STOCK AT ANY TIME
OUTSTANDING; PROVIDED, THAT NO DEFAULT OR UNMATURED DEFAULT SHALL EXIST BEFORE
OR AFTER GIVING EFFECT TO SUCH DIVIDENDS, REDEMPTIONS, REPURCHASES OR OTHER
ACQUISITIONS OR BE CREATED AS A RESULT THEREOF.
6.12
MERGER.
THE BORROWER WILL NOT, NOR WILL IT
PERMIT ANY SUBSIDIARY TO, MERGE OR CONSOLIDATE WITH OR INTO ANY OTHER PERSON;
PROVIDED, THAT, (X) ANY PERSON MAY MERGE WITH OR INTO THE BORROWER SO LONG AS
(I) NO EVENT OF DEFAULT WILL RESULT THEREFROM, (II) THE BORROWER HAS PERMITTED
WRITTEN NOTICE AT LEAST TWENTY DAYS PRIOR TO THE PROPOSED EFFECTIVE DATE,
(III) THE AGGREGATE CONSIDERATION PAID IN SUCH TRANSACTION DOES NOT EXCEED
$50,000,000 AND (IV) THE BORROWER IS THE SURVIVING ENTITY, AND (Y) SUBJECT TO
SECTION 6.14, A SUBSIDIARY MAY MERGE INTO THE BORROWER OR A WHOLLY-OWNED
SUBSIDIARY.
6.13
SALE OF ASSETS.
THE BORROWER WILL NOT, NOR WILL
IT PERMIT ANY SUBSIDIARY TO, LEASE, SELL, TRANSFER OR OTHERWISE DISPOSE OF ITS
PROPERTY TO ANY OTHER PERSON EXCEPT FOR (A) SALES OF INVESTMENTS IN THE ORDINARY
COURSE OF BUSINESS, (B) THE SALE BY THE BORROWER ON COMMERCIALLY REASONABLE
TERMS OF ITS INVESTMENT IN MAUI JIM, INC., (C) THE SALE BY RLIC ON COMMERCIALLY
REASONABLE TERMS OF ITS INVESTMENT IN TAYLOR, BEAN AND WHITTAKER, AND
(D) LEASES, SALES, TRANSFERS OR OTHER DISPOSITIONS OF ITS PROPERTY THAT,
TOGETHER WITH ALL OTHER PROPERTY OF THE BORROWER AND ITS SUBSIDIARIES LEASED,
SOLD OR DISPOSED OF (OTHER THAN SALES PERMITTED PURSUANT TO CLAUSES (A), (B),
(C) AND (D) OF THIS SECTION 6.13) AS PERMITTED BY THIS SECTION 6.13 SINCE THE
DATE HEREOF DO NOT CONSTITUTE A SUBSTANTIAL PORTION.
6.14
INVESTMENTS AND ACQUISITIONS.
THE BORROWER AND
ITS SUBSIDIARIES MAY MAKE INVESTMENTS (INCLUDING, WITHOUT LIMITATION, LOANS AND
ADVANCES TO, AND OTHER INVESTMENTS IN, ITS SUBSIDIARIES) AND COMMITMENTS
THEREFOR, CREATE SUBSIDIARIES, BECOME A PARTNER IN ANY PARTNERSHIP OR JOINT
VENTURE AND MAKE ACQUISITIONS, SUBJECT TO THE FOLLOWING:
(A)
THE BORROWER AND ITS SUBSIDIARIES MAY MAKE
ACQUISITIONS SO LONG AS (I) SUCH TRANSACTIONS (A) CONSIST EXCLUSIVELY OF
ACQUISITIONS OF BUSINESSES OR ENTITIES ENGAGED IN THE SPECIALTY PROPERTY AND
CASUALTY BUSINESS, (B) DO NOT CONSTITUTE HOSTILE TAKEOVERS AND (C) DO NOT
REQUIRE THE PAYMENT OF AN AGGREGATE CONSIDERATION IN EXCESS OF $50,000,000 AFTER
THE DATE OF THIS AGREEMENT, (II) THE BORROWER PROVIDES THE AGENT AND EACH LENDER
WITH WRITTEN NOTICE OF SUCH TRANSACTIONS AT LEAST 20 DAYS PRIOR TO THE EFFECTIVE
DATE THEREOF, AND (III) NO DEFAULT OR UNMATURED DEFAULT HAS OCCURRED AND IS
CONTINUING OR WOULD OCCUR AFTER GIVING EFFECT THERETO.
(B)
THE BORROWER AND ITS SUBSIDIARIES MAY MAKE
INVESTMENTS IN DEBT SECURITIES SO LONG AS AT LEAST 90% OF THE PRINCIPAL AMOUNT
OUTSTANDING OF ALL SUCH INVESTMENTS
CONSTITUTES AN INVESTMENT IN INVESTMENT
GRADE OBLIGATIONS.
(C)
ANY INVESTMENTS MADE BY ANY INSURANCE
SUBSIDIARY MUST BE OF A QUALITY ACCEPTABLE TO THE INSURANCE COMMISSIONER IN THE
RESPECTIVE DOMICILIARY STATE OF SUCH INSURANCE SUBSIDIARY.
(D)
THE BORROWER AND ITS SUBSIDIARIES MAY MAKE
LOANS TO AND EXTEND GUARANTEES OF LOANS MADE TO EMPLOYEES OF THE BORROWER AND
ITS