Exhibit 2
FORMATION AND SEPARATION AGREEMENT
between
THE ST. XXXX COMPANIES, INC.
and
PLATINUM UNDERWRITERS HOLDINGS, LTD.
dated as of ____________, 2002
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions...................................................................................2
SECTION 1.02 Other Definitional Provisions................................................................11
ARTICLE II
CONTRIBUTION OF ASSETS; ST. XXXX INVESTMENT
SECTION 2.01 Transfer of Assets...........................................................................11
SECTION 2.02 Renewal Rights Information...................................................................13
SECTION 2.03 Joint Ownership..............................................................................13
SECTION 2.04 Assumption and Retention of Liabilities......................................................13
SECTION 2.05 St. Xxxx Investment..........................................................................13
SECTION 2.06 Third Party Consents.........................................................................14
SECTION 2.07 Cash Contribution............................................................................14
ARTICLE III
INTERCOMPANY TRANSACTIONS AS OF THE CLOSING DATE; CLOSING
SECTION 3.01 Ancillary Agreements.........................................................................15
SECTION 3.02 Payment of Expenses..........................................................................19
SECTION 3.03 Closing......................................................................................19
SECTION 3.04 Closing Deliveries by St. Xxxx...............................................................20
SECTION 3.05 Closing Deliveries by the Company............................................................20
SECTION 3.06 Subsequent Exercise of Over-Allotment Option.................................................21
ARTICLE IV
SEPARATION
SECTION 4.01 Settlement of Intercompany Accounts..........................................................21
SECTION 4.02 Removal of Platinum US from Intercompany Agreements and
Representation..........................................................................21
SECTION 4.03 Discontinuing of Insurance Coverage..........................................................22
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ST. XXXX
SECTION 5.01 Organization, Authority and Qualification....................................................22
SECTION 5.02 Financial and Convention Statements..........................................................23
SECTION 5.03 No Conflict..................................................................................23
SECTION 5.04 Transferred Assets...........................................................................23
SECTION 5.05 St. Xxxx Investment..........................................................................24
SECTION 5.06 Taxes........................................................................................24
SECTION 5.07 Contracts of Platinum US.....................................................................26
SECTION 5.08 No Other Representations or Warranties.......................................................26
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 6.01 Organization, Authority and Qualification....................................................26
SECTION 6.02 No Conflict..................................................................................27
SECTION 6.03 St. Xxxx Investment..........................................................................27
SECTION 6.04 Internal Retrocession Agreements.............................................................26
SECTION 6.05 No Other Representations or Warranties.......................................................28
ARTICLE VII
NON-COMPETITION; USE OF NAME; ADMINISTRATION OF RUN-OFF CONTRACTS;
INSURANCE MATTERS
SECTION 7.01 Non-Competition..............................................................................28
SECTION 7.02 Use of Names; Non-Disparagement..............................................................30
SECTION 7.03 Standard for Administration of Run-off Business..............................................31
SECTION 7.04 Quotations for Certain Insurance Coverage....................................................31
ARTICLE VIII
TAX MATTERS
SECTION 8.01 Taxes of Platinum US.........................................................................31
SECTION 8.02 Conveyance Taxes.............................................................................33
SECTION 8.03 Tax Proceedings..............................................................................33
SECTION 8.04 Allocation of Consideration..................................................................33
SECTION 8.05 Section 197 Election.........................................................................34
SECTION 8.06 Indemnification as Adjustment................................................................34
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ARTICLE IX
CONDITIONS TO CLOSING
SECTION 9.01 Conditions to Obligations of St. Xxxx and the Company........................................34
SECTION 9.02 Conditions to Obligations of St. Xxxx........................................................35
SECTION 9.03 Conditions to Obligations of the Company.....................................................35
ARTICLE X
INDEMNIFICATION
SECTION 10.01 General Cross Indemnification...............................................................36
SECTION 10.02 Registration Statement Indemnification and Contribution.....................................37
SECTION 10.03 Limitations on Indemnification Obligations..................................................39
SECTION 10.04 Procedures for Indemnification of Third Party Claims........................................40
SECTION 10.05 Remedies Cumulative.........................................................................42
SECTION 10.06 Survival of Indemnities.....................................................................42
ARTICLE XI
ACCESS TO INFORMATION; FURTHER ASSURANCES
SECTION 11.01 Access to Information.......................................................................42
SECTION 11.02 Retention of Records........................................................................43
SECTION 11.03 St. Xxxx Confidential Information...........................................................43
SECTION 11.04 Further Assurances; No Agency; Specific Performance.........................................44
ARTICLE XII
PRE-EMPTIVE RIGHTS; REPURCHASE PROGRAMS; TRANSFER RESTRICTIONS; STANDSTILL
SECTION 12.01 Pre-Emptive Rights..........................................................................44
SECTION 12.02 Share Buy-Back Programs.....................................................................46
SECTION 12.03 Transfer Restrictions; Standstill Provisions................................................47
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01 Survival....................................................................................48
SECTION 13.02 Governing Law; Dispute Resolution...........................................................48
SECTION 13.03 Notices.....................................................................................49
SECTION 13.04 Amendment and Modification..................................................................50
SECTION 13.05 Successors and Assigns......................................................................50
SECTION 13.06 No Third Party Beneficiaries................................................................51
SECTION 13.07 Headings....................................................................................51
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SECTION 13.08 Severability................................................................................51
SECTION 13.09 Waiver......................................................................................51
SECTION 13.10 Expenses....................................................................................51
SECTION 13.11 Public Announcement.........................................................................51
SECTION 13.12 Entire Agreement............................................................................51
SECTION 13.13 Assignment of this Agreement................................................................51
SECTION 13.14 Counterparts................................................................................51
SECTION 13.15 Limit on Recovery from Company Directors and Officers.......................................52
Exhibit 3.01(a) Forms of Quota Share Retrocession Agreements
(i) One hundred percent quota share retrocession agreement
(traditional) between St. Xxxx Fire and Marine Insurance
Company and Platinum Underwriters Reinsurance, Inc.
(ii) One hundred percent quota share retrocession agreement
(non-traditional) between St. Xxxx Fire and Marine Insurance
Company and Platinum Underwriters Reinsurance, Inc.
(iii) One hundred percent quota share retrocession agreement
(non-traditional B-1) between St. Xxxx Fire and Marine
Insurance Company and Platinum Underwriters Reinsurance, Inc.
(iv) One hundred percent quota share retrocession agreement
(non-traditional B-2) between St. Xxxx Fire and Marine
Insurance Company and Platinum Underwriters Reinsurance, Inc.
(v) One hundred percent quota share retrocession agreement
(non-traditional C) between St. Xxxx Fire and Marine Insurance
Company and Platinum Underwriters Reinsurance, Inc.
(vi) One hundred percent quota share retrocession agreement
(non-traditional D-1) between Mountain Ridge and Platinum
Underwriters Reinsurance, Inc.
(vii) One hundred percent quota share retrocession agreement
(non-traditional D-2) between Mountain Ridge and Platinum
Underwriters Reinsurance, Inc.
(viii) One hundred percent quota share retrocession agreement
(non-traditional D-3) between St. Xxxx Fire and Marine
Insurance Company and Platinum Underwriters Reinsurance, Inc.
(ix) One hundred percent quota share retrocession agreement
(non-traditional D-4) between St. Xxxx Fire and Marine
Insurance Company and Platinum Underwriters Reinsurance, Inc.
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(x) One hundred percent quota share retrocession agreement
(non-traditional D-Stop Loss) between Mountain Ridge and
Platinum Underwriters Reinsurance, Inc.
(xi) One hundred percent quota share retrocession agreement
(non-traditional D-Spread Loss) between St. Xxxx Fire and
Marine Insurance Company and Platinum Underwriters
Reinsurance, Inc.
(xii) One hundred percent quota share retrocession agreement
(non-traditional E) between St. Xxxx Fire and Marine Insurance
Company and Platinum Underwriters Reinsurance, Inc. (draft
provided on June 3, 2002)
(xiii) One hundred percent quota share retrocession agreement
(traditional) between St. Xxxx Re UK and Platinum Underwriters
Reinsurance, Inc.
(xiv) One hundred percent quota share retrocession agreement
(non-traditional A) between St. Xxxx Re UK and Platinum
Underwriters Reinsurance, Inc.
(xv) One hundred percent quota share retrocession agreement
(non-traditional B-1) between St. Xxxx Re UK and Platinum
Underwriters Reinsurance, Inc.
Exhibit 3.01(b)(i) Form of Master Services Agreement
Exhibit 3.01(b)(ii) Form of UK Master Services Agreement
Exhibit 3.01(c)(i) Form of Run-off Services Agreement
Exhibit 3.01(c)(ii) Form of UK Run-off Services Agreement
Exhibit 3.01(d) Form of Option Agreement
Exhibit 3.01(e) Form of Transitional Trademark License Agreement
Exhibit 3.01(f) Form of Registration Rights Agreement
Exhibit 3.01(g) Form of Employee Benefits and Compensation Matters Agreement
Exhibit 3.01(h) Form of Underwriting Management Agreement
Exhibit 3.01(i) Form of
(i) Assignment and Assumption Agreement among Metropolitan
Life Insurance Company, St. Xxxx Re and Platinum US
(ii) Assignment and Assumption Agreement among WHCHC Real
Estate Limited Partnership, St. Xxxx Re and Platinum US
(iii) Sublease Agreement among St. Xxxx Reinsurance Management
Corporation and Platinum US
Exhibit 3.01(j) Form of UK Business Transfer Agreement
Exhibit 3.01(k) Form UK Underwriting Agency and Underwriting Management Agreement
Exhibit 3.04(b) Form of Xxxx of Sale
Exhibit 6.04 Form of Quota Share Retrocession Agreements between Platinum US, as
Retrocedent, and Platinum Bermuda, as Retrocessionnaire
Schedule 1.01 List of Classes of Business Included in the Transferred Lines
Schedule 2.01(b) Transferred Personal Property
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Schedule 2.01(c) Intellectual Property
Schedule 2.01(g) Exceptions to Renewal Rights
Schedule 2.01(i) Information in Respect of Transferred Assets
Schedule 2.01(j) Information to be Provided in Respect of Reinsurance Agreements
Schedule 2.02 Information in Respect of Renewal Rights
Schedule 3.02(a) Expenses Payable by the Company
Schedule 3.02(b) Expenses Payable by St. Xxxx
Schedule 4.02 Agreements between Platinum US and St. Xxxx Subsidiaries to be
Terminated
Schedule 5.04(a)(i) Exceptions to Good and Marketable Title of Transferred Assets
Schedule 5.04(a)(ii) Encumbrances on Transferred Assets
Schedule 5.06(c) Statutory Periods of Limitations
Schedule 5.06(d) Tax-related Agreements
Schedule 5.06(f) Tax Delinquencies, Claims, Audits, Examinations, Actions, Suits,
Proceedings or Investigations in Progress or Pending
Schedule 5.06(h) Platinum US Affiliated Group Membership for Tax Filings
Schedule 5.07 Contracts of Platinum US
Schedule 6.02(b) Regulatory Approvals Required to be Obtained by the Company or its
Post-Closing Subsidiaries Prior to the Closing
Schedule 7.01(a)(ii) Hiring Restrictions
Schedule 9.02(e) Form of Release
Schedule 10.02(b) St. Xxxx Information
Schedule 10.02(c) Shared Information
Schedule 11.01 Excluded Classes
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FORMATION AND SEPARATION AGREEMENT
THIS FORMATION AND SEPARATION AGREEMENT (this "AGREEMENT") is
made and entered into as of _______________, 2002, by and between THE ST. XXXX
COMPANIES, INC., a Minnesota corporation ("ST. XXXX"), and PLATINUM UNDERWRITERS
HOLDINGS, LTD., a Bermuda company (the "COMPANY").
RECITALS
WHEREAS, St. Xxxx has sponsored the formation of the Company;
WHEREAS, the Company intends to conduct an initial public
offering (the "PUBLIC OFFERING") of its common shares, par value $0.01 per share
(the "COMMON SHARES") and a concurrent initial public offering of its equity
security units (the "Units") having a stated amount of $25 per Unit (the "ESU
Offering");
WHEREAS, contingent upon the consummation of the Public
Offering, at the times specified herein and in the Reinsurance Agreements, St.
Xxxx will make the Cash Contribution (as defined herein) to the Company and will
cause certain of its subsidiaries to, among other things, transfer and retrocede
to certain subsidiaries of the Company assets and liabilities under the
Reinsurance Agreements and transfer the Transferred Assets to the Company and
its subsidiaries, as consideration for which the Company will issue to St. Xxxx
or its designee pursuant to the St. Xxxx Investment (as defined herein), (i) a
number of Common Shares equal to 15% of all Common Shares outstanding following
consummation of the Public Offering, the ESU Offering and the St. Xxxx
Investment and (ii) an option pursuant to the Option Agreement (as defined
herein) under which St. Xxxx or its designee will have the right to purchase
additional Common Shares of the Company for the prices and in the circumstances
set forth in the Option Agreement;
WHEREAS, St. Xxxx and the Company wish to provide herein for
certain transactions to be entered into in connection with the Public Offering,
the ESU Offering and the St. Xxxx Investment and to set forth herein certain
arrangements that will, following the consummation of the Public Offering and
the St. Xxxx Investment, govern the relationship between them and their
Subsidiaries; and
WHEREAS, St. Xxxx, the Company, and RenaissanceRe Holdings
Ltd. ("RENAISSANCERE"), a Bermuda company, have entered into an Investment
Agreement (as defined herein), which sets forth the terms of the RenaissanceRe
Investment (as defined herein) as well as certain continuing relationships
between the Company and RenaissanceRe following the completion of the Public
offering and the ESU Offering, the St. Xxxx Investment and the RenaissanceRe
Investment.
NOW, THEREFORE, in consideration of the mutual promises,
covenants and agreements set forth herein, the sufficiency of which is
acknowledged, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. As used in this Agreement, the
following terms have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ACTION" means any action, suit, arbitration, inquiry,
proceeding or investigation by or before any court, any governmental or other
regulatory or administrative agency or commission or any arbitration tribunal.
"AFFILIATE" of any Person or entity means any Person which,
directly or indirectly, controls, is under common control with, or is controlled
by, such Person.
"ANCILLARY AGREEMENTS" means the Option Agreement, the
Registration Rights Agreement, the Employee Benefits and Compensation Matters
Agreement, the Underwriting Management Agreement, the Master Services Agreement,
the Sublease Agreements, the Run-off Services Agreement, the Transitional
Trademark License Agreement, the Quota Share Retrocession Agreements, and the UK
Agreements, in each case as defined and described in more detail in Section 3.01
hereof.
"ARBITRATORS" has the meaning specified in Section 13.02(b).
"BENEFICIAL OWNER" and "BENEFICIALLY OWN" means, with respect
to any Person:
(i) securities that such Person or any of such
Person's Affiliates, directly or indirectly, has the right to vote or
dispose of or has "beneficial ownership" of (as determined pursuant to
Rule 13d-3 of the General Rules and Regulations under the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT")), including
without limitation pursuant to any agreement, arrangement or
understanding, whether or not in writing; PROVIDED that a Person shall
not be deemed the "Beneficial Owner" of, or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer made by such
Person or any of such Person's Affiliates until such tendered
securities are accepted for payment, purchase or exchange, (B) any
security as a result of an oral or written agreement, arrangement or
understanding to vote such security if such agreement, arrangement or
understanding: (1) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable provisions of the General Rules
and Regulations under the Exchange Act, and (2) is not also then
reportable by such Person on Schedule 13D under the Exchange Act (or
any comparable or successor report); or
(ii) securities that are beneficially owned,
directly or indirectly, by any other Person (or any Affiliate thereof)
with which such Person (or any of such Person's Affiliates) has any
agreement, arrangement or understanding (whether or not in writing, but
excluding customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities until the expiration of forty days after the date of such
acquisition), for the purpose of acquiring, holding, voting
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(except pursuant to a revocable proxy as described in the proviso to
subparagraph (i) above) or disposing of any Voting Securities.
"BILLS OF SALE" means the Bills of Sale and Assignment (or
other appropriate instruments of transfer, including instruments of assignment
suitable for recording at the U.S. Patent & Trademark Office, the U.S. Copyright
Office or equivalent agencies in other relevant jurisdictions where applicable),
to be executed by St. Xxxx or its Subsidiaries, as applicable, and to be
acknowledged by the Company or its Subsidiaries, as applicable) on the Closing
Date, substantially in the form of EXHIBIT 3.04(b).
"BUSINESS" means the reinsurance business of St. Xxxx, as
conducted through its division, St. Xxxx Re.
"BUSINESS DAY" means any day excluding Saturday, Sunday and
any day on which banks in New York, New York, have the option by law or other
governmental action to close.
"CASH CONTRIBUTION" has the meaning specified in Section
2.07(a).
"CLOSING" has the meaning specified in Section 3.03.
"CLOSING BALANCE SHEET" has the meaning specified in Section
4.01(b).
"CLOSING DATE" has the meaning specified in Section 3.03.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON SHARES" has the meaning specified in the Recitals.
"COMPANY" has the meaning specified in the preamble of this
Agreement.
"COMPANY INDEMNITEE" has the meaning specified in Section
10.01(a).
"COMPANY INFORMATION" has the meaning specified in Section
10.02(a).
"COMPANY LIABILITIES" means collectively, except as otherwise
provided for in this Agreement or the Ancillary Agreements, any and all
Liabilities that arise out of any act, omission, event or condition occurring or
arising on or after the Closing Date relating to the ownership, operation or use
of the business of the Company or any of its Post-closing Subsidiaries or the
Transferred Assets by the Company or any of its Post-closing Subsidiaries. For
the avoidance of doubt, the Company Liabilities do not include any Liabilities
under the federal or any other securities laws relating to the Public Offering
but do include all Liabilities relating to the Employment Agreements
irrespective of whether occurring or arising prior to, on or after the Closing
Date and all Liabilities relating to any Renewal Obligations.
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"COMPANY REGISTRATION INDEMNITEE" has the meaning specified in
Section 10.02(b).
"COMPANY SUBSIDIARY" means any Subsidiary of the Company as of
the date hereof or at any time hereafter.
"CONVERTIBLE NEW SECURITIES" has the meaning specified in
Section 12.01(d)(iv).
"DILUTIVE TRANSACTION" has the meaning specified in Section
12.01(a).
"DISPUTE" has the meaning specified in Section 13.02(b)(i).
"DOJ" means the Department of Justice.
"EMPLOYEE BENEFITS AND COMPENSATION MATTERS AGREEMENT" has the
meaning specified in Section 3.01(g)(i).
"EMPLOYMENT AGREEMENTS" means, collectively, (i) the
employment agreement, dated as of March 3, 2002, between St. Xxxx and Xxxxxx X.
Xxxxxx, as amended, (ii) the agreement, dated as of March 1, 2002, between St.
Xxxx and Xxxxxx X. Xxxxxx, as amended, (iii) the consulting agreement, dated as
of March 1, 2002, between St. Xxxx and Xxxxxx X. Xxxxxx, (iv) the employment
agreement, dated as of May 2, 2002, between St. Xxxx and Xxxxxxx X. Xxxxx, as
amended, (v) the employment agreement, dated as of July 3, 2002, between St.
Xxxx and Xxxxxxx X. Xxxxxx, as amended, and (vi) the employment agreement, dated
as of July 5, 2002, between St. Xxxx and Xxxxxxx X. Xxxxxxxxxxx, as amended.
"ENCUMBRANCE" means any security interest, pledge,
hypothecation, mortgage, lien (including, without limitation, environmental and
tax liens), violation, charge, lease, license, encumbrance, servient easement,
adverse claim, reversion, reverter, preferential arrangement, restrictive
covenant, condition or restriction of any kind, including, without limitation,
any restriction on the use, voting, transfer, receipt of income or other
exercise of any attributes of ownership.
"ESU OFFERING" has the meaning specified in the Recitals.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated thereunder.
"EXCLUDED CLASSES" are those types of reinsurance contracts
previously underwritten by St. Xxxx Re and included in the list of classes of
business set forth in Schedule 11.01.
"FIRE AND MARINE" means St. Xxxx Fire and Marine Insurance
Company, a Minnesota corporation and a wholly owned subsidiary of St. Xxxx.
"FIRM PUBLIC OFFERING SHARES" means the Company's Common
Shares issued in the Public Offering, other than Common Shares issued as a
result of exercise of the Over-Allotment by the underwriters of the Public
Offering.
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"FIRM ST. XXXX SHARES" has the meaning specified in Section
2.05(a)(i).
"FOREIGN CORPORATION" means a foreign corporation within the
meaning of Section 7701(a)(3) and (5) of the Code.
"FTC" means the Federal Trade Commission.
"GOVERNMENTAL AUTHORITY" means any self-regulatory
organization having jurisdiction over the parties hereto or any of the parties
to any of the Ancillary Agreements, any United States or non-United States
federal, national, supranational, state, provincial, local or similar
government, governmental, regulatory (including, without limitation, insurance
regulatory) or administrative authority, legislative body, agency or commission
or any court, tribunal or judicial or arbitral body.
"GOVERNMENTAL ORDER" means any order, writ, judgment,
injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.
"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 1976, as amended.
"INDEMNIFYING PARTY" has the meaning specified in Section
10.03.
"INDEMNITEE" has the meaning specified in Section 10.03.
"INFORMATION" has the meaning specified in Section 11.01(b).
"INSURANCE PROCEEDS" means those monies (i) received by an
insured from an insurance carrier or (ii) paid by an insurance carrier on behalf
of the insured, in either case net of any applicable premium adjustments,
retrospectively rated premium adjustments, deductibles, retentions or costs paid
by such insured.
"INVESTMENT AGREEMENT" means the Investment Agreement by and
among the Company, St. Xxxx and RenaissanceRe, dated as of September 20, 2002,
pursuant to which RenaissanceRe will, under the terms and conditions specified
therein, purchase up to 3,960,000 Common Shares of the Company in a private
placement that will close concurrently with the Public Offering, the ESU
Offering and the St. Xxxx Investment plus as many additional Common Shares as
are required in order for it to retain its 9.9% interest (up to a maximum of
594,000 Common Shares) and will receive, pursuant to the RenaissanceRe Option, a
ten-year option to purchase up to an additional 2,500,000 Common Shares of the
Company.
"LIABILITIES" means any and all debts, liabilities and
obligations, payments, costs and expenses, whether accrued or unaccrued,
absolute or contingent, matured or unmatured, disclosed or undisclosed, known or
unknown, liquidated or unliquidated or determined or determinable, including,
without limitation, those arising under any law and regulations thereunder
(including, without limitation, any insurance law but excluding any Tax law),
Action or Governmental Order and those arising under any contract, agreement,
arrangement, commitment or undertaking.
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"LOSSES" means any and all losses, Liabilities, claims,
damages, obligations, payments, costs and expenses, matured or unmatured,
absolute or contingent, disclosed or undisclosed, determined or determinable,
accrued or unaccrued, liquidated or unliquidated, known or unknown (including,
without limitation, the costs and expenses of any Action, threatened Action,
demand, assessment, judgment, settlement and compromise relating thereto and
attorneys' fees and any and all expenses whatsoever reasonably incurred in
investigating, preparing or defending against any such Action or threatened
Action).
"MOUNTAIN RIDGE" means Mountain Ridge Insurance Company, a
Vermont insurance company.
"NEWLY HIRED EMPLOYEES" has the meaning specified in Section
3.01(g)(i).
"NEW SECURITIES" has the meaning specified in Section
12.01(a).
"OPTION AGREEMENT" has the meaning specified in Section
3.01(d).
"OPTIONAL CASH CONTRIBUTION" has the meaning specified in
Section 2.07(b).
"OPTIONAL PUBLIC OFFERING SHARES" means additional Common
Shares offered upon the exercise of the Over-Allotment Option.
"OPTIONAL ST. XXXX SHARES" has the meaning specified in
Section 2.05(a)(ii).
"OVER-ALLOTMENT OPTION" means the over-allotment option that
may be exercised by the underwriters of the Public Offering pursuant to the
underwriting agreement relating to the Public Offering.
"PERMITTED ACQUIREE" has the meaning specified in Section
7.01(b)(ii).
"PERSON" includes an individual, a partnership, a joint
venture, a limited liability company, a corporation, a trust, an unincorporated
organization, a group and a government or other department or agency thereof.
"PLATINUM BERMUDA" means Platinum Underwriters Bermuda, Ltd.,
a Bermuda insurance company and a wholly owned subsidiary of the Company.
"PLATINUM FINANCE" means Platinum Underwriters Finance, Inc.,
a Delaware corporation and a wholly owned subsidiary of Platinum Regency.
"PLATINUM REGENCY" means Platinum Regency Holdings, an Irish
private unlimited company and a wholly owned subsidiary of the Company.
"PLATINUM UK" means Platinum Re (UK) Limited, an English
insurance company and a wholly owned subsidiary of Platinum Regency.
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"PLATINUM US" means Platinum Underwriters Reinsurance, Inc., a
Maryland insurance company and a wholly owned indirect subsidiary of St. Xxxx
xxxxx to the Closing Date, and a wholly owned subsidiary of Platinum Finance
following the Closing.
"PLATINUM US SHARES" means all the issued and outstanding
shares of common stock, par value $100 per share, of Platinum US.
"POST-CLOSING SUBSIDIARIES", with respect to either St. Xxxx
or the Company, means collectively all of the Subsidiaries of such entity
following the Closing Date.
"PRE-CLOSING PERIODS" has the meaning specified in Section
8.01(a).
"PRE-CLOSING TAXES" has the meaning specified in Section
8.01(a).
"PRIVATE OFFERING MEMORANDUM" means the private offering
memorandum relating to the RenaissanceRe Investment.
"PROSPECTUS" means any preliminary prospectus, as amended and
supplemented from time to time, and any final prospectus filed pursuant to Rule
424(b) under the Securities Act, in each case relating to one of the
Registration Statements.
"PUBLIC OFFERING" has the meaning specified in the Recitals.
"PURCHASE CONTRACT" means the contract to purchase Common
Shares issued as part of the Units in the ESU Offering.
"PURCHASE CONTRACT AGREEMENT" means the purchase contract
agreement between the Company and JPMorgan Chase Bank, as purchase contract
agent.
"QUOTA SHARE RETROCESSION AGREEMENTS" has the meaning
specified in Section 3.01(a).
"REGISTRATION INDEMNITEE" has the meaning specified in Section
10.02(b).
"REGISTRATION RIGHTS AGREEMENT" has the meaning specified in
Section 3.01(f).
"REGISTRATION STATEMENTS" means the registration statements on
Form S-1, as amended and supplemented from time to time, to be filed with the
Commission under the Securities Act of 1933, as amended, relating to each of the
Public Offering and the ESU Offering.
"REGULATIONS" means the Treasury Regulations (including
temporary Regulations) promulgated by the United States Department of Treasury
with respect to the Code or other federal tax statutes.
"REINSURANCE AGREEMENTS" means the reinsurance agreements
retroceded to one of the Company's Post-Closing Subsidiaries pursuant to the
applicable Quota Share Retrocession Agreements.
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"RENAISSANCERE" has the meaning specified in the Recitals of
this Agreement.
"RENAISSANCERE INVESTMENT" means the private placement to
RenaissanceRe of Common Shares and the RenaissanceRe Option pursuant to the
Investment Agreement.
"RENAISSANCERE OPTION" means the ten-year option to purchase
up to 2,500,000 Common Shares at a price per share equal to 120% of the initial
public offering price that the Company has granted to RenaissanceRe pursuant to
the Investment Agreement.
"RENEWAL OBLIGATIONS" means any obligations of St. Xxxx and
its Subsidiaries to write or renew reinsurance treaties, contracts and
agreements incepting on or after January 1, 2002 relating to the Transferred
Lines and arising from the operation of the reinsurance business conducted by
St. Xxxx Re prior to the Closing.
"RENEWAL RIGHTS" means all the direct and indirect rights of
St. Xxxx and its Subsidiaries to seek to renew reinsurance treaties, contracts
and agreements underwritten by St. Xxxx Re and in force on the Closing Date
relating to the Transferred Lines, other than treaties, contracts and agreements
identified or described in SCHEDULE 2.01(g).
"REPRESENTATIVES" has the meaning specified in Section 11.01.
"RESTRICTED PERIOD" has the meaning specified in Section
7.01(a).
"RUN-OFF BUSINESS" has the meaning specified in Section
7.01(b)(i).
"RUN-OFF SERVICES" has the meaning specified in Section
3.01(c)(i).
"SECOND CLOSING" has the meaning specified in Section 3.06(a).
"SECOND CLOSING DATE" has the meaning specified in Section
3.06(a).
"SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"SHARED INFORMATION" has the meaning specified in Section
10.02(c).
"ST. XXXX" has the meaning specified in the preamble of this
Agreement.
"ST. XXXX CONFIDENTIAL INFORMATION" has the meaning specified
in Section 11.03(a).
"ST. XXXX DESIGNEE" means an Affiliate of St. Xxxx designated
as a party to the Option Agreement or the Registration Rights Agreement.
"ST. XXXX GROUP" means any "affiliated group" (as defined in
Section 1504(a) of the Code) or any other consolidated, combined, unitary or
similar group for any other Tax purpose that includes St. Xxxx.
"ST. XXXX INDEMNITEE" has the meaning specified in Section
10.01(b).
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"ST. XXXX INFORMATION" has the meaning specified in Section
10.02/(b).
"ST. XXXX INVESTMENT" means the private placement to St. Xxxx
of Common Shares and the St. Xxxx Option pursuant to Section 2.05 of this
Agreement.
"ST. XXXX INVESTMENT OPINION" has the meaning specified in
Section 9.02(d).
"ST. XXXX LIABILITIES" means collectively, except as otherwise
provided for in this Agreement or the Ancillary Agreements, any and all
Liabilities that arise out of any act, omission, event or condition occurring or
arising prior to the Closing Date relating to (i) the ownership, operation or
use of the business of St. Xxxx Re or the Transferred Assets by St. Xxxx or any
of its Subsidiaries and (ii) Platinum US. For the avoidance of doubt, the St.
Xxxx Liabilities do not include any Liabilities under the federal or any other
securities laws relating to the Public Offering or any Renewal Obligations. For
the further avoidance of doubt, St. Xxxx Liabilities do not include Liabilities
arising out of any act or omission occurring or arising prior to the Closing
Date of any of Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, Xxxxxxx X.
Xxxxxx or Xxxxxxx X. Xxxxxxxxxxx taken in furtherance of the organization of
Platinum Holdings or its Subsidiaries, the Public Offering, this Agreement, the
Registration Statements, the Ancillary Agreements or the transactions related
thereto but otherwise DO include Liabilities arising out of any act or omission
occurring or arising prior to the Closing Date of any of such individuals in
their capacities as officers of St. Xxxx Re.
"ST. XXXX LICENSOR" has the meaning specified in Section
3.01(e).
"ST. XXXX OPTION" means the option to be granted to St. Xxxx
pursuant to the Option Agreement.
"ST. XXXX PRE-CLOSING SUBSIDIARIES" has the meaning specified
in Article V.
"ST. XXXX RE" means the reinsurance operations of St. Xxxx
reported in the Reinsurance segment of St. Xxxx, as reflected in its 2001 Annual
Report on Form 10-K.
"ST. XXXX RE (UK)" means St. Xxxx Reinsurance Company Limited,
a U.K. insurance company and a wholly owned subsidiary of St. Xxxx.
"ST. XXXX REGISTRATION INDEMNITEE" has the meaning specified
in Section 10.02(a).
"ST. XXXX SHARES" means the Firm St. Xxxx Shares, the Optional
St. Xxxx Shares and any Common Shares issuable to St. Xxxx pursuant to Section
2.05 of this Agreement collectively.
"STRADDLE PERIODS" has the meaning specified in Section
8.01(a).
"SUBLEASE AGREEMENTS" means the sublease agreements and
assignments of leases between Affiliates of St. Xxxx and Affiliates of the
Company; substantially in the forms attached to this Agreement as EXHIBITS
3.01(i)(i)-(v).
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"SUBSIDIARY" means, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any other Person in which such Person
and/or one or more Subsidiaries of such Person has more than a 50% equity
interest at the time.
"TAX" means all federal, state, local and foreign income,
profits, franchise, gross receipts, premium, environmental, customs duty,
capital stock, severances, stamp, payroll, sales, employment, unemployment,
disability, use, property, withholding, excise, production, value added,
occupancy and other taxes, duties or assessments of any nature whatsoever,
together with all interest, penalties and additions imposed with respect to such
amounts and any interest in respect of such penalties and additions.
"TAX PROCEEDING" has the meaning specified in Section 8.03(a).
"TAX RETURNS" means all returns, reports or similar statements
(including any related exhibits and schedules) required to be filed with respect
to any Taxes, including any information return, claim or refund, amended return
or declaration of estimated tax.
"THIRD PARTY CLAIM" has the meaning specified in Section
10.04(a).
"TRANSFERRED ASSETS" has the meaning specified in Section
2.01.
"TRANSFERRED BUSINESS" means the Reinsurance Agreements and
the Transferred Assets, collectively.
"TRANSFERRED BUSINESS CONFIDENTIAL INFORMATION" means the
information set forth in Section 2.01(i), Section 2.01(j) and Section 2.02. For
the avoidance of doubt, Transferred Business Confidential Information does not
include any information relating to Excluded Classes to made available to the
Company pursuant to Section 11.01.
"TRANSFERRED LINES" are those types of reinsurance contracts
underwritten by St. Xxxx Re and included in the list of classes of business set
forth in Schedule 1.01(a).
"UK AGREEMENTS" means the UK Business Transfer Agreement, the
UK Master Services Agreement, the UK Run-off Services Agreement, the UK
Underwriting Agency and Underwriting Management Agreement and the UK Quota Share
Retrocession Agreements.
"UK BUSINESS TRANSFER AGREEMENT" has the meaning specified in
Section 3.01(j).
"UK MASTER SERVICES AGREEMENT" has the meaning specified in
Section 3.01(b)(ii).
"UK QUOTA SHARE RETROCESSION AGREEMENTS" means the quota share
retrocession agreements referred to in Sections 3.01(a)(xiii) through (xv).
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"UK RUN-OFF SERVICES AGREEMENT" has the meaning specified in
Section 3.01(c)(ii).
"UK UNDERWRITING AGENCY AND UNDERWRITING MANAGEMENT AGREEMENT"
has the meaning specified in Section 3.01(k).
"UNDERWRITING AGREEMENT" means the underwriting agreement
among St. Xxxx, the Company and Xxxxxxx, Xxxxx & Co. and the other underwriters
named therein relating to the Public Offering.
"UNITS" has the meaning specified in the Recitals.
"USF&G" has the meaning specified in Section 5.04(b).
"VOTING SECURITIES" means the Common Shares and all other
securities of the Company of any kind or class having power generally to elect a
majority of the Company's directors (irrespective of whether or not at the time
stock of any class or classes of the Company shall have or might have voting
power by reason of the happening of any contingency).
"WHOLLY OWNED POST-CLOSING SUBSIDIARIES", with respect to
either St. Xxxx or the Company, means collectively all of the Wholly Owned
Subsidiaries of such entity following the Closing Date.
"WHOLLY OWNED SUBSIDIARY" means, as to any Person, (i) any
corporation 100% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person and/or one
or more Wholly Owned Subsidiaries of such person and (ii) any other Person in
which such person and/or one or more Wholly Owned Subsidiaries of such Person
has a 100% equity interest at the time.
SECTION 1.02 OTHER DEFINITIONAL PROVISIONS. The words
"hereof", "hereto", "herein" and "hereunder" and words of similar import when
used in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement; and references to any Article, Section,
Exhibit or Schedule are references to Articles, Sections, Exhibits or Schedules
in or to this Agreement unless otherwise specified.
ARTICLE II
CONTRIBUTION OF ASSETS; ST. XXXX INVESTMENT
SECTION 2.01 TRANSFER OF ASSETS. Effective as of the Closing
Date, and immediately after the delivery of the Firm Public Offering Shares
against payment therefor, St. Xxxx shall, and (as necessary) shall cause its
Subsidiaries to, sell, assign, transfer, convey and deliver to the Company or
its designees, which shall acquire at the Closing from St. Xxxx or its
Subsidiaries, as the case may be, the following assets and properties together
with any related
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Company Liabilities (such assets and Company Liabilities are collectively
referred to as the "TRANSFERRED ASSETS"):
(a) the Platinum US Shares;
(b) the furniture, fixtures, computers, equipment,
machinery and other tangible personal property, and all contracts and agreements
relating thereto listed on SCHEDULE 2.01(b);
(c) the licensed rights to the intellectual property
listed on SCHEDULE 2.01(c), which includes intellectual property used in the
offices subject to the subleases and assignments of leases listed in Section
3.01(i) as well as on the premises leased by St. Xxxx in Tokyo and in London (it
being understood that certain rights may not be transferred without the consent
of a third party, and that while St. Xxxx and its relevant Subsidiaries will use
commercially reasonable efforts to obtain such consents, they shall not have any
liability to the Company or any Subsidiary of the Company to the extent any such
consent is not obtained by the Closing Date and, for greater certainty, none of
St. Xxxx nor any Subsidiary of St. Xxxx shall be required to make any payment to
a third party to procure the transfer of rights to any intellectual property);
(d) the Employment Agreements, as follows:
(i) the employment agreement, dated as of March
3, 2002, between St. Xxxx and Xxxxxx X. Xxxxxx, as amended, shall be
assigned to the Company;
(ii) the agreement, dated as of March 1, 2002,
between St. Xxxx and Xxxxxx X. Xxxxxx, as amended, shall be assigned to
the Company;
(iii) the consulting agreement, dated as of March
1, 2002, between St. Xxxx and Xxxxxx X. Xxxxxx shall be assigned to
Platinum US;
(iv) the employment agreement, dated as of May 2,
2002, between St. Xxxx and Xxxxxxx X. Xxxxx, as amended, shall be
assigned to Platinum US;
(v) the employment agreement, dated as of July
3, 2002, between St. Xxxx and Xxxxxxx X. Xxxxxx, as amended, shall be
assigned to the Company; and
(vi) the employment agreement, dated as of July
5, 2002, between St. Xxxx and Xxxxxxx X. Xxxxxxxxxxx, as amended, shall
be assigned to the Company.
(e) the rights to occupy the premises that are the
subject of the Sublease Agreements as specified by such Sublease Agreements;
(f) the Newly Hired Employees and the U.K. Newly Hired
Employees;
(g) the Renewal Rights other than as set forth on
SCHEDULE 2.01(g);
(h) the licensed rights to certain intellectual property
provided pursuant to the Transitional Trademark License Agreements;
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(i) Information in respect of the Transferred Assets set
forth in Section 2.01(a) through (h) set forth in SCHEDULE 2.01(i); and
(j) Information in respect of Reinsurance Agreements set
forth in SCHEDULE 2.01(j).
The Transferred Assets (i) include any and all Business Assets
as defined in the UK Business Transfer Agreement, but (ii) exclude any and all
assets and properties of St. Xxxx or any of its Affiliates other than the assets
specifically identified above.
SECTION 2.02 RENEWAL RIGHTS INFORMATION. Effective as of the
Closing Date, and promptly after the delivery of the Firm Public Offering Shares
against payment therefor, St. Xxxx shall cause to be delivered to the Company or
its Subsidiaries the information in respect of Renewal Rights set forth in
Schedule 2.02.
SECTION 2.03 JOINT OWNERSHIP. The parties agree that they
shall be joint owners of the information and records referenced in Section
2.01(i) and (j), whether they have originals or copies of the various components
thereof.
SECTION 2.04 ASSUMPTION AND RETENTION OF LIABILITIES.
Effective as of the Closing Date, the Company or one of its Post-Closing
Subsidiaries shall assume and pay, perform and discharge (when due and payable)
the Company Liabilities, and St. Xxxx shall retain and, pay, perform and
discharge (when due and payable) the St. Xxxx Liabilities.
SECTION 2.05 ST. XXXX INVESTMENT. (a) Subject to clause (b) of
this Section 2.05, the Company hereby agrees that, contingent upon the
consummation of the Public Offering, it shall sell, transfer, convey and deliver
to St. Xxxx or its designee and St. Xxxx agrees that it shall purchase from the
Company in a transaction exempt from the registration requirements of the
Securities Act:
(i) at the time of the delivery of the Firm
Public Offering Shares, 6,000,000 Common Shares (the "FIRM ST. XXXX
SHARES"), the St. Xxxx Option and the right to receive the Optional St.
Xxxx Shares in the circumstances described in Section 2.05(a)(ii), in
exchange for the transfer of the Transferred Assets by St. Xxxx
pursuant to Section 2.01 and the payment of the Cash Contribution by
St. Xxxx pursuant to Section 2.07(a), and the various agreements and
undertakings of St. Xxxx herein and the entering into the Ancillary
Agreements by St. Xxxx and its Subsidiaries; and
(ii) in the event of any exercise of the
Over-Allotment Option by the underwriters in the underwriters'
discretion in whole or in part, at the time of delivery of the Optional
Public Offering Shares, a number of Common Shares (the "OPTIONAL ST.
XXXX SHARES"), to be determined in St. Paul's discretion and notice
thereof to be provided to the Company by St. Xxxx a reasonable time
prior to the Second Closing of the sale of the Optional Public Offering
Shares, such Optional St. Xxxx Shares not to exceed the lesser of (I)
the number of Common Shares required for St. Xxxx to retain a 15%
ownership interest in the Company and (II) 900,000 Common Shares if the
Over-Allotment Option is exercised in full, in exchange for the payment
of the Optional Cash Contribution pursuant to Section 2.07(b),
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such that in case (i) above, and in case (ii) above if St. Xxxx exercises in
full its right to purchase Optional St. Xxxx Shares, upon consummation of the
Public Offering, the ESU Offering, the St. Xxxx Investment and the RenaissanceRe
Investment, St. Xxxx will have beneficial ownership of 15% of all Common Shares
outstanding, the precise number of shares to be issued to St. Xxxx to be rounded
down to the nearest round lot number of shares.
(b) In the event the Company and the underwriters
agree to alter the number of Firm Public Offering Shares and Optional Public
Offering Shares after the date hereof, the number of Firm St. Xxxx Shares and
Optional St. Xxxx Shares will be proportionately adjusted.
SECTION 2.06 THIRD PARTY CONSENTS. (a) St. Xxxx shall use
commercially reasonable efforts to obtain prior to the Closing Date any consent,
approval or authorization necessary for the transfer of the Transferred Assets
to the Company as contemplated by this Agreement.
(b) If St. Xxxx has not obtained any consent, approval
or authorization necessary for the transfer of any of the Transferred Assets
as contemplated by this Agreement prior to the Closing Date, St. Xxxx, for a
period of up to 12 months subsequent to the Closing Date, shall reasonably
cooperate with the Company in attempting to obtain such consents, approvals
or authorizations as promptly thereafter as practicable, PROVIDED that the
Company shall promptly reimburse St. Xxxx for any reasonable legal and other
expenses incurred in connection with such cooperation as such expenses are
incurred.
(c) St. Xxxx xxx not exercise any of its rights under
any of the Transferred Assets with respect to which such consent, approval or
authorization to the transfer thereof has not been obtained by the Closing
Date except at the direction of or on behalf of the Company or its
Post-Closing Subsidiaries, and the Company and its Post-Closing Subsidiaries
shall be responsible for any Company Liabilities in respect of such
Transferred Assets after the Closing Date PROVIDED that St. Xxxx shall not be
required to take any action directed by the Company under any agreement
relating to a Transferred Asset that would cause a breach of such Agreement
and St. Xxxx or a St. Xxxx Xxxx-Closing Subsidiary reasonably believes that
it retains liability for such breach.
