EXHIBIT 4.15
STOCK PURCHASE AGREEMENT
THIS AGREEMENT, dated as of May 10, 1999, is by and between HIGHLANDS
INSURANCE GROUP, INC. (the "Company"), a Delaware corporation with offices at
0000 Xxxxx Xxxxx, Xxxxxxxxxxxxx, Xxx Xxxxxx 00000, and XXXXXX X. XXXX, XX. (the
"Purchaser").
IN CONSIDERATION of the mutual covenants contained in this Agreement
and for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
SECTION 1. Authorization of Shares. The Company has authorized the
sale of $5 million of the Company's Common Stock, $.01 par value (the "Common
Stock") at a price per share equal to the closing price of the Common Stock on
the New York Stock Exchange ("NYSE") on May 10, 1999.
SECTION 2. Agreement to Sell and Purchase the Shares. At the Closing
(as defined in Section 4), the Company will sell to the Purchaser, and the
Purchaser will buy from the Company, upon the terms and conditions hereinafter
set forth, 454,546 shares of the Common Stock (the "Shares") at an aggregate a
purchase price equal to $5 million (the "Purchase Price").
SECTION 3. Payment of Purchase Price. On the Closing Date, as defined
below, the Purchaser will deliver to the Company the full amount of the
aggregate Purchase Price for the Shares purchased hereunder by check or wire
transfer of funds.
SECTION 4. The Closing. The consummation of the transactions
contemplated by this Agreement (the "Closing") shall occur on the date hereof
(the "Closing Date") at the offices of the Company. At or within 60 days after
the Closing, the Company shall deliver to the Purchaser one or more common stock
certificates registered in the name of the Purchaser, representing the Shares to
be purchased by him.
SECTION 5. Representations, Warranties and Covenants of the Company.
The Company hereby represents and warrants to, and covenants with, the Purchaser
that the following statements are true correct:
5.1 Organization. The Company is duly organized and validly
existing in good standing under the laws of the State of Delaware. The Company
has full power and authority to own, operate and occupy its properties and to
conduct its business as presently conducted and is registered or qualified to do
business and in good standing in each jurisdiction in which it owns or leases
property or transacts business and where the failure to be so qualified would
have a material adverse effect upon the business, financial condition,
properties or operations of the Company.
5.2 Due Authorization. The Company has all requisite power and
authority to execute, deliver and perform its obligations under this Agreement,
and this Agreement has been duly authorized and validly executed and delivered
by the Company and constitutes legal, valid and binding agreements of the
Company enforceable against the Company in accordance with their respective
terms, except as rights to indemnity and contribution may be limited by state or
federal securities laws or the public policy underlying such laws, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' and contracting
parties' rights generally and except as enforceability may be subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
5.3 Additional Information. The Company has filed in a timely
manner all documents that the Company was required to file under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") during the 12 months
preceding the date of this Agreement. Such documents complied in all material
respects with the requirements of the Exchange Act as of their respective filing
dates, and the information contained therein was true and correct in all
material respects as of the date of such documents, and each of the following
documents as of the date thereof did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
5.4 Listing. The Company shall use its best efforts to comply
with all requirements of the NYSE with respect to the issuance of the Shares and
the listing of the Shares on the NYSE.
SECTION 6. Representations, Warranties and Covenants of the Purchaser.
(a) The Purchaser represents and warrants to, and covenants
with, the Company, as of the date hereof that: (i) the Purchaser is an
"accredited investor" as defined in Rule 501(a) of Regulation D under the
Securities Act of 1933 ("Securities Act"); (ii) the Purchaser is acquiring the
Shares for his own account for investment and with no present intention of
distributing any of the Shares (this representation and warranty not limiting
the Purchaser's right to sell pursuant to an effective registration statement
registering the Shares for resale or to be indemnified pursuant to the
provisions hereof); (iii) the Purchaser will not, directly or indirectly,
voluntarily offer, sell, pledge, transfer or otherwise dispose of (or solicit
any offers to buy, purchase or otherwise acquire or take a pledge of) any of the
Shares, except in compliance with the Securities Act and the rules and
regulations promulgated thereunder; (iv) the Purchaser has had an opportunity to
ask questions and receive answers from the management of the Company regarding
the Company, its business and the offering of the Shares; (v) the Purchaser has
completed or caused to be completed the Purchaser Signature Page and
Questionnaire which is a part hereof and the answers thereto are true and
correct to the best knowledge of the Purchaser as of the date hereof and will be
true and correct as of the effective date of the registration statement referred
to in Section 9.1; (vi) the Purchaser will notify the Company immediately of any
change in any of such information until such time as the Purchaser has sold all
of his Shares or until the Company is no longer required to keep such
registration statements effective pursuant to Sections 9.1(c); and (vii) the
Purchaser has, in connection with its decision to purchase Shares, relied solely
upon the documents described in Section 5.3 and the representations and
warranties of the Company contained herein.
(b) The Purchaser agrees not to make any sale of the Shares,
pursuant to the registration statement referred to in Section 9.1 without
effectively causing the prospectus delivery requirements under the Securities
Act to be satisfied. The Purchaser acknowledges that there may occasionally be
times when the Company must suspend the use of the prospectus forming a part of
the registration statement until such time as an amendment to such registration
statement has been filed by the Company and declared effective by the Securities
and Exchange Commission ("SEC") or until the Company has amended or supplemented
such prospectus. The Company agrees to use its best efforts to cause such
amended registration statement to be declared effective and/or to deliver such
amended or supplemented prospectus as soon as possible. The Purchaser hereby
covenants that it will not sell any Shares pursuant to said prospectus during
the period commencing at the time at which the Company gives the Purchaser
notice of the suspension of the use of said prospectus and ending at the time
the Company gives the Purchaser notice that the Purchaser may thereafter effect
sales pursuant to said prospectus.
(c) The Purchaser further represents and warrants to, and
covenants with, the Company that (i) the Purchaser has full right, power,
authority and capacity to enter into this Agreement and to consummate the
transactions contemplated hereby and has taken all necessary action to authorize
the execution, delivery and performance of this Agreement, and (ii) upon the
execution and delivery of this Agreement, this Agreement shall constitute a
valid and binding obligation of the Purchaser enforceable in accordance with its
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors' and
contracting parties' rights generally, except as enforceability may be subject
to general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law) and except as the
indemnification agreements of the Purchaser herein may be legally unenforceable.
SECTION 7. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
the Purchaser herein shall survive the execution of this Agreement, the delivery
to the Purchaser of the Shares being purchased and the payment therefor.
SECTION 8. Conditions to Closing. The obligations of the Company to
consummate the transactions contemplated hereby shall be subject to the
Purchaser having paid the Purchase Price in accordance with Section 3.
SECTION 9. Registration of the Shares; Compliance with the Securities
Act.
9.1 Registration Procedures and Expenses. The Company shall:
(a) prepare and file with the SEC a registration statement
(the "Registration Statement") covering the resale of the Shares by the
Purchaser from time to time on the NYSE or on such exchange, securities market
or system on which the Company's Common Stock shall then be publicly traded, or
in privately negotiated transactions, no later than 60 days following the date
hereof;
(b) use its best efforts, subject to receipt of necessary
information from the Purchaser, to cause the Registration Statement to become
effective as soon as possible thereafter;
(c) prepare and file with the SEC such amendments and
supplements to the Registration Statement and the prospectus used in connection
therewith as may be necessary to comply with the provisions of the Securities
Act until the later of such time as all of the Shares have been sold pursuant
thereto or, by reason of Rule 144(k) under the Securities Act or any other rule
of similar effect, such shares are no longer required to be registered for the
unrestricted sale thereof by the Purchaser;
(d) furnish to the Purchaser such number of copies of
prospectuses and preliminary prospectuses in conformity with the requirements of
the Securities Act and such other documents as the Purchaser may reasonably
request, in order to facilitate the public sale or other disposition of all or
any of the Shares held by the Purchaser, provided, however, that the obligation
of the Company to deliver copies of prospectuses or preliminary prospectuses to
the Purchaser shall be subject to the receipt by the Company of reasonable
assurances from the Purchaser that the Purchaser will comply with the applicable
provisions of the Securities Act and of such other securities or blue sky laws
as may be applicable in connection with any use of such prospectuses or
preliminary prospectuses;
(e) file documents required of the Company for normal blue
sky clearance in all states, provided, however, that the Company shall not be
required to qualify to do business or consent to service of process in any
jurisdiction in which it is not now so qualified or has not so consented;
(f) bear all expenses in connection with the procedures in
paragraphs (a) through (c) of this Section 9.1, other than brokerage commissions
or placement agent fees and fees and expenses, if any, of counsel or other
advisers to the Purchaser with respect to the registration and resale of the
Shares; and
(g) prepare and file additional listing applications for the
Shares on the NYSE.
