Exhibit 10.1
PURCHASE AGREEMENT
By and Between
ALLEGHANY INSURANCE HOLDINGS LLC
and
TALBOT HOLDINGS LTD.
DATED AS OF
OCTOBER 31, 2001
TABLE OF CONTENTS
Page
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ARTICLE I PURCHASE OF SHARES AND ENTITLEMENTS.......................................................................2
1.1. Purchase of the Shares and the Entitlements................................................................2
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1.2. Consideration..............................................................................................2
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1.3. Closing....................................................................................................2
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1.4. Intentionally Left Blank...................................................................................2
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1.5. Stamp Duties...............................................................................................2
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ARTICLE II REPRESENTATIONS AND WARRANTIES OF AIHL...................................................................3
2.1. Organization...............................................................................................3
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2.2. Authority..................................................................................................3
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2.3. The Shares.................................................................................................3
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ARTICLE III REPRESENTATIONS AND WARRANTIES OF TALBOT HOLDINGS.......................................................3
3.1. Organization and Standing..................................................................................3
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3.2. Authority..................................................................................................3
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ARTICLE IV COVENANTS................................................................................................4
4.1. Cooperation and Reasonable Best Efforts....................................................................4
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4.2. Letter Agreement re Post-Closing Covenants.................................................................4
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4.3. No Election................................................................................................4
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4.4. No Liquidation of Talbot Capital...........................................................................4
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4.5. Option Stock Purchase Agreement............................................................................5
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4.6. Bermuda Approvals..........................................................................................5
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ARTICLE V RELEASE AND COVENANT NOT TO ▇▇▇...........................................................................5
5.1. Talbot Holdings Release....................................................................................5
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5.2. Other Releases.............................................................................................5
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ARTICLE VI MISCELLANEOUS PROVISIONS.................................................................................6
6.1. Expenses...............................................................................................6
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6.2. Notices................................................................................................6
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6.3. Entire Agreement; Amendments and Waivers...............................................................7
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6.4. Assignment.............................................................................................7
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6.5. Survival of Representations, Warranties and Covenants..................................................7
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6.6. Governing Law..........................................................................................8
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6.7. Consent To Jurisdiction................................................................................8
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6.8. Waiver of Jury Trial...................................................................................8
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6.9. Remedies...............................................................................................8
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6.10. Interpretation.........................................................................................9
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6.11. No Benefit to Others...................................................................................9
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6.12. Public Announcements...................................................................................9
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6.13. Counterparts...........................................................................................9
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6.14. Headings...............................................................................................9
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6.15. Severability...........................................................................................9
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EXHIBITS
Exhibit A Warrant
Exhibit B Assignment
Exhibit C Letter Agreement re Post-Closing Covenants
Exhibit D Releases
Exhibit E Letter Agreement re Option Stock Purchase Agreement
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PURCHASE AGREEMENT
PURCHASE AGREEMENT (this "Agreement"), dated as of October 31,
2001, by and between ALLEGHANY INSURANCE HOLDINGS LLC, a Delaware limited
liability company ("AIHL"), and Talbot Holdings LTD., a Bermuda exempted limited
liability company ("Talbot Holdings").
W I T N E S S E T H :
WHEREAS, AIHL is the owner of 116,635,100 ordinary shares (the
"Shares"), constituting all of the issued and outstanding shares in the capital
of Alleghany Underwriting Holdings Ltd ("AUHL"), a company registered in England
and Wales under company number 02180028 and having its registered office at
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇;
WHEREAS, AIHL is the depositor of (a) a deposit in the amount of
$244,915,000 with Lloyd's in satisfaction of the funds at Lloyd's requirements
of Alleghany Underwriting Capital Ltd, Alleghany Underwriting Capital (Bermuda)
Ltd. and Talbot Underwriting Limited, which are the corporate members of Lloyd's
wholly owned by AUHL; and (b) a deposit in the amount of $10,000,000 with
Citibank, N.A. as trustee of the U.S. surplus lines trust fund in satisfaction
of the U.S. surplus lines trust fund requirements of such corporate members
(AIHL's right, title and interest in and to all of such deposits are hereinafter
collectively referred to as the "Entitlements");
WHEREAS, all of the issued and outstanding shares of capital
stock of Talbot Holdings are owned by certain members of the executive
management of AUHL and its subsidiaries;
WHEREAS, Talbot Holdings is the owner of all of the issued and
outstanding shares of capital stock of Talbot Capital Ltd., a Bermuda exempted
limited liability company and wholly owned subsidiary of Talbot Holdings
("Talbot Capital");
WHEREAS, AIHL desires to sell and Talbot Holdings desires to
purchase the Shares, and AIHL desires to assign and Talbot Capital desires to
take an assignment of the Entitlements, all upon the terms and subject to the
conditions set forth in this Agreement; and
WHEREAS, The Society of Lloyd's has approved the change of
controller of Alleghany Underwriting Capital Ltd, Alleghany Underwriting Capital
(Bermuda) Ltd, Talbot Underwriting Ltd, Alleghany Underwriting Ltd and has been
notified of the proposed change of controller of Alleghany Underwriting Risk
Services Ltd;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants, agreements and provisions contained herein, the parties hereto agree
as follows:
ARTICLE I
PURCHASE OF SHARES AND ENTITLEMENTS
1.1. Purchase of the Shares and the Entitlements. Upon the
terms and subject to the conditions set forth in this Agreement, at the Closing
(as hereinafter defined), (a) AIHL shall sell, convey, assign, transfer and
deliver the Shares to Talbot Holdings, and Talbot Holdings shall acquire the
Shares from AIHL, and (b) AIHL shall sell, convey, assign, transfer and deliver
(at the direction, and for the benefit, of Talbot Holdings) the Entitlements to
Talbot Capital, and Talbot Capital shall acquire the Entitlements from AIHL.
