreements, certificates of public officials, certificates
of officers or other representatives of the Company and others, and such other
statements, documents, certificates and corporate or other records as I have
deemed necessary or appropriate as a basis for the opinions set forth below.
In my examination, I have assumed the genuineness of all
signatures, the legal capacity of all natural persons, the authenticity of all
documents submitted to me as originals, the conformity to original documents of
all documents submitted to me as certified or photostatic copies and the
authenticity of the originals of such copies. In making my examination of
documents executed by parties other than the Company, I have assumed that such
parties had the power, corporate or other, to enter into and perform all
obligations thereunder and have also assumed the due authorization by all
requisite action, corporate or other, and execution and delivery by such parties
of such documents and the validity and binding effect of such documents on such
parties thereof. As to any facts material to the opinions expressed herein which
were not independently established or verified, I have relied upon oral or
written statements and representations of officers and other representatives of
the Company, you and others. For purposes of the foregoing, I note that the
Offering Memorandum has been prepared in the context of an offering of the
Senior Notes pursuant to Rule 144A promulgated under the Securities Act of 1933,
as amended (the "Securities Act") and not as part of a registration statement
under the Securities Act.
I am admitted to the Bar in the State of Georgia and I do not
express any opinion as to the laws of any other jurisdiction other than the laws
of the United States of America to the extent referred to specifically herein.
In rendering the opinions expressed herein, I express no opinion
as to the application or effect of any fraudulent transfer or similar law on the
Purchase Agreement, the Senior Notes, the Registration Rights Agreement or the
Indenture or any of the transactions contemplated thereby.
Based upon and subject to the foregoing, I am of the opinion that:
A - 2
29
1. 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 the corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Offering
Memorandum 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.
2. Each subsidiary of the Company listed on Schedule I hereto
(each, a "Material Subsidiary") has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Offering
Memorandum 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 Material Subsidiary have been duly and
validly authorized and issued, and are fully paid and non-assessable, and is
owned by the Company, directly or through subsidiaries.
3. The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
4. The Senior Notes have been duly authorized, executed and
delivered by the Company.
5. Each of the Registration Rights Agreement and the Indenture has
been duly authorized, executed and delivered by the Company.
6. Except as set forth in the Offering Memorandum, I know of no
legal or governmental actions, suits or proceedings pending or, to my knowledge,
threatened against the Company or any of its subsidiaries wherein an unfavorable
ruling, decision or finding would have a material adverse effect on the Company
and its subsidiaries, taken as a whole, or on the ability of the Company to
perform its obligations under the Purchase Agreement, the Indenture, the
Registration Rights Agreement or the Senior Notes or to consummate the
transactions contemplated by the Offering Memorandum.
7. The statements contained in the Offering Memorandum under the
heading "Description of Certain Indebtedness", insofar as such statements
purport to summarize certain provisions of agreements, fairly summarize such
provisions in all material respects. To my knowledge, there are no franchises,
contracts, indentures, mortgages, loan agreements, notes, leases or other
instruments that would be required to be described in the Offering Memorandum
A - 3
30
that are not described or referred to in the Offering Memorandum other than
those described or referred to therein or incorporated by reference thereto.
8. Neither the issue and sale of the Senior Notes by the Company,
the execution and delivery by the Company of the Purchase Agreement, the
Registration Rights Agreement and the Indenture (together, the "Documents"), nor
the consummation of any other of the transactions contemplated by the Documents,
each in accordance with its terms, will conflict with, result in a breach or
violation of, or constitute a default under the Certificate of Incorporation or
By-laws of the Company or any subsidiary or to the best of my knowledge, any
agreement or other instrument binding upon the Company or any subsidiary that is
described or referred to in the Offering Memorandum or incorporated by reference
into the Offering Memorandum.
9. No authorization, approval, consent or order of any Georgia
court or Georgia governmental authority or agency (other than such as may be
required under applicable Georgia securities laws, as to which I express no
opinion) is required in connection with the due authorization, execution and
delivery of the Purchase Agreement or the due execution, delivery or performance
of the Indenture or the Registration Rights Agreement by the Company or for the
offering, issuance, sale or delivery of the Senior Notes to the Initial
Purchasers or the resale by the Initial Purchasers in accordance with the
Purchase Agreement.
