STOCK PURCHASE AGREEMENT
AMONG
ATLAS FINANCIAL HOLDINGS, INC.,
AND
HENDRICKS HOLDING COMPANY, INC.
DATED AS OF OCTOBER 24, 2012

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Table of Contents

Article I
DEFINITIONS                                1

SECTION 1.1
Defined Terms                            1

Article II
PURCHASE AND SALE OF CAPITAL STOCK            13

SECTION 2.1
Purchase and Sale                            13

SECTION 2.2
Purchase Price                            13

SECTION 2.3
Other Post‑Closing Adjustments                    15

SECTION 2.4
Closing and Effective Date                    20

SECTION 2.5
Closing Deliveries                            20

Article III
REPRESENTATIONS AND WARRANTIES                22

SECTION 3.1
Representations and Warranties of Seller                22

SECTION 3.2
Representations and Warranties of Buyer                39

Article IV
COVENANTS                                40

SECTION 4.1
Conduct of Business of the Company                40

SECTION 4.2
Access to Information                        43

SECTION 4.3
Consents, Approvals and Filings                    43

SECTION 4.4
Public Announcements                        44

SECTION 4.5
Subsequent Statutory Statements                    45

SECTION 4.6
Acquisition Proposal                        45

SECTION 4.7
Intercompany Accounts; Affiliate Agreements            45

SECTION 4.8
Termination of Signing and Withdrawal Powers            46

SECTION 4.9
Obligations of Affiliates                        46

SECTION 4.10
Notification of Certain Matters                    46

SECTION 4.11
Confidentiality; Covenant Not to Compete; Non‑Solicitation    46

SECTION 4.12
Board of Directors of Buyer                    48

Article V
CONDITIONS PRECEDENT                        48

SECTION 5.1
Conditions to Obligations of Buyer                48

SECTION 5.2
Conditions to Obligations of Seller                49

Article VI
SURVIVAL                                50

Article VII
INDEMNIFICATION                            50

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SECTION 7.1
Obligation to Indemnify                        50

SECTION 7.2
Indemnification Notice Procedures                53

SECTION 7.3
Third Party Claims                        54

SECTION 7.4
Survival                                56

SECTION 7.5
Indemnification Payments; Characterization            56

Article VIII
TAX MATTERS                                56

SECTION 8.1
Tax Indemnity                            56

SECTION 8.2
Preparation and Filing of Tax Returns                57

SECTION 8.3
Tax Refunds                            59

SECTION 8.4    Tax Notice; Tax Controversies                    59
SECTION 8.5
Cooperation and Controversies                    60

SECTION 8.6
Transfer Taxes                            60

SECTION 8.7
Code Section 338(h)(10) Election                60

Article IX
TERMINATION PRIOR TO THE CLOSING                61

SECTION 9.1
Termination of Agreement                    61

SECTION 9.2
Effect of Termination; Survival                    62

Article X
GENERAL PROVISIONS                        62

SECTION 10.1
Fees and Expenses                        62

SECTION 10.2
Notices                                62

SECTION 10.3
Interpretation                            63

SECTION 10.4
Entire Agreement; Third‑Party Beneficiaries            63

SECTION 10.5
Governing Law; Submission to Jurisdiction; Waiver of Jury Trial        64

SECTION 10.6
Assignment                            64

SECTION 10.7
Specific Performance                        64

SECTION 10.8
Severability                            65

SECTION 10.9
Amendment; Modification and Waiver                65

SECTION 10.10
Counterparts                            65

SECTION 10.11
Attorney's Fees                            65

SECTION 10.12
Interest                                65

Exhibit A - Holdback Note Terms
Exhibit B - Form of WC Reinsurance Agreement
Exhibit C - Purchase Price Calculation and Payment Methodology

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Exhibit D - Buyer Note Terms
Exhibit E - Proposed Final DTAs and DTLs

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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of October 24, 2012
(the “Date of this Agreement”), is made by and among , Hendricks Holding
Company, Inc., a Wisconsin corporation (“Seller”), and Atlas Financial Holdings,
Inc., a Cayman Islands company (“Buyer”). Buyer and Seller are sometimes
referred to herein as the “Parties” and each, individually, as a “Party”.
RECITALS
WHEREAS, Seller owns all of the issued and outstanding shares of capital stock
of Camelot Services, Inc., a Missouri corporation (the “Company”);
WHEREAS, the Company in turn owns all of the issued and outstanding shares of
capital stock, par value $100.00 per share, of Gateway Insurance Company, a
Missouri insurance company (“Gateway”) (the “Gateway Shares”); and
WHEREAS, Seller desires to sell and transfer to Buyer, and Buyer desires to
purchase from Seller, 500 shares of the common stock, par value $1.00 per share,
of the Company (the “Company Shares”), which constitutes all of the issued and
outstanding shares of capital stock of the Company.
NOW, THEREFORE, in consideration of the representations, warranties, covenants
and obligations contained in this Agreement, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, and
intending to be legally bound hereby, the Parties agree as follows:
ARTICLE I

DEFINITIONS
SECTION 1.1 Defined Terms. For purposes of this Agreement, the following terms
will have the respective meanings set forth below:
“Acquisition Proposal” means any inquiry, proposal or offer from any third party
relating to, in a single transaction or series of related transactions, any (a)
acquisition of assets of the Company or of Gateway, (b) acquisition of
beneficial ownership of any capital stock or other securities of the Company or
Gateway, or (c) merger, consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution or similar transaction involving the
Company or Gateway; in each case, other than the transactions contemplated by
this Agreement, including but not limited to any sale of the WC Renewal Rights,
or any such transaction directly involving solely Seller's or its Affiliates'
(other than the Company's or Gateway's) assets, businesses or capital stock or
securities.
“Action” means any civil, criminal, administrative, investigative or informal
action, audit, demand, suit, claim, arbitration, hearing, litigation, dispute,
investigation or other proceeding of any kind or nature.
“Affiliate” means, with respect to any Person, any Person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the Person in question. For purposes of the
foregoing, “control,” including the terms “controlling,” “controlled by” and
“under common control with,” means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by Contract or
otherwise.
“Affiliate Agreement” has the meaning set forth in Section 3.1(r).
“Annual DTA DTL Notice” has the meaning set forth in Section 2.3(b)(vii).
“Annual Tax Cost” has the meaning set forth in Section 2.3(b)(vii).
“Annual Tax Savings” has the meaning set forth in Section 2.3(b)(vii).

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“Audited SAP Statements” has the meaning set forth in Section 3.1(d)(i).
“Book Value” has the meaning set forth in Section 2.2(a).
“Business Day” means any day other than a Saturday, a Sunday or any other day on
which commercial banks in the Chicago, Illinois are required to be closed for
regular banking business.
“Buyer Indemnified Parties” has the meaning set forth in Section 7.1(a).
“Buyer Material Adverse Effect” means a material adverse effect on the ability
of Buyer to perform its obligations under this Agreement or to consummate the
transactions contemplated hereby on a timely basis.
“Buyer Note” has the meaning set forth in Section 2.2(c).
“Buyer Preferred Stock” means the preferred stock, par value $0.001 per share,
of Buyer.
“Buyer Preferred Stock Amount” means an amount equal to (A) the Effective Date
Holdback Reserves Estimate less (B) the Effective Date Holdback Reserves, plus
(C) $2,000,000.
“Cash Payment” has the meaning set forth in Section 2.2(b).
“Chicago Court” has the meaning set forth in Section 10.5(a).
“CIE Claims” means all claims for losses in connection with the insurance
policies or other insurance obligations under the CIE Program that create
potential liabilities for Gateway (whether known or unknown as of the Closing
Date).
“CIE Program” consists of the insurance policies issued in connection with and
other insurance obligations created by the discontinued Casualty Indemnity
Exchange business of Gateway.
“Closing” has the meaning set forth in Section 2.4.
“Closing Adjustment Amount” has the meaning set forth in Section 2.2(d)(ii).
“Closing Adjustment Payment” has the meaning set forth in Section 2.2(e).
“Closing Balance Sheet” has the meaning set forth in Section 2.2(d)(ii).
“Closing Date” has the meaning set forth in Section 2.4.
“Closing Preferred Shares” has the meaning set forth in Section 2.2(b).
“Closing Statements” has the meaning set forth in Section 2.2(d)(ii).
“Code” means the Internal Revenue Code of 1986, as amended.
“Company Actuarial Analysis” has the meaning set forth in Section 3.1(d)(iv).
“Company Contracts” has the meaning set forth in Section 3.1(m)(iii).
“Company Shares” has the meaning set forth in the Recitals.
“Constituent Documents” of a Person means, as applicable, the declaration and
charter, certificate of incorporation, articles of incorporation, certificate of
designations, bylaws, or any similar organizational or governing document or
instrument of a Person.

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“Contract” means any contract, agreement, mortgage, indenture, debenture, note,
loan, bond, Lease, sublease, license, franchise, obligation, instrument,
promise, understanding or other binding commitment, arrangement or undertaking
of any kind whether oral or written, and whether express or implied, to which a
Person is a party or by which any property or assets owned or used by such
Person may be bound or affected.
“Date of this Agreement” has the meaning set forth in the introductory
paragraph.
“Decrease Amount” has the meaning set forth in Section 2.3(a)(i)(C).
“Defense Notice Period” has the meaning set forth in Section 7.3(b)(i).
“Deferred Policy Acquisition Costs” means the acquisitions costs, including
unearned commissions and accrued premium taxes, associated with the unearned
premium reserve for all lines of business of Gateway (except for the Deferred
Policy Acquisition Costs related to the WC Program, which are to be netted from
ceding premium to WC Reinsurer in connection with the Loss Portfolio Transfer
Agreement and the Quota Share Agreement), determined in accordance with GAAP
consistently applied.
“Deferred Tax Assets” or “DTA” mean a deferred tax asset that would be
recognized as a deferred tax asset under GAAP for the gross deferred tax asset
before non admittance or valuation allowance considerations, determined as of
the Effective Date.
“Deferred Tax Liability” or “DTL” mean a deferred tax liability that would be
recognized as a deferred tax liability under GAAP for the gross deferred tax
liability before non admittance or valuation allowance considerations,
determined as of the Effective Date.
“Demand Notice” has the meaning set forth in Section 7.2(b).
“Disclosure Schedule” means the disclosure schedule accompanying this Agreement,
dated as of the Date of this Agreement and initialed by the Parties, which will
be arranged in paragraphs corresponding to the numbered and lettered paragraphs
contained in this Agreement.
“Dispute Notice” has the meaning set forth in Section 2.2(d)(iii).
“Dispute Period” has the meaning set forth in Section 2.2(d)(iii).
“Disputed Items” has the meaning set forth in Section 2.2(d)(iii).
“DTA DTL Consultation Period” has the meaning set forth in Section 2.3(b)(iv).
“DTA DTL Notice of Disagreement” has the meaning set forth in Section
2.3(b)(iii).
“DTA DTL Review Period” has the meaning set forth in Section 2.3(b)(ii).
“Effective Date” has the meaning set forth in section 2.4(b).
“Effective Date Holdback Reserves” means Holdback Reserves as of the Effective
Date.
“Effective Date Holdback Reserves Estimate” has the meaning set forth in Section
2.3(a)(i).
“Employee Benefit Plan” means (a) any pension plan, 401(k) plan, profit sharing
plan, health and welfare plan, and any other “employee benefit plan” (as defined
in Section 3(3) of ERISA); (b) any “multiemployer plan” (as defined in Section
3(37) of ERISA); (c) any other benefit arrangement, obligation, or practice,
whether or not legally enforceable, to provide benefits, other than salary, as
compensation for services rendered, to one or more present or former employees,
directors, agents, or independent contractors, including, without limitation,
employment agreements, severance policies or arrangements, executive
compensation arrangements, incentive arrangements, sick leave, vacation pay,
salary continuation, consulting or other compensation arrangements, worker's
compensation, bonus plans, deferred compensation, incentive compensation, stock
purchase, stock option, stock appreciation or other equity based severance,
employee assistance, cafeteria (Section 125 plan), medical

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reimbursement, dependent care reimbursement or other plan or agreement relating
to compensation or fringe benefits; and (d) any change in control plan, deal
bonus, retention program or agreement, in the case of each of (a) (d) that was
or is established, maintained or sponsored by the Company or Gateway or to which
the Company or Gateway contributes or which the Company or Gateway otherwise has
or may have any liability, contingent or otherwise, either directly or as a
result of an ERISA Affiliate.
“Environmental Laws” means any and all Requirements of Law, and any
administrative or judicial interpretations thereof, relating to the protection
of the environment or health and safety, including without limitation those
pertaining to the use, distribution, generation, emission, discharge, handling,
storage, processing, transportation, treatment, disposal, investigation,
remediation and monitoring of Hazardous Materials.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended,
and all regulations and rules issued thereunder, or any successor law.
“ERISA Affiliate” means any Person that, together with the Company, is or was at
any time treated as a single employer under Section 414 of the Code or Section
4001 of ERISA and any general partnership of which Seller or the Company is or
has been a general partner.
“Estimated Buyer Preferred Stock Amount” has the meaning set forth in Section
2.2(b).
“Estimated Cash Payment” has the meaning set forth in Section 2.2(d)(i).
“Estimated Closing Amounts” has the meaning set forth in Section 2.2(d)(ii).
“Estimated Closing Balance Sheet” has the meaning set forth in Section
2.2(d)(i).
“Estimated Closing Payment” has the meaning set forth in Section 2.2(d)(i).
“Estimated Loss Development Statement” has the meaning set forth in Section
2.2(a)(iv).
“Estimated Purchase Price” has the meaning set forth in Section 2.2(d)(i).
“Excess Amount” has the meaning set forth in Section 2.3(a)(i)(B).
“Extended Representations” has the meaning set forth in Article VI.
“Filing Party” has the meaning set forth in Section 8.1(c).
“Final Closing Amounts” has the meaning set forth in Section 2.2(d)(ii).
“Final DTA Adjustment” has the meaning set forth in Section 2.3(b)(vii).
“Final DTA DTL Calculation” has the meaning set forth in Section 2.3(b)(v).
“Final Determination” means: (a) a decision, judgment, decree or other order by
the United States Tax Court or any other court of competent jurisdiction that
has become final and unappealable; (b) a closing agreement under Section 7121 of
the Code or a comparable provision of any state, local or foreign Tax Law that
is binding against the IRS or other Taxing Authority; (c) any other final
settlement with the IRS or other Taxing Authority; or (d) the expiration of an
applicable statute of limitations.
“Final Preferred Stock Adjustment Date” means December 31, 2017 or such later
date as may be reasonably requested by Seller.
“Final Preferred Stock Adjustment Determination” has the meaning set forth in
Section 2.3(a)(ii)(A).
“Gateway Shares” has the meaning set forth in the Recitals.
“GAAP Financial Statements” has the meaning set forth in Section 3.1(d)(ii).

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“Governmental Entity” means any federal, state, local or foreign governmental or
regulatory authority, agency, commission, department, body, court or other
legislative, executive, or judicial or quasi judicial governmental entity.
“Guaranty Fund” means any insolvency fund, including any guaranty fund,
association, pool, plan or other facility (whether participation therein is
voluntary or involuntary) that provides for the assessment of, payment by or
assumption by its participants or members of a part or the whole of any claim,
debt, charge, fee or other obligation of any insurer or reinsurer, or its
respective successors or assigns, that has been declared insolvent by any
authority having jurisdiction, or which is otherwise unable to meet any claim,
debt, charge, fee or other obligation in whole or in part.
“Hazardous Materials” means (a) any petrochemical or petroleum products, oil,
waste oil, asbestos in any form that is or could become friable, and
polychlorinated biphenyls; (b) any substance that may give rise to liability
pursuant to, or is regulated under any applicable Environmental Laws; and (c)
any materials or substances defined, listed or characterized in Environmental
Laws as “hazardous,” “toxic,” “pollutant”, or “contaminant,” or words of similar
meaning or regulatory effect.
“Holdback Note” means that certain promissory note, issued in connection with an
Optional Redemption, pursuant to the terms set forth on Exhibit A hereto.
“Holdback Reserves” means the reserves associated with the Taxi and Truck
Program and other lines of business (excluding reserves associated with the CIE
Program and WC Program) as set forth on Gateway's SAP Statements.
“Holdback Reserves Estimate” means the selected point reserve estimate of the
Taxi and Truck Program and other lines of business (excluding the reserves
associated with the CIE Program and WC Program), as the same may be determined
from time to time by a mutually agreed upon actuary; provided, that for purposes
of the Estimated Closing Payment and the number of Closing Preferred Shares, the
Holdback Reserves Estimate as of September 30, 2012 will be determined by Towers
Watson.
“Indemnification Basket” has the meaning set forth in Section 7.1(b)(ii).
“Indemnification Cap” has the meaning set forth in Section 7.1(b)(iii).
“Indemnification Notice” has the meaning set forth in Section 7.2(a).
“Indemnified Party” has the meaning set forth in Section 7.2(a).
“Indemnifying Party” has the meaning set forth in Section 7.2(a).
“Independent Expert” means an independent certified public accounting firm with
appropriate actuarial expertise in the United States of national recognition
mutually agreeable to Seller and Buyer, which is not the auditor or principal
accountant of either Seller or Buyer.
“Insurance Laws” means any Requirements of Law regulating the business and
products of insurance and reinsurance.
“Insurance Licenses” has the meaning set forth in Section 3.1(n)(iii).
“Intellectual Property” means (a) trademarks, service marks, brand names,
certification marks, collective marks, d/b/a's, domain names, logos, symbols,
trade dress, assumed names, fictitious names, trade names, and other indicia of
origin, all applications and registrations for the foregoing, and all goodwill
associated therewith and symbolized thereby, including all renewals of same; (b)
inventions and discoveries, whether patentable or not, and all patents,
registrations, invention disclosures and applications therefor, including
divisions, continuations, continuations in part and renewal applications, and
including renewals, extensions and reissues; (c) trade secrets, confidential
information and know how, including processes, schematics, business methods,
formulae, drawings, prototypes, models, designs, customer lists and supplier
lists; (d) published and unpublished works of authorship, whether copyrightable
or not (including without limitation databases and other compilations of
information), including mask

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rights and computer software (including firmware and middleware), copyrights
therein and thereto, registrations and applications therefor, and all renewals,
extensions, restorations and reversions thereof; and (e) any other intellectual
property or proprietary rights.
“IRS” means the United States Internal Revenue Service.
“IT Assets” means computers, servers, workstations, routers, hubs, switches,
data communications lines, all other information technology equipment, in each
case, owned by the Company or Gateway or licensed or leased by or on behalf of
the Company or Gateway from any third parties.
“Knowledge” means the actual knowledge, after reasonable inquiry, of any of
Daniel Boxell, Serena Lintker, Sandie Lehde and Richard Kleinschmidt.
“Law” means any foreign, federal, state or local law, ordinance, writ, statute,
treaty, rule or regulation.
“Lease” means a lease, sublease, license or other agreement, including all
amendments, extensions, renewals, and other agreements with respect thereto,
which grants a Person the right to possess, use or occupy (or to grant others
the right to possess, use or occupy) any Real Property or personal property.
“Leased Real Property” has the meaning set forth in Section 3.1(q)(iii).
“Licensed Intellectual Property” has the meaning set forth in Section 3.1(p)(i).
“Liens” means all pledges, liens, encumbrances and security interests of any
kind (other than restrictions on transfer imposed by Securities Act of 1933, as
amended (or any other applicable securities Laws)).
“Loss Development” means unpaid losses and loss adjustment expenses of Gateway
associated with the Taxi and Truck Program, as finally determined in accordance
with SAP consistently applied.
“Loss Development Decrease” has the meaning set forth in Section 2.3(a)(ii)(B).
“Loss Development Increase” has the meaning set forth in Section 2.3(a)(ii)(C).
“Loss Development Statement” has the meaning set forth in Section 2.3(a)(ii)(B).
“Loss Portfolio Transfer Agreement” means that certain Loss Portfolio Transfer
Agreement, by and between Gateway and WC Reinsurer, dated as of the Closing
Date, the terms of which are summarized on Exhibit B hereto.
“Losses” has the meaning set forth in Section 7.1(a).
“Material Filings” has the meaning set forth in Section 4.3(a)(iv).
“Missouri Department” means the Missouri Department of Insurance, Financial
Institutions and Professional Registration.
“Multiemployer Plan” has the meaning set forth in Section 3.1(h)(xi).
“Necessary Permits” has the meaning set forth in Section 4.3(a).
“Negative Condition or Restriction” means any condition or restriction (a) that
would not customarily be imposed in transactions of the type contemplated by the
Transaction Agreements; (b) solely with respect to Buyer and its Affiliates,
that materially differs from those statutory or regulatory obligations imposed
on companies holding Insurance Licenses similar to that of Gateway and engaged
in business similar to that of Gateway and would be materially adverse to Buyer;
(c) that is not conditioned on the consummation of the transactions contemplated
by the Transaction Agreements in accordance with the material terms of the
Transaction Agreements; (d) solely with respect to Buyer and its Affiliates,
that materially adversely affects the ability of Buyer or any of its Affiliates
(including, following the Closing, Gateway) to conduct its business
substantially in the same manner as such business is being conducted, including
by requiring the sale, lease, license, disposal or holding separate of any

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subsidiaries, assets, rights, product lines, licenses, categories of assets or
business or other operations or interests of Buyer or any Affiliate; or (e)
solely with respect to Buyer and its Affiliates, that would otherwise have a
Buyer Material Adverse Effect.
“Notice Period” has the meaning set forth in Section 2.2(d)(iii).
“Optional Redemption” means the right of Buyer to redeem the Buyer Preferred
Stock Amount issued to Seller at the Closing at any time following the second
anniversary of the Closing, by payment of an amount equal to the Redemption
Payment.
“Optional Redemption Notice” has the meaning set forth in Section 2.3(a)(iv).
“Order” means any award, decision, injunction, judgment, decree, settlement,
order, process, ruling, subpoena or verdict (whether temporary, preliminary or
permanent) entered, issued, made or rendered by any arbitrator, Governmental
Entity or other tribunal or authority of competent jurisdiction.
“Ordinary Course of Business” means, with respect to the Company or Gateway, the
ordinary course of business of the Company or Gateway, respectively, consistent
with past custom and practice (including with respect to quantity and
frequency).
“PBGC” has the meaning set forth in Section 3.1(h)(ix).
“Pension Plan” means all Employee Benefit Plans that are defined benefit pension
plans or that are otherwise subject to Section 412 of the Code or Title IV of
ERISA.
“Permits” has the meaning set forth in Section 3.1(k)(i); provided that the term
“Permits” will not include the Insurance Licenses.
“Permitted Liens” means Liens for Taxes that are not yet due and payable or are
being contested in good faith by appropriate proceedings.
“Person” means any natural person, corporation, partnership, limited liability
company, joint venture, association, trust, unincorporated organization or other
entity.
“Post Closing Tax Year” means a taxable year that begins after the Closing Date,
including the allocable portion of the Straddle Period determined under Section
8.1(b).
“Pre Closing Tax Year” means a taxable year that ends on or before the Closing
Date, including the allocable portion of the Straddle Period determined under
Section 8.1(b).
“Preemptive Rights” has the meaning set forth in Section 3.1(b)(ii)(B).
“Preferred Stock Share Price” means $1.00.
“Proposed Final DTAs and DTLs” has the meaning set forth in Section 2.3.
“Purchase Price” has the meaning set forth in Section 2.2(a).
“Purchase Price Calculation and Payment Methodology” has the meaning set forth
in Section 2.2(a).
“Quota Share Agreement” means that certain 100% Quota Share Reinsurance
Agreement, by and between Gateway and WC Reinsurer, dated as of the Closing
Date.
“Real Property” means all land, together with all buildings, structures,
improvements and fixtures located thereon, including all electrical, mechanical,
plumbing and other building systems, fire protection, security and surveillance
systems, telecommunications, computer, wiring, and cable installations, utility
installations, water distribution systems, and landscaping, together with all
easements and other rights and interests appurtenant thereto (including air,
oil, gas, mineral, and water rights).

