EXHIBIT 1.1
NORTH POINTE HOLDINGS CORPORATION
(a Michigan Corporation)
[_________] Shares of Common Stock
No Par Value Per Share
Underwriting Agreement
[_________], 2005
SUNTRUST CAPITAL MARKETS, INC.
SANDLER ▇'▇▇▇▇▇ & PARTNERS, L.P.
▇▇▇▇▇▇▇ ▇▇▇▇▇ & COMPANY, L.L.C.
As Representatives for the several underwriters
named in Schedule I
c/o SunTrust Capital Markets, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
North Pointe Holdings Corporation, a Michigan corporation (the
"COMPANY"), confirms its agreement with SunTrust Capital Markets, Inc.
("SUNTRUST") and each of the other Underwriters named in Schedule I hereto
(collectively, the "UNDERWRITERS", which term shall also include any underwriter
substituted as hereinafter provided in Section 9 hereof), for whom SunTrust,
Sandler ▇'▇▇▇▇▇ & Partners, L.P. and ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company, L.L.C. are acting
as representatives (in such capacity, the "REPRESENTATIVES"), with respect to
the issue and sale by the Company and the purchase by the Underwriters, acting
severally and not jointly, of the respective numbers of shares of Common Stock,
no par value per share, of the Company ("COMMON STOCK") set forth in said
Schedule I, and with respect to the grant by the Company to the Underwriters,
acting severally and not jointly, of the option described in Section 2(b) hereof
to purchase all or any part of [________] additional shares of Common Stock to
cover overallotments, if any. The aforesaid [________] shares of Common Stock
(the "FIRM SHARES") to be purchased by the Underwriters and all or any part of
the [________] shares of Common Stock subject to the option described in Section
2(b) hereof (the "OPTION SHARES") are hereinafter referred to as, collectively,
the "SHARES".
The Company understands that the Underwriters propose to make a public
offering of the Shares as soon as the Representatives deem advisable after this
Agreement has been executed and delivered.
The Company and the Underwriters agree that up to [_______] shares of
the Shares to be purchased by the Underwriters (the "RESERVED SHARES") shall be
reserved for sale by the Underwriters to certain eligible employees and persons
having business relationships with the Company and certain other individuals
(the "INVITEES"), as part of the distribution of the Shares by the Underwriters,
subject to the terms of this Agreement, the applicable rules, regulations and
interpretations of the National Association of Securities Dealers, Inc. ("NASD")
and all other applicable laws, rules and regulations. To the extent that such
Reserved Shares are not orally confirmed for purchase by Invitees by the end of
the first business day after the date of this Agreement, such Reserved Shares
may be offered to the public as part of the public offering contemplated hereby.
The Company has prepared and filed with the Securities and Exchange
Commission (the "COMMISSION") a registration statement on Form S-1 (File No.
333-122220), including the related preliminary prospectus, covering the
registration of the Shares under the Securities Act of 1933, as amended (the
"1933 ACT"). Promptly after execution and delivery of this Agreement, the
Company will prepare and file a prospectus in accordance with the provisions of
Rule 430A ("RULE 430A") of the rules and regulations of the Commission under the
1933 Act (the "1933 ACT REGULATIONS") and paragraph (b) of Rule 424 ("RULE
424(b)") of the 1933 Act Regulations. The information included in such
prospectus that was omitted from such registration statement at the time it
became effective but that is deemed to be part of such registration statement at
the time it became effective pursuant to paragraph (b) of Rule 430A is referred
to as "RULE 430A INFORMATION." Each prospectus used before such registration
statement became effective, and any prospectus that omitted the Rule 430A
Information, that was used after such effectiveness and prior to the execution
and delivery of this Agreement, is herein called a "PRELIMINARY PROSPECTUS."
Such registration statement, including the exhibits and any schedules thereto,
at the time it became effective, and including the Rule 430A Information, is
herein called the "REGISTRATION STATEMENT." Any registration statement filed
pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the
"RULE 462(b) REGISTRATION STATEMENT," and after such filing the term
"REGISTRATION STATEMENT" shall include the Rule 462(b) Registration Statement.
The final prospectus in the form first furnished to the Underwriters for use in
connection with the offering of the Shares is herein called the "PROSPECTUS."
For purposes of this Agreement, all references to the Registration Statement,
any preliminary prospectus, the Prospectus or any amendment or supplement to any
of the foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval system
("▇▇▇▇▇").
Section 1. Representations and Warranties of the Company. The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof, and agrees with each Underwriter
that:
(a) Compliance with Registration Requirements. Each of the Registration
Statement and any Rule 462(b) Registration Statement and any post-effective
amendment thereto has become effective under the 1933 Act and no stop order
suspending the effectiveness of the Registration Statement, any Rule 462(b)
Registration Statement or any post-effective amendment thereto has been issued
under the 1933 Act and no proceedings for that purpose have been instituted or
are pending or, to the Knowledge of the Company (defined below), are
contemplated by the Commission, and any request on the part of the Commission
for additional information has been complied with. As used herein, "KNOWLEDGE OF
THE COMPANY" means the actual knowledge of any director or executive officer of
the Company or any director or executive officer of any of the Company's
subsidiaries.
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At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Shares are purchased, at
the Date of Delivery), the Registration Statement, the Rule 462(b) Registration
Statement and any amendments and supplements thereto complied and will comply in
all material respects with the requirements of the 1933 Act and the 1933 Act
Regulations and did not and will 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 not misleading, and the Prospectus, any
preliminary prospectus and any supplement thereto or prospectus wrapper prepared
in connection therewith, at their respective times of issuance and at the
Closing Time, complied and will comply in all material respects with any
applicable laws or regulations of foreign jurisdictions in which the Prospectus
and such preliminary prospectus, as amended or supplemented, if applicable, are
distributed in connection with the offer and sale of Reserved Shares. Neither
the Prospectus nor any amendments or supplements thereto (including any
prospectus wrapper), at the time the Prospectus or any such amendment or
supplement was issued and at the Closing Time (and, if any Option Shares are
purchased, at the Date of Delivery), included or will include an untrue
statement of a material fact or omitted or will omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. The representations
and warranties in this subsection shall not apply to statements in or omissions
from the Registration Statement or Prospectus made in reliance upon and in
conformity with written information furnished to the Company by any Underwriter
through SunTrust expressly for use in the Registration Statement (or any
amendment thereto) or the Prospectus (or any amendment or supplement thereto).
With respect to the preceding sentence, the Company acknowledges that the only
information furnished in writing by the Underwriters through SunTrust expressly
for use in the Registration Statement (or any amendment thereto) or Prospectus
(or any amendment or supplement thereto) is the following: (i) the concession
and reallowance figures appearing in the second paragraph under the caption
"Underwriting", (ii) the information contained in the fifth paragraph and the
second sentence of the sixth paragraph under the caption "Underwriting" and
(iii) the information contained in the first two paragraphs under the caption
"Underwriting -- Stabilization, Short Positions and Penalty Bids."
Each preliminary prospectus and the prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment thereto
complied when so filed in all material respects with the 1933 Act Regulations
and each preliminary prospectus and the Prospectus delivered to the Underwriters
for use in connection with this offering was identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(b) No Material Adverse Change in Business. Since the respective dates
as of which information is given in the Registration Statement and the
Prospectus, except as otherwise stated therein, (i) there has been no material
adverse change in the condition, financial or otherwise, or in the earnings,
properties, policy reserves, business affairs or business prospects of the
Company and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business (a "MATERIAL ADVERSE EFFECT"), (ii)
there have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which are
material with respect to the Company and its subsidiaries considered as one
enterprise, (iii) there has been no dividend or distribution of any kind
declared, paid or made by
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the Company on any class of its capital stock, and (iv) there has not occurred
any other event and there has arisen no set of circumstances required by the
1933 Act or the 1933 Act Regulations to be disclosed in the Registration
Statement or the Prospectus that has not been so set forth in the Registration
Statement or the Prospectus.
(c) Good Standing of the Company. The Company has been duly
incorporated and is validly existing as a corporation in good standing under the
laws of its state of incorporation, with all requisite corporate power and
authority to own, lease, operate and license its properties, and conduct its
business as currently carried on and as described in the Prospectus. The Company
is duly qualified as a foreign corporation to transact business and is in good
standing in every jurisdiction in which the ownership or leasing of its
properties or the nature or conduct of its business, as currently carried on and
as currently proposed to be conducted, requires such qualification, except where
the failure to do so would not have a Material Adverse Effect.
(d) Good Standing of the Company's Subsidiaries. The Company has no
subsidiaries (as defined in the Securities Exchange Act of 1934, as amended (the
"1934 ACT")) other than those listed Exhibit 21.1 to the Registration Statement
(the "SUBSIDIARIES" and each a "SUBSIDIARY"); other than the capital stock of
the subsidiaries and equity securities constituting less than five percent of
the equity securities issued and outstanding of any single entity held by the
Company solely for investment purposes, the Company does not own, directly or
indirectly, any shares of stock or any other equity or long term debt (other
than investments held in the Company's or any Insurance Subsidiary's investment
portfolio made in the ordinary course of its insurance business) securities of
any corporation or have any equity interest in any firm, partnership, joint
venture, association or other entity; complete and correct copies of the
certificates of incorporation and the bylaws (or similar corporate documents
including, in the case of any limited liability company, its operating
agreement) of the Company and the subsidiaries and all amendments thereto have
been delivered to the Representatives, and except as set forth in the exhibits
to the Registration Statement, no changes therein will be made subsequent to the
date hereof and prior to the time of purchase or, if later, the additional time
of purchase. Each subsidiary of the Company has been duly incorporated or
organized and is validly existing as a corporation or other entity in good
standing under the laws of the jurisdiction of its incorporation or
organization, with power and authority (corporate and other) to own lease and
operate its properties and conduct its business as described in the Prospectus;
and each subsidiary of the Company is duly qualified as a foreign corporation or
other entity to transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where failure to so
qualify would not result in a Material Adverse Effect; all of the issued and
outstanding capital stock or other equity interest of each subsidiary of the
Company has been duly authorized and validly issued and is fully paid and
non-assessable and are owned by the Company, directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; no options, warrants or other rights to purchase, agreements or
other obligations to issue or other rights to convert any obligation into shares
of capital stock or ownership interest in the subsidiaries are outstanding,
other than as set forth in the Prospectus; and none of the outstanding shares of
capital stock of any subsidiary was issued in violation of the preemptive or
similar rights of any securityholder of such subsidiary. Except as disclosed in
the Prospectus, no subsidiary is prohibited or restricted, directly or
indirectly, from paying dividends to the Company, or from making any other
distribution with respect to
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such subsidiary's capital stock or other ownership interests or from repaying to
the Company or any other subsidiary any amounts which may from time to time
become due under any loans or advances to such subsidiary from the Company or
such other subsidiary, or from transferring any such subsidiary's property or
assets to the Company or to any other subsidiary.
(e) Possession of Insurance Licenses. Each subsidiary of the Company
that is engaged in the business of insurance (collectively, the "INSURANCE
SUBSIDIARIES") holds such insurance licenses, certificates and permits from
governmental authorities (including, without limitation, from the insurance
regulatory agencies of the various jurisdictions where it conducts business (the
"INSURANCE LICENSES")) as are necessary to the conduct of its business as
described in the Prospectus; the Company and each Insurance Subsidiary have
fulfilled and performed all obligations necessary to maintain the Insurance
Licenses; there is no pending or, to the Knowledge of the Company, threatened
action, suit, proceeding or investigation that would reasonably be expected to
result in the revocation, termination or suspension of any Insurance License
that would reasonably be expected to, individually or in the aggregate, have a
Material Adverse Effect; and no insurance regulatory agency or body has issued,
or commenced any proceeding for the issuance of, any order or decree impairing,
restricting or prohibiting the payment of dividends by an Insurance Subsidiary
to its parent.
(f) Authorization of this Agreement. The Company has the full legal
right, power and authority to enter into this Agreement and to consummate the
transactions contemplated herein. The Company has the full corporate power and
authority to issue, sell and deliver the Shares as provided herein. This
Agreement has been duly authorized, executed and delivered by the Company and
constitutes the valid and binding agreement of the Company enforceable against
the Company in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(g) Description of Common Stock. The Common Stock conforms to all
statements relating thereto contained in the Prospectus and such description
conforms to the rights set forth in the instruments defining the same and no
holder of the Shares will be subject to personal liability by reason of being
such a holder.
(h) Absence of Defaults and Conflicts. Neither the Company nor any of
its subsidiaries is in violation of its charter or bylaws or in default in the
performance or observance of any obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or any subsidiary is
subject (collectively, "AGREEMENTS AND INSTRUMENTS") except for such defaults
that would not result in a Material Adverse Effect; and the execution, delivery
and performance of this Agreement and the consummation of the transactions
contemplated herein and in the Registration Statement (including the issuance
and sale of the Shares and the use of the proceeds from the sale of the Shares
as described in the Prospectus under the caption "USE OF PROCEEDS") and
compliance by the Company with its obligations hereunder have been duly
authorized by all necessary corporate action and do not and will not, whether
with or without the giving of notice or passage of time or both, conflict with
or constitute a breach of, or default or Repayment Event (as defined below)
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under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any subsidiary
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches, defaults or Repayment Events or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action result in
any violation of the provisions of the charter or bylaws of the Company or any
subsidiary or any applicable law, statute, rule, regulation, judgment, order,
writ or decree of any government, government instrumentality or court, domestic
or foreign, having jurisdiction over the Company or any subsidiary or any of
their assets, properties or operations. As used herein, a "REPAYMENT EVENT"
means any event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder's behalf)
the right to require the repurchase, redemption or repayment of all or a portion
of such indebtedness by the Company or any subsidiary.
(i) Capitalization. The authorized, issued and outstanding capital
stock of the Company is as set forth in the Prospectus in the column entitled
"Actual" under the caption "Capitalization." All of the issued and outstanding
shares of Common Stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable. All offers and sales of the
Company's capital stock prior to the date hereof were at all relevant times duly
registered under the 1933 Act or were exempt from the registration requirements
of the 1933 Act and were duly registered or the subject of an available
exemption from the registration requirements of the applicable securities laws
of all relevant jurisdictions. The Shares to be sold by the Company, when issued
and delivered by the Company and paid for pursuant to this Agreement, will be
validly issued, fully paid and non-assessable and will conform in all respects
to the description thereof contained in the Prospectus. No preemptive rights of
stockholders exist with respect to any of the Shares. Except as described in the
Prospectus, (i) no person or entity holds a right to require or participate in
the registration of the offer and sale of the Shares under the 1933 Act and (ii)
no person holds a right, contractual or otherwise, to cause the Company to issue
or sell to it any shares of Common Stock or shares of any other capital stock or
other equity interests of the Company, (iii) no person has any preemptive
rights, resale rights, rights of first refusal or other rights to purchase any
shares of Common Stock or shares of any other capital stock or other equity
interests of the Company, and (iv) no person has the right to act as an
underwriter or as a financial advisor to the Company in connection with the
offer and sale of the Shares, in the case of each of the foregoing clauses (ii),
(iii) and (iv), whether as a result of the filing or effectiveness of the
Registration Statement or the sale of the Shares as contemplated thereby or
otherwise; no person has the right, contractual or otherwise, to cause the
Company to register under the 1933 Act any shares of Common Stock or shares of
any other capital stock or other equity interests of the Company, or to include
any such shares or interests in the Registration Statement or the offering
contemplated thereby, whether as a result of the filing or effectiveness of the
Registration Statement or the sale of the Shares as contemplated thereby or
otherwise, or to require registration under the 1933 Act of the offer and sale
of any shares of Common Stock of the Company at any other time. None of the
issued shares of capital stock of the Company has been issued in violation of
any preemptive or similar right. Except as described in the Prospectus, there
are no outstanding options, warrants or other rights calling for the issuance of
any share of capital stock of the Company or any security convertible into or
exchangeable for capital stock of the Company. There is no commitment, plan or
arrangement to issue any share of capital stock of the Company or any security
convertible into or exchangeable for capital stock of the Company, except as is
disclosed in the Prospectus.
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(j) Financial Statements. The financial statements of the Company
(including all related notes and schedules) included in the Registration
Statement and the Prospectus present fairly the financial position of the
Company and its consolidated subsidiaries as of the dates indicated and the
results of their operations, stockholders' equity and cash flows of the Company
and its consolidated subsidiaries for the periods specified, all in conformity
with generally accepted accounting principles ("GAAP") applied on a consistent
basis throughout the periods involved (subject, in the case of unaudited
financial statements, to normal year-end adjustments) and in conformity with
Regulation S-X of the Commission. The financial statements of North Pointe
Financial Services, Inc., Universal Fire & Casualty Insurance Company and
Alliance Surety Holdings, Inc., each of which was purchased by the Company on
June 26, 2002 (the "PREDECESSOR COMPANIES") (including all related notes and
schedules), included in the Registration Statement and the Prospectus present
fairly the financial position of the Predecessor Companies and their
consolidated subsidiaries as of the dates indicated and the results of their
operations, stockholders' equity and cash flows of the Predecessor Companies and
their consolidated subsidiaries for the periods specified, all in conformity
with GAAP applied on a consistent basis throughout the periods involved and in
conformity with Regulation S-X of the Commission. The supporting schedules
included in the Registration Statement present fairly in accordance with GAAP
the information required to be stated therein. The selected financial data and
the summary financial information included in the Prospectus are accurately
computed, fairly present the information shown therein and have been determined
on a basis consistent with the financial statements included in the Registration
Statement and the Prospectus. No financial statements or schedules other than
those included in the Prospectus are required by Form S-1 or otherwise to be
included in the Registration Statement, the Prospectus or any preliminary
prospectus.
(k) Pro Forma Financial Statements. The pro forma financial statements
and the related notes thereto included in the Registration Statement and the
Prospectus present fairly the information shown therein, have been prepared in
accordance with the Commission's rules and guidelines with respect to pro forma
financial statements and have been properly compiled on the bases described
therein, and the assumptions used in the preparation thereof are reasonable and
the adjustments used therein are appropriate to give effect to the transactions
and circumstances referred to therein. All other financial and statistical data
included in the Registration Statement and Prospectus present fairly and
accurately the information stated therein and have been prepared and compiled on
a basis consistent with the financial statements presented in the Registration
Statement and Prospectus and the books and records of the Company or the books
and records of the Predecessor Companies, as applicable.
(l) Independent Accountants. PricewaterhouseCoopers LLP has examined
and is reporting upon the audited financial statements and supporting schedules
included in the Registration Statement and the Prospectus.
PricewaterhouseCoopers LLP are, and were during the periods covered by their
report included in the Registration Statement and the Prospectus, an independent
public accountant with respect to the Company and its subsidiaries and the
Predecessor Companies as required by the 1933 Act and the 1933 Act Regulations
and PricewaterhouseCoopers LLP is a registered public accounting firm within the
meaning of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002.
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(m) Lock-Up Agreements. The Company has obtained, for the benefit of
the Underwriters, from each of the Company's directors, officers and certain of
its existing stockholders, a written agreement, substantially in the form
attached hereto as Exhibit A.
(n) Absence of Further Requirements. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any
court or governmental authority or agency is necessary or required for the
performance by the Company of its obligations hereunder, in connection with the
offering, issuance or sale of the Shares hereunder or the consummation of the
transactions contemplated by this Agreement, except (i) such as have been
already obtained or as may be required under the 1933 Act or the 1933 Act
Regulations or state securities laws and (ii) such as have been obtained under
the laws and regulations of jurisdictions outside the United States in which the
Reserved Shares are offered, if applicable.
(o) Environmental Laws. Except as described in the Registration
Statement and except as would not, singly or in the aggregate, result in a
Material Adverse Effect, (i) neither the Company nor any of its subsidiaries is
in violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial or
administrative interpretation thereof, including any judicial or administrative
order, consent, decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or threatened
release of chemicals, pollutants, contaminants, wastes, toxic substances,
hazardous substances, petroleum or petroleum products, asbestos-containing
materials or mold (collectively, "HAZARDOUS MATERIALS") or to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of Hazardous Materials (collectively, "ENVIRONMENTAL LAWS"), (ii) the
Company and its subsidiaries have all permits, authorizations and approvals
required under any applicable Environmental Laws and are each in compliance with
their requirements, (iii) there are no pending or, to the Knowledge of the
Company, threatened administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or violation,
investigation or proceedings relating to any Environmental Law against the
Company or any of its subsidiaries and (iv) to the Knowledge of the Company,
there are no events or circumstances that would reasonably be expected to form
the basis of an order for clean-up or remediation, or an action, suit or
proceeding by any private party or governmental body or agency, against or
affecting the Company or any of its subsidiaries relating to Hazardous Materials
or any Environmental Laws.
