EXHIBIT 10.3 


FORM OF STOCKHOLDERS AGREEMENT


dated as of
             ,
2009


by and


among


AMERICAN INTERNATIONAL GROUP, INC.,


AMERICAN HOME ASSURANCE COMPANY,


and


TRANSATLANTIC HOLDINGS, INC.






TABLE OF CONTENTS


	
 

	
 

	
 

	
 

	
 


	
ARTICLE I

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
DEFINITIONS
 AND INTERPRETATION

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
Section 1.1.

	
 

	
Definitions

	
 

	
2


	
Section 1.2.

	
 

	
Interpretation

	
 

	
5


	
 

	
 

	
 

	
 

	
 


	
ARTICLE II

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
VOTING AGREEMENTS

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
Section 2.1.

	
 

	
Voting
 Agreements

	
 

	
6


	
Section 2.2.

	
 

	
Termination
 of Article II

	
 

	
6


	
 

	
 

	
 

	
 

	
 


	
ARTICLE III

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
STANDSTILL

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
Section 3.1.

	
 

	
Acquisition
 of Common Stock

	
 

	
6


	
Section 3.2.

	
 

	
Certain
 Restrictions

	
 

	
7


	
Section 3.3.

	
 

	
Termination
 of Article III

	
 

	
9


	
 

	
 

	
 

	
 

	
 


	
ARTICLE IV

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
TRANSFER RESTRICTIONS

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
Section 4.1.

	
 

	
General
 Transfer Restrictions

	
 

	
9


	
Section 4.2.

	
 

	
Restrictions
 on Transfer

	
 

	
9


	
Section 4.3.

	
 

	
Securities
 Act

	
 

	
10


	
 

	
 

	
 

	
 

	
 


	
ARTICLE V

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
COVENANTS AND OTHER MATTERS

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
Section 5.1.

	
 

	
Other
 Agreements

	
 

	
10


	
Section 5.2.

	
 

	
Actions
 Requiring Consent

	
 

	
11


	
Section 5.3.

	
 

	
Indemnification

	
 

	
11


	
Section 5.4.

	
 

	
Information
 Rights

	
 

	
12


	
 

	
 

	
 

	
 

	
 


	
ARTICLE VI

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
REPRESENTATIONS AND WARRANTIES

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
Section 6.1.

	
 

	
Representations
 and Warranties of AIG and AHAC

	
 

	
12





i






	
 

	
 

	
 

	
 

	
 


	
Section 6.2.

	
 

	
Representations
 and Warranties of the Company

	
 

	
13


	
 

	
 

	
 

	
 

	
 


	
ARTICLE VII

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
MISCELLANEOUS AND GENERAL

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
Section 7.1.

	
 

	
Termination

	
 

	
14


	
Section 7.2.

	
 

	
Expenses

	
 

	
14


	
Section 7.3.

	
 

	
Amendment
 and Waiver

	
 

	
15


	
Section 7.4.

	
 

	
Counterparts

	
 

	
15


	
Section 7.5.

	
 

	
GOVERNING
 LAW AND VENUE; WAIVER OF JURY TRIAL

	
 

	
15


	
Section 7.6.

	
 

	
Notices

	
 

	
16


	
Section 7.7.

	
 

	
Entire
 Agreement

	
 

	
16


	
Section 7.8.

	
 

	
No Third
 Party Beneficiaries

	
 

	
17


	
Section 7.9.

	
 

	
Confidentiality

	
 

	
17


	
Section
 7.10.

	
 

	
Severability

	
 

	
17


	
Section
 7.11.

	
 

	
Specific
 Performance; No Special Damages

	
 

	
17


	
Section
 7.12.

	
 

	
Assignment

	
 

	
17


	
Section
 7.13.

	
 

	
Effective
 Time

	
 

	
18


	
 

	
 

	
 

	
 

	
 


	
 

	
 

	
 

	
 

	
 


	
Schedule
 6.1(c) Consents and Approvals of AIG and AHAC

	
 

	
 


	
Schedule
 6.2(c) Consents and Approvals of the Company

	
 

	
 





ii






STOCKHOLDERS AGREEMENT


                    STOCKHOLDERS
AGREEMENT, dated as of
                    ,
2009 (this “Agreement”), by and between TRANSATLANTIC HOLDINGS, INC., a
Delaware corporation (the “Company”), AMERICAN INTERNATIONAL GROUP,
INC., a Delaware corporation (“AIG”), and AMERICAN HOME ASSURANCE
COMPANY, a New York domiciled insurance company (“AHAC”, and together
with AIG, “Stockholder”). 


RECITALS


                    WHEREAS,
the Company and Stockholder have entered into a Master Separation Agreement,
dated as of May 28, 2009 (the “Separation Agreement”), to effect the
orderly separation of Stockholder and the Company; 


                    WHEREAS,
concurrently with the execution of the Separation Agreement, the Company filed
a prospectus supplement to the prospectus contained in Post-Effective Amendment
No. 1 to its registration statement on Form S-3 with the SEC for a public
offering of all or some of the Shares (as defined below); 


                    WHEREAS,
as of the date hereof, AIG directly Beneficially Owns 17,073,690 shares of
common stock, par value $1.00 per share, of the Company (“Common Stock”)
(collectively, the “AIG Shares”); 



                    WHEREAS,
as of the date hereof, AHAC directly Beneficially Owns 22,018,972 shares of
Common Stock (collectively, the “AHAC Shares”, and together with the AIG
Shares, the “Shares”);  


                    WHEREAS,
pursuant to the Separation Agreement, Stockholder and the Company have agreed
that if the Shares to be Beneficially Owned by Stockholder immediately
following the sale of the Shares agreed to be sold pursuant to the Underwriting
Agreement (without giving effect to the Underwriters’ option to purchase additional shares)
would constitute at least 10% of the outstanding Common Stock following the
Closing, the parties hereto would enter into this Agreement at Closing; and 


                    WHEREAS,
each of Stockholder and the Company desires, for its mutual benefit and
protection, to enter into this Agreement with respect to certain matters
relating to the operations and management of the Company, the disposition and
voting of the Shares and certain other matters set forth herein. 


                    NOW,
THEREFORE, in consideration of the foregoing and for other good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, and
intending to be legally bound hereby, each of the Company and Stockholder
agrees as follows: 






ARTICLE I


DEFINITIONS AND INTERPRETATION


                    Section
1.1. Definitions. Unless otherwise defined herein, all capitalized terms
used herein shall have the same meanings as set forth in the Separation
Agreement. For purposes of this Agreement, the following terms have the
meanings set forth below: 


                    “Affiliate”
means, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with such Person; provided
that, except as expressly provided herein, none of the (A)(i) the FRBNY or the
U.S. Department of the Treasury or their respective Representatives, (ii) the
AIG Credit Facility Trust, (iii) any insurance regulatory authority, (iv) the
IRS or any other tax authority or (v) any other Person controlled by any of the
foregoing, nor (B) the Company and its Subsidiaries shall be deemed Affiliates
of Stockholder. 


                    
“Agreement” is defined in the Preamble. 


                    
“AHAC” is defined in the Preamble. 


                    
“AHAC Shares” is defined in the Recitals. 


                    
“AIG” is defined in the Preamble. 


                    
“AIG Indemnified Parties” is defined in Section 5.3(b). 


                    
“AIG Shares” is defined in the Recitals. 


                    
“Banks” is defined in Section 4.2(a)(iii). 


                    
“Beneficial Ownership”, “Beneficial Owner” and “Beneficially
Own” refer to ownership by any Person who, directly or indirectly, through
any contract, arrangement, understanding, relationship or otherwise, has or
shares (i) voting power which includes the power to vote, or to direct the
voting of, such security; and/or (ii) investment power which includes the power
to dispose, or to direct the disposition of, such security; and shall otherwise
be interpreted in accordance with the term “beneficial ownership” as defined in
Rule 13d-3 adopted by the SEC under the Exchange Act. 


                    
“Board” means the board of directors of the Company. 


                    
“Change of Control” shall mean the occurrence of any of the following
events: (i) Stockholder and its Affiliates become the Beneficial Owners of more
than 50% of the outstanding Voting Stock; (ii) a merger or consolidation of the
Company with or into another Person or the merger or consolidation of another
Person into the Company, as a result of which transaction or series of related
transactions Stockholder and its Affiliates become the Beneficial Owners of
more than 50% of the Voting Stock outstanding immediately after such
transaction or transactions; or (iii) the consummation of the sale, transfer,
lease or other disposition (but not including a transfer, lease or other
disposition by pledge or mortgage to a bona fide Lender) of 


2






all or
substantially all of the assets of the Company and the Company Subsidiaries to
Stockholder or its Affiliates. For the avoidance of doubt, Stockholder’s
Beneficial Ownership of more than 50% of the outstanding Voting Stock prior to
the date hereof shall not be considered a “Change of Control” for purposes of
this definition. 


                    
“Common Stock” is defined in the Recitals. 


                    
“Company” is defined in the Preamble. 


                    
“Company Indemnified Parties” is defined in Section 5.3(a). 


                    
“Company Transaction Proposal” is defined in Section 3.2(a)(ii)(A).



                    
“Director” means any member of the Board. 


                    
“Equity Securities” means any and all shares of capital stock of the
Company, including, without limitation, any and all shares of Common Stock and
Preferred Stock of the Company, securities of the Company convertible into, or
exchangeable or exercisable for, such shares, and options, warrants or other
rights to acquire such shares. 


                    
“Exchange Act” means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder. 


                    
“Fundamental Change” means the occurrence of any of the following: (i)
the consummation of any merger, consolidation, share exchange, recapitalization
or other business combination transaction (or series of related transactions)
as a result of which the Voting Stock immediately prior to such transaction (or
series of related transactions) is converted into and/or continues to
represent, in the aggregate, less than 50% of the outstanding securities having
the right to vote for the election of directors of the Survivor of a Fundamental
Change; 


                              
(ii) any Person or Group, together with any Affiliates thereof, becomes, directly
or indirectly, the Beneficial Owner of more than 50% of the outstanding Voting
Stock of the Company; 


                              
(iii) the consummation of the sale, transfer, lease or disposition by the
Company or by one or more of its Subsidiaries of all or substantially all of
the assets, business or securities of the Company (on a consolidated basis) to
any Person or Group (other than the Company or its wholly owned Subsidiaries);
or 


                              
(iv) during any period, the directors of the Company as of the date hereof (or
any directors nominated by such directors) cease for any reason to constitute a
majority of the Directors of the Board. 


                    “Group”
shall have the meaning assigned to it in Section 13(d)(3) of the Exchange Act. 


                    “Independent
Director” means any Director who without regard to whether the Company or
Stockholder is listed on the NYSE, is or would be an “independent director”
with 


3






respect to
both the Company and Stockholder pursuant to Section 303A.02 of the New York
Stock Exchange Listed Company Manual (or any successor provision thereof that
is no less stringent than such section as in effect on the date hereof). For
purposes of this Agreement, the Independent Directors shall not be deemed
Affiliates of Stockholder. 


                    “Lenders”
is defined in Section 4.2(a)(iii). 


                    “NYSE”
means the New York Stock Exchange, Inc. 


                    “Permitted
Transferee” means (i) any Affiliate directly or indirectly controlled by
Stockholder; or (ii) the FRBNY, the U.S. Department of Treasury or any other
Person as directed by the FRBNY or the U.S. Department of Treasury. 


                    “Preferred
Stock” means the shares of preferred stock, par value $1.00 per share, of
the Company and any securities issued in respect thereof, or in substitution
therefor, in connection with any stock split, dividend or combination, or any
reclassification, recapitalization, merger, consolidation, exchange or other
similar reorganization. 


                    “Public
Offering” means a public offering of shares of Common Stock pursuant to an
effective registration statement (other than on Form S–4, Form S–8 or their
equivalent) filed with the SEC pursuant to the Securities Act. 


                    “Secured
Loan” is defined in Section 4.2(a)(iii). 


                    “Securities
Act” means the Securities Act of 1933, as amended, and the rules and
regulations thereunder. 



                    “Separation
Agreement” is defined in the Recitals. 



                    “Shares” is defined in the Recitals. 



                    “Stockholder” is defined in the Preamble.  



                    “Survivor
of a Fundamental Change” means (a) the issuer of the securities received by
the holders of Common Stock (in their capacities as such) upon the occurrence
of a Fundamental Change, to the extent the holders of Common Stock receive
other securities in exchange, conversion or substitution of their shares of
Common Stock in the transaction that resulted in such Fundamental Change or (b)
the Company (or its successor) in all other circumstances of a Fundamental
Change. 


