EXHIBIT 1.1
[LLG&M DRAFT 6/05/97]
2,853,089 SHARES
(PLUS 427,963 SHARES TO COVER OVER-ALLOTMENTS, IF ANY)
THE SEIBELS XXXXX GROUP, INC.
COMMON STOCK
UNDERWRITING AGREEMENT
June [ ], 1997
ADVEST, INC.
XXXXX & XXXXXXXXXXXX, INC.
As Representatives (the "Representatives")
of the Several Underwriters
Named in SCHEDULE I hereto
c/o Advest, Inc.
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
Dear Sirs and Mesdames:
The Seibels Xxxxx Group, Inc., a South Carolina corporation (the "Company"),
proposes, subject to the terms and conditions stated herein, to sell to the
several Underwriters named in SCHEDULE I hereto (the "Underwriters"), and
certain shareholders of the Company (the "Selling Shareholders") named in
SCHEDULE II hereto severally propose to sell to the several Underwriters an
aggregate of 2,853,089 shares (the "Firm Shares") of the Company's Common Stock,
par value $1.00 per share (the "Common Stock"), of which 1,000,000 shares are to
be issued and sold by the Company and 1,853,089 shares are to be sold by the
Selling Shareholders, each Selling Shareholder selling the amount set forth
opposite such Selling Shareholder's name in SCHEDULE II hereto. The Company and
the Selling Shareholders are referred to collectively as the "Sellers."
In addition, in order to cover over-allotments in the sale of the Firm
Shares, the Underwriters may, at the Underwriters' election and subject to the
terms and conditions stated herein, purchase ratably in proportion to the
amounts set forth opposite their respective names in SCHEDULE I hereto, up to
427,963 additional shares of Common Stock from the Company (such additional
shares of Common Stock, the "Optional Shares"). The Firm Shares and the Optional
Shares are referred to collectively as the "Shares."
The Sellers, intending to be legally bound, hereby confirm their agreement
with the Underwriters as follows:
1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND SIGNIFICANT
SUBSIDIARIES. Each of the Company and South Carolina Insurance Company,
Xxxxxxx, Xxxxx & Company and Catawba Insurance Company (the "Significant
Subsidiaries"), jointly and severally represent and warrant to, and agree with,
each of the Underwriters that:
(a) A registration statement on Form S-2 (File No. 333-24081) with
respect to the Shares, including a prospectus subject to completion, has
been filed by the Company with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"), and
one or more amendments to such registration statement may have been so
filed. After the
execution of this Agreement, the Company will file with the Commission
either (i) if such registration statement, as it may have been amended, has
become effective under the Act and information has been omitted therefrom in
accordance with Rule 430A under the Act, a prospectus in the form most
recently included in an amendment to such registration statement (or, if no
such amendment shall have been filed, in such registration statement) with
such changes or insertions as are required by Rule 430A or permitted by Rule
424(b) under the Act and as have been provided to and approved by the
Representatives, or (ii) if such registration statement, as it may have been
amended, has not become effective under the Act, an amendment to such
registration statement, including a form of prospectus, a copy of which
amendment has been provided to and approved by the Representatives prior to
the execution of this Agreement. As used in this Agreement, the term
"Registration Statement" means such registration statement, as amended at
the time when it was or is declared effective, including (A) all financial
statements, schedules and exhibits thereto, (B) all documents (or portions
thereof) incorporated by reference therein, and (C) any information omitted
therefrom pursuant to Rule 430A under the Act and included in the Prospectus
(as hereinafter defined); the term "Preliminary Prospectus" means each
prospectus subject to completion included in such registration statement or
any amendment or post-effective amendment thereto (including the prospectus
subject to completion, if any, included in the Registration Statement at the
time it was or is declared effective), including all documents (or portions
thereof) incorporated by reference therein; and the term "Prospectus" means
the prospectus first filed with the Commission pursuant to Rule 424(b) under
the Act or, if no prospectus is required to be so filed, such term means the
prospectus included in the Registration Statement, in either case, including
all documents (or portions thereof) incorporated by reference therein. As
used herein, any reference to any statement or information as being "made,"
"included," "contained," "disclosed" or "set forth" in any Preliminary
Prospectus, a Prospectus or any amendment or supplement thereto, or the
Registration Statement or any amendment thereto (or other similar
references) shall refer both to information and statements actually
appearing in such document as well as information and statements
incorporated by reference therein.
(b) No order preventing or suspending the use of any Preliminary
Prospectus has been issued and no proceeding for that purpose has been
instituted or threatened by the Commission or the securities authority of
any state or other jurisdiction. If the Registration Statement has become
effective under the Act, no stop order suspending the effectiveness of the
Registration Statement or any part thereof has been issued and no proceeding
for that purpose has been instituted or, to the Company's knowledge,
threatened by the Commission or the securities authority of any state or
other jurisdiction.
(c) When any Preliminary Prospectus was filed with the Commission it
contained all statements required to be stated therein in accordance with,
and complied in all material respects with the requirements of, the Act and
the rules and regulations of the Commission thereunder. When the
Registration Statement or any amendment thereto was or is declared
effective, and at each Time of Delivery (as hereinafter defined), it (i)
contained and will contain all statements required to be stated therein in
accordance with, and all such statements, including, but not limited to, the
unaudited interim consolidated financial statements included or incorporated
by reference therein, complied or will comply in all material respects with
the requirements of, the Act and the rules and regulations of the Commission
thereunder and (ii) did not and will not include any untrue statement of a
material fact or omit to state any material fact necessary to make the
statements therein not misleading. When the Prospectus or any amendment or
supplement thereto is filed with the Commission pursuant to Rule 424(b) (or,
if the Prospectus or such amendment or supplement is not required to be so
filed, when the Registration Statement or the amendment thereto containing
such amendment or supplement to the Prospectus was or is declared effective)
and at each Time of Delivery, the Prospectus, as amended or supplemented at
any such time, (i) contained and will contain all statements required to
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be stated therein in accordance with, and complied or will comply in all
material respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder and (ii) did not and will not
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. The
foregoing provisions of this paragraph (c) do not apply to statements or
omissions made in the Registration Statement or any amendment thereto or the
Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through you specifically for use therein. It is understood that
the statements set forth in the Registration Statement or any amendment
thereto or the Prospectus or any amendment or supplement thereto (W) in the
last paragraph of the cover page of the Prospectus, (X) on the inside cover
page with respect to stabilization and passive market making, and (Y) in the
section entitled "Underwriters," regarding the Underwriters and the
underwriting arrangements constitute the only written information furnished
to the Company by or on behalf of any Underwriter through you specifically
for use in the Registration Statement or any amendment thereto or the
Prospectus and any amendment or supplement thereto, as the case may be.
(d) There are no legal or governmental proceedings pending or, to the
Company's knowledge, threatened to which the Company or any of its
subsidiaries listed on Exhibit A hereto (each a "Subsidiary" and
collectively, the "Subsidiaries") is a party or to which any of the
properties of the Company or any Subsidiary is subject that are required to
be described in the Registration Statement or the Prospectus and are not so
described or any statutes, regulations, contracts or other documents that
are required to be described in the Registration Statement or the Prospectus
or to be filed as exhibits to the Registration Statement that are not
described or filed as required.
(e) Each of the Company and the Subsidiaries has been duly incorporated,
is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation and has full corporate power and authority to
own or lease its properties and conduct its business as described in the
Prospectus. Each of the Company and the Significant Subsidiaries has full
corporate power and authority to enter into this Agreement and to perform
its obligations hereunder. Each of the Company and the Subsidiaries is duly
qualified to transact business as a foreign corporation and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification, except where the failure to so qualify would not have a
material adverse effect on the financial position, results of operations or
business of the Company and the Subsidiaries taken as a whole.
(f) The Company's authorized, issued and outstanding capital stock is as
disclosed in the Prospectus. All of the issued shares of capital stock of
the Company, have been duly authorized and validly issued, are fully paid
and nonassessable and conform to the descriptions of the Common Stock
contained in the Prospectus. None of the issued shares of capital stock of
the Company or any of the Subsidiaries has been issued or is owned or held
in violation of any statutory (or to the knowledge of the Company, any
other) preemptive rights of shareholders, and no person or entity (including
any holder of outstanding shares of capital stock of the Company or the
Subsidiaries) has any statutory (or to the knowledge of the Company, any
other) preemptive or other rights to subscribe for any of the Shares. None
of the capital stock of the Company has been issued in violation of
applicable federal or state securities laws.
(g) All of the issued shares of capital stock of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable and are owned beneficially by the Company or one of the
Subsidiaries, free and clear of all liens, security interests, pledges,
charges, encumbrances, defects, shareholders' agreements, voting agreements,
proxies, voting trusts, equities or claims of any nature whatsoever. Other
than the Subsidiaries and the equity securities held in the investment
portfolios of the Company and the Subsidiaries (the composition of which is
not materially different
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than the disclosures in the Prospectus as of specific dates), the Company
does not own, directly or indirectly, any capital stock or other equity
securities of any other corporation or any ownership interest in any
partnership, joint venture or other association.
(h) Except as disclosed in the Prospectus, there are no outstanding (i)
securities or obligations of the Company or any of the Subsidiaries
convertible into or exchangeable for any capital stock of the Company or any
of the Subsidiaries, (ii) warrants, rights or options to subscribe for or
purchase from the Company or any of the Subsidiaries any such capital stock
or any such convertible or exchangeable securities or obligations or (iii)
obligations of the Company or any of the Subsidiaries to issue any shares of
capital stock, any such convertible or exchangeable securities or
obligations, or any such warrants, rights or options.
(i) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, (i) neither the Company nor any
of the Subsidiaries has incurred any liabilities or obligations, direct or
contingent, or entered into any transactions, not in the ordinary course of
business, that are material to the Company and the Subsidiaries, (ii) the
Company has not purchased any of its outstanding capital stock or declared,
paid or otherwise made any dividend or distribution of any kind on its
capital stock, (iii) there has not been any material change in the capital
stock, long-term debt or short-term debt of the Company or any of the
Subsidiaries, and (iv) there has not been any material adverse change, or
any development involving a prospective material adverse change, in or
affecting the financial position, results of operations or business of the
Company and the Subsidiaries, in each case other than as disclosed in or
contemplated by the Prospectus.
(j) Except for the registration rights granted to the Avent Group,
Powers Group (as such terms are defined in the Prospectus) and to the
Selling Shareholders, there are no contracts, agreements or understandings
between the Company and any person granting such person the right to require
the Company to file a registration statement under the Act with respect to
any securities of the Company owned or to be owned by such person or, with
the exception of the Selling Shareholders, requiring the Company to include
such securities in the securities registered pursuant to the Registration
Statement (or any such right has been effectively waived) or requiring the
registration of any securities pursuant to any other registration statement
filed by the Company under the Act. Neither the filing of the Registration
Statement nor the offering or sale of Shares as contemplated by this
Agreement gives any security holder of the Company any rights for or
relating to the registration of any shares of Common Stock or any other
capital stock of the Company, except such as have been satisfied or waived.
