EXHIBIT 10.6
ASSUMPTION OF LIABILITIES AGREEMENT
THIS ASSUMPTION OF LIABILITIES AGREEMENT (this "Assumption of
Liabilities Agreement") is made as of this date of September 2, 2003 by and
between Landmark American Insurance Company, an insurance company organized and
existing under the laws of the State of Oklahoma ("Landmark") and Royal
Indemnity Company, an insurance company organized under the laws of the State of
Delaware ("RIC"). All capitalized terms used but not defined herein shall have
the meaning ascribed to them in that certain Stock Purchase Agreement, dated as
of June 6, 2003, by and between Guaranty National Insurance Company, an
insurance company organized and existing under the laws of the State of Colorado
("Guaranty National") and Alleghany Insurance Holdings LLC, a Delaware limited
liability company ("AIHL") (the "Landmark Stock Purchase Agreement").
WHEREAS, RIC is an affiliate of Guaranty National;
WHEREAS, pursuant to an Assignment and Assumption Agreement, dated as
of July 1, 2003, by and between AIHL and Underwriters Reinsurance Company, a
property and casualty insurance company organized under the laws of the state of
New Hampshire, AIHL assigned, and Underwriters Reinsurance Company assumed, all
of the rights and obligations of AIHL under the Landmark Stock Purchase
Agreement;
WHEREAS, effective as of August 18, 2003, the name of Underwriters
Reinsurance Company was changed to RSUI Indemnity Company;
WHEREAS, pursuant to the Landmark Stock Purchase Agreement, RIC and
Landmark are entering into this Assumption of Liabilities Agreement, pursuant to
which RIC is assuming all of the liabilities and obligations of Landmark as of
the Closing Date, other than certain excluded liabilities;
WHEREAS, in connection with the transactions contemplated by the
Landmark Stock Purchase Agreement and the other Landmark Ancillary Documents and
pursuant thereto, among other things, RIC has agreed to execute this Assumption
of Liabilities Agreement and to pay, perform and discharge all of the Assumed
Liabilities (as such term is defined below) as partial consideration for the
contemplated transactions; and
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged:
1. Assumption of Liabilities. Subject to the terms and conditions of this
Assumption of Liabilities Agreement, RIC hereby agrees to assume, pay, perform
and discharge all debts, obligations and liabilities, contracts and obligations
of every kind,
character or description of Landmark, whether known or unknown, accrued,
absolute, contingent or otherwise existing as of the Closing Date, other than
those liabilities and obligations arising out of, or relating to: (i) the
Reinsured Liabilities as such term is defined in the RIC (Landmark) Quota Share
Reinsurance Agreement, dated______, 2003, between RIC and Landmark, and (ii) the
Company Insurance Contracts, as such term is defined in the Landmark Stock
Purchase Agreement and (iii) Excluded Liabilities as such term is defined in the
Landmark Quota Share Reinsurance Agreement, dated July 1, 2003, between Landmark
and Underwriters Reinsurance Company (now known as RSUI Indemnity Company) (all
of such assumed liabilities, after exclusion of the liabilities described in the
preceding clauses (i), (ii) and (iii), being hereinafter referred to as the
"Assumed Liabilities");
2. Indemnification. Without limitation of the indemnification obligations
of GNIC and affiliates of GNIC under the Landmark Stock Purchase Agreement and
the Landmark Ancillary Agreements (as defined in the Landmark Stock Purchase
Agreement), RIC hereby agrees to indemnify and hold Landmark harmless from and
against any and all obligations, costs, expenses, interests or overdue charges,
fees, claims, damages, judgments, penalties, deficiencies, taxes or liabilities
of whatever kind or nature imposed on, sustained or incurred by Landmark, to the
extent they arise out of or relate to the Assumed Liabilities, including,
without limitation, attorneys', accountants' and other investigatory fees and
out-of-pocket expenses, actually expended or incurred by Landmark (which costs
shall not include any expenses associated with salaries or overhead related to
employees of Landmark).
3. Certain Rights. This assumption by RIC of the Assumed Liabilities shall
not be construed to defeat, impair or limit in any way any rights or remedies of
RIC to contest or dispute the validity or amount thereof. Nothing contained in
this Assumption of Liabilities Agreement shall require RIC to pay, perform or
discharge any liability, debt or obligation so long as RIC in good faith
contests or causes to be contested the amount or validity thereof.