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“Redemption Payment” means an amount equal to $1.00 for each share of Preferred
Stock held by Seller on the date of the Optional Redemption (after all
adjustments provided for in Section 2.3(a)(ii)(B) have been made).
“Reinsurance Contract” means any reinsurance or retrocession Contract under
which Gateway may be either obligated to make payments or be eligible to
continue to receive benefits, to which Gateway is a party (whether as a ceding
or assuming company) or by or to which Gateway is bound or subject, as each such
Contract may have been amended, modified or supplemented.
“Remaining Disputed Items” has the meaning set forth in Section 2.2(d)(iii).
“Requirements of Law” means, with respect to any Person, any Law or Order, in
each case binding on that Person or such Person's property or assets.
“Resolved Items” has the meaning set forth in Section 2.2(d)(iii).
“SAP” means, as applicable, the statutory accounting practices prescribed or
permitted by the Missouri Department, applied on a consistent basis.
“SAP Statements” has the meaning set forth in Section 3.1(d)(i).
“Section 338(h)(10) Election” has the meaning set forth in Section 8.7.
“Seller Indemnified Parties” has the meaning set forth in Section 7.1(c).
“Seller Material Adverse Effect” means (a) a material adverse effect on the
financial condition, properties, assets, liabilities, business or results of
operations of the Company or Gateway; provided, however, that a “Seller Material
Adverse Effect” will exclude any such effect arising out of or in connection
with: (i) changes in general economic or business conditions, including changes
in the capital, insurance, or financial markets or interest or currency rates;
(ii) any changes that are the result of factors generally affecting the property
casualty insurance industry in the geographic areas in which the Company
operates; (iii) changes in any applicable Requirements of Law or applicable SAP
(provided, that, with respect to clauses (i) (iii), such change, event,
circumstance or development does not (x) primarily relate to (or have the effect
of primarily relating to) the Company or (y) disproportionately adversely affect
the Company compared to other companies of similar size operating in the
property and casualty insurance industry in similar geographic areas in which
the Company operates or conducts business); (iv) any natural catastrophe events,
hostility, sabotage, military action or any escalation or worsening thereof,
acts of war or terrorism; (v) the negotiation, execution and delivery of this
Agreement or any Transaction Agreement or the public announcement thereof; (vi)
the identity of Buyer; or (vii) the effect of any action taken by Buyer or its
Affiliates; or (b) a material adverse effect on the ability of Seller to perform
its obligations under this Agreement, any Transaction Agreement or to consummate
the transactions contemplated hereby or thereby on a timely basis.
“Seller Tax Claim” has the meaning set forth in Section 8.4.
“September 30 Holdback Reserves” means the Holdback Reserves as of September 30,
2012.
“Settlement Date” has the meaning set forth in Section 2.2(e).
“Special Dividend” has the meaning set forth in Section 2.2(c).
“Special Representations” has the meaning set forth in Article VI.
“Straddle Period” has the meaning set forth in Section 8.1(b).
“Support Services Agreement” means that certain Support Services Agreement, by
and between Gateway and WC Reinsurer, dated as of the Closing Date.
“Tax Claim” has the meaning set forth in Section 8.4.
“Tax Dispute” has the meaning set forth in Section 8.2(c).

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“Tax Dispute Date” has the meaning set forth in Section 8.2(c).
“Tax Indemnifying Party” has the meaning set forth in Section 8.2(c).
“Tax Package” has the meaning set forth in Section 8.5(b).
“Tax Referee” has the meaning set forth in Section 8.2(c).
“Tax Return” means any return, form (including, without limitation IRS Form 8275
or 8275 R), report or statement filed or required to be filed with respect to
any Tax (including any elections, declarations, schedules or attachments
thereto, and any amendment thereof) with a Taxing Authority.
“Taxes” means all federal, state, county, local, foreign and other taxes,
assessments, charges, duties, fees, levies, imposts or other similar charges
imposed by a Taxing Authority, including all income, franchise, profits, capital
gains, capital stock, gross receipts, production, customs, sales, use, transfer,
service, occupation, ad valorem, property, excise, severance, windfall profits,
premium, stamp, license, payroll, employment, social security, alternative
minimum, add on, value added, capital taxes, withholding and other similar
charges of any kind whatsoever (whether payable directly or by withholding and
whether or not requiring the filing of a Tax Return), and all estimated taxes,
deficiency assessments, additions to tax and penalties (civil or criminal),
interest, and additional amounts imposed by any Taxing Authority on or in
respect of a failure to comply with any requirement relating to such taxes or
any Tax Return. “Taxes” also includes any liabilities or obligations under any
agreements or arrangements with any Person with respect to the liability for, or
sharing of, Taxes (including pursuant to Section 1.1502 6 of the Treasury
Regulations or comparable provisions of state, local or foreign Tax Law),
including any liability for Taxes as a transferee or successor, by Contract or
otherwise.
“Taxi and Truck Program” means, collectively, the Taxi and Limo Program and the
Truck Program.
“Taxi and Limo Program” means Gateway's public auto program writing commercial
auto insurance for small to mid size taxi and limousine drivers, and also
includes any paratransit or any other similar operators of light vehicles in the
public automobile insurance space.
“Taxing Authority” means the IRS and any other Governmental Entity responsible
for the administration of any Tax.
“Termination Date” has the meaning set forth in Section 9.1(b).
“Third Party Claim” has the meaning set forth in Section 7.3(a).
“Transaction Agreements” means, collectively, this Agreement and each other
agreement or instruments executed by the Parties, and their respective
Affiliates, in connection with the consummation of the transactions contemplated
hereby, including, without limitation, the WC Reinsurance Agreement.
“Transfer Taxes” has the meaning set forth in Section 8.6.
“Transferred Companies” means the Company and Gateway.
“Treasury Regulations” means the final, temporary or proposed regulations
promulgated by the United States Department of the Treasury Department under the
Code.
“Truck Program” will mean Gateway's long haul truck program writing commercial
auto, cargo and general liability insurance for small to mid size truckers.
“WC Program” means Gateway's workers' compensation line of business for roofing
contractors.
“WC Reinsurance Agreement” means the Quota Share Agreement substantially in the
form of Exhibit B hereto.
“WC Reinsurance Transaction” means the consummation, concurrent with the
Closing, of the transactions contemplated by the WC Reinsurance Agreement.

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“WC Reinsurer” means (i) Patriot Insurance Company, Ltd., a Bermuda company, or
(ii) such other reinsurance entity as is designated by Seller and is reasonably
acceptable to Buyer; provided that, in the case that such party under (i) or
(ii) is no longer a party to the WC Reinsurance Agreement for any reason, other
than by reason of a commutation of all liabilities under the WC Reinsurance
Agreement, Seller will remain liable for the obligations of WC Reinsurer
thereunder and for the replacement of any reinsurer with another reinsurer such
that Gateway shall continue to take credit for any such reinsurance on its
financial statements.
“WC Renewal Rights” means Gateway's rights to insurance policy renewals under
its WC Program.
“WC Renewal Rights Proceeds” means any proceeds received by Gateway from the
sale of the WC Renewal Rights between September 30, 2012 and the Closing Date.
ARTICLE II

PURCHASE AND SALE OF CAPITAL STOCK
SECTION 2.1 Purchase and Sale. Upon the terms and subject to the conditions of
this Agreement, at the Closing, Seller will sell to Buyer, and Buyer will
purchase from Seller, the Company Shares, free and clear of all Liens and
Preemptive Rights.
SECTION 2.2 Purchase Price.
(a)    Purchase Price Calculation. The aggregate purchase price for the Company
Shares (the “Purchase Price”) will, subject to Sections 2.2(d) and 2.3 hereof,
be as follows: (i) the GAAP book value of the Company as of the Closing Date
after giving effect to the WC Reinsurance Transaction and disregarding any
reserves for CIE Claims (the “Book Value”), minus (ii) DTAs of the Company (net
of the DTLs of the Company), minus (iii) Deferred Policy Acquisition Costs, plus
(iii) $2,000,000, plus (iv) any WC Renewal Rights Proceeds (in each case, as
adjusted post closing pursuant to Sections 2.2(d) and 2.3). For purposes hereof,
the Purchase Price calculation will be determined in accordance with GAAP
consistently applied and in a manner consistent with the example calculation
(prepared based on the Company's preliminary unaudited consolidated balance
sheet contained in its GAAP Financial Statement as of September 30, 2012
provided to Buyer on October 23, 2012) attached hereto as Exhibit C (the
“Purchase Price Calculation and Payment Methodology”).
(b)    Purchase Price Payment. Subject to Sections 2.2(d) and 2.3 hereof, the
Purchase Price payment will consist of the following: (i) the number of shares
of Buyer Preferred Stock equal to the Buyer Preferred Stock Amount (which for
purposes of Closing will be calculated as (A) the Holdback Reserves Estimate as
of September 30, 2012, less (B) September 30 Holdback Reserves, plus (C)
$2,000,000 (the “Estimated Buyer Preferred Stock Amount”)) divided by the
Preferred Stock Share Price (the “Closing Preferred Shares”), plus (ii) if the
Special Dividend has not been paid at or before Closing, the Buyer's Note (as
determined pursuant to Section 2.2(c) below), plus (iii) any remaining portion
of the Purchase Price will be payable in cash by wire transfer of immediately
available funds to an account or account designated in writing by Seller (the
“Cash Payment”). For purposes hereof, the manner of payment of the Purchase
Price will be determined in a manner consistent with the example included with
the Purchase Price Calculation and Payment Methodology. For purposes of Closing
the amount of the Cash Payment will be estimated in accordance with Section
2.2(d)(i) (the “Estimated Cash Payment”).
(c)    Special Dividend and Buyer Note. In accordance with Section 5.2(c), in
the event the special dividend of six million dollars ($6,000,000) (the “Special
Dividend”) requested by Gateway to be payable to Company immediately prior to
Closing (followed by an immediate dividend of the same amount from Company to
Seller) is not approved by the Missouri Department prior to Closing, Buyer will
issue a note at Closing in favor of Seller in the amount of six million dollars
($6,000,000) less the portion of the Special Dividend (if any) actually approved
by the Missouri Department (the “Buyer Note”) on the terms set forth on Exhibit
D hereto. For the avoidance of doubt, in no event will the amount of the Special
Dividend, Buyer Note or combination thereof exceed six million dollars
($6,000,000) in the aggregate.

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(d)    Adjustments to Purchase Price.
(i)    Within ten (10) Business Days prior to the Closing Date, but in no event
less than three (3) Business Days prior to the Closing Date, Seller will prepare
and deliver (or cause to be prepared and delivered) to Buyer, a certificate of
the principal financial officer of Seller that contains a reasonable good faith
estimate of (A) a consolidated balance sheet of Company as of the Effective Date
(the “Estimated Closing Balance Sheet”) setting forth the Book Value, DTAs,
Deferred Policy Acquisition Costs and WC Renewal Rights Proceeds estimated as of
the Closing Date, (B) the Purchase Price calculation as of the Effective Date
(disregarding reserves for CIE Claims), as (the “Estimated Purchase Price”) and
(C) the manner of payment of the Estimated Purchase Price in accordance with
Section 2.2(b) at the Closing, including, the number of Closing Preferred Shares
to be issued, identifying whether there will be a Special Dividend or Buyer Note
and the amount of the Estimated Cash Payment, in each case, together with work
papers in support thereof, which estimate will be prepared in a manner
consistent with Exhibit C and will be, in all cases, reasonably acceptable to
Buyer.
(ii)    Not later than ninety (90) days after the Closing Date, Buyer will
prepare and deliver (or cause to be prepared and delivered) to Seller (A) a
balance sheet of the Company as of the Effective Date (the “Closing Balance
Sheet”) setting forth the Book Value, Deferred Policy Acquisition Costs and WC
Renewal Rights Proceeds as of the Effective Date (disregarding any reserves for
CIE Claims), together with work papers in support thereof, which will be
prepared in a manner consistent with Exhibit C (the “Closing Statements”), and
(B) Buyer's computation of the amount (the “Closing Adjustment Amount”) by which
each component of the Purchase Price, other than the DTAs (the “Final Closing
Amounts”), exceeds or is less than the estimated amounts therefor set forth on
the Estimated Closing Balance Sheet (the “Estimated Closing Amounts”).
(iii)    Within sixty (60) days after Seller's receipt of the Closing Statements
(the “Notice Period”), Seller will deliver notice in writing to Buyer of either
(i) Seller's agreement as to the Final Closing Amounts and Buyer's computation
of the Closing Adjustment Amount or (ii) Seller's dispute thereof (if any),
specifying in reasonable detail the nature of its dispute (any such items in
dispute, the “Disputed Items” and any such notice of the Disputed Items, the
“Dispute Notice”). If Seller fails to deliver to Buyer a Dispute Notice within
the Notice Period, the Final Closing Amounts and Buyer's computation of the
Closing Adjustment Amount, if any, will be final and binding on the Parties. If
Seller delivers a Dispute Notice to Buyer prior to the expiration of the Notice
Period, each Party will cooperate and will cause its representatives to
cooperate with the other Party and their representatives in good faith to seek
to promptly resolve the Disputed Items. Any Disputed Items that are agreed to in
writing by Seller and Buyer (such resolved Disputed Items, “Resolved Items”)
within fifteen (15) days of receipt of the Dispute Notice or such other time as
is mutually agreed in writing by Seller and Buyer (the “Dispute Period”) will be
final and binding on the Parties. If at the end of the Dispute Period, Seller
and Buyer have failed to reach agreement with respect to any Disputed Items
(such unresolved Disputed Items, “Remaining Disputed Items”), such Remaining
Disputed Items will, within twenty (20) days after the expiration of the Dispute
Period, be submitted to the Independent Expert. The Independent Expert may
consider only the Remaining Disputed Items and must resolve such Remaining
Disputed Items in accordance with the terms and provisions of this Agreement.
The Independent Expert will deliver to Buyer and Seller, as promptly as
practicable and in any event within forty five (45) days after its appointment,
a written report setting forth the resolution of each Remaining Disputed Item,
the resulting adjustments to the Purchase Price (taking into account the
Resolved Items and its resolution of the Remaining Disputed Items), and its
computation of the Closing Adjustment Amount. Except in the case of fraud the
conclusions in such report will be final and binding upon the Parties. Each of
Buyer and Seller will (A) bear all of its fees, costs and expenses incurred by
it and its Affiliates in connection with the resolution of the Disputed Items
and (B) pay one half of the fees and costs of the Independent Expert.
(e)    On or before the second (2nd) Business Day after Buyer and Seller agree
(or are deemed to agree) to the Closing Adjustment Amount or Buyer and Seller
receive notice of any final determination of the Closing Adjustment Amount by
the Independent Expert, as applicable, (the “Settlement Date”) (A) Seller will
pay to Buyer by wire transfer of immediately available funds to an account
designated by Buyer the amount by which the Estimated Closing Amounts exceeds
the Final Closing Amounts or (B) Buyer will pay to Seller by wire transfer of
immediately available funds to an account designated by Seller the amount by
which the Final Closing Amounts exceeds the Estimated Closing Amounts (either
such payment, the “Closing Adjustment Payment”). The Closing

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Adjustment Payment will be made by wire transfer of immediately available funds
to the account or accounts designated in writing by, as applicable, Buyer or
Seller.
SECTION 2.3 Other Post Closing Adjustments.
(a)    Buyer Preferred Stock Amount Adjustments.
(i)    Within sixty (60) days following the Effective Date, Buyer will provide
Seller with a statement of Effective Date Holdback Reserves and a Holdback
Reserves Estimate as of the Effective Date (“Effective Date Holdback Reserves
Estimate”). If the Estimated Buyer Preferred Stock Amount exceeds the Buyer
Preferred Stock Amount, Buyer will cause the number of shares of Buyer Preferred
Stock equal to the excess divided by the Preferred Stock Purchase Price to be
cancelled on the books of Buyer. If the Buyer Preferred Stock Amount exceeds the
Estimated Preferred Stock Amount, Buyer will cause to be issued to Seller on the
books of Buyer the number of shares of Buyer Preferred Stock equal to the amount
of such excess divided by the Preferred Stock Purchase Price. Any disputes by
Seller with respect to the Buyer Preferred Stock Amount will be resolved by the
Independent Expert in a manner consistent with Section 2.2(d)(iii).
(ii)    Prior to the occurrence of an Optional Redemption or the Final Preferred
Stock Adjustment Date, the Buyer Preferred Stock Amount and the number of shares
of Buyer Preferred Stock held by Seller will be adjusted following December 31
of each calendar year as follows (and a final adjustment using the same process
will be made on the Final Preferred Stock Adjustment Date, if an Optional
Redemption has not yet occurred prior to such date):
(A)    Within sixty (60) days following December 31 of an applicable calendar
year, Buyer will provide Seller with a statement of any Loss Developments for
the twelve months ending on December 31 of such calendar year, together with the
amount of any Loss Development Increase or Loss Development Decrease, if any,
(each, a “Loss Development Statement”), together with any actuarial report
supporting such Loss Development Increase or Loss Development Decrease prepared
by or for Buyer. Subject to any reasonable non-disclosure conditions required by
Buyer's independent actuary, Buyer will provide Seller with data and information
reasonably requested by Seller that supports such Loss Development Statement.
Any disputes by Seller with a Loss Development Statement will be resolved by the
Independent Expert in a manner consistent with Section 2.2(d)(iii); provided
that in connection with any such dispute, Seller (at its expense) will be
entitled to select an independent actuary (which selection will be subject to
the consent of Buyer (such consent not to be unreasonably withheld)) to review
Buyer's actuarial report supporting the applicable Loss Development Statement;
provided further, that if the amount of such Loss Development Increase or Loss
Development Decrease as determined by the Independent Expert is twenty percent
(20%) less or more, as the case may be, than that indicated in the Loss
Development Statement, Seller's reasonable expenses of retaining such
independent actuary shall be paid by Buyer.
(B)    In the event of any Loss Development in excess of the applicable Holdback
Reserve therefor (a “Loss Development Increase”), the Buyer Preferred Stock
Amount will be reduced on a dollar for dollar basis by the amount of such Loss
Development Increase (the “Excess Amount”) and Buyer will cause the number of
shares of Buyer Preferred Stock held by Seller equal to the Excess Amount
divided by the Preferred Stock Share Price to be cancelled on the books of the
Buyer.
(C)    In the event of any Loss Development that is less than the applicable
Holdback Reserve therefor (a “Loss Development Decrease”) the Buyer Preferred
Stock Amount will be increased by $1.00 for each dollar of such Loss Development
Decrease to the extent of any prior Loss Development Increase and thereafter
$0.75 for each dollar of such Loss Development Decrease (in the aggregate, the
“Decrease Amount”) and Buyer will cause to be issued to Seller on the books of
Buyer the number of shares of Buyer Preferred Stock equal to the Decrease Amount
divided by the Preferred Stock Share Price.
(iii)    In connection with an Optional Redemption:
(A)    If Buyer elects to exercise its Optional Redemption rights, it will
provide Seller with no less than sixty (60) days prior written notice thereof
(an “Optional Redemption Notice”, and Seller will have the

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right to elect, within ten (10) days of receipt of the Optional Redemption
Notice, (1) that the Parties make a final determination of the amount of the
Loss Development Increase or Loss Development Decrease, as the case may be,
based on a Holdback Reserves Estimate (a “Final Preferred Stock Adjustment
Determination”) for purposes of determining the final number of shares of Buyer
Preferred Stock held by Seller on the redemption date, in which case the
Redemption Payment will be paid to Seller in cash, or (2) to require the
Redemption Payment to be made in the form of the Holdback Note.
(B)    In the event that Seller elects a Final Preferred Stock Adjustment
Determination, the Parties will use commercially reasonable efforts to cause an
updated Holdback Reserves Estimate to be delivered within thirty (30) days of
such election. Within ten (10) days of the receipt thereof, Buyer will prepare
and deliver to Seller a statement of the aggregate estimated Loss Development
based on the Holdback Reserves Estimate and the aggregate estimated Loss
Development Increase or estimated Loss Development Decrease, as the case may be,
which will take into account any previous adjustments pursuant to Section
2.3(a)(i) (an “Estimated Loss Development Statement”), together with any
actuarial report supporting such Loss Development Increase or Loss Development
Decrease prepared by or for Buyer. Subject to any reasonable non-disclosure
conditions required by Buyer's independent actuary, Buyer will provide Seller
with data and information reasonably requested by Seller that supports such
Estimated Loss Development Statement. Any disputes by Seller with an Estimated
Loss Development Statement will be resolved by the Independent Expert in a
manner consistent with Section 2.2(d)(iii); provided that in connection with any
such dispute, Seller (at its expense) will be entitled to select an independent
actuary (which selection will be subject to the consent of Buyer (such consent
not to be unreasonably withheld)) to either (i) review Buyer's actuarial report
supporting the applicable Loss Development Statement or (ii) prepare an
actuarial report supporting the Estimated Loss Development Statement. Any
estimated Loss Development Increase or estimated Loss Development Decrease as
finally determined by the Parties or the Independent Expert will result in the
cancellation or issuance of shares of Buyer Preferred Stock in a manner
consistent with Sections 2.3(a)(i)(B) and (C) for purposes of determining the
number of shares of Buyer Preferred Stock to be redeemed; provided further, that
if the amount of such estimated Loss Development Increase or Loss Development
Decrease as determined pursuant to the immediately preceding sentence is twenty
percent (20%) less or more, as the case may be, than that indicated in the
Estimated Loss Development Statement, Seller's reasonable expenses of retaining
such independent actuary shall be paid by Buyer.
(b)    Deferred Tax Assets and Deferred Tax Liabilities. After the Post Closing
Adjustment Payment is finalized in accordance with Section 2.2(d), but not later
than five (5) months after the Effective Date, Seller will prepare, or cause to
be prepared, and deliver to Buyer, a reasonably detailed calculation, including
supporting information, of the DTAs and DTLs of the Transferred Companies as of
the Closing Date (the “Proposed Final DTAs and DTLs”), which DTA and DTL
calculation will be substantially in the form set forth on Exhibit E, as
recomputed based on all of the facts and circumstances, including, but not
limited to any tax elections actually made with respect to the acquisition of
the Company (including, but not limited to, the Section 338(h)(10) Election, the
election under Section 1.1502 36(d)(6)(i)(A) and the election under Section
1.848 2(g)(8)).
(i)    In connection with Seller's preparation of the Proposed Final DTAs and
DTLs, to the extent that Seller does not have all relevant information in its
possession, Seller and its Representatives will be permitted to review Buyer's
work papers and any work papers of Buyer's independent accountants reasonably
necessary for Seller's preparation of the Proposed Final DTAs and DTLs, and
Buyer will make reasonably available the individuals then in its employ, in
order to respond to the reasonable inquiries of Seller; provided, however, that
the independent accountants of Buyer will not be obligated to make any work
papers available to Seller unless and until Seller has signed a customary
agreement relating to such access to work papers in form and substance
reasonably acceptable to such accountants.
(ii)    During the thirty (30) days immediately following Seller's delivery of
the Proposed Final DTAs and DTLs (the “DTA DTL Review Period”), Buyer and its
representatives will be permitted to review Seller's work papers and the work
papers of Seller's independent accountants relating to the Proposed Final DTAs
and DTLs, as well as all of Seller's books, records and other relevant
information relating to the operations and finances of the Transferred Companies
with respect to the period up to and including the Closing Date, and Seller will
make reasonably available the individuals then in its employ responsible for and
knowledgeable about the information

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used in, and the preparation of, the Proposed Final DTAs and DTLs in order to
respond to the reasonable inquiries of Buyer; provided, however, that the
independent accountants of Seller will not be obligated to make any work papers
available to Buyer unless and until Buyer has signed a customary agreement
relating to such access to work papers in form and substance reasonably
acceptable to such accountants.
(iii)    Buyer will notify Seller in writing (the “DTA DTL Notice of
Disagreement”) prior to the expiration of the DTA DTL Review Period if Buyer
disagrees with the Proposed Final DTAs and DTLs. The DTA DTL Notice of
Disagreement will set forth in reasonable detail the basis for such dispute, the
amounts involved and Buyer's calculation of such disputed amounts. In connection
with Buyer's delivery of a DTA DTL Notice of Disagreement, Buyer may request
access to information related to Seller's preparation of the Proposed Final DTAs
and DTLs in accordance with Section 2.3(b)(ii). If no DTA DTL Notice of
Disagreement is received by Buyer prior to the expiration of the Review Period,
then the Proposed Final DTAs and DTLs will be deemed to have been accepted by
Buyer and will become final and binding upon the parties hereto in accordance
with Section 2.3(b)(v).
(iv)    During the twenty (20) days immediately following the delivery of a DTA
Notice of Disagreement (the “DTA Consultation Period”), Seller and Buyer will
seek in good faith to resolve any differences that they may have with respect to
the matters specified in the DTA Notice of Disagreement.
(v)    If, at the end of the DTA DTL Consultation Period, Seller and Buyer have
been unable to resolve any differences that they may have with respect to the
matters specified in the DTA DTL Notice of Disagreement, then Seller and Buyer
will submit all matters that remain in dispute with respect to the DTA DTL
Notice of Disagreement (along with a copy of the Proposed Final DTAs and DTLs
marked to indicate those line items that are in dispute, if any) to the
Independent Expert. Within thirty (30) days after the submission of such matters
to the Independent Expert, or as soon as practicable thereafter, the Independent
Expert will make a final determination, binding on the Parties, of the Proposed
Final DTAs and DTLs. With respect to each disputed line item and/or calculation,
such determination, if not in accordance with the position of Seller or Buyer,
will not be more favorable to Buyer than the amounts advocated by Buyer in the
DTA DTL Notice of Disagreement or more favorable to Seller than the amounts
advocated by Seller in the Proposed Final DTAs. In connection with the
Independent Expert's review, the Independent Expert may, pursuant to Section
2.3(b)(vi), request access to such information as may be required by the
Independent Expert to fulfill its obligations under this Section 2.3(b)(v). The
DTAs and DTLs that are final and binding on the Parties, as determined either
through (A) agreement of the Parties pursuant to Section 2.3(b)(ii) or
2.3(b)(iv), (B) Buyer's failure to timely deliver a DTA DTL Notice of
Disagreement pursuant to Section 2.3(b)(iii) or (C) the action of the
Independent Expert pursuant to this Section 2.3(b)(v), is referred to as the
“Final DTA DTL Calculation.” For the avoidance of doubt and notwithstanding
anything in this Agreement to the contrary, the parties hereto acknowledge and
agree that from and after the Closing, the resolution process set forth in this
Section 2.3(b) will be the sole remedy of the parties with respect to all
matters and calculations expressly included in the Final DTAs and DTLs, and will
not be subject to any indemnification other than pursuant to Section 8.1 of this
Agreement.
(vi)    The cost of the Independent Expert's review and determination will be
shared equally by Seller and Buyer. During the review by the Independent Expert,
Buyer and Seller will each make available to the Independent Expert interviews
with such individuals, and such information, books and records and work papers,
as may be reasonably required by the Independent Expert to fulfill its
obligations under Section 2.3(b)(v); provided, however, that the independent
accountants of Seller or Buyer will not be obligated to make any work papers
available to the Independent Expert unless and until such firm has signed a
customary agreement relating to such access to work papers in form and substance
reasonably acceptable to such accountants.
(vii)    The “Final DTA Adjustment” will be an amount equal to (A) the Deferred
Tax Assets set forth on the Estimated Final Balance Sheet minus (B) the Deferred
Tax Assets as set forth on the Final DTA DTL Calculation. If the Final DTA
Adjustment is a positive amount, then no further adjustment will be made. If the
Final DTA Adjustment is a negative amount, but the Final DTAs are greater than
the Final DTLs, then no further adjustment will be made. If the Final DTA
Adjustment is a negative amount, but the Final DTLs are greater than the Final
DTAs, the Seller shall pay the Buyer an amount equal to the amount by which the
Final DTLs exceed the Final DTAs. Any such payment will be made by wire transfer
of immediately available funds to an account

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designated by the recipient of such payment within two (2) Business Days after
the Final DTA Adjustment becomes such in accordance with this Section
2.3(b)(vii), with no interest due thereon. Any payment made pursuant to this
Section 2.3(b)(vii) will be treated for all Tax purposes as an adjustment to the
Purchase Price.
(viii)    For no longer than twenty (20) years following the Closing, within
ninety (90) days following the filing of any annual U.S. federal or state income
tax return for the Company or any U.S. federal income tax return which includes
the Company or Gateway, Buyer will deliver a written notice (an “Annual DTA DTL
Notice”) describing any Tax savings actually realized on such return with
respect to any specific DTA, as set forth in the Final DTAs and DTLs, utilized
on such return (“Annual Tax Savings”), and any Tax cost incurred on such return
with respect to any specific DTL set forth in the Final DTAs and DTLs (“Annual
Tax Cost”). The Annual DTA-DTL notice will include appropriate supporting
documentation and Seller will be entitled to speak to Buyer's accountant to
determine the accuracy of the Annual DTA-DTL Notice. If the Annual Tax Savings
exceeds the Annual Tax Cost, Buyer will pay to Seller, within thirty (30) days
after delivery of the Annual DTA DTL Notice, an amount equal to seventy-five
percent (75%) of such excess. Any such payment will be made by wire transfer of
immediately available funds to an account designated by the recipient of such
payment within two (2) Business Days after the receipt by Seller of the Annual
DTA DTL Notice. Any payment made pursuant to this Section 2.3(b)(vii) will be
treated for all Tax purposes as an adjustment to the Purchase Price. For the
purposes of this paragraph, Buyer will apply DTAs to reduce its taxable income
once its current deferred tax assets are used and before the Buyer applies any
other deferred tax assets resulting from future transactions, and will use good
faith commercially reasonable efforts to use and realize the value of any
outstanding DTAs.
SECTION 2.4    Closing and Effective Date.
(a)    Unless this Agreement has been terminated pursuant to Section 9.1, the
consummation of the purchase and sale of the Company Shares and the other
transactions contemplated by this Agreement (the “Closing”) will take place at
10:00 a.m. on the fifth Business Day after the satisfaction or waiver of all of
the conditions set forth in Article V at the offices of DLA Piper LLP (US), 203
N. LaSalle Street, Suite 1900, Chicago, Illinois 60601, unless another date,
time or place is agreed to in writing by the Parties, including by transfer of
electronic or facsimile signatures, but in no event later than March 1, 2013.
The actual date and time of Closing are herein referred to as the “Closing
Date.”
(b)    Effective Date of Closing. For convenience, the Parties agree that, for
purposes of Buyer's financial accounting and reporting and the purposes
specified herein, the Closing and the WC Reinsurance Transactions and Agreements
will be deemed completed as of 12:01 a.m. (CST) on the morning of January 1,
2013 (such date, the “Effective Date”).
SECTION 2.5 Closing Deliveries. At the Closing, the Parties will take the
following actions:
(a)    Seller will deliver to Buyer:
(i)    a receipt evidencing receipt by Seller of the Cash Payment;
(ii)    stock certificates evidencing the Company Shares, duly endorsed in blank
by Seller or accompanied by stock powers duly executed by Seller in blank in
proper form for transfer, and with any required stock transfer stamps affixed
thereto;
(iii)    if applicable, evidence of Seller's receipt of the Special Dividend
from the Company;
(iv)    if applicable, a copy of the Buyer Note, duly executed by Seller;
(v)    evidence of the consummation of the WC Reinsurance Transaction and a duly
executed copy of the WC Reinsurance Agreement;
(vi)    true, correct and complete copies (or other evidence) of all valid
approvals or authorizations of, filings or registrations with, or notifications
to, all Persons required to be obtained, filed or made by Seller and the
Transferred Companies in satisfaction of Section 5.1(c);

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(vii)    a duly executed certificate of non foreign status from Seller and the
Transferred Companies and any other certifications required under Sections 897
or 1445 of the Code (as applicable), in each case, sworn under penalty of
perjury and in a form and manner that complies with Sections 897 or 1445 of the
Code (as applicable) and the Treasury Regulations promulgated thereunder;
(viii)    the officer's certificate contemplated in Section 5.1(a), (b) and (d);
(ix)    resignations of the directors and officers of the Transferred Companies;
(x)    evidence of the release of the Liens related to the pledge of the Company
Shares to Comerica Bank;    
(xi)    evidence of the forgiveness of the loan amounts owed by Company to
Seller and release of the note related thereto;
(xii)    counterparts to each of the other Transaction Agreements to which
Seller or either of the Transferred Companies is a party, duly executed by
Seller or such Transferred Company, as applicable;
(xiii)    a copy, certified as of the Closing Date by an officer of Seller, of
the resolutions of Seller's board of directors and sole shareholder authorizing
the execution and delivery of this Agreement and such other Transaction
Agreements to which Seller or a Transferred Company is a party, and the
consummation of the transactions contemplated hereby and thereby;
(xiv)    a certificate of the Secretary or Assistant Secretary of each of Seller
and the Transferred Companies, certifying (1) as to true and correct copies of
each Transferred Companies' and Seller's Constituent Documents and all
amendments thereto, and (2) as to the incumbency of the officers of Seller or
the Transferred Companies executing any of the Transaction Agreements on behalf
of Seller or the Transferred Companies;
(xv)    a good standing certificate from the Secretary of State of the State of
Missouri and each state where Gateway is licensed to transact insurance as of
the Closing Date, to the extent Gateway is required by Law to be registered with
the Secretary of State of states other than Missouri, and a certificate of
compliance from the Missouri Department for Gateway, each dated as of a date
within seven (7) Business Days prior to the Closing Date;
(xvi)    a good standing certificate from the Secretary of State of the State of
Missouri for the Company, dated as of a date within seven (7) Business Days
prior to the Closing Date
(xvii)    all books and records of the Transferred Companies, including all
original Insurance Licenses to transact insurance where Gateway is so
authorized; and
(xviii)    all such additional instruments, documents and certificates provided
for by this Agreement or as may be reasonably requested by Buyer in connection
with the consummation of the transactions contemplated by this Agreement.
(b)    Buyer will deliver to Seller:
(i)    the Estimated Cash Payment, by wire transfer of immediately available
funds to an account or accounts designated in writing by Seller;
(ii)    if applicable, a copy of the Buyer Note, duly executed by Buyer;
(iii)    evidence of the issuance of the Closing Preferred Shares in the name of
Seller on the books of Buyer;
(iv)    true, correct and complete copies (or other evidence) of all valid
approvals or authorizations of, filings or registrations with, or notifications
to, all Governmental Entities required to be obtained, filed or made by Buyer in
satisfaction of Section 5.2(c);
(v)    the officer's certificate contemplated in Section 5.2(a) and (b); and

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(vi)    all such additional instruments, documents and certificates provided for
by this Agreement or as may be reasonably requested by Seller in connection with
the consummation of the transactions contemplated by this Agreement.
ARTICLE III

REPRESENTATIONS AND WARRANTIES
SECTION 3.1 Representations and Warranties of Seller. Except as set forth on the
Disclosure Schedule, Seller hereby represents and warrants to Buyer as follows
as of the date hereof and as of the Closing Date:
(a)    Organization, Standing and Corporate Power.
(i)    Gateway is an insurance company, and the Company is a business
corporation, each duly incorporated, validly existing and in good standing under
the Laws of the State of Missouri and has the requisite power and authority to
own its properties and assets and to carry on its business as currently
conducted. The Transferred Companies are duly qualified as a foreign corporation
to do business, and are in good standing, in each jurisdiction where the
character of its owned, operated or leased assets or properties or the nature of
its activities makes such qualification and good standing necessary, except
where the failure to be so qualified or in good standing could not reasonably be
expected to have a Seller Material Adverse Effect. The execution and delivery by
each such Transferred Company of each of the Transaction Agreements to which it
is a party, the performance by each such Transferred Company of its obligations
under each of the Transaction Agreements to which it is a party and the
consummation such Transferred Company of the transactions contemplated by each
of the Transaction Agreements to which it is a party, have been or will be prior
to the Closing (as applicable) duly authorized by all requisite corporate action
on the part of such Transferred Company. Each of the Transaction Agreements to
which a Transferred Company is a party has been, or upon execution and delivery
thereof, will be, duly executed and delivered by such Transferred Company.
Assuming due authorization, execution and delivery by the other parties hereto
or thereto, each of the Transaction Agreements to which a Transferred Company is
a party constitutes, or upon execution and delivery thereof will constitute, the
legal, valid and binding obligation of such Transferred Company, enforceable
against it in accordance with its terms, subject in each case to the effect of
applicable bankruptcy, reorganization, insolvency, moratorium fraudulent
conveyance or similar Laws now or hereafter in effect relating to or affecting
creditor's rights and remedies 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).
(ii)    Seller is a corporation duly organized, validly existing and in good
standing under the Laws of the State of Wisconsin and has the requisite power
and authority to own its properties and assets and carry on its business as
currently conducted. Seller has full power and authority to enter into,
consummate the transactions contemplated by, and carry out its obligations
under, each of the Transaction Agreements to which it is a party. The execution
and delivery by Seller of each of the Transaction Agreements to which it is a
party, the performance by Seller of its obligations under each of the
Transaction Agreements to which it is a party and the consummation by Seller of
the transactions contemplated by each of the Transaction Agreements to which it
is a party, have been or will be prior to the Closing (as applicable) duly
authorized by all requisite corporate action on the part of Seller. Each of the
Transaction Agreements to which Seller is a party has been, or upon execution
and delivery thereof, will be, duly executed and delivered by such Seller.
Assuming due authorization, execution and delivery by the other parties hereto
or thereto, each of the Transaction Agreements to which Seller is a party
constitutes, or upon execution and delivery thereof will constitute, the legal,
valid and binding obligation of Seller, enforceable against it in accordance
with its terms, subject in each case to the effect of applicable bankruptcy,
reorganization, insolvency, moratorium, fraudulent conveyance or similar Laws
now or hereafter in effect relating to or affecting creditor's rights and
remedies 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).
(b)    Capital Structure.

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(i)    The authorized capital stock of the Company and the authorized capital
stock of Gateway consists solely of the shares described on Section 3.1(b)(i) of
the Disclosure Schedule, of which 500 shares of the common stock of the Company
and 38,150 shares of common stock of Gateway are issued and outstanding. All of
the Company Shares and all of the Gateway Shares are duly authorized, validly
issued, fully paid and nonassessable. As of the Date of this Agreement, and at
all times up to and including the Closing Date, Seller will be the sole record
and beneficial direct owner of all of the Company Shares, and the Company will
be the sole record and beneficial direct owner of all of the Gateway Shares,
each free and clear of all Liens and Preemptive Rights, except for Liens related
to the pledge of the Company Shares to Comerica Bank, which liens will be
released on the Closing Date.
(ii)    Except as set forth in Section 3.1(b)(ii) of the Disclosure Schedule,
(A)    Neither of the Transferred Companies has issued, nor currently has
outstanding, any bonds, debentures, notes, debt instruments or other
indebtedness;
(B)    there are no outstanding or authorized (1) options, warrants, redemption
rights, repurchase rights, purchase rights, subscription rights, conversion
rights, exchange rights, or other Contracts or commitments that could require
Seller or its Affiliates (including either of the Transferred Companies) to
purchase or issue, sell, or otherwise cause to become outstanding, as
applicable, any capital stock or equity interests of either of the Transferred
Companies; or (2) stock or equity appreciation, phantom stock or equity, profit
participation, or similar rights with respect to the Transferred Companies ((1)
and (2) collectively, “Preemptive Rights”);
(C)    there are no (1) voting trusts, proxies or other agreements or
understandings with respect to the voting of any shares of capital stock or
equity interests of either of the Transferred Companies; (2) bonds, debentures,
notes, debt instruments or other indebtedness of the Transferred Companies
having the right to vote (or convertible into, or exchangeable for securities
having the right to vote) on any matters on which the stockholders or equity
holders of either of the Transferred Companies may vote; (3) securities or
obligations exercisable or exchangeable for, or convertible into, any capital
stock or equity interests of either of the Transferred Companies; or (4)
agreements, commitments or understandings of any nature whatsoever, fixed or
contingent, that directly or indirectly obligates Seller or any of its
Affiliates (including the Transferred Companies) to grant, offer or enter into
any of the foregoing; and
(D)    except for portfolio investments made in the Ordinary Course of Business,
neither of the Transferred Companies (x) owns, of record or beneficially,
directly or indirectly, any membership interest, common stock, any other voting
stock or similar equity securities (including options, warrants, rights,
commitments or agreements to acquire such equity securities) of any Person or
any right (contingent or otherwise) to acquire the same; or (y) otherwise
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of any Person.
(c)    Non Contravention; Consents.
(i)    Except as set forth on Section 3.1(c) of the Disclosure Schedule, the
execution, delivery and performance of Seller and the Transferred Companies
under any Transaction Agreement to which any of them is a party does not, and
the consummation of the transactions contemplated hereby and thereby will not,
(A) conflict with any of the provisions of the Constituent Documents of Seller
or of either of the Transferred Companies; (B) conflict with, result in a breach
of or default (with or without notice or lapse of time, or both) under or give
rise to a right of termination under, any Contract, permit, license or
instrument to which the either of the Transferred Companies is a party and to
which a Governmental Entity is not a party; or (C) subject to the matters
referred to in Section 3.1(c)(ii), contravene any Requirements of Law (or
Insurance Licenses) applicable or issued to Seller or either of the Transferred
Companies in any material respect.
(ii)    No consent, approval or authorization of, or declaration or filing with,
or notice to, any Governmental Entity is required to be made by Seller or the
Transferred Companies in connection with the execution and delivery of any
Transaction Agreement by Seller and such Transferred Company or the consummation
by Seller or such Transferred Company of any of the transactions contemplated
hereby or thereby,

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except for (A) the approvals, filings and notices required under the insurance
Laws of the State of Missouri necessary to, prior to the Closing, authorize the
payment of the Special Dividend, (B) those consents, approvals, authorizations,
declarations, filings or notices set forth in Section 3.1(c)(ii) of the
Disclosure Schedule; and (C) such other consents, approvals, authorizations,
declarations, filings or notices which the failure to obtain or make could not
reasonably be expected to have a Seller Material Adverse Effect.
(d)    Financial Statements; Reserves; Actuarial Results.
(i)    Seller has previously delivered to Buyer true, correct and complete
copies of (A) the annual audited statutory statements of Gateway prepared in
accordance with SAP as of and for the years ended December 31, 2011, 2010 and
2009, including the exhibits, schedules and notes thereto (collectively, the
“Audited SAP Statements”), and (B) the quarterly unaudited statutory statements
of Gateway prepared in accordance with SAP for the periods ended March 31, 2012,
June 30, 2012 and September 30, 2012, including the exhibits, schedules and
notes thereto (together with the Audited SAP Statements, collectively referred
to herein as the “SAP Statements”). The SAP Statements present fairly, in all
material respects, the financial condition and results of operations of Gateway
at the respective dates and for the periods covered by such statements in
conformity with SAP applied consistently, subject to normal recurring year end
adjustments. There has been no material change in Gateway's accounting policies
or practices, including, without limitation, permitted practices, in each of the
past three (3) fiscal years ended December 31, 2011, except as stated in the SAP
Statements.
(ii)    Seller has previously delivered to Buyer true, correct and complete
copies of (A) the audited financial statements of the Company as of and for the
years ended December 2011, 2010 and 2009 and (B) the unaudited income statements
and balance sheets of Seller as of and for the nine-month period ending
September 30, 2012 (collectively the “GAAP Financial Statements”). The GAAP
Financial Statements present fairly, in all material respects, the financial
condition and results of operations of the Company at the respective dates and
for the periods covered by such statements in conformity with GAAP applied
consistently, subject to normal recurring year end adjustments. There has been
no material change in the Company's accounting policies in each of the past
three (3) fiscal years ended December 31, 2011, except as stated in the GAAP
Statements.
(iii)    The aggregate reserves of Gateway recorded in the Audited SAP
Statements and the GAAP Financial Statements have been determined in all
material respects in accordance with generally accepted actuarial principles
consistently applied. The insurance reserving practices and policies of Gateway
have not changed, in any material respect, since January 1, 2012.
(iv)    Seller has previously delivered to Buyer a true and complete copy of the
actuarial report prepared by Gateway's actuaries for the period ending on
December 31, 2011, and all attachments, addenda, supplements and modifications
thereto (each, a “Company Actuarial Analysis”), and all information provided by
Gateway to the actuary preparing the Company Actuarial Analysis regarding the
reserves of the Company, to the extent that such information is not set forth in
the SAP Statements and the GAAP Financial Statements, was, to the Knowledge of
Seller, true, correct and complete. Except as set forth in Section 3.1(d)(iv) of
the Disclosure Schedule, since December 31, 2011, Gateway has not adjusted its
insurance reserves except in the Ordinary Course of Business.
(e)    Absence of Undisclosed Liabilities. Neither of the Transferred Companies
has any debts, commitments, liabilities or obligations of any kind or nature
whatsoever, whether accrued, fixed or unfixed, choate or inchoate, liquidated or
unliquidated, secured or unsecured, contingent, absolute, known or unknown, due
or to become due, determined, determinable or otherwise (and there is no
existing condition, situation or set of circumstances which could reasonably be
expected to result in such a debt, commitment, liability or obligation) except
(i) as disclosed in the SAP Statements or the GAAP Financial Statements,
including in the notes thereto and (ii) for liabilities or obligations that were
incurred in the Ordinary Course of Business since October 1, 2012.
(f)    Rights to the Company Shares and Gateway Shares. Neither the Company
Shares nor the Gateway Shares are subject to any Liens or Preemptive Rights,
other than with respect to the pledge of the Company Shares to Comerica Bank.

