EXHIBIT 2
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▇▇▇▇▇/▇▇▇▇▇▇ HOLDINGS, INC.
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COMMON STOCK PURCHASE AGREEMENT
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DATED AS OF JUNE 7, 1999
1,000,000 SHARES OF COMMON STOCK
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TABLE OF CONTENTS
1. PURCHASE AND SALE OF COMMON STOCK ....................................................................1
1.01. Authorization of Common Stock................................................................1
1.02. Purchase Price and Closing...................................................................1
1.03. Use of Proceeds..............................................................................2
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................................................2
2.01. Organization. Standing and Power.............................................................2
2.02. Authority: Enforceability: No Conflict.......................................................2
2.03. Capitalization...............................................................................3
2.04. Status of Shares.............................................................................3
2.05. Financial Statements ........................................................................4
2.06. Liabilities..................................................................................4
2.07. Actions Pending..............................................................................4
2.08. Compliance with Law..........................................................................4
2.09. No Material Adverse Change...................................................................5
2.10. Certain Fees.................................................................................5
2.11. Disclosure...................................................................................5
2.12. Securities Act of 1933.......................................................................5
2.13. Governmental Approvals.......................................................................5
2.14. Absence of Certain Developments..............................................................6
2.15. Commission Reports...........................................................................6
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.......................................................7
3.01. Organization and Standing of the Purchaser...................................................7
3.02. Authority: Enforceability: No Conflict.......................................................7
3.03. Acquisition for Investment...................................................................7
3.04. Financing....................................................................................7
4. CONDITIONS TO CLOSING.................................................................................8
4.01. Conditions to Purchaser's Obligations to Closing.............................................8
4.02. Conditions to Company's Obligations to Closing...............................................9
5. DEFINITIONS...........................................................................................10
6. INDEMNIFICATION.......................................................................................12
6.01. General Indemnity............................................................................12
6.02. Indemnification Procedure....................................................................12
6.03. Indemnification Determinations...............................................................13
6.04. Indemnification Limitations..................................................................13
7. MISCELLANEOUS.........................................................................................13
7.01 No Waiver; Cumulative Remedies...............................................................13
7.02 Amendments, Waivers and Consents.............................................................13
7.03 Notices......................................................................................14
7.04 Costs, Expenses and Taxes....................................................................15
7.05 Binding Effect; Assignment...................................................................15
7.06 Survival of Representations and Warranties...................................................15
7.07 Prior Agreements.............................................................................15
7.08 Severability.................................................................................15
7.09 Governing Law................................................................................16
7.10 Headings.....................................................................................16
7.11 Counterparts.................................................................................16
7.12 Further Assurances...........................................................................16
7.13 Closing Condition Waivers....................................................................16
7.14 Specific Enforcement.........................................................................16
EXHIBITS
Exhibit A-1 Form of Opinion of Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
Exhibit A-2 Form of Opinion of ▇▇▇▇▇ ▇▇▇▇▇▇
Exhibit B Form of Registration Rights Agreement
Exhibit C Form of Director Designation Agreement
Exhibit D Form of Amendment No. 1 to Rights Agreement
▇▇▇▇▇/▇▇▇▇▇▇ HOLDINGS, INC.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Dated as of June 7, 1999
Conning Insurance Capital Limited Partnership V, L.P.
c/o Conning & Company
CityPlace II
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇/▇▇▇▇▇▇ HOLDINGS, INC., a Delaware corporation (the "Company"),
hereby agrees with you as follows:
1. PURCHASE AND SALE OF COMMON STOCK
1.01. Authorization of Common Stock. The Company has authorized the
issuance and sale of 1,000,000 shares (the "Shares") of its authorized but
unissued shares of common stock, $.01 par value (the "Common Stock"), having the
rights set forth in the Certificate of Incorporation of the Company.
1.02. Purchase Price and Closing. The Company agrees to issue and sell
to Conning Insurance Capital Limited Partnership V, L.P., a Delaware limited
partnership (the "Purchaser") and, in consideration of and in express reliance
upon the representations, warranties, terms and conditions of this Agreement,
the Purchaser agrees to purchase the Shares, at a purchase price of $17.00 per
share, for an aggregate purchase price of $17,000,000. Subject to the terms and
conditions contained herein, the closing of the purchase and sale of the Shares
to be acquired by the Purchaser from the Company under this Agreement (the
"Closing") shall take place at 10:00 a.m. on the earlier of (a) June 30, 1999
and (b) the date that is five (5) days after all of the Required Consents have
been obtained, or at such other time and date as the Purchaser and the Company
may agree (the "Closing Date") at the offices of LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇,
L.L.P., ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇. At the Closing, the
Company will deliver to the Purchaser certificates evidencing the Shares to be
purchased by the Purchaser hereunder, against delivery of a transfer of funds to
the account of the Company by wire transfer, representing the aggregate of the
purchase price to be paid for the Shares.
