Exhibit 10(iii)
$10,000,000
FPIC INSURANCE GROUP, INC.
PLACEMENT AGREEMENT
New York, New York
May 13, 0000
XXXXXXX X'XXXXX & PARTNERS, L.P.
000 Xxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
FPIC Insurance Group, Inc. a Florida corporation (the "Company")
confirms its agreement (the "Agreement") with Sandler X'Xxxxx & Partners, L.P.,
as agent of the Company (the "Placement Agent"), with respect to the issue and
sale by the Company and the placement by the Placement Agent of $10,000,000
aggregate principal amount of Floating Rate Senior Notes (principal amount of
$1,000 per security) of the Company (the "Senior Notes").
The Senior Notes will be issued pursuant to the Indenture, to be
dated as of the Closing Date (the "Indenture"), between the Company and
Wilmington Trust Company, as indenture trustee (the "Indenture Trustee"). The
Indenture, this Agreement and the Subscription Agreement (as defined in Section
2(a) hereof) are hereinafter referred to collectively as the "Operative
Documents."
SECTION 1. Representations and Warranties.
(a) The Company represents and warrants to the Placement Agent and
the Purchaser (as defined in Section 2(a) hereof) of Senior Notes as of the date
hereof and as of the Closing Date, and agrees with the Placement Agent and the
Purchaser, as follows:
(i) Similar Offerings. Within a period of six months before or
after the date hereof, the Company has not, directly or indirectly, solicited
any offer to buy or offered to sell, and will not, directly or indirectly,
solicit any offer to buy or offer to sell, in the United States or to any United
States citizen or resident, any security which is or would be integrated with
the sale of the Senior Notes (including any securities of the same or a similar
class as the Senior Notes, other than the Senior Notes) in a manner that would
require the Senior Notes to be registered under the Securities Act of 1933, as
amended (the "1933 Act").
(ii) Incorporated Documents. The documents of the Company
filed with the Securities and Exchange Commission (the "Commission") in
accordance with the
Securities Exchange Act of 1934, as amended (the "1934 Act"), from and including
the commencement of the fiscal year covered by the Company's most recent Annual
Report on Form 10-K, at the time they were or hereafter are filed by the Company
with the Commission (collectively, the "1934 Act Reports"), complied and will
comply in all material respects with the requirements of the 1934 Act and the
rules and regulations of the Commission thereunder (the "1934 Act Regulations"),
and, at the date of this Agreement and on the Closing Date, do not and will not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading; and
other than such instruments, agreements, contracts and other documents as are
filed as exhibits to the Company's Annual Report on Form 10-K, Quarterly Reports
on Form 10-Q or Current Reports on Form 8-K, there are no instruments,
agreements, contracts or documents of a character described in Item 601 of
Regulation S-K promulgated by the Commission to which the Company or any of its
subsidiaries is a party.
(iii) Independent Accountants. The accountants of the Company
who certified the financial statements included in the 1934 Act Reports (the
"Independent Accountants") are independent public accountants of the Company and
its subsidiaries within the meaning of the 1933 Act and the rules and
regulations of the Commission thereunder (the "1933 Act Regulations").
(iv) Financial Statements and Information. The consolidated
historical financial statements of the Company, together with the related
schedules and notes, included in the 1934 Act Reports present fairly, in all
material respects, the respective consolidated financial positions of the
Company and its consolidated subsidiaries at the respective dates indicated, and
the consolidated statements of income, changes in stockholders' equity and cash
flows of the Company and its consolidated subsidiaries for the respective
periods specified; said financial statements have been prepared in conformity
with generally accepted accounting principles in the United States applied on a
consistent basis throughout the periods involved, except as disclosed in the
notes to such financial statements; the supporting schedules, if any, included
in the 1934 Act Reports present fairly, in all material respects, the
information required to be stated therein and any pro forma financial statements
and the related notes thereto included in the 1934 Act Reports present fairly
the information shown therein, have been prepared in accordance with the
Commission's rules and guidelines with respect to pro forma financial statements
and have been properly compiled on the bases described therein, and the
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions and
circumstances referred to therein; the statutory financial statements of First
Professionals Insurance Company, Inc., a Florida corporation, Anesthesiologists'
Professional Assurance Co., a Florida corporation, Interlex Insurance Company, a
Missouri corporation and Intermed Insurance Company, a Missouri corporation,
(each an "Insurance Subsidiary") as filed with the applicable insurance
regulatory authorities in the jurisdiction in which each such Insurance
Subsidiary is organized (each such regulatory authority, a "State Regulatory
Authority") for the years ended December 31, 2002, 2001 and 2000 and for any
quarters ended subsequent to December 31, 2002, including all supporting
documents filed therewith (collectively, the "Insurance Subsidiary Financial
Statements"): (i) have been prepared in accordance with statutory accounting
principles promulgated by the National Association of Insurance Commissioners,
as applied, with respect to each Insurance Subsidiary, by the
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applicable State Regulatory Authority of such entity, consistently applied for
the periods covered thereby and present fairly the statutory financial position
of such Insurance Subsidiaries as at the respective dates thereof and the
results of operations of such Insurance Subsidiaries for the respective periods
then ended; and (ii) complied in all material respects with all applicable laws,
rules and regulations when filed, and, to the knowledge of the Company, no
material deficiency has been asserted with respect to any Insurance Subsidiary
Financial Statements by any applicable Regulatory Agency. As used herein, the
term "Regulatory Agency" means any federal or state agency charged with the
supervision or regulation of insurance companies, or any court, administrative
agency or commission or other governmental agency, authority or instrumentality
having supervisory or regulatory authority with respect to the Company or any of
its subsidiaries.
(v) No Material Adverse Change. Since the respective dates as
of which information is given in the 1934 Act Reports, there has not been (A)
any material adverse change in the condition, financial, regulatory or
otherwise, or in the earnings, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a "Material Adverse Effect") or (B)
any dividend or distribution of any kind declared, paid or made by the Company
on any class of its capital stock other than regular dividends on the Company's
common stock declared and paid consistent with past practice.