SECTION 2.07 (a) CASH CONTRIBUTION. At the Closing, St. Xxxx
shall pay to the Company the amount in cash (the "CASH CONTRIBUTION") specified
as the Cash Contribution in the final Prospectus to be filed by the Company with
the Commission pursuant to Rule 424(b) under the Securities Act in connection
with the Public Offering. St. Xxxx shall make such Cash Contribution to the
Company in U.S. dollars, in immediately available funds, payable by wire
transfer to a bank account outside the United States of America notified by the
Company to St. Xxxx two Business Days prior to the Closing Date.
(b) Upon delivery of the Optional St. Xxxx Shares, St.
Xxxx shall pay to the Company the amount in cash (the "OPTIONAL CASH
CONTRIBUTION") equal to the product of (i) the Cash Contribution and (ii) a
fraction, the numerator of which is the number of Optional St. Xxxx Shares and
the denominator of which is the number of Firm St. Xxxx Shares. St. Xxxx shall
make such Optional Cash Contribution to the Company in U.S. dollars, in
immediately available funds, payable by wire transfer to a bank account outside
the United States of America notified by the
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Company to St. Xxxx two Business Days prior to the date of delivery of the
Optional St. Xxxx Shares.
ARTICLE III
INTERCOMPANY TRANSACTIONS AS OF THE CLOSING DATE; CLOSING
SECTION 3.01 ANCILLARY AGREEMENTS. The parties hereto agree to
enter into, and (as necessary) shall cause their respective Subsidiaries to
enter into, the Ancillary Agreements, in each case (unless otherwise specified
in this Article III) effective as of the Closing Date contingent upon and
immediately after the time of the completion of the Public Offering as follows:
(a) the following retrocession agreements
(collectively, the "QUOTA SHARE RETROCESSION AGREEMENTS"), all of which shall
go into effect as of the later of 12:01 A.M., local time, on the Business Day
immediately following the Closing Date or October 1, 2002:
(i) a Quota Share Retrocession Agreement between
Fire and Marine and Platinum US, substantially in the form of EXHIBIT
3.01(a)(i), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the traditional reinsurance
contracts entered into by Fire and Marine incepting on or after January
1, 2002 and the Closing Date as specified in an exhibit thereto, and
the traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;
(ii) a Quota Share Retrocession Agreement between
Fire and Marine and Platinum US, substantially in the form of EXHIBIT
3.01(a)(ii), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form A)
reinsurance contracts incepting on or after January 1, 2002 and the
Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;
(iii) a Quota Share Retrocession Agreement between
Fire and Marine and Platinum US, substantially in the form of EXHIBIT
3.01(a)(iii), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form B-1)
reinsurance contracts incepting on or after January 1, 2002 and the
Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;
(iv) a Quota Share Retrocession Agreement between
Fire and Marine and Platinum US, substantially in the form of EXHIBIT
3.01(a)(iv), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form B-2)
reinsurance contracts incepting on or after January 1, 2002 and the
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Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;
(v) a Quota Share Retrocession Agreement between
Fire and Marine and Platinum US, substantially in the form of EXHIBIT
3.01(a)(v), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form C)
reinsurance contracts incepting on or after January 1, 2002 and the
Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;
(vi) a Quota Share Retrocession Agreement between
Mountain Ridge and Platinum US, substantially in the form of EXHIBIT
3.01(a)(vi), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form D-1)
reinsurance contracts incepting on or after January 1, 2002 and the
Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;
(vii) a Quota Share Retrocession Agreement between
Mountain Ridge and Platinum US, substantially in the form of EXHIBIT
3.01(a)(vii), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form D-2)
reinsurance contracts incepting on or after January 1, 2002 and the
Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;
(viii) a Quota Share Retrocession Agreement between
Fire and Marine and Platinum US, substantially in the form of EXHIBIT
3.01(a)(viii), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form D-3)
reinsurance contracts incepting on or after January 1, 2002 and the
Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;
(ix) a Quota Share Retrocession Agreement between
Fire and Marine and Platinum US, substantially in the form of EXHIBIT
3.01(a)(ix), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form D-4)
reinsurance contracts incepting on or after January 1, 2002 and the
Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;
(x) a Quota Share Retrocession Agreement between
Mountain Ridge and Platinum US, substantially in the form of EXHIBIT
3.01(a)(x), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form D-Stop
Loss) reinsurance contracts incepting on or after January 1, 2002 and
the Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;
(xi) a Quota Share Retrocession Agreement between
Fire and Marine and Platinum US, substantially in the form of EXHIBIT
3.01(a)(xi), pursuant to which
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Platinum US will reinsure 100% of the liabilities of Fire and Marine
under the non-traditional (Form D-Spread Loss) reinsurance contracts
incepting on or after January 1, 2002 and the Closing Date as specified
in an exhibit thereto, and the non-traditional reinsurance contracts
bound pursuant to the Underwriting Management Agreement;
(xii) a Quota Share Retrocession Agreement between
Fire and Marine and Platinum US, substantially in the form of EXHIBIT
3.01(a)(xii), pursuant to which Platinum US will reinsure 100% of the
liabilities of Fire and Marine under the non-traditional (Form E)
reinsurance contracts incepting on or after January 1, 2002 and the
Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the
Underwriting Management Agreement;
(xiii) a UK Quota Share Retrocession Agreement
between St. Xxxx Re UK and Platinum US, substantially in the form of
EXHIBIT 3.01(a)(xiii), pursuant to which Platinum US will reinsure 100%
of the liabilities of St. Xxxx Re UK under the traditional reinsurance
contracts written by St. Xxxx Re UK incepting on or after January 1,
2002 until the earlier of either (A) such time as Platinum UK is duly
licensed by the U.K. Financial Services Authority to write reinsurance
business or (B) the first anniversary of the Closing Date;
(xiv) a UK Quota Share Retrocession Agreement
between St. Xxxx Re UK and Platinum US, substantially in the form of
EXHIBIT 3.01(a)(xiv), pursuant to which Platinum US will reinsure 100%
of the liabilities of St. Xxxx Re UK under the non-traditional (Form A)
reinsurance contracts written by St. Xxxx Re UK incepting on or after
January 1, 2002, as specified therein, until the earlier of either (A)
such time as Platinum UK is duly licensed by the U.K. Financial
Services Authority to write reinsurance business or (B) the first
anniversary of the Closing Date; and
(xv) a UK Quota Share Retrocession Agreement
between St. Xxxx Re UK and Platinum US, substantially in the form of
EXHIBIT 3.01(a)(xv), pursuant to which Platinum US will reinsure 100%
of the liabilities of St. Xxxx Re UK under the non-traditional (Form
B-1) reinsurance contracts written by St. Xxxx Re UK incepting on or
after January 1, 2002, as specified therein, until the earlier of
either (A) such time as Platinum UK is duly licensed by the U.K.
Financial Services Authority to write reinsurance business or (B) the
first anniversary of the Closing Date.
(b) (i) a Master Services Agreement substantially in
the form of EXHIBIT 3.01(b)(i) between St. Xxxx and the Company
pursuant to which St. Xxxx and/or its Post-Closing Subsidiaries other
than St. Xxxx Re UK will provide the Company and its Subsidiaries other
than Platinum UK the Transition Services (as defined in the Master
Services Agreement), including, without limitation, payroll
administration, human resources management and electronic systems
support, in each case as specified in the applicable service schedule
to the Master Services Agreement, for a specified period of time;
(ii) a UK Master Services Agreement substantially
in the form of EXHIBIT 3.01(b)(ii) between St. Xxxx Re UK and Platinum
UK pursuant to which St. Xxxx
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Re UK will provide Platinum UK with the UK Transition Services (as
defined in the UK Master Services Agreement), including, without
limitation, payroll administration, human resources management and
electronic systems support, in each case as specified in the applicable
service schedule to the UK Master Services Agreement, for a specified
period of time;
(c) (i) a Run-off Services Agreement substantially
in the form of EXHIBIT 3.01(c)(i), between Fire and Marine and Platinum
US pursuant to which the Company and/or its Post-Closing Subsidiaries
other than Platinum UK will provide certain services (the "RUN-OFF
SERVICES") to St. Xxxx and/or its Post-Closing Subsidiaries other than
St. Xxxx Re UK for a specified period of time;
(ii) a UK Run-off Services Agreement
substantially in the form of Exhibit 3.01(c)(ii), between St. Xxxx Re
UK and Platinum UK pursuant to which Platinum UK will provide Run-off
Services to St. Xxxx Re UK for a specified period of time;
(d) an Option Agreement, substantially in the form of
EXHIBIT 3.01(d), between St. Xxxx or a St. Xxxx Designee and the Company,
pursuant to which St. Xxxx or such St. Xxxx Designee will, under the terms and
conditions specified therein, have the right to purchase up to 6,000,000
additional Common Shares of the Company;
(e) one or more Transitional Trademark License
Agreements, substantially in the form of EXHIBIT 3.01(e), between St. Xxxx and
its relevant Subsidiaries (the "ST. XXXX LICENSORS") and the Company and its
Post-Closing Subsidiaries pursuant to which the St. Xxxx Licensors will grant to
the Company and/or its Post-Closing Subsidiaries licenses to use service marks,
trademarks and other intellectual property rights specified in such agreement
for a specified period of time;
(f) a Registration Rights Agreement, substantially in the
form of EXHIBIT 3.01(f), between St. Xxxx or a St. Xxxx Designee and the Company
with respect to all Common Shares of the Company held by or optioned to St. Xxxx
or such St. Xxxx Designee as of the Closing Date;
(g) an Employee Benefits and Compensation Matters
Agreement (which shall go into effect on the Business Day immediately following
the Closing Date), substantially in the form of EXHIBIT 3.01(g)(i), between St.
Xxxx and Platinum US to allocate assets, liabilities and responsibilities
relating to the hiring of certain employees of St. Xxxx and its Subsidiaries
other than St. Xxxx Re UK by the Company and its Post-Closing Subsidiaries other
than Platinum UK (the "NEWLY HIRED EMPLOYEES") and the continued participation
by the Newly Hired Employees in the benefit plans, that St. Xxxx currently
sponsors and maintains;
(h) Underwriting Management Agreements, substantially in
the form of EXHIBIT 3.01(h)(i) pursuant to which the Company or one of its
Post-Closing Subsidiaries will provide to Fire and Marine certain underwriting
services, as specified in the Underwriting Management Agreements; and
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(i) the following sublease agreements or assignments of
lease (collectively, the "SUBLEASE AGREEMENTS"):
(i) an Assignment and Assumption Agreement
(Miami), substantially in the form of EXHIBIT 3.01(i)(i), among
Metropolitan Life Insurance Company, St. Xxxx Re and Platinum US;
(ii) an Assignment and Assumption Agreement
(Chicago), substantially in the form of EXHIBIT 3.01(i)(ii), among
WHCHC Real Estate Limited Partnership, St. Xxxx Re and Platinum US; and
(iii) a Sublease Agreement (New York), substantially
in the form of EXHIBIT 3.01(i)(iii), between St. Xxxx Reinsurance
Management Corporation and Platinum US.
(j) a U.K. Business Transfer Agreement, substantially in
the form of EXHIBIT 3.01(j), among St. Xxxx Re UK, Platinum UK and St Xxxx
Management Limited, pursuant to which St. Xxxx Re UK will transfer the assets
specified therein to Platinum UK.
(k) a U.K. Underwriting Agency and Underwriting
Management Agreement, substantially in the form of EXHIBIT 3.01(k), between St.
Xxxx Re UK and Platinum UK, pursuant to which Platinum UK will act as the
underwriting agent for St. Xxxx Re UK in the U.K. until the earlier of either
(A) such time as Platinum UK is authorized by the U.K. Financial Services
Authority to write reinsurance business or (B) December 31, 2002, and after such
time pursuant to which Platinum UK will provide certain underwriting services to
St. Xxxx Re UK.
SECTION 3.02 PAYMENT OF EXPENSES. (a) The Company shall pay
(or, to the extent incurred by and paid for by St. Xxxx or any Affiliate thereof
prior to the Closing Date, shall, on the Closing Date, and, if incurred on or
following the Closing Date, promptly reimburse St. Xxxx and any such Affiliate
for any and all amounts so paid) the costs, fees, disbursements and expenses set
forth in SCHEDULE 3.02(a).
(b) St. Xxxx shall pay (or, to the extent incurred by and
paid for by the Company or any of its Post-Closing Subsidiaries on or prior to
the Closing Date shall, on the Closing Date, and, if incurred following the
Closing Date, promptly reimburse the Company and any such Post-Closing
Subsidiary for any and all amounts so paid) the costs, fees, disbursements and
expenses set forth in SCHEDULE 3.02(b).
SECTION 3.03 CLOSING. Subject to the terms and conditions of
this Agreement, all transactions contemplated by this Agreement shall be
consummated at a closing (the "CLOSING") to be held at the offices of Xxxxxxxx &
Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx at 9:00 A.M., New York time, on
the date of the delivery of the Firm Public Offering Shares or at such other
place (outside the United Kingdom) or at such other time or on such other date
as St. Xxxx and the Company may mutually agree upon in writing (the day on which
the Closing takes place being the "CLOSING DATE"); PROVIDED, HOWEVER, that
except for the Quota Share Retrocession Agreements and the Employee Benefits and
Compensation Matters Agreement, the Ancillary Agreements shall become effective
immediately after delivery of the Firm Public Offering Shares and Firm St. Xxxx
Shares and the Quota Share Retrocession
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Agreements and the Employee Benefits and Compensation Matters Agreement shall
become effective at 12:01 A.M. on the Business Day immediately following the
Closing Date or, if later, on October 1, 2002.
SECTION 3.04 CLOSING DELIVERIES BY ST. XXXX. At the Closing,
St. Xxxx shall deliver and shall cause its Post-Closing Subsidiaries to deliver
to the Company:
(a) executed copies of all Ancillary Agreements;
(b) executed copies of the Bills of Sale substantially in
the form of EXHIBIT 3.04(b) and such other instruments, in form and substance
reasonably satisfactory to the Company, as may be reasonably requested by the
Company to transfer, convey and assign the Transferred Assets (including,
without limitation, the Platinum US Shares and the Employment Agreements) to the
Company or its designee or evidence of such transfer on the public records;
(c) a certificate representing all of the Platinum US
Shares, duly endorsed or accompanied by stock powers (in form reasonably
satisfactory to the Company) in favor of Platinum Regency; and
(d) the certificate specified in Section 9.03(c);
(e) evidence reasonably satisfactory to the Company that
all consents and approvals as set forth on SCHEDULE 6.02(b) have been obtained
and are in full force and effect;
(f) the balance sheet of Platinum US dated May 31, 2002,
which shall have been prepared in accordance with accounting practices
prescribed or permitted for insurance companies by the Maryland insurance
regulatory authorities, which have been applied consistent with the financial
statements of past periods and shall in all material respects fairly present the
financial condition of Platinum US as of its date;
(g) a statement setting forth the amounts remitted to and
from Platinum US pursuant to Section 4.01(a); and
(h) the Cash Contribution.
SECTION 3.05 CLOSING DELIVERIES BY THE COMPANY. At the
Closing, the Company shall deliver to St. Xxxx:
(a) executed copies of all Ancillary Agreements;
(b) certificates representing the St. Xxxx Shares
acquired by St. Xxxx or a St. Xxxx Designee, registered in the name of St. Xxxx
or the appropriate St. Xxxx Designees;
(c) the St. Xxxx Investment Opinion;
(d) evidence reasonably satisfactory to St. Xxxx that all
consents and approvals as set forth in SCHEDULE 6.02(b) have been obtained and
are in full force and effect;
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(e) the certificate specified in Section 9.02(c); and
(f) a receipt evidencing receipt of the Cash
Contribution.
SECTION 3.06 SUBSEQUENT EXERCISE OF OVER-ALLOTMENT OPTION. (a)
If the Underwriters exercise their Over-Allotment Option at any time after the
Closing Date, a second closing (the "SECOND CLOSING") will be held at the
offices of Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, at 9:00
A.M., New York time, on the date of the delivery of the Optional Public Offering
Shares or at such other place (outside the United Kingdom) or such other time or
on such other date as St. Xxxx and the Company may agree upon in writing (the
day on which the Second Closing takes place being the "SECOND CLOSING DATE").
(b) On the Second Closing Date, the Company shall deliver
to St. Xxxx (i) a certificate representing the Optional St. Xxxx Shares acquired
by St. Xxxx or one or more St. Xxxx Designees, registered in the name of St.
Xxxx or the appropriate St. Xxxx Designees, (ii) an opinion with respect to the
Optional St. Xxxx Shares in form and substance identical to the St. Xxxx
Investment Opinion and (iii) a bring-down certificate in form and substance
identical to the certificate specified in Section 9.02(c).
(c) On the Second Closing Date, St. Xxxx shall deliver to
the Company (i) a bring-down certificate in form and substance identical to the
certificate specified in Section 9.03(c) and (ii) Optional Cash Contribution.
ARTICLE IV
SEPARATION
SECTION 4.01 SETTLEMENT OF INTERCOMPANY ACCOUNTS. (a) Shortly
prior to the Closing Date, Platinum US shall remit to St. Xxxx and any
Post-Closing Subsidiaries of St. Xxxx, as applicable, all amounts estimated to
be owing as of the Closing Date by Platinum US to St. Xxxx or such Post-Closing
Subsidiaries, and St. Xxxx and all Post-Closing Subsidiaries of St. Xxxx, as
applicable, shall remit to Platinum US all amounts estimated to be owing as of
the Closing Date by St. Xxxx or such Post-Closing Subsidiaries of St. Xxxx to
Platinum US.
(a) As soon as reasonably practicable, but in no event later
than 45 days following the Closing Date, St. Xxxx covenants that it shall
prepare and deliver to the Company a balance sheet as of the Closing Date (the
"CLOSING BALANCE SHEET"). The Closing Balance Sheet shall be prepared in
accordance with accounting practices prescribed or permitted for insurance
companies by the Maryland insurance regulatory authorities, which have been
applied consistent with the financial statements of past periods, including the
May 31, 2002 balance sheet delivered pursuant to Section 3.04(f) and shall in
all material respects fairly present the financial condition of Platinum US as
of its date.
SECTION 4.02 REMOVAL OF PLATINUM US FROM INTERCOMPANY
AGREEMENTS AND REPRESENTATION. Except as contemplated herein, effective as of
the Closing Date, all agreements between or among St. Xxxx and its Post-Closing
Subsidiaries, on the one hand, and Platinum US, on the other hand, shall
terminate as to Platinum US, and Platinum US shall cease being a party to any of
the agreements specified on SCHEDULE 4.02. After the Closing Date, Platinum US
shall
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not have any liability under any such agreement to St. Xxxx or any Post-Closing
Subsidiary of St. Xxxx and neither St. Xxxx nor any Post-Closing Subsidiary of
St. Xxxx shall have any liability under any such agreement to Platinum US. St.
Xxxx represents that such agreements are the only agreements that it or any St.
Xxxx Subsidiary has with Platinum US.
SECTION 4.03 DISCONTINUING OF INSURANCE COVERAGE. Effective as
of the Closing Date, Platinum US will cease to be covered under any insurance
policy covering St. Xxxx and any of its affiliates, including directors' &
officers' and errors & omissions insurance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF ST. XXXX
St. Xxxx represents and warrants to the Company, as to itself,
each of Fire and Marine, Platinum US, Mountain Ridge, St. Xxxx Re (UK), each St.
Xxxx Designee and each St. Xxxx Licensor (such subsidiaries, the "ST. XXXX
PRE-CLOSING SUBSIDIARIES"), that the statements contained in this Article V are
true and correct as of the date of this Agreement and will be true and correct
as of the Closing Date:
SECTION 5.01 ORGANIZATION, AUTHORITY AND QUALIFICATION.
(a) Each of St. Xxxx and the St. Xxxx Pre-Closing
Subsidiaries is duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and in good standing in all
jurisdictions in which the failure to qualify or be in good standing could
materially adversely affect the consummation or the validity of the transactions
provided for in this Agreement or any of the Ancillary Agreements.
(b) St. Xxxx has full corporate power and authority and
has taken all corporate action necessary to execute and deliver this Agreement
and will have taken all corporate action necessary to execute and deliver the
Ancillary Agreements to which it is a party and to perform its obligations
hereunder and thereunder. This Agreement has been, and each of the Ancillary
Agreements to which St. Xxxx is a party will be, duly authorized, executed and
delivered by St. Xxxx; and, assuming due authorization, execution and delivery
by all other parties to such agreement, each of this Agreement and such
Ancillary Agreements constitutes or will constitute, as the case may be, the
valid and legally binding obligation of St. Xxxx, enforceable against St. Xxxx
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles,
except that no representation or warranty is made regarding the indemnification
and contribution provisions of this Agreement or of the Registration Rights
Agreement.
(c) Each of the St. Xxxx Pre-Closing Subsidiaries has
full corporate power and authority and will have taken all corporate action
necessary to execute and deliver each of the Ancillary Agreements to which it is
a party and to perform its obligations thereunder. Each of the Ancillary
Agreements to which any of the St. Xxxx Pre-Closing Subsidiaries is a party will
be duly authorized, executed and delivered by the appropriate St. Xxxx
Pre-Closing Subsidiary and,
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assuming due authorization, execution and delivery by all other parties to such
agreement, and, in the case of Platinum US, assuming also that the Maryland
Insurance Commission shall have issued an order permitting Platinum US to
underwrite accident and health insurance prior to completion of the Public
Offering, will constitute the valid and legally binding obligation of such St.
