1.   DEFINITIONS AND INTERPRETATION

2.   SALE AND PURCHASE OF SHARES

3.   CONDITIONS

4.   CONSIDERATION

5.   LOCKED BOX

6.   POSITION PENDING COMPLETION

7.   COMPLETION

8.   SELLER WARRANTIES AND INDEMNITIES

9.   LIMITATIONS ON THG’S LIABILITY

10.  BUYER WARRANTIES, ACKNOWLEDGEMENTS, UNDERTAKINGS AND INDEMNITY

11.  TAX

12.  PROTECTION OF GOODWILL

13.  CONFIDENTIAL INFORMATION

14.  ANNOUNCEMENTS

15.  NOTICES

16.  TERMINATION

17.  COSTS

18.  ASSIGNMENT

19.  FURTHER ASSURANCES

20.  CUMULATIVE RIGHTS AND REMEDIES

21.  EFFECT OF COMPLETION

22.  WAIVER AND VARIATION

23.  SEVERANCE

24.  ENTIRE AGREEMENT

25.  CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

26.  COUNTERPARTS

27.  GOOD FAITH

28.  LAW AND ARBITRATION

SCHEDULE 1 DETAILS OF THE COMPANIES AND THE SUBSIDIARIES

PART 1 - DETAILS OF THE COMPANIES

PART 2 - DETAILS OF THE HIIH SUBSIDIARIES

PART 3 - DETAILS OF THE HAH SUBSIDIARIES

SCHEDULE 2 WARRANTIES

SCHEDULE 3 LIMITATIONS ON THG’S LIABILITY

SCHEDULE 4 BUYER WARRANTIES

SCHEDULE 5 LEAKAGE AND PERMITTED LEAKAGE

SCHEDULE 6 LOCKED BOX ACCOUNTS

SCHEDULE 7 GROUP INTELLECTUAL PROPERTY

PART 1 – REGISTERED TRADE MARKS

PART 2 – DOMAIN NAMES

PART 3 – REGISTERED BUSINESS NAMES

SCHEDULE 8 THE PROPERTIES

SCHEDULE 9 TAX COVENANT

SCHEDULE 10 CONDUCT OF BUSINESS PENDING COMPLETION

SCHEDULE 11 FUNDS AT LLOYD’S

ANNEX A ANNOUNCEMENTS

ANNEX B FORM OF MAE CERTIFICATE

Disclosure Letter

Stock transfer forms in respect of the Shares

Indemnity in respect of lost share certificate

Pre-registration powers of attorney

Director’s resignation letter

EGM Notice

Transitional Services Agreement Term Sheet

HSIB Transitional Services Term Sheet

THE HANOVER INSURANCE GROUP, INC., a Delaware corporation with its headquarters at 440 Lincoln Street, Worcester, Massachusetts, United States of America (“THG”); and

CHINA REINSURANCE (GROUP) CORPORATION, a joint stock limited company incorporated in The People’s Republic of China and whose registered office is at No.11 Jinrong Avenue, Xicheng District, Beijing, China (the “Buyer”).

The Companies (as defined below) are directly or indirectly owned by THG. Further details of the Companies are set out in Part 1 of Schedule 1.

THG has agreed to sell or procure the sale of, and the Buyer has agreed to purchase, the Shares (as defined below) upon the terms of, and subject to the conditions to, this Agreement.

DEFINITIONS AND INTERPRETATION

In this Agreement, the following words and expressions shall, unless otherwise specified or the context otherwise requires, have the following meanings:

“Accounts”

“Accounts Date”

“Act”

“Agent’s Agreement”

“Announcement”

“Anti-corruption Laws”

“Antitrust Condition”

“Authority”

“AXA Agreement”

“Board Resolution”

“Boxed Tax Warranties”

“Break Fee”

“Break Fee Trigger Event”

means:

(a)   the failure of the Buyer to satisfy the Buyer Shareholder Approval Condition or the Chinese Regulatory Condition and any other PRC regulatory approvals identified in this Agreement by the Initial Longstop Date;

(b)   the failure of the Buyer to obtain any other required regulatory approval for the Transactions (to the extent to which the same are subject to regulatory approvals) from any Authority in the PRC (which, for the avoidance of doubt, does not include the failure of the Buyer to obtain any notice, filing or submission that is immaterial, routine and/or merely for reporting purposes in connection with the Transactions (to the extent to which the same are subject to such notice, filing or submission) and which in and of itself is not a notice, filing or submission which the Buyer is required to have made in respect of regulatory approval for the Transactions (to the extent to which the same are subject to regulatory approvals) from an Authority in the PRC) by the Initial Longstop Date, which is predicated on laws or regulations in existence as of the date of this Agreement or which have on or before the date of this Agreement been announced as coming into force at any time after the date of this Agreement but on or before Completion; or

(c)   any preliminary or permanent injunction is issued, or other impediment is imposed, by a PRC governmental entity blocking Completion, which is predicated on laws or regulations in existence as of the date of this Agreement or which have on or before the date of this Agreement been announced as coming into force at any time after the date of this Agreement but on or before Completion.

A Break Fee Trigger Event shall not be construed or interpreted to apply in respect of, or as a consequence of, any changes in existing laws or regulations after the date of this Agreement (other than as set out in (c) above);

“Brexit”

“Budget”

“Business Day”

“Buyer Shareholder Approval Condition”

“Buyer Warranties”

“Buyer’s Group”

“Buyer’s Permitted Assignee”

“Buyer’s Solicitors”

“Byelaw”

“Catastrophe”

“Catastrophe Losses”

“CBI”

“CBIRC”

“Certification”

“Charge over Account”

“Chinese Regulatory Condition”

“CHL”

“CIC”

“CIC Accounts”

“CIC Shares”

“Claim”

“Code”

“Companies”

“Completion”

“Completion Date”

“Conditions”

“Confidential Information”

“Consideration”

“Contingent Consideration”

“Contractor”

“Corporate Members”

“Council”

“CSL”

“CTA 2010”

“CUSL”

“Cyber Security Incident”

“Data Protection Legislation”

“Data Room”

“DFSA”

“Disclosed Documents”

“Disclosure Letter”

“Dividend”

“Dormant Subsidiaries”

“Effect”

“EGM”

“EGM Notice”

“Employee”

“Encumbrance”

“Escrow Account”

“Escrow Agent”

“Escrow Letter”

“EU Merger Regulation”

“Expert”

“External Actuarial Report”

“FAL LOC Facility Agreement”

“FAL LOC Finance Parties”

“FAL LOC Guarantee”

“FAL Staff”

“FCA”

“Financial Obligation”

“Franchise Board”

“FSMA”

“Full Title Guarantee”

“Fundamental Warranties”

“Fundamental Warranty Claim”

“Funds at Lloyd’s”

“General Warranties”

“General Warranty Claim”

“Group”

“Group Company”

“Group Intellectual Property”

“HAH”

“HAH Accounts”

“HAH Group”

“HAH Shares”

“HAH Subsidiaries”

“HIIH”

“HIIH Accounts”

“HIIH Shares”

“HIIH Subsidiaries”

“Hong Kong”

“Hong Kong Stock Exchange”

“HR Data Room”

“HSIB”

“HSIB Coverholder Agreement”

“IBNR”

“Indemnified Matters”

“Information Memorandum”

“Information Technology Systems”

“Initial Consideration”

“Initial Longstop Date”

“Insolvency Proceedings”

“Insurance Policy”

“Intellectual Property”

means all intellectual property rights, including:

(a)   patents, registered and unregistered trade and service marks, business names, domain names, copyright and moral rights and neighbouring and related rights, rights to sue for passing off or unfair competition, rights in designs, rights in inventions, database rights and topography rights (whether or not registered);

(b)   applications for any of the rights in paragraph (a) above, together with the right to apply for registration of such rights; and

(c)   know-how, trade secrets, Confidential Information of the Group, all rights of privacy and confidentiality, technical information, customer, broker, coverholder and supplier lists and any other proprietary knowledge and/or information of whatever nature and howsoever arising,

together with any rights or types of protection of the same or of a similar nature to those listed in paragraph (a), (b) or (c) above which may subsist anywhere in the world and in each case for their full term and/or effect;

“LAE”

“Law” or “Laws”

“LCIA Rules”

“Leakage”

“Leakage Amount”

“Leakage Certificate”

“Leakage Claim”

“Leakage Undertaking”

“Leases”

“Limited Review Report”

“Lloyd’s”

“Lloyd’s Regulations”

“Loan Undertaking Amount”

“Locked Box Accounts”

“Locked Box Date”

“Loss”

“LTIPs”

“MAE”

means any Effect, whether alone or in combination with any other Effect, which has, or which is reasonably likely to have, a material adverse effect on the business, assets, value, profits, financial condition or results, or operations of the Group taken as a whole and in light of the business in which the Group operates, provided that none of the following shall constitute or be deemed to contribute to a material adverse effect, and shall not otherwise be taken into account in determining whether a material adverse effect has occurred or would be reasonably likely to occur, namely any adverse effect arising out of, resulting from or attributable to:

(a)   an event or series of events or circumstances affecting economic or capital markets, the global economy, interest rates, exchange rates, unemployment rates, commodity prices or other general economic conditions or political conditions generally in any of the countries or product markets in which the Group operates;

(b)   changes in conditions generally affecting the insurance, reinsurance or risk management industries in which the Group operates;

(c)   changes or prospective changes in Laws or accounting standards or practices or the enforcement or interpretation thereof;

(d)   any matter fairly disclosed in the Disclosure Letter or the Data Room;

(e)   the transactions contemplated by any of the Transaction Documents;

(f)   the negotiation, execution or the announcement of, the consummation of the transactions contemplated by, or the performance of obligations under, this Agreement or the other Transaction Documents (including effects related to compliance with the covenants contained herein or the failure to take any action as a result of any restrictions or prohibitions set forth herein) and the impact of any of the foregoing on any relationships with policyholders, brokers, agents, suppliers, vendors, business partners, employees or regulators;

(g)   the identity of or the effect of any facts or circumstances relating to the Buyer or its affiliates;

(h)   actions permitted or required to be taken or omitted pursuant to this Agreement or taken with Buyer’s consent or not taken because of Buyer’s failure to consent;

(i)  the effect of any action taken by the Buyer or its affiliates with respect to the transactions contemplated hereby;

(j)  any natural disasters, or any escalation or worsening of any such natural disasters;

(k)   hostilities, acts of war, sabotage, terrorism, military actions or man-made disaster, or any escalation or worsening of any such hostilities, act of war, sabotage, terrorism, military actions or man-made disaster;

(l)  any ratings downgrade or announcement thereof by any ratings agency in respect of the Group (but for the avoidance of doubt, the underlying facts and circumstances resulting in such ratings downgrade (other than any matter fairly disclosed in the Disclosure Letter or in the Data Room) may be considered in determining whether a material adverse effect has occurred); or

(m) the potential departure of the United Kingdom (or any part thereof) from the European Union, negotiations with respect to passporting rights (as defined in the UK Financial Conduct Authority handbook) and any resultant effects thereof,

provided that the matters in items (a), (b), (c) and (m) above shall be taken into account if and only to the extent that they have a materially and disproportionately adverse effect with respect to the Group as compared to other similarly situated participants engaged in the industries and lines of insurance business in which the Group operates;

“MAE Certificate”

“MAE Condition”

“Management Accounts”

“Management Presentation”

“Managing Agent’s Agreement”

“MAS”

“Material Agreement”

“Member”

“Members’ Agent’s Agreement”

“Memorandum”

“NDRC”

“New Pensions Guarantee”

“NPE”

“Non-Disclosure Agreement”

“Non-PRC Illegality Condition”

“Opus Agreements”

means:

(a)   the advisory agreement entered into between Opus Investment Management, Inc. and CIC on 8 June 2017; and

(b)   the advisory agreement entered into between Opus Investment Management, Inc., CHL and CSL as amended and restated on 13 August 2012;

“Other Group Company Accounts”

“Owned Property”

“Pension Schemes”

“Permitted Leakage”

“Policies”

“Postponed Longstop Date”

“PRA”

“PRA Rulebook”

“PRC”

“Pre-Completion Reorganisation”

“Pre-Completion Reorganisation Steps Paper”

“Pre-contractual Statement”

“Proceedings”

“Properties”

“Qualifying Claim”

“Quota Share Agreement”

“Related Person”

means:

(a)   in relation to a person which is a partnership, any adviser to, manager and/or general partner of that partnership and any entity which is a subsidiary undertaking or parent undertaking of that adviser, general partner or manager and any subsidiary undertaking of any such parent undertaking;

(b)   in relation to a person that is an undertaking, any subsidiary undertaking or parent undertaking of that person and any subsidiary undertaking of any such parent undertaking;

(c)   in relation to a person that is an individual, any spouse, co-habitee and/or lineal descendants by blood or adoption or any person or persons acting in its or their capacity as trustee or trustees of a trust of which such individual is the settler; and

(d)   any Related Person of any person in paragraphs (a) to (c) of this definition of Related Person;

“Replaced Pensions Guarantee”

“Resolution”

“Retention and Success Payments”

“SAFE”

“Seller”

means:

(a)   in respect of the HIIH Shares, THG;

(b)   in respect of the CIC Shares, THIC; and

(c)   in respect of the HAH Shares, THG,

(and “Sellers” shall be construed accordingly);

“Senior Employee”

“Service Company”

“Service Company Coverholder”

“Services Agreements”

means:

(a)   the services agreement entered into between, among others, THIC and CHL on 31 December 2012; and

(b)   the service company underwriting agreement entered into between HSIB and CSL effective 1 January 2018;

“Shareholders”

“Shares”

“SPV”

“Subsidiaries”

“Syndicates”

“Tax” or “Taxation”

“Tax Authority”

“Tax Claim”

“Tax Covenant”

“Tax Relief”

“Tax Warranty Claim”

“THG Account”

means the following bank account of THG:

Beneficiary Bank: Deutsche Bank Trust Company Americas

SWIFT: BKTRUS33

Account Name: The Hanover Insurance Group, Inc.

Account Number: 00321453;

“THG Account Control Agreement”

“THG AUD Loan”

“THG Group”

“THG Line of Credit”

“THG Loan Reorganisation”

“THG Permitted Assignee”

“THG Pledge Agreement”

“THG Segmental Accounts”

“THG USD Loan”

“THG’s Solicitors”

“THG’s 10-K”

“THG’s 10-K 2018”

“THIC”

“THIC Guarantee”

“THIC Loan”

“Third Party Claim”

“TIOPA 2010”

“Transaction Documents”

“Transactions”

“Transitional Services Agreement”

“Trustee”

“UK”

“Unwinding”

“U.S.”

“US$” or “U.S. dollars”

“VAT”

“Warranties”

“Warranty Claim”

“Year of Account”

In this Agreement, unless otherwise specified or the context otherwise requires:

words importing the singular only shall include the plural and vice versa and words importing a gender include every gender;

a reference to this Agreement includes this Agreement as may be amended or supplemented in accordance with its terms;

a reference to a Clause or Schedule is a reference to a clause of, or schedule to, this Agreement;

a reference to a paragraph is a reference to a paragraph of a Schedule;

a reference to a document “in the agreed form” is a reference to a document in the form approved and, for the purposes of identification only, signed by or on behalf of THG and the Buyer (in each case with such amendments as may be agreed by or on behalf of THG and the Buyer);

a reference to a statutory provision includes a reference to that provision as modified, replaced, amended and/or re-enacted from time to time (whether before or after the date of this Agreement), any statute, statutory provision or subordinate legislation which it amends or re-enacts and any prior or subsequent subordinate legislation made under it;

a reference to “costs” includes a reference to costs (including legal costs), charges and expenses of every description;

a reference to a “person” includes any individual (including such individual’s executors or administrators), firm, company, corporation, body corporate, government, state or agency of state, trust or foundation, or any association, partnership or unincorporated body of two or more of the foregoing (whether or not having separate legal personality and wherever incorporated or established);

a reference to a “party” means a party to this Agreement;

words and expressions defined in the Act shall bear the same meaning as in the Act;

a reference to a “company” (other than the Company) shall be construed so as to include any company, corporation or other body corporate wherever and however incorporated or established;

a reference to a “connected person” is a reference to a person connected with another within the meaning of sections 1122 and 1123 of the CTA 2010;

a reference to “personal data”, “data breach”, “processing” and “data subject” shall have the meaning given to them under Data Protection Legislation;

a reference to the term “includes” or “including” (or similar expression) is deemed to be followed by the words “without limitation”;

a reference to something being “in writing” or “written” shall include any mode of reproducing words in any legible form, including by email;

a reference to a time of day is to London time prevailing on the relevant day;

words, expressions or abbreviations detailed in the Schedules shall have the same meaning in this Agreement; and

to the extent not otherwise defined herein, any capitalised term used in this Agreement shall have the same meaning as in the Lloyd’s Regulations.

In this Agreement, the Clause, Schedule, Part and paragraph headings are included for convenience only and shall not affect the interpretation of this Agreement. The Schedules and Recitals form part of this Agreement and shall have effect as if set out in full in the body of this Agreement, and any reference to this Agreement includes the Schedules and Recitals.

The ejusdem generis rule shall not apply and accordingly, in this Agreement, general words introduced by the word “other” or any similar word, or followed by the word or words “including”, “includes”, “include”, “in particular” or any similar word or words, shall not be given a restricted meaning because they are preceded or followed by more specific words.