(vi) Internal Controls. Each of the Company and its
subsidiaries maintain a system of internal accounting controls sufficient to
provide reasonable assurance that (i) transactions are executed in accordance
with the management's general or specific authorizations, (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain asset
accountability, (iii) access to assets is permitted only in accordance with the
management's general or specific authorization, (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and
appropriate action is taken with respect to any differences, (v) material
information relating to the Company and its subsidiaries is made known to
management, (vi) management has evaluated the effectiveness of such internal
accounting controls and (vii) management has disclosed to the Independent
Accountants and the audit committee (A) all significant deficiencies in the
design or operation of internal controls which could adversely affect the
ability of the Company and its subsidiaries to record, process, summarize, and
report financial data, and have identified for the Independent Accountants any
material weaknesses in internal controls and (B) any fraud, whether or not
material, that involves management or other employees who have a significant
role in the internal controls of the Company and its subsidiaries, and any such
deficiencies or fraud would not, singularly or in the aggregate, be expected to
result in a Material Adverse Effect.
(vii) Regulatory Matters. Neither the Company nor any of its
subsidiaries is subject or is party to, or has received any notice or advice
that any of them may become subject or party to, any investigation with respect
to any corrective, suspension or cease-and-desist order, agreement, consent
agreement or other regulatory enforcement action, proceeding or order with or
by, or is a party to any commitment letter or similar undertaking to, or is
subject to any directive by, or has been a recipient of any supervisory letter
from, or has adopted any board resolutions at the request of, any Regulatory
Agency that currently relates to
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or restricts in any material respect their business or that in any manner
relates to their capital and surplus adequacy or their management (each, a
"Regulatory Agreement"), nor has the Company or any of its subsidiaries been
advised by any Regulatory Agency that it is considering issuing or requesting
any such Regulatory Agreement; there is no unresolved violation, criticism or
exception by any Regulatory Agency with respect to any report or statement
relating to any examinations of the Company or any of its subsidiaries which, in
the reasonable judgment of the Company, is expected to result in a Material
Adverse Effect; and without limiting the generality of the foregoing, there are
no restrictions or limitations on the authority of any Insurance Subsidiary to
pay dividends to the Company, directly or indirectly, other than general
restrictions and limitations applicable to all insurance companies domiciled in
the state of organization of such Insurance Subsidiary pursuant to applicable
law.
(viii) No Undisclosed Liabilities. Neither the Company nor any
of its subsidiaries has any material liability, whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, and whether due or to become
due, including any liability for taxes (and there is no past or present fact,
situation, circumstance, condition or other basis for any present or future
action, suit, proceeding, hearing, charge, complaint, claim or demand against
the Company or its subsidiaries giving rise to any such liability), except (i)
for liabilities set forth in the financial statements referred to in Section
1(a)(iv) above and (ii) normal fluctuations in the amount of the liabilities
referred to in clause (i) above occurring in the ordinary course of business of
the Company and all of its subsidiaries since the date of the most recent
balance sheet included in such financial statements.
(ix) Insurance Reserving Practices. The Company and its
Insurance Subsidiaries have made no material change in their insurance reserving
practices since the respective dates as of which information is given in the
1934 Act Reports.
(x) Reinsurance Treaties. All reinsurance and retrocessional
treaties, contracts, agreements 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, with
such exceptions that would not, singularly or in the aggregate, have a Material
Adverse Effect; and no Insurance Subsidiary has received any notice from any of
the other parties to such treaties, contracts, agreements or arrangements that
such other party intends not to perform thereunder and, to the best knowledge of
the Company, none of the other parties to such treaties, contracts, agreements
or arrangements will be unable to perform thereunder except to the extent
adequately and properly reserved for in the consolidated financial statements of
the Company, with such exceptions that would not, singularly or in the
aggregate, have a Material Adverse Effect.
(xi) Good Standing of the Company. The Company has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of Florida and has full power and authority under such laws to
own, lease and operate its properties and to conduct its business, to enter into
and perform its obligations under each of the Operative Documents to which it is
a party, and to issue the Senior Notes.
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(xii) Good Standing of the Subsidiaries. Each "significant
subsidiary" (as defined in Rule 1-02 of Regulation S-X) of the Company (a
"Significant Subsidiary") and each Insurance Subsidiary has been duly organized
and is validly existing as an entity in good standing under the laws of the
jurisdiction in which it is chartered and has full power and authority under
such laws to own, lease and operate its properties and to conduct its current
and contemplated business.
(xiii) Foreign Qualifications. Each of the Company and its
subsidiaries is duly qualified as a foreign entity to transact business and is
each 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 to be so qualified would not
singularly, or in the aggregate, in the reasonable judgment of the Company, be
expected to result in a Material Adverse Effect.
(xiv) Capital Stock Duly Authorized and Validly Issued. All of
the issued and outstanding capital stock of the Company has been duly authorized
and validly issued and is fully paid and nonassessable; all of the issued and
outstanding capital stock of each subsidiary of the Company has been duly
authorized and validly issued, is fully paid and nonassessable and, except as
set forth in Schedule 1(a)(xiv), is owned by the Company, directly or through
subsidiaries, free and clear of any security interest, mortgage, pledge, lien,
encumbrance, claim or equitable right; and none of the issued and outstanding
capital stock of the Company or its Significant Subsidiaries was issued in
violation of any preemptive or similar rights arising by operation of law, under
the charter, by-laws or code of regulations of the Company or any of its
Significant Subsidiaries or under any agreement to which the Company or any of
its Significant Subsidiaries is a party.
(xv) Authorization of this Agreement. This Agreement has been
duly authorized, executed and delivered by the Company.
(xvi) Authorization of Indenture. The Indenture has been duly
authorized by the Company and, on the Closing Date, will have been duly executed
and delivered by the Company, and assuming due authorization, execution and
delivery of the Indenture by the Indenture Trustee, the Indenture will
constitute a valid, legal and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except to the extent that
enforceability may be limited by the (a) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws now or hereafter in
effect relating to creditors' rights generally and (b) general principles of
equity (regardless of whether enforceability is considered in a proceeding at
law or in equity) (collectively, the "Enforceability Exceptions").
