Exhibit 10.1

 

EXECUTION VERSION

 

J.P. MORGAN SECURITIES LLC

 

PURCHASE AGREEMENT

 

 

AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

 

3.50% Convertible Senior Notes due 2015

 

Purchase Agreement

 

September 16, 2010

 

J.P. Morgan Securities LLC

As Representative of the

several Initial Purchasers listed

in Schedule 1 hereto

c/o J.P. Morgan Securities LLC

383 Madison Avenue

New York, New York 10179

 

Ladies and Gentlemen:

 

American Equity Investment Life Holding Company, an Iowa corporation (the
“Company”), proposes to issue and sell to the several initial purchasers listed
in Schedule 1 hereto (the “Initial Purchasers”), for whom you are acting as
representative (the “Representative”), $170,000,000 principal amount of its
3.50% Convertible Senior Notes due 2015 (the “Underwritten Securities”) and, at
the option of the Initial Purchasers, up to an additional $30,000,000 principal
amount of its 3.50% Convertible Senior Notes due 2015 (the “Option Securities”)
if and to the extent that the Initial Purchasers shall have determined to
exercise the option to purchase such 3.50% Convertible Senior Notes due 2015
granted to the Initial Purchasers in Section 2 hereof to cover over-allotments. 
The Underwritten Securities and the Option Securities are herein referred to as
the “Securities”.  The Securities will be issued pursuant to an Indenture to be
dated as of September 22, 2010 (the “Indenture”) between the Company and U.S.
Bank National Association, as trustee (the “Trustee”).  The Securities will be
convertible into cash on the terms set forth in the Indenture based on a formula
linked to the price of the common stock, par value $1.00 per share, of the
Company.

 

The Company hereby confirms its agreement with the several Initial Purchasers
concerning the purchase and sale of the Securities, as follows:

 

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1.             The Securities will be sold to the Initial Purchasers without
being registered under the Securities Act of 1933, as amended (the “Securities
Act”), in reliance upon an exemption therefrom.  The Company has prepared a
preliminary offering memorandum dated September 15, 2010, as amended or
supplemented through the date hereof, including any exhibits thereto and any
information incorporated by reference therein (the “Preliminary Offering
Memorandum”) and will prepare an offering memorandum dated the date hereof, as
amended or supplemented through the date hereof, including any exhibits thereto
and any information incorporated by reference therein (the “Offering
Memorandum”) setting forth information concerning the Company and the
Securities.  Copies of the Preliminary Offering Memorandum have been, and copies
of the Offering Memorandum will be, delivered by the Company to the Initial
Purchasers pursuant to the terms of this Agreement.  The Company hereby confirms
that it has authorized the use of the Preliminary Offering Memorandum, the other
Time of Sale Information (as defined below) and the Offering Memorandum in
connection with the offering and resale of the Securities by the Initial
Purchasers in the manner contemplated by this Agreement.  References herein to
the Preliminary Offering Memorandum, the Time of Sale Information and the
Offering Memorandum shall be deemed to refer to and include any document
incorporated by reference therein.

 

At or prior to the time when sales of the Securities were first made (the “Time
of Sale”), the Company had prepared the following information (collectively, the
“Time of Sale Information”): the Preliminary Offering Memorandum, as
supplemented and amended by the written communications listed on Annex B hereto.

 

2.             Purchase and Resale of the Securities by the Initial Purchasers. 
(a)  The Company agrees to issue and sell the Underwritten Securities to the
several Initial Purchasers as provided in this Agreement, and each Initial
Purchaser, on the basis of the representations, warranties and agreements set
forth herein and subject to the conditions set forth herein, agrees, severally
and not jointly, to purchase from the Company the respective principal amount of
Underwritten Securities set forth opposite such Initial Purchaser’s name in
Schedule 1 hereto at a price equal to 97% of the principal amount thereof (the
“Purchase Price”).

 

In addition, the Company agrees to issue and sell the Option Securities to the
several Initial Purchasers as provided in this Agreement, and the Initial
Purchasers, on the basis of the representations, warranties and agreements set
forth herein and subject to the conditions set forth herein, shall have the
option to purchase, severally and not jointly, from the Company the Option
Securities at the Purchase Price plus accrued interest, if any, from the Closing
Date to the date of payment and delivery.

 

If any Option Securities are to be purchased, the amount of Option Securities to
be purchased by each Initial Purchaser shall be the amount of Option Securities
which bears the same ratio to the aggregate amount of Option Securities being
purchased as the amount of Underwritten Securities set forth opposite the name
of such Initial Purchaser in Schedule 1 hereto

 

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(or such amount increased as set forth in Section 10 hereof) bears to the
aggregate amount of Underwritten Securities being purchased from the Company by
the several Initial Purchasers, subject, however, to such adjustments to
eliminate Securities in denominations other than $1,000 or any higher multiple
of $1,000 as the Representative in its sole discretion shall make.

 

The Initial Purchasers may exercise the option to purchase the Option Securities
at any time in whole, or from time to time in part, on or before the thirteenth
day following the date of this Agreement, by written notice from the
Representative to the Company.  Such notice shall set forth the aggregate amount
of Option Securities as to which the option is being exercised and the date and
time when the Option Securities are to be delivered and paid for which may be
the same date and time as the Closing Date (as hereinafter defined) but shall
not be earlier than the Closing Date or, with regard to any Option Securities to
be delivered after the Closing Date, no earlier than two (2) nor later than ten
(10) full business days (as hereinafter defined) after the date of such notice
unless the Representative and Company otherwise agree in writing (unless such
time and date are postponed in accordance with the provisions of Section 10
hereof).

 

(b)           The Company understands that the Initial Purchasers intend to
offer the Securities for resale on the terms set forth in the Time of Sale
Information.  Each Initial Purchaser, severally and not jointly, represents,
warrants and agrees that:

 

(i)            it is a qualified institutional buyer within the meaning of
Rule 144A under the Securities Act (a “QIB”) and an accredited investor within
the meaning of Rule 501(a) under the Securities Act;

 

(ii)           it has not solicited offers for, or offered or sold, and will not
solicit offers for, or offer or sell, the Securities by means of any form of
general solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D under the Securities Act (“Regulation D”) or in any manner
involving a public offering within the meaning of Section 4(2) of the Securities
Act; and

 

(iii)          it has not solicited offers for, or offered or sold, and will not
solicit offers for, or offer or sell, the Securities as part of their initial
offering except to persons whom it reasonably believes to be QIBs in
transactions pursuant to Rule 144A under the Securities Act (“Rule 144A”) and in
connection with each such sale, it has taken or will take reasonable steps to
ensure that the purchaser of the Securities is aware that such sale is being
made in reliance on Rule 144A.

 

(c)           Each Initial Purchaser acknowledges and agrees that the Company
and, for purposes of the opinions to be delivered to the Initial Purchasers
pursuant to Sections 6(f) and 6(h), counsel for the Company and counsel for the
Initial Purchasers, respectively, may rely upon the accuracy of the
representations and warranties of the Initial Purchasers, and compliance by the
Initial Purchasers with their agreements, contained in paragraph (b) above, and
each Initial Purchaser hereby consents to such reliance.

 

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(d)           The Company acknowledges and agrees that the Initial Purchasers
may offer and sell Securities to or through any affiliate of an Initial
Purchaser and that any such affiliate may offer and sell Securities purchased by
it to or through any Initial Purchaser.

 

(e)           Payment for the Securities shall be made by wire transfer in
immediately available funds to the account specified by the Company to the
Representative in the case of the Underwritten Securities, at the offices of
Davis Polk & Wardwell LLP at 10:00 A.M. New York City time on September 22,
2010, or at such other time or place on the same or such other date, not later
than the fifth business day thereafter, as the Representative and the Company
may agree upon in writing or, in the case of the Option Securities, on the date
and at the time and place specified by the Representative in the written notice
of the Initial Purchasers’ election to purchase such Option Securities.  The
time and date of such payment for the Underwritten Securities is referred to
herein as the “Closing Date” and the time and date for such payment for the
Option Securities, if other than the Closing Date, is herein referred to as the
“Additional Closing Date”.

 

Payment for the Securities to be purchased on the Closing Date or the Additional
Closing Date, as the case may be, shall be made against delivery to the nominee
of The Depositary Trust Company (“DTC”), for the respective accounts of the
several Initial Purchasers of the Securities to be purchased on such date, of
one or more global notes representing the Securities (collectively, the “Global
Note”), with any transfer taxes payable in connection with the sale of such
Securities duly paid by the Company.  The Global Note will be made available for
inspection by the Representative at the office of J.P. Morgan Securities LLC,
383 Madison Avenue, New York, New York, 10179, not later than 1:00 P.M., New
York City time, on the business day prior to the Closing Date or the Additional
Closing Date, as the case may be.

 

(f)            The Company acknowledges and agrees that the Initial Purchasers
are acting solely in the capacity of an arm’s length contractual counterparty to
the Company with respect to the offering of Securities contemplated hereby
(including in connection with determining the terms of the offering) and not as
a financial advisor or a fiduciary to, or an agent of, the Company or any other
person.  Additionally, neither the Representative nor any other Initial
Purchaser is advising the Company or any other person as to any legal, tax,
investment, accounting or regulatory matters in any jurisdiction.  The Company
shall consult with its own advisors concerning such matters and shall be
responsible for making its own independent investigation and appraisal of the
transactions contemplated hereby, and the Initial Purchasers shall have no
responsibility or liability to the Company with respect thereto. Any review by
the Initial Purchasers of the Company, the transactions contemplated hereby or
other matters relating to such transactions will be performed solely for the
benefit of the Initial Purchasers and shall not be on behalf of the Company.

 

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3.             Representations and Warranties of the Company.  The Company
represents and warrants to each Initial Purchaser that:

 

(a)           Preliminary Offering Memorandum.  The Preliminary Offering
Memorandum, as of its date, did not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided that the Company makes no representation and warranty with
respect to any statements or omissions made in reliance upon and in conformity
with information relating to any Initial Purchaser furnished to the Company in
writing by such Initial Purchaser through the Representative expressly for use
in any Preliminary Offering Memorandum, it being understood and agreed that the
only such information furnished by any Initial Purchaser consists of the
information described as such in Section 7(b) hereof.

 

(b)           Time of Sale Information. The Time of Sale Information, at the
Time of Sale, did not, and at the Closing Date and as of the Additional Closing
Date, as the case may be, as supplemented, will not, contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that the Company makes no
representation and warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to any Initial
Purchaser furnished to the Company in writing by such Initial Purchaser through
the Representative expressly for use in such Time of Sale Information, it being
understood and agreed that the only such information furnished by any Initial
Purchaser consists of the information described as such in Section 7(b) hereof. 
No statement of material fact included in the Offering Memorandum has been
omitted from the Time of Sale Information and no statement of material fact
included in the Time of Sale Information that is required to be included in the
Offering Memorandum has been omitted therefrom.

