PDF version of this press release - Royal and Sun Alliance

(a)
(b)
(c)
(d)
(e)
(f)
the right of the Noteholder to receive: (i) periodic financial information; and (ii) access
to books and records of the Purchaser and the US Operation as reasonably required to
monitor the Purchaser’s obligations under the Notes;
the consent of the Noteholder to: (i) any sale or, in certain circumstances set forth in
the Notes, acquisition of, any equity interests in any of the US Operation by the
Purchaser; or (ii) the sale of all, or any, significant portion of the assets of the US
Operation;
prior regulatory approval for any sale of any assets of the US Operation, or acquisition
of assets by the US Operation, up to and including the fourth anniversary date of
Completion (other than transactions undertaken in the ordinary course of business and
in other limited exceptions set forth in the Notes);
a limitation on the ability of the US Operation to enter into affiliated party transactions
(other than for compensation of officers and directors and certain other exceptions set
forth in the Notes);
a limitation on payments to holders of equity of the Purchaser if the Purchaser is not
current on its payment obligations under the Notes; and
an obligation to seek to cause the US subsidiaries that are insurance companies to
declare dividends after the fourth anniversary, so long as such dividends are consistent
with commitments, made by the Purchaser to the regulators, and in the reasonable
judgment of the relevant board of directors, would not materially adversely impact the
ability of any such entity to satisfy, or be imprudent in light of, such entity’s potential
future obligations to policyholders.
4. Representations, warranties and indemnities
Under the Purchase Agreement, the Sellers have made certain limited representations and warranties,
concerning, among other things, their authority to enter into the Purchase Agreement, the US Operation
and their ownership of the partnership interests of Arrowpoint General Partnership. These
representations and warranties are subject to certain disclosures. The Purchaser has also made
certain customary representations and warranties pursuant to the terms of the Purchase Agreement.
These representations and warranties are subject to certain disclosures.
Each of the Purchaser and the Sellers has agreed to indemnify the other party for losses arising from
breaches of their representations, warranties and covenants under the Purchase Agreement. The
representations and warranties of each of the Purchaser and Sellers survive Completion for a period of
18 months.
The indemnification obligations of the Sellers and the Purchaser for losses arising from breaches of
their respective representations and warranties are limited to US$50 million in aggregate and a
minimum threshold of US$100,000 per loss. Apart from the Purchaser’s and the Sellers’ indemnity for
breaches of their respective representations and warranties, the indemnities of the parties are not limited
in time or amount.
5. Capital contribution
With Completion the Group will make a capital contribution of US$287.5 million (£151 million) into
the US Regulated Entities.
6. Continuation of existing support arrangements by the Core Group to the US Operation
after Completion
The Group has a number of historical financial and contractual arrangements with the US Operation,
which will need to remain in place post Completion, but which will be amended as a result of the
Disposal. These existing agreements include, among others:
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