(k) Neither the Company nor any of the Subsidiaries is, or with the
giving of notice or passage of time or both would be, in violation of its
articles of incorporation or bylaws or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement, lease
or other agreement or instrument to which the Company or any of the
Subsidiaries is a party or to which any of their respective properties or
assets are subject.
(l) The Company and the Subsidiaries have good and marketable title in
fee simple to all real property, if any, and good title to all personal
property owned by them, in each case free and clear of all liens, security
interests, pledges, charges, encumbrances, mortgages and defects, except
such as are disclosed in the Prospectus or such as would not have a material
adverse effect on the financial position, results of operations or business
of the Company and the Subsidiaries taken as a whole and do not interfere
with the use made or proposed to be made of such property by the Company and
the Subsidiaries; and any real property and buildings held under lease by
the Company or any of the Subsidiaries are held under valid, subsisting and
enforceable leases, with such exceptions as are disclosed in the Prospectus
or are not material and do not interfere with the use made or proposed to be
made of such property and buildings by the Company or any Subsidiary.
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(m) The Company does not require any consent, approval, authorization,
order or declaration of or from, or registration, qualification or filing
with, any court or governmental agency or body in connection with the sale
of the Shares or the consummation of the transactions contemplated by this
Agreement, except the registration of the Shares under the Act (which, if
the Registration Statement is not effective as of the time of execution
hereof, shall be obtained as provided in this Agreement) and such as may be
required by the National Association of Securities Dealers, Inc. (the
"NASD") or under state securities or blue sky laws in connection with the
offer, sale and distribution of the Shares by the Underwriters.
(n) Other than as disclosed in the Prospectus, there is no litigation,
arbitration, claim, proceeding (formal or informal) or investigation
(including without limitation, any insurance regulatory proceeding) pending
or, to the Company's knowledge, threatened in which the Company or any of
the Subsidiaries is a party or of which any of their respective properties
or assets are the subject which, if determined adversely to the Company or
any Subsidiary, would individually or in the aggregate have a material
adverse effect on the financial position, results of operations or business
of the Company and the Subsidiaries taken as a whole. Neither the Company
nor any of the Subsidiaries is in violation of, or in default with respect
to, any law, statute, rule, regulation, order, judgment or decree, except as
described in the Prospectus or such as do not and will not individually or
in the aggregate have a material adverse effect on the financial position,
results of operations or business of the Company and the Subsidiaries taken
as a whole.
(o) To the Company's knowledge, Xxxxxx Xxxxxxxx LLP, which has certified
certain financial statements of the Company and its consolidated
subsidiaries included in the Registration Statement and the Prospectus, are
independent public accountants as required by the Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and the respective
rules and regulations of the Commission thereunder.
(p) The consolidated financial statements and schedules (including the
related notes) of the Company and its consolidated subsidiaries included or
incorporated by reference in the Registration Statement, the Prospectus
and/or any Preliminary Prospectus were prepared in accordance with generally
accepted accounting principles consistently applied throughout the periods
involved and fairly present the financial position and results of operations
of the Company and the Subsidiaries, on a consolidated basis, at the dates
and for the periods presented. The selected financial data set forth under
the captions "Summary Consolidated Financial Data," "Selected Consolidated
Financial Data" and "Management's Discussion and Analysis of Financial
Condition and Results of Operations" in the Prospectus fairly present, on
the basis stated in the Prospectus, the information included therein, and
have been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement. The supporting notes and
schedules included in the Registration Statement, the Prospectus and/or any
Preliminary Prospectus fairly state in all material respects the information
required to be stated therein in relation to the financial statements taken
as a whole.
(q) This Agreement has been duly authorized, executed and delivered by
each of the Company and the Significant Subsidiaries, and, assuming due
execution by the Representatives of the Underwriters, constitutes the valid
and binding agreement of each of the Company and the Significant
Subsidiaries, enforceable against the Company and the Significant
Subsidiaries in accordance with its terms, subject, as to enforcement, to
applicable bankruptcy, insolvency, reorganization and moratorium laws and
other laws relating to or affecting the enforcement of creditors' rights
generally and to general equitable principles and except as the
enforceability of rights to indemnity and contribution under this Agreement
may be limited under applicable securities laws or the public policy
underlying such laws.
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(r) The sale of the Shares and the performance of this Agreement and the
consummation of the transactions herein contemplated will not (with or
without the giving of notice or the passage of time or both) (i) conflict
with or violate any term or provision of the articles of incorporation or
bylaws or other organizational documents of the Company or any Subsidiary,
(ii) result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which the Company or
any Subsidiary is a party or to which any of their respective properties or
assets is subject, (iii) conflict with or violate any provision of any law,
statute, rule or regulation or any order, judgment or decree of any court or
governmental agency or body having jurisdiction over the Company or any
Subsidiary or any of their respective properties or assets or (iv) result in
a breach, termination or lapse of the corporate power and authority of the
Company or any Subsidiary to own or lease and operate their respective
assets and properties and conduct their respective business as described in
the Prospectus.
(s) When the Shares to be sold by the Company hereunder have been duly
delivered against payment therefor as contemplated by this Agreement, the
Shares will be validly issued, fully paid and nonassessable, and the holders
thereof will not be subject to personal liability solely by reason of being
such holders. The certificates representing the Shares are in proper legal
form under, and conform in all respects to the requirements of, the South
Carolina Business Corporation Law of 1988, as amended.
(t) The Company has not distributed and will not distribute any offering
material in connection with the offering and sale of the Shares other than
the Registration Statement, a Preliminary Prospectus, the Prospectus and
other material, if any, permitted by the Act.
(u) Neither the Company nor any of its officers, directors or affiliates
has (i) taken, directly or indirectly, any action designed to cause or
result in, or that has constituted or might reasonably be expected to
constitute, the stabilization or manipulation of the price of any security
of the Company to facilitate the sale or resale of the Shares or (ii) since
the filing of the Registration Statement (A) sold, bid for, purchased or
paid anyone any compensation for soliciting purchases of, the Shares or (B)
paid or agreed to pay to any person any compensation for soliciting another
to purchase any other securities of the Company.
(v) None of the Company, any of the Subsidiaries, nor, to the Company's
knowledge, any director, officer, employee or other person associated with
or acting on behalf of the Company or any Subsidiary has, directly or
indirectly, violated any provision of the Foreign Corrupt Practices Act of
1977, as amended.
(w) The operations of the Company and the Subsidiaries with respect to
any real property currently leased or owned or by any means controlled by
the Company or any Subsidiary (the "Real Property") are in compliance in all
material respects with all federal, state, and local laws, ordinances,
rules, and regulations relating to occupational health and safety and the
environment (collectively, "Laws"), and the Company and the Subsidiaries
have not violated any Laws in a way which would have a material adverse
effect on the financial position, results of operations or business of the
Company and the Subsidiaries taken as a whole. Except as disclosed in the
Prospectus, there is no pending or, to the Company's knowledge, threatened
claim, litigation or any administrative agency proceeding, nor has the
Company or any Subsidiary received any written or oral notice from any
governmental entity or third party, that: (i) alleges a violation of any
Laws by the Company or any Subsidiary or (ii) alleges the Company or any
Subsidiary is a liable party under the Comprehensive Environmental Response,
Compensation, and Liability Act, 42 U.S.C. Section 9601 ET SEQ. or any state
superfund law.
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(x) Except for the two pending trademark applications submitted to the
United States Patent and Trademark Office by the Company for the
registration of the "SEIBELS XXXXX" xxxx and the "Clover Design" xxxx,
neither the Company nor any Subsidiary owns or has the right to use patents,
patent applications, trademarks, trademark applications, trade names,
service marks, copyrights, franchises, trade secrets, proprietary or other
confidential information and intangible properties and assets (collectively,
"Intangibles") the loss of any of which would have a material adverse effect
on the financial position, results of operations or business of the Company
and the Subsidiaries taken as a whole; and, to the knowledge of the Company,
neither the Company nor any Subsidiary has infringed or is infringing, and
neither the Company nor any Subsidiary has received notice of infringement
with respect to, asserted Intangibles of others.
(y) Each of the Company and the Subsidiaries makes and keeps accurate
books and records reflecting its assets and maintains internal accounting
controls which provide reasonable assurance that (i) transactions are
executed in accordance with management's authorization, (ii) transactions
are recorded as necessary to permit preparation of the Company's
consolidated financial statements in accordance with generally accepted
accounting principles and to maintain accountability for the assets of the
Company, (iii) access to the assets of the Company and each of the
Subsidiaries is permitted only in accordance with management's
authorization, and (iv) the recorded accountability for assets of the
Company and each of the Subsidiaries is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.
(z) The Company and the Subsidiaries have filed all foreign, federal,
state and local tax returns that are required to be filed by them and have
paid all taxes shown as due on such returns as well as all other taxes,
assessments and governmental charges that are due and payable; and no
material deficiency with respect to any such return has been assessed or
proposed.
(aa) Except for such plans that are expressly disclosed in the
Prospectus, the Company and the Subsidiaries do not maintain, contribute to
or have any material liability with respect to any employee benefit plan,
profit sharing plan, employee pension benefit plan, employee welfare benefit
plan, equity-based plan or deferred compensation plan or arrangement
("Plans") that are subject to the provisions of the Employee Retirement
Income Security Act of 1974, as amended, or the rules and regulations
thereunder ("ERISA"). All Plans are in compliance in all material respects
with all applicable laws, including but not limited to ERISA and the
Internal Revenue Code of 1986, as amended (the "Code"), and have been
operated and administered in all material respects in accordance with their
terms. No Plan is a defined benefit plan or multi employer plan. The Company
does not provide retiree life and/or retiree health benefits or coverage for
any employee or any beneficiary of any employee after such employee's
termination of employment, except as required by Section 4980B of the Code
or under a Plan which is intended to be "qualified" under Section 401(a) of
the Code. No material liability has been, or could reasonably be expected to
be, incurred under Title IV of ERISA or Section 412 of the Code by any
entity required to be aggregated with the Company or any of the Subsidiaries
pursuant to Section 4001(b) of ERISA and/or Section 414(b) or (c) of the
Code (and the regulations promulgated thereunder) with respect to any
"employee pension benefit plan" which is not a Plan. As used in this
subsection, the terms "defined benefit plan," "employee benefit plan,"
"employee pension benefit plan," "employee welfare benefit plan" and
"multiemployer plan" shall have the respective meanings assigned to such
terms in Section 3 of ERISA.
(bb) No material labor dispute exists with the Company's or any
Subsidiary's employees, and, to the Company's knowledge, no such labor
dispute is threatened.
