<PAGE>
As filed with the Securities and Exchange Commission on August 9, 1996
Registration Number
--------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
ALLEGHANY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 51-0283071
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
375 Park Avenue
New York, New York 10152
(212) 752-1356
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
Robert M. Hart, Esq.
Senior Vice President, General Counsel
and Secretary
Alleghany Corporation
375 Park Avenue
New York, New York 10152
(212) 752-1356
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
--------------
Copies to:
Linda E. Ransom, Esq.
Donovan Leisure Newton & Irvine
30 Rockefeller Plaza
New York, New York 10112
(212) 632-3350
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration
Statement.
<PAGE>
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment plans,
please check the following box. [ ]
<PAGE>
<PAGE>
If any of the securities being registered on this Form are to
be offered on a delayed or continuous basis pursuant to Rule 415
under the Securities Act of 1933, other than securities offered
only in connection with dividend or interest reinvestment plans,
check the following box. [x]
If this Form is filed to register additional securities
for an offering pursuant to Rule 462(b) under the Securities
Act, please check the following box and list the Securities Act
registration statement number of the earlier effective registra-
tion statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same
offering. [ ]
If delivery of the prospectus is expected to be made pursuant
to Rule 434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
==============================================================================
PROPOSED PROPOSED
TITLE OF EACH MAXIMUM MAXIMUM AMOUNT
CLASS OF AMOUNT OFFERING AGGREGATE OF
SECURITIES TO TO BE PRICE PER OFFERING REGISTRATION
BE REGISTERED REGISTERED UNIT (1) PRICE (1) FEE
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Common Stock,
par value $1.00
per share 37,245 $189.00 $7,039,305 $2,427.35
==============================================================================
(1) Estimated for the sole purpose of computing the registration
fee. Pursuant to Securities Act Rule 457(c), the proposed
maximum offering price per unit is calculated as the average
of the high and low prices, reported by the New York Stock
Exchange, Inc., of the common stock of the registrant as of
August 6, 1996.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE
UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO
SAID SECTION 8(A) MAY DETERMINE.
<PAGE>
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR
TO THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF
THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR
SALE WOULD BE UNLAWFUL, PRIOR TO REGISTRATION OR QUALIFICATION
UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED AUGUST 9, 1996
PROSPECTUS
37,245 SHARES
ALLEGHANY CORPORATION
COMMON STOCK
This Prospectus relates to 37,245 shares (the
"Shares") of common stock, par value $1.00 per share (the
"Common Stock"), of Alleghany Corporation ("Alleghany") being
offered for the accounts of certain persons named herein
under "Selling Stockholders" (the "Selling Stockholders") or
by pledgees, donees, transferees or other successors in
interest of the Selling Stockholders ("Transferees").
Alleghany will not receive any of the proceeds from the sale
of the Shares being offered hereby.
The Common Stock of Alleghany is listed on the
New York Stock Exchange under the trading symbol "Y." On
August 6, 1996, the reported last sale price of the Common
Stock of Alleghany on the New York Stock Exchange was
$189.00.
The Shares offered by this Prospectus may be
offered and sold by the Selling Stockholders or Transferees
from time to time in one or more open market transactions on
the New York Stock Exchange, in negotiated transactions, or
<PAGE>
otherwise (or in any combination of such methods of sale), in
each case at market prices prevailing at the time of sale, at
prices related to such prevailing market prices, or at
negotiated prices. Accordingly, sales prices and proceeds to
the Selling Stockholders or Transferees will depend upon
price fluctuations and the manner of sale. The Selling
Stockholders or Transferees may effect such transactions by
selling to or through one or more broker-dealers, and such
broker-dealers may receive compensation in the form of
underwriting discounts, brokerage commissions or similar fees
from the Selling Stockholders or Transferees in amounts which
may vary from transaction to transaction. The Selling
Stockholders, Transferees and any broker-dealers that
participate in the distribution may be deemed to be
"underwriters" within the meaning of Section 2(11) of the
Securities Act of 1933, as amended (the "Securities Act"),
and any commissions received by them and any profits realized
on the resale of Shares by them may be deemed to be
underwriting discounts and commissions under the Securities
Act. The Selling Stockholders or Transferees may agree to
indemnify such broker-dealers against certain liabilities,
including liabilities under the Securities Act. The Selling
Stockholders have advised Alleghany that they have not
entered into any agreements, understandings or arrangements
with any underwriters or broker-dealers regarding the sale of
the Shares being offered hereby. See "Plan of Distribution"
and "Selling Stockholders."
The Selling Stockholders may be unable to sell a
portion of their Shares being offered hereby at certain times
because of the withholding arrangements described herein
under "Selling Stockholders."
Alleghany has agreed to pay certain costs and
expenses in connection with the registration of the Shares
being offered hereby, estimated at $25,000; however, all
other expenses incident to the disposition by each Selling
Stockholder or Transferee of the Shares held by him, her or
it, including brokerage commissions, shall be borne by such
Selling Stockholder or Transferee. See "Selling
Stockholders."
--------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
<PAGE>
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
--------------
The date of this Prospectus is August , 1996.
<PAGE>
<PAGE>
AVAILABLE INFORMATION
Alleghany is subject to the informational require-
ments of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance therewith files
reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such
reports, proxy statements and other information filed by
Alleghany with the Commission may be inspected and copied at
the public reference facilities maintained by the Commission
at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the regional offices of the
Commission in New York (Seven World Trade Center, Suite 1300,
New York, New York 10048) and Chicago (500 West Madison
Street, Suite 1400, Chicago, Illinois 60661). Copies of such
materials also may be obtained at prescribed rates from the
Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549. Such material may also
be inspected at the offices of the New York Stock Exchange,
Inc. (20 Broad Street, New York, New York 10005). Alleghany
is an electronic filer, and the Commission maintains a Web
site that contains reports, proxy and information statements
and other information regarding registrants (including
Alleghany) that file electronically with the Commission. The
address of the Commission's Web site is: http://www.sec.gov.
Alleghany has filed with the Commission a Registra-
tion Statement on Form S-3 (of which this Prospectus is a
part) under the Securities Act with respect to the Shares
being offered hereby. This Prospectus does not contain all
of the information set forth in the Registration Statement,
certain portions of which have been omitted as permitted by
the rules and regulations of the Commission. Statements made
in this Prospectus as to the contents of any contract,
agreement, instrument or other document are not necessarily
complete, and in each instance reference is made to the copy
of such contract, agreement, instrument or document filed as
an exhibit to the Registration Statement, each such statement
being qualified in all respects by such reference and the
exhibits and schedules thereto.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission
by Alleghany (File No. 1-9371) are incorporated herein by
reference and made a part hereof:
<PAGE>
(1) Alleghany's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995, which
incorporates by reference certain portions of
(i) Alleghany's 1995 Annual Report to Stockholders,
including financial statements, notes thereto and
accompanying information, and (ii) Alleghany's
Proxy Statement dated March 28, 1996, relating to
its Annual Meeting of Stockholders held on
April 26, 1996;
(2) Alleghany's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1996 and June 30, 1996;
and
(3) the description of the Common Stock of Alleghany
contained in its Registration Statement on Form 10
filed pursuant to Section 12 of the Exchange Act,
which incorporates by reference certain portions of
Alleghany's Proxy Statement dated November 26, 1986
relating to its Special Meeting of Stockholders
held on December 19, 1986; such description is
qualified in its entirety by reference to the
(i) Restated Certificate of Incorporation of
Alleghany, as amended, and (ii) By-Laws of
Alleghany, as amended, filed as Exhibits 3.1 and
3.2, respectively, to the Registration Statement of
which this Prospectus is a part, and any amendment
or report filed for the purpose of updating that
description.
All documents filed by Alleghany pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the
termination of the offering of the Shares being offered
hereby shall be deemed to be incorporated by reference in
this Prospectus and made a part hereof from the date of
filing of such documents.
Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that a statement contained
herein or in any other document subsequently filed with the
Commission which also is or is deemed to be incorporated by
reference herein or in any Prospectus Supplement modifies or
supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
<PAGE>
Alleghany hereby undertakes to provide without
charge to each person to whom a copy of this Prospectus is
delivered, upon written or oral request of any such person, a
copy of any and all documents that have been incorporated by
reference in this Prospectus, other than exhibits to any such
documents unless such exhibits themselves are specifically
incorporated by reference in such document. Such requests
should be directed to the Secretary of Alleghany Corporation,
375 Park Avenue, New York, New York 10152, telephone number
(212) 752-1356.
<PAGE>
<PAGE>
ALLEGHANY CORPORATION
Alleghany was incorporated in 1984 under the laws
of the State of Delaware. In December 1986, Alleghany
succeeded to the business of its parent company, Alleghany
Corporation, a Maryland corporation incorporated in 1929,
upon the parent company's liquidation.
Alleghany's principal executive offices are located
at 375 Park Avenue, New York, New York 10152 and its
telephone number is (212) 752-1356. Alleghany is engaged,
through its subsidiaries Chicago Title and Trust Company
("CT&T"), Chicago Title Insurance Company, Security Union
Title Insurance Company and Ticor Title Insurance Company and
their subsidiaries, in the sale and underwriting of title
insurance and in other real estate-related services
businesses, and through CT&T's subsidiary, Alleghany Asset
Management, Inc. and its subsidiaries, in certain other
financial services businesses. Alleghany is also engaged,
through its subsidiary Underwriters Reinsurance Company, in
the property and casualty reinsurance and insurance
businesses. In addition, Alleghany is engaged, through its
subsidiaries World Minerals Inc., Celite Corporation,
Harborlite Corporation and Europerlite Acquisition
Corporation and their subsidiaries, in the industrial
minerals business. Alleghany conducts a steel fastener
importing and distribution business through its Heads and
Threads division.
USE OF PROCEEDS
Alleghany will not receive any of the proceeds from
sales of the Shares being offered hereby. See "Selling
Stockholders" for a list of those persons who will receive
the proceeds from such sales.
SELLING STOCKHOLDERS
The Shares offered hereby were issued to the
Selling Stockholders in connection with a business
combination in which Market Intelligence, Inc. ("Market
Intelligence") was merged (the "Merger") into a subsidiary of
Alleghany ("New Market Intelligence"). New Market
Intelligence is engaged in the business of real estate
property evaluation services. Pursuant to the merger
agreement, Alleghany agreed to use its reasonable best
efforts to register the Shares being offered hereby. The
<PAGE>
merger agreement also provides that the expenses incurred in
connection with the registration of the Shares being offered
hereby (including, without limitation, registration fees,
printing or document reproduction expenses, and fees and
expenses of Alleghany's counsel and accountants) are to be
borne by Alleghany, and all other expenses incident to the
disposition by each Selling Stockholder or Transferee of the
Shares held by him or her (including, without limitation,
fees and expenses of his or her counsel and all underwriting
discounts, if any, brokerage commissions and similar fees)
are to be borne by such Selling Stockholder or Transferee.
In addition, Alleghany has agreed to indemnify the Selling
Stockholders against certain liabilities arising out of or
due to actual or alleged material misstatements or omissions
in the Registration Statement of which this Prospectus is a
part (other than liability arising from information supplied
by a Selling Stockholder expressly for use in the
Registration Statement), and the Selling Stockholders jointly
and severally have agreed to indemnify Alleghany against
certain liabilities arising from actual or alleged material
misstatements or omissions in such Registration Statement
which arise out of or are due to material misstatements or
omissions in the information supplied by the Selling
Stockholders expressly for use in such Registration
Statement. 3,723 Shares (the "Withheld Shares") registered
in the names of the Selling Stockholders were withheld by
Alleghany from the Selling Stockholders in proportion to
their ownership interests in Market Intelligence immediately
prior to the closing, pending the resolution of certain
claims, if any, by Alleghany or New Market Intelligence for
indemnification under the merger agreement. Because the
determination of such claims for indemnification, if any, is
expected by 1997 year-end, such Shares are included in the
Shares being offered hereby.
The names of the Selling Stockholders, their
positions, offices or other material relationships with
Market Intelligence and New Market Intelligence, and the
number of shares of Alleghany Common Stock owned by them and,
subject to the withholding arrangements described above,
offered hereby are set forth below. Except with respect to
their ownership of the common stock of Market Intelligence
prior to the Merger and except as set forth below, none of
the Selling Stockholders has had a material relationship with
Alleghany or any of its predecessors or affiliates within the
past three years. Except as set forth below, none of the
Selling Stockholders beneficially owns any shares of
Alleghany Common Stock. If all of the Shares offered by this
<PAGE>
Prospectus are sold by the Selling Stockholders, no Selling
Stockholder will own any shares of Alleghany Common Stock
after completion of the offering.
MARK P. SENNOTT: Mr. Sennott is President, Chief
Executive Officer and Clerk of New Market Intelligence.
Prior to the Merger, Mr. Sennott was a Director and, from
June 28, 1996, President of Market Intelligence. From May 6,
1996 until the Merger, he also served as Clerk of Market
Intelligence. Prior to June 28, 1996, he was Executive Vice
President of Market Intelligence. Mr. Sennott owns 12,415
Shares, including 1,241 Withheld Shares, all of which are
offered for sale pursuant to this Prospectus.
ROBERT F. SENNOTT, JR.: Mr. Sennott is Executive
Vice President, Marketing and Business Development, of New
Market Intelligence. Prior to the Merger, Mr. Sennott was a
Director and, from June 28, 1996, Executive Vice President
of Market Intelligence. Prior to June 28, 1996, he was
President of Market Intelligence and, prior to May 6, 1996,
he also served as Clerk of Market Intelligence. Mr. Sennott
owns 12,415 Shares, including 1,241 Withheld Shares, all of
which are offered for sale pursuant to this Prospectus.
BRYANT R. LINARES: Mr. Linares is Executive Vice
President, Strategic Development and Technology, and
Treasurer of New Market Intelligence . Prior to the Merger,
Mr. Linares was a Director and Executive Vice President and
Treasurer of Market Intelligence. Mr. Linares owns 12,415
Shares, including 1,241 Withheld Shares, all of which are
offered for sale pursuant to this Prospectus.
PLAN OF DISTRIBUTION
The Shares offered by this Prospectus may be
offered and sold by the Selling Stockholders or Transferees,
from time to time in one or more open market transactions on
the New York Stock Exchange, in negotiated transactions, or
otherwise (or in any combination of such methods of sale), in
each case at market prices prevailing at the time of sale, at
prices related to such prevailing market prices, or at
negotiated prices. Accordingly, sales prices and proceeds to
the Selling Stockholders or Transferees will depend upon
price fluctuations and the manner of sale. The Selling
Stockholders or Transferees may effect such transactions by
selling to or through one or more broker-dealers, and such
broker-dealers may receive compensation in the form of
underwriting discounts, brokerage commissions or similar fees
<PAGE>
from the Selling Stockholders or Transferees in amounts which
may vary from transaction to transaction. The Selling
Stockholders, Transferees and any broker-dealers that
participate in the distribution may be deemed to be
"underwriters" within the meaning of Section 2(11) of the
Securities Act, and any commissions received by them and any
profits realized on the resale of Shares by them may be
deemed to be underwriting discounts and commissions under the
Securities Act. The Selling Stockholders may agree to
indemnify such broker-dealers against certain liabilities,
including liabilities under the Securities Act. See "Selling
Stockholders." The Selling Stockholders have advised
Alleghany that they have not entered into any agreements,
understandings or arrangements with any underwriters or
broker-dealers regarding the sale of the Shares being offered
hereby.
The Selling Stockholders may be unable to sell a
portion of their Shares being offered hereby at certain times
because of the withholding arrangements described herein
under "Selling Stockholders."
LEGAL OPINION
The validity of the Shares being offered hereby
will be passed upon for Alleghany by Donovan Leisure Newton &
Irvine, 30 Rockefeller Plaza, New York, New York 10112.
EXPERTS
The consolidated financial statements and financial
statement schedules of Alleghany and its subsidiaries
included in or incorporated by reference in Alleghany's
Annual Report on Form 10-K for the fiscal year ended
December 31, 1995 have been incorporated herein by reference
in reliance upon the reports, also incorporated herein by
reference, of KPMG Peat Marwick LLP, independent certified
public accountants, given on their authority as experts in
auditing and accounting. Such reports refer to the adoption
by Alleghany of the provisions of the Financial Accounting
Standards Board's Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and
Equity Securities," at December 31, 1993.
<PAGE>
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON
HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS
IN CONNECTION WITH THIS OFFERING OTHER
THAN THOSE CONTAINED IN OR INCORPORATED BY
REFERENCE IN THIS PROSPECTUS AND, IF GIVEN
OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY ALLEGHANY
CORPORATION. THIS PROSPECTUS DOES NOT 37,245 SHARES
CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF
THESE SECURITIES IN ANY JURISDICTION TO ALLEGHANY
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE CORPORATION
SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE COMMON STOCK
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE AN IMPLICATION THAT THERE HAS BEEN
NO CHANGE IN THE AFFAIRS OF ALLEGHANY
CORPORATION AND ITS SUBSIDIARIES SINCE THE
DATE HEREOF OR THAT THE INFORMATION HEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.
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TABLE OF CONTENTS
Page
Available Information............ 3 PROSPECTUS
Incorporation of Certain
Documents by Reference........ 3
Alleghany Corporation............ 6
Use of Proceeds.................. 6
Selling Stockholders............. 6
Plan of Distribution............. 8
Legal Opinion.................... 9
Experts.......................... 9
August , 1996
<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following are the expenses payable by Alleghany
in connection with the offering of the Shares described in
this Registration Statement, all of which are estimated
except for the registration fee:
Securities and Exchange Commission
registration fee $ 2,427.35
Legal fees and expenses $12,000.00
Accounting fees and expenses $10,000.00
Miscellaneous expenses $ 572.65
---------
TOTAL $25,000.00
=========
All other expenses incident to the disposition by
each Selling Stockholder of the Shares held by him or her
(including, without limitation, fees and expenses of his or
her counsel and all underwriting discounts, if any, brokerage
commissions and similar fees) are to be borne by such Selling
Stockholder.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Alleghany is a Delaware corporation. Reference is
made to Section 145 of the Delaware General Corporation Law
as to indemnification by Alleghany of its officers and
directors. The general effect of such law is to empower a
corporation to indemnify any of its officers and directors
against certain expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and
reasonably incurred by the person to be indemnified in
connection with certain actions, suits or proceedings
(threatened, pending or completed) if the person to be
indemnified acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of
the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct
was unlawful.
<PAGE>
Article Tenth of Alleghany's Restated Certificate
of Incorporation, as amended (which Restated Certificate of
Incorporation is incorporated by reference as Exhibit 3.1 to
this Registration Statement), provides for the indemnifica-
tion of Alleghany's officers and directors in accordance
with the Delaware General Corporation Law, and includes, as
permitted by the Delaware General Corporation Law, certain
limitations on the potential personal liability of members of
Alleghany's Board of Directors for monetary damages as a
result of actions taken in their capacity as Board members.
The directors and officers of Alleghany are covered
by insurance policies indemnifying them against certain
liabilities arising under the Securities Act which might be
incurred by them in such capacities.
ITEM 16. EXHIBITS.
The documents listed hereunder are filed as
exhibits hereto.
Exhibit Number Description
-------------- -----------
2.1 Agreement and Plan of Merger, dated
as of July 1, 1996, among Market
Intelligence, Inc. (the "Company"),
Alleghany Acquisition Corporation,
Alleghany and each of the share-
holders of the Company (the "Merger
Agreement").
2.2 List of Contents of Exhibits to the
Merger Agreement.
3.1 Restated Certificate of Incorporation
of Alleghany, as amended by Amendment
accepted and received for filing by
the Secretary of State of the State
of Delaware on June 23, 1988, filed
as Exhibit 20 to Alleghany's
Quarterly Report on Form 10-Q for the
quarter ended June 30, 1988, is
incorporated herein by reference.
3.2 By-Laws of Alleghany, as amended
April 18, 1995, filed as Exhibit 3.1
to Alleghany's Quarterly Report on
<PAGE>
Form 10-Q for the quarter ended March
31, 1995, are incorporated herein by
reference.
5 Opinion and Consent of Donovan
Leisure Newton & Irvine.
23.1 Consent of Donovan Leisure Newton &
Irvine (included in Exhibit 5
hereto).
23.2 Consent of KPMG Peat Marwick LLP.
24 Powers of Attorney.
28 Information from reports furnished
to state regulatory authorities by
Underwriters Reinsurance Company,
Commercial Underwriters Insurance
Company, and Underwriters Insurance
Company, filed as Exhibit 28 to
Alleghany's Annual Report on Form
10-K for the year ended December 31,
1995, is incorporated herein by
reference.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or
sales are being made, a post-effective amendment to this
registration statement:
(i) to include any prospectus required by
section 10(a)(3) of the Securities Act of 1933, unless
the information required to be included in such post-
effective amendment is contained in periodic reports
filed by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in this registration
statement.
(ii) to reflect in the prospectus any facts
or events arising after the effective date of this
registration statement (or the most recent post-
effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the
<PAGE>
information set forth in this registration statement,
unless the information required to be included in such
post-effective amendment is contained in periodic
reports filed by the registrant pursuant to section 13
or section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in this registration
statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no
more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee"
table in the effective registration statement.
(iii) to include any material information with
respect to the plan of distribution not previously
disclosed in this registration statement or any material
change to such information in this registration
statement.
(2) That, for the purpose of determining any
liability under the Securities Act of 1933, each such post-
effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of
a post-effective amendment any of the securities being
registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes
that, for purposes of determining any liability under the
Securities Act of 1933, as amended, each filing of the
registrant's annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934 (and,
where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Securities
Exchange Act of 1934), that is incorporated by reference in
this registration statement shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
<PAGE>
(c) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to
directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the
payment by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed
in the Act and will be governed by the final adjudication of
such issue.
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act
of 1933, the registrant certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized in the City of New York, State of
New York, on the 9th day of August, 1996.
ALLEGHANY CORPORATION
By: /s/ John J. Burns, Jr.
-------------------------------
John J. Burns, Jr.
President
Pursuant to the requirements of the Securities Act
of 1933, this Registration Statement has been signed by the
following persons in the capacities and on the dates
indicated.
Date: August 9, 1996 By: /s/ John J. Burns, Jr.
----------------------------
John J. Burns, Jr.
President and Director
(principal executive
officer)
Date: August 9, 1996 By: /s/ Dan R. Carmichael*
----------------------------
Dan R. Carmichael
Director
Date: August 9, 1996 By: /s/ David B. Cuming
----------------------------
David B. Cuming
Senior Vice President
(principal financial
officer)
<PAGE>
Date: August 9, 1996 By: /s/ Allan P. Kirby, Jr.*
----------------------------
Allan P. Kirby, Jr.
Director
Date: August 9, 1996 By: /s/ F.M. Kirby*
----------------------------
F.M. Kirby
Chairman of the Board
and Director
Date: August 9, 1996 By: /s/ William K. Lavin*
----------------------------
William K. Lavin
Director
Date: August 9, 1996 By: /s/ Roger Noall*
----------------------------
Roger Noall
Director
Date: August 9, 1996 By: /s/ Peter R. Sismondo
----------------------------
Peter R. Sismondo
Vice President, Controller,
Treasurer and Assistant
Secretary (principal
accounting officer)
Date: August 9, 1996 By: /s/ John E. Tobin*
----------------------------
John E. Tobin
Director
Date: August 9, 1996 By: /s/ James F. Will*
----------------------------
James F. Will
Director
<PAGE>
Date: August 9, 1996 By: /s/ Paul F. Woodberry*
----------------------------
Paul F. Woodberry
Director
*By: /s/ John J. Burns, Jr.
-----------------------
John J. Burns, Jr.
Attorney-in-Fact
<PAGE>
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Description
-------------- -----------
2.1 Agreement and Plan of Merger, dated
as of July 1, 1996, among Market
Intelligence, Inc. (the "Company"),
Alleghany Acquisition Corporation,
Alleghany and each of the share-
holders of the Company (the "Merger
Agreement").
2.2 List of Contents of Exhibits to the
Merger Agreement.
3.1 Restated Certificate of Incorporation
of Alleghany, as amended by Amendment
accepted and received for filing by
the Secretary of State of the State
of Delaware on June 23, 1988, filed
as Exhibit 20 to Alleghany's
Quarterly Report on Form 10-Q for the
quarter ended June 30, 1988, is
incorporated herein by reference.
3.2 By-Laws of Alleghany, as amended
April 18, 1995, filed as Exhibit 3.1
to Alleghany's Quarterly Report on
Form 10-Q for the quarter ended March
31, 1995, are incorporated herein by
reference.
5 Opinion and Consent of Donovan
Leisure Newton & Irvine.
23.1 Consent of Donovan Leisure Newton &
Irvine (included in Exhibit 5
hereto).
23.2 Consent of KPMG Peat Marwick LLP.
24 Powers of Attorney.
<PAGE>
28 Information from reports furnished to
state regulatory authorities by
Underwriters Reinsurance Company,
Commercial Underwriters Insurance
Company, and Underwriters Insurance
Company, filed as Exhibit 28 to
Alleghany's Annual Report on
Form 10-K for the year ended
December 31, 1995, is incorporated
herein by reference.
<PAGE>
Exhibit 5
---------
Law Offices of
Donovan Leisure Newton & Irvine
30 Rockefeller Plaza
New York, New York 10112
August 9, 1996
Alleghany Corporation
375 Park Avenue
New York, New York 10152
Re: Alleghany Corporation
Registration Statement on Form S-3
Filed with the Securities and Exchange
Commission on August 9, 1996
--------------------------------------
Gentlemen:
We are acting as counsel for Alleghany Corporation,
a Delaware corporation ("Alleghany"), in connection with the
registration by Alleghany under the Securities Act of 1933,
as amended (the "Act"), of 37,245 shares of common stock, par
value $1.00 per share (the "Shares"), which are presently
outstanding and will be offered for the accounts of certain
stockholders of Alleghany (the "Selling Stockholders") under
the Registration Statement on Form S-3 filed with the
Securities and Exchange Commission on August 9, 1996 (the
"Registration Statement").
We are familiar with the proceedings of Alleghany
relating to the authorization and issuance of the Shares. In
addition, we have made such further examinations of law and
fact as we have deemed appropriate in connection with the
opinion hereinafter set forth. We express no opinion as to
the law of any jurisdiction other than the laws of the State
of New York and the corporate laws of the State of Delaware.
Based upon the foregoing, we are of the opinion
that the Shares to be offered for the accounts of the Selling
Stockholders have been duly authorized and validly issued,
and are fully paid and nonassessable.
<PAGE>
We hereby consent to the filing of this opinion as
an exhibit to the Registration Statement and to the reference
to our firm which appears in the Prospectus constituting a
part thereof under the caption "Legal Opinion." In giving
such consent, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7
of the Act, or under the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Donovan Leisure Newton & Irvine
<PAGE>
Exhibit 24
----------
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the
undersigned does hereby constitute and appoint JOHN J. BURNS,
JR. and ROBERT M. HART, and each of them, with full powers of
substitution, his true and lawful attorneys-in-fact and
agents to do any and all acts and things and to execute any
and all instruments which said attorneys and agents may deem
necessary or advisable to enable Alleghany Corporation, a
Delaware corporation, to comply with the Securities Act of
1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission in respect thereof,
in connection with the registration under said Act of 37,245
shares of Common Stock, $1.00 par value, of Alleghany
Corporation (the "Shares") issued to the former shareholders
of Market Intelligence, Inc., a Massachusetts corporation
("the Company"), pursuant to the Agreement and Plan of Merger
dated as of July 1, 1996, among the Company, Alleghany
Acquisition Corporation, a Massachusetts corporation,
Alleghany Corporation, and each of the shareholders of the
Company, including specifically, but without limitation
thereof, power and authority to sign his name as a director
of Alleghany Corporation to the Registration Statement to be
filed with the Securities and Exchange Commission and any
amendment thereto in respect of said Shares and to any
documents filed as part of or in connection with said
Registration Statement or amendments; and the undersigned
does hereby ratify and confirm all that said attorneys and
agents shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the undersigned has subscribed
these presents on the 1st day of August, 1996.
/s/ Dan R. Carmichael
----------------------------
Dan R. Carmichael
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the
undersigned does hereby constitute and appoint JOHN J. BURNS,
JR. and ROBERT M. HART, and each of them, with full powers of
substitution, his true and lawful attorneys-in-fact and
agents to do any and all acts and things and to execute any
and all instruments which said attorneys and agents may deem
necessary or advisable to enable Alleghany Corporation, a
Delaware corporation, to comply with the Securities Act of
1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission in respect thereof,
in connection with the registration under said Act of 37,245
shares of Common Stock, $1.00 par value, of Alleghany
Corporation (the "Shares") issued to the former shareholders
of Market Intelligence, Inc., a Massachusetts corporation
("the Company"), pursuant to the Agreement and Plan of Merger
dated as of July 1, 1996, among the Company, Alleghany
Acquisition Corporation, a Massachusetts corporation,
Alleghany Corporation, and each of the shareholders of the
Company, including specifically, but without limitation
thereof, power and authority to sign his name as a director
of Alleghany Corporation to the Registration Statement to be
filed with the Securities and Exchange Commission and any
amendment thereto in respect of said Shares and to any
documents filed as part of or in connection with said
Registration Statement or amendments; and the undersigned
does hereby ratify and confirm all that said attorneys and
agents shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the undersigned has subscribed
these presents on the 1st day of August, 1996.
/s/ Allan P. Kirby, Jr.
----------------------------
Allan P. Kirby, Jr.
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the
undersigned does hereby constitute and appoint JOHN J. BURNS,
JR. and ROBERT M. HART, and each of them, with full powers of
substitution, his true and lawful attorneys-in-fact and
agents to do any and all acts and things and to execute any
and all instruments which said attorneys and agents may deem
necessary or advisable to enable Alleghany Corporation, a
Delaware corporation, to comply with the Securities Act of
1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission in respect thereof,
in connection with the registration under said Act of 37,245
shares of Common Stock, $1.00 par value, of Alleghany
Corporation (the "Shares") issued to the former shareholders
of Market Intelligence, Inc., a Massachusetts corporation
("the Company"), pursuant to the Agreement and Plan of Merger
dated as of July 1, 1996, among the Company, Alleghany
Acquisition Corporation, a Massachusetts corporation,
Alleghany Corporation, and each of the shareholders of the
Company, including specifically, but without limitation
thereof, power and authority to sign his name as a director
of Alleghany Corporation to the Registration Statement to be
filed with the Securities and Exchange Commission and any
amendment thereto in respect of said Shares and to any
documents filed as part of or in connection with said
Registration Statement or amendments; and the undersigned
does hereby ratify and confirm all that said attorneys and
agents shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the undersigned has subscribed
these presents on the 1st day of August, 1996.
/s/ F.M. Kirby
----------------------------
F.M. Kirby
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the
undersigned does hereby constitute and appoint JOHN J. BURNS,
JR. and ROBERT M. HART, and each of them, with full powers of
substitution, his true and lawful attorneys-in-fact and
agents to do any and all acts and things and to execute any
and all instruments which said attorneys and agents may deem
necessary or advisable to enable Alleghany Corporation, a
Delaware corporation, to comply with the Securities Act of
1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission in respect thereof,
in connection with the registration under said Act of 37,245
shares of Common Stock, $1.00 par value, of Alleghany
Corporation (the "Shares") issued to the former shareholders
of Market Intelligence, Inc., a Massachusetts corporation
("the Company"), pursuant to the Agreement and Plan of Merger
dated as of July 1, 1996, among the Company, Alleghany
Acquisition Corporation, a Massachusetts corporation,
Alleghany Corporation, and each of the shareholders of the
Company, including specifically, but without limitation
thereof, power and authority to sign his name as a director
of Alleghany Corporation to the Registration Statement to be
filed with the Securities and Exchange Commission and any
amendment thereto in respect of said Shares and to any
documents filed as part of or in connection with said
Registration Statement or amendments; and the undersigned
does hereby ratify and confirm all that said attorneys and
agents shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the undersigned has subscribed
these presents on the 9th day of August, 1996.
/s/ William K. Lavin
----------------------------
William K. Lavin
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the
undersigned does hereby constitute and appoint JOHN J. BURNS,
JR. and ROBERT M. HART, and each of them, with full powers of
substitution, his true and lawful attorneys-in-fact and
agents to do any and all acts and things and to execute any
and all instruments which said attorneys and agents may deem
necessary or advisable to enable Alleghany Corporation, a
Delaware corporation, to comply with the Securities Act of
1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission in respect thereof,
in connection with the registration under said Act of 37,245
shares of Common Stock, $1.00 par value, of Alleghany
Corporation (the "Shares") issued to the former shareholders
of Market Intelligence, Inc., a Massachusetts corporation
("the Company"), pursuant to the Agreement and Plan of Merger
dated as of July 1, 1996, among the Company, Alleghany
Acquisition Corporation, a Massachusetts corporation,
Alleghany Corporation, and each of the shareholders of the
Company, including specifically, but without limitation
thereof, power and authority to sign his name as a director
of Alleghany Corporation to the Registration Statement to be
filed with the Securities and Exchange Commission and any
amendment thereto in respect of said Shares and to any
documents filed as part of or in connection with said
Registration Statement or amendments; and the undersigned
does hereby ratify and confirm all that said attorneys and
agents shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the undersigned has subscribed
these presents on the 6th day of August, 1996.
/s/ John E. Tobin
----------------------------
John E. Tobin
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the
undersigned does hereby constitute and appoint JOHN J. BURNS,
JR. and ROBERT M. HART, and each of them, with full powers of
substitution, his true and lawful attorneys-in-fact and
agents to do any and all acts and things and to execute any
and all instruments which said attorneys and agents may deem
necessary or advisable to enable Alleghany Corporation, a
Delaware corporation, to comply with the Securities Act of
1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission in respect thereof,
in connection with the registration under said Act of 37,245
shares of Common Stock, $1.00 par value, of Alleghany
Corporation (the "Shares") issued to the former shareholders
of Market Intelligence, Inc., a Massachusetts corporation
("the Company"), pursuant to the Agreement and Plan of Merger
dated as of July 1, 1996, among the Company, Alleghany
Acquisition Corporation, a Massachusetts corporation,
Alleghany Corporation, and each of the shareholders of the
Company, including specifically, but without limitation
thereof, power and authority to sign his name as a director
of Alleghany Corporation to the Registration Statement to be
filed with the Securities and Exchange Commission and any
amendment thereto in respect of said Shares and to any
documents filed as part of or in connection with said
Registration Statement or amendments; and the undersigned
does hereby ratify and confirm all that said attorneys and
agents shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the undersigned has subscribed
these presents on the 9th day of August, 1996.
/s/ James F. Will
----------------------------
James F. Will
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the
undersigned does hereby constitute and appoint JOHN J. BURNS,
JR. and ROBERT M. HART, and each of them, with full powers of
substitution, his true and lawful attorneys-in-fact and
agents to do any and all acts and things and to execute any
and all instruments which said attorneys and agents may deem
necessary or advisable to enable Alleghany Corporation, a
Delaware corporation, to comply with the Securities Act of
1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission in respect thereof,
in connection with the registration under said Act of 37,245
shares of Common Stock, $1.00 par value, of Alleghany
Corporation (the "Shares") issued to the former shareholders
of Market Intelligence, Inc., a Massachusetts corporation
("the Company"), pursuant to the Agreement and Plan of Merger
dated as of July 1, 1996, among the Company, Alleghany
Acquisition Corporation, a Massachusetts corporation,
Alleghany Corporation, and each of the shareholders of the
Company, including specifically, but without limitation
thereof, power and authority to sign his name as a director
of Alleghany Corporation to the Registration Statement to be
filed with the Securities and Exchange Commission and any
amendment thereto in respect of said Shares and to any
documents filed as part of or in connection with said
Registration Statement or amendments; and the undersigned
does hereby ratify and confirm all that said attorneys and
agents shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the undersigned has subscribed
these presents on the 1st day of August, 1996.
/s/ Paul F. Woodberry
----------------------------
Paul F. Woodberry
<PAGE>
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the
undersigned does hereby constitute and appoint JOHN J. BURNS,
JR. and ROBERT M. HART, and each of them, with full powers of
substitution, his true and lawful attorneys-in-fact and
agents to do any and all acts and things and to execute any
and all instruments which said attorneys and agents may deem
necessary or advisable to enable Alleghany Corporation, a
Delaware corporation, to comply with the Securities Act of
1933, as amended, and any rules, regulations and requirements
of the Securities and Exchange Commission in respect thereof,
in connection with the registration under said Act of 37,245
shares of Common Stock, $1.00 par value, of Alleghany
Corporation (the "Shares") issued to the former shareholders
of Market Intelligence, Inc., a Massachusetts corporation
("the Company"), pursuant to the Agreement and Plan of Merger
dated as of July 1, 1996, among the Company, Alleghany
Acquisition Corporation, a Massachusetts corporation,
Alleghany Corporation, and each of the shareholders of the
Company, including specifically, but without limitation
thereof, power and authority to sign his name as a director
of Alleghany Corporation to the Registration Statement to be
filed with the Securities and Exchange Commission and any
amendment thereto in respect of said Shares and to any
documents filed as part of or in connection with said
Registration Statement or amendments; and the undersigned
does hereby ratify and confirm all that said attorneys and
agents shall do or cause to be done by virtue hereof.
IN WITNESS WHEREOF the undersigned has subscribed
these presents on the 9th day of August, 1996.
/s/ Roger Noall
----------------------------
Roger Noall
<PAGE>
Exhibit 2.1
-----------
AGREEMENT AND PLAN OF MERGER
AMONG
MARKET INTELLIGENCE, INC.
(THE "COMPANY"),
ALLEGHANY ACQUISITION CORPORATION,
ALLEGHANY CORPORATION
AND
THE SHAREHOLDERS OF THE COMPANY
DATED AS OF JULY 1, 1996
<PAGE>
<PAGE>
TABLE OF CONTENTS
-----------------
Page
----
ARTICLE I The Merger................................... 1
1.1. The Merger....................................... 1
1.2. Closing.......................................... 2
1.3. Effective Time................................... 2
1.4. Employment Agreements............................ 2
1.5. Transfer of Surviving Corporation................ 2
ARTICLE II The Surviving Corporation................... 3
2.1. The Articles of Organization..................... 3
2.2. The Bylaws....................................... 3
2.3. Officers and Directors........................... 3
ARTICLE III Conversion of Shares in the Merger......... 3
3.1. Conversion of Shares............................. 3
3.2. Holdback of Alleghany Shares..................... 6
3.3. Payment for Shares .............................. 7
ARTICLE IV Representations and Warranties
of the Company and the Shareholders......... 8
4.1. Corporate Organization and Qualification......... 9
4.2. Authorized Capital............................... 9
4.3. Corporate Authority.............................. 10
4.4. Compliance....................................... 11
4.5. Financial Statements............................. 12
4.6. Undisclosed Liabilities.......................... 12
4.7. No Material Adverse Change....................... 13
4.8. No Dividends, Sale of Assets, etc................ 13
4.9. Litigation....................................... 13
4.10. Tax Matters...................................... 14
4.11. Assets........................................... 16
(a) Clients and Real Estate Property
Evaluation Services Agreements............ 16
(b) Other Agreements........................... 16
(c) Real Property.............................. 17
(d) Intangible Property........................ 17
(e) Intellectual Property...................... 17
(f) Investment Securities...................... 18
(g) Other Assets............................... 18
(h) Title...................................... 18
<PAGE>
4.12. Benefit Plans.................................... 19
4.13. Interests of Officers, Directors
and Shareholders............................... 21
4.14. Employees........................................ 21
4.15. Banks ........................................... 22
4.16. Insurance........................................ 22
4.17. Absence of Bank or Savings
and Loan Status................................ 22
4.18. Brokers and Finders.............................. 23
4.19. Status of Shareholders........................... 23
4.20. Investment Representation........................ 24
4.21. Shareholder Understandings....................... 24
4.22. Pooling.......................................... 25
4.23. Aggregate Materiality............................ 25
4.24. Disclosure....................................... 25
ARTICLE V Representations and Warranties
of Alleghany and Newco....................... 26
5.1. Corporate Organization and Qualification......... 26
5.2. Authorized Capital............................... 26
5.3. Corporate Authority.............................. 26
5.4. Compliance....................................... 27
5.5. Financial Statements............................. 28
5.6. Undisclosed Liabilities.......................... 28
5.7. No Material Adverse Change....................... 29
5.8. Litigation....................................... 29
5.9. Brokers and Finders.............................. 29
5.10. SEC Filings...................................... 29
5.11. Aggregate Materiality............................ 30
5.12. Disclosure....................................... 30
ARTICLE VI Conditions to the Obligations
of Alleghany and Newco...................... 30
6.1. Compliance with Agreement........................ 30
6.2. Representations and Warranties................... 31
6.3. Opinion of Counsel for the Company and
the Shareholders............................... 31
6.4. Approvals........................................ 31
6.5. Accounting Treatment............................. 31
6.6. Key Man Insurance................................ 31
6.7. Client Discussions............................... 32
6.8. Amendment to Employment Agreement................ 32
6.9. Licensed Software................................ 32
6.10. Company Records.................................. 32
6.11. Indebtedness..................................... 32
6.12. Audit of April 30, 1996 Financial Statements...... 32
<PAGE>
ARTICLE VII Conditions to the Obligations of the
Company and the Shareholders............... 32
7.1. Compliance with Agreement........................ 33
7.2. Representations and Warranties................... 33
7.3. Opinion of Counsel for Alleghany and Newco....... 33
7.4. Approvals........................................ 33
ARTICLE VIII Covenants of the Company and
the Shareholders.......................... 34
8.1. Covenants Pending the Closing.................... 34
(a) Access to Properties, Books and Records.... 34
(b) Carry On in Regular Course................. 34
(c) Preservation of Organization............... 35
8.2. Filings and Approvals............................ 35
8.3. Reasonable Efforts............................... 36
8.4. Further Assurances............................... 36
8.5. Compliance with Securities Laws.................. 36
8.6. COBRA Notices.................................... 36
ARTICLE IX Covenants of Alleghany and Newco............ 36
9.1. Filings and Approvals............................ 36
9.2. Reasonable Efforts............................... 36
9.3. Further Assurances............................... 36
9.4. Registration Rights.............................. 37
(a) Registration............................... 37
(b) Effectiveness.............................. 37
(c) Expenses................................... 38
(d) Shareholder Agreements..................... 38
(e) Indemnification under this Section 9.4..... 38
9.5. Covenants Relating to the Alleghany
Shares......................................... 39
9.6. Investment in the Surviving Corporation.......... 40
ARTICLE X Covenants of the Shareholders and Alleghany
Relating to Certain Tax Matters.............. 40
10.1. Pre-Merger and Straddle Period Taxes............. 40
10.2. Access to Information and Retention
of Records..................................... 44
10.3. Miscellaneous Tax Provisions..................... 44
(a) Notice of Disposed Consideration............ 44
(b) Alleghany Representations................... 45
(c) Code Sections 448 and 481................... 46
<PAGE>
ARTICLE XI Indemnity................................... 46
11.1. By the Shareholders and the Company.............. 46
11.2. By Alleghany and Newco........................... 46
11.3. Limits........................................... 47
11.4. Procedure........................................ 48
11.5. Adjustment for Insurance......................... 49
ARTICLE XII Miscellaneous Provisions................... 49
12.1. Termination...................................... 49
12.2. Expenses......................................... 50
12.3. Notices.......................................... 50
12.4. Exhibits......................................... 52
12.5. Entire Agreement; Amendment...................... 52
12.6. Assignment....................................... 52
12.7. Survival of Representations, Warranties
and Covenants.................................. 53
12.8. Governing Law.................................... 53
12.9. Counterparts..................................... 53
12.10. Headings......................................... 53
12.11. Severability..................................... 53
12.12. Public Announcement.............................. 54
<PAGE>
<PAGE>
AGREEMENT AND PLAN OF MERGER
----------------------------
AGREEMENT AND PLAN OF MERGER (this "Agreement"),
dated as of July 1, 1996, among Market Intelligence, Inc., a
Massachusetts corporation (the "Company"), Alleghany
Acquisition Corporation, a Massachusetts corporation
("Newco") (the Company and Newco being the constituent
corporations in the Merger, as defined below), Alleghany
Corporation, a Delaware corporation and the owner of all of
the issued and outstanding shares of capital stock of Newco
("Alleghany"), and each of the shareholders of the Company as
listed in Exhibit 4.2 hereto (the "Shareholders") (Alleghany
and the Shareholders joining as additional parties).
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Boards of Directors of Alleghany,
Newco and the Company have each determined that it is in the
best interests of their respective shareholders for the
Company to merge with and into Newco upon the terms and
subject to the conditions set forth herein; and
WHEREAS, the Company, Newco, Alleghany and the
Shareholders desire to make certain representations,
warranties, covenants and agreements in connection with the
transactions contemplated hereby;
NOW, THEREFORE, in consideration of the premises
and the mutual covenants and agreements hereinafter set
forth, the parties hereto hereby agree as follows:
ARTICLE I
The Merger
1.1. The Merger. Subject to the terms and
----------
conditions of this Agreement, at the Effective Time (as
defined in Section 1.3 hereof), the Company shall be merged
with and into Newco and the separate corporate existence of
the Company shall thereupon cease (the "Merger"). Newco
shall be the surviving corporation in the Merger (sometimes
hereinafter referred to as the "Surviving Corporation") and
<PAGE>
shall continue to be governed by the laws of the State of
Massachusetts, and the separate corporate existence of Newco
with all of its rights, privileges, immunities, powers and
franchises shall continue unaffected by the Merger. The
Merger shall have the effects specified in the Massachusetts
Business Corporation Law (the "BCL"). The Surviving
Corporation shall be authorized to issue 1,000 shares of
Common Stock, without par value, and the purposes of the
Surviving Corporation shall be as set forth in Exhibit 1.1
hereto, until duly amended in accordance with the BCL.
1.2. Closing. The closing of the Merger (the
--------
"Closing") shall take place (i) at the offices of Donovan
Leisure Newton & Irvine, 30 Rockefeller Plaza, New York,
New York 10112 at 10:00 a.m. on the fifth business day after
which the last to be fulfilled or waived of the conditions
set forth in Articles VI and VII hereof shall be fulfilled or
waived in accordance with this Agreement, or (ii) at such
other place, time or date as the Company and Alleghany may
agree. The date of the Closing is hereinafter referred to as
the "Closing Date." The Closing shall be deemed effective as
of 12:00 a.m. on July 1, 1996.
1.3. Effective Time. At the Closing, the Company
--------------
and Newco will cause Articles of Merger, in the form set
forth in Exhibit 1.3 hereto (the "Massachusetts Articles of
Merger"), to be executed and delivered to the Secretary of
the Commonwealth of Massachusetts as provided in Section 78
of the BCL. The Merger shall become effective on the date on
which the Massachusetts Articles of Merger have been duly
filed with the Secretary of the Commonwealth of
Massachusetts, and such time is hereinafter referred to as
the "Effective Time."
1.4. Employment Agreements. Simultaneously with
---------------------
the execution and delivery of this Agreement, employment
agreements in the forms set forth in Exhibit 1.4 hereto
between the Company and each of Robert F. Sennott, Jr., Mark
P. Sennott and Bryant R. Linares shall be executed and
delivered.
1.5. Transfer of Surviving Corporation. The
---------------------------------
Shareholders hereby acknowledge that Alleghany shall have the
right to and intends to transfer, exchange or contribute the
<PAGE>
shares of the capital stock of the Surviving Corporation to
or with its wholly owned subsidiary Chicago Title and Trust
Company or a subsidiary thereof (the "Transferee") after the
Effective Time.
ARTICLE II
The Surviving Corporation
2.1. The Articles of Organization. The Articles
----------------------------
of Organization of Newco (the "Articles") in effect
immediately prior to the Effective Time shall be the Articles
of Organization of the Surviving Corporation, except that
such Articles shall be amended at and as of the Effective
Time as set forth in the Massachusetts Articles of Merger to
change the name of the Surviving Corporation to "Market
Intelligence, Inc." As so amended, such Articles shall be
the Articles of Organization of the Surviving Corporation
until duly amended in accordance with the terms thereof and
the BCL.
2.2. The Bylaws. The Bylaws of Newco (the
----------
"Bylaws") in effect immediately prior to the Effective Time
shall be the Bylaws of the Surviving Corporation, until duly
amended in accordance with the terms thereof and the BCL.
2.3. Officers and Directors. The officers of the
----------------------
Company immediately prior to the Effective Time and the
directors of Newco at the Effective Time (including any
directors elected or appointed at the Effective Time) shall,
from and after the Effective Time, be the officers and
directors, respectively, of the Surviving Corporation until
their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's
Articles of Organization and Bylaws and, with respect to any
of the Shareholders serving as an officer or director of the
Surviving Corporation, pursuant to such Shareholder's
employment agreement.
<PAGE>
ARTICLE III
Conversion of Shares in the Merger
3.1. Conversion of Shares. The manner of
--------------------
converting shares of the Company and Newco in the Merger
shall be as follows:
(a) At the Effective Time, each share of the
common stock, without par value, of the Company (the
"Shares") issued and outstanding immediately prior to the
Effective Time shall, by virtue of the Merger and without any
action on the part of the holder thereof, be converted into
the right to receive, without interest, the number of shares
of common stock, par value $1.00 per share, of Alleghany
("Alleghany Shares") determined pursuant to this Section
3.1(a). The number of Alleghany Shares into which each Share
shall be converted shall be determined as follows:
$7,259,044 shall be divided by the Average Market Price of an
Alleghany Share as at the close of business on the date that
is five business days prior to the Effective Time (the
"Determination Date"), and that result shall then be divided
by 10,000 (the number of Shares to be outstanding immediately
prior to the Effective Time). For purposes of this
Agreement, the "Average Market Price" of an Alleghany Share
is the amount determined by (i) averaging the high and low
per share sale prices (as reported in The Wall Street Journal
-----------------------
for New York Stock Exchange Composite Transactions) for each
business day during the 15 business day period ending on the
Determination Date on which there were any trades in
Alleghany Shares, (ii) adding such daily averages together,
and (iii) dividing the sum by 15 (reduced by the number of
such business days during which there were no trades in
Alleghany Shares). No more than the number of Alleghany
Shares required to convert the Shares on the foregoing basis
shall be issued at the Effective Time. Any fractional shares
resulting from such conversion to which the holder of
Alleghany Shares otherwise would be entitled shall not be
issued but shall be paid in cash. The Alleghany Shares into
which the Shares are converted pursuant to this Section 3.1
are referred to herein as the "Merger Consideration." The
Merger Consideration shall be subject to adjustment as
follows:
(i) If on or after the Determination Date and
before the Effective Time Alleghany shall, on a pro rata
<PAGE>
basis, (A) declare or pay a dividend or make a
distribution to holders of Alleghany Shares,
(B) subdivide the outstanding Alleghany Shares into a
greater number of shares, (C) combine the outstanding
Alleghany Shares into a smaller number of shares, or
(D) issue by reclassification of the outstanding
Alleghany Shares any securities, the Merger
Consideration shall be adjusted so that each Shareholder
shall be entitled to receive the kind and number of
shares of Alleghany Shares and/or other securities which
he or she would have owned or been entitled to receive
immediately following such action had the Effective Time
occurred immediately prior thereto.
(ii) If on or after the Determination Date and
before the Effective Time Alleghany shall distribute on
a pro rata basis to holders of Alleghany Shares either
(A) evidences of indebtedness or assets (excluding cash
dividends or distributions), or (B) any other securities
of Alleghany or any rights, warrants, or options to
subscribe for, purchase or otherwise acquire securities
of Alleghany in a transaction not covered by
subsection (i) above (any of which are referred to
herein as "Other Securities"), then Alleghany shall
reserve for the benefit of each Shareholder such amount
of Other Securities as he or she would have owned or
been entitled to receive immediately following such
action had the Effective Time occurred immediately prior
thereto. In addition, from the Determination Date until
the Effective Time, Alleghany shall reserve for the
benefit of each Shareholder any principal, interest,
dividends or other property payable with respect to
Other Securities as and when such interest, dividends or
other property is distributed to the holders of
Alleghany Shares. If such a reserve is made, at the
Effective Time each Shareholder shall be entitled to
receive from Alleghany his or her share of Other
Securities, together with the principal, interest,
dividends or other property payable with respect
thereto. In the event that any of the actions set forth
in Section 3.1(a)(i) hereof are taken with respect to
the Other Securities on or before the Effective Time,
then each Shareholder shall be entitled to receive the
kind and number of shares of Other Securities and/or
other securities which he or she would have owned or
been entitled to receive immediately following such
action had the Effective Time occurred immediately prior
thereto.
<PAGE>
All Shares, by virtue of the Merger and without any action on
the part of the holders thereof, shall no longer be
outstanding and shall be cancelled and retired and shall
cease to exist, and each holder of a certificate representing
any such Shares shall thereafter cease to have any rights
with respect to such Shares, except the right to receive the
Merger Consideration for such Shares in accordance with
Section 3.1 hereof upon the surrender of such certificate in
accordance with Section 3.3 hereof.
(b) At the Effective Time, each share of the
common stock, without par value, of Newco issued and
outstanding immediately prior to the Effective Time shall, by
virtue of the Merger and without any action on the part of
Newco or the holder of such shares, be converted into one
share of common stock, without par value, of the Surviving
Corporation, which shall thereafter constitute the only
issued and outstanding shares of capital stock of the
Surviving Corporation.
3.2. Holdback of Alleghany Shares. (a) The number
----------------------------
of Alleghany Shares equal to ten percent (10%) of the
aggregate number of Alleghany Shares into which all of the
Shares shall be converted pursuant to Section 3.1(a) (the
"Holdback Shares") shall not be delivered to the Shareholders
at the Closing but shall be withheld by Alleghany. The
Holdback Shares shall be withheld from the Shareholders in
proportion to their ownership interests in the Company
immediately prior to the Closing (however, the number of
Alleghany Shares withheld from each Shareholder shall in each
case be rounded down to the nearest full Alleghany Share so
that no fractional shares are created). The Holdback Shares
shall be issued and outstanding Alleghany Shares and shall
appear as issued and outstanding shares on the financial
statements of Alleghany. Stock dividends on the Holdback
Shares shall be withheld by Alleghany and aggregated with the
Holdback Shares. With respect to the Holdback Shares, the
Shareholders shall be entitled to exercise any rights to vote
and to otherwise exercise any other rights accorded to
shareholders of Alleghany generally, other than the right to
sell, assign, pledge, transfer or otherwise dispose of (other
than by will or the laws of descent and distribution) any of
the Holdback Shares until distributed to the Shareholders as
provided herein.
<PAGE>
(b) If prior to the completion of the first audit
of the Surviving Corporation by its accountants after the
Closing, Alleghany and/or Newco has not made a claim or
claims for indemnification under Section 9.4(e)(ii) or 11.1
hereof in excess of $75,000 in the aggregate, then the
Holdback Shares shall immediately be distributed to the
Shareholders in proportion to their ownership interests in
the Company immediately prior to the Closing.
(c) If prior to the completion of the first audit
of the Surviving Corporation by its accountants after the
Closing, Alleghany and/or Newco has made a claim or claims
for indemnification under Section 9.4(e)(ii) or 11.1 hereof
in excess of $75,000 in the aggregate, then Alleghany shall
retain the lesser of all of the Holdback Shares or the number
of Holdback Shares with an aggregate Average Market Value
equal to the amount of such claim(s) (the "Indemnification
Shares") until the validity of Alleghany's and/or Newco's
indemnification claim(s) (i) has been determined to be valid,
in which case Alleghany and/or Newco shall be entitled to
retain (and shall become the owner of) the Indemnification
Shares with a value equal to the total amount of the claim(s)
determined to be valid, or (ii) has been determined to be
without merit or has been determined, together with any other
claims or determinations to the date of such determination,
to have resulted in Liabilities to Alleghany and/or Newco of
less than $75,000 in the aggregate, in which case all of the
Indemnification Shares shall immediately be distributed to
the Shareholders. Any Holdback Shares which do not become
Indemnification Shares shall be distributed to the
Shareholders in proportion to their ownership interests in
the Company immediately prior to the Closing. Stock
dividends on the Holdback Shares or Indemnification Shares
shall be distributed to the Shareholders or retained by
Alleghany in the same proportion as the Holdback Shares or
Indemnification Shares are so distributed or retained.
(d) Any indemnification to which Alleghany and/or
Newco shall be entitled under Section 9.4(e)(ii) or 11.1
hereof shall not be limited to the amount of the Holdback
Shares or Indemnification Shares and shall be subject to the
terms of Section 11.3 hereof.
(e) The procedures to be followed in connection
with the assertion of claims pursuant to this Section 3.2 are
set forth in Article XI hereof.
<PAGE>
3.3. Payment for Shares.
------------------
(a) At the Effective Time, each registered holder
of a certificate or certificates representing Shares (a
"Holder") shall surrender to Alleghany such certificate or
certificates, and, subject to Section 3.2 hereof, shall
receive in exchange therefor a certificate representing the
number of full Alleghany Shares into which the Shares
represented by the surrendered certificate or certificates
shall have been converted, and cash in lieu of any fractional
shares to which the Holder otherwise would be entitled.
(b) If any certificate or certificates which
immediately prior to the Effective Time represented Shares
are for any reason not surrendered at the Effective Time
pursuant to Section 3.3(a) hereof, such certificate or
certificates shall be deemed for all corporate purposes to
evidence ownership of the number of full Alleghany Shares
into which the Shares represented by such certificate or
certificates shall have been converted and cash in lieu of
any fractional Alleghany Shares. No dividends or
distributions will be paid to a Holder until he or she has
surrendered his or her certificate or certificates
representing Shares, upon which surrender there shall be paid
to such Holder, but without interest thereon, all dividends
and distributions payable on the Alleghany Shares subsequent
to the Effective Time to which they are entitled; provided,
--------
however, that stock dividends payable on Holdback Shares or
-------
Indemnification Shares shall be distributed or retained as
provided in Section 3.2 hereof. No transfers shall be made
on the stock transfer books of the Surviving Corporation at
the Effective Time, except to Alleghany as provided in
Section 3.1(b) hereof.
(c) If a certificate for Alleghany Shares is to be
issued to a person other than the Holder of the certificate
surrendered, it shall be a condition of such issuance that
the certificate so surrendered shall be properly endorsed or
otherwise in proper form for transfer and that the person
requesting such issuance shall pay any transfer or other
taxes required by reason of the issuance to a person other
than the Holder of the certificate surrendered or establish
to the satisfaction of the Surviving Corporation that such
tax has been paid or is not applicable.
<PAGE>
(d) None of Alleghany, Newco or the Company shall
be liable to any Holder for any Alleghany Shares transferred
or any amount paid to a public official pursuant to any
applicable abandoned property, escheat or similar law.
ARTICLE IV
Representations and Warranties
of the Company and the Shareholders
Each of the Company and the Shareholders jointly
and severally represents and warrants to Alleghany and Newco
as follows:
4.1. Corporate Organization and Qualification.
----------------------------------------
Exhibit 4.1 hereto sets forth a true and complete list of the
jurisdiction of incorporation of the Company and the
jurisdictions in which it is qualified to do business. The
Company does not own any equity interest in any entities
except as set forth in Exhibit 4.11(f). The Company is a
corporation duly organized, validly existing and in good
standing under the laws of its jurisdiction of incorporation
and is in good standing as a foreign corporation in each
jurisdiction where the properties owned, leased or operated,
or the business conducted, by it require such qualification
and where the absence of which would have a material adverse
effect on the condition (financial or otherwise), earnings,
assets, liabilities or business of the Company. The Company
has the requisite corporate power and authority to carry on
its business as it is now being conducted. The Company has
not been engaged in any business other than the business
which is now being conducted by it. The Company has
delivered to Alleghany true and complete copies of its
Articles of Organization and By-laws, each as amended to
date, and each is in full force and effect.
4.2. Authorized Capital. The authorized capital
------------------
stock of the Company consists of 20,000 Shares, of which
10,000 Shares are issued and outstanding and entitled to vote
on the Merger. All of the issued and outstanding Shares have
been duly authorized and are validly issued and outstanding,
are fully paid and nonassessable, and are owned by the
persons listed in Exhibit 4.2 hereto (in the amounts so
listed) free and clear of all liens, pledges, security
interests, claims and other encumbrances of any nature
<PAGE>
whatsoever. Except as set forth above, there are no shares
of capital stock of the Company authorized, issued or
outstanding, and there are no preemptive rights or any
outstanding subscriptions, options, warrants, rights,
convertible securities or other agreements or commitments of
any character relating to the issued or unissued capital
stock or other securities of the Company. Exhibit 4.2 hereto
sets forth a list of all transactions in the Shares of the
Company since January 1, 1994. Neither the Company nor any
of the Shareholders own any Alleghany Shares. Neither the
Company nor any Shareholder is a party to any voting trust or
other agreement or understanding with respect to the voting
of the capital stock of the Company.
4.3. Corporate Authority.
-------------------
(a) Exhibit 4.3 hereto is a true and complete list
of all material permits, approvals, qualifications, filings,
notices, consents or waiting periods of third parties and
regulatory authorities which are required by the Company or
any of the Shareholders for the consummation of the
transactions contemplated by this Agreement (other than the
filing of the Massachusetts Articles of Merger), including
without limitation the transfer by law or otherwise of any
interest in the Lease (as defined below) as contemplated by
this Agreement (the "Company Approvals").
(b) The Company has full corporate power and
authority to enter into this Agreement and to consummate the
transactions contemplated hereby. The execution, delivery
and performance of this Agreement by the Company have been
duly and validly authorized by all necessary corporate action
on the part of the Company, including, without limitation,
the written consent of all of the Shareholders approving this
Agreement pursuant to Section 43 of the BCL. A true and
complete copy of such consent is set forth in Exhibit 4.3
hereto. This Agreement constitutes a legal, valid and
binding obligation of the Company and each of the
Shareholders, enforceable against it, him or her in
accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, and other similar laws
relating to or affecting creditors' rights generally or by
general equitable principles relating to enforceability
(regardless of whether such enforceability is considered in a
proceeding in equity or at law).
<PAGE>
(c) Neither the execution and delivery of this
Agreement, nor the consummation of the transactions
contemplated hereby, will (i) conflict with or result in a
breach or violation of any of the provisions of the Articles
of Organization or By-laws of the Company; (ii) conflict with
or result in a breach or violation of any restriction of any
kind on the ownership or transfer of the common stock of the
Company (including, without limitation, rights of first
refusal or restrictions contained in an agreement among
shareholders of the Company); (iii) subject to the granting
of the Company Approvals, conflict with, result in a breach
or violation of, result in a default or loss of a material
benefit under, or permit the acceleration of any obligation
under any provision of any agreement, indenture, mortgage,
lien, lease or other instrument or restriction of any kind to
which the Company or any of the Shareholders is a party or by
which any of their assets or properties is otherwise bound;
or (iv) subject to the granting of the Company Approvals,
violate any order, writ, injunction, decree, statute, rule or
regulation applicable to the Company or any of the
Shareholders or any of their assets or properties, in the
case of the clauses (iii) and (iv), the effect of which
conflict, breach, violation, default, loss or acceleration,
individually or in the aggregate, would have a material
adverse effect on the condition (financial or otherwise),
earnings, assets, liabilities or business of the Company.
4.4. Compliance.
----------
(a) The Company is, and has been since the date of
its incorporation, in compliance with all laws, regulations
and requirements applicable to the operation of its business
(including, without limitation, the Financial Institutions
Reform, Recovery and Enforcement Act, the Equal Credit
Opportunity Act, the Fair Housing Act, the Community
Reinvestment Act and the Home Mortgage Disclosure Act, and
the rules and regulations promulgated thereunder, anti-
redlining laws and rules, fair lending laws and rules, all
applicable state laws requiring registration, licensing or
qualification as, or relating to the business of, real estate
appraisers, the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), equal employment opportunity or
other similar laws), with which the failure to so comply
would have a material adverse effect on the condition
(financial or otherwise), earnings, assets, liabilities or
business of the Company.
<PAGE>
(b) Except as set forth in Exhibit 4.4 hereto, the
Company is not required to be registered, licensed or
qualified in any jurisdiction in order to conduct its
business as presently being conducted.
(c) The Company is not an "investment company"
within the meaning of the Investment Company Act of 1940, as
amended, and the Company is not required to be registered or
licensed as a broker-dealer under the Securities Exchange Act
of 1934, as amended (the "Exchange Act").
(d) None of the following has occurred since the
date of incorporation of the Company: (i) any investigative
or disciplinary proceedings by the Federal Trade Commission
or any other federal, state, local or self-regulatory
authority against the Company or any of its directors,
officers or employees; or (ii) the issuance of any consent
judgments, decrees, cease and desist or other orders,
disqualifications, penalties or special restrictions against
the Company or any of its directors, officers or employees
(including, without limitation, criminal convictions)
relating to or affecting the conduct of the business of the
Company.
4.5. Financial Statements.
--------------------
(a) The audited balance sheets of the Company as
at December 31, 1995 and 1994 and the related audited
statements of income and retained earnings and cash flows for
the twelve months then ended (the "Annual Financial
Statements"), which heretofore have been delivered to
Alleghany, present fairly the financial position and results
of operations of the Company as of the dates and for the
periods indicated therein in accordance with generally
accepted accounting principles applied on a consistent basis
throughout the periods indicated, except as may otherwise be
specifically indicated in such financial statements.
(b) The unaudited balance sheet of the Company as
at April 30, 1996 and the related unaudited statement of
income for the four months then ended (the "April 30, 1996
Financial Statements"), which heretofore have been delivered
to Alleghany, present fairly the financial position and
results of operations of the Company as of the dates and for
the periods indicated therein in accordance with generally
accepted accounting principles (including all adjustments
required by generally accepted accounting principles) applied
<PAGE>
on a basis consistent with the Annual Financial Statements;
provided, however, that such unaudited financial statements
-------- -------
do not contain footnotes.
4.6. Undisclosed Liabilities. As at December 31,
-----------------------
1995, the Company did not have any obligations or liabilities
of any nature, whether absolute, accrued, contingent or
otherwise, which, individually or in the aggregate, would
have a material adverse effect on the condition (financial or
otherwise), earnings, assets, liabilities or business of the
Company except as and to the extent disclosed in the Annual
Financial Statements. Since December 31, 1995, the Company
has not incurred or become subject to any obligations or
liabilities of any nature, whether absolute, accrued,
contingent or otherwise which, individually or in the
aggregate, would have a material adverse effect on the
condition (financial or otherwise), earnings, assets,
liabilities or business of the Company.
4.7. No Material Adverse Change. Except as set
--------------------------
forth in Exhibit 4.7 hereto, since December 31, 1995, there
has not been any material adverse change in the condition
(financial or otherwise), earnings, assets, liabilities or
business of the Company as reflected in the Annual Financial
Statements, whether or not arising from transactions in the
ordinary course of business, and neither the Company nor any
Shareholder is aware of any fact or condition relating to the
business of the Company which any of them reasonably believes
might result in such a material adverse change after the
Closing Date.
4.8. No Dividends, Sale of Assets, etc. Except as
----------------------------------
set forth in Exhibit 4.8 hereto and as permitted by Section
10.1(f) hereof, since December 31, 1995, there has not been
any declaration, setting aside or payment of any dividend or
other distribution in respect of the capital stock of the
Company or any direct or indirect redemption, purchase or
other acquisition by the Company of any such stock; any sale,
assignment, transfer or other disposition of any material
tangible or intangible asset; or any amendment, termination
or waiver of any right of substantial value belonging to or
held by the Company.
<PAGE>
4.9. Litigation. There are no actions, suits,
----------
proceedings, claims, investigations or examinations pending
or, to the best knowledge of the Company or any Shareholder,
threatened against the Company or its businesses, properties
or assets, at law or in equity, before or by any federal,
state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality,
domestic or foreign, or before any private arbitration panel,
which, if adversely determined, would, individually or in the
aggregate, have a material adverse effect on the condition
(financial or otherwise), earnings, assets, liabilities or
business of the Company or would result in a judgment of more
than $25,000.
4.10. Tax Matters.
-----------
(a) The Company (and any corporation with regard
to which the Company is a successor in interest) has duly and
timely filed (either separately or on a consolidated or
combined basis) with the appropriate government agencies, all
federal income tax returns and reports and all state, local
and foreign tax returns and reports due (or have timely
obtained extensions of any returns due for which extensions
may be obtained) with respect to all income, sales, property,
corporate franchise and business taxes, customs duties, and
all other tax returns and reports of each and every kind in
any jurisdiction the filing of which is necessary or required
for the conduct of its business (the "Tax Returns"), and the
Tax Returns filed are true, correct and complete in all
respects. The term "Taxes" as used in this Agreement shall
mean all federal, state, local or foreign taxes, assessments,
interest, penalties or deficiencies, duties, fees and other
governmental charges or impositions of each and every kind
whether assessed against or measured by properties,
occupation, assets, wages, purchases, transfers, payments,
sales, use, gross receipts, value added, business, capital
stock, surplus, income, franchise, license, accumulations or
otherwise, in each case whether disputed or not.
(b) All Taxes imposed upon or required to be
collected or withheld by the Company have been (i) properly
and fully paid to the extent due and payable, or properly and
fully deposited to the extent required to be collected or
withheld and deposited, and (ii) adequately reserved (in
accordance with generally accepted accounting principles
applied on a basis consistent with that of prior years) in
<PAGE>
the case of Taxes payable or anticipated to be payable on
account of the operations, acts or omissions of the Company
for any and all periods, or in the case of Taxes collected or
withheld and not yet deposited. The Company does not and
will not have any liability, whether direct, indirect, fixed
or contingent, for any Taxes in excess of the reserves for
Taxes established on the books of the Company as of the date
hereof or, as to liabilities accruing thereafter, as of the
Closing Date. The Company is not delinquent in the payment
of any Taxes, nor has the Company requested any extension of
time within which to pay any Taxes, except to the extent that
such Taxes have since been paid. There is no agreement,
waiver or consent providing for an extension of time with
respect to the assessment of any Tax or deficiency against
the Company and no power of attorney granted by the Company
with respect to any Tax matter is currently in force. There
is no claim or deficiency for any Taxes which has been
threatened or asserted against the Company. There is no
action, suit, proceeding, investigation, audit or claim now
pending against or with respect to the Company with regard to
any Taxes, nor is any claim for additional Taxes or
assessment of Taxes asserted by any such authority.
(c) The Tax Returns of the Company have never been
examined by the Internal Revenue Service for any periods. No
state of facts exists or has existed which would constitute
grounds for the assessment of any Tax liability for any
periods. The Company has provided Alleghany with true and
complete copies of all federal, state and local income tax
returns constituting part of the Tax Returns which relate to
the conduct of the business of the Company or any entity with
regard to which the Company is a successor in interest, as
well as any correspondence and agreements with the Internal
Revenue Service or such state or local authorities for the
jurisdictions in which such returns are filed for all periods
for which assessments are not barred by operation of the
relevant statute of limitations.
(d) (i) The Company at all times and for each of
its taxable years since its incorporation has been, and
through the day of the Closing Date will remain, an "S
corporation" within the meaning of Section 1361(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), and
the Company's election to be treated as an "S corporation"
was duly executed and filed; (ii) there is no predecessor
corporation which would be treated as one corporation with
the Company for purposes of Section 1374(c)(1) of the Code;
(iii) no asset of the Company the basis of which is
<PAGE>
determined in whole or in part by the basis of such asset in
the hands of a "C corporation" (as such term is defined in
Section 1361(a)(2) of the Code) was acquired from any C
corporation; (iv) the Company could not be liable for the
Taxes of any person as a "transferee" within the meaning of
Section 6901 of the Code; (v) no property of the Company is
"tax-exempt use property" within the meaning of Section
168(h) of the Code, nor property that is being treated as
owned by another person pursuant to Section 168(f)(8) of the
Internal Revenue Code of 1954, as amended and in effect
immediately prior to the enactment of the Tax Reform Act of
1986; (vi) the Company is not a "real property holding
company" within the meaning of Sections 897(c)(2) and
897(c)(1)(A)(ii) of the Code; (vii) the Company is not a
"target" or "target affiliate" as a result of any transaction
to which Section 338 of the Code may apply; (viii) the
Company is not a party to any tax sharing agreement or tax
indemnity agreement which would require the Company to make
any payment to any other person by reason of any Tax imposed
upon such person; (ix) none of the Shareholders is a "foreign
person" within the meaning of Section 1445 of the Code; and
(x) the Company has never been a member of an affiliated
group of corporations which filed a consolidated federal
income tax return or been included on any combined or
consolidated Tax Return.
4.11. Assets.
------
(a) Clients and Real Estate Property Evaluation
-------------------------------------------
Services Agreements. Exhibit 4.11(a) hereto sets forth a
-------------------
true and complete list of all (i) clients of the Company,
showing for each client its name, address, fee arrangements
and billings for the year ended December 31, 1995 and the
four months ended April 30, 1996 and (ii) agreements
currently in effect entered into by the Company to provide
real estate property evaluation services for a period greater
than six months. Each such agreement is in full force and
effect, the Company is not in material breach, violation or
default thereunder, and neither the Company nor any
Shareholder is aware of a material breach, violation or
default thereunder by any other parties thereto. No party to
any such agreement has terminated, or has advised the Company
or any Shareholder of its intention, orally or in writing, to
terminate, such agreement. Since December 31, 1993, the
<PAGE>
Company has not lost any clients who generated revenues,
during any twelve-month period, of more than $25,000.
(b) Other Agreements. Exhibit 4.11(b) hereto sets
----------------
forth a true and complete list of all written or express oral
agreements (other than the agreements referred to in Section
4.11(a) hereof) to which the Company is a party or by which
it is bound and which are material to the business of the
Company. Each such agreement is in full force and effect,
the Company is not in material breach, violation or default
thereunder, and neither the Company nor any Shareholder is
aware of a material breach, violation or default thereunder
by any other parties thereto.
(c) Real Property. Exhibit 4.11(c) hereto sets
-------------
forth a true and complete copy of the lease for the office
space occupied by the Company at 87 Elm Street, Hopkinton,
Massachusetts (the "Lease"). The Lease is in full force and
effect and there are no existing defaults thereunder nor does
there exist any event or condition which, with notice or
lapse of time or both, would give rise to a default or
constitute grounds for termination or re-entry thereunder.
The Company does not own or lease any other real property.
(d) Intangible Property. Exhibit 4.11(d) hereto
-------------------
is a true and complete list of all copyrights, patents,
trademarks, trade names, logos and assumed or other names
owned or used by the Company in its business, other than
rights associated with the Third Party Programs or the
Proprietary Software (each as defined in Section 4.11(e)
hereof). All rights set forth in Exhibit 4.11(d) hereto are
valid, subsisting and in full force and effect and, to the
best knowledge of the Company and each of the Shareholders,
without interference by any other person. Neither the
Company nor any Shareholder has received any notice with
respect to, or otherwise has any knowledge of, any alleged
infringement or unlawful use of any intangible property right
owned or alleged to be owned by others.
(e) Intellectual Property.
---------------------
(i) Exhibit 4.11(e) hereto is a true and
complete list of all copyrights, patents, trademarks,
trade names, logos, licenses and other property rights,
<PAGE>
other than Third Party Programs (as hereinafter
defined), ("Intellectual Property") associated with the
Company's "MIPES" (Market Intelligence Property
Evaluation System) and "Voyager" proprietary software
systems (the "Proprietary Software"). The Company has
all rights in and to the Intellectual Property, the
Proprietary Software, all source codes for the
Proprietary Software and the tangible media upon which
such programs are recorded that are necessary to use the
Proprietary Software in the business of the Company as
it is now or may hereafter be conducted, including,
without limitation, the right to access, market and
distribute information stored in or used by the
Proprietary Software and the right to copy the
Proprietary Software and to use the Proprietary Software
in more than one location or on more than one hardware
device or configuration. All such rights are valid,
subsisting and in full force and effect and, to the best
knowledge of the Company and each of the Shareholders,
without interference by any other person, and no person
other than the Company has any right, proprietary or
otherwise, in or to the Proprietary Software, including,
without limitation, the source codes for the Proprietary
Software. Neither the Company nor any Shareholder has
received any notice with respect to, or otherwise has
any knowledge of, any alleged infringement or unlawful
use of any such right owned or alleged to be owned by
others.
(ii) Exhibit 4.11(e) hereto also sets forth a true
and complete list of all computer software programs
(including operating systems) used by the Company that,
except for rights in and to licenses, are not
proprietary to the Company (the "Third Party Programs"),
specifying whether such Third Party Programs are used by
or in connection with the Proprietary Software. All
Third Party Programs are utilized by the Company
pursuant to valid licenses which are in full force and
effect, and the Company and such utilization is not in
breach, violation or default of any such license.
Neither the Company nor any Shareholder has received any
notice with respect to, or otherwise has any knowledge
of, any alleged infringement or unlawful use of any
Third Party Program owned or alleged to be owned by
others.
<PAGE>
(f) Investment Securities. Exhibit 4.11(f) hereto
---------------------
sets forth a true and complete list of all securities owned
by the Company for its own account (the "Investment
Securities"). The acquisition and ownership of the
Investment Securities complied and complies in all material
respects with all applicable laws and regulations.
(g) Other Assets. Exhibit 4.11(g) hereto sets
------------
forth a true and complete list of all other assets (or
categories of assets) of the Company, including, without
limitation, client lists, books and records relating to the
organization or capitalization of the Company or operation of
the business of the Company, insurance policies, claims,
memberships and licenses.
(h) Title. Except as set forth in Exhibit 4.11(h)
-----
hereto, the Company has good and marketable title to all of
its assets, including, without limitation, the Proprietary
Software, free and clear of all liens, security interests,
pledges, agreements, claims, charges, options, covenants,
reservations, restrictions and encumbrances of any nature
whatsoever. All assets necessary for the conduct of the
business of the Company as currently conducted are owned by
or leased or licensed to it, and neither any Shareholder nor
any other person owns, or has any rights whatsoever in, any
such assets. To the extent applicable, such assets have been
properly maintained and are in good operating condition and
repair, ordinary wear and tear excepted.
4.12. Benefit Plans.
-------------
(a) Exhibit 4.12(a) hereto sets forth a true and
complete list of all employee benefit plans, agreements,
commitments, practices or arrangements of any type,
maintained, sponsored or contributed to by the Company or by
any entity which is affiliated with the Company under Section
414(b), (c), (m), or (o) of the Code or Section 4001 of ERISA
("ERISA Affiliate") for the benefit of any employee, former
employee, director or consultant of the Company or an ERISA
Affiliate, or with respect to which the Company or an ERISA
Affiliate has a liability, whether direct or indirect, actual
or contingent (the "Plans"). The Plans listed in Exhibit
4.12(a) include each Plan that is an "employee benefit plan"
as defined in Section 3(3) of ERISA (the "ERISA Plans"). The
<PAGE>
Company does not have any express or implied commitment to
create, incur liability with respect to or cause to exist any
other employee benefit plan, agreement, commitment, practice
or arrangement, to enter into any contract or agreement to
provide compensation or benefits, or to modify, change or
terminate any of the Plans. With respect to each Plan, the
Company has delivered to Alleghany true and complete copies
of:
(i) any and all plan texts and agreements,
including amendments;
(ii) all material employee communications
(including summary plan descriptions or material
modifications, if any);
(iii) the two most recent annual reports and
actuarial reports, if required under ERISA;
(iv) the most recent determination letter received
from the Internal Revenue Service with respect to each
Plan intended to qualify under Section 401(a) of the
Code; and
(v) any other material documents, including any
applicable trust or other funding agreement and the
latest financial statements thereof.
(b) Each Plan has been operated and administered
in accordance with its terms and applicable law, including
but not limited to ERISA and the Code. All contributions,
premiums and other payment obligations required to be made to
or in respect of any Plan have been made timely and have been
accrued on the financial statements of the Company. All
contributions made or required to be made under any Plan meet
the requirements for deductibility under the Code. There are
no pending, threatened, or anticipated claims (other than
routine claims for benefits) involving any Plan. There are
no unpaid penalties, fines or judgments, whether or not past
due, involving any of the Plans. All filings and submissions
required to be made by law in respect of any of the Plans
have been made timely, to the appropriate authority and were
complete in all material respects. All amendments, changes
or modifications to any of the Plans have been made in
accordance with the terms of such Plan and applicable law.
No Plan by its terms requires the Company or an ERISA
Affiliate to continue to employ any employee, director or
consultant. Each Plan, in whole or in part, may be amended,
<PAGE>
modified or terminated by the Company without liability to
itself except for benefits accrued to the effective date of
such termination.
(c) Each ERISA Plan intended to be "qualified"
within the meaning of Section 401(a) of the Code has been
determined by the Internal Revenue Service to be so qualified
and each trust maintained thereunder has been determined by
the Internal Revenue Service to be exempt from taxation under
Section 501(a) of the Code; no event has occurred since the
date of such determinations that would adversely affect such
qualification or tax exemption. No breach of fiduciary duty
or prohibited transaction has occurred with respect to which
the Company or any ERISA Plan would be liable or otherwise
damaged. All employee contributions under any ERISA Plan
have been made to such plan before becoming "plan assets"
under Department of Labor Regulation Section 2510.3-102.
(d) With respect to each Plan that provides
welfare benefits of the type described in Section 3(1) of
ERISA: (i) no such plan provides medical or death benefits
with respect to employees, former employees, directors or
consultants of the Company beyond their termination of
employment, other than coverage mandated by Sections 601-608
of ERISA and 4980B(f) of the Code; (ii) each such plan has
been administered in compliance with Sections 601-608 of
ERISA where applicable and 4980B(f) of the Code where
applicable; and (iii) no such plan has reserves, assets,
surpluses or prepaid premiums.
(e) No Plan is (i) a "multiemployer pension plan"
within the meaning of Section 3(37) or 4001(a)(3) of ERISA,
(ii) a plan described in Section 4063 or 4064 of ERISA, or
Section 413(c) of the Code, or (iii) a plan subject to
Section 412 of the Code or Section 302 of ERISA. Neither the
Company nor any ERISA Affiliate has ever maintained,
sponsored or contributed to, or has ever had any liability
with respect to, any plan described in the immediately
preceding sentence.
(f) Except as set forth in Exhibit 4.12(f) hereto,
the consummation of the transactions contemplated by this
Agreement will not (i) entitle any individual to severance
pay, or (ii) accelerate the time of payment, or increase the
amount, of compensation due any individual. No payment made
or contemplated under any of the Plans constitutes an "excess
parachute payment" within the meaning of Section 280G of the
Code.
<PAGE>
4.13. Interests of Officers, Directors and
------------------------------------
Shareholders. Except as set forth in Exhibit 4.13 hereto and
------------
other than in respect of salaries or amounts due in respect
of ordinary travel and business expenses and Benefit Plans,
no present officer, director or shareholder of the Company
nor any associate thereof has any agreement, loan or other
obligation outstanding with, to or from the Company or for
which the Company may be liable, or has any material interest
in any firm, person or entity with which the Company does
business. For purposes of this Section 4.13, "associate"
shall mean (1) any corporation or organization of which a
Shareholder is a director, officer or partner or is, directly
or indirectly, the beneficial owner of 10 percent or more of
any class of equity securities, (2) any trust or other estate
in which a Shareholder has a substantial beneficial interest
or as to which such Shareholder serves as trustee or in a
similar fiduciary capacity, and (3) any relative or spouse of
a Shareholder, or any relative of such spouse, who has the
same home as such Shareholder.
4.14. Employees. Exhibit 4.14 hereto is a true
---------
and complete list of all employees of the Company, their
employment dates and positions, whether any such employee has
a written agreement with the Company, and the current salary
of each such employee, and the salaries, incentive awards,
bonuses and other compensation paid to each such employee for
the year ended December 31, 1995 (shown separately). Since
December 31, 1995, the Company has not terminated or
experienced the resignation of any employee. There are no
collective bargaining agreements relating to any employees of
the Company. Within the last two years the Company has not
experienced any work stoppage or has been the subject of any
collective bargaining agreement.
4.15 Banks. Exhibit 4.15 hereto is a true and
-----
complete list of all banks or other financial institutions in
which the Company has an account or a line of credit, showing
a description of each account or line of credit, or in which
the Company has a safe deposit box. The Company does not
have any indebtedness for borrowings.
<PAGE>
4.16. Insurance. Exhibit 4.16 hereto sets forth a
---------
true and complete list of all policies of insurance
maintained by the Company, showing the subject matter, the
beneficiary and the amount of coverage for each policy.
Other than life insurance policies, the insurance coverage
provided by the policies of insurance in force is reasonably
adequate for the conduct of the business conducted by the
Company in accordance with sound business practices and is
not substantially different from that which is customary in
the industry.
4.17. Absence of Bank or Savings and Loan Status.
------------------------------------------
The Company (a) is not an "insured bank" or eligible for
federal deposit insurance within the meaning of the Federal
Deposit Insurance Act, as amended; (b) is not a "savings
association" for purposes of the Regulations for Savings and
Loan Holding Companies, 12 CFR 583-584 and the Regulations
for the Acquisition of Control of Savings Associations, 12
CFR 574; (c) does not accept deposits within the meaning of
12 U.S.C. 378; (d) is not a "bank" or a "bank holding
company," as such terms are defined in the Bank Holding
Company Act of 1956, as amended, and the regulations
promulgated thereunder (the "Bank Holding Company Act");
(e) does not own or "control" 5 percent or more of the voting
securities of a "bank" or "bank holding company," as such
terms are defined in the Bank Holding Company Act; (f) is not
regulated as a bank under the laws or regulations of its
jurisdiction of incorporation; (g) is not a "savings and loan
holding company"; (h) does not "control" any "savings
association," as such terms are defined in 12 CFR 574 and
583; (i) has not acquired by purchase or otherwise, and does
not retain, more than 5 percent of the voting stock or shares
of a "savings association" or "savings and loan holding
company," as such terms are defined in 12 CFR 583; and
(j) is not regulated as a savings and loan institution under
the laws or regulations of its jurisdiction of incorporation.
4.18. Brokers and Finders. None of the Company,
-------------------
any of its officers, directors or employees, or any
Shareholder has employed any broker or finder or incurred any
liability for any brokerage fees, commissions or finders fees
in connection with the transactions contemplated by this
Agreement, except that the Company has retained Tucker
Anthony Incorporated as its financial advisor, the
arrangements with which have been disclosed in writing to
<PAGE>
Alleghany prior to the date hereof and the fees of which
shall be paid solely by the Company. The fees and expenses
of Tucker Anthony Incorporated which have been paid by the
Company through the date hereof plus the fees and expenses
which shall be due in the future to Tucker Anthony
Incorporated equal $261,244 in the aggregate.
4.19. Status of Shareholders. Each Shareholder
----------------------
represents that: (a) such Shareholder is an "accredited
investor" within the meaning of Rule 501(a) of Regulation D
promulgated under the Securities Act of 1933, as amended (the
"Securities Act"); (b) such Shareholder has such knowledge
and experience in financial and business matters as to be
capable of evaluating the merits and risks of such
Shareholder's acquisition of Alleghany Shares hereunder; (c)
such Shareholder has the ability to bear the economic risks
of such Shareholder's acquisition hereunder, including a
complete loss of his or her investment in Alleghany Shares;
(d) such Shareholder has been furnished with and has had
access to such information as such Shareholder has considered
necessary to make a determination as to his or her
acquisition hereunder; (e) such Shareholder has had all
questions asked by such Shareholder concerning the operations
of Alleghany and Newco answered by Alleghany and Newco in a
satisfactory manner; (f) such Shareholder has not been
offered the Alleghany Shares by any form of general
solicitation or general advertising, including, without
limitation, any advertisement, article, notice or other
communication published in any newspaper, magazine or similar
media or broadcast over television or radio, or any seminar
or meeting whose attendees have been invited by any general
solicitation or general advertising; and (g) such Shareholder
has not relied on any representations and warranties of
Alleghany and Newco other than those contained in this
Agreement.
4.20. Investment Representation. The Alleghany
-------------------------
Shares to be acquired by each Shareholder will be acquired by
such Shareholder for his or her own account for purposes of
investment and not with a view to distribution in a manner
which would be in violation of the Securities Act or the
securities or "blue sky" laws of any state or jurisdiction of
the United States, provided that any disposition of such
Shareholder's property shall at all times be within his or
her control. Such Shareholder agrees that he or she will
<PAGE>
comply with all federal and state securities or "blue sky"
laws with respect to the Alleghany Shares.
4.21. Shareholder Understandings.
--------------------------
(a) Each Shareholder understands that the
Alleghany Shares to be acquired by the Shareholders have not
been registered under the Securities Act and may be
transferred only if so registered or if an exemption
therefrom is available. Such Shareholder will not sell or
dispose of any of the Alleghany Shares without (i) the
registration, qualification, approval and listing of such
Alleghany Shares, or (ii) the delivery to Alleghany of an
opinion of counsel, in form and substance reasonably
satisfactory to counsel for Alleghany, that such proposed
sale or disposition is exempt from the provisions of Section
5 of the Securities Act and the applicable securities or
"blue sky" laws of any state or jurisdiction of the United
States.
(b) Each of the certificates for the Alleghany
Shares received by each Shareholder pursuant to this
Agreement may bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "ACT"). NO SALE, ASSIGNMENT, PLEDGE OR
OTHER DISPOSITION OF THESE SECURITIES MAY BE EFFECTED
UNTIL THESE SECURITIES HAVE BEEN REGISTERED UNDER THE
ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS
AN OPINION OF COUNSEL SATISFACTORY TO ALLEGHANY
CORPORATION IS RECEIVED TO THE EFFECT THAT SUCH
REGISTRATION IS NOT REQUIRED UNDER THE ACT OR SUCH STATE
SECURITIES LAWS."
(c) Notwithstanding the effectiveness of such
registration, qualification and approval, such Shareholder
understands that, until the publication of Alleghany's
consolidated financial statements which include at least
thirty days of post-Merger operations, each of the
certificates for the Alleghany Shares received by him or her
pursuant to this Agreement may bear the following legend:
"NO TRANSFER OF THE SHARES REPRESENTED BY THIS
CERTIFICATE SHALL BE VALID OR EFFECTIVE UNLESS AND UNTIL
THE CONSOLIDATED FINANCIAL STATEMENTS OF ALLEGHANY
CORPORATION WHICH INCLUDE AT LEAST THIRTY DAYS OF
<PAGE>
OPERATIONS SUBSEQUENT TO THE DATE ON WHICH THIS
CERTIFICATE WAS ISSUED HAVE BEEN MADE PUBLICLY
AVAILABLE."
4.22. Pooling. Since December 1, 1992, neither
-------
the Company nor any of the Shareholders has taken any of the
actions set forth in Exhibit 4.22 hereto. The Response to
Pooling Questions for Chicago Title and Trust, dated June 4,
1996, a copy of which has heretofore been delivered to
Alleghany, is true and complete as of such date, as of the
date hereof and will be true and complete as of the Closing.
4.23. Aggregate Materiality. There are no events,
---------------------
situations, obligations or liabilities of the types described
in this Article IV and excepted therefrom solely because
individually they do not have a material adverse effect on
the condition (financial or otherwise), earnings, assets,
liabilities or business of the Company which, in the
aggregate, would have a material adverse effect on the
condition (financial or otherwise), earnings, assets,
liabilities or business of the Company.
4.24. Disclosure. The information provided by the
----------
Company and the Shareholders in this Agreement, in the
exhibits hereto and in each of the documents executed and
delivered on the date hereof, on the Closing Date or
otherwise pursuant hereto, does not contain any untrue
statement of a material fact or omit to state herein or
therein a material fact necessary to make the statements made
herein or therein, in light of the circumstances under which
they are made, not misleading.
ARTICLE V
Representations and Warranties of Alleghany and Newco
Each of Alleghany and Newco hereby jointly and
severally represents and warrants to the Company and the
Shareholders as follows:
5.1. Corporate Organization and Qualification.
----------------------------------------
Each of Alleghany and Newco is a corporation duly organized,
validly existing and in good standing under the laws of its
<PAGE>
jurisdiction of incorporation and is in good standing as a
foreign corporation in each jurisdiction where the properties
owned, leased or operated, or the business conducted, by it
require such qualification and where the absence of which
would have a material adverse effect on the condition
(financial or otherwise), earnings, assets, liabilities or
business of Alleghany and its subsidiaries taken as a whole.
Each of Alleghany and Newco has the requisite corporate power
and authority to carry on its business as it is now being
conducted. Alleghany has delivered to the Company a true and
complete copy of its Restated Certificate of Incorporation
and By-Laws, and of Newco's Articles of Organization and
Bylaws, each as amended to date, and each is in full force
and effect.
5.2. Authorized Capital. The authorized capital
------------------
stock of Alleghany consists of 22,000,000 Alleghany Shares,
of which 7,183,394 Alleghany Shares are issued and
outstanding as of the date hereof, and 8,000,000 shares of
preferred stock, par value $1.00 per share, none of which are
issued and outstanding as of the date hereof. All of the
issued and outstanding Alleghany Shares have been duly
authorized and are validly issued, fully paid and
nonassessable. The authorized capital stock of Newco
consists of 1,000 shares of common stock, without par value,
all of which are issued and outstanding as of the date
hereof. Such shares have been duly authorized and are
validly issued, fully paid and nonassessable, and are owned
by Alleghany free and clear of all liens, pledges, security
interests, claims and other encumbrances of any nature
whatsoever.
5.3. Corporate Authority. Exhibit 5.3 hereto is a
-------------------
true and complete list of all material permits, approvals,
qualifications, filings, consents or waiting periods of third
parties and regulatory authorities which are required by
Alleghany or Newco for the consummation of the transactions
contemplated by this Agreement (other than the filing of the
Massachusetts Articles of Merger) (the "Alleghany and Newco
Approvals"). Each of Alleghany and Newco has full corporate
power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The
execution, delivery and performance of this Agreement by
Alleghany and Newco have been duly and validly authorized by
all necessary corporate action on the part of Alleghany and
Newco, and this Agreement constitutes a legal, valid and
<PAGE>
binding obligation of each of Alleghany and Newco,
enforceable against it in accordance with its terms, except
as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, and other
similar laws relating to or affecting creditors' rights
generally or by general equitable principles relating to
enforceability (regardless of whether such enforceability is
considered in a proceeding in equity or at law). Neither the
execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, will
(a) conflict with or result in a breach or violation of any
of the provisions of Alleghany's Restated Certificate of
Incorporation or By-Laws or Newco's Articles of Organization
or Bylaws; (b) subject to the granting of the Alleghany and
Newco Approvals, conflict with, result in a breach or
violation of, result in a default or loss of a material
benefit under, or permit the acceleration of any obligation
under any provision of any agreement, indenture, mortgage,
lien, lease or other instrument or restriction of any kind to
which Alleghany or Newco is a party or by which any of their
respective assets or properties is otherwise bound; or (c)
subject to the granting of the Alleghany and Newco Approvals,
violate any order, writ, injunction, decree, statute, rule or
regulation applicable to Alleghany or Newco or any of their
respective assets or properties, in the case of clauses (b)
and (c), the effect of which conflict, breach, violation,
default, loss or acceleration, individually or in the
aggregate, would have a material adverse effect on the
condition (financial or otherwise), earnings, assets,
liabilities or business of Alleghany and its subsidiaries
taken as a whole.
5.4. Compliance. Each of Alleghany and Newco is
----------
in compliance with all laws, regulations and requirements
applicable to the operation of its business, with which the
failure to so comply would have a material adverse effect on
the condition (financial or otherwise), earnings, assets,
liabilities or business of Alleghany and its subsidiaries
taken as a whole.
5.5. Financial Statements.
--------------------
(a) The audited consolidated balance sheets of
Alleghany and its subsidiaries as at December 31, 1995 and
1994 and the related audited consolidated statements of
earnings, changes in common stockholders' equity and cash
<PAGE>
flows for each of the years then ended ("Alleghany's Annual
Financial Statements"), which heretofore have been delivered
to the Company, present fairly the consolidated financial
position and results of operations of Alleghany and its
subsidiaries as of the dates and for the periods indicated
therein in accordance with generally accepted accounting
principles applied on a consistent basis throughout the
periods indicated, except as may otherwise be specifically
indicated therein.
(b) The unaudited consolidated balance sheet of
Alleghany as at March 31, 1996 and the related unaudited
consolidated statements of earnings and cash flows for the
three months then ended ("Alleghany's March 31, 1996
Financial Statements"), which heretofore have been delivered
to the Company, present fairly the consolidated financial
position and results of operations of Alleghany and its
subsidiaries as of the dates and for the periods indicated
therein in accordance with generally accepted accounting
principles (including all adjustments required by generally
accepted accounting principles) applied on a basis consistent
with Alleghany's Annual Financial Statements, except as may
otherwise be specifically indicated therein; provided,
--------
however, that such unaudited financial statements do not
-------
contain complete footnotes.
5.6. Undisclosed Liabilities. As at December 31,
-----------------------
1995, Alleghany had no obligations or liabilities of any
nature, whether absolute, accrued, contingent or otherwise,
which, individually or in the aggregate, would have a
material adverse effect on the condition (financial or
otherwise), earnings, assets, liabilities or business of
Alleghany and its subsidiaries taken as a whole, except and
to the extent disclosed in Alleghany's Annual Financial
Statements as at December 31, 1995. Since December 31, 1995,
Alleghany has not incurred or become subject to any
obligations or liabilities of any nature, whether absolute,
accrued, contingent or otherwise, which, individually or in
the aggregate, would have a material adverse effect on the
condition (financial or otherwise), earnings, assets,
liabilities or business of Alleghany and its subsidiaries
taken as a whole, except and to the extent disclosed in
Alleghany's March 31, 1996 Financial Statements.
<PAGE>
5.7. No Material Adverse Change. Since
--------------------------
December 31, 1995, there has not been any material adverse
change in the condition (financial or otherwise), earnings,
assets, liabilities or business of Alleghany and its
subsidiaries taken as a whole as reflected in Alleghany's
Annual Financial Statements as at December 31, 1995, whether
or not arising from transactions in the ordinary course of
business, and Alleghany is not aware of any fact or condition
relating to its business which it reasonably believes might
result in such a material adverse change after the Closing
Date. A fluctuation in the market value of Alleghany Shares
due to general market conditions shall not in and of itself
be deemed to be a material adverse change for purposes of
this Section 5.7.
5.8. Litigation. There are no actions, suits,
----------
proceedings, claims, investigations or examinations pending
or, to the best knowledge of Alleghany, threatened against
Alleghany or its businesses, properties or assets, at law or
in equity, before or by any federal, state, municipal or
other governmental department, commission, board, bureau,
agency or instrumentality, domestic or foreign, which, if
adversely determined, would have a material adverse effect on
the condition (financial or otherwise), earnings, assets,
liabilities or business of Alleghany and its subsidiaries
taken as a whole.
5.9. Brokers and Finders. None of Alleghany,
-------------------
Transferee or any of their officers, directors or employees
has employed any broker or finder or incurred any liability
for any brokerage fees, commissions or finders fees in
connection with the transactions contemplated by this
Agreement.
5.10. SEC Filings.
-----------
(a) Alleghany has delivered to the Company: (i)
its annual reports to stockholders for the fiscal years ended
December 31, 1995 and 1994; its annual reports on Form 10-K
for the fiscal years ended December 31, 1995 and 1994;
(ii) its proxy statements relating to the meetings of the
stockholders of Alleghany held April 26, 1996 and April 28,
1995; and (iii) all of its other reports, statements,
<PAGE>
schedules and registration statements filed with the SEC
since December 31, 1995.
(b) As of its filing date, no such report or
statement filed pursuant to the Exchange Act contained any
untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were
made, not misleading.
5.11. Aggregate Materiality. There are no events,
---------------------
situations, obligations or liabilities of the types described
in this Article V and excepted therefrom solely because
individually they do not have a material adverse effect on
the condition (financial or otherwise), earnings, assets,
liabilities or business of Alleghany and its subsidiaries
taken as a whole which, in the aggregate, would have a
material adverse effect on the condition (financial or
otherwise), earnings, assets, liabilities or business of
Alleghany and its subsidiaries taken as a whole.
5.12. Disclosure. The information provided by
----------
Alleghany and Newco in this Agreement, in the exhibits hereto
and in each of the documents executed and delivered on the
date hereof, on the Closing Date or otherwise pursuant
hereto, does not contain any untrue statement of a material
fact or omit to state herein or therein a material fact
necessary to make the statements made herein or therein, in
light of the circumstances under which they are made, not
misleading.
ARTICLE VI
Conditions to the Obligations of Alleghany and Newco
The obligations of each of Alleghany and Newco
under this Agreement are subject to the satisfaction, or the
waiver in writing by Alleghany and Newco, on or before the
Closing Date, of each of the following conditions:
6.1. Compliance with Agreement. The Company and
-------------------------
each Shareholder shall have performed and complied in all
material respects with all the terms, covenants and
conditions required by this Agreement to be performed or
<PAGE>
complied with by it, him or her on or before the Closing
Date, and Alleghany and Newco shall have received from the
Company and each Shareholder at the Closing a certificate,
dated the Closing Date, to that effect. Attached to the
Company's certificate shall be a certified copy of the
resolutions of its Board of Directors, and a certified copy
of the written consent of the Shareholders, in each case
adopting or approving this Agreement and authorizing the
transactions contemplated hereby.
6.2. Representations and Warranties. The
------------------------------
representations and warranties made by the Company and each
Shareholder in this Agreement, in the exhibits hereto and in
each of the documents executed and delivered on the date
hereof, on the Closing Date or otherwise pursuant hereto,
shall be true and correct in all material respects (except
that each of the representations and warranties made by the
Company and each Shareholder which is qualified by
materiality shall be true and correct in all respects) as of
the Closing Date, except for any changes permitted by the
terms hereof or consented to by Alleghany and Newco, and
Alleghany and Newco shall have received from the Company and
each Shareholder at the Closing a certificate, dated the
Closing Date, to that effect.
6.3. Opinion of Counsel for the Company and the
------------------------------------------
Shareholders. Alleghany and Newco shall have received an
------------
opinion from Peabody & Brown, counsel for the Company and the
Shareholders, dated the Closing Date, substantially in the
form set forth in Exhibit 6.3 hereto.
6.4. Approvals. All Company Approvals and all
---------
Alleghany and Newco Approvals shall have been obtained and be
in effect on the Closing Date.
6.5. Accounting Treatment. The acquisition of the
--------------------
Company by Alleghany pursuant to the Merger shall have met
all of the conditions for the "pooling-of-interests" method
of accounting for business transactions, in accordance with
Accounting Principles Board Opinion No. 16, Business
--------
Combinations, and Alleghany shall have received such
------------
<PAGE>
assurances from its independent certified public accountants
with respect thereto as it shall reasonably require.
6.6. Key Man Insurance. All actions (except for
-----------------
payment of any premiums, deposits or fees) reasonably
required to be taken by the Company and Robert F. Sennott,
Jr., Mark P. Sennott and Bryant R. Linares to apply for a
life insurance policy on each of Robert F. Sennott, Jr., Mark
P. Sennott and Bryant R. Linares each in the amount of
$2 million, naming the Company, the Surviving Corporation and
the Transferee as beneficiaries thereunder, shall have been
taken.
6.7. Client Discussions. Alleghany shall not have
------------------
notified the Company within 10 business days after the
execution and delivery of this Agreement by the parties
hereto of its decision not to proceed with the transactions
contemplated by this Agreement (which decision shall be in
its sole discretion), based on its discussions with the
clients of the Company.
6.8. Amendment to Employment Agreement. The
---------------------------------
Employment Agreement of Walter Morgan entered into as of
February 12, 1996 (and dated February 8, 1996 on the first
page thereof) shall be amended to the satisfaction of
Alleghany.
6.9. Licensed Software. All actions to remediate
-----------------
any use by the Company of non-licensed computer software
shall have been taken by the Company to the satisfaction of
Alleghany and Newco.
6.10. Company Records. All actions to remediate
---------------
any inaccuracies or omissions in the Company's records
(including without limitations the Company's minute books and
stock records) shall be remediated to the satisfaction of
Alleghany and Newco.
6.11. Indebtedness. The Company shall have no
------------
outstanding indebtedness to Fleet Bank of Massachusetts, N.A.
("Fleet Bank") and Alleghany shall have received from Fleet
Bank evidence to such effect and a commitment to release all
<PAGE>
liens against the Company and its assets if the Fleet Bank
lines of credit are terminated. The Company shall have no
outstanding indebtedness to Citizens Bank and Alleghany shall
have received from Citizens Bank evidence to such effect.
6.12. Audit of April 30, 1996 Financial
---------------------------------
Statements. Alleghany shall have completed its audit of the
----------
April 30, 1996 Financial Statements and shall, in its sole
discretion, be satisfied with the results of such audit.
ARTICLE VII
Conditions to the Obligations
of the Company and the Shareholders
The obligations of the Company and the Shareholders
under this Agreement are subject to the satisfaction, or
waiver in writing by the Company and the Shareholders, on or
before the Closing Date, of each of the following conditions:
7.1. Compliance with Agreement. Each of Alleghany
-------------------------
and Newco shall have performed and complied in all material
respects with all the terms, covenants and conditions
required by this Agreement to be performed or complied with
by it on or before the Closing Date, and the Company and the
Shareholders shall have received from each of Alleghany and
Newco at the Closing a certificate, dated the Closing Date,
to that effect. Attached to Newco's certificate shall be a
certified copy of the resolutions of the Board of Directors
of Newco, and a certified copy of the written consent of
Alleghany as the sole stockholder of Newco, and attached to
Alleghany's certificate shall be a certified copy of the
resolutions of the Board of Directors of Alleghany, in each
case adopting or approving this Agreement and authorizing the
transactions contemplated hereby.
7.2. Representations and Warranties. The
------------------------------
representations and warranties made by Alleghany and Newco in
this Agreement, in the exhibits hereto and in each of the
documents executed and delivered on the date hereof, on the
Closing Date or otherwise pursuant hereto, shall be true and
correct in all material respects (except that each of the
representations and warranties made by Alleghany and Newco
<PAGE>
which is qualified by materiality shall be true and correct
in all respects) as of the Closing Date except for any
changes permitted by the terms hereof or consented to by the
Company and the Shareholders, and the Company and the
Shareholders shall have received from each of Alleghany and
Newco at the Closing a certificate, dated the Closing Date,
to that effect.
7.3. Opinion of Counsel for Alleghany and Newco.
------------------------------------------
The Company and the Shareholders shall have received an
opinion from Donovan Leisure Newton & Irvine, counsel for
Alleghany and Newco, dated the Closing Date, substantially in
the form set forth in Exhibit 7.3 hereto.
7.4. Approvals. All Company Approvals and all
---------
Alleghany and Newco Approvals shall have been obtained and be
in effect on the Closing Date.
ARTICLE VIII
Covenants of the Company and the Shareholders
7.5. Covenants Pending the Closing. From and
-----------------------------
after the date hereof and until the Closing Date:
(a) Access to Properties, Books and Records. The
---------------------------------------
Company and the Shareholders shall afford or cause to be
afforded to Alleghany and to the attorneys, accountants and
other authorized representatives (collectively,
"Representatives") of Alleghany reasonable access during
normal business hours as often as they reasonably desire to
the Company and its employees, properties, books and records
in order to afford Alleghany the opportunity to make such
investigations of the affairs of the Company as it deems
desirable. The Company and the Shareholders shall also
furnish or cause to be furnished to Alleghany such
information relating to the business and affairs of the
Company as Alleghany shall from time to time reasonably
request. Alleghany also shall be afforded the opportunity to
confer with the Company's clients if Alleghany determines
that to be necessary or advisable. Alleghany shall, and
shall cause its attorneys, accountants and other authorized
representatives to, hold in confidence, in the same manner in
<PAGE>
which Alleghany preserves its own confidential information,
information of a confidential or proprietary nature which is
obtained from the Company or the Shareholders and is not
otherwise publicly available or ascertainable. In the event
of any termination of this Agreement pursuant to Section 12.1
hereof, Alleghany shall return to the Company all materials
obtained from the Company containing information of a
confidential or proprietary nature, shall destroy all other
materials which reflect or contain any such information, and
shall maintain the confidentiality of information of a
confidential or proprietary nature which is obtained from the
Company or the Shareholders and shall not use any such
information for its own benefit.
(b) Carry On in Regular Course. The Company shall
--------------------------
carry on its business diligently and substantially in the
same manner as presently being conducted and shall not make
or institute any material change in its methods of operations
or doing business; provided, however, that the Company shall
-------- -------
not enter into, terminate, amend or renew, any agreement
which, if in existence as of the date hereof, would have been
required to be set forth on any exhibit delivered pursuant to
Section 4.11 hereof, without the prior written consent of
Alleghany. Without the prior written consent of Alleghany,
and except as described in Exhibit 4.12(f) hereto, neither
the Company nor any of the Shareholders shall grant any
bonuses to any of the employees of the Company, alter or
increase the present compensation of such employees, amend
the current terms of the Benefit Plans, make a loan or gift
to any of the Shareholders or employees of the Company or
declare, set aside or pay any dividend or other distribution
in respect of the capital stock of the Company or directly or
indirectly redeem, purchase or otherwise acquire any capital
stock of the Company. No capital expenditures shall be
incurred or contracted for by or on behalf of the Company in
excess of $10,000 in the aggregate and no borrowings of any
kind (including, without limitation under any existing lines
of credit or loan agreements) shall be made by the Company
without the prior written consent of Alleghany. No sale,
assignment, transfer or other disposition of any material
tangible or intangible asset of the Company and no amendment,
termination or waiver of any right of substantial value
belonging to or held by the Company shall be made or
contracted for by or on behalf of the Company without the
prior written consent of Alleghany.
<PAGE>
(a) Preservation of Organization. The Company
----------------------------
shall maintain its corporate existence and powers and its
qualification as a foreign corporation in the states listed
in Exhibit 4.1 hereto. The Company shall not amend its
Articles of Organization or By-laws without the prior written
consent of Alleghany, and the Company shall not make any
change in its authorized or issued capital stock; provided,
--------
however, that the Company shall amend its By-laws immediately
-------
prior to the Effective Time in any manner as Alleghany shall,
in its sole discretion, request. Each of the Company and the
Shareholders shall use its, his or her best efforts to
(i) preserve intact the business organization of the Company,
(ii) keep available to Alleghany the present key officers and
employees of the Company, (iii) preserve for Alleghany the
relationships of the Company with its clients, suppliers and
others having business relations with it, (iv) maintain all
of the properties of the Company in customary repair, order
and condition, and (v) take all steps reasonably necessary to
maintain the intangible assets of the Company.
8.2. Filings and Approvals. Each of the Company
---------------------
and the Shareholders shall duly make all regulatory filings
required to be made by it in respect of this Agreement or the
transactions contemplated hereby.
8.3. Reasonable Efforts. Each of the Company and
------------------
the Shareholders agrees to use commercially reasonable
efforts to consummate the transactions contemplated hereby,
including, without limitation, satisfaction of the conditions
set forth in Article VI hereof.
8.4. Further Assurances. Each of the Shareholders
------------------
agrees that he or she will, from time to time at and
subsequent to the Closing Date, at the request of Alleghany
and without further consideration, execute and deliver such
other instruments of conveyance, assignment and transfer and
take such other actions as Alleghany may reasonably request
in order more effectively to consummate the transactions
contemplated hereby. None of the Shareholders will take any
of the actions set forth in Exhibit 8.4 hereto.
<PAGE>
8.5. Compliance with Securities Laws. Each of the
-------------------------------
Shareholders agrees that he will comply with all federal and
state securities and "blue sky" laws with respect to the
Alleghany Shares.
8.6. COBRA Notices. With respect to events
-------------
occurring or conditions existing prior to Closing, the
Company and the Shareholders shall be responsible for any
notices required to be given to employees of the Company
pursuant to Section 4980B of the Code.
ARTICLE IX
Covenants of Alleghany and Newco
9.1. Filings and Approvals. Each of Alleghany and
---------------------
Newco shall duly make all regulatory filings required to be
made by it in respect of this Agreement or the transactions
contemplated hereby.
9.2. Reasonable Efforts. Each of Alleghany and
------------------
Newco agrees to use commercially reasonable efforts to
consummate the transactions contemplated hereby, including,
without limitation, satisfaction of the conditions set forth
in Article VII hereof.
9.3. Further Assurances. Alleghany agrees that it
------------------
will, from time to time at and subsequent to the Closing
Date, at the request of the Shareholders and without further
consideration, execute and deliver such other instruments of
conveyance, assignment and transfer and take such other
actions as the Shareholders may reasonably request in order
more effectively to consummate the transactions contemplated
hereby.
9.4. Registration Rights.
-------------------
(a) Registration. Subject to this Section 9.4(a),
------------
Alleghany shall file within 30 days after the Closing, and
shall use its reasonable best efforts to effect as promptly
<PAGE>
as practicable thereafter, but no earlier than the first day
after the publication of Alleghany's consolidated financial
statements which include at least thirty days of post-Merger
operations, the registration on Form S-3 and/or qualification
with, or the approval of any governmental authority under any
federal or state securities laws of all of the Alleghany
Shares (including the Holdback Shares) acquired by the
Shareholders under this Agreement, as may be required to
permit the sale or other disposition of such Alleghany Shares
by the Shareholders. Alleghany may, upon written notice to
the Shareholders, defer such registration one time for a
reasonable period but not in excess of 90 days if it has made
a good faith determination that the filing of a registration
statement at such time would require the disclosure of
material information which Alleghany has a bona fide business
purpose for preserving as confidential or that Alleghany is
unable to comply with SEC requirements; as of the date of
this Agreement, Alleghany does not know of any circumstance
which exists on the date of this Agreement which would result
in a delay in registration pursuant to this sentence.
Alleghany shall be under no obligation to effect an
underwritten offering of the Alleghany Shares. Alleghany
shall not be required to effect more than one registration
pursuant to this Section 9.4(a).
(b) Effectiveness. Alleghany shall use its
-------------
reasonable best efforts to keep effective and maintain any
registration, qualification, approval or listing of the
Alleghany Shares required pursuant to this Section 9.4, and
from time to time to amend or supplement the prospectus used
in connection therewith to the extent necessary in order to
comply with applicable federal and state securities laws,
until the earlier of the date on which all of the Alleghany
Shares covered by the registration statement have been sold
by the Shareholders or two years after the effectiveness of
such registration statement. Alleghany shall furnish to each
Shareholder such number of copies of such prospectus, as
amended from time to time, and supplements thereto, as such
Shareholder may reasonably request.
(b) Expenses. All expenses incident to the
--------
obligations of Alleghany under Sections 9.4(a) and 9.4(b)
hereof (including, without limitation, registration fees,
printing or document reproduction expenses, and fees and
expenses of its counsel and accountants) shall be borne by
Alleghany, and all other expenses incident to the disposition
<PAGE>
by each Shareholder of the Alleghany Shares held by him or
her (including, without limitation, fees and expenses of his
or her counsel and all underwriting discounts, if any,
brokerage commissions and similar fees) shall be borne by
such Shareholder.
(d) Shareholder Agreements. Each Shareholder
----------------------
shall (i) furnish to Alleghany such information as Alleghany
may from time to time reasonably request in connection with
the registration statement and prospectus, any amendment or
supplement thereto or any other filings required by this
Section 9.4; (ii) from and after the Closing Date and for so
long as the registration, qualification, approval or listing
remains effective, promptly after the sale or any other
disposition by him or her of Alleghany Shares, give Alleghany
written notice of same; (iii) promptly notify Alleghany of
any event which comes to his or her attention which would
necessitate an amendment or supplement to the registration
statement, prospectus or any of the other filings required by
this Section 9.4; and (iv) suspend sales of Alleghany Shares
under such registration statement promptly upon receipt of
notice from Alleghany that such sales may not be made until
such registration statement and prospectus are amended or
supplemented as necessary.
(e) Indemnification under this Section 9.4.
--------------------------------------
(i) Alleghany agrees to indemnify, to the extent
permitted by law, the Shareholders and hold them
harmless at all times after the date of this Agreement
from and against and in respect of any and all
liabilities, losses, damages, settlements, claims, costs
or expenses, including, without limitation, attorneys'
fees (collectively, "Liabilities"), under the Securities
Act, state securities laws, common law or otherwise,
arising out of or due to (A) any untrue statement or
alleged untrue statement of a material fact contained in
any registration statement or prospectus relating to the
registration or qualification of the Alleghany Shares,
or (B) any omission or alleged omission to state in such
registration statement or prospectus a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under
which they were made, not misleading, except insofar as
such Liabilities arise out of or are due to any untrue
statement of a material fact contained in, or omission
<PAGE>
of a material fact from, information furnished in
writing to Alleghany by the Shareholders expressly for
use in such registration statement or prospectus. If
the offering pursuant to this Section 9.4 is made
through underwriters, Alleghany agrees to enter into an
underwriting agreement in customary form with such
underwriters and to indemnify such underwriters to the
same extent as provided above with respect to the
indemnification of the Shareholders.
(ii) The Shareholders jointly and severally agree
to indemnify, to the extent permitted by law, Alleghany,
its directors and officers and each person, if any, who
controls Alleghany within the meaning of Section 15 of
the Securities Act and hold them harmless at all times
after the date of this Agreement from and against and in
respect of any and all Liabilities under the Securities
Act, state securities laws, common law or otherwise,
arising out of or due to (A) any untrue statement or
alleged untrue statement of a material fact contained in
any registration statement or prospectus relating to the
registration or qualification of the Alleghany Shares,
or (B) any omission or alleged omission to state in such
registration statement or prospectus a material fact
required to be stated therein or necessary to make the
statements therein, in light of the circumstances under
which they were made, not misleading, but only to the
extent that such Liabilities arise out of or are due to
any untrue statement of a material fact contained in, or
omission of a material fact from, information furnished
in writing to Alleghany by the Shareholders expressly
for use in such registration statement or prospectus.
(iii) The procedures to be followed in connection
with the rights of indemnification provided in this
Section 9.4(e) are set forth in Section 11.4 hereof.
9.5. Covenants Relating to the Alleghany Shares.
------------------------------------------
(a) Upon any sale under an effective registration
statement contemplated by Section 9.4 hereof or promptly
after the third anniversary of the Closing Date, upon
delivery by any Shareholder of certificates representing the
Alleghany Shares to Alleghany, Alleghany will exchange such
certificates for certificates representing the same number of
Alleghany Shares without the legend referred to in Section
4.21(b) hereof.
<PAGE>
(b) Promptly upon the publication of Alleghany's
consolidated financial statements which include at least
thirty days of post-Merger operations, upon delivery by any
Shareholder of certificates representing the Alleghany Shares
to Alleghany, Alleghany will exchange such certificates for
certificates representing the same number of Alleghany Shares
without the legend referred to in Section 4.21(c) hereof.
9.6. Investment in the Surviving Corporation.
---------------------------------------
Alleghany or the Transferee shall be obligated to invest up
to an aggregate of $795,000 in the Surviving Corporation
during the 270 days after the Closing Date, such investment
to be used for capital expenditures and related operating
expenses of the Surviving Corporation. Installments of such
investment shall be made during such 270-day period upon
written requests made by the Board of Directors of the
Surviving Corporation submitted to the Senior Vice President
and Chief Financial Officer of Chicago Title and Trust
Company.
ARTICLE X
Covenants of the Shareholders and Alleghany
Relating to Certain Tax Matters
10.1. Pre-Merger and Straddle Period Taxes.
------------------------------------
(a) The Company, at its cost or expense, shall
prepare or cause to be prepared, and file or cause to be
filed, on a timely basis, all Tax Returns of the Company
(including any amendments thereto) in respect of taxable
periods ending on or before the Effective Time (the "Pre-
Merger Periods"), other than the income Tax Returns prepared
for the Pre-Merger Period ending on the Effective Time ("Pre-
Merger Tax Return"). The Company shall pay, or cause to be
paid, all Taxes other than income Taxes imposed in respect of
such Pre-Merger Periods, and the Shareholders shall pay, or
cause to be paid, all income Taxes in respect of such Pre-
Merger Periods.
(b) Any taxable period of the Company that begins
before the Effective Time and ends after the Effective Time
shall constitute a "Straddle Period" for purposes of this
Agreement. In the case of a Straddle Period, the
<PAGE>
Shareholders shall be solely responsible for all income Taxes
attributable to the portion of the period ending on the
Effective Time and Alleghany shall be solely responsible for
all income Taxes attributable to the portion of the period
after the Effective Time. For purposes of this Agreement,
the portion of any Tax that is attributable to the operations
of any entity for the portion of such Straddle Period up to
and including the date of the Effective Time shall be (i) in
the case of a Tax that is not based on net income, gross
income, sales or gross receipts, the total amount of such tax
for the period in question multiplied by a fraction, the
numerator of which is the number of days in the Straddle
Period up to and including the date of the Effective Time,
and the denominator of which is the total number of days in
such Straddle Period, and (ii) in the case of a Tax that is
based on any of net income, gross income, sales or gross
receipts, the Tax that would be due with respect to the
portion of the Straddle Period through and including the date
of the Effective Time, as if such portion of the Straddle
Period were a separate taxable Pre-Merger Period, except that
exemptions, allowances, deductions or credits that are
calculated on an annual basis (such as the deduction for
depreciation or capital allowances) shall be apportioned on a
per diem basis.
(c) At its own cost and expense, Alleghany shall
prepare, or cause to be prepared, and file or cause to be
filed, any Tax Return for any Straddle Period. Alleghany
shall provide the Shareholders with copies of such completed
Tax Return, together with related work papers and such other
documents as the Shareholders shall reasonably request, and a
statement certifying the amount of Taxes shown on such Tax
Return that are chargeable to the Shareholders pursuant to
Section 10.1(b) above (a "Tax Statement") no later than 30
days before the due date for the filing of such Tax Return.
The Shareholders and their authorized representatives shall
have the right to review the Tax Returns and Tax Statements
received from Alleghany pursuant to the terms of this Section
10.1(c). The Shareholders shall pay to Alleghany (or, at the
election of the Shareholder in the case of any income Tax,
directly to the applicable taxing authority) an amount equal
to the Taxes shown on the Tax Statement as being chargeable
to the Shareholders not later than 15 days following receipt
of any such Tax Return and Tax Statement, as the case may be.
The Shareholders and Alleghany agree to consult each other
and resolve in good faith any issues arising as a result of
the review of any such Tax Returns or Tax Statements received
from Alleghany.
<PAGE>
The Pre-Merger Tax Returns shall be prepared by
Newco in a manner consistent with the past practices of the
Company and, in any event, as to which there shall be
"substantial authority" (within the meaning of Section
6662(d)(2)(B)(i) of the Code) as to the treatment of any item
shown on such Pre-Merger Tax Returns. Newco shall furnish a
copy of each such Pre-Merger Tax Return to Alleghany and the
Shareholders at least thirty days prior to the due date
(determined without any extensions) for the filing thereof so
that Alleghany and the Shareholders may satisfy themselves
that such Pre-Merger Tax Return was prepared in compliance
with the foregoing sentence. Promptly following the filing
of the Pre-Merger Tax Returns, Newco shall furnish a copy of
each Pre-Merger Tax Return to each Shareholder, accompanied
by such Shareholder's copy of the relevant Forms K-1 in
respect thereof. In the event that Alleghany or the
Shareholders determine that there is not "substantial
authority" for the treatment of any item on any such Pre-
Merger Tax Return or that such Pre-Merger Tax Return has not
been prepared in a manner consistent with past practices of
the Company, such Pre-Merger Tax Return shall not be filed
until Alleghany and the Shareholders mutually agree as to the
treatment of any such item. The Shareholders and Alleghany
agree to consult each other and to resolve in good faith any
issues arising as a result of the review of such Pre-Merger
Tax Return.
(d) If a proposed adjustment is asserted in
writing with respect to a Straddle Period, Alleghany shall
notify the Shareholders of the proposed assessment within 20
days after receipt thereof. Within 20 days of receipt of
such notice from Alleghany, the Shareholders may elect to
contest any such proposed assessment jointly with Alleghany.
If such joint control is elected, neither party shall
compromise or settle such proposed adjustment without the
written consent of the other party, which consent shall not
be unreasonably withheld. If such joint control is elected,
each party shall bear its own costs and expenses of the
contest.
(e) All transfer, gains, stamp, recording or other
similar Taxes incurred in connection with the transactions
contemplated by this Agreement, including any interest,
penalties, fines, assessments or additions to tax, whether
disputed or not, imposed in respect of the foregoing, will be
borne by the Shareholders. The Shareholders will, at their
own expense, file all necessary Tax Returns and other
<PAGE>
documentation with respect to all such transfer Taxes as
required by applicable law, and assume all responsibility for
filing such Tax Returns and documentation on an accurate,
complete and timely basis. Alleghany, as appropriate, will
join in the execution of any such Tax Return or other
documentation.
(f) On or before the Effective Time, the Company
may declare and pay to the Shareholders an amount equal to
the Tax Distribution (as hereinafter defined). The Tax
Distribution shall be an amount equal to the lesser of (i)
the aggregate Federal and Massachusetts income Taxes
estimated to be imposed on each Shareholder computed using a
combined, aggregate tax rate of 45.55 percent, by reason of
the inclusion in each Shareholder's taxable income for 1996
of the Shareholder's pro rata share of the Company's
estimated items of income, loss, deduction or credit for its
taxable year ending on the Effective Time (the "Pre-Merger
Income") and (ii) $250,000. The Shareholders shall not be
relieved of their obligation to pay or cause to be paid, all
income Taxes imposed in respect of the income of the Company
for Pre-Merger Periods, regardless of whether the Tax
Distributions are adequate to pay the income Taxes imposed on
the Shareholders in respect of all Pre-Merger Periods.
Alleghany and the Shareholders shall mutually agree upon the
estimate of the Company's Pre-Merger Income.
(g) Within fourteen (14) days after the filing by
each Shareholder of his Federal income tax return, each
Shareholder shall pay to the Company the amount, if any, by
which (i) the Tax Distribution made to such Shareholder
exceeds (ii) the aggregate, net additional Federal and
Massachusetts income Taxes imposed upon such Shareholder by
reason of the inclusion in such Shareholder's taxable income
for 1996 of the Shareholder's pro rata share of the Company's
actual Pre-Merger Income (the "Net Additional Tax"). Each
Shareholder's Net Additional Tax shall be computed by
comparing the income Taxes imposed upon such Shareholder with
and without the inclusion of the Shareholder's pro rata share
of the Company's Pre-Merger Income. To verify that each
Shareholder has correctly determined his Net Additional Tax,
each Shareholder agrees to furnish to Alleghany within such
fourteen day period a copy of page 2 of IRS Form 1040 and the
equivalent portions of Massachusetts Form 1, and thereafter
to furnish to Alleghany such other information or support as
Alleghany shall reasonably request to verify such
<PAGE>
determination; provided, however, that no Shareholder shall
-------- -------
have any obligation to disclose or furnish to Alleghany page
1 of IRS Form 1040, any accompanying schedules, or any other
information which might constitute disclosure of the source
or composition (other than the aggregate amount) of any items
of the Shareholder's income, loss, deduction or credit.
10.2. Access to Information and Retention of
--------------------------------------
Records.
-------
(a) Each of the Shareholders and Alleghany will
provide the other, and Alleghany, after the Closing, shall
cause the Surviving Corporation to provide the Shareholders,
at reasonable times and upon reasonable notice, access to,
and a right to copy and use where appropriate, any records or
information and personnel which may be relevant for the
taxable period for which the requesting party is charged with
payment responsibility for Taxes under this Agreement in
connection with the preparation of any Tax Returns, any audit
or other examination, the filing of any claim for a refund of
Tax or for the allowance of any Tax credit, or any judicial
or administrative proceedings relating to liability for
Taxes. The party requesting assistance hereunder shall
reimburse the other party for reasonable out-of-pocket
expenses incurred in providing such assistance. Any
information obtained pursuant to this Section 10.2(a) shall
be held in strict confidence and shall be used solely in
connection with the reason for which it was requested.
(b) The Shareholders shall promptly forward to
Alleghany, and Alleghany shall promptly forward to the
Shareholders, all written notifications and other written
communications received by the Shareholders or Alleghany,
respectively, relating to any liability for Taxes for a
taxable period, including any Straddle Period, for which the
Shareholders or Alleghany, as the case may be, are or is
charged with payment responsibility under this Agreement.
10.3. Miscellaneous Tax Provisions.
----------------------------
(a) Notice of Disposed Consideration. If any
--------------------------------
Shareholder disposes of any Alleghany Shares within two years
after the Closing Date, such Shareholder shall promptly
<PAGE>
notify Alleghany of such disposition, which notice shall
include the number of Alleghany Shares disposed of.
(b) Alleghany Representations. Solely for
-------------------------
purposes of permitting each of the Shareholders to determine
the income tax consequences to them of the Merger, Alleghany
represents to the Shareholders that:
(i) Alleghany has no present plan or intention to
reacquire any of its stock issued in the Merger to the
Shareholders.
(ii) Following the Merger, the Surviving
Corporation will continue the historic business of the
Company or use a significant portion of the Company's
historic business assets in a business (as contemplated
by Treas. Reg. Section 1.368-1(d)).
(iii) Immediately prior to the Merger, Alleghany
will be in control of Newco (within the meaning of
Section 368(c) of the Code).
(iv) Immediately following the Merger, the
Surviving Corporation will not issue additional shares
of its stock that would result in Alleghany losing
control of the Surviving Corporation (within the meaning
of Section 368(c) of the Code).
(v) Alleghany has no present plan or intention to
liquidate the Surviving Corporation; to merge the
Surviving Corporation with and into another corporation;
to sell or otherwise dispose of the stock of the
Surviving Corporation; or to cause the Surviving
Corporation to sell or otherwise dispose of any assets
of the Company acquired in the Merger, except for
dispositions made in the ordinary course of business or
any transfer of the stock of the Surviving Corporation
to a corporation controlled (within the meaning of
Section 368(c) of the Code) directly or indirectly by
Alleghany.
(iv) Immediately prior to the Merger, Newco will
not constitute an investment company (as defined in
Section 368(a)(2)(F)(iii) and (iv) of the Code).
Other than the foregoing provisions of this Section
10.3(b), Alleghany makes no representations or warranties
<PAGE>
with respect to the income Tax consequences of the
transactions contemplated by this Agreement or the effect
thereon of, or any agreements as to any restrictions on, any
transactions involving the Company (or its assets) after the
Closing Date. Further, nothing contained herein shall be
construed or interpreted to impose any liability or
obligation upon Alleghany, Newco and/or any Transferee for
any Taxes imposed upon any Shareholder by reason of any of
the transactions contemplated by this Agreement.
(c) Code Sections 448 and 481. Notwithstanding
-------------------------
any other provision of this Agreement to the contrary,
Alleghany shall indemnify and hold harmless each Shareholder
from the net, additional income Tax imposed upon any
Shareholder solely by reason of any adjustment required
pursuant to Sections 448 and 481 of the Code for any Pre-
Merger Period by reason of the Merger. In computing the
Company's Pre-Merger Income for Section 10.1(f) hereof, the
amount of the adjustment, if any, described in the preceding
sentence shall be ignored.
ARTICLE XI
Indemnity
11.1. By the Shareholders and the Company. The
-----------------------------------
Shareholders and, prior to the Closing, the Company jointly
and severally agree to indemnify Alleghany, Newco and
Transferee and hold them harmless at all times after the date
of this Agreement from and against and in respect of any and
all Liabilities arising out of or due to the breach of any
representation, warranty, agreement or covenant of the
Company or the Shareholders set forth in this Agreement, in
any of the exhibits hereto or in any document executed and
delivered on the date hereof, on the Closing Date or
otherwise pursuant hereto, and any and all actions, suits,
proceedings, demands, assessments or judgments, and costs and
expenses, incident to any of the foregoing; provided,
--------
however, that the indemnification obligations of the
-------
Shareholders with regard to the matters addressed in Section
9.4(e)(ii) hereof shall be as set forth in Section 9.4(e)(ii)
hereof and shall be governed by such provisions and not by
this Section 11.1.
<PAGE>
11.2. By Alleghany and Newco. Alleghany and Newco
----------------------
jointly and severally agree to indemnify the Shareholders
and, prior to the Closing, the Company and hold them harmless
at all times after the date of this Agreement from and
against and in respect of any and all Liabilities arising out
of or due to the breach of any representation, warranty,
agreement or covenant of Alleghany or Newco set forth in this
Agreement, in any of the exhibits hereto or in any document
executed and delivered on the date hereof, on the Closing
Date or otherwise pursuant hereto, and any and all actions,
suits, proceedings, demands, assessments or judgments, and
costs and expenses, incident to any of the foregoing;
provided, however, that the indemnification obligations of
-------- -------
Alleghany with regard to the matters addressed in Section
9.4(e)(i) hereof shall be as set forth in Section 9.4(e)(i)
hereof and shall be governed by such provisions and not by
this Section 11.2.
11.3. Limits.
------
(a) The obligations of the Company and the
Shareholders to indemnify Alleghany, Newco and Transferee
under this Agreement shall be limited to aggregate payments
of Alleghany Shares having an aggregate value (based upon the
Average Market Price determined in accordance with Section
3.1(a) hereof) of $4,000,000 (unless, in the case of payments
by a Shareholder, such Shareholder no longer holds a
sufficient number of Alleghany Shares issued as Merger
Consideration to make such payment entirely in Alleghany
Shares, in which case the amount payable by such Shareholder
may be paid in cash to the extent not paid in Alleghany
Shares; any amounts payable by the Company shall be paid in
cash), except for (i) any breach of Sections 4.2, 4.3(b) or
4.10 hereof, with respect to which the obligation to
indemnify shall not be so limited, and (ii) any breach of
Sections 4.5, 4.6, 4.9 or 4.22 hereof or the last sentence of
Section 8.4 hereof, with respect to which the obligation to
indemnify shall be limited to aggregate payments of Alleghany
Shares having an aggregate value (based upon the Average
Market Price determined in accordance with Section 3.1(a)
hereof) of $7,500,000 (unless, in the case of payments by a
Shareholder, such Shareholder no longer holds a sufficient
number of Alleghany Shares issued as Merger Consideration to
make such payment entirely in Alleghany Shares, in which case
<PAGE>
the amount payable by such Shareholder may be paid in cash to
the extent not paid in Alleghany Shares; any amounts payable
by the Company shall be paid in cash); provided that the
Company and the Shareholders shall have no obligation to
indemnify Alleghany, Newco and Transferee under this
Agreement until such time as the aggregate amount of the
Liabilities claimed by Alleghany, Newco and Transferee
exceeds Seventy-Five Thousand Dollars ($75,000), but then in
an amount including such Seventy-Five Thousand Dollars
($75,000), except that Alleghany, Newco and Transferee shall
be indemnified for any and all Liabilities resulting from any
breach of Section 4.2 hereof, whether or not such Liabilities
exceed $75,000.
(b) The obligations of Alleghany and Newco to
indemnify the Company and the Shareholders under this
Agreement shall be limited to aggregate payments of Alleghany
Shares having an aggregate value (based upon the Average
Market Price designated in Section 3.1(a) hereof) of
$4,000,000; provided that Alleghany and Newco shall have no
obligation to indemnify the Company and the Shareholders
under this Agreement until such time as the aggregate amount
of Liabilities claimed by the Company and the Shareholders
exceeds Seventy-Five Thousand Dollars ($75,000), but then in
an amount including such Seventy-Five Thousand Dollars
($75,000). Any Alleghany Shares paid to the Company and the
Shareholders in satisfaction of indemnity obligations to the
Shareholders pursuant to this Agreement ("Alleghany Indemnity
Shares") shall bear the legend set forth in Section 4.21(b)
hereof and, in the case of any Alleghany Indemnity Shares
issued prior to the date of publication of Alleghany's
consolidated financial statements which include at least
thirty days of post-Merger operations, shall also bear the
legend set forth in Section 4.21(c) hereof.
11.4. Procedure.
---------
(a) Alleghany, Newco and/or Transferee, on the one
hand, and the Company and/or the Shareholders, on the other
hand, each agree to promptly notify each other if any of them
becomes aware of any Liabilities with respect to which
indemnity may be asserted under Section 9.4 hereof or this
Article XI (hereinafter referred to as a "claim"), which
notice shall set forth to the extent known at such time the
nature of the claim and the amount of the claim, provided
that failure to notify the indemnifying party shall not
relieve such party from liability except to the extent such
<PAGE>
party is prejudiced thereby. The party entitled to indemnity
(the "Indemnitee") shall permit the party responsible for
such indemnity (the "Indemnitor") to assume the defense of
any such claim or any litigation resulting from such claim.
(b) If the Indemnitor assumes the defense of any
such claim or litigation resulting therefrom, the Indemnitee
may participate, at its expense, in the defense of such claim
or litigation provided that the Indemnitor shall direct and
control the defense of such claim or litigation. Except with
the written consent of Indemnitee, which consent shall not be
unreasonably withheld, the Indemnitor shall not, in the
defense of such claim or any litigation resulting therefrom,
consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the
giving by the claimant or the plaintiff to the Indemnitee of
a release from all liability in respect of such claim or
litigation.
(c) If the Indemnitor shall not assume the defense
of any such claim or litigation resulting therefrom, the
Indemnitee may defend against such claim or litigation in
such manner as it may deem appropriate. The Indemnitee shall
not enter into any settlement of such claim or litigation
without the written consent of the Indemnitor, which consent
shall not be unreasonably withheld. The Indemnitor shall
promptly reimburse the Indemnitee from time to time for any
and all amounts paid for or incurred by the Indemnitee and
for which the Indemnitor is obligated pursuant to Section 9.4
hereof or this Article XI, upon submission by the Indemnitee
of a statement reflecting the basis upon which such
indemnification is sought and the computation of such
amounts.
11.5. Adjustment for Insurance. The amount which
------------------------
an indemnifying party is required to pay to, for or on behalf
of any other party pursuant to this Article XI shall be
adjusted by any insurance proceeds actually recovered by or
on behalf of such indemnified party in reduction of the
related indemnifiable loss.
<PAGE>
ARTICLE XII
Miscellaneous Provisions
12.1. Termination. At any time prior to the
-----------
Closing Date, this Agreement may be terminated:
(a) by mutual written consent of the Boards of
Directors of Alleghany and the Company;
(b) by Alleghany and Newco at any time after
August 15, 1996 (or such later date as shall have been agreed
to in writing by Alleghany and the Company) if any of the
conditions set forth in Article VI hereof have not been met
or waived in writing by Alleghany and Newco; or
(c) by the Company at any time after August 15,
1996 (or such later date as shall have been agreed to in
writing by Alleghany and the Company) if any of the
conditions set forth in Article VII hereof have not been met
or waived in writing by the Company and the Shareholders.
In the event of any termination pursuant to this Section
12.1, the parties hereto shall be released from all
liabilities and obligations arising under this Agreement with
respect to matters contemplated by this Agreement other than
for damages to the extent arising from a prior breach of this
Agreement.
12.2. Expenses. Whether or not the Closing takes
--------
place and regardless of whether this Agreement is terminated,
each party hereto shall pay all of the costs and expenses
incurred by it or him in connection with this Agreement or in
consummating the transactions contemplated hereby (including,
without limitation, disbursements and expenses of its or his
attorneys, accountants and advisers); provided, however, that
-------- -------
prior to the Closing the Company shall have paid, in the
aggregate, the following costs and expenses incurred or
expected to be incurred by the Company and the Shareholders
in connection with this Agreement and the transactions
contemplated hereby: (a) $261,244 to Tucker Anthony
Incorporated, (b) $2,460 to Wallace Niedzwiecki, (c) $27,252
to Parent, McLaughlin & Nangle and (d) $130,000 to Peabody &
Brown, provided that if the aggregate fees paid or due to
Tucker Anthony Incorporated, Wallace Niedzwiecki, Parent,
<PAGE>
McLaughlin & Nangle or Peabody & Brown, respectively, exceed
the amount specified above with respect to such person or
entity, the excess shall be paid solely by the Shareholders.
12.3. Notices. All notices or other
-------
communications required or permitted under this Agreement
shall be in writing and sufficient if delivered personally,
by private courier or fax, or sent by registered or certified
mail, postage prepaid, addressed as follows:
If to Alleghany or Newco, to
Alleghany Corporation
375 Park Avenue
New York, New York 10152
Telecopy: (212) 759-8149
Attention: Robert M. Hart, Esq.
with a copy to
Donovan Leisure Newton & Irvine
30 Rockefeller Plaza
New York, New York 10112
Telecopy: (212) 632-3315
Attention: Linda E. Ransom, Esq.
If to the Company, to
Market Intelligence, Inc.
87 Elm Street
Hopkinton, Massachusetts 01748
Telecopy: (508) 431-3991
Attention: Mark P. Sennott
with a copy to
Peabody & Brown
101 Federal Street
Boston, Massachusetts 02110-1832
Telecopy: (617) 345-1300
Attention: Charles F. Claeys, Esq.
<PAGE>
If to any of the Shareholders, to
Robert F. Sennott, Jr.
Market Intelligence, Inc.
78 Elm Street
Hopkinton, Massachusetts 01748
Mark P. Sennott
Market Intelligence, Inc.
78 Elm Street
Hopkinton, Massachusetts 01748
Bryant R. Linares
Market Intelligence, Inc.
78 Elm Street
Hopkinton, Massachusetts 01748
with a copy to
Peabody & Brown
101 Federal Street
Boston, Massachusetts 02110-1832
Telecopy: (617) 345-1300
Attention: Charles F. Claeys, Esq.
Any party may change the person and address to
which notices or other communications are to be sent to it by
giving written notice of any such change in the manner
provided herein.
12.4. Exhibits. Any information set forth in any
--------
Exhibit hereto shall be considered as set forth in each other
Exhibit hereto in which a cross-reference to such Exhibit is
set forth.
12.5. Entire Agreement; Amendment. This
---------------------------
Agreement, together with the exhibits hereto and each of the
documents executed and delivered on the date hereof, on the
Closing Date or otherwise pursuant hereto, sets forth the
entire agreement and understanding of the parties hereto in
<PAGE>
respect of the transactions contemplated hereby, and
supersedes all prior agreements, arrangements and
understandings relating to the subject matter hereof. No
party hereto has relied upon any oral or written statement,
representation, warranty, covenant, condition, understanding
or agreement made by any other party or any representative,
agent or employee thereof, except for those expressly set
forth in this Agreement, in the exhibits hereto and in each
of the documents executed and delivered on the date hereof,
on the Closing Date or otherwise pursuant hereto. This
Agreement may be amended, modified, superseded or
supplemented only by an instrument in writing executed and
delivered by Alleghany, Newco, the Shareholders and the
Company.
12.6. Assignment. This Agreement shall inure to
----------
the benefit of, and be binding upon, the respective
successors, heirs, executors, administrators, legal
representatives and permitted assigns of the parties hereto;
provided, however, that no assignment of any rights or
-------- -------
delegation of any obligations provided for herein shall be
made by any party hereto without the express prior written
consent of each other party, which consent shall not be
unreasonably withheld.
12.7. Survival of Representations, Warranties and
-------------------------------------------
Covenants. All representations, warranties and covenants of
---------
the parties hereto which are contained in this Agreement,
together with the exhibits hereto and each of the documents
executed and delivered on the date hereof, on the Closing
Date or otherwise pursuant hereto, shall survive the Closing
and remain operative and in full force and effect, regardless
of any investigation heretofore or hereafter made by or on
behalf of any of the parties hereto; provided, however, that
-------- -------
the obligations of the parties for any breach of any
representation, warranty, indemnity obligation or covenant
made by them herein or therein shall survive the Closing Date
only until March 31, 1998, and no claim thereon may first be
asserted after that time, except that the representations,
warranties and covenants set forth in (a) Sections 4.2,
4.3(b) and 4.10 hereof and the indemnification obligations of
the Shareholders with respect to any breach thereof shall
survive the Closing forever and (b) Sections 4.5, 4.6, 4.9
<PAGE>
and 4.22 hereof and the last sentence of Section 8.4 hereof
and the indemnification obligations of the Shareholders with
respect to any breach thereof shall survive the Closing until
the third anniversary of the Closing Date.
12.8. Governing Law. This Agreement shall be
-------------
governed by, and construed in accordance with, the laws of
the Commonwealth of Massachusetts applicable to agreements
made and to be performed entirely within such Commonwealth,
except for matters relating to the validity of corporate
action, which shall be governed by the laws of the
jurisdiction of incorporation or organization of the relevant
corporation.
12.9. Counterparts. This Agreement may be
------------
executed in any number of separate counterparts, each of
which shall be deemed to be an original, but which together
shall constitute one and the same instrument.
12.10. Headings. The section headings contained
--------
in this Agreement are inserted for convenience of reference
only and shall not affect the meaning or interpretation of
this Agreement.
12.11. Severability. In the event that any
------------
provision hereof is prohibited or unenforceable in any
jurisdiction, such provision shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining
provisions hereof or affecting the validity or enforceability
of such provision in any other jurisdiction.
12.12. Public Announcement. As soon as
-------------------
practicable after the Closing, a joint press release
substantially in the form of Exhibit 12.12 hereto shall be
issued by Alleghany and the Company. No other publicity
regarding the transactions contemplated by this Agreement
shall be made without the prior written approval of each of
the Company and Alleghany, except as may be required by
applicable law upon the advice of counsel.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, each party hereto has duly
executed this Agreement, or has caused this Agreement to be
duly executed, as of the date first above written.
MARKET INTELLIGENCE, INC.
Attest:
/s/ Bryant R. Linares By /s/ Mark P. Sennott
-------------------------- -------------------------------
Name: Mark P. Sennott
Title: President
Attest:
/s/ Mark P. Sennott By /s/ Bryant R. Linares
-------------------------- -------------------------------
Name: Bryant R. Linares
Title: Treasurer
[Seal]
ALLEGHANY ACQUISITION CORPORATION
Attest:
/s/ Frank R. Adams By /s/ David B. Cuming
-------------------------- -------------------------------
Name: David B. Cuming
Title: President
Attest:
/s/ Frank R. Adams By /s/ Peter R. Sismondo
-------------------------- -------------------------------
Name: Peter R. Sismondo
Title: Treasurer
[Seal]
<PAGE>
Witnesses: SHAREHOLDERS
/s/ Bryant R. Linares /s/ Robert F. Sennott, Jr.
-------------------------- ---------------------------------
Robert F. Sennott, Jr.
/s/ Bryant R. Linares /s/ Mark P. Sennott
-------------------------- ---------------------------------
Mark P. Sennott
/s/ Robert F. Sennott, Jr. /s/ Bryant R. Linares
-------------------------- ---------------------------------
Bryant R. Linares
ALLEGHANY CORPORATION
Attest:
/s/ Frank R. Adams By /s/ David B. Cuming
-------------------------- -------------------------------
Name: David B. Cuming
Title: Senior Vice President
<PAGE>
<PAGE>
List of Exhibits
----------------
Exhibit Number Description
-------------- -----------
1.1 Purposes of the Surviving
Corporation
1.3 Form of Massachusetts Articles of
Merger
1.4 Form of Employment Agreements
4.1 Corporate Organization and
Qualification
4.2 Share Ownership
4.3 Company Approvals
4.4 Licenses
4.7 Material Adverse Changes
4.8 Dividends
4.11(a) Clients and Real Estate Property
Evaluation Services Agreements
4.11(b) Other Agreements
4.11(c) Lease
4.11(d) Intangible Property
4.11(e) Intellectual Property
4.11(f) Investment Securities
4.11(g) Other Assets
4.11(h) Title
4.12(a) Benefit Plans
4.12(f) Discretionary Employee Bonuses
4.13 Interests of Officers, Directors
and Shareholders
4.14 Employees
4.15 Banks
4.16 Insurance
4.22 Pooling Conditions
5.3 Alleghany and Newco Approvals
6.3 Form of Opinion of Counsel for the
Company and the Shareholders
7.3 Form of Opinion of Counsel for
Alleghany and Newco
8.4 Pooling Covenants
12.12 Form of Joint Press Release after
Closing
<PAGE>
Exhibit 2.2
-----------
List of Exhibits
----------------
Exhibit Number Description
-------------- -----------
1.1 Purposes of the Surviving
Corporation
1.3 Form of Massachusetts Articles
of Merger
1.4 Form of Employment Agreements
4.1 Corporate Organization and
Qualification
4.2 Share Ownership
4.3 Company Approvals
4.4 Licenses
4.7 Material Adverse Changes
4.8 Dividends
4.11(a) Clients and Real Estate
Property Evaluation Services
Agreements
4.11(b) Other Agreements
4.11(c) Lease
4.11(d) Intangible Property
4.11(e) Intellectual Property
4.11(f) Investment Securities
4.11(g) Other Assets
4.11(h) Title
4.12(a) Benefit Plans
4.12(f) Discretionary Employee Bonuses
4.13 Interests of Officers,
Directors and Shareholders
4.14 Employees
4.15 Banks
4.16 Insurance
4.22 Pooling Conditions
5.3 Alleghany and Newco Approvals
6.3 Form of Opinion of Counsel for
the Company and the
Shareholders
7.3 Form of Opinion of Counsel for
Alleghany and Newco
8.4 Pooling Covenants
12.12 Form of Joint Press Release
after Closing
<PAGE>
Exhibit 23.2
------------
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Board of Directors
Alleghany Corporation:
We consent to incorporation by reference in the Registration
Statement on Form S-3 of our reports dated February 22, 1996
relating to the financial statements and related schedules of
Alleghany Corporation and subsidiaries, which appear in or
are incorporated by reference in the Annual Report on
Form 10-K of Alleghany Corporation for the year ended
December 31, 1995. Our reports refer to the adoption by
Alleghany of the provisions of the Financial Accounting
Standards Board's Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and
Equity Securities" at December 31, 1993.
We also consent to the reference to our Firm under the
heading "Experts" in such Registration Statement.
/s/ KPMG Peat Marwick LLP
New York, New York
August 9, 1996
