Exhibit 10.2
Dated 31st August 2005

         
MMO EU LIMITED
    (1 )
 
       
NYMAGIC, INC.
    (2 )
 
       
THE PURCHASERS
    (3 )
 
       
and
       
 
       
MMO UK LIMITED
    (4 )

 
TAXATION DEED
 

 

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THIS DEED is made on 31 August 2005 BETWEEN:

(1)   MMO EU LIMITED (registered number 03314910) whose registered office is at
51 Eastcheap, London EC3M 1JP (the “Seller”);   (2)   NYMAGIC, INC. a company
incorporated under the laws of New York whose registered office is at 919 Third
Avenue, 10th Floor, New York, NY 10022 (“the Guarantor”);   (3)   The persons
whose names and registered offices are set out in Schedule 1 hereto (“the
Purchasers”); and   (4)   MMO UK LIMITED (registered number 03266637) whose
registered office is at 51 Eastcheap, London EC3M 1JP (“the Company”).

WHEREAS this Deed is entered into pursuant to an agreement of even date herewith
between the Purchasers, the Seller, the Guarantor and the Company for the sale
and purchase of the issued share capital of the Company (“the Share Sale
Agreement”):
IT IS HEREBY AGREED as follows:

1   Interpretation   1.1   Words and expressions defined in clause 1 of the
Agreement shall (unless the context otherwise requires) have the same meaning
for the purposes of this Deed.   1.2   In this Deed:       “2005 Accounting
Period” means the Accounting Period of the Company ending 31 December 2005;    
  “Accounting Period” has the meaning ascribed to it in section 12 ICTA 1988;  
    “Accounting Requirements” in respect of any person, means any accounting
requirements imposed by law, statements of standard accounting practice,
financial reporting standards and any other accounting standards issued by any
body from time to time charged with developing and/or applying the generally
accepted accounting principles applying to that person, and any other accounting
principle observance of which by that person is required in order to ensure its
accounts, and those of any other person with which its accounts are
consolidated, comply with applicable law;       “Actual Taxation Liability” in
relation to any person, means a liability of that person to make a payment of
Taxation or to make a payment in respect of Taxation where such liability is
imposed by law, whether or not such Taxation is also or alternatively chargeable
against or attributable to any other person;       “business day” means a day
(other than a Saturday and Sunday) when banks are open for the transaction of
normal banking business in London;       “Corporation Tax Payments” means an
installment payment as described in Regulation 5 of the Corporation Tax
(Instalment Payment) Regulations 1998;       “Default Rate” means 2 per cent
above the base rate of Barclays Bank plc or, in the absence of such base rate,
the base rate of such other of the high street clearing banks as the Purchasers
shall select and of which the Purchasers’ Representative shall give notice to
the Seller;       “Escrow Account” means the interest bearing deposit account at
the Royal Bank of Scotland, 62-63 Threadneedle Street, PO Box 142, London, EC2R
8LA to be opened and held in the name of Norton Rose in accordance with the
terms of the Escrow Letter;       “Escrow Letter” means the letter addressed to
Clyde & Co relating to the running of the Escrow Account signed by the Seller,
the Purchasers and the Guarantor;

 

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    “Event” means any event, occurrence, transaction, act or omission (or any
deemed event, occurrence, transaction, act or omission) including, for the
avoidance of doubt, the sale and purchase of the Sale Shares pursuant to the
Agreement;       “Group Relief Relief” means any Relief which is eligible for
relief from corporation tax pursuant to the Group Relief Provisions;      
“Group Relief Provisions” means Chapter IV, Part X ICTA 1988       “ICTA 1988”
means the Income and Corporation Taxes Act 1988;       “Instalment Payment”
means any instalment payment as described in Regulation 5 of the Corporation Tax
(Instalment Payment) Regulations 1998       “Notice of Liability” means any
assessment, notice, demand or other document issued or action taken by or on
behalf of any Taxation Authority, or any self-assessment return or amended
return, from which it appears that the Company is subject to, is sought to be
made subject to, or might become subject to, any Taxation Liability;       “Post
2005 Accounting Period” means any Accounting Period of the Company commencing on
or after 1 January 2006;       “Purchasers’ Representative” means such Purchaser
as both the Purchasers shall from time to time, by written notice to the Seller,
appoint to act as the representative of the Purchasers for the purposes of this
Deed;       “Relevant Purchaser” means such Purchaser or such member of such
Purchaser’s group (as defined by section 413 of ICTA 1988) which has utilised or
sought to utilise Losses or Excess Losses pursuant to the provisions of
Schedule 5;       “Relevant Proportions” means the percentage set out in
Schedule 1;       “Relief” means any loss, allowance, exemption, set-off,
deduction, credit or other relief relating to any Taxation or to the computation
of income, profits or chargeable gains for the purposes of any Taxation;      
“Taxation” means:

  (i)   all forms of tax, levy, duty, charge, impost, withholding or other
amount whenever created or imposed and whether of the United Kingdom or
elsewhere, payable to or imposed by any Taxation Authority; and     (ii)   all
charges, interest, penalties and fines incidental or relating to any Taxation
falling within (i) above or which arise as a result of the failure to pay any
Taxation on the due date or to comply with any obligation relating to Taxation;

    “Taxation Authority” means the HM Revenue and Customs, or any other revenue,
customs, fiscal, governmental, statutory, state, provincial, local governmental
or municipal authority, body or person, whether of the United Kingdom or
elsewhere;       “Taxation Liability” in relation to any person, means any
Actual Taxation Liability of that person or any other liability of, or amount
incurred by, or charged against, that person, in each case falling within any of
clauses 2.1.1 to 2.1.4 (inclusive);       “TCGA 1992” means the Taxation of
Chargeable Gains Act 1992.   1.3   References in this Deed to any person being
related to any other person for the purposes of any Taxation shall include any
case where, without limitation:

1.3.1   either person has control (within the meaning of any of sections 416,
767B(4) and 840 ICTA 1988) of the other person;

 

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1.3.2   those persons are connected within the meaning of section 839 ICTA 1988)
with each other;   1.3.3   there is a connection (within the meaning of section
87 Finance Act 1996) between such persons;   1.3.4   any other person has
control (as defined in clause 1.3.1) of, or is connected (as defined in clause
1.3.2) with those persons;   1.3.5   either person is the holding company of
that other person or is a subsidiary of either that other person or any other
person of which the other person is also a subsidiary (“holding company” and
“subsidiary” having the meanings ascribed to them by Companies Act 1985);  
1.3.6   either person is a direct or indirect participant in the management,
control or capital of that other person (for the purposes of Schedule 28AA ICTA
1988);   1.3.7   either person is such a person as is referred to in paragraph
2(1) of Schedule 28 Finance Act 2000 where the other person is the taxpayer
company as referred to in paragraph 1 of the said Schedule 28;   1.3.8   those
persons are associated for the purposes of section 42 Finance Act 1930; and/or  
1.3.9   those persons are members of the same group for any tax purposes.

1.4   The provisions of clauses 12.1 (alterations), 12.3 (notices), 12.5
(continuing effect), 12.8 (counterparts), 12.9 (applicable law) and 12.11
(successors and assigns) of the Agreement shall apply as if the same were set
out here in full, and as if references therein to “the Agreement” were
references to this Deed.   1.5   References to clauses and Schedules are (unless
the context otherwise requires) references to clauses of, and Schedules to, this
Deed. References in any Schedule to paragraphs are (unless the context otherwise
requires) references to paragraphs of that Schedule.   1.6   All obligations and
liabilities of each of the Purchasers or Relevant Purchasers under this Deed are
made or given on a several basis only.   2   Covenant by the Seller   2.1  
Subject to clause 3 the Seller hereby covenants with the Purchasers to pay to
the Purchasers their Relevant Proportions of an amount or amounts equal to each
of the following:   2.1.1   subject to clauses 2.1.3 and 2.1.4, any Actual
Taxation Liability of the Company arising as a result of, in respect of, or by
reference to:

  (a)   any Event occurring, or deemed for the purposes of any Taxation to
occur, on or before Completion which shall include any underwriting entered into
on or prior to Completion; or     (b)   any income, profits or chargeable gains
(not falling within (a) above) earned, accrued or received, or deemed for the
purposes of any Taxation to be earned, accrued or received, on or before, or in
respect of any period ending on or before, Completion; or     (c)   the
Company’s run-off of any underwriting activity (to the extent not falling within
(a) above) entered into on or prior to Completion.

2.1.2   any liability of the Company to pay or repay any other person (other
than any Taxation Authority) any amount under any agreement or other arrangement
entered into before Completion relating to:

  (a)   the surrender or allocation among any companies of any Relief;     (b)  
any election by one or more companies to treat a disposal or a gain to have been
made by one of those companies; or     (c)   value added tax (or the equivalent
in any other jurisdiction);

 

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2.1.3   any Actual Taxation Liability of the Company (not falling within clause
2.1.1) which is the liability to Taxation of any other person and for which the
Company is liable by reason of having been, at any time before Completion,
related to or ceasing as a result of the disposal of the Shares (or any
arrangements leading to such disposal) to be related to:

  (a)   that other person for the purposes of any Taxation;     (b)   any person
which is or has been at any time on or before Completion related to that other
person for the purposes of any Taxation; or     (c)   any other person which is
or has been at any time on or before Completion related to a person falling
within above (b) for the purposes of any Taxation; and

2.1.4   any reasonable costs and expenses properly incurred by the Purchasers or
the Company in connection with any such liability or amount as is referred to in
any of clauses 2.1.1 to 2.1.3 inclusive for which the Seller is liable, or with
any successful action taken by the Purchasers to recover any amounts due from
the Seller hereunder.   3   Limitations   3.1   The Seller shall not be liable
to make any payment under clause 2.1 in respect of any Taxation Liability of any
person to the extent that:

3.1.1  
   such Taxation Liability would not have arisen but for a change in the
Accounting Requirements applying to, or in any way affecting, that person,
introduced or having effect after Completion, other than a change which is
required in order to comply with the Accounting Requirements applying to that
person in each case as in force or having effect at Completion; or
  3.1.2  
   such Taxation Liability would not have arisen but for any act, omission or
transaction done, made or carried out by any one or more of the Purchasers, or
any company connected with any of the Purchasers and the Company or any of their
respective directors, employees or agents after Completion, where such act,
omission or transaction was not done, made or carried out:

  (i)   as required by law as it is in force at the date of the Agreement;    
(ii)   pursuant to a legally binding commitment of the Company created on or
before Completion; or     (iii)   in the ordinary course of business of the
Company as carried on immediately prior to Completion;

   
   provided that the presentation of any document for stamping where it is
required in order to register or enforce such document or where its production
is required by any Taxation Authority shall be treated as being required by law;
  3.1.3  
   such Taxation Liability arises or is increased as a result of any increase in
the rates of Taxation announced after Completion;
  3.1.4  
   such Taxation Liability would not have arisen or would have been reduced or
eliminated but for a failure on the part of the Company to make any claim,
election, surrender or disclaimer or give any notice or consent or do anything
after Completion the making, giving or doing of which was taken into account in
preparing the Accounts and details of which were provided to the Purchasers in
writing prior to Completion;
  3.1.5  
   such Taxation Liability would not have arisen but for a cessation of, or
change in the nature or conduct of, any trade carried on by the Company, being a
cessation or change occurring after Completion;
  3.1.6  
   such Taxation Liability has been discharged on or before Completion;

 

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3.1.7   such Taxation Liability is reduced or eliminated by any Relief under the
Group Relief Provisions being made available to the Company at no cost to the
Company, and without any payment being made in respect thereof by the Purchasers
under Schedule 4;   3.1.8   such Taxation Liability would not have arisen but
for any failure or delay by the Purchasers or the Company in paying over to any
Taxation Authority any payment previously made by the Seller in respect of a Tax
Liability; or   3.1.9   such Taxation Liability arises as a consequence of a
breach by the Purchasers of any of their obligations under this Deed.

3.2   No claim shall be brought by the Purchasers under clause 2 of this Deed
against the Seller unless notice in writing specifying such particulars, as are
available at the relevant time, and (where practicable) the anticipated amount
of such claim is given to the Seller not later than seven years after the date
of this Deed.   4   Rebate   4.1   Clause 4.2 shall apply where the Seller has
paid any amount due to the Purchasers under clause 2 in respect of any Taxation
Liability (in this clause 4, the “Relevant Payment”) and any one or more of the
Purchasers and the Company (in this clause 4, the “Relevant Recipient”) receives
(whether by way of actual receipt, credit, set-off or otherwise) from any other
person a payment in respect of such Taxation Liability (in this clause 4, the
“Relevant Receipt”).   4.2   The Purchasers agree with the Seller that, where
this clause 4.2 applies, they shall in their Relevant Proportions repay, or
cause to be repaid, to the Seller a sum equal to the lesser of:

4.2.1   the amount of the Relevant Receipt after deduction therefrom of the
aggregate of:

  (a)   the reasonable costs incurred by the Purchasers or the Relevant
Recipient in obtaining it (to the extent that such costs have not been
reimbursed pursuant to the indemnity given in clause 4.3); and     (b)   any
Actual Taxation Liability of the Relevant Recipient in respect of the Relevant
Receipt; and

4.2.2   the amount of the Relevant Payment (except so much of the Relevant
Payment as represents an amount payable by virtue of clause 6 (withholdings and
gross-up)).

4.3   If the Purchasers shall become aware of their actual or potential
entitlement or the actual or potential entitlement of the Company to any
Relevant Receipt, the Purchasers shall give or cause to be given written notice
thereof in accordance with clause 1.4 to the Seller as soon as reasonably
practicable after becoming so aware. If so requested by the Seller, and subject
to the Purchasers and/or the Company being indemnified to the reasonable
satisfaction of the Purchasers against all costs and expenses which may be
thereby incurred, the Purchasers shall severally take or cause to be taken such
action as is in their control (including collectively procuring that the Company
may take such action but without any Purchaser being obliged to take any action
which it is not able to do) as the Seller shall reasonably request to secure
receipt of the payment in question.   5   Conduct of Claims   5.1   If any one
or more of the Purchasers and the Company shall become aware of any Notice of
Liability which might give rise to a claim under this Deed, the Purchasers’
Representative shall, by way of covenant but not as a condition precedent to the
liability of the Seller hereunder, give or cause to be given written notice
thereof to the Seller as soon as reasonably practicable (and, in any event, in
the case of a Notice of Liability which requires an appeal to be made against it
or other action to be taken within a specified period of time, within ten
business days of becoming aware in reasonable detail thereof).   5.2   As
regards any such Notice of Liability, the Purchasers shall take or cause to be
taken such action as the Seller may, by written notice given to the Purchasers’
Representative, reasonably request to cause that Notice of Liability to be
withdrawn or to dispute, resist, appeal against, compromise or defend that
Notice of Liability and any determination in respect thereof, or to apply to
postpone (so far as legally

 

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    possible) the payment of any Taxation pending the determination of any
appeal, but subject to the Purchasers and the Company being indemnified to the
reasonable satisfaction of the Purchasers against all losses (including any
additional Taxation Liability of that person), interest, damages, expenses
thereby suffered or incurred by the Purchasers or the Company and provided that:

5.2.1   any request made by the Seller pursuant to this clause 5.2 shall be made
within a reasonable time of receipt by the Seller of any notice given to the
Seller in accordance with clause 5.1 (and, in any event, in the case of a Notice
of Liability which requires an appeal to be made or other action to be taken
within a specified period of time, (and provided that the Purchasers’
Representative has complied with its obligations under clause 5.1) not later
than five business days prior to the expiry of such specified period);   5.2.2  
where the Seller does not make any such request within the period referred to in
clause 5.2.1, the Purchasers and the Company shall (without prejudice to the
rights of the Purchasers under this Deed in respect of the Notice of Liability)
be free to take such action as they consider reasonable in the circumstances to
settle the relevant liability to which the Notice of Liability relates; and  
5.2.3   the Purchasers and the Company shall not be obliged to comply with any
request of the Seller which involves contesting any assessment of Taxation
before any court or any other appellate body (including any tribunal or court)
unless they have been advised in writing, at the expense of the Seller, by
either tax counsel of at least five years’ call or, if considered to be
appropriate by both the Seller and the Purchasers’ Representative, a leading
firm of accountants or lawyers, instructed by agreement between the Purchasers’
Representative and the Seller or, failing such agreement, in accordance with the
procedure set out in clause 5.3, that an appeal against such assessment is a
reasonable course of action to be taken;   5.2.4   save where the Seller
provides reasonably satisfactory indemnities therefor, neither the Purchasers
nor the Company shall be obliged to take any action which is likely to increase
their liability to taxation for any Accounting Period ending after Completion;  
5.2.5   the rights of the Seller under this clause 5.2 shall cease if either;

  (a)   in the opinion of the Purchasers’ Representative acting reasonably, the
Guarantor would not at the relevant time have the realisable resources to meet
the Actual Taxation Liability, the subject of the Notice of Liability and any
losses referred to in clause 5.2 unless security satisfactory to the Purchasers
is given to the Purchasers in respect thereof, or     (b)   if legal proceedings
are commenced with a view to the Guarantor’s winding-up, dissolution or
administration, or for the appointment of a receiver, administrator, trustee or
similar officer in respect of it or of any of its assets (otherwise than for the
purpose of its voluntary reconstruction or amalgamation).

5.3   If the Seller and the Purchasers’ Representative shall not have agreed
upon tax counsel or, if relevant a leading firm of accountants or lawyers within
14 days, such matter shall thereupon be referred to such leading counsel, firm
of accountants or firm of lawyers as the President for the time being of the Law
Society of England and Wales shall (at the request of either the Purchasers’
Representative or the Seller) nominate.   6   Withholdings and Gross-up   6.1  
All sums payable under this Deed by the Seller shall be paid free and clear of
all deductions or Withholdings whatsoever, save only as may be required by law.
  6.2   If, at any time, any applicable law, regulation or regulatory
requirement requires the Seller to make any deduction or withholding from any
sums payable to the Purchasers under this Deed, the amount so due shall be
increased to the extent necessary to ensure that, after the making of such
deduction or withholding, the Purchasers receive, on the due date for such
payment, a net sum equal to the sum which they would have received had no such
deduction or withholding been required to be made.   6.3   If the Seller is
required by law to make any deduction or withholding as referred to in clause
6.2, the Seller shall:

 

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6.3.1   make such deduction or withholding; and   6.3.2   pay the full amount
deducted or withheld to the relevant Taxation Authority in accordance with
applicable law, regulation or regulatory requirement.

6.4   If any amount paid or due to the Purchasers hereunder gives rise to any
Actual Taxation Liability, or would (but for the availability of any Relief)
give rise to an Actual Taxation Liability, in the hands of the Purchasers, then
the amount so paid or due (in this clause 6.4, “the net amount”) shall be
increased to an amount (in this clause 6.4, “the grossed-up payment”) which
(after subtraction of the amount of any Actual Taxation Liability which arises,
or would, but for the availability of any Relief, arise in the hands of the
Purchasers with respect to the grossed-up payment) shall equal the net amount,
provided that if any amount is initially paid on the basis that the amount due
is not taxable in the hands of the Purchasers or vice versa and it is
subsequently determined that it is or that it is not, such additional amounts
shall be paid to or by the Purchasers as shall place the Purchasers in the same
after-tax position as they would have been in if the amount due had not been
taxable in the hands of the Purchasers.   6.5   If, at any time after any
increased payment is made by the Seller as a consequence of the application of
clause 6.2, the Purchasers receive or are granted a credit against or remission
from any Taxation payable by them which they would not otherwise have received
or been granted, the Purchasers shall in their Relevant Proportions, to the
extent that they can do so without prejudicing the retention of the amount of
such credit or remission, reimburse the Seller with such amount as shall leave
the Purchasers (after such reimbursement) in no worse a position than they would
have been in had the circumstances giving rise to the increased payment not in
fact arisen. Such reimbursement shall be made not later than ten business days
after the Purchasers receive or are granted such credit.   7   Payment   7.1  
Where any amount is required to be paid by any person to the Purchasers under
clause 2 in respect of any Actual Taxation Liability, that person shall pay such
amount in cleared, immediately available funds on or before the date before the
last date on which the Taxation in question is due for payment to the relevant
Taxation Authority without incurring any penalty, fine or interest, or, if
later, seven business days following the date on which the Purchasers, in
accordance with clause 5, notify that person of its liability to make payment
and the amount of that payment.   7.2   Where any amount is required to be paid
by any person to the Purchasers under clause 2 (other than in respect of any
Actual Taxation Liability) that person shall pay such amount in cleared,
immediately available funds on or before the later of:

  (a)   in the case of a Taxation Liability falling within clause 2.1.2, the day
before the date upon which the payment or repayment is due to be made by the
Company; and     (b)   in the case of a Taxation Liability falling within clause
2.1.4, the day before the date upon which the costs or expenses are due to be
paid by the Company; and

    seven business days after the date on which the Purchasers, in accordance
with clause 5 (conduct of claims), notifies that person of its liability to make
a payment and the amount of that payment.   7.3   Sums not paid on the dates
specified in clauses 7.1, 7.2 and/or Schedule 4 shall bear interest (which shall
accrue from day to day after, as well as before, judgement) at the Default Rate
for the period from the date following that specified date up to and including
the day of actual payment of such sums (or the next business day if the day of
actual payment is not a business day) compounded quarterly, provided that
interest shall not be payable under this clause 7.4 in respect of any period or
part thereof to the extent that the amount of the Taxation Liability in question
takes account of interest for the same period or part thereof.   8   Taxation
Compliance       Schedule 3 shall have effect.

 

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9   Group Relief Arrangements       Schedule 4 shall have effect.   10  
Guarantee   10.1   Schedule 2 shall have effect.   11   Confidentiality   11.1  
Each party undertakes to the others that it shall:

11.1.1   treat all information provided under this Deed as confidential;  
11.1.2   not disclose such information to any person other than its auditors
and/or lawyers unless the relevant party has given its prior consent in writing
to such disclosure, such consent not to be unreasonably withheld or delayed; and
  11.1.3   use its best endeavours to procure that those other persons who are
referred to in clause 11.1.2 above shall not disclose the same to any other
person;

11.2   Nothing in the undertaking contained in clause 11.1 shall restrict the
disclosure of information to the extent that:

11.2.1   the same is required by law;   11.2.2   the information has come into
the public domain without any breach of that undertaking; or   11.2.3   the
relevant party has given its prior consent to such disclosure in writing.

12   Counter-Indemnity   12.1   Each Purchaser hereby covenants with the Seller
to pay to the Seller an amount equal to its Relevant Proportion of any Taxation
Liability for which the Seller or any other person falling within section
767A(2) or 767AA(4) of the ICTA becomes liable by virtue of the operation of
sections 767A, 767AA and 767B of the ICTA in circumstances where the taxpayer
company (as referred to in section 767A(1)) and/or the transferred company (as
referred to in section 767AA(1)) is the Company.   12.2   The covenant contained
in clause 12.1 shall not apply to any Taxation Liability to the extent that the
Purchasers could claim payment in respect thereof under this Deed or would have
been able to do so but for any financial limits contained in the Share Sale
Agreement; and   12.3   Clauses 5, 6 and 7 of this Deed (Conduct of Claims,
Withholdings and Gross-up and Payment) shall apply to the covenants contained in
this clause 12 as they apply to the covenants contained in clause 2, replacing
references to the Seller by the Purchasers (and vice versa) and making any other
necessary modifications.   13   Change of Control   13.1   In the event that any
party (other than a person with whom either of the Purchasers would form a group
for group relief purposes) acquires any interest in the issued share capital of
the Company from the Purchasers other than where the person acquiring such
interest enters into contractual documentation with the Parties hereto (other
than the Purchasers) in substantially the same form as this Deed to ensure that
the Seller is not materially financially disadvantaged by such acquisition, the
Purchasers from whom such party acquires such interest shall indemnify the
Seller for any material financial disadvantage to it arising as a result of such
acquisition.   13.2   Clause 13.1 shall cease to apply to any acquisition taking
place after the later of:

  (a)   31 December 2007; and

 

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  (b)   the date on which both no funds stand to the credit of the Escrow
Account and the Purchasers conclude (acting reasonably) that no further funds
are likely to be paid into the Escrow Account.

13.3   In the event that an acquisition is ignored under clause 13.1 by virtue
of the acquirer having been part of the same group, and such person subsequently
leaves the group owning an interest in the Company, clause 13.1 shall apply on
the occasion of such departure from the group.   14   Liquidation of the Seller
  14.1   The parties acknowledge that the Seller may be put into liquidation
after Completion and in the event of any such liquidation or proposed
liquidation, the parties agree that references to the Seller shall be replaced
by references to the Guarantor, and if necessary, they shall execute such
documentation to ensure that obligations (and the rights) of the Seller will be
transferred to the Guarantor by way of novation or otherwise, with the intent
that the Purchasers should have direct contractual recourse by way of primary
obligation against the Guarantor (and vice versa), and that subject thereto, the
Purchasers should have no further recourse against the Seller.       IN WITNESS
whereof this Deed has been entered into the day and year first above written

 

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Schedule 1

The Purchasers

              Name   Registered Office   Relevant Proportion (%)
Robertson Group Limited
  10 Perimeter Road, Elgin IV30 6AE     50  
The Edinburgh Woollen Mill
(Group) Limited
  Site A Kingmoor Park South Industrial Estate
Queens Drive
Carlisle
CA6 4SB     50  

 

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Schedule 2
Guarantee

1   Guarantee by the Guarantor   1.1   In consideration of the Purchasers
entering into this Deed, the Guarantor unconditionally and irrevocably
guarantees to the Purchasers the due and punctual performance of all the
obligations and liabilities of the Seller under or otherwise arising out of or
in connection with this Deed and the Share Sale Agreement (as any of such
obligations and liabilities may from time to time be varied, extended, increased
or replaced) and undertakes to keep the Purchasers, in their Relative
Proportions, fully indemnified against all liabilities, losses, proceedings,
claims, damages, costs and expenses of whatever nature which the Purchasers may
suffer or incur as a result of any failure or delay by the Seller in the
performance of any of such obligations and liabilities.   1.2   If any
obligation or liability of the Seller expressed to be the subject of the
guarantee contained in this Schedule 2 (the “Seller’s Guarantee”) is not or
ceases to be valid or enforceable against the Seller (in whole or in part) on
any ground whatsoever (including, but not limited to, any defect in or want of
powers of the Seller or irregular exercise of such powers, or any lack of
authority on the part of any person purporting to act on behalf of the Seller,
or any legal or other limitation, disability or incapacity, or any change in the
constitution of, or any amalgamation or reconstruction of the Seller, or the
Seller taking steps to enter into or entering into bankruptcy, liquidation,
administration or insolvency, or any other step being taken by any person with a
view to any of those things), the Guarantor shall nevertheless be liable to the
Purchasers in respect of that purported obligation or liability as if the same
were fully valid and enforceable and the Guarantor were the principal debtor in
respect thereof.   1.3   The liability of the Guarantor under the Seller’s
Guarantee shall not be discharged or affected in any way by:

1.3.1   the Purchasers compounding or entering into any compromise, settlement
or arrangement with the Seller, or any other person; or   1.3.2   any variation,
extension, increase, renewal, determination, release or replacement of this
Deed, whether or not made with the consent or knowledge of the Guarantor; or  
1.3.3   the Purchasers granting any time, indulgence, concession, relief,
discharge or release to the Seller, any co-guarantor or any other person or
realising, giving up, agreeing to any variation, renewal or replacement of,
releasing, abstaining from or delaying in taking advantage of or otherwise
dealing with any securities from or other rights or remedies which it may have
against the Seller, any co- guarantor or any other person; or   1.3.4   any
other matter or thing which, but for this provision, might exonerate or affect
the liability of the Guarantor.

1.4   The Purchasers shall not be obliged to take any steps to enforce any
rights or remedy against the Seller or any other person before enforcing the
Seller’s Guarantee.   1.5   The Seller’s Guarantee is in addition to any other
security or right now or hereafter available to the Purchasers and is a
continuing security notwithstanding entering into liquidation, administration or
insolvency or steps being taken by any person with a view to any of those things
or other incapacity of the Seller or the Guarantor or any change in the
ownership of either of them.   1.6   Until the full and final discharge of all
obligations and liabilities (both actual and contingent) which are the subject
of the Seller’s Guarantee, the Guarantor:

1.6.1   waives all of its rights of subrogation, reimbursement and indemnity
against the Seller and all rights of contribution against any other person and
agrees not to demand or accept any security from the Seller or any other person
in respect of any such rights and not to prove in competition with the
Purchasers in the bankruptcy, liquidation or insolvency of the Seller or any
such other person; and

 

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1.6.2   agrees that it will not claim or enforce payment (whether directly or by
set-off, counterclaim or otherwise) of any amount which may be or has become due
to the Guarantor by the Seller, any other person or any other person liable to
the Purchasers in respect of the obligations hereby guaranteed if and so long as
the Seller is in default under this Deed provided this shall not apply to any
right of the Guarantor to receive any payments under the Lloyd’s — MMO
Agreement.

1.7   Any moneys received by the Purchasers under the Seller’s Guarantee may be
placed to the credit of a suspense account with a view to preserving its rights
to prove for the whole of its claims against the Seller or any other person.  
1.8   If the Seller’s Guarantee is discharged or released in consequence of any
performance by the Seller of the guaranteed obligations which is set aside for
any reason, the Seller’s Guarantee shall be automatically reinstated in respect
of the relevant obligations.

 

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Schedule 3
Taxation Compliance
(clause 8)

1   Accounting Periods for the periods up to and including 31 December 2005  
1.1   The Seller shall prepare the corporation tax return (and any relevant
supporting material) relating to the tax affairs of the Company for all
Accounting Periods up to and including the 2005 Accounting Period (in this
Schedule, “the Relevant Periods”).   1.2   The Seller covenants with the
Purchasers that it shall use its reasonable endeavours to provide to the
Purchasers (or their duly authorised agent or representative) the corporation
tax return for the accounting period ended on 31st December 2004 by 14th
October 2005 and the Purchasers shall use their reasonable endeavours to file
such return by 31st October 2005. The documentation which has been prepared in
accordance with paragraph 1.1 above for the 2005 Accounting Period shall be
provided by the Seller to the Purchasers not less than 20 business days before
the date of intended submission.   1.3   The Purchasers shall deal with the
submission of all documentation (including the tax computation) and shall deal
with all matters (including correspondence) relating to the tax affairs of the
Company for the Relevant Periods with a view to agreeing the same with the
relevant Taxation Authority.   1.4   The Seller covenants with the Purchasers
that it shall provide to the Purchasers (or their duly authorised agent or
representative) within five business days of the receipt thereof, a copy of any
material communication from the relevant Taxation Authority received after
Completion by the Seller or its duly authorised agent or representative (and not
also received by the Company, the Purchasers or any company in the group of
companies of which the Purchasers are members or any then current director,
employee or agent or professional adviser of any of them) relating to any
Relevant Period of the Company.   1.5   The Purchasers covenant with the Seller
that they shall:

1.5.1   provide to the Seller (or its duly authorised agent or representative):

  (a)   not less than 14 business days before the date of intended submission, a
copy of any material communication, including responses to the relevant Taxation
Authority enquiries relating to any Relevant Period of the Company which it is
proposed be submitted after Completion to the relevant Taxation Authority,
together with details of the date on which the same is intended to be submitted;
and     (b)   without prejudice to paragraph 1.5.1 (a), within five business
days after the despatch of such communication, a copy of any communication sent
to the relevant Taxation Authority after Completion relating to any Relevant
Period of the Company; and     (c)   in the event that the Purchasers make any
material amendments to the tax computation (prepared in accordance with
paragraph 1.1 above), not less than 14 business days before the date of intended
submission a copy of the amended tax computation (including any supporting
materials); and

1.5.2   consider and amend in accordance with any reasonable comment made by or
on behalf of the Seller in relation to any communication referred to in
paragraph 1.5.1 (a) before submission to the relevant Taxation Authority,
provided that the Purchasers shall not be obliged so to amend unless the Seller
has communicated such comments in writing to the Purchasers not less than seven
business days before the date on which the relevant communication is intended by
the Purchasers to be delivered to the relevant Taxation Authority as advised by
the Purchasers.

 

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1.6   The Purchasers shall procure that, in respect of any Relevant Period, the
Company shall in relation to Taxation:

1.6.1   sign and submit any Taxation return and computations,   1.6.2   make any
claims, disclaimers, notices or elections, and   1.6.3   give any consents, as
may be reasonably required by the Seller in relation to such Relevant Period,
provided that:

  (a)   the Seller has complied with its obligations specified in paragraph 1.1;
and     (b)   the Company shall not be obliged to take any action or do any
thing which:

  (i)   the Purchasers reasonably consider is not full, true and accurate in all
material respects; and/or     (ii)   would give rise either to a liability to
Taxation for the Company or a loss of any Relief by the Company; and     (iii)  
is inconsistent with any Taxation laws or generally accepted accounting policies
or the approach previously taken by the Company in its relevant corporation tax
return or self-assessment;

  (c)   the Company shall not be required to take any step which would reduce
the amount of Relief to be surrendered to the Purchasers below £5,874,272 for
the 2005 Accounting Period, other than where required to offset any Actual
Taxation Liability in respect of which the Seller could be liable under this
Deed.

1.7   The Company shall be entitled, subject to any change of law or
interpretation of law taking effect or announced after the date of this
Agreement to file its return on the basis that it makes an election under
section 107(4) Finance Act 2000 based on technical provisions before deduction
of reinsurance.   2   Accounting Periods after the 2005 Accounting Period   2.1
  The Purchasers shall prepare all documentation and deal with all matters
(including correspondence) relating to the tax affairs of the Company for the
Accounting Periods after the 2005 Accounting Period with a view to agreeing the
same with the relevant Taxation Authority.   2.2   The Purchasers shall procure
that the Company shall not without the written consent of the Seller make any
election or take any other action (other than as required by law at the date of
the Agreement, pursuant to any legally binding commitment created before
Completion or as required by any generally accepted accounting standard or as
contemplated by Schedule 4) whether under the provisions of section 107(4)
Finance Act 2000 or otherwise which would reduce the Company’s losses for the
2005 Accounting Period below the amount specified in paragraph 4 of Schedule 4.
If any such election is entered into without the prior written consent of the
Seller, such election shall be deemed to be void.   3   Information   3.1   If
the Company so requests, the Seller shall provide such assistance (or use its
reasonable endeavours to procure the provision of such assistance) as is
reasonable to assist the Company at any time after Completion in locating
documents, records of facts, valuations or information relating to any
Accounting Period of the Company commencing prior to Completion. Furthermore,
the Purchasers agree to provide (or procure the provision of) similar assistance
to the Seller (or any assignee of the Seller of any asset or business of the
Seller) in so far as the Company may have relevant records or facts pertaining
to the business.   3.2   If the Company so requests post-Completion or the
Company or the Purchasers are required to calculate the amount of any payment
pursuant to Schedule 4, the Seller shall provide to the Company or the
Purchasers (or their duly authorised agent or representative) suitable access to
any information held by the Seller relevant to the tax affairs of the Company.

 

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3.3   The Purchasers shall, and shall procure that the Company shall provide to
the Seller (a) (as soon as reasonably practicable after receipt thereof) copies
of any communication from Lloyd’s concerning (i) the quantum of any Losses (as
defined in Schedule 4) and (ii) any calls on the central fund; and (b) (as soon
as reasonably practicable after finalisation) copies of the Company’s accounts
for any accounting period ended after Completion.   3.4   For the avoidance of
doubt, nothing in this Schedule 3 shall, in any way, limit or exclude the
liability of the Seller under this Deed (without prejudice to the operation of
clause 3.1.9) or the Purchasers’ rights under clause 5.   4   Costs   4.1   In
this paragraph, the Tax Negotiation costs shall be the costs incurred by the
Company in relation to its corporation tax return for the 2005 Accounting Period
following submission of that return, including the negotiation and agreement of
that tax return and the agreement of the surrender of any group relief in
respect of that return, but shall not include any costs for which the Seller is
otherwise liable under this Deed.   4.2   To the extent not discharged on or
before Completion, the costs of dealing with any outstanding matter relating to
the affairs of the Company for any period before the 2005 Accounting Period
shall be borne by the Seller to the extent that such costs are reasonably and
properly incurred.   4.3   The costs of dealing with any matter relating to the
2005 Accounting period shall be borne as follows:-

  (i)   in relation to any cost which is not a Tax Negotiation cost, such costs
shall be borne as to the first £20,000 by the Purchasers; where costs exceeds
such amount, such excess, shall be borne by the Seller to the extent that such
costs are reasonably and properly incurred;     (ii)   in relation to the Tax
Negotiation cost, the Seller shall bear the first £10,000 of such costs to the
extent that they are reasonably and properly incurred. Where the Tax
Negotiations costs exceed such amount the Seller shall bear such excess, subject
to its prior agreement to such additional costs, such agreement not to be
unreasonably withheld and delayed.

4.4   The parties shall consult in good faith prior to the date on which any
costs as are referred to in paragraph 4.2 and 4.3 are incurred and if, following
such consultation, they are agreed, they shall be deemed to be reasonably and
properly incurred.

 

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Schedule 4
Group Relief Arrangements
(clause 9)

  1       1.1   This Schedule records the terms agreed between the Seller, the
Company and the Purchasers on which group relief will be claimed and surrendered
and payments will therefor be made. The Seller, the Company and the Purchasers
hereby undertake to ensure or procure:

  (a)   that there is made all such claims and given all such consents in
accordance with the Group Relief Provisions to give effect to their respective
rights and obligations under this Schedule;     (b)   that there is supplied to
each other such information as is relevant to calculate the quantum of any
payment to or from the Company under this Schedule; and     (c)   that without
the consent of the other parties to this Deed (not to be unreasonably withheld
or delayed), no party shall take any step to close off prior to 31 December 2005
the accounting period which started on 1 January 2005, and in the event that it
is so closed off, references to the 2005 Accounting Period shall be modified
accordingly.

1.2   If the Guarantor so requests, by giving at least 30 days’ written notice,
each of the Purchasers shall supply to the Guarantor on or by the date specified
in such notice such information as the Guarantor may reasonably request to
enable the Guarantor to determine the status and timing of any payment made or
likely to be made hereunder. The Purchasers shall be under no obligation to
supply such information more than twice in any twelve month period.   2   For
the avoidance of doubt, any reference to specific statutory provisions in this
Schedule shall be deemed to include references to those provisions as
subsequently amended and, should the Group Relief Provisions be replaced by
another regime by which the losses of the Company may be used by any member of
any Purchaser’s Group, the parties hereby agree that this schedule shall be read
mutatis mutandis to give effect to their intentions as stated below.   3  
Subject to the provisions of this Schedule, the consideration each Purchaser
agrees to pay or procure there is paid to the Company shall be 8.5p for each and
every £1 of losses or other amounts eligible for relief from corporation tax
which is capable of being surrendered by the Company pursuant to section 402
ICTA 1988 (the “ Losses”) in the 2005 Accounting Period (the “ Tax Loss
Payment”), provided that the Losses shall for the purposes of this Schedule
(including paragraph 14.3) be deemed to be capable of surrender, if and to the
extent that they would be so capable but for an insufficiency of profits on the
part of the Purchasers or their group or they would be so capable, but for the
Company no longer being owned by a consortium of which the Purchasers or members
of their groups are the sole equity-holders (as to 50 per cent each of the
ordinary shares of the Company) as a result of any voluntary act or omission
done or failed to be done by the Company or the Purchasers after Completion
(other than pursuant to: (i) any arrangement made on or before Completion
(including under any indebtedness owing to Lloyd’s or the Central Fund); or
(ii) as required by law or any regulatory authority, including but not limited
to Lloyd’s or (iii) as requested by the Seller pursuant to this Deed), such
voluntary act or omission being a Purchaser De-Grouping Event.   4   Subject to
the provisions of this Schedule, neither Purchaser shall (save for the
provisions of paragraph 6 below) be obliged to pay for any Losses to the extent
that, in relation to the 2005 Accounting Period, such losses exceed that
Purchaser’s Relevant Proportion of 5,874,272.   5   Save as set out in paragraph
6 below, neither Purchaser shall be obliged to pay for any Losses which are made
available to the Purchasers or any member of their groups in relation to a Post
2005 Accounting Period.   6   To the extent that any Losses exceed the amounts
set out in paragraph 4 above, these are hereafter referred to as “Excess Losses”
and each an “Excess Loss”. No Purchaser shall be obliged to pay for

 

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    any Excess Loss, unless and then only to the extent that it or any member of
its group actually utilises any such Excess Loss to reduce its Corporation Tax
Payments. Each Purchaser shall use its reasonable endeavours to use such Excess
Losses. Each Purchaser shall pay:

  (a)   for such Excess Losses in the 2005 Accounting Period the amount shall be
8.5p for each and every £1 of Excess Losses so used; and     (b)   for such
Excess Losses in subsequent Accounting Periods the amount shall be 13.5p for
each and every £1 of Excess Losses so used.

7   The time for payment by the Relevant Purchaser of the Tax Loss Payment into
the Escrow Account shall be:

  (a)   in relation to the Losses, at each relevant tax payment date on which
the Relevant Purchaser has been able by virtue of having utilised the Losses to
reduce its liability to corporation tax by virtue of the Losses or would have
been able to (but for an insufficiency of profits or a Purchaser De-Grouping
Event); and     (b)   in relation to the Excess Losses, at each relevant tax
payment date on which the Relevant Purchaser utilises such Excess Losses to
reduce its liability to corporation tax.

    with each date being a “Payment Date”, provided that if any such Payment
Date falls on or before Completion, the Payment Date shall be the first such
Date falling after Completion.   8   At each Payment Date the amount to be paid
by each Relevant Purchaser will be calculated on the assumptions that the amount
of the technical reserves which can be disclaimed under Section 107(4) of the
Finance Act 2000 in respect of the period of account ended 31 December 2004 are
calculated by reference to the technical provisions (as defined in subsection
(7) of Section 107, after taking account of reinsurance recoverables) and that
no tax relief is available in respect of any amounts accruing by way of interest
to the Central Fund. If such assumptions are subsequently proven to be incorrect
the amount of the Relevant Payment to be increased pursuant to paragraph 9 shall
be increased by reference to the interest (net of tax) that would have been
earned on such increase in the Relevant Payment had such increased Relevant
Payment been made initially.   9   Subject to this, if at the Payment Date it is
not possible to quantify precisely the Escrow Tax Loss Payment, the amount to be
paid into the Escrow Account (the “Relevant Payment”) will be agreed upon by the
Guarantor and the Relevant Purchaser, each acting reasonably (the “Accepted
Amount”). If the Guarantor and the Relevant Purchaser cannot agree on an
Accepted Amount within 10 business days from the Payment Date, the matter shall
thereupon be referred to a leading firm of chartered accountants (who shall act
as experts and not arbitrators, and whose determination shall, in the absence of
manifest error, be final and binding) to be agreed with between the Relevant
Purchaser and the Guarantor.   10   The amount of each Relevant Payment shall be
adjusted by the Relevant Purchaser (and the Relevant Purchaser shall notify the
Guarantor accordingly) as necessary no later than five business days following
the occurrence of each of the following, each to be known as an “Adjustment
Date”):   10.1   the Relevant Purchaser adjusts that Instalment Payment;   10.2
  the Company submits its Tax Return for the relevant Accounting Period;   10.3
  the Relevant Purchaser submits its Tax Return for the relevant Accounting
Period;   10.4   (if later) the Relevant Purchaser submits any claim for Group
Relief in relation to the relevant Accounting Period;   10.5   the date on which
it becomes possible to precisely quantify the Tax Loss Payment (including, for
example, any final determination that the Losses are not capable of surrender by
the Company); and   10.6   it has been finally determined that the Relevant
Purchaser has insufficient profits to utilise the Losses or that a Purchaser
De-Grouping Event has occurred.

 

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11   Within 10 business days of any Adjustment Date, if (a) the effect of the
adjustment is to increase the Relevant Payment, then the Relevant Purchaser
shall pay a sum equal to such increase (plus any interest which would have been
earned (less tax) on the Escrow Account) into the Escrow Account or (b) if the
effect of the adjustment is to decrease the Relevant Payment then an amount
equal to such decrease (plus any interest thereon earned (less tax) on the
Escrow Account by the Relevant Purchaser) shall be re-paid to the Relevant
Purchaser from the Escrow Account.   12   In the event that the benefit of any
Losses or Excess Losses available to the Company which would otherwise be the
subject of payments into the Escrow Account are realised in a way which mirrors
in economic terms the benefit of group relief but is not within the Group Relief
Provisions, the parties confirm that it is their intent that the provisions of
this Schedule are modified accordingly so as to leave the parties in the same
position as they would have been had such Losses or Excess Losses been utilised
under the Group Relief Provisions.   13   Any amounts standing to the balance of
the Escrow Account after the operation of paragraphs 10 and 14.3 (if relevant)
(the “Escrow Cash”) to the Company shall be paid (together with an amount equal
to the interest earned on such sum calculated on a fair and equitable basis) to
the Company on the occurrence of any one of the following events in relation to
the relevant accounting period and the Relevant Purchaser in respect of which
the Relevant Payment was paid:

  (a)   if no notice of enquiry is received from a Taxation Authority for both
the Company’s and the Relevant Purchaser’s tax return within two years after the
later of (i) the end of the Relevant Purchaser’s accounting period and (ii) the
end of the Company’s accounting period, (or if later, (in relation to both the
Relevant Purchaser’s and the Company’s tax return) the dates specified in
paragraph 24 Schedule 18 Finance Act 1998 for the giving of a notice of
enquiry), then an appropriate proportion (equal to the Relevant Proportion of
that Purchaser) of the Escrow Cash shall be immediately released; or     (b)  
if no notice of a tax enquiry is received from a Taxation Authority in respect
of the Company’s corporation tax return but notice is received in respect of a
Relevant Purchaser’s corporation tax return then an appropriate proportion of
the Escrow Cash shall be released on the later of:

  (i)   the date on which written confirmation is received from a Taxation
Authority (which the Relevant Purchaser shall use its best efforts to seek) that
the Taxation Authority will not open an enquiry in respect of the Company’s
Group Relief Reliefs in relation to the relevant Relevant Purchaser or if
earlier, it is clear to the Relevant Purchaser acting reasonably that any
enquiry will not impact on the quantum of any payment made or to be made under
this Schedule;     (ii)   the date on which such enquiry which may have such an
impact into the Relevant Purchaser’s corporation tax return is closed by the
Taxation Authority; and     (iii)   the date on which a Taxation Authority will
no longer be able to open an enquiry into the corporation tax return of the
Company under paragraph 24 Schedule 18 Finance Act 1998; or

  (c)   if notice of a tax enquiry is received from a Taxation Authority in
respect of the Company’s tax return but not in respect of the Relevant
Purchaser’s tax return then an appropriate proportion of the Escrow Cash shall
be released at the later of

  (i)   the date on which such enquiry into the Company’s tax return is closed
by the Taxation Authority; and     (ii)   the date on which a Taxation Authority
will no longer be able to open an enquiry into the tax return of the Relevant
Purchaser under paragraph 24 Schedule 18 Finance Act 1998; or

  (d)   if notice of a tax enquiry is received from a Taxation Authority in
respect of both the Company and a Relevant Purchaser’s returns, then the Escrow
Cash shall be released at the later of the dates indicated in sub paragraphs
(b) and (c) above.

14   Amounts standing to the credit of the Escrow Account shall be released from
the Escrow Account to

 

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    the Purchasers to the extent that in relation to the relevant accounting
period in which the Relevant Payment was made;   14.1   the Company incurs an
Actual Taxation Liability for which the Seller is liable under this Deed, in
which case the amount released to the Purchasers (in satisfaction of such
liability to the extent of such release (ignoring any accrued interest)) shall
be the amount of such Actual Taxation Liability (as reduced or extinguished by
any available Relief arising on or before Completion) together with an amount
equal to the interest earned on such sum calculated on a fair and equitable
basis and the Relevant Purchaser shall have no further obligation to make any
payment in respect thereof;   14.2   any Relief which is used to reduce an
Actual Taxation Liability for which the Seller is liable has been the subject of
a Tax Loss Payment into the Escrow Account above by any Purchaser (an “Escrow
Payment”), in which case the amount released to such Purchaser shall be the
amount of such Escrow Payment, plus any interest accrued in respect of such
payment calculated on a fair and equitable basis;   14.3   it is finally
determined that any losses are not capable of surrender by the Company to the
Relevant Purchasers in which case the amount released shall be an amount equal
to the amount paid for such losses plus any interest accrued on such amount
calculated on a fair and equitable basis.   15   It is further agreed that if
the benefit of the surrender of any Group Relief Reliefs to the Purchasers or
their groups is lost or reduced as a result of the coming into force after
Completion of, or any introduction or change after Completion in, any law, rule,
regulation (or their interpretation by any court of law or tribunal) then the
amount of any future Tax Loss Payments shall be reduced correspondingly and to
the extent that any Tax Loss Payments have already been paid into the Escrow
Account, the sum of any Tax Loss Payments that correspond to such Group Relief
Reliefs that are so lost or reduced shall be returned to the Relevant Purchasers
(the “Return”) together with any related interest calculated on a fair and
equitable basis, and the Relevant Purchasers shall have no further obligation to
make any payment in respect thereof.   16   Any obligation of the Purchasers
under this Schedule shall be several and limited to each Purchaser’s Relevant
Proportion.   17   The Purchasers, Seller and Guarantor each agree to undertake,
or ensure there is undertaken:

  (a)   all necessary action as may be required to ensure the Escrow Account is
operated in accordance with the provisions of this Schedule; and     (b)   the
execution of the Escrow Letter.

 

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EXECUTED and DELIVERED
    )          
as a DEED by
    )     /s/ GEORGE R. TRUMBULL    
MMO EU LIMITED
    )     Director    
 
    )          
 
    )     /s/ GEORGE R. TRUMBULL    
 
               
 
    )     Director/Secretary    
 
               
EXECUTED and DELIVERED
    )          
as a DEED by
    )     /s/ GEORGE R. TRUMBULL    
 
               
NYMAGIC, INC.
    )     Director    
 
    )          
 
    )     /s/ PAUL J. HART    
 
               
 
    )     Director/Secretary    
 
               
EXECUTED and DELIVERED
    )          
as a DEED by
    )     /s/ GEORGE R. TRUMBULL    
 
               
MMO UK LIMITED
    )     Director    
 
    )          
 
    )     /s/ THOMAS J. IACOPELLI    
 
               
 
    )     Director/Secretary    
 
               
EXECUTED and DELIVERED
    )          
as a DEED by
    )     /s/ STEVE LYON    
 
               
ROBERTSON GROUP LIMITED
    )     Director    
 
    )          
 
    )     /s/ IRENE WILSON;    
 
               
 
    )     Director/Secretary    
 
               
EXECUTED and DELIVERED
    )          
as a DEED by
    )     /s/ DAVID HOUSTON    
 
               
THE EDINBURGH WOOLEN MILL
    )     Director    
(GROUP) LIMITED
    )          
 
    )     /s/ ALEC WHITAKER    
 
               
 
    )     Director/Secretary