EXHIBIT 10.9
DATED May 15, 2002
TRUST AGREEMENT
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"The Patriot 2002 Trust"
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Xxxxxxx Xxxxxxxx & Xxxxx
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Bermuda
The Patriot 2002 Trust
INDEX
Clause Subject Page
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1. Definitions and Construction........................................................................1
2. Name and Proper Law.................................................................................5
3. Deposit of Assets into the Trust Fund...............................................................5
4. The Trust Fund......................................................................................5
5. Powers regarding Assets and Income .................................................................5
6. Investment of Trust Fund...........................................................................7
7. Additional Powers..................................................................................7
Power to Manage as if Absolute Owner...............................................................8
Power to Receive Additions.........................................................................8
Power to Vote and Give Proxies.....................................................................8
Power to Keep Trust Fund Abroad....................................................................8
Power to Pay Duties................................................................................9
Power to Execute Documents.........................................................................9
Power to Prosecute and Defend......................................................................9
Power to Distribute in Specie......................................................................9
Power to Seek Legal Advice........................................................................10
Power to Appoint Investment Advisor...............................................................10
Power to Delegate Generally.......................................................................11
Power to Act notwithstanding Personal Interest....................................................11
8. Additional Rights and Duties of the Trustee.......................................................11
9. Trustee's Remuneration............................................................................12
10. Indemnity..........................................................................................12
11. Receipt of Income..................................................................................13
12. Protection of Third Parties........................................................................13
13. Trustee acting as Director etc. and Agent..........................................................13
14. Overseeing Management of Companies.................................................................14
15. Trustee's Discretion...............................................................................14
16. Notice.............................................................................................14
17. Severability ......................................................................................15
18. Succession and Assigns.............................................................................15
19. Appointment and Retirement of Trustee..............................................................15
20. Settlor's Power to Change Proper Law and Forum.....................................................16
21. Counterparts.......................................................................................17
22. Power to Vary......................................................................................17
23. Termination of the Trust...........................................................................17
24. Arbitration........................................................................................18
25. Irrevocable Trust Agreement........................................................................19
FIRST SCHEDULE.....................................................................................19
SECOND SCHEDULE....................................................................................19
THIRD SCHEDULE.....................................................................................20
FOURTH SCHEDULE....................................................................................21
THIS TRUST AGREEMENT is made the 15th day of May, 2002 AMONG SELECT REINSURANCE
LTD, a reinsurance company incorporated under the laws of Bermuda (the
"Settlor"), CAPITAL G TRUST LIMITED, a licensed trust company incorporated under
the laws of Bermuda (the "Original Trustee") and PXRE REINSURANCE LTD, a
reinsurance company incorporated under the laws of Bermuda (the "Beneficiary").
W H E R E A S :
(A) The Settlor and the Beneficiary have entered into certain Reinsurance
Agreements (the "Reinsurance Agreements") set forth in the First
Schedule; and
(B) The Settlor has agreed to secure payment of all Obligations from time
to time owing by the Settlor to the Beneficiary under or in connection
with the Reinsurance Agreements; and
(C) The Beneficiary has issued the Policy in favour of the Settlor; and
(D) The Settlor desires to transfer to the Trustee the sum of money
specified in the Second Schedule and anticipates it will transfer or
otherwise place under the control of the Trustee further assets by way
of addition to the Trust Fund in order to secure Obligations under or
in connection with the Reinsurance Agreements; and
(E) The Settlor and the Beneficiary have further agreed that the Assets
shall be applied to secure the obligations of the Beneficiary under the
Policy; and
(F) The Trustee has agreed to act as trustee hereunder and to hold the
Trust Fund upon the terms of this Trust Agreement for the benefit of
the Beneficiary and the Settlor, such that the Assets of the Trust Fund
shall be held for the benefit of the Beneficiary while Obligations
remain outstanding provided that there has not been an Event of
Insolvency on the part of the Beneficiary; and for the Settlor in the
event that no Obligations remain outstanding or in the event that there
are certain monies owed under the Policy and there has been an Event of
Insolvency, and such that the Income of the Trust Fund shall be held
for the Settlor; and
(G) This Trust Agreement is made for the benefit of the Beneficiary and the
Settlor and to set forth the duties and powers of the Trustee with
respect to the Trust Fund.
NOW THIS DECLARATION WITNESSES as follows:
1. Definitions and Construction
In this Declaration, wherever the context permits, the following
definitions and rules of construction shall apply:
1.1 "Affiliate" means, with respect to any company, a company
which directly, or indirectly through one or more
intermediaries, controls or is controlled by, or is under
common control with, such company;
1.2 "Asset" means any asset deposited in the Trust Fund (being
collectively referred to as "Assets";
1.3 "Authorised Signatory" means in relation to the Trust or the
Trust Fund or to matters relating thereto, any person who is
identified by respectively the Beneficiary and the Settlor as
an authorised signatory from time to time. A certificate of
the corporate secretary of the Beneficiary or the Settlor may
be received and accepted by the Trustee as conclusive evidence
of, or a change of, an Authorised Signatory who may provide
written or telefaxed directions or instructions on behalf of
the Settlor or the Beneficiary, as the case may be, and may be
considered as remaining in full force and effect until receipt
by the Trustee of written notice to the contrary from the
Settlor or the Beneficiary, as the case may be;
1.4 "Beneficiary" means PXRE Reinsurance Ltd. or its successors or
assigns including in liquidation;
1.5 "Business Day" means any week day on which business is
transacted in Bermuda which is not a public holiday;
1.6 "company" means any body, incorporated or established in any
part of the world, which has a legal existence independent of
that of its members;
1.7 "control" (including the related terms "controlled by" and
"under common control with") means the ownership, directly or
indirectly, of more than fifty percent (50%) of the voting
shares of a company;
1.8 "deed" means any instrument in writing which is signed,
witnessed and dated, or otherwise validly executed in
accordance with the law of the place where it is executed;
1.9 "Designee" means a person designated in a Withdrawal Notice to
receive Assets on behalf of the Beneficiary;
1.10 "Event of Insolvency" means an event whereby the Beneficiary
or PXRE Reinsurance Company has become subject to an
insolvency, liquidation, rehabilitation proceedings,
administrative supervision or governmental action related to
the impaired financial position of the Beneficiary or PXRE
Reinsurance Company;
1.11 "Income" means any interest, dividends and other income which
is paid with respect to the Assets;
1.12 "Income Account" means a separate account established and
maintained by the Settlor at the office of the Trustee for the
receipt of Income in respect of Assets in the Trust Fund;
1.13 "Obligations" means, with respect to the Reinsurance
Agreements, the Settlor's share of (i) ultimate net losses,
reinsurance losses, allocated loss adjustment expenses,
contingent commissions, no claim bonuses, profit commissions
and return premiums upon cancellation, paid by the Beneficiary
but not recovered from the Settlor; (ii) reserves for
reinsured losses reported and outstanding; (iii) reserves for
reinsured losses incurred but not reported; (iv) reserves for
allocated loss adjustment expenses; (v) commissions, no claim
bonuses and profit commissions owed by the Beneficiary to
third parties. If, for any reason, the Trustee pays its
remuneration or any other amounts to or for the account of the
Trustee out of the Assets of the Trust Fund, the Obligations
shall be reduced by such amounts, unless the payment relates
to Indemnity provided by the Settlor as outlined in Clause
10.1 of this Trust Agreement.
1.14 "Parent" means an institution which, directly or indirectly,
controls another institution;
1.15 "person" includes any individual, company, partnership and
unincorporated association and any person acting in a
fiduciary capacity;
1.16 "Policy" means the Financial Guarantee Insurance Policy number
HB79211346 and dated February 29, 2002 which was issued by the
Beneficiary to the Settlor;
1.17 "Proper Instructions" means written or telefaxed directions,
certificates, instructions or consents to be provided by the
Settlor or the Beneficiary and signed by an Authorised
Signatory of the Settlor or the Beneficiary or either of them
as the case may be;
1.18 the "Proper Law of this Trust" means the law of the
jurisdiction under which questions affecting the validity,
construction and effect of this Declaration and each and every
provision hereof are to be determined;
1.19 "Subsidiary" means an institution controlled, directly or
indirectly, by another institution.
1.20 the "Trust Fund" means:
1.20.1 the sum of money specified in the Second Schedule;
1.20.2 all property hereafter paid, transferred to or
otherwise placed under the control of and accepted by
the Trustee as additions to the Trust Fund and in
respect of which a memorandum signed by the Trustee
shall be conclusive evidence absent manifest error;
1.20.3 all Income which shall in accordance with the
provisions of this Declaration be credited by the
Trustee into the Income Account; and
1.20.4 the money, investments and other property from time
to time representing the sum of money specified in
the Second Schedule and the said additions;
1.21 the "Trust Period" means the period commencing on the date
hereof and ending on whichever shall be the earlier of the
following days:
1.21.1 the day on which shall expire the period of one
hundred years from the date hereof; and
1.21.2 such day, if any, as (a) the Settlor and the
Beneficiary may determine in accordance with the
power conferred on them by Clause 23.1, or (b) the
Settlor may determine in accordance with the powers
conferred on it by Clause 23.2;
1.22 the "Trustee" means the trustee for the time being hereof;
1.23 "this Trust" means the trust created by this Trust Agreement;
1.24 "Withdrawal Notice" means the notice of withdrawal given by
the Beneficiary to the Trustee in the form attached as the
Third Schedule;
1.25 "Withdrawal Request" means the withdrawal request given by the
Settlor to the Trustee in the form attached as the Fourth
Schedule;
1.26 words denoting any gender shall include both the other genders
where appropriate;
1.27 words denoting the singular shall include the plural and vice
versa where appropriate;
1.28 the index and headings (other than those of the Schedules) in
this Declaration are inserted for convenience of reference
only and shall have no legal effect, nor shall they affect in
any way the construction of any Clause contained herein;
1.29 any reference to a sub-Clause or paragraph shall, unless the
context precludes such a construction, be read as a reference
to the particular sub-Clause or paragraph of the Clause or
sub-Clause in which the reference occurs;
2. Name and Proper Law
2.1 This Trust shall be known as "The Patriot 2002 Trust" or by
such other name as the Trustee may from time to time
determine.
2.2 This Trust is established under, and (subject to Clause 20.1)
the Proper Law of this Trust shall be, the laws of Bermuda and
the courts of Bermuda shall be the forum for the
administration thereof.
3. Deposit of Assets into the Trust Fund
3.1 The Settlor shall establish the Trust Fund for the benefit of
the Beneficiary and the Settlor and the Trustee shall
administer the Trust Fund in its name as trustee for the
Beneficiary and the Settlor. The Trust Fund shall be subject
to withdrawal by the Beneficiary and the Settlor as provided
herein.
3.2 The Settlor may transfer such Assets to the Trustee, for
deposit into the Trust Fund, as it may from time to time
desire.
4. The Trust Fund
The Trustee shall hold the Trust Fund and the income thereof UPON TRUST
for the Beneficiary and the Settlor to pay and apply the same in such
manner as set out in Clause 5 below.
