EXHIBIT 5
________________________________________________________________________________
AMENDED AND RESTATED
COMMON STOCK
PURCHASE AGREEMENT
between
PROVIDENT COMPANIES, INC.
and
ZURICH INSURANCE COMPANY
Dated as of May 31, 1996
________________________________________________________________________________
TABLE OF CONTENTS
Page
SECTION 1. THE SHARES........................................................2
Section 1.1. Issuance, Sale and Purchase of the Shares............2
Section 1.2. Closing..............................................2
Section 1.3. Further Action.......................................2
Section 1.4. Anti-Dilution Provisions.............................3
SECTION 2. REPRESENTATIONS AND WARRANTIES....................................3
Section 2.1. Representations and Warranties of the Company........3
Section 2.1.1. Organization, Good Standing and Qualification........3
Section 2.1.2. Authorization, Enforceability........................4
Section 2.1.3. No Conflict..........................................4
Section 2.1.4. Capitalization.......................................5
Section 2.1.5. Valid Issuance of Securities.........................6
Section 2.1.6. Litigation...........................................6
Section 2.1.7. Consents.............................................6
Section 2.1.8. Compliance with Law and Other Instruments............7
Section 2.1.9. SEC Documents; Financial Statements..................7
Section 2.1.10. Absence of Certain Changes or Events.................9
Section 2.1.11. No Regulatory Disqualifications......................9
Section 2.1.12. Registration Rights..................................9
Section 2.1.13. Acquisition Agreements...............................9
Section 2.1.14. Rating Agency.......................................10
Section 2.1.15. Brokers.............................................10
Section 2.1.16. Environmental Protection............................10
Section 2.1.17. Delaware Law........................................11
Section 2.1.18. Incorporation of Representations and Warranties
from the Merger Agreement.........................11
Section 2.2. Representations, Warranties and Covenants of the
Purchaser.........................................12
Section 2.2.1. Organization........................................12
Section 2.2.2. Authorization.......................................12
Section 2.2.3. Purchase for Investment.............................12
Section 2.2.4. Restricted Securities...............................12
Section 2.2.5. No Regulatory Disqualifications.....................13
Section 2.2.6. Purchaser Information...............................13
Section 2.2.7. Consents............................................13
Section 2.2.8. Brokers.............................................14
SECTION 3. CERTAIN AGREEMENTS OF THE PARTIES................................14
Section 3.1. Conduct of Business of the Company..................14
Section 3.2. Covenants of the Purchaser..........................16
(i)
Section 3.3. Proxy Statement; Stockholder Approval...............17
Section 3.4. Approvals, Etc......................................17
Section 3.5. Exclusivity.........................................17
Section 3.6. Publicity...........................................17
Section 3.7. Modification of Other Agreements....................17
Section 3.8. Exchange Listing....................................18
Section 3.9. Investigation and Confidentiality...................18
Section 3.10. State Takeover Laws; Charter Provisions.............18
Section 3.11. Use of Proceeds.....................................19
Section 3.12. Marketing Agreement.................................19
Section 3.13. Restrictive Agreements Prohibited...................19
SECTION 4. CLOSING CONDITIONS...............................................19
Section 4.1. Conditions to Obligation of Purchaser...............19
Section 4.1.1. Representations and Warranties Complete
and Correct.......................................19
Section 4.1.2. Compliance with this Agreement......................19
Section 4.1.3. Officers' Certificate...............................19
Section 4.1.4. Consents; Etc.......................................20
Section 4.1.5. Supporting Documents................................20
Section 4.1.6. HSR Act.............................................20
Section 4.1.7. Merger Closing......................................20
Section 4.1.8. Other Agreements....................................20
Section 4.1.9. Material Adverse Change.............................21
Section 4.1.10. Illegality, Etc.....................................21
Section 4.1.11. Stockholder Approval................................21
Section 4.1.12. Exchange Listing....................................21
Section 4.1.13. Financing of Cash Payments in Merger................21
Section 4.1.14. ▇▇▇▇▇▇▇▇▇ Family Agreement..........................21
Section 4.1.15. Legal Opinions......................................21
Section 4.2. Conditions to the Obligations of the Company........21
Section 4.2.1. Compliance with the Agreement.......................22
Section 4.2.2. Purchaser's Representations and Warranties
Complete and Correct..............................22
Section 4.2.3. Officer's Certificate...............................22
Section 4.2.4. Consents; Etc.......................................22
Section 4.2.5. HSR Act.............................................22
Section 4.2.6. Merger Closing......................................22
Section 4.2.7. Illegality, Etc.....................................22
Section 4.2.8. Stockholder Approval................................22
Section 4.2.9. Exchange Listing....................................23
Section 4.2.10. Financing of Cash Payments in Merger................23
Section 4.2.11. Legal Opinions......................................23
SECTION 5. TERMINATION......................................................23
Section 5.1. Termination.........................................23
Section 5.2. Effect of Termination...............................24
(ii)
Section 5.3. Termination Fee.....................................24
SECTION 6. MISCELLANEOUS....................................................24
Section 6.1. Expenses and Indemnification........................24
Section 6.2. Survival of Agreements..............................26
Section 6.3. Parties in Interest.................................26
Section 6.4. Notices.............................................26
Section 6.5. Governing Law.......................................27
Section 6.6. Entire Agreement....................................27
Section 6.7. Counterparts........................................27
Section 6.8. Amendments..........................................27
Section 6.9. Severability........................................28
Section 6.10. Titles and Subtitles................................28
Section 6.11. Further Assurances..................................28
Exhibit 1 Terms for Marketing Agreement
Exhibit 2 Certificate of Incorporation
Exhibit 3 By-laws
Exhibit 4 Amended and Restated Family Stockholders Agreement
Exhibit 5 Form of Opinion of Company Counsel
Exhibit 6 Form of Opinion of Purchaser's Counsel
(iii)
AMENDED AND RESTATED COMMON STOCK PURCHASE AGREEMENT dated as of May
31, 1996 between Provident Companies, Inc., a Delaware corporation (the
"Company"), and Zurich Insurance Company, a Swiss corporation ("Zurich" and,
solely for purposes of the provisions of this Agreement relating to the rights
of the Purchaser hereunder, together with such affiliates of Zurich as Zurich
may designate in accordance with Section 1.1 hereof, collectively the
"Purchaser").
RECITALS:
WHEREAS, on May 31, 1996 the parties hereto signed the original Common
Stock Purchase Agreement and such parties desire to amend and restate such
Agreement as of such date; and
WHEREAS, this Amended and Restated Common Stock Purchase Agreement is
being executed on November 27, 1996 as of May 31, 1996; and
WHEREAS, the Company wishes to issue and sell to the Purchaser an
aggregate of 9,523,810 shares (the "Shares") of the authorized but unissued
common stock, par value $1.00 per share (the "Common Stock"), of the Company;
and
WHEREAS, the Purchaser wishes to purchase the Shares on the terms and
subject to the conditions set forth in this Agreement; and
WHEREAS, the purchase and sale of the Shares is intended to be
consummated in connection with, and contingent upon, the acquisition by the
Company of all the outstanding common stock of The ▇▇▇▇ ▇▇▇▇▇▇ Corporation
("Revere") through a merger transaction (the "Merger"), all pursuant to an
Amended and Restated Agreement and Plan of Merger, entered into as of November
5, 1996 and dated as of April 29, 1996, between the Company, Patriot Acquisition
Corporation and Revere (as the same may be amended or supplemented in accordance
with the terms of this Agreement, the "Merger Agreement"); and
WHEREAS, in connection with the execution and delivery of this
Agreement, the Company and the Purchaser are entering into (i) an Amended and
Restated Registration Rights Agreement dated as of May 31, 1996 (as the same may
be amended or supplemented from time to time, the "Registration Agreement")
providing for certain rights in favor of the Purchaser with respect to the
registration of the Shares under the federal securities laws and (ii) an Amended
and Restated Relationship Agreement dated as of May 31, 1996 (as the same may be
amended or supplemented from time to time, the "Relationship Agreement")
providing for certain agreements with respect to Shares acquired hereunder; and
WHEREAS, on or prior to the Closing Date (as defined in Section 1.2)
the Company and the Purchaser will enter into a
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Marketing Agreement (as the same may be amended or supplemented from time to
time, the "Marketing Agreement") relating to a proposed strategic relationship
between the Purchaser and its affiliates and the Company, which agreement shall
include the terms set forth on Exhibit 1 (the Marketing Agreement, the
Registration Agreement and the Relationship Agreement are referred to herein
collectively as the "Ancillary Agreements").
