Document:

Document

Exhibit 10.4

FIRST AMENDMENT TO TRANSITION SERVICES AGREEMENT

This FIRST AMENDMENT TO TRANSITION SERVICES AGREEMENT (“Amendment”) is made and entered into effective as of March 31, 2021 (the “Effective Date”), by and between Match Group, Inc., a Delaware corporation formerly known as IAC/InterActiveCorp (“New Match”), and IAC/InterActiveCorp, a Delaware corporation formerly known as IAC Holdings, Inc. (“New IAC”).  

RECITALS

            WHEREAS, the Parties entered into a Transition Services Agreement dated as of June 30, 2020 (the “Original Agreement”); and

WHEREAS, the Parties desire to amend the Original Agreement effective as of the Effective Date on the terms and subject to the conditions set forth herein.

            NOW, THEREFORE, in consideration of the mutual covenants and terms and conditions contained herein, the Parties hereby agree as follows:

1.Definitions. Capitalized terms used and not defined in this Amendment have the respective meanings assigned to them in the Original Agreement.

2.Amendments to the Original Agreement.
a.Schedule A to the Original Agreement shall be amended as set forth on Appendix 1.
b.Schedule B to the Original Agreement shall be replaced in its entirety with the Schedule B attached to this Amendment as Appendix 2.
c.Schedule D to the Original Agreement shall be amended as set forth on Appendix 3.

3.Limited Effect. Except as expressly provided in this Amendment, all of the terms and provisions of the Original Agreement are and will remain in full force and effect and are hereby ratified and confirmed by the Parties. Without limiting the generality of the foregoing, the amendments contained herein will not be construed as an amendment to or waiver of any other provision of the Original Agreement or as a waiver of or consent to any further or future action on the part of any Party that would require the waiver or consent of the other Parties. On and after the Effective Date, each reference in the Original Agreement to “this Agreement,” “the Agreement,” “hereunder,” “hereof,” “herein,” or words of like import will mean and be a reference to the Original Agreement as amended by this Amendment.

4.Counterparts. This Amendment may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. 

5.Entire Agreement.  This Amendment constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior agreements among the Parties, whether written or oral, relating to the same subject matter. 

6.Governing Law.  This Amendment will be governed by and construed in accordance with the internal laws of the State of Delaware, as applied to agreements entered into solely between residents of, and to be performed entirely in, such state, without reference to that body of law relating to conflicts of law or choice of law. 
[Signature pages follow.] 

Exhibit 10.4

IN WITNESS WHEREOF, the Parties have caused this Amendment to be executed by their duly authorized representatives as of the date first above written.

MATCH GROUP, INC.

By:  /s/ Jared Sine
       Jared Sine, Chief Business Affairs and Legal Officer

IAC/INTERACTIVECORP

By:  /s/ Joanne Hawkins
       Joanne Hawkins, Senior Vice President and Deputy   General CounselExhibit 10.3

  

EXECUTION
VERSION

 

 

STOCK PURCHASE AGREEMENT 

BY AND
BETWEEN

AMERICAN
INTERNATIONAL GROUP, INC.

AND

ARGON
HOLDCO LLC

DATED AS
OF JULY 14, 2021

 

  

  

 

 

 

TABLE OF CONTENTS

	
   

  	
  Page

  
	
  Article I DEFINITIONS......................................................................................................................................................

  	
  4

  	 

	
  Section 1.1

  	
  Definitions.........................................................................................................................................

  	
  4

  	 

	
  Article II PURCHASE OF THE
  SHARES..........................................................................................................................

  	
  13

  	 

	
  Section 2.1

  	
  Purchase and Sale of
  Shares..............................................................................................................

  	
  13

  	 

	
  Section 2.2

  	
  Closing...............................................................................................................................................

  	
  13

  	 

	
  Section 2.3

  	
  Closing Deliveries.............................................................................................................................

  	
  13

  	 

	
  Section 2.4

  	
  Withholding.......................................................................................................................................

  	
  14

  	 

	
  Section 2.5

  	
  Purchase Price
  Adjustment................................................................................................................

  	
  14

  	 

	
  Section 2.6

  	
  Company
  Capitalization....................................................................................................................

  	
  19

  	 

	
  Article III REPRESENTATIONS AND
  WARRANTIES OF SELLER.............................................................................

  	
  19

  	 

	
  Section 3.1

  	
  Organization, Standing
  and Corporate Power...................................................................................

  	
  19

  	 

	
  Section 3.2

  	
  Capital Structure................................................................................................................................

  	
  20

  	 

	
  Section 3.3

  	
  Subsidiaries........................................................................................................................................

  	
  21

  	 

	
  Section 3.4

  	
  Authority............................................................................................................................................

  	
  21

  	 

	
  Section 3.5

  	
  Noncontravention;
  Consents.............................................................................................................

  	
  21

  	 

	
  Section 3.6

  	
  Financial Statements;
  SEC Reports...................................................................................................

  	
  22

  	 

	
  Section 3.7

  	
  No Undisclosed
  Liabilities................................................................................................................

  	
  24

  	 

	
  Section 3.8

  	
  No Material Adverse
  Effect; Absence of Changes............................................................................

  	
  24

  	 

	
  Section 3.9

  	
  Taxes..................................................................................................................................................

  	
  24

  	 

	
  Section 3.10

  	
  Compliance with
  Applicable Law; Permits.......................................................................................

  	
  26

  	 

	
  Section 3.11

  	
  Litigation...........................................................................................................................................

  	
  26

  	 

	
  Section 3.12

  	
  Brokers..............................................................................................................................................

  	
  27

  	 

	
  Section 3.13

  	
  Sufficiency of Assets.........................................................................................................................

  	
  27

  	 

	
  Section 3.14

  	
  Employee Matters..............................................................................................................................

  	
  27

  	 

	
  Section 3.15

  	
  Insurance Matters..............................................................................................................................

  	
  27

  	 

	
  Section 3.16

  	
  No
  Other Representation or Warranty...............................................................................................

  	
  28

  	 

	
  Article IV REPRESENTATIONS AND
  WARRANTIES OF BUYER..............................................................................

  	
  28

  	 

	
  Section 4.1

  	
  Organization and
  Standing................................................................................................................

  	
  28

  	 

	
  Section 4.2

  	
  Authority............................................................................................................................................

  	
  28

  	 

	
  Section 4.3

  	
  Noncontravention;
  Consents.............................................................................................................

  	
  28

  	 

	
  Section 4.4

  	
  Compliance with
  Applicable Law.....................................................................................................

  	
  29

  	 

	
  Section 4.5

  	
  Purchase Not for
  Distribution............................................................................................................

  	
  29

  	 

	
  Section 4.6

  	
  Litigation...........................................................................................................................................

  	
  29

  	 

	
  Section 4.7

  	
  Sufficiency of Funds..........................................................................................................................

  	
  29

  	 

	
  Section 4.8

  	
  Limited Guaranty...............................................................................................................................

  	
  30

  	 

	
  Section 4.9

  	
  Brokers..............................................................................................................................................

  	
  30

  	 

	
  Section 4.10

  	
  No
  Other Representation or Warranty...............................................................................................

  	
  30

  	 

 

 

	
  Article V COVENANTS.....................................................................................................................................................

  	
  30

  
	
  Section 5.1

  	
  Conduct of Business.........................................................................................................................

  	
  30

  
	
  Section 5.2

  	
  Access to Information.......................................................................................................................

  	
  33

  
	
  Section 5.3

  	
  Reasonable Best
  Efforts....................................................................................................................

  	
  33

  
	
  Section 5.4

  	
  Consents, Approvals
  and Filings......................................................................................................

  	
  33

  
	
  Section 5.5

  	
  Public Announcements.....................................................................................................................

  	
  36

  
	
  Section 5.6

  	
  Further Assurances...........................................................................................................................

  	
  36

  
	
  Section 5.7

  	
  Company Financing..........................................................................................................................

  	
  36

  
	
  Section 5.8

  	
  Stockholders Agreement..................................................................................................................

  	
  36

  
	
  Section 5.9

  	
  Separation.........................................................................................................................................

  	
  37

  
	
  Section 5.10

  	
  Plan Assets........................................................................................................................................

  	
  37

  
	
  Section 5.11

  	
  Corporate Governance......................................................................................................................

  	
  38

  
	
  Section 5.12

  	
  Tax Matters...................................................................................................................................... 

  	
  38

  
	
  Section 5.13

  	
  SMA
  Cooperation.............................................................................................................................

  	
  38

  
	
  Article VI CONDITIONS PRECEDENT...........................................................................................................................

  	
  39

  
	
  Section 6.1

  	
  Conditions to Each
  Party’s Obligations...........................................................................................

  	
  39

  
	
  Section 6.2

  	
  Conditions to
  Obligations of Buyer..................................................................................................

  	
  39

  
	
  Section 6.3

  	
  Conditions
  to Obligations of Seller..................................................................................................

  	
  40

  
	
  Article VII SURVIVAL;
  INDEMNIFICATION................................................................................................................

  	
  40

  
	
  Section 7.1

  	
  Survival.............................................................................................................................................

  	
  40

  
	
  Section 7.2

  	
  Indemnification by
  Seller.................................................................................................................

  	
  40

  
	
  Section 7.3

  	
  Indemnification by
  Buyer................................................................................................................ 

  	
  41

  
	
  Section 7.4

  	
  Claims Procedure..............................................................................................................................

  	
  42

  
	
  Section 7.5

  	
  Payment............................................................................................................................................

  	
  45

  
	
  Section 7.6

  	
  Exclusive Remedies..........................................................................................................................

  	
  45

  
	
  Section 7.7

  	
  Damages...........................................................................................................................................

  	
  45

  
	
  Section 7.8

  	
  Right to Recover...............................................................................................................................

  	
  46

  
	
  Section 7.9

  	
  Double
  Claims..................................................................................................................................

  	
  46

  
	
  Article VIII TERMINATION.............................................................................................................................................

  	
  46

  
	
  Section 8.1

  	
  Termination of
  Agreement...............................................................................................................

  	
  46

  
	
  Section 8.2

  	
  Effect
  of Termination.......................................................................................................................

  	
  47

  
	
  Article IX GENERAL PROVISIONS................................................................................................................................

  	
  48

  
	
  Section 9.1

  	
  Fees and Expenses............................................................................................................................

  	
  48

  
	
  Section 9.2

  	
  Notices..............................................................................................................................................

  	
  48

  
	
  Section 9.3

  	
  Interpretation....................................................................................................................................

  	
  50

  
	
  Section 9.4

  	
  Entire Agreement;
  Third Party Beneficiaries...................................................................................

  	
  51

  
	
  Section 9.5

  	
  Governing Law.................................................................................................................................

  	
  51

  
	
  Section 9.6

  	
  Assignment.......................................................................................................................................

  	
  51

  
	
  Section 9.7

  	
  Jurisdiction;
  Enforcement.................................................................................................................

  	
  51

  
	
  Section 9.8

  	
  Severability;
  Amendment; Waiver...................................................................................................

  	
  52

  
	
  Section 9.9

  	
  Certain Limitations...........................................................................................................................

  	
  53

  

-2- 

 

 

	
  Section 9.10

  	
  Non-Recourse....................................................................................................................................

  	
  54

  
	
  Section 9.11

  	
  No Offset...........................................................................................................................................

  	
  54

  
	
  Section 9.12

  	
  Counterparts......................................................................................................................................

  	
  54

  

-3- 

 

STOCK PURCHASE AGREEMENT

This
STOCK PURCHASE AGREEMENT, dated as of July 14, 2021 (this “Agreement”),
is made by and between American International Group, Inc., a Delaware
corporation (“Seller”), and Argon Holdco LLC, a Delaware limited
liability company (“Buyer”). 

WHEREAS,
Seller owns 100 shares of common stock (the “Common Stock”), par value
$1.00 per share, of SAFG Retirement Services, Inc., a Delaware corporation (the
 “Company”), representing 100% of the issued and outstanding shares of
Common Stock;

WHEREAS,
upon the terms and subject to the conditions set forth in this Agreement,
Seller desires to (i) cause the Company to effect a stock split and
recapitalization of the Common Stock into 90,100 shares of Class A common
stock, par value $1.00 per share (the “New Class A Common Stock”), and 9,900
shares of Class B common stock, par value $1.00 per share (the “New Class B
Common Stock” and, together with the New Class A Common Stock, the “New
Common Stock”) and (ii) sell and convey to Buyer, and Buyer desires to
purchase and acquire from Seller, 9,900 shares of New Class B Common Stock (the
 “Purchased Shares”), representing 9.9% of the issued and outstanding
shares of New Common Stock following such purchase; and

WHEREAS,
at and in connection with the consummation of the transactions contemplated by
this Agreement, (a) the applicable Company Subsidiaries will enter into
separately managed account agreements with Blackstone ISG-I Advisors L.L.C., a
Delaware limited liability company (“Investment Manager”), in the form
attached hereto as Schedule A of the Seller Disclosure Schedule,
pursuant to which Investment Manager will perform certain investment management
services for such Company Subsidiaries (the “SMA Agreements”) and (b)
the Investment Manager, Seller and the Company will enter into a commitment
letter in connection with the SMA Agreements and this Agreement, in the form
attached hereto as Schedule A of the Seller Disclosure Schedule,
pursuant to which the Investment Manager and the Company will agree to certain
terms and conditions associated with the SMA Agreements as set forth in such
commitment letter (the “SMA Commitment Letter”). 

NOW,
THEREFORE, in consideration of the representations, warranties, covenants and
agreements contained in this Agreement, the parties agree as follows:

Article I

DEFINITIONS

Section 1.1       Definitions.  For purposes
of this Agreement, the following terms have the respective meanings set forth
below:  

“Action”
means (a) any civil, criminal or administrative action, suit, claim,
litigation, audit, inquiry or examination, in each case, before a Governmental
Entity or (b) any arbitration proceeding or similar proceeding.

“Adjusted
After Tax Income” has the meaning set forth in the Calculation
Methodologies.

-4- 

 

“Adjusted Book Value”
means shareholder’s equity, excluding Accumulated Other Comprehensive Income
and adjusted for the cumulative unrealized gains and losses related to
Fortitude Re funds withheld assets, calculated using the same methodologies,
adjustments, procedures and assumptions as the Calculation Methodologies.

“Adjusted
Separation Balance Sheet” has the meaning set forth in Section 3.6(d). 

“Affiliate”
of any Person means another Person that directly or indirectly, through one or
more intermediaries, controls, is controlled by or is under common control
with, such first Person.  For the purposes of this definition, “control,”
when used with respect to any Person, means the power to direct the management
and policies of such Person, directly or indirectly through the ownership of
voting securities, by contract, or otherwise, and the terms “controlling”
and “controlled” have the meanings correlative to the foregoing.  For
the avoidance of doubt, neither the Company nor any Company Subsidiary shall be
deemed to be an “Affiliate” of Buyer.  For purposes of this Agreement, other
than for purposes of the definition of “Buyer Indemnitee” and Section 9.10, neither Blackstone nor any investment
funds or investment vehicles affiliated with, or managed or advised by, Blackstone
or any portfolio company (as such term is commonly understood in the private
equity industry) or investment of Blackstone or of any such investment fund or
investment vehicle shall be deemed to be an “Affiliate” of Buyer.

“Affiliate
Contract” means any material Contract
between any of the Company or any Company Subsidiary, on the one hand, and
Seller or any Subsidiary of Seller (other than the Company or any Company
Subsidiary), on the other hand.   

“Agreement”
has the meaning set forth in the Preamble. 

“AH
Distribution” has the meaning set forth in Section 5.1(b)(iv). 

“AH
Transaction” means the transactions contemplated by that certain Purchase
Agreement, dated as of the date hereof, between Seller and Aztec Holdco LLC.

“AICPA”
means American Institute of Certified Public Accountants.

“Applicable
Law” means any law, statute, ordinance, written rule or regulation, order,
injunction, judgment, decree, constitution or treaty enacted, promulgated,
issued, enforced or entered by any Governmental Entity applicable to any Person
or such Person’s businesses, properties, assets or rights, as may be amended
from time to time.

“Audit
Opinion” means a report of independent auditors for an audit conducted in
accordance with the standards of the AICPA of the balance sheets of the in-scope
entities and partially in-scope entities as of March 31, 2021.

“Audited
Company Balance Sheet” has the meaning set forth in Section 2.5(c). 

“Board”
has the meaning set forth in Section 5.8 of the Seller Disclosure
Schedule.

“Blackstone”
has the meaning set forth in Section 5.4(b). 

-5- 

 

“Business Day” means any day other than a Saturday,
a Sunday or any other day on which banking institutions in New York, New York
are required or authorized by Applicable Law to be closed.

“Buyer”
has the meaning set forth in the Preamble.

“Buyer
Indemnitee” means Buyer, each of its Subsidiaries and Affiliates, and its
and their respective officers, directors, employees, agents, successors and
permitted assigns. 

“Buyer
Material Adverse Effect” means any change, development, event or effect
that is, individually or in the aggregate, materially adverse to the ability of
Buyer to consummate the transactions contemplated hereby by the Outside Date.

“Buyer
Party” means Buyer or any Affiliate of Buyer that is a party to any
Transaction Agreement.

“Calculation
Methodologies” are those line-item adjustments, methodologies, procedures
and assumptions set forth on Section 1.1(d) of the Seller Disclosure Schedule.

“Closing”
has the meaning set forth in Section 2.2. 

“Closing
Adjusted Book Value” has the meaning set forth in Section 2.5(c). 

“Closing
Separation Balance Sheet” has the meaning set forth in Section 2.5(c). 

“Closing
Adjusted Separation Balance Sheet” has the meaning set forth in Section
2.5(c). 

“Closing
Date” has the meaning set forth in Section 2.2. 

“Closing
Pro Forma Roll-Forward Balance Sheet” has the meaning set forth in Section
2.5(c). 

“Closing
Purchase Price” has the meaning set forth in Section 2.5(c). 

“Code”
means the Internal Revenue Code of 1986, as amended.

“Common
Stock” has the meaning set forth in the Recitals.

“Company”
has the meaning set forth in the Preamble.

“Company
Balance Sheet” has the meaning set forth in Section 3.6(d). 

“Company
Business” means the life and retirement
insurance business, with such adjustments as reflected in the Separation  Balance Sheet, (i) as
conducted by Seller and its Subsidiaries as of immediately prior to the date
hereof for purposes of the representations and warranties set forth in Article
III (other than Section 3.13) and Article IV and the
covenants and agreements set forth in Article V (as well as the
provisions of this Article I and Article IX with respect to the
foregoing), and (ii) as conducted by Seller and its Subsidiaries as of
immediately prior to the Separation for purposes of the representations and
warranties set forth in Section 3.13  

-6- 

 

and the
Separation Principles (as well as the provisions of this Article I and Article
IX with respect to the foregoing).

“Company
Subsidiaries” has the meaning set forth in Section 3.3. 

“Confidentiality
Agreement” means the confidentiality agreement, dated March 6, 2021,
between Seller and Blackstone.

“Contract”
means any contract, agreement, indenture, note, bond, loan, instrument, license
or other enforceable arrangement or agreement.

“Covered
Accounts” has the meaning set forth in Section 3.14(b). 

“Deal
Adjustments” has the meaning set forth in the Calculation Methodologies.  

“Deal
Perimeter Adjustments” has the meaning set forth in the Calculation
Methodologies.  

“Deductible”
has the meaning set forth in Section 7.2(b). 

“Dispute
Notice” has the meaning set forth in Section 2.5(e). 

“Disputed
Item” has the meaning set forth in Section 2.5(e). 

“Enforceability
Exceptions” has the meaning set forth in Section 3.4. 

“Equity
Commitment Letter” has the meaning set forth in Section 4.7. 

“Equity
Provider” has the meaning set forth in Section 4.7. 

“Equity
Provider Related Persons” has the meaning set forth in Section 5.4(e). 

“ERISA”
means the Employee Retirement Income Security Act of 1974.

“Exchange
Act” has the meaning set forth in Section 3.6(h).  

“Final
Adjusted Book Value” has the meaning set forth in Section 2.5(f). 

“Final
Pro Forma Roll-Forward Balance Sheet” has the meaning set forth in Section
2.5(f). 

“Final
Purchase Price” has the meaning set forth in Section 2.5(f). 

“Financial
Supplement” has the meaning set forth in Section 3.6(d). 

“Fraud”
means actual and intentional fraud by a party to this Agreement with the
specific intent to deceive or mislead in connection with the making of the
representations and warranties set forth in Article III or Article IV,
as applicable.  For the avoidance of doubt, “Fraud” does not include
constructive fraud or any torts based on negligence or recklessness.

“GAAP”
means generally accepted accounting principles in the United States.

-7- 

 

“Giveback Equity” has the meaning set forth in Section
2.5(b). 

“Governmental
Entity” means any domestic or foreign court, tribunal, commission or
governmental authority, instrumentality (including any legislature, commission,
regulatory or administrative agency, governmental branch, bureau or department)
or agency or any self-regulatory body. 

“HSR
Act” has the meaning set forth in Section 3.5. 

“Hybrid
Securities” has the meaning set forth in Section 5.7. 

“Hybrid
Securities Offering” has the meaning set forth in Section 5.7. 

“Indemnification
Cap” has the meaning set forth in Section 7.2(b). 

“Indemnified
Party” has the meaning set forth in Section 7.4(a). 

“Indemnifying
Party” has the meaning set forth in Section 7.4(a). 

“Independent
Firm” has the meaning set forth in Section 2.5(g). 

“Insurance
Company” means any Subsidiary of the Company that is required to be
licensed as an insurer or reinsurer.   

“Insurance
Contracts” means the insurance or annuity policies and contracts (including
side letters), together with all binders, slips, certificates, endorsements and
riders thereto, issued, entered into, acquired or assumed (by reinsurance or
otherwise) by any Insurance Company prior to the Closing.

“Insurance
Regulator” means, with respect to any jurisdiction, the Governmental Entity
charged with the supervision of insurance companies in such jurisdiction.

“Interim
Adjusted Book Value” has the meaning set forth in Section 2.5(a). 

“Interim
Pro Forma Roll-Forward Balance Sheet” has the meaning set forth in Section
2.5(a). 

“Interim
Purchase Price” has the meaning set forth in Section 2.5(a). 

“Investment
Assets” means the investment assets, including general account and separate
account assets, of the Insurance Companies. 

“Investment
Manager” has the meaning set forth in the Recitals. 

“IPO”
means the consummation of an initial public offering of securities by the
Company, whether pursuant to an initial underwritten public offering of
securities that is registered under the Securities Act or an initial public
offering of the Company Business structured as a secondary offering of
securities by Seller or a distribution of securities by the Company to existing

-8- 

 

equityholders that would result in securities of the
Company being registered under the Exchange Act.

“Knowledge”
means the actual knowledge of (a) with respect to Seller, those Persons listed
in Section 1.1(a) of the Seller Disclosure Schedule, and (b) with respect to
Buyer, those Persons listed in Section 1.1(b) of the Seller Disclosure
Schedule.

“Liability”
means any liability, damage, expense or obligation of any kind, character or
description (including in respect of Taxes), whether direct or indirect, known
or unknown, absolute or contingent, accrued or unaccrued, disputed or
undisputed, liquidated or unliquidated, secured or unsecured, joint or several,
due or to become due, vested or unvested, asserted or unasserted, executory,
determined or determinable or otherwise.

“Liens”
has the meaning set forth in Section 3.2(a). 

“Limited
Guaranty” has the meaning set forth in Section 4.8. 

“Material
Adverse Effect” means any change, development, event or effect that has a
material adverse effect on the business, financial condition or results of
operations of the Company Business, taken as a whole, but excluding any such
change, development, event or effect resulting from or arising out of (a)
general political, economic or securities or financial market conditions
(including changes in interest rates or changes in equity or debt prices and
corresponding changes in the value of the Investment Assets of the Company and
the Company Subsidiaries), (b) any occurrence or condition generally affecting
participants in any jurisdiction or geographic area in any segment of the
industries or markets in which the Company or the Company Subsidiaries
participate, including the deferred and immediate annuity, variable annuity or
life insurance industries, (c) any change or proposed change after the date
hereof in GAAP, SAP or Applicable Law, or the interpretation or enforcement
thereof (including changes after the date hereof in GAAP or SAP prescribed or
permitted by the applicable insurance regulatory authority and accounting
pronouncements of the SEC, the National Association of Insurance Commissioners
and the Financial Accounting Standards Board), (d) natural or man-made
catastrophe events, hostilities, acts of war or terrorism, or any escalation or
worsening thereof, (e) any epidemic, pandemic or similar outbreak, (f) the
COVID-19 virus outbreak and efforts by Governmental Entities in response
thereto and the consequences of such efforts, (g) the negotiation, execution
and delivery of, or compliance with the express terms of, or the taking of any
action expressly required by, this Agreement or any other Transaction
Agreements, or the public announcement of, or consummation in accordance with
the terms hereof of, any of the transactions contemplated hereby or thereby
(including the Separation) (including the effect thereof on the relationships
(contractual or otherwise) of the Company and the Company Subsidiaries and
their respective Affiliates with policyholders, clients, customers, employees,
suppliers, vendors, service providers or Governmental Entities) (it being
understood that this clause (g) shall be disregarded for purposes of the
representations and warranties set forth in the first sentence of Section
3.5 and the related condition to the Closing), (h) the effects of any
breach, violation or non-performance of any provision of this Agreement by
Buyer or any of its Affiliates, (i) the identity of or facts related to Buyer
or its Affiliates or the effect of any action taken by Seller, the Company or
any of their respective Affiliates at the express written request of Buyer,
(j) changes in the value of any Investment Assets of the Company or any
Company Subsidiaries, (k) any downgrade or threatened 

-9- 

 

downgrade
or change or development in the financial strength or other rating assigned to
the Company or any Company Subsidiaries by any rating agency (provided,
that this clause (k) shall not by itself exclude the underlying causes of any
such downgrade, change, development, event or effect to the extent such
underlying causes are not otherwise excluded by clauses (a) through (l) (other
than this clause (k)) hereof), or (l) any failure of the Company or any of the
Company Subsidiaries to meet any financial projections or targets, including
any estimates or expectations of revenue, earnings or other financial
performance or results of operations for any period, in and of itself, or any
failure by the Company or any of the Company Subsidiaries to meet its internal
or published projections, budgets, plans or forecasts of its revenues, earnings
or other financial performance or results of operations (provided, that
this clause (l) shall not by itself exclude the underlying causes giving rise
or contributing to any such failure to the extent such underlying causes are
not otherwise excluded by clauses (a) through (k), except, in the case of the
foregoing clauses (a), (b), (c) and (d), to the extent that such change,
development, event or effect has a disproportionately adverse effect on the
Company Business, taken as a whole, as compared to other participants in the
same industry (in which case the incremental disproportionately adverse effect
may be taken into account determining whether there has been a Material Adverse
Effect).

“New
Class A Common Stock” has the meaning set forth in the Recitals. 

“New
Class B Common Stock” has the meaning set forth in the Recitals. 

“New
Common Stock” has the meaning set forth in the Recitals. 

“Notice
Period” has the meaning set forth in Section 7.4(c). 

“Organizational
Documents” of a Person means the certificate of incorporation, bylaws or
equivalent organizational documents of such Person. 

“Outside
Date” has the meaning set forth in Section 8.1(b). 

“Permits”
has the meaning set forth in Section 3.10(b). 

“Permitted
Lien” means, with respect to any asset, any (a) carriers’, mechanics’,
materialmens’ or similar Lien arising in the ordinary course of business
imposed by Applicable Law for amounts not yet due, (b) Lien arising from any
act of Buyer or any of its Affiliates, (c) Lien that is disclosed in Section
1.1(c) of the Seller Disclosure Schedule under the heading “Permitted Liens”,
(d) Lien for Taxes, assessments or other governmental charges not yet due and
payable or due and payable but not delinquent or the amount or validity of
which is being contested in good faith and, in each case, for which adequate
reserves are reflected in accordance with GAAP, (e) Lien arising under a
conditional sales Contract or equipment lease with a third party, (f) Lien in
favor of the Company or any Company Subsidiary, (g) restrictions under
applicable federal and state securities laws and (h) Lien or other imperfection
of title that does not materially detract from the current value or materially
interfere with the current use of the properties or rights affected thereby.

“Person”
means an individual, corporation, partnership, joint venture, limited liability
company, association, trust, unincorporated organization, Governmental Entity
or other entity.

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“Plan Asset Issue” means that any assets of a
Covered Account constitute Plan Assets.

“Plan
Assets” has the meaning set forth in Section 3.14(b). 

“Pro
Forma Roll-Forward Balance Sheet” has the meaning set forth in Section 3.6(d). 

“Purchase
Price” has the meaning set forth in Section 2.1.
  

“Purchase
Price Cap” means $2,200,000,000. 

“Purchased
Shares” has the meaning set forth in the Recitals. 

“Reconciliation”
has the meaning set forth in Section 3.6(d). 

“Representative”
means any Person’s directors, officers, employees, agents, advisors, attorneys,
accountants, consultants and other representatives.

“Resolution
Period” shall have the meaning set forth in Section 2.5(f). 

“SAP”
means, for each of the Company and each Company Subsidiary, the statutory
accounting practices prescribed or permitted in respect of such Person by the
applicable Insurance Regulator for such Person’s state of domicile.

“SEC”
means the U.S. Securities and Exchange Commission.

“Securities
Act” has the meaning set forth in Section 4.5. 

“Seller”
has the meaning set forth in the Preamble.

“Seller
Disclosure Schedule” means the disclosure schedule (including any
attachments thereto) delivered by Seller to Buyer in connection with, and
constituting a part of, this Agreement.

“Seller
Fundamental Representations” means those representations and warranties of
the Seller and the Company set forth in Section 3.1 (Organization,
Standing and Corporate Power), Section 3.2(a) (Capital Structure), Section
3.4 (Authority), and Section 3.12 (Brokers).

“Seller
Indemnitee” means Seller, each of its Subsidiaries and Affiliates, and its
and their respective officers, directors, employees, agents, successors and
permitted assigns. 

“Seller
SEC Documents” has the meaning set forth in Section 3.6(h).  

“Separation”
has the meaning set forth in the Separation Principles.

“Separation
Balance Sheet” has the meaning set forth in Section 3.6(d).   

“Separation
Documentation” has the meaning set forth in Section 5.9(a).  

“Separation
Principles” has the meaning set forth in Section 5.9(a). 

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“SMA Agreements” has the meaning set forth in the
Recitals. 

“SMA
Commitment Letter” has the meaning set forth in the Recitals. 

“Specified
Amount” means $19,176,000,000.  

“Specified
Transaction Agreements” means the SMA Agreements and the SMA Commitment
Letter. 

“Statutory
Statements” has the meaning set forth in Section 3.6(b). 

“Stockholders
Agreement” has the meaning set forth in Section 5.8. 

“Subsidiary”
of any Person at the time in question means another Person more than 50% of the
total combined voting power of all classes of capital stock or other voting
interests of which, or more than 50% of the equity securities of which, is at
such time owned directly or indirectly by such first Person.

“Target
Adjusted Book Value” means $20,202,000,000.

“Tax
Authority” means any Governmental Entity having jurisdiction over the
assessment, determination, collection or imposition of any Tax. 

“Tax
Proceeding” means any audit, examination, contest, litigation, dispute or
other proceeding with respect to Taxes or with or against any Tax Authority.

“Tax
Return” means any return, report, estimate, extension request, information
statement, or claim for refund filed or required to be filed in connection with
any Tax, including any schedule or attachment thereto, and any amendment
thereof.

“Taxes”
means any and all federal, state, local, or foreign taxes charges, fees, levies
or other assessments, including any income, franchise, profits, gains, premium,
property (real or personal), sales, use, excise, employment, unemployment,
payroll, withholding, gross receipts, license, stamp, occupation, social
security (or similar, including FICA), disability, workers’ compensation,
windfall profits, environmental, capital stock, transfer, stamp, registration,
value added, alternative or add-on minimum, estimated, or other tax of any kind
or any charge, assessment or deficiencies of any kind in the nature of taxes,
including in each case any interest, penalties, or additions thereto, whether
disputed or not.

“third-party
claim” has the meaning set forth in Section 7.4(a). 

“Transaction
Agreements” means this Agreement, the SMA Agreements, the SMA Commitment
Letter and the Stockholders Agreement.

“Transaction
Expenses” means, without duplication, all liabilities incurred by a party
for fees, expenses, costs or charges as a result of the contemplation,
negotiation, efforts to consummate or consummation of the transactions
contemplated by this Agreement, including any fees and expenses of investment
bankers, attorneys, accountants, actuaries or other advisors, and any fees 

-12- 

 

payable by such party to Governmental Entities or other
third parties, in each case, in connection with the consummation of the
transactions contemplated by this Agreement.

“Treasury
Regulations” means all proposed, temporary and final regulations
promulgated under the Code, as such regulations may be amended from time to
time.

“Willful
Breach” means, with respect to any breaches of or failures to perform any
of the covenants or other agreements contained in this Agreement, a material
breach that is a consequence of an act or failure to act undertaken by the
breaching party with actual knowledge that such party’s act or failure to act
would result in or constitute a material breach of this Agreement.  

Article II

PURCHASE OF THE SHARES

Section 2.1       Purchase and Sale of Shares.  Upon the terms and subject to the conditions of this
Agreement, Seller agrees to sell and convey to Buyer, and Buyer agrees to
purchase and acquire from Seller, the Purchased Shares for an aggregate
purchase price equal to two billion two hundred million U.S. dollars
($2,200,000,000) (the “Purchase Price”), to be paid in cash by wire
transfer of immediately available funds as contemplated by Section 2.3.  The Purchase Price shall be subject to
adjustment after the Closing in accordance with Section 2.5. 

Section 2.2       Closing.  The closing
of the purchase and sale of the Purchased Shares (the “Closing”) shall
take place remotely by exchange of documents and signatures (or their
electronic counterparts) at 9:00 a.m., New York City time, the third (3rd)
Business Day following the satisfaction or waiver of all of the conditions set
forth in Article VI (other than those conditions that by their terms are
to be satisfied at the Closing, but subject to the satisfaction or waiver of
such conditions at the Closing), unless another date, time or place is agreed
to in writing by the parties (it being agreed that at either party’s request,
the other party shall consider in good faith whether the Closing Date shall be
the last Business Day of a calendar month).  The Closing shall for all purposes
under this Agreement be deemed effective as of 12:01 a.m. on the day on which
the Closing occurs, and such date and time are herein referred to as the “Closing
Date.” 

Section 2.3       Closing Deliveries.

(a)                          Seller Closing Deliveries.  At the Closing, Seller shall deliver or cause to be delivered to
Buyer:

(i)         one or more certificates or book-entry notations
representing the Purchased Shares;

(ii)        the certificate contemplated by Section 6.2(d);
  

(iii)       counterparts of each Transaction Agreement other than this
Agreement to which Seller or the Company is a party, duly executed by such
Person; and

(iv)       a duly executed IRS Form W-9 of Seller.

(b)        Buyer’s Closing Deliveries.  At the Closing, Buyer shall deliver to Seller:

 

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(i)         in cash, by wire
transfer of immediately available funds to an account designated in writing by
Seller no later than two (2) Business Days prior to the Closing Date, an amount
equal to the Purchase Price;

(ii)        the certificate contemplated by Section 6.3(c);
and

(iii)       counterparts of each Transaction Agreement other than this
Agreement to which a Buyer Party is a party, duly executed by such Buyer Party.

Section 2.4       Withholding.  Buyer
and any other applicable withholding agent shall be entitled to deduct and
withhold from any payments made pursuant to this Agreement such amounts as it
is required to deduct and withhold with respect to the making of any such
payment under any applicable Tax Law. To the extent that amounts are so
withheld, and paid to the proper Tax Authority pursuant to any applicable Tax
Law, such withheld amounts shall be treated for all purposes of this Agreement
as having been paid to such Person in respect of which such deduction and
withholding was made.  Except to the extent
otherwise required pursuant to a change in Applicable Law, provided Seller
complies with its obligation pursuant to Section 2.3(a)(iv), no
deduction or withholding of Tax shall be made from the Purchase Price.  Buyer
shall promptly, and in no event later than three (3) Business Days prior to
Closing, notify Seller of its intention to make any deduction or withholding
required pursuant to a change in Applicable Law and shall cooperate with Seller
to mitigate, reduce or eliminate any such deduction or withholding.

Section
2.5       Purchase Price Adjustment

(a)        Seller shall deliver (or cause to be delivered) to Buyer,
no later than sixty (60) calendar days following the consummation of the AH
Transaction, a pro forma balance sheet of the Company as of the Closing that is
presented in the same manner and that uses the same methodologies, adjustments,
procedures and assumptions used in the Pro Forma Roll-Forward Balance Sheet,
taking into account all information available at such time (including the actual
amount of the AH Distribution) and calculated in accordance with the
Calculation Methodologies (the “Interim Pro Forma Roll-Forward Balance Sheet”). 
The Interim Pro Forma Roll-Forward Balance Sheet will set forth the Adjusted
Book Value as of the Closing, after giving effect to the AH Distribution (the “Interim
Adjusted Book Value”), and be accompanied by reasonable supporting detail
reflecting the basis for such calculation.  The “Interim Purchase Price”
shall be an amount equal to the Purchase Price, as adjusted on the basis of the
Interim Adjusted Book Value pursuant to Section 2.5(b)(i) or Section
2.5(b)(ii), as applicable.

(b)        The procedures for dispute resolution set forth in Section
2.5(e) through (g)  shall apply to the Interim Pro Forma Roll-Forward
Balance Sheet mutatis mutandis.  Promptly, and in any event within five
(5) Business Days, after the Interim Adjusted Book Value becomes final and
binding on the parties hereto: 

(i)         if the Interim Adjusted Book Value exceeds the Target
Adjusted Book Value, then, subject to the proviso in this Section 2.5(b),
Buyer shall deliver, or cause to be
delivered, to the Seller (or another entity designated in writing by the
Seller) payment, by wire transfer to a bank account designated in writing by
the Seller (such designation to be made within three (3) Business Days after
the Interim Adjusted Book Value becomes 

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final and binding on
the parties hereto), of immediately available funds in an amount equal to 9.9% multiplied 
by  the absolute value of the difference between the Interim Adjusted
Book Value and the Target Adjusted Book Value; and

(ii)        if the Target Adjusted Book Value exceeds the Interim
Adjusted Book Value, then Seller shall deliver, or cause to be delivered, to the Buyer (or another entity
designated in writing by Buyer) payment, by wire transfer to a bank account
designated in writing by Buyer (such designation to be made within three (3)
Business Days after the Interim Adjusted Book Value becomes final and binding
on the parties hereto), of immediately available funds in an amount equal to
9.9% multiplied by the following:

(A)       if the AH Distribution has occurred and the Interim
Adjusted Book Value (giving effect to the AH Distribution) is equal to or
greater than the Specified Amount, 50% of the absolute value of the difference
between the Interim Adjusted Book Value and the Target Adjusted Book Value;

(B)       if the AH Distribution has occurred and the Interim
Adjusted Book Value (giving effect to the AH Distribution) is less than the
Specified Amount, the sum of (1) $500,000,000 and (2) 100% of the absolute
value of the difference between the Interim Adjusted Book Value and the
Specified Amount; or

(C)       if the AH Distribution has not occurred, the absolute value
of the difference between the Interim Adjusted Book Value and the Target
Adjusted Book Value;

provided, however,
that to the extent that the Interim Purchase Price exceeds the Purchase Price
Cap, such portion of such excess shall be satisfied by Buyer delivering, or
causing to be delivered, to Seller (or another entity designated in writing by
Seller), a number of Purchased Shares (such shares, the “Giveback Equity”)
then held by Buyer, such that, following such delivery, the ownership
percentage held by Buyer shall equal (A) (1) the Purchase Price Cap minus 
(2) an amount equal to the aggregate dividends paid after the Closing and prior
to the delivery of the Giveback Equity in respect of the Giveback Equity divided
by (B) the excess of the Interim Adjusted Book Value over the Target
Adjusted Book Value plus $22,222,000,000.

