Exhibit 10.1


 


FORM OF
VOTING AGREEMENT


 


THIS VOTING AGREEMENT, dated as of February 17,
2010 (this “Agreement”), between Fairfax Financial Holdings Limited, a
Canadian corporation (“Parent”), and                                         
(“Stockholder”), solely in Stockholder’s capacity as an owner of common
stock, par value $1.00 per share (“Company Common Stock”) of Zenith
National Insurance Corp., a Delaware corporation (the “Company”).


 


WHEREAS, on February 17,
2010, Parent, the Company, and Fairfax Investments II USA Corp., a Delaware
corporation and an indirect wholly owned subsidiary of Parent (“Merger Sub”),
entered into an Agreement and Plan of Merger (the “Merger Agreement”) (capitalized
terms used but not otherwise defined herein shall have the respective meanings
ascribed to such terms in the Merger Agreement); and


 


WHEREAS, as a
condition to the willingness of Parent and Merger Sub to enter into the Merger
Agreement, Parent and Merger Sub have required that Stockholder enter into this
Agreement, and in order to induce Parent and Merger Sub to enter into the
Merger Agreement, Stockholder has agreed to enter into this Agreement.


 


NOW, THEREFORE, in
consideration for the mutual covenants contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound, agree as
follows:


 


1.                                       Agreement to Vote.  Subject to Section 6, at every meeting
of the stockholders of the Company, and at every postponement or adjournment
thereof, Stockholder irrevocably agrees to appear at such meeting and vote (in
person or by proxy) all Voting Shares (as hereinafter defined) entitled to be
voted thereat or to cause all Voting Shares to be voted (i) in favor of
the adoption of the Merger Agreement; (ii) against any action, agreement
or transaction (other than the Merger Agreement or the transactions
contemplated thereby) or proposal (including a Takeover Proposal) that would
result in a material breach of any covenant, representation or warranty or any
other obligation or agreement of the Company under the Merger Agreement or that
could result in any of the conditions to the Company’s obligations under the
Merger Agreement not being fulfilled, and (iii) in favor of any other
matter necessary to the consummation of the transactions contemplated by the
Merger Agreement and voted upon by the stockholders of the Company.  Stockholder acknowledges receipt and review
of a copy of the Merger Agreement.


 


2.                                       Grant of Proxy.  In
furtherance of the agreements contained in Section 1 of this Agreement and
as security for such agreements, Stockholder hereby irrevocably appoints
Parent, the executive officers of Parent, and each of them individually, as the
sole and exclusive attorneys-in-fact and proxies of Stockholder, for and in the
name, place and stead of Stockholder, with full power of substitution and
resubstitution, to vote, grant a consent or approval in respect of, or execute
and deliver a proxy to vote, if and to the extent Stockholder fails to comply
with the agreements contained in Section 1 of this Agreement, the Voting
Shares, (i) in favor of the adoption of the Merger Agreement; (ii) against
any action, agreement or transaction (other than the Merger Agreement or the
transactions contemplated thereby) or proposal (including a


 

















 


Takeover Proposal) that
would result in a material breach of any covenant, representation or warranty
or any other obligation or agreement of the Company under the Merger Agreement
or that could result in any of the conditions to the Company’s obligations
under the Merger Agreement not being fulfilled, and (iii) in favor of any
other matter necessary to the consummation of the transactions contemplated by
the Merger Agreement and voted upon by the stockholders of the Company.  THIS PROXY IS IRREVOCABLE AND COUPLED WITH AN
INTEREST.


 


3.                                       Representations and Warranties of
Stockholder.  Parent acknowledges that neither Stockholder
nor any person on behalf of Stockholder makes any representation or warranty, whether
express or implied, of any kind or character except as expressly set forth in
this Agreement.  Stockholder represents
and warrants, as of the date hereof, that:


 


(a)                                  (i) Stockholder
is the beneficial owner of, and has the sole power to vote, all of the shares
of Company Common Stock reported as directly owned (or indirectly owned with
the power to vote) on the most recent report filed by Stockholder with the
Securities and Exchange Commission pursuant to Section 16 of the
Securities Exchange Act of 1934, as amended (which, together with any shares of
Company Common Stock acquired by Stockholder on or after the date of this
Agreement, are referred to as the “Voting Shares”); (ii) the most
recent report filed by Stockholder with the Securities and Exchange Commission
pursuant to Section 16 of the Securities Exchange Act of 1934, as amended,
is accurate in all material respects; and (iii) no proxies if heretofore
given in respect of any or all of the Voting Shares are irrevocable and that
any such proxies have heretofore been revoked;


 


(b)                                 (i) Stockholder
has the full legal right and authority, to enter into this Agreement and to
consummate the transactions contemplated hereby; (ii) this Agreement has
been duly and validly executed and delivered by Stockholder and, assuming due
authorization, execution and delivery by Parent, constitutes a legal, valid and
binding obligation of Stockholder, enforceable against Stockholder in
accordance with its terms (subject to applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and other similar laws
affecting creditors’ rights generally and general principles of equity,
including good faith and fair dealing, regardless of whether in a proceeding at
equity or at law); and (iii) the failure of the spouse, if any, of
Stockholder to be a party or signatory to this Agreement shall not (x) prevent
Stockholder from performing Stockholder’s obligations contemplated hereunder or
(y) prevent this Agreement from constituting the legal, valid and binding
obligation of Stockholder in accordance with its terms (subject to such laws
and principles); and


 


(c)                                  (i) no
filing with, and no permit, authorization, consent or approval of, any state,
federal or foreign governmental authority is necessary on the part of
Stockholder for the execution and delivery of this Agreement by Stockholder
and, except as contemplated by the Merger Agreement, the consummation by
Stockholder of the transactions contemplated hereby and (ii) neither the
execution and delivery of this Agreement by Stockholder nor the consummation by
Stockholder of the transactions contemplated hereby nor compliance by
Stockholder with any of the provisions hereof shall (x) result in the
creation of a lien on any of the Voting Shares or (y) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to
Stockholder or any of the Voting Shares, except in the case of (x) or (y) for
liens,


 


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violations, breaches or defaults that would
not in the aggregate materially impair the ability of Stockholder to perform
Stockholder’s obligations hereunder.


 


4.                                       Representations and Warranties of Parent.  Stockholder
acknowledges that neither Parent nor any person on behalf of Parent makes any
representation or warranty, whether express or implied, of any kind or
character except as expressly set forth in this Agreement.  Parent represents and warrants, as of the
date hereof, that:


 


(a)                                  (i) Parent
is duly organized and validly existing and in good standing under the laws of
the jurisdiction of its organization and has full corporate power and authority
to enter into this Agreement and to consummate the transactions contemplated
hereby; (ii) the execution, delivery and performance by Parent of this Agreement
and the consummation by Parent of the transactions contemplated hereby have
been duly authorized by all necessary corporate action on the part of Parent;
and (iii) this Agreement has been duly and validly executed and delivered
by Parent and, assuming due authorization, execution and delivery by
Stockholder, constitutes a legal, valid and binding obligation of Parent,
enforceable against Parent in accordance with its terms (subject to applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
other similar laws affecting creditors’ rights generally and general principles
of equity, including good faith and fair dealing, regardless of whether in a
proceeding at equity or at law); and


 


(b)                                 (i) no
filing with, and no permit, authorization, consent or approval of, any state,
federal or foreign governmental authority is necessary on the part of Parent
for the execution and delivery of this Agreement by Parent and, except as
contemplated by the Merger Agreement, the consummation by Parent of the
transactions contemplated hereby and (ii) neither the execution and
delivery of this Agreement by Parent nor the consummation by Parent of the
transactions contemplated hereby nor compliance by Parent with any of the
provisions hereof shall (x) result in the creation of a lien on any of its
assets, (y) violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Parent or any of its assets, or (z) contravene,
conflict with, or result in any violation or breach of any provision of its
certificate of incorporation or bylaws, except in the case of (x) or (y) for
liens, violations, breaches or defaults that would not in the aggregate
materially impair the ability of Parent to perform Parent ‘s obligations
hereunder.


 


5.               Remedies.  Each party
acknowledges and agrees that each party hereto will be irreparably damaged in
the event any of the provisions of this Agreement are not performed by the
parties in accordance with their specific terms or are otherwise breached.  Accordingly, it is agreed that each party
hereto shall be entitled to an injunction to prevent breaches of this
Agreement, and to specific enforcement of this Agreement and its terms and
provisions in any action instituted in any court of the United States or any
state having subject matter jurisdiction. 
All remedies, either under this Agreement or by law or otherwise
afforded to any party, shall be cumulative and not alternative.


 


6.               Termination. 
Notwithstanding any other provision of this Agreement or any other
agreement, this Agreement and all rights and obligations of the parties under
this Agreement shall terminate and cease to have any force or effect, without
any further action by any party, upon the earliest of (i) the termination
of the Merger Agreement in accordance with its


 


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terms, (ii) the
occurrence of an Adverse Recommendation Change under the Merger Agreement  and (iii) the Effective Time (such
earliest occurrence, the “Expiration Time”), except for the provisions
of Section 10, which shall survive the Expiration Time.  Nothing in this Section 6 shall relieve
any party of liability for any knowing and deliberate breach of this Agreement.


 


7.               Transfer of Shares. 
Except as contemplated by the Merger Agreement, Stockholder agrees that
it shall not, directly or indirectly, on or after the date hereof (a) sell,
assign, transfer (including by operation of law), pledge, dispose of or
otherwise encumber any of the Voting Shares or otherwise agree to do any of the
foregoing (each, a “Transfer”), (b) deposit any Voting Shares into
a voting trust or enter into a voting agreement or arrangement or grant any
proxy or power of attorney with respect thereto that is inconsistent with this
Agreement, (c) enter into any contract, option or other arrangement or
undertaking with respect to the Transfer of any Voting Shares or (d) knowingly
take any action that would make any representation or warranty of Stockholder
herein untrue or incorrect in any material respect or have the effect of
preventing or disabling Stockholder from performing Stockholder’s obligations
hereunder.  Notwithstanding the
foregoing, Stockholder may Transfer any or all of the Voting Shares to any
person who shall have executed and delivered to Parent a joinder to this
Agreement pursuant to which such person shall be bound by all of the terms and
provisions of this Agreement.


 


8.               No Solicitation of Transactions. 
Stockholder shall (a) not, except as expressly permitted by Section 6.04
of the Merger Agreement, directly or indirectly, through any officer, director,
agent or otherwise, engage in any action that the Company is prohibited from
taking under Section 6.04 of the Merger Agreement, and (b) direct or
cause Stockholder’s representatives and agents not to engage in any action
prohibited by Section 6.04 of the Merger Agreement.  Stockholder shall promptly advise the Company
orally and in writing of (x) any Takeover Proposal or any request for
information with respect to any Takeover Proposal, the material terms and
conditions of such Takeover Proposal or request, and the identity of the person
making such Takeover Proposal or request and (y) any material changes in
any such Takeover Proposal or request.


 


9.               Agreement Solely as Stockholder. 
Notwithstanding anything in this Agreement to the contrary, Stockholder
is not entering into this Agreement or making any agreement herein in any
capacity other than as record holder or beneficial owner of the Voting Shares,
and nothing herein shall be construed to limit or affect any action or inaction
by Stockholder, in Stockholder’s capacity as a director, officer or fiduciary
of the Company (or a Company Subsidiary), and any such action or inaction shall
not be deemed to be a breach of this Agreement.


 


10.         Miscellaneous.


 


(a)                                  Notices.  Any notice, request, instruction or other
communication provided to a party pursuant to this Agreement shall be in
writing and delivered by hand or overnight courier service or by facsimile, if
to Parent, to the address or facsimile number set forth in the Merger
Agreement, or if to Stockholder, to the address or facsimile number set forth
below Stockholder’s name on the signature page hereto, or to such other
persons, addresses or facsimile numbers as may be designated in writing by the
party entitled to receive such


 


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communication as provided above.  Each such communication will be effective (i) if
delivered by hand or overnight courier service, when such delivery is made at
the address specified on the signature page hereto, or (ii) if
delivered by facsimile, when such facsimile is transmitted to the facsimile
number specified on the signature page hereto and appropriate confirmation
is received.


 


(b)                                 Assignment.  Neither this Agreement nor any right,
interest or obligation hereunder may be assigned by any party hereto, in whole
or part (whether by operation of law or otherwise), without the prior written
consent of the other party hereto and any attempt to do so shall be null and void;
provided, that Stockholder may assign it rights and obligations hereunder,
other than its obligations under Section 8, in connection with any
Transfer of Voting Shares that complies with the terms of Section 7.


 


(c)                                  Successors and
Assigns.  The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. 
Nothing in this Agreement, express or implied, is intended to confer
upon any party other than the parties hereto or their respective successors and
assigns any rights, remedies, obligations, or liabilities under or by
reason of this Agreement, except as expressly provided in this Agreement.


 


(d)                                 Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware applicable to
contracts executed in and to be performed in that State.  Each of the parties hereto hereby irrevocably
and unconditionally submits, for itself and its property, to the jurisdiction
of the Court of Chancery of the State of Delaware and any appellate court
thereof, in any action or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby or for recognition or
enforcement of any judgment relating thereto, and each of the parties hereby
irrevocably and unconditionally (i) agrees not to commence any such action
except in such court, (ii) agrees that any claim in respect of any such
action or proceeding may be heard and determined in such court, (iii) waives,
to the fullest extent it may legally and effectively do so any objection which
it may now or hereafter have to venue of any such action or proceeding in such
court, and (iv) waives, to the fullest extent permitted by law, the
defense of any inconvenient forum to the maintenance of such action or
proceeding in such court. Each of the parties hereto agrees that a final
judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Each of the parties to this Agreement irrevocably consents to
service of process in any such action or proceeding in the manner provided for
notices in Section 10(a) of this Agreement; provided, however,
that nothing in this Agreement shall affect the right of any party to this
Agreement to serve process in any other manner permitted by law.


 


(e)                                  Waiver of Jury
Trial.  EACH OF THE PARTIES HERETO
HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY
ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.  EACH OF THE PARTIES HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD


 


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NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THAT FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE MERGER, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 10(e).


 


(f)                                    Counterparts;
Facsimile.  For the
convenience of the parties hereto, this Agreement may be executed in any number
of separate counterparts, each such counterpart being deemed to be an original
instrument, and all such counterparts will together constitute the same
agreement.  Executed signature pages to
this Agreement may be delivered by facsimile and such facsimiles will be deemed
as sufficient as if actual signature pages had been delivered.


 


(g)                                 Titles and
Subtitles.  The titles
and subtitles used in this Agreement are used for convenience only and are not
to be considered in construing or interpreting this Agreement.


 


(h)                                 Amendment.  This Agreement may not be amended except by
an instrument in writing signed by each of the parties hereto.


 


(i)                                     Severability.  If any provision of this Agreement or the
application thereof to any person (including, the officers and directors of the
Company) or circumstance is determined by a court of competent jurisdiction to
be invalid, void or unenforceable, the remaining provisions hereof, or the
application of such provision to persons or circumstances other than those as
to which it has been held invalid or unenforceable, will remain in full force
and effect and shall in no way be affected, impaired or invalidated thereby, so
long as the economic or legal substance of the transactions contemplated hereby
is not affected in any manner materially adverse to any party.  Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon a suitable and equitable
substitute provision to effect the original intent of the parties.


 


(j)                                     Entire
Agreement.  This
Agreement and the agreements referred to herein constitute the full and entire
understanding and agreement between the parties and supersedes all prior
written or oral agreements and understandings between the parties with respect
to the subject matter hereof.


 


[signature page follows]


 


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IN WITNESS WHEREOF,
Parent and
Stockholder have caused this Agreement to be executed as of the date first
written above.


 


 


	
   

  	
  Fairfax
  Financial Holdings Limited

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [STOCKHOLDER]

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  [Address]

  
	
   

  	
  [Address]

  
	
   

  	
  [FAX]