<PAGE>1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
WALSHIRE ASSURANCE COMPANY
(Name of Issuer)
Common Stock, $.01 par value
(Title of Class of Securities)
933132102
(CUSIP Number)
Orin S. Kramer
Kramer Spellman, L.P.
2050 Center Avenue, Suite 300
Fort Lee, New Jersey
07024
(201) 592-1234
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
September 15, 1995
(Date of Event which Requires Filing this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
Check the following box if a fee is being paid with this statement [ ].
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SCHEDULE 13D
CUSIP No. 933132102
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Kramer Spellman L.P.
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
Not Applicable a[ ]
b[ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7. SOLE VOTING POWER
None
8. SHARED VOTING POWER
SHARES
BENEFICIALLY 285,660
OWNED BY
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON
WITH None
10. SHARED DISPOSITIVE POWER
285,660
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
285,660
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.75%
14. TYPE OF REPORTING PERSON*
PN
<PAGE>3
SCHEDULE 13D
CUSIP No. 933132102
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Orin S. Kramer
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
Not Applicable a[ ]
b[ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
7. SOLE VOTING POWER
None
8. SHARED VOTING POWER
SHARES
BENEFICIALLY 285,660
OWNED BY
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON None
WITH
10. SHARED DISPOSITIVE POWER
285,660
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
285,660
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.75%
14. TYPE OF REPORTING PERSON*
IN
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SCHEDULE 13D
CUSIP No. 933132102
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Jay Spellman
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
Not Applicable a[ ]
b[ ]
3. SEC USE ONLY
4. SOURCE OF FUNDS*
OO
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
7. SOLE VOTING POWER
None
8. SHARED VOTING POWER
SHARES
BENEFICIALLY 285,660
OWNED BY
REPORTING 9. SOLE DISPOSITIVE POWER
PERSON None
WITH
10. SHARED DISPOSITIVE POWER
285,660
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
285,660
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.75%
14. TYPE OF REPORTING PERSON*
IN
<PAGE>5
Item 1. Security and Issuer
This statement on Schedule 13D (the "Statement") relates to the
Common Stock, par value $.01 per share (the "Common Stock"), of Walshire
Assurance Company, a Pennsylvania corporation (the "Company"). Pursuant to
Rule 13d-3 promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act"), this Schedule 13D also relates to the shares of Common Stock
issuable upon conversion of 5,000 shares of the Company's 6 % Cumulative
Convertible Preferred Stock, par value $.01 per share (the "Preferred Stock").
Each share of Preferred Stock is currently convertible into 3.75 shares of
Common Stock. The principal executive offices of the Company are located at
3350 Whireford Road, York, Pennsylvania 17402.
Item 2. Identity and Background
The Statement is being filed by (1) Kramer Spellman L.P., a Delaware
limited partnership ("KS"), (2) Orin S. Kramer, a United States citizen, in
his capacity as one of the two general partners of KS ("Mr. Kramer"), and (3)
Jay Spellman, a United States citizen, in his capacity as one of the two
general partners of KS ("Mr. Spellman"). KS, Mr. Kramer and Mr. Spellman are
sometimes collectively referred to herein as the "Reporting Persons".
KS serves as a general partner to investment partnerships and as a
discretionary investment manager to managed accounts. The principal offices
of KS are located at 2050 Center
<PAGE>6
Avenue, Suite 300, Fort Lee, New Jersey 07024, which is also the business
address of Mr. Kramer and Mr. Spellman.
The shares of Common Stock which are the subject of this Statement
are held directly by investment partnerships for which KS serves as the
general partner and managed accounts for which KS serves as discretionary
investment manager (collectively, the "Partnerships and Managed Accounts").
None of the Reporting Persons has been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) during the
last five years.
During the last five years, none of the Reporting Persons has been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or
finding any violation with respect to such laws.
Item 3. Sources and Amounts of Funds or Other Consideration
The Partnerships and Managed Accounts expended an aggregate of
approximately $3,946,249 (including brokerage commissions, if any) to purchase
the 285,660 shares of Common Stock held by them, which includes $250,000 to
purchase the 18,750 shares of Common Stock issuable upon conversion of the
Preferred Stock. The Partnerships and Managed Accounts regularly effect
purchases of securities through margin accounts maintained for them with
Morgan Stanley & Co. Incorporated, which extends
<PAGE>7
margin credit to the Partnerships or Managed Accounts, as the case may be, as
and when required to open or carry positions in the margin account, subject to
applicable Federal margin regulations, stock exchange rules and the firm's
credit policies. The positions held in this margin account are pledged as
collateral security for the repayment of debit balances in the account.
Item 4. Purpose of Transaction
The purpose of the acquisition of the shares of Common Stock by each
of the Reporting Persons is for investment. Each Reporting Person may make
further purchases of Common Stock from time to time and may dispose of any or
all of the shares of Common Stock held by it at any time.