Where the value of any Claim is expressed in a currency other than US$ and it is necessary to determine whether a monetary limit or threshold referred to in Schedule 3 has been reached or exceeded, the value of that Claim shall be translated into US$ at the closing spot rate published by the Financial Times on the date on which the Claim is notified (or deemed notified) to THG.

Any undertaking by a party not to do any act or thing includes an undertaking not to allow, cause or assist the doing of that act or thing and to exercise all rights of control over the affairs of any other person which that party is able to exercise (directly or indirectly) in order to secure performance of that undertaking.

References to any fact, matter, circumstance or information being “fairly disclosed” means fairly disclosed in or with sufficient detail to allow the Buyer, acting with reasonable diligence, to make a reasonably informed assessment of the nature and scope of the fact, matter, circumstance or information so disclosed.

Where any Warranty is qualified by reference to materiality (including, but not limited to, the phrase “in all material respects”), such reference shall, unless specified to the contrary, be construed as a reference to materiality in the context of the operations, business or financial condition of the Group taken as a whole.

Any statement which refers to the knowledge or knowledge and belief of THG or is expressed to be “so far as THG is aware” or any similar expression shall mean the actual knowledge, belief or awareness of THG as at the date of this Agreement, having made due and careful enquiries of John Fowle, David Bendle, Robert Callan, Duncan Gemmel, Penelope Shaw, David Saker, Jon Perkins, Kapil Khanna and Richard Barnett.

“Shares” (and any of the shares making up this definition) shall be construed and interpreted as including any additional shares allotted and issued after the date of this Agreement in connection with any Loan Undertaking Amount and/or the THG Loan Reorganisation, which shall be included in the sale and purchase of the Shares under this Agreement without any additional consideration.

SALE AND PURCHASE OF SHARES

Subject to Clause 3, THG:

agrees to sell, or procure the sale by the Sellers (as applicable) of, with Full Title Guarantee, and the Buyer agrees to purchase, free from any Encumbrance, the Shares with effect from and including Completion, together with all rights attached or accruing to them as at the Completion Date; and

waives, or shall procure the waiver by the relevant Sellers (as applicable) of, any and all restrictions on transfer, including rights of pre-emption over any of the Shares, whether conferred by the articles of association of the relevant Company or otherwise.

The Buyer shall not be obliged to complete the purchase of the Shares unless the purchase of all the Shares from the Sellers is completed simultaneously.

CONDITIONS

Completion of the sale and purchase of the Shares is subject to, and conditional upon, each of the following conditions (the “Conditions”) being satisfied or waived in writing by the Buyer and/or THG (depending on which party is entitled in accordance with this Agreement to waive any respective Condition) in any case or before 5.00 p.m. on 31 December 2018 (the “Initial Longstop Date”):

the PRA having given notice in writing (i) in accordance with either section 189(4)(a) or section 189(7) FSMA that it approves the Buyer and any other person (including any SPV) acquiring control (within the meaning of section 181 FSMA) of CSL pursuant to this Agreement, or in the absence of such notice, the PRA being treated, under section 189(6) FSMA, as having approved the acquisition of control of CSL by the Buyer and any other person (including any SPV) acquiring control of CSL and (ii) (if approval is required by the PRA) approving the novation in Clause 7.4.3(c);

the FCA having given notice in writing in accordance with either section 189(4)(a) or section 189(7) FSMA that it approves the Buyer and any other person (including any SPV) acquiring control (within the meaning of section 181 FSMA) of Lonham Group Limited pursuant to this Agreement, or in the absence of such notice, the FCA being treated, under section 189(6) FSMA, as having approved the acquisition of control of Lonham Group Limited by the Buyer and any other person (including any SPV) acquiring control of Lonham Group Limited;

the Franchise Board having given notice in writing, in accordance with paragraph 43 of the Underwriting Byelaw (No. 2 of 2003) that it approves and has no objection to the Buyer and any other person (including any SPV) acquiring control of CSL pursuant to this Agreement (and in this Clause 3.1.3 the word “control” shall have the meaning given to that expression in the Definitions Byelaw (No. 7 of 2005));

the Council having given notice in writing, in accordance with paragraph 12 of the Membership Byelaw (No. 5 of 2005) that it approves or has no objection to the Buyer and any other person (including any SPV) acquiring control of the Corporate Members pursuant to this Agreement (and in this Clause 3.1.4 the word “control” shall have the meaning given to that expression in the Definitions Byelaw (No. 7 of 2005));

the CBI having given notice in writing that it approves or has no objection to the Buyer and any other person (including any SPV) acquiring control of CIC pursuant to this Agreement or (if approval is required by the CBI) to the novation in Clause 7.4.3(c);

MAS having given notice in writing that it approves or has no objection to the Buyer and any other person (including any SPV) acquiring control of Chaucer Singapore Pte Ltd pursuant to this Agreement;

to the extent required by applicable Law, the DFSA having given notice in writing that it approves or has no objection to the Buyer and any other person (including any SPV) acquiring control of Chaucer MENA Underwriting Limited pursuant to this Agreement;

the Buyer, or any member(s) of the Buyer’s Group, having obtained all requisite approvals pursuant to the Australian Foreign Acquisitions and Takeovers Act 1975, including approval as a foreign government investor, in respect of the Buyer or any other person (including any SPV) acquiring control of HAH pursuant to this Agreement;

in respect of the Transactions (to the extent to which the same are subject to regulatory approvals referred to in this Clause 3.1.9), the Buyer obtaining the approval from CBIRC and completing to the satisfaction of NDRC all necessary filing procedures with NDRC (the “Chinese Regulatory Condition”). Buyer shall be entitled to fund the Consideration in such lawful manner as it might elect, provided that any failure or delay of any financing or any related regulatory approval shall not release the Buyer from any obligation under this Agreement or prejudice any ability of THG to enforce the Break Fee or any other of its rights hereunder and provided always that any failure to obtain any regulatory approval required to implement any such financing shall not of itself constitute: (i) a failure to satisfy the Chinese Regulatory Condition; or (ii) a Break Fee Trigger Event;

the Resolution having been passed by the requisite majority of Shareholders (the “Buyer Shareholder Approval Condition”);

no MAE occurring between the date of this Agreement and the Completion Date (other than an MAE which has been remedied by THG in accordance with Clause 3.4.2) and the delivery of a certificate by THG to the Buyer in the form set out in Annex B immediately prior to Completion certifying the same (the “MAE Certificate”) (the “MAE Condition”);

the European Commission having issued a decision under the EU Merger Regulation declaring the transaction compatible with the common market (the “Antitrust Condition”);

no Authority (including any Tax Authority) in the U.S. or in any of the jurisdictions relevant to Clauses 3.1.1 to 3.1.8 and Clause 3.1.12 outside of the PRC having by the Completion Date:

instituted in writing any material action, to prohibit the material transactions proposed under the Transaction Documents or any material part of them, in each case, in respect of, or pursuant to, laws or regulations not in existence or publicly announced including draft legislation as of the date of this Agreement; or

enacted any statute or regulation not in existence or publicly announced including draft legislation as of the date of this Agreement, which would prohibit implementation of such transactions or any material part of them,

The Buyer shall:

use all reasonable endeavours, acting in good faith, to procure the satisfaction of each of the Conditions (other than the MAE Condition and the Non-PRC Illegality Condition) as soon as possible but in any event before 5.00 p.m. on the Initial Longstop Date or, following any postponement of the Initial Longstop Date pursuant to Clause 3.9, the Postponed Longstop Date;

at all times keep THG fully informed as to the progress of the satisfaction of each of the Conditions (other than the MAE Condition in respect of which Clause 3.4.2 shall apply) including the progress of the Buyer Shareholder Approval Condition; and

notify THG promptly (and in any event within two Business Days) in writing after becoming aware of any event, circumstance or condition that would be reasonably likely to prevent or delay any of the Conditions being satisfied before 5.00 p.m. on the Initial Longstop Date or, following any postponement of the Initial Longstop Date pursuant to Clause 3.9, the Postponed Longstop Date.

In respect of the Conditions (other than the MAE Condition and the Non-PRC Illegality Condition), the Buyer shall further, at its own cost:

use all reasonable endeavours, acting in good faith, to submit, and ensure (in accordance with Clause 3.3.8) that its relevant parent and subsidiary undertakings submit as soon as practicable to the required parties in each case and in accordance with applicable Laws, all applicable notifications, notices, forms and other filings required in relation to the Conditions;

without unreasonable delay, provide all information which is required or reasonably requested by any Authority in relation to the Conditions, including as may be required by the Listing Rules of the Hong Kong Stock Exchange;

without unreasonable delay, notify THG in advance (and provide copies or, in the case of non-written communications, details) of any material communications it proposes to make to any such Authority relating to any consent, approval or action in relation to the Conditions (other than the Chinese Regulatory Condition and the Buyer Shareholder Approval Condition);

without unreasonable delay, notify THG (and provide copies or, in the case of non-written communications, details) of any material communications from any such Authority relating to any consent, approval or action in relation to the Conditions;

(other than the Chinese Regulatory Condition and the Buyer Shareholder Approval Condition) submit any communications with any such Authority or with any Buyer shareholders only after prior consultation with THG or its advisers (where reasonably practicable) and taking into account any reasonable comments and requests of THG and its advisers, provided that THG and its advisers shall respond as soon as practicable (and in any event shall endeavour to do so within three Business Days thereof) so as not to cause any material delay in the approval and/or communication process, and provide THG (or its advisers) with copies of all submissions, notifications, filings and other material communications in the form submitted or sent;

(without prejudice to the foregoing provisions of this Clause 3.3 and other than the Chinese Regulatory Condition and the Buyer Shareholder Approval Condition) provide THG (or its advisers) with a final draft of all submissions, notifications, filings and other material communications to any Authority at such time as will allow THG (or its advisers) a reasonable opportunity to provide comments on such drafts prior to their submission, provided that THG shall respond as soon as practicable (and in any event shall endeavour to do so within three Business Days thereof) so as not to cause any material delay in the approval and/or communication process;

with respect to the Chinese Regulatory Condition, provide THG (or its advisers) with a copy of the submissions, notifications and filings made by the Buyer to the Authorities;

use all reasonable endeavours to procure that:

Central Huijin Investment Ltd and the Ministry of Finance of the PRC (being shareholders of the Buyer) and China Investment Corporation (being the controlling shareholder of Central Huijin Investment Ltd) sign all relevant or necessary submissions, notifications, filings and other information and communications due to or required by any Authority in connection with the satisfaction of the Conditions (other than the MAE Condition); and

without prejudice or limitation to Clause 3.3.8(a), Central Huijin Investment Ltd and the China Investment Corporation will sign all application forms or, in the case of the Ministry of Finance of the PRC, such other documentation prescribed by the PRA, to be submitted by the Buyer to the PRA, and the Buyer undertakes to submit a signed application to the PRA, including in respect of the SPVs, within eight Business Days after the date of this Agreement, provided that, in each case, THG has complied with its obligation under Clause 3.6.2 (to the extent relevant in connection with such application to be made by the Buyer); and

regularly review with THG, at THG’s request, the progress of any communications, notifications or filings with a view to obtaining the relevant consent, approval or action from any Authority at the earliest reasonable opportunity,

THG shall:

not knowingly take (or fail to take) any action within its control which would constitute an MAE prior to the Initial Longstop Date or, following any postponement of the Initial Longstop Date pursuant to Clause 3.9, the Postponed Longstop Date; and

itself, and shall procure that each Group Company shall, at all times keep the Buyer fully informed as to any matters that may trigger the MAE Condition (including the provision of any information, materials and reasonable assistance to the Buyer as the Buyer may reasonably request in connection with the satisfaction of the MAE Condition).

Each party shall notify the other promptly (and in any event within two Business Days) in writing after becoming aware of any event, circumstance or condition that would be reasonably likely to prevent or delay the MAE Condition or the Non-PRC Illegality Condition being satisfied before 5.00 p.m. on the Initial Longstop Date or, following any postponement of the Initial Longstop Date pursuant to Clause 3.9, the Postponed Longstop Date. Provided such event, circumstance or condition is remediable, THG (in the case of the MAE Condition) or THG or the Buyer (in the case of the Non-PRC Illegality Condition) shall be entitled, but not obliged, to elect by notice in writing to the other to:

(in the case of the MAE Condition) use all reasonable endeavours, acting in good faith, to remedy such event, circumstance or condition; or

(in the case of the Non-PRC Illegality Condition) request its cooperation in good faith to use reasonable endeavours to identify and implement an alternative arrangement or structure to overcome such event, circumstance or condition,

In respect of the Conditions to be satisfied by the Buyer (excluding the MAE Condition and the Non-PRC Illegality Condition), THG shall further:

in respect of the change in control applications identified in Clause 3.1 which, pursuant to Law, an authorised or regulated Group Company is required to submit or execute, procure that the applicable Group Company shall, as soon as practicable after the time of the Buyer so requesting, submit or execute such change in control application (including, without limitation, the electronic notifications required by Lloyd’s Regulations to be submitted to Lloyd’s, to notify an intention of change of controller) in such form as required by applicable Laws;

at its own cost, provide (including by procuring applicable Group Companies to provide) such information, materials and reasonable assistance to the Buyer as the Buyer may reasonably request in connection with the satisfaction of such Conditions (including the provision of such information, materials and reasonable assistance in respect of the change in control applications identified in Clause 3.1), provided that THG shall respond as soon as practicable (and in any event shall endeavour to do so within three Business Days thereof) so as not to cause any material delay in the approval and/or communication process for any such Condition, and provided always that nothing in this Clause 3.6.2 shall require THG to disclose any sensitive information or business secrets to the Buyer, although THG acknowledges and agrees that any such sensitive information or business secrets may (subject to any privilege-related issues) be disclosed to the external legal counsel of the Buyer to the extent that they are advising in connection with the satisfaction of the Conditions (which may include the Buyer’s Solicitors) on the basis that such external legal counsel does not disclose such information to the Buyer; and

for the purposes of Clause 3.6.1 and 3.6.2, and in the event that the Buyer shall at any time have any complaint or objection regarding any act, omission or delay on the part of THG or on the part of any of the Group Companies in the timely performance of their obligations (or the obligations which THG has agreed to procure) under such Clauses, the Buyer agrees to give prompt written notice to THG of such act, omission or delay complained of and to afford to THG and the relevant Group Companies a reasonable opportunity to discuss the same with the Buyer and to notify the Buyer of any circumstances which, in THG’s opinion, are pertinent to such complaint or objection of the Buyer and, if the Buyer remains unsatisfied, to have a reasonable time (and in any event shall endeavour to do so within three Business Days thereof) to seek to address the matters complained of.

The Buyer shall notify THG of the satisfaction of each Condition (other than the MAE Condition and the Non-PRC Illegality Condition) as soon as possible after becoming aware that any such Condition has been satisfied (and in any event within two Business Days of the same).

Without prejudice to any of the rights of the Buyer or THG under this Agreement (as applicable) the Buyer alone may waive (in whole or in part) the MAE Condition.

If all the Conditions are not satisfied or waived (if capable of waiver pursuant to this Agreement) in writing by the Buyer and/or THG (as applicable) in accordance with this Agreement on or before 5.00 p.m. on the Initial Longstop Date, then:

if the only unsatisfied or unwaived Conditions are any one or more of the Conditions in Clauses 3.1.1 to 3.1.8 inclusive or in Clause 3.1.12 and provided that the Buyer or THG as applicable, being a party wishing to elect to postpone the Initial Longstop Date, is in compliance with its respective obligations under Clause 3.2 to 3.6 inclusive (as applicable), the Buyer or THG may in its absolute discretion postpone the Initial Longstop Date to such later date as it shall notify to the other party;

if the only Conditions unsatisfied or unwaived before 5.00 p.m. on the Initial Longstop Date is the MAE Condition or the Non-PRC Illegality Condition (or if: (i) an MAE has occurred by such time and date triggering the MAE Condition and which is not remedied by such time and date by THG; or (ii) an event, circumstance or condition has occurred by such time and date triggering the Non-PRC Illegality Condition and no alternative arrangement or structure has been identified and implemented, in each case, in accordance with Clause 3.4.2), then:

(in the case of the MAE Condition) the Buyer may, in its absolute discretion, postpone the Initial Longstop Date to such later date as it shall notify in writing to THG, to provide THG with more time to remedy the MAE; or

(in the case of the Non-PRC Illegality Condition), either the Buyer or THG may, in its absolute discretion, postpone the Initial Longstop Date to such later date as it shall notify in writing to the other, to provide the parties with more time to identify and implement an alternative arrangement or structure to overcome the event, circumstance or condition giving rise to the Non-PRC Illegality Condition; or

if the only unsatisfied or unwaived Condition is any one or more of the Conditions in Clauses 3.1.9 and 3.1.10, THG may, in its absolute discretion and without prejudice to its ability to exercise its rights under Clause 3.9.1, postpone the Initial Longstop Date to such later date as it shall notify to the other party,

If, in the circumstances:

set out in Clause 3.9, either:

the Initial Longstop Date is not postponed pursuant to Clause 3.9; or

the Conditions are not satisfied or waived in writing by the Buyer and/or THG in accordance with this Agreement on or before 5.00 p.m. on the Postponed Longstop Date; or

where the Buyer has failed or has given THG notice that the Buyer will or is reasonably likely to fail to satisfy a Condition in Clauses 3.1.1 to 3.1.8 inclusive or in Clause 3.1.12 by the Initial Longstop Date or the Postponed Longstop Date (as applicable) as a result of a definitive rejection of such Condition or approval by the relevant Authority (and which has not and/or cannot be remedied by the Buyer), then THG shall have the right after such definitive rejection on written notice to terminate this Agreement forthwith, whereupon,

termination shall not affect a party’s accrued rights, liabilities and obligations prior to and as at the date of termination including rights under Clause 3.11, provided that, if any one or more of the Conditions set out in Clauses 3.1.1 – 3.1.8 (inclusive), 3.1.12 and/or 3.1.13 is not satisfied, neither party nor any member of the Buyer’s Group or the THG Group (as applicable) shall, in the absence of any bad faith by the other party which caused the failure of such Condition and subject to Clause 3.12, be entitled to pursue any remedy at common law (including the recovery of damages or for damages in tort for any category of tort) or in equity against such other party or any member of the Buyer’s Group or the THG Group (as applicable) in respect of any other matters arising under or otherwise connected to this Agreement. For the avoidance of doubt, if any failure to satisfy any one or more of the Conditions set out in Clauses 3.1.1 to 3.1.8 (inclusive), 3.1.12 and/or 3.1.13 is the reason for termination of this Agreement, such failure or disapproval by the relevant Authority outside the PRC does not, in the absence of any bad faith by the other party which causes the failure of such Condition or disapproval by the relevant Authority outside the PRC, and subject to Clause 3.12, in and of itself constitute a breach of this Agreement by such other party; and

the rights and obligations of the parties under Clauses 3.11 to 3.14, Clauses 13 to 18 (inclusive), Clause 20, Clauses 22 to 25 (inclusive) and Clause 27, together with Clause 1 and any other provisions of this Agreement necessary for its interpretation or enforcement, which shall remain in full force and effect.

