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Exhibit 1.1
The MIIX Group, Incorporated
Shares(a)
Common Stock
($.01 par value)
Underwriting Agreement
New York, New York
July __, 1999
First Union Capital Markets Corp.
Friedman, Billings, Xxxxxx & Co., Inc.
Xxxxxx & Xxxxxx Incorporated
As Representatives of the several Underwriters,
c/o First Union Capital Markets Corp.
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Ladies and Gentlemen:
The MIIX Group, Incorporated, a corporation organized under
the laws of Delaware (the "Company"), proposes to sell to the several
underwriters named in Schedule I hereto (the "Underwriters"), for whom you (the
"Representatives") are acting as representatives, _________ shares of Common
Stock, $.01 par value ("Common Stock"), of the Company (said shares to be issued
and sold by the Company being hereinafter called the "Underwritten Securities").
The Company also proposes to grant to the Underwriters an option to purchase up
to _________ additional shares of Common Stock to cover over-allotments (the
"Option Securities"; the Option Securities, together with the Underwritten
Securities, being hereinafter called the "Securities"). To the extent there are
no additional Underwriters listed on Schedule I other than you, the term
Representatives as used herein shall mean you, as Underwriters, and the terms
Representatives and Underwriters shall mean either the singular or plural as the
context requires. Certain terms used herein are defined in Section 17 hereof.
The Company is a wholly owned subsidiary of the Medical
Inter-Insurance Exchange of New Jersey, a reciprocal insurer organized under the
laws of New Jersey (the "Exchange"), and MIIX Insurance Company, a stock
insurance company organized under the laws of New Jersey ("MIIX Insurance"), is
a wholly owned subsidiary of the Company. Each of the Company and MIIX Insurance
was formed in connection with a proposed reorganization (the "Reorganization")
of the Exchange pursuant to the Plan of Reorganization adopted by the Exchange's
Board of Governors on October 15, 1997 (the "Original Plan", and as amended to
the date hereof, the "Plan") and approved by order (the "Order") dated March 5,
1998 of the Commissioner of Insurance of the Department of Banking and Insurance
of the State of New Jersey (the "Commissioner"). As part of the Reorganization,
(i) the Exchange will distribute (the "Distribution") shares of Common Stock
(the "Reorganization Shares") or, in certain cases, cash
(a) Plus an option to purchase from the Company, up to ______ additional shares
of Common Stock to cover over-allotments.
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to Distributees (as defined in the Plan), (ii) the Company will purchase (the
"Purchase") for $100,000 in cash and [ ] shares of Common Stock all of the
outstanding shares of common stock of New Jersey State Medical Underwriters,
Inc., a corporation organized under the laws of New Jersey (the
"Attorney-in-Fact") and a wholly owned subsidiary of The Medical Society of the
State of New Jersey, a not-for-profit corporation organized under the laws of
New Jersey ("The Medical Society"), and (iii) the Exchange will transfer (the
"Transfer") all of its assets and liabilities (except for the Common Stock and
cash to be distributed pursuant to the Reorganization) to MIIX Insurance. Upon
effectiveness of the Plan (the "Plan Effective Time"), Membership Interests (as
defined in the Plan) will be extinguished and the Exchange will be dissolved.
The Purchase will be made pursuant to a Stock Purchase Agreement dated as of
October 15, 1997, as amended by Amendment No. 1 thereto dated as of September
20, 1998 and by Amendment No. 2 thereto dated as of December 21, 1998 (as so
amended, and together with the Waiver of Conditions and Notice of Certain
Matters thereto dated as of July [ ], 1999, the "Stock Purchase Agreement"),
between the Company and The Medical Society. The Transfer will be made pursuant
to an Assumption Reinsurance and Administration Agreement and an Assignment and
Assumption Agreement (together, the "Assumption Agreements") to be entered into
among the Company, the Exchange and MIIX Insurance.
The Company, the Exchange and MIIX Insurance are hereinafter
sometimes referred to collectively as the "MIIX Entities". The Attorney-in-Fact
and its subsidiaries, Lawrenceville Holdings, Inc., a corporation organized
under the laws of Delaware ("Lawrenceville Holdings"), and its subsidiaries, and
MIIX Insurance are hereinafter sometimes referred to collectively as the "MIIX
Subsidiaries". Lawrenceville Holdings, Lawrenceville Property and Casualty Co.,
Inc., a corporation organized under the laws of Virginia ("LP&C"), Lawrenceville
Re, Ltd., a corporation organized under the laws of Bermuda, MIIX Insurance and
MIIX Insurance Company of New York, a corporation organized under the laws of
New York ("MIIX New York"), are hereinafter sometimes referred to collectively
as the "Insurance Subsidiaries".
As part of the offering contemplated by this Agreement, First
Union Capital Markets Corp. ("First Union") has agreed to reserve out of the
Underwritten Securities set forth opposite its name on Schedule I to this
Agreement, up to 90,000 Underwritten Securities, for sale to the Company's and
the MIIX Subsidiaries' employees or officers (collectively, "Participants"), as
set forth in the Prospectus under the heading "Underwriting" (the "Directed
Share Program"). The Underwritten Securities to be sold by First Union pursuant
to the Directed Share Program (the "Directed Shares") will be sold by First
Union pursuant to this Agreement at the Offering Price (as defined in the
Prospectus). Any Directed Shares not orally confirmed for purchase by any
Participants by the end of the business day following the day on which this
Agreement is executed will be offered to the public by First Union as set forth
in the Prospectus.
1. Representations and Warranties. Each of the MIIX Entities,
jointly and severally, represents and warrants to, and agrees with, each
Underwriter as set forth below in this Section 1.
(a) The Company has prepared and filed with the Commission a
registration statement (file number 333-59371) on Form S-1, including a
related preliminary
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prospectus, for registration under the Act of the offering and sale of the
Reorganization Shares. Such registration statement has become effective and
no stop order suspending the effectiveness of such registration statement
has been issued and no proceedings for that purpose have been instituted or
threatened.
(b) On the Distribution Effective Date and the Special Meeting Date
(each as defined herein), the Distribution Registration Statement did not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; and on the Distribution Effective
Date and the Special Meeting Date, the Distribution Prospectus did not
include any untrue statement of a material fact or omit 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.
(c) The Company has prepared and filed with the Commission a
registration statement (file number 333-64707) on Form S-1, including a
related preliminary prospectus, for registration under the Act of the
offering and sale of the Securities. The Company may have filed one or more
amendments thereto, including a related preliminary prospectus, each of
which has previously been furnished to you. The Company will next file with
the Commission either (1) prior to the Effective Date of such registration
statement, a further amendment to such registration statement (including
the form of final prospectus) or (2) after the Effective Date of such
registration statement, a final prospectus in accordance with Rules 430A
and 424(b). In the case of clause (2), the Company has included in such
registration statement, as amended at the Effective Date, all information
(other than Rule 430A Information) required by the Act and the rules
thereunder to be included in such registration statement and the
Prospectus. As filed, such amendment and form of final prospectus, or such
final prospectus, shall contain all Rule 430A Information, together with
all other such required information, and, except to the extent the
Representatives shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time, shall contain
only such specific additional information and other changes (beyond that
contained in the latest Preliminary Prospectus) as the Company has advised
you, prior to the Execution Time, will be included or made therein.
(d) On the Effective Date, the Registration Statement did or will, and when
the Prospectus is first filed (if required) in accordance with Rule 424(b)
and on the Closing Date (as defined herein) and on any date on which Option
Securities are purchased, if such date is not the Closing Date (a
"settlement date"), the Prospectus (and any supplements thereto) will,
comply in all material respects with the applicable requirements of the Act
and the rules thereunder; on the Effective Date and at the Execution Time,
the Registration Statement did not or will not contain any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein not
misleading; and, on the Effective Date, the Prospectus, if not filed
pursuant to Rule 424(b), will not, and on the date of any filing pursuant
to Rule 424(b) and on the Closing Date and any settlement date, the
Prospectus (together with any supplement thereto) will not, include any
untrue statement
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of a material fact or omit 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, however, that the Company makes
no representations or warranties as to the information contained in or
omitted from the Registration Statement, or the Prospectus (or any
supplement thereto) in reliance upon and in conformity with information
furnished in writing to the Company by or on behalf of any Underwriter
through the Representatives specifically for inclusion in the Registration
Statement or the Prospectus (or any supplement thereto).
(e) As of the date hereof, and until immediately prior to the Plan
Effective Time, MIIX Insurance is, and will be, the only subsidiary of the
Company. Immediately after the Plan Effective Time, the MIIX Subsidiaries
will be the only direct and indirect subsidiaries of the Company and the
Insurance Subsidiaries will be the only subsidiaries of the Company which
accept insurance risk.
(f) Each of the Company and the MIIX Subsidiaries has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is chartered or organized
with full corporate power and authority to own or lease, as the case may
be, and to operate its properties and conduct its business as described in
the Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each jurisdiction
which requires such qualification wherein it owns or leases material
properties and conducts material business and where the failure to be so
qualified would, individually or in the aggregate, have a material adverse
effect on the condition (financial or otherwise), prospects, earnings,
business or properties of the Company, the Exchange and the MIIX
Subsidiaries, taken as a whole, whether or not arising from transactions in
the ordinary course of business (each such effect is hereinafter referred
to as a "Material Adverse Effect").
(g) The Exchange is a reciprocal insurance exchange duly organized
under the laws of the State of New Jersey and is in compliance in all
material respects with the requirements of the insurance laws of the State
of New Jersey and the rules and regulations promulgated thereunder
(collectively the "New Jersey Insurance Law") providing for the
organization and regulation of reciprocal insurance exchanges; and has full
power and authority to own or lease, as the case may be, and to operate its
properties and conduct its business as described in the Prospectus, and is
duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties and conducts
material business and where the failure to be so qualified would,
individually or in the aggregate, have a Material Adverse Effect.
(h) All the outstanding shares of capital stock of each MIIX
Subsidiary have been duly and validly authorized and issued and are fully
paid and nonassessable, and, immediately after the Plan Effective Time, all
outstanding shares of capital stock of the MIIX Subsidiaries will be owned
by the Company either directly or through MIIX Subsidiaries free and clear
of any perfected security interest or any other security interests, claims,
liens or encumbrances, except that the shares of common stock of
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Lawrenceville Re, Ltd. and Pegasus Advisors, Inc. owned by the
Attorney-in-Fact have been pledged to Underwriters Reinsurance Company
pursuant to the Demand Loan dated January 23, 1997.
(i) The Company's authorized equity capitalization is as set forth in
the Prospectus; the capital stock of the Company conforms in all material
respects to the description thereof contained in the Prospectus; the
outstanding shares of Common Stock have been duly and validly authorized
and issued and are fully paid and nonassessable; the Securities have been
duly and validly authorized, and, when issued and delivered to and paid for
by the Underwriters pursuant to this Agreement, will be fully paid and
nonassessable; the Reorganization Shares have been duly and validly
authorized, and, when issued and delivered to Members (as defined in the
Plan) in exchange for their Membership Interests and to Look-Back Insureds
(as defined in the Plan), in each case as provided in the Plan, will be
fully paid and nonassessable, no holder thereof will be subject to personal
liability by reason of being such a holder and all corporate action
required to be taken for the authorization and issuance of the
Reorganization Shares has been validly and sufficiently taken; the
Securities and the Reorganization Shares are duly listed, and admitted and
authorized for trading, subject to official notice of issuance and evidence
of satisfactory distribution, on the New York Stock Exchange; the
certificates for the Securities and the Reorganization Shares are in valid
and sufficient form; neither the holders of outstanding shares of capital
stock of the Company, the Distributees nor the other policyholders of the
Exchange are entitled to preemptive or other rights to subscribe for the
Securities or the Reorganization Shares; and, except as set forth in the
Prospectus, no options, warrants or other rights to purchase, agreements or
other obligations to issue, or rights to convert any obligations into or
exchange any securities for, shares of capital stock of or ownership
interests in the Company or any MIIX Subsidiary are outstanding.