(cc) The Company and the Subsidiaries have received all material
permits, licenses, franchises, authorizations, registrations, qualifications
and approvals (collectively, "Permits") of governmental or
7
regulatory authorities (including, without limitation, state and/or other
insurance regulatory authorities) as may be required of them to own their
properties and conduct their businesses in the manner described in the
Prospectus, subject to such qualifications as may be set forth in the
Prospectus; and the Company and the Subsidiaries have fulfilled and
performed all of their material obligations with respect to such Permits,
and no event has occurred which allows or, after notice or lapse of time or
both, would allow revocation or termination thereof or result in any other
material impairment of the rights of the holder of any such Permit, subject
in each case to such qualification as may be set forth in the Prospectus;
and, except as described in the Prospectus, such Permits contain no
restrictions that materially affect the ability of the Company and the
Subsidiaries to conduct their businesses and no insurance regulatory agency
or body has issued any order or decree impairing, restricting or prohibiting
the payment of dividends by any of the Subsidiaries to the Company.
(dd) The Company and each of the Subsidiaries has filed, or has had
filed on its behalf, on a timely basis, all materials, reports, documents
and information, including but not limited to annual reports and reports of
examination with each applicable insurance regulatory authority, board or
agency, which are required to be filed by it, except where the failure to
have timely filed such materials, reports, documents and information would
not have a material adverse effect on the financial position, results of
operations or business of the Company and the Subsidiaries taken as a whole.
(ee) Neither the Company nor any Subsidiary is an "investment company"
or a company "controlled" by an investment company as such terms are defined
in Sections 3(a) and 2(a)(9), respectively, of the Investment Company Act of
1940, as amended (the "Investment Company Act"), and, if the Company or any
Subsidiary conducts its business as set forth in the Registration Statement
and the Prospectus, will not become an "investment company" and will not be
required to register under the Investment Company Act.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLING SHAREHOLDERS. Each of the
Selling Shareholders jointly and severally represents and warrants to, and
agrees with, each of the Underwriters that:
(a) This Agreement has been duly authorized, executed and delivered by
or on behalf of such Selling Shareholder, and assuming due execution by the
Company and the Representatives of the Underwriters, constitutes the valid
and binding agreement of such Selling Shareholder, enforceable against such
Selling Shareholder in accordance with its terms, subject, as to
enforcement, to applicable bankruptcy, insolvency, reorganization and
moratorium laws and other laws relating to or affecting the enforcement of
creditors' rights generally and to general equitable principles and except
as the enforcement of rights to indemnity and contribution under this
Agreement may be limited under applicable securities laws or the public
policy underlying such laws.
(b) The execution and delivery by such Selling Shareholder of, and the
performance by such Selling Shareholder of its obligations under, this
Agreement, the Custody Agreement signed by such Selling Shareholder and
American Stock Transfer and Trust Company, as Custodian, relating to the
deposit of the Shares to be sold by such Selling Shareholder and the Power
of Attorney appointing a certain individual as such Selling Shareholder's
attorney-in-fact to the extent set forth therein, relating to the
transactions contemplated hereby and by the Registration Statement (the
"Custody Agreement and Power of Attorney") will not (with or without the
giving of notice or the passage of time or both) (i) conflict with any term
or provision of such Selling Shareholder's articles of incorporation or
bylaws or other organizational documents, as amended (if such Selling
Shareholder is a corporation), (ii) result in a breach or violation of any
of the terms or provisions of, or constitute a default under, any indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument to which the Selling Shareholder is a party or to which its
properties or assets is subject or (iii) conflict with or violate any law,
statute, rule or regulation or any order, judgment or decree of any court or
8
governmental agency or body having jurisdiction over such Selling
Shareholder or any of such Selling Shareholder's properties or assets.
(c) Such Selling Shareholder has, and on the First Time of Delivery (as
hereinafter defined) will have, valid title to the Shares to be sold by such
Selling Shareholder and the legal right and power, and all authorization and
approval required by law, to enter into this Agreement and the Custody
Agreement and the Power of Attorney and to sell, transfer and deliver the
Shares to be sold by such Selling Shareholder.
(d) The Custody Agreement and the Power of Attorney has been duly
authorized, executed and delivered by such Selling Shareholder and is a
valid and binding agreement of such Selling Shareholder.
(e) Delivery of the Shares to be sold by such Selling Shareholder
pursuant to this Agreement will pass title to such Shares free and clear of
all liens, security interests, pledges, charges, equities and other
encumbrances.
(f) Such Selling Shareholder does not require any consent, approval,
authorization, order or declaration of or from, or registration,
qualification or filing with, any court or governmental agency or body in
connection with the sale of the Shares to be sold by such Selling
Shareholder or the consummation of the transactions contemplated by this
Agreement, except for the registration of the Shares under the Act, the
Exchange Act and such as may be required under state securities or blue sky
laws in connection with the offer, sale and distribution of the Shares by
the Underwriters.
(g) Such Selling Shareholder has not (i) taken, directly or indirectly,
any action designed to cause or result in, or that has constituted or might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale of
the Shares or (ii) since the filing of the Registration Statement (A) sold,
bid for, purchased or paid anyone any compensation for soliciting purchases
of, the Shares or (B) paid or agreed to pay to any person any compensation
for soliciting another to purchase any other securities of the Company.
(h) While none of the Selling Shareholders, in its individual or
representative capacity, participated in the preparation of the Registration
Statement or believes that any Selling Shareholder, in its individual or
representative capacity, is an "affiliate" of the Company, as such term is
defined in Rule 405 under the Act, to the knowledge of the Selling
Shareholders, when the Registration Statement or any amendment thereto was
or is declared effective, and at each Time of Delivery (as hereinafter
defined), it did not and will not include any untrue statement of a material
fact or omit to state any material fact necessary to make the statements
therein not misleading. When the Prospectus or any amendment or supplement
thereto is filed with the Commission pursuant to Rule 424(b) (or, if the
Prospectus or such amendment or supplement is not required to be so filed,
when the Registration Statement or the amendment thereto containing such
amendment or supplement to the Prospectus was or is declared effective) and
at each Time of Delivery, the Prospectus, as amended or supplemented at any
such time, to the knowledge of the Selling Shareholders did not and will not
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. The
foregoing provisions of this paragraph (i) do not apply to statements or
omissions made in the Registration Statement or any amendment thereto or the
Prospectus or any amendment or supplement thereto in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through you specifically for use therein. It is understood that
the statements set forth in the Registration Statement or any amendment
thereto or the Prospectus or any amendment or supplement thereto (W) in the
last paragraph of the cover page of the Prospectus, (X) on the inside cover
page with respect to stabilization and passive market making and (Y) in the
section entitled "Underwriting," regarding the Underwriters and the
underwriting arrangements constitute the only written information furnished
to the Company by or on behalf of any Underwriter through you
9
specifically for use in the Registration Statement or any amendment thereto
or the Prospectus and any amendment or supplement thereto, as the case may
be.
3. PURCHASE AND SALE OF SHARES.
(a) Subject to the terms and conditions herein set forth, the Sellers,
severally and not jointly, agree to sell to each of the Underwriters, and
each of the Underwriters agrees, severally and not jointly, to purchase from
the Sellers, at a purchase price of [ ] Dollars and [ ] cents ($[ ]) per
share (the "Per Share Price"), the number of Firm Shares (to be adjusted by
you so as to eliminate fractional shares) determined by multiplying the
aggregate number of Firm Shares to be sold by the Company as set forth in
the first paragraph of this Agreement and by each of the Selling
Shareholders as set forth in Schedule II hereto by a fraction, the numerator
of which is the aggregate number of Firm Shares to be purchased by such
Underwriter as set forth opposite the name of such Underwriter in Schedule I
hereto, and the denominator of which is the aggregate number of Firm Shares
to be purchased by the several Underwriters hereunder.
(b) The Company hereby grants to the Underwriters the right to purchase
at their election in whole or in part (but only once) up to 427,963 Optional
Shares, at the Per Share Price, for the sole purpose of covering
over-allotments in the sale of the Firm Shares. Any such election to
purchase Optional Shares may be exercised by written notice from the
Representatives to the Company, given within a period of 30 calendar days
after the date of this Agreement and setting forth the aggregate number of
Optional Shares to be purchased and the date on which such Optional Shares
are to be delivered, as determined by you but in no event earlier than the
First Time of Delivery (as hereinafter defined) or, unless the
Representatives otherwise agree in writing, earlier than two or later than
ten business days after the date of such notice. In the event the
Underwriters elect to purchase all or a portion of the Optional Shares, the
Company agrees to furnish or cause to be furnished to the Representatives
the certificates, letters and opinions, and to satisfy all conditions, set
forth in Section 9 hereof at each Subsequent Time of Delivery (as
hereinafter defined).
(c) In making this Agreement, each Underwriter is contracting severally,
and not jointly, and except as provided in Sections 3(b) and 11 hereof, the
agreement of each Underwriter is to purchase only that number of shares
specified with respect to that Underwriter in Schedule I hereto. No
Underwriter shall be under any obligation to purchase any Optional Shares
prior to an exercise of the option with respect to such Shares granted
pursuant to Section 3(b) hereof.
4. OFFERING BY THE UNDERWRITERS. Upon the authorization by the
Representatives of the release of the Shares, the several Underwriters propose
to offer the Shares for sale upon the terms and conditions disclosed in the
Prospectus (the "Offering").
5. DELIVERY OF SHARES; CLOSING.
(a) Certificates in definitive form for the Shares to be purchased by
each Underwriter hereunder, and in such denominations and registered in such
names as the Representatives may request upon at least 48 hours' prior
notice to the Company, shall be delivered by or on behalf of the Sellers, to
the Representatives for the account of such Underwriter, against payment by
such Underwriter on its behalf of the purchase price therefor by wire
transfer of immediately available funds to such accounts as each Seller
shall designate in writing. The closing of the sale and purchase of the
Shares shall be held at the offices of LeBoeuf, Lamb, Xxxxxx & XxxXxx,
L.L.P., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, except that physical
delivery of such certificates shall be made at the office of The Depository
Trust Company, 00 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The time and
date of such delivery and payment shall be, with respect to the Firm Shares,
at 10:00 a.m., New York, New York time, on the third (3rd) full business day
after this Agreement is executed or at such other time and date as the
Representatives and the Company may agree upon in writing, and, with respect
to the
10
Optional Shares, at 10:00 a.m., New York, New York time, on the date
specified by the Representatives in the written notice given by the
Representatives of the Underwriters' election to purchase all or part of
such Optional Shares, or at such other time and date as the Representatives
and the Company may agree upon in writing. Such time and date for delivery
of the Firm Shares is herein called the "First Time of Delivery," such time
and date for delivery of any Optional Shares, if not the First Time of
Delivery, is herein called a "Subsequent Time of Delivery," and each such
time and date for delivery is herein called a "Time of Delivery." The
Sellers will make such certificates available for checking and packaging at
least 24 hours prior to each Time of Delivery at the office of The
Depository Trust Company, 00 Xxxxx Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 or
at such other location specified by you in writing at least 48 hours prior
to such Time of Delivery.
