Exhibit 10.5
EXECUTION COPY
ASSIGNMENT AND ASSUMPTION AND AMENDMENT AGREEMENT, dated as of April
5, 2006 (the "Assignment and Assumption Agreement"), among HealthMarkets, LLC
(the "Company"), HealthMarkets Capital Trust I ("Trust I"), HeathMarkets Capital
Trust II ("Trust II" and collectively with Trust I, the "Trusts"), Premium
Finance LLC, Mulberry Finance Co., Inc., and DLJMB IV First Merger LLC (each
individually, an "Acquisition Company" and collectively, the "Acquisition
Companies") and First Tennessee Bank National Association ("FTN"), Merrill Lynch
International ("MLI") and ALESCO Preferred Funding X, Ltd. ("ALESCO" and
together with FTN and MLI, each a "Purchaser" and collectively, the
"Purchasers").
WHEREAS, the Acquisition Companies, MLI and FTN have heretofore
entered into a Purchase Agreement dated as of March 7, 2006 (the "Purchase
Agreement"); capitalized terms not otherwise defined herein shall have the
meanings set forth in the Purchase Agreement;
WHEREAS, MLI has assigned its rights and obligations with respect to
$23.5 million of the Preferred Securities to ALESCO and ALESCO has assumed from
MLI, all the rights and obligations of MLI with respect to $23.5 million of the
Preferred Securities;
WHEREAS, as part of the Transactions, the Acquisition Companies will
assign to the Company and the Trusts, and the Company and the Trusts will assume
from the Acquisition Companies, all of the rights and obligations of the
Acquisition Companies under the Purchase Agreement (other than the obligations
of the Acquisition Companies under Sections 7(b) and (c) of the Purchase
Agreement);
WHEREAS, the Acquisition Companies desire to obtain the written
consent of the Purchasers to such assignment and assumption, and the Purchasers
desire to grant such consent;
NOW, THEREFORE, in consideration of the mutual agreements and subject
to the terms and conditions set forth herein, the parties hereto agree as
follows:
ARTICLE I
ASSIGNMENT AND ASSUMPTION
1.1. With effect on and as of the date hereof (the "Effective Date")
the Acquisition Companies hereby expressly assign and delegate all of their
rights, interests and obligations under the Purchase Agreement, other than their
obligations under Sections 7(b) and (c) of the Purchase Agreement, to the
Company and the Trusts.
1.2. The Company and the Trusts hereby accept such assignment and
delegation and expressly assume all of the Acquisition Companies' rights,
interests and obligations under the Purchase Agreement, other than the
Acquisition Companies' obligations under Sections 7(b) and (c) of the Purchase
Agreement, on and as of the Effective Date.
1.3. The Purchasers hereby consent to the assignment and delegation
by the Acquisition Companies of all of their rights, interests and obligations
under the Purchase
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Agreement, other than their obligations under Sections 7(b) and (c) of the
Purchase Agreement, to the Company and the Trusts on and as of the Effective
Date.
1.4. The Acquisition Companies are hereby released from all of their
obligations under the Purchase Agreement, other than their obligations under
Sections 7(b) and (c) of the Purchase Agreement, and shall have no further
liabilities or obligations under the Purchase Agreement except as set forth in
Sections 7(b) and (c) of the Purchase Agreement.
ARTICLE II
AMENDMENTS AND WAIVERS
2.1 All references in the Purchase Agreement to the Trust are
hereby amended to refer to the Trusts.
2.2 All references in the Purchase Agreement to the Notes are
hereby amended to refer to the $51,550,000 aggregate principal amount of
Floating Rate Junior Subordinated Notes due 2036 sold to Trust I and the
$51,550,000 aggregate principal amount of Floating Rate Junior Subordinated
Notes due 2036 (the "Notes II") sold to Trust II.
2.3 All references in the Purchase Agreement to the Preferred
Securities are hereby amended to refer to the $50,000,000 aggregate stated
liquidation amount of the Preferred Securities of Trust I and the $50,000,000
aggregate stated liquidation amount of the Preferred Securities of Trust II and
all references to the Common Securities are hereby amended to refer to the
$1,550,000 aggregate stated liquidation amount of Common Securities of Trust I
and the $1,550,000 aggregate stated liquidation amount of Common Securities of
Trust II.
2.4 All references in the Purchase Agreement to the Indenture are
hereby amended to refer to the Junior Subordinated Indenture relating to the
Notes being sold to Trust I, between the Company and LaSalle Bank National
Association, as indenture trustee, and the Junior Subordinated Indenture
relating to the Notes II being sold to Trust II, between the Company and LaSalle
Bank National Association, as indenture trustee.
2.5 All references in the Purchase Agreement to the Trust Agreement
are hereby amended to refer to the Amended and Restated Trust Agreement of Trust
I, among the Company, as depositor, the administrative trustees of Trust I named
therein, LaSalle Bank National Association, as indenture trustee, and Christiana
Bank & Trust Company, as Delaware trustee, and the holders, from time to time,
of undivided beneficial interests in the assets of Trust I, and the Amended and
Restated Trust Agreement of Trust II, among the Company, as depositor, the
administrative trustees of Trust II named therein, LaSalle Bank National
Association, as indenture trustee, and Christiana Bank & Trust Company, as
Delaware trustee, and the holders, from time to time, of undivided beneficial
interests in the assets of Trust II.
2.6 All references in the Purchase Agreement to the Guarantee
Agreement are hereby amended to refer to the Guarantee Agreement relating to
Trust I, between the Company, as guarantor, and LaSalle Bank National
Association, as guarantee trustee, and the Guarantee Agreement relating to Trust
II, between the Company, as guarantor, and LaSalle Bank National Association, as
guarantee trustee.
2.7 All references in the Purchase Agreement to the Common
Securities Subscription Agreement are hereby amended to refer to the Common
Securities Subscription
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Agreement between the Company and Trust I and the Common Securities Subscription
Agreement between the Company and Trust II.
2.8 All references in the Purchase Agreement to the Note Purchase
Agreement are hereby amended to refer to the Junior Subordinated Note Purchase
Agreement between the Company and Trust I and the Junior Subordinated Note
Purchase Agreement between the Company and Trust II.
2.9 The first sentence of Section 2(a) to the Purchase Agreement is
hereby amended to read: "The Sellers shall sell to each Purchaser, and each
Purchaser shall purchase from the Sellers, the amount of Preferred Securities
set forth below for an aggregate amount (the "Purchase Price") equal to One
Hundred Million Dollars ($100,000,000): 1) FTN shall purchase $20.0 million of
the Preferred Securities from Trust I and $20.0 million of the Preferred
Securities from Trust II; 2) MLI shall purchase $30.0 million of the Preferred
Securities from Trust I and $6.5 million of the Preferred Securities from Trust
II; and 3) ALESCO shall purchase $23.5 million of the Preferred Securities from
Trust II."
2.10 The second and third references to "Texas" in Section 4(x) of
the Purchase Agreement are hereby amended to read "Oklahoma".
2.11 The Purchasers waive the requirement of Section 3(h)(iii)(A) of
the Purchase Agreement that the rating referred to in such Section (which rating
was obtained on March 8, 2006) be obtained at least 45 days prior to the Closing
Date.
2.12 All references in the Purchase Agreement to JPMorgan Chase
Bank, National Association are hereby amended to refer to LaSalle Bank National
Association and all references in the Purchase Agreement to Chase Bank USA,
National Association are hereby amended to refer to Christiana Bank & Trust
Company.
2.13 The references to Richards, Layton & Finger, P.A. in Section
3(e), Section 3(g) and Section 7 of the Purchase Agreement and the reference to
Gardere Wynne Sewell LLP in Section 3(f) of the Purchase Agreement shall each be
amended to refer to Morris, James, Hitchens & Williams LLP.
2.14 Annex C of Section 3(e), Annex D of Section 3(f) and Annex E of
Section 3(g) of the Purchase Agreement are hereby replaced by Annex A, Annex B
and Annex C respectively, of this Assignment and Assumption Agreement.
ARTICLE III
MISCELLANEOUS
3.1 Each of the parties to this Assignment and Assumption Agreement
represents and warrants that (a) this Assignment and Assumption Agreement has
been duly authorized, executed and delivered by it, and (b) its obligations
under this Assignment and Assumption Agreement and the Purchase Agreement
constitute its legal, valid and binding obligations, enforceable against it in
accordance with their respective terms (subject to applicable bankruptcy,
insolvency or similar rights affecting creditors' rights generally).
3.2 This Assignment and Assumption Agreement shall be governed by
and construed in accordance with the laws of the State of New York.
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3.3 This Assignment and Assumption Agreement may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all of which counterparts together shall constitute but one and
the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be duly executed as of the day and year first above
written.
HEALTHMARKETS, LLC
By: UICI, its sole member
By: /s/ Glenn W. Reed
_________________________________
Name: Glenn W. Reed
Title: Executive Vice President and
General Counsel
HEALTHMARKETS CAPITAL TRUST I
By: HEALTHMARKETS, LLC, as Depositor
By: UICI, its sole member
By: /s/ Glenn W. Reed
_________________________________
Name: Glenn W. Reed
Title: Executive Vice President and
General Counsel
HEALTHMARKETS CAPITAL TRUST II
By: HEALTHMARKETS, LLC, as Depositor
By: UICI, its sole member
By: /s/ Glenn W. Reed
_________________________________
Name: Glenn W. Reed
Title: Executive Vice President and
General Counsel
ASSIGNMENT AND ASSUMPTION AGREEMENT
PREMIUM FINANCE LLC
By: Blackstone Management Associates
IV L.L.C., as a Member
/s/ Chinh E. Chu
_________________________________
Name: Chinh E. Chu
Title: Member
ASSIGNMENT AND ASSUMPTION AGREEMENT
MULBERRY FINANCE CO., INC.
/s/ Adrian M. Jones
_________________________________
Name: Adrian M. Jones
Title: President
ASSIGNMENT AND ASSUMPTION AGREEMENT
DLJMB IV FIRST MERGER LLC
By: MBP IV PLAN INVESTORS, L.P.,
a Member
By: DLJ LBO plans, Management
Corporation, its General Partner
/s/ Kamil M. Salame
_________________________________
Name: Kamil M. Salame
Title: Managing Director
ASSIGNMENT AND ASSUMPTION AGREEMENT
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By: /s/ David S. Work
___________________________________
Name: David S. Work
Title: Executive Vice President
ASSIGNMENT AND ASSUMPTION AGREEMENT
MERRILL LYNCH INTERNATIONAL
By: /s/ Andrew Bellis
___________________________________
Name: Andrew Bellis
Title: Director
ASSIGNMENT AND ASSUMPTION AGREEMENT
ALESCO PREFERRED FUNDING X, LTD.
By: /s/ Michael Shenkman
___________________________________
Name: Michael Shenkman
Title: Chief Financial Officer
ASSIGNMENT AND ASSUMPTION AGREEMENT