If a Break Fee Trigger Event occurs:

THG shall be entitled to terminate this Agreement; and

the Buyer shall, within ten Business Days of the termination date, pay to THG an amount in US$ equal to US$57,400,000 (a “Break Fee”), provided that no Break Fee shall be payable if: (i) THG has failed to comply in any material respect with its obligations in Clause 3.6; or (ii) the Buyer Shareholder Approval Condition, the Chinese Regulatory Condition and/or any other PRC regulatory approvals (referred to in limbs (a) or (b) of the definition of Break Fee Trigger Event), as applicable, was satisfied but for any issue notified in writing by any applicable Authority as arising from, in connection with or by reference to the Pre-Completion Reorganisation and not remedied pursuant to Clause 3.3.7,

THG’s right to receive the Break Fee shall, subject to Clause 3.12, be THG’s sole and exclusive remedy in respect of all matters arising under, or otherwise connected to, this Agreement; and

upon payment of the Break Fee, neither the Buyer nor any other member of the Buyer’s Group shall, subject to Clause 3.12, have any additional liability or obligation of any kind whatsoever arising out of, or otherwise connected to, this Agreement, and neither THG nor any other member of the THG Group shall, subject to Clause 3.12, be entitled to pursue any other remedy at common law (including the recovery of damages for any loss that they may have suffered in excess of the amount paid under this Clause 3.11 or for damages in tort for any category of tort) or in equity against the Buyer or any other member of the Buyer’s Group in respect of any other matters arising under, or otherwise connected to, this Agreement.

The limitations set out in Clauses 3.10.2(a), 3.11(c) and 3.11(d) shall not apply to, and shall not have the effect of waiving or otherwise limiting the Buyer’s liability or any remedy of THG for any liability arising as a result of fraud by the Buyer or for a breach, following the termination of this Agreement, of the Buyer’s obligations under Clause 13 (provided that with respect to Clause 3.10.2(a), this Clause shall be construed as applicable to the fraud of either party and not just that of the Buyer and shall be read mutatis mutandis). All sums payable under Clause 3.11 shall be paid in cash in immediately available funds to such bank account as notified in writing by THG to the Buyer for such purpose. All sums payable under Clause 3.11 shall be paid in full, free from any deduction or withholding whatsoever (save only as may be required by any applicable Law) and without regard to any lien, right of set-off, counterclaim or otherwise.

The Buyer shall fully indemnify THG on an after tax basis for all reasonable costs incurred in enforcing the Break Fee (if not paid by the Buyer in accordance with Clause 3.11(b)), including reasonable legal expenses incurred by THG in enforcing the Break Fee.

The Buyer and THG each acknowledge and agree that the Break Fee is proportionate to THG’s legitimate interests in the circumstances that give rise to the obligation for the Buyer to pay the Break Fee in accordance with this Agreement.

Notwithstanding anything in this Agreement (including in this Clause 3) to the contrary, in the event that all of the Conditions (other than the Conditions referred to in Clause 3.1.5 and/or 3.1.8) are satisfied by the Initial Longstop Date or, as applicable, the Postponed Longstop Date, the Buyer and THG shall, if either notifies the other in writing that it so wishes, proceed to Completion with respect to the HIIH Shares (and, if the applicable Condition has also been satisfied, the CIC Shares or the HAH Shares). Further, the Buyer and THG shall, acting reasonably and in good faith, use their respective reasonable endeavours, until 31 December 2019 (or such other date as the Buyer and THG may agree in writing), to cooperate with one another: (i) in seeking to satisfy the outstanding Condition(s); and (ii) using the terms of this Agreement for reference (other than the provisions relating to the Contingent Consideration), to negotiate and agree upon a further completion (or completions) for the sale and purchase of the CIC Shares and/or the HAH Shares (as applicable) at the applicable price pursuant to Clause 4.1.

CONSIDERATION

The total consideration payable by the Buyer for the Shares shall be (a) US$820,000,000 (the “Initial Consideration”) plus (b) US$45,000,000, being the Contingent Consideration (as defined below and subject to downward adjustment pursuant to Clauses 4.5, 4.6 and 4.9) and together comprising the “Consideration”), which shall be allocated between the Shares as follows:

in respect of the HIIH Shares, US$779,063,473 plus the Contingent Consideration determined in accordance with Clauses 4.5 to 4.13;

in respect of the CIC Shares, US$27,761,138; and

in respect of the HAH Shares, US$13,175,389.

The Initial Consideration shall be paid at Completion in U.S. dollars by electronic transfer of immediately available funds to the THG Account or such other account as THG may specify to the Buyer not later than five Business Days prior to Completion (which payment shall be an absolute discharge to the Buyer who shall not be concerned to see to the application of any such amount thereafter).

The Initial Consideration payable at Completion shall be reduced by an amount equal to the Loan Undertaking Amount and/or the Leakage Amount (without duplication) set out in the Leakage Certificate, which shall discharge THG’s obligation to make (or procure the) payment of such Leakage Amount under Clause 5.3.

Any amount paid by or on behalf of any Seller in respect of any Claim or alleged Claim (including a Leakage Claim, a Warranty Claim or a Tax Claim) or pursuant to any indemnity or undertaking to pay any amount under this Agreement shall, to the extent permitted by Law and not already taken into account under Clause 4.3, be deemed to reduce the Consideration received by that Seller by, and be a repayment by that Seller of, that amount (but the Consideration received by any Seller shall not be treated as being less than nil in consequence of the foregoing).

The “Contingent Consideration” shall be an amount equal to US$45,000,000, which may be adjusted downwards in accordance with Clauses 4.6 and 4.9 depending on the quantum of Catastrophe Losses. The maximum principal amount of the Contingent Consideration (US$45,000,000) shall be deposited by the Buyer into the Escrow Account at Completion.

In the event that the aggregate Catastrophe Losses as certified in the Certification are in excess of 10% of NPE, the Contingent Consideration shall be reduced from the amount in the Escrow Account at the time on a dollar for dollar basis for every dollar by which the aggregate Catastrophe Losses exceed 10% of NPE.

If the amount of the Contingent Consideration payable to THG is calculated pursuant to Clause 4.6 to be less than the maximum of US$45,000,000, the parties shall give all necessary instructions to the Escrow Agent so as to (i) release from the Escrow Account the amount of Contingent Consideration due to THG and (ii) release to the Buyer the remaining sum held in the Escrow Account. If there is no reduction due to be made to the Contingent Consideration by reason of the application of Clause 4.6 then the parties shall give all necessary instructions to the Escrow Agent(s) to release from the Escrow Account to THG the full US$45,000,000 together with accrued interest. The parties shall use all reasonable endeavours to achieve prompt releases of payment from the Escrow Account. For the avoidance of doubt, the Contingent Consideration shall be the Buyer’s sole remedy for any Catastrophe Losses.

Any interest that accrues on the credit balance on the Escrow Account from time to time shall be credited to the Escrow Account and any payment of principal out of the Escrow Account shall include a payment of the interest earned on that principal sum. The liability to Tax on any interest on any amount in the Escrow Account shall be borne by the party ultimately entitled to that interest. No amount shall be released from the Escrow Account otherwise than in accordance with Clause 4 and the terms of the Escrow Letter. The Buyer and THG each agree to:

provide all such information or documentation as may be reasonably required to enable the Escrow Agent to establish the Escrow Account in accordance with this agreement and the Escrow Letter; and

promptly provide such instructions to the Escrow Agent (where relevant in the form specified by the Escrow Letter), and to take all other actions in relation to the Escrow Account, as are necessary to give effect to the provisions of Clauses 4.5 to 4.13.

The Catastrophe Losses shall be as compiled for THG’s 10-K 2018, and updated to 30 June 2019 using the information as reported to THG by CSL in a manner consistent with the Syndicates’ past practice for reporting in THG’s 10-K and as set out in the “Chaucer Trending Package CAT Summary (Excluding Reinstatement Premiums)” for the quarter ended 30 June 2019, and reviewed by the auditors to validate agreed procedures (the “Certification”), and THG shall promptly provide such Certification to the Buyer. Within ten Business Days of receipt of the Certification, the Buyer shall deliver to THG a written notice stating whether it agrees with the Certification. In the case of agreement, the Certification shall be final and binding on the parties and shall be delivered to the Buyer and the Escrow Agent by THG as soon as practicable after receipt of the same. Release of any Contingent Consideration due to THG following delivery of the Certification to the Escrow Agent shall be carried out pursuant to the terms of the Escrow Letter. In the case of disagreement over the Certification, the parties may refer the disputed matters to an Expert for determination in accordance with Clause 4.11.

In relation to the Certification and the preparation of the THG 10-K 2018, the Buyer shall promptly provide, or procure that each Group Company promptly provides to THG and any Expert, all information reasonably requested by THG for the compilation of the THG 10-K 2018 and for the purposes of Certification, including information relating to Catastrophe Losses and NPE and Syndicate quarterly results and Syndicate accounts and Syndicate filings.

If either party does not agree with the Certification, or challenges the information provided or omitted to be provided for the purposes of the Certification, such party shall provide detailed written notice to the other of the matters it disputes and the parties shall seek in good faith to resolve the disputed matter and agree upon the amount of Contingent Consideration. If the parties are unable to reach agreement within ten Business Days of the service of such written notice, then at any time following the expiry of such period either party may, by written notice to the other, require the disputed matters to be referred to an Expert for determination in accordance with Clause 4.12.

The parties shall appoint the Expert and:

the parties shall co-operate with the Expert and shall provide (and in the case of the Buyer shall procure that each Group Company provides) such assistance and access to such documents, personnel, books and records as the Expert may reasonably require for the purpose of making his determination;

each party shall, with reasonable promptness, supply the other party with all such information and access to its documentation, books and records as the other party may reasonably require in order to make a submission to the Expert in accordance with this Clause 4.12;

the Expert shall be permitted to appoint such other experts as the Expert may reasonably require for the purpose of making his determination;

the Expert shall be required to make his or her determination in writing (including the reasons for his or her determination) and to provide a copy to each party as soon as reasonably practicable and in any event within 30 Business Days of his or her appointment;

all matters under this Clause 4.12 shall be conducted, and the Expert’s decision shall be written, in the English language;

the Expert’s terms of reference shall be limited to the matters in dispute in accordance with Clause 4.11;

the Expert shall act as an expert and not as an arbitrator. Save in the event of manifest error or fraud the Expert’s determination of any matters referred to him in accordance with this Clause 4.12 shall be final and binding on the parties;

if an appointed Expert dies or becomes unwilling or incapable of acting, or does not deliver his or her determination within the period required by this Clause 4.12, then the parties shall appoint an independent Fellow of the Institute and Faculty of Actuaries (UK) or the Casualty Actuarial Society (US) to discharge the appointed Expert and to appoint a replacement Expert; and this Clause 4.12 shall apply in relation to each and any replacement Expert as if he/she were the first Expert appointed; and

each party shall bear and pay its own costs incurred in connection with the Expert’s determination pursuant to this Clause 4.12. The Expert’s fees and any costs or expenses incurred in making his determination (including the fees and costs of any advisers appointed by the Expert) shall be borne equally between the Buyer and THG.

Any payments made by or due by the Buyer under this Agreement (including pursuant to Clause 4.2) shall be made free and clear of all deductions, withholdings, counterclaims or set-offs of any kind whatsoever, except those required to be made by the Buyer by Law.

LOCKED BOX

Subject to Clauses 4.3, 5.5 and 5.6 and paragraph 2.1.3 of Schedule 3, with effect from Completion (and conditional upon Completion occurring), THG warrants and undertakes to the Buyer that in the period from (and including) the Locked Box Date up to (and including) the Completion Date, no Leakage has occurred or will occur (the “Leakage Undertaking”).

In the event of a breach of the Leakage Undertaking or if THG, after the date of this Agreement, becomes aware of any Leakage (which has not been cured or otherwise remedied) in the period from (and including) the Locked Box Date up to (and including) the Completion Date, THG undertakes to the Buyer that it shall notify the Buyer in writing promptly (and, in any event, within two Business Days) after becoming actually aware of any Leakage (including details of such Leakage to the extent known). Further, THG undertakes to the Buyer that it shall provide to the Buyer on the Business Day immediately prior to Completion a certificate (the “Leakage Certificate”) setting out the aggregate amount of Leakage (the “Leakage Amount”) (including details of such Leakage to the extent known) which has occurred in the period from (and including) the Locked Box Date up to (and including) the Completion Date (and Clause 4.3 shall apply to any such Leakage Amount).

Subject to Clauses 4.3, 5.5 and 5.6 and paragraph 2.1.3 of Schedule 3, with effect from Completion (and conditional upon Completion occurring), in the event of any breach of the Leakage Undertaking, THG undertakes to pay (or to procure the payment by or on behalf of the relevant Seller (as applicable)) to the Buyer, on the Buyer’s written demand in accordance with this Agreement, an amount in cash equal to (i) any Leakage received by THG or any member of the THG Group (other than a Group Company) and (without double-counting) (ii) any Leakage that is Tax, in each case in the period from (and including) the Locked Box Date up to (and including) the Completion Date.

The Buyer acknowledges and agrees that the only remedy available to it for breach of the Leakage Undertaking is contained in Clause 5.3.

No liability shall attach to THG by reason of any breach of the Leakage Undertaking to the extent that the same Loss has already been recovered by the Buyer for breach of any of the Warranties or any other term of this Agreement or any document entered into pursuant hereto (including any Transaction Document) and the Buyer may only recover once in respect of the same Loss.

Clause 5.3 shall not apply to any Leakage undertaken at the written request of, or approved in writing by, the Buyer or any other member of the Buyer’s Group.

POSITION PENDING COMPLETION

Save as provided for in this Agreement and subject always to Clause 6.2, the provisions of Schedule 10 shall apply.

The provisions of paragraph 1 of Schedule 10 do not apply in respect of and shall not operate to restrict or prevent:

any matter reasonably undertaken in an emergency or disaster situation with the intention of and only to the extent of those matters required with a view to minimising any adverse effect of such situation (and, subject to any restrictions to which THG reasonably considers it or any Group Company is subject, of which the Buyer will be promptly notified (and, in any event within two Business Days thereof)) and which THG or the relevant Group Company considers to be reasonably necessary in the context of the emergency or disaster situation;

providing information to any government entity, Tax Authority or Authority in the normal course of business (and, subject to any restrictions to which THG reasonably considers it or any Group Company is subject, of which the Buyer will be promptly notified (and, in any event within two Business Days thereof));

any matter expressly provided for or permitted by this Agreement (including for the avoidance of doubt any matters set out in the definition of Permitted Leakage) or any Transaction Document;

any matters undertaken solely between Group Companies pursuant to a written contract, agreement or arrangement entered into prior to the date of this Agreement and which has been fairly disclosed in the Data Room;

completing or performing any obligations with a third party undertaken pursuant to any written contract, agreement or arrangement entered into prior to the date of this Agreement and which has been fairly disclosed in the Data Room;

any matter to the extent required by Law (and, subject to any restrictions to which THG reasonably considers it or any Group Company is subject, of which the Buyer will be promptly notified (and, in any event within two Business Days thereof)); or

subject to Clause 6.3, any matter contemplated by the Pre-Completion Reorganisation Steps Paper.

During the period commencing on the date of this Agreement and ending on the Completion Date, THG may implement (and may procure that the THG Group implements) the Pre-Completion Reorganisation, subject to and only in accordance with the following provisions in this Clause 6.3:

the Pre-Completion Reorganisation shall not be implemented, unless:

the Pre-Completion Reorganisation has been agreed upon unanimously by the directors of each of HIIH and CSL (and the resolutions recording such approval shall also include the directors’ approval on the matters referred to in Clauses 6.3.2(c)(ii)(A) – (D) (inclusive) in regard to HIIH and CSL and their respective subsidiary undertakings and having regard to their duties and obligations as directors of HIIH and CSL respectively);

it is agreed upon in writing by the Buyer and THG, following the process set out in this Clause 6.3. The Buyer may not unreasonably withhold its agreement to the Pre-Completion Reorganisation. THG acknowledges and agrees that it bears the onus of seeking to convince and persuade the Buyer to agree to the implementation of the Pre-Completion Reorganisation. Notwithstanding anything to the contrary in this Clause 6.3, in the event that any Authority (including any PRC Authority) notifies either party that the Pre-Completion Reorganisation will, or would likely, jeopardize the approval process for any applicable Condition, the parties acknowledge and agree that the Pre-Completion Reorganisation shall immediately cease (no matter where it is in the implementation process) and shall not be implemented; and

Completion occurs on or before the Initial Longstop Date. If the Buyer and THG agree in writing upon the implementation of the Pre-Completion Reorganisation but: (i) Completion does not occur until after the Initial Longstop Date; or (ii) the Pre-Completion Reorganisation is not implemented for whatever reason on or before the Initial Longstop Date, the Tax aspects of the Pre-Completion Reorganisation shall be unwound (and THG shall procure that the same is unwound) (the “Unwinding”);

the process referred to in Clause 6.3.1(a) is as follows:

first, on or before the 40th day following the date of this Agreement, THG shall use all reasonable endeavours to procure that a memorandum of opinion regarding the effects of the Pre-Completion Reorganisation is prepared by PricewaterhouseCoopers and delivered on a non-reliance basis to the Buyer (the “Memorandum”). If any of the actions or steps proposed to be implemented by THG differ from those set out in the Pre-Completion Reorganisation Steps Paper, THG shall consult with the Buyer regarding the same (and have regard for any reasonable comments of the Buyer and its advisers) and shall use reasonable endeavours to procure that the Memorandum either reflects and explains the consequences of any such changes at the outset or is promptly amended afterwards to do so;

second, if requested by the Buyer, THG shall, as soon as reasonably practicable following the delivery of the Memorandum, give the Buyer and its advisers (and shall use all reasonable endeavours to procure that the Buyer is, and its advisers are, given) reasonable access (whether in person or remotely) to:

THG and PricewaterhouseCoopers to explore any questions it may have in relation to the Memorandum;

the directors of each of HIIH and CSL to discuss their views on the Pre-Completion Reorganisation; and

the board pack sent to the directors of each of HIIH and CSL in advance of their board meeting to consider (or the written resolution of the directors of each of HIIH and CSL circulated to the directors for their consideration) of the Pre-Completion Reorganisation and to a copy of the minutes of the meeting (or copy of the written resolution passed by the directors), and THG shall procure that copies of the same are provided promptly to the Buyer;

third, the Buyer (and its advisers) shall be afforded a reasonable time (and, in any event, before the cut-off time referred to in Clause 6.3.2(d)) to consider and, if thought fit, approve the Pre-Completion Reorganisation. During this period, the Buyer and THG shall, acting reasonably and in good faith, cooperate with one another to help further the understanding of the Buyer on the Pre-Completion Reorganisation and its effects. The Buyer and THG acknowledge and agree that the following constitute reasonable grounds on which the Buyer may legitimately reject the Pre-Completion Reorganisation:

it is advised by one of the Buyer’s advisers that the Memorandum is materially deficient or wrong, or that the impact or effect of the Pre-Completion Reorganisation is likely to be materially prejudicial to the matters referred to in Clause 6.3.2(c)(ii)(B), or that no reasonable judgment can be made by one of the Buyer’s advisers on the effects of the Pre-Completion Reorganisation; and/or

the Buyer reasonably believes that the Pre-Completion Reorganisation would, in respect of any one or more of the following matters, likely:

violate Law;

have a materially prejudicial impact on:

the commercial interests (including reputation);

the Tax affairs; and/or

the capital adequacy ratio,

cause a material change in the structure of the Group (otherwise than in accordance with the Pre-Completion Reorganisation); and/or

cause any Condition to be unsatisfied;

fourth, following steps one to three (inclusive) above, the Buyer and THG must agree in writing to the implementation of the Pre-Completion Reorganisation on or before the cut-off date for proceeding with the implementation of the Pre-Completion Reorganisation, such date being 1 December 2018 (or such other date prior to the Initial Longstop Date as the Buyer and THG may agree in writing). Following such agreement, THG shall implement (and shall procure that the THG Group implements) the Pre-Completion Reorganisation, and THG shall deliver copies of executed documents for the Pre-Completion Reorganisation promptly following implementation. If, however, the Buyer and THG do not agree to the Pre-Completion Reorganisation, it shall not be implemented (and, if and to the extent required, Unwound) and such event shall not give rise to any right of termination for either party; and

without prejudice to paragraph 2.1.5 of Schedule 9, THG shall bear, and THG hereby undertakes to the Buyer to irrevocably and unconditionally indemnify and hold harmless the Buyer (or any member of the Buyer’s Group or the Group on its behalf) from, all Losses which may arise against the Buyer or any member of the Buyer’s Group or the Group from, in connection with or by reference to the Pre-Completion Reorganisation or its Unwinding (including Losses arising from or in connection with any regulatory disapproval outside the PRC because of the Pre-Completion

During the period commencing on the date of this Agreement and ending on (and including) the Completion Date, THG shall:

provide to the Buyer, or procure the provision of, copies of: (i) the unaudited combined profit and loss accounts and balance sheet of the Group (if such balance sheet is routinely produced by the Group Companies) relating to each month during such period no later than the 28^th day of the month following the month to which such accounts relate; and (ii) the Group’s unaudited combined profit and loss accounts, balance sheet and statement of cash flows relating to each quarterly period during such period no later than five weeks following the last day of such quarterly period; (iii) signed board minutes and committee minutes (including for the audit and risk committees) for each Group Company no later than the fifth Business Day following the date on which such minutes are signed by the chairman of the applicable meeting; and (iv) any material correspondence with, and any material reports and submissions made to, the PRA, the FCA, Lloyd’s, the CBI, MAS or the DFSA relating to any Group Company regulated thereby;

provide written notice to the Buyer within three Business Days after each occasion on which, after the date of this Agreement, any amount (whether principal or interest) is paid by the applicable Group Company under the THG USD Loan and/or the THG AUD Loan (including details of the payor, the payee, the amount and date of such payment, and details of how such payment was funded);

procure that written responses are provided by the CEO and/or the CFO of the Group in response to any reasonable queries made in writing by the Buyer to THG in relation to the business of the Group during such period provided that nothing in this Clause 6.4.3 shall require the disclosure of any sensitive information or business secrets to the Buyer;

acting reasonably and in good faith, cooperate with the Buyer in seeking to negotiate and agree upon the Transitional Services Agreement, the HSIB Coverholder Agreement and the HSIB transitional services agreement (based on the agreed form term sheet), both referred to in Clause 7.2.5, and the agreement described in Clause 7.4.3(c) and the Buyer agrees to cooperate with THG likewise;

acting reasonably and in good faith, cooperate with the Buyer with a view to preparing and agreeing upon a branding strategy and a communication strategy for key stakeholders of the Group (including Employees and Contractors, but not including any Authority or other person(s) with whom either or both of the parties have liaised with prior to Completion in connection with the Conditions), in each case, with effect from Completion;

acting reasonably and in good faith, procure that Opus Investment Management, Inc. cooperates with the Buyer’s reasonable requests in relation to arrangements concerning any Group Company, including the continuation of the current advisory agreement and any planning for future advisory services (including any potential transition thereof), whether with Opus Investment Management or another person, provided always that this shall be without prejudice to the terms and conditions of the Opus Agreements;

deliver to the Buyer full details of any material Tax planning being considered by any Group Company in connection with or in respect of Brexit;

if it (or any Group Company) becomes aware of anything (including any Effect(s)) which constitutes, or which would reasonably be expected to result in an MAE, promptly (and in any event within two Business Days) inform the Buyer of such occurrence in writing (together with reasonable details thereof). If the Buyer reasonably believes that anything (including any Effect(s)) has occurred which constitutes, or which would reasonably be expected to result in, an MAE:

the Buyer, acting reasonably, shall be entitled to request from THG any information relating to the Group for the sole purpose of assessing whether or not such event has occurred; and

THG shall, within five Business Days of receiving any such request for information from the Buyer, respond to the Buyer with such information requested, but only to the extent that the information requested (or any portion thereof) is not otherwise restricted or prohibited from being disclosed by confidentiality obligations owed by THG to another person or Law, or is otherwise privileged;

deliver to the Buyer for comment details of any proposed action it intends to take or carry out in connection with or in respect of the THG Loan Reorganisation, take account of the reasonable comments of the Buyer and make such amendments to, or otherwise revise, any such proposed action on such basis as the Buyer may reasonably require, and shall not (without the prior written consent of the Buyer such consent not to be unreasonably withheld or delayed) take or agree to take any such proposed action; and

promptly (and, in any event, within 20 Business Days of the date of this Agreement) provide the Buyer with contact details (e-mail addresses and telephone numbers) for the relevant directors, officers and/or employees of CSL and Chaucer Corporate Capital (No.3) Limited responsible for managing the relationship between the Group and Lloyd’s in respect of the provision of Funds at Lloyd’s by Chaucer Corporate Capital (No.3) Limited (“FAL Staff”), use all reasonable endeavours to encourage the FAL Staff to meet with and discuss any issues raised by the Buyer in relation to the Chaucer Corporate Capital (No.3) Limited’s Funds at Lloyd’s and provide (and shall use all reasonable endeavours to encourage the FAL Staff to provide) any and all such assistance, cooperation and information as the Buyer may reasonably require or request in respect of and in connection with Lloyd’s written confirmation that it is satisfied with the form, substance and amount of the FAL including in relation to the 2019 business plan of any Group Company.

During the period commencing on the date of this Agreement and ending on (and including) the Completion Date:

the parties shall, and shall procure that the THG Group (in the case of THG) and the Buyer’s Group (in the case of the Buyer) shall, use all reasonable endeavors to assist the other in connection with (at the Buyer’s sole discretion, in relation to the decision between (i) and (ii) only):

the Buyer’s Group renegotiating the terms of the FAL LOC Facility Agreement and, to the extent necessary, the Charge over Account with the FAL LOC Finance Parties (including, without limitation, to reflect the change in the identity of the Parent thereunder and consequential matters) and agreeing any new security, guarantee or similar arrangements with the FAL LOC Finance Parties to replace the FAL LOC Guarantee, the THG Pledge Agreement and the THG Account Control Agreement, in each case to come into effect immediately upon Completion; or

the Buyer’s Group procuring the replacement of the letters of credit referred to in Schedule 11 with alternative arrangements for the provision of funds at Lloyd’s (whether by way of letter of credit or otherwise), to come into effect immediately upon Completion; and

irrespective of whether (i) or (ii) above applies, the release of the FAL LOC Guarantee, the THG Pledge Agreement and the THG Account Control Agreement immediately upon Completion;

in the event that the Buyer’s Group successfully agrees a renegotiated FAL LOC Facility Agreement and, to the extent necessary, Charge over Account with the FAL LOC Finance Parties, the parties shall, and shall procure that the THG Group (in the case of THG) and the Buyer’s Group (in the case of the Buyer) shall, provide each other with such assistance in connection with the implementation of such renegotiated terms as is reasonably necessary in order for such terms to come into effect immediately upon Completion (including, without limitation, in connection with the signing of documentation relating to the amendment of the FAL LOC Facility Agreement and, to the extent necessary, the Charge over Account and the delivery of any conditions precedent required by the FAL LOC Finance Parties in relation thereto) and the termination, cancellation and final settlement, discharge and release of all liabilities and obligations of THG under the FAL LOC Guarantee, the THG Pledge Agreement and the THG Account Control Agreement immediately upon Completion;

in the event that the Buyer’s Group does not agree amendments to the FAL LOC Facility Agreement with the FAL LOC Finance Parties, the parties shall each take such action and enter into such documentation as shall be reasonably necessary or desirable to achieve, prior to Completion, the termination, cancellation and final settlement, discharge and release of all liabilities and obligations of:

the relevant Group Companies under the FAL LOC Facility Agreement, any letters of credit thereunder and the Charge over Account (and the release of the security under the Charge over Account); and

THG under the FAL LOC Guarantee, the THG Pledge Agreement and the THG Account Control Agreement,

the parties shall each take such action and enter into such documentation as shall be reasonably necessary or desirable to achieve, upon Completion, the discharge and release in full of the obligations and liabilities past, present and future of THG pursuant to the THG Pledge Agreement and the FAL LOC Guarantee.

Immediately following the signature of this Agreement by the parties, THG shall deliver, or procure the delivery of, the following documents to the Buyer:

the Disclosure Letter executed by THG; and

for each Seller, a copy of, or extracts from, the minutes of a meeting of the board of each such company, authorising (in the case of THG only) the execution, delivery and completion of this Agreement and the Disclosure Letter and (in the case of each Seller) the performance of the transactions contemplated therein, as applicable.

Immediately following the signature of this Agreement by the parties, the Buyer shall deliver, or procure the delivery of, the following documents to THG:

the Disclosure Letter executed by the Buyer;

a letter of comfort from Central Huijin Investment Ltd indicating their intention to vote in favour of the Resolution; and

the Board Resolution.

On or after the satisfaction or waiver (as the case may be) of the last of the Conditions to be satisfied or waived, but not less than three Business Days prior to Completion, the Buyer shall notify the PRA, the FCA, Lloyd’s and the CBI of the proposed Completion Date.

If:

between the date of this Agreement and Completion, the Buyer becomes aware of any fact, matter or circumstance that constitutes a material breach of any of the Fundamental Warranties (or which would constitute a material breach of any of the Fundamental Warranties when repeated at Completion in accordance with Clause 8.1), then the Buyer shall, subject to Clauses 6.9.2 and 6.9.3, be entitled at any time prior to Completion to terminate this Agreement on 20 Business Days’ notice in writing to THG;

the Buyer gives notice to THG in accordance with Clause 6.9.1, then the Buyer shall not be entitled to exercise its right to terminate this Agreement pursuant to Clause 6.9.1 if the relevant breach is capable of remedy and, within 20 Business Days of receiving notice of the breach in accordance with Clause 6.9.1, the breach is remedied by THG (or the other Seller) so that, immediately following Completion, the Buyer will be in materially no worse a position than it would have been had there been no breach; and

this Agreement is terminated in accordance with Clause 6.9.1, then each party’s further rights and obligations under this Agreement shall, unless otherwise agreed upon in writing by the parties, immediately terminate and no party shall have a claim against the other party provided that:

termination shall not affect a party’s accrued rights, liabilities and obligations prior to and as at the date of termination; and

the rights and obligations of the parties under Clause 9, Clauses 13 to 18 (inclusive), Clause 20, Clauses 22 to 25 (inclusive) and Clause 27 and Clause 28, together with Clause 1 and any other provisions of this Agreement necessary for its interpretation or enforcement, shall remain in full force and effect.

COMPLETION

Completion shall take place outside the UK at such place agreed upon in writing by the parties on the Completion Date, when all the business referred to in Clauses 7.2 to 7.4 (inclusive) shall be transacted.

At Completion, THG shall deliver or shall procure the delivery to the Buyer of:

original executed transfers of the Shares in favour of the Buyer (or such other person as the Buyer directs) from each relevant Seller (as applicable) in the agreed form together with the share certificates for all the Shares (or an indemnity in the agreed form in the case of any missing, lost or destroyed certificates);

original powers of attorney in favour of the Buyer (or as it directs) in the agreed form executed by each relevant Seller (as applicable) to enable the Buyer (or other such person) to exercise all voting and other rights attaching to the Shares held by each such relevant Seller pending registration;

an original or copy of a letter of resignation from Jeffrey Farber in respect of each Group Company of which he is a director in the agreed form;

to the extent not in the possession of a Group Company, such share certificates showing the name of the relevant Company or another of the Group Companies as registered holder in respect of all the shares in each of the Subsidiaries as may be in the possession of THG (or an indemnity in the agreed form in the case of any missing, lost or destroyed certificates);

the original or copy of the HSIB Coverholder Agreement executed by HSIB and CSL on behalf of the Members of Syndicate 1084 and the HSIB transitional services agreement executed by HSIB and CSL;

the originals or copies of the executed agreements (or, as the case may be, deeds) and other relevant documentation effecting or, as applicable, evidencing the termination and final settlement, discharge and release of all liabilities and obligations of the relevant Group Companies under:

the THIC Loan and the THG Line of Credit;

the THG USD Loan and the THG AUD Loan pursuant to the THG Loan Reorganisation;

the Services Agreements;

the THIC Guarantee; and

the recharge agreement between THG and CSL dated 1 January 2016;

the originals or copies of the executed agreements (or, as the case may be, deeds) and other relevant documentation effecting or, as applicable, evidencing either (in each case to the extent entered into, without prejudice to the parties’ obligations with respect thereto under Clause 6.5):

the termination, cancellation and final settlement, discharge and release of all liabilities and obligations of the relevant Group Companies under the FAL LOC Facility Agreement, any letters of credit issued thereunder and the Charge over Account, as referred to in Clause 6.5.3; or

the amendment of the FAL LOC Facility Agreement and, to the extent necessary, the Charge over Account to reflect the renegotiated position reached with the FAL LOC Finance Parties, as described in Clause 6.5.2,

an original or a copy of the Transitional Services Agreement executed by THIC and CUSL;

an original or a copy of the agreements described in Clause 7.4.3(c) executed by THIC and CIC, and Clause 7.4.3(d) executed by the relevant parties;

an original or a copy of the Leakage Certificate;

an original or a copy of the MAE Certificate;

an original or a copy of a letter from Hanover Australia BidCo Pty Ltd to BGF Nominees Pty Ltd notifying BGF Nominees Pty Ltd of the change of control of SLE Holdings Pty Ltd, in accordance with Clause 7.5(a) of the share purchase agreement in relation to SLE Holdings Pty Ltd dated 1 July 2017;

to the extent not in the possession of a Group Company, such Leases as may be in the possession of THG;

to the extent not in the possession of a Group Company, such statutory books and minute books (which shall be written up to the time immediately prior to Completion) of each Group Company as may be in the possession of THG;

to the extent applicable, and to the extent not in the possession of a Group Company, the company authentication code for online filing with Companies House for each Group Company and confirmation as to which Group Companies have signed up to “protected online filing” with Companies House (otherwise known as “PROOF”), and the equivalent details (where available) for those Group Companies incorporated outside the UK;

to the extent required by the Buyer in connection with its obligations under Clauses 10.11 to 10.13 (inclusive), and to the extent not in the possession of a Group Company, the username and passwords for the Information Technology Systems (including any social media accounts opened by the Group) but excluding any Information Technology Systems that remain in THG’s control post-completion;

to the extent not in the possession of a Group Company, a copy of the board minutes of the board meetings referred to in Clause 7.3; and

an original or a copy of any power of attorney or other authority under which this Agreement or any document referred to in it is executed on behalf of THG.

At Completion, THG shall procure that a board meeting of each of the Group Companies is held at which the directors of each Group Company:

(in the case of each Company only) approve the registration of the share transfers referred to in Clause 7.2.1 (subject only to stamping); and

accept the resignations referred to in Clause 7.2.3 and the appointment of new directors nominated by the Buyer in advance of Completion (with such appointments being conditional on any regulatory approvals or consents which are required in advance from an Authority).

At Completion, the Buyer shall:

pay the Consideration in accordance with Clause 4.2;

deposit the Contingent Consideration into the Escrow Account in accordance with Clause 4.7; and

deliver to THG:

to the extent to which written evidence has not been provided by the Buyer to the reasonable satisfaction of THG prior to Completion, written evidence to the reasonable satisfaction of THG of the satisfaction of each of the Conditions (other than the MAE Condition);

an original or a copy of any power of attorney or other authority under which this Agreement or any document referred to in it is executed on behalf of the Buyer;

a novation, executed by the Buyer (or any other member of the Buyer’s Group designated by the Buyer), between the Buyer (or its designee), CIC and THIC wherein all rights, obligations and liabilities of THIC, whether past, present or future, under or in respect of the Quota Share Agreement are, with effect from 1 January 2018, assumed by the Buyer (or its designee), and THIC is released from and indemnified and held harmless against the same; and

(without prejudice to the parties’ obligation with respect thereto under Clause 6.5), a release document executed by Lloyds Bank plc, evidencing a total discharge and release of THG from any and all obligations, liabilities and security past, present or future under or in respect of the THG Pledge Agreement, the FAL LOC Guarantee and the THG Account Control Agreement.

If either party fails to comply with any obligation specified in Clause 7.2, Clause 7.3 or Clause 7.4 (as applicable), the other party shall be entitled by written notice to the party in breach:

to defer Completion for a period of up to ten Business Days (in which case the provisions of this Clause 7 shall apply to Completion as so deferred);

to require the parties to effect Completion so far as practicable having regard to the defaults that have occurred; or

subject to Completion having first been deferred under Clause 7.5.1, to terminate this Agreement, provided that:

termination shall not affect a party’s accrued rights, liabilities and obligations prior to and as at the date of termination; and

the rights and obligations of the parties under Clauses 3.11 to 3.14, Clauses 13 to 18 (inclusive), Clause 20, Clauses 22 to 25 (inclusive) and Clause 27 and Clause 28, together with Clause 1 and any other provisions of this Agreement necessary for its interpretation or enforcement, shall remain in full force and effect.

SELLER WARRANTIES AND INDEMNITIES

Subject to the provisions of Clause 8.3, THG warrants to the Buyer that the following statements are true and accurate as at the date of this Agreement and will be true and accurate as at Completion (as if repeated immediately before Completion):

it has all necessary power and authority to enter into and perform its obligations under this Agreement and the Transaction Documents;

each Seller is the sole legal and beneficial owner of the Shares held by it;

the HIIH Shares constitute the entire issued share capital of HIIH and are fully paid or credited as fully paid;

the CIC Shares constitute the entire issued share capital of CIC and are fully paid or credited as fully paid;

the HAH Shares constitute the entire issued share capital of HAH and are fully paid or credited as fully paid;

no person has the right or has claimed to have a right (whether exercisable now or at a future date and whether contingent or not) to subscribe for, convert any security into or otherwise acquire, any shares, debentures or other securities of any Company, including pursuant to an option or warrant;

there is no Encumbrance over any Shares, there is no subsisting agreement to create any such Encumbrance and no person has claimed to be entitled to any such Encumbrance;

no Company has exercised, nor purported to exercise or claim, any lien over its Shares;

the Shares are properly and validly issued in accordance with the constitutional documents of the applicable Company and Law;

no Company:

is insolvent or unable to pay its debts within the meaning of the Insolvency Act 1986; or

has stopped paying its debts as they fall due;

Insolvency Proceedings have not commenced in relation to any Company or (if applicable) any part of its assets or undertaking and, so far as THG is aware, no step has been taken, or threat has been made in writing, by any person in relation to any Company to commence Insolvency Proceedings;

no arrangement or compromise has been made by any Company with its creditors;

this Agreement and the Transaction Documents constitute (or will when executed constitute) binding and enforceable obligations on it in accordance with their respective terms;

the entering into and performance by it of its obligations under this Agreement and the Transaction Documents will not:

conflict with or result in a breach of any provision of its constitutional documents;

conflict with or result in a breach of, or constitute a default under, any agreement or instrument under which it enjoys rights or by which it is bound; or

conflict with or result in a breach of any law or regulation, or of any order, judgment or decree of any court or governmental, administrative or regulatory body or agency to which it is a party or by which it is bound;

save as set out in this Agreement, all or any consents, permissions, approvals, notices and agreements of third parties which are necessary for it to obtain in order to enter into and perform its obligations under this Agreement and the Transaction Documents in accordance with their respective terms have been unconditionally obtained or made in writing; and

no Insolvency Proceedings have commenced in relation to it.

Subject to the provisions of Clause 8.3, THG warrants to the Buyer that the General Warranties and the Boxed Tax Warranties are true and accurate as at the date of this Agreement.

The Warranties are subject to:

any matter which is fairly disclosed in the Disclosure Letter, including matters deemed to be or treated as fairly disclosed pursuant to the terms of the Disclosure Letter;

any matter which is fairly disclosed in the Data Room and/or the Disclosed Documents and/or this Agreement and/or any Transaction Document;

any matter or thing done or omitted to be done prior to Completion at the written request or direction of, or with the written approval of, the Buyer or any other member of the Buyer’s Group; and

the provisions of Clause 9.

Each of the Warranties is given by THG on behalf of itself and also, to the extent such warranty relates to CIC, on behalf of THIC, provided that any Warranty Claim may only be made by the Buyer against THG and not against THIC.

Each of the Warranties shall be interpreted as separate and independent.

The only Warranties given in relation to Taxation are the Boxed Tax Warranties and none of the other Warranties shall be deemed to be given in relation to Taxation.

THG makes no representation and gives no warranty or undertaking to the Buyer save only as and to the extent expressly set out in this Agreement. The Buyer shall not have any remedy in respect of any misrepresentation or untrue statement made (whether carelessly or not) by THG unless and to the extent that a claim lies for breach of the Warranties. In particular, THG disclaims all liability and responsibility for any representation, warranty, statement, opinion, information or advice made or communicated (orally or in writing) to the Buyer (including any representation, warranty, statement, opinion, information or advice made or communicated to the Buyer or any other member of the Buyer’s Group by any officer, director, employee, agent, consultant or representative of any Group Company or of any member of the THG Group, or otherwise made available by or on behalf of THG or contained in the Data Room and/or the Disclosed Documents) other than for breach of the Warranties.

Clause 8.7 shall not exclude any liability of THG for fraud.

THG undertakes to the Buyer and the applicable Group Companies that, subject always to the provisions of Clause 8.10, it shall irrevocably and unconditionally indemnify and promptly pay the Buyer and the applicable Group Companies in respect of any and all Losses suffered, sustained, incurred or paid by Buyer and the applicable Group Companies in excess of the applicable amounts reserved or provided for in the Locked Box Accounts in respect of the following material litigation:

the investigation by the New York Department of Financial Services (“NYDFS”) in relation to CSL’s participation in Lockton’s National Rifle Association (“NRA”) affinity scheme referred to by the NYDFS as “NRA Endorsed Insurance Programs/Lockton”, or any other investigation commenced by any other U.S. State in relation to the same;

Lincoln Adventures v. Lloyd’s of London and Certain Underwriters at Lloyd’s of London, et al (Civil Action No. 04-5184 (CCC) (D. New Jersey) – Putative Class Action filed on behalf of United States business entities that purchased insurance through the Lloyd’s market, brought against 23 Lloyd’s syndicates (including Syndicates 1084, 1096 and 1245); and

Julia Wieck vs. CIT Bank, N.A., Financial Freedom, Seattle Specialty Insurance Services, Inc., General Lender Services, Inc., Certain Underwriters’ at Lloyds of London, and Great Lakes Reinsurance (UK), PLC (Case No. 16-596 (RLP) (D. Hawaii) – Putative class action based on allegations involving “force-placed” insurance in reverse mortgages owned or serviced by Financial Freedom (a division of CIT Bank) though its agent, Seattle Specialty.

The aggregate liability of the indemnity provided by THG in respect of the matters identified in Clauses 8.9.1, 8.9.2 and 8.9.3 (“the Indemnified Matters”) shall be limited, and the resulting liability of the Buyer and the applicable Group Companies in respect of the Indemnified Matters shall be apportioned and borne as follows:

THG shall be solely liable under the indemnity in Clause 8.9 for Losses up to the aggregate amount of US$4,000,000 (inclusive of, and giving credit for all applicable amounts reserved or provided for in the Locked Box Accounts as at the Locked Box Date);

liability for any and all Losses suffered, sustained, incurred or paid by the Buyer after Completion and/or the applicable Group Companies (before or after Completion) in excess of the US$4,000,000 THG liability referred to in Clause 8.10.1 shall be borne as follows:

first, in respect of any liability up to a further US$2,000,000, (i) 50% by THG and (ii) 50% by the applicable Group Companies; and

finally, in respect of any liability in excess of that referred to in Clause 8.10.2(a), by THG solely; and

the Buyer and the applicable Group Companies undertake to THG that they will irrevocably and unconditionally indemnify and promptly pay THG in respect of any and all Losses suffered, sustained, incurred or paid by THG pursuant to Clause 8.9 and as limited by and subject to Clauses 8.10.1 and 8.10.2.

Following Completion, the Buyer undertakes that it shall, and will procure that the applicable Group Companies shall in regard to the Indemnified Matters:

keep THG advised of all developments and communications and correspondence exchanged between the participants in the Indemnified Matters;

provide THG with copies of all material correspondence and pleadings in the Indemnified Matters;

if requested by THG, give THG and its professional advisers reasonable access to personnel of the Buyer and/or the applicable Group Companies and the attorneys and professional advisers of the Buyer and/or the applicable Group Companies who are engaged in the conduct of the Indemnified Matters; and

not settle or make any admission of liability, agreement or compromise any claim or matter within or relating to the Indemnified Matters without the prior written consent of THG, such consent not to be unreasonably conditioned, withheld or delayed.

THG hereby undertakes to the Buyer to irrevocably and unconditionally indemnify and hold harmless the Buyer (or any member of the Buyer’s Group and the Group on its behalf) from all Losses which may arise against the Buyer or any member of the Buyer’s Group from, in connection with or by reference to the THG Loan Reorganisation. For the avoidance of doubt, this Clause 8.12 is subject paragraph 4 of Schedule 3.

LIMITATIONS ON THG’S LIABILITY

THG’s liability under this Agreement and any Transaction Document shall be limited or excluded (as the case may be) as follows:

THG shall not be liable in respect of any breach of the Warranties if and to the extent that the resulting Loss has been recovered under the Tax Covenant or vice versa; and

by the provisions of Schedule 3.

THG’s liability under the Tax Covenant and the Boxed Tax Warranties shall be further limited under the provisions of the Tax Covenant.

BUYER WARRANTIES, ACKNOWLEDGEMENTS, UNDERTAKINGS AND INDEMNITY

The Buyer warrants to THG that the Buyer Warranties are true and accurate as at the date of this Agreement and as at the Completion Date.

Each of the Buyer Warranties shall be interpreted as separate and independent.

The Buyer and THG acknowledge and agree that, with respect to the Buyer Warranty set out in paragraph 4 of Schedule 4, any damages which may be payable by Buyer to THG in respect of a breach of such Buyer Warranty shall not be based on, or otherwise calculated by reference to, the Break Fee.

The Buyer acknowledges and agrees that it has been given an opportunity to carry out an investigation into the affairs of each Group Company.

The Buyer agrees and undertakes that:

each of the SPVs (when incorporated) will at all times be duly incorporated and validly and lawfully in existence in accordance with Laws and be of good standing;

each of the SPVs shall, if and to the extent required by Laws, execute all necessary applications for the purposes of the Conditions in Clauses 3.1.1 to 3.1.7 inclusive;

on and with effect from the date of incorporation of the applicable SPV and again immediately prior to Completion, the Buyer gives and is deemed to give each of Buyer Warranties 1, 2, 3, 4 and 6 in respect of each SPV so that references to “the Buyer” shall be construed as references to each of the SPVs; and

Buyer will provide, and will procure that the SPVs provide, such evidence (other than any legal opinions) as to their due incorporation and legal status and good standing as THG may reasonably require from time to time.

The Buyer shall preserve for a period of at least seven years from Completion all books, records and documents of or relating to each Group Company existing at Completion. The Buyer shall permit and allow, and shall procure that each other member of the Buyer’s Group shall permit and allow, upon reasonable notice (and in any event on seven days’ written notice) and during normal business hours, the employees, agents and professional advisers of THG access to such books, records and documents and to inspect and make copies of them.

The Buyer acknowledges and agrees that, in the absence of fraud, the Buyer has no rights against and may not make any claim against any employee director, agent, officer or (except to the extent such adviser has entered into a reliance letter with the Buyer) adviser of THG or any member of the THG Group (or any Senior Employee or any individual named in Clause 1.9), on whom it may have relied before agreeing to any term of, or entering into, this Agreement or any Transaction Document, and each and every such person shall be entitled to enforce this Clause 10.7 under the Contracts (Rights of Third Parties) Act 1999.

THG acknowledges and agrees that, in the absence of fraud, THG has no rights against and may not make a claim against any Senior Employee or any individual named in Clause 1.9, on whom it may have relied before agreeing to any term of, or entering into, this Agreement or any Transaction Document, and each and every such person shall be entitled to enforce this Clause 10.8 under the Contracts (Rights of Third Parties) Act 1999.

The Buyer undertakes that, during the period from the date of this Agreement up to (and including) the date on which the Antitrust Condition is satisfied or waived (or, if earlier, the date on which this Agreement is terminated), it will not, either alone or acting in concert with others:

acquire or offer to acquire (or cause another person to acquire or to offer to acquire); or

progress or contemplate (or cause another person to progress or contemplate) arrangements that, if carried into effect, would result in the acquisition of,

The Buyer acknowledges and agrees that, other than as provided for in Clause 10.14, nothing in this Agreement shall transfer or licence, or shall operate as an agreement to transfer or licence, any right, title or interest in or to the name “Hanover” or any associated logo or device which the members of the THG Group own, or any similar name or mark. Following Completion, the Buyer shall not, and shall procure that no member of the Buyer’s Group shall, hold itself out as being part of or in any way connected with the THG Group.

Without prejudice to the provisions of Clause 10.10 above or the trade mark rights of the THG Group, the Buyer shall procure that for so long as any member of the THG Group continues to retain an interest in the name “Hanover” or any associated logo or device, no member of the Buyer’s Group shall use the name “Hanover” or any associated logo or device or any confusingly similar name or mark in the business of the Group, any extensions or developments thereto, or in a business which competes with the business of THG or any member of the THG Group in which the name “Hanover” or any associated logo or device is used.

The Buyer shall procure that each Group Company whose corporate name contains “Hanover” shall, as soon as reasonably practicable following Completion and in any event by the date falling 20 Business Days after Completion, pass all required resolutions to change its corporate name to a name which does not include “Hanover” or any confusingly similar name and shall procure the prompt registration of the new name with the appropriate court or registry. Upon receipt of confirmation from the appropriate court or registry that such name change has been effected, the Buyer shall provide THG with written proof that such name change has been effected.

The Buyer shall procure that each Group Company shall by the date falling 45 days after Completion, destroy or delete from existing stocks or sales literature and stationery or buildings, signage or vehicles, and social media and internet sites, the content of which is under the Buyer’s or a Group Company’s control, the word “Hanover”.

Notwithstanding anything expressed to the contrary in this Agreement (including in this Clause 10), the Buyer and the Group Companies may refer to the fact that the Group Companies used to be owned by THG prior to Completion.

The Buyer undertakes to THG that, within the period of time prescribed by Law after Completion, it shall, with respect to the sale and purchase of the Shares consummated by this Agreement, complete, in accordance with the requirements of SAFE, the necessary foreign exchange registrations for outbound direct investment with a bank designated by SAFE.

The Buyer undertakes, with effect from Completion, to THG that it shall irrevocably and unconditionally indemnify and promptly pay THG in respect of any and all Losses suffered, sustained, incurred or paid by THG and THIC (as applicable) relating to the New Pensions Guarantee and the THIC Guarantee.

In the event that by Law or by requirement of an Authority (including in order for any Group Company to remain or become in compliance with Law or requirements of any Authority), in each case in any jurisdiction, it is necessary prior to Completion to increase the aggregate Funds at Lloyd’s of any Corporate Member and THG notifies the Buyer in advance of the same and then provides, or (at the cost and expense of THG, such cost and expense not forming part of the indemnity coverage in this Clause 10.17) procures the provision by a third party of, any such additional Funds at Lloyd’s (including by way of loan of cash, subscription for additional share capital, provision of guarantees or letters of credit), the Buyer then undertakes irrevocably and unconditionally to indemnify and hold harmless THG and on and with effect from Completion promptly repay to THG, or on its behalf, all sums so provided by THG and procure the release and return of all securities, guarantees and letters of credit arranged by THG and (other than as provided for in this Clause 10.17 in respect of third party funding) to reimburse THG for all costs and expenses incurred therewith.

TAX

PROTECTION OF GOODWILL

Subject to Clause 12.2, THG covenants with the Buyer that without the written consent of the Buyer (such consent not to be unreasonably withheld, conditioned or delayed) for a period of 18 months commencing on Completion:

it will not acquire control (within the meaning of section 181 FSMA) of any Lloyd’s managing agent, provided that the foregoing shall not apply: (i) to any acquirer of any of the share capital of THG or any member of the THG Group; or (ii) in respect of any Lloyd’s managing agent acquired, directly or indirectly, by THG or any member of the THG Group after the date hereof as part of the acquisition of a larger group, to the extent that such Lloyd’s managing agent’s activities do not constitute more than (a) 25% of the revenues of such larger acquired group, or (b) 5% of THG’s revenues, in each case in the 12 months immediately preceding such acquisition; and

it (and it shall procure that the THG Group) will not, directly or indirectly, retain, canvass, solicit, induce or otherwise entice away any Senior Employee.

Nothing in Clause 12.1 shall prevent THG or any member of the THG Group from:

being the holder of, or beneficially interested in, any class of securities in any company if such class of securities is listed or dealt in on any recognised investment exchange (as defined in FSMA) and confers not more than 10% of the votes which can generally be cast at a general meeting of that company;

doing anything with the Buyer’s prior consent or at the direction of the Buyer or complying with or fulfilling its obligations under this Agreement;

conducting and continuing to conduct its other activities as at the date of this Agreement consistent with past practice, including HSIB acting as a coverholder for other Lloyd’s managing agents; or

employing any person whose employment, arrangement or engagement with the Group is terminated after Completion or advertising generally for staff and taking any candidate who applies as a result of such advertisement.

CONFIDENTIAL INFORMATION

Subject to Clause 13.2, each party shall treat the following information as confidential to the extent obtained as a result of or in connection with entering into this Agreement:

details of the provisions of this Agreement and any other agreement or arrangement entered into pursuant to or in connection with this Agreement;

information relating to the negotiations leading to the execution of this Agreement and any other agreement or arrangement entered into pursuant to or in connection with this Agreement;

in the case of THG, any information received or held by THG or any of its officers, employees, agents or advisers which relates to the Buyer and/or the Buyer’s Group or, following Completion, any of the Group Companies; and

in the case of the Buyer, any information received or held by the Buyer or any of its officers, employees, agents or advisers which relates to any and all of THG and/or any member of the THG Group or, prior to Completion, any of the Group Companies,

Any party may disclose information otherwise required by Clause 13.1 to be treated as confidential:

if and to the extent required by Law;

if and to the extent required by any Authority (including any Tax Authority) or securities exchange in any relevant jurisdiction (including in relation to the Buyer Shareholder Approval Condition);

to the extent required to enable such party to carry out its obligations under this Agreement;

in the case of the Buyer, to members of the Buyer’s Group, and to their employees, officers, agents, professional advisers, auditors or bankers, in each case from time to time;

in the case of THG, to members of the THG Group, and to their employees, officers, agents, professional advisers, auditors or bankers and to the Employees, officers, agents, professional advisers, auditors or bankers of the Group, in each case from time to time;

if and to the extent such information is or comes into the public domain through no fault of that party; or

if and to the extent each other party has given prior written consent to the disclosure.

Each party shall ensure that any person to whom Confidential Information is disclosed pursuant to Clause 13.2.4 or Clause 13.2.5 is made aware of the obligations of confidentiality contained in this Clause 13.

This Clause 13 supersedes the Non-Disclosure Agreement, provided that this Clause 13.4 shall not affect:

any rights, liabilities and obligations of THG or the Buyer accrued under the Non-Disclosure Agreement prior to the date of this Agreement; and

the rights and obligations of THG (and any member of the THG Group) and the Buyer under paragraphs 4 and 10 of the Non-Disclosure Agreement (together with any other provisions of the Non-Disclosure Agreement necessary for the interpretation or enforcement of such paragraphs) shall remain in full force and effect.

ANNOUNCEMENTS

Other than the Announcements (which the Buyer and THG may, respectively, make at any time on or after the date hereof), no party may make any press release or other public announcement (including any communication to any customers, suppliers or employees of any of the Group Companies) about this Agreement or the transactions contemplated by it except with the prior written consent of each other party (which shall not be unreasonably withheld or delayed).

Clause 14.1 shall not apply to a press release or other public announcement if and to the extent:

such announcement is required by Law or required by any Authority (including, for the avoidance of doubt, any Tax Authority) or securities exchange in any relevant jurisdiction; or

such announcement is required in order to facilitate any assignment or proposed assignment of the whole or any part of the rights and benefits under this Agreement which is permitted by Clause 18,

NOTICES

Any notice, consent or other communication given under this Agreement or in connection with the matters contemplated herein shall, except where otherwise specifically provided, be in writing and in English and addressed as provided in Clause 15.2, and shall be served:

by leaving it at the relevant address, in which case it shall be deemed to have been given upon delivery to that address;

if within the UK, by first class pre-paid post, in which case it shall be deemed to have been given two Business Days after the date of posting;

if from or to any place outside the UK, by air courier, in which case it shall be deemed to have been given two Business Days after its delivery to a representative of the courier;

if from or to any place outside the UK, by pre-paid airmail, in which case it shall be deemed to have been given five Business Days after the date of posting; or

by e-mail, in which case it shall be deemed to have been given when dispatched provided there is no automatically generated notice of message delivery failure.

Notices under this Agreement shall be sent for the attention of the person and to the address or e-mail address, subject to Clause 15.3:

A party may from time to time notify the other parties of any other person (or persons) or address (or addresses) for the receipt of notices or copy notices. Any such change shall take effect five Business Days after notice of the change is received or (if later) on the date (if any) specified in the notice as the date on which the change is to take place.

Any notice, consent or other communication given in accordance with Clause 15.1 and received after 5.30 p.m. on a Business Day, or on any day which is not a Business Day, shall for the purposes of this Agreement be regarded as received on the next Business Day.

TERMINATION

Subject to Clause 16.2, no party shall have any right to rescind or terminate this Agreement prior to Completion for any reason whatsoever (including, without limitation, for breach of any Fundamental Warranty).

This Agreement may only be terminated pursuant to and in accordance with Clause 3.10, Clause 6.8 or Clause 7.5.

COSTS

Subject to Clauses 3.11, 3.12, 17.2 and 17.3, each party shall bear its own costs and expenses in connection with the preparation, negotiation, execution and performance of this Agreement and the documents referred to in it.

THG shall bear, and undertakes to the Buyer to promptly reimburse the Buyer or, at the Buyer’s direction, the applicable Group Company, all after Tax costs to the applicable Group Companies of any Retention and Success Payments, based on a hypothetical completion date of 30 September 2018 and as illustrated in the “Project Hydrangea Retention Summary”, dated 31 May 2018 in the Data Room at document 6.4.7.1.

THG shall bear, and, on and with effect from Completion, undertakes to the Buyer to irrevocably and unconditionally indemnify and hold harmless the Buyer (or any applicable Group Company on its behalf) from all Losses in respect of any finder’s fee or brokerage or other commission paid by any Group Company in connection with this Agreement or the sale of the Shares to the Buyer.

For the avoidance of all doubt, all stamp, transfer, registration and other similar Tax, duties and charges arising on the transfer of the Shares pursuant to this Agreement shall be paid by the Buyer.

ASSIGNMENT

This Agreement shall be binding on and enure for the benefit of the successors and personal representatives of the parties.

No party shall assign, transfer, charge, make the subject of a trust or deal in any other manner with this Agreement or any of its rights under this Agreement or purport to do any of the same without the prior written consent of the other party save that:

THG shall be entitled at any time and on more than one occasion on not less than ten Business Days’ written notice to Buyer to assign all (but not some only) of its rights and benefits under this Agreement to any member of the THG Group (each such person being a “THG Permitted Assignee”), provided that if any THG Permitted Assignee, following such assignment, ceases to be a member of the THG Group, then THG shall procure that such THG Permitted Assignee shall immediately prior to ceasing to be a member of the THG Group, assign all of its rights and benefits under this Agreement back to THG or to another member of the THG Group and provided always that any continuing party’s liability to any such assignee in respect of the rights assigned pursuant to this Clause 18.2.1 shall not be greater than if no assignment had taken place; and

the Buyer shall be entitled at any time and on more than one occasion on not less than ten Business Days’ written notice to THG to assign all (but not some only) of its rights and benefits under this Agreement to any member of the Buyer’s Group (each such person being a “Buyer’s Permitted Assignee”) or, by way of security, to any bank(s) and/or financial institution(s) (and any related hedge counterparties, agents and trustees) lending money or making other banking facilities available to the Buyer or any other member of the Buyer’s Group, provided that if any Buyer’s Permitted Assignee, following such assignment, ceases to be a member of the Buyers’ Group, then the Buyer shall procure that such Buyer’s Permitted Assignee shall immediately prior to ceasing to be a member of the Buyer’s Group, assign all of its rights and benefits under this Agreement back to the Buyer or to another member of the Buyer’s Group and provided always that any continuing party’s liability to any such assignee in respect of the rights assigned pursuant to this Clause 18.2.2 shall not be greater than if no assignment had taken place.

For the avoidance of doubt, notwithstanding any permitted assignment in accordance with Clause 18.2, in no circumstances shall the assigning party be entitled to transfer its obligations and liabilities relating to this Agreement or to the performance of the transactions contemplated therein and the assigning party shall remain liable to the non-assigning party, including as an assignor on behalf of any assignee.

FURTHER ASSURANCES

CUMULATIVE RIGHTS AND REMEDIES

The rights, powers, privileges and remedies provided by this Agreement are cumulative and (except as otherwise provided in this Agreement) are not exclusive of any rights, powers, privileges or remedies provided by Law.

Each party acknowledges and agrees that, if there is a breach by a party of any of the obligations and/or undertakings in this Agreement (including, by way of example, those set out in Clauses 3, 6, 7, 12, 13 and 14), the remedies which may be otherwise available to the innocent party may be inadequate to fully compensate the innocent party for any loss or damage caused by such breach and, therefore, each party agrees that, in addition to any other rights or remedies that the innocent party may have under Law upon a breach or potential breach, of any of the obligations and/or undertakings in this Agreement, the innocent party may seek equitable relief. Nothing in this Agreement (other than Clause 3.11) shall be construed as excluding or otherwise limiting the right of a party to seek interim or conservatory measures, emergency or injunctive relief or specific performance of an obligation and/or undertaking of the other party in this Agreement.

EFFECT OF COMPLETION

WAIVER AND VARIATION

In no event will any delay, failure or omission (in whole or part) in enforcing, exercising or pursuing any right, power, privilege, claim or remedy conferred by or arising under this Agreement or by Law, whether by conduct or otherwise, be deemed to be or be construed as a waiver of that or any other right, power, privilege, claim or remedy in respect of the circumstances in question, or operate so as to bar the enforcement of that, or any other right, power, privilege, claim or remedy, in any other instance at any time or times subsequently.

A waiver of any right or remedy under this Agreement shall only be effective if given in writing and shall not be deemed a waiver of any subsequent breach or default.

No variation or amendment of this Agreement shall be valid unless it is in writing and duly executed by or on behalf of each party to this Agreement. Unless expressly agreed, no variation or amendment shall constitute a general waiver of any provision of this Agreement, nor shall it affect any rights or obligations under or pursuant to this Agreement which have already accrued up to the date of variation or amendment and the rights and obligations under or pursuant to this Agreement shall remain in full force and effect except and only to the extent that they are varied or amended.

SEVERANCE

If any provision of this Agreement shall be found by any court or administrative body of competent jurisdiction to be illegal, invalid or unenforceable, such illegality, invalidity or unenforceability shall not affect the other provisions of this Agreement which shall remain in full force and effect.

ENTIRE AGREEMENT

This Agreement and the Transaction Documents constitute the entire agreement and understanding of the parties relating to the subject matter of this Agreement and the Transaction Documents and supersede and extinguish any previous agreement or understanding between the parties (or any of them) in relation to such subject matter.

Each of the parties acknowledges and agrees that in entering into this Agreement and the Transaction Documents, he or it has not relied on any statement, representation, warranty, understanding, undertaking, promise or assurance of any person (whether party to this Agreement or any Transaction Document or not) or arrangement of any nature whatsoever, whether or not in writing, which is not expressly set out in this Agreement (a “Pre-contractual Statement”).

Each party agrees that:

no party to this Agreement shall have any right or remedy (whether by way of a claim for contribution or otherwise) in respect of any Pre-contractual Statement;

other than where expressly stated in this Agreement, the sole remedy of a party in respect of: (i) any misrepresentation, whether negligent or otherwise, and whether made prior to, or in, this Agreement; or (ii) any other breach of this Agreement, including any breach of the Warranties, shall be an action for breach of contract under the terms of this Agreement; and

other than where expressly stated in this Agreement: (i) no party may rescind this Agreement for any non-fraudulent misrepresentation, whether or not contained in this Agreement and/or the Transaction Documents, and (ii) no party may terminate this Agreement.

Nothing in this Clause 24 shall limit or exclude any liability for fraud.

CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999

Notwithstanding any other provision of this Agreement, the parties may by agreement in writing rescind or vary any of the provisions of this Agreement without the consent of any third party, and accordingly section 2(1) Contracts (Rights of Third Parties) Act 1999 shall not apply.

A person who is not a party to this Agreement shall have no right under the Contracts (Rights of Third Parties) Act 1999 to rely upon or enforce any term of this Agreement, save that Clause 10.7 may be enforced by those persons specified therein. This Clause 25.2 shall not affect any right or remedy of a third party which exists or is available apart from the Contracts (Rights of Third Parties) Act 1999.

COUNTERPARTS

GOOD FAITH

LAW AND ARBITRATION

The validity, construction and performance of: (i) this Agreement (including, for the avoidance of any doubt, Clause 28.2 below); (ii) any claim, dispute or matter arising under or in connection with it or its enforceability); and (iii) any non-contractual obligations arising out of or in connection with it, shall be governed by and construed in accordance with the law of England and Wales without regard to the conflicts-of-law provisions thereof.

Any dispute, controversy, or claim arising out of, relating to, or in connection with this Agreement, including with respect to the formation, applicability, breach, termination, validity or enforceability thereof, shall be resolved by arbitration. The arbitration shall be conducted by three arbitrators, in accordance with the rules of the London Court of International Arbitration (the “LCIA Rules”) in effect at the time of the arbitration, except as they may be modified herein or by mutual agreement of the parties. The LCIA Rules are deemed to be incorporated by reference to this Clause 28.2. The claimant shall nominate an arbitrator in its request for arbitration. The respondent shall nominate an arbitrator within 30 days of the receipt of the request for arbitration. The two arbitrators nominated by the parties shall nominate a third arbitrator within 30 days after the nomination of the later-nominated arbitrator. The third arbitrator shall act as chair of the tribunal. If any of the three arbitrators are not nominated within the time prescribed above, then the LCIA shall appoint the arbitrator(s). The seat of the arbitration shall be Singapore. The arbitration shall be conducted in the English language. The arbitration award shall be final and binding on the parties, and the parties undertake to carry out any award without delay. Judgment upon the award may be entered by any court having jurisdiction of the award or having jurisdiction over the relevant party or its assets and any application may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be.

THE GROUP COMPANIES

The particulars of the Companies and the Subsidiaries set out in Schedule 1 are correct. The issued shares referred to therein were properly and validly issued in accordance with the constitutional documents of the applicable Group Company (other than any Company, which is warranted separately in Clause 8.1) and Law, and constitute the entire issued share capital of each such Group Company and are fully paid (or credited as fully paid).

The Companies do not have any subsidiary undertaking other than the Subsidiaries.

No person has the right or has claimed to have a right (whether exercisable now or at a future date and whether contingent or not) to subscribe for, convert any security into or otherwise acquire, any shares, debentures or other securities of any Group Company (other than any Company, which is warranted separately in Clause 8.1), including pursuant to an option or warrant.

There is no Encumbrance over any issued or unissued shares or other unissued securities in the capital of any Group Company (other than any Company, which is warranted separately in Clause 8.1), there is no subsisting agreement to create any such Encumbrance and no person has claimed to be entitled to any such Encumbrance.

No Group Company (other than any Company, which is warranted separately in Clause 8.1) has exercised, nor purported to exercise or claim, any lien over its issued shares.

No Group Company uses on its letterhead, books or vehicles any name or otherwise carries on its business under any name other than its corporate name or the name “Chaucer”, “Chaucer Dublin”, “SLE”, “SLE Worldwide”, “Pacific Underwriters” or “Lonham” or the registered trademarks listed in Schedule 7.

Document 1.1.1.1 disclosed in the Data Room includes reference to certain of the Group Companies being dormant. In respect of such Group Companies, there are no residual liabilities.

No Dormant Subsidiary has carried on any trade or otherwise carried on business (or disposed for value any property or rights that it held for the purpose of disposal for gain in the normal course of trading or otherwise carrying on business) in the two years ending on the date of this Agreement. Other than as set forth in their respective statutory statements, no Dormant Subsidiary has any assets or liabilities or owns (legally or beneficially) any Intellectual Property.

No Group Company:

has any interest in or is under a subsisting obligation to acquire any interest in any shares, debentures or other securities of any other body corporate other than another Group Company; or

other than participation as a consortium member in the ordinary course of insurance or reinsurance business, is or has agreed to become a member of any partnership or other unincorporated association, joint venture or consortium.

No Group Company has any agency, place of business, permanent establishment or branch outside its jurisdiction of incorporation.

INSOLVENCY

No Group Company (other than any Company, which is warranted separately in Clause 8.1):

is insolvent or unable to pay its debts within the meaning of the Insolvency Act 1986; or

has stopped paying its debts as they fall due.

Insolvency Proceedings have not commenced in relation to any Group Company (other than any Company, which is warranted separately in Clause 8.1) or (if applicable) any part of its assets or undertaking and, so far as THG is aware, no step has been taken, or threat has been made in writing, by any person in relation to any such Group Company to commence Insolvency Proceedings.

No arrangement or compromise has been made by any Group Company (other than any Company, which is warranted separately in Clause 8.1) with its creditors.

ACCOUNTS

The THG Segmental Accounts:

present fairly, in all material respects, the state of the Group’s affairs as at the Accounts Date and of its profits for the financial year ended on the Accounts Date;

have been prepared and, with respect to 31 December 2017, audited, in compliance with Law and accounting standards generally accepted in the U.S. as at the date they were prepared; and

have been prepared on a consistent basis for the previous three financial years ended on the Accounts Date, using the same accounting principles, practices, estimation techniques, measurement bases, procedures and policies (including in relation to the exercise of accounting discretion or judgement), except as disclosed in the THG Segmental Accounts.

The HIIH Accounts:

give a true and fair view of the state of HIIH’s affairs as at the Accounts Date and of its profits for the financial year ended on the Accounts Date;

have been prepared and audited in compliance with the Act and accounting standards generally accepted in the UK as at the date they were prepared; and

have been prepared on a consistent basis for the previous three financial years ended on the Accounts Date, using the same accounting principles, practices, estimation techniques, measurement bases, procedures and policies (including in relation to the exercise of accounting discretion or judgement), except as disclosed in the HIIH Accounts.

The CIC Accounts:

give a true and fair view of the state of CIC’s assets, liabilities and financial position as at the Accounts Date and CIC’s losses for the financial period ended on the Accounts Date; and

have been prepared and audited in compliance with the Irish Companies Act 2014 and accounting standards generally accepted in the Republic of Ireland as at the date they were prepared.

The HAH Accounts:

give a true and fair view of the HAH Group’s financial position as at the Accounts Date and of its financial performance for the financial year ended on the Accounts Date; and

have been prepared and audited in compliance with the Australian Corporations Act 2001 and accounting standards generally accepted in Australia as at the date they were prepared.

The Other Group Company Accounts:

give a true and fair view of the state of the applicable Group Company’s assets, liabilities and financial position as at the Accounts Date and of its profits or losses (as applicable) for the financial period ended on the Accounts Date;

have been prepared and (where required by Law) audited in compliance with the Law and accounting standards generally accepted in the jurisdiction of the applicable Group Company’s incorporation as at the date they were prepared; and

have been prepared on a consistent basis for the previous three financial years ended on the Accounts Date, using the same accounting principles, practices, estimation techniques, measurement bases, procedures and policies (including in relation to the exercise of accounting discretion or judgement), except as disclosed in the applicable Other Group Company Accounts.

The Management Accounts have been prepared with reasonable care and, having regard to the purpose for which they were prepared (i.e., unaudited, consolidated management accounts), give a reasonably accurate view of the assets, liabilities and financial position of the Group and of its profits, and are not misleading in any material respect.

The Locked Box Accounts:

have been prepared with reasonable care and, except in respect of: (i) U.S. Taxation; (ii) the THG USD Loan; and (iii) the THG AUD Loan, in a manner consistent with the same accounting principles, practices, estimation techniques, measurement bases, procedures and policies (including in relation to the exercise of accounting discretion or judgement) of THG used in preparing its publicly filed accounts in accordance with U.S. generally accepted accounting principles; and

having regard to the purpose for which they were prepared (i.e., as the reference accounts for the purpose of enabling the Buyer to calculate the Consideration), give a reasonably accurate view of the assets, liabilities and financial position of the Group and of its profits, and are not misleading in any material respect.

Since the Locked Box Date, except as specifically provided, specifically reserved or accrued for, specifically referred to or specifically noted in the Accounts, the Management Accounts or the Locked Box Accounts:

the business of each Group Company has been carried on in the ordinary course so as to maintain the business as a going concern;

no distributions within the meaning of Part 23 of the Act have been declared, paid or made by any Group Company;

no share or loan capital of any Group Company has been or agreed to be issued, allotted, redeemed, purchased, reduced or repaid by any Group Company;

no material board resolution of any Group Company has been passed and no resolution of the members of any Group Company has been passed (or, if a written resolution, circulated and passed);

no Group Company has disposed of or acquired, or agreed to dispose of or acquire, or is negotiating to dispose of or acquire:

any business of, or any shares, debentures or other securities in, a body corporate;

any interest in, any business of or shares, debentures or other securities in, a body corporate, other than in the ordinary and proper course of business of the Group Company in question; or

any other material asset, or interest in any other such material asset, or has assumed or incurred any material liabilities (whether actual or contingent), other than in the ordinary and proper course of business of the Group Company in question;

no additional Financial Obligation has been incurred or repaid by any Group Company and no Group Company has repaid all or part of any debt owed by it in advance of the due date for repayment, or agreed to do so, or has written off or released any debt owing to it (save where such debt is owed by one Group Company to or from another Group Company);

there has been no material change in the policy or procedures by which the Group Companies collect their debts;

the Group Companies have paid their creditors in the ordinary course of business and within the normal period for payment to those creditors;

no Group Company has dismissed any, or made any material alteration to the terms of employment (including change in control benefits, severance arrangements, or other benefits) of any, Senior Employee; and

no agreement or transaction has been entered into by any Group Company except in the ordinary course of carrying on its business and on arm’s length terms.

COMPLIANCE WITH LAWS

LICENCES, CONSENTS AND REGISTRATIONS

Each Group Company holds all registrations, licences, authorisations and consents necessary to carry on its business in all jurisdictions in which it carries on any material business as at the date of this Agreement, and those registrations, licences, authorisations and consents are all valid and subsisting.

No Group Company is in material breach of any of the provisions of any such registration, licence, authorisation or consent as is referred to in paragraph 5.1 of this Schedule 2 and, so far as THG is aware, there are no existing circumstances which might give rise to any such registration, licence, authorisation or consent of any Group Company being revoked, terminated, suspended or modified or which might prejudice its renewal.

No material adverse reports have been issued to any Group Company by any Authority within the three years ending on the date of this Agreement specifically in respect of the Group Companies’ operations and affairs.

AUTHORISATIONS

CSL is authorised by the PRA and regulated by the FCA, the PRA and Lloyd’s and is in possession of all requisite permissions, authorisations and consents from the FCA, the PRA and Lloyd’s in order for it to conduct its business as a managing agent at Lloyd’s in the manner carried on as at the date of this Agreement. Its registration, regulation, permissions, authorisations and consents: (i) are not subject to any specific or exceptional directions, conditions or requirements given or imposed by the FCA, the PRA or Lloyd’s; and (ii) have not at any stage within the five years ending on the date of this Agreement been withdrawn and no notice has been given to CSL to the effect that (and so far as THG is aware no circumstances exist such that) such registration, regulation, permissions, authorisations and consents will be withdrawn or made subject to any directions, conditions or requirements which are not and would not be of general application to all managing agents.

Each of the Corporate Members is duly admitted to membership of Lloyd’s pursuant to the Membership Byelaw (No. 5 of 2005).

CSL has permission from the Franchise Board to act as a managing agent at Lloyd’s and to manage the Syndicates and Syndicate 6130. Its registration as a managing agent is not subject to any specific or exceptional directions, conditions or requirements given or imposed by the Franchise Board under paragraph 63 of the Underwriting Byelaw (No. 2 of 2003).

Lonham Group Limited is registered with Lloyd’s as a Service Company Coverholder and is also authorised and regulated by the FCA and is in possession of all requisite permissions, authorisations and consents from Lloyd’s and the FCA in order for it to conduct its business in the manner carried on as at the date of this Agreement. Its registration, regulation, permissions, authorisations and consents are not subject to any specific or exceptional directions, conditions or requirements given or imposed by Lloyd’s or the FCA and have not at any stage within the five years ending on the date of this Agreement been withdrawn and

CIC is authorised and regulated by the CBI and subject to limited regulation by the FCA and the PRA and is in possession of all requisite registrations, permissions, authorisations and consents from the CBI in order for it to conduct its business as an insurance company in the manner carried on as at the date of this Agreement. Its registration, regulation, permissions, authorisations and consents are not subject to any specific or exceptional directions, conditions or requirements given or imposed by the CBI and have not at any stage within the five years ending on the date of this Agreement been withdrawn and no notice has been given to CIC to the effect that (and so far as THG is aware no circumstances exist such that) such registration, regulation, permissions, authorisations and consents will be withdrawn or made subject to any directions, conditions or requirements which are not and would not be of general application to insurance companies operating in Ireland or any other jurisdictions in which CIC operates (including, without limitation, its UK branch).

Chaucer Singapore Pte Ltd is registered with Lloyd’s as a Service Company Coverholder and is registered with and regulated by Lloyd’s of London (Asia) Pte Ltd and is also regulated by MAS and is in possession of all requisite permissions, authorisations and consents from Lloyd’s, Lloyd’s of London (Asia) Pte Ltd, and MAS in order for it to conduct its business in the manner carried on as at the date of this Agreement. Its registration, regulation, permissions, authorisations and consents are not subject to any specific or exceptional directions, conditions or requirements given or imposed by Lloyd’s, Lloyd’s of London (Asia) Pte Ltd or MAS and have not at any stage within the five years ending on the date of this Agreement been withdrawn and no notice has been given to Chaucer Singapore Pte Ltd to the effect that (and so far as THG is aware no circumstances exist such that) such registration, regulation, permissions, authorisations and consents will be withdrawn or made subject to any directions, conditions or requirements which are not and would not be of general application to Service Company Coverholders operating in Singapore or any other jurisdictions in which Chaucer Singapore Pte Ltd operates.

Chaucer Labuan Limited is registered with Lloyd’s as a Service Company Coverholder and is also regulated by the Central Bank of Malaysia and is in possession of all requisite permissions, authorisations and consents from Lloyd’s and the Central Bank of Malaysia in order for it to conduct its business in the manner carried on as at the date of this Agreement. Its registration, regulation, permissions, authorisations and consents are not subject to any specific or exceptional directions, conditions or requirements given or imposed by Lloyd’s or the Central Bank of Malaysia and have not at any stage within the five years ending on the date of this Agreement been withdrawn and no notice has been given to Chaucer Labuan Limited to the effect that (and so far as THG is aware no circumstances exist such that) such registration, regulation, permissions, authorisations and consents will be withdrawn or made subject to any directions, conditions or requirements which are not and would not be of general application to Service Company Coverholders operating in Malaysia or any other jurisdictions in which Chaucer Labuan Limited operates.

Chaucer Underwriting A/S is registered with Lloyd’s as a Service Company Coverholder and is also regulated by the Danish Financial Supervisory Authority and is in possession of all requisite permissions, authorisations and consents from Lloyd’s and the Danish Financial Supervisory Authority in order for it to conduct its business in the manner carried on as at the date of this Agreement. Its registration, regulation, permissions, authorisations and consents

Chaucer Oslo A/S is regulated by the Financial Supervisory Authority of Norway and is in possession of all requisite permissions, authorisations and consents from Lloyd’s and the Financial Supervisory Authority of Norway in order for it to conduct its business in the manner carried on as at the date of this Agreement. Its registration, regulation, permissions, authorisations and consents are not subject to any specific or exceptional directions, conditions or requirements given or imposed by Lloyd’s or the Financial Supervisory Authority of Norway and have not at any stage within the five years ending on the date of this Agreement been withdrawn and no notice has been given to Chaucer Oslo A/S to the effect that (and so far as THG is aware no circumstances exist such that) such registration, regulation, permissions, authorisations and consents will be withdrawn or made subject to any directions, conditions or requirements which are not and would not be of general application to coverholders operating in Norway or any other jurisdictions in which Chaucer Oslo A/S operates.

Chaucer MENA Underwriting Limited is registered with Lloyd’s as a Service Company Coverholder and is also regulated by the Dubai Financial Services Authority and is in possession of all requisite permissions, authorisations and consents from Lloyd’s and the Dubai Financial Services Authority in order for it to conduct its business in the manner carried on as at the date of this Agreement. Its registration, regulation, permissions, authorisations and consents are not subject to any specific or exceptional directions, conditions or requirements given or imposed by Lloyd’s or the Dubai Financial Services Authority and have not at any stage within the five years ending on the date of this Agreement been withdrawn and no notice has been given to Chaucer MENA Underwriting Limited to the effect that (and so far as THG is aware no circumstances exist such that) such registration, regulation, permissions, authorisations and consents will be withdrawn or made subject to any directions, conditions or requirements which are not and would not be of general application to Service Company Coverholders operating in Dubai or any other jurisdictions in which Chaucer MENA Underwriting Limited operates.

Each of SLE Worldwide Pty Limited and Pacific Underwriting Corporation Pty Ltd is registered with Lloyd’s as an approved coverholder and is also regulated by the Australian Securities and Investments Commission and is in possession of all requisite permissions, authorisations and consents from Lloyd’s and the Australian Securities and Investments Commission in order for it to conduct its business in the manner carried on as at the date of this Agreement. Their registration, regulation, permissions, authorisations and consents are not subject to any specific or exceptional directions, conditions or requirements given or imposed by Lloyd’s or the Australian Securities and Investments Commission and have not at any stage within the five years ending on the date of this Agreement been withdrawn and no notice has been given to SLE Worldwide Pty Limited and Pacific Underwriting Corporation Pty Ltd to the effect that (and so far as THG is aware no circumstances exist such that) such registration, regulation, permissions, authorisations and consents will be withdrawn or made subject to any directions, conditions or requirements which are not and would not be of general application to coverholders operating in Australia or any other jurisdictions in which SLE Worldwide Pty Limited and Pacific Underwriting Corporation Pty Ltd operate.

The Data Room sets out all material details of any undertakings, guarantees, indemnities or securities given by any member of the THG Group to all regulators to which the Group Companies are subject in respect of the regulated Group Companies, which are different to or outside the scope of those usually required by the relevant regulator in connection with such registration.

The Data Room contains all material correspondence with all regulators to which the Group Companies are subject within the past three years relating to the regulated Group Companies.

CSL has, prior to the date of this Agreement, and with reference to Lloyd’s requirements for obtaining change of control approval under paragraph 43 of the Underwriting Byelaw:

made informal notification to Lloyd’s Head of Risk Management, Senior Operational Risk Manager or Risk Executive of the proposed change of control of CSL and of the Corporate Members; and

explored with Lloyd’s Tax Department any tax implications arising from the said changes of control.

CONDUCT OF BUSINESS

In the five years ending on the date of this Agreement, CSL has complied in all material respects with Lloyd’s Regulations and any requirements imposed by the PRA, the FCA or their predecessors, as necessary in connection with the conduct of its business as a managing agent in general and of the business of the Syndicates and Syndicate 6130.

In the five years ending on the date of this Agreement, all reports and notices in respect of CSL and/or the Syndicates (including Syndicate 6130) which must be submitted by CSL pursuant to the PRA Rulebook or FSMA have been filed, deposited or submitted in a timely fashion and have been complete and accurate in all material respects.

In the five years ending on the date of this Agreement, all accounts, reports, statements and other information and documentation required under Lloyd’s Regulations to be prepared and maintained by a managing agent have in all material respects been properly prepared and maintained by CSL (and where necessary filed with Lloyd’s).

In the five years ending on the date of this Agreement, none of the PRA, the FCA or Lloyd’s has notified CSL or THG that it has initiated any investigation or disciplinary or enforcement proceedings against CSL or any of its officers or employees and, so far as THG is aware, there are no likely grounds for any such investigation or proceedings.

CSL does not carry on and has not at any time in the five years ending on the date of this Agreement carried on any business other than that of acting as managing agent at Lloyd’s.

In the five years ending on the date of this Agreement, CSL has not entered into or become party by novation to any underwriting agency agreement with any Member other than in the form of the Managing Agent’s Agreement in the form prescribed by Lloyd’s.

There are Managing Agent’s Agreements in force between CSL and each member of the Syndicates and Syndicate 6130 in respect of the appointment by each member of CSL as managing agent of each Syndicate or Syndicate 6130 (as applicable). CSL has not given to or received from any Member of a Syndicate and/or Syndicate 6130 as constituted for the 2018 Year of Account notice to terminate the Managing Agent’s Agreement between CSL and such Member (or CSL’s appointment under such agreement) or applied to Lloyd’s for permission to give any such notice, and CSL has not received notice of any intention on the part of any such Member not to underwrite for the 2019 Year of Account as a member of that Syndicate and/or Syndicate 6130.

There are no agreements, written or otherwise, which supplement or vary any provision of the Members’ Agent’s Agreements, Agent’s Agreements or Managing Agent’s Agreements between CSL and the Members (or their agents) of each Syndicate and/or Syndicate 6130 for any Year of Account which has not closed or entitle any person to share in, or claim from CSL any monies by reference to, the fees or profit commissions to which CSL is entitled thereunder.

The conduct by CSL of the underwriting business of each Syndicate and/or Syndicate 6130 is and has at all times in the five years ending on the date of this Agreement been carried out within the powers conferred by and in all material respects in accordance with the terms and conditions of the Members’ Agent’s Agreements, Agent’s Agreements or Managing Agent’s Agreements between CSL and each Member and so far as THG is aware there have been no acts or omissions on the part of CSL, its officers, employees or agents which constitute or may constitute a material breach (whether in contract, tort, trust or otherwise) of the duties CSL owes to any Member or members’ agent.

All CSL binding authority agreements are on standard Lloyd’s Market Association terms.

So far as THG is aware there has not been on the part of the managing agent’s trustees appointed by CSL any breach of trust or of any fiduciary obligations in respect of any trust established or maintained pursuant to Lloyd’s Regulations for the purposes of the business of each Syndicate (and/or Syndicate 6130) and CSL.

So far as THG is aware, CSL has in all material respects at all times complied with its fiduciary obligations in relation to funds coming into its hands and required to be treated as trust assets in connection with the business of each Syndicate and/or Syndicate 6130.

All funds of each Syndicate and Syndicate 6130 are properly entered in the books and records of that syndicate and are invested and held in accordance with the relevant premiums and other trust deeds or instruments and Lloyd’s Regulations.

So far as THG is aware all outward reinsurance agreements and arrangements in respect of each Syndicate and/or Syndicate 6130 are valid and enforceable, and, other than in the ordinary course of insurance and reinsurance claims arising in respect of a Group Company’s participation in any syndicate, there are no disputes (and THG is not aware of any circumstances which exist which are likely to give rise to any dispute) under any such agreements and arrangements.

The audited annual financial statements of each Syndicate and Syndicate 6130 for the year ended 31 December 2017:

have been prepared in accordance with Law and UK Accounting Standards including FRS 102 and in accordance with The Insurance Accounts Directive (Lloyd’s Syndicate and Aggregate Accounts) Regulations 2008; and

give a true and fair view of that syndicate’s affairs as at 31 December 2017 and of its profit for the year then ended.

In the five years ending on the date of this Agreement, each Service Company has complied in all material respects with applicable Lloyd’s Regulations and any requirements imposed by the relevant regulator or its predecessors, as necessary in connection with the conduct of its business.

In the five years ending on the date of this Agreement, no regulator has notified a Service Company, CSL or THG that it has initiated any investigation or disciplinary or enforcement proceedings against a Service Company or any of its officers or employees, and, so far as THG is aware, there are no likely grounds for any such investigation or proceedings.

Each Service Company does not carry on and, in the five years ending on the date of this Agreement, has not at any time carried on any business other than that of acting as a service company at Lloyd’s.

In the five years ending on the date of this Agreement, each of SLE Worldwide Pty Limited, Pacific Underwriting Corporation Pty Ltd and CIC has complied in all material respects with any requirements imposed by their relevant regulator or its predecessors, as necessary in connection with the conduct of its business.

In the five years ending on the date of this Agreement, no regulator has notified SLE Worldwide Pty Limited, Pacific Underwriting Corporation Pty Ltd, CIC or THG that it has initiated any investigation or disciplinary or enforcement proceedings against SLE Worldwide Pty Limited, Pacific Underwriting Corporation Pty Ltd or CIC or any of their officers or employees, and, so far as THG is aware, there are no likely grounds for any such investigation or proceedings.

SLE Worldwide Pty Limited and Pacific Underwriting Corporation Pty Ltd do not carry on and have not at any time carried on any business other than that of acting as a managing general agent.

CIC does not carry on and has not at any time carried on any business other than that of acting as an insurance company.

Since inception, all reports and notices in respect of CIC which must be submitted by CIC pursuant to CBI regulations have been filed, deposited or submitted in a timely fashion and have been complete and accurate in all material respects.

Each Group Company has at all times complied with obligations in respect of the payment of dividends (including, without limitation, any and all undertakings to the PRA in relation to the payment of any dividend in excess of its dividend policy level).

In 2018, CSL established a new Broker Remuneration Review Committee and, since the date of such establishment, has acted in accordance with the terms of reference of such committee, a copy of which has been disclosed in the Data Room. Since their introduction, all non-standard broker remuneration agreements are considered in accordance with the requirements of such updated policies and procedures and approved by such Broker Remuneration Review Committee before being entered into by CSL (whether on its own behalf or on behalf of the Members of the Syndicates).

CSL, in the context of acting as managing agent of Lloyd’s syndicate 1176, and the Members of syndicate 1176 participate in various nuclear pools. In connection with such arrangements, neither CSL nor any other Group Company has provided information, support or advice, other than in compliance with Law. So far as THG is aware, where CSL or any other Group Company has provided any such information, support and/or advice (including, without limitation, actuarial support) to any such nuclear pools, the provision of such information, support, and/or advice has not resulted in CSL or any other Group Company owing any material duty or responsibility or having any liability to any members of those nuclear pools other than the Members of syndicate 1176 in connection with CSL’s appointment as the managing agent of syndicate 1176.

So far as THG is aware, there has been no material breach of the Framework Agreement in respect of Syndicate 6130 dated 18 April 2016 and entered into between Chaucer Syndicates Limited, NRF 2200 Limited, NRF 100 Limited and AXA Africa Specialty Risks Holding Limited in the last two years (the “AXA Agreement”).

CORPORATE MEMBERS, OTHER MEMBERS & FAL

None of the Corporate Members has conducted any business other than that of being a corporate member at Lloyd’s and none of the Corporate Members has participated on any syndicate at Lloyd’s other than the Syndicates.

The Funds at Lloyd’s requirement and member’s syndicate premium limits of each of the Corporate Members for the 2015, 2016, 2017 and 2018 Years of Account are disclosed in the Data Room.

Each of the Members of the 2018 Year of Account of the Syndicates and/or Syndicate 6130 has deposited with Lloyd’s the full amount of their Funds at Lloyd’s requirements in relation to the coming into line process for the 2018 Year of Account and such Funds at Lloyd’s remain at the levels required by Lloyd’s for the continued underwriting by such syndicates in accordance with the current syndicate business plan for the relevant syndicate.

The Data Room contains complete and accurate copies of all arrangements entered into by each Corporate Member relating to the provision of Funds at Lloyd’s to support a Corporate Member’s participation, or reinsurance of a Corporate Member’s participation on the 2015-2018 Years of Account of the Syndicates.

CSL has provided to all Members of the Syndicates and/or Syndicate 6130 all disclosures which CSL is required to provide in respect of their participation on such syndicates.

There are no matters that could lead to a conflict of interest between the interests of CSL and the Members of the Syndicates and/or Syndicate 6130, other than those of a Lloyd’s managing agent acting in the ordinary course of business at Lloyd’s.

The Data Room contains complete and accurate descriptions of the participations by Members on all Years of Account of Syndicate 6124. Syndicate 6124 has been reinsured to close and there remain no further open Years of Account of that syndicate and no further responsibility for the management of such syndicate remains with CSL, save for the ordinary residual responsibility that applies to a Lloyd’s managing agent of a Lloyd’s syndicate that has been reinsured to close into a Year of Account of a Lloyd’s syndicate managed by another Lloyd’s managing agent.

All liabilities arising under Reinsured Policies as defined in the Quota Share Reinsurance Agreement dated 30 June 2015 between (inter alia) the Member of Lloyd’s constituting Syndicate 1084 for 2013, 2014 and 2015 underwriting years of account and the Member of Lloyd’s constituting Syndicate 6124 for the 2015 underwriting year of account have been reinsured to close into syndicate 1274 and there remain no further underwriting liabilities in respect of the UK division that remain for the account of the Members of Syndicate 1084 that have not been reinsured to close into syndicate 1274 and no further responsibility for the management of such underwriting remains with CSL, save for the ordinary residual responsibility that applies to a Lloyd’s managing agent of a Lloyd’s syndicate where liabilities of that syndicate have been reinsured to close into a Year of Account of a Lloyd’s syndicate managed by another Lloyd’s managing agent.

ACTUARIAL

The Data Room contains all actuarial reports by external actuaries with respect to the Syndicates and/or Syndicate 6130 commissioned by CSL within the three year period ending on the date of this Agreement.

CSL complies in all material respects with generally accepted actuarial standards and professional guidance when completing its actuarial and reserving calculations.

CSL has not materially changed any of its methodologies for making actuarial and reserving calculations in the last three years.

All premiums, claims and reinsurance claims information that has been provided in the Data Room is true, complete and accurate in all material respects.

The data provided to PricewaterhouseCoopers LLP in connection with their preparation of the External Actuarial Report and Ernst & Young LLP in connection with their preparation of the Limited Review Report was true, complete and accurate in all material respects when provided to each adviser.

DATA PROTECTION

Where required by the Data Protection Legislation, the Group has implemented written policies and procedures, provided written notices to data subjects, and taken steps to obtain written consents from data subjects, in each case, with respect to personal data used in, or otherwise processed in relation to, the business pursuant to Data Protection Legislation.

No written information notice or written enforcement notice or other written correspondence has been received by the Group in the three years ending on the date of this Agreement from the Information Commissioner or any other competent authority or industry body alleging non-compliance or requiring compliance with Data Protection Legislation.

There is not, and has not been in the three years ending on the date of this Agreement, any claim or action, and, so far as THG is aware, there is no fact or circumstance that is likely to give rise to a claim or action, against any Group Company for material non-compliance with the Data Protection Legislation, either from an Authority or an individual.

There is not, and, in the five years ending on the date of this Agreement, there has not been, any suspected or actual personal data breach affecting the Group.

ANTI-BRIBERY AND CORRUPTION

Each Group Company and their respective officers and employees in the course of their respective duties have in the three years ending on the date of this Agreement complied with:

all applicable Anti-corruption Laws; and

the Group’s anti-bribery and corruption policy.

No director, officer or employee of a Group Company nor, so far as THG is aware, any consultant or other person who is not a director, officer or employee of a Group Company who performs or has performed services for or on behalf of any Group Company has paid, promised to pay or authorised the payment of any money, or offered, given or promised to give or authorise the giving anything of value to any other person intending to obtain or retain business or an advantage in the conduct of business for any Group Company.

The Group has in place adequate procedures in line with the guidance published by the Secretary of State under section 9 of the Bribery Act 2010 designed to prevent the Group and their Associated Persons (as defined in section 8(1) Bribery Act 2010) from engaging in any activity, practice or conduct which would constitute an offence under Anti-corruption Laws.

BOOKS, RECORDS AND RETURNS

The register of members of each Group Company has been properly kept and contains accurate records of the present members of the relevant Group Company and is in the possession of the relevant Group Company.

The constitutional documents provided in the Data Room are up-to-date, are complete and accurate copies, and contain true, complete and accurate details required by Law.

The accounting and other statutory books and registers and all other records required to be kept by each Group Company under Law:

are in the possession and ownership, under the control of, or held to the order of that Group Company;

are up-to-date; and

contain complete and accurate details of the matters which should be dealt with in those books, registers and records in accordance with Law.

No written claim has been made that any of the books, registers and records referred to in paragraph 12.1 or paragraph 12.3 are incorrect or should be rectified.

CONTRACTS

Complete and accurate copies of all Material Agreements have been disclosed in the Data Room.

So far as THG is aware, no:

Group Company has terminated, or given notice in writing to terminate any Material Agreement;

party to any Material Agreement that is not a Group Company has terminated or given notice in writing to a Group Company to terminate any Material Agreement; and

Group Company has materially breached or materially defaulted under any Material Agreement and no claim or other assertion of any material breach or material default has been made in writing against a Group Company and, so far as THG is aware, no other party to any Material Agreement has materially breached or is in material default of those agreements.

Other than as disclosed in the Data Room, no Material Agreement may be terminated or varied as a result of the change of control of the Group arising from the sale of the Shares contemplated by this Agreement.

Other than as disclosed in the Data Room, no Group Company is a party to any Material Agreement which:

is not in the ordinary course of business or which is not on arm’s length terms;

cannot be terminated by that Group Company on less than six months’ notice without compensation; or

involves agency, partnership or other unincorporated association, joint venture, consortium, shareholders or similar arrangements.

Copies of all reinsurance, excess of loss and risk transfer agreements under which any Group Company has ceded material liabilities are contained in the Data Room.

So far as THG is aware, with respect to the transactions referred to in Folders 12.1.6.2, 12.1.6.4 and 12.1.6.6 of the Data Room, there are no claims (including any warranty or indemnity claims) which have been made (whether or not outstanding or threatened as the date of this Agreement), by or against the relevant Group Company, or under the terms of any warranty and indemnity insurance purchased by the Group, and that have not otherwise been fairly disclosed in the Data Room.

RELATED PARTY TRANSACTIONS

FINANCIAL OBLIGATIONS

Other than as disclosed in the Data Room, no:

Group Company has any obligation outstanding for the payment or repayment of monies borrowed, whether present or future, actual or contingent (a “Financial Obligation”);

Group Company has entered into or agreed to enter into any agreement or arrangement the purpose of which is to raise money or provide finance or credit or to guarantee or indemnify any Financial Obligation or to prevent or limit loss in respect of any Financial Obligation;

event or circumstance has occurred or, so far as THG is aware, may occur with the giving of notice or lapse of time, determination of materiality or satisfaction of any other condition, which does or may result in any Financial Obligation becoming due and payable before its normal or originally stated maturity or which otherwise alters the right of any Group Company to draw money or exercise its rights under an agreement relating to a Financial Obligation;

Group Company has subsisting over the whole or any part of its present or future revenues or assets any Encumbrance; and

Financial Obligation of any Group Company has become or is now due and payable, or capable of being declared due and payable, before its normal or originally stated maturity and no demand or other notice requiring the payment or repayment of money before its normal or originally stated maturity has been received by any Group Company.

There is not outstanding:

any loan made by any Group Company to, or debt owing to any Group Company by, any director of any Group Company or any person connected with any of them;

any agreement or arrangement to which any Group Company is a party and in which any director of any Group Company or any person connected with any of them has a material interest; or

other than in the ordinary course of business, any guarantee or security given by, or, so far as THG is aware, for the benefit of, any Group Company.

OWNERSHIP AND POSSESSION OF ASSETS

All assets used by any Group Company in the course of its business as carried on at the date of this Agreement (other than any asset held under a finance lease, hire purchase and rental or credit sale agreement) are legally and beneficially owned by that Group Company free from Encumbrances, and no person has claimed in writing to be entitled to an Encumbrance in respect of any such asset.

Each Group Company owns or has the right to use each asset necessary for the operation of the business of the relevant Group Company as carried on at the date of this Agreement.

All of the tangible assets owned by any Group Company, or which any Group Company has the right to use, are in the possession and ownership or under the control of that Group Company.

INSURANCE

The Data Room contains copies of all material insurance or indemnity policies currently maintained by any Group Company (other than in its capacity as an insurer, reinsurer or reinsured) (each, an “Insurance Policy”).

No material claim is outstanding under any Insurance Policy and, so far as THG is aware, no event has occurred which is likely to give rise to any claim under any Insurance Policy and all Insurance Policies are in full force and effect.

All premiums due on the Insurance Policies have been paid and, so far as THG is aware, there are no existing circumstances which are likely to result in an increase in premium or make any Insurance Policy void or voidable.

Each Group Company has at all times effected all insurances required by Law.

CLAIMS AND POLICIES

So far as THG is aware, within the last two years there has been no material failure by CSL or CIC to administer or comply with any Policies in accordance with their terms which, taken individually or collectively, has resulted, or so far as THG is aware will result, in a material adverse effect on CSL, the Syndicates, Syndicate 6130 or CIC.

The policyholder records of CSL and CIC are sufficient to enable CSL or CIC to deal with material claims arising under the Policies in all material respects.