The Company understands that the Purchaser disclaims being an underwriter, but
the Purchaser being deemed an underwriter shall not relieve the Company of any
obligations it has hereunder.
9.2 Transfer of Shares After Registration. The Purchaser agrees
that it will not effect any disposition of the Shares, that would constitute a
sale within the meaning of the Securities Act except as contemplated in the
Registration Statement referred to in Section 9.1 or pursuant to an available
exemption from registration under the Securities Act and applicable state
securities laws.
9.3 Indemnification.
(a) For the purpose of this Section 9.3:
(i) the term "Selling Shareholder" shall mean any
person or entity selling Shares pursuant to the Registration Statement, and any
affiliate thereof ;
(ii) the term "Registration Statement" shall include
any preliminary prospectus, final prospectus, exhibit, supplement or amendment
included in or relating to the Registration Statement; and
(iii) the term "untrue statement" shall mean any untrue
statement or alleged untrue statement of a material fact in the Registration
Statement, or any omission or alleged omission to state in the Registration
Statement a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(b) The Company agrees to indemnify and hold harmless each
Selling Shareholder from and against any losses, claims, damages or liabilities
to which such Selling Shareholder may become subject (under the Securities Act
or otherwise) insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon, any untrue
statement, or arise out of any failure by the Company to fulfill any undertaking
included herein or in the Registration Statement, and the Company promptly will
reimburse such Selling Shareholder for any legal or other expenses reasonably
incurred in investigating, defending or preparing to defend any such action,
proceeding or claim; provided, however, that the Company shall not be liable in
any such case to the extent that such loss, claim, damage or liability arises
out of, or is based upon, an untrue statement made in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
such Selling Shareholder specifically for use in preparation of the Registration
Statement, or the failure of such Selling Shareholder to comply with the
covenants and agreements contained herein; provided further, that the
indemnification contained in this Section 9.3 with respect to any prospectus
after it has been amended or supplemented, shall not inure to the benefit of any
Selling Shareholder (or any person controlling such Selling Shareholder) from
whom the person asserting such loss, claim, damage, or liability shall have
purchased Shares, that are the subject thereof if, after copies thereof have
been delivered by the Company to such Selling Shareholder, such Selling
Shareholder shall have failed to send or give a copy of the prospectus as then
amended or supplemented, as the case may be, to such person at or prior to the
confirmation of such sale of such Shares, to such person, and, if such loss,
claim, damage or liability would not have arisen but for the failure of such
Selling Shareholder to deliver the same.
(c) The Purchaser agrees to indemnify and hold harmless the
Company (and each other person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act, each officer of the Company who
signs the Registration Statement and each director of the Company) from and
against any losses, claims, damages or liabilities to which the Company (or any
such officer, director or controlling person) may become subject (under the
Securities Act or otherwise), insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of, or are
based upon, any failure of the Purchaser to comply with his covenants and
agreements contained herein, or any untrue statement if such untrue statement
was made in reliance upon and in conformity with written information furnished
by or on behalf of the Purchaser specifically for use in preparation of the
Registration Statement, and the Purchaser promptly will reimburse the Company
(or such officer, director or controlling person), as the case may be, for any
legal or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim.