 

(c)           Additional Written Communications.  Other than the Preliminary
Offering Memorandum and the Offering Memorandum, the Company (including its
agents and representatives, other than the Initial Purchasers in their capacity
as such) has not made, used, prepared, authorized, approved or referred to and
will not prepare, make, use, authorize, approve or refer to any “written
communication” (as defined in Rule 405 under the Securities Act) that
constitutes an offer to sell or solicitation of an offer to buy the Securities
(each such communication by the Company or its agents and representatives (other
than a communication referred to in clauses (i), (ii) and (iii) below) an
“Issuer Written Communication”) other than (i) the Preliminary Offering
Memorandum, (ii) the Offering Memorandum, (iii) the documents listed on Annex B
hereto, including a term sheet substantially in the form of Annex C hereto,
which constitute part of the Time of Sale Information, and (iv) each electronic
road show and any other written communications approved in writing in advance by
the Representative.  Each such Issuer Written Communication, when taken together
with the Time of Sale Information, did not, and at the Closing Date and as of
the Additional Closing Date, as the case may be, as supplemented, will not,
contain any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were

 

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made, not misleading; provided that the Company makes no representation and
warranty with respect to any statements or omissions made in each such Issuer
Written Communication in reliance upon and in conformity with information
relating to any Initial Purchaser furnished to the Company in writing by such
Initial Purchaser through the Representative expressly for use in such Issuer
Written Communication, it being understood and agreed that the only such
information furnished by any Initial Purchaser consists of the information
described as such in Section 7(b) hereof.  Each such Issuer Written
Communication, as of its issue date, did not include any information that
conflicted, conflicts or will conflict with the information contained in the
Time of Sale Information or the Offering Memorandum, including any document
incorporated by reference therein.

 

(d)           Offering Memorandum.  As of the date of the Offering Memorandum
and as of the Closing Date and as of the Additional Closing Date, as the case
may be, the Offering Memorandum does not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that the Company makes no
representation and warranty with respect to any statements or omissions made in
reliance upon and in conformity with information relating to any Initial
Purchaser furnished to the Company in writing by such Initial Purchaser through
the Representative expressly for use in the Offering Memorandum, it being
understood and agreed that the only such information furnished by any Initial
Purchaser consists of the information described as such in Section 7(b) hereof.

 

(e)           Incorporated Documents.  The documents incorporated by reference
in the Offering Memorandum or the Time of Sale Information at the time they were
or hereafter are filed, or if amended, as so amended, with the Securities and
Exchange Commission (the “Commission”) comply, and with respect to future
filings, will comply, in all material respects to the requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations of
the Commission thereunder (collectively, the “Exchange Act”) and such documents
did not and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

 

(f)            Financial Statements.  The financial statements and the related
notes thereto of the Company and its consolidated subsidiaries included or
incorporated by reference in the Time of Sale Information and the Offering
Memorandum present fairly in all material respects the financial position and
the results of operations and cash flows of the Company and its consolidated
subsidiaries, at the indicated dates and for the indicated periods and the
unaudited interim consolidated financial statements reflect all adjustments,
consisting only of normal recurring items, which are necessary to present fairly
the financial position and results of operations of the Company on a basis
consistent with the prior audited consolidated financial statements; such
financial statements and related notes and schedules have been prepared in
accordance with generally accepted accounting principles in the United States,
consistently applied throughout the periods involved, except as disclosed
therein; the selected consolidated

 

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financial data and summary consolidated financial information of the Company and
its subsidiaries included in or incorporated by reference in the Time of Sale
Information and the Offering Memorandum presents fairly, when considered in
relation to the consolidated financial statements taken as a whole, in all
material respects, the information shown therein and such data and information
has been derived from the audited and unaudited consolidated financial
statements incorporated by reference in the Time of Sale Information and the
Offering Memorandum or the Statutory Financial Statements identified in
Section 3(nn) hereof.

 

(g)           No Material Adverse Change.  Since June 30, 2010, except as
otherwise stated in the Time of Sale Information or the Offering Memorandum,
(i) there has been no material adverse change in the business, results of
operations, condition (financial or otherwise) or prospects of the Company and
its subsidiaries, taken as a whole, whether or not arising in the ordinary
course of business, (ii) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its subsidiaries,
taken as a whole, and (iii) except for dividends on the Company’s common stock
in an amount not to exceed $0.08 per share, there has been no dividend or
distribution of any kind declared, paid or made by the Company on any class of
its capital stock.

 

(h)           Organization and Good Standing.  The Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of the State of Iowa, with the corporate power and authority to own or
lease its properties and conduct its business as described in the Time of Sale
Information and the Offering Memorandum and to enter into and perform its
obligations under the Transaction Documents (as defined below); each of the
Company’s “significant subsidiaries” (as such term is defined in Rule 1-02 of
Regulation S-X under the Exchange Act) (each, a “Significant Subsidiary” and
together, the “Significant Subsidiaries”) has been duly incorporated or
organized and is validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with the corporate or other
power and authority to own or lease its properties and conduct its business as
described in the Time of Sale Information and the Offering Memorandum; the
Company and each Significant Subsidiary are duly qualified to transact business
in all jurisdictions in which the conduct of their business requires such
qualification, except, in each case, where the failure so to qualify or to be in
good standing would not have a material adverse effect on the business, results
of operations, condition (financial or otherwise) or prospects of the Company
and its subsidiaries, taken as a whole (a “Material Adverse Change”).

 

(i)            Capitalization.  The consolidated capitalization of the Company
set forth under the caption “Capitalization” in the Time of Sale Information and
the Offering Memorandum is true and correct as of the date set forth therein;
all the outstanding shares of capital stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable and none of
the outstanding shares of capital stock issued by the Company was issued in
violation of any preemptive or similar rights of any stockholder of the Company;
except as described in or expressly contemplated by the Time of Sale Information
and the Offering Memorandum, there are no

 

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outstanding rights (including, without limitation, pre-emptive rights), warrants
or options to acquire, or instruments convertible into or exchangeable for, any
shares of capital stock or other equity interests in the Company or any
Significant Subsidiaries, or any contract, commitment, agreement, understanding
or arrangement of any kind relating to the issuance of any capital stock of the
Company or any Significant Subsidiary, any such convertible or exchangeable
securities or any such rights, warrants or options, except as disclosed in the
Time of Sale Information and the Offering Memorandum; the capital stock of the
Company conforms in all material respects to the description thereof contained
in the Time of Sale Information and the Offering Memorandum; and all the
outstanding shares of capital stock or other equity interests of each
Significant Subsidiary owned, directly or indirectly, by the Company have been
duly and validly authorized and issued, are fully paid and non-assessable except
as otherwise described in Time of Sale Information and the Offering Memorandum)
and are owned directly or indirectly by the Company or another Significant
Subsidiary, free and clear of any lien, charge, encumbrance, security interest,
restriction on voting or transfer or any other claim of any third party, except
those that are immaterial to the Company and the Significant Subsidiaries, taken
as a whole.

 

(j)            Stock Options.  With respect to the stock options (the “Stock
Options”) granted pursuant to the stock-based compensation plans of the Company
and its subsidiaries (the “Company Stock Plans”), (i) each Stock Option intended
to qualify as an “incentive stock option” under Section 422 of the Code so
qualifies, (ii) each grant of a Stock Option was duly authorized no later than
the date on which the grant of such Stock Option was by its terms to be
effective (the “Grant Date”) by all necessary corporate action, including, as
applicable, approval by the board of directors of the Company (or a duly
constituted and authorized committee thereof) and any required stockholder
approval by the necessary number of votes or written consents, and the award
agreement governing such grant (if any) was duly executed and delivered by each
party thereto, (iii) each such grant was made in accordance with the terms of
the Company Stock Plans, the Exchange Act and all other applicable laws and
regulatory rules or requirements, including the rules of the New York Stock
Exchange and any other exchange on which Company securities are traded, (iv) the
per share exercise price of each Stock Option was at least equal to the fair
market value of a share of Common Stock on the applicable Grant Date and
(v) each such grant was properly accounted for in accordance with GAAP in the
financial statements (including the related notes) of the Company and disclosed
in the Company’s filings with the Commission in accordance with the Exchange Act
and all other applicable laws. The Company has not knowingly granted, and there
is no and has been no policy or practice of the Company of granting, Stock
Options immediately prior to, or otherwise coordinating the grant of Stock
Options with, the release or other public announcement of material information
regarding the Company or its subsidiaries or their results of operations or
prospects.

 

(k)           Due Authorization.  The Company has full right, power and
authority to execute and deliver this Agreement, the Indenture and the
certificate evidencing the Securities (collectively, the “Transaction
Documents”) and to perform its obligations hereunder and thereunder; and all
action required to be taken for the due and proper authorization, execution and
delivery by it of each of the

 

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Transaction Documents and the consummation by it of the transactions
contemplated thereby or by the Time of Sale Information and the Offering
Memorandum has been duly and validly taken.

 

                (l)            The Indenture.   The Indenture has been duly
authorized by the Company and when duly executed and delivered by the Company
and, assuming the due authorization, execution and delivery of the Indenture by
the Trustee, will be a valid and legally binding agreement of the Company
enforceable against the Company in accordance with its terms, except as
enforceability thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws affecting creditors’
rights and remedies generally and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether such enforceability is considered
in a proceeding in equity or at law) (collectively, the “Enforceability
Exceptions”).

 

(m)          Purchase Agreement.  This Agreement has been duly authorized,
executed and delivered by the Company.

 

(n)           The Securities.  The Securities have been duly authorized by the
Company and, when duly executed, authenticated, issued and delivered as provided
in the Indenture and paid for as provided herein, will be duly and validly
issued and outstanding and will constitute valid and legally binding obligations
of the Company enforceable against the Company in accordance with their terms,
subject to the Enforceability Exceptions, and will be entitled to the benefits
of the Indenture.

 

(o)           Descriptions of the Transaction Documents.  The Securities and the
Indenture conform in all material respects to the respective statements relating
thereto contained in the Time of Sale Information and the Offering Memorandum.

 

(p)           No Violation or Default.  Neither the Company nor any of the
Significant Subsidiaries is or, with the giving of notice or lapse of time or
both, will be, in violation of or in default under (i) its certificate of
incorporation or bylaws or similar organizational documents or (ii) any
indenture, mortgage, deed of trust, lease, contract or other agreement or
instrument to which any of them is a party or to which any of them or any of
their respective properties is bound (collectively, “Contracts”) and, solely
with respect to this clause (ii), which violation or default would result in a
Material Adverse Change.

 

(q)           No Conflicts.  The execution, delivery and performance by the
Company of its obligations under each of the Transaction Documents, the issuance
and sale of the Securities and the consummation of the transactions contemplated
by the Transaction Documents will not conflict with or result in a breach of any
of the terms or provisions of, or constitute a default under (i) any Contract,
(ii) the certificate of incorporation or bylaws of the Company, or (iii) any
law, order, rule, regulation, judgment, order, writ or decree of any court
applicable to the Company or any of its subsidiaries or of any government,
regulatory body or administrative agency or other governmental body having
jurisdiction over the Company or any subsidiary, except, in the case

 

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of clauses (i) and (iii) to the extent that any such conflict, breach or default
would not reasonably be expected to result in a Material Adverse Change.

 

(r)            No Consents Required.  No consent, approval, authorization or
order of or qualification with any governmental body or agency is required for
the performance by the Company of its obligations under the Transaction
Documents, the issuance and sale of the Securities (including the issuance of
the Underlying Securities upon conversion thereof), except (A) such as have been
already obtained or will have been obtained prior to the Closing Date and
(B) for any report or notice required under Regulation D promulgated under the
Securities Act or any applicable state securities laws and such consents,
approvals, authorizations, orders, filings, registrations or qualifications as
may be required under the Exchange Act, the New York Stock Exchange and
applicable state or foreign securities laws, in each case with respect to
transactions contemplated by the Transaction Documents.

 

(s)           Legal Proceedings.  Except as disclosed in the Time of Sale
Information and the Offering Memorandum, there is no action, suit, claim,
proceeding or labor dispute pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries before any court or
administrative agency or otherwise which, if determined adversely to the Company
or any of its subsidiaries, would reasonably be expected to result in a Material
Adverse Change, or prevent the consummation of the transactions contemplated
hereby.