4. Further Assurances. Upon request from Landmark from time to time, RIC
shall execute and deliver all documents and do all other reasonable acts that
may be reasonably necessary to carry out and effectuate the intent and purpose
of this Assumption of Liabilities Agreement. Upon request from RIC time to time,
Landmark shall execute and deliver all documents and do all other reasonable
acts that may be reasonably necessary to carry out and effectuate the intent and
purposes of this Assumption of Liabilities Agreement.
5. Power of Attorney. Landmark on behalf of itself and its successors,
hereby irrevocably appoints RIC and its designated officers and directors as the
true and lawful attorney of Landmark to handle, satisfy and/or dispute the
Assumed Liabilities as well as to execute, acknowledge and deliver, or cause to
be executed, acknowledged and delivered, such assurances or documents, and to
promptly perform, or cause to be performed, such further acts or deeds, which,
in the reasonable discretion of said attorney may be necessary, desirable or
expedient for the purpose of transferring to RIC the
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Assumed Liabilities. Such power of attorney, being coupled with an interest,
shall not be revoked by the dissolution of Landmark and may be exercised in the
name and on behalf of RIC.
6. Amendment, Modification and Waiver. This Assumption of Liabilities
Agreement may not be amended, modified or waived except by an instrument or
instruments in writing signed and delivered on behalf of each of the parties
hereto. No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
7. Entire Agreement. This Assumption of Liabilities Agreement (together
with the other agreements, documents and instruments delivered in connection
herewith), the Landmark Stock Purchase Agreement, and the Landmark Ancillary
Agreements constitute the entire agreement among the parties with respect to the
subject matter hereof and thereof and supersede all other prior agreements and
understandings, both written and verbal, among the parties or any of them with
respect to the subject matter hereof.
8. Governing Law. This Assumption of Liabilities Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof.
9. Severability. Any term or provision of this Assumption of Liabilities
Agreement which is invalid or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Assumption of Liabilities Agreement or affecting the
validity or enforceability of any of the terms or provisions of this Assumption
of Liabilities Agreement in any other jurisdiction. If any provision of this
Assumption of Liabilities Agreement is so broad as to be unenforceable, the
provision shall be interpreted to be only so broad as would be enforceable.
10. Counterparts. This Assumption of Liabilities Agreement may be executed
in counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same agreement.
11. Consent to Jurisdiction. Each of the parties hereto irrevocably and
unconditionally submits to the exclusive jurisdiction of the state and federal
courts located in the State of Delaware for the purposes of enforcing this
Assumption of Liabilities Agreement. The parties shall take such actions as are
within their control to cause any matter contemplated hereby to be assigned to
the Chancery Court of the State of Delaware. In any action, suit or other
proceeding, each of the parties hereto irrevocably and unconditionally waives
and agrees not to assert by way of motion, as a defense or otherwise any claims
that it is not subject to the jurisdiction of the above courts, that such action
or suit is brought in an inconvenient forum or that the venue of
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such action, suit or other proceeding is improper. Each of the parties hereto
also agrees that any final and unappealable judgment against a party hereto in
connection with any action, suit or other proceeding shall be conclusive and
binding on such party and that such award or judgment may be enforced in any
court of competent jurisdiction, either within or outside of the United States.
A certified or exemplified copy of such award or judgment shall be conclusive
evidence of the fact and amount of such award or judgment
12. Parties in Interest. This Assumption of Liabilities Agreement shall be
binding upon Landmark, RIC and their respective successors and permitted
assigns. Nothing in this Assumption of Liabilities Agreement, express or
implied, is intended to confer upon any Person other than Landmark or RIC or
their successors or permitted assigns, any rights or remedies under or by reason
of this Assumption of Liabilities Agreement.
13. Specific Performance. The parties recognize and agree that if for any
reason any of the provisions of this Assumption of Liabilities Agreement are not
performed in accordance with their specific terms or are otherwise breached,
immediate and irreparable harm or injury would be caused for which money damages
would not be an adequate remedy. Accordingly, each party agrees that, in
addition to any other available remedies, each other party shall be entitled to
an injunction restraining any violation or threatened violation of any of the
provisions of this Assumption of Liabilities Agreement without the necessity of
posting a bond or other form of security pending the outcome of any arbitration.
In the event that any action should be brought in equity to enforce any of the
provisions of this Assumption of Liabilities Agreement, no party will allege,
and each party hereby waives the defense, that there is an adequate remedy at
law.