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(g)    Employees; Labor Matters. Neither Transferred Company is a party to any
labor or collective bargaining agreement or other agreement with any labor
organization applicable to any employees of the Company or Gateway. Except as
set forth in Section 3.1(g) of the Disclosure Schedule there are no pending or,
to the Knowledge of Seller, threatened complaints, charges or claims against
either of the Transferred Companies in connection with or relating to the
employment or termination of employment of any Person.
(h)    Benefit Plans.
(i)    Neither of the Transferred Companies has any liability with respect to
any benefit plan or arrangement other than the Employee Benefit Plans specified
in Section 3.1(h) of the Disclosure Schedule. The Transferred Companies and each
ERISA Affiliate has made available to the Buyer a copy or description of each
Employee Benefit Plan currently in effect and a copy of any applicable
amendment, summary plan description, favorable advisory, determination, or
opinion letter issued by the IRS, trust document, each annual report on Form
5500 (including any schedule or financial statement) for the most recent three
plan years, group insurance contract, administrative service agreement, form of
participant communication required by law, and reports or registration
statements filed with any Governmental Entity. All such Employee Benefit Plans
conform (and have at all times conformed) in all material respects to the
requirements of ERISA, the Code and all other applicable Requirements of Law.
Each such Employee Benefit Plan has been maintained in all material respects in
accordance with its documents and with all applicable provisions of the Code,
ERISA and other applicable Requirements of Law; and all reporting, disclosure,
and notice requirements of ERISA, the Code and other applicable Requirements of
Law have been satisfied in all material respects with respect to each Employee
Benefit Plan. Except as identified in Section 3.1(h) of the Disclosure Schedule,
neither Transferred Company sponsors, maintains or contributes to (or, since
December 31, 2005, sponsored, maintained or contributed to), or has any
liability with respect to, any (1) “employee benefit plan” subject to Section
302 of ERISA, Section 412 of the Code or Title IV of ERISA; (2) plan or
arrangement subject to Section 409A of the Code that results in additional
taxation under that Code Section or provides indemnification or tax gross up for
such additional taxation; or (3) plan subject to non U.S. law.
(ii)    With respect to each Employee Benefit Plan, there has occurred no non
exempt “prohibited transaction” (within the meaning of Section 4975 of the Code
or Section 406 of ERISA) or breach of any fiduciary duty described in Section
404 of ERISA that is reasonably likely to result in any material liability,
direct or indirect, after the date hereof for either of the Transferred
Companies or any stockholder or other equity holder, officer, director, or
employee of either of the Transferred Companies.
(iii)    Since December 31, 2005 (and to Seller's Knowledge, for all prior
periods), the Seller and each of the Transferred Companies have paid all amounts
that each of them are required to pay as contributions to the Employee Benefit
Plans as of the last day of the most recent quarter of each of the Employee
Benefit Plans; all benefits accrued under any funded or unfunded Employee
Benefit Plan will have been paid, accrued, or otherwise adequately reserved in
accordance with GAAP and SAP as of the most recent GAAP Financial Statements and
SAP Statements; and all monies withheld from employee paychecks with respect to
Employee Benefit Plans have been transferred to the appropriate Employee Benefit
Plan in a timely manner as required by applicable Requirements of Law.
(iv)    Since December 31, 2005 (and to Seller's Knowledge, for all prior
periods), the Company has not incurred any liability for any excise, income or
other taxes or penalties with respect to any Employee Benefit Plan, and no event
has occurred and no circumstance exists or has existed that could give rise to
any such liability. There are no pending or, to Seller's Knowledge, threatened
claims by or on behalf of any Employee Benefit Plans, or by or on behalf of any
participants or beneficiaries of any Employee Benefit Plans or other Persons,
alleging any breach of fiduciary duty on the part of the Company or any of their
officers, directors or employees under ERISA or any applicable Requirements of
Law, or claiming benefit payments other than those made in the ordinary
operation of such plans. No Employee Benefit Plan is presently under audit or
examination (nor has notice been received of a potential audit or examination)
by the IRS, the Department of Labor, or any other Governmental Entity, and no
matters are pending with respect to any Employee Benefit Plan under any IRS
program.
(v)    No Employee Benefit Plan currently maintained by either of the
Transferred Companies or to which either of the Transferred Companies may have
liability, contains any provision or is subject to any

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Requirements of Law that could prohibit the transactions contemplated by any
Transaction Agreement or that could give rise to any vesting of benefits,
severance, termination, or other payments or liabilities as a result of the
transactions contemplated by any Transaction Agreement, and no payments or
benefits under any Employee Benefit Plan or other agreement of Seller, the
Transferred Companies or any Affiliate will be considered “excess parachute
payments” under Section 280G of the Code. Except as set forth in Section
3.1(h)(v) of the Disclosure Schedule, neither Seller nor either of the
Transferred Companies has declared or paid any bonus compensation to any
employee or officer of either of the Transferred Companies in contemplation of
the transactions contemplated by any Transaction Agreement. No payments or
benefits under any Employee Benefit Plan or other agreement of Seller or either
of the Transferred Companies are, or are expected to be, subject to the
disallowance of a deduction under Section 162(m) of the Code. Subject to
applicable Requirements of Law, each Employee Benefit Plan may be amended or
terminated by either of the Transferred Companies or their ERISA Affiliates at
any time without the consent of participants and without liability, other than
routine claims for benefits and reasonable administrative expenses.
(vi)    With respect to any Employee Benefit Plan that is an employee welfare
benefit plan (within the meaning of Section 3(1) of ERISA), (A) each welfare
plan for which contributions are claimed as deductions under any provision of
the Code is in compliance in all material respects with all applicable
requirements pertaining to such deduction, (B) with respect to any welfare
benefit fund (within the meaning of Section 419 of the Code) related to a
welfare plan, there is no disqualified benefit (within the meaning of Section
4976(b) of the Code) that could result in the imposition of a tax under Section
4976(a) of the Code, (C) any Employee Benefit Plan that is a group health plan
(within the meaning of Section 4980B(g)(2) of the Code) complies, and has
complied, in all material respects, with all of the requirements of Section
4980B of the Code, ERISA, Title XXII of the Public Health Service Act, the
applicable provisions of the Social Security Act, the Health Insurance
Portability and Accountability Act of 1996, and other applicable Requirements of
Law, and (D) no welfare plan provides health or other benefits after an
employee's or former employee's retirement or other termination of employment
except as required by Section 4980B of the Code.
(vii)    All Persons classified by the Company as independent contractors at the
present time and since December 31, 2005 (and to Seller's Knowledge, during any
prior periods) satisfy and satisfied the requirements of applicable Requirements
of Law to be so classified; the Transferred Companies have fully and accurately
reported their compensation on IRS Forms 1099 when required to do so; and
neither of the Transferred Companies have any obligations to provide benefits
with respect to such Persons under Employee Benefit Plans or otherwise. No
individuals are currently providing, or have provided since December 31,
2005(and to Seller's Knowledge, during any prior periods) , services to either
of the Transferred Companies pursuant to a leasing agreement or similar type of
arrangement, nor has the Transferred Companies entered into any arrangement
whereby services will be provided by such individuals.
(viii)    There have been no requests for a waiver from the IRS with respect to
any minimum funding requirement under Section 412 of the Code
(ix)    Neither of the Transferred Companies has incurred any liability since
December 31, 2005 (and to Seller's Knowledge, during any prior periods) to the
Pension Benefit Guaranty Corporation (“PBGC”) under Section 4001 et seq. of
ERISA. Except as identified in Section 3.1(h)(ix) of the Disclosure Schedule, no
condition exists that is reasonably likely to result in the Company incurring
liability under Title IV of ERISA, either directly or with respect to any ERISA
Affiliate. All premiums payable to the PBGC have been paid when due.
(x)    There has not been, with regard to any Pension Plan, any reportable
event, as defined in Section 4043 of ERISA, that is required to be reported to
the PBGC by law or regulation.
(xi)    Neither Seller nor either Transferred Company contributes to a
multiemployer plan, as defined in Section 3(37) of ERISA (“Multiemployer Plan”),
or has contributed to a Multiemployer Plan.
(i)    Absence of Certain Changes or Events. Since January 1, 2012, there has
not been any Seller Material Adverse Effect and the Transferred Companies
conducted their business in all material respects in the Ordinary Course of
Business. Except (i) as contemplated or permitted by this Agreement or (ii) as
disclosed in Section 3.1(i)

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of the Disclosure Schedule, since January 1, 2012 there has not occurred any of
the actions or events listed in Section 4.1.
(j)    Taxes. Except as identified in Section 3.1(j) of the Disclosure Schedule:
(i)    All Tax Returns required to be filed with respect to the Transferred
Companies with any relevant Taxing Authority have been duly and timely filed in
the manner prescribed by applicable Requirements of Law (taking into account all
valid extensions) and such Tax Returns were correct and complete in all material
respect. All Taxes reflected as due and owing by the Transferred Companies have
been paid. To the Knowledge of Seller, no claim has ever been made by a Taxing
Authority in a jurisdiction where the Transferred Companies do not file Tax
Returns that the Transferred Companies are or may be subject to taxation by that
jurisdiction.
(ii)    Neither of Seller nor either Transferred Company has received from any
Taxing Authority (including jurisdictions where the Transferred Companies have
not filed Tax Returns) any (A) written notice indicating an intent to open an
audit or other review; (B) written request for information related to Tax
matters; or (C) notice of deficiency or proposed adjustment for any amount of
Tax proposed, asserted, or assessed by any Taxing Authority against the
Transferred Companies. Section 3.1(j)(ii) of the Disclosure Schedule lists all
material Tax Returns filed with respect to the Transferred Companies for taxable
periods ended on or after December 31, 2005, indicates those Tax Returns that
have been audited, and indicates those Tax Returns that currently are the
subject of audit. Seller has delivered or made available to Buyer true, correct
and complete copies of all material Tax Returns, examination reports, and
statements of deficiencies assessed against or agreed to the Transferred
Companies filed or received since December 31, 2005.
(iii)    Neither Seller nor the Transferred Companies with respect to the
Transferred Companies has executed or filed any agreement or other document
extending the period for assessment, reassessment or collection of any amounts
of Taxes that will be in force after the Closing Date, and no power of attorney
granted by the Transferred Companies or Seller with respect to the Transferred
Companies prior to the Closing Date will remain in effect after the Closing
Date. Neither Seller nor the Transferred Companies with respect to the
Transferred Companies is a party to or bound by any closing agreement, offer in
compromise, or similar agreement with any Taxing Authority. Neither Seller nor
the Transferred Companies with respect to the Transferred Companies is a party
to any Action by any Taxing Authority. To the knowledge of Seller, there are no
pending or threatened Actions by any Taxing Authority.
(iv)    There are no Liens for any Taxes upon the properties or assets of the
Transferred Companies or on the Company Shares or the Gateway Shares, other than
for current Taxes not yet due and payable.
(v)    There are no Tax rulings, requests for rulings, closing agreements or
other similar agreements (including any gain recognition agreements under
Section 367 of the Code and applications for a material change in accounting
method or to change the basis for determining items under Section 481 or Section
807 of the Code) in effect or filed with any Tax Authority relating to the
Transferred Companies which could affect the Transferred Companies' liability
for Taxes for any taxable period (or portion thereof) after the Closing Date.
(vi)    The Transferred Companies have not received a written tax opinion with
respect to any transaction relating to the Transferred Companies other than a
transaction in the ordinary course of business.
(vii)    No claim is pending or, to the Knowledge of Seller, threatened by a Tax
Authority in a jurisdiction where the Transferred Companies do not file Tax
Returns or pay Taxes that the Transferred Companies are or may be subject to Tax
in that jurisdiction.
(viii)    The Transferred Companies are not a party to or bound by any tax
indemnity, tax sharing or tax allocation agreement.
(ix)    The Transferred Companies (A) have not ever been a member of any
affiliated group of corporations, within the meaning of Section 1504 of the
Code, other than the group of which the Transferred Companies are is presently a
member or (B) do not have liability for the Taxes of any Person under Section
1.1502

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6 of the Treasury Regulations (or any similar provision of state, local, or
foreign Law), as a transferee or successor, by Contract, or otherwise.
(x)    The Transferred Companies are not a party to any Contract or plan that
has resulted or could result, separately or in the aggregate, in the payment of
(i) any “excess parachute payment” within the meaning of Section 280G of the
Code (or any corresponding provision of state, local or foreign Tax law) or (ii)
any amount that will not be fully deductible as a result of Section 162(m) of
the Code (or any corresponding provision of state, local or foreign Tax Law).
(xi)    The Transferred Companies have not ever been a United States real
property corporation (as defined in Section 897(c)(2) of the Code) during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
(xii)    The Transferred Companies have not ever been a party to any joint
venture, partnership or other Contract that could reasonably be expected to be
treated as a partnership for tax purposes.
(xiii)    The Transferred Companies have withheld and paid all Taxes required to
have been withheld and paid in connection with any amounts paid or owing to any
employee, independent contractor, creditor, stockholder, or other third party,
and complied with all information reporting, backup withholding provisions and
similar provisions of applicable Tax Law.
(xiv)    The Transferred Companies have sufficient information contained in
their records to calculate any taxable income or allowable loss that may arise
as the result of the disposition of properties or assets owned by the
Transferred Companies at the Closing Date.
(xv)    The Transferred Companies have not engaged in or been a “material
advisor” or “promoter” (as those terms are defined in Sections 6111 and 6112 of
the Code and the U.S. Treasury Regulations promulgated thereunder) with respect
to any “reportable transaction” within Section 6011 of the Code and Section
1.6011 4 of the Treasury Regulations.
(xvi)    The Transferred Companies have not constituted either a “distributing
corporation” or a “controlled corporation” (within the meaning of Section
355(a)(1)(A) of the Code) in a distribution of stock qualifying for tax free
treatment under Section 355 of the Code (1) in the two (2) years prior to the
date of this Agreement or (2) in a distribution which could otherwise constitute
part of a “plan” or “series of related transactions” (within the meaning of
Section 355(e) of the Code) in conjunction with the transactions contemplated by
this Agreement.
(xvii)    The Transferred Companies will not be required to include any
adjustment in taxable income for any Tax period or portion thereof after the
Closing Date under Section 481(c) or 807(f) of the Code (or any similar
provision of the Tax Laws of any jurisdiction).
(xviii)    Seller has delivered to Buyer complete and correct schedules, as of
September 30, 2012 of the Tax attributes of the Transferred Companies. No Tax
attribute of the Transferred Companies is currently subject to a limitation
under Section 382 or Section 383 of the Code.
(xix)    The Transferred Companies will not be required to include any item of
income in, or exclude any item of deduction from, taxable income for any taxable
period (or portion thereof) ending after the Closing Date as a result of any:
(A) “closing agreement” as described in Section 7121 of the Code (or any
corresponding or similar provision of state, local or foreign income Tax Law)
executed on or prior to the Closing Date; (B) intercompany transaction or excess
loss account described in Treasury Regulations under Section 1502 of the Code
(or any corresponding or similar provision of state, local or foreign income Tax
Law); (C) installment sale or open transaction disposition made on or prior to
the Closing Date; or (D) prepaid amount received on or prior to the Closing
Date.
(xx)    No private letter rulings, technical advice memoranda or similar
agreements or rulings have been requested, entered into or issued by any Taxing
Authority with respect to the Transferred Companies.

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(xxi)    The Transferred Companies have not entered into a gain recognition
agreement pursuant to Treasury Regulations Section 1.367(a)-8. The Company has
not transferred, nor has it been deemed to have transferred, any intangible
asset the transfer of which could be subject to the rules of Section 367(d) of
the Code.
(xxii)    Notwithstanding the foregoing, no representation is made in this
Section 3.1(j) with respect to any taxable period with respect to which the
statute of limitations has already closed.
(k)    Compliance with Applicable Law.
(i)    Except as set forth in Section 3.1(k) of the Disclosure Schedule, (A)
each of the Transferred Companies have in full force and effect all federal,
state, local and foreign governmental approvals, authorizations, consents,
licenses and permits (excluding Insurance Licenses, collectively, “Permits”)
necessary for them to own, lease or operate their properties and assets and to
carry on their business as now conducted; (B) each of the Transferred Companies
is in compliance with all applicable Requirements of Law in all material
respects; (C) no event has occurred or circumstance exists that (with or without
the giving of notice or the lapse of time or both) (x) constitutes or results,
directly or indirectly, in a material violation of, or a failure to comply with,
any applicable Requirements of Law by either of the Transferred Companies, or
(y) would likely result in the revocation, withdrawal, suspension, cancellation,
or termination of, or any modification to, any Permit; (D) neither of Seller nor
either of the Transferred Companies has received any written notice or other
communication from any Governmental Entity or any other Person regarding (x) any
actual, alleged, possible, or potential violation of, or failure to comply with,
any applicable Requirements of Law in any material respect, or (y) any actual,
proposed, possible, or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to any Permit which has not been
resolved; and (E) all applications required to have been filed for the renewal
of each Permit have been duly filed on a timely basis with the appropriate
Governmental Entity, and all other material filings required to have been made
with respect to each Permit have been duly made on a timely basis with the
appropriate Governmental Entity.
(ii)    Without limiting the generality of the representations and warranties
made in Section 3.1(k)(i), and based upon the Transferred Companies' ownership,
possession or operation of Real Property, if any: (A) each of the Transferred
Companies is, and at all times since December 31, 2005 has been, in compliance
with all Environmental Laws; (B) neither Transferred Company is subject to any
outstanding Order relating to compliance with any Environmental Laws or to the
investigation or cleanup of any Hazardous Materials; (C) there are no claims,
actions, proceedings, investigations or violations relating to any Environmental
Law pending, or, to the Knowledge of Seller, threatened against either of the
Transferred Companies; and (D) to Seller's Knowledge there are no past or
present actions, circumstances, conditions, events or incidents relating to the
presence, handling, transportation, disposal, release or threatened release of
any Hazardous Material that could reasonably be expected to impose any material
obligation on either of the Transferred Companies or form the basis of any
material claim under any Environmental Law.
(l)    Litigation.
(i)    Except in the Ordinary Course of Business in connection with the policies
of insurance written by Gateway, there are no Actions or Orders issued, pending
or, to the Knowledge of Seller, threatened against either of the Transferred
Companies on any of their respective properties or assets, at law, in equity or
otherwise, in, before or by, or otherwise involving any Governmental Entity or
other Person. Seller has delivered or made available to Buyer true, correct and
complete list of each current and ongoing Action and Order arising in the
Ordinary Course of Business in connection with the policies of insurance written
by the Company, and prior to the Closing will make available to Buyer true,
correct and complete copies of all pleadings, correspondence and other documents
relating to such Actions and Orders. There are no unsatisfied judgments or
outstanding injunctions, decrees, or awards against either of the Transferred
Companies or against any of their respective assets, businesses or properties.
(ii)    Each Transferred Company is, and at all times since December 31, 2005
has been, in compliance in all material respects with all of the terms and
requirements of each Order to which it, or any of the properties or assets owned
or used by it, is or has been subject. Neither Seller nor either of the
Transferred Companies has received any written notice or other communication
from any Governmental Entity or any other Person regarding

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any actual, alleged, possible or potential material violation of, or failure to
comply with, any term or requirement of any Order to which either of the
Transferred Companies or any of the properties or assets owned or used by either
of them, is or has been subject.
(m)    Contracts. Section 3.1(m) of the Disclosure Schedule lists the Contracts
(other than policies of insurance written by Gateway in the Ordinary Course of
Business) to which either of the Transferred Companies is a party or by which it
or properties or assets owned or used by it are bound or affected which (i)
involve payments to or from either of the Transferred Companies of greater than
$25,000, (ii) commit either of the Transferred Companies to pay any fees, bonus
or other amount upon or following any threatened or actual change in control, or
change in the nature of the business of such Transferred Company or (iii)
contain covenants restricting, restraining or impairing the ability of (A)
either of the Transferred Companies to engage in any line of business or with
any Person, to compete with any Person, to do business with any Person or in any
location or to employ any person or (B) any Person to obtain products or
services from either of the Transferred Companies (such Contracts, collectively,
the “Company Contracts”). Seller has delivered to Buyer a correct and complete
copy of each written Company Contract and Section 3.1(m) of the Disclosure
Schedule contains a written summary of the terms and conditions of each oral
Company Contract. Each Company Contract is the legal, valid and binding
obligation of the respective Transferred Company that is a party to such Company
Contract, and to the Knowledge of Seller, of each other party thereto, and is
enforceable in accordance with its terms, subject in each case to the effect of
applicable bankruptcy, reorganization, insolvency, moratorium, rehabilitation,
liquidation, fraudulent conveyance, preferential transfer or similar Laws now or
hereafter in effect relating to or affecting creditor's rights and remedies
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). Neither Transferred Company is a party thereto nor, to the
Knowledge of Seller, any other party, is in material violation or default of any
term of any such Company Contract and no condition or event exists which with
the giving of notice or the passage of time, or both, would constitute a
material violation or default of any Company Contract by such Transferred
Company, or any other party thereto or permit the termination, modification,
cancellation or acceleration of performance of the obligations of such
Transferred Company that is a party thereto, or any other party to such Company
Contract. Except as set forth in Section 3.1(m) of the Disclosure Schedule, the
consummation of the transactions contemplated by the Transaction Agreements will
not give rise to a right of a party or parties (other than the Company that is a
party thereto) to any Company Contract to terminate, modify, cancel or
accelerate the performance of the obligations of either of the Transferred
Companies under such Company Contract or impose liability under the terms
thereof on such Transferred Company that is a party thereto.
(n)    Insurance Matters.
(i)    Seller has provided Buyer with true, correct and complete copies of: (A)
any reports of examination (including, without limitation, financial, market
conduct and similar examinations) of Gateway issued by any insurance regulatory
authority since January 1, 2006, and (B) all other filings or submissions under
insurance holding company statutes and regulations made by Gateway with any
insurance regulatory authority since January 1, 2006. Gateway has filed all
reports, registrations, filings and submissions required to be filed with any
insurance regulatory authority (including without limitation, under any
applicable insurance holding company statute) since January 1, 2006. All such
reports, registrations, filings and submissions were in material compliance with
applicable Insurance Laws when filed or as amended or supplemented, and no
material deficiencies have been asserted by any Governmental Entity with respect
to such reports, registrations, filings or submissions that have not been cured
or remedied to the satisfaction of the applicable insurance regulatory
authority.
(ii)    Except as set forth in Section 3.1(n)(ii) of the Disclosure Schedule,
since December 31, 2005 (and to Seller's Knowledge, for all prior periods) (A)
all policy forms issued by or on behalf of Gateway, and all policies, binders,
slips, certificates and participation agreements and other agreements of
insurance, whether individual or group, (including all applications,
supplements, endorsements, riders and ancillary agreements in connection
therewith) and all amendments, applications, brochures, illustrations and
certificates pertaining thereto, are, to the extent required under applicable
Insurance Laws, on forms approved by applicable insurance regulatory authorities
or which have, where required by applicable Insurance Laws, been approved by all
applicable Governmental Entities or filed with and not objected to (or such
objection has been withdrawn or resolved) by such Governmental

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Entities within the period provided by applicable Insurance Laws for objection,
and all such forms comply in all material respects with, and have been
administered in all material respects in accordance with, applicable Insurance
Laws and (B) all premium rates established Gateway that are required to be filed
with or approved by Governmental Entities have been so filed or approved, the
premiums charged conform in all material respects to the premium rating plans
and underwriting methodologies so filed or approved and comply in all material
respects (or complied in all material respects at the relevant time) with
applicable Insurance Laws, except where the failure to comply with Insurance
Laws applicable to filing and approval of such forms other Insurance Laws
applicable to forms and rates would not reasonably be expected to have a Seller
Material Adverse Effect.
(iii)    Without limiting the generality of the foregoing, (A) Gateway has
conducted since December 31, 2005 (and to Seller's Knowledge, for all prior
periods, other than as set forth in any market conduct examination by or on
behalf of any state department of insurance or state insurance regulatory
authority, which examination was provided to Gateway and disclosed to Buyer) and
is conducting its business in compliance in all material respects with all
Insurance Laws; (B) Gateway has held since December 31, 2005 (and to Seller's
Knowledge, during all prior periods) and holds all qualifications,
registrations, filings, licenses, permits, certificates, consents, approvals or
authorizations issued or granted by Governmental Authorities, where applicable,
necessary to write the types of insurance, reinsurance and other products
written by it and otherwise as necessary for the conduct of their respective
insurance and reinsurance businesses in each of the jurisdictions where Gateway
conducts or operates, or has conducted or operated, its business (the “Insurance
Licenses”); (C) all of the Insurance Licenses are valid and in full force and
effect; (D) Gateway is not the subject of any pending or, to the Knowledge of
Seller, threatened Action for or contemplating the suspension, termination,
modification, limitation, cancellation, revocation, nonrenewal or impairment of
its Insurance Licenses, and to the Knowledge of Seller there is no existing fact
or circumstance that, individually or in the aggregate would be reasonably
likely to result in the suspension, termination, modification, limitation,
cancellation, revocation, nonrenewal or impairment of such Insurance Licenses
and (E) since December 31, 2005 (and to Seller's Knowledge, for all prior
periods), Gateway has not transacted insurance or reinsurance business in any
material respect in any jurisdiction requiring it to have an Insurance License
to transact such business in which it did not possess such Insurance License.
Section 3.1(n)(iii) of the Disclosure Schedule sets forth a true, correct and
complete list of the Insurance Licenses. Seller has made available to Buyer,
prior to the date hereof, true, correct, and complete copies of the Insurance
Licenses.
(iv)    Gateway has marketed, sold and issued insurance products in compliance
in all material respects with all applicable Requirements of Law since December
31, 2005 (and to Seller's Knowledge, during all prior periods, other than as set
forth in any market conduct examination by or on behalf of any state department
of insurance or state insurance regulatory authority, which examination was
provided to Gateway and disclosed to Buyer). To the Knowledge of Seller, no
proceeding or customer complaint has been filed with the insurance regulatory
authorities that would reasonably be expected to lead to the revocation, failure
to renew, limitation, suspension, restriction, or impairment of any Insurance
License.
(v)    Except as set forth in Section 3.1(n)(v) of the Disclosure Schedule, all
Persons through whom Gateway has placed or sold insurance and reinsurance since
December 31, 2005 (and to Seller's Knowledge, for all prior periods, other than
as set forth in any market conduct examination by or on behalf of any state
department of insurance or state insurance regulatory authority, which
examination was provided to Gateway and disclosed to Buyer) were duly licensed
(to the extent such licensing is required) to sell or place insurance and
reinsurance in the jurisdictions where, and at the time when, they did so on
behalf of the Company. Except as set forth in Section 3.1(n)(v) of the
Disclosure Schedule, no agent, broker, intermediary or producer has any
underwriting or binding authority on behalf of Gateway (other than underwriting
and binding authority given to an agent under the terms of the agent agreement
with Gateway) or is a party to any managing general agency Contract or other
similar arrangement.
(vi)    Except as set forth in Section 3.1(n)(vi) of the Disclosure Schedule, no
claim or assessment by any Guaranty Fund is pending, neither Seller nor Gateway
has received notice of any such claim or assessment, and, to the Knowledge of
Seller, there is no basis for the assertion of any such claim or assessment
against Gateway by any such Guaranty Fund.

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(o)    Brokers. Except as set forth in Schedule 3.1(o), no broker, investment
banker, financial advisor or other Person is entitled to any brokers', finders',
financial advisors' or similar fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Seller or any of its Affiliates (including either of the
Transferred Companies), except those for which Seller will be solely
responsible.
(p)    Intellectual Property.
(i)    Except as set forth in Schedule 3.1(p)(i)(A) of the Disclosure Schedule,
neither of Transferred Companies own any Intellectual Property. Except for
“shrink wrapped” and similar software licenses and applications that are
generally available to the public, Section 3.1(p)(i)(B) of the Disclosure
Schedule sets forth a list of all third party Intellectual Property licensed to
or used by the Transferred Companies (the “Licensed Intellectual Property”).
Except as set forth in Section 3.1(p)(i)(B) of the Disclosure Schedule, the
Transferred Companies have valid rights to use the Licensed Intellectual
Property free and clear of any royalty or other payment obligation to be paid
after the Closing.
(ii)    To Seller's Knowledge, the Transferred Companies' use of the Licensed
Intellectual Property does not conflict with or infringe on the Intellectual
Property of any other Person. Neither Seller nor either of the Transferred
Companies have received written notice from any other Person challenging the
right of such Transferred Company to use any of the Licensed Intellectual
Property.
(iii)    Except as set forth in Section 3.1(p)(iii) of the Disclosure Schedule,
no party to any Contract for Licensed Intellectual Property has given written
notice of its intention to cancel, terminate, change the scope of rights under,
or fail to renew any Contract for Licensed Intellectual Property. Neither of the
Transferred Companies nor, to the Knowledge of Seller, any other party to any
Contract for Licensed Intellectual Property, has repudiated in writing any
material provision thereof. Each Contract for Licensed Intellectual Property is
valid, subsisting and enforceable and is not subject to any outstanding Order or
agreement adversely affecting the Company's use thereof or its rights thereto.
(iv)    To the Knowledge of Seller, none of the Licensed Intellectual Property
contains any “time bombs,” “Trojan horses”, “back doors”, “trap doors”, “worms”,
viruses, bugs or faults that (x) enable or assist any Person to access without
authorization any of the Licensed Intellectual Property; or (y) otherwise
materially adversely affect the functionality of the Licensed Intellectual
Property, except as disclosed in its documentation. To the Knowledge of Seller,
no Person has gained unauthorized access to any of the Licensed Intellectual
Property. To the Knowledge of Seller, none of the Licensed Intellectual Property
contains any shareware, open source code, or other software whose use requires
disclosure or licensing of Intellectual Property.
(q)    Property and Assets.
(i)    Except for Intellectual Property (which is excluded from this Section
3.1(q)), each of the Transferred Companies (A) have good and valid title to, or
valid and subsisting leasehold interests in, all of its personal property assets
and other rights (including IT Assets), free and clear of all Liens, except for
Permitted Liens, and (B) own, have valid leasehold interests in or valid
contractual rights to use, all of the material assets, tangible and intangible,
used in its business (including IT Assets).
(ii)    Neither Transferred Company owns, nor at any time since December 31,
2005 has any Transferred Company ever owned, any Real Property.
(iii)    Except as set forth in Section 3.1(q) of the Disclosure Schedule,
neither of the Transferred Companies leases any Real Property (the “Leased Real
Property”) or personal property and each has the right to quiet enjoyment of all
material personal property and all Leased Real Property for the full term of
each such Lease (or any renewal option) relating thereto.
(iv)    To the Seller's Knowledge, there is no condemnation, expropriation or
other proceeding in eminent domain, pending or threatened, affecting the Leased
Real Property or any portion thereof or interest therein.

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(r)    Certain Relationships. Except as set forth in Section 3.1(r) of the
Disclosure Schedule, the Transferred Companies are not a party to any Contract
with Seller or its other Affiliates, or any equityholder, partner, manager,
officer or director of such Persons or, to Seller's Knowledge, any employee of
such Persons (the “Affiliate Agreements”). Section 3.1(r) of the Disclosure
Schedule sets forth a true and complete list of all balances due under any
Affiliate Agreement as of the last Business Day of the calendar month
immediately preceding the Date of this Agreement. Except as disclosed in Section
3.1(r) of the Disclosure Schedule, since January 1, 2012, there has not been any
incurrence or accrual of any liability (as a result of allocations or otherwise)
by the Transferred Companies or other transaction between the Transferred
Companies and Seller or any of its other Affiliates, or any equityholder,
partner, manager, officer or director of such Persons or, to Seller's Knowledge,
any employee of such Persons, except in the Ordinary Course of Business.
(s)    Reinsurance.
(i)    Since December 31, 2005 (and to Seller's Knowledge, during any prior
period), neither Seller nor either of the Transferred Companies has received any
written notice of any material default under any Reinsurance Contract that is
disclosed in Schedule F to Gateway's December 31, 2011 SAP Statement.
(ii)    Neither Seller nor either of the Transferred Companies has received any
written notice from any other party to a Reinsurance Contract (A) that the
financial condition of such other party to any Reinsurance Contract is impaired
with the result that a default thereunder may reasonably be anticipated, or (B)
from any applicable reinsurer that any amount of reinsurance ceded by Gateway
will be uncollectible or otherwise defaulted upon. Except as set forth on
Section 3.1(s)(ii) of the Disclosure Schedule, Gateway was able to obtain full
reserve credit for financial statement purposes under applicable SAP with
respect to the liabilities ceded under each of the Reinsurance Contracts. Since
January 1, 2012, there has not been any material change in the ability of
Gateway to obtain, if so desired, full reserve credit for financial statement
purposes under applicable GAAP or SAP for such liabilities.
(t)    Annuities. There are no annuities of which the claimant under an
insurance policy issued by Gateway is payee but for which Gateway is
contingently liable.
(u)    Accounts with Financial Institutions. Section 3.1(v) of the Disclosure
Schedule sets forth a list of all safe deposit boxes, active bank accounts and
other time or demand deposits of each of the Transferred Companies, including
any brokerage and custodial accounts for securities owned by each of the
Transferred Companies, together with the names and addresses of the applicable
financial institution or other depository, the account number, and the
identities of all Persons authorized to draw thereon or who have access thereto.
(v)    Insurance. Section 3.1(w) of the Disclosure Schedule contains a list of
all in force policies of insurance maintained by each of the Transferred
Companies as of the date hereof with respect to its properties and the conduct
of its business, other than insurance policies in connection with Employee
Benefit Plans. All such policies are valid and enforceable in accordance with
their terms and are in full force and effect (assuming no default by any such
insurer), all premiums thereon have been paid when due and the Transferred
Companies are otherwise in compliance in all material respects with the terms
and provisions of such policies. No written notice of cancellation, termination
or revocation or other written notice that any such policy is no longer in full
force or effect or that the issuer of any policy is not willing or able to
perform its obligations thereunder has been received by the Transferred
Companies.
(w)    Powers of Attorney. Except as disclosed on Section 3.1(w) of the
Disclosure Schedule, no Person holds a power of attorney entitling such Person
to bind either of the Transferred Companies except those statutory agents for
service of process.
(x)    Disclaimer. Except for the representations and warranties contained in
this Section 3.1 or in any of the Transaction Agreements, Seller makes no other
representation or warranty of any kind or nature whatsoever, oral or written,
express or implied, with respect to Seller or its Affiliates (including the
Transferred Companies).
SECTION 3.2 Representations and Warranties of Buyer. Buyer represents and
warrants to Seller as follows:

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(a)    Organization, Standing and Corporate Power. Buyer is duly organized,
validly existing and in good standing under the Laws of the Cayman Islands and
has the requisite power and authority to own its properties and assets and carry
on its business as currently conducted. Buyer has full power and authority to
enter into, consummate the transactions contemplated by, and carry out its
obligations under, each of the Transaction Agreements to which it is a party.
Buyer is duly qualified as a foreign company to do business, and is in good
standing, in each jurisdiction where the character of its owned, operated or
leased assets or properties or the nature of its activities makes such
qualification and good standing necessary, except where the failure to be so
qualified or in good standing could not reasonably be expected to have a Buyer
Material Adverse Effect. The execution and delivery by Buyer of each of the
Transaction Agreements to which it is a party, the performance by Buyer of its
obligations under each of the Transaction Agreements to which it is a party and
the consummation by Buyer of the transactions contemplated by each of the
Transaction Agreements to which it is a party, have been or will be prior to the
Closing (as applicable) duly authorized by all requisite company action on the
part of Buyer. Each of the Transaction Agreements to which Buyer is a party has
been, or upon execution and delivery thereof, will be, duly executed and
delivered by Buyer. Assuming due authorization, execution and delivery by the
other parties hereto or thereto, each of the Transaction Agreements to which
Buyer is a party constitutes, or upon execution and delivery thereof will
constitute, the legal, valid and binding obligation of Buyer, enforceable
against it in accordance with its terms, subject in each case to the effect of
applicable bankruptcy, reorganization, insolvency, moratorium, fraudulent
conveyance or similar Laws now or hereafter in effect relating to or affecting
creditor's rights and remedies 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).
(b)    Preferred Stock. All of the shares of Buyer Preferred Stock to be issued
at the Closing are duly authorized and will at the Closing be validly issued,
fully paid and nonassessable and clear of all Liens and Preemptive Rights.
(c)    Non Contravention; Consents.
(i)    Except as set forth in Section 3.2(c)(i) of the Disclosure Schedule, the
execution, delivery and performance by Buyer of each Transaction Agreement to
which it is a party does not, and the consummation of the transactions
contemplated hereby and thereby will not, (A) conflict with any of the
provisions of its Constituent Documents; or (B) subject to the matters referred
to in Section 3.2(c)(ii), materially contravene any Requirements of Law
applicable to Buyer.
(ii)    No consent, approval or authorization of, or declaration or filing with,
or notice to, any Governmental Entity is required to be made by Buyer in
connection with the execution and delivery of any Transaction Agreement by Buyer
to which it is a party or the consummation by Buyer of any of the transactions
contemplated hereby and thereby, except for (A) the approvals, filings and
notices required under the Insurance Laws of the State of Missouri or any other
state where the Company is licensed to transact insurance; (B) those consents,
approvals, authorizations, declarations, filings or notices set forth in Section
3.2(c)(ii) of the Disclosure Schedule and (C) such other consents, approvals,
authorizations, declarations, filings or notices which the failure to obtain or
make could not reasonably be expected to have a Buyer Material Adverse Effect.
(d)    Brokers. No broker, investment banker, financial advisor or other Person
is entitled to any brokers', finders', financial advisors' or similar fee or
commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Buyer or any of its Affiliates,
except those for which Buyer will be solely responsible.
(e)    Disclaimer. Except for the representations and warranties contained in
this Section 3.2 or in any of the Transaction Agreements, Buyer makes no other
representation or warranty of any kind or nature whatsoever, oral or written,
express or implied, with respect to Buyer or its Affiliates.
ARTICLE IV

COVENANTS

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SECTION 4.1 Conduct of Business of the Company.
Except as contemplated or permitted by this Agreement or as may be required by
applicable Requirements of Law, from the Date of this Agreement to the Closing
Date, the Transferred Companies will, and Seller will cause the Transferred
Companies to, (i) conduct their business in all material respects in the
Ordinary Course of Business; (ii) use their respective commercially reasonable
best efforts to preserve intact its business organization and goodwill and
relationships with third parties and its rights and franchises; (iii) not
intentionally engage in any practice, take any action, fail to take any action
or enter into any transaction or other agreement or arrangement which would
reasonably be expected to cause any representation or warranty of Seller to be
untrue at any time, or result in a breach of any covenant or obligation made by
Seller in this Agreement; (iv) perform Gateway's obligations under the insurance
policies written by it and the Transferred Companies' obligations under all
Company Contracts; and (v) maintain their books and records in the usual,
regular and ordinary manner consistent with past practice. Without limiting the
foregoing, from the Date of this Agreement to the Closing, except as set forth
in Section 4.1 of the Disclosure Schedule and as contemplated or permitted by
this Agreement, the Transferred Companies will not, and Seller will not cause or
permit the Transferred Companies to, take any of the following actions without
the prior consent of Buyer which may not be unreasonably withheld:
(a)    (i) other than the Special Dividend, declare, set aside or pay any
dividends on, or make any other distributions (whether in cash, equity or
property) in respect of, its outstanding equity interests; (ii) split, combine
or reclassify any of its outstanding equity interests or issue or authorize the
issuance of any other securities in respect of, in lieu of or in substitution
for its outstanding equity interests; or (iii) purchase, redeem or otherwise
acquire any outstanding equity interests of it or any rights, warrants or
options to acquire any such equity;
(b)    issue, sell, grant, pledge or otherwise encumber any of its equity
interests or other securities or issue any securities convertible into, or any
rights, warrants or options to acquire, any such equity interests or other
securities or convertible securities;
(c)    amend its Constituent Documents;
(d)    (i) acquire (including by way of bulk reinsurance, merger, consolidation
or acquisition of stock or assets) any Person or any division thereof or
material portion of the assets thereof; (ii) enter into any agreement providing
for the merger or consolidation of the Transferred Companies with any other
Person; (iii) liquidate, dissolve, or wind up, or otherwise dispose of all or
substantially all of its assets (including by way of bulk reinsurance, whether
on an indemnity or assumption basis); (iv) consider or adopt of a plan of
liquidation, dissolution, rehabilitation, restructuring, recapitalization, re
domestication or other reorganization; or (v) organize any new company,
subsidiary or joint venture, partnership or similar arrangement;
(e)    mortgage, pledge or subject to any Lien (other than Permitted Liens) any
of its properties or assets, other than Liens existing today;
(f)    sell, lease, license or otherwise dispose of any property or assets,
other than Investment Assets in the Ordinary Course of Business;
(g)    create, incur, assume or guarantee any indebtedness, obligation or
liability for money including, without limitation, the creation of any Lien
(except for any Permitted Liens) on all or any portion of any property or assets
of the Transferred Companies;
(h)    enter into, amend or modify in any material respect, or terminate any
Company Contract in excess of $25,000;
(i)    make any change in its financial or statutory accounting methods,
principles or practices used by it materially affecting its properties, assets
or liabilities, except insofar as may be required by a change in applicable
Requirements of Law, GAAP or SAP;
(j)    make any payment, accrual or commitment for capital expenditures in
excess of $25,000;

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(k)    make any material change in the business, condition, operations,
properties, assets or liabilities of the Transferred Companies, other than in
the Ordinary Course of Business;
(l)    make any material change in the underwriting, reinsurance, marketing,
pricing, claim adjustment, claim processing, claim payment, reserving, financial
or accounting methods, practices or policies of Gateway, except in the Ordinary
Course of Business;
(m)    make any loan, advance or capital contribution to or otherwise invest in
any Person;
(n)    pay, discharge, settle or satisfy any material claims, Liens, liabilities
or obligations (absolute, accrued, asserted or unasserted, contingent or
otherwise) or waive any right, in each case, other than policy claims in the
Ordinary Course of Business;
(o)    adopt, amend or modify any Employee Benefit Plan of the Transferred
Companies which is sponsored solely by either or both of the Transferred
Companies;
(p)    (i) enter into any employment, consulting, deferred compensation,
severance, retirement or other similar agreement with any director, officer,
employee or agent of the Transferred Companies (or materially amend any such
existing agreement); (ii) grant any severance or termination pay to any
director, officer, employee or agent of the Transferred Companies; (iii)
materially change any compensation payable to any director, officer, employee or
agent of the Transferred Companies pursuant to any severance, retirement or
similar policies or plans thereof; (iv) materially increase any compensation
(including bonuses) payable or to become payable to any director, officer,
employee or agent of the Transferred; or (v) materially alter any employment
practices or the terms and conditions of employment;
(q)    fail to pay in full all assessments by any Guaranty Fund;
(r)    issue any new policies or underwrite any new insurance or reinsurance
business of any type in any jurisdiction, whether by the Company or on its
behalf, that is not in the Ordinary Course of Business;
(s)    consummate any transactions in investments not in compliance with the
investment policy of Gateway as in effect on the Date of this Agreement, a true
and complete copy of which has previously been delivered to Buyer;
(t)    (i) settle or compromise any Action or controversy relating to Taxes;
(ii) make any request for a written ruling of a Governmental Entity relating to
Taxes; or (iii) enter into a written and legally binding agreement with a
Governmental Entity relating to Taxes;
(u)    terminate, cancel or amend any insurance coverage maintained with respect
to any material property of the Transferred Companies or which has not been
replaced by a comparable amount of insurance coverage;
(v)    make any payment under any tax allocation or similar agreement;
(w)    make, revoke, or amend any Tax election of the Transferred Companies,
change any annual Tax accounting period, adopt or change any method of Tax
accounting, file any amended Tax Return, settle any Tax claim or assessment,
surrender any right to claim a Tax refund, offset or other reduction in Tax
liability, consent to any extension or waiver of the limitations period
applicable to any Tax claim or assessment or take or omit to take any other
action, if such action or omission would have the effect of materially
increasing the Tax liability or reducing any Tax attribute of the Transferred
Companies or make any payment under any Tax allocation, Tax sharing, Tax
indemnity or similar agreement, arrangement or understanding; or
(x)    approve, or enter into any Contract or commitment, whether in writing or
otherwise and whether made by or on behalf of the Transferred Companies, to take
any of the actions specified in this Section 4.1.
SECTION 4.2 Access to Information.
From the Date of this Agreement until the Closing Date, Seller will and will
cause the Transferred Companies to afford Buyer and its officers, employees and
representatives and advisors reasonable access upon reasonable

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advance notice at reasonable times during normal business hours to all of the
Transferred Companies' properties, books, Contracts and records, and Seller will
and will cause the Transferred Companies to furnish Buyer and its officers,
employees, representatives and advisors such information concerning the
Transferred Companies' business, properties, financial condition, operations and
personnel as such Persons may from time to time reasonably request; provided,
however, that any such investigation will be conducted in a manner that does not
unreasonably interfere with the normal operations, customers and employee
relations of Seller or the Transferred Companies. After the Closing Date, Seller
will provide Buyer and its officers, employees and representatives and advisors
with such information that such Persons may reasonably request in order to
prepare Gateway's SAP Statements and to comply with regulatory requirements and
requests. In addition, both before and after the Closing Date, Seller will
instruct such Seller's and (prior to the Closing, only) the Transferred
Companies' officers, employees and representatives and advisors to make
themselves reasonably available during normal business hours upon reasonable
notice to respond to any reasonable questions about the Transferred Companies by
Buyer and Buyer's officers, employees and representatives and advisors.
SECTION 4.3 Consents, Approvals and Filings.
(a)    Seller and Buyer will each use their commercially reasonable best efforts
and will cooperate fully with each other to (i) comply as promptly as
practicable with all requirements of any Governmental Entity applicable to the
transactions contemplated by this Agreement; (ii) obtain as promptly as
practicable all Permits set forth in Section 4.3 of the Disclosure Schedule in
connection with the consummation of the transactions contemplated by this
Agreement (“Necessary Permits”); (iii) obtain as promptly as practicable all
consents or waivers of all third parties necessary in connection with the
consummation of the transactions contemplated by this Agreement and (iv) cause
the Special Dividend to be paid to the Company (followed by an immediate
dividend of the same amount from Company to Seller). In connection therewith,
Seller and Buyer will make and cause their respective Affiliates to make all
formal filings and material supplements thereto required pursuant to applicable
Requirements of Law (such formal filings and material supplements thereto,
collectively, “Material Filings”) as promptly as practicable (and in no event
more than twenty (20) Business Days after the date of this Agreement) in order
to facilitate the prompt consummation of the transactions contemplated by the
Transaction Agreements and will promptly make, and will cause their respective
Affiliates to promptly make, such Material Filings as such Governmental Entities
may reasonably request, including (x) Buyer causing “Form A” or similar change
of control applications to be filed in each jurisdiction where required by
applicable Insurance Laws with respect to the transactions contemplated by the
Transaction Agreements; (y) if required by applicable Insurance Laws, Buyer
causing “Form E” or similar market share notifications to be filed in each
jurisdiction where required by applicable Insurance Laws and (z) Seller causing
notice of Special Dividend to be filed with the Missouri Department of Insurance
as required by applicable Insurance Laws. Neither Seller nor Buyer will take or
cause to be taken any action that it is aware or reasonably should be aware
would have the effect of delaying, impairing or impeding the receipt of any such
Permits.
(b)    Each Party will provide the other Party with true, correct and complete
copies of all Material Filings at least three (3) Business Days in advance of
the filing or submission thereof so that the other Party has a reasonable
opportunity to review and comment thereon and, subject to applicable Law
relating to the sharing of information, each Party will provide the other Party
with true, correct and complete copies of all material correspondence, and a
written summary of all material oral conversations, between such Party (and its
Affiliates) on the one hand, and any Governmental Entity on the other hand and
each Party, and will advise the other Party of all material communications with
Governmental Entities concerning a Material Filing. Neither Party (or their
respective Affiliates) may initiate an initial meeting with any Governmental
Entity in advance of or in connection with any Material Filing without providing
the other Party with at least three (3) Business Days advance written notice of
such contemplated meeting or communication. Each Party will use commercially
reasonable best efforts to provide the other Party with advance notice of any
meetings or material communications with any Governmental Entity. Buyer will not
be required to provide Company or Seller with information provided with Material
Filings that Buyer reasonably deems to be proprietary or confidential in nature.
To the extent permitted by applicable Law, each Party may request confidential
treatment of Material Filings made by it. Notwithstanding anything to the
contrary in this Agreement, none of Buyer, Seller or their respective Affiliates
may be required to take any action under this Section 4.3 pursuant to, or
otherwise agree to or accept, any Negative Conditions or Restrictions.

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(c)    The Parties acknowledge that they do not anticipate that Seller's holding
of Buyer Preferred Stock will be considered an acquisition of “control” of Buyer
for Insurance Law purposes; provided, however, if prior to the issuance of the
Buyer Preferred Stock to Seller, an applicable Governmental Entity deems that
Seller is acquiring “control” of Buyer under applicable Insurance Laws, then
Buyer agrees to reduce the number of shares of Buyer Preferred Stock to be
issued to Seller to such extent, and only to such extent, that Seller would not
be considered to “control” Buyer for Insurance Law purposes, and Buyer shall
issue to Seller a note at Closing in the form and following the terms of the
Holdback Note in an amount equal to the Preferred Stock Purchase Price
multiplied by the number of shares by which the number of shares of Buyer
Preferred Stock to be issued to Seller has been reduced.
SECTION 4.4 Public Announcements. No Party or any Affiliate of such Party may
issue or cause the publication of any press release or public announcement or
otherwise communicate with any news media in respect of any of the Transaction
Agreements or the transactions contemplated hereby and thereby without the prior
written consent of the other Party (which consent may not be unreasonably
withheld, conditioned or delayed), except as may be required by applicable
Requirements of Law or applicable securities exchange rules, in which the case
the Party (or such Party's Affiliate) required to publish such press release or
public announcement will allow the other Party a reasonable opportunity to
comment on such press release or public announcement in advance of such
publication.
SECTION 4.5 Subsequent Statutory Statements. Seller will cause Gateway to
commence preparation of and, consistent with past practice and on a timely
basis, if required prior to the Closing Date, file with or submit to (as
applicable) the Missouri Department and any other insurance department or other
Governmental Entity with which Gateway is required to make such filings or
submissions, and promptly deliver to Buyer, true, correct and complete copies
of, the Quarterly Statutory Statement for the Company, for March 31, 2012 and
each subsequent quarter and year ended prior to the Closing Date; provided, that
all such Statutory Statements will (a) be prepared in all material respects in
accordance with SAP, which preparation will not have involved the use of any
material practices permitted rather than prescribed by (as applicable) the
Missouri Department, unless noted otherwise in the Company's SAP Statements as
were available to Buyer prior to Closing; (b) be prepared in all material
respects in accordance with the books and records of Gateway; (c) present fairly
in all material respects the statutory financial position of Gateway at the
respective date thereof and the statutory results of operations and cash flows
of Gateway for the respective periods then ended, in conformity with SAP
consistently applied, subject to normal recurring year-end adjustments; (d)
comply in all material respects with applicable Requirements of Law; and (e) be
filed with or submitted to (as applicable) the Missouri Department and any other
insurance department or other Governmental Entity with which Gateway is required
to make such filings or submissions, in a timely manner on forms prescribed or
permitted by the applicable Governmental Entity.
SECTION 4.6 Acquisition Proposal. After the Date of this Agreement, neither
Seller nor any Affiliate of Seller (including the Transferred Companies) will
itself, nor will Seller or any Affiliate of Seller (including the Transferred
Companies) authorize or permit any equityholder, partner, manager, officer,
director or employee of, or any investment banker, attorney, accountant or other
representative or advisor of Seller or any Affiliate of Seller (including the
Transferred Companies) to, directly or indirectly, (a) solicit, initiate or
encourage the submission of any Acquisition Proposal; or (b) participate in any
negotiations or any material discussions regarding, or furnish to any Person any
information with respect to, or agree to or endorse, or take any other action to
facilitate any Acquisition Proposal or any inquiries or the making of any
proposal that constitutes, or may reasonably be expected to lead to, any
Acquisition Proposal. Immediately after the execution and delivery of this
Agreement, Seller will (i) cease and terminate, and will cause its Affiliates
(including the Transferred Companies) to cease and terminate, any existing
activities, discussions or negotiations with any Person(s) conducted heretofore
with respect to any possible Acquisition Proposal and (ii) instruct their and
their Affiliates' equityholders, partners, members, officers, directors,
employees, investment bankers, attorneys, accountants and any other
representatives and advisors to cease and terminate any existing activities,
discussions or negotiations with any Person(s) conducted heretofore with respect
to any possible Acquisition Proposal.
SECTION 4.7 Intercompany Accounts; Affiliate Agreements. Other than as set forth
in Section 4.7 of the Disclosure Schedule, (a) Seller will cause all accounts
receivable or payable (whether or not currently due or payable) under each
Affiliate Agreement to be settled in full (without any premium or penalty) at or
prior to the

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Closing and (b) the Transferred Companies' participation in all Affiliate
Agreements will, in each case, be terminated and discharged without any further
liability or obligation to the Transferred Companies thereunder (or any premium
or penalty) effective at the Closing and upon terms and pursuant to instruments
reasonably satisfactory to Buyer.
SECTION 4.8 Termination of Signing and Withdrawal Powers. At least five (5)
Business Days prior to the Closing Date, Seller will cause the Transferred
Companies to deliver written notification to any financial institution which
maintains, on behalf of Transferred Companies, any account or safe deposit box
listed in Section 3.1(v) of the Disclosure Schedule notifying each such
financial institution that the signing or withdrawal powers or other authority
of all Persons with respect to such accounts and safe deposit boxes are revoked
immediately upon receipt by such financial institution of such notice.
SECTION 4.9 Obligations of Affiliates. Seller agrees that in each instance where
its Affiliates are obligated to act or refrain from acting under this Agreement
during the period prior to the Closing, Seller will cause such Affiliate to so
act or refrain from acting.
SECTION 4.10 Notification of Certain Matters. Seller, on the one hand, and
Buyer, on the other hand, will give prompt notice to each other of (a) the
occurrence, or failure to occur, of any event or the existence of any condition
that has caused or could reasonably be expected to cause any of its
representations or warranties contained in this Agreement to be untrue or
inaccurate at any time after the Date of this Agreement, up to and including the
Closing and (b) any failure on its part to comply with or satisfy any covenant,
condition or obligation to be complied with or satisfied by it under this
Agreement; provided, that no such disclosure pursuant to clause (a) or (b) will
be deemed to amend or supplement the Disclosure Schedule or to otherwise prevent
or cure any misrepresentation, breach of warranty, or breach of covenant or
obligation.
SECTION 4.11 Confidentiality; Covenant Not to Compete; Non Solicitation.
(a)    Confidentiality. From and for a period of sixty (60) months after the
Closing, Seller plus, prior to Closing the Transferred Companies), on the one
hand, and Buyer and its Affiliates (including the Transferred Companies after
Closing), on the other hand, will, and will cause their respective
representatives to, maintain in confidence any written, oral or other
information relating to or obtained from the other party or its Affiliates,
except that the foregoing requirements of this Section 4.11(b) will not apply to
the extent that (i) any such information is or becomes generally available to
the public other than (A) in the case of Buyer's confidential information, as a
result of disclosure by Seller or its Affiliates or any of their respective
Representatives and (B) in the case of Seller's confidential information, as a
result of disclosure by Buyer or any of its respective Affiliates, or any of
their respective representatives, (ii) any such information is required by
applicable Law, Order or a Governmental Entity to be disclosed on a
non-confidential basis after prior notice has been given to the other parties
(including any report, statement, testimony or other submission to such
Governmental Entity), (iii) any such information is reasonably necessary to be
disclosed in connection with any Action or in any dispute with respect to the
Transaction Agreements (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, investigation or
administrative proceeding), or(iv) any such 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. Each of
the parties hereto will instruct its Affiliates and Representatives having
access to such information of such obligation of confidentiality.
(b)    Covenant Not to Compete. From the date hereof through the date that is
sixty (60) months following the Closing Date, neither Seller nor its Affiliates
may directly or indirectly as a partner, joint venturer, employer, consultant,
shareholder, principal, manager, agent or otherwise, own, manage, operate, join,
control or participate in the ownership, management, operation or control of any
business, whether in corporate, limited liability company or partnership form or
otherwise, which in any way engages in North America in any business which
competes with the Taxi and Limo Program business of the Transferred Companies as
conducted as of the date hereof; provided, however, that this covenant not to
compete does not apply to any captive insurance company or other similar
insurance arrangement that provides insurance or reinsurance to or for the
benefit of Seller or any of its Affiliates; provided, further, that the
foregoing will not in any way prohibit Seller or its Affiliates from (i)
operating the

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businesses conducted by Seller and its Affiliates (other than the business
conducted by the Transferred Companies) as of the date hereof, including but not
limited to the insurance agency and insurance brokerage businesses of Seller and
its Affiliates, (ii) acquiring or starting a business that is engaged in the
insurance agency, brokerage or related business, other than an insurance
company; provided that if Seller or any of its Affiliates makes such an
acquisition, then Seller will provide notice thereof to Buyer and use
commercially reasonable efforts to provide Buyer with an opportunity to have
discussions with such acquired business with respect to providing services to
such business, (iii) operating the WC Program business, (iv) being a passive
owner of less than 5% of the outstanding stock of any publicly traded
corporation engaged in the business conducted by the Company as of the date
hereof, or (v) operating a business competitive to that of the Truck Program.
The foregoing covenant will not apply to an Affiliate of Seller after
consummation of a change of control of such Affiliate (whether by sale of stock,
sale of assets, merger, consolidation or otherwise) after which Seller (or any
of its Affiliates) no longer controls such Affiliate), so long as such Affiliate
is not in possession of any confidential information of either of the
Transferred Companies relating to the Taxi and Limo Program.
(c)    Non Solicitation. From the date hereof through the date that is
thirty-six (36) months following the Closing Date, neither Seller nor its
Affiliates may directly or indirectly (i) employ or solicit any employee of the
Transferred Companies in any capacity whatsoever or (ii) contract with or
solicit any customer of the Taxi and Limo Program business of Gateway as of the
date hereof without the express written consent of Buyer; provided, that the
foregoing limitations do not prohibit general, non targeted solicitations of
individuals or customers or solicitations of customers or any solicitation
unrelated to the business of the Transferred Companies.
In the event the covenants in this Section 4.11 are in any way found
unenforceable or invalid or are in any way limited or reformed, such other
covenants will not be affected thereby, and in the event any such other covenant
is in any way found unenforceable or invalid or is in any way limited or
reformed, the other covenants in this Section 4.11 will not be affected thereby.
SECTION 4.12 Board of Directors of Buyer. Buyer will consider in good faith, and
endorse the election of if qualified, one nominee by Seller to the Buyer's board
of directors, to be proposed in accordance with the Articles of Association of
Buyer for inclusion as a nominee, at the 2013 annual meeting of the shareholders
of Buyer and each following meeting so long as (i) the Buyer Note or Holdback
Note remains outstanding or (ii) Seller continues to hold shares of Buyer
Preferred Stock or converted shares of common stock of Buyer equal to at least
five percent (5%) of the outstanding stock of Buyer on a fully-diluted basis.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1 Conditions to Obligations of Buyer. The obligations of Buyer to
effect the purchase and sale of the Company Shares and the other actions to be
taken at the Closing are further subject to the satisfaction or waiver by Buyer
of the following conditions:
(a)    Representations and Warranties. The representations and warranties of
Seller set forth in this Agreement will be true and correct in all material
respects as of the Date of this Agreement and as of the Closing as though made
at and as of the Closing, except (x) the representations and warranties
contained in Section 3.1(a) (Organization, Standing and Corporate Power),
Section 3.1(b) (Capital Structure), Section 3.1(c) (Non Contravention;
Consents), and Section 3.1(f) (Rights to the Company Shares) will be true and
correct in all respects as of the Date of this Agreement and as of the Closing
as though made at and as of the Closing and (y) to the extent that any other
representations and warranties of Seller are qualified by the term “material” or
“Seller Material Adverse Effect”, in which case such representations and
warranties (as so written, including the term “material” or “Material”) will be
true and correct in all respects at and as of the Closing; and Buyer will have
received a certificate signed by an executive officer of Seller to the effect
set forth in this Section 5.1(a).
(b)    Performance of Covenants and Obligations of Seller. Seller will have
performed and complied with all of its covenants hereunder in all material
respects through the Closing, except to the extent that such covenants are
qualified by the term “material” or “Seller Material Adverse Effect”, in which
case Seller will have performed and

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complied with all of such covenants (as so written, including the term
“material” or “Material”) in all respects through the Closing; and Buyer will
have received a certificate signed by an executive officer of Seller to the
effect set forth in this Section 5.1(b).
(c)    Third Party Approvals. All (i) Necessary Permits and all approvals or
authorizations from all Governmental Entities required of Seller and the
Transferred Companies set forth in Section 5.1(c) of the Disclosure Schedule;
(ii) Necessary Permits and all approvals or authorizations from all Governmental
Entities required of Buyer set forth in Section 5.2(c) of the Disclosure
Schedule; and (iii) approvals or authorizations from Persons other than
Governmental Entities set forth in Section 5.1(c) of the Disclosure Schedule
required of Seller and the Transferred Companies will, in each case, have been
duly obtained by Seller, the Company and Buyer, respectively, and will be in
full force and effect; provided, that such Necessary Permits and any such
approvals or permits from Governmental Entities will not be subject to any
Negative Conditions or Restrictions.
(d)    No Actions. No Action will be pending or threatened before (or that could
come before) any Governmental Entity wherein an unfavorable Order would (i)
prevent consummation of any of the transactions contemplated by any Transaction
Agreement; (ii) cause any of the transactions contemplated by any Transaction
Agreement to be rescinded following the Closing; (iii) adversely affect the
right of Buyer to own the Company Shares; or (iv) adversely affect the right of
the Transferred Companies to own their properties and assets and to operate
their businesses (and no such Order will be in effect); and Buyer will have
received a certificate signed by an executive officer of Seller to the effect
set forth in this Section 5.1(d).
(e)    WC Reinsurance Transaction. The WC Reinsurance Transaction will have been
consummated.
(f)    Forgiveness of Loan. The loan amounts owed by Company to Seller will be
forgiven and the note related thereto will be released.
(g)    Delivery of Documents. Seller will have delivered, or caused to be
delivered, to Buyer each of the deliverables specified in Section 2.4(a).
(h)    Preferred Shareholder Requirements. Seller will have made reasonable best
efforts to provide to Buyer the necessary “know your customer” documents (as
required by applicable Laws of the Cayman Islands) in order for Seller to become
a holder of Buyer Preferred Stock.
SECTION 5.2 Conditions to Obligations of Seller. The obligations of Seller to
effect the purchase and sale of the Company Shares and the other actions to be
taken at the Closing are further subject to the satisfaction or waiver by Seller
of the following conditions:
(a)    Representations and Warranties. The representations and warranties of
Buyer set forth in this Agreement will be true and correct in all material
respects as of the Date of this Agreement and as of the Closing as though made
at and as of the Closing, except (x) the representations and warranties
contained in Section 3.2(a) (Organization, Standing and Corporate Power) and
Section 3.2(c) (Non Contravention; Consents) will be true and correct in all
respects as of the Date of this Agreement and as of the Closing as though made
at and as of the Closing and (y) to the extent that such representations and
warranties are qualified by the term “material” or “Buyer Material Adverse
Effect”, in which case such representations and warranties (as so written,
including the term “material” or “Material”) will be true and correct in all
respects as of the Date of this Agreement and as of the Closing as though made
at and as of the Closing, and Seller will have received a certificate signed on
behalf of Buyer by an executive officer of Buyer to the effect set forth in this
Section 5.2(a).
(b)    Performance of Covenants and Obligations of Buyer. Buyer will have
performed and complied with all of its covenants and obligations hereunder in
all material respects through the Closing, except to the extent that such
covenants and obligations are qualified by the term “material” or “Buyer
Material Adverse Effect”, in which case Buyer will have performed and complied
with all of such covenants and obligations (as so written, including the term
“material” or “Material”) in all respects through the Closing; and Seller will
have received a certificate signed by an executive officer of Buyer to the
effect set forth in this Section 5.2(b).

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(c)    Regulatory Approvals. All Necessary Permits and all approvals or
authorizations from all Governmental Entities required of Buyer set forth in
Section 5.2(c) of the Disclosure Schedule will have been duly obtained by Buyer
and will be in full force and effect.
(d)    WC Reinsurance Transaction. The WC Reinsurance Transaction will have been
consummated.
(e)    Delivery of Documents. Buyer will have delivered, or caused to be
delivered, to Seller each of the deliverables specified in Section 2.4(b).
ARTICLE VI

SURVIVAL
All representations and warranties contained in this Agreement will survive
Closing solely for purposes of Section 7.1(a) and (b) and will terminate and
expire at the close of business on the date that is twenty-four (24) months
after the Closing Date except (a) for those representations and warranties
contained in Section 3.1(a) (Organization, Standing and Corporate Power),
Section 3.1(b) (Capital Structure), Section 3.1(f) (Rights to Company Shares)
and Section 3.2(a) (Organization, Standing and Corporate Power), which will
survive for ten (10) years after the Closing Date and the representations and
warranties contained in Section 3.1(c) (Non Contravention; Consents) Section
3.1(o) (Brokers), Section 3.2(c) (Non Contravention; Consents) and Section
3.2(d) (Brokers) which will survive for five (5) years after the closing date
(collectively, the “Special Representations”); and (b) for those representations
and warranties in Section 3.1(g) (Employees; Labor Matters), Section 3.1(h)
(Benefit Plans) and Section 3.1(j) (Taxes) (collectively, the “Extended
Representations”), which will survive until the earlier of (i) ninety (90) days
past the expiration of the applicable statute of limitations for actions against
the Transferred Companies with respect to matters address in those Extended
Representations, or (ii) the date that is ten (10) years after the Closing Date.
All covenants and obligations contained in this Agreement will survive only
until the Closing, unless such covenant provides for such obligations to
continue after the Closing, and then only for the time specified therein. As
used herein, “survive” solely means that a party can continue to make claims for
representations, warranties or covenants that were in breach on the Closing Date
(or, if different, the end time specified for such covenant), and does not mean
that such representation, warranty, or covenant continues to be made as to
periods after the Closing Date (or the applicable end period for a covenant, for
covenants that specifically extend after the Closing Date)
ARTICLE VII

INDEMNIFICATION
SECTION 7.1 Obligation to Indemnify.
(a)    Subject to the limitations set forth in this Article VII, and the
expiration of representations and warranties of Seller as provided in Article
VI, Seller agrees to indemnify and hold harmless Buyer, its Affiliates
(including, post Closing, the Company), and their respective directors,
officers, shareholders, partners, members and employees and their heirs,
successors and permitted assigns (collectively, “Buyer Indemnified Parties”)
from, against and in respect of any damages, losses, charges, liabilities,
payments, judgments, settlements, assessments, deficiencies, Taxes, interest,
penalties, costs and expenses (including, without limitation, reasonable
attorneys' fees, and reasonable out of pocket disbursements) (“Losses”) imposed
on, sustained, or incurred or suffered by any of the Buyer Indemnified Parties,
whether in respect of Third Party Claims, claims between Seller, on the one
hand, and Buyer, on the other hand, or otherwise, directly or indirectly
resulting from, in connection with or arising out of:
(i)    the inaccuracy or any breach of the representations and warranties of
Seller contained in this Agreement or in any Transaction Agreement delivered by
or on behalf of Seller at the Closing; it being understood that for purposes of
this Section 7.1(a), any qualifications relating to materiality, including the
term “Seller Material

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Adverse Effect”, contained in any such representation or warranty will be
disregarded for purposes of determining whether such representation or warranty
was breached or was inaccurate;
(ii)    any breach or failure by Seller to perform any of its covenants or
obligations contained in this Agreement or any Transaction Agreement;
(iii)    any Taxes for which Seller is responsible in accordance with Article
VIII; and/or (iv) liabilities and obligations of the nature and type specified
in Section 4.8;
(iv)    the Company, solely to the extent that such Losses are not related to
the ownership or operation of Gateway and are not specifically reflected in the
2011 GAAP Financial Statements of the Company; and
(v)    any CIE Claims, whether known or unknown as of the Closing Date.
(b)    The rights of the Buyer Indemnified Parties to indemnification under
Section 7.1(a) will be subject to the following:
(i)    If the amount of any Loss suffered or incurred by a Buyer Indemnified
Party, at any time subsequent to the making of an indemnity payment in respect
thereof, is reduced by recovery, settlement or otherwise under or pursuant to
any insurance coverage, or pursuant to any claim, recovery, settlement or
payment by or against any other Person, the amount of such reduction, less any
costs, expenses or premiums incurred in connection therewith, will promptly be
repaid by the Buyer Indemnified Party to Seller that has made any such indemnity
payment. Buyer Indemnified Parties will use commercially reasonable efforts to
recover from insurance policies or other applicable sources of recovery the
maximum portion of any Losses of such Buyer Indemnified Party. Upon making any
indemnity payment, Seller will, to the extent of such indemnity payment made by
it, be subrogated to all rights of the Buyer Indemnified Party against any third
party in respect of the indemnifiable Loss to which the indemnity payment
relates; provided, however, that until the Buyer Indemnified Party recovers full
payment of its indemnifiable Loss, any and all claims of Seller against any such
third party on account of said indemnity payment is hereby made expressly
subordinated and subjected in right of payment to the Buyer Indemnified Party's
rights against such third party. Without limiting the generality or effect of
any other provision hereof, each such Buyer Indemnified Party and Seller will
duly execute upon request all instruments reasonably necessary to evidence and
perfect the above described subrogation and subordination rights.
(ii)    Except as set forth in Section 7.1(b)(iv), the Buyer Indemnified Parties
will be entitled to indemnification under Section 7.1(a)(i) only to the extent
that the aggregate amount of Losses exceed on a cumulative basis Two Hundred
Fifty Thousand dollars ($250,000) (the “Indemnification Basket”), after which
point Seller will be obligated to indemnify Buyer Indemnified Parties from and
against all further Losses in excess of the Indemnification Basket.
(iii)    Except as set forth in Section 7.1(b)(iv), the maximum amount for which
Seller will be liable in the aggregate under Section 7.1(a)(i) will not exceed
Two Million Five Hundred Thousand dollars ($2,500,000) (the “Indemnification
Cap”).
(iv)    Notwithstanding Sections 7.1(b)(ii), 7.1(b)(iii) and 7.1(c), Losses in
connection with or arising out of any breaches or inaccuracies of any of the
Special Representations or Extended Representations will not be subject to the
Indemnification Cap but will instead be capped (when combined with all other
Losses) at an aggregate amount equal to the total amount of the Purchase Price
and Losses in connection with or arising out of any breaches or inaccuracies of
any Special Representations will not be subject to the Indemnification Basket.
(v)    Notwithstanding anything herein to the contrary, with respect to the
indemnification obligation contained in Section 7.l(a)(v), if, following the
Closing, a valid CIE Claim is presented to Gateway or the Company, then the
Seller, either prior to or within 30 days following the end of such fiscal
quarter in which Gateway is required by SAP to establish a reserve for such CIE
Claim, if the indemnity obligations of Seller are not eligible or sufficient to
offset such reserves for SAP purposes, will provide collateral in such form and
in such amount as is necessary for Gateway to treat such collateral as a
subrogation recovery under SAP in an amount equal to such

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uncovered reserves. The Buyer agrees to cause Gateway to establish and maintain
such reserves as are reasonably recommended by the Seller.
(c)    Subject to the limitations set forth in this Article VII, and the
expiration of representations and warranties of Buyer as provided in Article VI,
Buyer agrees to indemnify and hold harmless Seller, its Affiliates (excluding,
following the Closing, the Company), and their respective directors, officers,
shareholders, partners, members and employees and their heirs, successors and
permitted assigns (collectively, “Seller Indemnified Parties”) from, against and
in respect of any Losses imposed on, sustained, or incurred or suffered by any
of Seller Indemnified Parties, whether in respect of Third Party Claims, claims
between Seller, on the one hand, and Buyer, on the other hand, or otherwise,
directly or indirectly resulting from, in connection with or arising out of:
(i)    the inaccuracy or any breach of the representations and warranties of
Buyer contained in this Agreement or in any Transaction Agreement; it being
understood that for purposes of this Section 7.1(c), any qualifications relating
to materiality, including the term “Buyer Material Adverse Effect”, contained in
any such representation or warranty will be disregarded for purposes of
determining whether such representation or warranty was breached or was
inaccurate; and
(ii)    any breach or failure by Buyer to perform any of its covenants or
obligations contained in this Agreement or in any Transaction Agreement.
(d)    If the amount of any Loss suffered or incurred by a Seller Indemnified
Party, at any time subsequent to the making of an indemnity payment in respect
thereof, is reduced by recovery, settlement or otherwise under or pursuant to
any insurance coverage, or pursuant to any claim, recovery, settlement or
payment by or against any other Person, the amount of such reduction, less any
costs, expenses or premiums incurred in connection therewith, will promptly be
repaid by Seller Indemnified Party to Buyer. Seller Indemnified Parties will use
commercially reasonable efforts to recover from insurance policies or other
applicable sources of recovery the maximum portion of any Losses of such Seller
Indemnified Party. Upon making any indemnity payment, Buyer will, to the extent
of such indemnity payment, be subrogated to all rights of Seller Indemnified
Party against any third party in respect of the indemnifiable Loss to which the
indemnity payment relates; provided, however, that until Seller Indemnified
Party recovers full payment of its indemnifiable Loss, any and all claims of
Buyer against any such third party on account of said indemnity payment is
hereby made expressly subordinated and subjected in right of payment to Seller
Indemnified Party's rights against such third party. Without limiting the
generality or effect of any other provision hereof, each such Seller Indemnified
Party and Buyer will duly execute upon request all instruments reasonably
necessary to evidence and perfect the above described subrogation and
subordination rights.
SECTION 7.2 Indemnification Notice Procedures.
(a)    A Person entitled to indemnification hereunder pursuant to Section 7.1
(an “Indemnified Party”), including pursuant to any Third Party Claim which
might give rise to indemnification pursuant to Section 7.1, will provide prompt
written notice (the “Indemnification Notice”) to the Party from whom
indemnification is sought (the “Indemnifying Party”) of any claim or demand that
it may have pursuant to Section 7.1; provided, that in the event such
Indemnification Notice relates to a Third Party Claim, the Indemnified Party
will provide an Indemnification Notice to the Indemnifying Party with respect
thereto within fifteen (15) days following such Indemnified Party's receipt of
written notice of such Third Party Claim. Any delay in delivering an
Indemnification Notice will not affect the indemnification provided hereunder
except to the extent the Indemnifying Party will have been materially prejudiced
as a result of such delay. An Indemnification Notice will contain a brief
summary of the facts underlying or related to such claim to the extent then
known by the Indemnified Party and true, correct and complete copies of any
correspondence, notices or pleadings (if a Third Party Claim); provided, that an
Indemnification Notice need not state the amount of Losses that the Indemnified
Party believes it has incurred or suffered relating to such claim. The
Indemnified Party will use, and will cause each of its Affiliates to use,
commercially reasonable efforts to mitigate any Losses upon and after becoming
aware of any facts, matters, failures or circumstances that would reasonably be
expected to result in any Losses that are indemnifiable hereunder.
Notwithstanding anything contained herein to the contrary in no event will any
Party be liable to the other Party for consequential or punitive damages arising
under this Agreement.

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(b)    At any time after an Indemnified Party has delivered an Indemnification
Notice, such Indemnified Party in his, her or its discretion may supplement or
amend such Indemnification Notice by delivery of any correspondence, notice or
other information relating to the claim covered by the original Indemnification
Notice. In addition, at any time after an Indemnified Party has delivered a
Indemnification Notice with respect to a claim other than a Third Party Claim,
such Indemnified Party in its discretion may deliver a notice which attaches the
original Indemnification Notice, sets forth a summary in reasonable detail of
the facts underlying or relating to such claim to the extent then known by the
Indemnified Party, includes a statement demanding indemnification from the
Indemnified Party and includes a statement of the amount of Losses for which the
Indemnified Party seeks indemnification at that time (a “Demand Notice”). The
Indemnifying Party will have fifteen (15) Business Days from the date on which
the Indemnified Party delivers a Demand Notice during which to notify the
Indemnified Party in writing of any objections it has to the Indemnified Party's
notice or claims for indemnification. If the Indemnifying Party does not deliver
such written notice of objection to such Demand Notice within such fifteen (15)
Business Day period, the Indemnifying Party will be deemed to have accepted the
claim as set forth in the Demand Notice. If the Indemnifying Party accepts the
claim as set forth in the Demand Notice, it will have fifteen (15) Business Days
from the date of acceptance to pay such claim and if the Indemnifying Party
rejects the claim, the Indemnified Party will be entitled to initiate an Action
to seek enforcement of its rights to indemnification under this Agreement. The
Indemnifying Party will have no right to participate in or control any claim
that is not a Third Party Claim.
SECTION 7.3 Third Party Claims.
(a)    The Indemnified Party agrees to give the Indemnifying Party notice in
writing of the assertion of any claim or demand made by, or any other Action
instituted by, any Person not a Party to this Agreement (a “Third Party Claim”)
in respect of which indemnity may be sought under Section 7.1 in accordance with
the notice procedures set forth in Section 7.2; provided, however, that any
delay in delivering any Indemnification Notice will not affect the
indemnification provided hereunder, except to the extent the Indemnifying Party
will have been materially prejudiced as a result of such delay. From and after
the delivery of a Indemnification Notice with respect to a Third Party Claim,
the Indemnified Party will deliver to the Indemnifying Party, within ten (10)
Business Days after the Indemnified Party's receipt thereof, true, correct and
complete copies of all material notices and documents (including court papers)
received by the Indemnified Party relating to the Third Party Claim. Any CIE
Claim shall be considered a Third Party Claim for purposes of the procedures set
forth in this Section 7.3, it being the intent of the parties that Seller will
assume the defense and settlement of any CIE Claim; provided that in such event,
Seller will use reasonable best efforts not to create any bad faith exposure for
Buyer, and, for the avoidance of doubt, if any such exposure is created that
results in Losses to any of the Buyer Indemnified Parties, Seller will indemnify
Buyer Indemnified Parties for such Losses pursuant to Section 7.1(a)(ii).
(b)    (i)    With respect to a Third Party Claim, the Indemnifying Party will
be entitled to participate in the defense thereof and, if it so elects, to
assume the defense thereof, unless such Third Party Claim is reasonably likely
to materially and adversely affect the Indemnified Party and/or the Indemnified
Party's Affiliates other than as a result of monetary damages. Unless the
Indemnified Party will have notified the Indemnifying Party of the existence of
the condition set forth in the preceding sentence, the Indemnifying Party will
have thirty (30) days (or such lesser number of days set forth in the
Indemnification Notice as may be required by any Governmental Entity, any court
or arbitration proceedings, or any regulatory inquiry or investigation) from
receipt of the Indemnification Notice with respect to a Third Party Claim (the
“Defense Notice Period”) to notify the Indemnified Party of its election to
assume the defense of such Third Party Claim. All Losses incurred by the
Indemnified Party prior to any assumption by the Indemnifying Party of the
defense of a Third Party Claim will be reimbursed by the Indemnifying Party to
the extent the Indemnifying Party is required to indemnify and hold harmless the
Indemnified Party from, against and in respect of Losses incurred or suffered by
the Indemnified Party to the extent arising from such Third Party Claim. If the
Indemnifying Party notifies the Indemnified Party within the Defense Notice
Period that it elects to defend such Third Party Claim, it will have the right
to so defend at its expense, with counsel selected by the Indemnifying Party
that is reasonably acceptable to the Indemnified Party. Once the Indemnifying
Party has duly assumed the defense of a Third Party Claim, the Indemnified Party
will have the right, but not the obligation, to participate in the defense
thereof, including the opportunity to participate in any discussions or
correspondence with any Governmental Entity, and to employ counsel separate from
the counsel employed by the

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Indemnifying Party. The Indemnified Party will participate in any such defense
at its own expense unless (A) the Indemnifying Party and the Indemnified Party
are both named parties to the proceedings and a Governmental Entity, arbitrator
or arbitration panel, as applicable, with jurisdiction over the proceedings at
issue will have determined that representation of both parties by the same
counsel would be inappropriate due to actual or potential differing interests
between them or the availability to the Indemnified Party of one or more
defenses or counterclaims that are inconsistent with one or more of those that
may be available to the Indemnifying Party in respect thereof or (B) the
Indemnified Party assumes the defense of a Third Party Claim after the
Indemnifying Party has failed to diligently pursue a Third Party Claim it has
assumed, and in the case of (A) or (B), all such expenses incurred by the
Indemnified Party in connection with such participation will be borne by the
Indemnifying Party. Each Party will reasonably cooperate in the defense or
prosecution of a Third Party Claim. Such cooperation will include the retention
and, upon the Indemnifying Party's request, the provision to the Indemnifying
Party of records and information which are reasonably relevant to such Third
Party Claim, and making employees available on a mutually convenient basis to
provide additional information and explanation of any material provided
hereunder.
(ii)    In the event the Indemnifying Party (x) elects not to defend the
Indemnified Party against a Third Party Claim, whether by not giving the
Indemnified Party timely notice of its desire to so defend or otherwise; (y) is
not entitled to defend the Third Party Claim as a result of the Indemnified
Party's election to defend the Third Party Claim as provided in Section
7.3(b)(i); or (z) after assuming the defense of a Third Party Claim, fails to
conduct the defense of such Third Party Claim in a reasonably diligent manner
within twenty (20) days after receiving written notice from the Indemnified
Party to the effect that the Indemnifying Party has so failed, the Indemnified
Party will have the right but not the obligation to assume its own defense; it
being understood that the Indemnified Party's right to indemnification for such
Third Party Claim will not be adversely affected by assuming the defense of such
Third Party Claim.
(iii)    Whether or not the Indemnifying Party will have assumed the defense of
a Third Party Claim, the Indemnifying Party will have no liability with respect
to any compromise or settlement of such claims effected without its written
consent (which consent may not be unreasonably withheld or delayed), and the
Indemnifying Party may not consent to the entry of judgment, admit any liability
with respect to, or settle, compromise or discharge, such Third Party Claim
without the Indemnified Party's prior written consent unless (A) there is no
finding or admission of any violation of applicable Requirements of Law and no
effect on any other claims that may be made against the Indemnified Party or any
of its Affiliates; (B) there is no imposition of an Order that could restrict
the future activity of the Indemnified Party or its Affiliates; and (C) the sole
relief provided is monetary damages that are concurrently paid in full by the
Indemnifying Party and a full and complete release is provided to the
Indemnified Party and its Affiliates.
SECTION 7.4 Survival. The indemnities provided in this Agreement will survive
the Closing; provided, however, that the indemnities provided under Section
7.1(a)(i) and Section 7.1(b)(i) will terminate when the applicable
representation or warranty terminates pursuant to Article VI, except as to any
item as to which the Indemnified Party will have, before the expiration of the
applicable period, previously delivered an Indemnification Notice satisfying the
content requirements of Section 7.2(a). For the avoidance of doubt, the delivery
by the Indemnified Party of one or more supplements or amendments to an
Indemnification Notice or of a Demand Notice as contemplated by Section 7.2(b)
will not be (a) deemed the delivery of a new Indemnification Notice or the
revocation of the original Indemnification Notice for purposes of this Section
7.4; and (b) will not alter or undermine the timeliness of the original
Indemnification Notice for purposes of Section 7.2(a).
SECTION 7.5 Indemnification Payments; Characterization. All payments made by an
Indemnifying Party to an Indemnified Party in respect of any claim pursuant to
this Article VII or Article VIII will be (a) made by wire transfer of
immediately available funds to an account designated in writing by the relevant
indemnified party and (b) treated as adjustments to the Purchase Price for Tax
purposes to the extent such characterization is proper and permissible under
applicable Requirements of Law.
ARTICLE VIII

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TAX MATTERS
SECTION 8.1 Tax Indemnity.
(a)    Seller will indemnify and hold harmless the Buyer Indemnified Parties
from and against any and all Taxes imposed on the Transferred Companies for any
Pre Closing Tax Years, except to the extent such Taxes have been properly
reserved for on the books of the appropriate Transferred Company(ies) as of the
Closing Date or the liability for such Taxes is otherwise disclosed on the
Disclosure Schedule hereto; provided, however, that Seller will have no
liability to Buyer hereunder until such Taxes impose Tax liability on the
Transferred Companies in excess of DTAs less DTLs. Notwithstanding the
foregoing, if any such Tax-related liability requires Buyer to make a cash
payment in respect thereof, the forgoing indemnification by Seller in this
Section will apply in full force, provided, however, that if such Tax-related
liability generates a Tax credit for use with respect to the same year with
respect to which the cash payment is due or any prior year, then the foregoing
indemnification by Seller in this Section will apply in full force only to the
extent that such Tax-related liability exceeded any such Tax credit; provided,
further, without duplication of any effect of the treatment of DTAs and DTLs
under Section 2.3(b) hereof, that if such Tax-related liability generates a Tax
credit that is used in any future year, the Buyer will make a cash payment to
Seller in respect thereof when it is used. With respect to any Tax liability
that did not give rise to indemnity solely because it did not exceed the total
DTAs less total DTLs, the DTAs thereafter will be deemed reduced in the amount
of such liability, and no amount shall be due or payable with respect to the
amount of DTAs reduced at such time or any time thereafter under Section
2.3(b)(viii) hereof. Buyer will be liable for and will indemnify and hold
harmless Seller from and against (A) any and all Taxes imposed on the
Transferred Companies for any Post Closing Tax Years and (B) any Taxes imposed
on the Transferred Companies for any Pre-Closing Tax Years to the extent such
Taxes are reserved on the books of the appropriate Transferred Company(ies) as
of the Closing Date or are otherwise disclosed on the Disclosure Schedule
hereto.
(b)    For purposes of determining the liability of Seller and Buyer pursuant to
Section 8.1(a) with respect to Taxes (other than Transfer Taxes) that are
payable for a taxable period that begins before the Closing Date and ends after
the Closing Date (a “Straddle Period”), the portion of any such Tax that is
allocable to the Pre Closing Tax Years will be in the case of (i) Taxes imposed
on a periodic basis or otherwise measured by the level of any item deemed to be
the amount of such Taxes for the entire period (or, in the case of such Taxes
determined on an arrears basis, the amount of such Taxes for the immediately
preceding period), multiplied by a fraction the numerator of which is the number
of calendar days in the period ending on the Closing Date and the denominator of
which is the number of calendar days in the entire period irrespective of the
lien or assessment date of such Taxes; (ii) Taxes imposed on or measured by
income, gross receipts, wages, expenses or other similar periodic measures or
imposed on sales, assignments or any other transfers of any property deemed
equal to the amount which would be payable if the taxable year ended with the
Closing Date (based on an interim closing of the books as of the Closing); and
(iii) Taxes imposed on the basis of premium deemed equal to the amount which
would be payable on the basis of the amount of the premium written as of the
Closing. The portion of any Tax not allocable to the Pre Closing Tax Years in
accordance with the foregoing will be allocable to the post Closing tax years.
(c)    Notwithstanding any other provision in this Agreement to the contrary,
(i) to the extent Seller or any Affiliate of Seller (other than the Transferred
Companies) has paid estimated Taxes that are attributable to the income, gain,
business or activities of the Transferred Companies and prior to the Closing
Date Seller has not been reimbursed for such expenses and such estimated Taxes
are actually applied to the Tax account of the Transferred Companies, Seller's
liability for Taxes pursuant to this Agreement will be reduced by the amount of
such payments, and (ii) Seller will not be liable for any Tax to the extent such
Tax is reflected on the Closing SAP Balance Sheet.
SECTION 8.2 Preparation and Filing of Tax Returns.
(a)    Seller will cause the Transferred Companies (at the expense of Seller) to
prepare or cause to be prepared in a manner consistent with past practice and
file or cause to be filed on a timely basis all Tax Returns for taxable years
that end on or before the Closing Date. With respect to any Tax Return for 2011
required to be filed or caused to be filed by Seller with respect to the
Transferred Companies pursuant to this Section 8.2(a), Seller will (regardless
of whether such Tax Return is required to be provided to Buyer pursuant to
Section 8.2(c)) provide Buyer and its authorized representatives with a copy of
such completed Tax Return and a statement certifying and

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setting forth the calculation of the amount of Tax shown on such Tax Return,
together with appropriate supporting information and schedules at least twenty
(20) Business Days prior to the due date (including any extension thereof) for
the filing of such Tax Return, and Buyer and its authorized representatives will
have the right to review and comment on such Tax Return in accordance with the
provisions of Section 8.2(c) below.
(b)    Buyer will prepare or cause to be prepared, and file or cause to be filed
on a timely basis (i) all Tax Returns for the Transferred Companies for all
Straddle Periods, and (ii) all Tax Returns for the Transferred Companies for all
post Closing tax years. Tax Returns for a Straddle Period will be prepared in a
manner consistent with the Transferred Companies' past practices, except to the
extent otherwise required by applicable Law. The liability for any Taxes set
forth on a Straddle Period Tax Return will be determined in accordance with the
provisions of Section 8.1 above.
(c)    With respect to any Tax Return required to be filed or caused to be filed
by Seller, on the one hand, or Buyer, on the other hand, pursuant to Section
8.2(a) and Section 8.2(b) with respect to the Transferred Companies (such Party,
the “Filing Party”) and as to which an amount of Tax is allocable to the Party
that is not the Filing Party (the “Tax Indemnifying Party”) pursuant to Section
8.2(a) or Section 8.2(b), the Filing Party will provide the Tax Indemnifying
Party and its authorized representatives with a copy of such completed Tax
Return and a statement certifying and setting forth the calculation of the
amount of Tax shown on such Tax Return that is allocable to such Tax
Indemnifying Party, together with appropriate supporting information and
schedules at least thirty (30) Business Days prior to the due date (including
any extension thereof) for the filing of such Tax Return, and such Tax
Indemnifying Party and its authorized representatives will have the right to
review and comment on such Tax Return, prior to the filing of such Tax Return
and will provide to the Filing Party written notice of any objections it has
with respect to such Tax Returns (a “Tax Dispute”) no later than ten (10)
Business Days prior to the date when such Tax Return must be filed. In the event
of any such objections the relevant Parties will in good faith attempt to
resolve such dispute for a period of five (5) Business Days following the date
on which the Filing Party was notified of the Tax Dispute; provided, that if
such dispute is not settled by such date (the “Tax Dispute Date”) the Parties
will submit all such disputed matters to an independent and mutually selected
nationally recognized accounting firm or law firm (the “Tax Referee”), within
five (5) Business Days after the Tax Dispute Date. The decision by the Tax
Referee will be final and binding on the Parties with respect to how any such
Tax Return should be filed. Notwithstanding anything in this Agreement to the
contrary, the fees and expenses relating to the Tax Referee will be paid equally
by each Party to such Tax Dispute. If the Tax Referee has failed to render a
decision by the date that is three (3) days prior to the date on which the
disputed Tax Return must be filed then such Tax Return will be filed in the
manner consistent with the Tax Indemnifying Party's position; provided, however,
that if the Tax Referee renders a final decision that differs from the position
advocated by the Tax Indemnifying Party, such Tax Returns will be amended within
a period not to exceed ninety (90) days after the Tax Referee's final decision
to reflect the final determination reached by the Tax Referee and the Tax
Indemnifying Party will reimburse the Filing Party for any additional Taxes that
the Tax Indemnifying Party is required to pay pursuant to Section 8.1.
(d)    Payment of any amounts due under this Article VIII in respect of Taxes
will be made: (i) except to the extent that there is a Tax Dispute or that a
matter relating to Taxes is being contested with a Taxing Authority, at least
five (5) Business Days before the due date of the applicable estimated or final
Tax Return required to be filed by the Filing Party that reports a Tax liability
for which a Tax Indemnifying Party is liable pursuant to this Agreement; and
(ii) with respect to a Tax Dispute or any matter relating to Taxes which are
being contested with a Taxing Authority, within three (3) Business Days after
the following: (A) an agreement between Seller, on the one hand, and Buyer, on
the other hand, that an indemnity amount is payable; (B) a Final Determination
having been made by a Taxing Authority; or (C) in the event of a Tax Dispute, a
final determination by the Tax Referee. If liability under this Article VIII is
in respect of an expense relating to the contest of a Tax matter, payment of any
amounts due under this Article VIII will be made as of the time when the payment
of the corresponding Tax is due pursuant to the immediately preceding sentence.
SECTION 8.3 Tax Refunds. Rights and benefits relating to all credits or refunds
of Tax liabilities of the Transferred Companies no matter how secured (including
credits for overpayment of estimated Taxes) arising from or relating to any Pre
Closing Tax Years or a liability for Tax for which Seller has provided an
indemnity under

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Section 7.1(b) will remain with and be for the benefit of Seller, and Buyer will
pay to Seller the amount of any such Tax refund or credit against Taxes received
by Buyer or by the Transferred Companies plus any overpayment interest accruing
from the date the corresponding Tax liability was paid. However, to the extent
that a credit or a Tax refund of a Tax arising from or relating to any Pre
Closing Tax Years is attributable to the carryback of a Post Closing Tax Year
Tax attribute, such Tax Refund or credit will be the property of Buyer.
SECTION 8.4 Tax Notice; Tax Controversies. Seller, on the one hand, and Buyer,
on the other hand, will provide to each other notice within five (5) Business
Days of receipt of any notice of deficiency, proposed adjustment, assessment,
audit, examination or other administrative or court proceeding, suit, dispute or
other claim (a “Tax Claim”) in which a Taxing Authority makes or proposes to
make a Tax adjustment to any Tax period which includes any period up to and
including the Closing Date. Seller will control the conduct of any Tax Claim
that: (i) could adversely affect the Taxes of Seller or any Affiliate thereof or
(ii) could result in Seller being liable for any amount of Taxes or losses
related thereto, either under the Law or pursuant to this Agreement (a “Seller
Tax Claim”), but only to the extent that such Seller Tax Claim is severable from
other Tax Claims which are not Seller Tax Claims. Buyer will control all other
proceedings. With respect to any Tax Claim, the Party not controlling the
proceeding of such Tax Claim or its representative will (to the extent permitted
by Law) have the right, at its expense, to participate in any such Tax Claim.
The Parties agree that they will not settle, compromise or agree to any Tax
adjustment which affects or could affect any other Party's Tax liability without
the prior written consent of such other Party, which consent may not be
unreasonably withheld; provided, that Seller will have the right to settle or
compromise any such proceedings without the consent of Buyer to the extent such
settlement or compromise will not adversely affect the Tax liability of Buyer or
any Affiliate thereof (including the Transferred Companies) after the Closing
Date, and Buyer will have the right to settle or compromise any such proceedings
without the consent of Seller to the extent such settlement or compromise will
not adversely affect the Tax liability of Seller or any Affiliate thereof prior
to the Closing Date.
SECTION 8.5 Cooperation and Controversies.
(a)    Seller, on the one hand, and Buyer, on the other hand, will reasonably
cooperate, and will cause their respective Affiliates, agents, auditors,
representatives, officers and employees reasonably to cooperate, in preparing
and filing all Tax Returns (including amended returns and claims for refund),
including maintaining and making available to each other all records necessary
in connection with Taxes and with respect to any Tax Claim, which cooperation
will include but not be limited to (i) providing all relevant information that
is available to Buyer, Seller and/or the Transferred Companies, as the case may
be, with respect to such Tax Claim; (ii) making personnel available at
reasonable times; and (iii) preparation of responses to requests for
information; provided, that the foregoing will be done in a manner so as to not
unreasonably interfere with the conduct of business by Buyer, Seller or the
Transferred Companies, as the case may be. None of Seller or Buyer or the
Transferred Companies will dispose of any Tax Returns, Tax schedules, Tax work
papers or any books or records unless it first offers in writing to the other
Parties the right to take possession of such materials at the sole expense of
such Party or Parties that accept that offer, and if any other such Party fails
to accept such offer within fifteen (15) Business Days of the offer being made
or if an offer is accepted and the offeree fails to take possession within
thirty (30) Business Days of the date on which the offer is made. Any
information obtained under this Section 8.5 will be kept confidential, except as
may be otherwise necessary in connection with the filing of Tax Returns or
claims for refund or with respect to any Tax Claim.
(b)    Within 180 days after the Closing Date, Buyer will cause the Transferred
Companies to prepare and provide to Seller a package of Tax information
materials, including, without limitation, schedules and work papers (the “Tax
Package”) required by Seller to enable Seller to prepare and file all Tax
Returns required to be prepared and filed by Seller pursuant to Section 8.2(a)
and upon Seller's reasonable request, Buyer will provide to Seller any
additional information that may be requested by Seller. The Tax Package will be
prepared in good faith in a manner consistent with past practice.
SECTION 8.6 Transfer Taxes. Seller, on the one hand, and Buyer, on the other
hand, will each be liable for and will hold the other harmless against one half
of any Real Property transfer, sales, use, transfer, stock transfer, and stamp
taxes, any transfer, recording, registration and other fees, and any similar
Taxes which become payable as a

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result of the transactions contemplated by the Transaction Agreements
(collectively, “Transfer Taxes”). Buyer or Seller, as appropriate, will execute
and deliver all instruments and certificates necessary to enable the other Party
to comply with any filing requirements relating to any such Transfer Taxes.
SECTION 8.7 Code Section 338(h)(10) Election.
Neither party hereto will make an election under Section 338(h)(10) of the Code
and the Treasury Regulations promulgated thereunder and any corresponding
elections under applicable foreign, state or local tax law (individually and
collectively a “Section 338(h)(10) Election”) with respect to the purchase and
sale of the Shares pursuant to this Agreement.

ARTICLE IX

TERMINATION PRIOR TO THE CLOSING
SECTION 9.1 Termination of Agreement. This Agreement may be terminated at any
time prior to the Closing:
(a)    by Seller or Buyer in writing, if any Order will have been issued and
will have become final and nonappealable, or if any statute will have been
enacted, or if any rule or regulation will have been promulgated by any
Governmental Entity, that prohibits or restrains such Parties or Party from
consummating the transactions contemplated by this Agreement, and the Parties or
Party seeking to terminate this Agreement pursuant to this Section 9.1(a) will
have used commercially reasonable best efforts to cure such condition;
(b)    by Seller or Buyer in writing, if the Closing has not occurred on or
prior to March 31, 2013 (the “Termination Date”); provided, however, that the
right to terminate this Agreement under this Section 9.1(b) will not be
available to a Party whose failure to fulfill any obligation under this
Agreement has been the cause of or resulted in the failure of the Closing to
occur on or before such date; provided further, that if the Closing has not
occurred prior to the Termination Date because the conditions provided for in
Section 5.1(e) and Section 5.2(d) have not been satisfied because the WC
Reinsurer has not obtained the necessary licenses and authorizations but
applications for such licenses and authorizations have been filed and are then
pending, then the Termination Date will be extended until May 1, 2013, so long
as the reinsurance related to the WC Reinsurance Agreement can be made effective
as of the Effective Date without being considered retroactive under SAP, unless
otherwise agreed to by the Parties.
(c)    by Seller or Buyer, if there will have been a breach by Buyer or Seller,
respectively, of any of their respective representations, warranties, covenants
or obligations contained herein, which breach would result in the failure to
satisfy any condition set forth in Section 5.1 or Section 5.2, and in any such
case such breach will be incapable of being cured or, if capable of being cured,
will not have been cured on or prior to the earlier of (x) the Termination Date
and (y) the thirtieth (30th) calendar day following receipt of written notice
thereof by the Party alleged to be in breach; provided, however, that the right
to terminate this Agreement under this Section 9.1(c) will not be available to a
Party whose will then be in breach of this Agreement, which breach would result
in the failure to satisfy any condition set forth in Section 5.1 or Section 5.2;
or
(d)    at any time prior to the Closing, by mutual written consent of Seller and
Buyer.
SECTION 9.2 Effect of Termination; Survival. In the event of termination of this
Agreement as provided in Article IX:
(a)    this Agreement will forthwith become void and there will be no liability
on the part of any Party except (i) under the provisions of Sections 4.4,
4.11(a) and 9.2, and Article X, and any other Section of this Agreement which,
by its express provisions, survives the termination of this Agreement, or the
survival of which is necessary to fulfill the intended effect of any other
Section which, by its express provisions, survive the termination of this
Agreement

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and (ii) that nothing herein will relieve any Party from liability for any
breach of this Agreement prior to its termination; and
(b)    all filings, applications and other submissions made pursuant to the
transactions contemplated by this Agreement will, to the extent practicable, be
withdrawn from the Governmental Entity or other Person to which made.
ARTICLE X

GENERAL PROVISIONS
SECTION 10.1 Fees and Expenses. Whether or not the Closing may occur, except as
provided herein, each Party will pay such Party's own fees and expenses incident
to preparing for, entering into and carrying out this Agreement and the
transactions contemplated hereby.
SECTION 10.2 Notices. All notices and other communications given or made
pursuant hereto will be in writing and will be deemed to have been duly given or
made as of (a) in the case of personal delivery, when actually delivered; (b) in
the case of delivery by prepaid overnight courier with guaranteed next day
delivery, the day designated for delivery by such courier; (c) in the case of
delivery by registered or certified mail, postage prepaid, return receipt
requested, five (5) days after deposit in the mails; (d) in the case of
transmittal by facsimile, upon receipt by the sender of a printed confirmation
of transmittal; or (e) in the case of transmittal by electronic mail, upon
receipt by the sender of electronic confirmation of such transmittal, and in
each case will be addressed as follows (or at such other address, facsimile
number or e mail address for a Party as will be specified by like notice):
(a)    If to Buyer, to:
Atlas Financial Holdings, Inc.
150 Northwest Point Boulevard
Elk Grove Village, IL 60007
Attn: Scott Wollney
with a copy, which will not constitute notice to Buyer, to:

DLA Piper LLP (US)
203 N. LaSalle Street, Suite 1900
Chicago, Illinois 60601
Attn: David Mendelsohn
(b)    If to Seller, to:

Hendricks Holding Company, Inc.
690 Third Street, Suite 300
Beloit, WI 53511
Attn. Jeffrey W. Stentz

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And to

Karl Leo, VP and CLO
Hendricks Holding Company, Inc.
200 Randolph Ave, Ste 200
Huntsville, AL 53803

with a copy, which will not constitute notice to Hendricks, to:
Mark R. Goodman
Freeborn & Peters LLP
311 S. Wacker Drive, Suite 3000
Chicago, IL 60606

No party hereto may refuse service of any notice delivered hereunder.
Notwithstanding anything to the contrary set forth herein, if the
addressee/recipient rejects or otherwise refuses to accept the notice, or if the
notice cannot be delivered because of a change in address for which no notice
was given, then the notice will be effective upon the rejection, refusal, or
inability to deliver.
SECTION 10.3 Interpretation. This Agreement will be governed by the following
rules of interpretation: (a) when a reference is made in this Agreement to an
Article, Section, Schedule, or Disclosure Schedule, such reference will be to an
Article of, a Section of, or a Schedule or Disclosure Schedule to, this
Agreement unless otherwise indicated; (b) any fact or item disclosed in any
section of the Disclosure Schedule will be deemed disclosed in all other
sections of the Disclosure Schedule to which such fact or item may apply only if
the relevance of such disclosure is readily apparent from the text, document, or
information disclosed; provided, that the mere listing of a document or other
item will not be deemed adequate to disclose an exception to a representation or
warranty made herein (unless the representation or warranty pertains to the
existence of the document or other item itself); (c) the table of contents and
headings contained in this Agreement are for reference purposes only and will
not affect in any way the meaning or interpretation of this Agreement; (d)
whenever the words “include,” “includes” or “including” are used in this
Agreement, they will be deemed to be followed by the words “without limitation;”
(e) whenever the singular is used herein, the same will include the plural, and
whenever the plural is used herein, the same will include the singular, where
appropriate; and (f) references to “$” mean United States dollars.
SECTION 10.4 Entire Agreement; Third Party Beneficiaries.
(a)    This Agreement (including all exhibits and schedules hereto, and the
Disclosure Schedule), together with the other Transaction Agreements,
constitutes the entire agreement of the Parties with respect to the subject
matter contained herein and therein, and supersedes all prior agreements,
understandings, representations and warranties, both written and oral, between
the Parties with respect to such subject matter.
(b)    Except as otherwise provided in Article VII or VIII as respects
Indemnified Parties, the terms and provisions of this Agreement are intended
solely for the benefit of the Parties, and their respective successors and
assigns, and nothing in this Agreement is intended or will be construed to give
any other Person any legal or equitable right, remedy or claim under, or in
respect of, this Agreement or any provision contained herein.

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SECTION 10.5 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.
This Agreement will be interpreted and construed in accordance with the Laws of
the State of Illinois, without regard to its conflict of laws principles that
would require application of the Laws of a jurisdiction other than the State of
Illinois. Except as provided in Section 2.2(d), 2.3 and 8.2(c), the Parties
hereby irrevocably and unconditionally (a) submit to the exclusive jurisdiction
of any State or Federal Court sitting in the City of Chicago (any such court, a
“Chicago Court”), over any Action arising out of or relating to this Agreement;
(b) agree that service of any process, summons, notice or document by the means
specified herein will be effective service of process for any Action brought
against such Party in a Chicago Court; (c) waive any objection to the laying of
venue of any such Action brought in a Chicago Court has been brought in an
inconvenient forum; and (d) agree that final judgment in any such Action in a
Chicago Court will be conclusive and binding upon the Parties and may be
enforced in any other courts to whose jurisdiction the Party against whom
enforcement is sought may be subject, by suit upon such judgment. IN ADDITION TO
THE FOREGOING, EACH PARTY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A TRIAL BY
JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, AND EACH PARTY HEREBY ACKNOWLEDGES THAT SUCH WAIVER IS MADE WITH FULL
UNDERSTATING AND KNOWLEDGE OF THE NATURE OF THE RIGHTS AND BENEFITS WAIVED
HEREBY.
SECTION 10.6 Assignment. Neither this Agreement nor any of the rights, interests
or obligations of any Party will be assigned, in whole or in part, by operation
of law or otherwise by such Party without the prior written consent of the other
Party, and any such assignment that is not consented to will be null and void;
provided, however, that Buyer may (a) assign any or all of its rights and
interests hereunder to one or more of its Affiliates and (b) designate one or
more of its Affiliates to perform its obligations hereunder (in any or all of
which cases Buyer nonetheless will remain responsible for the performance of all
of its obligations hereunder). Subject to the preceding sentence, this Agreement
will be binding upon, inure to the benefit of, and be enforceable by, the
Parties and their respective successors and permitted assigns.
SECTION 10.7 Specific Performance. The Parties agree that irreparable damage
would occur in the event any of the provisions of this Agreement were not
performed in accordance with the terms hereof, including, without limitation,
the breach of any covenant under Section 4.11, and that, prior to the
termination of this Agreement pursuant to Section 9.1, the Parties will be
entitled to an injunction or injunctions to prevent breaches of this Agreement
by the other Party or to specific performance of the terms hereof in addition to
any other remedies at Law or in equity.
SECTION 10.8 Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable Requirements of Law, but if any provision
or portion of any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable Requirements of Law, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
SECTION 10.9 Amendment; Modification and Waiver. This Agreement may be amended,
superseded, cancelled, renewed or extended, and the terms hereof may be waived,
only by a written instrument signed by each of the Parties or, in the case of a
waiver, by the Party waiving compliance. No delay on the part of any Party in
exercising any right, power or privilege hereunder will operate as a waiver
thereof, nor will any waiver on the part of any Party of any right, power or
privilege, nor any single or partial exercise of any such right, power or
privilege, preclude any further exercise thereof or the exercise of any other
such right, power or privilege.
SECTION 10.10 Counterparts. This Agreement may be executed in one or more
counterparts, all of which will be considered one and the same instrument and
will become effective when one or more counterparts have been signed by each
Party and delivered to the other Party. Each counterpart may be delivered by
facsimile transmission or e mail (as a .pdf, .tif or similar uneditable
attachment), which transmission will be deemed delivery of an originally
executed counterpart hereof.

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SECTION 10.11 Attorney's Fees. The prevailing Party in any litigation or
arbitration relating to this Agreement will be entitled to recover its
reasonable attorneys' fees and costs from the other Party; provided, however,
that nothing herein will require the adjudicator to determine that either Party
is the prevailing Party.
SECTION 10.12 Interest. If either Party owes a payment to the other Party under
the terms of this Agreement and such payment is not paid within thirty (30) days
of the date the payment is due, then such payment shall accrue interest at the
rate of eight and one-half percent (8.5%) per annum, compounding monthly.

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be signed by their
respective officers thereunto duly authorized as of the Date of this Agreement.
SELLER:

HENDRICKS HOLDING COMPANY, INC.

By:    
Name:
Title:
BUYER:

ATLAS FINANCIAL HOLDINGS, INC.
By:    
Name:
Title:
 

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Exhibit A - Holdback Note Terms

Interest Rate    4.5% per annum; rate increases to 8.5% per annum in the event
of a default
Principal Amount    Initially equal to the Redemption Payment. To be adjusted
annually based on future Loss & LAE development. Principal will be reduced $1.00
for every $1.00 of Loss Development Increase. Principal will be increased $1.00
for each dollar of such Loss Development Decrease to the extent of any prior
Loss Development Increase and thereafter will be increased $0.75 for every $1.00
of Loss Development Decrease.

Maturity Date    The earlier of (a) December 31, 2017 and (b) thirty days after
written notice from Buyer
Final Adjustment    Upon the Maturity Date, to settle remaining loss development
exposure, based on the most recent Holdback Reserve Estimate determined by an
Independent Expert

 

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Exhibit B
Form of WC Reinsurance Agreement

 

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Exhibit C
Purchase Price Calculation and Payment Methodology

 

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Exhibit D
Buyer Note Terms

Interest Rate    4.5% per annum; rate increases to 10% per annum after the first
year, paid quarterly.
Principal Amount    As set forth in Section 2.3(c) of the Agreement
Maturity Date    
Due and payable by Buyer eighteen (18) months after the issuance of the Buyer
Note.

Mandatory Pre-Payments    
If, on a quarterly basis, it is determined that cash and cash equivalents held
of the Buyer exceed $2,000,000, Buyer will make a principal payment equal to the
difference between (a) the cash and cash equivalents of the Buyer as of such
date, and (b) $2,000,000.

Optional Pre-Payments    
Buyer may elect to make a principal payment in any amount at any time prior to
the Maturity Date.

 

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Exhibit E
Proposed Final DTAs and DTLs