(c)        Seller shall deliver (or cause to be delivered) to Buyer,
no later than the tenth (10th) Business Day prior to the earlier of
(x) the expected consummation of the IPO and (y) the thirty-six (36)-month
anniversary of the Closing Date, (i) an audited balance sheet of the Company and
the Company Subsidiaries, which balance sheet shall have been prepared in
accordance with the Calculation Methodologies and GAAP and shall be accompanied
by an Audit Opinion (the “Audited Company Balance Sheet”), (ii) a pro
forma balance sheet of the Company and the Company Subsidiaries, which shall be
the Audited Company Balance Sheet that is presented in the same manner and is
calculated in accordance with the Calculation Methodologies, adjusted for the
actual Deal Perimeter Adjustments that are not included in the Audited Company
Balance Sheet (the “Closing Separation Balance Sheet”), (iii) a pro
forma balance sheet of the Company and the Company Subsidiaries, which shall be
the Closing Separation Balance Sheet that is 

 

-15- 

 

presented in the same manner and is calculated in
accordance with the Calculation Methodologies, adjusted for the actual Deal
Adjustments and any other adjustments required to reflect the actual terms of
the Separation that are not included in the Closing Separation Balance Sheet
(the “Closing Adjusted Separation Balance Sheet”), (iv) a pro forma
balance sheet of the Company and the Company Subsidiaries, which shall be the
Closing Adjusted Separation Balance Sheet rolled forward from March 31, 2021 to
Closing to reflect the Roll-Forward Items, in each case, calculated in
accordance with the Calculation Methodologies and based upon all information
available at such time (the “Closing Pro Forma Roll-Forward Balance Sheet”),
and, at Buyer’s request, an updated Reconciliation, bridging the amounts and
calculations set forth in the Financial Supplement to the Audited Company Balance
Sheet.  The Closing Pro Forma Roll-Forward Balance Sheet will be accompanied by
reasonable supporting detail reflecting the basis for such calculation.  The
Audited Company Balance Sheet, the Closing Separation Balance Sheet, the
Closing Adjusted Separation Balance Sheet and the Closing Pro Forma
Roll-Forward Balance Sheet (x) shall be calculated using the same financial
accounting methods, principles, practices and principles (including actuarial,
reserving and other methods, principles, practices and principles of the
Insurance Companies), the same Tax classifications and Tax elections and
valuations of assets used in preparing the Company Balance Sheet, the
Separation Balance Sheet, the Adjusted Separation Balance Sheet and the Pro
Forma Roll-Forward Balance Sheet, respectively, notwithstanding any changes
subsequent to the date of the applicable balance sheet by the Company and any
Company Subsidiaries thereto, and (y) in the case of the Closing Separation
Balance Sheet, the Closing Adjusted Separation Balance Sheet and the Closing
Pro Forma Roll-Forward Balance Sheet, shall reflect all legal entities
considered (either in part or in full) in preparation of the Separation Balance
Sheet.  In addition to the Audited Company Balance Sheet, Seller and Buyer will
engage a mutually agreed-upon audit firm to conduct agreed-upon review
procedures in accordance with AICPA Statement on Standards for Attestation
Engagements 19 (“Review”) (the terms of which will be mutually
agreed-upon by Buyer and Seller prior to the commencement of the Review) of the
(i) Deal Adjustments and any other adjustments required to be taken to reflect
the actual terms of the Separation that are not included in the Audited Company
Balance Sheet reflected in either the Closing Separation Balance Sheet or the Closing
Adjusted Separation Balance Sheet, and (ii) Adjusted After Tax Income for the
Company and the Company Subsidiaries for the period from March 31, 2021 to
Closing reflected in the Closing Pro Forma Roll-Forward Balance Sheet.  The
Closing Pro Forma Roll-Forward Balance Sheet will set forth the Adjusted Book
Value as of the Closing (the “Closing Adjusted Book Value”) and will not
reflect the impact of any events or actions taken after the date of the Audited
Company Balance Sheet, other than (1) the adjustments for events or actions
contemplated to be taken after the date of the Audited Company Balance Sheet
that are reflected as line items in the Separation Balance Sheet and the Pro
Forma Roll-Forward Balance Sheet (including any changes or modifications as a
result of the actual Separation and the Deal Adjustments), (2) any other
separation adjustments required as a result of the actual Separation and (3)
changes or modifications in Adjusted Book Value as a result of (but excluding
any changes or modifications solely as a result of events or actions taken
after the date of the Audited Company Balance Sheet) the audit of the Company
and Company Subsidiaries and Review of the items described in clauses (i) and
(ii) of the prior sentence.  The Closing Adjusted Book Value will be calculated
based upon such Audited Company Balance Sheet and Review of Adjusted After Tax
Income and the separation adjustments (including the Deal Adjustments) and, in
each case, in a manner consistent with the provisions of this paragraph.  The “Closing
Purchase Price” shall be an amount equal to the Purchase Price, as 

 

-16- 

 

adjusted on the basis of the Closing Book Value pursuant to
Section 2.5(h), as applicable. The parties agree that any Liabilities as
a result of a breach of Section 3.8(c) shall be included as an
appropriate adjustment to the Interim Purchase Price and the Closing Purchase Price
in lieu of Buyer’s remedies under Section 7.2, notwithstanding anything
to the contrary herein.  

(d)       Seller and the Company shall provide (and shall cause their
Subsidiaries to provide) Buyer and its Affiliates and their respective
Representatives with such access to their and their Affiliates’ financial
records and information relating to, and their employees and Representatives
that were involved in, the preparation of Interim Pro Forma Roll-Forward
Balance Sheet, the Audited Company Balance Sheet, the Closing Separation Balance
Sheet, the Closing Adjusted Separation Balance Sheet, the Closing Pro Forma Roll-Forward
Balance Sheet and the adjustment process set forth in this Section 2.5
as may be reasonably requested by the Buyer or any of its Affiliates and their
respective Representatives for purposes of the adjustment process set forth in
this Section 2.5. 

(e)        Within thirty (30) days after the delivery of the Closing Pro
Forma Roll-Forward Balance Sheet, Buyer may provide Seller with a written
notice setting forth, in reasonable detail, its disagreement with one or more
items on the Closing Pro Forma Roll-Forward Balance Sheet, including the
calculation of the Closing Adjusted Book Value prepared by the Company as part
of the Closing Pro Forma Roll-Forward Balance Sheet (a “Dispute Notice”). 
Any Dispute Notice must set forth in reasonable detail (i) any item on the
Closing Pro Forma Roll-Forward Balance Sheet which Buyer believes has not been
prepared in accordance with this Agreement and the correct amount of such item
(each, a “Disputed Item”) and (ii) Buyer’s alternative calculation of
the Disputed Item, as applicable, calculated in accordance with the Calculation
Methodologies.  All items on the Closing Pro Forma Roll-Forward Balance Sheet
that are not Disputed Items shall be final, conclusive and binding on the
parties hereto for purposes of this Section 2.5. 

(f)        If Buyer fails to provide a Dispute Notice within thirty
(30) days after the delivery of the Closing Pro Forma Roll-Forward Balance
Sheet, the Closing Pro Forma Roll-Forward Balance Sheet and the Closing
Adjusted Book Value and the resulting calculation of the Closing Purchase Price
contained therein shall be deemed accepted and shall become the “Final Pro
Forma Roll-Forward Balance Sheet”, the “Final Adjusted Book Value”
and the “Final Purchase Price”, respectively, and shall be final and
binding upon the parties hereto.  If, within thirty (30) days after the
delivery of the Closing Pro Forma Roll-Forward Balance Sheet, Buyer provides
Seller with a Dispute Notice, Buyer and Seller shall attempt in good faith to
amicably resolve all matters set forth in the Dispute Notice during the thirty
(30) day period following receipt of the Dispute Notice by Buyer (the “Resolution
Period”).  To the extent any such disputes are resolved to the mutual
satisfaction of Buyer and Seller during the Resolution Period, such resolutions
shall be reflected on the Closing Pro Forma Roll-Forward Balance Sheet and the
resulting calculation of the Closing Adjusted Book Value and the Closing
Purchase Price contained therein and shall be deemed final and binding upon the
parties hereto, and, if all such disputes are so resolved, the Closing Pro
Forma Roll-Forward Balance Sheet and the resulting calculation of the Closing
Adjusted Book Value and the Closing Purchase Price contained therein, as
modified to reflect the resolution of such disputes, shall be deemed final and
shall become the Final Pro Forma Roll-Forward Balance Sheet, the Final Adjusted
Book Value and the Final Purchase Price, respectively.

 

-17- 

(g)        If any such disputes
cannot, for any reason, be resolved prior to the expiration of the Resolution
Period, then, within thirty (30) days after the end of the Resolution Period,
Seller and Buyer shall (i) set forth in writing their respective positions on
any such disputes still at issue and their determination of the calculation of
the Closing Adjusted Book Value and the resulting calculation of the Closing
Purchase Price and (ii) submit such written submissions regarding the
unresolved disputes to a boutique specialty firm with an active practice area
focused on post-merger and acquisitions purchase price dispute resolution
selected jointly by Seller and Buyer (the “Independent Firm”).  The
Independent Firm shall deliver its written determination to Buyer and Seller no
later than forty five (45) days following the date on which the unresolved
disputes are submitted in writing to the Independent Firm or such other date as
the Independent Firm may determine in its discretion or as may be mutually
agreed by Buyer and Seller.  The Independent Firm’s determination shall (A) be
based solely on presentations and written submissions by Buyer and Seller to
the Independent Firm made in accordance with this Section 2.5(g), and
not by independent review and (B) set forth in reasonable detail the basis for
the Independent Firm’s final determination of the Closing Adjusted Book Value
in accordance with the Calculation Methodologies and the resulting calculation
of Closing Purchase Price; provided  that the Independent Firm shall only
be entitled to resolve Disputed Items, and in no event shall the Independent
Firm determine, with respect to any item that remains an unresolved dispute submitted
to it, an amount which is outside the range established by (1) the amount
submitted by Seller in its submission under this Section 2.5(g) and (2)
the amount submitted by Buyer in its submission under this Section 2.5(g). 
Absent manifest arithmetical error, such determinations by the Independent Firm
shall be conclusive and binding upon the parties and shall not be subject to
appeal or review thereafter, and the Closing Pro Forma Roll-Forward Balance
Sheet and the Closing Adjusted Book Value and the resulting calculation of the
Closing Purchase Price contained therein, as modified by the Independent Firm’s
final determination, shall be deemed final and shall become the Final Pro Forma
Roll-Forward Balance Sheet, the Final Adjusted Book Value and the Final
Purchase Price, respectively.  The fees and disbursements of the Independent
Firm shall be borne by Seller and Buyer in inverse proportion to the absolute
value of the difference between the Independent Firm’s determination the Final
Adjusted Book Value and the other party’s calculation of Closing Adjusted Book
Value in its submission under this Section 2.5(g) (i.e., so that each
party will bear the Independent Firm’s fees and disbursements in proportion to
the extent to which the other party prevails in respect of the difference
between the parties’ aggregate calculations of the Closing Adjusted Book
Value).

(h)        Promptly, and in any event within five (5) Business Days,
after the Final Adjusted Book Value becomes final and binding on the parties
hereto pursuant to Section 2.5(f) or Section 2.5(g), as applicable,
then either Buyer shall deliver, or cause
to be delivered, to the Seller (or another entity designated in writing
by the Seller), or Seller shall deliver, or
cause to be delivered, to the Buyer (or another entity designated in
writing by Buyer), as applicable, in either case a cash payment and/or a number
of Purchased Shares (subject to the following proviso and the Purchase Price
Cap) so that the Buyer and the Seller would be in the same position as they
would have been, taking into account any cash dividends that have been (or
should have been) received by Buyer or Seller in respect of Purchased Shares
and any prior payment made by Buyer to Seller or Seller to Buyer pursuant to Section
2.5(b), had the parties used (A) the Final Adjusted Book Value instead
of the Interim Adjusted Book Value and (B) the final number of Purchased
Shares (taking into account any Purchased Shares that shall constitute Giveback
Equity) as a result of the purchase price adjustment in Section 2.5(b)
and this Section 2.5(h), in each of cases (A) and (B), for

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purposes
of the purchase price adjustment in Section 2.5(b); provided,
that, with respect to any payment made to Buyer, such payment shall be made (i)
in cash if Buyer owns 9.900% of the outstanding equity of the Company and (ii)
in such number of Purchased Shares as would result in Buyer owning 9.900% of
the outstanding equity of the Company, plus cash in excess of such amount.

(i)         Section 2.5(i) of the Seller Disclosure Schedule sets forth
illustrative calculations of the Interim Purchase Price and Final Purchase
Price adjustments calculated in accordance with this Section 2.5. 

(j)         The parties agree to treat any amounts paid (or deemed paid
through the delivery of shares) under this Section 2.5 as an adjustment
to (A) the Purchase Price per Purchased Share and/or (B) the number
of Purchased Shares acquired hereunder for all applicable tax purposes, unless
otherwise required by law.

Section 2.6       Company Capitalization. 
Prior to the Closing, Seller shall, and shall cause the Company to, cause the
Organizational Documents of the Company to be amended, and take such other actions
as are necessary, to effect a stock split and recapitalization of the
outstanding Common Stock into 90,100 shares of New Class A Common Stock and 9,900
shares of New Class B Common Stock.  Upon the
completion of such stock split and recapitalization, the New Common Stock shall
be the only authorized, issued and outstanding capital stock of the Company,
and all of the outstanding shares of New Common Stock shall be pari passu and
identical in all respects, other than with respect to the right of the New
Class A Common Stock to receive one hundred percent (100%) of any AH
Distribution.

Article III

REPRESENTATIONS AND WARRANTIES OF SELLER

Except
as (a) disclosed in any report, schedule, form, statement or other document
filed with or furnished to the SEC by Seller since December 31, 2019 and
publicly available prior to the date of this Agreement, other than disclosure
contained in the “Risk Factors” or “Forward-Looking Statements” sections
thereof, it being understood that any matter disclosed in any such report,
schedule, form, statement or other document shall not be deemed disclosed for
purposes of Section 3.1, Section 3.2
or Section 3.4, (b) set forth in
the Seller Disclosure Schedule (it being understood that any information set
forth in one Section or subsection of the Seller Disclosure Schedule shall be
deemed to apply to and qualify the Section or subsection of this Agreement to
which it corresponds in number and each other Section or subsection of this
Agreement or the Seller Disclosure Schedule to the extent the relevance to such
Section or subsection is reasonably apparent on the face of such disclosure),
Seller represents and warrants to Buyer as follows:  

Section 3.1       Organization, Standing and Corporate Power.

(a)      
Each of Seller and the Company is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Delaware. 
Each of Seller and the Company has the requisite corporate power and authority
to own, lease or otherwise hold the assets, rights and properties owned, leased
or otherwise held by it and to carry on its business as now being conducted,
except where the failure to have such power and authority (i) has not had and
would 

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not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, (ii) would not reasonably be expected to be materially adverse
to the ability of Seller to consummate the transactions contemplated hereby by
the Outside Date and (iii) would not reasonably be expected to have a material
adverse effect on the ability of Seller, the Company and the Company
Subsidiaries, as applicable, to perform their obligations under the Transaction
Agreements.  The Company is duly qualified as a foreign corporation to do
business and is in good standing in each jurisdiction in which the nature of
its business or the ownership, leasing or operation of its properties makes
such qualification necessary, other than where the failure to be so qualified
or in good standing has not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

(b)        Seller or the Company has made available to Buyer true and
complete copies of the Organizational Documents of the Company, each as amended
to the date hereof.  The Organizational Documents of the Company that have been
so delivered are in full force and effect, and neither Seller nor the Company
is in breach of any provision thereof.

Section 3.2       Capital Structure.

(a)        As of the date hereof, (i) there are 1,000 authorized
shares of capital stock of the Company, consisting of 1,000 shares of Common
Stock, and (ii) the issued and outstanding capital stock of the Company
consists of 100 shares of Common Stock.  Except as provided in the preceding
clause (ii), no shares of capital stock or other equity interests of the
Company are issued, reserved for issuance or outstanding.  As of the Closing,
(A) there shall be 200,000 authorized shares of capital stock of the Company,
consisting of 180,000 shares of New Class A Common Stock and 20,000 shares of
New Class B Common Stock, and (B) the issued and outstanding capital stock of
the Company shall consist of 90,100 shares of New Class A Common Stock and 9,900
shares of New Class B Common Stock.  Except as provided in the preceding clause
(B), as of the Closing, there shall be no shares of capital stock or other
equity interests of the Company that are issued, reserved for issuance or
outstanding.  All outstanding shares of capital stock of the Company were duly
authorized and validly issued and are fully paid and non-assessable, and are
not subject to, and were not issued in violation of, the Securities Act or
other Applicable Law, any Contract or any preemptive, subscription or similar
rights.  Seller is the record and beneficial owner of all of the shares of
Common Stock issued and outstanding, free and clear of all pledges, liens,
charges, encumbrances and security interests of any kind (collectively, “Liens”)
other than restrictions on transfer or otherwise under applicable securities
laws.  There are no restrictions upon the voting or transfer of the shares of
Common Stock pursuant to the Organizational Documents of the Company or any
agreement to which Seller or the Company is a party.  There are no securities,
options, warrants, rights (including conversion, exchange, preemptive, rights
of first refusal, redemption rights, “tag along” rights or “drag along” rights
and subscription rights) or other commitments or agreements (other than this
Agreement or any other Transaction Agreement) of any kind to which Seller or
the Company is a party obligating either of them to issue, sell, purchase, redeem,
transfer or deliver shares of capital stock or other equity interests of the
Company.

(b)        Neither the Company nor any Company Subsidiary has any
outstanding bonds, debentures, notes or other indebtedness, the holders of
which have the right to vote (or which are convertible into or exercisable for
securities having the right to vote) with the stockholders of the 

 

-20-   

 

Company on any matter.  There are no voting trusts,
proxies, “poison pills”, “stockholder rights plans” or similar Contracts to
which the Company is a party with respect to the voting of any shares of
capital stock or other equity interests of the Company.

Section 3.3       Subsidiaries.  Each
Subsidiary of the Company (a “Company Subsidiary”) is duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation, formation or organization and has the requisite
power and authority to own, lease or otherwise hold the assets, rights and
properties owned, leased or otherwise held by it and to carry on its business
as now being conducted, in each case except where the failure to be in good
standing or have such power and authority has not had and would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse
Effect.  Each Company Subsidiary is duly qualified as a foreign corporation,
limited liability company, partnership or other entity, as applicable, to do
business and is in good standing in each jurisdiction in which the nature of
its business or the ownership, leasing or operation of its properties makes
such qualification necessary, other than in such jurisdictions where the
failure to be so qualified or in good standing has not had and would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.  No Company Subsidiary is an insured depository institution
within the meaning of section 3(c) of the Federal Deposit Insurance Act (12
U.S.C. § 1813(c)).   

Section 3.4       Authority.  Each of
Seller, the Company and each applicable Company Subsidiary has the requisite
corporate or other power and authority to enter into this Agreement and the
other Transaction Agreements to which it is or will be a party and to
consummate the transactions contemplated hereby and thereby, as applicable. 
The execution and delivery by each of Seller, the Company and each applicable
Company Subsidiary of this Agreement and the other Transaction Agreements to
which it is or will be a party and the consummation by each of Seller, the
Company and each applicable Company Subsidiary of the transactions contemplated
hereby and thereby, as applicable, have been or, with respect to the
Transaction Agreements to be executed and delivered after the date of this
Agreement, will be, duly authorized by all necessary corporate action on the
part of Seller, the Company or the applicable Company Subsidiary, as
applicable.  Each of this Agreement and the other Transaction Agreements to
which Seller, the Company or a Company Subsidiary is or will be a party has
been or, with respect to the Transaction Agreements to be executed and
delivered after the date of this Agreement, will be, duly executed and
delivered by Seller, the Company or the applicable Company Subsidiary, as
applicable, and, assuming this Agreement and such other Transaction Agreements
constitute legal, valid and binding agreements of the other parties hereto and
thereto, constitute legal, valid and binding obligations of Seller, the Company
or the applicable Company Subsidiary, as applicable, enforceable against
Seller, the Company or the applicable Company Subsidiary, as applicable, in
accordance with their terms, except that (a) such enforcement may be subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws, now or hereafter in effect, affecting creditors’ rights generally and (b)
the remedy of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of the court
before which any proceeding therefor may be brought (collectively, the “Enforceability
Exceptions”). 

Section 3.5       Noncontravention; Consents.  The execution and delivery by each of Seller, the
Company and each applicable Company Subsidiary of this Agreement and the other Transaction
Agreements to which it is or will be a party, and the consummation of the
transactions contemplated hereby and thereby, will not (a) conflict with any of
the provisions of the 

-21-   

 

Organizational Documents of
Seller or the Company, (b) subject to the matters referred to in the next
sentence, conflict with, result in a breach of or default (with or without
notice or lapse of time or both) under, give any contracting party the right to
terminate, modify, cancel or accelerate or receive any payment, or provide its
consent, under, or result in the creation of any Lien (other than a Permitted
Lien) on any property, asset or right of Seller, or the Company or the Company
Subsidiaries, or the Company Business, as applicable, under, any Contract to
which such Person is a party or (c) subject to the matters referred to in the
next sentence, contravene any Applicable Law applicable to Seller, or the
Company or the Company Subsidiaries, as applicable, except, in the case of
clauses (b) and (c), as (I) has not had and would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, (II) would
not reasonably be expected to be materially adverse to the ability of Seller to
consummate the transactions contemplated hereby by the Outside Date and (III)
would not reasonably be expected to have a material adverse effect on the
ability of Seller, the Company and the Company Subsidiaries, as applicable, to
perform their obligations under the Transaction Agreements.  No consent,
approval or authorization of, or declaration or filing with, or notice to, any
third party or Governmental Entity is required by or with respect to Seller or
the Company in connection with the execution and delivery of this Agreement and
the other Transaction Agreements by Seller or the Company, as applicable, or
the consummation by Seller or the Company, as applicable, of the transactions
contemplated hereby and thereby, except for (i) the filing required under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR
Act”), (ii) filings with the SEC, (iii) consents, approvals,
authorizations, declarations, filings or notices in connection with the
Separation and (iv) such other consents, approvals, authorizations, declarations,
filings or notices that, if not obtained or made, have not had and would not
reasonably be expected to (A) have, individually or in the aggregate, a
Material Adverse Effect, (B) be materially adverse to the ability of Seller to
consummate the transactions contemplated hereby by the Outside Date or (III)
have a material adverse effect on the ability of Seller, the Company and the
Company Subsidiaries, as applicable, to perform their obligations under the
Transaction Agreements.

Section 3.6       Financial Statements; SEC Reports.

(a)        Section 3.6(a) of the Seller Disclosure Schedule sets forth,
with respect to each Insurance Company that is required to file statutory
financial statements, true and complete copies of (i) the audited annual
statutory financial statements of the Insurance Companies (together with all
notes thereto) as of and for the years ended December 31, 2020 and December 31,
2019 and (ii) the unaudited interim statutory balance sheets of the Insurance
Companies as of March 31, 2021 (collectively, the “Statutory Statements”). 

(b)        The Company maintains, in all material respects, (i) books
and records in compliance with Applicable Law and (ii) proper and adequate
systems of internal accounting controls designed to provide reasonable
assurance that:  (A) transactions are executed with management’s general or
specific authorization, (B) transactions are recorded as necessary to permit
preparation of its financial statements in conformity in all material respects
with SAP, (C) access to its assets is permitted only in accordance with
management’s general or specific authorization and (D) the recorded accountability
for assets is compared with existing assets at reasonable intervals and
appropriate actions are taken with respect to any differences.  To the
Knowledge of Seller, since January 1, 2019, neither the Company nor Seller has
received any material claim regarding the internal accounting controls of the
Company.  The Company has 

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disclosed,
based on the most recent evaluation of internal control over financial
reporting prior to the date of this Agreement, to Seller’s auditors and the
audit committee of the board of directors of Seller, (1) all “significant
deficiencies” or “material weaknesses” in the design or operation of internal
control over financial reporting which are reasonably likely to materially
adversely affect the Company or any Company Subsidiaries’ ability to record,
process, summarize and report financial information and (2) any fraud, whether
or not material, that involves management or other employees who have a
significant role in the Company or such Company Subsidiaries’ internal control
over financial reporting.  No material weakness in the Company’s or any Company
Subsidiaries’ internal control over financial reporting or reportable
conditions existed as of December 31, 2020.

(c)        The statutory policy reserves required by SAP to be held
with respect to the Insurance Contracts reported in the Statutory Statements (i)
were determined, in all material respects, in accordance with SAP, (ii) are
fairly stated, in all material respects, in accordance with sound actuarial
principles applied on a consistent basis, and (iii) include, in all material
respects, provisions for all actuarial reserves required to be established in
accordance with Applicable Law.

(d)       Section 3.6(d)(i) of the Seller Disclosure Schedule sets
forth an unaudited balance sheet of the Company as of March 31, 2021, prepared
in accordance with GAAP, and fairly presents in all material respects the
consolidated financial position of the Company as of such date (the “Company
Balance Sheet”).  Section 3.6(d)(ii) of the Seller Disclosure Schedule sets
forth a copy of the Company Balance Sheet adjusted to give effect to the assets
and liabilities contemplated to be transferred to the Company and Company
Subsidiaries in connection with the Separation in accordance with the
Separation Principles (other than the Deal Adjustments), calculated in
accordance with the Calculation Methodologies and prepared in good faith (the “Separation
Balance Sheet”).  Section 3.6(d)(iii) of the Seller Disclosure Schedule sets
forth a copy of the Separation Balance Sheet, adjusted to give effect to the
Deal Adjustments (the “Adjusted Separation Balance Sheet”).  Section
3.6(d)(iv) of the Seller Disclosure Schedule sets forth a copy of an
illustrative Separation Balance Sheet, adjusted on an illustrative basis, to
(A) include the results of Adjusted After Tax Income earned during the period
from March 31, 2021 to an illustrative closing on August 31, 2021 (other than
any contributions to Adjusted After Tax Income from sources that are not the
Company or the Company Subsidiaries following Separation) and (B) reflect an illustrative
dividend declared between March 31, 2021 and Closing (clauses (A) and (B), the
 “Roll-Forward Items”), in each case, calculated in accordance with the
Calculation Methodologies and prepared in good faith (the “Pro Forma
Roll-Forward Balance Sheet”).  The Adjusted Book Value set forth on the Pro
Forma Roll-Forward Balance Sheet equals the Specified Amount.  Section
3.6(d)(v) of the Seller Disclosure Schedule sets forth a reconciliation (the “Reconciliation”)
from the Seller’s Quarterly Financial Supplement for the period ended March 31,
2021 Financial Supplement (the “Financial Supplement”) through the
Company Balance Sheet.   

(e)        Seller has filed with or furnished to the SEC all reports,
schedules, forms, statements or other documents (including all exhibits and
financial statements required to be filed or furnished therewith and any other
document or information required to be incorporated therein) required by the
Securities Act or the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), to be filed or furnished by Seller with the SEC since December 31,
2019 (collectively, together with any documents filed with or furnished to the
SEC during such period by Seller to the SEC on a voluntary basis, the “Seller
SEC Documents”). As of its respective date, or, if amended 

 

-23-   

 

prior to the date hereof, as of the date of the last such
amendment, each Seller SEC Document complied when filed or furnished (or, if
applicable, when amended) in all material respects with the Securities Act, the
Exchange Act and the Sarbanes-Oxley Act, and none of the Seller SEC Documents
when filed or furnished (or, in the case of a registration statement filed
under the Securities Act, at the time it was declared effective or subsequently
amended) contained any untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.  

Section 3.7       No Undisclosed Liabilities.  Neither the Company nor any of the Company Subsidiaries
has any liability, whether known or unknown, absolute, accrued, contingent or
otherwise, that is required to be reflected in a balance sheet (or the notes
thereto) of the Company and the Company Subsidiaries prepared in accordance
with GAAP, except (a) those liabilities provided for or disclosed in the Company
Balance Sheet, or in the notes thereto, (b) liabilities incurred in the ordinary
course of business since March 31, 2021, (c) liabilities incurred in connection
with the transactions contemplated by this Agreement (including the Separation)
and the other Transaction Agreements, (d) liabilities that will no longer be
liabilities of the Company and the Company Subsidiaries following the
completion of the Separation and (e) other liabilities that would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect.  

Section 3.8       No Material Adverse Effect; Absence of Changes.  (a) Since December 31, 2020, there has not been any
event or change that has had or would reasonably be expected have, individually
or in the aggregate, a Material Adverse Effect, (b) since December 31, 2020 and
prior to the date hereof, each of Seller, the Company and the Company
Subsidiaries has conducted the Company Business in all material respects in the
ordinary course of business (other than in connection with the execution and
delivery of this Agreement, the transactions contemplated by this Agreement
(including the Separation) and any alternatives thereto) and (c) since March
31, 2021 and prior to the date hereof, the Company has not (i) taken any action
that, if taken after the date of this Agreement, would require the consent of
Buyer pursuant to Sections 5.1(b)(vi) and (vii)  or (ii) declared
or paid any dividends; provided  that, notwithstanding anything to the
contrary herein, compliance with this Section 3.8(c) shall not be a
condition, and shall not be considered for purpose of determining the
satisfaction of any condition, precedent to the Closing, and any breach of this
Section 3.8(c) shall not give rise to any claim for indemnification
pursuant to Article VII, but any breach of this Section 3.8(c)
shall be treated in accordance with the final sentence of Section 2.5(c). 
  

Section 3.9       Taxes.  Except as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect:

(a)        (i) All Tax Returns required to be filed by or on behalf of
the Company or any Company Subsidiary have been timely filed (after giving
effect to any valid extensions of time in which to make such filings) with the
appropriate Tax Authorities and are true and complete and (ii) all Taxes,
whether or not shown on such Tax Returns, required to be paid by or with
respect to the Company or any Company Subsidiary (including Taxes required to
be withheld from payments to third parties) have been timely paid, except, in
each case, with respect to Taxes or matters for which adequate reserves are
reflected, in accordance with GAAP, in the Company’s and the 

 

-24-   

 

Company Subsidiaries’ financial statements. The Company and
each Company Subsidiary has complied with Applicable Law relating to
withholding and reporting (including information reporting) of Taxes and has
duly and timely withheld and paid over to the appropriate Tax Authorities all
amounts required to be so withheld and paid over.

(b)        As of the date hereof, no deficiencies for Taxes have been
proposed, asserted or assessed in writing against the Company or any Company
Subsidiary that have not been resolved or paid in full.  No agreement, waiver
or other document or arrangement is currently in effect waiving or extending the
period for assessment or collection of Taxes (including any applicable statute
of limitation) with respect to the Company or any Company Subsidiary. As of the
date hereof, neither the Company nor any Company Subsidiary is under audit,
examination or investigation by any Governmental Entity or the subject of any
judicial or administrative proceeding in respect of Taxes.  During the past
three years, neither the Company nor any Company Subsidiary has received
written notice from any jurisdiction in which the Company or such Subsidiary
has not filed income or franchise Tax Returns or paid income or franchise Taxes
that the Company or such Company Subsidiary is required to file such Tax
Returns or pay such Taxes in such jurisdiction.

(c)        Except for (i) any existing Tax sharing or allocation
agreements between (A) Seller or any of its Subsidiaries (other than the
Company or any Company Subsidiaries), on the one hand, and (B) the Company
or any Company Subsidiaries, on the other hand,
which agreements are in substantially the same form as the Tax sharing
agreements previously provided to Buyer or (ii) any Tax sharing or allocation
agreements solely between or among the Company and any Company Subsidiaries,
neither the Company nor any Company Subsidiaries is a party to or bound by any
agreement dealing with Tax sharing, allocation, indemnity or distribution
(other than an agreement entered into in the ordinary course of business or a
lending arrangement that, in each case, does not relate primarily to Taxes)
pursuant to which it will have any obligation to make any payments for any
periods ending after the Closing.

(d)       Neither the Company nor any Company Subsidiary (i) has
during the past ten years  been a member of an affiliated group filing a
consolidated Tax Return (other than the “affiliated group” as defined in
Section 1504(a) of the Code, the common parent of which is or was Seller or any
of its Subsidiaries) or (ii) has any liability for Taxes of any Person (other
than Seller, any Subsidiary of the Seller or any Company Subsidiary) under
Treasury Regulations Section 1.1502-6 or any similar provision of state, local
or foreign law, or as a transferee or successor.  

(e)        There are no Liens for Taxes upon the assets of the Company
or any Company Subsidiaries, except for Permitted Liens.

(f)        During the past two years, neither the Company nor any
Company Subsidiaries has been a “distributing corporation” or a “controlled
corporation” within the meaning of Section 355(a)(1)(A) of the Code.

(g)        Within the past three years, neither the Company nor any
Company Subsidiaries has participated in any “listed transactions” within the
meaning of Treasury Regulations Section 1.6011-4(b)(2).

 

-25-   

 

(h)        Neither the Company
nor any Company Subsidiaries has received or applied for a Tax ruling or
entered into a closing agreement pursuant to Section 7121 of the Code, offer in
compromise, or similar agreement with a Tax Authority, in any case, that would
be binding upon the Company or any Company Subsidiaries after the Closing.

Section 3.10     Compliance with Applicable Law; Permits.

(a)        The Company and the Company Subsidiaries are, and, since
December 31, 2019, have been, in compliance in with all Applicable Laws, except
as would not reasonably be expected to be, individually or in the aggregate,
material to the Company Business, taken as a whole, or materially adverse to
the ability of Seller to consummate the transactions contemplated hereby. 
Except as would not reasonably be expected to be, individually or in the
aggregate, material to the Company Business, taken as a whole, or materially
adverse to the ability of Seller to consummate the transactions contemplated
hereby or have a material adverse effect on the ability of Seller, the Company
and the Company Subsidiaries, as applicable, to perform their obligations under
the Transaction Agreements, none of the Company or any of the Company
Subsidiaries (i) has since December 31, 2019 received any written or, to the
Knowledge of Seller, other communication from the Company or any Company
Subsidiary regarding any actual or alleged violation of, or failure on the part
of the Company or any Company Subsidiary to comply with, any Applicable Laws or
order, injunction or decree of a Governmental Entity or (ii) to the Knowledge
of Seller, is under investigation with respect to any material violation of any
Applicable Laws or order, injunction or decree of a Governmental Entity other
than any such item that has been cured or otherwise resolved to the
satisfaction of such Governmental Entity.

(b)        The Company and the Company Subsidiaries own, hold or
possess all permits, licenses, approvals, authorizations, consents and
registrations that are necessary for them to own or lease, operate and use
their respective assets, rights or properties and to carry on and conduct their
respective businesses as conducted on the date hereof (collectively, “Permits”),
except as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.  All such Permits are valid and in full
force and effect and the Company and the Company Subsidiaries are in compliance
with the requirements of all such Permits, in each case, except as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect or would not reasonably be expected to be materially adverse to
the ability of Seller to consummate the transactions contemplated hereby by the
Outside Date or have a material adverse effect on the ability of Seller, the
Company and the Company Subsidiaries, as applicable, to perform their
obligations under the Transaction Agreements.

(c)        Except as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect, none of the Insurance Companies has, since December 31, 2019,
received written notice of deficiencies or violations described in any reports
of examination (including financial, market conduct and similar examinations)
of any Insurance Company issued by any Insurance Regulator that have not been
resolved to the reasonable satisfaction of the Insurance Regulator that noted
such deficiencies or violations.

Section 3.11     Litigation.  There are
no Actions pending against the Company or the Company Subsidiaries that would
reasonably be expected to be, individually or in the aggregate, material to the
Company Business, taken as a whole.  There is no order of any Governmental
Entity 

-26-   

 

in effect or, to the Knowledge of Seller,
threatened against the Company or any Company Subsidiaries that would
reasonably be expected to be, individually or in the aggregate, material to the
Company Business, taken as a whole.

Section 3.12     Brokers.  Seller is
solely responsible for the payment of the fees and expenses of any broker,
investment banker, financial adviser or other Person acting in a similar
capacity in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Seller, the Company or any of
their respective Affiliates.

Section 3.13     Sufficiency of Assets.
The assets, rights and properties held by the Company and the Company
Subsidiaries as of the completion of the Separation, when taken together with
all of the other agreements entered into in connection with the Separation
(including in respect of transition services), shall be sufficient for the
conduct of the Company Business in all material respects. 

Section 3.14     Employee Matters.

(a)        Except as would not reasonably be expected to be material
to the Company and the Company Subsidiaries, taken as a whole, neither the
execution and delivery of this Agreement nor the consummation of the purchase
of the Purchased Shares contemplated hereby will result in, cause the
accelerated vesting, funding or delivery of, or increase the amount or value
of, any payment or benefit to any current or former employee, trustee, director
or consultant of the Company or any of the Company Subsidiaries, or result in
any payment that could reasonably be construed, individually or in combination
with any other such payment, to constitute an “excess parachute payment” under
Section 280G of the Code.

(b)        No portion of the
assets in any account of any direct or indirect subsidiary of the Company
administered by the Investment Manager pursuant to the SMA Agreements in the
forms attached hereto as Schedule A of the Seller Disclosure Schedule (each,
a “Covered Account” and collectively, the “Covered Accounts”)
constitutes “plan assets” within the meaning of ERISA and the regulations
promulgated thereunder of any plan subject to ERISA or Section 4975 of the Code
(“Plan Assets”). 

Section 3.15     Insurance Matters.  Except
as has not had, and would not reasonably be expected to have, individually or
in the aggregate, a Material Adverse Effect:

(a)        Each reinsurance
agreement to which the Company or any Company Subsidiary is a party and has any
material existing rights or material obligations (each, a “Reinsurance
Contract”) is a legal, valid and binding obligation of the Company or the
applicable Company Subsidiary party thereto, and, to the Knowledge of Seller,
each other party thereto, and is enforceable against the Company or the
applicable Company Subsidiary party thereto, and, to the Knowledge of Seller,
each other party thereto, in accordance with its terms, subject to the
Enforceability Exceptions.

