EXHIBIT (99) - 3
TORCHMARK CORPORATION
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000-2186
May 8, 2000
Xxxxx X. Xxxxxx, Manager
Birmingham Investment Group, LLC
Birmingham, Alabama 35203
Re: Sale of shares of Vesta Insurance Group, Inc.
Dear Xx. Xxxxxx:
This letter agreement evidences an agreement (the "Agreement") between
Torchmark Corporation, a Delaware corporation ("Seller") and Birmingham
Investment Group, LLC, a Delaware limited liability company ("Buyer") with
reference to Buyer's purchase of 3,750,000 shares of the common stock, par
value $.01 (the "Shares") of Vesta Insurance Group, Inc. (the "Company")
presently owned by Seller and one of its subsidiaries, as follows:
1. PURCHASE. Subject to the terms and conditions of this
Agreement, Xxxxx agrees to purchase the Shares from Seller, who agrees to
sell the Shares to Buyer for a cash price of $6.25 per share for all Shares
purchased in May, 2000, but beginning June 1, 2000, the price increases by
$0.05 per share each calendar month (as applicable, the "Purchase Price").
For example, the Purchase Price per share for all shares purchased in June,
2000 is $6.30 and the Purchase Price per share for all shares purchased in
May, 2001 is $6.85.
2. RIGHT OF FIRST REFUSAL. The Shares may be subject to a right
of first refusal in favor of the Company (the "Refusal Right"). Within five
days after the date of this Agreement, Seller will give Company the notice
it is required to give under the Refusal Right (the "Sale Notice"). If
Company exercises its Refusal Right within 30 days after receipt of the
Sale Notice and closes the purchase of the Shares within five business days
after it gives Seller notice of that exercise, this Agreement will
automatically terminate. Upon termination, the Deposit (hereafter defined)
will be returned to Buyer, together with interest on the Deposit from its
receipt by Torchmark at the rate of 5.5% per annum, and each party will be
relieved of any further liability under this Agreement. If the Company does
not exercise its Refusal Right and close the purchase of the Shares within
the time required, Seller will so notify Buyer in writing (the "Notice").
3. REGULATORY APPROVALS.
(a) Except as set forth in subparagraph (b) of this
Paragraph 3, the obligation of the parties to close the sale of the Shares
is subject to the approval of the insurance regulatory authorities of the
states of domicile of the insurance subsidiaries of Company and the
expiration of the waiting periods under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and any other
regulatory approvals which may be required, herein collectively referred to
the "Regulatory Approvals." Buyer must file the required applications
necessary to seek the Regulatory Approvals within ten days after receiving
the Notice and must diligently pursue obtaining the Regulatory Approvals.
(b) Approval of the insurance regulatory authorities may
not be required until Xxxxx has purchased only that number of shares that
does not give Buyer control of the Company, and the HSR Act may not apply
until the total amount paid to Seller is at least $15,000,000. If Buyer
elects to purchase any Shares prior to obtaining Regulatory Approvals, it
will furnish an opinion of Xxxxx's counsel, addressed to Seller in form and
content reasonably acceptable to Seller to the effect that Regulatory
Approval is not required, supported by an affidavit of the chief executive
officer of Buyer, reasonably acceptable to Seller, with the facts
supporting that opinion.
(c) Seller agrees to cooperate with Xxxxx and use
commercially reasonable efforts to assist Xxxxx in obtaining any required
Regulatory Approvals, but Seller is not required to incur out-of-pocket
expenses or institute litigation.
4. PURCHASE OF SHARES. Subject to obtaining the Regulatory
Approvals, if required, Buyer may purchase any number of Shares in 100,000
Share increments at any time prior to April 30, 2001, but Buyer must
purchase all of the Shares no later than May 31, 2001 (the "Final Closing
Date"). The Purchase Price is set forth in Paragraph 1, based on the month
a sale is closed.
