EXHIBIT 1
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FRONTIER INSURANCE GROUP, INC.
(A DELAWARE CORPORATION)
[1] SHARES OF COMMON STOCK
PURCHASE AGREEMENT
DATED JULY [ ], 1997
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FRONTIER INSURANCE GROUP, INC.
(a Delaware corporation)
[1] Shares of Common Stock
PURCHASE AGREEMENT
July [ ], 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
▇▇▇▇▇▇▇▇▇▇▇ & CO., INC.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇▇ INC.
As Representatives of the
several Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Ladies and Gentlemen:
Frontier Insurance Group, Inc., a Delaware corporation (the
"Company"), confirms its agreement with ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch,
Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇") and each of the other
Underwriters named in Schedule A hereto (collectively, the "Underwriters", which
term shall also include any underwriter substituted as hereinafter provided in
Section 10 hereof), for whom ▇▇▇▇▇▇▇ Lynch, Donaldson, Lufkin & ▇▇▇▇▇▇▇▇
Securities Corporation, ▇▇▇▇▇▇▇▇▇▇▇ & Co., Inc., ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇▇▇
Inc. are acting as representatives (in such capacity, the "Representatives"),
with respect to (i) the sale by the Company, and the purchase by the
Underwriters, acting severally and not jointly, of the respective numbers of
shares of Common Stock, par value $.01 per share, of the Company ("Common
Stock") set forth in Schedule A hereto and (ii) the grant by the Company to the
Underwriters, acting severally and not jointly, of the option described in
Section 2(b) hereof to purchase all or any part of [11] additional shares of
Common Stock to cover over-allotments, if any. The aforesaid [1] shares of
Common Stock (the "Initial Securities") to be purchased by the Underwriters and
all or any part of the [11] shares of Common Stock subject to the option
described in Section 2(b) hereof (the "Option Securities") are hereinafter
called, collectively, the " Securities".
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The Company understands that the Underwriters propose to make a public
offering of the Securities as soon as the Representatives deem advisable after
this Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-[ ]) covering the
registration of the Securities under the Securities Act of 1933, as amended (the
"1933 Act"), including the related preliminary prospectus or prospectuses.
Promptly after execution and delivery of this Agreement, the Company will, in
connection with the offering of the Securities, either (i) prepare and file a
prospectus in accordance with the provisions of Rule 430A ("Rule 430A") of the
rules and regulations of the Commission under the 1933 Act (the "1933 Act
Regulations") and paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act
Regulations or (ii) if the Company has elected to rely upon Rule 434 ("Rule
434") of the 1933 Act Regulations, prepare and file a term sheet (a "Term
Sheet") in accordance with the provisions of Rule 434 and Rule 424(b). The
information included in any prospectus or in any Term Sheet, as the case may be,
that was omitted from such registration statement at the time it became
effective but that is deemed to be part of such registration statement at the
time it became effective (a) pursuant to paragraph (b) of Rule 430A is referred
to as "Rule 430A Information" or (b) pursuant to paragraph (d) of Rule 434 is
referred to as "Rule 434 Information." Each prospectus used before such
registration statement became effective, and any prospectus that omitted, as
applicable, the Rule 430A Information or the Rule 434 Information, that was used
after such effectiveness and prior to the execution and delivery of this
Agreement, is herein called a "preliminary prospectus." Such registration
statement, including the exhibits thereto, schedules thereto, if any, and the
documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, at the time it became effective and including the Rule 430A
Information and the Rule 434 Information, as applicable, is herein called the
"Registration Statement." Any registration statement filed pursuant to Rule
462(b) of the 1933 Act Regulations is herein referred to as the "Rule 462(b)
Registration Statement," and after such filing the term "Registration Statement"
shall include the Rule 462(b) Registration Statement. The final prospectus,
including the documents incorporated by reference therein pursuant to Item 12 of
Form S-3 under the 1933 Act, in the form first furnished to the Underwriters for
use in connection with the offering of the Securities is herein called the
"Prospectus." If Rule 434 is relied on, the term " Prospectus" shall refer to
the preliminary prospectus dated ________, 1997, together with the applicable
Term Sheet and all references in this Agreement to the date of the Prospectus
shall mean the date of such Term Sheet. For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the
Prospectus or any Term Sheet or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval system ("▇▇▇▇▇").
All references in this Agreement to financial statements and schedules
and other information which is "contained," "included" or "stated" in the
Registration Statement, any preliminary prospectus
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or the Prospectus (or other references of like import) shall be deemed to mean
and include all such financial statements and schedules and other information
which is incorporated by reference in the Registration Statement, any
preliminary prospectus or the Prospectus, as the case may be; and all references
in this Agreement to amendments or supplements to the Registration Statement,
any preliminary prospectus or the Prospectus shall be deemed to mean and include
the filing of any document under the Securities Exchange Act of 1934 (the "1934
Act") which is incorporated by reference in the Registration Statement, such
preliminary prospectus or the Prospectus, as the case may be.
SECTION 1. REPRESENTATIONS AND WARRANTIES. (a) The Company
represents and warrants to each Underwriter as of the date hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery
(if any) referred to in Section 2(b) hereof, and agrees with each Underwriter,
as follows:
(i) COMPLIANCE WITH REGISTRATION REQUIREMENTS. The Company meets the
requirements for use of Form S-3 under the 1933 Act. Each of the
Registration Statement and any Rule 462(b) Registration Statement has
become effective under the 1933 Act and no stop order suspending the
effectiveness of the Registration Statement or any Rule 462(b) Registration
Statement has been issued under the 1933 Act and no proceedings for that
purpose have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part of
the Commission for additional information has been complied with.
At the respective times the Registration Statement, any Rule 462(b)
Registration Statement and any post-effective amendments thereto became
effective and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), the Registration Statement, the Rule
462(b) Registration Statement and any amendments and supplements thereto
complied and will comply in all material respects with the requirements of
the 1933 Act and the 1933 Act Regulations and did not and will not 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. Neither the Prospectus nor any amendments or supplements
thereto, at the time the Prospectus or any such amendment or supplement
were issued and at the Closing Time (and, if any Option Securities are
purchased, at the Date of Delivery), included or will include an untrue
statement of a material fact or omitted or will omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. If Rule 434 is
used, the Company will comply with the requirements of Rule 434; PROVIDED,
HOWEVER, that the representations and warranties in this subsection shall
not apply to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through ▇▇▇▇▇▇▇
▇▇▇▇▇, expressly for use in the Registration Statement or Prospectus.
Each preliminary prospectus and the Prospectus filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424 under the 1933 Act, complied when so
filed in all material respects with the 1933 Act Regulations and each
preliminary prospectus and the Prospectus delivered to the Underwriters for
use in connection with this offering was identical to the
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electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(ii) INCORPORATED DOCUMENTS. The documents incorporated or deemed to
be incorporated by reference in the Registration Statement and the
Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
requirements of the 1934 Act and the rules and regulations of the
Commission thereunder (the "1934 Act Regulations"), and when read together
with the other information in the Prospectus, at the time the Registration
Statement became effective, at the time the Prospectus was issued and at
the Closing Time (and, if any Option Securities are purchased, at the Date
of Delivery), did not and will not 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.
(iii) INDEPENDENT ACCOUNTANTS. (a) Ernst & Young, LLP ("E&Y"), who
certified the financial statements and supporting schedules included in the
Registration Statement are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations and (b) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP
("▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇"), who certified the consolidated financial statements
of ▇▇▇▇▇▇ Property Insurance Company and its consolidated subsidiaries
(collectively, "▇▇▇▇▇▇") included in the Company's Current Report on
Form 8-K/A-1 dated June 3, 1997 (the "Company's 8-K") and incorporated by
reference in the Registration Statement are independent public
accountants [with respect to ▇▇▇▇▇▇] as required by the 1933 Act and the
1933 Act Regulations.
(iv) AUTHORIZATION OF AGREEMENT. This Agreement has been duly
authorized, executed and delivered by the Company.
(v) FINANCIAL STATEMENTS. (a) The consolidated financial statements
of the Company included in the Registration Statement and the Prospectus,
together with the related schedules and notes, present fairly the
consolidated financial position of the Company and its subsidiaries as of
the dates indicated and the consolidated results of operations and the
consolidated cash flows of the Company and its subsidiaries for the periods
specified. The consolidated financial statements of the Company included
in or incorporated or deemed to be incorporated by reference in the
Registration Statement have been prepared in conformity with generally
accepted accounting principles ("GAAP") applied on a consistent basis
throughout the periods involved, and the supporting schedules, if any,
included or incorporated or deemed to be incorporated by reference, in the
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected consolidated
financial data and the summary financial information of the Company
included in the Prospectus present fairly the information shown therein and
have been compiled on a basis consistent with that of the consolidated
audited financial statements of the Company (to the extent so indicated)
included in the Registration Statement. The pro forma financial statements
and the related notes thereto included in the Registration Statement and
the Prospectus present fairly the information shown therein, have been
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prepared in accordance with the Commission's rules and guidelines with
respect to pro forma financial statements and have been properly compiled
on the bases described therein, and the assumptions used in the preparation
thereof are reasonable and the adjustments used therein are appropriate to
give effect to the transactions and circumstances referred to therein and
(b) the consolidated financial statements of ▇▇▇▇▇▇ incorporated by
reference in the Registration Statement, together with the related notes,
present fairly the consolidated financial position of ▇▇▇▇▇▇ at the dates
indicated and the consolidated statement of operations, stockholders' equity
and cash flows of ▇▇▇▇▇▇ for the periods specified, said financial
statements have been prepared in conformity with GAAP applied on a
consistent basis throughout the periods involved. The selected consolidated
financial data and the summary financial information of ▇▇▇▇▇▇ included in
the Prospectus present fairly the information shown therein and have been
compiled on a basis consistent with that of the audited financial statements
incorporated by reference in the Registration Statement.
(vi) GOOD STANDING OF THE COMPANY. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Delaware with corporate power and authority under such laws to
own, lease and operate its properties and conduct its business as described
in the Prospectus and to enter into and perform its obligations under this
Agreement; and the Company is duly qualified to transact business as a
foreign corporation and is in good standing in each other jurisdiction in
which it owns or leases property of a nature, or transacts business of a
type, that would make such qualification necessary, except to the extent
that the failure to so qualify or be in good standing would not have a
Material Adverse Effect (as defined below).
(vii) GOOD STANDING OF SUBSIDIARIES. Each subsidiary of the Company
is a corporation or, in the case of ▇▇▇▇▇▇▇▇/Frontier, LLC, a limited
liability company, duly incorporated or organized, validly existing and in
good standing under the laws of its jurisdiction of organization with all
corporate power under such laws to own, lease and operate its properties
and conduct its business. Each subsidiary of the Company is duly qualified
to transact business as a foreign corporation or limited liability company
and is in good standing in each other jurisdiction in which it owns or
leases property of a nature, or transacts business of a type, that would
make such qualification necessary, except to the extent that the failure to
so qualify or be in good standing would not have a Material Adverse Effect.
All of the outstanding shares of capital stock of each subsidiary of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable and are owned, directly or indirectly, by the Company (except
that the Company has a 50% ownership interest in ▇▇▇▇▇▇▇/Frontier, LLC)
free and clear of any pledge, lien, security interest, charge, claim,
equity or encumbrance of any kind; none of the outstanding shares of
capital stock of any subsidiary was issued in violation of the preemptive
or similar rights of any securityholder of such subsidiary.
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(viii) CAPITALIZATION. The authorized, issued and outstanding
capital stock of the Company is as set forth in the Prospectus in the
column entitled "Actual" under the caption "Capitalization" (except for
subsequent issuances, if any, pursuant to this Agreement, pursuant to
reservations, agreements or employee benefit plans referred to in the
Prospectus or pursuant to the exercise of convertible securities or options
referred to in the Prospectus). All of the outstanding shares of capital
stock of the Company have been duly authorized and validly issued and are
fully paid and nonassessable; and none of the outstanding shares of capital
stock of the Company was issued in violation of the preemptive rights of
any stockholder of the Company.
(ix) AUTHORIZATION AND DESCRIPTION OF SECURITIES. The Securities to
be purchased by the Underwriters from the Company have been duly authorized
for issuance and sale to the Underwriters pursuant to this Agreement and,
when issued and delivered by the Company pursuant to this Agreement against
payment of the consideration set forth herein, will be validly issued and
fully paid and nonassessable; and the Common Stock conforms to all
statements relating thereto contained in the Prospectus and such
description conforms to the rights set forth in the instruments defining
the same; no holder thereof will be subject to personal liability by reason
of being such a holder; the issuance of the Securities is not subject to
the preemptive or other similar rights of any securityholder of the
Company.
(x) TITLE TO PROPERTY. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (a) are
described in the Prospectus or (b) do not, singly or in the aggregate,
materially affect the value of such property and do not interfere with the
use made and proposed to be made of such property by the Company or any of
its subsidiaries; and all of the leases and subleases material to the
business of the Company and its subsidiaries, considered as one enterprise,
and under which the Company or any of its subsidiaries holds properties
described in the Prospectus, are in full force and effect, and neither the
Company nor any subsidiary has any notice of any material claim of any sort
that has been asserted by anyone adverse to the rights of the Company or
any subsidiary under any of the leases or subleases mentioned above, or
affecting or questioning the rights of the Company or such subsidiary to
the continued possession of the leased or subleased premises under any such
lease or sublease.
(xi) INVESTMENT COMPANY ACT. Neither the Company nor any subsidiary
of the Company is, and upon the issuance and sale of the Securities as
herein contemplated and the application of the net proceeds therefrom as
described in the Prospectus will not be, an "investment company" or an
entity "controlled" by an "investment company" as such terms are defined in
the Investment Company Act of 1940, as amended.
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(xii) NO MATERIAL ADVERSE CHANGE IN BUSINESS. Since the respective
dates as of which information is given in the Registration Statement and
the Prospectus, except as otherwise stated therein or contemplated thereby,
there has not been (A) any material adverse change in the condition
(financial or otherwise), earnings, business affairs or business prospects
of the Company and its subsidiaries, considered as one enterprise (a
"Material Adverse Effect"), whether or not arising in the ordinary course
of business, (B) there have been no transactions entered into by the
Company or any of its subsidiaries, other than those in the ordinary course
of business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) any dividend or
distribution of any kind declared, paid or made by the Company on its
capital stock, except for regular quarterly dividends on outstanding shares
of Common Stock.
(xiii) ABSENCE OF DEFAULTS AND CONFLICTS. Neither the Company nor
any of its subsidiaries is in violation of its charter or by-laws or is in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which it is a
party or by which it may be bound or to which any of its properties may be
subject (collectively, the "Agreements and Instruments"), except for such
defaults that would not have a Material Adverse Effect. The execution,
delivery and performance of this Agreement by the Company and the
consummation of the transactions contemplated herein and in the
Registration Statement (including the issuance and sale of the Securities
and the use of proceeds from the sale of Securities as described in the
Prospectus under the caption "Use of Proceeds") and compliance by the
Company with its obligations hereunder have been duly authorized by all
necessary corporate action and do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any subsidiary
pursuant to, the Agreements and Instruments (except for such conflicts,
breaches or defaults or liens, charges or encumbrances that would not
result in a Material Adverse Effect), nor will such action result in any
violation of the charter or by-laws of the Company or any subsidiary or any
applicable law, statute, rule, regulation, judgment, order or decree of any
government, governmental instrumentality or court, domestic or foreign,
having jurisdiction over the Company or any subsidiary or any of their
assets, properties or operations. As used herein, a "Repayment Event"
means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such holder's
behalf) the right to require the repurchase, redemption or repayment of all
or a portion of such indebtedness by the Company or any subsidiary.
(xiv) ABSENCE OF FURTHER REQUIREMENTS. No authorization, approval,
consent or license of any government, governmental instrumentality or
court, domestic or foreign, is necessary or required for the performance of
the Company of its obligations hereunder, in connection with the offering,
issuance or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such
8
as have been already obtained or as may be required under the 1933 Act or
the 1933 Act Regulations or state securities laws.
(xv) ABSENCE OF PROCEEDINGS. Except as disclosed in the Registration
Statement, there is no action, suit or proceeding before or by any
government, governmental instrumentality or court, domestic or foreign, now
pending or, to the knowledge of the Company, threatened against the Company
or any subsidiary, that is required to be disclosed in the Registration
Statement, or that is reasonably expected by the Company to result in any
Material Adverse Effect, or that is reasonably expected by the Company to
materially and adversely affect the consummation of the transactions
contemplated by this Agreement or the performance by the Company of its
obligations hereunder. The aggregate of all pending legal or governmental
proceedings to which any of the Company or any subsidiary is a party or of
which any of their respective property is subject that are not described in
the Registration Statement, including ordinary routine litigation
incidental to the business of any of the Company or any subsidiary, is not
reasonably expected by the Company to have a Material Adverse Effect.
(xvi) POSSESSION OF INTELLECTUAL PROPERTY. The Company and its
subsidiaries own or possess, or can acquire on reasonable terms, adequate
copyrights, patents, patent licenses, trademarks, service marks and trade
names necessary to carry on their respective business as presently
conducted, and none of the Company and its subsidiaries has received any
notice of infringement of or conflict with asserted rights of others with
respect to any copyrights, patents, patent licenses, trademarks, service
marks or trade names that, in the aggregate, if the subject of an
unfavorable decision, ruling or finding, is reasonably expected to have a
Material Adverse Effect.
(xvii) ENVIRONMENTAL LAWS. Except as disclosed in the Registration
Statement and except as would not individually or in the aggregate have a
Material Adverse Effect (A) the Company and its subsidiaries are in
compliance with all applicable Environmental Laws, (B) the Company and its
subsidiaries have all permits, authorizations and approvals required under
any applicable Environmental Laws and are each in compliance with their
requirements, (C) there are no pending or, to the knowledge of the Company,
threatened Environmental Claims against the Company or its subsidiaries,
other than under policies of insurance issued by the Company's insurance
company subsidiaries, and (D) there are no circumstances with respect to
any property or operations of the Company or its subsidiaries that the
Company reasonably believes would form the basis of an Environmental Claim
against the Company or any of its subsidiaries, other than under policies
of insurance issued by the Company's insurance company subsidiaries.
For purposes of this Agreement, the following terms have the following
meanings: "Environmental Law" means any United States federal, state,
local or municipal statute, law, rule, regulation, ordinance, code, policy
or rule of common law and any judicial or administrative interpretation
thereof, including any judicial or administrative order, consent decree or
judgment, relating to the environment, health,
9
safety or any chemical, material or substance, exposure to which is
prohibited, limited or regulated by any governmental authority.
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations or proceedings relating in any
way to any Environmental Law.
(xviii) CONDUCT OF BUSINESS. The Company and its subsidiaries are
currently conducting their respective businesses as described in the
Registration Statement.
(xix) ACCURACY OF EXHIBITS. There are no contracts or documents
which are required to be described in the Registration Statement, the
Prospectus or the documents incorporated by reference therein or to be
filed as exhibits thereto which have not been so described and filed as
required.
(xx) PAYMENT OF TAXES. The Company and each of its subsidiaries have
filed all federal, state and local income and franchise tax returns
required to be filed through the date hereof, or have filed extensions in
accordance with applicable law, and have paid all taxes required to be paid
through the date hereof thereon, except for such failures to file or pay
that would not, individually or in the aggregate, be reasonably likely to
have a Material Adverse Effect, and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries that has had (nor does
the Company have any knowledge of any tax deficiency which, if determined
adversely to the Company or any of its subsidiaries, would be reasonably
likely to have) a Material Adverse Effect.
(xxi) STATUTORY FINANCIAL STATEMENTS. The statutory financial
statements of each of the Company's insurance company subsidiaries from
which certain ratios and other statistical data included or incorporated or
deemed to be incorporated by reference in the Registration Statement have
been derived have been prepared for each relevant period in conformity with
accounting practices prescribed or permitted by the National Association of
Insurance Commissioners (the "NAIC") and the insurance department of the
state of domicile of each such subsidiary in effect at such time of
preparation ("SAP"), except as otherwise stated therein.
(xxii) POSSESSION OF LICENSES AND PERMITS. Each of the Company and
each of its subsidiaries holds such licenses, certificates, consents,
orders, approvals, permits and other authorizations from governmental
authorities (including, without limitation, insurance licenses from the
insurance regulatory agencies of the various states where it conducts
business ("Insurance Licenses")) which are necessary to own or lease, as
the case may be, and to operate its properties and to carry on its business
as presently conducted, except for such licenses, certificates, consents,
orders, approvals, permits or other authorizations the failure to hold
which could not reasonably be expected to have a Material Adverse Effect;
each of the Company and each of its insurance company subsidiaries has
fulfilled and performed all obligations necessary to maintain such
licenses, certificates, consents, orders, approvals, permits and other
authorizations (including, without limitation, the Insurance Licenses),
except where the failure to so
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fulfill or perform such obligations could not reasonably be expected to
have a Material Adverse Effect. There is no pending, or to the best
knowledge of the Company threatened, action, suit, proceeding or
investigation (and, to the best knowledge of the Company, no facts exist
which the Company believes could reasonably be the basis for any such
action, suit, proceeding or investigation) that may reasonably be expected
to lead to the revocation, termination or suspension of any such license,
certificate, consent, order, approval, permit or other authorization
(including, without limitation, the Insurance Licenses), except where such
revocation, termination or suspension could not reasonably be expected to
have a Material Adverse Effect; and no insurance regulatory agency or body
has issued any order or decree impairing, restricting or prohibiting the
payment of dividends by the Company's insurance company subsidiaries to the
Company.
(xxiii) All ceded reinsurance and retrocessional agreements to which
the Company's insurance company subsidiaries are a party are in full force
and effect and neither the Company nor any of such subsidiaries is in
violation of, or in default in the performance, observance or fulfillment
of, any obligation, agreement, covenant or condition contained therein,
except for such violations or defaults which could not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect. Neither the Company nor any of such subsidiaries has received any
notice from any of the other parties to such agreements that such other
party intends not to perform in any material respect such agreement and
none of the Company and such subsidiaries has any reason to believe that
any of the other parties to such agreements will be unable to perform such
agreements, except to the extent that (i) the Company or such subsidiary
has established appropriate reserves on its financial statements or (ii)
such nonperformance could not reasonably be expected, individually or in
the aggregate, to have a Material Adverse Effect; and each of the Company
and its insurance company subsidiaries is entitled to give effect in its
underwriting results in its most recently filed statutory financial
statements in conformity with SAP for reinsurance ceded pursuant to such
agreements.
(xxiv) MAINTENANCE OF INSURANCE. The Company and each of its
subsidiaries carry, or are covered by, insurance in such amounts and
covering such risks as the Company believes to be adequate for the conduct
of their respective businesses and the value of their respective
properties.
(xxv) MAINTENANCE OF BOOKS AND RECORDS. The Company (i) makes and
keeps accurate books and records and (ii) maintains internal accounting
controls which provide reasonable assurance that (A) transactions are
executed in accordance with management's authorization, (B) transactions
are recorded as necessary to permit preparation of its financial statements
and to maintain accountability for its assets, (C) access to its assets is
permitted only in accordance with management's authorization and (D) the
reported accountability for its assets is compared with existing assets at
reasonable intervals.
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(xxvi) COMPLIANCE WITH INSURANCE LAWS. Each insurance company
subsidiary of the Company is in compliance with the requirements of the
insurance laws of the jurisdiction of its incorporation or domicile and of
each other jurisdiction that is applicable to such subsidiary, except where
the failure to comply would not have a Material Adverse Effect.
(b) OFFICER'S CERTIFICATES. Any certificate signed by any officer of
the Company and delivered pursuant to this Agreement or in connection with the
payment of the purchase price and delivery of the certificates for the Initial
Securities or the Option Securities, to the Representatives, the Underwriters or
counsel for any of the foregoing, shall be deemed a representation and warranty
by the Company to the Representatives and the Underwriters as to the matters
covered thereby.
Section 2. SALE AND DELIVERY TO THE UNDERWRITERS; CLOSING.
(a) INITIAL SECURITIES. On the basis of the representations and
warranties herein contained, and subject to the terms and conditions herein set
forth, the Company agrees to sell to each Underwriter, and each Underwriter
agrees, severally and not jointly, to purchase from the Company, at the price
per share set forth on Schedule B, the number of Initial Securities set forth in
Schedule A opposite the name of such Underwriter, plus any additional number of
Initial Securities which such Underwriter may become obligated to purchase
pursuant to the provisions of Section 10 hereof, subject, in each case, to such
adjustments among the Underwriters as the Representatives in their sole
discretion shall make to eliminate any sales or purchases of fractional
securities.
(b) OPTION SECURITIES. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriters, severally
and not jointly, to purchase up to an additional [11] shares of Common Stock, at
the price per share set forth in Schedule B, less an amount per share equal to
any dividends or distributions declared by the Company and payable on the
Initial Securities but not payable on the Option Securities. The option hereby
granted will expire 30 days after the date hereof and may be exercised in whole
or in part from time to time only for the purpose of covering over-allotments
which may be made in connection with the offering and distribution of the
Initial Securities upon notice by the Representatives to the Company setting
forth the number of Option Securities as to which the several Underwriters are
then exercising the option and the time and date of payment and delivery for
such Option Securities. Any such time and date of delivery (a "Date of
Delivery") shall be determined by the Representatives, but shall not be later
than seven full business days after the exercise of said option, nor in any
event prior to the Closing Time, as hereinafter defined. If the option is
exercised as to all or any portion of the Option Securities, each of the
Underwriters, acting severally and not jointly, will purchase that proportion of
the total number of Option Securities then being purchased which the number of
Initial Securities set forth in Schedule A opposite the name of such Underwriter
bears to the total number of Initial Securities, subject in each case to such
adjustments as the Representatives in their sole discretion shall make to
eliminate any sales or purchases of fractional shares.
12
(c) PAYMENT. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, 425 Lexington Avenue, New York, New York, or at such other
place as shall be agreed upon by the Representatives and the Company, at
9:00 A.M. (Eastern time) on the third (fourth, if the pricing occurs after 4:30
P.M. (Eastern time) on any given day) business day after the date hereof (unless
postponed in accordance with the provisions of Section 10), or such other time
not later than ten business days after such date as shall be agreed upon by the
Representatives and the Company (such time and date of payment and delivery
being herein called the "Closing Time").
In addition, in the event that any or all of the Option Securities are
purchased by the Underwriters, payment of the purchase price for, and delivery
of certificates for, such Option Securities shall be made at the above-mentioned
offices, or at such other place as shall be agreed upon by the Representatives
and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Representatives for the respective accounts of the Underwriters of
certificates for the Securities to be purchased by them. It is understood that
each Underwriter has authorized the Representatives, for its account, to accept
delivery of, receipt for, and make payment of the purchase price for, the
Initial Securities and the Option Securities, if any, which it has agreed to
purchase. ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and not as representative of the
Underwriters, may (but shall not be obligated to) make payment of the purchase
price for the Initial Securities or the Option Securities, if any, to be
purchased by any Underwriter whose funds have not been received by the Closing
Time or the relevant Date of Delivery, as the case may be, but such payment
shall not relieve such Underwriter from its obligations hereunder.
(d) DENOMINATIONS; REGISTRATION. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Representatives may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00 A.M. (Eastern time)
on the business day prior to the Closing Time or the relevant Date of Delivery,
as the case may be.
SECTION 3. COVENANTS OF THE COMPANY. The Company covenants with each
Underwriter as follows:
(a) COMPLIANCE WITH SECURITIES REGULATIONS AND COMMISSION REQUESTS.
The Company, subject to Section 3(b), will comply with the requirements of
Rule 430A or Rule 434, as applicable, and will notify the Representatives
immediately, and confirm the notice in writing, (i) when any post-effective
amendment to the Registration Statement shall become effective, or any
supplement to the Prospectus or any amended Prospectus shall have been
filed, (ii) of the receipt of any comments from the Commission, (iii) of
any request by the Commission for any amendment to the
13
Registration Statement or any amendment or supplement to the Prospectus or
for additional information, and (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, or of the initiation or threatening
of any proceedings for any of such purposes. The Company will promptly
effect the filings necessary pursuant to Rule 424(b) and will take such
steps as it deems necessary to ascertain promptly whether the form of
prospectuses transmitted for filing under Rule 424(b) was received for
filing by the Commission and, in the event that it was not, it will
promptly file such prospectuses. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) FILING OF AMENDMENTS. The Company will give the Underwriters
timely notice of its intention to prepare any amendment to the Registration
Statement (including any filing under Rule 462(b)), any Term Sheet or any
amendment, supplement or revision to either the prospectus included in the
Registration Statement at the time it became effective or any amendment,
supplement or revision to either the prospectuses included in the
Registration Statement at the time it became effective or to the
Prospectus, whether pursuant to the 1933 Act, the 1934 Act or otherwise,
will furnish the Representatives with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case
may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall object.
(c) DELIVERY OF REGISTRATION STATEMENTS. The Company has furnished or
will deliver to the Representatives and counsel for the Underwriters,
without charge, signed copies of the Registration Statement as originally
filed and of each amendment thereto (including exhibits filed therewith or
incorporated by reference therein and documents incorporated or deemed to
be incorporated by reference therein) and signed copies of all consents and
certificates of experts, and will also deliver to the Representatives,
without charge, a conformed copy of the Registration Statement as
originally filed and of each amendment thereto (without exhibits) for each
of the Underwriters. The copies of the Registration Statement and each
amendment thereto furnished to the Underwriters will be identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to ▇▇▇▇▇, except to the extent permitted by Regulation S-T.
(d) DELIVERY OF PROSPECTUS. The Company has delivered to each
Underwriter, without charge, as many copies of each preliminary prospectus
as such Underwriter reasonably requested, and the Company hereby consents
to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the period
when the Prospectus are required to be delivered under the 1933 Act or the
1934 Act, such number of copies of the Prospectus (as amended or
supplemented) as such Underwriter may reasonably request. The
14
Prospectus and any amendments or supplements thereto furnished to the
Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to ▇▇▇▇▇, except to the extent
permitted by Regulation S-T.
(e) CONTINUED COMPLIANCE WITH SECURITIES LAWS. The Company will
comply with the 1933 Act and the 1933 Act Regulations and the 1934 Act and
the 1934 Act Regulations so as to permit the completion of the distribution
of the Securities as contemplated in this Agreement and in the Prospectus.
If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Securities, any event shall occur
or condition shall exist as a result of which it is necessary, in the
opinion of counsel for the Underwriters or for the Company, to amend the
Registration Statement or amend or supplement the Prospectus in order that
the Prospectus will not include any untrue statements of a material fact or
omit to state a material fact necessary in order to make the statements
therein not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, or if it shall be necessary, in the
opinion of such counsel, at any such time to amend the Registration
Statement or amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Company will
promptly prepare and file with the Commission, subject to Section 3(b),
such amendment or supplement as may be necessary to correct such statement
or omission or to make the Registration Statement or the Prospectus comply
with such requirements, and the Company will furnish to the Underwriters
such number of copies of such amendment or supplement as the Underwriters
may reasonably request.
(f) BLUE SKY QUALIFICATIONS. The Company will use its best efforts,
in cooperation with the Underwriters, to qualify the Securities for
offering and sale under the applicable securities laws of such states and
other jurisdictions as the Representatives may designate and to maintain
such qualifications in effect for a period of not less than one year from
the later of the effective date of the Registration Statement and any Rule
462(b) Registration Statement; PROVIDED, HOWEVER, that the Company shall
not be obligated to file any general consent to service of process or to
qualify as a foreign corporation or as a dealer in securities in any
jurisdiction in which it is not so qualified or to subject itself to
taxation in respect of doing business in any jurisdiction in which it is
not otherwise so subject. In each jurisdiction in which the Securities
have been so qualified, the Company will file such statements and reports
as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from the
effective date of the Registration Statement and any Rule 462(b)
Registration Statement.
(g) RULE 158. The Company will timely file such reports pursuant to
the 1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the
purposes of, and to provide the benefits contemplated by, the last
paragraph of Section 11(a) of the 1933 Act.
15
(h) USE OF PROCEEDS. The Company will use the proceeds received from
the issue and sale of the Securities in the manner specified in the
Prospectus under the caption "Use of Proceeds".
(i) LISTING. The Company will use its best efforts to effect the
listing of the Securities on the New York Stock Exchange.
(j) RESTRICTION ON SALE OF SECURITIES. During a period of 90 days
from the date of the Prospectus, the Company (and the Company shall use its
best efforts to ensure that, in accordance with written lock-up letters
substantially in the form of Exhibit B hereto, executed by its officers,
directors and certain stockholders and delivered to the Representatives,
none of such officers, directors and stockholders, to the extent reflected
therein) will not, without the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, (i)
directly or indirectly, offer to sell, pledge, sell, grant any option,
warrant or other right to purchase, or otherwise transfer or dispose of (or
agree to do any of the foregoing) any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of
any share of Common Stock or any securities convertible into or exercisable
or exchangeable for Common Stock or file any registration statement under
the 1933 Act with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or
in part, directly or indirectly, the economic consequence of ownership of
any Common Stock, whether any such swap or transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or such
other securities, in cash, or otherwise. The foregoing sentence shall not
apply to the Securities to be sold hereunder.