 

(t)            Independent Accountants.  KPMG LLP, which has audited certain
consolidated financial statements of the Company and its subsidiaries, is an
independent registered public accounting firm with respect to the Company and
its subsidiaries within the applicable rules and regulations adopted by the
Commission and the Public Company Accounting Oversight Board (United States) and
as required by the Securities Act.

 

(u)           Title to Real and Personal Property.  The Company and the
Significant Subsidiaries have good and marketable title to all real property
owned by them and good title to all other properties owned by them, subject to
no lien, mortgage, pledge, charge or encumbrance of any kind, except those
reflected in the consolidated financial statements hereinabove described or
described in the Time of Sale Information and the Offering Memorandum, except
where the failure to have such good and marketable title or the existence of any
such lien, mortgage, pledge, charge or encumbrance would not reasonably be
expected to have a Material Adverse Change; the Company and the Significant
Subsidiaries occupy their leased properties under valid and binding leases,
except where the failure of any such leases to be valid and binding would not
reasonably be expected to have a Material Adverse Change.

 

(v)           Title to Intellectual Property.  The Company and the Significant
Subsidiaries each own or possess, or can acquire on reasonable terms, adequate
patents, patent rights, trademarks, trade names, service marks, service names,
copyrights, license rights, know-how (including trade secrets and other
unpatented and unpatentable proprietary or confidential information, systems or
procedures) and other intellectual property rights (“Intellectual Property”)
which in each case are

 

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material to the financial condition of the Company and its subsidiaries, taken
as a whole; none of the Company or any of the Significant Subsidiaries has
received notice of any infringement of or conflict with, any Intellectual
Property of any other person or entity, except to the extent that such
infringement or conflict if determined adversely to the Company or such
Significant Subsidiary would not reasonably be expected to result in a Material
Adverse Change.

 

(w)          Investment Company Act.  The Company is not and, after giving
effect to the offering and sale of the Securities and the application of the net
proceeds thereof as described in the Time of Sale Information and the Offering
Memorandum, will not be required to register as an “investment company” as such
term is defined in the Investment Company Act of 1940, as amended (the
“Investment Company Act”).

 

(x)            Taxes.  The Company and each of its subsidiaries have filed all
Federal, State, local and foreign tax returns which have been required to be
filed and have paid all taxes indicated by such returns and all assessments
received by them or any of them to the extent that such taxes have become due,
except to the extent that any failure to so file or pay would not reasonably be
expected to result in a Material Adverse Change; all material tax liabilities
have been adequately provided for in the financial statements of the Company,
and the Company does not know of any actual or proposed additional material tax
assessments.

 

(y)           Licenses and Permits.  The Company and each of the Significant
Subsidiaries hold all licenses, certificates and permits from governmental
authorities which are necessary to the conduct of their businesses, except to
the extent that the failure to obtain such licenses, certificates and permits
would not reasonably be expected to result in a Material Adverse Change.

 

(z)            Compliance With Environmental Laws.  The Company and each of its
subsidiaries comply with all Environmental Laws (as defined below), except to
the extent that failure to comply with such Environmental Laws would not,
individually or in the aggregate, be reasonably expected to result in a Material
Adverse Change; none of the Company or any of its subsidiaries is the subject of
any pending or, to the knowledge of the Company, threatened federal, state or
local investigation evaluating whether any remedial action by the Company or any
of its subsidiaries is needed to respond to a release of any Hazardous Materials
(as defined below) into the environment resulting from the Company’s or any of
its subsidiaries’ business operations or ownership or possession of any of their
properties or assets, or is in contravention of any Environmental Law that could
reasonably be expected, individually or in the aggregate, to result in any
Material Adverse Change; none of the Company or any of its subsidiaries has
received any notice or claim, nor are there pending or, to the knowledge of the
Company, threatened lawsuits against them, with respect to violations of an
Environmental Law or in connection with any release of any Hazardous Material
into the environment that could reasonably be expected in the aggregate to
result in a Material Adverse Change; as used herein, “Environmental Laws” means
any federal, state or local law or regulation applicable to the Company’s or any
of its subsidiaries’ business operation or ownership or possession of any of
their properties or assets

 

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relating to environmental matters, and “Hazardous Materials” means those
substances that are regulated by or form the basis of liability under any
Environmental Laws.

 

(aa)         Compliance With ERISA.  The Company and each subsidiary is in
compliance in all material respects with all presently applicable provisions of
the Employee Retirement Income Security Act of 1974, as amended, including the
regulations and published interpretations thereunder (“ERISA”); no “reportable
event” (as defined in ERISA) has occurred with respect to any “pension plan” (as
defined in ERISA) for which the Company or any subsidiary would have any
material liability; neither the Company nor any subsidiary has incurred or
expects to incur any material liability under (i) Title IV of ERISA with respect
to termination of, or withdrawal from, any “pension plan” or (ii) Sections 412
or 4971 of the Internal Revenue Code of 1986, as amended, including the
regulations and published interpretations thereunder (the “Code”); and each
“pension plan” for which the Company or any subsidiary would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by action
or by failure to act, which would cause the loss of such qualification.

 

(bb)         Disclosure Controls.  The Company maintains an effective system of
“disclosure controls and procedures” (as defined in Rule 13a-15(e) of the
Exchange Act) that is designed to ensure that information required to be
disclosed by the Company in reports that it files or submits under the Exchange
Act is recorded, processed, summarized and reported within the time periods
specified in the Commission’s rules and forms, including controls and procedures
designed to ensure that such information is accumulated and communicated to the
Company’s management as appropriate to allow timely decisions regarding required
disclosure.  The Company has carried out evaluations of the effectiveness of its
disclosure controls and procedures as required by Rule 13a-15 of the Exchange
Act.

 

(cc)         Accounting Controls.  Except as disclosed in the Time of Sale
Information and the Offering Memorandum, the Company and its subsidiaries, taken
as a whole, maintain a system of internal accounting controls sufficient to
provide reasonable assurances that (A) transactions are executed in accordance
with management’s general or specific authorization; (B) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
accountability for assets; (C) access to assets is permitted only in accordance
with management’s general or specific authorization; and (D) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. 
Except as disclosed in the Time of Sale Information and the Offering Memorandum,
neither the Company nor any of its subsidiaries is aware of (i) any material
weakness in its internal control over financial reporting or (ii) a change in
internal control over financial reporting that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over
financial reporting.

 

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(dd)         Insurance.  The Company and each of its subsidiaries, taken as a
whole, carry, or are covered by, insurance in such amounts and covering such
risks as is generally deemed adequate for the conduct of their business as
presently conducted and the value of their respective properties and as is
customary for companies engaged in similar businesses.

 

(ee)         No Broker’s Fees.  Neither the Company nor any of its subsidiaries
is a party to any contract, agreement or understanding with any person (other
than this Agreement) that would give rise to a valid claim against the Company
or any subsidiary or any Initial Purchaser for a brokerage commission, finder’s
fee or like payment in connection with the offering and sale of the Securities.

 

(ff)           No Integration. Neither the Company nor any of its affiliates (as
defined in Rule 501(b) of Regulation D) has, directly or through any agent,
sold, offered for sale, solicited offers to buy or otherwise negotiated in
respect of, any security (as defined in the Securities Act), that is or will be
integrated with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.

 

(gg)         No General Solicitation or Directed Selling Efforts.  None of the
Company, any of its affiliates (as defined in Rule 501(b) of Regulation D) or
any person acting on its or their behalf (other than the Initial Purchasers and
their affiliates, as to whom the Company makes no representation) has engaged or
will engage, in connection with the offering of the Securities, in any form of
general solicitation or general advertising within the meaning of Rule 502(c) of
Regulation D under the Securities Act or in any manner involving a public
offering within the meaning of Section 4(2) of the Securities Act.

 

(hh)         Securities Law Exemptions.  Assuming the accuracy of the
representations and warranties of the Initial Purchasers contained in
Section 2(b) and their compliance with their agreements set forth therein, it is
not necessary, in connection with the issuance and sale of the Securities to the
Initial Purchasers and the offer, resale and delivery of the Securities by the
Initial Purchasers in the manner contemplated by this Agreement, the Time of
Sale Information and the Offering Memorandum, to register the Securities under
the Securities Act or to qualify the Indenture under the Trust Indenture Act.

 

(ii)           No Stabilization.  Neither the Company nor any of its
subsidiaries has taken, directly or indirectly, any action designed to cause or
result in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the Securities.

 

(jj)           Sarbanes-Oxley.  The Company, its subsidiaries and, to the
knowledge of the Company, their respective officers and directors (in their
capacities as such), are in compliance in all material respects with the
Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in
connection therewith.

 

(kk)         Insurance Laws.  Each of the Company and each subsidiary that is
engaged in the business of insurance or reinsurance (collectively, the
“Insurance Subsidiaries”) is in compliance

 

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with the requirements of the insurance laws and regulations of its respective
jurisdiction of organization or incorporation, as the case may be, and the
insurance laws and regulations of other jurisdictions which are applicable to
it, and has filed all notices, reports, documents or other information required
to be filed thereunder, in each case, with such exceptions as would not
reasonably be expected to result in a Material Adverse Change; neither the
Company nor any Insurance Subsidiary has received any notification from any
insurance regulatory authority to the effect that any additional authorization,
approval, order, consent, license, certificate, permit, registration or
qualification (“Approvals”) is needed to be obtained by the Company or any of
the Insurance Subsidiaries in any case where it could be reasonably expected
that obtaining such Approvals or the failure to obtain such Approvals would
result in a Material Adverse Change.

 

(ll)           Insurance Licenses.  Each Insurance Subsidiary 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 material to the conduct of its business as described in the Time of Sale
Information and the Offering Memorandum; each Insurance Subsidiary has fulfilled
and performed all obligations necessary to maintain such Insurance Licenses;
there is no pending or, to the knowledge of the Company, threatened action,
suit, proceeding or investigation that would reasonably be expected to result in
the revocation, termination or suspension of any Insurance License that would
reasonably be expected to, individually or in the aggregate, result in a
Material Adverse Change; no insurance regulatory agency 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.

 

(mm)       Reinsurance Treaties.  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, except where the failure to be in full force and effect or
where such violation or default would not, individually or in the aggregate, be
reasonably expected to result in a Material Adverse Change. 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, to the knowledge of the Company, none 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
audited consolidated financial statements of the Company included or
incorporated by reference in the Time of Sale Information and the Offering
Memorandum, except where such nonperformance would not reasonably be expected
to, individually or in the aggregate, result in a Material Adverse Change.

 

(nn)         Statutory Financial Statements. The statutory financial statements
of the Insurance Subsidiaries, from which certain data included in the Time of
Sale Information and the Offering Memorandum have been derived, have been
prepared, for each relevant period, in conformity with statutory accounting
principles or practices required or permitted by the appropriate insurance
department of the jurisdiction of each Insurance Subsidiary, as applicable,

 

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applied on a consistent basis throughout the periods involved, except (1) as may
otherwise be indicated therein or in the notes thereto and (2) in the case of
any such financial statements for periods less than a full year, for any normal
year-end adjustments, 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.

 

(oo)         Exchange Act Reports.  The Company is subject to and in full
compliance in all material respects with the reporting requirements of
Section 13 or Section 15(d) of the Exchange Act and the rules and regulations of
the Commission thereunder.

 

(pp)         No Unlawful Payments.  Neither the Company nor any of its
subsidiaries nor, to the knowledge of the Company, any director, officer, agent,
employee or other person associated with or acting on behalf of the Company or
any of its subsidiaries has (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expense relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds;
(iii) violated or is in violation of any provision of the Foreign Corrupt
Practices Act of 1977; or (iv) made any unlawful bribe, rebate, payoff,
influence payment, kickback or other unlawful payment.

 

(qq)         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 subsidiary with respect to the Money Laundering Laws is pending or, to
the knowledge of the Company, threatened.

 

(rr)           Compliance with OFAC.  None of the Company, its subsidiaries or,
to the knowledge of the Company, any director, officer, agent, employee or
affiliate of the Company or any subsidiary 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.

 

(tt)           Rule 144A Eligibility.    The Securities are eligible for resale
pursuant to Rule 144A under the Securities Act and will not be, at the Closing
Date, of the same class as securities listed on a national securities exchange
registered under Section 6 of the Exchange Act, or quoted in a U.S. automated
interdealer quotation system.

 

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4.             Further Agreements of the Company.  The Company covenants and
agrees with each Initial Purchaser that:

 

(a)           Delivery of Copies.  Until the completion of the sale of the
Securities by the Initial Purchaser, the Company will deliver to the Initial
Purchasers as many copies of the Preliminary Offering Memorandum, any other Time
of Sale Information, any Issuer Written Communication and the Offering
Memorandum (including all amendments and supplements thereto) as the
Representative may reasonably request.

 

(b)           Offering Memorandum, Amendments or Supplements.  Before finalizing
the Offering Memorandum or making or distributing any amendment or supplement to
any of the Time of Sale Information or the Offering Memorandum or filing with
the Commission any document that will be incorporated by reference therein, the
Company will furnish to the Representative and counsel for the Initial
Purchasers a copy of the proposed Offering Memorandum or such amendment or
supplement or document to be incorporated by reference therein for review, and
will not distribute any such proposed Offering Memorandum, amendment or
supplement or file any such document with the Commission to which the
Representative reasonably objects.

 

(c)           Additional Written Communications.  Before making, preparing,
using, authorizing, approving or referring to any Issuer Written Communication,
the Company will furnish to the Representative and counsel for the Initial
Purchasers a copy of such written communication for review and will not make,
prepare, use, authorize, approve or refer to any such written communication to
which the Representative reasonably objects.

 

(d)           Notice to the Representative.  The Company will advise the
Representative promptly, and confirm such advice in writing, (i) of the issuance
by any governmental or regulatory authority of any order preventing or
suspending the use of any of the Time of Sale Information, any Issuer Written
Communication or the Offering Memorandum or the initiation or threatening of any
proceeding for that purpose; (ii) of the occurrence of any event at any time
prior to the completion of the initial offering of the Securities as a result of
which any of the Time of Sale Information, any Issuer Written Communication or
the Offering Memorandum as then amended or supplemented would include any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements therein, in the light of the circumstances existing when
such Time of Sale Information, Issuer Written Communication or the Offering
Memorandum is delivered to a purchaser, not misleading; and (iii) of the receipt
by the Company of any notice with respect to any suspension of the qualification
of the Securities for offer and sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and the Company will use its
reasonable best efforts to prevent the issuance of any such order preventing or
suspending the use of any of the Time of Sale Information, any Issuer Written
Communication or the Offering Memorandum or suspending any such qualification of

 

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the Securities and, if any such order is issued, will use its reasonable best
efforts to obtain as soon as possible the withdrawal thereof.

 

(e)           Ongoing Compliance of the Offering Memorandum and Time of Sale
Information.  (1) If at any time prior to the completion of the initial offering
of the Securities (i) any event shall occur or condition shall exist as a result
of which the Offering Memorandum as then amended or supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances existing when the Offering Memorandum is delivered to a purchaser,
not misleading or (ii) it is necessary to amend or supplement the Offering
Memorandum to comply with law, the Company will promptly notify the Initial
Purchasers thereof and forthwith prepare and, subject to paragraph (b) above,
furnish to the Initial Purchasers such amendments or supplements to the Offering
Memorandum (or any document to be filed with the Commission and incorporated by
reference therein) as may be necessary so that the statements in the Offering
Memorandum as so amended or supplemented (or including such document to be
incorporated by reference therein) will not, in the light of the circumstances
existing when the Offering Memorandum is delivered to a purchaser, be misleading
or so that the Offering Memorandum will comply with law and (2) if at any time
prior to the Closing Date (i) any event shall occur or condition shall exist as
a result of which any of the Time of Sale Information as then amended or
supplemented would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading or
(ii) it is necessary to amend or supplement any of the Time of Sale Information
to comply with law, the Company will promptly notify the Initial Purchasers
thereof and forthwith prepare and, subject to paragraph (b) above, furnish to
the Initial Purchasers such amendments or supplements to any of the Time of Sale
Information (or any document to be filed with the Commission and incorporated by
reference therein) as may be necessary so that the statements in any of the Time
of Sale Information as so amended or supplemented will not, in light of the
circumstances under which they were made, be misleading.

 

(f)            Blue Sky Compliance.  The Company will qualify or register (or
obtain exemption from qualifying or registering) the Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions as the
Representative shall reasonably request and will continue such qualifications,
registrations and exemptions in effect so long as required for the offering and
resale of the Securities; provided that the Company shall not be required to
(i) qualify as a foreign corporation or other entity or as a dealer in
securities in any such jurisdiction where it would not otherwise be required to
so qualify, (ii) file any general consent to service of process in any such
jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it
is not otherwise so subject.

 

(g)           Clear Market.  For a period of 60 days after the date hereof, the
Company will not, without the prior written consent of the Representative (which
consent may be withheld or delayed in the Representative’s sole discretion),
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or

 

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warrant for the sale of, lend or otherwise dispose of or transfer, directly or
indirectly, any equity securities of the Company or any securities convertible
into or exercisable or exchangeable for equity securities of the Company, or
file any registration statement under the Securities Act with respect to any of
the foregoing, or (ii) enter into any swap or other arrangement that transfers,
in whole or in part, directly or indirectly, any of the economic consequences of
ownership of equity securities of the Company, whether any such transaction
described in clause (i) or (ii) above is to be settled by delivery of Common
Stock or such other securities, in cash or otherwise. The foregoing sentence
shall not apply to (i) the Securities to be sold hereunder, (ii) any shares of
Common Stock issued by the Company upon the exercise of an option outstanding on
the date hereof and referred to in the Company’s filings with the Commission,
(iii) such issuances of options or grants of restricted stock under the
Company’s stock option and incentive plans as described in the Company’s filings
with the Commission, (iv) the issuance by the Company of shares of Common Stock
pursuant to its NMO Deferred Compensation Plans as described in the Company’s
filings with the Commission incorporated by reference into the Preliminary
Offering Memorandum and the Offering Memorandum, or any future NMO Deferred
Compensation Plan, provided that the aggregate number of Common Stock issued
under clause (iv) shall not exceed 250,000 shares of Common Stock during the
60-day restricted period and (v) the filing of a registration statement for up
to 2,500,000 shares of Common Stock issuable upon the exercise of stock options
granted under the Company’s Independent Insurance Agent Stock Option Plan as
described in the Company’s filings with the Commission incorporated by reference
into the Preliminary Offering Memorandum and the Offering Memorandum, or any
future Independent Insurance Agent Stock Option Plan, provided that no shares of
Common Stock shall be issued under clause (v) during the 60-day restricted
period.

 

(h)           Use of Proceeds.  The Company will apply the net proceeds from the
sale of the Securities as described in the Time of Sale Information and the
Offering Memorandum under the heading “Use of Proceeds”.

 

(i)            No Stabilization.  The Company will not take, directly or
indirectly, any action designed to or that could reasonably be expected to cause
or result in any stabilization or manipulation of the price of the Securities
and will not take any action prohibited by Regulation M under the Exchange Act
in connection with the distribution of the Securities contemplated hereby.

 

(j)            Supplying Information.  While the Securities remain outstanding
and are “restricted securities” within the meaning of Rule 144(a)(3) under the
Securities Act, the Company will, during any period in which the Company is not
subject to and in compliance with Section 13 or 15(d) of the Exchange Act,
furnish to holders of the Securities, prospective purchasers of the Securities
designated by such holders and securities analysts, in each case upon request,
the information required to be delivered pursuant to Rule 144A(d)(4) under the
Securities Act.

 

(k)           DTC.  The Company will assist the Initial Purchasers in arranging
for the Securities to be eligible for clearance and settlement through DTC.

 

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(l)            No Resales by the Company.  During the period from the Closing
Date until one year after the Closing Date or the Option Closing Date, if
applicable, the Company will not, and will not permit any of its affiliates (as
defined in Rule 144 under the Securities Act) to, resell any of the Securities
that have been acquired by any of them, except for Securities purchased by the
Company or any of its affiliates and resold in a transaction registered under
the Securities Act.

 

(m)          No Integration.  Neither the Company nor any of its affiliates (as
defined in Rule 501(b) of Regulation D) will, directly or through any agent,
sell, offer for sale, solicit offers to buy or otherwise negotiate in respect
of, any security (as defined in the Securities Act), that is or will be
integrated with the sale of the Securities in a manner that would require
registration of the Securities under the Securities Act.

 

(n)           No General Solicitation or Directed Selling Efforts.  None of the
Company or any of its affiliates (as defined in Rule 501(b) of Regulation D) (or
any other person acting on its or their behalf (other than the Initial
Purchasers, as to which no covenant is given) will (i) solicit offers for, or
offer or sell, the Securities by means of any form of general solicitation or
general advertising within the meaning of Rule 502(c) of Regulation D or in any
manner involving a public offering within the meaning of Section 4(2) of the
Securities Act or (ii) engage in any directed selling efforts within the meaning
of Regulation S, and all such persons will comply with the offering restrictions
requirement of Regulation S.

 

5.             Certain Agreements of the Initial Purchasers.  Each Initial
Purchaser hereby represents and agrees that it has not and will not use,
authorize use of, refer to, or participate in the planning for use of, any
written communication that constitutes an offer to sell or the solicitation of
an offer to buy the Securities other than (i) the Preliminary Offering
Memorandum and the Offering Memorandum, (ii) a written communication that
contains no “issuer information” (as defined in Rule 433(h)(2) under the
Securities Act) that was not included (including through incorporation by
reference) in the Preliminary Offering Memorandum or the Offering Memorandum,
(iii) any written communication listed on Annex B or prepared pursuant to
Section 4(c) above (including any electronic road show), (iv) any written
communication prepared by such Initial Purchaser and approved by the Company in
advance in writing or (v) any written communication solely relating to or that
only contains the terms of the Securities and/or other information that was
included (including through incorporation by reference) in the Preliminary
Offering Memorandum or the Offering Memorandum.

 

6.             Conditions of Initial Purchasers’ Obligations.  The obligation of
each Initial Purchaser to purchase the Underwritten Securities on the Closing
Date or the Option Securities on the Additional Closing Date, as the case may
be, as provided herein is subject to the performance by the Company of its
covenants and other obligations hereunder and to the following additional
conditions:

 

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(a)           Representations and Warranties.  The representations and
warranties of the Company contained herein shall be true and correct on the date
hereof and on and as of the Closing Date or the Additional Closing Date, as the
case may be; and the statements of the Company and its officers made in any
certificates delivered pursuant to this Agreement shall be true and correct on
and as of the Closing Date or the Additional Closing Date, as the case may be.