The Reporting Persons are engaged in the investment business. In
pursuing this business, the Reporting Persons analyze the operations, capital
structure and markets of companies in which they invest, including the
Company, on a continuous basis through analysis of documentation and
discussions with knowledgeable industry and market observers and with
representatives of such companies (often at the invitation of management).
The Reporting Persons do not believe they possess material inside information
concerning the Company. From time to time, one or more of the Reporting
Persons may hold discussions with third parties or with management of such
companies in which the Reporting Person may suggest or take a position with
respect to potential changes in the operations,
<PAGE>8
management or capital structure of such companies as a means of enhancing
shareholder value. Such suggestions or positions may relate to one or more of
the transactions specified in clauses (a) through (j) of Item 4 of the
Schedule 13D, including, without limitation, such matters as disposing of or
selling all or a portion of the company or acquiring another company or
business, changing operating or marketing strategies, adopting or not adopting
certain types of anti-takeover measures and restructuring the company's
capitalization or dividend policy. However, none of the Reporting Persons
intends to seek control of the Company or participate in the management of the
Company.
Except as set forth above, the Reporting Persons do not have any
present plans or proposals that relate to or would result in any of the
actions required to be described in Item 4 of Schedule 13D.
Each of the Reporting Persons may, at any time, review or reconsider
its position with respect to the Company and formulate plans or proposals with
respect to any of such matters, but has no present intention of doing so.
Item 5. Interest in Securities of the Issuer
(a)-(b) On the date of this Statement:
(i) Mr. Kramer has beneficial ownership for purposes of Section
13(d) of the Securities Exchange Act of 1934 ("Beneficial Ownership") of
285,660 shares of Common Stock, which includes 18,750 shares of Common Stock
issuable upon conversion of the Preferred Stock, by virtue of his position as
one of the
<PAGE>9
1.
two general partners of KS. Such shares represent 7.75% of the issued and
outstanding Common Stock. Mr. Kramer shares voting power and dispositive
power over the Common Stock with Mr. Spellman and KS.
(i) Mr. Spellman has Beneficial Ownership of 285,660 of Common
Stock, which includes 18,750 shares of Common Stock issuable upon conversion
of the Preferred Stock, by virtue of his position as one of the two general
partners of KS. Such shares represent 7.75% of the issued and outstanding
Common Stock. Mr. Spellman shares voting power and dispositive power over the
Common Stock with Mr. Kramer and KS.
(ii) KS has Beneficial Ownership of 285,660 shares of Common
Stock, which includes 18,750 shares of Common Stock issuable upon conversion
of the Preferred Stock, by virtue of its position as general partner of, or
discretionary investment manager to, the Partnerships and Managed Accounts, as
the case the may be, holding such shares of Common Stock. Such shares
represent 7.75% of the issued and outstanding Common Stock. KS shares voting
power and dispositive power over such shares with Mr. Kramer and Mr. Spellman.
The percentages used herein are calculated based upon the 3,665,902
shares of Common Stock stated to be issued and outstanding, as reflected in
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1995, plus an additional 18,750 shares of Common Stock issuable upon
conversion of the Preferred Stock.
<PAGE>10
(c) The trading dates, number of shares purchased and price per
share (including commissions, if any) for all transactions by the Reporting
Persons during the past 60 days are set forth in Schedule I hereto. All such
transactions were over-the-counter purchases.
(d) Not applicable.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings, or Relationships with
Respect to Securities of the Issuer.
None.
Item 7. Material to be Filed as Exhibits
Exhibit 99.1: Joint Filing Agreement among the Reporting Persons.
Exhibit 99.2: Subscription Agreement relating to the Purchase of
the 5,000 shares of Preferred Stock.
<PAGE>11
Signature
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
September 22, 1995.
KRAMER SPELLMAN L.P.
By: /s/ Orin S. Kramer
Name: Orin S. Kramer
Title: a General Partner
By: /s/ Jay Spellman
Name: Jay Spellman
Title: a General Partner
/s/ Orin S. Kramer
Orin S. Kramer
/s/ Jay Spellman
Jay Spellman
<PAGE>12
Schedule I
Date Shares Purchased Price Per Share
7/13/95 3,000 $16.675
7/17/95 2,000 16.675
7/21/95 2,500 16.560
9/15/95 30,000 16.375
9/15/95 12,000 16.154
9/18/95 35,000 16.250
9/19/95 45,000 16.310
<PAGE>13
Exhibit Index
Exhibit Page No.
Exhibit 99.1: Joint Filing Agreement, dated 14
September 14, 1995, among Kramer Spellman, L.P.,
Orin S. Kramer and Jay Spellman
Exhibit 99.2: Subscription Agreement 15
relating to the Purchase of the 5,000 shares of
Preferred Stock
<PAGE>1
EXHIBIT 99.1
JOINT FILING AGREEMENT
The undersigned hereby agree that the statement on Schedule 13D
dated September 22, 1995 with respect to the Common Stock of Walshire
Assurance Company is, and any amendments thereto signed by each of the
undersigned shall be, filed on behalf of each of us pursuant to and in
accordance with the provisions of Rule 13d-1(f) under the Securities Exchange
Act of 1934.