Xxxx Pre-Closing Subsidiary, enforceable against such St. Xxxx Pre-Closing
Subsidiary in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
SECTION 5.02 FINANCIAL AND CONVENTION STATEMENTS. The Annual
Convention Statements required to be filed by Platinum US for the years 2000 and
2001, and the Quarterly Convention Statements required to be filed by Platinum
US during the period January 1, 2002 to the date hereof, (i) have been duly
filed with the Maryland insurance regulatory authorities and with all other
insurance regulatory authorities as required, (ii) were prepared in accordance
with accounting practices prescribed or permitted for insurance companies by the
Maryland insurance regulatory authorities, which have been applied on a basis
consistent with the past periods, and (iii) present fairly, in accordance with
such practices, the statutory financial position of Platinum US as at the date
of, and the results of its operations for the period covered by, such Annual or
Quarterly Convention Statements.
SECTION 5.03 NO CONFLICT. The authorization, execution,
delivery and performance of this Agreement and the Ancillary Agreements by St.
Xxxx and the St. Xxxx Pre-Closing Subsidiaries, as applicable, do not and will
not:
(a) violate, conflict with or result in the breach of any
provision of the certificate of incorporation or by-laws (or similar
organizational documents) of St. Xxxx or the St. Xxxx Pre-Closing Subsidiaries,
(b) conflict with or violate in any material respect any
law or Governmental Order applicable to St. Xxxx or the St. Xxxx Pre-Closing
Subsidiaries or any of their respective assets, properties or businesses, or
(c) materially conflict with, result in any material
breach of, constitute a default (or event which with the giving of notice or
lapse of time, or both, would become a default) under, or require any
authorization from, or notification to, any Governmental Authority, or any
consent under, any note, bond, mortgage or indenture, contract, agreement,
lease, sublease, license, permit, franchise or other instrument or arrangement
to which St. Xxxx or any of the St. Xxxx Pre-Closing Subsidiaries is a party or
by which any of such assets or properties is bound or affected, which would have
a material adverse effect on the ability of St. Xxxx or any of the St. Xxxx
Pre-Closing Subsidiaries to consummate the transactions contemplated by this
Agreement or the Ancillary Agreements.
SECTION 5.04 TRANSFERRED ASSETS. (a) St. Xxxx, directly or
indirectly has, and at the Closing the Company or its designees will receive,
good and marketable title to all of the Transferred Assets (other than the Newly
Hired Employees and the Renewal Rights and the related information) except as
provided in SCHEDULE 5.04(a)(i), in each case free and clear of any Encumbrance,
except as set forth on SCHEDULE 5.04(a)(ii).
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(b) With respect to the Platinum US Shares, United States
Fidelity and Guaranty Company ("USF&G"), an indirect wholly owned Subsidiary of
St. Xxxx, has good and marketable title to the Platinum US Shares, free and
clear of any Encumbrances. Assuming Platinum Finance has the requisite power and
authority to be the lawful owner of the Platinum US Shares, upon delivery to
Platinum Finance at the Closing of certificates representing the Platinum US
Shares, duly endorsed by USF&G for transfer to Platinum Finance, good and
marketable title to the Platinum US Shares will pass to Platinum Finance, free
and clear of any Encumbrances, other than those arising from acts of the Company
or Platinum Finance. The Platinum US Shares constitute validly issued, fully
paid and non-assessable shares of the capital stock of Platinum US and are not
subject to any voting trust agreement or other contract, agreement, arrangement,
commitment or understanding, including any such agreement, arrangement,
commitment or understanding restricting or otherwise relating to the voting,
dividend rights or disposition of the Platinum US Shares and there are no
options, warrants or any other rights to acquire the Platinum US Shares are
outstanding.
SECTION 5.05 ST. XXXX INVESTMENT. (a) St. Xxxx represents and
warrants that (i) it is capable of evaluating the merits and risks of the
acquisition of the St. Xxxx Shares and the St. Xxxx Option, (ii) it is acquiring
the St. Xxxx Shares and the St. Xxxx Option for its own account, as principal,
(iii) it is acquiring the St. Xxxx Shares and the St. Xxxx Option for investment
and not with a view to the resale or distribution in a public offering of all or
any part of the St. Xxxx Shares or the St. Xxxx Option, and (iv) it has not
sought the advice of the Company with respect to the tax, accounting, legal or
other regulatory or investment issues relating to the St. Xxxx Shares or the St.
Xxxx Option it expects to acquire pursuant to the St. Xxxx Investment and has
relied only on the advice of its own legal counsel and other advisors.
(b) St. Xxxx acknowledges that (i) the sale of the St.
Xxxx Shares and the St. Xxxx Option and the Common Shares issuable upon exercise
of the St. Xxxx Option will not be registered under any U.S. federal or state
securities laws, (ii) the St. Xxxx Shares and the St. Xxxx Option will be
offered and sold in reliance upon the exemptions from registration provided by
the no-action letters regarding Black Box Incorporated (publicly available June
26, 1990) and Squadron, Ellenoff, Plesent & Xxxxxx (publicly available February
28, 1992), and applicable exemptions under state securities laws, and (iii) that
the certificates for the Common Shares and the St. Xxxx Option purchased
hereunder and the Common Shares issuable upon exercise of the St. Xxxx Option
will bear a legend noting that they may not be resold or transferred unless
registered under the Securities Act or pursuant to a valid exemption therefrom.
SECTION 5.06 TAXES.
(a) No material Tax liens with respect to the Transferred
Assets or assets of Platinum US have been filed.
(b) All material Tax Returns filed by or with respect to
Platinum US have been timely filed, and all such Tax Returns are true, correct
and complete in all material respects. Platinum US has timely paid (or there has
been paid on its behalf) all material Taxes that are due, or claimed or asserted
by any taxing authority to be due, from or with respect to it for the
Pre-Closing Periods.
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(c) Except as disclosed in SCHEDULE 5.06(c), there are no
outstanding agreements, waivers, or arrangements extending the statutory period
of limitation applicable to any claim for, or the period for the collection or
assessment of, Taxes due from or with respect to Platinum US for any taxable
period.
(d) Except as disclosed in SCHEDULE 5.06(d), Platinum US
is not a party to, is not bound by, and has no obligation under, any Tax
allocation or sharing agreement or similar contract or arrangement.
Notwithstanding any disclosure contained in the Schedules to the Agreement, St.
Xxxx represents and warrants that at the Closing Platinum US shall not be a
party to, be bound by or have any obligation under, any Tax allocation or
sharing agreement or similar contract or arrangement.
(e) Platinum US has materially complied with all
applicable laws, rules, and regulations relating to the payment and withholding
of Taxes and has timely withheld from employee wages and paid over to the proper
governmental authorities all material amounts required to be so withheld and
paid over.
(f) Except as disclosed in SCHEDULE 5.06(f), there is no
deficiency, claim, audit, examination, action, suit, proceeding or investigation
in progress or pending or, to the knowledge of Platinum US, threatened against
or with respect to Platinum US in respect of any Taxes.
(g) No claim has ever been made by any taxing authority
with respect to Platinum US in a jurisdiction where Platinum US does not file
Tax Returns that Platinum US is or may be subject to taxation by that
jurisdiction which has not been resolved.
(h) Except as disclosed in SCHEDULE 5.06(h), Platinum US
has not been a member of an affiliated group filing consolidated, combined or
unitary Tax Returns other than a group for which St. Xxxx was the common parent.
(i) Platinum US has not distributed the stock of any
corporation in a transaction satisfying the requirements of Section 355 of the
Code since April 16, 1997, and the stock of Platinum US has not been distributed
in a transaction satisfying the requirements of Section 355 of the Code since
April 16, 1997.
(j) Platinum US is not a party to any agreement, contract
or arrangements that could result, directly or indirectly, on account of the
transactions contemplated hereunder, separately or in the aggregate, in the
payment of any "excess parachute payments" within the meaning of Section 280G of
the Code, except for Platinum US's consulting contract with Xx. Xxxxxx.
(k) Between the date of this Agreement and the Closing
Date, without the prior written consent of the Company (such consent not to be
unreasonably withheld), Platinum US will not change any Tax accounting method or
change any material Tax election or settle or compromise any material Tax
liability.
(l) Platinum US has no Subsidiaries.
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SECTION 5.07 CONTRACTS OF PLATINUM US. Except for the
contracts listed on SCHEDULE 5.07, Platinum US is not party to any contract with
any Person other than St. Xxxx or a St. Xxxx Subsidiary.
SECTION 5.08 NO OTHER REPRESENTATIONS OR WARRANTIES. Except
for the representations and warranties contained in this Agreement and the
Ancillary Agreements, neither St. Xxxx nor any other Person makes any express or
implied representation or warranty on behalf of or with respect to St. Xxxx or
the Transferred Business, and St. Xxxx hereby disclaims any representation or
warranty not contained herein or therein.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants, as to itself and as to
its Post-Closing Subsidiaries except as to Platinum US, to St. Xxxx that the
statements contained in this Article VI are true and correct as of the date of
this Agreement and will be true and correct as of the Closing Date:
SECTION 6.01 ORGANIZATION, AUTHORITY AND QUALIFICATION.
(a) The Company and each of its Post-Closing Subsidiaries
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of incorporation, and in good standing in all jurisdictions in
which the failure to qualify or be in good standing could materially adversely
affect the consummation or the validity of the transactions provided for in this
Agreement.
(b) The Company has full corporate power and authority
and has taken all corporate action necessary to execute and deliver this
Agreement and will have taken all corporate action necessary to execute and
deliver the Ancillary Agreements to which it is a party and to perform its
obligations hereunder and thereunder. This Agreement has been, and each of the
Ancillary Agreements to which the Company is a party will be, duly authorized,
executed and delivered by the Company; and, assuming due authorization,
execution and delivery by all other parties to such agreement, each of this
Agreement and such Ancillary Agreements constitutes or will constitute, as the
case may be, the valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles, including the exercise of judicial discretion
in connection therewith except that no representation or warranty is made
regarding the indemnification and contribution provisions of this Agreement or
the Registration Rights Agreement.
(c) Each of the Company's Post-Closing Subsidiaries will
have full corporate power and authority and will have taken all corporate action
necessary to execute and deliver each of the Ancillary Agreements to which it is
a party and to perform its obligations thereunder. Each of the Ancillary
Agreements to which any of the Company's Post-Closing Subsidiaries is a party
will be duly authorized, executed and delivered by the appropriate Post-Closing
Subsidiary
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of the Company and, assuming due authorization, execution and delivery by all
other parties to such agreement, will constitute the valid and legally binding
obligation of such Post-Closing Subsidiary of the Company, enforceable against
such Post-Closing Subsidiary in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles, including the exercise of judicial discretion
in connection therewith.
SECTION 6.02 NO CONFLICT. The execution, delivery and
performance of this Agreement and the Ancillary Agreements by the Company and
its Post-Closing Subsidiaries, as applicable, do not and will not:
(a) violate, conflict with or result in the breach of any
provision of the certificate of incorporation, by-laws (or similar
organizational documents) of the Company and its Post-Closing Subsidiaries, as
applicable,
(b) conflict with or violate any law or Governmental
Order applicable to the Company or its Post-Closing Subsidiaries or any of their
respective assets, properties or businesses, except that the performance of this
Agreement and the execution, delivery and performance of certain of the
Ancillary Agreements by the Company and its Post-Closing Subsidiaries may not
occur until the regulatory approvals specified in SCHEDULE 6.02(b) are obtained,
or
(c) conflict with, result in any material breach of,
constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, or require any authorization from or
notification to, any Governmental Authority, or any consent under, any note,
bond, mortgage or indenture, contract, agreement, lease, sublease, license,
permit, franchise or other instrument or arrangement to which the Company and
its Post-Closing Subsidiaries, as applicable, are party or by which any of such
assets or properties is bound or affected, which would have a material adverse
effect on the ability of the Company or any of its Post-Closing Subsidiaries to
consummate the transactions contemplated by this Agreement except that the
performance of this Agreement and the execution, delivery and performance of
certain of the Ancillary Agreement by the Company and its Post-Closing
Subsidiaries may not occur until the regulatory approvals specified in SCHEDULE
6.02(b) are obtained.
SECTION 6.03 ST. XXXX INVESTMENT. (a) The Company represents
and warrants to St. Xxxx that, assuming St. Xxxx has the requisite power and
authority to be the lawful owner of the St. Xxxx Shares, upon issuance and
delivery to St. Xxxx or its designees at the Closing of certificates
representing the Firm St. Xxxx Shares and the Optional St. Xxxx Shares, as
applicable, (i) good and marketable title to such St. Xxxx Shares will pass to
St. Xxxx or its designees free and clear of any Encumbrances other than those
arising from acts of the Company or its Post-Closing Subsidiaries, and (ii) the
St. Xxxx Shares will constitute duly and validly issued, fully paid and
non-assessable shares of the capital stock of the Company.
(b) The Company acknowledges that (i) the sale of the St.
Xxxx Shares, the St. Xxxx Option and any Common Shares issuable upon exercise of
the St. Xxxx Shares will not be registered under any U.S. federal or state
securities laws, (ii) the St. Xxxx Shares and the St. Xxxx Option will be
offered and sold in reliance upon the exemptions from registration
-27-
provided by the no-action letters regarding Black Box Incorporated (publicly
available June 26, 1990) and Squadron, Ellenoff, Plesent & Xxxxxx (publicly
available February 28, 1992), and applicable exemptions under state securities
laws, and (iii) that the certificates for the Common Shares and St. Xxxx Option
purchased hereunder, and any Common Shares issued upon exercise of the St. Xxxx
Option, will bear a legend noting that they may not be resold or transferred
unless registered under the U.S. Securities Act of 1933 or pursuant to a valid
exemption therefrom.
SECTION 6.04 INTERNAL RETROCESSION AGREEMENTS. The Company
represents that it intends to cause each of Platinum US and Platinum UK to enter
into a Quota Share Retrocession Agreement between such subsidiary and Platinum
Bermuda, substantially in the form of EXHIBIT 6.04, pursuant to which Platinum
Bermuda will reinsure a portion of the reinsurance liabilities of such
subsidiary under all reinsurance contracts written by such subsidiary after the
Closing Date excluding business subject to the Quota Share Retrocession
Agreements.
SECTION 6.05 NO OTHER REPRESENTATIONS OR WARRANTIES. Except
for the representations and warranties contained in this Agreement and the
Ancillary Agreements, neither the Company nor any other Person make any express
or implied representation or warranty on behalf of or with respect to the
Company or any of the Post-Closing Subsidiaries, and the Company hereby
disclaims any representation or warranty not contained herein or therein.
ARTICLE VII
NON-COMPETITION; USE OF NAME;
ADMINISTRATION OF RUN-OFF
CONTRACTS; INSURANCE MATTERS
SECTION 7.01 NON-COMPETITION. (a) Except as set forth in this
Agreement or any of the Ancillary Agreements, for a period of two years
following the Closing Date (the "RESTRICTED PERIOD") neither St. Xxxx nor any of
its Post-Closing Subsidiaries nor any of their respective directors, officers or
agents may
(i) offer, issue, sell, refer or promote,
directly or indirectly, any contracts, treaties or agreements of
reinsurance of the same type as the Reinsurance Agreements or of the
same type as those for which St. Xxxx has granted Renewal Rights to the
Company provided that the Company or its Post-Closing Subsidiaries
continue to provide, during the Restricted Period, reinsurance coverage
of such types to third parties;
(ii) employ, offer to employ or solicit with a
view to employment any of the individuals listed or individuals holding
positions listed on SCHEDULE 7.01(a)(ii) to this Agreement; or
(iii) use or disclose to any Person other than the
Company or its Post-Closing Subsidiaries, any Transferred Business
Confidential Information except in connection with the administration
of (x) the Reinsurance Agreements, (y) the Run-Off Business or (z) any
retained Liabilities PROVIDED that St. Xxxx, its Post-Closing
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Subsidiaries and their respective directors, officers and agents will
disclose Transferred Business Confidential Information only in the
ordinary course of business, consistent with past practice including in
connection with resolving claims and the purchase of retrocessional
coverage and PROVIDED, FURTHER, that St. Xxxx, its Post-Closing
Subsidiaries and their respective directors, officers and agents shall
use reasonable efforts to avoid providing Transferred Business
Confidential Information to a competitor of the Company under
circumstances reasonably likely to materially impair the value of the
Renewal Rights;
PROVIDED that, in the case of Transferred Business Confidential Information that
relates to the Reinsurance Agreements, the Restricted Period shall be
indefinite.
(b) Notwithstanding any other provision of this Section
7.01 to the contrary, neither St. Xxxx nor any of its Post-Closing Subsidiaries
is prohibited from:
(i) engaging in any line of business in which it
is engaged immediately after the completion of the Public Offering and
for which Renewal Rights were not transferred hereunder, including,
without limitation, the administration of reinsurance contracts with
inception dates prior to January 1, 2002 (the "Run-off Business") and
the Reinsurance Agreements (but not including any renewals thereof),
purchasing reinsurance for its own account, reinsurance business
written through St. Paul's Discover Re operation and Lloyd's of London
operation and property catastrophe facultative reinsurance business
written by St. Paul's CATRisk Property division;
(ii) acquiring any Person or, subject to the
limitation in (iii) below, any interest in any Person engaged in any
line of business except for an acquisition of an interest of more than
49% of any Person that generated 50% or more of its gross revenues,
excluding investment income and realized investment gains and losses,
in its most recent fiscal year for which financial statements are
available, by writing property or casualty reinsurance (a "PERMITTED
ACQUIREE"), provided that any Permitted Acquiree may not use any marks,
designs, logos, slogans, names, words or letters which include the
words "St. Xxxx", "USF&G" or "F&G" or those that are suggestive or,
derivative thereof, or any logo or xxxx identified with "St. Xxxx",
"USF&G" or "F&G" (except as may be required by law) in connection with
its reinsurance business, if any, PROVIDED FURTHER, HOWEVER, that St.
Xxxx and any of its Post-Closing Subsidiaries may acquire an interest
of more than 49% of a Person that is not a Permitted Acquiree if St.
Xxxx or such Post-Closing Subsidiary promptly divests the property or
casualty reinsurance operations of such Person; or
(iii) soliciting, offering, issuing, selling,
purchasing or referring any contracts of reinsurance of any type to,
from or with any of its Affiliates or engaging in any reinsurance
activities in connection with the Run-off Business (other than renewals
thereof) or with finite business which is either covered by a Quota
Share Retrocession Agreement or which the Company and its Post-Closing
Subsidiaries declines to reinsure.
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(c) During the Restricted Period neither St. Xxxx nor any
of its Post-Closing Subsidiaries shall sponsor or assist, directly or
indirectly, in the sponsorship of a newly formed property or casualty reinsurer
for so long as St. Xxxx continues to own 10% or more of the outstanding Common
Shares.
(d) Section 7.01(a)(i) and (ii) shall not be binding upon
a Post-Closing Subsidiary of St. Xxxx after the time such Person ceases to be a
Post-Closing Subsidiary of St. Xxxx. For avoidance of doubt, Section 7.01(a)
also does not apply to any Person which on or after the Closing Date becomes an
Affiliate (other than a Post-Closing Subsidiary) of St. Xxxx, including any
Person that acquires all or substantially all of the capital stock or assets of
St. Xxxx through merger, consolidation, tender offer, acquisition of assets or
otherwise, PROVIDED, HOWEVER, that Section 7.01(a)(ii) and (iii) shall apply to
such Person.
(e) Transferred Business Confidential Information shall
not include information relating to the Transferred Business which is or becomes
generally known on a non-confidential basis provided that the source of such
information was not bound by a confidentiality agreement or other obligation of
confidentiality. If St. Xxxx, any of its Post-Closing Subsidiaries or any of
their respective directors, officers or agents or any Affiliate of St. Xxxx is
legally requested or required under an order or subpoena issued by a court,
administrative agency or arbitration panel (through oral examination,
interrogatories, requests for information or documents, civil investigation
demand or other legal, administrative or arbitration processes) to disclose any
Transferred Business Confidential Information, St. Xxxx shall provide the
Company with prompt written notice of the request, requirement, subpoena or
order to permit the Company (if it so elects) to seek an appropriate protective
order preventing or limiting disclosure. If the Company seeks such an order or
takes other steps to avoid or limit disclosure, St. Xxxx shall cooperate with
the Company at the Company's expense. If, in the absence of such protective
order, St. Xxxx, is compelled to disclose any Transferred Business Confidential
Information, St. Xxxx xxx disclose such Transferred Business Confidential
Information without liability hereunder.
(f) St. Xxxx and its Post-Closing Subsidiaries shall
treat any Transferred Business Confidential Information with the same degree of
care with which it treats its own confidential information.
(g) The Company and St. Xxxx agree that money damages
would not be a sufficient remedy for any breach of this Section 7.01 by St. Xxxx
or any of its Post-Closing Subsidiaries or any of its or such Post-Closing
Subsidiaries' directors, officers or agents, and that, in addition to all other
remedies, the Company shall be entitled to specific performance and injunctive
or other equitable relief as a remedy for any such breach.
SECTION 7.02 USE OF NAMES; NON-DISPARAGEMENT. (a) Commencing
on the Closing Date, neither the Company nor any of its Post-Closing
Subsidiaries and Affiliates may use any marks, designs, logos, slogans, names,
words or letters which include the words "United States Fidelity and Guaranty",
"St. Xxxx", "Fire and Marine" or those that are suggestive or derivative
thereof, except (i) as may be required by Law, (ii) for the purposes of
historical identification in materials not designed as advertising or
solicitation, (iii) as provided under the
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Transitional Trademark License Agreement, and (iv) pursuant to the Underwriting
Management Agreement and the UK Underwriting Management Agreement.
(b) The Company shall not use and shall cause its
Post-Closing Subsidiaries to refrain from using any printed materials or other
means of communication which state, suggest or imply any affiliation with St.
Xxxx or any of its Subsidiaries following the Closing other than references to
St. Paul's ownership of the St. Xxxx Shares or to this Agreement, the
Reinsurance Agreements or the Ancillary Agreements or the subject matter
thereof.
