Exhibit 99.6
EXECUTION VERSION
MASTER SEPARATION AGREEMENT
dated as of May 28, 2009
by and
among
AMERICAN INTERNATIONAL GROUP, INC.,
AMERICAN HOME ASSURANCE COMPANY,
and
TRANSATLANTIC HOLDINGS, INC.
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms...................................... 2
ARTICLE II
EXECUTION OF UNDERWRITING AGREEMENT; CLOSING; CLOSING DELIVERIES
Section 2.01. Execution of Underwriting Agreement........................ 2
Section 2.02. Closing.................................................... 2
Section 2.03. Closing Deliveries......................................... 2
ARTICLE III
AGREEMENTS
Section 3.01. Agreements Relating to the Offering........................ 3
Section 3.02. Regulatory and Other Authorizations; Reasonable Best
Efforts................................................. 4
Section 3.03. Asset Transfers; Other Restructuring....................... 5
Section 3.04. Intercompany Obligations................................... 6
Section 3.05. Intercompany Agreements.................................... 9
Section 3.06. Mutual Release............................................. 9
Section 3.07. Guarantees................................................. 10
Section 3.08. AIG Intellectual Property, AIG Names and Marks, TRH
Intellectual Property, TRH Names and Marks.............. 11
Section 3.09. Insurance.................................................. 17
Section 3.10. D&O Insurance and Liabilities.............................. 18
Section 3.11. Employee Matters........................................... 18
Section 3.12. Access..................................................... 25
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Section 3.13. Books and Records.......................................... 27
Section 3.14. TRH Compliance Matters..................................... 28
Section 3.15. Auditors and Audits; Annual and Quarterly Statements and
Accounting.............................................. 28
Section 3.16. Earnings Releases, Press Releases and Similar Information.. 29
Section 3.17. Confidentiality............................................ 29
Section 3.18. Third-Party Contracts...................................... 32
Section 3.19. AIG Corporate Credit Card Program.......................... 33
Section 3.20. Certain Waivers............................................ 33
Section 3.21. Adoption of Amended and Restated TRH Certificate of
Incorporation........................................... 33
Section 3.22. By-Laws of TRH............................................. 34
Section 3.23. Subleases.................................................. 34
Section 3.24. No Solicitation; No Hire................................... 35
Section 3.25. Further Action............................................. 36
ARTICLE IV
CONDITIONS OF TRH TO CLOSING
Section 4.01. Conditions to Obligations of TRH to Execute the
Underwriting Agreement.................................. 36
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF AIG
Section 5.01. Incorporation and Authority of AIG and AHAC................ 37
Section 5.02. Enforceability............................................. 37
Section 5.03. Consents and Approvals..................................... 38
Section 5.04. Non-Contravention.......................................... 38
Section 5.05. Disclaimer................................................. 38
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF TRH
Section 6.01. Incorporation and Authority of TRH......................... 38
Section 6.02. Enforceability............................................. 38
Section 6.03. Consents and Approvals..................................... 39
Section 6.04. Non-Contravention.......................................... 39
Section 6.05. Disclaimer................................................. 39
ARTICLE VII
TERMINATION AND WAIVER
Section 7.01. Pre-Closing Termination.................................... 39
Section 7.02. Termination of Underwriting Agreement...................... 40
Section 7.03. Post-Closing Termination................................... 40
Section 7.04. Notice of Termination...................................... 40
Section 7.05. Effect of Termination...................................... 40
ARTICLE VIII
INDEMNIFICATION
Section 8.01. Survival................................................... 40
Section 8.02. Indemnification by AIG..................................... 40
Section 8.03. Indemnification by TRH..................................... 41
Section 8.04. Notification of Claims..................................... 42
Section 8.05. Payment.................................................... 43
Section 8.06. Exclusive Remedies......................................... 43
Section 8.07. Additional Indemnification Provisions...................... 44
Section 8.08. Mitigation................................................. 45
Section 8.09. Contribution for Securities Law Violations................. 45
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Section 8.10. Ancillary Agreements....................................... 46
ARTICLE IX
GENERAL PROVISIONS
Section 9.01. Expenses................................................... 46
Section 9.02. Notices.................................................... 46
Section 9.03. Public Announcements....................................... 47
Section 9.04. Severability............................................... 48
Section 9.05. Entire Agreement........................................... 48
Section 9.06. Assignment................................................. 48
Section 9.07. No Third Party Beneficiaries............................... 48
Section 9.08. Amendment; Waiver.......................................... 48
Section 9.09. Governing Law; Submission to Jurisdiction; Waiver of
Jury Trial.............................................. 49
Section 9.10. Rules of Construction...................................... 50
Section 9.11. Specific Performance....................................... 50
Section 9.12. Counterparts............................................... 50
Exhibits
---------
Exhibit A Definitions
Exhibit B Form of Underwriting Agreement
Exhibit C Form of Registration Rights Agreement
Exhibit D Form of Transition Services Agreement
Exhibit E Form of Stockholders Agreement
Exhibit F Form of Hold Harmless Agreement
Exhibit G Form of Consent from AIG and AHAC to Adopt the Restated Certificate
of Incorporation of TRH
Exhibit H Form of Restated Certificate of Incorporation of TRH
Exhibit I Form of New York Sublease
Exhibit J Form of Chicago Sublease
Exhibit K Form of Toronto Sublease
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Annexes
Annex I TRH's Knowledge
Schedules
---------
Schedule 3.03(a) - Asset Transfers from TRH and the Company Subsidiaries
to AIG or any of its Affiliates
Schedule 3.03(b) - Asset Transfers from AIG and its Affiliates to TRH or
the Company Subsidiaries
Schedule 3.04(a) - Intercompany Obligations Settled at Closing
Schedule 3.04(b) - Intercompany Obligations that Survive the Closing
Schedule 3.05(a) - Intercompany Agreements Remaining in Place
Schedule 3.05(b) - Amended Intercompany Agreements
Schedule 3.06 - Exceptions to Mutual Release
Schedule 3.07(a) - AIG Guarantees
Schedule 3.07(d) - Amounts Against which Letters of Credit have been
Applied
Schedule 3.09 - Insurance Premiums
Schedule 3.11(b)(vii) - Pension Plans/TRH Expatriates
Schedule 3.11(b)(viii) - Pension Plans/Liabilities for a certain Employee
Schedule 3.11(f) - AIG's Non-Qualified Plans
Schedule 3.18 - Third-Party Contracts
Schedule 5.03 - AIG Governmental and Other Consent and Approvals
Schedule 6.03 - TRH Governmental and Other Consent and Approvals
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This MASTER SEPARATION AGREEMENT (this "Agreement"), dated as of May
28, 2009, is entered into by and among AMERICAN INTERNATIONAL GROUP, INC., a
Delaware corporation ("AIG"), AMERICAN HOME ASSURANCE COMPANY, a New York
domiciled insurance company and an indirectly wholly-owned subsidiary of AIG
("AHAC"), and TRANSATLANTIC HOLDINGS, INC., a Delaware corporation ("TRH").
RECITALS
A. AIG directly Beneficially Owns 17,073,690 shares of common stock
("Common Stock"), par value $1.00 per share, of TRH (collectively, the "AIG
Shares").
B. AHAC directly Beneficially Owns 22,018,972 shares of Common Stock
of TRH (collectively, the "AHAC Shares" and together with the AIG Shares, the
"Shares").
C. Concurrently with the execution and delivery of this Agreement, TRH
has filed a prospectus supplement to the prospectus contained in Post Effective
Amendment No. 1 to its Registration Statement on Form S-3 (the "Registration
Statement") and a prospectus supplement thereto with the Securities and Exchange
Commission (the "SEC") for a public offering of all or a portion of the Shares
(the "Offering").
D. In the event that AIG and AHAC elect to consummate the Offering and
the transactions contemplated hereby, subject to the satisfaction or waiver of
the last of the conditions to the obligations of TRH contained in Section 4.01
herein, AIG, AHAC, TRH and the Underwriter(s) will enter into an underwriting
agreement in substantially the form attached hereto as Exhibit B with respect to
the Offering (the "Underwriting Agreement"), and simultaneously with the
execution thereof, AIG, AHAC and TRH will close the transactions contemplated
herein (the "Closing").
E. At the Closing, to the extent that not all of the Shares are agreed
to be sold pursuant to the Underwriting Agreement, TRH, AIG and AHAC will enter
into a registration rights agreement in substantially the form attached hereto
as Exhibit C (the "Rights Agreement"), in which TRH shall grant to AIG and AHAC
certain rights to require TRH to register with the SEC their respective Shares
that were not sold pursuant to the Offering.
F. At the Closing, AIG and TRH will enter into a transition services
agreement in substantially the form attached hereto as Exhibit D (the
"Transition Services Agreement").
G. At the Closing, if the Shares to be Beneficially Owned by AIG and
AHAC following the sale of the Shares agreed to be sold pursuant to the
Underwriting Agreement would constitute at least 10% of the outstanding shares
of Common Stock of TRH, AIG, AHAC and TRH will enter into a stockholders
agreement in substantially the form attached hereto as Exhibit E (the
"Stockholders Agreement").
H. At the Closing, to the extent required by, and in accordance with
and pursuant to the provisions of Section 3.07(b) hereof, TRH and AIG shall
enter into one or more hold harmless agreements in substantially the form
attached hereto as Exhibit F (each, a "Hold Harmless Agreement").
I. The parties have determined that it would be appropriate and
desirable to set forth in this Agreement the manner in which certain agreements
and understandings among the parties will be addressed following the Closing.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto, intending to be legally bound hereby,
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms. Capitalized terms used in this
Agreement shall have the meanings specified in Exhibit A or elsewhere in this
Agreement.
ARTICLE II
EXECUTION OF UNDERWRITING AGREEMENT; CLOSING; CLOSING DELIVERIES
Section 2.01. Execution of Underwriting Agreement. AIG, AHAC and TRH
shall enter into the Underwriting Agreement as and when requested by AIG, and
each party shall comply with its respective obligations thereunder; provided
that the obligations of TRH to enter into the Underwriting Agreement shall be
subject to the satisfaction or waiver of the last of the conditions to the
obligations of TRH contained in Section 4.01 herein.
Section 2.02. Closing. The Closing shall occur at the Underwriting
Agreement Effective Time, at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
Section 2.03. Closing Deliveries. At the Closing:
(a) Each of AIG and AHAC shall deliver, or cause to be delivered, to
TRH counterparts of the Underwriting Agreement, duly executed by AIG and AHAC;
(b) Each of AIG and AHAC shall deliver to TRH the written consent
contemplated by Section 3.21, duly executed by a duly authorized officer of AIG
and AHAC, respectively;
(c) Each of AIG and AHAC shall deliver, or cause to be delivered, to
TRH counterparts of the Transition Services Agreement and the Hold Harmless
Agreement, if any, both of which are to be effective upon the First Time of
Delivery, to the extent it is a party to such agreements, duly executed by AIG,
AHAC or their respective applicable Affiliates to the extent each is a party
thereto;
(d) In the event that not all of the Shares are agreed to be sold
pursuant to the Underwriting Agreement, each of AIG and AHAC shall deliver, or
cause to be delivered, to TRH counterparts of the Rights Agreement, to be
effective upon the First Time of Delivery, and, if the Shares to be Beneficially
Owned by AIG and AHAC following the sale of the Shares agreed to
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be sold pursuant to the Underwriting Agreement would constitute at least 10% of
the outstanding shares of Common Stock of TRH, the Stockholders Agreement, to be
effective upon the First Time of Delivery;
(e) Each of AIG and AHAC shall deliver to TRH the certificate
contemplated by Section 4.01(c), duly executed by a duly authorized officer of
AIG and AHAC, respectively;
(f) TRH shall deliver, or cause to be delivered, to AIG and AHAC (as
applicable) counterparts of each of the Transition Services Agreement and the
Hold Harmless Agreement, if any, both of which are to be effective upon the
First Time of Delivery, duly executed by TRH or the applicable Company
Subsidiary party thereto;
(g) In the event that not all of the Shares are agreed to be sold
pursuant to the Underwriting Agreement, TRH shall deliver, or cause to be
delivered, to AIG and AHAC counterparts of the Rights Agreement, to be effective
upon the First Time of Delivery, and, if the Shares to be Beneficially Owned by
AIG and AHAC following the sale of the Shares agreed to be sold pursuant to the
Underwriting Agreement would constitute at least 10% of the outstanding shares
of Common Stock of TRH, the Stockholders Agreement, to be effective upon the
First Time of Delivery;
(h) TRH shall deliver to AIG and AHAC a certificate duly executed by a
duly authorized officer of TRH certifying that (i) the representations and
warranties of TRH contained in this Agreement shall be true and correct in all
material respects as of the date hereof and as of the Closing Date as if made on
and as of the Closing Date and (ii) TRH shall have performed in all material
respects all obligations required to be performed by it under this Agreement on
or prior to the Closing;
(i) TRH shall deliver, or cause to be delivered, to AIG and AHAC
counterparts of the Underwriting Agreement, duly executed by TRH; and
(j) Each party hereto shall deliver to the other parties such other
documents and instruments as may be reasonably necessary to consummate the
transactions contemplated by this Agreement.
ARTICLE III
AGREEMENTS
Section 3.01. Agreements Relating to the Offering. Subject to the
conditions hereof, AIG, AHAC and TRH shall, and shall cause their respective
Affiliates to, use their respective reasonable best efforts to take, or cause to
be taken in good faith, all actions, and to do, or cause to be done, all things
necessary, proper or desirable, or as reasonably requested by any of the other
parties hereto, to consummate the Offering and the other transactions
contemplated by the Transaction Agreements, including by using their respective
reasonable best efforts to take the following actions:
(a) TRH shall file such amendments or supplements to the Registration
Statement, and to any prospectus included therein, as may be reasonably
necessary in order to
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cause the Registration Statement to become and remain effective, and to cause
the Registration Statement, and any such prospectus or supplements thereto, not
to contain any misstatement or omission of a material fact, including filing
such amendments and supplements thereto as may be required by the Underwriting
Agreement, the SEC or applicable securities Laws.
(b) AIG, AHAC and TRH shall enter into the Underwriting Agreement as
and when requested by AIG and each party shall comply with its respective
obligations thereunder, provided that AIG shall have the sole discretion of
whether or not to enter into the Underwriting Agreement.
(c) TRH shall obtain "comfort" letters and updates thereof from its
independent accountants addressed to the Underwriter(s) and such letters shall
be reasonably acceptable to the Underwriter(s) and be in customary form and
covering matters of the type customarily covered in "comfort" letters to
Underwriter(s) as contemplated by the Underwriting Agreement.
(d) TRH shall cooperate with the Underwriter(s) to facilitate timely
preparation and delivery of certificates representing the Shares and to enable
the Shares to be in such denominations and registered in such names as the
Underwriter(s) may request.
(e) TRH shall participate and have senior management of TRH
participate in the preparation of materials and any "roadshow" marketing
efforts, including attendance by senior management at "roadshow" meetings that
AIG and the Underwriter(s) shall deem necessary or desirable.
(f) TRH shall take any and all other actions necessary or desirable,
or as reasonably requested by AIG, to consummate the Offering as contemplated by
the Registration Statement and the Underwriting Agreement, including taking
actions of the type contemplated in Section 4 of the Rights Agreement (whether
or not the Rights Agreement, the form of which is attached hereto as Exhibit C,
is executed and delivered by the parties at the Closing).
Section 3.02. Regulatory and Other Authorizations; Reasonable Best
Efforts.
(a) The parties hereto shall use their reasonable best efforts to
obtain as promptly as practicable all authorizations, consents, orders and
approvals of all Governmental Authorities that may be or may become reasonably
necessary, proper or advisable under the Transaction Agreements and applicable
Laws to consummate and make effective the Offering and the other transactions
contemplated by the Transaction Agreements, and the parties hereto shall take
all actions as may be requested by any such Governmental Authorities to obtain
such authorizations, consents, orders and approvals. Each party hereto shall
cooperate with the reasonable requests of the other party in seeking to obtain
as promptly as practicable all such authorizations, consents, orders and
approvals. None of AIG, AHAC or TRH shall take or cause to be taken any action
that they are aware or should reasonably be aware would have the effect of
delaying, impairing or impeding the receipt of any such required authorizations,
consents, orders or approvals.
(b) The parties hereto shall promptly make all filings and
notifications with all Governmental Authorities that may be or may become
reasonably necessary, proper or advisable
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under the Transaction Agreements and applicable Laws to consummate and make
effective the Offering and the other transactions contemplated by the
Transaction Agreements. AIG, AHAC and TRH each shall supply promptly any
additional information and documentary material that may be requested pursuant
to any applicable Laws. AIG, AHAC and TRH shall have responsibility for their
respective filing fees associated with any required filings.
(c) Subject to applicable Laws relating to the sharing of information,
each of AIG, AHAC and TRH shall (i) promptly notify each other of any
communication it receives from any Governmental Authority (other than the FRBNY)
(ii) permit the other party to review in advance any proposed communication by
such party to any Governmental Authority (other than the FRBNY) and (iii)
provide each other with copies of all correspondence, filings or communications
between such party or any of its Representatives, on the one hand, and any
Governmental Authority (other than the FRBNY) or members of the staff of any
Governmental Authority (other than the FRBNY), on the other hand, in each case
under clauses (i), (ii) and (iii) of this Section 3.02(c) only to the extent
relating to the matters that are the subject of this Agreement. No party to this
Agreement shall agree to participate in any meeting with any Governmental
Authority (other than the FRBNY) relating to the matters that are the subject of
this Agreement unless it consults with the other parties to this Agreement in
advance and, to the extent permitted by such Governmental Authority (other than
the FRBNY), gives the other parties the opportunity to attend and participate at
such meeting. Subject to Section 3.17, AIG, AHAC and TRH shall coordinate and
cooperate fully with each other in exchanging such information and providing
such assistance as the other parties may reasonably request in connection with
the foregoing; provided, however, that the foregoing shall not require AIG,
AHAC, TRH, any of the Company Subsidiaries or any of their respective Affiliates
(i) to disclose any information that in the reasonable judgment of AIG, AHAC,
TRH, any of the Company Subsidiaries or any of their respective Affiliates (as
the case may be) would result in the disclosure of any trade secrets of third
parties or violate any of its obligations with respect to confidentiality or
(ii) to disclose any privileged information or confidential competitive
information of AIG, AHAC, TRH, any of the Company Subsidiaries or any of their
respective Affiliates. No party hereto shall be required to comply with any
provision of this Section 3.02(c) to the extent that such compliance would be
prohibited by applicable Law.
(d) AIG, AHAC and TRH shall use their respective reasonable best
efforts to obtain any other consents and approvals and make any other
notifications that may be required in connection with the transactions
contemplated by the Transaction Agreements; provided, however, that AIG, AHAC
and TRH shall not be required to compensate any third party, commence or
participate in litigation or offer or grant any accommodation (financial or
otherwise) to any third party to obtain any such consent or approval; and
provided further that AIG, AHAC and TRH shall not be required to take any action
with respect to any third party unless such action is conditioned upon the
Closing. Each of AIG, AHAC and TRH shall promptly use its reasonable best
efforts to avoid the entry of, or to effect the dissolution of, any permanent,
preliminary or temporary injunction or other order, decree, decision,
determination or judgment that would delay, restrain, prevent, enjoin or
otherwise prohibit consummation of the Offering and the transactions
contemplated by the Transaction Agreements.
Section 3.03. Asset Transfers; Other Restructuring. Concurrently with
the Closing, TRH shall, and shall cause the Company Subsidiaries to, transfer
the assets, properties
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and rights and liabilities owned or possessed by TRH and the Company
Subsidiaries listed on Schedule 3.03(a) to AIG or any of its Affiliates as AIG
shall designate. Concurrently with the Closing, AIG shall, and shall cause its
Affiliates to, transfer the assets, properties and rights and liabilities owned
or possessed by AIG listed on Schedule 3.03(b) to TRH or any of the Company
Subsidiaries as TRH shall designate and any other Intellectual Property owned by
AIG or any of its Affiliates that is used exclusively in the conduct of the
business of TRH and the Company Subsidiaries, together with all tangible
embodiments of any of the foregoing. AIG shall (and shall cause its Affiliates
to) from time to time, at TRH's request, execute and deliver, or cause to be
executed and delivered, such further instruments of assignment or other
documents, and perform such further acts, as TRH may reasonably request in order
to fully effect the assignment and transfer of the Intellectual Property to be
transferred to TRH or the applicable Company Subsidiaries designated by TRH
pursuant to this Section 3.03. Concurrently with the Closing, TRH shall, and
shall cause the Company Subsidiaries to, transfer to AIG or any of its
Affiliates as AIG shall designate, any Intellectual Property owned by TRH or any
of the Company Subsidiaries that is used exclusively in the conduct of business
of AIG or its Affiliates, together with all tangible embodiments of any of the
foregoing. TRH shall (and shall cause the Company Subsidiaries to) from time to
time, at AIG's request, execute and deliver, or cause to be executed and
delivered, such further instruments of assignment or other documents, and
perform such further acts, as AIG may reasonably request in order to fully
effect the assignment and transfer of the Intellectual Property to be
transferred to AIG or its applicable Affiliates designated by AIG pursuant to
this Section 3.03.
Section 3.04. Intercompany Obligations.
(a) AIG and TRH shall, and shall cause their respective Affiliates to,
take such action and make such payments as may be necessary so that no later
than concurrently with the Closing, TRH and the Company Subsidiaries, on the one
hand, and AIG and its Affiliates, on the other hand, shall pay in full all
intercompany loans, notes and advances regardless of their maturity and all
intercompany receivables and payables invoiced prior to the Closing, including
(A) any accrued and unpaid interest in accordance with any Contracts underlying
such intercompany loan, note, advance, receivable or payable, and (B) without
limiting the generality of the foregoing, all intercompany loans, notes,
advances, receivables or payables set forth on Schedule 3.04(a) (provided that
for the avoidance of doubt to the extent such amounts set forth on Schedule
3.04(a) are paid concurrently with Closing such amounts shall not be subject to
interest); provided, however, that this Section 3.04 shall not apply to any
intercompany loans, notes, advances, receivables or payables (i) arising under
any Intercompany Agreement set forth on Schedule 3.05(a) or Schedule 3.05(b) not
otherwise due and payable, (ii) arising under any Insurance Agreement and not
otherwise due and payable, (iii) arising under the TRH Notes or any Related
Documents, (iv) set forth on Schedule 3.04(b) or (v) costs and expenses paid by
one party or its respective Affiliates on behalf of the other party or its
respective Affiliates or deposits paid by one party or its respective Affiliates
to the other party or its respective Affiliates invoiced after the Closing, as
provided in Section 3.04(b) below.
(b) AIG and TRH shall, and shall cause their respective Affiliates to,
take such action and make such payments as may be necessary so that TRH and the
Company Subsidiaries, on the one hand, and AIG and its Affiliates, on the other
hand, shall pay in full all (i) costs and expenses paid by one party or
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its respective Affiliates on behalf of the other party or its respective
Affiliates or (ii) deposits paid by one party or its respective Affiliates to
the other party or its respective Affiliates, in each case under clauses (i) and
(ii) invoiced after the Closing, including, any accrued and unpaid interest to
but excluding the date of payment, within twenty (20) days of receipt of an
invoice detailing such amounts (the "Post-Closing Invoice").
(c) In the event that AIG or TRH or any of their respective Affiliates
disputes any amount detailed on a Post-Closing Invoice, AIG or TRH or any of
their respective Affiliates shall (i) give notice of such disputed amount to AIG
or TRH pursuant to the provisions of Section 3.04(d) and (ii) pay any undisputed
amounts on such invoice, in each case within twenty (20) days from receipt of
such disputed Post-Closing Invoice.
(d) Any dispute in connection with (1) a Post-Closing Invoice, (2) the
amounts set forth on Schedule 3.04(b) or (3) any amounts invoiced prior to
Closing but not paid concurrently with the Closing (each, a "Dispute") shall be
resolved as follows:
(i) The managers of the parties most immediately responsible for the
issue giving rise to the Dispute shall seek to resolve such Dispute through
informal good faith negotiation. If the Dispute is not resolved at that
level of management within seven (7) Business Days after the claiming party
verbally notifies the other party of the Dispute, then the claiming party
will provide the other party with a written "Notice of Dispute", describing
the nature of the Dispute, and the Dispute shall be escalated to the Chief
Administrative Officers, Chief Operating Officers or Chief Financial
Officers of the parties or their respective designees who shall discuss the
dispute (either in person or by telephone) within seven (7) Business Days
after such Notice of Dispute is provided by the claiming party to the other
party and confer in a good faith effort to resolve the Dispute. If the
Chief Administrative Officers, Chief Operating Officers or Chief Financial
Officers or their respective designees do not discuss the dispute within
the allotted time or fail to resolve the Dispute within seven (7) Business
Days after beginning such discussions, then the Dispute shall be finally
settled by arbitration as follows:
(ii) The arbitration shall be conducted by three (3) arbitrators in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association ("AAA") in effect at the time of the arbitration,
except as they may be modified herein or by mutual agreement of the
parties. The seat of the arbitration shall be New York, New York.
(iii) The claimant shall appoint an arbitrator in its request for
arbitration. The respondent shall appoint an arbitrator within thirty (30)
days of the receipt of the request for arbitration. The two (2) arbitrators
shall appoint a third arbitrator within thirty (30) days after the
appointment of the second arbitrator. The third arbitrator shall act as
chair of the tribunal. If any of the three (3) arbitrators is not appointed
within the time prescribed above, then upon the request of any party, the
AAA shall appoint that arbitrator.
(iv) The award shall be final and binding on the parties. Judgment
upon the award may be entered by any court having jurisdiction thereof or
having jurisdiction over the relevant party or its assets.
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(v) Any request for production of documents or other information is
subject to the express authorization of the tribunal, which shall endeavor
to ensure that any such requests are as limited and disciplined as is
consistent with the just resolution of the Dispute. The parties expressly
waive any right to seek evidence under 9 U.S.C. Section 7 or any similar
provision. A party may request, and the tribunal should authorize,
production only of specific documents or narrow and specific categories of
documents that are critical to the fair presentation of a party's case and
reasonably believed to exist and be in the possession, custody or control
of the other party.
(vi) The parties agree that the arbitration shall be kept confidential
and that the existence of the proceeding and any element of it (including
any pleadings, briefs or other documents submitted or exchanged, any
testimony or other oral submissions and any awards) shall not be disclosed
beyond the arbitral tribunal, the AAA, the parties, their counsels,
accountants and auditors, insurers and re-insurers or any person necessary
to the conduct of the proceeding. These confidentiality obligations shall
not apply (i) if disclosure is required by Law or regulatory obligations,
the applicable rules and policies of any national securities exchange or in
judicial or administrative proceedings or (ii) as far as disclosure is
necessary to enforce the rights arising out of the award.
(vii) Notwithstanding Section 9.09 of this Agreement, the agreement to
arbitrate set forth in this Section 3.04(d) and any arbitration conducted
hereunder shall be governed by Title 9 (Arbitration) of the United States
Code.
(viii) The parties submit to the non-exclusive jurisdiction of the
federal and state courts located within the County of New York, State of
New York, as well as all appellate courts having jurisdiction over appeals
from any of the foregoing, for the limited purpose of: (i) an application
to compel arbitration or to resolve any dispute concerning the validity or
effectiveness of this agreement to arbitrate; or (ii) an application for
relief in aid of arbitration or enforcement of an arbitration award,
including an application for a restraining order and/or injunction to
preserve the party's rights. A request to a court for any of the foregoing
remedies shall not be deemed incompatible with or a waiver of any party's
right to arbitrate. Each party hereby waives any requirement for the
securing or posting of any bond in connection with such remedy.
(ix) Any disputed amounts required to be paid by either AIG or any of
its Affiliates, on the one hand, or TRH or any Company Subsidiary, on the
other hand, after a dispute is resolved pursuant to this Section 3.04(d)
shall be subject to interest from the date that is thirty (30) days after
the date such disputed amount was due to, but not including, the date of
payment of such disputed amount at an interest rate of three percent (3%)
over the London Inter-Bank Offered Rate for a one (1) year period, as
published by the eastern edition of The Wall Street Journal on the date on
which such disputed amount was due, provided, however, that any amounts set
forth on Schedule 3.04(b) or invoiced prior to Closing but not paid
concurrently with Closing shall not be subject to interest pursuant to this
Section 3.04(d) and shall be subject solely to interest in accordance with
any Contract underlying such intercompany loan, note, advance, receivable
or payable.
8
Section 3.05. Intercompany Agreements. AIG and TRH shall, and shall
cause their respective Affiliates to, take such actions on or prior to the
Closing Date as may be necessary to terminate or commute, effective upon the
First Time of Delivery, all contracts, agreements, notes, leases, licenses and
other instruments, whether written or oral, between TRH or any of the Company
Subsidiaries, on the one hand, and AIG or any of its Affiliates, on the other
hand (collectively, the "Intercompany Agreements"); provided, however, that this
Section 3.05 shall not apply to (i) any Intercompany Agreement set forth on
Schedule 3.05(a) or Schedule 3.05(b), (ii) any Insurance Agreement or (iii) the
TRH Notes or any Related Documents. AIG and TRH shall, and shall cause their
respective Affiliates to, take such actions on or prior to the Closing Date as
may be necessary to amend, effective upon the First Time of Delivery, those
Intercompany Agreements set forth on Schedule 3.05(b) in the manner as set forth
on Schedule 3.05(b). In the event that the Insurance Department of the State of
New York or any other applicable Governmental Authority does not approve the
proposed termination, commutation or amendment of any agreement pursuant to this
Section 3.05 on or prior to the Closing, the parties agree to negotiate in good
faith without any undue delay to revise each such agreement in a manner that
will be satisfactory to the Insurance Department of the State of New York or any
other applicable Governmental Authority and consistent with the terms and
conditions contemplated by this Section 3.05 and such proposed amendments as set
forth on Schedule 3.05(b). For the avoidance of doubt, this Section 3.05 shall
not apply to any Schedule 3.18 Contracts, which are governed exclusively by
Section 3.18.
Section 3.06. Mutual Release. Concurrently with the First Time of
Delivery, AIG and its Affiliates, on the one hand, and TRH and the Company
Subsidiaries, on the other hand, on behalf of themselves and their respective
successors, heirs and executors hereby irrevocably, knowingly and voluntarily
release, discharge and forever waive and relinquish all claims, demands,
obligations, liabilities, defenses, affirmative defenses, setoffs,
counterclaims, Actions and causes of action of whatsoever kind or nature,
whether known or unknown, which any of them has, may have or might have or may
assert now or in the future, against the other party or such other party's
respective Affiliates, successors, heirs, executors, officers, directors,
partners and employees (in each case in their capacity as such) (each, an "AIG
Releasee" or a "TRH Releasee") directly or indirectly, arising out of, based
upon, or resulting from any Contract, transaction, event, circumstance, action,
failure to act or occurrence of any sort or type, whether known or unknown, and
which occurred, existed, was taken, permitted or begun prior to the First Time
of Delivery, other than to the extent related to or arising out of (i) any
intercompany loan, note, advance, receivable or payable set forth on Schedule
3.04(b), (ii) costs and expenses paid by one party or its respective Affiliates
on behalf of the other party or its respective Affiliates or deposits paid by
one party or its respective Affiliates to the other party or its respective
Affiliates invoiced after the Closing, (iii) any Intercompany Agreement set
forth on Schedule 3.05(a) or Schedule 3.05(b), (iv) any Insurance Agreement, (v)
the TRH Notes or any Related Documents, (vi) any AIG Guaranty to the extent not
terminated and fully released pursuant to Section 3.07(a) and Section 3.07(b) or
(vii) any other Contracts or any other claims, demands, obligations,
liabilities, defenses, affirmative defenses, setoffs, counterclaims, Actions and
causes of action of whatever kind or nature as set forth on Schedule 3.06. The
foregoing release shall not apply to any claim arising under the terms of this
Agreement or any other Transaction Agreement (or any Contract, transaction,
event, circumstance, action, failure to act or occurrence of any sort or type
giving rise to a claim under the terms of this Agreement or any other
Transaction Agreement) or any claim alleging fraud or intentional misconduct.
AIG and
9
TRH shall, and shall cause their respective Affiliates, successors, heirs and
executors to, refrain from, directly or indirectly, asserting any claim or
demand, or commencing, instituting or causing to be commenced, any legal
proceeding of any kind against each other based upon any matter released
pursuant to this Section 3.06. The parties hereby acknowledge and agree that the
execution of this Agreement shall not constitute an acknowledgment of or an
admission by them of the existence of any such claims or of liability for any
matter or precedent upon which any liability may be asserted.
Section 3.07. Guarantees.
(a) From and after the date hereof, TRH shall use its reasonable best
efforts on or prior to the Closing Date to obtain, effective upon the First Time
of Delivery, the termination of, and full release of AIG and its Affiliates from
any and all obligations arising under, any and all guarantees, keepwells,
letters of credit, indemnity or contribution agreements, support agreements,
insurance surety bonds or other similar agreements (excluding Insurance
Agreements) made in respect of the obligations of, or for the benefit of any
obligee of, TRH and/or any of the Company Subsidiaries by AIG or any of its
Affiliates (each, an "AIG Guaranty"), including the agreements set forth on
Schedule 3.07(a). For the avoidance of doubt, such efforts shall include an
offer by TRH (or with AIG's consent a Company Subsidiary) to substitute its own
obligations for those of AIG or any of its Affiliates under any AIG Guaranty on
no less favorable terms.
(b) With respect to each AIG Guaranty for which TRH does not obtain
the termination of such AIG Guaranty and full release of AIG and its Affiliates
from any and all obligations arising under such AIG Guaranty, TRH shall,
concurrently with the Closing, but effective upon the First Time of Delivery,
(i) enter into a Hold Harmless Agreement with respect to each such AIG Guaranty,
and (ii) if any such AIG Guaranty relates to Insurance Contract-related
obligations of TRH and any of the Company Subsidiaries, provide a guaranty that
provides to policyholders of TRH or such Company Subsidiary the direct benefits
of a guaranty from TRH (or with AIG's consent a Company Subsidiary) on terms no
less favorable than those of such AIG Guaranty.
(c) With respect to each AIG Guaranty identified after the Closing for
which TRH has not obtained the termination of such AIG Guaranty and full release
of AIG and its Affiliates from any and all obligations arising under such AIG
Guaranty, TRH shall, within ten (10) days after the identification of such AIG
Guarantee, (i) enter into a Hold Harmless Agreement with respect to each such
AIG Guaranty, and (ii) if any such AIG Guaranty relates to Insurance
Contract-related obligations of TRH and any of the Company Subsidiaries, provide
a guaranty that provides to policyholders of TRH or such Company Subsidiary the
direct benefits of a guaranty from TRH (or with AIG's consent a Company
Subsidiary) on terms no less favorable than those of such AIG Guaranty.
(d) AIG agrees on behalf of itself and its Affiliates that TRH and/or
any Company Subsidiary shall be able to retain all funds drawn down prior to
December 1, 2008 under letters of credit provided by AIG and/or any of its
Affiliates for the benefit of TRH and the Company Subsidiaries with respect to
reinsurance balances due to any Company Subsidiary from third parties. Within
sixty (60) days after the Closing, TRH shall pay to AIG in connection with
10
the $16,283,400 drawn down by the applicable Company Subsidiaries after December
1, 2008 under such letters of credit an aggregate amount of $16,283,400 minus
the amounts set forth on Schedule 3.07(d). To the extent that TRH or any Company
Subsidiary ultimately collects any of the outstanding reinsurance balances
relating to the amounts set forth on Schedule 3.07(d), TRH shall pay such
amounts to AIG within ten (10) days of collecting such amounts. TRH or any
Company Subsidiary shall use commercially reasonable efforts, consistent with
its past practice in collecting the outstanding reinsurance balances relating to
the amounts set forth on Schedule 3.07(d), to collect such outstanding
reinsurance balances. The payment of any amount under this Section 3.07(d) by
TRH and/or any Company Subsidiary to AIG or any Affiliate of AIG shall be made
payable in immediately available funds in U.S. dollars, free of any tax and
deductions of any kind. The aggregate amount of $16,283,400 minus the amounts
set forth on Schedule 3.07(d) paid by TRH or any Company Subsidiary to AIG or
any Affiliate of AIG in accordance with this Section 3.07(d) shall be subject to
interest from the date of Closing to, but not including, the date of payment of
such funds at an interest rate of three percent (3%) over the London Inter-Bank
Offered Rate for a one (1) year period, as published by the eastern edition of
The Wall Street Journal on the date on which such funds were drawn; provided,
however, if such amount is paid within thirty (30) days of Closing, then such
amount shall not be subject to any interest. Any of the outstanding reinsurance
balances relating to the amounts set forth on Schedule 3.07(d) ultimately
collected by TRH or any Company Subsidiary shall be subject to interest from the
date such amounts were collected to, but not including, the date of payment of
such funds at an interest rate of three percent (3%) over the London Inter-Bank
Offered Rate for a one (1) year period, as published by the eastern edition of
The Wall Street Journal on the date on which such funds were drawn; provided,
however, if such amounts are paid by TRH or any Company Subsidiary to AIG or any
Affiliate of AIG within ten (10) days of collecting such amounts in accordance
with this Section 3.07(d), then such amounts shall not be subject to any
interest.
Section 3.08. AIG Intellectual Property, AIG Names and Marks, TRH
Intellectual Property, TRH Names and Marks.
(a) TRH, for itself and the Company Subsidiaries, acknowledges and
agrees that, subject to Section 3.08(c), TRH is not retaining any right, title
or interest in or to any Intellectual Property owned or licensed by AIG or its
Affiliates, including the names "AIG," "American International Group, Inc." or
"AI," or any trade, corporate or business names, trademarks, tag-lines,
identifying logos, trade dress, monograms, slogans, service marks, domain names,
brand names or any other name or source identifiers related thereto or employing
the wording "AIG" or any "AI" formative marks, "American International"
formative marks or any derivation or variation of any of the foregoing (for
example, among others, AI, AI RISK, AIA, AIU, as well as American International,
American International Group, American International Underwriters, American
International Assurance) or any confusingly similar trade, corporate or business
name, trademark, tag-line, identifying logo, trade dress, monogram, slogan,
11
service ▇▇▇▇, domain name, brand name or other name or source identifier
(including any registrations and applications relating thereto) (collectively,
the "AIG Names and Marks"), and, except as otherwise expressly provided in this
Section 3.08 or in any Ancillary Agreement, neither TRH nor any Company
Subsidiary shall have any rights in or to any of the AIG Names and Marks and
neither TRH nor any Company Subsidiary shall (i) seek to register in any
jurisdiction any trade, corporate or business name, trademark, tag-line,
identifying logo, trade dress, monogram, slogan, service ▇▇▇▇, domain name,
brand name or other name or source identifier that is a derivation, translation,
adaptation, combination or variation of the AIG Names and Marks or that is
confusingly similar thereto or (ii) contest the use, ownership, validity or
enforceability of any rights of AIG or any of its Affiliates in or to any of the
AIG Names and Marks. AIG, for itself and its Affiliates, acknowledges and agrees
that, subject to Section 3.08(e), AIG is not retaining any right, title or
interest in or to any Intellectual Property owned or licensed by TRH or the
Company Subsidiaries, and the names "Transatlantic", "Transatlantic Holdings" or
"TRC" or any trade, corporate or business names, trademarks, tag-lines,
identifying logos, trade dress, monograms, slogans, service marks, domain names,
brand names or any other name or source identifiers related thereto or employing
the wording "Transatlantic" or "TRC", or any derivation or variation of any of
the foregoing (for example, among others, Transre) or any confusingly similar
trade, corporate or business name, trademark, tag-line, identifying logo, trade
dress, monogram, slogan, service ▇▇▇▇, domain name, brand name or other name or
source identifier (including any registrations and applications relating
thereto) (collectively, the "TRH Names and Marks"), and, except as otherwise
expressly provided in this Section 3.08 or in any Ancillary Agreement, neither
AIG nor any of its Affiliates shall have any rights in or to any of the TRH
Names and Marks and neither AIG nor any of its Affiliates shall (i) seek to
register in any jurisdiction any trade, corporate or business name, trademark,
tag-line, identifying logo, trade dress, monogram, slogan, service ▇▇▇▇, domain
name, brand name or other name or source identifier that is a derivation,
translation, adaptation, combination or variation of the TRH Names and Marks or
that is confusingly similar thereto or (ii) contest the use, ownership, validity
or enforceability of any rights of TRH or any of the Company Subsidiaries in or
to any of the TRH Names and Marks.
(b) Except as otherwise expressly provided in this Section 3.08 or any
other Transaction Agreement, following the First Time of Delivery, (i) TRH and
the Company Subsidiaries shall immediately cease and discontinue any and all
uses of all the Intellectual Property owned or licensed by AIG or its
Affiliates, including the AIG Names and Marks, whether or not in combination
with other words, symbols or other distinctive or non-distinctive elements and
all trade, corporate or business names, trademarks, tag-lines, identifying
logos, service marks, trade dress, slogans, monograms, service marks, domain
names, brand names and other names or source identifiers similar to any of the
foregoing or embodying any of the foregoing whether or not in combination with
other words, symbols or other distinctive or non-distinctive elements, and (ii)
all rights of TRH and the Company Subsidiaries, and their sublicensees, if any,
in and to the Intellectual Property owned or licensed by AIG or its Affiliates,
including the AIG Names and Marks, including any such rights licensed to TRH and
the Company Subsidiaries pursuant to any agreements or other arrangements,
whether written or oral, with AIG or its Affiliates (except as otherwise set
forth in this Section 3.08 or in any other Transaction Agreement) shall
terminate on the First Time of Delivery. TRH, for itself and the Company
Subsidiaries, agrees that after the First Time of Delivery, TRH, the Company
Subsidiaries and/or any of their Affiliates shall not expressly, or by
implication, do business as or represent themselves as being affiliated with AIG
or its Affiliates and shall not knowingly take action that reasonably would be
expected to create confusion that TRH and the Company Subsidiaries remain
affiliated with AIG or its Affiliates, except to the extent that AIG retains a
corporate affiliation with TRH. Except as otherwise expressly provided in this
Section 3.08 or any other Transaction Agreement, following the First Time of
Delivery, (i) AIG and its Affiliates shall immediately cease and discontinue any
and all uses of all the Intellectual Property owned or
12
licensed by TRH or any of the Company Subsidiaries, including the TRH Names and
Marks, whether or not in combination with other words, symbols or other
distinctive or non-distinctive elements and all trade, corporate or business
names, trademarks, tag-lines, identifying logos, service marks, trade dress,
slogans, monograms, service marks, domain names, brand names and other names or
source identifiers similar to any of the foregoing or embodying any of the
foregoing whether or not in combination with other words, symbols or other
distinctive or non-distinctive elements, and (ii) all rights of AIG and its
Affiliates, and their sublicensees, if any, in and to the Intellectual Property
owned or licensed by TRH or any of the Company Subsidiaries, including the TRH
Names and Marks, including any such rights licensed to AIG and its Affiliates
pursuant to any agreements or other arrangements, whether written or oral, with
TRH or any of the Company Subsidiaries (except as otherwise set forth in this
Section 3.08 or in any other Transaction Agreement) shall terminate on the First
Time of Delivery. AIG, for itself and its Affiliates, agrees that after the
First Time of Delivery, AIG and/or any of its Affiliates shall not expressly, or
by implication, do business as or represent themselves as being affiliated with
TRH or the Company Subsidiaries and shall not knowingly take action that
reasonably would be expected to create confusion that AIG and its Affiliates
remain affiliated with TRH or the Company Subsidiaries, except to the extent
that AIG retains a corporate affiliation with TRH.
(c) TRH and the Company Subsidiaries shall have the right to use and
display all materials in their possession as of the First Time of Delivery that
bear any AIG Names and Marks, including advertising, promotional materials,
packaging, inventory, electronic materials, collateral goods, stationery,
business cards, invoices, receipts, forms, product, training and service
literature and materials, and other materials ("AIG Materials"); provided that
such right to use and display the AIG Materials shall expire on the earlier of
(i) the date on which all of the AIG Materials have been exhausted or (ii) three
(3) months after the First Time of Delivery. The foregoing right is solely to
deplete existing inventory of AIG Materials and transition from use of the AIG
Names and Marks, and none of TRH or the Company Subsidiaries may reproduce any
existing AIG Materials or create any new materials bearing the AIG Names and
Marks. Notwithstanding the foregoing, (i) TRH agrees to change or remove all
signage that bears any AIG Names and Marks within three (3) months after the
First Time of Delivery and (ii) if and to the extent that the approval of any
Governmental Authorities is required for TRH to cease use of or to modify any
AIG Materials, TRH and the Company Subsidiaries shall have the right to continue
to use such AIG Materials until all such Governmental Authorities have granted
TRH and its Affiliates approval to cease the use of or to modify AIG Materials
that require such approval to be modified, provided that TRH and the Company
Subsidiaries shall use commercially reasonable efforts to obtain such approvals
from the applicable Governmental Authorities as expeditiously as reasonably
possible. Subject to applicable Law, TRH, for itself and on behalf of the
Company Subsidiaries, agrees that use of the AIG Names and Marks during the
applicable period as set forth in this Section 3.08(c), shall be only with
respect to goods and services of a level of quality substantially equal to or
greater than the quality of goods and services with respect to which TRH and
each of the Company Subsidiaries used the AIG Names and Marks immediately prior
to the First Time of Delivery. TRH and the Company Subsidiaries shall not be
required to remove or replace any AIG Names and Marks from any AIG Materials
that were distributed prior to the First Time of Delivery or during the periods
set forth in Section 3.08(c)(i) and (ii) above. Neither TRH nor any of the
Company Subsidiaries may assign or otherwise transfer their respective rights
set forth in this Section 3.08(c) other than in connection with a Change of
Control of TRH or any of the Company Subsidiaries. TRH agrees that any use
13
of the AIG Names and Marks by TRH and the Company Subsidiaries will be in a
manner that does not harm or disparage AIG and its Affiliates or the reputation
or goodwill of the AIG Names and Marks. Upon AIG's request, TRH will explain and
provide samples of its use of the AIG Names and Marks for AIG to verify
compliance with the foregoing.
(d) Within thirty (30) days after the First Time of Delivery, each of
TRH and the Company Subsidiaries shall execute and file amended organizational
documents that will effect a change in its name to a name not containing any of
the AIG Names and Marks or any derivation, translation, adaptation, combination
or variation thereof.
(e) Effective as of the First Time of Delivery, TRH, on behalf of
itself and the Company Subsidiaries, hereby grants to each of AIG and its
Affiliates and their respective successors and assigns (each, an "AIG Licensed
Party" and together, the "AIG Licensed Parties") a perpetual, irrevocable,
worldwide, royalty-free, fully paid-up, non-exclusive, sublicenseable (on
multiple levels, to the extent the subject Intellectual Property heretofore has
been licensed or sublicensed, as applicable, in the ordinary course of the
business of each such AIG Licensed Party), non-transferable (except as set forth
in this Section 3.08(e)) right and license, in and to all Intellectual Property
(other than Trademarks) owned by TRH and/or any of the Company Subsidiaries
immediately following the First Time of Delivery that is being used as of the
First Time of Delivery in connection with the business of each such AIG Licensed
Party (other than TRH and the Company Subsidiaries), for the continued use in
connection with the business of each such AIG Licensed Party. No AIG Licensed
Party may assign or otherwise transfer its license set forth in this Section
3.08(e) other than in connection with a Change of Control of any AIG Licensed
Party. Effective as of the First Time of Delivery, AIG, on behalf of itself and
its Affiliates, hereby grants to each of TRH and the Company Subsidiaries and
their respective successors and assigns (each, a "TRH Licensed Party" and
together, the "TRH Licensed Parties") a perpetual, irrevocable, worldwide,
royalty-free, fully paid-up, non-exclusive, sublicenseable (on multiple levels,
to the extent the subject Intellectual Property heretofore has been licensed or
sublicensed, as applicable, in the ordinary course of the business of each such
TRH Licensed Party), non-transferable (except as set forth in this Section
3.08(e)) right and license, in and to all Intellectual Property (other than (i)
Intellectual Property to which TRH or any of the Company Subsidiaries is
licensed or otherwise provided access under any Ancillary Agreement, and (ii)
Trademarks) owned by AIG and/or any of its Affiliates immediately following the
First Time of Delivery that is being used as of the First Time of Delivery in
connection with the business of each such TRH Licensed Party, for the continued
use in connection with the business of each such TRH Licensed Party. No TRH
Licensed Party may assign or otherwise transfer its license set forth in this
Section 3.08(e) other than in connection with a Change of Control of any TRH
Licensed Party.
(f) AIG and its Affiliates shall have the right to use and display all
materials in their possession as of the First Time of Delivery that bear any TRH
Names and Marks, including advertising, promotional materials, packaging,
inventory, electronic materials, collateral goods, stationery, business cards,
invoices, receipts, forms, product, training and service literature and
materials, and other materials ("TRH Materials"); provided that such right to
use and display the TRH Materials shall expire on the earlier of (i) the date on
which all of the TRH Materials have been exhausted or (ii) three (3) months
after the First Time of Delivery. The foregoing right is solely to deplete
existing inventory of TRH Materials and transition from
14
use of the TRH Names and Marks, and none of AIG or its Affiliate may reproduce
any existing TRH Materials or create any new materials bearing the TRH Names and
Marks. Notwithstanding the foregoing, (i) AIG agrees to change or remove all
signage that bears any TRH Names and Marks within three (3) months after the
First Time of Delivery; and (ii) if and to the extent that the approval of any
Governmental Authorities is required for AIG to cease use of or to modify any
TRH Materials, AIG and its Affiliates shall have the right to continue to use
such TRH Materials until all such Governmental Authorities have granted AIG and
its Affiliates approval to cease the use of or to modify TRH Materials that
require such approval to be modified, provided that AIG and its Affiliates shall
use commercially reasonable efforts to obtain such approvals from the applicable
Governmental Authorities as expeditiously as reasonably possible. Subject to
applicable Law, AIG, for itself and on behalf of its Affiliates, agrees that use
of the TRH Names and Marks during the applicable period as set forth in this
Section 3.08(f), shall be only with respect to goods and services of a level of
quality substantially equal to or greater than the quality of goods and services
with respect to which AIG and each of its applicable Affiliates used the TRH
Names and Marks immediately prior to the First Time of Delivery. AIG and its
Affiliates shall not be required to remove or replace any TRH Names and Marks
from any Materials that were distributed prior to the First Time of Delivery or
during the periods set forth in Section 3.08(f)(i) and (ii) above. Neither AIG
nor any of its Affiliates may assign or otherwise transfer their respective
rights set forth in this Section 3.08(f) other than in connection with a Change
of Control of AIG or any of its Affiliates. AIG agrees that any use of the TRH
Names and Marks by AIG or any of its Affiliates will be in a manner that does
not harm or disparage TRH and the Company Subsidiaries or the reputation or
goodwill of the TRH Names and Marks. Upon TRH's request, AIG will explain and
provide samples of its use of the TRH Names and Marks for TRH to verify
compliance with the foregoing.
(g) AIG and TRH each agree that irreparable damage would occur if the
other party does not perform its obligations in accordance with the specific
terms of this Section 3.08 or otherwise breaches its obligations thereunder. It
is accordingly agreed that, without the necessity of posting bond or other
undertaking, each party or its applicable Affiliates (or their respective
successors or assigns) shall be entitled to proceed against the other party or
the other party's applicable Affiliates in law and/or in equity for such damages
or other relief as a court may deem appropriate and shall be entitled to seek a
temporary restraining order and/or preliminary and final injunctive or other
equitable relief, including specific performance, to prevent breaches of this
Section 3.08 and, in addition to any other remedy to which they are entitled at
law or in equity, to enforce specifically the terms and provisions of this
Section 3.08. In the event that any Action is brought in equity to enforce the
provisions of this Section 3.08, no party hereto shall allege, and each party
hereto hereby waives the defense or counterclaim, that there is an adequate
remedy at law.
(h) Should any of TRH or the Company Subsidiaries, following the First
Time of Delivery, become aware that TRH or any of the Company Subsidiaries owns
any rights in or to any AIG Names and Marks (other than domain names which are
addressed in the second sentence of this Section 3.08(h)), including in any
combined trademark incorporating any such AIG Names and Marks and/or in any
registrations or applications for registrations of any of the foregoing in any
jurisdiction, TRH and the Company Subsidiaries shall (i) promptly notify AIG of
the existence of such rights; (ii) immediately cease any and all use thereof if
TRH and the Company Subsidiaries have not already ceased such use in accordance
with their obligations
15
under Section 3.08(b), and (iii) at TRH's expense, at the request of AIG either
(x) as soon as practicable after the First Time of Delivery (but in no event
more than thirty (30) days thereafter) abandon all rights in and to such AIG
Names and Marks, including abandoning any such combined trademarks incorporating
any such AIG Names and Marks and/ or abandoning registrations and applications
for registrations of any of the foregoing, and submit to the applicable
Governmental Authorities all necessary filings to abandon all its and their
rights, registrations and applications for registrations for any and all such
AIG Names and Marks or (y) assign and transfer to AIG or any Affiliate of AIG
all right, title and interest in and to such AIG Names and Marks, including in
any combined trademark incorporating any such AIG Names and Marks and in any
registrations or applications for registrations of any of the foregoing. Should
TRH and the Company Subsidiaries, following the First Time of Delivery, become
aware of any domain name registration by TRH and the Company Subsidiaries that
includes or incorporates any of the AIG Names and Marks, TRH shall promptly
notify AIG of the existence of such domain name registration and, upon AIG's
request, shall, or shall cause the Company Subsidiaries to, assign and transfer
all right, title and interest in or to such domain name registration to AIG or
any Affiliate of AIG. In each case set forth above in this Section 3.08(h),
prior to any such assignment and transfer and during the one-month period after
the applicable assignment and transfer, TRH shall or shall cause the Company
Subsidiaries to pay any and all renewal, maintenance and other fees due with
regard to all such Intellectual Property set forth in this Section 3.08(h).
(i) Should any of AIG or its Affiliates, following the First Time of
Delivery, become aware that AIG or any of its Affiliates owns any rights in or
to any TRH Names and Marks (other than domain names which are addressed in the
second sentence of this Section 3.08(i)), including in any combined trademark
incorporating any such TRH Names and Marks and/or in any registrations or
applications for registrations of any of the foregoing in any jurisdiction, AIG
and its Affiliates shall (i) promptly notify TRH of the existence of such
rights; (ii) immediately cease any and all use thereof if AIG and its Affiliates
have not already ceased such use in accordance with their obligations under
Section 3.08(b), and (iii) at AIG's expense, at the request of TRH either (x) as
soon as practicable after the First Time of Delivery (but in no event more than
thirty (30) days thereafter) abandon all rights in and to such TRH Names and
Marks, including abandoning any such combined trademarks incorporating any such
TRH Names and Marks and/or abandoning registrations and applications for
registrations of any of the foregoing, and submit to the applicable Governmental
Authorities all necessary filings to abandon all its and their rights,
registrations and applications for registrations for any and all such TRH Names
and Marks or (y) assign and transfer to TRH or a Company Subsidiary all right,
title and interest in and to such TRH Names and Marks, including in any combined
trademark incorporating any such TRH Names and Marks and in any registrations or
applications for registrations of any of the foregoing. Should AIG and any of
its Affiliates following the First Time of Delivery, become aware of any domain
name registration by AIG and any of its Affiliates that includes or incorporates
any of the TRH Names and Marks, AIG shall promptly notify TRH of the existence
of such domain name registration and, upon TRH's request, shall, or shall cause
the applicable Affiliate of AIG to, assign and transfer all right, title and
interest in or to such domain name registration to TRH or a Company Subsidiary.
In each case set forth above in this Section 3.08(i), prior to any such
assignment and transfer and during the one-month period after the applicable
assignment and transfer, AIG shall or shall cause its
16
Affiliates to pay any and all renewal, maintenance and other fees due with
regard to all such Intellectual Property set forth in this Section 3.08(i).
(j) Notwithstanding the foregoing, nothing contained in Section 3.08
herein shall require (i) the destruction, deletion, or modification of any
backup tapes or other media made pursuant to automated archival processes in the
ordinary course of business, provided that such backup tapes or other archived
media shall only be accessible by information technology personnel and shall not
be accessed or used for any purpose by either AIG and its Affiliates or TRH and
the Company Subsidiaries, other than as permitted hereunder or (ii) the return
or destruction of any Confidential Information retained in order to comply with
TRH's or AIG's internal document retention policies, provided that such
Confidential Information is (x) maintained as confidential pursuant to the
obligations that had originally attached thereto, or at least as protective of
the information as set forth in Section 3.17, and (y) returned to the other
party or destroyed as soon as such Confidential Information is no longer
required to be retained pursuant to such policy.
Section 3.09. Insurance.
(a) From and after the First Time of Delivery, TRH and the Company
Subsidiaries shall cease to be insured by AIG's or its Affiliates' blanket
insurance policies or by any of their self-insured programs in place to the
extent such insurance policies or programs cover TRH or any of the Company
Subsidiaries. TRH and the Company Subsidiaries agree to satisfy the deductible
or retention for any claim that they report under AIG's or its Affiliates'
blanket insurance policies to the extent such claim is attributed to TRH or any
of the Company Subsidiaries. On or prior to the Closing, TRH agrees to pay the
amounts set forth in Schedule 3.09 to AIG or the relevant Affiliates of AIG as
directed by AIG. For the avoidance of doubt, the provisions of this Section
3.09(a) shall not apply to any Insurance Agreement.
(b) With respect to events or circumstances relating to TRH or any of
the Company Subsidiaries that occurred or existed prior to the First Time of
Delivery that are covered by occurrence-based third-party liability insurance
policies of AIG or its Affiliates and any workers' compensation insurance
policies or comparable workers' compensation self-insurance programs sponsored
by AIG or its Affiliates and that apply to the locations at which TRH and the
Company Subsidiaries operate their respective businesses, TRH and the Company
Subsidiaries may make claims under such policies; provided, however, that, by
making any such claims, TRH agrees to reimburse AIG for any increased costs
incurred by AIG and its Affiliates as a result of such claims, including any
retroactive premium adjustments associated with such coverage, as such amounts
are determined in accordance with those policies generally applicable from time
to time to AIG and its Affiliates; and provided further that neither TRH nor any
of the Company Subsidiaries shall make any such claims if, and to the extent
that, such claims are covered by insurance policies sponsored by TRH or any of
the Company Subsidiaries. For the avoidance of doubt, the provisions of this
Section 3.09(b) shall not apply to any Insurance Agreement.
17
Section 3.10. D&O Insurance and Liabilities.
(a) From and after the First Time of Delivery, TRH agrees that any
individual who served as a director or officer of TRH or any Company Subsidiary
at any time prior to the First Time of Delivery, and was prior or at such time,
an executive officer or director of AIG and its Affiliates (each such
individual, an "AIG Designee") shall be entitled to benefits under any director
and officer insurance policy maintained by TRH or any Company Subsidiary to the
same extent as any similarly situated directors and officers of TRH who are not
AIG Designees.
(b) From and after the First Time of Delivery, TRH agrees that it
shall not, and shall cause the Company Subsidiaries not to, take any steps that
would reasonably be expected to affect adversely the rights of any AIG Designee
(each, a "D&O Indemnified Person") to be indemnified either under Delaware or
other applicable Law or the Organizational Documents of TRH and the Company
Subsidiaries as they existed prior to the First Time of Delivery, against any
costs or expenses (including attorneys' fees and expenses of investigation,
defense and ongoing monitoring), judgments, penalties, fines, losses, charges,
demands, Actions, suits, proceedings, settlements, assessments, deficiencies,
Taxes, interest, obligations, damages, liabilities or amounts paid in settlement
incurred in connection with any claim, whether civil, criminal, administrative
or investigative, arising out of or pertaining to matters existing or occurring
at or prior to the First Time of Delivery and relating to the fact that the D&O
Indemnified Person was a director or officer of TRH or any of the Company
Subsidiaries, whether asserted or claimed prior to, at or after the First Time
of Delivery.
Section 3.11. Employee Matters.
(a) As of 11:59 p.m. on December 31, 2009 (the "Benefits Transition
Date"), AIG shall terminate the participation of TRH and the Company
Subsidiaries in each Benefit Plan that is not a Company Benefit Plan, and in no
event shall any Employee be entitled to accrue any benefits under such Benefit
Plans with respect to services rendered or compensation paid on or after the
Benefits Transition Date. The parties hereto agree that TRH and the Company
Subsidiaries shall retain all rights and obligations under each Company Benefit
Plan.
(b) (i) On the Benefits Transition Date, AIG shall transfer, or cause
to be transferred, from AIG's U.S. tax-qualified defined benefit retirement
plan in which the Employees employed in the United States participate
("AIG's Pension Plan") in a trust-to-trust transfer $8,000,000 to a
tax-qualified defined benefit pension plan to be adopted on or prior to the
Benefits Transition Date or currently maintained by TRH or any of its
Affiliates ("TRH's Pension Plan") for the benefit of the Employees who are
participants in AIG's Pension Plan (the "Pension Plan Participants").
(ii) AIG shall transfer, or cause to be transferred, all assets and
liabilities with respect to the Employees from AIG's Pension Plan to TRH's
Pension Plan for the Pension Plan Participants as of the Benefits
Transition Date in accordance with this Section 3.11. The amount of assets
to be transferred to TRH's Pension Plan for the benefit of such Employees
shall be the amount that AIG's Pension Plan Actuary (as defined below)
certifies meets the requirements of Section 414(l) of the Code, determined
using the applicable actuarial assumptions as of the Benefits Transition
Date in
18
accordance with Section 414(l) of the Code and the regulations thereunder
using the Pension Benefit Guaranty Corporation termination safe harbor
assumptions, minus $8,000,000 (such amount, the "Pension Plan Transfer
Amount"). All plan assets transferred from AIG's Pension Plan trustee to
TRH's Pension Plan trustee pursuant to the provisions of this Section 3.11
shall be made in immediately available funds.
(iii) As soon as practicable after the Benefits Transition Date, AIG
shall engage, or caused to be engaged, an actuary ("AIG's Pension Plan
Actuary") to determine (A) the Pension Plan Transfer Amount and (B) provide
written notice of the amount of the Pension Plan Transfer Amount (the
"Pension Calculation Notice") to TRH or its Affiliate. The parties hereto
agree and acknowledge that the Pension Calculation Notice shall be provided
to TRH no later than eight (8) months following the Benefits Transition
Date. After TRH or its Affiliate has received the Pension Calculation
Notice, TRH or its Affiliate may appoint an actuary ("TRH's Pension Plan
Actuary"), at TRH or its Affiliate's cost, to review the determination of
the Pension Plan Transfer Amount set forth in the Pension Calculation
Notice. In the event that TRH's Pension Plan Actuary disagrees with the
calculation of the Pension Plan Transfer Amount set forth in the Pension
Calculation Notice, TRH shall provide written notice of such disagreement
not later than sixty (60) days after the date on which TRH or its Affiliate
received the Pension Calculation Notice, setting forth the reasons for its
disagreement. If TRH does not deliver any notice of disagreement within
such sixty (60) day period, the Pension Plan Transfer Amount set forth in
the Pension Calculation Notice shall be deemed final and binding on the
parties hereto. If TRH delivers a notice of disagreement within such sixty
(60) day period, the parties hereto shall have thirty (30) days to reach
agreement on the Pension Plan Transfer Amount. If the parties hereto do not
reach agreement on the items in dispute within thirty (30) days of AIG
receiving the notice of disagreement, either party hereto may refer the
dispute to an independent actuary (the "Independent Actuary") to be agreed
upon by the parties hereto or, failing such agreement, appointed by the
Executive Director of the American Academy of Actuaries, at the request of
the party hereto first applying. The costs of the Independent Actuary shall
be borne equally by AIG and TRH. The determination of the Independent
Actuary shall be final and binding on AIG and TRH. In reaching such
resolution, the Independent Actuary shall consider only the issues of
disagreement between AIG's Pension Plan Actuary and TRH's Pension Plan
Actuary, it being understood that the Independent Actuary shall not be
retained to conduct its own independent review, but rather shall be
retained to resolve specific differences between AIG's Pension Plan Actuary
and TRH's Pension Plan Actuary within the range of such differences;
provided that the final Pension Plan Transfer Amount determined by the
Independent Actuary shall not be more than the amount determined by TRH's
Pension Plan Actuary nor less than the amount determined by AIG's Pension
Plan Actuary.
(iv) Within fifteen (15) days after the later to occur of (A) the date
on which the Pension Plan Transfer Amount is finally determined and (B) the
expiration of the thirty (30) day waiting period prescribed by Section
6058(b) of the Code (which TRH and AIG shall take all action to commence
promptly), AIG shall direct the trustee of AIG's Pension Plan to deliver
the Pension Plan Transfer Amount (as finally determined
19
pursuant to this Section 3.11(b)) to the trustee of the trust maintained
under TRH's Pension Plan.
(v) From the Benefits Transition Date until the actual date of
delivery of the Pension Plan Transfer Amount (the "Pension Plan Transfer
Date"), the trustee of AIG's Pension Plan shall hold the Pension Plan
Transfer Amount under AIG's Pension Plan and the Pension Plan Transfer
Amount shall be credited with interest at an annual rate that is equivalent
to the rate of return on one year U.S. Treasury Bills for the weekly period
that includes the Benefits Transition Date.
(vi) As of the Benefits Transition Date, TRH's Pension Plan shall
assume all liabilities and will be responsible for making all payments with
respect to the Employees under AIG's Pension Plan, and none of AIG, its
Affiliates or AIG's Pension Plan shall retain any such liabilities. AIG and
TRH shall, in connection with such transfer, cooperate in making all
appropriate filings required under the Code or ERISA, and the regulations
thereunder and shall comply with applicable requirements of the Code, ERISA
and regulations thereunder. TRH will provide to AIG all electronic feeds
and payroll information for the Pension Plan Participants from the First
Time of Delivery to the Benefits Transition Date.
(vii) AIG will make its best efforts to allow the Employees specified
in Schedule 3.11(b)(vii) to participate in AIG's Pension Plan until the
Benefits Transition Date.
(viii) The liability for benefits accrued by the Employee specified in
Schedule 3.11(b)(viii) under the AIO Pension Plan as of May 13, 2009 has
been transferred to, and will ultimately be paid by, TRH or the Company
Subsidiaries and any future benefit accruals will occur under a benefit
plan sponsored by TRH or the Company Subsidiaries.
(c) (i) AIG shall use all reasonable endeavors prior to the Closing to
procure that TRH or any Company Subsidiary which immediately prior to the
First Time of Delivery participates in any of AIG's registered pension
schemes (within the meaning of the UK Finance Act 2004) (each, a "TRH
Employer" and "AIG's UK Pension Plan" respectively) is able to continue
participating in AIG's UK Pension Plans until no later than the Benefit
Transition Date. At its option exercisable by giving one month's notice
required under AIG's UK Pension Plan at any time after the First Time of
Delivery but prior to the Benefits Transfer Date, TRH or any Company
Subsidiary may withdraw as a participating employer from AIG's UK Pension
Plan and with the agreement of AIG's UK Pension Plan trustees, annuitize
the accrued liability under AIG's UK Pension Plan of any Employee or
beneficiary who is a surviving spouse, partner or dependant of an Employee
(a "UK Pension Plan Member") as of such withdrawal date or offer enhanced
transfer values to any Member of AIG's UK Pension Plan provided that any of
the foregoing actions are accomplished in a manner consistent with and
subject to this Section 3.11(c). Prior to TRH or the Company Subsidiary
withdrawing as a participating employer as above, it shall comply with the
consultation requirements (if applicable)
20
under the UK Occupational and Personal Pension Schemes (Consultation by
Employers and Miscellaneous Amendment) Regulations 2006.
(ii) The participation of the TRH Employer in AIG's UK Pension Plan
after the First Time of Delivery and (where applicable) the offer and the
payment of enhanced transfer values referred to below are conditional upon
TRH (or such other company as is acceptable to the trustees of AIG's UK
Pension Plan) indemnifying the trustees of AIG's UK Pension Plan (and their
successors) from and against any and all liability (other than for benefits
payable under AIG's UK Pension Plan) arising from or in connection with
such participation after the First Time of Delivery or (where applicable)
the offer and payment of such enhanced transfer values (such indemnity to
be in terms approved by the trustees of AIG's UK Pension Plan, such
approval not to be unreasonably withheld or delayed).
(iii) TRH shall procure that throughout and in respect of the period
during which the TRH Employer participates in AIG's UK Pension Plan after
the First Time of Delivery:
(a) the TRH Employer shall pay contributions, expenses and
charges on the same terms and bases as apply immediately prior to the
First Time of Delivery and shall comply with the provisions of AIG's
UK Pension Plan and the obligations on the TRH Employer in relation to
AIG's UK Pension Plan imposed by law;
(b) the TRH Employer shall not exercise any power, right or
discretion conferred on it by AIG's UK Pension Plan, or in relation to
that Plan by or under any legislation, except (in either case) on such
terms (whether as to payment of additional contributions or otherwise)
as AIG or its Affiliate may agree, such agreement not to be
unreasonably withheld or delayed;
(c) the TRH Employer shall not increase the remuneration or any
part thereof which counts for any defined benefits under AIG's UK
Pension Plan or do or omit to do anything which results or would
result in an increase in the defined benefit liabilities under AIG's
UK Pension Plan to or in respect of any UK Pension Plan Member except
with the prior written approval of AIG or its Affiliate and on such
terms as AIG or its Affiliate may specify as to the payment of
additional contributions to AIG's UK Pension Plan or otherwise;
(d) the TRH Employer shall exercise each right or discretion
conferred on it by or under the UK ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and the UK
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and regulations already made under them or to be
made under them in the future as reasonably directed from time to time
in writing by AIG or its Affiliate;
(iv) If the TRH Employer does anything, or omits to do anything, after
the First Time of Delivery which results in an increase in the defined
benefit liabilities of AIG's UK Pension Plan beyond the standard benefit
accruals contemplated by this Section 3.11(c) (assuming that after the
First Time of Delivery pensionable earnings are
21
not increased and the TRH Employer does not exercise any power or
discretion under AIG's UK Pension Plan) to or in respect of all or any of
the UK Pension Plan Members, TRH shall procure that an amount is paid by
the TRH Employer to AIG's UK Pension Plan which is, in the opinion of the
actuary to AIG's UK Pension Plan, equal to the capital value of the
additional liability (the "Special Contribution") within fourteen days of
TRH or the TRH Employer being notified in writing of that amount together
with interest on the amount at 4% above the base rate from time to time of
the principal banker in the UK of the trustees of AIG's UK Pension Plan in
respect of the period from the date of notification to the actual payment
of the Special Contribution (such capital value shall be determined by the
actuary to AIG's UK Pension Plan applying the same actuarial method and
assumptions (with any necessary changes) as are used at the time the
additional liability is created to determine cash equivalent transfer
values under AIG's UK Pension Plan pursuant to the UK ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ (as amended or replaced from time to time) ignoring any adjustment for
any underfunding under that Plan).
(v) TRH shall pay, or cause to be paid, any amount which becomes
payable under section 75 or 75A of the UK Pensions ▇▇▇ ▇▇▇▇ on the TRH
Employer ceasing to employ active members of AIG's UK Pension Plan. TRH and
AIG shall co-operate and take such steps as are reasonable to avoid or
minimise the amount payable (including but without limitation notifying the
trustees of AIG's UK Pension Plan that a relevant transfer deduction shall
apply in accordance with the UK Occupational Pension Schemes (Employer
Debt) Regulations 2005 (as amended or replaced from time to time)).
(vi) TRH shall indemnify and hold harmless (on a continuing basis) AIG
and its Affiliates from and against any and all liability under any
contribution notice, order or direction made by the UK Pensions Regulator
in connection with the UK Pension Plan Members and from and against any and
all liability arising under or in connection with any offer and payment of
enhanced transfer values referred to below.
(vii) At the request of TRH or the Company Subsidiary, AIG or its
Affiliate shall co-operate and shall use all reasonable endeavors to
procure that the trustees of AIG's UK Pension Plan which provides pensions
on a defined benefit basis co-operate in the making of enhanced transfer
value offers to such of the UK Pension Plan Members as TRH or the Company
Subsidiary nominates in writing in lieu of the benefits otherwise payable
under AIG's UK Pension Plan to or in respect of them. TRH shall put, or
cause to be put, the trustees of AIG's UK Pension Plan in funds to pay the
enhancement to any such transfer value (such enhancement being the excess
of the amount of the enhanced transfer value over the amount of the cash
equivalent transfer value which would otherwise have been payable under the
UK ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇ (as amended or replaced from time to time)).
TRH shall also pay, or cause to be paid, the reasonable expenses incurred
in connection with the offer and, if applicable, the payment of such
enhanced transfer values (whether such expenses are incurred by AIG or any
of its Affiliate or the trustees of AIG's UK Pension Plan).
(d) The parties hereto acknowledge and agree that, promptly following
the Benefits Transition Date, AIG shall engage AIG's Pension Plan Actuary to
determine TRH's
22
proportionate share of unreimbursed contributions made by AIG to AIG's Pension
Plan for purposes of TRH reimbursing AIG for such amount (such amount, the "TRH
Pension Reimbursement Amount"). For purposes of clarity, the parties acknowledge
that from December, 2007 through March 2009, AIG has made contributions, in
three tranches aggregating $750 million (the "Contributions"), to AIG's Pension
Plan, for which TRH has not reimbursed AIG with respect to Employees. The TRH
Pension Reimbursement Amount shall be the TRH Proportionate Share (as defined
below) of (i) $750 million, plus (ii) any contributions made by AIG to AIG's
Pension Plan between the date of this Agreement and the Benefits Transition
Date; provided, that to the extent that the fair value of assets in AIG's
Pension Plan as at the Benefits Transition Date exceeds the total liabilities of
AIG's Pension Plan as calculated in accordance with the requirements of Section
414(l) of the Code as determined pursuant to the methodology set out in Section
3.11(b), then the TRH Pension Reimbursement Amount shall be reduced by the TRH
Proportionate Share (as defined below) of such excess, if any. The "TRH
Proportionate Share" shall be the ratio of (x) the December 31, 2008 accumulated
benefit obligation under AIG's Pension Plan for the Employees, to (y) the
December 31, 2008 accumulated benefit obligation under AIG's Pension Plan for
all participants in AIG's Pension Plan. Such accumulated benefit obligation
shall be calculated by AIG's Pension Plan Actuary using assumptions consistent
with the FAS 158 disclosures with respect to AIG's Pension Plan included in
AIG's Form 10-K filed for the year ended December 31, 2008. After TRH has
received the TRH Pension Reimbursement Amount calculation, TRH may appoint TRH's
Pension Plan Actuary, at TRH or the Company Subsidiaries' cost, to review the
determination described herein. In the event that TRH's Pension Plan Actuary
disagrees with the calculation of the TRH Pension Reimbursement Amount, TRH
shall provide written notice of such disagreement not later than thirty (30)
days after the date on which TRH or its Affiliate received the TRH Pension
Reimbursement Amount calculation setting forth the reasons for its disagreement.
If TRH does not deliver any notice of disagreement within such thirty (30) day
period, the TRH Pension Reimbursement Amount shall be deemed final and binding
on the parties hereto. In the event of a disagreement that cannot be settled
between AIG and TRH, the procedures established in Section 3.11(b)(ii) in
respect of the Independent Actuary shall apply to the TRH Pension Reimbursement
Amount. Prior to the Closing, TRH shall pay to AIG $3 million in immediately
available funds as a deposit against the TRH Pension Reimbursement Amount, and
within 10 days of the final determination of the TRH Pension Reimbursement
Amount, TRH shall pay the balance of the TRH Pension Reimbursement Amount, plus
interest from the dates on which AIG made each of the Contributions at an annual
rate that is equivalent to the rate of return on one year U.S. Treasury Bills
for the weekly period that includes the Benefits Transition Date, to AIG in
immediately available funds.
(e) Effective as of the First Time of Delivery, TRH and the Company
Subsidiaries shall terminate participation in the Commerce & Industry Insurance
Company of Canada Pension Plan and Commerce & Industry Insurance Company of
Canada Savings Plan (as defined below) and in no event shall any Employee be
entitled to accrue any benefits under such plans with respect to services
rendered or compensation paid on or after the First Time of Delivery. As soon as
practicable following the First Time of Delivery and subject to applicable law,
AIG or one of its Affiliates shall transfer, or cause to be transferred, all
liabilities and assets which have accrued for the benefit of Employees of TRH
and the Company Subsidiaries as of the transfer date under the Commerce &
Industry Insurance Company of
23
Canada Pension Plan and, subject to the election of each Employee, the Commerce
& Industry Insurance Company of Canada Savings Plan, (other than any assets and
liabilities not permitted to be transferred) to a corresponding registered
pension plan and corresponding savings plan, respectively, established effective
as of the First Time of Delivery by TRH or a Company Subsidiary, and TRH and the
Company Subsidiaries shall assume the liability and obligation for, and neither
AIG nor any of its Affiliates shall retain any liability or obligation for, all
such transferred plan liabilities and assets. AIG and its Affiliates agree to
timely and diligently execute their obligations under applicable law to cause
the (i) cessation of participation of Employees of TRH and Company Subsidiaries
in the Commerce & Industry Insurance Company of Canada Pension Plan and Commerce
& Industry Insurance Company of Canada Savings Plan and (ii) transfer of assets
and liabilities related to Employees of TRH and Company Subsidiaries from the
Commerce & Industry Insurance Company of Canada Pension Plan and Commerce &
Industry Insurance Company of Canada Savings Plan to the plans established by
TRH and the Company Subsidiaries pursuant to this Section 3.11(e). The "Commerce
& Industry Insurance Company of Canada Savings Plan" means the deferred profit
sharing plan, group registered retirement savings plan, and employee savings
plan sponsored by AIG Commercial Insurance Company of Canada.
(f) Effective as of the Benefits Transition Date, TRH and the Company
Subsidiaries shall assume the liability and obligation for, and neither AIG nor
any of its Affiliates shall retain any liability or obligation for, all
obligations (whether or not vested) which have accrued under the nonqualified
deferred compensation, supplemental retirement or excess benefit and long-term
incentive plans set forth on Schedule 3.11(f) (collectively, "AIG's Nonqualified
Plans") with respect to any Employee who is either in pay status or is or
becomes entitled to future payments pursuant to any of such plans. Such accrued
amounts shall be paid under one or more nonqualified deferred compensation plans
maintained or adopted by TRH or any of the Company Subsidiaries, which shall
preserve and maintain, in accordance with Section 409A of the Code, all terms
governing the time and form of payment of amounts accrued under AIG's
Nonqualified Plans. TRH will promptly reimburse AIG for the costs associated
with the Employee's continued participation in AIG's Nonqualified Plans through
the Benefits Transition Date to the extent not previously reimbursed.
(g) Effective as of the Benefits Transition Date, TRH and the Company
Subsidiaries shall assume the liability and obligation for, and neither AIG nor
any of its Affiliates shall retain any liability or obligation for, any retiree
health or medical plan, program, arrangement or benefit maintained or provided
by AIG or any of its Affiliates with respect to the Employees. For a period of
12 months commencing on the day following the Benefits Transition Date, with
respect to the assumed retiree health or medical plans and coverage for
Employees, such coverage shall be maintained or adopted by TRH or any of the
Company Subsidiaries under substantially similar arrangements to the applicable
plans or arrangements of AIG or any of its Affiliates in accordance with Section
409A of the Code. TRH will promptly reimburse AIG for the costs associated with
the Employee's continued participation in such retiree health and medical plans
through the Benefits Transition Date to the extent not previously reimbursed.
(h) TRH will assume AIG's obligations under the AIG Assurance
Agreement with Starr International Co. with respect to shares that have been
contingently set aside at the First Time of Delivery with respect to Employees.
24
(i) As of the First Time of Delivery, TRH will assume AIG's
obligations under the AIG 2005-2006 Deferred Compensation Profit Participation
Plan with respect to Employees.
(j) TRH shall be responsible for providing the continuation of group
health coverage required by Section 4980B(f) of the Code to any Employee (for
purpose of clarity, including any former employee of TRH or any of the Company
Subsidiaries) (and in each case their qualified beneficiaries) whose "qualifying
event" within the meaning of Section 4980B(f) of the Code occurs before, on or
after the Benefits Transition Date.
(k) Prior to making any written or oral communications to the
directors, officers or employees of TRH pertaining to compensation or benefit
matters that are affected by the transactions contemplated by this Agreement,
TRH shall provide AIG with a copy of the intended communication. AIG shall have
a reasonable period of time to review and comment on the communication, and TRH
and AIG shall cooperate in providing a mutually agreeable communication.
Section 3.12. Access.
(a) In addition to the provisions of Section 3.13, from the First Time
of Delivery and until the Access Termination Date, in connection with any
reasonable business purpose, including (x) in response to the request or at the
direction of a Governmental Authority or a Self-Regulatory Organization, (y) the
preparation of tax returns or other documents relating to tax matters and (z)
the determination of any matter relating to the rights or obligations of AIG or
its Affiliates under this Agreement and any other Transaction Agreement, subject
to any applicable Law and any applicable privileges (including the
attorney-client privilege) and contractual confidentiality obligations, upon
reasonable prior notice, TRH shall, and shall cause the Company Subsidiaries and
their respective Representatives to, (i) afford AIG and its Affiliates and their
respective Representatives reasonable access, during normal business hours, to
the offices, properties, books, data, files, information and records of TRH and
the Company Subsidiaries and the businesses conducted by them (including, for
the avoidance of doubt, tax returns and other information and documents relating
to tax matters), (ii) furnish to AIG and its Affiliates and their respective
Representatives such additional financial data and other information regarding
TRH and the Company Subsidiaries and the businesses conducted by them as AIG,
its Affiliates or their respective Representatives may from time to time
reasonably request (including, for the avoidance of doubt, tax returns and other
information and documents relating to tax matters) and (iii) make available to
AIG and its Affiliates and their respective Representatives any employees of
TRH, the Company Subsidiaries and the businesses conducted by them whose
assistance, expertise, testimony, notes and recollections or presence is
necessary to assist AIG, its Affiliates or their respective Representatives in
connection with AIG's or its Affiliates' or such Representatives' inquiries for
any of the purposes referred to in this Section 3.12 above, including the
presence of such persons as witnesses in hearings or trials for such purposes;
provided, however, that such investigation shall not unreasonably interfere with
the business or operations of TRH or any of the Company Subsidiaries; and
provided further that the auditors and independent accountants of TRH or any of
the Company Subsidiaries shall not be obligated to make any work papers
(including the work papers contemplated to be delivered by TRH or any Company
Subsidiary to AIG or any of its Affiliates pursuant to Section 3.15(b))
25
available to any Person unless and until such Person has signed a customary
confidentiality and hold harmless agreement relating to such access to work
papers in form and substance reasonably acceptable to such auditors or
independent accountants; and provided further that TRH or any Company Subsidiary
shall not be obligated to make any insurance, reinsurance or retrocession
Contracts between a third party, on the one hand, and TRH or any Company
Subsidiary, on the other hand, to which AIG or any of its Affiliates is not a
party, available to AIG or any of its Affiliates. AIG shall reimburse TRH
promptly for any reasonable out-of-pocket expenses incurred by TRH and the
Company Subsidiaries in complying with any request by or on behalf of AIG or its
Affiliates or their respective Representatives in connection with this Section
3.12.
(b) From the First Time of Delivery and until the Access Termination
Date in connection with any reasonable business purpose, including (x) in
response to the request or at the direction of a Governmental Authority or a
Self-Regulatory Organization, (y) the preparation of tax returns or other
documents relating to tax matters and (z) the determination of any matter
relating to the rights or obligations of TRH and any of the Company Subsidiaries
under this Agreement and any other Transaction Agreement, subject to any
applicable Law and any applicable privileges (including the attorney-client
privilege) and contractual confidentiality obligations, upon reasonable prior
notice, AIG shall, and shall cause its Affiliates and Representatives to, (i)
afford TRH and the Company Subsidiaries and their respective Representatives
reasonable access, during normal business hours, to the offices, properties,
books, data, files, information and records of AIG and its Affiliates and the
businesses conducted by them (including, for the avoidance of doubt, tax returns
and other information and documents relating to tax matters), (ii) furnish to
TRH, the Company Subsidiaries and their respective Representatives such
additional financial data and other information regarding TRH and the Company
Subsidiaries and the businesses conducted by them as TRH or the Company
Subsidiaries may from time to time reasonably request (including, for the
avoidance of doubt, tax returns and other information and documents relating to
tax matters) and (iii) make available to TRH and the Company Subsidiaries and
their respective Representatives any employees of AIG and its Affiliates in
respect of TRH and the Company Subsidiaries and the businesses conducted by them
whose assistance, expertise, testimony, notes and recollections or presence is
necessary to assist TRH's and the Company Subsidiaries' or their respective
Representatives in connection with AIG's or its Affiliates' or such
Representatives' inquiries for any of the purposes referred to in this Section
3.12 above, including the presence of such persons as witnesses in hearings or
trials for such purposes; provided, however, that such investigation shall not
unreasonably interfere with the business or operations of AIG or any of its
Affiliates; and provided further that the auditors and independent accountants
of AIG or its Affiliates shall not be obligated to make any work papers
available to any Person unless and until such Person has signed a customary
confidentiality and hold harmless agreement relating to such access to work
papers in form and substance reasonably acceptable to such auditors or
independent accountants; and provided further that AIG or any of its Affiliates
shall not be obligated to make any insurance, reinsurance or retrocession
Contracts between a third party, on the one hand, and AIG or any of its
Affiliates, on the other hand, to which TRH or any Company Subsidiary is not a
party, available to TRH or any Company Subsidiary. TRH shall reimburse AIG
promptly for any reasonable out-of-pocket expenses incurred by AIG and its
Affiliates in complying with any request by or on behalf of TRH or any Company
Subsidiary or their respective Representatives in connection with this Section
3.12(b).
26
(c) For the avoidance of doubt, neither AIG nor TRH shall be required
from and after the First Time of Delivery to disclose, or cause its Affiliates
or its or its Affiliates' respective Representatives from and after the First
Time of Delivery to disclose, to the other party or any of its Affiliates or any
of their respective Representatives (or provide access to any of its or any of
its Affiliates' offices, properties, books or records that could result in the
disclosure to such Persons or others of) any information that is subject to an
obligation contained in an Insurance Agreement prohibiting the disclosure of
such information, nor shall either party be required to permit, cause its
Affiliates or its or its Affiliates' respective Representatives to permit, or
cause others to permit either AIG or TRH or any of their respective Affiliates,
or any of their respective Representatives to have access to or to copy or
remove from the offices or properties of either AIG or TRH or any of their
respective Affiliates any documents or other materials that might reveal any
such information that is subject to an obligation contained in an Insurance
Agreement prohibiting its disclosure.
Section 3.13. Books and Records.
(a) Subject to Section 3.17, from and after the First Time of
Delivery, AIG and its Affiliates, and TRH and the Company Subsidiaries, shall
have the right to retain copies of all books, data, files, information and
records (including, for the avoidance of doubt, tax returns and other
information and documents relating to tax matters) in any media of each of TRH
and the Company Subsidiaries, and AIG and its Affiliates, as the case may be,
and the respective businesses of TRH and the Company Subsidiaries, and AIG and
its Affiliates, relating to periods ending on or prior to the First Time of
Delivery (i) relating to information (including employment and medical records)
regarding the Employees, (ii) as required by any legal or regulatory authority,
including any applicable Law or regulatory request or (iii) as may be necessary
for AIG and its Affiliates, or TRH and the Company Subsidiaries, to perform
their obligations pursuant to the Transaction Agreements, subject to compliance
with all applicable privacy laws. With respect to all original books, data,
files, information and records of each of TRH and the Company Subsidiaries, and
AIG and its Affiliates, existing as of the First Time of Delivery, TRH, shall,
and shall cause each of the Company Subsidiaries, and AIG shall, and shall cause
its Affiliates to, (A) comply in all material respects with all applicable Laws,
including the Code, relating to the preservation and retention of records, (B)
apply preservation and retention policies that are no less stringent than those
generally applied by TRH or AIG, as the case may be, and (C) preserve and retain
all such original books, data, files, information and records for at least six
(6) years after the First Time of Delivery or until notice is received from AIG
or TRH, as applicable, of the expiration of the applicable statute of
limitations for tax purposes, whichever is later, and thereafter shall dispose
of such books, data, files, information and records only after it shall have
given AIG or TRH, as applicable, ninety (90) days' prior written notice of such
disposition and the opportunity (at AIG's or TRH's expense, as applicable) to
remove and retain such information.
(b) Notwithstanding anything to the contrary contained herein, to the
extent that AIG or any of its Affiliates has retained hard copies of files and
electronic files, tapes, software, electronic data, hardware, storage devices or
other electronic information that are not used in the operation of the business
of TRH or any of the Company Subsidiaries or required by TRH or the Company
Subsidiaries for regulatory purposes ("Archived Files") pursuant to a Litigation
Hold or otherwise, TRH acknowledges and agrees that the Archived Files are
solely
27
the property of AIG. AIG agrees that it will retain the Archived Files that
relate to TRH and the Company Subsidiaries for no less than three (3) months
after the First Time of Delivery after which AIG may recycle or discard such
Archived Files.
(c) At the First Time of Delivery, AIG and AHAC shall deliver to TRH
copies of all minutes books and other corporate records of the Company or any of
the Company Subsidiaries in AIG's, AHAC's or any of its Affiliates possession.
Section 3.14. TRH Compliance Matters. For any Reporting Period in
which AIG and TRH do not prepare their financial statements in accordance with
the same basis of accounting, TRH shall deliver to AIG, no later than ten (10)
business days prior to the date on which AIG is required to file its financials
statements with the SEC, a reconciliation from the basis of accounting used by
TRH to prepare its financial statements to the basis of accounting used by AIG
to prepare its financial statements. For any Reporting Period, TRH shall respond
as soon as reasonably practicable to reasonable requests from AIG for
supplemental information that AIG may need to prepare its financial statements.
Section 3.15. Auditors and Audits; Annual and Quarterly Statements and
Accounting. TRH agrees that:
(a) Annual and Quarterly Financial Statements. TRH shall provide to
AIG and to the accounting firm selected by AIG to audit AIG's consolidated
financial statements and to serve as AIG's independent certified public
accountants (the "AIG Auditors"), as directed by AIG, on a timely basis all
information, including AIG's Standard Internal reporting package for any
Consolidated Period, that AIG reasonably requires to meet its schedule for the
preparation, printing, filing, and public dissemination of each of AIG's annual
and quarterly financial statements that include a Reporting Period. Without
limiting the generality of the foregoing, TRH will provide all required
financial information with respect to TRH and the Company Subsidiaries to the
accounting firm selected by TRH to audit TRH's consolidated financial statements
and to serve as TRH's independent certified public accountants (the "TRH
Auditors") in a sufficient and reasonable time and in sufficient detail to
permit the TRH Auditors to take all steps and perform all reviews necessary, and
TRH shall provide sufficient assistance to the AIG Auditors, with respect to
information to be included or contained in each of AIG's annual and quarterly
financial statements that includes a Reporting Period. AIG shall reimburse TRH
for all reasonable fees and expenses paid by TRH to TRH Auditors in connection
with such TRH Auditors assisting AIG Auditors with respect to information
relating to TRH and the Company Subsidiaries to be included and contained in
each of AIG's annual and quarterly financial statements that includes a
Reporting Period. Other than as provided for in the preceding sentence, each
party shall be responsible for its own costs and expenses in connection with
this Section 3.15.
(b) Personnel Performing the Annual Audit and Quarterly Reviews. TRH
shall authorize the TRH Auditors to make available to the AIG Auditors both the
personnel who performed or are performing the annual audits and quarterly
reviews of TRH and work papers related to the annual audits and quarterly
reviews of TRH, in all cases within a reasonable time prior to the TRH Auditors'
opinion date, so that the AIG Auditors are able to perform the procedures they
consider necessary to take responsibility for the work of the TRH Auditors as it
28
relates to the AIG Auditors' report on AIG's financial statements, all within
sufficient time to enable AIG to meet its timetable for the filing and public
dissemination of each of AIG's annual and quarterly statements that includes a
Reporting Period.
(c) Changes to Financial Results and in Accounting Principles. TRH
shall give AIG as much prior notice as reasonably practical of any proposed
changes in its accounting estimates or accounting principles or any proposed
restatement or revision to TRH's financial statements, if any such change,
restatement or revision could affect AIG's reported financial results for any
Reporting Period. Without providing AIG with as much prior notice thereof as
reasonably practicable, TRH shall not, during any Reporting Period, (a) restate
or revise its financial results with respect to prior Reporting Periods, or (b)
make any change to any of its accounting principles, in each case if such
restatement, revision or change could affect, or could require AIG to restate,
revise or change, the financial results reported on AIG's prior financial
statements or to be reported on AIG's future financial statements. TRH shall
not, during any period that is not a Reporting Period, (i) restate or revise its
financial results with respect to any Reporting Period, or (ii) make any change
to any of its accounting principles, in each case if in the judgment of AIG such
restatement, revision or change would require AIG to restate, revise or change
the financial results for any Reporting Period reported on AIG's financial
statements: provided, however, that if in the opinion of the TRH Auditors, TRH's
failure to make any such restatement, revision or change would result in TRH's
financial statements failing to be in compliance, in a material respect, with
GAAP or the requirements of the SEC, TRH may make any such restatement, revision
or change after providing AIG with as much prior notice thereof as reasonably
practicable.
Section 3.16. Earnings Releases, Press Releases and Similar
Information. For any Reporting Period, AIG and TRH shall consult with each other
as to the timing of their annual and quarterly earnings releases for a current
or future period and shall give each other the opportunity to review the
information therein relating to TRH and the Company Subsidiaries and to comment
thereon. For any Reporting Period, AIG and TRH shall make reasonable efforts to
issue their respective annual and quarterly earnings releases at approximately
the same time on the same date, unless and to the extent otherwise required by
Law. For any Reporting Period, no later than eight (8) hours prior to the time
and date that AIG or TRH intends to publish its regular annual or quarterly
earnings release or any financial guidance for a current or future period, such
party shall deliver to the other party copies of substantially final drafts of
all press releases and other statements to be made available to the public
concerning any matters that could be reasonably likely to have a material
financial impact on the earnings, results of operations, financial condition or
prospects of TRH and the Company Subsidiaries taken as a whole. In addition,
prior to the issuance of any such press release or public statement that meets
the criteria set forth in the preceding two sentences, the issuing party shall
notify the other party of any changes (other than typographical or other similar
minor changes) to such substantially final drafts.
Section 3.17. Confidentiality.
(a) From and after the First Time of Delivery, each party shall not,
and shall cause their respective Affiliates and Representatives having access to
information of the other parties that is either oral or in writing and that is
confidential or proprietary (including any
29
information delivered by one party to another party pursuant to Section 3.13,
Section 3.14, Section 3.15(a), Section 3.15(b) and Section 3.16) ("Confidential
Information") not to, disclose to any other Person or use, except for purposes
of this Agreement or any other Transaction Agreement, any Confidential
Information of the other party; provided, however, that each party may disclose
Confidential Information of the other parties to the extent permitted by
applicable Law: (i) to its Representatives on a need-to-know basis in connection
with the performance of such party's obligations under this Agreement or any
other Transaction Agreement, provided that such Representatives are informed of
the confidential nature of such information and made aware of the provisions of
this Section 3.17; (ii) to the extent reasonably necessary in connection with
any Action or in any dispute with respect to this Agreement or any other
Transaction Agreement; (iii) to the extent such information is required to be
disclosed by applicable Law, Governmental Order or Governmental Authority
(including in any report, statement, testimony or other submission to a
Governmental Authority) or in response to any summons, subpoena or other legal
process or formal or informal investigative demand issued to the receiving party
in the course of any litigation, arbitration, mediation, investigation or
administrative proceeding; (iv) to the extent any such information is or becomes
generally available to the public other than (A) in the case of TRH, as a result
of disclosure by AIG, AHAC, or their respective Affiliates or any of their
respective Representatives or (B) in the case of AIG and AHAC, as a result of
disclosure by TRH or any Company Subsidiary (after the First Time of Delivery)
or any of their respective Affiliates or any of their respective
Representatives; or (v) with respect to any such information delivered pursuant
to Section 3.13, Section 3.14, Section 3.15(a), Section 3.15(b) and Section
3.16, to the extent such sections contemplate the disclosure of such information
by AIG, AHAC or TRH to their respective Representatives or to the public; and
provided further, however, that AIG, AHAC and TRH may disclose information about
the tax treatment and tax structure of the transactions contemplated by this
Agreement (including any facts or materials relating thereto or reasonably
necessary to understand such treatment or structure); and provided further,
however, to the extent that not all of the Shares are sold pursuant to the
Offering and AIG or AHAC retains an investment interest in TRH and the Company
Subsidiaries, (A) AIG and AHAC may disclose Confidential Information related to
TRH to AIG's and AHAC's Representatives who need to know such information for
the purpose of evaluating, monitoring or taking any other action with respect to
AIG's and/or AHAC's investment in TRH and the Company Subsidiaries, (B) AIG and
AHAC may use TRH's Confidential Information in connection with evaluating,
monitoring or taking any other action with respect to AIG's and/or AHAC's
investment in TRH and the Company Subsidiaries (it being understood that neither
AIG nor AHAC shall contravene applicable Laws with respect to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇)
and (C) AIG and AHAC may disclose Confidential Information delivered to them by
the officers designated by them, respectively, to receive the information
contemplated by Section 5.4 of the Stockholders Agreement to each other, their
respective Affiliates and their respective Representatives, provided, that in
the cases of clauses (A) and (C) above, such Representatives are informed of the
confidential nature of such information and made aware of the provisions of this
Section 3.17(a).
(b) In the event that a party becomes required (based on advice of
counsel) by deposition, interrogatory, request for documents subpoena, civil
investigative demand or similar judicial or administrative process or in
connection with a report, statement, testimony or other submission to be made to
any Governmental Authority to disclose any Confidential Information of the other
parties, such disclosing party shall provide the other parties, to the extent
reasonably
30
practicable, with prior written notice of such requirement, and, to the extent
reasonably practicable, cooperate with the other parties (at such other parties'
expense) to obtain a protective order or similar remedy to cause such
Confidential Information not to be disclosed; provided, however, that none of
AIG, AHAC or any of their respective Affiliates is required to provide such
prior written notice with respect to any disclosure to the FRBNY. In the event
that such protective order or other similar remedy is not obtained, the
disclosing party shall furnish only that portion of the Confidential Information
that it reasonably believes is required to be disclosed and shall exercise its
commercially reasonable efforts (at such other party's expense) to obtain
assurance that confidential treatment will be accorded such Confidential
Information.
(c) Notwithstanding anything to the contrary contained herein, the
parties hereto acknowledge and agree that (x) AIG, AHAC and their respective
Affiliates may, without notifying TRH or any other Person, share any information
relating to or obtained from TRH or any of the Company Subsidiaries with (i) the
FRBNY or the U.S. Department of the Treasury and their respective
Representatives, (ii) the AIG Credit Facility Trust, (iii) any insurance
regulatory authority or (iv) the IRS or any other tax authority, in each case as
AIG deems necessary or advisable in its good faith judgment and (y) TRH and the
Company Subsidiaries may, without notifying AIG, AHAC or any other Person, share
any information relating to or obtained from AIG, AHAC or their respective
Affiliates with (i) any insurance regulatory authority or (ii) the IRS or any
other tax authority, in each case as TRH deems necessary or advisable in its
good faith judgment.
(d) To the fullest extent permitted by applicable Law, the provisions
of Section 3.17(a) shall not restrict or limit the use of or disclosure by AIG,
AHAC or any of their respective Affiliates or TRH or any of the Company
Subsidiaries, of any customer, policy or beneficiary information (including such
information relating to TRH and the Company Subsidiaries or to AIG, AHAC or any
of their respective Affiliates, as the case may be) if such information was in
the possession or control of AIG, AHAC or their respective Affiliates, on the
one hand, or in the possession or control of TRH or any Company Subsidiaries, on
the other hand, prior to the First Time of Delivery. For the avoidance of doubt,
the foregoing shall apply regardless of whether such information (i) was also
possessed or controlled by TRH or any of the Company Subsidiaries, or AIG, AHAC
or any of their respective Affiliates, as the case may be, on or prior to the
First Time of Delivery and/or (ii) was originated by any other Person.
Notwithstanding the foregoing, the provisions of this Section 3.17(d) shall not
apply to the disclosure by AIG, AHAC or any of their respective Affiliates, of
any of the terms or conditions of the agreements set forth on Schedule 3.17(a)
or any information related to the transactions contemplated thereby.
(e) Each party agrees that irreparable damage could occur if this
Section 3.17 was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that, without the necessity of
posting bond or other undertaking, each party or its Affiliates (and their
successors or assigns) shall be entitled to proceed against the other parties or
their Affiliates (and their successors or assigns) in law and/or in equity for
such damages or other relief as a court may deem appropriate and shall be
entitled to seek a temporary restraining order and/or preliminary and final
injunctive or other equitable relief, including specific performance, to prevent
breaches of this
31
Section 3.17 and, in addition to any other remedy to which they
are entitled at law or in equity, to enforce specifically the terms and
provisions of this Section 3.17. In the event that any Action is brought in
equity to enforce the provisions of this Section 3.17, no party will allege, and
each party hereby waives the defense or counterclaim, that there is an adequate
remedy at law.
Section 3.18. Third-Party Contracts. The parties hereto shall use
their respective reasonable efforts on or prior to the Closing Date to cause to
occur, effective upon the First Time of Delivery, the termination, amendment,
separation or other action set forth on Schedule 3.18 with respect to each
third-party Contract set forth on such Schedule 3.18, provided that none of AIG
or any of its Affiliates nor TRH or any Company Subsidiaries shall be required
to compensate any third party, commence or participate in litigation or offer or
grant any accommodation (financial or otherwise) to any third party to obtain
any consent or approval. With respect to any Contract set forth on Schedule 3.18
in which the parties hereto are unable prior to the Closing to cause such
termination, amendment, separation or other action to be effective upon the
First Time of Delivery, the parties hereto agree that, from and after the First
Time of Delivery, (a) TRH and the Company Subsidiaries shall not have any
rights, or be entitled to any benefits, under such Contract and (b) TRH shall
promptly reimburse and indemnify, defend and hold harmless AIG or any of its
Affiliates for any Losses relating to or arising out of the failure to obtain
such termination, amendment, separation or other action (e.g., Losses resulting
from termination fees or penalties or unused minimum volume commitments)
provided, however, that such Losses shall be limited solely to Losses directly
attributed to such failure. To the extent that (i) any Contract between a third
party, on the one hand, and AIG or any of its Affiliates (each, an "AIG
Signatory"), on the other hand, to which TRH or any Company Subsidiary is not a
party, but under which TRH or any of the Company Subsidiaries may otherwise
derive benefits (each, a "TRH Beneficiary"), such as enterprise-wide licenses or
"master" agreements, (ii) any Contract between a third party, on the one hand,
and TRH and/or any Company Subsidiary (each, a "TRH Signatory"), on the other
hand, to which AIG or any of its Affiliates is not a party, but under which AIG
or any of its Affiliates may otherwise derive benefits (each, an "AIG
Beneficiary"), such as enterprise-wide licenses or "master" agreements, or (iii)
any Contract among (x) a third party, (y) AIG or any of its Affiliates and (z)
TRH or any of the Company Subsidiaries (the Contracts described in clauses (i),
(ii) and (iii) above are referred to collectively herein as the "Schedule 3.18
Contracts"), (1) is the subject of a claim against an AIG Signatory due to an
act or omission by a TRH Beneficiary, TRH shall promptly reimburse and
indemnify, defend and hold harmless the AIG Signatory for any Losses relating to
or arising out of such act or omission; (2) is the subject of a claim against a
TRH Signatory due to an act or omission by an AIG Beneficiary, AIG shall
promptly reimburse and indemnify, defend and hold harmless the TRH Signatory for
any Losses relating to or arising out of such act or omission; (3) is omitted
from Schedule 3.18, the parties hereto agree to negotiate in good faith after
the date hereof as to the termination, amendment, separation or other action to
be taken, if any, with respect to such Contract as the parties hereto may
determine, consistent with the terms of the Transition Services Agreement (if
applicable) relevant to such Contract, provided that with regard to the
foregoing clause (3) of this Section 3.18, neither AIG or any of its Affiliates
nor TRH or any of the Company Subsidiaries shall be (A) obligated to take any
action with regard to such an omitted Contract, unless AIG or TRH (as the case
may be) requests in writing to the other within ninety (90) days after the First
Time of Delivery that specific action be taken with regard to such omitted
Contract or (B) required to compensate any third party, commence or participate
in litigation or offer or grant any accommodation (financial or otherwise) to
any third party, to obtain any consent or approval; or (4) is a Schedule 3.18
Contract of the types described
32
in clauses (i) or (ii) of this Section 3.18 above, is omitted from Schedule 3.18
and is not terminated, amended, separated or subject to other action pursuant to
the preceding clause (3) of this Section 3.18, from and after the First Time of
Delivery, each TRH Beneficiary or AIG Beneficiary (as the case may be) shall not
have any rights, or be entitled to any benefits, under such Contract.
Section 3.19. AIG Corporate Credit Card Program. Following the First
Time of Delivery, but by no later than May 31, 2009, AIG and TRH shall, and
shall cause their respective Affiliates to, take such actions as may be
necessary to terminate the participation of TRH and the Company Subsidiaries and
their respective employees in the Credit Card Program. From time to time
following the First Time of Delivery, TRH shall, and shall cause the Company
Subsidiaries to, promptly reimburse and indemnify, defend and hold harmless AIG
or any of its Affiliates for any amounts incurred by TRH or any of the Company
Subsidiaries or their respective employees under the Credit Card Program to the
extent that AIG and its Affiliates have paid or otherwise incurred such amounts
and have not previously been reimbursed for such amounts.
Section 3.20. Certain Waivers. The parties agree that with respect to
(a) any Intercompany Agreement set forth on Schedule 3.05(a) or Schedule 3.05(b)
or (b) any Insurance Agreement, each party, on behalf of itself and its
Affiliates, hereby waives any breach or default under such Intercompany
Agreements or Insurance Agreements, and any rights to terminate, accelerate or
cancel under such Intercompany Agreements or Insurance Agreements, relating to,
arising out of or in connection with (i) any "change of control," "change in
control" or similar phrase or concept as defined in such Intercompany Agreement
or Insurance Agreement (A) of TRH or any Company Subsidiary pursuant to or as a
result of the consummation of the transactions contemplated by this Agreement or
any other Transaction Agreement and (B) of AIG or any of its Affiliates,
including pursuant to or as a result of the transactions contemplated by (x) the
Credit Agreement, dated as of September 22, 2008, between AIG and the FRBNY (as
amended, modified or supplemented from time to time in accordance with its
terms) (the "Credit Agreement") or (y) any other Contract with, or entered into
at the direction of, the FRBNY or the U.S. Department of the Treasury and (ii)
any sale, transfer, lease, public offering, spin-off or other disposition of any
business or assets of AIG and its Subsidiaries pursuant to the restructuring and
divestiture program publicly disclosed by AIG prior to the date of this
Agreement.
Section 3.21. Adoption of Amended and Restated TRH Certificate of
Incorporation. On or prior to Closing, each of AIG and AHAC (i) shall execute a
written consent in substantially the form of Exhibit G to this Agreement
adopting the Restated Certificate of Incorporation of TRH in the form attached
as Exhibit H hereto, which has been approved by the affirmative vote of at least
a majority of the board of directors of TRH acting at a meeting at which a
quorum was present and which was either duly noticed or for which notice was
properly waived by all directors of TRH not present at such meeting, and (ii)
shall reasonably cooperate with TRH in taking all necessary actions so that,
effective 20 days after the filing by TRH of an Information Statement on
Schedule 14C with the SEC, the Restated Certificate of Incorporation of TRH
shall be the certificate of incorporation of TRH.
33
Section 3.22. By-Laws of TRH. TRH shall not, and shall its board of
directors not to, amend, modify or make any other changes to the By-Laws of TRH
prior to the First Time of Delivery without the express written consent of AIG.
Section 3.23. Subleases.
(a) On or prior to the Closing, each of TRH and AIG shall execute and
deliver each of the "New York Sublease", the "Chicago Sublease" and the "Toronto
Sublease" in substantially the forms attached hereto as Exhibit I, Exhibit J and
Exhibit K (each, a "Sublease" and collectively, the "Subleases") to the extent
it is a party to such Sublease and shall cause each of their respective
Affiliates to execute and deliver each such Sublease to which such Affiliate is
a party. AIG and TRH shall each pay one-half of the actual out-of-pocket costs
and expenses (i) for any construction work that AIG, in its sole discretion,
determines desirable to demise any of the Subleased Premises separately, and
(ii) to obtain the consent of any Landlord, including any costs or expenses that
may be charged in accordance with the terms of the Master Lease or that are
otherwise reasonably requested by any Landlord, and (iii) to dispute the refusal
by any Landlord under any Master Lease to provide its consent to its applicable
Sublease. TRH shall pay any and all other costs and expenses for any other work
or action that may be necessary or desirable to separately demise any of the
Subleased Premises or to effectuate any Sublease, including the cost to demise
any computer room or computer system separately. TRH and AIG shall each pay for
their own legal expenses in connection with each Sublease.
(b) AIG and TRH shall, and shall cause their respective Affiliates to,
cooperate in good faith to obtain all required consents and approvals necessary
for each Sublease no later than the Consent Deadline that is applicable to each
Sublease. If TRH and AIG fail to obtain any consent necessary to effectuate any
Sublease on or prior to the Consent Deadline that is applicable to such Sublease
(each such Sublease a "Rejected Sublease"), then solely with respect to such
Rejected Sublease, (i) the Rejected Sublease and each other arrangement between
TRH, AIG and any of their respective Affiliates with respect to the Rejected
Subleased Premises shall automatically terminate and be of no further force and
effect as of the applicable Consent Deadline, (ii) TRH shall, or shall cause its
relevant Affiliate(s) to, vacate the Rejected Subleased Premises in accordance
with the requirements set forth in the Affected Master Lease and otherwise in an
orderly manner on or prior to the Exit Date that is applicable to the Rejected
Sublease and shall do so at TRH's sole cost and expense, and (iii) TRH or the
relevant TRH Affiliate(s) shall, no later than the date on which TRH vacates all
of the Rejected Subleased Premises, pay AIG or the relevant AIG Affiliate(s) the
amount that would have been due and owing under the Rejected Sublease had the
Rejected Sublease not been terminated for the period from and including the
Closing Date through and including the applicable Exit Date. Notwithstanding the
foregoing, if, notwithstanding TRH using its commercially reasonable efforts to
vacate the Rejected Subleased Premises by the applicable Exit Date, TRH cannot
vacate the Rejected Subleased Premises by such date, then, no later than the
applicable Exit Date, TRH shall send AIG written notice that sets forth the
earliest date upon which TRH reasonably expects to be able to vacate the
Rejected Subleased Premises, and AIG agrees to work with the Landlord to try to
accommodate TRH's need for additional time; provided, however, that AIG shall
have no obligation to extend the applicable Exit Date if the Landlord is
unwilling to afford any additional time beyond the applicable Exit Date. AIG
shall have the right, in its sole discretion but exercised in good faith, to
determine when and whether the
34
landlord of any Subleased Premises shall have rejected, or determined not to
provide its consent to, any Sublease or to extend to any applicable Exit Date.
(c) For purposes of this Section 3.23, the following terms shall have
the following meanings. "Affected Master Lease" shall mean, with respect to any
Rejected Sublease, the Master Lease relating to such Rejected Sublease. "Consent
Deadline" shall mean, (i) with respect to the New York Sublease and the Chicago
Sublease, the date that is twenty (20) days after the Closing Date, and (ii)
with respect to the Toronto Sublease, the date that is ten (10) days after the
Closing Date. "Exit Date" shall mean, (i) with respect to the New York Sublease
and the Chicago Sublease, the date that is thirty (30) days after the Closing
Date, and (ii) with respect to the Toronto Sublease, the date that is fifteen
(15) days after the Closing Date. "Landlord" shall mean, with respect to any
Sublease, the Person that is identified in such Sublease as the landlord or
owner under such Sublease's Master Lease. "Master Lease" shall, with respect to
any Sublease, have the meaning ascribed to the term "Master Lease" in such
Sublease. "Rejected Subleased Premises" shall mean, with respect to any Rejected
Sublease, the Subleased Premises relating to such Rejected Sublease. "Subleased
Premises" shall, with respect to any Sublease, have the meaning ascribed to the
term "Subleased Premises" in such Sublease.
Section 3.24. No Solicitation; No Hire.
(a) For a period of twelve (12) months from the First Time of
Delivery, AIG shall not, and shall cause its Affiliates not to, without the
prior written consent of TRH, directly or indirectly, solicit for employment or
hire any employee of TRH or any Company Subsidiary as of the date hereof;
provided, however, that AIG and its Affiliates may employ or hire any such
Person who is terminated and is no longer employed by TRH or any Company
Subsidiary; and provided further that nothing in this Section 3.24(a) shall
prohibit AIG or any of its Affiliates from engaging in general solicitations to
the public or general advertising not targeted at employees of TRH or any
Company Subsidiary or from employing or hiring any Person who contacts AIG or
any of its Affiliates on his or her own initiative or as a result of a general
solicitation to the public or general advertising not targeted at employees of
TRH or any Company Subsidiary.
(b) For a period of twelve (12) months from the First Time of
Delivery, TRH shall not, and shall cause the Company Subsidiaries not to,
without the prior written consent of AIG, directly or indirectly, solicit for
employment or hire any employee of AIG or any of its Affiliates as of the date
hereof; provided, however, that TRH and the Company Subsidiaries may employ or
hire any such Person who is terminated and is no longer employed by AIG or any
of its Affiliates; and provided further that nothing in this Section 3.24(b)
shall prohibit TRH or any Company Subsidiary from engaging in general
solicitations to the public or general advertising not targeted at employees of
AIG or any of its Affiliates or from employing or hiring any Person who contacts
TRH or any Company Subsidiary on his or her own initiative or as a result of a
general solicitation to the public or general advertising not targeted at
employees of AIG or any of its Affiliates.
(c) The parties hereto acknowledge that the covenants set forth in
this Section 3.24 are an essential element of this Agreement and that, but for
these covenants, the parties hereto would not have entered into this Agreement.
The parties hereto acknowledge that
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this Section 3.24 constitutes an independent covenant and shall not be affected
by performance or nonperformance of any other provision of this Agreement or any
other document contemplated by this Agreement.
(d) It is the intention of the parties hereto that if any of the
restrictions or covenants contained in this Section 3.24 is held to cover a
geographic area or to be for a length of time which is not permitted by
applicable Law, or in any way construed to be too broad or to any extent
invalid, such restrictions or covenants shall not be construed to be null, void
and of no effect, but to the extent such restrictions or covenants would be
valid or enforceable under applicable Law, a court of competent jurisdiction
shall construe and interpret or reform this Section 3.24 to provide for a
covenant having the maximum enforceable geographic area, time period and other
provisions (not greater than those contained in this Section 3.24) that would be
valid and enforceable under such applicable Law.
Section 3.25. Further Action. AIG, AHAC and TRH (a) shall execute and
deliver, or shall cause to be executed and delivered, such documents and other
instruments and shall take, or shall cause to be taken, such further actions as
may be reasonably required to carry out the provisions of the Transaction
Agreements and give effect to the transactions contemplated by the Transaction
Agreements, (b) shall refrain from taking any actions that could reasonably be
expected to impair, delay or impede the Closing and the other transactions
contemplated hereunder and under the other Transaction Agreements and (c) not in
limitation of any other provision of this Agreement, shall use their respective
reasonable best efforts to cause all the conditions to the obligations of the
other parties hereto to consummate the transactions contemplated by this
Agreement to be met as soon as reasonably practicable.
ARTICLE IV
CONDITIONS OF TRH TO CLOSING
Section 4.01. Conditions to Obligations of TRH to Execute the
Underwriting Agreement. The obligation of TRH to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment or waiver, at
or prior to the Closing, of each of the following conditions:
(a) AIG and AHAC shall have executed and delivered the Underwriting
Agreement.
(b) Each of the representations and warranties of AIG and AHAC
contained in this Agreement shall be true and correct in all material respects
as of the date hereof and as of the Closing Date as if made on and as of the
Closing Date.
(c) AIG and AHAC shall have performed in all material respects all
obligations required to be performed by them under this Agreement on or prior to
the Closing Date, and TRH shall have received a certificate signed on behalf of
AIG and AHAC by an executive officer of AIG and AHAC, respectively, to such
effect.
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(d) Each of AIG and AHAC shall have executed and delivered the written
consent contemplated by Section 3.21 of this Agreement, duly executed by a duly
authorized officer of AIG and AHAC, respectively.
(e) The Registration Statement shall have become or been declared
effective by the SEC, and there shall be no stop order in effect with respect
thereto and no proceeding for that purpose shall have been instituted by the
SEC.
(f) All authorizations, consents and approvals of, and filings and
notifications with or to, insurance departments and other Governmental
Authorities required to be made or obtained prior to the First Time of Delivery
in connection with the consummation of the Offering or execution, delivery and
performance of this Agreement and the Ancillary Agreements shall have been made
or obtained or are reasonably likely to have been made or obtained by the First
Time of Delivery.
(g) No order, injunction or decree issued by any court or other
Governmental Authority of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Offering or any of the other
transactions contemplated by this Agreement or any Ancillary Agreement shall be
in effect.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF AIG
Each of AIG and AHAC hereby represents and warrants, severally and not
jointly, to TRH as follows:
Section 5.01. Incorporation and Authority of AIG and AHAC. AIG is a
corporation duly incorporated, validly existing and in good standing under the
Laws of the State of Delaware. AHAC is an insurance company duly organized,
validly existing and in good standing under the Laws of the State of New York.
It has full legal power and authority, and has taken all required legal action
necessary, to execute and deliver this Agreement and all other agreements,
instruments, certificates, notices and other documents as are necessary to
consummate the transactions contemplated hereby and otherwise to carry out the
terms of this Agreement. It has duly and validly authorized the execution and
delivery of this Agreement, and the consummation of the transactions
contemplated hereby has been duly and validly authorized by it and no other
proceedings on its part are necessary to authorize the execution and delivery of
this Agreement or the consummation of the transactions contemplated hereby.
Section 5.02. Enforceability. This Agreement has been duly and validly
executed by it and, assuming due authorization, execution and delivery by TRH
constitutes, or upon execution and delivery thereof will constitute, the legal,
valid and binding agreement of it, enforceable against it in accordance with the
terms hereof, subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium, rehabilitation, liquidation, fraudulent
conveyance or similar Laws relating to or affecting creditors' rights generally
and subject, as to enforceability, to the effect of general equitable principles
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
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Section 5.03. Consents and Approvals. Except as set forth on Schedule
5.03, no consent, approval, waiver, authorization, notice or filing is required
to be obtained by it from, or to be given by it to, or made by it with, any
Governmental Authority or any other Person, in connection with the execution,
delivery and performance by it of this Agreement.
Section 5.04. Non-Contravention. The execution, delivery and
performance by it of this Agreement, and the consummation of the transactions
contemplated hereby, do not and will not (i) violate any provision of its
Organizational Documents; (ii) assuming the receipt of all consents, approvals,
waivers and authorizations and the making of the notices and filings set forth
on Schedule 5.03, conflict with, or result in the breach of, or constitute a
default under, or result in the termination, cancellation, modification or
acceleration (whether after the filing of notice or the lapse of time or both)
of any right or obligation of it under, or result in a loss of any benefit to
which it is entitled under, any Contract, or result in the creation of any Lien
(other than Permitted Liens) upon its assets and properties; or (iii) assuming
the receipt of all consents, approvals, waivers and authorizations and the
making of the notices and filings set forth on Schedule 5.03 or required to be
made or obtained by TRH or any of the Company Subsidiaries, violate, or result
in a breach of, or constitute a default under any Law, Governmental Order or
Self-Regulatory Organization Approval to which it is subject, other than, in the
cases of clauses (ii) and (iii), conflicts, breaches, terminations, defaults,
cancellations, accelerations, losses, violations or Liens that would not
materially impair or delay its ability to perform its obligations hereunder.
Section 5.05. Disclaimer. Except for the representations and
warranties contained in this Article V, it does not make any other
representation or warranty of any kind or nature whatsoever, oral or written,
express or implied, with respect to it, any of its Affiliates, this Agreement or
the transactions contemplated by this Agreement.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF TRH
TRH hereby represents and warrants to AIG and AHAC as follows:
Section 6.01. Incorporation and Authority of TRH. TRH is a corporation
duly incorporated, validly existing and in good standing under the Laws of the
State of Delaware. TRH has full legal power and authority, and has taken all
required legal action necessary, to execute and deliver this Agreement and all
other agreements, instruments, certificates, notices and other documents as are
necessary to consummate the transactions contemplated hereby and otherwise to
carry out the terms of this Agreement. TRH has duly and validly authorized the
execution and delivery of this Agreement to which it is a party, and the
consummation of the transactions contemplated hereby has been duly and validly
authorized by TRH and no other proceedings on the part of TRH are necessary to
authorize the execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby by TRH.
Section 6.02. Enforceability. This Agreement has been duly and validly
executed by TRH and, assuming due authorization, execution and delivery by AIG
and AHAC, constitutes, or upon execution and delivery thereof will constitute,
the legal, valid and binding
38
agreement of TRH, enforceable against TRH in accordance with its terms, subject
to the effect of any applicable bankruptcy, reorganization, insolvency,
moratorium, rehabilitation, liquidation, fraudulent conveyance or similar Laws
relating to or affecting creditors' rights generally and subject, as to
enforceability, to the effect of general equitable principles (regardless of
whether enforcement is sought in a proceeding in equity or at law).
Section 6.03. Consents and Approvals. Except as set forth on Schedule
6.03, no consent, approval, waiver, authorization, notice or filing is required
to be obtained by TRH from, or to be given by TRH to, or made by TRH with, any
Governmental Authority or other Person, in connection with the execution,
delivery and performance by TRH of this Agreement.
Section 6.04. Non-Contravention. The execution, delivery and
performance by TRH of this Agreement, and the consummation of the transactions
contemplated hereby, do not and will not (i) violate any provision of the
Organizational Documents of TRH; (ii) assuming the receipt of all consents,
approvals, waivers and authorizations and the making of the notices and filings
set forth on Schedule 6.03, to the Knowledge of TRH, conflict with, or result in
the breach of, or constitute a default under, or result in the termination,
cancellation, modification or acceleration (whether after the filing of notice
or the lapse of time or both) of any right or obligation of TRH under, or result
in a loss of any benefit to which TRH is entitled under, any Contract, or result
in the creation of any Lien (other than Permitted Liens) upon the assets and
properties of TRH; or (iii) assuming the receipt of all consents, approvals,
waivers and authorizations and the making of notices and filings set forth on
Schedule 6.03 or required to be made or obtained by AIG or any of its
Affiliates, to the Knowledge of TRH, violate or result in a breach of or
constitute a default under any Law, Governmental Order or Self-Regulatory
Organization Approval to which TRH is subject, other than, in the cases of
clauses (ii) and (iii), conflicts, breaches, terminations, defaults,
cancellations, accelerations, losses, violations or Liens that would not
materially impair or delay TRH's ability to perform its obligations hereunder.
Section 6.05. Disclaimer. Except for the representations and
warranties contained in this Article VI, TRH does not make any other
representation or warranty of any kind or nature whatsoever, oral or written,
express or implied, with respect to TRH or any of the Company Subsidiaries, this
Agreement or the transactions contemplated by this Agreement.
ARTICLE VII
TERMINATION AND WAIVER
Section 7.01. Pre-Closing Termination. This Agreement may be
terminated prior to the Closing:
(a) by and in the sole discretion of AIG or AHAC without the approval
of TRH;
(b) by the mutual written consent of AIG, AHAC and TRH;
(c) by TRH if the Closing has not occurred on or before July 1, 2009;
provided, however, that the right to terminate this Agreement under this Section
7.01(c) shall not be available to TRH if TRH's failure to take any action
required to fulfill any of its obligations
39
under this Agreement has caused or resulted in the failure of the Closing to
occur prior to such date;
(d) by TRH (but only so long as TRH is not in material breach of its
obligations under this Agreement) if there has been a material breach of any
representation, warranty, covenant or agreement of AIG or AHAC such that one or
more of the conditions set forth in Section 4.01 are not capable of being
fulfilled;
Section 7.02. Termination of Underwriting Agreement. This Agreement
terminates automatically if the Underwriting Agreement is terminated following
the Closing Date but prior to the First Time of Delivery.
Section 7.03. Post-Closing Termination. This Agreement may be
terminated at any time after the Closing Date by the mutual written consent of
AIG, AHAC and TRH.
Section 7.04. Notice of Termination. Any party hereto desiring to
terminate this Agreement pursuant to Section 7.01, Section 7.02 or Section 7.03
shall give written notice of such termination to the other parties hereto.
Section 7.05. Effect of Termination. In the event of the termination
of this Agreement as provided in Section 7.01, Section 7.02 and Section 7.03,
this Agreement shall forthwith become void and there shall be no liability on
the part of any party hereto, except as set forth in Section 3.03 (Asset
Transfers; Other Restructuring), Section 3.04 (Intercompany Obligations),
Section 3.07 (Guarantees), Section 3.17 (Confidentiality), Section 3.23
(Subleases) and as set forth in this Article VII, Article VIII and Article IX;
provided, however, that nothing in this Agreement shall relieve any party hereto
from liability for any intentional breach of this Agreement.
ARTICLE VIII
INDEMNIFICATION
Section 8.01. Survival. The representations, warranties, covenants and
agreements of the parties hereto contained in or made pursuant to this Agreement
shall survive the Closing indefinitely, except: (a) the covenants and agreements
that by their terms apply or are to be performed in whole or in part after the
Closing ("Post-Closing Covenants") shall survive for the period provided in such
covenants and agreements, if any, or until fully performed and (b) the covenants
and agreements that by their terms apply or are to be performed in their
entirety on or prior to the Closing ("Pre-Closing Covenants") shall terminate at
the Closing.
Section 8.02. Indemnification by AIG.
(a) After the Closing and subject to this Article VIII, each of AIG
and AHAC shall indemnify, defend and hold harmless TRH, the Company Subsidiaries
and their respective Representatives (collectively, the "TRH Indemnified
Parties"), severally and not jointly, against, and reimburse any TRH Indemnified
Party for, all Losses that such TRH Indemnified Party may at any time suffer or
incur, or become subject to:
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(i) as a result of or in connection with the inaccuracy or breach of
any representation or warranty made by it in this Agreement;
(ii) as a result of or in connection with any breach or failure by it
to perform any of its covenants or obligations contained in this Agreement;
or
(iii) as a result of or in connection with any untrue statement or
alleged untrue statement of a material fact in any AIG Disclosure Portions
in the Registration Statement, the Prospectus or any other document or
report filed with the SEC in connection with the Offering, including any
amendment or supplement thereto, or caused by any omission or alleged
omission to state in any AIG Disclosure Portions a material fact necessary
to make the statements therein not misleading.
(b) Notwithstanding anything to the contrary contained herein, neither
AIG nor AHAC, respectively, shall be required to indemnify, defend or hold
harmless any TRH Indemnified Party against, or reimburse any TRH Indemnified
Party for, any Losses pursuant to Section 8.02(a)(i) in a cumulative aggregate
amount exceeding the net proceeds received by AIG and AHAC, respectively, from
the Offering and from any subsequent public offering of the Shares in accordance
with the Rights Agreement.
Section 8.03. Indemnification by TRH.
(a) After the Closing and subject to this Article VIII, TRH shall
indemnify, defend and hold harmless AIG, AHAC, their Affiliates and their
respective Representatives (collectively, the "AIG Indemnified Parties")
against, and reimburse any AIG Indemnified Party for, all Losses that such AIG
Indemnified Party may at any time suffer or incur, or become subject to:
(i) as a result of or in connection with the inaccuracy or breach of
any representation or warranty made by TRH in this Agreement;
(ii) as a result of or in connection with any breach or failure by TRH
to perform any of its covenants or obligations contained in this Agreement;
(iii) as a result of or in connection with any untrue statement or
alleged untrue statement of a material fact contained in the Registration
Statement, the Prospectus or any other document or report filed with the
SEC in connection with the Offering, including any amendment or supplement
thereto, other than with respect to any AIG Disclosure Portions thereof, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein
not misleading, other than with respect to any AIG Disclosure Portions
thereof; or
(iv) as a result of any claim or demand by any Governmental Authority
or any third party commenced or made against any AIG Indemnified Party
relating to any violation or breach, or alleged violation or breach, by TRH
or any Company Subsidiary of any federal, state or other securities Law in
connection with the Offering.
41
(b) Notwithstanding anything to the contrary contained herein, TRH
shall not be required to indemnify, defend or hold harmless any AIG Indemnified
Party against, or reimburse any AIG Indemnified Party for, any Losses pursuant
to Section 8.03(a)(i) in a cumulative aggregate amount exceeding the net
proceeds received by AIG and AHAC, collectively, from the Offering and any
subsequent public offering of the Shares in accordance with the Rights
Agreement.
Section 8.04. Notification of Claims.
(a) A Person that may be entitled to be indemnified under this
Agreement (the "Indemnified Party") shall promptly notify the party or parties
liable for such indemnification (the "Indemnifying Party") in writing of any
claim in respect of which indemnity may be sought under this Article VIII,
including any pending or threatened claim or demand by a third party that the
Indemnified Party has determined has given or could reasonably give rise to a
right of indemnification under this Agreement (including a pending or threatened
claim or demand asserted by a third party against the Indemnified Party) (each,
a "Third Party Claim"), describing in reasonable detail the facts and
circumstances with respect to the subject matter of such claim or demand;
provided, however, that the failure to provide such notice shall not release the
Indemnifying Party from any of its obligations under this Article VIII except to
the extent that the Indemnifying Party is prejudiced by such failure. The
parties agree that (i) in this Article VIII they intend to shorten (in the case
of the limited survival periods specified in Section 8.01) and lengthen (in the
case of the indefinite survival periods specified in Section 8.01) (as the case
may be) the applicable statute of limitations period with respect to certain
claims; (ii) notices for claims in respect of a breach of a representation,
warranty, covenant or agreement (other than a Post-Closing Covenant) must be
delivered prior to the expiration of any applicable survival period specified in
Section 8.01 for such representation, warranty, covenant or agreement; (iii)
notices for claims in respect of a breach of a Post-Closing Covenant must be
delivered prior to the date that is six (6) months after the last day of the
effective period of such Post-Closing Covenant; and (iv) any claims for
indemnification for which notice is not delivered in accordance with this
Section 8.04(a) shall be expressly barred and are hereby waived; provided
further that if, prior to such applicable date, a party hereto shall have
notified the other party hereto in accordance with the requirements of this
Section 8.04(a) of a claim for indemnification under this Article VIII (whether
or not formal legal action shall have been commenced based upon such claim),
such claim shall continue to be subject to indemnification in accordance with
this Article VIII notwithstanding the passing of such applicable date.
(b) Upon receipt of a notice of a claim for indemnity from an
Indemnified Party pursuant to Section 8.04(a) in respect of a Third Party Claim,
the Indemnifying Party may, by notice to the Indemnified Party delivered within
twenty (20) Business Days of the receipt of notice of such Third Party Claim,
assume the defense and control of any Third Party Claim, with its own counsel
and at its own expense, but shall allow the Indemnified Party a reasonable
opportunity to participate in the defense of such Third Party Claim with its own
counsel and at its own expense. The Indemnified Party may take any actions
reasonably necessary to defend such Third Party Claim prior to the time that it
receives a notice from the Indemnifying Party as contemplated by the immediately
preceding sentence. AIG, AHAC or TRH (as the case may be) shall, and shall cause
each of its Affiliates and Representatives to, cooperate fully with the
42
Indemnifying Party in the defense of any Third Party Claim. The Indemnifying
Party shall not, without the prior written consent of the Indemnified Party
(which shall not be unreasonably withheld), consent to a settlement, compromise
or discharge of, or the entry of any judgment arising from, any Third Party
Claim, unless such settlement, compromise, discharge or entry of any judgment
does not involve any finding or admission of any violation of Law or admission
of any wrongdoing by the Indemnified Party, and the Indemnifying Party shall (i)
pay or cause to be paid all amounts arising out of such settlement or judgment
concurrently with the effectiveness of such settlement or judgment (unless
otherwise provided in such judgment), (ii) not encumber any of the material
assets of any Indemnified Party or agree to any restriction or condition that
would apply to or materially adversely affect any Indemnified Party or the
conduct of any Indemnified Party's business and (iii) obtain, as a condition of
any settlement, compromise, discharge, entry of judgment (if applicable), or
other resolution, a complete and unconditional release of each Indemnified Party
from any and all liabilities in respect of such Third Party Claim. The
Indemnified Party shall not settle, compromise or consent to the entry of any
judgment with respect to any claim or demand for which it is seeking
indemnification from the Indemnifying Party or admit to any liability with
respect to such claim or demand without the prior written consent of the
Indemnifying Party.
(c) Notwithstanding anything to the contrary contained in this Article
VIII (including Section 8.02 and Section 8.03), no Indemnifying Party shall have
any liability under this Article VIII for any Losses arising out of or in
connection with any Third Party Claim that is settled or compromised by an
Indemnified Party without the consent of such Indemnifying Party.
(d) In the event any Indemnifying Party receives a notice of a claim
for indemnity from an Indemnified Party pursuant to Section 8.04(a) that does
not involve a Third Party Claim, the Indemnifying Party shall notify the
Indemnified Party within twenty (20) Business Days following its receipt of such
notice whether the Indemnifying Party disputes its liability to the Indemnified
Party under this Article VIII; provided, however, that the failure to provide
such notice shall not release the Indemnifying Party from any of its obligations
under this Article VIII except to the extent that the Indemnifying Party is
prejudiced by such failure. The Indemnified Party shall reasonably cooperate
with and assist the Indemnifying Party in determining the validity of any such
claim for indemnity by the Indemnified Party.
Section 8.05. Payment. In the event a claim or any Action for
indemnification under this Article VIII has been finally determined, the amount
of such final determination shall be paid (a) if the Indemnified Party is a TRH
Indemnified Party, by AIG or AHAC, as applicable, to the Indemnified Party and
(b) if the Indemnified Party is an AIG Indemnified Party, by TRH to the
Indemnified Party, in each case on demand in immediately available funds. A
claim or an Action, and the liability for and amount of damages therefor, shall
be deemed to be "finally determined" for purposes of this Article VIII when the
parties hereto have so determined by mutual agreement or, if disputed, when a
final non-appealable Governmental Order has been entered into with respect to
such claim or Action.
Section 8.06. Exclusive Remedies. Except for injunctive and
provisional relief (including specific performance) provided for in Section
3.08(g), Section 3.17 and Section 9.11, each party hereto acknowledges and
agrees that (a) following the Closing, (i) the indemnification provisions of
this Article VIII shall be the sole and exclusive remedies of the parties hereto
for
43
any breach of the representations or warranties contained in this Agreement and
(ii) notwithstanding anything to the contrary contained herein, no breach of any
representation, warranty, covenant or agreement contained herein shall give rise
to any right on the part of any party hereto to rescind this Agreement or any of
the transactions contemplated by this Agreement; and (b) following the Closing,
the indemnification provisions of this Article VIII shall be the sole and
exclusive monetary remedies of the parties hereto for any breach of any
Pre-Closing Covenant or any Post-Closing Covenant.
Section 8.07. Additional Indemnification Provisions.
(a) AIG, AHAC and TRH agree, for themselves and on behalf of their
respective Affiliates and Representatives, that with respect to each
indemnification obligation set forth in Article VIII, any Transaction Agreement
or any other document executed or delivered in connection with the Closing: (i)
each such obligation shall be calculated on an After-Tax Basis, (ii) all Losses
shall be net of any Eligible Insurance Proceeds, (iii) in no event shall an
Indemnifying Party have any liability to an Indemnified Party for: (A) any
Losses to the extent arising from special circumstances of the Indemnified Party
that were not communicated prior to the date hereof by the Indemnified Party to
the Indemnifying Party, (B) any punitive or special damages other than punitive
or special damages recovered by third parties in connection with a Third Party
Claim, (C) any Losses to the extent not the probable and reasonably foreseeable
result of any breach by the Indemnifying Party of a representation and warranty
or covenant contained in this Agreement (provided that this clause (C) shall not
apply to any Losses that are recovered by third parties in connection with a
Third Party Claim), (D) any damages solely attributable to diminution of value
or lost profits to the extent constituting damages in excess of the difference
between the value of what the Indemnified Party received in the transaction
contemplated by this Agreement and the value of what the Indemnified Party
should have received in the transaction contemplated by the Agreement if there
had been no breach of the representation and warranty or covenant by the
Indemnifying Party for which breach the Indemnified Party is seeking
indemnification and (E) any Losses to the extent incurred in connection with a
party's assertion, enforcement, dispute or resolution of its indemnification or
other rights under this Agreement or the collection of any amounts payable to a
party hereto under this Agreement.
(b) Any amount payable by an Indemnifying Party pursuant to this
Article VIII shall be paid promptly and payment shall not be delayed pending any
determination of Eligible Insurance Proceeds. In any case where an Indemnified
Party recovers from a third Person any Eligible Insurance Proceeds or any other
amount in respect of any Loss for which an Indemnifying Party has actually
reimbursed it pursuant to this Article VIII, such Indemnified Party shall
promptly pay over to the Indemnifying Party the amount of such Eligible
Insurance Proceeds, but not in excess of the sum of (i) any amount previously
paid by the Indemnifying Party to or on behalf of the Indemnified Party in
respect of such claim and (ii) any amount expended by the Indemnifying Party in
pursuing or defending any claim arising out of such matter.
(c) If any portion of Losses to be reimbursed by the Indemnifying
Party may be covered, in whole or in part, by third party insurance coverage,
the Indemnified Party shall promptly give notice thereof to the Indemnifying
Party (a "Notice of Insurance"). If the
44
Indemnifying Party so requests within one hundred and eighty (180) days after
receipt of a Notice of Insurance, the Indemnified Party shall use its
commercially reasonable efforts to collect the maximum amount of insurance
proceeds thereunder, in which event all such proceeds actually received, net of
costs reasonably incurred by the Indemnified Party in seeking such collection,
shall be considered "Eligible Insurance Proceeds."
Section 8.08. Mitigation. Each of the parties hereto agrees to take
all reasonable steps to mitigate their respective Losses upon and after becoming
aware of any event or condition which would reasonably be expected to give rise
to any Losses that are indemnifiable hereunder.
Section 8.09. Contribution for Securities Law Violations.
(a) If the indemnification provided for in this Article VIII is
unavailable to an Indemnified Party with respect to Section 8.02(a)(iii) or
Section 8.03(a)(iii) or insufficient in respect of any Losses referred to
therein, then each Indemnifying Party, in lieu of indemnifying such Indemnified
Party, shall contribute to the amount paid or payable by such Indemnified Party
as a result of such Losses in such proportion as is appropriate to reflect the
relative fault of TRH on the one hand and of AIG or AHAC, respectively, or
underwriter, selling broker, dealer or similar securities professional, as the
case may be, on the other hand, in connection with the statements or omissions
which resulted in such Losses, as well as any other relevant equitable
considerations. The relative fault of TRH on the one hand and of AIG or AHAC,
respectively, or underwriter, selling broker, dealer or similar securities
professional, as the case may be, on the other hand shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by TRH, by AIG or AHAC or by the underwriter,
selling broker, dealer or similar securities professional and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
(b) TRH, AIG and AHAC agree that it would not be just and equitable if
contribution pursuant to this Section 8.09 were determined by pro rata
allocation (even if AIG and AHAC or the underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Party as a result of the
Losses referred to in the immediately preceding paragraph shall be deemed to
include any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such Action or claim.
Notwithstanding the provisions of this Section, none of AIG, AHAC or
underwriter, selling broker, dealer or similar securities professional shall be
required to contribute any amount in excess of the amount by which (i) in the
case of AIG and AHAC, respectively, the net proceeds received by AIG or AHAC,
respectively, from the sale of the Shares or (ii) in the case of an underwriter,
selling broker, dealer or similar securities professional, the total price at
which the Shares purchased by it and distributed to the public were offered to
the public exceeds, in any such case, the amount of any damages that AIG or such
underwriter, selling broker, dealer or similar securities professional has
otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person
45
who was not guilty of such fraudulent misrepresentation. The obligations to
contribute pursuant to this Section 8.09 of the Indemnified Persons are several
and not joint.
Section 8.10. Ancillary Agreements. Notwithstanding anything to the
contrary in Section 8.02 and Section 8.03, indemnification with respect to any
matter set forth in an Ancillary Agreement, if any, shall be governed by the
terms of such Ancillary Agreement to the extent that indemnification is provided
in such Ancillary Agreement.
ARTICLE IX
GENERAL PROVISIONS
Section 9.01. Expenses. Except as may be otherwise specified in this
Agreement and the other Transaction Agreements, all costs and expenses,
including fees and disbursements of counsel, financial advisers and accountants,
incurred in connection with this Agreement and the other Transaction Agreements
and the transactions contemplated by this Agreement and the other Transaction
Agreements shall be paid by the Person incurring such costs and expenses,
whether or not the Closing shall have occurred.
Section 9.02. Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be given
or made (and shall be deemed to have been duly given or made upon receipt) by
delivery in person, by overnight courier service, by facsimile with receipt
confirmed (followed by delivery of an original via overnight courier service) or
by registered or certified mail (postage prepaid, return receipt requested) to
the respective parties hereto at the following respective addresses (or at such
other address for a party hereto as shall be specified in a notice given in
accordance with this Section 9.02):
(i) if to TRH:
Transatlantic Holdings, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
SVP and General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
46
(ii) if to AIG:
American International Group, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇., Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(iii) if to AHAC:
American Home Assurance
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇., Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Section 9.03. Public Announcements. No party hereto or any Affiliate
or Representative of such party shall issue or cause the publication of any
press release or public announcement or otherwise communicate with any news
media in respect of the Transaction Agreements or the transactions contemplated
by the Transaction Agreement without the prior written consent of the other
parties hereto (which consent shall not be unreasonably withheld, conditioned or
delayed), except as may be required by Law or applicable securities exchange
rules, in which the case the party hereto required to publish such press release
or public announcement shall allow the other parties hereto a reasonable
opportunity to comment on such press release or public announcement in advance
of such publication. Prior to the Closing, none of the parties hereto, nor any
of their respective Affiliates or Representatives, shall make any disclosure
concerning plans or intentions relating to the customers or employees of, or
other Persons with significant business relationships with, TRH or any of the
Company Subsidiaries without first obtaining the prior written approval of the
other parties hereto, which approval shall not be unreasonably withheld,
conditioned or delayed.
47
Section 9.04. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced under any Law or as
a matter of public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated by this Agreement is not
affected in any manner materially adverse to any party hereto. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties hereto as
closely as possible in a mutually acceptable manner in order that the
transactions contemplated by this Agreement be consummated as originally
contemplated to the greatest extent possible.
Section 9.05. Entire Agreement. Except as otherwise expressly provided
in this Agreement or any other Transaction Agreement, this Agreement and the
other Transaction Agreements constitute the entire agreement of the parties
hereto with respect to the subject matter of this Agreement and the other
Transaction Agreements and supersedes all prior agreements and undertakings,
both written and oral.
Section 9.06. Assignment. Except as otherwise expressly set forth
herein, this Agreement shall not be assigned, in whole or in part, by operation
of law or otherwise without the prior written consent of the parties hereto;
provided, however, that no such assignment shall release TRH, AIG or AHAC from
any liability or obligation under this Agreement. Any attempted assignment in
violation of this Section 9.06 shall be void. This Agreement shall be binding
upon, shall inure to the benefit of, and shall be enforceable by the parties
hereto and their permitted successors and assigns.
Section 9.07. No Third Party Beneficiaries. Except as provided in
Section 3.06 with respect to AIG Releasees and TRH Releasees, in Section 3.07
with respect to any AIG Guaranty, in Section 3.08(e) with respect to any AIG
Licensed Party or TRH Licensed Party, in Section 3.09(a) with respect to the
release of AIG's Affiliates for claims relating to certain insurance policies
and in Section 3.09(b) with respect to the reimbursement of Affiliates of AIG
for increased costs relating to certain insurance policy claims by TRH, in
Section 3.10(b) with respect to D&O Indemnified Persons, in Section 3.10(a) with
respect to AIG Designees, in Section 3.18 with respect to any AIG Signatory or
TRH Signatory, and in Article VIII with respect to AIG Indemnified Parties and
TRH Indemnified Parties, this Agreement is for the sole benefit of the parties
hereto and their successors and permitted assigns, and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
Person any legal or equitable right, benefit or remedy of any nature whatsoever
under or by reason of this Agreement.
Section 9.08. Amendment; Waiver. No provision of this Agreement may be
amended, supplemented or modified except by a written instrument signed by all
of the parties thereto. No provision of this Agreement may be waived except by a
written instrument signed by the party against whom the waiver is to be
effective. No failure or delay by any party hereto in exercising any right,
power or privilege hereunder shall operate as a waiver thereof 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.
48
Section 9.09. Governing Law; Submission to Jurisdiction; Waiver of
Jury Trial.
(a) This Agreement and all transactions contemplated by this
Agreement, including the arbitration provision of Section 3.04(d) relating to
any Dispute, and all claims and defenses arising out of or relating to any such
transaction or agreement or the formation, breach, termination or validity of
any such agreement, shall in all respects be governed by, and construed in
accordance with, the Laws of the State of Delaware without giving effect to any
conflicts of Law principles of such state that would apply to the Laws of
another jurisdiction.
(b) Each of AIG, AHAC and TRH irrevocably and unconditionally:
(i) submits for itself and its property to the exclusive jurisdiction
of the Delaware Court of Chancery, or if the Delaware Court of Chancery
lacks jurisdiction of the subject matter, the United States District Court
for the District of Delaware, or if both the Delaware Court of Chancery and
the United States District Court for the District of Delaware lack
jurisdiction of the subject matter, any court of competent jurisdiction
sitting in the State of Delaware, in any Action directly or indirectly
arising out of or relating to this Agreement, the transactions contemplated
by this Agreement, or the formation, breach, termination or validity of
this Agreement; and agrees that all claims in respect of any such Action
shall be heard and determined solely in such court;
(ii) consents that any such Action may and shall be brought in such
court and waives any objection that it may now or hereafter have to the
venue or jurisdiction of any such Action in such court or that such court
is an inconvenient forum for the Action and agrees not to assert, plead or
claim the same;
(iii) agrees that the final judgment of such court shall be
enforceable in any court having jurisdiction over the relevant party or any
of its assets;
(iv) irrevocably waives any right to remove any such Action from the
Delaware Court of Chancery to any federal court;
(v) agrees that service of process in any such Action may be effected
by mailing a copy of such process by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such party at its
address as provided in Section 9.02; and
(vi) agrees that nothing in this Agreement shall affect the right to
effect service of process in any other manner permitted by the applicable
rules of procedure.
(c) EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY
THAT MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND
DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE FORMATION,
BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT. EACH
49
OF AIG, AHAC AND TRH CERTIFIES AND ACKNOWLEDGES THAT (I) NO REPRESENTATIVE,
AGENT OR ATTORNEY OR ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, (II) EACH OF AIG, AHAC AND TRH UNDERSTANDS AND HAS CONSIDERED
THE IMPLICATIONS OF THIS WAIVER, (III) EACH OF AIG, AHAC AND TRH MAKES THIS
WAIVER VOLUNTARILY AND (IV) EACH OF AIG, AHAC AND TRH HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS OF THIS SECTION 9.09. AIG, AHAC OR TRH MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF THE PARTIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
Section 9.10. Rules of Construction. Interpretation of this Agreement
shall be governed by the following rules of construction: (a) words in the
singular shall be held to include the plural and vice versa, and words of one
gender shall be held to include the other gender as the context requires; (b)
references to the terms, Preamble, Recitals, Article, Section, paragraph, Annex,
Schedule and Exhibit are references to the Preamble, Recitals, Articles,
Sections, paragraphs, Annexes, Schedules and Exhibits to this Agreement unless
otherwise specified; (c) references to "$" shall mean U.S. dollars; (d) the word
"including" and words of similar import shall mean "including without
limitation," unless otherwise specified; (e) the word "or" shall not be
exclusive; (f) the words "herein," "hereof," "hereunder" or "hereby" and similar
terms, are to be deemed to refer to this Agreement as a whole and not to any
specific Section; (g) the headings are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement; (h) this
Agreement shall be construed without regard to any presumption or rule requiring
construction or interpretation against the party drafting or causing any
instrument to be drafted; (i) if a word or phrase is defined, the other
grammatical forms of such word or phrase have a corresponding meaning; (j)
references to any statute, listing rule, rule, standard, regulation or other law
include a reference to (A) the corresponding rules and regulations and (B) each
of them as amended, modified, supplemented, consolidated, replaced or rewritten
from time to time; and (k) references to any section of any statute, listing
rule, rule, standard, regulation or other law include any successor to such
section.
Section 9.11. Specific Performance. Subject to Section 3.08(g) and
Section 3.17(e), (a) the parties hereto agree that irreparable damage would
occur in the event that any of the provisions of this Agreement were not
performed in accordance with its specific terms or were otherwise breached, (b)
it is accordingly agreed, without the necessity of posting bond or other
undertaking, that the parties hereto shall be entitled to an injunction or
injunctions to prevent breaches of this Agreement and to enforce specifically
the terms and provisions of this Agreement in accordance with this Agreement,
this being in addition to any other remedy to which such party is entitled at
Law or in equity and (c) in the event that any Action is brought in equity to
enforce the provisions of this Agreement, no party hereto shall allege, and each
party hereto waives the defense or counterclaim that there is an adequate remedy
at Law.
Section 9.12. Counterparts. This Agreement may be executed in one or
more counterparts, and by the different parties to each such agreement in
separate counterparts, each of which when executed shall be deemed to be an
original but all of which taken together shall
50
constitute one and the same agreement. Delivery of an executed counterpart of a
signature page to this Agreement by facsimile shall be as effective as delivery
of a manually executed counterpart of this Agreement.
51
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the date first written above by their respective duly authorized
officers.
AMERICAN INTERNATIONAL GROUP, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: SPV-Divestiture
AMERICAN HOME ASSURANCE COMPANY
By /s/ ▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇▇▇
Title: Senior Vice President, CFO and
Treasurer
TRANSATLANTIC HOLDINGS, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chairman, President and CEO
[Signature Page to the Master Separation Agreement]
EXHIBIT A
DEFINITIONS
"AAA" shall have the meaning set forth in Section 3.04(d)(ii).
"Access Termination Date" means the date of the six-year anniversary
of the date of the First Time of Delivery, provided, however, that (i) in the
event that the Access Termination Date is within 3 years of the last quadrennial
insurance regulatory examination, such Access Termination Date shall be extended
with respect to any offices, properties, books, data (financial or otherwise),
files, information and records related to such examination until the date which
is three years from the date of such examination and (ii) with respect to tax
matters, such date shall be extended until the expiration of the applicable
statute of limitations, taking into account any extensions thereof.
"Action" means any claim, action, suit, arbitration or proceeding by
or before any Governmental Authority or arbitral body.
"Affected Master Lease" shall have the meaning set forth in Section
3.23(c).
"Affiliate" means, with respect to any specified Person, any other
Person that, at the time of determination, directly or indirectly through one or
more intermediaries, Controls, is Controlled by or is under common Control with
such specified Person. For purposes of this Agreement, (i) none of (A) the FRBNY
or the U.S. Department of the Treasury or their respective Representatives, (B)
the AIG Credit Facility Trust, (C) any insurance regulatory authority, (D) the
IRS or any other tax authority or (E) any other Person controlled by any of the
foregoing, or (F) TRH and the Company Subsidiaries shall be deemed Affiliates of
AIG and its Affiliates and (ii) AIG and its Affiliates shall not be deemed to be
Affiliates of TRH and the Company Subsidiaries.
"After-Tax Basis" means that, in determining the amount of the payment
necessary to indemnify any party against, or reimburse any party for, Losses,
the amount of such Losses shall be determined net of any tax benefit derived (or
reasonably expected to be derived) by the Indemnified Party (or any Affiliate
thereof) as the result of sustaining or paying such Losses (including as the
result of facts or circumstances due to which the Indemnified Party sustained or
paid such Losses). Such tax benefits shall be computed assuming that any such
tax benefits are fully utilized in the taxable period during which such Losses
are sustained or paid.
"Agreement" shall have the meaning set forth in the Preamble.
"AHAC" shall have the meaning set forth in the Preamble.
"AHAC Shares" shall have the meaning set forth in the Recitals.
"AIG" shall have the meaning set forth in the Preamble.
"AIG Auditors" shall have the meaning set forth in Section 3.15(a).
A-1
"AIG Beneficiary" shall have the meaning set forth in Section 3.18.
"AIG Credit Facility Trust" means AIG Credit Facility Trust
established by the FRBNY for the sole benefit of the United States Treasury
pursuant to the AIG Credit Facility Trust Agreement made on January 16, 2009 by
and among the FRBNY and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇.
"AIG Designee" shall have the meaning set forth in Section 3.10(a).
"AIG Disclosure Portions" means any portions of the Registration
Statement, the Prospectus or any other document or report filed with the SEC in
connection with the Offering, including any amendment or supplement thereto, to
the extent (but only to the extent) that such portions include information that
is (i) furnished in writing by AIG to TRH expressly for use therein and (ii) not
amended, supplemented or modified by TRH or any Company Subsidiary or any of
their respective Representatives; and shall include the information listed in
Schedule IV of the Underwriting Agreement (information furnished to TRH by AIG
and/or AHAC).
"AIG Guaranty" shall have the meaning set forth in Section 3.07(a).
"AIG Indemnified Parties" shall have the meaning set forth in Section
8.03(a).
"AIG Licensed Party" or "AIG Licensed Parties" shall have the meaning
set forth in Section 3.08(e).
"AIG Materials" shall have the meaning set forth in Section 3.08(c).
"AIG Names and Marks" shall have the meaning set forth in Section
3.08(a).
"AIG Releasee" shall have the meaning set forth in Section 3.06.
"AIG Shares" shall have the meaning set forth in the Recitals.
"AIG Signatory" shall have the meaning set forth in Section 3.18.
"AIG's Nonqualified Plans" shall have the meaning set forth in Section
3.11(f).
"AIG's Pension Plan" shall have the meaning set forth in Section
3.11(b)(i).
"AIG's Pension Plan Actuary" shall have the meaning set forth in
Section 3.11(b)(iii).
"AIG's UK Pension Plan" shall have the meaning set forth in Section
3.11(c)(i).
"Ancillary Agreements" means the Underwriting Agreement, the Rights
Agreement, the Transition Services Agreement, the Stockholders Agreement and the
Hold Harmless Agreement(s).
"Archived Files" shall have the meaning set forth in Section 3.13(b).
A-2
"Beneficial Ownership", "Beneficial Owner" and "Beneficially Own"
refer to ownership by any Person who, directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise, has or shares
(i) voting power which includes the power to vote, or to direct the voting of,
such security; and/or (ii) investment power which includes the power to dispose,
or to direct the disposition of, such security; and shall otherwise be
interpreted in accordance with the term "beneficial ownership" as defined in
Rule 13d-3 adopted by the SEC under the Exchange Act; provided that, for
purposes of determining Beneficial Ownership, a Person shall be deemed to be the
Beneficial Owner of any securities which may be acquired by such Person
(irrespective of whether the right to acquire such securities is exercisable
immediately or only after the passage of time, including the passage of time in
excess of 60 days, the satisfaction of any conditions, the occurrence of any
event or any combination of the foregoing) pursuant to any agreement,
arrangement or understanding or upon the exercise of conversion rights, exchange
rights, warrants or options, or otherwise.
"Benefit Plan" means all: (i) "employee benefit plans," as defined in
Section 3(3) of ERISA, and (ii) incentive, profit-sharing, stock option, stock
purchase, other equity-based, employment, consulting, compensation, vacation or
other leave, change in control, retention, supplemental retirement, severance,
health, medical, disability, life insurance, deferred compensation and other
employee compensation and benefit plans, programs and agreements, in each case
established or maintained by TRH, AIG or any of their respective Affiliates or
to which TRH, AIG or any of their respective Affiliates contributes or is
obligated to contribute, for the benefit of any Employees, except for any such
plans maintained in countries with less than fifteen (15) employees.
"Benefits Transition Date" shall have the meaning set forth in Section
3.11(a).
"Business" means the business conducted by TRH and the Company
Subsidiaries as of the date hereof.
"Business Day" means any day that is not a Saturday, a Sunday or other
day on which commercial banks in the City of New York, New York are required or
authorized by Law to remain closed.
"Capital Stock" means capital stock or other type of equity interest
in (as applicable) a Person.
"Change of Control" of a Person (the "COC Person") shall mean the
occurrence of one of the following events: (a) if any Person shall acquire
beneficial ownership of more than 50% of the voting securities of such COC
Person then issued and outstanding, (b) the consummation of a merger,
consolidation, binding share exchange or other business combination of such COC
Person into or with another Person in which the stockholders of such COC Person
immediately prior to the consummation of such transaction shall own less than
50% of the voting securities of the surviving person (or the parent of the
surviving person where the surviving person is wholly owned by the parent
person) immediately following the consummation of such transaction or (c) the
consummation of the sale, transfer, lease or other disposition (but not
including a transfer, lease or other disposition by pledge or mortgage to a bona
fide lender) of all or substantially all of the assets of such COC Person.
A-3
"Chicago Sublease" shall have the meaning set forth in Section
3.23(a).
"Closing" shall have the meaning set forth in the Recitals.
"Closing Date" shall mean 12:01 a.m., New York City time, on the date
of the Closing.
"Code" means the United States Internal Revenue Code of 1986.
"Commerce & Industry Insurance Company of Canada Savings Plan" shall
have the meaning set forth in Section 3.11(e).
"Common Stock" shall have the meaning set forth in the Recitals.
"Company Benefit Plans" shall mean those Benefit Plans that are
sponsored by TRH or any of the Company Subsidiaries.
"Company Subsidiaries" means the Subsidiaries of TRH.
"Confidential Information" shall have the meaning set forth in Section
3.17(a).
"Consent Deadline" shall have the meaning set forth in Section
3.23(c).
"Consolidated Period" means any financial reporting period or part
thereof for which TRH's financial results are consolidated with AIG's
consolidated financial results.
"Contract" means any contract, agreement, undertaking, indenture,
commitment, loan, consent, note or other legally binding obligation, whether
written or oral.
"Contributions" shall have the meaning set forth in Section 3.11(d).
"Control" means, as to any Person, the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise. The terms "Controlled
by", "under common Control with" and "Controlling" shall have correlative
meanings. For the purposes of this Agreement, AIG shall be deemed not to be
Controlled by any Person.
"Credit Agreement" shall have the meaning set forth in Section 3.20.
"Credit Card Program" means AIG's Citibank MasterCard and Visa
Corporate Credit Card Programs.
"Dispute" shall have the meaning set forth in Section 3.04(d).
"D&O Indemnified Person" shall have the meaning set forth in Section
3.10(b).
"Eligible Insurance Proceeds" shall have the meaning set forth in
Section 8.07(c).
"Employees" means (i) each person who as of the First Time of Delivery
is an active employee of TRH or any of the Company Subsidiaries and (ii) each
person who is an employee
A-4
of TRH or any of the Company Subsidiaries as of the First Time of Delivery who
is absent from employment due to illness, vacation, injury, military service or
other authorized absence (including an employee who is "disabled" within the
meaning of the short-term disability plan currently in place for TRH and the
Company Subsidiaries, or who is on approved leave under the Family and Medical
Leave Act). For purposes of Sections 3.11(b), (c), (e), (f) and (i), "Employees"
shall also mean each former employee of TRH or any of the Company Subsidiaries
(or any predecessors, as the context requires); provided, however, that on the
last day of the former employee's employment that was eligible for service
credit under any AIG benefit plan, such former employee was employed by TRH or
any of the Company Subsidiaries.
"Equity Period" means any financial reporting period or part thereof
for which AIG accounts or reasonably expects to account for its investment in
TRH using the equity method.
"ERISA" means the Employee Retirement Income Security Act of 1974.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Exit Date" shall have the meaning set forth in Section 3.23(c).
"finally determined" shall have the meaning set forth in Section 8.05.
"FINRA" means the Financial Industry Regulatory Authority or its
predecessor entities, the National Association of Securities Dealers, Inc. or
NYSE Regulation LLC, as applicable.
"First Time of Delivery" shall have the meaning set forth in the
Underwriting Agreement.
"FRBNY" means the Federal Reserve Bank of New York.
"FRBNY Liens" shall have the definition set forth in the definition of
"Permitted Liens".
"GAAP" means United States generally accepted accounting principles.
"Governmental Authority" means any domestic or foreign governmental,
legislative, judicial, administrative or regulatory authority, agency,
commission, body, court, association (including the NAIC) or entity.
"Governmental Order" means any order, writ, judgment, injunction,
decree or award entered by or with any Governmental Authority.
"Hold Harmless Agreement" shall have the meaning set forth in the
Recitals.
"Indemnified Party" shall have the meaning set forth in Section
8.04(a).
"Indemnifying Party" shall have the meaning set forth in Section
8.04(a).
"Independent Actuary" shall have the meaning set forth in Section
3.11(b)(iii).
A-5
"Insurance Agreement" means (a) any reinsurance or retrocession
Contracts between AIG or any of its Affiliates, on the one hand, and TRH or any
Company Subsidiary, on the other hand, (b) any insurance policies purchased or
obtained by TRH or any Company Subsidiary from AIG or any of its Affiliates,
which policy solely provides coverage to TRH or any Company Subsidiary, and (c)
any other Contracts entered into in connection with any insurance, reinsurance
or retrocession Contracts contemplated by clauses (a) or (b) of this definition.
"Insurance Contract" means any insurance policy, binder, slip or
contract or reinsurance treaty, contract, binder or slip issued by an Insurance
Subsidiary in connection with the Business.
"Insurance Subsidiary" means each Company Subsidiary that is an
insurance company.
"Intellectual Property" means: all intellectual property, whether
protected or arising under the laws of the United States or any other
jurisdiction, including the following: (a) patents, patent applications and
statutory invention registrations, including reissues, divisions, continuations,
continuations in part, renewals, extensions and reexaminations thereof, all
patents that may issue on such applications, documented unpatented invention
disclosures and all rights therein provided by international treaties or
conventions, (b) trademarks, service marks, trade dress, logos, Internet domain
names, any and all common law rights thereto, and registrations and applications
for registration thereof, all rights therein provided by international treaties
or conventions and all reissues, extensions and renewals of any of the foregoing
("Trademarks"), (c) copyrightable works, copyrights, whether or not registered,
and registrations and applications for registration thereof, and all rights
therein provided by international treaties or conventions and (d) proprietary
information, including trade secrets, processes and know-how.
"Intercompany Agreements" shall have the meaning set forth in Section
3.05.
"IRS" means the U.S. Internal Revenue Service.
"Knowledge" of a Person means in the case of TRH, the actual knowledge
of any Person listed on Annex I, subject to the subject matter limitations set
forth in such schedule.
"Landlord" shall have the meaning set forth in Section 3.23(c).
"Law" means any federal, state, local or foreign law, statute or
ordinance, or any rule, regulation, judgment, order, writ, injunction, ruling,
decree or agency requirement of any Governmental Authority.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
security interest, encumbrance, lien or charge of any kind.
"Litigation Hold" means the scope of documents and records whose
preservation is mandated by a document retention notice issued in connection
with any litigation, arbitration, mediation (or other form of dispute
resolution), third-party subpoena or regulatory inquiry.
"Losses" means any and all losses, damages, reasonable costs,
reasonable expenses, liabilities, settlement payments, awards, judgments, fines,
obligations, claims and deficiencies of any kind.
A-6
"Master Lease" shall have the meaning set forth in Section 3.23(c).
"NAIC" means the National Association of Insurance Commissioners.
"New York Sublease" shall have the meaning set forth in Section
3.23(a).
"Notice of Dispute" shall have the meaning set forth in Section
3.04(d)(i).
"Notice of Insurance" shall have the meaning set forth in Section
8.07(c).
"Offering" shall have the meaning set forth in the Recitals.
"Ordinary Course of Business" with respect to a Person means the
ordinary course of business of such Person, consistent with past practice,
subject to such changes by such Person and/or its Affiliates as are reasonably
necessary in light of the then current operating conditions and developments
with respect to such Person and/or its Affiliates.
"Organizational Documents" means, with respect to any corporation, its
articles or certificate of incorporation and by-laws and, with respect to any
other type of entity, its organizational documents.
"Pension Calculation Notice" shall have the definition set forth in
Section 3.11(b)(iii).
"Pension Plan Participants" shall have the meaning set forth in
Section 3.11(b)(i).
"Pension Plan Transfer Amount" shall have the meaning set forth in
Section 3.11(b)(ii).
"Pension Plan Transfer Date" shall have the meaning set forth in
Section 3.11(b)(v).
"Permitted Liens" means the following Liens: (a) Liens that secure
debt that is reflected on the Reference Balance Sheet; (b) Liens for taxes,
assessments or other governmental charges or levies that are not yet due or
payable or that are being contested in good faith by appropriate proceedings;
(c) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics,
materialmen, repairmen and other Liens imposed by Law for amounts not yet due;
(d) Liens incurred or deposits made to a Governmental Authority in connection
with a governmental authorization, registration, filing, license, permit or
approval; (e) Liens incurred or deposits made in the Ordinary Course of Business
in connection with workers' compensation, unemployment insurance or other types
of social security; (f) defects of title, easements, rights-of-way, covenants,
restrictions and other similar charges or encumbrances not materially
interfering with the ordinary conduct of business or which are shown by a
current title report or other similar report or listing previously provided or
made available to TRH or any Company Subsidiary; (g) Liens not created by TRH or
any of the Company Subsidiaries that affect the underlying fee interest of any
leased real property of TRH and the Company Subsidiaries; (h) Liens incurred in
the Ordinary Course of Business securing obligations or liabilities that are not
individually or in the aggregate material to the relevant asset or property,
respectively; (i) gaps in the chain of title evident from the records of the
relevant Governmental Authority maintaining such records; (j) all licenses,
agreements, settlements, consents, covenants not to assert and other
arrangements entered into in the Ordinary Course of Business; (k) zoning,
building and other generally
A-7
applicable land use restrictions; (l) Liens that have been placed by a third
party on the fee title of the real property constituting the leased real
property or real property over which TRH or any of the Company Subsidiaries have
easement rights; (m) any set of facts an accurate up-to-date survey would show;
provided, however, that such facts do not materially interfere with the present
use of the relevant owned real property or leased real property by TRH or the
Company Subsidiaries, respectively; (n) leases or similar agreements affecting
the owned real properties of TRH or the Company Subsidiaries, provided that such
leases and agreements have been provided or made available to AIG or any of its
Affiliates; (o) Liens or other restrictions on transfer imposed by applicable
insurance Laws; (p) pledges or other collateral assignments of assets, including
by means of a credit for reinsurance trust, to or for the benefit of cedents
under reinsurance written by an Insurance Subsidiary, for purposes of statutory
accounting credit; (q) Liens granted under securities lending and borrowing
agreements, repurchase and reverse repurchase agreements and derivatives entered
into in the Ordinary Course of Business; (r) clearing and settlement Liens on
securities and other investment properties incurred in the ordinary course of
clearing and settlement transactions in such securities and other investment
properties and holding of legal title or other interests in securities or other
investment properties by custodians or depositories in the Ordinary Course of
Business; and (s) any Liens created by (x) the Guarantee and Pledge Agreement,
dated as of September 22, 2008 (as may be amended, modified, or supplemented
from time to time), between AIG and the FRBNY, (y) the Credit Agreement, dated
as of September 22, 2008 (as may be amended, modified or supplemented from time
to time), between AIG and the FRBNY or (z) any other Contract with, or entered
into at the direction of, the FRBNY or the U.S. Department of the Treasury (the
foregoing (x), (y) and (z) collectively, the "FRBNY Liens").
"Person" means any natural person, general or limited partnership,
corporation, limited liability company, limited liability partnership, firm,
association or organization or other legal entity.
"Post-Closing Covenants" shall have the meaning set forth in Section
8.01.
"Post-Closing Invoice" shall have the meaning set forth in Section
3.04(b).
"Pre-Closing Covenants" shall have the meaning set forth in Section
8.01.
"Prospectus" means the prospectus (including any preliminary
prospectus and any final prospectus) included in the Registration Statement, as
amended or supplemented by any free writing prospectus, whether or not required
to be filed with the SEC, prospectus supplement with respect to the terms of the
Offering of any portion of the Shares covered by the Registration Statement and
by all other amendments and supplements to the prospectus, and all material
incorporated by reference in such prospectus.
"Reference Balance Sheet" means the unaudited consolidated balance
sheet of TRH and the Company Subsidiaries as of March 31, 2009.
"Registration Statement" shall have the meaning set forth in the
Recitals.
"Rejected Sublease" shall have the meaning set forth in Section
3.23(b).
A-8
"Rejected Subleased Premises" shall have the meaning set forth in
Section 3.23(c).
"Related Documents" means with respect to the TRH Notes (i) the
Indenture, dated December 14, 2005, between TRH and The Bank of New York, (ii)
the First Supplemental Indenture, dated December 14, 2005, between TRH and The
Bank of New York, (iii) the Registration Rights Agreement, dated February 2,
2006, among AIG, certain of its Affiliates and TRH, (iv) the Letter Agreement
among AIG, certain of its Affiliates and TRH, (v) all other instruments,
agreements and other documents executed and delivered in connection therewith
that are material thereto and in effect, and (vi) any amendments, supplements,
waivers or other modifications to any of the foregoing.
"Reporting Period" means any Consolidated Period or any Equity Period.
"Representative" of a Person means the directors, officers, employees,
advisers, agents, consultants, accountants, investment bankers or other
representatives of such Person and of such Person's Affiliates.
"Restated Certificate of Incorporation of TRH" shall mean the Restated
Certificate of Incorporation of TRH attached hereto as Exhibit H.
"Rights Agreement" shall have the meaning set forth in the Recitals.
"Schedule 3.18 Contracts" shall have the meaning set forth in Section
3.18.
"SEC" shall have the meaning set forth in the Recitals.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Self-Regulatory Organization" means FINRA or any other association,
commission, board or agency that is not a Governmental Authority but is charged
with the supervision or regulation of brokers, dealers, securities underwriting
or trading, stock exchanges, commodities exchanges, insurance companies or
agents, investment companies, or investment advisers or to the jurisdiction of
which the TRH or the Company Subsidiaries is otherwise subject.
"Self-Regulatory Organization Approval" means any consent, approval,
license, permit, order, qualification or authorization of, or registration with
or other action by, or any filing with or notification to, any Self-Regulatory
Organization.
"Shares" shall have the meaning set forth in the Recitals.
"Special Contribution" shall have the meaning set forth in Section
3.11(c)(iv).
"Stockholders Agreement" shall have the meaning set forth in the
Recitals.
"Sublease" or "Subleases" shall have the meaning set forth in Section
3.23(a).
"Subleased Premises" shall have the meaning set forth in Section
3.23(c).
A-9
"Subsidiary" of any Person means any corporation, general or limited
partnership, joint venture, limited liability company, limited liability
partnership or other Person that is a legal entity, trust or estate of which (or
in which) (a) the issued and outstanding Capital Stock having ordinary voting
power to elect a majority of the board of directors (or a majority of another
body performing similar functions) of such corporation or other Person
(irrespective of whether at the time Capital Stock of any other class or classes
of such corporation or other Person shall or might have voting power upon the
occurrence of any contingency), (b) more than 50% of the interest in the capital
or profits of such partnership, joint venture or limited liability company or
(c) more than 50% of the beneficial interest in such trust or estate, is at the
time of determination directly or indirectly Beneficially Owned or Controlled by
such Person.
"Tax" or "Taxes" means all income, excise, gross receipts, premium, ad
valorem, sales, use, employment, franchise, profits, gains, property, transfer,
payroll, stamp taxes or other taxes, (whether payable directly or by
withholding) imposed by any United States (or any of its political subdivisions)
Tax Authority and any material tax imposed by a Tax Authority (other than the
United States or any of its political subdivisions), together with any interest
and any penalties thereon or additional amounts with respect thereto.
"Tax Authority" means any Governmental Authority having jurisdiction
over the assessment, determination, collection, or imposition of any Tax.
"Third Party Claim" shall have the meaning set forth in Section
8.04(a).
"Toronto Sublease" shall have the meaning set forth in Section
3.23(a).
"Trademarks" shall have the meaning set forth in the definition of
"Intellectual Property."
"Transaction Agreements" means, collectively, this Agreement and the
Ancillary Agreements.
"Transition Services Agreement" shall have the meaning set forth in
the Recitals.
"TRH" shall have the meaning set forth in the Preamble.
"TRH Auditors" shall have the meaning set forth in Section 3.15(a).
"TRH Beneficiary" shall have the meaning set forth in Section 3.18.
"TRH Employer" shall have the meaning set forth in Section 3.11(c)(i).
"TRH Indemnified Parties" shall have the meaning set forth in Section
8.02(a).
"TRH Licensed Party" or "TRH Licensed Parties" shall have the meaning
set forth in Section 3.08(e).
"TRH Materials" shall have the meaning set forth in Section 3.08(f).
"TRH Names and Marks" shall have the meaning set forth in Section
3.08(a).
A-10
"TRH Notes" means the 5.75% Senior Notes of TRH due December 14, 2015.
"TRH Pension Reimbursement Amount" shall have the meaning set forth in
Section 3.11(d).
"TRH Proportionate Share" shall have the meaning set forth in Section
3.11(d).
"TRH Releasee" shall have the meaning set forth in Section 3.06.
"TRH Signatory" shall have the meaning set forth in Section 3.18.
"TRH's Pension Plan" shall have the meaning set forth in Section
3.11(b)(i).
"TRH's Pension Plan Actuary" shall have the meaning set forth in
Section 3.11(b)(iii).
"UK Pension Plan Member" shall have the meaning set forth in Section
3.11(c)(i).
"Underwriter(s)" shall have the meaning set forth in the Underwriting
Agreement.
"Underwriting Agreement" shall have the meaning set forth in the
Recitals; provided that AIG shall have the right, in its sole discretion, to
designate which firms shall be the Underwriter(s), and which firms shall be the
bookrunners and the co-managers of the Offering.
"Underwriting Agreement Effective Time" shall mean the time that the
Underwriting Agreement is fully executed by AIG, AHAC, TRH and the
representatives of the Underwriter(s).
A-11
EXHIBIT B
FORM OF UNDERWRITING AGREEMENT
See Attached.
B-1
TRANSATLANTIC HOLDINGS, INC.
_________ SHARES OF COMMON STOCK
----------
FORM OF UNDERWRITING AGREEMENT
[__,] 2009
▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co.,
▇.▇. ▇▇▇▇▇▇ Securities Inc.
As Representatives of the several Underwriters
named in Schedule I(a) hereto,
c/o Goldman, ▇▇▇▇▇ & Co.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
American International Group, Inc., a Delaware corporation, and its
wholly owned subsidiary, American Home Assurance Company, a New York
insurance corporation (the "SELLING STOCKHOLDERS"), each a stockholder of
Transatlantic Holdings, Inc., a Delaware corporation (the "COMPANY"),
propose, subject to the terms and conditions stated herein, to sell to the
Underwriters named in Schedule I(a) hereto (the "Underwriters") an
aggregate of __________ shares (the "FIRM SHARES") and, at the election of
the Underwriters, up to __________ additional shares (the "OPTIONAL
SHARES") of common stock, par value $1.00 per share, of the Company (the
"STOCK") . The Firm Shares and the Optional Shares that the Underwriters
elect to purchase pursuant to Section 3 hereof are herein collectively
called the "SHARES".
1. Representations, Warranties and Agreements of the Company. The
Company represents, warrants to and agrees with, the Underwriters that:
(a) The Company has, not earlier than three years prior to the
date hereof, filed with the Securities and Exchange Commission (the
"COMMISSION") an automatic shelf registration statement as defined under
Rule 405 under the Securities Act of 1933, as amended (the "SECURITIES
ACT", which term, as used herein, includes the rules and regulations of the
Commission promulgated thereunder) on Form S-3 (No. 333-155811), including
the related prospectus, which registration statement, and any post
effective amendment thereto, became effective upon filing under Rule 462(e)
of the Securities Act, for the registration under the Securities Act of the
Shares. No stop order suspending the effectiveness of the registration
statement has been issued under the Securities Act and no proceedings for
that purpose have been instituted or are pending or, to the knowledge of
the Company, are contemplated by the Commission, no notice of objection of
the Commission to the use of such registration statement or any
post-effective amendment thereto pursuant to Rule 401(g)(2) under the
Securities Act has been received by the Company and any request on the part
of the Commission for additional information has been complied with.
1
(b) The Company will file with the Commission pursuant to Rule
430B ("RULE 430B") and paragraph (b) of Rule 424 ("RULE 424(B)") under the
Securities Act a supplement or supplements to the prospectus included in
such registration statement relating to the Shares and the plan of
distribution thereof. Such registration statement, at any given time,
including the amendments thereto at such time, all exhibits thereto and any
schedules thereto at such time, and the documents otherwise deemed to be a
part thereof or included therein under the Securities Act, is hereinafter
called the "REGISTRATION STATEMENT"; such prospectus in the form in which
it appears in the Registration Statement is hereinafter called the "BASE
PROSPECTUS"; and such supplemented prospectus, in the form in which it
shall first be filed with the Commission pursuant to Rule 424(b) (including
the Base Prospectus as so supplemented), after the date and time that this
Agreement is executed and delivered, is hereinafter called the "FINAL
PROSPECTUS." The Registration Statement at the time it originally became
effective is hereinafter called the "ORIGINAL REGISTRATION STATEMENT." Any
information included in the Final Prospectus that was omitted from the
Original Registration Statement but that is deemed to be part of and
included in such Registration Statement pursuant to Rule 430B is referred
to as "RULE 430B INFORMATION". Each prospectus used in connection with the
offering of the Shares that omitted Rule 430B Information is hereinafter
called a "PRELIMINARY PROSPECTUS" and the Base Prospectus, as amended and
supplemented immediately prior to the Applicable Time (as defined in
Section 1(f) hereof), is hereinafter called the "PRICING PROSPECTUS." Any
reference herein to the Registration Statement, the Base Prospectus, any
Preliminary Prospectus, the Pricing Prospectus or the Final Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to Item 12 of Form S-3 which were filed under
the Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT", which
term, as used herein, includes the rules and regulations of the Commission
promulgated thereunder) or otherwise deemed under the Securities Act to be
a part of or included therein; and any reference herein to the terms
"amend," "amendment" or "supplement" with respect to the Registration
Statement, the Base Prospectus, any Preliminary Prospectus or the Final
Prospectus shall be deemed to refer to and include any document filed under
the Exchange Act after the date of this Agreement, or the issue date of the
Base Prospectus, any Preliminary Prospectus or the Final Prospectus, as the
case may be, deemed to be incorporated therein by reference or otherwise
deemed under the Securities Act to be a part of or included therein. Each
Preliminary Prospectus and the prospectuses filed as part of the
Registration Statement as originally filed or as part of any amendment
thereto, or filed pursuant to Rule 424(b) under the Securities Act,
complied when so filed in all material respects with the Securities Act and
each Preliminary Prospectus and the Final Prospectus delivered to the
Underwriters for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission via the
Electronic Data Gathering, Analysis and Retrieval ("▇▇▇▇▇") system, except
to the extent permitted by Regulation S-T.
(c) (A)(i) At the time of filing the Original Registration
Statement, (ii) at the time of the most recent amendment thereto for the
purposes of complying with Section 10(a)(3) of the Securities Act (whether
such amendment was by post-effective amendment, incorporated report filed
pursuant to Section 13 or 15(d) of the Exchange Act or form of prospectus),
and (iii) at the time the Company or any person acting on its behalf
(within the meaning, for this clause only, of Rule 163(c) under the
Securities Act) made any offer relating
2
to the Shares in reliance on the exemption of Rule 163 under the Securities
Act, the Company was a "well-known seasoned issuer" as defined in Rule 405
under the Securities Act; and (B) at the earliest time after the filing of
the Registration Statement that the Company or another offering participant
made a bona fide offer (within the meaning of Rule 164(h)(2) under the
Securities Act) of the Shares, the Company was not an "ineligible issuer"
as defined in Rule 405 under the Securities Act.
(d) The Registration Statement conforms, and the Final Prospectus
and any further amendments or supplements to the Registration Statement and
the Final Prospectus will conform, in all material respects to the
requirements of the Securities Act and the rules and regulations of the
Commission thereunder.
(e) (i) The Registration Statement and any post-effective
amendment thereto do not and will not, as of the applicable effective date
as to each part of the Registration Statement and as of the applicable
filing date as to any amendment or supplement thereto, as of the date such
amendment becomes effective or such supplement is filed with the
Commission, as the case may be, contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (ii) the Final
Prospectus, as of its date, and any amendment or supplement thereto, as of
the applicable filing date, does not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, however, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing to
the Company by an Underwriter through the Representatives expressly for use
therein.
(f) No order preventing or suspending the use of any Preliminary
Prospectus or any Issuer Represented Free Writing Prospectus (as defined in
Rule 433 under the Securities Act and referred to herein as "ISSUER FREE
WRITING PROSPECTUS") has been issued by the Commission, and each
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Securities Act and the rules
and regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
the Representatives expressly for use therein.
(g) For the purposes of this Agreement, the "APPLICABLE TIME" is
___:___ __m (Eastern time) on the date of this Agreement, and the "GENERAL
DISCLOSURE PACKAGE" means (i) the Pricing Prospectus as of the Applicable
Time, (ii) the information included in Schedule II(c) hereto and (iii) the
Issuer Free Writing Prospectuses, if any, listed on Schedule II(a) hereto.
The General Disclosure Package, as of the Applicable Time, did not include
any untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided however,
that this representation and warranty shall not apply to statements or
omissions made in reliance upon and in conformity with the information
3
furnished in writing to the Company by an Underwriter through the
Representatives expressly for use therein.
(h) Each Issuer Free Writing Prospectus listed on Schedule II(a)
hereto does not conflict with the information contained in the Registration
Statement, the Pricing Prospectus or the Final Prospectus; and each such
Issuer Free Writing Prospectus, as supplemented by and taken together with
the Pricing Prospectus as of the Applicable Time did not include any untrue
statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided, however, that this
representation and warranty shall not apply to statements or omissions made
in reliance upon and in conformity with information furnished in writing to
the Company by an Underwriter through the Representatives expressly for use
therein
(i) Each document incorporated or deemed to be incorporated by
reference in the Registration Statement, the General Disclosure Package and
the Final Prospectus, at the time they were or hereafter are filed with the
Commission, complied and will comply in all material respects with the
Securities Act or the Exchange Act, as applicable, and, when read together
with the other information in the General Disclosure Package and the Final
Prospectus, at the Applicable Time and at each Time of Delivery (as
hereinafter defined) did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided, however, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by an Underwriter through
the Representatives expressly for use therein; and no such documents were
filed with the Commission since the Commission's close of business on the
business day immediately prior to the date of this Agreement and prior to
the execution of this Agreement, except as set forth on Schedule II(b)
hereto; there are no contracts or documents which are required to be
described in the Registration Statement, the General Disclosure Package,
the Final Prospectus or the documents incorporated by reference therein or
to be filed as exhibits thereto which have not been so described and filed
as required.
(j) Each of the Company and its operating subsidiaries has been
duly organized and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation and has corporate
power and authority to own, lease and operate its properties and to conduct
its business as described in the General Disclosure Package and the Final
Prospectus. Each of the Company and its subsidiaries is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business, except for
such jurisdictions where the failure to so qualify or to be in good
standing would not, individually or in the aggregate, have a Material
Adverse Effect (as defined in Section 1(m) below). All of the issued and
outstanding capital stock of each subsidiary has been duly authorized and
validly issued, is fully paid and non-assessable and is owned by the
Company, directly or through subsidiaries, free and clear of any security
interest, mortgage, pledge, lien, encumbrance or claim.
4
(k) The Company has all requisite corporate power and authority
to execute and deliver this Agreement and perform its obligations
hereunder; this Agreement has been duly authorized, executed and delivered
by the Company.
(l) The Company has an authorized capitalization as set forth in
the General Disclosure Package and Final Prospectus and all of the issued
shares of capital stock of the Company have been duly and validly
authorized and issued and are fully paid and non-assessable and conform in
all material respects to the description of the Stock contained in the
General Disclosure Package and Final Prospectus. Except as disclosed in the
General Disclosure Package and Final Prospectus, there are no contracts,
agreements or understandings between the Company and any person granting
such person the right to require the Company to include any such securities
in the securities registered pursuant to a Registration Statement or in any
securities being registered pursuant to any other registration statement
filed by the Company under the Securities Act. The Shares are listed on the
New York Stock Exchange.
(m) The separation agreement between the Company and the Selling
Stockholders (the "MASTER SEPARATION AGREEMENT") has been duly authorized,
executed and delivered by the Company, and, assuming due authorization,
execution and delivery by each Selling Stockholder, constitutes a valid,
legal, and binding obligation of the Company, enforceable against the
Company in accordance with its terms, as such enforceability may be limited
by bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to of affecting
creditors rights and to general principles of equity provided that no
representation is made with respect to enforceability of sections of the
Master Separation Agreement providing for indemnification. The Company has
full power and authority to enter into the Master Separation Agreement and
to consummate the transactions contemplated thereby.
(n) Except as disclosed in the General Disclosure Package and
Final Prospectus, the execution, delivery and performance of this Agreement
and the Master Separation Agreement and the consummation of the
transactions contemplated hereby do not and will not, whether with or
without the giving of notice or passage of time or both, conflict with or
constitute a breach of any of the terms or provisions of, or constitute a
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any subsidiary pursuant to any indenture,
mortgage, deed of trust, loan or credit agreement, note, contract,
franchise, lease or other agreement or instrument to which the Company or
any of its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject (including without limitation
the Credit Agreement dated as of September 22, 2008 between AIG and the
Federal Reserve Bank of New York and the related Guarantee and Pledge
Agreement (the "FED CREDIT AGREEMENT")), except for such conflicts,
breaches, violations or defaults as would not, either individually or in
the aggregate, have a material adverse effect on the consolidated financial
position, stockholders' equity, results of operations or business of the
Company and its subsidiaries taken as a whole (such effect, a "MATERIAL
ADVERSE EFFECT"); nor will such action result in any violation of (i) any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or any regulatory authority
or court, domestic or foreign, having jurisdiction over the Company or any
of its
5
subsidiaries or any of their assets, properties or operations (except for
such violations that would not result in a Material Adverse Effect) or (ii)
the provisions of the charter or bylaws of the Company or any of its
subsidiaries. As used herein, a "REPAYMENT EVENT" means any event or
condition that gives the holder of any note, debenture or other evidence of
indebtedness of the Company or any of its subsidiaries (or any person
acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any of its subsidiaries.
(o) Neither the Company nor any of its subsidiaries is (i) in
violation of its charter or by-laws or (ii) in default (or, with the giving
of notice or lapse of time, would be in default) under any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries may be bound, or to which any of the
property or assets of the Company or any of its subsidiaries is subject
(including without limitation the Fed Credit Agreement), except, in the
case of (ii) (y) as disclosed in the General Disclosure Package and Final
Prospectus and (z) for such defaults as would not, individually or in the
aggregate, have a Material Adverse Effect.
(p) Except as disclosed in the General Disclosure Package and
Final Prospectus and except as have already been obtained or may be
required under the Securities Act or state securities or "blue sky" laws,
no consent, approval, authorization or order of, or filing or registration
with, any court or governmental agency or body or any regulatory authority
is required for the execution, delivery and performance of this Agreement
and the Master Separation Agreement by the Company, and the consummation of
the transactions contemplated hereby and thereby.
(q) The Company is not, and after giving effect to the offering
and sale of the Shares as described in the General Disclosure Package and
the Final Prospectus will not be, required to register as an "investment
company" as such term is defined in the Investment Company Act of 1940, as
amended.
(r) Each of the Company's subsidiaries that is engaged in the
business of insurance or reinsurance (each an "INSURANCE SUBSIDIARY",
collectively the "INSURANCE SUBSIDIARIES") is duly licensed to conduct an
insurance or a reinsurance business, as the case may be, under the
insurance statutes of each jurisdiction in which the conduct of its
business requires such licensing, except for such jurisdictions in which
the failure of the Insurance Subsidiaries to be so licensed would not,
individually or in the aggregate, result in a Material Adverse Effect. The
Insurance Subsidiaries have made all required filings under applicable
insurance statutes in each jurisdiction where such filings are required,
except for such jurisdictions in which the failure to make such filings
would not, individually or in the aggregate, result in a Material Adverse
Effect. Each of the Insurance Subsidiaries has all other necessary
authorizations, approvals, orders, consents, certificates, permits,
registrations and qualifications of and from all domestic and foreign
insurance regulatory authorities necessary to conduct their respective
businesses as described in the General Disclosure Package and the Final
Prospectus, except where the failure to have such authorizations,
approvals, orders, consents, certificates, permits, registrations or
qualifications would not, individually or in the aggregate, result in a
Material Adverse Effect, and none of the Company or its Insurance
6
Subsidiaries has received any notification from any insurance regulatory
authority to the effect that any additional authorization, approval, order,
consent, certificate, permit, registration or qualification is needed to be
obtained by the Company or any of its Insurance Subsidiaries in any case
where it could be reasonably expected that (x) the Company or any of its
Insurance Subsidiaries would be required either to obtain such additional
authorization, approval, order, consent, certificate, permit, registration
or qualification or to cease or otherwise limit the writing of certain
business and (y) the failure to obtain such additional authorization,
approval, order, consent, certificate, permit, registration or
qualification or the limiting of the writing of such business would result
in a Material Adverse Effect. No insurance regulatory authority having
jurisdiction over the Company or any of its Insurance Subsidiaries has (i)
except as disclosed in the General Disclosure Package and the Final
Prospectus, or as would not have a Material Adverse Effect, issued any
order or decree impairing, restricting or prohibiting the continuation of
the business of the Company or any of the Insurance Subsidiaries in all
material respects as presently conducted or (ii) except as disclosed in the
General Disclosure Package and the Final Prospectus, issued any order or
decree impairing, restricting or prohibiting the payment of dividends by
any Insurance Subsidiary to its parent.
(s) Except as disclosed in the General Disclosure Package and the
Final Prospectus, all reinsurance treaties and arrangements to which the
Insurance Subsidiaries are a party are in full force and effect, and none
of the Insurance Subsidiaries is in violation of, or in default in the
performance, observance or fulfillment of, any obligation, agreement,
covenant or condition contained therein, except to the extent that any such
failure to be in full force and effect or any such violation or default
would not have a Material Adverse Effect. Neither the Company nor any of
the Insurance Subsidiaries has received any notice from any of the other
parties to such agreements that such other party intends not to perform in
any material respect such agreement and none of the Company and such
Insurance Subsidiaries has any reason to believe that any of the other
parties to such agreements will be unable to perform such agreements,
except to the extent that (i) the Company or such subsidiary has
established appropriate reserves on its financial statements or (ii) such
nonperformance would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; and neither the Company nor
its Insurance Subsidiaries has given effect to such agreements in its
underwriting results in its most recently filed statutory financial
statements unless such agreements were in material conformity with the
requirements therefor of the insurance department of the state of domicile
of each such subsidiary in effect at such time of preparation for
reinsurance ceded pursuant to such agreements or giving effect to such
agreements is otherwise permitted by applicable accounting or regulatory
standards.
(t) Except as disclosed in the General Disclosure Package and the
Final Prospectus, there are no legal or governmental proceedings pending to
which the Company or any of its subsidiaries is a party or of which any
property or assets of the Company or any of its subsidiaries is the subject
which, singularly or in the aggregate, would be reasonably likely to have a
Material Adverse Effect, and to the best knowledge of the Company, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others, except as would not, singly or in the aggregate, be
reasonably likely to have a Material Adverse Effect.
7
(u) Neither the Company, nor to its knowledge, any of its
affiliates (as defined in Rule 501(b) of Regulation D under the Securities
Act, but excluding AIG and its affiliates other than the Company and its
subsidiaries) ("AFFILIATES"), has taken, directly or indirectly, any action
designed to cause or result in, or which has constituted or which might
reasonably be expected to constitute, the stabilization or manipulation of
the price of any security of the Company to facilitate the sale or resale
of the Shares; provided, however, that no such representation is made as to
the Underwriters or any person acting on their behalf.
(v) The consolidated financial statements of the Company included
in the Registration Statement, the General Disclosure Package and the Final
Prospectus fairly present in all material respects the financial condition
of the Company and its consolidated subsidiaries as of the respective dates
indicated and the consolidated results of operations and changes in
stockholders' equity of the Company and its consolidated subsidiaries for
the periods specified, in each case in all material respects in conformity
with generally accepted accounting principles as applied in the United
States ("GAAP") applied on a consistent basis throughout the periods
involved (except as indicated in the notes thereto). The summary and
selected historical financial data of the Company included in the General
Disclosure Package and the Final Prospectus fairly present in all material
respects the information shown therein and have been compiled on a basis
consistent with that of the consolidated interim or audited financial
statements of the Company included in the General Disclosure Package and
the Final Prospectus.
(w) The statutory annual and quarterly statements of the
Insurance Subsidiaries and the statutory balance sheets and income
statements included in such statutory annual and quarterly statements, most
recently filed with the State of New York, have been prepared in conformity
with required or permitted or prescribed statutory accounting principles or
practices applied on a consistent basis, except as may otherwise be
indicated in the notes thereto, and present fairly the financial position
of the Insurance Subsidiaries (on a statutory basis) for the period covered
thereby.
(x) Neither the Company nor any of its subsidiaries has sustained
since the date of the latest audited financial statements included in the
Final Prospectus and the General Disclosure Package any material loss or
interference with its business material to the Company and its subsidiaries
considered as a whole, otherwise than as set forth or contemplated in the
General Disclosure Package and the Final Prospectus; and, since the date as
of which information is given in the Final Prospectus and except as
contemplated in the General Disclosure Package and the Final Prospectus,
there has not been (x) any material addition, or any development involving
a prospective material addition, to the Company's consolidated reserves for
losses and loss adjustment expense, (y) any change in the authorized
capital stock of the Company or any of its subsidiaries or any increase in
the consolidated short-term or long-term debt of the Company or (z) any
Material Adverse Effect.
(y) PriceWaterhouseCoopers LLP, who have certified certain
financial statements of the Company and its subsidiaries, and have audited
the Company's internal control over financial reporting and management's
assessment thereof are independent public accountants as required by the
Securities Act and the rules and regulations of the Commission thereunder.
8
(z) Neither the Company nor, to the knowledge of the Company, any
director, officer, agent, employee, affiliate or other person acting on
behalf of the Company or any of its subsidiaries is aware of or has taken
any action, directly or indirectly, that would result in a violation by
such persons of the Foreign Corrupt Practices Act of 1977, as amended, and
the rules and regulations thereunder (the "FCPA"), including, without
limitation, making use of the mails or any means or instrumentality of
interstate commerce corruptly in furtherance of an offer, payment, promise
to pay or authorization of the payment of any money, or other property,
gift, promise to give, or authorization of the giving of anything of value
to any "foreign official" (as such term is defined in the FCPA) or any
foreign political party or official thereof or any candidate for foreign
political office, in contravention of the FCPA and the Company and, to the
knowledge of the Company, its affiliates have conducted their businesses in
compliance with the FCPA and have instituted and maintain policies and
procedures designed to ensure, and which are reasonably expected to
continue to ensure, continued compliance therewith.
(aa) Since May 12, 2009, (i) no downgrading has occurred in the
rating accorded the insurer and insurance financial strength of the Company
or any Insurance Subsidiary by any "nationally recognized statistical
rating organization", as that term is defined by the Commission for
purposes of Rule 436(g)(2) of the Securities Act and (ii) no such rating
organization has made an initial public announcement that it has under
surveillance or review, with possible negative implications, its rating of
the insurer and insurance financial strength of the Company or any of its
Insurance Subsidiaries.
(bb) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable assurances
that (i) transactions are executed in accordance with management's general
or specific authorization; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with GAAP and to
maintain accountability for assets; (iii) access to assets is permitted
only in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with respect
to any differences. Except as described in the General Disclosure Package
and the Final Prospectus, since the end of the Company's most recent
audited fiscal year, there has been (i) no material weakness in the
Company's internal control over financial reporting (whether or not
remediated) and (ii) no change in the Company's internal control over
financial reporting that has materially affected, or is reasonably likely
to materially affect, the Company's internal control over financial
reporting.
(cc) The Company and its consolidated subsidiaries employ
disclosure controls and procedures that are designed to ensure that
information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission's rules
and forms, and is accumulated and communicated to the Company's management,
including its principal executive officer or officers and principal
financial officer or officers, as appropriate, to allow timely decisions
regarding disclosure.
(dd) There is and has been no failure on the part of the Company
or any of the Company's directors or officers, in their capacities as such,
to comply in all material respects
9
with any provision of the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and
regulations promulgated in connection therewith (the "▇▇▇▇▇▇▇▇-▇▇▇▇▇ ACT"),
including Section 402 related to loans and Sections 302 and 906 related to
certifications.
(ee) The statements made in the Pricing Prospectus and the Final
Prospectus under the captions "Description of Capital Stock", insofar as
they purport to constitute a summary of the terms of the Shares, under the
caption "Certain Agreements with AIG", "Shares Eligible for Future Sale"
and "Underwriting" insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete and fair
in all material respects.
(ff) The Registration Statement is not the subject of a pending
proceeding or examination under Section 8(d) or 8(e) of the Securities Act,
and the Company is not the subject of a pending proceeding under Section 8A
of the Securities Act in connection with the offering of the Shares.
(gg) To the extent required to avoid a Material Adverse Effect,
the Company and its subsidiaries own or possess, or can acquire on
reasonable terms, adequate patents, patent rights, licenses, inventions,
copyrights, know how (including trade secrets and other unpatented and/or
unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual
property (collectively, "INTELLECTUAL PROPERTY") necessary to carry on the
business now operated by them; and neither the Company nor any of its
subsidiaries has received any notice or is otherwise aware of any
infringement of or conflict with asserted rights of others with respect to
any Intellectual Property or of any facts or circumstances which would
render any Intellectual Property invalid or inadequate to protect the
interest of the Company or any of its subsidiaries therein, and which
infringement or conflict (if the subject of any unfavorable decision,
ruling or finding) or invalidity or inadequacy, singly or in the aggregate,
would result in a Material Adverse Effect.
(hh) The operations of the Company are and have been conducted at
all times in compliance with applicable financial recordkeeping and
reporting requirements of the Currency and Foreign Transactions Reporting
Act of 1970, as amended, the money laundering statutes of all
jurisdictions, the rules and regulations thereunder and any related or
similar rules, regulations or guidelines, issued, administered or enforced
by any governmental agency (collectively, the "MONEY LAUNDERING LAWS") and
no action, suit or proceeding by or before any court or governmental
agency, authority or body or any arbitrator involving the Company with
respect to the Money Laundering Laws is pending or, to the best knowledge
of the Company, threatened.
(ii) Neither the Company nor, to the knowledge of the Company,
any director, officer, agent, employee, affiliate or person acting on
behalf of the Company is currently subject to any U.S. sanctions
administered by the Office of Foreign Assets Control of the U.S. Treasury
Department ("OFAC"); and the Company will not directly or indirectly use
the proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or other
person or entity, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.
10
Any certificate signed by an officer of the Company and delivered
to the Underwriters or to counsel for the Underwriters shall be deemed to
be a representation and warranty by the Company to each Underwriter as to
the matters set forth therein.
2. Representations, Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder severally represents, warrants to and
agrees with, the Underwriters that:
(a) All consents, approvals, authorizations and orders necessary
for the execution and delivery by such Selling Stockholder of this
Agreement, and for the sale and delivery of the Shares to be sold by such
Selling Stockholder hereunder, have been obtained; and such Selling
Stockholder has full right, power and authority to enter into this
Agreement and to sell, assign, transfer and deliver the Shares to be sold
by such Selling Stockholder hereunder, except in each such case, with such
exceptions as will not, individually or in the aggregate, have a material
adverse effect on the Selling Stockholder's ability to consummate the
transactions contemplated herein.
(b) The sale of the Shares to be sold by such Selling Stockholder
hereunder and the compliance by such Selling Stockholder with all of the
provisions of this Agreement and the consummation of the transactions
herein and therein contemplated will not (i) conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute a
default under, any statute, indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which such Selling
Stockholder is a party or by which such Selling Stockholder is bound or to
which any of the property or assets of such Selling Stockholder is subject,
including without limitation the Fed Credit Agreement, nor (ii) result in
any violation of the provisions of the Certificate of Incorporation or
By-laws of such Selling Stockholder, nor (iii) result in the breach or
violation of any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over such Selling
Stockholder or the property of such Selling Stockholder, except, in the
case of (i) and (iii), with such exceptions as will not, individually or in
the aggregate, have a material adverse effect on the Selling Stockholders'
ability to consummate the transactions contemplated herein.
(c) Immediately prior to each Time of Delivery (as defined in
Section 4 hereof), such Selling Stockholder will have good and valid title
to a security interest in the Shares to be sold hereunder, free and clear
of all liens, encumbrances, equities or claims, other than the lien under
the Fed Credit Agreement, which shall be released at or prior to delivery
against payment by the Underwriters for such Shares, and upon payment
therefor and delivery to the Depository Trust Company ("DTC") or its agent
of the Shares registered in the name of Cede & Co. ("CEDE") or such other
nominee as may be designated by DTC, both as provided for herein, and the
crediting of the Shares to the Underwriters' accounts with DTC, Cede & Co.
or such other nominee designated by DTC will be a "protected purchaser" of
the Shares (as defined in Section 8-303 of the Uniform Commercial Code as
adopted in the State of New York (the "UCC")), the Underwriters will
acquire a valid "security entitlement" (within the meaning of Section 8-501
of the UCC) to the Shares, and no action based on an "adverse claim" (as
defined in Section 8-102 of the UCC) may be asserted against the
Underwriters with respect to such security entitlement (assuming that the
Underwriters are without notice of any such adverse claim).
11
(d) During the period beginning from the date hereof and
continuing to and including the date ninety (90) days after the date of the
Prospectus (the "LOCK UP PERIOD"), not to offer, sell contract to sell or
otherwise dispose of, except as provided hereunder, any securities of the
Company that are substantially similar to the Shares, including but not
limited to any securities that are convertible into or exchangeable for, or
that represent the right to receive, Stock or any such substantially
similar securities (other than pursuant to employee stock option plans
existing on, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of, the date of this Agreement),
without the prior written consent of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.; provided that
a Selling Stockholder may transfer shares of common stock of the Company to
American International Group, Inc. ("AIG"), or to any subsidiary of AIG if
the transferee agrees to be bound by the restrictions set forth in this
Section 2(d). For the avoidance of doubt, it is understood that the
restrictions in this Section 2(d) apply only to the shares of Company
common stock directly held by the Selling Stockholders, and do not apply to
any shares held by affiliates of the Selling Stockholders in connection
with any asset management or investment management business or otherwise in
a fiduciary capacity.
(e) Such Selling Stockholder has not taken and will not take,
directly or indirectly, any action which is designed to or which has
constituted or which might reasonably be expected to cause or result in
stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of the Shares.
(f) To the extent that any statements or omissions made in the
Registration Statement, the Base Prospectus, any Preliminary Prospectus,
the Pricing Prospectus, the Prospectus or any amendment or supplement
thereto, or any Issuer Free Writing Prospectus are made in reliance upon
and in conformity with written information furnished to the Company by such
Selling Stockholder expressly for use therein, which information consists
solely of the information set forth in Schedule IV hereto, such Base
Prospectus, Preliminary Prospectus, Pricing Prospectus, Prospectus and
Issuer Free Writing Prospectus and the Registration Statement did, and the
Prospectus and any further amendments or supplements to the Registration
Statement and the Prospectus, when they become effective or are filed with
the Commission, as the case may be, will conform in all material respects
to the requirements of the Securities Act and the rules and regulations of
the Commission thereunder and will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(g) The Master Separation Agreement has been duly authorized,
executed and delivered by such Selling Stockholder, and, assuming due
authorization, execution and delivery by the Company, constitutes a valid,
legal, and binding obligation of each such Selling Stockholder, enforceable
against such Selling Stockholder in accordance with its terms, as such
enforceability may be limited by bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors rights and to general
principles of equity provided that no representation is made with respect
to enforceability of sections of the Master Separation Agreement providing
for indemnification. Each such Selling Stockholder has full power and
authority to enter into the Master Separation Agreement and to consummate
the transactions contemplated thereby.
12
(h) At each Time of Delivery, all conditions necessary for
automatic release of any Shares then being delivered that were previously
pledged by such Selling Stockholder as collateral under the Guarantee and
Pledge Agreement dated as of September 22, 2008 among American
International Group, Inc., as Borrower, the Guarantors party thereto and
Federal Reserve Bank of New York, as Lender or Secured Party (the "AIG
Pledge Agreement"), shall have been met in accordance with the terms of
Section 5(f) of the AIG Pledge Agreement and such Shares shall no longer be
subject to a Transaction Lien within the meaning of the AIG Pledge
Agreement.
(i) In order to document the Underwriters' compliance with the
reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder will deliver to you prior to or at
the First Time of Delivery (as hereinafter defined) a properly completed
and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations
in lieu thereof).
Any certificate signed by an officer of any Selling Stockholder and
delivered to the Underwriters or to counsel for the Underwriters shall be
deemed to be a representation and warranty by such Selling Stockholder to
each Underwriter as to the matters set forth therein.
3. Purchase, Sale and Delivery of the Shares.
(a) Subject to the terms and conditions herein set forth, (a)
each Selling Stockholder agrees, severally and not jointly, to sell to each
of the Underwriters, and each of the Underwriters agrees, severally and not
jointly, to purchase from the Selling Stockholders, at a purchase price per
share of $.____, the number of Firm Shares (to be adjusted by you so as to
eliminate fractional shares) determined by multiplying the aggregate number
of Firm Shares to be sold by each Selling Stockholder, as set forth
opposite their respective names on Schedule I(b), by a fraction, the
numerator of which is the aggregate number of Firm Shares to be purchased
by such Underwriter as set forth opposite the name of such Underwriter in
Schedule I(a) hereto and the denominator of which is the aggregate number
of Firm Shares to be purchased by all of the Underwriters from the Selling
Stockholders hereunder and (b) in the event and to the extent that the
Underwriters shall exercise the election to purchase Optional Shares as
provided below, each Selling Stockholder, severally and not jointly, agrees
to sell to each of the Underwriters, and each of the Underwriters agrees,
severally and not jointly, to purchase from the Selling Stockholders, at
the per share purchase price set forth above, that portion of the number of
Optional Shares as to which such election shall have been exercised (to be
adjusted by you so as to eliminate fractional shares) determined by
multiplying such number of Optional Shares by a fraction the numerator of
which is the maximum number of Optional Shares which such Underwriter is
entitled to purchase as set forth opposite the name of such Underwriter in
Schedule I(a) hereto and the denominator of which is the maximum number of
Optional Shares that all of the Underwriters are entitled to purchase
hereunder.
(b) Each Selling Stockholder, severally and not jointly, hereby
grants to the Underwriters the right to purchase at their election up to
the number of Optional Shares forth opposite their respective names on
Schedule I(b), at the per share purchase price set forth in clause (a)
above, for the sole purpose of covering sales of shares in excess of the
number of
13
Firm Shares. Any such election to purchase Optional Shares may be exercised
only by written notice from you in accordance with Section 13 hereof, given
within a period of 30 calendar days after the date of this Agreement and
setting forth the aggregate number of Optional Shares to be purchased and
the date on which such Optional Shares are to be delivered, as determined
by you but in no event earlier than the First Time of Delivery (as defined
in clause (d) hereof) or, unless you otherwise agree in writing, earlier
than two or later than ten business days after the date of such notice,
subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth.
(c) Upon the authorization by you of the release of the Firm
Shares, the several Underwriters propose to offer the Firm Shares for sale
upon the terms and conditions set forth in the Prospectus.
(d) The Shares to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in
such names as the Representatives may request upon at least forty-eight
hours' prior notice to the Selling Stockholders shall be delivered by or on
behalf of the Selling Stockholders to the Representatives, through the
facilities of DTC, for the account of such Underwriter, against payment by
or on behalf of such Underwriter of the purchase price therefor by wire
transfer of Federal (same-day) funds to the account specified by the
Selling Stockholders to the Representatives at least forty-eight hours in
advance. As to any Shares that are in certificated form the Company will
cause the certificates representing such certificated Shares to be made
available for checking and packaging at least twenty-four hours prior to
the Time of Delivery (as defined below) with respect thereto at the office
of DTC or its designated custodian (the "DESIGNATED OFFICE"). The time and
date of such delivery and payment shall be, with respect to the Firm
Shares, 9:30 a.m., New York time, on .[__], 2009 or such other time and
date as the Representatives and the Selling Stockholders may agree upon in
writing, and, with respect to the Optional Shares, 9:30 a.m., New York
time, on the date specified by ▇▇▇▇▇▇▇, Sachs & Co. in the written notice
given by the Representatives of the Underwriters' election to purchase such
Optional Shares, or such other time and date as the Representatives and the
Selling Stockholders may agree upon in writing. Such time and date for
delivery of the Firm Shares is herein called the "FIRST TIME OF DELIVERY",
such time and date for delivery of the Optional Shares, if not the First
Time of Delivery, is herein called the "SECOND TIME OF DELIVERY", and each
such time and date for delivery is herein called a "TIME OF DELIVERY".
(e) Delivery of the documents to be delivered at each Time of
Delivery by or on behalf of the parties hereto pursuant to Section 7 hereof
and payment for the Shares shall be made at the office of ▇▇▇▇▇ & ▇▇▇▇▇▇▇
LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (or such other place
as may be agreed to by the Underwriters and the Company) at, with respect
to the Firm Shares, 9:30 a.m. (New York time) on [__], 2009, which date and
time may be postponed by agreement between the Underwriters, the Company
and the Selling Stockholders and with respect to the Option Shares, 9:30
a.m. (New York time) on the date specified in the written notice given by
the Representatives of the Underwriters' election to purchase such Optional
Shares, which date and time may be postponed by agreement between the
Underwriters and the Company.
14
(f) Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligations of the Underwriters hereunder.
4. Covenants of the Company. The Company covenants with each of the
Underwriters as follows:
(a) To prepare the Final Prospectus as amended and supplemented
in relation to the applicable Shares in a form approved by the Underwriters
and to file timely and in the manner required such Final Prospectus
pursuant to Rule 424(b) under the Securities Act (without reliance on Rule
424(b)(8)); to make no further amendment or any supplement to the
Registration Statement, any Preliminary Prospectus (including any
prospectus included in the Original Registration Statement or amendment
thereto at the time it became effective) or to the Final Prospectus as
amended or supplemented after the date hereof and prior to the First Time
of Delivery unless the Underwriters shall have had a reasonable opportunity
to review and comment upon any such amendment or supplement prior to any
filing thereof; to advise the Underwriters, promptly after it receives
notice thereof, of the time when any amendment to the Registration
Statement has been filed or any supplement to the Final Prospectus or any
amended Final Prospectus has been filed and to furnish the Underwriters
with copies thereof; to file promptly all reports and any definitive proxy
or information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act for so long as the delivery of a prospectus is required in connection
with the offering or sale of the Shares and, during such same period, to
advise the Underwriters, promptly after it receives notice thereof, of (i)
the issuance by the Commission of any stop order or of any order preventing
or suspending the use of the Final Prospectus or of any examination
pursuant to Section 8(e) of the Securities Act concerning the Registration
Statement, (ii) the suspension of the qualification of the Shares for
offering or sale in any jurisdiction or of the initiation or threatening of
any proceeding for any such purpose, (iii) any request by the Commission
for the amending or supplementing of the Registration Statement or Final
Prospectus or for additional information or (iv) the Company becoming the
subject of a proceeding under Section 8A of the Securities Act in
connection with the offering of the Shares; and, in the event of the
issuance of any stop order or of any order preventing or suspending the use
of the Final Prospectus or suspending any such qualification, promptly to
use its best efforts to obtain the withdrawal of such order. The Company
shall pay the required Commission filing fees relating to the Shares within
the time required by Rule 456(b)(1) of the Securities Act without regard to
the proviso therein and otherwise in accordance with Rules 456(b) and
457(r) of the Securities Act.
(b) Not later than 12:00 p.m. (New York time) on the second
business day following the date the Shares are first released by the
Underwriters for sale to purchasers and from time to time, furnish at its
own expense to the Underwriters and to ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, counsel to the
Underwriters, copies of the Final Prospectus (and all amendments and
supplements thereto) in each case as soon as available and in such
quantities as the Underwriters reasonably request for internal use and for
distribution to prospective purchasers. The Company will pay the expenses
of printing and distributing any Permitted Free Writing Prospectus (as
hereinafter defined) and the Prospectus and any amendments or supplements
15
thereto (including without limitation any costs associated with electronic
delivery of these materials).
(c) Furnish or deliver to the Underwriters and to ▇▇▇▇▇ & ▇▇▇▇▇▇▇
LLP, counsel for the Underwriters, without charge, signed copies of the
Original Registration Statement and of each amendment thereto (including
exhibits filed therewith or incorporated by reference therein and documents
incorporated or deemed to be incorporated by reference therein or otherwise
deemed to be a part thereof) and signed copies of all consents and
certificates of experts, and will also deliver to the Underwriters, without
charge, a conformed copy of the Original Registration Statement and of each
amendment thereto (without exhibits) for each of the Underwriters. The
copies of the Original Registration Statement and each amendment thereto
furnished to the Underwriters will be identical to the electronically
transmitted copies thereof filed with the Commission pursuant to ▇▇▇▇▇,
except to the extent permitted by Regulation S-T.
(d) Promptly to take such action as the Underwriters may
reasonably request from time to time to qualify the Shares for offering and
sale under the securities laws of such jurisdictions as the Underwriters
may request and to comply with such laws so as to permit the continuance of
sales and dealings therein in such jurisdictions in the United States for
as long as may be necessary to complete the distribution of the Shares;
provided that in connection therewith, the Company shall not be required to
qualify as a foreign corporation or otherwise subject itself to taxation or
service of process in any jurisdiction in which it is not otherwise so
qualified or subject.
(e) To make generally available to securityholders of the Company
as soon as practicable, but in any event not later than eighteen months
after the effective date of the Registration Statement (as defined in Rule
158(c) under the Securities Act), an earnings statement of the Company and
its subsidiaries (which need not be audited) complying with Section 11(a)
of the Securities Act and the rules and regulations thereunder (including,
at the option of the Company, Rule 158).
(f) To pay the required Commission filing fees relating to the
Shares within the time required by Rule 456(b)(1) under the Securities Act
and otherwise in accordance with Rules 456(b) and 457(r) under the
Securities Act.
(g) That none of the Company or any of its Affiliates will take,
directly or indirectly, any action which is designed to stabilize or
manipulate, or which constitutes or which might reasonably be expected to
cause or result in stabilization or manipulation, of the price of any
security of the Company in connection with the offering of the Shares.
(h) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the Final
Prospectus, not to offer, sell, contract to sell, pledge, grant any option
to purchase, make any short sale or otherwise dispose, except as provided
hereunder, of any securities of the Company that are substantially similar
to the Shares, including but not limited to any options or warrants to
purchase shares of Stock or any securities that are convertible into or
exchangeable for, or that represent the right to receive, Stock or any such
substantially similar securities (other than pursuant to director or
employee
16
stock option or equity plans existing on the date of this Agreement,
including for the avoidance of doubt the Company's 2009 Long Term Equity
Incentive Plan, or upon the conversion or exchange of convertible or
exchangeable securities outstanding as of the date of this Agreement),
without your prior written consent.
(i) To take such steps as shall be necessary to ensure that it
shall not become an "investment company" within the meaning of such term
under the Investment Company Act.
(j) The Company has complied and will comply with the
requirements of Rule 433 under the Securities Act applicable to any Issuer
Free Writing Prospectus relating to the Shares, including timely filing
with the Commission or retention where required and legending.
(k) If at any time following issuance of an Issuer Free Writing
Prospectus there occurred or occurs an event or development as a result of
which such Issuer Free Writing Prospectus included or would include an
untrue statement of a material fact or omitted or would omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances, not misleading, the Company has notified or
will notify promptly the Underwriters so that any use of such Issuer Free
Writing Prospectus may cease until it is amended or supplemented. The
foregoing two sentences do not apply to statements in or omissions from any
Issuer Free Writing Prospectus based upon and in conformity with written
information furnished to the Company by any Underwriter expressly for use
therein.
5. Further Covenants and Agreements.
(a) The Company and the Selling Stockholders each represent and
agree that, without the prior consent of the Representatives (such consent
not to be unreasonably withheld), it has not made and will not make any
offer relating to the Shares that would constitute a free writing
prospectus as defined in Rule 405 under the Securities Act; and each
Underwriter represents and agrees that, without the prior consent of the
Company, the Selling Stockholders and the Representatives (such consent not
to be unreasonably withheld), it has not made and will not make any offer
relating to the Securities that would constitute a free writing prospectus.
Any such free writing prospectus the use of which has been consented to by
the Company, the Selling Stockholders and the Representatives is listed on
Schedule II(a) hereto and is referred hereafter as a "PERMITTED FREE
WRITING PROSPECTUS".
(b) The Selling Stockholders and the Company acknowledge that (i)
the purchase and sale of the Shares pursuant to this Agreement is an
arm's-length commercial transaction between the Company and the Selling
Stockholders, on the one hand, and the several Underwriters, on the other
hand, (ii) in connection with the offering contemplated hereby and the
process leading to such transaction each Underwriter is and has been acting
solely as a principal and is not the agent or fiduciary of the Company or
the Selling Stockholders, or their respective stockholders, creditors,
employees or any other party, (iii) no Underwriter has assumed or will
assume an advisory or fiduciary responsibility in favor of the Company or
the Selling Stockholders with respect to the offering contemplated hereby
or the process leading thereto (irrespective of whether such Underwriter
has advised or is currently advising the Company or the Selling
Stockholders on other matters) and no Underwriter has
17
any obligation to the Company or the Selling Stockholders with respect to
the offering contemplated hereby except the obligations expressly set forth
in this Agreement, (iv) the Underwriters and their respective affiliates
may be engaged in a broad range of transactions that involve interests that
differ from those of the Company or the Selling Stockholders, and (v) the
Underwriters have not provided any legal, accounting, regulatory or tax
advice with respect to the offering contemplated hereby and each of the
Company and the Selling Stockholders have consulted their own legal,
accounting, regulatory and tax advisors to the extent it deemed
appropriate.
6. Expenses. The Company and the Selling Stockholders covenant and
agree with one another and with the several Underwriters that (i) the Company
agrees to pay: (a) all costs and expenses incident to the preparation, printing,
shipping and distribution of the Registration Statement, the Base Prospectus,
any Preliminary Prospectus, the General Disclosure Package and the Final
Prospectus and any amendments or supplements thereto, and this Agreement; (b)
the fees and expenses of the Company's counsel and independent accountants; (c)
the fees and expenses of qualifying the Shares under the securities laws of the
several jurisdictions as provided in Section 4(e) and of preparing, printing and
distributing a Blue Sky Memorandum (including reasonable related fees and
expenses of counsel to the Underwriters in connection therewith), if any; (d)
any filings required to be made with FINRA (including filing fees and the
reasonable fees and expenses of counsel for the Underwriter relating to such
filings); (e) the costs and expenses of the Company and the reasonable expenses
of the Underwriters and any consultants in connection with the marketing and
offering of the Shares and the costs and expenses of the Company relating to
investor presentations on any "road show" undertaken in connection with the
marketing of the offering of the Shares, including, without limitation, expenses
associated with the production of road show slides and graphics, and the travel
and lodging expenses of the representatives and officers of the Company and any
such consultants; (f) any registration fees required to be paid by the Company
in connection with the registration of the Shares; and (g) all other costs and
expenses incident to the performance of the obligations of the Company under
this Agreement, and (ii) the Selling Stockholders agree to pay: (a) the fees and
expenses of the Selling Stockholders' counsel, (b) any costs and expenses
incurred by the Selling Stockholders in connection with the marketing and
offering of the Shares and any "road show" undertaken in connection with the
marketing of the offering of the Shares, including, without limitation, expenses
associated with any travel and lodging expenses of the Selling Stockholders; and
(c) any stamp or transfer taxes in connection with the sale of the Shares to the
Underwriters and all other costs and expenses incident to the performance of the
obligations of the Selling Stockholders under this Agreement; provided in each
case that, except as provided in this Section 6, Section 8 and Section 10, the
Underwriters shall pay their own costs and expenses, including the costs and
expenses of their counsel.
7. Conditions of the Underwriters' Obligations. The obligations of the
Underwriters hereunder, as to the Shares to be delivered at each Time of
Delivery, are subject to the accuracy, when made and at and as of such Time of
Delivery, of the representations and warranties of the Company and the Selling
Stockholders contained herein, to the performance by the Company and the Selling
Stockholders of each of their obligations hereunder, and to each of the
following additional terms and conditions:
(a) The Final Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing by the rules and
18
regulations under the Securities Act and in accordance with Section 4(a)
hereof; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for
that purpose shall have been initiated or threatened by the Commission; and
all requests for additional information on the part of the Commission shall
have been complied with to the Underwriters' reasonable satisfaction.
(b) ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP shall have furnished to the
Underwriters its written opinion and negative assurance letter, as special
counsel to the Company, addressed to the Underwriters and dated at such
Time of Delivery, to the effect set forth in Exhibit A hereto.
(c) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, General Counsel to the Company, shall have
furnished to the Underwriters his written opinion addressed to the
Underwriters and dated at such Time of Delivery, to the effect set forth in
Exhibit B hereto.
(d) ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for each of the Selling
Stockholders shall have furnished to you their written opinion addressed to
the Underwriters and dated at such Time of Delivery, to the effect set
forth in Exhibit C hereto.
(e) ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP shall have furnished to the Underwriters
its written opinion, as counsel to the Underwriters, addressed to the
Underwriters and dated at such Time of Delivery, in form and substance
reasonably satisfactory to the Underwriters.
(f) The Underwriters shall have received, on each of the date
hereof and such Time of Delivery, a letter dated the date hereof and at
such Time of Delivery, as the case may be, to the effect set forth in
Exhibit D hereto, from PriceWaterhouseCoopers LLP, and with respect to each
such letter dated any such Time of Delivery as to such other matters as the
Representatives may reasonably request and in the form and substance
satisfactory to the Underwriters.
(g) The Company shall have furnished to the Underwriter a
certificate of the Company, signed by the Chief Financial Officer of the
Company, dated as of such Time of Delivery, in the form and substance
reasonably satisfactory to the Underwriters.
(h) The Company shall have furnished to the Underwriters on such
Time of Delivery its certificate, dated such Time of Delivery, executed by
its Chief Executive Officer and by its Chief Financial Officer, in form and
substance reasonably satisfactory to the Underwriters, to the effect that
(i) the representations, warranties and agreements of the Company in
Section 1 are true and correct as of the date given and as of such Time of
Delivery, (ii) the Company has complied in all material respects with all
its agreements contained herein to be performed prior to or on such Time of
Delivery and (iii) the conditions set forth in Sections 7(l) and 7(n) have
been fulfilled.
(i) The Underwriters shall have received on such Time of
Delivery, certificates of each of the Selling Stockholders, dated such Time
of Delivery, executed by an authorized officer of such Selling Stockholder,
in the form and substance reasonably satisfactory to the Underwriters, to
the effect that the representations, warranties and agreements of such
Selling
19
Stockholders in Section 2 are true and correct as of the date given and as
of such Time of Delivery; and such Selling Stockholder has complied in all
material respects with all its agreements contained herein to be performed
prior to or on such Time of Delivery.
(j) The Master Separation Agreement, the Transition Services
Agreement, the Stockholders Agreement (if required), the Registration
Rights Agreement (if required) and the Selling Stockholders' Consent to
amend and restate the Company's certificate of incorporation each shall
have been duly authorized, executed and delivered or shall be executed and
delivered simultaneously with such Time of Delivery and shall not have been
rescinded prior to the Time of Delivery.
(k) (i) Neither the Company nor any of its subsidiaries shall
have sustained since the date of the latest audited financial statements
included in the General Disclosure Package and the Final Prospectus any
loss or interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the General Disclosure Package and the Final Prospectus
or (ii) since such date there shall not have been (A) any addition, or any
development involving a prospective addition, to the Company's consolidated
reserve for losses and loss adjustment expense or (B) any change in the
capital stock (other than issuances pursuant to a stock compensation plan
of the Company disclosed in the General Disclosure Package), or any change
in the short-term debt or long-term debt of the Company or any of its
subsidiaries or any change, or any development involving a prospective
change, in or affecting the general affairs, management, financial
position, stockholders' equity or results of operations of the Company and
its subsidiaries, otherwise than as set forth or contemplated in the Final
Prospectus, the effect of which, in any such case described in clause (i)
or (ii), is, in the reasonable judgment of the Underwriters, so material
and adverse as to make it impracticable or inadvisable to proceed with the
offering or the delivery of the Shares being delivered on such Time of
Delivery on the terms and in the manner contemplated in the General
Disclosure Package and the Final Prospectus.
(l) Subsequent to the execution and delivery of this Agreement
there shall not have occurred any of the following: (i) trading in the
shares of the common stock of the Company, or in securities generally on
the New York Stock Exchange shall have been suspended or limited or minimum
or maximum prices shall have been established on such exchange by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction; (ii) a banking moratorium shall
have been declared by United States federal or New York authorities; (iii)
the United States shall have become engaged in hostilities, there shall
have been an escalation in hostilities involving the United States, or
there shall have been a declaration of a national emergency or war by the
United States; (iv) there shall have occurred a material disruption in
securities settlement or clearance services; or (v) there shall have
occurred such a material adverse change in general economic, political or
financial conditions (or the effect of international conditions on the
financial markets in the United States shall be such) as to make it, in
each case, in the reasonable judgment of the Underwriters, impracticable or
inadvisable to proceed with the offering or delivery of the Shares being
delivered on such Time of Delivery on the terms and in the manner
contemplated in the General Disclosure Package and the Final Prospectus.
20
(m) Subsequent to the execution and delivery of this Agreement,
no downgrading shall have occurred in the rating accorded to the financial
strength or credit of the Company, the insurance financial strength or
issuer credit of the Insurance Subsidiaries or the debt securities of the
Company by any "nationally recognized statistical rating organization", as
that term is defined by the Commission for purposes of Rule 436(g)(2) of
the Securities Act and (ii) no such rating organization shall have made an
initial public announcement that it has under surveillance or review, with
possible negative implications, its rating of the financial strength of the
Company, the insurance financial strength or issuer credit of the Insurance
Subsidiaries or the debt securities of the Company.
(n) The Underwriters shall have received executed copies of an
agreement from the directors and executive officers of the Company listed
in Schedule III hereto that includes "lock-up" provisions to the effect set
forth in Exhibit E hereto.
(o) At such Time of Delivery, counsel for the Underwriters shall
have been furnished with such documents and opinions as it may reasonably
require for the purpose of enabling it to pass upon the sale of the Shares
as herein contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
herein contained; and all proceedings taken by the Company and the Selling
Stockholders in connection with the sale of the Shares as herein
contemplated shall be reasonably satisfactory in form and substance to the
Representatives and counsel for the Underwriters.
8. Indemnification and Contribution.
(a) The Company shall indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter, within
the meaning of the Securities Act or the Exchange Act, from and against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim, damage,
liability or action relating to purchases and sales of the Shares), to
which the Underwriters or any such controlling person may become subject,
insofar as such loss, claim, damage, liability or action arises out of, or
is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, any Issuer Free
Writing Prospectus, the General Disclosure Package, the Final Prospectus or
in any amendment or supplement thereto or any "issuer information" filed or
required to be filed pursuant to Rule 433(d) under the Securities Act or
(ii) the omission or alleged omission to state in any Preliminary
Prospectus, any Issuer Free Writing Prospectus, the General Disclosure
Package, the Final Prospectus or in any amendment or supplement thereto or
any "issuer information" filed or required to be filed pursuant to Rule
433(d) under the Securities Act any material fact required to be stated
therein or necessary to make the statements therein not misleading; and
shall reimburse the Underwriters and controlling person promptly upon
demand for any documented legal or other expenses reasonably incurred by
the Underwriters or any such controlling person in connection with
investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out
of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in the any Preliminary Prospectus, any
Issuer Free Writing Prospectus,
21
the General Disclosure Package, the Final Prospectus, in reliance upon and
in conformity with the written information furnished to the Company by or
on behalf of the Underwriters concerning the Underwriters specifically for
inclusion therein, which information consists solely of the information set
forth in Schedule V hereto.
(b) The Selling Stockholders shall severally, indemnify and hold
harmless each Underwriter, and each person, if any, who controls any
Underwriter, within the meaning of the Securities Act or the Exchange Act,
from and against any loss, claim, damage or liability, joint or several, or
any action in respect thereof (including, but not limited to, any loss,
claim, damage, liability or action relating to purchases and sales of the
Shares), to which the Underwriters or any such controlling person may
become subject, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus, any
Issuer Free Writing Prospectus, the General Disclosure Package, the Final
Prospectus or in any amendment or supplement thereto in reliance upon and
in conformity with written information furnished to the Company by the
Selling Stockholders or (ii) the omission or alleged omission, in reliance
upon and in conformity with written information furnished to the Company by
the Selling Stockholders, to state in any Preliminary Prospectus, any
Issuer Free Writing Prospectus, the General Disclosure Package, the Final
Prospectus or in any amendment or supplement thereto any material fact
necessary to make the statements therein not misleading; and shall
reimburse the Underwriters and each such controlling person promptly upon
demand for any legal or other expenses reasonably incurred by the
Underwriters or any such controlling person in connection with
investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred;
(c) The Underwriters, severally and not jointly, shall indemnify
and hold harmless the Company and the Selling Stockholders, and each
person, if any, who controls the Company or the Selling Stockholders within
the meaning of the Securities Act or the Exchange Act from and against any
loss, claim, damage or liability, joint or several, or any action in
respect thereof, to which the Company, the Selling Stockholders or any such
controlling person may become subject, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, any Issuer Free Writing Prospectus, the General
Disclosure Package, the Final Prospectus or in any amendment or supplement
thereto, or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, any Issuer Free Writing Prospectus, the General
Disclosure Package, the Final Prospectus or in any amendment or supplement
thereto, any material fact necessary to make the statements therein not
misleading, but in each case only to the extent that such untrue statement
or alleged untrue statement or omission or alleged omission was made in
reliance upon and in conformity with the written information furnished to
the Company or the Selling Stockholders by or on behalf of the Underwriters
specifically for inclusion therein, which information consists solely of
the information set forth in Schedule V hereto, and shall reimburse the
Company or the Selling Stockholders and any such controlling person
promptly upon demand for any legal or other expenses reasonably incurred by
the Company or the Selling Stockholders or any such controlling person in
connection with investigating or defending or preparing to defend against
any such loss, claim, damage, liability or action as such expenses are
incurred. The foregoing
22
indemnity agreement is in addition to any liability which the Underwriters
may otherwise have to the Company, or the Selling Stockholders or any such
controlling person.
(d) Promptly after receipt by an indemnified party under this
Section 8 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve the indemnifying party from any liability which the
indemnifying party may have under this Section 8 except to the extent it
has been materially prejudiced by such failure and, provided, further, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under
this Section 8. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying
party to the indemnified party of its election to assume the defense of
such claim or action, the indemnifying party shall not be liable to the
indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided,
however, that the Underwriters shall have the right to employ separate
counsel to represent jointly the Underwriters and their respective
officers, employees and controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Underwriters against the Company under this Section 8 if, in the reasonable
judgment of the Underwriters, based on the advice of counsel, it is
advisable for the Underwriters and such officers, employees and controlling
persons to be jointly represented by separate counsel, and in that event
the reasonable fees and expenses of such separate counsel shall be paid by
the Company (it being understood that the Company shall not be liable for
the expenses of more than one separate counsel (together with local
counsel)). No indemnifying party shall, (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld) settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to
such claim or action) unless such settlement, compromise or consent (1)
includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding and (2)
does not include a statement as to or an admission of fault, culpability or
failure to act by or on behalf of any indemnified party, or (ii) be liable
for any settlement of any such action effected without its written consent
(which consent shall not be unreasonably withheld), but if settled with its
written consent or if there be a final judgment for the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless
any indemnified party from and against any loss of liability by reason of
such settlement or judgment.
(e) If the indemnification provided for in this Section 8 shall
for any reason be unavailable or insufficient to hold harmless an
indemnified party under Section 8(a), (b) or (c) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each relevant indemnifying party shall, in lieu of
indemnifying such indemnified
23
party, contribute to the amount paid or payable by such indemnified party
as a result of such loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to reflect the
relative benefits received by the Company and the Selling Stockholders on
the one hand and the Underwriters on the other from the offering of the
Shares, or (ii) if the allocation provided by clause 8(e)(i) is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause 8(e)(i) but
also the relative fault of the Company and the Selling Stockholders on the
one hand and the Underwriters on the other with respect to the statements
or omissions or alleged statements or alleged omissions that resulted in
such loss, claim, damage or liability (or action in respect thereof), as
well as any other relevant equitable considerations. The relative benefits
received by the Company and the Selling Stockholders on the one hand and
the Underwriters on the other with respect to such offering shall be deemed
to be in the same proportion as the total net proceeds from the offering of
the Shares purchased under this Agreement (before deducting expenses)
received by the Selling Stockholders on the one hand, and the total
discounts and commissions received by the Underwriters with respect to the
Shares purchased under this Agreement, on the other hand, bear to the total
gross proceeds from the offering of the Shares under this Agreement. The
relative fault shall be determined by reference to whether the untrue or
alleged untrue statement of a material fact or omission or alleged omission
to state a material fact relates to information supplied by the Company,
the Selling Stockholders or the Underwriters, the intent of the parties and
their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company, the Selling
Stockholders and the Underwriters agree that it would not be just and
equitable if the amount of contributions pursuant to this Section 8(e) were
to be determined by pro rata allocation or by any other method of
allocation that does not take into account the equitable considerations
referred to herein. The amount paid or payable by an indemnified party as a
result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section 8(e) shall be deemed to include,
for purposes of this Section 8(e), any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such action or claim. Notwithstanding the provisions of this
Section 8(e), no Underwriters shall be required to contribute any amount in
excess of the amount by which the total price at which the Shares
underwritten by it were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been previously required to
pay by reason of such untrue or alleged untrue statement or omission or
alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
9. Termination. The obligations of the Underwriters hereunder may be
terminated by the Underwriters by notice given to and received by the Company
and the Selling Stockholders prior to delivery of and payment for the Shares,
if, prior to that time, any of the events described in Sections 7(k), (l) or (m)
shall have occurred or if the Underwriters shall decline to purchase such Shares
for any reason permitted under this Agreement. In such case, the Company and the
Selling Stockholders shall have no liability hereunder except as provided by
Sections 6, 8 and 10 hereof.
10. Reimbursement of Underwriters' Expenses. (a) if (i) the Selling
Stockholders shall fail to tender the Shares for delivery to the Underwriters
for any reason other than a breach by the Underwriters of their representations
herein or obligations hereunder or (ii) the Underwriters shall
24
decline to purchase the Shares as a result of (x) the failure of any of the
conditions herein to be satisfied due to a breach of any of the representations,
warranties or covenants by the Selling Stockholders, (y) the failure by counsel
for the Selling Stockholders to furnish its written opinion pursuant to 7(d) of
this Agreement or (z) any other acts or matters solely within the control of the
Selling Stockholders, then the Selling Stockholders shall reimburse the
Underwriters for the reasonable fees and expenses of their counsel and for such
other out-of-pocket expenses as shall have been reasonably incurred by them in
connection with this Agreement and the proposed purchase of the Shares, and upon
demand, the Selling Stockholders shall pay the full amount of such reasonable
fees and expenses to the Underwriters; and (b) if the Underwriters shall decline
to purchase the Shares for any other reason permitted under this Agreement
(including the termination of this Agreement pursuant to Section 9 but excluding
the failure of any of the conditions herein to be satisfied as a result of a
breach by the Selling Stockholders or the Underwriters of their respective
representations, warranties or covenants herein) other than those specified in
(a) above, the Company shall reimburse the Underwriters for the reasonable fees
and expenses of their counsel and for such other out-of-pocket expenses as shall
have been reasonably incurred by them in connection with this Agreement and the
proposed purchase of the Shares, and upon demand, the Company shall pay the full
amount thereof to the Underwriters.
11. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) If to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co. at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇, ▇▇ ▇▇▇▇▇, Attention: Registration Department (Fax number
▇▇▇-▇▇▇-▇▇▇▇) and to ▇.▇. ▇▇▇▇▇▇ Securities Inc., at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇, ▇▇ ▇▇▇▇▇, Attention: Equity Syndicate Desk (Fax: ▇▇▇-▇▇▇-▇▇▇▇);
with a copy (which shall not constitute notice) to ▇▇▇▇▇ & ▇▇▇▇▇▇▇
LLP, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇
▇▇▇▇▇, Esq. (Fax: ▇▇▇-▇▇▇-▇▇▇▇; Telephone ▇▇▇-▇▇▇-▇▇▇▇);
(b) if to the Company, shall be delivered or sent by mail, telex
or facsimile transmission to it at ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: General Counsel (Fax: ▇▇▇-▇▇▇-▇▇▇▇; Telephone: ▇▇▇-▇▇▇-▇▇▇▇);
with a copy (which shall not constitute notice) to ▇▇▇▇▇▇, ▇▇▇▇ &
▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇,
Esq. (Fax: ▇▇▇-▇▇▇-▇▇▇▇; Telephone: ▇▇▇-▇▇▇-▇▇▇▇).
(c) If to the Selling Stockholders, shall be delivered or sent by
mail, telex or facsimile transmission to it at ___________;
with a copy (which shall not constitute notice) to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
(Fax: ▇▇▇-▇▇▇-▇▇▇▇; Telephone: ▇▇▇-▇▇▇-▇▇▇▇).
Any notice of a change of address or facsimile transmission number
must be given by the Company, the Selling Stockholders or the Underwriters,
as the case maybe, in writing at least three days in advance of such
change.
25
12. Persons Entitled to Benefit of Agreement. This Agreement shall
inure to the benefit of and be binding upon the Underwriters, the Selling
Stockholders, the Company and their respective successors, and to the extent
provided in Section 8 hereof, to each person, if any, who controlling person,
within the meaning of the Securities Act or the Exchange Act. This Agreement and
the terms and provisions hereof are for the sole benefit of only those persons,
except that (i) the representations, warranties, indemnities and agreements of
the Company and the Selling Stockholders contained in this Agreement shall also
be deemed to be for the benefit of the directors, officers and employees of the
Underwriters and the person or persons, if any, who control the Underwriters
within the meaning of Section 15 of the Securities Act and (ii) the
representations and warranties of the Underwriters in this Agreement and the
indemnity agreement of the Underwriters contained in Section 8(c) of this
Agreement shall be deemed to be for the benefit of directors, officers and
employees of the Company and the Selling Stockholders, and any person
controlling the Company and the Selling Stockholders within the meaning of
Section 15 of the Securities Act. Nothing contained in this Agreement is
intended or shall be construed to give any person, other than the persons
referred to in this Section 12, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.
13. Default of One or More of the Several Underwriters. If any one or
more of the several Underwriters shall fail or refuse to purchase Shares that it
or they have agreed to purchase hereunder on the First Time of Delivery, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase does not exceed 10% of the aggregate
number of the Shares to be purchased on such date, the other Underwriters shall
be obligated, severally, in the proportions that the number of Shares set forth
opposite their respective names on Schedule I(a) bears to the aggregate number
of Shares set forth opposite the names of all such non-defaulting Underwriters,
or in such other proportions as may be specified by the Underwriters with the
consent of the non-defaulting Underwriters, to purchase the Shares which such
defaulting Underwriter or Underwriters agreed but failed or refused to purchase
on such date. If any one or more of the Underwriters shall fail or refuse to
purchase Shares and the aggregate number of Shares with respect to which such
default occurs exceeds 10% of the aggregate number of Shares to be purchased on
the First Time of Delivery, and arrangements satisfactory to the Underwriters
and the Selling Stockholders for the purchase of such Shares are not made within
48 hours after such default, this Agreement shall terminate without liability on
the part of any non-defaulting Underwriter or the Company or the Selling
Stockholders, except that the provisions of Section 6, Section 8 and Section 10
(which shall only apply with respect to the non-defaulting Underwriters) shall
at all times be effective and shall survive such termination, but nothing herein
shall relieve a defaulting Underwriter from liability for its default. In any
such case either the Underwriters or the Company shall have the right to
postpone such Time of Delivery but in no event for longer than seven days in
order that the required changes, if any, to the Final Prospectus or any other
documents or arrangements may be effected.
As used in this Agreement, the term "Underwriter" shall be deemed to
include any person substituted for a defaulting Underwriter under this
Section 13. Any action taken under this Section 13 shall not relieve any
defaulting Underwriter from liability in respect of any default of such
Underwriter under this Agreement.
14. Survival. The respective indemnities, representations, warranties
and agreements of the Company and the Underwriters contained in this Agreement
or made by or on behalf of them,
26
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Shares and shall remain in full force and effect, regardless of
any termination or cancellation of this Agreement or any investigation made by
or on behalf of any of them or any person controlling any of them.
15. Definition of the Term "Business Day". For purposes of this
Agreement, "BUSINESS DAY" means any day on which the New York Stock Exchange,
Inc. is open for trading.
16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
17. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
18. Headings. The headings herein are inserted for convenience of
reference only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.
SIGNATURE PAGE FOLLOWS
27
If the foregoing correctly sets forth the agreement between the Company and
the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
TRANSATLANTIC HOLDINGS, INC.
By:
------------------------------------
Name:
Title:
AMERICAN INTERNATIONAL GROUP, INC
By:
------------------------------------
Name:
Title:
AMERICAN HOME ASSURANCE COMPANY
By:
------------------------------------
Name:
Title:
Accepted and agreed by:
-------------------------------------
(▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co.)
Accepted and agreed by:
▇.▇. ▇▇▇▇▇▇ SECURITIES INC.
By:
---------------------------------
Name:
Title:
28
EXHIBIT C
FORM OF REGISTRATION RIGHTS AGREEMENT
See Attached.
C-1
================================================================================
FORM OF REGISTRATION RIGHTS AGREEMENT
by and among
Transatlantic Holdings, Inc.,
American International Group, Inc.
and
American Home Assurance Company
Dated as of [-], 2009
================================================================================
This REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of [-], 2009, by and among Transatlantic Holdings, Inc., a Delaware
corporation (the "Company"), American International Group, Inc., a Delaware
corporation ("AIG"), and American Home Assurance Company, a New York
corporation ("AHA").
WITNESSETH:
WHEREAS, the Company, AIG and AHA have entered into a Master Separation
Agreement, dated as of May 28, 2009 (the "Separation Agreement"), to effect
the orderly separation of the Company from AIG and AHA;
WHEREAS, pursuant to the Separation Agreement, AIG, AHA and the Company
have agreed to enter into this Agreement at closing of the Separation
Agreement; and
WHEREAS, the parties desire to set forth certain registration rights
applicable to the Registrable Securities (as defined below) held from time
to time by the Holders, and the Company desires to indemnify Holders
against certain liabilities to which such Holders may become subject as a
result of Holders' interests in the Company.
NOW, THEREFORE, in consideration of the mutual covenants and undertakings
contained herein, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree
as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
Affiliate: Means, with respect to any Person, any other Person
directly or indirectly, controlled by, controlling or under common control
with such Person.
Agreement: As defined in the Preamble.
AHA: As defined in the Preamble.
AIG: As defined in the Preamble.
AIG Credit Facility Trust: AIG Credit Facility Trust established by
the FRBNY for the sole benefit of the United States Treasury pursuant to
the AIG Credit Facility Trust Agreement made on January 16, 2009 by and
among the FRBNY and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇.
Board: Means the Board of Directors of the Company.
Code: The United States Internal Revenue Code of 1986
Common Stock: Means the Company's common stock. Par value $1.00 per
share.
Company: As defined in the Preamble.
Confidential Information: As defined in Section 4(n).
Exchange Act: The Securities Exchange Act of 1934, as amended from
time to time.
First Time of Delivery: Shall have the meaning set forth in the
Underwriting Agreement.
FRBNY: The Federal Reserve Bank of New York.
Governmental Authority: Shall have the meaning set forth in the
Separation Agreement.
Governmental Order: Shall have the meaning set forth in the Separation
Agreement.
Holder: Any of AIG, its Subsidiaries (including AHA) or its Affiliates
(other than the Company) that is a beneficial owner of Registrable
Securities (it being understood that Holder shall include any Person that
is on the date hereof or subsequently becomes a Holder, whether or not such
Person remains an AIG Subsidiary or Affiliate).
Indemnified Party: As defined in Section 6(c)(i).
Indemnified Person: As defined in Section 6(a).
Indemnifying Party: As defined in Section 6(c)(i).
IRS: The U.S. Internal Revenue Service.
Law: Shall have the meaning set forth in the Separation Agreement.
managing underwriter or underwriters: The Person or Persons selected
pursuant to Section 2 of this Agreement to manage an underwritten offering
of Registrable Securities.
Person: An individual, partnership, corporation, company, trust or
unincorporated organization, or a government or agency or political
subdivision thereof, or any other organization or entity.
2
Prospectus: The prospectus (including any preliminary prospectus and
any final prospectus) included in any Registration Statement, as amended or
supplemented by any free writing prospectus, whether or not required to be
filed with the SEC, prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by the
Registration Statement and by all other amendments and supplements to the
prospectus, and all material incorporated by reference in such prospectus.
Registrable Securities: Any Common Stock beneficially owned as of the
date hereof by AIG, its Subsidiaries (including AHA) or its Affiliates
(other than the Company); provided that a security ceases to be a
Registrable Security when:
(i) it has been effectively registered under the Securities Act and
disposed of in accordance with the Registration Statement covering it, or
(ii) it is distributed to the public pursuant to Rule 144 (or any
similar provisions then in force) under the Securities Act.
Registration Expenses: As defined in Section 5 hereof.
Registration Statement: Means either (a) a shelf registration
statement filed by the Company under the Securities Act permitting resales
of the Registrable Securities on a delayed or continuous basis pursuant to
the provisions of Section 2(a)(i) of this Agreement, or (b) in the
circumstances contemplated by Section 2(a)(ii), a registration statement
filed by the Company under the Securities Act meeting the requirements of
Section 2(a)(ii), and in either case including the Prospectus contained
therein, any amendments and supplements to such Registration Statement,
including post-effective amendments, and all exhibits and all material
incorporated by reference in such Registration Statement; provided that, in
any such case if the Registration Statement includes a plan of
distribution, such plan of distribution must be approved by AIG.
Rules and Regulations: The published rules and regulations of the SEC
promulgated under any of the Securities Act or the Exchange Act, as in
effect at any relevant time.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended from time to
time.
Separation Agreement: As defined in the Recitals.
Subsidiary: Means, with respect to any Person, any corporation,
general or limited partnership, joint venture, limited liability company,
limited liability partnership or other Person that is a legal entity, trust
or estate of which (or in which) (a) the issued and outstanding capital
stock having ordinary voting power to elect a majority of the
3
board of directors (or a majority of another body performing similar
functions) of such corporation or other Person (irrespective of whether at
the time capital stock of any other class or classes of such corporation or
other Person shall or might have voting power upon the occurrence of any
contingency), (b) more than 50% of the interest in the capital or profits
of such partnership, joint venture or limited liability company or (c) more
than 50% of the beneficial interest in such trust or estate, is at the time
of determination directly or indirectly beneficially owned or controlled by
such Person.
Suspension Period: As defined in Section 2(a)(iii) hereof.
Underwriting Agreement: Means the Underwriting Agreement, dated as of
__, 2009, between AIG, AHA, the Company and ▇▇▇▇▇▇▇ Sachs & Co., as
representative of the several underwriters.
underwritten offering: A transaction in which Registrable Securities
of the Company registered under the Securities Act are sold to an
underwriter or underwriters for reoffering to the public.
2. FILING OF REGISTRATION STATEMENTS
(a) Demand Registration.
(i) Until such time as all Registrable Securities cease to be
Registrable Securities, the Company agrees to use its reasonable efforts to
keep current and effective a shelf Registration Statement, and to file such
supplements or amendments to such Registration Statement as may be
necessary or appropriate in order to keep such shelf Registration Statement
continuously effective and useable, for the resale of Registrable
Securities under the Securities Act.
(ii) If the Company is no longer eligible to use a shelf Registration
Statement, the Company agrees within 30 days of a Holder's written request
to register the resale of a specified amount of the Registrable Securities
(which shall represent at least 5% of the outstanding Common Stock) under
the Securities Act, the Company will file a Registration Statement, on an
appropriate form, to register the resale of such Registrable Securities,
which Registration Statement will (if specified in the Holder's notice)
contemplate the ability of the Holders to effect an underwritten offering,
and will use its reasonable efforts to cause such Registration Statement to
become or be declared effective, and to file such supplements or amendments
to such Registration Statement as may be necessary or appropriate in order
to keep such Registration Statement effective and useable, for the resale
of Registrable Securities under the Securities Act, through the completion
of the offering thereof.
(iii) Notwithstanding anything to the contrary contained in this
Agreement, the Company shall be entitled, from time to time, by providing
prior written notice to the
4
Holders, to require such Holders to suspend the use of the Prospectus
included in any Registration Statement for resales of Registrable
Securities under any shelf Registration Statement pursuant to Section
2(a)(i) or to postpone the filing or suspend the use of any Registration
Statement pursuant to Section 2(a)(ii) for a reasonable period of time not
to exceed 60 days in succession (or a longer period of time with the prior
written consent of AIG, which consent shall not be unreasonably withheld)
or two times in any one year period (a "Suspension Period") if (A) the
Board determines in good faith that effecting the registration (or
permitting sales under an effective registration) would materially and
adversely affect an offering of securities of the Company, (B) the Company
is in possession of material non-public information and the Board
determines in good faith that the disclosure of such information during the
period specified in such notice would be materially detrimental to the
Company, or (C) the Company shall determine that it is required to disclose
in any such Registration Statement a contemplated financing, acquisition,
corporate reorganization or other similar transaction or other material
event or circumstance affecting the Company or its securities, and the
Board determines in good faith that the disclosure of such information at
such time would be materially detrimental to the Company or the holders of
its equity securities.
(iv) After the expiration of any Suspension Period and without any
further request from a Holder, the Company shall as promptly as reasonably
practicable prepare a Registration Statement or post-effective amendment or
supplement to the applicable shelf Registration Statement or Prospectus, or
any document incorporated therein by reference, or file any other required
document so that, as thereafter delivered to purchasers of the Registrable
Securities included therein, the Prospectus will not include a material
misstatement or omission or be not effective and useable for resale of
Registrable Securities.
(v) If at any time or from time to time the Holders desire to sell
Registrable Securities representing at least 5% of the outstanding Common
Stock in an underwritten offering, the managing underwriter or underwriters
for such offering shall be selected by AIG. The Holders will provide the
Company with prior notice of any such underwritten offering, such notice to
be provided as soon as reasonably practicable after the Holders determine
to proceed with such offering. The Company shall use its reasonable efforts
to assist such managing underwriter or underwriters in their efforts to
sell Registrable Securities pursuant to such Registration Statement and
shall use reasonable efforts to make senior executives with appropriate
seniority and expertise reasonably available for "road show" or other
presentations during the marketing period.
(b) No Piggyback Registration Rights. The Company shall not, without the
prior written consent of AIG and AHA (which consent may be withheld in AIG's and
AHA's sole discretion), grant or enter into any agreement or undertaking that
would permit any Person (other than the Company) to sell Common Stock along with
sales of the Registrable Securities whether or not in an underwritten offering.
5
(c) Undertaking to be Bound by this Agreement. Each Holder which is not an
original party to this Agreement and whose Registrable Securities are included
in a Registration Statement filed with the SEC pursuant to this Section 2 shall
be deemed without any further action to be a party to this Agreement with all
rights and obligations of a Holder hereunder and if requested by the Company,
shall execute and deliver an undertaking in form and substance reasonably
satisfactory to the Company whereby such Holder agrees to be bound by the terms
and provisions of this Agreement.
3. RESTRICTIONS ON PUBLIC SALE BY THE COMPANY AND OTHERS
The Company agrees that it will not, without the prior written consent of
AIG and AHA and the managing underwriter or underwriters of any
underwritten offering (which shall represent at least 5% of the outstanding
Common Stock) under a Registration Statement filed pursuant to Section
2(a), offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any Common Stock, during the period from the date of receipt of
timely notice of the intent to price an underwritten offering from the
managing underwriter or underwriters (which notice may be delivered up to
15 business days before pricing) to the date 90 days after the pricing date
of such underwritten offering. The foregoing restrictions shall not apply
to issuances of Common Stock (or securities convertible into or exercisable
or exchangeable for Common Stock) by the Company (i) upon conversion,
exchange or exercise of convertible, exchangeable or exercisable securities
outstanding as of the date of pricing of the underwritten offering or under
any existing employee benefit plans, (ii) in connection with strategic
alliances or transactions involving the Company, (iii) in connection with
registration statements filed in connection with future business
combination transactions or (iv) in connection with registration statements
on Form S-8 filed to register shares of Common Stock that are issuable
pursuant to existing employee benefit plans of the Company; provided that
any Person receiving shares of Common Stock in a transaction excepted by
clauses (ii) or (iii) above shall agree to be bound by the restrictions set
forth in this Section 3.
4. REGISTRATION PROCEDURES
In connection with the Company's obligations to keep current and effective
each Registration Statement pursuant to Section 2 hereof, the Company will
use its reasonable efforts to effect such registration to permit the sale
of such Registrable Securities in accordance with the intended method or
methods of disposition thereof, and pursuant thereto the Company will as
expeditiously as possible use its reasonable efforts to:
(a) before filing a Registration Statement or Prospectus or any amendments
or supplements thereto, excluding documents incorporated by reference in the
Registration Statement, furnish to AIG, AHA and the managing underwriter or
underwriters, if any, copies of all such documents proposed to be filed, which
documents will be subject to the review of AIG, AHA and the managing underwriter
or underwriters, and the Company will not file any Registration Statement or
amendment thereto or any Prospectus or any supplement thereto
6
(excluding such documents incorporated by reference and proposed to be filed
after the initial filing of the Registration Statement) to which AIG, AHA or the
managing underwriter or underwriters, if any, shall reasonably and timely
object; provided, that the Company may assume, for the purposes of this
paragraph (a), that objections to the inclusion of information (i) requested by
the staff of the SEC to be included in the Registration Statement or other
documents, (ii) required, in the opinion of counsel to the Company, to be in the
Registration Statement or other documents, or (iii) required by the Securities
Act or the Rules and Regulations thereunder to be in the Registration Statement
or other documents, shall not be deemed to be reasonable objections; and,
provided, further, that the Company shall, to the extent reasonably practicable
in light of the circumstances, consult with AIG, AHA and the managing
underwriter or underwriters as to any document that is to be incorporated by
reference in the Registration Statement during the marketing period of any
underwritten offering until the closing of such underwritten offering;
(b) prepare and file with the SEC such amendments and post-effective
amendments to the Registration Statement, and such supplements to the
Prospectus, as may be required by the Rules and Regulations or the instructions
applicable to the registration form utilized by the Company or by the Securities
Act or the Rules and Regulations thereunder for registration or otherwise
necessary to keep the Registration Statement effective and cause the Prospectus
as so supplemented to be filed pursuant to Rule 424 under the Securities Act;
and comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement in
accordance with the intended methods of disposition by the sellers thereof set
forth in such Registration Statement or supplement to the Prospectus;
(c) notify AIG, AHA and the managing underwriter or underwriters, if any,
promptly, and confirm such advice in writing,
(i) when the Registration Statement, any pre-effective amendment
thereto, the Prospectus or any prospectus supplement or post-effective
amendment to the Registration Statement has been filed, and, with respect
to the Registration Statement or any post-effective amendment, when the
same has become effective,
(ii) of any comments by the SEC and the "Blue Sky" or securities
commissioner or regulator of any state with respect to the Registration
Statement, the Prospectus or any prospectus supplement or any request by
the SEC for amendments or supplements to the Registration Statement, the
Prospectus or any prospectus supplement or for additional information,
(iii) of the issuance by the SEC or any other regulatory authority of
any stop order suspending the effectiveness of the Registration Statement
or the initiation or threatening of any proceedings for that purpose,
(iv) if at any time the representations and warranties of the Company
contemplated by paragraph (m) below cease to be true and correct,
7
(v) of the receipt by the Company of any notification with respect to
the suspension of the qualification of the Registrable Securities for sale
under the securities or "Blue Sky" laws of any jurisdiction or the
initiation or threatening of any proceeding for such purpose, and
(vi) of the existence of any fact which results in the Registration
Statement, any amendment or post-effective amendment thereto, the
Prospectus, any prospectus supplement, or any document incorporated therein
by reference containing an untrue statement of material fact or omitting to
state a material fact required to be stated therein or necessary to make
the statements therein not misleading;
(d) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the Registration Statement at the earliest
possible moment;
(e) if requested by the managing underwriter or underwriters, AHA or AIG,
as soon as practicable incorporate in a prospectus supplement or post-effective
amendment such information as the managing underwriter or underwriters, AHA or
AIG reasonably request to be included therein relating to the sale of the
Registrable Securities, including without limitation, information with respect
to the amount of Registrable Securities being sold to such underwriter or
underwriters, the purchase price being paid therefor by such underwriter or
underwriters and with respect to any other terms of the underwritten offering
(including whether such underwriting commitment is on a firm commitment or best
efforts basis) of the Registrable Securities to be sold in such offering; and
make all required filings of such prospectus supplement or post-effective
amendment promptly upon notice of the matters to be incorporated in such
prospectus supplement or post-effective amendment;
(f) furnish to AIG, to each selling Holder, and to each managing
underwriter or underwriters, without charge, at least one signed copy of the
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, all documents incorporated therein by
reference and all exhibits (including those incorporated by reference therein);
(g) deliver to AIG, each selling Holder and each underwriter, if any,
without charge, as many copies (including an electronic copy) of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto
as such Persons may reasonably request; the Company consents to the use of the
Prospectus or any amendment or supplement thereto by each of the selling Holders
and each underwriter, if any, in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or supplement
thereto;
(h) prior to any public offering of Registrable Securities, use its
reasonable efforts to register or qualify or cooperate with AIG, the selling
Holders, the managing underwriter or underwriters, if any, and their respective
counsel in connection with the registration or qualification of such Registrable
Securities for offer and sale under the securities or "Blue Sky" laws of such
jurisdictions as AIG, any selling Holder or underwriter reasonably requests in
8
writing and do any and all other acts or things necessary or advisable to enable
the disposition in such jurisdictions of the Registrable Securities covered by
the Registration Statement; provided that the Company will not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action which would subject it to general service of
process in any such jurisdiction where it is not then so subject;
(i) cooperate with AIG, the selling Holders and the managing underwriter or
underwriters, if any, to facilitate the timely preparation and delivery of the
Registrable Securities to be sold; and enable such Registrable Securities to be
in such denominations and registered in such names as AIG, the selling Holder or
the managing underwriter or underwriters, if any, may request at least two
business days prior to any delivery of Registrable Securities;
(j) use its reasonable efforts to cause the Registrable Securities covered
by the applicable Registration Statement to be registered with or approved by
such other governmental agencies or authorities, federal, state or local, as may
be necessary to enable the seller or sellers thereof or the underwriter or
underwriters, if any, to consummate the disposition of such Registrable
Securities;
(k) except as permitted by Section 2(a)(iii), if any fact contemplated by
paragraph (c)(vi) above shall exist, prepare a post-effective amendment or
supplement to the Registration Statement or the related Prospectus or any
document incorporated therein by reference or file any other required document
so that the Prospectus, as thereafter delivered to the purchasers of the
Registrable Securities, will not contain an untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading;
(l) use its reasonable efforts to cause all Registrable Securities covered
by the Registration Statement to be listed on each securities exchange on which
the Common Stock is then listed, if any;
(m) enter into such customary agreements (including a customary
underwriting agreement with the underwriter or underwriters, if any) and take
all such other actions in connection therewith in order to expedite or
facilitate the disposition of such Registrable Securities and in such
connection, whether or not an underwriting agreement is entered into and whether
or not the Registrable Securities are to be sold in an underwritten offering:
(i) make such representations and warranties to AIG, the selling
Holders of such Registrable Securities and the underwriter or underwriters,
if any, in form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings of equity securities;
(ii) cause to be delivered to the sellers of Registrable Securities
and the underwriter or underwriters, if any, opinions of counsel to the
Company, dated, in the case of an underwritten offering, the date of
delivery of any Registrable Securities sold
9
pursuant thereto which counsel and opinions (in form, scope and substance)
shall be reasonably satisfactory to the managing underwriter or
underwriters, if any, AIG and the selling Holders, addressed to AIG, each
selling Holder and each underwriter, if any, covering the matters
customarily covered in opinions requested in underwritten offerings of
common stock and such other matters as may be reasonably requested by AIG
or the selling Holders or the appointed representative of or counsel to AIG
and the selling Holders (it being agreed that the matters to be covered by
such opinions shall include and shall cover both the date of the first
contract to sell the Registrable Securities and the date of delivery of any
Registrable Securities sold pursuant thereto);
(iii) cause to be delivered, in the case of an underwritten offering,
at the time of delivery of any Registrable Securities sold pursuant
thereto, letters from the Company's independent certified public
accountants addressed to AIG, each selling Holder and each underwriter, if
any, in customary form and covering such financial and accounting matters
as are customarily covered by letters of independent certified public
accountants delivered in connection with underwritten public offerings of
common stock;
(iv) if an underwriting agreement is entered into, the same shall
provide for indemnification of the underwriters by the Company in customary
form; and
(v) the Company shall deliver such documents and certificates as may
be reasonably requested by AIG, any Holder selling Registrable Securities
or the managing underwriter or underwriters, if any, to evidence compliance
with clause (i) above and with any customary conditions contained in the
underwriting agreement, if any, or other agreement entered into by the
Company in connection with such offering.
The above shall be done at each closing under such underwriting or similar
agreement or as and to the extent required thereunder;
(n) make available for inspection by a representative or representatives of
AIG or the selling Holders, any underwriter participating in any disposition
pursuant to a Registration Statement, and any attorney or accountant retained by
AIG or such selling Holders or underwriter, all financial and other records,
pertinent corporate documents and properties of the Company, and cause the
Company's officers, directors and employees to supply all information reasonably
requested by any such representative, underwriter, attorney or accountant in
connection with such Registration Statement; provided that AIG shall not, and
shall cause its Affiliates and representatives having access to information of
the Company that is either oral or in writing and that is confidential or
proprietary ("Confidential Information") not to, disclose any Confidential
Information; provided, however, that AIG may disclose Confidential Information
to the extent permitted by applicable Law: (i) to its representatives on a
need-to-know basis in connection with the exercise of rights or the performance
of obligations under this Agreement, provided that such representatives are
informed of the confidential nature of such information and made aware of the
provisions of this 4(n); (ii) to the extent reasonably necessary in connection
with any action or in any dispute with respect to this Agreement; (iii) to the
extent
10
such information is required to be disclosed by applicable Law, Governmental
Order or Governmental Authority (including in any report, statement, testimony
or other submission to a Governmental Authority) or in response to any summons,
subpoena or other legal process or formal or informal investigative demand
issued to AIG or AHA in the course of any litigation, arbitration, mediation,
investigation or administrative proceeding; (iv) to the extent any such
information is or becomes generally available to the public other than as a
result of disclosure by AIG, AHA or any of their Subsidiaries or any of their
Affiliates or representatives; and provided further, however, (A) AIG and AHA
may disclose Confidential Information related to the Company to AIG's and AHA's
representatives who need to know such information for the purpose of evaluating,
monitoring or taking any other action with respect to AIG's and/or AHA's
investment in the Company and its Subsidiaries, and (B) AIG and AHA may disclose
Confidential Information delivered to them by the officers designated by them,
respectively, to receive the information contemplated by Section 5.4 of the
Stockholders Agreement to each other, their respective Affiliates and their
respective Representatives, provided that in the cases of clauses (A) and (B)
above, such representatives are informed of the confidential nature of such
information and made aware of the provisions of this Section 4(n).
In the event that AIG or AHA becomes required (based on advice of counsel) by
deposition, interrogatory, request for documents subpoena, civil investigative
demand or similar judicial or administrative process or in connection with a
report, statement, testimony or other submission to be made to any Governmental
Authority to disclose any Confidential Information, the disclosing party shall
provide the Company, to the extent reasonably practicable, with prior written
notice of such requirement, and, to the extent reasonably practicable, cooperate
with the Company (at the Company's expense) to obtain a protective order or
similar remedy to cause such Confidential Information not to be disclosed;
provided, however, that none of AIG, AHA or any of their respective Affiliates
is required to provide such prior written notice with respect to any disclosure
to the FRBNY. In the event that such protective order or other similar remedy is
not obtained, the disclosing party shall furnish only that portion of the
Confidential Information that it reasonably believes is required to be disclosed
and shall exercise its commercially reasonable efforts (at the Company's
expense) to obtain assurance that confidential treatment will be accorded such
Confidential Information.
Notwithstanding anything to the contrary contained herein, the parties hereto
acknowledge and agree that AIG, AHA and their respective Affiliates may, without
notifying the Company or any other Person, share any information relating to or
obtained from the Company or any of its Subsidiaries with (i) the FRBNY or the
U.S. Department of the Treasury and their respective Representatives, (ii) the
AIG Credit Facility Trust, (iii) any insurance regulatory authority or (iv) the
IRS or any other tax authority, in each case as AIG deems necessary or advisable
in its good faith judgment.
To the fullest extent permitted by applicable Laws, the provisions of this
Section 4(n) shall not restrict or limit the use of or disclosure by AIG, AHA or
any of their respective Affiliates of any customer, policy or beneficiary
information (including such information relating to the Company and its
Subsidiaries) if such information was in the possession or control of AIG, AHA
or their
11
respective Affiliates prior to the date hereof. For the avoidance of doubt, the
foregoing shall apply regardless of whether such information (i) was also
possessed or controlled by the Company or any of its Subsidiaries on or prior to
the date hereof and/or (ii) was originated by any other Person; and
(o) otherwise use its reasonable efforts to comply with all applicable
Rules and Regulations, and make generally available to its security holders
earnings statements satisfying the provisions of Section 11(a) of the Securities
Act, no later than 40 days after the end of any 12-month period (or 60 days, if
such period is a fiscal year) commencing on the date of the filing of any
Prospectus relating to the sale of Registrable Securities, which statements
shall cover a 12-month period.
The Company may require each selling Holder as to which any registration is
being effected to furnish to the Company such information regarding the
distribution of such securities as the Company may from time to time reasonably
request in writing and as shall be required by law or by the SEC in connection
with any registration.
Each Holder agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 4(c)(vi) hereof, such
Holder will forthwith discontinue disposition of Registrable Securities until
such Holder's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 4(k) hereof, or until it is advised in writing by the
Company that the use of the Prospectus may be resumed.
5. REGISTRATION EXPENSES
(a) All expenses incident to the Company's performance of or compliance
with this Agreement, at or prior to the time that the Holders shall have
completed three underwritten offerings pursuant hereto (it being understood that
the offering effected pursuant to the Underwriting Agreement shall not be deemed
to have been effected pursuant hereto), including without limitation:
(i) all registration and filing fees (including fees with respect to
filings required to be made with the Financial Industry Regulatory
Authority ("FINRA")), unless the required filing or filings arise solely by
reason of the status of the Holders or any of their Affiliates, or their
intended use of proceeds of the offering (in which case such fees shall be
the responsibility of the Holders);
(ii) fees and expenses of compliance with securities or "Blue Sky"
laws (including reasonable fees and disbursements of one counsel for the
selling Holders and underwriter or underwriters in connection with the
registration or qualification of the Registrable Securities under
applicable state securities laws and determination of their eligibility for
investment under the laws of such jurisdictions as AIG, the managing
underwriter or underwriters or the Holders of Registrable Securities being
sold may designate);
12
(iii) all printing, messenger, telephone and delivery expenses of the
Company, including, without limitation, the expenses of printing the
Registration Statement and the Prospectus, the expenses of preparing the
Registrable Securities for delivery and the expenses of printing or
producing any agreement(s) among underwriters, underwriting agreement(s)
and "Blue Sky" or legal investment memoranda, any selling agreements and
any other documents in connection with the offering, sale or delivery of
Registrable Securities to be disposed of;
(iv) fees, disbursements and expenses of counsel for the Company;
(v) fees and disbursements of all independent certified public
accountants of the Company (including the expenses of any special audit and
accountants' letters required by or incident to such performance);
(vi) all fees and expenses incurred by the Company in connection with
the listing of the Registrable Securities on any securities exchange
pursuant to Section 4(l); and
(vii) fees and expenses of other Persons retained by the Company (all
such expenses being herein called "Registration Expenses");
will be borne by the Company, whether or not the Registration Statement becomes
effective. In connection with any subsequent underwritten offering effected by
the Holders pursuant hereto, all such out-of-pocket expenses reasonably incurred
by the Company shall be borne by the Holders, in proportion to the shares sold
by each of them in such offering. The Company will, in any event, pay its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit and the fees and expenses of any Person, including special
experts, retained by the Company.
6. INDEMNIFICATION
(a) Indemnification by Company.
(i) The Company agrees to indemnify and hold harmless each Holder,
each underwriter with respect to Registrable Securities and each of their
respective officers, directors, employees and agents and each Person who
controls such Holder or underwriter within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act (each such Person
being sometimes hereinafter referred to as an "Indemnified Person") from
and against any and all losses, claims, damages and liabilities caused by
any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement, preliminary prospectus or
Prospectus, including any amendment or supplement thereto, or caused by any
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, except insofar as such losses, claims, damages or
13
liabilities relate to any untrue statement or omission or alleged untrue
statement or omission based upon information furnished in writing to the
Company by any Holder or underwriter expressly for use therein.
(ii) The Company will also indemnify selling brokers, dealers and
similar securities industry professionals participating in the
distribution, their officers, directors and partners and each Person who
controls such Persons (within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act) to the same extent as provided in
Section 6(a)(i) with respect to the indemnification of the Holders and
underwriters of Registrable Securities and such Persons shall be deemed
"Indemnified Persons" for all purposes of this Section 6.
(b) Indemnification by Selling Holders. Each selling Holder agrees
severally, and not jointly, to indemnify and hold harmless the Company, its
directors, its officers who sign any Registration Statement and each Person, if
any, who controls the Company within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Company to such Holder (but not in an amount
exceeding the net proceeds to such Holder from the offering of its Registrable
Securities pursuant to such Registration Statement), but only with reference to
information relating to such Holder furnished in writing by such Holder to the
Company expressly for use in any Registration Statement, preliminary prospectus,
or Prospectus, including any amendment or supplement thereto.
(c) Proceedings.
(i) In case any proceeding (including any governmental investigation)
shall be instituted involving any Person in respect of which indemnity may
be sought pursuant to either Section 6(a) or 6(b), such Person (the
"Indemnified Party") shall promptly notify the Person against whom such
indemnity may be sought (the "Indemnifying Party") in writing and the
Indemnifying Party, upon request of the Indemnified Party, shall retain
counsel reasonably satisfactory to the Indemnified Party to represent the
Indemnified Party and any others the Indemnifying Party may designate in
such proceeding and shall pay the fees and disbursements of such counsel
related to such proceeding.
(ii) In any such proceeding, any Indemnified Party shall have the
right to retain its own counsel, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless (a) the
Indemnifying Party and the Indemnified Party shall have mutually agreed to
the retention of such counsel or (b) the named parties to any such
proceeding (including any impleaded parties) include both the Indemnifying
Party and the Indemnified Party and representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them.
(iii) It is understood that the Indemnifying Party shall not, in
connection with any proceeding or related proceedings in the same
jurisdiction, be liable for (a) the reasonable fees and expenses of more
than one separate firm for all underwriters, selling
14
brokers, dealers and similar securities industry professionals and all
persons, if any, who control such Persons within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act and (b)
the reasonable fees and expenses of more than one separate firm for all
selling Holders and all Persons, if any, who control selling Holders within
the meaning of either such Section.
(iv) In the case of any such separate firm for the underwriters,
selling brokers, dealers and similar securities industry professionals and
such control Persons, such firm shall be designated in writing by the
managing underwriter or underwriters. In the case of any such separate firm
for the selling Holders and such control Persons of selling Holders, such
firm shall be designated in writing by the Holder. The Indemnifying Party
shall not be liable for any settlement of any proceeding effected without
its written consent, but if settled with such consent or if there is a
final judgment for the plaintiff, the Indemnifying Party agrees to
indemnify the Indemnified Party from and against any loss or liability by
reason of such settlement or judgment.
(d) Contribution.
(i) If the indemnification provided for in this Section 6 is
unavailable to an Indemnified Party under Section 6(a) or Section 6(b)
hereof or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims,
damages or liabilities in such proportion as is appropriate to reflect the
relative fault of the Company on the one hand and of the Holder or
underwriter, selling broker, dealer or similar securities professional, as
the case may be, on the other hand, in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative fault of
the Company on the one hand and of the Holder or underwriter, selling
broker, dealer or similar securities professional, as the case may be, on
the other hand shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company, by the Holder or by the underwriter,
selling broker, dealer or similar securities professional and the parties'
relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(ii) The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 6 were determined by pro
rata allocation (even if the Holders or the underwriters were treated as
one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an
Indemnified Party as a result of the losses, claims, damages and
liabilities referred to in the immediately preceding paragraph shall be
deemed to include any legal or other expenses reasonably incurred by such
Indemnified Party in connection with investigating
15
or defending any such action or claim. Notwithstanding the provisions of
this Section, no Holder or underwriter, selling broker, dealer or similar
securities professional shall be required to contribute any amount in
excess of the amount by which (a) in the case of any Holder, the net
proceeds received by such Holder from the sale of Registrable Securities or
(b) in the case of an underwriter, selling broker, dealer or similar
securities professional, the total price at which the Registrable
Securities purchased by it and distributed to the public were offered to
the public exceeds, in any such case, the amount of any damages that the
Holders or such underwriter, selling broker, dealer or similar securities
professional has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. No Person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation. The obligations to
contribute pursuant to this Section 6 of the Indemnified Persons are
several and not joint.
(e) Cumulative Obligations. The obligations of the Company under this
Section 6 shall be in addition to any liability which the Company may otherwise
have to any Indemnified Person.
(f) Survival. The indemnity and contribution agreements contained in this
Section 6 and the representations and warranties of the Company referred to in
Section 4(m)(i) shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement or any underwriting agreement, (ii) any
investigation made by or on behalf of any Indemnified Person or by or on behalf
of the Company and (iii) the consummation of the sale or successive resales of
the Registrable Securities.
7. RULE 144
The Company covenants that it shall use its reasonable efforts to file the
reports required to be filed by it under the Securities Act and the
Exchange Act and the Rules and Regulations and it will take such further
action as any Holder may reasonably request, all to the extent required
from time to time to enable such Holder to sell Registrable Securities
without registration under the Securities Act within the limitation of the
exemptions provided by (a) Rule 144 under the Securities Act, as such Rule
may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the SEC. Upon the reasonable request of any Holder ,
the Company will deliver to such Holder a written statement as to whether
it has complied with such information and requirements.
8. MISCELLANEOUS
(a) Remedies. Each Holder, in addition to being entitled to exercise all
rights provided herein and granted by law, including recovery of damages, will
be entitled to specific performance of its rights under this Agreement. Each
party agrees that monetary damages
16
would not be adequate compensation for any loss incurred by reason of a breach
by it of the provisions of this Agreement and hereby agrees to waive the defense
in any action for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not on or after the date
of this Agreement enter into any agreement with respect to its securities which
is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof.
(c) Amendment and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
without the prior written consent of the parties hereto.
(d) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing and delivered personally, by telegram, by
telecopy or sent by overnight courier, postage prepaid:
(i) if to a Holder, at the most current address given by such Holder
to the Company in accordance with the provisions of this Section 8(d),
which address initially is American International Group, Inc., ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: General Counsel, with a copy
to ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., Esq.; or
(ii) if to the Company, at Transatlantic Holdings, Inc., ▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, with a copy to
▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
or to such other address as any party may, from time to time, designate in a
written notice given in a like manner. Notice given by telegram or telecopy
shall be deemed delivered when evidence of the transmission is received by the
sender and shall be confirmed in writing by overnight courier, postage prepaid.
Notice given by overnight courier as set out above shall be deemed delivered the
business day after the date the same is mailed.
(e) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors and assigns of each of the parties, including
without limitation and without the need for an express assignment, subsequent
Holders of Registrable Securities and the Indemnified Persons specified in
Section 6. The Company may not assign its rights or delegate its obligations
under this Agreement without the prior written consent of AIG and the Holders.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
17
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE
TO CONFLICT OF LAW PRINCIPLES.
(i) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
(j) Attorneys' Fees. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly asserted
as a defense, the successful party shall be entitled to recover reasonable
attorneys' fees in addition to its costs and expenses and any other available
remedy.
(k) Effective Time. This Agreement shall become effective as of the First
Time of Delivery. In the event that the First Time of Delivery shall not occur,
this Agreement will be of no force or effect.
18
IN WITNESS WHEREOF, the parties have executed this agreement as of the date
first written above.
TRANSATLANTIC HOLDINGS, INC.
By:
------------------------------------
Name:
Title:
AMERICAN INTERNATIONAL GROUP, INC.
By:
------------------------------------
Name:
Title:
AMERICAN HOME ASSURANCE COMPANY
By:
------------------------------------
Name:
Title:
19
EXHIBIT D
FORM OF TRANSITION SERVICES AGREEMENT
See Attached.
D-1
================================================================================
FORM OF TRANSITION SERVICES AGREEMENT
dated as of [__], 2009
between
AMERICAN INTERNATIONAL GROUP, INC.
and
TRANSATLANTIC HOLDINGS, INC.
================================================================================
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms 1
ARTICLE II
SERVICES AND ACCESS TO FACILITIES
Section 2.01. Services .................................................... 4
Section 2.02. Access to Facilities ........................................ 4
Section 2.03. Additional Services and Access to Additional Facilities ..... 4
Section 2.04. Exception to Obligation to Provide Services or Access to
Facilities ............................................... 4
Section 2.05. Standard of the Provision of Services or Access to
Facilities ............................................... 4
Section 2.06. Change in Services or Access to Facilities .................. 5
Section 2.07. Services and Access to Facilities Provided by Other
Persons .................................................. 5
Section 2.08. Personnel ................................................... 5
Section 2.09. Cooperation ................................................. 6
Section 2.10. Electronic and Other Access ................................. 6
Section 2.11. No Agency ................................................... 7
Section 2.12. Ownership of Intellectual Property .......................... 7
Section 2.13. Divestitures ................................................ 8
Section 2.14. Migration ................................................... 9
Section 2.15. Primary Points of Contact for this Agreement ................ 10
ARTICLE III
COSTS AND DISBURSEMENTS
Section 3.01. Costs and Disbursements ..................................... 11
Section 3.02. No Right to Set-Off ......................................... 13
ARTICLE IV
WARRANTIES AND COMPLIANCE
Section 4.01. Disclaimer of Warranties .................................... 13
Section 4.02. Compliance with Laws and Regulations ........................ 13
ARTICLE V
LIMITED LIABILITY AND INDEMNIFICATION
Section 5.01. Limited Liability of a Provider ............................. 13
Section 5.02. Indemnification of Each Recipient by the Relevant Provider .. 14
Section 5.03. Indemnification of Each Provider by the Relevant Recipient .. 14
Section 5.04. Additional Limitations on Liability ......................... 14
Section 5.05. Insurance ................................................... 15
Section 5.06. Procedures .................................................. 15
Section 5.07. Exclusive Remedy ............................................ 15
ARTICLE VI
TERM AND TERMINATION
Section 6.01. Term and Termination ........................................ 16
Section 6.02. Termination Charges ......................................... 17
Section 6.03. Effect of Termination ....................................... 18
Section 6.04. Force Majeure ............................................... 18
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.01. Representations and Warranties of AIG ....................... 19
Section 7.02. Representations and Warranties of the Company ............... 20
ARTICLE VIII
GENERAL PROVISIONS
Section 8.01. Treatment of Confidential Information ....................... 21
Section 8.02. Notices ..................................................... 22
Section 8.03. Severability ................................................ 24
Section 8.04. Entire Agreement ............................................ 24
Section 8.05. Assignment .................................................. 24
Section 8.06. No Third-Party Beneficiaries ................................ 24
Section 8.07. Amendment; Waiver ........................................... 25
Section 8.08. Dispute Resolution .......................................... 25
Section 8.09. Governing Law; Waiver of Jury Trial ......................... 27
ii
Section 8.10. Rules of Construction ....................................... 27
Section 8.11. Obligations of Parties ...................................... 28
Section 8.12. Counterparts ................................................ 28
Section 8.13. Effective Time .............................................. 28
iii
TRANSITION SERVICES AGREEMENT
This TRANSITION SERVICES AGREEMENT, dated as of [__], 2009 (this
"Agreement"), is entered into by and between American International Group, Inc.,
a Delaware corporation ("AIG"), and Transatlantic Holdings, Inc., a Delaware
corporation (the "Company").
RECITALS
WHEREAS, AIG, American Home Assurance Company, a New York domiciled
insurance company ("AHAC") and the Company have entered into that certain Master
Separation Agreement, dated as of May 28, 2009 (as amended, modified or
supplemented from time to time in accordance with its terms, the "Separation
Agreement"), relating to the separation of the Company from AIG; and
WHEREAS, in connection with the Separation Agreement, AIG shall
provide or cause to be provided to the Company Entities certain services, access
to facilities, equipment, software and other assistance on a transitional basis
commencing immediately following the First Time of Delivery and in accordance
with the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Certain Defined Terms.
(a) Unless otherwise defined herein, all capitalized terms used herein
shall have the same meanings as set forth in the Separation Agreement.
(b) The following capitalized terms used in this Agreement shall have
the meanings set forth below:
"AAA" shall have the meaning set forth in Section 8.08(b).
"Additional Facilities" shall have the meaning set forth in Section
2.03.
"Additional Services" shall have the meaning set forth in Section
2.03.
"Agreement" shall have the meaning set forth in the Preamble.
"AHAC" shall have the meaning set forth in the Recitals.
"AIG" shall have the meaning set forth in the Preamble.
"AIG Contract Manager" shall have the meaning set forth in Section
2.15(a)(ii).
"AIG Entities" means AIG and its Affiliates, excluding the Company
Entities.
"AIG Indemnified Person" means each AIG Entity and its
Representatives.
"AIG Provider" means AIG or a Provider that is an Affiliate of AIG
after the First Time of Delivery.
"Archived Files" shall have the meaning set forth in Section 2.10(a).
"Company" shall have the meaning set forth in the Preamble.
"Company Contract Manager" shall have the meaning set forth in Section
2.15(a)(i).
"Company Entities" means the Company and the Company Subsidiaries.
"Company Indemnified Person" means the Company and each Company
Subsidiary, their respective Affiliates and their respective Representatives.
"Confidential Information" shall have the meaning set forth in Section
8.01(a).
"Dispute" shall have the meaning set forth in Section 8.08.
"Facilities" shall have the meaning set forth in Section 2.02.
"Force Majeure" means, with respect to a Party, an event beyond the
control of such Party or any Person acting on its behalf, including acts of God,
storms, floods, riots, fires, earthquakes, sabotage, civil commotion or civil
unrest, strikes, lockouts or other labor difficulties, interference by civil or
military authorities, riots, insurrections or other hostilities, embargo, fuel
or energy shortage, acts of Governmental Authorities (including bank closings
and seizures and other Governmental Orders), acts of war (declared or
undeclared) or armed hostilities or other national or international calamity or
one or more acts of terrorism or failure or interruption of networks or energy
sources.
"Indemnified Person" means an AIG Indemnified Person or a Company
Indemnified Person.
"IRS" means the US Internal Revenue Service.
"Knowledge" of a Person means in the case of the Company, the actual
knowledge of any Person listed on Annex II, subject to the subject matter
limitations set forth on such schedule.
"Licensee" shall have the meaning set forth in Section 2.12(a).
"Licensor" shall have the meaning set forth in Section 2.12(a).
"Migration Services" shall have the meaning set forth in Section
2.14(a).
"Migration Services Charges" shall have the meaning set forth in
Section 2.14(a).
2
"Migration Services Provider" shall have the meaning set forth in
Section 2.14(a).
"Migration Services Recipient" shall have the meaning set forth in
Section 2.14(a).
"Notice of Dispute" shall have the meaning set forth in Section
8.08(a).
"Party" means AIG and the Company individually, and, in each case,
their respective successors and permitted assigns. "Parties" means AIG and the
Company collectively, and, in each case, their respective successors and
permitted assigns.
"Pass-Through Charges" shall have the meaning set forth in Section
3.01(b).
"Provider" means AIG and any Person that AIG causes to provide to any
Recipient a Service or access to a Facility under this Agreement, in its
capacity as the provider of such Service or access to such Facility, other than
any Person who provides any Company Entity any Service or access to any Facility
under a separate transition services agreement or similar Contract.
"Recipients" means the Company Entities, in their capacity as the
recipients of the Services and access to the Facilities under this Agreement.
"Required Technology" shall have the meaning set forth in Section
2.10(b).
"Separation Agreement" shall have the meaning set forth in the
Recitals.
"Service Charge" shall have the meaning set forth in Section 3.01(a).
"Services" shall have the meaning set forth in Section 2.01.
"VAT" means the tax imposed in accordance with Directive 2006/112/EC
and any permitted derogations therefrom, as well as any equivalent or similar
tax imposed under the laws of any jurisdiction that is not a Member State of the
European Union. For the avoidance of doubt, the term "VAT" shall not include any
sales or use tax imposed by any state or political subdivision of the United
States.
"Virus(es)" means any malicious computer code or instructions that
have a material adverse effect on the operation, security or integrity of (a) a
computing, telecommunications or other electronic operating or processing system
or environment, (b) software programs, data, databases or other computer files
or libraries or (c) computer hardware, networking devices or telecommunications
equipment, including (i) viruses, Trojan horses, time bombs, back door devices,
worms or any other software routine or hardware component designed to permit
unauthorized access, disable, erase or otherwise harm software, hardware or data
or perform any other such harmful or unauthorized actions and (ii) similar
malicious code or data.
3
ARTICLE II
SERVICES AND ACCESS TO FACILITIES
Section 2.01. Services. On the terms and subject to the conditions set
forth in this Agreement, from and after the First Time of Delivery and for the
periods set forth in Schedule 2.01, AIG shall provide or cause to be provided to
the Company Entities the services set forth in Schedule 2.01 (collectively with
any Additional Services, the "Services").
Section 2.02. Access to Facilities. On the terms and subject to the
conditions set forth in this Agreement, from and after the First Time of
Delivery and for the periods set forth in Schedule 2.02, AIG shall provide or
cause to be provided to the Company Entities access to the facilities, equipment
and software set forth in Schedule 2.02 (collectively with any Additional
Facilities, the "Facilities").
Section 2.03. Additional Services and Access to Additional Facilities.
Services or access to facilities, equipment or software not agreed upon in a
Schedule attached hereto but provided prior to the First Time of Delivery by an
AIG Entity to a Company Entity can be requested in writing within ninety (90)
calendar days of the First Time of Delivery by the Company upon reasonable
notice to AIG. Upon the mutual agreement of the Parties as to (a) the provision
of any such Additional Services or access to any such Additional Facilities and
(b) the terms and conditions thereof (including the appropriate Service Charges
related thereto), AIG shall provide or cause to be provided to the Company
Entities (i) such additional services (the "Additional Services") and (ii)
access to such additional facilities, equipment and software (the "Additional
Facilities").
Section 2.04. Exception to Obligation to Provide Services or Access to
Facilities. Notwithstanding anything to the contrary contained herein, including
Section 2.01 and Section 2.02, AIG shall not be obligated to (and shall not be
obligated to cause any Provider to) provide (a) any Services or (b) access to
any Facilities, if the provision of such Services or access to such Facilities
would (i) violate any Law or any agreement or license to which the AIG Entities
or the Company Entities are subject, including any Master Lease (as such term is
defined in the Separation Agreement) or (ii) result in the disclosure of
information subject to any applicable privileges (including the attorney-client
or similar privilege); provided, however, that AIG and the Company shall use
commercially reasonable efforts to obtain or cause to be obtained such
agreements, waivers and licenses necessary to provide such Services or access to
such Facilities and if AIG and the Company are unable to obtain such agreements,
waivers and licenses, AIG and the Company shall use reasonable efforts to agree
to the modification of the terms of the Services or access to any Facilities so
that the provision of the Services or the access to Facilities by AIG would not
result in the circumstances describes in clauses (i) and (ii) above; and
provided, further, that neither AIG nor the Company (nor any of their respective
Affiliates) shall be required to pay any fees or make other payments or incur
any obligations (unless the Recipient agrees to pay AIG or its Affiliates for
such fees or make such other payments or incur such obligations) to obtain any
such agreements, waivers or licenses.
Section 2.05. Standard of the Provision of Services or Access to
Facilities. AIG shall provide or cause to be provided the Services and access to
the Facilities at all times in a
4
manner and at a level that is substantially consistent with similar services and
access to facilities, equipment and software provided by AIG to the Recipient
during the one year period immediately prior to the First Time of Delivery. The
Company agrees that all of the Services and access to all of the Facilities
shall be for the sole use and benefit of the Company Entities and not any other
Affiliates of the Company and solely for the purpose of conducting the business
of the Company Entities in a manner substantially consistent with the manner in
which it was conducted immediately prior to the First Time of Delivery. No
Provider shall have any obligation to purchase, lease or license or renew a
lease or license applicable to any facility, equipment or software or to pay any
costs related to (a) the transfer or conversion of a Recipient's data to any
alternative provider of any Services or (b) the Recipient's access to any
Facilities.
Section 2.06. Change in Services or Access to Facilities. A Provider
may, from time to time, reasonably supplement, modify, substitute or otherwise
alter the Services and access to the Facilities; provided, however, that such
supplement, modification, substitution or alteration shall (a) result in the
quality of the Services or access to Facilities being substantially consistent
with or greater than the Services or access to Facilities provided prior thereto
and (b) subject to Section 6.01(d)(iv), not increase the cost of using such
Services or accessing such Facilities.
Section 2.07. Services and Access to Facilities Provided by Other
Persons. AIG may cause any Person, including any Affiliate of AIG, to provide
any Services or access to any Facilities or any portion thereof; provided,
however, that such Person shall be subject to service standards and
confidentiality provisions at least equivalent to those set forth herein and
that AIG shall remain primarily responsible for the performance by such Person
of all of its obligations hereunder with respect to the Services or access to
the Facilities provided by such Person so that such performance is in accordance
with the terms and conditions hereof.
Section 2.08. Personnel.
(a) AIG shall, and shall cause the Provider of any Service or access
to any Facility to, make available to the Recipient of such Service or access to
such Facility such personnel as may be necessary to provide such Service or
access to such Facility; provided, however, that the Provider shall have the
right, in its reasonable discretion, to (i) designate which personnel it will
assign to perform such Service or provide access to such Facility and (ii)
remove and replace such personnel at any time. Subject to Section 2.05, nothing
in this Agreement shall obligate a Provider (or AIG to cause any Provider) to
hire any additional employees or provide any incentives to employees in addition
to those in effect immediately prior to the First Time of Delivery or to retain
the employment of any particular employee or retain the services of any
particular consultant, contractor or agent.
(b) The Provider of any Service or access to any Facility shall be
solely responsible for all salary, employment and other benefits of and
liabilities relating to the personnel of such Provider assigned to perform such
Service or provide access to such Facility. In performing their respective
duties hereunder, all such personnel of a Provider shall be under the direction,
control and supervision of such Provider, and, subject to Section 2.05, such
5
Provider shall have the sole right to exercise all authority with respect to the
employment (including termination of employment), assignment and compensation of
such personnel.
Section 2.09. Cooperation. Each Recipient and its Affiliates shall use
its reasonable best efforts to (a) cooperate with the applicable Provider and
its Affiliates with respect to the provision of any Service and access to any
Facility and (b) enable the applicable Provider and its Affiliates to provide
the Services and access to the Facilities in accordance with this Agreement. No
Recipient or its Affiliates shall take any action that would materially
interfere with or materially increase the cost of a Provider's providing any of
the Services or access to any of the Facilities.
Section 2.10. Electronic and Other Access.
(a) As of the First Time of Delivery, except as otherwise expressly
provided in this Agreement or any other Transaction Agreement, (i) the Company
Entities shall cease to use and shall have no further access to, and AIG shall
have no obligation to otherwise provide or make available, any business or other
services, including any AIG Entity's intranet and other owned, licensed, leased
or used computer software, networks, hardware or technology of an AIG Entity,
provided or made available to the Company Entities by any AIG Entity prior to
the First Time of Delivery, and (ii) the Company Entities shall have no access
to, and the AIG Entities shall have no obligation to otherwise provide, any AIG
Entity's computer-based resources (including third-Person services, e-mail and
access to its computer networks, databases and equipment), whether or not such
resources require a password or are available on a secured access basis or on a
non-secured access basis. Notwithstanding anything to the contrary contained in
this Agreement or any other Transaction Agreement, to the extent that AIG or any
Affiliate of AIG has retained hard copies of files and electronic files, tapes,
software, electronic data, hardware, storage devices or other electronic
information that are not used in the operation of the business of the Company
Entities or required by the Company Entities for regulatory purposes ("Archived
Files") pursuant to a Litigation Hold or otherwise, the Company acknowledges and
agrees that the Archived Files are solely the property of AIG. AIG agrees that
it will retain the Archived Files that relate to the Company Entities for no
less than three (3) months after the First Time of Delivery after which AIG may
recycle or discard such Archived Files.
(b) To the extent that the performance or receipt of Services or
access to Facilities hereunder requires a Company Entity to have access to any
AIG Entity's intranet or other computer software, networks, hardware, technology
or computer-based resources (including third-Person services, e-mail and access
to computer networks, database and equipment) owned, licensed, leased or used by
any AIG Entity and any AIG Entity's computer based resources (including
third-Person services, e-mail and access to its computer networks, databases and
equipment), whether or not such resources require a password or are available on
a secured access basis or on a non-secured access basis ("Required Technology"),
AIG shall provide or cause to be provided limited access to such Required
Technology, subject to the security, use, Virus protection, disaster recovery,
confidentiality and other policies, procedures and limitations of the AIG
Entities, consistent with past practice, as they may be amended from time to
time in a manner that does not unreasonably interfere with any Company Entity's
receipt of Services or access to Facilities hereunder. The Company shall, and
shall cause each Recipient
6
and all of their personnel having access to the Required Technology to, (a)
comply with all the AIG Entities' security guidelines and procedures (including
physical security, network access, internet security, confidentiality and
personal data security guidelines and procedures), consistent with past
practice, as they may be amended from time to time in a manner that does not
unreasonably interfere with any Company Entity's receipt of Services or access
to Facilities hereunder, and (b) use commercially reasonable Virus protection,
disaster recovery and other policies, procedures and limitations of the AIG
Entities that are applicable to the provision of any Service or access to any
Facility, consistent with past practice, as they may be amended from time to
time in a manner that does not unreasonably interfere with any Company Entity's
receipt of Services or access to Facilities hereunder.
(c) While Services are being provided hereunder, each Party shall take
commercially reasonable measures to ensure that, in connection with the
provision of any Services or access to any Facilities, no Virus or similar items
are coded or introduced into either its own (including its Affiliates) or the
other Party's (including its Affiliates) computer networks or databases. If, in
connection with the provision of any Services or access to any Facilities, a
Virus is found to have been introduced into such computer networks or databases,
each Party shall use commercially reasonable efforts to cooperate and to
diligently work together with the other Party to eliminate the effects of such
Virus. The Parties shall, and shall cause their respective Providers and
Recipients to, exercise commercially reasonable care to prevent unauthorized
Persons from accessing the Services, or the computer and technology systems or
networks of any of the Providers.
Section 2.11. No Agency. Nothing in this Agreement shall be deemed in
any way or for any purpose to constitute any Party acting as an agent of another
unaffiliated Party in the conduct of such other Party's business. A Provider of
any Service or access to any Facility hereunder shall act as an independent
contractor and not as the agent of any Recipient or its Affiliates in performing
such Service or providing access to such Facility. Nothing contained in this
Agreement shall be deemed or construed to create a partnership or joint venture,
to create the relationships of employee/employer or principal/agent or otherwise
create any other association of any kind, each Party being individually
responsible only for its obligations set forth in this Agreement.
Section 2.12. Ownership of Intellectual Property.
(a) Except as otherwise expressly provided in this Agreement or in any
other Transaction Agreement, each of AIG and the Company and their respective
Affiliates shall retain all right, title and interest in and to their respective
Intellectual Property and any and all improvements, modifications and derivative
works thereof. Solely to the extent required for the provision or receipt of the
Services or access to the Facilities in accordance with this Agreement, each of
AIG and the Company, for itself and on behalf of their respective Affiliates,
hereby grants to the other (and their respective Affiliates) a non-exclusive,
revocable, non-transferable (except as provided in Section 8.05) license during
the term of this Agreement to access and use such Intellectual Property that is
provided by the granting Party ("Licensor") to the other Party ("Licensee") in
connection with this Agreement, but only to the extent and for the duration
necessary for the Licensee to provide or receive the applicable Service or
access to the applicable Facility as permitted by this Agreement. Upon the
expiration of such time, or the earlier
7
termination of such Service or access to such Facility in accordance with
Section 6.01(d), the license granted hereunder by the Licensor to the Licensee
to the relevant Intellectual Property will terminate; provided, however, that
all licenses granted under this Agreement shall terminate immediately upon the
expiration or earlier termination of this Agreement in accordance with the terms
hereof. The foregoing license is subject to the terms of any licenses granted by
others with respect to Intellectual Property not owned by AIG, the Company or
their respective Affiliates that is required for or used in the provision or
receipt of the Services or access to the Facilities in accordance with this
Agreement. No license or right, express or implied, is granted under this
Agreement by any Licensor to any Licensee or their respective Affiliates in or
to their respective Intellectual Property except as expressly provided above in
this Section 2.12(a), and all other rights are expressly reserved by each
Licensor.
(b) Subject to the limited license granted in Section 2.12(a), in the
event that any Intellectual Property is created by a Provider in the performance
of the Services or provision of access to the Facilities, all right, title and
interest throughout the world in and to all such Intellectual Property shall
vest solely in such Provider unconditionally and immediately upon such
Intellectual Property having been developed, written or produced, unless the
Parties agree otherwise in writing.
(c) Except as otherwise expressly provided in this Agreement or in any
other Transaction Agreement, no Party (or its Affiliates) shall have any rights
or licenses with respect to any Intellectual Property (including software),
hardware or facility of the other Party. All rights and licenses not expressly
granted in this Agreement or in such other Transaction Agreement are expressly
reserved by the relevant Party. Each Party shall from time to time execute any
documents and take any other actions reasonably requested by the other Party to
effectuate the intent of this Section 2.12.
Section 2.13. Divestitures. If AIG sells or divests any AIG Provider
that provides Services or access to Facilities hereunder, AIG shall use
commercially reasonable efforts to provide or to cause another AIG Provider to
provide for the continuity of Services and access to Facilities on the same
price, terms and conditions as are in effect immediately prior to such sale or
divestiture, and in a manner which does not cause a degradation in the service
standards set forth herein and without requiring a material change to the
Recipient's business processes or operations. If such measures are not
reasonably acceptable to the Company, the Parties shall cooperate reasonably and
in good faith to attempt to find an alternative arrangement reasonably
acceptable to the Company that meets the foregoing standards. If the Parties are
unable to find an alternative arrangement reasonably acceptable to the Company
that meets the foregoing standards, AIG will give the Company thirty (30) days'
prior written notice to enable it to develop and implement alternative services
or obtain such alternative services from third parties. Upon expiration of such
thirty (30) day notice period, notwithstanding anything to the contrary
contained herein, including Section 2.01 and Section 2.02, AIG shall be relieved
of its obligation to (and shall not be obligated to cause any Provider to)
provide such Services or access to such Facilities hereunder and the Company
shall be relieved of its obligation to pay any Services Charges or any other
costs, expenses, fees and other amounts otherwise payable pursuant to this
Agreement in connection with such terminated Services or access to Facilities.
8
Section 2.14. Migration.
(a) AIG agrees to use, and to cause the AIG Entities that are
Providers to use, and the Company agrees to use, and to cause the Company
Subsidiaries to use, their reasonable good faith efforts to cooperate with and
assist each other in connection with the migration of the business of the
Company Entities from the AIG Entities to the Company Entities, in each case and
to the extent reasonably agreed by the Parties, including the migration from the
performance of any Service or provision of access to any Facility by a Provider
to the performance of such Service and provision of access to such Facility by
the Company Entities, their Affiliates or a third Person ("Migration Services"),
taking into account the need to minimize both the cost of such migration and the
disruption to the ongoing business activities of AIG, the AIG Entities that are
Providers and the Company Entities. The Parties acknowledge that Migration
Services may include the provision of services requested by the Company Entities
in connection with their migration to non-AIG Entity systems, including the
transfer of records, segregation and migration of historical data,
migration-specific enhancements and cooperation with and assistance to
third-Person consultants engaged by the Company Entities in connection with the
foregoing. Migration Services shall be agreed upon by the Parties and shall be
charged to the Company or any Affiliate of the Company that is receiving
Migration Services (the "Migration Services Recipient") on a time and materials
basis at the then current rates for the personnel of the AIG Entities providing
such Migration Services (the "Migration Services Provider") and shall include
actual out-of-pocket costs and expenses (less any VAT recoverable by the
Migration Services Provider or any of its Affiliates) incurred by a Migration
Services Provider in the provision of Migration Services (collectively, the
"Migration Services Charges").
(b) The applicable Party shall cause the applicable Migration Services
Recipients to pay the Migration Services Charges to the applicable Migration
Services Providers. Any Migration Services Charges shall be reasonably
calculated and invoiced by the applicable Migration Services Providers (or by
AIG on behalf of the applicable Migration Services Providers) and shall be paid
to the applicable Migration Services Providers in immediately available funds
within twenty (20) days of the receipt by the applicable Migration Services
Recipients of an invoice therefor from the applicable Migration Services
Providers (or from AIG on behalf of the applicable Migration Services
Providers). Each invoice for Migration Services Charges shall be accompanied by
(i) a reasonably detailed document showing the calculation of the Migration
Services Charges and (ii) all receipts or invoices from third parties (or copies
thereof) relating to out-of-pocket costs and expenses included in the Migration
Services Charges. Any amount required to be paid under this Section 2.14 and not
paid by the due date for payment shall be subject to late charges at an interest
rate of three percent (3%) over the London Inter-Bank Offered Rate for a one (1)
year period, as published by the eastern edition of The Wall Street Journal on
the date on which the payment was due.
(c) Section 3.01(c) shall apply to the payments payable pursuant to
this Section 2.14, except that (i) each reference to the "Provider(s)" and the
"Recipient(s)" shall be changed to refer to the "Migration Services Provider(s)"
and the "Migration Services Recipient(s)", respectively, (ii) each reference to
"Service(s) or access to Facilities/Facility", or any substantially similar
construction or derivation thereof, shall be changed to refer to the "Migration
Service(s)" and (iii) each reference to "hereunder" or "under this Agreement"
shall be changed to refer to "under this Section 2.14."
9
(d) The applicable Party shall cause the applicable Migration Services
Recipients to pay to the applicable Migration Services Providers the full amount
of the Migration Services Charges and not to set-off, counterclaim or otherwise
withhold any amount owed or claimed to be owed to any Migration Services
Recipient under this Agreement on account of any obligation owed by any
Migration Services Provider, whether or not such obligation has been finally
adjudicated, settled or otherwise agreed upon in writing. In the event that a
Party disputes any amount on an invoice, such Party shall (i) give notice of
such disputed amount to either AIG or the applicable Provider pursuant to the
provisions of Section 8.08 and (ii) cause the Migration Services Recipient to
pay any undisputed amounts on such invoice, in each case within twenty (20) days
from the Migration Services Recipient's receipt of such disputed invoice.
Section 2.15. Primary Points of Contact for this Agreement.
(a) Each Party shall appoint an individual to act as the primary point
of operational contact for the administration and operation of this Agreement,
as follows:
(i) The individual appointed by the Company as the primary point
of operational contact pursuant to this Section 2.15(a) as set forth in
Schedule 2.15(a) (the "Company Contract Manager") shall have overall
operational responsibility for coordinating, on behalf of the Company, all
activities undertaken by the Company and the Company Subsidiaries and their
Affiliates and Representatives hereunder, including the performance of the
Company's obligations hereunder, acting as a day-to-day contact with the
AIG Contract Manager and making available to AIG the data, facilities,
resources and other support services from the Company required for the AIG
Providers to be able to provide the Services and access to the Facilities
in accordance with the requirements of this Agreement. The Company may
change the Company Contract Manager from time to time upon written notice
to AIG pursuant to Section 8.02. The Company shall use commercially
reasonable efforts to provide at least thirty (30) days prior written
notice of any such change.
(ii) The individual appointed by AIG as the primary point of
operational contact pursuant to this Section 2.15(a) as set forth in
Schedule 2.15(a) (the "AIG Contract Manager") shall have overall
operational responsibility for coordinating, on behalf of AIG, all
activities undertaken by the AIG Providers and their Affiliates and
Representatives hereunder, including the performance of AIG's obligations
hereunder, the coordinating of the provision of the Services and access to
the Facilities with the Company, acting as a day-to-day contact with the
Company Contract Manager. AIG may change the AIG Contract Manager from time
to time upon written notice to the Company pursuant to Section 8.02. AIG
shall use commercially reasonable efforts to provide at least thirty (30)
days prior written notice of any such change.
(b) The Parties shall ensure that the AIG Contract Manager and the
Company Contract Manager shall meet in person or telephonically as frequently as
necessary or advisable for the performance of the Parties' obligations
hereunder.
10
ARTICLE III
COSTS AND DISBURSEMENTS
Section 3.01. Costs and Disbursements.
(a) As consideration for providing the Services and access to the
Facilities, the Company shall cause the Recipient to pay to the Provider the
amount specified next to each Service set forth in Schedule 2.01 and each
Facility set forth in Schedule 2.02, as such may be amended from time to time
pursuant to Section 6.01(d)(iv) (with respect to a Service or Facility, the
"Service Charge" for such Service or Facility). Each month's Service Charges
(pro-rated if applicable to less than a full calendar month) shall be payable in
arrears, unless otherwise specified for each Service in Schedule 2.01, via
electronic funds transfer (instructions to be separately provided), to the
Provider (i) within twenty (20) days of the Recipient's receipt of an invoice
from the Provider (or from AIG on behalf of the Provider), or (ii) for flat-rate
Service Charges where invoices are not issued, on the last day of each month in
which the applicable Services or access to the Facilities are rendered. Each
invoice from a Provider (or from AIG on behalf of a Provider) shall be
accompanied by reasonable supporting documentation that provides the number of
hours worked by each employee (without identifying the names of such employees)
and the hourly rate for each employee (without identifying the names of such
employees) with respect to a Service or access to a Facility for which variable
or hourly fees are charged for such Services and access to such Facilities.
(b) In addition to any Service Charges, the Company shall cause the
Recipient to pay the Provider any actual out-of-pocket costs and expenses (less
any VAT recoverable by the Provider or any of its Affiliates of the type set
forth in Schedule 3.01(b), incurred by a Provider in the provision of, or in
setting-up for, facilitating or enabling the provision of, any Services or
access to any Facilities (the "Pass-Through Charges"). Any Pass-Through Charges
shall be reasonably calculated and invoiced by the Provider (or by AIG on behalf
of the Provider) and each invoice for such charges shall be accompanied by all
receipts or invoices from third parties (or copies thereof) relating to
out-of-pocket costs and expenses included in the Pass-Through Charges. The
Company shall cause the Recipient to pay any such Pass-Through Charges to the
Provider in immediately available funds within twenty (20) days of Recipient's
receipt of an invoice (and reasonable supporting documentation) therefor from
the Provider (or from AIG on behalf of the Provider).
(c) (i) The Provider shall be entitled to charge and collect from the
Recipient an additional amount equal to all state, local and/or foreign sales
tax or VAT or any other similar tax with respect to the provision of any
Services or access to any Facilities provided hereunder and shall timely remit
such taxes to the appropriate tax authorities. For the avoidance of doubt,
where, in the sole discretion of the Provider, the Provider is not required by
law to charge or collect state, local and/or foreign sales tax, VAT or any other
similar tax, the Recipient shall be responsible for, and shall timely remit to
the appropriate authorities, any such taxes that are required to be
self-assessed by the Recipient. AIG shall be responsible for (i) any Losses
(including any deficiency, interest and penalties) imposed as a result of a
failure to timely remit such taxes if and only if the Recipient has timely
remitted such additional amount to the Provider at the Provider's request and
(ii) interest and penalties relating to a deficiency imposed as a result
11
of the Provider's failure to have charged to the Recipient such taxes (but
excluding any such deficiency); otherwise the Company shall be responsible for
such Losses and shall hold AIG and any other Providers harmless in respect of
them.
(ii) If VAT is chargeable in respect of any supply of any
Services and/or access to any Facilities under this Agreement, the Provider (or
AIG on behalf of the Provider) shall deliver a valid VAT invoice or invoices (as
appropriate) in respect of the supply of such Services and/or access to such
Facilities to the Recipient and, following receipt of a valid VAT invoice, the
Recipient shall pay the Provider the amount of that VAT on the date which the
Provider (or AIG on behalf of the Provider) shall have specified on the relevant
VAT invoice.
(iii) Within thirty (30) days of receiving notification of the
commencement of any sales tax, VAT or other similar tax audit by a tax authority
which involves the provision of any Services or access to any Facilities
provided hereunder, the Party receiving such notice shall notify the other Party
of such audit. Thereafter, the Party or its Affiliate that bears the cost of
such tax (exclusive of any related interest and penalties) pursuant to Section
3.01(c) of this Agreement shall control all proceedings taken in connection with
such sales tax or VAT or other similar tax audit and shall take reasonable steps
to keep the other Party informed of the progress of any such audit; provided,
however, that where the other Party is liable to pay an amount in respect of
such sales tax, VAT or other similar tax pursuant to this Section 3.01(c) to a
taxing authority or any other Person, the controlling Party shall not settle or
otherwise compromise such audit without the other Party's consent (which consent
shall not be unreasonably withheld or delayed). The other Party shall have the
right (but not the duty) to participate in any proceeding to contest sales tax,
VAT or other similar liability, and shall have the right to retain tax advisers
or counsel at its own expense.
(iv) Any payment to the Provider made hereunder shall be made
free and clear of any deduction or withholding for tax (if any) and in the event
that any deduction or withholding for tax is required, the Company shall cause
the Recipient to pay additional amounts to the Provider so that after such
deduction or withholding the Provider receives the same amount that it would
have received but for the deduction or withholding of tax. The Company shall
cause the Recipient to timely remit such deduction or withholding for tax to the
appropriate taxing authority and provide the Provider with a receipt confirming
such payment. The Provider shall reasonably cooperate with the Recipient to
minimize applicable withholding taxes (e.g., by providing tax residency
certificates and other documents required under a certain tax treaty to obtain
the benefit of a lower withholding rate).
(d) Any amount required to be paid under this Section 3.01 and not
paid by the due date for payment shall be subject to late charges at an interest
rate of three percent (3%) over the London Inter-Bank Offered Rate for a one (1)
year period, as published by the eastern edition of The Wall Street Journal on
the date on which the payment was due. For avoidance of doubt, any amounts
required to be paid by either AIG or another Provider, on the one hand, or the
Company or another Recipient, on the other hand, after a dispute is resolved
pursuant to Section 8.08 shall be subject to the late charges specified in this
Section 3.01(d) from the original due date for such amounts. In the event that
the Company or another Recipient disputes any amount on an invoice, the Company
or the Recipient shall (i) give notice of such disputed amount to either AIG or
the applicable Provider pursuant to the provisions of Section 8.08 and
12
(ii) pay any undisputed amounts on such invoice, in each case within twenty (20)
days from the Company's or a Recipient's receipt of such disputed invoice.
Section 3.02. No Right to Set-Off. The Company shall cause each
Recipient to pay to the Provider the full amount of Service Charges,
Pass-Through Charges and other amounts required to be paid by such Recipient
under this Agreement and shall not set-off, counterclaim or otherwise withhold
any amount owed or claimed to be owed to such Recipient under this Agreement on
account of any obligation owed by the Provider, whether or not such obligation
has been finally adjudicated, settled or otherwise agreed upon in writing.
ARTICLE IV
WARRANTIES AND COMPLIANCE
Section 4.01. Disclaimer of Warranties. Except as expressly set forth
herein (including Article V), each Party (on behalf of itself and its
Affiliates) acknowledges and agrees that the Services and access to the
Facilities are provided as-is, that each Party (on behalf of itself and its
Affiliates) assumes all risks and liabilities arising from or relating to its
use of and reliance upon the Services and the Facilities and that each Party (on
behalf of itself and its Affiliates) makes no representation or warranty with
respect thereto. EXCEPT AS EXPRESSLY SET FORTH HEREIN, EACH PARTY (ON BEHALF OF
ITSELF AND ITS AFFILIATES) HEREBY EXPRESSLY DISCLAIMS ALL REPRESENTATIONS,
WARRANTIES AND CONDITIONS REGARDING THE SERVICES AND THE FACILITIES, WHETHER
EXPRESS OR IMPLIED, INCLUDING ANY REPRESENTATION OR WARRANTY IN REGARD TO
QUALITY, PERFORMANCE, NONINFRINGEMENT, COMMERCIAL UTILITY, MERCHANTABILITY OR
FITNESS OF THE SERVICES AND THE FACILITIES FOR A PARTICULAR PURPOSE. In
addition, each Party (on behalf of itself and its Affiliates) expressly
disclaims any express or implied obligation or warranty of the Services and
access to the Facilities that could be construed to require a Provider to
provide Services or access to the Facilities hereunder in such a manner to allow
a Recipient to comply with any law, regulation, rule or court order applicable
to the actions or functions of a Recipient.
Section 4.02. Compliance with Laws and Regulations. Each Party shall
be responsible for its own compliance with any and all Laws applicable to its
performance under this Agreement.
ARTICLE V
LIMITED LIABILITY AND INDEMNIFICATION
Section 5.01. Limited Liability of a Provider. Except in connection
with breaches of Section 2.12, Article VII, and Section 8.01, no AIG Indemnified
Person or any other Provider shall have any liability to any Company Indemnified
Person, in contract, tort or otherwise, for or in connection with (a) any
Services provided or to be provided or any access to any Facilities provided or
to be provided by any AIG Indemnified Person or any other Provider pursuant to
this Agreement or (b) any AIG Indemnified Person's or other Provider's actions
or inactions in connection with any such Services or access to any such
Facilities referred to in the
13
immediately preceding clause (a), in each case, except to the extent that such
Company Indemnified Person suffers a Loss that results from such AIG Indemnified
Person's or other Provider's gross negligence, bad faith or willful misconduct
in connection with any such Services or access to any such Facilities and except
as otherwise set forth in this Article V.
Section 5.02. Indemnification of Each Recipient by the Relevant
Provider. Subject to the limitations set forth in Section 5.04 and the other
provisions of this Agreement, AIG shall, or shall cause the relevant Provider
to, indemnify each Company Indemnified Person against, and defend and hold each
Company Indemnified Person harmless from, any and all Losses imposed on,
sustained, incurred or suffered by, or asserted by any Company Indemnified
Person to the extent such Losses result from or arise out of: (a) AIG's (and its
Affiliates that are Providers) breach of Section 2.12, Article VII, or Section
8.01 or (b) gross negligence, bad faith or willful misconduct of the Providers
in providing any Services or access to any Facilities pursuant to this Agreement
or otherwise in connection with this Agreement.
Section 5.03. Indemnification of Each Provider by the Relevant
Recipient. Subject to the limitations set forth in Section 5.04 and the other
provisions of this Agreement, the Company shall, or shall cause the relevant
Recipient to, indemnify each AIG Indemnified Person and any other Provider
against, and defend and hold each AIG Indemnified Person and any other Provider
harmless from, any and all Losses arising from third-party claims imposed on,
sustained, incurred or suffered by, or asserted against any AIG Indemnified
Person or other Provider to the extent such Losses result from or arise out of:
(a) the Company's (and its Affiliates that are Recipients) material breach of
this Agreement or (b) any Services provided or to be provided or access to any
Facilities provided or to be provided to the Company (and its Affiliates that
are Recipients) by any AIG Indemnified Person or other Provider pursuant to this
Agreement, provided that the Company shall not be responsible for any Losses for
which an AIG Indemnified Person is required to indemnify the Company and other
Company Indemnified Persons pursuant to Section 5.02. Without prejudice to the
foregoing, the Company also shall, or shall cause the relevant Recipient to,
indemnify each AIG Indemnified Person and any other Provider against, and defend
and hold each AIG Indemnified Person and any other Provider harmless from, any
and all Losses arising from third-party claims imposed on, sustained, incurred
or suffered by, or asserted against any AIG Indemnified Person or other Provider
for or in respect of any actions taken, omitted to be taken or suffered to be
taken by it pursuant to this Agreement, in good faith and in reliance upon the
written opinion of outside counsel or written instructions by or on behalf of
the Company or the Company Entities, except to the extent such liability arises
from the gross negligence, bad faith or willful misconduct of an AIG Indemnified
Person or any other Provider or any of their respective officers, employees,
agents, or representatives.
Section 5.04. Additional Limitations on Liability.
(a) NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED HEREIN, NO
PARTY, NOR ANY OF ITS AFFILIATES OR ITS OR THEIR REPRESENTATIVES (NOR ANY
SUCCESSORS OR ASSIGNS OF SUCH PERSONS) SHALL BE LIABLE FOR ANY INCIDENTAL,
SPECIAL, INDIRECT, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES (INCLUDING LOSS
OF PROFIT OR LOSS OF REVENUE) OF THE OTHER PARTY, ITS SUCCESSORS, ASSIGNS OR
THEIR
14
RESPECTIVE AFFILIATES AND REPRESENTATIVES, IN ANY WAY DUE TO, RESULTING FROM OR
ARISING IN CONNECTION WITH THIS AGREEMENT, REGARDLESS OF WHETHER SUCH LIABILITY
ARISES IN TORT (INCLUDING NEGLIGENCE), CONTRACT, BREACH OF WARRANTY, STRICT
LIABILITY, INDEMNIFICATION OR OTHERWISE AND REGARDLESS OF WHETHER ANY SUCH
DAMAGES ARE FORESEEABLE OR WHETHER AN INDEMNIFIED PERSON HAS BEEN ADVISED OF THE
POSSIBILITY OF SUCH LOSSES.
(b) The aggregate liability of AIG and the other Providers pursuant to
this Agreement or anything done or omitted to be done in connection therewith,
whether in contract, tort or otherwise, shall not exceed the aggregate amount of
the fees, costs, expenses, or any other amounts payable by the Recipient to AIG
or such other Provider pursuant to this Agreement.
(c) Other than in connection with an indemnity claim under this
Article V, upon a claim of a breach of this Agreement, the non-breaching Party
shall give the breaching Party a reasonable opportunity to correct the breach
within thirty (30) days of the non-breaching Party delivering a notice of such
breach to the breaching Party. If the breaching Party is able to cure the breach
within thirty (30) days and the non-breaching Party has not incurred any actual
Losses, the breaching Party shall not be liable for any Losses hereunder.
(d) Each AIG Indemnified Person and Company Indemnified Person agrees
that it shall use commercially reasonable efforts to mitigate and otherwise
minimize its respective Losses, whether direct or indirect, due to, resulting
from or arising in connection with any failure by an AIG Indemnified Person or
Company Indemnified Person, as applicable, to perform fully any obligations
under, and comply with, this Agreement.
(e) No AIG Indemnified Person shall have any responsibility to any
Company Indemnified Person for reserve reporting or regulatory reporting.
(f) Any claim for indemnification by an Indemnified Person must be
made in writing to AIG or the Company, as applicable, before the day that is the
one year anniversary of the date the Service or the access to the Facility
giving rise to such claim was terminated.
Section 5.05. Insurance. Notwithstanding anything to the contrary
contained herein, no Party indemnified under this Article V shall be indemnified
or held harmless to the extent such Losses are covered by insurance.
Section 5.06. Procedures. The provisions of Section 8.04 and Section
8.05 of the Separation Agreement shall govern indemnification under this Article
V.
Section 5.07. Exclusive Remedy. Each Party acknowledges and agrees
that, following the First Time of Delivery, other than (a) in the case of fraud
by the Company or AIG or any of their respective Affiliates or Representatives,
(b) as expressly set forth in this Agreement and (c) with respect to Section
2.12, Section 8.01, Section 8.08(g) and Section 8.08(i), the indemnification
provisions of this Article V shall be the sole and exclusive remedy of AIG and
the Company, respectively, for any breach of this Agreement and for any failure
to perform or comply with any covenants or agreements contained in this
Agreement.
15
ARTICLE VI
TERM AND TERMINATION
Section 6.01. Term and Termination.
(a) Each Service and access to each Facility shall be provided for a
term commencing on the First Time of Delivery and ending, in each case, on the
date set forth with respect to such Service or access to such Facility in
Schedule 2.01 (in the case of Services) or Schedule 2.02 (in the case of access
to Facilities), respectively, or such shorter term if earlier terminated
pursuant to the terms of this Agreement.
(b) Notwithstanding the term for providing any Service or access to
any Facility as set forth in Schedule 2.01 or Schedule 2.02, respectively, this
Agreement may be terminated earlier by AIG (i) if the Company is in material
breach of the terms of this Agreement and the Company fails to cure such breach
within thirty (30) days of AIG delivering a written notice of such breach to the
Company (it being understood and agreed that the failure of the Company or a
Recipient to pay any outstanding Service Charge or other amount due to AIG or a
Provider shall be a material breach of the terms of this Agreement and that AIG
may terminate this Agreement if the Company fails to cure such breach within ten
(10) days of AIG delivering a written notice of such breach to the Company); or
(ii) if the Company or the Company Entities commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors or shall take any corporate action to authorize any of the
foregoing.
(c) Notwithstanding the term for providing any Service or access to
any Facility as set forth in Schedule 2.01 or Schedule 2.02, respectively, this
Agreement may be terminated earlier by the Company (i) if AIG is in material
breach of the terms of this Agreement and AIG fails to cure such breach within
thirty (30) days of the Company delivering a written notice of such breach to
AIG; or (ii) if AIG commences a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or shall
consent to any such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors or shall take
any corporate action to authorize any of the foregoing.
(d) With respect to any Service or access to any Facility:
(i) the Company may terminate such Service or access to such
Facility, in whole but not in part with respect to such Service or access
to such Facility: (A) for any reason or no reason upon providing at least
ten (10) days' prior written notice
16
to the Provider of such Service or access to such Facility (unless a longer
notice period is specified in the Schedules attached hereto or in a
third-Person agreement to provide Services), in each case, subject to the
obligation to pay any applicable termination charges pursuant to Section
6.02; or (B) at any time upon prior written notice if AIG has failed to
perform any of its material obligations under this Agreement with respect
to such Service or access to such Facility, and such failure shall continue
to exist thirty (30) days after receipt by AIG of a written notice of such
failure from the Company or the applicable Recipient; or (C) pursuant to
Section 6.04(b);
(ii) AIG may terminate such Service or access to such Facility,
in whole but not in part with respect to such Service or access to such
Facility: (A) at any time upon prior written notice if the Company has
failed to perform any of its material obligations under this Agreement with
respect to such Service or access to such Facility, and such failure shall
continue to exist thirty (30) days after receipt by the Company of a
written notice of such failure from AIG or the applicable Provider; (B)
after compliance with the provisions of Section 2.04, immediately upon the
Company's receipt of written notice, if the continued performance of such
Service or the provision of access to such Facility would, in the opinion
of AIG exercised in good faith, be a violation of any Law; or (C) pursuant
to Section 6.04(b);
(iii) Any such Service or access to such Facility may be
terminated, in whole but not in part, upon the mutual agreement of the
Parties; and
(iv) AIG may terminate such Service or access to such Facility,
in whole but not in part with respect to such Service or access to such
Facility: upon sixty (60) days' prior written notice to the Company if (A)
AIG determines in its reasonable discretion that it is necessary for AIG to
increase its Service Charges in order to recover its increased costs to
provide such Service or access to such Facility and (B) the Company does
not consent in writing to amend Schedule 2.01 or Schedule 2.02, as
applicable, to provide for such increased Service Charges within thirty
(30) days of receiving from AIG such written notification along with the
proposed increased Service Charges and reasonably detailed documentation in
support of the proposed increased Service Charges.
If a Service or access to a Facility is terminated, the relevant Schedule shall
be updated to reflect such termination. In the event that the effective date of
the termination of any Service or access to any Facility is a day other than at
the end of a month, the Service Charge, the Pass-Through Charges and other
amounts due to a Provider associated with such Service or access to such
Facility shall be pro-rated appropriately. In addition, to the extent that a
Provider's ability to provide a Service or access to a Facility, as the case may
be, is dependent on the continuation of another Service or access to another
Facility, as the case may be, such Provider's obligation to provide such Service
or access to such Facility shall terminate automatically with the termination of
such supporting Service or access to such supporting Facility.
Section 6.02. Termination Charges. Upon early termination of any
Service or access to any Facility pursuant to Section 6.01(d)(i) or (ii), the
Company shall pay to AIG or any other Provider such early termination charges as
may be incurred by AIG or any other Provider
17
in order to discontinue earlier than originally anticipated the provision of
such Service or access to such Facility. Such early termination charges may
include wind-down costs, breakage fees, early termination fees or charges,
minimum volume make-up charges, other start-up or wind-down costs incurred by
AIG or any other Provider that AIG or such other Provider had anticipated would
be paid for by the Company over the course of the originally contemplated term
or other amounts payable to third Persons or internal costs incurred by AIG or
such other Provider in its commercially reasonable efforts to discontinue
earlier than originally anticipated the provision of such Services or access to
such Facilities. AIG and such other Provider shall use commercially reasonable
efforts to minimize the existence and amount of such early termination charges;
provided, however, that the foregoing obligations shall not alter or diminish
the Company's obligation to pay early termination charges as reasonably
determined by AIG and such other Provider in accordance with the terms hereof.
All termination charges shall be due and payable to AIG or any other Provider in
immediately available funds within twenty (20) days of the Company's receipt of
any invoice therefor.
Section 6.03. Effect of Termination.
(a) Upon termination of any Service or access to any Facility in
accordance with this Agreement and subject to Section 6.02, AIG and any other
Provider will have no further obligation to provide such terminated Service or
such terminated access to the applicable Facility, and the Company shall have no
obligation to pay any Service Charges, Pass-Through Charges or other required
amounts relating to any such Service or access to such Facility, provided that
the Company shall remain obligated to AIG and any other Provider for any Service
Charges, Pass-Through Charges or other required amounts owed and payable in
respect of such terminated Service or such terminated access to the applicable
Facility that was provided prior to the effective date of termination and any
amounts owed or payable for Migration Services provided. Any and all rights to
Intellectual Property granted to a Recipient and/or Provider hereunder in
connection with the provision of a terminated Service or terminated access to
the applicable Facility shall immediately cease upon such termination. In
connection with the termination of any Service or access to any Facility, the
provisions of this Agreement not relating solely to such terminated Service or
such terminated access to the applicable Facility shall survive any such
termination.
(b) In connection with a termination of this Agreement, Article I,
Article V, Article VII, Article VIII, Section 2.12, Section 6.02 and this
Section 6.03 and liability for all due and unpaid Service Charges, Pass-Through
Charges and other amounts required by this Agreement shall continue to survive
indefinitely.
Section 6.04. Force Majeure.
(a) No Party (or any Person acting on its behalf) shall have any
liability or responsibility for any interruption, delay or other failure to
fulfill any obligation (other than a payment obligation) under this Agreement so
long as and to the extent to which the fulfillment of such obligation is
prevented, frustrated, hindered or delayed as a consequence of circumstances of
a Force Majeure, provided that such Party (or such Person) shall have exercised
commercially reasonable efforts to minimize the effect of a Force Majeure on its
obligations. In the event of an occurrence of a Force Majeure, the Party whose
performance is affected thereby shall give notice
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(orally or in writing) of suspension as soon as reasonably practicable to the
other stating the date and extent of such suspension and the cause thereof, and
such Party shall resume the performance of such obligations as soon as
reasonably practicable upon the cessation of such Force Majeure and its effects.
(b) During the period of a Force Majeure, the Company shall be
entitled to seek an alternative service provider at its own cost with respect to
the Services affected or access to the Facilities affected. If a Force Majeure
shall continue to exist for more than thirty (30) consecutive days, either the
Company or AIG shall be entitled to permanently terminate the Services affected
or access to the Facilities affected. The Company shall be relieved of the
obligation to pay any Service Charges or Pass-Through Charges for the provision
of the affected Services or access to the affected Facilities throughout the
duration of such Force Majeure.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.01. Representations and Warranties of AIG. AIG hereby
represents and warrants to the Company as follows:
(a) Incorporation and Authority of AIG. AIG is a corporation duly
incorporated, validly existing and in good standing under the Laws of the State
of Delaware. AIG has full legal power and authority, and has taken all required
legal action necessary, to execute and deliver this Agreement and all other
agreements, instruments, certificates, notices and other documents as are
necessary to consummate the transactions contemplated hereby and otherwise to
carry out the terms of this Agreement. AIG has duly and validly authorized the
execution and delivery of this Agreement, and the consummation of the
transactions contemplated hereby has been duly and validly authorized by AIG and
no other proceedings on the part of AIG are necessary to authorize the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby by AIG.
(b) Enforceability. This Agreement has been duly and validly executed
by AIG and, assuming due authorization, execution and delivery by the other
Party hereto, constitutes, or upon execution and delivery thereof will
constitute, the legal, valid and binding agreement of AIG, enforceable against
AIG in accordance with its terms, subject to the effect of any applicable
bankruptcy, reorganization, insolvency, moratorium, rehabilitation, liquidation,
fraudulent conveyance or similar Laws relating to or affecting creditors' rights
generally and subject, as to enforceability, to the effect of general equitable
principles (regardless of whether enforcement is sought in a proceeding in
equity or at law).
(c) Consents and Approvals. Except as set forth on Schedule 7.01(c),
no consent, approval, waiver, authorization, notice or filing is required to be
obtained by AIG or any of its Affiliates from, or to be given by AIG or any of
its Affiliates to, or made by AIG or any of its Affiliates with, any
Governmental Authority or any other Person, in connection with the execution,
delivery and performance by AIG or any of its Affiliates of this Agreement.
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(d) Non-Contravention. The execution, delivery and performance by AIG
and its Affiliates of this Agreement, and the consummation of the transactions
contemplated hereby, do not and will not (i) violate any provision of the
Organizational Documents of AIG or any of its Affiliates; (ii) assuming the
receipt of all consents, approvals, waivers and authorizations and the making of
the notices and filings set forth on Schedule 7.01(c), conflict with, or result
in the breach of, or constitute a default under, or result in the termination,
cancellation, modification or acceleration (whether after the filing of notice
or the lapse of time or both) of any right or obligation of AIG or any of its
Affiliates under, or result in a loss of any benefit to which AIG or any if its
Affiliates is entitled under, any Contract, or result in the creation of any
Lien (other than Permitted Liens) upon the assets and properties of AIG or any
of its Affiliates; or (iii) assuming the receipt of all consents, approvals,
waivers and authorizations and the making of the notices and filings set forth
on Schedule 7.01(c) or required to be made or obtained by the Company or any of
the Company Subsidiaries, violate, or result in a breach of, or constitute a
default under any Law, Governmental Order or Self-Regulatory Organization
Approval to which AIG or any of its Affiliates is subject, other than, in the
cases of clauses (ii) and (iii), conflicts, breaches, terminations, defaults,
cancellations, accelerations, losses, violations or Liens that would not
materially impair or delay AIG's ability to perform its obligations hereunder.
(e) Disclaimer. Except for the representations and warranties
contained in this Section 7.01, AIG does not make any other representation or
warranty of any kind or nature whatsoever, oral or written, express or implied,
with respect to AIG or any of its Affiliates, this Agreement or the transactions
contemplated by this Agreement.
Section 7.02. Representations and Warranties of the Company.
(a) Incorporation and Authority of the Company. The Company is a
corporation duly incorporated, validly existing and in good standing under the
Laws of the State of Delaware. The Company has full legal power and authority,
and has taken all required legal action necessary, to execute and deliver this
Agreement and all other agreements, instruments, certificates, notices and other
documents as are necessary to consummate the transactions contemplated hereby
and otherwise to carry out the terms of this Agreement. The Company has duly and
validly authorized the execution and delivery of this Agreement, and the
consummation of the transactions contemplated hereby has been duly and validly
authorized by the Company and no other proceedings on the part of the Company
are necessary to authorize the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby by the Company.
(b) Enforceability. This Agreement has been duly and validly executed
by the Company and, assuming due authorization, execution and delivery by the
other Party hereto, constitutes, or upon execution and delivery thereof will
constitute, the legal, valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, subject to the effect of any
applicable bankruptcy, reorganization, insolvency, moratorium, rehabilitation,
liquidation, fraudulent conveyance or similar Laws relating to or affecting
creditors' rights generally and subject, as to enforceability, to the effect of
general equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law).
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(c) Consents and Approvals. Except as set forth on Schedule 7.02(c),
no consent, approval, waiver, authorization, notice or filing is required to be
obtained by the Company or any of the Company Subsidiaries from, or to be given
by the Company or any of the Company Subsidiaries to, or made by the Company or
any of the Company Subsidiaries with, any Governmental Authority or other
Person, in connection with the execution, delivery and performance by the
Company or any of the Company Subsidiaries of this Agreement.
(d) Non-Contravention. The execution, delivery and performance by the
Company and the Company Subsidiaries of this Agreement, and the consummation of
the transactions contemplated hereby, do not and will not (i) violate any
provision of the Organizational Documents of the Company or any of the Company
Subsidiaries; (ii) assuming the receipt of all consents, approvals, waivers and
authorizations and the making of the notices and filings set forth on Schedule
7.02(c), to the Knowledge of the Company, conflict with, or result in the breach
of, or constitute a default under, or result in the termination, cancellation,
modification or acceleration (whether after the filing of notice or the lapse of
time or both) of any right or obligation of the Company or any of the Company
Subsidiaries under, or result in a loss of any benefit to which the Company or
any of the Company Subsidiaries is entitled under, any Contract, or result in
the creation of any Lien (other than Permitted Liens) upon the assets and
properties of the Company or any of the Company Subsidiaries; or (iii) assuming
the receipt of all consents, approvals, waivers and authorizations and the
making of notices and filings set forth on Schedule 7.02(c) or required to be
made or obtained by AIG or any of its Affiliates, to the Knowledge of the
Company, violate or result in a breach of or constitute a default under any Law,
Governmental Order or Self-Regulatory Organization Approval to which the Company
or any of the Company Subsidiaries is subject, other than, in the cases of
clauses (ii) and (iii), conflicts, breaches, terminations, defaults,
cancellations, accelerations, losses, violations or Liens that would not
materially impair or delay the Company's ability to perform its obligations
hereunder.
(e) Disclaimer. Except for the representations and warranties
contained in this Section 7.02, the Company does not make any other
representation or warranty of any kind or nature whatsoever, oral or written,
express or implied, with respect to the Company or any of the Company
Subsidiaries, this Agreement or the transactions contemplated by this Agreement.
ARTICLE VIII
GENERAL PROVISIONS
Section 8.01. Treatment of Confidential Information.
(a) Each Party shall not, and shall cause other Persons under its
Control (including Affiliates and Representatives) that are providing or
receiving Services or access to Facilities or that otherwise have access to
information of the other Party that is confidential or proprietary
("Confidential Information") not to, disclose to any other Person or use, except
for purposes of this Agreement, any Confidential Information of the other Party
that after the First Time of Delivery is provided or that becomes known or
available pursuant to or as a result of the carrying out of the provisions of
this Agreement; provided, however, that each Party may disclose (subject to
applicable Law) Confidential Information of the other Party to Providers and
21
Recipients and their respective Representatives, in each case who (x) require
such information in order to perform their duties in connection with this
Agreement and (y) have agreed to maintain the confidentiality of such
information consistent with the terms hereof; and provided, further, that each
Party may disclose (subject to applicable Law) Confidential Information of the
other Party if (i) any such Confidential Information is or becomes generally
available to the public other than (A) in the case of the Company, as a result
of disclosure by AIG or its Affiliates or any of their respective
Representatives and (B) in the case of AIG, as a result of disclosure by the
Company or any Company Subsidiary (after the First Time of Delivery) or any of
their respective Affiliates or any of their respective Representatives, (ii) any
such Confidential Information (including any report, statement, testimony or
other submission to a Governmental Authority) is required by applicable Law,
Governmental Order or such Governmental Authority to be disclosed, after prior
notice has been given to the other Party to the extent such notice is permitted
by applicable Law, provided that no such notice is required if prohibited by
applicable law, (iii) any such Confidential Information is reasonably necessary
to be disclosed in connection with any Action or in any dispute with respect to
this Agreement (including in response to any summons, subpoena or other legal
process or formal or informal investigative demand issued to the disclosing
Party in the course of any litigation, arbitration, mediation, investigation or
administrative proceeding), (iv) any such Confidential Information was or
becomes available to such Party on a non-confidential basis and from a source
(other than a Party to this Agreement or any Affiliate or Representative of such
Party) that is not bound by a confidentiality agreement with respect to such
information or (v) any such Confidential Information is independently developed
after the First Time of Delivery without the aid, application or use of any
information that is to be kept confidential under this Article VIII as evidenced
by a written record proving such independent development.
(b) Notwithstanding anything to the contrary contained herein, the
Parties acknowledge and agree that each of the Parties and such Party's
Affiliates may share upon prior written notice any information relating to or
obtained from the other Party and its Affiliates (including, in the case of the
Company, the Company Subsidiaries) with (i) the Federal Reserve Bank of New York
or the U.S. Department of the Treasury and their respective Representatives,
(ii) the AIG Credit Facility Trust, (iii) any insurance regulatory authority or
(iv) the IRS or any other tax authority, in each case as such Party deems
necessary or advisable in its good faith judgment.
(c) To the fullest extent permitted by applicable Laws, the provisions
of Section 8.01(a) shall not restrict or limit the use of or disclosure by AIG
or any of its Affiliates of any customer, policy or beneficiary information
(including such information relating to the Company and the Company
Subsidiaries) if such information was in the possession or control of AIG or its
Affiliates prior to the First Time of Delivery. For the avoidance of doubt, the
foregoing shall apply regardless of whether such information (i) was also
possessed or controlled by the Company and the Company Subsidiaries on or prior
to the First Time of Delivery and/or (ii) was originated by any other such
Person.
Section 8.02. Notices. All notices, requests, claims, demands and
other communications under this Agreement shall be in writing and shall be given
or made (and shall be deemed to have been duly given or made upon receipt except
as otherwise set forth herein) by delivery in person, by overnight courier
service, by facsimile with receipt confirmed (followed
22
by delivery of an original via overnight courier service) or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
Parties at the following addresses (or at such other address for a Party as
shall be specified in a notice given in accordance with this Section 8.02):
(i) if to AIG:
American International Group, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
American International Group, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇▇▇▇▇
Head of Divestiture Separation Team
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇., Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to the Company:
Transatlantic Holdings, Inc.
▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
SVP and General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
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▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Section 8.03. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced under any Law or as
a matter of public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated by this Agreement is not
affected in any manner materially adverse to any Party hereto. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the Parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the Parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated by this Agreement be consummated as originally contemplated to the
greatest extent possible.
Section 8.04. Entire Agreement. Except as otherwise expressly provided
in this Agreement, this Agreement and the other Transaction Agreements
constitute the entire agreement of the Parties with respect to the subject
matter of this Agreement and supersede all prior agreements and undertakings,
both written and oral, between or on behalf of AIG and/or its Affiliates, on the
one hand, and the Company and/or its Affiliates, on the other hand, with respect
to the subject matter of this Agreement.
Section 8.05. Assignment. This Agreement shall not be assigned, in
whole or in part, by operation of law or otherwise without the prior written
consent of the Parties; provided, however, that AIG may assign any or all of its
rights and obligations under this Agreement (a) to any of its Affiliates or (b)
to an Affiliate, business unit or any other portion of the business of AIG that
it divests (whether by stock or asset sale, merger or otherwise) in connection
with such divestiture; provided, however, that such assignment does not release
AIG from any liability under this Agreement incurred prior to such assignment.
Any attempted assignment in violation of this Section 8.05 shall be void. This
Agreement shall be binding upon, shall inure to the benefit of, and shall be
enforceable by the Parties and their successors and permitted assigns.
Section 8.06. No Third-Party Beneficiaries. Except as set forth in
Article V with respect to Indemnified Persons and other Providers, this
Agreement is for the sole benefit of the Parties and their successors and
permitted assigns, and nothing in this Agreement, express or implied, is
intended to or shall confer upon any other Person (including any policyholder of
AIG or the Company or any of the Insurance Subsidiaries) any legal or equitable
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement. Any Company Subsidiary and any Provider who, immediately prior to the
First Time of Delivery, was an Affiliate of AIG, shall be an express third party
beneficiary under this Agreement and, as such, this Agreement may be enforced by
any such Company Subsidiary or Provider as if it were a party hereto.
24
Section 8.07. Amendment; Waiver. No provision of this Agreement may be
amended, supplemented or modified except by a written instrument signed by all
the Parties. No provision of this Agreement may be waived except by a written
instrument signed 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 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.
Section 8.08. Dispute Resolution. Any dispute, controversy or claim
arising out of, relating to or in connection with this Agreement, or the breach,
termination or validity thereof (a "Dispute"), shall be resolved as follows:
(a) The service managers of the Parties most immediately responsible
for the issue giving rise to the Dispute shall seek to resolve such Dispute
through informal good faith negotiation. If the Dispute is not resolved at that
level of management within seven (7) Business Days after the claiming Party
verbally notifies the other Party of the Dispute, then the Dispute shall be
escalated to the AIG Contract Manager and the Company Contract Manager for
resolution. In the event such managers fail to resolve the Dispute within an
additional seven (7) Business Days, then the claiming Party will provide the
other Party with a written "Notice of Dispute", describing the nature of the
Dispute, and the Dispute shall be escalated to the Chief Administrative Officers
or Chief Operating Officers of the Parties or their respective designees who
shall discuss the dispute (either in person or by telephone) within seven (7)
Business Days after such Notice of Dispute is provided by the claiming Party to
the other Party and confer in a good faith effort to resolve the Dispute. If the
Chief Administrative Officers or Chief Operating Officers or their respective
designees do not discuss the dispute within the allotted time or fail to resolve
the Dispute within seven (7) Business Days after beginning such discussions,
then the Dispute shall be finally settled by arbitration as follows:
(b) The arbitration shall be conducted by three (3) arbitrators in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA") in effect at the time of the arbitration, except as they may
be modified herein or by mutual agreement of the Parties. The seat of the
arbitration shall be New York, New York.
(c) The claimant shall appoint an arbitrator in its request for
arbitration. The respondent shall appoint an arbitrator within thirty (30) days
of the receipt of the request for arbitration. The two (2) arbitrators shall
appoint a third arbitrator within thirty (30) days after the appointment of the
second arbitrator. The third arbitrator shall act as chair of the tribunal. If
any of the three (3) arbitrators is not appointed within the time prescribed
above, then upon the request of any Party, the AAA shall appoint that
arbitrator.
(d) The award shall be final and binding on the Parties. Judgment upon
the award may be entered by any court having jurisdiction thereof or having
jurisdiction over the relevant Party or its assets.
(e) Any request for production of documents or other information is
subject to the express authorization of the tribunal, which shall endeavor to
ensure that any such requests are as limited and disciplined as is consistent
with the just resolution of the dispute. The Parties
25
expressly waive any right to seek evidence under 9 U.S.C. Section 7 or any
similar provision. A Party may request, and the tribunal should authorize,
production only of specific documents or narrow and specific categories of
documents that are critical to the fair presentation of a Party's case and
reasonably believed to exist and be in the possession, custody or control of the
other Party.
(f) The Parties agree that the arbitration shall be kept confidential
and that the existence of the proceeding and any element of it (including any
pleadings, briefs or other documents submitted or exchanged, any testimony or
other oral submissions and any awards) shall not be disclosed beyond the
arbitral tribunal, the AAA, the Parties, their counsels, accountants and
auditors, insurers and re-insurers or any Person necessary to the conduct of the
proceeding. These confidentiality obligations shall not apply (i) if disclosure
is required by Law or regulatory obligations, the applicable rules and policies
of any national securities exchange or in judicial or administrative proceedings
or (ii) as far as disclosure is necessary to enforce the rights arising out of
the award.
(g) For the avoidance of doubt, the tribunal may grant specific
performance or injunctive relief where authorized under this Agreement or
applicable Law. The tribunal shall have the authority to make orders for interim
relief necessary to preserve a Party's rights, including preliminary injunctive
relief. The Parties agree that any ruling by the tribunal on interim measures
shall be deemed to be a final award with respect to the subject matter of the
ruling and shall be fully enforceable as such. Each Party hereby acknowledges
that money damages may be an inadequate remedy for a breach or anticipated
breach of this Agreement because of the difficulty of ascertaining the amount of
damage that will be suffered in the event that this Agreement is breached.
Therefore, in the event of a breach or anticipated breach of this Agreement by
the other Party or its Affiliates for which the provisions of Article V do not
provide for indemnification as the exclusive remedy under the Agreement, each
Party may, in addition to any other remedies available to it, seek an injunction
to prohibit such breach or anticipated breach. Each Party acknowledges and
agrees that an injunction is a proper, but not exclusive, remedy available to
each Party and that the harm from any breach or anticipated breach of the
covenants set forth in this Agreement would be irreparable and immediate.
(h) Notwithstanding Section 8.09 of this Agreement, the agreement to
arbitrate set forth in this Section 8.08 and any arbitration conducted hereunder
shall be governed by Title 9 (Arbitration) of the United States Code.
(i) The Parties submit to the non-exclusive jurisdiction of the
federal and state courts located within the County of New York, State of New
York, as well as all appellate courts having jurisdiction over appeals from any
of the foregoing, for the limited purpose of: (i) an application to compel
arbitration or to resolve any dispute concerning the validity or effectiveness
of this agreement to arbitrate; or (ii) an application for relief in aid of
arbitration or enforcement of an arbitration award, including an application for
a restraining order and/or injunction to preserve the Party's rights. A request
to a court for any of the foregoing remedies shall not be deemed incompatible
with or a waiver of any Party's right to arbitrate. Each Party hereby waives any
requirement for the securing or posting of any bond in connection with such
remedy.
26
Section 8.09. Governing Law; Waiver of Jury Trial.
(a) This Agreement shall in all respects be governed by, and construed
in accordance with, the Laws of the State of Delaware without giving effect to
any conflicts of law principles of such state that might refer the governance,
construction or interpretation of such agreements to the Laws of another
jurisdiction.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY THAT MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND
ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVER AND CERTIFICATIONS OF
THIS SECTION 8.09. EITHER PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES
TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
Section 8.10. Rules of Construction. Interpretation of this Agreement
shall be governed by the following rules of construction: (a) words in the
singular shall be held to include the plural and vice versa, and words of one
gender shall be held to include the other gender as the context requires; (b)
references to the terms Preamble, Recital, Article, Section, paragraph and
Schedule are references to the Preamble, Recitals, Articles, Sections,
paragraphs and Schedules to this Agreement unless otherwise specified; (c)
references to "$" shall mean U.S. dollars; (d) the word "including" and words of
similar import when used in this Agreement shall mean "including without
limitation," unless otherwise specified; (e) the word "or" shall not be
exclusive; (f) the words "herein," "hereof" or "hereunder" and similar terms are
to be deemed to refer to this Agreement as a whole and not to any specific
section; (g) the headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement; (h) this Agreement shall be construed without regard to any
presumption or rule requiring construction or interpretation against the Party
drafting or causing any instrument to be drafted; (i) if a word or phrase is
defined, the other grammatical forms of such word or phrase have a corresponding
meaning; (j) references to any statute, listing rule, rule, standard, regulation
or other law include a reference to (i) the corresponding rules and regulations
and (ii) each of them as amended, modified, supplemented, consolidated, replaced
or rewritten from time to time; and (k) references to any section of any
statute, listing rule, rule, standard, regulation or other Law include any
successor to such section.
27
Section 8.11. Obligations of Parties. Each obligation of a Provider
under this Agreement to take (or refrain from taking) any action hereunder shall
be deemed to include an undertaking by AIG to cause such Provider to take (or
refrain from taking) such action. Each obligation of a Recipient or any of its
Subsidiaries under this Agreement to take (or refrain from taking) any action
hereunder shall be deemed to include an undertaking by the Company to cause such
Recipient or its Subsidiaries to take (or refrain from taking) such action.
Section 8.12. Counterparts. This Agreement may be executed in one or
more counterparts, and by each Party in separate counterparts, each of which
when executed shall be deemed to be an original but all of which taken together
shall constitute one and the same agreement. Delivery of an executed counterpart
of a signature page to this Agreement by facsimile or other means of electronic
transmission shall be as effective as delivery of a manually executed
counterpart of this Agreement.
Section 8.13. Effective Time. This Agreement shall become effective as
of the First Time of Delivery. In the event that the First Time of Delivery does
not occur, this Agreement shall be of no force or effect.
28
IN WITNESS WHEREOF, the Parties have caused this Agreement to be
executed on the date first written above by their respective duly authorized
officers.
AMERICAN INTERNATIONAL GROUP, INC.
By:
------------------------------------
Name:
Title:
TRANSATLANTIC HOLDINGS, INC.
By:
------------------------------------
Name:
Title:
[Signature page to the Transition Services Agreement]
EXHIBIT E
FORM OF STOCKHOLDERS AGREEMENT
See Attached.
E-1
FORM OF STOCKHOLDERS AGREEMENT
dated as of [-], 2009
by and
among
AMERICAN INTERNATIONAL GROUP, INC.,
AMERICAN HOME ASSURANCE COMPANY,
and
TRANSATLANTIC HOLDINGS, INC.
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions ............................................... 2
Section 1.2. Interpretation ............................................ 5
ARTICLE II
VOTING AGREEMENTS
Section 2.1. Voting Agreements ......................................... 6
Section 2.2. Termination of Article II ................................. 6
ARTICLE III
STANDSTILL
Section 3.1. Acquisition of Common Stock ............................... 6
Section 3.2. Certain Restrictions ...................................... 7
Section 3.3. Termination of Article III ................................ 9
ARTICLE IV
TRANSFER RESTRICTIONS
Section 4.1. General Transfer Restrictions ............................. 9
Section 4.2. Restrictions on Transfer .................................. 9
Section 4.3. Securities Act ............................................ 10
ARTICLE V
COVENANTS AND OTHER MATTERS
Section 5.1. Other Agreements .......................................... 10
Section 5.2. Actions Requiring Consent ................................. 11
Section 5.3. Indemnification ........................................... 11
Section 5.4. Information Rights ........................................ 12
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.1. Representations and Warranties of AIG and AHAC ............ 12
i
Section 6.2. Representations and Warranties of the Company ............. 13
ARTICLE VII
MISCELLANEOUS AND GENERAL
Section 7.1. Termination ............................................... 14
Section 7.2. Expenses .................................................. 14
Section 7.3. Amendment and Waiver ...................................... 15
Section 7.4. Counterparts .............................................. 15
Section 7.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL ............. 15
Section 7.6. Notices ................................................... 16
Section 7.7. Entire Agreement .......................................... 16
Section 7.8. No Third Party Beneficiaries .............................. 17
Section 7.9. Confidentiality ........................................... 17
Section 7.10. Severability .............................................. 17
Section 7.11. Specific Performance; No Special Damages .................. 17
Section 7.12. Assignment ................................................ 17
Section 7.13. Effective Time ............................................ 18
Schedule 6.1(c) Consents and Approvals of AIG and AHAC
Schedule 6.2(c) Consents and Approvals of the Company
ii
STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of [-], 2009 (this "Agreement"), by
and between TRANSATLANTIC HOLDINGS, INC., a Delaware corporation (the
"Company"), AMERICAN INTERNATIONAL GROUP, INC., a Delaware corporation ("AIG"),
and AMERICAN HOME ASSURANCE COMPANY, a New York domiciled insurance company
("AHAC", and together with AIG, "Stockholder").
RECITALS
WHEREAS, the Company and Stockholder have entered into a Master
Separation Agreement, dated as of May 28, 2009 (the "Separation Agreement"),
to effect the orderly separation of Stockholder and the Company;
WHEREAS, concurrently with the execution of the Separation Agreement,
the Company filed a prospectus supplement to the prospectus contained in
Post-Effective Amendment No. 1 to its registration statement on Form S-3 with
the SEC for a public offering of all or some of the Shares (as defined below);
WHEREAS, as of the date hereof, AIG directly Beneficially Owns
17,073,690 shares of common stock, par value $1.00 per share, of the Company
("Common Stock") (collectively, the "AIG Shares");
WHEREAS, as of the date hereof, AHAC directly Beneficially Owns
22,018,972 shares of Common Stock (collectively, the "AHAC Shares", and together
with the AIG Shares, the "Shares");
WHEREAS, pursuant to the Separation Agreement, Stockholder and the
Company have agreed that if the Shares to be Beneficially Owned by Stockholder
immediately following the sale of the Shares agreed to be sold pursuant to the
Underwriting Agreement (without giving effect to the Underwriters' option to
purchase additional shares) would constitute at least 10% of the outstanding
Common Stock following the Closing, the parties hereto would enter into this
Agreement at Closing; and
WHEREAS, each of Stockholder and the Company desires, for its mutual
benefit and protection, to enter into this Agreement with respect to certain
matters relating to the operations and management of the Company, the
disposition and voting of the Shares and certain other matters set forth herein.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound hereby, each of the Company and
Stockholder agrees as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.1. Definitions. Unless otherwise defined herein, all
capitalized terms used herein shall have the same meanings as set forth in the
Separation Agreement. For purposes of this Agreement, the following terms have
the meanings set forth below:
"Affiliate" means, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under common control with
such Person; provided that, except as expressly provided herein, none of the
(A)(i) the FRBNY or the U.S. Department of the Treasury or their respective
Representatives, (ii) the AIG Credit Facility Trust, (iii) any insurance
regulatory authority, (iv) the IRS or any other tax authority or (v) any other
Person controlled by any of the foregoing, nor (B) the Company and its
Subsidiaries shall be deemed Affiliates of Stockholder.
"Agreement" is defined in the Preamble.
"AHAC" is defined in the Preamble.
"AHAC Shares" is defined in the Recitals.
"AIG" is defined in the Preamble.
"AIG Indemnified Parties" is defined in Section 5.3(b).
"AIG Shares" is defined in the Recitals.
"Banks" is defined in Section 4.2(a)(iii).
"Beneficial Ownership", "Beneficial Owner" and "Beneficially Own"
refer to ownership by any Person who, directly or indirectly, through any
contract, arrangement, understanding, relationship or otherwise, has or shares
(i) voting power which includes the power to vote, or to direct the voting of,
such security; and/or (ii) investment power which includes the power to dispose,
or to direct the disposition of, such security; and shall otherwise be
interpreted in accordance with the term "beneficial ownership" as defined in
Rule 13d-3 adopted by the SEC under the Exchange Act.
"Board" means the board of directors of the Company.
"Change of Control" shall mean the occurrence of any of the following
events: (i) Stockholder and its Affiliates become the Beneficial Owners of more
than 50% of the outstanding Voting Stock; (ii) a merger or consolidation of the
Company with or into another Person or the merger or consolidation of another
Person into the Company, as a result of which transaction or series of related
transactions Stockholder and its Affiliates become the Beneficial Owners of more
than 50% of the Voting Stock outstanding immediately after such transaction or
transactions; or (iii) the consummation of the sale, transfer, lease or other
disposition (but not including a transfer, lease or other disposition by pledge
or mortgage to a bona fide Lender) of
2
all or substantially all of the assets of the Company and the Company
Subsidiaries to Stockholder or its Affiliates. For the avoidance of doubt,
Stockholder's Beneficial Ownership of more than 50% of the outstanding Voting
Stock prior to the date hereof shall not be considered a "Change of Control" for
purposes of this definition.
"Common Stock" is defined in the Recitals.
"Company" is defined in the Preamble.
"Company Indemnified Parties" is defined in Section 5.3(a).
"Company Transaction Proposal" is defined in Section 3.2(a)(ii)(A).
"Director" means any member of the Board.
"Equity Securities" means any and all shares of capital stock of the
Company, including, without limitation, any and all shares of Common Stock and
Preferred Stock of the Company, securities of the Company convertible into, or
exchangeable or exercisable for, such shares, and options, warrants or other
rights to acquire such shares.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
"Fundamental Change" means the occurrence of any of the following: (i)
the consummation of any merger, consolidation, share exchange, recapitalization
or other business combination transaction (or series of related transactions) as
a result of which the Voting Stock immediately prior to such transaction (or
series of related transactions) is converted into and/or continues to represent,
in the aggregate, less than 50% of the outstanding securities having the right
to vote for the election of directors of the Survivor of a Fundamental Change;
(ii) any Person or Group, together with any Affiliates thereof,
becomes, directly or indirectly, the Beneficial Owner of more than 50% of the
outstanding Voting Stock of the Company;
(iii) the consummation of the sale, transfer, lease or
disposition by the Company or by one or more of its Subsidiaries of all or
substantially all of the assets, business or securities of the Company (on a
consolidated basis) to any Person or Group (other than the Company or its wholly
owned Subsidiaries); or
(iv) during any period, the directors of the Company as of the
date hereof (or any directors nominated by such directors) cease for any reason
to constitute a majority of the Directors of the Board.
"Group" shall have the meaning assigned to it in Section 13(d)(3) of
the Exchange Act.
"Independent Director" means any Director who without regard to
whether the Company or Stockholder is listed on the NYSE, is or would be an
"independent director" with
3
respect to both the Company and Stockholder pursuant to Section 303A.02 of the
New York Stock Exchange Listed Company Manual (or any successor provision
thereof that is no less stringent than such section as in effect on the date
hereof). For purposes of this Agreement, the Independent Directors shall not be
deemed Affiliates of Stockholder.
"Lenders" is defined in Section 4.2(a)(iii).
"NYSE" means the New York Stock Exchange, Inc.
"Permitted Transferee" means (i) any Affiliate directly or indirectly
controlled by Stockholder; or (ii) the FRBNY, the U.S. Department of Treasury or
any other Person as directed by the FRBNY or the U.S. Department of Treasury.
"Preferred Stock" means the shares of preferred stock, par value $1.00
per share, of the Company and any securities issued in respect thereof, or in
substitution therefor, in connection with any stock split, dividend or
combination, or any reclassification, recapitalization, merger, consolidation,
exchange or other similar reorganization.
"Public Offering" means a public offering of shares of Common Stock
pursuant to an effective registration statement (other than on Form S-4, Form
S-8 or their equivalent) filed with the SEC pursuant to the Securities Act.
"Secured Loan" is defined in Section 4.2(a)(iii).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Separation Agreement" is defined in the Recitals.
"Shares" is defined in the Recitals.
"Stockholder" is defined in the Preamble.
"Survivor of a Fundamental Change" means (a) the issuer of the
securities received by the holders of Common Stock (in their capacities as such)
upon the occurrence of a Fundamental Change, to the extent the holders of Common
Stock receive other securities in exchange, conversion or substitution of their
shares of Common Stock in the transaction that resulted in such Fundamental
Change or (b) the Company (or its successor) in all other circumstances of a
Fundamental Change.
"Termination Date" is defined in Section 7.1(ii).
"Transfer" means, directly or indirectly, to sell, transfer, assign,
pledge, encumber, hypothecate or similarly dispose of (by operation of law or
otherwise), either voluntarily or involuntarily, or to enter into any contract,
option or other arrangement or understanding with respect to the sale, transfer,
assignment, pledge, encumbrance, hypothecation or similar disposition of (by
operation of law or otherwise), any Shares or any interest in any Shares;
provided, however, that a merger or consolidation in which Stockholder or any of
its
4
Affiliates is a constituent corporation shall not be deemed to be the Transfer
of any Shares Beneficially Owned by such Person (provided that a purpose of any
such transaction is not to avoid the provisions of this Agreement and that the
successor or surviving Person to such merger or consolidation, if not
Stockholder or such Affiliate, expressly assumes all obligations of Stockholder
or such Affiliate, as the case may be, under this Agreement).
"Voting Stock" means shares of Common Stock and any other securities
of the Company or its successor having the power to vote in the election of
Directors of the Company or its successor.
Section 1.2. Interpretation. (a) The headings in this Agreement are
for convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions of this
Agreement.
(b) The parties have participated jointly in negotiating and drafting
this Agreement. In the event that an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement.
(c) For purposes of this Agreement, except where otherwise expressly
provided or unless the context otherwise necessarily requires: (i) references to
this Agreement shall include a reference to all exhibits and schedules hereto;
(ii) the words "hereof", "herein" and "hereto", and words of similar import,
when used in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement; (iii) references to the Preamble,
Recitals, Articles, Sections or Schedules are to the preamble, recitals,
articles, sections or schedules to this Agreement; (iv) whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation" and shall not be
construed to mean that the examples given are an exclusive list of the topics
covered; (v) meanings specified in this Agreement are applicable to both the
singular and plural forms of these terms and to the masculine, feminine and
neuter genders, as the context requires; (vi) references to a Person include its
successors and permitted assigns; (vii) references to any agreement, instrument
or other document means such agreement, instrument or other document as amended,
modified or supplemented from time to time, including by waiver or consent, and
all attachments thereto and instruments incorporated therein; (viii) if a word
or phrase is defined, the other grammatical forms of such word or phrase have a
corresponding meaning; (ix) references to any Law is a reference to that Law and
the rules and regulations adopted or promulgated thereunder, in each case, as
amended, modified or supplemented as of the date on which the reference is made,
and all attachments thereto and instruments incorporated therein; (x) references
to any section of any statute, listing rule, rule, standard, regulation or other
law include any successor to such section; (xi) references to times of day or
dates are to local times or dates in New York, New York; and (xii) references to
currency are references to the lawful money of the United States.
5
ARTICLE II
VOTING AGREEMENTS
Section 2.1. Voting Agreements. (a) Stockholder shall vote at every
duly called annual or special meeting of stockholders of the Company, and at
every postponement or adjournment thereof, or act by written consent for all of
the Shares Beneficially Owned by it entitled to vote thereat: (i) in the manner
recommended by the Board with respect to the election of any Director nominee or
removal of any existing Director of the Board; and (ii) in favor of each matter
required to effectuate any provision of this Agreement. Notwithstanding the
foregoing, if Stockholder Beneficially Owns more than 30% of the outstanding
Common Stock, Stockholder shall vote the number of shares Beneficially Owned by
it in excess of 30% of the outstanding Common Stock in a manner proportionate to
the holders of the Common Stock (other than Stockholder, stockholders of the
Company Beneficially Owning more than 10% of the outstanding Common Stock and
directors and officers of the Company) voting on such matter in connection with
any election of any Director nominee or removal of any existing Director of the
Board.
(b) Stockholder shall cause any and all Shares Beneficially Owned by
it and entitled to Vote thereat to be present in person or represented by proxy
at all annual and special meetings of stockholders of the Company to the extent
necessary so that all Shares Beneficially Owned by it shall be counted as
present for the purposes of determining the presence of a quorum at such meeting
and to vote such shares in accordance with Section 2.1(a).
Section 2.2. Termination of Article II. This Article II shall
terminate and be of no further effect at such time as the Shares Beneficially
Owned by Stockholder no longer constitute at least 10% of the outstanding Common
Stock. Notwithstanding the foregoing, the rights and obligations of Stockholder
under this Article II shall survive a Fundamental Change to the extent that the
Shares Beneficially Owned by Stockholder continue to constitute at least 10% of
the total securities having the right to vote for the election of directors of
the Survivor of a Fundamental Change; provided that, for all purposes of this
Article II, if the Company is not the Survivor of a Fundamental Change, the
board of directors of the Survivor of a Fundamental Change shall be substituted
for the Board.
ARTICLE III
STANDSTILL
Section 3.1. Acquisition of Common Stock. (a) Except as provided in
Sections 3.1(b) and 3.2, Stockholder covenants and agrees with the Company that
it will not, and will cause its Affiliates and their respective directors and
executive officers not to, directly or indirectly, Beneficially Own or acquire,
offer or propose to acquire, or agree to acquire, whether by purchase, tender or
exchange offer, through the acquisition of control of another Person (including
by way of merger or consolidation), by joining a partnership, syndicate or other
Group or otherwise, the Beneficial Ownership of, any shares of Common Stock
other than the shares of Common Stock Beneficially Owned by Stockholder and its
Affiliates and their respective directors and executive officers as of the date
hereof (except by way of stock splits, stock
6
dividends, stock reclassifications or other distributions, recapitalizations or
offerings made available to and, if applicable, exercised on a pro rata basis
by, holders of Common Stock generally.
(b) Notwithstanding the foregoing, the prohibition set forth in
Section 3.1(a) shall not apply to (i) the acquisition (whether by merger,
consolidation or otherwise) by Stockholder or an Affiliate thereof of any entity
that Beneficially Owns shares of Common Stock at the time of the consummation of
such acquisition, provided that in connection with any such acquisition
Stockholder or its Affiliate, as the case may be, (A) divests the shares of
Common Stock Beneficially Owned by the acquired entity at the time of the
consummation of such acquisition (other than any shares of Common Stock acquired
in the ordinary course activities of the acquired entity as contemplated by
clause (ii) below) within a reasonable period of time after the consummation of
such acquisition, and (B) if any annual or special meeting of shareholders is
held prior to the disposition thereof, votes such shares on each matter
presented at any annual or special meeting of the stockholders or by written
consent in a manner proportionate to the holders of the Common Stock (other than
Stockholder, stockholders of the Company Beneficially Owning more than 10% of
the outstanding Common Stock, and directors and officers of the Company) voting
on such matter or (ii) ordinary course activities of Stockholder and its
Affiliates and their respective directors and executive officers, including (A)
proprietary and third party fund and asset management activities, (B) brokerage
and securities trading activities, (C) financial services and insurance
activities and (D) the acquisition of shares of Common Stock in connection with
securing or collecting a debt previously contracted in good faith; provided that
the purpose of any such transaction is not to avoid the provisions of this
Agreement.
(c) For the avoidance of doubt, this Agreement shall not be deemed to
apply to any Common Stock owned or acquired by individuals who are officers or
employees of the Company or any of its Subsidiaries or directors of the Company
or any of its Subsidiaries.
Section 3.2. Certain Restrictions. (a) Except as required in
connection with the execution, delivery or performance of this Agreement and as
otherwise required, permitted or contemplated by this Agreement or any other
Transaction Agreement (including with respect to any Transfer permitted pursuant
to Section 4.2(a)), Stockholder agrees not to, and to cause each of its
Affiliates and its and their respective directors and executive officers not to,
directly or indirectly, alone or in concert with others, without express
authorization of the Company:
(i) effect, initiate, propose or otherwise solicit stockholders
of the Company for the approval of one or more stockholder proposals or
induce or attempt to induce any other Person to effect, initiate, propose
or otherwise solicit any stockholder proposal;
(ii) (A) propose or seek to effect a Change of Control of the
Company by way of merger, consolidation, recapitalization, reorganization,
sale, lease, exchange, pledge or other disposition of substantially all
assets of the Company and the Company Subsidiaries or other business
combination involving, or a tender or exchange offer for securities of, the
Company or any of the Company Subsidiaries or any material portion of the
business or assets of the Company or any of the Company Subsidiaries or any
other
7
type of transaction that would otherwise result in a Change of Control of
the Company (any such action described in this clause (A), a "Company
Transaction Proposal"), (B) seek to exercise any control or influence over
the management of the Company or the Board or any of the businesses,
operations or policies of the Company or (C) present to the Company's
stockholders or any third party any proposal constituting or that can
reasonably be expected to result in a Company Transaction Proposal;
(iii) solicit proxies (or written consents) or assist or
participate in any other way, directly or indirectly, in any solicitation
of proxies (or written consents), or otherwise become a "participant" in a
"solicitation", or assist any "participant" in a "solicitation" (as such
terms are defined in Rule 14a-1 of Regulation 14A and Instruction 3 of Item
4 of Schedule 14A, respectively, under the Exchange Act) in opposition to
the recommendation or proposal of the Board, or recommend or request or
induce or attempt to induce any other Person to take any such actions, or
seek to advise, encourage or influence any other Person with respect to the
voting of (or the execution of a written consent in respect of) shares of
Common Stock or grant a proxy with respect to the voting of (or execution
of a written consent in respect of) shares of Common Stock to any Person
other than an officer or agent of Stockholder or the Company;
(iv) form, join in or in any other way (including by deposit of
Common Stock) participate in a partnership, pooling agreement, syndicate,
voting trust or other Group (other than a Group comprised solely of
Stockholder, its Affiliates and its Permitted Transferees) with respect to
Common Stock, or enter into any agreement or arrangement or otherwise act
in concert with any other Person, for the purpose of acquiring, holding,
voting or disposing of Common Stock, other than in respect of any agreement
or arrangement with the FRBNY or any other Person as directed by the FRBNY
or the U.S. Department of the Treasury;
(v) take any action which might cause the Company to be required
to make a public announcement regarding any of the types of matters set
forth in (i) through (iv) above;
(vi) enter into any discussions or arrangements with any third
party with respect to any of the foregoing; or
(vii) request, or induce or encourage any other Person to
request, that the Company amend or waive any of the provisions of this
Agreement.
(b) Notwithstanding the foregoing restrictions, if, at any time, (i)
the Company has entered into a definitive agreement, the consummation of which
would result in a Fundamental Change or (ii) any Person shall have commenced and
not withdrawn a bona fide public tender or exchange offer which if consummated
would result in a Fundamental Change, then the limitations set forth in Section
3.2 shall not be applicable to Stockholder for so long as the conditions
described in this Section 3.2(b) continue.
8
Section 3.3. Termination of Article III. This Article III shall
terminate and be of no further effect at such time as the Shares Beneficially
Owned by Stockholder no longer constitute at least 10% of the outstanding Common
Stock.
ARTICLE IV
TRANSFER RESTRICTIONS
Section 4.1. General Transfer Restrictions. The right of Stockholder
to Transfer any Shares is subject to the restrictions set forth in this Article
IV, and no Transfer of Shares by Stockholder may be effected except in
compliance with this Article IV. Any attempted Transfer in violation of this
Agreement shall be of no effect and shall be null and void, regardless of
whether the purported transferee has any actual or constructive knowledge of the
Transfer restrictions set forth in this Agreement, and shall not be recorded on
the stock transfer books of the Company.
Section 4.2. Restrictions on Transfer. (a) Without the prior written
consent of the Company as approved by the Board, Stockholder shall not Transfer
any Shares except as expressly permitted by, and in compliance with, the
following provisions of this Section 4.2(a):
(i) Stockholder may Transfer any or all of the Shares (A) to the
Company or any of its Subsidiaries, (B) pursuant to any tender offer,
exchange offer, merger, reclassification, reorganization, recapitalization
or other similar transaction in which stockholders of the Company are
offered, permitted or required to participate as holders of any of the
Company's Voting Stock, (C) in connection with any Public Offering,
provided that the underwriters or placement agent in such Public Offering
implement reasonable protections to the extent practicable so that such
Public Offering will not be made to, and would not reasonably facilitate
the acquisition of Common Stock by, a Person or Group who after such Public
Offering would Beneficially Own more than 10% of the Common Stock, (D) to
any other Person or Group to the extent such Person or Group would not, to
the knowledge of Stockholder after due inquiry (it being understood that
due inquiry shall not be required in circumstances where the purchaser in a
sale transaction is not reasonably identifiable, such as in a "brokers'
transaction", as defined in Rule 144 under the Securities Act), upon
completion of a Transfer of Shares by Stockholder Beneficially Own more
than ten percent (10%) of the outstanding Common Stock or (E) to any other
Person or Group approved by, or that acquires shares of Common Stock in
connection with any transaction approved or recommended by, the Board;
(ii) Stockholder may Transfer any or all of the Shares to any
Permitted Transferee; provided that such Permitted Transferee (unless such
Permitted Transferee is the FRBNY or the U.S. Department of the Treasury)
(A) executes a counterpart to this Agreement, thereby agreeing to be bound
by the terms hereof, and (B) agrees that the representations, covenants and
other agreements made by Stockholder herein shall be deemed to have been
made by such Permitted Transferee. Upon any such Transfer, the Permitted
Transferee shall be entitled to the same rights, and subject to the
obligations and restrictions, contained herein applicable to Stockholder at
the time of such Transfer.
9
For purposes of calculating the Shares Beneficially Owned by Stockholder at
any time in accordance with this Agreement, any Shares Transferred to any
Permitted Transferee in accordance with this Section 4.2(a)(ii) shall be
included in such calculation.
(iii) Stockholder may make a bona fide pledge of any or all of
the Shares to (A) the FRBNY or any other Person as directed by the FRBNY or
the U.S. Department of the Treasury with respect to any agreement or
arrangement between Stockholder and its Affiliates, on the one hand, and
the FRBNY or any other Person as directed by the FRBNY or the U.S.
Department of the Treasury, on the other hand, and (B) any bank or
financial institution ("Banks", and together with the FRBNY and the Persons
referred to in clause (A) above, "Lenders") solely for the purpose of
securing bona fide indebtedness for borrowed money (a "Secured Loan"), and
such Lenders may execute a bona fide foreclosure upon any Shares so pledged
upon the terms and subject to the conditions set forth in any agreements
concerning such pledge. For the avoidance of doubt, any pledge or other
contractual encumbrance or foreclosure resulting from any such Secured Loan
or arrangement with the FRBNY or any other Person referred to in clause (A)
above (including an obligation to repay such Secured Loan or other
obligation with the proceeds of any Transfer of, or dividend or
distribution on, the Shares) shall not be deemed to be a Transfer
associated with the Shares.
(b) This Section 4.2 shall terminate and be of no further effect (i)
at such time as the Shares Beneficially Owned by Stockholder no longer
constitute at least 10% of the outstanding Common Stock or (ii) or upon the
occurrence of a Fundamental Change.
Section 4.3. Securities Act. (a) The Company may make a notation on
its records or give instructions to any transfer agents or registrars for the
Common Stock in order to implement the restrictions on Transfer set forth in
Section 4.2. In connection with any Transfer of Shares other than (x) a Transfer
pursuant to a Public Offering or (y) a sale pursuant to Rule 144 under the
Securities Act, the transferor shall provide the Company with such customary
certificates, opinions and other documents as the Company may reasonably request
in respect of compliance of such Transfer with applicable securities
registration requirements.
(a) Subject to the requirement of applicable Law, Stockholder will not
be subject to the Company's trading policies requiring pre-clearance or limiting
trading to specified dates and Stockholder acknowledges its obligation hereunder
not to Transfer Shares in contravention of applicable Law, including each of
Section 10(b) of and Rule 10b-5 under the Exchange Act.
ARTICLE V
COVENANTS AND OTHER MATTERS
Section 5.1. Other Agreements. In addition to the specific agreements,
documents and instruments described in this Agreement, the parties agree to
execute or cause to be executed by the appropriate parties and deliver, as
appropriate, such other agreements, instruments and other documents as may be
necessary or desirable in order to consummate and make effective the
transactions contemplated by this Agreement.
10
Section 5.2. Actions Requiring Consent. For as long as the Shares
Beneficially Owned by Stockholder constitute at least 10% of the outstanding
Common Stock, the Company must obtain Stockholder's written consent before:
(a) entering into any agreement or arrangement or taking any other
action that (i) restricts the ability of Stockholder or its Affiliates to
acquire or Beneficially Own shares of Common Stock or to Transfer the Shares in
a manner not otherwise prohibited by the terms of this Agreement, (ii) is
inconsistent or conflicts with the Company's ability to perform its obligations
under this Agreement or any other Transaction Agreements or the transactions
contemplated hereby or thereby or (iii) is inconsistent or conflicts with the
rights or obligations of Stockholder under this Agreement; or
(b) amending, modifying or repealing (whether by merger,
consolidation, conversion or otherwise) any provision of the Restated
Certificate of Incorporation or Bylaws of the Company that implements or
supports Stockholder's rights under this Agreement or any other Transaction
Agreement or adopting any provisions inconsistent herewith or therewith.
Section 5.3. Indemnification. (a) Each of AIG and AHAC shall
indemnify, defend and hold harmless the Company and its Representatives
(collectively, the "Company Indemnified Parties"), severally and not jointly,
against, and reimburse any Company Indemnified Party for, all Losses that such
Company Indemnified Party may at any time suffer or incur, or become subject to
as a result of or in connection with:
(i) the inaccuracy or breach of any representation or warranty
made by it in this Agreement; or
(ii) any breach or failure by it to perform any of its covenants
or obligations contained in this Agreement.
(b) The Company shall indemnify, defend and hold harmless AIG, AHAC,
and their respective Representatives (collectively, the "AIG Indemnified
Parties") against, and reimburse any AIG Indemnified Party for, all Losses that
such AIG Indemnified Party may at any time suffer or incur, or become subject to
as a result of or in connection with:
(i) the inaccuracy or breach of any representation or warranty
made by the Company in this Agreement; or
(ii) any breach or failure by the Company to perform any of its
covenants or obligations contained in this Agreement.
(c) Claims for indemnification under this Section 5.3 shall be made
pursuant to the procedures set forth in section 8.04 and section 8.05 of the
Separation Agreement.
(d) Except for the rights any AIG Indemnified Party or Company
Indemnified Party is or becomes entitled to under Law or under the Restated
Certificate of Incorporation or Bylaws of the Company or any of its Subsidiaries
and for injunctive and provisional relief (including specific performance)
provided for in Section 7.11, each party hereto acknowledges and agrees that the
indemnification provisions of this Section 5.3 shall be the sole and exclusive
11
remedies of the parties hereto for any breach of the representations or
warranties or any breach or failure by the other party to perform any of its
covenants or obligations hereunder.
Section 5.4. Information Rights. The Company will deliver to an
officer designated by Stockholder copies of all materials and other information
sent to the Board (and any committee thereof) of the Company and to the board of
directors of any Company Subsidiary (and any committee thereof) at the same time
as such materials are sent to the Directors of the Company and the directors of
any Company Subsidiary, or any of their respective committees, in their
respective capacities as directors of the Company or any Company Subsidiary,
except as prohibited by applicable Law; provided that any such information shall
be subject to the terms of section 3.18 of the Separation Agreement as if the
Company or a Company Subsidiary provided such information directly to
Stockholder or any of its Affiliates. Notwithstanding the foregoing, Stockholder
shall not be entitled to any information (1) that is sent to the Board of the
Company (or any committee thereof) or the board of directors of any Company
Subsidiary (or any committee thereof) relating to any matter or transaction to
which Stockholder is a party or otherwise "interested" and (2) that is sent
solely to a committee thereof required by Law, Self-Regulatory Organization or
advice of counsel to be comprised solely of Independent Directors.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Section 6.1. Representations and Warranties of AIG and AHAC . Each of
AIG and AHAC hereby represents and warrants, severally and not jointly, to the
Company as follows:
(a) Incorporation and Authority of AIG and AHAC. AIG is a corporation
duly incorporated, validly existing and in good standing under the Laws of the
State of Delaware. AHAC is an insurance company duly organized, validly existing
and in good standing under the Laws of the State of New York. It has full legal
power and authority, and has taken all required legal action necessary, to
execute and deliver this Agreement and all other agreements, instruments,
certificates, notices and other documents as are necessary to consummate the
transactions contemplated hereby and otherwise to carry out the terms of this
Agreement. It has duly and validly authorized the execution and delivery of this
Agreement, and the consummation of the transactions contemplated hereby has been
duly and validly authorized by it and no other proceedings on its part are
necessary to authorize the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
(b) Enforceability. This Agreement has been duly and validly executed
by it and, assuming due authorization, execution and delivery by the Company
constitutes, or upon execution and delivery thereof will constitute, the legal,
valid and binding agreement of it, enforceable against it in accordance with the
terms hereof, subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium, rehabilitation, liquidation, fraudulent
conveyance or similar Laws relating to or affecting creditors' rights generally
and subject, as to enforceability, to the effect of general equitable principles
(regardless of whether enforcement is sought in a proceeding in equity or at
law).
12
(c) Consents and Approvals. Except as set forth on Schedule 6.1(c), no
consent, approval, waiver, authorization, notice or filing is required to be
obtained by it from, or to be given by it to, or made by it with, any
Governmental Authority or any other Person, in connection with the execution,
delivery and performance by it of this Agreement.
(d) Non-Contravention. The execution, delivery and performance by it
of this Agreement, and the consummation of the transactions contemplated hereby,
do not and will not (i) violate any provision of its Organizational Documents;
(ii) assuming the receipt of all consents, approvals, waivers and authorizations
and the making of the notices and filings set forth on Schedule 6.1(c), conflict
with, or result in the breach of, or constitute a default under, or result in
the termination, cancellation, modification or acceleration (whether after the
filing of notice or the lapse of time or both) of any right or obligation of it
under, or result in a loss of any benefit to which it is entitled under, any
Contract, or result in the creation of any Lien (other than Permitted Liens)
upon its assets and properties; or (iii) assuming the receipt of all consents,
approvals, waivers and authorizations and the making of the notices and filings
set forth on Schedule 6.1(c) or required to be made or obtained by the Company,
violate, or result in a breach of, or constitute a default under any Law,
Governmental Order or Self-Regulatory Organization Approval to which it is
subject, other than, in the cases of clauses (ii) and (iii), conflicts,
breaches, terminations, defaults, cancellations, accelerations, losses,
violations or Liens that would not materially impair or delay its ability to
perform its obligations hereunder.
(e) Disclaimer. Except for the representations and warranties
contained in this Section 6.1, it does not make any other representation or
warranty of any kind or nature whatsoever, oral or written, express or implied,
with respect to it, any of its Affiliates, this Agreement or the transactions
contemplated by this Agreement.
Section 6.2. Representations and Warranties of the Company . The
Company hereby represents and warrants to AIG and AHAC as follows:
(a) Incorporation and Authority of the Company. The Company is a
corporation duly incorporated, validly existing and in good standing under the
Laws of the State of Delaware. The Company has full legal power and authority,
and has taken all required legal action necessary, to execute and deliver this
Agreement and all other agreements, instruments, certificates, notices and other
documents as are necessary to consummate the transactions contemplated hereby
and otherwise to carry out the terms of this Agreement. The Company has duly and
validly authorized the execution and delivery of this Agreement to which it is a
party, and the consummation of the transactions contemplated hereby has been
duly and validly authorized by the Company and no other proceedings on the part
of the Company are necessary to authorize the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby by the
Company.
(b) Enforceability. This Agreement has been duly and validly executed
by the Company and, assuming due authorization, execution and delivery by AIG
and AHAC, constitutes, or upon execution and delivery thereof will constitute,
the legal, valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, subject to the effect of any applicable
bankruptcy, reorganization, insolvency, moratorium,
13
rehabilitation, liquidation, fraudulent conveyance or similar Laws relating to
or affecting creditors' rights generally and subject, as to enforceability, to
the effect of general equitable principles (regardless of whether enforcement is
sought in a proceeding in equity or at law).
(c) Consents and Approvals. Except as set forth on Schedule 6.2(c), no
consent, approval, waiver, authorization, notice or filing is required to be
obtained by the Company from, or to be given by the Company to, or made by the
Company with, any Governmental Authority or other Person, in connection with the
execution, delivery and performance by the Company of this Agreement.
(d) Non-Contravention. The execution, delivery and performance by the
Company of this Agreement, and the consummation of the transactions contemplated
hereby, do not and will not (i) violate any provision of the Organizational
Documents of the Company; (ii) assuming the receipt of all consents, approvals,
waivers and authorizations and the making of the notices and filings set forth
on Schedule 6.2(c), to the Knowledge of the Company, conflict with, or result in
the breach of, or constitute a default under, or result in the termination,
cancellation, modification or acceleration (whether after the filing of notice
or the lapse of time or both) of any right or obligation of the Company under,
or result in a loss of any benefit to which the Company is entitled under, any
Contract, or result in the creation of any Lien (other than Permitted Liens)
upon the assets and properties of the Company; or (iii) assuming the receipt of
all consents, approvals, waivers and authorizations and the making of notices
and filings set forth on Schedule 6.2(c) or required to be made or obtained by
AIG or any of its Affiliates, to the Knowledge of the Company, violate or result
in a breach of or constitute a default under any Law, Governmental Order or
Self-Regulatory Organization Approval to which the Company is subject, other
than, in the cases of clauses (ii) and (iii), conflicts, breaches, terminations,
defaults, cancellations, accelerations, losses, violations or Liens that would
not materially impair or delay the Company's ability to perform its obligations
hereunder.
(e) Disclaimer. Except for the representations and warranties
contained in this Section 6.2, the Company does not make any other
representation or warranty of any kind or nature whatsoever, oral or written,
express or implied, with respect to the Company or any of the Company
Subsidiaries, this Agreement or the transactions contemplated by this Agreement.
ARTICLE VII
MISCELLANEOUS AND GENERAL
Section 7.1. Termination. This Agreement shall terminate, except for
this Article VII and Section 5.3, which shall survive such termination, upon the
earlier of: (i) the date the Shares Beneficially Owned by Stockholder cease to
constitute at least 10% of the outstanding Common Stock or (ii) written consent
of the parties hereto (the "Termination Date"). For the avoidance of doubt,
after the Termination Date no party shall have any liability of any kind to any
other party under this Agreement, except with respect to Section 5.3.
Section 7.2. Expenses . All expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid in accordance
with section 9.01 of the Separation Agreement.
14
Section 7.3. Amendment and Waiver. Except as otherwise provided
herein, no modification, amendment or waiver of any provisions of this
Agreement, and no giving of any consent provided for hereunder, shall be
effective against the Company or Stockholder unless such modification,
amendment, waiver or consent is approved by (i) a majority of the Directors then
in office or (ii) any committee thereof formed solely for the purpose of
reviewing and approving transactions or agreements between the Company and the
Company Subsidiaries, on the one hand, and Stockholder and its Affiliates, on
the other hand. In addition to the foregoing, no provision of this Agreement may
be amended, supplemented or modified except by a written instrument signed by
all of the parties hereto, and no provision of this Agreement may be waived
except by a written instrument signed by the party against whom the waiver is to
be effective. No failure or delay by any party hereto in exercising any right,
power or privilege hereunder shall operate as a waiver thereof 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.
Section 7.4. Counterparts. This Agreement shall be effective upon
delivery of original signature pages or electronic copies thereof executed by
each of the parties. This Agreement may be executed in any number of
counterparts, each such counterpart being deemed to be an original instrument,
and all such counterparts shall together constitute one and the same agreement.
Section 7.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL . (a) THIS
AGREEMENT, AND ALL CLAIMS AND DEFENSES ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR THE FORMATION, BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT,
SHALL IN ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN
ACCORDANCE WITH THE LAW OF THE STATE OF DELAWARE. Each of the parties
irrevocably and unconditionally:
(i) submits for itself and its property to the exclusive
jurisdiction of the courts of the State of Delaware (and any appeals court
therefrom) in any Action directly or indirectly arising out of or relating
to this Agreement or the formation, breach, termination or validity of this
Agreement, and agrees not to assert, as a defense in any action, suit or
proceeding for the interpretation or enforcement hereof, that it is not
subject thereto or that such action, suit or proceeding may not be brought
or is not maintainable in said courts or that the venue thereof may not be
appropriate or that this Agreement may not be enforced in or by such
courts, and the parties hereto irrevocably agree that all claims with
respect to such action or proceeding shall be heard and determined solely
in Delaware state court;
(ii) consents to jurisdiction over the Person of such parties and
agrees that mailing of process or other papers in connection with any such
action or proceeding in the manner provided in Section 7.6 or in such other
manner as may be permitted by Law, shall be valid and sufficient service
thereof;
(iii) consents that any such Action may and shall be brought in
such court and waives any objection that it may now or hereafter have to
the venue or
15
jurisdiction of any such Action in such court or that such court is an
inconvenient forum for the Action and agrees not to assert, plead or claim
the same;
(iv) agrees that the final judgment of such court shall be
enforceable in any court having jurisdiction over the relevant party or any
of its assets;
(v) irrevocably waives any right to remove any such Action from
the Delaware Court of Chancery to any federal court;
(vi) agrees that service of process in any such Action may be
effected by mailing a copy of such process by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to such party
at its address as provided in Section 7.6; and
(vii) agrees that nothing in this Agreement shall affect the
right to effect service of process in any other manner permitted by the
applicable rules of procedure.
(b) EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY
ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION
DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE FORMATION, BREACH,
TERMINATION OR VALIDITY OF THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES
THAT (i) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE OTHER PARTY WOULD NOT, IN THE
EVENT OF ANY ACTION, SEEK TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY
MAKES THIS WAIVER VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 7.5. EITHER PARTY MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF THE PARTIES TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
Section 7.6. Notices. All notices, requests, instructions, demands or
other communications to be given under this Agreement shall be given in
accordance with section 9.02 of the Separation Agreement
Section 7.7. Entire Agreement . This Agreement, together with the
agreements and other documents and instruments referred to herein or annexed
hereto, constitute the entire agreement among the parties hereto, and supersede
all other prior agreements, understandings, representations and warranties both
written and oral, among the parties, with respect to the subject matter of this
Agreement.
16
Section 7.8. No Third Party Beneficiaries. Except as provided in
Section 5.3 with respect to Company Indemnified Parties and AIG Indemnified
Parties, this Agreement is for the sole benefit of the parties hereto and their
successors and permitted assigns, and nothing in this Agreement, express or
implied, is not intended to, and does not, confer upon any other Person any
legal or equitable right, benefit or remedy of any nature whatsoever under or by
reason hereunder.
Section 7.9. Confidentiality. Stockholder agrees that any information
provided to it hereunder is confidential and shall only be disclosed by it to
any other Person in accordance with section 3.18 of the Separation Agreement.
Section 7.10. Severability. The provisions of this Agreement shall be
deemed severable and the invalidity, illegality or unenforceability of any
provision hereto shall not affect the validity, legality or enforceability of
the other provisions hereof. If any provision of this Agreement, or the
application thereof to any Person or any circumstance, is invalid, illegal or
unenforceable, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party hereto. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties hereto as closely as possible in a
mutually acceptable manner in order that the transactions contemplated by this
Agreement be consummated as originally contemplated to the greatest extent
possible.
Section 7.11. Specific Performance; No Special Damages. (a) The
parties acknowledge and agree that in the event that any of the provisions of
this Agreement are not performed in accordance with its specific terms or are
otherwise breached, irreparable damage would occur for which monetary damages
would not be an adequate remedy. The parties further acknowledge and agree that,
in addition to any other remedy to which such party is entitled to at Law or in
equity, the parties shall be entitled to enforce the terms of this Agreement by
decree of specific performance, without the necessity of proving the inadequacy
of monetary damages or of posting bond or other undertaking, as a remedy and to
obtain injunctive relief against any breach or threatened breach hereof. In the
event that any action is brought in equity to enforce the provisions of this
Agreement, no party hereto shall allege, and each party hereto waives the
defense or counterclaim that there is an adequate remedy at Law.
(a) Each party (i) agrees that there shall be no special,
consequential, indirect or incidental damages, exemplary, punitive or multiple
damages connected with or resulting from any breach of this Agreement, or
actions undertaken in connection with or related hereto, including any such
damages which are based upon breach of contract, tort, breach of warranty,
strict liability, statute, operation of law or any other theory of recovery,
except to the extent such damages are actually incurred by a party hereunder to
a third party, and (ii) hereby waives any rights to claim such damages.
Section 7.12. Assignment (a). Neither this Agreement nor any of the
rights or obligations of any party under this Agreement shall be assigned, in
whole or in part (by operation of law or otherwise), by any party without the
prior written consent of the other parties hereto
17
except as and to the extent expressly provided for in this Agreement; provided,
however, that no such assignment shall release the Company or Stockholder from
any liability or obligation under this Agreement. Any attempted assignment in
violation of this Section 7.12 shall be void. Subject to the foregoing, this
Agreement shall bind and inure to the benefit of and be enforceable by the
parties hereto and their respective successors and permitted assigns.
Section 7.13. Effective Time. This Agreement shall become effective
on the First Time of Delivery if at such time the Shares Beneficially Owned by
Stockholder constitute at least 10% of the outstanding Common Stock. If the
Shares Beneficially Owned by Stockholder at the First Time of Delivery do not
constitute at least 10% of the outstanding Common Stock, this Agreement will be
of no force or effect.
[Next page is the signature page.]
18
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties as of the date first
written above.
AMERICAN INTERNATIONAL GROUP, INC.
By
--------------------------------------
Name:
Title:
AMERICAN HOME ASSURANCE COMPANY
By
--------------------------------------
Name:
Title:
TRANSATLANTIC HOLDINGS, INC.
By
--------------------------------------
Name:
Title:
S-1
EXHIBIT H
FORM OF RESTATED CERTIFICATE OF INCORPORATION OF TRH
See Attached.
H-1
FORM OF RESTATED
CERTIFICATE OF INCORPORATION
OF
TRANSATLANTIC HOLDINGS, INC.
The undersigned President and Chief Executive Officer of Transatlantic
Holdings, Inc. does hereby certify as follows:
The name of the corporation is Transatlantic Holdings, Inc. (the
"CORPORATION").
1. The original Certificate of Incorporation of the Corporation was filed
with the Secretary of State of the State of Delaware on June 10, 1986,
under the name PREINCO Holdings, Inc.
2. In accordance with Sections 242 and 245 of the General Corporation Law
of the State of Delaware (the "DGCL"), this Restated Certificate of
Incorporation has been (a) duly proposed by resolutions adopted and
declared advisable by the Board of Directors of the Corporation, and
(b) approved by the written consent of the stockholders of the
Corporation in accordance with Section 228 of the DGCL.
3. Pursuant to Section 103(d) of the DGCL, this Restated Certificate of
Incorporation shall become effective upon filing with the Secretary of
State of the State of Delaware.
4. The text of the Certificate of Incorporation of the Corporation is
hereby amended and restated to read in its entirety as follows:
FIRST: The name of the Corporation is Transatlantic Holdings, Inc.
SECOND: The address of the registered office of the Corporation in the
State of Delaware is ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, in the City of
Wilmington, County of New Castle. The name of the Corporation's registered agent
at such address is Corporation Service Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the DGCL.
FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is two hundred and ten million
(210,000,000) shares, of which two hundred million (200,000,000) shares of the
par value of $1.00 per share shall be designated as Common Stock and ten million
(10,000,000) shares of the par value of $1.00 per share shall be designated as
Preferred Stock.
The rights, preferences and limitations of said classes of stock are as
follows:
1. The Preferred Stock may be issued from time to time by the Board
of
1
Directors as shares of one (1) or more series of Preferred Stock,
and the Board of Directors is expressly authorized, prior to
issuance, in the resolution or resolutions providing for the
issue of shares of each particular series, to fix the following:
a. The distinctive serial designation of such series which
shall distinguish it from other series;
b. The number of shares included in such series, which number
may be increased or decreased from time to time unless
otherwise provided by the Board of Directors in creating the
series;
c. The annual dividend rate (or method of determining such
rate) for shares of such series, if any, and the date or
dates upon which such dividends shall be payable;
d. Whether dividends on the shares of such series shall be
cumulative, and, in the case of shares of any series having
cumulative dividend rights, the date or dates or method of
determining the date or dates from which dividends on the
shares of such series shall be cumulative;
e. The amount or amounts which shall be paid out of the assets
of the Corporation to the holders of the shares of such
series upon voluntary or involuntary liquidation,
dissolution or winding up of the Corporation;
f. The price or prices at which, the period or periods within
which and the terms and conditions, if any, upon which the
shares of such series may be redeemed, in whole or in part,
at the option of the Corporation;
g. The obligation, if any, of the Corporation to purchase or
redeem shares of such series pursuant to a sinking fund or
otherwise and the price or prices at which, the period or
periods within which and the terms and conditions upon which
the shares of such series shall be redeemed, in whole or in
part, pursuant to such obligation;
h. The period or periods within which and the terms and
conditions, if any, including the price or prices or the
rate or rates of conversion and the terms and conditions of
any adjustments thereof, upon which the shares of such
series shall be convertible at the option of the holder into
shares of any class of stock or into shares of any other
series of Preferred Stock;
i. The voting rights, if any, of the shares of such series in
addition to those required by law, including the number of
votes per share;
2
j. The ranking of the shares of the series as compared with
shares of other series of Preferred Stock in respect of the
right to receive dividends and the right to receive payments
out of the assets of the Corporation upon voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation; and
k. Any other relative rights, preferences or limitations of the
shares of the series not inconsistent herewith or with
applicable law.
2. All series of Preferred Stock shall rank senior to all series of
Common Stock in respect of the right to receive dividends (to the
extent dividends are payable on a series of Preferred Stock) and
the right to receive payments out of the assets of the
Corporation upon voluntary or involuntary liquidation,
dissolution or winding up of the Corporation. All shares of
Preferred Stock redeemed, purchased or otherwise acquired by the
Corporation (including shares surrendered for conversion) shall
be canceled and upon the effectiveness of any filing required by
the DGCL shall be restored to the status of authorized but
unissued Preferred Stock undesignated as to series.
3. No holder of shares of Common Stock or of shares of Preferred
Stock shall be entitled as a matter of right to subscribe for or
purchase, or have any preemptive right with respect to, any part
of any new or additional issue of stock of any class whatsoever,
or of securities convertible into any stock of any class
whatsoever, whether now or hereafter authorized and whether
issued for cash or other consideration or by way of dividend.
4. Except as otherwise provided by the Board of Directors in
accordance with Section 1 above in respect of any series of the
Preferred Stock or as required by law, all voting rights of the
Corporation shall be vested exclusively in the holders of the
Common Stock who shall be entitled to one (1) vote per share.
FIFTH: The following provisions are inserted for the management of the
business and for the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
1. The number of directors of the Corporation shall be such as from
time to time shall be fixed solely by the Board of Directors.
Election of directors need not be by ballot unless the By-Laws so
provide.
2. In furtherance and not in limitation of the powers conferred upon
the Board of Directors by the DGCL and this Restated Certificate
of Incorporation, the Board of Directors is hereby expressly
empowered to exercise all such powers and do all such acts and
things as may be exercised or done by the Corporation, subject to
applicable law.
3. The Board of Directors shall have power, without the assent or
vote of the
3
stockholders, to make, adopt, alter, amend, change, supplement,
add to and repeal the By-Laws of the Corporation in any manner
not inconsistent with the DGCL or this Restated Certificate of
Incorporation.
4. A director may be removed from office with or without cause, and
only by the affirmative vote of the holders of at least a
majority of the voting power of all of the outstanding capital
stock of the Corporation entitled to vote in respect thereof.
SIXTH: A director of the Corporation shall not be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except to the extent such exemption from liability or limitation
thereof is not permitted under the DGCL as currently in effect or as the same
may hereafter be amended. If the DGCL is amended after the filing of this
Restated Certificate of Incorporation to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability
of a director of the Corporation with respect to actions taken or omitted prior
to the effectiveness of such amendment shall be eliminated or limited to the
fullest extent permitted by the DGCL as so amended. Furthermore, any repeal or
modification of this Article SIXTH shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.
SEVENTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Restated Certificate of Incorporation in
the manner now or hereafter prescribed by law, and all rights and powers
conferred herein on stockholders, directors and officers are subject to this
reserved power.
EIGHTH: The Corporation shall be governed by Section 203 of the DGCL.
4
IN WITNESS WHEREOF, this Restated Certificate of Incorporation has been
signed by the President and Chief Executive Officer of the Corporation this ___
day of [-], 2009.
TRANSATLANTIC HOLDINGS, INC.
By:
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Name:
Title:
[Signature page of the Restated Certificate of Incorporation]