Exhibit 10.46
SAFETY INSURANCE GROUP, INC.
STOCK PURCHASE AGREEMENT
June 28, 2002
TABLE OF CONTENTS
Page
1. Purchase and Sale of Stock..............................................1
2. Representations and Warranties of the Company...........................1
3. Representations and Warranties of Purchaser.............................2
4. Conditions to Purchaser's Obligation at Closing.........................3
5. Conditions to the Company's Obligation at Closing.......................4
6. Termination.............................................................4
7. Miscellaneous...........................................................4
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STOCK PURCHASE AGREEMENT
THIS
STOCK PURCHASE AGREEMENT (this "Agreement") is made as of the
28th day of June, 2002, by and between Safety Insurance Group, Inc., a Delaware
corporation (the "Company"), and Fairholme Partners, L.P., a Delaware limited
partnership ("Purchaser").
WHEREAS, the Company plans to conduct an initial public offering (the
"IPO") of its common stock, par value $0.01 per share (the "Common Stock"); and
WHEREAS, the Company wishes to sell to Purchaser, and Purchaser wishes
to purchase from the Company, shares of Common Stock, as provided herein.
NOW, THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF STOCK.
1.1 SALE AND ISSUANCE OF SHARES. Subject to the terms and conditions of
this Agreement, the Company agrees to issue and sell and Purchaser agrees to
purchase directly from the Company, 350,000 shares of Common Stock (the
"Shares") on a non-underwritten basis. The purchase price per share for the
Shares will be equal to the price to the public of shares of Common Stock in the
IPO, as set forth on the cover of the final prospectus for the IPO.
1.2 THE CLOSING. The closing (the "Closing") of the purchase and sale of
the Shares shall be held at the offices of LeBoeuf, Lamb, Xxxxxx & XxxXxx,
L.L.P., 000 Xxxx 00 Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other place as the
Company and Purchaser shall agree, simultaneously with the closing (i.e., the
Company shall have received payment from the underwriters for the shares of
Common Stock to be issued and delivered in the IPO and shall have issued the
shares to the underwriters) of the IPO (without regard to the closing of any
overallotment option granted to the underwriters in connection with the IPO). At
the Closing, the Company will deliver certificates for the Shares registered in
the name of Purchaser against payment of the purchase price therefor. At the
option of Purchaser, such payment shall be made either (i) by wire transfer in
immediately available funds to an account or accounts specified by the Company,
or (ii) by netting it from the amount to be paid Purchaser by the Company at the
closing of the IPO in repayment of the Company's 13% senior subordinated notes
held by Purchaser. If for any reason the sale of Common Stock in the IPO is
rescinded after the closing thereof, Purchaser shall have the right to rescind
its purchase hereunder.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to Purchaser that:
2.1 The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to execute and deliver this Agreement and to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The Company is duly authorized to execute, deliver and
perform this Agreement. This Agreement has been duly executed and delivered by
Company, is a valid and binding agreement of Company, and is enforceable against
Company in accordance with its terms, except to the extent that enforceability
may be limited by (i) bankruptcy,
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reorganization, liquidation, rehabilitation, insolvency, moratorium or other
laws affecting creditors' rights generally and (ii) general principles of equity
(regardless of whether enforceability is considered in a proceeding at law or
equity). The execution, delivery and performance by Company of this Agreement do
not violate or conflict with or result in a breach of or constitute (or with
notice or lapse of time or both would constitute) a default under Company's
certificate of incorporation or by-laws, or any material agreement to which
Company is a party; and no consents, approvals, authorizations, orders,
registrations or qualifications of or with any court or governmental agency or
body or any third party is required for the execution, delivery or performance
by Company of this Agreement.
2.2 As of the closing of the IPO, the Company will have an authorized
capitalization consisting of 30,000,000 shares of Common Stock and 5,000,000
shares of preferred stock. The Shares, when issued and delivered in accordance
with the terms hereof, will be duly authorized, validly issued, fully paid and
non-assessable and will be free and clear of all liens, security interests,
claims or encumbrances of any nature.
2.3 Subject to the accuracy of the representations and warranties of
Purchaser in Section 3, the offer and sale of the Shares hereunder are exempt
from registration under the Securities Act of 1933, as amended (the "Securities
Act") pursuant to Section 4(2) thereof.