1.03. Use of Proceeds. The Company shall use the cash proceeds from the
sale of the Shares for general corporate purposes including, without limitation,
working capital and the financing of acquisitions.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as follows:
2.01. Organization, Standing and Power. Each of the Company and the
Subsidiary is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Each of the Company and the
Subsidiary has all requisite power and authority to own, lease and operate its
properties and assets and to conduct its business as now being conducted and is
duly qualified to do business and is in good standing in those foreign
jurisdictions in which such qualification is required except in those
jurisdictions where the failure to be so qualified or in good standing could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Except for the Company's ownership of all of the outstanding
stock of the Subsidiary, neither the Company nor the Subsidiary owns any capital
stock or other equity ownership interest in any Person.
2.02. Authority; Enforceability; No Conflict. The Company has all
requisite corporate power and authority to enter into this Agreement and each
Related Agreement, to issue and sell the Shares and to carry out its obligations
hereunder and under each Related Agreement. The execution, delivery and
performance of this Agreement and each Related Agreement and the issuance and
sale of the Shares by the Company have been duly and validly authorized by all
requisite corporate proceedings on the part of the Company. This Agreement and
each Related Agreement, when executed and delivered by the Company, is a valid
and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium, rehabilitation, liquidation,
conservatorship, receivership or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. The execution and delivery of this Agreement
and each Related Agreement does not, and the consummation by the Company of the
transactions contemplated hereby and thereby will not, result in or constitute:
(a) a default, breach or violation of or under the articles or certificate of
incorporation, bylaws or other organizational documents of the Company or the
Subsidiary, (b) a default, breach or violation of or under any mortgage, deed of
trust, indenture, note, bond, license, lease agreement or other instrument or
obligation to which the Company or the Subsidiary is a party or by which any of
their respective properties or assets are bound, except for any violations which
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect, (c) a violation of any statute, rule, regulation,
order, judgment or decree of any court, public body or authority by which the
Company or the Subsidiary or any of their respective properties or assets are
bound, except for any violations which could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect, (d) an
event which (with notice or lapse of time or both) would permit any Person to
terminate, accelerate the performance required by, or accelerate the maturity of
any material indebtedness or obligation of the Company or the Subsidiary under
any agreement or commitment to which the Company or the Subsidiary is a party or
by which the Company or the Subsidiary is bound or by which any of their
respective properties or assets are bound, (e) the creation or imposition of any
lien, charge or encumbrance on any material property of the Company or the
Subsidiary under any agreement or commitment to which the Company or the
Subsidiary is a party or by which the Company or the Subsidiary is bound or by
which any of their respective properties or assets are bound, (f) an event which
would require any consent under any agreement to which the Company or the
Subsidiary is a party or by which the Company or the Subsidiary is bound or by
which any of their respective properties or assets are bound, except where the
failure to obtain such consent could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect or (g) after giving
effect to the Rights Amendment, an event that would entitle any Person to
exercise its rights under any "Right" (as such term is defined under the Rights
Agreement) or an event that would otherwise entitle any Person to receive any
securities in respect of such Person's ownership of Common Stock at such time
pursuant to the terms and conditions of the Rights Agreement or any other
agreement or instrument to which the Company or the Subsidiary is a party or by
which any of their respective properties or assets are bound.
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2.03. Capitalization. The authorized capital stock of the Company
consists of (a) 20,000,000 shares of Common Stock, of which 8,611,249 shares
have been issued and are outstanding as of May 24, 1999 and (b) 1,000,000 shares
of Preferred Stock, $.01 par value, of which no shares are outstanding. All of
the outstanding shares of capital stock of the Subsidiary are owned by the
Company. All of the outstanding shares of capital stock of each of the Company
and the Subsidiary have been duly authorized and validly issued and are fully
paid and nonassessable. Except as set forth on Schedule 2.03(a), there are no
outstanding preemptive, conversion or other rights, options, warrants, "phantom"
stock rights, stock appreciation rights or agreements granted or issued by or
binding upon the Company or the Subsidiary for the purchase or acquisition of
any shares of capital stock of the Company or the Subsidiary or any other
securities convertible into, exchangeable for or evidencing the right to
subscribe for any shares of such capital stock. Neither the Company nor the
Subsidiary is subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of its capital stock or any
convertible securities, rights or options of the type described in the preceding
sentence. Except as set forth on Schedule 2.03(b) and except as provided in this
Agreement or in any of the Related Agreements, (i) neither the Company nor the
Subsidiary is a party to any agreement granting registration rights to any
person with respect to any of its equity or debt securities and (ii) neither the
Company nor the Subsidiary is a party to, or has knowledge of, any agreement
restricting the voting or transfer of any shares of the capital stock of the
Company or the Subsidiary. The offer and sale of all capital stock, convertible
securities, rights or options of each of the Company and the Subsidiary issued
on or prior to the Closing Date complied with or was exempt from all applicable
federal and state securities laws and no stockholder has a right of rescission
or damages with respect thereto.
2.04. Status of Shares. When issued and paid for as provided in this
Agreement, the Shares will be validly issued and outstanding, fully paid and
nonassessable, and the issuance of such Shares is not and will not be subject to
preemptive or other similar contractual rights of any other stockholder of the
Company. Upon issuance, the Purchaser shall be entitled to one "Right" (as such
term is defined in the Rights Agreement) per Share in accordance with the Rights
Agreement and such Rights shall not be revocable in a manner that would
discriminate against the Purchaser as a shareholder of the Company; provided,
however, that if the Purchaser becomes an "Acquiring Person" (as defined in the
Rights Agreement) the Purchaser will not be entitled to exercise such Rights
with respect to the Shares in accordance with the Rights Agreement.
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2.05. Financial Statements. As set forth on Schedule 2.05, the
consolidated balance sheet of the Company and the Subsidiary as of December 31,
1997 and 1998, and the related consolidated statements of operations, cash flows
and stockholders' equity (deficit) of the Company and the Subsidiary for the
years then ended, together with the opinion thereon of Ernst & Young L.L.P.,
independent certified public accountants, and the interim consolidated balance
sheet of the Company and the Subsidiary as at March 31, 1999, and the related
consolidated statements of operations, cash flows and stockholders' equity
(deficit) of the Company and the Subsidiary for the three-month period then
ended, fairly present, in all material respects, the financial condition of the
Company and the Subsidiary at such dates and the results of the operations of
the Company and the Subsidiary for the periods covered by such statements, all
in accordance with GAAP consistently applied, except, in the case of the interim
financial statements, the absence of footnote disclosures.
2.06. Liabilities. Except as set forth on the March 31, 1999 balance
sheet attached as Schedule 2.05, except for accounts payable and commissions and
fees payable incurred in the ordinary course of business since March 31, 1999
and except as set forth on Schedule 2.06, neither the Company nor the Subsidiary
has incurred any liabilities, obligations, claims or losses (whether liquidated
or unliquidated, secured or unsecured, absolute, accrued, contingent or
otherwise) in excess of $50,000 that would be required to be disclosed on a
consolidated balance sheet of the Company and the Subsidiary (including the
notes thereto) in conformity with GAAP.
2.07. Actions Pending. There is no action, suit, claim, investigation
or proceeding pending or, to the knowledge of the Company, threatened against
the Company or the Subsidiary which questions the validity of this Agreement or
any of the Related Agreements or any action taken or to be taken pursuant hereto
or thereto. Except as set forth on Schedule 2.07, there is no action, suit,
claim, investigation or proceeding pending or, to the knowledge of the Company,
threatened, against or involving the Company or the Subsidiary or any of their
respective properties or assets. There are no outstanding orders, judgments,
injunctions, awards or decrees of any court, arbitrator or governmental or
regulatory body against the Company or the Subsidiary.
2.08. Compliance with Law. The business of each of the Company and the
Subsidiary has been and is presently being conducted so as to comply in all
material respects with all applicable federal, state, and local governmental
laws, rules, regulations and ordinances. Each of the Company and the Subsidiary
has all franchises, permits, licenses, consents and other governmental or
regulatory authorizations and approvals necessary for the conduct of its
business as now being conducted by it including, without limitation, all
licenses from the insurance departments of the various states in which insurance
agency business is now being conducted, except for any failure to have such
franchises, permits, licenses, consents and authorizations and approvals which,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
2.09. No Material Adverse Change. Since March 31, 1999, (a) there has
been no material adverse change in the business, assets, operations, prospects
or financial condition of the Company or the Subsidiary; and (b) neither the
business, financial condition, operation or prospects of the Company or the
Subsidiary nor any of their respective properties or assets have been adversely
affected in any material respect as the result of any legislative or regulatory
change, any revocation or change in any franchise, permit, license or right to
do business, or any other event or occurrence, whether or not insured against.
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2.10. Certain Fees. No broker's, finder's or financial advisory fees or
commissions will be payable by the Company or the Subsidiary with respect to the
transactions contemplated by this Agreement and the Related Agreements.
2.11. Disclosure. Neither this Agreement or the Schedules hereto, any
of the Related Agreements, nor any certificate or instrument furnished to the
Purchaser by or on behalf of the Company or the Subsidiary in connection with
the transactions contemplated by this Agreement or any of the Related
Agreements, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading.
2.12. Securities Act of 1933. The Company has complied and will comply
with all applicable federal and state securities laws in connection with the
offer, issuance and sale of the Shares hereunder. Neither the Company nor anyone
acting on its behalf has or will sell, offer to sell or solicit offers to buy
the Shares, or solicit offers with respect thereto from, or enter into any
preliminary conversations or negotiations relating thereto with, any Person, so
as to bring the issuance and sale of the Shares under the registration
provisions of the Securities Act and applicable state securities laws.
2.13. Governmental Approvals. Except for (a) the filing of the
Notification and Report Form to be filed with the Department of Justice and the
Federal Trade Commission under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act
of 1976, as amended, (b) the filing of any notice prior or subsequent to the
Closing that may be required under applicable state insurance laws and (c) the
filing of any notice prior or subsequent to the Closing that may be required
under applicable state and/or federal securities laws (which, if required, shall
be filed on a timely basis) (collectively, the "Required Consents"), no
authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, is or will be necessary
for, or in connection with, the execution and delivery by the Company of this
Agreement, for the offer, issue, sale, execution or delivery of the Shares, or
for the performance by the Company of its obligations under this Agreement and
each Related Agreement (other than the filings with the Commission, the National
Association of Securities Dealers, Inc. and various state securities departments
required in connection with a registration of Shares in accordance with the
terms of the Registration Rights Agreement).