(d) Promptly after receipt by any indemnified person of a notice
of a claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 9.3, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and such indemnifying person shall have been notified
thereof, such indemnifying person shall be entitled to participate therein, and,
to the extent it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified person. After notice from the
indemnifying person to such indemnified person of its election to assume the
defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof. In the event that the
indemnifying party shall have assumed the defense of such action, such
indemnifying party shall not enter into any compromise or settlement without the
indemnified party's prior written consent, which consent shall not be
unreasonably withheld, delayed or denied.
9.4 Termination of Conditions and Obligations. The restrictions
imposed by Section 6 or Section 9.2 upon the transferability of the Shares shall
cease and terminate as to any particular Shares when such Shares shall have been
effectively registered under the Securities Act and sold or otherwise disposed
of in accordance with the intended method of disposition set forth in the
Registration Statement or at such time as an opinion of counsel satisfactory to
the Company shall have been rendered to the effect that such restrictions are
not necessary in order to comply with the Securities Act. The Company will use
its best efforts to maintain the effectiveness of the Registration Statement
until the Purchaser has disposed of all of his Shares, or the Shares have become
freely tradable without restriction under Rule 144(k).
9.5 Information Available. So long as the Registration Statement
is effective covering the resale of Shares owned by the Purchaser, the Company
will furnish to the Purchaser upon request:
(a) any document filed by the Company with the SEC;
(b) upon the reasonable request of the Purchaser, any other
information concerning the Company that is generally available to the public;
and
(c) an adequate number of copies of the prospectuses
relating to the resale of the Shares to supply to any party requiring such
prospectuses.
SECTION 10. Notices. All notices, requests, consents and other
communications hereunder shall be in writing, shall be mailed by first-class
registered or certified mail, postage prepaid, and shall be deemed given when so
mailed:
(a) if to the Company to:
Highlands Insurance Group, Inc.
0000 Xxxxx Xxxxx Xxxxxxxxxxxxx,
Xxx Xxxxxx 00000
Attention: Secretary
(b) if to the Purchaser, at his address as set forth at the
end of this Agreement, or at such other address or addresses as may have been
furnished to the Company in writing.
SECTION 11. Termination.
(a) By the Purchaser. The Purchaser may terminate this
Agreement at any time prior to the Closing.
(b) By the Company. The Company may terminate this Agreement
at any time prior to the Closing.
SECTION 12. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be
deemed to be part of this Agreement.
SECTION 13. Severability. In case any provision contained in this
Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
SECTION 14. Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware and
United States federal law.
SECTION 15. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original, but all of which,
when taken together, shall constitute but one instrument, and shall become
effective when one or more counterparts have been signed by each party hereto
and delivered to the other parties.
IN WITNESS WHEREOF, the parties hereto have caused this Stock Purchase
Agreement to be executed by their duly authorized representatives as of the
following date.
Dated: May 10, 1999
HIGHLANDS INSURANCE GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
__________________________
Xxxxxxx X. Xxxxxxxxx, Vice President
[Purchaser Signature Page Continues on the Following Page]
PURCHASER SIGNATURE PAGE AND QUESTIONNAIRE
The undersigned, Xxxxxx X. Xxxx, Xx., hereby executes the Stock
Purchase Agreement with Highlands Insurance Group, Inc. (the "Company") and
hereby authorizes this signature page to be attached to a counterpart of such
document executed by a duly authorized officer of the Company.
No. of Shares to be Purchased: 454,546
Aggregate Purchase Price: $5 million
Purchaser is an "accredited investor" as defined in Regulation D under the
Securities Act of 1933.
Name in which Shares are to be registered: Xxxxxx X. Xxxx, Xx.
Address of registered holder: _______________________________
_______________________________
Social Security or Tax ID Number: ______________________________
/s/ Xxxxxx X. Xxxx, Xx.
______________________________
Xxxxxx X. Xxxx, Xx.
