AMERICAN FINANCIAL GROUP, INC.
(an Ohio corporation)
AMERICAN FINANCIAL GROUP, INC.
(an Ohio corporation)
Banc of America
Securities LLC
J.P. Morgan Securities Inc.
Wachovia Capital Markets, LLC
As
Representatives of the several Underwriters
c/o Banc of America Securities LLC
One Bryant Park
New York, New York 10036
American Financial
Group, Inc., an Ohio corporation (the “Company”),
confirms its agreement with Banc of America Securities LLC
(“Banc of America”), J.P. Morgan Securities Inc.
(“JPM”) and Wachovia Capital Markets, LLC
(“Wachovia”) and each of the other Underwriters named
in Schedule A hereto (collectively, the
“Underwriters”, which term shall also include any
underwriter substituted as hereinafter provided in Section 10
hereof), for whom Banc of America, JPM and Wachovia are acting as
representatives (in such capacity, the
“Representatives”), with respect to the issue and sale
by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the respective principal amounts set
forth in said Schedule A of $350,000,000 aggregate principal
amount of the Company’s 9.875% Senior Notes due 2019 (the
“Securities”). The Securities are to be issued pursuant
to an indenture dated as of November 12, 1997 (the
“Original Indenture”), as supplemented by a
supplemental indenture dated as of December 3, 1997 (the
“First Supplemental Indenture”), as further
supplemented by a second supplemental indenture dated as of
February 3, 2004 (the “Second Supplemental
Indenture”), as further supplemented by a third supplemental
indenture to be dated as of June 17, 2009 (the “Third
Supplemental Indenture” together with the Original Indenture,
the First Supplemental Indenture, and the Second Supplemental
Indenture, the “Indenture”) among the Company, as
issuer, and U.S. Bank National Association, as trustee (the
“Trustee”).
The Company
understands that the Underwriters propose to make a public offering
of the Securities as soon as the Representatives deem advisable
after this Agreement has been executed and delivered and the
Indenture has been qualified under the Trust Indenture Act of 1939,
as amended (the “1939 Act”).
The Company has
filed with the Securities and Exchange Commission (the
“Commission”) an automatic shelf registration statement
on Form S-3 (No. 333-157649), including the related
preliminary prospectus or prospectuses, which registration
statement became effective upon filing under
Rule 462(e)
of the rules
and regulations of the Commission (the “1933 Act
Regulations”) under the Securities Act of 1933, as amended
(the “1933 Act”). Such registration statement covers
the registration of the Securities under the 1933 Act. Promptly
after execution and delivery of this Agreement, the Company will
prepare and file a prospectus in accordance with the provisions of
Rule 430B (“Rule 430B”) of the 1933 Act
Regulations and paragraph (b) of Rule 424
(“Rule 424(b)”) of the 1933 Act Regulations. Any
information included in such prospectus that was omitted from such
registration statement at the time it became effective but that is
deemed to be part of and included in such registration statement
pursuant to Rule 430B is referred to as “Rule 430B
Information.” Each prospectus, including any preliminary
prospectus supplement, used in connection with the offering of the
Securities that omitted Rule 430B Information is herein
collectively called a “preliminary prospectus.” Such
registration statement, at any given time, including the amendments
thereto to such time, the exhibits and any schedules thereto at
such time and the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act at such
time is herein called the “Registration Statement.” The
Registration Statement at the time it originally became effective
is herein called the “Original Registration Statement.”
The final prospectus, as supplemented by any prospectus supplement,
in the form first furnished to the Underwriters for use in
connection with the offering of the Securities, including the
documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the 1933 Act at the time of the
execution of this Agreement, is herein collectively called the
“Prospectus.” For purposes of this Agreement, all
references to the Registration Statement, any preliminary
prospectus, any prospectus supplement, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to
include the copy filed with the Commission pursuant to its
Electronic Data Gathering, Analysis and Retrieval system
(“EDGAR”).