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, the parties agree as follows:
SECTION 1. THE SHARES
Section 1.1. Issuance, Sale and Purchase of the Shares. In reliance
upon the representations and warranties made herein and subject to the
satisfaction or waiver of the conditions set forth herein, the Company agrees to
issue and sell to the Purchaser (and/or such affiliates (as defined in the
Relationship Agreement) of the Purchaser as it may designate in writing to the
Company prior to the Closing (as defined below)), and the Purchaser agrees to
purchase (or to cause such affiliates to purchase) from the Company 9,523,810
Shares, for a purchase price of $31.50 per Share, or an aggregate purchase price
equal to $300,000,000.
Section 1.2. Closing. The closing shall take place at the offices of
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP, One Beacon Street, Boston,
Massachusetts, on the date the Merger becomes effective in accordance with the
terms and conditions of the Merger Agreement, or at such other location, date
and time as may be agreed upon between the Purchaser and the Company (such
closing being called the "Closing" and such date and time being called the
"Closing Date"). At the Closing, the Company shall issue and deliver to the
Purchaser (or its affiliates), a stock certificate or certificates in definitive
form, registered in the name of the Purchaser (or such affiliates), representing
the Shares being purchased at the Closing. As payment in full for the Shares
being purchased under this Agreement, and against delivery of the stock
certificate or certificates therefor on the Closing Date, the Purchaser shall
(or shall cause its affiliates to) wire transfer in accordance with the
Company's instructions funds in the amount of $300,000,000.
Section 1.3. Further Action. During the period from the date hereof to
the Closing Date, each of the Company and the Purchaser shall use all reasonable
efforts to take all action necessary or appropriate to satisfy the closing
conditions contained in Section 4 hereof and to cause its respective
representations and warranties contained in Section 2 to be complete and correct
in all material respects as of the Closing Date, after giving effect to the
transactions contemplated by this Agreement, as if made on and as of such date.
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Section 1.4. Anti-Dilution Provisions. In the event the Company changes
the number of shares of Common Stock issued and outstanding prior to the Closing
as a result of a stock split, stock dividend, or similar recapitalization with
respect to such stock and the record date therefor (in the case of a stock
dividend) or the effective date thereof (in the case of a stock split or similar
recapitalization for which a record date is not established) shall be prior to
the Closing, the number of Shares to be purchased and the purchase price per
Share shall be proportionately adjusted, without any corresponding adjustment to
the aggregate purchase price for the Shares.
SECTION 2. REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations and Warranties of the Company. The Company
represents and warrants to the Purchaser as follows:
Section 2.1.1. Organization, Good Standing and Qualification. (a) Each
of the Company and each of its subsidiaries (the "Company Subsidiaries") is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and has all requisite power and authority
under such laws to own or lease and operate its properties and to carry on its
business as now conducted. Each of the Company and each of the Company
Subsidiaries is duly qualified or licensed to do business as a foreign
corporation in good standing in each jurisdiction in which the nature of the
business transacted by it or the character of the properties owned or leased by
it requires it to so qualify or be licensed, except where the failure to so
qualify or be licensed or be in good standing would not (i) have a material
adverse effect on the results of operations, assets, liabilities or financial
condition of the Company and the Subsidiaries considered as a single enterprise
or (ii) impair in any material respect the ability of the Company to perform any
of its obligations or agreements hereunder or under the Ancillary Agreements or
consummate the transactions contemplated hereby or thereby (collectively, a
"Material Adverse Effect"). Subject to the requisite approvals of the Company's
stockholders as described in Section 2.1.2, the Company has the corporate power
and authority to execute, deliver and perform this Agreement and the Ancillary
Agreements, and to issue, sell and deliver the Shares.
(b) The Company conducts its insurance operations through Provident
Life and Accident Insurance Company, Provident National Assurance Company and
Provident Life and Casualty Insurance Company (collectively, the "Company
Insurance Subsidiaries"). Except as disclosed in Schedule 2.1.1, each of the
Company Insurance Subsidiaries is (i) duly licensed or authorized as an
insurance company in its jurisdiction of incorporation, (ii) duly licensed or
authorized as an insurance company in each other jurisdiction where it is
required to be so licensed or authorized, and (iii) duly authorized in its
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jurisdiction of incorporation and each other applicable jurisdiction to write
each line of business reported as being written in the Company SAP Statements
(as hereinafter defined), except, in any such case, where the failure to be so
licensed or authorized is not reasonably likely to result in a Material Adverse
Effect.
(c) Except for the Company Subsidiaries (including Revere after
consummation of the Merger) and as set forth in the 1995 SAP Statements or in
Schedule 2.1.1, the Company does not directly or indirectly own any equity or
similar interest in, or any interest convertible into or exchangeable or
exercisable for any equity or similar interest in, any corporation, partnership,
joint venture or other business association or entity that directly or
indirectly conducts any activity which is material to the Company.
Section 2.1.2. Authorization, Enforceability. Except for the
affirmative vote of a majority of the votes cast by holders of shares of Common
Stock present in person or represented by proxy at the Stockholders' Meeting (as
defined in Section 3.3) (provided that the votes cast by such holders constitute
a majority of the votes entitled to be cast by holders of the outstanding shares
of Common Stock) to authorize the issuance of the Shares hereunder and the
shares of Common Stock to be issued under the Merger Agreement and except for
the affirmative vote of the holders of sixty-six and two thirds percent of the
shares of Common Stock outstanding with respect to the Charter Amendment (as
defined in Section 5.3 of the Merger Agreement), all corporate action on the
part of the Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement and the Ancillary
Agreements, the performance of all obligations of the Company hereunder and
thereunder and the authorization, issuance, sale and delivery of the Shares has
been taken. This Agreement, the Registration Agreement and the Relationship
Agreement have been (and the Marketing Agreement, when executed and delivered,
will be) duly authorized, executed and delivered by the Company and constitute
(and, in the case of the Marketing Agreement, when executed and delivered, will
constitute) the valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity (whether enforcement is sought by proceedings in
equity or at law).
Section 2.1.3. No Conflict. The execution and delivery by the Company
of this Agreement and the Ancillary Agreements, the performance by the Company
of its obligations hereunder and thereunder, the issuance, sale and delivery of
the Shares, will not violate any provision of (i) the Amended and Restated
Certificate of Incorporation, as amended or supplemented
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(the "Certificate of Incorporation"), or By-laws, as amended (the "By-laws"), of
the Company, or (ii) any law or any order of any court or other agency of
government, or conflict with, result in a breach of or constitute (with notice
or lapse of time or both) a default under any indenture, agreement or other
instrument by which the Company or any of its properties or assets is bound, or
result in the creation or imposition of any lien, charge, restriction, claim or
encumbrance of any nature whatsoever known to the Company upon any of the
properties or assets of the Company, except for violations, conflicts, breaches
or defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect. True and correct copies of the Certificate
of Incorporation and By-laws, as in effect on the date hereof, are attached
hereto as Exhibits 2 and 3, respectively.
Section 2.1.4. Capitalization. (a) The authorized capital stock of the
Company consists of (i) 25,000,000 shares of Preferred Stock, par value $1.00
per share (the "Preferred Stock"), which may be issued in series; and (ii)
65,000,000 shares of Common Stock. As of the Closing Date, assuming the Charter
Amendment is approved by the Company's stockholders, the authorized number of
shares of Common Stock will be increased to at least 75,000,000 shares.
(b) As of April 29, 1996, there were issued and outstanding (i)
45,465,135 shares of Common Stock, (ii) 1,041,667 shares of 8.10% Cumulative
Preferred Stock, evidenced by depositary receipts for 6,250,002 depositary
shares each representing a one-sixth interest in one share of the 8.10%
Cumulative Preferred Stock, and (iii) options to purchase 1,837,145 shares of
Common Stock under the Company's Stock Option Plan of 1994, as amended (the
"1994 Plan") out of a total of 3,500,000 options authorized to be issued under
the 1994 Plan. As of the Closing Date (and after giving effect to the Merger and
the transactions contemplated by this Agreement), there will be outstanding
67,540,281 shares of Common Stock (not including shares of Common Stock issued
pursuant to the exercise of options granted under the 1994 Plan and assuming
12,492,617 shares of Common Stock are issued to stockholders of Revere by virtue
of the Merger).
(c) Except as set forth in Schedule 2.1.4 or as provided in this
Agreement and the Merger Agreement, there are not outstanding any options,
warrants, rights (including conversion, exchange or preemptive rights) or
agreements or commitments, orally or in writing, for the purchase or acquisition
from the Company of any shares of its capital stock.
(d) Except as set forth in Schedule 2.1.4, the Company has no
obligation (contingent or other) to purchase, redeem or otherwise acquire any of
its equity securities or any interest therein or to pay any dividend (other than
cumulative dividends
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on the 8.10% Cumulative Preferred Stock in accordance with the terms thereof) or
make any other distribution in respect thereof.