2.14. Absence of Certain Developments. Except as provided in Schedule
2.14, since March 31, 1999, neither the Company nor the Subsidiary has:
(a) committed to issue or issued any stock, bonds or other
securities or any rights, options, warrants, "phantom" stock rights or
stock appreciation rights with respect thereto;
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(b) borrowed any amount or incurred or become subject to any
liabilities (absolute or contingent) except current liabilities
incurred in the ordinary course of business;
(c) discharged or satisfied any material obligation or
liability (absolute or contingent), other than current liabilities paid
in the ordinary course of business;
(d) declared or made any payment or distribution of cash or
other property to stockholders with respect to its stock, or purchased
or redeemed, or made any agreements so to purchase or redeem, any
shares of its capital stock;
(e) sold, assigned or transferred any material assets, or
canceled any debts or claims, except in the ordinary course of
business;
(f) acquired or committed to acquire any business;
(g) suffered any substantial losses or waived any rights of
material value, whether or not in the ordinary course of business, or
suffered the loss of any material amount of prospective business; or
(h) experienced any problems with labor or management in
connection with the terms and conditions of their employment.
2.15. Commission Reports. All registration statements, reports, proxy
statements and other materials filed by the Company with the Commission were
filed within the applicable required time periods (or any extensions related
thereto), complied in all material respects with applicable requirements of the
Securities Act and the Exchange Act and the applicable rules and regulations of
the Commission promulgated thereunder, and at the time filed did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances in which they were made, not misleading. For the year ended
December 31, 1998, the Company has furnished the Purchaser with complete and
accurate copies of its annual report on Form 10-K, all other reports or
documents required to be filed by the Company pursuant to Section 13(a) or 15(d)
of the Exchange Act and its annual report to its stockholders. The Company has
made all filings with the Commission which it is required to make and has not
received any request from the Commission to file any amendment or supplement to
any of the reports described in the preceding sentence.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company as follows:
3.01. Organization and Standing of the Purchaser. The Purchaser is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization.
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3.02. Authority; Enforceability; No Conflict. The Purchaser has all
requisite power and authority to enter into this Agreement and each Related
Agreement and to carry out its obligations hereunder and thereunder. The
execution, delivery and performance of each of this Agreement and each Related
Agreement by the Purchaser have been duly and validly authorized by all
requisite proceedings on the part of the Purchaser. Each of this Agreement and
each Related Agreement when executed and delivered by the Purchaser is a valid
and binding obligation of the Purchaser, enforceable against the Purchaser in
accordance with its terms, except that (i) such enforcement may be subject to
bankruptcy, insolvency, reorganization, moratorium, rehabilitation, liquidation,
conservatorship, receivership or other similar laws now or hereafter in effect
relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought. The execution and delivery of each of this
Agreement and each Related Agreement by the Purchaser does not, and consummation
by the Purchaser of the transactions contemplated hereby will not, result in or
constitute (a) a default, breach or violation of or under the organizational
documents of the Purchaser, (b) a default, breach or violation of or under any
mortgage, deed of trust, indenture, note, bond, license, lease agreement or
other instrument or obligation to which the Purchaser is a party or by which any
of its properties or assets are bound, except for any defaults, breaches or
violations which would not, individually or in the aggregate, have a material
adverse effect on the Purchaser or prevent or materially delay the consummation
by the Purchaser of the transactions contemplated hereby, or (c) a violation of
any statute, rule, regulation, order, judgment or decree of any court, public
body or authority, except for any violations which would not, individually or in
the aggregate, have a material adverse effect on the Purchaser or prevent or
materially delay the consummation by the Purchaser of the transactions
contemplated hereby.
3.03. Acquisition for Investment. The Purchaser is an "accredited
investor" as defined in Regulation D under the Securities Act, and is acquiring
the Shares solely for its own account for the purpose of investment and not with
a view to or for sale in connection with any distribution thereof, and it has no
present intention or plan to effect any distribution of the Shares. The
Purchaser acknowledges that it is able to bear the financial risks associated
with an investment in the Shares and that it has been given full access to such
records of the Company and to the officers of the Company as it has deemed
necessary and appropriate to conducting its due diligence investigation.
3.04. Financing. The Purchaser has sufficient funds and will have
sufficient funds at all times through the Closing to consummate the transactions
contemplated hereby. The Purchaser will not be rendered insolvent by reason of
its investments in the Company nor will it be left with unreasonably small
capital for purposes of operating its businesses.
4. CONDITIONS TO CLOSING
4.01. Conditions to Purchaser's Obligations to Closing. The obligation
of the Purchaser to purchase and pay for the Shares to be purchased by it at the
Closing is subject to the following conditions:
(a) Representations and Warranties. Each of the
representations and warranties set forth in Section 2 hereof shall be
true, accurate and correct at the Closing Date with the same effect as
though made at and as of such time.
