EXHIBIT 10.3
AFFILIATE GUARANTEE
THIS GUARANTEE (the "Guarantee") is made as of July 14, 2000,
by ODYSSEY AMERICA REINSURANCE CORPORATION ("Guarantor") for the benefit of
COMPAGNIE TRANSCONTINENTALE DE REASSURANCE ("CTR"), an affiliate corporation of
the Guarantor.
WHEREAS, CTR's operations inure to the benefit of Guarantor;
and
WHEREAS, CTR is the beneficiary of a parental guarantee
agreement, effective January 1, 1998, between CTR and its indirect parent
corporation, Odyssey Re Group Ltd. (the "Parental Guarantee"); and
WHEREAS, CTR is the beneficiary of a stop-loss agreement with
CTR's former parent, GAN International (the "GAN Stop-Loss"); and
WHEREAS, Guarantor wishes to enhance CTR's position in the
reinsurance marketplace by guaranteeing the performance by CTR of all
reinsurance agreements entered into by CTR that for any reason are not subject
to the guarantees and indemnifications provided by either the Parental Guarantee
or the GAN Stop-Loss, as hereinafter provided;
NOW THEREFORE, in consideration of the mutual terms,
conditions and other agreements set forth herein, Guarantor and CTR agree as
follows:
ARTICLE I
GUARANTEE
Guarantor hereby unconditionally guarantees the performance by
CTR of all of CTR's liabilities under policies, contracts, binders and
lineslips, and all renewals or extensions of any of the same, in all cases
incepting prior to, on or as of any date during the term of
this Guarantee, of insurance or reinsurance entered into by CTR as either an
insurer, reinsurer or retrocessionaire (the "Subject Contracts") in the event of
insolvency, as more fully set out in Article V hereof; provided however, that
such Subject Contracts are not also subject to the guarantees and
indemnifications provided by either the Parental Guarantee or the GAN Stop-Loss
or, in the event such Subject Contracts are subject to such guarantees and
indemnifications, the provider of the Parental Guarantee or the GAN Stop-Loss,
as the case may be, has defaulted on its obligations thereunder with respect to
the Subject Contracts; and provided also, that the Guarantor is not itself a
party to such Subject Contracts.
ARTICLE II
BENEFITS OF GUARANTEE AND CONTINUANCE IN EFFECT
This Guarantee is given to CTR on behalf of, and shall be
treated and enforced as though the same were expressly given directly to and in
the name of, all parties to the Subject Contracts besides CTR and the Guarantor,
and shall continue in effect indefinitely (including, for greater certainty,
after 2000) with respect to all of the Subject Contracts.
ARTICLE III
TERM; TERMINATION
This Guarantee shall remain in force until terminated by the
Guarantor upon written notice to CTR not less than three (3) months prior to
December 31 in any year. Notwithstanding the termination of this Guarantee
pursuant to the provisions of this Article III, any such termination will in no
way affect the validity or enforceability of the Guarantee with respect to any
or all Subject Contracts incepting or renewed prior to the effective date of
such termination.
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ARTICLE IV
OBLIGATIONS HEREUNDER
Except as provided herein, the obligations of Guarantor
hereunder are unconditional and may not be revoked by Guarantor for any reason
whatsoever. Guarantor further agrees that, except as provided herein, the
Guarantee is and shall be an open and continuing guaranty and all obligations to
which it applies or may apply shall continue in full force and effect,
notwithstanding any modifications of or additions to any of the Subject
Contracts or any other action which would otherwise relieve or release a
guarantor, with or without notice to Guarantor; provided further that nothing in
this Guarantee shall be construed to prevent the extinguishment of the
Guarantee, as regards any Subject Contract, at such time as such Subject
Contract has been fully satisfied either in accordance with the terms thereof or
as mutually agreed upon by the parties thereto.
ARTICLE V
ENFORCEABILITY
A. Subject to Article I hereof, this Guarantee may be directly
enforced by any insured or reinsured of CTR that is an insured or reinsured
under any of the Subject Contracts; provided however, that with respect to any
particular Subject Contract, this Guarantee may be enforced only after a showing
that CTR has been declared insolvent and placed in liquidation by a court of
competent jurisdiction and has failed to pay any loss payable under such Subject
Contract within the time therein agreed upon, and further provided, that
Guarantor shall not be required to make duplicate insurance or reinsurance
payments as a result of this Guarantee.
B. Guarantor's obligations under this Guarantee, and the
enforceability of this Guarantee by any insured or reinsured under the Subject
Contracts, are subject to the same defenses, counterclaims and any and all
procedural and substantive contractual or non-contractual rights which CTR may
possess, or to which the party seeking
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enforcement or for whose benefit enforcement is being sought, is obligated,
regarding the underlying amounts in dispute or the Subject Contracts at issue;
provided, however, that no such defense available to CTR based upon its
insolvency, disability or lack of corporate power shall affect, impair or be a
defense to this Guarantee.
ARTICLE VI
EFFECT OF PAYMENTS HEREUNDER
Upon the making of any payment under this Guarantee with
respect to the Subject Contracts, Guarantor shall succeed to all such rights of
CTR as may exist under such Subject Contracts, to the same extent as if CTR had
directly made such payment, including, without limitation, the right to recoup
any and all monies owed but not paid with respect to such Subject Contracts
pursuant to the terms of the Parental Guarantee or the GAN Stop-Loss because of
the default thereunder by the providers thereof, without need for taking any
further action which would not be required of CTR in the same circumstances.
ARTICLE VII
LIMITATION OF LIABILITY
Notwithstanding anything to the contrary contained herein, the
liability of Guarantor under this Guarantee shall in all cases be entirely
derivative of such liability assumed by CTR under the Subject Contracts and
shall in no case be greater than such liability.
ARTICLE VIII
GOVERNING LAW
The provisions of this Guarantee shall be subject to the laws
of the State of Connecticut.
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ARTICLE IX
TIME IS OF THE ESSENCE
With respect to all notice provisions and limitations for the
filing of reinsurance claims and requests for the payment of other reinsurance
recoverables, time is of the essence.
IN WITNESS WHEREOF, the Guarantor has executed, delivered and
entered into this Guarantee as of the date first above written.
ODYSSEY AMERICA REINSURANCE CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
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Name: Xxxxxxx X. Xxxxx
Title: President