Section 2.1.5. Valid Issuance of Securities. (a) The Shares, when
issued, sold and delivered in accordance with the terms hereof for the
consideration expressed herein, will be duly authorized, validly issued, fully
paid and nonassessable.
(b) The outstanding shares of Common Stock and 8.10% Cumulative
Preferred Stock are, and the shares of Common Stock issuable pursuant to the
Merger Agreement will be when issued, duly authorized, validly issued, fully
paid and nonassessable.
(c) The issuance, sale and delivery of the Shares is not subject to any
preemptive right of stockholders of the Company arising under law or the
Certificate of Incorporation or By-laws or to any contractual right of first
refusal or other right in favor of any person.
Section 2.1.6. Litigation. There is no action, suit, proceeding or
investigation pending or, to the knowledge of the Company, currently threatened
against the Company or any of the Company Subsidiaries that questions the
validity of this Agreement or any of the Ancillary Agreements or the right of
the Company to enter into, or to consummate, the transactions contemplated
hereby or thereby, or that is reasonably likely, either individually or in the
aggregate, to have a Material Adverse Effect, nor does the Company have
knowledge that there is any basis for any of the foregoing. The Company is not a
party or subject to the provisions of any order, writ, injunction, judgment or
decree of any court or government agency or instrumentality that specifically
names the Company, any of the Company Subsidiaries and as to which either
compliance or noncompliance is reasonably likely to have a Material Adverse
Effect. Except as set forth on Schedule 2.1.6, there is no action, suit,
proceeding or investigation by the Company or any of the Company Subsidiaries
currently pending or which the Company or any Company Subsidiary intends to
initiate that is material to the operations of the Company and the Company
Subsidiaries considered as a whole.
Section 2.1.7. Consents. Assuming the accuracy of the representations
and warranties of the Purchaser set forth in this Agreement, except as set forth
on Schedule 2.1.7, no consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
governmental authority, agency or body or any other person on the part of the
Company is required in connection with the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements, except for (i)
required blue sky filings, if any, which will be effected in accordance with
such laws, (ii) filings required under the Securities Act of 1933 (the
"Securities Act") in connection with the Registration Agreement, (iii) the
filing of a Pre-Merger Notification Form and related
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documents under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of ▇▇▇▇
(▇▇▇ "▇▇▇ ▇▇▇"), (▇▇) the filing of appropriate documents with, and the
approval of, the Superintendent of Insurance of the State of New York and the
Commissioners of Insurance of the Commonwealth of Massachusetts, the States of
Delaware and Tennessee and any other state or jurisdiction in which the Company
or any of the Company Insurance Subsidiaries is domiciled or does business (the
"Insurance Regulators") for the issuance of the Shares to the Purchaser, (v)
such consents, approvals, notices or waivers as may be required under the law of
Canada or any of the provinces thereof; (vi) the approval of the NYSE (as
defined in Section 3.8) for the listing of the Shares on the NYSE, subject to
official notice of issuance; and (vii) such consents, approvals, orders,
authorizations, registrations, qualifications, designations, declarations or
filings which if not obtained or made, as the case may be, are not reasonably
likely to have a Material Adverse Effect.
Section 2.1.8. Compliance with Law and Other Instruments. The Company
and the Company Subsidiaries are not in conflict with, or in default or
violation of, (i) any law, rule, regulation, order, judgment or decree
applicable to any of them or by which any of their property or assets is bound
or affected, or (ii) any note, bond, mortgage, indenture, contract, agreement,
lease, license, permit, franchise or other instrument or obligation to which any
of them is a party or by which the Company or any of the Company Subsidiaries or
any of their property or assets is bound or affected, except for any such
conflicts, defaults or violations that are not reasonably likely, individually
or in the aggregate, to have a Material Adverse Effect.
Section 2.1.9. SEC Documents; Financial Statements. Except as set forth
in Schedule 2.1.9:
(a) There are no agreements, understandings or proposed transactions
between the Company or any of the Subsidiaries and any of their respective
officers, directors or affiliates, or any affiliate thereof, of a type that
would be required to be disclosed on Form 10-K for the year ending on December
31, 1995 other than the agreements, understandings or proposed transactions
disclosed in the SEC Documents (as hereinafter defined).
(b) The Company has timely filed all reports required to be filed by it
with the SEC since January 1, 1994 pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act") and the rules and regulations thereunder.
The Company has provided the Purchaser with copies of (i) the Company's annual
reports on Form 10-K for the years ended December 31, 1994 and 1995, (ii) the
Proxy Statement filed by the Company with the SEC on April 1, 1996 with respect
to the Annual Meeting of Stockholders of the Company held on May 1, 1996 and
(iii) the Company's quarterly report on Form 10-Q for the quarter ended
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March 31, 1996 (collectively, together with any other reports or filings made by
the Company since January 1, 1994 or which are made after the date hereof and on
or prior to the Closing Date with the SEC pursuant to the requirements of the
Securities Act or the Exchange Act or the rules and regulations thereunder,
including, without limitation, the Registration Statement and the Proxy
Statement (as those terms are defined in Section 2.2.6), the "SEC Documents").
As of their respective dates, the SEC Documents complied (or, as to SEC
Documents filed after the date hereof, will comply) in all material respects
with the requirements of the Exchange Act, the Securities Act and the rules and
regulations of the SEC promulgated thereunder. Except to the extent that
information contained in any SEC Document has been revised or superseded by a
later filed SEC Document (which was filed prior to the date of this Agreement),
none of the SEC Documents contains (or, as to SEC Documents filed after the date
hereof, will contain) any untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were
made, not misleading. The Registration Statement will not, at the time it
becomes effective, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein not misleading. The Proxy Statement will not, at the
time of the mailing of the Proxy Statement to the Company's stockholders (or, in
the case of any amendment or supplement thereto, at the time of mailing of
such amendment or supplement, as the case may be) and at the time of the
Stockholders' Meeting and at the Effective Time (as defined in the Merger
Agreement) contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
(c) The financial statements of the Company included in the SEC
Documents comply (or, as to SEC Documents filed after the date hereof, will
comply) as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC with respect
thereto, have been prepared in accordance with generally accepted accounting
principles, except, in the case of unaudited statements as permitted by Form
10-Q, applied on a consistent basis during the periods involved and fairly
present the consolidated financial position of the Company and its subsidiaries
as of the date thereof and the consolidated results of their operations and cash
flows for the periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments). Except as set forth in the SEC Documents,
neither the Company nor any of the Company Subsidiaries has any material
liabilities or obligations which, individually or in the aggregate, are
reasonably likely to have a Material Adverse Effect.
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(d) Each Company Insurance Subsidiary has filed all annual or quarterly
statements, together with all exhibits and schedules thereto, required to be
filed or submitted to the appropriate regulatory authorities of the jurisdiction
in which it is domiciled on forms prescribed or permitted by such authority (the
"SAP Statements"). The financial statements included in the SAP Statements,
including the notes thereto, have been prepared in all material respects in
accordance with accounting practices prescribed or permitted by applicable state
regulatory authorities in effect as of the date of the respective statements
(and such accounting practices have been applied on a consistent basis
throughout the periods involved, except as expressly set forth in the notes or
schedules thereto), and present fairly the respective statutory financial
position and results of operation of each of the Company Insurance Subsidiaries
as of their respective dates and for the respective periods prescribed therein.
Section 2.1.10. Absence of Certain Changes or Events. Except as
disclosed in the SEC Documents, or as set forth in Schedule 2.1.10 or as a
consequence of, or as contemplated by, this Agreement or the Merger Agreement,
since March 31, 1996, (i) the business of the Company has been carried on only
in the ordinary and usual course, (ii) there has not occurred any change which
has resulted or is reasonably likely to result in a Material Adverse Effect and
(iii) neither the Company nor any Company Subsidiary has taken any action of the
type described in clauses (g), (h), (i) or (j) of Section 3.1.
Section 2.1.11. No Regulatory Disqualifications. To the knowledge of
the Company, no event has occurred or condition exists or, to the extent it is
within the reasonable control of the Company, will occur or exist with respect
to the Company that, in connection with obtaining any approvals from any
Insurance Regulator required in connection with the transactions contemplated by
this Agreement or the Merger Agreement, would cause the Company or any Company
Subsidiary to fail to satisfy on its face any applicable statute or written
regulation of any Insurance Regulator, which is reasonably likely to adversely
affect the Company's ability to consummate the transactions contemplated hereby
or thereby.
Section 2.1.12. Registration Rights. Except for the Registration
Agreement, the registration rights granted pursuant to the Registration Rights
Agreement, dated April 29, 1996, between the Company and Textron Inc. and the
registration rights agreement with members of the Family Group (as defined in
the Registration Agreement), the Company has not granted or agreed to grant any
registration rights, including piggyback rights, to any person or entity.
Section 2.1.13. Acquisition Agreements. True and correct copies of (i)
the Merger Agreement and any agreements executed by the Company (or any of its
affiliates) and Revere in
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connection therewith (the "Merger Documents") and (ii) any agreement, letter of
intent, commitment letter or similar agreement or document relating to any
financing proposed to be incurred by the Company in connection with the Merger,
other than this Agreement and the Ancillary Agreements (the "Company Financing
Agreements"), have been furnished to the Purchaser.
Section 2.1.14. Rating Agency. From December 31, 1995 through the date
hereof, except as disclosed on Schedule 2.1.14, no rating agency has (i) imposed
conditions (financial or otherwise) on retaining any rating assigned to the
Company or any Company Insurance Subsidiary or (ii) threatened to downgrade any
rating assigned to the Company or any Company Insurance Subsidiary.
Section 2.1.15. Brokers. Other than its financial advisor, ▇▇▇▇▇▇▇,
▇▇▇▇▇ & Company, the Company has not employed any investment banker, broker,
finder, or intermediary in connection with the sale of the Shares, and the
Company is under no obligation to pay any investment banking, brokerage,
finder's or similar fee or commission in connection with such transactions,
other than certain fees payable to ▇▇▇▇▇▇▇, Sachs & Company, which fees are the
obligation of the Company.
Section 2.1.16. Environmental Protection. (a) For purposes of this
Section 2.1.16, the following terms shall be defined as follows:
"Environmental Laws" means any federal, state or local statute, code,
ordinance, rule, regulation, permit, consent, approval, license, judgment,
order, writ, decree, injunction or other authorization and any amendments
thereto, relating to:
(i) emissions, discharges, release or threatened releases of
pollutants, contaminants or hazardous or toxic materials or wastes into
indoor or ambient air, surface water, ground water, publicly owned
treatment works, septic systems or land;
(ii) the treatment, storage, disposal, handling, manufacturing,
transportation, or shipment of Hazardous Water or hazardous and/or
toxic wastes, material, substances, products or by-products as defined
in the Comprehensive Environmental Response Compensation and Liability
Act as amended by the Superfund Amendments and Reauthorization Act, as
amended, 42 U.S.C. ss. 9601 et seq.; the Resource Conservation Recovery
Act, as amended, 42 U.S.C. ss. 6901 et seq. and the Toxic Substances
Control Act, as amended, 15 U.S.C. ss. 2601 et seq. as amended from
time to time and corresponding state legislation and all regulations
promulgated thereunder; or
(iii) otherwise relating to the pollution or protection of health
or the environment; and
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"Hazardous Waste" means any chemical substance or material including,
but not limited to wastes, petroleum and petroleum-derived substances, asbestos,
urea formaldehyde foam insulation, transformer equipment containing dielectric
fluid with levels of polychlorinated biphenyls, radon gas, radioactive materials
or other pollutants or contaminants which have the characteristic of hazardous
waste as set forth in or which are now or hereafter included or regulated by the
Clean Water Act, 33 U.S.C. ss. 1251 et seq.; the Clear Act, as amended, 42
U.S.C. ss. 7401, et seq.; the Federal Water Pollution Control Act, as amended,
33 U.S.C. ss. 1251 et seq.; CERCLA; RCRA; and TSCA.
(b) The Company and the Company Subsidiaries are not in violation of
any Environmental Laws, other than such violations which have not had and are
reasonably expected not to have a Material Adverse Effect and have, and are in
compliance with all terms and conditions of, all permits, licenses and
authorizations necessary for the conduct of their respective businesses, other
than such instances of non-compliance which are not reasonably likely to have a
Material Adverse Effect.
(c) Except as set forth on Schedule 2.1.16, there is no site which is
listed on either the National Priorities List pursuant to CERCLA or a similar
state or local law list with respect to which the Company has received notice
from the United States Environmental Protection Agency or a state or local
agency that the Company is considered to be a potentially responsible party by
reason of arranging for disposal, owning or operating any facility or site or
transporting any Hazardous Waste.
Section 2.1.17. Delaware Law. The Company has elected not to be
governed by the provisions of Section 203 of the Delaware General Corporation
Law ("DGCL") and such election is effective as of the date hereof and such
Section 203 (a) is not applicable to the transactions contemplated hereby and by
the Ancillary Agreements and (b) will not be applicable to any future
transactions between the Company, on the one hand, and the Purchaser and/or any
of its affiliates, on the other hand. The Company has taken all action so that
the entering into of this Agreement and the consummation of the sale of the
Shares and the other transactions contemplated by this Agreement do not and will
not result in the grant of any rights to any person under the Certificate of
Incorporation, By-laws or other governing instruments of the Company or restrict
or impair the ability of the Purchaser to vote, or otherwise to exercise the
rights of a stockholder with respect to, shares of the Company that may be
directly or indirectly acquired or controlled by the Purchaser.
Section 2.1.18. Incorporation of Representations and Warranties from
the Merger Agreement. Without qualifying any of the other representations and
warranties set forth in this Agreement, the representations and warranties of
the Company set forth in Sections 5.3, 5.4, 5.9, 5.11, 5.12, 5.13, 5.14, 5.16,
5.17, 5.18, 5.19 and 5.20 of the Merger Agreement (including any
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related definitions) shall be deemed to be incorporated by reference herein as
if fully set forth herein.
Section 2.2. Representations, Warranties and Covenants of the
Purchaser. The Purchaser represents and warrants to the Company that:
Section 2.2.1. Organization. The Purchaser is a corporation duly
organized and validly existing under the laws of Switzerland.
Section 2.2.2. Authorization. The Purchaser has full power and
authority to enter into this Agreement and the Ancillary Agreements. Each of
this Agreement, the Registration Agreement and the Relationship Agreement
constitute (and the Marketing Agreement, when executed and delivered, will
constitute) its valid and legally binding obligation, enforceable in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity
(whether enforcement is sought by proceedings in equity or at law).
Section 2.2.3. Purchase for Investment. The Shares will be acquired for
investment for the Purchaser's (or its affiliates') own account and not with a
view to the resale or distribution of any part thereof, except in compliance
with the provisions of the Securities Act or an exemption therefrom.
Section 2.2.4. Restricted Securities. The Purchaser understands that
the Shares are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such shares may be resold without registration under the
Securities Act only in certain limited circumstances.
The Purchaser further agrees that each certificate representing the
Shares shall be stamped or otherwise imprinted with a legend substantially in
the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE (I) HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT
BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS IT HAS BEEN
REGISTERED UNDER THAT ACT OR AN EXEMPTION FROM REGISTRATION IS
AVAILABLE, AND (II) ARE SUBJECT TO THE PROVISIONS OF A
RELATIONSHIP AGREEMENT, DATED AS OF MAY 31, 1996, BETWEEN THE
COMPANY AND THE PURCHASER, COPIES OF WHICH ARE ON FILE AT THE
PRINCIPAL EXECUTIVE OFFICES OF THE COMPANY."
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A certificate shall not bear such legend if the Purchaser shall have delivered
to the Company an opinion of counsel reasonably satisfactory to the Company to
the effect that the securities being sold may be publicly sold without
registration under the Securities Act. The foregoing shall not be deemed to
affect the obligations of the Company under the Registration Agreement.
Section 2.2.5. No Regulatory Disqualifications. To the knowledge of the
Purchaser, no event has occurred or condition exists or, to the extent it is
within the reasonable control of the Purchaser, will occur or exist with respect
to the Purchaser that, in connection with obtaining any approvals from any
Insurance Regulator required in connection with the transactions contemplated by
this Agreement, would cause the Purchaser to fail to satisfy on its face any
applicable statute or written regulation of any Insurance Regulator, which would
be reasonably likely to adversely affect the Purchaser's ability to consummate
the transactions contemplated hereby or thereby.
Section 2.2.6. Purchaser Information. None of the information regarding
the Purchaser supplied by the Purchaser in writing specifically for inclusion in
(i) the registration statement to be filed by the Company as contemplated by
Section 4.10 of the Merger Agreement (the "Registration Statement") or (ii) the
proxy statement-prospectus to be filed by the Company as contemplated by Section
6.4 of the Merger Agreement (the "Proxy Statement") will, in the case of the
Registration Statement, at the time it becomes effective contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, or, in the case of the Proxy Statement, at the time of the mailing
of the Proxy Statement to the Company's stockholders (or, in the case of any
amendment or supplement thereto, at the time of mailing of such amendment or
supplement, as the case may be) and at the time of the Stockholders' Meeting and
at the Effective Time (as defined in the Merger Agreement) contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
Section 2.2.7. Consents. Assuming the accuracy of the representations
and warranties of the Company set forth in this Agreement, no consent, approval,
order or authorization of, or registration, qualification, designation,
declaration or filing with, any governmental authority, agency or body or any
other person on the part of the Purchaser is required in connection with the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, except for (i) the filing of a Pre-Merger Notification
Form and related documents under the HSR Act, (ii) the filing of appropriate
documents with, and approval of, the Insurance Regulators and the Commissioners
of Insurance of any state or jurisdiction in which the Purchaser or
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any of its insurance subsidiaries is domiciled or does business, (iii) such
consents, approvals, notices or waivers as may be required under the laws of
Canada or any of the provinces thereof, (iv) filings required under the
Securities Act or the Securities Exchange Act of 1934, as amended, or (v) such
consents, approvals, orders, authorizations, registrations, qualifications,
designations, declarations or filings, which if not obtained or made, as the
case may be, are not reasonably likely to impair in any material respect the
ability of the Purchaser to perform any of its obligations or agreements
hereunder or under the Ancillary Agreements or consummate the transactions
contemplated hereby or thereby.
Section 2.2.8. Brokers. Other than ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Securities Corporation, the Purchaser has not employed any investment banker,
broker, finder, or intermediary in connection with the transactions contemplated
by this Agreement, and the Purchaser is under no obligation to pay any
investment banking, brokerage, finder's or similar fee or commission in
connection with such transactions, other than certain fees payable to ▇▇▇▇▇▇▇▇▇,
Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation, which are the obligation of the
Purchaser (except to the extent otherwise provided in Section 6.1).
SECTION 3. CERTAIN AGREEMENTS OF THE PARTIES
Section 3.1. Conduct of Business of the Company. Except as set forth in
Schedule 3.1, from the date of this Agreement until the earlier of the Closing
or the termination of this Agreement, unless the prior written consent of the
Purchaser shall have been obtained, and except as otherwise contemplated by this
Agreement, the Company will conduct its operations according to its ordinary and
usual course of business consistent with past practice and shall use all
reasonable efforts to preserve intact its current business organizations, keep
available the service of its current officers and employees, maintain its
material permits and contracts and preserve its relationships with customers,
suppliers and others having business dealings with it. Without limiting the
generality of the foregoing, and except as otherwise contemplated by this
Agreement or as set forth in Schedule 3.1, the Company will not, without the
prior written consent of the Purchaser (which consent shall not be unreasonably
withheld):
(a) issue, sell, grant, dispose of, pledge or otherwise encumber, or
authorize or propose the issuance, sale, disposition or pledge or other
encumbrance of (i) any additional shares of capital stock of capital stock
of any class (including shares of Common Stock), or any securities or rights
convertible into, exchangeable for, or evidencing the right to subscribe for
any shares of capital stock, or any rights, warrants, options, calls,
commitments or any other agreements of any character to purchase or acquire
any shares of capital stock or any securities or rights convertible into,
exchangeable for, or evidencing the right
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to subscribe for, any shares of capital stock or (ii) any other securities
in respect of, in lieu of, or in substitution for, shares of Common Stock
outstanding on the date hereof;
(b) redeem, purchase or otherwise acquire, or propose to redeem,
purchase or otherwise acquire, any of its outstanding shares of Common
Stock;
(c) split, combine, subdivide or reclassify any shares of Common Stock
or declare, set aside for payment or pay any dividend, or make any other
actual, constructive or deemed distribution in respect of any capital stock
of the Company or otherwise make any payments to stockholders in their
capacity as such, other than the declaration and payment of regular
quarterly cash dividends on the Common Stock in an amount no greater than
$.18 per share and in accordance with past dividend policy and except for
dividends by a direct or indirect wholly owned Company Subsidiary;
(d) adopt a plan of complete or partial liquidation, dissolution,
merger, consolidation, restructuring, recapitalization or other
reorganization of the Company or any of the Company Subsidiaries (other than
the Merger);
(e) adopt any amendments to its Certificate of Incorporation or Bylaws
or alter through merger, liquidation, reorganization, restructuring or in
any other fashion the corporate structure or ownership of any direct or
indirect Company Subsidiary, except for Company Subsidiaries which are not
material to the assets, liabilities, financial condition or results of
operations of the Company and the Company Subsidiaries taken as a whole;
(f) make, or permit any Company Subsidiary to make, any material
acquisition, by means of merger, consolidation or otherwise, or material
disposition, of assets or securities;
(g) other than in the ordinary course of business consistent with past
practice, incur, or permit any Company Subsidiary to incur, any material
indebtedness for borrowed money or guarantee any such indebtedness or make
any material loans, advances, or capital contributions to, or other material
investments in, any person other than the Company or any Company Subsidiary;
(h) change any method of accounting or accounting practice by the
Company or any Company Subsidiary, except for such required change in GAAP
or applicable statutory accounting principles;
(i) permit any Company Insurance Subsidiary to materially change its
investment guidelines or policies or
-15-
conduct transactions in investments except in material compliance with the
investment guidelines and policies of such Company Insurance Subsidiary
and all applicable insurance laws;
(j) enter, or permit any Company Insurance Subsidiary to enter, into
any material reinsurance, coinsurance or similar agreement, whether as
reinsurer or reinsured, except in the ordinary course of business consistent
with past practice;
(k) (x) take, or agree or commit to take, or permit any Company
Subsidiary to take, or agree or commit to take, any action that would make
any representation and warranty of the Company hereunder inaccurate in any
material respect at the Closing (except for representations and warranties
which speak as of a particular date, which need be accurate only as of such
date), (y) omit, or agree or commit to omit, or permit any Company
Subsidiary to omit, or agree or commit to omit, to take any action necessary
to prevent any such representation and warranty from being inaccurate in any
material respect at the Closing (except for representations and warranties
which speak as of a particular date, which need be accurate only as of such
date), provided however that the Company shall be permitted to take or omit
to take such action which can be cured, and in fact is cured, at or prior to
the Closing, or (z) any action that would result in, or would be reasonably
likely to result in, any of the conditions set forth in Section 4 not being
satisfied; or
(l) authorize, recommend, propose or announce an intention to do any of
the foregoing, or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing.
Section 3.2. Covenants of the Purchaser. Except as otherwise
contemplated by this Agreement, the Purchaser will not, without the prior
written consent of the Company, which consent shall not be unreasonably
withheld, (x) take, or agree or commit to take, any action that would make any
representation and warranty of the Purchaser hereunder inaccurate in any
material respect at the Closing (except for representations and warranties which
speak as of a particular date, which need be accurate only as of such date), (y)
omit, or agree or commit to omit, to take any action necessary to prevent any
such representation and warranty from being inaccurate in any material respect
at the Closing (except for representations and warranties which speak as of a
particular date, which need be accurate only as of such date), provided however
that the Purchaser shall be permitted to take or omit to take such action which
can be cured, and in fact is cured, at or prior to the Closing, or (z) any
action that would result in, or would be reasonably likely to result in, any of
the conditions set forth in Section 4 not being satisfied.
-16-
Section 3.3. Proxy Statement; Stockholder Approval. The Company shall
call a special meeting of its stockholders (the "Stockholders' Meeting"), to be
held as soon as reasonably practicable after the date of this Agreement, for the
purpose of voting upon approval of the sale of Shares pursuant to this
Agreement, the issuance of shares of Company Common Stock pursuant to the Merger
Agreement, the Charter Amendment (as defined in the Merger Agreement) and such
other related matters as it deems appropriate. In connection with the
Stockholders' Meeting, (i) the Company shall prepare and file with the SEC a
Proxy Statement and mail such Proxy Statement to its stockholders, (ii) the
Board of Directors of the Company shall recommend to its stockholders the
approval of the sale of Shares pursuant to this Agreement and (subject to the
terms of the Merger Agreement) the issuance of shares of Common Stock pursuant
to the Merger Agreement and the Charter Amendment and (iii) the Board of
Directors and officers of the Company shall use their reasonable efforts to
obtain such stockholders' approval (subject to the terms of the Merger
Agreement).
Section 3.4. Approvals, Etc. Subject to the terms and conditions
provided herein, each of the parties hereto agrees to (i) promptly effect all
registrations, submissions and filings, including but not limited to, filings
under the HSR Act, submissions to the Insurance Regulators and filings required
under the Registration Agreement, which may be necessary or required in
connection with the consummation of the transactions contemplated by this
Agreement and, in the case of the Company, the Merger Agreement, (ii) to use all
reasonable efforts to take all other action and to do all other things
necessary, proper or advisable to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement and, in the case of
the Company, the Merger Agreement and (iii) use all reasonable efforts to obtain
all other necessary or appropriate waivers, consents and approvals with respect
to the transactions contemplated by this Agreement and, in the case of the
Company, the Merger Agreement.
Section 3.5. Exclusivity. The Company hereby agrees that, prior to the
Closing Date, the Company shall not solicit or accept alternative sources for
the investment contemplated by this Agreement. The Company further agrees that
it will not utilize any funds or other sources of financing to finance the
Merger without first consummating the full purchase and sale provided hereunder.
Section 3.6. Publicity. Neither the Company nor the Purchaser shall
make any public announcement concerning this Agreement or the other transactions
contemplated hereby without the prior written consent of the other, except as
may be required by law or stock exchange rule.
Section 3.7. Modification of Other Agreements. Without the prior
written consent of the Purchaser, the Company
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shall not amend in any material respect any provision of, or waive any condition
to the performance by the Company or its affiliates of any of their respective
obligations under, any of the Merger Documents or the Company Financing
Agreements.
Section 3.8. Exchange Listing. The Company shall as promptly as
practicable prepare and submit to the New York Stock Exchange ("NYSE") a listing
application covering the Shares, and shall use all reasonable efforts to obtain,
prior to the Closing, approval for the listing of the Shares on the NYSE,
subject to official notice of issuance.
Section 3.9. Investigation and Confidentiality. (a) Prior to the
Closing, the Company shall keep the Purchaser advised of all material
developments relevant to its business and to consummation of the Merger and the
sale of the Shares and shall permit the Purchaser to make or cause to be made
such investigation of its business and properties and of its financial and legal
condition as the Purchaser reasonably requests, provided that such investigation
shall be reasonably related to the transactions contemplated hereby and shall
not interfere unnecessarily with normal operations. The Purchaser agrees that it
will not, and will cause its officers, employees and agents not to, use any
information obtained pursuant to this Section 3.9 for any purpose unrelated to
the performance of the obligations under, or the consummation of the
transactions contemplated by, this Agreement or the Ancillary Agreements.
(b) The Purchaser agrees that the Confidentiality Agreement, dated
December 3, 1995, by and between Provident Life and Accident Insurance Company
of America and Centre ReSource Limited (the "Confidentiality Agreement"), shall
be binding upon the Purchaser and shall apply with respect to information
furnished by the Company or any of its Subsidiaries, or any of their respective
officers, employees, counsel, accountants and other authorized representatives
hereunder.
(c) Notwithstanding the provisions hereof, during the period prior to
the Closing Date, the parties shall take appropriate precautions to ensure that
competitively sensitive information is not exchanged in a manner which is
inconsistent with applicable law.
Section 3.10. State Takeover Laws; Charter Provisions. Each of the
Company and the Company Subsidiaries shall take all necessary action to ensure
that the entering into of this Agreement and the consummation of the sale of the
Shares and the other transactions contemplated hereby do not and will not result
in the grant of any rights to any Person under the Certificate of Incorporation,
Bylaws or other governing instruments of the Company or restrict or impair the
ability of the Purchaser to vote, or otherwise to exercise the rights of a
stockholder with respect to, shares of the Company that may be directly or
indirectly acquired or controlled by the Purchaser.
-18-
Section 3.11. Use of Proceeds. The proceeds from the sale of the Shares
shall be used to fund payments required to be made by the Company in connection
with the Merger.
Section 3.12. Marketing Agreement. The parties hereto agree to
negotiate in good faith, and execute prior to the Closing, the Marketing
Agreement, which agreement shall (i) be effective as of the Closing, (ii) have
terms consistent with the summary of terms attached hereto as Exhibit 1 and
(iii) have such other terms as the parties may agree to.
Section 3.13. Restrictive Agreements Prohibited. The Company shall not
become a party to any agreement which by its terms violates the terms of this
Agreement or any of the Ancillary Agreements.
SECTION 4. CLOSING CONDITIONS
Section 4.1. Conditions to Obligation of Purchaser. The obligation of
the Purchaser to purchase the Shares shall be subject to its satisfaction or
waiver of the following conditions on or before the Closing Date:
Section 4.1.1. Representations and Warranties Complete and Correct. The
representations and warranties of the Company contained in Section 2.1 hereof
which are qualified as to materiality or a Material Adverse Effect shall have
been true and correct when made and shall be true and correct at and as of the
Closing Date, after giving effect to the transactions contemplated by this
Agreement and the Merger Agreement, as if made on and as of such date (except
for representations and warranties which are confined to a specified date, which
shall be true and correct as of such date). The representations and warranties
of the Company contained in Section 2.1 hereof which are not qualified as to
materiality or a Material Adverse Effect shall have been true and correct in all
material respects when made and shall be true and correct in all material
respects at and as of the Closing Date, after giving effect to the transactions
contemplated by this Agreement and the Merger Agreement, as if made on and as of
such date (except for representations and warranties which are confined to a
specified date, which shall be true and correct in all material respects as of
such date).
Section 4.1.2. Compliance with this Agreement. The Company shall have
performed and complied in all material respects with all agreements, covenants
and conditions contained herein which are required to be performed or complied
with by it on or before the Closing Date.
Section 4.1.3. Officers' Certificate. The Purchaser shall have received
a certificate, dated the Closing Date and signed by the President or any Vice
President and attested by the Secretary of the Company, certifying that the
conditions set
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forth in Sections 4.1.1 and 4.1.2 are satisfied on and as of such date.
Section 4.1.4. Consents; Etc. The Company shall have received all
consents, approvals and other authorizations that may be required from, and made
all such filings and declarations that may be required with, any governmental
authority or agency pursuant to any law, statute, regulation or rule (federal,
state, local and foreign), or pursuant to any agreement, order or decree by
which the Company or any of its assets is bound, in connection with the
transactions contemplated by this Agreement.
Section 4.1.5. Supporting Documents. The Purchaser shall have received
copies of the following documents:
(i) (A) the Certificate of Incorporation, certified as of a recent date
by the appropriate authority of the Company's jurisdiction of incorporation;
and (B) a certificate of such authority dated as of a recent date as to the
due incorporation and good standing of the Company, and listing all
documents of the Company on file with said authority; and
(ii) a certificate of the Secretary or an Assistant Secretary of the
Company dated the Closing Date and certifying: (A) that attached thereto is
a true and complete copy of the Bylaws of the Company as in effect on the
date of such certification; (B) that attached thereto is a true and complete
copy of all resolutions adopted by the Board of Directors or the
stockholders of the Company authorizing the execution, delivery and
performance of this Agreement and the Ancillary Agreements, the issuance,
sale and delivery of the Shares, and that all such resolutions are in full
force and effect and are all the resolutions adopted in connection with the
transactions contemplated by this Agreement, the Marketing Agreement and the
Registration Agreement; (C) that the Certificate of Incorporation has not
been amended since the date of the last amendment referred to in the
certificate delivered pursuant to clause (i)(B) above; and (D) that the
Bylaws have not been amended since the date of the last amendment referred
to in such certificate pursuant to subclause (ii)(A) above.
Section 4.1.6. HSR Act. Any required waiting periods under the HSR Act
relating to the transactions to be consummated on the Closing Date shall have
expired or been terminated.
Section 4.1.7. Merger Closing. The closing under the Merger Agreement
shall have occurred or shall occur simultaneously with the Closing hereunder.
Section 4.1.8. Other Agreements. The Company shall have complied with
all agreements required to be complied with by it on or before the Closing Date
under the Ancillary Agreements.
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Section 4.1.9. Material Adverse Change. Except as disclosed in the SEC
Documents filed prior to the date hereof, or as set forth in Schedule 2.1.10 or
as a consequence of, or as contemplated by, this Agreement or the Merger
Agreement, since December 31, 1995, there shall not have occurred any change,
and no additional information shall have been disclosed to the Purchaser, which
is reasonably likely to have a material adverse effect on the financial
condition, results of operations, assets or liabilities of the Company and the
Company Subsidiaries, taken as a whole, or a material adverse effect on the
financial condition, results of operations, assets or liabilities of Revere and
its subsidiaries, taken as a whole.
Section 4.1.10. Illegality, Etc. No statute, rule or regulation, or
order, decree or injunction enacted, entered, promulgated or enforced by any
court or governmental authority shall be in effect which prohibits or restricts
the consummation of the transactions contemplated hereby.
Section 4.1.11. Stockholder Approval. Each of the sale of Shares
pursuant to this Agreement, the issuance of shares of Common Stock pursuant to
the Merger Agreement and the Charter Amendment shall have been duly approved by
the stockholders of the Company entitled to vote with respect thereto in
accordance with applicable law and the Certificate of Incorporation and Bylaws
of the Company and, in the case of the issuance of shares of Common Stock
pursuant to the Merger Agreement and the sale of the Shares, the rules of the
NYSE.
Section 4.1.12. Exchange Listing. The Shares shall have been approved
for listing on the NYSE, subject to official notice of issuance.
Section 4.1.13. Financing of Cash Payments in Merger. The Company shall
have obtained financing for the aggregate cash payments to be made to
stockholders of Revere in the Merger pursuant to the Company Financing
Agreements.
Section 4.1.14. ▇▇▇▇▇▇▇▇▇ Family Agreement. The Purchaser shall have
entered into an agreement with the members of the ▇▇▇▇▇▇▇▇▇ family, in form and
substance substantially in the form attached hereto as Exhibit 4.
Section 4.1.15. Legal Opinions. The Purchaser shall have received an
opinion or opinions of counsel to the Company, dated as of the Closing, covering
the matters set forth in Exhibit 5.
Section 4.2. Conditions to the Obligations of the Company. The
Company's obligation to sell the Shares shall be subject to the satisfaction or
waiver by it of the following conditions on or before the Closing Date:
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Section 4.2.1. Compliance with the Agreement. The Purchaser shall have
performed and complied in all material respects with all agreements and
conditions contained herein which are required to be performed or complied with
by it on or before the Closing Date.
Section 4.2.2. Purchaser's Representations and Warranties Complete and
Correct. The Purchaser's representations and warranties contained in Section 2.2
of this Agreement shall be true and correct in all material respects when made
and shall be true and correct in all material respects at and as of the Closing
Date, after giving effect to the transactions contemplated by this Agreement, as
if made on and as of such date.
Section 4.2.3. Officer's Certificate. The Company shall have received a
certificate, dated the Closing Date and signed by a duly authorized officer of
the Purchaser, certifying that the conditions set forth in Section 4.2.2 are
satisfied on and as of such date.
Section 4.2.4. Consents; Etc. The Company shall have received all
consents, approvals and other authorizations that may be required from, and made
all such filings and declarations that may be required with, any governmental
authority or agency pursuant to any law, statute, regulation or rule (federal,
state, local and foreign), or pursuant to any agreement, order or decree by
which the Company or any of its assets is bound, in connection with the
transactions contemplated by this Agreement.
Section 4.2.5. HSR Act. Any required waiting periods under the HSR Act
relating to the transactions to be consummated on the Closing Date shall have
expired or been terminated.
Section 4.2.6. Merger Closing. The closing under the Merger Agreement
shall have occurred or shall occur simultaneously with the Closing hereunder.
Section 4.2.7. Illegality, Etc. No statute, rule or regulation, or
order, decree or injunction enacted, entered, promulgated or enforced by any
court or governmental authority shall be in effect which prohibits or restricts
the consummation of the transactions contemplated hereby.
Section 4.2.8. Stockholder Approval. Each of the sale of Shares
pursuant to this Agreement, the issuance of shares of Common Stock pursuant to
the Merger Agreement and the Charter Amendment shall have been duly approved by
the stockholders of the Company entitled to vote with respect thereto in
accordance with applicable law and the Certificate of Incorporation and Bylaws
of the Company and, in the case of the issuance of shares of Common Stock
pursuant to the Merger Agreement and the sale of the Shares, the rules of the
NYSE.
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Section 4.2.9. Exchange Listing. The Shares shall have been approved
for listing on the NYSE, subject to official notice of issuance.
Section 4.2.10. Financing of Cash Payments in Merger. The Company shall
have obtained financing for the aggregate cash payments to be made to
stockholders of Revere in the Merger pursuant to the Company Financing
Agreements.
Section 4.2.11. Legal Opinions. The Company shall have received an
opinion or opinions of counsel to the Purchaser, dated as of the Closing,
covering the matters set forth in Exhibit 6.
SECTION 5. TERMINATION
Section 5.1. Termination. This Agreement may be terminated as follows:
(a) by mutual written consent of the Company and the Purchaser;
(b) by either party if the Closing shall not have occurred by May 28,
1997 (and the failure of the Closing to occur is not due to the breach by either
party of this Agreement);
(c) by either party if the Merger Agreement is terminated;
(d) by either party (provided that the terminating party is not then in
material breach of any representation, warranty, covenant or other agreement
contained in this Agreement) in the event of a breach by the other party of any
representation or warranty contained in this Agreement which cannot be or has
not been cured within 30 days after the giving of written notice to the
breaching Party of such breach and which breach would cause (i) in the case of a
breach by the Company, the conditions set forth in Section 4.1.1 not to be
satisfied (assuming the Closing were to occur on the date of such termination),
and (ii) in the case of a breach by the Purchaser, the conditions set forth in
Section 4.2.2 not to be satisfied (assuming the Closing were to occur on the
date of such termination); or
(e) by either party (provided that the terminating party is not then in
material breach of any representation, warranty, covenant or other agreement
contained in this Agreement) in the event of a material breach by the other
party of any covenant or agreement contained in this Agreement which cannot be
or has not been cured within 30 days after the giving of written notice to the
breaching party of such breach; or
(f) by either party (provided that the terminating party is not then in
material breach of any representation,
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warranty, covenant or other agreement contained in this Agreement) in the event
any court of competent jurisdiction in the United States or some other
governmental body or regulatory authority shall have issued an order permanently
restraining, enjoining or otherwise prohibiting the sale of the Shares and such
order shall have become final and nonappealable; provided that the party seeking
to terminate this Agreement pursuant to this Section 5.1(f) shall have used all
reasonable efforts to remove such order; or
(g) by either party, if the sale of the Shares, the issuance of shares
of Common Stock in the Merger and the Charter Amendment shall have been voted on
by stockholders of the Company and the vote shall not have been sufficient to
satisfy the conditions set forth in Sections 4.1.11 and 4.2.8.
Section 5.2. Effect of Termination. In the event of the termination of
this Agreement pursuant to Section 5.1, this Agreement shall forthwith become
void and have no effect, without any liability on the part of any party hereto,
other than the provisions of Sections 3.6, 3.9(b), 5.2, 5.3 and 6.1, which shall
survive any such termination. Nothing contained in this Section 5.2 shall
relieve any party from liability for any willful breach of this Agreement.
Section 5.3. Termination Fee. The Company hereby agrees that if the
Merger Agreement (or any similar agreement entered into by the Company (and/or
one or more of its affiliates) and Revere (or one or more of its affiliates)
which contemplates a business combination involving the Company and Revere or
sale of a majority of the equity interests or assets of the Company or Revere to
the other) is terminated and, in connection with such termination, the Company
(or any of its affiliates) receives a termination or similar fee (a "Termination
Fee"), the Company shall pay to the Purchaser, on the date a Termination Fee is
paid to the Company (or such affiliates), a cash fee in an amount equal to 20%
of the aggregate Termination Fee, payable in immediately available funds to an
account specified by the Purchaser.
SECTION 6. MISCELLANEOUS
Section 6.1. Expenses and Indemnification. (a) The Company hereby
agrees to pay or reimburse the Purchaser and its affiliates for all
out-of-pocket expenses (including the reasonable fees and disbursements of legal
counsel and investment and other advisors and consultants and expenses incurred
in connection with the preparation of the letter agreement dated April 27, 1996
(the "Commitment Letter"), this Agreement and the Ancillary Agreements) incurred
by any of them in connection with the Purchaser's consideration of various
proposed financing and other transactions between the Purchaser and/or its
affiliates and the Company and the transactions referred to herein, including,
without limitation, the transactions contemplated
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hereby and by the Merger Agreement, whether incurred before or after the date
hereof and whether or not such transactions are made or effected; provided that
the aggregate of such amounts shall not exceed $1,500,000 and the Company shall
not be obligated to make such payment or reimbursement prior to the earlier of
(i) the Closing Date and (ii) termination of this Agreement. Any such amounts
shall be paid or reimbursed promptly after invoicing thereof by the Purchaser
which invoicing shall be accompanied by supporting detail evidencing such
expenses.
(b) In addition to the foregoing the Company agrees to indemnify and
hold harmless the Purchaser and any of its officers, partners, members,
directors, employees and affiliates (direct or indirect) from and against all
actions, suits, proceedings (including any investigations or inquiries), claims,
losses, damages, liabilities or expenses of any kind or nature whatsoever
("Claims") which may be incurred by or asserted against or involve the
Purchaser, or any of its officers, partners, members, directors, employees or
affiliates (direct or indirect) as a result of any third party claim arising out
of the transactions contemplated hereby and, upon demand by the Purchaser or any
such officer, partner, member, director, employee or affiliates, pay or
reimburse any of the Purchaser or such officers, partners, members, directors,
employees or affiliates for any reasonable out-of-pocket legal or other
expenses, and other internal costs incurred by the Purchaser or its officers,
partners, members, directors, employees or affiliates (direct or indirect) in
connection with the investigation, defending or preparing to defend any such
Claim, provided that the foregoing indemnity shall not apply to the extent any
Claim arises from any material breach by the Purchaser of this Agreement or the
gross negligence or willful misconduct of an indemnified party.
(c) Each person entitled to indemnification under Section 6.1(b) (each
an "Indemnified Party") shall give notice to the Company promptly after such
Indemnified Party has actual knowledge of any Claim as to which indemnity may be
sought, and shall permit the Company to assume the defense of any such Claim;
provided, that counsel for the Company, who shall conduct the defense of such
Claim, shall be approved by the Indemnified Party (which approval shall not be
unreasonably withheld) and the Indemnified Party may participate in such defense
at such party's expense (unless the Indemnified Party shall have reasonably
concluded that there is a conflict of interest between the Indemnified Party and
the Company in such action, in which case the reasonable fees and expenses for
one such counsel for all Indemnified Parties (and one local counsel) shall be at
the expense of the Company), and provided, further, that the failure of any
Indemnified Party to give notice as provided herein shall not relieve the
Company of its obligations under Section 6.1(b) or this Section 6.1(c) unless
the Company is materially prejudiced thereby. The Company may not, in the
defense of any such Claim, except with the consent of each Indemnified Party
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(which consent shall not be unreasonably withheld or delayed), consent to entry
of any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
Indemnified Party of a release from all liability in respect of such Claim. Each
Indemnified Party shall furnish such information regarding itself or the Claim
in question as the Company may reasonably request in writing and as shall be
reasonably required in connection with the defense of such Claim.
Section 6.2. Survival of Agreements. The representations and warranties
(i) of the Company set forth in Sections 2.1.1, 2.1.2, 2.1.3, 2.1.4, 2.1.5,
2.1.7, 2.1.12, 2.1.15 and 2.1.17 hereof and (ii) of the Purchaser set forth in
Sections 2.2.1, 2.2.2, 2.2.3, 2.2.4, 2.2.6, 2.2.7 and 2.2.8 shall survive the
Closing indefinitely. None of the other agreements, representations or
warranties made in this Agreement, or any certificate or instrument delivered to
the Purchaser pursuant to or in connection therewith shall survive the Closing;
provided, however, that this Section 6.2 shall not limit any (x) covenant or
agreement of the parties hereto which by its terms contemplates performance
after the Closing Date or (y) rights or remedies otherwise available to the
Company or the Purchaser at law or in equity; provided, further, that the
Confidentiality Agreement shall survive any termination of this Agreement.
Section 6.3. Parties in Interest. All representations, covenants and
agreements contained in this Agreement by or on behalf of any of the parties
hereto shall bind and inure to the benefit of the respective successors and
assigns of the parties hereto whether so expressed or not; provided that the
Purchaser shall not assign its rights to purchase shares of Common Stock under
this Agreement to any non affiliate without first obtaining the prior written
consent of the Company, which consent may be withheld by the Company in its sole
discretion.
Section 6.4. Notices. All notices, requests, consents and other
communications hereunder shall be in writing and shall be delivered in person or
mailed by certified or registered mail, return receipt requested, or sent by
facsimile transmission, addressed as follows:
(a) if to the Company:
Provident Companies, Inc.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & Bird
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
-▇▇-
▇▇▇▇▇▇▇▇▇: ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to the Purchaser:
Zurich Insurance Company
▇▇▇▇▇▇▇▇▇▇ ▇
▇.▇. ▇▇▇ ▇▇-▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇
Attention: General Counsel
Fax No.: ▇▇▇-▇▇▇-▇▇▇-▇▇▇▇
with copies to:
Zurich Center Resource Limited
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
or, in any such case, at such other address or addresses as shall have been
furnished in writing by such party to the others. All notices, requests,
consents and other communications hereunder shall be deemed to have been duly
given or served on the date on which personally delivered or on the date
actually received, if sent by mail or telex, with receipt acknowledged.
Section 6.5. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to conflicts of law principles thereof.
Section 6.6. Entire Agreement. This Agreement, including the Schedules
and Exhibits hereto, constitutes the sole and entire agreement of the parties
with respect to the subject matter hereof. All Schedules and Exhibits hereto are
hereby incorporated herein by reference. The Commitment Letter shall hereby be
deemed to be terminated.
Section 6.7. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 6.8. Amendments. This Agreement may not be amended or modified,
and no provisions hereof may be waived, without the written consent of the
Company and the Purchaser.
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Section 6.9. Severability. If any provision of this Agreement shall be
declared void or unenforceable by any judicial or administrative authority, the
validity of any other provision and of the entire Agreement shall not be
affected thereby.
Section 6.10. Titles and Subtitles. The titles and subtitles used in
this Agreement are for convenience only and are not to be considered in
construing or interpreting any term or provision of this Agreement. The term
"date of this Agreement" and words of similar import (such as "date hereof")
shall mean and refer to May 31, 1996.
Section 6.11. Further Assurances. From and after the date of this
Agreement, upon the request of the Purchaser or the Company, the Company and the
Purchaser shall execute and deliver such instruments, documents and other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement and the
Preferred Shares.
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IN WITNESS WHEREOF, the Company and the Purchaser have executed this
Agreement as of the day and year first above written.
PROVIDENT COMPANIES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Executive Vice President
ZURICH INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Title: Representative
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EXHIBIT 1
Terms of Merger Agreement
The strategic relationship described herein will be set forth in a "Marketing
Agreement" entered into by the parties. The concepts listed below require
further discussions to develop them fully, but it is contemplated that the
Marketing Agreement would include the following:
1. Provident intends to continue to offer a wide range of Individual
and Employee Benefit products to its customers, through multiple
distributions channels. Provident would agree to utilize products
developed by Zurich whenever possible to meet its customers'
needs. In the Individual marketplace, these products opportunities
may include term life, whole life, universal life, variable
universal life, individual property and casualty insurance
products, and fixed and variable annuities. When a "Zurich
product" is sold, Provident would expect to receive consideration
"normal and customary" for the business and would expect to have
reasonable opportunity to participate as a reinsurer on this
business.
2. Provident intends to expand its offerings of retirement/asset
accumulation products to its Individual and Employee Benefits
customers. It would be Provident's intent, depending on the
products' design and features, to offer to its customers mutual
funds and institutional asset management services offered by
Zurich. As Provident considers integrating life and investment
product features into its Disability products, Provident would
intend to utilize Zurich's products, as appropriate, in these new
product offerings. Provident would again expect "normal and
customary" consideration when placing business in this capacity.
3. Zurich would agree to market Provident's Individual Disability
product through its U.S. marketing channels whenever possible,
including ▇▇▇▇▇▇. The terms of such an agreement would be similar
to those used in other "Corporate Agreements", where Zurich would
receive consideration for acting as an intermediary. Provident
would also intend to offer Zurich the opportunity to reinsure a
portion of this business if appropriate.
4. Zurich and Provident would jointly explore opportunities to market
Individual and Group Disability products outside the U.S. In
general it would be expected that Provident would contribute its
product
and risk management expertise, while Zurich would contribute its
local market knowledge and marketing capabilities.
5. Zurich and Provident would jointly explore opportunities which may
exist in linking Group Long-Term Disability coverage with Workers
Compensation coverage. Both companies recognize the potential
market for a "24 hour" coverage and would commit the resources
necessary to investigate whether a mutually acceptable opportunity
may exist.
6. Zurich and Provident would continue to seek other opportunities to
leverage each other's strengths, and to bring better value and
service to both organizations' customers. This may include
reinsurance transactions and potential investment management
ventures.
7. If Provident elects to engage in a significant reinsurance
transaction with respect to its Individual Disability block of
business, Provident will give Zurich the right to provide such
reinsurance on market terms. Provident agrees to offer to Zurich
the opportunity to propose other reinsurance transactions and
investment management arrangements and to consider such proposals
in good faith.
The strategic initiatives outlined above would not be finalized prior to the
closing of the other "Investor Transactions" described in the letter agreement
to which this Exhibit is attached. Provident and Zurich would however expect to
refine the understanding noted above and have such an understanding documented
in a general "Marketing Agreement".
Each of Zurich and Provident would commit up to $1.5 million to a joint
marketing/development program to fund the expenses and/or hire dedicated staff
to pursue the relationship.
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