AMERICAN FINANCIAL GROUP, INC. (an Ohio corporation) Senior Notes PURCHASE AGREEMENT
EXHIBIT 1
Execution Version
AMERICAN FINANCIAL GROUP, INC.
(an Ohio corporation)
(an Ohio corporation)
Senior Notes
PURCHASE AGREEMENT
Dated June 10, 2009
AMERICAN FINANCIAL GROUP, INC.
(an Ohio corporation)
(an Ohio corporation)
$350,000,000
Senior Notes
PURCHASE AGREEMENT
June 10, 0000
Xxxx xx Xxxxxxx Securities LLC
X.X. Xxxxxx Securities Inc.
Wachovia Capital Markets, LLC
X.X. Xxxxxx Securities Inc.
Wachovia Capital Markets, LLC
As Representatives of the several Underwriters
c/o Banc of America Securities LLC
Xxx Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
c/o Banc of America Securities LLC
Xxx Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
American Financial Group, Inc., an Ohio corporation (the “Company”), confirms its agreement
with Banc of America Securities LLC (“Banc of America”), X.X. Xxxxxx Securities Inc. (“JPM”) and
Wachovia Capital Markets, LLC (“Wachovia”) and each of the other Underwriters named in Schedule A
hereto (collectively, the “Underwriters”, which term shall also include any underwriter substituted
as hereinafter provided in Section 10 hereof), for whom Banc of America, JPM and Wachovia are
acting as representatives (in such capacity, the “Representatives”), with respect to the issue and
sale by the Company and the purchase by the Underwriters, acting severally and not jointly, of the
respective principal amounts set forth in said Schedule A of $350,000,000 aggregate principal
amount of the Company’s 9.875% Senior Notes due 2019 (the “Securities”). The Securities are to be
issued pursuant to an indenture dated as of November 12, 1997 (the “Original Indenture”), as
supplemented by a supplemental indenture dated as of December 3, 1997 (the “First Supplemental
Indenture”), as further supplemented by a second supplemental indenture dated as of February 3,
2004 (the “Second Supplemental Indenture”), as further supplemented by a third supplemental
indenture to be dated as of June 17, 2009 (the “Third Supplemental Indenture” together with the
Original Indenture, the First Supplemental Indenture, and the Second Supplemental Indenture, the
“Indenture”) among the Company, as issuer, and U.S. Bank National Association, as trustee (the
“Trustee”).
The Company understands that the Underwriters propose to make a public offering of the
Securities as soon as the Representatives deem advisable after this Agreement has been executed and
delivered and the Indenture has been qualified under the Trust Indenture Act of 1939, as amended
(the “1939 Act”).
The Company has filed with the Securities and Exchange Commission (the “Commission”) an
automatic shelf registration statement on Form S-3 (No. 333-157649), including the related
preliminary prospectus or prospectuses, which registration statement became effective upon filing
under Rule 462(e)
of the rules and regulations of the Commission (the “1933 Act Regulations”) under the
Securities Act of 1933, as amended (the “1933 Act”). Such registration statement covers the
registration of the Securities under the 1933 Act. Promptly after execution and delivery of this
Agreement, the Company will prepare and file a prospectus in accordance with the provisions of Rule
430B (“Rule 430B”) of the 1933 Act Regulations and paragraph (b) of Rule 424 (“Rule 424(b)”) of the
1933 Act Regulations. Any information included in such prospectus that was omitted from such
registration statement at the time it became effective but that is deemed to be part of and
included in such registration statement pursuant to Rule 430B is referred to as “Rule 430B
Information.” Each prospectus, including any preliminary prospectus supplement, used in connection
with the offering of the Securities that omitted Rule 430B Information is herein collectively
called a “preliminary prospectus.” Such registration statement, at any given time, including the
amendments thereto to such time, the exhibits and any schedules thereto at such time and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act at
such time is herein called the “Registration Statement.” The Registration Statement at the time it
originally became effective is herein called the “Original Registration Statement.” The final
prospectus, as supplemented by any prospectus supplement, in the form first furnished to the
Underwriters for use in connection with the offering of the Securities, including the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933 Act at the time of
the execution of this Agreement, is herein collectively called the “Prospectus.” For purposes of
this Agreement, all references to the Registration Statement, any preliminary prospectus, any
prospectus supplement, the Prospectus or any amendment or supplement to any of the foregoing shall
be deemed to include the copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system (“XXXXX”).
The Company and the Underwriters agree that up to $6,500,000 aggregate principal amount of the
Securities to be purchased by the Underwriters (the “Directed Securities”) shall be reserved for
sale at the public offering price by the Underwriters to certain eligible directors and officers of
the Company, relatives of directors or officers or trusts for the benefit of any of the foregoing
(collectively, the “DNP Participants”), as part of the distribution of the Securities by the
Underwriters (the “Directed Note Program”) subject to the terms of this Agreement, the applicable
rules, regulations and interpretations of the Financial Industry Regulatory Authority (“FINRA”) and
all other applicable laws, rules and regulations. Banc of America shall be selected to process the
sales to the DNP Participants under the Directed Note Program. To the extent that such Directed
Securities are not orally confirmed for purchase by the DNP Participants by 9:00 A.M. New York City
time on the date one day following the date of this Agreement, such Directed Securities may be
offered to the public as set forth in the Registration Statement, the General Disclosure Package
and the Prospectus. The Company has supplied Banc of America with the names, addresses and
telephone numbers of the individuals or other entities that the Company has designated to be
participants in the Directed Note Program.
All references in this Agreement to financial statements and schedules and other information
which is “contained,” “included” or “stated” in the Registration Statement, any preliminary
prospectus or the Prospectus (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which is incorporated by
reference in or otherwise deemed by the 1933 Act Regulations to be a part of or included in the
Registration Statement, any preliminary prospectus or the Prospectus, as the case may be; and all
references in this Agreement to amendments or supplements to the Registration Statement, any
preliminary prospectus or the Prospectus shall be deemed to mean and include the filing of any
document under the Securities Exchange Act of 1934 (the “1934 Act”) which is incorporated by
reference in or otherwise deemed by the 1933 Act Regulations to be a part of or included in the
Registration Statement, such preliminary prospectus or the Prospectus, as the case may be.
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SECTION 1. Representations and Warranties.
(a) Representations and Warranties by the Company. The Company represents and
warrants to each Underwriter as of the date hereof, the Applicable Time referred to in Section
1(a)(ii) hereof and as of the Closing Time referred to in Section 2(b) hereof, and agrees with each
Underwriter, as follows:
(i) Status as a Well-Known Seasoned Issuer. (A) At the time of filing the
Original Registration Statement, (B) at the time of the most recent amendment thereto for
the purposes of complying with Section 10(a)(3) of the 1933 Act (whether such amendment was
by post-effective amendment, incorporated report filed pursuant to Section 13 or 15(d) of
the 1934 Act or form of prospectus), (C) at the time the Company or any person acting on its
behalf (within the meaning, for this clause only, of Rule 163(c) of the 1933 Act
Regulations) made any offer relating to the Securities in reliance on the exemption of Rule
163 of the 1933 Act Regulations and (D) at the date hereof, the Company was and is a
“well-known seasoned issuer” as defined in Rule 405 of the 1933 Act Regulations (“Rule
405”), including not having been and not being an “ineligible issuer” as defined in Rule
405. The Registration Statement is an “automatic shelf registration statement,” as defined
in Rule 405, and the Securities, since their registration on the Registration Statement,
have been and remain eligible for registration by the Company on a Rule 405 “automatic shelf
registration statement”. The Company has not received from the Commission any notice
pursuant to Rule 401(g)(2) of the 1933 Act Regulations objecting to the use of the automatic
shelf registration statement form.
At the time of filing the Original Registration Statement, at the earliest time
thereafter that the Company or another offering participant made a bona fide offer (within
the meaning of Rule 164(h)(2) of the 1933 Act Regulations) of the Securities and at the date
hereof, the Company was not and is not an “ineligible issuer,” as defined in Rule 405.
(ii) Registration Statement, Prospectus and Disclosure at Time of Sale. The
Original Registration Statement became effective upon filing under Rule 462(e) of the 1933
Act Regulations (“Rule 462(e)”) on March 3, 2009 and any post-effective amendment thereto
also became effective upon filing under Rule 462(e). No stop order suspending the
effectiveness of the Registration Statement or any post-effective amendment thereto has been
issued under the 1933 Act and no proceedings for that purpose have been instituted or are
pending or, to the knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been complied with.
No offer that constituted a written communication relating to the Securities was made
prior to the filing of the Original Registration Statement by the Company or any person
acting on its behalf (within the meaning, for this paragraph only, of Rule 163(c) of the
1933 Act Regulations).
At the respective times the Original Registration Statement and each amendment thereto
became effective, at each deemed effective date with respect to the Underwriters pursuant to
Rule 430B(f)(2) of the 1933 Act Regulations and at the Closing Time, the Registration
Statement and any amendments and supplements thereto complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the
1939 Act and the rules and regulations of the Commission under the 1939 Act (the “1939 Act
Regulations”), and did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make the
statements therein not misleading.
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Neither the Prospectus nor any amendments or supplements thereto, at the time the
Prospectus or any such amendment or supplement was issued and at the Closing Time, included
or will include an untrue statement of a material fact or omitted or will omit to state a
material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Each preliminary prospectus (including the prospectus or prospectuses filed as part of
the Original Registration Statement or any amendment thereto) complied when so filed in all
material respects with the 1933 Act Regulations and each preliminary prospectus and the
Prospectus delivered to the Underwriters for use in connection with this offering was
identical to the electronically transmitted copies thereof filed with the Commission
pursuant to XXXXX, except to the extent permitted by Regulation S-T.