 

(b)           No Downgrade.  Subsequent to the earlier of (A) the Time of Sale
and (B) the execution and delivery of this Agreement, (i) no downgrading shall
have occurred in the rating accorded any securities or preferred stock of or
guaranteed by the Company or any of its subsidiaries by any “nationally
recognized statistical rating organization”, as such term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act and (ii) no
such organization shall have publicly announced that it has under surveillance
or review, or has changed its outlook with respect to, its rating of any
securities or preferred stock of or guaranteed by the Company or any of its
subsidiaries (other than an announcement with positive implications of a
possible upgrading).

 

(c)           No Material Adverse Change.  No event or condition of a type
described in Section 3(g) hereof shall have occurred or shall exist, which event
or condition is not described in the Time of Sale Information (excluding any
amendment or supplement thereto) and the Offering Memorandum (excluding any
amendment or supplement thereto) and the effect of which in the judgment of the
Representative makes it impracticable or inadvisable to proceed with the
offering, sale or delivery of the Securities on the Closing Date or the
Additional Closing Date, as the case may be, on the terms and in the manner
contemplated by this Agreement, the Time of Sale Information and the Offering
Memorandum.

 

(d)           Officer’s Certificate.  The Representative shall have received on
and as of the Closing Date or the Additional Closing Date, as the case may be, a
certificate of the chief financial officer or chief accounting officer or
another senior executive officer of the Company who is satisfactory to the
Representative (i) confirming that such officer has carefully reviewed the Time
of Sale Information and the Offering Memorandum and, to the knowledge of such
officer, the representations set forth in Sections 3(a) and 3(b) hereof are true
and correct, (ii) confirming that the other representations and warranties of
the Company in this Agreement are true and correct and that the Company has
complied with all agreements and satisfied all conditions on its part to be
performed or satisfied hereunder at or prior to such Closing Date and (iii) to
the effect set forth in paragraphs (b) and (c) above.

 

(e)           Comfort Letters.  The Representative shall have received from KPMG
LLP, “comfort” letters dated, respectively, as of the date of this Agreement and
on the Closing Date or the Additional Closing Date, as the case may be,
addressed to the Representative and in form and substance satisfactory to the
Representative.

 

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(f)            Opinion and 10b-5 Statement of Counsel for the Company.  Skadden,
Arps, Slate, Meagher & Flom LLP, counsel for the Company, shall have furnished
to the Representative, at the request of the Company, their written opinion and
10b-5 statement, dated the Closing Date or the Additional Closing Date, as the
case may be, and addressed to the Initial Purchasers, in form and substance
reasonably satisfactory to the Representative, to the effect set forth in Annex
A-1 and Annex A-2 hereto.

 

(g)           Opinion of In-house Counsel for the Company. Marla Lacey,
Associate General Counsel of the Company, shall have furnished to the
Representative, at the request of the Company, her written opinion, dated the
Closing Date or the Additional Closing Date, as the case may be, and addressed
to the Initial Purchasers, in form and substance reasonably satisfactory to the
Representative, to the effect set forth in Annex A-3 hereto.

 

(h)           Opinion and 10b-5 Statement of Counsel for the Initial
Purchasers.  The Representative shall have received on and as of the Closing
Date or the Additional Closing Date, as the case may be, an opinion and 10b-5
statement of Davis Polk & Wardwell LLP, counsel for the Initial Purchasers, with
respect to such matters as the Representative may reasonably request, and such
counsel shall have received such documents and information as they may
reasonably request to enable them to pass upon such matters.

 

(i)            No Legal Impediment to Issuance.  No action shall have been taken
and no statute, rule, regulation or order shall have been enacted, adopted or
issued by any federal, state or foreign governmental or regulatory authority
that would, as of the Closing Date or the Additional Closing Date, as the case
may be, prevent the issuance or sale of the Securities; and no injunction or
order of any federal, state or foreign court shall have been issued that would,
as of the Closing Date or the Additional Closing Date, as the case may be,
prevent the issuance or sale of the Securities.

 

(j)            Good Standing.  The Representative shall have received on and as
of the Closing Date or the Additional Closing Date, as the case may be,
satisfactory evidence of the good standing of the Company and its subsidiaries
in their respective jurisdictions of organization and the Company’s good
standing as a foreign entity in such other jurisdictions as the Representative
may reasonably request, in each case in writing or any standard form of
telecommunication from the appropriate governmental authorities of such
jurisdictions.

 

(k)           DTC.  The Securities shall be eligible for clearance and
settlement through DTC.

 

(l)            Lock-up Agreements.  The “lock-up” agreements, each substantially
in the form of Exhibit A hereto, between you and the individuals listed on
Exhibit B relating to sales and certain other dispositions of shares of Common
Stock or certain other securities, delivered to you on or before the date
hereof, shall be in full force and effect on the Closing Date or Additional
Closing Date, as the case may be.

 

21

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(m)          Additional Documents.  On or prior to the Closing Date or the
Additional Closing Date, as the case may be, the Company shall have furnished to
the Representative such further certificates and documents as the Representative
may reasonably request.

 

All opinions, letters, certificates and evidence mentioned above or elsewhere in
this Agreement shall be deemed to be in compliance with the provisions hereof
only if they are in form and substance reasonably satisfactory to counsel for
the Initial Purchasers.

 

7.             Indemnification and Contribution.

 

(a)           Indemnification of the Initial Purchasers.  The Company agrees to
indemnify and hold harmless each Initial Purchaser, its affiliates, directors
and officers and each person, if any, who controls such Initial Purchaser within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act, from and against any and all losses, claims, damages and liabilities
(including, without limitation, reasonable legal fees and other expenses
incurred in connection with any suit, action or proceeding or any claim
asserted, as such fees and expenses are incurred), joint or several, that arise
out of, or are based upon, any untrue statement or alleged untrue statement of a
material fact contained in the Preliminary Offering Memorandum, any of the other
Time of Sale Information, any Issuer Written Communication or the Offering
Memorandum (or any amendment or supplement thereto) or any omission or alleged
omission to state therein a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading, in each case except insofar as such losses, claims, damages or
liabilities arise out of, or are based upon, any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with any information relating to any Initial Purchaser furnished to the Company
in writing by such Initial Purchaser through the Representative expressly for
use therein, it being understood and agreed that the only such information
furnished by any Initial Purchaser consists of the information described as such
in subsection (b) below.

 

(b)           Indemnification of the Company.  Each Initial Purchaser agrees,
severally and not jointly, to indemnify and hold harmless the Company, its
directors, its officers and each person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act to the same extent as the indemnity set forth in paragraph (a) above, but
only with respect to any losses, claims, damages or liabilities that arise out
of, or are based upon, any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with any
information relating to such Initial Purchaser furnished to the Company in
writing by such Initial Purchaser through the Representative expressly for use
in the Preliminary Offering Memorandum, any of the other Time of Sale
Information, any Issuer Written Communication or the Offering Memorandum (or any
amendment or supplement thereto), it being understood and agreed upon that the
only such information furnished by any Initial Purchaser consists of the
following information in the Preliminary Offering Memorandum and the Offering
Memorandum furnished on behalf of each Initial Purchaser: the eighth and

 

22

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eleventh paragraphs under the caption “Plan of Distribution” of the Preliminary
Offering Memorandum and the Offering Memorandum.

 

(c)           Notice and Procedures.  If any suit, action, proceeding (including
any governmental or regulatory investigation), claim or demand shall be brought
or asserted against any person in respect of which indemnification may be sought
pursuant to either paragraph (a) or (b) above, such person (the “Indemnified
Person”) shall promptly notify the person against whom such indemnification may
be sought (the “Indemnifying Person”) in writing; provided that the failure to
notify the Indemnifying Person shall not relieve it from any liability that it
may have under paragraph (a) or (b) above except to the extent that it has been
materially prejudiced (through the forfeiture of substantive rights or defenses)
by such failure; and provided, further, that the failure to notify the
Indemnifying Person shall not relieve it from any liability that it may have to
an Indemnified Person otherwise than under paragraph (a) or (b) above.  If any
such proceeding shall be brought or asserted against an Indemnified Person and
it shall have notified the Indemnifying Person thereof, the Indemnifying Person
shall retain counsel reasonably satisfactory to the Indemnified Person (who
shall not, without the consent of the Indemnified Person, be counsel to the
Indemnifying Person) to represent the Indemnified Person in such proceeding and
shall pay the fees and expenses of such counsel related to such proceeding, as
incurred.  In any such proceeding, any Indemnified Person shall have the right
to retain its own counsel, but the fees and expenses of such counsel shall be at
the expense of such Indemnified Person unless (i) the Indemnifying Person and
the Indemnified Person shall have mutually agreed to the contrary; (ii) the
Indemnifying Person has failed within a reasonable time to retain counsel
reasonably satisfactory to the Indemnified Person; (iii) the Indemnified Person
shall have reasonably concluded that there may be legal defenses available to it
that are different from or in addition to those available to the Indemnifying
Person; or (iv) the named parties in any such proceeding (including any
impleaded parties) include both the Indemnifying Person and the Indemnified
Person and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interest between them.  It is
understood and agreed that the Indemnifying Person shall not, in connection with
any proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be paid or reimbursed as they are incurred.  Any such separate firm for any
Initial Purchaser, its affiliates, directors and officers and any control
persons of such Initial Purchaser shall be designated in writing by J.P. Morgan
Securities LLC and any such separate firm for the Company, its directors, its
officers and any control persons of the Company shall be designated in writing
by the Company.  The Indemnifying Person shall not be liable for any settlement
of any proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify each Indemnified Person from and against any loss or
liability by reason of such settlement or judgment.  Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have requested
that an Indemnifying Person reimburse the Indemnified Person for fees and
expenses of counsel as contemplated by this paragraph, the Indemnifying Person
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered

 

23

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into more than 30 days after receipt by the Indemnifying Person of such request
and (ii) the Indemnifying Person shall not have reimbursed the Indemnified
Person in accordance with such request prior to the date of such settlement.  No
Indemnifying Person shall, without the written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party and
indemnification could have been sought hereunder by such Indemnified Person,
unless such settlement (x) includes an unconditional release of such Indemnified
Person, in form and substance reasonably satisfactory to such Indemnified
Person, from all liability on claims that are the subject matter of such
proceeding and (y) does not include any statement as to or any admission of
fault, culpability or a failure to act by or on behalf of any Indemnified
Person.

 

(d)           Contribution.  If the indemnification provided for in paragraphs
(a) and (b) above is unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred to therein, then
each Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Initial Purchasers,
on the other, from the offering of the Securities 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) but also the relative fault of the Company, on the one hand, and the Initial
Purchasers, on the other, in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations.  The relative benefits received by the
Company, on the one hand, and the Initial Purchasers, on the other, shall be
deemed to be in the same respective proportions as the net proceeds (before
deducting expenses) received by the Company from the sale of the Securities and
the total discounts and commissions received by the Initial Purchasers in
connection therewith, as provided in this Agreement, bear to the aggregate
offering price of the Securities.  The relative fault of the Company, on the one
hand, and the Initial Purchasers, on the other, shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or by the Initial Purchasers and
the parties’ relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.

 

(e)           Limitation on Liability.  The Company and the Initial Purchasers
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 Initial Purchasers
were treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations referred
to in paragraph (d) above.  The amount paid or payable by an Indemnified Person
as a result of the losses, claims, damages and liabilities referred to in
paragraph (d) above shall be deemed to include, subject to the limitations set
forth above, any reasonable legal or other expenses incurred by such Indemnified
Person in connection with any such action or claim.  Notwithstanding the
provisions of this Section 7, in no event shall an Initial Purchaser be required
to contribute any

 

24

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amount in excess of the amount by which the total discounts and commissions
received by such Initial Purchaser with respect to the offering of the
Securities exceeds the amount of any damages that such Initial Purchaser has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.  The Initial Purchasers’ obligations to contribute
pursuant to this Section 7 are several in proportion to their respective
purchase obligations hereunder and not joint.

 

(f)            Non-Exclusive Remedies.  The remedies provided for in this
Section 7 are not exclusive and shall not limit any rights or remedies which may
otherwise be available to any Indemnified Person at law or in equity.

 

8.             Effectiveness of Agreement.  This Agreement shall become
effective upon the execution and delivery hereof by the parties hereto.

 

9.             Termination.  This Agreement may be terminated in the absolute
discretion of the Representative, by notice to the Company, if after the
execution and delivery of this Agreement and prior to the Closing Date or, in
the case of the Option Securities, prior to the Additional Closing Date
(i) trading generally shall have been suspended or materially limited on or by
any of the New York Stock Exchange or the Nasdaq Global Market; (ii) trading of
any securities issued or guaranteed by the Company shall have been suspended on
any exchange or in any over-the-counter market; (iii) a general moratorium on
commercial banking activities shall have been declared by federal or New York
State authorities; or (iv) there shall have occurred any outbreak or escalation
of hostilities or any change in financial markets or any calamity or crisis,
either within or outside the United States, that, in the judgment of the
Representative, is material and adverse and makes it impracticable or
inadvisable to proceed with the offering, sale or delivery of the Securities on
the Closing Date or the Additional Closing Date, as the case may be, on the
terms and in the manner contemplated by this Agreement, the Time of Sale
Information and the Offering Memorandum.

 

10.           Defaulting Initial Purchaser.  (a)  If, on the Closing Date or the
Additional Closing Date, as the case may be, any Initial Purchaser defaults on
its obligation to purchase the Securities that it has agreed to purchase
hereunder on such date, the non-defaulting Initial Purchasers may in their
discretion arrange for the purchase of such Securities by other persons
satisfactory to the Company on the terms contained in this Agreement.  If,
within 36 hours after any such default by any Initial Purchaser, the
non-defaulting Initial Purchasers do not arrange for the purchase of such
Securities, then the Company shall be entitled to a further period of 36 hours
within which to procure other persons satisfactory to the non-defaulting Initial
Purchasers to purchase such Securities on such terms.  If other persons become
obligated or agree to purchase the Securities of a defaulting Initial Purchaser,
either the non-defaulting Initial Purchasers or the Company may postpone the
Closing Date or the Additional Closing Date, as the case may be, for up to five
full business days in order to effect any changes that in the opinion of counsel
for the Company or

 

25

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counsel for the Initial Purchasers may be necessary in the Time of Sale
Information, the Offering Memorandum or in any other document or arrangement,
and the Company agrees to promptly prepare any amendment or supplement to the
Time of Sale Information or the Offering Memorandum that effects any such
changes.  As used in this Agreement, the term “Initial Purchaser” includes, for
all purposes of this Agreement unless the context otherwise requires, any person
not listed in Schedule 1 hereto that, pursuant to this Section 10, purchases
Securities that a defaulting Initial Purchaser agreed but failed to purchase.

 

(b)           If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in paragraph
(a) above, the aggregate number of Securities that remain unpurchased on the
Closing Date or the Additional Closing Date, as the case may be, does not exceed
one-eleventh of the aggregate number of Securities to be purchased on such date,
then the Company shall have the right to require each non-defaulting Initial
Purchaser to purchase the number of Securities that such Initial Purchaser
agreed to purchase hereunder on such date plus such Initial Purchaser’s pro rata
share (based on the number of Securities that such Initial Purchaser agreed to
purchase on such date) of the Securities of such defaulting Initial Purchaser or
Initial Purchasers for which such arrangements have not been made.

 

(c)           If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Initial Purchaser or Initial Purchasers by the
non-defaulting Initial Purchasers and the Company as provided in paragraph
(a) above, the aggregate number of Securities that remain unpurchased on the
Closing Date or the Additional Closing Date, as the case may be, exceeds
one-eleventh of the aggregate amount of Securities to be purchased on such date,
or if the Company shall not exercise the right described in paragraph (b) above,
then this Agreement or, with respect to any Additional Closing Date, the
obligation of the Initial Purchasers to purchase Securities on the Additional
Closing Date, as the case may be, shall terminate without liability on the part
of the non-defaulting Initial Purchasers.  Any termination of this Agreement
pursuant to this Section 10 shall be without liability on the part of the
Company, except that the Company will continue to be liable for the payment of
expenses as set forth in Section 11 hereof and except that the provisions of
Section 7 hereof shall not terminate and shall remain in effect.

 

(d)           Nothing contained herein shall relieve a defaulting Initial
Purchaser of any liability it may have to the Company or any non-defaulting
Initial Purchaser for damages caused by its default.

 

11.           Payment of Expenses.  (a)  Whether or not the transactions
contemplated by this Agreement are consummated or this Agreement is terminated,
the Company will pay or cause to be paid all costs and expenses incident to the
performance of its obligations hereunder, including without limitation, (i) the
costs incident to the authorization, issuance, sale, preparation and delivery of
the Securities and any taxes payable in that connection; (ii) the costs incident
to the preparation and printing of the Preliminary Offering Memorandum, any
other Time of Sale Information, any Issuer Written Communication and the
Offering Memorandum (including any

 

26

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amendments and supplements thereto) and the distribution thereof; (iii) the
costs of reproducing and distributing each of the Transaction Documents;
(iv) the fees and expenses of the Company’s counsel and independent accountants;
(v) the fees and expenses incurred in connection with the registration or
qualification and determination of eligibility for investment of the Securities
under the laws of such jurisdictions as the Representative may designate and the
preparation, printing and distribution of a Blue Sky Memorandum (including the
related fees and expenses of counsel for the Initial Purchasers); (vi) any fees
charged by rating agencies for rating the Securities, if applicable; (vii) the
fees and expenses of the Trustee and any paying agent (including related
reasonable fees and expenses of any counsel to such parties); (viii) all
expenses and application fees incurred in connection with the application for
the inclusion of the Securities on the PORTAL Market and the approval of the
Securities for book-entry transfer by DTC; and (ix) all expenses incurred by the
Company in connection with any “road show” presentation to potential investors.

 

(b)           If (i) this Agreement is terminated pursuant to Section 9,
(ii) the Company for any reason fails to tender the Securities for delivery to
the Initial Purchasers or (iii) the Initial Purchasers decline to purchase the
Securities for any reason permitted under this Agreement, the Company agrees to
reimburse the Initial Purchasers for all out-of-pocket costs and expenses
(including the fees and expenses of their counsel) reasonably incurred by the
Initial Purchasers in connection with this Agreement and the offering
contemplated hereby.

 

12.           Persons Entitled to Benefit of Agreement.  This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and the officers and directors and any controlling persons
referred to in Section 7 hereof.  Nothing in this Agreement is intended or shall
be construed to give any other person any legal or equitable right, remedy or
claim under or in respect of this Agreement or any provision contained herein. 
No purchaser of Securities from any Initial Purchaser shall be deemed to be a
successor merely by reason of such purchase.

 

13.           Survival.  The respective indemnities, rights of contribution,
representations, warranties and agreements of the Company and the Initial
Purchasers contained in this Agreement or made by or on behalf of the Company or
the Initial Purchasers pursuant to this Agreement or any certificate delivered
pursuant hereto shall survive the delivery of and payment for the Securities and
shall remain in full force and effect, regardless of any termination of this
Agreement or any investigation made by or on behalf of the Company or the
Initial Purchasers.

 

14.           Certain Defined Terms.  For purposes of this Agreement, (a) except
where otherwise expressly provided, the term “affiliate” has the meaning set
forth in Rule 405 under the Securities Act; (b) the term “business day” means
any day other than a day on which banks are permitted or required to be closed
in New York City; and (c) the term “subsidiary” has the meaning set forth in
Rule 405 under the Securities Act.

 

15.           Miscellaneous.  (a)  Authority of the Representative.  Any action
by the Initial Purchasers hereunder may be taken by J.P. Morgan Securities LLC
on behalf of the Initial

 

27

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Purchasers, and any such action taken by J.P. Morgan Securities LLC shall be
binding upon the Initial Purchasers.

 

(b)           Notices.  All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
and confirmed by any standard form of telecommunication.  Notices to the Initial
Purchasers shall be given to the Representative c/o J.P. Morgan Securities LLC,
383 Madison Avenue, New York, New York 10179 (fax: (212) 622-8358); Attention:
Equity Syndicate Desk.  Notices to the Company shall be given to it at 6000
Westown Parkway, West Des Moines, Iowa, 50266, (fax: (515) 221-0744); Attention:
Wendy C. Waugaman; with a copy to Skadden, Arps, Slate, Meagher & Flom LLP, 155
North Wacker Drive, Chicago, Illinois 60606-1720, Attention: William R. Kunkel
(facsimile: (312) 407-0411)

 

(c)           Governing Law.  This Agreement and any claim, controversy or
dispute arising under or related to this Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

 

(d)           Counterparts.  This Agreement may be signed in counterparts (which
may include counterparts delivered by any standard form of telecommunication),
each of which shall be an original and all of which together shall constitute
one and the same instrument.

 

(e)           Amendments or Waivers.  No amendment or waiver of any provision of
this Agreement, nor any consent or approval to any departure therefrom, shall in
any event be effective unless the same shall be in writing and signed by the
parties hereto.

 

(f)            Headings.  The headings herein are included for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.

 

(g)           Xtract Research LLC.  The Company hereby agrees that the Initial
Purchasers may provide copies of the Preliminary Offering Memorandum and the
Final Offering Memorandum relating to the offering of the Securities and any
other agreements or documents relating thereto, including, without limitation,
trust indentures, to Xtract Research LLC (“Xtract”) following the completion of
the offering for inclusion in an online research service sponsored by Xtract,
access to which is restricted to “qualified institutional buyers” as defined in
Rule 144A under the Securities Act.

 

28

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If the foregoing is in accordance with your understanding, please indicate your
acceptance of this Agreement by signing in the space provided below.

 

 

Very truly yours,

 

 

 

AMERICAN EQUITY INVESTMENT LIFE
HOLDING COMPANY

 

 

 

 

 

By

/s/ John M. Matovina

 

 

Name: John M. Matovina

 

 

Title: Chief Financial Officer and Treasurer

 

29

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Accepted: September 16, 2010

 

J.P. MORGAN SECURITIES LLC

 

For itself and on behalf of the

several Initial Purchasers listed

in Schedule 1 hereto.

 

 

By

/s/ Ranbeer Bhatia

 

 

Authorized Signatory

 

 

30

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Schedule 1

 

Initial Purchaser

 

Principal Amount

 

 

 

 

 

J.P. Morgan Securities LLC

 

$

136,000,000

 

KeyBanc Capital Markets Inc.

 

$

10,200,000

 

SunTrust Robinson Humphrey, Inc.

 

$

8,500,000

 

FBR Capital Markets & Co.

 

$

6,800,000

 

Macquarie Capital (USA) Inc.

 

$

6,800,000

 

Madison Williams and Company LLC

 

$

1,700,000

 

 

 

 

 

 

Total

 

$

170,000,000

 

 

--------------------------------------------------------------------------------

 

Annex A-1

 

FORM OF OPINION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP & AFFILIATES,
SPECIAL COUNSEL TO THE COMPANY

 

(1)           The statements in the Time of Sale Information and the Offering
Memorandum under the caption “Plan of Distribution”, insofar as such statements
purport to summarize certain provisions of the Purchase Agreement, fairly
summarize such provisions in all material respects.

 

(2)           No Governmental Approval which has not been obtained or taken and
is not in full force and effect is required to authorize, or is required for the
execution or delivery of the Purchase Agreement by the Company or the
consummation by the Company of the transactions contemplated thereby.

 

(3)           The Company is not and, solely after giving effect to the offering
and sale of the Securities pursuant to the Purchase Agreement and the
application of the proceeds thereof as described in the Time of Sale Information
and the Offering Memorandum, will not be, an “investment company” as such term
is defined in the Investment Company Act of 1940, as amended.

 

(4)           American Equity Life of New York has been duly organized and
validly exists in good standing under the laws of the State of New York.
American Equity Life of New York has the corporate power and authority to own,
lease and operate its properties and to conduct its business.

 

(5)           The Indenture is a valid and binding agreement of the Company,
enforceable against the Company in accordance with its terms, except to the
extent that enforcement thereof may be subject to the Enforceability Exceptions.

 

(6)           The Securities, when duly authenticated by the Trustee and issued
and delivered by the Company against payment therefor in accordance with the
terms of the Indenture will constitute valid and binding obligations of the
Company entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, except to the extent that enforcement
thereof may be subject to the Enforceability Exceptions.

 

(7)           Assuming (i) the accuracy of the representations and warranties of
the Company set forth in Section 3 of the Purchase Agreement (ii) the due
performance by the Company of the covenants and agreements set forth in
Section 4 of the Purchase Agreement (iii) the accuracy of the representations
of, and due performance of the agreements by, the Initial Purchasers set forth
in Section 5 of the Purchase Agreement and (iv) the Initial Purchasers’
compliance with the offering and transfer procedures and restrictions described
in the Offering

 

--------------------------------------------------------------------------------

 

Memorandum, the offer, sale and delivery of the Securities to the Initial
Purchasers in the manner contemplated by the Purchase Agreement, the Time of
Sale Information and the Offering Memorandum and the initial resale of the
Securities by the Initial Purchasers in the manner contemplated in the Purchase
Agreement, Time of Sale Information and Offering Memorandum do not require
registration under the Securities Act, it being understood that we do not
express any opinion as to the Common Stock issuable upon conversion of any
Security or any subsequent reoffer or resale of any Security.

 

For purposes of the foregoing, (i) “Applicable Laws” means those laws, rules and
regulations of the State of New York and those federal laws, rules and
regulations of the United States of America, in each case that, in our
experience, are normally applicable to transactions of the type contemplated by
the Purchase Agreement and the other Transaction Documents (other than the
United States federal securities laws, state securities or blue sky laws,
antifraud laws and the rules and regulations of the Financial Industry
Regulatory Authority, Inc.), but without our having made any special
investigation as to the applicability of any specific law, rule or regulation;
(ii) “Governmental Authorities” means any court, regulatory body, administrative
agency or governmental body of the State of New York or the United States of
America having jurisdiction over the Company under Applicable Laws; and
(iii) “Governmental Approval” means any consent, approval, license,
authorization or validation of, or filing, qualification or registration with,
any Governmental Authority required to be made or obtained by the Company
pursuant to Applicable Laws, other than any consent, approval, license,
authorization, validation, filing, qualification or registration that may have
become applicable as a result of the involvement of any party (other than the
Company) in the transactions contemplated by the Purchase Agreement and the
other Transaction Documents or because of such party’s legal or regulatory
status or because of any other facts specifically pertaining to such party.

 

In addition, such counsel shall provide a letter, substantially to the effect
that no facts have come to the attention of such counsel that have caused such
counsel to believe that (A) the Time of Sale Information, at the Time of Sale,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or (B) the Offering Memorandum, as of its date and as of the
Closing Date (or the Additional Closing Date, as the case may be), contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading (except that in
each case such counsel need not express any view as to the financial statements,
schedules and other financial information included or incorporated by reference
therein).

 

--------------------------------------------------------------------------------

 

Annex A-2

 

FORM OF OPINION OF SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP & AFFILIATES,
SPECIAL TAX COUNSEL TO THE COMPANY

 

(1) Under current U.S. federal income tax law, although the discussions set
forth in the Time of Sale Information and the Offering Memorandum under the
heading “Certain United States Federal Income Tax Considerations” does not
purport to discuss all possible U.S. federal income tax consequences of the
purchase, ownership or disposition of the Securities, such discussion
constitutes, in all material respects, a fair and accurate summary of the U.S.
federal income tax consequences that are anticipated to be material to holders
who purchase the Securities pursuant to the Offering Memorandum, subject to the
qualifications set forth in such discussion.

 

--------------------------------------------------------------------------------

 

Annex A-3

 

FORM OF OPINION OF MARLA LACEY,

ASSOCIATE GENERAL COUNSEL OF THE COMPANY

 

(1)           The Company has been duly incorporated and validly exists in good
standing under the laws of the State of Iowa.

 

(2)           To the best of my knowledge, the Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure so to qualify or to be in good standing could not reasonably be expected
to result in a Material Adverse Change.

 

(3)           The Company has the corporate power and authority to own, lease
and operate its properties and to conduct its business as described in the Time
of Sale Information and the Offering Memorandum and to execute and deliver each
of the Transaction Documents and to consummate the transactions contemplated
thereby.

 

(4)           American Equity Life has been duly incorporated and validly exists
in good standing under the laws of the State of Iowa. American Equity Life has
the corporate power and authority to own, lease and operate its properties and
to conduct its business.

 

(5)           Eagle Life has been duly incorporated and validly exists in good
standing under the laws of the State of Iowa. Eagle Life has the corporate power
and authority to own, lease and operate its properties and to conduct its
business.

 

(6)           To the best of my knowledge, each Significant Subsidiary is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason
of the ownership or leasing of property or the conduct of business, except where
the failure so to qualify or to be in good standing would not reasonably be
expected to result in a Material Adverse Change.

 

(7)           The Company has an authorized capitalization as set forth in the
Time of Sale Information and the Offering Memorandum. The outstanding shares of
capital stock of the Company have been duly authorized and are validly issued,
fully paid and non-assessable and free and clear of any preemptive or similar
rights arising under the laws of the State of Iowa, the Articles of
Incorporation or Bylaws of the Company or any Applicable Contract.

 

(8)           The outstanding shares of capital stock of each of the
Subsidiaries have been duly authorized and are validly issued, fully paid and
non-assessable and, to my knowledge, are owned by the Company or another
Subsidiary free and clear of all liens, encumbrances and equities and claims,
except those that are immaterial to the Company and the Subsidiaries taken as a
whole.

 

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(9)           Each of the Transaction Documents have been duly authorized,
executed and delivered on behalf of the Company. The performance by the Company
of the Purchase Agreement has been duly authorized by all necessary corporate
action of the Company.

 

(10)         Each of the Transaction Documents conform in all material respects
to the description contained in the Time of Sale Information and the Offering
Memorandum.

 

(11)         The documents incorporated by reference in the Time of Sale
Information and the Offering Memorandum (other than the financial statements and
related schedules therein, as to which I express no opinion), when they were
filed with the Commission, complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations of the Commission
thereunder; and I have no reason to believe that any of such documents, when
such documents were so filed, contained any untrue statement of a material fact
or omitted to state a material fact necessary in order to make the statement
therein, in light of the circumstances under which they were made when such
documents were so filed, not misleading.

 

(12)         The execution and delivery by the Company of each of the
Transaction Documents and the consummation by the Company of the transactions
contemplated thereby, including the issuance and sale of the Securities to the
Initial Purchasers and the issuance of the Underlying Shares upon any conversion
of the Securities, will not (i) constitute a violation of, or a breach or
default under, the terms of any Applicable Contract or (ii) violate or conflict
with, or result in any contravention of, any Applicable Law or any Applicable
Order.

 

(13)         The Underlying Shares have been duly authorized and reserved by the
Company for issuance upon the conversion of the Securities pursuant to the terms
of the Securities and, when issued in connection with such conversion in
accordance with the terms of the Securities, will be validly issued, fully paid
and non-assessable, and the issuance of the Underlying Shares will not be
subject to any preemptive, resale, participation, rights of first refusal or
other similar rights.

 

(14)         There are no legal or governmental proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or to
which any property of the Company or any of its subsidiaries is subject that
would have been required to be disclosed pursuant to Item 103 of Regulation S-K
of the Rules and Regulations that are not so disclosed.

 

(15)         To the best of my knowledge, each Insurance Subsidiary holds such
Insurance Licenses as are material to the conduct of its business; to the best
of my knowledge, there is no pending or threatened action, suit, proceeding or
investigation that would reasonably be expected to result in the revocation,
termination or suspension of any such Insurance License that would reasonably be
expected to, individually or in the aggregate, result in a Material Adverse
Change on the Company and its subsidiaries, taken as a whole; and except as
disclosed in the Time of Sale Information and the Offering Memorandum, to the
best of my knowledge, no insurance regulatory agency or body has issued, or
commenced any proceeding for the issuance

 

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of, any order or decree impairing, restricting or prohibiting the payment of
dividends by any Insurance Subsidiary to its parent.

 

(16)         Neither the Company nor any of the subsidiaries is or, with the
giving of notice or lapse of time or both, will be, in violation of or in
default under (i) its certificate of incorporation or bylaws or similar
organizational documents or (ii) any Applicable Contract and, solely with
respect to this clause (ii), which violation or default would have a Material
Adverse Change.

 

For the purposes of the foregoing, (i) “Applicable Contracts” means those
indentures or other agreements or instruments known to me and to which the
Company or any Significant Subsidiary is a party or by which the Company or any
Significant Subsidiary is bound or to which any of their respective properties
or assets are subject; (ii) “Applicable Laws” means those laws, rules and
regulations of the State of Iowa, including the insurance laws, rules and
regulations of the State of Iowa, that, in my experience, are normally
applicable to transactions of the type contemplated by the Transaction Documents
(other than state securities or blue sky laws and antifraud laws), but without
my having made any special investigation as to the applicability of any specific
law, rule or regulation; and (iii) “Applicable Orders” means those judgments,
orders or decrees known to me to be applicable to the Company.

 

In addition, such counsel shall provide a statement, substantially to the effect
that no facts have come to the attention of such counsel that have caused such
counsel to believe that (A) the Time of Sale Information, at the Time of Sale,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading or (B) the Offering Memorandum, as of its date and as of the
Closing Date (or the Additional Closing Date, as the case may be), contained or
contains an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading (except that in
each case such counsel need not express any view as to the financial statements,
schedules and other financial information included or incorporated by reference
therein).

 

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Annex B

 

a.  Time of Sale Information

 

Term sheet containing the terms of the Securities, substantially in the form of
Annex C.

 

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Annex C

 

Pricing Term Sheet

 

American Equity Investment Life Holding Company

3.50% Convertible Senior Notes due 2015

 

The information in this pricing term sheet supplements American Equity
Investment Life Holding Company’s preliminary offering memorandum, dated
September 15, 2010 (the “Preliminary Offering Memorandum”), and supersedes the
information in the Preliminary Offering Memorandum to the extent inconsistent
with the information in the Preliminary Offering Memorandum.  In all other
respects, this term sheet is qualified in its entirety by reference to the
Preliminary Offering Memorandum.  Terms used herein but not defined herein shall
have the respective meanings as set forth in the Preliminary Offering
Memorandum. All references to dollar amounts are references to U.S. dollars.

