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EXHIBIT 10.1
Execution Copy
The MIIX Group, Incorporated
3,000,000 Shares(a)
Common Stock
($.01 par value)
Underwriting Agreement
New York, New York
July 29, 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, 3,000,000 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 450,000
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
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(a) Plus an option to purchase from the Company, up to 450,000 additional
shares of Common Stock to cover over-allotments.
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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 to Distributees (as defined in the Plan),
(ii) the Company will purchase (the "Purchase") for $100,000 in cash and 814,815
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 August 3,
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.
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(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 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
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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 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
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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 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
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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 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
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required vote of the Exchange's Board of Governors; the Plan and the
transactions contemplated therein (including, without limitation, the
Distribution, the Purchase and 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.
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(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 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,
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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 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
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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 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
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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 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
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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 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
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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, 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.
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(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 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 $12.555 per
share, the amount of the Underwritten Securities set forth opposite such
Underwriter's name in Schedule I hereto.
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(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
450,000 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 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 August 4 , 1999, 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.
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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 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.
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(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.
(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; provided,
further, that this paragraph (f) shall not apply to an aggregate of 50,000
shares of Common Stock offered or sold to employees by the Company
pursuant to the Company's 401(k) Plan.
(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
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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 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,
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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 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
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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 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);
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(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 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
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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 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
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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;
(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
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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 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
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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;
(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
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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 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;
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27
(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
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
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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 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
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(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:
(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
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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 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.
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(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).
(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
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32
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 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
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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 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
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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.
(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
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35
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 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
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36
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 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.
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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.
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.
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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 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.
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(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 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: /s/ Xxxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: President and Chief Executive Officer
Medical Inter-Insurance Exchange of New Jersey
By and through its Attorney-in-Fact,
New Jersey State Medical
Underwriters, Inc.
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: President and Chief Executive Officer
MIIX Insurance Company
By: /s/ Xxxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Chairman and Chief Executive Officer
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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:/s/ Xxxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Director
For themselves and the other
several Underwriters named in
Schedule I to the foregoing
Agreement.
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SCHEDULE I
NUMBER OF UNDERWRITTEN
UNDERWRITERS SECURITIES TO BE PURCHASED
------------ --------------------------
First Union Capital Markets Corp. .................... 1,650,000
Friedman, Billings, Xxxxxx & Co., Inc. ............... 1,050,000
Xxxxxx & Xxxxxx Incorporated.......................... 300,000
---------
Total..................................... 3,000,000
=========