                    “Termination
Date” is defined in Section 7.1(ii). 



                    “Transfer”
means, directly or indirectly, to sell, transfer, assign, pledge, encumber,
hypothecate or similarly dispose of (by operation of law or otherwise), either
voluntarily or involuntarily, or to enter into any contract, option or other
arrangement or understanding with respect to the sale, transfer, assignment,
pledge, encumbrance, hypothecation or similar disposition of (by operation of
law or otherwise), any Shares or any interest in any Shares; provided, however,
that a merger or consolidation in which Stockholder or any of its  


4






Affiliates is
a constituent corporation shall not be deemed to be the Transfer of any Shares
Beneficially Owned by such Person (provided that a purpose of any such
transaction is not to avoid the provisions of this Agreement and that the
successor or surviving Person to such merger or consolidation, if not
Stockholder or such Affiliate, expressly assumes all obligations of Stockholder
or such Affiliate, as the case may be, under this Agreement). 


                    “Voting
Stock” means shares of Common Stock and any other securities of the Company
or its successor having the power to vote in the election of Directors of the
Company or its successor. 


                    Section
1.2. Interpretation. (a) The headings in this Agreement are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions of this
Agreement. 


                    
(b) The parties have participated jointly in negotiating and drafting this
Agreement. In the event that an ambiguity or a question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provision of this
Agreement. 


                    
(c) For purposes of this Agreement, except where otherwise expressly provided
or unless the context otherwise necessarily requires: (i) references to this
Agreement shall include a reference to all exhibits and schedules hereto; (ii)
the words “hereof”, “herein” and “hereto”, and words of similar import, when
used in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement; (iii) references to the Preamble,
Recitals, Articles, Sections or Schedules are to the preamble, recitals,
articles, sections or schedules to this Agreement; (iv) whenever the words
“include,” “includes” or “including” are used in this Agreement, they shall be
deemed to be followed by the words “without limitation” and shall not be
construed to mean that the examples given are an exclusive list of the topics
covered; (v) meanings specified in this Agreement are applicable to both the
singular and plural forms of these terms and to the masculine, feminine and
neuter genders, as the context requires; (vi) references to a Person include
its successors and permitted assigns; (vii) references to any agreement,
instrument or other document means such agreement, instrument or other document
as amended, modified or supplemented from time to time, including by waiver or
consent, and all attachments thereto and instruments incorporated therein;
(viii) if a word or phrase is defined, the other grammatical forms of such word
or phrase have a corresponding meaning; (ix) references to any Law is a
reference to that Law and the rules and regulations adopted or promulgated
thereunder, in each case, as amended, modified or supplemented as of the date
on which the reference is made, and all attachments thereto and instruments
incorporated therein; (x) references to any section of any statute, listing
rule, rule, standard, regulation or other law include any successor to such
section; (xi) references to times of day or dates are to local times or dates
in New York, New York; and (xii) references to currency are references to the
lawful money of the United States. 


5







ARTICLE II


VOTING AGREEMENTS


                    Section
2.1. Voting Agreements. (a) Stockholder shall vote at every duly called
annual or special meeting of stockholders of the Company, and at every
postponement or adjournment thereof, or act by written consent for all of the
Shares Beneficially Owned by it entitled to vote thereat: (i) in the manner
recommended by the Board with respect to the election of any Director nominee
or removal of any existing Director of the Board; and (ii) in favor of each matter
required to effectuate any provision of this Agreement. Notwithstanding the
foregoing, if Stockholder Beneficially Owns more than 30% of the outstanding
Common Stock, Stockholder shall vote the number of shares Beneficially Owned by
it in excess of 30% of the outstanding Common Stock in a manner proportionate
to the holders of the Common Stock (other than Stockholder, stockholders of the
Company Beneficially Owning more than 10% of the outstanding Common Stock and
directors and officers of the Company) voting on such matter in connection with
any election of any Director nominee or removal of any existing Director of the
Board. 


                    (b)
Stockholder shall cause any and all Shares Beneficially Owned by it and
entitled to Vote thereat to be present in person or represented by proxy at all
annual and special meetings of stockholders of the Company to the extent
necessary so that all Shares Beneficially Owned by it shall be counted as
present for the purposes of determining the presence of a quorum at such
meeting and to vote such shares in accordance with Section 2.1(a).


                    Section
2.2. Termination of Article II. This Article II shall terminate
and be of no further effect at such time as the Shares Beneficially Owned by
Stockholder no longer constitute at least 10% of the outstanding Common Stock.
Notwithstanding the foregoing, the rights and obligations of Stockholder under
this Article II shall survive a Fundamental Change to the extent that
the Shares Beneficially Owned by Stockholder continue to constitute at least
10% of the total securities having the right to vote for the election of
directors of the Survivor of a Fundamental Change; provided that, for
all purposes of this Article II, if the Company is not the Survivor of a
Fundamental Change, the board of directors of the Survivor of a Fundamental
Change shall be substituted for the Board. 


ARTICLE III


STANDSTILL


                    Section
3.1. Acquisition of Common Stock. (a) Except as provided in Sections
3.1(b) and 3.2, Stockholder covenants and agrees with the Company
that it will not, and will cause its Affiliates and their respective directors
and executive officers not to, directly or indirectly, Beneficially Own or
acquire, offer or propose to acquire, or agree to acquire, whether by purchase,
tender or exchange offer, through the acquisition of control of another Person
(including by way of merger or consolidation), by joining a partnership,
syndicate or other Group or otherwise, the Beneficial Ownership of, any shares
of Common Stock other than the shares of Common Stock Beneficially Owned by
Stockholder and its Affiliates and their respective directors and executive
officers as of the date hereof (except by way of stock splits, stock 


6






dividends,
stock reclassifications or other distributions, recapitalizations or offerings
made available to and, if applicable, exercised on a pro rata basis by, holders
of Common Stock generally. 