This Agreement may be executed in counterparts, each of which shall
for all purposes be deemed to be an original and all of which shall constitute
one and the same instrument.
Dated: September 22, 1995
KRAMER SPELLMAN L.P.
By: /s/ Orin S. Kramer
Name: Orin S. Kramer
Title: a General Partner
By: /s/ Jay Spellman
Name: Jay Spellman
Title: a General Partner
/s/ Orin S. Kramer
Orin S. Kramer
/s/ Jay Spellman
Jay Spellman
<PAGE>1
EXHIBIT 99.2
SUBSCRIPTION AGREEMENT
WALSHIRE ASSURANCE COMPANY
Private Placement of
6 % Cumulative Convertible Preferred Stock
Minimum Offering - 200,000 Shares
Maximum Offering - 500,000 Shares
Offering Price - $50.00 Per Share
HOW TO SUBSCRIBE
The minimum purchase which must be made by any subscriber is 1,000 shares
of 6 % Convertible Preferred Stock (the "Shares") of Walshire Assurance
Company (the "Company") except that the Company may, in its sole discretion,
accept subscriptions for the purchase of less than 1,000 Shares, provided,
however, that it is anticipated that subscriptions will not be accepted for
less than 500 Shares. The Shares are being offered for sale on a "best
efforts, all or none" basis with respect to the first 200,000 Shares, and on a
"best efforts" basis with respect to the remaining 300,000 Shares, through RAS
Securities Corp., as exclusive placement agent ("Placement Agent"). Any
qualified subscriber who wishes to purchase Shares should deliver the
following items to RAS Securities Corp., 2 Broadway, New York,
NY 10004:
(1) one dated and executed copy of the Subscription Agreement with
all blanks properly completed; and
(2) a check payable to the order of "Continental Stock Transfer &
Trust Company - Walshire Assurance Company Escrow Account" in the amount of
$50.00 per Share subscribed for. In lieu of a check, payment may be made by
wire transfer pursuant to instructions available upon request from the
Placement Agent.
<PAGE>2
THE 6 % CONVERTIBLE PREFERRED STOCK OFFERED HEREBY AND THE COMMON STOCK INTO
WHICH IT MAY BE CONVERTED (COLLECTIVELY, THE "SECURITIES") HAVE NOT BEEN
REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION, ANY STATE SECURITIES
COMMISSION OR ANY OTHER REGULATORY AUTHORITY. THE SECURITIES ARE BEING
OFFERED PURSUANT TO EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF FEDERAL
AND STATE SECURITIES LAWS AND CANNOT BE RESOLD UNLESS THEY ARE SUBSEQUENTLY
REGISTERED UNDER SUCH LAWS OR UNLESS EXEMPTIONS FROM REGISTRATION ARE
AVAILABLE, ADDITIONAL RESTRICTIONS ON TRANSFER OF THE SHARES ARE SET FORTH IN
THIS AGREEMENT AND IN THE CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM OF
WALSHIRE ASSURANCE COMPANY DATED OCTOBER 26, 1993, AS SUPPLEMENTED OR AMENDED,
AND THE EXHIBITS THERETO.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN
EXAMINATION OF THE COMPANY AND THE TERMS OF THE OFFERING, INCLUDING THE MERITS
AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL
OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE
FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE
ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE
THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR
AN INDEFINITE PERIOD OF TIME.
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT (the "Agreement") between Walshire Assurance
Company (the "Company") and the purchaser identified on the signature page
hereto (the "Subscriber").
BACKGROUND
Subscriber desires to purchase, and the Company desires to sell, up to
that number of shares of 6 % Convertible Preferred Stock of the Company (the
"Shares") set forth on the signature page hereto, upon the terms and
conditions contained herein.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein and for the other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
<PAGE>3
1. SUBSCRIPTION FOR SHARES; PURCHASE PRICE.
(a) Subscriber hereby subscribes for and agrees to purchase up to
that number of Shares set forth on the signature page hereto at a purchase
price of $50.00 per Share and on the terms and conditions described herein and
in the Company's Confidential Private Placement Memorandum dated October 26,
1993, as supplemented by the Company's Supplement dated January 31, 1994, as
may be further supplemented or amended, and the exhibits thereto
(collectively, the "Memorandum").
(b) The aggregate purchase price for the Shares subscribed for is
equal to the number of Shares subscribed for multiplied by $50.00 per share
and is set forth on the signature page hereto (the "Purchase Price").
(c) Subscriber encloses herewith a check, or is wire transferring
funds, payable to the order of "Continental Stock Transfer & Trust Company -
Walshire Assurance Company Escrow Account" in an amount equal to the Purchase
Price.
2. REPRESENTATIONS AND WARRANTIES AS TO
SUITABILITY STANDARDS.