5. Powers regarding Assets and Income
5.1 Unless the Trustee has received Proper Instructions from the
Settlor stating that there has been an Event of Insolvency or
a claim under the Policy is outstanding, and subject to the
provisions of Clauses 5.2 to 5.9, the Trustee shall, during
the Trust Period, without notice to the Settlor, pay,
transfer, appropriate or apply the whole or any part of the
Assets of the Trust Fund to or for the benefit of the
Beneficiary in such manner as the Beneficiary shall direct by
a Withdrawal Notice. Subject to the foregoing, upon receipt of
a Withdrawal Notice, the Trustee shall immediately take all
steps that are necessary to transfer and deliver the Assets
specified in the Withdrawal Notice to, or for the account of,
the Beneficiary or any Designee.
5.2 The Beneficiary hereby covenants with the Settlor that it
shall make withdrawals from the Trust Fund and use and apply
any Assets withdrawn from the Trust Fund only to pay or
reimburse the Beneficiary for the unpaid or unreimbursed
portion of the Settlor's share of the Obligations as specified
in Clause 1.13(i) after netting any such amounts against
amounts owed to the Settlor by the Beneficiary.
5.3 The Trustee shall have no responsibility whatsoever to
determine that any Assets withdrawn from the Trust Fund
pursuant to Clause 5.1 of this Trust Agreement will be used
and applied in the manner contemplated by Clause 5.2.
5.4 When the Trustee is directed to deliver Assets against
payment, delivery will be made in accordance with the
procedures applicable to the Asset class, or if none are
provided, then within five (5) Business Days. Assets in the
Trust Fund shall be valued according to their current fair
market value.
5.5 No Assets shall be withdrawn from the Trust Fund or used in
any manner for paying compensation to, or reimbursing expenses
of, or indemnifying, the Trustee except for indemnification
provided by the Settlor to the Trustee under Clause 10.1.
5.6 All Income in respect of Assets in the Trust Fund shall be for
the benefit of the Settlor and shall be deposited by the
Trustee in the Income Account.
5.7 Notwithstanding any provision to the contrary, if the Trustee
has received Proper Instructions from the Settlor stating that
there has been an Event of Insolvency or a claim under the
Policy is outstanding, the Trustee shall provide a copy of
such Proper Instructions to the Beneficiary forthwith and pay
and transfer to or for the account of the Settlor such part of
the Assets of the Trust Fund as is stated in the Withdrawal
Request accompanying the Proper Instructions to be required to
settle the amounts outstanding under the Policy or which the
Settlor instructs should be set aside pending determination of
the amount due under the Policy due to an Event of Insolvency,
unless objected to in writing by the Beneficiary to the
Settlor and Trustee within five (5) Business Days of the
notice from the Trustee of Settlor's Proper Instructions, and
if so objected to, then as jointly instructed by the Settlor
and the Beneficiary or as directed by an arbitration award
entered in accordance with procedures set out in Clause 24
that is no longer subject to appeal. Any Assets remaining
thereafter shall be paid as otherwise provided for in this
Trust Agreement.
5.8 In the event that the value of the Assets exceeds one-hundred
percent (100%) of the amount required to fund the Obligations
as determined by the Settlor, the Trustee shall, during the
Trust Period, pay, transfer, appropriate or apply such part of
the Assets of the Trust Fund to or for the benefit of the
Settlor in such manner as the Settlor shall direct by a
Withdrawal Request to the Trustee. Upon receipt of a
Withdrawal Request the Trustee shall immediately take all
steps which are necessary to transfer and deliver the Assets
specified in the Withdrawal Request to, or for the account of,
the Settlor.
5.9 In the event that all the Obligations of the Settlor have been
discharged, as jointly agreed by the Beneficiary and the
Settlor, or determined in an arbitration award that is no
longer subject to appeal, issued under the arbitration
procedures as set out in Clause 24, the Trustee shall, subject
its statutory rights for payment of sums due to it, pay,
transfer, appropriate or apply the whole or any part of the
Trust Fund, to or for benefit of the Settlor.
6. Investment of Trust Fund
6.1 Subject to Clause 6.2 trust monies to be invested under the
trusts hereof may be applied or invested in the purchase or
acquisition of or upon the security of such stocks, bonds,
shares of private investment partnerships, limited partnership
interests, shares of hedge fund companies, securities (whether
bearing interest or paying dividends or not), other
investments (including derivative investments) or property of
whatever nature and wheresoever situate, whether producing
income or not or upon personal or other credit, with or
without security.
6.2 The Trustee shall at all times be bound by and only act upon
the directions of the Settlor in the investment of the Trust
Fund and the Trustee shall not be liable for any loss
occasioned thereby and any loss incurred by reason of acting
upon such a direction shall be borne by the Trust Fund solely.
6.3 The Settlor shall have the power to instruct the Trustee to
deliver any Assets as instructed by the Settlor provided that
the Trustee receives, simultaneously with or prior to such
delivery, Assets of the same or greater value than those
delivered out as determined by the Settlor.
6.4 The Settlor shall have the power to exercise all rights with
respect to the Assets that the owner of record would have the
right to exercise provided the value of the Trust Fund is not
less than the amount of the Obligations by virtue of the
exercise of any such rights.
