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EXHIBIT 2(c)
GUARANTY
DATED AS OF MAY 30, 1995
BY
THE THOMSON CORPORATION
IN FAVOR OF
MARKEL CORPORATION
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TABLE OF CONTENTS*
Page
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ARTICLE I
DEFINITIONS
Section 1.1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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ARTICLE II
GUARANTY
Section 2.1. The Guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
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Section 2.2. Guaranty Unconditional and Irrevocable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
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Section 2.3. Reinstatement in Certain Circumstances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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Section 2.4. Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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Section 2.5. Subrogation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
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Section 2.6. No Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1. Corporate Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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Section 3.2. Annual Shareholders Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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Section 3.3. Non-Contravention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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Section 3.4. Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
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ARTICLE IV
MISCELLANEOUS
Section 4.1. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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Section 4.2. Enforcement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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Section 4.3. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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Section 4.4. Action by Beneficiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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Section 4.5. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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Section 4.6. Incorporation by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
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*The Table of Contents is not a part of the Guaranty.
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GUARANTY
This GUARANTY (this "Guaranty") is dated as of May 30, 1995
and is made by The Thomson Corporation, an Ontario corporation (the
"Guarantor") for the benefit of Markel Corporation, a Virginia corporation
("Markel"), Lincoln Insurance Company, a Delaware domestic insurance
corporation ("LIC"), and their permitted successors, transferees and assigns
(Markel, LIC and such successors, transferees and assigns, individually and
collectively, the "Beneficiary")
Lincoln Insurance Group, Inc., a Delaware corporation
("LIGI"), is the Seller pursuant to a Stock Purchase Agreement dated as of
April 5, 1995, as amended by the Amendment thereto dated the date hereof (the
"Purchase Agreement") between LIGI and Markel, pursuant to which LIGI is
selling to Markel all of the outstanding shares of Common Stock (the "Shares")
of LIC. LIGI is the indirect, wholly-owned subsidiary of the Guarantor. Under
the Purchase Agreement, LIGI has agreed, subject to certain limitations, to
indemnify and hold harmless Markel with respect to certain representations,
warranties, covenants and agreements of LIGI set forth therein. In connection
with the closing of the purchase of the Shares, LIGI is entering into an
Indemnification Agreement dated the date hereof pursuant to which it has
agreed, subject to certain limitations, to indemnify and hold harmless Markel
with respect to the adequacy of certain of the loss reserves and reserves for
uncollectible reinsurance maintained by LIC. The execution and delivery of
this Guaranty is a condition for the closing under the Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and
the mutual covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1. DEFINITIONS. Terms used herein and not
otherwise defined herein which are defined in the Purchase Agreement shall have
for the purposes hereof the meanings provided therein.
ARTICLE II
GUARANTY
SECTION 2.1. THE GUARANTY. The Guarantor hereby
unconditionally guarantees to the Beneficiary the full and punctual payment and
performance of all amounts, liabilities or other obligations now or hereafter
payable by LIGI to Markel under the Purchase Agreement and any other agreements
executed pursuant or incidental to the Purchase Agreement, including, without
limitation, the Indemnification Agreement and any other agreements executed
pursuant or incidental to the Indemnification Agreement (all such amounts,
liabilities and obligations being herein called the "Obligations"). If LIGI
shall fail to pay any Obligation when due in accordance with its terms, the
Guarantor shall forthwith on written demand of the Beneficiary pay the
Beneficiary the amount of such Obligation at the address specified in this
Guaranty in immediately available funds.
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SECTION 2.2. GUARANTY UNCONDITIONAL AND IRREVOCABLE. This
is an irrevocable, continuing and unconditional guaranty of payment and not of
collection, and the obligations of the Guarantor hereunder are unconditional
and absolute and independent and separate from any obligation of LIGI. Without
limiting the generality of the foregoing, the obligations of the Guarantor
hereunder shall not be released, discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise,
waiver or release in respect of any obligation of LIGI under the
Purchase Agreement or the Indemnification Agreement or other document
evidencing such Obligation, by operation of law or otherwise;
(ii) any modification or amendment or supplement to
the Purchase Agreement or the Indemnification Agreement or other
document evidencing such Obligation;
(iii) any furnishing or acceptance of additional
security or any release, substitution, non-perfection or invalidity
of any direct or indirect security for any Obligation or any release
of any other guarantor or guarantors of the Obligations;
(iv) any change in the existence, structure or
ownership of LIGI, or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting LIGI or its assets or any resulting
disallowance, release or discharge of all or any portion of any
Obligation;
(v) the existence of any claim, set-off or other
right which the Guarantor may have at any time against LIGI, the
Beneficiary or any other corporation or person, whether in connection
herewith or any unrelated transaction; provided that nothing herein
shall prevent the assertion of any such claim by separate suit or
compulsory counterclaim;
(vi) any failure by the Beneficiary (a) to file or
enforce a claim against LIGI or its estate (in a bankruptcy or other
proceeding), (b) to give notice to the Guarantor of a breach or
default by LIGI under the Purchase Agreement or the Indemnification
Agreement, (c) to commence any action against LIGI, (d) to disclose to
the Guarantor any facts which Markel may now or hereafter know with
regard to LIGI or (e) to proceed with due diligence in the collection,
protection or realization upon any collateral securing the
Obligations; or
(vii) any other act or omission to act or delay of
any kind by LIGI or the Beneficiary or any other corporation or person
or any other circumstance whatsoever which might, but for the
provisions of this clause, constitute a legal or equitable discharge
of the Guarantor's obligations hereunder.
This Guaranty is and shall remain fully enforceable
irrespective of any defenses that LIGI may have or assert in respect of the
Obligations, including but not limited to failure of
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consideration, breach of warranty, payment, statute of frauds, statute of
limitations and accord and satisfaction; provided that the Guarantor does not
waive its right to assert any such defenses it may have in respect of the
Obligations.
SECTION 2.3. REINSTATEMENT IN CERTAIN CIRCUMSTANCES. If
at any time any payment by LIGI of any Obligation is rescinded or must
otherwise be restored or returned upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of LIGI or upon or as a result of the appointment
of a receiver, intervener or conservator of, or trustee or similar officer for,
LIGI or any substantial part of its property or otherwise, the Guarantor's
obligations hereunder with respect to such payment shall be reinstated as
though such payment had been due but not made at such time. The Guarantor
agrees that payment or performance of any of the Obligations or other acts
which toll any statute of limitations applicable to the Obligations shall also
toll the statute of limitations applicable to the Guarantor's liability
hereunder.
SECTION 2.4. WAIVERS. The Guarantor waives any and all
notice of the creation, renewal, extension or accrual of any of the Obligations
and notice of or proof of reliance by the Beneficiary upon this Guaranty or
acceptance of this Guaranty, and the Obligations shall conclusively be deemed
to have been created, contracted or incurred in reliance upon this Guaranty,
and all dealings between LIGI or the Guarantor and the Beneficiary shall
likewise be conclusively presumed to have taken place or been consummated in
reliance upon this Guaranty. The Guarantor unconditionally waives (i)
acceptance hereof, diligence, presentment, demand, protest and any notice not
provided for herein, including, without limitation, any notice when the
Beneficiary exercises rights against LIGI to hold, sell, lease or otherwise
dispose of security for any of the Obligations, (ii) any requirement that at
any time any action be taken by any corporation or person against LIGI or any
other corporation or person or that resort be had to any security for, or other
guaranty of, any Obligation, (iii) any defense that may arise by reason of lack
of authority of the Guarantor or the lack of authority, death or disability of
any other person or entity, (iv) any right that the Guarantor may now or
hereafter have under Section 3-606 of the Uniform Commercial Code or otherwise
to unimpaired collateral, (v) the defense of commercial unreasonableness with
respect to the Beneficiary's exercise of any rights or remedies against any
direct or indirect security for the Obligations or (vi) any defense based upon
any fact or condition set forth in clauses (i) through (vii) of Section 2.2.
Without limiting the generality of the foregoing, the
Guarantor acknowledges and agrees that the Beneficiary is not required to
enforce any remedies against LIGI or any other party now or hereafter liable or
contingently liable to the Beneficiary on account of the Obligations as a
condition to payment or performance by the Guarantor hereunder. Nor is the
Beneficiary required to seek to enforce, or resort to any remedies with respect
to, any security interest, lien or encumbrance now or hereafter granted to the
Beneficiary by LIGI or any other Person.
SECTION 2.5. SUBROGATION. Upon making any payment
hereunder, the Guarantor shall be subrogated to the rights of the payee against
LIGI with respect to such payment; provided that the Guarantor shall not
enforce any payment by way of subrogation until all amounts payable with
respect to the Obligations have been paid in full.
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SECTION 2.6. NO SET-OFF. No act or omission of any kind
or at any time on the part of the Beneficiary in respect of any matter
whatsoever shall in any way affect or impair the rights of the Beneficiary to
enforce any right, power or benefit under this Guaranty, and no set-off, claim,
reduction or diminution of any obligation or any defense of any kind or nature
which the Guarantor has or may have against the Beneficiary shall be available
against the Beneficiary in any suit or action brought by the Beneficiary to
enforce any right, power or benefit provided for by this Guaranty; provided
that nothing herein shall prevent the assertion by the Guarantor of any such
claim by separate suit or compulsory counterclaim. Nothing in this Guaranty
shall be construed as a waiver by the Guarantor of any rights or claims which
it may have against the Beneficiary hereunder or otherwise, but any recovery
upon such rights and claims shall be had from the Beneficiary separately, it
being the intent of this Guaranty that the Guarantor shall be unconditionally
and absolutely obligated to perform fully all its obligations, covenants and
agreements hereunder for the benefit of the Beneficiary.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Guarantor represents and warrants that:
SECTION 3.1. CORPORATE STATUS. The Guarantor is a
corporation duly organized, validly existing and in good standing under the
laws of the Province of Ontario, and has the corporate power and authority to
execute and deliver this Guaranty. The Guarantor is the ultimate parent
corporation of LIGI.
SECTION 3.2. ANNUAL SHAREHOLDERS REPORT. The Guarantor
has delivered to the Beneficiary a true and complete copy of its annual report
to shareholders for the year ended December 31, 1994, which contains a true and
complete copy of the audited consolidated financial statements for the
Guarantor and its subsidiaries for the year ended December 31, 1994.
SECTION 3.3. NON-CONTRAVENTION. The execution, delivery
and performance by the Guarantor of this Guaranty require no action by or in
respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute (with or without the giving of notice or lapse of
time or both) a default under, any provision of applicable law or of any
agreement, judgment, injunction, order, decree or other instrument binding upon
or affecting the Guarantor.
SECTION 3.4. BINDING EFFECT. This Guaranty constitutes a
legal, valid and binding agreement of the Guarantor, enforceable against it in
accordance with its terms, except as enforcement may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting the rights and remedies of creditors and (ii) general
principles of equity.
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ARTICLE IV
MISCELLANEOUS
SECTION 4.1. GOVERNING LAW. This Guaranty shall be
governed and construed in accordance with the laws of the State of Delaware
applicable to agreements to be performed entirely within such State.
SECTION 4.2. ENFORCEMENT. The Beneficiary may enforce this
Guaranty either by action at law, suit in equity or other proceeding, and it
shall not be necessary to make LIGI a party to any such action, suit or
proceeding. The Guarantor will pay all reasonable fees (including, without
limitation, reasonable attorney's fees), costs and expenses incurred by the
Beneficiary in connection with enforcing this Guaranty or in collecting any or
all of the Obligations.
SECTION 4.3. ASSIGNMENT. In the event that Markel sells
LIC to, or merges LIC with, any subsidiary of Markel, an insurance company
rated "A-" or better by A. M. Best Company or to such other entity as shall be
approved by LIGI, which approval shall not be unreasonably withheld or delayed,
such entity to whom Markel sells LIC, or with which LIC merges, shall have all
of the rights of Markel under this Agreement; provided, that any such
assignment shall not increase the Guarantor's liability hereunder. Except as
provided in the immediately preceding sentence, neither party may assign its
rights or obligations under this Guaranty without the prior written consent of
the other party.
SECTION 4.4. ACTION BY BENEFICIARY. Any action pursuant to
this Guaranty may be taken by any Beneficiary acting alone; provided, that any
action taken by any Beneficiary shall be binding upon all of the other Persons
included in the Beneficiary.
SECTION 4.5. ENTIRE AGREEMENT. This Agreement contains
the entire agreement among the parties with respect to the subject matter
hereof and supersedes all prior agreements, written or oral, with respect
thereto.
SECTION 4.6. INCORPORATION BY REFERENCE. The provisions
of Sections 11.2, 11.3, 11.6, 11.9, 11.12, 11.13 and 11.14 of the Purchase
Agreement are hereby incorporated by reference herein and shall be fully
applicable hereto, with the term "Agreement" as used therein being deemed
references to this Guaranty, the term "Buyer" as used therein to be deemed
references to the Beneficiary and the term "Seller" as used therein to be
deemed references to the Guarantor.
IN WITNESS WHEREOF, the Guarantor has executed this
Guaranty as of the day and year first above written.
THE THOMSON CORPORATION
By (SEAL)
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Title:
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