[Draft--01/26/00]
EXHIBIT 1.1
[102,000,000] Shares
Xxxx Xxxxxxx Financial Services, Inc.
COMMON STOCK, $.01 par value
UNDERWRITING AGREEMENT
January __, 2000
January __, 2000
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated
Xxxxxxx Xxxxx Barney Inc.
Credit Suisse First Boston Corporation
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation
Xxx-Xxxx, Xxxxxx Inc.
Xxxxxxx, Xxxxx & Co.
c/o Morgan Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxxx & Co. International Limited
Xxxxxxx Xxxxx International
Salomon Brothers International Limited
Credit Suisse First Boston (Europe) Limited
Xxxxxxxxx, Xxxxxx & Xxxxxxxx International
Xxxxxxx Sachs International Ltd.
Xxx-Xxxx, Xxxxxx, Inc.
x/x Xxxxxx Xxxxxxx & Xx. Xxxxxxxxxxxxx Limited
00 Xxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxxx X00 0XX
England
Dear Sirs and Mesdames:
Xxxx Xxxxxxx Financial Services, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the several Underwriters (as defined
below)[102,000,000] shares of its common stock, $.01 par value (the "Firm
Shares").
It is understood that, subject to the conditions hereinafter stated,
[86,700,000] Firm Shares (the "U.S. Firm Shares") will be sold to the several
U.S. Underwriters named in Schedule I hereto (the "U.S. Underwriters") in
connection with the offering and sale of such U.S. Firm Shares in the United
States and Canada to United States and Canadian
Persons (as such terms are defined in the Agreement Between U.S. and
International Underwriters of even date herewith), and [15,300,000] Firm Shares
(the "International Shares") will be sold to the several International
Underwriters named in Schedule II hereto (the "International Underwriters") in
connection with the offering and sale of such International Shares outside the
United States and Canada to persons other than United States and Canadian
Persons. Xxxxxx Xxxxxxx & Co. Incorporated, Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx Incorporated, Xxxxxxx Xxxxx Barney Inc., Credit Suisse First Boston
Corporation, Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, Xxx-Xxxx,
Xxxxxx Inc. and Xxxxxxx, Xxxxx & Co. shall act as representatives (the "U.S.
Representatives") of the several U.S. Underwriters, and Xxxxxx Xxxxxxx & Co.
International Limited, Xxxxxxx Xxxxx International, Salomon Brothers
International Limited, Credit Suisse First Boston (Europe) Limited, Xxxxxxxxx,
Xxxxxx & Xxxxxxxx International, Xxxxxxx Sachs International Ltd. and Xxx-Xxxx,
Xxxxxx, Inc. shall act as representatives (the "International Representatives")
of the several International Underwriters. Xxxxxx Xxxxxxx & Co. Incorporated
will act as lead manager and sole book-running manager, and Xxxxxxx Lynch,
Pierce, Xxxxxx & Xxxxx Incorporated and Xxxxxxx Xxxxx Barney Inc. will act as
co-lead managers. The U.S. Underwriters and the International Underwriters are
hereinafter collectively referred to as the Underwriters.
The Company also proposes to issue and sell to the several U.S.
Underwriters not more than an additional [15,300,000] shares of its common
stock, par value $.01 per share (the "Additional Shares"), if and to the extent
that the U.S. Representatives shall have determined to exercise, on behalf of
the U.S. Underwriters, the right to purchase such shares of common stock granted
to the U.S. Underwriters in Section 2 hereof. The Firm Shares and the
Additional Shares are hereinafter collectively referred to as the "Shares". The
shares of common stock, par value $.01 per share, of the Company to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
referred to as the "Common Stock".
The Shares are being issued in connection with the reorganization (the
"Demutualization") of Xxxx Xxxxxxx Mutual Life Insurance Company, a
Massachusetts mutual life
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insurance company ("JHMLIC"), into a stock life insurance company pursuant to
JHMLIC's Plan of Reorganization, as adopted by the Board of Directors of JHMLIC
on August 31, 1999 (the "Plan"), in accordance with the requirements of Section
19E of Chapter 175 of the General Laws of the Commonwealth of Massachusetts
("Section 19E"). Upon consummation of the Demutualization, JHMLIC (renamed Xxxx
Xxxxxxx Life Insurance Company ("JHLIC")) will become a direct wholly owned
subsidiary of the Company. Pursuant to the Demutualization, the Company plans to
issue shares of stock (the "Policyholder Shares"); and the Policyholder Shares
and the Shares, collectively, the "Transaction Shares") or, in lieu thereof,
cash or Policy Credits (as defined in the Plan) to Eligible Policyholders (as
defined in the Plan) in exchange for the respective Policyholders' Membership
Interests (as defined in the Plan).
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement (File No. 333-87271) relating to the
Shares. The registration statement contains two prospectuses to be used in
connection with the offering and sale of the Shares: the U.S. prospectus, to be
used in connection with the offering and sale of Shares in the United States and
Canada to United States and Canadian Persons, and the international prospectus,
to be used in connection with the offering and sale of Shares outside the United
States and Canada to persons other than United States and Canadian Persons. The
international prospectus is identical to the U.S. prospectus except for the
outside front cover page. The registration statement as amended at the time it
becomes effective, including the information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Securities Act of 1933, as amended (the "Securities Act"), is hereinafter
referred to as the "Registration Statement"; the U.S. prospectus and the
international prospectus in the respective forms first used to confirm sales of
Shares are hereinafter collectively referred to as the "Prospectus". If the
Company has filed an abbreviated registration statement to register additional
shares of Common Stock pursuant to Rule 462(b) under the Securities Act (the
"Rule 462 Registration Statement"), then any reference herein to the term
"Registration Statement" shall be deemed to include such Rule 462 Registration
Statement.
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1. Representations and Warranties. The Company and JHMLIC, jointly
and severally, represent and warrant to and agree with each of the Underwriters
that:
(a) The Registration Statement has become effective; no stop order
suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending before or threatened by the
Commission.
(b) (i) The Registration Statement, when it became effective, did not
contain and, as amended or supplemented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, (ii) the Registration Statement and the Prospectus comply
and, as amended or supplemented, if applicable, will comply in all material
respects with the Securities Act and the applicable rules and regulations
of the Commission thereunder and (iii) the Prospectus does not contain and,
as amended or supplemented, if applicable, will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading, except that the representations and
warranties set forth in this paragraph do not apply to statements or
omissions in the Registration Statement or the Prospectus based upon
information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
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(c) The Company has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in each jurisdiction
in which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the failure
to be so qualified or be in good standing would not have a material adverse
effect on JHMLIC and its subsidiaries, including the Company prior to the
Demutualization, and the Company and its subsidiaries, including JHLIC upon
completion of the Demutualization, in each case taken as a whole
(collectively, the "Xxxx Xxxxxxx Enterprise").
(d) There are no subsidiaries that are material to the Xxxx Xxxxxxx
Enterprise which are not listed on Annex A hereto. Each of the
subsidiaries listed on Annex A hereto (the "Significant Subsidiaries"),
and, until immediately prior to the Effective Date (as defined in the
Plan), JHMLIC has been duly incorporated or organized, as the case may be,
is validly existing as a corporation or mutual life insurance company, as
the case may be, in good standing under the laws of the jurisdiction of its
incorporation or organization, as the case may be, and upon the Effective
Date, JHLIC will be duly organized and validly existing as a stock life
insurance company in good standing under the laws of the Commonwealth of
Massachusetts. Each Significant Subsidiary of the Company and JHMLIC has
the power, corporate and other, and authority to own its property and to
conduct its business as described in the Prospectus and is duly qualified
to transact business and is in good standing in each jurisdiction in which
the conduct of its business or its ownership or leasing of property
requires such qualification, except to the extent that the failure to be so
qualified or be in good standing would not have a material adverse effect
on the Xxxx Xxxxxxx Enterprise; all of the issued and outstanding shares of
capital stock of each Significant Subsidiary and of JHLIC have been duly
validly authorized and issued, are fully paid and non-
5
assessable and, in the percentages set forth on Annex A hereto, are owned
directly or indirectly by the Company, free and clear of all liens,
encumbrances, equitable claims or other adverse claims. Upon the
effectiveness of the Plan, JHLIC will have an authorized capitalization of
1,000 shares, each of which will be duly and validly authorized and issued
to the Company on the Effective Date and fully paid and nonassessable.
(e) This Agreement has been duly authorized, executed and delivered
by the Company and by JHMLIC.
(f) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(g) The shares of Common Stock outstanding prior to the issuance of
the Shares have been duly authorized and are validly issued, fully paid and
non-assessable.
(h) The Shares to be issued and sold by the Company to the
Underwriters hereunder and the Policyholder Shares have been duly and
validly authorized; when the Shares are issued and delivered against
payment therefor as provided herein, and the Policyholder Shares are issued
and delivered to Eligible Members in exchange for their Membership
Interests pursuant to the Plan, the Transaction Shares will be duly and
validly issued and fully paid and non-assessable; and the issuance of the
Transaction Shares is not subject to any preemptive or other similar
rights.
(i) The execution and delivery by the Company and JHMLIC of, and the
performance by the Company and JHMLIC of their respective obligations
under, this Agreement will not contravene any provision of applicable law
or the certificate of incorporation or by-laws of the Company and JHMLIC or
any agreement or other instrument binding upon the Company, JHMLIC or any
of the Significant Subsidiaries that is material to the Xxxx Xxxxxxx
Enterprise, or any judgment, order or decree of any governmental body,
agency or court having jurisdiction over the Company, JHMLIC or any of the
6
Significant Subsidiaries, and no consent, approval, authorization or order
of, or qualification with, any governmental body or agency is required for
the performance by the Company or by JHMLIC of their respective obligations
under this Agreement, except such as have been obtained under the Federal
securities laws or state insurance laws or may be required by the
securities or Blue Sky laws of the various states or the securities laws of
any foreign country in connection with the offer and sale of the
Transaction Shares.
(j) The adoption by JHMLIC of, and the performance by the Company and
JHMLIC of their respective obligations under, the Plan will not contravene
any provision of applicable law or the certificate of incorporation or by-
laws of the Company and JHMLIC or any agreement or other instrument binding
upon the Company, JHMLIC or any of the Significant Subsidiaries that is
material to the Xxxx Xxxxxxx Enterprise, or any judgment, order or decree
of any governmental body, agency or court having jurisdiction over the
Company, JHMLIC or any of the Significant Subsidiaries that is material to
the Xxxx Xxxxxxx Enterprise, and no consent, approval, authorization or
order of, or qualification with, any governmental body or agency is
required for the performance by the Company or by JHMLIC of their
respective obligations under the Plan, except such as have been obtained
under state insurance laws and except where the failure to obtain such
consents, approvals, authorizations, orders or qualifications would not,
singly or in the aggregate, have a material adverse effect on the Xxxx
Xxxxxxx Enterprise.
(k) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Prospectus, (1) the Company,
JHMLIC and the Significant Subsidiaries have not incurred any material
liability or obligation, direct or contingent, nor entered into any
material transaction not in the ordinary course of business; (2) each of
the Company, JHMLIC and the Significant Subsidiaries has not purchased any
of its outstanding capital stock, nor declared, paid or otherwise made any
dividend or
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distribution of any kind on its capital stock other than ordinary and
customary dividends; and (3) there has not been any material change in (A)
the short-term debt or long-term debt of the Company, JHMLIC and their
respective subsidiaries considered as a whole or (B) the capital stock of
the Company, JHMLIC and the Significant Subsidiaries, except in each case
as described in the Prospectus and, in the case of long-term indebtedness,
the $__ million of indebtedness incurred in connection with the acquisition
of Aetna Canada.
(l) The Company, JHMLIC 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 them which is material
to, and used in the conduct of, the business of the Xxxx Xxxxxxx
Enterprise, in each case free and clear of all liens, encumbrances and
defects except such as are described in the Prospectus, leases entered into
in the ordinary course of business or such as do not materially affect the
value of such property and do not materially interfere with the use made
and proposed to be made of such property by the Company, JHMLIC and their
respective subsidiaries; and any real property and buildings that are
material to the business of the Xxxx Xxxxxxx Enterprise held under lease by
the Company, JHMLIC and their respective subsidiaries are held by them
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, JHMLIC and their respective
subsidiaries, in each case except as described in the Prospectus.
(m) The Company, JHMLIC and their respective subsidiaries own or
possess, or can acquire on reasonable terms, all patents, patent rights,
licenses, inventions, copyrights, know-how (including trade secrets and
other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), trademarks, service marks and trade
names currently employed by them in connection with the business now
operated by them, except where the failure to own, possess or have the
ability to acquire such
8
patents, patent rights, licenses, inventions, copyrights, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures),
trademarks, service marks and trade names would not, singly or in the
aggregate, have a material adverse effect on the Xxxx Xxxxxxx Enterprise,
and none of the Company, JHMLIC nor any of their respective subsidiaries
has received any notice of infringement of or conflict with asserted rights
of others with respect to any of the foregoing which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a material adverse affect on the Xxxx Xxxxxxx Enterprise.
(n) No material labor dispute with the employees of the Company,
JHMLIC or any of their respective subsidiaries exists, except as described
in the Prospectus, or, to the knowledge of the Company, is imminent.
(o) The Company, JHMLIC and each of their respective subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (1) transactions are executed in accordance with
management's general or specific authorizations; (2) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability; (3) access to assets is permitted only in accordance
with management's general or specific authorization; and (4) the recorded
accountability for assets is compared with the existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(p) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Xxxx Xxxxxxx Enterprise, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto subsequent
to the date of this Agreement).