As of the Applicable Time (as defined below), neither (x) the Issuer General Use Free
Writing Prospectus(es) (as defined below) issued at or prior to the Applicable Time and the
Statutory Prospectus (as defined below), all considered together (collectively, the “General
Disclosure Package”), nor (y) any individual Issuer Limited Use Free Writing Prospectus (as
defined below) or any “road show” (as defined in Rule 433 (as defined below)) not
constituting an Issuer Free Writing Prospectus (and the Company’s investor presentation
dated June 3, 2009), when considered together with the General Disclosure Package, included
any untrue statement of a material fact or omitted to state any material fact necessary in
order to make the statements therein, in the light of the circumstances under which they
were made, not misleading.
As of the time of the filing of the Final Term Sheet (as defined in Section 3(b)), the
General Disclosure Package will not include any untrue statement of a material fact nor will
it omit to state any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
As used in this subsection and elsewhere in this Agreement:
“Applicable Time” means 4:45 pm (Eastern time) on June 10, 2009 or such other time as
agreed by the Company and the Representatives.
“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined
in Rule 433 of the 1933 Act Regulations (“Rule 433”), relating to the Securities that (i) is
required to be filed with the Commission by the Company, (ii) is a “road show that is a
written communication” within the meaning of Rule 433(d)(8)(i), whether or not required to
be filed with the Commission or (iii) is exempt from filing with the Commission pursuant to
Rule 433(d)(5)(i) because it contains a description of the Securities or of the offering
that does not reflect the final terms, in each case in the form filed or required to be
filed with the Commission or, if not required to be filed, in the form retained in the
Company’s records pursuant to Rule 433(g).
“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is intended for general distribution to prospective investors, as evidenced by its
being specified in Schedule C hereto.
“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus
that is not an Issuer General Use Free Writing Prospectus.
“Statutory Prospectus” as of any time means the prospectus relating to the Securities
that is included in the Registration Statement immediately prior to that time, including any
document
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incorporated by reference therein and any preliminary prospectus or other prospectus
deemed to be a part thereof.
Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Securities or until any earlier
date that the issuer notified or notifies the Representatives as described in Section 3(e),
did not, does not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement or the Prospectus,
including any document incorporated by reference therein and any preliminary or other
prospectus deemed to be a part thereof that has not been superseded or modified.
The representations and warranties in this subsection shall not apply to statements in
or omissions from the Registration Statement, the Prospectus or any Issuer Free Writing
Prospectus made in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly for use therein.
(iii) Incorporated Documents. The documents incorporated or deemed to be
incorporated by reference in the Registration Statement, the General Disclosure Package, and
the Prospectus, when they became effective or at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects with the requirements
of the 1933 Act and the 1933 Act Regulations or the 1934 Act and the rules and regulations
of the Commission thereunder (the “1934 Act Regulations”), as applicable, and, when read
together with the other information in the Prospectus, (a) at the time the Original
Registration Statement became effective, (b) at the earlier of the time the Prospectus was
first used and the date and time of the first contract of sale of Securities in this
offering and (c) at the Closing Time, did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading.
(iv) Independent Accountants. The accountants who certified the financial
statements and supporting schedules included in the Registration Statement are independent
public accountants as required by the 1933 Act and the 1933 Act Regulations.
(v) Financial Statements. The financial statements included in the
Registration Statement, the General Disclosure Package and the Prospectus, together with the
related schedules and notes thereto, present fairly in all material respects the financial
position of the Company and its consolidated subsidiaries at the dates indicated and the
statement of earnings, shareholders’ equity and cash flows of the Company and its
consolidated subsidiaries for the periods specified; said financial statements have been
prepared in conformity with generally accepted accounting principles (“GAAP”) applied on a
consistent basis (except to the extent otherwise noted in such financial statements or the
notes thereto) throughout the periods involved. The supporting schedules, if any, included
in the Registration Statement present fairly in accordance with GAAP the information
required to be stated therein. The selected financial data and the summary financial
information, if any, included in the Prospectus present fairly the information shown therein
and have been compiled on a basis consistent with that of the audited financial statements
included in the Registration Statement. All disclosures contained in the Registration
Statement, the General Disclosure Package or the Prospectus regarding “non-GAAP financial
measures” (as such term is defined by the rules and regulations of the Commission) comply
with Regulation G under the 1934 Act and Item 10 of Regulation S-K of the 1933 Act
Regulations, to the extent applicable.
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(vi) No Material Adverse Change in Business. Since the respective dates as of
which information is given in the Registration Statement, the General Disclosure Package or
the Prospectus, except as otherwise stated therein, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one enterprise, whether
or not arising in the ordinary course of business (a “Material Adverse Effect”), (B) there
have been no transactions entered into by either of the Company or any of its subsidiaries,
other than those in the ordinary course of business, which are material with respect to the
Company and its subsidiaries considered as one enterprise, and (C) except as disclosed in or
contemplated by the General Disclosure Package and the Prospectus, there has been no
dividend or distribution of any kind declared, paid or made by the Company on any class of
its respective capital stock.
(vii) Good Standing of the Company. The Company has been duly incorporated and
is a validly existing corporation in good standing under the laws of the State of Ohio, and
has power and authority (corporate and other) to own its properties and conduct its business
as described in the General Disclosure Package and the Prospectus and to enter into and
perform its obligations under this Agreement; and the Company is duly qualified to do
business as a foreign corporation and is in good standing (or local law equivalent) in all
other jurisdictions in which its ownership or lease of property or the conduct of business
requires such qualification, except where such failure to qualify would not, individually or
in the aggregate, result in a Material Adverse Effect.
(viii) Good Standing of Subsidiaries. Each “significant subsidiary” of the
Company (as such term is defined in Rule 1-02 of Regulation S-X) (each a “Subsidiary” and,
collectively, the “Subsidiaries”) has been duly incorporated and is an existing corporation
in good standing (or local law equivalent) under the laws of the jurisdiction of its
incorporation, with power and authority (corporate and other) to own its properties and
conduct its business as described in the General Disclosure Package and the Prospectus and
is duly qualified to do business as a foreign corporation in good standing (or local law
equivalent) in all other jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification; except as otherwise disclosed in the
General Disclosure Package and the Prospectus, all of the issued and outstanding capital
stock of each such Subsidiary has been duly authorized and validly issued, is fully paid and
non-assessable and is owned by the Company, directly or through subsidiaries, free from
liens, encumbrances and defects; none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or other similar rights of any
securityholder of such Subsidiary. The only Subsidiaries of the Company are listed on
Schedule D hereto.
(ix) Capitalization. The authorized, issued and outstanding capital stock of
the Company is as set forth in the financial statements, including the schedules and notes
thereto, included in the General Disclosure Package and the Prospectus. The shares of issued
and outstanding capital stock of the Company have been duly authorized and validly issued
and are fully paid and non-assessable; none of the outstanding shares of capital stock of
the Company was issued in violation of the preemptive or other similar rights of any
securityholder of the Company.
(x) Authorization of Agreement. This Agreement has been duly authorized,
executed and delivered by the Company.
(xi) Authorization of the Indenture. The Indenture has been duly authorized,
executed and delivered by the Company and duly qualified under the 1939 Act and, assuming
due execution and delivery by the Trustee constitutes a valid and binding agreement of the
Company,
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enforceable against the Company in accordance with its terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors’ rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(xii) Authorization of the Securities. The Securities have been duly
authorized and, at the Closing Time, will have been duly executed by the Company and, when
authenticated, issued and delivered in the manner provided for in the Indenture and
delivered against payment of the purchase price therefor as provided in this Agreement, will
constitute valid and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of creditors’ rights
generally and except as enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a proceeding in equity or at law), and
will be in the form contemplated by, and entitled to the benefits of, the Indenture.
(xiii) Description of the Securities and the Indenture. The Securities and the
Indenture will conform in all material respects to the respective statements relating
thereto contained in the General Disclosure Package and the Prospectus and will be in
substantially the respective forms filed or incorporated by reference, as the case may be,
as exhibits to the Registration Statement.
(xiv) Absence of Defaults and Conflicts. Neither the Company nor any of its
Subsidiaries is in violation of its charter, regulations or by-laws or in default in the
performance or observance of any obligation, agreement, covenant or condition contained in
any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which the Company or any of its Subsidiaries is a party or
by which it or any of them may be bound, or to which any of the property or assets of the
Company or any of its Subsidiaries is subject (collectively, “Agreements and Instruments”)
except for such defaults under the Agreements and Instruments that would not result in a
Material Adverse Effect; and the execution, delivery and performance of this Agreement, the
Indenture and the Securities and any other agreement or instrument entered into or issued or
to be entered into or issued by the Company in connection with the consummation of the
transactions contemplated herein and in the Registration Statement (including the issuance
and sale of the Securities and the use of the proceeds from the sale of the Securities as
described in the Prospectus under the caption “Use of Proceeds”) and compliance by the
Company with its obligations hereunder and under the Indenture and the Securities and such
other agreements or instruments have been duly authorized by all necessary corporate action
and do not and will not, whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default or Repayment Event (as defined
below) under, or result in the creation or imposition of any lien, charge or encumbrance
upon any property or assets of the Company or any of its Subsidiaries pursuant to, the
Agreements and Instruments (except for such conflicts, breaches, defaults or Repayment
Events or liens, charges or encumbrances that, singly or in the aggregate, would not result
in a Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any of its Subsidiaries or any
applicable law, statute, rule, regulation, judgment, order, writ or decree of any
government, government instrumentality or court, domestic or foreign, having jurisdiction
over the Company or any of its Subsidiaries or any of their assets, properties or
operations. As used herein, a “Repayment Event” means any event or condition which gives
the holder of any note, debenture or other evidence of indebtedness (or
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any person acting on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the Company or any of
its Subsidiaries.
(xv) Absence of Labor Dispute. No labor dispute with the employees of either
of the Company or any of its Subsidiaries that might have a Material Adverse Effect exists
or, to the knowledge of the Company, is imminent.
(xvi) Absence of Proceedings. Except as disclosed in the General Disclosure
Package and the Prospectus, there are no pending, or to the Company’s knowledge,
contemplated, actions, suits or proceedings against or affecting the Company, or any of its
subsidiaries or any of their respective properties that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate have a Material
Adverse Effect, or would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement, the Indenture or the Securities, or which are
otherwise material in the context of the sale of the Securities.
(xvii) Accuracy of Exhibits. There are no contracts or documents which are
required to be described in the Registration Statement, the General Disclosure Package, the
Prospectus or the documents incorporated by reference therein or to be filed as exhibits
thereto which have not been so described and are or will be filed as required.
(xviii) Possession of Intellectual Property. The Company and its Subsidiaries
own, possess or can acquire on reasonable terms, adequate trademarks, trade names and other
rights to inventions, know-how, patents, copyrights, confidential information and other
intellectual property (collectively, “intellectual property rights”) necessary to conduct
the business now operated by them, or presently employed by them, and have not received any
notice of infringement of or conflict with asserted rights of others with respect to any
intellectual property rights that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material Adverse Effect.
(xix) Absence of Manipulation. Neither the Company nor any affiliate of the
Company has taken, nor will the Company or any affiliate take, directly or indirectly, any
action which is designed to or which has constituted or which would be expected to cause or
result in stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of the Securities.
(xx) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the performance by the Company
of its obligations hereunder, in connection with the offering, issuance or sale of the
Securities hereunder or the consummation of the transactions contemplated by this Agreement
or for the due execution, delivery or performance of the Indenture and the Securities by the
Company, except such as have been already obtained or as may be required under state
securities laws.
(xxi) Possession of Licenses and Permits. Each subsidiary of the Company which
is engaged in the business of insurance or reinsurance (collectively, the “Insurance
Subsidiaries”) holds such insurance licenses, certificates and permits from governmental
authorities (including, without limitation, from the insurance regulatory agencies of the
various jurisdictions where it conducts business (the “Insurance Licenses”)) as are
necessary to the conduct of its business as described in the Registration Statement; the
Company and each Insurance Subsidiary have fulfilled and performed all obligations necessary
to maintain the Insurance Licenses; except as
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disclosed in the General Disclosure Package and the Prospectus, there is no pending or,
to the knowledge of the Company, threatened action, suit, proceeding or investigation that
could reasonably be expected to result in the revocation, termination or suspension of any
Insurance License which would, individually or in the aggregate, have a Material Adverse
Effect; and except as disclosed in the General Disclosure Package and the Prospectus, no
insurance regulatory agency or body has issued, or, to the knowledge of the Company,
commenced any proceeding for the issuance of, any order or decree impairing, restricting or
prohibiting the payment of dividends by any Insurance Subsidiary to its parent.
(xxii) Title to Property. Except as disclosed in the General Disclosure
Package and the Prospectus, the Company and its Subsidiaries have good and marketable title
to all real properties and all other properties and assets owned by them, in each case free
from liens, encumbrances and defects that would individually or in the aggregate, materially
affect the value of such properties and assets, taken as a whole, or materially interfere
with the use made or to be made thereof by them; and except as disclosed in the General
Disclosure Package and the Prospectus, the Company and its Subsidiaries hold any leased real
or personal property under valid and enforceable leases with no exceptions that would
materially interfere with the use made or to be made of the leased property, taken as a
whole, by them.
(xxiii) Environmental Laws. Except as disclosed in the General Disclosure
Package and the Prospectus, neither the Company nor any of its subsidiaries is in violation
of any statute, any rule, regulation, decision or order of any governmental agency or body
or any court, domestic or foreign, relating to the use, disposal or release of hazardous or
toxic substances or relating to the protection or restoration of the environment or human
exposure to hazardous or toxic substances (collectively, “environmental laws”), owns or
operates any real property contaminated with any substance that is subject to any
environmental laws, is liable for any off-site disposal or contamination pursuant to any
environmental laws, or is subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or in the aggregate have a
Material Adverse Effect; and the Company is not aware of any pending investigation which
might lead to a violation, liability or claim which would individually or in the aggregate
result in a Material Adverse Effect.
(xxiv) Investment Company Act. The Company is not required, and upon the
issuance and sale of the Securities as herein contemplated and the application of the net
proceeds therefrom as described in the General Disclosure Package and the Prospectus will
not be required, to register as an “investment company” under the Investment Company Act of
1940, as amended (the “1940 Act”).
(xxv) Accounting Controls and Disclosure Controls. The Company and each of its
subsidiaries maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with management’s
general or specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with management’s general
or specific authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with respect to any
differences;
The Company has established and maintains and evaluates “disclosure controls and
procedures” (as such term is defined in Rule 13a-15 and 15d-15 under the 0000 Xxx) and
“internal control over financial reporting” (as such term is defined in Rule 13a-15 and
15d-15 under the 1934 Act); such disclosure controls and procedures are designed to ensure
that material
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information relating to the Company, including its consolidated subsidiaries, is made known
to the Company’s Co-Chief Executive Officers and its chief financial officer by others
within those entities, and such disclosure controls and procedures are effective to perform
the functions for which they were established; the Company’s independent auditors and the
Audit Committee of the Board of Directors of the Company have been advised of: (i) all
significant deficiencies, if any, in the design or operation of internal controls which
could adversely affect the Company’s ability to record, process, summarize and report
financial data; and (ii) all fraud, if any, whether or not material, that involves
management or other employees who have a role in the Company’s internal controls; all
material weaknesses, if any, in internal controls have been identified to the Company’s
independent auditors; since the date of the most recent evaluation of such disclosure
controls and procedures and internal controls, there have been no significant changes in
internal controls or in other factors that could significantly affect internal controls,
including any corrective actions with regard to significant deficiencies and material
weaknesses; the principal executive officers (or their equivalents) and principal financial
officers (or their equivalents) of the Company have made all certifications required by the
Xxxxxxxx-Xxxxx Act of 2002 (the “Xxxxxxxx-Xxxxx Act”) and any related rules and
regulations promulgated by the Commission, and the statements contained in each such
certification are complete and correct; the Company, the subsidiaries and the Company’s
directors and officers are each in compliance in all material respects with all applicable
effective provisions of the Xxxxxxxx-Xxxxx Act, including Section 402 related to loans and
Sections 302 and 906 related to certifications and the rules and regulations of the
Commission and the New York Stock Exchange promulgated thereunder.
(xxvi) Pending Procedures and Examinations. The Registration Statement is not
the subject of a pending proceeding or examination under Section 8(d) or 8(e) of the 1933
Act, and the Company is not the subject of a pending proceeding under Section 8A of the 1933
Act in connection with the offering of the Securities.
(xxvii) Insurance Reserving. Except as disclosed in the General Disclosure
Package and the Prospectus, the Company and the Insurance Subsidiaries have made no material
change in their insurance reserving practices since December 31, 2008.
(xxviii) Reinsurance. All reinsurance treaties and arrangements to which any
Insurance Subsidiary is a party are in full force and effect and no Insurance Subsidiary is
in violation of, or in default in the performance, observance or fulfillment of, any
obligation, agreement, covenant or condition contained therein; no Insurance Subsidiary has
received any notice from any of the other parties to such treaties, contracts or agreements
that such other party intends not to perform such treaty and, the Company and the Insurance
Subsidiaries have no reason to believe that any of the other parties to such treaties or
arrangements will be unable to perform such treaty or arrangement except to the extent
adequately and properly reserved for in the consolidated financial statements of the Company
included in the Registration Statement or the Prospectus, except where such default or
inability to perform would not, individually or in the aggregate, have a Material Adverse
Effect.
(xxix) Statutory Financial Statements. The statutory financial statements of
the Insurance Subsidiaries, from which certain ratios and other statistical data included or
incorporated by reference in the Registration Statement, the General Disclosure Package and
the Prospectus have been derived, have been prepared for each relevant period in conformity
with statutory accounting principles or practices required or permitted by the National
Association of Insurance Commissioners and by the appropriate Insurance Department of the
jurisdiction of domicile of each Insurance Subsidiary, and such statutory accounting
practices have been applied on a consistent basis throughout the periods involved, except as
may otherwise be indicated
10
therein or in the notes thereto, and present fairly in all material respects the
statutory financial position of the Insurance Subsidiaries as of the dates thereof, and the
statutory basis results of operations of the Insurance Subsidiaries for the periods covered
thereby.
(xxx) No Unlawful Payments. None of the Company, any of its subsidiaries or,
to the knowledge of the Company, any director, officer, agent, employee or affiliate of the
Company or any of its subsidiaries (i) has made any bribe, rebate, payoff, influence
payment, kickback or other unlawful payment or (ii) is aware of or has taken any action,
directly or indirectly, that would result in a violation by such persons of the Foreign
Corrupt Practices Act of 1977 (the “FCPA”), including, without limitation, making use of the
mails or any means or instrumentality of interstate commerce corruptly in furtherance of an
offer, payment, promise to pay or authorization of the payment of any money, or other
property, gift, promise to give, or authorization of the giving of anything of value to any
“foreign official” (as such term is defined in the FCPA) or any foreign political party or
official thereof or any candidate for foreign political office, in contravention of the
FCPA, and the Company, its subsidiaries and, to the knowledge of the Company, its affiliates
have conducted their businesses in compliance with the FCPA and have instituted and maintain
policies and procedures designed to ensure, and which are reasonably expected to continue to
ensure, continued compliance therewith.
(xxxi) Compliance with Money Laundering Laws. The operations of the Company
and its Subsidiaries are and have been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the
rules and regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency (collectively, the
“Money Laundering Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company or any of its
Subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge
of the Company, threatened.
(xxxii) Compliance with OFAC. None of the Company, any of its Subsidiaries or,
to the knowledge of the Company, any director, officer, agent, employee or Affiliate of the
Company or any of its Subsidiaries is currently subject to any U.S. sanctions administered
by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); and
the Company will not directly or indirectly use the proceeds of the offering of the
Securities hereunder, or lend, contribute or otherwise make available such proceeds to any
subsidiary, joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions administered by OFAC.
(b) Officer’s Certificates. Any certificate signed by any officer of the Company or any of
its subsidiaries delivered to the Representatives or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company to each Underwriter as to the matters covered
thereby.
SECTION 2. Sale and Delivery to Underwriters; Closing.
(a) Securities. On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to
purchase from the Company, at the price set forth in Schedule B, the aggregate principal amount of
Securities set forth in Schedule A opposite the name of such Underwriter, plus any additional
principal amount of Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section 10 hereof.
11
(b) Payment. Payment of the purchase price for, and delivery of certificates for, the
Securities shall be made at the offices of Sidley Austin llp, 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, or at such other place as shall be agreed upon by the Representatives and the
Company, at 9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof (unless postponed in accordance
with the provisions of Section 10), or such other time not later than ten business days after such
date as shall be agreed upon by the Representatives and the Company (such time and date of payment
and delivery being herein called “Closing Time”).
Payment shall be made to the Company by wire transfer of immediately available funds to a bank
account designated in writing by the Company, against delivery to the Representatives for the
respective accounts of the Underwriters of certificates for the Securities to be purchased by them.
It is understood that each Underwriter has authorized the Representatives, for its account, to
accept delivery of, receipt for, and make payment of the purchase price for, the Securities which
it has agreed to purchase. The Representatives, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase price for the
Securities to be purchased by any Underwriter whose funds have not been received by the Closing
Time, but such payment shall not relieve such Underwriter from its obligations hereunder.
(c) Denominations; Registration. The Securities shall be issued as a single Global Note (the
“Global Note”) registered in such name as the Representatives may request in writing at least one
full business day before the Closing Time. The Global Note will be made available for examination
by the Representatives in The City of New York not later than 10:00 A.M. (Eastern time) on the
business day prior to the Closing Time.
SECTION 3. Covenants of the Company. The Company covenants with each Underwriter as
follows:
(a) Compliance with Securities Regulations and Commission Requests; Payment of Filing Fees.
The Company, subject to Section 3(b), will comply with the requirements of Rule 430B and will
notify the Representatives immediately, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement or new registration statement relating to
the Securities shall become effective, or any supplement to the Prospectus or any amended
Prospectus relating to the Securities shall have been filed, (ii) of the receipt of any comments
from the Commission through the date that is one (1) year from the date of this Agreement, (iii) of
any request by the Commission for any amendment to the Registration Statement or the filing of a
new registration statement or any amendment or supplement to the Prospectus or any document
incorporated by reference therein or otherwise deemed to be a part thereof or for additional
information, (iv) of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or such new registration statement or of any order preventing or
suspending the use of any preliminary prospectus or the Prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of the initiation or
threatening of any proceedings for any of such purposes or of any examination pursuant to Section
8(e) of the 1933 Act concerning the Registration Statement and (v) if the Company becomes the
subject of a proceeding under Section 8A of the 1933 Act in connection with the offering of the
Securities. The Company will effect the filings required under Rule 424(b), in the manner and
within the time period required by Rule 424(b) (without reliance on Rule 424(b)(8)), and will take
such steps as it deems necessary to ascertain promptly whether the form of prospectus transmitted
for filing under Rule 424(b) was received for filing by the Commission and, in the event that it
was not, it will promptly file such prospectus. The Company will make every reasonable effort to
prevent the issuance of any stop, prevention or suspension order and, if any stop order is issued,
to obtain the lifting thereof at the earliest possible moment. The Company shall pay the required
Commission filing fees relating to the Securities
12
within the time required by Rule 456(b)(1)(i) of the 1933 Act Regulations without regard to
the proviso therein and otherwise in accordance with Rules 456(b) and 457(r) of the 1933 Act
Regulations (including, if applicable, by updating the “Calculation of Registration Fee” table in
accordance with Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration
Statement or on the cover page of a prospectus filed pursuant to Rule 424(b)).
(b) Filing of Amendments and Exchange Act Documents; Preparation of Final Term Sheet. The
Company will give the Representatives notice of its intention to file or prepare any amendment to
the Registration Statement or new registration statement relating to the Securities or any
amendment, supplement or revision to either any preliminary prospectus (including any prospectus
included in the Original Registration Statement or amendment thereto at the time it became
effective) or to the Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise, and
the Company will furnish the Representatives with copies of any such documents a reasonable amount
of time prior to such proposed filing or use, as the case may be, and will not file or use any such
document to which the Representatives or counsel for the Underwriters shall object. The Company
has given the Representatives notice of any filings made pursuant to the 1934 Act or 1934 Act
Regulations within 48 hours prior to the Applicable Time; the Company will give the Representatives
notice of its intention to make any such filing from the Applicable Time to the Closing Time and
will furnish the Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall object. The Company will prepare a final
term sheet (the “Final Term Sheet”) reflecting the final terms of the Securities, in form and
substance satisfactory to the Representatives, and shall file such Final Term Sheet as an “issuer
free writing prospectus” pursuant to Rule 433 prior to the close of two business days after the
date hereof; provided that the Company shall furnish the Representatives with copies of any such
Final Term Sheet a reasonable amount of time prior to such proposed filing and will not use or file
any such document to which the Representatives or counsel to the Underwriters shall object.
(c) Delivery of Registration Statements. The Company has furnished or will deliver to the
Representatives and counsel for the Underwriters, without charge, signed copies of the Original
Registration Statement and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to be incorporated by
reference therein or otherwise deemed to be a part thereof) and signed copies of all consents and
certificates of experts, and will also deliver to the Representatives, without charge, a conformed
copy of the Original Registration Statement and of each amendment thereto (without exhibits) for
each of the Underwriters. The copies of the Original Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to XXXXX, except to the extent permitted by Regulation
S-T.
(d) Delivery of Prospectuses. The Company has delivered to each Underwriter, without charge,
as many copies of each preliminary prospectus as such Underwriter reasonably requested, and the
Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the period when the Prospectus is
required to be delivered under the 1933 Act (or but for the exception afforded by Rule 172 of the
1933 Act Regulations would be required to be delivered), such number of copies of the Prospectus
(as amended or supplemented) as such Underwriter may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to XXXXX, except to
the extent permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply with the 1933 Act and
the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations and the 1939 Act and the 1939
Act Regulations so as to permit the completion of the distribution of the Securities as
contemplated
13
in this Agreement and in the Prospectus. If at any time when a prospectus is required by the
1933 Act to be delivered (or but for the exception afforded by Rule 172 of the 1933 Act Regulations
would be required to be delivered) in connection with sales of the Securities, any event shall
occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for
the Underwriters or for the Company, to amend the Registration Statement or amend or supplement the
Prospectus in order that the Prospectus will not include any untrue statements of a material fact
or omit to state a material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a purchaser, or if it
shall be necessary, in the opinion of such counsel, at any such time to amend the Registration
Statement or to file a new registration statement or amend or supplement the Prospectus in order to
comply with the requirements of the 1933 Act or the 1933 Act Regulations, the Company will promptly
prepare and file with the Commission, subject to Section 3(b), such amendment, supplement or new
registration statement as may be necessary to correct such statement or omission or to comply with
such requirements, the Company will use its best efforts to have such amendment or new registration
statement declared effective as soon as practicable (if it is not an automatic shelf registration
statement with respect to the Securities) and the Company will furnish to the Underwriters such
number of copies of such amendment, supplement or new registration statement as the Underwriters
may reasonably request. If at any time following the issuance of an Issuer Free Writing Prospectus
there occurred or occurs an event or development as a result of which such Issuer Free Writing
Prospectus conflicted or would conflict with the information contained in the Registration
Statement (or any other registration statement relating to the Securities) or the Statutory
Prospectus or any preliminary prospectus or included or would include an untrue statement of a
material fact or omitted or would omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances prevailing at that subsequent time, not
misleading, the Company will promptly notify the Representatives and will promptly amend or
supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such
conflict, untrue statement or omission.
(f) Blue Sky Qualifications. The Company will use its best efforts, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions as the Representatives may designate and to maintain such
qualifications in effect for a period of not less than one year from the date hereof; provided,
however, that the Company shall not be obligated to file any general consent to service of process
or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or so subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject. The Company will also supply the Underwriters
with such information as is necessary for the determination of the legality of the Securities for
investment under the laws of such jurisdictions as the Underwriters may request.
(g) Rule 158. The Company will timely file such reports pursuant to the 1934 Act as are
necessary in order to make generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide to the Underwriters the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Prospectus under “Use of Proceeds.”
(i) Restriction on Sale of Securities. During a period of 90 days from the date of the
Prospectus, the Company will not without the prior written consent of the Representatives, directly
or indirectly, issue, sell, offer or contract to sell, grant any option for the sale of, or
otherwise transfer or dispose of, any debt securities of the Company.
14
(j) Reporting Requirements. The Company, during the period when the Prospectus is required to
be delivered (or but for the exception afforded by Rule 172 of the 1933 Act Regulations would be
required to be delivered) under the 1933 Act, will file all documents required to be filed with the
Commission pursuant to the 1934 Act within the time periods required by the 1934 Act and the 1934
Act Regulations.
