Document:

Exhibit 4.7.2  

May 24, 2007

PRIVATE &
CONFIDENTIAL

Mr. Thompson
B. Jewell

385 Birchcliff Road

Birchcliff AB T4S 1R6

Canada

Dear Thom,

Further to my
letter of April 23, 2007 and negotiations with you, this letter records matters
agreed with you, as required by that original letter of offer. Those matters of
record are:

	
 

	
 

	
 

	
Initial
  Compensation:

	
 

	
After review
  of base salary on arrival, minimum annual base salary is adjusted to
  NZ$409,000, to apply from 1 May 2007, subject to an annual review; 

	
 

	
 

	
 

	
Housing

	
 

	
The period
  of time agreed for rental property costs to be met by the Company is to be 1
  year, to a maximum level of NZ$1,200 (plus GST) per week for 12 months. 

Please
indicate your acceptance of these matters below. 

Yours truly,

David Newman

Chairman

AGREED AND
ACCEPTED 

this ____ day of ________  ______

	
 

	
 

	 

	
 

	
Thompson B.
  Jewell

	
 

	
 

	 

	
 

	
Austral Pacific Energy Ltd.

	
 

	
Incorporated in British Columbia, Canada

	
 

	
Level 3, 40 Johnston Street, P O Box 5337, Lambton Quay, Wellington,
  New Zealand PH: +64 4 495 0888
FAX: +64 4 495 0889

	
 

	
EMAIL:
  mail@austral-pacific.com WEBSITE:
  www.austral-pacific.comexv4w47

 

Exhibit 4.47

Execution Copy

STOCK PURCHASE AGREEMENT

by and between

NATIONAL INDEMNITY COMPANY

and

CONVERIUM AG

dated as of October 16, 2006

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	ARTICLE I. DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	1.1. Definitions
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II. PURCHASE AND SALE OF THE SHARES
	 	 	11	 
	 
	 	 	 	 
	2.1. Purchase and Sale of the Shares
	 	 	11	 
	2.2. The Closing
	 	 	11	 
	2.3. Deliveries at the Closing
	 	 	11	 
	 
	 	 	 	 
	ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE SELLER
	 	 	12	 
	 
	 	 	 	 
	3.1. Organization and Qualification of the Seller
	 	 	12	 
	3.2. Authorization, Validity and Enforceability
	 	 	12	 
	3.3. No Conflicts
	 	 	12	 
	3.4. Consents and Approvals
	 	 	13	 
	3.5. Organization and Qualification of the Company and its Subsidiaries
	 	 	13	 
	3.6. Capitalization of Company
	 	 	13	 
	3.7. Capitalization of CRNA and CINA
	 	 	14	 
	3.8. Title to Shares
	 	 	14	 
	3.9. Financial Statements
	 	 	14	 
	3.10. Absence of Changes
	 	 	15	 
	3.11. Legal Proceedings
	 	 	15	 
	3.12. Compliance with Laws; Permits
	 	 	15	 
	3.13. Contracts
	 	 	15	 
	3.14. Property and Assets
	 	 	17	 
	3.15. Intellectual Property
	 	 	17	 
	3.16. Employee Benefit Plans
	 	 	17	 
	3.17. Employee Relations
	 	 	18	 
	3.18. Insurance Policies
	 	 	18	 
	3.19. Tax Matters
	 	 	18	 
	3.20. Bank Accounts
	 	 	18	 
	3.21. Material Services Provided by Seller
	 	 	19	 
	3.22. No Brokers
	 	 	19	 
	3.23. No Other Representations or Warranties
	 	 	19	 
	 
	 	 	 	 
	ARTICLE IV. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
	 	 	19	 
	 
	 	 	 	 
	4.1. Organization of the Purchaser
	 	 	19	 
	4.2. Authorization, Validity and Enforceability
	 	 	20	 
	4.3. No Conflicts
	 	 	20	 
	4.4. Purchaser Consents and Approvals
	 	 	20	 
	4.5. Investment Intent
	 	 	20	 
	4.6. Financing
	 	 	21	 
	4.7. No Brokers
	 	 	21	 
	4.8. No Knowledge of Misrepresentations or Omissions
	 	 	21	 

 

 

	 	 	 	 	 
	 	 	Page	 
	4.9. No Other Representations or Warranties
	 	 	21	 
	 
	 	 	 	 
	ARTICLE V. COVENANTS
	 	 	21	 
	 
	 	 	 	 
	5.1. Conduct of Business
	 	 	21	 
	5.2. Access; Confidentiality
	 	 	23	 
	5.3. Intercompany Accounts; Intercompany Agreements
	 	 	24	 
	5.4. Cooperation and Reasonable Best Efforts
	 	 	24	 
	5.5. Director and Officer Indemnification
	 	 	24	 
	5.6. Consents and Approvals
	 	 	25	 
	5.7. Press Releases
	 	 	26	 
	5.8. Records Retention, Accounting and Tax Support
	 	 	26	 
	5.9. Tax Matters
	 	 	26	 
	5.10. Transfer Taxes
	 	 	27	 
	5.11. No Section 338 Election
	 	 	27	 
	5.12. Employee Benefits Matters
	 	 	27	 
	5.13. Guaranteed Reinsurance Contracts
	 	 	28	 
	5.14. Litigation Cooperation
	 	 	29	 
	5.15. Rights to the Converium Name and Converium Marks
	 	 	32	 
	5.16. Proprietary and Third Party Software
	 	 	33	 
	 
	 	 	 	 
	ARTICLE VI. CONDITIONS TO CLOSING
	 	 	34	 
	 
	 	 	 	 
	6.1. Conditions to the Obligation of the Purchaser to Close
	 	 	34	 
	6.2. Conditions to the Obligation of the Seller to Close
	 	 	35	 
	6.3. Waiver of Closing Conditions
	 	 	36	 
	6.4. Frustration of Closing Conditions
	 	 	36	 
	 
	 	 	 	 
	ARTICLE VII. INDEMNIFICATION
	 	 	37	 
	 
	 	 	 	 
	7.1. No Survival of Representations and Warranties
	 	 	37	 
	7.2. Indemnification of the Purchaser
	 	 	37	 
	7.3. Indemnification of the Seller
	 	 	37	 
	7.4. Matters Involving Third Parties Other Than Tax Claims
	 	 	37	 
	7.5. Matters Involving Tax Claims
	 	 	38	 
	7.6. Matters Not Involving Third-Party Claims
	 	 	39	 
	7.7. Collateral Source Recoveries
	 	 	39	 
	7.8. Cooperation
	 	 	39	 
	7.9. Termination of Indemnification
	 	 	39	 
	7.10. Exclusive Remedy
	 	 	39	 
	 
	 	 	 	 
	ARTICLE VIII. TERMINATION
	 	 	40	 
	 
	 	 	 	 
	8.1. Termination of Agreement
	 	 	40	 
	8.2. Effect of Termination
	 	 	40	 
	 
	 	 	 	 
	ARTICLE IX. MISCELLANEOUS
	 	 	41	 
	 
	 	 	 	 
	9.1. Notices
	 	 	41	 
	9.2. Fees and Expenses
	 	 	42	 
	9.3. Entire Agreement; Waivers and Amendments
	 	 	42	 
	9.4. Assignment; Binding Effect
	 	 	42	 

 

 

	 	 	 	 	 
	 	 	Page	 
	9.5. No Third-Party Beneficiaries
	 	 	42	 
	9.6. Governing Law
	 	 	42	 
	9.7. Consent to Jurisdiction
	 	 	42	 
	9.8. Waiver of Jury Trial and Pre-Answer Security
	 	 	43	 
	9.9. Interpretation
	 	 	43	 
	9.10. Variation in Pronouns
	 	 	44	 
	9.11. Captions
	 	 	44	 
	9.12. Counterparts
	 	 	44	 
	9.13. Extension; Waiver
	 	 	44	 
	9.14. No Representation Regarding Reserves
	 	 	44	 

	 	 	 
	SCHEDULE	 	 
	NUMBER	 	SCHEDULE NAME
	 
	 	 
	1.1(a)
	 	ReCap Employees Obligations
	1.1(b)
	 	Restructuring Transactions
	3.3
	 	No Conflicts
	3.4
	 	Consents and Approvals
	3.5
	 	Organization and Qualification of
the Company and its Subsidiaries
	3.6
	 	Capitalization of Company
	3.7
	 	Capitalization of CRNA and CINA
	3.10
	 	Absence of Changes
	3.11
	 	Legal Proceedings
	3.12
	 	Compliance with Laws; Permits
	3.13(a)
	 	Contracts
	3.13(b)
	 	Guaranteed Reinsurance Contracts
	3.13(c)
	 	Breaches, Violation or Defaults of Material Contracts
	3.14
	 	Property and Assets
	3.16
	 	Employee Benefit Plans
	3.17
	 	Employee Relations
	3.18
	 	Insurance Policies
	3.19
	 	Tax Matters
	3.20
	 	Bank Accounts
	3.21
	 	Material Services Provided by Seller
	4.4
	 	Purchaser Consents and Approvals
	5.1
	 	Conduct of Business
	5.3
	 	Intercompany Accounts; Affiliate Agreements
	5.6
	 	Consents and Approvals
	5.16(a)
	 	Proprietary Software
	6.1(b)
	 	Consents
	6.1(h)
	 	Permitted Commutations
	6.2(b)
	 	Consents

 

 

	 	 	 
	 	 	 
	 	 	 
	ANNEX A
	 	Form of CRNA Transition Services Agreement
	ANNEX B
	 	Form of Transitional Trademark License Agreement
	ANNEX C
	 	Form of NICO Commutation Agreement
	ANNEX D
	 	Form of Quota Share Agreement
	ANNEX E
	 	Employee Payments Budget

 

 

STOCK PURCHASE AGREEMENT

               THIS STOCK PURCHASE AGREEMENT (this “Agreement”) is made and entered into as of
October 16, 2006 by and between National Indemnity Company, a corporation organized under the laws
of the State of Nebraska, United States of America (the “Purchaser” or “NICO”), and
Converium AG, a corporation organized under the laws of Switzerland (the “Seller”).

RECITALS

               WHEREAS, the Seller owns 100 shares (the “Shares”) of the common stock, par value
$0.01 per share, of Converium Holdings (North America) Inc., a corporation organized under the laws
of the State of Delaware (the “Company”), which Shares constitute all of the outstanding
capital stock of the Company; and

               WHEREAS, the Company owns 100 shares (the “CRNA Shares”) of the common stock, par
value $35,000 per share, of Converium Reinsurance (North America) Inc., a corporation organized
under the laws of the State of Connecticut (“CRNA”), which CRNA Shares constitute all of
the outstanding capital stock of CRNA; and

               WHEREAS, CRNA owns 5,000 shares (the “CINA Shares”) of the common stock, par value
$1,000 per share, of Converium Insurance (North America) Inc., a corporation organized under the
laws of the State of New Jersey (“CINA”), which CINA Shares constitute all of the
outstanding capital stock of CINA; and

               WHEREAS, CRNA has previously issued the Surplus Note (as defined below) to Converium Holding
AG (the “Parent”); and

               WHEREAS, prior to, or contemporaneously with, the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements (as defined below), the Seller intends
to complete the Restructuring Transactions (as defined below); and

               WHEREAS, it is the intention of the parties that prior to the consummation of the transactions
contemplated by this Agreement, the Surplus Note will be assigned to the Company or, at the
Purchaser’s direction, to any other Person (as defined below) designated by the Purchaser so long
as such assignment to a Person other than the Company does not result in any Adverse Consequences
(as defined below) to the Parent, the Seller or the Company (if such Adverse Consequences to the
Company would have Adverse Consequences to the Parent or the Seller by operation of the indemnity
for Pre-6/30 Taxes contemplated by Section 7.2(b) below or otherwise result in Adverse Consequences
to the Seller).

               NOW, THEREFORE, in consideration of the foregoing and the representations, warranties,
covenants and agreements contained herein, and for other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

 

 

ARTICLE I.

DEFINITIONS

               1.1. Definitions. The following terms when used in this Agreement (including the
Schedules and Exhibits hereto) shall have the following meanings:

               “Action” means any action, suit, threatened suit, litigation, threatened litigation,
proceeding, investigation or inquiry (whether formal or informal, including by any Governmental
Entity), claim, demand, arbitration demand or arbitration.

               “Adverse Consequences” has the meaning set forth in Section 7.2.

               “Affiliate” means with respect to any Person, any Person directly or indirectly
controlling, controlled by, or under direct or indirect common control with, such Person. A Person
will be deemed to control a Person if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

               “Agribusiness IP Rights” means any and all intellectual property rights held by CRNA
or CINA associated with the provision of crop production insurance, including any (i) patents and
applications therefor, including continuations, divisionals, continuations-in-part, or reissues of
patent applications and patents issuing thereon, inventions (whether patentable or unpatentable or
reduced to practice), designs, formulae, algorithms, methods, techniques, know-how, technical data,
programs, specifications, processes, improvements, drawings, technology; (ii) trade secrets and all
other rights in or to confidential business or technical information; (iii) works of authorship,
copyrights, copyright registrations and applications therefor and all other rights corresponding
thereto; (iv) software, whether in source code or object code, databases and compilations,
including any and all data and collections of data, whether machine readable or otherwise and (v)
trademarks, trade names, service marks, service names, trade dress rights and similar design of
origin and rights therein, and all goodwill symbolized thereby or associated therewith.

               “Agreement” has the meaning set forth in the first paragraph of this Agreement.

               “Ancillary Agreements” means the CRNA Transition Services, the NICO Commutation
Agreement and the Transitional Trademark License Agreement.

               “Applicable Insurance Code(s)” means the insurance laws to which CRNA and CINA are
subject, including the insurance laws of the States of Connecticut, New Jersey, California and
Florida. In all cases, Applicable Insurance Code shall include the rules and regulations
promulgated under any of the foregoing laws.

               “Applicable Insurance Department(s)” means the insurance regulatory agencies by which
CRNA and CINA are subject to supervision, including the Connecticut Department of Insurance, the
New Jersey Department of Insurance and Banking, the California Department of Insurance and the
Florida Office of Insurance Regulation.

- 2 -

 

               “Books and Records” has the meaning set forth in Section 5.8.

               “Budget” has the meaning set forth in Section 5.1(b)(xvi).

               “Business Day” means any day other than a Saturday, Sunday or other day on which
commercial banks in Omaha, Nebraska, or Zurich are required or authorized by law to be closed.

               “CHNA” means Converium Holdings (North America) Inc., a Delaware corporation.

               “CHNA Intercompany Loans” means the principal amount of the intercompany loans payable
by CHNA to Converium AG or any of its Affiliates, plus accrued interest thereon.

               “CINA” means Converium Insurance (North America) Inc., a New Jersey corporation.

               “CINA Domiciliary Insurance Department” means the insurance department of the State of
New Jersey.

               “CINA Shares” has the meaning ascribed to it in the third Recital of this Agreement.

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

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

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

               “Common Interest Matters” has the meaning set forth in Section 5.14(g).

               “Commutation” means, with respect to a Reinsurance Contract, the termination and
mutual release of all past, present and future obligations and the estimation and payment of a
final cash settlement of all obligations either as required by its terms or effected by mutual
agreement of the parties thereto.

               “Commutation Payment” has the meaning set forth in Section 6.1(h).

               “Company” has the meaning set forth in the first Recital of this Agreement.

               “Company Claim” means any Action brought against the Company or any of its
Subsidiaries relating to or arising from the conduct or operations of the Company or its
Subsidiaries that occurred prior to the Closing Date.

               “Company Insurance Policies” has the meaning set forth in Section 3.18.

               “Company Materials” means (i) all previously prepared memoranda of law and all
analyses and materials related to a Company Claim, (ii) all agreements, contracts and other
memoranda, including preparatory materials, drafts and all oral and written communications

- 3 -

 

pertaining to a Company Claim, and (iii) any documents or other information relating to a
Company Claim that would otherwise be protected by any applicable privilege or work product
protection from disclosure to third parties other than the parties hereto. For the avoidance of
doubt, Company Materials shall not include any information relating to a party which is or becomes
publicly available other than through a breach of this Agreement by the disclosing party.

               “Confidentiality Agreement” means the Confidentiality Agreement between the Parent and
the Purchaser dated June 16, 2006.

               “Consents” has the meaning set forth in Section 3.4.

               “Contracts” means all written contracts, agreements, undertakings, indentures, notes,
debentures, bonds, loans, instruments, leases, mortgages, commitments or binding arrangements.

               “Converium Name and Converium Marks” has the meaning set forth in Section 5.15(a).

               “Converium Third Party Claim” means any Action brought against the Seller relating to
or arising from the conduct or operations of the Company or its Subsidiaries that occurred prior to
the Closing Date.

               “CRNA” means Converium Reinsurance (North America) Inc., a corporation organized under
the laws of the State of Connecticut.

               “CRNA Domiciliary Insurance Department” means the insurance department of the State of
Connecticut.

               “CRNA Shares” has the meaning ascribed to it in the second Recital of this Agreement.

               “CRNA Transition Services Agreement” means the transition services agreement in the
form attached hereto as Annex A pursuant to which Converium AG agrees to provide CRNA certain
services on a transitional basis.

               “Director and Officer Indemnified Parties” has the meaning set forth in Section
5.5(a).

               “Debt” shall mean any liability in respect of borrowed money or guarantees of the
foregoing, provided that Debt shall not include any Reinsurance Contracts.

               “Domiciliary Insurance Departments” means the CINA Domiciliary Insurance Department
and the CRNA Domiciliary Insurance Department.

               “Employee” means each current full-time or part-time employee of the Company or any of
its Subsidiaries, including any such employee who is on disability or leave of absence.

- 4 -

 

               “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and the
regulations promulgated thereunder.

               “ERISA Affiliate” means each entity that is, or has been, treated as a single employer
with Seller, CRNA or CINA during the 5-year period preceding the date hereof for purposes of Code
Section 414.

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

               “Governmental Entity” means any federal, state, local or foreign government, political
subdivision, legislature, court, agency, department, bureau, commission or other governmental or
regulatory authority, body or instrumentality, including any insurance or securities regulatory
authority.

               “Guarantee Claim” has the meaning set forth in Section 5.13(d).

               “Guaranteed Reinsurance Contracts” means any assumed Reinsurance Contracts issued by
CRNA and guaranteed for the benefit of the cedants of such Reinsurance Contracts by Converium AG
and/or any Reinsurance Contracts in respect of which Converium AG is obligated to assume such
Reinsurance Contract by way of novation or other mechanic upon request of any such cedant.

               “Guaranteed Reinsurance Novation Contract” means any Guaranteed Reinsurance Contract
in respect of which Converium AG is obligated to assume such Reinsurance Contract by way of
novation or other mechanic upon request of any such cedant.

               “Guarantees” means the obligations (including any obligations to assume such
Reinsurance Contracts by way of a novation or other mechanic) of Converium AG in respect of the
Guaranteed Reinsurance Contracts.

               “Guarantor” means Converium AG in its capacity as guarantor under or in conjunction
with any Guaranteed Reinsurance Contract(s).

               “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended,
and the rules and regulations promulgated thereunder.

               “Incentive Plans” has the meaning set forth in Section 5.12.

               “Indemnified Party” and “Indemnifying Party” have the respective meanings set
forth in Section 7.4.

               “Insurance Approvals” means the Purchaser Insurance Approvals and the Seller Insurance
Approvals.

               “Investment Broker” has the meaning set forth in Section 3.22.

- 5 -

 

               “Intercompany Agreement” shall mean any agreement between (x) the Company or any of
its Subsidiaries, on the one hand, and (y) the Seller or any of its Affiliates (other than the
Company or any of its Subsidiaries).

               “IRS” means the Internal Revenue Service.

               “Knowledge of Seller” or words of other similar import means the actual knowledge of
any of Paul Dassenko, Corcoran Byrne, Ray Dowling, Barbara Contreras, Jeff Jarman, Mary Rauscher,
Joanne Spalla, Paolo De Martin, Christian Felderer and Irene Lueling.

               “Leased Real Property” has the meaning set forth in Section 3.14.

               “Lien” means any lien, pledge, mortgage, security interest, charge, adverse claim or
other encumbrance of any kind.

               “Material Adverse Effect” means any material adverse effect on the business,
operations, financial condition or results of operations of the Company and its Subsidiaries, taken
as a whole, other than effects arising out of, resulting from, caused by or attributable to (a)
changes in conditions in the United States or global economy or capital or financial markets
generally, including changes in interest or exchange rates, (b) changes in law or in legal,
regulatory, political, economic or business trends or conditions, (c) changes in GAAP or regulatory
accounting principles, including SAP, after the date of this Agreement, (d) the announcement of
this Agreement and the Ancillary Agreements and the identity of the Purchaser or the consummation
of the transactions contemplated hereby or thereby, (e) actions required or permitted to be taken
pursuant to this Agreement or taken with the Purchaser’s consent, (f) any action taken by the
Purchaser or its Affiliates with respect to the transactions contemplated hereby or by the
Ancillary Agreements, (g) any increase in the Reserves, (h) claims made under Reinsurance
Contracts, (i) any Commutations which occur prior to the Closing Date, (j) any Converium Third
Party Claim and (k) Regulatory Body Matters.

               “Material Contract” means any Contract required to be set forth on Schedule 3.13.

               “Material Permit” has the meaning set forth in Section 3.12.

               “Materials” means (i) all previously prepared memoranda of law and all analyses and
materials related to a Converium Third Party Claim, (ii) all agreements, contracts and other
memoranda, including preparatory materials, drafts and all oral and written communications
pertaining to a Converium Third Party Claim, and (iii) any documents or other information relating
to a Converium Third Party Claim that would otherwise be protected by any applicable privilege or
work product protection from disclosure to third parties other than the parties hereto. For the
avoidance of doubt, Materials shall not include any information relating to a party which is or
becomes publicly available other than through a breach of this Agreement by the disclosing party.

               “NICO” has the meaning ascribed to it in the first paragraph of this Agreement.

               “NICO Commutation Agreement” has the meaning set forth in Section 6.2(d).

- 6 -

 

               “Ordinary Course of Business” means the manner in which the Company and any of its
Subsidiaries, as the case may be, have conducted their business and operations since CRNA was
placed into run-off in August 2004, which includes the Commutation of Reinsurance Contracts.

               “Parent” has the meaning ascribed to it in the fourth Recital.

               “Permits” means all licenses, certificates of authority, permits, orders, consents,
approvals, registrations, authorizations, qualifications and filings under any applicable federal,
state, local or foreign laws or with any Governmental Entities.

               “Permitted Commutations” means the Commutations of the Reinsurance Contracts
identified as Permitted Commutations on Schedule 5.1.

               “Permitted Liens” means any Lien that (a) is disclosed in the Statutory Statements of
CRNA, including, if applicable, in the notes thereto, (b) is disclosed in the Statutory Statements
of CINA, including, if applicable, in the notes thereto, (c) is a mechanic’s, repairman’s,
materialman’s or other like Lien in respect of liabilities that are not yet due or that are being
contested in good faith, (d) constitutes a statutory Lien or other Lien not securing a monetary
obligation arising in the Ordinary Course of Business, (e) is a Lien for current Taxes not yet
delinquent, or (f) does not materially adversely affect the value of the asset, property or right
subject thereto or materially interfere with the present use of such asset, property or right.

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

               “Plan” means any “employee benefit plan” (as such term is defined in section 3(3) of
ERISA), and any other retirement, pension, profit-sharing, thrift, savings, target benefit,
employee stock ownership, cash or deferred, deferred or incentive compensation, bonus, stay bonus,
stock option, employee stock purchase, phantom stock, stock appreciation, change in control,
medical, dental, vision, psychiatric counseling, vacation, sick pay, disability or fringe benefit
plan, program or arrangement in which any current or former officer or Employee of the Company or
any of its Subsidiaries have participated, or as to which the Company or any of its Subsidiaries
have any present or contingent liability.

               “Pre-6/30 Taxes” means (i) all liability for Taxes of the Company and its Subsidiaries
for Pre-6/30 Tax Periods if, and to the extent that, such Taxes exceed the provision for Taxes on
the June 30, 2006 balance sheet of the Company and its Subsidiaries (other than deferred Taxes that
reflect timing differences between book and Tax income) and (ii) all liability resulting by reason
of the several liability of the Company and its Subsidiaries pursuant to Treasury Regulations §
1.1502-6(a); provided however, that for purposes of this definition the following shall be
considered a liability for Taxes: (x) any payments that the Company or any of its Subsidiaries is
required to make pursuant to the ZFS Tax Sharing Agreement in respect of Pre-6/30 Tax Periods and
(y) the amount of any incremental cash Tax liability actually incurred by Purchaser, the Company or
any of its Subsidiaries after the Closing Date as a result of a reduction in the net operating
losses of the Company and its Subsidiaries for U.S. federal income

- 7 -

 

tax purposes for any Pre-6/30 Tax Period such that the amount of available net operating
losses for U.S. federal income tax purposes as of June 30, 2006 is less than the maximum amount
usable under Section 382 of the Code as applied to the transactions contemplated by this Agreement.
Except as provided in the previous sentence, for purposes of this definition any reduction in a
net operating loss or other Tax attribute shall not be considered a liability for Taxes. For
purposes of this definition, in the case of any Taxable Period that begins before and ends after
June 30, 2006, (i) real, personal and intangible property Taxes (“Property Taxes”) of the
Company or any of its Subsidiaries for the Pre-6/30 Tax Period shall be equal to the amount of such
Property Taxes for the entire Taxable Period multiplied by a fraction, the numerator of which is
the number of days during the Taxable Period that are in the Pre-6/30 Tax Period and the
denominator of which is the number of days in the Taxable Period; and (ii) the Taxes of the Company
or any of its Subsidiaries (other than Property Taxes) for the portion of the Taxable Period that
constitutes a Pre-6/30 Tax Period shall be computed as if such taxable period ended as of the close
of business on June 30, 2006.

               “Pre-6/30 Tax Period” means any Taxable Period ending on or before June 30, 2006 and,
with respect to a Taxable Period that begins on or before June 30, 2006 and ends thereafter, the
portion of such Taxable Period ending on and including June 30, 2006.

               “Property” means any real, personal or mixed property, whether tangible or intangible.

               “Property Taxes” has the meaning set forth in the definition of Pre-6/30 Taxes.

               “Proprietary Software” has the meaning set forth in Section 5.16

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

               “Purchaser” has the meaning set forth in the first paragraph of this Agreement.

               “Purchaser Indemnitees” has the meaning set forth in Section 7.2.

               “Purchaser Insurance Approvals” means all Consents required to be obtained, made or
given by the Purchaser pursuant to the Applicable Insurance Codes.

               “PwC” means PricewaterhouseCoopers Ltd.

               “ReCap Employees Obligations” shall mean all of the liabilities arising out of or
relating to the matters set forth on Schedule 1.1(a).

               “Regulatory Body Matters” means any proceeding, investigation or inquiry, whether
formal or informal, or Action involving or undertaken by any governmental or regulatory agency,
body or representative (including without limitation the United States Securities and Exchange
Commission, any State attorneys general office or any State insurance department).

               “Reinsurance Contracts” means all Contracts, treaties, facultative certificates,
policies or other arrangements, other than Company Insurance Policies, to which the Company

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or any of its Subsidiaries is a party or by which any of them are bound or subject, providing
for insurance, ceding or assumption of reinsurance, excess insurance or retrocessions, including,
without limitation, all insurance policies, reinsurance policies, and retrocession agreements, in
each case as such Contract, treaty, facultative, policy or other arrangement may have been amended,
modified or supplemented, other than the Company Insurance Policies, irrespective of how such
arrangement is accounted for.

               “Representatives” has the meaning set forth in Section 5.2(a).

               “Reserves” means the reserves, funds, accruals and provisions held by CRNA and CINA
for insurance, reinsurance and retrocessional loss and loss adjustment expenses, including incurred
but not reported loss and loss adjustment expenses, reserves with respect to uncollectible
reinsurance and retrocession and reserves for unearned premiums and accrued premiums.

               “Restructuring Transactions” means those transactions set forth on Schedule
1.1(b).

               “SAP” means the applicable statutory accounting practices prescribed or permitted by
the applicable Domiciliary Insurance Department.

               “Securities Act” means the Securities Act of 1933, as amended.

               “Seller” has the meaning set forth in the first paragraph of this Agreement.

               “Seller Indemnitees” has the meaning set forth in Section 7.3.

               “Seller Insurance Approvals” means all Consents required to be obtained, made or given
by the Seller, the Company or any of its Subsidiaries pursuant to the Applicable Insurance Codes.

               “Senior Notes” means the 7 1/8% 200,000,000 Senior Notes due 2023 issued pursuant to
the Senior Notes Indenture.

               “Senior Notes Indenture” means the Indenture, dated as of October 20, 1993, between
ZRCH and The Bank of New York, as Trustee, as supplemented by the First Supplemental Indenture
thereto, dated as of November 20, 2001, by and among ZRCH, CHNA and the Trustee.

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

               “Shares” has the meaning ascribed to it in the first Recital of this Agreement.

               “Statutory Statements of CINA” means the Annual Statements of CINA, as filed with its
Domiciliary Insurance Department, for the year ended December 31, 2005 and the Quarterly Statements
of the condition and affairs of CINA, as filed with its Domiciliary Insurance Department, for the
quarterly periods ended March 31, 2006 and June 30, 2006.

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               “Statutory Statements of CRNA” means the Annual Statements of CRNA, as filed with its
Domiciliary Insurance Department, for the year ended December 31, 2005 and the Quarterly Statements
of the condition and affairs of CRNA, as filed with its Domiciliary Insurance Department, for the
quarterly periods ended March 31, 2006 and June 30, 2006.

               “Subsidiary” and “Subsidiaries” means, with respect to any Person, any
corporation, partnership, limited liability company, joint venture or other entity in which such
Person (i) owns, directly or indirectly, 50% or more of the outstanding voting securities, equity
interests, profits interest or capital interest, (ii) is entitled to elect at least a majority of
the board of directors or similar governing body, or (iii) in the case of a limited partnership or
limited liability company, is a general partner or managing member, respectively.

               “Surplus Note” means the 8.75% $150,000,000 Surplus Note issued by CRNA in favor of
the Parent.

               “Target Cash Payment” has the meaning set forth in Section 6.1(h).

               “Tax” and “Taxes” mean all income, profits, gains, gross receipts, net worth,
premium, value added, ad valorem, sales, use, excise, stamp, transfer, franchise, withholding,
payroll, employment, occupation, workers’ compensation, disability, severance, unemployment
insurance, social security and property taxes, and all other taxes, levies, fees, imposts, duties
and charges of any kind whatsoever, together with any interest, penalties and additions thereto
imposed by any Governmental Entity (“Taxing Authority”), including all amounts imposed as a
result of being a member of an affiliated or combined group.

               “Tax Claim” means any claim related to Taxes.

               “Tax Return” means all returns, reports, elections, estimates, declarations,
information statements and other forms and documents (including all schedules, exhibits, and other
attachments thereto) relating to, and required to be filed or maintained in connection with the
calculation, determination, assessment or collection of, any Taxes (including estimated Taxes).

               “Taxing Authority” has the meaning set forth in the definition of Taxes.

               “Taxable Period” means any taxable year or any other period that is treated as a
taxable year with respect to which any Tax may be imposed under any statute, rule, or regulation.

               “Third-Party Claim” has the meaning set forth in Section 7.4.

               “Tillinghast Report” means the report titled “CRNA Review of Loss and Loss Adjustment
Expense Liabilities as of June 30, 2006” dated August 30, 2006 prepared by the Tillinghast
business of Towers, Perrin Forster & Crosby, Inc, trading as Towers Perrin relating to the adequacy
of the Reserves of CRNA as of June 30, 2006 excluding business subject to the Restructuring
Transactions and the Permitted Commutations.

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               “Transitional Trademark License Agreement” means the transitional trademark license
agreement in the form attached hereto as Annex B.

               “WARN Act” means the Worker Adjustment and Retraining Notification Act of 1988.

               “ZFS Tax Sharing Agreement” means the Tax Sharing and Indemnification Agreement, dated
October 1, 2001, by and among ZRCH, ZGA US Limited, a Delaware Corporation, CHNA, CRNA and, solely
for purposes of Section 5.05 thereof, Zurich Insurance Company, a Swiss corporation, and the
Parent.

               “ZRCH” means Zurich Reinsurance Centre Holdings, Inc., a Delaware corporation.

ARTICLE II.

PURCHASE AND SALE OF THE SHARES

          2.1. Purchase and Sale of the Shares. (a) Upon the terms and subject to the
conditions set forth in this Agreement, the Purchaser agrees to purchase, and the Seller agrees
to sell, assign, transfer and deliver to the Purchaser, the Shares, free and clear of all Liens
(other than any restrictions on transferability of the Shares expressly provided in the
Applicable Insurance Codes, the Securities Act and any applicable state securities laws) for a
purchase price (the “Purchase Price”) equal to the sum of (x) $74,000,000, plus (y) the
principal amount of the CHNA Intercompany Loans, including accrued and unpaid interest through
the Closing Date; provided that the amount payable pursuant to clause (y) of this Section 2.1(a)
in full satisfaction of the CHNA Intercompany Loans shall be $21,000,000 unless the Closing
occurs after April 14, 2007, in which case the amount payable under clause (y) of this Section
2.1(a) shall be no more than $28,125,000.

          2.2. The Closing. Subject to the satisfaction or waiver of all of the conditions to
closing set forth in Article VI, the closing (the “Closing”) of the purchase and sale of
the Shares hereunder shall take place at the offices of Willkie Farr & Gallagher LLP, 787 Seventh
Avenue, New York, New York at 10:00 a.m., New York City time, on the third Business Day following
the date on which all of the conditions set forth in Article VI (other than those conditions that
are contemplated to be satisfied by the respective parties at the Closing itself) have been
satisfied or waived, or at such other time or place as may be mutually agreed upon by the parties
hereto. The date on which the Closing occurs is referred to herein as the “Closing
Date.”

          2.3. Deliveries at the Closing. At the Closing:

          (a) the Seller shall deliver to the Purchaser (i) certificates representing the Shares free
and clear of all Liens, duly endorsed in blank for transfer or accompanied by stock powers duly
endorsed in blank, (ii) the written resignation of any directors of the Company or its Subsidiaries
who are designated by the Purchaser for replacement, effective upon the Closing, (iii) the
instruments evidencing the CHNA Intercompany Loans for cancellation, (iv) instruments evidencing
the assignment of the Surplus Note as contemplated by Section 6.1(g) and (v) all

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other documents and instruments required hereunder to be delivered by the Seller to the
Purchaser at the Closing; and

          (b) the Purchaser shall (i) pay to the Seller the Purchase Price by wire transfer of
immediately available funds to an account or accounts designated by the Seller in a written notice
delivered to the Purchaser not later than two (2) Business Days prior to the Closing Date, and (ii)
deliver to the Seller all other documents and instruments required hereunder to be delivered by the
Purchaser to the Seller at the Closing.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES OF THE SELLER

          The Seller hereby represents and warrants to the Purchaser, except as disclosed in any of the
Schedules hereto, or the documents or other materials included in the online data room or otherwise
made available to the Purchaser, as follows:

          3.1. Organization and Qualification of the Seller. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of Switzerland.

          3.2. Authorization, Validity and Enforceability. The Seller has all requisite
corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements
to which it is a party, to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby, including, without limitation, the sale of the
Shares. The execution, delivery and performance by the Seller of this Agreement and the
Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby by
the Seller have been duly and validly authorized by all necessary corporate action on the part of
the Seller and no other corporate proceedings on the part of the Seller is necessary to authorize
the execution, delivery and performance of this Agreement and the Ancillary Agreements to which
it is party or the consummation of any of the transactions contemplated hereby or thereby. This
Agreement has been duly executed and delivered by the Seller and constitutes the legal, valid and
binding obligation of the Seller, enforceable against the Seller in accordance with its terms.

          3.3. No Conflicts. Assuming compliance with the matters referred to in Section 3.4
below, except as set forth in Schedule 3.3, the execution, delivery and performance by
the Seller of this Agreement and the Ancillary Agreements to which it is a party and the
consummation of the transactions contemplated hereby and thereby do not and will not conflict
with, result in any breach or violation of, constitute a default under (or an event that with the
giving of notice or the lapse of time or both would constitute a default under), or give rise to
any right of termination or acceleration of any right or obligation of the Seller, the Company or
any of its Subsidiaries under, or result in the creation or imposition of any Lien upon any
assets or Properties (including, without limitation, the Shares) of the Seller, the Company or
any of its Subsidiaries by reason of the terms of (a) the certificate or articles of
incorporation or bylaws of the Seller, the Company or any of its Subsidiaries, (b) any material
Contract to which the Seller, the Company or any of its Subsidiaries are a party or by or to
which any of them or their assets or Properties (including, without limitation, the Shares)

- 12 -

 

may be bound or subject, (c) any applicable order, writ, judgment, injunction, award,
decree, law, statute, ordinance, rule or regulation or (d) any other Permit of the Seller, the
Company or any of its Subsidiaries other than, in the case of each of (b), (c) and (d), any such
items that would not be reasonably likely to have a Material Adverse Effect or a material adverse
effect on the ability of the Seller to execute and deliver this Agreement or the Ancillary
Agreements, to perform its obligations hereunder and thereunder or to consummate the transactions
contemplated hereby and thereby.

          3.4. Consents and Approvals. Except as required under the HSR Act or as set forth
in Schedule 3.4, no consent, approval, authorization, license or order of, registration
or filing with, or notice to, any Governmental Entity or any other Person (collectively,
“Consents”) is necessary to be obtained, made or given by the Seller, the Company or any
of its Subsidiaries in connection with the execution and delivery by the Seller of this Agreement
or Ancillary Agreements, the performance by the Seller of its obligations hereunder and
thereunder and the consummation of the transactions contemplated hereby and thereby, other than
such Consents which, if not obtained or made, would not be reasonably likely to have a Material
Adverse Effect or a material adverse effect on the ability of the Seller to execute and deliver
this Agreement or the Ancillary Agreements, to perform its obligations hereunder or to consummate
the transactions contemplated hereby and thereby.

          3.5. Organization and Qualification of the Company and its Subsidiaries.
Schedule 3.5 lists each of the Company’s directly and indirectly owned Subsidiaries. The
Company and each of its Subsidiaries are corporations duly organized, validly existing and in
good standing under the laws of their respective jurisdictions of incorporation and have all
requisite corporate power and authority to own their Properties and to conduct their respective
businesses as currently being conducted, in each case with such exceptions as have not had a
Material Adverse Effect. The Company and each of its Subsidiaries are duly qualified and in good
standing as a foreign corporation in all jurisdictions in which the nature of their respective
businesses or the ownership of their respective Properties makes such qualification necessary, in
each case except where the failure to be so qualified has not had a Material Adverse Effect.

          3.6. Capitalization of Company. (a) Schedule 3.6 sets forth the
designation, par value and the number of authorized, issued and outstanding shares of capital
stock of the Company. The issued and outstanding capital stock of the Company consists solely of
the Shares. Except as set forth in Schedule 3.6, no other class of equity securities,
preferred stock, bonds, debentures, notes, other evidences of indebtedness for borrowed money or
other securities of any kind of the Company (except for the Shares) is authorized, issued or
outstanding. All of the Shares are duly authorized, validly issued, fully paid and
non-assessable.

          (b) Except for this Agreement and except as set forth in Schedule 3.6, there are no
subscriptions, options, warrants, calls, preemptive rights or other rights to purchase or otherwise
receive, nor are there any securities or instruments of any kind convertible into or exchangeable
for, any capital stock of the Company. Except as set forth in Schedule 3.6, neither the
Company nor the Seller is a party to any agreement with a third party which places any

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restriction upon, or which creates any voting trust, proxy, or other agreement with respect
to, the voting, purchase, redemption, acquisition or transfer of the Shares.

          3.7. Capitalization of CRNA and CINA. (a) Schedule 3.7 sets forth the
designation, par value and the number and authorized, issued and outstanding shares of capital
stock of each of CRNA and CINA and the number and percentage ownership interest of the Company in
CRNA and CRNA in CINA. Except as set forth in Schedule 3.7, no other class of equity
securities, preferred stock, bonds, debentures, notes, other evidences of indebtedness for
borrowed money or other securities of any kind of CRNA or CINA is authorized, issued or
outstanding. All of the outstanding shares of capital stock of CRNA and CINA are duly
authorized, validly issued, fully paid and non-assessable. Except as set forth in Schedule
3.7, all of the outstanding shares of capital stock of CRNA and CINA are owned of record and
beneficially by the Company and CRNA, respectively, free and clear of any Lien (other than
restrictions on transferability of such shares provided in Applicable Insurance Codes, the
Securities Act and any applicable state securities laws), in each case with such exceptions as
have not had a Material Adverse Effect.

          (b) Except as set forth in Schedule 3.7, there are no subscriptions, options,
warrants, calls, preemptive rights or other rights to purchase or otherwise receive, nor are there
any securities or instruments of any kind convertible into or exchangeable for, any capital stock
of CRNA or CINA. Except as set forth in Schedule 3.7, neither the Company nor any of its
Subsidiaries are a party to any agreement with a third party which places any restriction upon, or
which creates any voting trust, proxy, or other agreement with respect to, the voting, purchase,
redemption, acquisition or transfer of any shares of any of CRNA or CINA’s capital stock.

          3.8. Title to Shares. Seller has good and valid title to each of the Shares, free
and clear of any Lien (other than any restrictions on transferability of the Shares expressly
provided in the Applicable Insurance Codes, the Securities Act and any applicable state
securities laws).

          3.9. Financial Statements. (a) The Seller has heretofore delivered to the
Purchaser true and complete copies of the Statutory Statements of CINA and the Statutory
Statements of CRNA.

          (b) The Statutory Statements of CRNA were prepared in accordance with SAP of the CRNA
Domiciliary Insurance Department, consistently applied throughout the periods involved (except as
may be indicated in the notes thereto regarding the adoption of new accounting policies), have been
audited by PwC and present fairly, in accordance with SAP of the CRNA Domiciliary Insurance
Department, the statutory financial position of CRNA at the respective dates thereof and the
results of operations of CRNA, for the respective periods then ended, except that the quarterly
Statutory Statements of CRNA have not been audited and are subject to normal recurring year-end
audit adjustments. The Statutory Statements of CRNA complied in all material respects with SAP of
the CRNA Domiciliary Insurance Department, and were complete and correct in all material respects
when filed, and no material deficiency has been asserted in writing with respect to any of the
Statutory Statements of CRNA by any Applicable Insurance Department.

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          (c) The Statutory Statements of CINA were prepared in accordance with SAP of the CINA
Domiciliary Insurance Department, consistently applied throughout the periods involved (except as
may be indicated in the notes thereto regarding the adoption of new accounting policies), have been
audited by PwC and present fairly, in accordance with SAP of the CINA Domiciliary Insurance
Department, the statutory financial position of CINA at the respective dates thereof and the
results of operations of CINA, for the respective periods then ended, except that the quarterly
Statutory Statements of CINA have not been audited and are subject to normal recurring year-end
audit adjustments. The Statutory Statements of CINA complied in all material respects with SAP of
the CINA Domiciliary Insurance Department, and were complete and correct in all material respects
when filed, and no material deficiency has been asserted in writing with respect to any of the
Statutory Statements of CINA by any Applicable Insurance Department.

          3.10. Absence of Changes. (a) Except as set forth in Schedule 3.10 or any
other Schedule hereto and except for the transactions contemplated hereby, since June 30, 2006,
no change or event has occurred or condition exists that has had a Material Adverse Effect.

          (b) Except as set forth in Schedule 3.10 or any other Schedule hereto and except for
the transactions contemplated by this Agreement and the Ancillary Agreements, between June 30, 2006
through the date hereof, the Company and each of its Subsidiaries have operated their businesses in
the Ordinary Course of Business.

          3.11. Legal Proceedings. Except as set forth in Schedule 3.11, there is no
action, suit, claim, arbitration, proceeding, inquiry or investigation pending or, to the
Knowledge of Seller, threatened against the Seller, the Company or any of its Subsidiaries or any
of their respective assets or Properties, by or before any court, other Governmental Entity or
arbitrator, other than actions, suits, claims or proceedings which, if adversely determined,
would not have a Material Adverse Effect. Except as set forth in Schedule 3.11, there is
no outstanding order, writ, judgment, injunction, fine, award, determination or decree of any
court, other Governmental Entity or arbitrator against the Company or any of its Subsidiaries or
any of their respective assets or Properties which has had a Material Adverse Effect.

          3.12. Compliance with Laws; Permits. Except as set forth in Schedule 3.12,
each of the Company and its Subsidiaries are in compliance with (a) all applicable laws,
statutes, ordinances, rules, regulations or other legal requirements, whether federal, state,
local or foreign, (b) all applicable orders, writs, judgments, injunctions, awards,
determinations and decrees of any court, other Governmental Entity or arbitrator and (c) its
Permits, except where the failure to comply has not had a Material Adverse Effect. Each of the
Company and its Subsidiaries have all Permits necessary for the ownership of its assets and
Properties and to the conduct of their business which if violated or not obtained would have a
Material Adverse Effect (a “Material Permit”), and all such Material Permits are valid
and in full force and effect.

          3.13. Contracts. (a) Schedule 3.13(a) contains a true and complete list of
all of the following Contracts (excluding Plans and Insurance and Reinsurance Contracts

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which are the subject of Section 3.16(a), respectively) to which any of the Company or any
of its Subsidiaries are a party:

     (i) material partnership or joint venture Contracts;

     (ii) Contracts containing any covenant of the Company or any of its Subsidiaries not to
compete that materially impairs the operation of the business of the Company or any of its
Subsidiaries as conducted on the date of this Agreement;

     (iii) Contracts, involving amounts in excess of $1,000,000, relating to the borrowing
of money, or the direct or indirect guaranty of any obligation for borrowed money by the
Company or any of its Subsidiaries, or Contracts to service the repayment of borrowed money
or any other liability in respect of indebtedness for borrowed money of any other Person;

     (iv) lease, sublease, rental, licensing, use or similar Contracts with respect to
personal Property providing for annual rental, license, or use payments in excess of
$250,000 or the guaranty of any such lease, sublease, rental or other Contracts;

     (v) Contracts (A) outside the Ordinary Course of Business for the purchase,
acquisition, sale or disposition of any assets or Properties or (B) outside the Ordinary
Course of Business for the grant to any Person (excluding the Company or its Subsidiaries)
of any option or preferential rights to purchase any assets or Properties of CRNA;

     (vi) employment Contracts with any current officer, director or Employee providing for
compensation of $250,000 or more per annum that is not terminable by the Company or its
Subsidiaries by notice of not more than 90 days; and

     (vii) Contracts pursuant to which there is either a current or future obligation of the
Company or its Subsidiaries to make payments in excess of $1,000,000 in any twelve-month
period and that is not terminable by the Company or its Subsidiaries by notice of not more
than 90 days for a cost of less than $250,000 (other than Contracts relating to investments
in the Ordinary Course of Business and other than leases of real Property).

          (b) Schedule 3.13(b) sets forth a list of the Guaranteed Reinsurance Contracts,
identifying those which are Guaranteed Reinsurance Novation Contracts. As of the date hereof, the
Seller has not received notice of any claim under any Guarantee.

          (c) The Seller has heretofore delivered or made available to the Purchaser true and complete
copies of all of the Material Contracts set forth in Schedule 3.13(a). Each of the
Material Contracts is a valid and binding obligation of the Company and the applicable Subsidiary
party thereto and, to the Knowledge of Seller, is a valid and binding obligation of any other
Person party thereto, and is in full force and effect enforceable against the parties thereto in
accordance with its terms subject to applicable bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and other laws affecting creditors’ right generally, general principles
of equity and the discretion of courts in granting equitable remedies. Except as specified in
Schedule 3.13(c), none of the Company or any of its Subsidiaries are in breach or violation
of, or

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	 	 	default under, any of the Material Contracts, except for such breaches, violations and
defaults that have not had a Material Adverse Effect.

          3.14. Property and Assets. Schedule 3.14 contains a true and complete list
of (i) all real Property owned by the Company or any of its Subsidiaries and (ii) all real
Property leased by the Company or any of its Subsidiaries for an annual lease amount in excess of
$250,000 (the “Leased Real Property”). As of the date hereof, the Company or any of its
Subsidiaries have a valid leasehold interest in the applicable Leased Real Property as provided
in the applicable lease, in each case free and clear of any Lien except (A) as set forth in
Schedule 3.14, (B) Liens which do not materially interfere with the current use of the
Leased Real Property and (C) Permitted Liens.

          3.15. Intellectual Property. The Company and/or its Subsidiaries owns, licenses or
otherwise possesses rights to use, all patents, trademarks, trade names, service marks,
copyrights, technology, know-how, computer software programs or applications, and tangible or
intangible proprietary information or materials that are used in the business of the Company and
each of its Subsidiaries as currently conducted, except for any such failures to own, be licensed
or possess that have not had a Material Adverse Effect.

          3.16. Employee Benefit Plans. (a) Schedule 3.16 contains a true and
complete list, as of the date hereof, of all material Plans. The Seller has delivered or made
available to the Purchaser true and complete copies of the following documents: (i) each of the
Plans listed in Schedule 3.16, including all amendments thereto, or a written description
if there is no formal Plan document, any related trust agreements, group annuity contracts,
insurance policies or other funding agreements or arrangements; (ii) the most recent
determination letter, if any, from the IRS with respect to each of the Plans that is intended to
be qualified under section 401(a) of the Code or section 403(a) of the Code; (iii) the current
summary plan description, if any, for each of the Plans; and (iv) the annual return/report on
Form 5500, 5500-C or 5500-R, if any, for each of the Plans for the most recent plan year.

          (b) Except as set forth in Schedule 3.16, (i) each of the Plans has been administered
in material compliance with the applicable requirements of ERISA and the Code and in accordance
with its terms; (ii) no “disqualified person” or “party in interest” (as defined in section 4975 of
the Code and section 3(14) of ERISA, respectively) with respect to any Plan has engaged in any
“prohibited transaction,” as such term is defined in section 4975 of the Code or section 406 of
ERISA, for which there was not available an exemption or which could subject the Company or its
Subsidiaries to any material excise tax or penalty under section 4975 of the Code or section 502(i)
of ERISA; (iii) each of the Plans that is intended to be qualified under section 401(a) of the Code
has received a favorable determination letter from the IRS as to the tax qualification of such Plan
and no event has occurred with respect to the operation of the Plans that would reasonably be
expected to cause the loss of such qualification under section 401(a) of the Code; (iv) no Plan is
a “defined benefit plan,” as defined in Section 3(35) of ERISA, that is subject to Title IV of
ERISA, and none of the Company, its Subsidiaries or any ERISA Affiliate has ever maintained or
contributed to, or ever been obligated to contribute to, any such defined benefit plan; and (v) no
Plan is a “multiemployer plan” as defined in section 3(37) of ERISA.

- 17 -

 

          (c) Except as set forth in Schedule 3.16, none of the Plans provides retiree life or
retiree health benefits except as may be required under section 4980B of the Code or section 601
through 608 of ERISA.

          (d) Except as set forth in Schedule 3.16, neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will: (i) increase any
benefits otherwise payable under any Plan; (ii) result in the acceleration of the time of payment
or vesting of any benefits under any Plan or (iii) result in any payment, under any agreement or
arrangement in which the Company or any of its Subsidiaries are a party, becoming due to any
individual that would constitute an “excess parachute payment” under section 280G of the Code.

          3.17. Employee Relations. (a) Except as set forth in Schedule 3.17, (i)
there is no labor strike, dispute, slowdown, stoppage or lockout pending or, to the Knowledge of
Seller, threatened against the Company or any of its Subsidiaries, and during the past twelve
months there has not been any such action; (ii) neither the Company nor any of its Subsidiaries
are a party to or bound by any collective bargaining or similar agreement with any labor
organization, or work rules or practices agreed to with any labor organization or employee
association applicable to Employees; and (iii) within the last twelve months there has been no
“mass layoff” or “plant closing” as defined by the WARN Act or any similar state or local “plant
closing” law with respect to the Employees.

          3.18. Insurance Policies. Schedule 3.18 contains a list of all material
policies of insurance (excluding Reinsurance Contracts assumed or ceded by the Company or any of
its Subsidiaries in connection with the conduct of their insurance and reinsurance business)
maintained by the Company or its Subsidiaries as of the date hereof with respect to their
respective Properties and the conduct of their respective businesses (the “Company Insurance
Policies”).

          3.19. Tax Matters. Except as otherwise stated or disclosed in Schedule
3.19, (i) the Company and its Subsidiaries have filed (or joined in the filing of) when due
(after taking into account all properly requested extensions) all material Tax Returns required
by applicable law to be filed with respect to the Company or any of its Subsidiaries and all
Taxes shown to be due on such Tax Returns have been paid; (ii) there is no action, suit,
proceeding, investigation, audit or claim now pending against, or with respect to, the Company or
any of its Subsidiaries in respect of any material Tax or assessment, nor is any written claim
for additional Tax or assessment being asserted by any Taxing Authority; (iii) there has been no
waiver or extension of any applicable statute of limitations for the assessment or collection of
any Taxes of the Company or any of its Subsidiaries; and (iv) neither the Company nor any of its
Subsidiaries is a party to any agreement other than with the Seller, whether written or
unwritten, providing for the payment of Taxes, payment for Tax losses, entitlement to refunds or
similar Tax matters.

          3.20. Bank Accounts. Schedule 3.20 contains a true and complete list of the
names and locations of all banks, trust companies, securities brokers and other financial
institutions at which the Company or its Subsidiaries has an account or safe deposit box or
maintains a banking, custodial, trading or other similar relationship.

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          3.21. Material Services Provided by Seller. Except as set forth any of in
Schedule 3.21, neither the Seller, nor its Affiliates (other than the Company or any of
its Subsidiaries) provide any material services to the Company or its any of Subsidiaries.

          3.22. No Brokers. Except for Credit Suisse LLC, J.P. Morgan plc and Goldman Sachs
International, no broker, finder or investment banker (an “Investment Broker”) acting on
behalf of the Seller, the Company or any of its Subsidiaries is or will be entitled to any
brokerage, finder’s or other fee, compensation or commission from the Seller. No person is or
will be entitled to any brokerage, finder’s or other fee, compensation or commission from the
Company or any of its Subsidiaries in connection with the transactions contemplated by this
Agreement.

          3.23. No Other Representations or Warranties. EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES CONTAINED IN THIS ARTICLE III (AS QUALIFIED BY THE SCHEDULES) OR THE
ANCILLARY AGREEMENTS, NEITHER THE SELLER NOR ANY OTHER PERSON MAKES ANY OTHER EXPRESS OR IMPLIED
REPRESENTATION OR WARRANTY WITH RESPECT TO THE SELLER, THE SELLER’S AFFILIATES, THE COMPANY, ITS
SUBSIDIARIES OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ANCILLARY AGREEMENTS, AND
THE SELLER DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES, WHETHER MADE BY THE SELLER, THE
SELLER’S AFFILIATES, THE COMPANY, ITS SUBSIDIARIES OR ANY OF THEIR RESPECTIVE AFFILIATES,
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES. EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES CONTAINED IN ARTICLE III HEREOF (AS QUALIFIED BY THE SCHEDULES) OR THE
ANCILLARY AGREEMENTS, THE SELLER HEREBY DISCLAIMS ALL LIABILITY AND RESPONSIBILITY FOR ANY
REPRESENTATION, WARRANTY, PROJECTION, FORECAST, STATEMENT, OR INFORMATION MADE, COMMUNICATED, OR
FURNISHED (ORALLY OR IN WRITING) TO THE PURCHASER OR ANY OF ITS AFFILIATES OR REPRESENTATIVES
(INCLUDING ANY OPINION, INFORMATION, PROJECTION, OR ADVICE THAT MAY HAVE BEEN OR MAY BE PROVIDED
TO THE PURCHASER OR ANY OF ITS AFFILIATES BY ANY DIRECTOR, OFFICER, EMPLOYEE, AGENT, CONSULTANT
OR REPRESENTATIVE OF THE SELLER, THE COMPANY, ITS SUBSIDIARIES OR ANY OF THEIR RESPECTIVE
AFFILIATES).

ARTICLE IV.

REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

          The Purchaser hereby represents and warrants to the Seller except as disclosed in any of the
Schedules hereto as follows:

          4.1. Organization of the Purchaser. The Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of Nebraska, United States of America.

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          4.2. Authorization, Validity and Enforceability. The Purchaser has all requisite
corporate power and authority to execute and deliver this Agreement and the Ancillary Agreements,
to perform its obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and performance by the Purchaser of
this Agreement and the Ancillary Agreements to which it is a party and the consummation of the
transactions contemplated hereby and thereby by the Purchaser have been duly and validly
authorized by all necessary corporate action on the part of the Purchaser and no other corporate
proceedings on the part of the Purchaser is necessary to authorize the execution, delivery and
performance of this Agreement and the Ancillary Agreements or the consummation of any of the
transactions contemplated hereby and thereby. This Agreement has been duly executed and
delivered by the Purchaser and constitutes the legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms.

          4.3.  No Conflicts. Assuming compliance with the matters referred to in Section 4.4
below, the execution, delivery and performance by the Purchaser of this Agreement and the
Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby do
not and will not conflict with, result in any breach or violation of, or constitute a default
under (or an event which with the giving of notice or the lapse of time or both would constitute
a default under), or give rise to any right of termination or acceleration of any right or
obligation of the Purchaser, or result in the creation or imposition of any Lien upon any assets
or Properties of the Purchaser by reason of the terms of (a) the certificate of incorporation,
bylaws or other charter or organization documents of the Purchaser, (b) any material Contract to
which the Purchaser is a party or by or to which it or its assets or Properties may be bound or
subject, (c) any applicable order, writ, judgment, injunction, award, decree, law, statute,
ordinance, rule or regulation or (d) any other Permit of the Purchaser other than, in the case of
each of (b), (c) and (d), any such terms that would not be reasonably likely to have a material
adverse effect on the ability of the Purchaser to execute and deliver this Agreement and the
Ancillary Agreements, to perform its obligations hereunder and thereunder or to consummate the
transactions contemplated hereby and thereby.

          4.4. Purchaser Consents and Approvals. Except as required under the HSR Act and as
set forth in Schedule 3.4 or 4.4, no Consent of any Governmental Entity or other Person
is necessary to be obtained, made or given by the Purchaser in connection with the execution and
delivery by the Purchaser of this Agreement or the Ancillary Agreements, the performance by the
Purchaser of its obligations hereunder and thereunder and the consummation of the transactions
contemplated hereby and thereby, except for consents which if not obtained or made would not be
reasonably likely to have a material adverse effect on the ability of the Purchaser to execute
and deliver this Agreement or the Ancillary Agreements, to perform its obligations hereunder and
thereunder or to consummate the transactions contemplated hereby and thereby.

          4.5. Investment Intent. The Shares will be acquired by the Purchaser for its own
account without a view to a distribution or resale thereof, it being understood that the
Purchaser shall have the right to sell or otherwise dispose of any of the Shares pursuant to a
registration or an exemption therefrom under the Securities Act, and any applicable state
securities laws.

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          4.6. Financing. The Purchaser has cash available or has existing borrowing
facilities which together are sufficient to enable it to consummate the transactions contemplated
by this Agreement.

          4.7. No Brokers. No Investment Broker acting on behalf of the Purchaser is entitled
to any brokerage, finder’s or other fee, compensation or commission from the Purchaser in
connection with the transactions contemplated by this Agreement.

          4.8. No Knowledge of Misrepresentations or Omissions. The Purchaser has no
knowledge that the representations and warranties of the Seller made in this Agreement are not
true and correct and the Purchaser has no knowledge of any material errors in, or material
omissions from, the Schedules to this Agreement.

          4.9. No Other Representations or Warranties. EXCEPT FOR THE REPRESENTATIONS AND
WARRANTIES CONTAINED IN THIS ARTICLE IV (AS QUALIFIED BY THE SCHEDULES) OR THE ANCILLARY
AGREEMENTS, NEITHER THE PURCHASER NOR ANY OTHER PERSON MAKES ANY OTHER EXPRESS OR IMPLIED
REPRESENTATION OR WARRANTY WITH RESPECT TO THE PURCHASER, THE PURCHASER’S AFFILIATES OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR THE ANCILLARY AGREEMENTS, AND THE PURCHASER
DISCLAIMS ANY OTHER REPRESENTATIONS OR WARRANTIES, WHETHER MADE BY THE PURCHASER OR THE
PURCHASER’S AFFILIATES OR ANY OF THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES,
AGENTS OR REPRESENTATIVES.

ARTICLE V.

COVENANTS

          5.1. Conduct of Business. (a) Except for the Restructuring Transactions, or as set
forth on Schedule 5.1 or any of the other Schedules hereto, or as otherwise contemplated
by this Agreement or the Ancillary Agreements, or as consented to in writing (such consent not to
be unreasonably withheld or delayed) by the Purchaser, from the date hereof to and including the
Closing Date, the Seller will cause the Company and each of its Subsidiaries to conduct their
operations in the Ordinary Course of Business.

          (b) Except for the Restructuring Transactions, or as set forth in Schedule 5.1 or any
of the other Schedules hereto, or as otherwise contemplated by this Agreement or the Ancillary
Agreements from the date hereof to and including the Closing Date, the Seller will not, without the
prior written consent of the Purchaser (such consent not to be unreasonably withheld or delayed),
permit the Company or any of its Subsidiaries to directly or indirectly:

     (i) amend or modify its certificate or articles of incorporation, bylaws or other
charter or organization documents;

     (ii) merge or consolidate with or acquire the business of any other corporation or
other business organization or, except in the Ordinary Course of Business or pursuant

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to any Material Contract, acquire any material property or material assets of any other
Person;

     (iii) except in the Ordinary Course of Business, sell, pledge, lease, license or
dispose of a material portion of any of its assets;

     (iv) enter into, amend, terminate or otherwise restructure any Intercompany Agreements
in a manner that would have an impact on the Company or any of its Subsidiaries (other than
as contemplated by the Restructuring Transactions, the Permitted Commutations or Section 5.3
hereof); provided, however, that the Purchaser acknowledges and agrees that
all services provided by the Seller and its Affiliates (other than the Company and its
Subsidiaries) shall cease as of the Closing except as provided in the CRNA Transition
Services Agreement;

     (v) except as set forth in Schedule 5.1, enter into any Commutations of (x)
ceded Reinsurance Contracts or (y) material assumed Reinsurance Contracts;

     (vi) split, combine or reclassify any shares of its capital stock, or declare, pay or
set aside any sum for any dividend or other distribution (whether in cash, stock or
Property, any combination thereof or otherwise) in respect of its capital stock, or redeem,
purchase or otherwise acquire (or agree to redeem, purchase or otherwise acquire) any of its
capital stock or any of its other securities or any securities of the Company or any of its
Subsidiaries;

     (vii) adopt a plan of complete or partial liquidation, dissolution, rehabilitation,
merger, consolidation, restructuring, recapitalization, redomestication or other
reorganization;

     (viii) except as required by applicable law or by any Governmental Entity, adopt a new
Plan, amend any Plan or permit any Plan to enter into any material Contract, insurance
arrangement or funding obligation to increase present or future benefits or the present or
future cost of providing benefits;

     (ix) terminate any Employee or Plan (other than Plan terminations resulting from the
expiration of Plans in accordance with their terms) where such termination would reasonably
be expected to result in a liability in excess of $50,000;

     (x) adopt or amend any Plan or employment agreement or employment contract where such
adoption or amendment would reasonably be expected to result in a liability in excess of
$50,000, except to the extent required by applicable law;

     (xi) other than in the Ordinary Course of Business, enter into any commitment,
contractual obligation or transaction which calls for aggregate payments in excess of
$100,000 and which does not expire or is not terminable without cost or penalty at the
Company’s option within a 90-day period;

     (xii) incur any Debt (excluding for this purpose (A) any interest, fees or premiums
accruing on Debt outstanding on the date hereof and (B) any Debt incurred to

- 22 -

 

service interest, fees or premiums accruing on the Senior Notes; provided that such
Debt is not paid by the Company or its Subsidiaries);

     (xiii) make, authorize or commit to any capital expenditures in excess of $100,000;

     (xiv) settle or compromise any Action, other than (A) any claims or litigation for
which the sole remedy is monetary damages in an amount less than $500,000 or, (B) claims or
litigation arising out of any Reinsurance Contracts in an amount less than $500,000, (C) as
required by a final or non-appealable judgment of an arbitration panel or court, or (D)
Regulatory Body Matters; provided, however, that if the settlement or
compromise of any Regulatory Body Matter would require the Purchaser, the Company or any of
its Subsidiaries to admit any liability or pay damages or other amounts in settlement, the
Seller may not effect such settlement without the Purchaser’s written consent (which consent
shall not be unreasonably withheld or delayed);

     (xv) make or change any material Tax election, enter into, amend, terminate or
otherwise restructure any Intercompany Agreements relating to Taxes (other than with respect
to the Restructuring Transactions, Permitted Commutations or the ZFS Tax Sharing Agreement)
change an annual accounting period, adopt or change any material accounting method, consent
to any extension or waiver of the limitation period applicable to any material Tax Claim or
assessment relating to the Company or any of its Subsidiaries, if such election, adoption,
change, consent or other action would have the effect of increasing the Tax liability of the
Company or any of its Subsidiaries for any period ending after the Closing Date or
decreasing any Tax attribute of the Company or any of its Subsidiaries existing on the
Closing Date;

     (xvi) take any actions (other than those contemplated by this Agreement or the
Schedules hereto), which would cause the payments for salaries and obligations under all
Plans to exceed the amounts set forth on the employee payments budget attached hereto as
Annex E (the “Budget”) for the periods set forth in the Budget (other than payments
required by law or by the terms of any Plans); or

     (xvii) agree in writing to do any of the foregoing.

          5.2. Access; Confidentiality. (a) From the date hereof until the Closing, the
Seller will, and will cause the Company and each of its Subsidiaries to, (i) allow the Purchaser
and its officers, employees, counsel, accountants, actuaries, consultants and other authorized
representatives (“Representatives”) to have reasonable access to the books, records,
Contracts, Properties, facilities, management and personnel of the Company and each of its
Subsidiaries at all reasonable times, upon reasonable notice and in a manner so as not to
interfere with the normal operation of the business of the Company and each of its Subsidiaries
and (ii) cause the respective officers, employees and Representatives of the Seller, the Company
and each of its Subsidiaries to cooperate in good faith with the Purchaser and its
Representatives in connection with all such access.

- 23 -

 

          (b) The Purchaser and its Representatives shall keep confidential all information and
documents provided under this Section 5.2 in accordance with the terms of the Confidentiality
Agreement, the terms of which are incorporated herein by reference and shall continue in full force
and effect until the Closing, at which time the confidentiality obligations under the
Confidentiality Agreement shall terminate with respect to information relating exclusively to the
Company and its Subsidiaries. For the avoidance of doubt, the Confidentiality Agreement shall
continue in full force and effect with respect to all other information. If, for any reason, the
transactions contemplated by this Agreement or the Ancillary Agreements are not consummated, the
Confidentiality Agreement shall nonetheless continue in full force and effect in accordance with
its terms.

          5.3. Intercompany Accounts; Intercompany Agreements. Except as set forth in
Schedule 5.3 and except for the Surplus Note, the CHNA Intercompany Loans, the
Restructuring Transactions and the Permitted Commutations, the Seller shall cause all
intercompany accounts receivable or payable (whether or not currently due or payable) between (x)
the Company or any of its Subsidiaries, on the one hand, and (y) the Seller or any of its
Affiliates (other than the Company or any of its Subsidiaries), or any of the officers or
directors of any of the Seller and any of its Affiliates (other than the Company and its
Subsidiaries, or any of the officers or directors of the Company or its Subsidiaries), on the
other hand, to be settled in full (without any premium or penalty), at or prior to the Closing.

          5.4. Cooperation and Reasonable Best Efforts. Subject to the terms and conditions
hereof, (a) each of the parties hereto shall cooperate with each other, and the Seller shall
cause the Company and each of its Subsidiaries to cooperate with the Purchaser, in connection
with consummating the transactions contemplated by this Agreement, and (b) each of the parties
hereto agrees to, and the Seller shall cause the Company and each of its Subsidiaries to, use its
reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.

          5.5. Director and Officer Indemnification. (a) From and after the Closing Date,
Purchaser shall, and shall cause the Company and each of its Subsidiaries to, maintain all rights
to indemnification or exculpation now existing in favor of current and former directors,
officers, employees and agents of the Company or its Subsidiaries (collectively, the
“Director and Officer Indemnified Parties”) as provided in their respective certificates
of incorporation or bylaws (or other governing documents) or otherwise in effect as of the date
hereof with respect to matters occurring prior to the Closing Date, which shall survive and shall
continue in full force and effect after the Closing Date for a period of six years. Any rights
to indemnification or exculpation pursuant to this Section 5.5 shall not be amended, repealed or
otherwise modified for a period of six years from the Closing Date in a manner that would
adversely affect the rights thereunder of individuals who were directors, officers, employees or
agents of the Company or its Subsidiaries prior to the Closing Date.

          (b) If, after the Closing Date, the Company or its Subsidiaries, as the case may be, or any of
their successors or assigns (i) consolidates with or merges into any other Person and shall not be
the continuing or surviving corporation or entity after such consolidation or merger,

- 24 -

 

or (ii) transfers or conveys all or substantially all of its properties and assets to any
Person, then, in each such case, to the extent necessary, proper provision shall be made so that
the successors and assigns of the Company or its Subsidiaries, as the case may be, shall assume the
obligations of the Company and its Subsidiaries set forth in this Section 5.5.

          (c) The rights of each Director and Officer Indemnified Party under this Section 5.5 shall be
in addition to any rights such individual may have under the certificate of incorporation or bylaws
(or other governing documents) of the Company or its Subsidiaries, under any applicable laws or
under any agreement of any Director and Officer Indemnified Party with the Company or its
Subsidiaries. These rights shall survive consummation of the Closing and are intended to benefit,
and shall be enforceable by, each Director and Officer Indemnified Party.

          5.6. Consents and Approvals. (a) As soon as practicable after the date hereof, each
of the parties hereto shall use its reasonable best efforts to obtain any necessary Consents of,
and make any filing with or give any notice to, any Governmental Entities and other Persons
(including, without limitation, (i) Insurance Approvals and (ii) pursuant to the HSR Act, the
Federal Trade Commission and the United States Department of Justice) as are required to be
obtained, made or given by such party to consummate the transactions contemplated by this
Agreement and the Ancillary Agreements. Each party shall pay all amounts required to be paid by
it in connection with obtaining any Consents that it is required to obtain, including those set
forth in Schedule 5.6. In furtherance of the foregoing, each party shall use its
reasonable best efforts to obtain the necessary Consents of any Governmental Entities prior to
December 31, 2006. The Seller and the Purchaser shall provide each other with a reasonable
opportunity to review and comment upon submissions made to the Applicable Insurance Departments
in connection with the Seller Insurance Approvals and the Purchaser Insurance Approvals,
respectively, and shall keep one another reasonably informed of developments relating to their
efforts to obtain such Insurance Approvals. Prior to the Closing, the Seller will not, and will
not permit any of its Subsidiaries to, enter into or agree to any regulatory restrictions or
arrangements which, as a result, would materially alter CRNA’s or CINA’s licensing or regulatory
status in any state or Canada without first using its reasonable best efforts to consult with the
Purchaser with respect thereto, it being understood that nothing in this Agreement shall give the
Purchaser any right to prior consent to any such restriction or limitation.

          (b) Neither Purchaser nor Seller shall agree to participate in any meeting with any
Governmental Entity in respect of any such filings, investigation or other inquiry unless it
consults with the other party in advance and, to the extent permitted by such Governmental Entity,
gives the other party the opportunity to attend and participate at such meeting. Subject to the
Confidentiality Agreement and Section 5.2 hereof, Purchaser and Seller will coordinate and
cooperate fully with each other in exchanging such information and providing such assistance as the
other party may reasonably request in connection with the foregoing and in seeking early
termination of any applicable waiting periods or other approval under the HSR Act and any other
antitrust laws.

          (c) In furtherance and not in limitation of the covenants of the parties contained in this
Section 5.6, each of the parties hereto shall use its reasonable best efforts to

- 25 -

 

resolve such objections, if any, as may be asserted by any Governmental Entity with respect to
the transactions contemplated by this Agreement or the Ancillary Agreements.

          5.7. Press Releases. Prior to the Closing, each party hereto shall consult with the
other party hereto prior to issuing, and shall provide the other party with a reasonable
opportunity to review and comment upon, any press release pertaining to this Agreement or the
transactions contemplated hereby and, except as may be required by applicable law or any listing
agreement with any national securities exchange, will not issue any such press release prior to
such consultation.

          5.8. Records Retention, Accounting and Tax Support. From and after the Closing
Date, upon reasonable notice, Purchaser and Seller agree to furnish or cause to be furnished to
each other and their Representatives, employees, counsel and accountants access, during normal
business hours, to such information in a readily readable and accessible form (including
Materials or other records pertinent to the Company and any of its Subsidiaries); assistance and
cooperation relating to the Company and any of its Subsidiaries as is reasonably necessary for
financial reporting, loss reporting and accounting matters, the preparation and filing of any Tax
Returns, or the defense of any Tax Claim, Converium Third Party Claim or assessment and to meet
reporting requirements to any retrocessionaires or any Governmental Entities; provided,
however, that such access and cooperation does not unreasonably disrupt the normal
operations of Purchaser, Seller or the Company or any of its Subsidiaries. Such cooperation
shall include, without limitation, making Employees (and, to the extent reasonably feasible,
former Employees) reasonably available on a mutually convenient basis to provide information and
explanations of such records and materials. From and after the Closing Date, Purchaser shall
cause the Company and each of its Subsidiaries to preserve, maintain and keep, or cause to be
preserved, maintained and kept, in a readily readable and accessible form, all Materials and all
other original books and records of the Company and each of its Subsidiaries, including all books
and records necessary and pertinent to the Company and its Subsidiaries for financial reporting
and accounting purposes, the preparation and filing of any Tax Returns, or the defense of any Tax
Claim, Converium Third Party Claim or assessment (the “Books and Records”) for the longer
of any statute of limitations applicable to any such matters and a period of six (6) years from
the Closing Date. During such six-year or longer period, Seller and its Representatives shall,
upon reasonable notice and for any reasonable business purpose, have access during normal
business hours to examine, inspect and copy such Books and Records. After such six-year or longer
period, before the Company or its Subsidiaries shall dispose of any of such Books and Records,
the Company or any of its Subsidiaries shall give Seller at least ninety (90) days’ prior written
notice of its intention to dispose of such Books and Records and Seller shall be given an
opportunity, at its cost and expense, to remove and retain all or any part of such Books and
Records as Seller may elect.

          5.9. Tax Matters. (a) Any refund of Taxes with respect to the Company or any of its
Subsidiaries that is received with respect to any Pre-6/30 Tax Period shall be for the account of
the Seller (other than amounts received in respect of (i) a $919,182 refund receivable from the
IRS for utilization of capital loss carryback from 1997 to 1995 or (ii) a $339,472 refund
receivable for an overpaid tax balance to the Canadian tax authority). To the extent that the
Purchaser or the Company or any of its Subsidiaries receives any such refund of Taxes after the
Closing Date with respect to any such Pre-6/30 Tax Period (other than amounts

- 26 -

 

received in respect of (i) a $919,182 refund receivable from the IRS for utilization of
capital loss carryback from 1997 to 1995 or (ii) a $339,472 refund receivable for an overpaid tax
balance to the Canadian tax authority) the amount of such refund of Taxes shall be promptly paid
to the Seller. For purposes of this Section 5.9(a) the following shall be considered a refund of
Taxes: (i) any payments that the Company or any of its Subsidiaries is entitled to receive
pursuant to the ZFS Tax Sharing Agreement and (ii) any reduction in the Tax accrual reflected on
the books of the Company and its Subsidiaries with respect to the ZFS Tax Sharing Agreement. For
the avoidance of doubt, any special estimated tax payment, as described in Section 847 of the
Code (“SETP”), made prior to the Closing by Seller or any refund of SETPs that may be
received by Purchaser or the Company or any of its Subsidiaries shall not be considered a refund
of Taxes for the purposes of this Agreement.

          (b) Notwithstanding anything else in this Agreement to the contrary, none of the provisions of
Article VII shall be interpreted as providing any indemnification with respect to any SETP made
prior to the Closing by Seller or any refund of SETPs that may be received by Purchaser, the
Company or any of its Subsidiaries.

          (c) Seller shall cooperate with Purchaser in making such elections and taking such other
actions as may be requested by Purchaser to allow the Purchaser or the Company or its Subsidiaries
to reduce their tax obligations in connection with this Agreement, provided that such requested
elections or actions have no Adverse Consequences to the Parent or the Seller or any of its
Subsidiaries.

          5.10. Transfer Taxes. All transfer, documentary, sales, use, stamp, registration
and other such Taxes, and all conveyance fees, recording charges and other fees and charges
(including any penalties and interest) incurred in connection with the consummation of the
transactions contemplated by this Agreement shall be shared equally by Purchaser and Seller when
due. Purchaser and Seller will, to the extent require by applicable law, file all necessary Tax
Returns and other documentation with respect to all such Taxes, fees and charges.

          5.11. No Section 338 Election. No election under Section 338(g) or Section
338(h)(10) of the Code or similar provision under state, local or foreign law shall be made with
regard to the stock of the Company or any of its Subsidiaries.

          5.12. Employee Benefits Matters. From and after the Closing, the Purchaser shall be
solely responsible for and shall honor and satisfy all liabilities with respect to (i) the Plans
as set forth on Schedule 3.16 and applicable law and (ii) the Recap Employees
Obligations. For the avoidance of doubt, and without limiting the generality of the foregoing,
such liabilities to be honored and satisfied with respect to the Plans include any amounts due to
any Employee or former employee of the Company or any of its Subsidiaries pursuant to the terms
of the Annual Incentive Plan, the CRNA Long-Term Incentive Plan and the CRNA Severance Benefits,
and any letter agreements received by such Employees or former employees that provide for
enhanced benefits under such plans (together, the “Incentive Plans”). In addition, it is
understood that any Employees and former employees of the Company or any of its Subsidiaries who
hold, on the Closing Date, outstanding equity-based awards under any Plan shall be entitled to
exercise such option or receive shares in accordance

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with the terms of the Plans. Any amounts payable pursuant to the terms of the Incentive
Plans as a consequence of the transactions described in this Agreement shall be paid by the
Purchaser to the eligible Employees and former employees under the Incentive Plans promptly
following the Closing Date. Subject to the foregoing, the Purchaser may amend or terminate any
of the Plans after the Closing Date in accordance with their terms and applicable law.

          5.13. Guaranteed Reinsurance Contracts. (a) The Purchaser shall indemnify, defend
and hold harmless the Guarantor against, and reimburse the Guarantor for, any and all amounts
paid, including all Adverse Consequences (as defined below), including punitive, or bad faith
damages, arising out of, or in connection with, such Guaranteed Reinsurance Contracts, and shall
in any event promptly (and in any event within 10 Business Days following notice from the
Guarantor of a claim or payment) reimburse the Guarantor to the extent that (i) any Guarantees
are called upon and the Guarantor or its Affiliates make any payment under any Guarantee, (ii)
the Guarantor is required to defend or investigate any claims arising out of a Guarantee or (iii)
the provisions of Section 5.13(e) are applicable and the Guarantor settles or compromises a
Guarantee Claim (as defined below) in accordance with the terms thereof.

          (b) To the extent that any beneficiary under a Guaranteed Reinsurance Novation Contract
exercises their right to cause the Guarantor to assume the obligations under any such contract via
a novation, in addition to the rights of the Guarantor under Section 5.13(a) above, the Guarantor
shall have the option to require the Purchaser to provide a 100% quota share reinsurance cover to
the Guarantor substantially in the form of Annex D hereto at no cost to the Guarantor pursuant to
which the Purchaser will assume all of the obligations of the Guarantor under any such Guaranteed
Reinsurance Novation Contract.

          (c) From and after the Closing Date and until the obligations of the Guarantor in respect of
the Guaranteed Reinsurance Contracts have been satisfied or expired, the Purchaser will, and will
cause the Company and each of its Subsidiaries to, (i) allow the Seller and its Representatives to
have reasonable access to the books, records, Contracts, management and personnel of the Company
and each of its Subsidiaries relating to the Guaranteed Reinsurance Contracts and the Reserves
related thereto at all reasonable times, upon reasonable notice and in a manner so as not to
interfere with the normal operation of the business of the Company and each of its Subsidiaries and
(ii) cause the respective officers, employees and Representatives of the Purchaser, the Company and
each of its Subsidiaries to cooperate in good faith with the Seller and its Representatives in
order to facilitate access to information regarding the Guaranteed Reinsurance Contracts.

          (d) If any beneficiary of a Guarantee shall notify the Guarantor of a claim under a Guarantee
(each, a “Guarantee Claim”), then the Guarantor shall promptly and in any event within 10
Business days of receipt thereof notify the Purchaser; provided, however, that
failure to provide such written notice on a timely basis shall not release the Purchaser from any
of its obligations under this Section 5.13 except to the extent the Purchaser is actually
materially prejudiced by such failure. The Purchaser shall, upon receipt of such notice of a
Guarantee Claim and upon its irrevocably and unconditionally notifying the Guarantor in writing
that it shall indemnify the Guarantor in respect of such matter for all Adverse Consequences,
including any punitive or bad faith damages related thereto, be entitled to participate in or, at
the

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Purchaser’s option, assume at its own expense the defense, appeal or settlement of such
Guarantee Claim with respect to which the indemnity under this Section 5.13 has been invoked with
counsel of its own choosing (who shall be reasonably satisfactory to the Guarantor);
provided, however, that if the Purchaser assumes the defense, appeal or settlement of
such Guarantee Claim, (i) the Guarantor shall cooperate at the expense of the Purchaser with the
Purchaser in connection with the defense, appeal or settlement of any such Guarantee Claim
including contesting such Guarantee Claim or making any counterclaim against the Person asserting
such Guarantee Claim and (ii) the Purchaser shall reimburse the Guarantor for such expenses as they
are incurred (within 30 days of invoicing therefor) and provided, further, that the
Guarantor is hereby authorized prior to the date on which its receives written notice from the
Purchaser that it intends to assume the defense, appeal or settlement of such Guarantee Claim, to
file any motion, answer or other pleading and take such other action which it shall reasonably deem
necessary to protect its interest until the date on which the Guarantor receives such notice from
the Purchaser.

          (e) In the event that (i) the Purchaser fails to assume the defense, appeal or settlement of
such Guarantee Claim within twenty (20) days after receipt of notice thereof from the Guarantor or
(ii) the Purchaser fails to make any reimbursement payment to the Guarantor due hereunder on the
date such payment is due, the Guarantor shall have the right to undertake the defense or appeal of
or settle or compromise such Guarantee Claim on behalf of, and at the expense and risk of, the
Purchaser.

          (f) Except as set forth in Section 5.13(e) or as required by a final non-appealable order of
an arbitration panel or court, no claim or demand under a Guarantee may be settled by the Guarantor
without the consent of the Purchaser, which consent shall not be unreasonably delayed or withheld.
No Guarantee Claim or demand under any Guarantee may be settled by the Purchaser without the
consent of the Guarantor, unless such settlement (i) includes an unconditional release of the
Guarantor from all liability on claims that are the subject of the Guarantee and (ii) does not
include any statement as to admission of fault, culpability or a failure to act by or on behalf of
the Guarantor or any Affiliates thereof.

          5.14. Litigation Cooperation. (a) From and after the Closing Date, the Purchaser
shall cause the Company and each of its Subsidiaries to actively and fully cooperate, engage in
communications and share, exchange and jointly create documents, information, and analyses in
connection with, and in order to enable Seller to respond to, Converium Third Party Claims. Such
cooperation shall include, without limitation, (i) the provision to the Seller of all records and
information relating to the Company or its Subsidiaries, as the case may be, concerning Converium
Third Party Claims as requested by the Seller, (ii) making Employees (and, to the extent
reasonably feasible, former Employees) reasonably available on a mutually convenient basis to
provide information concerning Converium Third Party Claims and explanation of any Materials
provided hereunder, regardless of whether any conflict of interest exists between or among the
parties hereto with respect to any Converium Third Party Claim, (iii) making Employees (and, to
the extent reasonably feasible, former Employees) reasonably available on a mutually convenient
basis for purposes of investigating any Converium Third Party Claim, as well as the preparation
of any work in connection with any Converium Third Party Claims (iv) making Employees (and, to
the extent reasonably feasible, former Employees) available to provide testimony at a

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deposition, trial or other proceeding concerning any Converium Third Party Claim, (v)
providing Seller with access to Materials, documents, emails and data residing with or in the
possession, custody or control of the Company, its Subsidiaries or Employees (and to the extent
reasonably feasible, former Employees) relating to any Converium Third Party Claim and (vi)
consultation and coordination regarding Seller’s defense or prosecution of any Converium Third
Party Claim. To the extent that the Seller, the Company and any of its Subsidiaries are parties
to the same Converium Third Party Claim, the appropriate parties shall consult as to strategy and
seek to coordinate their actions.

          (b) From and after the Closing Date, the Seller and each of its Subsidiaries shall actively
and fully cooperate, engage in communications and share, exchange and jointly create documents,
information, and analyses in connection with, and in order to enable Company or any of its
Subsidiaries to respond to any Company Claim. Such cooperation shall include, without limitation,
(i) the provision to the Company of all records and information relating to the Company or its
Subsidiaries in the possession of the Seller or any of its Subsidiaries (other than the Company and
its Subsidiaries) concerning a Company Claim as requested by the Company, (ii) making employees
(and, to the extent reasonably feasible, former employees) of the Seller reasonably available on a
mutually convenient basis to provide information concerning a Company Claim and explanation of any
Company Materials provided hereunder, regardless of whether any conflict of interest exists between
or among the parties hereto with respect to any Company Claim, (iii) making employees (and, to the
extent reasonably feasible, former employees) of the Seller or any of its Subsidiaries at the time
of the request reasonably available on a mutually convenient basis for purposes of investigating
any such Company Claim, (iv) making employees of the Seller and its Subsidiaries (and, to the
extent reasonably feasible, former employees) available to provide testimony at a deposition, trial
or other proceeding concerning any such Company Claim, (v) providing the Company with access to
Company Materials, documents, emails and data residing with or in the possession, custody or
control of the Seller, its Subsidiaries or employees (and, to the extent reasonably feasible,
former employees) relating to any Company Claim and (vi) consultation and coordination regarding
the Company’s defense or prosecution of any Company Claim. To the extent that the Seller and any
of its Subsidiaries are parties to the same Company Claim, the appropriate parties shall consult as
to strategy and seek to coordinate their actions.

          (c) The Seller and the Company and each of its Subsidiaries each agree, on behalf of itself
and its respective counsel and other Representatives, that any communications or Company Materials
or Materials shared between the parties or their counsel or other Representatives regarding any
Converium Third Party Claims or Company Claim, without regard to whether such communications,
Company Material or Material were shared prior to the Closing Date, are intended to be and shall be
deemed strictly confidential and protected to the fullest extent permitted by law, including
pursuant to the attorney-client privileges, the work product doctrine, the joint defense privilege,
the self critical analysis privilege and any other privilege or immunity available under applicable
laws, whether or not so identified or marked. The protection from disclosure includes, but is not
limited to, disclosure in litigation relating to Converium Third Party Claims, Company Claims or
any other Actions.

          (d) The parties agree that if any attempt is made by any third party to secure or obtain
Materials or Company Materials, the other party shall be promptly notified and shall be

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given copies of any writings or documents, including subpoenas, summonses and the like, which
relate to the attempt by the third party to obtain the information. The parties further agree that
if a request is made, whether formally or informally, by any Person or entity (whether a
Governmental Entity or otherwise) for the Company or its Subsidiaries to make available, for any
purpose, including but not limited to interviews or taking of testimony, any current or former
employees, any current or former employees of Seller or any of its Subsidiaries, Materials, Company
Materials records and information relating to Converium Third Party Claims or Company Claims (or
any other matters in which Seller, Company or any of their respective Affiliates has a continuing
interest), neither the Seller, Purchaser nor their respective Subsidiaries may disclose any of the
foregoing or make any Employees or employees of Seller or any of its Subsidiaries available, unless
and until (i) the person proposing to make the disclosure notifies the parties to this Agreement of
such request (such notice to include the provision of copies of any writings or documents,
including subpoenas, summonses and the like, which relate to the request by such Person or entity
(whether a Governmental Entity or otherwise) to obtain such information) and (ii) the parties
receiving such notice are given ample time to take all reasonable steps necessary to prevent or
limit (x) disclosure of any Materials, Company Materials or records or information or (y) the
making available of any Employees and employees of Seller or any of its Subsidiaries. The parties
agree that nothing herein shall require any party hereto to take any action as may be prohibited or
refrain from taking any action as may be required by law.

          (e) Any Materials created or produced by the Company or its Subsidiaries shall only be used in
connection with the Converium Third Party Claims to which they relate. The Materials shall remain
the property of the Company or its Subsidiaries, as the case may be, and, following the conclusion
of Converium Third Party Claims, shall be destroyed or returned to the Company or its Subsidiaries,
as the case may be, upon twenty (20) days’ written notice. Any Company Materials created or
produced by the Seller or its Subsidiaries shall only be used in connection with Company Claims to
which they relate. The Company Materials shall remain the property of the Seller or its
Subsidiaries, as the case may be, and, following the conclusion of Company Claims, shall be
destroyed or returned to the Seller or its Subsidiaries, as the case may be, upon twenty (20) days’
written notice.

          (f) From and after the Closing Date, the Purchaser shall cause the Company and each of its
Subsidiaries to retain and preserve in a readily readable and accessible form any and all Materials
(including any documents, emails or other data) and any records and information relating to any
Converium Third Party Claims, including any of the foregoing in the possession of any Employees.
From and after the Closing Date, the Seller and each of its Subsidiaries shall retain and preserve
in a readily readable and accessible form any and all Company Materials (including any documents,
emails or other data) and any records and information relating to any Company Claims, including any
of the foregoing in the possession of any employees of Seller or any of its Subsidiaries.

          (g) The parties hereto and their respective counsel believe that (i) there is a mutuality of
interest with respect to matters indemnifiable hereunder (“Common Interest Matters”) and
(ii) communications between or among the parties’ counsel and communications involving the parties
in the presence of such counsel regarding Common Interest Matters have been and will continue to be
essential to the provision of legal advice regarding Common Interest Matters and the continued
effective representation of the parties in connection with Common

- 31 -

 

Interest Matters, whether or not litigation has been or may be commenced regarding any Common
Interest Matters. Accordingly, each party hereto agrees, on behalf of itself and its respective
counsel and other Representatives, that this Agreement and any other communications between the
parties or their counsel regarding Common Interest Matters are intended to be strictly confidential
and protected to the fullest extent by the attorney-client privileges and work product doctrine,
whether or not so identified or marked. The protection from disclosure includes, but is not
limited to, disclosure in litigation relating to Common Interest Matters. Notwithstanding anything
to the contrary herein, nothing shall prevent the disclosure of the existence of this Agreement or
the terms hereof to the extent that such disclosure is required by applicable law.

          (h) Each party acknowledges that, as a result of this Agreement, legal counsel for each of the
other parties may have access to confidential information of such party in the form of Materials or
Company Materials. Each party hereby acknowledges and agrees that nothing in this Agreement and no
sharing of information with such legal counsel pursuant to the terms of this Agreement shall be
deemed to create an attorney-client relationship between any attorney and anyone other than the
client of that attorney. Each party hereby represents and agrees that it will not seek to
disqualify counsel for any other party from continuing to represent such other party in any
subsequent proceedings, whether or not that other party’s interests become adverse to it, on the
basis of access to information obtained hereunder.

          5.15. Rights to the Converium Name and Converium Marks. (a) As of the Closing Date,
Purchaser, the Company, its Subsidiaries and their respective Affiliates shall not use in any
manner any trademarks of Seller or any of Seller’s Affiliates, including “Converium” (in block
letters or otherwise) or the Converium monogram, either alone or in combination with other words,
phrases, symbols, or devices, or any other trademarks confusingly similar to or embodying any of
the foregoing (all of the foregoing collectively, the “Converium Name and Converium
Marks”), except as provided for in the Transitional Trademark License Agreement. As promptly
as practicable, but in no event more than the term of the Transactional Trademark License
Agreement, Purchaser shall cause the Company and each of its Subsidiaries (i) to cease using in
any manner the Converium Name and Converium Marks, (ii) to make all filings with the appropriate
Governmental Entity (including without limitation, filing amendments to the applicable charters
and by-laws and filing appropriate amendments to policy form filings) to cause the Company and
each of its Subsidiaries to change any of their names that contain any of the Converium Name and
Converium Marks to a new corporate name that does not include the Converium Name and Converium
Marks; (iii) to cease to use in any form whatsoever any of the Converium Name and Converium
Marks; and (iv) to re-label, destroy or exhaust all materials bearing the Converium Name and
Converium Marks, including signage, advertising, promotional materials, electronic materials,
collateral goods, stationery, business cards, websites, and other materials.

          (b) Purchaser acknowledges and agrees that Purchaser, the Company, its Subsidiaries or their
respective Affiliates are not acquiring any (i) ownership interest in the Converium Name and
Converium Marks or (ii) any other rights to the Converium Name and Converium Marks. The Purchaser,
acting on behalf of itself, the Company and each of its Subsidiaries and their respective
Affiliates hereby assigns and relinquishes to Seller or its

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designee any and all rights that the Purchaser, the Company and its Subsidiaries may
heretofore have had to use the Converium Name and Converium Marks in any trade or business or
otherwise. Purchaser, the Company, its Subsidiaries and their respective Affiliates agree not to
contest the ownership or validity of any rights of Seller or any of its Affiliates in, or related
to, the Converium Name and Converium Marks.

          (c) Purchaser agrees that after the Closing Date, it shall procure that none of the Purchaser,
the Company, its Subsidiaries and their respective Affiliates will expressly, or by implication, do
business as, or represent themselves as controlled by, Seller or any of Seller’s Affiliates.
Notwithstanding the foregoing, and only upon the prior written Consent of Seller, Purchaser, the
Company, its Subsidiaries or their respective Affiliates may use the Converium Name and Converium
Marks after the Closing Date for the limited purpose of historical identification in materials not
designed as advertising or solicitation in the manner and form agreed upon in writing by Seller.

          5.16. Proprietary and Third Party Software. (a) All rights in and to any software,
including without limitation, source code, object code and related documentation, that was
created, conceived developed or acquired, whether jointly or individually, by the Seller or any
of its Affiliates (but excluding any third party software licensed by the Seller or any of the
Seller’s Affiliates) prior to the Closing Date shall belong solely to the Seller and shall be
proprietary to the Seller (“Proprietary Software”). The Company and each of its
Subsidiaries are hereby granted a perpetual, non-exclusive, worldwide, non-sublicensable,
royalty-free license to use the Proprietary Software identified on Schedule 5.16(a), used
by CRNA and CINA in the operation of their respective businesses as of the Closing Date solely in
object code for internal business purposes. CRNA and its Subsidiaries shall be entitled to
receive related maintenance and support services for the Proprietary Software from the Seller and
its Affiliates solely for a transition period as set forth in the CRNA Transition Services
Agreement. It is expressly understood by the Purchaser that the Seller, the Company and its
Subsidiaries make no representations or warranties, whether express or implied, with respect to
the Proprietary Software and the license granted herein. It is further understood that except as
expressly provided in the CRNA Transition Services Agreement and subject to the limitations set
forth therein, the Seller and its Affiliates are under no obligation to render any support or
maintenance services with respect to the Proprietary Software, which support and maintenance
services shall cease upon termination of the CRNA Transition Services Agreement. From and after
the Closing Date, the Purchaser shall cause the Company and each of its Subsidiaries to treat all
copies of such Proprietary Software as the confidential and proprietary property of the Seller.
The Seller will make available a copy of the then current version of the source code of the
Proprietary Software existing as of the Closing Date to the Purchaser and the Purchaser may copy,
alter, reproduce, create derivative works and modify the source code for the Proprietary Software
solely as required to operate the Proprietary Software and enjoy the benefits of the license
granted herein. The Company and its Subsidiaries shall not be entitled to any updates to any
source code for the Proprietary Software.

          (b) Purchaser acknowledges and agrees that Purchaser, the Company and each of its Subsidiaries
and their respective Affiliates are not acquiring any ownership interest or any other rights, in
whole or in part, in the Proprietary Software. The Purchaser, acting on behalf of

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itself, the Company and each of its Subsidiaries and their respective Affiliates hereby
assigns, transfers, quit-claims and relinquishes to the Seller or its designee all right, title and
interest the Purchaser, the Company and each of its Subsidiaries and their respective Affiliates
may heretofore have had in and to the Proprietary Software, including ownership interests in the
Proprietary Software. Purchaser shall cause the Company and each of its Subsidiaries and their
respective Affiliates to execute such other or additional instruments of transfer or conveyance in
respect of the Proprietary Software as are reasonably requested by Seller to give full effect to
and to perfect the ownership and proprietary rights of Seller in and to the Proprietary Software.
Purchaser, the Company and each of its Subsidiaries and their respective Affiliates agree not to
contest the ownership or validity of any rights of the Seller or any of its Affiliates in, or
related to, the Proprietary Software.

          (c) From and after the Closing Date, the Company and its Subsidiaries shall not be entitled to
use of any third party software and related services used by the Company and its Subsidiaries prior
to the Closing Date unless provisions to continue use and receive services have been made pursuant
to the CRNA Transition Services Agreement, subject however to the restrictions provided by the
terms of the applicable license agreements.

ARTICLE VI.

CONDITIONS TO CLOSING

          6.1. Conditions to the Obligation of the Purchaser to Close. The obligation of the
Purchaser to purchase the Shares at the Closing shall be subject to the satisfaction of the
following conditions at or prior to the Closing (unless waived by the Purchaser):

          (a) Representations, Warranties and Covenants. The representations and warranties of
the Seller contained in this Agreement shall be true and correct in all material respects at and as
of the date hereof and at and as of the Closing Date, as if made at and as of such time (except to
the extent in either case that any such representations or warranties speak as of another date, in
which case such representations and warranties shall be true and correct in all material respects
at and as of the date specified therein). The Seller shall have performed and complied in all
material respects with all covenants and agreements required to be performed or complied with by
the Seller on or prior to the Closing Date.

          (b) Consents. All Consents set forth in Schedule 6.1(b) shall have been duly
obtained, made or given and shall be in full force and effect.

          (c) Ancillary Agreements. The Ancillary Agreements shall have been executed and
delivered by the Seller or the Affiliate of Seller party thereto and shall be in full force and
effect.

          (d) No Proceedings. No injunction, order, decree or judgment shall have been issued
by any Governmental Entity of competent jurisdiction and be in effect, and no statute, rule or
regulation shall have been enacted or promulgated by any Governmental Entity and be in effect,
which in each case restrains or prohibits the consummation of the purchase and sale of the Shares.
No action or proceeding before any court or regulatory authority, domestic or foreign,

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shall have been instituted or threatened by any Governmental Entity which seeks to prevent or
delay the consummation of the purchase and sale of the Shares.

          (e) HSR Act. The required waiting period applicable to the purchase and sale of the
Shares under the HSR Act shall have expired or been earlier terminated.

          (f) Certificates. The Seller shall have delivered to the Purchaser a certificate
dated the Closing Date, signed by an executive officer thereof, certifying as to the fulfillment of
the conditions set forth in Section 6.1(a).

          (g) Surplus Note. Parent shall have caused the Surplus Note to be assigned to the
Company or, at the Purchaser’s direction, to any other Person designated by the Purchaser no later
than 30 days after the date hereof so long as such assignment to any Person other than the Company
does not result in any Adverse Consequences to the Parent, Seller or the Company (if such Adverse
Consequences to the Company would have Adverse Consequences to the Parent or the Seller by
operation of the indemnity for Pre-6/30 Taxes Section 7.2(b) hereof or otherwise result in Adverse
Consequences to the Seller).

          (h) Reinsurance Contract Commutation Payments. The Reinsurance Contracts set forth on
Schedule 6.1(h) shall have been commuted on terms such that the aggregate cash payment made to CRNA
pursuant to the Commutation (the “Commutation Payment”) is less than the Target Cash
Payment by no more than $250,000. To the extent that the Commutation Payment is less than the
Target Cash Payment by more than $250,000, the Seller, in its sole discretion, may require the
Purchaser to waive the condition set forth in the first sentence of this Section 6.1(h) in which
case the Closing shall occur at the time specified in Section 2.2. hereof and the Purchase Price
shall be reduced dollar for dollar by the amount that the Target Cash Payment exceeds the
Commutation Payment. For purposes of this Section 6.1(h), “Target Cash Payment” means (x)
$133,630,000 minus (y) the amount of any cash payments made to CRNA under the Reinsurance Contracts
set forth on Schedule 6.1(h) after June 30, 2006 and prior to consummation of the Commutations
thereof.

          6.2. Conditions to the Obligation of the Seller to Close. The obligations of the
Seller to sell the Shares at the Closing shall be subject to the satisfaction of the following
conditions at or prior to the Closing (unless waived by the Seller):

          (a) Representations, Warranties and Covenants. The representations and warranties of
the Purchaser contained in this Agreement shall be true and correct in all material respects at and
as of the date hereof and at and as of the Closing Date, as if made at and as of such time (except
to the extent in either case that any such representations or warranties speak as of another date,
in which case such representations and warranties shall be true and correct in all material
respects at and as of the date specified therein). The Purchaser shall have performed and complied
in all material respects with all covenants and agreements required to be performed or complied
with by the Seller on or prior to the Closing Date.

          (b) Consents. All of the Consents set forth in Schedule 6.2 shall have been
duly obtained, made or given and shall be in full force and effect.

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          (c) Ancillary Agreements. The Ancillary Agreements shall have been executed and
delivered by the Purchaser and the Ancillary Agreements shall be in full force and effect.

          (d) NICO Commutation Agreement. Seller and the Purchaser shall have entered into the
agreement to commute the 2004 Aggregate Stop Loss Agreement, by and among CRNA, CINA, Seller and
the Purchaser (the “NICO Commutation Agreement”), substantially in the form attached hereto
as Annex C and in form and substance reasonably satisfactory to the Seller and the NICO Commutation
Agreement shall be in full force and effect .

          (e) Restructuring Transactions; Permitted Commutations. The Restructuring
Transactions and the Permitted Commutations shall have been consummated on terms reasonably
satisfactory to the Seller.

          (f) Agribusiness IP Rights. Arrangements on terms satisfactory to Seller shall have
been made to assign and transfer all right, title and interest in and to the Agribusiness IP Rights
to Seller.

          (g) No Proceedings. No injunction, order, decree or judgment shall have been issued
by any Governmental Entity of competent jurisdiction and be in effect, and no statute, rule or
regulation shall have been enacted or promulgated by any Governmental Entity and be in effect,
which in each case restrains or prohibits the consummation of the purchase and sale of the Shares.
No action or proceeding before any court or regulatory authority, domestic or foreign, shall have
been instituted or threatened by any Governmental Entity which seeks to prevent or delay the
consummation of the purchase and sale of the Shares.

          (h) HSR Act. The required waiting period applicable to the purchase and sale of the
Shares under the HSR Act shall have expired or been earlier terminated.

          (i) Certificates. The Purchaser shall have delivered to the Seller a certificate
dated the Closing Date, signed by an executive officer thereof, certifying as to the fulfillment of
the conditions set forth in Section 6.2(a).

          6.3. Waiver of Closing Conditions. The parties acknowledge and agree that if
Purchaser or Seller has knowledge of a failure of any condition set forth in Section 6.1 or 6.2,
respectively, or of any breach by the other party of any representation, warranty or covenant
contained in this Agreement or the Ancillary Agreements, as the case may be, and such party
proceeds with the Closing, such party shall be deemed to have waived such condition or breach and
such party and its successors, assigns and Affiliates shall not be entitled to be indemnified
pursuant to Article VII to sue for damages or to assert any other right or remedy for any losses
arising from any matters relating to such condition or breach, notwithstanding anything to the
contrary contained herein or in any certificate delivered pursuant hereto.

          6.4. Frustration of Closing Conditions. Neither Purchaser nor Seller may rely on
the failure of any condition set forth in Section 6.1 or 6.2, respectively, to be satisfied if
such failure was caused by such party’s failure to act in good faith or to use its reasonable
best efforts to cause the Closing to occur.

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ARTICLE VII.

INDEMNIFICATION

          7.1. No Survival of Representations and Warranties. No representations, warranties,
covenants and agreements of the parties contained in this Agreement shall survive the Closing,
except for the agreements set forth in Sections 3.23 (No Other Representations or Warranties),
4.9 (No Other Representations or Warranties), 5.5 (Director and Officer Indemnification), 5.8
(Records Retention, Accounting and Tax Support), 5.9 (Tax Matters), 5.10 (Transfer Taxes), 5.11
(No Section 338 Election), 5.12 (Employee Benefits Matters), 5.13 (Guaranteed Reinsurance
Contracts), 5.14 (Litigation Cooperation), 5.15 (Rights to the Converium Name and Marks) and 5.16
(Proprietary and Third Party Software), Article VII (Indemnification) and Article IX
(Miscellaneous).

          7.2. Indemnification of the Purchaser. Subject to the limitations set forth in
Section 7.1 above, the Seller agrees to indemnify the Purchaser and its successors, permitted
assigns, directors, officers, employees and Affiliates (“Purchaser Indemnitees”) from and
against all liabilities, losses, expenses, and fees, including court costs and reasonable
attorneys’ fees and expenses (“Adverse Consequences”), arising out of or resulting from
(a) civil damages, litigation costs, fines or penalties resulting from any investigation by any
Governmental Entity with respect to the accounting treatment or financial reporting of (A) finite
or non-traditional reinsurance in which Subsidiaries of the Parent participated, or (B) the MBIA
reinsurance program set forth in the Schedules hereto and the resultant restatement of the
Parent’s financial statements, in the case of (A) and (B) to the extent such investigations
relate to the conduct of such business prior to the Closing; provided, however,
that the Seller shall have no obligation to indemnify the Purchaser for (i) any Adverse
Consequences arising out of, or resulting from the conduct of the Purchaser or any of its
Affiliates or (ii) any Adverse Consequences arising out of or resulting from actions required or
permitted to be taken pursuant to this Agreement or taken with the Purchaser’s consent and (b)
Pre-6/30 Taxes.

          7.3. Indemnification of the Seller. The Purchaser agrees to indemnify the Seller
and its successors, permitted assigns, directors, officers, employees and Affiliates (“Seller
Indemnitees”) from and against all Adverse Consequences arising out of or resulting from (a)
the breach or nonperformance of any covenant or agreement of the Purchaser contained in this
Agreement requiring performance after the Closing, (b) the Senior Notes, (c) the operation of the
business of the Company and each of its Subsidiaries following the Closing and (d) the assignment
of the Surplus Note to any person other than the Company (including Adverse Consequences to the
Company that give rise to Adverse Consequences to the Parent or the Seller as a result of the
indemnity for Pre-6/30 Taxes contemplated by Section 7.2(b) or otherwise).

          7.4. Matters Involving Third Parties Other Than Tax Claims. (a) If any third party
shall notify any party (the “Indemnified Party”) with respect to any matter (a
“Third-Party Claim”) which may give rise to a claim for indemnification against any other
party (the “Indemnifying Party”) under this Article VII (other than claims under
Guarantees, which shall be the subject of Section 5.13 hereof), then the Indemnified Party shall
promptly (and in any

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event within five (5) Business Days after receiving notice of the Third-Party Claim) notify
the Indemnifying Party thereof in reasonable detail in writing; provided, however
that the failure to provide such written notice on a timely basis shall not release the
Indemnifying Party from any of its obligations under this Artcile VII except (i) to the extent
the Indemnifying Party is actually materially required thereby and (ii) that the Indemnifying
Party shall not be liable for any expenses incurred by the Indemnified Party during the period in
which the Indemnified Party failed to give such notice. Thereafter, the Indemnified Party shall
deliver to the Indemnifying Party, promptly after the Indemnified Party’s receipt thereof, copies
of all notices and documents (including court papers) received by the Indemnified Party relating
to the Third Party Claim.

          (b) The Indemnifying Party upon its irrevocably and unconditionally notifying the Indemnified
Party in writing that it shall indemnify the Indemnified Party in respect of such matter for all
Adverse Consequences, shall be entitled to participate in or, at the Indemnifying Party’s option,
assume at its own expense the defense, appeal or settlement of such Third-Party Claim with respect
to which such indemnity has been invoked with counsel of its own choosing (who shall be reasonably
satisfactory to the Indemnified Party), and the Indemnified Party shall fully cooperate with the
Indemnifying Party in connection therewith including contesting such Third-Party Claim or making
any counterclaim against the Person asserting such Third-Party Claim. Such cooperation shall
include the retention and (upon the Indemnifying Party’s request) the provision to the Indemnifying
Party of records and information which are reasonably relevant to such Third-Party Claim, and
making employees or employees of Seller or its Affiliates available on a mutually convenient basis
to provide additional information and explanation of any material provided hereunder. Should the
Indemnifying Party so elect to assume the defense of a Third-Party Claim, the Indemnifying Party
shall not be liable to the Indemnified Party for legal expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof.

          (c) Whether or not the Indemnifying Party shall have assumed the defense of a Third-Party
Claim, the Indemnified Party shall not admit any liability with respect to, or settle, compromise
or discharge, such Third-Party Claim without the Indemnifying Party’s prior written consent (which
consent shall not be unreasonably withheld).

          7.5. Matters Involving Tax Claims. If a Tax Claim is made or threatened by any
Taxing Authority that, if successful, may result in an indemnity payment under Section 7.2, the
Purchaser shall promptly (and in any event within five (5) Business Days after receiving notice
of such Tax Claim) notify the Seller, stating the nature and basis of such claim and the amount
thereof, to the extent known. The Seller will have the right, at its option, upon timely notice
to the Purchaser, to assume at its own expense control of any audit or other defense of any Tax
Claim with its own counsel (who shall be reasonably satisfactory to the Purchaser). The Seller’s
right to control a Tax Claim will be limited to issues in respect of which amounts in dispute
would be paid by the Seller or for which the Seller would be liable pursuant to Section 7.2.
Costs of such Tax Claims are to be borne by the Seller unless the Tax Claim relates to a Taxable
Period which begins before and ends after June 30, 2006, in which event such costs shall be
fairly apportioned. The Purchaser and each of the Company and its Subsidiaries at their own
expense shall cooperate with the Seller in contesting any Tax Claim, which cooperation shall
include the retention and, upon the Seller’s request, the

- 38 -

 

provision of records and information that are reasonably relevant to such Tax Claim and
making Employees available on a mutually convenient basis to provide additional information or
explanation of any material provided hereunder. Notwithstanding the foregoing, the Seller shall
neither consent nor agree to the settlement of any Tax Claim with respect to any liability for
Taxes that may affect the liability for any state, federal or foreign income tax of the Company
or any of its Subsidiaries or any affiliated group (as defined in section 1504(a) of the Code) of
which the Company or any of its Subsidiaries is a member for any Taxable Period beginning after
the Closing Date without the prior written consent of the Purchaser and neither the Seller, nor
any entity related to the Seller, shall file an amended Tax Return that may increase the
liability for Taxes of the Company or its Subsidiaries after the Closing Date without the prior
written consent of the Purchaser. The Purchaser and the Seller shall jointly control all
proceedings taken in connection with any claims for Taxes relating solely to a Taxable Period of
the Company or any of its Subsidiaries which begins before and ends after June 30, 2006 and each
party shall bear its own out-of-pocket costs and expenses of the contest and all joint costs and
expenses of the contest shall be borne in the same ratio as the applicable proposed Tax would be
allocated.

          7.6. Matters Not Involving Third-Party Claims. Any indemnifiable claim that is not
a Third-Party Claim shall be asserted by written notice to the Indemnifying Party.

          7.7. Collateral Source Recoveries. The amount of an indemnification payment in
respect of an Adverse Consequence required to be made to any Purchaser Indemnitee or Seller
Indemnitee hereunder shall be limited to the amount of any Adverse Consequence that remains after
deduction therefrom of (i) any Tax benefits to the Indemnified Party as a result of the Adverse
Consequence and (ii) any third-party recoveries relating to the Adverse Consequence giving rise
to the indemnification claim paid to the Indemnified Party.

          7.8. Cooperation. Purchaser and Seller shall cooperate with each other with respect
to resolving any claim or liability with respect to which one party is obligated to indemnify the
other party hereunder including by making commercially reasonable efforts to mitigate or resolve
any such claim or liability.

          7.9. Termination of Indemnification. The obligations to indemnify and hold harmless
a party hereto (a) pursuant to Section 7.2(c) with respect to Pre-6/30 Taxes, shall terminate at
the time the applicable statute of limitations with respect to the Tax Liabilities in question
expires (giving effect to any extension thereof) and (b) pursuant to the other clauses of Section
7.2 and 7.3, shall not terminate.

          7.10. Exclusive Remedy. The Purchaser and the Seller acknowledge and agree that
prior to the Closing, the sole and exclusive remedy of the Purchaser for any breach or inaccuracy
of any representation or warranty contained herein shall be refusal to close the purchase and
sale of the Shares hereunder and following the Closing and other than in the case of actual fraud
and except as expressly provided in the Ancillary Agreements, or the NICO Commutation Agreement,
the indemnification provided for in this Article VII shall be the exclusive remedy in any action
seeking damages or any other form of relief brought by any party to this Agreement in respect of
the transactions contemplated hereby.

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ARTICLE VIII.

TERMINATION

          8.1. Termination of Agreement. This Agreement may be terminated prior to the
Closing:

          (a) by either the Purchaser, on the one hand, or by the Seller, on the other hand, upon
written notice to the other if, without fault of the terminating party, the Closing shall not have
occurred on or before June 30, 2007; provided, however, that if all conditions to
the obligations of the Purchaser, on the one hand, and the Seller, on the other hand, to consummate
the Closing (as set forth in Article VI hereof), other than obtaining the Insurance Approvals, have
then been satisfied, and the Purchaser and/or the Seller are diligently seeking to obtain such
outstanding Insurance Approvals, then the right to terminate this Agreement pursuant to this clause
(a) shall not be available to any party hereto, and the obligations hereunder of the parties hereto
shall be extended, until July 31, 2007;

          (b) at any time by mutual agreement in writing of the parties hereto;

          (c) by the Purchaser if the Seller has breached any representation, warranty, covenant or
agreement contained in this Agreement such that the conditions set forth in Section 6.1(a) hereof
would not be satisfied as of any date following the date of this Agreement; provided,
however, that the Purchaser may not terminate this Agreement pursuant to this Section
8.1(c) unless any such breach has not been cured within sixty (60) days after written notice
thereof by the Purchaser to the Seller informing the Seller of such breach;

          (d) by the Seller if the Purchaser has breached any representation, warranty, covenant or
agreement contained in this Agreement such that the conditions set forth in Section 6.2(a) hereof
would not be satisfied as of any date following the date of this Agreement; provided,
however, that the Seller may not terminate this Agreement pursuant to this Section 8.1(d)
unless any such breach has not been cured within sixty (60) days after written notice thereof by
the Seller to the Purchaser informing the Purchaser of such breach; or

          (e) by the Seller or the Purchaser if: (i) there shall be a final, non-appealable order of a
federal, state or foreign court in effect preventing consummation of the transactions contemplated
hereby; or (ii) there shall be any final action taken, or any final statute, rule, regulation or
order enacted, promulgated or issued or deemed applicable to the transactions contemplated hereby
by any Governmental Entity that would make consummation of the transactions contemplated hereby
illegal;

provided, however, that the right to terminate this Agreement under this Section
8.1(a), (b), (c), (d) or (e) shall not be available to any party if it is then in breach in any
material respect of any provision or any obligation under this Agreement.

          8.2. Effect of Termination. Except as provided in the following sentence, in the
event of the termination of this Agreement pursuant to Section 8.1, this Agreement shall
thereafter become void and have no effect, and no party hereto shall have any liability or
obligation to any other party hereto in respect of this Agreement, except that the provisions of

- 40 -

 

Section 5.2 (Access; Confidentiality), Section 5.7 (Press Releases), Article IX
(Miscellaneous) and this Section 8.2 shall survive any such termination. Nothing herein shall
relieve any party from liability for any breach of any of its covenants or agreements or willful
breach of its representations or warranties contained in this Agreement prior to termination of
this Agreement.

ARTICLE IX.

MISCELLANEOUS

          9.1. Notices. Any notices and other communications required to be given pursuant to
this Agreement shall be in writing and shall be effective upon delivery by hand or upon receipt
if sent by certified or registered mail (postage prepaid and return receipt requested) or by a
nationally recognized overnight courier service (appropriately marked for overnight delivery) or
upon transmission if sent by telex or facsimile (with request for immediate confirmation of
receipt in a manner customary for communications of such respective type and with physical
delivery of the communication being made by one of the other means specified in this Section 9.1
as promptly as practicable thereafter). Notices are to be addressed as follows:

          (a)     If to the Seller to:

Converium AG

General Guisan-Quai 26

CH-8022 Zurich

Switzerland

Attn: Christian Felderer, Esq.

Telecopy No.: +41 44 639 9066

with a copy to:

Willkie Farr & Gallagher LLP

1 Angel Court

London EC2R 7HJ

England

Attn: Gregory B. Astrachan, Esq.

Telecopy No.: +44 207 696 5455

          (b)     If to the Purchaser to:

Berkshire Hathaway Group

100 First Stamford Place

Stamford, CT 06902

Attn: General Counsel

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with a copy to:

National Indemnity Company

3024 Harney Street

Omaha, NE 68131

Attn: President

or to such other respective addresses as any of the parties hereto shall designate to the others by
like notice, provided that notice of a change of address shall be effective only upon receipt
thereof.

          9.2. Fees and Expenses. Except as provided herein, each of the parties hereto shall
pay its own respective fees and expenses (including, without limitation, the fees of any other
attorneys, accountants, investment bankers or other Representatives) incurred in connection with
this Agreement and the transactions contemplated hereby, whether or not such transactions are
consummated.

          9.3. Entire Agreement; Waivers and Amendments. This Agreement (including the
Annexes and Schedules hereto and the documents and instruments referred to herein) contains the
entire agreement and understanding of the parties with respect to the subject matter hereof and
supersedes all prior written or oral agreements and understandings with respect thereto. This
Agreement may be amended or modified, and the terms hereof may be waived, only by a writing
signed by all parties hereto or, in the case of a waiver, by the party entitled to the benefit of
the terms being waived.

          9.4. Assignment; Binding Effect. This Agreement may not be assigned or delegated,
in whole or in part, by any party hereto without the prior written consent of the other party
hereto. Subject to the foregoing, this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.

          9.5. No Third-Party Beneficiaries. This Agreement is for the benefit of the parties
hereto and is not intended to confer upon any other Person any rights or remedies hereunder,
except as provided in Section 5.5 with respect to Director and Officer Indemnified Parties and
Section 5.12 with respect to the Employees and former Employees of the Company and its
Subsidiaries.

          9.6. Governing Law. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of New York, without giving effect to the principles of
conflicts of law thereof.

          9.7. Consent to Jurisdiction. Except as otherwise expressly provided in this
Agreement, the parties hereto agree that any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this Agreement and the
Ancillary Agreements or the transactions contemplated hereby and thereby shall be brought in the
United States District Court for the Southern District of New York or any New York State court
sitting in Manhattan, and each of the parties hereby consents to the exclusive jurisdiction of
such courts (and of the appropriate appellate courts) in any such suit, action or

- 42 -

 

proceeding and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit, action or
proceeding in any such court or that any such suit, action or proceeding which is brought in any
such court has been brought in an inconvenient forum. Nothing in this Agreement shall be deemed
to waive the right of any person to remove any action brought in a state court to a United States
District Court to the extent permitted by the laws of the United States of America. Process in
any such suit, action or proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in this Section 9.7 shall be deemed
effective service of process on such party.

          9.8. Waiver of Jury Trial and Pre-Answer Security. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT
OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH PARTY COVENANTS TO
THE OTHER THAT: (i) IT WILL NOT SEEK PRE-ANSWER SECURITY FROM THE OTHER UNDER N. Y. S. INSURANCE
LAW SECTION 1213; AND (ii) THAT IT WILL NOT SERVE THE SUPERINTENDENT OF INSURANCE OF THE STATE OF
NEW YORK AS AGENT FOR THE SERVICE OF PROCESS. THE PARTIES AGREE THAT SHOULD A PARTY BREACH THE
FOREGOING COVENANT, IN ADDITION TO ANY OTHER REMEDY AVAILABLE THE NON-BREACHING PARTY SHALL NOT
BE SUBJECT TO SECTION 9.7 OF THIS AGREEMENT.

          9.9. Interpretation. This Agreement is the result of arms-length negotiations
between the parties hereto and has been prepared jointly by the parties. In applying and
interpreting the provisions of this Agreement, there shall be no presumption that the Agreement
was prepared by any one party or that the Agreement shall be construed in favor of or against any
one party. It is understood and agreed that the specification of any dollar amount in the
representations and warranties contained in this Agreement or the inclusion of any specific item
in the Schedules hereto is not intended to imply that such amounts or higher or lower amounts, or
the items so included or other items, are or are not material, and neither party shall use the
fact of the setting of such amounts or the fact of the inclusion of any such item in the
Schedules hereto in any dispute or controversy between the parties as to whether any obligation,
item or matter not described herein or included in the Schedules is or is not material for
purposes of this Agreement. For the purposes of this Agreement, (i) words in the singular shall
be held to include the plural and vice versa and words of one gender shall be held to include the
other gender as the context requires, (ii) the terms “hereof,” “herein,” and “herewith” and words
of similar import shall, unless otherwise stated, be constructed to refer to this Agreement as a
whole (including all of the Annexes) and not any particular provision of this Agreement, and
Article, Section, paragraph and Annexes references are to the Articles, Sections, paragraphs and
Annexes to this Agreement unless otherwise specified, (iii) the word “including” and words of
similar import when used in this Agreement shall mean “including without limitation” unless the
context otherwise requires or unless otherwise specified, (iv) the word “or” shall not be
exclusive, (v) provisions shall apply, when appropriate, to successive events and transactions,
(vi) “reasonable best efforts” shall not require the expenditure of a material amount of funds by
any party, waiver of any material rights or any action or omission

- 43 -

 

that would be a breach of this Agreement, and (vii) all references to any period of days
shall be deemed to be to the relevant number of calendar days unless otherwise specified.

          9.10. Variation in Pronouns. All pronouns and any variations thereof refer to the
masculine, feminine or neuter, single or plural, as the context may require.

          9.11. Captions. The Article and Section headings in this Agreement are inserted for
convenience of reference only, and shall not affect the interpretation of this Agreement.

          9.12. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original and all of which together shall be considered one and
the same agreement.

          9.13. Extension; Waiver. At any time prior to the Closing Date, either party may
(a) extend the time for the performance of any of the obligations or other acts of the other
party, (b) waive any inaccuracies in the representations and warranties contained in this
Agreement or in any document delivered pursuant to this Agreement of the other party or (c) waive
compliance with any of the agreements or conditions contained in this Agreement of the other
party. Any agreement on the part of a party to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of such party. No delay on the part of
any party in exercising any right hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any such right nor any single or partial exercise of any such
right preclude any further exercise thereof or the exercise of any other such right.
Notwithstanding the foregoing, the parties acknowledge and agree the if the Purchaser or the
Seller has knowledge of a failure of any condition set forth in Article VI or of any breach by
the other party of any representation, warranty or covenant contained in this Agreement and such
party proceeds with the Closing, such party shall be deemed to have waived such condition or
breach and such party and its successors, assigns and Affiliates shall not be entitled to be
indemnified pursuant to Article VII, to sue for damages or to assert any other right or remedy
for any losses arising from any matters relating to such condition or breach.

          9.14. No Representation Regarding Reserves. Purchaser acknowledges that the Seller
has delivered or made available to the Purchaser the Tillinghast Report. Notwithstanding any
other provision of this Agreement or any of the Ancillary Agreements, Seller makes no express or
implied representation, warranty or covenant that (i) the Reserves are, or will be, adequate or
sufficient, or (ii) with respect to any “line item” in the Closing Financial Data that is
impacted as a result of any inadequacy or insufficiency of the Reserves. Purchaser agrees that
it shall not affect a claim against Seller under any provision of this Agreement or the Ancillary
Agreements for Adverse Consequences suffered by it or any of its Affiliates arising out of the
inadequacy or insufficiency of the Reserves.

- 44 -

 

          IN WITNESS WHEREOF, each of the parties has executed this Agreement as of the date first
written above.

	 	 	 	 	 
	 	NATIONAL INDEMNITY COMPANY

 	 
	 	By:  	/s/ Brian
Snover	 
	 	 	Name:  	Brian Snover 	 
	 	 	Title:  	Vice President 	 
	 

	 	 	 	 	 
	 	CONVERIUM AG

 	 
	 	By:  	/s/ Paolo De Martin 	 
	 	 	Name:  	Paolo De Martin 	 
	 	 	Title:  	Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Christian
Felderer
 	 
	 	 	Name:  	Christian Felderer 	 
	 	 	Title:  	General Legal Counsel 	 
	 

[SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT]

- 45 -

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