SECTION 4. PAYMENT OF EXPENSES. (a) EXPENSES. The Company will pay
or cause to be paid all expenses incident to the performance of its obligations
under this Agreement, including (i) the preparation, printing and filing of the
Registration Statement (including financial statements and exhibits) as
originally filed and of each amendment thereto, (ii) the preparation, printing
and delivery to the Underwriters of this Agreement, any Agreement among
Underwriters and such other documents as may be required in connection with the
offering, purchase, sale, issuance or delivery of the Securities, (iii) the
preparation, issuance and delivery of the certificates for the Securities to the
Underwriters, including any stock or other transfer taxes and any stamp or other
duties payable upon the sale, issuance or delivery of the Securities to the
Underwriters, (iv) the fees and disbursements of the Company's counsel,
accountants and other advisors, (v) the qualification of the Securities under
securities laws in accordance with the provisions of Section 3(f) hereof,
including filing fees and the reasonable fees and disbursements of counsel for
the Underwriters in connection therewith and in connection with the preparation
of the Blue Sky Survey and any supplement thereto, (vi) the printing and
delivery to the Underwriters of copies of each preliminary prospectus, any Term
Sheets and of the Prospectus and any amendments or supplements thereto,
(vii) the preparation, printing and delivery to the Underwriters of copies of
the Blue Sky Survey and any supplement thereto, (viii) the fees and expenses of
any transfer agent or registrar for the Securities, (ix) the filing fees
incident to, and the reasonable fees and disbursements of counsel to the
Underwriters in connection with, the review by the National
16
Association of Securities Dealers, Inc. (the "NASD") of the terms of the sale of
the Securities and (x) the fees and expenses incurred in connection with the
listing of the Securities on the New York Stock Exchange.
(b) TERMINATION OF AGREEMENT. If this Agreement is terminated by the
Representatives in accordance with the provisions of Section 5, Section 9(a)(i)
or Section 10 hereof, the Company shall reimburse the Underwriters for all of
their out-of-pocket expenses, including the reasonable fees and disbursements of
counsel for the Underwriters.
SECTION 5. CONDITIONS OF UNDERWRITERS' OBLIGATION. The obligations
of the several Underwriters hereunder are subject to the accuracy of the
representations and warranties of the Company contained in Section 1 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:
(a) EFFECTIVENESS OF REGISTRATION STATEMENT. The Registration
Statement, including any Rule 462(b) Registration Statement, has become
effective and at Closing Time no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the Commission, and any
request on the part of the Commission for additional information shall have
been complied with to the reasonable satisfaction of counsel to the
Underwriters. A prospectus containing the Rule 430A Information shall have
been filed with the Commission in accordance with Rule 424(b) (or a
post-effective amendment providing such information shall have been filed
and declared effective in accordance with the requirements of Rule 430A)
or, if the Company has elected to rely upon Rule 434, a Term Sheet shall
have been filed with the Commission in accordance with Rule 424(b).
(b) OPINION OF COUNSEL FOR THE COMPANY. At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Green, P.C., counsel for the Company, in
form and substance satisfactory to counsel for the Underwriters, together
with signed or reproduced copies of such letter for each of the other
Underwriters to the effect set forth in Exhibit A hereto and to such
further effect as counsel to the Underwriters may reasonably request.
(c) OPINION OF COUNSEL FOR UNDERWRITERS. At the Closing Time, the
Representatives shall have received the favorable opinion, dated as of the
Closing Time, of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters,
together with signed or reproduced copies of such letter for each of the
other Underwriters with respect to the matters set forth in clauses (i),
(ii), (iv), (v) (solely as to preemptive or other similar rights arising by
operation of law or under the charter or by-laws of the Company), (vi)
through (viii), inclusive, (x), (xii) (solely as to the information in the
Prospectus under "Description of the Capital Stock") and the second to last
paragraph of Exhibit A hereto. In giving such opinion, such counsel may
rely, as to all matters
17
governed by the laws of jurisdictions other than the law of the State of
New York, the federal law of the United States and the General Corporation
Law of the State of Delaware, upon the opinions of counsel satisfactory to
the Representatives. Such counsel may also state that, insofar as such
opinion involves financial matters, they have relied, to the extent they
deem proper, upon certificates of officers of the Company and certificates
of public officials.
(d) OFFICERS' CERTIFICATE. At the Closing Time, there shall not have
been, since the date hereof or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, and
the Representatives shall have received a certificate of the President or a
Vice President of the Company and of the chief financial or chief
accounting officer of the Company, dated as of the Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct
with the same force and effect as though expressly made at and as of the
Closing Time, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to the Closing Time, and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or are
contemplated by the Commission.
(e) ACCOUNTANT'S COMFORT LETTER OF E&Y. At the time of the execution
of this Agreement, the Representatives shall have received from E&Y a
letter dated such date, in form and substance satisfactory to the
Representatives, together with signed or reproduced copies of such letter
for each of the other Underwriters containing statements and information of
the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement and the Prospectus.
(f) ACCOUNTANT'S COMFORT LETTER OF ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. At the time of
the execution of this Agreement, the Representatives shall have received
from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ a letter dated such date in form and substance
satisfactory to the Representatives, together with signed or reproduced
copies of such letter for each of the other Underwriters containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement
and the Prospectus.
(g) BRING-DOWN COMFORT LETTER OF E&Y. At the Closing Time, the
Representatives shall have received from E&Y a letter, dated as of the
Closing Time, to the effect that they reaffirm the statements made in the
letter furnished pursuant to subsection (e) of this Section, except that
the specified date referred to shall be a date not more than three business
days prior to the Closing Time.
18
(h) BRING-DOWN COMFORT LETTER OF ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇. At Closing Time,
the Representatives shall have received from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ a letter,
dated as of Closing Time, to the effect that they reaffirm the statements
made in the letter furnished pursuant to subsection (f) of this Section,
except that the specified date referred to shall be a date not more than
three business days prior to Closing Time.
(i) APPROVAL OF LISTING. At the Closing Time, the Securities shall
have been approved for listing on the New York Stock Exchange, subject only
to official notice of issuance.
(j) LITIGATION. At the Closing Time, there shall not be any pending
or threatened legal or governmental proceedings against the Company with
respect to any of the transactions contemplated in this Agreement.
(k) LOCK-UP AGREEMENTS. At the date of this Agreement, the
Representatives shall have received an agreement substantially in the form
of Exhibit B hereto and to the effect set forth in Section 3(j) hereof
signed by each of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇.
▇'▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ and the Estate
of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
(l) CONDITIONS TO PURCHASE OF OPTION SECURITIES. In the event that
the Underwriters exercise their option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations
and warranties of the Company contained herein and the statements in any
certificates furnished by the Company, any subsidiary of the Company
hereunder shall be true and correct as of each Date of Delivery and, at the
relevant Date of Delivery, the Representatives shall have received:
(i) OFFICERS' CERTIFICATE. A certificate, dated such Date of
Delivery, of the President or a Vice President of the Company and of
the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at the Closing Time pursuant
to Section 5(d) hereof remains true and correct as of such Date of
Delivery.
(ii) OPINION OF COUNSEL FOR COMPANY. The favorable opinion of
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Green, P.C., counsel for the Company, in form and
substance satisfactory to counsel for the Underwriters, dated such
Date of Delivery, relating to the Option Securities to be purchased on
such Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(b) hereof.
(iii) OPINION OF COUNSEL FOR UNDERWRITERS. The favorable
opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters,
dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of
19
Delivery and otherwise to the same effect as the opinion required by
Section 5(c) hereof.
(iv) BRING-DOWN COMFORT LETTER. (a) A letter from E&Y, in form
and substance satisfactory to the Representatives and dated such Date
of Delivery, substantially in the same form and substance as the
letter furnished to the Representatives pursuant to Section 5(g)
hereof, except that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than five days
prior to such Date of Delivery and (b) a letter from ▇▇▇▇▇▇ Anderson,
in form and substance satisfactory to the Representatives and dated
such Date of Delivery, substantially in the same form and substance as
the letter furnished to the Representatives pursuant to Section 5(h)
hereof, except that the "specified date" in the letter furnished
pursuant to this paragraph shall be a date not more than five days
prior to such Date of Delivery.
(m) ADDITIONAL DOCUMENTS. At the Closing Time and at each Date of
Delivery counsel for the Underwriters shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company in connection
with the issuance and sale of the Securities as herein contemplated shall
be satisfactory in form and substance to the Representatives and counsel
for the Underwriters.
(n) TERMINATION OF AGREEMENT. If any condition specified in this
Section shall not have been fulfilled when and as required to be fulfilled,
this Agreement, or, in the case of any condition to the purchase of Option
Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option
Securities, may be terminated by the Representatives by notice to the
Company at any time at or prior to the Closing Time or such Date of
Delivery, as the case may be, and such termination shall be without
liability of any party to any other party except as provided in Section 4
and except that Sections 1, 6, 7 and 8 shall survive any such termination
and remain in full force and effect.
SECTION 6. INDEMNIFICATION
(a) INDEMNIFICATION OF UNDERWRITERS. The Company agrees to indemnify
and hold harmless each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act 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 the Registration Statement
(or any amendment thereto), including the Rule 430A Information and the
Rule 434 Information, if applicable, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of
20
any untrue statement or alleged untrue statement of a material fact
included in any preliminary prospectus or the 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 any 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; PROVIDED that (subject to Section
6(d) below) any such settlement is effected with the written consent of the
Company; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(d) hereof, the reasonable fees and disbursements of
counsel chosen by ▇▇▇▇▇▇▇ ▇▇▇▇▇), reasonably incurred in investigating,
preparing or defending against any litigation, or 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) above;
PROVIDED, HOWEVER, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in the Registration
Statement (or any amendment thereto), including the Rule 430A Information and
the Rule 434 Information, if applicable, or any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto); PROVIDED FURTHER that the
foregoing indemnification with respect to any Prospectus shall not inure to the
benefit of any Underwriter (or any person controlling such Underwriter) from
whom the person asserting any such losses, claims, damages or liabilities
purchased any of the Securities if a copy of the Prospectus (as then amended or
supplemented if the Company shall have furnished any amendments or supplements
thereto) was not sent or given by or on behalf of such Underwriter on the
initial resale to such person, if such is required by law, at or prior to the
written confirmation of the sale of such Securities to such person and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such loss, claim, damage or liability.
(b) INDEMNIFICATION OF COMPANY. Each Underwriter severally agrees to
indemnify and hold harmless the Company, its directors and each of its officers
who signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the 1933 Act or Section 20 of the
1934 Act, against any and all loss, liability, claim, damage and expense
described in the indemnity agreement in Section 6(a) hereof, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement (or any amendment thereto),
21
including the Rule 430A Information and the Rule 434 Information, if applicable,
or any preliminary prospectus or the Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by such Underwriter through ▇▇▇▇▇▇▇ ▇▇▇▇▇ expressly for use in
the Registration Statement (or any amendment thereto) or such preliminary
prospectus or the Prospectus (or any amendment or supplement thereto).
(c) ACTIONS AGAINST PARTIES; NOTIFICATION. 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, but failure to
so notify an indemnifying party shall not relieve it from any liability that it
may have otherwise than on account of this indemnity agreement. In the case of
parties indemnified pursuant to Section 6(a) above, counsel to the indemnified
parties shall be selected by ▇▇▇▇▇▇▇ ▇▇▇▇▇. An indemnifying party may
participate at its own expense in the defense of such action; PROVIDED, HOWEVER,
that counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall
the indemnifying party or parties be liable for the fees and expenses of more
than one 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. If it so elects within a
reasonable time after receipt of such notice, an indemnifying party, jointly
with any other indemnifying parties receiving such notice, may assume the
defense of such action with counsel chosen by it (subject to the approval of the
indemnified parties defendant in such action, which approval shall not be
unreasonably withheld) unless such indemnified parties reasonably object to such
assumption on the ground that there may be legal defenses available to them
which are different from or are in conflict with those available to such
indemnifying party. If an indemnifying party assumes the defense of such
action, the indemnifying parties shall not be liable for any fees and expenses
of counsel for the indemnified party incurred thereafter in connection with such
action.
(d) SETTLEMENT WITHOUT CONSENT IF FAILURE TO REIMBURSE. If at any
time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for reasonable fees and expenses of counsel,
such indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 6(a)(ii) effected without its written consent if
(i) such settlement is entered into more than 45 days after receipt by such
indemnifying party of the aforesaid request, (ii) such indemnifying party shall
have received notice of the terms of such settlement at least 30 days prior to
such settlement being entered into and (iii) such indemnifying party shall not
have reimbursed such indemnified party in accordance with such request prior to
the date of such settlement. Notwithstanding the immediately preceding
sentence, if at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, an indemnifying party shall not be liable for any settlement of the
nature contemplated by Section 6(a)(ii) hereof effected without its consent if
such indemnifying party (i) reimburses such indemnified party in accordance with
such request to the extent it considers such request to be reasonable and (ii)
provides written notice to the indemnified party reasonably substantiating the
unpaid balance as unreasonable, in each case prior to the date of such
settlement.
22
SECTION 7. CONTRIBUTION. If the indemnification provided for in
Section 6 hereof is for any reason unavailable to or insufficient to hold
harmless an indemnified party in respect of any losses, liabilities, claims,
damages or expenses referred to therein, then each indemnifying party shall
contribute to the aggregate amount of such losses, liabilities, claims, damages
and expenses incurred by such indemnified party, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Securities pursuant to this Agreement or (ii) if the allocation provided
by clause (i) is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and of the
Underwriters on the other hand in connection with the statements or omissions,
which resulted in such losses, liabilities, claims, damages or expenses, as well
as any other relevant equitable considerations.
The relative fault of the Company on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
any such untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Company or by the Underwriters and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party 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 or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section 7, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the ▇▇▇▇ ▇▇▇) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who
23
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Company.
The Underwriters' respective obligations to contribute pursuant to this Section
7 are several in proportion to the number of Initial Securities set forth
opposite their respective names in Schedule A hereto and not joint.
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement or in certificates of officers of the Company or any of its
subsidiaries submitted pursuant hereto, shall remain operative and in full force
and effect, regardless of any investigation made by or on behalf of any
Underwriter or controlling person, or by or on behalf of the Company and shall
survive delivery of the Securities to the Underwriters.
SECTION 9. TERMINATION OF AGREEMENT. (a) TERMINATION; GENERAL. The
Representatives may terminate this Agreement, by notice to the Company, at any
time at or prior to the Closing Time (i) if there has been, since the time of
execution of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business, or
(ii) if there has occurred any material adverse change in the financial markets
in the United States or the international financial markets, any outbreak of
hostilities or escalation thereof or other calamity or crisis or any change or
development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Representatives, impracticable to
market the Securities or to enforce contracts for the sale of the Securities, or
(iii) if trading in any securities of the Company has been suspended by the
Commission or the New York Stock Exchange, or if trading generally on the New
York Stock Exchange, the American Stock Exchange or the Nasdaq National Market
has been suspended, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices for securities have been required, by such exchange or
by order of the Commission or any other governmental authority or (iv) if a
banking moratorium has been declared by either federal or New York State
authorities.
(b) LIABILITIES. If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other party
except as provided in Section 4 hereof, and provided further that Sections 1, 6,
7 and 8 shall survive such termination and remain in full force and effect.
SECTION 10. DEFAULT BY ONE OR MORE OF THE UNDERWRITERS. If one or
more of the Underwriters shall fail at the Closing Time to purchase the Firm
Securities that it or they are obligated to purchase pursuant to this Agreement
(the "Defaulted Securities"), the Representatives shall have the right, within
24 hours thereafter, to make arrangements for one or more of the non-defaulting
Underwriters, or any other underwriters, to purchase all, but not less than all,
of the Defaulted Securities in such amounts as may be agreed upon and upon the
terms set forth in this Agreement; if, however, the Representatives have not
completed such arrangements within such 24-hour period, then:
24
(a) if the number of Defaulted Securities does not exceed 10% of the
number of Securities to be purchased on such date, each of the non-defaulting
Underwriters shall be obligated, severally and not jointly, to purchase the full
amount thereof in the proportions that their respective underwriting obligations
hereunder bear to the underwriting obligations of all non-defaulting
Underwriters, or
(b) if the number of Defaulted Securities exceeds 10% of the number of
Securities to be purchased on such date, this Agreement or, with respect to any
Date of Delivery which occurs after the Closing Time, the obligation of the
Underwriters to purchase and of the Company to sell the Option Securities to be
purchased and sold on such Date of Delivery shall terminate without liability on
the part of any non-defaulting Underwriter.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement or, in the case of a Date of Delivery which is
after the Closing Time, which does not result in a termination of the obligation
of the Underwriters to purchase and the Company to sell the relevant Option
Securities, as the case may be, either (i) the Representatives or (ii) the
Company shall have the right to postpone the Closing Time or the relevant Date
of Delivery, as the case may be, for a period not exceeding seven days in order
to effect any required changes in the Registration Statement or Prospectus or in
any other documents or arrangements. As used herein, the term "Underwriter"
includes any person substituted for an Underwriter under this Section 10.
SECTION 11. NOTICES. All notices and other communications under the
Agreement shall be in writing and shall be deemed to have been duly given, upon
receipt, if delivered, mailed or transmitted by any standard form of
telecommunication. Notices to the Underwriters shall be directed to the
Representatives at ▇▇▇▇▇▇▇ ▇▇▇▇▇ World Headquarters, North Tower, World
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (telecopier no.: (212)
449-2993), attention of ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (telecopier no.: (212)
455-2502), attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.; and notices to the Company shall be
directed to it at Frontier Insurance Group, Inc., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (telecopier no.: (▇▇▇) ▇▇▇-▇▇▇▇), attention of ▇▇▇▇▇
▇. ▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & Green, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (telecopier no.: (▇▇▇) ▇▇▇-▇▇▇▇), attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
SECTION 12. PARTIES. This Agreement shall each inure to the benefit
of and be binding upon the Underwriters, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters, the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 6 and 7 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all conditions and provisions hereof are intended to be for the
sole and exclusive benefit of the
25
Underwriters, the Company and their respective successors, and said controlling
persons and officers and directors and their heirs and legal representatives,
and for the benefit of no other person, firm or corporation. No purchaser of
Securities from any Underwriter shall be deemed to be a successor by reason
merely of such purchase.
SECTION 13. REPRESENTATION OF UNDERWRITERS. The Representatives will
act for the several Underwriters in connection with the transactions
contemplated by this Agreement, and any action under or in respect of this
Agreement taken by you as Representatives will be binding upon all the
Underwriters.
SECTION 14. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 17. COUNTERPARTS. This Agreement may be executed in one or
more counterparts and when a counterpart has been executed by each party, all
such counterparts taken together shall constitute one and the same agreement.
SECTION 15. EFFECT OF HEADINGS. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
26
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Company and the several Underwriters in accordance with its terms.
Very truly yours,
FRONTIER INSURANCE GROUP, INC.
By
---------------------------------
Name:
Title:
Confirmed and accepted as of
the date first above written:
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
▇▇▇▇▇▇▇▇▇▇▇ & CO., INC.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇▇ INC.
By ▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
By
-------------------------------------
Name:
Title:
SCHEDULE A to
Purchase Agreement
Number of
Name of Underwriter Initial Shares
------------------- --------------
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation
▇▇▇▇▇▇▇▇▇▇▇ & Co., Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇▇▇ Inc. -------------
Total =============
SCHEDULE B to
PURCHASE AGREEMENT
[1] Shares of Common Stock
FRONTIER INSURANCE GROUP, INC.
(par value $.01 per share)
1. The public offering price per share for the Securities, determined as
provided in Section 2, shall be $[ ].
2. The purchase price per share for the Securities to be paid by the
several Underwriters shall be $[ ], being an amount equal to the public
offering price set forth above less $[ ] per share; PROVIDED that the purchase
price per share for any Option Securities purchased upon the exercise of the
over-allotment option described in Section 2(b) shall be reduced by an amount
per share equal to any dividends or distributions payable after the Closing Time
but before the relevant date of delivery to the Underwriter of the Option
Securities.
EXHIBIT A to
Purchase Agreement
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(b)
As used in such opinion, (i) the term "Applicable Laws" means only the General
Corporation Law of the State of Delaware and those laws, rules and regulations
of the State of New York or the United States of America which are ordinarily
applicable to transactions of the type contemplated by the Purchase Agreement;
(ii) the term "Governmental Approval" means any consent, approval, license,
order, authorization or validation of, or filing, qualification or registration
with, or decree of, any Governmental Authority pursuant to Applicable Laws; and
(iii) the term "Governmental Authority" means any New York or United States
federal legislative, judicial, administrative or regulatory body under
Applicable Laws.
(i) The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease
and operate its properties and conduct its business, as described in the
Prospectus and to enter into and perform the obligations under the Purchase
Agreement.
(iii) The authorized, issued and outstanding capital stock of the
Company is as set forth in the Prospectus in the column entitled "Actual"
under the caption "Capitalization" (except for subsequent issuances, if
any, pursuant to the Purchase Agreement or pursuant to reservations,
agreements or employee benefit plans referred to in the Prospectus or
pursuant to the exercise of convertible securities or options referred to
in the Prospectus); the shares of issued and outstanding capital stock of
the Company have been duly authorized and validly issued and are fully paid
and non-assessable; and none of the outstanding shares of capital stock of
the Company was issued in violation of the preemptive or other similar
rights of any securityholder of the Company.
(iv) The Securities to be purchased by the Underwriters from the
Company have been duly authorized for issuance and sale to the Underwriters
pursuant to the Purchase Agreement and, when issued and delivered by the
Company pursuant to the Purchase Agreement against payment of the
consideration set forth in the Purchase Agreement, will be validly issued
and fully paid and non-assessable and no holder of the Securities is or
will be subject to personal liability by reason of being such a holder.
(v) The issuance and sale of the Securities by the Company is
not subject to the preemptive or other similar rights of any securityholder
of the Company.
(vi) The Purchase Agreement has been duly authorized, executed
and delivered by the Company.
2
(vii) The Registration Statement, including any Rule 462(b)
Registration Statement, has been declared effective under the 1933 Act; any
required filing of the Prospectus pursuant to Rule 424(b) has been made in
the manner and within the time period required by Rule 424(b); and, to the
best of our knowledge, no stop order suspending the effectiveness of the
Registration Statement or any Rule 462(b) Registration Statement has been
issued under the 1933 Act and no proceedings for that purpose have been
instituted or are pending or threatened by the Commission.
(viii) The Registration Statement, including any Rule 462(b)
Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the
Registration Statement and Prospectus, excluding the documents incorporated
by reference therein, as of their respective effective or issue dates
(other than the financial statements and supporting schedules included
therein or omitted therefrom, as to which we need express no opinion)
complied as to form in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations.
(ix) The documents incorporated by reference in the Prospectus
(other than the financial statements and supporting schedules included
therein or omitted therefrom, as to which we need express no opinion), when
they were filed with the Commission, complied as to form in all material
respects with the requirements of the 1934 Act and the rules and
regulations of the Commission thereunder.
(x) The form of certificate used to evidence the Common Stock
complies in all material respects with all applicable statutory
requirements, with any applicable requirements of the charter and by-laws
of the Company and the requirements of the New York Stock Exchange.
(xi) To the best of our knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation, to which
the Company or any subsidiary is a party, or to which the property of the
Company or any subsidiary is subject, before or brought by any court or
governmental agency or body, domestic or foreign, which might reasonably be
expected to result in a Material Adverse Effect, or which might reasonably
be expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in the
Purchase Agreement or the performance by the Company of its obligations
thereunder.
(xii) The information in the Prospectus under "Description of
Capital Stock", "Business--Regulation", "Business--Properties" and " " and
in the Registration Statement under Item 15, to the extent that it
constitutes matters of law, summaries of legal matters, the Company's
charter and by-laws or legal proceedings, or legal conclusions, has been
reviewed by us and is correct in all material respects.
(xiii) To the best of our knowledge, there are no statutes or
regulations that are required to be described in the Prospectus that are
not described as required.
3
(xiv) All descriptions in the Registration Statement of contracts
and other documents to which the Company or its subsidiaries are a party
are accurate in all material respects; to the best of our knowledge, there
are no franchises, contracts, indentures, mortgages, loan agreements,
notes, leases or other instruments required to be described or referred to
in the Registration Statement or to be filed as exhibits thereto other than
those described or referred to therein or filed or incorporated by
reference as exhibits thereto, and the descriptions thereof or references
thereto are correct in all material respects.
(xv) To the best of our knowledge, neither the Company nor any
subsidiary is in violation of its charter or by-laws and no default by the
Company or any subsidiary exists in the due performance or observance of
any material obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument that is described or referred to in the
Registration Statement or the Prospectus or filed or incorporated by
reference as an exhibit to the Registration Statement.
(xvi) No Governmental Approval normally applicable to transactions
of the type contemplated by the Purchase Agreement (other than under the
1933 Act and the 1933 Act Regulations, which have been obtained, state
securities or "blue sky" laws and the rules and regulations of the New York
Stock Exchange or the NASD, as to which no opinion need be expressed) is
required for the issuance and sale of the Securities by the Company to the
Underwriters pursuant to the Purchase Agreement and the performance by the
Company of its obligations under the Purchase Agreement.
(xvii) The execution, delivery and performance of the Purchase
Agreement and the consummation of the transactions contemplated in the
Purchase Agreement and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from the
sale of the Securities as described in the Prospectus under the caption
"Use Of Proceeds") and compliance by the Company with its obligations under
the Purchase Agreement do not and will not, whether with or without the
giving of notice or lapse of time or both, conflict with or constitute a
breach of, or default or Repayment Event (as defined in Section 1(a)(xi) of
the Purchase Agreement) under or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the Company
or any subsidiary pursuant to (A) any agreement or instrument to which the
Company is a party and which is identified in such counsel's opinion (which
shall not include insurance treaties), (B) any Applicable Law, or (C) to
the knowledge of such counsel, any judgment, order or decree under
Applicable Laws of any New York or United States federal government,
governmental instrumentality or court having jurisdiction over the Company
or any of its properties., nor will such action result in any violation of
the provisions of the charter or by-laws of the Company or any subsidiary,
or any applicable law, statute, rule, regulation, judgment, order, writ or
decree, known to us, of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
subsidiary or any of their respective properties, assets or operations. We
need express no opinion, however, as to whether the execution, delivery and
performance by the Company of
4
any of the agreements executed and delivered in connection with the
transactions contemplated hereby will constitute a violation of or a
default under any covenant, restriction or provision with respect to
financial ratios or tests or any aspect of the financial condition or
results of operations of the Company or the rules and regulations of the
New York Stock Exchange.
(xviii) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined in the
1940 Act.
In addition, such opinion shall include a statement that such counsel
have participated in the preparation of the Registration Statement and
Prospectus and in conference with officers and other representatives of the
Company, representatives of the independent public accountants for the Company,
and with the Representatives and Underwriters' counsel at which the contents of
the Registration Statement and Prospectus and related matters were discussed
and, although such counsel need not pass upon or assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus, on the basis of the foregoing, nothing
has come to our attention that would lead such counsel to believe that the
Registration Statement or any amendment thereto, including the Rule 430A
Information and Rule 434 Information (if applicable), (except for financial
statements and schedules and other financial data included or incorporated by
reference therein or omitted therefrom, as to which such counsel need make no
statement), at the time such Registration Statement or any such amendment became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus or any amendment or
supplement thereto (except for financial statements and schedules and other
financial data included or incorporated by reference therein or omitted
therefrom, as to which such counsel need make no statement), at the time the
Prospectus was issued, at the time any such amended or supplemented prospectuses
were issued or at the Closing Time, included or includes an untrue statement of
a material fact or omitted or omits to state a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.
Such opinion shall be to such further effect with respect to other
legal matters relating to the Purchase Agreement and the Securities as counsel
for the Underwriters may reasonably request. Such counsel may also rely upon
the written opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq. with respect to insurance regulatory
matters under paragraphs (xiii) and (xvii) above (which opinion is dated and
furnished to the Representatives at the Closing Time, shall be satisfactory in
form and substance to counsel for the Underwriters and shall expressly state
that the Underwriters may rely on such opinion as if it were addressed to them),
PROVIDED that such counsel shall state in their opinion that they believe that
they and the Underwriters are justified in relying on such opinion. In
addition, in giving such opinion, such counsel may state that, insofar as such
opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers of the Company and its subsidiaries and
certificates of public officials, PROVIDED that such certificates have been
delivered to the Underwriters.
EXHIBIT B to
Purchase Agreement
FORM OF LOCK-UP AGREEMENT
_____________, 1997
▇▇▇▇▇▇▇ ▇▇▇▇▇ & CO.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇▇▇▇▇, LUFKIN & ▇▇▇▇▇▇▇▇ SECURITIES CORPORATION
▇▇▇▇▇▇▇▇▇▇▇ & CO., INC.
▇▇▇▇▇ ▇▇▇▇▇▇ INC.
▇▇▇▇▇▇▇▇ INC.
As Representatives of the
several Underwriters
▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇.
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Proposed Public Offering by Frontier Insurance Group, Inc.
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Ladies and Gentlemen:
The undersigned officer, director or shareholder of Frontier Insurance
Group, Inc., a Delaware corporation (the "Company"), understands that a Purchase
Agreement (the "Purchase Agreement") will be executed by the Company and ▇▇▇▇▇▇▇
▇▇▇▇▇ & Co., ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇
▇▇▇▇▇") and each of the other Underwriters named in Schedule A hereto
(collectively, the "Underwriters", which term shall also include any underwriter
substituted as hereinafter provided in Section 10 therein), for whom ▇▇▇▇▇▇▇
Lynch, Donaldson, Lufkin & ▇▇▇▇▇▇▇▇ Securities Corporation, ▇▇▇▇▇▇▇▇▇▇▇ & Co.,
Inc., ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and ▇▇▇▇▇▇▇▇ Inc. are acting as representatives (in such
capacity, the " Representatives"), with respect to (i) the sale by the Company,
and the purchase by the Underwriters, acting severally and not jointly, of the
respective numbers of shares of Common Stock, par value $.01 per share ("Common
Stock"), of the Company set forth in Schedule A hereto ("Initial Securities")
and (ii) the grant by the Company to the Underwriters, acting severally and not
jointly, of the option described in Section 2(b) therein to purchase all or any
part of [11] additional shares of Common Stock ("Option Securities", together
with the Initial Securities, the " Securities") to cover over-allotments, if
any.
2
This Lock-Up Letter Agreement is being entered into in accordance with
Section 4(l) of the Purchase Agreement at the request of the Underwriters. Any
capitalized term used and not defined herein shall have the meaning ascribed to
it in the Purchase Agreement.
In recognition of the benefit that such an offering will confer upon
the undersigned as a stockholder [and an officer and/or director] of the
Company, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned agrees with each
underwriter to be named in the Purchase Agreement that, during a period of 90
days from the date of the Purchase Agreement, the undersigned will not, without
the prior written consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇, directly or indirectly, (i) offer,
pledge, sell, contract to sell, sell any option or contract to purchase,
purchase any option or contract to sell, grant any option, right or warrant for
the sale of, or otherwise dispose of or transfer any shares of the Company's
Common Stock or any securities convertible into or exchangeable or exercisable
for Common Stock, whether now owned or hereafter acquired by the undersigned or
with respect to which the undersigned has or hereafter acquires the power of
disposition, or file any registration statement under the Securities Act of
1933, as amended, with respect to any of the foregoing or (ii) enter into any
swap or any other agreement or any transaction that transfers, in whole or in
part, directly or indirectly, the economic consequence or ownership of the
Common Stock, whether any such swap or transactio is to be settled by delivery
of Common Stock or other securities, in cash or otherwise.
The undersigned understands that the Company and the Underwriters will
proceed with the sale of the Securities pursuant to the Purchase Agreement in
reliance on this Lock-Up Letter Agreement.
The undersigned hereby represents and warrants that the undersigned
has full power and authority to enter into this Lock-Up Letter Agreement and
that, upon request, the undersigned will execute any additional documents
necessary or desirable in connection with the enforcement hereof. All authority
herein conferred or agreed to be conferred shall survive the death or incapacity
of the undersigned and any obligations of the undersigned hereunder shall be
binding upon the heirs, representatives, executors and beneficiaries of the
undersigned. Except as expressly provided above, the rights and obligations of
the undersigned may not be assigned without the prior written consent of ▇▇▇▇▇▇▇
▇▇▇▇▇.
This Lock-Up Letter Agreement has been entered into on the date first
above written.
Very truly yours,
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Name: