<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
January 15, 1994
_________________________________________________________________
Date of Report (Date of earliest event reported)
I.C.H. Corporation
_________________________________________________________________
(Exact name of Registrant as specified in its charter)
Delaware 1-7697 43-6069928
_________________________________________________________________
(State or other jurisdiction (Commission (IRS employer
of incorporation file no.) identification no.)
100 Mallard Creek Road, Louisville, Kentucky 40207
_________________________________________________________________
(Address of principal executive offices, including zip code)
(502) 894-2100
_________________________________________________________________
(Registrant's telephone number, including area code)
Not Applicable
_________________________________________________________________
(Former name or former address, if changed since last report)
This filing contains 128 pages.
The Exhibit Index appears on page 3.
<PAGE>
ITEM 5. OTHER EVENTS.
On January 15, 1994, I.C.H. Corporation ("ICH") entered into a
series of agreements pursuant to which:
1. ICH will repurchase from its controlling stockholder,
Consolidated National Corporation ("CNC"), the 100,000 shares
(100%) of Class B Common Stock held by CNC at a price of $5 per
share, and cancel the Class B Common Stock;
2. CNC, and its subsidiary, Consolidated Fidelity Life
Insurance Company ("CFLIC"), will sell to Stephens, Inc.
("Stephens") a total of 4,456,820 shares of Common Stock of ICH at
a price of $5 per share;
3. CNC and CFLIC will sell to Torchmark Corporation
("Torchmark") a total of 4,677,243 shares of Common Stock of ICH at
a price of $5 per share; and
4. ICH and CNC will terminate the Management and Consulting
Agreement, dated December 27, 1984, to which they are parties, and
ICH will enter into an Independent Contractor and Services
Agreement with each of Robert T. Shaw and C. Fred Rice, each of
whom is an officer, director and stockholder of CNC.
Attached to this Report as Exhibits 1 through 6, and incorpo-
rated herein by reference, are copies of the agreements evidencing
the terms of the above transactions. The closing of the above
transactions is scheduled to occur simultaneously upon the
satisfaction, or waiver, of all of the conditions to closing set
out in the Stock Purchase Agreements attached as hereto as Exhibits
1, 2 and 3.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION,
AND EXHIBITS.
The description of the documents in the Index of Exhibits on
page 3 of this Current Report on Form 8-K is incorporated by
reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned hereunto duly authorized.
I.C.H. Corporation
/s/ John T. Hull
By:_____________________________
John T. Hull, Executive Vice
President and Treasurer
Date: January 26, 1994
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Sequential
Exhibit No. Document Description Page No.
<S> <C> <C>
1 Stock Purchase Agreement, dated 4
January 15, 1994, among Consoli-
dated National Corporation, Con-
solidated Fidelity Life Insurance
Company, I.C.H. Corporation and
Torchmark Corporation
2 Stock Purchase Agreement, dated 59
January 15, 1994, among Consoli-
dated National Corporation, Con-
solidated Fidelity Life Insurance
Company, I.C.H. Corporation and
Stephens, Inc.
3 Stock Purchase Agreement, dated 114
January 15, 1994, between Consol-
idated National Corporation and
I.C.H. Corporation
4 Letter, dated January 15, 1994, 123
from I.C.H. Corporation to
Robert T. Shaw
5 Letter, dated January 15, 1994, 125
from I.C.H. Corporation to
Robert T. Shaw
6 Letter, dated January 10, 1994, 126
from I.C.H. Corporation to Con-
solidated National Corporation
</TABLE>
<PAGE>
EXHIBIT NO. 1
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT ("Agreement"), made and entered into
as of January 15, 1994, among I.C.H. Corporation, a Delaware
corporation (the "Company"), Consolidated National Corporation, a
Kentucky Corporation ("CNC"), Consolidated Fidelity Life Insurance
Company, a Kentucky life insurance corporation ("CFLIC"), Robert T.
Shaw ("RTS"), C. Fred Rice ("CFR") and Torchmark Corporation, a
Delaware corporation ("Purchaser").
RECITALS
A. CNC desires to sell to Purchaser, and Purchaser desires
to purchase from CNC, 4,457,243 shares (the "CNC Shares") of Common
Stock, par value $1.00 per share, of the Company (the "Common
Stock").
B. CFLIC desires to sell to Purchaser, and Purchaser desires
to purchase from CFLIC, 220,000 shares of Common Stock (the "CFLIC
Shares" and, together with the CNC Shares, the "Shares").
C. CNC, CFLIC, RTS and CFR are collectively referred to as
"Sellers."
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements herein
contained, and on the terms and subject to the conditions herein
set forth, the parties hereto hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF STOCK
Upon the terms and subject to the conditions set forth in this
Agreement, CNC hereby agrees to sell to Purchaser at the Closing
(the "Closing") the CNC Shares, and CFLIC hereby agrees to sell to
Purchaser at the Closing the CFLIC Shares, free and clear of all
liens, security interests, pledges, charges, claims, options,
encumbrances of every kind, escrows, rights of first refusal,
mortgages, indentures, security agreements or other agreements,
arrangements, contracts, commitments, understandings, adverse
claims, and obligations, whether written or oral and whether or not
relating in any way to credit or the borrowing of money (collec-
tively, "Claims"), and Purchaser agrees to purchase the Shares at
the price of $5.00 per share for a total purchase price of
$23,386,215 at the Closing.
ARTICLE 2
CLOSING
2.1 Date and Place of Closing. The Closing for the purchase
and sale of the Shares shall be consummated simultaneously and pari
passu with the closing of the transactions contemplated by (i) that
certain Stock Purchase Agreement, dated January 15, 1994, among
Stephens Inc. (or an affiliate of Stephens Inc.), the Sellers and
the Company (the "Stephens Agreement") and (ii) that certain Stock
Purchase Agreement, dated January 15, 1994, between the Company and
CNC (the "Class B Agreement"), a copy of which is attached hereto
as Exhibit A. The Closing shall be consummated at the offices of
the Company at 500 North Akard, Suite 1204, Dallas, Texas 75201 at
10:00 a.m. local time on the second business day after all
conditions to the Closing in Articles 5 and 6 and under Articles 5
and 6 of the Stephens Agreement have been satisfied or waived or at
such other time, date or place as the parties may agree to in
writing. The date of the Closing is referred to herein as the
"Closing Date."
2.2 Deliveries at the Closing. At the Closing,
(a) CNC and CFLIC shall deliver to Purchaser:
(i) certificates evidencing the Shares, duly endorsed in
blank or accompanied by stock powers duly executed in blank,
and otherwise in proper form to transfer all right, title and
interest of CNC and CFLIC free and clear of any Claim in the
Shares to Purchaser;
(ii) legal opinions of counsel for Sellers and the
Company specified in Section 6.5; and
(iii) all certificates and other instruments and documents
required to be delivered by Sellers and the Company to
Purchaser at or prior to the Closing in connection with this
Agreement.
(b) Purchaser shall deliver to CNC and CFLIC:
(i) $22,286,215 in immediately available funds by
federal wire transfer to CNC at the account designated in
writing by CNC;
(ii) $1,100,000 in immediately available funds by federal
wire transfer to CFLIC at the account designated in writing by
CFLIC;
(iii) the legal opinion of counsel for Purchaser specified
in Section 5.5; and
(iv) all certificates and other instruments and documents
required to be delivered by Purchaser to CNC and CFLIC at or
prior to the Closing in connection with this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLERS
AND THE COMPANY
3.1 Representations and Warranties of Sellers. Sellers
hereby represent and warrant to Purchaser as follows:
(a) Organization. Each of CNC and CFLIC is a corpora-
tion duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, with all
requisite corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated
hereby and by the Class B Agreement and the Stephens Agreement
(together with this Agreement, collectively the "Transac-
tions") with respect to CNC and CFLIC.
(b) Title to Shares. CNC is the lawful owner of, with
good and marketable title to, the CNC Shares. CNC owns the
CNC Shares free and clear of all Claims and will transfer to
Purchaser good and marketable title to the CNC Shares at the
Closing free and clear of all Claims. CFLIC is the lawful
owner of, with good and marketable title to, the CFLIC Shares.
CFLIC owns the CFLIC Shares free and clear of all Claims and
will transfer to Purchaser good and marketable title to the
CFLIC Shares at the Closing free and clear of all Claims.
(c) Authorization and Validity. The execution, delivery
and performance by the Company and Sellers of this Agreement
and the Class B Agreement, and the consummation of the
Transactions by Sellers, have been duly authorized by the
Company and Sellers, and no other corporate proceedings on the
part of CNC, CFLIC or the Company are necessary to authorize
and approve this Agreement and the Transactions by Sellers
(except for the approval by the Company's stockholders of the
amendments to the Company's certificate of incorporation
contemplated by Section 6.12 of this Agreement). This
Agreement and the Class B Agreement have been duly executed
and delivered by Sellers and the Company and constitute the
legal, valid and binding obligations of Sellers and the
Company, enforceable against Sellers and the Company in
accordance with their respective terms. The board of direc-
tors of the Company has (i) authorized and approved the
repurchase of its Class B Common Stock, par value $1.00 per
share (the "Class B Stock"), by action of its independent
directors as required by paragraph 3 of the Agreement between
RTS and the Company dated as of October 8, 1984 (the "1984
Agreement") and (ii) has approved this Agreement and the
Transactions and any acquisition of any shares of Common Stock
pursuant hereto or thereto (including, without limitation,
pursuant to any assignment under this Agreement or the
Stephens Agreement) as a "transaction" in which Purchaser may
become an "interested stockholder" within the meaning of
Section 203 of the Delaware General Corporation Law.
(d) No Violation. Neither the execution, delivery or
performance of this Agreement nor the consummation of the
Transactions will (i) conflict with, or result in a violation
or breach of the terms, conditions or provisions of, or
constitute a default under, the articles or certificates of
incorporation or bylaws of CNC, CFLIC or the Company or their
respective subsidiaries or any agreement (including, without
limitation, the 1984 Agreement), indenture or other instrument
under which the Company or any Seller or their respective
subsidiaries or properties is bound or to which any of the
Shares are subject, or result in the creation or imposition of
any Claim against the Shares or (ii) violate, conflict with or
require any consent under any judgment, injunction, decree,
order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction
over the Company or any Seller or their respective subsidiar-
ies or any of their properties, except for filings that may be
required by the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), federal and state
securities laws and state insurance laws and regulations.
(e) Finder's Fee. Sellers have not incurred any
obligation for any finder's, broker's or agent's fee in
connection with this Agreement or the Transactions.
(f) Capitalization. The capitalization of the Company
is as follows:
(i) As of the date of this Agreement, the Company
has authorized 200,000,000 shares of Common Stock, $1.00 par
value per share (the "Common Stock"), of which 71,593,610
shares are issued, of which 23,766,471 are held in treasury or
by subsidiaries, 47,827,139 are issued and outstanding, and
10,787,451 shares are reserved for issuance on exercise of
options, warrants or similar rights issued or issuable under
the Company's 1990 stock option incentive plan or upon
conversion of shares of the Company's Preferred Stock or Class
B Stock. All outstanding shares of Common Stock have been
validly issued and are fully paid and nonassessable.
(ii) The Company has authorized 100,000 shares of
Class B Stock, all of which are issued and outstanding and
owned beneficially and of record by CNC; and the Class B Stock
is validly issued, fully paid and nonassessable and not
subject to any option, warrant or right of any person or
entity. Upon transfer of the Class B Stock to the Company at
the Closing of the Class B Agreement, which shall occur
simultaneously with the Closing, (A) all such Class B Stock
shall convert automatically and immediately into fully paid
and nonassessable shares of Common Stock of the Company held
in treasury by the Company without the necessity of further
action; (B) such Common Stock resulting from the conversion of
the Class B Stock will not be subject to reissuance as Class
B Stock; and (C) the capital stock the Company is authorized
to issue shall not include any Class B Stock.
(iii) The Company has authorized 50,000,000 shares of
Series Preferred Stock, without par value (the "Preferred
Stock"), of which three series of Preferred Stock are out-
standing: (A) the Series 1984-A Preferred Stock, of which
541,563 shares are authorized, issued and outstanding and all
of which are owned beneficially and of record by CFLIC;
(B) the $1.75 Convertible Exchangeable Preferred Stock, Series
1986-A, 8,000,000 shares of which are authorized and 7,999,880
shares of which are issued and outstanding; and (C) the Series
1987-B Preferred Stock, 140,000 shares of which are autho-
rized, issued and outstanding, and all of which are owned
beneficially and of record by CFLIC. All outstanding shares
of Preferred Stock have been validly issued and are fully paid
and nonassessable.
Except as set forth above, there are no options, warrants or
similar rights to acquire from the Company or to require the
Company to issue any shares of its capital stock. No out-
standing shares of capital stock of the Company were issued in
violation of preemptive rights.
(g) No Misstatements or Omissions. Sellers have
delivered to Purchaser copies of the Company's Annual Report
of the Company on Form 10-K for the fiscal year ended Decem-
ber 31, 1992; the Quarterly Report of the Company on Form 10-Q
for the period ended September 30, 1993; Amendment No. 1 to
the Quarterly Report on Form 10-Q for the period ended Septem-
ber 30, 1993; and the definitive proxy statement of the
Company dated April 28, 1993 (the "Information"). The
Information and the representations and warranties of the
Sellers set forth in the instruments evidencing the Transac-
tions do not contain any untrue statement of a material fact
or omit to state any material fact required to be stated
therein or herein or necessary to make the statements therein
or herein not misleading (except as a result of the consumma-
tion of the Transactions). Subsequent to November 15, 1993
the Company has not filed or been required to file any other
report with the Securities and Exchange Commission, other than
filings under Section 13(d) of the Securities Exchange Act of
1934, as amended, relating to investments by subsidiaries and
filings relating to the Transactions.
(h) Affiliate Transactions. Except as set forth in
Schedule I to this Agreement, there will be no agreements,
arrangements, understandings, commitments or investments in
securities in force (other than pursuant to this Agreement and
instruments evidencing the Transactions) between the Company
and its affiliates (other than the Sellers), on the one hand,
and the Sellers and their affiliates (other than the Company
and its direct and indirect subsidiaries), on the other hand,
as of the Closing Date.
(i) No CFLIC Holdings. Upon closing of all the transac-
tions contemplated by that certain agreement dated June 15,
1993, as amended, among the Company, CNC and CFLIC (the "CFLIC
Agreement"), CFLIC will no longer own any shares of the
Company's equity securities or any securities exercisable for
or convertible into the Company's equity securities, includ-
ing, without limitation, the remaining 560,000 shares of the
Company's Common Stock which will not be acquired in the
Transactions, the Series 1984-A Preferred Stock and the Series
1987-B Preferred Stock. After giving effect to the foregoing
transactions (including the Transactions and the transactions
under the CFLIC Agreement and the Class B Agreement), Sellers
and their respective affiliates will beneficially own in the
aggregate no equity securities of the Company other than
1,000,000 shares of Common Stock.
3.2 Representations and Warranties of the Company. The
Company hereby represents and warrants to Purchaser as follows:
(a) Organization. The Company is a corporation duly
organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, with all requisite
corporate power and authority to execute and deliver this
Agreement and to consummate the Transactions with respect to
the Company.
(b) Authorization and Validity. The execution, delivery
and performance by the Company of this Agreement and the Class
B Agreement, and the consummation of the Transactions by the
Company, have been duly authorized by the Company, and no
other corporate proceedings on the part of the Company are
necessary to authorize and approve this Agreement and the
Transactions by the Company (except for the approval by the
Company's stockholders of the amendments to the Company's
certificate of incorporation contemplated by Section 6.12 of
this Agreement). This Agreement and the Class B Agreement
have been duly executed and delivered by the Company and
constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with
their respective terms. The board of directors of the Company
has (i) authorized and approved the repurchase of its Class B
Stock by action of its independent directors as required by
paragraph 3 of the 1984 Agreement and (ii) has approved this
Agreement and the Transactions and any acquisition of shares
of Common Stock pursuant hereto or thereto (including, without
limitation, pursuant to any assignment under this Agreement or
the Stephens Agreement) as a "transaction" in which Purchaser
may become an "interested stockholder" within the meaning of
Section 203 of the Delaware General Corporation Law.
(c) No Violation. Neither the execution, delivery or
performance of this Agreement nor the consummation of the
Transactions will (i) conflict with, or result in a violation
or breach of the terms, conditions or provisions of, or
constitute a default under, the certificate of incorporation
or bylaws of the Company or its subsidiaries or any agreement
(including, without limitation, the 1984 Agreement), indenture
or other instrument under which the Company or its subsidiar-
ies is bound or to which any of the Shares are subject, or
result in the creation or imposition of any Claim against the
Shares or (ii) violate, conflict with or require any consent
under any judgment, injunction, decree, order, statute, rule
or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company
or its subsidiaries or any of their respective properties,
except for filings that may be required by the HSR Act,
federal or state securities laws or state insurance laws or
regulations.
(d) Finder's Fee. The Company has not incurred any
obligation for any finder's, broker's or agent's fee in
connection with this Agreement or the Transactions.
(e) Capitalization. As of the date of this Agreement,
the capitalization of the Company is as set forth in Section
3.1(f) of this Agreement.
(f) No Misstatements or Omissions. The Company has
delivered to Purchaser the Information. The Information and
the representations and warranties of the Company set forth in
the instruments evidencing the Transactions do not contain any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or herein or
necessary to make the statements therein or herein not
misleading (except as a result of the consummation of the
Transactions). Subsequent to November 15, 1993 the Company
has not filed or been required to file any other report with
the Securities and Exchange Commission, other than as set
forth in Section 3.1(g).
(g) Affiliate Transactions. Except as set forth in
Schedule I to this Agreement, there will be no agreements,
arrangements, understandings, commitments or investments in
securities in force (other than pursuant to this Agreement and
instruments evidencing the Transactions) between the Company
and its affiliates (other than the Sellers), on the one hand,
and the Sellers and their affiliates (other than the Company
and its direct and indirect subsidiaries), on the other hand,
as of the Closing Date.
(h) No CFLIC Holdings. Upon closing of all the transac-
tions contemplated by the CFLIC Agreement, CFLIC will no
longer own any shares of the Company's equity securities or
any securities exercisable for or convertible into the
Company's equity securities, including, without limitation,
the remaining 560,000 shares of the Company's Common Stock
which will not be acquired in the Transactions, the Series
1984-A Preferred Stock and the Series 1987-B Preferred Stock.
After giving effect to the foregoing transactions (including
the Transactions and the transactions under the CFLIC Agree-
ment and the Class B Agreement), Sellers and their respective
affiliates will beneficially own in the aggregate no equity
securities of the Company other than 1,000,000 shares of
Common Stock.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Sellers and the
Company as follows:
4.1 Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation, with all requisite corporate power
and authority to execute and deliver this Agreement and to
consummate the Transactions with respect to Purchaser.
4.2 Authorization and Validity. The execution, delivery and
performance by Purchaser of this Agreement, and the consummation of
the Transactions by Purchaser, have been duly authorized by
Purchaser, and no other corporate proceedings on the part of
Purchaser are necessary to authorize and approve this Agreement and
the Transactions by Purchaser. This Agreement has been duly
executed and delivered by Purchaser and constitutes the legal,
valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms.
4.3 No Violation. Neither the execution, delivery or
performance of this Agreement nor the consummation of the Transac-
tions by Purchaser will (i) conflict with, or result in a violation
or breach of the terms, conditions or provisions of, or constitute
a default under, the articles of incorporation or bylaws of
Purchaser or any agreement, indenture or other instrument under
which Purchaser is bound or (ii) violate, conflict with or require
any filing or consent under any judgment, injunction, decree,
order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction over
Purchaser or any of its properties, except as may be required by
the HSR Act, Federal and state securities laws and except for
filings or consents that may be required or advisable under state
insurance laws and regulations.
4.4 Finder's Fee. Purchaser has not incurred any obligation
for any finder's, broker's or agent's fee in connection with this
Agreement or the Transactions.
4.5 Acquisition for Investment. Purchaser is acquiring the
Shares for investment and not with a view toward, or for sale in
connection with, any distribution thereof, nor with any present
intention of distributing or selling the Shares. Purchaser agrees
that the Shares may not be sold, transferred, offered for sale,
pledged, hypothecated or otherwise disposed of (i) without
registration under the Securities Act of 1933, as amended, except
pursuant to an exemption from such registration available under
such Act, and (ii) except in accordance with any applicable
provisions of state securities laws. Purchaser acknowledges that
the certificates representing the Shares will bear a legend
referring to these transfer restrictions.
4.6 No Arrangements with Stephens; Share Ownership. As of
the date hereof, Purchaser is the beneficial owner of no shares of
the voting stock of the Company. Except pursuant to this Agreement
or the Transactions, Purchaser does not (1) have (a) the right to
acquire any voting stock of the Company (whether such right is
exercisable immediately or only after the passage of time) pursuant
to any agreement, arrangement or understanding, or upon the
exercise of conversion rights, exchange rights or otherwise, or (b)
the right to vote any voting stock of the Company pursuant to any
agreement, arrangement or understanding, or (2) have any agreement,
arrangement or understanding for the purpose of acquiring, holding,
or voting of such stock with Stephens Inc. ("Stephens") or any
other person that beneficially owns, or whose affiliates benefi-
cially own, directly or indirectly, such stock.
ARTICLE 5
CONDITIONS TO THE OBLIGATIONS OF CNC AND CFLIC
The obligations of CNC and CFLIC under this Agreement with
respect to the Closing are subject to the satisfaction or, unless
prohibited by law, the waiver by CNC and CFLIC, at or before the
Closing, of each of the following conditions:
5.1 Representations and Warranties. Each of the representa-
tions and warranties of Purchaser contained in this Agreement shall
be true and correct in all material respects as of the date when
made and at and as of the Closing Date as though such representa-
tions and warranties were made at and as of such date.
5.2 Performance. Purchaser shall have performed and complied
in all material respects with all agreements, obligations and
conditions required by this Agreement to be so performed or
complied with by it at or prior to the Closing.
5.3 Officer's Certificates. Purchaser shall have delivered
to Sellers a certificate, dated the Closing Date and executed by an
executive officer of Purchaser, certifying its fulfillment of the
conditions specified in Sections 5.1 and 5.2. The Company shall
have delivered to Sellers a certificate, dated the Closing Date and
executed by an executive officer of the Company, certifying as to
certain factual matters underlying the Sellers' representations
contained in Section 3.1.
5.4 No Injunction. On the Closing Date, there shall be no
effective injunction, writ, preliminary restraining order or any
order of any nature issued by a court of competent jurisdiction
restraining or prohibiting consummation of any of the Transactions.
5.5 Opinion of Counsel. The Company, CNC and CFLIC shall
have been furnished with the opinions, dated the Closing Date, of:
(a) Samuel E. Upchurch, Jr., counsel for Purchaser, with
respect to the matters set forth in Sections 4.1, 4.2 (other
than the second sentence of such section) and 4.3; and
(b) Hughes & Luce, L.L.P., counsel for Purchaser, with
respect to the matters set forth in the second sentence of
Section 4.2.
5.6 HSR Waiting Period and Regulatory Matters. Any applica-
ble waiting period under the HSR Act shall have expired or been
early terminated and all other required regulatory approvals shall
have been obtained. Prior to 5:00 p.m. Dallas, Texas time on the
second full business day following termination of all waiting
periods under the HSR Act or receipt by all applicable parties of
notices of early termination of such waiting periods, in either
case both under this Agreement and under the Stephens Agreement
(such time on such second business day being the "Regulatory
Determination Date"), neither CNC nor CFLIC shall have given
written notice (the "Section 5.6 Notice") to Purchaser that any
regulatory authority having jurisdiction over Purchaser, Sellers,
the Company, their respective subsidiaries or affiliates or
properties, or the Transactions shall have notified Sellers,
Purchaser or the Company that such regulatory authority will, or is
reasonably likely to, require Sellers, Purchaser or the Company to
make any filing or obtain any consent with respect to the Transac-
tions, other than filings under the HSR Act, federal and state
securities laws or amendments to previously filed insurance holding
company statements; provided, however, that, if within ten days
after CNC or CFLIC provides the Section 5.6 Notice, the regulatory
authority notifies CNC or CFLIC in writing satisfactory to CNC or
CFLIC that such filing shall not be required or such consent need
not be obtained, CNC or CFLIC shall notify Purchaser in writing
that CNC or CFLIC is withdrawing the Section 5.6 Notice.
5.7 Closing. Under no circumstances shall the Closing under
this Agreement be deemed to have occurred until the closings under
the Class B Agreement and the Stephens Agreement shall simulta-
neously occur.
ARTICLE 6
CONDITIONS TO THE OBLIGATIONS OF PURCHASER
The obligations of Purchaser under this Agreement with respect
to the Closing are subject to the satisfaction by the Company and
Sellers or, unless prohibited by law, the waiver by Purchaser, at
or before the Closing, of each of the conditions set forth below:
6.1 Representations and Warranties. Each of the representa-
tions and warranties of Sellers and the Company, contained in this
Agreement shall be true and correct in all material respects as of
the date when made and at and as of the Closing Date as though such
representations and warranties were made at and as of such date.
6.2 Performance. The Company and Sellers shall have
performed and complied in all material respects with all agree-
ments, obligations and conditions required by this Agreement and
the other instruments evidencing the Transactions to be so
performed or complied with by them at or prior to the Closing Date.
6.3 Certificates. Each of Sellers and the Company shall have
delivered to Purchaser a certificate, dated the Closing Date and
executed by an executive officer of such person or by such
individual, as applicable, certifying its fulfillment of the
conditions specified in Sections 6.1 and 6.2.
6.4 Litigation. No action, proceeding, suit or investiga-
tion, which in the reasonable judgment of Purchaser may prove to be
material, shall have been instituted or threatened by any person or
entity (public or private) against Purchaser, Sellers and/or the
Company to restrain, enjoin or delay the consummation of the
transactions contemplated at the Closing or seeking damages or
other relief relating to this Agreement or the Transactions, and no
order or injunction shall be in effect adversely affecting the
Closing.