(xvii) Authorization of Senior Notes. The Senior Notes have
been duly authorized by the Company; on the Closing Date, the Senior Notes will
have been duly executed by the Company and, when authenticated in the manner
provided for in the Indenture and delivered by the Company to the Purchaser
against payment therefor as contemplated in the Subscription Agreement, will
constitute valid, legal and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except to the extent that
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enforceability may be limited by the Enforceability Exceptions; and the Senior
Notes will be in the form contemplated by, and entitled to the benefits of, the
Indenture.
(xviii) Not an Investment Company. The Company is not, and
immediately following consummation of the transactions contemplated hereby and
the application of the net proceeds therefrom the Company will not be, an
"investment company", or an entity "controlled" by an "investment company", in
each case within the meaning of Section 3(a) of the Investment Company Act of
1940, as amended (the "1940 Act") without regard to Section 3(c) of the 1940
Act.
(xix) Absence of Defaults and Conflicts. Neither the Company
nor any of its Significant Subsidiaries or Insurance Subsidiaries is in
violation of its charter, by-laws or code of regulations; neither the Company
nor any of its subsidiaries is in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or
other agreement or instrument to which it is a party or by which it or any of
them may be bound or to which any of its properties or assets is subject
(collectively, "Agreements and Instruments"), except for such defaults under
Agreements and Instruments that, in the reasonable judgment of the Company, are
not expected to result in a Material Adverse Effect; and the execution, delivery
and performance of the Operative Documents by the Company, the issuance, sale
and delivery of the Senior Notes, the consummation of the transactions
contemplated by the Operative Documents, and compliance by the Company with the
terms of the Operative Documents to which it is a party have been duly
authorized by all necessary corporate action on the part of the Company, and do
not and will not, whether with or without the giving of notice or passage of
time or both, violate, conflict with or constitute a breach of, or default or
Repayment Event (as defined below) under, or result in the creation or
imposition of any, security interest, mortgage, pledge, lien, charge,
encumbrance, claim or equitable right upon any properties or assets of the
Company or any of its Significant Subsidiaries or Insurance Subsidiaries
pursuant to any of the Agreements and Instruments, nor will such action result
in any violation of the provisions of the charter, by-laws or code of
regulations of the Company or any of its Significant Subsidiaries or Insurance
Subsidiaries, or violation by the Company or any of its Significant Subsidiaries
or Insurance Subsidiaries of any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government authority, agency
(including, without limitation, each applicable Regulatory Agency) or
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of its Significant Subsidiaries or Insurance Subsidiaries or
their respective properties or assets (collectively, "Governmental Entities").
As used herein, a "Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any person
acting on such holder's behalf) the right to require the repurchase, redemption
or repayment of all or a portion of such indebtedness by the Company or any of
its Significant Subsidiaries or Insurance Subsidiaries prior to its scheduled
maturity.
(xx) Absence of Labor Dispute. No labor dispute with the
employees of the Company or any of its subsidiaries exists or, to the knowledge
of the executive officers of the Company, is imminent, which, in the reasonable
judgment of the Company, is expected to result in a Material Adverse Effect.
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(xxi) Absence of Proceedings. There is no action, suit,
proceeding, inquiry or investigation (including, without limitation, any action
to revoke or deny renewal of any Insurance License (as defined in paragraph
(xxiii) below)) before or brought by any Governmental Entity, now pending, or,
to the knowledge of the Company, threatened, against or affecting the Company or
any of its subsidiaries, which, in the reasonable judgment of the Company, is
expected to result in a Material Adverse Effect or materially and adversely
affect the consummation of the transactions contemplated by the Operative
Documents or the performance by the Company of its obligations hereunder or
thereunder; and the aggregate of all pending legal or governmental proceedings
to which the Company or any of its subsidiaries is a party or of which any of
their respective properties or assets is the subject, including ordinary routine
litigation incidental to the business, are not, in the reasonable judgment of
the Company, expected to result in a Material Adverse Effect.
(xxii) Absence of Further Requirements. No filing with, or
authorization, approval, consent, license, order, registration, qualification or
decree of, any Governmental Entity, other than those that have been made or
obtained, is necessary or required for the authorization, execution, delivery or
performance by the Company of its obligations under the Operative Documents or
the Senior Notes, or the consummation by the Company of the transactions
contemplated by the Operative Documents.
(xxiii) Possession of Licenses and Permits. Each of the
Company and its subsidiaries, other than any Insurance Subsidiary, possesses
such permits, orders, certificates, licenses, approvals, consents and other
authorizations (collectively, "Governmental Licenses") issued by the appropriate
Governmental Entities necessary to conduct the business now operated by it, with
such exceptions that would not, in the reasonable judgment of the Company, be
expected to, singularly or in the aggregate, have a Material Adverse Effect;
each Insurance Subsidiary is duly licensed or authorized (including, without
limitation, from its applicable State Regulatory Authority) as an insurer in
each jurisdiction where it is required to be so licensed or authorized to
conduct its business (collectively "Insurance Licenses"), with such exceptions
that would not, in the reasonable judgment of the Company, be expected to,
singularly or in the aggregate, have a Material Adverse Effect; the Company and
its subsidiaries are in compliance with the terms and conditions of all of its
Governmental Licenses and Insurance Licenses, as applicable, except where the
failure so to comply, in the reasonable judgment of the Company, is not expected
to, singularly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses and Insurance Licenses are valid and in full force and
effect, except when the invalidity of such Governmental Licenses or Insurance
Licenses or the failure of such Governmental Licenses or Insurance Licenses to
be in full force and effect, in the reasonable judgment of the Company, is not
expected to have a Material Adverse Effect; and neither the Company nor any of
its subsidiaries has received any notice of proceedings, and to the knowledge of
the Company or any of its subsidiarires, there has been no threatened action,
suit, proceeding or investigation, relating to the revocation, termination,
suspension or modification of any such Governmental Licenses or Insurance
Licenses which, singularly or in the aggregate, in the reasonable judgment of
the Company, is expected to result in a Material Adverse Effect.