(b) The Sellers shall not be obligated to sell or deliver the Firm
Shares except upon tender of payment by the Underwriters for all the Firm
Shares agreed to be purchased by them hereunder. The Sellers shall not be
obligated to sell or deliver the Shares unless the Registration Statement
shall have become effective and no stop order shall have been issued or
proceedings instituted, pending or contemplated, as set forth in Section
9(a) below.
6. COVENANTS OF THE COMPANY. The Company covenants and agrees with each of
the Underwriters that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective prior to the execution and delivery of this
Agreement, to become effective. If the Registration Statement has been
declared effective prior to the execution and delivery of this Agreement,
the Company will file the Prospectus with the Commission pursuant to and in
accordance with subparagraph (1) (or, if applicable and if consented to by
you, subparagraph (4)) of Rule 424(b) within the time period required under
Rule 424(b) under the Act. The Company will advise you promptly of any such
filing pursuant to Rule 424(b). The Company will file timely all reports and
any definitive proxy or information statements required to be filed by the
Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act.
(b) The Company will not file with the Commission the prospectus or the
amendment referred to in Section 1(a) hereof, any amendment or supplement to
the Prospectus or any amendment to the Registration Statement unless you
have received a reasonable period of time to review any such proposed
amendment or supplement and consented to the filing thereof and will use its
best efforts to cause any such amendment to the Registration Statement to be
declared effective as promptly as possible. Upon the request of the
Representatives or counsel for the Underwriters, the Company will promptly
prepare and file with the Commission, in accordance with the rules and
regulations of the Commission, any amendments to the Registration Statement
or amendments or supplements to the Prospectus that may be necessary or
advisable in connection with the distribution of the Shares by the several
Underwriters and will use its best efforts to cause any such amendment to
the Registration Statement to be declared effective as promptly as possible.
If required, the Company will file any amendment or supplement to the
Prospectus with the Commission in the manner and within the time period
required by Rule 424(b) under the Act. The Company will advise the
Representatives, promptly after receiving notice thereof, of the time when
the Registration Statement or any amendment thereto has been filed or
declared effective or the Prospectus or any amendment or supplement thereto
has been filed and will provide evidence to the Representatives of each such
filing or effectiveness.
(c) The Company will advise the Representatives promptly after receiving
notice or obtaining knowledge of (i) when any post-effective amendment to
the Registration Statement is filed with the Commission, (ii) the receipt of
any comments from the Commission concerning the Registration Statement,
(iii) when any post-effective amendment to the Registration Statement
becomes effective, or when any supplement to the Prospectus or any amended
Prospectus has been filed, (iv) the issuance
11
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or any part thereof or any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or any
amendment or supplement thereto, (v) the suspension of the qualification of
the Shares for offer or sale in any jurisdiction or of the initiation or
threatening of any proceeding for any such purpose, (vi) any request made by
the Commission or any securities authority of any other jurisdiction for
amending the Registration Statement, for amending or supplementing the
Prospectus or for additional information. The Company will use its best
efforts to prevent the issuance of any such stop order or suspension and, if
any such stop order or suspension is issued, to obtain the withdrawal
thereof as promptly as possible.
(d) If the delivery of a prospectus relating to the Shares is required
under the Act at any time prior to the expiration of nine months after the
date of the Prospectus and if at such time any events have occurred as a
result of which the Prospectus as then amended or supplemented would include
an 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 if for any
reason it is necessary during such same period to amend or supplement the
Prospectus, the Company will promptly notify the Representatives and upon
their request (but at the Company's expense) prepare and file with the
Commission an amendment or supplement to the Prospectus that corrects such
statement or omission or effects such compliance and will furnish without
charge to each Underwriter and to any dealer in securities as many copies of
such amended or supplemented Prospectus as the Representatives may from time
to time reasonably request.
(e) The Company promptly from time to time will take such action as the
Representatives may reasonably request to qualify the Shares for offering
and sale under the securities or blue sky laws of such jurisdictions as the
Representatives may request and will continue such qualifications in effect
for as long as may be necessary to complete the distribution of the Shares,
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction. The Company will file such statements and
reports as may be required by the laws of each jurisdiction in which the
Shares have been qualified as above provided.
(f) The Company will promptly provide the Representatives, without
charge, (i) three manually executed copies of the Registration Statement as
originally filed with the Commission and of each amendment thereto,
including all exhibits and all documents or information incorporated by
reference therein, (ii) for each other Underwriter a conformed copy of the
Registration Statement as originally filed and of each amendment thereto,
without exhibits but including all documents or information incorporated by
reference therein and (iii) so long as a prospectus relating to the Shares
is required to be delivered under the Act, as many copies of each
Preliminary Prospectus or the Prospectus or any amendment or supplement
thereto as the Representatives may reasonably request.
(g) As soon as practicable, but in any event not later than forty-five
(45) days after the end of its fiscal quarter in which the first anniversary
of the effective date of the Registration Statement occurs, the Company will
make generally available to its security holders an earnings statement of
the Company and its subsidiaries, if any, covering a period of at least 12
months beginning after the effective date of the Registration Statement
(which need not be audited) complying with Section 11(a) of the Act and the
rules and regulations thereunder.
(h) During the period beginning from the date hereof and continuing to
and including the date 180 days after the date of the Prospectus, the
Company will not, and will cause its officers and directors not to, without
the prior written consent of Advest, Inc., as representative of the
Underwriters, directly or indirectly (i) offer, sell, contract to sell or
otherwise dispose of, any shares of Common Stock or securities convertible
into or exercisable or exchangeable for shares of Common Stock or (ii) enter
into any swap or other agreement or any transaction that transfers, in whole
or in part, the
12
economic consequences of ownership of shares of Common Stock whether any
such swap or other agreement is to be settled by delivery of shares of
Common Stock, other securities, cash or otherwise; except for (A) the sale
of the Shares hereunder; (B) the issuance of 220,000 shares of convertible
nonvoting special (preferred) stock in connection with the Company's
proposed acquisition of The Innovative Company as disclosed in the
Prospectus;(C) the issuance of Common Stock upon the exercise of stock
options or warrants or the conversion of convertible securities outstanding
on the date of this Agreement to the extent that such stock options,
warrants and convertible securities are disclosed in the Prospectus; or (D)
the grant to employees of stock options to purchase Common Stock which are
not exercisable within such 180 days.
(i) During the period of three years after the effective date of the
Registration Statement, the Company will furnish to the Representatives and,
upon request, to each of the other Underwriters, without charge, (i) copies
of all reports or other communications (financial or other) furnished to
shareholders and (ii) as soon as they are available, copies of any reports
and financial statements furnished to or filed with the Commission, the NASD
or any national securities exchange.
(j) Prior to the termination of the underwriting syndicate contemplated
by this Agreement, neither the Company nor any of its officers, directors or
affiliates will (i) take, directly or indirectly, any action designed to
cause or to result in, or that might reasonably be expected to cause or
result in, the stabilization or manipulation of the price of any security of
the Company or (ii) sell, bid for, purchase or pay anyone any compensation
for soliciting purchases of, the Shares.
(k) In case of any event, at any time within the period during which a
prospectus is required to be delivered under the Act, as a result of which
any Preliminary Prospectus or the Prospectus, as then amended or
supplemented, would contain an untrue statement of a material fact, or omit
to state any material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading, or, if it is necessary at any time to amend any Preliminary
Prospectus or the Prospectus to comply with the Act or any applicable
securities or blue sky laws, the Company promptly will prepare and file with
the Commission, and any applicable state securities commission, an
amendment, supplement or document that will correct such statement or
omission or effect such compliance and will furnish to the several
Underwriters such number of copies of such amendment(s), supplement(s) or
document(s) as the Representatives may reasonably request. For purposes of
this subsection, the Company will provide such information to the
Representatives, the Underwriters' counsel and counsel to the Company as
shall be necessary to enable such persons to consult with the Company with
respect to the need to amend or supplement the Registration Statement, any
Preliminary Prospectus or the Prospectus or file any document, and shall
furnish to the Representatives and the Underwriters' counsel such further
information as each may from time to time reasonably request.
(l) The Company will use its best efforts to maintain the qualification
or listing of the shares of Common Stock (including, without limitation, the
Shares) on The Nasdaq Stock Market.
7. COVENANTS OF THE SELLING SHAREHOLDERS. Each of the Selling Shareholders
covenants and agrees with each of the Underwriters that:
(a) Such Selling Shareholder will cooperate to the extent necessary to
cause the Registration Statement, if not effective prior to the execution
and delivery of this Agreement, to become effective.
(b) Such Selling Shareholder will pay all Federal and other taxes, if
any on the transfer or sale of such Shares that are sold by the Selling
Shareholder.
(c) Such Selling Shareholder will do or perform all things reasonably
required to be done or performed by the Selling Shareholder prior to the
Closing Date to satisfy all conditions precedent to the delivery of the
Shares pursuant to this Agreement.
13
(d) During the period beginning from the date hereof and continuing to
and including the date 180 days after the date of the Prospectus, such
Selling Shareholder will not, without the prior written consent of Advest,
Inc., as representative of the Underwriters, directly or indirectly (1)
offer, sell, contract to sell or otherwise dispose of, any shares of Common
Stock or securities convertible into or exercisable or exchangeable for
shares of Common Stock or (ii) enter into any swap or other agreement or any
transaction that transfers, in whole or in part, the economic consequences
of ownership of shares of Common Stock whether any such swap or other
agreement is to be settled by delivery of shares of Common Stock, other
securities, cash or otherwise.
(e) Such Selling Shareholder has not taken, nor will it take, directly
or indirectly, any action designed to or that might reasonably be expected
to cause or result in stabilization or manipulation of the price of Common
Stock to facilitate the sale or resale of the Shares.
(f) Such Selling Shareholder will advise you promptly upon becoming
aware, and if requested by you, will confirm such advice in writing, of any
change which may come to the attention of such Selling Shareholder with
respect to the Company's financial position, results of operation or
business, or of the happening of any event, as a result of which the
Registration Statement or the Prospectus would contain an untrue statement
of a material fact, or omit to state any material fact necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading, or if it is necessary to amend the Registration
Statement or the Prospectus in order to state a material fact required by
the Act or the regulations thereunder to be stated therein or necessary to
make the statements therein not misleading or of the necessity to amend the
Prospectus to comply with the Act or any other law.
