FINAL EXECUTION COPY
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of June 25, 1999, between Reliance
Insurance Company ("Reliance") and Fairfax Financial Holdings Limited
("Purchaser", such term to include, except for the proviso to Section 14, any
assignee of Fairfax Financial Holdings Limited pursuant to Section 14). For
purposes of this Agreement, "Seller" shall mean, collectively, Reliance and its
subsidiaries United Pacific Insurance Company of New York and Reliance Direct
Insurance Company.
WHEREAS, Seller owns an aggregate of 6,574,445 shares (the "Shares")
of common stock, par value U.S. $1.00 per share (the "Common Stock") of Zenith
National Insurance Corp., a Delaware insurance holding company (the "Company");
WHEREAS, Seller wishes to sell to Purchaser the Shares and Purchaser
wishes to purchase from Seller the Shares, upon the terms and subject to the
conditions set forth herein;
WHEREAS, Purchaser is purchasing the Shares for investment purposes;
WHEREAS, Reliance has agreed with Purchaser to assign to Purchaser, at
Purchaser's request, subject to Purchaser obtaining the consent, if required,
of the Company, its registration rights contained in a purchase agreement,
dated as of February 4, 1981 among Reliance, the Company and certain selling
stockholders (the "Purchase Agreement");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, Reliance, on behalf of each
Seller, and Purchaser hereby agree as follows:
1. Sale of Shares. Subject to the terms and conditions contained
herein, Seller will sell to Purchaser, and Purchaser will buy from Seller the
Shares for an aggregate cash purchase price of U.S. $184,084,460 (the "Purchase
Price") representing U.S. $28.00 per Share (the "Per Share Purchase Price")
payable on the Settlement Date (as defined below). The Purchase Price shall be
adjusted upon the terms and conditions described in Section 10 below.
2. Settlement.
(a) Settlement of the sale and purchase under Section 1 of this
Agreement shall take place at the offices of Seller at ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ Avenue Plaza, 29th Floor, New York, New York at 11:00 a.m., New York City
time, on the third business day after receipt by Seller and Purchaser of all
necessary approvals, non-disapprovals or comparable responses described in
Sections 3(c) and 4(g) below (the "Settlement Date" and all such approvals,
non-disapprovals and other comparable responses being hereafter collectively
referred to as the "Necessary Approvals").
(b) On the Settlement Date, Seller shall deliver or cause to be
delivered to Purchaser (i) stock certificates evidencing the Shares (or a
portion thereof) duly endorsed in blank, or accompanied by stock powers duly
executed in blank and with all required stock transfer tax stamps
affixed and by DTC transfer, the remainder of the Shares and (ii) a receipt for
the Purchase Price in respect of the Shares.
(c) On the Settlement Date, Purchaser shall deliver to Seller (i) the
Purchase Price by wire transfer of immediately available funds to Sellers'
accounts as separately furnished to Purchaser in writing prior to the
Settlement Date and (ii) a receipt for the Shares.
3. Representations of Seller. As an inducement to Purchaser to enter
into this Agreement, Reliance represents and warrants to Purchaser that:
(a) Seller beneficially and of record (or through a custodian) owns
the Shares being sold to Purchaser hereunder and such Shares are, free and
clear of all liens, charges and other encumbrances, except for the restrictions
on voting contained in the letter from the California Insurance Department set
forth as Schedule 1 to this Agreement (the "California Letter") and the
restrictions imposed upon the sale of the Shares by the United States federal
securities laws and state insurance holding company laws. Subject to receipt of
the Necessary Approvals, the delivery of and payment for the Shares pursuant to
this Agreement will transfer to Purchaser good and valid title to the Shares.
There are no voting trusts, stockholder agreements, proxies or other agreements
or understandings in effect with respect to the voting or transfer of any of
the Shares, except for the Purchase Agreement and the California Letter.
(b) Each constituent corporation of Seller is an insurance corporation
duly incorporated, validly existing and in good standing under the laws of the
jurisdiction of its incorporation and has all requisite corporate power and
authority to enter into and perform its obligations under this Agreement and to
consummate the transaction contemplated hereby. The execution and delivery of
this Agreement by Reliance, the performance by Reliance of its obligations
hereunder and the consummation by Reliance of the transaction contemplated
hereby have been duly authorized by all requisite corporate action on the part
of Reliance. This Agreement has been duly executed and delivered by Reliance
and constitutes a legal, valid and binding obligation of Reliance, enforceable
against it in accordance with its terms.
(c) Neither the execution and delivery of this Agreement, nor the
consummation of the transaction contemplated hereby conflicts with or results
in a breach of any of the provisions of, or constitutes a default (or event
which with the giving of notice or lapse of time, or both, would become a
default) under, or results in the creation of any encumbrance on any of the
Shares under, any material indenture, mortgage, lease or loan agreement to
which Seller is bound or violates any statute, regulation, rule, judgment,
order, decree or other restriction of any government, governmental agency or
court to which Seller is subject. No notice to, filing with or authorization,
consent or approval of, any government or governmental agency by Seller is
necessary for the consummation of the transaction contemplated by this
Agreement although Reliance and certain of its affiliates will be required to
file Forms 4 and an Amendment to Schedule 13D under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"). Seller acknowledges that the Company
will be required to file an HSR notification.
(d) As of the date of this Agreement, Seller does not know of any
material adverse
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development in regard to the Company that has not been disclosed through
publicly available filings or press releases.
(e) All negotiations relating to this Agreement and the transaction
contemplated hereby have been carried on without the intervention of any person
acting on behalf of Seller in such manner as to give rise to any valid claim
against Purchaser for any brokerage or finder's commission, fee or similar
compensation.
(f) Assuming the accuracy of the representations of Purchaser in
Sections 4(a), (b) and (c), the offer and sale of the Shares hereunder are
exempt from registration under the Securities Act of 1933, as amended (the
"Securities Act").
4. Representations of Purchaser. As an inducement to Reliance to enter
into this Agreement, Purchaser represents and warrants to Reliance that:
(a) Purchaser is acquiring the Shares to be purchased pursuant to this
Agreement for investment purposes, for Purchaser's own account and with no
present intention of distributing or reselling the Shares in any transaction
which would be in violation of the securities laws of the United States of
America or any state thereof or the insurance laws of any state.
(b) Purchaser is an "accredited investor" as such term is defined in
Rule 501(a) of Regulation D under the Securities Act.
(c) Purchaser is aware that (i) the Shares are "restricted securities"
as defined in the Securities Act and are therefore subject to restrictions on
resale and (ii) the Company has no obligation to register the Shares for resale
except, subject to the Company providing any requisite consent, pursuant to the
Purchase Agreement.
(d) In entering into the transaction contemplated hereby, Purchaser is
not relying upon any representations or warranties made by Seller, except for
those expressly set forth in this Agreement.
(e) Purchaser is a corporation duly incorporated, validly existing and
in good standing under the laws of the jurisdiction of its incorporation and
has all requisite power and authority to enter into and perform its obligations
under this Agreement and to consummate the transaction contemplated hereby. The
execution and delivery of this Agreement by Purchaser, the performance by
Purchaser of its obligations hereunder and the consummation by Purchaser of the
transaction contemplated hereby have been duly authorized by all requisite
action on the part of Purchaser. This Agreement has been duly executed and
delivered by Purchaser. This Agreement constitutes a legal, valid and binding
obligation of Purchaser, enforceable against it in accordance with its terms.
(f) Purchaser has sufficient cash available to it to consummate the
purchase of the Shares contemplated hereby without the need for any financing
other than that which is already available or committed to Purchaser without
material condition; provided that Purchaser hereby
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expressly acknowledges and agrees that the ability of Purchaser to obtain the
necessary funds from such financing shall not be a condition to the
consummation of the transaction contemplated hereby.
(g) Neither the execution and delivery of this Agreement, nor the
consummation of the transaction contemplated hereby conflicts with or results
in a breach of any of the provisions of, or constitutes a default (or event
which with the giving of notice or lapse of time or both, would become a
default) under, any material indenture, mortgage, lease or loan agreement to
which Purchaser is bound or violates any statute, regulation, rule, judgment,
order, decree or other restriction of any government, governmental agency or
court to which Purchaser is subject. No notice to, filing with or
authorization, consent or approval of, any government or governmental agency by
Purchaser is necessary for the consummation of the transaction contemplated by
the Agreement, except that Purchaser will be required to make a notification
under the ▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇ Anti-trust Improvements Act of 1976, as amended
(the "HSR Act"), file Forms A with the insurance regulatory authorities in the
States of California and Texas and make such other filings as may be necessary
with applicable insurance regulatory authorities in the United States having
jurisdiction over Purchaser with relation to the purchase of the Shares (the
Form A filings and other filings with insurance regulatory authorities in the
United States being hereinafter referred to as the "Insurance Filings" and the
notification under the HSR Act and the Insurance Filings being hereinafter
collectively referred to as the "Purchaser Regulatory Filings") and obtain the
approvals, non-disapprovals or comparable responses (including the expiration
or termination of waiting periods) of the applicable regulatory entities for
the purchase of the Shares and although Purchaser will be required to file a
Form 3 and a Schedule 13D under the Exchange Act. Purchaser acknowledges that
the Company will be required to file an HSR notification.
(h) All negotiations relating to this Agreement and the transaction
contemplated hereby have been carried on without the intervention of any person
acting on behalf of Purchaser in such manner as to give rise to any valid claim
against Seller for any brokerage or finder's commission, fee or similar
compensation.
5. Covenants of Seller and Purchaser. Each of Seller and Purchaser
will:
(a) file or supply, or cause to be filed or supplied, all
applications, notifications and information required to be filed or supplied by
it pursuant to applicable law in connection with the sale and purchase of the
Shares and the consummation of the transaction contemplated by this Agreement,
including with respect to Purchaser, Form A and other filings with all
appropriate insurance regulatory authorities and all notifications required by
the HSR Act (all of which notifications and filings shall be made as soon as
reasonably practicable; provided that Purchaser will use its best efforts to
give such notifications and make such filings by July 20, 1999 and will do so
in any event no later than July 30, 1999);
(b) promptly respond to requests for additional information and give
such reasonable undertakings to insurance and other regulatory authorities as
may be required to consummate the sale and purchase of the Shares;
(c) use its best efforts to take, or cause to be taken, all actions
necessary, proper or
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advisable in order for it to fulfill its obligations under this Agreement; and
(d) take no action that would result in its representations and
warranties becoming untrue.
6. Covenants of Seller.
(a) Reliance will cause each Seller to fulfill such Seller's
obligations under this Agreement.
(b) Seller will arrange for the resignations from the Board of
Directors of the Company, effective on the Settlement Date, of each of Messrs.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
(c) At the request of Purchaser made at least two (2) days prior to
the Settlement Date, Reliance will execute and deliver to Purchaser a duly
executed assignment agreement (the "Assignment Agreement") pursuant to which
Reliance will assign all of its registration rights under the Purchase
Agreement to Purchaser, subject to Purchaser obtaining the consent of the
Company, to the extent such consent is required (it being agreed by Purchaser
that it shall be Purchaser's sole responsibility to obtain such consent and
Reliance will have no obligation in that regard).
7. Conditions to Closing.
(a) The obligations of Purchaser hereunder to purchase and of Seller
hereunder to sell the Shares are subject to the fulfillment of the following
conditions:
(i) all permits, orders, approvals, consents, non-disapprovals or
non-objections relating to the Insurance Filings and of any other governmental
or insurance regulatory authority which are required in connection with the
consummation of the transaction contemplated by this Agreement including, but
not limited to, the approval by the States in which the Insurance Filings are
required and such other regulatory authorities as require a permit, order,
approval, consent, non-disapproval or non-objection (in the case of any
non-disapprovals or non-objections as evidenced by the time period prescribed
by applicable insurance law having elapsed without Purchaser having received
any objection), shall have been obtained (and, subject to Purchaser's
obligations under Section 5(b) and (c), not contain any conditions or other
terms that are not reasonably acceptable to Purchaser) and such permits,
orders, approvals, consents, non-disapprovals and/or non-objections shall be
effective and shall not have been suspended, revoked or stayed;
(ii) all applicable waiting periods under the HSR Act shall have
expired or been terminated; and
(iii) no injunction or law prohibiting or making illegal the
consummation of the transaction contemplated by this Agreement shall have been
enacted, issued, promulgated or enforced by any court or governmental authority
having jurisdiction over Seller or Purchaser.