(xxiv) Title to Property. Each of the Company and its
subsidiaries has good and marketable title to all of its respective real and
personal properties, in each case free and clear of all liens, encumbrances and
defects, except such as, in the reasonable judgment of
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the Company, singularly or in the aggregate, are not expected to result in a
Material Adverse Effect; and all of the leases and subleases under which the
Company or any of its subsidiaries holds properties are in full force and
effect, except when the failure of such leases and subleases to be in full force
and effect, in the reasonable judgment of the Company, singularly or in the
aggregate, is not expected to have a Material Adverse Effect, and neither the
Company nor any of its subsidiaries has any notice of any claim of any sort that
has been asserted by anyone adverse to the rights of the Company or any of its
subsidiaries under any of the leases or subleases under which the Company or any
of its subsidiaries holds properties, or affecting or questioning the rights of
such entity to the continued possession of the leased or subleased premises
under any such lease or sublease, except when such claim, in the reasonable
judgment of the Company, singularly or in the aggregate, is not expected to have
a Material Adverse Effect.
(xxv) Stabilization. The Company has not taken and will not
take, directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in stabilization or manipulation of the
price of the Senior Notes.
(xxvi) No General Solicitation. Neither the Company nor any of
its Affiliates (as defined in Rule 501(b) under the 0000 Xxx) or any person
acting on its or any of their behalf (other than the Placement Agent, as to whom
the Company makes no representation) has engaged or will engage, in connection
with the offering of the Senior Notes, in any form of general solicitation or
general advertising within the meaning of Rule 502(c) under the 1933 Act.
(xxvii) No Directed Selling Efforts. Neither the Company nor
any of its Affiliates or any person acting on its or any of their behalf (other
than the Placement Agent, as to whom the Company makes no representation) has
engaged or will engage in any directed selling efforts within the meaning of
Regulation S under the 1933 Act ("Regulation S") with respect to the offering of
the Senior Notes.
(xxviii) No Registration. Subject to compliance by the
Placement Agent with the relevant provisions of Section 6 hereof, it is not
necessary in connection with the offer, sale and delivery of the Senior Notes by
the Company in the manner contemplated by this Agreement to register the Senior
Notes under the 1933 Act or to qualify the Indenture under the Trust Indenture
Act of 1939, as amended.
(xxix) Authorization of Subscription Agreement. The
Subscription Agreement has been duly authorized, executed and delivered by the
Company, and assuming due authorization, execution and delivery of the
Subscription Agreement by the Purchaser, the Subscription Agreement will
constitute a valid, legal and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except to the extent that
enforceability may be limited by the Enforceability Exceptions.
(b) Any certificate signed by the Company, any duly authorized
officer of the Company or any of its subsidiaries and delivered to the Placement
Agent or to counsel for the Placement Agent shall be deemed a representation and
warranty by the Company, to the Placement Agent as to the matters covered
thereby.
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SECTION 2. Sale and Delivery through Placement Agent; Closing.
(a) The Company proposes to issue and sell the Senior Notes on May
22, 2003 (or such other date mutually agreed to by the Company and the Placement
Agent) (the "Closing Date") to InCapS Funding I, Ltd., a newly formed company
with limited liability incorporated under the laws of the Cayman Islands (the
"Purchaser"), pursuant to the terms of the Senior Notes Subscription Agreement,
entered into on the date hereof (the "Subscription Agreement"), between the
Company and the Purchaser. In addition, the Company agrees that the Purchaser
shall be entitled to the benefit of, and to rely on, the provisions of this
Agreement to the extent such provisions address or relate to the Purchaser or
the Senior Notes to be purchased by the Purchaser.
(b) The Company hereby grants to the Placement Agent the exclusive
right to arrange the placement of the Senior Notes with the Purchaser on their
behalf. The Placement Agent accepts such right and agrees to use its best
efforts, on and prior to the Closing Date, to effect such placement.
(c) Deliveries of certificates for the Senior Notes shall be made by
the Company to or on behalf of the Purchaser at the offices of Sidley Xxxxxx
Xxxxx & Xxxx LLP in The City of New York, and payment of the purchase price for
the Senior Notes shall be made by the Purchaser to the Company by wire transfer
of immediately available funds to a bank designated by the Company
contemporaneous with closing on the Closing Date.
Certificates for the Senior Notes in the aggregate principal amount
thereof shall be registered in the name of the Purchaser.
(d) As compensation to the Placement Agent for its placement of the
Senior Notes, the Company hereby agrees to pay on the Closing Date to the
Placement Agent in immediately available funds a commission of 3% of the
aggregate principal amount of Senior Notes to be delivered by the Company
hereunder on the Closing Date.
(e) In performing its duties under this Agreement, the Placement
Agent shall be entitled to rely upon any notice, signature or writing which the
Placement Agent shall in good faith believe to be genuine and to be signed or
presented by a proper party or parties. The Placement Agent may rely upon any
opinions or certificates or other documents delivered by the Company or its
counsel or designees either to it or the Purchaser. In addition, in connection
with the performance of its duties under this Agreement, the Placement Agent
shall not be liable for any error of judgment or any action taken or omitted to
be taken unless it was grossly negligent or engaged in willful misconduct in
connection with such performance or non-performance. No provision of this
Agreement shall require the Placement Agent to expend or risk its own funds or
otherwise incur any financial liability on behalf of the Purchaser in connection
with the performance of any of its duties hereunder. The Placement Agent shall
be under no obligation to exercise any of the rights or powers vested in it by
this Agreement.
SECTION 3. Notice of Material Events. The Company covenants with the
Placement Agent and the Purchaser that, prior to the completion of the initial
placement of the Senior Notes through the Placement Agent, the Company will
immediately notify the Placement
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Agent, and confirm such notice in writing, of any event or development that, in
the reasonable judgment of the Company, is expected to result in a Material
Adverse Effect.
SECTION 4. Payment of Expenses. Whether or not this Agreement or the
Subscription Agreement is terminated or the sale of the Senior Notes is
consummated, the Company will pay all expenses incident to the performance of
its obligations under this Agreement, including (i) the preparation, issuance
and delivery of the certificates for the Senior Notes, (ii) the fees and
disbursements of the Company's counsel, accountants and other advisors, and
(iii) the fees and disbursements of counsel for the Indenture Trustee incurred
on or prior to the Closing Date.
SECTION 5. Conditions of Placement Agent's Obligations. The
obligations of the Placement Agent and the Purchaser on the Closing Date are
subject to the accuracy of the representations and warranties of the Company
contained in Section 1 hereof or any officer of the Company or any of its
subsidiaries delivered pursuant to the provisions hereof, to the performance by
the Company of its obligations hereunder, and to the following further
conditions:
(a) Opinion of Counsel for the Company. On the Closing Date, the
Placement Agent and the Purchaser shall have received the favorable opinion,
dated as of the Closing Date, of Xxxxxxx Xxxxxxxx & Xxxx, special counsel for
the Company, in substantially the form set out in Annex A hereto, in form and
substance reasonably satisfactory to counsel for the Placement Agent. Such
counsel may state that, insofar as such opinion involves factual matters, they
have relied, to the extent they deem proper, upon certificates of officers of
the Company or any of its subsidiaries and public officials.
(b) Opinion of Special Tax Counsel for the Company. On the Closing
Date, the Placement Agent and the Purchaser shall have received an opinion,
dated as of the Closing Date, of Xxxxxxx Xxxxxxxx & Xxxx, special tax counsel
for the Company, in form and substance satisfactory to counsel for the Placement
Agent, to the effect that the Senior Notes will constitute indebtedness of the
Company for United States federal income tax purposes. Such opinion may be
conditioned on, among other things, the initial and continuing accuracy of the
facts, financial and other information, covenants and representations set forth
in certificates of officers of the Company and other documents deemed necessary
for such opinion.
(c) Opinion of Counsel to the Indenture Trustee. On the Closing
Date, the Placement Agent and the Purchaser shall have received the favorable
opinion, dated as of the Closing Date, of Morris, James, Hitchens & Xxxxxxxx
LLP, counsel for the Indenture Trustee, in substantially the form set out in
Annex B hereto, in form and substance reasonably satisfactory to counsel for the
Placement Agent.
(d) Certificates. On the Closing Date, there shall not have been,
since the date hereof or since the respective dates as of which information is
given in the 1934 Act Reports, any Material Adverse Effect, and the Placement
Agent shall have received a certificate of the Chairman, the Chief Executive
Officer, the President, any Executive Vice President or any Vice President of
the Company and of the Chief Financial Officer or Chief Accounting Officer of
the Company, dated as of the Closing Date, to the effect that (i) there has been
no such Material
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Adverse Effect, (ii) the representations and warranties in Section 1 hereof were
true and correct when made and are true and correct with the same force and
effect as though expressly made on and as of the Closing Date, and (iii) the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied on or prior to the Closing Date.
(e) Maintenance of Ratings. From the date of this Agreement through
the Closing Date, (i) there shall not have occurred a downgrading in or
withdrawal of the rating assigned to the debt securities of the Company or any
Insurance Subsidiary or the financial strength or claims paying ability of the
Company or any Insurance Subsidiary, in each case by A.M. Best & Co. or any
"nationally recognized statistical rating organization," as that term is defined
by the Commission for the purposes of Rule 436(g)(2) under the 1933 Act, and
(ii) neither A.M. Best & Co. nor any such organization shall have publicly
announced that it has under surveillance or review its rating of any debt
security or the financial strength or the claims paying ability of the Company
or any Insurance Subsidiary.
(f) Purchaser's Sale of Securities. The Purchaser shall have sold
securities issued by it in such an amount that the net proceeds therefrom shall
be available on the Closing Date and shall be sufficient to purchase the Senior
Notes and all other senior notes, surplus notes and capital securities
contemplated in agreements similar to this Agreement and the Subscription
Agreement.
(g) Additional Documents. On the Closing Date, the Placement Agent
and the Purchaser shall have been furnished such documents and opinions as they
may reasonably request in connection with the issue, sale and placement of the
Senior Notes; and all proceedings taken by the Company in connection with the
issuance, sale and placement of the Senior Notes shall be satisfactory in form
and substance to the Placement Agent and the Purchaser.
(h) Termination of Agreement. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the Placement Agent by notice to the Company at
any time on or prior to the Closing Date. If the sale of the Senior Notes
provided for herein is not consummated because any condition set forth in
Section 5(a), (b), (c), (d), (e) or (g) is not satisfied, because of any
termination pursuant to Section 10(a) hereof or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof, the Company will reimburse the Placement
Agent upon demand for all documented out-of-pocket expenses (including
reasonable fees and disbursements of counsel) that shall have been incurred by
the Placement Agent in connection with the proposed offering of the Senior
Notes. In addition, such termination shall be subject to Section 4 hereof, and
Sections 7 and 8 hereof shall survive any such termination and remain in full
force and effect.
SECTION 6. Offers and Sales of the Senior Notes.
(a) Offer and Sale Procedures. The Placement Agent and the Company
hereby establish and agree to observe the following provisions with respect to
the offer, issue, sale and placement of the Senior Notes:
11
(i) Offers and Sales only to the Purchaser. Offers and sales
of the Senior Notes will be made only to the Purchaser in a transaction not
requiring registration under the 1933 Act.
(ii) No General Solicitation. No general solicitation or
general advertising (within the meaning of Rule 502(c) under the 0000 Xxx) used
in connection with the offering of the Senior Notes.
(iii) No Directed Selling Efforts. No directed selling efforts
(within the meaning of Regulation S) will be used with respect to the offering
of the Senior Notes.
(iv) Purchaser Notification. Prior to or contemporaneously
with the purchase of the Senior Notes by the Purchaser, the Placement Agent will
take reasonable steps to inform the Purchaser that the Senior Notes (A) have not
been and will not be registered under the 1933 Act, (B) are being sold to them
without registration under the 1933 Act in accordance with an exemption from
registration under the 1933 Act and (C) may not be offered, sold or otherwise
transferred except in accordance with the legend set forth in Section 2.05 of
the Indenture.
(b) Covenants of the Company. The Company covenants with the
Placement Agent and the Purchaser as follows:
(i) Due Diligence. In connection with the initial placement of
the Senior Notes, the Company agrees that, prior to any offer or sale of the
Senior Notes through the Placement Agent, the Placement Agent and the Purchaser
shall have the right to make reasonable inquiries into the business of the
Company and its subsidiaries. The Company also agrees to provide answers to the
Placement Agent and the Purchaser, if requested, concerning the Company and its
subsidiaries (to the extent that such information is available or can be
acquired and made available without unreasonable effort or expense and to the
extent the provision thereof is not prohibited by applicable law) and the terms
and conditions of the offering of the Senior Notes.
(ii) Integration. The Company agrees that it will not, and
will cause its Affiliates not to, make any offer or sale of securities of the
Company of any class if, as a result of the doctrine of "integration" referred
to in Rule 502 under the 1933 Act, such offer or sale would render invalid the
exemption from the registration requirements of the 1933 Act provided by Section
4(2) thereof or by Rule 144A or otherwise.
(iii) Restriction on Repurchases. Until the expiration of two
(2) years (or such shorter period as may hereafter be referred to in Rule 144(k)
(or similar successor rule)) after the original issuance of the Senior Notes,
the Company will not, and will cause its Affiliates not to, purchase or agree to
purchase or otherwise acquire any Senior Notes which are "restricted securities"
(as such term is defined under Rule 144(a)(3) under the 1933 Act), whether as
beneficial owner or otherwise, unless, immediately upon any such purchase, the
Company or any Affiliate shall submit such Senior Notes to the Indenture Trustee
for cancellation.
12
SECTION 7. Indemnification.
(a) Indemnification of the Placement Agent and the Purchaser. The
Company agrees to indemnify and hold harmless: (x) the Placement Agent and the
Purchaser, (y) each person, if any, who controls (within the meaning of Section
15 of the 1933 Act or Xxxxxxx 00 xx xxx 0000 Xxx) the Placement Agent or the
Purchaser (each such person, a "controlling person") and (z) the respective
partners, directors, officers, employees and agents of the Placement Agent and
the Purchaser or any such controlling person, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, relating to or arising out of, or based upon,
in whole or in part, (A) any untrue statement or alleged untrue statement of a
material fact included in the 1934 Act Reports, or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; (B) any untrue statement or alleged untrue statement of material
fact contained in any information (whether written or oral) or documents
executed in favor of or furnished or made available to the Placement Agent or
the Purchaser by the Company; (C) any omission or alleged omission to state in
any information (whether written or oral) or documents executed in favor of or
furnished or made available to the Placement Agent or the Purchaser by the
Company a material fact necessary to make the statements therein not misleading;
or (D) the breach or alleged breach of any representation, warranty and
agreement of the Company contained herein or in the Subscription Agreement;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, or breach or alleged breach of any such representation,
warranty or agreement; provided, that (subject to Section 7(c) hereof) any such
settlement is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by the Placement Agent),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or omission,
or breach or alleged breach of any such representation, warranty or agreement,
to the extent that any such expense is not paid under (i) or (ii) above.
(b) Actions against Parties; Notification. Each indemnified party
shall give notice as promptly as reasonably practicable to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability hereunder to the extent it is
not materially prejudiced as a result thereof, and in any event shall not
relieve it from any liability which it may have otherwise than on account of
this indemnity agreement. Counsel to the indemnified parties shall be selected
by the Placement Agent. An indemnifying party may participate at its own expense
in the defense of any such action;
13
provided, however, that counsel to the indemnifying party shall not (except with
the consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for fees and expenses of
more than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7 or Section
8 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(c) Settlement without Consent if Failure to Reimburse. If at any
time an indemnified party shall have validly requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 7(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement, provided, however, that an indemnifying party shall
not be liable for any such settlement effected without its consent if such
indemnifying party (1) reimburses such indemnified party with respect to those
fees and expenses of counsel that it determines in good faith are reasonable and
(2) provides written notice within 10 days after receipt of the request for
reimbursement to the indemnified party substantiating the unpaid balance as
unreasonable, in each case prior to the date of such settlement.
SECTION 8. Contribution. In order to provide for just and equitable
contribution in circumstances under which the indemnification provided for in
Section 7 hereof is for any reason held to be unenforceable for the benefit of
an indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company, on the one
hand, and the Placement Agent, on the other hand, from the offering of the
Senior Notes pursuant to this Agreement or (ii) if the allocation provided by
clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company, on the one hand, and the
Placement Agent, on the other hand, in connection with the statements, omissions
or breaches which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations.
14
The relative benefits received by the Company, on the one hand, and
the Placement Agent, on the other hand, in connection with the offering of the
Senior Notes pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the Senior
Notes pursuant to this Agreement (before deducting expenses) received by the
Company and the total commission received by the Placement Agent bear to the
aggregate of such net proceeds and commissions.
The Company and the Placement Agent agree that it would not be just
and equitable if contribution pursuant to this Section 8 were determined by pro
rata allocation or by any other method of allocation which does not take account
of the equitable considerations referred to above in this Section 8. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 8 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement, omission or alleged omission or breach or alleged breach.
Notwithstanding the provisions of this Section 8, the Placement
Agent shall not be required to contribute any amount in excess of the total
commissions received by it.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 8, the Purchaser, each person, if any,
who controls the Placement Agent or the Purchaser within the meaning of Section
15 of the 1933 Act or Section 20 of the 1934 Act and the respective partners,
directors, officers, employees and agents of the Placement Agent, the Purchaser
or any such controlling person shall have the same rights to contribution as the
Placement Agent, while each officer and director of the Company and each person,
if any, who controls the Company within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act shall have the same rights to contribution as
the Company.
SECTION 9. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto shall remain operative and in full force and effect, and shall survive
delivery of the Senior Notes by the Company.
SECTION 10. Termination of Agreement.
(a) Termination; General. The Placement Agent may terminate this
Agreement, by notice to the Company, at any time on or prior to the Closing Date
if, since the time of execution of this Agreement or, in the case of (i), since
the respective dates as of which information is given in the 1934 Act Reports,
(i) there has occurred any Material Adverse Effect, or (ii) there has occurred
any material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or any other calamity or crisis,
or any change or development involving political, financial or economic
conditions, in each case the
15
effect of which is such as to make it, in the judgment of the Placement Agent,
impracticable to market the Senior Notes or to enforce contracts for the sale of
the Senior Notes, or (iii) trading in any securities of the Company has been
suspended or limited by the Commission or any national stock exchange or market
on or in which such securities are traded or quoted, or if trading generally on
the American Stock Exchange, the New York Stock Exchange or the Nasdaq National
Market has been suspended or limited, or minimum or maximum prices for trading
have been fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the Commission, the National
Association of Securities Dealers or any other governmental authority, or (iv) a
banking moratorium has been declared by United States federal, Delaware or New
York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 and Section 5 hereof, and provided further
that Sections 1, 7 and 8 hereof shall survive such termination and remain in
full force and effect.
