EXHIBIT 10.10
SENIOR NOTES SUBSCRIPTION AGREEMENT
May 13, 2003
THIS SENIOR NOTES SUBSCRIPTION AGREEMENT (this "Subscription Agreement") is
made between Financial Industries Corporation (the "Company") and InCapS Funding
I, Ltd., a newly formed exempted company with limited liability established
under the laws of the Cayman Islands (the "Purchaser").
RECITALS:
A. The Company desires to issue $15,000,000 aggregate principal amount of
its Floating Rate Senior Notes (the "Senior Notes") (the "Offering"), to be
issued pursuant to an Indenture (the "Indenture"), by the Company, as Issuer,
Wilmington Trust Company, as Trustee and the holders, from time to time, of the
Senior Notes; and
B. The Purchaser intends to complete an offering of its securities (the
"CBO Offering") on or about May 22, 2003 or such other business day as may be
agreed upon by the Company and the placement agent ("Placement Agent")
identified in the Placement Agreement (the "Closing Date") and to use the
proceeds of the CBO Offering to, among other things, acquire the Senior Notes
from the Company and other senior notes, capital securities and surplus notes in
a quantity and with other particular characteristics, in the aggregate,
sufficient to permit the successful completion of the CBO Offering; and
C. In consideration of the premises and the mutual representations and
covenants hereinafter set forth, the parties hereto agree as follows:
ARTICLE I
PURCHASE AND SALE OF SENIOR NOTES
1.1. Upon the execution of this Subscription Agreement, subject to the
conditions precedent set forth in Section 1.5, the Purchaser hereby agrees to
purchase from the Company the Senior Notes at a price equal to $15,000,000 (the
"Purchase Price") and the Company agrees to sell $15,000,000 aggregate principal
amount of Senior Notes to the Purchaser for the Purchase Price. The rights and
preferences of the Senior Notes will be set forth in the Indenture in form and
substance reasonably acceptable to the Purchaser. The Purchase Price is payable
by the Purchaser on the Closing Date in immediately available funds to the
account designated by Wilmington Trust Company against delivery of the
aforementioned Senior Notes.
1.2. The certificate for the Senior Notes shall be authenticated by the
Trustee and delivered in definitive form by the Company on the Closing Date to
the Purchaser or its designee, shall be registered in the name of the Purchaser
and shall represent the aggregate principal amount of the Senior Notes being
purchased by
the Purchaser.
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1.3. Each of the provisions of the Placement Agreement between the Company
and the Placement Agent named therein, dated May 13, 2003 (the "Placement
Agreement'), including the definitions therein, are hereby incorporated by
reference into this Subscription Agreement. In addition, to the extent provided
for in the Placement Agreement, the Purchaser shall be entitled to the benefits
of the Placement Agreement and shall be entitled to enforce such obligations of
the Company under the Placement Agreement as fully as if the Purchaser were a
parry to such Placement Agreement, it being agreed between the parties that any
and all representations, covenants and other agreements made by the Company to
the Placement Agent in the Placement Agreement shall be deemed to have also been
made to the Purchaser.
1.4. If any condition specified herein or in the Placement Agreement shall
not have been fulfilled when and as required to be fulfilled by, on behalf of or
in respect of the Company or the Senior Notes, this Subscription Agreement may
be terminated by the Purchaser by notice to the Company at any time at or prior
to the Closing Date, and such termination shall be without liability of any
party to any other party except as provided in Section 5(h) of the Placement
Agreement and except that Sections 1, 7, and 8 of the Placement Agreement shall
survive any such termination and remain in full force and effect.
1.5. If the CBO Offering is not successfully completed for any reason,
including, without limitation, as a result of the inability of the Purchaser to
acquire sufficient senior notes, capital securities and surplus notes from the
Company and other issuers and sellers in a quantity and with other particular
characteristics, in the aggregate, sufficient to satisfy rating agency criteria
with respect to expected ratings on the securities to be issued by the Purchaser
and other criteria deemed necessary or advisable by the Purchaser, all
obligations of the Purchaser hereunder and any claims against the Purchaser
hereunder shall automatically terminate and be extinguished and shall not
thereafter revive.
1.6. Notwithstanding any other provision of this Subscription Agreement,
the obligations of the Purchaser hereunder are limited recourse obligations of
the Purchaser, payable solely from the proceeds of the CBO Offering, and if the
CBO Offering is not completed or the proceeds of the CBO Offering are
insufficient to satisfy the obligations of the Purchaser, all obligations of the
Purchaser hereunder and any claims against the Purchaser hereunder shall be
extinguished and shall not thereafter revive. No recourse shall be had to any
subscriber, officer, director, employee, administrator, shareholder,
incorporator or agent of the Purchaser or their respective successors or assigns
for any obligations hereunder. The Wilmington Trust Company and the Company
further agree (i) not to take any action in respect of any claims hereunder
against any subscriber, officer, director, employee, administrator, shareholder,
incorporator or agent of the Purchaser and (ii) not to institute against the
Purchaser any insolvency, bankruptcy, reorganization, liquidation or similar
proceedings in any jurisdiction until one year and one day or, if longer, the
applicable preference period then in effect, as the case may be, shall have
elapsed since the final payments to the holders of the securities issued by the
Purchaser in connection with the CBO Offering.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF PURCHASER
2.1. The Purchaser understands and acknowledges that (i) the Senior Notes
have not been and will not be registered under the Securities Act of 1933, as
amended (the "Securities Act"), or any other applicable securities laws, (ii)
the Senior Notes are being offered for sale by the Company in transactions not
requiring registration under the Securities Act, and (iii) the Senior Notes may
not be offered, sold, pledged or otherwise transferred by the Purchaser except
in compliance with the registration requirements of the Securities Act, or any
other applicable securities laws, pursuant to an exemption therefrom or in a
transaction not subject thereto.