(c) The Company and St. Xxxx each agree that neither it
nor any of its Subsidiaries shall make any statement that would reasonably be
viewed as intended to be disparaging of the business, reputation or good name of
the other.
SECTION 7.03 STANDARD FOR ADMINISTRATION OF RUN-OFF BUSINESS.
St. Xxxx shall cause its Post-Closing Subsidiaries to administer the Run-off
Business at levels of care and attention and with operating procedures that are
consistent with, the practices of St. Xxxx in respect of other business of St.
Xxxx. St. Xxxx shall maintain all licenses and authorization required for it to
administer the Run-off Business.
SECTION 7.04 QUOTATIONS FOR CERTAIN INSURANCE COVERAGE. St.
Xxxx agrees that one or more of its Post-Closing Subsidiaries shall provide
quotations to the Company and its Subsidiaries, at normal market rates for
similarly situated Persons, for workers compensation, general liability and
property insurance coverages for the period commencing on the Closing Date and
ending December 31, 2003.
ARTICLE VIII
TAX MATTERS
SECTION 8.01 TAXES OF PLATINUM US. (a) St. Xxxx shall be
responsible for, shall pay or cause to be paid, and shall indemnify the Company
and each of its Post-Closing Subsidiaries against any and all Pre-Closing Taxes.
"PRE CLOSING TAXES" shall mean any and all Taxes (i) imposed on the St. Xxxx
Group (other than Platinum US) for any taxable year, (ii) that relate to
Platinum US or for which Platinum US could be liable and that in both cases are
for taxable periods or portions thereof ending on or before the Closing Date, or
(iii) to the extent not covered by clauses (i) and (ii) above, directly related
to the Transferred Assets and arising in taxable periods or portions thereof
ending on or before the Closing Date ("PRE-CLOSING PERIODS"); PROVIDED, HOWEVER,
that in each case under clauses (i), (ii) and (iii) above Taxes shall not
include Taxes covered by Section 8.02. In the case of Taxes attributable to
taxable periods beginning on or before and ending after the Closing Date
("STRADDLE PERIODS"), if any, the Taxes for the Pre-Closing Period shall be
computed as if such taxable period ended on the date of the Closing. Not later
than five Business Days before the due date for the payment (including in
connection with estimated payments) of any Pre-Closing Taxes, St. Xxxx shall pay
to the Company or any of its Post-Closing Subsidiaries an amount equal to any
such Pre-Closing Taxes which are payable by the Company or any of its
Post-Closing Subsidiaries.
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(b) The Company shall be responsible for (i) any and all
Taxes of Platinum US that relate to Platinum US or for which Platinum US could
be liable other than Pre-Closing Taxes and (ii) any and all Taxes directly
related to the Transferred Assets and arising in taxable periods or portions
thereof beginning on or after the Closing Date. To the extent that any Taxes
other than Pre-Closing Taxes have been pre-paid on or before the Closing, the
Company shall pay to St. Xxxx the amount of such prepaid Taxes that do not
constitute Pre-Closing Taxes.
(c) St. Xxxx shall include the income of Platinum US for
the Pre-Closing Period in St. Paul's federal consolidated Tax Returns and any
state consolidated, combined or unitary Tax Returns that are required and that
include (i) Platinum US and (ii) any other member of St. Paul's affiliated group
other than Platinum US (the "CONSOLIDATED RETURNS"), and shall file and be
responsible for remitting all Taxes reflected on such Consolidated Returns. St.
Xxxx shall file or cause to be filed all Tax Returns required to be filed by or
with respect to Platinum US on or before the Closing Date and shall pay all
Taxes due with respect thereto. All items relating to Platinum US and included
in Tax Returns of or with respect to Platinum US for Pre-Closing Periods
(including the Platinum US pro forma with respect to Consolidated Returns)
prepared by St. Xxxx pursuant to this Section 8.01 shall be reflected in a
manner consistent with past practices. St. Xxxx shall provide to the Company, at
least 10 days prior to the due date (including extensions) for the filing of St.
Paul's federal consolidated tax return for the taxable year 2002, a copy of the
2002 pro forma federal income tax return of Platinum US prepared consistent with
past practice. St. Xxxx shall not amend a pro forma income tax return of
Platinum US for a Pre-Closing Period in which Platinum US was included in the
federal consolidated income tax return of St. Xxxx or in any other consolidated,
combined or group tax return with St. Xxxx or any of its Affiliates, in a manner
which causes an increase in Taxes of Platinum US for a period ending after the
Closing, without the consent of the Company, which shall not be unreasonably
withheld. The Company shall file or cause to be filed all other Tax Returns
required to be filed by or with respect to Platinum US. With respect to Tax
Returns for Straddle Periods, such Tax Returns will be duly and timely filed by
the Company, and the Company will use its commercially reasonable best efforts
to assure that such Tax Returns will be correct, accurate and complete in all
material respects. The Company shall furnish a completed copy of such Tax
Returns to St. Xxxx for St. Paul's approval (not to be unreasonably withheld or
delayed) within a reasonable time prior to the due date of such returns. Except
as required by applicable law, the Company shall not take a position with
respect to any item on any Tax Return of Platinum US for any Straddle Period
which it is notified in writing by St. Xxxx is inconsistent with the position
taken with respect to such item on a prior Tax Return or, if inconsistent, will
obtain St. Paul's prior written consent which shall not be unreasonably
withheld.
(d) Any refunds of Taxes with respect to Platinum US paid
for any period ending on or before the Closing Date (treating such date as the
end of a short taxable year for this purpose) shall be for the account of St.
Xxxx. The Company shall, if St. Xxxx so requests and at St. Paul's expense,
cause the relevant entity (the Company, Platinum US or any successor) to file
for and obtain any refunds to which St. Xxxx is entitled hereunder, including
through the prosecution of any administrative or judicial proceeding which St.
Xxxx, in its sole and absolute discretion, chooses to direct such entity to
pursue. The Company shall permit St. Xxxx to control (at St. Paul's expense) the
prosecution of any such refund claimed, and when deemed appropriate by St. Xxxx,
shall cause the relevant entity to authorize by appropriate power of attorney
such person as St. Xxxx shall designate to represent such entity with respect to
such refund claimed.
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Without imposing any duty of investigation on the Company, the Company
shall, and shall cause Platinum US to, notify St. Xxxx of the existence of any
facts known to the Company that would constitute a reasonable basis for claiming
a refund of Taxes to which St. Xxxx is entitled hereunder. The Company shall
forward to St. Xxxx any such refund promptly after the refund is received.
SECTION 8.02 CONVEYANCE TAXES. The Company and St. Xxxx shall
each be severally liable for one half of any real property transfer or gains,
sales, use, transfer, value added, stock transfer, and stamp taxes, any
transfer, recording, registration, and other fees and any similar Taxes which
become payable in connection with the transactions contemplated by this
Agreement. With the cooperation of St. Xxxx, the Company shall file such
applications and documents as shall permit any such Tax to be assessed and paid
on or prior to the Closing Date in accordance with any available pre-sale filing
procedure. St. Xxxx shall execute and deliver all instruments and certificates
necessary to enable the Company to comply with the foregoing. The Company shall
complete and execute a resale or other exemption certificate with respect to the
inventory items sold hereunder, and shall provide St. Xxxx with executed copies
thereof.
SECTION 8.03 TAX PROCEEDINGS. (a) The Company shall promptly
notify St. Xxxx in writing upon receipt by the Company or any of its Affiliates,
including Platinum US, of notice of any pending or threatened audit, assessment,
or judicial or administrative proceeding involving Taxes ("TAX PROCEEDING") with
respect to Platinum US for which St. Xxxx would be required to indemnify the
Company pursuant to Section 8.01, provided that the failure of the Company to
give such notice shall not relieve St. Xxxx of its indemnification obligation
under Section 8.01, except to the extent St. Xxxx is materially prejudiced
thereby.
(b) St. Xxxx shall have the right to assume sole control
over a Tax Proceeding to the extent it relates to Pre-Closing Taxes which may be
the subject of indemnification by St. Xxxx pursuant to Section 8.01 and to
employ counsel of its choice at its expense. St. Xxxx shall not compromise or
settle any such Tax Proceeding without the prior written consent of the Company,
which consent shall not be unreasonably withheld. If St. Xxxx shall not assume
the defense of such Tax Proceeding, then the Company may assume sole control
over such Tax Proceeding, without relieving St. Xxxx of its indemnification
obligation under Section 8.01, provided that St. Xxxx xxx participate in the
defense at its own expense.
(c) St. Xxxx shall have the right to participate in, but
not control, at its own expense, the defense of any Tax Proceeding with respect
to a Straddle Period which may be the subject of indemnification by St. Xxxx
pursuant to Section 8.01(a) and, with the written consent of the Company, and at
St. Paul's sole expense, may assume the entire defense of such Tax Proceeding.
Neither party may agree to settle any such Tax Proceeding without the prior
written consent of the other party.
SECTION 8.04 ALLOCATION OF CONSIDERATION. St. Xxxx shall
deliver to the Company a statement setting forth the allocation of the aggregate
consideration received by St. Xxxx under this Agreement within 30 days of the
receipt by St. Xxxx of a third party appraisal of the Transferred Assets. Such
allocation shall be determined in accordance with Section 1060 of the Code and
the Regulations promulgated thereunder, to the extent applicable. The Company,
St. Xxxx and the Parties each agree to prepare and file all Tax Returns in
respect of
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all affected Taxable Periods in a manner consistent with the allocation
statement prepared by St. Xxxx.
SECTION 8.05 SECTION 197 ELECTION. Upon the request of the
Company and to the extent applicable, St. Xxxx agrees to elect under Section
197(f)(9)(B)(ii) of the Code to (i) recognize gain on the disposition of
goodwill, going concern value and any other Section 197 intangible (as defined
in Section 197(d) of the Code), if any, for which depreciation and amortization
would not have been allowable but for Section 197, if such asset was held or
used by St Xxxx or any of its Subsidiaries at any time on or after July 25, 1991
and on or before August 10, 1993, and (ii) pay tax on such gain in accordance
with Section 197(f)(9)(B)(ii)(II) of the Code to the extent that such election
is necessary to enable the Company or any of its affiliates to claim
amortization deductions with respect to such asset under Section 197 of the
Code; PROVIDED, HOWEVER, that St. Xxxx shall not be required to make such
election and/or comply with clause (ii) above if it determines in its sole
discretion that the election, or the requirements of clause (ii), would cause a
detriment to St. Xxxx or any of its Subsidiaries.
SECTION 8.06 INDEMNIFICATION AS ADJUSTMENT. The parties agree
to treat any indemnification payments made pursuant to Section 8.01 or Section
10.01 hereunder as an adjustment to the consideration given in exchange for the
Transferred Assets.
ARTICLE IX
CONDITIONS TO CLOSING
SECTION 9.01 CONDITIONS TO OBLIGATIONS OF ST. XXXX AND THE
COMPANY. The obligations of St. Xxxx and the Company to consummate the
transactions contemplated by this Agreement are subject to the fulfillment, at
or prior to the Closing, of each of the following conditions:
(a) the Firm Public Offering Shares shall have been
delivered;
(b) no Action shall have been commenced by any
Governmental Authority, seeking to restrain or materially and adversely alter
the transactions contemplated by this Agreement which, in the reasonable, good
faith determination of either St. Xxxx or the Company, is likely to render it
impossible or unlawful to consummate such transactions;
(c) the parties hereto, or their Subsidiaries, as
applicable, shall have executed and delivered to each other each of the
Ancillary Agreements to which they are a party; and
(d) all consents, approvals, authorizations,
registrations, licenses or qualifications set forth on SCHEDULE 6.02(b) with any
court or governmental authority required for the consummation of the
transactions contemplated by this Agreement or any of the Ancillary Agreements
shall have been obtained, shall not contain limitations or conditions which
would materially adversely affect the ability of the Company and its
Post-Closing Subsidiaries to conduct the Transferred Business after the Closing,
and shall be in full force and effect.
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SECTION 9.02 CONDITIONS TO OBLIGATIONS OF ST. XXXX. The
obligation of St. Xxxx to consummate the transactions contemplated by this
Agreement is subject to the fulfillment, at or prior to the Closing, of each of
the following additional conditions:
(a) the representations and warranties of the Company
contained in this Agreement shall be true and correct, as of the date hereof and
as of the Closing Date, with the same force and effect as if made as of the
Closing Date;
(b) the covenants and agreements contained in this
Agreement and the Ancillary Agreements to be complied with by the Company and
its Post-Closing Subsidiaries (other than Platinum US) on or before the Closing
Date shall have been complied with in all material respects;
(c) St. Xxxx shall have received a certificate from the
Company to the effect of Sections 9.02(a) and (b) signed by the President and
Chief Executive Officer and the Chief Financial Officer of the Company;
(d) St. Xxxx shall have received an opinion in form and
substance satisfactory to St. Xxxx (the "ST. XXXX INVESTMENT OPINIONS") from
Xxxxxxx, Xxxx & Xxxxxxx, Bermuda counsel to St. Xxxx, as to the due
authorization, valid issuance and non-assessability of the St. Xxxx Shares, as
well as from Xxxxxxxx & Xxxxxxxx as to the exemption from the registration
requirements of the Securities Act of the Firm St. Xxxx Shares and, as a
condition to the Second Closing, St. Xxxx Investment Opinions in respect of the
Optional St. Xxxx Shares; and
(e) St. Xxxx shall have received signed releases from
Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxxx, Xxxxxxx
X. Xxxxxxxxxxx and other individuals with whom St. Xxxx Re shall have entered
into employment agreements following the date hereof in the form attached as
SCHEDULE 9.02(e).
(f) all of the deliveries required to be made by the
Company at the Closing pursuant to Section 3.05 shall have been made.
SECTION 9.03 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The
obligation of the Company to consummate the transactions contemplated by this
Agreement is subject to the fulfillment, at or prior to the Closing, of each of
the following additional conditions:
(a) The representations and warranties of St. Xxxx contained
in this Agreement shall be true and correct as of the Closing Date, with the
same force and effect as if made as of the Closing Date;
(b) the covenants and agreements contained in this Agreement
and the Ancillary Agreements to be complied with by St. Xxxx and its Pre-Closing
Subsidiaries on or before the Closing Date shall have been complied with in all
material respects;
(c) the Company shall have received a certificate from
St. Xxxx to the effect of Sections 9.03(a) and (b) signed by duly authorized
officers thereof;
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(d) all of the deliveries required to be made by St. Xxxx
at the Closing pursuant to Section 3.04 shall have been made;
(e) the Company shall have received opinions in form and
substance reasonably satisfactory to the Company from Xxxxxxxxx and May, A&L
Goodbody and Xxxxxxx, Xxxx and Xxxxxxx as to the due organization, good
standing, corporate power and authority and licensing authority of the Company
and each of its Post-Closing Subsidiaries other than Platinum US; and
(f) the Maryland Insurance Commissioner shall have
granted Platinum US permission to write accident and health insurance.
ARTICLE X
INDEMNIFICATION
SECTION 10.01 GENERAL CROSS INDEMNIFICATION. (a) Except as
otherwise specifically set forth in any provision of this Agreement, including
but not limited to Sections 8.01, 10.02 and 10.03, or of any Ancillary
Agreement, St. Xxxx shall indemnify, defend and hold harmless the Company, its
Post-Closing Subsidiaries and their respective officers, directors, employees,
representatives and agents ("COMPANY INDEMNITEES") from and against any and all
Losses of such Company Indemnitee arising out of, by reason of or otherwise in
connection with (i) the St. Xxxx Liabilities; or (ii) any breach by St. Xxxx,
any of its Post-Closing Subsidiaries or any Person acting on behalf of St. Xxxx
or any such Post-Closing Subsidiary of any of their representations or
warranties in, or any covenant, commitment, obligation, agreement or undertaking
to be performed or complied with by any of them under this Agreement or any
Ancillary Agreement. For the avoidance of doubt indemnification under this
Section 10.01(a) does not apply with respect to any Liabilities relating to the
Employment Agreements or the Renewal Obligations; provided that with respect to
renewals of contracts, if any, within the Transferred Lines to be renewed which
had been previously written or renewed by St. Xxxx Re at above market rates with
the implicit or explicit expectation or understanding between the parties that
such above market rate during such period would be compensated by below market
rates applicable to future renewals of the contract St. Xxxx shall indemnify the
Company's affected Post-Closing Subsidiaries for such differential, in such
amounts as agreed to by the parties after negotiating in good faith.
(b) Except as otherwise specifically set forth in any
provision of this Agreement or any Ancillary Agreement, the Company shall
indemnify, defend and hold harmless St. Xxxx, its Post-Closing Subsidiaries and
their respective officers, directors, employees, representatives and agents
("ST. XXXX INDEMNITEES") from and against any and all Losses of such St. Xxxx
Indemnitees arising out of, by reason of or otherwise in connection with (i) the
Company Liabilities; or (ii) any breach by the Company, any of its Post-Closing
Subsidiaries or any Person acting on behalf of the Company or any such
Post-Closing Subsidiary of any of their representations or warranties in, or any
covenant, commitment, obligation, agreement or undertaking to be performed or
complied with by any of them under, of this Agreement or any Ancillary
Agreement.
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(c) The indemnity obligations contained in this Section
10.01 are applicable whether or not any Action or the facts or transactions
giving rise to such Action arose prior to, on or subsequent to the date of this
Agreement.
SECTION 10.02 REGISTRATION STATEMENT INDEMNIFICATION AND
CONTRIBUTION. (a) Subject to Section 10.02(b) and Section 10.02(c), the Company
shall indemnify and hold harmless (which includes, for the avoidance of doubt,
the reimbursement to each St. Xxxx Registration Indemnitee (as defined below) of
any expenses, including legal expenses, incurred by such St. Xxxx Registration
Indemnitee in connection with investigating or defending against any Loss as
such expenses are incurred), to the full extent permitted by law, St. Xxxx, its
Post-Closing Subsidiaries, the officers, directors, employees, representatives
and agents of each of them, each Person who controls any of them (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, employees and agents of each such controlling
Person (each, a "ST. XXXX REGISTRATION INDEMNITEE"), from and against any and
all Losses arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the "COMPANY INFORMATION", being the
information (other than the St. Xxxx Information and the Shared Information,
each as defined below) contained in any Registration Statement or Prospectus or
the Private Offering Memorandum, or in any amendment or supplement thereto, or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading. The indemnity and reimbursement obligation under this
Section 10.02(a) will be in addition to any liability that the Company may
otherwise have.
(b) St. Xxxx shall indemnify and hold harmless (which
includes, for the avoidance of doubt, the reimbursement to each Company
Registration Indemnitee (as defined below) of any expenses, including legal
expenses, incurred by such Company Registration Indemnitee in connection with
investigating or defending against any Loss), to the full extent permitted by
law, the Company, its Post-Closing Subsidiaries, the officers, directors,
employees, representatives and agents of each of them, each Person who controls
any of them (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) and the officers, directors, employees, representatives
and agents of each such controlling Person (each, a "COMPANY REGISTRATION
INDEMNITEE" and, together with the St. Xxxx Registration Indemnitees, the
"REGISTRATION INDEMNITEES") from and against any and all Losses (including
"Damages" (if any) owed by the Company to RenaissanceRe pursuant to Section
10.13 of the Investment Agreement) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the "ST.
XXXX INFORMATION" in any Registration Statement or Prospectus or the Private
Offering Memorandum, or in any amendment or supplement thereto or arising out of
or based upon any omission or alleged omission to state in the St. Xxxx
Information a material fact required to be stated therein or necessary to make
the statements in the St. Xxxx Information not misleading. The indemnity and
reimbursement obligation under this Section 10.02(b) will be in addition to any
liability that the St. Xxxx xxx otherwise have. For purposes of this Article X,
the St. Xxxx Information means the information specified as such in the copy of
the preliminary prospectus attached as Schedule10.02(b) and all similar
information in any amendment or supplement thereto or any preliminary or final
prospectus.
(c) St. Xxxx and the Company shall indemnify and hold
harmless (which includes, for the avoidance of doubt, the reimbursement to each
Registration Indemnitee of any
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expenses, including legal expenses, incurred by such Company Registration
Indemnitee or St. Xxxx Registration Indemnitee in connection with investigating
or defending against any Loss), to the full extent permitted by law, each
Company Registration Indemnitee and each St. Xxxx Registration Indemnitee, as
the case may be, from and against 50% of any and all Losses (including "Damages"
(if any) owed by the Company to RenaissanceRe pursuant to Section 10.13 of the
Investment Agreement) of each thereof arising out of or based upon any untrue
statement or alleged untrue statement of a material fact in the Shared
Information in any Registration Statement or Prospectus or the Private Offering
Memorandum, or in any amendment or supplement thereto, or arising out of or
based upon any omission or alleged omission to state a material fact required to
be stated or necessary to make the statements in the Shared Information not
misleading. "Shared Information" means the information specified as such in the
copy of the preliminary prospectus attached as Schedule 10.02(c) and all similar
information in any amendment or supplement thereto or any preliminary or final
prospectus.
(d) If for any reason the foregoing indemnification is
unavailable to, or is insufficient to hold harmless, a Registration Indemnitee
in respect of any indemnifiable Loss, the Indemnifying Party shall contribute to
the amount paid or payable by such Registration Indemnitee as a result of any
Loss in such proportion as is appropriate to reflect the relative benefit and
relative fault of the Indemnifying Party, on the one hand, and the Registration
Indemnitee, on the other, in connection with the statements or omissions in the
Registration Statement or Prospectus or the Private Offering Memorandum that
resulted in such Loss, as well as any other relevant equitable considerations.
The relative benefit to St. Xxxx shall be an amount equal to the product of (1)
the number of the St. Xxxx Shares and (2) the initial public offering price per
share for the Public Offering Shares. The relative benefit to the Company shall
be an amount equal to the sum of (1) the product of (A) the number of Common
Shares issued in the Public Offering and (B) the initial public offering price
of the Public Offering Shares, (2) the product of (A) the number of Common
Shares issued to RenaissanceRe pursuant to the RenaissanceRe Investment and (B)
the initial public offering price per share of the Public Offering Shares and
(3) the product of (A) the number of Units issued in the ESU Offering and (B)
$25. The relative fault of St. Xxxx or the Company, as the case may be, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Indemnifying Party or by
the Registration Indemnitee and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable in respect of any Loss (including with respect to any
"Damages", if any, owed by the Company to RenaissanceRe pursuant to Section
10.13 of the Investment Agreement) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such claim. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For the avoidance of doubt, a St. Xxxx
Registration Indemnitee may not demand any contribution from the Company for any
Losses arising out of or based upon any St. Xxxx Information, and the Company
may not demand any contribution from St. Xxxx for any Losses arising out of or
based upon any Company Information. Furthermore, any contribution between the
Registration Indemnitees with respect to any Losses arising out of or based upon
any Shared Information is limited to 50% of the amount of such Loss.
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(e) Notwithstanding anything to the contrary in this
Agreement or any of the Ancillary Agreements, St. Paul's aggregate liability to
the Company Registration Indemnitees under Section 10.02 (including with respect
to any "Damages" owed by the Company to Renaissance Re pursuant to Section 10.13
of the Investment Agreement) is limited to the excess of (I) $400 million over
(II) any amounts directly paid or payable by St. Xxxx (x) to investors in the
Public Offering and the ESU Offering in respect of claims against St. Xxxx
arising under any Registration Statement or Prospectus, (y) to Renaissance Re in
connection with the Renaissance Re Investment, and/or (z) the underwriters of
the Public Offering and the ESU Offering pursuant to the indemnification,
contribution and/or expense reimbursement obligations of St. Xxxx arising under
the underwriting agreements for the Public Offering and the ESU Offering. For
the avoidance of doubt, the limitation in clause (I) of the preceding sentence
applies to the Public Offering, the ESU Offering and the RenaissanceRe
Investment taken together and not individually. In the event the Company is
obligated to indemnify RenaissanceRe pursuant to Section 10.13 of the Investment
Agreement with respect to "Damages" arising out of St. Xxxx Information or
Shared Information, St. Xxxx and the Company agree that (i) the payment by St.
Xxxx to the Company of any amounts so owing shall be segregated from other
indemnification payments (if any) made by St. Xxxx to the Company so that they
may be available to Renaissance Re (such segregated amounts not to exceed $40
million), and (ii) no payments shall be made by St. Xxxx to any Company
Registration Indemnitees or others that in the aggregate exceed $360 million
prior to the satisfaction by St. Xxxx of any obligation to indemnify the Company
in order to satisfy indemnification of any "Damages" prior to the termination
(pursuant to Section 10.06) of St. Paul's obligations under this Section 10.02.
(e) Notwithstanding anything to the contrary in this
Agreement or any of the Ancillary Agreements, in the event of one or more
Company Registration Indemnitees make a claim for the indemnification,
contribution or reimbursement of expenses against St. Xxxx (including with
respect to any "Damages" owed by the Company to Renaissance Re pursuant to
Section 10.13 of the Investment Agreement), St. Paul's obligation to indemnify,
contribute to, or reimburse the Company Registration Indemnitees (including with
respect to any "Damages" owed by the Company to Renaissance Re pursuant to
Section 10.13 of the Investment Agreement) under Section 10.02 with respect to
such claim is conditioned on, and only payable upon, the concurrent settlement
or resolution of all claims then outstanding at the time of such settlement or
resolution against St. Xxxx (other than claims by the underwriters of the Public
Offering and the ESU Offering) which are then subject to the limitation on
liability set forth in Section 10.02(e) provided St. Xxxx continues in good
faith to seek and assist in the resolution or settlement of all such claims.
(f) Notwithstanding anything to the contrary in this
Agreement or any of the Ancillary Agreements, each St. Xxxx Registration
Indemnitee and each Company Registration Indemnitee shall pay the costs and
expenses of its own legal counsel retained in connection with this Section
10.02, as such costs and expenses are incurred, in each case subject to being
reimbursed by the applicable indemnifying party upon the final settlement or
resolution of all investor claims against the Company, St. Xxxx and the
Underwriters, in accordance with this Section.
SECTION 10.03 LIMITATIONS ON INDEMNIFICATION OBLIGATIONS. In
addition to the limitation set forth in Section 10.02(e) with respect to St.
Paul's aggregate liability, the amount
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which either party hereto (an "INDEMNIFYING PARTY") is or may be required to pay
to any other party (an "INDEMNITEE") pursuant to Sections 10.01 and 10.02 shall
be reduced (including, without limitation, retroactively) by any Insurance
Proceeds or any other amounts actually recovered by or on behalf of such
Indemnitee, in reduction of the related Loss. If an Indemnitee has received the
payment required by this Agreement from an Indemnifying Party in respect of any
Loss and has subsequently actually received Insurance Proceeds or other amounts
in respect of such Loss, then such Indemnitee shall promptly pay to such
Indemnifying Party a sum equal to the amount of such Insurance Proceeds or other
amounts actually received (up to but not in excess of the amount of any
indemnity payment made hereunder). An insurer who would otherwise be obligated
to pay any claim shall not be relieved of the responsibility with respect
thereto, or, solely by virtue of the indemnification provisions hereof, have any
subrogation rights with respect thereto, it being expressly understood and
agreed that no insurer or any other third party shall be entitled to a
"windfall" (I.E., a benefit they would not be entitled to receive in the absence
of the indemnification provisions) by virtue of the indemnification provisions
hereof.
SECTION 10.04 PROCEDURES FOR INDEMNIFICATION OF THIRD PARTY
CLAIMS. Procedures for indemnification of Third Party Claims shall be as
follows:
(a) If an Indemnitee receives notice or otherwise learns
of the assertion by a Person (including, without limitation, any governmental
entity) who is not a party to this Agreement or an Affiliate thereof, of any
claim or of the commencement by any such Person of any Action (a "THIRD PARTY
CLAIM") with respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 10.01 or 10.02 of this Agreement, such
Indemnitee shall give such Indemnifying Party written notice thereof promptly
after becoming aware of such Third Party Claim; PROVIDED that the failure of any
Indemnitee to give notice as provided in this Section 10.04(a) shall not relieve
the Indemnifying Party of its obligations under this Article V, except to the
extent that such Indemnifying Party is prejudiced by such failure to give
notice. Such notice shall describe the Third Party Claim in as much detail as is
reasonably possible and, if ascertainable, shall indicate the amount (estimated
if necessary) of the Loss that has been or may be sustained by such Indemnitee.
(b) An Indemnifying Party may elect to defend or to seek
to settle or compromise, at such Indemnifying Party's own expense and by such
Indemnifying Party's own counsel, any Third Party Claim. Within 30 days of the
receipt of notice from an Indemnitee in accordance with Section 10.04(a) (or
sooner, if the nature of such Third Party Claim so requires), the Indemnifying
Party shall notify the Indemnitee of its election whether the Indemnifying Party
will assume responsibility for defending such Third Party Claim, which election
shall specify any reservations or exceptions. After notice from an Indemnifying
Party to an Indemnitee of its election to assume the defense of a Third Party
Claim, such Indemnifying Party shall not be liable to such Indemnitee under this
Article X for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; PROVIDED that each Indemnitee may elect to
participate in such defense, at such Indemnitee's own expense and by such
Indemnitee's own counsel (which for the avoidance of doubt shall act at the
Indemnitee's expense) but PROVIDED FURTHER that an Indemnifying Party and each
Indemnitee may agree to retain common counsel. If the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and (i) in
any Indemnitee's reasonable judgment a conflict of interest between one or more
of such
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Indemnitees and such Indemnifying Party exists in respect of such claim, (ii) if
the identity of the Person that is the appropriate Indemnifying Party or
Indemnitee in respect of such claim is in dispute, (iii) if an Indemnitee
reasonably asserts that it believes that it may not be indemnified by the
Indemnifying Party for its entire exposure in respect of a Third Party Claim, or
(iv) if the Indemnifying Party shall have assumed responsibility for such claim
with reservations or exceptions that would materially prejudice such
Indemnitees, such Indemnitees shall have the right to employ separate counsel to
represent such Indemnitees and in that event the reasonable fees and expenses of
such separate counsel (but not more than one separate counsel for all such
Indemnitees reasonably satisfactory to the Indemnifying Party) shall be paid by
such Indemnifying Party subject to Section 10.02(g). If an Indemnifying Party
elects not to assume responsibility for defending a Third Party Claim, or fails
to notify an Indemnitee of its election as provided in this Section 10.04(b),
such Indemnitee may defend or (subject to the remainder of this Section 10.04(b)
and Section 10.04(d)) seek to compromise or settle such Third Party Claim at the
expense of the Indemnifying Party. Neither an Indemnifying Party nor an
Indemnitee shall consent to entry of any judgment or enter into any settlement
of any Third Party Claim which does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such Indemnitee, in the case of a
consent or settlement by an Indemnifying Party, or the Indemnifying Party, in
the case of a consent or settlement by the Indemnitee, of a written release from
all liability in respect to such Third Party Claim.
(c) If an Indemnifying Party chooses to defend any Third
Party Claim, the Indemnitee shall make available at reasonable times to such
Indemnifying Party any personnel or any books, records or other documents within
its control or which it otherwise has the ability to make available that are
necessary or appropriate for such defense, settlement or compromise, and shall
otherwise cooperate in a reasonable manner in the defense, settlement or
compromise of such Third Party Claim.
(d) Notwithstanding anything in this Section 10.04 to the
contrary, an Indemnifying Party may not settle or compromise any claim without
the prior written consent of the Indemnitee; PROVIDED that consent to settlement
or compromise shall not be unreasonably withheld or delayed and PROVIDED FURTHER
that St. Paul's aggregate liability with respect to any such settlement or
compromise shall be subject to the provisions of Section 10.02(e) and (f). If an
Indemnifying Party notifies the Indemnitee in writing of such Indemnifying
Party's desire to settle or compromise a Third Party Claim on the basis set
forth in such notice (provided that such settlement or compromise includes as an
unconditional term thereof the giving by the claimant or plaintiff of a written
release of the Indemnitee from all liability in respect thereof) and the
Indemnitee shall notify the Indemnifying Party in writing that such Indemnitee
declines to accept any such settlement or compromise, such Indemnitee may
continue to contest such Third Party Claim, free of any participation by such
Indemnifying Party, at such Indemnitee's sole expense. In such event, the
obligation of such Indemnifying Party to such Indemnitee with respect to such
Third Party Claim shall be equal to (i) the costs and expenses of such
Indemnitee prior to the date such Indemnifying Party notifies such Indemnitee of
the offer to settle or compromise (to the extent such costs and expenses are
otherwise indemnifiable hereunder) PLUS (ii) the lesser of (A) the amount of any
offer of settlement or compromise which such Indemnitee declined to accept and
(B) the actual out-of-pocket amount such Indemnitee is obligated to pay
subsequent to such date as a result of such Indemnitee's continuing to pursue
such Third Party Claim.
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(e) In the event of payment by an Indemnifying Party to
any Indemnitee in connection with any Third Party Claim, such Indemnifying Party
shall be subrogated to and shall stand in the place of such Indemnitee as to any
events or circumstances in respect of which such Indemnitee may have any right
or claim relating to such Third Party Claim against any claimant or plaintiff
asserting such Third Party Claim or against any other Person. Such Indemnitee
shall cooperate with such Indemnifying Party in a reasonable manner, and at the
cost and expense of such Indemnifying Party, in prosecuting any subrogated right
or claim.
SECTION 10.05 REMEDIES CUMULATIVE. The remedies provided in
this Article X shall be cumulative and shall not preclude assertion by an
Indemnitee of any other rights at law or in equity or the seeking of any and all
other remedies against any Indemnifying Party.
SECTION 10.06 SURVIVAL OF INDEMNITIES. The obligations of the
Company and St. Xxxx under this Article X shall survive indefinitely, PROVIDED,
HOWEVER, that St. Paul's obligations under Section 10.02 shall survive until the
second anniversary of the Closing Date.
ARTICLE XI
ACCESS TO INFORMATION; FURTHER ASSURANCES
SECTION 11.01 ACCESS TO INFORMATION. From and after the
Closing Date, St. Xxxx shall afford to the Company and its Post-Closing
Subsidiaries and their respective authorized accountants, counsel and other
designated representatives (collectively, "REPRESENTATIVES") reasonable, and
reasonably prompt, access (including using commercially reasonable efforts to
give access to Persons possessing information) during normal business hours to
all data and information that is specifically described in writing
(collectively, "INFORMATION") within the possession of St. Xxxx or any
Post-Closing Subsidiary of St. Xxxx relating to the Company or any Post-Closing
Subsidiary of the Company, insofar as such Information is reasonably required by
the Company or such Post-Closing Subsidiary including in connection with its
preparation of regulatory reports and filings, PROVIDED, that St. Xxxx shall not
be obliged to provide information concerning contracts with an inception date of
prior to January 1, 2002 other than: (i) copies of the underwriting files for
contracts that were underwritten by St. Xxxx Re in the 1997, 1998, 1999, 2000
and 2001 underwriting years and that are within the Transferred Lines or the
Excluded Classes as set forth in Schedule 11.01; (ii) aggregate loss data for
contracts that are within the Transferred Lines or the Excluded Classes upon the
Company's representation that such information is required in connection with
its business; and (iii) St. Xxxx will also provide access to the underwriting
files (but shall not provide copies thereof) for contracts written by St. Xxxx
Re within the Transferred Lines or the Excluded Classes in underwriting years
prior to 1997 upon the Company's representation that it requires access to such
information in connection with its business. For greater certainty, St. Xxxx
shall not be required to share any claims information relating to any individual
contract having an inception date that is prior to January 1, 2002. Similarly,
from and after the Closing Date, the Company shall afford to St. Xxxx, any
Post-Closing Subsidiary of St. Xxxx and their respective Representatives
reasonable access (including using commercially reasonable efforts to give
access to Persons possessing information) during normal business hours to
Information within the Company's or any Post-Closing Subsidiary of the Company's
possession that is specifically
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described in writing relating to St. Xxxx or any Post-Closing Subsidiary of St.
Xxxx, insofar as such Information is reasonably required by St. Xxxx or a
Post-Closing Subsidiary of St. Xxxx. Information may be requested under this
Article XI for, without limitation, audit, accounting, claims, litigation (other
than any claims or litigation between the parties hereto or their Subsidiaries)
and tax purposes, as well as for purposes of fulfilling disclosure and reporting
obligations and for performing this Agreement and the transactions contemplated
hereby.
SECTION 11.02 RETENTION OF RECORDS. Each of St. Xxxx and the
Company and their respective Post-Closing Subsidiaries shall retain, and shall
cause their respective Post-Closing Subsidiaries to retain following the Closing
Date, for a period consistent with the longer of their respective document
retention policies in effect at such time or for such longer period as may be
required by applicable law or regulations, respectively, all significant
information relating to the business of the other and the other's Subsidiaries
or the obligations of the other or the other's Subsidiaries. In addition, after
the expiration of the applicable retention periods, such information may not be
destroyed or otherwise disposed of at any time, unless, prior to such
destruction or disposal, (a) the party proposing to destroy or otherwise dispose
of such information provides no less than 30 days' prior written notice to the
other, specifying in reasonable detail the information proposed to be destroyed
or disposed of, and (b) if a recipient of such notice shall request in writing
prior to the scheduled date for such destruction or disposal that any of the
information proposed to be destroyed or disposed of be delivered to such
recipient, the party proposing the destruction or disposal shall promptly
arrange for the delivery of such information as was requested at the expense of
the party requesting such information.
SECTION 11.03 ST. XXXX CONFIDENTIAL INFORMATION.
(a) Neither the Company, nor any of its Post-Closing
Subsidiaries nor any of their respective directors, officers and agents may
disclose any information of a confidential nature received from St. Xxxx (the
"ST. XXXX CONFIDENTIAL INFORMATION").
(b) St. Xxxx Confidential Information shall not include
information, which is or becomes generally known on a non-confidential basis
provided, that the source of such information was not bound by a confidentiality
agreement or other obligation of confidentiality.
(c) If the Company, any of its Post-Closing Subsidiaries
or any of their respective directors, officers or agents is legally requested or
required under an order or subpoena issued by a court, administrative agency or
arbitration panel (through oral examination, interrogatories, requests for
information or documents, civil investigation demand or other legal,
administrative or arbitration processes) to disclose any St Xxxx Confidential
Information, the Company shall provide St. Xxxx with prompt written notice of
the request, requirement, subpoena or order to permit St. Xxxx (if it so elects)
to seek an appropriate protective order preventing or limiting disclosure. If St
Xxxx seeks such an order or takes other steps to avoid or limit disclosure, the
Company shall cooperate with St. Xxxx at St. Paul's expense. If, in the absence
of such protective order, the Company is compelled to disclose St. Xxxx
Confidential Information, the Company may disclose such St. Xxxx Confidential
Information without liability hereunder.
(d) The Company agrees that money damages would not be a
sufficient remedy for any breach of this Section 11.03 by the Company or any of
its Post-Closing
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Subsidiaries or any of their respective directors, officers or agents, and that,
in addition to all other remedies, St. Xxxx shall be entitled to specific
performance and injunctive or other equitable relief as a remedy for any such
breach.
SECTION 11.04 FURTHER ASSURANCES; NO AGENCY; SPECIFIC
PERFORMANCE. If at any time after the Closing Date any further action is
reasonably necessary or advisable to carry out the purposes of this Agreement or
any Ancillary Agreement, the proper officers of each party to this Agreement
shall take all such action or cause the applicable Post-Closing Subsidiaries to
take all such action. Each of St. Xxxx and its Post-Closing Subsidiaries and the
Company and its Post-Closing Subsidiaries shall use its commercially reasonable
efforts to obtain all consents and approvals, to enter into all amendatory
agreements and to make all filings and applications that may be required for the
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, including, without limitation, all applicable governmental
and regulatory filings. Under no circumstances does this Agreement or any of the
Ancillary Agreements create an agency relationship between St. Xxxx and the
Company, except to the extent specified in any such Ancillary Agreement. The
parties each agree and acknowledge that remedies at law for any breach of their
obligations under this Section 11.04 are inadequate and that in addition thereto
each party, as applicable, shall be entitled to seek equitable relief, including
injunction and specific performance, in the event of any such breach.
ARTICLE XII
PRE-EMPTIVE RIGHTS; REPURCHASE PROGRAMS; TRANSFER RESTRICTIONS; STANDSTILL
SECTION 12.01 PRE-EMPTIVE RIGHTS. (a) If the Company proposes
to issue (a "DILUTIVE TRANSACTION") any Common Shares or any securities
convertible into or exchangeable for or carrying in any way the right to acquire
Common Shares (the "NEW SECURITIES"), St. Xxxx will have the right to subscribe
for up to such number of New Securities as is necessary to maintain St. Paul's
beneficial ownership interest in the Company at the same percentage owned
immediately prior to the Dilutive Transaction (assuming conversion or exchange
of the New Securities; PROVIDED, HOWEVER, that St. Xxxx shall not have a right
to subscribe for any New Securities if the ownership of such New Securities
would cause St. Xxxx to be a "United States 25% Shareholder" (as defined in the
bye-laws of the Company). The precise number of New Securities to be issued to
St. Xxxx will be rounded up to the nearest round lot number. For the avoidance
of doubt, the issuance of Common Shares upon the settlement of the Purchase
Contracts forming part of the Units is deemed to be a Dilutive Transaction.
(b) If the Company proposes to issue New Securities, it
shall give St. Xxxx 30 days written notice of its intention, describing the type
and number of New Securities and the price and terms upon which the Company
proposes to issue the same. St. Xxxx shall have ten days from the date of
receipt of any such notice to agree to purchase up to St. Paul's PRO RATA share
of New Securities specified above for the same price paid to the Company in
connection with such Dilutive Transaction (i.e., less underwriting discounts and
commissions) by giving written notice to the Company and stating therein the
quantity of New Securities to be purchased; PROVIDED, HOWEVER, that in the
connection with an Early Settlement (as such term is defined in the Purchase
Contract Agreement) of the Purchase Contracts pursuant to Section 5.10
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of the Purchase Contract Agreement, this Section 12.01(b) shall not apply, but
the Company shall give St. Xxxx prompt written notice of such Early Settlement.
(c) In the event that St. Xxxx fails to exercise its
preemptive right within the ten-day notice period, the Company shall have 120
days thereafter to sell the New Securities with respect to which St. Paul's
preemptive right was not exercised, upon the same terms specified in the
Company's notice to St. Xxxx (except that underwriting discounts and commissions
may be paid), PROVIDED that the Company shall not be obligated to issue such New
Securities. To the extent the Company does not sell all the New Securities
offered within such 120-day period, the Company shall not thereafter issue or
sell such New Securities without first again offering such securities to St.
Xxxx in the manner provided above.
(d) Notwithstanding anything in this Section 12.01 to the
contrary, the parties hereby agree that
(i) any New Securities issued pursuant to (A)
any director or employee benefit plans of the Company or (B) any
acquisition transaction engaged in by the Company are not to be deemed
Dilutive Transactions and that, consequently, no pre-emptive rights
will attach with respect to New Securities issued pursuant to clauses
(A) and (B);
(ii) St. Paul's pre-emptive rights to subscribe
for New Securities will terminate without any further action by either
party hereto at such time as St. Xxxx beneficially owns less than 10%
of the outstanding Common Shares;
(iii) St. Xxxx shall have no pre-emptive rights
with respect to any proposed Dilutive Transaction (A) to the extent a
proposed Dilutive Transaction is an underwritten public offering, the
underwriters request a reduction of the number of New Securities to be
issued, or (B) prior to a Dilutive Transaction a nationally recognized
investment bank mutually agreed by the parties advises St. Xxxx and the
Company in writing that St. Xxxx exercising pre-emptive rights in
connection with such Dilutive Transaction would materially hinder or
interfere with such proposed Dilutive Transaction;
(iv) with respect to any New Securities that are
securities convertible into or exchangeable for or carrying in any way
the right to acquire Common Shares ("Convertible New Securities"), the
terms of such Convertible New Securities issuable to St. Xxxx upon
exercise of the pre-emptive rights shall contain provisions which
preclude conversion into or exchange for the underlying Common Shares
until such time as St. Paul's ownership of Common Shares measured
immediately after such conversion or exchange is no more than 24.9% of
the total number of outstanding Common Shares. Ownership for this
purpose will be determined under Section 958 of the Internal Revenue
Code of 1986, as amended (the "Code"). These special limitations on
conversions or exchanges shall lapse upon a transfer of the Convertible
New Securities by St. Xxxx to a person with which St. Xxxx has no
constructive ownership relationship under Section 958 of the Code; and
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(v) St. Xxxx shall have no pre-emptive rights in
the event of an issuance of Common Shares upon the conversion or
exchange of New Securities with respect to the issuance of which St.
Xxxx had pre-emptive rights.
(e) (i) For so long as St. Xxxx has the right to
exercise any pre-emptive rights pursuant to this Section 12.01, each party
hereto shall use its commercially reasonable efforts to obtain all
authorizations, consents, orders and approvals of all Governmental Authorities
and officials that may be or become necessary in connection with St. Paul's
exercise of such rights, and will cooperate reasonably with the other party in
promptly seeking to obtain all such authorizations, consents, orders and
approvals. The parties hereto agree to cooperate reasonably, complete and file
any joint applications for any authorizations from any Governmental Authorities
reasonably necessary or desirable to effectuate the transactions contemplated by
this Section 12.01. The parties hereto agree that they will keep each other
apprised of the status of matters relating to the exercise of the pre-emptive
rights contemplated under this Section 12.01, including reasonably promptly
furnishing the other with copies of notices or other communications received by
the Company or St. Xxxx, from all third parties and Governmental Authorities
with respect to the pre-emptive rights contemplated by this Section 12.01.
(ii) For so long as St. Xxxx has the right to exercise any
pre-emptive rights pursuant to this Section 12.01, the Company and St.
Xxxx agree to reasonably promptly prepare and file, if necessary, any
filing under the HSR Act with the FTC and the Antitrust Division of the
DOJ in order to enable St. Xxxx to exercise such pre-emptive rights
under this Section 12.01. Each party hereby covenants to cooperate
reasonably with the other such party to the extent reasonably necessary
to assist in making any reasonable supplemental presentations to the
FTC or the DOJ, and, if requested by the FTC or the DOJ, to reasonably
promptly amend or furnish additional information thereunder.
(iii) Any reasonable out-of-pocket costs and expenses
arising in connection with actions taken pursuant to this Section
12.01(e) shall be borne by St. Xxxx.
SECTION 12.02 SHARE BUY-BACK PROGRAMS. (a)In the event that
the Company determines to effect repurchases of its Common Shares (and, if
applicable, New Securities) in a repurchase program approved by its board of
directors, then St. Xxxx must sell to the Company, on each day which any Common
Shares are so repurchased at a price equal to the average price of repurchases
by the Company on such day, such number of Common Shares necessary to limit St.
Paul's beneficial ownership interest in the Company to no more than 24.9% of the
outstanding Common Shares (on an Unadjusted Basis (as defined in the Company's
Bye-Laws)) after all such repurchases; PROVIDED, that St. Xxxx xxx require that
any repurchases from it by the Company must be at the average purchase price of
any repurchases effected by the Company on such day pursuant to Rule 10b-18
under the Exchange Act. The precise number of Common Shares to be repurchased by
the Company from St. Xxxx will be rounded up to the nearest round lot number.
(b) Notwithstanding anything in this Section 12.02 to the
contrary, if (i) St. Xxxx beneficially owns less than 24.9% of the outstanding
Common Shares on an Unadjusted
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Basis other than as a result of any voluntary sale of Common Shares by St. Xxxx,
and (ii) St. Xxxx thereafter purchases Common Shares to maintain such beneficial
ownership level at 24.9% either (A) in accordance with its pre-emptive rights
under Section 12.01 or (B) in the open market, in each case within 60 days after
suffering such dilution, then any repurchases by the Company of its Common
Shares in the period that is six months plus one day from the trade date of any
such purchase by St. Xxxx in accordance with clause (A) or (B) may only be
effected in a manner that either does not trigger St. Paul's obligation pursuant
to Section 12.02(a) to sell back Common Shares to the Company, or would not
result in any requirement by St. Xxxx to disgorge profits pursuant to Section
16(b) of the Exchange Act.
SECTION 12.03 TRANSFER RESTRICTIONS; STANDSTILL PROVISIONS.
(a) St. Xxxx xxx not directly or indirectly, sell, transfer or otherwise dispose
of more than 9.9% of the Common Shares outstanding at the time of such sale,
transfer or other disposition to any Person that generates 50% or more of its
gross revenue in its most recent fiscal year for which financial statements are
available, by writing property or casualty insurance or reinsurance, except in
the following circumstances: (i) in connection with any tender offer or exchange
offer made to all holders of outstanding Common Shares; (ii) to any Wholly Owned
Post-Closing Subsidiary of St. Xxxx provided that such subsidiary agrees in
writing with the Company to the same transfer restrictions as are contained in
this Section 12.03; or (iii) in a transfer by operation of law upon consummation
of a merger or consolidation of St. Xxxx into another Person.
-47-
(b) St. Xxxx agrees that except as contemplated in this
Agreement, St. Xxxx and its Subsidiaries will not, and St. Xxxx will use its
commercially reasonable efforts to cause its Affiliates and any officer,
employee, agent or representative of St. Xxxx or such Affiliates (collectively,
the "Representatives") to not, directly or indirectly, (i) advise or encourage
any party or entity with respect to the voting of any Voting Securities in an
attempt to cause a Change in Control of the Company, (ii) initiate or otherwise
solicit shareholders of the Company for the granting of any proxy or the
approval of one or more shareholder proposals, or induce any other party or
entity to seek any proxy or to initiate any shareholder proposal, that in any
case results or is designed to result in a Change in Control of the Company, or
(iii) directly or indirectly acquire, announce an intention to acquire, or agree
to acquire, by purchase or otherwise, beneficial ownership of any Voting
Securities, if, immediately after any such acquisition, St. Xxxx or any
Subsidiary of St. Xxxx would beneficially or of record own, in the aggregate,
more than 24.9% of the Voting Securities then outstanding, provided, that
nothing herein shall limit the ability of St. Xxxx or any of its Affiliates to
discuss any matter, including a Change in Control of the Company, with
RenaissanceRe or any of its Affiliates. A "Change in Control" of the Company is
deemed to have occurred if (i) any person or group (as defined for purposes of
Section 13 of the Securities Exchange Act of 1934, as amended) (excluding the
Company or any Subsidiary thereof) becomes the beneficial owner of more than 50%
of the outstanding equity securities of the Company representing the right to
vote for the election of directors or (ii) there shall occur a merger,
consolidation or other business combination in which the Company is acquired
(unless the shareholders of the Company immediately before such business
combination own, directly or indirectly, immediately following such business
combination, at least a majority of the combined voting power of the entity
resulting from such business combination).
(c) St. Xxxx shall use its commercially reasonable
efforts to cause all Voting Securities beneficially owned directly or indirectly
by it or any Subsidiary to be present for quorum purposes, in person or
represented by proxy at every meeting of holders of Common Shares (or, if
applicable, in any matter to be acted upon by written consent of shareholders
without a meeting).
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01 SURVIVAL. All representations, covenants and
agreements contained or provided for herein shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
party benefiting from any such covenant or agreement, and shall survive the
execution of this Agreement.
SECTION 13.02 GOVERNING LAW; DISPUTE RESOLUTION.
(a) GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the state of New York, without
regard to its conflict of laws principles.
-48-
(b) DISPUTE RESOLUTION.
(i) MANDATORY ARBITRATION. The parties hereto
shall promptly submit any dispute, claim, or controversy arising out of
or relating to this Agreement, the Ancillary Agreements (unless they
specifically provide otherwise) and/or the Transactions contemplated
hereunder, including, effect, validity, breach, interpretation,
performance, or enforcement (collectively, a "DISPUTE") to binding
arbitration in New York, New York at the offices of Judicial
Arbitration and Mediation Services, Inc. ("JAMS") before an arbitrator
(the "ARBITRATOR") in accordance with JAMS' Arbitration Rules and
Procedures and the Federal Arbitration Act, 9 U.S.C. Sections 1 ET
SEQ. The Arbitrator shall be a former federal judge selected from JAMS'
pool of neutrals. The parties agree that, except as otherwise provided
herein respecting temporary or preliminary injunctive relief, binding
arbitration shall be the sole means of resolving any Dispute.
(ii) COSTS. The costs of the arbitration
proceeding and any proceeding in court to confirm or to vacate any
arbitration award or to obtain temporary or preliminary injunctive
relief as provided in paragraph (iii) below, as applicable (including,
without limitation, actual attorneys' fees and costs), shall be borne
by the unsuccessful party and shall be awarded as part of the
Arbitrator's decision, unless the Arbitrators shall otherwise allocate
such costs in such decision.
(iii) INJUNCTIVE RELIEF. Nothing herein prevents
the parties hereto from seeking or obtaining temporary or preliminary
injunctive relief in a court for any breach or threatened breach of any
provision hereof pending the hearing before and determination of the
Arbitrator. The parties hereby agree that they shall continue to
perform, or cause their Post-Closing Subsidiaries to perform, any and
all obligations under this Agreement, and the Ancillary Agreements,
including, without limitation, the Master Services Agreement, pending
the hearing before and determination of the Arbitrator, it being agreed
and understood that the failure to so perform will cause irreparable
harm to each party and its Affiliates and that the putative breaching
party has assumed all of the commercial risks associated with such
breach or threatened breach of any provision hereof by such party.
(iv) COURTS. The parties agree that the State and
Federal courts in The City of New York shall have jurisdiction for
purposes of enforcement of their agreement to submit Disputes to
arbitration and of any award of the Arbitrator.
SECTION 13.03 NOTICES. All notices, requests, claims, demands
and other communications hereunder and under the Ancillary Agreements shall be
in writing and shall be deemed to have been duly given if delivered by hand
(with receipt confirmed), or by certified mail, postage prepaid and return
receipt requested, or facsimile transmission addressed as follows (or to such
other address as a party may designate by written notice to the others) and
shall be deemed given on the date on which such notice is received:
-49-
If to St. Xxxx:
The St. Xxxx Companies, Inc.
000 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000
Attention: General Counsel
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx X. Xxxxxxxx
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
If to the Company:
Platinum Underwriters Holdings, Ltd.
Xxxxxxxxx Xxxxx
0 Xxxxxx Xxxxxx
Xxxxxxxx XX00
Xxxxxxx
Attention: Secretary
Facsimile: (000) 000-0000
with a copy to:
Xxxxx X. Xxxxxx
Xxxxx Xxxxxxxxxx LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
SECTION 13.04 AMENDMENT AND MODIFICATION. The parties may by
written agreement, subject to any regulatory approval as may be required, (a)
extend the time for the performance of any of the obligations or other acts of
the parties hereto; (b) waive any inaccuracies in the documents delivered
pursuant to this Agreement, and (c) waive compliance with or modify, amend or
supplement any of the agreements contained in this Agreement or waive or modify
performance of any of the obligations of any of the parties hereto. This
Agreement may not be amended or modified except by an instrument in writing duly
signed on behalf of the parties hereto.
SECTION 13.05 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
-50-
SECTION 13.06 NO THIRD PARTY BENEFICIARIES. Except for the
provisions of Articles VIII and X relating to Indemnities, this Agreement is
solely for the benefit of the parties hereto and shall not be deemed to confer
upon third parties any remedy, claim, reimbursement, claim of action or other
right in excess of those existing without reference to this Agreement.
SECTION 13.07 HEADINGS. The Article and Section headings
contained in this Agreement are for reference purposes only and shall not in any
way affect the meaning or interpretation of this Agreement.
SECTION 13.08 SEVERABILITY. To the extent any provision of
this Agreement shall be invalid or unenforceable, it shall be considered deleted
herefrom and the remaining provisions of this Agreement shall be unaffected and
shall continue in full force and effect.
SECTION 13.09 WAIVER. No failure by any party to take any
action or assert any right hereunder shall be deemed to be a waiver of such
right in the event of the continuation or repetition of the circumstances giving
rise to such right, unless expressly waived in writing.
SECTION 13.10 EXPENSES. Except as otherwise specified in this
Agreement or the Ancillary Agreements, all costs and expenses, including,
without limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement, the Ancillary
Agreements and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Closing Date shall have
occurred.
SECTION 13.11 PUBLIC ANNOUNCEMENT. No party to this Agreement
shall make, or cause to be made, any press release or public announcement in
respect of this Agreement or the transactions contemplated hereby or otherwise
communicate with any news media without the prior written consent of the other
party and the parties shall cooperate as to the timing and contents of any such
press release or public announcement.
SECTION 13.12 ENTIRE AGREEMENT. This Agreement, the Ancillary
Agreements and any other written document executed by and between St. Xxxx and
the Company that specifically states that such document is an Ancillary
Agreement, constitute the entire agreement of the parties hereto with respect to
the subject matter hereof and thereof and supersede all prior agreements and
undertakings, both written and oral, between St. Xxxx and the Company with
respect to the subject matter hereof and thereof.
SECTION 13.13 ASSIGNMENT OF THIS AGREEMENT. Neither party may
assign this Agreement by operation of law or otherwise without the express
written consent of the other party; PROVIDED, HOWEVER, this Agreement may be
assigned by operation of law or otherwise without the express written consent of
the St. Xxxx and the Company to their respective Post-Closing Subsidiaries so
long as such assignment does not relieve the assigning party of liability
hereunder.
SECTION 13.14 COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
-51-
SECTION 13.15 LIMIT ON RECOVERY FROM COMPANY DIRECTORS AND
OFFICERS. In any legal action commenced by St. Xxxx against the Company, any of
its Post-Closing Subsidiaries or the officers and/or directors of the Company or
such Post-Closing Subsidiaries, St. Xxxx will not recover from any officer or
director of any of the Company or its Post-Closing Subsidiaries any amount that
is in excess of the amount the Company and/or such Post-Closing Subsidiaries is
able to indemnify such officer or director, other than in the circumstance where
such indemnification of such officer or director by the Company and/or such
Post-Closing Subsidiaries is restricted due to such officer or director having
engaged in fraud, intentional misconduct or criminal acts. St. Xxxx and the
Company agree that the officers and directors of the Company and its
Post-Closing Subsidiaries are third party beneficiaries of the agreement set
forth in this Section 13.15.
SECTION 13.16 TRANSITION EXPENSES. St. Xxxx agrees to
reimburse the Company for up to $4,500,000 of expenses of the type referenced in
correspondence from St. Xxxx to the Company as of the date hereof, incurred by
the Company or any of its Post-Closing Subsidiaries in connection with its first
year of operations following the Closing. Such reimbursements are payable within
10 Business Days following receipt by St. Xxxx from the Company of documentation
reasonably satisfactory to St. Xxxx evidencing the Company's payment of any such
expenses.
-52-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
THE ST. XXXX COMPANIES, INC.
By:________________________________
Name:
Title:
PLATINUM UNDERWRITERS HOLDINGS, LTD.
By_________________________
Name:
Title:
[INSERT EXHIBITS 3.01(a) - 3.04(c)]
Exhibit 3.04(b)
XXXX OF SALE AND ASSIGNMENT
[September 23], 2002
KNOW ALL MEN BY THESE PRESENTS that pursuant to that certain
Formation and Separation Agreement, dated as of [September 23], 2002 (the
"FORMATION AND SEPARATION AGREEMENT"), among [St. Xxxx Entity], a [ ]
corporation ("SELLER"), and Platinum Underwriters Holdings, Ltd., a Bermuda
company ("BUYER"), Seller, for good and valuable consideration as recited in the
Formation and Separation Agreement, the receipt and sufficiency of which are
hereby acknowledged, does hereby grant, sell, convey, transfer, assign and
deliver to Buyer, its successors and assigns, free and clear of any Encumbrances
(except for those Encumbrances that may arise solely due to the status of Buyer
or any of its Affiliates), any and all rights, title and interest of Seller in
and to the Transferred Assets (including, without limitation, the Platinum US
Shares and the Employment Agreements), to have and to hold unto Buyer, its
successors and assigns, forever, in full satisfaction of Seller's obligations
under Section 3.04(b) of the Formation and Separation Agreement. Capitalized
terms used but not defined herein shall have the respective meanings ascribed to
such terms in the Formation and Separation Agreement.
This Xxxx of Sale and Assignment is intended to implement the
provisions of Section 3.04(b) of the Formation and Separation Agreement and
shall not be construed to enhance, extend or limit the rights or obligations of
Seller or Buyer thereunder. To the extent any provision of this instrument is
inconsistent with the Formation and Separation Agreement, the provisions of the
Formation and Separation Agreement shall control.
THIS XXXX OF SALE AND ASSIGNMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO ITS CONFLICT OF LAWS PRINCIPLES.
This Xxxx of Sale and Assignment may be executed and delivered
(including by facsimile delivery) in one or more counterparts, each of which
shall be deemed to be an original by the parties executing such counterpart, but
all of which shall be considered one and the same instrument.
(SIGNATURE PAGE FOLLOWS)
IN WITNESS WHEREOF, Seller has caused this instrument to be executed by
its duly authorized officer as of the date first written above.
[ST. XXXX ENTITY]
By:____________________________
Name:
Title:
Accepted and Agreed
PLATINUM UNDERWRITERS HOLDINGS, LTD.
By:____________________________
Name:
Title
-2-
Schedule 1.01
LIST OF CLASSES INCLUDED IN THE TRANSFERRED LINES
THE BUSINESS THAT WILL BE TRANSFERRED INTO PLATINUM RE IS DEFINED BY ALL
BUSINESS INCEPTING IN THE 2002 UNDERWRITING YEAR AND BELONGING TO THE INCLUDED
CLASSES LISTED BELOW.
NEW YORK CLASSES NEW YORK CLASSES
1101 Property Treaty P-R, NY 1204 Intl Casualty Xxxxxx, XX
0000 Property Treaty XS - Risk, NY 1205 Intl Motor Pro-Rata, NY
1103 Property Treaty Excess - Cat, NY 1206 Intl Accident & Health, NY
1104 Retrocessions, NY 1298 Intl Prop Outward Retro
1105 Crop-Hail, NY 1301 Marine Treaty Pro Rata, NY
1106 Casualty Treaty Pro-Rata, NY 1302 Marine Treaty Excess, NY
1107 Cas First Dollar WC, NY 1303 Marine Facultative, NY
1108 Casualty Treaty Excess, NY 1307 Satellite XS, NY
1109 Cas First Dollar Auto, NY (non-program) 1500 non-traditional
1110 LPIC, NY 1800 CCA AIG QS
0000 Xxx Xxxxx Xxxxxx XX/Xxxxx, XX (non-program) 2201 Intl Property Treaty Excess - Risk Miami
1112 NA Accident & Health, NY 2202 Intl Property Pro Rata, Miami
1128 Casualty Treaty Excess - Clash, NY 2203 Intl Casualty Treaty, Miami
1201 Intl Property Pro Rata, NY 2204 Marine Treaty Pro Rata, Miami
1202 Intl Property Treaty Excess - Risk, NY 2205 Intl Motor Pro-Rata, Miami
1203 Intl Property Treaty Excess - Cat, NY
LONDON CLASSES LONDON CLASSES
L06 N. Am Med Mal L89 NA NT 1999
L08 N Am Casualty Treaty L40 N Am Motor Pro Rata
L11 N. Am Cat L41 N Am Motor XL
L17 N Am Property P-R L43 N Am GL Pro Rata
L18 N Am Property Per Risk L44 N Am GL XL
L74 Med Mal PR L48 N Am PI XL
L91 N. Am Crop L63 N Am PI Pro Rata
L21 Int'l Marine P-R B21 Brussels Marine PR
L23 Int'l Property P-R B23 Brussels Int'l Property P-R
L24 Int'l Property Per Risk B24 Brussels Int'l Property Per Risk
L25 Int'l Cat B25 Brussels Int'l Cat
L26 Int'l Motor XS B26 Brusses Int'l Motor
L27 Int'l Casualty Excess B27 Brussels Int'l Liab XS
L32 Int'l Marine XL B32 Brussels Int'l Marine XS
L33 U.K. Property Proportional Treaty B34 Brussels Int'l Liab PR
L34 Int'l Casualty P-R B55 Brussels Int'l Personal Acc P-R
L79 Satelite XS B60 Brussels Int Motor Physical Damage PR
L80 Int'l Motor Liability PR B61 Brussels Engineering PR
L88 Int'l NT 1999 B62 Brussels Engineering XL
B80 Brussels Motor Pro Rata
LONDON CLASSES
B88 Brussels Non Traditional
M21 Munich - Marine PR
M23 Munich - Int'l Property P-R
M24 Munich - Int'l Property Per Risk
M25 Munich - Int'l Cat
M26 Munich - Int'l Motor
M27 Munich - Int'l Liab XS
M32 Munich - Int'l Marine XS
M34 Munich Int'l Liability Pro Rata
M55 Munich Int'l Proportional Personal Accident
M60 Munich International Motor Pro Rata Treaty (MAPD)
M61 Munich International Engineering Pro Rata Treaty
M62 Munich International Engineering Excess Treaty
LL1 L1 GTR Scaleback Europe Class 1
LL2 L2 GTR Scaleback Europe Class 2
LL3 L3 GTR Scaleback Europe Class 3
LL5 L5 GTR Scaleback Europe Class 5
LF1 F1 GTR Scaleback Europe Class 1
LF2 F2 GTR Scaleback Europe Class 2
LF3 F3 GTR Scaleback Europe Class 3
LF5 F5 GTR Scaleback Europe Class 5
SCHEDULE 2.01(b)
Transferred Personal Property
All furniture, fixtures, computers, equipment, machinery and
other tangible personal property present as of the Closing Date on the premises
subject to the subleases and assignments of leases listed in SECTION 3.01(i),
such personal property present on the premises leased by St. Paul at 2-1,
Kudan-kita 4-chome, Chiyoda-ku, Tokyo and leased by St. Paul at 122 Leadenhall
Street, London, and all contracts and agreements relating to any of the
foregoing.
SCHEDULE 2.01(c)
Intellectual Property
------------------------------------------------------------- ---------------
PRODUCT NAME LICENSES TO BE
TRANSFERRED TO
PLATINUM
------------------------------------------------------------- ---------------
------------------------------------------------------------- ---------------
@Risk 2
------------------------------------------------------------- ---------------
Exceed 5 30
------------------------------------------------------------- ---------------
French Assistant 1
------------------------------------------------------------- ---------------
GHOST 6.3 180
------------------------------------------------------------- ---------------
Lotus 1.2.3. v9 63
------------------------------------------------------------- ---------------
Lotus Communications CEO Bundle 180
------------------------------------------------------------- ---------------
MS Project 98 4
------------------------------------------------------------- ---------------
MS FrontPage 98 2
------------------------------------------------------------- ---------------
MS Project 2000 6
------------------------------------------------------------- ---------------
Veritas WinInstall 3
------------------------------------------------------------- ---------------
NAV Corporate Edition 7.5 180
------------------------------------------------------------- ---------------
OrgPlus 3
------------------------------------------------------------- ---------------
Snagit 10
------------------------------------------------------------- ---------------
Spanish Assistant 3
------------------------------------------------------------- ---------------
Spanish Proofing Tools 13
------------------------------------------------------------- ---------------
XTND Connect PC/for Palms and other mobile devices 7
------------------------------------------------------------- ---------------
Visio 2000 3
------------------------------------------------------------- ---------------
------------------------------------------------------------- ---------------
ARCSERVE LICENSES:
------------------------------------------------------------- ---------------
------------------------------------------------------------- ---------------
Advanced Edition 7
------------------------------------------------------------- ---------------
Workgroup Edition 1
------------------------------------------------------------- ---------------
Disaster Recovery Option 3
------------------------------------------------------------- ---------------
Open File Agent 16
------------------------------------------------------------- ---------------
Client Agent 11
------------------------------------------------------------- ---------------
Lotus Notes Agent 6
------------------------------------------------------------- ---------------
SAN Option 4
------------------------------------------------------------- ---------------
------------------------------------------------------------- ---------------
CITRIX (XXXXXXX.XXX):
------------------------------------------------------------- ---------------
Citrix Load Balancing Services 1
------------------------------------------------------------- ---------------
Citrix Load Balancing Services 1
------------------------------------------------------------- ---------------
Citrix User License Pack 50
------------------------------------------------------------- ---------------
Citrix User License Pack 50
------------------------------------------------------------- ---------------
MetaFrame 1.8 - Feature Release 1 Upgrade 1
------------------------------------------------------------- ---------------
MetaFrame 1.8 - Feature Release 1 Upgrade 1
------------------------------------------------------------- ---------------
MetaFrame 1.8 for Win2000 with Subscription 15
------------------------------------------------------------- ---------------
MetaFrame 1.8 for Win2000 with Subscription 15
------------------------------------------------------------- ---------------
------------------------------------------------------------- ---------------
CITRIX (ALL OTHER):
------------------------------------------------------------- ---------------
Citrix User License Pack 100
------------------------------------------------------------- ---------------
Citrix Load Balancing Services 2
------------------------------------------------------------- ---------------
MetaFrame 1.8 - Feature Release 1 Upgrade 2
------------------------------------------------------------- ---------------
MetaFrame 1.8 for Win2000 Migration 2
------------------------------------------------------------- ---------------
------------------------------------------------------------- ---------------
SOFTWARE LICENSES IN USE BY OPERATIONS:
------------------------------------------------------------- ---------------
------------------------------------------------------------- ---------------
PRODUCT NAME LICENSES TO BE
TRANSFERRED TO
PLATINUM
------------------------------------------------------------- ---------------
------------------------------------------------------------- ---------------
HP UX 11.0 OS LTU 6
------------------------------------------------------------- ---------------
HP Mirror Disk 6
------------------------------------------------------------- ---------------
HP Glance Plus 6
------------------------------------------------------------- ---------------
HP C++ Compiler 2
------------------------------------------------------------- ---------------
HP C++ Developers Kit 2
------------------------------------------------------------- ---------------
HP OV OmniBack (Backup Manager LTU) 1
------------------------------------------------------------- ---------------
HP OV OmniBack (Backup Agent LTU) 8
------------------------------------------------------------- ---------------
HP OV NNM Enterprise 1
------------------------------------------------------------- ---------------
Cisco Works 2000 1
------------------------------------------------------------- ---------------
Cisco Router IOS 11
------------------------------------------------------------- ---------------
Cisco PIX Unrestricted Bundle 8
------------------------------------------------------------- ---------------
Cisco PIX Failover Bundle 8
------------------------------------------------------------- ---------------
Cisco 3-DES 2
------------------------------------------------------------- ---------------
MS ISA Server Enterprise Edition 1
------------------------------------------------------------- ---------------
Surf Control SuperScout 1
------------------------------------------------------------- ---------------
Winsyslog 1
------------------------------------------------------------- ---------------
RSA Ace Server 2
------------------------------------------------------------- ---------------
Solaris 8 3
------------------------------------------------------------- ---------------
Avaya Audox VM Software(Morristown) 1
------------------------------------------------------------- ---------------
Avaya phone switch software(Morristown) 1
------------------------------------------------------------- ---------------
Lucent Merlin Messaging VM Software(Chicago) 1
------------------------------------------------------------- ---------------
Lucent Merlin Magix Switch Software(Chicago) 1
------------------------------------------------------------- ---------------
Precovery(Disaster Recovery software) 1
------------------------------------------------------------- ---------------
Actuate Reporting Server 1
------------------------------------------------------------- ---------------
Actuate Developer User 2
------------------------------------------------------------- ---------------
------------------------------------------------------------- ---------------
MICROSOFT PRODUCTS:
------------------------------------------------------------- ---------------
------------------------------------------------------------- ---------------
Office Pro Win32 English SA MVL 180
------------------------------------------------------------- ---------------
Windows Advanced Svr English SA MVL 28
------------------------------------------------------------- ---------------
Windows CAL English SA MVL 180
------------------------------------------------------------- ---------------
Windows CAL 2000 English MSELECT 180
------------------------------------------------------------- ---------------
SQL Server 7.0 2
------------------------------------------------------------- ---------------
SCHEDULE 2.01(g)
Exceptions to Renewal Rights
None.
SCHEDULE 2.01(i)
Information in Respect of Transferred Assets
Originals or copies of all books, records, ledgers, files,
reports, accounts, data, plans and operating records, whether in hard copy,
electronic format, magnetic or other media, which are related to the Transferred
Assets set forth in Section 2.01(a) through (f), including, without limitation,
the pro forma tax and financial records of Platinum US, PROVIDED, HOWEVER, that
the information about the Transferred Assets shall not include minute books
(other than those of Platinum US) and other similar records and files including
tax returns.
SCHEDULE 2.01(j)
Information to be Provided in
Respect of Reinsurance Agreements
Copies of all Reinsurance Agreements, placement slips and
binders, inuring retrocessional contracts, actuarial analyses, underwriting
files, claims files, correspondence with brokers, cedants and inuring
retrocessional reinsurers, and relevant detail (whether in hard copy, electronic
format, magnetic or other media).
SCHEDULE 2.02
Information in Respect of Renewal Rights
Copies of the underwriting files and relevant detail (whether
in hard copy, electronic format, magnetic or other media) for contracts that
were underwritten by St. Paul Re in the 1997, 1998, 1999, 2000, and 2001
underwriting years and the customer and brokers lists relevant to the Renewal
Rights, in each case relating to the Transferred Lines, including copies of
contracts, placement slips and binders, inuring retrocessional contracts,
actuarial analyses, information pertaining to aggregate premium and loss
activity, correspondence with brokers, cedants and inuring retrocessional
reinsurers but excluding any information that St. Paul reasonably believes to be
attorney-client privileged and any individual claims or loss information.
SCHEDULE 3.02(a)
EXPENSES PAYABLE BY THE COMPANY
1. Fees, disbursements and expenses of David Greenfield of KPMG LLP and
his team.
2. Fees, disbursements and expenses of Dewey Ballantine LLP.
3. Fees, disbursements and expenses of Conyers Dill & Pearman, Slaughter
and May and A&L Goodbody for work done in connection with the formation
and licensing of the Company, Platinum Bermuda, Platinum UK and
Platinum Regency, and all registration, filing, licensing and
organization fees and Taxes in connection therewith, except (i) any
income, gains, franchise, and similar taxes imposed on St. Paul or any
of its Affiliates with respect to the transfer of the Transferred
Business and (ii) any conveyance Taxes covered by Section 8.02.
4. Registration, filing and listing fees, including SEC, NASD and NYSE.
5. Printing and engraving expenses.
6. Underwriters' commission and fees as required by the Underwriting
Agreement.
7. Any costs in connection with qualification under state securities laws.
8. Transfers agent and registrar fees.
9. Fees and expenses associated with establishing a line of credit and
obtaining ratings.
10. Costs associated with the change of Platinum US's name.
11. 50% of the initial bonus and relocation expenses advanced by St. Paul
to the Company in respect of Michael Price.
12. Any other fees and expenses relating to the organization and initial
public offering of the Company and the operation of its business that
St. Paul or another party has not specifically agreed to pay.
SCHEDULE 3.02(b)
EXPENSES PAYABLE BY ST. PAUL
1. Fees, disbursements and expenses of KPMG LLP other than those
specifically allocated to the Company.
2. Fees, disbursements and expenses of Sullivan & Cromwell.
3. Fees, disbursements and expenses of Conyers Dill & Pearman, Slaughter
and May and A&L Goodbody for work on the intercompany agreements and
for (i) any income, gains, franchise, and similar taxes imposed on St.
Paul or any of its Affiliates with respect to the transfer of the
Transferred Business and (ii) any conveyance Taxes covered by Section
8.02.
SCHEDULE 4.02
Agreements between Platinum US and St. Paul or St. Paul
Subsidiaries to be Terminated
1. Bulk Reinsurance Contract, dated as of November 30, 1995, between
Platinum Underwriters Reinsurance, Inc. and United States Fidelity and
Guaranty Insurance Company.
2. Agreement for Services and Other Resources, dates as of April 27, 1998,
between St. Paul Fire and Marine Insurance Company and Platinum
Underwriters Reinsurance, Inc.
3. Agreement for Investment Management Services, dates as of April 27,
1998, between The St. Paul Companies, Inc. and Platinum Underwriters
Reinsurance, Inc.
4. Tax Sharing Agreement, dated as of April 25, 1998, between The St. Paul
Companies, Inc., USF&G Corporation and each of the subsidiary members
of the USF&G Corporation Affiliated Group that has executed the
Agreement.
SCHEDULE 5.04(a)(i)
Exceptions to Good and Marketable Title of Transferred Assets
St. Paul makes no representations as to the marketable title
to the Employment Agreements and information (including, but not limited to,
personnel files and employee records and reports) relating to the Newly Hired
Employees.
Certain rights to the intellectual property listed on SCHEDULE
2.01(c) may not be transferred without the consent of a third party. While St.
Paul and its relevant Subsidiaries will use commercially reasonable efforts to
obtain such consents, they shall not have any liability to the Company or any
Subsidiary of the Company to the extent any such consent is not obtained by the
Closing Date and, for greater certainty, none of St. Paul nor any Subsidiary of
St. Paul shall be required to make any payment to a third party to procure the
transfer of rights to any intellectual property.
SCHEDULE 5.04(a)(ii)
Encumbrances on Transferred Assets
The photocopying, printing, facsimile, mailroom and beverage
service equipment included in the Transferred Assets is subject to various lease
agreements with third parties.
SCHEDULE 5.06(c)
Statutory Periods of Limitations
Platinum US's Federal tax statutory period of limitations has been extended for
tax years 12/31/1995, 12/31/1996, 12/31/1997 and 4/24/1998 until 12/31/2002 and
for tax year 12/31/1998 until 9/15/2003.
SCHEDULE 5.06(d)
Tax-related Agreements
Platinum US is part of a tax sharing agreement, dated as of April 25, 1998,
between The St. Paul Companies, Inc., USF&G Corporation and each of the
subsidiary members of the USF&G Corporation that have executed the Agreement. As
provided in Section 4.02 and the associated schedule, this agreement will be
terminated effective as of the closing date.
SCHEDULE 5.06(f)
Tax Delinquencies, Claims, Audits, Examinations,
Actions, Suits, Proceedings or Investigations in
Progress or Pending
Platinum US is included in the consolidated Federal tax audit of the USF&G
Corporation consolidated group through 4/24/1998. Platinum US is included in the
consolidated Federal audit of The St. Paul Companies, Inc. consolidated group
for years ending 12/31/1998 through 12/31/2000. No adjustments have been
proposed to Platinum US in either audit and none are expected.
SCHEDULE 5.06(h)
Platinum US Affiliated Group Membership
for Tax Filings
Platinum US filed a Federal tax return as part of the USF&G Corporation
consolidated Federal tax return from its formation until 4/24/1998. After USF&G
Corporation and The St Paul Companies, Inc. merged on 4/24/1998, Platinum US
filed its Federal tax return as part of the St Paul Companies, Inc. consolidated
tax group.
SCHEDULE 5.07
Contracts of Platinum US
Custody Agreement made as of December 13, 1995 by and between Platinum
Underwriters Reinsurance, Inc. and First National Bank of Maryland, a Maryland
banking corporation.
SCHEDULE 6.02(b)
Regulatory Approvals Required to be Obtained by the Company or
its Post-Closing Subsidiaries Prior to the Closing
Maryland Consent to Change of Control, Name Change, Additional Business Lines
(including, without limitation, accident and health insurance), and the
Ancillary Agreements to which Platinum US is a Party.
Bermuda Insurance License.
New York License.
SCHEDULE 7.01(a)(ii)
Hiring Restrictions
Any officer of the Company designated as an Assistant Vice President or more
senior.
SCHEDULE 9.02(e)
FULL AND COMPLETE RELEASE
(a) I, ____________, as a material inducement to
The St. Paul Companies, Inc. ("St. Paul") to enter into the Formation and
Separation Agreement between The St. Paul Companies, Inc. and Platinum
Underwriters Holdings, Ltd., dated as of June __, 2002, (the "Formation
Agreement") and for other good and valuable consideration, the receipt of which
is hereby acknowledged, for myself and my heirs, executors, administrators and
assigns, do hereby knowingly and voluntarily release and forever discharge St.
Paul and all of its Affiliates (as defined in the Formation Agreement), parents,
subsidiaries and related entities, and all of its past, present and future
respective agents, officers, directors, shareholders, employees, attorneys and
assigns from any federal, state or local charges, claims, demands, actions,
liabilities, suits, or causes of action, at law or equity or otherwise and any
and all rights to or claims for continued employment after the Closing Date (as
defined in the Formation Agreement), attorneys fees or damages (including
contract, compensatory, punitive or liquidated damages) or equitable relief,
which I may ever have had, have now or may ever have or which my heirs,
executors or assigns can or shall have, against any or all of them, whether
known or unknown, on account of or arising out of my employment with St. Paul or
the separation thereof; provided, however, that the foregoing shall not
constitute a release of (i) any claim for indemnification or insurance relating
to my acts or omissions that constitute "St. Paul Liabilities," as defined in
the Formation Agreement, nor (ii) any claim for compensation or benefits that is
accrued through the Closing Date but unpaid under the terms of my employment
agreement with the St. Paul dated __________ __, 2002.
(b) This release includes, but is not limited to
rights and claims arising under the Age Discrimination in Employment Act of
1967, as amended by the Older Workers Benefit Protection Act of 1990 ("ADEA"),
Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 1981,
the Americans with Disabilities Act, the Worker Adjustment and Retraining
Notification Act, the Fair Labor Standards Act, the Family and Medical Leave
Act, any state or local human rights statute or ordinance, any claims or rights
of action relating to breach of contract, public policy, personal or emotional
injury, defamation, additional compensation, or fringe benefits. I specifically
waive the benefit of any statute or rule of law which, if applied to this
release, would otherwise exclude from its binding effect any claims not now
known by me to exist. This release does not purport to waive claims arising
under these laws after the date hereof.
(c) I covenant and agree not to sue or bring any
action, whether federal, state, or local, judicial or administrative, now or at
any future time, against St. Paul, its Affiliates, its or their respective
agents, directors, officers or employees, with respect to any claim released
hereby or arising out of my employment with St. Paul or its Affiliates.
Nevertheless, this release does not purport to limit any right I may have to
file a charge under the ADEA or other civil rights statute or to participate in
an investigation or proceeding conducted by the Equal Employment Opportunity
Commission or other investigatory agency. This release does, however, waive and
release any right to recover damages under the ADEA or other civil rights
statute.
I represent and warrant that I have not sold, assigned,
transferred, conveyed or otherwise disposed of to any third-party, by operation
of law or otherwise, any action, cause of action, suit, debt, obligation,
account, contract, agreement, covenant, guarantee, controversy, judgment,
damage, claim, counterclaim, liability or demand of any nature whatsoever
relating to any matter covered by this release.
(d) I hereby acknowledge that I have been
granted at least twenty-one (21) days within which to consider this release.
This duly executed release must be RECEIVED by St. Paul by the close of the
business day on the twenty-first (21st) day after the date hereof. The Agreement
must be delivered to St. Paul personally or by certified mail, to the attention
of the General Counsel at the address indicated below. I further acknowledge
that I have been advised to consult with legal counsel prior to executing this
release. I understand that if I execute this release prior to the expiration of
twenty-one (21) days, or choose to forgo the advice of legal counsel, I do so
freely and knowingly, and waive any and all future claims that such action or
actions would affect the validity of this release. I understand that I may
cancel this release at any time on or before the seventh (7th) day following the
date on which I sign the release. To be effective, the decision to cancel must
be in writing and delivered to St. Paul, personally or by certified mail, to the
attention of the General Counsel at the address indicated below on or before the
seventh (7th) day after I sign this release.
All notices hereunder must be mailed by first class mail or by
certified mail addressed as follows:
The St. Paul Companies, Inc. or St. Paul Re, Inc.
385 Washington Street
St. Paul, Minnesota 55102
Attention: General Counsel
This release is the complete understanding between me and St.
Paul in respect of the subject matter of this release and supersedes all prior
agreements relating to the same subject matter. I have not relied upon any
representations, promises or agreements of any kind except those set forth
herein in signing this release.
In the event that any provision of this release should be held
to be invalid or unenforceable, each and all of the other provisions of this
release shall remain in full force and effect. If any provision of this release
is found to be invalid or unenforceable, such provision shall be modified as
necessary to permit this release to be upheld and enforced to the maximum extent
permitted by law. This release is to be governed by and construed and enforced
in accordance with the laws of the State of New York without reference to rules
relating to conflict of laws. This release inures to the benefit of St. Paul,
its Affiliates and its successors and assigns. I have carefully read this
release, fully understand each of its terms and conditions, and intend to abide
by this release in every respect. As such, I knowingly and voluntarily sign this
release.
________________________________
[Name]
Dated as of [___________ ___, 2002]
SCHEDULE 10.02(b)
St. Paul Information
[Insert S-1 "letter" mark-up]
SCHEDULE 10.02(c)
Shared Information
[Insert S-1 "letter" mark-up]
SCHEDULE 11.01
Excluded Classes
The following business is to be excluded from transfer.
New York Classes
---------------- London Classes
--------------
1109 Cas First Dollar Auto, NY (program)
1111 Cas First Dollar GL/Other, NY (program)
1304 OMPT_AVT L12 N. Am Prof
1305 Aviation XS, NY L13 Intl Prof
1306 Satellite Pro Rata, NY L14 NA Property Binders
1401 Bond, NY L98 U.S. Run-Off Business
1402 Credit, NY L20 LMX/Retro Prop
1403 Other Specialty, NY L22 LMX/Retro Cas
1600 Fac Runoff L30 N Am Cas E&S
1606 Casualty Fac Redhawk, NY L31 N Am Binders Cas
2601 Intl Property Facultative, Miami L15 Aviation
3201 Motor Pro-Rata, Singapore L19 Int'l Credit
3203 Intl Property Pro Rata, Singapore L35 Financial Long Tail
3204 Intl Property Excess, Singapore L67 Sattelite
3205 Intl Casualty Treaty, Singapore R21 Marine Runoff
3301 Marine Treaty Pro Rata, Singapore R22 Casualty Retro Runof
3601 Intl Property Facultative, Singapore L97 Int Property Runoff
4201 Medical Malpractice, Sydney L98 NA Casualty Runoff
4202 Casualty Treaty, Sydney B36 Brussels Financial Lines Short Tail PR
Credit, Sydney B37 Brussels Financial Lines Short Tail XL
Art, Sidney B56 Brussels Non-Marine Fac Pro Rata
London Classes
--------------
B57 Brussels Non-Marine Fac Excess
B58 Brussels Marine Fac Pro Rata
B59 Brussels Marine Fac Excess
B67 Brussels Sattelite PR
B77 Brussels Aviation Liability Pro Rata Treaty
B78 Brussels Aviation Hull Pro Rata Treaty
B90 Brussels Fin Lines Pro Rata
M97 Munich Int'l Run-Off Business
LL4 L4 GTR Scaleback Europe Class 4
LF4 F4 GTR Scaleback Europe Class 4