6.5 Opinions of Counsel. Purchaser shall have been furnished
with the opinions (in form and substance reasonably satisfactory to
Purchaser and subject to customary qualifications), dated the
Closing Date, of:
(a) Mr. Phillip E. Allen, Esq., counsel for the Sellers,
with respect to the matters set forth in Sections 3.1(a), (b),
(c), (d) and (f) and, to the best of such counsel's knowledge,
Sections 3.1(h) and (i) of this Agreement;
(b) Mr. Sheryl G. Snyder, Esq., counsel for the Company,
with respect to the matters set forth in Sections 3.2(a), (c),
and (e) and, to the best of such counsel's knowledge, Sections
3.2(g) and (h) of this Agreement;
(c) Akin, Gump, Strauss, Hauer & Feld, counsel for the
Company, with respect to the matters set forth in Section
3.2(b) (other than Section 3.2(b)(ii)) of this Agreement; and
(d) Richards, Layton & Finger, counsel for the Company,
with respect to the matters set forth in Section 3.2(b)(ii) of
this Agreement.
6.6 HSR Waiting Period. Any applicable waiting period under
the HSR Act shall have expired or been early terminated.
6.7 Material Adverse Change. There shall not have occurred
since the date of the Information any material adverse change in
the business and prospects, financial condition, assets, liabili-
ties or results of operations of the Company and its subsidiaries,
taken as a whole.
6.8 Regulatory Matters. Prior to the Regulatory Determina-
tion Date, Purchaser shall not have given written notice (the
"Section 6.8 Notice") to Sellers and the Company that any regulato-
ry authority having jurisdiction over Purchaser, Sellers, the
Company, any of their respective subsidiaries or affiliates, or the
Transactions, has notified Sellers, Purchaser, or the Company that
the regulatory authority will, or is reasonably likely to, require
Sellers, Purchaser, or the Company to make any filing or obtain any
consent with respect to the Transactions, other than filings under
the HSR Act, federal and state securities laws or amendments to
previously filed insurance holding company statements; provided,
however, if, within ten days after Purchaser provides the Section
6.8 Notice to Sellers and the Company, the regulatory authority
notifies Purchaser in writing satisfactory to Purchaser that such
filing shall not be required or such consent need not be obtained,
Purchaser shall notify Sellers and the Company in writing that
Purchaser is withdrawing the Section 6.8 Notice.
6.9 Affiliate Transactions. Except as set forth in Schedule
I, all agreements, arrangements, understandings or commitments
(other than pursuant to this Agreement and instruments evidencing
the Transactions) between the Company and its affiliates (other
than the Sellers), on the one hand, and Sellers and their affili-
ates (other than the Company and its direct and indirect subsidiar-
ies), on the other hand, shall have been canceled and terminated
prior to the Closing on terms satisfactory to Purchaser.
6.10 Independent Contractor and Services Agreements. RTS
shall have executed and delivered an Independent Contractor and
Services Agreement with the Company (the "RTS Agreement") in the
form attached hereto as Exhibit B, and the RTS Agreement shall have
been approved by the Board of Directors of the Company and shall be
the legal, valid and binding agreement of RTS enforceable against
RTS in accordance with its terms. CFR shall have executed and
delivered an Independent Contractor and Services Agreement with the
Company (the "CFR Agreement") in the form attached hereto as
Exhibit C, and the CFR Agreement shall have been approved by the
Board of Directors of the Company and shall be the legal, valid and
binding agreement of CFR, enforceable against CFR in accordance
with its terms.
6.11 Director Nominees. The Company's board of directors
shall have elected Keith A. Tucker or such other qualified person
as Purchaser shall designate as a member of the board of directors,
effective upon the Closing Date.
6.12 Certain Amendments. The Company's board of directors
shall have approved an amendment to the Company's Restated
Certificate of Incorporation acceptable in form and substance to
Purchaser eliminating references to the Class B Stock, and shall
have directed that the amendment be submitted to the stockholders
of the Company at the next annual meeting of the Company's
stockholders. The Company's board of directors shall have amended
Article III, Section 1 of the Company's bylaws to eliminate the
requirement that the number of directors be an integral multiple of
four.
6.13 Closing. Under no circumstances shall the Closing under
this Agreement be deemed to have occurred until the closings under
the Class B Agreement and the Stephens Agreement shall simulta-
neously occur.
ARTICLE 7
REGISTRATION RIGHTS
7.1 Definitions. As used in this Article 7, the following
terms have the meanings indicated.
"Commission" means the Securities and Exchange Commission
or any other agency at the time administering the Securities Act.
"Excepted Stock" means shares of Common Stock subject to
the secondary registration rights granted in the Agreements among
the Company and one or more of the Sellers and (i) John Franco,
dated November 18, 1991, and (ii) Steven Bing, dated February 7, 1992.
"Person" will be broadly construed to include any
individual, entity, corporation, partnership, joint venture,
association, joint stock company, trust, or unincorporated organization.
"Register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration
statement in compliance with the Securities Act of 1933, as amended
(the "Securities Act"), and the rules promulgated thereunder, and
the declaration or ordering of the effectiveness of such registra-
tion statement.
"Registrable Common Stock" means the Shares acquired
pursuant to this Agreement and any securities issued in respect of
the Shares.
"Registrant" means the Company or its successor by
merger, consolidation, share exchange, sale of all or substantially
all of its assets, or similar transaction.
7.2 Piggy-Back Rights. If the Registrant proposes to file a
registration statement under the Securities Act with respect to an
offering of Common Stock, other than a registration statement on
Form S-4, Form S-8, or Form S-3 solely in tandem with Form S-8 then
the Registrant will give written notice of such proposed filing to
Purchaser at least 10 business days before the anticipated filing
date. Such notice will offer to Purchaser the opportunity to
include in such registration statement the number of shares of
Registrable Common Stock owned by Purchaser as Purchaser may
request. Within 10 business days of receipt of such notice,
Purchaser will notify the Registrant in writing as to the number of
shares of Registrable Common Stock to be included in the registra-
tion statement. The Registrant will include the shares of
Registrable Common Stock set forth in Purchaser's notice in the
proposed registration statement and will cause the managing
underwriter or underwriters, if any, of any proposed underwritten
offering to be described in such registration statement to permit
Purchaser to include such shares of Registrable Common Stock in any
such underwritten offering on the same terms and conditions as any
other Common Stock included therein other than the Excepted Stock.
Notwithstanding the foregoing, if the managing underwriter or
underwriters of any underwritten offering advise the Registrant in
writing (and deliver a copy thereof to Purchaser) that the total
amount of Common Stock that Purchaser intends to include in such
underwritten offering would (x) make it impractical to conduct such
underwritten offering of the Common Stock being registered at the
price at which such Common Stock could be sold without such
inclusion or (y) materially interfere with the success of the
offering by the Registrant, then the Registrable Common Stock to be
offered for the account of Purchaser will, together with the Common
Stock to be offered by Persons other than the Registrant other than
the Excepted Stock, be reduced or eliminated by the managing
underwriter or underwriters, if any, such reduction to first
eliminate shares of Common Stock being registered by Sellers or
executive officers or directors of the Company, then eliminate
shares of other Persons pro rata based on the number of shares of
Common Stock or Registrable Common Stock proposed to be included in
the registration statement by such Persons (other than such Sellers
or executive officers and directors of the Registrant and other
than the Excepted Stock), including Purchaser. Notwithstanding
anything to the contrary in this Section 7.2, the Registrant may,
in its sole discretion and without the consent of Purchaser,
postpone the filing or effectiveness of such registration statement
or withdraw any such registration statement and abandon any such
proposed offering.
7.3 Demand Rights. If Purchaser delivers a written request
to the Registrant to file a registration statement under the
Securities Act with respect to all or a portion of the Registrable
Common Stock, then the Registrant will, promptly after receipt of
such notice, use its reasonable best efforts to file such registra-
tion statement with respect to such Registrable Common Stock and
cause it to be declared effective by the Commission so as to permit
or facilitate the sale or distribution of all or such portion of
the Registrable Common Stock as are specified in such request;
provided, that Registrant will have the right in its sole discre-
tion to postpone the filing of such a registration statement for a
period of up to 90 days from the date of its receipt of a request
pursuant to this Section 7.3 if, in the good faith judgment of the
members of the board of directors, the best interests of the
Registrant would be best served by such a delay. Purchaser will
have the right to have one such registration effected under this
Section 7.3. The written request received by the Registrant from
Purchaser will be deemed to include an undertaking from Purchaser
to (a) cooperate with the Registrant in connection with such
registration, (b) furnish the Registrant with all such information
in connection therewith as may be required by the Commission, and
(c) take all such action as may be reasonably requested by the
Registrant in order to permit the Registrant to comply with all
applicable requirements of the Securities Act and the Commission
and to obtain acceleration of the effective date of the registra-
tion statement.
7.4 Form S-3 Registrations. In addition to the registration
rights provided in Section 7.2 and 7.3, if at any time the Company
is eligible to use Form S-3 (or any successor form) for registra-
tion of secondary sales of Common Stock, Purchaser may request in
writing that the Company register shares of Registrable Common
Stock on such form; provided, however, that any such request for
registration shall be for a minimum of 250,000 shares of Registra-
ble Common Stock. Thereupon the Company will, as soon as practica-
ble, use its reasonable best efforts to effect the registration on
Form S-3 of all Registrable Common Stock that the Company has so
been requested to register by Purchaser for sale; provided, that
Registrant will have the right in its sole discretion to postpone
the filing of such a registration statement for a period of up to
90 days from the date of its receipt of a request pursuant to this
Section 7.4 if, in the good faith judgment of the members of the
board of directors, the best interests of the Registrant would be
best served by such a delay.
7.5 Registration Procedures. Whenever the Registrant is
required to use its reasonable best efforts to effect the registra-
tion of any Registrable Common Stock, the Registrant will as
expeditiously as possible:
(a) prepare and file with the Commission a registration
statement with respect to the Registrable Common Stock and use its
reasonable best efforts to cause such registration statement to
become and remain effective for the period set forth in Section
7.5(b) and promptly notify Purchaser: (i) when such registration
statement becomes effective; (ii) when a post-effective amendment
to such registration statement becomes effective; and (iii) of any
request by the Commission for any amendment or supplement to such
registration statement or any prospectus relating thereto or for
additional information;
(b) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions
of the Securities Act with respect to the sale or other disposition
of all securities covered by such registration statement for a
period of not less than 90 days after the effective date of such
registration statement to the extent necessary to permit the
completion of the sale or distribution of the Registrable Common
Stock within such period, provided, that if the Registrant takes
any action with respect to the acquisition of the stock or assets
of any business entity that would require the Registrant to amend
any prospectus included in a registration statement that becomes
effective under the provisions of Section 7.3 or 7.4 by including
financial statements that conform to the requirements of Regulation
S-X promulgated by the Commission, Purchaser will suspend the
offering or sale of the Registrable Common Stock for a period not
to exceed 45 days so that the Registrant may prepare such financial
statements (which the Registrant will prepare as promptly as
possible) and the 90-day period referred to above in this Section
7.5(b) will be extended for a period equivalent to such delay;
(c) furnish to Purchaser, prior to filing a registration
statement, copies of such registration statement as proposed to be
filed and thereafter, such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each prelimi-
nary prospectus), and such other documents as Purchaser may
reasonably request in order to facilitate the disposition of the
Registrable Common Stock being offered by Purchaser;
(d) use reasonable best efforts to register or qualify,
not later than the effective date of any filed registration
statement the Registrable Common Stock covered by such registration
statement under the securities or blue sky laws of such jurisdic-
tions as Purchaser reasonably requests; provided, that the
Registrant will not be required to (i) qualify to do business as a
foreign corporation or as a dealer in any jurisdiction where it is
not so qualified, (ii) subject itself to taxation in any such
jurisdiction, or (iii) consent to general service of process in any
such jurisdiction or take any action that would subject it to
service of process in suits other than those arising out of the
offer and sale of the Registrable Common Stock covered by the
registration statement;
(e) use its reasonable best efforts to cause the
Registrable Common Stock covered by such registration statement to
be registered with or approved by such other governmental agencies
or authorities as may be necessary by virtue of the business and
operations of Registrant to enable Purchaser to consummate the
disposition of such Registrable Common Stock;
(f) during the period when the registration statement is
required to be effective, notify Purchaser of the happening of any
event as a result of which the prospectus included in the registra-
tion statement contains an untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and
Registrant will prepare a supplement or amendment to such prospec-
tus so that, as thereafter delivered to the purchasers of such
Registrable Common Stock, such prospectus will not contain an
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading;
(g) in the event that such sale is pursuant to an
underwritten offering, enter into an underwriting agreement
containing customary terms;
(h) in the event such sale is pursuant to an underwrit-
ten offering, use its reasonable best efforts to obtain a "cold
comfort letter" from the independent public accountants for the
Registrant in customary form and covering such matters of the type
customarily covered by "cold comfort letters"; and
(i) otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the Commission, and
make available to its security holders, as soon as reasonably
practicable, an earnings statement covering a period of 12 months,
beginning within three months after the effective date of the
registration statement, which earnings statement will satisfy the
provisions of Section 11(a) of the Securities Act.
7.6 Purchaser Cooperation. In connection with each registra-
tion effected pursuant to this Article 7, Purchaser agrees:
(a) to timely furnish the Registrant with such information
regarding Purchaser and the proposed sale and distribution of the
Common Stock as the Registrant may reasonably request;
(b) to execute and perform its obligations under any
underwriting agreement with customary terms and conditions
acceptable to Purchaser entered into by the Company in connection
with the registered offering; and
(c) during any period during which the Registrant is required
to prepare an amendment or supplement to any registration statement
or prospectus, to suspend offers and sales pursuant thereto until
such amendment or supplement becomes effective.
7.7 Expenses. The Registrant will bear all expenses of any
registration effected pursuant to this Article 7, except that
Purchaser will pay (a) underwriting discounts and commissions with
respect to any shares sold by Purchaser, (b) fees and expenses of
Purchaser's counsel and (c) blue sky filing and legal fees related
to states in which registration or qualification is undertaken
solely as a result of Purchaser's request.
7.8 Indemnification and Contribution.
(a) In the case of any offering registered pursuant to
this Article 7, the Registrant agrees to indemnify and hold
Purchaser, each underwriter of Registrable Common Stock under such
registration and each Person who controls any of the foregoing
within the meaning of Section 15 of the Securities Act, harmless
against any and all losses, claims, damages or liabilities to which
they or any of them may become subject under the Securities Act or
any other statute or common law or otherwise, and to reimburse
them, promptly upon request, for any legal or other expenses
reasonably incurred by them in connection with investigating any
claims and defending any actions, insofar as any such losses,
claims, damages, liabilities or actions shall arise out of or shall
be based upon (i) any untrue statement or alleged untrue statement
of a material fact contained in the registration statement relating
to the sale of such Registrable Common Stock, or the omission or
alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading or (ii) any untrue statement or alleged untrue statement
of a material fact contained in any preliminary prospectus (as
amended or supplemented if the Registrant shall have filed with the
Commission any amendment thereof or supplement thereto), if used
prior to the effective date of such registration statement, or
contained in the prospectus (as amended or supplemented if the
Registrant shall have filed with the Commission any amendment
thereof or supplement thereto), or the omission or alleged omission
to state therein a material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the indemnifica-
tion agreement contained in this Section 7.8(a) shall not apply to
such losses, claims, damages, liabilities or actions that shall
arise from the sale of Registrable Common Stock if such losses,
claims, damages, liabilities or actions shall arise out of or shall
be based upon any such untrue statement, or any such omission or
alleged omission, if such statement or omission shall have been
made in reliance upon and in conformity with information furnished
in writing to the Registrant by Purchaser or any such underwriter
specifically for use in connection with the preparation of the
registration statement or any preliminary prospectus or prospectus
contained in the registration statement or any such amendment
thereof or supplement thereto.
(b) In the case of each offering registered pursuant to
this Article 7, Purchaser and each underwriter participating
therein shall agree in the same manner and to the same extent as
set forth in Section 7.8(a) hereof severally to indemnify and hold
harmless the Registrant, and each person, if any, who controls the
Registrant within the meaning of Section 15 of the Securities Act,
and the directors and officer of the Registrant with respect to any
statement in or omission from such registration statement or any
preliminary prospectus (as amended or as supplemented, if amended
or supplemented as aforesaid), if such statement or omission shall
have been made in reliance upon and in conformity with information
furnished in writing to the Registrant by Purchaser or such
underwriter, respectively, specifically for use in connection with
the preparation of such registration statement or any preliminary
prospectus or prospectus contained in such registration statement
or any such amendment or supplement.
(c) Each party indemnified under Section 7.8(a) or (b)
hereof shall, promptly after receipt of notice of the commencement
of any action against such indemnified party in respect of which
indemnity may be sought hereunder, notify the indemnifying party in
writing of the commencement thereof. The omission of any indemni-
fied party to so notify an indemnifying party of any such action
shall not relieve the indemnifying party from any liability in
respect of such action which it may have to such indemnified party
on account of the indemnity agreement contained in Section 7.8(a)
or (b), unless and to the extent the indemnifying party was
prejudiced by such omission, and in no event shall relieve the
indemnifying party from any other liability which it may have to
such indemnified party. In case any such action shall be brought
against any indemnified party and it shall notify an indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it may
desire, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, and the indemnifying party
shall not be liable to such indemnified party under Section 7.8(a)
or (b) for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof,
other than reasonable costs of investigation (unless such indemni-
fied party reasonably objects to such assumption on the grounds
that there may be defenses to it which are different from or in
addition to such indemnifying party, in which event the indemnified
party shall be reimbursed by the indemnifying party for the
expenses incurred in connection with retaining separate legal
counsel).
(d) If the indemnification provided for in this Section
7.8 is unavailable to an indemnified party in respect of any
losses, claims, damages or liabilities referred to herein, then
each indemnifying party under any paragraph of this Section 7.8, in
lieu of indemnifying such indemnified party hereunder, shall
contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative fault of such
indemnified party on the one hand and the indemnifying parties on
the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative fault
of such indemnified party and the indemnifying parties shall be
determined by reference to, among other things, whether the untrue
or alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by such
parties and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The parties agree that it would not be just and
equitable if contribution pursuant to this Section 7.8(d) were
determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable consider-
ations referred to above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and
liabilities referred to above shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating, defending or settling any such action or claim.
7.9 Certain Limitations on Registration Rights. Notwith-
standing the other provisions of Article 7, the Company shall not
be obligated to register shares of Purchaser if, in the opinion of
counsel to the Company reasonably satisfactory to Purchaser and its
counsel, the sale or other disposition of Purchaser's shares, in
the manner proposed by Purchaser, may be effected without register-
ing such shares under the Securities Act.
ARTICLE 8
MISCELLANEOUS
8.1 HSR Act; Regulatory Filings. As soon as practicable, the
parties hereto shall make any and all filings as may be required
under the HSR Act in connection with this Agreement and the
Transactions and shall request early termination of the waiting
period under the HSR Act. Each party shall furnish to all other
parties such information and assistance as any other party or
parties may reasonably request in connection with the preparation
of such filings.
8.2 Covenant to Satisfy Conditions. Each party to this
Agreement shall use its respective reasonable best efforts to
satisfy the conditions set forth herein to the Closing insofar as
such matters are within its control.
8.3 Public Announcements. The parties hereto will mutually
consent (subject to any party's obligations to make disclosures
pursuant to applicable securities laws or stock exchange rules) to
the terms of any press release or any public statements with
respect to this Agreement or the Transactions prior to issuance.
8.4 Expenses. Each of the parties hereto shall pay its own
fees and expenses (including the fees of any attorneys, accoun-
tants, investment bankers or others engaged by such party) in
connection with this Agreement and the transactions contemplated
hereby whether or not the transactions contemplated hereby are
consummated.
8.5 Headings. The section headings herein are for conve-
nience of reference only, do not constitute part of this Agreement
and shall not be deemed to limit or otherwise affect any of the
provisions hereof.
8.6 Notices. All notices or other communications required or
permitted hereunder shall be given in writing and shall be deemed
sufficient if delivered by hand or telecopied or mailed by
registered or certified mail, postage prepaid (return receipt
requested), as follows:
If to the Company:
I.C.H. Corporation
500 North Akard, Suite 1204
Dallas, Texas 75201
Telecopy No. (214) 954-7345
Attention: Robert L. Beisenherz
With a copy to:
I.C.H. Corporation
100 Mallard Creek Road, Suite 400
Louisville, Kentucky 40257
Telecopy No. (502) 894-2149
Attention: Sheryl G. Snyder
If to RTS:
Robert T. Shaw
784 Harrington Lake Drive North
Venice, Florida 34293
Telecopy No. (813) 492-9596
With a copy to:
Weil, Gotshal & Manges
901 Main Street, Suite 4100
Dallas, Texas 75202
Telecopy No. (214) 746-7777
Attention: Thomas A. Roberts
If to CFR:
C. Fred Rice
4213 Snowberry Lane
Naples, Florida 33999
Telecopy No. (813) 597-9476
With a copy to:
Weil, Gotshal & Manges
901 Main Street, Suite 4100
Dallas, Texas 75202
Telecopy No. (214) 746-7777
Attention: Thomas A. Roberts
If to CNC:
Consolidated National Corporation
4211 Norbourne Boulevard
Louisville, Kentucky 40207
Telecopy No. (502) 897-6470
Attention: President and General Counsel
If to CFLIC:
Consolidated Fidelity Life Insurance Company
4211 Norbourne Boulevard
Louisville, Kentucky 40207
Telecopy No. (502) 897-6470
Attention: President and General Counsel
If to Purchaser:
Torchmark Corporation
2001 Third Avenue South
Birmingham, Alabama 35233
Telecopy No. (205) 325-4198
Attention: Samuel E. Upchurch, Jr.
With a copy to:
Hughes & Luce, L.L.P.
1717 Main Street, Suite 2800
Dallas, Texas 75201
Telecopy No. (214) 939-6100
Attention: Alan J. Bogdanow
or such other address as shall be furnished in writing by such
party, and any such notice or communication shall be effective and
be deemed to have been given as of the date so delivered or
telecopied or three days after the date so mailed; provided,
however, that any notice or communication changing any of the
addresses set forth above shall be effective and deemed given only
upon its receipt.
8.7 Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted
assigns; provided, however, that neither this Agreement nor any of
the rights, interests, or obligations hereunder may be assigned by
any of the parties hereto without the prior written consent of the
other parties except that Purchaser may assign its rights and
delegate its duties hereunder without further recourse or liability
to Purchaser to a credit worthy person or entity reasonably
acceptable to the Company which will execute a written instrument
assuming such duties.
8.8 Entire Agreement. This Agreement and those instruments
evidencing the Transactions embody the entire agreement and
understanding of the parties with respect to this Agreement and the
Transactions and supersede all prior written or oral and contempo-
raneous oral commitments, arrangements or understandings with
respect thereto. There are no restrictions, agreements, promises,
warranties, covenants or undertakings with respect to this
Agreement or the Transactions other than those expressly set forth
in this Agreement.
8.9 Modifications, Amendments and Waivers. At any time prior
to the Closing, to the extent permitted by law, (i) the parties
hereto may, by written agreement executed by all parties, modify,
amend or supplement any term or provision of this Agreement and
(ii) any term or provision of this Agreement may be waived in
writing by the party or parties entitled to the benefits thereof.
8.10 Counterparts. This Agreement may be executed in two or
more counterparts, all of which together shall be considered one
and the same agreement and each of which shall be deemed an original.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF TEXAS (REGARDLESS OF THE LAWS THAT MIGHT BY
APPLICABLE UNDER PRINCIPLES OF CONFLICTS OF LAW) AS TO ALL MATTERS,
INCLUDING BUT NOT LIMITED TO MATTERS OF VALIDITY, CONSTRUCTION,
EFFECT AND PERFORMANCE.
8.12 Severability. If any one or more of the provisions of
this Agreement shall be held to be invalid, illegal or unenforce-
able, the validity, legality or enforceability of the remaining
provisions of this Agreement shall not be affected thereby. To the
extent permitted by applicable law, each party waives any provision
of law which renders any provision of this Agreement invalid,
illegal or unenforceable in any respect. The Class B Stock will be
automatically canceled when it is transferred as contemplated
pursuant to the Transactions. Therefore, notwithstanding any other
provision of this Agreement, Sellers, the Company and Purchaser
agree that any and all provisions which may require the Class B
Stock to be transferred are not severable from any other provision
of this Agreement.
8.13 Specific Performance. The parties hereto recognize that
any breach of the terms of this Agreement may give rise to
irreparable harm for which money damages would not be an adequate
remedy, and accordingly agree that, in addition to other remedies,
any non-breaching party shall be entitled to enforce the terms of
this Agreement by a decree of specific performance without the
necessity of proving the inadequacy as a remedy of money damages.
The Class B Stock will be automatically canceled when it is
transferred as contemplated pursuant to the Transactions.
Therefore, notwithstanding any other provision of this Agreement,
Sellers, the Company and Purchaser agree that no party shall be
entitled to specific performance of any provision of this Agreement
unless the Closing and the closings of both the Class B Agreement
and the Stephens Agreement shall have simultaneously occurred.
8.14 Certain Amendments and Actions. The Company agrees to
use its reasonable best efforts (including recommending approval to
its stockholders) to cause to be filed as soon as possible an
amendment to its certificate of incorporation acceptable in form
and substance to Purchaser eliminating references to the Class B
Stock. Prior to the Closing Date, the Company will cause Article
III, Section 1 of its bylaws to be amended to eliminate the
requirement that the number of directors be an integral multiple of
four. The Sellers and the Company covenant and agree that the
closing of the transactions contemplated by the CFLIC Agreement
shall occur on or before May 30, 1994, and the transactions
contemplated thereby shall be consummated on substantially the same
economic terms as set forth in the CFLIC Agreement. The Company
agrees and covenants that it will not reduce the number of shares
of voting securities outstanding prior to the Closing Date.
Pursuant to the CFLIC Agreement, all shares of the Company's equity
securities and any securities exercisable for or convertible into
the Company's equity securities that are owned by CFLIC (other than
440,000 shares of the Company's Common Stock to be purchased
pursuant to the Transactions), including, without limitation, the
remaining 560,000 shares of the Company's Common Stock which are
not being acquired in the Transactions, the Series 1984-A Preferred
Stock and the Series 1987-B Preferred Stock shall be transferred by
CFLIC either as part of the termination of certain reinsurance
agreements or as consideration for the mandatory redemption of
shares of CFLIC preferred stock held by the Company.
8.15 Nominations. The Company covenants and agrees that so
long as Purchaser owns at least five percent of the issued and
outstanding shares of Common Stock of the Company or any successor
corporations (subject to appropriate adjustment for stock splits,
stock dividends or similar events), it will cause one person
designated by Purchaser to be nominated for election as a director
of the Company and will use its best efforts to secure election of
such person as a director.