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(b) Secretary's Certificate. The Purchaser shall have received
a certificate of the Secretary or an Assistant Secretary of the
Company, dated the Closing Date, (a) attesting to corporate action
taken by the Company, including resolutions of the Board of Directors
authorizing (i) the execution, delivery and performance by the Company
of this Agreement and each Related Agreement and (ii) the issuance of
the Shares, (b) certifying the names and true signatures of the
officers of the Company authorized to sign this Agreement and each
Related Agreement and the other documents, instruments or certificates
to be delivered pursuant hereto and thereto, together with the true
signatures of such officers, and (c) verifying that the Certificate of
Incorporation of the Company and the Bylaws of the Company (as attached
thereto) are true, correct and complete as of the Closing Date.
(c) Officer's Certificate. The Purchaser shall have received a
certificate of an executive officer of the Company, dated the Closing
Date, which shall certify that the representations and warranties
contained in Section 2 hereof are true, correct and complete as of the
Closing Date and that all conditions required to be performed prior to
or at the Closing have been performed as of the Closing Date.
(d) Consents, Licenses, Approvals, etc. The Purchaser shall
have received certified true copies of all the Required Consents and
all consents and approvals required under the Rights Agreement so that
no Person shall be entitled to receive any securities in respect of
such Person's ownership of Common Stock pursuant to the terms and
conditions of the Rights Agreement as a result of the transactions
contemplated by this Agreement or any Related Agreement and such
consents, licenses and approvals shall be in full force and effect and
be reasonably satisfactory in form and substance to the Purchaser. The
Purchaser shall have received evidence that all applicable waiting
periods (and any extensions thereof) under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended, shall have expired or
been terminated.
(e) Good Standing Certificates. The Purchaser shall have
received a certificate of the appropriate public official in the
jurisdiction of incorporation of the Company as to the due
incorporation and good standing of the Company, together with a
certified copy of the Certificate of Incorporation of the Company, each
dated within ten business days of the Closing Date.
(f) No Proceedings or Litigation. No action, suit or
proceeding before any arbitrator or any governmental authority shall
have been commenced, and no investigation by any governmental authority
shall have been threatened, against the Company or the Subsidiary, or
any of the officers or directors of the Company or the Subsidiary
seeking to restrain, prevent or change the transactions contemplated by
this Agreement and each Related Agreement, or seeking damages in
connection with such transactions.
(g) Legal Opinions. The Purchaser shall have received a legal
opinion from Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P., counsel to the
Company, and ▇▇▇▇▇ ▇▇▇▇▇▇, Senior Vice President and General Counsel of
the Company, each dated the Closing Date, as to the matters set forth
in the forms of opinion attached hereto as Exhibit A-1 and Exhibit A-2,
respectively, and such other matters as the Purchaser may reasonably
request.
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(h) Registration Rights Agreement. The Purchaser and the
Company shall have entered into a Registration Rights Agreement (as
amended from time to time, the "Registration Rights Agreement"),
substantially in the form of Exhibit B.
(i) Designation Agreement. The Purchaser and the Company shall
have entered into a Director Designation Agreement (as amended from
time to time, the "Designation Agreement"), substantially in the form
of Exhibit C.
(j) Rights Amendment. The Company and The Bank of New York
shall have entered into the Amendment No. 1 to Rights Agreement (the
"Rights Amendment"), substantially in the form of Exhibit D.
(k) Board of Directors. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall have been
appointed to the Board of Directors of the Company on the Closing Date.
(l) Expenses. All fees and disbursements required to be paid
pursuant to Section 7.04 hereof shall have been paid in full.
(m) Compliance with this Agreement and Related Agreements. The
Company shall have performed, satisfied and complied in all material
respects with all agreements and conditions required by this Agreement
and each Related Agreement to be performed, satisfied or complied with
by the Company at or prior to the Closing.
(n) Proceedings Satisfactory. All proceedings taken in
connection with the issuance and sale of the Shares and all documents
and papers relating thereto shall be reasonably satisfactory in form
and substance to the Purchaser. The Purchaser shall have received
copies of such documents and papers as it may reasonably request in
connection with this Agreement and each Related Agreement.
4.02. Conditions to Company's Obligations to Closing. The obligation of
the Company to issue and sell the Shares to the Purchaser at the Closing is
subject to the following conditions:
(a) Representations and Warranties. Each of the
representations and warranties set forth in Section 3 hereof shall be
true, accurate and correct at the Closing Date with the same effect as
though made at and as of such time.
(b) Consents, Licenses, Approvals, etc. The Company shall
have received evidence that all applicable waiting periods (and any
extensions thereof) under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended, shall have expired or been terminated.
(c) No Proceedings or Litigation. No action, suit or
proceeding before any arbitrator or any governmental authority shall
have been commenced, and no investigation by any governmental authority
shall have been threatened, against the Purchaser seeking to restrain,
prevent or change the transactions contemplated by this Agreement and
each Related Agreement, or seeking damages in connection with such
transactions.
9
(d) Compliance with this Agreement and Related Agreements.
The Purchaser shall have performed, satisfied and complied in all
material respects with all agreements and conditions required by this
Agreement and each Related Agreement to be performed, satisfied or
complied with by the Purchaser at or prior to the Closing.
(e) Proceedings Satisfactory. All proceedings taken in
connection with the purchase of the Shares by the Purchaser and all
documents and papers relating thereto shall be reasonably satisfactory
in form and substance to the Company. The Company shall have received
copies of such documents and papers as it may reasonably request in
connection with this Agreement and each Related Agreement.
(f) Officer's Certificate. The Company shall have received a
certificate of an executive officer of the Purchaser, dated the Closing
Date, which shall certify that the representations and warranties
contained in Section 3 hereof are true, correct and complete as of the
Closing Date and that all conditions required to be performed prior to
or at the Closing have been performed as of the Closing Date.
5. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
"Agreement" means this Common Stock Purchase Agreement, including all
amendments, modifications and supplements thereto.
"Closing" shall have the meaning assigned to such term in Section 1.02.
"Closing Date" shall have the meaning assigned to such term in Section
1.02.
"Commission" means the Securities and Exchange Commission.
"Common Stock" shall have the meaning assigned to such term in Section
1.01.
"Company" shall have the meaning assigned to such term in the
introductory sentence hereof.
"Designation Agreement" shall have the meaning assigned to such term in
Section 4.01(i).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles in the United
States of America, as in effect on the date hereof
"indemnified party" shall have the meaning assigned to such term in
Section 6.02.
10
"Material Adverse Effect" means any material adverse effect on (a) the
business, assets, operations, prospects or financial condition of the Company or
the Subsidiary, (b) the ability of the Company to perform its obligations under
this Agreement or any Related Agreement or (c) the binding nature, validity or
enforceability of this Agreement or any Related Agreement.
"Person" means an individual, corporation, partnership, joint venture,
trust, university, or unincorporated organization, or a government or any agency
or political subdivision thereof.
"Purchaser" shall have the meaning assigned to such term in Section
1.02.
"Registration Rights Agreement" shall have the meaning assigned to such
term in Section 4.01(h).
"Related Agreements" means the Registration Rights Agreement, the
Designation Agreement and the Rights Amendment.
"Required Consents" shall have the meaning assigned to such term in
Section 2.13.
"Rights Agreement" means that certain Rights Agreement, dated as of
July 10, 1998, by and between the Company and The Bank of New York, as amended
by the Rights Amendment.
"Rights Amendment" shall have the meaning assigned to such term in
Section 4.01(j).
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" shall have the meaning assigned to such term in Section 1.01.
"Subsidiary" means ▇▇▇▇▇/▇▇▇▇▇▇ Inc., a Delaware corporation.
6. INDEMNIFICATION
6.01. General Indemnity. The Company agrees to indemnify and save
harmless the Purchaser and its directors, officers, affiliates, successors and
assigns from and against any and all losses, liabilities, deficiencies, costs,
damages and expenses (including, without limitation, reasonable attorneys' fees,
charges and disbursements) incurred by the Purchaser as a result of any
inaccuracy in or breach of the representations, warranties or covenants made by
the Company in this Agreement and in each Related Agreement. The Purchaser
agrees to indemnify and save harmless the Company and its directors, officers,
affiliates, successors and assigns from and against any and all losses,
liabilities, deficiencies, costs, damages and expenses (including, without
limitation, reasonable attorneys' fees, charges and disbursements) incurred by
the Company or the Subsidiary as a result of any inaccuracy in or breach of the
representations, warranties or covenants made by the Purchaser herein.
11
6.02. Indemnification Procedure. Any party entitled to indemnification
under this Section 6 (an "indemnified party") will give written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
promptly after the discovery by such party of any matters giving rise to a claim
for indemnification; provided that the failure of any party entitled to
indemnification hereunder to give notice as provided herein shall not relieve
the indemnifying party of its obligations under this Section 6 except to the
extent that the indemnifying party is actually prejudiced by such failure to
give notice. In case any action, proceeding or claim is brought against an
indemnified party in respect of which indemnification is sought hereunder, the
indemnifying party shall be entitled to participate in and, unless in the
reasonable judgment of the indemnified party a conflict of interest between it
and the indemnifying party may exist in respect of such action, proceeding or
claim, to assume the defense thereof, with counsel reasonably satisfactory to
the indemnified party. In the event that the indemnifying party advises an
indemnified party that it will contest such a claim for indemnification
hereunder, or fails, within thirty (30) days of receipt of any indemnification
notice to notify, in writing, such person of its election to defend, settle or
compromise, at its sole cost and expense, any action, proceeding or claim (or
discontinues its defense at any time after it commences such defense), then the
indemnified party may, at its option, defend, settle or otherwise compromise or
pay such action, proceeding or claim. In any event, unless and until the
indemnifying party elects in writing to assume and does so assume the defense of
any such claim, proceeding or action, the indemnified party's costs and expenses
arising out of the defense, settlement or compromise of any such action,
proceeding, claim or proceeding shall be losses subject to indemnification
hereunder. The indemnified party shall cooperate fully with the indemnifying
party in connection with any negotiation or defense of any such action,
proceeding or claim by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the indemnified party
which relates to such action, proceeding or claim. The indemnifying party shall
keep the indemnified party fully informed at all times as to the status of the
defense or any settlement negotiations with respect thereto. If the indemnifying
party elects to defend any such action, proceeding or claim, then the
indemnified party shall be entitled to participate in such defense with counsel
of its choice at its sole cost and expense. The indemnifying party shall not be
liable for any settlement of any action, claim or proceeding effected without
its written consent; provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. Anything in this Section
6 to the contrary notwithstanding, the indemnifying party shall not, without the
indemnified party's prior written consent, settle or compromise any claim or
consent to entry of any judgment in respect thereof which imposes any future
obligation on the indemnified party or which does not include, as an
unconditional term thereof, the giving by the claimant or the plaintiff to the
indemnified party, a release from all liability in respect of such claim,
proceeding or action. The indemnification required by this Section 6 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or expense, loss,
damage or liability is incurred. The indemnity agreements contained herein shall
be in addition to (a) any cause of action or similar right of the indemnified
party against the indemnifying party or others, and (b) any liabilities the
indemnifying party may be subject to pursuant to the law.
6.03. Indemnification Determinations. With respect to any losses (or
portions thereof) contemplated by Section 6.01 which are not directly incurred
by an indemnified party, but are instead indirectly incurred through a decrease
in value to the Purchaser of its investment in the Company pursuant hereto, then
the amount of the indemnification obligations with respect to such losses shall
be equal to 10.75% of the difference, measured as of the Closing Date, between
(a) the acquisition value of the Company as an entirety absent the circumstance
or condition giving rise to such losses and (b) the actual acquisition value of
the Company as an entirety in light of the circumstance or condition giving rise
to such losses, taking into account in such calculation customary methods of
valuation of companies on an acquisition basis. Such calculation shall be based
upon methods of valuation which are consistent with a valuation of the Shares at
$17.00 per Share at the Closing Date (which valuation at the Closing Date did
not take into account any such circumstances or conditions).
12
6.04. Indemnification Limitations. Notwithstanding the foregoing, the
indemnified party shall be entitled to make claims under Section 6.01 hereof
only to the extent that the aggregate amount of losses arising from such claims
exceeds $100,000 but does not exceed $17,000,000. Nothing contained in this
Section 6.04 shall be construed to limit the indemnification obligations of the
Company afforded to any holder of Shares under the Registration Rights Agreement
or afforded to any director of the Company under its organizational documents,
state law or otherwise.
7. MISCELLANEOUS
7.01. No Waiver; Cumulative Remedies. No failure or delay on the part
of any party to this Agreement or any Related Agreement in exercising any right,
power or remedy hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or remedy preclude any other
or further exercise thereof or the exercise of any other right, power or remedy
thereunder. The remedies therein provided are cumulative and not exclusive of
any remedies provided by law.
7.02. Amendments, Waivers and Consents. Any provision in this Agreement
to the contrary notwithstanding, and except as hereinafter provided, changes in,
termination or amendments of or additions to this Agreement or any Related
Agreement may be made, and compliance with any provision set forth herein may be
omitted or waived, if the Company shall obtain consent thereto in writing from
the Purchaser. Any waiver or consent may be given subject to satisfaction of
conditions stated therein and any waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given.
7.03. Notices. All notices, requests and other communications hereunder
must be in writing and will be deemed to have been duly given only if delivered
personally against written receipt or by facsimile transmission or mailed by
prepaid first class mail, return receipt requested, or mailed by overnight
courier prepaid to the parties at the following addresses or facsimile numbers:
To the Company: ▇▇▇▇▇/▇▇▇▇▇▇ Holdings, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Facsimile Number: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: Akin, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, L.L.P.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇, P.C.
Facsimile Number: ▇▇▇-▇▇▇-▇▇▇▇
13
To the Purchaser: Conning Insurance Capital Limited Partnership V, L.P.
c/o Conning & Company
CityPlace II
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile Number: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P.
▇▇▇▇▇▇▇ Square
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Esq.
Facsimile Number: ▇▇▇-▇▇▇-▇▇▇▇
All such notices, requests and other communications will (i) if delivered
personally to the address as provided in this Section 7.03 be deemed given upon
delivery, (ii) if delivered by facsimile transmission to the facsimile number as
provided in this Section 7.03 be deemed given upon successful transmission,
(iii) if delivered by mail in the manner described above to the address as
provided in this Section 7.03 be deemed given upon the earlier of the third
business day following mailing or upon receipt and (iv) if delivered by
overnight courier to the address as provided in this Section 7.03 be deemed
given on the earlier of the first business day following the date sent by such
overnight courier or upon receipt. Any party from time to time may change its
address, facsimile number or other information for the purpose of notices to
that party by giving notice specifying such change to the other parties hereto.