8. EXPENSES.
(a) The Company will pay all costs and expenses incident to the
performance of the obligations of the Company under this Agreement, whether
or not the transactions contemplated hereby are consummated or this
Agreement is terminated pursuant to Section 12 hereof, including, without
limitation, all costs and expenses incident to (i) the printing of and
mailing expenses associated with the Registration Statement, the Preliminary
Prospectus and the Prospectus and any amendments or supplements thereto,
this Agreement, the Agreement among Underwriters, the Underwriters'
Questionnaire submitted to each of the Underwriters by the Representatives
in connection herewith, the power of attorney executed by each of the
Underwriters in favor of Advest, Inc. in connection herewith, the Dealer
Agreement and related documents (collectively, the "Underwriting Documents")
and the preliminary Blue Sky memorandum relating to the offering prepared by
LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., counsel to the Underwriters
(collectively with any supplement thereto, the "Preliminary Blue Sky
Memorandum"); (ii) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares
under the Act and all expenses incurred in connection with the preparation
and, if applicable, all expenses incurred in connection with the filing of
the Registration Statement (including all amendments thereto), any
Preliminary Prospectus, the Prospectus and any amendments and supplements
thereto, the Underwriting Documents and the Preliminary Blue Sky Memorandum;
(iii) the delivery of copies of the foregoing documents to the Underwriters;
(iv) the filing fees of the Commission and the NASD relating to the Shares;
(v) the preparation, issuance and delivery to the Underwriters of any
certificates evidencing the Shares, including transfer agent's and
registrar's fees; (vi) the qualification of the Shares for offering and sale
under state securities and blue sky laws, including filing fees and fees and
disbursements of counsel for the Underwriters (and local counsel therefor)
relating thereto; (vii) any listing of the Shares on The Nasdaq Stock
Market; (viii) any expenses for travel, lodging and meals incurred by the
Company and any of its officers, directors and employees in connection with
any meetings with prospective investors in the Shares; and (ix) all other
costs and expenses reasonably incident to the performance of the Company's
obligations hereunder that are not otherwise specifically provided for in
this Section 8. [Except as provided in this Section 8(a) and Section 12(a)
hereof,
14
the Underwriters will pay all of their out-of-pocket expenses and costs,
including fees of their counsel, incurred in connection with the offering
and sale of the Shares.]
(b) Each Selling Shareholder, severally and not jointly, agrees to pay
or cause to be paid all taxes, if any, on the transfer and sale of the
Shares being sold by such Selling Shareholder.
9. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The obligations of the
Underwriters hereunder to purchase and pay for the Shares to be delivered at
each Time of Delivery shall be subject, in their discretion, to the accuracy, in
all material respects, of the representations and warranties of each of the
Company, the Significant Subsidiaries and the Selling Shareholders contained
herein as of the date hereof and as of such Time of Delivery, to the accuracy,
in all material respects, of the statements of the Company's officers made
pursuant to the provisions hereof, to the performance, in all material respects,
by the Company of its covenants and agreements hereunder, and to the following
additional conditions precedent:
(a) If the registration statement as amended to date has not become
effective prior to the execution of this Agreement, such registration
statement shall have been declared effective not later than 11:00 a.m.,
Hartford, Connecticut time, on the date of this Agreement or such later date
and/or time as shall have been consented to by you in writing. If required,
the Prospectus and any amendment or supplement thereto shall have been filed
with the Commission pursuant to Rule 424(b) within the applicable time
period prescribed for such filing and in accordance with Section 6(a) of
this Agreement; no stop order suspending the effectiveness of the
Registration Statement or any part thereof shall have been issued and no
proceedings for that purpose shall have been instituted, threatened or, to
the knowledge of the Company and the Representatives, contemplated by the
Commission; and all requests for additional information on the part of the
Commission shall have been complied with to your reasonable satisfaction.
(b) The Representatives shall have received a copy of an executed
lock-up agreement from the Company and each of the Company's officers and
directors and certain shareholders of Common Stock.
(c) You shall have received an opinion, dated such Time of Delivery, of
Xxxx X. XxXxxxx, Legal Counsel of the Company, in form and substance
satisfactory to you and your counsel, to the effect that:
(i) The Company is duly qualified to transact business as a foreign
corporation and is in good standing under the laws of each jurisdiction
in which it owns or leases property, or conducts any business, so as to
require such qualification, except where the failure to so qualify would
not have a material adverse effect on the financial position, results of
operations or business of the Company and the Subsidiaries taken as a
whole.
(ii) Each of South Carolina Insurance Company, Xxxxxxx, Xxxxx &
Company, Catawba Insurance Company, Consolidated American Insurance
Company, Seibels Xxxxx Specialty, Inc., Seibels Xxxxx Service
Corporation, Investors National Life Insurance Company of South Carolina
and Policy Finance Company (each, a "South Carolina Subsidiary" and
collectively, the "South Carolina Subsidiaries") is duly qualified to
transact business as a foreign corporation and is in good standing under
the laws of each jurisdiction in which it owns or leases property, or
conducts any business, so as to require such qualification, except where
the failure to so qualify would not have a material adverse effect on the
financial position, results of operations or business of the Company and
the Subsidiaries taken as a whole.
(iii) The Company has authorized 12,500,000 shares of Common Stock,
$1.00 par value per share. All of the issued shares of Common Stock of
the Company have been duly authorized and validly issued, are fully paid
and nonassessable and conform to the description of the Common Stock
contained in the Prospectus.
15
(iv) All of the issued shares of capital stock of each of the South
Carolina Subsidiaries have been duly authorized and validly issued and
are fully paid and nonassessable.
(v) To such counsel's knowledge, neither the Company nor any of the
Subsidiaries is in violation of, or in default with respect to, any law,
statute, rule, regulation, order, judgment or decree, except as described
in the Prospectus or such as do not and will not individually or in the
aggregate have a material adverse effect on the financial position,
results of operations or business of the Company and the Subsidiaries
taken as a whole, nor is the Company or any of the Subsidiaries required
to take any action in order to avoid any such violation or default.
(vi) To such counsel's knowledge, the Company and the Subsidiaries
have received all permits, licenses, franchises, authorizations,
registrations, qualifications and approvals (collectively, "permits") of
governmental or regulatory authorities (including, without limitation,
state and/or other insurance regulatory authorities) as may be required
of them to own their properties and to conduct their businesses in the
manner described in the Prospectus, subject to such qualifications as may
be set forth in the Prospectus; to such counsel's knowledge, the Company
and the Subsidiaries have fulfilled and performed all of their material
obligations with respect to such permits and no event has occurred which
allows, or after notice or lapse of time or both would allow, revocation
or termination thereof or result in any other material impairment of the
rights of the holder of any such permits, subject in each case to such
qualifications as may be set forth in the Prospectus; and other than as
described in the Prospectus, such permits contain no restrictions that
materially affect the ability of the Company and the Subsidiaries to
conduct their businesses.
(d) You shall have received an opinion, dated such Time of Delivery, of
King & Spalding, counsel for the Company, in form and substance satisfactory
to you and your counsel, to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of South
Carolina and has the corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement and the Prospectus and to enter into this Agreement and perform
its obligations hereunder. The Company is duly qualified to transact
business as a foreign corporation and is in good standing under the laws
of the states listed on Exhibit B hereto.
(ii) Each of the South Carolina Subsidiaries is validly existing as a
corporation in good standing under the laws of the State of South
Carolina and has the corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement and the Prospectus. Each South Carolina Subsidiary is duly
qualified to transact business as a foreign corporation and is in good
standing under the laws of the states listed on Exhibit B hereto.
(iii) The Company has authorized 12,500,000 shares of Common Stock,
$1,00 par value, per share. None of the issued shares of Common Stock of
the Company or capital stock of any of the South Carolina Subsidiaries
has been issued or is owned or held in violation of any preemptive or
similar rights arising out of statute, and, to such counsel's knowledge,
no person or entity (including any holder of outstanding shares of Common
Stock of the Company or capital stock of the South Carolina Subsidiaries)
has any statutory preemptive or other rights to subscribe for any of the
Shares.
(iv) To such counsel's knowledge, all the issued shares of Common
Stock are owned by the Company or the Subsidiaries, free and clear of all
liens, security interests, pledges, charges, encumbrances, shareholders'
agreements, voting agreements, proxies, voting trusts, defects, equities
or claims of any nature whatsoever (collectively, "Encumbrances"). To
such counsel's knowledge, other than the Subsidiaries and the equity
securities held in the investment portfolios of the Company and the
Subsidiaries, the Company does not own, directly or indirectly, any
16
capital stock or other equity securities of any other corporation or any
ownership interest in any partnership, joint venture or other
association.
(v) Except as disclosed in the Prospectus, there are, to such
counsel's knowledge, no outstanding (A) securities or obligations of the
Company or any of the Subsidiaries convertible into or exchangeable for
any capital stock of the Company or any Subsidiary, (B) warrants, rights
or options to subscribe for or purchase from the Company or any of the
Subsidiaries any such capital stock or any such convertible or
exchangeable securities or obligations or (C) obligations of the Company
or any of the Subsidiaries to issue any shares of capital stock, any such
convertible or exchangeable securities or obligations, or any such
warrants, rights or options.
(vi) When the Shares to be sold by the Company have been duly
delivered against payment therefor as contemplated by this Agreement, the
Shares will be duly authorized, validly issued and fully paid and
nonassessable, the holders thereof will not be subject to personal
liability solely by reason of being such holders and the Shares will
conform to the description of the Common Stock contained in the
Prospectus; the form of certificate evidencing the Shares that is
included as Exhibit 4.1 to the Registration Statement complies with all
applicable requirements of South Carolina law; and the Shares have been
authorized for trading on The Nasdaq Stock Market.
(vii) To such counsel's knowledge, except with regard to the Avent
Group, the Powers Group and the Selling Shareholders, there are no
contracts, agreements or understandings known to such counsel between the
Company and any person granting such person the right to require the
Company to file a registration statement under the Act with respect to
any securities of the Company owned or to be owned by such person or,
with the exception of the Selling Shareholders and except for such rights
that have been waived, requiring the Company to include such securities
in the securities registered pursuant to the Registration Statement or
requiring the registration of any securities being registered pursuant to
any other registration statement filed by the Company under the Act.
(viii) To such counsel's knowledge, neither the Company nor any of
the South Carolina Subsidiaries is, or with the giving of notice or
passage of time or both, would be, in violation of its articles of
incorporation or bylaws, in each case as amended to date, or, in default
in any material respect under any agreement or instrument filed as an
exhibit to the Registration Statement to which the Company or any of the
South Carolina Subsidiaries is a party or to which any of their
respective properties or assets is subject.