(k) Issuer Free Writing Prospectuses. The Company represents and agrees, unless it obtains
the prior consent of the Representatives, and each Underwriter represents and agrees that, unless
such Underwriter obtains the prior consent of the Company and the Representatives, it has not made
and will not make any offer relating to the Securities that would constitute an “issuer free
writing prospectus,” as defined in Rule 433, or that would otherwise constitute a “free writing
prospectus,” as defined in Rule 405, required to be filed with the Commission; provided, however,
that prior to the preparation of the Final Term Sheet in accordance with Section 3(b), the
Underwriters are authorized to use the information with respect to the final terms of the
Securities in communications conveying information relating to the offering to investors. Any such
free writing prospectus consented to by the Company and the Representatives is hereinafter referred
to as a “Permitted Free Writing Prospectus.” The Company represents that it has treated or agrees
that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,”
as defined in Rule 433, and has complied and will comply with the requirements of Rule 433
applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission
where required, legending and record keeping.
SECTION 4. Payment of Expenses.
(a) Expenses. The Company will pay all expenses incident to the performance of its
obligations under this Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as originally filed and of
each amendment thereto, (ii) the preparation, printing and delivery to the Underwriters of this
Agreement, any Agreement among Underwriters, the Indenture and such other documents as may be
required in connection with the offering, purchase, sale, issuance or delivery of the Securities,
(iii) the preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, (iv) the fees and disbursements of the Company’s counsel, accountants and other
advisors, (v) the qualification of the Securities under securities laws in accordance with the
provisions of Section 3(f) hereof, including filing fees and the reasonable fees and disbursements
of counsel for the Underwriters (not to exceed $25,000) in connection therewith and in connection
with the preparation of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Permitted Free Writing
Prospectus and of the Prospectus and any amendments or supplements thereto and any costs associated
with the electronic delivery of any of the foregoing by the Underwriters to investors, (vii) the
preparation, printing and delivery to the Underwriters of copies of the Blue Sky Survey and any
supplement thereto, (viii) the fees and expenses of the Trustee, including the fees and
disbursements of counsel for the Trustee in connection with the Indenture and the Securities, (ix)
the costs and expenses of the Company relating to investor presentations or any “road show”
undertaken in connection with the marketing of the Securities (including the Company’s investor
presentation dated June 3, 2009), 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, travel and lodging expenses of the representatives and
officers of the Company and any such consultants, and the cost of aircraft and other transportation
chartered in connection with the road show, (x) any fees payable in connection with the rating of
the Securities, (xi) all costs and expenses of the Underwriters, including the fees and
disbursements of counsel for the Underwriters and any stamp duties, similar taxes or duties or
other taxes incurred by the Underwriters, in connection with the Directed Note Program and (xii)
the costs and expenses (including without limitation any damages or other amounts payable in
connection with legal or
15
contractual liability) associated with the reforming of any contracts for sale of the
Securities made by the Underwriters caused by a breach of the representation contained in the sixth
paragraph of Section 1(a)(ii).
(b) Termination of Agreement. If this Agreement is terminated by the Representatives in
accordance with the provisions of Section 5 or Section 9(a)(i) hereof, the Company shall reimburse
the Underwriters for all of their reasonable out-of-pocket expenses, including the reasonable fees
and disbursements of counsel for the Underwriters.
SECTION 5. Conditions of Underwriters’ Obligations. The obligations of the several
Underwriters hereunder are subject to the accuracy of the representations and warranties of the
Company contained in Section 1 hereof or in certificates of any officer of the Company or any
subsidiary of the Company delivered pursuant to the provisions hereof, to the performance by the
Company of its covenants and other obligations hereunder, and to the following further conditions:
(a) Effectiveness of Registration Statement; Filing of Prospectus; Payment of Filing Fee. The
Registration Statement has become effective and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any request on the part of the
Commission for additional information shall have been complied with to the reasonable satisfaction
of counsel to the Underwriters. A prospectus containing the Rule 430B Information shall have been
filed with the Commission in the manner and within the time period required by Rule 424(b) without
reliance on Rule 424(b)(8) (or a post-effective amendment providing such information shall have
been filed and become effective in accordance with the requirements of Rule 430B). The Company
shall have paid the required Commission filing fees relating to the Securities within the time
period required by Rule 456(b)(1)(i) of the 1933 Act Regulations without regard to the proviso
therein and otherwise in accordance with Rules 456(b) and 457(r) of the 1933 Act Regulations and,
if applicable, shall have updated the “Calculation of Registration Fee” table in accordance with
Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration Statement or on the
cover page of a prospectus filed pursuant to Rule 424(b).
(b) Opinion of Counsel for the Company. At Closing Time, the Representatives shall have
received the favorable opinion, dated as of Closing Time, of Xxxxxxx Xxxxxxxx & Xxxxxxx PLL,
counsel for the Company, in form and substance satisfactory to counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the other Underwriters to the
effect set forth in Exhibit A hereto and to such further effect as counsel to the Underwriters may
reasonably request. Xxxxxxx Muething & Xxxxxxx PLL, in rendering such opinion, may rely as to all
matters governed by New York law upon the opinion of Sidley Austin llp referred to below.
(c) Opinion of Counsel for Underwriters. At Closing Time, the Representatives shall have
received the favorable opinion, dated as of Closing Time, of Sidley Austin llp, counsel
for the Underwriters, together with signed or reproduced copies of such letter for each of the
other Underwriters with respect to the matters set forth in clauses (vi) through (x) (for clause
(vi), solely as to enforceability and for clause (vii), solely as to enforceability and as to the
final clause thereof), inclusive, and the penultimate paragraph of Exhibit A hereto. Such counsel
may also state that, insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials. In rendering such opinion, Sidley Austin llp may rely
as to all matters governed by Ohio law upon the opinion of Xxxxxxx Xxxxxxxx & Xxxxxxx PLL referred
to above.
(d) Officers’ Certificate. At Closing Time, there shall not have been, since the date hereof
or since the respective dates as of which information is given in the Prospectus or the General
Disclosure Package, any material adverse change in the condition, financial or otherwise, or in the
earnings, business
16
affairs or business prospects of the Company and its subsidiaries considered as one enterprise
whether or not arising in the ordinary course of business, and the Representatives shall have
received a certificate (as to which there shall be no personal, as opposed to corporate liability)
of the President or a Vice President of the Company and of the chief financial or chief accounting
officer of the Company, dated as of Closing Time, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of Closing Time,
(iii) the Company has complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings for that purpose
have been instituted or are pending or, to their knowledge, contemplated by the Commission.
(e) Accountant’s Comfort Letter. At the time of the execution of this Agreement, the
Representatives shall have received from Ernst & Young LLP a letter dated such date, in form and
substance satisfactory to the Representatives, together with signed or reproduced copies of such
letter for each of the other Underwriters containing statements and information of the type
ordinarily included in accountants’ “comfort letters” to underwriters with respect to the financial
statements and certain financial information contained in the Registration Statement, the General
Disclosure Package and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representatives shall have received from
Ernst & Young LLP a letter, dated as of Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (e) of this Section, except that the
specified date referred to shall be a date not more than three business days prior to Closing Time.
(g) Maintenance of Rating. At Closing Time, the Securities shall be rated at least Baa2 by
Moody’s Investor’s Service Inc., BBB by Standard & Poor’s Ratings Group, a division of XxXxxx-Xxxx
Companies, Inc. and BBB+ by Fitch Ratings, and the Company shall have delivered to the
Representatives a letter dated the Closing Time, from each such rating agency, or other evidence
satisfactory to the Representatives, confirming that the Securities have such ratings; and since
the date of this Agreement, there shall not have occurred a downgrading in the (i) rating assigned
to the Securities or any other securities of the Company or the financial strength of the Company
or any Subsidiaries or any Insurance Subsidiary’s claims paying ability or similar rating by any
“nationally recognized statistical rating agency”, as that term is defined by the Commission for
purposes of Rule 436(g)(2) under the 1933 Act, or (ii) the financial strength or claims paying
ability of any Insurance Subsidiary by A.M. Best Company, and no such securities rating agency
shall have publicly announced that it has under surveillance or review, with possible negative
implications, its rating of the Securities or any other securities of the Company or the financial
strength or claims paying ability of any Subsidiary or Insurance Subsidiary.
(h) Additional Documents. At Closing Time, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and sale of the Securities as herein contemplated, or in
order to evidence the accuracy of any of the representations or warranties, or the fulfillment of
any of the conditions, herein contained; and all proceedings taken by the Company in connection
with the issuance and sale of the Securities as herein contemplated shall be reasonably
satisfactory in form and substance to the Representatives and counsel for the Underwriters.
(i) Termination of Agreement. If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated by the
Representatives by notice to the Company at any time at or prior to Closing Time and such
termination shall be without
17
liability of any party to any other party except as provided in Section 4 and except that
Sections 1, 6, 7, 8 and 13 shall survive any such termination and remain in full force and effect.
SECTION 6. Indemnification.
(a) Indemnification of Underwriters. The Company agrees to indemnify and hold harmless each
Underwriter, its affiliates, as such term is defined in Rule 501(b) under the 1933 Act (each, an
“Affiliate”), its selling agents and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, arising out of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), including Rule 430B
Information, or the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact contained in any
preliminary prospectus, any Issuer Free Writing Prospectus or any “road show” (as defined in
Rule 433) not constituting an Issuer Free Writing Prospectus (and the Company’s investor
presentation dated June 3, 2009) or the Prospectus (or any amendment or supplement thereto),
or the omission or alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company;
(iii) against any and all expense whatsoever, as incurred (including the reasonable
fees and disbursements of counsel chosen by the Representatives), reasonably incurred in
investigating, preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid under (i) or (ii)
above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the Representatives expressly for
use in the Registration Statement (or any amendment thereto), including the Rule 430B Information
or any preliminary prospectus, any Issuer Free Writing Prospectus or the Prospectus (or any
amendment or supplement thereto).