8.16 Survival of Representations. The representations and
warranties set forth in this Agreement shall survive any Closing
and shall not be affected by any investigation by any party to
which such representation or warranty is made.
8.17 Termination. This Agreement may be terminated at any
time prior to the Closing Date (a) by mutual consent of Purchaser,
the Company and Sellers, (b) by Purchaser, if the conditions set
forth in Article 6 have not been complied with or performed in any
respect and such noncompliance or nonperformance has not been cured
or eliminated (or by its nature cannot be cured or eliminated) by
Sellers and the Company on or before March 15, 1994; or (c) by
Sellers or the Company, if the conditions set forth in Article 5
have not been complied with or performed in any respect and such
noncompliance or nonperformance has not been cured or eliminated
(or by its nature cannot be cured or eliminated) by Purchaser on or
before March 15, 1994. In the event of the termination of this
Agreement pursuant to Section 8.17, this Agreement will thereafter
become void and have no effect, and no party will have any
liability to any other parties or their stockholders or directors
or officers in respect thereof, except insofar as such liability
may be attributable to willful breach of this Agreement. Sections
8.3 through 8.14 and 8.16 will survive the termination of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
CONSOLIDATED NATIONAL CORPORATION
/s/ Robert T. Shaw
By:_____________________________________
Name: Robert T. Shaw
Title: President and Treasurer
CONSOLIDATED FIDELITY LIFE INSURANCE
COMPANY
By:_____________________________________
Name: Gerald J. Kohout
Title: President
I.C.H. CORPORATION
By:_____________________________________
Name: Robert L. Beisenherz
Title: President and Chief Executive
Officer
/s/ Robert T. Shaw
_________________________________________
ROBERT T. SHAW
/s/ C. Fred Rice
_________________________________________
C. FRED RICE
TORCHMARK CORPORATION
/s/ Keith A. Tucker
By:_____________________________________
Name: Keith A. Tucker
Title: Vice Chairman
<PAGE>
EXHIBIT A TO EXHIBIT NO. 1
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT ("Agreement"), made and entered into
as of January __, 1994, among Consolidated National Corporation, a
Kentucky corporation ("CNC"), and I.C.H. Corporation, a Delaware
corporation ("Purchaser").
RECITALS
A. CNC owns 100,000 shares of Class B Common Stock, par
value $1.00 per share (the "Class B Stock"), of the Purchaser.
B. CNC desires to sell to Purchaser, and Purchaser desires
to purchase from CNC, the Class B Stock.
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements herein
contained, and on the terms and subject to the conditions herein
set forth, the parties hereto hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF STOCK
1.1 Purchase and Sale of Stock. Upon the terms and subject
to the conditions set forth in this Agreement, CNC hereby agrees to
sell to Purchaser, simultaneous with the closings of those certain
Stock Purchase Agreements among CNC, Purchaser, Consolidated
Fidelity Life Insurance Company, Robert T. Shaw, C. Fred Rice and,
respectively, Torchmark Corporation and Stephens, Inc. (collective-
ly the "Torchmark and Stephens Agreements"), the Class B Stock,
free and clear of all liens, security interests, pledges, charges,
claims, options, encumbrances of every kind, escrows, rights of
first refusal, mortgages, indentures, security agreements or other
agreements, arrangements, contracts, commitments, understandings
and obligations, whether written or oral and whether or not
relating in any way to credit or the borrowing of money (collec-
tively, "Claims"), and Purchaser agrees to purchase the Class B
Stock at the price of $5.00 per share for a total purchase price of
$500,000.
ARTICLE 2
CLOSING
2.1 Date and Place of Closing. Subject to satisfaction of
the conditions to the closing of this Agreement (the "Closing") set
forth in Articles 5 and 6, the Closing for the purchase and sale of
the Class B Stock shall be consummated at the offices of the
Purchaser at 500 North Akard, Suite 1204, Dallas, Texas 75201 (the
"Purchaser Offices"), simultaneously with the closings of both the
Torchmark and Stephens Agreements.
2.2 Deliveries at the Closing. At the Closing,
(a) CNC shall deliver to Purchaser
(i) certificates evidencing the Class B
Stock, duly endorsed in blank or accompanied by
stock powers duly executed in blank, and otherwise
in proper form to transfer all right, title and
interest of CNC in the Class B Stock to Purchaser;
(ii) the legal opinion of counsel for CNC
specified in Section 6.5 hereof; and
(iii) all certificates and other instruments
and documents required to be delivered by CNC to
Purchaser at or prior to the Closing in connection
with this Agreement.
(b) Purchaser shall deliver to CNC
(i) $500,000 in immediately available funds
by federal wire transfer to CNC at ____________
(the "CNC Account");
(ii) the legal opinion of counsel for Purchas-
er specified in Section 5.5 hereof; and
(iii) all certificates and other instruments
and documents required to be delivered by Purchaser
to CNC at or prior to the Closing in connection
with this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF CNC
CNC hereby represents and warrants to Purchaser as follows:
3.1 Organization. CNC is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Kentucky, with all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transac-
tions contemplated hereby.
3.2 Title to Class B Stock. CNC is the lawful owner of, with
good and marketable title to, the Class B Stock. Subject to the
terms of that certain agreement between the Purchaser and Shaw
dated October 8, 1984, CNC owns the Class B Stock free and clear of
all Claims and, will transfer to Purchaser good and marketable
title to the Class B Stock at the Closing free and clear of all
Claims.
3.3 Authorization and Validity. The execution, delivery and
performance by CNC of this Agreement, and the consummation of the
transactions contemplated hereby, have been duly authorized by CNC,
and no other corporate proceedings on the part of CNC, and no other
actions by Shaw or Rice, are necessary to authorize and approve
this Agreement and the transactions contemplated hereby. This
Agreement has been duly executed and delivered by CNC and consti-
tutes the legal, valid and binding obligation of CNC, enforceable
against CNC in accordance with its terms, except as may be limited
by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies.
3.4 No Violation. Neither the execution, delivery or
performance of this Agreement nor the consummation of the transac-
tions contemplated hereby will (i) conflict with, or result in a
violation or breach of the terms, conditions or provisions of, or
constitute a default under, the articles of incorporation or bylaws
of CNC or any agreement, indenture or other instrument under which
CNC is bound or to which any of the Class B Stock are subject, or
result in the creation or imposition of any security interest,
lien, charge or encumbrance upon any of the Class B Stock or
(ii) violate, conflict with or require any consent under any
judgment, injunction, decree, order, statute, rule or regulation of
any court or any public, governmental or regulatory agency or body
having jurisdiction over CNC or any of its properties except as may
be required by the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act") or such filings as may be required
by applicable federal or state securities laws or state insurance
laws or regulations as a result of the transactions contemplated
hereby.
3.5 Upon completion of the Closing, CNC shall cease to have
Beneficial Ownership of the Class B Stock within the meaning of
Article Four, section A2 of the Restated Certificate of Incorpora-
tion of the Purchaser.
3.6 Finder's Fee. CNC has not incurred any obligation for
any finder's, broker's or agent's fee in connection with the
transactions contemplated hereby.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to CNC as follows:
4.1 Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware, with all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transac-
tions contemplated hereby.
4.2 Authorization and Validity. The execution, delivery and
performance by Purchaser of this Agreement, and the consummation of
the transactions contemplated hereby, have been duly authorized by
Purchaser, and no other corporate proceedings on the part of
Purchaser are necessary to authorize and approve this Agreement and
the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Purchaser and constitutes the legal,
valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable
remedies.
4.3 No Violation. Neither the execution, delivery or
performance of this Agreement nor the consummation of the transac-
tions contemplated hereby will (i) conflict with, or result in a
violation or breach of the terms, conditions or provisions of, or
constitute a default under, the articles of incorporation or bylaws
of Purchaser or any agreement, indenture or other instrument under
which Purchaser is bound or (ii) violate, conflict with or require
any consent under any judgment, injunction, decree, order, statute,
rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over Purchaser or any
of its properties except as may be required by the HSR Act or such
filings as may be required by applicable federal or state securi-
ties laws and state insurance laws or regulations as a result of
the transactions contemplated hereby.
4.4 Finder's Fee. Purchaser has not incurred any obligation
for any finder's, broker's or agent's fee in connection with the
transactions contemplated hereby.
4.5 Acquisition for Investment. Purchaser is acquiring the
Class B Stock not with a view toward, or for sale in connection
with, any distribution thereof, nor with any present intention of
distributing or selling the Class B Stock. Purchaser acknowledges
that the Class B Stock converts into Common Stock upon its transfer
to Purchaser, and Purchaser agrees that said Common Stock may not
be sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of (i) without registration under the Securities
Act of 1933, as amended, except pursuant to an exemption from such
registration available under such Act, and (ii) except in accor-
dance with any applicable provisions of state securities laws.
Purchaser acknowledges that the certificates representing the Class
B Stock shall be canceled immediately after the Closing.
ARTICLE 5
CONDITIONS TO THE OBLIGATIONS OF CNC
The obligations of CNC under this Agreement are subject to the
satisfaction or, unless prohibited by law, the waiver by CNC, at or
before the Closing, of each of the following conditions:
5.1 Representations and Warranties. Each of the representa-
tions and warranties of Purchaser contained in this Agreement shall
be true and correct in all material respects as of the date when
made and at and as of the Closing Date as though such representa-
tions and warranties were made at and as of such date.
5.2 Performance. Purchaser shall have performed and complied
in all material respects with all agreements, obligations and
conditions required by this Agreement to be so performed or
complied with by it at or prior to the Closing.
5.3 Officer's Certificates. Purchaser shall have delivered
to CNC a certificate, dated the Closing Date and executed by the
President or Vice President of Purchaser, as applicable, certifying
its fulfillment of the conditions specified in Sections 5.1 and 5.2
hereof.
5.4 No Injunction. On the Closing Date, there shall be no
effective injunction, writ, preliminary restraining order or any
order of any nature issued by a court of competent jurisdiction
restraining or prohibiting consummation of any of the transactions
contemplated hereby.
5.5 Closing. All conditions to closing the Torchmark and
Stephens Agreements shall have been satisfied or waived.
5.6 Opinions of Counsel. CNC shall have been furnished with
the opinion, dated the Closing Date, of Mr. Sheryl G. Snyder,
counsel for Purchaser, with respect to the matters set forth in
Sections 4.1, 4.2 and 4.3 hereof.
ARTICLE 6
CONDITIONS TO THE OBLIGATIONS OF PURCHASER
The obligations of Purchaser under this Agreement are subject
to the satisfaction or, unless prohibited by law, the waiver by
Purchaser, at or before the Closing, of each of the conditions set
forth below:
6.1 Representations and Warranties. Each of the representa-
tions and warranties of CNC, contained in this Agreement shall be
true and correct in all material respects as of the date when made
and at and as of the Closing Date as though such representations
and warranties were made at and as of such date.
6.2 Services Agreement. Shaw shall have executed the
Independent Contractor and Services Agreement attached hereto, Rice
shall have executed both the Employment Agreement and Independent
Contractor and Services Agreement attached hereto, and that certain
Management and Consulting Agreement dated December 27, 1984 among
CNC (formerly Consolidated National Successor Corporation) and
Purchaser shall have been terminated.
6.3 Performance. CNC shall have performed and complied in
all material respects with all agreements, obligations and
conditions required by this Agreement to be so performed or
complied with by it at or prior to the Closing.
6.4 Officer's Certificates. CNC shall have delivered to
Purchaser a certificate, dated the Closing Date and executed by the
President or Vice President of CNC certifying its fulfillment of
the conditions specified in Sections 6.1 and 6.2 hereof.
6.5 No Injunction. On the Closing Date, there shall be no
effective injunction, writ, preliminary restraining order or any
order of any nature issued by a court of competent jurisdiction
restraining or prohibiting consummation of any of the transactions
contemplated hereby.
6.6 Opinions of Counsel. Purchaser shall have been furnished
with the opinions, dated the Closing Date, of Mr. Phillip E. Allen,
counsel for CNC, with respect to the matters set forth in Sections
3.1, 3.2, 3.3, 3.4 and 3.5 hereof, and Weil, Gotshal and Manges as
to the matters set forth in Section 3.5 hereof.
ARTICLE 7
MISCELLANEOUS
7.1 Covenant to Satisfy Conditions. Each party to this
Agreement shall use its respective best efforts to satisfy the
conditions set forth herein to the Closing insofar as such matters
are within their respective control.
7.2 Public Announcements. The parties hereto will consult
with each other party before issuing any press release or otherwise
making any public statements with respect to this Agreement or the
transactions contemplated hereby.
7.3 Expenses. Each of the parties hereto shall pay its own
fees and expenses (including the fees of any attorneys, accoun-
tants, investment bankers or others engaged by such party) in
connection with this Agreement and the transactions contemplated
hereby whether or not the transactions contemplated hereby are
consummated.
7.4 Headings. The section headings herein are for conve-
nience of reference only, do not constitute part of this Agreement
and shall not be deemed to limit or otherwise affect any of the
provisions hereof.
7.5 Notices. All notices or other communications required or
permitted hereunder shall be given in writing and shall be deemed
sufficient if delivered by hand or mailed by registered or
certified mail, postage prepaid (return receipt requested), as
follows:
If to CNC:
Consolidated National Corporation
4211 Norbourne Blvd.
Louisville, Kentucky 40207
Attention: Robert T. Shaw
With a copy to:
Weil, Gotshal & Manges
901 Main Street
Suite 4100
Dallas, Texas 75202
If to Purchaser:
I.C.H. Corporation
500 North Akard
Suite 1204
Dallas, Texas 75201
Attention: R. L. Beisenherz
With a copy to:
I.C.H. Corporation
100 Mallard Creek Road
Louisville, Kentucky 40257
Attention: General Counsel
or such other address as shall be furnished in writing by such
party, and any such notice or communication shall be effective and
be deemed to have been given as of the date so delivered or three
days after the date so mailed; provided, however, that any notice
or communication changing any of the addresses set forth above
shall be effective and deemed given only upon its receipt.
7.6 Assignment and Termination. This Agreement and all of
the provisions hereof shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
permitted assigns; provided, however, that neither this Agreement
nor any of the rights, interests, or obligations hereunder may be
assigned by any of the parties hereto without the prior written
consent of the other parties. In the event Purchaser acknowledges
in writing to CNC that the Torchmark and Stephens Agreements have
been validly terminated, either party may terminate this Agreement
by written notice to the other party to this Agreement.
7.7 Entire Agreement. This Agreement (including the Exhibits
hereto) embodies the entire agreement and understanding of the
parties with respect to the transactions contemplated hereby and
supersedes all prior written or oral commitments, arrangements or
understandings with respect thereto. There are no restrictions,
agreements, promises, warranties, covenants or undertakings with
respect to the transactions contemplated hereby other than those
expressly set forth herein.
7.8 Modifications, Amendments and Waivers. At any time prior
to the Closing, to the extent permitted by law, (i) the parties
hereto may, by written agreement executed by all parties, modify,
amend or supplement any term or provision of this Agreement and
(ii) any term or provision of this Agreement may be waived in
writing by the party or parties entitled to the benefits thereof.
7.9 Counterparts. This Agreement may be executed in two or
more counterparts, all of which together shall be considered one
and the same agreement and each of which shall be deemed an
original.
7.10 Governing Law. This Agreement shall be governed by the
laws of the State of Delaware (regardless of the laws that might be
applicable under principles of conflicts of law) as to all matters,
including but not limited to matters of validity, construction,
effect and performance.
7.11 Severability. If any one or more of the provisions of
this Agreement shall be held to be invalid, illegal or unenforce-
able, the validity, legality or enforceability of the remaining
provisions of this Agreement shall not be affected thereby. To the
extent permitted by applicable law, each party waives any provision
of law which renders any provision of this Agreement invalid,
illegal or unenforceable in any respect.
7.12 Specific Performance. The parties hereto recognize that
any breach of the terms of this Agreement may give rise to
irreparable harm for which money damages would not be an adequate
remedy, and accordingly agree that, in addition to other remedies,
any non-breaching party shall be entitled to enforce the terms of
this Agreement by a decree of specific performance without the
necessity of proving the inadequacy as a remedy of money damages.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
CONSOLIDATED NATIONAL CORPORATION
By:________________________________
Name: Robert T. Shaw
Title: Chairman of the Board
I.C.H. CORPORATION
By:________________________________
Name: Robert L. Beisenherz
Title: Chairman of the Board
<PAGE>
EXHIBIT B TO EXHIBIT NO. 1
INDEPENDENT CONTRACTOR AND SERVICES AGREEMENT
This Independent Contractor and Services Agreement (this
"Agreement") is made and entered into as of January ___, 1994, by
and between I.C.H. Corporation, a Delaware corporation (the
"Company"), and Robert T. Shaw ("Shaw").
IN CONSIDERATION of the premises and mutual covenants
contained herein, and for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Company
and Shaw hereby agree as follows:
1. Retention. The Company hereby agrees to retain Shaw to
perform, and Shaw hereby agrees to perform, the services described
in Section 6 hereof.
2. Compensation. In consideration of past services rendered
by Shaw to the Company prior to the date hereof, the Company is
paying to Shaw, concurrently with the execution and delivery of
this Agreement, $1,222,000 cash. In consideration of the services
to be performed by Shaw hereunder, the Company agrees to pay to
Shaw an annual fee, payable in cash as follows: $800,000 for each
of the first through fifth years of this Agreement; $575,000 for
the sixth year of this Agreement; and $75,000 for each of the
seventh through tenth years of this Agreement (with such fee for
the first year being due upon the execution and delivery of this
Agreement and such fee for each ensuing year being due on the first
business day of each such year). Unless required by law or
regulation, the Company shall not withhold any amounts, for taxes
or otherwise, from any payments made to Shaw pursuant to this
Section 2.
3. Reimbursement of Expenses. The Company shall reimburse
Shaw promptly for all reasonable out-of-pocket expenses incurred by
Shaw in connection with (i) any business opportunities identified
by Shaw and pursued by the Company, and (ii) any services provided
at the Company's request, it being understood that any such
expenses shall be reimbursed in accordance with the Company's
expense reimbursement policies for senior executives, as such
policies may be amended from time to time.
4. Benefits. During the term of this Agreement, the Company
shall provide to Shaw those employee benefits available from time
to time to the Company's senior executive officers (including life
and health insurance), other than awards made pursuant to stock
option, bonus or other compensation plans; provided that the
Company shall not be obligated to afford Shaw coverage under any
benefit plan if such coverage would be in violation of the terms of
the plan or applicable law. Shaw's present spouse and present
dependents shall also be afforded such benefits during the term of
this Agreement; provided that (i) such coverage is not in violation
of the terms of the subject benefit plan or applicable law and (ii)
one or more of the cash payments provided for in Section 2 are
reduced, or the Company receives cash payments from Shaw, in such
amounts as are mutually agreed to by Shaw and the Chief Executive
Officer of the Company as the value of such coverage. The Company
agrees that Shaw is immediately and fully vested under all existing
employee benefit plans which are applicable to Shaw. In addition,
with respect to vesting requirements under any future employee
benefit plans applicable to Shaw hereunder, Shaw will receive
service credit for all years during which Shaw has been an
executive officer or director of the Company and all years during
which Shaw has performed services under this Agreement. Following
termination of this Agreement, (i) Shaw shall be entitled to all
retirement benefits afforded retired senior executive officers of
the Company, (ii) Shaw and his present wife and present dependents
shall be permitted, for as long as they live, to continue the full
amount of any Company health insurance coverage in effect at the
time this Agreement is terminated, and (iii) Shaw shall be
permitted to continue his term life insurance coverage in the face
amount of not less than one million dollars. Notwithstanding the
foregoing, the Company shall not be obligated to provide Shaw with
the health and life insurance coverage described in the preceding
sentence unless (i) such coverage can be obtained by the Company
through reasonable efforts and (ii) Shaw reimburses the Company, as
billed, for all costs and expenses incurred by it in providing such
coverage.
5. Support Services. During the term of this Agreement, the
Company will provide Shaw office space and secretarial support on
terms to be mutually agreed upon by Shaw and the Chief Executive
Officer of the Company, it being understood that all costs and
expenses incurred by the Company in providing office space (other
than the office space presently provided to Shaw by the Company for
as long as the Company shall maintain offices in that location) and
secretarial services shall be deducted from the payments to Shaw
provided in Section 2.
6. Services to Be Performed. During the term of this
Agreement, Shaw will attempt to identify business opportunities in
the insurance industry which, in the judgment of Shaw, may be
suitable for the Company and will notify the Company of any
opportunities so identified. If the Company does not elect to
pursue an opportunity so identified by Shaw within 30 days of such
notice, then Shaw shall be free to capitalize on such opportunity
as he may elect in his sole discretion. Without limiting the
foregoing, Shaw may capitalize on any such opportunity which the
Company does not elect to pursue by developing such opportunity (by
himself or with others), through investment or otherwise, and/or by
transferring such opportunity to others (with or without consider-
ation paid to Shaw in connection with such transfer). Shaw also
will make himself available during the term of this Agreement to
consult with the Company regarding such other matters as the
Company may reasonably request. On each anniversary date of this
Agreement, the Company will review Shaw's performance of services
hereunder during the immediately preceding year and may issue to
Shaw, in respect of such services, such number of warrants to
acquire common stock of the Company as the Company may determine in
its sole discretion. The terms and conditions of any such warrants
shall be determined by the Company in its sole discretion.
7. Limitation on Employment. During the term of the
Agreement, absent the consent of the Company (which will not be
unreasonably withheld), Shaw may not serve as an officer, director,
or employee of any insurance company (other than Consolidated
Fidelity Life Insurance Company and/or its affiliates).
8. Nature of Relationship. It is agreed and understood that
Shaw is associated with the Company only for the purposes and to
the extent set forth herein and that Shaw's relationship to the
Company shall, during the period or periods of Shaw's association
and his performance of services hereunder, be that of an indepen-
dent contractor. Although there shall be no minimum number of
hours required to be spent by Shaw in the performance of such
services, Shaw will make himself available at reasonable times to
perform the services hereunder and to consult with the Company
regarding such matters as the Company may reasonably request. The
parties acknowledge that Shaw shall be free to pursue his other
business and personal interests to the extent such interests do not
involve activities prohibited by Section 7 hereof. The Company
acknowledges that the pursuit or development by Shaw of opportuni-
ties identified by Shaw to the Company but which the Company does
not elect to pursue may present a conflict with the interests of
the Company. Nevertheless, Shaw shall be permitted to pursue and
develop such opportunities as if no such conflict existed.
9. Term and Termination. This Agreement shall terminate on
the date that is ten (10) years following the date hereof (the
"Scheduled Termination Date"). The Company shall not be permitted
to terminate this Agreement prior to the Scheduled Termination Date
for any reason. In the event that, notwithstanding the foregoing,
this Agreement is terminated by operation of law prior to the
Scheduled Termination Date, other than as the result of the death
of Shaw (whether as a result of disability, incapacity, insolvency,
bankruptcy, or otherwise), the Company shall, to the extent
permitted by law, continue to pay to Shaw the compensation and
benefits provided by this Agreement as if this Agreement had not
been so terminated. In the event of the death of Shaw, this
Agreement shall terminate automatically, and the Company shall pay
to the estate of Shaw a lump sum cash payment equal to the present
value of the remaining aggregate annual compensation which would
have been payable to Shaw for all remaining years under this
Agreement had this Agreement not been so terminated. The "present
value" of such compensation shall be determined by discounting the
remaining scheduled payments in accordance with generally accepted
financial practice at an annual discount rate of eight percent
(8%). Upon the making of such lump sum payment, all further
liability of the Company under this Agreement shall cease. In
addition, the provisions of the last two sentences of Section 4 and
Sections 10 through 20 of this Agreement shall survive, for an
indefinite period, any termination of this Agreement.
10. Indemnification. The Company shall indemnify Shaw
against any and all claims, losses, damages, liabilities, expenses
(including legal fees and expenses), obligations, demands,
proceedings, rights, causes of action, actions, and suits of any
nature whatsoever (collectively, "Claims") which may hereafter be
imposed on, incurred by, or entered or asserted against Shaw by
reason of this Agreement or the services performed or to be
performed hereunder, other than claims resulting from acts
involving negligence, willful malfeasance, bad faith or reckless
disregard of his duties by Shaw.
11. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas
applicable to contracts made and to be performed in such state.
12. Binding Agreement; Assignment. This Agreement and all
provisions contained herein shall be binding upon and inure to the
benefit of the parties hereto and their respective representatives,
successors and assigns, provided, however that neither party may
assign its rights or obligations hereunder without the prior
written consent of the other party hereto.
13. Captions. The captions, headings and arrangements used
in this Agreement are for convenience only and do not in any way
affect, limit, amplify, or modify the terms and provisions hereof.
14. Notices. Any notice required by this Agreement, shall be
considered given upon receipt if a written copy is sent by United
States certified mail, return receipt requested, and addressed as
follows:
If to the Company: I.C.H. Corporation
Lincoln Plaza
500 N. Akard, Suite 1204
Dallas, Texas 75221
Attn: Robert L. Beisenherz
With a copy to: I.C.H. Corporation
100 Mallard Creek Road
Louisville, Kentucky 40205
Attn: General Counsel
If to Shaw: Robert T. Shaw
784 Harrington Lake Drive North
Venice, Florida 34293
With a copy to: Weil, Gotshal & Manges
100 Crescent Court, Suite 1300
Dallas, Texas 75201-6950
Attn: Thomas A. Roberts
A party may change its or his address by giving written notice
to the other party hereto, which notice shall be effective upon
actual receipt.
15. Invalid Provisions. If any provision of this Agreement
is held to be illegal, invalid, or unenforceable under present or
future laws effective during the term of this Agreement, such
provision shall be fully severable; this Agreement shall be
construed and enforced as if such illegal, invalid, or unenforce-
able provision had never comprised a part of this Agreement; and
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 from this Agreement.
Furthermore, in lieu of each such illegal, invalid, or unenforce-
able provision there shall be added automatically as part of this
Agreement, a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and be
legal, valid, and enforceable.
16. Amendments. This Agreement may be amended at any time
and from time to time in whole or in part by an instrument in
writing setting forth the particulars of such amendment duly
executed by both the Company and Shaw.
17. Entire Agreement. This Agreement constitutes the entire
understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements or
understandings if any, relating to the subject matter hereof.
18. Number and Gender. Whenever herein the singular number
is used, the same shall include the plural where appropriate, and
the words of any gender shall include each other gender where
appropriate.
19. Waiver. The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach by any party.
20. Counterparts. This Agreement may be executed in two or
more identical counterparts, each of which for all purposes shall
be deemed an original, and all of which shall constitute, collec-
tively, one agreement; but in making proof of this Agreement, it
shall not be necessary to produce or account for more than one such
counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date first
above written.
I.C.H. CORPORATION
BY:________________________________
TITLE:_____________________________
SHAW
_________________________________
ROBERT T. SHAW
<PAGE>
EXHIBIT C TO EXHIBIT NO. 1
INDEPENDENT CONTRACTOR AND SERVICES AGREEMENT
This Independent Contractor and Services Agreement (this
"Agreement") is made and entered into as of January ___, 1994, by
and between I.C.H. Corporation, a Delaware corporation (the
"Company"), and C. Fred Rice ("Rice").
IN CONSIDERATION of the premises and mutual covenants
contained herein, and for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Company
and Rice hereby agree as follows:
1. Retention. The Company hereby agrees to retain Rice to
perform, and Rice hereby agrees to perform, the services described
in Section 6 hereof.
2. Compensation. In consideration of past services rendered
by Rice to the Company prior to the date hereof, the Company is
paying to Rice, concurrently with the execution and delivery of
this Agreement, $778,000 cash. In consideration of the services to
be performed by Rice hereunder, the Company agrees to pay to Rice
an annual fee, payable in cash as follows: $600,000 for each of
the first through fifth years of this Agreement; $500,000 for the
sixth year of this Agreement; and $50,000 for each of the seventh
through tenth years of this Agreement (with such fee for the first
year being due upon the execution and delivery of this Agreement
and such fee for each ensuing year being due on the first business
day of each such year). Unless required by law or regulation, the
Company shall not withhold any amounts, for taxes or otherwise,
from any payments made to Rice pursuant to this Section 2.
3. Reimbursement of Expenses. The Company shall reimburse
Rice promptly for all reasonable out-of-pocket expenses incurred by
Rice in connection with (i) any business opportunities identified
by Rice and pursued by the Company, and (ii) any services provided
at the Company's request, it being understood that any such
expenses shall be reimbursed in accordance with the Company's
expense reimbursement policies for senior executives, as such
policies may be amended from time to time.
4. Benefits. During the term of this Agreement, the Company
shall provide to Rice those employee benefits available from time
to time to the Company's senior executive officers (including life
and health insurance), other than awards made pursuant to stock
option, bonus or other compensation plans; provided that the
Company shall not be obligated to afford Rice coverage under any
benefit plan if such coverage would be in violation of the terms of
the plan or applicable law. Rice's present spouse and present
dependents shall also be afforded such benefits during the term of
this Agreement; provided that (i) such coverage is not in violation
of the terms of the subject benefit plan or applicable law and (ii)
one or more of the cash payments provided for in Section 2 are
reduced, or the Company receives cash payments from Rice, in such
amounts as are mutually agreed to by Rice and the Chief Executive
Officer of the Company as the value of such coverage. The Company
agrees that Rice is immediately and fully vested under all existing
employee benefit plans which are applicable to Rice. In addition,
with respect to vesting requirements under any future employee
benefit plans applicable to Rice hereunder, Rice will receive
service credit for all years during which Rice has been an
executive officer or director of the Company and all years during
which Rice has performed services under this Agreement. Following
termination of this Agreement, (i) Rice shall be entitled to all
retirement benefits afforded retired senior executive officers of
the Company, (ii) Rice and his present wife and present dependents
shall be permitted, for as long as they live, to continue the full
amount of any Company health insurance coverage in effect at the
time this Agreement is terminated, and (iii) Rice shall be
permitted to continue his term life insurance coverage in the face
amount of not less than one million dollars. Notwithstanding the
foregoing, the Company shall not be obligated to provide Rice with
the health and life insurance coverage described in the preceding
sentence unless (i) such coverage can be obtained by the Company
through reasonable efforts and (ii) Rice reimburses the Company, as
billed, for all costs and expenses incurred by it in providing such
coverage.
5. Support Services. During the term of this Agreement, the
Company will provide Rice office space and secretarial support on
terms to be mutually agreed upon by Rice and the Chief Executive
Officer of the Company, it being understood that all costs and
expenses incurred by the Company in providing office space (other
than the office space presently provided to Rice by the Company for
as long as the Company shall maintain offices in that location) and
secretarial services shall be deducted from the payments to Rice
provided in Section 2.
6. Services to Be Performed. During the term of this
Agreement, Rice will attempt to identify business opportunities in
the insurance industry which, in the judgment of Rice, may be
suitable for the Company and will notify the Company of any
opportunities so identified. If the Company does not elect to
pursue an opportunity so identified by Rice within 30 days of such
notice, then Rice shall be free to capitalize on such opportunity
as he may elect in his sole discretion. Without limiting the
foregoing, Rice may capitalize on any such opportunity which the
Company does not elect to pursue by developing such opportunity (by
himself or with others), through investment or otherwise, and/or by
transferring such opportunity to others (with or without consider-
ation paid to Rice in connection with such transfer). Rice also
will make himself available during the term of this Agreement to
consult with the Company regarding such other matters as the
Company may reasonably request. On each anniversary date of this
Agreement, the Company will review Rice's performance of services
hereunder during the immediately preceding year and may issue to
Rice, in respect of such services, such number of warrants to
acquire common stock of the Company as the Company may determine in
its sole discretion. The terms and conditions of any such warrants
shall be determined by the Company in its sole discretion.
7. Limitation on Employment. During the term of the
Agreement, absent the consent of the Company (which will not be
unreasonably withheld), Rice may not serve as an officer, director,
or employee of any insurance company other than the Company and its
affiliates, Consolidated Fidelity Life Insurance Company and/or its
affiliates, and Financial Benefit Group, Inc.
8. Nature of Relationship. It is agreed and understood that
Rice is presently Senior Executive Vice President and a Director of
the Company and otherwise associated with the Company only for the
purposes and to the extent set forth herein and that Rice's
relationship to the Company shall, during the period or periods of
Rice's association and his performance of services hereunder, be
that of an independent contractor. Although there shall be no
minimum number of hours required to be spent by Rice in the
performance of such services, Rice will make himself available at
reasonable times to perform the services hereunder and to consult
with the Company regarding such matters as the Company may
reasonably request. The parties acknowledge that Rice shall be
free to pursue his other business and personal interests to the
extent such interests do not involve activities prohibited by
Section 7 heretofore the Delaware General Corporate Law. The
Company acknowledges that the pursuit or development by Rice of
opportunities identified by Rice to the Company but which the
Company does not elect to pursue may present a conflict with the
interests of the Company. Nevertheless, Rice shall be permitted to
pursue and develop such opportunities as if no such conflict
existed provided that such activities are not prohibited by the
Delaware Corporate Law.
9. Term and Termination. This Agreement shall terminate on
the date that is ten (10) years following the date hereof (the
"Scheduled Termination Date"). The Company shall not be permitted
to terminate this Agreement prior to the Scheduled Termination Date
for any reason. In the event that, notwithstanding the foregoing,
this Agreement is terminated by operation of law prior to the
Scheduled Termination Date, other than as the result of the death
of Rice (whether as a result of disability, incapacity, insolvency,
bankruptcy, or otherwise), the Company shall, to the extent
permitted by law, continue to pay to Rice the compensation and
benefits provided by this Agreement as if this Agreement had not
been so terminated. In the event of the death of Rice, this
Agreement shall terminate automatically, and the Company shall pay
to the estate of Rice a lump sum cash payment equal to the present
value of the remaining aggregate annual compensation which would
have been payable to Rice for all remaining years under this
Agreement had this Agreement not been so terminated. The "present
value" of such compensation shall be determined by discounting the
remaining scheduled payments in accordance with generally accepted
financial practice at an annual discount rate of eight percent
(8%). Upon the making of such lump sum payment, all further
liability of the Company under this Agreement shall cease. In
addition, the provisions of the last two sentences of Section 4,
and Sections 10 through 20 of this Agreement shall survive, for an
indefinite period, any termination of this Agreement.
10. Indemnification. The Company shall indemnify Rice
against any and all claims, losses, damages, liabilities, expenses
(including legal fees and expenses), obligations, demands,
proceedings, rights, causes of action, actions, and suits of any
nature whatsoever (collectively, "Claims") which may hereafter be
imposed on, incurred by, or entered or asserted against Rice by
reason of this Agreement or the services performed or to be
performed hereunder, other than claims resulting from acts
involving negligence, willful malfeasance, bad faith or reckless
disregard of his duties by Rice.
11. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas
applicable to contracts made and to be performed in such state.
12. Binding Agreement; Assignment. This Agreement and all
provisions contained herein shall be binding upon and inure to the
benefit of the parties hereto and their respective representatives,
successors and assigns, provided, however that neither party may
assign its rights or obligations hereunder without the prior
written consent of the other party hereto.
13. Captions. The captions, headings and arrangements used
in this Agreement are for convenience only and do not in any way
affect, limit, amplify, or modify the terms and provisions hereof.
14. Notices. Any notice required by this Agreement, shall be
considered given upon receipt if a written copy is sent by United
States certified mail, return receipt requested, and addressed as
follows:
If to the Company: I.C.H. Corporation
Lincoln Plaza
500 N. Akard, Suite 1204
Dallas, Texas 75221
Attn: Robert L. Beisenherz
With a copy to: I.C.H. Corporation
100 Mallard Creek Road
Louisville, Kentucky 40205
Attn: General Counsel
If to Rice: C. Fred Rice
4213 Snowberry Lane
Naples, Florida 33999
With a copy to: Weil, Gotshal & Manges
100 Crescent Court, Suite 1300
Dallas, Texas 75201-6950
Attn: Thomas A. Roberts
A party may change its or his address by giving written notice
to the other party hereto, which notice shall be effective upon
actual receipt.
15. Invalid Provisions. If any provision of this Agreement
is held to be illegal, invalid, or unenforceable under present or
future laws effective during the term of this Agreement, such
provision shall be fully severable; this Agreement shall be
construed and enforced as if such illegal, invalid, or unenforce-
able provision had never comprised a part of this Agreement; and
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 from this Agreement.
Furthermore, in lieu of each such illegal, invalid, or unenforce-
able provision there shall be added automatically as part of this
Agreement, a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and be
legal, valid, and enforceable.
16. Amendments. This Agreement may be amended at any time
and from time to time in whole or in part by an instrument in
writing setting forth the particulars of such amendment duly
executed by both the Company and Rice.
17. Entire Agreement. This Agreement constitutes the entire
understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements or
understandings if any, relating to the subject matter hereof.
18. Number and Gender. Whenever herein the singular number
is used, the same shall include the plural where appropriate, and
the words of any gender shall include each other gender where
appropriate.
19. Waiver. The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach by any party.
20. Counterparts. This Agreement may be executed in two or
more identical counterparts, each of which for all purposes shall
be deemed an original, and all of which shall constitute, collec-
tively, one agreement; but in making proof of this Agreement, it
shall not be necessary to produce or account for more than one such
counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date first
above written.
I.C.H. CORPORATION
BY:________________________________
TITLE:_____________________________
RICE
___________________________________
C. FRED RICE
<PAGE>
SCHEDULE I TO EXHIBIT NO. 1
SCHEDULE I
Agreements, other than those contemplated in connection with
the Transactions, that will continue beyond the Closing:
Agreements relating to relationships
between ICH and CNC/CFLIC that are dealt with in the
June 15, 1993 Agreement between CNC and CFLIC
1. Agreement, dated June 15, 1993, among ICH, Consolidated
National Corporation and Consolidated Fidelity Life Insurance
Company, and all amendments thereto.
2. Stock Purchase Agreement dated June 29, 1990, among Consoli-
dated National Corporation, Robert T. Shaw and Bankers Life
and Casualty Company with respect to all outstanding capital
stock of Marquette National Life Insurance Company, including
Exhibit 1.35 thereto governing the coinsurance relationship
between Southwestern Life Insurance Company and Marquette
National Life Insurance Company (filed as Exhibits 2.1 and 2.3
to ICH's Report on Form 10-Q for the quarter ended June 30,
1990).
3. Coinsurance Annuity Reinsurance Agreement -- October 1, 1990,
for Bankers Life and Casualty Company (filed as Exhibit 19-1
to ICH's Current Report on Form 8-K dated November 9, 1990)
and amendments thereto (filed as Exhibit 2.11 to ICH's Annual
Report on Form 10-K for year ended December 31, 1991, and
Exhibit 2.11 to ICH's Annual Report on Form 10-K for the year
ended December 31, 1992).
4. Coinsurance Annuity Retrocession Agreement (Bankers Business)
-- October 1, 1990 for Marquette National Life Insurance
Company (filed as Exhibit 19-2 to ICH's Current Report on Form
8-K dated November 9, 1990), and amendments and supplemental
agreements thereto (filed as Exhibit 2.12 to ICH's Annual
Report on Form 10-K for year ended December 31, 1991, and
Exhibits 2.12 and 10.31 to ICH's Annual Report on Form 10-K
for the year ended December 31, 1992).
5. Coinsurance Annuity and Supplemental Contract Reinsurance
Agreement II -- June 30, 1990, for Southwestern Life Insurance
Company (filed as Exhibit 19-3 to ICH's Current Report on Form
8-K dated November 9, 1990), and amendments thereto (filed as
Exhibit 2.13 to ICH's Annual Report on Form 10-K for year
ended December 31, 1991, and Exhibit 2.13 to ICH's Annual
Report on Form 10-K for the year ended December 31, 1992).
6. Coinsurance Annuity and Supplementary Contract Retrocession
Agreement II -- June 30, 1990, for Marquette National Life
Insurance Company (filed as Exhibit 19-4 to ICH's Current
Report on Form 8-K dated November 9, 1990), and amendments
thereto (filed as Exhibit 2.14 to ICH's Annual Report on Form
10-K for year ended December 31, 1991, and Exhibit 2.14 to
ICH's Annual Report on Form 10-K for the year ended Decem-
ber 31, 1992).
7. Letter Agreement, dated March 8, 1993, relating to the
Coinsurance Annuity Reinsurance Agreement referenced in
Paragraph 2 above (filed as Exhibit 2.15 to ICH's Annual
Report on Form 10-K for year ended December 31, 1992).
8. Agreement, dated March 10, 1993, relating to the Coinsurance
Annuity and Supplemental Contract Reinsurance Agreement II
referenced in Paragraph 4 above (filed as Exhibit 2.16 to
ICH's Annual Report on Form 10-K for year ended December 31,
1992).
9. Credit Agreement dated as of September 28, 1990, between ICH
and Consolidated Fidelity Life Insurance Company, as assignee
of the banks party thereto and The Chase Manhattan Bank
(National Association), as Agent for such banks, as amended
(filed as Exhibit 4-1 of ICH's Current Report on Form 8-K
dated November 9, 1990; Exhibit 4.3 to ICH's Annual Report on
Form 10-K for the year ended December 31, 1990; Exhibit 4.3 to
ICH's Annual Report on Form 10-K for year ended December 31,
1991; Exhibit 4.8 to ICH's Report on Form 10-Q for quarter
ended June 30, 1992; and Exhibit 4.9 to ICH's Report on Form
10-Q for quarter ended September 30, 1992).
10. Service and employee reimbursement arrangements under which an
ICH subsidiary provides administrative services to Consolidat-
ed Fidelity Life Insurance Company and/or its subsidiary.
11. The Assignment and Grant of Option executed by Consolidated
Fidelity Life Insurance Company and ICH effective as of
May 21, 1992 (filed as Exhibit 38-1 to Amendment No. 38 to
Schedule 13D filed by Consolidated National Corporation
relating to the Common Stock of ICH).
12. Subordination Agreement dated November 4, 1986, between ICH
and Consolidated National Successor Corporation (filed as
Exhibit 10.33 to ICH's Registration Statement on Form S-3, No.
33-9455).
Agreements relating to the Class B Stock
13. Agreement dated October 8, 1984 between ICH and Robert T. Shaw
(filed as Exhibit I to Amendment No. 25-1 to the Schedule 13D
filed by Consolidated National Successor Corporation and
certain affiliates relating to shares of the Common Stock of
ICH).
Agreements relating to
Fail - CFSB Corporation
14. Intercreditor Agreement between Southwestern Life Insurance
Company and Consolidated Fidelity Life Insurance Company,
dated January 25, 1993 (filed as Exhibit 10.25 to ICH's Annual
Report on Form 10-K for year ended December 31, 1992).
15. Letter Agreement between ICH and Consolidated National
Corporation, dated March 29, 1993 concerning the James
Fail/CFSB Corporation Profit Participation Interest (filed as
Exhibit 10.31 to ICH's Annual Report on Form 10-K for the year
ended December 31, 1992).
Miscellaneous Agreements
16. Letter Agreement between Steven B. Bing, Consolidated National
Corporation and ICH (filed as Exhibit 10.24 to ICH's Annual
Report on Form 10-K for year ended December 31, 1991).
17. Form of Indemnification Agreement with officers and directors
of ICH (including Robert T. Shaw and C. Fred Rice) (filed as
Exhibit 10.22 of ICH's Annual Report on Form 10-K for the year
ended December 31, 1989).
<PAGE>
EXHIBIT NO. 2
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT ("Agreement"), made and entered into
as of January 15, 1994, among I.C.H. Corporation, a Delaware
corporation (the "Company"), Consolidated National Corporation, a
Kentucky Corporation ("CNC"), Consolidated Fidelity Life Insurance
Company, a Kentucky life insurance corporation ("CFLIC"), Robert T.
Shaw ("RTS"), C. Fred Rice ("CFR") and Stephens Inc., an Arkansas
corporation ("Purchaser").
RECITALS
A. CNC desires to sell to Purchaser, and Purchaser desires
to purchase from CNC, 4,236,820 shares (the "CNC Shares") of Common
Stock, par value $1.00 per share, of the Company (the "Common
Stock").
B. CFLIC desires to sell to Purchaser, and Purchaser desires
to purchase from CFLIC, 220,000 shares of Common Stock (the "CFLIC
Shares" and, together with the CNC Shares, the "Shares").
C. CNC, CFLIC, RTS and CFR are collectively referred to as
"Sellers."
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements herein
contained, and on the terms and subject to the conditions herein
set forth, the parties hereto hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF STOCK
Upon the terms and subject to the conditions set forth in this
Agreement, CNC hereby agrees to sell to Purchaser at the Closing
(the "Closing") the CNC Shares, and CFLIC hereby agrees to sell to
Purchaser at the Closing the CFLIC Shares, free and clear of all
liens, security interests, pledges, charges, claims, options,
encumbrances of every kind, escrows, rights of first refusal,
mortgages, indentures, security agreements or other agreements,
arrangements, contracts, commitments, understandings, adverse
claims, and obligations, whether written or oral and whether or not
relating in any way to credit or the borrowing of money (collec-
tively, "Claims"), and Purchaser agrees to purchase the Shares at
the price of $5.00 per share for a total purchase price of
$22,284,100 at the Closing.
ARTICLE 2
CLOSING
2.1 Date and Place of Closing. The Closing for the purchase
and sale of the Shares shall be consummated simultaneously and pari
passu with the closing of the transactions contemplated by (i) that
certain Stock Purchase Agreement, dated January 15, 1994, among
Torchmark Corporation, the Sellers and the Company (the "Torchmark
Agreement") and (ii) that certain Stock Purchase Agreement, dated
January 15, 1994, between the Company and CNC (the "Class B
Agreement"), a copy of which is attached hereto as Exhibit A. The
Closing shall be consummated at the offices of the Company at 500
North Akard, Suite 1204, Dallas, Texas 75201 at 10:00 a.m. local
time on the second business day after all conditions to the Closing
in Articles 5 and 6 and under Articles 5 and 6 of the Torchmark
Agreement have been satisfied or waived or at such other time, date
or place as the parties may agree to in writing. The date of the
Closing is referred to herein as the "Closing Date."
2.2 Deliveries at the Closing. At the Closing,
(a) CNC and CFLIC shall deliver to Purchaser:
(i) certificates evidencing the Shares, duly endorsed in
blank or accompanied by stock powers duly executed in blank,
and otherwise in proper form to transfer all right, title and
interest of CNC and CFLIC free and clear of any Claim in the
Shares to Purchaser;
(ii) legal opinions of counsel for Sellers and the
Company specified in Section 6.5; and
(iii) all certificates and other instruments and documents
required to be delivered by Sellers and the Company to
Purchaser at or prior to the Closing in connection with this
Agreement.
(b) Purchaser shall deliver to CNC and CFLIC:
(i) $21,184,100 in immediately available funds by
federal wire transfer to CNC at the account designated in
writing by CNC;
(ii) $1,100,000 in immediately available funds by federal
wire transfer to CFLIC at the account designated in writing by
CFLIC;
(iii) the legal opinion of counsel for Purchaser specified
in Section 5.5; and
(iv) all certificates and other instruments and documents
required to be delivered by Purchaser to CNC and CFLIC at or
prior to the Closing in connection with this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLERS
AND THE COMPANY
3.1 Representations and Warranties of Sellers. Sellers
hereby represent and warrant to Purchaser as follows:
(a) Organization. Each of CNC and CFLIC is a corpo-
ration duly organized, validly existing and in good standing
under the laws of its jurisdiction of incorporation, with all
requisite corporate power and authority to execute and deliver
this Agreement and to consummate the transactions contemplated
hereby and by the Class B Agreement and the Torchmark Agree-
ment (together with this Agreement, collectively the "Transac-
tions") with respect to CNC and CFLIC.
(b) Title to Shares. CNC is the lawful owner of, with
good and marketable title to, the CNC Shares. CNC owns the
CNC Shares free and clear of all Claims and will transfer to
Purchaser good and marketable title to the CNC Shares at the
Closing free and clear of all Claims. CFLIC is the lawful
owner of, with good and marketable title to, the CFLIC Shares.
CFLIC owns the CFLIC Shares free and clear of all Claims and
will transfer to Purchaser good and marketable title to the
CFLIC Shares at the Closing free and clear of all Claims.
(c) Authorization and Validity. The execution, delivery
and performance by the Company and Sellers of this Agreement
and the Class B Agreement, and the consummation of the
Transactions by Sellers, have been duly authorized by the
Company and Sellers, and no other corporate proceedings on the
part of CNC, CFLIC or the Company are necessary to authorize
and approve this Agreement and the Transactions by Sellers
(except for the approval by the Company's stockholders of the
amendments to the Company's certificate of incorporation
contemplated by Section 6.12 of this Agreement). This
Agreement and the Class B Agreement have been duly executed
and delivered by Sellers and the Company and constitute the
legal, valid and binding obligations of Sellers and the
Company, enforceable against Sellers and the Company in
accordance with their respective terms. The board of direc-
tors of the Company has (i) authorized and approved the
repurchase of its Class B Common Stock, par value $1.00 per
share (the "Class B Stock"), by action of its independent
directors as required by paragraph 3 of the Agreement between
RTS and the Company dated as of October 8, 1984 (the "1984
Agreement") and (ii) has approved this Agreement and the
Transactions and any acquisition of any shares of Common Stock
pursuant hereto or thereto (including, without limitation,
pursuant to any assignment under this Agreement or the
Torchmark Agreement) as a "transaction" in which Purchaser may
become an "interested stockholder" within the meaning of
Section 203 of the Delaware General Corporation Law.
(d) No Violation. Neither the execution, delivery or
performance of this Agreement nor the consummation of the
Transactions will (i) conflict with, or result in a violation
or breach of the terms, conditions or provisions of, or
constitute a default under, the articles or certificates of
incorporation or bylaws of CNC, CFLIC or the Company or their
respective subsidiaries or any agreement (including, without
limitation, the 1984 Agreement), indenture or other instrument
under which the Company or any Seller or their respective
subsidiaries or properties is bound or to which any of the
Shares are subject, or result in the creation or imposition of
any Claim against the Shares or (ii) violate, conflict with or
require any consent under any judgment, injunction, decree,
order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction
over the Company or any Seller or their respective subsidiar-
ies or any of their properties, except for filings that may be
required by the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended (the "HSR Act"), federal and state
securities laws and state insurance laws and regulations.
(e) Finder's Fee. Sellers have not incurred any
obligation for any finder's, broker's or agent's fee in
connection with this Agreement or the Transactions.
(f) Capitalization. The capitalization of the Company
is as follows:
(i) As of the date of this Agreement, the Company
has authorized 200,000,000 shares of Common Stock, $1.00 par
value per share (the "Common Stock"), of which 71,593,610
shares are issued, of which 23,766,471 are held in treasury or
by subsidiaries, 47,827,139 are issued and outstanding, and
10,787,451 shares are reserved for issuance on exercise of
options, warrants or similar rights issued or issuable under
the Company's 1990 stock option incentive plan or upon
conversion of shares of the Company's Preferred Stock or Class
B Stock. All outstanding shares of Common Stock have been
validly issued and are fully paid and nonassessable.
(ii) The Company has authorized 100,000 shares of
Class B Stock, all of which are issued and outstanding and
owned beneficially and of record by CNC; and the Class B Stock
is validly issued, fully paid and nonassessable and not
subject to any option, warrant or right of any person or
entity. Upon transfer of the Class B Stock to the Company at
the Closing of the Class B Agreement, which shall occur
simultaneously with the Closing, (A) all such Class B Stock
shall convert automatically and immediately into fully paid
and nonassessable shares of Common Stock of the Company held
in treasury by the Company without the necessity of further
action; (B) such Common Stock resulting from the conversion of
the Class B Stock will not be subject to reissuance as Class
B Stock; and (C) the capital stock the Company is authorized
to issue shall not include any Class B Stock.
(iii) The Company has authorized 50,000,000 shares of
Series Preferred Stock, without par value (the "Preferred
Stock"), of which three series of Preferred Stock are out-
standing: (A) the Series 1984-A Preferred Stock, of which
541,563 shares are authorized, issued and outstanding and all
of which are owned beneficially and of record by CFLIC; (B)
the $1.75 Convertible Exchangeable Preferred Stock, Series
1986-A, 8,000,000 shares of which are authorized and 7,999,880
shares of which are issued and outstanding; and (C) the Series
1987-B Preferred Stock, 140,000 shares of which are autho-
rized, issued and outstanding, and all of which are owned
beneficially and of record by CFLIC. All outstanding shares
of Preferred Stock have been validly issued and are fully paid
and nonassessable.
Except as set forth above, there are no options, warrants or
similar rights to acquire from the Company or to require the
Company to issue any shares of its capital stock. No out-
standing shares of capital stock of the Company were issued in
violation of preemptive rights.
(g) No Misstatements or Omissions. Sellers have
delivered to Purchaser copies of the Company's Annual Report
of the Company on Form 10-K for the fiscal year ended Decem-
ber 31, 1992; the Quarterly Report of the Company on Form 10-Q
for the period ended September 30, 1993; Amendment No. 1 to
the Quarterly Report on Form 10-Q for the period ended
September 30, 1993; and the definitive proxy statement of the
Company dated April 28, 1993 (the "Information"). The
Information and the representations and warranties of the
Sellers set forth in the instruments evidencing the Transac-
tions do not contain any untrue statement of a material fact
or omit to state any material fact required to be stated
therein or herein or necessary to make the statements therein
or herein not misleading (except as a result of the consumma-
tion of the Transactions). Subsequent to November 15, 1993
the Company has not filed or been required to file any other
report with the Securities and Exchange Commission, other than
filings under Section 13(d) of the Securities Exchange Act of
1934, as amended, relating to investments by subsidiaries and
filings relating to the Transactions.
(h) Affiliate Transactions. Except as set forth in
Schedule I to this Agreement, there will be no agreements,
arrangements, understandings, commitments or investments in
securities in force (other than pursuant to this Agreement and
instruments evidencing the Transactions) between the Company
and its affiliates (other than the Sellers), on the one hand,
and the Sellers and their affiliates (other than the Company
and its direct and indirect subsidiaries), on the other hand,
as of the Closing Date.
(i) No CFLIC Holdings. Upon closing of all the transac-
tions contemplated by that certain agreement dated June 15,
1993, as amended, among the Company, CNC and CFLIC (the "CFLIC
Agreement"), CFLIC will no longer own any shares of the
Company's equity securities or any securities exercisable for
or convertible into the Company's equity securities, includ-
ing, without limitation, the remaining 560,000 shares of the
Company's Common Stock which will not be acquired in the
Transactions, the Series 1984-A Preferred Stock and the Series
1987-B Preferred Stock. After giving effect to the foregoing
transactions (including the Transactions and the transactions
under the CFLIC Agreement and the Class B Agreement), Sellers
and their respective affiliates will beneficially own in the
aggregate no equity securities of the Company other than
1,000,000 shares of Common Stock.
3.2 Representations and Warranties of the Company. The
Company hereby represents and warrants to Purchaser as follows:
(a) Organization. The Company is a corporation duly
organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, with all requisite
corporate power and authority to execute and deliver this
Agreement and to consummate the Transactions with respect to
the Company.
(b) Authorization and Validity. The execution, delivery
and performance by the Company of this Agreement and the Class
B Agreement, and the consummation of the Transactions by the
Company, have been duly authorized by the Company, and no
other corporate proceedings on the part of the Company are
necessary to authorize and approve this Agreement and the
Transactions by the Company (except for the approval by the
Company's stockholders of the amendments to the Company's
certificate of incorporation contemplated by Section 6.12 of
this Agreement). This Agreement and the Class B Agreement
have been duly executed and delivered by the Company and
constitute the legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with
their respective terms. The board of directors of the Company
has (i) authorized and approved the repurchase of its Class B
Stock by action of its independent directors as required by
paragraph 3 of the 1984 Agreement and (ii) has approved this
Agreement and the Transactions and any acquisition of shares
of Common Stock pursuant hereto or thereto (including, without
limitation, pursuant to any assignment under this Agreement or
the Torchmark Agreement) as a "transaction" in which Purchaser
may become an "interested stockholder" within the meaning of
Section 203 of the Delaware General Corporation Law.
(c) No Violation. Neither the execution, delivery or
performance of this Agreement nor the consummation of the
Transactions will (i) conflict with, or result in a violation
or breach of the terms, conditions or provisions of, or
constitute a default under, the certificate of incorporation
or bylaws of the Company or its subsidiaries or any agreement
(including, without limitation, the 1984 Agreement), indenture
or other instrument under which the Company or its subsidiar-
ies is bound or to which any of the Shares are subject, or
result in the creation or imposition of any Claim against the
Shares or (ii) violate, conflict with or require any consent
under any judgment, injunction, decree, order, statute, rule
or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over the Company
or its subsidiaries or any of their respective properties,
except for filings that may be required by the HSR Act,
federal or state securities laws or state insurance laws or
regulations.
(d) Finder's Fee. The Company has not incurred any
obligation for any finder's, broker's or agent's fee in
connection with this Agreement or the Transactions.
(e) Capitalization. As of the date of this Agreement,
the capitalization of the Company is as set forth in Section
3.1(f) of this Agreement.
(f) No Misstatements or Omissions. The Company has
delivered to Purchaser the Information. The Information and
the representations and warranties of the Company set forth in
the instruments evidencing the Transactions do not contain any
untrue statement of a material fact or omit to state any
material fact required to be stated therein or herein or
necessary to make the statements therein or herein not
misleading (except as a result of the consummation of the
Transactions). Subsequent to November 15, 1993 the Company
has not filed or been required to file any other report with
the Securities and Exchange Commission, other than as set
forth in Section 3.1(g).
(g) Affiliate Transactions. Except as set forth in
Schedule I to this Agreement, there will be no agreements,
arrangements, understandings, commitments or investments in
securities in force (other than pursuant to this Agreement and
instruments evidencing the Transactions) between the Company
and its affiliates (other than the Sellers), on the one hand,
and the Sellers and their affiliates (other than the Company
and its direct and indirect subsidiaries), on the other hand,
as of the Closing Date.
(h) No CFLIC Holdings. Upon closing of all the transac-
tions contemplated by the CFLIC Agreement, CFLIC will no
longer own any shares of the Company's equity securities or
any securities exercisable for or convertible into the
Company's equity securities, including, without limitation,
the remaining 560,000 shares of the Company's Common Stock
which will not be acquired in the Transactions, the Series
1984-A Preferred Stock and the Series 1987-B Preferred Stock.
After giving effect to the foregoing transactions (including
the Transactions and the transactions under the CFLIC Agree-
ment and the Class B Agreement), Sellers and their respective
affiliates will beneficially own in the aggregate no equity
securities of the Company other than 1,000,000 shares of
Common Stock.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to Sellers and the
Company as follows:
4.1 Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of its
jurisdiction of incorporation, with all requisite corporate power
and authority to execute and deliver this Agreement and to
consummate the Transactions with respect to Purchaser.
4.2 Authorization and Validity. The execution, delivery and
performance by Purchaser of this Agreement, and the consummation of
the Transactions by Purchaser, have been duly authorized by
Purchaser, and no other corporate proceedings on the part of
Purchaser are necessary to authorize and approve this Agreement and
the Transactions by Purchaser. This Agreement has been duly
executed and delivered by Purchaser and constitutes the legal,
valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms.
4.3 No Violation. Neither the execution, delivery or
performance of this Agreement nor the consummation of the Transac-
tions by Purchaser will (i) conflict with, or result in a violation
or breach of the terms, conditions or provisions of, or constitute
a default under, the articles of incorporation or bylaws of
Purchaser or any agreement, indenture or other instrument under
which Purchaser is bound or (ii) violate, conflict with or require
any filing or consent under any judgment, injunction, decree,
order, statute, rule or regulation of any court or any public,
governmental or regulatory agency or body having jurisdiction over
Purchaser or any of its properties, except as may be required by
the HSR Act, Federal and state securities laws and except for
filings or consents that may be required or advisable under state
insurance laws and regulations.
4.4 Finder's Fee. Purchaser has not incurred any obligation
for any finder's, broker's or agent's fee in connection with this
Agreement or the Transactions.
4.5 Acquisition for Investment. Purchaser is acquiring the
Shares for investment and not with a view toward, or for sale in
connection with, any distribution thereof, nor with any present
intention of distributing or selling the Shares. Purchaser agrees
that the Shares may not be sold, transferred, offered for sale,
pledged, hypothecated or otherwise disposed of (i) without
registration under the Securities Act of 1933, as amended, except
pursuant to an exemption from such registration available under
such Act, and (ii) except in accordance with any applicable
provisions of state securities laws. Purchaser acknowledges that
the certificates representing the Shares will bear a legend
referring to these transfer restrictions.
4.6 No Arrangements with Torchmark; Share Ownership. As of
the date hereof, Purchaser is the beneficial owner of 159,800
shares of the Common Stock and 59,400 shares of Preferred Stock,
Series 1986-A. Except pursuant to this Agreement or the Transac-
tions and conversion rights of such Preferred Stock, Purchaser does
not (1) have (a) the right to acquire any voting stock of the
Company (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement
or understanding, or upon the exercise of conversion rights,
exchange rights or otherwise, or (b) the right to vote any voting
stock of the Company pursuant to any agreement, arrangement or
understanding, or (2) have any agreement, arrangement or under-
standing for the purpose of acquiring, holding, or voting of such
stock with Torchmark Corporation ("Torchmark") or any other person
that beneficially owns, or whose affiliates beneficially own,
directly or indirectly, such stock.
ARTICLE 5
CONDITIONS TO THE OBLIGATIONS OF CNC AND CFLIC
The obligations of CNC and CFLIC under this Agreement with
respect to the Closing are subject to the satisfaction or, unless
prohibited by law, the waiver by CNC and CFLIC, at or before the
Closing, of each of the following conditions:
5.1 Representations and Warranties. Each of the repre-
sentations and warranties of Purchaser contained in this Agreement
shall be true and correct in all material respects as of the date
when made and at and as of the Closing Date as though such
representations and warranties were made at and as of such date.
5.2 Performance. Purchaser shall have performed and complied
in all material respects with all agreements, obligations and
conditions required by this Agreement to be so performed or
complied with by it at or prior to the Closing.
5.3 Officer's Certificates. Purchaser shall have delivered
to Sellers a certificate, dated the Closing Date and executed by an
executive officer of Purchaser, certifying its fulfillment of the
conditions specified in Sections 5.1 and 5.2. The Company shall
have delivered to Sellers a certificate, dated the Closing Date and
executed by an executive officer of the Company, certifying as to
certain factual matters underlying the Sellers' representations
contained in Section 3.1.
5.4 No Injunction. On the Closing Date, there shall be no
effective injunction, writ, preliminary restraining order or any
order of any nature issued by a court of competent jurisdiction
restraining or prohibiting consummation of any of the
Transactions.
5.5 Opinion of Counsel. The Company, CNC and CFLIC shall
have been furnished with the opinions, dated the Closing Date, of
David A. Knight, counsel for Purchaser, with respect to the matters
set forth in Sections 4.1, 4.2 and 4.3; provided, however, that
Mr. Knight shall be entitled to rely on the opinion of Hughes &
Luce, L.L.P. with respect to the matters set forth in the second
sentence of Section 4.2.
5.6 HSR Waiting Period and Regulatory Matters. Any applica-
ble waiting period under the HSR Act shall have expired or been
early terminated and all other required regulatory approvals shall
have been obtained. Prior to 5 p.m. Dallas, Texas time on the
second full business day following termination of all waiting
periods under the HSR Act or receipt by all applicable parties of
notices of early termination of such waiting periods, in either
case both under this Agreement and under the Torchmark Agreement
(such time on such second business day being the "Regulatory
Determination Date"), neither CNC nor CFLIC shall have given
written notice (the "Section 5.6 Notice") to Purchaser that any
regulatory authority having jurisdiction over Purchaser, Sellers,
the Company, their respective subsidiaries or affiliates or
properties, or the Transactions shall have notified Sellers,
Purchaser or the Company that such regulatory authority will, or is
reasonably likely to, require Sellers, Purchaser or the Company to
make any filing or obtain any consent with respect to the Transac-
tions, other than filings under the HSR Act, federal and state
securities laws or amendments to previously filed insurance holding
company statements; provided, however, that, if within ten days
after CNC or CFLIC provides the Section 5.6 Notice, the regulatory
authority notifies CNC or CFLIC in writing satisfactory to CNC or
CFLIC that such filing shall not be required or such consent need
not be obtained, CNC or CFLIC shall notify Purchaser in writing
that CNC or CFLIC is withdrawing the Section 5.6 Notice.
5.7 Closing. Under no circumstances shall the Closing under
this Agreement be deemed to have occurred until the closings under
the Class B Agreement and the Torchmark Agreement shall simulta-
neously occur.
ARTICLE 6
CONDITIONS TO THE OBLIGATIONS OF PURCHASER
The obligations of Purchaser under this Agreement with respect
to the Closing are subject to the satisfaction by the Company and
Sellers or, unless prohibited by law, the waiver by Purchaser, at
or before the Closing, of each of the conditions set forth below:
6.1 Representations and Warranties. Each of the repre-
sentations and warranties of Sellers and the Company, contained in
this Agreement shall be true and correct in all material respects
as of the date when made and at and as of the Closing Date as
though such representations and warranties were made at and as of
such date.
6.2 Performance. The Company and Sellers shall have
performed and complied in all material respects with all agree-
ments, obligations and conditions required by this Agreement and
the other instruments evidencing the Transactions to be so
performed or complied with by them at or prior to the Closing
Date.
6.3 Certificates. Each of Sellers and the Company shall have
delivered to Purchaser a certificate, dated the Closing Date and
executed by an executive officer of such person or by such
individual, as applicable, certifying its fulfillment of the
conditions specified in Sections 6.1 and 6.2.
6.4 Litigation. No action, proceeding, suit or investi-
gation, which in the reasonable judgment of Purchaser may prove to
be material, shall have been instituted or threatened by any person
or entity (public or private) against Purchaser, Sellers and/or the
Company to restrain, enjoin or delay the consummation of the
transactions contemplated at the Closing or seeking damages or
other relief relating to this Agreement or the Transactions, and no
order or injunction shall be in effect adversely affecting the
Closing.
6.5 Opinions of Counsel. Purchaser shall have been furnished
with the opinions (in form and substance reasonably satisfactory to
Purchaser and subject to customary qualifications), dated the
Closing Date, of:
(a) Mr. Phillip E. Allen, Esq., counsel for the Sellers,
with respect to the matters set forth in Sections 3.1(a), (b),
(c), (d) and (f) and, to the best of such counsel's knowledge,
Sections 3.1(h) and (i) of this Agreement;
(b) Mr. Sheryl G. Snyder, Esq., counsel for the Company,
with respect to the matters set forth in Sections 3.2(a), (c),
and (e) and, to the best of such counsel's knowledge, Sections
3.2(g) and (h) of this Agreement;
(c) Akin, Gump, Strauss, Hauer & Feld, counsel for the
Company, with respect to the matters set forth in Section
3.2(b) (other than Section 3.2(b)(ii)) of this Agreement; and
(d) Richards, Layton & Finger, counsel for the Company,
with respect to the matters set forth in Section 3.2(b)(ii) of
this Agreement.
6.6 HSR Waiting Period. Any applicable waiting period under
the HSR Act shall have expired or been early terminated.
6.7 Material Adverse Change. There shall not have occurred
since the date of the Information any material adverse change in
the business and prospects, financial condition, assets, liabili-
ties or results of operations of the Company and its subsidiaries,
taken as a whole.
6.8 Regulatory Matters. Prior to the Regulatory Determi-
nation Date, Purchaser shall not have given written notice (the
"Section 6.8 Notice") to Sellers and the Company that any regulato-
ry authority having jurisdiction over Purchaser, Sellers, the
Company, any of their respective subsidiaries or affiliates, or the
Transactions, has notified Sellers, Purchaser, or the Company that
the regulatory authority will, or is reasonably likely to, require
Sellers, Purchaser, or the Company to make any filing or obtain any
consent with respect to the Transactions, other than filings under
the HSR Act, federal and state securities laws or amendments to
previously filed insurance holding company statements; provided,
however, if, within ten days after Purchaser provides the Section
6.8 Notice to Sellers and the Company, the regulatory authority
notifies Purchaser in writing satisfactory to Purchaser that such
filing shall not be required or such consent need not be obtained,
Purchaser shall notify Sellers and the Company in writing that
Purchaser is withdrawing the Section 6.8 Notice.
6.9 Affiliate Transactions. Except as set forth in Schedule
I, all agreements, arrangements, understandings or commitments
(other than pursuant to this Agreement and instruments evidencing
the Transactions) between the Company and its affiliates (other
than the Sellers), on the one hand, and Sellers and their affili-
ates (other than the Company and its direct and indirect subsidiar-
ies), on the other hand, shall have been canceled and terminated
prior to the Closing on terms satisfactory to Purchaser.
6.10 Independent Contractor and Services Agreements. RTS
shall have executed and delivered an Independent Contractor and
Services Agreement with the Company (the "RTS Agreement") in the
form attached hereto as Exhibit B, and the RTS Agreement shall have
been approved by the Board of Directors of the Company and shall be
the legal, valid and binding agreement of RTS enforceable against
RTS in accordance with its terms. CFR shall have executed and
delivered an Independent Contractor and Services Agreement with the
Company (the "CFR Agreement") in the form attached hereto as
Exhibit C, and the CFR Agreement shall have been approved by the
Board of Directors of the Company and shall be the legal, valid and
binding agreement of CFR, enforceable against CFR in accordance
with its terms.
6.11 Director Nominees. The Company's board of directors
shall have elected Jon E.M. Jacoby or such other qualified person
as Purchaser shall designate as a member of the board of directors,
effective upon the Closing Date.
6.12 Certain Amendments. The Company's board of directors
shall have approved an amendment to the Company's Restated
Certificate of Incorporation acceptable in form and substance to
Purchaser eliminating references to the Class B Stock, and shall
have directed that the amendment be submitted to the stockholders
of the Company at the next annual meeting of the Company's
stockholders. The Company's board of directors shall have amended
Article III, Section 1 of the Company's bylaws to eliminate the
requirement that the number of directors be an integral multiple of
four.
6.13 Closing. Under no circumstances shall the Closingunder
this Agreement be deemed to have occurred until the closings under
the Class B Agreement and the Torchmark Agreement shall simulta-
neously occur.
ARTICLE 7
REGISTRATION RIGHTS
7.1 Definitions. As used in this Article 7, the following
terms have the meanings indicated.
"Commission" means the Securities and Exchange Commission
or any other agency at the time administering the Securities Act.
"Excepted Stock" means shares of Common Stock subject to
the secondary registration rights granted in the Agreements among
the Company and one or more of the Sellers and (i) John Franco,
dated November 18, 1991, and (ii) Steven Bing, dated February 7,
1992.
"Person" will be broadly construed to include any
individual, entity, corporation, partnership, joint venture,
association, joint stock company, trust, or unincorporated
organization.
"Register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration
statement in compliance with the Securities Act of 1933, as amended
(the "Securities Act"), and the rules promulgated thereunder, and
the declaration or ordering of the effectiveness of such registra-
tion statement.
"Registrable Common Stock" means the Shares acquired
pursuant to this Agreement and any securities issued in respect of
the Shares.
"Registrant" means the Company or its successor by
merger, consolidation, share exchange, sale of all or substantially
all of its assets, or similar transaction.
7.2 Piggy-Back Rights. If the Registrant proposes to file a
registration statement under the Securities Act with respect to an
offering of Common Stock, other than a registration statement on
Form S-4, Form S-8, or Form S-3 solely in tandem with Form S-8 then
the Registrant will give written notice of such proposed filing to
Purchaser at least 10 business days before the anticipated filing
date. Such notice will offer to Purchaser the opportunity to
include in such registration statement the number of shares of
Registrable Common Stock owned by Purchaser as Purchaser may
request. Within 10 business days of receipt of such notice,
Purchaser will notify the Registrant in writing as to the number of
shares of Registrable Common Stock to be included in the registra-
tion statement. The Registrant will include the shares of
Registrable Common Stock set forth in Purchaser's notice in the
proposed registration statement and will cause the managing
underwriter or underwriters, if any, of any proposed underwritten
offering to be described in such registration statement to permit
Purchaser to include such shares of Registrable Common Stock in any
such underwritten offering on the same terms and conditions as any
other Common Stock included therein other than the Excepted Stock.
Notwithstanding the foregoing, if the managing underwriter or
underwriters of any underwritten offering advise the Registrant in
writing (and deliver a copy thereof to Purchaser) that the total
amount of Common Stock that Purchaser intends to include in such
underwritten offering would (x) make it impractical to conduct such
underwritten offering of the Common Stock being registered at the
price at which such Common Stock could be sold without such
inclusion or (y) materially interfere with the success of the
offering by the Registrant, then the Registrable Common Stock to be
offered for the account of Purchaser will, together with the Common
Stock to be offered by Persons other than the Registrant other than
the Excepted Stock, be reduced or eliminated by the managing
underwriter or underwriters, if any, such reduction to first
eliminate shares of Common Stock being registered by Sellers or
executive officers or directors of the Company, then eliminate
shares of other Persons pro rata based on the number of shares of
Common Stock or Registrable Common Stock proposed to be included in
the registration statement by such Persons (other than such Sellers
or executive officers and directors of the Registrant and other
than the Excepted Stock), including Purchaser. Notwithstanding
anything to the contrary in this Section 7.2, the Registrant may,
in its sole discretion and without the consent of Purchaser,
postpone the filing or effectiveness of such registration statement
or withdraw any such registration statement and abandon any such
proposed offering.
7.3 Demand Rights. If Purchaser delivers a written request
to the Registrant to file a registration statement under the
Securities Act with respect to all or a portion of the Registrable
Common Stock, then the Registrant will, promptly after receipt of
such notice, use its reasonable best efforts to file such registra-
tion statement with respect to such Registrable Common Stock and
cause it to be declared effective by the Commission so as to permit
or facilitate the sale or distribution of all or such portion of
the Registrable Common Stock as are specified in such request;
provided, that Registrant will have the right in its sole discre-
tion to postpone the filing of such a registration statement for a
period of up to 90 days from the date of its receipt of a request
pursuant to this Section 7.3 if, in the good faith judgment of the
members of the board of directors, the best interests of the
Registrant would be best served by such a delay. Purchaser will
have the right to have one such registration effected under this
Section 7.3. The written request received by the Registrant from
Purchaser will be deemed to include an undertaking from Purchaser
to (a) cooperate with the Registrant in connection with such
registration, (b) furnish the Registrant with all such information
in connection therewith as may be required by the Commission, and
(c) take all such action as may be reasonably requested by the
Registrant in order to permit the Registrant to comply with all
applicable requirements of the Securities Act and the Commission
and to obtain acceleration of the effective date of the registra-
tion statement.
7.4 Form S-3 Registrations. In addition to the registration
rights provided in Section 7.2 and 7.3, if at any time the Company
is eligible to use Form S-3 (or any successor form) for registra-
tion of secondary sales of Common Stock, Purchaser may request in
writing that the Company register shares of Registrable Common
Stock on such form; provided, however, that any such request for
registration shall be for a minimum of 250,000 shares of Registra-
ble Common Stock. Thereupon the Company will, as soon as practica-
ble, use its reasonable best efforts to effect the registration on
Form S-3 of all Registrable Common Stock that the Company has so
been requested to register by Purchaser for sale; provided, that
Registrant will have the right in its sole discretion to postpone
the filing of such a registration statement for a period of up to
90 days from the date of its receipt of a request pursuant to this
Section 7.4 if, in the good faith judgment of the members of the
board of directors, the best interests of the Registrant would be
best served by such a delay.
7.5 Registration Procedures. Whenever the Registrant is
required to use its reasonable best efforts to effect the registra-
tion of any Registrable Common Stock, the Registrant will as
expeditiously as possible:
(a) prepare and file with the Commission a registration
statement with respect to the Registrable Common Stock and use its
reasonable best efforts to cause such registration statement to
become and remain effective for the period set forth in Section
7.5(b) and promptly notify Purchaser: (i) when such registration
statement becomes effective; (ii) when a post-effective amendment
to such registration statement becomes effective; and (iii) of any
request by the Commission for any amendment or supplement to such
registration statement or any prospectus relating thereto or for
additional information;
(b) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus
used in connection therewith as may be necessary to keep such
registration statement effective and to comply with the provisions
of the Securities Act with respect to the sale or other disposition
of all securities covered by such registration statement for a
period of not less than 90 days after the effective date of such
registration statement to the extent necessary to permit the
completion of the sale or distribution of the Registrable Common
Stock within such period, provided, that if the Registrant takes
any action with respect to the acquisition of the stock or assets
of any business entity that would require the Registrant to amend
any prospectus included in a registration statement that becomes
effective under the provisions of Section 7.3 or 7.4 by including
financial statements that conform to the requirements of Regulation
S-X promulgated by the Commission, Purchaser will suspend the
offering or sale of the Registrable Common Stock for a period not
to exceed 45 days so that the Registrant may prepare such financial
statements (which the Registrant will prepare as promptly as
possible) and the 90-day period referred to above in this Section
7.5(b) will be extended for a period equivalent to such delay;
(c) furnish to Purchaser, prior to filing a registration
statement, copies of such registration statement as proposed to be
filed and thereafter, such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each prelimi-
nary prospectus), and such other documents as Purchaser may
reasonably request in order to facilitate the disposition of the
Registrable Common Stock being offered by Purchaser;
(d) use reasonable best efforts to register or qualify,
not later than the effective date of any filed registration
statement the Registrable Common Stock covered by such registration
statement under the securities or blue sky laws of such jurisdic-
tions as Purchaser reasonably requests; provided, that the
Registrant will not be required to (i) qualify to do business as a
foreign corporation or as a dealer in any jurisdiction where it is
not so qualified, (ii) subject itself to taxation in any such
jurisdiction, or (iii) consent to general service of process in any
such jurisdiction or take any action that would subject it to
service of process in suits other than those arising out of the
offer and sale of the Registrable Common Stock covered by the
registration statement;
(e) use its reasonable best efforts to cause the
Registrable Common Stock covered by such registration statement to
be registered with or approved by such other governmental agencies
or authorities as may be necessary by virtue of the business and
operations of Registrant to enable Purchaser to consummate the
disposition of such Registrable Common Stock;
(f) during the period when the registration statement is
required to be effective, notify Purchaser of the happening of any
event as a result of which the prospectus included in the registra-
tion statement contains an untrue statement of a material fact or
omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and
Registrant will prepare a supplement or amendment to such prospec-
tus so that, as thereafter delivered to the purchasers of such
Registrable Common Stock, such prospectus will not contain an
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the state-
ments therein not misleading;
(g) in the event that such sale is pursuant to an
underwritten offering, enter into an underwriting agreement
containing customary terms;
(h) in the event such sale is pursuant to an under-
written offering, use its reasonable best efforts to obtain a "cold
comfort letter" from the independent public accountants for the
Registrant in customary form and covering such matters of the type
customarily covered by "cold comfort letters"; and
(i) otherwise use its reasonable best efforts to comply
with all applicable rules and regulations of the Commission, and
make available to its security holders, as soon as reasonably
practicable, an earnings statement covering a period of 12 months,
beginning within three months after the effective date of the
registration statement, which earnings statement will satisfy the
provisions of Section 11(a) of the Securities Act.
7.6 Purchaser Cooperation. In connection with each registra-
tion effected pursuant to this Article 7, Purchaser agrees:
(a) to timely furnish the Registrant with such informa-
tion regarding Purchaser and the proposed sale and distribution of
the Common Stock as the Registrant may reasonably request;
(b) to execute and perform its obligations under any
underwriting agreement with customary terms and conditions
acceptable to Purchaser entered into by the Company in connection
with the registered offering; and
(c) during any period during which the Registrant is
required to prepare an amendment or supplement to any registration
statement or prospectus, to suspend offers and sales pursuant
thereto until such amendment or supplement becomes effective.
7.7 Expenses. The Registrant will bear all expenses of any
registration effected pursuant to this Article 7, except that
Purchaser will pay (a) underwriting discounts and commissions with
respect to any shares sold by Purchaser, (b) fees and expenses of
Purchaser's counsel and (c) blue sky filing and legal fees related
to states in which registration or qualification is undertaken
solely as a result of Purchaser's request.
7.8 Indemnification and Contribution.
(a) In the case of any offering registered pursuant to
this Article 7, the Registrant agrees to indemnify and hold
Purchaser, each underwriter of Registrable Common Stock under such
registration and each Person who controls any of the foregoing
within the meaning of Section 15 of the Securities Act, harmless
against any and all losses, claims, damages or liabilities to
which they or any of them may become subject under the Securities
Act or any other statute or common law or otherwise, and to
reimburse them, promptly upon request, for any legal or other
expenses reasonably incurred by them in connection with investigat-
ing any claims and defending any actions, insofar as any such
losses, claims, damages, liabilities or actions shall arise out of
or shall be based upon (i) any untrue statement or alleged untrue
statement of a material fact contained in the registration
statement relating to the sale of such Registrable Common Stock, or
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made,
not misleading or (ii) any untrue statement or alleged untrue
statement of a material fact contained in any preliminary prospec-
tus (as amended or supplemented if the Registrant shall have filed
with the Commission any amendment thereof or supplement thereto),
if used prior to the effective date of such registration statement,
or contained in the prospectus (as amended or supplemented if the
Registrant shall have filed with the Commission any amendment
thereof or supplement thereto), or the omission or alleged omission
to state therein a material fact necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the indemnifica-
tion agreement contained in this Section 7.8(a) shall not apply to
such losses, claims, damages, liabilities or actions that shall
arise from the sale of Registrable Common Stock if such losses,
claims, damages, liabilities or actions shall arise out of or shall
be based upon any such untrue statement, or any such omission or
alleged omission, if such statement or omission shall have been
made in reliance upon and in conformity with information furnished
in writing to the Registrant by Purchaser or any such underwriter
specifically for use in connection with the preparation of the
registration statement or any preliminary prospectus or prospectus
contained in the registration statement or any such amendment
thereof or supplement thereto.
(b) In the case of each offering registered pursuant to
this Article 7, Purchaser and each underwriter participating
therein shall agree in the same manner and to the same extent as
set forth in Section 7.8(a) hereof severally to indemnify and hold
harmless the Registrant, and each person, if any, who controls the
Registrant within the meaning of Section 15 of the Securities Act,
and the directors and officer of the Registrant with respect to any
statement in or omission from such registration statement or any
preliminary prospectus (as amended or as supplemented, if amended
or supplemented as aforesaid), if such statement or omission shall
have been made in reliance upon and in conformity with information
furnished in writing to the Registrant by Purchaser or such
underwriter, respectively, specifically for use in connection with
the preparation of such registration statement or any preliminary
prospectus or prospectus contained in such registration statement
or any such amendment or supplement.
(c) Each party indemnified under Section 7.8(a) or (b)
hereof shall, promptly after receipt of notice of the commencement
of any action against such indemnified party in respect of which
indemnity may be sought hereunder, notify the indemnifying party in
writing of the commencement thereof. The omission of any indemni-
fied party to so notify an indemnifying party of any such action
shall not relieve the indemnifying party from any liability in
respect of such action which it may have to such indemnified party
on account of the indemnity agreement contained in Section 7.8(a)
or (b), unless and to the extent the indemnifying party was
prejudiced by such omission, and in no event shall relieve the
indemnifying party from any other liability which it may have to
such indemnified party. In case any such action shall be brought
against any indemnified party and it shall notify an indemnifying
party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it may
desire, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, and the indemnifying party
shall not be liable to such indemnified party under Section 7.8(a)
or (b) for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof,
other than reasonable costs of investigation (unless such indemni-
fied party reasonably objects to such assumption on the grounds
that there may be defenses to it which are different from or in
addition to such indemnifying party, in which event the indemnified
party shall be reimbursed by the indemnifying party for the
expenses incurred in connection with retaining separate legal
counsel).
(d) If the indemnification provided for in this Section
7.8 is unavailable to an indemnified party in respect of any
losses, claims, damages or liabilities referred to herein, then
each indemnifying party under any paragraph of this Section 7.8, in
lieu of indemnifying such indemnified party hereunder, shall
contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages or liabilities in such
proportion as is appropriate to reflect the relative fault of such
indemnified party on the one hand and the indemnifying parties on
the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as
any other relevant equitable considerations. The relative fault of
such indemnified party and the indemnifying parties shall be deter-
mined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission to
state a material fact relates to information supplied by such
parties and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The parties agree that it would not be just and
equitable if contribution pursuant to this Section 7.8(d) were
determined by pro rata allocation or by any other method of
allocation which does not take account of the equitable consider-
ations referred to above. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and
liabilities referred to above shall be deemed to include, subject
to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating, defending or settling any such action or claim.
7.9 Certain Limitations on Registration Rights. Notwith-
standing the other provisions of Article 7, the Company shall not
be obligated to register shares of Purchaser if, in the opinion of
counsel to the Company reasonably satisfactory to Purchaser and its
counsel, the sale or other disposition of Purchaser's shares, in
the manner proposed by Purchaser, may be effected without register-
ing such shares under the Securities Act.
ARTICLE 8
MISCELLANEOUS
8.1 HSR Act; Regulatory Filings. As soon as practicable, the
parties hereto shall make any and all filings as may be required
under the HSR Act in connection with this Agreement and the
Transactions and shall request early termination of the waiting
period under the HSR Act. Each party shall furnish to all other
parties such information and assistance as any other party or
parties may reasonably request in connection with the preparation
of such filings.
8.2 Covenant to Satisfy Conditions. Each party to this
Agreement shall use its respective reasonable best efforts to
satisfy the conditions set forth herein to the Closing insofar as
such matters are within its control.
8.3 Public Announcements. The parties hereto will mutually
consent (subject to any party's obligations to make disclosures
pursuant to applicable securities laws or stock exchange rules) to
the terms of any press release or any public statements with
respect to this Agreement or the Transactions prior to issuance.
8.4 Expenses. Each of the parties hereto shall pay its own
fees and expenses (including the fees of any attorneys, accoun-
tants, investment bankers or others engaged by such party) in
connection with this Agreement and the transactions contemplated
hereby whether or not the transactions contemplated hereby are
consummated.
8.5 Headings. The section headings herein are for conve-
nience of reference only, do not constitute part of this Agreement
and shall not be deemed to limit or otherwise affect any of the
provisions hereof.
8.6 Notices. All notices or other communications required or
permitted hereunder shall be given in writing and shall be deemed
sufficient if delivered by hand or telecopied or mailed by
registered or certified mail, postage prepaid (return receipt
requested), as follows:
If to the Company:
I.C.H. Corporation
500 North Akard, Suite 1204
Dallas, Texas 75201
Telecopy No. (214) 954-7345
Attention: Robert L. Beisenherz
With a copy to:
I.C.H. Corporation
100 Mallard Creek Road, Suite 400
Louisville, Kentucky 40257
Telecopy No. (502) 894-2149
Attention: Sheryl G. Snyder
If to RTS:
Robert T. Shaw
784 Harrington Lake Drive North
Venice, Florida 34293
Telecopy No. (813) 492-9596
With a copy to:
Weil, Gotshal & Manges
901 Main Street, Suite 4100
Dallas, Texas 75202
Telecopy No. (214) 746-7777
Attention: Thomas A. Roberts
If to CFR:
C. Fred Rice
4213 Snowberry Lane
Naples, Florida 33999
Telecopy No. (813) 597-9476
With a copy to:
Weil, Gotshal & Manges
901 Main Street, Suite 4100
Dallas, Texas 75202
Telecopy No. (214) 746-7777
Attention: Thomas A. Roberts
If to CNC:
Consolidated National Corporation
4211 Norbourne Boulevard
Louisville, Kentucky 40207
Telecopy No. (502) 897-6470
Attention: President and General Counsel
If to CFLIC:
Consolidated Fidelity Life Insurance Company
4211 Norbourne Boulevard
Louisville, Kentucky 40207
Telecopy No. (502) 897-6470
Attention: President and General Counsel
If to Purchaser:
Stephens Inc.
111 Center Street
Little Rock, Arkansas 72201
Telecopy No. (501) 377-2677
Attention: David A. Knight
or such other address as shall be furnished in writing by such
party, and any such notice or communication shall be effective and
be deemed to have been given as of the date so delivered or
telecopied or three days after the date so mailed; provided,
however, that any notice or communication changing any of the
addresses set forth above shall be effective and deemed given only
upon its receipt.
8.7 Assignment. This Agreement and all of the provisions
hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted
assigns; provided, however, that neither this Agreement nor any of
the rights, interests, or obligations hereunder may be assigned by
any of the parties hereto without the prior written consent of the
other parties except that Purchaser may assign its rights and
delegate its duties hereunder without further recourse or liability
to Purchaser to a credit worthy person or entity reasonably
acceptable to the Company which will execute a written instrument
assuming such duties.
8.8 Entire Agreement. This Agreement and those instruments
evidencing the Transactions embody the entire agreement and
understanding of the parties with respect to this Agreement and the
Transactions and supersede all prior written or oral and contempo-
raneous oral commitments, arrangements or understandings with
respect thereto. There are no restrictions, agreements, promises,
warranties, covenants or undertakings with respect to this
Agreement or the Transactions other than those expressly set forth
in this Agreement.
8.9 Modifications, Amendments and Waivers. At any time prior
to the Closing, to the extent permitted by law, (i) the parties
hereto may, by written agreement executed by all parties, modify,
amend or supplement any term or provision of this Agreement and
(ii) any term or provision of this Agreement may be waived in
writing by the party or parties entitled to the benefits thereof.
8.10 Counterparts. This Agreement may be executed in two or
more counterparts, all of which together shall be considered one
and the same agreement and each of which shall be deemed an
original.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY THE
LAWS OF THE STATE OF TEXAS (REGARDLESS OF THE LAWS THAT MIGHT BY
APPLICABLE UNDER PRINCIPLES OF CONFLICTS OF LAW) AS TO ALL MATTERS,
INCLUDING BUT NOT LIMITED TO MATTERS OF VALIDITY, CONSTRUCTION,
EFFECT AND PERFORMANCE.
8.12 Severability. If any one or more of the provisions of
this Agreement shall be held to be invalid, illegal or unenforce-
able, the validity, legality or enforceability of the remaining
provisions of this Agreement shall not be affected thereby. To the
extent permitted by applicable law, each party waives any provision
of law which renders any provision of this Agreement invalid,
illegal or unenforceable in any respect. The Class B Stock will be
automatically canceled when it is transferred as contemplated
pursuant to the Transactions. Therefore, notwithstanding any other
provision of this Agreement, Sellers, the Company and Purchaser
agree that any and all provisions which may require the Class B
Stock to be transferred are not severable from any other provision
of this Agreement.
8.13 Specific Performance. The parties hereto recognize that
any breach of the terms of this Agreement may give rise to
irreparable harm for which money damages would not be an adequate
remedy, and accordingly agree that, in addition to other remedies,
any non-breaching party shall be entitled to enforce the terms of
this Agreement by a decree of specific performance without the
necessity of proving the inadequacy as a remedy of money damages.
The Class B Stock will be automatically canceled when it is
transferred as contemplated pursuant to the Transactions.
Therefore, notwithstanding any other provision of this Agreement,
Sellers, the Company and Purchaser agree that no party shall be
entitled to specific performance of any provision of this Agreement
unless the Closing and the closings of both the Class B Agreement
and the Torchmark Agreement shall have simultaneously occurred.
8.14 Certain Amendments and Actions. The Company agrees to
use its reasonable best efforts (including recommending approval to
its stockholders) to cause to be filed as soon as possible an
amendment to its certificate of incorporation acceptable in form
and substance to Purchaser eliminating references to the Class B
Stock. Prior to the Closing Date, the Company will cause Article
III, Section 1 of its bylaws to be amended to eliminate the
requirement that the number of directors be an integral multiple of
four. The Sellers and the Company covenant and agree that the
closing of the transactions contemplated by the CFLIC Agreement
shall occur on or before May 30, 1994, and the transactions
contemplated thereby shall be consummated on substantially the same
economic terms as set forth in the CFLIC Agreement. The Company
agrees and covenants that it will not reduce the number of shares
of voting securities outstanding prior to the Closing Date.
Pursuant to the CFLIC Agreement, all shares of the Company's equity
securities and any securities exercisable for or convertible into
the Company's equity securities that are owned by CFLIC (other than
440,000 shares of the Company's Common Stock to be purchased
pursuant to the Transactions), including, without limitation, the
remaining 560,000 shares of the Company's Common Stock which are
not being acquired in the Transactions, the Series 1984-A Preferred
Stock and the Series 1987-B Preferred Stock shall be transferred
by CFLIC either as part of the termination of certain reinsurance
agreements or as consideration for the mandatory redemption of
shares of CFLIC preferred stock held by the Company.
8.15 Nominations. The Company covenants and agrees that so
long as Purchaser owns at least five percent of the issued and
outstanding shares of Common Stock of the Company or any successor
corporations (subject to appropriate adjustment for stock splits,
stock dividends or similar events), it will cause one person
designated by Purchaser to be nominated for election as a director
of the Company and will use its best efforts to secure election of
such person as a director.
8.16 Survival of Representations. The representations and
warranties set forth in this Agreement shall survive any Closing
and shall not be affected by any investigation by any party to
which such representation or warranty is made.
8.17 Termination. This Agreement may be terminated at any
time prior to the Closing Date (a) by mutual consent of Purchaser,
the Company and Sellers, (b) by Purchaser, if the conditions set
forth in Article 6 have not been complied with or performed in any
respect and such noncompliance or nonperformance has not been cured
or eliminated (or by its nature cannot be cured or eliminated) by
Sellers and the Company on or before March 15, 1994; or (c) by
Sellers or the Company, if the conditions set forth in Article 5
have not been complied with or performed in any respect and such
noncompliance or nonperformance has not been cured or eliminated
(or by its nature cannot be cured or eliminated) by Purchaser on or
before March 15, 1994. In the event of the termination of this
Agreement pursuant to Section 8.17, this Agreement will thereafter
become void and have no effect, and no party will have any
liability to any other parties or their stockholders or directors
or officers in respect thereof, except insofar as such liability
may be attributable to willful breach of this Agreement. Sections
8.3 through 8.14 and 8.16 will survive the termination of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
CONSOLIDATED NATIONAL CORPORATION
/s/ Robert T. Shaw
By:_____________________________________
Name: Robert T. Shaw
Title: President and Treasurer
CONSOLIDATED FIDELITY LIFE INSURANCE
COMPANY
/s/ Gerald J. Kohout
By:_____________________________________
Name: Gerald J. Kohout
Title: President
I.C.H. CORPORATION
/s/ Robert L. Beisenherz
By:_____________________________________
Name: Robert L. Beisenherz
Title: President and Chief Executive
Officer
/s/ Robert T. Shaw
________________________________________
ROBERT T. SHAW
/s/ C. Fred Rice
________________________________________
C. FRED RICE
STEPHENS INC.
/s/ David A. Knight
By:_____________________________________
Name: David A Knight
Title: Senior Vice President
<PAGE>
EXHIBIT A TO EXHIBIT NO. 2
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT ("Agreement"), made and entered into
as of January __, 1994, among Consolidated National Corporation,a
Kentucky corporation ("CNC"), and I.C.H. Corporation, a Delaware
corporation ("Purchaser").
RECITALS
A. CNC owns 100,000 shares of Class B Common Stock, par
value $1.00 per share (the "Class B Stock"), of the Purchaser.
B. CNC desires to sell to Purchaser, and Purchaser desires
to purchase from CNC, the Class B Stock.
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements herein
contained, and on the terms and subject to the conditions herein
set forth, the parties hereto hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF STOCK
1.1 Purchase and Sale of Stock. Upon the terms and subject
to the conditions set forth in this Agreement, CNC hereby agrees to
sell to Purchaser, simultaneous with the closings of those certain
Stock Purchase Agreements among CNC, Purchaser, Consolidated
Fidelity Life Insurance Company, Robert T. Shaw, C. Fred Rice and,
respectively, Torchmark Corporation and Stephens, Inc. (collective-
ly the "Torchmark and Stephens Agreements"), the Class B Stock,
free and clear of all liens, security interests, pledges, charges,
claims, options, encumbrances of every kind, escrows, rights of
first refusal, mortgages, indentures, security agreements or other
agreements, arrangements, contracts, commitments, understandings
and obligations, whether written or oral and whether or not
relating in any way to credit or the borrowing of money (collec-
tively, "Claims"), and Purchaser agrees to purchase the Class B
Stock at the price of $5.00 per share for a total purchase price of
$500,000.
ARTICLE 2
CLOSING
2.1 Date and Place of Closing. Subject to satisfaction of
the conditions to the closing of this Agreement (the "Closing") set
forth in Articles 5 and 6, the Closing for the purchase and sale of
the Class B Stock shall be consummated at the offices of the
Purchaser at 500 North Akard, Suite 1204, Dallas, Texas 75201 (the
"Purchaser Offices"), simultaneously with the closings of both the
Torchmark and Stephens Agreements.
2.2 Deliveries at the Closing. At the Closing,
(a) CNC shall deliver to Purchaser
(i) certificates evidencing the Class B
Stock, duly endorsed in blank or accompanied by
stock powers duly executed in blank, and otherwise
in proper form to transfer all right, title and
interest of CNC in the Class B Stock to Purchaser;
(ii) the legal opinion of counsel for CNC
specified in Section 6.5 hereof; and
(iii) all certificates and other instruments
and documents required to be delivered by CNC to
Purchaser at or prior to the Closing in connection
with this Agreement.
(b) Purchaser shall deliver to CNC
(i) $500,000 in immediately available funds
by federal wire transfer to CNC at ____________
(the "CNC Account");
(ii) the legal opinion of counsel for Purchas-
er specified in Section 5.5 hereof; and
(iii) all certificates and other instruments
and documents required to be delivered by Purchaser
to CNC at or prior to the Closing in connection
with this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF CNC
CNC hereby represents and warrants to Purchaser as follows:
3.1 Organization. CNC is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Kentucky, with all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transac-
tions contemplated hereby.
3.2 Title to Class B Stock. CNC is the lawful owner of, with
good and marketable title to, the Class B Stock. Subject to the
terms of that certain agreement between the Purchaser and Shaw
dated October 8, 1984, CNC owns the Class B Stock free and clear of
all Claims and, will transfer to Purchaser good and marketable
title to the Class B Stock at the Closing free and clear of all
Claims.
3.3 Authorization and Validity. The execution, delivery and
performance by CNC of this Agreement, and the consummation of the
transactions contemplated hereby, have been duly authorized by CNC,
and no other corporate proceedings on the part of CNC, and no other
actions by Shaw or Rice, are necessary to authorize and approve
this Agreement and the transactions contemplated hereby. This
Agreement has been duly executed and delivered by CNC and consti-
tutes the legal, valid and binding obligation of CNC, enforceable
against CNC in accordance with its terms, except as may be limited
by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable
remedies.
3.4 No Violation. Neither the execution, delivery or
performance of this Agreement nor the consummation of the transac-
tions contemplated hereby will (i) conflict with, or result in a
violation or breach of the terms, conditions or provisions of, or
constitute a default under, the articles of incorporation or bylaws
of CNC or any agreement, indenture or other instrument under which
CNC is bound or to which any of the Class B Stock are subject, or
result in the creation or imposition of any security interest,
lien, charge or encumbrance upon any of the Class B Stock or
(ii) violate, conflict with or require any consent under any
judgment, injunction, decree, order, statute, rule or regulation of
any court or any public, governmental or regulatory agency or body
having jurisdiction over CNC or any of its properties except as may
be required by the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act") or such filings as may be required
by applicable federal or state securities laws or state insurance
laws or regulations as a result of the transactions contemplated
hereby.
3.5 Upon completion of the Closing, CNC shall cease to have
Beneficial Ownership of the Class B Stock within the meaning of
Article Four, section A2 of the Restated Certificate of Incorpora-
tion of the Purchaser.
3.6 Finder's Fee. CNC has not incurred any obligation for
any finder's, broker's or agent's fee in connection with the
transactions contemplated hereby.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to CNC as follows:
4.1 Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware, with all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transac-
tions contemplated hereby.
4.2 Authorization and Validity. The execution, delivery and
performance by Purchaser of this Agreement, and the consummation of
the transactions contemplated hereby, have been duly authorized by
Purchaser, and no other corporate proceedings on the part of
Purchaser are necessary to authorize and approve this Agreement and
the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Purchaser and constitutes the legal,
valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable
remedies.
4.3 No Violation. Neither the execution, delivery or
performance of this Agreement nor the consummation of the transac-
tions contemplated hereby will (i) conflict with, or result in a
violation or breach of the terms, conditions or provisions of, or
constitute a default under, the articles of incorporation or bylaws
of Purchaser or any agreement, indenture or other instrument under
which Purchaser is bound or (ii) violate, conflict with or require
any consent under any judgment, injunction, decree, order, statute,
rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over Purchaser or any
of its properties except as may be required by the HSR Act or such
filings as may be required by applicable federal or state securi-
ties laws and state insurance laws or regulations as a result of
the transactions contemplated hereby.
4.4 Finder's Fee. Purchaser has not incurred any obligation
for any finder's, broker's or agent's fee in connection with the
transactions contemplated hereby.
4.5 Acquisition for Investment. Purchaser is acquiring the
Class B Stock not with a view toward, or for sale in connection
with, any distribution thereof, nor with any present intention of
distributing or selling the Class B Stock. Purchaser acknowledges
that the Class B Stock converts into Common Stock upon its transfer
to Purchaser, and Purchaser agrees that said Common Stock may not
be sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of (i) without registration under the Securities
Act of 1933, as amended, except pursuant to an exemption from such
registration available under such Act, and (ii) except in accor-
dance with any applicable provisions of state securities laws.
Purchaser acknowledges that the certificates representing the Class
B Stock shall be canceled immediately after the Closing.
ARTICLE 5
CONDITIONS TO THE OBLIGATIONS OF CNC
The obligations of CNC under this Agreement are subject to the
satisfaction or, unless prohibited by law, the waiver by CNC, at or
before the Closing, of each of the following conditions:
5.1 Representations and Warranties. Each of the representa-
tions and warranties of Purchaser contained in this Agreement shall
be true and correct in all material respects as of the date when
made and at and as of the Closing Date as though such representa-
tions and warranties were made at and as of such date.
5.2 Performance. Purchaser shall have performed and complied
in all material respects with all agreements, obligations and
conditions required by this Agreement to be so performed or
complied with by it at or prior to the Closing.
5.3 Officer's Certificates. Purchaser shall have delivered
to CNC a certificate, dated the Closing Date and executed by the
President or Vice President of Purchaser, as applicable, certifying
its fulfillment of the conditions specified in Sections 5.1 and 5.2
hereof.
5.4 No Injunction. On the Closing Date, there shall be no
effective injunction, writ, preliminary restraining order or any
order of any nature issued by a court of competent jurisdiction
restraining or prohibiting consummation of any of the transactions
contemplated hereby.
5.5 Closing. All conditions to closing the Torchmark and
Stephens Agreements shall have been satisfied or waived.
5.6 Opinions of Counsel. CNC shall have been furnished with
the opinion, dated the Closing Date, of Mr. Sheryl G. Snyder,
counsel for Purchaser, with respect to the matters set forth in
Sections 4.1, 4.2 and 4.3 hereof.
ARTICLE 6
CONDITIONS TO THE OBLIGATIONS OF PURCHASER
The obligations of Purchaser under this Agreement are subject
to the satisfaction or, unless prohibited by law, the waiver by
Purchaser, at or before the Closing, of each of the conditions set
forth below:
6.1 Representations and Warranties. Each of the representa-
tions and warranties of CNC, contained in this Agreement shall be
true and correct in all material respects as of the date when made
and at and as of the Closing Date as though such representations
and warranties were made at and as of such date.
6.2 Services Agreement. Shaw shall have executed the
Independent Contractor and Services Agreement attached hereto, Rice
shall have executed both the Employment Agreement and Independent
Contractor and Services Agreement attached hereto, and that certain
Management and Consulting Agreement dated December 27, 1984 among
CNC (formerly Consolidated National Successor Corporation) and
Purchaser shall have been terminated.
6.3 Performance. CNC shall have performed and complied in
all material respects with all agreements, obligations and
conditions required by this Agreement to be so performed or
complied with by it at or prior to the Closing.
6.4 Officer's Certificates. CNC shall have delivered to
Purchaser a certificate, dated the Closing Date and executed by the
President or Vice President of CNC certifying its fulfillment of
the conditions specified in Sections 6.1 and 6.2 hereof.
6.5 No Injunction. On the Closing Date, there shall be no
effective injunction, writ, preliminary restraining order or any
order of any nature issued by a court of competent jurisdiction
restraining or prohibiting consummation of any of the transactions
contemplated hereby.
6.6 Opinions of Counsel. Purchaser shall have been furnished
with the opinions, dated the Closing Date, of Mr. Phillip E. Allen,
counsel for CNC, with respect to the matters set forth in Sections
3.1, 3.2, 3.3, 3.4 and 3.5 hereof, and Weil, Gotshal and Manges as
to the matters set forth in Section 3.5 hereof.
ARTICLE 7
MISCELLANEOUS
7.1 Covenant to Satisfy Conditions. Each party to this
Agreement shall use its respective best efforts to satisfy the
conditions set forth herein to the Closing insofar as such matters
are within their respective control.