5. DEPOSIT; DEFAULT; REMEDIES.
(a) Buyer has paid Seller the sum of $1 million (the
"Deposit") to secure its obligations, and for the right to seek any
necessary Regulatory Approvals and to purchase the Shares under this
Agreement, (This Agreement must be signed and the Deposit paid to Seller
before Seller is obligated to notify Company under Paragraph 2.) The
Deposit is non-refundable for any reason except (i) Seller's default, or
(ii) termination of this Agreement under Paragraph 2. If Buyer purchases
the Shares, the Deposit will be applied to the Purchase Price, at the rate
of $26,700 for each 100,000 Shares purchased, until the entire $1 million
has been applied. For example, if the first purchase by Buyer is of 500,000
Shares, $133,500 will be applied to the Purchase Price for those Shares.
After the first Closing, the term "Deposit" means the original $1 million,
less any portion applied to the Purchase Price for Shares purchased.
(b) Xxxxx's Default. If Buyer does not purchase all of
the Shares by the Final Closing Date under Paragraph 4, for any reason
other than Seller's default or termination under Paragraph 2, Seller will
retain the Deposit. Buyer expressly assumes the risk of obtaining the
Regulatory Approvals and Seller is entitled to retain the Deposit as
liquidated damages and as consideration for the rights given Buyer, even if
Buyer does not obtain any necessary Regulatory Approvals. Xxxxx agrees
that: (i) in entering into this Agreement, Seller may be foreclosing the
possibility of selling the Shares to another party or parties, (ii) the
Deposit is reasonable consideration to Seller for the rights accorded Buyer
under this Agreement, and (iii) the Deposit represents reasonable
liquidated damages in view of the difficulty of determining actual damages.
Seller agrees that the right to retain the Deposit is its sole remedy for
Xxxxx's failure to purchase the Shares for any reason, other than Seller's
default.
(c) Seller's Default. If Seller defaults under this
Agreement, Buyer may pursue any available legal or equitable remedy,
including an action for specific performance.
6. CLOSING. Buyer shall give Seller at least two business days
notice prior to any purchase of the Shares. Each Closing of the purchase of
the Shares (the "Closing[s]") will be held at the offices of Seller.
(a) At the first Closing, Seller must deliver to Buyer:
(i) a certified copy of a resolution adopted by
Xxxxxx's board of directors reflecting the approval of this Agreement and
the authority of the officer signing the transfer; and
(ii) a certificate signed by the Vice-President and
General Counsel of Seller that Seller's representations and warranties in
Paragraph 7 are true and correct.
(b) At the first Closing, Xxxxx must deliver to Seller:
(i) a certified copy of a resolution adopted by
Xxxxx's Manager reflecting approval of this Agreement and the authority of
the officer closing the purchase; and
(ii) a certificate signed by the chief executive
officer of Buyer that Xxxxx's representations and warranties in Paragraph 8
are true and correct.
(c) At all Closings, Seller must deliver to Buyer a
certificate or certificates representing the Shares sold at that Closing,
duly endorsed in blank or accompanied by stock powers duly endorsed in
blank, in proper form for transfer.
(d) At all Closings, Xxxxx must deliver to Seller the
Purchase Price for the Shares sold at that Closing, less the amount of the
Deposit applied to the Purchase Price at that Closing, by payment in
immediately available funds by wire transfer in lawful money of the United
States to an account or accounts designated by notice to Buyer.
(e) If the Shares being sold at any Closing are owned by
Seller's subsidiary, Seller obligates itself to cause that subsidiary to
deliver the items required by Paragraph 6(a) by that subsidiary, and the
Purchase Price for those Shares must be paid to that subsidiary.
(f) If applicable, Xxxxx must also deliver the opinion
and affidavit required under Paragraph 3(b) of this Agreement.
(g) The obligation of each party to close is subject to
the absence of a material breach of a representation, warranty or covenant
of the other party which is not cured within ten days from written notice
by the non-breaching party.
7. SELLER'S REPRESENTATIONS AND WARRANTIES; DISCLAIMER. Seller
represents and warrants to Buyer as follows:
(a) Authority. Seller is a corporation duly organized,
validly existing and in good standing under the laws of Delaware and has
all requisite corporate power and authority to enter into this Agreement
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by the Seller and the consummation by the Seller
of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of Seller. This Agreement has been
duly executed and delivered by the Seller and constitutes a valid and
binding obligation of the Seller enforceable in accordance with its terms
except as enforcement may be limited by bankruptcy, insolvency, and other
similar laws affecting the enforcement of creditors' rights generally and
except that the availability of equitable remedies, including specific
performance, is subject to the discretion of the court before which any
proceeding therefor may be brought.