14. Descriptive Headings. The descriptive article and section headings
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Assumption of
Liabilities Agreement.
15. Expenses. Unless otherwise specifically provided herein, all costs and
expenses incurred in connection with this Assumption of Liabilities Agreement
shall be paid by the party incurring such cost or expense.
16. Notice. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given (and shall be deemed to have
been duly given upon receipt) by delivery in person, by facsimile (which is
confirmed), by courier (delivery of which is confirmed), or by registered or
certified mail (postage prepaid, return receipt requested) to the respective
parties to this Assumption of Liabilities Agreement as follows:
If to RIC:
Xxxxx X. Xxxxxxxx, Esq.
General Counsel
Royal Group, Inc.
0000 Xxxxxxxxxx Xxxx.
Xxxxxxxxx, XX 00000
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Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to (which shall not constitute notice to RIC for
purposes of this Paragraph 16.):
Xxxxxx X. Xxxxxxxx, Esq.
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
If to Landmark:
Xxxxx X. Xxxxxxx
Executive Vice President
Landmark American Insurance Company
000 Xxxx Xxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with copies to (which shall not constitute notice to Landmark
for purposes of this Paragraph 16.):
Xxxxxx X. Xxxx, Esq.
General Counsel
Alleghany Corporation
000 Xxxx Xxxxxx
Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
and
Xxxxxx X. Xxxxxx, Esq.
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above. In
no event shall the
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provision of notice pursuant to this Paragraph 16 constitute notice for service
of any writ, process or summons in any suit, action or other proceeding.
17. Interpretation. (a) When a reference is made in this Assumption of
Liabilities Agreement to a Paragraph, such reference shall be to a paragraph of
this Assumption of Liabilities Agreement unless otherwise clearly indicated to
the contrary. Whenever the words "include", "includes" or "including" are used
in this Assumption of Liabilities Agreement, they shall be deemed to be followed
by the words "without limitation." The words "hereof," "herein" and "herewith"
and words of similar import shall, unless otherwise stated, be construed to
refer to this Assumption of Liabilities Agreement as a whole and not to any
particular provision of this Assumption of Liabilities Agreement. The meaning
assigned to each term used in this Assumption of Liabilities Agreement shall be
equally applicable to both the singular and the plural forms of such term, and
words denoting any gender shall include all genders. Where a word or phrase is
defined herein, each of its other grammatical forms shall have a corresponding
meaning.
(b) The parties have participated jointly in the negotiation and
drafting of this Assumption of Liabilities Agreement; consequently, in the event
an ambiguity or question of intent or interpretation arises, this Assumption of
Liabilities Agreement shall be construed as if drafted jointly by the parties
thereto, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Assumption of Liabilities Agreement.
18. Confidentiality. Each party hereto will hold, and will use its
reasonable best efforts to cause its Affiliates, and their respective
representatives to hold, in strict confidence from any Person (other than any
such Affiliates or representatives), except with the prior written consent of
the other party or unless (i) compelled to disclose by judicial or
administrative process (including without limitation in connection with
obtaining the necessary approvals of this Assumption of Liabilities Agreement
and the transactions contemplated hereby of governmental or regulatory
authorities) or by other requirements of Applicable Law or (ii) disclosed in an
action or proceeding brought by a party hereto in pursuit of its rights or in
the exercise of its remedies hereunder, this Assumption of Liabilities
Agreement, the terms and conditions hereof and thereof, and all documents and
information concerning the other party or any of its Affiliates furnished to it
by the other party or such other party's representatives in connection or with
transactions contemplated hereby or thereby, except to the extent that such
documents or information can be shown to have been (a) previously known by the
party receiving such documents or information, (b) in the public domain (either
prior to or after the furnishing of such documents or information hereunder)
through no fault of such receiving party or (c) later acquired by the receiving
party from another source if the receiving party is not aware that such source
is under an obligation to another party hereto to keep such documents and
information confidential.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, each of the parties hereto has caused this
instrument to be duly executed in its name by an authorized representative as of
the date set forth above.
ROYAL INDEMNITY COMPANY
By: /s/ Xxxxxxxx X. Xxxxxx, Xx.
---------------------------
Name: Xxxxxxxx X. Xxxxxx, Xx.
Title: Vice President
LANDMARK AMERICAN INSURANCE COMPANY
By: /s/ Xxxxx X. Xxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