(j) There is no franchise, contract or other document of a character
required to be described in the Registration Statement or Prospectus, or to
be filed as an exhibit thereto, which is not described or filed as
required; and the statements in the Prospectus under the headings
"Prospectus Summary -- The Reorganization and Distribution", "-- Regulatory
Approvals", "Risk Factors -- Actions Opposing the Plan of Reorganization",
"-- Regulatory and Related Matters", "-- State Insurance Regulatory
Approvals", "The Reorganization", "Business -- Regulation",
"-- Litigation", "Management -- Executive Compensation", "-- Employment
Agreements", "-- Deferred Compensation Agreements", "-- Stock Purchase and
Loan Agreements", "-- Compensation Plans", "-- Certain Relationships and
Related Transactions" and "Description of Capital Stock" fairly summarize
the matters therein described.
(k) This Agreement has been duly authorized, executed and delivered by
each MIIX Entity. Each of the Assumption Agreements and the Stock Purchase
Agreement has been duly authorized, executed and delivered by each MIIX
Entity that is a party thereto and constitutes a valid and binding
obligation of each such MIIX Entity enforceable in accordance with its
terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium or similar laws now or hereafter in effect relating
to creditors' rights generally, and by general principles of equity
(regardless of whether
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enforceability is considered in a proceeding at law or in equity). The Plan
has been duly authorized and executed by the Exchange.
(l) Neither the Company nor any of the MIIX Subsidiaries is and, after
giving effect to the offering and sale of the Securities and/or the
Reorganization Shares and the application of the proceeds thereof as
described in the Prospectus, will be an "investment company" or an entity
"controlled" by an "investment company", as such terms are defined in the
Investment Company Act of 1940, as amended.
(m) No consent, approval, authorization, filing with or order of any
court or governmental agency or body is required in connection with the
transactions contemplated herein, except such as have been obtained and are
in full force and effect under the Act and such as may be required under
the blue sky laws of any jurisdiction in connection with the purchase and
distribution of the Securities by the Underwriters in the manner
contemplated herein and in the Prospectus; and no consent, approval,
authorization, filing with or order of any court or governmental agency or
body is required for the consummation of the transactions contemplated by
the Plan, except such as have been obtained and are in full force and
effect under the Act, the New Jersey Insurance Law, the New Jersey Business
Corporation Act (the "New Jersey Corporations Law"), and the blue sky laws
and insurance securities laws of various jurisdictions in connection with
the issuance of the Reorganization Shares to the Distributees.
(n) Neither the issue and sale of the Securities or the Reorganization
Shares nor the consummation of any other of the transactions contemplated
herein or in the Plan nor the fulfillment of the terms hereof or thereof
will conflict with, result in a breach or violation of or imposition of any
lien, charge or encumbrance upon any property or assets of the Company, any
MIIX Subsidiary or the Exchange pursuant to, (i) the charter, by-laws or
any other organizational document of the Company, any MIIX Subsidiary or
the Exchange, (ii) the terms of any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which the Company, any
MIIX Subsidiary or the Exchange is a party or bound or to which its or
their property is subject, or (iii) any statute, law, rule, regulation,
judgment, order or decree applicable to the Company, any MIIX Subsidiary or
the Exchange of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having jurisdiction over
the Company, any MIIX Subsidiary or the Exchange or any of their respective
properties, which violation or default would, in the case of clause (ii)
above, either individually or in the aggregate with all other violations
and defaults referred to in this paragraph (n) (if any), have a Material
Adverse Effect.
(o) No person has rights to the registration of any securities of the
Company (owned or to be owned by such person) under the Registration
Statement.
(p) The Company has delivered to you a true, complete and correct copy
of the Original Plan, with all amendments thereof; the Plan has been duly
adopted by the required vote of the Exchange's Board of Governors; the Plan
and the transactions contemplated therein (including, without limitation,
the Distribution, the Purchase and
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the Transfer) do not violate the New Jersey Insurance Law; pursuant to the
Order, the Commissioner approved the Plan for submission to a vote of the
Members; on March 17, 1999 (the "Special Meeting Date"), the Plan was duly
approved by the affirmative vote of at least two-thirds of the votes cast
and such approval has not been rescinded or otherwise withdrawn; on August
3, 1998, the Commissioner issued the Certificate of Authority (as defined
in the Plan); on January 14, 1999, the Commissioner approved an amendment
to the Original Plan extending the time for its completion to September 5,
1999; on May 24, 1999, the Commissioner approved the issuance of up to
12,025,000 shares of Common Stock pursuant to the Plan; no other approvals
are required to be obtained under the New Jersey Insurance Law or otherwise
for the consummation of the transactions contemplated by the Plan or for
the effectiveness of the Plan; prior to or contemporaneously with the
Closing Date, each of the actions required to occur and conditions required
to be satisfied at or prior to the Plan Effective Time pursuant to the New
Jersey Insurance Law, the Order or the Plan will have occurred or been
satisfied, and other than (i) the cancellation of all attorney powers
entered into by the Attorney-in-Fact with any applicant for insurance and
(ii) the filing of a certificate with the Commissioner pursuant to Section
4.3(vi) of the Plan, there are no other actions required to occur or
conditions required to be satisfied for the effectiveness of the Plan; and
at the Plan Effective Time, the Reorganization (including, without
limitation, the Distribution, the Purchase and the Transfer) will be
completed in accordance with the Plan, the Order and the New Jersey
Insurance Law, and all the rights (including, without limitation, rights in
respect of contracts, reinsurance treaties, leases, licenses and
trademarks) and properties of the Exchange shall accrue to, and become the
rights and properties of, MIIX Insurance, and all the rights of creditors
and liens of the Exchange shall become the rights of creditors and liens of
MIIX Insurance.
(q) Neither the issue and sale of the Securities nor the consummation
of any other of the transactions contemplated herein nor the fulfillment of
the terms hereof or thereof will conflict with or result in a violation of
the Order or the Plan.
(r) The consolidated historical financial statements and schedules of
the Exchange and its subsidiaries included in the Prospectus and the
Registration Statement present fairly in all material respects the
financial condition, results of operations and cash flows of the Exchange
and its subsidiaries as of the dates and for the periods indicated, comply
in all material respects as to form with the applicable accounting
requirements of the Act and have been prepared in conformity with generally
accepted accounting principles applied on a consistent basis throughout the
periods involved (except as otherwise noted therein). The financial
statement schedules, if any, included in the Registration Statement and the
Prospectus present fairly the information required to be stated therein.
The selected financial data set forth under the captions "Prospectus
Summary -- Summary Financial and Operating Data" and "Selected Financial
and Operating Data" in the Prospectus and Registration Statement fairly
present, on the basis stated in the Prospectus and the Registration
Statement, the information included therein.
(s) The statutory financial statements of the Exchange, from which
certain ratios and other statistical data filed as part of the Registration
Statement or included or incorporated in the Prospectus have been derived:
(i) have for each relevant period been
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prepared in conformity with statutory accounting practices required or
permitted by the National Association of Insurance Commissioners and by the
Department of Banking and Insurance of the State of New Jersey, and such
statutory accounting practices have been applied on a consistent basis
throughout the periods involved, except as may otherwise be indicated
therein or in the notes thereto; and (ii) present fairly in all material
respects the statutory financial position of the Exchange as at the dates
thereof, and the statutory basis results of operations of the Exchange for
the periods covered thereby.
(t) Since the respective dates as of which information is given in the
Registration Statement and the Prospectus, except as otherwise stated
therein: (i) there has been no material adverse change in the condition
(financial or otherwise), prospects, earnings, business or properties of
the Company, the Exchange and the MIIX Subsidiaries, taken as a whole,
whether or not arising from transactions in the ordinary course of business
(each such change is hereinafter referred to as a "Material Adverse
Change"); (ii) there have been no material transactions entered into by the
Company, the Exchange or any MIIX Subsidiary (iii) neither the Company, the
Exchange nor any MIIX Subsidiary has incurred any liability or obligation,
direct or contingent, that is material to the Company, the Exchange or any
MIIX Subsidiary and there has not been any change in the capital stock of
the Company or any payment of or declaration to pay any dividends or any
other distributions with respect to the Company's capital stock; and (iv)
there has not been any material change in the total equity, statutory
surplus or reserves (including any such change in the unpaid losses and
loss adjustment expenses reserves or reserving practices) of the Exchange
or any Insurance Subsidiary.
(u) Except as disclosed in the Prospectus (exclusive of any supplement
thereto), no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the
Company, the Exchange or any of the MIIX Subsidiaries or its or their
property is pending or, to the best knowledge of each of the Company, the
Exchange and the MIIX Subsidiaries, threatened that (i) could reasonably be
expected to have a material adverse effect on the performance of this
Agreement or the consummation of any of the transactions contemplated
hereby, (ii) could reasonably be expected to have Material Adverse Effect,
(iii) challenges the Plan, the Reorganization (including, without
limitation, the Distribution, the Purchase or the Transfer) or the
consummation of the transactions contemplated thereby or (iv) is of a
character required to be disclosed in the Registration Statement.
(v) Each of the Company, the Exchange and the MIIX Subsidiaries owns
or leases, or upon completion of the Reorganization will own or lease, all
such properties as are necessary to the conduct of its operations as
presently conducted.
(w) Neither the Company, the Exchange nor any MIIX Subsidiary is in
violation of or default under, and no event has occurred that, with notice
or lapse of time or both, would constitute a violation of or default under,
(i) any provision of its charter, bylaws, or other organizational document,
(ii) the terms of any indenture, contract, lease, mortgage, deed of trust,
note agreement, loan agreement or other agreement, obligation, condition,
covenant or instrument to which it is a party or bound or to which its
property is subject, or (iii) any statute, law, rule, regulation, judgment,
order or decree of any
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court, regulatory body, administrative agency, governmental body,
arbitrator or other authority having jurisdiction over the Company, the
Exchange or such MIIX Subsidiary or any of their respective properties, as
applicable, which violation or default would, in the case of clauses (ii)
and (iii) above, either individually or in the aggregate with all other
violations and defaults referred to in this paragraph (w) (if any), have a
Material Adverse Effect.
(x) Ernst & Young LLP, who have certified certain consolidated
financial statements of the Exchange and its subsidiaries and delivered
their report with respect to the audited consolidated financial statements
and schedules included in the Prospectus, are independent public
accountants with respect to each of the Company and the Exchange within the
meaning of the Act and the applicable published rules and regulations
thereunder.
(y) There are no transfer taxes or other similar fees or charges under
Federal law or the laws of any state, or any political subdivision thereof,
required to be paid in connection with the execution and delivery of this
Agreement or the issuance by the Company or sale by the Company of the
Securities.
(z) Each of the Company, the Exchange and the MIIX Subsidiaries has
filed all foreign, federal, state and local tax returns that are required
to be filed or has requested extensions thereof (except in any case in
which the failure so to file would not have a Material Adverse Effect,
except as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto)) and has paid all taxes required to be paid by it and
any other assessment, fine or penalty levied against it, to the extent that
any of the foregoing is due and payable, except for any such assessment,
fine or penalty that is currently being contested in good faith or as would
not have a Material Adverse Effect, except as set forth in or contemplated
in the Prospectus (exclusive of any supplement thereto).
(aa) No labor problem or dispute with the employees of the Company,
the Exchange or any MIIX Subsidiary, exists or is threatened or imminent,
and none of the Company, the Exchange or the MIIX Subsidiaries is aware of
any existing or imminent labor disturbance by the employees of any of the
Company's, the Exchange's or any MIIX Subsidiary's principal suppliers,
contractors or customers, that could have a Material Adverse Effect, except
as set forth in or contemplated in the Prospectus (exclusive of any
supplement thereto).
(bb) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the Company or
any other subsidiary of the Company, except as described in or contemplated
by the Prospectus and except that MIIX New York may not pay dividends until
two years following the approval of the change in the ultimate parent
company of MIIX New York, and immediately after the Plan Effective Time,
none of the MIIX Subsidiaries will be prohibited, directly or indirectly,
from
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paying any dividends to the Company, from making any other distribution on
such MIIX Subsidiary's capital stock, from repaying to the Company any
loans or advances to such MIIX Subsidiary from the Company or from
transferring any of such MIIX Subsidiary's property or assets to the
Company or any other subsidiary of the Company, except as described in or
contemplated by the Prospectus. Neither the Company, the Exchange nor any
MIIX Subsidiary has received any notice of, or otherwise has any knowledge
of, the issuance of, or commencement of any proceeding for the issuance of,
any order or decree of an insurance regulatory agency or body, which order
or decree would impair, restrict or prohibit the payment of dividends by
any MIIX Subsidiary to the Company or to any other MIIX Subsidiary.