(b) No Conflicts. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated
hereby will not, conflict with, or result in any violation of or default
(with or without notice or lapse of time, or both) under, or require the
consent of any person, corporation, partnership, Governmental Entity (as
hereafter defined) or any other entity (each, a "Person") under any
provision of the Certificate of Incorporation or By-Laws of Seller or any
trust agreement, loan or credit agreement, note, bond, mortgage, indenture,
lease or other agreement, instrument, permit concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to the Seller, its subsidiaries or to their property
or assets.
(c) No Consents. Except for the necessity to obtain the
Regulatory Approvals, no consent, order or authorization of, or
registration, declaration or filing with, any court of competent
jurisdiction, administrative agency or commission or other governmental
authority (each, a "Governmental Entity") is required by or with respect to
the Seller in connection with the execution and delivery of this Agreement
or the consummation by the Seller and its subsidiary of the transactions
contemplated hereby.
(d) Title to the Shares. The Seller and its subsidiary
are the owner (both beneficially and of record) of the Shares, free of any
claim or encumbrance in favor of any third person, except for the Refusal
Right.
(e) No Brokers. No agent, broker, investment banker or
other firm or Person is or will be entitled to any broker's or finder's
fees or any other commission or similar fee from the Seller or any of its
affiliates in connection with any of the transactions contemplated by this
Agreement.
(f) Disclaimer. Seller expressly disclaims any
representations or warranties concerning the financial condition of
Company, its prospects or the value of the Shares, nor does it make any
representations except those expressly set forth in this Paragraph.
8. BUYER'S REPRESENTATION AND WARRANTIES; DISCLAIMER. Buyer
represents and warrants to the Seller as follows:
(a) Authority. The Buyer is duly organized, validly
existing and in good standing under the laws of the State of Delaware and
has all requisite corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement by the Buyer and the consummation
by the Buyer of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Buyer. This
Agreement has been duly executed and delivered by the Buyer and constitutes
a valid and binding obligation of the Buyer enforceable in accordance with
its terms except as enforcement may be limited by bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights generally
and except that the availability of equitable remedies, including specific
performance, is subject to the discretion of the court before which any
proceeding therefor may be brought.
(b) No Conflicts. The execution and delivery of this
Agreement do not, and the consummation of the transactions contemplated
hereby will not, conflict with, or result in any violation of or default
(with or without notice or lapse of time, or both) under, or require the
consent of any Person under, any provision of the Certificate of
Incorporation or By-Laws of the Buyer or any trust agreement, loan or
credit agreement, note, bond, mortgage, indenture, lease or other
agreement, instrument, permit, concession, franchise, license, judgment,
order, decree, statute, law, ordinance, rule or regulation applicable to
the Buyer or it its property or assets.
(c) No Consents. Except for the Regulatory Approvals, no
approval, order or authorization of, or registration, declaration or filing
with, any Government Entity is required by or with respect to the Buyer in
connection with the execution and delivery of this Agreement or the
consummation by the Buyer of the transactions contemplated hereby.
(d) Investment Intent; Securities Act. The Shares
purchased by the Buyer under this Agreement will be acquired for investment
only and not with a view to any public distribution thereof. Buyer will not
offer to sell or otherwise dispose of any Shares so acquired by it in
violation of any of the registration requirements of the Securities Act of
1933, as amended, and Buyer is an "Accredited Investor" under that act and
the rules promulgated thereunder.
(e) No Brokers. No agent, broker, investment banker or
other firm or Person is or will be entitled to any broker's or finder's
fees or any other commission or similar fee from the Buyer or any of its
affiliates in connection with any of the transactions contemplated by this
Agreement.
(f) Disclaimer. Xxxxx agrees that, in entering into this
Agreement:
(i) it has conducted due diligence with respect
Company, including without limitation, the financial condition and business
prospects of Company, as well as the value of the Shares and Buyer has
satisfied itself with respect to the Company, its financial condition and
the value of the Shares;
(ii) it is aware of, and assumes the risk of, any
proposed surplus adjustments to Company's capital and surplus account
resulting from the examination of Company by certain insurance regulatory
authorities;
(iii) it is aware of, and assumes the risk of, the
currently pending stockholder litigation against the Company;
(iv) it presently owns other stock in Company, has a
representative on Company's board of directors, and is familiar with
Company's financial condition and prospects; and
(v) it has not relied on any express or implied
representation or warranty by Seller not expressly contained in this
Agreement, including, without limitation, any express or implied
representation or warranty concerning the financial condition of the
Company or the value of the Shares.
Therefore, Seller has no liability to Buyer with respect to the financial
condition of the Company or the value of the Shares. The Seller's only
liability to the Buyer in connection with the purchase of the Shares is for
a breach of an express representation, warranty or covenant contained in
this Agreement.
9. PUBLICITY. Seller and Xxxxx shall, subject to their
respective legal obligations, consult with each other, and use reasonable
efforts to agree upon the text of any statement, before issuing any press
release or otherwise making public statements with respect to the
transactions contemplated hereby and in making any filings with any
Governmental Entity or with any national securities exchange with respect
thereto.
10. GENERAL PROVISIONS.
(a) Expenses. Whether or not any Closings occur, all
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby will be paid by the party incurring such
expense.
(b) Entire Agreement; Amendment; No Third-Party
Beneficiaries. This Agreement (i) constitutes the entire agreement between
the parties and supersedes all prior agreements and understandings, both
written and oral, concerning the subject matter hereof; (ii) may be amended
only by a document signed by both parties, and (iii) is not intended to
confer upon any Person other than the parties hereto any rights or remedies
hereunder.
(c) Notices. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered
personally, mailed by certified mail (return receipt requested), or sent by
confirmed facsimile to the parties at the following addresses (or such
other address for a party as shall be specified by like notice):
(i) if to Seller, to
Torchmark Corporation
0000 X. Xxxxxxxxxxx Xxxxx
P.O. Box 8080
McKinney, TX 75070-8080
Facsimile: (000) 000-0000
Attention: X.X. Xxxxxx
Chairman of the Board and Chief Executive
Officer
With a copy to:
Torchmark Corporation
0000 X. Xxxxxxxxxxx Xxxxx
P.O. Box 8080
McKinney, TX 75070-8080
Attention: Xxxxx Xxxxxxxxx
General Counsel
(ii) if to Buyer
Birmingham Investment Group, LLC
Attn: Xxxxx X. Xxxxxx, Manager
00 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile (000) 000-0000
with a copy to:
X. Xxxxxxx XxXxxxxxx, Jr.
Xxxxxxx, Xxxxxxxxx & Xxxxx, L.L.C.
1200 AmSouth/Xxxxxxx Plaza
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Facsimile (000) 000-0000
(d) Assignment. This Agreement may not be assigned by
Seller without the express, advance written consent of Buyer. This
Agreement may not be assigned by Buyer without Seller's written consent,
unless: (i) the assignee agrees in writing to be bound by this Agreement,
(ii) the assignment does not relieve Seller from any liability under this
Agreement, and (iii) the assignment does not require another Sale Notice
under the Refusal Right.
(e) Invalid Provision. If any provision of this Agreement
is held to be illegal, invalid or unenforceable under any present or future
law, and if the rights or obligations of the Seller or the Buyer under this
Agreement are not materially and adversely affected thereby, (i) such
provision shall be fully severable, (ii) this Agreement shall be construed
and enforced as if such illegal, invalid or unenforceable provision had
never been a part hereof, (iii) the remaining provisions of this Agreement
shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance herefrom,
and (iv) in lieu of such illegal, invalid, or unenforceable provision,
there shall be added automatically as part of this Agreement a legal, valid
and enforceable provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible.
(f) Time. Time is of the essence in this Agreement.
Unless a period of time expressed in days refers to "business days," it
means calendar days.
(g) Survival. Representations and warranties survive all
Closings, or termination of this Agreement.
If the foregoing correctly evidences the Agreement, please
signify by signing in the space provided below and returning a signed copy
to the undersigned.
Yours very truly,
TORCHMARK CORPORATION
By: /s/ X.X. Xxxxxx
-----------------------------
X.X. Xxxxxx, Chairman and CEO
ACCEPTED AND AGREED TO:
BIRMINGHAM INVESTMENT GROUP, LLC
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Xxxxx X. Xxxxxx, Manager