7. Additional Powers
7.1 The Trustee shall, during the Trust Period and such further
period (if any) as the law shall allow, have the following
additional powers:
Power to Manage as if Absolute Owner
7.1.1 subject to Clause 6.2. and 6.4, power to effect any
transaction concerning or affecting any part of the
Trust Fund or any other property whatsoever, if the
Trustee considers the transaction is for the
benefit of the Trust Fund or of the Beneficiary or
the Settlor or any of them, as if the Trustee were
an absolute owner beneficially entitled to the
Trust Fund;
Power to Receive Additions
7.1.2 power to receive any property as an addition to
the Trust Fund;
Power to Vote and Give Proxies
7.1.3 with respect to any investments constituting the
whole or part of the Trust Fund, the Trustee shall
forward all annual and interim company reports and
all proxies and proxy materials relating to the
Assets to the Settlor who shall have the full and
unqualified right to vote in respect of such
Assets;
Power to Keep Trust Fund Abroad
7.1.4 (a) power to keep the whole or any part of the
Trust Fund either within or outside Bermuda and, if
the Trustee think fit, to hold in any part of the
world all or any securities or other property in
bearer form or in the names of the Trustee or in
the name of some other appointed nominee without
disclosing the fiduciary relationship, with power
to remunerate such nominee, provided the Trustee
acts in a prudent manner in holding assets in the
name of a third party or outside Bermuda and such
action by the Trustee will not subject the Assets
of the Trust Fund, the Settlor or the Beneficiary
to any form of taxation, duties or other
governmental charges in any jurisdiction.
(b) Unless consented to by the Settlor, if the
Trustee voluntarily moves the Assets from where
such Assets were originally domicilied when
contributed to the Trust Fund by the Settlor, then
any resulting duties, fees, taxes or other
governmental charges shall be for the account of
the Trustee and paid directly by the Trustee or
restored by the Trustee to the Trust Fund if paid
therefrom. Additionally, if the voluntary movement
of such Assets by the Trustee allows them to be
attached or levied upon in any dispute, the
reduction in Assets shall be restored by the
Trustee. This provision 7.1.4 (b) shall
additionally apply to Clause 7.1.5 below;
Power to Pay Duties
7.1.5 in the event of any duties, fees, taxes or other
governmental charges whatsoever becoming payable in
any part of the world in respect of the Trust Fund
or any part thereof in any circumstances whatsoever,
power to pay all such duties, fees, taxes or other
governmental charges out of the Trust Fund or the
income thereof, with discretion as to the time and
manner in which the said duties, fees, taxes or
other governmental charges shall be paid and the
Trustee may pay such duties, fees, taxes or other
governmental charges notwithstanding that the same
shall not be recoverable from the Trustee, except in
circumstances covered by Clause 7.1.4, or from the
Beneficiary or that the payment shall not be to the
advantage of the Beneficiary;
Power to Execute Documents
7.1.6 subject to Clause 6.4, power to make, execute and
deliver deeds, assignments, transfers, and other
instruments, sealed and unsealed but only to carry
out its delivery obligations hereunder;
Power to Prosecute and Defend
7.1.7 subject to Clause 6.4, power to institute,
prosecute and defend any suits or actions or other
proceedings affecting the Trustee in respect of the
Trust or the Trust Fund and to compromise any such
matter of difference or to submit such matter to
arbitration and to compromise or compound any debt
owing to the Trustee or any other claims in respect
of the Trust or the Trust Fund and to adjust any
disputes in relation to such debts or claims
against them as such Trustee upon evidence that to
the Trustee shall seem sufficient;
Power to Distribute in Specie
7.1.8 power to make any distribution of the Assets of the
Trust Fund pursuant to the trusts hereof in cash or
in kind or partly in cash and partly in kind;
Power to Seek Legal Advice
7.1.9 power, at the expense of the Beneficiary, to seek
the opinion or advice of legal counsel concerning
any question arising under this Trust Agreement or
on any matter in any way relating to the Trust Fund
or the duties of the Trustee in connection with this
Trust and the Trustee shall not be liable for any
action taken in good faith pursuant to or otherwise
in accordance with the opinion or advice of such
counsel;
Power to Appoint Investment Advisor
7.1.10 at the written direction of the Settlor only, power
to engage the services of such investment counsel,
advisor or manager (the "Investment Advisor") as the
Trustee may from time to time think fit and that is
approved by the Settlor (including any Trustee or
any Parent, Subsidiary or Affiliate of a corporate
Trustee) in order to obtain advice on the investment
and reinvestment of the Trust Fund and to delegate
to the Investment Advisor, without being liable for
any consequential loss, discretion to manage the
investments comprised in the Trust Fund or any part
thereof and to make such changes therein and to deal
in such manner therewith as the Investment Advisor
may from time to time think fit if such power was
approved in advance by the Settlor and, for that
purpose, to deposit with or transfer into the name
or under the control of the Investment Advisor all
or any of the investments comprised in the Trust
Fund. If an Investment Advisor is used, such
Investment Advisor shall be remunerated separately
by the Settlor with its own funds and the Assets
shall not be used for such remuneration.;
7.1.11 the Trustee shall not be required to enquire into
nor be in any manner responsible for any change in
the legal status of the Investment Advisor, whether
resulting from the death of any director thereof or
its reorganisation, incorporation, merger,
consolidation or otherwise;
7.1.12 subject to Clause 9.8, the Trustee shall not be
liable for any action taken or not taken by the
Investment Advisor or for any action taken by the
Trustee pursuant to or otherwise in accordance with
the advice of the Investment Advisor, howsoever
communicated;
Power to Delegate Generally
7.1.13 subject to prior approval of the Beneficiary and
Settlor, power to delegate to any person at any time
for any period and in any manner and upon any terms
whatever, the execution or exercise of the trusts,
powers and discretions (or any one or more of them)
imposed or conferred on the Trustee by this Trust
Agreement or by law or otherwise, and (subject to
Clause 8.7) the Trustee shall not be liable for any
acts or defaults of any such delegate or any loss to
the Trust Fund resulting therefrom;
Power to Act notwithstanding Personal Interest
7.1.14 subject to the other provisions of the Trust
Agreement, power to enter into any transaction
concerning the Trust Fund (a) notwithstanding that
the Trustee may be interested in the transaction
other than as a Trustee and (b) without being liable
to account for any reasonable incidental profit;
8. Additional Rights and Duties of the Trustee
8.1 The Trustee shall notify the Settlor and the Beneficiary in
writing within five (5) Business Days following each deposit
to, or withdrawal from, the Trust Fund.