1.2. Consideration. At the Closing (as hereinafter defined),
Talbot Holdings shall pay to AIHL the sum of ten dollars ($10.00) in cash (the
"Cash Consideration"), and shall procure the issue to AIHL of a warrant (the
"Warrant") in the name of AIHL to subscribe for 100 Class A Redeemable
Non-Voting Preferred Shares, par value $0.01 per share, of Talbot Capital
("Talbot Capital Preferred Shares"). A copy of the Warrant is attached hereto as
Exhibit A.
1.3. Closing. Subject to receipt by AIHL of an opinion from
▇▇▇▇▇▇▇ Berlin Shereff ▇▇▇▇▇▇▇▇, LLP, tax counsel for AIHL, in form and
substance satisfactory to AIHL, the purchase and sale of the Shares and the
Entitlements pursuant to this Agreement (the "Closing") shall take place at the
offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ in London, England at 5:00 p.m. local time on
November 5, 2001, or at such other place or time as the parties hereto agree in
writing (the "Closing Date"). At the Closing:
(a) AIHL shall cause AUHL to convene a meeting of its board
of directors to approve and direct the registration of the transfer of the
Shares to Talbot Holdings (pending only the share transfer form being stamped),
and to accept the resignations of ▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇
▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ as directors of AUHL and its
subsidiaries;
(b) AIHL shall deliver (i) to Talbot Holdings, a stock
transfer form in respect of the Shares duly executed in favor of Talbot Holdings
together with the share certificates representing the Shares, and (ii) to Talbot
Capital, an assignment evidencing the transfer of the Entitlements to Talbot
Capital in the form attached hereto as Exhibit B (the "Assignment"); and
(c) Talbot Holdings shall deliver to AIHL the Cash
Consideration and the Warrant.
1.4. Intentionally Left Blank
1.5. Stamp Duties. Talbot Holdings shall be responsible for
the payment of any and all stamp duties arising out of transactions contemplated
by this Agreement, including, without limitation, any related fines, penalties
and interest.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF AIHL
AIHL represents and warrants to Talbot Holdings as follows:
2.1. Organization. AIHL is a limited liability company duly
organized, validly existing and in good standing under the laws of Delaware, and
has all requisite power and authority to own its properties and to conduct its
business as now being conducted.
2.2. Authority. AIHL has all requisite power and authority to
enter into this Agreement and to carry out the transactions contemplated hereby.
The execution, delivery and performance of this Agreement and the transactions
contemplated hereby have been duly and validly authorized by all necessary
action on the part of AIHL and this Agreement constitutes a legal, valid and
binding obligation of AIHL, enforceable against AIHL in accordance with its
terms.
2.3. The Shares. The Shares have been duly authorized and
validly issued and are fully paid, constitute all of the issued and outstanding
shares of capital stock of AUHL, and are owned by AIHL.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF TALBOT HOLDINGS
Talbot Holdings represents and warrants to AIHL as follows:
3.1. Organization and Standing. Talbot Holdings is an exempt
limited liability company duly organized, validly existing and in good standing
under the laws of Bermuda, and has all requisite corporate power and authority
to own its properties and to conduct its business as now being conducted.
3.2. Authority. All of the permits, approvals, qualifications
or consents of third parties and regulatory authorities which are required for
the consummation of the transactions contemplated by this Agreement have been
obtained. Talbot Holdings has all requisite power and authority to enter into
this Agreement and to carry out the transactions contemplated hereby. The
execution, delivery and performance of this Agreement and the transactions
contemplated hereby have been duly and validly authorized by all necessary
action on the part of Talbot Holdings and Talbot Capital and this Agreement
constitutes a legal, valid and binding obligation of Talbot Holdings enforceable
against Talbot Holdings in accordance with its terms.
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ARTICLE IV
COVENANTS
4.1. Cooperation and Reasonable Best Efforts. Subject to the
terms and conditions hereof, (a) each of the parties hereto shall cooperate with
the other in connection with consummating the transactions contemplated by this
Agreement, and (b) each of the parties hereto agrees to use its reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement. (For purposes of this Agreement, the covenant of the parties to
use their "reasonable best efforts" shall not require any party to incur any
unreasonable expenses.)
4.2. Letter Agreement re Post-Closing Covenants. At the
Closing, AIHL and AUHL shall enter into a letter agreement in the form set forth
as Exhibit C hereto.
4.3. No Election. Neither Talbot Holdings nor Talbot Capital
has made the election permitted to be made by U.S. Treasury Regulation Section
301.7701-3(c), and Talbot Holdings will not make, and will not allow Talbot
Capital to make, the election permitted to be made by U.S. Treasury Regulation
Section 301.7701-3(c) to be effective as of any date in the taxable year of
Talbot Holdings in which the Closing occurs or in the following taxable year.
4.4. No Liquidation of Talbot Capital. Talbot Holdings shall
not, and shall not permit Talbot Capital to, take any action that would result
in the voluntary liquidation, dissolution or winding up of Talbot Capital, a
sale of all or substantially all of the assets of Talbot Capital (whether in a
single transaction or series of related transactions), or any amalgamation or
consolidation (and Talbot Capital is not a surviving entity in any form) of
Talbot Capital, prior to the determination of Residual FAL (as defined in the
Certificate of Designation of the Talbot Capital Preferred Shares).
4.5. Option Stock Purchase Agreement. At the Closing,
Alleghany Corporation and AUHL shall enter into a letter agreement in the form
set forth as Exhibit D hereto.
4.6. Bermuda Approvals. Application has been made to (a) the
Bermuda Monetary Authority for the approval of (i) the transfer of the ultimate
beneficial ownership of Alleghany Underwriting Capital (Bermuda) Ltd. from
Alleghany Corporation to Talbot Holdings, and (ii) the issue by Talbot Capital
of the Warrant to AIHL; and (b) the Bermuda Supervisor of Insurance for the
approval of the transfer of the ultimate beneficial ownership of Alleghany
Underwriting Capital (Bermuda) Ltd. from Alleghany Corporation to Talbot
Holdings. In the event that these approvals have not been obtained by 5:00 p.m.
local time in London, England on November 5, 2001, the parties hereto hereby
agree to take, or cause to be taken, such action as is necessary or advisable to
allow the Closing to occur no later than November 30, 2001.
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ARTICLE V
RELEASE AND COVENANT NOT TO ▇▇▇
5.1. Talbot Holdings Release Effective as of the Closing,
Talbot Holdings, for itself as well as its subsidiaries (including, without
limitation, after the Closing Date, AUHL and its subsidiaries) and their
respective successors, agents and assigns, does hereby forever, finally, fully,
and unconditionally release and discharge AIHL and its parent Alleghany
Corporation and their respective subsidiaries, affiliates, parents, successors,
predecessors and assigns, and all of their respective past and present members,
managers, employees, officers, directors, agents, representatives, attorneys,
insurers, accountants and shareholders, in their individual, official and
representative capacities, from and against any and all claims, debts,
liabilities, demands, obligations, promises, agreements, contracts, covenants,
liens, losses, costs and expenses, damages, suits, actions and causes of action
whatsoever, at law or in equity, that any of them ever had, now have, or
hereafter can, shall or may have, from the beginning of the world to the Closing
Date, whether known or unknown, suspected or unsuspected, matured or unmatured,
liquidated or unliquidated, jointly or severally, directly or indirectly,
accrued or unaccrued, contingent or fixed (collectively, "Claims") for, upon, or
by reason of any matter, cause or thing whatsoever, including, without
limitation, any and all Claims arising out of, or relating to, any act or
omission in connection with the management or conduct of the business or affairs
of AUHL or any of its subsidiaries, and further covenants not to ▇▇▇ upon any
such Claims. Notwithstanding the foregoing, AIHL shall not be released from any
Claims arising out of or relating to any breach by AIHL of its obligations under
this Agreement or any documents delivered pursuant hereto.
5.2. Other Releases. At the Closing, releases in the forms
set forth in Exhibit E hereto shall be executed and delivered by the parties
thereto.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1. Expenses. Whether or not the Closing takes place and
regardless of whether this Agreement is terminated, each party hereto shall pay
all of the costs and expenses incurred by it in connection with this Agreement
or in consummating the transactions contemplated hereby (including, without
limitation, disbursements and expenses of its attorneys, accountants and
advisors). Except for the services provided by Lexicon Partners, whose fees and
expenses will be paid by AIHL, no agent, broker, investment banker, person or
firm acting on behalf of Talbot Holdings or under Talbot Holdings' authority is
or will be entitled to any broker's, finder's or investment banker's fee or any
other commission or similar fee directly or indirectly from any of the parties
hereto in connection with the negotiation or consummation of any of the
transactions contemplated hereby.
6.2. Notices. All notices or other communications required or
permitted under this Agreement shall be in writing and shall be effective upon
delivery by hand or upon receipt if sent certified or registered mail (postage
prepaid and return receipt requested) or by a nationally
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recognized overnight courier service (appropriately marked for overnight
delivery) or upon transmission if sent by telex or facsimile (with request for
immediate confirmation of receipt in a manner customary for communications of
such respective type and with physical delivery of the communication being made
by one of the other means specified in this Section 6.2 as promptly as
practicable thereafter). Notices are to be addressed as follows:
If to AIHL, to
Alleghany Insurance Holdings LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Manager
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to Talbot Holdings, to
Talbot Holdings Ltd.
Clarendon ▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ ▇▇
▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇: Secretary
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to
▇▇▇▇▇▇ ▇▇▇▇▇ Sapte
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
Any party may change the person and addresses to which notices
or other communications are to be sent to it by giving written notice of any
such change in the manner provided herein for giving notice.
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6.3. Entire Agreement; Amendments and Waivers. This
Agreement, together with the exhibits delivered pursuant hereto, sets forth the
entire agreement and understanding of the parties hereto in respect of the
transactions contemplated hereby, and supersedes all prior agreements,
arrangements and understandings relating to the subject matter hereof. No party
hereto has relied upon any oral or written statement, representation, warranty,
covenant, condition, understanding or agreement made by any other party or any
representative, agent or employee thereof, except for those expressly set forth
in this Agreement or in the exhibits or schedules delivered pursuant hereto.
This Agreement may be amended or modified, and the terms hereof may be waived,
only by a writing signed by each of the parties hereto or, in the case of a
waiver, by the party entitled to the benefit of the terms being waived.
6.4. Assignment. This Agreement shall be binding upon, and
inure to the benefit of, the respective successors and assigns of the parties
hereto; provided, however, that no assignment of any rights or delegation of any
obligations provided for herein shall be made by a party hereto without the
express prior written consent of the other party hereto, which consent shall not
be unreasonably withheld.
6.5. Survival of Representations, Warranties and Covenants.
All representations, warranties and covenants, of the parties hereto which are
contained in this Agreement, together with the exhibits delivered pursuant
hereto, shall survive the Closing and remain operative and in full force and
effect, regardless of any investigation heretofore or hereafter made by or on
behalf of any of the parties hereto.
6.6. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
agreements made and to be performed entirely within such State.
6.7. Consent To Jurisdiction. The parties hereto agree that
any suit, action or proceeding seeking to enforce any provision of, or based on
any matter arising out of or in connection with, this Agreement, any documents
delivered pursuant hereto or the transactions contemplated hereby or thereby
shall be brought in the United States District Court for the Southern District
of New York or any New York State court sitting in Manhattan, and each of the
parties hereby consents to the exclusive jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Each party agrees that service of process on such party by
hand delivery, or by certified or registered mail (postage prepaid and return
receipt requested) or by a nationally recognized overnight courier service
(appropriately marked for overnight delivery), addressed as provided in
Section 6.2, shall be deemed effective service of process on such party.
6.8. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT, ANY
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DOCUMENTS DELIVERED PURSUANT HERETO OR THE TRANSACTIONS CONTEMPLATED HEREBY OR
THEREBY.
6.9. Remedies. Without intending to limit the remedies
available to any party hereto, each party (i) acknowledges that breach of this
Agreement or any documents delivered pursuant hereto will result in irreparable
harm for which there is no adequate remedy at law, (ii) agrees that any party
seeking to enforce this Agreement or any documents delivered pursuant hereto
shall be entitled to injunctive relief, including specific performance, or other
equitable remedies upon any such breach, and (iii) the prevailing party in any
action brought pursuant to, or related to or referenced in any way in this
Agreement or any documents delivered pursuant hereto shall be entitled to
recover its attorneys' fees from the losing party.
6.10. Interpretation. This Agreement and any documents
delivered pursuant hereto are the result of arm's-length negotiations between
the parties hereto and have been prepared jointly by the parties. In applying
and interpreting the provisions of this Agreement and any documents delivered
pursuant hereto, there shall be no presumption that this Agreement and such
documents were prepared by any one party or that this Agreement or such
documents shall be construed in favor of or against any one party.
6.11. No Benefit to Others. The representations, warranties,
covenants and agreements contained in this Agreement and in any documents
delivered pursuant hereto are for the sole benefit of the parties hereto and
their respective successors and permitted assigns and they shall not be
construed as conferring and are not intended to confer any rights on any other
persons, except as provided in Article V hereof and Exhibit E hereto.
6.12. Public Announcements. A press release in a form mutually
agreed will be issued upon execution of this Agreement. Each party hereto agrees
that it will not issue any other press release or otherwise make any public
announcement with respect to this Agreement and the transactions contemplated
hereby without the prior consent of the other party hereto (such consent not to
be unreasonably withheld or delayed), unless such party determines in good faith
that it is so obligated by applicable law, in which case such party shall
consult, to the extent practicable, with the other party prior to issuing such
press release or making such public announcement.
6.13. Counterparts. This Agreement may be executed in
counterparts, each of which when so executed and delivered shall be deemed to be
an original, but all of which taken together shall constitute but one and the
same instrument.
6.14. Headings. The section headings contained in this
Agreement are inserted for convenience of reference only and shall not affect
the meaning or interpretation of this Agreement.
6.15. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.
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IN WITNESS WHEREOF, each party hereto has caused this Agreement
to be duly executed as of the date first above written.
ALLEGHANY INSURANCE HOLDINGS LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Manager
Witness:
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
TALBOT HOLDINGS LTD.
By: /s/ ▇▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
Attest:
By: /s/ ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Title: Assistant Secretary
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Exhibit A
WARRANT
TO PURCHASE CLASS A REDEEMABLE NON-VOTING PREFERRED SHARES
OF
TALBOT CAPITAL LTD.
Date of Issuance: November 5, 2001 Number of Shares: 100
Talbot Capital Ltd., a Bermuda exempted limited liability
company (the "Company"), for value received, hereby certifies that Alleghany
Insurance Holdings LLC, a Delaware limited liability company (the "Holder"), or
registered assigns, is entitled, subject to the terms set forth herein, at any
time after November 5, 2001 and on or before November 5, 2011 (the "Subscription
Period"), to subscribe for 100 Class A Redeemable Non-Voting Preferred Shares,
par value $0.01 per share, of the Company (the "Preferred Shares"), at the
subscription price of Ten Million United States Dollars (US$10,000,000) (the
"Subscription Price"). The Preferred Shares constitute all of the authorized
Class A Redeemable Non-Voting Preferred Shares of the Company, and, in
accordance with the rights of the Preferred Shares set forth in the Certificate
of Designation of the Preferred Shares appended to the Company's Bye-laws (the
"Rights"), entitle the Holder to the greater of (a) the Stated Value of the
Preferred Shares (as defined in the Rights), and (b) one-third of the sum of the
Residual FAL (as defined in the Rights) and the Stated Value of the Preferred
Shares, plus in either case unpaid cumulative dividends on the Preferred Shares.
1. Exercise of Warrant.
(a) Exercise of this Warrant by the Holder shall be
made at any time during the Subscription Period by the surrender of this
Warrant, along with a duly executed notice of exercise in the form attached
hereto as Exhibit 1, at the Company's principal offices, together with payment
in full of the Subscription Price by certified or official bank check payable to
the order of the Company, or such other form of payment as shall be acceptable
to the Company and the Holder.
(b) The exercise of this Warrant shall be deemed to
have been effected immediately prior to the close of business on the day on
which this Warrant shall have been surrendered to the Company as provided in
Section 1(a) above. At such time, the person or persons in whose name or names
any certificates for Preferred Shares shall be issuable upon such exercise shall
be deemed to have become the holder or holders of record of the Preferred Shares
represented by such certificates.
(c) As soon as practicable after the exercise of
this Warrant, and in any event within ten (10) days thereafter, the Company at
its expense shall cause to be issued in the name of, and delivered to, the
Holder, or as such Holder (upon payment by such Holder of any applicable
transfer taxes) may direct, a certificate or certificates for the number of full
shares
of Preferred Shares to which such Holder shall be entitled upon such exercise.
The Company shall not be required upon exercise of this Warrant to issue any
fractional Preferred Shares, but shall make adjustment therefor in cash as
determined in good faith by the Board of Directors of the Company.
2. Reservation of Preferred Shares. The Company agrees
that, at all times during the Subscription Period, the Company will have duly
authorized and in reserve, and will keep available solely for issuance and
delivery upon the exercise of this Warrant, such number of Preferred Shares as
shall be issuable upon the exercise of this Warrant. The Company represents that
the Preferred Shares have been duly authorized and constitute all of the
authorized Class A Non-Voting Preferred Shares of the Company; none of the
Preferred Shares have been issued and are outstanding; and, when issued and
delivered upon exercise of the Warrant, the Preferred Shares will be validly
issued, fully paid and nonassessable, free and clear of all restrictions on sale
or transfer and free and clear of all preemptive rights and rights of first
refusal. The Company further covenants and agrees that it will pay, when due and
payable, any and all foreign, federal and state stamp, original issue or similar
taxes which may be payable in respect of the issuance of any Preferred Shares or
certificates therefor.
3. Reporting Requirements. For so long as this Warrant and
any Preferred Shares issuable upon exercise thereof are outstanding, the Company
will furnish to the Holder such reports as are furnished to Lloyd's (or
succeeding regulatory authority) in respect of the Corporate Members (as defined
in the Rights) and syndicates on which such Corporate Members have written for
the 2001 year of account and prior years of account.
4. Transfer. Title to this Warrant may be transferred by
the due endorsement (with signature guaranteed) by the Holder of an assignment
in the form attached hereto as Exhibit 2. On surrender of this Warrant and said
duly endorsed assignment to the Company, the Company at its expense will issue
and deliver to or on the order of the Holder a new Warrant of like tenor, in
such name as the Holder (on payment by such Holder or any applicable transfer
taxes) may direct.
5. Replacement of Warrants. On receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Warrant and, in the case of any such loss, theft or
destruction, on delivery of an indemnity agreement or security reasonably
satisfactory in form and amount to the Company or, in the case of any such
mutilation, on surrender and cancellation of this Warrant, the Company at its
expense will execute and deliver, in lieu thereof, a new Warrant of like tenor.
6. No Impairment. The Company will not, without the
Holder's written consent, amend its Bye-laws to alter the Rights. In addition,
the Company will not, without the Holder's written consent, through any
reorganization, transfer of assets, consolidation, merger, dissolution, issue or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
hereunder by the Company, but it will at all times in good faith assist in the
carrying out of all of the provisions of this Warrant and in the taking of all
such action as may be necessary or appropriate in order to protect the rights of
the holder of this Warrant against impairment. A change of control of the
-2-
Corporate Members (as defined in the Rights) shall not be deemed to be an
impairment provided that the Residual FAL (as defined in the Rights) continues
to include the funds at Lloyd's of such Corporate Members.
7. No Rights as a Stockholder. This Warrant does not confer
upon the Holder any rights or liabilities as a shareholder of the Company prior
to the exercise of this Warrant.
8. Amendment. This Warrant may not be modified or amended
except by an instrument in writing signed by the Company and the Holder.
9. Notices. All notices and other communications required
or permitted to be given to the Company or the Holder shall be delivered by
hand, or sent by first class registered or certified mail, postage prepaid, or
sent by telecopy, to the Company at ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, or to the Holder at such address and telecopy number as may have
been furnished to the Company in writing by the Holder.
10. Remedies. The Company acknowledges and agrees that the
remedies at law of the Holder in the event of any default or threatened default
by the Company in the performance of or compliance with any of the terms of this
Warrant are not and will not be adequate, and that such terms may be
specifically enforced by a decree for the specific performance of any agreement
contained herein or by an injunction against a violation of any of the terms
hereof or otherwise.
11. Miscellaneous. This Warrant shall be binding upon the
Company's successors. This Warrant shall be construed and enforced in accordance
with and governed by the laws of the State of New York applicable to agreements
made and to be performed entirely within such State. The headings in this
Warrant are for purposes of reference only, and shall not limit or otherwise
affect any of the terms hereof.
TALBOT CAPITAL LTD.
By:
----------------------------
Name: ▇▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
Attest:
By:
-------------------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇
Title: Assistant Secretary
-3-
Exhibit 1
NOTICE OF EXERCISE
OF WARRANT
To: Talbot Capital Ltd. Date:
----------------
The undersigned, pursuant to the provisions set forth in the
Warrant dated November 5, 2001, hereby irrevocably elects to exercise the
Warrant to subscribe for 100 Class A Redeemable Non-Voting Preferred Shares, par
value $.01 per share, of Talbot Capital Ltd. subject to the Memorandum of
Association and Bye-laws of Talbot Capital Ltd., and tenders herewith payment of
the Subscription Price in full in the amount of Ten Million United States
Dollars (US$10,000,000).
Please issue a certificate or certificates for such Class A
Redeemable Non-Voting Preferred Shares in the name of, and pay any cash for any
fractional share to:
Alleghany Insurance Holdings LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
By:
----------------------------
Name:
Title: Manager
Exhibit 2
ASSIGNMENT OF WARRANT
FOR VALUE RECEIVED, the undersigned Holder of the Warrant dated
November 5, 2001 hereby sells, assigns and transfers unto ____________, whose
address is _____________________, all of the right, title and interest of the
undersigned in and to such Warrant, and does hereby irrevocably constitute and
appoint _____________________ as its attorney-in-fact to register such transfer
on the books of Talbot Capital Ltd. maintained for the purpose, with full power
of substitution in the premises.
Date: Holder:
-----------------------------
By:
----------------------------
Name:
Title:
[Signature Guaranteed]
Exhibit B
ASSIGNMENT
FOR VALUE RECEIVED, ALLEGHANY INSURANCE HOLDINGS LLC, a Delaware
limited liability company ("Assignor"), hereby assigns, conveys, grants, sets
over and transfers to TALBOT CAPITAL LTD., a Bermuda exempted limited liability
company ("Assignee"), all of Assignor's right, title and interest in and to the
following:
(a) (i) the deposit with Lloyd's of US$70,978,000 on
behalf of Alleghany Underwriting Capital Ltd
("AUCL") in satisfaction of its funds at Lloyd's
requirements, which deposit is evidenced by a
Lloyd's Deposit Trust Deed made the 17th day of
October, 2001 (Lloyd's of London Member Code
053561C);
(ii) the deposit with Lloyd's of US$172,989,000 on
behalf of Alleghany Underwriting Capital
(Bermuda) Ltd ("AUC(B)L") in satisfaction of its
funds at Lloyd's requirements, which deposit is
evidenced by a Lloyd's Deposit Trust Deed made
the 17th day of October, 2001 (Lloyd's of London
Member Code 053562K);
(iii) the deposit with Lloyd's of US$948,000 on behalf
of Talbot Underwriting Ltd ("Talbot
Underwriting") in satisfaction of its funds at
Lloyd's requirements, which deposit is evidenced
by a Lloyd's Deposit Trust Deed made the 17th
day of October, 2001 (Lloyd's of London Member
Code 054159J); and
(iv) the deposit with Citibank, N.A. of US$10,000,000
in satisfaction of the U.S. Surplus Lines Trust
Fund requirements of Syndicate 376 (account no.
437602-00);
(all of the foregoing deposits being collectively
referred to herein as the "Deposits"),
(b) any and all agreements, contracts, documents or
instruments evidencing Assignor's right, title and
interest in and to the Deposits, including without
limitation the Lloyd's Deposit Trust Deeds referred to
in clauses (a)(i), (a)(ii) and (a)(iii) above, subject
to the terms and conditions of such agreements,
contracts, documents and instruments; and
(c) all of Assignor's right, title and interest in and to
any or all of the proceeds of any or all of the
foregoing;
to have and to hold unto Assignee and its successors and assigns forever.
Assignee acknowledges and agrees that the Deposits were made in
compliance with the requirements of Lloyd's or the U.S. Surplus Lines Trust Fund
in support of the underwriting activities of AUCL, AUC(B)L and Talbot
Underwriting, and are under the direct control of Lloyd's or Citibank, as the
case may be. Accordingly, Assignee agrees that it will not
seek recourse to any of the Deposits or take any action in respect of the
Deposits under circumstances that would render AUCL, AUC(B)L or Talbot
Underwriting insolvent.
This Assignment is made without any representation or warranty,
express or implied, by Assignor.
This Assignment will be binding upon, and inure to the benefit
of, Assignor and Assignee and their respective successors and assigns.
This Assignment shall be governed by, and construed in
accordance with, the laws of the State of New York applicable to agreements made
and to be performed entirely within such State.
This Assignment may be executed in counterparts, each of which
when so executed and delivered shall be deemed an original, but all of which
taken together shall constitute but one and the same instrument.
Dated as of the 5th day of November, 2001.
ALLEGHANY INSURANCE HOLDINGS LLC
By:
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager
TALBOT CAPITAL LTD.
By:
----------------------------
Name: ▇▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
-2-
EXHIBIT C
Alleghany Insurance Holdings LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
November 5, 2001
Alleghany Underwriting Holdings Ltd
Gracechurch House
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Gentlemen:
Reference is made to that certain Purchase Agreement dated as of
October 31, 2001 (the "Agreement") by and between Alleghany Insurance Holdings
LLC ("AIHL") and Talbot Holdings Ltd. ("Talbot Holdings"), which provides for
the sale by AIHL to Talbot Holdings of all of the issued and outstanding shares
in the capital of Alleghany Underwriting Holdings Ltd ("AUHL"). Defined terms
used but not defined herein shall have the meanings ascribed thereto in the
Agreement.
For good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, AIHL and AUHL hereby agree that, in the event
that the Closing takes place under the Agreement:
1. Access to, and Retention of, Books and Records. For so
long as AIHL is required to include information about AUHL and its subsidiaries
(hereinafter collectively referred to as the "AUHL Group") in its financial
reports, tax returns and other documents, or for such period as the accuracy or
correctness of any financial reports, tax returns, tax information and other
documents furnished to, or at the request of, AIHL may be examined or audited by
any government, regulatory authority or other body (whether or not governmental)
with jurisdiction over AIHL, AUHL will, and will cause each of its subsidiaries
to, allow AIHL (and AIHL's attorneys, accountants and agents) access to all of
the properties, personnel, corporate books and financial records of such
company, and to examine and make copies of the books of accounts and other
financial records of such company, all at such reasonable times and such
intervals as AIHL shall reasonably determine. AUHL will also keep or cause to be
kept, and will cause each of its subsidiaries to keep, appropriate records and
books of account in which complete entries are to be made reflecting its and
their business and financial transactions, such entries to be made in accordance
with past practices consistently applied. Further, prior to discarding or
destroying any copies of the AUHL Group's corporate books and financial records,
AUHL will notify AIHL in writing of the proposed discarding or destruction of
any such corporate books and financial records (describing the records or
documents to be discarded or destroyed in reasonable
Alleghany Underwriting Holdings Ltd
November 5, 2001
Page 2
detail) and will afford AIHL the reasonable opportunity to copy or take
possession of all or any of such corporate books and financial records prior to
their being discarded or destroyed.
2. Preparation of Financial Statements. Promptly following
the Closing, AUHL will promptly, but in no event later than November 14, 2001,
prepare and furnish to AIHL financial statements which fairly present in all
material respects the consolidated financial position and results of operations
of the AUHL Group for the fiscal period through October 31, 2001, which
statements shall be consistent with, and of the type and in the form customarily
furnished by, AUHL to AIHL prior to the Closing. Thereafter, AUHL will provide
AIHL's auditors, KPMG LLP ("KPMG"), with access to all of the AUHL Group's
corporate books and financial records, at such reasonable times and intervals as
KPMG shall reasonably request, to permit KPMG to audit and otherwise express an
opinion with respect to such financial statements.
3. Preparation of U.S. Tax Return Information. Following
the Closing, AUHL will promptly, but in no event later than July 31, 2002,
prepare and furnish to AIHL all information, statements, and returns relating
to, or arising out of the ownership by AIHL of, the AUHL Group (including
without limitation the U.S. income tax information returns on IRS Form(s) 5471,
and the schedules required by the instructions thereto, required under Sections
6038, 6046 or 6046A of the Internal Revenue Code of 1986, as amended (the
"Code") and necessary for the preparation of the U.S. income tax returns of AIHL
(or the U.S. income tax returns of the "affiliated group" (as that term is
defined in Section 1504 of the Code) that includes AIHL) for any taxable period
ending prior to or including the Closing.
4. Change of Names. On the Closing Date or as soon as
practicable thereafter, AUHL shall, and shall cause each of its subsidiaries
whose name includes the word "Alleghany" to, change its name so that none of
such companies has the word "Alleghany" in its name, and AUHL shall, and shall
cause each of its subsidiaries to, cease using the word Alleghany in any of
their business dealings.