(ix) The sale of the Shares being sold at such Time of Delivery and
the performance of this Agreement and the consummation of the
transactions herein contemplated will not conflict with or violate any
provision of the articles of incorporation or bylaws of the Company or
any of the South Carolina Subsidiaries, in each case as amended to date,
or to such counsel's knowledge and subject to applicable qualifications,
any existing law, statute, rule or regulation, or in any material
respect, conflict with, or (with or without the giving of notice or the
passage of time or both) result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any agreement or
instrument filed as an exhibit to the Registration Statement to which the
Company or any of the Subsidiaries is a party or to which any of their
respective properties or assets is subject, or, conflict with or violate
any order, judgment or decree known to such counsel, of any court or
governmental agency or body having jurisdiction over the Company or any
of the Subsidiaries or any of their respective properties or assets.
(x) To such counsel's knowledge, no consent, approval, authorization,
order or declaration of or from, or registration, qualification or filing
with, any court or governmental agency or body is required for the sale
of the Shares or the consummation of the transactions contemplated by
this Agreement, except such as have been obtained and are in effect, and
except the registration of the Shares under the Act and such as may be
required by the NASD or under state securities
17
or blue sky laws in connection with the offer, sale and distribution of
the Shares by the Underwriters.
(xi) To such counsel's knowledge and other than as disclosed in or
contemplated by the Prospectus, there is no litigation, arbitration,
claim, proceeding (formal or informal) or investigation pending or
threatened, in which the Company or any of the Subsidiaries is a party or
of which any of their respective properties or assets is the subject
which, if determined adversely to the Company or any of the Subsidiaries,
would individually or in the aggregate have a material adverse effect on
the financial position, results of operations or business of the Company
and the Subsidiaries taken as a whole.
(xii) The statements in the Prospectus under "Business--Regulation,"
"Business--Legal Proceedings," "Description of Capital Stock" and "Shares
Eligible for Future Sale" have been reviewed by such counsel, and insofar
as they refer to statements of law, descriptions of statutes, licenses,
rules or regulations, or legal conclusions, are correct in all material
respects.
(xiii) This Agreement has been duly authorized, executed and
delivered by each of the Company and the Significant Subsidiaries and,
assuming due execution by the Representatives of the Underwriters and
assuming further that New York law with respect to the matters in this
Agreement is the same as South Carolina law with respect to such matters,
constitutes the valid and binding agreement of each of the Company and
the Significant Subsidiaries, enforceable against each of the Company and
the Significant Subsidiaries, in accordance with its terms, subject, as
to enforcement, to applicable bankruptcy, insolvency, reorganization and
moratorium laws and other laws relating to or affecting the enforcement
of creditors' rights generally and to general equitable principles and
except as the enforceability of rights to indemnity and contribution
under this Agreement may be limited under applicable securities laws or
the public policy underlying such laws.
(xiv) Neither the Company nor any of the Subsidiaries is an
"investment company" or a company "controlled" by an investment company
as such terms are defined in Sections 3(a) and 2(a)(9), respectively, of
the Investment Company Act.
(xv) The Registration Statement and the Prospectus and each amendment
or supplement thereto (other than the financial statements, the notes and
schedules thereto and other financial and statistical data included
therein, to which such counsel need express no opinion), as of their
respective effective or issue dates, appeared on their faces to be
appropriately responsive in all material respects to the requirements of
the Act and the respective rules and regulations thereunder. The
descriptions in the Registration Statement and the Prospectus of
contracts and other documents are accurate and fairly present the
information required to be shown; and such counsel do not know of any
contracts or documents of a character required to be described in the
Registration Statement or Prospectus or to be filed as exhibits to the
Registration Statement which are not described and filed as required.
(xvi) Such counsel has been advised by the Division of Corporation
Finance of the Commission that the Registration Statement has become
effective under the Act; any required filing of the Prospectus pursuant
to Rule 424(b) has been made in the manner and within the time period
required by Rule 424(b); and, to such counsel's knowledge, (A) no stop
order suspending the effectiveness of the Registration Statement or any
part thereof has been issued and, (B) no proceedings for that purpose
have been instituted or, to such counsel's knowledge, threatened by the
Commission.
Such counsel shall also state that they have participated in the preparation
of the Registration Statement and the Prospectus and in conferences with
officers and other representatives of the Company, representatives of the
independent public accountants for the Company, and representatives of and
counsel to the Underwriters at which the contents of the Registration Statement,
the Prospectus and
18
related matters were discussed and, although such counsel has not passed upon or
assumed any responsibility for the accuracy, completeness or fairness of the
statements contained in the Registration Statement or the Prospectus, and
although such counsel has not undertaken to verify independently the accuracy or
completeness of the statements in the Registration Statement or the Prospectus,
nothing has come to such counsel's attention to lead them to believe that the
Registration Statement, or any further amendment thereto made prior to such Time
of Delivery, on its effective date contained or contains any untrue statement of
a material fact or omitted or omits to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, or
that the Prospectus, or any amendment or supplement thereto made prior to such
Time of Delivery, as of its issue date and as of such Time of Delivery,
contained or contains any 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 (provided that such counsel need express no belief regarding the
financial statements, the notes and schedules thereto and other financial and
statistical data contained in the Registration Statement, any amendment thereto,
or the Prospectus, or any amendment or supplement thereto).
In rendering any such opinion, such counsel may rely, as to matters of fact,
to the extent such counsel deem proper, on certificates of officers of the
Company, public officials and letters from officials of the NASD and such
counsel may rely as to matters governed by the laws of South Carolina on the
opinion of Xxxxxxx & Xxxx, P.A., special South Carolina counsel to the Company.
Copies of such certificates of officers of the Company and other opinions shall
be addressed and furnished to the Underwriters and furnished to counsel for the
Underwriters.
(e) You shall have received an opinion, dated such Time of Delivery, of
Xxxxxxx & Xxxx, P.A., special South Carolina counsel to the Company, in form
and substance satisfactory to you and your counsel, to the effect that:
(i) The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of South
Carolina and has the corporate power and authority to own or lease its
properties and conduct its business as described in the Registration
Statement and the Prospectus and to enter into this Agreement and perform
its obligations hereunder.
(ii) Each of the South Carolina Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of South Carolina and has the corporate power
and authority to own or lease its properties and conduct its business as
described in the Registration Statement and the Prospectus.
(iii) The Company has authorized 12,500,000 shares of Common Stock,
$1.00 par value per share. All of the issued shares of Common Stock of
the Company conform to the description of the Common Stock contained in
the Prospectus. None of the issued shares of Common Stock of the Company
or capital stock of any of the South Carolina Subsidiaries has been
issued or is owned or held in violation of any preemptive or similar
rights arising out of statute, and, to such counsel' knowledge, no person
or entity (including any holder of outstanding shares of Common Stock of
the Company or capital stock of the South Carolina Subsidiaries) has any
statutory preemptive or other rights to subscribe for any of the Shares.
(iv) All of the issued shares of Common Stock of each of the South
Carolina Subsidiaries, to such counsel's knowledge, are owned by the
Company or the Subsidiaries, free and clear of all Encumbrances.
(v) Except as disclosed in the Prospectus, there are, to such
counsel's knowledge, no outstanding (A) securities or obligations of the
Company or any of the South Carolina Subsidiaries convertible into or
exchangeable for any capital stock of the Company or any Subsidiary, (B)
warrants, rights or options to subscribe for or purchase from the Company
or any of the South Carolina Subsidiaries any such capital stock or any
such convertible or exchangeable securities or obligations or (C)
obligations of the Company or any of the South Carolina
19
Subsidiaries to issue any shares of capital stock, any such convertible
or exchangeable securities or obligations, or any such warrants, rights
or options.
(vi) When the Shares to be sold by the Company have been duly
delivered against payment therefor as contemplated by this Agreement, the
Shares will be duly authorized, validly issued and fully paid and
nonassessable, the holders thereof will not be subject to personal
liability solely by reason of being such holders and the Shares will
conform to the description of the Common Stock contained in the
Prospectus; the form of certificate evidencing the Shares that is
included as Exhibit 4.1 to the Registration Statement complies with all
applicable requirements of South Carolina law.
(vii) The sale of the Shares being sold at such Time of Delivery and
the performance of this Agreement and the consummation of the
transactions herein contemplated will not conflict with or violate any
provision of the articles of incorporation or bylaws of the Company or
any of the South Carolina Subsidiaries, in each case as amended to date,
or, subject to applicable qualifications, any existing law, statute, rule
or regulation in effect in the State of South Carolina.
(viii) To such counsel's knowledge, neither the Company nor any of
the South Carolina Subsidiaries is, or with the giving of notice or
passage of time or both would be, in violation of its articles of
incorporation or bylaws, in each case as amended to date, or in default
in any material respect under any agreement or instrument filed as an
exhibit to the Registration Statement to which the Company or any of the
South Carolina Subsidiaries is a party or to which any of their
respective properties or assets is subject.
(ix) To such counsel's knowledge, no consent, approval,
authorization, order or declaration of or from, or registration,
qualification or filing with, any court or governmental agency or body is
required for the sale of the Shares or the consummation of the
transactions contemplated by this Agreement, except such as have been
obtained and are in effect, and except the registration of the Shares
under the Act and such as may be required by the NASD or under state
securities or blue sky laws in connection with the offer, sale and
distribution of the Shares by the Underwriters.
(x) The statements in the Prospectus under "Business--Regulation,"
"Business--Legal Proceedings," "Description of Capital Stock" and "Shares
Eligible for Future Sale" have been reviewed by such counsel, and insofar
as they refer to statements of law, descriptions of statutes, licenses,
rules or regulations, or legal conclusions, are correct in all material
respects.
(xi) This Agreement has been duly authorized, executed and delivered
by each of the Company and the Significant Subsidiaries and, assuming due
execution by the Representatives of the Underwriters and assuming further
that New York law with respect to the matters in this Agreement is the
same as South Carolina law with respect to such matters, constitutes the
valid and binding agreement of each of the Company and the Significant
Subsidiaries, enforceable against each of the Company and the Significant
Subsidiaries in accordance with its terms, subject, as to enforcement, to
applicable bankruptcy, insolvency, reorganization and moratorium laws and
other laws relating to or affecting the enforcement of creditors' rights
generally and to general equitable principles and except as the
enforceability of rights to indemnity and contribution under this
Agreement may be limited under applicable securities laws or the public
policy underlying such laws.
The opinion of Xxxxxxx & Xxxx, P.A. shall additionally state that Xxxx X.
XxXxxxx, LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P. and King & Spalding may rely on
such opinion as to matters of South Carolina laws, for purposes of their
respective opinions rendered pursuant to paragraphs (d) and (g) hereunder.
(f) You shall have received from Venable, Baetjer, Xxxxxx & Xxxxxxxxx,
LLP, counsel for the Selling Shareholders, in form and substance
satisfactory to you and your counsel, to the effect set forth herein below.
