Exhibit 10.4


STOCKHOLDERS AGREEMENT


dated as of June 4, 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

 	
  

 	
 1

 
	
 Section 1.2.

 	
 Interpretation

 	
  

 	
 4

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE II

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 VOTING AGREEMENTS

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 Section 2.1.

 	
 Voting Agreements

 	
  

 	
 4

 
	
 Section 2.2.

 	
 Termination of
 Article II

 	
  

 	
 5

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE III

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 STANDSTILL

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 Section 3.1.

 	
 Acquisition of
 Common Stock

 	
  

 	
 5

 
	
 Section 3.2.

 	
 Certain
 Restrictions

 	
  

 	
 6

 
	
 Section 3.3.

 	
 Termination of
 Article III

 	
  

 	
 7

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE IV

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 TRANSFER RESTRICTIONS

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 Section 4.1.

 	
 General Transfer
 Restrictions

 	
  

 	
 7

 
	
 Section 4.2.

 	
 Restrictions on
 Transfer

 	
  

 	
 7

 
	
 Section 4.3.

 	
 Securities Act

 	
  

 	
 8

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE V

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 COVENANTS AND OTHER MATTERS

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 Section 5.1.

 	
 Other Agreements

 	
  

 	
 8

 
	
 Section 5.2.

 	
 Actions Requiring
 Consent

 	
  

 	
 8

 
	
 Section 5.3.

 	
 Indemnification

 	
  

 	
 9

 
	
 Section 5.4.

 	
 Information Rights

 	
  

 	
 9

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VI

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 REPRESENTATIONS AND WARRANTIES

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 Section 6.1.

 	
 Representations
 and Warranties of AIG and AHAC

 	
  

 	
 10

 
	
 Section 6.2.

 	
 Representations
 and Warranties of the Company

 	
  

 	
 10

 
	
  

 	
  

 	
  

 	
  

 
	
 ARTICLE VII

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 MISCELLANEOUS AND GENERAL

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 Section 7.1.

 	
 Termination

 	
  

 	
 11

 



i 






	
  

 	
  

 	
  

 	
  

 
	
 Section 7.2.

 	
 Expenses

 	
  

 	
 12

 
	
 Section 7.3.

 	
 Amendment and
 Waiver

 	
  

 	
 12

 
	
 Section 7.4.

 	
 Counterparts

 	
  

 	
 12

 
	
 Section 7.5.

 	
 GOVERNING LAW AND
 VENUE; WAIVER OF JURY TRIAL

 	
  

 	
 12

 
	
 Section 7.6.

 	
 Notices

 	
  

 	
 13

 
	
 Section 7.7.

 	
 Entire Agreement

 	
  

 	
 13

 
	
 Section 7.8.

 	
 No Third Party
 Beneficiaries

 	
  

 	
 13

 
	
 Section 7.9.

 	
 Confidentiality

 	
  

 	
 13

 
	
 Section 7.10.

 	
 Severability

 	
  

 	
 13

 
	
 Section 7.11.

 	
 Specific
 Performance; No Special Damages

 	
  

 	
 14

 
	
 Section 7.12.

 	
 Assignment

 	
  

 	
 14

 
	
 Section 7.13.

 	
 Effective Time

 	
  

 	
 14

 



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 June 4, 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 (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 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. 


                    “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; 


2






                              (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 is
listed on the NYSE, is or would be an “independent director” with respect to
the Company 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). 


                    “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). 


3







                    “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 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. 


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 


4






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 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. 


5






                    (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 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. 

 



6







                    (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. 


                    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. 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.





7






	
 

	
 


	
 

	
                    (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. 


                    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 


8






                    (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 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 3.17 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. 


9






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). 


                    (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: 


10






                    (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, 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 


11






(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. 


                    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 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
 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; 





12






	
 

	
 


	
 

	
                    (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. 


                    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 3.17 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 


13






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


14






                    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 

	
/s/ Philip M.
 Jacobs


	
 

	
 

	



	
 

	
 

	
Name:

	
Philip M. Jacobs


	
 

	
 

	
Title:

	
Senior Vice
 President – Divestitures


	
 

	
 

	
 

	
 


	
 

	
AMERICAN HOME
 ASSURANCE COMPANY


	
 

	
 

	
 

	
 


	
 

	
By

	
/s/ Robert S. H.
 Schimek


	
 

	
 

	



	
 

	
 

	
Name:

	
Robert S. H.
 Schimek


	
 

	
 

	
Title:

	
Chief Financial
 Officer, Senior


	
 

	
 

	
 

	
Vice President and
 Treasurer


	
 

	
 

	
 

	
 


	
 

	
TRANSATLANTIC
 HOLDINGS, INC.


	
 

	
 

	
 

	
 


	
 

	
By

	
/s/ Robert F.
 Orlich


	
 

	
 

	



	
 

	
 

	
Name:

	
Robert F. Orlich


	
 

	
 

	
Title:

	
Chairman,
 President and Chief


	
 

	
 

	
 

	
Executive Officer