Court Opinion

ID: 9959918
Source: CourtListenerOpinion
Date Created: 2024-04-12 20:12:18.929471+00
Date Added: 2024-06-11T08:18:59.925581
License: Public Domain

James Riv. Group Holdings, Ltd. v
         Fleming Intermediate Holdings LLC
               2024 NY Slip Op 31196(U)
                      April 6, 2024
           Supreme Court, New York County
        Docket Number: Index No. 651281/2024
                  Judge: Andrea Masley
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
 Op 30001(U), are republished from various New York
 State and local government sources, including the New
  York State Unified Court System's eCourts Service.
 This opinion is uncorrected and not selected for official
                       publication.
                                                                                                                        INDEX NO. 651281/2024
  NYSCEF DOC. NO. 110                                                                                             RECEIVED NYSCEF: 04/06/2024

            SUPREME COURT OF THE STATE OF NEW YORK
            COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 48
            ----------------------------------------------------------------------------------- X

             JAMES RIVER GROUP HOLDINGS, LTD.,                                                      INDEX NO.         651281/2024

                                                          Plaintiff,
                                                                                                    MOTION DATE
                                                - V -
                                                                                                    MOTION SEQ. NO.        002
             FLEMING INTERMEDIATE HOLDINGS LLC,

                                                          Defendant.                                 DECISION+ ORDER ON
                                                                                                           MOTION
            ----------------------------------------------------------------------------------- X

            HON. ANDREA MASLEY:

            The following e-filed documents, listed by NYSCEF document number (Motion 002) 22, 23, 24, 25, 26,
            27,28,29, 30, 31, 32, 33, 34, 36, 37, 38, 39,40,41,42,43,44,45,46,47,48, 66,67, 68, 69, 70, 71,
            72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93, 94, 95,96, 97,105
            were read on this motion to/for                                   PREL INJUNCTION/TEMP REST ORDR

            Upon the foregoing documents, it is

                      If a purchaser of a business refused to close a business transaction without

            reason, in that extraordinary circumstance, a judge would be compelled to issue a

            mandatory injunction directing the purchaser to close. A mandatory injunction is

            designed to address this hypothetical situation which now confronts this court.

            Otherwise, this remedy would not exist.

                      "The Court of Appeals explained in Bachman that a mandatory injunction
                      may be permitted where "the status quo is a condition not of rest, but of
                      action, and the condition of rest is exactly what will inflict the irreparable
                      injury upon complainant," ... In other words, the status quo itself may
                      consist of a defendant's obligation to perform an affirmative act." (Vincent
                      Alexander, 2020 Supp Prac Commentary, McKinney's Cons Laws of NY,
                      Book 7B, CPLR 6301, citing Bachman v Harrington, 184 NY 458,464
                      [1906] [mandatory injunction compelling defendant to take affirmative
                      action may be "necessary to preserve the status of the parties"].)

             651281/2024 JAMES RIVER GROUP HOLDINGS, LTD. vs. FLEMING INTERMEDIATE HOLDINGS                            Page 1 of 24
             LLC
             Motion No. 002

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                      Here, the parties were to close on March 1, 2024 1 on the sale of plaintiff's

            reinsurance subsidiary to defendant. Since November 8, 2023, when the parties

            executed the Stock Purchase Agreement (SPA), plaintiff James River Group Holdings,

            Ltd. (JRGH) has diligently worked to satisfy its SPA obligations, e.g., it obtained

            regulatory approval (NYSCEF 67, SPA §6.1 [a], NYSCEF 38, D'Orazio 2 aff ,I9) and

            completed the Pre-Closing Events including: (i) terminated intercompany transactions

            (§4.1 0[a]), (ii) settled intercompany loans, payables and receivables (§4.1 0[b]), (iii)

            assigned certain contracts (§4.19), and (iv) took the Pre-Closing Dividend of $139

            million (§4.12)i 3 at the amount stated in §8.1 (b). (NYSCEF 67, Schedule 8.1 [b],

            Accounting Principles, Specified Policies B [i to iv]; NYSCEF 38, D'Orazio ,I34.)

            However, as discussed below, defendant Fleming Intermediate Holdings LLC (Fleming)

            failed to appear at the closing and instead sent a letter on March 2, 2024 demanding a

            $78 million concession as a condition to close, arguing that (1) JRG Reinsurance

            Company Ltd.'s (JRG Re) reserves are below historical reserves requiring JRGH to

            inject additional funds in JRG Re and (2) additional funds are needed to provide liquidity

            to pay three months of claim payments and operating expense. 4 (NYSCEF 38,

            1 Under the SPA, the parties have six months to close or May 1, 2024.   (NYSCEF 3,
            SPA §7.1 [b] [Outside Date].) Buyer may terminate the SPA if Seller fails to cure within
            60 days of the notice of the breach. (Id. §7.1 [d].)
            2
              Frank D'Orazio is the Chief Executive Officer of JRGH. (NYSCEF 38, D'Orazio aff
           ,i1.)
            3
             The text of the relevant SPA sections are in endnotes.
            4
              Fleming had a third objection related to a side letter agreement regarding a right of first
            refusal (ROFR). On the eve of the closing on March 1, 2024, JRGH agreed to execute
            the side letter, as drafted by Fleming, but Fleming still refused to close. (NYSCEF 95,
            Haller aff ,I15; NYSCEF 67, SPA, Schedule 8.1 [8][2] [Key Terms to Side Letter].) At
            argument on this motion, JRGH reiterated its willingness to execute Fleming's side letter
            with no modifications such as JRGH's requirement that the parties exercise good faith
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                LLC
                Motion No. 002

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            D'Orazio aff ,i12; NYSCEF 94, Linden ,I28.) Both of Fleming's demands yield a Closing

            Purchase Price significantly less than the SPA's Closing Purchase Price. 5 However,

            Fleming's objections are to JRGH's compliance with the SPA, but JRGH cannot breach

            the SPA by complying with the same provision it allegedly breached. Rather, the

            breaches that Fleming alleges are contrived and contrary to the exceedingly clear,

            though complicated, SPA. However, complexity does not make an agreement

            ambiguous or unenforceable and has never precluded specific performance, which is

            the remedy JRGH seeks here. (Std. Fashion Co. v Siegel-Cooper Co., 30 AD 564 [1st

            Dept 1898], aff'd 157 NY 60 [1898] [Specific performance will not be denied because of

            a complex contractual arrangement.].)

                   JRGH moves pursuant to CPLR 6301 for an order "(a) preliminarily granting

            JRGH specific performance of the Stock Purchase Agreement by (i) ordering Fleming to

            fulfill its obligations under the Stock Purchase Agreement, (ii) immediately close the

            transaction, (iii) refrain from further conduct designed to avoid closing the transaction."