(b) Indemnification of Company, Directors and Officers. Each Underwriter severally agrees to
indemnify and hold harmless the Company, its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company within the meaning of
Section 15 of the 1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a) of this Section,
as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements
or omissions, made in the Registration Statement (or any amendment thereto), including the Rule
430B Information or any preliminary prospectus, any Issuer Free Writing Prospectus or the
Prospectus (or any amendment or
18
supplement thereto) in reliance upon and in conformity with written information furnished to
the Company by such Underwriter through the Representatives expressly for use therein.
(c) Actions against Parties; Notification. Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. In the case of parties
indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected by
the Representatives, and, in the case of parties indemnified pursuant to Section 6(b) above,
counsel to the indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any judgment with respect to
any litigation, or any investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever in respect of which indemnification or contribution could be
sought under this Section 6 or Section 7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature
contemplated by Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the aforesaid request,
(ii) such indemnifying party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii) such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the date of such
settlement.
(e) Indemnification for Directed Securities. In connection with the offer and sale of the
Directed Securities, the Company agrees, promptly upon a request in writing, to indemnify and hold
harmless each Underwriter its Affiliates, its selling agents and each person, if any, who controls
any Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act from
and against any and all losses, liabilities, claims, damages and expenses incurred by them as a
result of the failure of the DNP Participants to pay for and accept delivery of Directed Securities
which, by 9:00 A.M. New York City time on the date one day following the date of this Agreement,
were subject to a properly confirmed agreement to purchase. The Company agrees to indemnify and
hold harmless Banc of America, its directors, officers, employees and agents, and each person, if
any, who controls Banc of America within the meaning of the 1933 Act or the 1934 Act against any
loss, claim, damage, liability or expense, as incurred, to which Banc of America, or any such
director, officer, employee, agent or controlling person may become subject, which (i) is caused by
any untrue statement or alleged untrue statement of a material fact contained in any material
prepared by or with the consent of the Company for distribution to DNP Participants in connection
with the Directed Note Program or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
19
statements therein not misleading; (ii) is caused by the failure of any DNP Participant to pay
for and accept delivery of Directed Securities that such DNP Participant agreed to purchase; or
(iii) is related to, arising out of, or in connection with the Directed Note Program. The indemnity
agreement set forth in this paragraph shall be in addition to any liabilities that the Company may
otherwise have. Notwithstanding anything contained herein to the contrary, if indemnification may
be sought pursuant to this Section 6(e), then in addition to such separate counsel as may be
provided for the indemnified parties pursuant to this Section 6, the indemnifying party shall be
liable for the reasonable fees and expenses of not more than one separate firm (in addition to any
local counsel) for Banc of America, the directors, officers, employees and agents of Banc of
America, and all persons, if any, who control Banc of America within the meaning of either the 1933
Act or the 1934 Act for the defense of any losses, claims, damages or liabilities arising out of
the Directed Note Program.
SECTION 7. Contribution. If the indemnification provided for in Section 6 hereof is
for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of
any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying
party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one hand and the Underwriters on
the other hand from the offering of the Securities pursuant to this Agreement or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the other hand in
connection with the statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the Underwriters on the
other hand in connection with the offering of the Securities pursuant to this Agreement shall be
deemed to be in the same respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by the Company and the
total underwriting discount received by the Underwriters, in each case as set forth on the cover of
the Prospectus, bear to the aggregate initial public offering price of the Securities as set forth
on the cover of the Prospectus.
The relative fault of the Company on the one hand and the Underwriters on the other hand shall
be determined by reference to, among other things, whether any such untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters and the parties’ relative intent,
knowledge, access to information and opportunity to correct or prevent such statement or omission.
The Company and the Underwriters agree that it would not be just and equitable if contribution
pursuant to this Section 7 were determined by pro rata allocation (even if the Underwriters were
treated as one entity for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section 7. The aggregate amount
of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred
to above in this Section 7 shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in investigating, preparing for or defending against any
litigation, or any investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or
omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at which the Securities
underwritten by it and distributed to the public were offered to the public exceeds the amount of
any damages which such
20
Underwriter has otherwise been required to pay by reason of any such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
0000 Xxx) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
For purposes of this Section 7, each person, if any, who controls an Underwriter within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and each Underwriter’s
Affiliates and selling agents shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the Registration Statement,
and each person, if any, who controls the Company within the meaning of Section 15 of the 1933 Act
or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The
Underwriters’ respective obligations to contribute pursuant to this Section 7 are several in
proportion to the principal amount of Securities set forth opposite their respective names in
Schedule A hereto and not joint.
SECTION 8. Representations, Warranties and Agreements to Survive. All
representations, warranties and agreements contained in this Agreement or in certificates of
officers of the Company or any of its subsidiaries submitted pursuant hereto, shall remain
operative and in full force and effect regardless of (i) any investigation made by or on behalf of
any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its
officers or directors or any person controlling the Company, and (ii) delivery of and payment for
the Securities.
SECTION 9. Termination of Agreement.
(a) Termination; General. The Representatives may terminate this Agreement, by notice to the
Company, at any time at or prior to Closing Time (i) if there has been, since the time of execution
of this Agreement or since the respective dates as of which information is given in the Prospectus
(exclusive of any supplement thereto) or the General Disclosure Package, any material adverse
change in the condition, financial or otherwise, or in the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise, whether or not arising
in the ordinary course of business, or (ii) if there has occurred any material adverse change in
the financial markets in the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or development
involving a prospective change in national or international political, financial or economic
conditions, in each case the effect of which is such as to make it, in the judgment of the
Representatives, impracticable or inadvisable to market the Securities or to enforce contracts for
the sale of the Securities, or (iii) if trading in any securities of the Company has been suspended
or materially limited by the Commission, the New York Stock Exchange or in the Nasdaq Global Select
Market, or if trading generally on the American Stock Exchange or the New York Stock Exchange or in
the Nasdaq Global Select Market has been suspended or materially limited, or minimum or maximum
prices for trading have been fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, FINRA or any other governmental
authority or a material disruption has occurred in commercial banking or securities settlement,
(iv) a material disruption has occurred in clearance services in the United States or with respect
to Clearstream or Euroclear systems in Europe, or (v) if a banking moratorium has been declared by
either Federal, Ohio, Delaware or New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this Section, such termination
shall be without liability of any party to any other party except as provided in Section 4 hereof,
and provided further that Sections 1, 6, 7, 8 and 13 shall survive such termination and remain in
full force and effect.
21
SECTION 10. Default by One or More of the Underwriters. If one or more of the
Underwriters shall fail at Closing Time to purchase the Securities which it or they are obligated
to purchase under this Agreement (the “Defaulted Securities”), the Representatives shall have the
right, within 24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all, of the Defaulted
Securities in such amounts as may be agreed upon and upon the terms herein set forth; if, however,
the Representatives shall not have completed such arrangements within such 24-hour period, then:
(a) if the number of Defaulted Securities does not exceed 10% of the aggregate principal
amount of the Securities to be purchased hereunder, each of the non-defaulting Underwriters shall
be obligated, severally and not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the underwriting obligations of
all non-defaulting Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the aggregate principal amount of the
Securities to be purchased hereunder, this Agreement shall terminate without liability on the part
of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting Underwriter from
liability in respect of its default.
In the event of any such default which does not result in a termination of this Agreement,
either the Representatives or the Company shall have the right to postpone the Closing Time for a
period not exceeding seven days in order to effect any required changes in the Registration
Statement or the Prospectus or in any other documents or arrangements. As used herein, the term
“Underwriter” includes any person substituted for an Underwriter under this Section 10.
SECTION 11. Tax Disclosure. Notwithstanding any other provision of this Agreement,
immediately upon commencement of discussions with respect to the transactions contemplated hereby,
the Company (and each employee, representative or other agent of the Company) may disclose to any
and all persons, without limitation of any kind, the tax treatment and tax structure of the
transactions contemplated by this Agreement and all materials of any kind (including opinions or
other tax analyses) that are provided to the Company relating to such tax treatment and tax
structure. For purposes of the foregoing, the term “tax treatment” is the purported or claimed
federal income tax treatment of the transactions contemplated hereby, and the term “tax structure”
includes any fact that may be relevant to understanding the purported or claimed federal income tax
treatment of the transactions contemplated hereby.
SECTION 12. Notices. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by any standard form
of telecommunication. Notices to the Underwriters shall be directed to (i) Banc of America
Securities LLC at Xxx Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: High Grade Debt Capital
Markets Transaction Management, telephone: (000) 000-0000, fax: (000) 000-0000; (ii) X.X. Xxxxxx
Securities Inc. at 000 Xxxx Xxxxxx Xxx Xxxx, XX 00000, Attention: investment Grade Syndicate Desk -
8th floor fax: (000) 000-0000 (iii) Wachovia Capital Markets, LLC at One Wachovia Center 000 X.
Xxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000-0000, Attention: Transaction Management Department, fax: (000)
000-0000; and notices to the Company shall be directed to it at Xxx Xxxx Xxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxx 00000, Attention: Xxxxx X. Xxxxxxx, Esq., Vice President, Deputy General Counsel
and Secretary of American Financial Group, Inc.
22
SECTION 13. No Advisory or Fiduciary Relationship. The Company acknowledges and
agrees that (a) the purchase and sale of the Securities pursuant to this Agreement, including the
determination of the public offering price of the Securities and any related discounts and
commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and
the several Underwriters, on the other hand, (b) in connection with the offering contemplated
hereby and the process leading to such transaction each Underwriter is and has been acting solely
as a principal and is not the agent or fiduciary of the Company, or its stockholders, creditors,
employees or any other party, (c) no Underwriter has assumed or will assume an advisory or
fiduciary responsibility in favor of the Company with respect to the offering contemplated hereby
or the process leading thereto (irrespective of whether such Underwriter has advised or is
currently advising the Company on other matters) and no Underwriter has any obligation to the
Company with respect to the offering contemplated hereby except the obligations expressly set forth
in this Agreement, (d) the Underwriters and their respective affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the Company, and (e) the
Underwriters have not provided any legal, accounting, regulatory or tax advice with respect to the
offering contemplated hereby and the Company has consulted its own legal, accounting, regulatory
and tax advisors to the extent it deemed appropriate.
SECTION 14. Integration. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company and the Underwriters, or any of them,
with respect to the subject matter hereof.
SECTION 15. Parties. This Agreement shall inure to the benefit of and be binding upon
the Underwriters and the Company and their respective successors. Nothing expressed or mentioned in
this Agreement is intended or shall be construed to give any person, firm or corporation, other
than the Underwriters and the Company and their respective successors and the controlling persons
and officers and directors and others referred to in Sections 6 and 7 and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in respect of this
Agreement or any provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Underwriters and the Company
and their respective successors, and said controlling persons and officers and directors and others
and their heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Securities from any Underwriter shall be deemed to be a successor by
reason merely of such purchase.
SECTION 16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ITS CONFLICTS OF LAW
PROVISIONS.
SECTION 17. TIME. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS OTHERWISE
SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 18. Counterparts. This Agreement may be executed 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 Agreement.
SECTION 19. Effect of Headings. The Section headings herein are for convenience only
and shall not affect the construction hereof.
23
If the foregoing is in accordance with your understanding of our agreement, please sign and
return to the Company a counterpart hereof, whereupon this instrument, along with all counterparts,
will become a binding agreement between the Underwriters and the Company in accordance with its
terms.
Very truly yours, AMERICAN FINANCIAL GROUP, INC. |
||||
By: | /s/ Xxxxx Xxxxxx | |||
Name: | Xxxxx Xxxxxx | |||
Title: | Senior Vice President | |||
CONFIRMED AND ACCEPTED,
as of the date first above written:
as of the date first above written:
BANC OF AMERICA SECURITIES LLC |
||||
By | /s/ Xxxxxx X. Xxxxxxx | |||
Authorized Signatory |
X.X. XXXXXX SECURITIES INC. |
||||
By: | /s/ Xxxxxx Xxxxxxxxx | |||
Name: | Xxxxxx Xxxxxxxxx | |||
Title: | Vice President | |||
WACHOVIA CAPITAL MARKETS, LLC |
||||
By: | /s/ Xxxxxxx X. Xxxxxx | |||
Name: | Xxxxxxx X. Xxxxxx | |||
Title: | Vice President | |||
For themselves and as Representatives of the other Underwriters named in Schedule A hereto
24
SCHEDULE A
Principal | ||||
Amount of | ||||
Name of Underwriter | Securities | |||
Banc of America Securities LLC |
$ | 95,666,666.67 | ||
X.X. Xxxxxx Securities Inc. |
$ | 95,666,666.67 | ||
Wachovia Capital Markets, LLC |
$ | 95,666,666.67 | ||
Xxx-Xxxx Xxxxxx Xxxxxxx Xxxxxxx Xxxxxx (USA) LLC |
$ | 21,000,000.00 | ||
KeyBanc Capital Markets Inc. |
$ | 10,500,000.00 | ||
PNC Capital Markets LLC |
$ | 10,500,000.00 | ||
Xxxxxxx Xxxxx & Associates, Inc. |
$ | 10,500,000.00 | ||
U.S. Bancorp Investments, Inc. |
$ | 10,500,000.00 | ||
TOTAL: |
$ | 350,000,000 | ||
Sch A-1
SCHEDULE B
AMERICAN FINANCIAL GROUP, INC.
$350,000,000 Senior Notes due 2019
1. The initial public offering price of the Securities shall be 100.00% of the principal
amount thereof, plus accrued interest, if any, from the date of issuance.
2. The purchase price to be paid by the Underwriters for the Securities shall be 99.35% of the
principal amount thereof.
3. The interest rate on the Securities shall be 9.875% per annum.
4. The Company may redeem the Securities in whole or in part, upon not less than 30 nor more
than 60 days’ notice, at a redemption price equal to the sum of (i) the principal amount of the
Securities being redeemed plus accrued interest to the redemption date, and (ii) the Make-Whole
Amount (as defined in the Third Supplemental Indenture) with respect to such Securities.
Sch B-1
SCHEDULE C
ISSUER GENERAL USE FREE WRITING PROSPECTUSES
1. Final Term Sheet, dated June 10, 2009, a copy of which is attached hereto.
Sch C-1
Filed Pursuant to Rule 433
Dated June 10, 2009
Registration Statement No. 333-157649
Relating to
Preliminary Prospectus Supplement Dated June 10, 2009 and
Prospectus dated March 3, 2009
Dated June 10, 2009
Registration Statement No. 333-157649
Relating to
Preliminary Prospectus Supplement Dated June 10, 2009 and
Prospectus dated March 3, 2009
$350,000,000 9.875% SENIOR NOTES DUE 2019
Issuer:
|
American Financial Group, Inc. | |
Ratings*:
|
Baa2 (Xxxxx’x)/BBB (S&P)/BBB+ (Fitch) | |
Principal Amount:
|
$350,000,000 | |
Issue Price:
|
100.00% | |
Underwriting Discount:
|
0.65% | |
Trade Date:
|
June 10, 2009 | |
Settlement Date:
|
June 17, 2009 (T + 5) | |
Maturity Date:
|
June 15, 2019 | |
Security Type:
|
Senior Unsecured Fixed Rate Notes | |
Minimum Denominations:
|
$2,000 and integral multiples of $1,000 in excess thereof | |
Coupon:
|
9 7/8% | |
Interest Payment Dates:
|
Semi-annually on June 15 and December 15 of each year, commencing on December 15, 2009 | |
Day Count Convention:
|
30 / 360 | |
Yield to Maturity:
|
9 7/8 % | |
Treasury Benchmark:
|
3.125% due May 15, 2019 | |
Treasury Yield:
|
3.954% | |
Spread to Treasury
Benchmark:
|
592.1 basis points (5.921%) | |
Optional Redemption:
|
Issuer has the right to redeem the notes, in whole or in part, on one or more occasions, at its option at any time, subject to a notice period of no less than 30 days and no more than 60 days | |
Make-Whole Call Payment:
|
US Treasury + 75 bps | |
CUSIP; ISIN:
|
000000XX0; US026074AA20 | |
Joint Book-Running
Managers:
|
Banc of America Securities LLC
X.X. Xxxxxx Securities Inc. |
|
Wachovia Capital Markets, LLC | ||
Senior Co-Manager:
|
Xxx-Xxxx Xxxxxx Xxxxxxx Xxxxxxx Xxxxxx | |
Co-Managers:
|
KeyBanc Capital Markets Inc. | |
PNC Capital Markets LLC | ||
Xxxxxxx Xxxxx | ||
U.S. Bancorp |
This communication is intended for the sole use of the person to whom it is provided by the issuer.
* Ratings may be changed, suspended or withdrawn at any time and are not a recommendation to buy,
hold or sell any security.
The issuer has filed a registration statement (including a prospectus and a preliminary prospectus
supplement) with the Securities and Exchange Commission for the offering to which this
communication relates. Before you invest, you should read the prospectus and the preliminary
prospectus supplement in that registration statement and other documents the issuer has filed with
the Securities and Exchange Commission for more complete information about the issuer and this
offering. You may get these documents for free by visiting XXXXX on the Securities and Exchange
Commission’s website at xxx.xxx.xxx. Alternatively, the issuer, any underwriter or any
dealer participating in the offering will arrange to send you the prospectus and preliminary
prospectus supplement if you request it by calling Banc of America Securities LLC, toll-free at
(000) 000-0000, X.X. Xxxxxx Securities Inc., collect at (000) 000-0000 or Wachovia Capital Markets,
LLC at 0-000-000-0000.
2
ANY DISCLAIMERS OR OTHER NOTICES THAT MAY APPEAR BELOW ARE NOT APPLICABLE TO THIS COMMUNICATION AND
SHOULD BE DISREGARDED. SUCH DISCLAIMERS OR OTHER NOTICES WERE AUTOMATICALLY GENERATED AS A RESULT
OF THIS COMMUNICATION BEING SENT VIA BLOOMBERG OR ANOTHER E-MAIL SYSTEM.
3
SCHEDULE D
List of Subsidiaries
The following is a list of Subsidiaries of AFG at June 10, 2009.
Republic Indemnity Company of America
Great American Insurance Company
American Empire Surplus Lines Insurance Company
Great American Life Insurance Company
Mid-Continent Casualty Company
Great American Insurance Company
American Empire Surplus Lines Insurance Company
Great American Life Insurance Company
Mid-Continent Casualty Company
Sch D-1
Exhibit A
FORM OF OPINION OF COMPANY COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
(i) The Company has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Ohio.
(ii) The Company has power and authority (corporate and other) to own, lease and operate its
properties and conduct its business as described in the General Disclosure Package and the
Prospectus and to enter into and perform its obligations under the Purchase Agreement; and the
Company is duly qualified to do business as a foreign corporation and is in good standing (or the
local law equivalent) in all other jurisdictions in which its ownership or lease of property or the
conduct of business, requires such qualification except where the failure to so qualify will not,
individually or in the aggregate have a Material Adverse Effect.