 

Issuer:

 

American Equity Investment Life Holding Company (“American Equity”)

 

 

 

Ticker / Exchange:

 

AEL / The New York Stock Exchange (“NYSE”)

 

 

 

Title of securities:

 

3.50% Convertible Senior Notes due 2015 (the “Notes”)

 

 

 

Aggregate principal amount offered:

 

$170,000,000 of Notes

 

 

 

Offering price:

 

The Notes will be issued at a price of 100% of their principal amount, plus
accrued interest, if any, from September 22, 2010.

 

 

 

Over-allotment option:

 

$30,000,000 principal amount of Notes

 

 

 

Annual interest rate:

 

The Notes will bear interest at a rate equal to 3.50% per annum from
September 22, 2010.

 

 

 

NYSE Last Reported Sale Price on September 16, 2010:

 

$10.00 per share of American Equity common stock

 

 

 

Conversion premium:

 

25.00% above the NYSE Last Reported Sale Price on September 16, 2010

 

 

 

Initial conversion price:

 

$12.50 per share of American Equity common stock

 

 

 

Initial conversion rate:

 

80.0000 shares of American Equity common stock per $1,000 principal amount of
Notes

 

 

 

Interest payment dates:

 

March 15 and September 15, commencing on March 15, 2011

 

 

 

Maturity date:

 

September 15, 2015

 

 

 

Sole book-running manager:

 

J.P. Morgan Securities LLC

 

 

 

Co-managers:

 

FBR Capital Markets & Co.
KeyBanc Capital Markets Inc.
Macquarie Capital (USA) Inc.

 

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Madison Williams and Company LLC
SunTrust Robinson Humphrey, Inc.

 

 

 

Trade date to initial purchasers:

 

September 16, 2010

 

 

 

Settlement date:

 

September 22, 2010

 

 

 

CUSIP:

 

025676 AJ6

 

 

 

ISIN:

 

US025676AJ66

 

 

 

Convertible note hedge and warrant transactions:

 

In connection with the pricing of the Notes, American Equity entered into
convertible note hedge transactions with counterparties that include affiliates
of certain of the initial purchasers of the Notes (the “option counterparties”).
The convertible note hedge transactions are expected to reduce both the
potential dilution upon conversion of the Notes and American Equity’s exposure
to potential cash payments it may be required to make upon a conversion of the
Notes. American Equity also entered into warrant transactions with the option
counterparties pursuant to which it sold warrants for the purchase of American
Equity common stock. The warrant transactions could separately have a dilutive
effect to the extent that the market price per share of American Equity common
stock exceeds the applicable strike price of the warrants. However, subject to
certain conditions as specified under the terms of the warrant transactions,
American Equity may elect to settle the warrants in cash. If the initial
purchasers exercise their over-allotment option, American Equity may increase
the size of the convertible note hedge transactions and enter into additional
warrant transactions.

 

 

 

Use of proceeds:

 

American Equity estimates that the net proceeds from the Notes offering, after
deducting estimated fees and expenses and the initial purchasers’ discounts and
commissions, will be approximately $164.3 million (or approximately $193.3
million if the initial purchasers exercise their over-allotment option in full).
American Equity intends to use approximately $18.2 million of the net proceeds
from the Notes offering to pay the cost of the convertible note hedge
transactions, taking into account the proceeds of the warrant transactions, and
approximately $146.1 million of the net proceeds from the Notes offering to
repay outstanding amounts of principal and interest under American Equity’s
credit facility.

 

If the initial purchasers exercise their over-allotment option, American Equity
may sell additional warrants. American Equity intends to use a portion of the
net proceeds from the sale of the additional Notes to pay the cost of any
increase in the size of the convertible note hedge transactions (taking into
account the proceeds of the additional warrant transactions), approximately $4.0
million of the net proceeds from the sale of the additional Notes to repay
outstanding amounts of principal and interest under American Equity’s credit
facility (assuming the initial purchasers exercise their over-allotment option
in full), and the remainder, if any, of the net proceeds from the sale of the
additional Notes to repurchase outstanding convertible notes and for general
corporate purposes, including the repayment of existing

 

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indebtedness.

 

 

 

Adjustment to conversion rate upon a make-whole fundamental change:

 

The table below sets forth the number of additional shares, if any, of American
Equity common stock to be added to the conversion rate per $1,000 principal
amount of Notes in connection with a “make-whole fundamental change” as
described in the Preliminary Offering Memorandum, based on the stock price and
effective date of the make-whole fundamental change.

 

 

 

Stock Price

 

Effective date

 

$10.00

 

$15.00

 

$20.00

 

$25.00

 

$30.00

 

$35.00

 

$40.00

 

$45.00

 

$50.00

 

$55.00

 

September 22, 2010

 

20.0000

 

9.0889

 

4.7998

 

2.9181

 

1.9220

 

1.3208

 

0.9243

 

0.6471

 

0.4459

 

0.2964

 

September 15, 2011

 

20.0000

 

8.3571

 

4.1275

 

2.4125

 

1.5591

 

1.0624

 

0.7402

 

0.5159

 

0.3529

 

0.2308

 

September 15, 2012

 

20.0000

 

7.2731

 

3.2248

 

1.7767

 

1.1203

 

0.7582

 

0.5280

 

0.3679

 

0.2502

 

0.1609

 

September 15, 2013

 

20.0000

 

5.5960

 

2.0145

 

0.9906

 

0.5967

 

0.3976

 

0.2755

 

0.1909

 

0.1273

 

0.0769

 

September 15, 2014

 

20.0000

 

2.9818

 

0.5342

 

0.1586

 

0.0322

 

0.0000

 

0.0000

 

0.0000

 

0.0000

 

0.0000

 

September 15, 2015

 

20.0000

 

0.0000

 

0.0000

 

0.0000

 

0.0000

 

0.0000

 

0.0000

 

0.0000

 

0.0000

 

0.0000

 

 

The exact stock prices and effective dates may not be set forth in the table
above, in which case:

 

·                  If the stock price is between two stock prices in the table
or the effective date is between two effective dates in the table, the number of
additional shares will be determined by a straight-line interpolation between
the number of additional shares set forth for the higher and lower stock prices
and the earlier and later effective dates, as applicable, based on a 365-day
year.

 

·                  If the stock price is greater than $55.00 per share (subject
to adjustment in the same manner as the stock prices set forth in the column
headings of the table above), no additional shares will be added to the
conversion rate.

 

·                  If the stock price is less than $10.00 per share (subject to
adjustment in the same manner as the stock prices set forth in the column
headings of the table above), no additional shares will be added to the
conversion rate.

 

Notwithstanding the foregoing, in no event will the total number of shares of
American Equity common stock issuable upon conversion exceed 100.0000 per $1,000
principal amount of Notes, subject to adjustment in the same manner as the
conversion rate as set forth under “Description of notes—Conversion
rights—Conversion rate adjustments” in the Preliminary Offering Memorandum.

 

General

 

This communication is intended for the sole use of the person to whom it is
provided by the sender.

 

This communication shall not constitute an offer to sell or the solicitation of
an offer to buy securities nor shall there be any sale of these securities in
any state in which such offer, solicitation or sale would be unlawful prior to
registration or qualification under the laws of any such state.

 

--------------------------------------------------------------------------------

 

The Notes and any shares of common stock issuable upon conversion of the Notes
have not been, and will not be, registered under the Securities Act of 1933, as
amended (the “Securities Act”), or any state securities laws. Accordingly, the
Notes are being offered and sold only to “qualified institutional buyers” as
defined in Rule 144A promulgated under the Securities Act. The Notes are not
transferable except in accordance with the restrictions described under
“Transfer restrictions” in the Preliminary Offering Memorandum.

 

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Exhibit A

 

FORM OF LOCK-UP AGREEMENT

 

 

          , 200  

 

J.P. MORGAN SECURITIES LLC

As Representative of

the several Initial Purchasers listed in

Schedule 1 to the Purchase Agreement

referred to below

c/o J.P. Morgan Securities LLC

383 Madison Avenue

New York, NY 10179

 

Re:          AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY --- Rule 144A
Offering

 

Ladies and Gentlemen:

 

The undersigned understands and agrees as follows:

 

1.             J.P. Morgan Securities LLC (“JPM”) proposes to enter into a
Purchase Agreement (the “Agreement”) with American Equity Investment Life
Holding Company, an Iowa corporation (the “Company”), providing for the initial
purchase by JPM and the several initial purchasers listed in Schedule 1 of the
Agreement (the “Initial Purchasers”) of $170,000,000 aggregate principal amount
of the Company’s 3.50% Convertible Senior Notes due 2015 (the “Notes”), and the
resale of such shares by JPM and the Initial Purchasers to certain eligible
purchasers (the “Offering”), in each case, in transactions exempt from the
registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”).

 

2.             In recognition of the benefit that the Offering will confer upon
the undersigned and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the undersigned, the undersigned
hereby agrees that, without the prior written consent of JPM (which consent may
be withheld or delayed in JPM’s sole discretion), he, she or it will refrain
during the period commencing on the date of the Agreement and ending on the date
that is 60 days after the date of the Agreement, from (i) offering, pledging,
selling, contracting to sell, selling any option or contract to purchase,
purchasing any option or contract to sell, granting any option, right or warrant
for the sale of, lending or otherwise disposing of or transferring, directly or
indirectly, any equity securities of the Company, or any securities convertible
into or exercisable or exchangeable for equity securities of the Company, or
(ii) entering into any swap or other arrangement that transfers to another, in
whole or in part, directly or indirectly, any of

 

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the economic consequences of ownership of equity securities of the Company,
whether any such transaction described in clause (i) or (ii) above is to be
settled by delivery of common stock of the Company or such other securities, in
cash or otherwise.

 

Notwithstanding the foregoing, subject to applicable securities laws and the
restrictions contained in the Company’s articles of incorporation, as amended,
the undersigned may transfer any securities of the Company (including, without
limitation, common stock) as follows: (i) pursuant to the exercise and issuance
of options; (ii) as a bona fide gift or gifts, provided that the donee or donees
thereof agree to be bound in writing by the restrictions set forth herein;
(iii) to any trust for the direct or indirect benefit of the undersigned or the
immediate family of the undersigned, provided that the trustee of the trust
agrees to be bound in writing by the restrictions set forth herein; (iv) as a
distribution to stockholders, partners or members of the undersigned, provided
that such stockholders, partners or members agree to be bound in writing by the
restrictions set forth herein; (v) any transfer required under any benefit plans
or the Company’s third amended and restated bylaws; (vi) as collateral for any
loan, provided that the lender agrees in writing to be bound by the restrictions
set forth in herein; or (vii) with respect to sales of securities acquired after
the Closing Time in the open market. For purposes of this agreement, “immediate
family” shall mean any relationship by blood, marriage or adoption, not more
remote than first cousin.

 

For the avoidance of doubt, nothing shall prevent the undersigned from, or
restrict the ability of the undersigned to, (i) purchase common stock on the
open market or (ii) exercise any options or other convertible securities granted
under any benefit plan of the Company.

 

3.             The undersigned acknowledges that the Initial Purchasers are
relying on the agreements of the undersigned set forth herein in making their
decision to enter into the Agreement and to continue their efforts in connection
with the Offering.

 

4.             This Lock-Up Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard to principles
of conflict of laws.

 

5.             This Lock-Up Agreement may be delivered by facsimile.

 

IN WITNESS WHEREOF, the undersigned has executed this Lock-Up Agreement, or
caused this Lock-Up Agreement to be executed, as of the date first written
above.

 

 

Very truly yours,

 

 

 

Name:

 

Title:

 

 

 

 

 

 

 

(Address)

 

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