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Exhibit 1
3,500,000 Shares
PENN-AMERICA GROUP, INC.
Common Stock
UNDERWRITING AGREEMENT
July , 1997
XXXXXXXXX, XXXXXX & XXXXXXXX
SECURITIES CORPORATION
CONNING & COMPANY
As representatives of the
several underwriters
named in Schedule I hereto
c/x Xxxxxxxxx, Lufkin & Xxxxxxxx
Securities Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs:
Penn-America Group, Inc. a Pennsylvania corporation (the "COMPANY"),
proposes to issue and sell to the several underwriters named in Schedule I
hereto (the "UNDERWRITERS"), and Penn Independent Corporation, a Pennsylvania
corporation, (the"SELLING STOCKHOLDER") proposes to sell to the several
Underwriters, an aggregate of 3,500,000 shares of the Common Stock, per value
$0.01 per share of the Company (the "FIRM SHARES"), of which 2,500,000 shares
are to be issued and sold by the Company and 1,000,000 shares are to be sold by
the Selling Stockholder. The Company also proposes to issue and sell to the
several Underwriters not more than 525,000 additional shares of its Common
Stock, per value $0.01 per share (the "ADDITIONAL SHARES") if requested by the
Underwriters as provided in Section 2 hereof. The Firm Shares and the
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Additional Shares are hereinafter referred to collectively as the "SHARES". The
shares of common stock of the Company to be outstanding after giving effect to
the sales contemplated hereby are hereinafter referred to as the "COMMON STOCK".
The Company and the Selling Stockholder are hereinafter sometimes collectively
referred to as the "SELLERS."
SECTION 1. Registration Statement and Prospectus. The Company has
prepared and filed with the Securities and Exchange Commission (the
"COMMISSION") in accordance with the provisions of the Securities Act of 1933,
as amended, and the rules and regulations of the Commission thereunder
(collectively, the "ACT"), a registration statement on Form S-1, including a
prospectus, relating to the Shares. The registration statement, as amended at
the time it became effective, including the information (if any) deemed to be
part of the registration statement at the time of effectiveness pursuant to Rule
430A under the Act, is hereinafter referred to as the "REGISTRATION STATEMENT";
and the prospectus in the form first used to confirm sales of Shares is
hereinafter referred to as the "PROSPECTUS." If the Company has filed or is
required pursuant to the terms hereof to file a registration statement pursuant
to Rule 462(b) under the Act registering additional shares of Common Stock (a
"RULE 462(B) REGISTRATION STATEMENT"), then, unless otherwise specified, any
reference herein to the term "Registration Statement" shall be deemed to include
such Rule 462(b) Registration Statement.
SECTION 2. Agreements to Sell and Purchase and Lock-Up Agreements. On
the basis of the representations and warranties contained in this Agreement, and
subject to its terms and conditions, (i) the Company agrees to issue and sell
2,500,000 Firm Shares, (ii) the Selling Stockholder agrees to sell 1,000,000
Firm Shares , and (iii) each Underwriter agrees, severally and not jointly, to
purchase from each Seller at a price per Share of $______ (the "PURCHASE PRICE")
the number of Firm Shares (subject to such adjustments to eliminate fractional
shares as you may determine) that bears the same proportion to the total number
of Firm Shares to be sold by such Seller as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedules I hereto bears to the total
number of Firm Shares.
On the basis of the representations and warranties contained in this
Agreement, and subject to its terms and conditions, the Company agrees to issue
and sell the Additional Shares and the Underwriters shall have the right to
purchase, severally and not jointly, up to 525,000 Additional Shares from the
Company at the Purchase Price. Additional Shares may be purchased solely for the
purpose of covering over-allotments made in connection with the offering of the
Firm Shares. The Underwriters may exercise their right to purchase Additional
Shares in whole or in part from time to time by giving written notice
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thereof to the Company within 30 days after the date of this Agreement. You
shall give any such notice on behalf of the Underwriters and such notice shall
specify the aggregate number of Additional Shares to be purchased pursuant to
such exercise and the date for payment and delivery thereof, which date shall be
a business day (i) no earlier than two business days after such notice has been
given (and, in any event, no earlier than the Closing Date (as hereinafter
defined)), and (ii) no later than ten business days after such notice has been
given. If any Additional Shares are to be purchased, each Underwriter, severally
and not jointly, agrees to purchase from the Company the number of Additional
Shares (subject to such adjustments to eliminate fractional shares as you may
determine) which bears the same proportion to the total number of Additional
Shares to be purchased from the Company as the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I bears to the total number of
Firm Shares.
Each Seller hereby agrees not to (i) offer, pledge, sell, contract to
sell, sell any option or contract to purchase, purchase any option or contract
to sell, grant any option, right or warrant to purchase, or otherwise transfer
or dispose of, directly or indirectly, any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock or
(ii) enter into any swap or other arrangement that transfers all or a portion of
the economic consequences associated with the ownership of any Common Stock
(regardless of whether any of the transactions described in clause (i) or (ii)
is to be settled by the delivery of Common Stock, or such other securities, in
cash or otherwise), except to the Underwriters pursuant to this Agreement, for a
period of 180 days after the date of the Prospectus without the prior written
consent of Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. Notwithstanding
the foregoing, during such period (i) the Company may grant stock options
pursuant to the Company's existing stock option plans and (ii) the Company may
issue shares of Common Stock upon the exercise of an option outstanding on the
date hereof. The Company also agrees not to file any registration statement with
respect to any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock for a period of 180 days after the
date of the Prospectus without the prior written consent of Xxxxxxxxx, Xxxxxx &
Xxxxxxxx Securities Corporation. In addition, the Selling Stockholder agrees
that, for a period of 180 days after the date of the Prospectus without the
prior written consent of Xxxxxxxxx, Lufkin & Xxxxxxxx Securities Corporation, it
will not make any demand for, or exercise any right with respect to, the
registration of any shares of Common Stock or any securities convertible into or
exercisable or exchangeable for Common Stock. The Company shall, prior to or
concurrently with the execution of this Agreement, deliver an agreement executed
by (i) the Selling Stockholder, (ii) each of the directors and officers of the
Company and (iii) each stockholder listed on Annex I hereto to the effect that
such person will not, during the period commencing on the date such person signs
such agreement and ending 180 days after the date of the
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Prospectus, without the prior written consent of Xxxxxxxxx, Lufkin & Xxxxxxxx
Corporation, (A) engage in any of the transactions described in the first
sentence of this paragraph or (B) make any demand for, or exercise any right
with respect to, the registration of any shares of Common Stock or any
securities convertible into or exercisable or exchangeable for Common Stock.
SECTION 3. Terms of Public Offering. The Sellers are advised by you
that the Underwriters propose (i) to make a public offering of their respective
portions of the Shares as soon after the execution and delivery of this
Agreement as in your judgment is advisable, and (ii) initially to offer the
Shares upon the terms set forth in the Prospectus.
SECTION 4. Delivery and Payment. Delivery to the Underwriters of and
payment for the Firm Shares shall be made at 9:00 A.M., New York City time, on
July , 1997 (the "CLOSING DATE") at such place as you shall designate. The
Closing Date and the location of delivery of and payment for the Firm Shares may
be varied by agreement between you and the Company.
Delivery to the Underwriters of and payment for any Additional Shares
to be purchased by the Underwriters shall be made at such place as you shall
designate at 9:00 A.M., New York City time, on the date specified in the
applicable exercise notice given by you pursuant to Section 2 (an "OPTION
CLOSING DATE"). Any such Option Closing Date and the location of delivery of and
payment for such Additional Shares may be varied by agreement between you and
the Company.
Certificates for the Shares shall be registered in such names and
issued in such denominations as you shall request in writing not later than two
full business days prior to the Closing Date or an Option Closing Date, as the
case may be. Such certificates shall be made available to you for inspection not
later than 9:30 A.M., New York City time, on the business day prior to the
Closing Date or the applicable Option Closing Date, as the case may be.
Certificates in definitive form evidencing the Shares shall be delivered to you
on the Closing Date or the applicable Option Closing Date, as the case may be,
with any transfer taxes thereon duly paid by the respective Sellers, for the
respective accounts of the several Underwriters, against payment to the Sellers
of the Purchase Price therefor by wire transfer of Federal or other funds
immediately available in New York City.
SECTION 5. Agreements of the Company and the Selling Stockholder. The
Company and the Selling Stockholder agree with you:
(a) To advise you promptly and, if requested by you, to confirm such
advice in writing, (i) of any request by the Commission for amendments to the
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Registration Statement or amendments or supplements to the Prospectus or for
additional information, (ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or of the suspension
of qualification of the Shares for offering or sale in any jurisdiction, or the
initiation of any proceeding for such purposes, (iii) when any amendment to the
Registration Statement becomes effective, (iv) if the Company is required to
file a Rule 462(b) Registration Statement after the effectiveness of this
Agreement, when the Rule 462(b) Registration Statement has become effective and
(v) of the happening of any event during the period referred to in Section 5(d)
below which makes any statement of a material fact made in the Registration
Statement or the Prospectus untrue or which requires any additions to or changes
in the Registration Statement or the Prospectus in order to make the statements
therein not misleading. If at any time the Commission shall issue any stop order
suspending the effectiveness of the Registration Statement, the Company will use
its best efforts to obtain the withdrawal or lifting of such order at the
earliest possible time.