(iii) The authorized, issued and outstanding capital stock of the Company is as set forth in
the financial statements, including the schedules and notes thereto, included in the General
Disclosure Package and the Prospectus. The issued and outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and non-assessable; none of
the outstanding shares of capital stock of the Company was issued in violation of the preemptive or
other similar rights of any securityholder of the Company.
(iv) Each Subsidiary has been duly incorporated and is an existing corporation in good
standing (or local law equivalent) under the laws of the jurisdiction of its incorporation, with
power and authority (corporate and other) to own its properties and conduct its business as
described in the General Disclosure Package and the Prospectus and is duly qualified to do business
as a foreign corporation in good standing (or the local law equivalent) in all other jurisdictions
in which its ownership or lease of property or the conduct of its business requires such
qualification, except where the failure to so qualify will not have a Material Adverse Effect;
except as otherwise disclosed in the General Disclosure Package and the Prospectus, all of the
issued and outstanding capital stock of each such Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable and is owned by the Company, directly or through
subsidiaries, free from liens, encumbrances and defects; none of the outstanding shares of capital
stock of any Subsidiary was issued in violation of the preemptive or other similar rights of any
securityholder of such Subsidiary.
(v) The Purchase Agreement has been duly authorized, executed and delivered by the Company.
(vi) The Indenture has been duly authorized, executed and delivered by the Company and duly
qualified under the 1939 Act and, assuming due authorization, execution and delivery by the
Trustee, constitutes a valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of creditors’ rights generally and
except as enforcement thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(vii) The Securities have been duly authorized and, at the Closing Time, will have been duly
executed by the Company and, when authenticated, issued and delivered in the manner provided for in
the
Exhibit A-1-1
Indenture and delivered against payment of the purchase price therefor as provided in the
Purchase Agreement, will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting enforcement of creditors’ rights
generally and except as enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law), and will be in the form
contemplated by, and entitled to the benefits of, the Indenture.
(viii) The Securities and the Indenture conform in all material respects to the descriptions
thereof contained in the General Disclosure Package and the Prospectus.
(ix) The Registration Statement has become effective under the 1933 Act; any required filing
of each prospectus relating to the Securities (including the Prospectus) pursuant to Rule 424(b)
has been made in the manner and within the time period required by Rule 424(b) (without reference
to Rule 424(b)(8)); any required filing of each Issuer Free Writing Prospectus pursuant to Rule 433
has been made in the manner and within the time period required by Rule 433(d); and, to the best of
our knowledge (after reasonable investigation), no stop order suspending the effectiveness of the
Registration Statement has been issued under the 1933 Act and no proceedings for that purpose have
been instituted or are pending or threatened by the Commission.
(x) The Registration Statement, including without limitation the Rule 430B Information, the
Prospectus, excluding the documents incorporated by reference therein, and each amendment or
supplement to the Registration Statement and the Prospectus, excluding the documents incorporated
by reference therein, as of their respective effective or issue dates (including without limitation
each deemed effective date with respect to the Underwriters pursuant to Rule 430B(f)(2) of the 1933
Act Regulations), other than the financial statements and supporting schedules and notes included
therein or omitted therefrom, and the Trustee’s Statement of Eligibility on Form T-1 (the “Form
T-1”), as to which we need express no opinion, complied as to form in all material respects with
the requirements of the 1933 Act and the 1933 Act Regulations.
(xi) The documents incorporated by reference in the General Disclosure Package and the
Prospectus (other than the financial statements and supporting schedules and notes included therein
or omitted therefrom, as to which we need express no opinion), when they became effective or were
filed with the Commission, as the case may be, complied as to form in all material respects with
the requirements of the 1933 Act or the 1934 Act, as applicable, and the rules and regulations of
the Commission thereunder.
(xii) To the best of our knowledge (after reasonable investigation), there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to which the Company or any of
its subsidiaries is a party, or to which the property of either of the Company or any of its
subsidiaries is subject, before or brought by any court or governmental agency or body, domestic or
foreign, which would reasonably be expected to result in a Material Adverse Effect, or which would
reasonably be expected to materially and adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in the Purchase Agreement, the Indenture or the
Securities or the performance by the Company of its obligations thereunder.
(xiii) The information in the General Disclosure Package and the Prospectus under “Description
of Debt Securities,” “Description of Senior Notes” and “Material United States Federal Income Tax
Considerations” and in the Registration Statement under Item 15, to the extent that it
Exhibit A-1-2
constitutes matters of law, summaries of legal matters, the Company’s charter and bylaws or
legal proceedings, or legal conclusions, has been reviewed by us and is correct in all material
respects.
(xiv) All descriptions in the Registration Statement of contracts and other documents to which
the Company or its subsidiaries are a party are accurate in all material respects; to the best of
our knowledge (after reasonable investigation), there are no franchises, contracts, indentures,
mortgages, loan agreements, notes, leases or other instruments required to be described or referred
to in the Registration Statement or to be filed as exhibits to the Registration Statement other
than those described or referred to therein or filed or incorporated by reference as exhibits
thereto.
(xv) No filing with, or authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency, domestic or foreign
(other than under the 1933 Act and the 1933 Act Regulations, which have been obtained, or as may be
required under the securities or blue sky laws of the various states, as to which we need express
no opinion) is necessary or required in connection with the due authorization, execution, delivery
and performance of the Purchase Agreement or the due execution, delivery or performance of the
Indenture by the Company or for the offering, issuance, sale, delivery or performance of the
Securities.
(xvi) The execution, delivery and performance of the Purchase Agreement, the Indenture and the
Securities and any other agreement or instrument entered into or issued or to be entered into or
issued by the Company in connection with the consummation of the transactions contemplated in the
Purchase Agreement and in the Registration Statement (including the issuance and sale of the
Securities and the use of the proceeds from the sale of the Securities as described in the
Prospectus under the caption “Use of Proceeds”) and compliance by the Company with its obligations
under the Purchase Agreement, the Indenture and the Securities and such other agreements or
instruments do not and will not, whether with or without the giving of notice or lapse of time or
both, conflict with or constitute a breach of, or default or Repayment Event (as defined in Section
1(a)(xiv) of the Purchase Agreement) under or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its subsidiaries
pursuant to any contract, indenture, mortgage, deed of trust, loan or credit agreement, note, lease
or any other agreement or instrument, known to us (after reasonable investigation), to which the
Company or any of its subsidiaries is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any of its subsidiaries is subject (except
for such conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances that
would not have a Material Adverse Effect), nor will such action result in any violation of the
provisions of the charter or by-laws of the Company or any of its subsidiaries, or any applicable
law, statute, rule or regulation or any judgment, order, writ or decree known to us (after
reasonable investigation), of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any of its subsidiaries or any of its respective
properties, assets or operations.
(xvii) The Company is not required, and upon the issuance and sale of the Securities as herein
contemplated and the application of the net proceeds therefrom as described in the Prospectus will
not be required, to register as an “investment company” under the 1940 Act.
(xviii) To the best of our knowledge (after reasonable investigation), each Insurance
Subsidiary holds such insurance licenses, certificates and permits from governmental authorities
(including, without limitation, Insurance Licenses) as are necessary to the conduct of its business
as described in the General Disclosure Package and the Prospectus; to the best of our knowledge
(after reasonable investigation), there is no pending or threatened action, suit, proceeding or
investigation that could reasonably be expected to result in the revocation, termination or
suspension of any Insurance License which would have a Material Adverse Effect; and except as
disclosed in the General Disclosure Package and the Prospectus, to the best of our knowledge (after
reasonable investigation), no insurance regulatory agency
Exhibit A-1-3
or body has issued, or commenced any proceeding for the issuance of, any order or decree
impairing, restricting or prohibiting the payment of dividends by any Insurance Subsidiary to its
parent.
(xix) To the best of our knowledge (after reasonable investigation), all reinsurance treaties
and arrangements to which any Insurance Subsidiary is a party are in full force and effect and such
counsel is not aware of any violation of, or default in the performance, observance or fulfillment
of, any obligation, agreement, covenant or condition contained therein by any Insurance Subsidiary.
Nothing has come to our attention that would lead us to believe that the Original Registration
Statement or any amendment thereto (except for financial statements and schedules and notes thereto
and other financial data included or incorporated by reference therein or omitted therefrom and the
Form T-1, as to which we need make no statement), at the time such Original Registration Statement
or any such amendment 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 therein
not misleading; that the Registration Statement, including the Rule 430B Information (except for
financial statements and schedules and notes thereto and other financial data included or
incorporated by reference therein or omitted therefrom and the Form T-1, as to which we need make
no statement), at each deemed effective date with respect to the Underwriters pursuant to Rule
430B(f)(2) of the 1933 Act Regulations, 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 therein
not misleading; or that the Prospectus or any amendment or supplement thereto (except for financial
statements and schedules and notes thereto and other financial data included or incorporated by
reference therein or omitted therefrom and the Form T-1, as to which we need make no statement), at
the time the Prospectus was issued, at the time any such amended or supplemented prospectus was
issued or at the Closing Time, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they were made, not
misleading. In addition, nothing has come to our attention that would lead us to believe that the
General Disclosure Package, other than the financial statements and schedules and notes thereto and
other financial data included or incorporated by reference therein or omitted therefrom, as to
which we need make no statement, as of the Applicable Time, contained any untrue statement of a
material fact or omitted to state any material fact necessary in order to make the statements
therein, in the light of circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact (but not as to legal
conclusions), to the extent they deem proper, on certificates of responsible officers of the
Company and public officials. Such opinion shall not state that it is to be governed or qualified
by, or that it is otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the ABA Section of
Business Law (1991).
Exhibit A-1-4