7.2 Public Announcements. The parties hereto will consult
with each other party before issuing any press release or otherwise
making any public statements with respect to this Agreement or the
transactions contemplated hereby.
7.3 Expenses. Each of the parties hereto shall pay its own
fees and expenses (including the fees of any attorneys, accoun-
tants, investment bankers or others engaged by such party) in
connection with this Agreement and the transactions contemplated
hereby whether or not the transactions contemplated hereby are
consummated.
7.4 Headings. The section headings herein are for conve-
nience of reference only, do not constitute part of this Agreement
and shall not be deemed to limit or otherwise affect any of the
provisions hereof.
7.5 Notices. All notices or other communications required or
permitted hereunder shall be given in writing and shall be deemed
sufficient if delivered by hand or mailed by registered or
certified mail, postage prepaid (return receipt requested), as
follows:
If to CNC:
Consolidated National Corporation
4211 Norbourne Blvd.
Louisville, Kentucky 40207
Attention: Robert T. Shaw
With a copy to:
Weil, Gotshal & Manges
901 Main Street
Suite 4100
Dallas, Texas 75202
If to Purchaser:
I.C.H. Corporation
500 North Akard
Suite 1204
Dallas, Texas 75201
Attention: R. L. Beisenherz
With a copy to:
I.C.H. Corporation
100 Mallard Creek Road
Louisville, Kentucky 40257
Attention: General Counsel
or such other address as shall be furnished in writing by such
party, and any such notice or communication shall be effective and
be deemed to have been given as of the date so delivered or three
days after the date so mailed; provided, however, that any notice
or communication changing any of the addresses set forth above
shall be effective and deemed given only upon its receipt.
7.6 Assignment and Termination. This Agreement and all of
the provisions hereof shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
permitted assigns; provided, however, that neither this Agreement
nor any of the rights, interests, or obligations hereunder may be
assigned by any of the parties hereto without the prior written
consent of the other parties. In the event Purchaser acknowledges
in writing to CNC that the Torchmark and Stephens Agreements have
been validly terminated, either party may terminate this Agreement
by written notice to the other party to this Agreement.
7.7 Entire Agreement. This Agreement (including the Exhibits
hereto) embodies the entire agreement and understanding of the
parties with respect to the transactions contemplated hereby and
supersedes all prior written or oral commitments, arrangements or
understandings with respect thereto. There are no restrictions,
agreements, promises, warranties, covenants or undertakings with
respect to the transactions contemplated hereby other than those
expressly set forth herein.
7.8 Modifications, Amendments and Waivers. At any time prior
to the Closing, to the extent permitted by law, (i) the parties
hereto may, by written agreement executed by all parties, modify,
amend or supplement any term or provision of this Agreement and
(ii) any term or provision of this Agreement may be waived in
writing by the party or parties entitled to the benefits thereof.
7.9 Counterparts. This Agreement may be executed in two or
more counterparts, all of which together shall be considered one
and the same agreement and each of which shall be deemed an
original.
7.10 Governing Law. This Agreement shall be governed by the
laws of the State of Delaware (regardless of the laws that might be
applicable under principles of conflicts of law) as to all matters,
including but not limited to matters of validity, construction,
effect and performance.
7.11 Severability. If any one or more of the provisions of
this Agreement shall be held to be invalid, illegal or unenforce-
able, the validity, legality or enforceability of the remaining
provisions of this Agreement shall not be affected thereby. To the
extent permitted by applicable law, each party waives any provision
of law which renders any provision of this Agreement invalid,
illegal or unenforceable in any respect.
7.12 Specific Performance. The parties hereto recognize that
any breach of the terms of this Agreement may give rise to
irreparable harm for which money damages would not be an adequate
remedy, and accordingly agree that, in addition to other remedies,
any non-breaching party shall be entitled to enforce the terms of
this Agreement by a decree of specific performance without the
necessity of proving the inadequacy as a remedy of money damages.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
CONSOLIDATED NATIONAL CORPORATION
By:________________________________
Name: Robert T. Shaw
Title: Chairman of the Board
I.C.H. CORPORATION
By:________________________________
Name: Robert L. Beisenherz
Title: Chairman of the Board
<PAGE>
EXHIBIT B TO EXHIBIT NO. 2
INDEPENDENT CONTRACTOR AND SERVICES AGREEMENT
This Independent Contractor and Services Agreement (this
"Agreement") is made and entered into as of January ___, 1994, by
and between I.C.H. Corporation, a Delaware corporation (the
"Company"), and Robert T. Shaw ("Shaw").
IN CONSIDERATION of the premises and mutual covenants
contained herein, and for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Company
and Shaw hereby agree as follows:
1. Retention. The Company hereby agrees to retain Shaw to
perform, and Shaw hereby agrees to perform, the services described
in Section 6 hereof.
2. Compensation. In consideration of past services rendered
by Shaw to the Company prior to the date hereof, the Company is
paying to Shaw, concurrently with the execution and delivery of
this Agreement, $1,222,000 cash. In consideration of the services
to be performed by Shaw hereunder, the Company agrees to pay to
Shaw an annual fee, payable in cash as follows: $800,000 for each
of the first through fifth years of this Agreement; $575,000 for
the sixth year of this Agreement; and $75,000 for each of the
seventh through tenth years of this Agreement (with such fee for
the first year being due upon the execution and delivery of this
Agreement and such fee for each ensuing year being due on the first
business day of each such year). Unless required by law or
regulation, the Company shall not withhold any amounts, for taxes
or otherwise, from any payments made to Shaw pursuant to this
Section 2.
3. Reimbursement of Expenses. The Company shall reimburse
Shaw promptly for all reasonable out-of-pocket expenses incurred by
Shaw in connection with (i) any business opportunities identified
by Shaw and pursued by the Company, and (ii) any services provided
at the Company's request, it being understood that any such
expenses shall be reimbursed in accordance with the Company's
expense reimbursement policies for senior executives, as such
policies may be amended from time to time.
4. Benefits. During the term of this Agreement, the Company
shall provide to Shaw those employee benefits available from time
to time to the Company's senior executive officers (including life
and health insurance), other than awards made pursuant to stock
option, bonus or other compensation plans; provided that the
Company shall not be obligated to afford Shaw coverage under any
benefit plan if such coverage would be in violation of the terms of
the plan or applicable law. Shaw's present spouse and present
dependents shall also be afforded such benefits during the term of
this Agreement; provided that (i) such coverage is not in violation
of the terms of the subject benefit plan or applicable law and (ii)
one or more of the cash payments provided for in Section 2 are
reduced, or the Company receives cash payments from Shaw, in such
amounts as are mutually agreed to by Shaw and the Chief Executive
Officer of the Company as the value of such coverage. The Company
agrees that Shaw is immediately and fully vested under all existing
employee benefit plans which are applicable to Shaw. In addition,
with respect to vesting requirements under any future employee
benefit plans applicable to Shaw hereunder, Shaw will receive
service credit for all years during which Shaw has been an
executive officer or director of the Company and all years during
which Shaw has performed services under this Agreement. Following
termination of this Agreement, (i) Shaw shall be entitled to all
retirement benefits afforded retired senior executive officers of
the Company, (ii) Shaw and his present wife and present dependents
shall be permitted, for as long as they live, to continue the full
amount of any Company health insurance coverage in effect at the
time this Agreement is terminated, and (iii) Shaw shall be
permitted to continue his term life insurance coverage in the face
amount of not less than one million dollars. Notwithstanding the
foregoing, the Company shall not be obligated to provide Shaw with
the health and life insurance coverage described in the preceding
sentence unless (i) such coverage can be obtained by the Company
through reasonable efforts and (ii) Shaw reimburses the Company, as
billed, for all costs and expenses incurred by it in providing such
coverage.
5. Support Services. During the term of this Agreement, the
Company will provide Shaw office space and secretarial support on
terms to be mutually agreed upon by Shaw and the Chief Executive
Officer of the Company, it being understood that all costs and
expenses incurred by the Company in providing office space (other
than the office space presently provided to Shaw by the Company for
as long as the Company shall maintain offices in that location) and
secretarial services shall be deducted from the payments to Shaw
provided in Section 2.
6. Services to Be Performed. During the term of this
Agreement, Shaw will attempt to identify business opportunities in
the insurance industry which, in the judgment of Shaw, may be
suitable for the Company and will notify the Company of any
opportunities so identified. If the Company does not elect to
pursue an opportunity so identified by Shaw within 30 days of such
notice, then Shaw shall be free to capitalize on such opportunity
as he may elect in his sole discretion. Without limiting the
foregoing, Shaw may capitalize on any such opportunity which the
Company does not elect to pursue by developing such opportunity (by
himself or with others), through investment or otherwise, and/or by
transferring such opportunity to others (with or without consider-
ation paid to Shaw in connection with such transfer). Shaw also
will make himself available during the term of this Agreement to
consult with the Company regarding such other matters as the
Company may reasonably request. On each anniversary date of this
Agreement, the Company will review Shaw's performance of services
hereunder during the immediately preceding year and may issue to
Shaw, in respect of such services, such number of warrants to
acquire common stock of the Company as the Company may determine in
its sole discretion. The terms and conditions of any such warrants
shall be determined by the Company in its sole discretion.
7. Limitation on Employment. During the term of the
Agreement, absent the consent of the Company (which will not be
unreasonably withheld), Shaw may not serve as an officer, director,
or employee of any insurance company (other than Consolidated
Fidelity Life Insurance Company and/or its affiliates).
8. Nature of Relationship. It is agreed and understood that
Shaw is associated with the Company only for the purposes and to
the extent set forth herein and that Shaw's relationship to the
Company shall, during the period or periods of Shaw's association
and his performance of services hereunder, be that of an indepen-
dent contractor. Although there shall be no minimum number of
hours required to be spent by Shaw in the performance of such
services, Shaw will make himself available at reasonable times to
perform the services hereunder and to consult with the Company
regarding such matters as the Company may reasonably request. The
parties acknowledge that Shaw shall be free to pursue his other
business and personal interests to the extent such interests do not
involve activities prohibited by Section 7 hereof. The Company
acknowledges that the pursuit or development by Shaw of opportuni-
ties identified by Shaw to the Company but which the Company does
not elect to pursue may present a conflict with the interests of
the Company. Nevertheless, Shaw shall be permitted to pursue and
develop such opportunities as if no such conflict existed.
9. Term and Termination. This Agreement shall terminate on
the date that is ten (10) years following the date hereof (the
"Scheduled Termination Date"). The Company shall not be permitted
to terminate this Agreement prior to the Scheduled Termination Date
for any reason. In the event that, notwithstanding the foregoing,
this Agreement is terminated by operation of law prior to the
Scheduled Termination Date, other than as the result of the death
of Shaw (whether as a result of disability, incapacity, insolvency,
bankruptcy, or otherwise), the Company shall, to the extent
permitted by law, continue to pay to Shaw the compensation and
benefits provided by this Agreement as if this Agreement had not
been so terminated. In the event of the death of Shaw, this
Agreement shall terminate automatically, and the Company shall pay
to the estate of Shaw a lump sum cash payment equal to the present
value of the remaining aggregate annual compensation which would
have been payable to Shaw for all remaining years under this
Agreement had this Agreement not been so terminated. The "present
value" of such compensation shall be determined by discounting the
remaining scheduled payments in accordance with generally accepted
financial practice at an annual discount rate of eight percent
(8%). Upon the making of such lump sum payment, all further
liability of the Company under this Agreement shall cease. In
addition, the provisions of the last two sentences of Section 4 and
Sections 10 through 20 of this Agreement shall survive, for an
indefinite period, any termination of this Agreement.
10. Indemnification. The Company shall indemnify Shaw
against any and all claims, losses, damages, liabilities, expenses
(including legal fees and expenses), obligations, demands,
proceedings, rights, causes of action, actions, and suits of any
nature whatsoever (collectively, "Claims") which may hereafter be
imposed on, incurred by, or entered or asserted against Shaw by
reason of this Agreement or the services performed or to be
performed hereunder, other than claims resulting from acts
involving negligence, willful malfeasance, bad faith or reckless
disregard of his duties by Shaw.
11. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas
applicable to contracts made and to be performed in such state.
12. Binding Agreement; Assignment. This Agreement and all
provisions contained herein shall be binding upon and inure to the
benefit of the parties hereto and their respective representatives,
successors and assigns, provided, however that neither party may
assign its rights or obligations hereunder without the prior
written consent of the other party hereto.
13. Captions. The captions, headings and arrangements used
in this Agreement are for convenience only and do not in any way
affect, limit, amplify, or modify the terms and provisions
hereof.
14. Notices. Any notice required by this Agreement, shall be
considered given upon receipt if a written copy is sent by United
States certified mail, return receipt requested, and addressed as
follows:
If to the Company:
I.C.H. Corporation
Lincoln Plaza
500 N. Akard, Suite 1204
Dallas, Texas 75221
Attn: Robert L. Beisenherz
With a copy to:
I.C.H. Corporation
100 Mallard Creek Road
Louisville, Kentucky 40205
Attn: General Counsel
If to Shaw:
Robert T. Shaw
784 Harrington Lake Drive North
Venice, Florida 34293
With a copy to:
Weil, Gotshal & Manges
100 Crescent Court, Suite 1300
Dallas, Texas 75201-6950
Attn: Thomas A. Roberts
A party may change its or his address by giving written notice
to the other party hereto, which notice shall be effective upon
actual receipt.
15. Invalid Provisions. If any provision of this Agreement
is held to be illegal, invalid, or unenforceable under present or
future laws effective during the term of this Agreement, such
provision shall be fully severable; this Agreement shall be
construed and enforced as if such illegal, invalid, or unenforce-
able provision had never comprised a part of this Agreement; and
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 from this Agreement.
Furthermore, in lieu of each such illegal, invalid, or unenforce-
able provision there shall be added automatically as part of this
Agreement, a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and be
legal, valid, and enforceable.
16. Amendments. This Agreement may be amended at any time
and from time to time in whole or in part by an instrument in
writing setting forth the particulars of such amendment duly
executed by both the Company and Shaw.
17. Entire Agreement. This Agreement constitutes the entire
understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements or
understandings if any, relating to the subject matter hereof.
18. Number and Gender. Whenever herein the singular number
is used, the same shall include the plural where appropriate, and
the words of any gender shall include each other gender where
appropriate.
19. Waiver. The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach by any party.
20. Counterparts. This Agreement may be executed in two or
more identical counterparts, each of which for all purposes shall
be deemed an original, and all of which shall constitute, collec-
tively, one agreement; but in making proof of this Agreement, it
shall not be necessary to produce or account for more than one such
counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date first
above written.
I.C.H. CORPORATION
BY:________________________________
TITLE:_____________________________
SHAW
___________________________________
ROBERT T. SHAW
<PAGE>
EXHIBIT C TO EXHIBIT NO. 2
INDEPENDENT CONTRACTOR AND SERVICES AGREEMENT
This Independent Contractor and Services Agreement (this
"Agreement") is made and entered into as of January ___, 1994, by
and between I.C.H. Corporation, a Delaware corporation (the
"Company"), and C. Fred Rice ("Rice").
IN CONSIDERATION of the premises and mutual covenants
contained herein, and for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Company
and Rice hereby agree as follows:
1. Retention. The Company hereby agrees to retain Rice to
perform, and Rice hereby agrees to perform, the services described
in Section 6 hereof.
2. Compensation. In consideration of past services rendered
by Rice to the Company prior to the date hereof, the Company is
paying to Rice, concurrently with the execution and delivery of
this Agreement, $778,000 cash. In consideration of the services to
be performed by Rice hereunder, the Company agrees to pay to Rice
an annual fee, payable in cash as follows: $600,000 for each of
the first through fifth years of this Agreement; $500,000 for the
sixth year of this Agreement; and $50,000 for each of the seventh
through tenth years of this Agreement (with such fee for the first
year being due upon the execution and delivery of this Agreement
and such fee for each ensuing year being due on the first business
day of each such year). Unless required by law or regulation, the
Company shall not withhold any amounts, for taxes or otherwise,
from any payments made to Rice pursuant to this Section 2.
3. Reimbursement of Expenses. The Company shall reimburse
Rice promptly for all reasonable out-of-pocket expenses incurred by
Rice in connection with (i) any business opportunities identified
by Rice and pursued by the Company, and (ii) any services provided
at the Company's request, it being understood that any such
expenses shall be reimbursed in accordance with the Company's
expense reimbursement policies for senior executives, as such
policies may be amended from time to time.
4. Benefits. During the term of this Agreement, the Company
shall provide to Rice those employee benefits available from time
to time to the Company's senior executive officers (including life
and health insurance), other than awards made pursuant to stock
option, bonus or other compensation plans; provided that the
Company shall not be obligated to afford Rice coverage under any
benefit plan if such coverage would be in violation of the terms of
the plan or applicable law. Rice's present spouse and present
dependents shall also be afforded such benefits during the term of
this Agreement; provided that (i) such coverage is not in violation
of the terms of the subject benefit plan or applicable law and (ii)
one or more of the cash payments provided for in Section 2 are
reduced, or the Company receives cash payments from Rice, in such
amounts as are mutually agreed to by Rice and the Chief Executive
Officer of the Company as the value of such coverage. The Company
agrees that Rice is immediately and fully vested under all existing
employee benefit plans which are applicable to Rice. In addition,
with respect to vesting requirements under any future employee
benefit plans applicable to Rice hereunder, Rice will receive
service credit for all years during which Rice has been an
executive officer or director of the Company and all years during
which Rice has performed services under this Agreement. Following
termination of this Agreement, (i) Rice shall be entitled to all
retirement benefits afforded retired senior executive officers of
the Company, (ii) Rice and his present wife and present dependents
shall be permitted, for as long as they live, to continue the full
amount of any Company health insurance coverage in effect at the
time this Agreement is terminated, and (iii) Rice shall be
permitted to continue his term life insurance coverage in the face
amount of not less than one million dollars. Notwithstanding the
foregoing, the Company shall not be obligated to provide Rice with
the health and life insurance coverage described in the preceding
sentence unless (i) such coverage can be obtained by the Company
through reasonable efforts and (ii) Rice reimburses the Company, as
billed, for all costs and expenses incurred by it in providing such
coverage.
5. Support Services. During the term of this Agreement, the
Company will provide Rice office space and secretarial support on
terms to be mutually agreed upon by Rice and the Chief Executive
Officer of the Company, it being understood that all costs and
expenses incurred by the Company in providing office space (other
than the office space presently provided to Rice by the Company for
as long as the Company shall maintain offices in that location) and
secretarial services shall be deducted from the payments to Rice
provided in Section 2.
6. Services to Be Performed. During the term of this
Agreement, Rice will attempt to identify business opportunities in
the insurance industry which, in the judgment of Rice, may be
suitable for the Company and will notify the Company of any
opportunities so identified. If the Company does not elect to
pursue an opportunity so identified by Rice within 30 days of such
notice, then Rice shall be free to capitalize on such opportunity
as he may elect in his sole discretion. Without limiting the
foregoing, Rice may capitalize on any such opportunity which the
Company does not elect to pursue by developing such opportunity (by
himself or with others), through investment or otherwise, and/or by
transferring such opportunity to others (with or without consider-
ation paid to Rice in connection with such transfer). Rice also
will make himself available during the term of this Agreement to
consult with the Company regarding such other matters as the
Company may reasonably request. On each anniversary date of this
Agreement, the Company will review Rice's performance of services
hereunder during the immediately preceding year and may issue to
Rice, in respect of such services, such number of warrants to
acquire common stock of the Company as the Company may determine in
its sole discretion. The terms and conditions of any such warrants
shall be determined by the Company in its sole discretion.
7. Limitation on Employment. During the term of the
Agreement, absent the consent of the Company (which will not be
unreasonably withheld), Rice may not serve as an officer, director,
or employee of any insurance company other than the Company and its
affiliates, Consolidated Fidelity Life Insurance Company and/or its
affiliates, and Financial Benefit Group, Inc.
8. Nature of Relationship. It is agreed and understood that
Rice is presently Senior Executive Vice President and a Director of
the Company and otherwise associated with the Company only for the
purposes and to the extent set forth herein and that Rice's
relationship to the Company shall, during the period or periods of
Rice's association and his performance of services hereunder, be
that of an independent contractor. Although there shall be no
minimum number of hours required to be spent by Rice in the
performance of such services, Rice will make himself available at
reasonable times to perform the services hereunder and to consult
with the Company regarding such matters as the Company may
reasonably request. The parties acknowledge that Rice shall be
free to pursue his other business and personal interests to the
extent such interests do not involve activities prohibited by
Section 7 heretofore the Delaware General Corporate Law. The
Company acknowledges that the pursuit or development by Rice of
opportunities identified by Rice to the Company but which the
Company does not elect to pursue may present a conflict with the
interests of the Company. Nevertheless, Rice shall be permitted to
pursue and develop such opportunities as if no such conflict
existed provided that such activities are not prohibited by the
Delaware Corporate Law.
9. Term and Termination. This Agreement shall terminate on
the date that is ten (10) years following the date hereof (the
"Scheduled Termination Date"). The Company shall not be permitted
to terminate this Agreement prior to the Scheduled Termination Date
for any reason. In the event that, notwithstanding the foregoing,
this Agreement is terminated by operation of law prior to the
Scheduled Termination Date, other than as the result of the death
of Rice (whether as a result of disability, incapacity, insolvency,
bankruptcy, or otherwise), the Company shall, to the extent
permitted by law, continue to pay to Rice the compensation and
benefits provided by this Agreement as if this Agreement had not
been so terminated. In the event of the death of Rice, this
Agreement shall terminate automatically, and the Company shall pay
to the estate of Rice a lump sum cash payment equal to the present
value of the remaining aggregate annual compensation which would
have been payable to Rice for all remaining years under this
Agreement had this Agreement not been so terminated. The "present
value" of such compensation shall be determined by discounting the
remaining scheduled payments in accordance with generally accepted
financial practice at an annual discount rate of eight percent
(8%). Upon the making of such lump sum payment, all further
liability of the Company under this Agreement shall cease. In
addition, the provisions of the last two sentences of Section 4,
and Sections 10 through 20 of this Agreement shall survive, for an
indefinite period, any termination of this Agreement.
10. Indemnification. The Company shall indemnify Rice
against any and all claims, losses, damages, liabilities, expenses
(including legal fees and expenses), obligations, demands,
proceedings, rights, causes of action, actions, and suits of any
nature whatsoever (collectively, "Claims") which may hereafter be
imposed on, incurred by, or entered or asserted against Rice by
reason of this Agreement or the services performed or to be
performed hereunder, other than claims resulting from acts
involving negligence, willful malfeasance, bad faith or reckless
disregard of his duties by Rice.
11. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas
applicable to contracts made and to be performed in such state.
12. Binding Agreement; Assignment. This Agreement and all
provisions contained herein shall be binding upon and inure to the
benefit of the parties hereto and their respective representatives,
successors and assigns, provided, however that neither party may
assign its rights or obligations hereunder without the prior
written consent of the other party hereto.
13. Captions. The captions, headings and arrangements used
in this Agreement are for convenience only and do not in any way
affect, limit, amplify, or modify the terms and provisions
hereof.
14. Notices. Any notice required by this Agreement, shall be
considered given upon receipt if a written copy is sent by United
States certified mail, return receipt requested, and addressed as
follows:
If to the Company: I.C.H. Corporation
Lincoln Plaza
500 N. Akard, Suite 1204
Dallas, Texas 75221
Attn: Robert L. Beisenherz
With a copy to: I.C.H. Corporation
100 Mallard Creek Road
Louisville, Kentucky 40205
Attn: General Counsel
If to Rice: C. Fred Rice
4213 Snowberry Lane
Naples, Florida 33999
With a copy to: Weil, Gotshal & Manges
100 Crescent Court, Suite 1300
Dallas, Texas 75201-6950
Attn: Thomas A. Roberts
A party may change its or his address by giving written notice
to the other party hereto, which notice shall be effective upon
actual receipt.
15. Invalid Provisions. If any provision of this Agreement
is held to be illegal, invalid, or unenforceable under present or
future laws effective during the term of this Agreement, such
provision shall be fully severable; this Agreement shall be
construed and enforced as if such illegal, invalid, or unenforce-
able provision had never comprised a part of this Agreement; and
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 from this Agreement.
Furthermore, in lieu of each such illegal, invalid, or unenforce-
able provision there shall be added automatically as part of this
Agreement, a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and be
legal, valid, and enforceable.
16. Amendments. This Agreement may be amended at any time
and from time to time in whole or in part by an instrument in
writing setting forth the particulars of such amendment duly
executed by both the Company and Rice.
17. Entire Agreement. This Agreement constitutes the entire
understanding between the parties hereto with respect to the
subject matter hereof and supersedes all prior agreements or
understandings if any, relating to the subject matter hereof.
18. Number and Gender. Whenever herein the singular number
is used, the same shall include the plural where appropriate, and
the words of any gender shall include each other gender where
appropriate.
19. Waiver. The waiver by any party hereto of a breach of
any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach by any party.
20. Counterparts. This Agreement may be executed in two or
more identical counterparts, each of which for all purposes shall
be deemed an original, and all of which shall constitute, collec-
tively, one agreement; but in making proof of this Agreement, it
shall not be necessary to produce or account for more than one such
counterpart.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the date first
above written.
I.C.H. CORPORATION
BY:________________________________
TITLE:_____________________________
RICE
___________________________________
C. FRED RICE
<PAGE>
SCHEDULE I TO EXHIBIT NO. 2
SCHEDULE I
Agreements, other than those contemplated in connection with
the Transactions, that will continue beyond the Closing:
Agreements relating to relationships
between ICH and CNC/CFLIC that are dealt with in the
June 15, 1993 Agreement between CNC and CFLIC
1. Agreement, dated June 15, 1993, among ICH, Consolidated
National Corporation and Consolidated Fidelity Life Insurance
Company, and all amendments thereto.
2. Stock Purchase Agreement dated June 29, 1990, among Consoli-
dated National Corporation, Robert T. Shaw and Bankers Life
and Casualty Company with respect to all outstanding capital
stock of Marquette National Life Insurance Company, including
Exhibit 1.35 thereto governing the coinsurance relationship
between Southwestern Life Insurance Company and Marquette
National Life Insurance Company (filed as Exhibits 2.1 and 2.3
to ICH's Report on Form 10-Q for the quarter ended June 30,
1990).
