0
Xxxxxxx 0
Xxxxxxxxx 00, 0000
Xxxxx Reinsurance America Corporation
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Reliance Insurance Company
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Amendment of Certificate of Incorporation
Ladies and Gentlemen:
Reference is made to a Purchase Agreement (the "Purchase
Agreement") of even date among each of you and Home State Holdings, Inc. (the
"Company") pursuant to which, among other matters, each of you is purchasing
shares of the Company's Series A Voting Preferred Stock (the "Series A Preferred
Stock"). The undersigned is the holder of shares of the Company's Common Stock
and will benefit from your investment in the Series A Preferred Stock (the
"Investment"). You have indicated that you are requiring the execution of this
letter agreement by the undersigned as a condition to the closing of the
transactions contemplated by the Purchase Agreement, the Investment and the
performance of your other obligations under the Purchase Agreement and the
transactions contemplated thereby.
The undersigned agrees to vote all shares of the Company's
Common Stock which he holds or over which he exercises discretionary voting
authority as of the date of the herein referenced meeting of the Company's
stockholders (the "Subject Shares") in favor of any proposal (a "Proposal")
presented to the stockholders of the Company to amend the Company's Certificate
of Incorporation so as (a) to permit the designation of one or more series of
Preferred Stock by the Company's Board of Directors, the holders of which are
entitled to vote as a class on any matter designated by such Board of Directors,
whether of not such a class vote would otherwise be required by applicable law,
(b) to permit the holders of the Series A Preferred Stock to vote as a class
upon any matter, including, without limitation the election of the Preferred
Director and the Default Directors, as defined in the Stockholders' Agreement,
(c) to increase the number of directors of the Company to at least ten (10), or
(d) to incorporate any amendments proposed by the holders of the Series A
Preferred Stock provide that any such proposed amendment does not adversely
effect the interests of the undersigned.
Upon written request by either of you, the undersigned agrees,
at least seven (7) days prior to any meeting of the Company's stockholders to
consider a Proposal, to grant to you and to execute in your favor an irrevocable
proxy to vote the Subject Shares in favor of the aforementioned Proposal.
2
The undersigned acknowledges and agrees that any breach or
threatened breach of the undersigned's obligations under this letter agreement
will cause irreparable injury to you for which money damages will not provide an
adequate remedy. Therefore, you shall be entitled to seek specific enforcement
of any of such obligations before any court having equity jurisdiction. The
parties hereto acknowledge and agree that such remedy of specific performance
shall be your sole remedy against the undersigned for a breach of his
obligations hereunder. The undersigned agrees to waive any requirement that you
post a bond in connection with the granting of any such remedy of specific
enforcement.
This letter agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (other than any conflict of
laws rule which might result in the application of the laws of any other
jurisdiction).
Please indicate your acceptance and agreement to the foregoing
in the space provided below.
/s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
SWISS REINSURANCE AMERICA CORPORATION
By /s/ Xxxxxx X. Xxxxxxx
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Name: Xxxxxx X. Xxxxxxx
Title: Senior Vice President
and General Counsel
RELIANCE INSURANCE COMPANY
By /s/ Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
Title: Vice President
