Exhibit 99.5
SECURITIES PURCHASE AGREEMENT
AGREEMENT, dated as of January 23, 1996 (this "Agreement"), between
Insurance Partners, L.P., a Delaware limited partnership ("IP") and Insurance
Partners Offshore (Bermuda), L.P., a Bermuda limited partnership ("IPB" and,
together with IP, "Sellers"), and MCLP I Limited Partnership, a Massachusetts
limited partnership ("Purchaser").
IP and IPB are the beneficial and record owners of the IP Securities and
the IPB Securities, respectively (each as defined herein). IP and IPB wish
to sell the IP Securities and the IPB Securities, respectively, and Purchaser
wishes to purchase such securities upon the terms and conditions set forth in
this Agreement.
Sellers and Purchaser desire to set forth herein the allocation of
certain rights under the Registration Rights Agreement, dated as of January
23, 1996 (as clarified, supplemental or otherwise amended, the "Registration
Rights Agreement"), by and among IP, IPB and Highland Insurance Group, a
Delaware corporation ("Highlands").
In consideration of the premises and the respective representations,
warranties and agreements contained herein, the parties hereto agree as
follows:
I. Sale and Purchase of Securities.
1.1 IP does hereby sell, convey, transfer, assign and deliver to
Purchaser, and Purchaser does hereby purchase, assume and accept from IP,
$309,450.54 principal amount (the "IP Debentures") of Highland's 10%
Convertible Subordinated Debentures due December 31, 2005 (the "Debentures"),
together with Highland's Common Stock Purchases Warrants, Series A (the
"Series A Warrants"), initially exercisable to purchase 19,549 shares (the
"IP Series A Warrants") of Highland's Common Stock, par value $.01 per share
(the "Common Stock"), and Highland's detachable Common Stock Purchase
Warrants, Series B (the "Series B Warrants"), initially exercisable to
purchase 5,144 shares of Common Stock (the "IP Series B Warrants"), for the
purchase price set forth on Annex I hereto, the receipt of which is hereby
acknowledged by IP. The IP Debentures, the IP Series A Warrants and the IP
Series B Warrants are hereinafter referred to as the "IP Securities."
1.2 IPB does hereby sell, convey, transfer, assign and deliver to
Purchaser, and Purchaser does hereby purchase, assume and accept from IPB,
$170,549.46 principal amount of the Debentures (the "IPB Debentures"),
together with Series A Warrants initially exercisable to purchase 10,774
shares of Common Stock (the "IPB Series A Warrants") and Series B Warrants
initially exercisable to purchase 2,835 shares of Common Stock (the "IPB
Series B Warrants), for the purchase price set forth on Annex I hereto, the
receipt of which is hereby acknowledged by IPB. The IPB Debentures, the IPB
Series A Warrants and the IPB Series B Warrants are hereinafter referred to
as the "IPB Securities," and, together with the IP Securities, the
"Securities."
2. Representations and Warranties.
2.1 Of Sellers. Each Seller represents and warrants to Purchaser
that such Seller has good and valid title to the Securities sold by such
Seller hereunder free and clear of any lien, encumbrance or other adverse
claim (other than as set forth in the Investment Agreement, dated as of
October 10, 1995, by and among Highlands, Haliburton Company, a Delaware
corporation, IP and IPB) and Purchaser will acquire good and valid title to
such Securities free and clear of any lien, encumbrance or other adverse
claim (except any restrictions imposed by the IP Pledge Agreement, the IP
Note, the IPB Pledge Agreement or the IPB Note (each as defined below), or
federal or state securities laws).
2.2 Of Purchaser.
2.2.1 Purchaser is able to bear the substantial economic
risks of investments made hereunder and can afford a complete loss of such
investments.
2.2.2 Purchaser shall make investments hereunder for its own
account for investment purposes only and not with a view to resale,
assignment or other distribution, in whole or in part. No other person has
or will have a direct or indirect beneficial interest in the Purchaser's
investments made hereunder.
2.2.3 Purchaser has such knowledge and experience in
financial, investment and business matters so as to enable it to evaluate the
merits and risks of the investments made hereunder and to make an informed
investment decision with respect thereto. Purchaser has carefully considered
and has, to the extent he believes such discussion necessary, discussed with
Purchaser's professional legal, tax, accounting and financial advisors the
suitability of the investments made hereunder for Purchaser's particular tax
and financial situation and has determined that the investments made
hereunder are suitable investments for the Purchaser.
3. Ancillary Documents. Concurrently with the execution and delivery
of this Agreement, (i) IP and Purchaser shall execute and deliver a pledge
agreement substantially in the form of Exhibit A hereto (the "IP Pledge
Agreement"), (ii) Purchaser shall execute and deliver a limited recourse
promissory note in favor of IP substantially in the form of Exhibit B hereto
(the "IP Note"), (iii) IPB and Purchaser shall execute and deliver a pledge
agreement substantially in the form of Exhibit C hereto (the "IPB Pledge
Agreement") and (iv) Purchaser shall execute and deliver a limited recourse
promissory note substantially in the form of Exhibit D hereto (the "IP
Note").
4. Registration Rights Agreement.
4.1 Purchaser hereby agrees that Sellers shall retain the sole
right under the Registration rights Agreement to (i) initiate or withdraw a
Demand Request (as defined in the Registration Rights Agreement) and (ii)
select the investment banking firm or firms to manage an underwritten
offering in the case of any Demand Registration (as defined in the
Registration Rights Agreement).
4.2 In the case of any Demand Registration, Sellers shall give
prompt initial notice to Purchaser of their intention to effect a Demand
Registration (which notice shall be given not less than fifteen (15) days
prior to the making of the Demand Request therefor) and such notice shall
offer Sellers the opportunity to have any or all of the Securities included
in such registration statement, subject to the limitations contained herein
and in the Registration Rights Agreement. In the event Sellers desire to
have Securities registered pursuant to such Demand Registration, Sellers will
so advise Purchasers in writing within ten (10) days after the date of
receipt of such notice from Purchasers. In the event that all Registrable
Securities (as defined in the Registration Rights Agreement) of Purchaser and
Sellers cannot be included in such Demand Registration in accordance with the
terms of the Registration Rights Agreement, the number of such Registrable
Securities requested to be included therein by Purchaser and Sellers shall be
reduced on a pro rata basis, based on their respective holdings of
Registrable Securities.
5. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICT OF LAWS.
6. Amendment and Modification. Subject to applicable law, this
Agreement may be amended, modified or supplemented only by written agreement
of each of the parties hereto with respect to any of the terms contained
herein.
7. Entire Agreement. This Agreement, together with the agreements
referenced herein, constitutes the entire agreement between the parties
hereto with respect to the subject matter hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the date first above written.
SELLERS:
INSURANCE PARTNERS, L.P.
By: Insurance GenPar, L.P., its
general partner
By: Insurance GenPar MGP, L.P.,
its general partner
By: Insurance GenPar MGP, Inc.,
its general partner
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
INSURANCE PARTNERS OFFSHORE
(BERMUDA), L.P.
By: Insurance GenPar (Bermuda), L.P., its
general partner
By: Insurance GenPar (Bermuda) MGP, L.P.,
its general partner
By: Insurance GenPar (Bermuda) MGP, Ltd.,
its general partner
By: /s/ Xxxxxx X. Xxxxxxxxx
Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
PURCHASER:
MCLP I LIMITED PARTNERSHIP
By: MCLP I Corp., its general
partner
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx
Title: Treasurer
ANNEX I
PURCHASE PRICES
SECURITY PRICE
IP Securities $309,450.54
IPB Securities $170,549.46
