Exhibit 10.2
ASSIGNMENT OF NET PREMIUM RECEIVABLES
BY AND AMONG
THE BANK OF NEW YORK,
ROYAL INDEMNITY COMPANY
AND
ROYAL SURPLUS LINES INSURANCE COMPANY,
JUNE 10, 2004
This ASSIGNMENT OF NET PREMIUM RECEIVABLES (the "Assignment
Agreement"), dated as of June 10, 2004, is entered into by and among Royal
Indemnity Company ("RIC"), Royal Surplus Lines Insurance Company ("RSLIC", and
together with RIC, the "Ceding Companies") and The Bank of New York (the
"Trustee"). Capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Acquisition Agreement (defined below).
WITNESSETH
WHEREAS, the Trustee is the trustee of "RSUI Indemnity Company,
Grantor" trust (the "Trust") established pursuant to a Trust Agreement dated as
of June 10, 2004 (the "Trust Agreement"), naming the Ceding Companies as sole
and exclusive beneficiaries of the Trust;
WHEREAS, each of the Ceding Companies is a wholly-owned subsidiary
of Royal Group, Inc., a Delaware corporation ("RGI"), and named beneficiary of
the Trust;
WHEREAS, pursuant to an Acquisition Agreement by and between RGI and
Alleghany Insurance Holdings LLC, a Delaware limited liability company, dated
June 6, 2003 (the "Acquisition Agreement"), RGI agreed to cause the Ceding
Companies to place Qualifying Assets in an amount equal to their respective
portions of the Estimated NUPR, net of their respective portions of the
Aggregate Ceding Commission, into the Trust, subject to the terms and conditions
set forth in the Acquisition Agreement; and
WHEREAS, in connection with the transfer of the Estimated NUPR, each
of the Ceding Companies have agreed to enter into this Assignment Agreement,
pursuant
to which the Ceding Companies will assign to the Trust, and grant the Trust a
first priority perfected security interest in, all of the Ceding Companies'
right, title and interest in, to and under all premium receivables related to
the Reinsured Contracts, net of premiums ceded to third party reinsurers
relating to such Reinsured Contracts (the "Assignment").
NOW, THEREFORE, in consideration of the foregoing and the respective
covenants, agreements and conditions set forth herein and in the Acquisition
Agreement, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree as follows:
Section 1. Assignment and Assumption.
(a) Subject to Section 1(b) hereto, each of the Ceding Companies
hereby assigns, transfers, and conveys to the Trust all of Ceding Companies'
right, title and interest in and to all of the premium receivables related to
the Reinsured Contracts, net of premium receivables to be ceded to third party
reinsurers relating to such Reinsured Contracts ("Net Premium Receivables") and
agrees to pay over to the Trust all amounts so received on a monthly basis.
(b) The parties hereto agree and acknowledge that (i) the Trustee
shall not have any obligation to collect any Net Premium Receivables other than
amounts paid to it by the Ceding Companies and (ii) the Ceding Companies will
not be obligated to pay any Net Premium Receivables to the Trust, unless such
premiums are actually collected by the Ceding Companies.
Section 2. Acceptance of Assignment. Trustee hereby accepts the
Assignment.
2
Section 3. All Actions Necessary. Each party hereto, as reasonably
requested by the other from time to time, shall take all reasonably appropriate
action and execute any reasonably necessary and appropriate additional
documents, instruments or conveyances of any kind (not containing additional
representations and warranties, covenants or indemnities) which may be
reasonably necessary to carry out any of the provisions of this Assignment
Agreement.
Section 4. Perfected Interest In Assignment. The parties intend that
the Trustee shall at all times have a first priority, perfected security
interest in the Net Premium Receivables under the UCC and at common law. Each of
the Ceding Companies shall use its reasonable best efforts to give effect to the
foregoing requirements and shall provide the Trustee with the requisite power of
attorney in order to allow the Trustee to execute UCC financing statements,
continuation statements and other statements provided to it with respect to any
and all intangible assets assigned or transferred to the Trustee hereunder.
Section 5. Termination of Assignment. The Assignment hereunder may
be terminated (i) by delivery to the Trustee of the mutual written consent of
the Ceding Companies and Reinsurer; or (ii) automatically upon the termination
of the Trust pursuant to the terms of the Trust Agreement.
Section 6. Interpretation. Notwithstanding anything to the contrary
contained in this Assignment Agreement, nothing contained herein shall be deemed
to limit, restrict or modify in any manner the rights and obligations of the
parties under the Quota Share Reinsurance Agreements, the Administrative
Services Agreements or the Trust Agreement. In case of any conflict between this
Assignment Agreement and (a) the
3
Quota Share Reinsurance Agreements, (b) the Administrative Services Agreements,
(c) the Trust Agreement, (d) any other Ancillary Agreement, or (e) the
Acquisition Agreement, the Quota Share Reinsurance Agreements, the
Administrative Services Agreements, the Trust Agreement, the other Ancillary
Agreements or the Acquisition Agreement shall govern, except in respect of the
rights and obligations of the Trustee which shall be governed solely by the
provisions of this Assignment Agreement and the Trust Agreement.
Section 7. Binding Effect; Assignment. This Assignment Agreement
shall be binding upon each of the Ceding Companies and its successors and
assigns and legal representatives. Except as provided in this Assignment
Agreement, neither this Assignment Agreement, nor any right or obligation
hereunder, may be directly or indirectly assigned or transferred by any party,
in whole or in part, to any third party (other than to Ceding Companies'
successors and assigns), including, without limitation, any bankruptcy trustee,
by operation of law or otherwise, whether voluntary or involuntary, without the
prior written consent of the parties hereto.
Section 8. Third Party Beneficiaries. This Assignment Agreement
shall inure to the benefit of the Trust, the Grantor and the Ceding Companies,
as named beneficiaries of the Trust, and their successors and permitted assigns
and shall be binding upon the Ceding Companies and their successors and assigns,
and nothing herein is intended or shall be construed to confer upon any other
Person any right, remedy or claim under or by reason of this Assignment
Agreement or any term, covenant or condition hereof.
4
Section 9. Amendment. This Assignment Agreement may only be amended
or modified by a written instrument executed by the parties hereto.
Section 10. Governing Law. This Assignment Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
regardless of the laws that might otherwise govern under applicable principals
of conflicts of laws thereof.
Section 11. Consent to Jurisdiction. Each of the parties hereto
irrevocably and unconditionally submits to the exclusive jurisdiction of the
state and federal courts located in the State and City of New York for the
purposes of enforcing this Assignment Agreement. In any action, suit or other
proceeding, each of the parties hereto irrevocably and unconditionally waives
and agrees not to assert by way of motion, as a defense or otherwise any claims
that it is not subject to the jurisdiction of the above courts, that such action
or suit is brought in an inconvenient forum or that the venue of such action,
suit or other proceeding is improper. Each of the parties hereto also agrees
that any final and unappealable judgment against a party hereto in connection
with any action, suit or other proceeding shall be conclusive and binding on
such party and that such award or judgment may be enforced in any court of
competent jurisdiction, either within or outside of the United States. A
certified or exemplified copy of such award or judgment shall be conclusive
evidence of the fact and amount of such award or judgment.
Section 12. Waiver of Jury Trial. Each party hereto hereby waives
trial by jury in any judicial proceeding involving, directly or indirectly, any
matter (whether sounding in tort, contract, or otherwise) in any way arising out
of or related to this Assignment Agreement or the relationship established
hereunder. The parties agree that
5
the waiver of jury trial set forth in the preceding sentence is a material
inducement for the parties to enter into this Assignment Agreement.
Section 13. Severability. Any term or provision of this Assignment
Agreement which is invalid or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Assignment Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Assignment Agreement in
any other jurisdiction. If any provision of this Assignment Agreement is so
broad as to be unenforceable, the provision shall be interpreted to be only so
broad as would be enforceable.
Section 14. Descriptive Headings. The descriptive section headings
herein are inserted for convenience of reference only and are not intended to be
part of or to affect the meaning or interpretation of this Assignment Agreement.
Section 15. Counterparts. This Assignment Agreement may be executed
in multiple counterparts, each of which shall be deemed to be an original, said
counterparts together to constitute one and the same instrument.
6
IN WITNESS WHEREOF, this Assignment Agreement has been duly executed
and delivered by the duly authorized officers of ROYAL INDEMNITY COMPANY, ROYAL
SURPLUS LINES INSURANCE COMPANY, and THE BANK OF NEW YORK as of the date first
above written.
ROYAL INDEMNITY COMPANY
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
ROYAL SURPLUS LINES INSURANCE COMPANY
By: /s/ Xxxx X. Xxxxxx
-----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
THE BANK OF NEW YORK
By: /s/ Xxxxxxxxxxx X. Xxxxxx
-----------------------------------------
Name: Xxxxxxxxxxx X. Xxxxxx
Title: Assistant Treasurer
7