SECTION 11. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the Placement
Agent shall be directed to Sandler X'Xxxxx & Partners, L.P., as follows: 000
Xxxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxxx,
Principal, with a copy to Sidley Xxxxxx Xxxxx & Xxxx LLP, 000 Xxxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx X. Xxxxxxxx; and notices to the
Company shall be directed to FPIC Insurance Group, Inc., 000 Xxxxx Xxxxxx, Xxxxx
0000, Xxxxxxxxxxxx, Xxxxxxx 00000, Attention: Xxx X. Xxxxxx, with a copy to
Xxxxxxx Xxxxxxxx & Wood, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxx X. Xxxxxx.
SECTION 12. Parties. This Agreement shall inure to the benefit of
and be binding upon each of the Placement Agent and the Company and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Placement Agent, the Purchaser and the Company, and their respective
successors and the controlling persons and other persons referred to in Sections
1, 7 and 8 hereof and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the Placement
Agent, the Purchaser and the Company and their respective successors, and said
controlling persons and other persons and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation.
SECTION 13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES OF SAID STATE OTHER THAN SECTION 5-1401 OF THE
NEW YORK GENERAL OBLIGATIONS LAW.
THE COMPANY, ON BEHALF OF ITSELF AND ITS SUBSIDIARIES, HEREBY
IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE
16
FEDERAL AND NEW YORK STATE COURTS LOCATED IN THE CITY OF NEW YORK IN CONNECTION
WITH ANY SUIT, ACTION OR PROCEEDING RELATED TO THIS AGREEMENT OR ANY OF THE
MATTERS CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL
JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE COMPANY,
ON BEHALF OF ITSELF AND ITS SUBSIDIARIES, IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 14. Disclosure of Tax Treatment and Tax Structure.
Notwithstanding anything herein to the contrary, any party to this Agreement
(and each employee, representative or other agent of any party to this
Agreement) may disclose to any and all persons, without limitation of any kind,
the tax treatment and tax structure of the offering and all materials of any
kind (including opinions or other tax analyses) that are provided to it relating
to such tax treatment and tax structure. However, such information relating to
the tax treatment or tax structure is required to be kept confidential to the
extent necessary to comply with any applicable federal or state securities laws.
For this purpose, "tax structure" means any facts relevant to the federal income
tax treatment of the offering contemplated by this Agreement but does not
include information relating to the identity of the Offeror.
SECTION 15. Effect of Headings. The Section headings herein are for
convenience only and shall not affect the construction hereof.
17
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among the Placement Agent and the Company in accordance with its terms.
Very truly yours,
FPIC INSURANCE GROUP, INC.
By: /s/ Xxx X. Xxxxxx
---------------------------
Xxx X. Xxxxxx
Executive Vice President
and Chief Executive Officer
CONFIRMED AND ACCEPTED,
as of the date first above written:
SANDLER X'XXXXX & PARTNERS, L.P.
By: Sandler X'Xxxxx & Partners Corp.,
the sole general partner
By: /s/ Xxxxxxxxx X. Xxxxxx
---------------------------
Name:
Title:
Schedule 1(a)(xiv)
to the Placement Agreement by and between FPIC Insurance
Group, Inc. and Sandler X'Xxxxx & Partners, L.P.
The Company has pledged 100% of the issued and outstanding capital stock
of its wholly-owned subsidiaries, Employers Mutual, Inc., First Professionals
Insurance Company, Anesthesiologists Professional Assurance Company,
Administrators for the Professions, Inc. and FPIC Insurance Agency, Inc. The
stock was pledged as collateral to secure obligations incurred by the Company
under and with respect to a Revolving Credit and Term Loan Agreement, dated as
of August 31, 2001, as amended by that certain Amendment No. 1 to the Revolving
Credit and Term Loan Agreement, dated as of March 25, 2002, by that certain
Amendment No. 2 to the Revolving Credit and Term Loan Agreement, dated as of
November 21, 2002, and by that certain Amendment No. 3 to the Revolving Credit
and Term Loan Agreement, dated as of April 10, 2003 (the "Revolving Credit
Agreement"), by and among the Company, certain banks and other financial
institutions party thereto from time to time as lenders (the "Lenders") and
SunTrust Bank, as Administrative Agent and Collateral Agent for the Lenders (the
"Agent"). The pledge of the stock was made under a Stock Pledge Agreement, by
the Company in favor of the Agent, dated as of August 31, 2001, as supplemented
on January 11, 2003, and as amended by that certain Amendment No. 1 to Stock
Pledge Agreement by the Company in favor of the Agent, dated as of April 10,
2003. As of March 31 2003, approximately $45,750,000 was outstanding under the
Revolving Credit Agreement.
ANNEX A
Pursuant to Section 5(a) of the Placement Agreement, special counsel for the
Company shall deliver an opinion in substantially the following form:
1. The Company is incorporated and is validly existing as a
corporation in good standing under the laws of the State of Florida
2. The Company has corporate power and authority to (i) execute and
deliver, and to perform its obligations under, the Operative Documents to which
it is a party and (ii) issue and perform its obligations under the Senior Notes.
3. (i) Each Significant Subsidiary is validly existing and in good
standing under the laws of the jurisdiction of its organization; and (ii) to the
best of our knowledge, all of the issued and outstanding shares of capital stock
of each Significant Subsidiary are owned of record by the Company, directly or
through other subsidiaries.
4. No consent, approval, authorization or order of or filing,
registration or qualification with any Governmental Entity is required under any
law or regulation of the United States or the states in which the Company and
any Insurance Subsidiary is organized in connection with the authorization,
execution, delivery and performance by the Company of the Operative Documents or
the Senior Notes and the consummation of the transactions contemplated thereby
except as have already been obtained or made.
5. Each of the Placement Agreement and the Subscription Agreement
has been duly authorized, executed and delivered by the Company and, assuming
due authorization, execution and delivery by the Placement Agent and the
Purchaser, respectively, constitutes a valid and binding instrument of the
Company, enforceable against the Company in accordance with its terms, except as
rights to indemnity and contribution thereunder may be limited under applicable
law or public policy, and subject to the qualifications that (i) enforcement
thereof may be limited by bankruptcy, insolvency, receivership, reorganization,
liquidation, voidable preference, moratorium or other laws (including the laws
of fraudulent conveyance and transfer) or judicial decisions affecting the
enforcement of creditors' rights generally or the reorganization of financial
institutions and (ii) the enforceability of the obligations of the Company
thereunder is subject to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at law) and to
the effect of certain laws and judicial decisions upon the availability and
enforceability of certain remedies, including the remedies of specific
performance and self-help.
6. The Indenture has been duly authorized, executed, and delivered
by the Company and, assuming due authorization, execution and delivery by the
Indenture Trustee constitutes a valid and binding instrument of the Company,
enforceable against the Company in accordance with its terms, except as rights
to indemnity and contribution thereunder may be limited under applicable law or
public policy, and subject to the qualifications that (i) enforcement thereof
may be limited by bankruptcy, insolvency, receivership, reorganization,
liquidation, voidable preference, moratorium or other laws (including the laws
of fraudulent conveyance and transfer) or judicial decisions affecting the
enforcement of creditors' rights
A-1
generally or the reorganization of financial institutions and (ii) the
enforceability of the Company's obligations thereunder is subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law) and to the effect of certain laws and judicial
decisions upon the availability and enforceability of certain remedies,
including the remedies of specific performance and self-help.
7. The Senior Notes have been duly authorized for issuance by the
Company pursuant to the Indenture and, when executed, authenticated and
delivered in the manner provided for in the Indenture and paid for in accordance
with the Subscription Agreement therefor, will constitute valid and binding
obligations of the Company and will entitle the holders thereof to the benefits
of the Indenture, enforceable against the Company in accordance with their
terms, except as rights to indemnity and contribution thereunder may be limited
under applicable law or public policy, and subject to the qualifications that
(i) enforcement thereof may be limited by bankruptcy, insolvency, receivership,
reorganization, liquidation, voidable preference, moratorium or other laws
(including the laws of fraudulent conveyance and transfer) or judicial decisions
affecting the enforcement of creditors' rights generally or the reorganization
of financial institutions and (ii) the enforceability of the Company's
obligations thereunder is subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and to the effect of certain laws and judicial decisions upon the availability
and enforceability of certain remedies, including the remedies of specific
performance and self-help.
8. The execution, delivery and performance of the Operative
Documents and the Senior Notes by the Company and the consummation by the
Company of the transactions contemplated by the Operative Documents will not
result in any violation of the charter or bylaws of the Company, any Significant
Subsidiary or any Insurance Subsidiary.
9. Assuming (i) the accuracy of the representations and warranties,
and compliance with the agreements, contained in the Placement Agreement and the
Subscription Agreement and (ii) that the Senior Notes are sold in the manner
contemplated by, and in accordance with, the Placement Agreement, the
Subscription Agreement and the Indenture, it is not necessary in connection with
the offer, sale and delivery of the Senior Notes by the Company to the Purchaser
to register the Senior Notes under the 1933 Act or to qualify an indenture under
the Trust Indenture Act of 1939, as amended.
10. The Company is not, and, following the issuance of the Senior
Notes and the consummation of the transactions contemplated by the Operative
Documents and the application of the proceeds therefrom, the Company will not
be, an "investment company" or entity "controlled" by an "investment company",
in each case within the meaning of Section 3(a) of the 1940 Act, without regard
to Section 3(c) of the 1940 Act.
In rendering such opinions, such counsel may (A) state that its opinion is
limited to the laws of New York, the laws of the States of Florida and Missouri
and the Federal laws of the United States and (B) rely as to matters involving
the application of laws of any jurisdiction other than New York, Florida and
Missouri or the United States, to the extent deemed proper and specified in such
opinion, upon the opinion of other counsel of good standing believed to be
reliable and
A-2
who are satisfactory to you and as to matters of fact, to the extent deemed
proper, on certificates of responsible officers of the Company, the Insurance
Subsidiaries and public officials.
In the letter setting forth the foregoing opinions, or in a separate
letter, such counsel shall also state that:
To our knowledge, there are no restrictions or limitations on the
authority of any of the Insurance Subsidiaries to pay dividends to the Company,
directly or indirectly, other than general restrictions and limitations
applicable to all insurance companies domiciled in the state of organization of
such Insurance Subsidiary pursuant to applicable law.
To our knowledge, no Insurance License of any of the Insurance
Subsidiaries has been suspended, revoked, withdrawn, surrendered or limited in
anyway.
A-3
Annex B
Pursuant to Section 5(c) of the Placement Agreement, counsel to the
Indenture Trustee shall deliver an opinion in substantially the following form:
1. Wilmington Trust Company ("WTC") is a Delaware banking
corporation with trust powers, duly incorporated, validly existing and in good
standing under the laws of the State of Delaware, with requisite corporate power
and authority to execute and deliver, and to perform its obligations under, the
Indenture.
2. The execution, delivery, and performance by WTC of the Indenture
have been duly authorized by all necessary corporate action on the part of WTC,
and the Indenture has been duly executed and delivered by WTC.
3. The execution, delivery and performance of the Indenture by WTC
and the consummation of any of the transactions by WTC contemplated thereby are
not prohibited by (i) the charter or bylaws of WTC, (ii) any law or
administrative regulation of the State of Delaware or the United States of
America governing the banking and trust powers of WTC, or (iii) to our knowledge
(based and relying solely on the Officer Certificates), any agreements or
instruments to which WTC is a party or by which WTC is bound or any judgments or
order applicable to WTC.
4. The Senior Notes delivered on the date hereof have been
authenticated by due execution thereof and delivered by WTC, as Indenture
Trustee, in accordance with the Indenture.
5. None of the execution, delivery and performance by WTC of the
Indenture and the consummation of any of the transactions by WTC contemplated
thereby requires the consent, authorization, order or approval of, the
withholding of objection on the part of, the giving of notice to, the
registration with or the taking of any other action in respect of, any
governmental authority or agency, under any law or administrative regulation of
the State of Delaware or the United States of America governing the banking and
trust powers of WTC.
B-1