2.2. The Purchaser represents and warrants that (i) it is not a "U.S.
person" (as such term is defined in Rule 902 under the Securities Act), (ii) it
is not acquiring the Senior Notes for the account or benefit of any U.S. person,
and (iii) the offer and sale of Senior Notes to the Purchaser constitutes an
"offshore transaction" under Regulation S under the Securities Act.
2.3. The Purchaser represents and warrants that it is purchasing the Senior
Notes for its own account, for investment and not with a view to, or for offer
or sale in connection with, any distribution thereof in violation of the
Securities Act or other applicable securities laws, subject to any requirement
of law that the disposition of its property be at all times within its control
and subject to its ability to resell such Senior Notes pursuant to an effective
registration statement under the Securities Act or pursuant to an exemption
therefrom or in a transaction not subject thereto, and the Purchaser agrees to
the legends and transfer restrictions applicable to the Senior Notes contained
in the Indenture.
2.4. The Purchaser is an exempted company with limited liability duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction where it is organized, with full power and authority to execute,
deliver and perform this Subscription Agreement, to make the representations and
warranties specified herein, and to consummate the transactions contemplated
herein and it has full right and power to subscribe for the Senior Notes.
2.5. No filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any governmental body, agency or court
having jurisdiction over the Purchaser, other than those that have been made or
obtained, is necessary or required for the performance by the Purchaser of its
obligations under this Subscription Agreement or to consummate the transactions
contemplated herein.
2.6. This Subscription Agreement has been duly authorized, executed and
delivered by the Purchaser.
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2.7. The Purchaser is not in violation of or default under any term of its
Memorandum of Association or Articles of Association, of any provision of any
mortgage, indenture, contract, agreement, instrument or contract to which it is
a party or by which it is bound or of any judgment, decree, order, writ or, to
its knowledge, any statute, rule or regulation applicable to the Purchaser which
would prevent the Purchaser from performing any material obligation set forth in
this Subscription Agreement. The execution, delivery and performance of and
compliance with this Subscription Agreement, and the consummation of the
transactions contemplated herein, will not, with or without the passage of time
or giving of notice, result in any such violation or default or the suspension,
revocation, impairment, forfeiture or non-renewal of any permit, license,
authorization or approval applicable to the Purchaser, its business or
operations or any of its assets or properties which would prevent the Purchaser
from performing any material obligations set forth in this Subscription
Agreement.
2.8. The Purchaser understands and acknowledges that the Company will rely
upon the truth and accuracy of the foregoing acknowledgments, representations,
warranties and agreements and agrees that if any of the foregoing
acknowledgments, representations, warranties or agreements cease to be accurate,
it shall promptly notify the Company.
ARTICLE III
MISCELLANEOUS
3.1. Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt requested, international courier, or delivered by hand against written
receipt therefor, or by facsimile transmission and confirmed by telephone, to
the following addresses, or such other address as may be furnished to the other
parties as herein provided:
To the Company: Financial Industries Corporation
0000 Xxxxx Xxxxx Xxxxxxxxx, Xxxxxxxx 0
Xxxxxx, XX 00000
Attention: Xxxxxxxx X. Xxxxxx
Telephone: 000-000-0000
Fax: 000-000-0000
To the Purchaser: InCapS Funding I, Ltd.
x/x Xxxxxx Xxxxxxx Xxxxxxx
X.X. Xxx 0000 XX
Xxxxxxxxxx House
South Church Street
Xxxxxx Town, Grand Cayman
Cayman Islands
Attention: Directors
Telephone: 000-000-0000
Fax: 000-000-0000
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To the Purchaser
for service of
all process: CT Corporation
000 Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, X.X. 00000
Unless otherwise expressly provided herein, notices shall be deemed to have
been given when received.
3.2. This Subscription Agreement shall not be changed, modified or amended
except by a writing signed by the parties hereto.
3.3. Upon the execution and delivery of this Subscription Agreement by the
parties hereto, this Subscription Agreement shall become a binding obligation of
each such party with respect to the matters covered herein, including those
incorporated by reference from the Placement Agreement.
3.4. THIS SUBSCRIPTION 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. EACH OF THE PURCHASER AND THE COMPANY, ON BEHALF OF
ITSELF AND ITS SUBSIDIARIES, HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF THE 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.
EACH OF THE PURCHASER AND 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.
3.5. The parties hereto agree to execute and deliver all such further
documents, agreements and instruments and take such other and further action as
may be necessary or appropriate to carry out the purposes and intent of this
Subscription Agreement.
3.6. This Subscription Agreement may be executed in one or more
counterparts each of which shall be deemed an original, but all of which shall
together constitute one and the same instrument.
Signatures appear on the following page
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IN WITNESS WHEREOF, this Subscription Agreement is agreed to and accepted
as of the day and year first written above.
FINANCIAL INDUSTRIES CORPORATION
By: __________________________________
Name:
Title:
IN WITNESS WHEREOF, I have set my hand the day and year first written
above.
INCAPS FUNDING I, LTD.
By: ________________________________
Name:
Title:
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