(cc) Except as disclosed in the Prospectus (exclusive of any
supplement thereto), none of the Exchange or the Insurance Subsidiaries has
made a material change in its insurance reserving practices since March 31,
1999.
(dd) Each of the Company, the Exchange and the MIIX Subsidiaries
possesses all licenses, certificates, permits and other authorizations
issued by the appropriate federal, state or foreign regulatory authorities
necessary to conduct its business as currently conducted and to own or
lease, as the case may be, and to operate its properties except to the
extent that the failure to possess such licenses, certificates, permits and
other authorizations, would not, individually or in the aggregate, have a
Material Adverse Effect; and neither the Company, the Exchange nor any such
MIIX Subsidiary has received any notice of any proceeding relating to the
revocation or modification of any such license, certificate, permit or
authorization which, individually or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would have a Material Adverse
Effect, except as set forth in or contemplated in the Prospectus (exclusive
of any supplement thereto).
(ee) Each of the Company, the Exchange and the Insurance Subsidiaries
is duly organized and licensed as an insurance or insurance holding company
in its respective jurisdiction of organization or incorporation, as the
case may be, and none of the Company, the Exchange and the MIIX
Subsidiaries has received any notification from any insurance regulatory
authority to the effect that any additional authorization, approval, order,
consent, license, certificate, permit, registration or qualification from
such insurance regulatory authority is needed to be obtained; each of the
Company, the Exchange and the Insurance Subsidiaries is duly licensed and
authorized to conduct its insurance business under the insurance laws of
each jurisdiction in which it conducts such business so as to require such
licensing and authorization; all such licenses and authorizations are in
full force and effect, the Company, the Exchange and each Insurance
Subsidiary have fulfilled and performed all obligations necessary to
maintain such licenses and authorizations, and there is no event or
proceeding or, to the Company's knowledge, inquiry or investigation that
could result in the suspension, revocation or limitation of any such
licenses or authorizations or otherwise impose any limitation on the
conduct of the business of the Company, the Exchange or any Insurance
Subsidiary, and there is no sustainable basis for any such suspension,
revocation or limitation; each of the Company, the Exchange and the
Insurance Subsidiaries is in compliance with, and conducts its business in
conformity with, all applicable insurance
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laws and regulations, except where the failure to comply or conform with
such laws and regulations, would not, individually or in the aggregate,
have a Material Adverse Effect; all pending significant examinations, and
all significant examinations that have been completed since March 5, 1999
by any governmental authority having jurisdiction to regulate the insurance
operations of the Company, the Exchange or any Insurance Subsidiary are
disclosed in the Prospectus. The Company, the Exchange and each Insurance
Subsidiary have filed all reports, information statements and other
documents with the insurance regulatory authorities of each jurisdiction
which requires any such filing and as are required to be filed pursuant to
the insurance statutes of such jurisdictions and the rules and regulations
of the insurance regulatory authorities thereunder.
(ff) All reinsurance treaties and arrangements to which the Exchange
or any of the Insurance Subsidiaries is a party are in full force and
effect and neither the Exchange nor any of the Insurance Subsidiaries is in
violation of or in default in the performance, observance or fulfillment
of, any material obligation, agreement, covenant or condition contained
therein; upon the effectiveness of the Transfer, all such treaties and
arrangements to which the Exchange is a party shall remain in full force
and effect and inure to the benefit of, and be enforceable by, MIIX
Insurance; neither the Company, the Exchange nor any of the Insurance
Subsidiaries has received any notice from any of the other parties to such
treaties or arrangements that such other party intends not to perform such
treaty or arrangement, except as would not have a Material Adverse Effect
and, each of the Company, the Exchange and the Insurance Subsidiaries, to
its best knowledge, has no reason to believe that any of the other parties
to such treaties or arrangements will be unable to perform any such
treaties or arrangements, except as would not have a Material Adverse
Effect.
(gg) No change in any insurance laws, rules or regulations has been
introduced in any legislative or regulatory forum in the State of New
Jersey, Pennsylvania or Virginia, or, to the knowledge of each MIIX Entity,
in any other state that if adopted, is likely to have, either individually
or in the aggregate with all other changes referred to in this paragraph
(gg) (if any), a Material Adverse Effect.
(hh) The Exchange and LP&C are each rated "A" (Excellent) by A.M. Best
& Company Inc. ("A.M. Best"). The MIIX Entities have had recent discussions
with A.M. Best. Each MIIX Entity believes that the first rating issued by
A.M. Best after the Plan Effective Time for each of MIIX Insurance and LP&C
will be an "A" (Excellent) rating.
(ii) Each of the Company, the Exchange and the MIIX Subsidiaries
maintains a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to maintain
asset accountability; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv)
the recorded accountability for assets is compared with the existing assets
at reasonable intervals and appropriate action
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is taken with respect to any differences. On and after the Plan Effective
Time, each of the Company and the MIIX Subsidiaries will continue to
maintain such a system.
(jj) Neither the Company, the Exchange nor any MIIX Subsidiary has
taken, directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result, under
the Exchange Act or otherwise, in stabilization or manipulation of the
price of any security of the Company to facilitate the sale or resale of
the Securities or the Reorganization Shares.
(kk) Each of the Company, the Exchange and the MIIX Subsidiaries is
(i) in compliance with any and all applicable foreign, federal, state and
local laws and regulations relating to the protection of human health and
safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants ("Environmental Laws"), (ii) has received and is
in compliance with all permits, licenses or other approvals required of it
under applicable Environmental Laws to conduct its business and (iii) has
not received notice of any actual or potential liability for the
investigation or remediation of any disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, except where such
non-compliance with Environmental Laws, failure to receive required
permits, licenses or other approvals, or liability would not, individually
or in the aggregate, have a Material Adverse Effect, except as set forth in
or contemplated in the Prospectus (exclusive of any supplement thereto).
Neither the Company, the Exchange nor any MIIX Subsidiary has been named as
a "potentially responsible party" under the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended.
(ll) Each of the Company, the Exchange and the MIIX Subsidiaries has
fulfilled its obligations, if any, under the minimum funding standards of
Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Employee Retirement Income Security Act of
1974 ("ERISA") and the regulations and published interpretations thereunder
with respect to each "plan" (as defined in Section 3(3) of ERISA and such
regulations and published interpretations) in which employees of the
Company, the Exchange or any MIIX Subsidiary are eligible to participate
and each such plan is in compliance in all material respects with the
presently applicable provisions of ERISA and such regulations and published
interpretations. Neither the Company, the Exchange nor any MIIX Subsidiary
has incurred any unpaid liability to the Pension Benefit Guaranty
Corporation (other than for the payment of premiums in the ordinary course)
or to any such plan under Title IV of ERISA.
(mm) The subsidiaries listed on Annex A attached hereto are the only
subsidiaries of the Exchange and the Attorney-in-Fact, respectively. MIIX
Insurance is the only significant subsidiary of the Exchange, and will be
the only significant subsidiary of the Company immediately after the Plan
Effective Time, as defined by Rule 1-02 of Regulation S-X. For purposes of
this Agreement, the term "Significant Subsidiary" shall mean each of MIIX
Insurance and LP&C.
(nn) Each of the Company, the Exchange and the MIIX Subsidiaries owns,
possesses, licenses or has other rights to use, on reasonable terms, all
patents, patent applications, trade and service marks, trade and service
xxxx registrations, trade names,
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copyrights, licenses, inventions, trade secrets, technology, know-how and
other intellectual property (collectively, other than software generally
available for public purchase, the "Intellectual Property") necessary for
the conduct of its business as now conducted or as proposed in the
Prospectus to be conducted. There are no rights of third parties to any
such Intellectual Property, except for the rights of owners of Intellectual
Property licensed by the Company, the Exchange or the MIIX Subsidiaries; to
the Company's knowledge, there is no material infringement by third parties
of any such Intellectual Property; there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others
challenging the Company's, the Exchange's or any MIIX Subsidiary's rights
in or to any such Intellectual Property (including software generally
available for public purchase), and each of the Company, the Exchange and
the MIIX Subsidiaries is unaware of any facts which would form a reasonable
basis for any such claim; there is no pending or, to the Company's
knowledge, threatened action, suit, proceeding or claim by others
challenging the validity or scope of any such Intellectual Property, and
each of the Company, the Exchange and the MIIX Subsidiaries is unaware of
any facts which would form a reasonable basis for any such claim; there is
no pending or, to the Company's knowledge, threatened action, suit,
proceeding or claim by others that the Company, the Exchange or any MIIX
Subsidiary infringes or otherwise violates any patent, trademark,
copyright, trade secret or other proprietary rights of others, and each of
the Company, the Exchange and the MIIX Subsidiaries is unaware of any other
fact which would form a reasonable basis for any such claim; there is no
U.S. patent or, to the Company's knowledge, published U.S. patent
application which contains claims that dominate or may dominate any
Intellectual Property described in the Prospectus as being owned by or
licensed to the Company, the Exchange or any MIIX Subsidiary or that
interferes with the issued or pending claims of any such Intellectual
Property; and there is no prior art of which the Company, the Exchange or
any MIIX Subsidiary is aware that may render any U.S. patent held by the
Company invalid or any U.S. patent application held by the Company, the
Exchange or any MIIX Subsidiary unpatentable which has not been disclosed
to the U.S. Patent and Trademark Office. Immediately after the Plan
Effective Time, all of the Exchange's rights in respect of such
Intellectual Property shall inure to the benefit of, and be enforceable by,
MIIX Insurance.
(oo) Except as disclosed in the Registration Statement and the
Prospectus, neither the Company, the Exchange nor any MIIX Subsidiary (i)
has any material lending or other relationship with any bank or lending
affiliate of First Union Capital Markets Corp., Friedman, Billings, Xxxxxx
& Co., Inc. or Xxxxxx & Xxxxxx Incorporated and (ii) intends to use any of
the proceeds from the sale of the Securities hereunder to repay any
outstanding debt owed to any affiliate of First Union Capital Markets
Corp., Friedman, Billings, Xxxxxx & Co., Inc. or Xxxxxx & Xxxxxx
Incorporated.
(pp) The Company, the Exchange and the MIIX Subsidiaries have
implemented a program to analyze and address the risk that the computer
hardware and software used by each of them may be unable to recognize and
properly execute date-sensitive functions involving certain dates prior to
and any dates after December 31, 1999 (the "Year 2000 Problem"), and have
determined that such risk will not have a Material Adverse Effect; and the
Company, the Exchange and the MIIX Subsidiaries believe, after due inquiry,
that each supplier, vendor, or financial service organization used or
serviced
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by the Company, the Exchange or any MIIX Subsidiary has remedied or will
remedy on a timely basis the Year 2000 Problem, except to the extent that a
failure to remedy by any such supplier, vendor, or financial service
organization would not, individually or in the aggregate with all such
other failures, have a Material Adverse Effect.
(qq) Except as disclosed in the Prospectus, there are no business
relationships or related party transactions required to be disclosed
therein by Item 404 of Regulation S-K of the Commission.
(rr) MIIX Insurance has obtained regulatory approval to become an
admitted carrier in the states of Connecticut, Delaware, Maryland,
Michigan, New Jersey, Pennsylvania, Vermont and West Virginia and will, as
of the Closing Date, have obtained regulatory approval to become an
admitted carrier in the state of Kentucky. MIIX insurance has also obtained
regulatory approval of its rates, rules and policy forms in each of those
states. The state of Virginia has approved the change in LP&C's ultimate
parent from the Exchange to the Company and the state of New York has
approved the change in MIIX New York's ultimate parent from the Exchange to
the Company. The appropriate regulatory bodies in the states of
Connecticut, Delaware and West Virginia have approved the assignment to
MIIX Insurance of all reinsurance agreements to which the Exchange is a
party, and the reinsurers to such agreements have consented to such
assignment.
