Exhibit 1.1
FORM OF UNDERWRITING AGREEMENT
STANCORP FINANCIAL GROUP, INC.
Common Stock
Underwriting Agreement
(U.S. Version)
....................., 1999
Xxxxxxx, Xxxxx & Co.,
[Name(s) of Co-Representative(s),
As representatives of the several Underwriters
named in Schedule I hereto,
c/o Goldman, Sachs & Co.,
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000.
Ladies and Gentlemen:
StanCorp Financial Group, Inc., an Oregon corporation (the "Company"),
proposes to issue shares of its common stock (the "Stock") in connection with
the reorganization (the "Demutualization") of Standard Insurance Company
("Standard") from an Oregon mutual life insurance company to an Oregon stock
life insurance company pursuant to Standard's Plan of Reorganization, as adopted
on September 28, 1998 by the Board of Directors of Standard (the "Plan"). Upon
effectiveness of the Plan, Standard will become a direct wholly-owned subsidiary
of the Company. Pursuant to the Plan, the Company proposes to issue up to
30,000,000 shares of Stock (the "Policyholder Shares") to Eligible Members (as
defined in the Plan) in exchange for their Membership Interests (as defined in
the Plan), and, subject to the terms and conditions stated herein, to issue and
sell to the Underwriters named in Schedule I hereto (the "Underwriters") an
aggregate of ........ shares of Stock (the "Firm Shares") and, at the election
of the Underwriters, up to ........ additional shares of Stock (the "Optional
Shares"). The Firm Shares and the Optional Shares that the Underwriters elect
to purchase pursuant to Section 2 hereof being collectively called the "Shares".
It is understood and agreed to by all parties that the Company is
concurrently entering into an agreement (the "International Underwriting
Agreement") providing for the sale by the Company of up to a total of ........
shares of Stock (the "International Shares"), including the overallotment option
thereunder, through arrangements with certain underwriters outside the United
States (the "International Underwriters"), for whom Xxxxxxx Xxxxx International
and [Insert names of other Co-Lead Managers] are acting as lead managers.
Anything herein or therein to the contrary notwithstanding, the respective
closings under this Agreement and the International Agreement are hereby
expressly made conditional on one another. The Underwriters hereunder and the
International Underwriters are simultaneously entering into an Agreement between
U.S. and International Underwriting Syndicates (the "Agreement between
Syndicates") which provides, among other things, for the transfer of shares of
Stock between the two syndicates. Two forms of
prospectus are to be used in connection with the offering and sale of shares of
Stock contemplated by the foregoing, one relating to the Shares hereunder and
the other relating to the International Shares. The latter form of prospectus
will be identical to the former except for certain substitute pages as included
in the registration statement and amendments thereto as mentioned below. Except
as used in Sections 2, 3, 4, 9 and 11 herein, and except as the context may
otherwise require, references hereinafter to the Shares shall include all the
shares of Stock which may be sold pursuant to either this Agreement or the
International Underwriting Agreement, and references herein to any prospectus
whether in preliminary or final form, and whether as amended or supplemented,
shall include both the U.S. and the international versions thereof.
1. The Company and Standard, jointly and severally, represent and warrant
to, and agree with, each of the Underwriters that:
(a) A registration statement on Form S-1 (File No. 333-....) (the "Initial
Registration Statement") in respect of the Shares has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial Registration
Statement and any post-effective amendment thereto, each in the form heretofore
delivered to you, and, excluding exhibits thereto, to you for each of the other
Underwriters, have been declared effective by the Commission in such form; other
than a registration statement, if any, increasing the size of the offering (a
"Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under the
Securities Act of 1933, as amended (the "Act"), which became effective upon
filing, no other document with respect to the Initial Registration Statement has
heretofore been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Registration Statement, any post-effective
amendment thereto or the Rule 462(b) Registration Statement, if any, has been
issued and no proceeding for that purpose has been initiated or threatened by
the Commission (any preliminary prospectus included in the Initial Registration
Statement or filed with the Commission pursuant to Rule 424(a) of the rules and
regulations of the Commission under the Act is hereinafter called a "Preliminary
Prospectus"; the various parts of the Initial Registration Statement and the
Rule 462(b) Registration Statement, if any, including all exhibits thereto and
including the information contained in the form of final prospectus filed with
the Commission pursuant to Rule 424(b) under the Act in accordance with Section
5(a) hereof and deemed by virtue of Rule 430A under the Act to be part of the
Initial Registration Statement at the time it was declared effective, each as
amended at the time such part of the Initial Registration Statement became
effective or such part of the Rule 462(b) Registration Statement, if any, became
or hereafter becomes effective, are hereinafter collectively called the
"Registration Statement"; and such final prospectus, in the form first filed
pursuant to Rule 424(b) under the Act, is hereinafter called the "Prospectus");
(b) No order preventing or suspending the use of any Preliminary Prospectus
has been issued by the Commission, and each Preliminary Prospectus, at the time
of filing thereof, conformed in all material respects to the requirements of the
Act and the rules and regulations of the Commission thereunder, and did 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, in
the light of the circumstances under which they were made, not misleading;
provided, however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
furnished in writing to the Company by an Underwriter through Xxxxxxx, Sachs &
Co. expressly for use therein;
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(c) The Registration Statement conforms, and the Prospectus and any further
amendments or supplements to the Registration Statement or the Prospectus will
conform, in all material respects to the requirements of the Act and the rules
and regulations of the Commission thereunder and do not and will not, as of the
applicable effective date as to the Registration Statement and any amendment
thereto, and as of the applicable filing date as to the Prospectus and any
amendment or supplement thereto, 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; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished in writing to the
Company by an Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use
therein;
(d) Neither the Company nor Standard nor any of their respective
subsidiaries has sustained since the date of the latest audited financial
statements included in the Prospectus any material loss or interference with its
business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order
or decree, otherwise than as set forth or contemplated in the Prospectus; and,
since the respective dates as of which information is given in the Registration
Statement and the Prospectus, there has not been any (i) material addition, or
any development involving a prospective material addition, to Standard's
liability for future policyholder benefits and claims, other than in the
ordinary course of business, (ii) any change in the capital stock of the
Company, Standard or any of their respective subsidiaries, (iii) any change in
the long-term debt of the Company, Standard or any of their respective
subsidiaries or (iv) any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs or
management, or the financial position, equity, reserves, surplus or results of
operations (in each case considered on either a statutory or a GAAP basis) of
Standard or its subsidiaries, otherwise than as set forth or contemplated in the
Prospectus;
(e) Each of the Company, Standard and their respective subsidiaries have
good and marketable title in fee simple to all real property and good and
marketable title to all personal property owned by it, in each case free and
clear of all liens, encumbrances and defects except such as are described in the
Prospectus or such as do not interfere with the use made and proposed to be made
of such property by the Company and its subsidiaries and as would not,
individually or in the aggregate, have a material adverse effect on the
business, financial position, equity, reserves, surplus, results of operations
or prospects of the Company, Standard or any of their respective subsidiaries;
and any real property and buildings held under lease by the Company, Standard
or any of their respective subsidiaries are held under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the
Company, Standard and their respective subsidiaries;
(f) The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Oregon; Standard has
been and, until immediately prior to the Effective Date (as defined in the
Plan), will continue to be duly organized and validly existing as a mutual life
insurance company in good standing under the laws of the State of Oregon; upon
the Effective Date, Standard will be duly organized and validly existing as a
stock life insurance company in good standing under the laws of the State of
Oregon; each of the Company and Standard has the power and authority (corporate
and other) to own its properties and conduct its business as described in the
Prospectus, and has been duly qualified as a foreign
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corporation for the transaction of business and is in good standing under the
laws of each other jurisdiction in which it owns or leases properties or
conducts any business so as to require such qualification, or is subject to no
material liability or disability by reason of the failure to be so qualified in
any such jurisdiction; and each subsidiary of the Company and Standard has been
duly organized and is validly existing as a corporation or limited liability
company, as applicable, and is in good standing under the laws of its
jurisdiction of organization;
(g) The Company has an authorized capitalization as set forth in the
Prospectus; upon effectiveness of the Plan, Standard will have an authorized
capitalization of __________ shares, each of which will be duly and validly
authorized and issued to the Company on the Effective Date and fully paid and
non-assessable; and all of the issued shares of capital stock of each subsidiary
of the Company and Standard have been duly and validly authorized and issued,
are fully paid and non-assessable and (except as set forth in the Prospectus)
are owned directly or indirectly by the Company or Standard, as applicable, free
and clear of all liens, encumbrances, equities or claims;
(h) The Shares to be issued and sold by the Company to the Underwriters
hereunder and under the International Underwriting Agreement, and the
Policyholder Shares have been duly and validly authorized; when the Shares are
issued and delivered against payment therefor as provided herein and in the
International Underwriting Agreement, and the Policyholder Shares are issued and
delivered to Eligible Members in exchange for their Membership Interests
pursuant to the Plan, the Shares and the Policyholder Shares (collectively, the
"Transaction Shares") will be duly and validly issued and fully paid and non-
assessable and will conform to the description of the Stock contained in the
Prospectus; the issuance of the Transaction Shares is not subject to any
preemptive or other similar right; and there are no rights of any person,
corporation or other entity to require registration of any shares of Stock or
any other securities of the Company in connection with the Demutualization or
the filing of the Registration Statement;
(i) The offering, issuance and delivery of the Policyholder Shares to
Eligible Members in exchange for their Membership Interests pursuant to the Plan
are exempt from the registration requirements of the Act.
(j) The issuance and sale by the Company of the Shares to the Underwriters
hereunder and under the International Underwriting Agreement, and of the
Policyholder Shares to Eligible Members in exchange for their Membership
Interests pursuant to the Plan and the compliance by the Company and Standard
with all of the provisions of this Agreement, the International Underwriting
Agreement and the Plan and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company, Standard or any of their respective
subsidiaries is a party or by which the Company, Standard or any of their
respective subsidiaries is bound or to which any of the property or assets of
the Company, Standard or any of their respective subsidiaries is subject,
or which affects the validity, performance or consummation of the Plan, the
Demutualization or the transactions contemplated by this Agreement, the
International Underwriting Agreement or the Plan nor will such action result in
any violation of the provisions of (i) the Articles of Incorporation or By-laws
of the Company, Standard or any of their respective subsidiaries or (ii) any
statute or any order, rule or regulation of any court or insurance regulatory
agency or other governmental agency or body having jurisdiction over the
Company, Standard or any of their respective subsidiaries or any of their
properties, except, in the case of this clause (ii), as
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set forth in the Prospectus or as would not have, individually or in the
aggregate, have a material adverse effect on the business, financial position,
equity, reserves, surplus, results of operations or prospects of the Company,
Standard or any of their respective subsidiaries;
(k) Neither the Company nor Standard nor any of their respective
subsidiaries is in violation of its Articles of Incorporation or By-laws or in
default in the performance or observance of any material obligation, agreement,
covenant or condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which it is a party or by
which it or any of its properties may be bound;
(l) All filings, consents, approvals, authorizations, orders, licenses,
certificates, permits, registrations and qualifications of or with any court,
insurance regulatory agency or governmental agency or body of the United States
or any state thereof required in connection with the issuance and sale by the
Company of the Shares to the Underwriters hereunder and under the International
Underwriting Agreement, or the issuance of the Policyholder Shares to Eligible
Members in exchange for their Membership Interests pursuant to the Plan, have
been obtained and are in full force and effect, provided, however, that neither
the Company nor Standard makes any representation or warranty as to state
securities or Blue Sky laws or state insurance securities laws in connection
with the purchase and distribution of the Shares by the Underwriters and the
International Underwriters; and all other filings, consents, approvals,
authorizations, orders, licenses, certificates, permits, registrations and
qualifications of or with any court, insurance regulatory agency or other
governmental agency or body required to be obtained or made on or prior to the
Effective Date in connection with the Demutualization or for the consummation by
the Company and Standard of the transactions contemplated by this Agreement, the
International Underwriting Agreement or the Plan have been so obtained or made
and are in full force and effect, except as set forth in the Prospectus or to
the extent that the failure to obtain or make any such consents, approvals,
authorizations, orders, registrations or qualifications would not, individually
or in the aggregate, have a material adverse effect on the business, financial
position, equity, reserves, surplus, results of operations or prospects of the
Company, Standard or any of their respective subsidiaries and which will not
affect the validity, performance of or consummation of the transactions
contemplated by this Agreement, the International Underwriting Agreement and the
Plan;
(m) The Company has made all required filings under applicable insurance
holding company statutes, and has received approvals of acquisition or control
and/or affiliate transactions in each jurisdiction in which such filings or
approvals are required, except where the failure to have made such filings or
receive such approvals in any such jurisdiction would not, individually or in
the aggregate with other such failures, have a material adverse effect on the
business, financial position, stockholders' equity, results of operations or
prospects of the Company or its subsidiaries; each of the Company, Standard and
their respective subsidiaries has all necessary consents, licenses,
authorizations, approvals, orders, certificates and permits (collectively, the
"Consents") of and from, and has made all filings and declarations
(collectively, the "Filings") with, all insurance regulatory authorities, all
Federal, state, local and other governmental authorities, all self-regulatory
organizations and all courts and other tribunals, necessary to own, lease,
license and use its properties and assets and to conduct its business in the
manner described in the Prospectus, except where the failure to have such
Consents or to make such Filings would not, individually or in the aggregate,
have a material adverse effect on the business, financial position, equity,
reserves, surplus, results of operations or prospects of the Company, Standard
or any of their
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respective subsidiaries; all such Consents and Filings are in full force and
effect and neither the Company nor Standard nor any of their subsidiaries has
received any notice of any event, inquiry, investigation or proceeding that
would reasonably be expected to result in the suspension, revocation or
limitation of any such Consent or otherwise impose any limitation on the conduct
of the business of the Company, Standard or any such subsidiary, except as set
forth in the Prospectus or any such suspension, revocation or limitation which
would not, individually or in the aggregate, have a material adverse effect on
the business, financial position, equity, reserves, surplus results of
operations or prospects of the Company, Standard or any of their respective
subsidiaries;
(n) Standard is duly licensed or authorized as an insurer or reinsurer in
each jurisdiction where it is required to be so licensed or authorized to
conduct its business as described in the Prospectus, except where the failure to
be so licensed or authorized would not, individually or in the aggregate, have a
material adverse effect on the assets, business, financial position, equity,
reserves, surplus, results of operations or prospects of Standard; all such
licenses or authorizations are in full force and effect and neither the Company
nor Standard nor any of their subsidiaries has received any notice of any event,
inquiry, investigation or proceeding that would reasonably be expected to result
in the suspension, revocation or limitation of any such licenses or
authorizations or otherwise impose any limitation on the conduct of the business
of Standard, except any such suspension, revocation or limitation which would
not, individually or in the aggregate, have a material adverse effect on the
business, financial position, equity, reserves, surplus, results of operations
or prospects of Standard, and, to the best of the Company's, Standard's and any
such subsidiary's knowledge, there is no sustainable basis for any such
suspension, revocation or limitation; Standard is in compliance with, and
conducts its businesses in conformity with, all applicable insurance laws and
regulations, except where the failure to so comply or conform would not have a
material adverse effect on its business, financial position, equity, reserves,
surplus, results of operations or prospects;
(o) None of the Company, Standard or any of their respective subsidiaries
is required to be registered as an investment company with the Commission or in
any jurisdiction where it conducts business; each of the Company, Standard and
their respective subsidiaries is registered in all capacities with each
Federal, state, local or other governmental authority and is registered with, a
member of, or a participant in, each self-regulatory organization, in each case,
as is necessary to conduct its business as described in or contemplated by the
Prospectus except as set forth in the Prospectus or where the failure to be so
registered would not, individually or in the aggregate, have a material adverse
effect on the business, financial position, equity, reserves, surplus, results
of operations or prospects of the Company, Standard or any of their respective
subsidiaries; all such registrations and memberships are in full force and
effect and neither the Company nor Standard nor any of their respective
subsidiaries has received any notice of any event, inquiry, investigation or
proceeding that would reasonably be expected to result in the suspension,
revocation or limitation of any such registrations, or memberships, except as
set forth in the Prospectus or any such suspension, revocation or limitation
which would not, individually or in the aggregate, have a material adverse
effect on the business, financial position, equity, reserves, surplus, results
of operations or prospects of the Company, Standard or any of their respective
subsidiaries; and, to the best of the Company's, Standard's and their respective
subsidiaries' knowledge, there is no sustainable basis for any such suspension,
revocation or limitation; each of the Company, Standard and their respective
subsidiaries is in compliance with all applicable laws, rules, regulations,
orders, by-laws, and similar requirements in connection with
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such registrations or memberships, as the case may be, except as set forth in
the Prospectus or where the failure to so comply would not, individually or in
the aggregate, have a material adverse effect on the business, financial
position, equity, reserves, surplus results of operations or prospects of the
Company, Standard or any of their respective subsidiaries;
(p) Each subsidiary of Standard which is engaged in the business of acting
as a broker-dealer (the "Broker-Dealer Subsidiaries") is duly licensed or
registered as a broker-dealer in each jurisdiction (including the United States)
where it is required to be so licensed or registered to conduct its business, in
each case, with such exceptions, individually or in the aggregate, as would not
have a material adverse effect on the business, financial position, equity,
reserves, surplus, results of operations or prospects of the Company, Standard
or any of their respective subsidiaries; each Broker-Dealer Subsidiary has all
other necessary Consents of and from all applicable regulatory authorities to
conduct their respective businesses, in each case with such exceptions,
individually or in the aggregate, as would not have a material adverse effect on
the business, financial position, equity, reserves, surplus, results of
operations or prospects of the Company, Standard or any of their respective
subsidiaries; except as otherwise described in the Prospectus, none of the
Broker-Dealer Subsidiaries has received any notification from any applicable
regulatory authority to the effect that any additional Consents are needed to be
obtained by such subsidiary in any case where it could reasonably be expected
that (x) any of the Broker-Dealer Subsidiaries would in fact be required to
obtain any such additional Consents or cease or otherwise limit engaging in
certain business and (y) the failure to have such Consents or limiting such
business would have a material adverse effect on the business, financial
position, equity, reserves, surplus, results of operations or prospects of the
Company, Standard or any of their respective subsidiaries; and each Broker-
Dealer Subsidiary is in compliance with the requirements of the applicable
broker-dealer laws and regulations of each jurisdiction which is applicable to
such subsidiary, and has filed all notices, reports, documents or other
information required to be filed thereunder, in each case with such exceptions,
individually or in the aggregate, as would not have a material adverse effect on
the business, financial position, equity, reserves, surplus, results of
operations or prospects of the Company, Standard or any of their respective
subsidiaries;
(q) The statements set forth in the Prospectus under the captions "Risk
Factors - Changes in Federal and State Regulation May Adversely Impact Pricing,
Reserve Adequacy and Exposure to Litigation", "Risk Factors - Changes in State
and Federal Regulation May Affect Profitability", "Risk Factors - Allocation of
Assets to the Closed Block May Be Inadequate or Excessive", "Risk Factors -
Holding Company Dividends May Be Affected by Limitation on Dividends Imposed on
Standard Insurance Company", "Risk Factors - Challenge to Director's Approval of
Plan May Adversely Affect Terms of Demutualization", "Risk Factors -
Environmental Liability Exposure May Result From Mortgage Loans and Real Estate
Investments", "The Demutualization", "Business - Regulation", "Business -
Competition - Other Competitive Factors", "Restrictions on Acquisitions of
Common Stock" and "Underwriting", insofar as they purport to describe the
provisions of the laws and documents referred to therein, and under the caption
"Description of Capital Stock", insofar as they purport to constitute a summary
of the terms of the Stock, are accurate, complete and fair in all material
respects;
(r) Other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company, Standard or any of their
respective subsidiaries is a party or of which any property of the Company,
Standard or any of their respective
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subsidiaries is the subject which, if determined adversely to the Company,
Standard or any of their respective subsidiaries, would individually or in the
aggregate have a material adverse effect on the business, consolidated financial
position, equity, reserves, surplus, results of operations or prospects of the
Company, Standard or any of their respective subsidiaries; and, to the best of
the Company's and Standard's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;
(s) The Company is not and, after giving effect to the offering and sale of
the Shares, will not be an "investment company", as such term is defined in the
Investment Company Act of 1940, as amended (the "Investment Company Act");
(t) Deloitte & Touche, who have certified certain financial statements of
the Company and the consolidated financial statements of Standard, are
independent public accountants as required by the Act and the rules and
regulations of the Commission thereunder;
(u) Each of the Company, Standard and their respective subsidiaries has
reviewed its operations and that of any third parties with which the Company,
Standard or any of their respective subsidiaries has a material relationship to
evaluate the extent to which the business or operations of the Company, Standard
or any of their respective subsidiaries will be affected by the Year 2000
Problem. As a result of such review, neither the Company nor Standard nor any
of their respective subsidiaries has any reason to believe, and does not
believe, that the Year 2000 Problem will have a material adverse effect on the
business, financial position, equity, reserves, surplus, results of operations
or prospects of the Company, Standard or any of their respective subsidiaries or
result in any material loss or interference with the Company's, Standard's or
any of their respective subsidiaries' business or operations. The "Year 2000
Problem" as used herein means any significant risk that computer hardware or
software used in the receipt, transmission, processing, manipulation, storage,
retrieval, retransmission or other utilization of data or in the operation of
mechanical or electrical systems of any kind will not, in the case of dates or
time periods occurring after December 31, 1999, function at least as effectively
as in the case of dates or time periods occurring prior to January 1, 2000;
(v) The Plan has been duly adopted by the required vote of the Board of
Directors of Standard (which adoption complied with the applicable requirements
of Sections 632.600 through 732.630 (collectively, the "Demutualization
Provisions") of the Oregon Revised Statutes ("ORS")) and submitted to the
Director of the Department of Consumer and Business Services of the State of
Oregon (the "Director") in the manner and accompanied by all information
required by the Demutualization Provisions and conforms in all material respects
to the requirements of the laws of the State of Oregon applicable to the
reorganization of a mutual life insurance company into a stock life insurance
company and any applicable published rules, regulations or guidelines of the
Director in respect thereof; on January 27, 1999 the Director held a public
hearing in accordance with the requirements of Section 732.606 of the ORS, with
regard to which Standard published such notice as is required by Oregon law, for
the purpose of receiving comment on whether the Plan should be approved; on
February 12, 1999 the Director conditionally approved the Plan; upon receipt of
the Director's conditional approval, the Company held a special meeting of
members on March 19, 1999 and the Plan was approved by Eligible Members in
accordance with Section 732.606(5) of the ORS and such approval has not been
rescinded or otherwise withdrawn; no other approvals are required to be obtained
under Oregon law for the effectiveness of the Plan; on the Effective Date, the
Plan will become effective in accordance with its terms and all aspects of the
Demutualization to have been completed on or prior to the Effective Date will be
completed in
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accordance with the Plan and Oregon law; and prior to or contemporaneously with
the First Time of Delivery (as defined in Section 4) each of the actions
required to occur and conditions required to be satisfied on or prior to the
Effective Date pursuant to the Director's Order or the Plan will have occurred
or have been satisfied;
(w) Other than as described or contemplated in the Prospectus, no legal or
governmental proceeding is pending or, to the best of the Company's and
Standard's knowledge, is currently being threatened challenging the Plan or the
consummation of the transactions contemplated thereby or the offering of the
Shares by the Underwriters;
(x) The policyholder information statement mailed to policyholders (the
"Policyholder Information Statement"), as of its date and as of the date of the
vote of the Eligible Members, did 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, in light of the circumstances under which they
were made, not misleading;
(y) The Transaction Shares have been approved for listing on the New York
Stock Exchange, Inc. (the "Exchange"), subject to notice of issuance, and, at
each Time of Delivery (as defined in Section 4) hereunder, the Transaction
Shares issued at or prior to such Time of Delivery will be listed thereon;
(z) The pro forma condensed consolidated balance sheet and condensed
consolidated statements of earnings and the related notes thereto set forth in
the Registration Statement and the Prospectus with respect to Standard have been
prepared in all material respects in accordance with the applicable requirements
of Rule 11-02 of Regulation S-X promulgated under the Securities Exchange Act of
1934, as amended, have been compiled on the pro forma basis described therein,
and, in the opinion of the Company and Standard, the assumptions used in the
preparation thereof were reasonable at the time made and the adjustments used
therein are based upon good faith estimates and assumptions believed by the
Company and Standard to be reasonable at the time made; and
(aa) Neither the Company nor Standard has any debt securities or preferred
stock that have been rated by any "nationally recognized statistical rating
organization", as that term is defined by the Commission for purposes of Rule
436(g)(2) under the Act.
2. Subject to the terms and conditions herein set forth, (a) the Company
agrees to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Company, at
a purchase price per share of $................, the number of Firm Shares set
forth opposite the name of such Underwriter in Schedule I hereto and (b) in the
event and to the extent that the Underwriters shall exercise the election to
purchase Optional Shares as provided below, the Company agrees to issue and sell
to each of the Underwriters, and each of the Underwriters agrees, severally and
not jointly, to purchase from the Company, at the purchase price per share set
forth in clause (a) of this Section 2, that portion of the number of Optional
Shares as to which such election shall have been exercised (to be adjusted by
you so as to eliminate fractional shares) determined by multiplying such number
of Optional Shares by a fraction, the numerator of which is the maximum number
of Optional Shares which such Underwriter is entitled to purchase as set forth
opposite the name of such Underwriter in Schedule I hereto and the denominator
of
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which is the maximum number of Optional Shares that all of the Underwriters
are entitled to purchase hereunder.
The Company hereby grants to the Underwriters the right to purchase at
their election up to ................... Optional Shares, at the purchase price
per share set forth in the paragraph above, for the sole purpose of covering
overallotments in the sale of the Firm Shares. Any such election to purchase
Optional Shares may be exercised only by written notice from you to the Company,
given within a period of 30 calendar days after the date of this Agreement,
setting forth the aggregate number of Optional Shares to be purchased and the
date on which such Optional Shares are to be delivered, as determined by you but
in no event earlier than the First Time of Delivery (as defined in Section 4
hereof) or, unless you and the Company otherwise agree in writing, earlier than
two or later than ten business days after the date of such notice.
3. Upon the authorization by you of the release of the Firm Shares, the
several Underwriters propose to offer the Firm Shares for sale upon the terms
and conditions set forth in the Prospectus.
It is understood that 1,250,000 Firm Shares will initially be reserved by
the several Underwriters for offer and sale upon the terms and conditions set
forth in the Prospectus to certain policyholders of Standard who have heretofore
delivered to you offers or indications of interest to purchase Firm Shares in
form satisfactory to you, and that any allocation of such Firm Shares among such
persons will be made in accordance with timely directions received by you from
the Company; provided that under no circumstances will you or any Underwriter be
liable to the Company for any action taken or omitted in good faith in
connection with such offering to such persons. It is further understood that
any of such Firm Shares which are not purchased by such persons will be offered
by the Underwriters to the public under the terms and conditions set forth in
the Prospectus.
4. (a) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Xxxxxxx, Xxxxx & Co. may request upon at least forty-eight hours' prior
notice to the Company shall be delivered by or on behalf of the Company to
Xxxxxxx, Sachs & Co., through the facilities of the Depository Trust Company
("DTC"), for the account of such Underwriter, against payment by or on behalf of
such Underwriter of the purchase price therefor by wire transfer of Federal
(same-day) funds to the account specified by the Company to Xxxxxxx, Xxxxx & Co.
at least forty-eight hours in advance. The Company will cause the certificates
representing the Shares to be made available for checking and packaging at least
twenty-four hours prior to the Time of Delivery (as defined below) with respect
thereto at the office of DTC or its designated custodian (the "Designated
Office"). The time and date of such delivery and payment shall be, with respect
to the Firm Shares, 7:00 a.m., Los Angeles time, on ............., 1999 or such
other time and date as Xxxxxxx, Sachs & Co. and the Company may agree upon in
writing, and, with respect to the Optional Shares, 7:00 a.m., Los Angeles time,
on the date specified by Xxxxxxx, Xxxxx & Co. in the written notice given by
Xxxxxxx, Sachs & Co. of the Underwriters' election to purchase such Optional
Shares, or such other time and date as Xxxxxxx, Xxxxx & Co. and the Company may
agree upon in writing. Such time and date for delivery of the Firm Shares is
herein called the "First Time of Delivery", such time and date for delivery of
the Optional Shares, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
-10-
(b) The documents to be delivered at each Time of Delivery by or on behalf
of the parties hereto pursuant to Section 7 hereof, including the cross receipt
for the Shares and any additional documents requested by the Underwriters
pursuant to Section 7 hereof, will be delivered at the offices of Xxxxxxxx &
Xxxxxxxx, 0000 Xxxxxxx Xxxx Xxxx, Xxx Xxxxxxx, Xxxxxxxxxx 00000 (the "Closing
Location"), and the Shares will be delivered at the Designated Office, all at
such Time of Delivery. A meeting will be held at the Closing Location at 3:00
p.m., Los Angeles time, on the New York Business Day next preceding such Time of
Delivery, at which meeting the final drafts of the documents to be delivered
pursuant to the preceding sentence will be available for review by the parties
hereto. For the purposes of this Section 4, "New York Business Day" shall mean
each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in New York are generally authorized or obligated by law or
executive order to close.
5. The Company and Standard, jointly and severally, agree with each of
the Underwriters:
(a) To prepare the Prospectus in a form approved by you and to file such
Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's
close of business on the second business day following the execution and
delivery of this Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Act; to make no further amendment or any
supplement to the Registration Statement or Prospectus which shall be
disapproved by you promptly after reasonable notice thereof; to advise you,
promptly after it receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any supplement to
the Prospectus or any amended Prospectus has been filed and to furnish you with
copies thereof; to advise you, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus, of the
suspension of the qualification of the Shares for offering or sale in any
jurisdiction, of the initiation or threatening of any proceeding for any such
purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or prospectus or suspending any
such qualification, promptly to use its best efforts to obtain the withdrawal of
such order;
(b) Promptly from time to time to take such action as you may reasonably
request to qualify the Shares for offering and sale under the securities laws of
such jurisdictions as you may request and to comply with such laws so as to
permit the continuance of sales and dealings therein in such jurisdictions for
as long as may be necessary to complete the distribution of the Shares, provided
that in connection therewith the Company shall not be required to qualify as a
foreign corporation or to file a general consent to service of process in any
jurisdiction;
(c) Prior to 10:00 A.M., New York City time, on the New York Business Day
next succeeding the date of this Agreement and from time to time, to furnish the
Underwriters with copies of the Prospectus in New York City in such quantities
as you may reasonably request, and, if the delivery of a prospectus is required
at any time prior to the expiration of nine months after the time of issue of
the Prospectus in connection with the offering or sale of the Shares and if at
such time any event shall have occurred as a result of which the Prospectus as
then amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made
when such Prospectus is delivered, not misleading, or, if for any other reason
it
-11-
shall be necessary during such period to amend or supplement the Prospectus
in order to comply with the Act, to notify you and upon your request to prepare
and furnish without charge to each Underwriter and to any dealer in securities
as many copies as you may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which will correct such statement
or omission or effect such compliance, and in case any Underwriter is required
to deliver a prospectus in connection with sales of any of the Shares at any
time nine months or more after the time of issue of the Prospectus, upon your
request but at the expense of such Underwriter, to prepare and deliver to such
Underwriter as many copies as you may request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Act;
(d) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Registration Statement (as defined in Rule 158(c) under the Act), an
earnings statement of the Company and its subsidiaries (which need not be
audited) complying with Section 11(a) of the Act and the rules and regulations
thereunder (including, at the option of the Company, Rule 158);
(e) During the period beginning from the date hereof and continuing to and
including the date 180 days after the date of the Prospectus, not to offer,
sell, contract to sell or otherwise dispose of, except as provided hereunder and
under the International Underwriting Agreement, any securities of the Company
that are substantially similar to the Shares, including but not limited to any
securities that are convertible into or exchangeable for, or that represent the
right to receive, Stock or any such substantially similar securities (other than
pursuant to the StanCorp 1999 Omnibus Stock Incentive Plan, the StanCorp 1999
Employee Share Purchase Plan or the StanCorp Long-Term Incentive Compensation
Plan, or upon the conversion or exchange of convertible or exchangeable
securities outstanding as of, the date of this Agreement), without your prior
written consent, except that the Company may issue Policyholder Shares to
Eligible Members in connection with the consummation of the Demutualization
pursuant to the Plan;
(f) To furnish to its stockholders as soon as practicable after the end of
each fiscal year an annual report (including a balance sheet and statements of
income, stockholders' equity and cash flows of the Company and its consolidated
subsidiaries certified by independent public accountants) and, as soon as
practicable after the end of each of the first three quarters of each fiscal
year (beginning with the fiscal quarter ending after the effective date of the
Registration Statement), to make available to its stockholders consolidated
summary financial information of the Company and its subsidiaries for such
quarter in reasonable detail;
(g) During a period of five years from the effective date of the
Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to stockholders, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which any class of securities of the Company is listed; and (ii)
such additional information concerning the business and financial condition of
the Company as you may from time to time reasonably request (such financial
statements to be on a consolidated basis to the extent the accounts of the
Company and its subsidiaries are consolidated in reports furnished to its
stockholders generally or to the Commission);
-12-
(h) To use the net proceeds received by it from the sale of the Shares
pursuant to this Agreement and the International Underwriting Agreement in the
manner specified in the Prospectus under the caption "Use of Proceeds";
(i) To use its best efforts to list, subject to notice of issuance, the
Shares on the Exchange;
(j) To file with the Commission such information on Form 10-Q or Form 10-K
as may be required by Rule 463 under the Act;
(k) If the Company elects to rely upon Rule 462(b), the Company shall file
a Rule 462(b) Registration Statement with the Commission in compliance with Rule
462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and
the Company shall at the time of filing either pay to the Commission the filing
fee for the Rule 462(b) Registration Statement or give irrevocable instructions
for the payment of such fee pursuant to Rule 111(b) under the Act; and
(l) Prior to or contemporaneously with the First Time of Delivery, to take
all actions necessary in order to consummate the Plan and to cause the
transactions contemplated thereby to have occurred at or prior to the First Time
of Delivery.
6. The Company and Standard, jointly and severally, covenant and agree
with the several Underwriters that the Company or Standard will pay or cause to
be paid the following: (i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares under
the Act and all other expenses in connection with the preparation, printing and
filing of the Registration Statement, any Preliminary Prospectus and the
Prospectus and amendments and supplements thereto and the mailing and delivering
of copies thereof to the Underwriters and dealers; (ii) the cost of printing or
producing any Agreement among Underwriters, this Agreement, the International
Underwriting Agreement, the Agreement between Syndicates, the Selling Agreement,
the Blue Sky Memorandum, closing documents (including any compilations thereof)
and any other documents in connection with the offering, purchase, sale and
delivery of the Shares; (iii) all expenses in connection with the qualification
of the Shares for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky survey; (iv) all fees and expenses in connection with listing the
Transaction Shares on the Exchange; (v) the fees and disbursements of counsel
for the Underwriters in connection with the directed share offering contemplated
in the second paragraph of Section 3 of this Agreement; (vi) the filing fees
incident to, and the fees and disbursements of counsel for the Underwriters in
connection with, securing any required review by the National Association of
Securities Dealers, Inc. of the terms of the sale of the Shares; (vii) the cost
of preparing stock certificates; (viii) the cost and charges of any transfer
agent or registrar; and (ix) all other costs and expenses incident to the
performance of its obligations hereunder which are not otherwise specifically
provided for in this Section. It is understood, however, that, except as
provided in this Section, and Sections 8 and 11 hereof, the Underwriters will
pay all of their own costs and expenses, including the fees of their counsel,
stock transfer taxes on resale of any of the Shares by them, and any advertising
expenses connected with any offers they may make.
7. The obligations of the Underwriters hereunder, as to the Shares to be
delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations
-13-
and warranties and other statements of the Company and Standard herein are, at
and as of such Time of Delivery, true and correct, the condition that the
Company and Standard shall have performed all of their respective obligations
hereunder theretofore to be performed, and the following additional conditions:
(a) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with Section 5(a) hereof;
if the Company has elected to rely upon Rule 462(b), the Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., Washington,
D.C. time, on the date of this Agreement; no stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have been
issued and no proceeding for that purpose shall have been initiated or
threatened by the Commission; and all requests for additional information on the
part of the Commission shall have been complied with to your reasonable
satisfaction;
(b) Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters, shall have furnished
to you such written opinion or opinions (a draft of each such opinion is
attached as Annex II(a) hereto), dated such Time of Delivery, with respect to
the incorporation of the Company, the validity of the Shares being delivered at
such Time of Delivery, the Registration Statement, the Prospectus, and other
related matters as you may reasonably request, and such counsel shall have
received such papers and information as they may reasonably request to enable
them to pass upon such matters;
(c) Debevoise & Xxxxxxxx, counsel for the Company, shall have furnished to
you their written opinion (a draft of such opinion is attached as Annex II(b)
hereto), dated such Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The issuance and delivery of the Policyholder Shares to Eligible
Members in exchange for their Membership Interests pursuant to the Plan are
exempt from the registration requirements of the Act;
(ii) All filings, consents, approvals, authorizations, orders,
licenses, certificates, permits, registrations and qualifications of or
with any insurance regulatory agency or governmental agency or body of the
United States or the State of New York required in connection with the
issuance and sale by the Company of the Shares being delivered at such Time
of Delivery and of the Policyholder Shares to Eligible Members in exchange
for their Membership Interests pursuant to the Plan have been obtained and
are in full force and effect, except that the Company and Standard have
applied for an exemption from certain of the prohibited transaction
restrictions of the Employee Retirement Income Security Act of 1974
("ERISA") and from the related prohibited transaction excise tax provisions
of the Internal Revenue Code of 1986 (the "Code"), which have not yet been
obtained, and that such counsel need express no opinion as to state
securities or Blue Sky laws or state insurance securities laws in
connection with the purchase and distribution of the Shares by the
Underwriters and the International Underwriters; and all other filings,
consents, approvals, authorizations, orders, licenses, certificates,
permits, registrations and qualifications of or with any such insurance
regulatory agency or other governmental agency or body required to be
obtained or made on or prior to the Effective Date in connection with the
Demutualization or for the consummation by the Company and Standard of the
transactions contemplated by this Agreement, the International Underwriting
Agreement or the Plan have been so obtained or made and are
-14-
in full force and effect, except that the Company and Standard have applied
for an exemption from certain of the prohibited transaction restrictions of
ERISA and from the related prohibited transaction excise tax provisions of
the Code, which have not yet been obtained, and except as set forth in the
Prospectus or to the extent that the failure to obtain or make any such
filings, consents, approvals, authorizations, orders, registrations,
licenses, certificates, permits or qualifications would not, individually
or in the aggregate, have a material adverse effect on the business,
financial position, equity or results of operations of the Company,
Standard or any of their respective subsidiaries and which will not affect
the validity, performance of or consummation of the transactions
contemplated by this Agreement, the International Underwriting Agreement
and the Plan;
(iii) The statements set forth in the Prospectus under the captions
"The Demutualization" and "Business - Regulation - ERISA Considerations",
insofar as they purport to describe the provisions of the laws and
documents referred to therein, are accurate, complete and fair in all
material respects;
(iv) Neither the Company nor Standard is an "investment company", as
such term is defined in the Investment Company Act; and
(v) The Registration Statement and the Prospectus and any further
amendments and supplements thereto made by the Company prior to such Time
of Delivery (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the Act and the
rules and regulations thereunder.
Such counsel shall also state that while they have not themselves checked
the accuracy and completeness of, or otherwise verified, and are not passing
upon and assume no responsibility for the accuracy or completeness of, the
statements contained in the Registration Statement or the Prospectus, except to
the limited extent stated in paragraph (iii) above, in the course of their
review and discussion of the contents of the Registration Statement and the
Prospectus with certain officers and employees of the Company and its
independent accountants, but without independent check or verification, no facts
have come to their attention which cause them to believe that the Registration
Statement (other than the financial statements and schedules and other financial
information contained therein, as to which they need express no belief) at the
time it became effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements contained therein not misleading, or that the Prospectus
(other than the financial statements and schedules and other financial
information contained therein, as to which they need express no belief), as of
its date and as of the date of such opinion, contains any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(d) Xxxxxxx X. Xxxxx, Counsel to the Company, shall have furnished to you
his written opinion (a draft of such opinion is attached as Annex II(c) hereto),
dated such Time of Delivery, in form and substance satisfactory to you, to the
effect that:
(i) Each of the Company and Standard has power and authority
(corporate and other) to own its properties and conduct its business as
described in the Prospectus;
-15-
(ii) The Company has an authorized capitalization as set forth in the
Prospectus; the Transaction Shares have been duly and validly authorized;
when issued and delivered against payment therefor by the Underwriters as
provided in this Agreement and in the International Underwriting Agreement,
the Shares being delivered at such Time of Delivery will be duly and
validly authorized and issued and fully paid and non-assessable; the
Policyholder Shares, when issued and delivered to Eligible Members in
exchange for their Membership Interests pursuant to the Plan, will be duly
and validly issued and fully paid and non-assessable; and the Transaction
Shares conform to the description of the Stock contained in the Prospectus;
(iii) Each of the Company and Standard has been duly qualified as a
foreign corporation for the transaction of business and is in good standing
under the laws of each other jurisdiction in which it owns or leases
properties or conducts any business so as to require such qualification,
except where the failure to be so qualified in any such jurisdiction would
not, individually or in the aggregate, have a material adverse effect on
the business, financial position, equity, reserves, surplus, results of
operations or prospects of the Company or Standard (such counsel being
entitled to rely in respect of the opinion in this clause upon opinions of
local counsel and in respect of matters of fact upon certificates of
officers of the Company, provided that such counsel shall state that they
believe that both you and they are justified in relying upon such opinions
and certificates;
(iv) Each of the respective subsidiaries of the of the Company and
Standard has been duly organized and is validly existing as a corporation
or limited liability company in good standing under the laws of its
jurisdiction of organization; and all of the issued shares of capital stock
or other ownership interests of each such subsidiary have been duly and
validly authorized and issued, are fully paid and non-assessable, and
(except as otherwise set forth in the Prospectus) are owned directly or
indirectly by the Company or Standard, as applicable, free and clear of all
liens, encumbrances, equities or claims (such counsel being entitled to
rely in respect of the opinion in this clause upon opinions of local
counsel and in respect to matters of fact upon certificates of officers of
the Company or its subsidiaries, provided that such counsel shall state
that they believe that both you and they are justified in relying upon such
opinions and certificates;
(v) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or Standard or any of their respective
subsidiaries is a party or of which any property of the Company or
Standard, or any of their respective subsidiaries is the subject which, if
determined adversely to the Company, Standard or any of their respective
subsidiaries, would individually or in the aggregate have a material
adverse effect on the business, consolidated financial position, equity or
results of operations of the Company, Standard or any of their respective
subsidiaries; to the best of such counsel's knowledge, no such proceedings
are threatened or contemplated by governmental authorities or threatened by
others; and, to the best of such counsel's knowledge, other than as
described or contemplated in the Prospectus, no legal or governmental
proceeding is pending or is currently being threatened challenging the Plan
or the consummation of the transactions contemplated thereby or the
offering of the Shares by the Underwriters;
-16-
(vi) The issuance and sale by the Company to the Underwriters of the
Shares being delivered at such Time of Delivery and of the Policyholder
Shares to Eligible Members in exchange for their Membership Interests
pursuant to the Plan and the compliance by the Company and Standard with
all of the provisions of this Agreement, the International Underwriting
Agreement and the Plan and the consummation of the transactions herein and
therein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument known to such counsel to which the Company,
Standard or any of their respective subsidiaries is a party or by which the
Company, Standard or any of their respective subsidiaries is bound or to
which any of the property or assets of the Company, Standard or any of
their respective subsidiaries is subject, or which affects the validity,
performance or consummation of the Plan, the Demutualization or the
transactions contemplated by this Agreement, the International Underwriting
Agreement or the Plan, nor will such action result in any violation of the
provisions of (i) the Articles of Incorporation or By-laws of the Company
or Standard or (ii) any statute or any order, rule or regulation known to
such counsel of any court or insurance regulatory agency or other
governmental agency or body having jurisdiction over the Company, Standard
or any of their respective subsidiaries or any of their properties, except
in the case of this clause (ii), as would not have a material adverse
effect on the business, financial position, equity, reserves, surplus,
results of operations or prospects of the Company, Standard or any of their
respective subsidiaries, and except that the Company and Standard have
applied for an exemption from certain of the prohibited transaction
restrictions of ERISA and from the related prohibited transaction excise
tax provisions of the Code, which have not yet been obtained;
(vii) All filings, consents, approvals, authorizations, orders,
licenses, certificates, permits, registrations and qualifications of or
with any court, insurance regulatory agency or governmental agency or body
of the United States or any state thereof required in connection with the
issuance and sale by the Company to the Underwriters of the Shares being
delivered at such Time of Delivery and of the Policyholder Shares to
Eligible Members in exchange for their Membership Interests pursuant to the
Plan have been obtained and are in full force and effect, except that the
Company and Standard have applied for an exemption from certain of the
prohibited transaction restrictions of ERISA and from the related
prohibited transaction excise tax provisions of the Code, which have not
yet been obtained, and that such counsel need express no opinion as to
state securities or Blue Sky laws or state insurance securities laws in
connection with the purchase and distribution of the Shares by the
Underwriters; and all other filings, consents, approvals, authorizations,
orders, licenses, certificates, permits, registrations and qualifications
of or with any court, insurance regulatory agency or other governmental
agency or body required to be obtained or made on or prior to the Effective
Date in connection with the Demutualization or for the consummation by the
Company and Standard of the transactions contemplated by this Agreement,
the International Underwriting Agreement or the Plan have been so obtained
or made and are in full force and effect, except that the Company and
Standard have applied for an exemption from certain of the prohibited
transaction restrictions of ERISA and from the related prohibited
transaction restrictions of the Code, which have not yet been obtained, and
except as set forth in the Prospectus or to the extent that the failure to
obtain or make any such filings, consents, approvals, authorizations,
orders, registrations, licenses, certificates, permits or qualifications
would not, individually or in the aggregate, have a material adverse effect
on the business, financial position, equity or results of operations of the
Company, Standard or any of their respective subsidiaries and
-17-
which will not affect the validity, performance of or consummation of the
transactions contemplated by this Agreement, the International Underwriting
Agreement and the Plan;
(viii) In accordance with Oregon law, the Plan has been duly adopted
by the required vote of the Board of Directors of Standard and all
necessary approvals for the Plan to become effective have been duly
obtained from Eligible Members and the Director, all such approvals are in
full force and effect and no other approvals are required to be obtained
under Oregon law for the effectiveness of the Plan;
(ix) To such counsel's knowledge, neither the Company nor Standard
nor any of their respective subsidiaries is in violation of its Articles of
Incorporation or By-laws or in default in the performance or observance of
any material obligation, agreement, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which it is a party or by which it or any of its
properties may be bound;
(x) None of the Company, Standard or any of their respective
subsidiaries is required to be registered as an investment company with the
Commission or in any jurisdiction where it conducts business; to the best
of such counsel's knowledge, each of the Company, Standard and their
respective subsidiaries is registered in all capacities with each Federal,
state, local or other governmental authority and is registered with, a
member of, or a participant in, each self-regulatory organization, in each
case, as is necessary to conduct its business as described in or
contemplated by the Prospectus except as set forth in the Prospectus or
where the failure to be so registered would not, individually or in the
aggregate, have a material adverse effect on the business, financial
position, equity, reserves, surplus, results of operations or prospects of
the Company, Standard or any of their respective subsidiaries; to the best
of such counsel's knowledge, all such registrations and memberships are in
full force and effect and neither the Company nor Standard nor any of their
respective subsidiaries has received any notice of any event, inquiry,
investigation or proceeding that would reasonably be expected to result in
the suspension, revocation or limitation of any such registrations, or
memberships, except as set forth in the Prospectus or any such suspension,
revocation or limitation which would not, individually or in the aggregate,
have a material adverse effect on the business, financial position, equity,
reserves, surplus, results of operations or prospects of the Company,
Standard or any of their respective subsidiaries; to such counsel's
knowledge, each of the Company, Standard and their respective subsidiaries
is in compliance with all applicable laws, rules, regulations, orders, by-
laws, and similar requirements in connection with such registrations or
memberships, as the case may be, except as set forth in the Prospectus or
where the failure to so comply would not, individually or in the aggregate,
have a material adverse effect on the business, financial position, equity
or results of operations of the Company, Standard or any of their
respective subsidiaries;
(xi) Each Broker-Dealer Subsidiary is duly licensed or registered as
a broker-dealer in each jurisdiction (including the United States) where it
is required to be so licensed or registered to conduct its business, in
each case, with such exceptions, individually or in the aggregate, as would
not have a material adverse effect on the business, financial position,
equity, reserves, surplus, results of operations or prospects of the
Company, Standard or any of their respective subsidiaries; each Broker-
Dealer Subsidiary has all other
-18-
necessary Consents of and from all applicable regulatory authorities to
conduct their respective businesses, in each case with such exceptions,
individually or in the aggregate, as would not have a material adverse
effect on the business, financial position, equity, reserves, surplus,
results of operations or prospects of the Company, Standard or any of their
respective subsidiaries; except as otherwise described in the Prospectus,
to such counsel's knowledge none of the Broker-Dealer Subsidiaries has
received any notification from any applicable regulatory authority to the
effect that any additional Consents are needed to be obtained by such
subsidiary in any case where it could reasonably be expected that (x) any
of the Broker-Dealer Subsidiaries would in fact be required to obtain any
such additional Consents or cease or otherwise limit engaging in certain
business and (y) the failure to have such Consents or limiting such
business would have a material adverse effect on the business, financial
position, equity, reserves, surplus, results of operations or prospects of
the Company, Standard or any of their respective subsidiaries; and, to such
counsel's knowledge, each Broker-Dealer Subsidiary is in compliance with
the requirements of the applicable broker-dealer laws and regulations of
each jurisdiction which is applicable to such subsidiary, and has filed all
notices, reports, documents or other information required to be filed
thereunder, in each case with such exceptions, individually or in the
aggregate, as would not have a material adverse effect on the business,
financial position, equity, reserves, surplus, results of operations or
prospects of the Company, Standard or any of their respective subsidiaries;
(xii) The statements set forth in the Prospectus under the captions
"Risk Factors Holding Company Dividends May Be Affected by Limitation on
Dividends Imposed on Standard Insurance Company", "Risk Factors - Challenge
to Director's Approval of Plan May Adversely Affect Terms of
Demutualization", "Risk Factors - Environmental Liability Exposure May
Result From Mortgage Loans and Real Estate Investments", "The
Demutualization", "Business - Regulation" and "Business - Competition -
Other Competitive Factors", insofar as they purport to describe the
provisions of the laws and documents referred to therein, are accurate,
complete and fair in all material respects;
(xiii) To the best of such counsel's knowledge, other than as
described or contemplated in the Prospectus, no legal or governmental
proceeding is pending or is currently being threatened challenging the Plan
or the consummation of the transactions contemplated thereby or the
offering of the Shares by the Underwriters;
(xiv) To the best of such counsel's knowledge, the Company has made
all required filings under applicable insurance holding company statutes,
and has received approvals of acquisition of control and/or affiliate
transactions in each jurisdiction in which such filings or approvals are
required, except where the failure to have made such filings or to receive
such approvals in any such jurisdiction would not, individually or in the
aggregate with such other failures, have a material adverse effect on the
business, financial position, stockholders' equity or results of operations
of the Company or any of its subsidiaries; to the best of such counsel's
knowledge, each of the Company, Standard and their respective subsidiaries
has all necessary Consents of and from, and has made all Filings with, all
insurance regulatory authorities, all Federal, state, local and other
governmental authorities, all self-regulatory organizations and all courts
and other tribunals, necessary to own, lease, license and use its
properties and assets and to conduct its business in the manner described
in the Prospectus, except where the failure to have such Consents or to
make such Filings would
-19-
not, individually or in the aggregate, have a material adverse effect on
the business, financial position, equity, reserves, surplus, results of
operations or prospects of the Company, Standard or any of their respective
subsidiaries; to the best of such counsel's knowledge, all such Consents
and Filings are in full force and effect and neither the Company nor
Standard nor any of their subsidiaries has received a notice of any event,
inquiry, investigation or proceeding that would reasonably be expected to
result in the suspension, revocation or limitation of any such Consent or
otherwise impose any limitation on the conduct of the business of the
Company, Standard or any such subsidiary, except as set forth in the
Prospectus or any such suspension, revocation or limitation which would
not, individually or in the aggregate, have a material adverse effect on
the business, financial position, equity or results of operations of the
Company, Standard or any of their respective subsidiaries;
(xv) Standard is duly licensed or authorized as an insurer or
reinsurer to conduct its business under the insurance laws of each
jurisdiction where it is required to be so licensed or authorized to
conduct its business as described in the Prospectus, except where the
failure to be so licensed or authorized would not, individually or in the
aggregate, have a material adverse effect on the business, financial
position, equity or results of operations of Standard; all such licenses or
authorizations are in full force and effect and, to the best of such
counsel's knowledge, neither the Company nor Standard nor any of their
respective subsidiaries has received any notice of any event, inquiry,
investigation or proceeding that would reasonably be expected to result in
the suspension, revocation or limitation of any such licenses or
authorizations or otherwise impose any limitation on the conduct of the
business of Standard, except any such suspension, revocation or limitation
which would not, individually or in the aggregate, have a material adverse
effect on the business, financial position, equity or results of operations
of Standard and to such counsel's knowledge, there is no sustainable basis
for any such suspension, revocation or limitation; and, to such counsel's
knowledge, Standard is in compliance with, and conducts its business in
conformity with, all applicable insurance laws and regulations, except
where the failure to comply or conform would not have a material adverse
effect on its business, financial position, equity or results of
operations; and
(xvi) Such counsel does not know of any amendment to the Registration
Statement required to be filed or of any contracts or other documents of a
character required to be filed as an exhibit to the Registration Statement
or required to be described in the Registration Statement or the Prospectus
which are not filed or described as required.
Such counsel shall also state that while they have not themselves checked
the accuracy and completeness of, or otherwise verified, and are not passing
upon and assume no responsibility for the accuracy or completeness of, the
statements contained in the Registration Statement or the Prospectus, except to
the limited extent stated in paragraph (iii) above, in the course of their
review and discussion of the contents of the Registration Statement and the
Prospectus with certain officers and employees of the Company and its
independent accountants, but without independent check or verification, no facts
have come to their attention which cause them to believe that the Registration
Statement (other than the financial statements and schedules and other financial
information contained therein, as to which they need express no belief) at the
time it became effective contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary to
make the statements contained therein not misleading, or that
-20-
the Prospectus (other than the financial statements and schedules and other
financial information contained therein as to which they need express no
belief), as of its date and as of the date of such opinion, contains any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(e) Stoel Rives, LLP, Oregon counsel to the Company, shall have furnished
to you their written opinion (a draft of such opinion is attached as Annex II(d)
hereto), dated such Time of Delivery, in form and substance satisfactory to you,
to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of Oregon;
(ii) Standard has been duly incorporated and is validly existing as a
stock life insurance company in good standing under the laws of the State
of Oregon;
(iii) This Agreement and the International Underwriting Agreement
have been duly authorized, executed and delivered by the Company and
Standard; and
(iv) The statements set forth in the Prospectus under the caption
"Description of Capital Stock", insofar as they purport to constitute a
summary of the terms of the Stock, are accurate, complete and fair in all
material respects.
(f) On the date of the Prospectus at a time prior to the execution of this
Agreement, at 9:30 a.m., New York City time, on the effective date of any post-
effective amendment to the Registration Statement filed subsequent to the date
of this Agreement and also at each Time of Delivery, Deloitte & Touche shall
have furnished to you a letter or letters, dated the respective dates of
delivery thereof, in form and substance satisfactory to you, to the effect set
forth in Annex I hereto (the executed copy of the letter delivered prior to the
execution of this Agreement is attached as Annex I(a) hereto and a draft of the
form of letter to be delivered on the effective date of any post-effective
amendment to the Registration Statement and as of each Time of Delivery is
attached as Annex I(b) hereto);
(g) (i) Neither the Company nor Standard nor any of their respective
subsidiaries shall have sustained since the date of the latest audited financial
statements included in the Prospectus any loss or interference with its business
from fire, explosion, flood or other calamity, whether or not covered by
insurance, or from any labor dispute or court or governmental action, order or
decree, otherwise than as set forth or contemplated in the Prospectus, and (ii)
since the respective dates as of which information is given in the Prospectus
there shall not have been (A) any addition, or any development involving a
prospective addition, to Standard's liability for future policyholder benefits
and claims, (B) any change in the capital stock of the Company, Standard or any
of their respective subsidiaries, (C) any change in the long-term debt of the
Company, Standard or any of their respective subsidiaries or (D) any change, or
any development involving a prospective change, in or affecting the general
affairs or management or the financial position, equity or results of operations
(in each case considered on either a statutory or a GAAP basis) of the Company,
Standard or their respective subsidiaries, otherwise than as set forth or
contemplated in the Prospectus, the effect of which, in any such case described
in Clause (i) or (ii), is in the judgment of the Representatives so material and
adverse as to make it impracticable or inadvisable to
-21-
proceed with the public offering or the delivery of the Shares being delivered
at such Time of Delivery on the terms and in the manner contemplated in the
Prospectus;
(h) On or after the date hereof (i) no downgrading shall have occurred in
the rating accorded Standard's financial strength or claims paying ability by
any of Xxxxx'x Investor Services, Inc., Standard & Poor's Rating Services, Duff
& Xxxxxx Inc. or A.M. Best & Co., and (ii) no such organization shall have
publicly announced that it has under surveillance or review, with possible
negative implications, its rating of Standard's financial strength or claims
paying ability;
(i) On or after the date hereof there shall not have occurred any of the
following: (i) a suspension or material limitation in trading in securities
generally on the Exchange; (ii) a suspension or material limitation in trading
in the Company's securities on the Exchange; (iii) a general moratorium on
commercial banking activities declared by either Federal, New York, California,
or Oregon State authorities; or (iv) the outbreak or escalation of hostilities
involving the United States or the declaration by the United States of a
national emergency or war, if the effect of any such event specified in this
Clause (iv) in the judgment of the Representatives makes it impracticable or
inadvisable to proceed with the public offering or the delivery of the Shares
being delivered at such Time of Delivery on the terms and in the manner
contemplated in the Prospectus;
(j) The Transaction Shares to be issued by the Company shall have been duly
listed, subject to notice of issuance, on the Exchange;
(k) Prior to or contemporaneously with the First Time of Delivery, each of
the actions required to occur and conditions required to be satisfied on or
prior to the Effective Date pursuant to the Plan shall have occurred or been
satisfied;
(l) With respect to the First Time of Delivery, the Plan shall,
concurrently therewith, become effective in accordance with its terms;
(m) The Company shall have complied with the provisions of Section 5(c)
hereof with respect to the furnishing of prospectuses on the New York Business
Day next succeeding the date of this Agreement;
(n) No appeal of the Director's Order or other action challenging the
validity of the Demutualization or the approval thereof shall have been filed
and remain outstanding the effect of which, in the judgment of the
Representatives, makes it impracticable or inadvisable to proceed with the
public offering or the delivery of the Transaction Shares being delivered at
such Time of Delivery on the terms and in the manner contemplated in the
Prospectus; and
(o) The Company and Standard shall have each furnished or caused to be
furnished to you at such Time of Delivery certificates of officers of the
Company and Standard satisfactory to you as to the accuracy of the
representations and warranties of the Company and Standard, respectively, herein
at and as of such Time of Delivery, as to the performance by the Company and
Standard, respectively, of all of their respective obligations hereunder to be
performed at or prior to such Time of Delivery, as to the matters set forth in
subsections (a) and (g) of this Section and as to such other matters as you may
reasonably request.
-22-
8. (a) The Company and Standard will, jointly and severally, indemnify
and hold harmless each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which such Underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and will
reimburse each Underwriter for any legal or other expenses reasonably incurred
by such Underwriter in connection with investigating or defending any such
action or claim as such expenses are incurred; provided, however, that the
Company and Standard shall not be liable in any such case to the extent that any
such loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company or Standard by any Underwriter through
Xxxxxxx, Sachs & Co. expressly for use therein.
(b) Each Underwriter will indemnify and hold harmless the Company or
Standard, as applicable, against any losses, claims, damages or liabilities to
which the Company or Standard may become subject, under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, the
Registration Statement or the Prospectus, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Preliminary Prospectus, the Registration
Statement or the Prospectus or any such amendment or supplement in reliance upon
and in conformity with written information furnished to the Company or Standard
by such Underwriter through Xxxxxxx, Xxxxx & Co. expressly for use therein; and
will reimburse the Company or Standard, as applicable, for any legal or other
expenses reasonably incurred by the Company or Standard in connection with
investigating or defending any such action or claim as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under subsection (a) or
(b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve it from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to such indemnified party (who shall not, except with the
consent of the indemnified party, be counsel to the indemnifying party), and,
after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party under such subsection for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the written
consent of the
-23-
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party to such
action or claim) unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability arising out of
such action 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) If the indemnification provided for in this Section 8 is unavailable to
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above in respect of any losses, claims, damages or liabilities (or actions
in respect thereof) referred to therein, then each indemnifying party shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and Standard on the one hand and the Underwriters on the other
from the offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c) above,
then each indemnifying party shall contribute to such amount paid or payable by
such indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company and Standard
on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative benefits received by the Company and
Standard on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering of the Shares
purchased under this Agreement (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by the
Underwriters with respect to the Shares purchased under this Agreement, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company or Standard on the one hand or the Underwriters on the other and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Company, Standard and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this subsection (d) were determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to above in this subsection (d) shall be
deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any such action
or claim. Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
-24-
(e) The obligations of the Company and Standard under this Section 8 shall
be in addition to any liability which the Company and Standard may otherwise
have and shall extend, upon the same terms and conditions, to each person, if
any, who controls any Underwriter within the meaning of the Act; and the
obligations of the Underwriters under this Section 8 shall be in addition to any
liability which the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the Company
or Standard (including any person who, with his or her consent, is named in the
Registration Statement as a nominee to become a director of the Company) and to
each person, if any, who controls the Company or Standard within the meaning of
the Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Shares which it has agreed to purchase hereunder at a Time of Delivery, you
may in your discretion arrange for you or another party or other parties to
purchase such Shares on the terms contained herein. If within thirty-six hours
after such default by any Underwriter you do not arrange for the purchase of
such Shares, then the Company shall be entitled to a further period of thirty-
six hours within which to procure another party or other parties satisfactory to
you to purchase such Shares on such terms. In the event that, within the
respective prescribed periods, you notify the Company that you have so arranged
for the purchase of such Shares, or the Company notifies you that it has so
arranged for the purchase of such Shares, you or the Company shall have the
right to postpone such Time of Delivery for a period of not more than seven
days, in order to effect whatever changes may thereby be made necessary in the
Registration Statement or the Prospectus, or in any other documents or
arrangements, and the Company agrees to file promptly any amendments to the
Registration Statement or the Prospectus which in your opinion may thereby be
made necessary. The term "Underwriter" as used in this Agreement shall include
any person substituted under this Section with like effect as if such person had
originally been a party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh of the aggregate number of all
the Shares to be purchased at such Time of Delivery, then the Company shall have
the right to require each non-defaulting Underwriter to purchase the number of
Shares which such Underwriter agreed to purchase hereunder at such Time of
Delivery and, in addition, to require each non-defaulting Underwriter to
purchase its pro rata share (based on the number of Shares which such
Underwriter agreed to purchase hereunder) of the Shares of such defaulting
Underwriter or Underwriters for which such arrangements have not been made; but
nothing herein shall relieve a defaulting Underwriter from liability for its
default.
(c) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you and the Company as
provided in subsection (a) above, the aggregate number of such Shares which
remains unpurchased exceeds one-eleventh of the aggregate number of all the
Shares to be purchased at such Time of Delivery, or if the Company shall not
exercise the right described in subsection (b) above to require non-defaulting
Underwriters to purchase Shares of a defaulting Underwriter or Underwriters,
then this Agreement (or, with respect to the Second Time of Delivery, the
obligations of the Underwriters to purchase and of the Company to sell the
Optional Shares) shall thereupon terminate, without liability on the part of any
non-defaulting Underwriter or the Company, except for the expenses to be borne
by the Company and Standard, and the Underwriters as provided in Section 6
hereof and the indemnity
-25-
and contribution agreements in Section 8 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company and Standard, and the several Underwriters,
as set forth in this Agreement or made by or on behalf of them, respectively,
pursuant to this Agreement, shall remain in full force and effect, regardless of
any investigation (or any statement as to the results thereof) made by or on
behalf of any Underwriter or any controlling person of any Underwriter, or the
Company, Standard or any officer or director or controlling person of the
Company or Standard, and shall survive delivery of and payment for the Shares.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company nor Standard shall then be under any liability to any
Underwriter except as provided in Sections 6 and 8 hereof; but, if for any other
reason, any Shares are not delivered by or on behalf of the Company as provided
herein, the Company and Standard, jointly and severally, will reimburse the
Underwriters through you for all out-of-pocket expenses approved in writing by
you, including fees and disbursements of counsel, reasonably incurred by the
Underwriters in making preparations for the purchase, sale and delivery of the
Shares not so delivered, but the Company and Standard shall then be under no
further liability to any Underwriter in respect of the Shares not so delivered
except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you jointly or by Xxxxxxx, Xxxxx & Co. on behalf of you as the
representatives.
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives in care of Xxxxxxx, Sachs &
Co., 00 Xxx Xxxx, 0/xx/ Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Registration
Department; and if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: Secretary; provided, however, that any notice
to an Underwriter pursuant to Section 8(c) hereof shall be delivered or sent by
mail, telex or facsimile transmission to such Underwriter at its address set
forth in its Underwriters' Questionnaire, or telex constituting such
Questionnaire, which address will be supplied to the Company by you upon
request. Any such statements, requests, notices or agreements shall take effect
upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Company and Standard and, to the extent provided in
Sections 8 and 10 hereof, the officers and directors of the Company and Standard
and each person who controls the Company, Standard (including any person who,
with his consent is named in the Registration Statement as a nominee to become a
director of the Company) or any Underwriter, and their respective heirs,
executors, administrators, successors and assigns, and no other person shall
acquire or have any right under or by virtue of this Agreement. No purchaser of
any of the Shares from any Underwriter shall be deemed a successor or assign by
reason merely of such purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
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15. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the same
instrument.
If the foregoing is in accordance with your understanding, please sign and
return to us __ counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters, the Company and
Standard. It is understood that your acceptance of this letter on behalf of
each of the Underwriters is pursuant to the authority set forth in a form of
Agreement among Underwriters (U.S. Version), the form of which shall be
submitted to the Company and Standard for examination upon request, but without
warranty on your part as to the authority of the signers thereof.
Very truly yours,
STANCORP FINANCIAL GROUP, INC.
By:____________________________________
Name:
Title:
STANDARD INSURANCE COMPANY
By:____________________________________
Name:
Title:
Accepted as of the date hereof:
Xxxxxxx, Xxxxx & Co.
Name(s) of Co-Representative(s)
By:___________________________
(Xxxxxxx, Sachs & Co.)
On behalf of each of the Underwriters
-27-
SCHEDULE I
Total Number of Total Number of
Firm Shares Firm Shares
Underwriter to be Purchased to be Purchased
----------- --------------- ---------------
Xxxxxxx, Xxxxx & Co. .................
[Name(s) of Co-Representative(s)(2)] .
[Names of other Underwriters] ........
---------------- ---------------
Total. .....................
================ ===============
ANNEX I
Pursuant to Section 7(f) of the Underwriting Agreement, the accountants
shall furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and Standard and their respective subsidiaries within the
meaning of the Act and the applicable rules and regulations adopted by the
Commission;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, financial
forecasts and/or pro forma financial information) examined by them and
included in the Prospectus or the Registration Statement comply as to form
in all material respects with the applicable accounting requirements of the
Act and the related rules and regulations adopted by the Commission; and,
if applicable, they have made an examination or a review in accordance with
standards established by the American Institute of Certified Public
Accountants of the unaudited consolidated interim financial statements,
selected financial data, pro forma financial information, financial
forecasts, management's discussion and analysis and/or condensed financial
statements derived from audited financial statements of the Company and
Standard for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been separately furnished to the
representatives of the Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the unaudited condensed consolidated statements of income, consolidated
balance sheets and consolidated statements of cash flows included in the
Prospectus as indicated in their reports thereon copies of which have been
separately furnished to the Representatives and on the basis of specified
procedures including inquiries of officials of the Company and Standard who
have responsibility for financial and accounting matters regarding whether
the unaudited condensed consolidated financial statements referred to in
paragraph (vi)(A)(i) below comply as to form in all material respects with
the applicable accounting requirements of the Act and the related rules and
regulations adopted by the Commission, nothing came to their attention that
cause them to believe that the unaudited condensed consolidated financial
statements do not comply as to form in all material respects with the
applicable accounting requirements of the Act and the related rules and
regulations adopted by the Commission;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of Standard for
the five most recent fiscal years included in the Prospectus agrees with
the corresponding amounts (after restatements where applicable) in the
audited consolidated financial statements of Standard for such five fiscal
years;
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited
I-1
procedures specified in such letter nothing came to their attention as a
result of the foregoing procedures that caused them to believe that this
information does not conform in all material respects with the disclosure
requirements of Items 301, 302, 402 and 503(d), respectively, of Regulation
S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and Standard and their respective
subsidiaries, inspection of the minute books of the Company and Standard
and their respective subsidiaries since the date of the latest audited
financial statements included in the Prospectus, inquiries of officials of
the Company and Standard and their respective subsidiaries responsible for
financial and accounting matters and such other inquiries and procedures as
may be specified in such letter, nothing came to their attention that
caused them to believe that:
(A) (i) the unaudited consolidated statements of income,
consolidated balance sheets and consolidated statements of cash flows
included in the Prospectus do not comply as to form in all material
respects with the applicable accounting requirements of the Act and
the related rules and regulations adopted by the Commission, or (ii)
any material modifications should be made to the unaudited condensed
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus for
them to be in conformity with generally accepted accounting
principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included in the Prospectus;
(C) the unaudited financial statements which were not included in
the Prospectus but from which were derived any unaudited condensed
financial statements referred to in Clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
consolidated financial statements included in the Prospectus;
(D) any unaudited pro forma consolidated condensed financial
statements included in the Prospectus do not comply as to form in all
material respects with the applicable accounting requirements of the
Act and the rules and regulations adopted by the Commission or the pro
forma adjustments have not been properly applied to the historical
amounts in the compilation of those statements;
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(E) as of a specified date not more than five days prior to the
date of such letter, there have been any increase in the consolidated
short-term or long-term debt or liability for future policyholder
benefits and claims of Standard and its subsidiaries, or any decreases
in consolidated net current assets or equity or other items specified
by the Representatives, or any increases in any items specified by the
Representatives, in each case as compared with amounts shown in the
latest balance sheet included in the Prospectus, except in each case
for changes, increases or decreases which the Prospectus discloses
have occurred or may occur or which are described in such letter; and
(F) for the period from the date of the latest financial
statements included in the Prospectus to the specified date referred
to in Clause (E) there were any decreases in consolidated net
revenues, net premiums, net investment income or income before Federal
income taxes and extraordinary items or the total or per share amounts
of consolidated net income or other items specified by the
Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
decreases or increases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included in the Prospectus and the limited procedures, inspection of minute
books, inquiries and other procedures referred to in paragraphs (iii) and
(vi) above, they have carried out certain specified procedures, not
constituting an examination in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives, which are derived from the
general accounting records of Standard and its subsidiaries, which appear
in the Prospectus, or in Part II of, or in exhibits and schedules to, the
Registration Statement specified by the Representatives, and have compared
certain of such amounts, percentages and financial information with the
accounting records of Standard and its subsidiaries and have found them to
be in agreement.
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