(b)        Since December 31,
2019, neither the Company nor the applicable Company Subsidiary, nor, to the
Knowledge of Seller, any of the other parties to any Reinsurance Contract is in
default or breach or has failed to perform any obligation under any such
Reinsurance Contract.

 

-27-   

 

(c)        There are no pending
or, to the Knowledge of Seller, threatened Actions with respect to any
Reinsurance Contract. 

SECTION
3.16     No Other Representation or Warranty.  Except for the
representations and warranties expressly contained in this Article III,
none of Seller, the Company or any other Person on behalf of Seller or the
Company makes any express or implied representation or warranty with respect to
Seller, the Company, the Company Business or otherwise, or with respect to any
information provided to Buyer or its Affiliates or its or their Representatives
in connection with this Agreement or the transactions contemplated hereby, and
Buyer hereby disclaims any reliance on any representations and warranties,
except for the representations and warranties expressly contained in this Article
III.  None of Seller, the Company or any other Person will have or be
subject to any liability to Buyer or its Affiliates or any other Person
resulting from the distribution to Buyer or its Affiliates or its or their
Representatives, the use by any of the foregoing of, any such information,
including any information, documents, projections, forecasts or any other
material made available to Buyer or its Affiliates or its or their
Representatives in certain “data rooms” or management presentations in
connection with any consideration and review of this Agreement or the
transactions contemplated hereby, unless any such information is expressly
subject to a representation or warranty contained in this Article III. 

Article IV

REPRESENTATIONS AND WARRANTIES
OF BUYER

Buyer
represents and warrants to Seller as follows:

Section 4.1       Organization and Standing.  Buyer is a limited liability company, duly organized, validly existing
and in good standing under the laws of the State of Delaware.

Section 4.2       Authority.  Buyer has
the requisite corporate power and authority to enter into this Agreement and
the other Transaction Agreements to which it is or will be a party and to
consummate the transactions contemplated hereby and thereby.  The execution and
delivery by each Buyer Party of this Agreement and the other Transaction
Agreements to which it is or will be a party and the consummation by each Buyer
Party of the transactions contemplated hereby and thereby have been and, with
respect to the Transaction Agreements to be executed and delivered after the
date of this Agreement, will be, duly authorized by all necessary corporate
action on the part of such Buyer Party.  Each of this Agreement and the other
Transaction Agreements to which a Buyer Party is or will be a party has been
or, with respect to the Transaction Agreements to be executed and delivered
after the date of this Agreement, will be, duly executed and delivered by such
Buyer Party and, assuming this Agreement and such other Transaction Agreements
constitute legal, valid and binding agreements of the other parties hereto and
thereto, constitute legal, valid and binding obligations of such Buyer Party,
enforceable against such Buyer Party in accordance with their terms, subject to
the Enforceability Exceptions.

Section 4.3       Noncontravention; Consents.  The execution and delivery by Buyer and each Buyer Party
of this Agreement and the other Transaction Agreements by to which it is or
will be a party, and the consummation of the transactions contemplated hereby
and thereby by such Buyer Party will not (a) conflict with any of the
provisions of the Organizational Documents of any Buyer Party, (b) subject to
the matters referred to in the next sentence, conflict with, result in 

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a breach of or default (with or without notice or lapse
of time or both) under, give any contracting party the right to terminate,
cancel or accelerate any payment under, or result in the creation of any Lien
(other than a Permitted Lien) on any property, asset or right of any Buyer
Party under, any material Contract to which any Buyer Party is a party or (c)
subject to the matters referred to in the next sentence, contravene any
Applicable Law, except, in the case of clauses (b) and (c) above, as (i) has
not had and would not reasonably be expected to have, individually or in the
aggregate, a Buyer Material Adverse Effect and (ii) would not reasonably be
expected to have a material adverse effect on the ability of Buyer and the
Buyer Parties, as applicable, to perform their obligations under the
Transaction Agreements.  No consent, approval or authorization of, or
declaration or filing with, or notice to, any third party or Governmental
Entity is required by or with respect to any Buyer Party in connection with the
execution and delivery of this Agreement and the other Transaction Agreements
by the Buyer Parties or the consummation by the Buyer Parties of any of the
transactions contemplated hereby and thereby, except (i) for the filing
required under the HSR Act, (ii) for such other consents, approvals,
authorizations, declarations, filings or notices that, if not obtained or made,
would not reasonably be expected to have, individually or in the aggregate, a
Buyer Material Adverse Effect and (iii) as has not had and would not reasonably
be expected to have a material adverse effect on the ability of Buyer and the
Buyer Parties, as applicable, to perform their obligations under the
Transaction Agreements.  

Section 4.4       Compliance with Applicable Law.  Buyer is in compliance with all Applicable Law, except
as would not reasonably be expected to have, individually or in the aggregate,
a Buyer Material Adverse Effect.  

Section 4.5       Purchase Not for Distribution.  The Purchased Shares will be acquired by Buyer for its
own account and not with a view to distribution.  Buyer will not resell,
transfer, assign, pledge or otherwise dispose of any Purchased Shares, except
in compliance with the registration requirements of the Securities Act of 1933,
as amended (the “Securities Act”), and any applicable state securities
laws, or pursuant to an available exemption therefrom.  Buyer (a) has made its
own inquiry and investigation into, and, based thereon, has formed an
independent judgment concerning, the Company, the Company Subsidiaries and the
Company Business and (b) has been furnished with or given access to certain
information about the Company, the Company Subsidiaries and the Company
Business.

Section 4.6       Litigation.   There
are no Actions pending or, to the Knowledge of Buyer, threatened in writing
against or affecting Buyer or, to the Knowledge of Buyer, any of its
Affiliates, that (a) seek to restrain or enjoin the consummation of any of the
transactions contemplated by this Agreement or (b) would reasonably be expected
to have a Buyer Material Adverse Effect. There is no order of any Governmental
Entity in effect or, to the Knowledge of Buyer, threatened against Buyer or, to
the Knowledge of Buyer, any of its Affiliates, that would reasonably be
expected to have, individually or in the aggregate, a Buyer Material Adverse
Effect.

Section 4.7       Sufficiency of Funds.  Buyer
is a party to and has accepted a fully executed equity commitment letter, dated
as of the date hereof (the “Equity Commitment Letter”), from Blackstone Holdings II L.P. (the “Equity Provider”) pursuant to which the
Equity Provider has agreed, on the terms and subject to the conditions set
forth in the Equity Commitment Letter, to invest in Buyer the amounts set forth
therein.  Buyer has delivered to Seller a true, complete and correct copy of
the executed Equity Commitment Letter.  As of the date hereof, the Equity 

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Commitment Letter is in full force and effect and has not
been amended, restated or otherwise modified or waived, and the commitments
contained therein have not been withdrawn, modified or rescinded in any
respect.  Assuming the conditions set forth in Section 6.1 and Section
6.2 are satisfied at the Closing, Buyer will have at the Closing cash
proceeds sufficient to pay the Purchase Price at the Closing.  The obligations
of Buyer to effect the transactions contemplated by this Agreement are not
conditioned upon the availability to Buyer or any of its Affiliates of any
debt, equity or other financing in any amount whatsoever.  

Section 4.8       Limited Guaranty.  Concurrently with the execution and delivery of
this Agreement, Buyer has delivered to Seller the limited guaranty, dated as of
the date hereof (the “Limited Guaranty”), addressed to Seller from the
Equity Provider, guaranteeing certain obligations of Buyer under this Agreement
on the terms set forth therein.  As of the date hereof, the Limited Guaranty is
in full force and effect and constitutes a legal, valid and binding obligation
of the Equity Provider, enforceable against the Equity Provider in accordance
with its terms, subject to the Enforceability Exceptions.  

Section 4.9       Brokers.  Buyer is
solely responsible for the payment of the fees and expenses of any broker,
investment banker, financial adviser or other Person acting in a similar
capacity in connection with the transactions contemplated by this Agreement or
any of the Transaction Agreements based upon arrangements made by or on behalf
of Buyer or any of its Affiliates.

Section 4.10     No Other Representation or Warranty.  Except for the representations and warranties expressly
contained in this Article IV, none of Buyer or any other Person on
behalf of Buyer makes any express or implied representation or warranty with
respect to Buyer or otherwise, or with respect to any information provided to
Seller, the Company or their Affiliates or their Representatives in connection
with this Agreement or the transactions contemplated hereby, and Seller hereby
disclaims any reliance on any representations and warranties, except for the
representations and warranties expressly contained in this Article IV. 
None of Buyer or any other Person will have or be subject to any liability to
Seller, the Company or their Affiliates or any other Person resulting from the
distribution to Seller, the Company or their Affiliates or their Representatives,
the use by any of the foregoing of, any such information, including any
information, documents, projections, forecasts or any other material made
available to Seller, the Company or their Affiliates or their Representatives
in certain “data rooms” or management presentations in connection with any
consideration and review of this Agreement or the transactions contemplated
hereby, unless any such information is expressly subject to a representation or
warranty contained in this Article IV. 

Article V

COVENANTS

Section 5.1       Conduct of Business.

(a)        Except (i) as required or expressly contemplated by this
Agreement or the other Transaction Agreements, (ii) as required by Applicable
Law, (iii) in connection with the Separation to the extent consistent with the
Separation Principles, (iv) as reasonably required in response to COVID-19 or
any actions of any Governmental Entity in response thereto, (v) as set forth in

 

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Section 5.1 of the Seller Disclosure Schedule or (vi) as
Buyer otherwise consents in advance in writing (which shall include email)
(which consent shall not be unreasonably withheld, conditioned or delayed),
from the date of this Agreement to the Closing, Seller shall cause the Company
to, and to cause the Company Subsidiaries and the Company Business to, use
reasonable best efforts to carry on the Company Business in all material
respects in the ordinary course and, to the extent consistent therewith, to
preserve intact and maintain its current business organizations and its
material relationships with third parties (including Governmental Entities,
insureds and others having business dealings with them).

(b)        Except (i) as required or expressly contemplated by this
Agreement or the other Transaction Agreements, (ii) as required by Applicable
Law, (iii) in connection with the Separation to the extent consistent with the
Separation Principles, (iv) as reasonably required in response to COVID-19 or
any actions of any Governmental Entity in response thereto, (v) as set forth in
Section 5.1 of the Seller Disclosure Schedule or (vi) as Buyer otherwise
consents in advance in writing (which shall include email) (which consent shall
not be unreasonably withheld, conditioned or delayed), from the date of this
Agreement to the Closing, Seller shall cause the Company, the Company
Subsidiaries and the Company Business not to:

(i)         (A) split, combine or reclassify any of the Company’s outstanding
capital stock or equity securities or issue or authorize the issuance of any
other stock or securities (including any derivatives securities) in respect of,
in lieu of or in substitution for shares or other interests representing any of
the Company’s outstanding capital stock or equity securities, (B) purchase,
redeem or otherwise acquire any outstanding capital stock or equity securities
of the Company or (C) consummate or adopt or enter into a plan of complete or
partial liquidation, dissolution, merger, consolidation, restructuring,
recapitalization, business combination or other reorganization of the Company
or any of the Company Subsidiaries that are material to the Company
Business;

(ii)        issue, sell, convey, transfer, dispose of, pledge, grant
any option, warrant or right to purchase or subscribe to or otherwise encumber
any capital stock of or equity interests in the Company, or issue, sell, grant
or enter into any subscription, warrant, option, conversion or other right,
agreement, commitment, arrangement or understanding of any kind, contingent or
otherwise, to purchase or otherwise acquire, any such capital stock or equity
interests, or any securities convertible into or exchangeable for any such
capital stock or equity interests; 

(iii)       (A) amend the Company’s Organizational Documents or (B)
amend (in any material respect) the Organizational Documents of any of Company
Subsidiary that is material to the Company Business, in each case, in a manner
that would disproportionately adversely affect the rights or obligations of
Buyer, in its capacity as a holder of New Common Stock, relative to Seller, in
its capacity as a holder of New Common Stock, in each case as if the Closing
had occurred prior to such amendment;

(iv)       declare, set a record date or set aside or pay any
dividends on, or make any other distributions (whether in cash, stock or
property) in respect of, the outstanding capital stock of or equity interests
in the Company or otherwise transfer or make payments in respect of equity
interests in the Company, except for (A) dividends or distributions in an 

 

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amount equal to Adjusted After Tax Income with respect to
the period between March 31, 2021 and Closing (subject to any regulatory
requirements) declared prior to the Closing and (B) as set forth on Item 1 of Section 5.1(b)(iv)  of the Seller Disclosure
Schedule (the “AH Distribution”) (in each case, so long as the aggregate
impact of the distributions set forth in clauses (A) and (B) are reflected in
the calculation of Interim Adjusted Book Value and Final Adjusted Book Value in
accordance with the Calculation Methodologies);

(v)        other than (x) with respect to the Separation Documentation
(which shall be governed by the terms of the Separation Principles), (y) any modification,
amendment, or termination of, or entry into, any Affiliate Contract that is on
arm’s length terms, fair and reasonable to the Company Business in all material
respects or in the ordinary course of business consistent with historical
practice, or (z) any modification, amendment or termination of, or entry into,
any Affiliate Contract in connection with the Separation in accordance with the
Separation Documentation, (A) modify, amend (in any material respect) or
terminate (other than, as a result of the expiration of the term thereof) any
Affiliate Contract, or waive, release or assign any material rights or claims
thereunder or (B) enter into any Affiliate Contract, in each of cases (A) and
(B), on terms that are adverse in any material respect to Buyer;

(vi)       other than with respect to any Insurance Company or
operating indebtedness (i.e., guaranteed investment contracts, FHLB short-term
financings and other ordinary course operating indebtedness) incurred in the
ordinary course of business consistent with past practice, incur, assume,
guarantee, refinance, be allocated or become obligated with respect to any
third-party indebtedness (including by issuance of debt securities of the
Company or any Company Subsidiary), except as permitted pursuant to (and which
shall be taken into account for purposes of) the Separation Principles, in each
case, so long as such third-party indebtedness is reflected in full in the
calculation of Final Adjusted Book Value;

(vii)      (A) repay, forgive or otherwise cancel any intercompany
indebtedness or payables between the Company or any Company Subsidiary (or
otherwise with respect to the Company Business), on the one hand, and Seller or
any of its Subsidiaries, on the other hand, (B) loan any amounts to Seller or
its Subsidiaries (other than the Company and the Company Subsidiaries) or (C)
incur any indebtedness or payables to Seller or its Subsidiaries (other than
the Company and the Company Subsidiaries), in each case, other than (x)
repayments of intercompany indebtedness and payables to Seller and its
Subsidiaries in the ordinary course of business of business consistent with
past practice (which repayments are not subject to limitation), (y) the
incurrence of ordinary course intercompany indebtedness or payables consistent
with historical practice, on terms (including with respect to interest rates)
consistent with historical practice with respect to existing ordinary course
intercompany indebtedness), (z) as permitted pursuant to (and which shall be
taken into account for purposes of) the Separation Principles, in each case, so
long as the aggregate amount of such intercompany indebtedness and payables and
repayments are reflected in full in the calculation of Final Adjusted Book
Value;

 

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(viii)     enter into any new
material line of business that would subject Buyer or its Affiliates to
obligations under the Bank Holding Company Act of 1956, as amended, or any
other Applicable Law that governs banking or similar entities; or

(ix)       enter into a binding agreement to take or commit to take
any of the foregoing actions.

Section 5.2       Access to Information. 
From the date of this Agreement through the earlier of the Closing and such
time as this Agreement is terminated in accordance with Article VIII,
Seller shall cause the Company and the Company Subsidiaries to provide, solely
in furtherance of the transactions contemplated by this Agreement and the other
Transaction Agreements, Buyer and its Representatives with, upon reasonable
advance notice and during regular business hours, reasonable access to the
offices, properties, assets, books, Contracts, insurance policies and business,
regulatory, financial and other records, and management and Representatives of
the Company, as Buyer may request from time to time; provided  that any
such access pursuant to this Section 5.2 shall be conducted in
accordance with Applicable Law, under the supervision of Seller’s personnel and
in such a manner as to not to unreasonably interfere with the normal operations
of the Company and the Company Subsidiaries.  The foregoing notwithstanding,
Seller shall not be required to cause the Company or the Company Subsidiaries
to provide such access if it would unreasonably disrupt the operations of
Seller or its Subsidiaries (including the Company and the Company
Subsidiaries), would cause a violation of any Contract, would, in the
reasonable judgment of Seller or the Company, result in a loss of privilege or
trade secret protection or would constitute a violation of any Applicable Law,
and in any such event, the parties shall use commercially reasonable efforts to
make appropriate substitute arrangements in a manner that does not result in
such loss or violation.  In addition, to the extent that Seller undertake and
completes an appraisal of the assets of the Company or the Company Subsidiaries
prior to the Closing, Seller shall promptly deliver a copy of such appraisal to
Buyer and provide Buyer with access to such reasonable and supporting
information underlying such appraisal, including any third-party provider
involved in its preparation, as may be reasonably requested by Buyer.

Section 5.3       Reasonable Best Efforts. 
Upon the terms and subject to the conditions and other agreements set forth in
this Agreement, other than with respect to obtaining permits, orders or other
consents, approvals or authorizations of Governmental Entities (which shall be
exclusively governed by Section 5.4), each party agrees to use its
reasonable best efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, and to assist and cooperate with the other party in doing,
all things necessary, proper or advisable to consummate and make effective, in
the most expeditious manner practicable, the transactions contemplated by this
Agreement and the other Transaction Agreements.

Section 5.4       Consents, Approvals and Filings.

(a)        Each of Seller and Buyer shall use, and shall cause their
respective Affiliates to use, their respective reasonable best efforts, and
shall cooperate, and shall cause their respective Affiliates to cooperate,
fully with each other, in each case to (i) comply as promptly as
practicable with all requirements of Governmental Entities applicable to the
transactions contemplated by this Agreement and the other Transaction
Agreements and (ii) obtain as promptly as practicable all necessary permits,
orders or other consents, approvals or authorizations of Governmental Entities 

 

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in connection with the consummation of the transactions
contemplated by this Agreement and the other Transaction Agreements; provided,
that each party shall be responsible for all fees and costs related to its own
required filings with and approvals of other Governmental Entities.  In
connection with the foregoing, each of Seller and Buyer shall, and shall cause
their respective Affiliates to, make all legally required filings with, and
requests for approval by, all applicable Governmental Entities (including
insurance regulators) as promptly as practicable after the date hereof in order
to facilitate prompt consummation of the transactions contemplated by this
Agreement, including filing the notification and report form required under the
HSR Act within fifteen (15) Business Days after the date hereof, and to use
reasonable best efforts to take all steps that are necessary, proper or
advisable to avoid any Action by any Governmental Entity with respect to the
transactions contemplated by this Agreement.