Subscriber hereby represents and warrants that:
(a) Subscriber has such knowledge and experience in financial and
business matters that Subscriber is capable of evaluating the merits and risks
of the prospective investment in the Company and of protecting his own
interests in connection therewith;
(b) Subscriber is acquiring the Shares for Subscriber's own
account, not on behalf of other persons, and for investment and not with a
view to resale or distribution;
(c) Subscriber can bear the economic risk of losing Subscriber's
entire investment;
(d) Subscriber's overall commitment to investments which are not
readily marketable is not disproportionate to Subscriber's net worth,
Subscriber's investment in the Shares will not cause such overall commitment
to become excessive, and the investment is suitable for Subscriber when viewed
in light of Subscriber's other securities holdings and Subscriber's financial
situation and needs;
(e) Subscriber has adequate means of providing for Subscriber's
current needs and personal contingencies;
(f) Subscriber has evaluated all the risks of investment in the
Company;
(g) Subscriber has experience in making investment decisions of
this type;
(h) Subscriber understands the business in which the Company is
engaged;
<PAGE>4
(i) If Subscriber is an individual, Subscriber is an executive
officer or director of the Company, a citizen of the United States, at least
eighteen (18) years of age and a bona fide resident and domiciliary (not a
temporary or transient resident) of the state indicated on the signature page
hereof and Subscriber has no present intention of becoming a resident of any
other state or jurisdiction;
(j) If Subscriber is not an individual, Subscriber is domiciled in
the state indicated on the signature page hereof, has no present intention of
becoming domiciled in any other state or jurisdiction and is an "Institutional
Investor" as defined under the "blue sky" or securities laws or regulations of
the state in which it is domiciled; and;
(k) Subscriber otherwise meets any special suitability standards
applicable to Subscriber's state of residence or domicile.
4. TRANSFER RESTRICTIONS.
(a) Subscriber represents that he understands that the sale or
transfer of the Shares are severely restricted and that:
(i) Neither the Shares nor the shares of the Company's Common
Stock into which the Shares are convertible
(the "Conversion Shares") (the Shares and the Conversion Shares are sometimes
collectively referred to as the "Securities") have been registered under the
Securities Act of 1933, as amended (the "Securities Act"), or the laws of any
other jurisdiction by reason of a specific exemption or exemptions from
registration under the Securities Act and applicable state securities laws,
and that the Company's reliance on such exemptions is predicated on the
accuracy and completeness of the Subscriber's representations, warranties,
acknowledgements and agreements herein. Neither the Shares nor the Conversion
Shares can be sold or transferred by Subscriber unless subsequently registered
under applicable law or an exemption from registration is available. The
Company is not required to register the Shares or the Conversion Shares,
except as provided in Section 8 with respect to the Conversion Shares, or to
make any exemption from registration available;
(ii) The right to sell or transfer any of the Shares or the
Conversion Shares will be restricted as set forth in this Agreement and as
described in the Company's Memorandum which include restrictions against sale
or transfer in violation of applicable securities laws, the requirement that
an opinion of counsel be furnished that any proposed sale or transfer will not
violate such laws and other restrictions and requirements; and
(iii) There will be no public market for the Shares and
Subscriber may not be able to sell the Shares. Accordingly, the Subscriber
must bear the economic risk of Subscriber's investment for an indefinite
period of time.
(b) Subscriber agrees that he will not offer to sell, sell or
transfer the Shares or the Conversion Shares or any part thereof or interest
therein without registration under the
<PAGE>5
Securities Act and applicable state securities laws or without providing to
the Company an opinion of counsel acceptable to the Company that such offer,
sale or transfer is exempt from registration under the Securities Act and
under applicable state securities laws.
(c) The Subscriber acknowledges that the certificates representing
the Shares and the Conversion Shares will bear the following legend:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or the
securities laws of any state. The shares may not be offered, sold,
transferred, pledged or otherwise disposed of without an effective
registration statement under the Securities Act of 1933, as amended,
and under any applicable state securities laws or an opinion of
counsel for the Company that the proposed transaction will be exempt
from such registration."
and that the Company reserves the right to place a stop order against the
certificate representing the Shares and the Conversion Shares and to refuse to
effect any transfers thereof in the absence of an effective registration
statement with respect to the Shares and the Conversion Shares or in the
absence of an opinion of counsel to the Company that such transfer is exempt
from registration under the Securities Act and under applicable state
securities laws.
5. SUBSCRIBER'S REPRESENTATIONS AND WARRANTIES.
Subscriber represents and warrants that:
(a) Subscriber has received, has carefully read and understands the
Company's Memorandum;
(b) Subscriber has been furnished with all additional documents and
information which Subscriber has requested;
(c) Subscriber has had the opportunity to ask questions of and
received answers from the Company concerning the Company, the Shares and the
Conversion Shares and to obtain any additional information necessary to verify
the accuracy of the information furnished;
(d) Subscriber has relied only on the foregoing information and
documents in determining to make this subscription;
(e) The Memorandum and other information furnished by the Company
do not constitute investment, accounting, legal or tax advice and Subscriber
is relying on professional advisers for such advice;
(f) All documents, records and books pertaining to Subscriber's
investment have been made available for inspection by Subscriber and by
Subscriber's attorney, and/or Subscriber's accountant and/or Subscriber's
purchaser representative, and the books and records of the Company will be
available upon reasonable notice, for inspection by investors during
reasonable business hours at the Company's principal place of business;
<PAGE>6
(g) Subscriber recognizes that an investment in the Shares involves
risks, including, but not limited to, those set forth under "Investment
Considerations" in the Offering Summary;
(h) Subscriber understands, acknowledges and agrees that the
Company is relying solely upon the representations and warranties made herein
in determining to sell Subscriber the Shares; and
(i) The Subscriber has not paid or given any commission or other
remuneration in connection with the purchase of the Shares other than as
described in the Company's Memorandum. The Subscriber has not received any
public media advertisements and has not been solicited by any form of mass
mailing solicitation.
6. SUBSCRIPTION IRREVOCABLE BY SUBSCRIBER BUT SUBJECT TO ACCEPTANCE OR
REJECTION BY THE COMPANY.
(a) This Subscription Agreement is not, and shall not be, revocable
by Subscriber.
(b) The Company, in its sole discretion, has the right to terminate
or withdraw the offering at any time, to accept or reject subscriptions in
other than the order in which they were received, to reject any subscription
in whole or in part, to allot to Subscriber less than the number of shares
subscribed for, and to return without interest the amount paid by Subscriber.
(c) The Subscriber understands and agrees that this Agreement is
not binding upon the Company until the Company accepts it, which acceptance is
at the sole discretion of the Company and is to be evidenced by the Company's
completion, execution and delivery of this Agreement.
(d) In the event of rejection of this subscription in whole (but
not in part), or in the event the sale of the Shares subscribed for by the
Subscriber is not consummated by the Company for any reason (in which event
this Agreement shall be deemed to be rejected), this Agreement and any other
agreement entered into between the Subscriber and the Company relating to this
subscription shall thereafter have no force or effect and the Company shall
promptly cause to be returned to the Subscriber the Purchase Price remitted by
the Subscriber, without interest thereon or deduction therefrom. In the event
that this subscription is accepted in part, the Company shall promptly cause
to be returned to the Subscriber that portion of the Purchase Price remitted
by the Subscriber which represents payment for the Shares for which this
subscription was not accepted, without interest thereon or deduction
therefrom.
7. INDEMNIFICATION AND HOLD HARMLESS.
Subscriber agrees that if he breaches any agreement, representation or
warranty he has made in this Agreement, he agrees to indemnify and hold
harmless the Company against any claim, liability, loss, damage or expense
(including attorneys' fees and other costs of investigating and litigating
claims) caused, directly or indirectly, by his breach.
<PAGE>7
8. REGISTRATION RIGHTS.
8.1 Required Registration; Demand Registration.
(a) As soon as practicable after March 31, 1994, the Company shall
prepare, file and use its reasonable efforts to have declared effective by the
Securities and Exchange Commission (the "Commission"), on one occasion, a
registration statement on Form S-3 and such other documents, including a
prospectus, as may be necessary to comply with the provisions of the
Securities Act, so as to permit a public offering and sale of all of the
Conversion Shares and to keep such registration statement effective until the
earlier of (i) the date on which all of the Conversion Shares have been
distributed to the public pursuant to the registration statement and (ii) two
(2) years after the registration statement is first declared effective by the
Commission. The Company shall be required to effect only one (1) such
registration pursuant to this Section 8.1(a).
(b) If the Company fails to register the Conversion Shares as provided
in Section 8.1(a), then at any time commencing after March 31, 1994, any
holder ("Holder") of Shares shall have the right (which right is in addition
to the registration rights under Section 8.2 hereof), exercisable by written
notice ("Demand Notice") to the Company, to have the Company prepare, file and
use its reasonable efforts to have declared effective by the Commission, on
one occasion, a registration statement and such other documents, including a
prospectus, as may be necessary to comply with the provisions of the
Securities Act, so as to permit a public offering and sale of the Conversion
Shares and to keep such registration statement effective until the earlier of
(i) the date on which all such Conversion Shares as are included in the
registration statement have been distributed to the public pursuant to the
registration statement and (ii) two (2) years after the registration statement
is first declared effective by the Commission. The Company shall be required
to effect only one (l) such registration pursuant to this Section 8.1(b) on
behalf of all Holders.
(c) The Company covenants and agrees to give written notice of any
registration request under Section 8.1(b) to all other registered Holders of
the Shares and/or Conversion Shares, at their respective addresses appearing
in the Company's records, within ten (10) days from the date of the receipt of
any such registration request. The Company shall include in the registration
statement any Conversion Shares of any other Holders of the Shares and/or
Conversion Shares who notify the Company within ten (10) days after receiving
notice from the Company of such request.
8.2 Piggyback Registration
(a) If (but without any obligation to do so) at any time commencing
after issuance of the Shares, the Company proposes to register any of its
Common Stock under the Securities Act (other than in connection with a merger,
acquisition or exchange offer or pursuant to Form S-8 or successor form or
pursuant to any form which does not permit the offer or sale of securities by
any person other than the Company) it will give written notice by registered
mail, at least thirty (30) days prior to the filing of each such registration
statement to the Holders of the Shares and/or Conversion Shares, at their
respective addresses appearing in the
<PAGE>8
Company's records, of its intention to do so. Upon the written request of any
Holder of the Shares and/or Conversion Shares given to do so. Upon the
written request of any Holder of the Shares and/or Conversion Shares given
within ten (10) days after receipt of any such notice of its or their desire
to include any such Conversion Shares in such proposed registration statement,
the Company shall afford such Holders
<PAGE>9
of the Shares and/or Conversion Shares the opportunity to have any such
Conversion Shares registered under such registration statement.
(b) Notwithstanding the provisions of this Section 8.2, the Company
shall have the right at any time after it shall have given written notice
pursuant to this Section 8.2 (irrespective of whether a written request for
inclusion of any such securities shall have been made) to elect not to file
any such proposed registration statement, or to withdraw the same after the
filing but prior to the effective date hereof.
(c) If any registration pursuant to this Section 8.2 shall be
underwritten in whole or in part, the Company may require that the Conversion
Shares requested for inclusion pursuant to this Section 8.2 be included in the
underwriting on the same terms and conditions as the securities otherwise
being sold in such underwritten offering. If the managing underwriter of such
offering contemplated by such registration statement shall advise the Company
and the Holders in writing that the inclusion of all of the Conversion Shares
originally covered by a request for registration together with the shares of
Common Stock proposed to be included by the Company and any other selling
shareholder in such registration creates a substantial risk that the Company's
offering will be materially and adversely affected, the number of Conversion
Shares and Parity Conversion Shares (as hereinafter defined) otherwise to be
included in the underwritten public offering may be proportionately reduced
among the Holders of the Conversion Shares and the holders of any shares of
Common Stock ("Parity Conversion Shares") issued or issuable upon conversion
of any Parity Stock (as defined in the Resolution of the Board of Directors
determining the designation and number of the Shares (the "Resolution"), a
copy of which is attached as Exhibit "B" to the Memorandum) proposed to be
registered, to the minimum extent such managing underwriter so advises the
Company is necessary to avoid such risk; provided, however, that no such
reduction shall be made until all shares of Common Stock proposed to be
registered by any shareholder, other than (i) Common Stock issued or issuable
upon conversion of any Senior Stock (as defined in the Resolution), (ii)
Conversion Shares or (iii) Parity Conversion Shares, are first removed from
such registration. No reduction shall be made in the number of shares of
Common Stock issued or issuable upon the conversion of Senior Stock until all
Conversion Shares or Parity Conversion Shares have been removed. Whenever
this Section 8.2 requires that Conversion Shares and Parity Conversion Shares
be proportionately reduced, then such reduction shall be effected in
proportion (as nearly as practicable) as the number of shares of Conversion
Shares and Parity Conversion Shares proposed to be registered by a holder of
such shares bears to the total number of Conversion Shares and Parity
Conversion Shares proposed to be registered by all holders of such shares. At
the request of the managing underwriter, if any, of any offering made by a
registration statement pursuant to which a Holder has registered Conversion
Shares pursuant to this Section 8.2, each Holder, as a condition precedent to
participating in such underwritten offering, shall agree not to sell any
shares of Common Stock (including Conversion Shares) held or owned by such
Holder for a period of not more than 90 days after the effective date of such
registration statement.
<PAGE>10
8.3 Covenants of the Company with Respect to Registration
In connection with any registration under Section 8.1 or Section 8.2
hereof, the Company covenants and agrees as follows:
<PAGE>11
(a) The Company shall use its best efforts to promptly file a
registration statement upon receipt of any demand therefor pursuant to Section
8.1 hereof, shall use its best efforts to have any registration statements
declared effective at the earliest practicable time, and shall furnish each
Holder desiring to sell Conversion Shares such number of prospectuses as shall
reasonably be requested. It shall be a condition precedent to the Company's
obligations to take any action pursuant to Section 8 that any Holder desiring
to sell Conversion Shares shall provide to the Company such information
regarding itself, the Shares and Conversion Shares held by it, the number of
Conversion Shares to be sold and the intended method of disposition and such
other information as shall be reasonably requested by the Company to effect
the registration of such Conversion Shares.
(b) The Company shall pay all costs, fees and expenses in connection
with all registration statements filed pursuant to Sections 8.1 and 8.2 hereof
including, without limitation, the Company's legal and accounting fees,
printing expenses, blue sky fees and expenses (but excluding fees and expenses
of Holders' counsel, any underwriting or selling commissions or any other
costs, fees or expenses of any underwriter, broker-dealer or other person
acting on behalf of Holders).
(c) In any registration statement filed pursuant to Section 8.1 and
Section 8.2, the Company will take all reasonable action which may be required
in qualifying or registering the Conversion Shares included in such
registration statement for offering and sale under the securities or blue sky
laws of such states as reasonably are requested by the Holders, provided that
the Company shall not be obligated to execute or file any general consent to
service of process or to qualify as a foreign corporation or dealer to do
business under the laws of any such jurisdiction.
(d) Nothing contained in this Agreement shall be construed as requiring
the Holders to convert Shares prior to the initial filing of any registration
statement or the effectiveness thereof.
8.4 Limitations.
(a) The Company shall not be obligated to file a registration statement
pursuant to Section 8.1 within 90 days before or after any proposed, pending
or completed public offering of the Company's securities. A public offering
shall be considered "proposed" for the purpose of the foregoing sentence if,
at or within 10 days after receipt of the Demand Notice, the Company has
signed a letter of intent with respect to such public offering.
(b) The Company shall not be required to register any Conversion Shares
at any time when the Shares or the Conversion Shares are then eligible for
sale pursuant to Rule 144(k) promulgated by the Commission (or any succeeding
regulation to Rule 144(k)).
(c) The Company shall not be obligated to effect a registration pursuant
to Section 8.1 or Section 8.2, or file any amendment or supplement thereto,
and may suspend the Holders' rights to make sales pursuant to an effective
registration pursuant to Section 8.1 or Section 8.2, at any time when the
Company, in the good faith judgment of its Board of Directors, reasonably
believes that the filing thereof at the time requested, or the offering of
securities pursuant thereto, would materially and adversely affect a pending
or proposed acquisition, merger, recapitalization,
<PAGE>12
consolidation, reorganization or similar transaction, or negotiations,
discussions or pending proposals with respect thereto.
(d) Notwithstanding anything in this Section 8 to the contrary, the
Company shall not be required to effect a registration of Conversion Shares
pursuant to Section 8.1 or Section 8.2, if, at the Company's option, it shall
have offered in writing to pay to the Holders of Conversion Shares otherwise
entitled to have their Conversion Shares registered pursuant to Section 8.1 or
Section 8.2, in exchange for such Conversion Shares, and shall have paid
within five (5) business days after the acceptance by any Holder, a sum equal
to the product of (1) Current Market Price of Common Stock (as defined in, and
determined pursuant to, the Resolution) determined as of the date of receipt
of the Demand Notice and (2) the number of Conversion Shares otherwise
proposed to be registered by such Holder.
8.5 Indemnification.
(a) The Company shall indemnify the Holders of the Conversion Shares to
be sold pursuant to any registration statement under Section 8.1 or Section
8.2, their respective officers and directors and each person, if any, who
controls such Holders within the meaning of Section 15 of the Securities Act
or Section 20(a) of the Securities Exchange Act of 1934, as amended ("Exchange
Act"), against all loss, claim, damage, expense or liability (including all
expenses reasonably incurred in investigating, preparing or defending against
any claim whatsoever) to which any of them may become subject under the
Securities Act, the Exchange Act or any other statute, common law or
otherwise, arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in such registration statement, or the
omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements contained therein not
misleading, unless such statement or omission was made in reliance upon and in
conformity with written information furnished to the Company by the Holders
expressly for use in such registration statement or any amendment or
supplement thereto, as the case may be. The indemnification provided for in
this Section 8.5(a) shall not inure to the benefit of any Holder (or to the
benefit of any person controlling such Holder) if the person asserting any
such loss, claim, damage or liability who purchased the Conversion Shares
which are the subject thereof did not receive a copy of an amended preliminary
prospectus or the final prospectus (or the final prospectus as amended or
supplemented) at or prior to the written confirmation of the sale of such
Conversion Shares to such person and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact made in such
registration statement was corrected in the amended preliminary prospectus or
the final prospectus (or the final prospectus as amended and supplemented).
(b) The Holders of the Conversion Shares to be sold pursuant to a
registration statement, and their successors and assigns, jointly and
severally, shall indemnify the Company, its officers and directors and each
person, if any, who controls the Company within the meaning of Section 15 of
the Securities Act or Section 20(a) of the Exchange Act, against all loss,
claim, damage or expense or liability (including all expenses reasonably
incurred in investigating, preparing or defending against any claim
whatsoever)
<PAGE>13
to which they may become subject under the Securities Act, the Exchange Act or
otherwise, based upon (i) any untrue statement or alleged untrue statement of
a
<PAGE>14
material fact contained in such registration statement, or the omission or
alleged omission therefrom of a material fact required to be stated therein or
necessary to make the statements contained therein not misleading but only if
such statement or omission was made in reliance upon and in conformity with
written information furnished to the Company by the Holders expressly for use
in such registration statement or any amendment or supplement thereto, as the
case may be, or (ii) the failure of any Holder (or any person controlling such
Holder) at or prior to the written confirmation of the sale of Conversion
Shares to send or deliver a copy of an amended preliminary prospectus or the
final prospectus (or the final prospectus as amended or supplemented) to the
person asserting any such losses, claims, damages, liabilities or expenses who
purchased the Conversion Shares which is the subject thereof and the untrue
statement or omission of a material fact contained in such preliminary
prospectus was corrected in the amended preliminary prospectus or final
prospectus (or the final prospectus as amended or supplemented).
(c) If any action is brought against the Holders, their respective
officers and directors or any controlling person of the Holders in respect of
which indemnity may be sought against the Company pursuant to Section 8.5(a),
or if any action is brought against the Company, its officers and directors or
any controlling person of the Company in respect of which indemnity may be
sought against the Holders pursuant to Section 8.5(b), then the party which is
entitled to such indemnification (collectively with such party's controlling
persons, the "Indemnitee") from the other party (the "Indemnitor") shall
within thirty (30) days after the receipt thereby of a summons or complaint
notify the Indemnitor in writing of the institution of such action.
Thereafter, the Indemnitor shall assume the defense of such action, including
the employment and payment of reasonable fees and expenses of counsel
(reasonably satisfactory to the Indemnitee). The Indemnitee shall have the
right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of the Indemnitee unless (i)
the employment of such counsel shall have been authorized in writing by the
Indemnitor in connection with the defense of such action, (ii) the Indemnitor
shall not have employed counsel to defend such action or (iii) the Indemnitee
shall have reasonably concluded that there may be defenses available to it or
them which are different from or additional to those available to the
Indemnitor (in which case the Indemnitor shall not have the right to direct
the defense of such action on behalf of the Indemnitee), in any of which
events the reasonably fees and expenses of not more than one additional firm
of attorneys for the Indemnitee shall be borne by the Indemnitor. Except as
expressly provided in the previous sentence, in the event that the Indemnitor
shall not previously have assumed the defense of any such action or claim, the
Indemnitor shall not thereafter be liable to the Indemnitee investigating,
preparing or defending any such action or claim. The Indemnitee agrees
promptly to notify the Indemnitor of the commencement of any litigation or
proceedings against the Indemnitee or any of its officers, directors or
controlling persons in connection with the resale of the Conversion Shares or
in connection with such registration statement.
8.6. Amendment. The provisions of this Section 8 may be amended upon the
written agreement of the Company and the Holders entitled to cast a majority
of the votes which Holders of Shares and/or Conversion Shares are then
entitled to vote (assuming for the
<PAGE>15
purposes of this Section 8.6 that each Share is entitled to one vote for each
Conversion Share into which it is then convertible), which such amendment
shall be binding on all Holders.
<PAGE>16
9. MISCELLANEOUS.
(a) This Subscription Agreement states the entire understanding
between the parties with respect to the subject matter hereof, and supersedes
all prior oral and written communications and agreements, and all
contemporaneous oral communications and agreements, with respect to the
subject matter hereof.
(b) This Subscription Agreement, upon acceptance by the Company,
shall bind, benefit, and be enforceable by and against each party hereto and
its successors, assigns, heirs administrators and executors. This
Subscription Agreement is not assignable by Subscriber.
(c) If any provision of this Subscription Agreement is construed to
be invalid, illegal or unenforceable, then the remaining provisions hereof
shall not be affected thereby and shall be enforceable without regard thereto.
(d) Article and section headings in this Subscription Agreement are
for convenience of reference only, do not constitute a part of this
Subscription Agreement, and shall not affect its interpretation.
(e) Words used in this Subscription Agreement shall be construed to
be of such number and gender as the context requires or permits. Unless a
particular context clearly provides otherwise, the words "hereof" and
"hereunder" and similar references refer to this Subscription Agreement in its
entirety and not to any specific Section or subsection.
(f) THIS SUBSCRIPTION AGREEMENT IS MADE UNDER, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF
PENNSYLVANIA APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED SOLELY THEREIN,
WITHOUT GIVEN EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
(g) Any notice, demand or other communication which any party
thereto may be required, or may elect, to give to anyone interested hereunder
shall be sufficiently given if (a) deposited, postage prepaid, in a United
States mail letter box, registered or certified mail, return receipt
requested, addressed to such address as may be given herein, or (b) delivered
personally at such address. Notices to the Company shall be addressed to 3350
Whiteford Road, York, Pennsylvania 17402, Attention: Chief Financial Officer.
(h) This Agreement may be executed through the use of separate
signature pages or in any number of counterparts, and each of such
counterparts shall, for all purposes, constitute one agreement binding on all
parties, notwithstanding that all parties are not signatories to the same
counterpart.
<PAGE>17
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement on the date set forth below.
Print Name of Subscriber
By: Subscription: I hereby
Signature of Authorized Officer subscribe for, and agree to purchase,
up to _____ Shares at an aggregate
Purchase Price of $______________.
Print Name
Title:
Residence/Domicile:
Street Number and Street
City/State/Zip Code
Telephone Number
Taxpayer Identification Number
The Company hereby accepts the foregoing subscription for
___________ Shares as of ____________________, 1994.
WALSHIRE ASSURANCE COMPANY
By:
Name:
Title:
