EXHIBIT 10.3
ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT (this "Agreement"), dated as of
October 2, 2000, is entered into by and between RELIANCE INSURANCE COMPANY, a
Pennsylvania corporation ("Seller") and RELIANCE REINSURANCE COMPANY, a Delaware
stock insurance company (the "Company").
W I T N E S S E T H
WHEREAS, Seller and Overseas Partners Ltd. ("Buyer") have
entered into a Stock Purchase Agreement, dated as of June 30, 2000, (the "Stock
Purchase Agreement"), pursuant to which Seller has agreed to sell, and Buyer has
agreed to purchase, all of the issued and outstanding shares of the capital
stock of the Company, upon the terms and subject to the conditions set forth
therein; and
WHEREAS, the execution and delivery of this Agreement by the
parties hereto is a condition to the Closing of the transactions contemplated by
the Stock Purchase Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
Section 1. Definitions. Capitalized terms used herein and not
defined herein, unless otherwise indicated, have the respective meanings
assigned to them in the Stock Purchase Agreement.
Section 2. Administrative Services. Seller shall assume
responsibility for the administrative services, including claims services
required of the Company, with respect to the policies reinsured under the
RelianceDirect Quota Share Agreement.
Section 3. Assumption of Liabilities. Seller hereby assumes
and agrees to pay, perform and discharge in full, and releases and discharges
the Company, and its successors and assigns, completely, unconditionally and
forever from all Liabilities (as defined below) of the Company, other than any
Policy Liabilities (as such term is defined in the Stock Purchase Agreement),
(i) outstanding on the Closing Date, (ii) relating to events occurring on or
prior to the Closing Date or (iii) relating to the provision of administrative
services pursuant to Section 2 herein. The Company shall notify Seller of any
such Liabilities within 30 days after the Company is advised of any such
Liability; provided, however, that the failure by the Company to give such
notice to Seller will not prejudice any of the Company's rights under this
Agreement. For purposes of this Agreement, "Liabilities" shall mean any direct
or indirect indebtedness, liability, claim, loss, damage, deficiency, obligation
or responsibility whether now known or unknown, fixed or unfixed, xxxxxx or
inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute,
contingent or otherwise.
Section 4. Indemnification of Seller. The Company hereby
agrees to defend and indemnify Seller, and its successors and assigns,
completely, unconditionally and forever, from all Liabilities of the Company
relating to events occurring solely after the Closing Date, except to the extent
that such events which give rise to such Liabilities are caused by any action
taken by Seller or any failure on the part of Seller to take any action required
to be taken by it.
Section 5. Miscellaneous.
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Section 5.1. Waivers and Amendments; Non-Contractual Remedies;
Preservation of Remedies. This Agreement may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written
instrument signed by each of the Parties or, in the case of a waiver, by the
Party waiving compliance. No delay on the part of any Party on exercising any
right, power or privilege hereunder shall operate as a waiver thereof. Nor shall
any waiver on the part of any Party of any right, power or privilege, nor any
single or partial exercise of any such right, power or privilege, preclude any
further exercise thereof or the exercise of any other such right, power or
privilege. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies that any Party may otherwise have at law or
in equity.
Section 5.2. Governing Law. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK (REGARDLESS OF THE LAWS THAT MIGHT OTHERWISE GOVERN UNDER APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW.)
Section 5.3. Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which shall be deemed to be
an original, but all such counterparts shall together constitute one and the
same instrument.
Section 5.4. Assignment; Binding Effect; No Third-Party
Beneficiaries. Neither this Agreement, nor any of the rights, interests and
obligations hereunder, shall be assigned by either party hereto without the
prior written consent of the other party. This Agreement and all of the
provisions hereof shall be binding upon and inure to the benefit of the parties
and their respective successors and permitted assigns. Nothing contained in this
Agreement is intended or shall be construed to give any Person other than the
parties hereto any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein.
Section 5.5. Interpretation. The Section headings contained
in this Agreement are solely for the purpose of reference and do not constitute
a part of this Agreement.
Section 5.6. Severability. If any provisions hereof shall be
held invalid or unenforceable by any court of competent jurisdiction or as a
result of future legislative action, such holding or action shall be strictly
construed and shall not affect the validity or effect of any other provision
hereof; provided, however, that the Parties shall use reasonable efforts,
including, but not limited to, the amendment of this Commutation Agreement, to
ensure that this Commutation Agreement shall reflect as closely as practicable
the intent of the Parties.
Section 5.7. Entire Agreement. This Agreement and the
agreements and other documents referred to herein and therein shall constitute
the entire agreement between the parties hereto with respect to the subject
matter hereof and shall supersede all previous negotiations, commitments and
writings with respect to such subject matter.
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Section 5.8. Notices. All notices, requests, claims, demands
and other communications required to be in writing must be delivered by hand or
mailed by registered or certified mail (return receipt requested) or sent by any
means of electronic message transmission with delivery confirmed (by voice or
otherwise) to the parties at the following addresses (or at such other address
specified by like nature) and will be deemed given on the date such
communication is received:
If to Seller:
Reliance Insurance Company
0 Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
If to Company:
Reliance Reinsurance Company
0 Xxxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: General Counsel
Facsimile: (000) 000-0000
or to such other address as either party hereto may have furnished to the other
party by a notice in writing in accordance with this Section 5.8.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
RELIANCE INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
RELIANCE REINSURANCE COMPANY
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
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