(b)        In connection with the foregoing, each of Seller and Buyer
shall, and shall cause their respective Affiliates to, consent and commit to
any condition, limitation or qualification imposed by any Governmental Entity
on its grant of any such permit, order, consent, approval or authorization; provided,
that notwithstanding the foregoing or anything to the contrary in this
Agreement (including Section 5.3 and this Section 5.4) or any
other Transaction Agreement, (i) neither Seller nor or any of its Affiliates
shall be required to agree, consent or commit to any such conditions, limitations
or qualifications in respect of Seller or any of its Affiliates, or any
businesses, operations, assets or liabilities thereof, other than the Company
and the Company Subsidiaries, (ii) none of Seller, Buyer or any of their
respective Affiliates shall be required to consent to or comply with any such
conditions, limitations or qualifications that (A) are not conditioned upon
(and effective only after) the Closing, (B) individually or in the aggregate,
would reasonably be expected to have a material adverse effect on the Company
Business, taken as a whole, or (C) would impose any requirement on Buyer or any
of its Affiliates relating to the contribution of capital, keep well or capital
maintenance arrangements or maintaining certain risk based capital levels of
the Insurance Companies, (iii) neither Buyer nor any of its Affiliates shall be
required to agree, consent or commit to any such conditions, limitations or
qualifications with respect to any of Buyer’s Affiliates (including, for these
purposes, The Blackstone Group Inc. (“Blackstone”) and its Subsidiaries
and any investment funds or investment vehicles affiliated with, or managed or
advised by, Blackstone or any portfolio company (as such term is commonly
understood in the private equity industry) or investment of Blackstone or of
any such investment fund or investment vehicle), or any interest therein, other
than, subject to the foregoing clause (C), with respect to the Company, the
Company Subsidiaries and the Company Business, any such Person’s direct or
indirect investment in or ownership of any interest in the foregoing, or this
Agreement, the other Transaction Agreements or the transactions contemplated
hereby or thereby; provided, that prior to Buyer or its Affiliates
agreeing to any condition, limitation or qualification required pursuant to
this Section 5.4, Buyer shall be entitled to engage in good faith
discussions with the applicable Governmental Entity to seek to resolve any
requests or objections, so long as such discussions would not reasonably be
expected to prevent the consummation of the transactions contemplated hereby by
the Outside Date.  In no event shall the either party propose, negotiate,
effect or agree to any action contemplated above without the prior written
consent of the other party.  

(c)        Buyer and Seller shall cooperate and consult with each
other in connection with the making of all filings, notifications,
communications, submissions, and any other actions pursuant to this Section
5.4 in connection with all necessary permits, orders or other consents,
approvals or 

 

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authorizations of Governmental Entities in connection with
the consummation of the transactions contemplated by this Agreement, and, to
the extent not prohibited by Applicable Law, Buyer and Seller shall each keep
the other apprised on a reasonably current basis of the status of in connection
with all necessary permits, orders or other consents, approvals or
authorizations of Governmental Entities in connection with the consummation of
the transactions contemplated by this Agreement, including promptly furnishing
the other with copies of substantive communications received by Buyer and
Seller, as the case may be, or any of their respective Affiliates, from any
Governmental Entity with respect to any such permits, orders or other consents,
approvals or authorizations of Governmental Entities.  Subject to Applicable
Law relating to the exchange of information, Buyer and Seller shall permit
counsel for the other party a reasonable opportunity to review in advance, and
consider in good faith the views of the other party in connection with, any
proposed notifications or filings and any written communications or submissions
to any Governmental Entity in connection with all necessary permits, orders or
other consents, approvals or authorizations of Governmental Entities in
connection with the consummation of the transactions contemplated by this
Agreement; provided  that Buyer and Seller may, as each deems advisable
and necessary, redact such materials to remove sensitive information, or
reasonably designate any sensitive material provided to the other party under this
Agreement as “outside counsel only.”

(d)       Prior to the Closing, except as otherwise agreed by the parties,
the parties shall cooperate and use reasonable best efforts to make or obtain
the approval, authorization, consent, license or permission of, or waiver or
other action by, or notification to, any third party (other than a Governmental
Entity or an Affiliate of Seller, the Company or Buyer) required for the
consummation of the transactions contemplated by this Agreement and the other
Transaction Agreements; provided  that no party shall be required to
make any payment or incur any liability or offer or grant any accommodation
(financial or otherwise) or commence or participate in any Action in order to
obtain such third-party consents.

(e)        Buyer shall not be required to (i) provide (A) nonpublic or
other financial or sensitive personally identifiable information of the Equity
Provider, its respective affiliates and their respective directors, officers,
employees, managers or partners, or its or their control persons or direct or
indirect equityholders and their respective directors, officers, employees,
managers or partners (collectively with the Equity Provider, the “Equity
Provider Related Persons”) or (B) any other nonpublic, proprietary or other
confidential information of an Equity Provider Related Person that exceeds the
scope of information that such Equity Provider Related Person has historically
supplied in connection with a similar governmental filing or notification, or
(ii) disclose the identities of direct or indirect shareholders, members or
beneficiaries of the Equity Provider or its affiliates that beneficially own
less than 10% of any such entity, in each of cases (i) or (ii), (x) unless the
failure to provide or disclose such information would reasonably be expected to
(1) impede the Closing or (2) prevent the consummation of the transactions
contemplated hereby by the Outside Date, in which case Buyer shall be required
to provide or disclose such information and (y) except for National Association
of Insurance Commissioners biographical information.  Without limiting the
foregoing, Buyer (A) shall be entitled to enter into good-faith discussions
with the applicable Governmental Entity and use reasonable best efforts to seek
to promptly resolve such requests prior to providing such information and (B)
may provide any such sensitive or confidential information directly to the
applicable Governmental Entity requesting such information without being provided
to the Seller or the Company to the extent permitted by the applicable
Governmental Entity.  Without limiting the obligations of Buyer pursuant to
this 

 

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Section 5.4, all
appearances, submissions, presentations, briefs, and proposals made or
submitted by or on behalf of the Equity Provider Related Persons before any
Governmental Entity shall be controlled by Buyer.

Section 5.5       Public Announcements. 
Each of Buyer and Seller shall, and shall cause their respective Affiliates to,
consult with the other party before issuing, and provide the other party with
the opportunity to review and comment upon, any press release or other public
statement with respect to this Agreement or the transactions contemplated
hereby, and shall not issue any such press release or make any such public
statement with respect to such matters unless the other party consents in
advance in writing (which shall include email) (which consent shall not be
unreasonably withheld, conditioned or delayed), except as may be required by
Applicable Law or by the requirements of any securities exchange; provided 
that, to the extent not prohibited by Applicable Law or the requirements of any
such securities exchange and to the extent reasonably practicable, the
disclosing party under this exception shall provide the non-disclosing party a
reasonable opportunity to review any such disclosure; provided, however,
that the foregoing shall not apply to any press release or other public
statement to the extent the statements therein with respect to this Agreement
or the transactions contemplated hereby are consistent in all material respects
with statements previously issued in compliance with this Section 5.5. 

Section 5.6       Further Assurances. 
Each of Seller and Buyer shall execute and deliver, or shall cause to be
executed and delivered, such documents, certificates, agreements and other
writings and shall take, or shall cause to be taken, such further actions, in
each case as may be reasonably requested by any other party to carry out the
provisions of this Agreement.

Section 5.7       Company
Financing.  Buyer agrees that, in the
event that, at any time before or after the Closing, the Company offers for
sale in a private or public offering of securities (the “Hybrid Securities
Offering”) subordinated debt securities (the “Hybrid Securities”),
then Buyer shall (a) consider in good faith purchasing, or causing to be
purchased, at least $250,000,000 aggregate principal amount of Hybrid
Securities in or concurrently with the Hybrid Securities Offering, on the same
terms and conditions as such Hybrid Securities are issued and sold to other
investors in the Hybrid Securities Offering; provided, that any such
purchase by Buyer shall require the mutual agreement of Buyer and the Company,
and (b) use good faith efforts to assist the Company with the offering and sale
of the Hybrid Securities in the Hybrid Securities Offering; provided 
that such good faith efforts shall not require, or be construed to require,
Buyer or its Affiliate to purchase any such Hybrid Securities in such Hybrid
Securities Offering.

Section 5.8       Stockholders Agreement. 
Prior to the Closing, Seller and Buyer shall negotiate in good faith the form
of a definitive stockholders agreement (the “Stockholders Agreement”),
by and among the Company, Seller and Buyer, having the terms set forth in Section 5.8  of the Seller Disclosure Schedule; provided,
that, until such time as such definitive form is completed, executed and delivered
by the parties, the terms set forth in Section 5.8 
of the Seller Disclosure Schedule shall control and be binding upon the
Company, Seller and Buyer from and after the Closing, and references in this
Agreement to the “Stockholders Agreement” shall be deemed to be references to
such binding terms. 

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Section 5.9       Separation.

(a)       As promptly as practicable after the date hereof, the Seller and
the Company shall take certain actions to effect the Separation in accordance
with the separation principles set forth in Section 5.9 
of the Seller Disclosure Schedule hereto (the “Separation Principles”). 
From and after the date hereof, Seller shall use commercially reasonable
efforts to, and shall cause the Company and the Company Subsidiaries to use
commercially reasonable efforts to, take all actions and do all things
necessary, proper and advisable, subject to the requirements of Applicable Law
and of any Governmental Entity, to prepare, execute and perform the separation
agreement and other customary agreements for a separation on terms consistent
with the Separation Principles (such agreements and other documentation, the “Separation
Documentation”). 

(b)        Seller shall provide drafts of the Separation Documentation
to be filed with the SEC (including related exhibits and schedules) and other
Separation Documentation reasonably requested by Buyer, in each case,
reasonably in advance of the filing of forms of such Separation Documentation
with the SEC or finalizing such other Separation Documentation and drafts of
any separation steps memorandum or similar planning information regarding the
Separation (the “Separation Materials”) and shall make its applicable
Representatives available to Buyer’s Representatives a reasonable number of
times upon reasonable prior notice (and during normal business hours) for
purposes of discussing the draft Separation Documentation and Separation
Materials and shall consider in good faith any comments of Buyer’s
Representatives to such documents provided promptly following Buyer’s receipt
thereof.  Seller shall keep Buyer apprised on a reasonably timely basis of the
status of the Separation.  The Separation Documentation shall be (i) in form
and substance consistent with the Separation Principles and (ii) negotiated and
implemented in good faith. 

(c)        The parties agree that, in connection with the Separation
and the transactions contemplated by the SMA Agreements, Seller or one or more
of its Subsidiaries (including the Company and the Company Subsidiaries) may
transfer to Buyer or its Affiliates certain investment personnel that provide
investment management services to the Company, provided  that any such
transfer shall require the mutual agreement of Seller or the Company, on the
one hand, and Buyer, on the other hand (in each case, in its sole discretion).

(d)       Notwithstanding anything to the contrary herein, (i) Buyer
acknowledges that the Separation is not expected to be completed prior to the
Closing and the execution and performance of agreements and other documentation
and taking of other actions required to effect the separation may not occur
until after the Closing and (ii) the parties agree that the completion of the
Separation or any part thereof is not a condition to the obligations of either
party to effect the Closing (it being understood that the Company shall comply
with its obligations relating to the Separation hereunder).

Section 5.10     Plan Assets. Prior to
the Closing, Seller shall not allow, and shall cause the Company and the
Company Subsidiaries to not allow, any portion of any assets in any Covered Account to constitute Plan
Assets.    Prior to the Closing, Seller
shall promptly notify Buyer in writing if Seller (or any of its Affiliates)
becomes aware that there is a reasonable
likelihood that any of the Covered Accounts’
assets constitute Plan Assets, which notice shall identify the applicable
Covered Account(s).  Seller and the Company
shall use commercially reasonable efforts 

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to remediate
any Plan Asset Issue as soon as reasonably as practicable following the date a
Plan Asset Issue is identified or notified to the Company.  The parties
expressly agree that compliance with this covenant shall not be a condition to
Closing, and the presence of a Plan Asset Issue shall not be a basis not to
consummate the Closing.  

Section 5.11     Corporate Governance.

(a)        Prior to the Closing, Seller shall take all actions necessary to
cause the Board as of the Closing to be comprised of eleven (11) directors,
consisting of nine (9) directors designated by Seller, one (1) director
designated by Buyer and the Chief Executive Officer of the Company as of
immediately prior to the Closing.

(b)        Prior to the Closing, Seller shall take all
actions necessary to cause the Board as of immediately following the Closing to
have an audit committee.  The director designated by Buyer shall be entitled to
serve on all committees of the Board, subject to eligibility requirements under
Applicable Law, in accordance with the Stockholders Agreement.

Section
5.12     Tax Matters.

(a)        In connection with the sale of the Purchased Shares
contemplated by this Agreement, any other applicable transfer of equity of the
Company, including any such transfer by Seller, or any transaction that causes
the Company to cease to be a member of the affiliated group of which Seller is
the common parent for U.S. federal income tax purposes, Seller agrees to make a
valid and timely election under Treasury Regulations Section
1.1502-36(d)(6)(i)(A) to elect to reduce its basis in Company shares to the
extent necessary to avoid attribute reduction under Treasury Regulations
Section 1.1502-36(d) and Seller also agrees not to make any election to
reattribute attributes under Treasury Regulations Sections
1.1502-36(d)(6)(i)(B) or (C).

(b)        Until
the date upon which the Company is no longer a member of the affiliated group
of which Seller is the common parent for U.S. federal income tax purposes, the
Company and the Company Subsidiaries shall be permitted to consummate
transactions that accelerate taxable income up to an amount that does not
materially exceed the amount of taxable income needed for Seller to utilize
existing foreign tax credits.

Section 5.13     SMA Cooperation.  Prior to the Closing, Seller shall use commercially
reasonable efforts to cause the Existing AUM (as defined in the SMA Agreements)
to equal $50,000,000,000 in accordance with the terms of the SMA Commitment
Letter in the aggregate; provided, that it shall not be a condition to
the closing of the transactions contemplated by this Agreement that the
Existing AUM shall equal or exceed such amount.  Prior to the Closing, Buyer
and Seller shall, Seller shall cause the Company and the Company Subsidiaries
to, cooperate in good faith in connection with preparing for the appointment of
the Investment Manager under, and successfully implementing the arrangements
contemplated by, the SMA Agreements.

 

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Article VI

CONDITIONS PRECEDENT

Section 6.1       Conditions to Each Party’s Obligations.  The obligations of Buyer and Seller to consummate the
transactions contemplated hereby shall be subject to the satisfaction or waiver
in writing at or prior to the Closing of the following conditions:

(a)        Approvals.  The
waiting period (and any extension thereof) applicable to the transactions
contemplated hereby under the HSR Act shall have been terminated or shall have
otherwise expired.

(b)        No Injunctions or Restraints.  No order, injunction or other order issued by any court
of competent jurisdiction and no law, statute, rule or regulation of any
Governmental Entity preventing or making illegal the consummation of the
transactions contemplated hereby or the transactions contemplated by the
Specified Transaction Agreements shall be in effect.

Section 6.2       Conditions to Obligations of Buyer.  The obligations of Buyer to consummate the transactions
contemplated hereby shall be subject to the satisfaction or waiver by Buyer in
writing at or prior to the Closing of the following additional conditions:

(a)        Representations and Warranties.  The representations and warranties of Seller set forth
in Section 3.8(a) shall be true and correct in all respects as of the
Closing Date as though made as of the Closing Date.  Other than the
representations and warranties of Seller set forth in Section 3.8(a) and
the Seller Fundamental Representations, the representations and warranties of
Seller set forth in this Agreement shall be true and correct, without giving
effect to any qualification set forth therein as to “materiality,” “Material
Adverse Effect” or similar qualifications, as of the Closing Date as though
made as of the Closing Date (except to the extent any such representation and
warranty is made as of an earlier date, in which case as of such earlier date),
except where the failure of all such representations and warranties to be so
true and correct has not had and would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.  Other than the
representations and warranties of Seller set forth in Section 3.2(a),
the Seller Fundamental Representations shall be true and correct in all
material respects, and the representations and warranties of Seller set forth
in Section 3.2(a) shall be true and correct in all respects except for de
minimis inaccuracies, in each case, as of the Closing Date as though made
as of the Closing Date (except to the extent any such representation and
warranty is made as of an earlier date, in which case as of such date).

(b)        Performance of Obligations of Seller.  Seller shall have performed and complied in all material
respects with the obligations and covenants required to be performed or
complied with by it under this Agreement on or prior to the Closing. 

(c)        Closing Certificate. 
Seller shall have delivered to Buyer a certificate duly executed by an
authorized officer of Seller, dated as of the Closing Date, certifying on
behalf of Seller as to Seller’s compliance with the conditions set forth in Section
6.2(a) and Section 6.2(b). 

  

 

 

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(d)       SMA Arrangements.  The SMA Agreements and the SMA Commitment Letter shall
have been executed and delivered in the forms attached hereto as Schedule A
of the Seller Disclosure Schedule and shall be in full force and effect such
that the SMA Agreements and the SMA Commitment Letter shall be effective at and
following the Closing.

Section 6.3       Conditions to Obligations of Seller.  The obligations of Seller to consummate the transactions
contemplated hereby shall be subject to the satisfaction or waiver by such
Seller in writing at or prior to the Closing of the following additional
conditions:

(a)        Representations and Warranties.  The representations and warranties of Buyer set forth in
this Agreement shall be true and correct, without giving effect to any
qualification set forth therein as to “materiality,” “Buyer Material Adverse
Effect” or similar qualifications, in all material respects as of the Closing
Date as though made and as of the Closing Date (except to the extent any such
representation and warranty is made as of an earlier date, in which case as of
such date). 

(b)        Performance of Obligations of Buyer.  Buyer shall have performed and complied in all material
respects with the obligations and covenants required to be performed or
complied with by it under this Agreement on or prior to the Closing.

(c)        Closing Certificate. 
Buyer shall have delivered to Seller a certificate duly executed by an
authorized officer of Buyer, dated as of the Closing Date, certifying on behalf
of Buyer as to Buyer’s compliance with the conditions set forth in Section
6.3(a) and Section 6.3(b). 

Article VII

SURVIVAL; INDEMNIFICATION

Section 7.1       Survival.  The representations, warranties, covenants and agreements of the
parties hereto contained in or made pursuant to  this Agreement shall survive in full force and effect until the date
that is twelve (12) months after the Closing Date, at which time they shall
terminate (and no claims shall be made for indemnification under Section 7.2
or Section 7.3 thereafter), except: (a) the Seller Fundamental
Representations shall each survive in full force and effect until the date that
is six (6) years after the Closing Date, (b) the representations and
warranties made in Section 3.13 
shall survive in full force and effect until the three (3)-month anniversary of
the IPO, and (c) the covenants and agreements that by their terms apply or
are to be performed in whole or in part after the Closing (including those
relating to the Separation) shall survive in full force and effect to the
extent they so apply or are to be performed after the Closing.

Section 7.2       Indemnification by Seller.

(a)        After the Closing and
subject to this Article VII, Seller shall indemnify, defend and hold
harmless the Buyer Indemnitees against, and reimburse the Buyer Indemnitees
for, all Liabilities that the Buyer Indemnitees may at any time suffer or
incur, or become subject to:

(i)         as a result of or in connection with the breach or
inaccuracy of any representation or warranty set forth in Article III or
contained in any certificate or instrument delivered by Seller pursuant hereto
(other than the representations and warranties of Seller set forth in Section 3.14(b)); 

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(ii)        as
a result of or in connection with the breach or inaccuracy of the
representations and warranties of Seller set forth in Section 3.14(b)  or contained in any
certificate or instrument delivered by Seller pursuant hereto; or

(iii)       as a result of or in
connection with any breach or failure by any of Seller to perform any of its
covenants, agreements or obligations contained in this Agreement.

(b)        Notwithstanding
anything to the contrary contained herein, Seller shall not be required to
indemnify, defend or hold harmless the Buyer Indemnitees against, or reimburse
the Buyer Indemnitees for, any Liabilities pursuant to Section 7.2(a)(i):
(i) until the aggregate amount of the Buyer Indemnitees’ Liabilities for
which the Buyer Indemnitees are finally determined to be otherwise entitled to
indemnification under Section 7.2(a)(i) exceeds $100,000,000 (the “Deductible),
after which Seller shall be obligated for all the Buyer Indemnitees’ Liabilities
for which the Buyer Indemnitees are finally determined to be otherwise entitled
to indemnification under Section 7.2(a)(i) (but only Liabilities in
excess of the Deductible) and (ii) in a cumulative aggregate amount with
respect to indemnification under Section 7.2(a)(i) (other than with
respect to Seller Fundamental Representations) exceeding $220,000,000 (the “Indemnification
Cap).  For purposes of determining whether the threshold set forth in
clause (ii) of this Section 7.2(b) 
has been met or exceeded, any amount paid by Seller or any of its Affiliates
(other than the Company and the Company Subsidiaries) for Liabilities pursuant
to Section 7.2(a)(i)  only shall be
taken into account. The foregoing limitations in this Section 7.2(b)
shall not apply to any claim arising under Section 7.2(a)(ii) 
or Section 7.2(a)(iii) or any claim arising from the Fraud of Seller and
the limitation in Section 7.2(b)(ii) shall not apply to Seller
Fundamental Representations.

(c)        Seller shall not be
required to indemnify, defend or hold harmless the Buyer Indemnitees against,
or reimburse the Buyer Indemnitees for, any Liabilities pursuant to Section
7.2(a)(i)  or Section 7.2(a)(ii) 
in a cumulative aggregate amount exceeding the Purchase Price.  The foregoing
limitation in this Section 7.2(c) shall not apply to any claim arising
under Section 7.2(a)(iii)  or any
claim from the Fraud of Seller.

(d)       The representations, warranties, covenants, agreements and
obligations of Seller and any Buyer Indemnitee’s right to indemnification with
respect thereto shall not be affected or deemed waived by reason of
(i) any investigation made by or on behalf of Buyer Indemnitees (including
by any of their respective Representatives) or by reason of the fact that such
Buyer Indemnitee or any of such Representatives knew or should have known that
any such representation or warranty is, was or might be inaccurate,
(ii) the waiver of any condition based on the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant, agreement or obligation or (iii) the Closing.

Section 7.3       Indemnification by Buyer.   

(a)        After the Closing and subject to this
Article VII, Buyer shall indemnify, defend and hold harmless the Seller Indemnitees
against, and reimburse the Seller Indemnitees for, all Liabilities  that the Seller Indemnitees may at any time
suffer or incur, or become subject to:

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(i)         as
a result of or in connection with the breach or inaccuracy of any
representation or warranty set forth in Article IV or contained in any
certificate or instrument delivered by Buyer pursuant hereto; or

(ii)        as a result of or in connection with any breach or failure
by Buyer to perform any of its covenants, agreements or obligations contained
in this Agreement.

(b)        Notwithstanding
anything to the contrary contained herein, Buyer shall not be required to
indemnify, defend or hold harmless the Seller Indemnitees against, or reimburse
the Seller Indemnitees for, any Liabilities pursuant to Section 7.3(a)(i):
(i) until the aggregate amount of the Seller 
Indemnitees’ Liabilities for which the Seller
Indemnitees are finally determined to be otherwise entitled to
indemnification under Section 7.3(a)(i) exceeds the Deductible, after
which Buyer shall be obligated for all the Seller
Indemnitees’ Liabilities for which the Seller Indemnitees are finally determined to be otherwise entitled
to indemnification under Section 7.3(a)(i) (but only Liabilities in
excess of the Deductible) and (ii) in a cumulative aggregate amount with
respect to indemnification under Section 7.3(a)(i) exceeding the
Indemnification Cap.  The foregoing
limitation in this Section 7.3(b) shall not apply to any claim arising
under Section 7.3(a)(ii)  or any
claim arising from the Fraud of the Buyer.

(c)        The Buyer shall not be
required to indemnify, defend or hold harmless the Seller Indemnitees against,
or reimburse the Seller Indemnitees for, any Liabilities pursuant to Section
7.3(a)(i) in a cumulative aggregate amount exceeding the Purchase Price. 
The foregoing limitation in this Section 7.3(c) shall not apply to any
claim arising from the Fraud of the Buyer.

(d)       The representations, warranties, covenants, agreements and
obligations of Buyer and any Seller 
Indemnitee’s right to indemnification with respect thereto shall not be
affected or deemed waived by reason of (i) any investigation made by or on
behalf of Seller Indemnitees (including by any of their respective
Representatives) or by reason of the fact that such Seller Indemnitee or any of
such Representatives knew or should have known that any such representation or
warranty is, was or might be inaccurate, (ii) the waiver of any condition
based on the accuracy of any representation or warranty, or on the performance
of or compliance with any covenant, agreement or obligation or (iii) the
Closing.

Section 7.4       Claims Procedure.

(a)        If any Person entitled
to be indemnified under this Article VII (an “Indemnified Party”)
becomes aware of any fact, matter or circumstance that may give rise to a claim
for indemnification under this Article VII, the Indemnified Party shall
promptly notify the party providing indemnification under this Article VII
(the “Indemnifying Party”) in writing of any claim in respect of which
indemnity may be sought under this Article VII, including any pending or
threatened claim or demand made in writing by a non-affiliated third party that
the Indemnified Party has determined has given or could reasonably give rise to
a right of indemnification under this Agreement (including a pending or
threatened claim or demand asserted by a non-affiliated third party against the
Indemnified Party) (each, a “third-party claim”), setting out the
provisions under this Agreement on which such claim is based, and such other information
(to the extent available) as is reasonably necessary to enable the Indemnifying
Party to assess the merits of the potential claim, to make such provision as it
may consider reasonably necessary (including details 

 

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of the legal and factual basis of the claim and the
evidence on which the party relies (including where the claim is the result of
a third-party claim, evidence of the third-party claim)) and setting out its
estimate of the amount of Liabilities to the extent ascertainable which are, or
are to be, the subject of the claim; provided, however, that the
failure to provide such notice shall not release the Indemnifying Party from
any of its obligations under this Article VII except to the extent that
the Indemnifying Party is actually prejudiced by such failure and, in any
event, only to the extent of such prejudice.  The parties agree that
(i) in this Article VII, they intend to shorten, in the case of the
limited survival periods specified in Section 7.1, the applicable
statute of limitations period with respect to certain claims; (ii) notices
for claims in respect of a breach of a representation, warranty, covenant,
agreement or obligation must be delivered prior to the expiration of the
applicable survival period specified in Section 7.1 for such
representation, warranty, covenant, agreement or obligation; and (iii) any
claims for indemnification for which notice is not timely delivered in
accordance with this Section 7.4(a) shall be expressly barred and are
hereby waived; provided  further  that, if, prior to such
applicable date, a party hereto shall have notified the other party hereto in
accordance with the requirements of this Section 7.4(a) of a claim for
indemnification under this Article VII (whether or not formal legal
action shall have been commenced based upon such claim), such claim (but only
such claim) shall continue to be subject to indemnification in accordance with
this Article VII notwithstanding the passing of such applicable date
until the final resolution thereof in accordance with this Article VII. 

(b)        The Indemnified Party and the Indemnifying Party shall
reasonably cooperate with each other and assist each other in determining the
validity of any third-party claim for indemnity and in defending against such a
third-party claim.  In connection with any fact, matter, event or circumstance
that may give rise to a claim against any Indemnifying Party under this
Agreement, the Indemnified Party shall ensure that the Indemnified Party and
each of its Affiliates:  (i) shall use reasonable efforts to preserve all
material evidence relevant to the claim, (ii) shall (upon the Indemnifying
Party’s written request and at the Indemnifying Party’s expense) reasonably
cooperate with the Indemnifying Party’s and its Representatives’ efforts to
investigate the fact, matter, event or circumstance alleged to give rise to
such claim and whether and to what extent any amount is payable in respect of
such claim, and (iii) shall (at the Indemnifying Party’s expense) disclose
to the Indemnifying Party and its Representatives all material of which it is
aware which reasonably relates to the claim and provide (upon the Indemnifying
Party’s written request and at the Indemnifying Party’s expense), all such
information and assistance, including reasonable access to relevant premises
and personnel during normal business hours, and the right to examine and copy
or photograph any relevant assets, accounts, documents and records, as the
Indemnifying Party or its Representatives may reasonably request, subject to
the Indemnifying Party and its Representatives agreeing in such form as the
Indemnified Party may reasonably require to keep all such information
confidential and to use it only for the purpose of investigating and defending
the claim in question.  The party in charge of the defense shall keep the other
party reasonably apprised from time to time as to the status of the defense or
any settlement negotiations with respect thereto.

(c)        Upon receipt of a
notice of a claim for indemnity from an Indemnified Party pursuant to Section
7.4(a) in respect of a third-party claim, the Indemnifying Party may, by
written notice to the Indemnified Party delivered within thirty (30)
Business Days of the receipt of notice of such third-party claim (the “Notice
Period”), assume the defense and control of any third-party claim, with its
own counsel (which shall be reasonably acceptable to the Indemnified Party) and
at its own expense, but shall allow the Indemnified Party a reasonable
opportunity to participate 

 

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in the defense of such third-party claim with its own
counsel and at its own expense (unless the Indemnified Party in good faith
determines that there is an actual conflict of interest with the Indemnifying
Party in respect of such third-party claim, in which case the Indemnifying
Party shall be liable for the fees and expenses under this Agreement of one
legal counsel for all the Indemnified Parties, in addition to one local counsel
in each applicable jurisdiction, with respect to such third-party claim); provided,
that the Indemnifying Party shall not have the right to assume the defense of
any third-party claim that primarily relates to Buyer’s or its Affiliates’
Taxes.  The Indemnifying Party shall not, without the prior written consent of
the Indemnified Party (which shall not be unreasonably withheld, conditioned or
delayed), consent to a settlement, compromise or discharge of, or the entry of
any judgment arising from, any third-party claim, unless (i) such
settlement, compromise, discharge or entry of any judgment does not involve
(A) any finding or admission of any violation of Law or admission of any
wrongdoing by an Indemnified Party or (B) the imposition of an order, injunction
or decree of a Governmental Entity that would restrict the future activity or
conduct of an Indemnified Party, (ii) such settlement or compromise is
comprised solely of monetary damages (other than customary confidentiality and
other ancillary obligations), and the Indemnifying Party shall obtain, as a
condition of such settlement, compromise, discharge, entry of judgment (if
applicable), or other resolution, a complete and unconditional release of each
Indemnified Party from any and all liabilities in respect of such third-party
claim and (iii) the Indemnifying Party pays all amounts arising from such
settlement or compromise.

(d)       If the Indemnifying Party elects not to defend the
Indemnified Party against a third-party claim, whether by not giving the
Indemnified Party timely notice of its desire to so defend within the Notice
Period or by giving notice of its election not to defend against such
third-party claim, the Indemnified Party shall have the right but not the
obligation to assume its own defense at the expense of the Indemnifying Party.
Unless and until the Indemnifying Party makes an election in accordance with Section
7.4(c) to assume the defense of such third-party claim, the Indemnified
Party may defend against such third-party claim in such manner as it may
reasonably deem appropriate, with all of the Indemnified Party’s expenses
arising out of the defense of such third-party claim subject to indemnification
under this Agreement to the extent provided in this Article VII. The
Indemnified Party shall not settle, compromise or consent to the entry of any
judgment with respect to any claim or demand for which it is seeking
indemnification from the Indemnifying Party or admit to any liability with
respect to such claim or demand without the prior written consent of the
Indemnifying Party (which may not be unreasonably withheld, conditioned or
delayed). Notwithstanding anything to the contrary contained in this Article
VII, no Indemnifying Party shall have any liability under this Article VII
for any Liabilities arising out of or in connection with any third-party claim
that is settled or compromised by an Indemnified Party without the consent of
such Indemnifying Party.

(e)        In the event any Indemnifying Party receives a notice of a
claim for indemnity from an Indemnified Party pursuant to Section 7.4(a)
that does not involve a third-party claim, the Indemnifying Party shall notify
the Indemnified Party within thirty (30) Business Days following its
receipt of such notice whether the Indemnifying Party disputes its liability to
the Indemnified Party under this Article VII.

  

 

 

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(f)        Notwithstanding the
foregoing provisions of this Section 7.4, (i) if a third-party claim relates to Taxes (other than Taxes of Buyer or
its Affiliates) that are indemnified under Section 7.2, Seller shall
have the exclusive right to conduct, at its own expense, such Tax Proceeding,
and (ii) Seller shall have the exclusive right to control in all
respects, and neither Buyer nor any of its Affiliates shall be entitled to
participate in, any Tax Proceeding with respect to any Tax Return of
(A) Seller or any of its Affiliates or (B) a consolidated, combined
or unitary group that includes Seller or any of its Affiliates.

Section 7.5       Payment.  In the event a claim for indemnification under this Article VII
has been finally determined, the amount of such final determination shall be
paid by the Indemnifying Party to the Indemnified Party on demand in
immediately available funds.  Except to the extent otherwise required pursuant
to a “determination” within the meaning of Section 1313(a) of the Code, the
parties agree to treat, for income tax purposes, such payment as an adjustment to
the purchase price.  Any claim, action, suit, arbitration or proceeding by or
before any Governmental Entity, and the liability for and amount of damages
therefor, shall be deemed to be “finally determined” for purposes of this Article
VII when the parties hereto have so determined by mutual agreement or, if
disputed, when an order, injunction or decree
of a Governmental Entity that has become final and non-appealable has been entered into with respect to such claim,
action, suit, arbitration or proceeding.

Section 7.6       Exclusive Remedies.  Each party hereto acknowledges and agrees that other
than Fraud, following the Closing, (a) the indemnification provisions of
this Article VII shall be the sole and exclusive remedies of the parties
hereto for any breach of the representations or warranties contained in this
Agreement or any certificate or instrument delivered hereunder,
(b) notwithstanding anything to the contrary contained herein, no breach
of any representation, warranty, covenant,
agreement or obligation contained herein
shall give rise to any right on the part of any party hereto to rescind this
Agreement or any of the transactions contemplated hereby, and (c)  the
indemnification provisions of this Article VII shall be the sole and
exclusive monetary remedies of the parties hereto for any breach or non‐fulfillment
of any covenant, agreement or obligation contained in this Agreement; provided  that this clause (c) does
not preclude any party from bringing an action for specific performance or
other equitable remedy to require any party to perform its obligations under
this Agreement.

Section 7.7       Damages.  Seller and Buyer agree that with respect to each indemnification
obligation set forth in this Article VII, the Indemnifying Party’s
indemnification obligation shall not include Liabilities arising from any
consequential (including consequential, lost profit damages and diminution in
value), indirect, incidental, punitive, exemplary, incidental or special
damages (and, in each case, whether or not foreseeable), except to the extent
payable to a third party in respect of a third-party claim.  For purposes of
calculating the amount of any Liability under this Article VII, each
representation and warranty contained in this Agreement shall be read without
regard to any “materiality,” “Material Adverse Effect,” “Buyer Material Adverse
Effect” or other similar qualification contained in or otherwise applicable to
such representation or warranty, other than the representation and warranty set
forth in Section 3.8(a).  For purposes of determining whether a breach
of any representation or warranty made in this Agreement has occurred, each
representation and warranty contained in this Agreement shall be read with
regard to any “materiality” or other similar qualification contained in or
otherwise applicable to such representation or warranty but any “Material
Adverse Effect” or other similar 

-45-   

 

qualification
contained in or otherwise applicable to such representation or warranty shall
be read as “material to the Company Business, taken as a whole”.

Section 7.8       Right to
Recover.
If an Indemnifying Party has paid an amount in discharge of any claim under
this Agreement and the Indemnified Party recovers (whether by payment,
discount, credit, relief, insurance or otherwise) from a non-affiliated third
party a sum which indemnifies or compensates the Indemnified Party (in whole or
in part) in respect of the Liability 
which is the subject matter of the claim, Buyer or Seller, as applicable, shall
procure that all steps are taken as may reasonably be required to pay to Seller
or Buyer, as applicable, as soon as practicable after receipt an amount equal
to (a) any sum recovered from the non-affiliated third party less any
reasonable costs and expenses incurred in obtaining such recovery or
(b) if less, the amount previously paid by the Indemnifying Party to the
Indemnified Party. The Indemnifying Party shall be subrogated to any right of
action (whether pursuant to contract, arising under Applicable Law or
otherwise) which the Indemnified Party may have against any other Person with
respect to any matter giving rise to a claim for indemnification hereunder.

Section 7.9       Double Claims.  No Indemnified Party shall be entitled to recover
from an Indemnifying Party under this Article VII more than once in
respect of the same Liability (notwithstanding that such Liability may result
from breaches of multiple provisions of this Agreement).

Article VIII

TERMINATION

Section 8.1       Termination of Agreement.  This Agreement may be terminated at any time prior to the Closing:

(a)        by Seller or Buyer, in writing, if there shall be any
order, injunction or decree of any Governmental Entity that prohibits or
restrains either party from consummating the transactions contemplated hereby or
the transactions contemplated by the Specified Transaction Agreements and such
order, injunction or decree shall have become final and non-appealable or there
shall be a law, statute, rule or regulation of any Governmental Entity in
effect that prevents or makes illegal the transactions contemplated hereby or
the transactions contemplated by the Specified Transaction Agreements; provided,
that the party seeking to terminate this Agreement pursuant to this Section 8.1(a) 
shall have performed in all material respects its obligations under Section
5.3 and Section 5.4; 

(b)        by Seller or Buyer, in writing, if the Closing has not
occurred on or prior to December 31, 2021 (the “Outside Date”); provided,
that the party seeking to terminate this Agreement has not materially breached
this Agreement in a manner that contributed materially to the failure of the
Closing to occur on or prior to such date;

(c)        by Seller, in writing, if a breach of any provision of this
Agreement that has been committed by Buyer would cause the failure of a
condition to Closing set forth in Section 6.3(a) or Section 6.3(b)
and such breach is not capable of being cured or, if capable of being cured, is
not cured before the earlier of (i) the Outside Date and (ii) the date that is
twenty (20) Business Days after Buyer receives written notice from Seller that
Seller intends to terminate this Agreement 

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pursuant to
this Section 8.1(c); provided, that Seller is not then in
material breach of this Agreement;

(d)       by Buyer, in writing, if a breach of any provision of this
Agreement that has been committed by Seller would cause the failure of a
condition to Closing set forth in Section 6.2(a) or Section 6.2(b)
and such breach is not capable of being cured or, if capable of being cured, is
not cured before the earlier of (i) the Outside Date and (ii) the date that is
twenty (20) Business Days after Seller receives written notice from Buyer that
Buyer intends to terminate this Agreement pursuant to this Section 8.1(d);
provided, that Buyer is not then in material breach of this
Agreement;

(e)        by Seller, in writing, if (i) all of the conditions to
Buyer’s obligations under this Agreement set forth in Section 6.1 and
Section 6.2 have been satisfied (other than those conditions that by their
terms are to be satisfied at the Closing, provided that such conditions are
then capable of being satisfied at the Closing), (ii) Seller has irrevocably
confirmed in writing to Buyer that (A) all of the conditions to Seller’s
obligations under this Agreement set forth in Section 6.1 and Section
6.3 have been satisfied (other than those conditions that by their terms
are to be satisfied at the Closing, provided that such conditions are then
capable of being satisfied at the Closing) or that Seller is willing to
irrevocably waive any such conditions that remain unsatisfied and (B) Seller is
ready, willing and able to proceed with the Closing and (iii) Buyer fails to
comply with its obligations under Article II  to consummate the
Closing by the later of two (2) Business Days after (A) the date of delivery of
the written confirmation contemplated by the foregoing clause (ii) and (B) the
time specified in Section 2.2; or

(f)        by mutual written agreement of Seller and Buyer.

Section 8.2       Effect of Termination. 
If this Agreement is terminated pursuant to Section 8.1, this Agreement shall become null and void
and of no further force and effect without liability of either party (or any
Representative of such party) to the other party to this Agreement; provided,
that (a) subject to the two immediately following sentences, no such
termination shall relieve a party from liability for any Fraud or Willful
Breach of this Agreement, (b) Section 1.1,
Section 5.5, this Section 8.2
and Article IX shall survive termination and (c) if requested in writing
by Seller, Buyer shall return to Seller or destroy (and provide a certificate
of destruction) all documents received by Buyer or any of its Affiliates or its
or their Representatives from or on behalf of Seller, the Company, their
respective Affiliates and their respective Representatives relating to the
transactions contemplated hereby, whether obtained before or after the
execution hereof (it being agreed that the Confidentiality Agreement shall remain
in full force and effect in accordance with its terms).  Notwithstanding
anything to the contrary in this Agreement, solely in the event that the
Closing does not occur, the maximum aggregate liability of Buyer and the Equity
Provider for any Liability suffered as a result of any breach of this Agreement
(including any Willful Breach), the Equity Commitment Letter or the Limited
Guaranty, or the failure of the transactions contemplated hereby or thereby to
be consummated, or in respect of any oral representation made or alleged to be
have been made in connection herewith or therewith, whether in equity or at
law, in contract, in tort or otherwise, shall not exceed and shall be limited
to the Purchase Price, and in no event shall Seller seek to, and Seller shall
cause its controlled Affiliates, directors, and officers not to seek to,
recover any money damages (including consequential, indirect or punitive
damages) in excess of such amount in respect of any such breach, failure or 

-47-   

 

representation.  In furtherance and not in limitation of
the foregoing, solely in the event that the Closing does not occur and Seller
commences an Action seeking monetary damages for any breach of this Agreement
(including any Willful Breach), the Equity Commitment Letter or the Limited
Guaranty, or the failure of the transactions contemplated hereby or thereby to
be consummated, upon payment of damages in an amount up to the Purchase Price,
Buyer and the Equity Provider shall not have any further liability or
obligation to Seller or any of its equity holders, controlling persons,
directors, officers, employees, agents, Affiliates, members, managers or
general or limited partners or any former, current or future stockholder,
controlling person, director, officer, employee, general or limited partner,
member, manager, Affiliate or agent of any of the foregoing relating to or
arising out of this Agreement, the Equity Commitment Letter or the Limited
Guaranty, or the failure of the any transaction contemplated hereby or thereby
to be consummated, whether in equity or at law, in contract, in tort or
otherwise, and in such event, Seller shall not seek to, and shall cause its controlled Affiliates,
directors, and officers not to seek to, recover any money damages (including
consequential, indirect or punitive damages, or damages on account of a Willful
Breach) from Buyer or the Equity Provider for any such breach or failure.

Article IX

GENERAL PROVISIONS

Section 9.1       Fees and Expenses. 
Except as otherwise expressly provided in this Agreement, whether or not the
purchase and sale of the Purchased Shares is consummated, each party shall pay
its own Transaction Expenses incident to preparing for, entering into and
carrying out the Transaction Agreements and the consummation of the
transactions contemplated thereby.  Notwithstanding anything to the contrary in
this Agreement, Buyer shall pay, when due, and
be responsible for,  any sales, use transfer, documentary, stamp, recording,
value added, conveyance, goods and services or similar Taxes and fees imposed
on or payable solely as  a result of  the transfer and sale of the Purchased
Shares pursuant to this Agreement; provided, that Buyer shall not be
responsible, and shall not bear any such taxes that would not have resulted if
the transfer and sale of the Purchased Shares was the only relevant transaction
for purposes of determining whether such Tax applies under Applicable Law.  The
party required by Applicable Law to do so shall file all necessary Tax Returns
and other documentation with respect to all Taxes referenced in the immediately
preceding sentence and, if required by Applicable Law, the other party shall,
or shall cause its respective Affiliates to, join in the execution of any such
Tax Returns and other documentation.  

Section 9.2       Notices.  All notices,
requests, claims, demands and other communications under this Agreement shall
be in writing and shall be deemed to have been given (a) when delivered by
hand (with written confirmation of receipt), (b) when received by the addressee
if sent by a nationally recognized overnight courier (receipt requested), (c)
on the date sent by e-mail if sent during normal business hours of the
recipient, and on the next Business Day if sent after normal business hours of
the recipient, or (d) on the third day after the date mailed, by certified or
registered mail, return receipt requested, postage prepaid.  Such
communications must be sent to the respective parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):

  

 

-48-   

 

if to Buyer, to:

Argon
Holdco LLC

c/o The Blackstone Group Inc.

345 Park Avenue

New York, New York 10154 

Attention:  John G. Finley 

Email:       john.finley@blackstone.com 

with a
copy (which shall not constitute notice) to:

Simpson
Thacher & Bartlett LLP 

425 Lexington Avenue 

New York, New York 10017 

Attention:  Elizabeth A. Cooper

                   Katherine M. Krause

Email:       ecooper@stblaw.com

                   katherine.krause@stblaw.com

and

Skadden,
Arps, Slate, Meagher & Flom LLP 

One Manhattan West

New York, New York 10001

Attention:  Todd Freed

                   Jon Hlafter

Email:       todd.freed@skadden.com

                   jon.hlafter@skadden.com

if to
Seller, to:

American
International Group, Inc. 

1271 Avenue of the Americas

41st Floor 

New York, New York 10020 

Attention:  General Counsel 

Email:       lucy.fato@aig.com 

-49-   

 

with a copy (which shall not
constitute notice) to:

Wachtell, Lipton,
Rosen & Katz 

51 West 52nd Street 

New York, New York 10019 

Attention:  Edward D. Herlihy

                   David K. Lam

                  Mark
A. Stagliano

Email:       edherlihy@wlrk.com

                  dklam@wlrk.com

                   mastagliano@wlrk.com

Section 9.3       Interpretation.  When
reference is made in this Agreement to a Section, Exhibit or Schedule, such
reference shall be to a Section of, or an Exhibit or Schedule to, this
Agreement unless otherwise indicated.  All references herein to any agreement,
instrument, statute, rule or regulation are to the agreement, instrument,
statute, rule or regulation as amended, modified, supplemented or replaced from
time to time (and, in the case of statutes, include any rules and regulations
promulgated under said statutes) and to any section of any statute, rule or
regulation including any successor to said section.  Any fact or item disclosed
in any Section or subsection of each of the Seller Disclosure Schedule shall be
deemed to apply to and qualify the Section or subsection of this Agreement to
which it corresponds in number and each other Section or subsection of this
Agreement or the Seller Disclosure Schedule to the extent the relevance to such
Section or subsection is reasonably apparent on the face of such disclosure. 
Disclosure of any item in the Seller Disclosure Schedule shall not be deemed an
admission that such item represents a material item, fact, exception of fact,
event or circumstance or that occurrence or non-occurrence of any change or
effect related to such item has had or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.  The table of
contents and headings contained in this Agreement are for reference purposes
only and shall not affect in any way the meaning or interpretation of this
Agreement.  Whenever the words “include,” “includes” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without
limitation.”  Whenever the words “hereof,” “hereto,” “hereby,” “herein” and
 “hereunder” and words of similar import are used in this Agreement, they shall
be deemed to refer to this Agreement as a whole and not to any particular
provision of this Agreement.  Whenever the word “or” is used in this Agreement,
it shall not be exclusive.  Whenever the word “extent” in the phrase “to the
extent” is used in this Agreement, it shall be deemed to mean the degree to
which a subject or other thing extends and shall not mean simply “if.” 
Whenever the singular is used herein, the same shall include the plural, and
whenever the plural is used herein, the same shall include the singular, where
appropriate.  Whenever the word “Dollars” or the “$” sign appear in this
Agreement, they shall be construed to mean United States Dollars, and all
transactions under this Agreement shall be in United States Dollars.  All
percentages resulting from calculations pursuant to Section 2.5 of this
Agreement will be set forth in decimals and rounded to the nearest thousandth. 
This Agreement has been fully negotiated by both parties and shall not be
construed by any Governmental Entity against either party by virtue of the fact
that such party was the drafting party.

  

 

-50-   

 

Section 9.4       Entire Agreement; Third Party Beneficiaries.  This Agreement (including all Exhibits and Schedules
hereto), the Confidentiality Agreement, the Equity Commitment Letter, the
Limited Guaranty and the other Transaction Agreements constitute the entire
agreement, and supersede all prior agreements, understandings, representations
and warranties, both written and oral, among the parties with respect to the
subject matter of this Agreement.  Except as otherwise expressly provided in
this Article IX, this Agreement is not intended to confer upon any
Person other than the parties to this Agreement any rights or remedies.

Section 9.5    Governing Law.  This
Agreement and any dispute arising hereunder shall be governed by, and construed
in accordance with, the laws of the State of Delaware, without giving effect to
its principles or rules of conflict of laws, to the extent such principles or
rules are not mandatorily applicable by statute and would permit or require the
application of the laws of another jurisdiction.

Section 9.6    Assignment.  Neither
this Agreement nor any of the rights, interests or obligations under this
Agreement shall be assigned, in whole or in part, by operation of law or
otherwise, by either party without the prior written consent of the other
party, and any such assignment that is not consented to shall be null and void;
provided  that Buyer may, without the prior written consent of Seller,
assign its rights and interests, and delegate its obligations, under this
Agreement to an Affiliate thereof; provided, however, that no
such assignment or delegation shall (i) relieve Buyer of its obligations
hereunder or (ii) impair or delay, in any material respect, the consummation of
the transactions contemplated hereby.  Subject to the foregoing, this Agreement
will be binding upon, inure to the benefit of, and be enforceable by, the
parties and their respective successors and assigns.

Section 9.7       Jurisdiction; Enforcement.

(a)      Each party hereby irrevocably and unconditionally  submits to the
exclusive jurisdiction of the Court of Chancery of the State of Delaware, or,
if (and only if) such court finds it lacks jurisdiction, the federal court of
the United States of America sitting in Delaware, or if (and only if) such
court finds it lacks jurisdiction, any other court located in the State of
Delaware, and any appellate court from any thereof, for purposes of enforcing
this Agreement or determining any claim arising from or related to the
transactions contemplated by this Agreement.  In any such action, suit or other
proceeding, each party irrevocably and unconditionally waives and agrees not to
assert by way of motion, as a defense or otherwise any claim that it is not
subject to the jurisdiction of such courts, that such action, suit or other
proceeding is not subject to the jurisdiction of such courts, that such action,
suit or other proceeding is brought in an inconvenient forum or that the venue
of such action, suit or other proceeding is improper.  Each party also agrees
that any final and non-appealable judgment against a party in connection with
any action, suit or other proceeding will be conclusive and binding on such party
and that such award or judgment may be enforced in any court of competent
jurisdiction, either within or outside of the United States.  A certified or
exemplified copy of such award or judgment will be conclusive evidence of the
fact and amount of such award or judgment.  Any process or other paper to be
served in connection with any action or proceeding under this Agreement shall,
if delivered or sent in accordance with Section 9.2,
constitute good, proper and sufficient service thereof.  Notwithstanding this Section
9.7(a), the determination of the Closing Purchase Price shall be made 

-51-   

 

as set forth in Section 2.5; provided, that
any dispute over the obligations of the parties under Section 2.5 shall
be subject to this Section 9.7. 

(b)        The parties agree that irreparable damage would occur in
the event that any of the provisions of this Agreement were not performed in
accordance with their specific terms or were otherwise breached.  It is
accordingly agreed that, without the necessity of posting bond or other
undertaking, the parties shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement and to enforce specifically the terms and
provisions of this Agreement in accordance with this Agreement, this being in
addition (subject to the terms of this Agreement, including the last sentence
of this Section 9.7(b)) to any other remedy to which such party is
entitled at law or in equity.  In the event that any Action is brought in
equity to enforce the provisions of this Agreement, no party shall allege, and
each party hereby waives any defense or counterclaim, that there is an adequate
remedy at law.  The parties further agree that nothing contained in this Section
9.7(b) shall require a party to institute any action for (or limit such
party’s right to institute any action for) specific performance under this Section
9.7(b) before exercising any other right under this Agreement. 
Notwithstanding anything to the contrary in this Agreement, but without
limiting Seller’s rights pursuant to Article VII,  while Seller may
concurrently seek specific performance in accordance with and subject to this Section
9.7(b) to cause Buyer to consummate the transactions contemplated hereby
and to recover monetary damages from Buyer, subject to the limitations set
forth in Section 8.2, under no
circumstances shall Seller by permitted or entitled to receive both (i) a grant
of specific performance causing Buyer to consummate the transactions
contemplated hereby and (ii) monetary damages of any kind whatsoever.  

(c)        EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.  EACH PARTY CERTIFIES AND ACKNOWLEDGES
THAT (I) NO OTHER PARTY OR REPRESENTATIVE, AGENT OR ATTORNEY THEREOF HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) IT UNDERSTANDS
AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVER, (III) IT MAKES SUCH WAIVER
VOLUNTARILY AND (IV) IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 9.7(C). 

Section 9.8       Severability; Amendment; Waiver.

(a)        Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under Applicable Law, but if any provision or portion of
any provision of this Agreement is held to be invalid, illegal or unenforceable
in any respect under any Applicable Law in any jurisdiction, such invalidity,
illegality or unenforceability will not affect any other provision or portion
of any provision in such jurisdiction, and this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision or portion of any provision had never been contained
herein.

 

-52-   

 

(b)        This Agreement may be
amended or a provision hereof waived only by a written instrument signed by
each of Buyer and Seller.

(c)        No delay on the part of a party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of a party of any right, power or privilege, nor any single
or partial exercise of any such right, power or privilege, preclude any further
exercise thereof or the exercise of any other such right, power or privilege.

Section 9.9       Certain Limitations.

(a)       With
respect to any estimation,  valuation, appraisal, projection or forecast  made
available to Buyer, its Affiliates or their respective Representatives with
respect to Seller, the Company or their respective Affiliates, Buyer
acknowledges and agrees that (i) there are uncertainties inherent in attempting
to make such estimations, valuations, appraisals, projections and forecasts,
(ii) it is familiar with such uncertainties, (iii) such estimations,
valuations, appraisals, projections and forecasts are not and shall not be
deemed to be representations or warranties of Seller, the Company or any of
their respective Affiliates, except to the extent set forth in the
representations and warranties set forth in Article III, and (iv) it
shall have no claim against any Person with respect to any such valuation,
appraisal, projection or forecast.

(b)        Except to the extent expressly set forth in the
representations and warranties of Seller set forth in Article III,
neither Seller nor the Company makes any express or implied representation or
warranty hereby or otherwise under this Agreement or any other Transaction
Agreement as to the future experience, success or profitability of the Company
Business, whether or not conducted in a manner similar to the manner in which
the Company Business was conducted prior to the Closing, or that the reserves
held by or on behalf of any the Company or any Company Subsidiaries or
otherwise with respect to the Company Business or the assets supporting such
reserves have been or will be adequate or sufficient for the purposes for which
they were established or that the reinsurance recoverables taken into account
in determining the amount of such reserves will be collectible or whether such
reserves were calculated, established or determined in accordance with any actuarial,
statutory or other standard, or concerning any financial statement line item or
asset, Liability or equity amount that would be affected by any of the
foregoing.

(c)        Buyer further acknowledges and agrees that it (i) is a
sophisticated party and understands the merits and risks of consummating the
transactions contemplated by this Agreement and the other Transaction
Agreements, (ii) has made its own inquiry and investigation into, has completed
to its satisfaction its own due diligence investigation of, and, based thereon,
has formed an independent judgment concerning the Company, the Company Subsidiaries
and the Company Business, (iii) has been furnished or provided access to such
information and documents about the Company, the Company Subsidiaries and the
Company Business and the operations thereof or otherwise as it has deemed
necessary to enable it to form such independent judgment and (iv) has been
provided an opportunity to ask questions of Seller and the Company with respect
to such information, documents and other materials and has received answers to
such questions.  Buyer further acknowledges and agrees that none of Seller
(except as expressly set forth in Article  III) the
Company or any of their respective Affiliates, nor any other Person not a party
to this Agreement, is making or has made any representations or warranties,
express or implied, as 

-53-   

 

to the accuracy or completeness
of any such information, documents and other materials, and hereby expressly
disclaim any such representations or warranties or any reliance thereon, other
than the representations and warranties expressly set forth in this Agreement.

Section 9.10     Non-Recourse. 
Notwithstanding anything to the contrary contained herein or otherwise, this
Agreement may only be enforced against, and any claims or causes of action that
may be based upon, arise out of or relate to this Agreement, or the
negotiation, execution or performance of this Agreement or the transactions
contemplated hereby, may only be made against, the Persons that are expressly
identified as parties to this Agreement (in the preamble and signature pages
hereto) in their capacities as parties to this Agreement or the Persons that
are expressly identified as parties to any other Transaction Agreement, the
Equity Commitment Letter or the Limited Guaranty in their capacities as parties
to such agreements, and no former, current or future equity holders,
controlling persons, directors, officers, employees, agents, Affiliates,
members, managers or general or limited partners of any of the Persons that are
expressly identified herein as parties to such agreements or any former,
current or future stockholder, controlling person, director, officer, employee,
general or limited partner, member, manager, Affiliate or agent of any of the
foregoing, or any other non-party, shall have any liability for any obligations
or liabilities of the parties or for any claim (whether in tort, contract or
otherwise) based on, in respect of, or by reason of, the transactions
contemplated hereby or thereby or in respect of any representations, warranties
or statements made or alleged to be made in connection herewith or therewith
(except to the extent such Person is expressly identified as a party to such
other agreement).  Without limiting the rights of either party against the
other party, in no event shall either party or any of its Affiliates seek to
enforce this Agreement against, make any claims for breach of this Agreement
against, or seek to recover monetary damages for breach of this Agreement from,
any non-party, whether by or through attempted piercing of the corporate,
limited partnership or limited liability company veil, by the enforcement of
any assessment or by any legal or equitable proceeding, by virtue of any
statute, regulation or Applicable Law, or otherwise.  The non-parties specified
above shall be express third-party beneficiaries of this Section 9.10. 

Section 9.11     No Offset.  No party
to this Agreement may offset any amount due to any other party or any of such
other party’s Affiliates against any amount owed or alleged to be owed from
such other party or its Affiliates under this Agreement or any other
Transaction Agreement without the written consent of such other party.

Section 9.12     Counterparts.  This
Agreement may be executed in counterparts, all of which shall be considered one
and the same agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party.  Each party may deliver
its signed counterpart of this Agreement to the other party by means of
electronic mail or any other electronic medium utilizing image scan technology,
and such delivery will have the same legal effect as hand delivery of an
originally executed counterpart.

[Remainder of page intentionally left
blank] 

  

-54-   

 

IN WITNESS WHEREOF, Seller and
Buyer have caused this Agreement to be signed by their respective duly
authorized officers as of the date first written above.

                                                                        AMERICAN
INTERNATIONAL GROUP, INC.

 

                                                                        By: 
/s/ Mark Lyons                                        

Name:  Mark Lyons

Title:    Executive Vice President and Chief Financial
Officer

                                                                                     

                                                                                                 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature
Page to L&R Stock Purchase Agreement] 

 

 

 

ARGON HOLDCO LLC

 

By: Blackstone Holdings II L.P., its sole member

 

By: Blackstone Holdings I/II GP L.L.C., its general partner

 

By:  /s/ Michael Chae                         

Name:  Michael Chae

Title:   Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[Signature
Page to L&R Stock Purchase Agreement]

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