7.04. Costs, Expenses and Taxes. The Company agrees to pay, regardless
of whether the transactions contemplated by this Agreement or the Related
Agreements are consummated in accordance herewith and therewith, in connection
with the preparation, execution and delivery of this Agreement, the Related
Agreements, the issuance of the Shares to be issued at the Closing and the due
diligence review of the Company, the reasonable fees and out of pocket expenses
incurred by LeBoeuf, Lamb, ▇▇▇▇▇▇ & ▇▇▇▇▇▇, L.L.P., counsel to the Purchaser, in
an aggregate amount not to exceed $75,000 and fifty percent (50%) of the fees
and expenses incurred in connection with the filing of the Notification and
Report Form under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as
amended. In addition, the Company shall pay any such fees and out of pocket
expenses incurred by the Purchaser in connection with any amendment or waiver to
this Agreement or any Related Agreement or the successful enforcement of this
Agreement or any Related Agreement by the Purchaser. In addition, the Company
shall pay any and all stamp, or other similar taxes payable or determined to be
payable in connection with the execution and delivery of this Agreement (but
excluding income taxes imposed on the disposition of Shares), the issuance of
the Shares and the other instruments and documents to be delivered hereunder or
thereunder, and agrees to save the Purchaser harmless from and against any and
all liabilities with respect to or resulting from any delay in paying or
omission to pay such taxes.
14
7.05. Binding Effect; Assignment. Each of this Agreement and the
Related Agreements shall be binding upon and inure to the benefit of each of the
Company and the Purchaser and their respective heirs, successors and assigns,
except that the Company shall not have the right to delegate its obligations
hereunder.
7.06. Survival of Representations and Warranties. All representations
and warranties made in this Agreement, each Related Agreement, the Shares, or
any other instrument or document delivered in connection herewith or therewith,
shall survive the execution and delivery hereof or thereof for a period of 18
months after the date hereof; provided, however, that the representations of the
Company in Sections 2.02, 2.03, 2.04 and 2.05 hereof shall continue in full
force and effect indefinitely, subject, in each such instance, to the applicable
statute of limitations.
7.07. Prior Agreements. This Agreement, each Related Agreement, the
terms of the Shares, the letter agreement dated May 13, 1999 addressed to the
Purchaser from the Company regarding confidentiality and a lock-up period, and
the other agreements executed and delivered herewith and at the Closing
constitute the entire agreement between the parties and supersedes any prior
understandings or agreements concerning the subject matter hereof.
7.08. Severability. The provisions of this Agreement, each Related
Agreement and the terms of the Shares are severable and, in the event that any
court of competent jurisdiction shall determine that any one or more of the
provisions or part of a provision contained in this Agreement, each Related
Agreement or the terms of the Shares shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision or part of a provision of
this Agreement or any Related Agreement or the terms of the Shares; but this
Agreement and each Related Agreement and the terms of the Shares shall be
reformed and construed as if such invalid or illegal or unenforceable provision,
or part of a provision, had never been contained herein, and such provisions or
part reformed so that it would be valid, legal and enforceable to the maximum
extent possible.
7.09. Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE DOMESTIC LAWS OF THE STATE OF DELAWARE WITHOUT GIVING EFFECT
TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE
OF DELAWARE OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE.
7.10. Headings. The headings used in this Agreement have been inserted
for convenience of reference only and do not define or limit the provisions
hereof.
7.11. Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
7.12. Further Assurances. Each party hereto shall cooperate and shall
take such further action and shall execute and deliver such further documents as
may be reasonably requested by any other party in order to carry out the
provisions and purposes of this Agreement and the Related Agreements.
15
7.13. Closing Condition Waivers. At any time prior to the Closing Date,
any party hereto may (a) extend the time for the performance of any of the
obligations or other acts of any other party hereto, (b) waive any inaccuracies
in the representations and warranties contained herein or in any document
delivered pursuant hereto, and (c) waive compliance with any of the agreements
or conditions contained herein. Any agreement on the part of a party hereto to
any such extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party granting such waiver but such waiver or failure
to insist upon strict compliance with such obligation, covenant, agreement or
condition shall not operate as a waiver of, or estoppel with respect to, any
subsequent or future failure.
7.14. Specific Enforcement. The Purchaser and the Company acknowledge
and agree that irreparable damage would occur in the event that any of the
provisions of this Agreement and each Related Agreement were not performed in
accordance with their specific terms or were otherwise breached. It is
accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement, each
Related Agreement and to enforce specifically the terms and provisions hereof
and thereof in any court of the United States or any state thereof having
jurisdiction, this being in addition to any other remedy to which they may be
entitled at law or equity.
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date and year first above written.
▇▇▇▇▇/▇▇▇▇▇▇ HOLDINGS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: President and Chief Executive Officer
CONNING INSURANCE CAPITAL LIMITED PARTNERSHIP V, L.P.
By: Conning Investment Partners V, LLC, its
General Partner
By: Conning & Company, its Manager Member
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
[SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT]