Exhibit 10.19
FRONTIER FINANCING TRUST
6 1/4% Convertible Trust Originated Preferred Securities'SM'
("Convertible TOPrS'SM'")
guaranteed by and convertible into shares of
Common Stock of Frontier Insurance Group, Inc.
REGISTRATION RIGHTS AGREEMENT
October 16, 1996
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
XXXXXXXXXXX & CO., INC.
XXXXXXXX INC.
As Representatives of the several Initial Purchasers
x/x XXXXXXX XXXXX & XX.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
Xxxxxxx Xxxxx World Headquarters
Xxxxx Xxxxx
Xxxxx Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Ladies and Gentlemen:
Frontier Financing Trust, a statutory business trust formed under
the laws of the State of Delaware (the "Trust") by Frontier Insurance Group,
Inc., a Delaware corporation ("the Company"), as sponsor, proposes to issue and
sell to the Initial Purchasers named in the Purchase Agreement referred to below
(the "Initial Purchasers"), for whom Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated ("Xxxxxxx Xxxxx"), Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities
Corporation, Xxxxxxxxxxx & Co., Inc. and Xxxxxxxx Inc. are acting as
representatives (the "Representatives"), upon the terms set forth in a purchase
agreement dated October 9, 1996 (the "Purchase Agreement"), among the Initial
Purchasers, the Company and the Trust, 6 1/4% Convertible Trust Originated
Preferred Securities'SM' (liquidation amount $50
--------
'SM' "Convertible Trust Originated Preferred Securities'SM'" and "Convertible
TOPrS'SM'" are service marks of Xxxxxxx Xxxxx & Co., Inc.
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per Convertible Trust Originated Preferred Security'SM'), (the "Preferred
Securities") (the "Initial Placement"). As an inducement to the Initial
Purchasers to enter into the Purchase Agreement and in satisfaction of a
condition to the obligations of the Initial Purchasers thereunder, the Trust and
the Company agree with you, (i) for the benefit of the Initial Purchasers and
(ii) for the benefit of the holders from time to time of the Preferred
Securities, the 6 1/4% Convertible Subordinated Debentures Due 2016 (the
"Debentures") and the Common Stock, par value $.01 per share (the "Common
Stock"), of the Company initially issuable upon conversion of the Preferred
Securities or the Debentures (collectively, together with the Guarantee of the
Company of the Preferred Securities, the "Registrable Securities"), including
the Initial Purchasers (each of the foregoing, a "Holder" and, together, the
"Holders"), as follows:
1. DEFINITIONS. Capitalized terms used herein without definition
shall have their respective meanings set forth in or pursuant to the Purchase
Agreement or the Offering Memorandum dated October 9, 1996, in respect of the
Preferred Securities, as applicable. All references to Sections herein are to
Sections of this Agreement unless otherwise indicated. As used in this
Agreement, the following capitalized defined terms shall have the following
meanings:
"Act" or "Securities Act" means the Securities Act of 1933, as
amended.
"Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by, or is under
common control with such specified person. For purposes of this
definition, control of a person means the power, direct or indirect, to
direct or cause the direction of the management and policies of such
person whether by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Commission" means the Securities and Exchange Commission.
"Company Offering" means the sale of Common Stock pursuant to a
registration statement filed by the Company under the Act (other than (i)
a registration statement filed on Form S-4 or any successor form or (ii) a
registration statement filed on Form S-8 or any successor form) respecting
an underwritten offering, whether primary or secondary, that is declared
effective by the Commission.
"Declaration" means the amended and restated declaration of trust
of even date herewith executed by the Company, as sponsor of the Trust,
and the initial trustees of the Trust (the "Issuer Trustees"), as the same
will be amended and restated in its entirety by the Company, the Issuer
Trustees, The Bank of New York, as property trustee, and The Bank of New
York (Delaware), as Delaware trustee, providing for the issuance of the
Trust Securities.
"DTC" means The Depository Trust Company.
"Effectiveness Period" has the meaning set forth in Section 2(b).
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"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Indenture" means the Indenture of even date herewith between the
Company and The Bank of New York, as trustee, providing for the issuance
of the Debentures.
"Managing Underwriters" means the investment banker or investment
bankers and manager or managers that shall administer an underwritten
offering, if any, as set forth in Section 6.
"Person" shall mean an individual, partnership, corporation,
trust or unincorporated organization, or a government or agency or
political subdivision thereof.
"Prospectus" means the prospectus included in any Shelf
Registration Statement (including, without limitation, a prospectus that
discloses information previously omitted from a prospectus filed as part
of an effective registration statement in reliance upon Rule 430A under
the Act), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities.
"Shelf Registration" means a registration effected pursuant to
Section 2.
"Shelf Registration Statement" means a "shelf" registration
statement of the Trust and the Company pursuant to the provisions of
Section 2 filed with the Commission which covers some or all of the
Registrable Securities, as applicable, on an appropriate form under Rule
415 under the Act, or any similar rule that may be adopted by the
Commission, amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"underwriter" means any underwriter of Registrable Securities in
connection with an offering thereof under a Shelf Registration Statement.
2. SHELF REGISTRATION. (a) The Trust and the Company shall,
within 60 days following the date of original issuance (the "Issue Date") of the
Preferred Securities, file with the Commission a Shelf Registration Statement
relating to the offer and sale of the Registrable Securities by the Holders from
time to time in accordance with the methods of distribution elected by such
Holders and set forth in such Shelf Registration Statement and, thereafter,
shall each use their best efforts to cause such Shelf Registration Statement to
be declared effective under the Act within 150 calendar days following the Issue
Date; provided, however, that no Holder shall be entitled to have the
Registrable Securities held by it covered by such Shelf Registration unless such
Holder is in compliance with Section 3(m).
(b) The Trust and the Company shall each use its best efforts to
keep the Shelf Registration Statement continuously effective in order to permit
the Prospectus forming
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part thereof to be usable by Holders for a period of three years from the date
the Shelf Registration Statement is declared effective or such shorter period
that will terminate upon the earliest of the following: (A) when all the
Preferred Securities covered by the Shelf Registration Statement have been sold
pursuant to the Shelf Registration Statement, (B) when all Debentures issued to
Holders in respect of Preferred Securities that had not been sold pursuant to
the Shelf Registration Statement have been sold pursuant to the Shelf
Registration Statement, (C) when all shares of Common Stock issued upon
conversion of any such Preferred Securities or any such Debentures that had not
been sold pursuant to the Shelf Registration Statement have been sold pursuant
to the Shelf Registration Statement and (D) when, in the written opinion of
counsel to the Trust and the Company, all outstanding Registrable Securities
held by persons that are not affiliates of the Trust or the Company may be
resold without registration under the Act pursuant to Rule 144(k) under the Act
or any successor provision thereto or any successor provision thereto or any
other applicable law, rule or regulation, whether now in effect or hereinafter
promulgated, adopted or issued (in any such case, such period being called the
"Effectiveness Period").
(c) In the event that a Shelf Registration Statement with respect
to the Registrable Securities is not (i) filed on or prior to the 60th calendar
day following the Issue Date and (ii) declared effective on or prior to the
150th calendar day following the Issue Date (each, a "Registration Default"),
the interest rate borne by the Debentures and, accordingly, the distribution
rate borne by the Preferred Securities shall be increased by one-quarter of one
percent (0.25%) per annum, from and including the day following the Registration
Default to and including the 90th day following such Registration Default and by
one-half of one percent (0.50%) thereof from and after the 91st day following
such Registration Default. Upon (x) the filing of the Shelf Registration
Statement after the 60-day period described in clause (i) above or (y) the
effectiveness of the Shelf Registration Statement after the 150-day period
described in clause (ii) above, the interest rate borne by the Debentures and
the distribution rate borne by the Preferred Securities from the date of such
filing or effectiveness, as the case may be, will be reduced to the original
interest rate in respect of all periods thereafter. In the event that the Shelf
Registration Statement ceases to be effective during the Effectiveness Period
for more than 60 days, whether or not consecutive, during any 12-month period,
then the interest rate borne by the Debentures and the distribution rate borne
by the Preferred Securities will each increase by one-half of one percent
(0.50%) per annum from the 61st, until such time as the Shelf Registration
Statement again becomes effective. Any interest payments contemplated to this
Section 2(c) shall be made pursuant to the terms of the Indenture and the
Declaration.
(d) The Trust and the Company shall be deemed not to have used
their best efforts to keep the Shelf Registration Statement effective during the
requisite period if either the Trust or the Company voluntarily takes any action
that would result in Holders of Registrable Securities covered thereby not being
able to offer and sell any such Registrable Securities during that period,
unless (i) such action is required by applicable law or (ii) upon the occurrence
of any event contemplated by paragraph 3(c)(2)(iii) below, and such action is
taken by the Trust or the Company in good faith and for valid business reasons;
provided that, in the case of clause (ii) above, the Trust and the Company
thereafter promptly comply with the requirements of Section 3(i) below.
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3. REGISTRATION PROCEDURES. In connection with any Shelf
Registration Statement, the following provisions shall apply:
(a) The Trust and the Company shall furnish to the Initial
Purchasers and their counsel, prior to the filing thereof with the
Commission, a copy of any Shelf Registration Statement, and each amendment
thereof and each amendment or supplement, if any, to the Prospectus
included therein and shall each use its best efforts to reflect in each
such document, when so filed with the Commission, such comments as the
Initial Purchasers and such counsel reasonably may propose.
(b) The Trust and the Company shall take such action as may be
necessary so that (i) any Shelf Registration Statement, and any amendment
thereto, and any Prospectus forming part thereof, and any amendment or
supplement thereto (and each report or other document incorporated therein
by reference in each case) complies in all material respects with the
Securities Act and the Exchange Act and the respective rules and
regulations thereunder, (ii) any Shelf Registration Statement, and any
amendment thereto, does not, when it becomes effective, contain 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 not
misleading and (iii) any Prospectus forming part of any Shelf Registration
Statement, and any amendment or supplement to such Prospectus, does not
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements, in the light of the
circumstances under which they were made, not misleading.
(c) (1) The Company shall advise the Initial Purchasers and, in
the case of clause (i) of this Section 3(c), the Holders and, if requested
by the Initial Purchasers or any such Holder, confirm such advice in
writing:
(i) when a Shelf Registration Statement, and any amendment
thereto, has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto
has become effective; and
(ii) of any request by the Commission for amendments or
supplements to the Shelf Registration Statement or the Prospectus
included therein or for additional information.
(2) The Company shall advise the Initial Purchasers and the
Holders and, if requested by the Initial Purchasers or any such Holder,
confirm such advice in writing of:
(i) the issuance by the Commission of any stop order
suspending effectiveness of the Shelf Registration Statement or
the initiation of any proceedings for that purpose;
(ii) the receipt by the Trust or the Company of any
notification with respect to the suspension of the qualification
of the securities included therein
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for sale in any jurisdiction or the initiation of any proceeding
for such purpose; and
(iii) the happening of any event that requires the making
of any changes in the Shelf Registration Statement or the
Prospectus so that, as of such date, the Shelf Registration
Statement and the Prospectus do not contain an untrue statement
of a material fact and do not omit to state a material fact
required to be stated therein or necessary to make the statements
therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading (which
advice shall be accompanied by an instruction to suspend the use
of the Prospectus until the requisite changes have been made).
(d) The Company shall use its best efforts to prevent the
issuance, and, if issued, to obtain the withdrawal, of any order
suspending the effectiveness of any Shelf Registration Statement at the
earliest possible time.
(e) The Trust and the Company shall furnish to each Holder of
Registrable Securities included within the coverage of any Shelf
Registration Statement, without charge, at least one copy of such Shelf
Registration Statement and any post-effective amendments thereto,
including financial statements and schedules, and, if the Holder so
requests in writing, all reports and other documents incorporated by
reference in the Shelf Registration Statement and exhibits (including
those incorporated by reference).
(f) The Trust and the Company shall, during the Effectiveness
Period, deliver to each Holder of Registrable Securities included within
the coverage of any Shelf Registration Statement, without charge, as many
copies of the Prospectus (including each preliminary prospectus) included
in such Shelf Registration Statement and any amendment or supplement
thereto as such Holder may reasonably request; and each of the Trust and
the Company consents (except upon and during the continuance of any event
described in paragraphs 2(d) or 3(c)(2)(iii) above) to the use of the
Prospectus or any amendment or supplement thereto by each of the selling
Holders of Registrable Securities in connection with the offering and sale
of the Registrable Securities covered by the Prospectus or any amendment
or supplement thereto during the Effectiveness Period.
(g) Prior to any offering of Registrable Securities pursuant to
any Shelf Registration Statement, the Trust and the Company shall register
or qualify or cooperate with the Holders of Registrable Securities
included therein and their respective counsel in connection with the
registration or qualification of such Registrable Securities for offer and
sale under the securities or blue sky laws of such jurisdictions in the
United States as any such Holders reasonably request in writing and do any
and all other acts or things necessary or advisable to enable the offer
and sale in such jurisdictions of the Registrable Securities covered by
such Shelf Registration Statement; provided, however, that in no event
shall the Trust or the Company be obligated to (i) qualify generally to do
business or as a foreign corporation or as a dealer in securities in any
jurisdiction where it would not otherwise
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be required to so qualify but for this Section 3(g), (ii) file any general
consent to service of process in any jurisdiction where it is not as of
the date hereof then so subject or (iii) subject itself to taxation in any
such jurisdiction if it is not so subject.
(h) Unless any Registrable Securities shall be in book-entry only
form, the Trust and the Company shall cooperate with the Holders of
Registrable Securities to facilitate the timely preparation and delivery
of certificates representing Registrable Securities to be sold pursuant to
any Shelf Registration Statement free of any restrictive legends and in
such permitted denominations and registered in such names as Holders may
request in connection with the sale of Registrable Securities pursuant to
such Shelf Registration Statement.
(i) Upon the occurrence of any event contemplated by paragraph
3(c)(2)(iii) above, the Trust and the Company shall promptly prepare a
post-effective amendment to any Shelf Registration Statement or an
amendment or supplement to the related Prospectus or file any other
required document so that, as thereafter delivered to purchasers of the
Registrable Securities included therein, the Prospectus will not include
an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading (except, in each
case, for an untrue statement of a material fact or omission of a material
fact made in reliance on and in conformity with written information
furnished to the Company or the Trust by or on behalf of Holders
specifically for use therein). The Trust and the Company agree to notify
the Holders to suspend use of the Prospectus, and the Holders shall
suspend use of the Prospectus, and not communicate such material
non-public information to any third party, and not sell or purchase, or
offer to sell or purchase, any securities of the Trust or the Company,
until the Trust or the Company has amended or supplemented the Prospectus
so it does not contain any such misstatement or omission. Subject to
Section 2(d), at such time as such public disclosure is otherwise made or
the Trust and the Company determine in good faith that such disclosure is
not necessary, the Trust and the Company agree to notify the Holders of
such determination and to amend or supplement the Prospectus if necessary,
so it does not contain any such untrue statement or omission therein and
to furnish the Holders such numbers of copies of the Prospectus as so
amended or supplemented as the Holders may reasonably request.
(j) Not later than the effective date of any Shelf Registration
Statement hereunder, the Trust and the Company shall provide a CUSIP
number for the Preferred Securities registered under such Shelf
Registration Statement; in the event of and at the time of any
distribution of the Debentures to Holders, the Company shall provide a
CUSIP number for the Debentures and provide the applicable trustee with
certificates for such Registrable Securities, in a form eligible for
deposit with DTC (to the extent that such Registrable Securities are so
eligible).
(k) The Trust and the Company shall use their best efforts to
comply with all applicable rules and regulations of the Commission and
shall make generally available to their security holders or otherwise
provide in accordance with Section 11(a) of the
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Securities Act as soon as practicable after the effective date of the
applicable Shelf Registration Statement an earnings statement satisfying
the provisions of Section 11(a) of the Securities Act.
(l) The Trust and the Company shall use their reasonable best
efforts to cause the Indenture, the Declaration and the Preferred
Securities Guarantee Agreement to be qualified under the Trust Indenture
Act in a timely manner.
(m) The Trust and the Company may require each Holder of
Registrable Securities to be sold pursuant to any Shelf Registration
Statement to furnish to the Trust and the Company such information
regarding the Holder and the distribution of such Registrable Securities
as the Trust and the Company may from time to time reasonably require for
inclusion in such Shelf Registration Statement and the Company and the
Trust may exclude from such registration the Registrable Securities of any
Holder that fails to furnish such information within a reasonable time
after receiving such request.
(n) The Trust and the Company will each use their reasonable best
efforts to cause the Preferred Securities and the Common Stock issuable
upon conversion thereof to be listed on the New York Stock Exchange on or
prior to the effective date of any Shelf Registration Statement hereunder.
(o) The Trust and the Company shall use their reasonable best
efforts to take all other steps necessary to effect the registration,
offering and sale of the Registrable Securities covered by the Shelf
Registration Statement contemplated hereby.
4. REGISTRATION EXPENSES. Except as otherwise provided in Section
6, the Company shall bear all fees and expenses incurred in connection with the
performance of its obligations under Sections 2 and 3 and shall bear or
reimburse the Holders for the reasonable fees and disbursements of one firm of
counsel designated by the Initial Purchasers on behalf of the Holders and
reasonably acceptable to the Company to act as counsel for the Holders in
connection therewith.
5. INDEMNIFICATION AND CONTRIBUTION. (a) In connection with any
Shelf Registration Statement, the Company and the Trust, jointly and severally,
shall indemnify and hold harmless the Initial Purchasers, each Holder, each
underwriter who participates in an offering of Registrable Securities, each
person, if any, who controls any of such parties within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act and each of their
respective directors, officers, employees, trustees and agents, as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Shelf
Registration Statement (or any amendment thereto) covering Registrable
Securities, including all documents incorporated therein by reference, or
the omission or alleged omission therefrom of a
9
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement
or alleged untrue statement of a material fact contained in any Prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expenses whatsoever, as incurred
(including reasonable fees and disbursements of counsel chosen by the
Holders, such Holder or any underwriter (except to the extent otherwise
expressive provided in Section 5(c) hereof)), reasonably incurred in
investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever based upon any such untrue
statement or omission, or any such alleged untrue statement or omission,
to the extent that any such expense is not paid under subparagraph (i) or
(ii) of this Section 5(a);
provided that this indemnity shall not apply to any loss, liability, claim,
damage or expense to the extent arising out of an untrue statement or omission
or alleged untrue statement or omission (i) made in reliance upon and in
conformity with written information furnished to the Trust or the Company by the
Initial Purchasers through Xxxxxxx Xxxxx, such Holder or any underwriter
participating in an offering of Registrable Securities in writing expressly for
use in the Shelf Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto) or (ii) contained in any
preliminary prospectus if the Initial Purchasers, such Holder or such
underwriter failed to send or deliver a copy of the Prospectus (or any amendment
or supplement thereto) to the Person asserting such losses, claims, damages or
liabilities on or prior to the delivery of written confirmation of any sale of
securities covered thereby to such Person in any case where such Prospectus (or
any amendment or supplement thereto) would have cured the defect giving rise to
such loss, claim, damage or liability. Any amounts advanced by the Company or
the Trust to an indemnified party pursuant to this Section 5 as a result of such
losses shall be returned to the Company or the Trust, as appropriate, if it
shall be finally determined by such a court in a judgment not subject to appeal
or final review that such indemnified party was not entitled to indemnification
by the Company or the Trust, as the case may be.
(b) Each Holder agrees, severally and not jointly, to indemnify
and hold harmless the Trust, the Company, the Initial Purchasers, each
underwriter who participates in an offering of Registrable Securities and the
other selling Holders and each of their respective directors, officers
(including each officer of the Company and the Trust who signed the Shelf
Registration Statement), employees, trustees and agents and each Person, if any,
who controls
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the Trust, the Company, the Initial Purchasers, any such underwriter or any
other selling Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act, from and against any and all loss, liability,
claim, damage and expense whatsoever described in the indemnity contained in
Section 5(a), as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the Shelf
Registration Statement (or any amendment thereto) or any Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by such selling Holder expressly for use in
the Shelf Registration Statement (or any amendment thereto) or any Prospectus
(or any amendment or supplement thereto); provided, however, that no such Holder
shall be liable for any claims hereunder in excess of the amount of net proceeds
received by such Holder from the sale of Registrable Securities pursuant to the
Shelf Registration Statement.
(c) Each indemnified party shall give prompt notice to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, enclosing a copy of all papers served on such
indemnified party, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability which it may have other than
on account of this indemnity agreement. An indemnifying party may participate at
its own expense in the defense of any such action. If an indemnifying party so
elects within a reasonable time after receipt of such notice, such indemnifying
party, jointly with any other indemnifying party, may assume the defense of such
action with counsel chosen by it and approved by the indemnified party or
parties defendant in such action; provided that if any such indemnified party
reasonably determines that there may be legal defenses available to such
indemnified party which are different from or in addition to those available to
such indemnifying party or that representation of such indemnifying party and
any indemnified party by the same counsel would present a conflict of interest,
then such indemnifying party or parties shall not be entitled to assume such
defense. If an indemnifying party is not entitled to assume the defense of such
action as a result of the proviso to the preceding sentence, counsel for such
indemnifying party shall be entitled to conduct the defense of such indemnifying
party and counsel for each indemnified party or parties shall be entitled to
conduct the defense of such indemnified party or parties. If an indemnifying
party assumes the defense of an action in accordance with and as permitted by
the provisions of this paragraph, such indemnifying party shall not be liable
for any fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action. In no event shall the indemnifying
party or parties be liable for the fees and expenses of more than one counsel
(in addition to any local counsel) separate from its own counsel for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity provision agreement provided for in this
Section 5 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Company, the Trust, the
Initial Purchasers and the Holders shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company, the Trust, the Initial Purchasers
and the Holders, as incurred; provided that no Person guilty of fraudulent
misrepresentation (within
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the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person that was not guilty of such fraudulent
misrepresentation. As between the Company, the Trust, the Initial Purchasers and
the Holders, such parties shall contribute to such aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement in such proportion as shall be appropriate to reflect the
relative fault of the Company and the Trust on the one hand, and the Initial
Purchasers and the Holders, on the other hand, with respect to the statements or
omissions which resulted in such loss, liability, claim, damage or expense, or
action in respect thereof, as well as any other relevant equitable
considerations. The relative fault of the Company and the Trust on the one hand,
and of the Initial Purchasers and the Holders, on the other hand, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Trust, on
the one hand, or by or on behalf of the Initial Purchasers or the Holders, on
the other, and the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission. The Company,
the Trust, the Initial Purchasers and the Holders of the Registrable Securities
agree that it would not be just and equitable if contributions pursuant to this
Section 5 were to be determined by pro rata allocation or by any other method of
allocation that does not take into account the relevant equitable
considerations. For purposes of this Section 5(d), each director, officer,
employee, trustee, agent and Person, if any, who controls an Initial Purchaser
or Holder within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act shall have the same rights to contribution as such Initial
Purchaser or Holder, and each director, officer, employee, trustee and agent of
the Company and the Trust, and each Person, if any, who controls the Company or
the Trust within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act shall have the same rights to contribution as the Company
and the Trust. No party shall be liable for contribution with respect to any
action, suit, proceeding or claim settled without its written consent.
6. UNDERWRITTEN OFFERING.
(a) The Holders of Registrable Securities covered by the Shelf
Registration Statement who desire to do so may sell such Registrable Securities
in an underwritten offering in accordance with the conditions set forth below.
In any such underwritten offering, the investment banker or bankers and manager
or managers that will administer the offering will be selected by, and the
underwriting arrangements with respect thereto will be approved by, the Holders
of a majority of the Registrable Securities to be included in such offering;
provided, however, that (i) such investment bankers and managers and
underwriting arrangements must be reasonably satisfactory to the Company and the
Trust and (ii) neither the Company nor the Trust shall be obligated to arrange
for more than one underwritten offering during the Effectiveness Period. No
Holder may participate in any underwritten offering contemplated hereby unless
(i) such Holder agrees to sell such Holder's Registrable Securities in
accordance with any approved underwriting arrangements, (ii) such Holder
completes and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements, lock-up letters and other documents
required under the terms of such approved underwriting arrangements and (iii) at
least 30% of the Registrable Securities outstanding as of the Closing Time
(giving affect to antidilution adjustments, if applicable)
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are included in such underwritten offering (including for the purposes of this
clause (iii) any Additional Preferred Securities actually issued and sold under
the Purchase Agreement). The Holders participating in any underwritten offering
shall be responsible for any expenses customarily borne by selling
securityholders, including underwriting discounts and commissions, fees and
expenses of counsel to the selling securityholders and transfer taxes, if any,
and shall reimburse the Trust and the Company for the fees and disbursements of
their counsel, their independent public accountants and any printing expenses
incurred in connection with such underwritten offering. Notwithstanding the
foregoing, upon receipt of a request from the Managing Underwriter or a
representative of Holders of a majority of the Registrable Securities
outstanding to prepare and file an amendment or supplement to the Shelf
Registration Statement and Prospectus in connection with an underwritten
offering, the Company may delay the filing of any such amendment or supplement
for up to 90 days if the Company in good faith has a valid business reason for
such delay.
(b) The Trust and the Company shall enter into such customary
agreements (including underwriting agreements in customary form) which are
reasonably acceptable to the Trust and the Company, and take all other
reasonably requested actions in order to expedite or facilitate the registration
or the disposition of the Registrable Securities (subject to the last sentence
of Section 6(a) above), and in connection therewith, if an underwriting
agreement is entered into, cause the same to contain indemnification provisions
and procedures substantially identical to those set forth in Section 5 (or such
other customary provisions and procedures acceptable to the Managing
Underwriters, if any, the Company and the Trust) with respect to all parties to
be indemnified pursuant to Section 5 hereof.
(c) The Trust and the Company shall (i) make available for
inspection by the Holders of Registrable Securities to be registered thereunder,
any underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and any attorney, accountant or other agent retained by
such Holders or any such underwriter all relevant financial and other records,
pertinent corporate documents and properties of the Trust and the Company and
its subsidiaries; (ii) cause the Company's officers, directors and employees and
the Regular Trustees to make reasonably available for inspection all relevant
information reasonably requested by such Holders or any such underwriter,
attorney, accountant or agent in connection with any such Shelf Registration
Statement, in each case as is customary for similar due diligence examinations;
provided, however, that any information that is designated in writing by the
Trust and the Company, in good faith, as confidential at the time of delivery of
such information shall be kept confidential by such Holders or any such
underwriter, attorney, accountant or agent, unless such disclosure is made in
connection with a court proceeding or required by law, or such information
becomes available to the public generally or through a third party without an
accompanying obligation of confidentiality; and provided further that the
foregoing inspection and information gathering shall, to the greatest extent
possible, be coordinated on behalf of the Holders and the other parties entitled
thereto by one counsel designated by and on behalf of such Holders and other
parties reasonably acceptable to the Company and the Trust; (iii) make such
representations and warranties to the Holders of Registrable Securities
registered thereunder and the underwriters, if any, in form, substance and scope
as are customarily made by the Company and the Trust to underwriters in primary
underwritten offerings and covering matters including, but not limited to, those
set forth in the
13
Purchase Agreement; (iv) obtain opinions of counsel to the Trust and the Company
(who may be the general counsel of the Company) and updates thereof (which
counsel and opinions (in form, scope and substance) shall be reasonably
satisfactory to the Managing Underwriters, if any) in customary form addressed
to each selling Holder and the underwriters, if any, covering such matters as
are customarily covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by such Holders and underwriters
(it being agreed that the matters to be covered by such opinion or a written
statement by such counsel delivered in connection with such opinions shall
include, without limitation, as of the date of the opinion and as of the
effective date of the Shelf Registration Statement or most recent post-effective
amendment thereto, as the case may be, the absence from such Shelf Registration
Statement and the Prospectus included therein, as then amended or supplemented,
including the documents incorporated by reference therein, of an untrue
statement of a material fact or the omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading); (v) obtain "comfort letters" and updates thereof from the
independent public accountants of the Company (and, if necessary, any other
independent public accountants of any subsidiary of the Company or of any
business acquired by the Company for which financial statements and financial
data are, or are required to be, included in the Shelf Registration Statement),
addressed to each such Holder of Registrable Securities registered thereunder
and the underwriters, if any, in customary form and covering matters of the type
customarily covered in "comfort letters" in connection with primary underwritten
offerings; and (vi) deliver such other customary documents and certificates as
may be reasonably requested by any such Holders and the Managing Underwriters,
if any, including those to evidence compliance with Section 3(i) and with any
customary conditions contained in the underwriting agreement or other agreement
entered into by the Trust and the Company. The foregoing actions set forth in
clauses (iii), (iv), (v) and (vi) of this Section 3(p) shall be performed at
each closing under any underwritten offering to the extent required thereunder.
(d) Upon the request of the Company, the Holders agree not to
effect any public sale or distribution (including sales pursuant to Rule 144) of
Registrable Securities during the 10-trading day period prior to the date that
the Company has notified the Holders that it intends to commence a Company
Offering through the 180-day period immediately following the closing date of
such Company Offering (or such lesser period as may be required by the
underwriters of such Company Offering); provided, however, that (i) the Holders
shall not be obligated to comply with this Section 6(d) until the first
anniversary of the date of this Agreement and (ii) the Holders shall not be
obligated to comply with this Section 6(d) on more than one occasion in any
12-month period.
(e) Notwithstanding any other provision of this Section 6, if the
Managing Underwriters advise the Holders in writing that marketing factors
require a limitation on the number of shares to be underwritten, the number of
shares included in the underwriting by each Holder shall be reduced on a pro
rata basis (based on the number of shares originally proposed to be so included
by such Holder) by such minimum number of shares as is necessary to comply with
such request. If any Holder who has requested inclusion in such underwriting as
provided above disapproves of the terms of the underwriting, such Holder
14
may elect to withdraw therefrom by written notice to the Company and the
Managing Underwriters.
7. MISCELLANEOUS.
(a) OTHER REGISTRATION RIGHTS. The Company may grant registration
rights that would permit any Person that is a third party the right to piggyback
on any Shelf Registration Statement; provided that if the Managing Underwriter,
if any, of such offering delivers an opinion to the selling Holders that the
total amount of securities which they and the holders of such piggyback rights
intend to include in any Shelf Registration Statement is so large as to
materially adversely affect the success of such offering (including the price at
which such securities can be sold), then only the amount, number or kind of
securities to be offered for the account of holders of such piggyback rights
will be reduced to the extent necessary to reduce the total amount of securities
to be included in such offering to the amount, number or kind recommended by the
Managing Underwriter prior to any reduction in the amount of Registrable
Securities to be included.
(b) AMENDMENTS AND WAIVERS. The provision of this Agreement,
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Trust and the Company have
obtained the written consent of the Initial Purchasers on behalf of the Holders
from time to time.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telex, telecopier, or air courier guaranteeing overnight delivery:
1. if to a Holder, at the most current address given by such
Holder to the Company in accordance with the provisions of this Section
7(c);
2. if to the Initial Purchasers, initially at the address set
forth in the Purchase Agreement; and
3. if to the Trust or the Company, initially at its address set
forth in the Purchase Agreement.
All such notices and communications shall be deemed to have been duly
given when received, if delivered in person or by fax; five days after
mailing, if sent by mail; or the day following transmission, if sent by
overnight courier.
The Initial Purchasers or the Trust and the Company by notice to
the other may designate additional or different addresses for subsequent notices
or communications.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
and the Holders, including, without the need for an express assignment or any
consent by the Trust or the
15
Company thereto, subsequent Holders of Registrable Securities. The Trust and the
Company hereby agree to extend the benefits of this Agreement to any Holder of
Registrable Securities and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.
(e) COUNTERPARTS. This agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) HEADINGS. The headings in this agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
(g) GOVERNING LAW. This agreement shall be governed by the laws
of the State of New York.
(h) SEVERABILITY. In the event that any one of more of the
provisions contained herein, or the application thereof in any circumstances, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired
or affected thereby, it being intended that all of the rights and privileges of
the parties shall be enforceable to the fullest extent permitted by law.
Please confirm that the foregoing correctly sets forth the
agreement among the Company, the Trust and you.
Very truly yours.
FRONTIER FINANCING TRUST
By /s/ Xxxxx X. Xxxxx
-----------------------------------
Name: Xxxxx X. Xxxxx
Title: Regular Trustee
FRONTIER INSURANCE GROUP, INC.
By /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxx
Title: President and Chief
Executive Officer
The foregoing Registration Rights Agreement is hereby confirmed and accepted as
of the date first above written.
XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
XXXXXXXXX, LUFKIN & XXXXXXXX SECURITIES CORPORATION
XXXXXXXXXXX & CO., INC.
XXXXXXXX INC.
By XXXXXXX XXXXX & CO.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
By /s/ Xxxxxxx Xxxxxx, Xx.
----------------------------------
Name: Xxxxxxx Xxxxxx, Xx.
Title: Vice President