5. Miscellaneous.
(a) Notices. All notices or other communications
required or permitted under this letter agreement shall be in writing and shall
be effective upon delivery by hand or upon receipt if sent certified or
registered mail (postage prepaid and return receipt requested) or by a
nationally recognized overnight courier service (appropriately marked for
overnight delivery) or upon transmission if sent by telex or facsimile (with
request for immediate confirmation of receipt in a manner customary for
communications of such respective type and with physical delivery of the
communication being made by one of the other means specified in this Section
5(a) as promptly as practicable thereafter). Notices are to be addressed as
follows:
Alleghany Underwriting Holdings Ltd
November 5, 2001
Page 3
If to AIHL, to
Alleghany Insurance Holdings LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq.
Manager
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
If to AUHL, to
Alleghany Underwriting Holdings Ltd
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: Mr. Michael ▇ ▇ ▇▇▇▇▇▇▇▇▇
President
Facsimile: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
with a copy to
▇▇▇▇▇▇ ▇▇▇▇▇ Sapte
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Facsimile: ▇▇-▇▇▇-▇▇▇-▇▇▇▇
Any party may change the person and addresses to which
notices or other communications are to be sent to it by giving written notice of
any such change in the manner provided herein for giving notice.
(b) Amendments and Waivers. This letter agreement
may be amended or modified, and the terms hereof may be waived, only by a
writing signed by each of the parties hereto or, in the case of a waiver, by the
party entitled to the benefit of the terms being waived.
Alleghany Underwriting Holdings Ltd
November 5, 2001
Page 4
(c) Assignment. This letter agreement shall be
binding upon, and inure to the benefit of, the respective successors and assigns
of the parties hereto; provided, however, that no assignment of any rights or
delegation of any obligations provided for herein shall be made by a party
hereto without the express prior written consent of the other party hereto,
which consent shall not be unreasonably withheld.
(d) Governing Law. This letter agreement shall be
governed by, and construed in accordance with, the laws of the State of New York
applicable to agreements made and to be performed entirely within such State.
(e) Counterparts. This letter agreement may be
executed in counterparts, each of which when so executed and delivered shall be
deemed to be an original, but all of which taken together shall constitute but
one and the same instrument.
(f) Headings. The section headings contained in this
letter agreement are inserted for convenience of reference only and shall not
affect the meaning or interpretation of this letter agreement.
(g) Severability. Any provision of this letter
agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
Alleghany Underwriting Holdings Ltd
November 5, 2001
Page 5
Please indicate your agreement with the foregoing by signing in
the space provided below.
Very truly yours,
Alleghany Insurance Holdings LLC
By:
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager
Agreed and accepted:
Alleghany Underwriting Holdings Ltd
By:
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇▇▇▇▇
Title: Chief Executive
Exhibit D
Alleghany Corporation
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
November 5, 2001
Alleghany Underwriting Holdings Ltd
Gracechurch House
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Gentlemen:
Reference is made to that certain Purchase Agreement dated as of
October 31, 2001 (the "Agreement") by and between Alleghany Insurance Holdings
LLC ("AIHL") and Talbot Holdings Ltd. ("Talbot Holdings"), which provides for
the sale by AIHL to Talbot Holdings of all of the issued and outstanding shares
in the capital of Alleghany Underwriting Holdings Ltd ("AUHL"). Defined terms
used but not defined herein shall have the meanings ascribed thereto in the
Agreement.
For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Alleghany Corporation ("Alleghany")
and AUHL hereby agree that, the Option Stock Purchase Agreement dated as of June
26, 2000 between Alleghany and AUHL shall be terminated, effective as of the
Closing Date, and Alleghany hereby assumes and agrees to perform the obligations
of AUHL in respect of options granted to ▇▇▇▇ ▇ ▇▇▇▇ to purchase shares of
Alleghany Common Stock ("▇▇▇▇ Options") and options granted, under the
Underwriters Re Group, Inc. 1998 Stock Option Plan, to ▇▇▇▇▇▇ ▇▇▇▇▇ to purchase
shares of Alleghany Common Stock ("▇▇▇▇▇ Options"). Alleghany shall be entitled
to all proceeds of exercise of the ▇▇▇▇ Options and the ▇▇▇▇▇ Options and AUHL
shall pay over to Alleghany any such proceeds recovered by it. AUHL and
Alleghany will cooperate reasonably with each other to facilitate exercise of
▇▇▇▇ Options and ▇▇▇▇▇ Options which occur after the Closing, including, without
limitation, any applicable tax or other withholding requirements.
This letter agreement shall be governed by, and
construed in accordance with, the laws of the State of New York applicable to
agreements made and to be performed entirely within such State.
Please indicate your agreement with the foregoing by signing in
the space provided below.
Very truly yours,
Alleghany Corporation
Alleghany Underwriting Holdings Ltd
November 5, 2001
Page 2
By:
----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
Agreed and accepted:
Alleghany Underwriting Holdings Ltd
By:
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇▇▇▇▇
Title: Chief Executive
Exhibit E
RELEASE AND COVENANT NOT TO ▇▇▇
by
Alleghany Insurance Holdings LLC
RELEASE AND COVENANT NOT TO ▇▇▇ (this "Release"), made as of
November 5, 2001 by Alleghany Insurance Holdings LLC ("AIHL") for the benefit of
the Releasees (as defined below).
IN CONSIDERATION of the sum of $1.00 and other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged,
effective as of the date hereof, AIHL does hereby forever, finally, fully, and
unconditionally release and discharge Alleghany Underwriting Holdings Ltd and
its subsidiaries and all of their respective past and present members, managers,
employees, officers and directors, in their individual, official and
representative capacities (collectively, the "Releasees"), from and against any
and all claims, debts, liabilities, demands, obligations, promises, agreements,
contracts, covenants, liens, losses, costs and expenses, damages, suits, actions
and causes of action whatsoever, at law or in equity, that any of them ever had,
now have, or hereafter can, shall or may have, from the beginning of the world
to the date hereof, whether known or unknown, suspected or unsuspected, matured
or unmatured, liquidated or unliquidated, jointly or severally, directly or
indirectly, accrued or unaccrued, contingent or fixed (collectively, "Claims"),
for, upon, or by reason of any matter, cause or thing whatsoever, and further
covenants not to ▇▇▇ upon any such Claims. Notwithstanding the foregoing, (a)
the Releasees shall not be released from any Claims in the event that any of the
Releasees commences any suit or action against AIHL or its parent Alleghany
Corporation or any of their respective past or present members, managers,
employees, officers or directors, and (b) the Releasees shall not be released
from any Claims arising out of or relating to any breach by the Releasees of
their obligations under the Purchase Agreement dated as of October 31, 2001 by
and between AIHL and Talbot Holdings Ltd. or any agreements delivered pursuant
thereto.
