EXHIBIT 10.47
SECOND OMNIBUS AGREEMENT
THIS SECOND OMNIBUS AGREEMENT (this "Agreement") dated as of ,
2002 by and among Safety Insurance Group, Inc., a Delaware corporation (the
"Company"), and each of the other parties which are signatories hereto (the
"Securityholders").
WHEREAS, the Company desires to raise funds by issuing and
selling up to 9,200,000 shares (the "Shares") of the common stock of the
Company, par value $0.01 (the "Common Stock") in an underwritten public offering
(the "Offering");
WHEREAS, the parties hereto are parties to an Omnibus
Agreement, dated as of July 1, 2002 (the "First Omnibus Agreement"), the
provisions of which (other than Sections 1 and 7 thereof) became null and void
when the Closing Date (as defined in the First Omnibus Agreement) did not occur
prior to August 31, 2002;
WHEREAS, in connection with the Offering, the Company desires
(i) to amend its Restated Certificate of Incorporation to, among other things,
cause the conversion of all outstanding shares of its 6.0% Series A Cumulative
Redeemable Preferred Stock, par value $0.001 per share (the "Series A Shares")
into shares of its Common Stock and (ii) the prepayment of all the Company's
outstanding 13.0% Senior Subordinated Notes, aggregate principal amount $30.0
million (each, a "Senior Note" and together, the "Senior Notes");
WHEREAS, one of the Securityholders, Fairholme Partners, L.P.
("FPLP"), has agreed to purchase shares of Common Stock directly from the
Company on a non-underwritten basis at the initial public offering price in or
concurrently with the Offering; and
WHEREAS, the Company and the Securityholders desire to enter
into certain other agreements in connection with the Offering.
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and of other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
1. STOCKHOLDER WRITTEN CONSENTS.
(a) FIRST OMNIBUS AGREEMENT. The Securityholders hereby
confirm that Section 1 of the First Omnibus Agreement remains in full force and
effect, and hereby approve and ratify the resolutions set forth in Appendices A
and B thereto with the same force and effect as if adopted at a duly convened
meeting of such Securityholders.
(b) APPROVAL OF THE OMNIBUS PLAN. The Securityholders hereby
waive all notice of time, place and purpose of meeting and consent to and adopt
the resolution set forth in Appendix A hereto pursuant to Section 228(a) of the
Delaware General Corporation Law in lieu of holding a special meeting, with the
same force and effect as if adopted at a duly convened meeting of such
Securityholders.
2. WAIVER OF NOTICE. The Company intends to prepay the Senior
Notes at the date and time of the closing of the Offering, without reference to
the closing of any over-allotment option granted in connection with the Offering
(such date and time, the "Closing Date") or as soon as practicable thereafter
with proceeds from the Offering or from a new bank credit facility to be entered
into concurrently with the Offering. Each Securityholder which holds Senior
Notes hereby waives written notice of any such prepayment under Section 4.3 of
the Purchase Agreement dated as of October 15, 2001 between the Company and JZ
Equity Partners plc ("JZEP").
3. STOCKHOLDERS AGREEMENT.
(a) NO PREEMPTIVE RIGHTS. The Securityholders hereby
acknowledge and agree that any preemptive or other similar rights they may have
under Section 5.5 of the Stockholders Agreement, dated as of October 16, 2001
(the "Stockholders Agreement") among the Company and the other parties thereto,
or that they may otherwise have do not apply to any of (i) the issuance of
shares of Common Stock upon conversion of the Series A Shares, (ii) the issuance
of any stock option to any Securityholder who is an officer of the Company or
any subsidiary, (iii) the issuance of shares of Common Stock in the Offering or
(iv) any shares of Common Stock issued directly to any Securityholder by the
Company on a non-underwritten basis in or concurrently with the Offering.
(b) NO PIGGYBACK REGISTRATION RIGHTS. The Securityholders
hereby waive all rights they may have under Section 6.2 of the Stockholders
Agreement to notice of the Company's intention to effect the Offering or to
cause the Company to effect the registration of any of the Securityholders'
shares of Common Stock in the Offering.
(c) REGISTRABLE SECURITIES. The Company and the
Securityholders hereby confirm and acknowledge that any and all shares of Common
Stock issuable upon conversion of the Series A Shares or issued directly to any
Securityholder by the Company on a non-underwritten basis in or concurrently
with the Offering shall constitute "Common Stock" and "Registrable Securities"
(as such terms are defined in the Stockholders Agreement) for all purposes
thereunder.
(d) TERMINATION OF CERTAIN PROVISIONS. The Company and the
Securityholders agree that, for purposes of Section 7.1 of the Stockholders
Agreement, a "Public Offering" (as such term is defined in the Stockholders
Agreement) "occurs" effective as of the date and time of the closing thereof
(without reference to the closing of any overallotment option granted in
connection therewith).
4. CONSENT, WAIVER AND CONFIRMATION.
(a) CONSENT TO TRANSACTIONS. The Securityholders hereby
consent to the Offering and to the other actions to be taken and transactions to
be entered into by the Company in connection or concurrently therewith,
including but not limited to the actions and transactions contemplated by this
Agreement.
(b) WAIVER OF MANAGEMENT RIGHTS. Each of (i) the Company, (ii)
FPLP, a party to a Management Rights Agreement by and between it and the Company
dated as of
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October 26, 2001, and (iii) TCW/Crescent Mezzanine Partners III, L.P. ("TCW"), a
party to a Management Rights Agreement by and between it and the Company dated
as of October 25, 2001, hereby agrees that each such Management Rights Agreement
shall terminate automatically, effective as of the Closing Date; it being
understood that the obligations of each of Fairholme and TCW under Section 4 of
its respective Management Rights Agreement shall remain in full force and effect
with respect to information and materials obtained before the Closing Date.
Effective as of the Closing Date, FPLP and TCW each hereby waives any breach by
the Company prior to the Closing Date of any terms of its respective Management
Rights Agreement.
(c) FPLP CONFIRMATION. FPLP and the Company each hereby
confirms and agrees that any and all references to the "Omnibus Agreement," as
such term is defined in the Stock Purchase Agreement dated as of June 28, 2002
(the "FPLP Agreement") by and between the Company and FPLP, shall be deemed to
be references to this Agreement.
5. CUSTODY ARRANGEMENTS AND POWERS OF ATTORNEY.
(a) CUSTODY ARRANGEMENTS. The Company and certain of its
Securityholders have executed certain Letters of Transmittal and Custody
Agreements (each, as amended from time to time, a "Custody Agreement") in
connection with the Offering under which the Company is appointed Custodian (as
such term is defined in the Custody Agreements) of each such Securityholder's
securities. The Company and each Securityholder which executed a Custody
Agreement hereby confirm that such Custody Agreement shall continue in full
force and effect in connection with the Offering and the transactions
contemplated by this Agreement. The Company shall continue to act as Custodian
in connection with each such Custody Agreement and shall have full discretion to
appoint or revoke the appointment of any agent selected by the Company to assist
it in its duties as Custodian thereunder.
(b) POWERS OF ATTORNEY. Each Securityholder hereby irrevocably
constitutes and appoints A. Xxxxxxx Xxxxxx, Xx., Xxxx X. Xxxxxx XX and Xxxxx X.
Xxxxxxxxx, each with full power and authority to act alone in any matter
hereunder and with full power of substitution, the true and lawful
attorneys-in-fact (the "Attorneys") of such Securityholder with full power in
the name of, for and on behalf of, such Securityholder with respect to all
matters arising in connection with Offering and the transactions and actions
contemplated by the Company and the Securityholders relating thereto, including,
but not limited to, the power and authority to take further action to implement
this Agreement and the transactions contemplated hereby. Each of the Attorneys
is hereby empowered to determine in his sole discretion the time or times when,
purpose for and manner in which any power herein conferred upon him shall be
exercised, and the conditions, provisions or covenants of any instrument or
document which may be executed by him pursuant hereto; PROVIDED, that no
Attorney shall exercise the power granted to him hereunder in a manner that
adversely affects any Securityholder disproportionately to any one or more other
Securityholders.
The power of attorney granted by each Securityholder hereunder
(each, a "Power of Attorney") is an agency coupled with an interest and all
authority conferred hereby shall be irrevocable and shall not be terminated by
any act of such Securityholder or by operation of law, whether, to the extent
applicable, by the death or incapacity of such Securityholder or by the
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occurrence of any other event or events (including, without limitation, the
termination of any trust or estate for which such Securityholder is acting as
fiduciary or fiduciaries or the dissolution or liquidation of any corporation or
partnership), whether or not any such Attorney shall have notice of any such
event. Notwithstanding any of the foregoing provisions, if the Offering shall
not have occurred on or prior to December 31, 2002, then from and after such
date each Power of Attorney granted hereby shall be deemed terminated.
The Attorneys, and any of them, shall be entitled to act and
rely upon any representation, warranty, agreement, statement, request, notice or
instructions respecting the Power of Attorney hereby granted by a Securityholder
which is given by such Securityholder, not only as to the authorization,
validity and effectiveness thereof, but also as to the truth and acceptability
of any information therein contained. In acting hereunder, the Attorneys may
also rely on the representations, warranties and agreements of such
Securityholder made in this Agreement.
The Attorneys (in such capacity) make no representations with
respect to and shall have no responsibility for the Registration Statement on
Form S-1 of the Company (and any amendments thereto) relating to the Offering
(the "Registration Statement") or any prospectus contained therein nor, except
as herein expressly provided, for any aspect of the pending Offering and the
Attorneys shall not be liable for any error of judgment or for any act done or
omitted or for any mistake of fact or law except for the Attorneys' own gross
negligence or bad faith. Each Securityholder severally agrees to indemnify the
Attorneys for and to hold the Attorneys, jointly and severally, free from and
harmless against any and all loss, claim, damage, liability or expense incurred
by or on behalf of the Attorneys, or any of them, arising out of or in
connection with acting as Attorneys under the Power of Attorney granted by such
Securityholder hereunder, as well as the cost and expense of defending against
any claim of liability hereunder, and not due to the Attorneys' own gross
negligence or willful misconduct. Each Securityholder agrees that the Attorneys
may consult with counsel of their choice (which may but need not be counsel for
the Company) and the Attorneys shall have full and complete authorization and
protection for any action taken or suffered by the Attorneys, or any of them
hereunder, in good faith and in accordance with the opinion of such counsel.
6. REPRESENTATIONS AND WARRANTIES.
(a) Each Securityholder hereby represents and warrants that
this Agreement has been duly executed and delivered by or on behalf of such
Securityholder and is the valid and legally binding agreement of such
Securityholder enforceable against it in accordance with its terms, except that
(i) the enforceability hereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) the remedy
of specific performance and other forms of equitable relief may be subject to
certain equitable defenses and to the discretion of the court before which the
proceedings therefore may be brought.
(b) Each Securityholder hereby represents and warrants that
neither the execution, delivery or performance of this Agreement by or on behalf
of such Securityholder nor the consummation by or on behalf of such
Securityholder of the transactions contemplated hereby (i) requires any consent,
approval, authorization or other order of, or registration or filing
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with, any court, regulatory body, arbitrator, administrative agency or other
governmental body, agency or official, (ii) conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, the
organizational documents of such Securityholder or any material agreement,
indenture, lease or other instrument to which such Securityholder is a party or
by which such Securityholder is or may be bound, (iii) violates or will violate
any statute, law, regulation or filing or judgment, injunction, order or decree
applicable to such Securityholder, or (iv) will result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of
such Securityholder pursuant to the terms of any material agreement or
instrument to which such Securityholder is a party or by which such
Securityholder may be bound or to which any of the property or assets of such
Securityholder is subject.
(c) Each Securityholder hereby represents and warrants that
(i) all information furnished by or on behalf of such Securityholder in writing
specifically for use in the Registration Statement and the prospectus contained
therein is, and on the Closing Date will be, true, correct and complete and does
not, and on the Closing Date will not, contain any untrue statement of material
fact or omit to state any material fact necessary to make such statements, in
light of the circumstances under which they were made, not misleading and (ii)
such Securityholder has reviewed and is familiar with the information concerning
it in the preliminary prospectus dated July 9, 2002 relating to the Offering
under the caption "Ownership of Common Stock" and has no knowledge of any
material fact, condition or information concerning it in its capacity as a
Securityholder not disclosed in such preliminary prospectus.
(d) If such Securityholder holds Series A Shares (each, a
"Preferred Holder"), then such Preferred Holder represents and warrants that the
shares of Common Stock such Preferred Holder will acquire upon conversion of its
Series A Shares will be acquired for investment for such Preferred Holder's own
account, not as a nominee or agent, and not with a view to the resale or
distribution of any part thereof, and that such Preferred Holder has no present
intention of selling, granting any participation in, or otherwise distributing
the same. Further, such Preferred Holder understands that the shares of Common
Stock it will acquire upon such conversion have not been registered under the
Securities Act of 1933, as amended (the "Securities Act"), and absent
registration, may not be offered or sold within the United States except
pursuant to an exemption from the Securities Act or in a transaction not subject
to the registration requirements of the Securities Act.
(e) Each of JZEP, TCW, TCW/Crescent Mezzanine Trust III and
TCW/Crescent Mezzanine Partners III Netherlands, L.P. hereby represents and
warrants that it is a "qualified institutional buyer" as such term is defined
under Rule 144A of the Securities Act.
(f) FPLP hereby represents and warrants that the
representations and warranties it made in the FPLP Agreement are true and
correct on and as of the date hereof, each as though made as of the date hereof,
except to the extent if any, as otherwise disclosed in writing to the Company
concurrently with its execution and delivery of this Agreement.
The foregoing representations, warranties and agreements are
made for the benefit of, and may be relied upon by, the Company, Credit Suisse
First Boston Corporation, Xxxxxxxxx & Company, Inc. and each of their respective
representatives, agents and counsel.
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7. EFFECTIVENESS. This Agreement will become effective
immediately upon execution and delivery of this Agreement by the parties hereto.
If the Closing Date does not occur prior to December 31, 2002, this Agreement
(other than Section 1 hereof and this Section 7) shall be deemed null and void
and shall have no further force or effect.
8. LEGEND. Each certificate for shares of Common Stock held by
any party to this Agreement which constitute "restricted securities" as such
term is defined in Rule 144 under the Securities Act (or any successor
provision) shall bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT, OR AN EXCEPTION FROM REGISTRATION,
UNDER SAID ACT.
The foregoing legend shall not be removed until the shares represented
by the certificate are sold pursuant to an effective registration statement or
Rule 144 (including Rule 144(k)) under the Securities Act (or any successor
provision) or the Company shall otherwise determine in its sole discretion to
remove the legend. The Company may make any removal of the legend subject to
receipt of such legal opinions or certifications as it shall reasonably request.
9. COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original, and all of which
together shall constitute a single agreement.
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.
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IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the date first written above.
SAFETY INSURANCE GROUP, INC.
By:
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Name: Xxxxx X. Xxxxxxxx
Title: Chief Executive Officer and President
---------------------------------
Xxxxx X. Xxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxx, Xx.
---------------------------------
Xxxxxxx X. Xxxxxx, Xx.
---------------------------------
Xxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxx
---------------------------------
Xxxxx X. Xxxxx
LEUCADIA INVESTORS, INC.
By:
-----------------------------------
Name:
Title:
XXXX X. XXXXXX XX REV. TRUST
By:
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Name:
Title:
---------------------------------
Xxxxx X. Xxxxxxxxx
---------------------------------
Xxxxxxxx X. Xxxxxxx
---------------------------------
A. Xxxxxxx Xxxxxx, Xx.
---------------------------------
Xxxx X. Max
---------------------------------
Xxxxxxx X. Xxxx
---------------------------------
Xxxxx Xxxxxxx
---------------------------------
Xxxx Xxxxxxxx
JZ EQUITY PARTNERS PLC
By:
-----------------------------------
Name:
Title:
J/Z CBO (DELAWARE), LLC
By:
-----------------------------------
Name:
Title:
TCW/CRESCENT MEZZANINE TRUST III
By:
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Name:
Title:
TCW/CRESCENT MEZZANINE PARTNERS III, L.P.
By:
--------------------------------------
Name:
Title:
TCW/CRESCENT MEZZANINE PARTNERS III
(NETHERLANDS), L.P.
By:
------------------------------------
Name:
Title:
FAIRHOLME PARTNERS, L.P.
By:
-----------------------------------
Name:
Title:
XXXXXX X. & XXX XXXXX XXXX,
TRUSTEES, XXXX TRUST, 4/16/00
By:
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Name:
Title:
NOW, THEREFORE, BE IT RESOLVED, that the stockholders of the
Company approve the Plan, as amended and restated, as set forth in Exhibit I
hereto.