Furthermore, each of the MIIX Entities, jointly and severally,
represents and warrants to First Union that it has not offered, or caused the
Underwriters to offer, Underwritten Securities to any person pursuant to the
Directed Share Program with the specific intent to unlawfully influence (x) a
customer or supplier of any of the MIIX Entities to alter the customer's or
supplier's level or type of business with such MIIX Entity, or (y) a trade
journalist or publication to write or publish favorable information about any
MIIX Entity or its products.
Any certificate signed by any officer of a MIIX Entity and
delivered to the Representatives or counsel for the Underwriters in connection
with the offering of the Securities shall be deemed a representation and
warranty by such MIIX Entity, as to matters covered thereby, to each
Underwriter.
2. Purchase and Sale. (a) Subject to the terms and conditions
and in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Underwriter, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
$ per share, the amount of the Underwritten Securities set forth opposite such
Underwriter's name in Schedule I hereto.
(b) Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company hereby grants
an option to the several Underwriters to purchase, severally and not jointly, up
to Option Securities at the same purchase price per share as the Underwriters
shall pay for the Underwritten Securities. Said option may be exercised only to
cover over-allotments in the sale of the Underwritten Securities by the
Underwriters. Said option may be exercised in whole or in part at any time (but
not more than once) on or before the 30th day after the date of the Prospectus
upon written or telegraphic notice
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by the Representatives to the Company setting forth the number of shares of the
Option Securities as to which the several Underwriters are exercising the option
and the settlement date. The number of Option Securities to be purchased by each
Underwriter shall be the same percentage of the total number of shares of the
Option Securities to be purchased by the several Underwriters as such
Underwriter is purchasing of the Underwritten Securities, subject to such
adjustments as you in your absolute discretion shall make to eliminate any
fractional shares.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Securities and (if the option provided for in Section 2(b) hereof
shall have been exercised on or before the third Business Day prior to the
Closing Date) the Option Securities shall be made at 10:00 AM, New York City
time, on , 19 , or at such time on such later date not more than three Business
Days after the foregoing date as the Representatives shall designate, which date
and time may be postponed by agreement between the Representatives and the
Company or as provided in Section 9 hereof (such date and time of delivery and
payment for the Securities being herein called the "Closing Date"). Delivery of
the Securities shall be made to the Representatives for the respective accounts
of the several Underwriters against payment by the several Underwriters through
the Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. Delivery of the Underwritten Securities and the Option Securities
shall be made through the facilities of The Depository Trust Company unless the
Representatives shall otherwise instruct.
If the option provided for in Section 2(b) hereof is exercised
after the third Business Day prior to the Closing Date, the Company will deliver
the Option Securities (at the expense of the Company) to the Representatives, at
the offices of Cleary, Gottlieb, Xxxxx & Xxxxxxxx, counsel for the Underwriters,
at Xxx Xxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx, xx the date specified by the
Representatives (which shall be within two and five Business Days after exercise
of said option) for the respective accounts of the several Underwriters, against
payment by the several Underwriters through the Representatives of the purchase
price thereof to or upon the order of the Company by wire transfer payable in
same-day funds to an account specified by the Company. If settlement for the
Option Securities occurs after the Closing Date, the Company will deliver to the
Representatives on the settlement date for the Option Securities, and the
obligation of the Underwriters to purchase the Option Securities shall be
conditioned upon receipt of, supplemental opinions, certificates and letters
confirming as of such date the opinions, certificates and letters delivered on
the Closing Date pursuant to Section 6 hereof.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Agreements. Each of the MIIX Entities, jointly and
severally, agrees with the several Underwriters that:
(a) The Company will use its best efforts to cause the
Registration Statement, if not effective at the Execution Time, and any
amendment thereof, to become effective. Prior to the termination of the
offering of the Securities, the Company will not file any amendment of
the Registration Statement, any supplement to the Prospectus, or any
Rule 462(b) Registration Statement unless the Company has furnished you
a copy for
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your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the
foregoing sentence, if the Registration Statement has become or
becomes effective pursuant to Rule 430A, or filing of the Prospectus
is otherwise required under Rule 424(b), the Company will cause the
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule
424(b) within the time period prescribed and will provide evidence
satisfactory to the Representatives of such timely filing. The Company
will promptly advise the Representatives (1) when the Registration
Statement, if not effective at the Execution Time, shall have become
effective, (2) when the Prospectus, and any supplement thereto, shall
have been filed (if required) with the Commission pursuant to Rule
424(b) or when any Rule 462(b) Registration Statement shall have been
filed with the Commission, (3) when, prior to termination of the
offering of the Securities, any amendment to the Distribution
Registration Statement or the Registration Statement shall have been
filed or become effective, (4) of any request by the Commission or its
staff for any amendment of the Distribution Registration Statement or
the Registration Statement, or any Rule 462(b) Distribution
Registration Statement or any Rule 462(b) Registration Statement, or
for any supplement to the Distribution Prospectus or the Prospectus or
for any additional information, (5) of the issuance by the Commission
of any stop order suspending the effectiveness of the Distribution
Registration Statement or the Registration Statement or the
institution or threatening of any proceeding for that purpose and (6)
of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale, or of the
Reorganization Shares for distribution, in any jurisdiction or the
institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such
stop order or the suspension of any such qualification and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Securities is required to be delivered under the Act, any event occurs
as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, or if it shall
be necessary to amend the Registration Statement or supplement the
Prospectus to comply with the Act or the rules thereunder, the Company
promptly will (1) notify the Representatives of any such event, (2)
prepare and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 5, an amendment or supplement which will
correct such statement or omission or effect such compliance, and (3)
supply any supplemented Prospectus to you in such quantities as you may
reasonably request.
(c) No later than 45 days following September 30, 2000, the
Company will make generally available to its security holders and to
the Representatives an earnings statement or statements of the Company
and its subsidiaries which will satisfy the provisions of Section 11(a)
of the Act and Rule 158 under the Act. The Company will file or cause
to be filed with the Commission the information required by Rule 463
under the Act.
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(d) The Company will furnish to the Representatives and
counsel for the Underwriters signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a
copy of the Registration Statement (without exhibits thereto) and, so
long as delivery of a prospectus by an Underwriter or dealer may be
required by the Act, as many copies of each Preliminary Prospectus and
the Prospectus and any supplement thereto as the Representatives may
reasonably request.
(e) The Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate and will maintain
such qualifications in effect so long as required for the distribution
of the Securities; provided, however, that in no event shall the
Company be obligated to qualify to do business in any jurisdiction
where it is not now so qualified or to take any action that would
subject it to service of process in suits, other than those arising out
of the offering or sale of the Securities, in any jurisdiction where it
is not now so subject.
(f) The Company will not, without the prior written consent of
First Union Capital Markets Corp., for a period of 180 days following
the Execution Time, offer, sell or contract to sell, or otherwise
dispose of (or enter into any transaction which is designed to, or
might reasonably be expected to, result in the disposition (whether by
actual disposition or effective economic disposition due to cash
settlement or otherwise) by the Company or any affiliate of the Company
or any person in privity of contract with the Company or any affiliate
of the Company) directly or indirectly, or announce the offering of,
any other shares of Common Stock or any securities convertible into, or
exchangeable for, shares of Common Stock; provided, however, that the
Company may issue and sell Common Stock and options to purchase Common
Stock pursuant to any employee stock option plan, stock ownership plan
or dividend reinvestment plan of the Company in effect at the Execution
Time, the Company may issue Common Stock issuable upon the conversion
of securities or the exercise of warrants outstanding at the Execution
Time, the Company may issue and distribute Reorganization Shares to
Distributees pursuant to the Plan and the Company may make the other
stock and option issuances described in the Prospectus.
(g) Neither the Company, the Exchange or any MIIX Subsidiary
will take, directly or indirectly, any action designed to or which has
constituted or which might reasonably be expected to cause or result,
under the Exchange Act or otherwise, in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or
resale of the Securities or the Reorganization Shares.
(h) Each MIIX Entity, jointly and severally, agrees to pay the
costs and expenses relating to the following matters: (i) the
preparation, printing or reproduction and filing with the Commission of
the Registration Statement (including financial statements and exhibits
thereto), each Preliminary Prospectus, the Prospectus, and each
amendment or supplement to any of them; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and
charges for counting and packaging) of such copies of the Registration
Statement, each Preliminary Prospectus, the Prospectus, and all
amendments or supplements to any of them, as may, in each case, be
reasonably
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requested for use in connection with the offering and sale of the
Securities; (iii) the preparation, printing, authentication, issuance
and delivery of certificates for the Securities, including any stamp
or transfer taxes in connection with the original issuance and sale of
the Securities; (iv) the printing (or reproduction) and delivery of
this Agreement, any blue sky memorandum and all other agreements or
documents printed (or reproduced) and delivered in connection with the
offering of the Securities; (v) the registration of the Securities
under the Exchange Act and the listing of the Securities on the New
York Stock Exchange; (vi) any registration or qualification of the
Securities for offer and sale under the securities or blue sky laws of
the several states (including filing fees and the fees and expenses of
counsel for the Underwriters relating to such registration and
qualification); (vii) any filings required to be made with the
National Association of Securities Dealers, Inc. (including filing
fees and the fees and expenses of counsel for the Underwriters
relating to such filings); (viii) the transportation and other
expenses incurred by or on behalf of representatives of the Company,
the Exchange or any MIIX Subsidiary in connection with presentations
to prospective purchasers of the Securities; (ix) the fees and
expenses of the Company's, the Exchange's and each MIIX Subsidiary's
accountants and the fees and expenses of counsel (including local and
special counsel) for each of the Company, the Exchange and each MIIX
Subsidiary; (x) all other costs and expenses incident to the
performance by the Company of its obligations hereunder; (xi) all
costs and expenses incurred in connection with the Reorganization; and
(xii) all stamp duties, similar taxes or duties or other taxes, if
any, incurred by First Union in connection with the Directed Share
Program; provided, however, that the fees and expenses of counsel for
the Underwriters referenced in (vi) and (vii) above shall not exceed
$10,000 in the aggregate.
(i) Each MIIX Entity will use its best efforts to (i) effect
the listing of the Securities and the Reorganization Shares on the New
York Stock Exchange and (ii) to obtain an "A" (Excellent) rating by
A.M. Best for MIIX Insurance and for LP&C.
(j) Prior to or contemporaneously with the Closing Date, the
Company, the Exchange and each MIIX Subsidiary will each use its best
efforts to take all actions necessary in order to consummate the Plan
and the transactions contemplated thereby.
(k) In connection with the Directed Share Program, each MIIX
Entity will ensure that the Directed Shares will be restricted to the
extent required by the National Association of Securities Dealers, Inc.
(the "NASD") or the NASD rules from sale, transfer, assignment, pledge
or hypothecation for a period of three months following the date of the
effectiveness of the Registration Statement. First Union will notify
the Company as to which Participants will need to be so restricted. The
Company will direct the removal of the transfer restrictions upon the
expiration of such period of time.
6. Conditions to the Obligations of the Underwriters. The
obligations of the Underwriters to purchase the Underwritten Securities and the
Option Securities, as the case may be, shall be subject to the accuracy of the
representations and warranties on the part of the MIIX Entities contained herein
as of the Execution Time, the Closing Date and any settlement date pursuant to
Section 3 hereof, to the accuracy of the statements of the MIIX Entities made in
any
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certificates pursuant to the provisions hereof, to the performance by the MIIX
Entities of their respective obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become effective
prior to the Execution Time, unless the Representatives agree in
writing to a later time, the Registration Statement will become
effective not later than (i) 6:00 PM New York City time on the date of
determination of the public offering price, if such determination
occurred at or prior to 3:00 PM New York City time on such date or (ii)
10:00 AM on the Business Day following the day on which the public
offering price was determined, if such determination occurred after
3:00 PM New York City time on such date; if filing of the Prospectus,
or any supplement thereto, is required pursuant to Rule 424(b), the
Prospectus, and any such supplement, will be filed in the manner and
within the time period required by Rule 424(b); and no stop order
suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been
instituted or threatened.