(b) To furnish you, without charge, three signed copies of the
Registration Statement as first filed with the Commission and of each amendment
to it, including all exhibits, and to furnish to you and each Underwriter
designated by you such number of conformed copies of the Registration Statement
as so filed and of each amendment to it, without exhibits, as you may reasonably
request.
(c) To prepare the Prospectus in a form approved by you and to file the
Prospectus in such form with the Commission within the applicable period
specified in Rule 424(b) under the Act; not to file any further amendment to the
Registration Statement and not to make any amendment or supplement to the
Prospectus of which you shall not previously have been advised or to which you
shall reasonably object after being so advised; and to prepare and file with the
Commission, promptly upon your reasonable request, any amendment to the
Registration Statement or amendment or supplement to the Prospectus which may be
necessary or advisable in connection with the distribution of the Shares by you,
and to use its best efforts to cause any such amendment to the Registration
Statement to become promptly effective.
(d) Prior to 10:00 A.M., New York City time, on the first business day
after the date of this Agreement and from time to time thereafter for such
period as in the opinion of counsel for the Underwriters a prospectus is
required by law to be delivered in connection with sales by an Underwriter or a
dealer, to furnish in New York City to each Underwriter and any dealer as many
copies of the Prospectus (and of any amendment or supplement to the Prospectus)
as such Underwriter or dealer may reasonably request.
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(e) If during the period specified in Section 5(d), any event shall
occur or condition shall exist as a result of which, in the opinion of counsel
for the Underwriters, it becomes necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the circumstances when
the Prospectus is delivered to a purchaser, not misleading, or if, in the
opinion of counsel for the Underwriters, it is necessary to amend or supplement
the Prospectus to comply with applicable law, forthwith to prepare and file with
the Commission an appropriate amendment or supplement to the Prospectus so that
the statements in the Prospectus, as so amended or supplemented, will not in the
light of the circumstances when it is so delivered, be misleading, or so that
the Prospectus will comply with law, and to furnish to each Underwriter and to
such dealers as you shall specify, such number of copies thereof as such
Underwriter or dealers may reasonably request.
(f) Prior to any public offering of the Shares, to cooperate with you
and counsel for the Underwriters in connection with the registration or
qualification of the Shares for offer and sale by the several Underwriters and
by dealers under the state securities or Blue Sky laws of such jurisdictions as
you may request, to continue such qualification in effect so long as required
for distribution of the Shares and to file such consents to service of process
or other documents as may be necessary in order to effect such registration or
qualification.
(g) To mail and make generally available to its stockholders as soon as
practicable an earnings statement covering the twelve-month period ending
September 30, 1998 that shall satisfy the provisions of Section 11(a) of the
Act, and to advise you in writing when such statement has been so made
available.
(h) During the period of three years after the date of this Agreement,
to furnish to you as soon as available copies of all reports or other
communications furnished to the record holders of Common Stock or furnished to
or filed with the Commission or any national securities exchange on which any
class of securities of the Company is listed and such other publicly available
information concerning the Company and its subsidiaries as you may reasonably
request.
(i) Whether or not the transactions contemplated in this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
expenses incident to the performance of the Sellers' obligations under this
Agreement, including: (i) the fees, disbursements and expenses of the Company's
counsel, the Company's accountants and the Selling Stockholder's counsel (in
addition to the Company's counsel) in connection with the registration and
delivery of the Shares under the Act and all other fees or expenses in
connection with the preparation, printing, filing and distribution of the
Registration Statement (including financial statements and exhibits), any
preliminary prospectus, the
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Prospectus and all amendments and supplements to any of the foregoing prior to
or during the period specified in Section 5(d), including the mailing and
delivering of copies thereof to the Underwriters and dealers in the quantities
specified herein, (ii) all costs and expenses related to the transfer and
delivery of the Shares to the Underwriters, including any transfer or other
taxes payable thereon, (iii) all costs of printing or producing this Agreement
and any other agreements or documents in connection with the offering, purchase,
sale or delivery of the Shares, (iv) all expenses in connection with the
registration or qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the several states and all costs of printing or
producing any Preliminary and Supplemental Blue Sky Memoranda in connection
therewith (including the filing fees and fees and disbursements of counsel for
the Underwriters in connection with such registration or qualification and
memoranda relating thereto), (v) the filing fees and disbursements of counsel
for the Underwriters in connection with the review and clearance of the offering
of the Shares by the National Association of Securities Dealers, Inc., (vi) all
costs and expenses incident to the listing of the Shares on the Nasdaq National
Market, (vii) the cost of printing certificates representing the Shares, (viii)
the costs and charges of any transfer agent, registrar and/or depositary, and
(ix) and all other costs and expenses incident to the performance of the
obligations of the Company and the Selling Stockholder hereunder for which
provision is not otherwise made in this Section. The provisions of this Section
shall not supercede or otherwise affect any agreement that the Company and the
Selling Stockholder may otherwise have for allocation of such expenses among
themselves.
(j) To use its best efforts to list for quotation the Shares on the
Nasdaq National Market and to maintain the listing of the Shares on the Nasdaq
National Market (or the New York Stock Exchange, if applicable) for a period of
three years after the date of this Agreement.
(k) To use the proceeds from the sale of the Shares in the manner
described in the prospectus under the caption "Use of Proceeds."
(l) To use its best efforts to do and perform all things required or
necessary to be done and performed under this Agreement by the Company prior to
the Closing Date or any Option Closing Date, as the case may be, and to satisfy
all conditions precedent to the delivery of the Shares.
(m) If the Registration Statement at the time of the effectiveness of
this Agreement does not cover all of the Shares, to file a Rule 462(b)
Registration Statement with the Commission registering the Shares not so covered
in compliance with Rule 462(b) by 10:00 P.M., New York City time, on the date of
this Agreement and to pay to the Commission the filing fee for such Rule 462(b)
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Registration Statement at the time of the filing thereof or to give irrevocable
instructions for the payment of such fee pursuant to Rule 111(b) under the Act.
SECTION 6. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter that:
(a) The Registration Statement has become effective (other than any
Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement); any Rule 462(b) Registration Statement filed
after the effectiveness of this Agreement will become effective no later than
10:00 P.M., New York City time, on the date of this Agreement; and no stop order
suspending the effectiveness of the Registration Statement is in effect, and no
proceedings for such purpose are pending before or threatened by the Commission.
(b) (i) the Registration Statement (other than any Rule 462(b)
Registration Statement to be filed by the Company after the effectiveness of
this Agreement), when it became effective, did not contain and, as amended, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, (ii) the Registration Statement (other than
any Rule 462(b) Registration Statement to be filed by the Company after the
effectiveness of this Agreement) and the Prospectus comply and, as amended or
supplemented, if applicable, will comply in all material respects with the Act,
(iii) if the Company is required to file a Rule 462(b) Registration Statement
after the effectiveness of this Agreement, such Rule 462(b) Registration
Statement and any amendments thereto, when they become effective (A) will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and (B) will comply in all material respects with the Act and (iv)
the Prospectus does not contain and, as amended or supplemented, if applicable,
will not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Registration Statement or the Prospectus based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein.
(c) Each preliminary prospectus filed as part of the registration
statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the Act, complied when so filed in all material
respects with the Act, and did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances under which
they were made, not
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misleading, except that the representations and warranties set forth in this
paragraph do not apply to statements or omissions in any preliminary prospectus
based upon information relating to any Underwriter furnished to the Company in
writing by such Underwriter through you expressly for use therein.
(d) Each of the Company and its directly-held insurance company
subsidiary, Penn-America Insurance Company ("PENN-AMERICA"), has been duly
incorporated, is validly existing as a corporation in good standing under the
laws of the State of Pennsylvania and has the corporate power and authority to
carry on its business as described in the Prospectus and to own, lease and
operate its properties, and each is duly qualified and is in good standing as a
foreign corporation authorized to do business in each jurisdiction in which the
nature of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
material adverse effect on the business, prospects, financial condition, surplus
or results of operations of the Company and the Subsidiaries (as defined below),
taken as a whole (a "MATERIAL ADVERSE EFFECT").
(e) The only direct subsidiary of the Company is Penn-America. The only
direct Subsidiary of Penn-America is Penn-Star Insurance Company ("PENN-STAR"
and, collectively with Penn-America, the "SUBSIDIARIES").
(f) Penn-Star has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of Pennsylvania and has
the corporate power and authority to carry on its business as described in the
Prospectus and to own, lease and operate the properties, and except as described
in the Prospectus is duly qualified and is in good standing as a foreign
corporation authorized to do business in each jurisdiction in which the nature
of its business or its ownership or leasing of property requires such
qualification, except where the failure to be so qualified would not have a
Material Adverse Effect.
