PLACEMENT AGREEMENT

 

                                                                  EXHIBIT 10.15

                                   $7,000,000

                                    InCapS SM

 

                            CHANDLER CAPITAL TRUST II

 

                                PLACEMENT AGREEMENT

                               -------------------

 

                                                              New York, New York

                                                                December 5, 2003

 

SANDLER O'NEILL & PARTNERS, L.P.

919 Third Avenue

6th Floor

New York, New York 10022

 

Ladies and Gentlemen:

 

     Chandler Capital Trust II (the "Trust"), a statutory trust organized under

the Delaware Statutory Trust Act, 12 Del. C. Sections 3801 et seq. (the

"Delaware Act") and Chandler (U.S.A.), Inc., an Oklahoma corporation (the

"Company" and together with the Trust, the "Offerors"), confirm their agreement

(the "Agreement") with Sandler O'Neill & Partners, L.P., as agent of the

Offerors (the "Placement Agent"), with respect to the issue and sale by the

Trust and the placement by the Placement Agent of 7,000 InCapS SM (liquidation

amount of $1,000 per security) of the Trust   (the "Capital Securities"). The

Capital Securities will be guaranteed by the Company to the extent provided in

the Guarantee Agreement, to be dated as of the Closing Date (as defined in

Section 2(a) hereof) (the "Guarantee Agreement"), between the Company, as

guarantor, and Wilmington Trust Company, as guarantee trustee (the "Guarantee

Trustee"), with respect to distributions and payments upon liquidation,

redemption and otherwise.

 

     The entire proceeds from the sale of the Capital Securities will be

combined with the entire proceeds from the sale by the Trust to the Company of

its common securities (the "Common Securities"), and will be used by the Trust

to purchase $7,000,000 aggregate principal amount of Floating Rate Junior

Subordinated Debt Securities due 2034 (the "Subordinated Debt Securities")

issued by the Company.   The Capital Securities and the Common Securities will

be issued pursuant to the Amended and Restated Declaration of Trust, to be

dated as of the Closing Date (the "Declaration"), among the Company, as

sponsor, the Administrators named therein (the "Administrators"), Wilmington

Trust Company, as institutional trustee (the "Institutional Trustee"),

Wilmington Trust Company, as Delaware trustee (the "Delaware Trustee"), and

the holders, from time to time, of undivided beneficial interests in the assets

of the Trust.   The Subordinated Debt Securities will be issued pursuant to the

Indenture, to be dated as of the Closing Date (the "Indenture"), between the

Company and Wilmington Trust Company, as indenture trustee (the "Indenture

Trustee").   The Indenture, the Guarantee Agreement, the Declaration, this

Agreement and the Subscription Agreement (as defined in Section 2(a) hereof)

are hereinafter referred to collectively as the "Operative Documents."

 

<PAGE>

                                                                         PAGE 2

 

     SECTION 1.   REPRESENTATIONS AND WARRANTIES.

                 ------------------------------

 

     (a)   The Trust and the Company, jointly and severally, represent and

warrant to the Placement Agent and the Purchaser (as defined in Section 2(a)

hereof) of Capital Securities as of the date hereof and as of the Closing Date,

and agree with the Placement Agent and the Purchaser, as follows:

 

          (i)       SIMILAR OFFERINGS.   Within a period of six months before or

after the date hereof, the Offerors have not, directly or indirectly, solicited

any offer to buy or offered to sell, and will not, directly or indirectly,

solicit any offer to buy or offer to sell, in the United States or to any

United States citizen or resident, any security which is or would be integrated

with the sale of the Capital Securities (including any securities of the same

or a similar class as the Capital Securities, other than the Capital

Securities) in a manner that would require the Capital Securities to be

registered under the Securities Act of 1933, as amended (the "1933 Act").

 

          (ii)      INCORPORATED DOCUMENTS.   The documents of the Company filed

with the Securities and Exchange Commission (the "Commission") in accordance

with the Securities Exchange Act of 1934, as amended (the "1934 Act"), from and

including the commencement of the fiscal year covered by the Company's most

recent Annual Report on Form 10-K, at the time they were or hereafter are filed

by the Company with the Commission (collectively, the "1934 Act Reports"),

complied and will comply in all material respects with the requirements of the

1934 Act and the rules and regulations of the Commission thereunder (the "1934

Act Regulations"), and, at the date of this Agreement and on the Closing Date,

do not and will not include an untrue statement of a material fact or omit to

state a material fact required to be stated therein or necessary to make the

statements therein, in the light of the circumstances under which they were

made, not misleading; and other than such instruments, agreements, contracts

and other documents as are filed as exhibits to the Company's Annual Report on

Form 10-K, Quarterly Reports on Form 10-Q or Current Reports on Form 8-K, there

are no instruments, agreements, contracts or documents of a character described

in Item 601 of Regulation S-K promulgated by the Commission to which the

Company or any of its subsidiaries is a party.

 

          (iii)     INDEPENDENT ACCOUNTANTS.   The accountants of the Company who

certified the financial statements included in the 1934 Act Reports (the

"Independent Accountants") are independent public accountants of the Company

and its subsidiaries within the meaning of the 1933 Act and the rules and

regulations of the Commission thereunder (the "1933 Act Regulations").

 

          (iv)      FINANCIAL STATEMENTS AND INFORMATION.   The consolidated

historical financial statements of the Company, together with the related

schedules and notes, included in the 1934 Act Reports present fairly, in all

material respects, the respective consolidated financial positions of the

Company and its consolidated subsidiaries at the respective dates indicated,

and the consolidated statements of income, changes in stockholders' equity

and cash flows of the Company and its consolidated subsidiaries for the

respective periods specified; said financial statements have been prepared in

conformity with generally accepted accounting principles in the United States

applied on a consistent basis throughout the periods involved, except as

 

<PAGE>

                                                                        PAGE 2

 

disclosed in the notes to such financial statements; the supporting schedules,

if any, included in the 1934 Act Reports present fairly, in all material

respects, the information required to be stated therein and any pro forma

financial statements and the related notes thereto included in the 1934 Act

Reports present fairly the information shown therein, have been prepared in

accordance with the Commission's rules and guidelines with respect to pro

forma financial statements and have been properly compiled on the bases

described therein, and the assumptions used in the preparation thereof are

reasonable and the adjustments used therein are appropriate to give effect to

the transactions and circumstances referred to therein; the statutory financial

statements of National American Insurance Company, an Oklahoma corporation (the

"Insurance Subsidiary") as filed with the applicable insurance regulatory

authorities in the jurisdiction in which each such Insurance Subsidiary is

organized (each such regulatory authority, the "State Regulatory Authority")

for the years ended December 31, 2002, 2001 and 2000 and for any quarters ended

subsequent to December 31, 2002, including all   supporting documents filed

therewith (collectively, the "Insurance Subsidiary Financial Statements"):

(i) have been prepared in accordance with statutory accounting principles

promulgated by the National Association of Insurance Commissioners, as applied,

with respect to the Insurance Subsidiary, by the applicable State Regulatory

Authority of such entity, consistently applied for the periods covered thereby

and present fairly the statutory financial position of such Insurance

Subsidiaries as at the respective dates thereof and the results of operations

of such Insurance Subsidiaries for the respective periods then ended; and (ii)

complied in all material respects with all applicable laws, rules and

regulations when filed, and, to the knowledge of the Company, no material

deficiency has been asserted with respect to the Insurance Subsidiary Financial

Statements by any applicable Regulatory Agency.   As used herein, the term

"Regulatory Agency" means any federal or state agency charged with the

supervision or regulation of insurance companies, or any court, administrative

agency or commission or other governmental agency, authority or instrumentality

having supervisory or regulatory authority with respect to the Company or any

of its subsidiaries.

 

          (v)       NO MATERIAL ADVERSE CHANGE.   Since the respective dates as of

which information is given in the 1934 Act Reports, there has not been (A) any

material adverse change in the condition, financial, regulatory or otherwise,

or in the earnings, business affairs or business prospects of the Trust or of

the Company and its subsidiaries considered as one enterprise, whether or not

arising in the ordinary course of business (a "Material Adverse Effect") or

(B) any dividend or distribution of any kind declared, paid or made by the

Company on any class of its capital stock other than regular dividends on the

Company's common stock declared and paid consistent with past practice.

 

          (vi)      INTERNAL ACCOUNTING CONTROLS.   Each of the Company and its

subsidiaries maintain a system of internal accounting controls sufficient to

provide reasonable assurance that (i) transactions are executed in accordance

with the management's general or specific authorizations, (ii) transactions

are recorded as necessary to permit preparation of financial statements in

conformity with generally accepted accounting principles and to maintain asset

accountability, (iii) access to assets is permitted only in accordance with

the management's general or specific authorization and   (iv) the recorded

accountability for assets is compared with the existing assets at reasonable

intervals and appropriate action is taken with respect to any differences.  

 

<PAGE>

                                                                        PAGE 4

 

          (vii)     DISCLOSURE CONTROLS.   The Company has established and

maintains disclosure controls and procedures (as such term is defined in Rule

13a-15(e) and 15d-15(e) under the 1934 Act); such disclosure controls and

procedures (i) are designed to ensure that material information relating to

the Company, including its consolidated subsidiaries, is made known to the

Company's Chief Executive Officer and its Chief Financial Officer by others

within those entities, particularly during the periods in which the 1934 Act

Reports are being prepared, (ii) have been evaluated for effectiveness as of

the end of the annual or quarterly period reported to the Commission and (iii)

are effective to perform the functions for which they were established; the

Company's auditors and the Audit Committee of the Board of Directors have been

advised of: (A) any significant deficiencies in the design or operation of

internal controls which could adversely affect the Company's ability to record,

process, summarize, and report financial data and (B) any fraud, whether or not

material, that involves management or other employees who have a role in the

Company's internal controls; any material weaknesses in internal controls have

been identified for the Company's auditors; and since the date of the most

recent evaluation of such disclosure controls and procedures, there have been

no significant changes in internal controls or in other factors that could

significantly affect internal controls, including any corrective actions with

regard to significant deficiencies and material weaknesses.

 

          (viii)    REGULATORY MATTERS.   Neither the Company nor any of its

subsidiaries is subject or is party to, or has received any notice or advice

that any of them may become subject or party to, any investigation with respect

to any corrective, suspension or cease-and-desist order, agreement, consent

agreement or other regulatory enforcement action, proceeding or order with or

by, or is a party to any commitment letter or similar undertaking to, or is

subject to any directive by, or has been a recipient of any supervisory letter

from, or has adopted any board resolutions at the request of, any Regulatory

Agency that currently relates to or restricts in any material respect their

business or that in any manner relates to their capital and surplus adequacy or

their management (each, a "Regulatory Agreement"), nor has the Company or any

of its subsidiaries been advised by any Regulatory Agency that it is

considering issuing or requesting any such Regulatory Agreement; there is no

unresolved violation, criticism or exception by any Regulatory Agency with

respect to any report or statement relating to any examinations of the Company

or any of its subsidiaries which, in the reasonable judgment of the Company,

is expected to result in a Material Adverse Effect; and without limiting the

generality of the foregoing, there are no restrictions or limitations on the

authority of the Insurance Subsidiary to pay dividends to the Company, directly

or indirectly, other than general restrictions and limitations applicable to

all insurance companies domiciled in the state of organization of such

Insurance Subsidiary pursuant to applicable law.

 

          (ix)      NO UNDISCLOSED LIABILITIES.   Neither the Company nor any of

its subsidiaries has any material liability, whether known or unknown, whether

asserted or unasserted, whether absolute or contingent, whether accrued or

unaccrued, whether liquidated or unliquidated, and whether due or to become

due, including any liability for taxes (and there is no past or present fact,

situation, circumstance, condition or other basis for any present or future

action, suit, proceeding, hearing, charge, complaint, claim or demand against

the Company or its subsidiaries giving rise to any such liability), except (i)

for liabilities set forth in the financial statements referred to in Section

1(a)(iv) above and (ii) normal fluctuations in the amount of the liabilities

referred to in clause (i) above occurring in the ordinary course of business

of the

 

<PAGE>

                                                                         PAGE 5

 

Company and all of its subsidiaries since the date of the most recent balance

sheet included in such financial statements.

 

          (x)       INSURANCE RESERVING PRACTICES.   The Company and its

Insurance Subsidiaries have made no material change in their insurance

reserving practices since the respective dates as of which information is

given in the 1934 Act Reports.

 

          (xi)      REINSURANCE TREATIES.   All reinsurance and retrocessional

treaties, contracts, agreements and arrangements to which the Insurance

Subsidiary is a party are in full force and effect and the Insurance Subsidiary

is not in violation of, or in default in the performance, observance or

fulfillment of, any obligation, agreement, covenant or condition contained

therein, with such exceptions that would not, singularly or in the aggregate,

have a Material Adverse Effect; and no Insurance Subsidiary has received any

notice from any of the other parties to such treaties, contracts, agreements

or arrangements that such other party intends not to perform thereunder; and,

to the best knowledge of the Company, none of the other parties to such

treaties, contracts, agreements or arrangements will be unable to perform

thereunder except to the extent adequately and properly reserved for in the

consolidated financial statements of the Company, with such exceptions that

would not, singularly or in the aggregate, have a Material Adverse Effect.

 

          (xii)     GOOD STANDING OF THE COMPANY.   The Company has been duly

organized and is validly existing as a corporation in good standing under the

laws of the State of Oklahoma and has full power and authority under such laws

to own, lease and operate its properties and to conduct its business, to enter

into and perform its obligations under each of the Operative Documents to which

it is a party, and to issue the Subordinated Debt Securities.  

 

          (xiii)    GOOD STANDING OF THE SUBSIDIARIES.   Each "significant

subsidiary" (as defined in Rule 1-02 of Regulation S-X) of the Company (a

"Significant Subsidiary") and the Insurance Subsidiary has been duly organized

and is validly existing as an entity in good standing under the laws of the

jurisdiction in which it is chartered and has full power and authority under

such laws to own, lease and operate its properties and to conduct its current

and contemplated business.  

 

          (xiv)     FOREIGN QUALIFICATIONS.   Each of the Company and its

subsidiaries is duly qualified as a foreign entity to transact business and is

each in good standing in each jurisdiction in which such qualification is

required, whether by reason of the ownership or leasing of property or the

conduct of business, except where the failure to be so qualified would not

singularly, or in the aggregate, in the reasonable judgment of the Company, be

expected to result in a Material Adverse Effect.

 

          (xv)      CAPITAL STOCK DULY AUTHORIZED AND VALIDLY ISSUED.   All of

the issued and outstanding capital stock of the Company has been duly

authorized and validly issued and is fully paid and nonassessable; all of the

issued and outstanding capital stock of each subsidiary of the Company has been

duly authorized and validly issued, is fully paid and nonassessable and is

owned by the Company, directly or through subsidiaries, free and clear of any

security interest, mortgage, pledge, lien, encumbrance, claim or equitable

right; and none of the issued and outstanding capital stock of the Company or

its Significant Subsidiaries was

 

<PAGE>

                                                                        PAGE 6

 

issued in violation of any preemptive or similar rights arising by operation of

law, under the charter, by-laws or code of regulations of the Company or any of

its Significant Subsidiaries or under any agreement to which the Company or any

of its Significant Subsidiaries is a party.

 

          (xvi)     GOOD STANDING OF THE TRUST.   The Trust has been duly created

and is validly existing in good standing as a statutory trust under the

Delaware Act with the power and authority to own property and to conduct its

business as provided in the Declaration, to enter into and perform its

obligations under the Operative Documents to which it is a party, and to issue

the Capital Securities and the Common Securities; the Trust is not a party to

or otherwise bound by any agreement other than the Operative Documents to which

it is a party; and the Trust is, and will be, under current law, classified for

United States federal income tax purposes as a grantor trust and not as an

association taxable as a corporation.

 

          (xvii)    AUTHORIZATION OF COMMON SECURITIES.   On the Closing Date,

the Common Securities will have been duly authorized for issuance by the Trust

pursuant to the Declaration and, when duly issued and executed in accordance

with the Declaration and delivered by the Trust to the Company against payment

therefor in accordance with the subscription agreement therefor, will be

validly issued and fully paid and nonassessable undivided common beneficial

ownership interests in the assets of the Trust; the issuance of the Common

Securities is not subject to preemptive or other similar rights; and on the

Closing Date, all of the issued and outstanding Common Securities of the Trust

will be owned directly by the Company, free and clear of any security interest,

mortgage, pledge, lien, encumbrance, claim or equitable right.

 

          (xviii)   AUTHORIZATION OF CAPITAL SECURITIES.   On the Closing Date,

the Capital Securities will have been duly authorized for issuance by the Trust

pursuant to the Declaration and, when duly issued, executed and authenticated

in accordance with the Declaration and delivered by the Trust against payment

therefor as provided herein and in the Subscription Agreement, will be validly

issued and fully paid and nonassessable undivided preferred beneficial

ownership interests in the assets of the Trust; the issuance of the Capital

Securities will not be subject to preemptive or other similar rights; and t

he Capital Securities will be in the form contemplated by, and entitled to the

benefits of, the Declaration.

 

          (xix)     AUTHORIZATION OF SUBSCRIPTION AGREEMENT.   The Subscription

Agreement has been duly authorized, executed and delivered by each of the

Offerors, and assuming due authorization, execution and delivery of the

Subscription Agreement by the Purchaser, the Subscription Agreement will

constitute a valid, legal and binding agreement of each of the Offerors,

enforceable against each of the Offerors in accordance with its terms, except

to the extent that enforceability may be limited by (a) bankruptcy, insolvency,

reorganization, moratorium, fraudulent conveyance or other similar laws now or

hereafter in effect relating to creditors' rights generally and (b) general

principles of equity (regardless of whether enforceability is considered in a

proceeding at law or in equity) (collectively, the "Enforceability Exceptions").

 

          (xx)      AUTHORIZATION OF THIS AGREEMENT.   This Agreement has been

duly authorized, executed and delivered by each of the Offerors and assuming

the due authorization, execution and delivery of this Agreement by the

Placement Agent, this Agreement will constitute

 

<PAGE>

                                                                         PAGE 7

 

a valid, legal and binding agreement of the Company, enforceable against the

Company in accordance with its terms except to the extent that enforceability

may be limited by the Enforceability Exceptions.

 

          (xxi)     AUTHORIZATION OF DECLARATION.   The Declaration has been duly

authorized by the Company and, on the Closing Date, will have been duly

executed and delivered by the Company and the Administrators, and assuming

due authorization, execution and delivery of the Declaration by the

Institutional Trustee and the Delaware Trustee, the Declaration will constitute

a valid, legal and binding agreement of the Company, enforceable against the

Company in accordance with its terms, except to the extent that enforceability

may be limited by the Enforceability Exceptions.

 

          (xxii)    AUTHORIZATION OF GUARANTEE AGREEMENT.   The Guarantee

Agreement has been duly authorized by the Company and, on the Closing Date,

will have been duly executed and delivered by the Company, and assuming due

authorization, execution and delivery of the Guarantee Agreement by the

Guarantee Trustee, the Guarantee Agreement will constitute a valid, legal and

binding agreement of the Company, enforceable against the Company in accordance

with its terms, except to the extent that enforceability may be limited by the

Enforceability Exceptions.

 

          (xxiii)   AUTHORIZATION OF INDENTURE.   The Indenture has been duly

authorized by the Company and, on the Closing Date, will have been duly

executed and delivered by the Company, and assuming due authorization,

execution and delivery of the Indenture by the Indenture Trustee, the Indenture

will constitute a valid, legal and binding agreement of the Company,

enforceable against the Company in accordance with its terms, except to the

extent that enforceability may be limited by the Enforceability Exceptions.

 

          (xxiv)    AUTHORIZATION OF SUBORDINATED DEBT SECURITIES.   The

Subordinated Debt Securities have been duly authorized by the Company; on the

Closing Date, the Subordinated Debt Securities will have been duly executed by

the Company and, when authenticated in the manner provided for in the Indenture

and delivered by the Company to the Trust against payment therefor as

contemplated in the subscription agreement therefor, will constitute valid,

legal and binding obligations of the Company, enforceable against the Company

in accordance with their terms, except to the extent that enforceability may be

limited by the Enforceability Exceptions; the Subordinated Debt Securities will

be in the form contemplated by, and entitled to the benefits of, the Indenture;

and the Company has no present intention to exercise its option to defer

payments of interest on the Subordinated Debt Securities as provided in the

Indenture.

 

          (xxv)     AUTHORIZATION OF ADMINISTRATORS.   Each of the Administrators

of the Trust is an officer or employee of the Company or one of its

subsidiaries and has been duly authorized by the Company to execute and deliver

the Declaration.

 

          (xxvi)    NOT AN INVESTMENT COMPANY.   Neither the Trust nor the

Company is, and immediately following consummation of the transactions

contemplated hereby and the application of the net proceeds therefrom neither

the Trust nor the Company will be, an "investment company" or an entity

"controlled" by an "investment company", in each case

 

<PAGE>

                                                                         PAGE 8

 

within the meaning of Section 3(a) of the Investment Company Act of 1940, as

amended (the "1940 Act"), without regard to Section 3(c) of the 1940 Act.

 

          (xxvii)   ABSENCE OF DEFAULTS AND CONFLICTS.   The Trust is not in

violation of the trust certificate of the Trust filed with the State of

Delaware (the "Trust Certificate") or the Declaration, and neither the Company

nor any of its Significant Subsidiaries or Insurance Subsidiaries is in

violation of its charter, by-laws or code of regulations; except as set forth

in Schedule 1(a)(xxv) attached hereto, none of the Trust, the Company or any

subsidiary of the Company is in default in the performance or observance of any

obligation, agreement, covenant or condition contained in any contract,

indenture, mortgage, deed of trust, loan or credit agreement, note, lease or

other agreement or instrument to which it is a party or by which it or any of

them may be bound or to which any of its properties or assets is subject

(collectively, "Agreements and Instruments"), except for such defaults under

Agreements and Instruments that, in the reasonable judgment of the Company, are

not expected to result in a Material Adverse Effect; and the execution,

delivery and performance of the Operative Documents by the Trust or the

Company, as the case may be, the issuance, sale and delivery of the Capital

Securities and the Subordinated Debt Securities, the consummation of the

transactions contemplated by the Operative Documents, and compliance by the

Trust and the Company with the terms of the Operative Documents to which they

are a party have been duly authorized by all necessary corporate action on the

part of the Company and, on the Closing Date, will have been duly authorized by

all necessary action on the part of the Trust and do not and will not, whether

with or without the giving of notice or passage of time or both, violate,

conflict with or constitute a breach of, or default or Repayment Event (as

defined below) under, or result in the creation or imposition of any, security

interest, mortgage, pledge, lien, charge, encumbrance, claim or equitable right

upon any properties or assets of the Trust or the Company or any of its

Significant Subsidiaries or Insurance Subsidiaries pursuant to any of the

Agreements and Instruments, nor will such action result in any violation of the

provisions of the charter, by-laws or code of regulations of the Company or any

of its Significant Subsidiaries or Insurance Subsidiaries or the Declaration or

the Trust Certificate, or violation by the Company or any of its Significant

Subsidiaries or Insurance Subsidiaries of any applicable law, statute, rule,

regulation, judgment, order, writ or decree of any government, government

authority, agency (including, without limitation, each applicable Regulatory

Agency) or instrumentality or court, domestic or foreign, having jurisdiction

over the Trust or the Company or any of its Significant Subsidiaries or

Insurance Subsidiaries or their respective properties or assets (collectively,

"Governmental Entities").   As used herein, a "Repayment Event" means any event

or condition which gives the holder of any note, debenture or other evidence of

indebtedness (or any person acting on such holder's behalf) the right to

require the repurchase, redemption or repayment of all or a portion of such

indebtedness by the Trust or the Company or any of its Significant Subsidiaries

or Insurance Subsidiaries prior to its scheduled maturity.

 

          (xxviii) ABSENCE OF LABOR DISPUTE.   No labor dispute with the

employees of the Company or any of its subsidiaries exists or, to the knowledge

of the executive officers of the Company, is imminent, which, in the reasonable

judgment of the Company, is expected to result in a Material Adverse Effect.

 

          (xxix)    ABSENCE OF PROCEEDINGS.   There is no action, suit,

proceeding, inquiry or investigation (including, without limitation, any action

to revoke or deny renewal of

 

<PAGE>

                                                                         PAGE 9

 

any Insurance License (as defined in paragraph (xxxi) below)) before or brought

by any Governmental Entity, now pending, or, to the knowledge of the Trust or

the Company, threatened, against or affecting the Trust or the Company or any

of its subsidiaries, which, in the reasonable judgment of the Trust or the

Company is expected to result in a Material Adverse Effect or materially and

adversely affect the consummation of the transactions contemplated by the

Operative Documents or the performance by the Trust or the Company of its

obligations hereunder or thereunder; and the aggregate of all pending legal or

governmental proceedings to which the Trust or the Company or any of its

subsidiaries is a party or of which any of their respective properties or

assets is the subject, including ordinary routine litigation incidental to the

business, are not, in the reasonable judgment of the Company or the Trust,

expected to result in a Material Adverse Effect.

 

          (xxx)     ABSENCE OF FURTHER REQUIREMENTS.   No filing with, or

authorization, approval, consent, license, order, registration, qualification

or decree of, any Governmental Entity, other than those that have been made or

obtained, is necessary or required for the authorization, execution, delivery

or performance by the Trust or the Company of their respective obligations

under the Operative Documents, the Subordinated Debt Securities or the Capital

Securities, as applicable, or the consummation by the Trust or the Company of

the transactions contemplated by the Operative Documents.

 

          (xxxi)    POSSESSION OF LICENSES AND PERMITS.   Each of the Trust, the

Company and the subsidiaries of the Company, other than the Insurance

Subsidiary, possesses such permits, orders, certificates, licenses, approvals,

consents and other authorizations   (collectively, "Governmental Licenses")

issued by the appropriate Governmental Entities necessary to conduct the

business now operated by it, with such exceptions that would not, in the

reasonable judgment of the Company, be expected to, singularly or in the

aggregate, have a Material Adverse Effect; the Insurance Subsidiary is duly

licensed or authorized (including, without limitation, from its applicable

State Regulatory Authority) as an insurer in each jurisdiction where it is

required to be so licensed or authorized to conduct its business (collectively

"Insurance Licenses"), with such exceptions that would not, in the reasonable

judgment of the Company, be expected to, singularly or in the aggregate, have a

Material Adverse Effect; each of the Trust, the Company and the subsidiaries of

the Company is in compliance with the terms and conditions of all of its

Governmental Licenses and Insurance Licenses, as applicable, except where the

failure so to comply, in the reasonable judgment of the Company, is not

expected to, singularly or in the aggregate, have a Material Adverse Effect;

all of the Governmental Licenses and Insurance Licenses are valid and in full

force and effect, except when the invalidity of such Governmental Licenses or

Insurance Licenses or the failure of such Governmental Licenses or Insurance

Licenses to be in full force and effect, in the reasonable judgment of the

Company, is not expected to have a Material Adverse Effect; and none of the

Trust, the Company or any subsidiary of the Company has received any notice of

proceedings, and to the knowledge of the Trust or the Company there has been no

threatened action, suit, proceeding or investigation, relating to the

revocation, termination, suspension or modification of any such Governmental

Licenses or Insurance Licenses which, singularly or in the aggregate, in the

reasonable judgment of the Company or the Trust, is expected to result in a

Material Adverse Effect.

 

<PAGE>

                                                                        PAGE 10

 

          (xxxii)   TITLE TO PROPERTY.   Each of the Trust, the Company and the

subsidiaries of the Company has good and marketable title to all of its

respective real and personal properties, in each case free and clear of all

liens, encumbrances and defects, except such as, in the reasonable judgment of

the Trust or the Company, singularly or in the aggregate, are not expected to

result in a Material Adverse Effect; and all of the leases and subleases under

which the Trust, the Company or any subsidiary of the Company holds properties

are in full force and effect, except when the failure of such leases and

subleases to be in full force and effect, in the reasonable judgment of the

Company, singularly or in the aggregate, is not expected to have a Material

Adverse Effect, and none of the Trust, the Company or any subsidiary of the

Company has any notice of any claim of any sort that has been asserted by

anyone adverse to the rights of the Trust, the Company or any subsidiary of the

Company under any of the leases or subleases under which the Trust, the Company

or any subsidiary of the Company holds properties, or affecting or questioning

the rights of such entity to the continued possession of the leased or

subleased premises under any such lease or sublease, except when such claim, in

the reasonable judgment of the Company, singularly or in the aggregate, is not

expected to have a Material Adverse Effect.

 

          (xxxiii) STABILIZATION.   The Company has not taken and will not take,

directly or indirectly, any action designed to, or that might be reasonably

expected to, cause or result in stabilization or manipulation of the price of

the Capital Securities.

 

          (xxxiv)   NO GENERAL SOLICITATION.   Neither the Trust or the Company

nor any of their Affiliates (as defined in Rule 501(b) under the 1933 Act) or

any person acting on its or any of their behalf (other than the Placement

Agent, as to whom the Offerors make no representation) has engaged or will

engage, in connection with the offering of the Capital Securities, in any form

of general solicitation or general advertising within the meaning of Rule

502(c) under the 1933 Act.

 

          (xxxv)    NO DIRECTED SELLING EFFORTS.   Neither the Trust or the

Company nor any of their Affiliates or any person acting on its or any of

their behalf (other than the Placement Agent, as to whom the Offerors make no

representation) has engaged or will engage in any directed selling efforts

within the meaning of Regulation S under the 1933 Act ("Regulation S") with

respect to the offering of the Capital Securities.

 

          (xxxvi)   NO REGISTRATION.   Subject to compliance by the Placement

Agent with the relevant provisions of Section 6 hereof, it is not necessary in

connection with the offer, sale and delivery of the Capital Securities by the

Trust in the manner contemplated by this Agreement to register the Capital

Securities, the guarantee as described in the Guarantee Agreement or the

Subordinated Debt Securities under the 1933 Act or to qualify the Declaration,

the Guarantee Agreement or the Indenture under the Trust Indenture Act of 1939,

as amended.

 

     (b)   Any certificate signed by any Trustee of the Trust or any duly

authorized officer of the Company or any of its subsidiaries and delivered to

the Placement Agent or to counsel for the Placement Agent shall be deemed a

representation and warranty by the Trust or the Company, as the case may be, to

the Placement Agent as to the matters covered thereby.

 

     SECTION 2.   SALE AND DELIVERY THROUGH PLACEMENT AGENT; CLOSING.

                 --------------------------------------------------

 

<PAGE>

                                                                        PAGE 11

 

     (a)   The Offerors propose to issue and sell the Capital Securities on

December 16, 2003 (or such other date mutually agreed to by the Offerors and

the Placement Agent) (the "Closing Date") to InCapS Funding II, Ltd., a newly

formed company with limited liability incorporated under the laws of the Cayman

Islands (the "Purchaser"), pursuant to the terms of the Capital Securities

Subscription Agreement, entered into on the date hereof (the "Subscription

Agreement"), between the Offerors and the Purchaser.   In addition, the Offerors

agree that the Purchaser shall be entitled to the benefit of, and to rely on,

the provisions of this Agreement to the extent such provisions address or

relate to the Purchaser or the Capital Securities to be purchased by the

Purchaser.

 

     (b)   The Offerors hereby grant to the Placement Agent the exclusive right

to arrange the placement of the Capital Se