This Release shall be governed by, and construed in accordance
with, the laws of the State of New York applicable to agreements made and to be
performed entirely within such State.
IN WITNESS WHEREOF, AIHL has caused this Release to be duly
executed as of the date first above written.
Attest: ALLEGHANY INSURANCE HOLDINGS LLC
By: By:
-------------------------- ----------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Manager Title: Manager
RELEASE AND COVENANT NOT TO ▇▇▇
by
Alleghany Underwriting Holdings Ltd, Alleghany Underwriting Ltd,
Alleghany Underwriting Capital Ltd, Alleghany Underwriting Capital
(Bermuda) Ltd., Talbot Underwriting Ltd, Alleghany Underwriting Risk
Services Ltd, Alleghany Underwriting Services Ltd, Yachtsure Ltd,
Underwriting Risk Services Ltd, Marinasure Ltd, Venton
Underwriting Agencies Ltd and Venton Insurance & Risk
Management Services Ltd.
RELEASE AND COVENANT NOT TO ▇▇▇ (this "Release"), made as of
November 5, 2001 by Alleghany Underwriting Holdings Ltd, Alleghany Underwriting
Ltd, Alleghany Underwriting Capital Ltd, Alleghany Underwriting Capital
(Bermuda) Ltd., Talbot Underwriting Ltd, Alleghany Underwriting Risk Services
Ltd, Alleghany Underwriting Services Ltd, Yachtsure Ltd, Underwriting Risk
Services Ltd, Marinasure Ltd, Venton Underwriting Agencies Ltd and Venton
Insurance & Risk Management Services Ltd (collectively, the "Releasors"), for
the benefit of the Releasees (as defined below).
IN CONSIDERATION of the sum of $1.00 and other good and valuable
consideration the receipt and sufficiency of which is hereby acknowledged,
effective as of the date hereof, the Releasors do hereby forever, finally,
fully, and unconditionally release and discharge Alleghany Insurance Holdings
LLC and its parent Alleghany Corporation and all of their respective past and
present members, managers, employees, officers and directors, in their
individual, official and representative capacities (collectively, the
"Releasees"), from and against any and all claims, debts, liabilities, demands,
obligations, promises, agreements, contracts, covenants, liens, losses, costs
and expenses, damages, suits, actions and causes of action whatsoever, at law or
in equity, that any of them ever had, now have, or hereafter can, shall or may
have, from the beginning of the world to the date hereof, whether known or
unknown, suspected or unsuspected, matured or unmatured, liquidated or
unliquidated, jointly or severally, directly or indirectly, accrued or
unaccrued, contingent or fixed (collectively, "Claims"), for, upon, or by reason
of any matter, cause or thing whatsoever, and further covenants not to ▇▇▇ upon
any such Claims. Notwithstanding the foregoing, (a) the Releasees shall not be
released from any Claims in the event that any of the Releasees commences any
suit or action against any of the Releasors, and (b) the Releasees shall not be
released from any Claims arising out of or relating to any breach by the
Releasees of their obligations under the Purchase Agreement dated as of October
31, 2001 by and between AIHL and Talbot Holdings Ltd. or any agreements
delivered pursuant thereto.
This Release shall be governed by, and construed in accordance
with, the laws of the State of New York applicable to agreements made and to be
performed entirely within such State.
-2-
IN WITNESS WHEREOF, the Releasors have caused this Release to be
duly executed as of the date first above written.
Attest: ALLEGHANY UNDERWRITING HOLDINGS
LTD
By: By:
------------------------ ----------------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇▇▇▇▇
Title: Secretary Title: Chief Executive
Attest: ALLEGHANY UNDERWRITING LTD
By: By:
------------------------ ----------------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇▇▇▇▇
Title: Secretary Title: Chief Executive
Attest: ALLEGHANY UNDERWRITING CAPITAL
LTD
By: By:
------------------------ ----------------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇▇▇▇▇
Title: Secretary Title: Director
Attest: ALLEGHANY UNDERWRITING CAPITAL
(BERMUDA) LTD.
By: By:
------------------------ ----------------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇▇▇▇▇
Title: Assistant Secretary Title: Director
-3-
Attest: TALBOT UNDERWRITING LTD
By: By:
------------------------ ----------------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇▇▇▇▇
Title: Secretary Title: Director
Attest: ALLEGHANY UNDERWRITING RISK
SERVICES LTD
By: By:
------------------------ ----------------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇▇▇▇▇
Title: Secretary Title: Chief Executive
Attest: ALLEGHANY UNDERWRITING SERVICES
LTD
By: By:
------------------------ ----------------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇▇▇▇▇
Title: Secretary Title: Chief Executive
Attest: YACHTSURE LTD
By: By:
------------------------ ----------------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇▇▇▇▇
Title: Secretary Title: Director
Attest: UNDERWRITING RISK SERVICES LTD
By: By:
------------------------ ----------------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇▇ ▇ ▇ ▇▇▇▇▇▇▇▇▇
Title: Secretary Title: Director
-4-
Attest: MARINASURE LTD
By: By:
------------------------ ----------------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ Name: D ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Secretary Title: Sole Director
Attest: VENTON UNDERWRITING AGENCIES LTD
By: By:
------------------------ ----------------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ Name: D ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Secretary Title: Director
Attest: VENTON INSURANCE & RISK
MANAGEMENT SERVICES LTD
By: By:
------------------------ ----------------------------
Name: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇▇ Name: D ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Secretary Title: Sole Director
-5-
