UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): August 20, 2008
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JACOBS FINANCIAL GROUP, INC.
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(Exact name of Registrant as specified in its charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-21210 84-0922335
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(Commission File Number) (I.R.S. Employer Identification Number)
300 Summers Street, Suite 970, Charleston, West Virginia 25301
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(Address of Principal Executive Offices) (Zip Code)
(304) 343-8171
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(Registrant's Telephone Number, Including Area Code)
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(Former name, former address and former fiscal year,
if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
Item 1.01 Entry into a Material Definitive Agreement
On August 20, 2008, the Registrant entered into a definitive Stock Purchase
Agreement (the "Purchase Agreement") with National Indemnity Company ("NICO"),
pursuant to which the Registrant agreed to acquire 100% of the outstanding stock
of Unione Italiana Reinsurance Company of America ("Unione"). Unione is a New
York domiciled insurer licensed in 24 states and has license applications
pending with the Commonwealth of Kentucky and with the Financial Management
Service of the United States Department of Treasury. The purchase price for the
acquisition of Unione (the "Transaction") is equal to the sum of (i) $2,750,000
plus (ii) an amount in cash equal to Unione's New York statutory policyholders'
surplus as of the closing date of the Transaction (the "Closing") less (iii)
$75,000 (which amount is equal to a good faith deposit previously provided to
NICO (the "Deposit")). Based on the Statutory Statements of the condition and
affairs of Unione, as filed with the New York Insurance Department for the
period ended December 31, 2007, Unione's New York Statutory policyholders'
surplus was equal to approximately $36.3 million.
Contemporaneous with the Closing, NICO and Unione have agreed to enter into a
100% Quota Share Reinsurance Agreement in the form attached as Exhibit A to the
Purchase Agreement (the "Reinsurance Agreement") pursuant to which NICO will
reinsure Unione for all liabilities of Unione under insurance and reinsurance
contracts issued on or prior to the Closing and expenses relating thereto.
Pursuant to the Purchase Agreement, NICO has agreed to indemnify the Registrant
from and against all liabilities of any kind whatsoever of Unione incurred or
arising with respect to periods prior to Closing.
The Closing is subject to certain conditions, including (i) consent of the New
York Insurance Department regarding the change in ownership of Unione and (ii)
consent of the New York Insurance Department and the Nebraska Insurance
Department regarding the execution and delivery of the Reinsurance Agreement.
Additionally, the Purchase Agreement requires the Registrant to deliver a
certificate by October 15, 2008 to the effect that the Registrant has sufficient
funds available to consummate the Transaction. Among other rights of
termination, in the event that the Registrant fails to deliver such certificate
by October 15, 2008, NICO may terminate the Purchase Agreement, and either party
may terminate the Purchase Agreement if the Closing does not take place on or
prior to December 31, 2008. The Purchase Agreement provides that, except in the
case of a willful breach by the Registrant, if the Purchase Agreement is
terminated by NICO as a result of the Registrant's failure to deliver the
financing certificate by October 15, 2008 or if the Closing shall not occur by
December 31, 2008, NICO may retain the Deposit as liquidated damages, and the
Deposit shall be the exclusive remedy of NICO against the Registrant.
There can be no assurance that the Registrant will be able to secure the
necessary financing to consummate the Transaction.
The foregoing summary of the Purchase Agreement is qualified in all respects by
the Purchase Agreement attached hereto as Exhibit 10.1, which is incorporated
herein by reference. The foregoing summary of the Reinsurance Agreement is
qualified in all respects by the form of Reinsurance Agreement attached hereto
as Exhibit 10.2, which is incorporated herein by reference.
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SECTION 9. FINANCIAL STATEMENTS & EXHIBITS
(d) Exhibits
10.1 Stock Purchase Agreement
10.2 Reinsurance Agreement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Jacobs Financial Group, Inc.
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(Registrant)
/s/ John M. Jacobs
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Date: August 26, 2008 John M. Jacobs
President
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