10. The execution, delivery and performance of the Purchase
Agreement, the Indenture, the Registration Rights Agreement and the Senior Notes
and the consummation of the transactions contemplated in the Purchase Agreement
and in the Offering Memorandum (including the use of the proceeds from the sale
of the Senior Notes as described in the Offering Memorandum under the caption
"Use of Proceeds") and compliance by the Company with its obligations under the
Purchase Agreement, the Indenture, the Registration Rights Agreement and the
Senior Notes will not, whether with or without the giving of notice or lapse of
time or both, conflict with or constitute a breach of, or default 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 thereof pursuant to any
contract, indenture, mortgage, deed of trust, loan or credit agreement, note,
lease or any 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 thereof is
subject (except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a material adverse effect on the Company and
its subsidiaries, taken as a whole), nor will such action result in any
violation of any applicable Georgia law, statute, rule or regulation or any
judgment, order, writ or decree of any court or governmental authority or agency
binding upon the Company.
In addition, I have participated in conferences with officers and
other representatives of the Company, representatives of the independent
accountants of the Company, you and your counsel at which the contents of the
Offering Memorandum and related matters were discussed and, although I am not
passing upon, and do not assume any responsibility for, the
A - 4
31
accuracy, completeness or fairness of the statements contained in the Offering
Memorandum and have made no independent check or verification thereof (except to
the extent referred to in paragraph 7 above), on the basis of the foregoing, no
facts have come to my attention that have led me to believe that the Offering
Memorandum, as of its date or as of the date hereof, contained or contains an
untrue statement of a material fact or omitted or omits to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, except that I express
no opinion or belief with respect to the financial statements and related notes,
the pro forma financial information and other financial and accounting data
included therein or excluded therefrom.
This opinion is furnished to you solely for your benefit in
connection with the closing under the Purchase Agreement occurring today and is
not to be used, circulated, quoted or otherwise referred to for any other
purpose without my express written permission.
Very truly yours,
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
A - 5
32
Schedule I
American Family Life Assurance Company of Columbus (AFLAC)
A - 6
33
Exhibit B
FORM OF OPINION OF SKADDEN, ARPS, SLATE, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
TO BE DELIVERED PURSUANT TO
SECTION 5(a)
April 21, 1999
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
First Union Capital Markets
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
c/▇ ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇
& ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: AFLAC Incorporated 6 1/2% Senior Notes
Due 2009
Ladies and Gentlemen:
We have acted as special counsel to AFLAC Incorporated, a Georgia
corporation (the "Company"), in connection with the issuance and sale by the
Company of $450,000,000 aggregate principal amount of the Company's 6 1/2%
Senior Notes Due 2009 (the "Senior Notes") pursuant to the Purchase Agreement,
dated as of April 16, 1999, between you and the Company (the "Purchase
Agreement").
This opinion is being furnished pursuant to Section 5(a) of the
Purchase Agreement. Capitalized terms not otherwise defined herein have the
respective meanings set forth in the Purchase Agreement or, if not therein
defined, the Indenture, dated as of April 21, 1999 (the "Indenture"), between
the Company and The Bank of New York, as Trustee.
In connection with this opinion we have examined and are familiar
with originals or copies, certified or otherwise identified to our satisfaction,
of (a) the Offering Memorandum, dated April 16, 1999, relating to the Senior
Notes (the "Offering Memorandum"); (b) an executed copy of
B - 1
34
the Purchase Agreement; (c) an executed copy of the Indenture (including the
form set forth therein of certificates evidencing the Senior Notes); (d) an
executed copy of the Registration Rights Agreement, dated April 21, 1999,
between you and the Company (the "Registration Rights Agreement"); (e) the
Certificate of Incorporation of the Company, as amended to date; (f) the By-laws
of the Company, as amended to date; (g) certain resolutions of the Board of
Directors of the Company and the Note Pricing Committee of the Board of
Directors of the Company relating to the issuance and sale of the Senior Notes;
(h) an Officer's Certificate with respect to compliance with financial ratios
and tests under certain of the Applicable contracts (as defined below),
including supporting calculations (the "Calculation Certificate") and (i) such
other documents as we have deemed necessary or appropriate as a basis for the
opinions set forth below. We have also examined the originals or copies,
certified or otherwise identified to our satisfaction, of such records of the
Company and such agreements, certificates of public officials, certificates of
officers or other representatives of the Company and others, and such other
statements, documents, certificates and corporate or other records as we have
deemed necessary or appropriate as a basis for the opinions set forth below.