                    (b)
Notwithstanding the foregoing, the prohibition set forth in Section 3.1(a)
shall not apply to (i) the acquisition (whether by merger, consolidation or
otherwise) by Stockholder or an Affiliate thereof of any entity that
Beneficially Owns shares of Common Stock at the time of the consummation of
such acquisition, provided that in connection with any such acquisition
Stockholder or its Affiliate, as the case may be, (A) divests the shares of
Common Stock Beneficially Owned by the acquired entity at the time of the
consummation of such acquisition (other than any shares of Common Stock
acquired in the ordinary course activities of the acquired entity as
contemplated by clause (ii) below) within a reasonable period of time after the
consummation of such acquisition, and (B) if any annual or special meeting of
shareholders is held prior to the disposition thereof, votes such shares on
each matter presented at any annual or special meeting of the stockholders or
by written consent in a manner proportionate to the holders of the Common Stock
(other than Stockholder, stockholders of the Company Beneficially Owning more
than 10% of the outstanding Common Stock, and directors and officers of the
Company) voting on such matter or (ii) ordinary course activities of
Stockholder and its Affiliates and their respective directors and executive
officers, including (A) proprietary and third party fund and asset management
activities, (B) brokerage and securities trading activities, (C) financial
services and insurance activities and (D) the acquisition of shares of Common
Stock in connection with securing or collecting a debt previously contracted in
good faith; provided that the purpose of any such transaction is not to
avoid the provisions of this Agreement. 


                    (c)
For the avoidance of doubt, this Agreement shall not be deemed to apply to any
Common Stock owned or acquired by individuals who are officers or employees of
the Company or any of its Subsidiaries or directors of the Company or any of
its Subsidiaries. 


                    Section
3.2. Certain Restrictions. (a) Except as required in connection with the
execution, delivery or performance of this Agreement and as otherwise required,
permitted or contemplated by this Agreement or any other Transaction Agreement
(including with respect to any Transfer permitted pursuant to Section 4.2(a)),
Stockholder agrees not to, and to cause each of its Affiliates and its and
their respective directors and executive officers not to, directly or
indirectly, alone or in concert with others, without express authorization of
the Company: 


	
 

	
 


	
 

	
                    (i)
 effect, initiate, propose or otherwise solicit stockholders of the Company
 for the approval of one or more stockholder proposals or induce or attempt to
 induce any other Person to effect, initiate, propose or otherwise solicit any
 stockholder proposal; 


	
 

	
 


	
 

	
                    (ii)
 (A) propose or seek to effect a Change of Control of the Company by way of
 merger, consolidation, recapitalization, reorganization, sale, lease,
 exchange, pledge or other disposition of substantially all assets of the
 Company and the Company Subsidiaries or other business combination involving,
 or a tender or exchange offer for securities of, the Company or any of the
 Company Subsidiaries or any material portion of the business or assets of the
 Company or any of the Company Subsidiaries or any other 





7






	
 

	
 


	
 

	
type of
 transaction that would otherwise result in a Change of Control of the Company
 (any such action described in this clause (A), a “Company Transaction
 Proposal”), (B) seek to exercise any control or influence over the
 management of the Company or the Board or any of the businesses, operations
 or policies of the Company or (C) present to the Company’s stockholders or
 any third party any proposal constituting or that can reasonably be expected
 to result in a Company Transaction Proposal; 


	
 

	
 


	
 

	
                    (iii)
 solicit proxies (or written consents) or assist or participate in any other
 way, directly or indirectly, in any solicitation of proxies (or written
 consents), or otherwise become a “participant” in a “solicitation”, or assist
 any “participant” in a “solicitation” (as such terms are defined in Rule
 14a-1 of Regulation 14A and Instruction 3 of Item 4 of Schedule 14A,
 respectively, under the Exchange Act) in opposition to the recommendation or
 proposal of the Board, or recommend or request or induce or attempt to induce
 any other Person to take any such actions, or seek to advise, encourage or
 influence any other Person with respect to the voting of (or the execution of
 a written consent in respect of) shares of Common Stock or grant a proxy with
 respect to the voting of (or execution of a written consent in respect of)
 shares of Common Stock to any Person other than an officer or agent of
 Stockholder or the Company; 


	
 

	
 


	
 

	
                    (iv)
 form, join in or in any other way (including by deposit of Common Stock)
 participate in a partnership, pooling agreement, syndicate, voting trust or
 other Group (other than a Group comprised solely of Stockholder, its
 Affiliates and its Permitted Transferees) with respect to Common Stock, or
 enter into any agreement or arrangement or otherwise act in concert with any
 other Person, for the purpose of acquiring, holding, voting or disposing of
 Common Stock, other than in respect of any agreement or arrangement with the
 FRBNY or any other Person as directed by the FRBNY or the U.S. Department of
 the Treasury; 


	
 

	
 


	
 

	
                    (v)
 take any action which might cause the Company to be required to make a public
 announcement regarding any of the types of matters set forth in (i) through
 (iv) above; 


	
 

	
 


	
 

	
                    (vi)
 enter into any discussions or arrangements with any third party with respect
 to any of the foregoing; or 


	
 

	
 


	
 

	
                    (vii)
 request, or induce or encourage any other Person to request, that the Company
 amend or waive any of the provisions of this Agreement. 





                    (b)
Notwithstanding the foregoing restrictions, if, at any time, (i) the Company
has entered into a definitive agreement, the consummation of which would result
in a Fundamental Change or (ii) any Person shall have commenced and not
withdrawn a bona fide public tender or exchange offer which if consummated would result in a
Fundamental Change, then the limitations set forth in Section 3.2 shall
not be applicable to Stockholder for so long as the conditions described in
this Section 3.2(b) continue. 


8







                    Section
3.3. Termination of Article III. This Article III shall terminate and be
of no further effect at such time as the Shares Beneficially Owned by
Stockholder no longer constitute at least 10% of the outstanding Common Stock.


ARTICLE IV


TRANSFER RESTRICTIONS


                    Section
4.1. General Transfer Restrictions. The right of Stockholder to Transfer
any Shares is subject to the restrictions set forth in this Article IV,
and no Transfer of Shares by Stockholder may be effected except in compliance
with this Article IV. Any attempted Transfer in violation of this
Agreement shall be of no effect and shall be null and void, regardless of
whether the purported transferee has any actual or constructive knowledge of
the Transfer restrictions set forth in this Agreement, and shall not be
recorded on the stock transfer books of the Company. 


                    Section
4.2. Restrictions on Transfer. (a) Without the prior written consent of
the Company as approved by the Board, Stockholder shall not Transfer any Shares
except as expressly permitted by, and in compliance with, the following
provisions of this Section 4.2(a): 


	
 

	
 


	
 

	
                    (i)
 Stockholder may Transfer any or all of the Shares (A) to the Company or any
 of its Subsidiaries, (B) pursuant to any tender offer, exchange offer,
 merger, reclassification, reorganization, recapitalization or other similar
 transaction in which stockholders of the Company are offered, permitted or
 required to participate as holders of any of the Company’s Voting Stock, (C)
 in connection with any Public Offering, provided that the underwriters
 or placement agent in such Public Offering implement reasonable protections
 to the extent practicable so that such Public Offering will not be made to,
 and would not reasonably facilitate the acquisition of Common Stock by, a
 Person or Group who after such Public Offering would Beneficially Own more
 than 10% of the Common Stock, (D) to any other Person or Group to the extent
 such Person or Group would not, to the knowledge of Stockholder after due
 inquiry (it being understood that due inquiry shall not be required in
 circumstances where the purchaser in a sale transaction is not reasonably
 identifiable, such as in a “brokers’ transaction”, as defined in Rule 144
 under the Securities Act), upon completion of a Transfer of Shares by
 Stockholder Beneficially Own more than ten percent (10%) of the outstanding
 Common Stock or (E) to any other Person or Group approved by, or that
 acquires shares of Common Stock in connection with any transaction approved
 or recommended by, the Board; 


	
 

	
 


	
 

	
                    (ii)
 Stockholder may Transfer any or all of the Shares to any Permitted
 Transferee; provided that such Permitted Transferee (unless such
 Permitted Transferee is the FRBNY or the U.S. Department of the Treasury) (A)
 executes a counterpart to this Agreement, thereby agreeing to be bound by the
 terms hereof, and (B) agrees that the representations, covenants and other
 agreements made by Stockholder herein shall be deemed to have been made by
 such Permitted Transferee. Upon any such Transfer, the Permitted Transferee
 shall be entitled to the same rights, and subject to the obligations and
 restrictions, contained herein applicable to Stockholder at the time of such
 Transfer. 





9






	
 

	
 


	
 

	
For purposes
 of calculating the Shares Beneficially Owned by Stockholder at any time in
 accordance with this Agreement, any Shares Transferred to any Permitted
 Transferee in accordance with this Section 4.2(a)(ii) shall be
 included in such calculation. 


	
 

	
 


	
 

	
                    (iii)
 Stockholder may make a bona fide pledge of any or all of the Shares to (A)
 the FRBNY or any other Person as directed by the FRBNY or the U.S. Department
 of the Treasury with respect to any agreement or arrangement between
 Stockholder and its Affiliates, on the one hand, and the FRBNY or any other
 Person as directed by the FRBNY or the U.S. Department of the Treasury, on
 the other hand, and (B) any bank or financial institution (“Banks”,
 and together with the FRBNY and the Persons referred to in clause (A) above,
 “Lenders”) solely for the purpose of securing bona fide indebtedness
 for borrowed money (a “Secured Loan”), and such Lenders may execute a
 bona fide foreclosure upon any Shares so pledged upon the terms and subject
 to the conditions set forth in any agreements concerning such pledge. For the
 avoidance of doubt, any pledge or other contractual encumbrance or
 foreclosure resulting from any such Secured Loan or arrangement with the
 FRBNY or any other Person referred to in clause (A) above (including an
 obligation to repay such Secured Loan or other obligation with the proceeds
 of any Transfer of, or dividend or distribution on, the Shares) shall not be
 deemed to be a Transfer associated with the Shares. 





                    (b)
This Section 4.2 shall terminate and be of no further effect (i) at such
time as the Shares Beneficially Owned by Stockholder no longer constitute at
least 10% of the outstanding Common Stock or (ii) or upon the occurrence of a
Fundamental Change. 


                    Section
4.3. Securities Act. (a) The Company may make a notation on its records
or give instructions to any transfer agents or registrars for the Common Stock
in order to implement the restrictions on Transfer set forth in Section 4.2.
In connection with any Transfer of Shares other than (x) a Transfer pursuant to
a Public Offering or (y) a sale pursuant to Rule 144 under the Securities Act,
the transferor shall provide the Company with such customary certificates,
opinions and other documents as the Company may reasonably request in respect
of compliance of such Transfer with applicable securities registration
requirements. 


                    (b)
Subject to the requirement of applicable Law, Stockholder will not be subject
to the Company’s trading policies requiring pre-clearance or limiting trading
to specified dates and Stockholder acknowledges its obligation hereunder not to
Transfer Shares in contravention of applicable Law, including each of Section
10(b) of and Rule 10b-5 under the Exchange Act. 


ARTICLE V


COVENANTS AND OTHER MATTERS


                    Section
5.1. Other Agreements. In addition to the specific agreements, documents
and instruments described in this Agreement, the parties agree to execute or
cause to be executed by the appropriate parties and deliver, as appropriate,
such other agreements, instruments and other documents as may be necessary or
desirable in order to consummate and make effective the transactions
contemplated by this Agreement. 


10






                    Section
5.2. Actions Requiring Consent. For as long as the Shares Beneficially
Owned by Stockholder constitute at least 10% of the outstanding Common Stock,
the Company must obtain Stockholder’s written consent before: 


                    (a)
entering into any agreement or arrangement or taking any other action that (i)
restricts the ability of Stockholder or its Affiliates to acquire or
Beneficially Own shares of Common Stock or to Transfer the Shares in a manner
not otherwise prohibited by the terms of this Agreement, (ii) is inconsistent
or conflicts with the Company’s ability to perform its obligations under this
Agreement or any other Transaction Agreements or the transactions contemplated
hereby or thereby or (iii) is inconsistent or conflicts with the rights or
obligations of Stockholder under this Agreement; or 


                    (b)
amending, modifying or repealing (whether by merger, consolidation, conversion
or otherwise) any provision of the Restated Certificate of Incorporation or
Bylaws of the Company that implements or supports Stockholder’s rights under
this Agreement or any other Transaction Agreement or adopting any provisions
inconsistent herewith or therewith. 


                    Section
5.3. Indemnification. (a) Each of AIG and AHAC shall indemnify, defend
and hold harmless the Company and its Representatives (collectively, the “Company
Indemnified Parties”), severally and not jointly, against, and reimburse
any Company Indemnified Party for, all Losses that such Company Indemnified
Party may at any time suffer or incur, or become subject to as a result of or
in connection with: 


	
 

	
 


	
 

	
                    (i)
 the inaccuracy or breach of any representation or warranty made by it in this
 Agreement; or 


	
 

	
 


	
 

	
                    (ii)
 any breach or failure by it to perform any of its covenants or obligations
 contained in this Agreement. 





                    (b)
The Company shall indemnify, defend and hold harmless AIG, AHAC, and their
respective Representatives (collectively, the “AIG Indemnified Parties”)
against, and reimburse any AIG Indemnified Party for, all Losses that such AIG
Indemnified Party may at any time suffer or incur, or become subject to as a
result of or in connection with: 


	
 

	
 


	
 

	
                    (i)
 the inaccuracy or breach of any representation or warranty made by the
 Company in this Agreement; or 


	
 

	
 


	
 

	
                    (ii)
 any breach or failure by the Company to perform any of its covenants or
 obligations contained in this Agreement. 





                    (c)
Claims for indemnification under this Section 5.3 shall be made pursuant
to the procedures set forth in section 8.04 and section 8.05 of the Separation
Agreement. 


                    (d)
Except for the rights any AIG Indemnified Party or Company Indemnified Party is
or becomes entitled to under Law or under the Restated Certificate of
Incorporation or Bylaws of the Company or any of its Subsidiaries and for
injunctive and provisional relief (including specific performance) provided for
in Section 7.11, each party hereto acknowledges and agrees that the
indemnification provisions of this Section 5.3 shall be the sole and
exclusive 


11






remedies of
the parties hereto for any breach of the representations or warranties or any
breach or failure by the other party to perform any of its covenants or
obligations hereunder. 


                    Section
5.4. Information Rights. The Company will deliver to an officer
designated by Stockholder copies of all materials and other information sent to
the Board (and any committee thereof) of the Company and to the board of
directors of any Company Subsidiary (and any committee thereof) at the same time
as such materials are sent to the Directors of the Company and the directors of
any Company Subsidiary, or any of their respective committees, in their
respective capacities as directors of the Company or any Company Subsidiary,
except as prohibited by applicable Law; provided that any such
information shall be subject to the terms of section 3.18 of the Separation
Agreement as if the Company or a Company Subsidiary provided such information
directly to Stockholder or any of its Affiliates. Notwithstanding the
foregoing, Stockholder shall not be entitled to any information (1) that is
sent to the Board of the Company (or any committee thereof) or the board of
directors of any Company Subsidiary (or any committee thereof) relating to any
matter or transaction to which Stockholder is a party or otherwise “interested”
and (2) that is sent solely to a committee thereof required by Law,
Self-Regulatory Organization or advice of counsel to be comprised solely of
Independent Directors. 


ARTICLE VI


REPRESENTATIONS AND WARRANTIES


                    Section
6.1. Representations and Warranties of AIG and AHAC. Each of AIG and
AHAC hereby represents and warrants, severally and not jointly, to the Company
as follows: 


                    (a)
Incorporation and Authority of AIG and AHAC. AIG is a corporation duly
incorporated, validly existing and in good standing under the Laws of the State
of Delaware. AHAC is an insurance company duly organized, validly existing and
in good standing under the Laws of the State of New York. It has full legal
power and authority, and has taken all required legal action necessary, to
execute and deliver this Agreement and all other agreements, instruments,
certificates, notices and other documents as are necessary to consummate the
transactions contemplated hereby and otherwise to carry out the terms of this
Agreement. It has duly and validly authorized the execution and delivery of
this Agreement, and the consummation of the transactions contemplated hereby
has been duly and validly authorized by it and no other proceedings on its part
are necessary to authorize the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby. 


                    (b)
Enforceability. This Agreement has been duly and validly executed by it
and, assuming due authorization, execution and delivery by the Company
constitutes, or upon execution and delivery thereof will constitute, the legal,
valid and binding agreement of it, enforceable against it in accordance with
the terms hereof, subject to the effect of any applicable bankruptcy,
reorganization, insolvency, moratorium, rehabilitation, liquidation, fraudulent
conveyance or similar Laws relating to or affecting creditors’ rights generally
and subject, as to enforceability, to the effect of general equitable
principles (regardless of whether enforcement is sought in a proceeding in
equity or at law). 


12






                    (c)
Consents and Approvals. Except as set forth on Schedule 6.1(c), no
consent, approval, waiver, authorization, notice or filing is required to be
obtained by it from, or to be given by it to, or made by it with, any
Governmental Authority or any other Person, in connection with the execution,
delivery and performance by it of this Agreement.  


                    (d)
Non-Contravention. The execution, delivery and performance by it of this
Agreement, and the consummation of the transactions contemplated hereby, do not
and will not (i) violate any provision of its Organizational Documents; (ii)
assuming the receipt of all consents, approvals, waivers and authorizations and
the making of the notices and filings set forth on Schedule 6.1(c), conflict
with, or result in the breach of, or constitute a default under, or result in
the termination, cancellation, modification or acceleration (whether after the
filing of notice or the lapse of time or both) of any right or obligation of
it under, or result in a loss of any benefit to which it is entitled under, any
Contract, or result in the creation of any Lien (other than Permitted Liens)
upon its assets and properties; or (iii) assuming the receipt of all consents,
approvals, waivers and authorizations and the making of the notices and filings
set forth on Schedule
6.1(c) or required to be made or obtained by the Company, violate, or result
in a breach of, or constitute a default under any Law, Governmental Order or
Self-Regulatory Organization Approval to which it is subject, other than, in
the cases of clauses (ii) and (iii), conflicts, breaches, terminations, defaults,
cancellations, accelerations, losses, violations or Liens that would not materially
impair or delay its ability to perform its obligations hereunder. 


                    (e)
Disclaimer. Except for the representations and warranties contained in
this Section 6.1, it does not make any other representation or warranty of any
kind or nature whatsoever, oral or written, express or implied, with respect to
it, any of its Affiliates, this Agreement or the transactions contemplated by
this Agreement.  


                    Section
6.2. Representations and Warranties of the Company. The Company hereby
represents and warrants to AIG and AHAC as follows: 


                    (a)
Incorporation and Authority of the Company. The Company is a corporation
duly incorporated, validly existing and in good standing under the Laws of the
State of Delaware. The Company has full legal power and authority, and has
taken all required legal action necessary, to execute and deliver this
Agreement and all other agreements, instruments, certificates, notices and
other documents as are necessary to consummate the transactions contemplated
hereby and otherwise to carry out the terms of this Agreement. The Company has
duly and validly authorized the execution and delivery of this Agreement to
which it is a party, and the consummation of the transactions contemplated
hereby has been duly and validly authorized by the Company and no other
proceedings on the part of the Company are necessary to authorize the execution
and delivery of this Agreement or the consummation of the transactions
contemplated hereby by the Company. 


                    (b)
Enforceability. This Agreement has been duly and validly executed by the
Company and, assuming due authorization, execution and delivery by AIG and
AHAC, constitutes, or upon execution and delivery thereof will constitute, the
legal, valid and binding agreement of the Company, enforceable against the
Company in accordance with its terms, subject to the effect of any applicable
bankruptcy, reorganization, insolvency, moratorium, 


13






rehabilitation,
liquidation, fraudulent conveyance or similar Laws relating to or affecting
creditors’ rights generally and subject, as to enforceability, to the effect of
general equitable principles (regardless of whether enforcement is sought in a
proceeding in equity or at law). 


                    (c)
Consents and Approvals. Except as set forth on Schedule 6.2(c),
no consent, approval, waiver, authorization, notice or filing is required to be
obtained by the Company from, or to be given by the Company to, or made by the
Company with, any Governmental Authority or other Person, in connection with
the execution, delivery and performance by the Company of this Agreement. 


                    (d)
Non-Contravention. The execution, delivery and performance by the
Company of this Agreement, and the consummation of the transactions
contemplated hereby, do not and will not (i) violate any provision of the
Organizational Documents of the Company; (ii) assuming the receipt of all
consents, approvals, waivers and authorizations and the making of the notices
and filings set forth on Schedule 6.2(c), to the Knowledge of the
Company, conflict with, or result in the breach of, or constitute a default
under, or result in the termination, cancellation, modification or acceleration
(whether after the filing of notice or the lapse of time or both) of any right
or obligation of the Company under, or result in a loss of any benefit to which
the Company is entitled under, any Contract, or result in the creation of any
Lien (other than Permitted Liens) upon the assets and properties of the
Company; or (iii) assuming the receipt of all consents, approvals, waivers and
authorizations and the making of notices and filings set forth on Schedule
6.2(c) or required to be made or obtained by AIG or any of its Affiliates,
to the Knowledge of the Company, violate or result in a breach of or constitute
a default under any Law, Governmental Order or Self-Regulatory Organization
Approval to which the Company is subject, other than, in the cases of clauses
(ii) and (iii), conflicts, breaches, terminations, defaults, cancellations,
accelerations, losses, violations or Liens that would not materially impair or
delay the Company’s ability to perform its obligations hereunder. 


                    (e)
Disclaimer. Except for the representations and warranties contained in
this Section 6.2, the Company does not make any other representation or
warranty of any kind or nature whatsoever, oral or written, express or implied,
with respect to the Company or any of the Company Subsidiaries, this Agreement
or the transactions contemplated by this Agreement. 


ARTICLE VII


MISCELLANEOUS AND GENERAL


                    Section
7.1. Termination. This Agreement shall terminate, except for this Article
VII and Section 5.3, which shall survive such termination, upon the
earlier of: (i) the date the Shares Beneficially Owned by Stockholder cease to
constitute at least 10% of the outstanding Common Stock or (ii) written consent
of the parties hereto (the “Termination Date”). For the avoidance of
doubt, after the Termination Date no party shall have any liability of any kind
to any other party under this Agreement, except with respect to Section 5.3.



                    Section
7.2. Expenses. All expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid in accordance with
section 9.01 of the Separation Agreement. 


14






                    Section
7.3. Amendment and Waiver. Except as otherwise provided herein, no
modification, amendment or waiver of any provisions of this Agreement, and no
giving of any consent provided for hereunder, shall be effective against the
Company or Stockholder unless such modification, amendment, waiver or consent
is approved by (i) a majority of the Directors then in office or (ii) any
committee thereof formed solely for the purpose of reviewing and approving
transactions or agreements between the Company and the Company Subsidiaries, on
the one hand, and Stockholder and its Affiliates, on the other hand. In
addition to the foregoing, no provision of this Agreement may be amended,
supplemented or modified except by a written instrument signed by all of the
parties hereto, and no provision of this Agreement may be waived except by a
written instrument signed by the party against whom the waiver is to be
effective. No failure or delay by any party hereto in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by Law. 


                    Section
7.4. Counterparts. This Agreement shall be effective upon delivery of
original signature pages or electronic copies thereof executed by each of the
parties. This Agreement may be executed in any number of counterparts, each
such counterpart being deemed to be an original instrument, and all such
counterparts shall together constitute one and the same agreement. 


                    Section
7.5. GOVERNING LAW AND VENUE; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT,
AND ALL CLAIMS AND DEFENSES ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
FORMATION, BREACH, TERMINATION OR VALIDITY OF THIS AGREEMENT, SHALL IN ALL
RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN ACCORDANCE WITH
THE LAW OF THE STATE OF DELAWARE. Each of the parties irrevocably and
unconditionally: 


	
 

	
 


	
 

	
                    (i)
 submits for itself and its property to the exclusive jurisdiction of the
 courts of the State of Delaware (and any appeals court therefrom) in any
 Action directly or indirectly arising out of or relating to this Agreement or
 the formation, breach, termination or validity of this Agreement, and agrees
 not to assert, as a defense in any action, suit or proceeding for the interpretation
 or enforcement hereof, that it is not subject thereto or that such action,
 suit or proceeding may not be brought or is not maintainable in said courts
 or that the venue thereof may not be appropriate or that this Agreement may
 not be enforced in or by such courts, and the parties hereto irrevocably
 agree that all claims with respect to such action or proceeding shall be
 heard and determined solely in Delaware state court; 


	
 

	
 


	
 

	
                    (ii)
 consents to jurisdiction over the Person of such parties and agrees that
 mailing of process or other papers in connection with any such action or
 proceeding in the manner provided in Section 7.6 or in such other
 manner as may be permitted by Law, shall be valid and sufficient service
 thereof; 


	
 

	
 


	
 

	
                    (iii)
 consents that any such Action may and shall be brought in such court and
 waives any objection that it may now or hereafter have to the venue or 





15






	
 

	
 


	
 

	
jurisdiction
 of any such Action in such court or that such court is an inconvenient forum
 for the Action and agrees not to assert, plead or claim the same; 


	
 

	
 


	
 

	
                    (iv)
 agrees that the final judgment of such court shall be enforceable in any
 court having jurisdiction over the relevant party or any of its assets; 


	
 

	
 


	
 

	
                    (v)
 irrevocably waives any right to remove any such Action from the Delaware
 Court of Chancery to any federal court; 


	
 

	
 


	
 

	
                    (vi)
 agrees that service of process in any such Action may be effected by mailing
 a copy of such process by registered or certified mail (or any substantially
 similar form of mail), postage prepaid, to such party at its address as
 provided in Section 7.6; and 


	
 

	
 


	
 

	
                    (vii)
 agrees that nothing in this Agreement shall affect the right to effect
 service of process in any other manner permitted by the applicable rules of
 procedure. 





                    (b)
EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER
THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY ACTION DIRECTLY
OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT OR THE FORMATION, BREACH, TERMINATION OR
VALIDITY OF THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (i) NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT THE OTHER PARTY WOULD NOT, IN THE EVENT OF ANY ACTION, SEEK
TO ENFORCE THE FOREGOING WAIVER, (ii) EACH SUCH PARTY UNDERSTANDS AND HAS
CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (iii) EACH PARTY MAKES THIS WAIVER
VOLUNTARILY, AND (iv) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT
BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
7.5. EITHER PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES TO
THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY. 


                    Section
7.6. Notices. All notices, requests, instructions, demands or other
communications to be given under this Agreement shall be given in accordance
with section 9.02 of the Separation Agreement.


                    Section
7.7. Entire Agreement. This Agreement, together with the agreements and
other documents and instruments referred to herein or annexed hereto,
constitute the entire agreement among the parties hereto, and supersede all
other prior agreements, understandings, representations and warranties both
written and oral, among the parties, with respect to the subject matter of this
Agreement. 


16






                    Section
7.8. No Third Party Beneficiaries. Except as provided in Section 5.3
with respect to Company Indemnified Parties and AIG Indemnified Parties, this
Agreement is for the sole benefit of the parties hereto and their successors
and permitted assigns, and nothing in this Agreement, express or implied, is
not intended to, and does not, confer upon any other Person any legal or
equitable right, benefit or remedy of any nature whatsoever under or by reason
hereunder. 


                    Section
7.9. Confidentiality. Stockholder agrees that any information provided to
it hereunder is confidential and shall only be disclosed by it to any other
Person in accordance with section 3.18 of the Separation Agreement. 


                    Section
7.10. Severability. The provisions of this Agreement shall be deemed
severable and the invalidity, illegality or unenforceability of any provision
hereto shall not affect the validity, legality or enforceability of the other
provisions hereof. If any provision of this Agreement, or the application
thereof to any Person or any circumstance, is invalid, illegal or
unenforceable, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated by this Agreement is not affected in
any manner materially adverse to any party hereto. Upon such determination that
any term or other provision is invalid, illegal or incapable of being enforced,
the parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties hereto as closely as possible in a
mutually acceptable manner in order that the transactions contemplated by this
Agreement be consummated as originally contemplated to the greatest extent
possible. 


                    Section
7.11. Specific Performance; No Special Damages. (a) The parties
acknowledge and agree that in the event that any of the provisions of this
Agreement are not performed in accordance with its specific terms or are
otherwise breached, irreparable damage would occur for which monetary damages
would not be an adequate remedy. The parties further acknowledge and agree
that, in addition to any other remedy to which such party is entitled to at Law
or in equity, the parties shall be entitled to enforce the terms of this
Agreement by decree of specific performance, without the necessity of proving
the inadequacy of monetary damages or of posting bond or other undertaking, as
a remedy and to obtain injunctive relief against any breach or threatened
breach hereof. In the event that any action is brought in equity to enforce the
provisions of this Agreement, no party hereto shall allege, and each party
hereto waives the defense or counterclaim that there is an adequate remedy at
Law. 


                    (b)
Each party (i) agrees that there shall be no special, consequential, indirect
or incidental damages, exemplary, punitive or multiple damages connected with
or resulting from any breach of this Agreement, or actions undertaken in
connection with or related hereto, including any such damages which are based
upon breach of contract, tort, breach of warranty, strict liability, statute,
operation of law or any other theory of recovery, except to the extent such
damages are actually incurred by a party hereunder to a third party, and (ii)
hereby waives any rights to claim such damages. 


                    Section
7.12. Assignment. Neither this Agreement nor any of the rights or
obligations of any party under this Agreement shall be assigned, in whole or in
part (by operation of law or otherwise), by any party without the prior written
consent of the other parties hereto 


17






except as and
to the extent expressly provided for in this Agreement; provided, however,
that no such assignment shall release the Company or Stockholder from any
liability or obligation under this Agreement. Any attempted assignment in
violation of this Section 7.12 shall be void. Subject to the foregoing,
this Agreement shall bind and inure to the benefit of and be enforceable by the
parties hereto and their respective successors and permitted assigns. 


                    Section
7.13. Effective Time. This Agreement shall become effective on the First
Time of Delivery if at such time the Shares Beneficially Owned by Stockholder
constitute at least 10% of the outstanding Common Stock. If the Shares
Beneficially Owned by Stockholder at the First Time of Delivery do not
constitute at least 10% of the outstanding Common Stock, this Agreement will be
of no force or effect. 


[Next page is the signature page.]


18






	
 

	
 

	
 


	
                    IN
 WITNESS WHEREOF, this Agreement has been duly executed and delivered by the
 duly authorized officers of the parties as of the date first written above.


	
 

	
 

	
 


	
 

	
AMERICAN
 INTERNATIONAL GROUP, INC.


	
 

	
 

	
 


	
 

	
By

	
 


	
 

	
 

	



	
 

	
 

	
Name:


	
 

	
 

	
Title:


	
 

	
 

	
 


	
 

	
AMERICAN
 HOME ASSURANCE COMPANY


	
 

	
 

	
 


	
 

	
By

	
 


	
 

	
 

	



	
 

	
 

	
Name:


	
 

	
 

	
Title:


	
 

	
 

	
 


	
 

	
TRANSATLANTIC
 HOLDINGS, INC.


	
 

	
 

	
 


	
 

	
By

	
 


	
 

	
 

	



	
 

	
 

	
Name:


	
 

	
 

	
Title: