OF THEIR
PROPERTIES OR ASSETS, EXCEPT IN THE CASE OF (C) AND (D) FOR VIOLATIONS, BREACHES
OR DEFAULTS WHICH WOULD NOT, INDIVIDUALLY OR IN THE AGGREGATE, HAVE A MATERIAL
ADVERSE EFFECT ON THE ABILITY OF PARENT AND SUB TO CONSUMMATE THE TRANSACTIONS
CONTEMPLATED BY THIS AGREEMENT. AS USED IN THIS AGREEMENT, AN "AFFILIATE" OF AN
ENTITY IS ANY PERSON OR ENTITY THAT DIRECTLY OR INDIRECTLY THROUGH ONE OR MORE
INTERMEDIARIES CONTROLS, IS CONTROLLED BY, OR IS UNDER COMMON CONTROL WITH THE
ENTITY.
SECTION 5.04.
INFORMATION.
NONE OF THE INFORMATION SUPPLIED BY PARENT OR SUB
IN WRITING SPECIFICALLY FOR INCLUSION OR INCORPORATION BY REFERENCE IN (I) THE
COMPANY'S PROXY STATEMENT FOR THE ANNUAL MEETING OF ITS SHAREHOLDERS AT WHICH
THE MERGER WILL BE CONSIDERED (THE "PROXY STATEMENT"), (II) THE SCHEDULE 13E-3
OR (III) THE OTHER FILINGS WILL, AT THE RESPECTIVE DATES FILED WITH THE SEC OR
SUCH OTHER GOVERNMENTAL ENTITY, AND WITH RESPECT TO THE PROXY STATEMENT, ON THE
DATE MAILED TO SHAREHOLDERS AND AT THE TIME OF THE MEETING OF THE COMPANY'S
SHAREHOLDERS TO BE HELD IN CONNECTION WITH THE MERGER, CONTAIN ANY UNTRUE
STATEMENT OF A MATERIAL FACT OR OMIT TO STATE ANY MATERIAL FACT REQUIRED TO BE
STATED THEREIN OR NECESSARY IN ORDER TO MAKE THE STATEMENTS THEREIN, IN LIGHT OF
THE CIRCUMSTANCES UNDER WHICH THEY ARE MADE, NOT MISLEADING.
SECTION 5.05.
OWNERSHIP AND INTERIM OPERATIONS OF SUB.
THE ONLY CLASS OF
CAPITAL STOCK OF SUB AUTHORIZED FOR ISSUANCE IS COMMON STOCK.
THERE ARE 100
SHARES OF SUB COMMON STOCK ISSUED AND OUTSTANDING, ALL OF WHICH IS DIRECTLY
OWNED BY PARENT.
SUB WAS FORMED SOLELY FOR THE PURPOSE OF ENGAGING IN THE
MERGER, HAS NO ASSETS OR LIABILITIES AND HAS ENGAGED IN NO OTHER BUSINESS
ACTIVITIES.
SECTION 5.06.
OWNERSHIP OF COMMON STOCK.
PARENT OWNS, BENEFICIALLY AND OF
RECORD, 5,610,045 SHARES OF COMPANY COMMON STOCK.
NO "AFFILIATE" OR "ASSOCIATE"
(AS THOSE TERMS ARE USED IN ARTICLE VIII OF THE COMPANY'S ARTICLES OF
INCORPORATION) OF PROASSURANCE, OTHER THAN PARENT AND PERSONS WHO ARE DIRECTORS
AND OFFICERS OF THE COMPANY AND ITS SUBSIDIARIES, OWN, BENEFICIALLY OR OF
RECORD, ANY COMPANY COMMON STOCK.
ARTICLE VI
COVENANTS
SECTION 6.01.
OPERATE IN ORDINARY COURSE.
DURING THE PERIOD FROM THE DATE OF
THIS AGREEMENT AND CONTINUING UNTIL THE EFFECTIVE TIME, THE COMPANY AGREES THAT
(EXCEPT AS EXPRESSLY CONTEMPLATED OR PERMITTED BY THIS AGREEMENT, OR TO THE
EXTENT THAT PARENT SHALL OTHERWISE CONSENT IN WRITING) (A) THE COMPANY AND ITS
SUBSIDIARIES SHALL CARRY ON THEIR RESPECTIVE BUSINESSES IN THE USUAL, REGULAR
AND ORDINARY COURSE IN SUBSTANTIALLY THE SAME MANNER AS HERETOFORE CONDUCTED AND
USE ALL COMMERCIALLY REASONABLE EFFORTS TO PRESERVE INTACT THEIR PRESENT
BUSINESS ORGANIZATIONS, KEEP AVAILABLE THE SERVICES OF THEIR PRESENT OFFICERS
AND EMPLOYEES AND PRESERVE THEIR RELATIONSHIPS WITH CUSTOMERS, SUPPLIERS AND
OTHERS HAVING BUSINESS DEALINGS WITH THEM TO THE END THAT THEIR GOODWILL AND
ONGOING BUSINESS SHALL NOT BE IMPAIRED IN ANY MATERIAL RESPECT AT THE
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EFFECTIVE TIME; AND (B) THE COMPANY SHALL NOT, NOR SHALL IT PERMIT ANY OF ITS
SUBSIDIARIES