(g) Each of the Company and the Subsidiaries is duly licensed,
authorized or admitted as an insurer in each jurisdiction where it is required
to be so licensed or admitted to conduct business as described in the
Prospectus, except where the failure to be so licensed or admitted would not
have a Material Adverse Effect.
(h) Each of the Company and the Subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all insurance authorities,
commissions or other insurance regulatory bodies and all other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals, necessary to own, lease, license and use its respective properties
and assets and to conduct its respective business as described in the
Prospectus, except for where the failure to
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have such consents, authorizations, approvals, orders, certificates and permits,
or to make such declarations or filings, would not have a Material Adverse
Effect; all of such consents, authorizations, approvals, orders, licences,
certificates and permits are in full force and effect, except for where the
failure to be in full force and effect would not have a Material Adverse Effect;
except as described in the Prospectus, such consents, authorizations, approvals,
order, licences, certificates or permits contain no restrictions that are
materially burdensome to the Company or any of the Subsidiaries, and none of the
Company or the Subsidiaries has received any notification from any insurance
authority, commission or other insurance regulatory body or agency or any other
governmental authority or self-regulatory organization in the United States or
elsewhere to the effect that any additional consent, authorization, approval,
order, license, certificate or permit from such authority, commission, body or
organization is needed to be obtained by any of the Company or the Subsidiaries,
or that such authority, commission, body or organization is considering
limiting, suspending or revoking any such consent, authorization, approval,
order, license, certificate or permit.
(i) Each of the Company or the Subsidiaries is in compliance with the
insurance laws and regulations of other jurisdictions which are applicable to
the Company or the Subsidiaries, as the case may be, except where the failure to
comply would not have a Material Adverse Effect; and none of the Company or the
Subsidiaries has received any notification from any insurance authority,
commission or other insurance regulatory body or agency in the United States or
elsewhere to the effect that the Company or the Subsidiaries is not in
compliance with an insurance law or regulation;
(j) There are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or liens granted or issued by
the Company or any of the Subsidiaries relating to or entitling any person to
purchase or otherwise to acquire any shares of the capital stock of the Company
or any of the Subsidiaries, except as otherwise disclosed in the Registration
Statement.
(k) All the outstanding shares of capital stock of the Company
(including the Shares to be sold by the Selling Stockholder) have been duly
authorized and validly issued and are fully paid, non-assessable and not subject
to any preemptive or similar rights; and the Shares to be issued and sold by the
Company have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor as provided by this Agreement, will be
validly issued, fully paid and non-assessable, and the issuance of such Shares
will not be subject to any preemptive or similar rights.
(l) All of the outstanding shares of capital stock of the Subsidiaries
have been duly authorized and validly issued and are fully paid and
non-assessable, and
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are owned directly, in the case of Penn-America, and indirectly, in the case of
Penn-Star, by the Company, free and clear of any security interest, claim, lien,
encumbrance or adverse interest of any nature except, with respect to the stock
of Penn-America, for the lien of PNC Bank, as Agent (the "AGENT"), pursuant to
the Stock Pledge Agreement (the "STOCK PLEDGE AGREEMENT") dated as of December
20, 1995 between the Company and the Agent entered into in connection with that
certain Credit Agreement (the "CREDIT AGREEMENT") dated as of December 20, 1995
among the Company, the Banks signatory thereto and the Agent.
(m) The authorized capital stock of the Company conforms as to legal
matters to the description thereof contained in the Prospectus.
(n) Neither the Company nor any of the Subsidiaries is in violation of
its respective charter or by-laws or in default in the performance of any
obligation, agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is material to
the Company and the Subsidiaries, taken as a whole, to which the Company or any
of the Subsidiaries is a party or by which the Company or any of the
Subsidiaries or their respective property is bound.
(o) The execution, delivery and performance of this Agreement by the
Company, compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require any
consent, approval, authorization or other order of, or qualification with, any
court or governmental body or agency including, without limitation, any
insurance regulatory body or agency (except such as may be required under the
securities or Blue Sky laws of the various states and the approval of the
Commissioner of the Pennsylvania Insurance Department), and will not conflict
with or constitute a breach of any of the terms or provisions of, or a default
under, the charter or by-laws of the Company or any of the Subsidiaries or any
indenture, loan agreement, mortgage, lease or other agreement or instrument that
is material to the Company and the Subsidiaries, taken as a whole, to which the
Company or any of the Subsidiaries is a party or by which the Company or any of
the Subsidiaries or their respective property is bound, or violate or conflict
with any applicable law or any rule, regulation, judgment, order or decree of
any court or any governmental body or agency including, without limitation, any
insurance regulatory body or agency having jurisdiction over the Company, any of
the Subsidiaries or their respective property.
(p) Except as otherwise disclosed in the Prospectus, there are no legal
or governmental proceedings pending or threatened to which the Company or any of
the Subsidiaries is or could be a party or to which any of their respective
property is or could be subject that are required to be described in the
Registration
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Statement or the Prospectus and are not so described; nor are there any
statutes, regulations, contracts or other documents that are required to be
described in the Registration Statement or the Prospectus or to be filed as
exhibits to the Registration Statement that are not so described or filed as
required.
(q) Neither the Company nor any of the Subsidiaries has violated any
foreign, federal, state or local law or regulation relating to the protection of
human health and safety, the environment or hazardous or toxic substances or
wastes, pollutants or contaminants ("ENVIRONMENTAL LAWS") or any provisions of
the Employee Retirement Income Security Act of 1974, as amended, or the rules
and regulations promulgated thereunder, except for such violations which, singly
or in the aggregate, would not have a Material Adverse Effect.
(r) Each of the Company and the Subsidiaries has such permits,
licenses, consents, exemptions, franchises, authorizations and other approvals
("permits") of, and has made all filings with and notices to, all governmental
or regulatory authorities and self-regulatory organizations and all courts and
other tribunals, including, without limitation, under any applicable
Environmental Laws, as are necessary to own, lease, license and operate its
respective properties and to conduct its business except where the failure to
have any such permit or to make any such filing or notice would not, singly or
in the aggregate, have a Material Adverse Effect. Each such permit is valid and
in full force and effect and each of the Company and its Subsidiaries is in
compliance with all the terms and conditions thereof and with the rules and
regulations of the authorities and governing bodies having jurisdiction with
respect thereto; and no event has occurred (including, without limitation, the
receipt of any notice from any authority or governing body) which allows or,
after notice or lapse of time or both, would allow, revocation, suspension or
termination of any such permits or results in or, after notice or lapse of time
or both, would result in any other impairment of the rights of the holder of any
such permit; and such permits contain no restrictions that are burdensome to the
Company or any of the Subsidiaries; except where such failure to be valid and in
full force and effect or to be in compliance, the occurrence of any such event
or the presence of any such restriction would not, singly or in the aggregate,
have a Material Adverse Effect.
(s) There are no costs or liabilities associated with Environmental
Laws (including, without limitation, any capital or operating expenditures
required for clean-up, closure of properties or compliance with Environmental
Laws or any permit, license or approval, any related constraints on operating
activities and any potential liabilities to third parties) which would, singly
or in the aggregate, have a Material Adverse Effect.
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(t) This Agreement has been duly authorized, executed and delivered by
the Company.
(u) KPMG Peat Marwick are independent public accountants with respect
to the Company and the Subsidiaries as required by the Act.
(v) The consolidated financial statements, together with related
schedules and notes forming part of the Registration Statement and the
Prospectus (and any amendment or supplement thereto), present fairly the
consolidated financial position, results of operations and changes in financial
position of the Company and the Subsidiaries on the basis stated in the
Registration Statement at the respective dates or for the respective periods to
which they apply; such statements and related schedules and notes have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as disclosed
therein; and the other financial and statistical information and data set forth
in the Registration Statement and the Prospectus (and any amendment or
supplement thereto) is, in all material respects, accurately presented and
prepared on a basis consistent with such financial statements and the books and
records of the Company.
(w) The statutory financial statements of Penn-America and Penn-Star
required or permitted to be prepared in accordance with the insurance laws of
any of the states in which such subsidiaries operate and the rules and
regulations of the applicable insurance regulatory agency or department of such
states, from which certain ratios and other statistical data contained in the
Registration Statement and the Prospectus have been derived, have for each
relevant period been prepared in conformity with the requirements and present
fairly the information purported to be shown.
(x) The Company is not and, after giving effect to the offering and
sale of the Shares and the application of the proceeds thereof as described in
the Prospectus, will not be, an "investment company" as such term is defined in
the Investment Company Act of 1940, as amended.
(y) There are no contracts, agreements or understandings between the
Company and any person granting such person the right to require the Company to
file a registration statement under the Act with respect to any securities of
the Company or to require the Company to include such securities with the Shares
registered pursuant to the Registration Statement.