(b) The Company shall have requested and caused Dechert Price
& Xxxxxx, counsel for the Company, to have furnished to the
Representatives their opinion, dated the Closing Date and addressed to
the Representatives, to the effect that:
(i) each of the Company and MIIX Insurance has been
duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it
is chartered or organized, with full corporate power and
corporate authority to own or lease, as the case may be, and
to operate its properties and conduct its business as
described in the Prospectus;
(ii) based upon a review of (a) the stock ledger of
MIIX Insurance, (b) the minutes of meetings of the Boards of
Directors and Stockholders of MIIX Insurance and (c) the
Officers' Certificate attached thereto as Exhibit A, all the
outstanding shares of capital stock of MIIX Insurance have
been duly and validly authorized and issued and are fully paid
and nonassessable;
(iii) the Company's authorized equity capitalization
is as set forth in the Prospectus; the capital stock of the
Company conforms in all material respects to the description
thereof contained in the Prospectus; based upon a review of
(a) the stock ledger of the Company, (b) the minutes of
meetings of the Boards of Directors and stockholders of the
Company and (c) the Officers' Certificate attached thereto as
Exhibit A, the outstanding shares of Common Stock have been
duly and validly authorized and issued and are fully paid and
nonassessable; the Securities have been duly and validly
authorized, and, when issued and delivered to and paid for by
the Underwriters pursuant to this Agreement, will be fully
paid and nonassessable; the Reorganization Shares have been
duly and validly authorized, and, when issued and delivered to
the Exchange for distribution to Members in exchange for their
Membership Interests and to Look-Back Insureds, in each case
as provided in the Plan, will be fully paid and nonassessable,
no holder thereof will be subject to personal liability by
reason of being such a holder and all corporate action
required to be taken for the authorization and issuance of
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the Reorganization Shares has been validly and sufficiently
taken; the Securities and the Reorganization Shares are duly
listed, and admitted and authorized for trading, subject to
official notice of issuance and evidence of satisfactory
distribution, on the New York Stock Exchange; the
certificates for the Securities and the Reorganization
Shares are in valid and sufficient form; neither the holders
of outstanding shares of capital stock of the Company, the
Distributees nor the other policyholders of the Exchange are
entitled to preemptive or other rights to subscribe for the
Securities and, except as set forth in the Prospectus, to
the knowledge of such counsel, no options, warrants or other
rights to purchase, agreements or other obligations to
issue, or rights to convert any obligations into or exchange
any securities for, shares of capital stock of or ownership
interests in the Company or any Significant Subsidiary are
outstanding;
(iv) the Registration Statement has become effective
under the Act; any required filing of the Prospectus, and
any supplements thereto, pursuant to Rule 424(b) has been
made in the manner and within the time period required by
Rule 424(b); to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement
has been issued, no proceedings for that purpose have been
instituted or threatened and the Registration Statement and
the Prospectus (other than the financial statements and
other financial information contained therein, as to which
such counsel need express no opinion) comply as to form in
all material respects with the applicable requirements of
the Act and the rules thereunder; and such counsel has no
reason to believe that on the Effective Date or at the
Execution Time the Registration Statement contained any
untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to
make the statements therein not misleading or that the
Prospectus as of its date or on the Closing Date included or
includes any untrue statement of a material fact or omitted
or omits to state a material fact necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading (in each case, other
than the financial statements and other financial
information contained therein, as to which such counsel need
express no opinion);
(v) this Agreement has been duly authorized, executed
and delivered by each MIIX Entity;
(vi) the Company has full corporate power and authority
to execute and deliver the Stock Purchase Agreement and to
perform its respective obligations thereunder; each of the
Company and MIIX Insurance has full corporate power and
authority to execute and deliver each Assumption Agreement
and to perform its respective obligations thereunder; each
of the Assumption Agreements and the Stock Purchase
Agreement has been duly authorized, executed and delivered
by each MIIX Entity that is a party thereto and constitutes
a valid and binding obligation of each such MIIX Entity
enforceable in accordance with its terms, except as such
enforceability may be limited by bankruptcy, insolvency,
moratorium or similar laws now or hereafter in effect
relating to creditors' rights
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generally, and by general principles of equity (regardless
of whether enforceability is considered in a proceeding at
law or in equity);
(vii) neither the Company nor any of the MIIX
Subsidiaries is and, after giving effect to the offering and
sale of the Securities and/or the Reorganization Shares and
the application of the proceeds thereof as described in the
Prospectus, will be an "investment company" or an entity
"controlled" by an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended;
(viii) no consent, approval, authorization, filing with
or order of any court or governmental agency or body is
required in connection with the sale of the Securities and
other agreements in the Underwriting Agreement, except such
as have been obtained and are in full force and effect under
the Act and such as may be required under the state
securities laws or insurance laws of any jurisdiction or the
rules of the National Association of Securities Dealers,
Inc. in connection with the purchase and distribution of the
Securities by the Underwriters in the manner contemplated in
this Agreement and in the Prospectus, and such other
approvals (specified in such opinion) as have been obtained;
(ix) to the knowledge of such counsel, no person has
rights to the registration of any securities of the Company
(owned or to be owned by such person) under the Registration
Statement;
(x) the Distribution Registration Statement has become
effective under the Act; any required filing of the
Distribution Prospectus, and any supplement thereto,
pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the
knowledge of such counsel, no stop order suspending the
effectiveness of the Distribution Registration Statement has
been issued, no proceedings for that purpose have been
instituted or threatened; and such counsel has no reason to
believe that on the Distribution Effective Date or the
Special Meeting Date, the Distribution Registration
Statement contained any untrue statement of a material fact
or omitted to state any material fact required to be stated
therein or necessary to make the statements therein not
misleading or that the Distribution Prospectus, on the
Distribution Effective Date or the Special Meeting Date,
included any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they
were made, not misleading (in each case, other than the
financial statements and other financial information
contained therein, as to which such counsel need express no
opinion); and
(xi) neither the issue and sale of the Securities or
the Reorganization Shares nor the consummation of any other
of the transactions contemplated herein or in the Plan nor
the fulfillment of the terms hereof or thereof will conflict
with, result in a breach or violation of or imposition of
any lien, charge or encumbrance upon any property or assets
of the Company, any Significant Subsidiary or the
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Exchange pursuant to, (i) the charter, by-laws or any other
organizational document of the Company, any Significant
Subsidiary or the Exchange, (ii) the terms of any indenture,
contract, lease, mortgage, deed of trust, note agreement,
loan agreement or other agreement filed as an exhibit to the
Registration Statement, or (iii) any statute, law, rule,
regulation, judgment, order or decree applicable to the
Company, any Significant Subsidiary or the Exchange (other
than those pertaining to insurance laws and regulations, as
to which such counsel need express no opinion) of any
Federal or New Jersey court, regulatory body, administrative
agency, governmental body, arbitrator or other authority
having jurisdiction over the Company, any Significant
Subsidiary or the Exchange or any of their respective
properties, which violation or default would, in the case of
clause (ii) and (iii) above, either individually or in the
aggregate with all other violations and defaults referred to
in this paragraph (xi) (if any), have a Material Adverse
Effect.
Such opinion shall also cover any other matters reasonably requested by
the Representatives. In rendering such opinion, such counsel may rely
(A) as to matters involving the application of laws of any jurisdiction
other than the States of Delaware, New Jersey, New York, or the Federal
laws of the United States, to the extent they deem proper and specified
in such opinion, upon the opinion of other counsel of good standing
whom they believe to be reliable and who are satisfactory to counsel
for the Underwriters and (B) as to matters of fact, to the extent they
deem proper, on certificates of responsible officers of the Company and
public officials. References to the Prospectus in this paragraph (b)
include any supplements thereto at the Closing Date.
(c) The Company shall have requested and caused Xxxxxx X.
Xxxxx, Esq., Vice President, Regulatory Affairs, of the
Attorney-in-Fact, to have furnished to the Representatives her opinion,
dated the Closing Date and addressed to the Representatives, to the
effect that:
(i) to the knowledge of such counsel, there is no
pending or threatened action, suit or proceeding by or before
any court or governmental agency, authority or body or any
arbitrator involving the Company, the Exchange, any
Significant Subsidiary or their respective property of a
character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Prospectus,
and there is no franchise, contract or other document of a
character required to be described in the Registration
Statement or Prospectus, or to be filed as an exhibit thereto,
which is not described or filed as required;
(ii) the statements included in the Prospectus under
the headings "Prospectus Summary -- the Reorganization and
Distribution", " -- Regulatory Approvals", "Risk Factors --
Actions Opposing the Plan of Reorganization", " -- Regulatory
and Related Matters", " -- State Insurance Regulatory
Approvals", "The Reorganization", "Business -- Regulation", "
-- Litigation" fairly summarize the matters therein described;
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(iii) each of the Company, the Exchange and the
Significant Subsidiaries owns, possesses or has obtained all
licenses, certificates, permits, consents, orders, approvals
and other authorizations issued by the appropriate federal,
state or foreign regulatory authorities necessary to conduct
its business as currently conducted and to own or lease, as
the case may be, and to operate its properties, and neither
the Company, the Exchange nor any such Significant Subsidiary
has received any notice of any proceeding relating to the
revocation or modification of any such license, certificate,
permit, consent, order, approval or authorization which,
singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a Material Adverse
Effect, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto);
(iv) the Exchange has full power and authority to
execute and deliver each Assumption Agreement and the Plan and
to perform its obligations thereunder; the Plan has been duly
authorized and executed by the Exchange;
(v) each of the Company, the Exchange, the
Significant Subsidiaries and MIIX New York is duly organized
and licensed as an insurance or insurance holding company in
its respective jurisdiction of organization or incorporation,
as the case may be, and none of the Company, the Exchange and
the Significant Subsidiaries has received any notification
from any insurance regulatory authority to the effect that any
additional authorization, approval, order, consent, license,
certificate, permit, registration or qualification from such
insurance regulatory authority is needed to be obtained; each
of the Company, the Exchange and the Significant Subsidiaries
is duly licensed and authorized (and MIIX New York is duly
licensed) to conduct its insurance business under the
insurance laws of each jurisdiction in which it conducts such
business so as to require such licensing and authorization;
all such licenses and authorizations are in full force and
effect, the Company, the Exchange, each Significant Subsidiary
and MIIX New York have fulfilled and performed all obligations
necessary to maintain such licenses and authorizations, and
there is no event or proceeding or, to such counsel's
knowledge, inquiry or investigation, that would reasonably be
expected to result in the suspension, revocation or limitation
of any such licenses or authorizations or otherwise impose any
limitation on the conduct of the business of the Company, the
Exchange, any Significant Subsidiary or MIIX New York, and
there is no sustainable basis for any such suspension,
revocation or limitation; each of the Company, the Exchange,
the Significant Subsidiaries and MIIX New York is in
compliance with, and conducts its business in conformity with,
all applicable insurance laws and regulations, except where
the failure to comply or conform with such laws and
regulations, would not, individually or in the aggregate, have
a Material Adverse Effect; the Company, the Exchange, each
Significant Subsidiary and MIIX New York have filed all
reports, information statements and other documents with the
insurance regulatory authorities of each jurisdiction which
requires any such filing and as are required to be filed
pursuant to the insurance statutes of such jurisdictions and
the rules and regulations of the insurance regulatory
authorities thereunder; based upon a review of (a) the stock
ledger of LP&C, (b) the minutes of meetings of the board of
directors and
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stockholders of LP&C and (c) the officer's certificate
attached thereto as Exhibit A, all the outstanding shares of
capital stock of LP&C have been duly and validly authorized
and issued and are fully paid and nonassessable.
(vi) all reinsurance treaties and arrangements to which
the Exchange or any of the Insurance Subsidiaries is a party
are in full force and effect and neither the Exchange nor
any of the Insurance Subsidiaries is in violation of or in
default in the performance, observance or fulfillment of,
any obligation, agreement, covenant or condition contained
therein; upon the effectiveness of the Transfer, all such
treaties and arrangements to which the Exchange is a party
shall remain in full force and effect and inure to the
benefit of, and be enforceable by, MIIX Insurance; to the
knowledge of such counsel, after due inquiry, neither the
Company, the Exchange nor any of the Insurance Subsidiaries
has received any notice from any of the other parties to
such treaties or arrangements that such other party intends
not to perform such treaty or arrangement, except as would
not have a Material Adverse Effect;
(vii) the Exchange is a reciprocal insurance exchange
duly organized under the laws of the State of New Jersey and
is in compliance in all material respects with the
requirements of the insurance laws of the State of New
Jersey providing for the organization and regulation of
reciprocal insurance exchanges; and has full power and
authority to own or lease, as the case may be, and to
operate its properties and conduct its business as described
in the Prospectus, and is duly qualified to do business as a
foreign corporation and is in good standing under the laws
of each jurisdiction which requires such qualification;
(viii) no consent, approval, authorization, filing with
or order of any court or governmental agency or body is
required under the Act, the New Jersey Insurance Law or the
New Jersey Corporations Law for the consummation of the
transactions contemplated by the Plan, except such as have
been obtained and are in full force and effect; no consent,
approval, authorization, filing with or order of any court
or governmental agency or body is required for the
consummation of the sale of Securities and other agreements
in the Underwriting Agreement, except such as have been
obtained and are in full force and effect under the Act and
such as may be required under the blue sky laws of any
jurisdiction or the rules of the National Association of
Securities Dealers, Inc. in connection with the purchase and
distribution of the Securities by the Underwriters in the
manner contemplated in this Agreement and in the Prospectus,
and such other approvals (specified in such opinion) as have
been obtained;
(ix) immediately after the Plan Effective Time, all
outstanding shares of capital stock of the MIIX Subsidiaries
will be owned by the Company either directly or through MIIX
Subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel, after due
inquiry, any other security interest, claim, lien or
encumbrance, except that the stock of Lawrenceville Re, Ltd.
and Pegasus Advisors, Inc, is pledged to Underwriters
Reinsurance Company;
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25
(x) neither the issue and sale of the Securities or the
Reorganization Shares nor the consummation of any other of
the transactions contemplated herein or in the Plan nor the
fulfillment of the terms hereof or thereof will conflict
with, result in a breach or violation of or imposition of
any lien, charge or encumbrance upon any property or assets
of the Company, any Significant Subsidiary or the Exchange
pursuant to, (i) the terms of any indenture, contract,
lease, mortgage, deed of trust, note agreement, loan
agreement or other agreement filed as an exhibit to the
Registration Statement to which the Company, the Exchange or
a Significant Subsidiary is a party, or (ii) any statute,
law, rule, regulation, judgment, order or decree applicable
to the Company, any Significant Subsidiary or the Exchange
of any court, regulatory body, administrative agency,
governmental body, arbitrator or other authority having
jurisdiction over the Company, any Significant Subsidiary or
the Exchange or any of their respective properties, which
violation or default would, in the case of clause (i) and
(ii) above, either individually or in the aggregate with all
other violations and defaults referred to in this paragraph
(ix) (if any), have a Material Adverse Effect;
(xi) all necessary approvals under the New Jersey
Insurance Law or otherwise for the consummation of the
transactions contemplated by the Plan or for the
effectiveness of the Plan have been obtained; no other
actions are required to occur and no other conditions are
required to be satisfied pursuant to the New Jersey
Insurance Law at or prior to the Plan Effective Time in
order for the Plan and the transactions contemplated thereby
to be effective, except those actions or conditions that
have occurred or been satisfied; the Reorganization
(including, without limitation, the Distribution, the
Purchase and the Transfer) does not conflict with the New
Jersey Insurance Law;
(xii) MIIX Insurance has obtained regulatory approval
to become an admitted carrier in the states of Connecticut,
Delaware, Kentucky, Maryland, Michigan, New Jersey,
Pennsylvania, Vermont and West Virginia. MIIX Insurance has
also obtained regulatory approval to use the rates, rules
and policy forms previously used by the Exchange in each of
those states. The state of Virginia has approved the change
in LP&C's ultimate parent from the Exchange to the Company
and the state of New York has approved the change in MIIX
New York's ultimate parent from the Exchange to the Company.
The appropriate regulatory bodies in the states of
Connecticut, Delaware and West Virginia have approved the
assignment to MIIX Insurance of all reinsurance agreements
to which the Exchange is a party, and the reinsurers to such
agreements have consented to such assignment; and
(xiii) the opinions expressed above in (x) reflect such
counsel's judgment that a New Jersey court, upon examination
of all relevant facts and law, in a case in which the issues
were properly briefed and argued, should conclude that the
Commissioner had the inherent power and authority pursuant
to applicable New Jersey Insurance Law to approve the Plan
and issue the Order, notwithstanding the absence of specific
statutory authority governing the
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26
reorganization of New Jersey domestic reciprocal insurance
exchanges into New Jersey domestic stock insurers.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of New Jersey or the Federal laws of the United States, to the
extent such counsel deems proper and specified in such opinion, upon
the opinion of other counsel of good standing whom such counsel
believes to be reliable and who are satisfactory to counsel for the
Underwriters and (B) as to matters of fact, to the extent such counsel
deems proper, on certificates of responsible officers of the Company
and public officials. References to the Prospectus in this paragraph
(c) include any supplements thereto at the Closing Date.
(d) The Company shall have requested and caused Debevoise &
Xxxxxxxx, Special Reorganization Counsel for the Company and the
Exchange, to have furnished to the Representatives their opinion dated
the Closing Date and addressed to the Representatives, to the effect
that:
(i) the Plan and the transactions contemplated
thereby (including, without limitation, the Distribution, the
Purchase and the Transfer) do not violate New Jersey Insurance
Law; all necessary approvals which are required by the terms
of the Order for the consummation of the transactions
contemplated by the Plan or for the effectiveness of the Plan
have been obtained; each of the actions required to occur and
conditions required to be satisfied at or prior to the Plan
Effective Time pursuant to the Order or the Plan have occurred
or been satisfied; the Reorganization (including, without
limitation, the Distribution, the Purchase and the Transfer)
has been completed in accordance with the Plan and the Order,
and all the rights (including, without limitation, rights in
respect of contracts, reinsurance treaties, leases, licenses
and trademarks) and properties of the Exchange have accrued
to, and become the rights and properties of, MIIX Insurance,
and all the rights of creditors and liens of the Exchange have
become the rights of creditors and liens of MIIX Insurance;
(ii) neither the issue and sale of the Securities nor
the consummation of any other of the transactions contemplated
herein nor the fulfillment of the terms hereof or thereof will
conflict with or result in a violation of the Order or the
Plan; and
(iii) the opinions expressed above in (i) and (ii)
reflect such firm's judgment that a New Jersey court, upon
examination of all relevant facts and law, in a case in
which the issues were properly briefed and argued, should
conclude that the Commissioner had the inherent power and
authority pursuant to applicable New Jersey Insurance Law to
approve the Plan and issue the Order, notwithstanding the
absence of specific statutory authority governing the
reorganization of New Jersey domestic reciprocal insurance
exchanges into New Jersey domestic stock insurers.
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27
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
States of Delaware, New York or the Federal laws of the United States,
to the extent they deem proper and specified in such opinion, upon the
opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters and
(B) as to matters of fact, to the extent they deem proper, on
certificates of responsible officers of the Company and public
officials. References to the Prospectus in this paragraph (d) include
any supplements thereto at the Closing Date.
(e) The Company shall have requested and caused XxXxxxxx &
English, Special New Jersey Insurance Counsel for the Company and the
Exchange, to have furnished their opinion to the Representatives, dated
the Closing Date and addressed to the Representatives, to the effect
that:
(i) the Plan and the transactions contemplated
thereby (including, without limitation, the Distribution, the
Purchase and the Transfer) do not violate New Jersey Insurance
Law; all necessary approvals which are required by the terms
of the Order for the consummation of the transactions
contemplated by the Plan or for the effectiveness of the Plan
have been obtained; each of the actions required to occur and
conditions required to be satisfied at or prior to the Plan
Effective Time pursuant to the Order or the Plan have occurred
or been satisfied; the Reorganization (including, without
limitation, the Distribution, the Purchase and the Transfer)
has been completed in accordance with the Plan and the Order,
and all the rights (including, without limitation, rights in
respect of contracts, reinsurance treaties, leases, licenses
and trademarks) and properties of the Exchange have accrued
to, and become the rights and properties of, MIIX Insurance,
and all the rights of creditors and liens of the Exchange have
become the rights of creditors and liens of MIIX Insurance;
(ii) neither the issue and sale of the Securities nor
the consummation of any other of the transactions contemplated
herein nor the fulfillment of the terms hereof or thereof will
conflict with or result in a violation of the Order or the
Plan; and
(iii) the opinions expressed above in (i) and (ii)
reflect such firm's judgment that a New Jersey court, upon
examination of all relevant facts and law, in a case in which
the issues were properly briefed and argued, should conclude
that the Commissioner had the inherent power and authority
pursuant to applicable New Jersey Insurance Law to approve the
Plan and issue the Order, notwithstanding the absence of
specific statutory authority governing the reorganization of
New Jersey domestic reciprocal insurance exchanges into New
Jersey domestic stock insurers.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
State of New Jersey or the Federal laws of the United States, to the
extent they deem proper and specified in such opinion, upon the opinion
of other counsel of good standing whom they believe to be reliable and
27
28
who are satisfactory to counsel for the Underwriters and (B) as to
matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. References to
the Prospectus in this paragraph (e) include any supplements thereto at
the Closing Date.
(f) The Representatives shall have received from Cleary,
Gottlieb, Xxxxx & Xxxxxxxx, counsel for the Underwriters, such opinion
or opinions, dated the Closing Date and addressed to the
Representatives, with respect to the issuance and sale of the
Securities, the Registration Statement, the Prospectus (together with
any supplement thereto) and other related matters as the
Representatives may reasonably require, 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.
(g) The MIIX Entities shall have furnished to the
Representatives a certificate of the MIIX Entities, signed by the
Chairman of the Board or the President of each MIIX Entity and the
principal financial or accounting officer of each MIIX Entity, dated
the Closing Date, to the effect that the signers of such certificate
have carefully examined the Registration Statement, the Prospectus, any
supplements to the Prospectus and this Agreement and that:
(i) the representations and warranties of the MIIX
Entities in this Agreement are true and correct in all
material respects on and as of the Closing Date with the same
effect as if made on the Closing Date and each MIIX Entity has
complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) no stop order suspending the effectiveness of
the Registration Statement or the Distribution Registration
Statement has been issued and no proceedings for that purpose
have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial
statements included in the Prospectus (exclusive of any
supplement thereto), there has been no Material Adverse
Effect, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto).
(h) The Company shall have requested and caused Ernst & Young
LLP to have furnished to the Representatives, at the Execution Time and
at the Closing Date, letters, dated respectively as of the Execution
Time and as of the Closing Date, in form and substance satisfactory to
the Representatives, confirming that they are independent accountants
within the meaning of the Act and the applicable published rules and
regulations thereunder and that they have performed a review of the
unaudited interim financial information of the Exchange and its
subsidiaries for the three-month period ended March 31, 1999, and as at
March 31, 1999, in accordance with Statement on Auditing Standards No.
71 and stating in effect that:
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29
(i) in their opinion the audited financial statements
and financial statement schedules included in the Registration
Statement and the Prospectus and reported on by them comply as
to form in all material respects with the applicable
accounting requirements of the Act and the related published
rules and regulations;
(ii) on the basis of a reading of the latest
unaudited financial statements made available by the Exchange
and its subsidiaries; their limited review, in accordance with
standards established under Statement on Auditing Standards
No. 71, of the unaudited interim financial information for the
three-month period ended March 31, 1999, and as at March 31,
1999, as indicated in their report dated May 12, 1999;
carrying out certain specified procedures (but not an
examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such
letter; a reading of the minutes of the meetings of the Board
of Governors and the members of the Exchange, the board of
directors and the stockholders of each of the Exchange's
subsidiaries and the committees (including, without
limitation, the audit, executive and investment advisory and
finance committees) of the Exchange and each of its
subsidiaries; and inquiries of certain officials of the
Exchange and its subsidiaries who have responsibility for
financial and accounting matters of the Exchange and its
subsidiaries as to transactions and events subsequent to
December 31, 1998, nothing came to their attention which
caused them to believe that:
(1) any unaudited financial statements
included in the Registration Statement and the
Prospectus do not comply as to form in all material
respects with applicable accounting requirements of
the Act and with the published rules and regulations
of the Commission with respect to registration
statements on Form S-1; and said unaudited financial
statements are not in conformity with generally
accepted accounting principles applied on a basis
substantially consistent with that of the audited
consolidated financial statements included in the
Registration Statement and the Prospectus;
(2) with respect to the period subsequent to
March 31, 1999, there was any decrease, at a
specified date not more than five days prior to the
date of the letter, in the total assets or total
equity of the Exchange and its subsidiaries or any
increase in the total liabilities of the Exchange and
its subsidiaries, as compared with the amounts shown
on the March 31, 1999 consolidated balance sheet
included in the Registration Statement and the
Prospectus, or for the period from April 1, 1999 to
such specified date there were any decreases, as
compared with the corresponding period in the
preceding year or in the preceding quarter, in net
premiums earned, net investment income, net realized
investment gains, income before income taxes and net
income of the Exchange and its subsidiaries, except
in all instances for increases or decreases set forth
in such letter, in which case the letter shall be
accompanied by an explanation by the Exchange
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30
and its subsidiaries, as to the significance thereof
unless said explanation is not deemed necessary by
the Representatives; or
(3) the information included in the
Registration Statement and Prospectus in response to
Regulation S-K, Item 301 (Selected Financial Data),
Item 302 (Supplementary Financial Information) and
Item 402 (Executive Compensation) is not in
conformity with the applicable disclosure
requirements of Regulation S-K; and
(iii) they have performed certain other specified
procedures as a result of which they determined that certain
information of an accounting, financial or statistical nature
(which is limited to accounting, financial or statistical
information derived from the general accounting records of the
Exchange and its subsidiaries) set forth in the Registration
Statement and the Prospectus, including, without limitation,
the information set forth under the captions "Summary
Financial and Operating Data", "Selected Financial and
Operating Data" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in the
Prospectus, agrees with the accounting records of the Exchange
and its subsidiaries, excluding any questions of legal
interpretation.
References to the Prospectus in this paragraph (h) include any supplement
thereto at the date of the letter.
The Representative shall have also received from Ernst & Young LLP a letter
stating that the Exchange's and its subsidiaries' system of internal accounting
controls taken as a whole is sufficient to meet the broad objectives of internal
accounting control insofar as those objectives pertain to the prevention or
detection of errors or irregularities in amounts that would be material in
relation to the consolidated financial statements of the Exchange and its
subsidiaries.
(i) Subsequent to the Execution Time or, if earlier, the dates as of which
information is given in the Registration Statement (exclusive of any
post-effective amendment thereof) and the Prospectus (exclusive of any
supplement thereto), there shall not have been (i) any change or decrease
specified in the letter or letters referred to in paragraph (h) of this Section
6 or (ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Company, the Exchange and the MIIX Subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Prospectus (exclusive of
any supplement thereto) the effect of which, in any case referred to in clause
(i) or (ii) above, is, in the sole judgment of the Representatives, so material
and adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Securities as contemplated by the Registration
Statement (exclusive of any post-effective amendment thereof) and the Prospectus
(exclusive of any supplement thereto).
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31
(j) The Securities and the Reorganization Shares shall have
been listed and admitted and authorized for trading on the New York
Stock Exchange, and satisfactory evidence of such actions shall have
been provided to the Representatives.
(k) At the Execution Time, the Company shall have furnished to
the Representatives a letter substantially in the form of Exhibit A
hereto from each officer and director of the Company addressed to the
Representatives.
(l) The Exchange and LP&C shall have an "A" (Excellent) rating
by A.M. Best and there shall not have been any decrease in the rating
of any of the Exchange or LP&C by A.M. Best, or any notice given of any
intended or potential decrease in any such rating or of a possible
change in any such rating that does not indicate the direction of the
possible change. The Representatives shall not have any reasonable
basis on which to conclude that MIIX Insurance and LP&C will not obtain
an "A" (Excellent) rating by A.M. Best immediately after the Plan
Effective Time.
(m) The Plan shall not have been revoked, rescinded, modified
or withdrawn, and prior to or contemporaneously with the Closing Date,
each of the actions required to occur and conditions required to be
satisfied at or prior to the Plan Effective Time pursuant to the New
Jersey Insurance Law, the Plan or the Order shall have occurred or been
satisfied and the transactions contemplated by the Plan (including,
without limitation, the Distribution, the Purchase and the Transfer)
shall have been consummated in accordance with the New Jersey Insurance
Law, the Order and the Plan.
(n) Prior to the Closing Date, the Company shall have
furnished to the Representatives such further information, certificates
and documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and counsel for the
Underwriters, this Agreement and all obligations of the Underwriters hereunder
may be canceled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in
writing or by telephone or facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the offices of Cleary, Gottlieb, Xxxxx & Xxxxxxxx on the Closing
Date.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of any MIIX Entity to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Underwriters, each MIIX Entity agrees, jointly and
severally, that it will reimburse the Underwriters severally through First Union
Capital Markets Corp. on demand for
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all out-of-pocket expenses (including reasonable fees and disbursements of
counsel) that shall have been incurred by them in connection with the proposed
purchase and sale of the Securities.
8. Indemnification and Contribution. (a)(i) The MIIX Entities,
jointly and severally, agree to indemnify and hold harmless each Underwriter,
the directors, officers, employees and agents of each Underwriter and each
person who controls any Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them (each an "Underwriter Indemnitee" and
together the "Underwriter Indemnitees") may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) relate to, arise out of or are in connection with or
are based upon (A) the engagement under the Engagement Letter dated March 25,
1999 between the Exchange and First Union Capital Markets Corp. (the "Engagement
Letter") or any transaction or conduct in connection therewith, or (B) the
engagement under this Agreement or any transaction or conduct in connection
therewith (including, without limitation, the Directed Share Program), and agree
to reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating,
preparing, pursuing or defending any action, claim, suit, investigation or
proceeding related to, arising out of or in connection with or based upon (A)
the engagement under the Engagement Letter or any transaction or conduct in
connection therewith, or (B) the engagement under this Agreement or any
transaction or conduct in connection therewith (including, without limitation,
the Directed Share Program), in each case, whether or not pending or threatened
and whether or not any Underwriter Indemnitee is a party to such action, claim,
suit, investigation or proceeding; provided, however, that no indemnification
will be made pursuant to this clause (i) in respect of liability that is
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted primarily from an Underwriter Indemnitee's gross
negligence or willful misconduct; provided further that in the event that fees
or expenses have been advanced to or paid on behalf of an Underwriter Indemnitee
who is determined not to be entitled to indemnification hereunder, the
Underwriter Indemnitee shall reimburse the MIIX Entities for any such amounts
advanced or paid. Each MIIX Entity also agrees that no Underwriter Indemnitee
shall have any liability (whether direct or indirect, in contract, tort or
otherwise) to such MIIX Entity or any person asserting claims on such MIIX
Entity's behalf or otherwise in connection with any matter referred to in the
Engagement Letter or this Agreement. This indemnity agreement will be in
addition to any liability which each MIIX Entity may otherwise have.
(ii) Notwithstanding the immediately preceding clause (i), the
MIIX Entities, jointly and severally, agree to indemnify and hold harmless,
under all circumstances and without regard to whether indemnification is
available pursuant to such clause (i), each Underwriter Indemnitee against any
and all losses, claims, damages or liabilities, joint or several, to which such
Underwriter Indemnitee may become subject under the Act, the Exchange Act or
other Federal or state statutory law or regulation, at common law 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 a material fact contained in the registration statement for the
registration of the Securities as originally filed or in any amendment thereof,
or in any Preliminary Prospectus or the Prospectus, or in any amendment thereof
or supplement thereto, 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
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misleading, and agree to reimburse each such indemnified party, as incurred, for
any legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action;
provided, however, that each MIIX Entity will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon any such untrue statement or alleged untrue statement or omission or
alleged omission made in the registration statement for the registration of the
Securities as originally filed or in any amendment thereof, or in any
Preliminary Prospectus or the Prospectus, or in any amendment thereof or
supplement thereto, in each case, in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any Underwriter
through the Representatives specifically for inclusion therein; provided
further, that with respect to any untrue statement or omission of material fact
made in any Preliminary Prospectus, the indemnity agreement contained in this
Section 8(a) (ii) shall not inure to the benefit of any Underwriter from whom
the person asserting any such loss, claim, damage or liability purchased the
securities concerned, to the extent that any such loss, claim, damage or
liability of such Underwriter occurs under the circumstance where it shall have
been determined by a court of competent jurisdiction by final and nonappealable
judgment that (w) the Company had previously furnished copies of the Prospectus
to the Representatives in the requisite quantity and on a timely basis to permit
proper delivery at or prior to the written confirmation of the sale of such
securities to such person, (x) delivery of the Prospectus was required by the
Act to be made to such person, (y) the untrue statement or omission of a
material fact contained in the Preliminary Prospectus was corrected in the
Prospectus and (z) there was not sent or given to such person, at or prior to
the written confirmation of the sale of such securities to such person, a copy
of the Prospectus. This indemnity agreement will be in addition to any liability
which each MIIX Entity may otherwise have.
(b) Each Underwriter severally and not jointly agrees to
indemnify and hold harmless each MIIX Entity, each of its directors, each of its
officers, if any, who signs the Registration Statement, and each person who
controls each MIIX Entity within the meaning of either the Act or the Exchange
Act, (each a "Company Indemnitee" and together the "Company Indemnitees") to the
same extent as the indemnity contained in clause (ii) of paragraph (a) of this
Section 8 from the MIIX Entities to each Underwriter, but only with reference to
written information relating to such Underwriter furnished to the Company by or
on behalf of such Underwriter through the Representatives specifically for
inclusion in the registration statement for the registration of the Securities
as originally filed or in any amendment thereof, or in any Preliminary
Prospectus or the Prospectus, or in any amendment thereof or supplement thereto.
This indemnity agreement will be in addition to any liability which any
Underwriter may otherwise have. Each MIIX Entity acknowledges that the
statements set forth in the last paragraph of the cover page regarding delivery
of the Securities, the legend in block capital letters on page [2] related to
stabilization, syndicate covering transactions and penalty bids and, under the
heading "Underwriting" (i) the sentences related to concessions and
reallowances, (ii) the sentence relating to the Underwriter's intent with
respect to confirming sales to accounts over which they exercise discretionary
authority, and (iii) the paragraph related to stabilization, syndicate covering
transactions and penalty bids in any Preliminary Prospectus and the Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in any Preliminary Prospectus or the
Prospectus.
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(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above unless and
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses
and (ii) will not, in any event, relieve the indemnifying party from any
obligations to any indemnified party other than the indemnification obligation
provided in paragraph (a) or (b) above. The indemnifying party shall be entitled
to appoint counsel of the indemnifying party's choice at the indemnifying
party's expense to represent the indemnified party in any action for which
indemnification is sought (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be satisfactory to the indemnified
party. Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall have
the right to employ separate counsel (including local counsel), and the
indemnifying party shall bear the reasonable fees, costs and expenses of such
separate counsel if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. It is understood, however, that the indemnifying
party shall, in connection with any one action or separate but substantially
similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for (i) the fees and expenses of
only one separate firm of attorneys (in addition to any local counsel) for the
Underwriter Indemnities, and (ii) the fees and expenses of only one separate
firm of attorneys (in addition to any local counsel) for the Company
Indemnitees. In the case of any such separate firm for the Company Indemnitees,
such firm shall be designated by the Company. In the case of any such separate
firm for the Underwriter Indemnitees, such firm shall be designated by First
Union Capital Markets Corp. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding. An indemnifying
party shall not be liable under this Section 8 to any indemnified party
regarding any settlement or compromise or consent to the entry of any judgment
with respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim, action, suit or proceeding) unless (i) such settlement, compromise or
consent is consented to by such indemnifying party, which consent shall not be
withheld
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unless the settlement is unreasonable in light of all of the circumstances
surrounding such claim, action, suit or proceeding, or (ii) such settlement,
compromise or consent is entered into more than twenty business days after such
indemnifying party shall have received a request from such indemnified party for
reimbursement for the fees and expenses of counsel (in any case where such fees
and expenses are at the expense of such indemnifying party) and, prior to the
date of such settlement, compromise or consent, such indemnifying party shall
have failed to comply with such reimbursement request. If a MIIX Entity does
withhold its consent to a proposed settlement, compromise or consent to the
entry of a judgment, then the MIIX Entities will indemnify the Underwriter
Indemnities in accordance with clause (i) of paragraph (a) of this Section 8 and
clause (ii) of paragraph (a) of this Section 8, or if such indemnity is
unavailable for any reason, contribute in accordance with paragraph (d) of this
Section 8.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the MIIX Entities, jointly and severally, and
the Underwriters severally agree to contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) (collectively "Losses") to
which the MIIX Entities and one or more of the Underwriters may be subject in
such proportion as is appropriate to reflect the relative benefits received by
the MIIX Entities on the one hand and by the Underwriters on the other from the
offering of the Securities; provided, however, that in no case shall any
Underwriter (except as may be provided in any agreement among underwriters
relating to the offering of the Securities) be responsible for any amount in
excess of the underwriting discount or commission applicable to the Securities
purchased by such Underwriter hereunder. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the MIIX Entities,
jointly and severally, and the Underwriters severally shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the MIIX Entities, jointly and severally, on the one hand
and of the Underwriters on the other in connection with the statements or
omissions which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the MIIX Entities shall be deemed to be
equal to the total net proceeds from the offering (before deducting expenses)
received by the Company, and benefits received by the Underwriters shall be
deemed to be equal to the total underwriting discounts and commissions, in each
case as set forth on the cover page of the Prospectus. Relative fault shall be
determined by reference to, among other things, whether any untrue or any
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information provided by any MIIX Entity on
the one hand or the Underwriters on the other, the intent of the parties and
their relative knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The MIIX Entities and the
Underwriters agree that it would not be just and equitable if contribution were
determined by pro rata allocation or any other method of allocation which does
not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), 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. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls a
MIIX Entity within the meaning of either
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36
the Act or the Exchange Act, each officer of a MIIX Entity who shall have signed
the Registration Statement, if any, and each director of a MIIX Entity shall
have the same rights to contribution as such MIIX Entity, subject in each case
to the applicable terms and conditions of this paragraph (d).
9. Default by an Underwriter. If any one or more Underwriters
shall fail to purchase and pay for any of the Securities agreed to be purchased
by such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the respective proportions which the amount of Securities set
forth opposite their names in Schedule I hereto bears to the aggregate amount of
Securities set forth opposite the names of all the remaining Underwriters) the
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase; provided, however, that in the event that the aggregate amount of
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase shall exceed 10% of the aggregate amount of Securities set forth in
Schedule I hereto, the remaining Underwriters shall have the right to purchase
all, but shall not be under any obligation to purchase any, of the Securities,
and if such nondefaulting Underwriters do not purchase all the Securities, this
Agreement will terminate without liability to any nondefaulting Underwriter or
to any MIIX Entity. In the event of a default by any Underwriter as set forth in
this Section 9, the Closing Date shall be postponed for such period, not
exceeding five Business Days, as the Representatives shall determine in order
that the required changes in the Registration Statement and the Prospectus or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Underwriter of its liability, if any, to
the MIIX Entities and any nondefaulting Underwriter for damages occasioned by
its default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if at any
time prior to such time (i) trading in the Common Stock shall have been
suspended by the Commission or the New York Stock Exchange or trading in
securities generally on the New York Stock Exchange shall have been suspended or
limited or minimum prices shall have been established on such Exchange, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war, or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the sole judgment of the Representatives, impractical or inadvisable
to proceed with the offering or delivery of the Securities as contemplated by
the Prospectus (exclusive of any supplement thereto).
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
MIIX Entities or their respective officers and of the Underwriters set forth in
or made pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any Underwriter or the
MIIX Entities or any of the officers, directors or controlling persons referred
to in Section 8 hereof, and will survive delivery of and payment for the
Securities. The provisions of Sections 7 and 8 hereof shall survive the
termination or cancellation of this Agreement.
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12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telefaxed to the First Union Capital Markets Corp. General
Counsel (fax no.: (000) 000-0000) and confirmed at First Union Capital Markets
Corp., 000 Xxxxx Xxxxxxx Xxxxxx, XX-00, Xxxxxxxxx, XX 00000-0000, Attention:
General Counsel; or, if sent to any MIIX Entity, will be mailed, delivered or
telefaxed to General Counsel ((000) 000-0000) and confirmed to it at The MIIX
Group, Incorporated, Xxx Xxxxxxxx Xxxx, Xxxxxxxxxxxxx, XX 00000, Attention:
General Counsel.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York applicable to
contracts made and to be performed within the State of New York.
15. Counterparts. This Agreement may be signed in two or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. Headings. The section headings used herein are for
convenience only and shall not affect the construction hereof.
17. Definitions. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
(a) "Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations of the Commission promulgated thereunder.
(b) "Business Day" shall mean any day other than a Saturday, a
Sunday or a legal holiday or a day on which banking institutions or
trust companies are authorized or obligated by law to close in The
City of New York.
(c) "Commission" shall mean the Securities and Exchange
Commission.
(d) "Distribution Effective Date" shall mean each date and time
that the Distribution Registration Statement, any post-effective
amendment or amendments thereto and any Rule 462(b) Distribution
Registration Statement became or become effective.
(e) "Distribution Prospectus" shall mean the form of final
prospectus relating to the Reorganization Shares included in the
Distribution Registration Statement at the Distribution Effective
Date.
(f) "Distribution Registration Statement" shall mean the
registration statement referred to in paragraph (a) of Section 1
hereof, including exhibits and financial statements, as amended on the
Special Meeting Date and, in the event any post-effective
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38
amendment thereto or any rule 462(b) Distribution Registration
Statement becomes effective prior to the Closing Date, shall also mean
such registration statement as so amended or such Rule 462(b)
Distribution Registration Statement, as the case may be. Such term
shall include any Rule 430A Information deemed to be included therein
at the Distribution Effective Date as provided by Rule 430A.
(g) "Effective Date" shall mean each date and time that the
Registration Statement, any post-effective amendment or amendments
thereto and any Rule 462(b) Registration Statement became or become
effective.
(h) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations of the Commission
promulgated thereunder.
(i) "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto.
(j) "Preliminary Prospectus" shall mean any preliminary
prospectus referred to in paragraph (c) of Section 1 hereof and any
preliminary prospectus included in the Registration Statement at the
Effective Date that omits Rule 430A Information.
(k) "Prospectus" shall mean the prospectus relating to the
Securities that is first filed pursuant to Rule 424(b) after the
Execution Time or, if no filing pursuant to Rule 424(b) is required,
shall mean the form of final prospectus relating to the Securities
included in the Registration Statement at the Effective Date.
(l) "Registration Statement" shall mean the registration
statement referred to in paragraph (c) of Section 1 hereof, including
exhibits and financial statements, as amended at the Execution Time
(or, if not effective at the Execution Time, in the form in which it
shall become effective) and, in the event any post-effective amendment
thereto or any Rule 462(b) Registration Statement becomes effective
prior to the Closing Date, shall also mean such registration statement
as so amended or such Rule 462(b) Registration Statement, as the case
may be. Such term shall include any Rule 430A Information deemed to be
included therein at the Effective Date as provided by Rule 430A.
(m) "Rule 424", "Rule 430A" and "Rule 462" refer to such rules
under the Act.
(n) "Rule 430A Information" shall mean (i) in the case of the
Registration Statement, information with respect to the Securities and
the offering thereof permitted to be omitted from the Registration
Statement when it becomes effective pursuant to Rule 430A and (ii) in
the case of the Distribution Registration Statement, information with
respect to the Reorganization Shares and the offering thereof
permitted to be omitted from the Distribution Registration Statement
when it becomes effective pursuant to Rule 430A.
(o) "Rule 462(b) Distribution Registration Statement" shall mean
a registration statement and any amendments thereto filed pursuant to
Rule 462(b) relating
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to the offering covered by the registration statement referred to in
paragraph (a) of Section 1 hereof.
(p) "Rule 462(b) Registration Statement" shall mean a
registration statement and any amendments thereto filed pursuant to
Rule 462(b) relating to the offering covered by the registration
statement referred to in paragraph (c) Section 1 hereof.
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If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among the Company and the several Underwriters.
Very truly yours,
The MIIX Group, Incorporated
By:____________________________________________
Name:
Title:
Medical Inter-Insurance Exchange of
New Jersey
By and through its Attorney-in-Fact,
New Jersey State Medical
Underwriters, Inc.
By:____________________________________________
Name:
Title:
MIIX Insurance Company
By:____________________________________________
Name:
Title:
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The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
First Union Capital Markets Corp.
Friedman, Billings, Xxxxxx & Co., Inc.
Xxxxxx & Xxxxxx Incorporated
By: First Union Capital Markets Corp.
By:____________________________
Name:
Title:
For themselves and the other several
Underwriters named in Schedule I to the
foregoing Agreement.
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SCHEDULE I
NUMBER OF UNDERWRITTEN SECURITIES
UNDERWRITERS TO BE PURCHASED
------------ ---------------
First Union Capital Markets Corp. ............................................
Friedman, Billings, Xxxxxx & Co., Inc. .......................................
Xxxxxx & Xxxxxx
Incorporated...................................................................
Total....................................................... -----------------
=================
43
[FORM OF LOCK-UP AGREEMENT] EXHIBIT A
[LETTERHEAD OF OFFICER, DIRECTOR OR MAJOR SHAREHOLDER OF
CORPORATION]
The MIIX Group, Incorporated
Public Offering of Common Stock
, 1999
First Union Capital Markets Corp.
Friedman, Billings, Xxxxxx & Co., Inc.
Xxxxxx & Xxxxxx Incorporated
As Representatives of the several Underwriters,
c/o First Union Capital Markets Corp.
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
Ladies and Gentlemen:
This letter is being delivered to you in connection with the
proposed Underwriting Agreement (the "Underwriting Agreement"), relating to an
underwritten public offering of Common Stock, $.01 par value (the "Common
Stock"), of The MIIX Group, Incorporated, a corporation organized under the laws
of Delaware ("The MIIX Group").
In order to induce you and the other Underwriters to enter
into the Underwriting Agreement, the undersigned will not, without the prior
written consent of First Union Capital Markets Corp., offer, sell, contract to
sell, pledge or otherwise dispose of, or file (or participate in the filing of)
a registration statement with the Securities and Exchange Commission in respect
of, or establish or increase a put equivalent position or liquidate or decrease
a call equivalent position within the meaning of Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Securities and Exchange Commission promulgated thereunder with respect to, any
shares of capital stock of The MIIX Group or any securities convertible into or
exercisable or exchangeable for such capital stock, or publicly announce an
intention to effect any such transaction, for a period of 180 days after the
date of this Agreement, other than (1) shares of Common Stock disposed of as
bona fide gifts approved by First Union Capital Markets Corp. and (2) shares of
Common Stock or securities convertible into or exchangeable or exercisable for
Common Stock transferred to (A) an immediate family member of the undersigned or
(B) a trust for the benefit of the undersigned or an immediate family member of
the undersigned, provided, in each case, that such transferee agrees in writing
to be bound by the terms of this letter agreement as if a signatory hereto.
44
If for any reason the Underwriting Agreement shall be
terminated prior to the Closing Date (as defined in the Underwriting Agreement),
the agreement set forth above shall likewise be terminated.
This letter agreement shall terminate and be of no further
force and effect if the closing of the initial public offering of The MIIX Group
has not occurred by October 1, 1999.
Yours very truly,
[SIGNATURE OF OFFICER, DIRECTOR OR MAJOR STOCKHOLDER]
[NAME AND ADDRESS OF OFFICER, DIRECTOR OR MAJOR STOCKHOLDER]
45
ANNEX A
SUBSIDIARIES OF THE EXCHANGE AND THE ATTORNEY-IN-FACT
Subsidiaries of the Exchange
Lawrenceville Holdings, Inc.
Lawrenceville Property & Casualty Co., Inc.
MIIX Insurance Company
MIIX Insurance Company of New York
The MIIX Group, Incorporated
Subsidiaries of the Attorney-in-Fact
CDC Associate, Inc. d/b/a MIIX Capital Management
Xxxxxxxx National Leasing Corporation
Healthcare Reinsurance Services, Inc.
Lawrenceville Re, Ltd.
Medical Brokers, Inc.
Medical Group Management, Inc.
MIIX Healthcare Analytics, Inc.
MIIX Healthcare Group, Inc.
Pegasus Advisors, Inc.
Physicians Resource Center, Inc.