(p) Title to Property; Leased Property. The Company and its
subsidiaries have good and marketable title to all real property owned by the
Company and its subsidiaries, in each case, free and clear of all mortgages,
pledges, liens, encumbrances, security interests, restrictions and title defects
of any kind, except such as are described in the Prospectus or as would not have
a Material Adverse Effect. All real property and buildings leased by the Company
or any of its subsidiaries are subject to valid and enforceable leases; such
leases conform to the description thereof, if any, set forth in the Registration
Statement and the Prospectus; and no written notice has been given to the
Company or any of its subsidiaries or written claim asserted against the Company
or any of its subsidiaries by anyone adverse to the rights of the Company or any
of its subsidiaries under any of the leases or affecting the Company's or any of
its subsidiaries' rights to the continued possession of the leased property,
except as would not result in a Material
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Adverse Effect. Each parcel of real property owned or leased by the Company or
any of its subsidiaries (including any real property acquired upon foreclosure),
and each improvement thereon, complies with all applicable codes, laws and
regulations (including, without limitation, building and zoning codes, laws and
regulations) except for such failures to comply, if any, that would not have a
Material Adverse Effect. To the Knowledge of the Company there are no pending or
threatened condemnation proceedings, zoning changes, or other proceedings or
actions that will in any manner affect the size of, use of, improvements on,
construction on or access to such real property and improvements, except such
proceedings or actions that would not have a Material Adverse Effect.
(q) Absence of Proceedings. There is no action, suit, proceeding,
inquiry or investigation before or brought by any court or governmental agency
or body, domestic or foreign, now pending, or, to the Knowledge of the Company,
threatened, against or affecting the Company or any subsidiary, which is
required to be disclosed in the Registration Statement (other than as disclosed
therein), or which might result in a Material Adverse Effect, or which might
otherwise materially and adversely affect the properties or assets thereof or
the consummation of the transactions contemplated in this Agreement or the
performance by the Company of its obligations hereunder; the aggregate of all
pending legal or governmental proceedings to which the Company or any subsidiary
is a party or of which any of their respective property or assets is the subject
which are not described in the Registration Statement, including ordinary
routine litigation incidental to the business, would not result in a Material
Adverse Effect.
(r) Accuracy of Exhibits. There are no contracts or other documents
required to be described in or incorporated by reference into the Registration
Statement or the Prospectus or to be filed as exhibits thereto which have not
been so described or filed as required. The agreements to which the Company or
any of its subsidiaries is a party which are described in the Registration
Statement and the Prospectus are valid and enforceable in all material respects
by the Company or its subsidiary in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles, and no party thereto is in breach or default
under any of such agreements except where such breach or default would not have
a Material Adverse Effect. Neither the Company nor any of its subsidiaries has
received notice of the intention of any other party to any contract to which the
Company or any such subsidiary is also a party to terminate such contract,
except such contracts termination of which, individually or in the aggregate
with other contracts with respect to which such notice shall have been received,
would not have a Material Adverse Effect.
(s) Possession of Licenses and Permits. The Company and its
subsidiaries possess such permits, licenses, approvals, consents and other
authorizations (collectively, "GOVERNMENTAL LICENSES") issued by the appropriate
federal, state, local or foreign regulatory agencies or bodies necessary to
conduct the business now operated by them, except where the failure so to
possess would not, singly or in the aggregate, result in a Material Adverse
Effect; the Company and its subsidiaries are in compliance with the terms and
conditions of all such Governmental Licenses, except where the failure so to
comply would not, singly or in the aggregate, result in a Material Adverse
Effect; all of the Governmental Licenses are valid and in full force and effect,
except when the invalidity of such Governmental Licenses or the failure of
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such Governmental Licenses to be in full force and effect would not, singly or
in the aggregate, result in a Material Adverse Effect; and neither the Company
nor any of its subsidiaries has received any notice of proceedings relating to
the revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(t) Absence of Change in Reserving Practices. Except as disclosed in
the Prospectus, the Company and its Insurance Subsidiaries have made no material
change in their insurance reserving practices since December 31, 2004.
(u) Reinsurance. All reinsurance treaties and arrangements (including
placement slips) to which any Insurance Subsidiary is a party are in full force
and effect and no Insurance Subsidiary is in violation of, or in default in the
performance, observance or fulfillment of, any obligation, agreement, covenant
or condition contained therein, except where the failure to be in full force and
effect or where such violation or default would not, individually or in the
aggregate, be reasonably expected to have a Material Adverse Effect; no
Insurance Subsidiary has received any notice from any of the other parties to
such treaties or arrangements that such other party intends not to perform such
treaty or arrangement and, to the Knowledge of the Company, none of the other
parties to such treaties or arrangements will be unable to perform such treaty
or arrangement except (i) to the extent adequately and properly reserved for in
the audited historical financial statements of the Company and the Predecessor
Companies included in the Prospectus or (ii) where such nonperformance would not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.
(v) Statutory Financial Statements. The statutory financial statements
of the Insurance Subsidiaries from which certain ratios and other statistical
data filed as part of the Registration Statement have been derived have been
prepared for each relevant period in conformity with statutory accounting
principles or practices required or permitted by the National Association of
Insurance Commissioners and by the appropriate Insurance Department of the
jurisdiction of domicile of each Insurance Subsidiary, and such statutory
accounting practices have been applied on a consistent basis throughout the
periods involved, except as may otherwise be indicated therein or in the notes
thereto, and present fairly in all material respects the statutory financial
position of the Insurance Subsidiaries as of the dates thereof, and the
statutory basis results of operations of the Insurance Subsidiaries for the
periods covered thereby.
(w) Possession of Intellectual Property. The Company and each of its
subsidiaries owns or possesses all intangible property rights and know-how
necessary for the conduct of its business as currently carried on and as
currently proposed to be carried on (collectively, the "INTELLECTUAL PROPERTY").
Except as described in the Prospectus or would not have a Material Adverse
Effect, (i) no third parties have received rights to any such Intellectual
Property from the Company or any subsidiary, other than licenses granted in the
ordinary course of business; (ii) to the Knowledge of the Company, there is no
infringement by third parties of any such Intellectual Property; (iii) there is
no pending or, to the Knowledge of the Company, threatened action, suit,
proceeding or claim by others challenging the Company's or any subsidiary's
rights in or to any such Intellectual Property, and the Company and each
subsidiary is unaware of any facts which would form a basis for any such claim;
and (iv) there is no pending or, to the Knowledge of the Company, threatened
action, suit, proceeding or claim by others challenging the validity or scope
-10-
of any such Intellectual Property, and the Company and each subsidiary is
unaware of any facts which would form a basis for any such claim. To the
Knowledge of the Company, none of the technology employed by the Company or any
subsidiary has been obtained or is being used by the Company or any subsidiary
in violation of the rights of any person or third party. Neither the Company nor
any subsidiary knows of infringement by others of Intellectual Property owned by
or licensed to the Company or any subsidiary.
(x) Internal Controls. The Company's auditors and the Audit Committee
of the Board of Directors have been advised of (i) any significant deficiencies
in the design or operation of internal controls which could adversely affect the
Company's ability to record, process, summarize, and report financial data and
(ii) any fraud, whether or not material, that involves management or other
employees who have a role in the Company's internal controls; any material
weaknesses in internal controls have been identified for the Company's auditors;
and since the date of the most recent evaluation of such disclosure controls and
procedures, there have been no significant changes in internal controls or in
other factors that could significantly affect internal controls, including any
corrective actions with regard to significant deficiencies and material
weaknesses. The Company and its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with GAAP and to maintain accountability
for assets; (iii) access to assets is permitted only in accordance with
management's general or specific authorization; and (iv) the recorded
accountability for assets is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences; and,
to the Knowledge of the Company, neither the Company nor any subsidiary,
employee or agent thereof, has made any payment of funds of the Company or any
subsidiary, as the case may be, or received or retained any funds, and no funds
of the Company or any subsidiary, as the case may be, have been set aside to be
used for any payment, in each case in violation of any law, rule or regulation,
except as would not have a Material Adverse Effect.
(y) ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act. The Company is in compliance, in all material
respects, with all applicable effective provisions of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of
2002, and the rules and regulations promulgated thereunder.
(z) Personal Loans. The Company has provided the Representatives with
true, correct, and complete copies of all documentation pertaining to any
extension of credit since January 1, 2003, in the form of a personal loan made,
directly or indirectly, by the Company to any director or executive officer of
the Company, or to any family member or affiliate of any director or executive
officer of the Company; and since December 31, 2004, the Company and its
predecessors have not, directly or indirectly, including through any subsidiary
[INCLUDE CARVE-OUT, IF ANY]: (i) extended credit, arranged to extend credit, or
renewed any extension of credit, in the form of a personal loan, to or for any
director or executive officer of the Company, or to or for any family member or
affiliate of any director or executive officer of the Company; or (ii) made any
material modification, including any renewal thereof, to any term of any
personal loan to any director or executive officer of the Company, or any family
member or affiliate of any director or executive officer, which loan was
outstanding on December 31, 2004.
-11-
(aa) Absence of Default; Deficiency. The Company together with each
subsidiary has filed all federal, state, local and foreign income, franchise,
property and other tax returns and tax forms required to be filed, other than
those that would not result in a Material Averse Effect. Neither the Company nor
any subsidiary is in default in the payment of any taxes which were payable
pursuant to said returns or any assessments with respect thereto, other than any
which the Company or any subsidiary is contesting in good faith and as to which
adequate reserves have been provided. Such returns and forms are complete and
correct in all material respects. The Company together with each subsidiary has
made all payroll withholdings required to be made by it with respect to
employees. The charges, accruals and reserves on the books of the Company
together with each subsidiary in respect of any tax liability for any year not
finally determined are adequate to meet any assessments or reassessments for
additional taxes. There have been no tax deficiencies asserted and, to the
Knowledge of the Company, no tax deficiency might be reasonably asserted or
threatened against the Company or any subsidiary that could individually or in
the aggregate have a Material Adverse Effect.
(bb) Insurance Coverage. The Company and each subsidiary maintains
insurance (issued by insurers of recognized financial responsibility) of the
types and in the amounts generally deemed adequate for its business, including,
but not limited to, insurance covering real and personal property owned or
leased by the Company or any subsidiary against theft, damage, destruction, acts
of vandalism and all other risks customarily insured against, professional
liability and casualty and liability insurance covering the Company's and its
subsidiaries' operations, all of which insurance is in full force and effect.
(cc) Absence of Labor Dispute. No labor dispute with the employees of
the Company or any subsidiary exists, or, to the Knowledge of the Company, is
threatened or imminent. Neither the Company nor any subsidiary is aware of any
existing, threatened or imminent labor disturbance by the employees of any of
its principal vendors, suppliers, contractors or customers that would have a
Material Adverse Effect.