In our examination, we have assumed the genuineness of all
signatures, the legal capacity of all natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such copies. In making our examination of
documents, we have assumed that the parties thereto (including the Company) had
the power, corporate or other, to enter into and perform all obligations
thereunder and have also assumed the due authorization by all requisite action,
corporate or other, and the execution and delivery by such parties of such
documents and (except as set forth below) the validity and binding effect of
such documents on such parties. We have also assumed, and relied upon without
independent investigation, the accuracy of the information contained in the
Calculation Certificate. In rendering the opinions set forth in paragraphs 1 and
2, we have also assumed that the execution and delivery by the Company of the
Indenture, the Senior Notes and the Registration Rights Agreement and the
performance of its obligations thereunder do not and will not violate, conflict
with or constitute a default under (i) any agreement or instrument to which the
Company or its properties is subject (except that we do not make the assumption
set forth in this clause (i) with respect to Applicable Contracts), (ii) any
law, rule, or regulation to which the Company is subject (except that we do not
make the assumption set forth in this clause (ii) with respect to Applicable
Laws (as defined below), the United States securities laws, antifraud laws or
the rules and regulations of the National Association of Securities Dealers,
Inc. (the "NASD")), (iii) any judicial or regulatory order or decree of any
governmental authority (except that we do not make the assumption set forth in
this clause (iii) with respect to Applicable Orders (as defined below)) or (iv)
any consent, approval, license, authorization or validation of, or filing,
recording or registration with any governmental authority (except that we do not
make the assumption set forth in this clause (iv) with respect to Governmental
Approvals (as defined below)). As to any facts material to the opinions
expressed herein which were not independently established or verified, we have
relied upon oral or written statements and representations of officers and other
representatives of the Company, you and others.
B - 2
35
As used herein, (a) the term "Applicable Laws" means those laws,
rules and regulations of the State of New York and the United States of America
that, in our experience, are normally applicable to transactions of the type
contemplated by the Purchase Agreement (other than securities, blue sky and
antifraud laws of any jurisdiction and the rules and regulations of the NASD),
but without our having made any special investigation concerning any other laws,
rules or regulations; (b) the term "Governmental Authorities" means any New York
or federal executive, legislative, judicial, administrative or regulatory body
established under Applicable Laws; (c) the term "Applicable Orders" means those
orders or decrees of Governmental Authorities identified on Schedule I hereto;
(d) the term "Governmental Approval" means any consent, approval, license,
authorization or validation of, or filing, recording or registration with, any
Governmental Authority pursuant to Applicable Laws or with the Securities and
Exchange Commission under the United States securities laws, other than Section
5 of the Securities Act of 1933, as amended (the "Securities Act"), which is
addressed in paragraph 8 below; and (e) the term "Applicable Contracts" means
the agreements listed on Schedule II hereto.
We understand that you are separately receiving an opinion with
respect to certain of the foregoing matters from ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Senior Vice
President and General Counsel of the Company, and we are advised that such
opinion contains certain assumptions and qualifications. In rendering our
opinion to you, we express no opinion as to the effect on our opinion of the
qualifications, assumptions, or conclusions set forth in the opinion referred to
in the preceding sentence. In rendering our opinion to you, we have relied with
your consent and without independent investigation or verification of any kind
upon the following assumptions:
(i) The Company has been duly incorporated and is in good standing
under the laws of the State of Georgia.
(ii) The Company has the corporate power and corporate authority
to execute and deliver the Senior Notes, the Indenture, the Registration Rights
Agreement and the Purchase Agreement and to perform all of its obligations
thereunder, and the execution and delivery of the Senior Notes, the Indenture,
the Registration Rights Agreement and the Purchase Agreement and consummation by
the Company of the transactions contemplated thereby have been duly authorized
by all requisite corporate action on the part of the Company.
(iii) The Indenture, the Registration Rights Agreement and the
Purchase Agreement have been duly executed and delivered by the Company and the
Senior Notes have been duly executed by the Company.
(iv) The Company has complied with all provisions of Georgia law
in connection with consummation of the transactions contemplated by the Senior
Notes, the Indenture, the Registration Rights Agreement and the Purchase
Agreement.
(v) The laws of the State of Georgia do not affect any of the
opinions set forth herein.
B - 3
36
Members of our firm are admitted to the Bar in the State of New
York and we do not express any opinion as to the laws of any other jurisdiction
other than the laws of the United States of America to the extent referred to
specifically herein.
In rendering our opinions expressed herein, we express no opinion
as to the application or effect of any fraudulent transfer or similar law on the
Purchase Agreement, the Senior Notes, the Registration Rights Agreement or the
Indenture or any of the transactions contemplated thereby.
Based upon and subject to the foregoing, we are of the opinion
that:
1. When the Senior Notes are executed and authenticated in
accordance with the terms of the Indenture and delivered to and paid for by you
in accordance with the terms of the Purchase Agreement and in accordance with
the terms of the Indenture, the Senior Notes will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms and entitled to the benefits of the Indenture, except that (a)
enforcement thereof may be limited by (i) bankruptcy, reorganization,
insolvency, moratorium or other similar laws now or hereafter in effect relating
to creditors' rights generally and (ii) general principles of equity (regardless
of whether enforceability is considered in a proceeding at law or in equity) and
(b) the waiver contained in Section 9.7 of the Indenture may be unenforceable.
2. Each of the Indenture and the Registration Rights Agreement is
a valid and binding agreement of the Company enforceable against the Company in
accordance with its terms except that (a) the enforcement thereof may be subject
to or limited by (i) bankruptcy, reorganization, insolvency, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights generally
and (ii) general principles of equity (regardless of whether such enforceability
is considered in a proceeding at law or in equity), (b) the rights to
indemnification and contribution contained in the Registration Rights Agreement
may be limited by state or federal securities laws or the public policy
underlying such laws and (c) the waiver contained in Section 9.7 of the
Indenture may be unenforceable.
3. Neither the issue and sale of the Senior Notes by the Company,
the execution, delivery and performance by the Company of the Purchase
Agreement, the Registration Rights Agreement or the Indenture (together, the
"Documents"), nor the consummation of any other of the transactions contemplated
by the Documents, each in accordance with its terms, will conflict with, result
in a breach or violation of, or constitute a default under (i) any Applicable
Law; (ii) any Applicable Order; or (iii) any Applicable Contract. We call to
your attention that certain of the Applicable Contracts are governed by laws
other than Applicable Laws. We express no opinion as to the effect of such other
laws on the opinion stated in this paragraph 3.
4. Assuming the accuracy of the representations and warranties of
the Company in Sections 1 and 6(a) of the Purchase Agreement and of you in
Section 6(a) of the Purchase Agreement and compliance by the Company with the
covenants in Sections 3 and 6(b) of the
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Purchase Agreement, no Governmental Approval is required for the consummation of
the transactions contemplated by the Documents, other than such approvals as
have been, or as are not required to be, obtained by the date hereof.
5. The Company is not required to be registered as an "investment
company" under the Investment Company Act of 1940, as amended.
6. The statements contained in the Offering Memorandum under the
heading "Description of the Senior Notes", insofar as such statements purport to
summarize certain provisions of the Senior Notes, the Registration Rights
Agreement and the Indenture, fairly summarize such provisions in all material
respects.
7. Although the discussion set forth in the Offering Memorandum
under the heading "Certain U.S. Federal Tax Considerations" does not purport to
discuss all possible United States federal income tax considerations of the
purchase, ownership, and disposition of the Senior Notes, such discussion
constitutes, in all material respects, a fair and accurate summary of the
matters referred to therein.
8. Assuming (i) the accuracy of the representations and warranties
of the Company in Sections 1 and 6(a) and of you in Section 6(a) of the Purchase
Agreement and compliance with the agreements of the Company and you contained in
the Purchase Agreement, (ii) the compliance by you with the offering and
transfer procedures and restrictions described in the Purchase Agreement and the
Offering Memorandum, (iii) the accuracy of, and compliance with, the
representations, warranties and covenants of each of the purchasers to whom you
initially resell the Senior Notes as specified in the Offering Memorandum and
the Purchase Agreement and (iv) that purchasers to whom you initially resell the
Senior Notes receive a copy of the Offering Memorandum prior to such sale, no
registration of the Senior Notes under the Securities Act is required, and no
qualification of the Indenture under the Trust Indenture Act of 1939, as
amended, is necessary, for the offer and sale to you of the Senior Notes in the
manner contemplated by the Purchase Agreement or the initial resale of the
Senior Notes by you in the manner contemplated by the Purchase Agreement;
provided, however, we express no opinion as to any subsequent resale of the
Senior Notes.
9. The documents incorporated by reference in the Offering
Memorandum (other than the financial statements and supporting schedules
therein, as to which we express no opinion), when they were filed with the
Securities and Exchange Commission, complied as to form in all material respects
with the requirements of the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
In addition, we have participated in conferences with officers and
other representatives of the Company, in-house counsel for the Company,
representatives of the independent accountants of the Company, you and your
counsel at which the contents of the Offering Memorandum and related matters
were discussed. We did not participate in the preparation of the documents
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incorporated by reference in the Offering Memorandum, but have, however,
reviewed such documents and discussed the business and affairs of the Company
with 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 Offering Memorandum and have made no independent
check or verification thereof (except to the extent referred to in paragraphs 6
and 7 above), on the basis of the foregoing, no facts have come to our attention
that have led us to believe that the Offering Memorandum, as of its date or as
of the date hereof, contained or contains an untrue statement of a material fact
or omitted or omits to state any 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 and related notes, the pro forma financial information and
other financial and accounting data included therein or excluded therefrom. For
purposes of the foregoing, we note that the Offering Memorandum has been
prepared in the context of an offering of the Senior Notes pursuant to Rule 144A
promulgated under the Securities Act and not as part of a registration statement
under the Securities Act.
This opinion is furnished to you solely for your benefit in
connection with the closing under the Purchase Agreement occurring today and is
not to be used, circulated, quoted or otherwise referred to for any other
purpose without our express written permission.
Very truly yours,
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Exhibit C
FORM OF OPINION OF ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
TO BE DELIVERED PURSUANT TO SECTION 5(b)
April 21, 1999
▇▇▇▇▇▇▇ LYNCH, PIERCE, ▇▇▇▇▇▇ & ▇▇▇▇▇ INCORPORATED
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇
FIRST UNION CAPITAL MARKETS CORP.
NATIONSBANC ▇▇▇▇▇▇▇▇▇▇ SECURITIES LLC
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ INC.
c/o Merrill Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
We have acted as your counsel in connection with the purchase by
you of $450,000,000 aggregate principal amount of 6 1/2% Senior Notes due 2009
(the "Senior Notes") of AFLAC Incorporated, a Georgia corporation (the
"Company"), pursuant to the Purchase Agreement dated April 16, 1999 (the
"Purchase Agreement") among ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated,
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇, First Union Capital Markets Corp., NationsBanc
▇▇▇▇▇▇▇▇▇▇ Securities LLC and ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., as initial purchasers
(the "Initial Purchasers"), and the Company.
We have examined the Offering Memorandum dated April 16, 1999,
relating to the sale of the Senior Notes (the "Offering Memorandum"), which
incorporates by reference the Annual Report on Form 10-K of the Company for the
fiscal year ended December 31, 1998 (the "Exchange Act Document"), as filed
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"); the
Indenture dated as of April 21, 1999 (the "Indenture") between the Company and
The Bank of New York, as Trustee (the "Trustee"), relating to the Senior Notes;
the Global Senior Notes and a specimen of the Certificated Senior Notes; the
Purchase Agreement; and the Registration Rights Agreement dated as of April 21,
1999 (the "Registration Rights Agreement") among the Company and the Initial
Purchasers. In addition, we have examined, and have relied as to matters of fact
upon, the documents delivered to you at the
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closing, and upon originals, or duplicates or certified or conformed copies, of
such corporate records, agreements, documents and other instruments and such
certificates or comparable documents of public officials and of officers and
representatives of the Company, and have made such other investigations, as we
have deemed relevant and necessary in connection with the opinions hereinafter
set forth.
In such examination, we have assumed the genuineness of all
signatures, the legal capacity of natural persons, the authenticity of all
documents submitted to us as originals, the conformity to original documents of
all documents submitted to us as duplicates or certified or conformed copies,
and the authenticity of the originals of such latter documents.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing
and in good standing as a corporation under the laws of the State of
Georgia.
2. The Indenture has been duly authorized, executed and delivered
by the Company and, assuming that the Indenture is the valid and legally
binding obligation of the Trustee, constitutes a valid and legally
binding obligation of the Company, enforceable against the Company in
accordance with its terms.
3. The Senior Notes have been duly authorized, executed and issued
by the Company and, assuming due authentication thereof by the Trustee
and upon payment and delivery in accordance with the Purchase Agreement,
will constitute 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.
4. The Registration Rights Agreement has been duly authorized,
executed and delivered by the Company and, assuming that the Registration
Rights Agreement is the valid and legally binding obligation of the
Initial Purchasers, constitutes a valid and legally binding obligation of
the Company, enforceable against the Company in accordance with its
terms.
5. The Purchase Agreement has been duly authorized, executed and
delivered by the Company.
6. The statements made in the Offering Memorandum under the
caption "Description of the Senior Notes," insofar as they purport to
constitute summaries of certain terms of documents referred to therein,
constitute accurate summaries of the terms of such documents in all
material respects.
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7. No registration under the Securities Act of 1933, as amended,
of the Senior Notes and no qualification of the Indenture under the Trust
Indenture Act of 1939, as amended, is required for the offer and sale of
the Senior Notes by the Company to the Initial Purchasers or the reoffer
and resale of the Senior Notes by the Initial Purchasers to the initial
purchasers therefrom solely in the manner contemplated by the Offering
Memorandum, the Purchase Agreement and the Indenture.
Our opinions in paragraphs 2, 3 and 4 above are subject to (i) the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, (ii) general equitable principles (whether considered in a proceeding
in equity or at law) and (iii) an implied covenant of good faith and fair
dealing. Our opinion in paragraph 4 is further limited by considerations of
public policy.
We express no opinion as to the validity, legally binding effect
or enforceability of any provision of the Registration Rights Agreement or any
related provisions of the Indenture that requires or relates to payment of any
interest at a rate or in an amount which a court would determine in the
circumstances under applicable law to be commercially unreasonable or a penalty
or a forfeiture.
All legal proceedings taken by the Company in connection with the
offering of the Senior Notes, and the legal opinions, dated the date hereof,
rendered to you by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq., Senior Vice President, Secretary &
General Counsel of the Company, and Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP,
counsel for the Company, pursuant to the Purchase Agreement, are in form
satisfactory to us. Insofar as the opinions expressed herein relate to or are
dependent upon matters governed by the laws of the State of Georgia, we have
relied upon the opinion of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq., Senior Vice President,
Secretary & General Counsel of the Company.
We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Offering Memorandum or the
Exchange Act Document and take no responsibility therefor, except as and to the
extent set forth in paragraph 6 above. In the course of the preparation by the
Company of the Offering Memorandum, we participated in conferences with certain
officers and employees of the Company, with representatives of KPMG LLP and with
counsel to the Company. We did not participate in the preparation of the
Exchange Act Document or review the Exchange Act Document prior to its filing
with the Commission. Based upon our examination of the Offering Memorandum and
the Exchange Act Document, our investigations made in connection with the
preparation of the Offering Memorandum (excluding the Exchange Act Document) and
our participation in the conferences referred to above, we have no reason to
believe that the Offering Memorandum (including the Exchange Act Document)
contains any untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that we express
no belief with respect to the financial statements or
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other financial data contained or incorporated by reference in the Offering
Memorandum or the Exchange Act Document.
We are members of the Bar of the State of New York and we do not
express any opinion herein concerning any law other than the law of the State of
New York and the federal law of the United States.
This opinion letter is rendered to you in connection with the
above described transactions. This opinion letter may not be relied upon by you
for any other purpose, or relied upon by, or furnished to, any other person,
firm or corporation without our prior written consent.
Very truly yours,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
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