            (NYSCEF 34, OSC.) In its complaint, JRGH seeks specific performance of the SPA

            and damages for the injuries caused by Fleming's intentional failure to close in bad faith

            regarding the ROFR. Therefore, it is unnecessary for the court to address Fleming's
            side letter objection.
            5
              "The base purchase price payable by the Buyer to the Seller for the Shares shall be an
            amount equal to $138,000,000 (the 'Base Purchase Price'). The Base Purchase Price
            as adjusted in accordance with Section 1.3 (the 'Closing Purchase Price') shall be
            payable at Closing as set forth in Section 1.6(b). The Closing Purchase Price shall be
            subject to adjustment after the Closing as set forth in Section 1.4 (the total consideration
            paid to the Seller pursuant to this Section 1.2, as adjusted pursuant to Section 1.3 and
            Section 1.4, the 'Purchase Price')." (NYSCEF 67, SPA §1.2.) The price to be paid by
            Fleming at closing is set by §1.3 by comparing the Adjusted Net Worth to the Target Net
            Worth. If the Adjusted Net Worth is above the Target, the base price is increased while
            if the Adjusted Net Worth is below the target, the base price to be paid is reduced. (Id.
            SPA §1.3.)
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             LLC
             Motion No. 002

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            on March 1, 2024 based on manufactured breaches. 6 (NYSCEF 2, Verified Complaint

            22/24 7 , ,i,i7, 10, 71, 88.)

                      "A preliminary injunction may be granted in any action where it appears that the

            defendant threatens or is about to do, or is doing or procuring or suffering to be done,

            an act in violation of the plaintiff's rights respecting the subject of the action, and tending

            to render the judgment ineffectual." (CPLR 6301.) To obtain a preliminary injunction,

            JRGH must establish: "(1) a likelihood of ultimate success on the merits; (2) the

            prospect of irreparable injury if the provisional relief is withheld; and (3) a balance of

            equities tipping in the moving party's favor." (Doe v Axelrod, 73 NY2d 748, 750 [1988].)

                      "[T]he purpose of a preliminary injunction is to preserve the status quo
                      between the parties until the merits of the underlying equity action can be
                      resolved. Most preliminary injunctions accomplish this goal by prohibiting
                      the defendant from performing an act that allegedly violates plaintiff's
                      rights while the action is pending. A so-called mandatory injunction, i.e.,
                      one which compels the defendant to perform an affirmative act, creates
                      tension with these concepts in two ways. First, by compelling the
                      defendant to do something, a mandatory injunction may have the
                      tendency to alter rather than maintain the status quo. Second, it often has
                      the effect of granting the plaintiff all or part of the ultimate relief sought in
                      the action, prematurely resolving the merits before they are fully explored."
                      (Vincent Alexander, 2020 Supp Prac Commentary, McKinney's Cons
                      Laws of NY, Book 7B, CPLR 6301, citing Bachman v Harrington, 1906,
                      184 NY 458, 464.)

            6
             JRGH also lists Altamont Capital Partners (Altamont) on its OSC (NYSCEF 34) as a
           defendant, but Altamont is not listed as a defendant in the complaint and there is no
           affidavit of service in the docket. Altamont is a private equity investor that "acquired a
           majority stake in ... Fleming's parent company." (NYSCEF 2, Complaint ,I25; see also
           ,i,i43-45.) In its verified complaint, JRGH states that "[i]f ACP Fund's commitment is
           not fulfilled at closing, JRGH will also seek to exercise its right as an express third-party
           beneficiary of the Altamont Equity Commitment Letter to cause Fleming to seek specific
           performance of ACP Fund's obligations to fund the commitment." (Id. ,I98.)
           7
              NYSCEF pagination.
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                LLC
                Motion No. 002

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            "A mandatory injunction, which is used to compel the performance of an act, is an

            extraordinary and drastic remedy which is rarely granted and then only under unusual

            circumstances," but such injunctions do issue under appropriate circumstances. (Shake

            Shack Fulton St. Brooklyn, LLC v Allied Prop. Group, LLC, 177 AD3d 924, 927 [2d Dept

            2019], quoting Matos v City of New York, 21 AD3d 936, 937 [2d Dept 2005].) 8 The

            movant for a mandatory injunction is rightfully held to a "higher standard where: (i) an

            injunction will alter, rather than maintain, the status quo, or (ii) an injunction will provide

            the movant with substantially all the relief sought and that relief cannot be undone even

            if the defendant prevails at a trial on the merits." (Tom Doheny Assoc., Inc., 60 F3d at

            33-34 ["mandatory injunction should issue ... only upon a clear showing that the moving

            party is entitled to the relief requested, or where extreme or very serious damage will

            result from a denial of preliminary relief."] [internal quotations and citations omitted].)

            8
              See also Destiny USA Holdings, LLC v Citigroup Glob. Markets Realty Corp., 69 AD3d
            212 (4th Dept 2009) (lender required to fund draw requests where borrower established
            that (1) lender miscalculated deficiency calculation as a matter of law under the contract
            (2) irreparable injury because of (a) the uniqueness of constructing a shopping mall
            made calculating damages difficult to calculate with certainty, (b) risk of harm to
            business reputation, ( c) unavailability of funds elsewhere because of economy, and (d)
            significant public interest in having shopping mall built), Iv to appeal dismissed, 85 AD3d
            1656 (2011); Engelhardt v Fessia, 31 Misc 2d 127, 130 (Sup Ct, NY County 1961) (in
            the sale of the stock of a bus company, court issued mandatory injunction against
            defendants' interference with the government agency whose approval was necessary to
            close. Defendants' unilateral cancellation of the contract and letter to the government
            agency is the "antithesis" of "fully cooperating, promptly and expeditiously in the
            execution, filing presentation and prosecution of any appropriate application or
            applications for any consent." By enjoining defendants' interference, the court
            effectively forced defendant to close as soon as government approved of transaction);
            Second on Second Cafe, Inc. v Hing Sing Trading, Inc., 66 AD3d 255, 264 (1st Dept
            2009); The Holy Spirit Assn. for the Unification of World Christianity v Barreto, 2019 NY
            Slip Op. 31745(U) (Sup Ct, NY County 2019).
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                LLC
                Motion No. 002

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                      Accordingly, the test for a mandatory injunction is not whether the status quo is

            maintained or not, it is the trigger for a higher standard. 9 In the context where a

            mandatory injunction is sought for a breach of contract case, the meaning of 'status quo'

            causes confusion. (Id.) "A plaintiff's view of the status quo is the situation that would

            prevail if its version of the contract were performed. A defendant's view of the status

            quo is its continued failure to perform as the plaintiff desires. To a breach of contract

            defendant, any injunction requiring performance may seem mandatory." (Tom Doherty

            Assoc., Inc. v Saban Entertainment, Inc., 60 F3d 27, 34 [2d Cir 1995].) Indeed, this

            case is illustrative: Fleming wishes to maintain the status quo and delay the closing until

            JGRH lowers the price (which would also be a change in the status quo), while JGRH

            moves for a court order directing Fleming to close, maintaining that delay enables

            Fleming to use this court as an economic weapon (also a change in the status quo).