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(b) The obligations of Seller to consummate the transaction
contemplated by this Agreement shall be further subject to the fulfillment, at
or prior to the Settlement Date, of the following conditions: (i) the
representations and warranties of Purchaser contained in this Agreement shall
have been true and correct when made and shall be true and correct in all
material respects as of the Settlement Date, with the same force and effect as
if made at the Settlement Date (except if made as of a specified earlier date),
(ii) the covenants and agreements contained in this Agreement to be complied
with by Purchaser on or before the Settlement Date shall have been complied
with in all material respects, and (iii) Seller shall have received a
certificate from Purchaser to the effect set forth in clauses (i) and (ii)
signed by a duly authorized representative thereof.
(c) The obligations of Purchaser to consummate the transaction
contemplated by this Agreement shall be further subject to the fulfillment, on
or prior to the Settlement Date, of the following conditions: (i) the
representations and warranties of Seller contained in this Agreement shall have
been true and correct when made and shall be true and correct in all material
respects as of the Settlement Date, with the same force and effect as if made
at the Settlement Date (except for the representation and warranty set forth in
Section 3(d), which shall only be made as of the date of this Agreement), (ii)
the covenants and agreements contained in this Agreement to be complied with by
Seller on or before the Settlement Date shall have been complied with in all
material respects, and (iii) Purchaser shall have received a certificate from
Seller to the effect set forth in clauses (i) and (ii) signed by a duly
authorized representative thereof and if requested in writing by Purchaser at
least two (2) days prior to the Settlement Date, a duly executed Assignment
Agreement.
8. Termination. This Agreement may be terminated as follows:
(a) by mutual written consent of Seller and Purchaser;
(b) at the election of Seller or Purchaser if the conditions set forth
in Section 7(a) of this Agreement have not been fulfilled on or prior to
December 31, 1999 (so long as the party seeking to terminate this Agreement has
not breached any provision hereof);
(c) at the election of Seller, in the event that the conditions set
forth in Section 7(b) have not been fulfilled by the Settlement Date or have
become impossible of fulfillment prior to the Settlement Date; and
(d) at the election of Purchaser, in the event that the conditions set
forth in Section 7(c) have not been fulfilled by the Settlement Date or have
become impossible of fulfillment prior to the Settlement Date.
In the event of the termination of this Agreement pursuant to the
provisions of this Section 8, this Agreement shall become void and have no
effect, without any liability on the part of any party hereto or its directors,
officers or stockholders in respect of this Agreement, except as specified in
Section 18 hereof and except that nothing herein shall limit the right of
either party to seek damages from the other for breach of this Agreement.
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9. Transactions.
(a) If a Purchaser Acquisition Transaction is consummated on or prior
to the date which is the fifteen month anniversary of the Settlement Date or is
consummated thereafter pursuant to a Purchaser Acquisition Transaction
"commenced" for purposes of Rule 14d-2 of the Exchange Act prior to such date
or pursuant to a definitive acquisition agreement executed as of a date prior
to such fifteen month anniversary and the purchase price per share of Common
Stock is greater than the Per Share Purchase Price, Purchaser shall pay to
Seller in cash, upon consummation of such Purchaser Acquisition Transaction, an
amount equal to the product of (i) the excess of the price per share of the
Common Stock paid by any Purchaser Part(y)(ies) (as defined below) in the
Purchaser Acquisition Transaction over the Per Share Purchase Price and (ii)
the number of Shares sold to Purchaser pursuant to this Agreement.
(b) If a Third Party Acquisition Transaction is "commenced" for
purposes of Rule 14d-2 of the Exchange Act or a definitive acquisition
agreement is executed on or prior to the Settlement Date and the purchase price
per share of Common Stock to be paid in such Third Party Acquisition
Transaction is greater than the Per Share Purchase Price, and any Purchaser
Party sells or otherwise disposes of or agrees to sell or otherwise dispose of
the Shares or any portion thereof purchased or to be purchased by Purchaser
hereunder, then Purchaser shall pay to Seller in cash upon consummation of the
Third Party Acquisition Transaction an amount equal to 50% of the product of
(i) the excess of the purchase price per share of Common Stock in the Third
Party Acquisition Transaction over the Per Share Purchase Price and (ii) the
number of Shares sold or otherwise disposed of by all Purchaser Parties in such
Third Party Acquisition Transaction. Seller acknowledges that nothing in this
Section 9(b) shall be deemed to obligate Purchaser to sell the Shares in a
Third Party Acquisition Transaction.
For purposes of this Section 9, (i) the term "Purchaser Acquisition
Transaction" shall mean a tender offer, merger, consolidation or other
transaction having a similar effect (it being understood that open market
purchases and purchases from the treasury of the Company are not "transactions
having a similar effect") after giving effect to which Purchaser, any affiliate
of Purchaser or any group (as defined in Rule 13d-3 of the Exchange Act)
including Purchaser and/or any of its affiliates (each, a "Purchaser Party"),
owns more than 50% of the Common Stock, (ii) the term "Third Party Acquisition
Transaction" shall mean any transaction in which a party (other than a
Purchaser Party) seeks to own, or after giving effect to which a party other
than a Purchaser Party owns, more than 50% of the Common Stock, whether by a
tender offer, merger, consolidation or other transaction having similar effect,
(iii) securities, notes or other property paid in any Purchaser Acquisition
Transaction or Third Party Acquisition Transaction shall be valued at their
fair market value and (iv) any amount due to Seller under this Section 9 shall
be subject to adjustment pursuant to Section 10 (b) below.
10. Adjustments for Dividends and Other Distributions; Stock Splits,
etc.
(a) Seller and Purchaser agree that Seller shall be entitled to all
dividends and other distributions on the Shares for which the record date is on
or prior to the Settlement Date and that
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Purchaser shall be entitled to all dividends and other distributions on the
Shares for which the record date is after the Settlement Date; provided that in
the event of an Extraordinary Dividend, the Per Share Purchase Price shall be
reduced by the amount per share of such Extraordinary Dividend. For the
purposes of this Section 10, an "Extraordinary Dividend" shall be any dividend
or distribution on the Shares other than the regular quarterly dividend paid on
the Common Stock.
(b) In the event of a change in the number of Shares by virtue of a
stock split, stock dividend, split-up, recapitalization or other similar
transaction, Seller shall deliver to Purchaser on the Settlement Date, without
change in the Purchase Price, that number of shares of Common Stock owned by
Seller on the Settlement Date as a result of such transaction and all such
shares shall be "Shares" under this Agreement. Any payments by Purchaser
required by Section 9 of this Agreement shall give effect to any stock split,
stock dividend, split-up, recapitalization or other similar transaction the
record date for which is prior to the closing of the Purchaser Acquisition
Transaction or the Third Party Acquisition Transaction, as the case may be.
11. Securities Laws. The parties hereto hereby acknowledge that they
are aware that the United States securities laws prohibit any person who has
material non-public information about a company from purchasing or selling
securities of such company or communicating such information to any other
person under circumstances in which it is reasonably foreseeable that such
person is likely to purchase or sell securities of such company.
12. Law Governing. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York. The headings of the
Sections hereof are inserted for convenience only and shall not be deemed to
constitute a part thereof.
13. Consent to Jurisdiction. Purchaser hereby irrevocably submits to
the exclusive jurisdiction of the United States District Court for the Southern
District of New York and any court of the State of New York located in the
Borough of Manhattan over any suit, action or proceeding arising out of or
relating to this Agreement. Purchaser hereby irrevocably waives, to the fullest
extent permitted by law (i) any objection that it may now or hereafter have to
the laying of the venue of any such suit, action or proceeding brought in any
such court or (ii) any claim that any such suit, action or proceeding has been
brought in an inconvenient forum. THE PARTIES HERETO HEREBY WAIVE ANY RIGHTS TO
A TRIAL BY JURY WITH RESPECT TO ANY MATTER RELATING TO THIS AGREEMENT.
14. Assignment. This Agreement may not be assigned by either party
hereto without the prior written consent of the other party hereto, except that
Fairfax Financial Holdings Limited may assign this Agreement to one or more of
its subsidiaries without Seller's prior written consent (Fairfax Financial
Holdings Limited hereby advising Seller of its intent to assign this Agreement
to one or more of its U.S. insurance company subsidiaries); provided that
Fairfax Financial Holdings Limited shall remain liable for the obligations of
Purchaser hereunder as if such assignment had not taken place.
15. Parties in Interest. All the terms and provisions of this
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the
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parties hereto.
16. Amendments. This Agreement may be amended, modified or terminated
only by an instrument in writing signed by Seller and Purchaser.
17. Conveyance Taxes. Purchaser and Seller shall each be responsible
for any stock transfer and stamp taxes or other similar taxes which become
payable in connection with the sale of the Shares to Purchaser under this
Agreement which are such party's obligation under applicable law. Purchaser and
Seller shall execute and deliver all instruments and certificates necessary to
enable the other party to make the necessary tax and other filings, if any.
18. Press Releases. Neither party shall issue any press release
relating to the transaction contemplated hereby without having consulted in
advance with the other party and the parties shall cooperate as to the timing
and contents of any such press release, except in the event that such press
release is required by law or regulations, or by the rules of any securities
exchange on which securities of any of the parties hereto are listed or quoted
and such consultation and cooperation is not reasonably practicable within the
applicable time periods for issuing the release.
19. Notices. All notices, consents, requests, instructions, approvals
and other communications provided herein shall be validly given or made (and
shall be deemed to have been duly given or made upon receipt or delivery), if
in writing and delivered personally or sent by nationally recognized overnight
courier, by facsimile transmission (followed up by certified or registered
mail, return receipt requested) or by registered or certified mail return
receipt requested, (i) if to Purchaser at Fairfax Financial Holdings Limited,
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇, attention: ▇▇▇▇
▇▇▇▇▇▇▇▇, Vice President-Corporate Affairs, facsimile (▇▇▇) ▇▇▇-▇▇▇▇ with a
copy to Shearman & Sterling, Commerce Court West, Suite 4405, P.O. Box 247,
Toronto, Canada ▇▇▇ ▇▇▇, attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, facsimile (▇▇▇) ▇▇▇-▇▇▇▇
and (ii) if to Seller at Reliance Group Holdings, Inc., ▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ Avenue Plaza, 29th Floor, New York, New York 10055, attention: ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, Executive Vice President and Chief Financial Officer, facsimile (212)
909.1864, with a copy to the attention of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Executive Vice
President and General Counsel, facsimile (▇▇▇) ▇▇▇-▇▇▇▇.
20. Miscellaneous. This Agreement may be executed concurrently in two
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Each counterpart
may be delivered by facsimile transmission, which transmission shall be deemed
delivery of an originally executed document.
21. Entire Agreement. This Agreement is intended by the parties as a
final expression of their understandings and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
22. Further Action. Each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all appropriate action, do or
cause to be done all things necessary, proper or
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advisable under applicable laws and regulations, and execute and deliver such
documents and other papers, as may be required to carry out the provisions of
this Agreement and consummate and make effective the transaction contemplated
by this Agreement. Each party will consent to any proposal by one or more of
the other parties for structuring any aspect of the sale of the Shares in a
manner which is advantageous to the party making the proposal if such proposal
is neutral or advantageous to the party whose consent is sought, provided that
such proposal is reasonably feasible, is not contrary to applicable laws and
regulations and will be at no cost to such party.
INTENTIONALLY LEFT BLANK
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
RELIANCE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
FAIRFAX FINANCIAL HOLDINGS LIMITED
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President, Corporate Affairs
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