2.4 The representations in this Section 2 are all subject to the execution
and delivery by the Company, Purchaser and all other parties thereto of the
Omnibus Agreement, dated as of June 25, 2002 (the "Omnibus Agreement"), and to
the filing of the Amended and Restated Certificate of Incorporation of the
Company referred to therein (the "Restated COI") with the Secretary of State of
the State of Delaware.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser hereby
represents and warrants that:
3.1 The Purchaser has been duly organized and is validly existing as a
limited partnership in good standing under the laws of the State of Delaware,
with partnership power and authority to execute and deliver this Agreement and
to perform its obligations hereunder and to consummate the transactions
contemplated hereby. Purchaser is duly authorized to execute, deliver and
perform this Agreement. This Agreement has been duly executed and delivered by
Purchaser, is a valid and binding agreement of Purchaser, and is enforceable
against Purchaser in accordance with its terms, except to the extent that
enforceability may be limited by (i) bankruptcy, reorganization, liquidation,
rehabilitation, insolvency, moratorium or other laws affecting creditors' rights
generally and (ii) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or equity). The execution,
delivery and performance by Purchaser of this Agreement do not violate or
conflict with or result in a breach of or constitute (or with notice or lapse of
time or both would constitute) a default under Purchaser's organizational
documents, or any agreement to which Purchaser is a party; and no consents,
approvals, authorizations, orders, registrations or qualifications of or with
any court or governmental agency or body or any third party is required for the
execution, delivery or performance by Purchaser of this Agreement.
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3.2 This Agreement is made with Purchaser in reliance upon Purchaser's
representation to the Company, which by Purchaser's execution of this Agreement
Purchaser hereby confirms, that the Shares will be acquired for investment for
Purchaser's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that Purchaser has no present
intention of selling, granting any participation in, or otherwise distributing
the same.
3.3 Purchaser understands that the Shares it is purchasing have not been
registered under the Securities Act, and absent registration, may not be offered
or sold within the United States except pursuant to an exemption from such laws
or in a transaction not subject to the registration requirements of the
Securities Act. In this connection, Purchaser represents that it is familiar
with Rule 144 under the Securities Act, as presently in effect, and understands
the resale limitations imposed thereby and by the Securities Act.
3.4 Purchaser is an accredited investor, as such term is defined under
Regulation D of the Securities Act, which acting for its own account, owns and
invests on a discretionary basis over $82.0 million in equity securities and
over $7.0 million in fixed income securities of issuers that are not affiliated
with Purchaser. The foregoing unaudited values were true and correct as of June
28, 2002, and are based upon the market value of such securities, where there is
a public market for such securities, and on cost, where there is no public
market for such securities.
3.5 The Company has afforded Purchaser and Purchaser's advisors, if any,
the opportunity to discuss an investment in the Company and to ask questions of
representatives of the Company concerning the terms and conditions of the
offering of the Shares and any operative documents, and such representatives
have provided answers to all such questions concerning the offering of the
Shares and any such operative documents. Purchaser has consulted its own
financial, tax, accounting and legal advisors, if any, as to Purchaser's
investment in the Company and the consequences thereof and risks associated
therewith. Purchaser and its advisors, if any, have examined or have had the
opportunity to examine before the date hereof all operative documents and all
information that Purchaser deems to be material to an understanding of the
Company and its subsidiaries and the offering of the Shares.
3.6 The representations, warranties and agreements of Purchaser contained
herein are made for the benefit of, and may be relied upon by, the Company,
Credit Suisse First Boston Corporation, Xxxxxxxxx & Company, Inc. and each of
their respective representatives, agents and counsel.
4. CONDITIONS TO PURCHASER'S OBLIGATION AT CLOSING. The obligation of
Purchaser to purchase the Shares at the Closing is subject to the fulfillment to
its satisfaction on or prior to the Closing of the following conditions:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by the Company in Section 2 shall have been true and correct when made and
shall be true and correct as of the Closing with the same force and effect as if
they had been made on and as of such date.
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4.2 OMNIBUS AGREEMENT. The Omnibus Agreement shall have been executed and
delivered by all parties thereto and the Restated COI shall have been filed with
the Secretary of State of the State of Delaware.
4.3 INITIAL PUBLIC OFFERING OF COMMON STOCK. The closing of the IPO shall
have occurred simultaneously with the Closing.
5. CONDITIONS TO THE COMPANY'S OBLIGATION AT CLOSING. The obligation of
the Company to sell the Shares at the Closing is subject to the fulfillment to
the Company's satisfaction on or prior to the Closing of the following
conditions:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
made by Purchaser in Section 3 shall have been true and correct when made and
shall be true and correct as of the Closing with the same force and effect as if
they had been made on and as of such date, except for the specific valuation of
Purchaser's investment holdings set forth in Section 3.4, which shall be true
and correct as of the date set forth therein.
5.2 OMNIBUS AGREEMENT. The Omnibus Agreement shall have been executed and
delivered by all parties thereto and the Restated COI shall have been filed with
the Secretary of State of the State of Delaware.
5.3 INITIAL PUBLIC OFFERING OF COMMON STOCK. The closing of the IPO shall
have occurred simultaneously with the Closing.
6. TERMINATION.
6.1 GROUNDS FOR TERMINATION. This Agreement may be terminated at any time
prior to the Closing:
(a) by mutual written agreement of the Company and Purchaser; or
(b) by either the Company or Purchaser if there shall be any law or
regulation that makes consummation of the transactions contemplated hereby
illegal or otherwise prohibited or if consummation of the transactions
contemplated hereby would violate any nonappealable final order, decree or
judgment of any court or governmental body having competent jurisdiction.
The party desiring to terminate this Agreement pursuant to clause 6.1(b)
shall give notice of such termination to the other party.
6.2 EFFECT OF TERMINATION. If this Agreement is terminated as permitted by
Section 6.1, such termination shall be without liability of either party (or any
partner, stockholder, director, officer, employee, agent, consultant or
representative of such party) to the other party to this Agreement.
7. MISCELLANEOUS.
7.1 SURVIVAL. The representations and warranties set forth in Sections 2
and 3 shall survive until three years after the date of the Closing.
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7.2 EXPENSES; INDEMNIFICATION. The Company shall not be responsible for
the Purchaser's legal or other fees and expenses incurred in connection with
entering into this Agreement and the transactions contemplated hereby. The
Company and Purchaser shall indemnify each other for any loss or liability
incurred by the indemnified party as the result of any breach of the
indemnifying party's representations or warranties hereunder. Any party that may
be entitled to indemnification hereunder (the "Indemnified Party") shall
promptly notify the party from whom indemnification is sought hereunder (the
"Indemnifying Party") in writing of the Indemnified Party's receipt of notice of
its involvement in any action in respect of which a claim for indemnification is
to be made hereunder; provided, however, that any failure to so notify the
Indemnifying Party shall not affect the Indemnifying Party's obligations to so
indemnify such person except to the extent that the Indemnifying Party is
materially prejudiced by such failure.
7.3 ENTIRE AGREEMENT. This Agreement contains the entire understanding of
the parties with respect to the subject matter hereof. This Agreement may not be
amended or any provision waived except by a writing signed, in the case of an
amendment, by each party hereto and, in the case of a waiver, by the party
against whom the waiver is to be effective. No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof unless the other party is materially prejudiced thereby, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
7.4 ASSIGNABILITY. This Agreement is not assignable by either of the
parties without the prior written consent of the other. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assignees.
7.5 SEVERABILITY. If any term, provision or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions and restrictions of this
Agreement shall remain in full force and effect, unless such action would
substantially impair the benefits to either party of the remaining provisions of
this Agreement.
7.6 LIABILITY OF COMPANY. Notwithstanding anything to the contrary herein,
the Company shall have no liability to Purchaser hereunder if the Closing is not
effected for any reason.
7.7 NOTICES. Any notices and other communications required to be given
pursuant to this Agreement shall be deemed to have been duly given or made as of
the date delivered or mailed if delivered personally, mailed by registered or
certified mail (postage prepaid, return receipt requested), or delivered by
facsimile or by telex, as follows:
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If to the Company:
Safety Insurance Group, Inc.
00 Xxxxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
If to Purchaser:
Fairholme Partners, L.P.
00 XXX Xxxxxxx
Xxxxx Xxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxxxx
Telecopier: (000) 000-0000
7.8 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of
New York, without regard to the
conflict of law provisions thereof. This Agreement may be executed in one or
more counterparts, which together will constitute a single agreement.
7.9 CAPTIONS. The captions herein are included for convenience of
reference only and shall be ignored in the construction or interpretation
hereof.
REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year hereinabove first written.
FAIRHOLME PARTNERS, L.P.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Managing Member of the
General Partner
SAFETY INSURANCE GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxx, Xx.
--------------------------------
Name: Xxxxxxx X. Xxxxxx, Xx.
Title: Vice President
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