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(q) There are no legal or governmental proceedings pending or, to the
best of the Company's and JHMLIC's knowledge, threatened to which the
Company, JHMLIC or any of their respective subsidiaries is a party or to
which any of the properties of the Company, JHMLIC or any of their
respective subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not described or filed as
required.
(r) Each of the preliminary prospectus dated January 7, 2000, and any
other preliminary prospectuses filed as part of any amendment to the
registration statement subsequent to January 7, 2000, or filed pursuant to
Rule 424 under the Securities Act, complied when so filed in all material
respects with the Securities Act and the applicable rules and regulations
of the Commission thereunder.
(s) None of the Company, JHMLIC or any of the Significant
Subsidiaries is required to, nor will it be required to after giving effect
to the offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, register as an "investment company"
as such term is defined in the Investment Company Act of 1940, as amended.
(t) The Company, JHMLIC and their respective subsidiaries (i) are in
compliance with any and all applicable foreign, federal, state and local
laws and regulations relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes, pollutants or
contaminants ("Environmental Laws"), (ii) have received all permits,
licenses or other approvals required of them under applicable Environmental
Laws to conduct their respective businesses and (iii) are in compliance
with all terms and conditions of any such permit, license or approval,
except where such noncompliance with Environmental Laws, failure to receive
required
10
permits, licenses or other approvals or failure to comply with the terms
and conditions of such permits, licenses or approvals would not, singly or
in the aggregate, have a material adverse effect on the Xxxx Xxxxxxx
Enterprise.
(u) Other than to register securities for issuance pursuant to the
Company's 1999 Long Term Stock Incentive Plan and any 401(k) employee stock
purchase plan on Form S-8, there are no contracts, agreements or
understandings between the Company and any person granting such person the
right to require the Company to file a registration statement under the
Securities Act with respect to any securities of the Company or to require
the Company to include such securities with the Shares registered pursuant
to the Registration Statement.
(v) The Company and JHMLIC have reviewed their operations and those
of the Significant Subsidiaries to evaluate the extent to which the
business or operations of the Company, JHMLIC or any of the Significant
Subsidiaries will be affected by the Year 2000 Problem (that is, any
significant risk that computer hardware or software applications used by
the Company, JHMLIC and the Significant Subsidiaries 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); as a result of such review, (i) the Company and
JHMLIC have no reason to believe, and do not believe, that (A) there are
any issues related to the Company's or to JHMLIC's preparedness to address
the Year 2000 Problem that are of a character required to be described or
referred to in the Registration Statement or Prospectus which have not been
accurately described in the Registration Statement or Prospectus and (B)
the Year 2000 Problem will have a material adverse effect on the Xxxx
Xxxxxxx Enterprise, or result in any material loss or interference with the
business or operations of the Xxxx Xxxxxxx Enterprise; and (ii) the Company
and JHMLIC reasonably believe, after due inquiry, that the suppliers,
vendors, customers or other material third parties used or served by the
Company, JHMLIC and their respective subsidiaries are
11
addressing or will address the Year 2000 Problem in a timely manner, except
to the extent that a failure to address the Year 2000 Problem by any
supplier, vendor, customer or material third party would not have a
material adverse effect on the Xxxx Xxxxxxx Enterprise.
(w) 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.
(x) In connection with the Demutualization, the Company has made all
required filings under applicable insurance holding company statutes, and
has received approvals of, or exemptions in respect of, acquisition of
control and/or affiliate transactions in each jurisdiction in which such
filings, approvals or exemptions are required, except where the failure to
have made such filings or receive such approvals or exemptions in any such
jurisdiction would not, singly or in the aggregate, have a material adverse
effect on the Xxxx Xxxxxxx Enterprise; each of the Company, JHMLIC and
their respective subsidiaries has all necessary consents, licenses,
authorizations, approvals, exemptions, 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
Xxxx Xxxxxxx Enterprise; all such Consents and Filings are in full force
and effect, the Company, JHMLIC and their respective subsidiaries are in
compliance with such Consents and neither the Company nor JHMLIC nor any of
their respective subsidiaries has received any notice of any 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
12
limitation on the conduct of the business of the Company, JHMLIC or any of
their respective subsidiaries, except as set forth in the Prospectus or any
such failure to be in full force and effect, failure to be in compliance
with, suspension, revocation or limitation which would not, singly or in
the aggregate, have a material adverse effect on the Xxxx Xxxxxxx
Enterprise; JHMLIC 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 the Xxxx Xxxxxxx Enterprise.
(y) The Plan has been duly adopted by the required vote of the Board
of Directors of JHMLIC (which adoption complied with the applicable
requirements of Section 19E) and submitted to the Commissioner of Insurance
of the Commonwealth of Massachusetts (the "Commissioner") in the manner and
accompanied by all information required by Section 19E and conforms in all
material respects to the requirements of the laws of the Commonwealth of
Massachusetts 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 Commissioner in respect thereof; on
November 17 and 18, 1999 the Commissioner held a public hearing in
accordance with the requirements of Section 19E, with regard to which
JHMLIC published such notice as is required by Massachusetts law, for the
purpose of receiving comment on whether the Plan should be approved; on
December 9, 1999 the Commissioner issued an order approving the Plan;
JHMLIC held a special meeting of policyholders on November 30, 1999; the
Plan was approved by Eligible Policyholders in accordance with Section 19E
and such approval has not been rescinded or otherwise withdrawn; no other
approvals are required to be obtained under Massachusetts 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 accordance with the Plan and Massachusetts law; and
prior to or contemporaneously with the Closing Date (as defined in
13
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
Commissioner's order or the Plan will have occurred or have been satisfied.
(z) 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 JHMLIC'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.
(aa) 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 Policyholders 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.
(bb) The Transaction Shares have been approved for listing on the New
York Stock Exchange, Inc. (the "Exchange"), subject to notice of issuance,
and, at the Closing Date and the Optional Closing Date (as defined in
Section 4) hereunder, the Transaction Shares issued at or prior to the time
of delivery on such closing date will be listed thereon.
2. Agreements to Sell and Purchase. The Company hereby agrees to
sell to the several Underwriters, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees, severally and not jointly, to purchase from the
Company the respective numbers of Firm Shares set forth in Schedules I and II
hereto opposite its names at U.S.$_________ a share ("Purchase Price").
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to sell
to the U.S. Underwriters the Additional Shares, and the U.S. Underwriters shall
have a one-time right to purchase, severally and not
14
jointly, up to [15,300,000] Additional Shares at the Purchase Price. If the U.S.
Representatives, on behalf of the U.S. Underwriters, elect to exercise such
option, the U.S. Representatives shall so notify the Company in writing not
later than [February 24, 2000] which notice shall specify the number of
Additional Shares to be purchased by the U.S. Underwriters and the date on which
such shares are to be purchased. Such date may be the same as the Closing Date
(as defined below) but not earlier than the Closing Date nor later than ten
business days after the date of such notice. Additional Shares may be purchased
as provided in Section 4 hereof solely for the purpose of covering over-
allotments made in connection with the offering of the Firm Shares. If any
Additional Shares are to be purchased, each U.S. Underwriter agrees, severally
and not jointly, to purchase the number of Additional Shares (subject to such
adjustments to eliminate fractional shares as the U.S. Representatives may
determine) that bears the same proportion to the total number of Additional
Shares to be purchased as the number of U.S. Firm Shares set forth in Schedule I
hereto opposite the name of such U.S. Underwriter bears to the total number of
U.S. Firm Shares.
Each of the Company and JHMLIC hereby agrees that, without the prior
written consent of Xxxxxx Xxxxxxx & Co. Incorporated on behalf of the
Underwriters, it will not, during the period ending 180 days after the date of
the Prospectus, (i) offer, pledge, sell, contract to sell, sell any option or
contract to purchase, purchase any option or contract to sell, grant any option,
right or warrant to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock or (ii) enter into any swap
or other arrangement that transfers to another, in whole or in part, any of the
economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise. The foregoing
sentence shall not apply to (A) the Shares to be sold hereunder, (B) the
issuance by the Company of shares of Common Stock upon the exercise of an option
or warrant or the conversion of a security outstanding on the date hereof of
which the Underwriters have been advised in writing, (C) the distribution of
Policyholder Shares to or for the
15
benefit of Eligible Members, (D) shares of Common Stock issued, purchased or
sold pursuant to (i) the Company's 1999 Long-Term Stock Incentive Plan or (ii)
any 401(k) employee stock purchase plan implemented by the Company and (E)
shares of Common Stock issued as consideration in mergers or acquisitions by the
Company; provided, however, that any recipient of such shares that is (1) an
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officer, (2) a director or (3) a holder (other than a holder described in
Section (b)(1)(ii) of Exchange Act Rule 13d-1) of ten percent of more of any
class of equity securities of the counterpart company in any such acquisition or
merger agrees in writing to be bound by the restrictions set forth in this
paragraph.
3. Terms of Public Offering. The Company and JHMLIC are advised by
you that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Company
and JHMLIC are further advised by you that the Shares are to be offered to the
public initially at U.S.$_____ a share (the "Public Offering Price") and to
certain dealers selected by you at a price that represents a concession not in
excess of U.S.$____ a share under the Public Offering Price, and that any
Underwriter may allow, and such dealers may reallow, a concession, not in excess
of U.S.$____ a share, to any Underwriter or to certain other dealers.
4. Payment and Delivery. Payment for the Firm Shares shall be made
to the Company in Federal or other funds immediately available in Boston,
Massachusetts, at the following account: [insert account information] against
delivery of such Firm Shares for the respective accounts of the several [U.S.]
Underwriters at 10:00 a.m., New York City time, on ____________, 2000, or at
such other time on the same or such other date, not later than _________, 2000,
as shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "Closing Date".
Payment for any Additional Shares shall be made to the Company in
Federal or other funds immediately available in Boston, Massachusetts, at the
following account: [insert account information] against delivery of such
Additional
16
Shares for the respective accounts of the several Underwriters at 10:00 a.m.,
New York City time, on the date specified in the notice described in Section 2
or at such other time on the same or on such other date, in any event not later
than [February 24], 2000, as shall be designated in writing by the U.S.
Representatives. The time and date of such payment are hereinafter referred to
as the "Option Closing Date".
Certificates for the Firm Shares and Additional Shares shall be in
definitive form and registered in such names and in such denominations as you
shall request in writing not later than one full business day prior to the
Closing Date or the Option Closing Date, as the case may be. The certificates
evidencing the Firm Shares and Additional Shares shall be delivered to you on
the Closing Date or the Option Closing Date, as the case may be, for the
respective accounts of the several Underwriters, with any transfer taxes payable
in connection with the transfer of the Shares to the Underwriters duly paid,
against payment of the Purchase Price therefor.
5. Conditions to the Underwriters' Obligations. The obligations of
the Company to sell the Shares to the Underwriters and the several obligations
of the Underwriters to purchase and pay for the Shares on the Closing Date are
subject to the condition that the Registration Statement shall have become
effective not later than [_______] (New York City time) on the date hereof.
17
The several obligations of the Underwriters are subject to the
following further conditions:
(a) Subsequent to the execution and delivery of this Agreement and
prior to the Closing Date:
(i) there shall not have occurred any downgrading, nor shall any
notice have been given of any intended or potential downgrading or of
any review for a possible change that does not indicate the direction
of the possible change, in the rating accorded any of the Company's or
JHMLIC's securities, financial strength or claims paying ability, as
the case may be, by A.M. Best Company, Inc., Xxxxx'x Investor
Services, Inc., Standard & Poor's Rating Group or Duff & Xxxxxx Inc.;
and
(ii) there shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, reserves, surplus, business or
operations of the Xxxx Xxxxxxx Enterprise, from that set forth in the
Prospectus (exclusive of any amendments or supplements thereto
subsequent to the date of this Agreement) that, in your judgment, is
material and adverse and that makes it, in your judgment,
impracticable to market the Shares on the terms and in the manner
contemplated in the Prospectus.
(b) The Underwriters shall have received on the Closing Date
certificates, dated the Closing Date and signed by an executive officer of
the Company or JHMLIC, as the case may be, to the effect set forth in
Section 5(a)(i) above and to the effect that the representations and
warranties of the Company and of JHMLIC, as the case may be, contained in
this Agreement are true and correct as of the Closing Date and that the
Company and JHMLIC, as the case may be, has complied with all of the
agreements and satisfied all of the conditions on its part to be performed
or satisfied hereunder on or before the Closing Date.
18
The officers signing and delivering such certificates may rely upon
the best of their knowledge as to proceedings threatened.
(c) The Underwriters shall have received on the Closing Date an
opinion of Debevoise & Xxxxxxxx, outside counsel for the Company, dated the
Closing Date, and containing such exceptions, qualifications and
limitations as are acceptable to such counsel and Cravath, Swaine & Xxxxx,
to the effect that:
(i) the Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of
Delaware, has the corporate power and authority to own its property
and to conduct its business as described in the Prospectus and is duly
qualified to transact business and is in good standing in the
Commonwealth of Massachusetts;
(ii) the authorized capital stock of the Company conforms in all
material respects as to legal matters to the description thereof
contained in the Prospectus;
(iii) the shares of Common Stock outstanding prior to the
issuance of the Shares have been duly authorized and are validly
issued, fully paid and non-assessable;
(iv) the Shares to be issued and sold by the Company to the
Underwriters hereunder, and the Policyholder Shares have been duly
authorized; when the Shares are issued and delivered against payment
therefor as provided herein, and the Policyholder Shares are issued
and delivered to Eligible Members in exchange for their Membership
Interests pursuant to the Plan, the Transaction Shares will be validly
issued and fully paid and non-assessable; and the issuance of the
Transaction Shares is not subject to any preemptive or, to such
counsel's knowledge, other similar rights;
19
(v) this Agreement has been duly authorized, executed and
delivered by the Company and by JHMLIC;
(vi) the execution and delivery by the Company and JHMLIC of,
and the performance by the Company and JHMLIC of their respective
obligations under, this Agreement will not violate any provision of
New York or Federal law or of the General Corporation Law of the State
of Delaware or the Restated Certificate of Incorporation or by-laws of
the Company or any agreement or other instrument filed as an exhibit
to the Registration Statement, or any judgment, order or decree known
to such counsel of any governmental body, agency or court having
jurisdiction over the Company, JHMLIC or any of their respective
subsidiaries, and no consent, approval, authorization or order of, or
qualification with, any United States, Delaware (but only to the
extent such would be required by the General Corporation Law of the
State of Delaware) or New York governmental body or agency is required
for the performance by the Company or by JHMLIC of their respective
obligations under this Agreement, except such as have been obtained
under the Federal securities laws and such as may be required by the
securities, insurance or Blue Sky laws of the various states or the
securities laws of any foreign country in connection with the offer
and sale of the Transaction Shares by the U.S. Underwriters;
(vii) the statements (A) in the Prospectus under the captions
"The Reorganization," "Regulation--Regulation Governing Potential
Acquisitions of Control," "Regulation--Regulation of Dividends and
Other Payments from Insurance Subsidiaries," "Regulation--Federal
Insurance Initiatives and Litigation," "Regulation--ERISA
Considerations," "Description of Capital Stock and Change of Control
Related Provisions of Our Plan of Reorganization, Restated Certificate
of Incorporation and By-laws, Insurance Holding Company Laws and Our
Stockholder Rights Plan" and "Underwriters" (with respect solely to
the
20
description of this Agreement contained therein) and (B) in the
Registration Statement in Item 14, in each case insofar as such
statements constitute summaries of the legal matters, documents or
proceedings referred to therein, fairly present the information called
for with respect to such legal matters, documents and proceedings and
fairly summarize the matters referred to therein;
(viii) such counsel does not know of any legal or governmental
proceedings pending or threatened to which the Company, JHMLIC or any
of their respective subsidiaries is a party or to which any of the
properties of the Company, JHMLIC or any of their respective
subsidiaries is subject that are required to be described in the
Registration Statement or the Prospectus and are not so described or
of any statutes, regulations, contracts or other documents that are
required to be described in the Registration Statement or the
Prospectus or to be filed as exhibits to the Registration Statement
that are not described or filed as required;
(ix) the Company is not required to, nor will it be required
to after giving effect to the offering and sale of the Shares and the
application of the proceeds thereof as described in the Prospectus,
register under the Investment Company Act of 1940, as amended, as an
"investment company" as such term is defined in the Investment Company
Act of 1940, as amended;
(x) such counsel is of the opinion that the Registration
Statement and Prospectus (except for financial statements and notes
thereto and schedules and other financial and statistical data
included therein as to which such counsel need not express any
opinion) comply as to form in all material respects with the
Securities Act and the applicable rules and regulations of the
Commission thereunder;
(xi) the offering, issuance and delivery of the Policyholder
Shares to Eligible Members in
21
Exchange for their Membership Interests pursuant to the Plan are
exempt from the registration requirements of the Securities Act;
(xii) in connection with the Demutualization, the Company and
JHMLIC have made all required filings under applicable insurance
holding company statutes, and have received approvals of, or
exemptions in respect 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
receive such approvals in any such jurisdiction would not, singly or
in the aggregate, have a material adverse effect on the Xxxx Xxxxxxx
Enterprise;
(xiii) other than as described or contemplated in the
Prospectus, to the knowledge of such counsel, 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; and
(xiv) the Transaction Shares have been approved for listing on
the Exchange, subject to notice of issuance, and, at the Closing Date
and the Optional Closing Date, the Transaction Shares issued at or
prior to the time of delivery on such closing date will be listed
thereon.
Such counsel shall also state that, although it has not itself checked
the accuracy and completeness of, or otherwise verified, and is not passing
upon and assumes no responsibility for the accuracy or completeness of, the
statements contained in the Registration Statement or the Prospectuses,
except to the limited extent stated in paragraph (vii) above, in the course
of its review and discussion of the contents of the Registration Statement
and the Prospectuses with certain officers and employees of the Company,
JHMLIC and their independent accountants, but without independent check or
verification, nothing has come to its attention which causes such counsel
to believe that
22
the Registration Statement (other than the financial statements and notes
thereto, other financial and statistical information and supporting
schedules contained therein or omitted therefrom, as to which such counsel
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 Prospectuses (other than the financial
statements and notes thereto, other financial and statistical information
and supporting schedules contained therein or omitted therefrom, as to
which such counsel need express no belief), as of their dates and as of the
date of its opinion, contain any untrue statement of a material fact or
omit to state a material fact necessary to make the statements contained
therein, in the light of the circumstances under which they were made, not
misleading.
(d) The Underwriters shall have received on the Closing Date an
opinion of Xxxxx X. Xxxxxx, Senior Vice President and Deputy, General
Counsel for the Company, dated the Closing Date, and containing such
exceptions, qualifications and limitations as are acceptable to such
counsel and Cravath, Swaine & Xxxxx, to the effect that:
(i) each Significant Subsidiary of the Company and, until
immediately prior to the Effective Date, JHMLIC has been duly
incorporated or organized, as the case may be, and is validly existing
as a corporation or mutual life insurance company, as the case may be,
in good standing under the laws of the jurisdiction of its
incorporation or organization, as the case may be; and each other
subsidiary of the Company and, until immediately prior to the
Effective Date, JHMLIC has been duly incorporated or organized, as the
case may be, and is validly existing as a corporation or mutual life
insurance company, as the case may be, in good standing under the laws
of the jurisdiction of its incorporation or organization, as the case
may be, except to the extent that the failure to be so incorporated,
23
organized or existing or in good standing would not, singly or in the
aggregate, have a material adverse effect on the Xxxx Xxxxxxx
Enterprise;
(ii) upon the Effective Date, JHLIC will be duly organized and
validly existing as a stock life insurance company, in good standing
under the laws of the Commonwealth of Massachusetts;
(iii) each subsidiary of the Company and JHMLIC has the power,
corporate and other, and authority to own its property and to conduct
its business as described in the Prospectus and is duly qualified to
transact business and is in good standing in each jurisdiction in
which the conduct of its business or its ownership or leasing of
property requires such qualification, except to the extent that the
failure to be so qualified or be in good standing would not, singly or
in the aggregate, have a material adverse effect on the Xxxx Xxxxxxx
Enterprise;
(iv) all of the issued and outstanding shares of capital stock
of each Significant Subsidiary of the Company have been duly and
validly authorized and issued, are fully paid and non-assessable and,
in the percentages set forth on Annex A hereto, are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims;
(v) each of the Company, JHMLIC 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 not,
singly or in the aggregate, have a material adverse effect on the Xxxx
Xxxxxxx Enterprise; all such Consents and Filings are in full force
and
24
effect, the Company, JHMLIC and their respective subsidiaries are in
compliance with such Consents and neither the Company nor JHMLIC nor
any of their respective subsidiaries has received any notice of any
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, JHMLIC or any such subsidiary, except as set
forth in the Prospectus or any such failure to be in full force and
effect, failure to be in compliance with, suspension, revocation or
limitation which would not, singly or in the aggregate, have a
material adverse effect on the Xxxx Xxxxxxx Enterprise; JHMLIC 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, singly or in the aggregate, have a
material adverse effect on the Xxxx Xxxxxxx Enterprise;
(vi) the adoption by JHMLIC of, and the performance by the
Company and JHMLIC of their respective obligations under, the Plan
will not contravene any provision of applicable law or the certificate
of incorporation or by-laws of the Company and JHMLIC, any agreement
or other instrument filed as an exhibit to the Registration Statement,
or, to such counsel's knowledge, any other agreement or instrument
binding upon the Company, JHMLIC or any of the Significant
Subsidiaries the contravention of which would, singly or in the
aggregate, have a material adverse effect on the Xxxx Xxxxxxx
Enterprise, or any judgment, order or decree known to such counsel of
any governmental body, agency or court having jurisdiction over the
Company, JHMLIC or any of their respective subsidiaries, and no
consent, approval, authorization or order of, or qualification with,
any governmental body or agency is required for the performance by the
Company or by JHMLIC of their respective obligations under the Plan,
except such as have been obtained under state insurance laws, and
except
25
where the failure to obtain such consents, approvals, authorizations,
orders or qualifications would not, singly or in the aggregate, have a
material adverse effect on the Xxxx Xxxxxxx Enterprise;
(vii) the execution and delivery by JHMLIC of, and the
performance by JHMLIC of its obligations under, this Agreement will
not violate any provision of Massachusetts law or the charter or by-
laws of JHMLIC;
(viii) in accordance with Massachusetts law, the Plan has been
duly adopted by the required vote of the Board of Directors of JHMLIC
and all necessary approvals for the Plan to become effective have been
duly obtained from Eligible Policyholders and the Commissioner, all
such approvals are in full force and effect and no other approvals are
required to be obtained under Massachusetts law for the effectiveness
of the Plan; and
(ix) none of JHMLIC or any of the Significant Subsidiaries is
required to, nor will it be required to after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, register under the Investment
Company Act of 1940, as amended, as an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(e) The Underwriters shall have received on the Closing Date an
opinion of Cravath, Swaine & Xxxxx, counsel for the Underwriters, dated the
Closing Date, covering the matters referred to in Sections 5(c)(iv) (but
only as to the Shares), 5(c)(v), 5(c)(vii) (but only as to the statements
in the Prospectus under "Description of Capital Stock" and "Underwriters")
and 5(c)(x) above.
Such counsel shall also state that it (i) has no reason to believe
that (except for financial statements and schedules and other financial and
statistical data
26
as to which such counsel need not express any belief) the Registration
Statement and the prospectus included therein at the time the Registration
Statement became effective contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (ii) has no
reason to believe that (except for financial statements and schedules and
other financial and statistical data as to which such counsel need not
express any belief) the Prospectus contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading.
With respect to Section 5(c)(xi) above and the statements described in
the immediately preceding paragraph and in the final paragraph of Section
5(c), Debevoise & Xxxxxxxx and Cravath, Swaine & Xxxxx may state that their
opinion and belief are based upon their participation in the preparation of
the Registration Statement and Prospectus and any amendments or supplements
thereto and review and discussion of the contents thereof, but are without
independent check or verification, except as specified.
The opinion of Debevoise & Xxxxxxxx described in Section 5(c) above
and the opinion of Xxxxx X. Xxxxxx, Senior Vice President and Deputy
General Counsel described in Section 5(d) above shall be rendered to the
Underwriters at the request of the Company and shall so state therein.
(f) The Underwriters shall have received, on each of the date hereof
and the Closing Date, a letter dated the date hereof or the Closing Date,
as the case may be, in form and substance satisfactory to the Underwriters,
from Ernst & Young LLP, independent public accountants, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus; provided that the letter
27
delivered on the Closing Date shall use a "cut-off date" not earlier than
the date hereof.
(g) The several obligations of the U.S. Underwriters to purchase
Additional Shares hereunder are subject to the delivery to the U.S.
Representatives on the Option Closing Date of such documents as they may
reasonably request with respect to the good standing of the Company and
JHMLIC, the due authorization and issuance of the Additional Shares and
other matters related to the issuance of the Additional Shares.
6. Covenants of the Company and of JHMLIC. In further consideration
of the agreements of the Underwriters herein contained, the Company and JHMLIC
covenant, jointly and severally, with each Underwriter as follows:
(a) To furnish to you, without charge, three signed copies of the
Registration Statement (including exhibits thereto) and for delivery to
each other Underwriter a conformed copy of the Registration Statement
(without exhibits thereto) and to furnish to you in New York City, without
charge, prior to 10:00 a.m. New York City time on the business day next
succeeding the date of this Agreement and during the period mentioned in
Section 6(c) below, as many copies of the Prospectus and any supplements
and amendments thereto or to the Registration Statement as you may
reasonably request.
(b) Before amending or supplementing the Registration Statement or
the Prospectus, to furnish to you a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to
which you reasonably object, and to file with the Commission within the
applicable period specified in Rule 424(b) under the Securities Act any
prospectus required to be filed pursuant to such Rule.
(c) If, during such period after the first date of the public
offering of the Shares as in the opinion of counsel for the Underwriters
the Prospectus is required by law to be delivered in connection with sales
by an Underwriter or dealer, any event shall occur or condition exist as a
result of which it is
28
necessary to amend or supplement the Prospectus in order to make the
statements therein, in the light of the circumstances when the Prospectus
is delivered to a purchaser, not misleading, or if, in the opinion of
counsel for the Underwriters, it is necessary to amend or supplement the
Prospectus to comply with applicable law, forthwith to prepare, file with
the Commission and furnish, at its own expense, to the Underwriters and to
the dealers (whose names and addresses you will furnish to the Company) to
which Shares may have been sold by you on behalf of the Underwriters and to
any other dealers upon request, either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be misleading or so that the
Prospectus, as amended or supplemented, will comply with law.
(d) To endeavor to qualify the Shares for offer and sale under the
securities or Blue Sky laws of such U.S. jurisdictions as you shall
reasonably request and under the laws that govern unregistered securities
offerings in Japan and Singapore.
(e) To make generally available to the Company's security holders and
to you as soon as practicable an earning statement covering the twelve-
month period ending _________________ that satisfies the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(f) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of its obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the
Company's and JHMLIC's counsel, the Company's and JHMLIC's accountants and
the Company's and JHMLIC's consulting actuary in connection with the
registration and delivery of the Shares under the Securities Act and all
other fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the
29
Prospectus and amendments and supplements to any of the foregoing,
including all printing costs associated therewith, and the mailing and
delivering of copies thereof to the Underwriters and dealers, in the
quantities hereinabove specified, (ii) all costs and expenses related to
the transfer and delivery of the Shares to the Underwriters, including any
transfer or other taxes payable thereon, (iii) the cost of printing or
producing any Blue Sky or Legal Investment memorandum in connection with
the offer and sale of the Shares under state securities laws and all
expenses in connection with the qualification of the Shares for offer and
sale under state securities laws as provided in Section 6(d) hereof,
including filing fees and the reasonable fees and disbursements of counsel
for the Underwriters in connection with such qualification and in
connection with the Blue Sky or Legal Investment memorandum, (iv) all
filing fees and the reasonable fees and disbursements of counsel to the
Underwriters incurred in connection with the review and qualification of
the offering of the Shares by the National Association of Securities
Dealers, Inc., (v) all fees and expenses in connection with the preparation
and filing of the registration statement on Form 8-A relating to the Common
Stock and all costs and expenses incident to listing the Shares on the
Exchange, (vi) the cost of printing certificates representing the Shares,
(vii) the costs and charges of any transfer agent, registrar or depositary,
(viii) the costs and expenses of the Company or JHMLIC relating to investor
presentations on any "road show" undertaken in connection with the
marketing of the offering of the Shares, including, without limitation,
expenses associated with the production of road show slides and graphics,
fees and expenses of any consultants engaged in connection with the road
show presentations with the prior approval of the Company or JHMLIC, travel
and lodging expenses of the representatives and officers of the Company and
any such consultants, and the cost of any aircraft chartered in connection
with the road show, (ix) all other costs and expenses incident to the
performance of the obligations of the Company or JHMLIC hereunder for which
provision is not otherwise made in this Section, and (x) all expenses of
the Company and JHMLIC in connection with any offer and sale of the
30
Shares outside of the United States and filing fees and the reasonable fees
and disbursements of counsel for the Underwriters in connection with offers
and sales outside of the United States. It is understood, however, that
except as provided in this Section, Section 7 entitled "Indemnity and
Contribution", and the last paragraph of Section 9 below, the Underwriters
will pay all of their costs and expenses, including fees and disbursements
of their counsel, stock transfer taxes payable on resale of any of the
Shares by them and any advertising expenses connected with any offers they
may make.
31
7. Indemnity and Contribution. (a) The Company and JHMLIC, jointly
and severally, agree to indemnify and hold harmless each Underwriter and each
person, if any, who controls any Underwriter within the meaning of either
Section 15 of the Securities Act or Section 20 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably incurred in connection with defending or investigating
any such action or claim) caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any
amendment thereof, any preliminary prospectus or the Prospectus (as amended or
supplemented if the Company or JHMLIC shall have furnished any amendments or
supplements thereto), or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any such untrue statement or omission or
alleged untrue statement or omission based upon information relating to any
Underwriter furnished to the Company or JHMLIC in writing by such Underwriter
through you expressly for use therein; provided, however, that the foregoing
-------- -------
indemnity agreement with respect to any preliminary prospectus shall not inure
to the benefit of any Underwriter from whom the person asserting any such
losses, claims, damages or liabilities purchased Shares, or any person
controlling such Underwriter, if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter to such
person, if required by law so to have been delivered, at or prior to the written
confirmation of the sale of the Shares to such person, and if the Prospectus (as
so amended or supplemented) would have cured the defect giving rise to such
losses, claims, damages or liabilities, unless such failure is the result of
noncompliance by the Company with Section 6(a) hereof.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company or JHMLIC, as applicable, and in the case of the
Company, its directors and officers who sign the Registration Statement and each
person, if any, who controls the Company or JHMLIC
32
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
and JHMLIC to such Underwriter, but only with reference to information relating
to such Underwriter furnished to the Company or JHMLIC in writing by such
Underwriter through you expressly for use in the Registration Statement, any
preliminary prospectus, the Prospectus or any amendments or supplements thereto.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to Section 7(a) or 7(b), such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Any firm retained
pursuant to the second immediately preceding sentence shall be designated in
writing by Xxxxxx Xxxxxxx & Co. Incorporated, in the case of parties indemnified
pursuant to Section 7(a), and by the Company, in the case of parties indemnified
pursuant to Section 7(b). The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written
33
consent, but if settled with such consent or if there be a final judgment for
the plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such settlement or judgment.
The foregoing sentence shall not expand the scope of the indemnification
provided in Section 7(a) or 7(b). No indemnifying party shall, without the prior
written consent of the indemnified party, effect any settlement of any pending
or threatened proceeding in respect of which any indemnified party is or could
have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) To the extent the indemnification provided for in Section 7(a) or
7(b) is unavailable to an indemnified party or insufficient in respect of any
losses, claims, damages or liabilities referred to in Section 7(a) or 7(b), then
each indemnifying party under such paragraph, in lieu of indemnifying such
indemnified party thereunder, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and JHMLIC on the one hand and the Underwriters
on the other hand from the offering of the Shares or (ii) if the allocation
provided by clause 7(d)(i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause 7(d)(i) above but also the relative fault of the Company and JHMLIC
on the one hand and of the Underwriters on the other hand in connection with the
statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company and JHMLIC on the one hand and the
Underwriters on the other hand in connection with the offering of the Shares
shall be deemed to be in the same respective proportions as the net proceeds
from the offering of the Shares (before deducting expenses) received by the
Company and the total underwriting discounts and commissions received by the
Underwriters, in each case as set forth in the table on the cover of the
Prospectus, bear to the aggregate Public
34
Offering Price of the Shares. The relative fault of the Company and JHMLIC on
the one hand and the Underwriters on the other hand 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 by the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Underwriters' respective
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective number of Shares they have purchased hereunder, and not joint.
(e) The Company, JHMLIC and the Underwriters agree that it would not
be just or equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in Section 7(d). The amount paid or
payable by an indemnified party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be deemed
to include, subject to the limitations set forth above, any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7, 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 that such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The remedies provided for in this Section 7 are not
exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
(f) The indemnity and contribution provisions contained in this
Section 7 and the representations,
35
warranties and other statements of the Company and JHMLIC contained in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter or by or on behalf
of the Company, its officers or directors or any person controlling the Company
and (iii) acceptance of and payment for any of the Shares.
8. Termination. This Agreement shall be subject to termination by
notice given by you to the Company, if (a) after the execution and delivery of
this Agreement and prior to the Closing Date (i) trading generally shall have
been suspended or materially limited on or by, as the case may be, either the
Exchange or the National Association of Securities Dealers, Inc., (ii) trading
of any securities of the Company shall have been suspended on any exchange or in
any over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or New York
State authorities or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis
that, in your judgment, is material and adverse and (b) in the case of any of
the events specified in clauses 8(a)(i) through 8(a)(iv), such event, singly or
together with any other such event, makes it, in your judgment, impracticable to
market the Shares on the terms and in the manner contemplated in the Prospectus.
9. Effectiveness; Defaulting Underwriters. This Agreement shall
become effective upon the execution and delivery hereof by the parties hereto.
If, on the Closing Date or the Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
that it has or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule I or Schedule
II bears to the aggregate number of Firm Shares set forth opposite the names
36
of all such non-defaulting Underwriters, or in such other proportions as you may
specify, to purchase the Shares which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the number of Shares that any Underwriter has agreed to
purchase pursuant to this Agreement be increased pursuant to this Section 9 by
an amount in excess of one-ninth of such number of Shares without the written
consent of such Underwriter. If, on the Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Firm Shares and the aggregate
number of Firm Shares with respect to which such default occurs is more than
one-tenth of the aggregate number of Firm Shares to be purchased, and
arrangements satisfactory to you and the Company for the purchase of such Firm
Shares are not made within 36 hours after such default, this Agreement shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company. In any such case either you or the Company shall have the right to
postpone the Closing Date, but in no event for longer than seven days, in order
that the required changes, if any, in the Registration Statement and in the
Prospectus or in any other documents or arrangements may be effected. If, on the
Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased, the non-defaulting Underwriters
shall have the option to (i) terminate their obligation hereunder to purchase
Additional Shares or (ii) purchase not less than the number of Additional Shares
that such non-defaulting Underwriters would have been obligated to purchase in
the absence of such default. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of the Company to comply
with the terms or to fulfill any of the conditions of this Agreement, or if for
any reason the Company shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or such Underwriters as
have so terminated this Agreement with respect to themselves, severally, for
37
all out-of-pocket expenses (including the fees and disbursements of their
counsel) reasonably incurred by such Underwriters in connection with this
Agreement or the offering contemplated hereunder.
10. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
11. Applicable Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.
12. Headings. The headings of the sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed a part
of this Agreement.
Very truly yours,
XXXX XXXXXXX FINANCIAL SERVICES, INC.
By:_______________________
Name:
Title:
XXXX XXXXXXX MUTUAL LIFE
INSURANCE COMPANY
By:_______________________
Name:
Title:
38
Accepted as of the date hereof
XXXXXX XXXXXXX & CO. INCORPORATED
XXXXXXX LYNCH, PIERCE, XXXXXX
& XXXXX INCORPORATED
XXXXXXX XXXXX BARNEY, INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
XXX-XXXX, XXXXXX INC.
XXXXXXX, XXXXX & CO.
Acting severally on behalf of themselves
and the several U.S. Underwriters
named in Schedule I hereto.
By: Xxxxxx Xxxxxxx & Co. Incorporated
By:___________________________
Name:
Title:
XXXXXX XXXXXXX & CO. INTERNATIONAL LIMITED
XXXXXXX XXXXX INTERNATIONAL
SALOMON BROTHERS INTERNATIONAL LIMITED
CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED
XXXXXXXXX, XXXXXX & XXXXXXXX INTERNATIONAL
XXXXXXX SACHS INTERNATIONAL LTD.
XXX-XXXX, XXXXXX, INC.
Acting severally on behalf of themselves
and the several International Underwriters
named in Schedule II hereto.
By: Xxxxxx Xxxxxxx & Co. International Limited
By: ____________________________
Name:
Title:
39
SCHEDULE I
U.S. UNDERWRITERS
Number of
Firm Shares
Underwriter To Be Purchased
------------------------------------------------------------------------
Xxxxxx Xxxxxxx & Co. Incorporated.............
------------------------------------------------------------------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated................................
------------------------------------------------------------------------
Xxxxxxx Xxxxx Barney, Inc.....................
------------------------------------------------------------------------
Credit Suisse First Boston Corporation........
------------------------------------------------------------------------
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation.................................
------------------------------------------------------------------------
Xxx-Xxxx, Xxxxxx Inc..........................
------------------------------------------------------------------------
Xxxxxxx, Xxxxx & Co............................
------------------------------------------------------------------------
_______________
Total U.S. Firm Shares ...................... [86,700,000]
===============
SCHEDULE II
INTERNATIONAL UNDERWRITERS
Number of
Firm Shares
Underwriter To Be Purchased
------------------------------------------------------------------------
Xxxxxx Xxxxxxx & Co. International Limited....
------------------------------------------------------------------------
Xxxxxxx Xxxxx International...................
------------------------------------------------------------------------
Salomon Brothers International Limited........
------------------------------------------------------------------------
Credit Suisse First Boston (Europe) Limited...
------------------------------------------------------------------------
Xxxxxxxxx, Xxxxxx & Xxxxxxxx International....
------------------------------------------------------------------------
Xxxxxxx, Sachs International Ltd..............
------------------------------------------------------------------------
Xxx-Xxxx, Xxxxxx, Inc.........................
------------------------------------------------------------------------
_______________
Total U.S. Firm Shares ...................... [15,300,000]
===============
ANNEX A
-----------------------------------------------------------------------------------------------
% of Equity
Significant Subsidiary owned by Company
-----------------------------------------------------------------------------------------------
1. Xxxx Xxxxxxx Variable Life Insurance Company
-----------------------------------------------------------------------------------------------
2. Investors Partner Life Insurance Company
-----------------------------------------------------------------------------------------------
3. The Maritime Life Assurance Company
-----------------------------------------------------------------------------------------------
4. Xxxx Xxxxxxx International Holdings, Inc.
-----------------------------------------------------------------------------------------------
5. The Berkeley Financial Group, Inc.
-----------------------------------------------------------------------------------------------
6. Independence Investment Associates, Inc.
-----------------------------------------------------------------------------------------------
7. Xxxx Xxxxxxx Real Estate Finance, Inc.
-----------------------------------------------------------------------------------------------
8. First Signature Bank & Trust Company
-----------------------------------------------------------------------------------------------
9. Xxxxxxx Natural Resource Group, Inc.
-----------------------------------------------------------------------------------------------
10. Xxxx Xxxxxxx Signature Services, Inc.
--------------------------------------------------------------------------------------------