(z) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there has not
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occurred any material adverse change or any development involving a prospective
material adverse change in the condition, financial or otherwise, or the
earnings, surplus, business, management or operations of the Company and the
Subsidiaries, taken as a whole, (ii) there has not been any material adverse
change or any development involving a prospective material adverse change in the
capital stock or in the long-term debt of the Company or any of the Subsidiaries
, and (iii) neither the Company nor any of the Subsidiaries has incurred any
material liability or obligation, direct or contingent.
(aa) The Company has complied with all provisions of Section 517.075,
Florida Statutes (Chapter 92-198, Laws of Florida).
(bb) All tax returns required to be filed by the Company or any of the
Subsidiaries in any jurisdiction have been filed, other than those filings being
contested in good faith, and all material taxes, including withholding taxes,
penalties and interest, assessments, fees and other charges due or claimed to be
due from such entities have been paid, other than those being contested in good
faith and for which adequate reserves have been provided or those currently
payable without penalty or interest.
(cc) All reinsurance treaties and arrangements to which the Company or
any of the Subsidiaries is a party are in full force and effect and neither the
Company nor any of the Subsidiaries is in violation of, or in default in the
performance, observance or fulfillment of, any obligation, agreement, covenant
or condition contained therein, except where any such violation or default would
not have a Material Adverse Effect; neither the Company nor any of the
Subsidiaries has received any notice from any of the other parties to such
treaties, contracts or agreements that such other party intends not to perform
in any material respect such treaty, contract or agreement, and the Company and
the Subsidiaries have no reason to believe that any of the other parties to such
treaties or arrangements will be unable to perform such treaty or arrangement,
except where any such non-performance would not have a Material Adverse Effect.
(dd) Except as otherwise set forth in the Prospectus or such as are not
material to the business, prospects, financial condition or results of operation
of the Company and the Subsidiaries, taken as a whole, the Company and each of
the Subsidiaries has good and marketable title, free and clear of all liens,
claims, encumbrances and restrictions except liens for taxes not yet due and
payable, to all property and assets described in the Registration Statement as
being owned by it. All leases to which the Company or any of the Subsidiaries is
a party are valid and binding and no default has occurred or is continuing
thereunder, which might result in any material adverse change in the business,
prospects, financial condition or results of operation of the Company and the
Subsidiaries taken as a whole, and the
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Company and the Subsidiaries enjoy peaceful and undisturbed possession under all
such leases to which any of them is a party as lessee with such exceptions as do
not materially interfere with the use made by the Company or such Subsidiary.
(ee) Except as disclosed in the Registration Statement, no insurance
regulatory agency or body has issued any order or decree impairing, restricting
or prohibiting a payment of dividends by any of the Subsidiaries or the
continuation of the business of any of the Subsidiaries as presently conducted.
(ff) No relationship, direct or indirect, exists between or among the
Company or any of the Subsidiaries on the one hand, and the directors, officers,
stockholders, customers or suppliers of the Company or any of the Subsidiaries
on the other hand, which is required by the Act to be described in the
Registration Statement or the Prospectus which is not so described.
(gg) The Company and the Subsidiaries own or possess, or can acquire on
reasonable terms, all patents, patent rights, licenses, inventions, copyrights,
know-how (including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures), trademarks,
service marks and trade names ("intellectual property") currently employed by
them in connection with the business now operated by them except where the
failure to own or possess or otherwise be able to acquire such intellectual
property would not, singly or in the aggregate, have a Material Adverse Effect
and neither the Company nor any of the Subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to any
of such intellectual property which, singly or in the aggregate, if the subject
of an unfavorable decision, ruling or finding, would have a Material Adverse
Effect.
(hh) The Company and each of the Subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; and neither the Company nor any of the Subsidiaries has any reason to
believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers
at a cost that would not have a Material Adverse Effect.
(ii) The Company has not taken, and will not take, directly or
indirectly, any action designed to, or which might reasonably be expected to,
cause or result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares pursuant to the
distribution contemplated by this Agreement, and other than as permitted by the
Act, the Company has not distributed and will not distribute any prospectus or
other offering material in connection with the offering and sale of the Shares.
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(jj) To the best of the Company's and the Selling Stockholder's
knowledge, neither A.M. Best Company, Inc. nor Standard & Poor's Corporation has
pending, or has threatened, as applicable: (i) any downgrading in the rating of
Penn-America or (ii) any public announcement that its ratings of Penn-America
are under surveillance or review.
SECTION 7. Representations and Warranties of the Selling Stockholder.
The Selling Stockholder represents and warrants to each Underwriter that:
(a) The Selling Stockholder has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State of
Pennsylvania and has the corporate power and authority to carry on its business
as it is currently being conducted and to own, lease and operate its properties.
(b) The Selling Stockholder is the lawful owner of the Shares to be
sold by the Selling Stockholder pursuant to this Agreement and has, and on the
Closing Date will have, good and clear title to such Shares, free of all
restrictions on transfer, liens, encumbrances, security interests, equities and
claims whatsoever.
(c) The Selling Stockholder has, and on the Closing Date will have,
full legal right, power and authority, and all authorization and approval
required by law, to enter into this Agreement, and to sell, assign, transfer and
deliver the Shares to be sold by the Selling Stockholder in the manner provided
herein and therein.
(d) This Agreement has been duly authorized, executed and delivered by
or on behalf of the Selling Stockholder.
(e) Upon delivery of and payment for the Shares to be sold by the
Selling Stockholder pursuant to this Agreement, good and clear title to such
Shares will pass to the Underwriters, free of all restrictions on transfer,
liens, encumbrances, security interests, equities and claims whatsoever.
(f) The Selling Stockholder has not taken, and will not take, directly
or indirectly, any action designed to, or which might reasonably be expected to,
cause or result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Shares pursuant to the
distribution contemplated by this Agreement, and other than as permitted by the
Act, the Selling Stockholder has not distributed and will not distribute any
prospectus or other offering material in connection with the offering and sale
of the Shares.
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(g) The execution, delivery and performance of this Agreement by the
Selling Stockholder, compliance by the Selling Stockholder with all the
provisions hereof and the consummation of the transactions contemplated hereby
will not require any consent, approval, authorization or other order of, or
qualification with, any court or governmental body or agency including, without
limitation, any insurance regulatory body or agency (except such as may be
required under the securities or Blue Sky laws of the various states) and will
not conflict with or constitute a breach of any of the terms or provisions of,
or a default under, the organizational documents of the Selling Stockholder, or
any indenture, loan agreement, mortgage, lease or other agreement or instrument
to which the Selling Stockholder is a party or by which the Selling Stockholder
or any property of the Selling Stockholder is bound, or violate or conflict with
any applicable law or any rule, regulation, judgment, order or decree of any
court or any governmental body or agency including, without limitation, any
insurance regulatory body or agency having jurisdiction over the Selling
Stockholder or any property of the Selling Stockholder.
(h) The Selling Stockholder is not and, after giving effect to the sale
of the Shares and the application of the proceeds thereof, will not be, an
"investment company" as such term is defined in the Investment Company Act of
1940, as amended.
(i) The Prospectus does not contain and, as amended or supplemented, if
applicable, will not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, except that the
representations and warranties set forth in this paragraph do not apply to
statements or omissions in the Prospectus based upon information relating to any
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use therein.
(j) At any time during the period described in Section 5(d), if there
is any change in the information referred to in Section 7(i), such Selling
Stockholder will immediately notify you of such change.
SECTION 8. Indemnification. (a) The Sellers, jointly and severally,
agree to indemnify and hold harmless each Underwriter, its directors, its
officers and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), from and against any and all losses,
claims, damages, liabilities and judgments (including, without limitation, any
legal or other expenses incurred in connection with defending or investigating
any matter, including any action, that could give rise to any such losses,
claims, damages, liabilities or
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judgments) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement (or any amendment
thereto), the Prospectus (or any amendment or supplement thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or judgments are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information relating
to any Underwriter furnished in writing to the Company by such Underwriter
through you expressly for use therein. Notwithstanding the foregoing, the
liability of the Selling Stockholder pursuant to this Section 8(a) shall be
limited to an amount equal to the total proceeds (before deducting expenses)
received by the Selling Stockholder from the Underwriters for the sale of the
Shares sold by the Selling Stockholder hereunder.
(b) Each Underwriter agrees, severally and not jointly, to indemnify
and hold harmless the Company, its directors, its officers who sign the
Registration Statement, any person controlling the Company within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act, the Selling Stockholder
and any person controlling the Selling Stockholder within the meaning of Section
15 of the Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Sellers to such Underwriter but only with reference
to information relating to such Underwriter furnished in writing to the Company
by such Underwriter through you expressly for use in the Registration Statement
(or any amendment thereto), the Prospectus (or any amendment or supplement
thereto) or any preliminary prospectus.
(c) In case any action shall be commenced involving any person in
respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the
"INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person
against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in writing
and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and
the payment of all fees and expenses of such counsel, as incurred (except that
in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 8(a) and 8(b), the Underwriter shall not be required to assume
the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and
expenses of such counsel, except as provided below, shall be at the expense of
such Underwriter). Any indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of the indemnified party
unless (i) the employment of such counsel shall have been specifically
authorized in writing by the
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indemnifying party, (ii) the indemnifying party shall have failed to assume the
defense of such action or employ counsel reasonably satisfactory to the
indemnified party or (iii) the named parties to any such action (including any
impleaded parties) include both the indemnified party and the indemnifying
party, and the indemnified party shall have been advised by such counsel that
there may be one or more legal defenses available to it which are different from
or additional to those available to the indemnifying party (in which case the
indemnifying party shall not have the right to assume the defense of such action
on behalf of the indemnified party). In any such case, the indemnifying party
shall not, 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
more than one separate firm of attorneys (in addition to any local counsel) for
all Underwriters, their officers and directors and all persons, if any, who
control any Underwriter within the meaning of either Section 15 of the Act or
Section 20 of the Exchange Act, and (ii) the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for the Company,
its directors, its officers who sign the Registration Statement, the Selling
Stockholder, and all persons, if any, who control the Company or the Selling
Stockholder within the meaning of either such Section, and all such fees and
expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Underwriters, their officers and directors and such
control persons of any Underwriters, such firm shall be designated in writing by
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation. In the case of any such
separate firm for the Company, such directors and officers of the Company, the
Selling Stockholder and control persons of the Company or the Selling
Stockholder, such firm shall be designated in writing by the Company. The
indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by
reason of any settlement of any action (i) effected with its written consent or
(ii) effected without its written consent if the settlement is entered into more
than ten business days after the indemnifying party shall have received a
request from the indemnified party for reimbursement for the fees and expenses
of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement or compromise of, or consent to the entry of
judgment with respect to, any pending or threatened action in respect of which
the indemnified party is or could have been a party and indemnity or
contribution may be or could have been sought hereunder by the indemnified
party, unless such settlement, compromise or judgment (i) includes an
unconditional release of the indemnified party from all liability on claims that
are or could have been the subject matter of such action,
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and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of the indemnified party.
(d) To the extent the indemnification provided for in this Section 8 is
unavailable to an indemnified party or insufficient in respect of any losses,
claims, damages, liabilities or judgments referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified party, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages, liabilities and judgments (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Sellers on the one hand and the Underwriters on the other hand from the offering
of the Shares or (ii) if the allocation provided by clause 8(d)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause 8(d)(i) above but also the
relative fault of the Sellers on the one hand and the Underwriters on the other
hand in connection with the statements or omissions which resulted in such
losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative benefits received by the Sellers on the
one hand and the Underwriters on the other hand shall be deemed to be in the
same proportion as the total net proceeds from the offering (before deducting
expenses) received by the Sellers, and the total underwriting discounts and
commissions received by the Underwriters, bear to the total price to the public
of the Shares, in each case as set forth in the table on the cover page of the
Prospectus. The relative fault of the Sellers on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Sellers or the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Sellers and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 8(d) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such indemnified party in
connection with investigating or defending any matter, including any action,
that could have given rise to such losses, claims, damages, liabilities or
judgments. Notwithstanding the provisions of this Section 8, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Shares underwritten by it and distributed to the public
were offered to the public exceeds the amount of
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any damages which such Underwriter has otherwise been required to pay by reason
of such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 8(d) are several in proportion to the
respective number of Shares purchased by each of the Underwriters hereunder and
not joint.
(e) The remedies provided for in this Section 8 are not exclusive and
shall not limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
SECTION 9. Conditions of Underwriters' Obligations. The several
obligations of the Underwriters to purchase the Firm Shares under this Agreement
are subject to the satisfaction of each of the following conditions:
(a) All the representations and warranties of the Company contained in
this Agreement shall be true and correct on the Closing Date with the same force
and effect as if made on and as of the Closing Date.
(b) If the Company is required to file a Rule 462(b) Registration
Statement after the effectiveness of this Agreement, such Rule 462(b)
Registration Statement shall have become effective by 10:00 P.M., New York City
time, on the date of this Agreement; and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been commenced or shall be pending
before or contemplated by the Commission.
(c) As of the closing date, there shall not have occurred any
downgrading, nor shall any notice have been given of any intended or potential
downgrading or of any review for a possible change that does not indicate the
direction of the possible change, in the rating of Penn-America by A.M. Best
Company, Inc. or Standard & Poor's Corporation.
(d) You shall have received on the Closing Date a certificate dated the
Closing Date, signed by Xxx X. Xxxxxxxx and Xxxxxxxx X. Xxxxxxx, in their
capacities as the President and Chief Executive Officer and Vice President and
Chief Financial Officer of the Company, respectively, confirming the matters set
forth in Sections 9(a), 9(b) and 9(c).
(e) Since the respective dates as of which information is given in the
Prospectus other than as set forth in the Prospectus (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement), (i)
there shall
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not have occurred any change or any development involving a prospective change
in the condition, financial or otherwise, or the earnings, surplus, business,
management or operations of the Company and the Subsidiaries, taken as a whole,
(ii) there shall not have been any change or any development involving a
prospective change in the capital stock or in the long-term debt of the Company
or any of the Subsidiaries and (iii) neither the Company nor any of the
Subsidiaries shall have incurred any liability or obligation, direct or
contingent, the effect of which, in any such case described in clause 9(e)(i),
9(e)(ii) or 9(e)(iii), in your judgment, is material and adverse and, in your
judgment, makes it impracticable to market the Shares on the terms and in the
manner contemplated in the Prospectus.
(f) All the representations and warranties of the Selling Stockholder
contained in this Agreement shall be true and correct on the Closing Date with
the same force and effect as if made on and as of the Closing Date and you shall
have received a certificate to such effect, dated the Closing Date, from the
Selling Stockholder.
(g) You shall have received on the Closing Date opinions (satisfactory
to you and counsel for the Underwriters), dated the Closing Date, of Xxxx Xxxxx
Xxxx & XxXxxx, counsel for the Company to the effect set forth in Exhibits A and
A-1.
(h) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriters), dated the Closing Date,
of Xxxxxxx X. Xxxxxxxx, General Counsel for the Company, to the effect set forth
in Exhibit B.
(i) You shall have received on the Closing Date an opinion
(satisfactory to you and counsel for the Underwriter), dated the Closing Date,
of Xxxx Xxxxx Xxxx & XxXxxx, counsel for the Selling Stockholder, to the effect
set forth in Exhibit C.
(j) You shall have received on the Closing Date an opinion, dated the
Closing Date, of Xxxxx Xxxx & Xxxxxxxx counsel for the Underwriters to the
effect set forth in Exhibit D.
(k) You shall have received, on each of the date hereof and the Closing
Date, a letter dated the date hereof or the Closing Date, as the case may be, in
form and substance satisfactory to you, from KPMG Peat Marwick, independent
public accountants, containing the information and statements of the type
ordinarily included in accountants' "comfort letters" to Underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
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(l) The Company shall have delivered to you the agreements specified in
Section 2 hereof which agreements shall be in full force and effect on the
Closing Date.
(m) The Shares shall have been duly listed for quotation on the Nasdaq
National Market.
(n) [the Credit Agreement shall have been entered into and be in full
force and effect.]
(o) All consents, authorizations, approvals, orders, certificates and
permits of and from all insurance authorities, commissions or other insurance
regulatory bodies or agencies necessary for the execution, delivery and
performance of this Agreement by the Company, compliance by the Company with all
provisions hereof and the consummation of the transactions contemplated hereby
have been obtained and are in full force and effect.
(p) The Company and the Selling Stockholder shall not have failed at or
prior to the Closing Date to perform or comply with any of the agreements herein
contained and required to be performed or complied with by the Company or the
Selling Stockholder, as the case may be, at or prior to the Closing Date.
The several obligations of the Underwriters to purchase any Additional
Shares hereunder are subject to the delivery to you on the applicable Option
Closing Date of such documents as you may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of such
Additional Shares and other matters related to the issuance of such Additional
Shares.
SECTION 10. Effectiveness of Agreement and Termination. This Agreement
shall become effective upon the execution and delivery of this Agreement by the
parties hereto.
This Agreement may be terminated at any time prior to the Closing Date
by you by written notice to the Sellers if any of the following has occurred:
(i) any outbreak or escalation of hostilities or other national or international
calamity or crisis or change in economic conditions or in the financial markets
of the United States or elsewhere that, in your judgment, is material and
adverse and, in your judgment, makes it impracticable to market the Shares on
the terms and in the manner contemplated in the Prospectus, (ii) the suspension
or material limitation of trading in securities or other instruments on or by,
as the case may be, any of the New York Stock Exchange, the American Stock
Exchange, the Chicago Board of
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Options Exchange, the Chicago Mercantile Exchange, the Chicago Board of Trade or
the Nasdaq National Market or limitation on prices for securities or other
instruments on any such exchange or the Nasdaq National Market, (iii) the
suspension of trading of any securities of the Company on any exchange or in the
over-the-counter market, (iv) the enactment, publication, decree or other
promulgation of any federal or state statute, regulation, rule or order of any
court or other governmental authority which in your opinion materially and
adversely affects, or will materially and adversely affect, the business,
prospects, financial condition or results of operations of the Company and the
Subsidiaries, taken as a whole, (v) the declaration of a banking moratorium by
either federal or New York State authorities or (vi) the taking of any action by
any federal, state or local government or agency in respect of its monetary or
fiscal affairs which in your opinion has a material adverse effect on the
financial markets in the United States.
If on the Closing Date or on an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase the
Firm Shares or Additional Shares, as the case may be, which it or they have
agreed to purchase hereunder on such date and the aggregate number of Firm
Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase is not more than one-tenth of the total number of Shares to be
purchased on such date by all Underwriters, each non-defaulting Underwriter
shall be obligated severally, in the proportion which the number of Firm Shares
set forth opposite its name in Schedule I bears to the total number of Firm
Shares which all the non-defaulting Underwriters, as the case may be, have
agreed to purchase, or in such other proportion as you may specify, to purchase
the Firm Shares or Additional Shares, as the case may be, which such defaulting
Underwriter or Underwriters, as the case may be, agreed but failed or refused to
purchase on such date; provided that in no event shall the number of Firm Shares
or Additional Shares, as the case may be, which any Underwriter has agreed to
purchase pursuant to Section 2 hereof be increased pursuant to this Section 10
by an amount in excess of one-ninth of such number of Firm Shares or Additional
Shares, as the case may be, without the written consent of such Underwriter. If
on the Closing Date any Underwriter or Underwriters shall fail or refuse to
purchase Firm Shares and the aggregate number of Firm Shares with respect to
which such default occurs is more than one-tenth of the aggregate number of Firm
Shares to be purchased by all Underwriters and arrangements satisfactory to you,
the Company and the Selling Stockholder for purchase of such Firm Shares are not
made within 48 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Underwriter, the Company or the
Selling Stockholder. In any such case which does not result in termination of
this Agreement, either you or the Sellers shall have the right to postpone the
Closing Date, but in no event for longer than seven days, in order that the
required changes, if any, in the Registration Statement and
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the Prospectus or any other documents or arrangements may be effected. If, on an
Option Closing Date, any Underwriter or Underwriters shall fail or refuse to
purchase Additional Shares and the aggregate number of Additional Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Additional Shares to be purchased on such date, the non-defaulting
Underwriters shall have the option to (i) terminate their obligation hereunder
to purchase such Additional Shares or (ii) purchase not less than the number of
Additional Shares that such non-defaulting Underwriters would have been
obligated to purchase on such date in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of any such Underwriter under this
Agreement.
SECTION 11. Agreements of the Selling Stockholder. The Selling
Stockholder agrees with you and the Company:
(a) To pay or to cause to be paid all transfer taxes payable in
connection with the transfer of the Shares to be sold by the Selling Stockholder
to the Underwriters.
(b) To do and perform all things to be done and performed by the
Selling Stockholder under this Agreement prior to the Closing Date and to
satisfy all conditions precedent to the delivery of the Shares to be sold by the
Selling Stockholder pursuant to this Agreement.
SECTION 12. Miscellaneous. Notices given pursuant to any provision of
this Agreement shall be addressed as follows: (i) if to the Company, to
Penn-America Group, Inc., 000 Xxxxx Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx, 00000,
Attention: Xxxxxxxx X. Xxxxxxx, (ii) if to the Selling Stockholder, to Penn
Independent Corporation, 000 Xxxxx Xxxx Xxxx, Xxxxxxx, Xxxxxxxxxxxx 00000,
Attention: Xxx X. Xxxxxxxx and (iii) if to any Underwriter or to you, to you c/x
Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation, 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Syndicate Department, or in any case to such other
address as the person to be notified may have requested in writing.
The respective indemnities, contribution agreements, representations,
warranties and other statements of the Company, the Selling Stockholder and the
several Underwriters set forth in or made pursuant to this Agreement shall
remain operative and in full force and effect, and will survive delivery of and
payment for the Shares, regardless of (i) any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter, the officers or
directors of any Underwriter, any person controlling any Underwriter, the
Company, the officers or directors of the Company, any person controlling the
Company, the Selling Stockholder or any person controlling the Selling
Stockholder, (ii) acceptance of
25
26
the Shares and payment for them hereunder and (iii) termination of this
Agreement.
If for any reason the Shares are not delivered by or on behalf of any
Seller as provided herein (other than as a result of any termination of this
Agreement pursuant to Section 10), the Sellers agree, jointly and severally, to
reimburse the several Underwriters for all out-of-pocket expenses (including the
fees and disbursements of counsel) reasonably incurred by them. Notwithstanding
any termination of this Agreement, the Sellers shall be liable for all expenses
which they have agreed to pay pursuant to Section 5(i) hereof. The Sellers also
agree, jointly and severally, to reimburse the several Underwriters, their
directors and officers and any persons controlling any of the Underwriters for
any and all fees and expenses (including, without limitation, the fees and
disbursements of counsel) incurred by them in connection with enforcing their
rights hereunder (including, without limitation, pursuant to Section 8 hereof).
Except as otherwise provided, this Agreement has been and is made
solely for the benefit of and shall be binding upon the Company, the Selling
Stockholder, the Underwriters, the Underwriters' directors and officers, any
controlling persons referred to herein, the Company's directors and the
Company's officers who sign the Registration Statement and their respective
successors and assigns, all as and to the extent provided in this Agreement, and
no other person shall acquire or have any right under or by virtue of this
Agreement. The term "successors and assigns" shall not include a purchaser of
any of the Shares from any of the several Underwriters merely because of such
purchase.
This Agreement shall be governed and construed in accordance with the
laws of the State of New York.
This Agreement may be signed in various counterparts which together
shall constitute one and the same instrument.
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27
Please confirm that the foregoing correctly sets forth the agreement
among the Company, the Selling Stockholder and the several Underwriters.
Very truly yours,
PENN-AMERICA GROUP, INC.
By:
------------------------------------------
Name:
Title:
PENN INDEPENDENT
CORPORATION
By:
------------------------------------------
Name:
Title:
XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
CONNING & COMPANY
Acting severally on behalf of
themselves and the several
Underwriters named in
Schedule I hereto
By: XXXXXXXXX, LUFKIN & XXXXXXXX
SECURITIES CORPORATION
By:
--------------------------------
Name:
Title:
27
28
SCHEDULE I
Number of Firm Shares
Underwriters to be Purchased
------------ ---------------
Xxxxxxxxx, Lufkin & Xxxxxxxx Securities
Corporation
Conning & Company
Pennsylvania Merchant Group Ltd.
-----------------
Total
29
Annex I
[Insert name of stockholder of the Company who will be required to sign lock
ups]
30
Exhibit A
Opinion of Xxxx Xxxxx Xxxx & XxXxxx,
Counsel for the Company
The opinion of Xxxx Xxxxx Xxxx & XxXxxx, counsel for the Company, to be
delivered pursuant to Section 9(g) of the Agreement shall be to the effect that:
(i) each of the Company and the Subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the State of Pennsylvania and has the corporate power
and authority to carry on its business as described in the Prospectus
and to own, lease and operate its properties;
(ii) each of the Company and Penn-America is duly qualified
and is in good standing as a foreign corporation authorized to do
business in each jurisdiction in which the nature of its business or
its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not have a Material
Adverse Effect;
(iii) Penn-Star is duly qualified and is in good standing as a
foreign corporation authorized to do business in each jurisdiction in
which the nature of its business or its ownership or leasing of
property requires qualification, except where the failure to be so
qualified would not have a Material Adverse Effect;
(iv) all the outstanding shares of capital stock of the
Company (including the Shares to be sold by the Selling Stockholder)
have been duly authorized and validly issued and are fully paid,
non-assessable and not subject to any preemptive or similar rights;
(v) the Shares to be issued and sold by the Company hereunder
have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor as provided by this Agreement,
will be validly issued, fully paid and non-assessable, and the issuance
of such Shares will not be subject to any preemptive or similar rights;
(vi) all of the outstanding shares of capital stock of the
Subsidiaries have been duly authorized and validly issued and are fully
paid and non-assessable, and are owned directly, in the case of
Penn-America, and indirectly, in the case of Penn-Star, by the Company,
free and clear of
31
any security interest, claim, lien, encumbrance or adverse interest of
any nature [except, with respect to Penn-America, for the lien of the
Stock Pledge Agreement];
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
(viii) the authorized capital stock of the Company conforms as
to legal matters to the description thereof contained in the
Prospectus;
(ix) the Registration Statement has become effective under the
Act, no stop order suspending its effectiveness has been issued and no
proceedings for that purpose are, to the best of such counsel's
knowledge after due inquiry, pending before or contemplated by the
Commission;
(x) the statements under the captions ["Risk Factors --
Agreements with Penn Independent," "Risk Factors -- Holding Company
Structure; Dividend Restrictions," "Risk Factors -- Anti-Takeover and
Issuance of Additional Shares," "Certain Relationships and Related
Party Transactions," "Shares Eligible for Future Sale,"] "Description
of Capital Stock" and "Underwriting" in the Prospectus and Item 15 of
Part II of the Registration Statement, insofar as such statements
constitute a summary of the legal matters, documents or proceedings
referred to therein, fairly present the information called for with
respect to such legal matters, documents and proceedings;
(xi) neither the Company nor any of the Subsidiaries is in
violation of its respective charter or by-laws and, to the best of such
counsel's knowledge after due inquiry, neither the Company nor any of
the Subsidiaries is in default in the performance of any obligation,
agreement, covenant or condition contained in any indenture, loan
agreement, mortgage, lease or other agreement or instrument that is
material to the Company and the Subsidiaries, taken as a whole, to
which the Company or any of the Subsidiaries is a party or by which the
Company or any of the Subsidiaries or their respective property is
bound;
(xii) the execution, delivery and performance of this
Agreement by the Company, compliance by the Company with all the
provisions hereof and the consummation of the transactions contemplated
hereby will not require any consent, approval, authorization or other
order of, or qualification with, any court or governmental body or
agency including, without limitation, any insurance regulatory body or
agency (except such as may be required under the securities or Blue Sky
laws or the insurance
2
32
securities laws and regulations of the various states) and will not
conflict with or constitute a breach of any of the terms or provisions
of, or a default under, the charter or by-laws of the Company or any of
the Subsidiaries or any indenture, loan agreement, mortgage, lease or
other agreement or instrument that is material to the Company and the
Subsidiaries, taken as a whole, to which the Company or any of the
Subsidiaries is a party or by which the Company or any of the
Subsidiaries or their respective property is bound, or violate or
conflict with any applicable law or any rule, regulation, judgment,
order or decree of any court or any governmental body or agency
including, without limitation, any insurance regulatory body or agency
having jurisdiction over the Company, any of the Subsidiaries or their
respective property;
(xiii) after due inquiry, such counsel does not know of any
legal or governmental proceedings pending or threatened to which the
Company or any of the Subsidiaries is or could be a party or to which
any of their respective property is or could be subject that are
required to be described in the Registration Statement or the
Prospectus and are not so described, or of any statutes, regulations,
contracts or other documents that are required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to
the Registration Statement that are not so described or filed as
required;
(xiv) to best of such counsel's knowledge after due inquiry,
each of the Company and the Subsidiaries has such permits, licenses,
consents, exemptions, franchises, authorizations and other approvals
("permits"), excluding insurance permits, of, and has made all filings
with and notices to, all governmental or regulatory authorities and
self-regulatory organizations and all courts and other tribunals, as
are necessary to own, lease, license and operate its respective
properties and to conduct its business except where the failure to have
any such permit or to make any such filing or notice would not, singly
or in the aggregate, have a Material Adverse Effect. Each such permit
is valid and in full force and effect and each of the Company and its
Subsidiaries is in compliance with all the terms and conditions thereof
and with the rules and regulations of the authorities and governing
bodies having jurisdiction with respect thereto; and no event has
occurred (including, without limitation, the receipt of any notice from
any authority or governing body) which allows or, after notice or lapse
of time or both, would allow, revocation, suspension or termination of
any such permits or results in or, after notice or lapse of time or
both, would result in any other impairment of the rights of the holder
of any such permit; and such permits contain no restrictions that are
burdensome to the Company or any of the Subsidiaries; except where such
3
33
failure to be valid and in full force and effect or to be in
compliance, the occurrence of any such event or the presence of any
such restriction would not, singly or in the aggregate, have a Material
Adverse Effect;
(xv) the Company is not and, after giving effect to the
offering and sale of the Shares and the application of the proceeds
thereof as described in the Prospectus, will not be, an "investment
company" as such term is defined in the Investment Company Act of 1940,
as amended;
(xvi) to the best of such counsel's knowledge after due
inquiry, there are no contracts, agreements or understandings between
the Company and any person granting such person the right to require
the Company to file a registration statement under the Act with respect
to any securities of the Company or to require the Company to include
such securities with the Shares registered pursuant to the Registration
Statement; and
(xvii) (A) the Registration Statement and the Prospectus and
any supplement or amendment thereto (except for the financial
statements and other financial data included therein as to which no
opinion need be expressed) comply as to form with the Act, (B) such
counsel has no reason to believe that at the time the Registration
Statement became effective or on the date of this Agreement, the
Registration Statement and the prospectus included therein (except for
the financial statements and other financial data as to which such
counsel need not express any belief) contained any untrue statement of
a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading and (C) such counsel has no reason to believe that the
Prospectus, as amended or supplemented, if applicable (except for the
financial statements and other financial data, as aforesaid) contains
any untrue statement of a material fact or omits to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
The opinion of Xxxx Xxxxx Xxxx & XxXxxx described above shall be
rendered to you at the request of the Company and shall so state therein. The
opinion of Xxxx Xxxxx Xxxx & XxXxxx is limited to Pennsylvania law.
In giving such opinions with respect to the matters covered by Clause
(xvii), Xxxx Xxxxx Xxxx & XxXxxx may state that their opinion and belief are
based upon their participation in the preparation of the Registration Statement
and Prospectus and any amendments or supplements thereto and review and
discussion
4
34
of the contents thereof, but is without independent check or verification except
as specified.
5
35
Exhibit A-1
Opinion of Xxxx Xxxxx Xxxx & XxXxxx,
Counsel for the Company
The opinion of Xxxx Xxxxx Xxxx & XxXxxx, counsel for the Company, to be
delivered pursuant to Section 9(h) of this Agreement shall be to the effect
that:
(i) each of the Company and the Subsidiaries is duly licensed,
authorized or admitted as an insurer in Pennsylvania where it is required to be
so licensed or admitted to conduct business as described in the Prospectus,
except where the failure to be so licensed or admitted would not have a Material
Adverse Effect.
(ii) each of the Company and the Subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all Pennsylvania insurance
authorities, commissions or other insurance regulatory bodies and all other
governmental authorities, all self-regulatory organizations and all courts and
other tribunals, necessary to own, lease, license and use its respective
properties and assets and to conduct its respective business as described in the
Prospectus, except for where the failure to have such consents, authorizations,
approvals, orders, certificates and permits, or to make such declarations or
filings, would not have a Material Adverse Effect; all of such consents,
authorizations, approvals, orders, licences, certificates and permits are in
full force and effect, except for where the failure to be in full force and
effect would not have a Material Adverse Effect; except as described in the
Prospectus, such consents, authorizations, approvals, order, licences,
certificates or permits contain no restrictions that are materially burdensome
to the Company or any of the Subsidiaries, and none of the Company or the
Subsidiaries has received any notification from any Pennsylvania insurance
authority, commission or other insurance regulatory body or agency or any other
governmental authority or self-regulatory organization in the United States or
elsewhere to the effect that any additional consent, authorization, approval,
order, license, certificate or permit from such authority, commission, body or
organization is needed to be obtained by any of the Company or the Subsidiaries,
or that such authority, commission, body or organization is considering
limiting, suspending or revoking any such consent, authorization, approval,
order, license, certificate or permit.
(iii) each of the Company or the Subsidiaries is in compliance with the
insurance laws and regulations of Pennsylvania which are applicable to the
Company or the Subsidiaries, as the case may be, except where the failure to
36
comply would not have a Material Adverse Effect; and none of the Company or the
Subsidiaries has received any notification from any insurance authority,
commission or other insurance regulatory body or agency in the United States or
elsewhere to the effect that the Company or the Subsidiaries is not in
compliance with an insurance law or regulation;
(iv) the statements under the captions "Risk Factors -- Regulation,"
"Risk Factors -- Holding Company Structure; Dividend Restrictions" and "Business
-Regulation," in the Prospectus insofar as such statements constitute a summary
of the legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters, documents
and proceedings; and
(v) the execution, delivery and performance of this Agreement by the
Company, compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require any
consent, approval, authorization or other order of, or qualification with, any
court or governmental body or agency including, without limitation, any
insurance regulatory body or agency (except such as may be required under the
securities or Blue Sky laws of the various states) except such as have been
obtained or made and will not conflict with or constitute a breach of any of the
terms or provisions of, or a default under, the charter or by-laws of the
Company or any of the Subsidiaries or any indenture, loan agreement, mortgage,
lease or other agreement or instrument that is material to the Company and the
Subsidiaries, taken as a whole, to which the Company or any of the Subsidiaries
is a party or by which the Company or any of the Subsidiaries or their
respective property is bound, or violate or conflict with any applicable law or
any rule, regulation, judgment, order or decree of any court or any governmental
body or agency including, without limitation, any insurance regulatory body or
agency having jurisdiction over the Company, any of the Subsidiaries or their
respective property.
The opinion of Xxxx Xxxxx Xxxx & XxXxxx described above shall be
rendered to you at the request of the Company and shall so state therein.
2
37
Exhibit B
Opinion of Xxxxxxx X. Xxxxxxxx,
General Counsel for the Company
The opinion of Xxxxxxx X. Xxxxxxxx, counsel for the Company, to be
delivered pursuant to Section 9(h) of this Agreement shall be to the effect
that:
(i) each of the Company and the Subsidiaries is duly licensed,
authorized or admitted as an insurer in each jurisdiction where it is required
to be so licensed or admitted to conduct business as described in the
Prospectus, except where the failure to be so licensed or admitted would not
have a Material Adverse Effect.
(ii) each of the Company and the Subsidiaries has all necessary
consents, authorizations, approvals, orders, certificates and permits of and
from, and has made all declarations and filings with, all insurance authorities,
commissions or other insurance regulatory bodies and all other governmental
authorities, all self-regulatory organizations and all courts and other
tribunals, necessary to own, lease, license and use its respective properties
and assets and to conduct its respective business as described in the
Prospectus, except for where the failure to have such consents, authorizations,
approvals, orders, certificates and permits, or to make such declarations or
filings, would not have a Material Adverse Effect; all of such consents,
authorizations, approvals, orders, licences, certificates and permits are in
full force and effect, except for where the failure to be in full force and
effect would not have a Material Adverse Effect; except as described in the
Prospectus, such consents, authorizations, approvals, order, licences,
certificates or permits contain no restrictions that are materially burdensome
to the Company or any of the Subsidiaries, and none of the Company or the
Subsidiaries has received any notification from any insurance authority,
commission or other insurance regulatory body or agency or any other
governmental authority or self-regulatory organization in the United States or
elsewhere to the effect that any additional consent, authorization, approval,
order, license, certificate or permit from such authority, commission, body or
organization is needed to be obtained by any of the Company or the Subsidiaries,
or that such authority, commission, body or organization is considering
limiting, suspending or revoking any such consent, authorization, approval,
order, license, certificate or permit.
(iii) each of the Company or the Subsidiaries is in compliance with the
insurance laws and regulations of other jurisdictions which are applicable to
the Company or the Subsidiaries, as the case may be, except where the failure to
comply would not have a Material Adverse Effect; and none of the Company or
38
the Subsidiaries has received any notification from any insurance authority,
commission or other insurance regulatory body or agency in the United States or
elsewhere to the effect that the Company or the Subsidiaries is not in
compliance with an insurance law or regulation;
(iv) the statements under the captions "Risk Factors -- Regulation,"
"Risk Factors -- Holding Company Structure; Dividend Restrictions" and "Business
-Regulation," in the Prospectus insofar as such statements constitute a summary
of the legal matters, documents or proceedings referred to therein, fairly
present the information called for with respect to such legal matters, documents
and proceedings; and
(v) the execution, delivery and performance of this Agreement by the
Company, compliance by the Company with all the provisions hereof and the
consummation of the transactions contemplated hereby will not require any
consent, approval, authorization or other order of, or qualification with, any
court or governmental body or agency including, without limitation, any
insurance regulatory body or agency (except such as may be required under the
securities or Blue Sky laws of the various states) except such as have been
obtained or made and will not conflict with or constitute a breach of any of the
terms or provisions of, or a default under, the charter or by-laws of the
Company or any of the Subsidiaries or any indenture, loan agreement, mortgage,
lease or other agreement or instrument that is material to the Company and the
Subsidiaries, taken as a whole, to which the Company or any of the Subsidiaries
is a party or by which the Company or any of the Subsidiaries or their
respective property is bound, or violate or conflict with any applicable law or
any rule, regulation, judgment, order or decree of any court or any governmental
body or agency including, without limitation, any insurance regulatory body or
agency having jurisdiction over the Company, any of the Subsidiaries or their
respective property.
The opinion of Xxxxxxx X. Xxxxxxxx described above shall be rendered to
you at the request of the Company and shall so state therein.
2
39
Exhibit C
Opinion of Xxxx Xxxxx Xxxx & XxXxxx
Counsel for the Selling Stockholder
The opinion of Xxxx Xxxxx Xxxx & XxXxxx, counsel for the Selling
Stockholder, to be delivered pursuant to Section 9(i) of this Agreement shall be
to the effect that:
(i) the Selling Stockholder has been duly incorporated, is
validly existing as a corporation in good standing under the laws of
the State of Pennsylvania and has the corporate power and authority to
carry on its business as it is currently being conducted and to own,
lease and operate its properties;
(ii) this Agreement has been duly authorized, executed and
delivered by the Selling Stockholder;
(iii) the Selling Stockholder is the lawful owner of the
Shares to be sold by the Selling Stockholder pursuant to this Agreement
and has good and clear title to such Shares, free of all restrictions
on transfer, liens, encumbrances, security interests, equities and
claims whatsoever;
(iv) the Selling Stockholder has full legal right, power and
authority, and all authorization and approval required by law, to enter
into this Agreement and to sell, assign, transfer and deliver the
Shares to be sold by the Selling Stockholder in the manner provided
herein and therein;
(v) upon delivery of and payment for the Shares to be sold by
the Selling Stockholder pursuant to this Agreement, good and clear
title to such Shares will pass to the Underwriters, free of all
restrictions on transfer, liens, encumbrances, security interests,
equities and claims whatsoever;
(vi) the execution, delivery and performance of this Agreement
by the Selling Stockholder and the compliance by the Selling
Stockholder with all the provisions hereof and the consummation of the
transactions contemplated hereby will not require any consent,
approval, authorization or other order of, or qualification with, any
court or governmental body or agency including, without limitation, any
insurance regulatory body or agency (except such as may be required
under the securities or Blue Sky
40
laws of the various states) and will not conflict with or constitute a
breach of any of the terms or provisions of, or a default under, the
organizational documents of the Selling Stockholder, or any indenture,
loan agreement, mortgage, lease or other agreement or instrument to
which the Selling Stockholder is a party or by which the property of
the Selling Stockholder is bound, or violate or conflict with any
applicable law or any rule, regulation, judgment, order or decree of
any court or any governmental body or agency including, without
limitation, any insurance regulatory body or agency having jurisdiction
over the Selling Stockholder or the property of the Selling
Stockholder; and
(vii) the Selling Stockholder is not and, after giving effect
to the sale of the Shares and the application of the proceeds thereof,
will not be, on "investment company" as such term is defined in the
Investment Company Act of 1940, as amended.
(viii) the statements under the captions ["Risk Factors --
Certain Relationships with Controlling Stockholder", "Certain
Relationships and Related Party Transactions" and "Principal and
Selling Stockholders"], insofar as such statements relate to Penn
Independent or its affiliates constitute a summary of the legal
matters, documents or proceedings referred to therein, fully present
the information called for with respect to such legal matters,
documents and proceedings.
The opinion of Xxxx Xxxxx Xxxx & XxXxxx described above shall be
rendered to you at the request of the Selling Stockholder and shall so state
therein.
2
41
Exhibit D
Opinion of Xxxxx Xxxx & Xxxxxxxx,
Counsel for the Underwriters
The opinion of Xxxxx Xxxx & Xxxxxxxx, counsel for the Underwriters, to
be delivered pursuant to Section 9(j) of this Agreement shall be to the effect
that:
(i) the Shares to be issued and sold by the Company hereunder have been
duly authorized and, when issued and delivered to the Underwriters against
payment therefor as provided by this Agreement, will be validly issued, fully
paid and non-assessable, and the issuance of such Shares will not be subject to
any preemptive or similar rights;
(ii) this Agreement has been duly authorized, executed and delivered by
the Company;
(iii) the statements under the captions "Description of Capital Stock"
and "Underwriting" in the Prospectus, insofar as such statements constitute a
summary of the legal matters, documents or proceedings referred to therein,
fairly present the information called for with respect to such legal matters,
documents and proceedings;
(iv) (A) the Registration Statement and the Prospectus and any
supplement or amendment thereto (except for the financial statements and other
financial data included therein as to which no opinion need be expressed) comply
as to form with the Act, (B) such counsel has no reason to believe that at the
time the Registration Statement became effective or on the date of this
Agreement, the Registration Statement and the prospectus included therein
(except for the financial statements and other financial data as to which such
counsel need not express any belief) contained any untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading and (C) such counsel
has no reason to believe that the Prospectus, as amended or supplemented, if
applicable (except for the financial statements and other financial data, as
aforesaid) contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading;
42
In giving such opinions with respect to the matters covered by clause
(iv) above, Xxxxx Xxxx & Xxxxxxxx may state that their opinion and belief are
based upon their participation in the preparation of the Registration Statement
and Prospectus and any amendments or supplements thereto and review and
discussion of the contents thereof, but are without independent check or
verification except as specified. In rendering the above opinions, Xxxxx Xxxx &
Xxxxxxxx may rely as to matters involving the application of the laws of the
State of Pennsylvania upon the opinion of Xxxx Xxxxx Xxxx & XxXxxx delivered
pursuant to Section 9(g) of this Agreement.
2