3. Coinsurance Annuity Reinsurance Agreement -- October 1, 1990,
for Bankers Life and Casualty Company (filed as Exhibit 19-1
to ICH's Current Report on Form 8-K dated November 9, 1990)
and amendments thereto (filed as Exhibit 2.11 to ICH's Annual
Report on Form 10-K for year ended December 31, 1991, and
Exhibit 2.11 to ICH's Annual Report on Form 10-K for the year
ended December 31, 1992).
4. Coinsurance Annuity Retrocession Agreement (Bankers Business)
-- October 1, 1990 for Marquette National Life Insurance
Company (filed as Exhibit 19-2 to ICH's Current Report on Form
8-K dated November 9, 1990), and amendments and supplemental
agreements thereto (filed as Exhibit 2.12 to ICH's Annual
Report on Form 10-K for year ended December 31, 1991, and
Exhibits 2.12 and 10.31 to ICH's Annual Report on Form 10-K
for the year ended December 31, 1992).
5. Coinsurance Annuity and Supplemental Contract Reinsurance
Agreement II -- June 30, 1990, for Southwestern Life Insurance
Company (filed as Exhibit 19-3 to ICH's Current Report on Form
8-K dated November 9, 1990), and amendments thereto (filed as
Exhibit 2.13 to ICH's Annual Report on Form 10-K for year
ended December 31, 1991, and Exhibit 2.13 to ICH's Annual
Report on Form 10-K for the year ended December 31, 1992).
6. Coinsurance Annuity and Supplementary Contract Retrocession
Agreement II -- June 30, 1990, for Marquette National Life
Insurance Company (filed as Exhibit 19-4 to ICH's Current
Report on Form 8-K dated November 9, 1990), and amendments
thereto (filed as Exhibit 2.14 to ICH's Annual Report on Form
10-K for year ended December 31, 1991, and Exhibit 2.14 to
ICH's Annual Report on Form 10-K for the year ended Decem-
ber 31, 1992).
7. Letter Agreement, dated March 8, 1993, relating to the
Coinsurance Annuity Reinsurance Agreement referenced in
Paragraph 2 above (filed as Exhibit 2.15 to ICH's Annual
Report on Form 10-K for year ended December 31, 1992).
8. Agreement, dated March 10, 1993, relating to the Coinsurance
Annuity and Supplemental Contract Reinsurance Agreement II
referenced in Paragraph 4 above (filed as Exhibit 2.16 to
ICH's Annual Report on Form 10-K for year ended December 31,
1992).
9. Credit Agreement dated as of September 28, 1990, between ICH
and Consolidated Fidelity Life Insurance Company, as assignee
of the banks party thereto and The Chase Manhattan Bank
(National Association), as Agent for such banks, as amended
(filed as Exhibit 4-1 of ICH's Current Report on Form 8-K
dated November 9, 1990; Exhibit 4.3 to ICH's Annual Report on
Form 10-K for the year ended December 31, 1990; Exhibit 4.3 to
ICH's Annual Report on Form 10-K for year ended December 31,
1991; Exhibit 4.8 to ICH's Report on Form 10-Q for quarter
ended June 30, 1992; and Exhibit 4.9 to ICH's Report on Form
10-Q for quarter ended September 30, 1992).
10. Service and employee reimbursement arrangements under which an
ICH subsidiary provides administrative services to Consolidat-
ed Fidelity Life Insurance Company and/or its subsidiary.
11. The Assignment and Grant of Option executed by Consolidated
Fidelity Life Insurance Company and ICH effective as of
May 21, 1992 (filed as Exhibit 38-1 to Amendment No. 38 to
Schedule 13D filed by Consolidated National Corporation
relating to the Common Stock of ICH).
12. Subordination Agreement dated November 4, 1986, between ICH
and Consolidated National Successor Corporation (filed as
Exhibit 10.33 to ICH's Registration Statement on Form S-3, No.
33-9455).
Agreements relating to the Class B Stock
13. Agreement dated October 8, 1984 between ICH and Robert T. Shaw
(filed as Exhibit I to Amendment No. 25-1 to the Schedule 13D
filed by Consolidated National Successor Corporation and
certain affiliates relating to shares of the Common Stock of
ICH).
Agreements relating to
Fail - CFSB Corporation
14. Intercreditor Agreement between Southwestern Life Insurance
Company and Consolidated Fidelity Life Insurance Company,
dated January 25, 1993 (filed as Exhibit 10.25 to ICH's Annual
Report on Form 10-K for year ended December 31, 1992).
15. Letter Agreement between ICH and Consolidated National
Corporation, dated March 29, 1993 concerning the James
Fail/CFSB Corporation Profit Participation Interest (filed as
Exhibit 10.31 to ICH's Annual Report on Form 10-K for the year
ended December 31, 1992).
Miscellaneous Agreements
16. Letter Agreement between Steven B. Bing, Consolidated National
Corporation and ICH (filed as Exhibit 10.24 to ICH's Annual
Report on Form 10-K for year ended December 31, 1991).
17. Form of Indemnification Agreement with officers and directors
of ICH (including Robert T. Shaw and C. Fred Rice) (filed as
Exhibit 10.22 of ICH's Annual Report on Form 10-K for the year
ended December 31, 1989).
<PAGE>
EXHIBIT NO. 3
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT ("Agreement"), made and entered into
as of January 15, 1994, among Consolidated National Corporation, a
Kentucky corporation ("CNC"), and I.C.H. Corporation, a Delaware
corporation ("Purchaser").
RECITALS
A. CNC owns 100,000 shares of Class B Common Stock, par
value $1.00 per share (the "Class B Stock"), of the Purchaser.
B. CNC desires to sell to Purchaser, and Purchaser desires
to purchase from CNC, the Class B Stock.
NOW, THEREFORE, in consideration of the premises and the
mutual representations, warranties, covenants and agreements herein
contained, and on the terms and subject to the conditions herein
set forth, the parties hereto hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF STOCK
1.1 Purchase and Sale of Stock. Upon the terms and subject
to the conditions set forth in this Agreement, CNC hereby agrees to
sell to Purchaser, simultaneous with the closings of those certain
Stock Purchase Agreements among CNC, Purchaser, Consolidated
Fidelity Life Insurance Company, Robert T. Shaw, C. Fred Rice and,
respectively, Torchmark Corporation and Stephens, Inc. (collective-
ly the "Torchmark and Stephens Agreements"), the Class B Stock,
free and clear of all liens, security interests, pledges, charges,
claims, options, encumbrances of every kind, escrows, rights of
first refusal, mortgages, indentures, security agreements or other
agreements, arrangements, contracts, commitments, understandings
and obligations, whether written or oral and whether or not relat-
ing in any way to credit or the borrowing of money (collectively,
"Claims"), and Purchaser agrees to purchase the Class B Stock at
the price of $5.00 per share for a total purchase price of $500,000.
ARTICLE 2
CLOSING
2.1 Date and Place of Closing. Subject to satisfaction of
the conditions to the closing of this Agreement (the "Closing") set
forth in Articles 5 and 6, the Closing for the purchase and sale of
the Class B Stock shall be consummated at the offices of the
Purchaser at 500 North Akard, Suite 1204, Dallas, Texas 75201 (the
"Purchaser Offices"), simultaneously with the closings of both the
Torchmark and Stephens Agreements.
2.2 Deliveries at the Closing. At the Closing,
(a) CNC shall deliver to Purchaser
(i) certificates evidencing the Class B
Stock, duly endorsed in blank or accompanied by
stock powers duly executed in blank, and otherwise
in proper form to transfer all right, title and
interest of CNC in the Class B Stock to Purchaser;
(ii) the legal opinion of counsel for CNC
specified in Section 6.5 hereof; and
(iii) all certificates and other instruments
and documents required to be delivered by CNC to
Purchaser at or prior to the Closing in connection
with this Agreement.
(b) Purchaser shall deliver to CNC
(i) $500,000 in immediately available funds
by federal wire transfer to CNC at ____________
(the "CNC Account");
(ii) the legal opinion of counsel for Purchas-
er specified in Section 5.5 hereof; and
(iii) all certificates and other instruments
and documents required to be delivered by Purchaser
to CNC at or prior to the Closing in connection
with this Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF CNC
CNC hereby represents and warrants to Purchaser as follows:
3.1 Organization. CNC is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Kentucky, with all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transac-
tions contemplated hereby.
3.2 Title to Class B Stock. CNC is the lawful owner of, with
good and marketable title to, the Class B Stock. Subject to the
terms of that certain agreement between the Purchaser and Shaw
dated October 8, 1984, CNC owns the Class B Stock free and clear of
all Claims and, will transfer to Purchaser good and marketable
title to the Class B Stock at the Closing free and clear of all
Claims.
3.3 Authorization and Validity. The execution, delivery and
performance by CNC of this Agreement, and the consummation of the
transactions contemplated hereby, have been duly authorized by CNC,
and no other corporate proceedings on the part of CNC, and no other
actions by Shaw or Rice, are necessary to authorize and approve
this Agreement and the transactions contemplated hereby. This
Agreement has been duly executed and delivered by CNC and consti-
tutes the legal, valid and binding obligation of CNC, enforceable
against CNC in accordance with its terms, except as may be limited
by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable
remedies.
3.4 No Violation. Neither the execution, delivery or
performance of this Agreement nor the consummation of the transac-
tions contemplated hereby will (i) conflict with, or result in a
violation or breach of the terms, conditions or provisions of, or
constitute a default under, the articles of incorporation or bylaws
of CNC or any agreement, indenture or other instrument under which
CNC is bound or to which any of the Class B Stock are subject, or
result in the creation or imposition of any security interest,
lien, charge or encumbrance upon any of the Class B Stock or
(ii) violate, conflict with or require any consent under any
judgment, injunction, decree, order, statute, rule or regulation of
any court or any public, governmental or regulatory agency or body
having jurisdiction over CNC or any of its properties except as may
be required by the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act") or such filings as may be required
by applicable federal or state securities laws or state insurance
laws or regulations as a result of the transactions contemplated
hereby.
3.5 Upon completion of the Closing, CNC shall cease to have
Beneficial Ownership of the Class B Stock within the meaning of
Article Four, section A2 of the Restated Certificate of Incorpora-
tion of the Purchaser.
3.6 Finder's Fee. CNC has not incurred any obligation for
any finder's, broker's or agent's fee in connection with the
transactions contemplated hereby.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents and warrants to CNC as follows:
4.1 Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of the State
of Delaware, with all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transac-
tions contemplated hereby.
4.2 Authorization and Validity. The execution, delivery and
performance by Purchaser of this Agreement, and the consummation of
the transactions contemplated hereby, have been duly authorized by
Purchaser, and no other corporate proceedings on the part of
Purchaser are necessary to authorize and approve this Agreement and
the transactions contemplated hereby. This Agreement has been duly
executed and delivered by Purchaser and constitutes the legal,
valid and binding obligation of Purchaser, enforceable against
Purchaser in accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable
remedies.
4.3 No Violation. Neither the execution, delivery or
performance of this Agreement nor the consummation of the transac-
tions contemplated hereby will (i) conflict with, or result in a
violation or breach of the terms, conditions or provisions of, or
constitute a default under, the articles of incorporation or bylaws
of Purchaser or any agreement, indenture or other instrument under
which Purchaser is bound or (ii) violate, conflict with or require
any consent under any judgment, injunction, decree, order, statute,
rule or regulation of any court or any public, governmental or
regulatory agency or body having jurisdiction over Purchaser or any
of its properties except as may be required by the HSR Act or such
filings as may be required by applicable federal or state securi-
ties laws and state insurance laws or regulations as a result of
the transactions contemplated hereby.
4.4 Finder's Fee. Purchaser has not incurred any obligation
for any finder's, broker's or agent's fee in connection with the
transactions contemplated hereby.
4.5 Acquisition for Investment. Purchaser is acquiring the
Class B Stock not with a view toward, or for sale in connection
with, any distribution thereof, nor with any present intention of
distributing or selling the Class B Stock. Purchaser acknowledges
that the Class B Stock converts into Common Stock upon its transfer
to Purchaser, and Purchaser agrees that said Common Stock may not
be sold, transferred, offered for sale, pledged, hypothecated or
otherwise disposed of (i) without registration under the Securities
Act of 1933, as amended, except pursuant to an exemption from such
registration available under such Act, and (ii) except in accor-
dance with any applicable provisions of state securities laws.
Purchaser acknowledges that the certificates representing the Class
B Stock shall be canceled immediately after the Closing.
ARTICLE 5
CONDITIONS TO THE OBLIGATIONS OF CNC
The obligations of CNC under this Agreement are subject to the
satisfaction or, unless prohibited by law, the waiver by CNC, at or
before the Closing, of each of the following conditions:
5.1 Representations and Warranties. Each of the repre-
sentations and warranties of Purchaser contained in this Agreement
shall be true and correct in all material respects as of the date
when made and at and as of the Closing Date as though such
representations and warranties were made at and as of such date.
5.2 Performance. Purchaser shall have performed and complied
in all material respects with all agreements, obligations and
conditions required by this Agreement to be so performed or
complied with by it at or prior to the Closing.
5.3 Officer's Certificates. Purchaser shall have delivered
to CNC a certificate, dated the Closing Date and executed by the
President or Vice President of Purchaser, as applicable, certifying
its fulfillment of the conditions specified in Sections 5.1 and 5.2
hereof.
5.4 No Injunction. On the Closing Date, there shall be no
effective injunction, writ, preliminary restraining order or any
order of any nature issued by a court of competent jurisdiction
restraining or prohibiting consummation of any of the transactions
contemplated hereby.
5.5 Closing. All conditions to closing the Torchmark and
Stephens Agreements shall have been satisfied or waived.
5.6 Opinions of Counsel. CNC shall have been furnished with
the opinion, dated the Closing Date, of Mr. Sheryl G. Snyder,
counsel for Purchaser, with respect to the matters set forth in
Sections 4.1, 4.2 and 4.3 hereof.
ARTICLE 6
CONDITIONS TO THE OBLIGATIONS OF PURCHASER
The obligations of Purchaser under this Agreement are subject
to the satisfaction or, unless prohibited by law, the waiver by
Purchaser, at or before the Closing, of each of the conditions set
forth below:
6.1 Representations and Warranties. Each of the repre-
sentations and warranties of CNC, contained in this Agreement shall
be true and correct in all material respects as of the date when
made and at and as of the Closing Date as though such representa-
tions and warranties were made at and as of such date.
6.2 Services Agreement. Shaw shall have executed the
Independent Contractor and Services Agreement attached hereto, Rice
shall have executed both the Employment Agreement and Independent
Contractor and Services Agreement attached hereto, and that certain
Management and Consulting Agreement dated December 27, 1984 among
CNC (formerly Consolidated National Successor Corporation) and
Purchaser shall have been terminated.
6.3 Performance. CNC shall have performed and complied in
all material respects with all agreements, obligations and
conditions required by this Agreement to be so performed or
complied with by it at or prior to the Closing.
6.4 Officer's Certificates. CNC shall have delivered to
Purchaser a certificate, dated the Closing Date and executed by the
President or Vice President of CNC certifying its fulfillment of
the conditions specified in Sections 6.1 and 6.2 hereof.
6.5 No Injunction. On the Closing Date, there shall be no
effective injunction, writ, preliminary restraining order or any
order of any nature issued by a court of competent jurisdiction
restraining or prohibiting consummation of any of the transactions
contemplated hereby.
6.6 Opinions of Counsel. Purchaser shall have been furnished
with the opinions, dated the Closing Date, of Mr. Phillip E. Allen,
counsel for CNC, with respect to the matters set forth in Sections
3.1, 3.2, 3.3, 3.4 and 3.5 hereof, and Weil, Gotshal and Manges as
to the matters set forth in Section 3.5 hereof.
ARTICLE 7
MISCELLANEOUS
7.1 Covenant to Satisfy Conditions. Each party to this
Agreement shall use its respective best efforts to satisfy the
conditions set forth herein to the Closing insofar as such matters
are within their respective control.
7.2 Public Announcements. The parties hereto will consult
with each other party before issuing any press release or otherwise
making any public statements with respect to this Agreement or the
transactions contemplated hereby.
7.3 Expenses. Each of the parties hereto shall pay its own
fees and expenses (including the fees of any attorneys, accoun-
tants, investment bankers or others engaged by such party) in
connection with this Agreement and the transactions contemplated
hereby whether or not the transactions contemplated hereby are
consummated.
7.4 Headings. The section headings herein are for conve-
nience of reference only, do not constitute part of this Agreement
and shall not be deemed to limit or otherwise affect any of the
provisions hereof.
7.5 Notices. All notices or other communications required or
permitted hereunder shall be given in writing and shall be deemed
sufficient if delivered by hand or mailed by registered or
certified mail, postage prepaid (return receipt requested), as
follows:
If to CNC:
Consolidated National Corporation
4211 Norbourne Blvd.
Louisville, Kentucky 40207
Attention: Robert T. Shaw
With a copy to:
Weil, Gotshal & Manges
901 Main Street
Suite 4100
Dallas, Texas 75202
If to Purchaser:
I.C.H. Corporation
500 North Akard
Suite 1204
Dallas, Texas 75201
Attention: R. L. Beisenherz
With a copy to:
I.C.H. Corporation
100 Mallard Creek Road
Louisville, Kentucky 40257
Attention: General Counsel
or such other address as shall be furnished in writing by such
party, and any such notice or communication shall be effective and
be deemed to have been given as of the date so delivered or three
days after the date so mailed; provided, however, that any notice
or communication changing any of the addresses set forth above
shall be effective and deemed given only upon its receipt.
7.6 Assignment and Termination. This Agreement and all of
the provisions hereof shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and
permitted assigns; provided, however, that neither this Agreement
nor any of the rights, interests, or obligations hereunder may be
assigned by any of the parties hereto without the prior written
consent of the other parties. In the event Purchaser acknowledges
in writing to CNC that the Torchmark and Stephens Agreements have
been validly terminated, either party may terminate this Agreement
by written notice to the other party to this Agreement.
7.7 Entire Agreement. This Agreement (including the Exhibits
hereto) embodies the entire agreement and understanding of the
parties with respect to the transactions contemplated hereby and
supersedes all prior written or oral commitments, arrangements or
understandings with respect thereto. There are no restrictions,
agreements, promises, warranties, covenants or undertakings with
respect to the transactions contemplated hereby other than those
expressly set forth herein.
7.8 Modifications, Amendments and Waivers. At any time prior
to the Closing, to the extent permitted by law, (i) the parties
hereto may, by written agreement executed by all parties, modify,
amend or supplement any term or provision of this Agreement and
(ii) any term or provision of this Agreement may be waived in
writing by the party or parties entitled to the benefits thereof.
7.9 Counterparts. This Agreement may be executed in two or
more counterparts, all of which together shall be considered one
and the same agreement and each of which shall be deemed an original.
7.10 Governing Law. This Agreement shall be governed by the
laws of the State of Delaware (regardless of the laws that might be
applicable under principles of conflicts of law) as to all matters,
including but not limited to matters of validity, construction,
effect and performance.
7.11 Severability. If any one or more of the provisions of
this Agreement shall be held to be invalid, illegal or unenforce-
able, the validity, legality or enforceability of the remaining
provisions of this Agreement shall not be affected thereby. To the
extent permitted by applicable law, each party waives any provision
of law which renders any provision of this Agreement invalid,
illegal or unenforceable in any respect.
7.12 Specific Performance. The parties hereto recognize that
any breach of the terms of this Agreement may give rise to
irreparable harm for which money damages would not be an adequate
remedy, and accordingly agree that, in addition to other remedies,
any non-breaching party shall be entitled to enforce the terms of
this Agreement by a decree of specific performance without the
necessity of proving the inadequacy as a remedy of money damages.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above
written.
CONSOLIDATED NATIONAL CORPORATION
/s/ Robert T. Shaw
By:_____________________________________
Name: Robert T. Shaw
Title: Chairman of the Board
I.C.H. CORPORATION
/s/ Robert L. Beisenherz
By:_____________________________________
Name: Robert L. Beisenherz
Title: Chairman of the Board
<PAGE>
EXHIBIT 4
January 15, 1994
Mr. Robert T. Shaw
784 Harrington Lake Drive North
Venice, Florida 34293
Dear Bob:
As a part of a series of transactions contemplated and
approved by the Board of Directors on January 8, 1994, I.C.H. makes
the following commitment.
During the period commencing on the date of this agreement and
ending on the later of (i) the date that is three months following
the closing of the Stock Purchase Agreement among I.C.H. Corpora-
tion (the "Company"), Consolidated National Corporation, Robert T.
Shaw ("Shaw"), C. Fred Rice and Torchmark Corporation (the
"Agreement") or (ii) the date of the consummation of all of the
transactions provided in the Agreement dated June 15, 1993 among
Consolidated National Corporation, Consolidated Fidelity Life
Insurance Company, and the Company, Shaw will have the option
(which option shall be assignable by Shaw to any of his affiliates)
to purchase from the Company either or both of the aircraft
currently owned by the Company (any aircraft so purchased being
referred to herein as a "Purchased Aircraft"), at a purchase price
equal to the depreciated book value of the Purchased Aircraft (the
"First Option"). If Shaw does not exercise the First Option to
purchase either aircraft, then, during the First Option period, he
can provide written notice to the Company identifying one, but not
both, such aircraft in which he might be interested. In that case,
for a period of three months following the expiration of the First
Option, Shaw will continue to have the option to purchase the
aircraft so identified in the notice.
Very truly yours,
I.C.H. CORPORATION
/s/ Robert L. Beisenherz
By:_____________________________
Robert L. Beisenherz
<PAGE>
Mr. Robert T. Shaw
January __, 1994
Page 2.
AGREED TO BY:
/s/ Robert T. Shaw
______________________________
Robert T. Shaw
<PAGE>
EXHIBIT 5
January 15, 1994
Mr. Robert T. Shaw
784 Harrington Lake Drive North
Venice, Florida 34293
Dear Bob:
In connection with the Closings of the transactions contem-
plated by the Stock Purchase Agreements we entered into today with
Torchmark Corporation and Stephens, Inc. (collectively, the
"Torchmark and Stephens Agreements"), and our execution of an
Independent Contractor and Services Agreement (the "Service
Agreement") concurrently with the Closings of the Torchmark and
Stephens Agreements, I.C.H. Corporation (the "Company") makes the
following commitment.
During the term of the Service Agreement: (i) for so long as
the Company or any of its affiliates continue to own Integrity
National Life Insurance Company, a principal office of Integrity
National will continue to be located in Louisville, Kentucky; (ii)
for so long as the Company or any of its affiliates continue to own
Bankers Multiple Line Insurance Company and operate its real estate
errors and omissions business, a principal office of the real
estate errors and omissions business will continue to be located in
Louisville, Kentucky; and (iii) for so long as the Company or any
of its affiliates operates Kentucky Kare, a principal office of
Kentucky Kare will continue to be located in Louisville, Kentucky.
Very Truly Yours,
I.C.H. CORPORATION
/s/ Robert L. Beisenherz
By:_____________________________________
Robert L. Beisenherz
Chairman and Chief Executive Officer
RLB/dc
<PAGE>
EXHIBIT 6
ICH CORPORATION
500 NORTH AKARD
SUITE 1201
DALLAS, TEXAS 75201
January 10, 1994
Consolidated National Corporation
4211 Norbourne Boulevard
Louisville, Kentucky 40207
Gentlemen:
Reference is made to the Management and Consulting Agreement
(the "Consulting Agreement") dated December 27, 1984 by and among
I.C.H. Corporation (hereinafter "ICH") and Consolidated National
Corporation (formerly Consolidated National Successor Corporation)
("CNC"), the Agreement (the "CFLIC Agreement") dated June 15, 1993
among Consolidated National Corporation, Consolidated Fidelity Life
Insurance Company ("CFLIC") and ICH, and to Section 8.14 of each of
the Stock Purchase Agreements (hereinafter "the Torchmark and
Stephens Agreements") among ICH, CNC, CFLIC and, respectively,
Torchmark Corporation and Stephens, Inc. dated January 14, 1994, in
which I.C.H. contracted to consummate the transactions contemplated
by the CFLIC Agreement, on substantially the same economic terms as
set forth in the CFLIC Agreement, no later than May 30, 1994.
For good and valuable consideration, the receipt and suffi-
ciency of which are hereby acknowledged, CNC and ICH hereby agree
to terminate the Consulting Agreement concurrently with the Closing
of both the Torchmark and Stephens Agreements. CNC and ICH further
agree that anytime after March 31, 1994, CNC may deliver written
notice to ICH that ICH shall deliver to CNC the Excepted Assets
within 60 days after receipt of said written notice by ICH, whether
the reinsurance transactions have been completed or not; and, after
expiration of said 60 days, ICH shall deliver the Excepted Assets
to CNC; provided that, upon delivery of the Excepted Assets, CNC,
Shaw, Rice and Carlisle shall deliver to ICH all of the outstanding
capital stock of CFLIC.
Earnings on Excepted Assets (as defined in the CFLIC Agree-
ment) in CFLIC for the period 6/30/93 through 12/31/93 are
$874,687. ICH agrees to pay that amount to CNC at the closing of
this agreement, and, for purposes of the CFLIC Agreement, that
payment shall be deemed to have been paid by CFLIC to CNC, and the
Excepted Assets shall be reduced by the amount of said payment.
ICH will calculate the earnings on Excepted Assets and pay to CNC
that amount within 30 days after the end of each calendar quarter
until the CFLIC transaction is completed by redemption of the CFLIC
preferred stock held by ICH.
<PAGE>
Consolidated National Corporation
January 10, 1994
Page 2.
It is agreed that: (i) this amendment to the CFLIC Agreement
is subject to approval by the ICH Board of Directors and regulatory
approvals, if any, and (ii) except as expressly provided herein,
all terms and conditions of the CFLIC Agreement continue in full
force and effect.
If the foregoing is acceptable to you, please execute in the
space provided below and return an originally executed copy of this
letter to the undersigned.
Very truly yours,
ICH Corporation
/s/ Robert L. Beisenherz
By:____________________________
Robert L. Beisenherz
Chairman, Chief Executive
Officer and President
<PAGE>
Consolidated National Corporation
January 10, 1994
Page 3.
Agreed and accepted
this ____ day of January, 1994
Consolidated National Corporation
(formerly Consolidated National Successor Corporation)
/s/ Robert T. Shaw
By: _______________________________
Robert T. Shaw
President
Consolidated Fidelity Life Insurance Company
/s/ Jerry Rice
By: _______________________________
Jerry Rice
/s/ Robert T. Shaw
___________________________________
Robert T. Shaw
/s/ C. Fred Rice
___________________________________
C. Fred Rice
/s/ Edward J. Carlisle
___________________________________
Edward J. Carlisle