(dd) Absence of Manipulation. Neither the Company nor its officers,
directors, stockholders or affiliates, have taken, and such parties will not
take, directly or indirectly, any action designed to, or that might be
reasonably expected to, cause or result in or constitute, the stabilization or
manipulation of the price of any security to facilitate the sale or resale of
the Shares.
(ee) Listing Approval. The Common Stock has been registered pursuant to
Section 12(g) of the 1934 Act, and the Shares have been approved for listing on
The NASDAQ Stock Market's National Market (the "NASDAQ"), subject to official
notice of issuance.
(ff) Absence of Broker Fee. The Company has not incurred any liability
for a fee, commission or other compensation on account of the employment of a
broker or finder in connection with the transactions contemplated by this
Agreement other than as contemplated hereby or as described in the Prospectus.
(gg) Investment Company Act. The Company is not now, and upon the
issuance and sale of the Shares as herein contemplated and the application of
the net proceeds therefrom as
-12-
described in the Prospectus will not be, an "investment company" as defined in
the Investment Company Act of 1940, as amended (the "1940 ACT").
(hh) Absence of Prior Sale of Shares of Common Stock. Except as
described in the Registration Statement or Prospectus, the Company has not sold
or issued any shares of Common Stock during the six-month period preceding the
date of the Prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the 1933 Act Regulations.
(ii) Absence of Relationships. No relationship, direct or indirect,
exists between or among the Company or any subsidiary on the one hand, and the
directors, officers, stockholders, customers or suppliers of the Company or any
subsidiary on the other hand, which is required to be described in the
Prospectus and which is not so described.
(jj) Statistical Data. The statistical and market-related data included
in the Prospectus and the Registration Statement are based on or derived from
sources that the Company reasonably believes to be reliable and accurate.
(kk) Employee Retirement Income Security Act. The Company and each
subsidiary is in compliance in all material respects with all currently
applicable provisions of the Employee Retirement Income Security Act of 1974, as
amended, including the regulations and published interpretations thereunder
(herein called "ERISA"); with respect to each "employee benefit plan" (as
defined in Section 3(3) of ERISA), the Company and each subsidiary is in
compliance in all material respects with all currently applicable provisions of
the Internal Revenue Code (the "CODE"), including the regulations and published
interpretations thereunder; to the Knowledge of the Company, no "reportable
event" (as defined in Section 4043 of ERISA) has occurred with respect to any
"pension plan" (as defined in Section 3(2) of ERISA) for which the Company or
any subsidiary would have any liability; neither the Company nor any subsidiary
has incurred, and does not expect to incur, liability under (i) Title IV of
ERISA with respect to termination of, or withdrawal from, any "pension plan" or
(ii) Sections 412 or 4971 of the Code; and each "pension plan" sponsored by the
Company or any subsidiary that is intended to be qualified under Section 401(a)
of the Code has received a favorable letter of determination from the Internal
Revenue Service as to its qualified status within the last three years, and
nothing has occurred, to Company's Knowledge, since such date, whether by action
or failure to act, that would reasonably be expected to cause the loss of such
qualification.
(ll) Absence of Reliance. The Company has not relied upon the
Underwriters or legal counsel for the Underwriters for any legal, tax or
accounting advice in connection with the offering and sale of the Shares.
(mm) Certificates. Any certificate signed by any executive officer of
the Company and delivered to the Underwriters or to counsel for the Underwriters
pursuant to with this Agreement shall be deemed a representation and warranty by
the Company to each Underwriter as to the matters covered thereby.
(nn) Stock Certificates. The form of certificate used to evidence the
Common Stock complies in all material respects with all applicable statutory
requirements, with any applicable
-13-
requirements of the organizational documents of the Company and the requirements
of NASDAQ.
(oo) Absence of Transactions with 5% Shareholders. No transaction has
occurred between or among the Company and any of its officers or directors or
beneficial owners of 5% or more of the Company's outstanding Common Stock ("5%
SHAREHOLDERS") or any affiliate or affiliates of any such officer or director or
5% Shareholders that is required to be described in and is not described in the
Registration Statement and the Prospectus.
(pp) Absence of Affiliations. To the Knowledge of the Company after due
inquiry, there are no affiliations or associations between any member of the
NASD and any of the Company's officers, directors or 5% Shareholders, except as
set forth in the Prospectus.
(qq) Absence of Contributions. Neither the Company or any of its
subsidiaries nor any officer or director purporting to act on behalf of the
Company or any of its subsidiaries has at any time (i) made any material
contributions to any candidate for political office, or failed to disclose fully
any such contributions, in violation of law, or (ii) made any material payment
to any state, federal or foreign governmental officer or official, or other
person charged with similar public or quasi-public duties, other than payments
required or allowed by applicable law.
(rr) Absence of Transfers. Neither the Company or any of its
subsidiaries nor, to the Knowledge of the Company, any employee or agent of the
Company or any of its subsidiaries, has made any payment of funds of the Company
or of any subsidiary or received or retained any funds in violation of any law,
rule or regulation or of a character required to be disclosed in the Prospectus
that was not disclosed in the Prospectus.
(ss) Foreign Corrupt Practices Act. Neither the Company or any of its
subsidiaries nor, to the Knowledge of the Company, any director, officer, agent,
or employee of the Company or any of its subsidiaries is aware of or has taken
any action, directly or indirectly, that would result in a violation by such
persons of the FCPA (defined below), including, without limitation, making use
of the mails or any means or instrumentality of interstate commerce corruptly in
furtherance of an offer, payment, promise to pay or authorization of the payment
of any money, or other property, gift, promise to give, or authorization of the
giving of anything of value to any "foreign official" (as such term is defined
in the FCPA) or any foreign political party or official thereof or any candidate
for foreign political office, in contravention of the FCPA, and the Company and
its subsidiaries have conducted their businesses in compliance in all material
respects with the FCPA and have instituted and maintain policies and procedures
designed to ensure, and which are reasonably expected to continue to ensure,
continued compliance in all material respects therewith. "FCPA" means Foreign
Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder.
(tt) Currency and Foreign Transactions Reporting Act. The operations of
the Company and its subsidiaries are and have been conducted at all times in
compliance in all material respects with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting Act of
1970, as amended, the money laundering statutes of all jurisdictions, the rules
and regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
-14-
(collectively, the "MONEY LAUNDERING LAWS") and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to the Money
Laundering Laws is pending or, to the Knowledge of the Company, threatened.
(uu) Absence of Sanctions. Neither the Company or any of its
subsidiaries nor, to the Knowledge of the Company, any director, officer, agent,
employee or affiliate of the Company or any of its subsidiaries is currently
subject to any U.S. sanctions administered by the Office of Foreign Assets
Control of the U.S. Treasury Department ("OFAC"); and the Company will not
directly or indirectly use the proceeds of the offering contemplated hereby, or
lend, contribute or otherwise make available such proceeds to any subsidiary,
joint venture partner or other person or entity, for the purpose of financing
the activities of any person currently subject to any U.S. sanctions
administered by OFAC.
(vv) Relationship between the Company and the Underwriters. The
relationship between the Company and each of the Underwriters is an arm-length
commercial relationship, and that no fiduciary duty or any other obligation
arising out of a relationship of higher trust exists between the Company and any
of the Underwriters.
Section 2. Sale and Delivery of Shares to the Underwriters; Closing.
(a) Firm Shares. On the basis of the representations and warranties
herein contained, and subject to the terms and conditions herein set forth, the
Company agrees to sell to each Underwriter, severally and not jointly, and each
Underwriter, severally and not jointly, agrees to purchase from the Company, at
a price per share set forth in Schedule II, the number of Firm Shares set forth
opposite the name of such Underwriter in Schedule I hereto, plus any additional
number of Firm Shares such Underwriter may become obligated to purchase pursuant
to the provisions of Section 9 hereof.
(b) Option Shares. In addition, on the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company hereby grants an option to the Underwriters, severally and
not jointly, to purchase up to an additional [______] shares of Common Stock at
the price per share set forth in Schedule II, less an amount, equal to, on a per
share basis, any dividends or distributions declared by the Company and payable
on the Firm Shares but not payable on the Option Shares. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time for the purpose of covering overallotments which
may be made in connection with the offering and distribution of the Firm Shares
upon notice by SunTrust to the Company setting forth the number of Option Shares
as to which the several Underwriters are then exercising the option and the time
and date of payment and delivery for such Option Shares. Any such time and date
of delivery (a "DATE OF DELIVERY") shall be determined by SunTrust, but shall
not be later than five full business days after the exercise of said option, nor
in any event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the Option Shares, each of the
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option Shares then being purchased which the number of Firm
Shares set forth in Schedule I opposite the name of such Underwriter bears to
the total number of
-15-
Firm Shares, subject in each case to such adjustments as SunTrust in its
discretion shall make to eliminate any sales or purchases of fractional shares.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Firm Shares shall be made at the offices of Sidley ▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇ LLP in Chicago, Illinois, or at such other place as shall be agreed
upon by the Representatives and the Company, at 10:00 a.m. (Eastern time), the
third (fourth, if the pricing occurs after 4:30 p.m. (Eastern time) on any given
day) business day after the effective date of the Registration Statement, or
(ii) at such other time not more than ten business days after such date as shall
be agreed upon by the Representatives and the Company (unless, in either case,
postponed pursuant to Section 9 hereof) (such date and time of payment and
delivery being herein called the "CLOSING TIME") (the Closing Time and each Date
of Delivery, if any, being sometimes referred to as a "CLOSING DATE").
In addition, in the event that any or all of the Option Shares are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Shares shall be made at the offices of Sidley
▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP in Chicago, Illinois in the manner set forth above, or
at such other place as shall be agreed upon by the Representatives and the
Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Shares to be purchased by them. It is understood that each
Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the Firm
Shares and the Option Shares, if any, which it has agreed to purchase. SunTrust,
individually and not as representative of the Underwriters, may (but shall not
be obligated to) make payment of the purchase price for the Firm Shares or the
Option Shares, if any, to be purchased by any Underwriter whose funds have not
been received by the Closing Time or the relevant Date of Delivery, as the case
may be, but such payment shall not relieve such Underwriter from its obligations
hereunder.
(d) Denominations; Registrations. Certificates for the Firm Shares and
the Option Shares, if any, shall be in such denominations and registered in such
names as the Representatives may request in writing at least two full business
day before the Closing Time or the relevant Date of Delivery, as the case may
be. The certificates for the Firm Shares and the Option Shares, if any, will be
made available for examination and packaging at the offices of Sidley ▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇ LLP in Chicago, Illinois not later than 10:00 a.m. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
Section 3. Certain Covenants of the Company. The Company covenants and
agrees with each Underwriter as follows:
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(b), will comply with the requirements of Rule 430A
and will
-16-
notify the Representatives immediately, and confirm the notice in writing, (i)
when any post-effective amendment to the Registration Statement shall become
effective, or any supplement to the Prospectus or any amended Prospectus shall
have been filed, (ii) of the receipt of any comments from the Commission, (iii)
of any request by the Commission for any amendment to the Registration Statement
or any amendment or supplement to the Prospectus or for additional information,
and (iv) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending the use of any preliminary prospectus, or of the suspension of the
qualification of the Shares for offering or sale in any jurisdiction, or of the
initiation or threatening of any proceedings for any of such purposes. The
Company will promptly effect the filings necessary pursuant to Rule 424(b) and
will take such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will promptly
file such prospectus. The Company will use reasonable efforts to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Representatives
notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)) or any amendment, supplement
or revision to either the prospectus included in the Registration Statement at
the time it became effective or to the Prospectus, will furnish the
Representatives with copies of any such documents a reasonable amount of time
prior to such proposed filing or use, as the case may be, and will not file or
use any such document to which the Representatives or counsel for the
Underwriters shall reasonably object.
(c) Delivery of Registration Statements. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters, without
charge, photocopies of signed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein) and photocopies of signed copies of all
consents and certificates of experts, and will also deliver to the
Representatives, without charge, a conformed copy of the Registration Statement
as originally filed and of each amendment thereto (without exhibits) for each of
the Underwriters. The copies of the Registration Statement and each amendment
thereto furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇, except
to the extent permitted by Regulation S-T.
(d) Delivery of Prospectuses. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus as
such Underwriter reasonably requested, and the Company hereby consents to the
use of such copies for purposes permitted by the 1933 Act. The Company will
furnish to each Underwriter, without charge (except as provided in Section
3(e)), during the period when the Prospectus is required to be delivered under
the 1933 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The Prospectus and any
amendments or supplements thereto furnished to the Underwriters will be
identical to the electronically transmitted copies thereof filed with the
Commission pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
-17-
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations so as to permit the completion of
the distribution of the Shares as contemplated in this Agreement and in the
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Shares, any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Underwriters or for the Company, to amend the Registration
Statement or amend or supplement the Prospectus in order that the Prospectus
will not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the opinion of such counsel, at any
such time to amend the Registration Statement or amend or supplement the
Prospectus in order to comply with the requirements of the 1933 Act or the 1933
Act Regulations, the Company will promptly prepare and file with the Commission,
subject to Section 3(b), such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to the
Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request, except that the cost thereof shall be borne
by the Underwriters if such event or condition occurs more than 90 days after
the effective date of the Registration Statement.
(f) Blue Sky Qualifications. The Company will use its reasonable best
efforts, in cooperation with the Underwriters, to qualify the Shares for
offering and sale under the applicable securities laws of such states and other
jurisdictions (domestic or foreign) as the Representatives may designate;
provided, however, that the Company shall not be obligated to file any general
consent to service of process or to qualify as a foreign corporation or as a
dealer in securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject. In each jurisdiction in which the Shares
have been so qualified, the Company will file such statements and reports as may
be required by the laws of such jurisdiction to continue such qualification in
effect for a period of time as may be necessary to complete the distribution of
the Shares.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by
it from the sale of the Shares in the manner specified in the Prospectus under
"Use of Proceeds".
(i) Financial Statements. The Company will furnish to the
Representatives as early as practicable prior to the Closing Time and any Date
of Delivery, but not later than two business days prior thereto, a copy of the
latest available unaudited interim and monthly consolidated financial
statements, if any, of the Company and its subsidiaries which have been read by
the Company's independent certified public accountants, as stated in their
letter to be furnished pursuant to Section 5(f) hereof.
(j) Restriction on Sale of Shares. Unless otherwise agreed to by
SunTrust, during the period ending 180 days after the date the final Prospectus
is filed with the Commission pursuant
-18-
to Rule 424(b) of the 1933 Act or, if no filing under Rule 424(b) is made, the
date of the final Prospectus included in the Registration Statement when
declared effective under the 1933 Act (the "RESTRICTED PERIOD"), the Company
will not, without the prior written consent of SunTrust, on behalf of the
Underwriters, directly or indirectly, (i) offer, sell, offer to sell, contract
to sell, hedge, pledge, grant any option to purchase or otherwise transfer or
dispose (or announce any offer, sale, offer of sale, contract of sale, hedge,
pledge, grant of any option to purchase or other transfer or disposition) of any
shares of Common Stock or any other securities convertible into, or exercisable
or exchangeable for, shares of Common Stock, (ii) file any registration
statement under the 1933 Act with respect to any of the foregoing or (iii) enter
into any swap or other agreement or any transaction that transfers, in whole or
in part, directly or indirectly, the economic consequence of ownership of the
Common Stock, or any other securities convertible into, or exercisable or
exchangeable for, shares of Common Stock, whether any such swap or transaction
is to be settled by delivery of Common Stock, or any other securities
convertible into, or exercisable or exchangeable for, shares of Common Stock, in
cash or otherwise. The foregoing shall not apply to (A) the Shares to be sold
hereunder or (B) any options or shares of Common Stock issued or rights to
purchase Common Stock or restricted shares granted pursuant to the terms of
existing employee or non-employee director benefit plans of the Company, in each
case as referred to in the Prospectus. In the event that:
(i) during the last 17 days of the Restricted Period, the
Company issues an earnings release or announces
material news or a material event relating to the
Company; or
(ii) prior to the expiration of the Restricted Period, the
Company announces that it will release earnings
results during the 16-day period beginning on the
last day of the Restricted Period,
the restrictions imposed by this Section 3(j) shall continue to apply until the
expiration of the 18-day period beginning on the date of the issuance of the
earnings release or the announcement of the material news or material event, as
applicable.
(k) Nasdaq National Market. The Company will use its reasonable best
efforts to effect and maintain the quotation of the Shares on the Nasdaq
National Market.
(l) Maintenance of Transfer Agent. The Company will maintain a transfer
agent and, if necessary under the jurisdiction of incorporation of the Company,
a registrar (which may be the same entity as the transfer agent) for its Common
Stock.
(m) Rule 463. The Company will file timely and accurate information
with the Commission in accordance with Rule 463 of the 1933 Act Regulations or
any successor provision.
(n) Reporting Requirements. The Company, during the period when the
Prospectus is required to be delivered under the 1933 Act, will file all
documents required to be filed with the Commission pursuant to the 1934 Act
within the time periods required by the 1934 Act and the rules and regulations
of the Commission thereunder.
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(o) Additional Reports. During a period of three years from the date
hereof, the Company will furnish to the Representatives, promptly upon request:
(i) copies of any reports or other communications which the Company shall send
to stockholders or shall from time to time publish or publicly disseminate; (ii)
copies of all annual, quarterly and current reports filed with the Commission on
Forms 10-K, 10-Q and 8-K, or such other similar forms as may be designated by
the Commission; (iii) copies of documents or reports filed with NASDAQ and any
national securities exchange on which any class of securities of the Company is
listed; and (iv) such other information as the Representatives may reasonably
request regarding the Company or its subsidiaries.
(p) Compliance with NASD Rules. The Company will ensure that the
Reserved Shares will be restricted as required by the NASD or the NASD rules
from sale, transfer, assignment, pledge or hypothecation for a period of three
months following the date of this Agreement. The Underwriters will notify the
Company as to which persons will need to be so restricted. At the request of the
Underwriters, the Company will direct the transfer agent to place a stop
transfer restriction upon such securities for such period of time. Should the
Company release, or seek to release, from such restrictions any of the Reserved
Shares, the Company agrees to reimburse the Underwriters for any reasonable
expenses (including, without limitation, legal expenses) they incur in
connection with such release.
(q) Additional Compliance. The Company will take all reasonable efforts
to remain in compliance in all material respects with all applicable provisions
of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act and the Nasdaq Rules as in effect from time to time.
(r) Internal Accounting Controls. The Company and its subsidiaries have
in place and will use reasonable efforts to maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed with management's general or specific authorizations,
(ii) transactions are recorded as necessary (A) to permit preparation of the
Company's financial statements in conformity with GAAP and any other criteria
applicable to such statements and (B) to maintain accountability for assets,
(iii) access to assets is permitted only in accordance with management's general
or specific authorizations and (iv) the recorded accountability of the assets of
the Company and its subsidiaries is compared with existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
(s) Undertakings. The Company will comply with all of the provisions of
any undertakings in the Registration Statement.
Section 4. Payment of Expenses
(a) Expenses. The Company will pay or cause to be paid and bear all
costs, fees and expenses incident to the performance of its obligations under
this Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits), as
originally filed and as amended, the preliminary prospectuses and the Prospectus
and any amendments or supplements thereto, and the cost of furnishing copies
thereof to the Underwriters; (ii) the preparation, printing and distribution to
the Underwriters of this Agreement, any agreement among the underwriters and
such other documents as may be required in connection with the offering,
purchase, sale, issuance or delivery of the Shares; (iii)
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the issuance and delivery of the certificates for the Shares to the
Underwriters, including any transfer taxes and any stamp or other duties payable
upon the sale of the Shares to the Underwriters (other than transfer taxes on
resales by the Underwriters); (iv) the fees and disbursements of the Company's
counsel, accountants and other advisors; (v) the qualification of the Shares
under the applicable securities laws in accordance with Section 3(f) hereof,
including any filing for review of the offering with the NASD, including filing
fees and reasonable fees and disbursements of counsel for the Underwriters in
connection therewith; (vi) the printing and delivery to the Underwriters of
copies of each preliminary prospectus and the Prospectus and any amendments or
supplements thereto; (vii) the preparation of a blue sky survey and any
supplement thereto including any reasonable fees and disbursements of counsel
for the Underwriters in connection therewith; (viii) the fees and expenses of
any transfer agent or registrar for the Shares; (ix) the costs and expenses of
the Company relating to investor presentations on any "road show" undertaken in
connection with the marketing of the Shares, including without limitation,
expenses associated with the production of road show slides and graphics, fees
and expenses of any consultants engaged in connection with the road show
presentations, reasonable travel and lodging expenses of the representatives and
officers of the Company and any such consultants, and the cost of aircraft and
other transportation chartered, with the Company's prior approval, in connection
with the road show; (x) the fees and expenses incurred in connection with
inclusion of the Shares in the Nasdaq National Market; and (xi) all reasonable
costs and expenses of the Underwriters, including the reasonable fees and
disbursements of counsel for the Underwriters, in connection with matters
related to the Reserved Shares which are designated by the Company for sale to
Invitees.
(b) Termination of Agreement. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5 or Section 8(b)
hereof:
(i) prior to the purchase of the Firm Shares, the Company
shall reimburse the Underwriters for all of their
reasonable out-of-pocket expenses, including the
reasonable fees and expenses of counsel for the
Underwriters; provided, however, if this agreement is
terminated pursuant to Section 5(g), the Company
shall reimburse the Underwriters for 50% of their
reasonable out-of-pocket expenses, including the
reasonable fees and expenses of counsel for the
Underwriters; or
(ii) after the purchase of the Firm Shares and prior to
the purchase of any Option Shares, the Company shall
reimburse the Underwriters for all of their
reasonable out-of-pocket expenses incurred after the
purchase of the Firm Shares, including the reasonable
fees and expenses of counsel for the Underwriters;
provided, however, if this agreement is terminated
pursuant to Section 5(g), the Company shall reimburse
the Underwriters for 50% of such reasonable
out-of-pocket expenses, including the reasonable fees
and expenses of counsel for the Underwriters.
Section 5. Conditions of Underwriters' Obligations. The obligations of
the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any executive officer of the Company or any subsidiary of the
Company delivered pursuant to the provisions hereof, to the
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performance by the Company of its covenants and other obligations hereunder, and
to the following further conditions:
(a) Effectiveness of Registration Statement. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time, no stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission, and any request on the part
of the Commission for additional information shall have been complied with to
the reasonable satisfaction of counsel to the Underwriters. A prospectus
containing the Rule 430A Information shall have been filed with the Commission
in accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with the
requirements of Rule 430A).
(b) Opinion of Counsel for the Company. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of:
(i) ▇▇▇▇▇ & Lardner LLP, counsel for the Company, in form
and substance reasonably satisfactory to counsel for
the Underwriters, together with signed or reproduced
copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit B
hereto;
(ii) ▇▇▇▇, Klein, Umphrey, ▇▇▇▇▇▇▇▇ & May, P.C., as
counsel for the Company, in form and substance
reasonably satisfactory to counsel for the
Underwriters, together with signed or reproduced
copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit C
hereto; and
(iii) ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Assistant General Counsel (the
acting chief legal officer) of the Company, in form
and substance reasonably satisfactory to counsel for
the Underwriters, together with signed or reproduced
copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit D
hereto.
(c) Opinion of Counsel for the Underwriters. At Closing Time, the
Representatives shall have received the favorable opinion, dated as of Closing
Time, of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the other
Underwriters in a form and substance reasonably satisfactory to the
Underwriters.
(d) Registration Statement; Capitalization; Absence of Proceedings;
Certificates. As of each Closing Date,
(i) the Registration Statement, any 462(b) Registration
Statement, and the Prospectus, as they may then be
amended or supplemented, shall contain all statements
that are required to be stated therein under the 1933
Act and the 1933 Act Regulations and in all respects
shall conform to the requirements of the 1933 Act and
the 1933 Act Regulations, the Company shall have
complied in all respects with Rules 424(b), 430A and
462 under the 1933 Act and neither the Registration
Statement, any 462(b)
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Registration Statement nor the Prospectus, as they
may then be amended or supplemented, shall contain an
untrue statement of a material fact or omit to state
a material fact required to be stated therein or
necessary to make the statements therein, in light of
the circumstances under which they were made, not
misleading;
(ii) there shall not have been any change in the capital
stock or long-term debt of the Company or any
subsidiary or any change, or any development
involving a prospective change, in or affecting the
business, general affairs, management, condition
(financial or otherwise), stockholders' equity,
results of operations, properties or prospects of the
Company and its subsidiaries, otherwise than as set
forth in the Prospectus, the effect of which is, in
the Representatives' reasonable judgment, so material
and adverse as to make it impracticable or
inadvisable to proceed with the completion of the
public offering or the sale of or payment for the
Shares;
(iii) no action, suit or proceeding at law or in equity
before or by any federal, state or other commission,
court, board or administrative agency shall be
pending or, to the Knowledge of the Company,
threatened against the Company or any of its
subsidiaries that would be required to be set forth
in the Prospectus, other than as set forth therein,
wherein an unfavorable decision, ruling or finding is
not remote and would have a Material Adverse Effect;
(iv) all agreements herein to be performed by the Company
on or prior to such Closing Date have been duly
performed in all material respects;
(v) the representations and warranties of the Company set
forth in Section 1 shall be accurate in all respects
as though expressly made at and as of such Closing
Date. The Representatives shall have received
certificates, dated as of such Closing Date, executed
on behalf of the Company by the Chief Executive
Officer and the Chief Financial Officer of the
Company to such effect and with respect to the
following additional matters:
(A) the Registration Statement has become effective
under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or preventing or
suspending the use of the Prospectus has been issued, and no
proceedings for that purpose have been instituted or are
pending or, to the best of their knowledge, threatened under
the 1933 Act or the 1933 Act Regulations;
(B) they have carefully reviewed the Registration
Statement, any 462(b) Registration Statement and the
Prospectus and when the Registration Statement and any 462(b)
Registration Statement became effective and at all times
subsequent thereto up to the delivery of such certificate, the
Registration Statement, any 462(b) Registration Statement and
the Prospectus and any amendments or supplements thereto
contained all statements and information required to be
included therein or necessary to make the statements therein
in
-23-
light of the circumstances in which they were made, not
misleading and neither the Registration Statement, any 462(b)
Registration Statement, the Prospectus nor any amendment or
supplement thereto included any untrue statement of a material
fact or omitted to state any material fact required to be
stated therein or necessary in order to make the statements
therein not misleading, and, since the effective date of the
Registration Statement, there has occurred no event required
to be set forth in an amended or supplemented Prospectus that
has not been so set forth; and
(C) all agreements herein to be performed by the
Company on or prior to such Closing Date have been duly
performed in all material respects.
(e) Accountant's Comfort Letter. At the time of the execution of this
Agreement, the Representatives shall have received from PricewaterhouseCoopers
LLP a letter dated such date, in form and substance reasonably satisfactory to
the Representatives, together with signed or reproduced copies of such letter
for each of the other Underwriters, containing statements and information of the
type ordinarily included in accountants' "comfort letters" to underwriters with
respect to the financial statements and certain financial information contained
in the Registration Statement and the Prospectus.
(f) Bring-down Comfort Letter. At Closing Time, the Representatives
shall have received from PricewaterhouseCoopers LLP a letter, dated as of
Closing Time, to the effect that they reaffirm the statements made in the letter
furnished pursuant to subsection (e) of this Section, except that the specified
date referred to shall be a date not more than three business days prior to
Closing Time.
(g) Absence of Certain Events. Subsequent to the execution and delivery
of this Agreement, there shall not have occurred any of the following: (i)
trading in securities generally on the New York Stock Exchange or the Nasdaq
Stock Market or in the over-the-counter market, shall have been suspended or the
settlement of such trading generally shall have been materially disrupted or
minimum prices shall have been established on any such exchange or such market
by the Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction, (ii) a banking moratorium shall have
been declared by federal or state authorities, (iii) the United States shall
have become engaged in any new hostilities, there shall have been a material
escalation in any existing hostilities involving the United States or there
shall have been a declaration of a national emergency or war by the United
States, (iv) there shall have occurred such a material adverse change in general
economic, political or financial conditions, including without limitation as a
result of terrorist activities after the date hereof, or the effect of
international conditions on the financial markets in the United States shall be
such as to make it, in the Representatives' reasonable judgment, impracticable
or inadvisable to proceed with the completion of the public offering or the sale
of or payment for the Shares, (v) any downgrade of the rating accorded to the
financial strength or claims paying ability of the Company or any of the
Insurance Subsidiaries by A.M. Best or any other "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the ▇▇▇▇ ▇▇▇) and no such organization shall have publicly announced that is has
under surveillance or review, with possible negative implications, its rating of
the financial strength or claims paying ability of the Company or any of the
Insurance Subsidiaries, or (vi) any federal or state statute, regulation, rule
-24-
or order of any court or other governmental authority has been enacted,
published, decreed or otherwise promulgated which, in the reasonable opinion of
the Representatives, materially adversely affects or will materially adversely
affect the business or operations of the Company.
(h) Additional Documents. As of such Closing Date, counsel for the
Underwriters shall have been furnished with all such documents, certificates and
opinions as they may reasonably request for the purpose of enabling them to pass
upon the issuance and sale of the Shares as contemplated in this Agreement and
the matters referred to in Section 5(c) and in order to evidence the accuracy
and completeness of any of the representations and warranties or statements of
the Company, the performance of any of the covenants of the Company, or the
fulfillment of any of the conditions herein contained; and all proceedings taken
by the Company at or prior to such Closing Date in connection with the
authorization, issuance and sale of the Shares as contemplated in this Agreement
shall be reasonably satisfactory in form and substance to the Representatives
and to counsel for the Underwriters. The Company will furnish the
Representatives with such number of conformed copies of such opinion,
certificates, letters and documents, as the Representatives shall reasonably
request.
(i) The NASD. The NASD, upon review of the terms of the public offering
of the Shares, shall not have objected to such offering, such terms or the
Underwriters' participation in the same.
(j) Nasdaq National Market. At Closing Time, the Shares shall have been
approved for inclusion in the Nasdaq National Market, subject only to official
notice of issuance.
(k) Lock-Up Agreements. At the date of this Agreement, the
Representatives shall have received an agreement in the form of Exhibit A hereto
signed by the persons listed on Schedule III hereto.
(l) Conditions to Purchase Option Shares. In the event that the
Underwriters exercise their option provided in Section 2(b) hereof to purchase
all or any portion of the Option Shares, (i) the representations and warranties
of the Company contained herein and the statements in any certificates furnished
by the Company or any subsidiary of the Company hereunder shall be true and
correct as of each Date of Delivery, (ii) none of the events described in
Section 5(g) shall have occurred as of or prior to the relevant Date of
Delivery, and (iii) at the relevant Date of Delivery, the Representatives shall
have received:
(A) Officer's Certificate. A certificate, dated such Date of
Delivery, executed on behalf of the Company by the Chief Executive
Officer and the Chief Financial Officer of the Company confirming that
the certificate delivered at the Closing Time pursuant to Section
5(d)(v) hereof remains true and correct as of such Date of Delivery.
(B) Opinion of Counsel for the Company. The favorable opinion
of ▇▇▇▇▇ & Lardner LLP, counsel for the Company, in form and substance
reasonably satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Shares to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
-25-
(C) Opinion of Counsel for the Underwriters. The favorable
opinion of Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, counsel for the
Underwriters, dated such Date of Delivery, relating to the Option
Shares to be purchased on such Date of Delivery and otherwise to the
same effect as the opinion required by Section 5(c) hereof.
(D) Bring-down Comfort Letter. A letter from
PricewaterhouseCoopers LLP, in form and substance reasonably
satisfactory to the Representatives and dated such Date of Delivery,
substantially in the same form and substance as the letter furnished to
the Representatives pursuant to Section 5(f) hereof, except that the
"specified date" in the letter furnished pursuant to this paragraph
shall be a date not more than five days prior to such Date of Delivery.
If any condition specified in this Section 5 shall not have been
fulfilled when and as required to be fulfilled, this Agreement, or, in the case
of any condition to the purchase of Option Shares, on a Date of Delivery which
is after the Closing Time, the obligations of the several Underwriters to
purchase the relevant Option Shares, may be terminated by the Representatives by
notice to the Company at any time at or prior to Closing Time or such Date of
Delivery, as the case may be, and such termination shall be without liability of
any party to any other party except as provided in Section 4 and except that
Sections 6 and 8 shall survive any such termination and remain in full force and
effect and if any Shares have been purchased hereunder, all obligations under
Section 3 shall also remain in effect.
Section 6. Indemnification and Contribution.
(a) Indemnification of the Underwriters. The Company agrees to
indemnify and hold harmless each Underwriter, its affiliates, as such term is
defined in Rule 501(b) under the 1933 Act (each, an "AFFILIATE"), its selling
agents and each person, if any, who controls any Underwriter within the meaning
of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of
any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement
(or any amendment thereto), including the Rule 430A
Information or the omission or alleged omission
therefrom of a material fact required to be stated
therein or necessary to make the statements therein
not misleading or arising out of any untrue statement
or alleged untrue statement of a material fact
included in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto),
or the omission or alleged omission therefrom of a
material fact necessary in order to make the
statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of
the aggregate amount paid in settlement of any
litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened,
or of any claim whatsoever based
-26-
upon any such untrue statement or omission, or any
such alleged untrue statement or omission; provided
that (subject to Section 6(d) below) any such
settlement is effected with the written consent of
the Company;
(iii) against any and all reasonable expense whatsoever, as
incurred (including the fees and disbursements of
counsel chosen by SunTrust), incurred in
investigating, preparing or defending against any
litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened,
or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue
statement or omission, to the extent that any such
expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through SunTrust expressly for use in the Registration Statement (or
any amendment thereto), including the Rule 430A Information or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto); provided,
further, that this indemnity agreement shall not apply to any loss, liability.
claim, damage, or expense to the extent arising out of any untrue statement or
omission or alleged untrue statement or omission in any Preliminary Prospectus
or the Prospectus if the Company shall have furnished any Prospectus or
amendment or supplement thereto correcting such misstatement or omission to any
Underwriter that is not furnished to purchaser of Shares claiming such loss,
liability, claim, damage or expense.
(b) Indemnification of the Company, Directors and Officers. Each
Underwriter severally agrees to indemnify and hold harmless the Company, its
directors, each of its officers who signed the Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto), including the Rule 430A Information or any
preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through SunTrust expressly for use in the
Registration Statement (or any amendment thereto) or such preliminary prospectus
or the Prospectus (or any amendment or supplement thereto), it being understood
and agreed that the only such information furnished by any Underwriter consists
of: (i) the concession and reallowance figures appearing in the second paragraph
under the caption "Underwriting", (ii) the information contained in the fifth
paragraph and the second sentence of the sixth paragraph under the caption
"Underwriting" and (iii) the information contained in the first two paragraphs
under the caption "Underwriting -- Stabilization, Short Positions and Penalty
Bids."
(c) Action Against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an
-27-
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Section 6(a) above, counsel to the indemnified parties shall be
selected by SunTrust, and, in the case of parties indemnified pursuant to
Section 6(b) above, counsel to the indemnified parties shall be selected by the
Company. An indemnifying party may participate at its own expense in the defense
of any such action; provided, however, that counsel to the indemnifying party
shall not (except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying parties be liable for
fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the indemnified
parties, settle or compromise or consent to the entry of any judgment with
respect to any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever in
respect of which indemnification or contribution could be sought under this
Section 6 (whether or not the indemnified parties are actual or potential
parties thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim 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 any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time
an indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel that are indemnifiable
hereunder, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 6(a)(ii) or settlement of any
claim in connection with any violation referred to in Section 6(e) effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
(e) Indemnification for Reserved Shares. In connection with the offer
and sale of the Reserved Shares, the Company agrees, to indemnify and hold
harmless the Underwriters, their Affiliates and selling agents and each person,
if any, who controls any Underwriter within the meaning of either Section 15 of
the 1933 Act or Section 20 of the 1934 Act, from and against any and all loss,
liability, claim, damage and expense (including, without limitation, any legal
or other expenses reasonably incurred in connection with defending,
investigating or settling any such action or claim), as incurred, (i) arising
out of the violation of any applicable laws or regulations of foreign
jurisdictions where Reserved Shares have been offered; (ii) arising out of any
untrue statement or alleged untrue statement of a material fact contained in any
prospectus wrapper or other material prepared by or with the consent of the
Company for distribution to Invitees in connection with the offering of the
Reserved Shares 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; (iii) caused by the failure of any Invitee to pay for
and accept delivery of Reserved Shares which have been orally confirmed for
purchase by any
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Invitee by the end of the first business day after the date of the Agreement; or
(iv) related to, or arising out of or in connection with, the offering of the
Reserved Shares.
(f) Contribution. If the indemnification provided for in this Section 6
is for any reason unavailable to or insufficient to hold harmless an indemnified
party in respect of any losses, liabilities, claims, damages or expenses
referred to therein, then each indemnifying party shall contribute to the
aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Underwriters on the other hand from the offering of the Shares
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions, or in connection with
any violation of the nature referred to in Section 6(e) hereof, which resulted
in such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the Shares
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Shares pursuant
to this Agreement (before deducting expenses) received by the Company and the
total underwriting discount received by the Underwriters, in each case as set
forth on the cover of the Prospectus, bear to the aggregate initial public
offering price of the Shares as set forth on the cover of the Prospectus.
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission or any violation of the nature referred to in Section 6(e)
hereof.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 6(f) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 6(f). The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 6(f) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 6(f), 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 any 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 ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 6(f), each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act and each Underwriter's Affiliates and selling agents shall have the
same rights to contribution as such Underwriter, and each director of the
Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. The Underwriters' respective obligations to
contribute pursuant to this Section 6(f) are several in proportion to the number
of Firm Shares set forth opposite their respective names in Schedule I hereto
and not joint.
Section 7. Representations and Agreements to Survive Delivery. The
representations, warranties, indemnities, agreements and other statements of the
Company set forth in this Agreement or in any certificates of officers of the
Company or any of its subsidiaries delivered pursuant hereto will remain
operative and in full force and effect regardless of any investigation made by
or on behalf of the Company, any Underwriter or any representative, officer,
director or any controlling person with respect to an Underwriter or the
Company, and will survive delivery of and payment for the Shares.
Section 8. Effective Date of Agreement and Termination.
(a) Effective Date. This Agreement shall become effective upon the
later of (i) the execution and delivery hereof by the parties hereto and (ii)
release of notification of the effectiveness of the Registration Statement by
the Commission, provided, however, that the provisions of Section 6 shall at all
times be effective.
(b) Termination. The Representatives may terminate this Agreement by
notice to the Company at any time at or prior to the Closing Date in accordance
with the final paragraph of Section 5 of this Agreement.
(c) Survival of Provisions. If this Agreement is terminated pursuant to
this Section 8, such termination shall be without liability of any party to any
other party except as provided in Section 4 and, that, notwithstanding any such
termination, the provisions of Sections 6 and 8 shall remain in effect, and (ii)
if any Shares have been purchased hereunder, all obligations under Section 3
shall also remain in effect.
Section 9. Default by One or More of the Underwriters.
(a) Purchase of Defaulted Shares. If one or more of the Underwriters
shall fail at Closing Time or a Date of Delivery to purchase the Shares which it
or they are obligated to purchase under this Agreement (the "DEFAULTED Shares"),
the Representatives shall have the right, within 36 hours thereafter, to make
arrangements for one or more of the non-defaulting
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Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Shares in such amounts as may be agreed upon and upon the terms
herein set forth; if, however, the Representatives shall not have completed such
arrangements within such 36 hour period, then:
(i) if the number of Defaulted Shares does not exceed 10%
of the number of Shares to be purchased on such date,
each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the
full amount thereof in the proportions that their
respective underwriting obligations hereunder bear to
the underwriting obligations of all non-defaulting
Underwriters; or
(ii) if the number of Defaulted Shares exceeds 10% of the
number of Shares to be purchased on such date, this
Agreement or, with respect to any Date of Delivery
which occurs after the Closing Time, the obligation
of the Underwriters to purchase and of the Company to
sell the Option Shares to be purchased and sold on
such Date of Delivery shall terminate without
liability on the part of any non-defaulting
Underwriter.
No action taken pursuant to this Section 9 shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement or, in the case of a Date of Delivery which is after the
Closing Time, which does not result in a termination of the obligation of the
Underwriters to purchase and the Company to sell the relevant Option Shares, as
the case may be, either the Representatives or the Company shall have the right
to postpone Closing Time or the relevant Date of Delivery, as the case may be,
for a period not exceeding seven days in order to effect any required changes in
the Registration Statement or Prospectus or in any other documents or
arrangements. As used herein, the term "UNDERWRITER" includes any person
substituted for an Underwriter under this Section 9.
Section 10. Default by the Company. If the Company shall fail at the
Closing Time to sell and deliver the respective aggregate number of Firm Shares
that they are obligated to sell, then this Agreement shall terminate without any
liability on the part of any non-defaulting party, except to the extent provided
in Section 4 and except that the provisions of Section 6 shall remain in effect.
No action taken pursuant to this Section shall relieve the Company from
liability, if any, in respect of its default.
Section 11. Notices. All notices and other communications under this
Agreement shall be in writing and shall be deemed to have been duly given if
mailed, delivered or transmitted by any standard form of telecommunication.
Notices to the Underwriters shall be directed c/o SunTrust ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇, with a
copy to Sidley ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇, LLP, ▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇ and notices to the Company shall be
directed to North Pointe Holdings Corporation, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: [___________], with a copy to ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
-▇▇-
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇. Each notice
hereunder shall be effective upon receipt by the party to which it is addressed.