            "Determining whether the status quo is to be maintained or upset has led to distinctions

            that are "more semantic[] than substantive." (Tom Doherty Associates, Inc, 60 F3d at

            34 [citing International Union, United Mine Workers v Bagwell, 512 US 821, 836 (1994)

            9
              Likewise, the test is not whether an injunction will provide the movant with "all the relief
            sought" or "all the relief to which the movant may be entitled." (Tom Doherty Assoc.,
            Inc. v Saban Entertainment, Inc., 60 F3d 27, 34 [2d Cir 1995].) "[R]ead literally, they
            appear to describe any injunction where the final relief for the plaintiff would simply be a
            continuation of the preliminary relief." (Id.) "However, [t]his application of the rule
            seems hard to justify ... [because] the fact that the plaintiff would get no additional relief
            if he prevailed at the trial on the merits should not deprive him of his remedy." (Id.
            [citation omitted].) "The bottom line is that, if a preliminary injunction will make it difficult
            or impossible to render a meaningful remedy to a defendant who prevails on the merits
            at trial, then the plaintiff should have to meet the higher standard of substantial, or clear
            showing of, likelihood of success to obtain preliminary relief. Otherwise, there is no
            reason to impose a higher standard." (Id.)
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                Motion No. 002

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            (noting that "in borderline cases injunctive provisions containing essentially the same

            command can be phrased either in mandatory or prohibitory terms"].) 10 Rather, the

            court applies the traditional three-part test for a preliminary injunction, but the movant

            must do more to satisfy it for a mandatory injunction. See also The Holy Spirit Assn. for

            the Unification of World Christianity, 2019 NY Slip Op 31745[U][mandatory injunction

            has a higher threshold for likelihood of success]; Borini v Sixty Sutton Corp., 2019 NY

            Slip Op 32489[U], 4 [Sup Ct, New York County 2019] [plaintiff established higher

            standard of "clear right" to relief].) Therefore, for the reasons stated below this court is

            compelled to grant JRGH's motion for a mandatory injunction directing Fleming to close

            immediately at the contract price set forth in the SPA, without a concession in price,

            because JRGH has more than satisfied the traditional elements and established the

            additional requirements for a mandatory injunction: a clear right under the traditional

            criteria and extraordinary circumstances. ( Second on Second Cafe, Inc., 66 AD3d at

            264-65.) There is no breach for Fleming to rely on to delay the closing. This court is

            well aware of the extraordinary nature of a mandatory injunction, but that does not

            disqualify such relief.

            Likelihood of Success

                   To close this transaction, Fleming demands: (1) "a correction to the reserves"

            and (2) "an infusion of liquidity such that [JRG RE] ha[s] sufficient liquid assets to pay

            three months' worth of claim payments and operating expenses." (NYSCEF 94,

            10
              Here, plaintiff could rephrase its request as one for an order directing Fleming to stop
            breaching the SPA by not closing.
             651281/2024 JAMES RIVER GROUP HOLDINGS, LTD. vs. FLEMING INTERMEDIATE HOLDINGS    Page 7 of 24
             LLC
             Motion No. 002

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  NYSCEF DOC. NO. 110                                                                     RECEIVED NYSCEF: 04/06/2024

            Linden 11 aff ,I28; NYSCEF 32, Initial March 2, 2024 Fleming Demand Letter.) To

            establish likelihood of success, JRGH must show that the breaches alleged by Fleming

            as predicates for the above demands, are not breaches at all. For the reasons

            discussed below, based on the SPA, the court finds that the breaches Fleming asserts

            against JRGH are not breaches at all. Rather, in the absence of a breach by JRGH,

            Fleming is in breach.

            Alleged Breach: Reserves

                   Fleming asserts a violation of Section 6.1 (c)(i) 12 because JRGH allegedly set

            certain loss reserves lower than the outside actuarial recommends. However, reserves

            cannot be used to assert a breach under the SPA. (NYSCEF 67, SPA §8.14ii ["the

            Buyer acknowledges and agrees that no fact, condition, development or issue relating

            to the adequacy of insurance or reinsurance loss related reserves or accruals may be

            used, directly or indirectly, to demonstrate or support the breach of any representation,

            warranty, covenant or agreement contained in this Agreement."].)

                   Moreover, the SPA has no such requirement that reserves be maintained at

            103%, or any other percentage. Fleming could have, but did not, negotiate a certain

            level of reserves. Fleming cannot use this court to rewrite the SPA.

                   The parties are not without a forum to challenge reserves, but it is not this

            proceeding. The SPA provides a process by which the parties can revisit the Closing

            Purchase Price and revise it within 90 days after closing by presenting their objections

            in a report to an accountant. (Id. §1 .4.) iii The court rejects Fleming's attack on this

            11 Daniel Linden is Fleming's Head of Mergers and Acquisitions.           (NYSCEF 94, Linden
            aff,I1.)
            12
               JRGH's general representation that it has performed.
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             Motion No. 002

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            "true-up process" -- that it cannot correct a breach post-closing -- as simply incorrect

            and contrary to the plain language of the SPA. The SPA provides:

                   "(i) the review by and determinations of the Independent Accounting Firm
                   shall be limited to, and only to, the unresolved item or items contained in
                   the reports prepared and submitted to the Independent Accounting Firm
                   by the Seller and the Buyer, and (ii) the determinations by the
                   Independent Accounting Firm shall be based solely on (A) such reports
                   submitted by the Seller and the Buyer and the basis for the Seller's and
                   the Buyer's respective positions, the formula for the Closing Purchase
                   Price described in Section 1.3 hereof and (C) the Accounting Principles.
                   The parties acknowledge and agree that (i) the review by and
                   determinations of the Independent Accounting Firm shall be limited to, and
                   only to, the unresolved item or items contained in the reports prepared
                   and submitted to the Independent Accounting Firm by the Seller and the
                   Buyer, and (ii) the determinations by the Independent Accounting Firm
                   shall be based solely on (A) such reports submitted by the Seller and the
                   Buyer and the basis for the Seller's and the Buyer's respective positions,
                   (B) the formula for the Closing Purchase Price described in Section 1.3
                   hereof and (C) the Accounting Principles." (NYSCEF 67, SPA §1.4[d].)

            Contrary to Fleming's objection, there is no limitation on what the parties may dispute in

            the true-up process. Indeed, the true-up process is designed to give the parties the

            opportunity to challenge the calculation of the Closing Purchase Price by re-examining

            all that went into its calculation including the Closing Date Balance Sheet, Adjusted Net

            Worth which factors in reserves, all using the Accounting Principles which give effect to

            the Pre-closing Events, including the Pre-Closing Dividend. (Id.) The jurisdiction of the

            accountant is defined by the dispute set forth in each party's report to the accountant.

            (Id.) Contrary to Fleming's objection, the accountant's role is not merely mechanical.

            This contractual process should be respected.

                   In view of SPA §8.14 - Fleming's agreement not to challenge reserves -- there is

            no reason to proceed further to examine Fleming's purported reserve objection.

            Nevertheless, the court finds it necessary to address the factual underpinnings of

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            Fleming's alternate argument that the loss reserve decrease violates of Section 4.1 (f) 13

            which prohibits "any changes in ... reserving." (NYSCEF 67, SPA.) Fleming wants an

            increase in reserves which translates to JRGH adding $47 14 million to JRG Re's

            reserves as a condition to closing. (NYSCEF 94, Linden aff ,i15). Since reserves are

            booked as liabilities, Fleming's closing price to be paid to JRGH decreases the higher

            the reserves. (Id. ,I15.) Fleming insists that between 2019 and 2022, JRG Re kept

            reserves on average at 103.5% above the indicated reserve (Id. ,I7) and must continue

            to do so because the SPA provides that JRG Re shall continue to operate in the

            ordinary course of business. (NYSCEF 67, SPA §4.1.) 15 In support of its contention

            that JRG Re maintained a 103.5% reserve level, Fleming relies on JRGH's February 29,

            2024 earnings call about JRGH during which D'Orazio stated that reserves are in

            excess of internal actuaries and in line with outside actuaries. (NYSCEF 89, Earnings

            Call Tr at 11.) However, it is clear from the transcript that D'Orazio was speaking about

            JRGH and not JRG Re and certainly not JRG Re in the form Fleming was buying -

            13 It provides: "(f) make or adopt any changes in the actuarial, underwriting, risk

            retention, risk management, hedging, claims administration, reserving, accounting or
            investment policies, practices or principles of the Company (other than any change
            required by applicable Law, GAAP, Bermuda Accounting Practices or other applicable
            accounting principles (or the interpretation of any of the foregoing) or otherwise in the
            ordinary course of business)."
            14 Fleming calculates the $47 million by taking 11 % of the reserves on February 26,

            2024 which was $441 million. (NYSCEF 94, Linden aff ,i15). Before the Pre-closing
            Events, JRG Re's reserves were 11 % below the outside actuary's proposed reserve.
            (NYSCEF 81, Feb. 20, 2024 Independent Actuarial Report of December 2023.)
            15 It provides: "[T]he Seller shall, and shall cause the Company to, operate the Company

            in the ordinary course of business, and use reasonable best efforts to preserve
            substantially intact the current material business relationships and material goodwill of
            the Company with its policyholders and other customers, reinsurers, brokers, business
            associates and others having material business dealings with the Company's
            businesses."
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            without intercompany related reinsurance and the Pre-closing Dividend. (Id. at 1-16.)

            In addition, he was to speaking about 2019 to 2022. Fleming is not purchasing the

            stock in JRGH, a publicly traded company that made a strategic decision to exit the

            reinsurance business by selling its subsidiary JRG Re. (NYSCEF 38, □ 'Orazio aff ,I5.)

            Fleming's reserve theory admittedly looks at JRG Re as a whole prior to the Pre-Closing

            Dividend and other adjustments. (Id. ,I14; NYSCEF 85, Fleming's PowerPoint; 16

            NYSCEF __ , Argument Tr __ .) Indeed, Fleming explains that regulators and investors

            look at "the totality of a company's business." (NYSCEF 94, Linden ,I14.) While that

            may be true, to render this decision, the court is constrained by the SPA. According to

            the SPA, Fleming is not buying JRGH, but its slimmed down subsidiary JRG Re 17 after

            the Pre-Closing Dividend is paid and the intercompany reinsurance business is

            removed from JRG Re's balance sheet. Fleming's dramatic chart comparing JRG Re's

            reserves to the outside actuaries' estimate is inapplicable too because it includes all of

            JRG Re's intercompany business, not just the third-party business that Fleming is

            supposed to purchase. (NYSCEF 85, Chart at 2 [NYSCEF pagination 3/6].) Fleming is

            literally comparing apples and oranges which leads this court to conclude that Fleming's

            asserted breaches are contrived and contrary to the SPA.

                   JRGH has demonstrated that, as a matter of fact, the slimmed down version of

            JRG Re, which consists of third-party reinsurance only, has not maintained reserves at

            16 The parties attempted to resolve their differences on February 27, 2024.     (NYSCEF
            85, Fleming's Settlement PowerPoint; NYSCEF 86, JRGH's Settlement PowerPoint.)
            11
               Fleming's repeated statement that it is buying an entity not a line of business is true
            and not disputed, but the fact is that JRG Re is not the same entity that JRGH operated
            before it complied with the SPA. Presumably Fleming repeated this statement to
            counter this fact, but it is a distinction without a difference.
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             Motion No. 002

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            103.5%, and that since November 8, 2023, JRG Re's reserves are consistent with past

            practices.   (NYSCEF 38, D'Orazio aff ,I25; NYSCEF 86, JRGH's PowerPoint at 4.)

            Even though Fleming has had access to such data either through disclosures under the

            SPA or due diligence, Fleming has offered nothing of substance to contradict JRGH's

            proof. Rather, Fleming's recourse is the true-up process. Instead, however, Fleming

            has weaponized the ordinary course of business provision to contradict the other more

            detailed and relevant provisions of the SPA. Fleming also overlooks the SPA's changes

            to the entity Fleming is buying. The court rejects Fleming's increased reserve demand

            as nothing more than Fleming's impermissible demand for a lower purchase price after

            signing the SPA. The SPA and law are clear here regarding reserves: there is no

            breach.

            JRGH's Alleged Breaches: Liquidity

                   Fleming's demand for liquidity for "three months' worth of claim payments and

            operating expense," is also flawed. The SPA has no such requirement. Had Fleming

            wanted such a requirement, it could have negotiated for it. Rather, this alleged breach

            is nothing more than Fleming's impermissible demand for a lower purchase price.

                   Fleming asserts that JRGH violated its interim operating covenants by taking the

            Pre-Closing Dividend for more than it should have taken. Because JRGH was the

            steward of JRG Re during the long closing period, JRGH had certain obligations in the

            ordinary course of business. (NYSCEF 67, SPA §4.1 [x] 18 .) However, Fleming's

            18 It states: "(x) the Seller shall, and shall cause the Company to, operate the Company

            in the ordinary course of business, and use reasonable best efforts to preserve
            substantially intact the current material business relationships and material goodwill of
            the Company with its policyholders and other customers, reinsurers, brokers, business
             651281/2024 JAMES RIVER GROUP HOLDINGS, LTD. vs. FLEMING INTERMEDIATE HOLDINGS    Page 12 of 24
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             Motion No. 002

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            argument overlooks that the interim operating covenants are subject to certain

            exceptions, including for actions expressly contemplated by the SPA itself, e.g. the Pre-

            closing Dividend. (Id. §4.1 [y][a-v].)

                   Fleming's liquidity theory also depends on its misreading of Schedule 8.1 (b)(1 ),

            Accounting Principles. Fleming asserts that JRGH's withdrawal of the Pre-Closing

            Dividend Amount of $139 million, improperly usurped JRG Re's liquidity because JRGH

            took more than it should have taken. (NYSCEF 94, Linden aff ,I,I19-20.) However,

            Fleming's argument that JRGH was allowed to take up to $139 million as the Pre-

            Closing Dividend is undermined by the definition of "Pre-closing Dividend Amount"

            which states "'Pre-Closing Dividend Amount' means $139,000,000." (NYSCEF 67, SPA

            §8.1 [b].) Further, Fleming's argument relies on a snippet of Schedule 8.1 (b)(1 ), which

            states: "the Pre-Closing Dividend in an amount equal to the greater of (a) the Pre-

            Closing Dividend actually paid pursuant to Section 4.12 of the Agreement and (b) the

            PreClosing Dividend Amount (clauses (i) through (iv), collectively, the 'Pre-Closing

            Events')." (Id., Schedule 8.1 [b][1][B].) Fleming insists that the term "greater of' means

            that JRGH could be paid up to $139 million. However, when read in context, this

            provision does not modify the definition of Pre-Closing Dividend but directs how it is to

            be reported. Schedule 8.1 (b)(1) is a set of instructions on how the parties will prepare

            the various closing statements consistently during this months-long complicated

            process. (Id., Schedule 8.1 [b][1].) It is a schedule attached to the SPA about

            accounting, and thus, not the place to modify the clearly defined term "Pre-Closing

            associates and others having material business dealings with the Company's
            businesses."
             651281/2024 JAMES RIVER GROUP HOLDINGS, LTD. vs. FLEMING INTERMEDIATE HOLDINGS    Page 13 of 24
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             Motion No. 002

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            Dividend." Rather, paragraph B of Schedule 8.1(b)(1) instructs that the balance sheets

            will be prepared after giving effect to the Pre-Closing Events: (i) terminated

            intercompany transactions (§4.1 0[a]); (ii) settled intercompany loans, payables,

            receivables etc. (§4.1 0[b]); (iii) assigned certain contracts (§4.19); and (iv) the Pre-

            Closing Dividend of $139 million (§4.12) at the amount stated in §8.1(b). (NYSCEF 67,

            Accounting Principles, Schedule 8.1 (b)(1 ), Specified Policies B (i to iv).)

                   Fleming also objects to an intercompany receivable from JRG Re to JRGH in

            December 2023, as a breach of Section 4.1 (h)'s prohibition against "mak[ing] any

            material loans, advances ... to ... any other Person." Though Fleming knew about this

            transaction in December 2023, it did not object until February 27, 2024 which

            undermines this objection. (NYSCEF 86, February 27, 2024 Slide Deck; NYSCEF 38,

            D'Orazio aff ,T19.) However, this transaction was not mentioned in Fleming's

            communications preceding the March 1, 2024 failure to close. (NYSCEF 44, February

            29, 2024 Letter; NYSCEF 46, Fleming's March 2, 2024 Demand Letter.) Moreover, in

            the slide deck, the only place that Fleming mentions it, Fleming seems to take issue

            with how JRGH categorized it, not the transaction itself. (NYSCEF 85, February 27,

            2024 ["Cash Dividend made in December, but classified as increase in lntercompany

            Receivable."]) In any case, it is part of the Pre-Closing Dividend which is permissible

            under the SPA. (NYSCEF 94, Linden aff ,T16; NYSCEF 38, D'Orazio ,T,T17, 18.) Again,

            the court rejects Fleming's argument that JRGH could take a dividend up to the stated

            amount when the SPA very clearly states in §8.1(b) the amount: $139 million.

                   Finally, Fleming objects to additional collateral that JRGH put up for a

            reinsurance counterparty which allegedly impermissibly depleted liquidity. Neither party

             651281/2024 JAMES RIVER GROUP HOLDINGS, LTD. vs. FLEMING INTERMEDIATE HOLDINGS    Page 14 of 24
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            states when this transfer was made. Further the parties dispute the reason for the

            requirement. Whatever the reason, however, the SPA required JRGH to comply

            because it was to "use reasonable best efforts to preserve substantially intact the

            current material business relationships" of JRG Re including JRG Re's policyholders

            and other customers." (NYSCEF 3, SPA§ 4.1 [x].) Therefore, Fleming's demand for 3

            months of liquidity appears to be nothing more than an attempt to impermissibly lower

            the purchase price of JRG Re asserting a breach where there is no such breach.

                   While actual proof of likelihood of success is not required for a preliminary

            injunction, here there is actual proof of likelihood of success because the issue here is a

            matter of contract interpretation only. 19 A "written agreement that is complete, clear and

            unambiguous on its face must be enforced according to the plain meaning of its terms."

            (Greenfield v Phil/es Records, 98 NY2d 562, 569 [2002] [citations omitted].) JRGH has

            established likelihood of success by eviscerating Fleming's contrived objections.

            Accordingly, for the reasons stated above, the court finds that plaintiff has met the

            heightened pleading standard of "a clear or substantial likelihood of success on the

            merits," applicable to a mandatory injunction. (N. Y. Civil Liberties Union v. N. Y.C.

            Transit Auth., 684 F3d 286, 294 [2d Cir 2012] [internal quotation marks omitted].)

            Irreparable Harm

                   In §8.4,iv the SPA provides for specific performance because the parties agree

            that there is irreparable harm if the contract is breached, and damages would be difficult

            to calculate. Courts enforce such provisions when negotiated by sophisticated counsel,

            19 The court notes the parties do not assert that the SPA is ambiguous and any factual

            disputes raised here are immaterial.
             651281/2024 JAMES RIVER GROUP HOLDINGS, LTD. vs. FLEMING INTERMEDIATE HOLDINGS    Page 15 of 24
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             Motion No. 002

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            as is true here. (Bank of Am., N.A. v PSW NYC LLC, 29 Misc 3d 1216[A] *12 [Sup Ct,

            NY County 201 O], quoting Roswell Capital Partners LLC v Alternative Constr. Tech.,

            2009 WL 222348, *17, 2009 US Dist LEXIS 7690 [SD NY 2009] ["terms throughout the

            contracts at issue specify that a default constitutes irreparable harm entitling Plaintiffs to

            injunctive relief to cure breaches," which, "(w)hile not dispositive, (may be viewed by)

            courts ... as evidence of an admission that irreparable harm has occurred"]; see also

            Level 4 Yoga, LLC v CorePower Yoga, LLC, CV 2020-0249-JRS, 2022 WL 601862, at

            *30 [Del Ch Mar. 1, 2022], judgment entered, [Del Ch 2022], aff'd, 287 A3d 226 [Del

            2022] ["(T)his court has not hesitated to order specific performance in cases of this

            nature [concerning an asset purchase agreement], particularly where sophisticated

            parties represented by sophisticated counsel stipulate that specific performance would

            be an appropriate remedy in the event of breach" (internal quotation marks and citation

            omitted)]; Snow Phipps Group, LLC v Kcake Acquisition, Inc., CV 2020-0282-KSJM,

            2021 WL 1714202 [Del Ch Apr. 30, 2021] [court ordered specific performance of SPA to

            purchase a cake decorating company where parties agreed that any breach causes

            irreparable harm].) The court is inclined to accept the parties' agreement in the SPA

            where the parties crafted the SPA to prevent this precise situation with SPA §8.4 and

            §1.4.

                    In any case, JRGH has established a clear right to a mandatory injunction

            because of the severe irreparable harm it is enduring. (Borini, 2019 NY Slip Op

            32489[U], 4 [Plaintiff satisfied higher standard of 'clear right' to relief because of severe

            irreparable harm in the name of maintaining the status quo while the unused apartment

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             Motion No. 002

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            sat vacant, undermining of the value of the property, plaintiffs with their child lived in

            temporary housing, and "with no end in sight."] [citation omitted].)

                   JRGH and JRG Re have suffered and will continue to suffer reputational harm

            among its stakeholders and potential purchasers if Fleming refuses to close and JRGH

            continues to run JRG Re with severe economic consequences that are impossible to

            calculate. (NYSCEF 38, D'Orazio aff ,I27-40.) JRGH is a publicly traded company, and

            thus, publicly announced this transaction as part of a long-term strategic plan to focus

            on core business. (Id. ,i,i4, 5.) JRGH's share price immediately dropped to an all-time

            low when the news of Fleming's refusal to close became public. (Id. ,i 37.) Indeed, an

            analyst opined that Fleming's refusal to close potentially impacted JRGH's core value,

            further interferes with JRG Re's employees and operations, and distracts JRGH from its

            strategic plan while it maintains JRG Re. (NYSCEF 47, Compass Report at 1.)

            Accordingly, tarnishing the reputation of JRG Re by implying some flaw sufficient for

            Fleming to walk away from this deal will impact JRGH's ability to sell JRG Re consistent

            with its strategy. (NYSCEF 38, D'Orazio aff ,i 28, 29; see Matter of Riccelli Enters.,

            Inc. v State of NY Workers' Compensation Bd., 117 AD3d 1438, 1440 [concluding that

            "the loss of business" caused by the defendant's actions was difficult or impossible to

            quantify and thus constituted irreparable harm], reargue denied, 119 AD3d 1388 [4 th

            Dept 2014]; In re IBP, Inc. Shareholders Litig., 789 A2d 14, 23 [Del Ch 2001] [applying

            New York law to order specific performance of a merger agreement following the

            buyer's refusal to close because closure was "the only method by which to adequately

            redress the harm threatened to (plaintiff seller) and its stockholders"]); Destiny USA

             651281/2024 JAMES RIVER GROUP HOLDINGS, LTD. vs. FLEMING INTERMEDIATE HOLDINGS    Page 17 of 24
             LLC
             Motion No. 002

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            Holdings, LLC, 69 AD3d at 222 ["Harm to business reputation is harm for which money

            damages are insufficient and for which injunctive relief may be appropriate."].)

                   On March 1, 2024, because of Fleming's failure to close, JRGH became the

            unexpected operator of JRG Re, a company it had prepared for four months to deliver

            to Fleming. During those four months, JRGH completed transactions in anticipation of

            closing that it cannot easily unwind, if at all, because they involve transactions with

            lenders and other unrelated entities. (NYSCEF 38, □ 'Orazio aff         ,m 34, 35.) JRGH's
            new role as JRG Re's operator after March 1, 2024 has consequences for JRGH which

            must now unexpectedly provide resources to JRG Re. (Id. ,i 31, 33.) JRG Re's

            employees were expected to be employed by Fleming or decided to leave, but now

            JRGH needs to retain those employees, but some will never return. (Id. ,I28.) JRG Re

            made long term compensation decisions consistent with the expectation of selling JRG

            Re to Fleming which affects its relationships with and reputation among employees. (Id.

           ,I33.) JRGH's Bermudan regulator approved the SPA transaction pursuant to which

            JRGH should not be operating JRG Re now. (Id. ,i,i9, 27, 31.) Finally, JRG RE's

            projects were naturally put on hold awaiting its new owner-Fleming-with untold

            economic consequences. (Id. ,I38.)

                   Therefore, JRGH has established a clear right to closing because the parties

            agreed in the SPA that a breach causes irreparable harm and JRGH has shown

            enduring undisputed irreparable harm, that is factually undisputed.

            Balance of Equities

                   JRGH must show that not closing, "is more burdensome [to the plaintiff] than the

            harm caused to defendant through imposition of the injunction."' (McLaughlin, Piven,

             651281/2024 JAMES RIVER GROUP HOLDINGS, LTD. vs. FLEMING INTERMEDIATE HOLDINGS    Page 18 of 24
             LLC
             Motion No. 002

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            VogelvNolan & Co., 114AD2d 165,174 [2d Dept], lvdenied67 NY2d 606 [1986].) As

            discussed above, JRGH will continue to suffer irreparable harm without an injunction.

            Meanwhile, there is no harm to Fleming which insists that its intention is to buy JRG Re

            and not destroy the deal. Likewise, there is no harm from closing a deal on the terms to

            which Fleming agreed where, as demonstrated above, its counterparty JRGH has not

            breached. Fleming's remedy, should it continue to object to JRGH's liquidity or

            reserves, is to follow the procedures set forth in the SPA, such as the true-up

            procedure.

                    In addition to the parties' interests, the court must also weigh "the interests of the

            general public." (De Pina v Educational Testing Serv., 31 AD2d 744, 745 [2d Dept

            1969]; see Seitzman v Hudson Riv. Assoc., 126 AD2d 211, 214-215 [1 st Dept 1987].)

            For example, in Destiny USA Holdings, LLC, 69 AD3d 212, the Court held that granting

            a mandatory inunction favored the public interest where the Court's order result in the

            continued construction of a shopping mall. Here, the court finds a public interest in an

            insurance company's continued viability. Moreover, JRGH is a publicly traded company

            with shareholders, employees, analysts, rating agencies and other stakeholders that

            cannot wait for the closing to make critical decisions, such as how to now rate JRG RE,

            where the alleged breaches are not breaches at all. (NYSCEF 38, □ 'Orazio aff ,I27.)

            Indeed, Fleming is well aware of the consequences on the AM Best rating, the longer

            the closing is delayed. (NYSCEF 94, Linden aff ,I24.) Therefore, the balance of the

            equities favor JRGH.

                   Accordingly, it is

             651281/2024 JAMES RIVER GROUP HOLDINGS, LTD. vs. FLEMING INTERMEDIATE HOLDINGS    Page 19 of 24
             LLC
             Motion No. 002

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                    ORDERED that plaintiffs motion for a preliminary injunction is granted and the

            parties are directed to close within 10 days of the date of this order. The parties shall

            meet and confer and contact the court if they are not able to resolve the logistics.

                     4/6/2024
                      DATE                                                      ANDREA MASLEY, J.S.C.
             CHECK ONE:                  CASE DISPOSED                  NON-FINAL DISPOSITION

                                         GRANTED         □ DENIED       GRANTED IN PART          □ OTHER
             APPLICATION:                SETTLE ORDER                   SUBMIT ORDER

             CHECK IF APPROPRIATE:       INCLUDES TRANSFER/REASSIGN     FIDUCIARY APPOINTMENT    □ REFERENCE

                i 4.12 Pre-Closing Dividend. The Seller shall use reasonable best efforts (including
               making any Governmental Filings) to cause the Company to declare and pay, at
               least three (3) Business Days prior to the Closing Date, a payment (whether as a
               dividend or return of capital or surplus, in accordance with applicable Law) to the
               Seller in cash or in specie (or both) (the "PreClosing Dividend") in an amount equal
               to the Pre-Closing Dividend Amount. The Pre-Closing Dividend shall be paid to the
               Seller (a) first, by the extinguishment of the lntercompany Receivable, which shall be
               valued as of the date of extinguishment and (b) second, from unrestricted cash or
               other unencumbered assets selected by the Seller from Schedule 4.12; provided,
               that any assets included in the Pre-Closing Dividend that are not the lntercompany
               Receivable or unrestricted cash shall consist of (i) first, all assets set forth on
               Schedule 4.12 under the Sector heading of "Preferred" and other assets listed under
               the Sector heading of "Corporate" with a Ratings Analysis of "BBB" or lower, (ii)
               second, if the aggregate amount of the assets in clause (i) together with such
               unrestricted cash and the lntercompany Receivable is less than the Pre-Closing
               Dividend Amount, then any other assets selected by the Seller from the other assets
               listed on Schedule 4.12, provided that the value of the assets in clauses (i) and (ii)
               shall be determined in accordance with NEAM's current pricing methodology, and
               (iii) third, any other assets as may be mutually agreed by the Buyer and the Seller
               prior to effecting the PreClosing Dividend (provided that the parties shall cooperate
               in good faith and act reasonably in agreeing on any such assets contemplated by
               this clause (iii)).

               ii "8.14 Reserves. Notwithstanding anything to the contrary contained herein, none
                of the Seller nor any of its Affiliates makes any representation or warranty with
                respect to, and nothing contained in this Agreement or any other agreement,
                document or instrument delivered in connection with the transactions contemplated
                hereby is intended or shall be construed to be a representation or warranty (express
                or implied) of the Seller or any of its Affiliates, for any purpose of this Agreement or
                any other agreement, document or instrument delivered in connection with the
                transactions contemplated hereby, with respect to: (a) the adequacy or sufficiency of
             651281/2024 JAMES RIVER GROUP HOLDINGS, LTD. vs. FLEMING INTERMEDIATE HOLDINGS      Page 20 of 24
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             Motion No. 002

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               any of the reserves with respect to the Business, (b) the future profitability of the
               Business or (c) the effect of the adequacy or sufficiency of such reserves on any
               "line item" or asset, liability or equity amount. Furthermore, the Buyer acknowledges
               and agrees that no fact, condition, development or issue relating to the adequacy of
               insurance or reinsurance loss related reserves or accruals may be used, directly or
               indirectly, to demonstrate or support the breach of any representation, warranty,
               covenant or agreement contained in this Agreement or any other agreement,
               document or instrument delivered in connection with the transactions contemplated
               hereby."

               m 1.4 Post-Closing Purchase Price True-Up. (a) No later than ninety (90) days
                 following the Closing Date, the Buyer shall cause to be prepared and delivered to
                 the Seller a statement (the "Closing Statement") consisting of (i) an unaudited
                 balance sheet of the Company, prepared in accordance with the Accounting
                 Principles, as of immediately prior to the Closing (for the avoidance of doubt, after
                 giving effect to the Pre-Closing Events) (the "Closing Date Balance Sheet"), (ii) a
                 calculation of the amount of the Adjusted Net Worth as of immediately prior to the
                 Closing, but after giving effect to the PreClosing Events, derived from the Closing
                 Date Balance Sheet and (iii) a calculation of the Closing Purchase Price in
                 accordance with the third sentence of Section 1.3. Items (i) through (iii) of the
                 Closing Statement shall be prepared substantially in the form of the Estimated
                 Closing Statement. The Closing Statement will be accompanied by reasonable
                 information and detail to support the calculation of the amounts set forth thereon. (b)
                 The Seller shall have forty-five (45) days from the date on which the Closing
                 Statement is delivered to the Seller to review the Closing Statement (including the
                 Closing Date Balance Sheet and the calculation of Adjusted Net Worth) (such period
                 of time, the "Review Period"). During the Review Period, the Buyer shall cooperate
                with the Seller and its Representatives in their review of the Closing Statement, shall
                 provide, or cause the Company to provide, to the Seller and its Representatives,
                 reasonable access, upon reasonable notice during normal business hours, to all
                 books, records and working papers of the Company to the extent reasonably related
                 or relevant to preparing and analyzing the Closing Statement, shall request, or
                 cause the Company to request, that the Company's independent accountants and
                 auditors provide the Seller and its Representatives reasonable access to all their
                working papers relevant to the Closing Statement (subject to the Seller and its
                 Representatives entering into any customary undertakings relating to such access to
                working papers in form and substance reasonably acceptable to auditors and
                 accountants), and shall make available, or cause the Company to make available,
                 upon reasonable notice during normal business hours, the individuals then in its or
                 their employ or the employ of their Affiliates, if any, responsible for and
                 knowledgeable about the information used in, and the preparation of, the Closing
                 Statement, in order to respond to the reasonable inquiries of the Seller. The Closing
                 Statement (including the Closing Date Balance Sheet and the calculation of Adjusted
                 Net Worth) shall become final and binding upon the parties at 5:00 p.m. New York
                 City time on the forty-fifth (45th) day of the Review Period, unless the Seller gives
                written notice of its disagreement with the Closing Statement (such written notice, a
             651 '21'Wffie'e o'f~fs~~§~l'lpt@1ffi:e, 191fy~- &~f'J~ffiJFim~w tl§~~NA~y Not~Gf of 24
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             Motion No. 002

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               Disagreement shall specify in reasonable detail the nature of any disagreement so
               asserted. If a Notice of Disagreement is received by the Buyer in a timely manner,
               then the Closing Statement (including the Closing Date Balance Sheet and the
               calculation of Adjusted Net Worth) (as revised in accordance with this sentence)
               shall become final and binding upon the Seller and the Buyer on the earlier of (i) the
               date the Seller and the Buyer resolve in writing any differences they have with
               respect to the matters specified in the Notice of Disagreement or (ii) the date any
               disputed matters are finally resolved in writing by the Independent Accounting Firm.
               (c) During the fifteen ( 15)-day period following the delivery of a Notice of
               Disagreement (such period of time, the "Resolution Period"), the Seller and the
               Buyer shall seek in good faith to resolve in writing any differences that they may
               have with respect to the matters specified in the Notice of Disagreement. During the
               Resolution Period, each party shall use its reasonable best efforts to provide to the
               other party all information and reasonable access to employees as such other party
               shall reasonably request in connection with review of the Closing Statement or the
               Notice of Disagreement, as the case may be, including all work papers of the
               accountants who audited, compiled or reviewed such statements or notices (subject
               to the other party and its Representatives entering into any customary undertakings
               relating to such access to working papers in form and substance reasonably
               acceptable to auditors and accountants), and shall cooperate in good faith with such
               other party to arrive at a final determination of the Closing Statement. (d) In the
               event that the Seller and the Buyer are unable to agree on any item or items shown
               or reflected in the Closing Statement within the Resolution Period, each of the Seller
               and the Buyer shall prepare separate written reports of such unresolved item or
               items and deliver such reports to the Independent Accounting Firm within fifteen (15)
               days after the expiration of the Resolution Period. The parties shall use their
               respective reasonable best efforts to cause the Independent Accounting Firm to, as
               soon as practicable and in any event within fifteen (15) days after receiving such
               written reports, determine the manner in which such item or items shall be treated in
               the Closing Statement; provided, however, that the dollar amount of each item in
               dispute shall be determined within the range of dollar amounts proposed by the
               Seller, on the one hand, and the Buyer, on the other hand. The parties acknowledge
               and agree that (i) the review by and determinations of the Independent Accounting
               Firm shall be limited to, and only to, the unresolved item or items contained in the
               reports prepared and submitted to the Independent Accounting Firm by the Seller
               and the Buyer, and (ii) the determinations by the Independent Accounting Firm shall
               be based solely on (A) such reports submitted by the Seller and the Buyer and the
               basis for the Seller's and the Buyer's respective positions, (B) the formula for the
               Closing Purchase Price described in Section 1.3 hereof and (C) the Accounting
               Principles. The Seller and the Buyer agree to enter into an engagement letter with
               the Independent Accounting Firm containing customary terms and conditions for this
               type of engagement. The parties shall use their reasonable best efforts to cooperate
               with and provide information and documentation, including work papers, to assist the
               Independent Accounting Firm. Any such information or documentation provided by
               any party to the Independent Accounting Firm shall be concurrently delivered to the
               other oartv, subiect, in the case of the work papers of the accountants and auditors
             651281/2024 JAIVIES RIVER GROUP HOLDINGS, LTD. vs. FLEMING INTERMEDIATE HOLDINGS    Page 22 of 24
             LLC
             Motion No. 002

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               for the providing party, to such other party entering into a customary release
               agreement with respect thereto. Neither party shall disclose to the Independent
               Accounting Firm, and the Independent Accounting Firm shall not consider for any
               purposes, any settlement discussions or settlement offers made by either party with
               respect to any objection under this Section 1.4. The determinations by the
               Independent Accounting Firm as to the item or items in dispute shall be in writing
               and shall be final, binding and conclusive for all purposes of determining the
               Purchase Price and shall be an expert determination under applicable Law
               governing expert determination and appraisal proceedings. Either party hereto may
               petition the New York courts to reduce such decision to judgment. The fees, costs
               and expenses of retaining the Independent Accounting Firm shall be borne fifty
               percent (50%) by the Seller and fifty percent (50%) by the Buyer. Following the
               resolution of all disputed items (or, if there is no dispute, promptly after the parties
               reach agreement on the Closing Statement), the Buyer shall revise the Closing
               Statement (including the Closing Date Balance Sheet, the calculation of Adjusted
               Net Worth and the calculation of the Closing Purchase Price in accordance with the
               third sentence of Section 1.3) to reflect the resolution of any disputed items (as so
               revised, the "Final Closing Statement" and the balance sheet included therein, the
               "Final Closing Date Balance Sheet") and shall deliver a copy thereof to the Seller.
               The Adjusted Net Worth as of immediately prior to the Closing, but after giving effect
               to the Pre-Closing Events, reflected in the applicable Final Closing Date Balance
               Sheet shall be referred to as the "Final Closing Adjusted Net Worth". (e) Effective
               upon the end of the Review Period (if a timely Notice of Disagreement is not
               delivered), or upon the resolution of all matters set forth in the Notice of
               Disagreement (if a timely Notice of Disagreement is delivered) either by mutual
               agreement of the parties or by the Independent Accounting Firm, the Closing
               Purchase Price shall be subject to adjustment as follows: (i) if the Final Closing
               Adjusted Net Worth is less than the Estimated Closing Adjusted Net Worth, the
               Closing Purchase Price shall be reduced by the amount equal to the amount by
               which the Final Closing Adjusted Net Worth is less than the Estimated Closing
               Adjusted Net Worth, which amount shall be paid by the Seller to the Buyer in
               accordance with the provisions of this Section 1.4(e) and (ii) if the Final Closing
               Adjusted Net Worth is greater than the Estimated Closing Adjusted Net Worth, the
               Closing Purchase Price shall be increased by the amount equal to the amount by
               which the Final Closing Adjusted Net Worth is greater than the Estimated Closing
               Adjusted Net Worth, which amount shall be paid by the Buyer to the Seller in
               accordance with the provisions of this Section 1.4(e). With respect to the adjustment
               to the Closing Purchase Price (A) in clause (i) of this Section 1.4(e), the Seller shall
               pay (or cause to be paid) to the Buyer by wire transfer of immediately available
               funds, within five (5) Business Days following the delivery of the Final Closing
               Statement, together with interest thereon compounded daily at the Interest Rate as
               in effect on the date of payment, calculated on the basis of the actual number of
               days elapsed divided by three hundred and sixty-five (365), from the Closing Date to
               the date of payment, to an account or accounts designated by the Buyer in writing
               and (B) in clause (ii) of this Section 1.4(e), the Buyer shall pay to the Seller by wire
               transfer of immediately available funds, within five (5) Business Days followina the
             651281/2024 JAMES RIVER GROCJP HOLDINGS, LTD. vs. FLEMING INTERMEDIATE HOLDINGS    Page 2!'of 24
             LLC
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  NYSCEF DOC. NO. 110                                                                     RECEIVED NYSCEF: 04/06/2024

               delivery of the Final Closing Statement, together with interest thereon compounded
               daily at the Interest Rate as in effect on the date of payment, calculated on the basis
               of the actual number of days elapsed divided by three hundred and sixty-five (365),
               from the Closing Date to the date of payment, to an account or accounts designated
               by the Seller in writing. To the extent permitted under applicable Tax law, the parties
               agree to treat any payment made under this Section 1.4(e) as an adjustment to the
               Purchase Price for all federal, state, local and foreign Tax purposes, and the parties
               agree to, and shall cause their respective Affiliates to, file their Tax Returns
               accordingly. (f) Following the Closing, neither party shall take any action, and the
               Buyer shall cause the Company not to take any action, with respect to the
               accounting books and records on which the Closing Statement is to be based that
               would obstruct or prevent the preparation of the Closing Statement and the
               determination of Final Closing Adjusted Net Worth as provided in this Section 1.4."

               iv "8.4 Specific Performance. Subject to the agreement of the parties in Section 7.3
               regarding the limited circumstances in which the Reverse Termination Fee shall
               constitute liquidated damages, each of the parties acknowledges and agrees that
               the breach of this Agreement may cause irreparable damage to the other party and
               that such other party will not have an adequate remedy at law. Therefore, without
               the necessity of posting bond or other undertaking, the parties shall be entitled to
               seek an injunction or injunctions to prevent breaches of this Agreement and to
               enforce specifically the terms and provisions of this Agreement and the obligations
               of the parties hereunder, including the Seller's obligation to sell the Shares to the
               Buyer (or one or more of its designees), and the Buyer's obligations to consummate
               the transactions contemplated by this Agreement and to pay the Purchase Price and
               the Additional Consideration or, if applicable, the Buyer's obligations to pay the
               Reverse Termination Fee. In addition, prior to the Closing, the parties may bring any
               Action to enforce specifically the terms and provisions of this Agreement and the
               obligations of the parties hereunder (including the Seller's obligation to sell the
               Shares to the Buyer, and the Buyer's obligations to consummate the transactions
               contemplated by this Agreement and to pay the Purchase Price and the Additional
               Consideration or, if applicable, the Buyer's obligations to pay the Reverse
               Termination Fee) in, and the parties hereby irrevocably and unconditionally submit to
               the non-exclusive jurisdiction of, the United States District Court for the Southern
               District of New York or any New York state court sitting in New York County. The
               rights and remedies provided under this Section 8.4 shall be cumulative and not
               exclusive of the rights or remedies of the parties under Section 8.5. In the event that
               any action or proceeding is brought in equity to enforce the provisions of this
               Agreement, no party shall allege, and each party hereby waives the defense or
               counterclaim, that there is an adequate remedy at law."

             651281/2024 JAMES RIVER GROUP HOLDINGS, LTD. vs. FLEMING INTERMEDIATE HOLDINGS    Page 24 of 24
             LLC
             Motion No. 002

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