Exhibit 10.01
PLACEMENT AGREEMENT
among
QUANTA CAPITAL STATUTORY TRUST II,
Issuer
QUANTA CAPITAL HOLDINGS LTD.,
Sponsor
and
COHEN BROS. & COMPANY
Placement Agent
Dated as of February 22, 2005
PLACEMENT AGREEMENT, dated as of February 22, 2005 (this
"Agreement"),
among Quanta Capital Statutory Trust II, a statutory trust created
under the
laws of the State of Delaware (the "Issuer"), Quanta Capital
Holdings Ltd., a
Bermuda corporation, as Sponsor under the Declaration, as defined
below (the
"Sponsor" and, together with the Issuer, the "Trust Parties"), and
Cohen Bros. &
Company, as placement agent (the "Placement Agent").
WHEREAS, the Issuer proposes to issue U.S. $20,000,000 Trust
Preferred
Securities Due June 15, 2035 (the "Securities");
WHEREAS, the Securities will be issued pursuant to an Amended and
Restated
Declaration of Trust to be dated as of February 24, 2005 (the
"Declaration"),
among Quanta Capital Holdings Ltd., as Sponsor, JPMorgan Chase
Bank, N.A., as
Institutional Trustee, Chase Manhattan Bank USA, National
Association, as
Delaware Trustee, and the Administrators named therein;
WHEREAS, the Issuer has agreed not later than the February 24, 2005
("Closing Date"), to provide the Placement Agent with a copy of the
Declaration
and any other documents required to be delivered pursuant to the
terms hereof or
the Declaration;
WHEREAS, the Issuer will use the proceeds from the sale of the
Securities
to purchase Debentures (as defined in the Declaration); and
WHEREAS, capitalized terms used herein but not otherwise defined
herein
shall have the meaning ascribed thereto in the Declaration;
NOW IT IS HEREBY AGREED as follows:
1. PLACEMENT OF SECURITIES; COMPENSATION.
(a) On the terms and subject to the conditions of this Agreement
and
in reliance upon the representations and warranties herein set
forth, the Issuer
hereby appoints the Placement Agent as placement agent to place
Securities, and
the Placement Agent hereby accepts such appointment. From the date
hereof until
any termination of the Placement Agent's obligations hereunder, the
Placement
Agent shall use its reasonable efforts to place Securities with
investors
permitted by the terms hereof.
(b) The Securities shall be issued and sold free from all liens,
charges and encumbrances, equities and other third party rights of
any nature
whatsoever, together with all rights of any nature.
(c) As compensation for the placement services to be provided by
the
Placement Agent hereunder, the Issuer shall pay to the Placement
Agent a fee in
an amount as agreed upon between the Issuer and the Placement
Agent. Following
payment in full to the Placement Agent of all fees earned
hereunder, the Issuer
shall have no further obligation hereunder to the Placement Agent
with respect
to any fee. Such fees shall be due and payable upon sale and
issuance of the
Securities. The Issuer shall have no obligation to pay any fees
with respect to
any placement of the Securities which is not completed. No fee
payable to any
other
placement agent by the Issuer or any other entity shall reduce or
otherwise
affect the fees payable hereunder to the Placement Agent.
2. CLOSING. On the Closing Date, delivery of and payment for the
Securities shall be made at the offices of JPMorgan Chase Bank,
National
Association or Merrill Lynch International, as applicable, and or
such other
location or locations as shall be mutually acceptable to the
parties hereto.
Delivery of the Securities shall be made against payment of the
purchase price
therefor to the order of the Issuer in same day funds by transfer
to an account
designated by the Sponsor or by such other means in same day funds
as shall be
acceptable to the Placement Agent and Sponsor. Such payment shall
be made upon
authorization from the Placement Agent (such authorization to be
given if the
conditions to the Placement Agent's obligations set forth herein
are either
satisfied or waived) against delivery of the Securities. The
Securities will be
in the form requested by the Placement Agent in accordance with the
terms of the
Declaration.
3. PAYMENT OF EXPENSES. The Sponsor agrees to pay all costs and
expenses incident to the performance of the obligations of the
Sponsor and the
Issuer under this Placement Agreement, whether or not the
transactions
contemplated herein are consummated or this Placement Agreement is
terminated,
including all costs and expenses incident to (i) the authorization,
issuance,
sale and delivery of the Securities and any taxes payable in
connection
therewith; (ii) the fees and expenses of qua1ifying the Securities
under the
securities laws of applicable jurisdictions, and (iii) the fees and
expenses of
the counsel, the accountants and any other experts or advisors
retained by the
Sponsor or the Issuer.
Notwithstanding the foregoing, if the sale of the Securities
provided for
in this Placement Agreement is not consummated because any
condition set forth
herein to be satisfied by either the Sponsor or the Issuer is not
satisfied,
because this Placement Agreement is terminated pursuant to Section
10 or because
of any failure, refusal or inability on the part of the Sponsor or
the Issuer to
perform all obligations and satisfy all conditions on its part to
be performed
or satisfied hereunder other than by a reason of a default by the
Placement
Agent, the Sponsor will reimburse the Placement Agent upon demand
for all
reasonable out-of-pocket expenses (including the fees and all
reasonable
expenses of special counsel retained by the Placement Agent, which
fees and
expenses shall not exceed $12,500) that shall have been incurred by
the
Placement Agent in connection with the proposed placement of the
Securities. The
Sponsor shall not in any event be liable to the Placement Agent for
the loss of
anticipated profits from the transactions contemplated by this
Placement
Agreement.
4. REPRESENTATIONS AND WARRANTIES. Each Trust Party hereby
represents,
warrants and agrees to and with the Placement Agent that, as of the
Closing
Date, and as to itself only and not as to the other:
(a) with respect to the Issuer, it is duly formed and validly
existing
under the laws of the State of Delaware and, with respect to the
Sponsor, and
its significant subsidiaries (as defined in Rule 1-02 of Regulation
S-X) (the
"Significant Subsidiaries"), each is duly organized, validly
existing and in
good standing under the laws of the jurisdiction of its
organization, in each
case, with all requisite power and authority to own or transfer, as
applicable,
the Debentures, to conduct its business as required under the
Declaration, this
Agreement or any
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other documents relating to or otherwise in connection with the
issue and sale
of the Securities (collectively, the "Transaction Documents") and
to perform its
obligations hereunder and under each Transaction Document, and is
lawfully
qualified to do business and is in good standing in those
jurisdictions in which
it conducts business and where the failure to be so qualified or in
good
standing would have a material adverse effect on the condition
(financial or
otherwise), earnings or business of such Trust Party, whether or
not occurring
in the ordinary course of business, or would otherwise be material
in context of
the issuance of the Securities ("Material Adverse Effect");
(b) this Agreement has been duly authorized, executed and delivered
by
such Trust Party and constitutes, and each of the Transaction
Documents to which
such Trust Party is a party has been duly authorized by such Trust
Party and,
when duly executed and delivered by the Placement Agent and the
other parties
thereto (if any), on the Closing Date, will constitute, legal,
valid and binding
obligations of such Trust Party, except as such obligations may be
limited by
bankruptcy, insolvency, reorganization and other similar laws
affecting the
rights of creditors generally and the application of general
equitable
principles (regardless of whether the issue of enforceability is
considered in a
proceeding in equity or at law);
(c) neither the Issuer nor the Sponsor nor any of the Significant
Subsidiaries is in breach or violation of, or default under, with
or without
notice or lapse of time or both, its corporate charter, bylaws or
other
governing documents (including without limitation, the
Declaration);
(d) all of the issued and outstanding capital stock of the Sponsor
has
been duly authorized and validly issued and is fully paid and
nonassessable;
(e) all of the issued and outstanding capital stock of each
Significant Subsidiary has been duly authorized and validly issued,
is fully
paid and nonassessable, except to the extent such shares may be
deemed
assessable under 12 U.S.C. Section 1831o or 12 U.S.C. Section 55,
and is owned
by the Sponsor, directly or through subsidiaries, free of any
security interest,
mortgage, pledge, lien, encumbrance, claim or equitable right; and
none of the
issued and outstanding capital stock of the Sponsor or its
Significant
Subsidiaries was 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
Sponsor or any of its Significant Subsidiaries or under any
agreement to which
the Sponsor or any of its Significant Subsidiaries is a party or is
otherwise
bound.
(f) with respect to the Issuer, on the Closing Date, the Securities
have been duly authorized by the Issuer and, when duly executed,
authenticated,
issued and delivered in accordance with the Declaration against
payment therefor
as contemplated herein, will be validly issued and represent
undivided
beneficial interests in the assets of the Issuer, entitled to the
benefits
provided by the Declaration;
(g) with respect to the Issuer, no consent, approval,
authorization,
order, registration or qualification of or with any court or
governmental agency
or body is required for the issue, sale or delivery of the
Securities, except
for those which have been obtained and are in full force and
effect, and no
consent, approval, authorization, order, registration or
qualification
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of or with any court or governmental agency or body is required for
the
consummation of the other transactions contemplated by the
Transaction
Documents, except for those which have been obtained and are in
full force and
effect, and except where the failure to obtain such consent,
approval,
authorization, order, registration or qualification would not have
a Material
Adverse Effect;
(h) the execution and delivery of the Transaction Documents, the
issue
of the Securities and the consummation of the other transactions
contemplated by
the Transaction Documents (and compliance with the terms thereof)
do not and
will not conflict with or result in a breach of any of the terms or
provisions
of, or constitute a default under the organizational documents of
such Trust
Party; and the execution and delivery of the Transaction Documents,
the issue of
the Securities and the consummation of the other transactions
contemplated by
the Transaction Documents (and compliance with the terms thereof)
do not and
will not conflict with or result in a breach of any indenture,
trust deed,
mortgage or other agreement or instrument to which such Trust Party
is a party
or by which it or any of its properties is bound, or infringe any
existing
applicable law, rule, regulation, judgment, order or decree of any
government,
governmental body or court, domestic or foreign, having
jurisdiction over such
Trust Party or any of its properties, except for such conflicts,
breaches,
defaults or infringements that would not have a Material Adverse
Effect;
(i) there are no pending actions, suits or proceedings against or
affecting such Trust Party or any of its properties and, to the
best of such
Trust Party's knowledge, no such suits or proceedings are
threatened or
contemplated that individually or in aggregate could reasonably be
expected to
have a Material Adverse Effect on the Issuer's issuance of the
Securities;
(j) no event has occurred which, had the applicable Securities
already
been issued, would reasonably be expected to (whether or not with
the giving of
notice and/or the passage of time and/or the fulfillment of any
other
requirement) constitute an Event of Default under the Declaration;
(k) the Declaration does not require qualification under the U.S.
Trust Indenture Act of 1939, as amended;
(l) neither the Issuer nor any affiliate of the Issuer nor any
person
acting on behalf thereof has made offers or sales of the Securities
under
circumstances that would require the registration of the Securities
under the
U.S. Securities Act of 1933, as amended (the "Securities Act");
(m) the Issuer is not an "investment company" as defined in the
U.S.
Investment Company Act of 1940, as amended;
(n) with respect to the Issuer, any taxes, fees and other
governmental
charges in connection with the execution and delivery of this
Agreement and any
Transaction Document or the execution, delivery and sale of the
Securities have
been or will be paid on or prior to the Closing Date;
(o) there are no contracts, agreements or understandings between
any
of the Trust Parties or any affiliate thereof and any person
granting such
person the right to require the
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Issuer to file a registration statement under the Securities Act,
with respect
to any Securities owned or to be owned by such person; and
(p) subject to compliance by the Placement Agent with the relevant
provisions of Section 6 hereof, the sale of the Securities pursuant
to this
Agreement is exempt from the registration and prospectus delivery
requirements
of the Securities Act. In the case of each offer or sale of
Securities, no form
of general solicitation or general advertising was used by the
Issuer or its
representatives, including, but not limited to, advertisements,
articles,
notices or other communications published in any newspaper,
magazine or similar
medium or broadcast over television or radio, or any seminar or
meeting whose
attendees have been invited by any general solicitation or general
advertising.
Neither the Issuer nor any person acting on its behalf (other than
the Placement
Agent) has offered or sold, nor will the Issuer or any person
acting on its
behalf (other than the Placement Agent) offer or sell directly or
indirectly,
any Securities or any other security in any manner that, assuming
the accuracy
of the representations and warranties and the performance of the
covenants given
by the Placement Agent, would render the issuance and sale of any
of the
Securities as contemplated hereby a violation of Section 5 of the
Securities Act
or the registration or qualification requirements of any state
securities laws,
nor has the Issuer authorized, nor will it authorize, any person to
act in such
manner.
(q) The audited consolidated financial statements (including the
notes
thereto) and schedules of the Sponsor and its consolidated
subsidiaries for the
year ended December 31, 2003 (the "Financial Statements") and the
interim
unaudited consolidated financial statements of the Sponsor and its
consolidated
subsidiaries for the period ended September 30, 2004 (the "Interim
Financial
Statements") provided to the Placement Agent are the most recent
available
audited and unaudited consolidated financial statements of the
Sponsor and its
consolidated subsidiaries, respectively, and fairly present in all
material
respects, in accordance with generally accepted accounting
principles, the
financial position of the Sponsor and its consolidated
subsidiaries, and the
results of operations and changes in financial condition as of the
dates and for
the periods therein specified, subject, in the case of Interim
Financial
Statements, to year-end adjustments. There has been no material
adverse change
or development with respect to the Interim Financial Statements or
earnings of
the Sponsor and its subsidiaries, taken as a whole. Such
consolidated financial
statements and schedules have been prepared in accordance with
generally
accepted accounting principles consistently applied throughout the
periods
involved (except as otherwise noted therein). The accountants of
the Sponsor who
certified the Financial Statements are independent public
accountants of the
Sponsor and its Subsidiaries within the meaning of the Securities
Act and the
rules and regulations thereunder as in effect on the date of this
Agreement.
(r) The Sponsor's regulatory reports provided to the Placement
Agent
are the most recent available such report and the information
therein fairly
presents in all material respects the financial position of the
Sponsor and its
subsidiaries.
(s) Since the respective dates of the the Interim Financial
Statements
and the regulatory reports there has been no material adverse
change or
development with respect to the financial condition or earnings of
the Sponsor
and its subsidiaries, taken as a whole.
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(t) Neither the Sponsor nor any of its Significant Subsidiaries is
subject to or party to, or has received any notice or advice that
any of them
may become subject to any investigation with respect to, any
agreement, consent
decree or other regulatory enforcement action, proceeding or order
with or by,
or is subject to any directive by, any Regulatory Agency (as
defined below) that
currently restricts in any material respect the conduct of their
business or
that in any material manner relates to their capital adequacy,
their credit
policies or the management or their business (each, a "Regulatory
Agreement"),
nor has the Sponsor or any of its Significant Subsidiaries been
advised by any
Regulatory Agency that it is considering issuing or requesting any
such
Regulatory Agreement that, in the reasonable judgment of the
Sponsor, is
expected to result in a Material Adverse Effect; and there is no
unresolved
violation or criticism by any Regulatory Agent with respect to any
report or
statement relating to any examinations of the Sponsor or any of its
Significant
Subsidiaries which, in the reasonable judgment of the Sponsor, is
expected to
result in a Material Adverse Effect. As used herein, the term
"Regulatory
Agency" means any federal or state agency, or any court,
administrative agency
or commission or other governmental agency, authority or
instrumentality having
supervisory or regulatory authority with respect to the Sponsor or
its
Significant Subsidiaries.
(u) The Sponsor has no present intention to exercise its option to
defer payments of interest on the Debentures as provided in the
Indenture. The
Sponsor believes that the likelihood that it would exercise its
right to defer
payments of interest on the Debentures as provided in the Indenture
at any time
during which the Debentures are outstanding is remote.
5. UNDERTAKINGS BY THE ISSUER. The Issuer agrees with the Placement
Agent as follows:
(a) Neither the Issuer, nor any of its affiliates nor any person
authorized to act on its behalf (other than the Placement Agent),
will engage in
any directed selling efforts with respect to the Securities to any
U.S. Person
except pursuant to an exemption from, or in a transaction not
subject to, the
registration requirements of the Securities Act. Terms used in this
paragraph
have the meanings given to them by Regulation S under the
Securities Act.
(b) Neither the Issuer, nor any of its affiliates nor any person
authorized to act on its behalf (other than the Placement Agent),
will make
offers or sales of Securities under circumstances that would
require the
registration of the Securities under the Securities Act.
(c) For so long as any of the Securities are outstanding and are
"restricted securities" within the meaning of Rule 144, the Issuer
will provide
or cause to be provided to any holder of Securities and any
prospective
purchaser of the Securities designated by such a holder, upon the
request of
such holder or prospective purchaser, the information required to
be provided to
such holder or prospective purchaser by Rule 144A(d)(4).
(d) During the period from the date of this Agreement to the
Closing
Date, the Sponsor and the Issuer shall use their best efforts to
cause their
representations and warranties contained in Section 4 hereof to be
true as of
the Closing Date, after giving effect to the transactions
contemplated by this
Agreement, as if made on and as of the Closing Date.
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(e) The Sponsor and the Issuer will not claim, and will actively
resist any attempts by others to claim, the benefits of any usury
laws against
holders of Capital Securities or the Debentures.
(f) Unless and to the extent re