Section 12. Parties. This Agreement shall inure to the benefit of and
be binding upon the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Section 6 and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision herein contained. This Agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Underwriters and the Company and their respective
successors, and said controlling persons and officers and directors and their
heirs and legal representatives, and for the benefit of no other person, firm or
corporation. No purchaser of Shares from any Underwriter shall be deemed to be a
successor by reason merely of such purchase.
Section 13. Governing Law and Time. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York.
Specified time of the day refers to United States Eastern Time, unless otherwise
specified.
Section 14. Headings. Section headings used herein are for convenience
of reference only and shall not govern the interpretation of any provision of
this Agreement.
Section 15. Counterparts. This Agreement may be executed in any number
of counterparts and when a counterpart has been executed by each party, all such
counterparts taken together shall constitute one and the same agreement. A
facsimile signature shall constitute an original signature for all purposes.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument will become a binding agreement among the Company and the several
Underwriters in accordance with its terms.
Very truly yours,
NORTH POINTE HOLDINGS
CORPORATION
By:
-------------------------------
Confirmed and accepted in Atlanta, Georgia, as of the date first above written,
as Representatives of the Underwriters named in Schedule I hereto.
SunTrust Capital Markets, Inc.
Sandler ▇'▇▇▇▇▇ & Partners
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company
By: SUNTRUST CAPITAL MARKETS, INC.
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
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SCHEDULE I
Name Number of Shares
---- ----------------
SunTrust Capital Markets, Inc........................................................... [_________]
Sandler ▇'▇▇▇▇▇ & Partners, L.P......................................................... [_________]
▇▇▇▇▇▇▇ ▇▇▇▇▇ & Company L.L.C........................................................... [_________]
Total................................................................................... [_________]
SCHEDULE I
SCHEDULE II
NORTH POINTE HOLDINGS CORPORATION
[______] Shares of Common Stock
(No Par Value Per Share)
1. The initial public offering price per share for the Shares,
determined as provided in said Section 2, shall be $-.
2. The purchase price per share for the Shares to be paid by the
several Underwriters shall be $-, being an amount equal to the initial public
offering price set forth above less $- per share; provided that the purchase
price per share for any Option Shares purchased upon the exercise of the
overallotment option described in Section 2(b) shall be reduced by an amount per
share equal to any dividends or distributions declared by the Company and
payable on the Firm Shares but not payable on the Option Shares.
SCHEDULE III
LIST OF PERSONS AND ENTITIES SUBJECT TO LOCK-UP
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EXHIBIT A
FORM OF LOCK-UP AGREEMENT
EXHIBIT B
FORM OF COMPANY'S COUNSEL OPINION TO BE
DELIVERED IN CONNECTION
WITH SECTION 5(b)(i)
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State
of Michigan.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and to conduct its business as
described in the Prospectus under the caption "Business," and
to enter into and perform its obligations under the
Underwriting Agreement.
(iii) The Shares have been duly authorized for issuance and sale to
the Underwriters pursuant to the
Underwriting Agreement and,
when issued and delivered by the Company pursuant to the
Underwriting Agreement against payment of the consideration
set forth in the
Underwriting Agreement, will be validly
issued and fully paid and non-assessable.
(iv) The capital stock of the Company conforms as to legal matters
to the description thereof contained in the Prospectus under
the caption "Description of Common Stock."
(v) The
Underwriting Agreement has been duly authorized, executed
and delivered by the Company.
(vi) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the
1933 Act; the Prospectus was filed on ________, __ 2005
pursuant to Rule 424(b) in the manner and within the time
period required by Rule 424(b); and, to the best of our
knowledge, no stop order suspending the effectiveness of the
Registration Statement of any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are
pending or threatened by the Commission.
(vii) The Registration Statement, including any Rule 462(b)
Registration Statement and the Rule 430A Information, the
Prospectus and each amendment or supplement to the
Registration Statement and Prospectus as of their respective
effective or issue dates (other than the financial statements
and supporting schedules included therein or omitted
therefrom, as to which we express no opinion) comply as to
form in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations.
(viii) The form of certificate used to evidence the Shares complies
in all material respects with all applicable statutory
requirements, with any
applicable requirements of the charter and bylaws of the
Company and the requirements of the Nasdaq National Market.
(ix) The information in the Prospectus under "Description of
Capital Stock - Common Stock," "Description of Capital Stock -
Preferred Stock," "Description of Capital Stock -
Anti-Takeover Effects of Governing Instruments and State Law,"
"Business - Regulatory Environment," "Business - Legal
Proceedings," "Business - Property" and "Indemnification of
Directors and Officers" in the Registration Statement under
Item 14, to the extent that it constitutes matters of law,
summaries of legal matters, the certificates of incorporation
and the bylaws (or similar corporate documents) of the Company
and each of its subsidiaries or legal proceedings, or legal
conclusions, has been reviewed by us and is correct in all
material aspects.
(x) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or
governmental authority or agency, domestic or foreign (other
than under the 1933 Act and the 1933 Act Regulations, which
have been obtained, or as may be required under the securities
or blue sky laws of the various states, as to which we need
express no opinion) is necessary or required in connection
with the due authorization, execution and delivery of the
Underwriting Agreement or for the offering, issuance, sale or
delivery of the Shares.
(xi) The execution, delivery and performance of the
Underwriting
Agreement and the consummation of the transactions
contemplated in the
Underwriting Agreement and in the
Registration Statement (including the issuance and sale of the
Shares and the use of the proceeds from the sale of the Shares
as described in the Prospectus under the caption "Use Of
Proceeds") and compliance by the Company with its obligations
under the
Underwriting Agreement do not and will not, whether
with or without the giving of notice or lapse of time or both,
conflict with or constitute a breach of, or default or
Repayment Event (as defined in Section 1(i) of the
Underwriting Agreement) under or result in the creation or
imposition of any lien, charge or encumbrance upon any
property or assets of the Company or any Subsidiary pursuant
to any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or
instrument, known to us, to which the Company or any
Subsidiary is a party or by which it or any of them may be
bound, or to which any of the property or assets of the
Company or any Subsidiary is subject (except for such
conflicts, breaches, defaults or Repayment Events or liens,
charges or encumbrances that would not have a Material Adverse
Effect), nor will such action result in any violation of the
provisions of the charter or bylaws of the Company or any
Subsidiary, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to us, of any
government, government instrumentality or court, domestic or
foreign,
-2-
having jurisdiction over the Company or any Subsidiary or any
of their respective properties, assets or operations.
(xii) The descriptions in the Registration Statement and Prospectus
of contracts and other documents included as exhibits to the
Registration Statement, insofar as such statements constitute
summaries of such documents, are correct in all material
respects and are fair summaries of such documents, and we do
not know of any documents required to be described in the
Prospectus or included as exhibits to the Registration
Statement that are not described or included as required.
(xiii) The Company is not required, and upon the issuance and sale of
the Shares as herein contemplated and the application of the
net proceeds therefrom as described in the Prospectus will not
be required, to register as an "investment company" under the
1940 Act.
Nothing has come to our attention that would lead us to believe that
the Registration Statement or any amendment thereto, including the Rule 430A
Information (except for financial statements and schedules and other financial
data included therein or omitted therefrom, as to which we express no
assurance), at the time such Registration Statement or any such amendment became
effective, contained an 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 or that the Prospectus or any amendment or
supplement thereto (except for financial statements and schedules and other
financial data included therein or omitted therefrom, as to which we express no
assurance), at the time the Prospectus was issued, at the time any such amended
or supplemented prospectus was issued or at the Closing Time, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
In rendering such opinions, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
-3-
EXHIBIT C
FORM OF COMPANY'S COUNSEL OPINION TO BE
DELIVERED IN CONNECTION
WITH SECTION 5(b)(ii)
(i) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus in the column
entitled "Actual" under the caption "Capitalization" (except
for subsequent issuances, if any, pursuant to the Underwriting
Agreement or pursuant to reservations, agreements or employee
benefit plans referred to in the Prospectus or pursuant to the
exercise of convertible securities or options referred to in
the Prospectus); the shares of issued and outstanding capital
stock of the Company have been duly authorized and validly
issued and are fully paid and non-assessable; and none of the
outstanding shares of capital stock of the Company was issued
in violation of the preemptive or other similar rights of any
securityholder of the Company.
(ii) The issuance of the Shares is not subject to preemptive or
other similar rights of any securityholder of the Company.
(iii) To the best of our knowledge, there are no persons with
registration rights or other similar rights to have any
securities registered pursuant to the Registration Statement
or otherwise registered by the Company under the 1933 Act.
In rendering such opinions, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
EXHIBIT D
FORM OF COMPANY'S COUNSEL OPINION TO BE
DELIVERED IN CONNECTION
WITH SECTION 5(b)(iii)
(i) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction
in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of
business, except where the failure to so qualify or to be in
good standing would not result in a Material Adverse Effect.
(ii) Each subsidiary of the Company (i) whose total assets exceed
5% of the consolidated total assets of the Company; (ii) whose
total revenues exceed 5% of the consolidated total revenues of
the Company; or (iii) whose net income exceeds 5% of the
consolidated net income of the Company (in any such case, a
"Subsidiary") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of
the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to
conduct its business as described in the Prospectus and is
duly qualified as a foreign corporation to transact business
and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership
or leasing of property or the conduct of business, except
where the failure to so qualify or to be in good standing
would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, all of the
issued and outstanding capital stock of each Subsidiary has
been duly authorized and validly issued, is fully paid and
non-assessable and, to the best of my knowledge, is owned by
the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; none of the outstanding shares of capital
stock of any Subsidiary was issued in violation of the
preemptive or similar rights of any securityholder of such
Subsidiary.
(iii) To the best of my knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or
investigation, to which the Company or any Subsidiary is a
party, or to which the property of the Company or any
Subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which would
reasonably be expected to result in a Material Adverse Effect,
or which would reasonably be expected to materially and
adversely affect the properties or assets thereof or the
consummation of the transactions contemplated in the
Underwriting Agreement or the performance by the Company of
its obligations thereunder.
(iv) Each Subsidiary has the appropriate licenses or authorizations
to conduct its insurance business as described in the
Prospectus.
In rendering such opinions, such counsel may rely, as to matters of
fact (but not as to legal conclusions), to the extent they deem proper, on
certificates of responsible officers of the Company and public officials. Such
opinion shall not state that it is to be governed or qualified by, or that it is
otherwise subject to, any treatise, written policy or other document relating to
legal opinions, including, without limitation, the Legal Opinion Accord of the
ABA Section of Business Law (1991).
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