The Company and
the Underwriters agree that up to $6,500,000 aggregate principal
amount of the Securities to be purchased by the Underwriters (the
“Directed Securities”) shall be reserved for sale at
the public offering price by the Underwriters to certain eligible
directors and officers of the Company, relatives of directors or
officers or trusts for the benefit of any of the foregoing
(collectively, the “DNP Participants”), as part of the
distribution of the Securities by the Underwriters (the
“Directed Note Program”) subject to the terms of this
Agreement, the applicable rules, regulations and interpretations of
the Financial Industry Regulatory Authority (“FINRA”)
and all other applicable laws, rules and regulations. Banc of
America shall be selected to process the sales to the DNP
Participants under the Directed Note Program. To the extent that
such Directed Securities are not orally confirmed for purchase by
the DNP Participants by 9:00 A.M. New York City time on the date
one day following the date of this Agreement, such Directed
Securities may be offered to the public as set forth in the
Registration Statement, the General Disclosure Package and the
Prospectus. The Company has supplied Banc of America with the
names, addresses and telephone numbers of the individuals or other
entities that the Company has designated to be participants in the
Directed Note Program.
All references in
this Agreement to financial statements and schedules and other
information which is “contained,”
“included” or “stated” in the Registration
Statement, any preliminary prospectus or the Prospectus (or other
references of like import) shall be deemed to mean and include all
such financial statements and schedules and other information which
is incorporated by reference in or otherwise deemed by the 1933 Act
Regulations to be a part of or included in the Registration
Statement, any preliminary prospectus or the Prospectus, as the
case may be; and all references in this Agreement to amendments or
supplements to the Registration Statement, any preliminary
prospectus or the Prospectus shall be deemed to mean and include
the filing of any document under the Securities Exchange Act of
1934 (the “1934 Act”) which is incorporated by
reference in or otherwise deemed by the 1933 Act Regulations to be
a part of or included in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may
be.
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SECTION 1.
Representations and Warranties .
(a)
Representations and Warranties by the Company . The
Company represents and warrants to each Underwriter as of the date
hereof, the Applicable Time referred to in Section 1(a)(ii) hereof
and as of the Closing Time referred to in Section 2(b) hereof, and
agrees with each Underwriter, as follows:
(i) Status as a
Well-Known Seasoned Issuer . (A) At the time of filing the
Original Registration Statement, (B) at the time of the most
recent amendment thereto for the purposes of complying with
Section 10(a)(3) of the 1933 Act (whether such amendment was
by post-effective amendment, incorporated report filed pursuant to
Section 13 or 15(d) of the 1934 Act or form of prospectus),
(C) at the time the Company or any person acting on its behalf
(within the meaning, for this clause only, of Rule 163(c) of the
1933 Act Regulations) made any offer relating to the Securities in
reliance on the exemption of Rule 163 of the 1933 Act Regulations
and (D) at the date hereof, the Company was and is a
“well-known seasoned issuer” as defined in
Rule 405 of the 1933 Act Regulations (“Rule 405”),
including not having been and not being an “ineligible
issuer” as defined in Rule 405. The Registration Statement is
an “automatic shelf registration statement,” as defined
in Rule 405, and the Securities, since their registration on
the Registration Statement, have been and remain eligible for
registration by the Company on a Rule 405 “automatic
shelf registration statement”. The Company has not received
from the Commission any notice pursuant to Rule 401(g)(2) of
the 1933 Act Regulations objecting to the use of the automatic
shelf registration statement form.
At the time of
filing the Original Registration Statement, at the earliest time
thereafter that the Company or another offering participant made a
bona fide offer (within the meaning of Rule 164(h)(2)
of the 1933 Act Regulations) of the Securities and at the date
hereof, the Company was not and is not an “ineligible
issuer,” as defined in Rule 405.
(ii)
Registration Statement, Prospectus and Disclosure at Time of
Sale . The Original Registration Statement became effective
upon filing under Rule 462(e) of the 1933 Act Regulations
(“Rule 462(e)”) on March 3, 2009 and any
post-effective amendment thereto also became effective upon filing
under Rule 462(e). No stop order suspending the effectiveness
of the Registration Statement or any post-effective amendment
thereto has been issued under the 1933 Act and no proceedings for
that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission, and
any request on the part of the Commission for additional
information has been complied with.
No offer that
constituted a written communication relating to the Securities was
made prior to the filing of the Original Registration Statement by
the Company or any person acting on its behalf (within the meaning,
for this paragraph only, of Rule 163(c) of the 1933 Act
Regulations).
At the respective
times the Original Registration Statement and each amendment
thereto became effective, at each deemed effective date with
respect to the Underwriters pursuant to Rule 430B(f)(2) of the
1933 Act Regulations and at the Closing Time, the Registration
Statement and any amendments and supplements thereto complied and
will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and the 1939 Act and the
rules and regulations of the Commission under the 1939 Act (the
“1939 Act Regulations”), and did not and will not
contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading.
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Neither the
Prospectus nor any amendments or supplements thereto, at the time
the Prospectus or any such amendment or supplement was issued and
at the Closing Time, included or will include an untrue statement
of a material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not
misleading.
Each preliminary
prospectus (including the prospectus or prospectuses filed as part
of the Original Registration Statement or any amendment thereto)
complied when so filed in all material respects with the 1933 Act
Regulations and each preliminary prospectus and the Prospectus
delivered to the Underwriters for use in connection with this
offering was identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the
extent permitted by Regulation S-T.
As of the
Applicable Time (as defined below), neither (x) the Issuer
General Use Free Writing Prospectus(es) (as defined below) issued
at or prior to the Applicable Time and the Statutory Prospectus (as
defined below), all considered together (collectively, the
“General Disclosure Package”), nor (y) any
individual Issuer Limited Use Free Writing Prospectus (as defined
below) or any “road show” (as defined in Rule 433
(as defined below)) not constituting an Issuer Free Writing
Prospectus (and the Company’s investor presentation dated
June 3, 2009), when considered together with the General
Disclosure Package, included any untrue statement of a material
fact or omitted to state any material fact necessary in order to
make the statements therein, in the light of the circumstances
under which they were made, not misleading.
As of the time of
the filing of the Final Term Sheet (as defined in
Section 3(b)), the General Disclosure Package will not include
any untrue statement of a material fact nor will it omit 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.
As used in this
subsection and elsewhere in this Agreement:
“Applicable
Time” means 4:45 pm (Eastern time) on June 10, 2009 or
such other time as agreed by the Company and the
Representatives.
“Issuer Free
Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 of the 1933 Act
Regulations (“Rule 433”), relating to the
Securities that (i) is required to be filed with the
Commission by the Company, (ii) is a “road show that is
a written communication” within the meaning of
Rule 433(d)(8)(i), whether or not required to be filed with
the Commission or (iii) is exempt from filing with the
Commission pursuant to Rule 433(d)(5)(i) because it contains a
description of the Securities or of the offering that does not
reflect the final terms, in each case in the form filed or required
to be filed with the Commission or, if not required to be filed, in
the form retained in the Company’s records pursuant to
Rule 433(g).
“Issuer
General Use Free Writing Prospectus” means any Issuer Free
Writing Prospectus that is intended for general distribution to
prospective investors, as evidenced by its being specified in
Schedule C hereto.
“Issuer
Limited Use Free Writing Prospectus” means any Issuer Free
Writing Prospectus that is not an Issuer General Use Free Writing
Prospectus.
“Statutory
Prospectus” as of any time means the prospectus relating to
the Securities that is included in the Registration Statement
immediately prior to that time, including any document
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incorporated by
reference therein and any preliminary prospectus or other
prospectus deemed to be a part thereof.
Each Issuer Free
Writing Prospectus, as of its issue date and at all subsequent
times through the completion of the public offer and sale of the
Securities or until any earlier date that the issuer notified or
notifies the Representatives as described in Section 3(e), did
not, does not and will not include any information that conflicted,
conflicts or will conflict with the information contained in the
Registration Statement or the Prospectus, including any document
incorporated by reference therein and any preliminary or other
prospectus deemed to be a part thereof that has not been superseded
or modified.
The
representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement, the
Prospectus or any Issuer Free Writing Prospectus made in reliance
upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly
for use therein.
(iii)
Incorporated Documents . The documents incorporated or
deemed to be incorporated by reference in the Registration
Statement, the General Disclosure Package, and the Prospectus, when
they became effective or 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 1933 Act and the 1933 Act
Regulations or the 1934 Act and the rules and regulations of the
Commission thereunder (the “1934 Act Regulations”), as
applicable, and, when read together with the other information in
the Prospectus, (a) at the time the Original Registration
Statement became effective, (b) at the earlier of the time the
Prospectus was first used and the date and time of the first
contract of sale of Securities in this offering and (c) at the
Closing Time, did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading.
(iv)
Independent Accountants . The accountants who certified the
financial statements and supporting schedules included in the
Registration Statement are independent public accountants as
required by the 1933 Act and the 1933 Act Regulations.
(v) Financial
Statements . The financial statements included in the
Registration Statement, the General Disclosure Package and the
Prospectus, together with the related schedules and notes thereto,
present fairly in all material respects the financial position of
the Company and its consolidated subsidiaries at the dates
indicated and the statement of earnings, shareholders’ 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 to the
extent otherwise noted in such financial statements or the notes
thereto) throughout the periods involved. The supporting schedules,
if any, included in the Registration Statement present fairly in
accordance with GAAP the information required to be stated therein.
The selected financial data and the summary financial information,
if any, included in the Prospectus present fairly the information
shown therein and have been compiled on a basis consistent with
that of the audited financial statements included in the
Registration Statement. All disclosures contained in the
Registration Statement, the General Disclosure Package or the
Prospectus regarding “non-GAAP financial measures” (as
such term is defined by the rules and regulations of the
Commission) comply with Regulation G under the 1934 Act and
Item 10 of Regulation S-K of the 1933 Act Regulations, to
the extent applicable.
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(vi) No
Material Adverse Change in Business . Since the respective
dates as of which information is given in the Registration
Statement, the General Disclosure Package or the Prospectus, 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 considered as one enterprise, whether or not
arising in the ordinary course of business (a “Material
Adverse Effect”), (B) there have been no transactions
entered into by either of 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 as disclosed in
or contemplated by the General Disclosure Package and the
Prospectus, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its
respective capital stock.
(vii) Good
Standing of the Company . The Company has been duly
incorporated and is a validly existing corporation in good standing
under the laws of the State of Ohio, and has power and authority
(corporate and other) to own its properties and conduct its
business as described in the General Disclosure Package and the
Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified to do business as a
foreign corporation and is in good standing (or local law
equivalent) in all other jurisdictions in which its ownership or
lease of property or the conduct of business requires such
qualification, except where such failure to qualify would not,
individually or in the aggregate, result in a Material Adverse
Effect.
(viii) Good
Standing of Subsidiaries . Each “significant
subsidiary” of the Company (as such term is defined in
Rule 1-02 of Regulation S-X) (each a
“Subsidiary” and, collectively, the
“Subsidiaries”) has been duly incorporated and is an
existing corporation in good standing (or local law equivalent)
under the laws of the jurisdiction of its incorporation, with power
and authority (corporate and other) to own its properties and
conduct its business as described in the General Disclosure Package
and the Prospectus and is duly qualified to do business as a
foreign corporation in good standing (or local law equivalent) in
all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification; except
as otherwise disclosed in the General Disclosure Package and the
Prospectus, all of the issued and outstanding capital stock of each
such Subsidiary has been duly authorized and validly issued, is
fully paid and non-assessable and is owned by the Company, directly
or through subsidiaries, free from liens, encumbrances and defects;
none of the outstanding shares of capital stock of any Subsidiary
was issued in violation of the preemptive or other similar rights
of any securityholder of such Subsidiary. The only Subsidiaries of
the Company are listed on Schedule D hereto.
(ix)
Capitalization . The authorized, issued and outstanding
capital stock of the Company is as set forth in the financial
statements, including the schedules and notes thereto, included in
the General Disclosure Package and the Prospectus. The shares of
issued and outstanding capital stock of the Company have been duly
authorized and validly issued and are fully paid and
non-assessable; none of the outstanding shares of capital stock of
the Company was issued in violation of the preemptive or other
similar rights of any securityholder of the Company.
(x)
Authorization of Agreement . This Agreement has been duly
authorized, executed and delivered by the Company.
(xi)
Authorization of the Indenture . The Indenture has been duly
authorized, executed and delivered by the Company and duly
qualified under the 1939 Act and, assuming due execution and
delivery by the Trustee constitutes a valid and binding agreement
of the Company,
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enforceable
against the Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors’ rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in
equity or at law).
(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, issued and
delivered in the manner provided for in the Indenture and delivered
against payment of the purchase price therefor as provided in this
Agreement, will constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting enforcement of creditors’ rights
generally and except as enforcement thereof is subject to general
principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be in the
form contemplated by, and entitled to the benefits of, the
Indenture.
(xiii)
Description of the Securities and the Indenture . The
Securities and the Indenture will conform in all material respects
to the respective statements relating thereto contained in the
General Disclosure Package and the Prospectus and will be in
substantially the respective forms filed or incorporated by
reference, as the case may be, as exhibits to the Registration
Statement.
(xiv) Absence
of Defaults and Conflicts . Neither the Company nor any of its
Subsidiaries is in violation of its charter, regulations 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 it or 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 under the
Agreements and Instruments that would not result in a Material
Adverse Effect; and the execution, delivery and performance of this
Agreement, the Indenture 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 consummation of the
transactions contemplated herein and in the Registration Statement
(including the issuance and sale of the Securities and the use of
the proceeds from the sale of the Securities as described in the
Prospectus under the caption “Use of Proceeds”) and
compliance by the Company with its obligations hereunder and under
the Indenture and the Securities and such other agreements or
instruments have been duly authorized by all necessary corporate
action and do not and will not, whether with or without the giving
of notice or passage of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined below) under,
or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of
its Subsidiaries pursuant to, the Agreements and Instruments
(except for such conflicts, breaches, defaults or Repayment Events
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 the charter or
by-laws of the Company or any of its Subsidiaries or 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, properties or operations. 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
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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
Labor Dispute . No labor dispute with the employees of either
of the Company or any of its Subsidiaries that might have a
Material Adverse Effect exists or, to the knowledge of the Company,
is imminent.
(xvi) Absence
of Proceedings . Except as disclosed in the General Disclosure
Package and the Prospectus, there are no pending, or to the
Company’s knowledge, contemplated, actions, suits or
proceedings against or affecting the Company, or any of its
subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a Material Adverse
Effect, or would materially and adversely affect the ability of the
Company to perform its obligations under this Agreement, the
Indenture or the Securities, or which are otherwise material in the
context of the sale of the Securities.
(xvii) Accuracy
of Exhibits . There are no contracts or documents which are
required to be described in the Registration Statement, the General
Disclosure Package, the Prospectus or the documents incorporated by
reference therein or to be filed as exhibits thereto which have not
been so described and are or will be filed as required.
(xviii)
Possession of Intellectual Property . The Company and its
Subsidiaries own, possess or can acquire on reasonable terms,
adequate trademarks, trade names and other rights to inventions,
know-how, patents, copyrights, confidential information and other
intellectual property (collectively, “intellectual property
rights”) necessary to conduct the business now operated by
them, or presently employed by them, and have not received any
notice of infringement of or conflict with asserted rights of
others with respect to any intellectual property rights that, if
determined adversely to the Company or any of its subsidiaries,
would individually or in the aggregate have a Material Adverse
Effect.
(xix) Absence
of Manipulation . Neither the Company nor any affiliate of the
Company has taken, nor will the Company or any affiliate take,
directly or indirectly, any action which is designed to or which
has constituted or which would be expected to cause or result in
stabilization or manipulation of the price of any security of the
Company to facilitate the sale or resale of the
Securities.
(xx) 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 or for the due
execution, delivery or performance of the Indenture and the
Securities by the Company, except such as have been already
obtained or as may be required under state securities
laws.
(xxi)
Possession of Licenses and Permits . Each subsidiary of the
Company which is engaged in the business of insurance or
reinsurance (collectively, the “Insurance
Subsidiaries”) holds such insurance licenses, certificates
and permits from governmental authorities (including, without
limitation, from the insurance regulatory agencies of the various
jurisdictions where it conducts business (the “Insurance
Licenses”)) as are necessary to the conduct of its business
as described in the Registration Statement; the Company and each
Insurance Subsidiary have fulfilled and performed all obligations
necessary to maintain the Insurance Licenses; except as
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disclosed in
the General Disclosure Package and the Prospectus, there is no
pending or, to the knowledge of the Company, threatened action,
suit, proceeding or investigation that could reasonably be expected
to result in the revocation, termination or suspension of any
Insurance License which would, individually or in the aggregate,
have a Material Adverse Effect; and except as disclosed in the
General Disclosure Package and the Prospectus, no insurance
regulatory agency or body has issued, or, to the knowledge of the
Company, commenced any proceeding for the issuance of, any order or
decree impairing, restricting or prohibiting the payment of
dividends by any Insurance Subsidiary to its parent.
(xxii) Title to
Property . Except as disclosed in the General Disclosure
Package and the Prospectus, the Company and its Subsidiaries have
good and marketable title to all real properties and all other
properties and assets owned by them, in each case free from liens,
encumbrances and defects that would individually or in the
aggregate, materially affect the value of such properties and
assets, taken as a whole, or materially interfere with the use made
or to be made thereof by them; and except as disclosed in the
General Disclosure Package and the Prospectus, the Company and its
Subsidiaries hold any leased real or personal property under valid
and enforceable leases with no exceptions that would materially
interfere with the use made or to be made of the leased property,
taken as a whole, by them.
(xxiii)
Environmental Laws . Except as disclosed in the General
Disclosure Package and the Prospectus, neither the Company nor any
of its subsidiaries is in violation of any statute, any rule,
regulation, decision or order of any governmental agency or body or
any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the
protection or restoration of the environment or human exposure to
hazardous or toxic substances (collectively, “environmental
laws”), owns or operates any real property contaminated with
any substance that is subject to any environmental laws, is liable
for any off-site disposal or contamination pursuant to any
environmental laws, or is subject to any claim relating to any
environmental laws, which violation, contamination, liability or
claim would individually or in the aggregate have a Material
Adverse Effect; and the Company is not aware of any pending
investigation which might lead to a violation, liability or claim
which would individually or in the aggregate result in a Material
Adverse Effect.
(xxiv)
Investment Company Act . The Company is not required, and
upon the issuance and sale of the Securities as herein contemplated
and the application of the net proceeds therefrom as described in
the General Disclosure Package and the Prospectus will not be
required, to register as an “investment company” under
the Investment Company Act of 1940, as amended (the “1940
Act”).
(xxv)
Accounting Controls and Disclosure Controls . The Company
and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that
(i) transactions are executed in accordance with
management’s general or specific authorization;
(ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management’s general or
specific authorization; and (iv) the recorded accountability
for assets is compared with existing assets at reasonable intervals
and appropriate action is taken with respect to any
differences;
The Company has
established and maintains and evaluates “disclosure controls
and procedures” (as such term is defined in Rule 13a-15
and 15d-15 under the 1934 Act) and “internal control over
financial reporting” (as such term is defined in
Rule 13a-15 and 15d-15 under the 1934 Act); such disclosure
controls and procedures are designed to ensure that
material
9
information
relating to the Company, including its consolidated subsidiaries,
is made known to the Company’s Co-Chief Executive Officers
and its chief financial officer by others within those entities,
and such disclosure controls and procedures are effective to
perform the functions for which they were established; the
Company’s independent auditors and the Audit Committee of the
Board of Directors of the Company have been advised of:
(i) all significant deficiencies, if any, in the design or
operation of internal controls which could adversely affect the
Company’s ability to record, process, summarize and report
financial data; and (ii) all fraud, if any, whether or not
material, that involves management or other employees who have a
role in the Company’s internal controls; all material
weaknesses, if any, in internal controls have been identified to
the Company’s independent auditors; since the date of the
most recent evaluation of such disclosure controls and procedures
and internal controls, there have been no significant changes in
internal controls or in other factors that could significantly
affect internal controls, including any corrective actions with
regard to significant deficiencies and material weaknesses; the
principal executive officers (or their equivalents) and principal
financial officers (or their equivalents) of the Company have made
all certifications required by the Sarbanes-Oxley Act of 2002 (the
“ Sarbanes-Oxley Act ”) and any related rules
and regulations promulgated by the Commission, and the statements
contained in each such certification are complete and correct; the
Company, the subsidiaries and the Company’s directors and
officers are each in compliance in all material respects with all
applicable effective provisions of the Sarbanes-Oxley Act,
including Section 402 related to loans and Sections 302
and 906 related to certifications and the rules and regulations of
the Commission and the New York Stock Exchange promulgated
thereunder.
(xxvi) Pending
Procedures and Examinations . The Registration Statement is not
the subject of a pending proceeding or examination under Section
8(d) or 8(e) of the 1933 Act, and the Company is not the subject of
a pending proceeding under Section 8A of the 1933 Act in
connection with the offering of the Securities.
(xxvii)
Insurance Reserving . Except as disclosed in the General
Disclosure Package and the Prospectus, the Company and the
Insurance Subsidiaries have made no material change in their
insurance reserving practices since December 31,
2008.
(xxviii)
Reinsurance . All reinsurance treaties and arrangements to
which any Insurance Subsidiary is a party are in full force and
effect and no Insurance Subsidiary is in violation of, or in
default in the performance, observance or fulfillment of, any
obligation, agreement, covenant or condition contained therein; no
Insurance Subsidiary has received any notice from any of the other
parties to such treaties, contracts or agreements that such other
party intends not to perform such treaty and, the Company and the
Insurance Subsidiaries have no reason to believe that any of the
other parties to such treaties or arrangements will be unable to
perform such treaty or arrangement except to the extent adequately
and properly reserved for in the consolidated financial statements
of the Company included in the Registration Statement or the
Prospectus, except where such default or inability to perform would
not, individually or in the aggregate, have a Material Adverse
Effect.
(xxix)
Statutory Financial Statements . The statutory financial
statements of the Insurance Subsidiaries, from which certain ratios
and other statistical data included or incorporated by reference in
the Registration Statement, the General Disclosure Package and the
Prospectus have been derived, have been prepared for each relevant
period in conformity with statutory accounting principles or
practices required or permitted by the National Association of
Insurance Commissioners and by the appropriate Insurance Department
of the jurisdiction of domicile of each Insurance Subsidiary, and
such statutory accounting practices have been applied on a
consistent basis throughout the periods involved, except as may
otherwise be indicated
10
therein or in
the notes thereto, and present fairly in all material respects the
statutory financial position of the Insurance Subsidiaries as of
the dates thereof, and the statutory basis results of operations of
the Insurance Subsidiaries for the periods covered
thereby.
(xxx) No
Unlawful Payments . None of the Company, any of its
subsidiaries or, to the knowledge of the Company, any director,
officer, agent, employee or affiliate of the Company or any of its
subsidiaries (i) has made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment or (ii) is aware
of or has taken any action, directly or indirectly, that would
result in a violation by such persons of the Foreign Corrupt
Practices Act of 1977 (the “FCPA”), including, without
limitation, making use of the mails or any means or instrumentality
of interstate commerce corruptly in furtherance of an offer,
payment, promise to pay or authorization of the payment of any
money, or other property, gift, promise to give, or authorization
of the giving of anything of value to any “foreign
official” (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for
foreign political office, in contravention of the FCPA, and the
Company, its subsidiaries and, to the knowledge of the Company, its
affiliates have conducted their businesses in compliance with the
FCPA and have instituted and maintain policies and procedures
designed to ensure, and which are reasonably expected to continue
to ensure, continued compliance therewith.
(xxxi)
Compliance with Money Laundering Laws . The operations of
the Company and its Subsidiaries are and have been conducted at all
times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of
all jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively,
the “Money Laundering Laws”) and no action, suit or
proceeding by or before any court or governmental agency, authority
or body or any arbitrator involving the Company or any of its
Subsidiaries with respect to the Money Laundering Laws is pending
or, to the best knowledge of the Company, threatened.
(xxxii)
Compliance with OFAC . None of the Company, any of its
Subsidiaries or, to the knowledge of the Company, any director,
officer, agent, employee or Affiliate of the Company or any of its
Subsidiaries is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S.
Department of the Treasury (“OFAC”); and the Company
will not directly or indirectly use the proceeds of the offering of
the Securities hereunder, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or
other person or entity, for the purpose of financing the activities
of any person currently subject to any U.S. sanctions administered
by OFAC.
(b)
Officer’s Certificates . Any certificate signed by any
officer of the Company or any of its subsidiaries delivered to the
Representatives or to counsel for the Underwriters shall be deemed
a representation and warranty by the Company to each Underwriter as
to the matters covered thereby.
SECTION 2. Sale
and Delivery to Underwriters; Closing .
(a)
Securities . On the basis of the representations and
warranties herein contained and subject to the terms and conditions
herein set forth, the Company agrees to sell to each Underwriter,
severally and not jointly, and each Underwriter, severally and not
jointly, agrees to purchase from the Company, at the price set
forth in Schedule B, the aggregate principal amount of
Securities set forth in Schedule A opposite the name of such
Underwriter, plus any additional principal amount of Securities
which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof.
11
(b)
Payment . Payment of the purchase price for, and delivery of
certificates for, the Securities shall be made at the offices of
Sidley Austin llp ,
787 Seventh Avenue, New York, New York, or at such other place as
shall be agreed upon by the Representatives and the Company, at
9:00 A.M. (Eastern time) on the third (fourth, if the pricing
occurs after 4:30 P.M. (Eastern time) on any given day) business
day after the date hereof (unless postponed in accordance with the
provisions of Section 10), or such other time not later than
ten business days after such date as shall be agreed upon by the
Representatives and the Company (such time and date of payment and
delivery being herein called “Closing
Time”).
Payment shall be
made to the Company by wire transfer of immediately available funds
to a bank account designated in writing by the Company, against
delivery to the Representatives for the respective accounts of the
Underwriters of certificates for the Securities to be purchased by
them. It is understood that each Underwriter has authorized the
Representatives, for its account, to accept delivery of, receipt
for, and make payment of the purchase price for, the Securities
which it has agreed to purchase. The Representatives, individually
and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the
Securities to be purchased by any Underwriter whose funds have not
been received by the Closing Time, but such payment shall not
relieve such Underwriter from its obligations hereunder.
(c)
Denominations; Registration . The Securities shall be issued
as a single Global Note (the “Global Note”) registered
in such name as the Representatives may request in writing at least
one full business day before the Closing Time. The Global Note will
be made available for examination by the Representatives in The
City of New York not later than 10:00 A.M. (Eastern time) on
the business day prior to the Closing Time.
SECTION 3.
Covenants of the Company . The Company covenants with each
Underwriter as follows:
(a)
Compliance with Securities Regulations and Commission Requests;
Payment of Filing Fees . The Company, subject to
Section 3(b), will comply with the requirements of
Rule 430B and will notify the Representatives immediately, and
confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement or new registration
statement relating to the Securities shall become effective, or any
supplement to the Prospectus or any amended Prospectus relating to
the Securities shall have been filed, (ii) of the receipt of
any comments from the Commission through the date that is one
(1) year from the date of this Agreement, (iii) of any
request by the Commission for any amendment to the Registration
Statement or the filing of a new registration statement or any
amendment or supplement to the
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