8.2 Before accepting any Asset for deposit to the Trust Fund, the
Trustee shall determine that such Asset is in such form that
the Beneficiary, or the Trustee upon direction by the
Beneficiary, may, whenever necessary, negotiate such Asset in
accordance with the terms of this Trust Agreement without
consent or signature from the Settlor or any other person or
entity other than the Trustee.
8.3 The Trustee may deposit any Assets in the Trust Fund in a
book-entry account maintained at the Federal Reserve Bank of
New York or in United States' depositories such as the
Depository Trust Company. Assets may be held in the name of a
nominee maintained by the Trustee or by any such depository.
8.4 The Trustee shall accept and open all mail directed to the
Settlor or the Beneficiary in care of the Trustee.
8.5 The Trustee shall furnish to the Settlor and the Beneficiary a
statement of all Assets in the Trust Fund upon the inception
of the Trust Fund and at the end of each calendar quarter
thereafter within t hirty (30) calendar days after the end of
such calendar quarter.
8.6 Upon the request of the Settlor or the Beneficiary, the
Trustee shall promptly permit the Settlor or the Beneficiary,
their respective agents, employees or independent auditors to
examine, audit, excerpt, transcribe and copy, during the
Trustee's normal business hours, any books, documents, papers
and records relating to the Trust Fund or the Assets.
8.7 The duties and obligations of the Trustee shall only be such
as are specifically set forth in this Trust Agreement, as it
may from time to time be amended, and no implied duties or
obligations shall be read into this Trust Agreement against
the Trustee. The Trustee shall be liable only for its own
negligence, wilful misconduct, dishonesty or fraud.
8.8 No provision of this Trust Agreement shall require the Trustee
to take any action which, in the Trustee's reasonable
judgment, would result in any violation of this Trust
Agreement or any provision of law.
9. Trustee's Remuneration
9.1 The Trustee shall be entitled to remuneration for its services
in such amount and at such times as may from time to time be
agreed between the Trustee and the Beneficiary or, in default
of agreement, in accordance with its published terms and
conditions from time to time in force.
9.2 The Beneficiary shall pay or reimburse the Trustee for all of
the Trustee's expenses and disbursements in connection with
its duties under this Trust Agreement (including reasonable
attorney's fees and expenses), except any such expense or
disbursement as may arise from the Trustee's negligence,
wilful misconduct, dishonesty or fraud.
10. Indemnity
10.1 The Beneficiary shall indemnify the Trustee for, and hold it
harmless against, any loss, liability, costs or expenses
(including reasonable attorney's fees and expenses) (unless
the Settlor is the cause of such loss, liability, costs or
expenses including reasonable attorney's fees and expenses, in
which case the Settlor, and not the Beneficiary will indemnify
the Trustee), incurred without negligence, wilful misconduct,
dishonesty or fraud on the part of the Trustee, arising out of
or in connection with the performance of the Trustee's
obligations in accordance with the provisions of the Trust
Agreement, including any loss, liability, costs or expenses
arising out of or in connection with the status of the Trustee
and its authorized nominee as the holder of records of the
Assets. The Settlor and the Beneficiary acknowledge that the
foregoing indemnities shall survive the resignation of the
Trustee or the termination of this Trust Agreement.
10.2 No Trustee shall be bound to take any proceedings against a
former trustee hereof for any breach or alleged breach of
trust committed or suffered by such former trustee.
11 Receipt of Income
Unless the Trustee in its discretion shall otherwise determine, all
Income received by the Trustee shall be treated for all purposes hereof
as Income at the date of receipt, irrespective of the period in
relation to which such Income shall have been earned.
12 Protection of Third Parties
12.1 No person dealing with the Trustee and no purchaser on any
sale made by the Trustee shall be concerned to enquire into
the propriety or validity of any act of the Trustee or to see
to the application of any money paid or property transferred
to or upon the order of the Trustee;
12.2 No company any of whose securities are comprised in the Trust
Fund and no purchaser or person dealing with any person
purporting to act under any delegation of authority from any
Trustee shall be required to ascertain or enquire whether a
case exists in which such delegation is permitted or whether
such delegated authority is still subsisting;
12.3 When anything is dependent upon the value of any property or
the existence of any fact, the certificate of the Trustee as
to such value or fact shall be conclusive in favour of anyone
acting thereon in good faith.
13. Trustee acting as Director etc. and Agent
Any Trustee and, in particular, any corporate Trustee and any Parent,
Subsidiary or Affiliate of such corporate Trustee may be appointed by
the Trustee, subject to any requirements of this Trust Agreement, to
undertake and transact any business or to do any act requiring to be
transacted or done in the execution of the Trust hereof (in particular,
without prejudice to the generality of the foregoing, in exercise by
the Trustee of the powers contained in Clause 7.1.10) and, in any such
case, shall be entitled to charge and be paid and to retain for its own
account all usual professional and other fees and commissions normally
paid for such services in the ordinary course of business.
14. Overseeing Management of Companies
The Trustee shall not be required to interfere in the management or
conduct of the business of any company whose securities comprise the
whole or part of the Trust Fund. Where the Trustee's holding of such
securities is sufficient to confer voting control of such a company,
the Trustee shall nevertheless from time to time use reasonable
endeavours to obtain such information from the company as would be made
available to a non-executive director in order to satisfy itself (as
far as may be possible from such information) that the affairs of the
company are being properly managed. In the absence of any notice to the
contrary, the Trustee shall be at liberty to leave the conduct of the
company's business, including the payment or non-payment of dividends,
wholly to the company's directors. At the request of the Settlor and at
its expense, the Trustee shall cooperate with the Settlor in obtaining
information regarding property in the Trust Fund.
15. Trustee's Discretion
Except as otherwise expressly herein mentioned, every discretion or
power hereby conferred upon the Trustee shall be an absolute and
unfettered discretion or power and the Trustee shall not be obliged to
give to any beneficiary any reason or justification for the exercise or
non-exercise of any such discretion or power and no Trustee shall be
held liable for any loss or damage occurring as a result of its
concurring or refusing or failing to concur in any exercise or
non-exercise of any such discretion or power.
16. Notices
Unless otherwise provided in this Trust Agreement, all notices,
directions, requests, demands, acknowledgements and other
communications required or permitted to be given or made under the
terms hereof shall be in writing and shall be deemed to have been duly
delivered, given or made when received if delivered personally, by
facsimile, telex, telegraph, telecopier or by recognised major
overnight courier service (fees prepaid), and if addressed as follows:
If to the Settlor:
Select Reinsurance Ltd
Xxxxxxxx Xxxx, 0xx Xxxxx
Xxxxxxxx Xxxxxx
Xxxxxxxx XX00
Xxxxxxx
Attention: Sr. Vice President or Treasurer
Facsimile: 000 000-0000
If to the Trustee:
Capital G Trust Limited
00-00 Xxxx Xxxxxx
Xxxxxxxx XX EX
Bermuda
Attention: Managing Director
Facsimile: 000 000-0000
If to the Beneficiary:
PXRE Reinsurance Ltd
00 Xxxxx Xxxxxx
Xxxxxxxx XX00
Xxxxxxx
Xxxxxxxxx: Xxxxxxx X. Xxxxx
Facsimile: 000 000-0000
Each party may from time to time designate a different address for
notices, directions, requests, demands, acknowledgements and other
communications by giving written notice of such change to the other
parties.
17. Severability
In the event that any provision of this Trust Agreement shall be
declared invalid or unenforceable by any regulatory body or court
having jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remaining portions of this
Trust Agreement.
18. Successors and Assigns
Neither the Beneficiary nor the Settlor may assign this Trust Agreement
nor any of its rights or obligations hereunder without the prior
consent of the other party.
19. Appointment and Retirement of Trustee
19.1 The Trustee may resign at any time by giving not less than
ninety (90) calendar days written notice of such resignation
to the Beneficiary and to the Settlor. The Trustee may be
removed by the Settlor's and Beneficiary's joint agreement
(with any dispute being resolved under the aribitration
procedures as set out in Clause 24) and delivery of not less
than ninety (90) calendar days written notice of such removal
to the Trustee (which may be shortened by the Settlor and
Beneficiary if the Trustee has violated the standard of care
set forth in Clause 8.7); such resignation, subject to the
provisions of Clause 19.3 below, or removal, shall become
effective on or after the notice period upon (i) the
appointment of a successor trustee by the Settlor and the
Beneficiary (with any dispute being resolved under the
aribitration procedures as set out in Clause 24), (ii) the
acceptance of such appointment by the successor Trustee and
(iii) the transfer of all Assets in the Trust Fund to such
successor Trustee in accordance with Clause 19.2.
19.2 Any successor Trustee shall be a licensed trust company and
shall not be a Parent, Subsidiary or an Affiliate of the
Settlor or the Beneficiary. The successor Trustee shall
succeed and become vested with all the rights, powers,
privileges and duties of the resigning or removed Trustee, and
the resigning or removed Trustee shall be discharged from any
future duties and obligations under this Trust Agreement, but
the resigning or removed Trustee shall continue after such
resignation or removal to be entitled to the benefits of the
indemnities provided herein for the Trustee and subject to any
liability provided for herein while acting as Trustee
hereunder.
19.3 If the Trustee has sought to resign in accordance with the
procedures outlined in Clause 19.1 above and the Settlor and
Beneficiary have not appointed a successor trustee within 120
days of the Trustee's notice, the Trustee shall have the power
to apply to the supreme court in Bermuda to be relieved of its
responsibilities and to have the Assets of the Trust Fund
transferred to such court. Upon approval by the court, the
resigned Trustee shall be discharged from any future duties
and obligations under this Trust Agreement, but the resigned
Trustee shall continue after such resignation to be entitled
to the benefits of the indemnities provided for herein for the
Trustee and subject to any liability provided for herein while
acting as Trustee hereunder.
20. Settlor's Power to Change Proper Law and Forum
20.1 The Settlor may, at any time and from time to time by deed,
change the Proper Law of this Trust to the law of some other
jurisdiction in any part of the world and, as from the date of
such deed, the law of the jurisdiction named therein shall be
the Proper Law of this Trust and the courts of that
jurisdiction shall be the forum for the administration
thereof, but subject to the powers conferred by this Clause
20.1 and until any further change is made hereunder, provided
that, notwithstanding anything herein contained, the Settlor
shall not exercise such power in any way which might directly
or indirectly result in this Trust becoming according to the
law applicable thereto illegal, void or voidable or which
might change the beneficial interests hereunder.
20.2 So often as any change of the Proper Law of this Trust shall
be made pursuant to the provisions of Clause 20.1, the Trustee
may at any time, either then or thereafter, by deed make such
alterations and additions to the trusts, powers and provisions
hereof as the Trustee may consider necessary or desirable to
ensure that, so far as may be possible, the trusts, powers and
provisions hereof shall, mutatis mutandis, be as valid and
effective as they were immediately prior to such change.
21. Counterparts
This Trust Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall constitute an
original, but such counterparts together shall constitute but one and
the same Trust Agreement.
22. Power to Vary
The parties hereto may, at any time and from time to time, by deed
supplemental hereto, amend in whole or in part any or all of the
provisions of this Trust Agreement whether to cure any ambiguity or to
cure, correct or supplement any provision contained herein or in any
supplemental deed or deeds or otherwise; provided that any such
modification that alters or increases the duties or obligations of the
Trustee shall not be binding upon the Trustee unless such modification
has been accepted by the Trustee in writing.
23. Termination of Trust
23.1 The Trust Fund and this Trust Agreement, except for the
indemnities provided herein and the liability of the Trustee
for negligence, wilful misconduct, dishonesty or fraud, may be
terminated, except as provided in Clause 23.2, only after the
Settlor and the Beneficiary have given the Trustee written
notice of their joint intention to terminate the Trust (the
"Notice of Intention") (with any dispute being resolved under
the Aribitration procedures as outlined in Clause 24). The
Notice of Intention shall specify the date on which the
notifying Party intends the Trust to terminate which shall be
not less than 30 nor more than 45 calendar days after the date
of the Notice of Intention (the "Proposed Date").
23.2 The Settlor alone may terminate this Trust Agreement without
diminishing the right of the Trustee to indemnity or the
Trustee's obligation for past conduct when all Obligations
have been satisfied, on notice to the Beneficiary and the
Trustee of the Termination Date which shall not be less than
30 nor more than 45 calendar days from the date of such notice
and subject to Clause 5.9.
23.3 On the Termination Date, the Trustee shall transfer to the
Settlor any Assets remaining in the Trust Fund, at which time
all liability of the Trustee with respect to such Assets shall
cease, except for the Trustee's liability for negligence,
wilful misconduct, dishonesty or fraud with respect thereto.
24. Arbitration
24.1 All matters in difference between the parties arising under,
out of or in connection with this Trust Agreement, shall be
referred to an arbitration tribunal in the manner hereinafter
set out.
24.2 Unless the parties appoint a sole arbitrator within 14
calendar days of one receiving a written request from the
other for arbitration, the claimant (the party requesting
arbitration) shall appoint his arbitrator and give written
notice hereof to the respondent. Within 30 calendar days of
receiving such notice, the respondent shall appoint his
arbitrator and give written notice thereof to the claimant,
failing which the claimant may apply to the appointor
hereafter named to nominate an arbitrator on behalf of the
respondent.
24.3 Before they enter upon a reference, the two arbitrators shall
appoint a third arbitrator. Should they fail to appoint such a
third arbitrator within 30 calendar days of the appointment of
the respondent's arbitrator, then either of them or either of
the parties may apply to the appointor for the appointment of
the third arbitrator. The three arbitrators shall decide by
majority. The third arbitrator shall also act as chairman of
the tribunal.
24.4 Unless the parties otherwise agree the arbitration tribunal
shall consist of persons (including those who have retired)
with not less than ten years' experience of insurance or
reinsurance as persons engaged in the industry itself or as
lawyers or other professional advisers.
24.5 The arbitration tribunal shall, so far as is permissible under
the law and practice of the place of arbitration, have power
to fix all procedural rules for the holding of the arbitration
including discretionary power to make orders as to any matters
which it may consider proper in the circumstances of the case
with regard to pleadings, discovery, inspection of the
documents, examination of witnesses and any other matter
whatsoever relating to the conduct of the arbitration and may
receive and act upon such evidence whether oral or written
strictly admissible or not as it shall in its discretion think
fit.
24.6 The appointor shall be the Chairman for the time being of
Xxxxx (UK) or if he is unavailable or it is inappropriate for
him to act for any reason, such persons as may be nominated by
the Committee of Xxxxx (UK). If for any reason such persons
decline or are unable to act, then the appointor shall be the
nominating committee of the Chartered Institute of
Arbitrators, Bermuda Branch.
24.7 The place of arbitration may be chosen by the parties, but in
default of such choice, the place of arbitration shall be in
Bermuda.
24.8 The arbitration shall be carried out under the law of Bermuda
and shall be an international commercial arbitration subject
to the provisions of the International Conciliation and
Arbitration Xxx 0000.
24.9 The arbitral award shall be in writing, shall state reasons
for the award, and be final and binding on the parties. The
award may include an award of costs, including reasonable
attorneys' fees and disbursements. Judgment on the award may
be entered by any court having jurisdiction thereof or having
jurisdiction over the parties or their assets or the Assets of
the Trust Fund.
25. Irrevocable Trust Agreement
This Trust Agreement is irrevocable and cannot be varied except in the
limited circumstances provided in this Trust.
IN WITNESS WHEREOF the parties hereto have caused their Common Seals to be
hereunto affixed the day and year first above written.
FIRST SCHEDULE
Tower/Legion Aggregate Excess of Loss Retrocessional
Reinsurance Agreement dated June 29, 0000
XXXXXX XXXXXXXX
Xxx Xxxxxx Xxxxxx Dollars (U.S.$10)
THIRD SCHEDULE
WITHDRAWAL NOTICE
To: Capital G Trust Limited
00-00 Xxxx Xxxxxx
Xxxxxxxx XX EX
Bermuda
Attention: Managing Director
THE UNDERSIGNED, PXRE Reinsurance Ltd, hereby notifies Capital G Trust Limited,
as trustee pursuant to the Trust Agreement, dated [ ] 2002, among Select
Reinsurance Ltd., Capital G Trust Limited, as trustee, and the undersigned, (the
"Trust Agreement, capitalised terms not otherwise defined herein are used with
the meaning given in the Trust Agreement), as follows:
1 The Trustee is hereby requested to withdraw from the Trust Fund the
following Assets.
[specify Assets to be withdrawn]
2(a) The Trustee is hereby requested to deliver the cash Assets described in
paragraph 1 hereof by wire transfer in immediately available funds for
the account of the undersigned (Account No. _____________)
2(b) (i) The Trustee is hereby requested to deliver non-cash Assets by
liquidating or redeeming the applicable assets and delivering the cash
proceeds as in (a) above.
(ii) The Trustee is hereby requested to transfer the non-cash Assets as
instructed below:
[cross-out the inapplicable sub-paragraph or specify the Assets for
each]
IN WITNESS THEREOF, the duly authorized undersigned has caused this Withdrawal
Notice to be duly executed as of this _______ day of _______________________.
PXRE REINSURANCE LTD.
By_____________________
Name:
Title
FOURTH SCHEDULE
WITHDRAWAL REQUEST
To: Capital G Trust Limited
00-00 Xxxx Xxxxxx
Xxxxxxxx XX EX
Bermuda
Attention: Managing Director
THE UNDERSIGNED, Select Reinsurance Ltd, hereby notifies Capital G Trust
Limited, as trustee pursuant to the Trust Agreement, dated [ ] 2002, among the
undersigned, Capital G Trust Limited, as trustee, and PXRE Reinsurance Ltd.,
(the "Trust Agreement, capitalised terms not otherwise defined herein are used
with the meaning given in the Trust Agreement), as follows:
1 The Trustee is hereby requested to withdraw from the Trust Fund the
following Assets.
[specify Assets to be withdrawn]
2(a) The Trustee is hereby requested to deliver the cash Assets described in
paragraph 1 hereof by wire transfer in immediately available funds for
the account of the undersigned (Account No. _____________)
2(b) (i) The Trustee is hereby requested to deliver non-cash Assets by
liquidating or redeeming the applicable assets and delivering the cash
proceeds as in (a) above.
(ii) The Trustee is hereby requested to transfer the non-cash assets as
instructed below:
[cross-out the inapplicable sub-paragraph or specify the Assets for
each]
IN WITNESS THEREOF, the duly undersigned has caused this Withdrawal Request to
be duly executed as of this _______ day of _______________________.
SELECT REINSURANCE LTD.
By_____________________
Name:
Title
THE COMMON SEAL of the Settlor ) /s/ Xxxxxx X.Xxxxx, Xx. Vice President
was hereunto affixed in the ) /s/ Xxxxx Xxxxxx, Secretary
presence of:- ) SEAL , Select Reinsurance Ltd,
)
)
)
THE COMMON SEAL of the Original ) /s/ Xxxxx Xxxxxx-Xxxxxxxxxx,
Trustee was hereunto affixed in the ) Trust Officer
presence of:- ) /s/ Xxxxx Xxxxx, Trust Officer
)
)
)
THE COMMON SEAL of the ) /s/ Xxxxxxx X. Xxxxx, President
Beneficiary was hereunto affixed ) /s/ I.S. Xxxxxxxxxxx Assistant Secretary
in the presence of:- )
) SEAL - PXRE Reinsurance Ltd.
)
)
EXHIBIT 10.9
AMENDMENT TO THE FIRST SCHEDULE
OF THE PATRIOT 2002 TRUST
This Amendment to the First Schedule of the Trust Agreement (the "Trust
Agreement") between Select Reinsurance Ltd. (the "Settlor"), Capital G Trust
Limited (the "Original Trustee") and PXRE Reinsurance Ltd. (the "Beneficiary")
is made and effective as of August 5, 2002. Capitalized terms used herein shall
have the same meaning as ascribed to such terms in the Trust Agreement.
WHEREAS, the Settlor and Beneficiary wish to amend the First Schedule
to the Trust Agreement to add an additional Reinsurance Agreement to the First
Schedule.
NOW THEREFORE, THE PARTIES HEREBY AGREES AS FOLLOWS:
The First Schedule to the Trust Agreement is hereby amended by the
addition of the following Reinsurance Agreement thereto:
Xxxxxx Insurance Companies Aggregate Excess of Loss Reinsurance
Agreement, commencing January 1, 2000, between the Settlor as Reinsurer
and the Beneficiary as Reinsured.
IN WITNESS WHEREOF, the parties hereto have caused their Common Seals to be
hereunto affixed.
THE COMMON SEAL of the Settlor ) /s/ Xxxxxx X.Xxxxx, Xx. Vice President
was hereunto affixed in the ) /s/ Xxxxx Xxxxxx, Secretary
presence of:- ) SEAL , Select Reinsurance Ltd,
)
)
)
THE COMMON SEAL of the Original ) /s/ Xxxxx Xxxxxx-Xxxxxxxxxx,
Trustee was hereunto affixed ) Trust Officer
in the presence of:- ) /s/ Xxxxx Xxxxx, Trust Officer
)
)
)
THE COMMON SEAL of the ) /s/ Xxxxxxx X. Xxxxx, President
Beneficiary was hereunto ) /s/ Xxxxxx X. Xxxxx, Chief Executive Officer
affixed in the presence of:- )
) SEAL - PXRE Reinsurance Ltd.
)
)