In giving such opinion, such counsel may rely, as to all matters governed by
laws of
20
jurisdictions other than the District of Columbia and the Federal law of the
United States upon the opinions of Xxxxx Xxxxxxxx & Co., Cayman Islands
counsel and [ ], Saudi Arabian counsel. Such counsel may also state that, in
so far as such opinion involves factual matters, such counsel has relied to
the extent deemed proper, upon certificates of the Selling Shareholders and
of public officials.
(i) This Agreement has been duly authorized, executed and delivered
by or on behalf of each of the Selling Shareholders.
(ii) The execution and delivery by each Selling Shareholder of, and
the performance by such Selling Shareholder of its obligations under,
this Agreement and the Custody Agreement and Power of Attorney of each
such Selling Shareholder will not conflict or violate any provision of
the articles of incorporation or bylaws or other organizational documents
of such Selling Shareholder (if such Selling Shareholder is a
corporation), or, to such counsel's knowledge, any existing law, statute,
rule or regulation, or in any material respect, conflict with, or (with
or without the giving of notice or the passage of time or both) result in
a breach or violation of any of the terms or provisions of, or constitute
a default under, any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument known to such counsel to which
such Selling Shareholder is a party or, conflict with or violate any
judgment, order or decree known to such counsel, of any governmental
body, agency or court having jurisdiction over such Selling Shareholder,
and no consent, approval, authorization or order of, or qualification
with, any governmental body or agency is required for the performance by
such Selling Shareholder of its obligations under this Agreement or the
Custody Agreement or Power of Attorney of such Selling Shareholder,
except such as may be required by the securities or blue sky laws of the
various states in connection with offer and sale of the Firm Shares.
(iii) Each of the Selling Shareholders has valid title to the Shares
to be sold by such Selling Shareholder and the legal right and power, and
all authorization and approval required by law, to enter into this
Agreement and the Custody Agreement and Power of Attorney of such Selling
Shareholder and to sell, transfer and deliver the Shares to be sold by
such Selling Shareholder.
(iv) The Custody Agreement and the Power of Attorney of each Selling
Shareholder has been duly authorized, executed and delivered by such
Selling Shareholder and is a valid and binding agreement of such Selling
Shareholder.
(v) Delivery of the Shares to be sold by each Selling Shareholder
pursuant to this Agreement will pass title to such Shares free and clear
of any security interests, claims, liens, equities and other
encumbrances.
(vi) Although such counsel has not participated in the preparation of
the Registration Statement and the Prospectus or in conferences with
officers and other representatives of the Company, representatives of the
independent public accountants for the Company, or representatives of and
counsel to the Underwriters at which the contents of the Registration
Statement, the Prospectus and related matters were discussed and,
although such counsel has not passed upon or assumed any responsibility
for the accuracy, completeness or fairness of the statements contained in
the Registration Statement or the Prospectus, and although such counsel
has not undertaken to verify independently the accuracy or completeness
of the statements in the Registration Statement or Prospectus, such
counsel (A) has no reason to believe that (other than the financial
statements, the notes and schedules thereto and other financial and
statistical data included therein as to which such counsel need not
express any belief) the Registration Statement and the prospectus
included therein at the time the Registration Statement became effective
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 and (B) has no reason to believe that
(other than the financial statements, notes and schedules thereto and
other financial and statistical data included therein as to which such
counsel need not express any belief) the Prospectus contains any untrue
statement of a material fact 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.
21
(g) LeBoeuf, Lamb, Xxxxxx & XxxXxx, L.L.P., counsel for the
Underwriters, shall have furnished to you such opinion or opinions, dated
such Time of Delivery, with respect to the incorporation of the Company, the
validity of the Shares being delivered at such Time of Delivery, the
Registration Statement, the Prospectus, and other related matters as you may
reasonably request, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass upon
such matters. Such opinion or opinions may be rendered in reliance upon the
appropriate opinion of Xxxxxxx & Xxxx, P.A. as to matters governed by South
Carolina law.
(h) The Representatives shall have received, on each of the date hereof
and the Closing Date, as the case may be, in form and substance satisfactory
to the Representatives, from Xxxxxx Xxxxxxxx LLP, independent public
accountants, a letter or letters, as the case may be, containing statements
and information of the type ordinarily included in accountants' "comfort
letters" to Underwriters with respect to the financial statements and
certain financial information contained in the Registration Statement and
Prospectus; provided that the letter or letters, as the case may be,
delivered on the Closing Date shall use a "cut-off date" not earlier than
the date hereof.
(i) Since the date of the latest audited financial statements included
in the Prospectus, neither the Company nor any of the Subsidiaries shall
have sustained any change, or any development involving a prospective change
(including, without limitation, a change in management or control of the
Company), in or affecting the position (financial or otherwise), results of
operations, net worth or business prospects of the Company and the
Subsidiaries, otherwise than as disclosed in or contemplated by the
Prospectus, the effect of which, in either such case, is in your sole
judgment so material and adverse as to make it impracticable or inadvisable
to proceed with the purchase, sale and delivery of the Shares being
delivered at such Time of Delivery as contemplated by the Registration
Statement, as amended as of the date hereof.
(j) Subsequent to the date hereof, there shall not have occurred any of
the following: (i) any suspension or limitation in trading in securities
generally on the New York Stock Exchange, and/or the American Stock Exchange
or any setting of minimum prices for trading on such exchange, or in the
Common Stock of the Company by the Commission or the Nasdaq Stock Market
(except for suspensions or limitations that last only a portion of one
business day); (ii) a moratorium on commercial banking activities in New
York, South Carolina or Connecticut declared by either federal or state
authorities; or (iii) any outbreak or escalation of hostilities involving
the United States, declaration by the United States of a national emergency
or war or any other national or international calamity or emergency if the
effect of any such event specified in this clause (iii) in your sole
judgment makes it impracticable or inadvisable to proceed with the purchase,
sale and delivery of the Shares being delivered at such Time of Delivery as
contemplated by the Registration Statement, as amended as of the date
hereof.
(k) The Company shall have furnished to you at such Time of Delivery
certificates of the chief executive and chief financial officers of the
Company satisfactory to you, as to the accuracy in all material respects of
the respective representations and warranties of the Company herein at and
as of such Time of Delivery with the same effect as if made at such Time of
Delivery, as to the performance by the Company of all of its obligations
hereunder to be performed at or prior to such Time of Delivery, and as to
such other matters as you may reasonably request, and the Company shall have
furnished or caused to be furnished certificates of such officers as to such
matters as you may reasonably request.
(l) The representations and warranties of each of the Company and the
Significant Subsidiaries in this Agreement and in the certificates delivered
by the Company pursuant to this Agreement shall be true and correct in all
material respects when made and on and as of each Time of Delivery as if
made at such time, and each of the Company and the Significant Subsidiaries
shall have performed, in all material respects, all covenants and agreements
and satisfied, in all material respects, all conditions
22
contained in this Agreement required to be performed or satisfied by each of
the Company and the Significant Subsidiaries at or before such Time of
Delivery.
(m) The representations and warranties of the Selling Shareholders in
this Agreement shall be true and correct in all material respects when made
and on and as of each Time of Delivery as if made at such time.
(n) The Shares shall continue to be listed on the Nasdaq Stock Market.
10. INDEMNIFICATION AND CONTRIBUTION.
(a) Each of the Company, the Significant Subsidiaries and the Selling
Shareholders, jointly and severally, agrees to indemnify and hold harmless
each Underwriter against any losses, claims, damages or liabilities, joint
or several, to which such Underwriter may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon: (i) any untrue
statement or alleged untrue statement made by the Company or the Significant
Subsidiaries in Section 1 of this Agreement; (ii) any untrue statement or
alleged untrue statement of any material fact contained in (A)the
Registration Statement or any amendment thereto, any Preliminary Prospectus
or the Prospectus or any amendment or supplement thereto, or (B) any
application or other document, or amendment or supplement thereto, executed
by the Company or based upon written information furnished by or on behalf
of the Company filed in any jurisdiction in order to qualify the Shares
under the securities or blue sky laws thereof or filed with the Commission
or any securities association or securities exchange (each an
"Application"); or (iii) the omission of or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary Prospectus,
the Prospectus or any amendment or supplement thereto, or any Application of
a material fact required to be stated therein or necessary to make the
statements therein not misleading; and will reimburse each Underwriter for
any legal or other expenses reasonably incurred by such Underwriter in
connection with investigating, defending against or appearing as a
third-party witness in connection with any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that none of the Company, the
Significant Subsidiaries or any Selling Shareholder shall be liable in any
such case to the extent that any such loss, claim, damage, liability or
action arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration Statement
or any amendment thereto, any Preliminary Prospectus, the Prospectus or any
amendment or supplement thereto or any Application in reliance upon and in
conformity with written information furnished to the Company by any
Underwriter through you expressly for use therein (which information is
solely as set forth in Section 1(c) hereof). The liability of each Selling
Shareholder under this Section 10(a) shall not exceed an amount equal to the
aggregate number of Shares sold by such Selling Shareholder hereunder
multiplied by the purchase price per share set forth in Section 3 hereof.
None of the Company, the Significant Subsidiaries or any Selling Shareholder
will, without the prior written consent of the Representatives of the
Underwriters, settle or compromise or consent to the entry of any judgment
in any pending or threatened claim, action, suit or proceeding (or related
cause of action or portion thereof) in respect of which indemnification may
be sought hereunder (whether or not any Underwriter is a party to such
claim, action, suit or proceeding), unless such settlement, compromise or
consent includes an unconditional release of each Underwriter from all
liability arising out of such claim, action, suit or proceeding (or related
cause of action or portion thereof).
(b) Each Underwriter, severally but not jointly, agrees to indemnify and
hold harmless the Company, the Significant Subsidiaries and the Selling
Shareholders against any losses, claims, damages or liabilities to which the
Company, the Significant Subsidiaries and the Selling Shareholders may
become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement or any amendment thereto, any
Preliminary Prospectus, the Prospectus or any amendment or supplement
thereto, or any
23
Application or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company, the
Significant Subsidiaries or the Selling Shareholders by such Underwriter
through you expressly for use therein (which information is solely as set
forth in Section 1(c) hereof); and will reimburse the Company, the
Significant Subsidiaries and the Selling Shareholders for any legal or other
expenses reasonably incurred by the Company, the Significant Subsidiaries
and the Selling Shareholders in connection with investigating or defending
any such loss, claim, damage, liability or action.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve the indemnifying party from any
liability which it may have to any indemnified party otherwise than under
such subsection. In case any such action shall be brought against any
indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party (who shall not, except
with the consent of the indemnified party, be counsel to the indemnifying
party); PROVIDED, HOWEVER, that if the defendants in any such action include
both the indemnified party and the indemnifying party and the indemnified
party shall have been advised by counsel in writing that there are one or
more legal defenses available to it or other indemnified parties which are
different from or additional to those available to the indemnifying party,
the indemnifying party shall not have the right to assume the defense of
such action on behalf of such indemnified party and such indemnified party
shall have the right to select separate counsel (which shall be limited to a
single law firm, not including local counsel) to defend such action on
behalf of such indemnified party. After such notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof and approval by such indemnified party of counsel appointed to
defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 10 for any legal or other expenses,
other than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof. Nothing in this
Section 10(c) shall preclude an indemnified party from participating at its
own expense in the defense of any such action so assumed by the indemnifying
party.
(d) If the indemnification provided for in this Section 10 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to
reflect the relative benefits received by the Company and the Selling
Shareholders on the one hand and the Underwriters on the other hand from the
offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law or if the
indemnified party failed to give the notice required under subsection (c)
above, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company and the Selling Shareholders on the one hand and the Underwriters on
the other hand in connection with the statements or omissions that resulted
in such losses, claims, damages or liabilities (or actions in respect
thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Selling Shareholders on
the one hand and the Underwriters on the other hand shall be deemed to be in
the same proportion as the total net proceeds from the
24
offering (before deducting expenses) received by the Company and the Selling
Shareholders bear to the total underwriting discounts and commissions
received by the Underwriters. The relative fault 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 the Selling
Shareholders on the one hand or the Underwriters on the other hand and the
parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and the
Selling Shareholders and the Underwriters agree that it would not be just
and equitable if contributions pursuant to this subsection (d) were
determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation which does
not take account of the equitable considerations referred to above in this
subsection (d). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above in this subsection (d) shall be deemed to include
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this subsection (d), no Underwriter shall
be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the
public were offered to the public exceeds the amount of any damages which
such Underwriter 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 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations
in this subsection (d) to contribute are several in proportion to their
respective underwriting obligations and not joint.
(e) The obligations of the Company and the Selling Shareholders under
this Section 10 shall be in addition to any liability which the Company or
the Selling Shareholders may otherwise have and shall extend, upon the same
terms and conditions, and to each officer, director and employee of the
Underwriters and to each person, if any, who controls any Underwriter within
the meaning of the Act or the Exchange Act; and the obligations of the
Underwriters under this Section 10 shall be in addition to any liability
which the respective Underwriters may otherwise have and shall extend, upon
the same terms and conditions, to each officer, trustee and director of the
Company and to each person, if any, who controls the Company or the Selling
Shareholders or within the meaning of the Act or the Exchange Act.
11. DEFAULT OF UNDERWRITERS.
(a) If any Underwriter defaults in its obligation to purchase Shares at
a Time of Delivery, you may in your discretion arrange for you or another
party or other parties to purchase such Shares on the terms contained herein
within thirty-six (36) hours after such default by any Underwriter. In the
event that, within the respective prescribed period, you notify the Company
that you have so arranged for the purchase of such Shares, you shall have
the right to postpone a Time of Delivery for a period of not more than seven
(7) days in order to effect whatever changes may thereby be made necessary
in the Registration Statement or the Prospectus, or in any other documents
or arrangements, and the Company agrees to file promptly any amendments to
the Registration Statement or the Prospectus that in your opinion may
thereby be made necessary. The cost of preparing, printing and filing any
such amendments shall be paid for by the Underwriters. The term
"Underwriter" as used in this Agreement shall include any person substituted
under this Section with like effect as if such person had originally been a
party to this Agreement with respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you as provided in
subsection(a) above, if any, the aggregate number of such Shares which
remains unpurchased does not exceed one-eleventh (1/11) of the aggregate
number of Shares to be purchased at such Time of Delivery, then the Company
and the Selling
25
Shareholders shall have the right to require each non-defaulting Underwriter
to purchase the number of Shares which such Underwriter agreed to purchase
hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
number of Shares which such Underwriter agreed to purchase hereunder) of the
Shares of such defaulting Underwriter or Underwriters for which such
arrangements have not been made.
12. TERMINATION.
(a) This Agreement may be terminated with respect to the Firm Shares or
any Optional Shares in the sole discretion of the Representatives by notice
to the Company given prior to the First Time of Delivery or any Subsequent
Time of Delivery, respectively, in the event that (i) any condition to the
obligations of the Underwriters set forth in Section 9 hereof has not been
satisfied, or (ii) the Company or Selling Shareholders shall have failed,
refused or been unable to deliver such party's respective Shares or the
Company or Selling Shareholders shall have failed, refused or been unable to
perform all obligations and satisfy all conditions on their respective parts
to be performed or satisfied hereunder at or prior to such Time of Delivery,
in either case other than by reason of a default by any of the Underwriters.
If this Agreement is terminated pursuant to this Section 12(a), the Sellers
will reimburse the Underwriters severally upon demand for all reasonable
out-of-pocket expenses (including counsel fees and disbursements) that shall
have been incurred by them in connection with the proposed purchase and sale
of the Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting Underwriter or Underwriters by you as provided in
Section 11(a), the aggregate number of such Shares which remains unpurchased
exceeds one-eleventh (1/11) of the aggregate number of Shares to be
purchased at such Time of Delivery, then this Agreement (or, with respect to
a Subsequent Time of Delivery, the obligations of the Underwriters to
purchase and of the Company and the Selling Shareholders to sell the
Optional Shares) shall thereupon terminate, without liability on the part of
any non-defaulting Underwriter or the Company or the Selling Shareholders,
except for the expenses to be borne by the Company, the Selling Shareholders
and the Underwriters as provided in Section8 hereof and the indemnity and
contribution agreements in Section10 hereof; but nothing herein shall
relieve a defaulting Underwriter from liability for its default.
13. SURVIVAL. The respective indemnities, agreements, representations,
warranties and other statements of the Company, its officers, the Significant
Subsidiaries, the Selling Shareholders and the several Underwriters, as set
forth in this Agreement or made by or on behalf of them, respectively, pursuant
to this Agreement, shall remain in full force and effect, regardless of any
investigation (or any statement as to the results thereof) made by or on behalf
of any Underwriter or any controlling person referred to in Section 10(e) or the
Company, or any officer, trustee or director or controlling person of the
Company referred to in Section 10(e), and shall survive delivery of and payment
for the Shares. The respective agreements, covenants, indemnities and other
statements set forth in Sections8 and 10 hereof shall remain in full force and
effect, regardless of any termination or cancellation of this Agreement.
14. NOTICES. All communications hereunder shall be in writing and, if sent
to any of the Underwriters, shall be mailed, delivered or telegraphed and
confirmed in writing to you in care of Advest, Inc., 00 Xxxxx Xxxxx Xxxxxx,
Xxxxxxxx, XX 00000, Attention: Xxxxx Xxxxx (with a copy to LeBoeuf, Lamb, Xxxxxx
& XxxXxx, L.L.P., 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000-0000, Attention: Lars
Bang-Xxxxxx, Esquire); if to the Company shall be sufficient in all respects if
mailed, delivered or telegraphed and confirmed in writing to The Seibels Xxxxx
Group, Inc., 0000 Xxxx Xxxxxx, Xxxxxxxx, XX 00000, Attention: Xxxx X. XxXxxxx,
Esquire (with a copy to King & Spalding, 000 Xxxxxxxxx Xxxxxx, Xxxxxxx, XX
00000, Attention: Xxxx X. Xxxxxx, Esquire); if to the Selling Shareholders,
shall be sufficient in all respects if mailed, delivered or telegraphed and
confirmed in writing to Venable, Baetjer, Xxxxxx & Civiletti, LLP, Suite 1000,
0000 Xxx Xxxx Xxxxxx X.X., Xxxxxxxxxx, X.X. 00000, Attention: Xxxxx X. Xxxxxxxx.
26
15. BINDING EFFECT. This Agreement shall be binding upon, and inure solely
to the benefit of, the Underwriters, the Company and the Selling Shareholders
and to the extent provided in Sections 10 and 12 hereof, the officers, trustees,
directors and employees and controlling persons referred to therein and their
respective heirs, executors, administrators, successors and assigns, and no
other person shall acquire or have any right under or by virtue of this
Agreement. No purchaser of any of the Shares from any Underwriter shall be
deemed a successor or assign by reason merely of such purchase.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without giving effect to any
provisions regarding conflicts of laws.
17. COUNTERPARTS. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
27
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us one of the counterparts hereof, and upon the
acceptance hereof by Advest, Inc., on behalf of each of the Underwriters, this
letter will constitute a binding agreement among the Underwriters, the Company
and the Selling Shareholders. It is understood that your acceptance of this
letter on behalf of each of the Underwriters is pursuant to the authority set
forth in the Agreement among Underwriters, a copy of which shall be submitted to
the Company and the Selling Shareholders for examination, upon request, but
without warranty on your part as to the authority of the signers thereof.
Very truly yours,
THE SEIBELS XXXXX GROUP, INC.
By:
------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief
Executive Officer
SOUTH CAROLINA INSURANCE COMPANY
By:
------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief
Operating Officer
XXXXXXX, XXXXX & COMPANY
By:
------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief
Operating Office
CATAWBA INSURANCE COMPANY
By:
------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President and Chief
Operating Officer
The Selling Shareholders named in Schedule II
hereto, acting severally
By:
------------------------------------------
Attorney-in-Fact
The foregoing Agreement is hereby confirmed
and accepted as of the date first written
above at Hartford, Connecticut.
ADVEST, INC.
XXXXX & XXXXXXXXXXXX, INC.
By: ADVEST, INC.
By:
-------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Group Vice President
On behalf of each of the Underwriters
SCHEDULE I
NUMBER OF
OPTIONAL
SHARES TO BE
TOTAL NUMBER PURCHASED IF
OF FIRM SHARES MAXIMUM OPTION
UNDERWRITER TO BE PURCHASED EXERCISED
----------------------------------------------------------- --------------- ----------------
Advest, Inc.
Xxxxx & Xxxxxxxxxxxx, Inc.
SCHEDULE II
NUMBER OF SHARES TO BE
SELLING SHAREHOLDER SOLD
------------------------------------------------------------------ --------------------------
Saad. A. Xxxxxx
General Investors Ltd.
Abdullatif Xxx Xxxxxx Est.
Financial Investors Ltd.
EXHIBIT A
SUBSIDIARIES
South Carolina Insurance Company
Xxxxxxx, Xxxxx & Company
Catawba Insurance Company
Kentucky Insurance Company
Consolidated American Insurance Company
Seibels Xxxxx Specialty, Inc.
Seibels Xxxxx Service Corporation
Agency Specialty of Kentucky, Inc.
Investors National Life Insurance Company of South Carolina
Policy Finance Company
[FLT Plus, Inc.]
EXHIBIT B
STATES IN WHICH THE COMPANY
AND EACH SOUTH CAROLINA SUBSIDIARY
IS QUALIFIED TO TRANSACT BUSINESS
