Exhibit 10.25
GUARANTEE AGREEMENT
BETWEEN
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
("GUARANTOR")
AND
GIBRALTAR CASUALTY COMPANY
("BENEFICIARY")
DATED AS OF SEPTEMBER 19, 2000
TABLE OF CONTENTS
Page
Section 1. Definitions........................................................1
Section 2. Guaranty...........................................................2
2.1 Guaranteed Obligations.............................................2
2.2 Nature of Obligations..............................................2
Section 3. Character of Obligations............................................3
3.1 Obligations Not Affected...........................................3
3.2 Waiver by Guarantor................................................3
3.3 Reinstatement......................................................3
Section 4. Rights of Third Parties.............................................4
Section 5. Representations and Warranties.....................................4
5.1 Due Incorporation, etc.............................................4
5.2 Due Authorization..................................................4
5.3 Consents; No Conflicts.............................................4
5.4 Access to Information..............................................5
5.5 Solvency...........................................................5
Section 6. Miscellaneous.......................................................5
6.1 Expenses...........................................................5
6.2 Amendment..........................................................5
6.3 Notices............................................................5
6.4 Waivers............................................................5
6.5 Counterparts.......................................................6
6.6 Successors and Assigns.............................................6
6.7 Further Assurances.................................................6
6.8 Severability.......................................................6
6.9 Entire Understanding...............................................6
6.10 Applicable Law....................................................6
6.11 Headings..........................................................6
6.12 Term..............................................................6
GUARANTEE AGREEMENT
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This GUARANTEE AGREEMENT is made as of the ____ day of ______, 2000, by
and between THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, a New Jersey mutual
insurance company ("Guarantor"), and GIBRALTAR CASUALTY COMPANY, a Delaware
corporation (together with its successors and assigns, "Beneficiary").
W I T N E S S E T H:
WHEREAS, Guarantor and Everest Reinsurance Holdings, Inc., a Delaware
corporation ("Everest"), are parties to that certain Stock Purchase Agreement,
dated as of February 24, 2000, as amended by Amendment No. 1 thereto, dated as
of July, 2000, pertaining to the sale by Guarantor of all of the issued and
outstanding shares of capital stock of Beneficiary to Everest (the "Stock
Purchase Agreement");
WHEREAS, it is a condition to the consummation of the transactions
contemplated by the Stock Purchase Agreement that Beneficiary and Prudential
Property and Casualty Insurance Company, an Indiana corporation and an indirect
subsidiary of Guarantor ("Prupac"), enter into, as of the date hereof, a
proportional excess of loss reinsurance agreement and a quota share reinsurance
agreement (collectively, the "Prupac Reinsurance Agreements"); and
WHEREAS, it is a further condition to the consummation of the
transactions contemplated by the Stock Purchase Agreement that Guarantor enter
into this Agreement.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Guarantor and Beneficiary hereby agree as follows:
Section 1. DEFINITIONS
When used herein, the following terms shall have the following
meanings:
"Guaranteed Agreements" means the Prupac Reinsurance Agreements (as any
of them may be amended from time to time).
"Obligor" means Prupac and its successors and assigns.
Capitalized terms used but not defined herein shall have the meanings
given to such terms in the Stock Purchase Agreement.
Section 2. GUARANTY
2.1 GUARANTEED OBLIGATIONS. (a) Guarantor hereby irrevocably and
unconditionally guarantees to Beneficiary the prompt payment of all amounts
payable as and when the same shall become due and payable at any time by Obligor
under, and the full and prompt performance by the Obligor of each and every
agreement, covenant, indemnity and obligation of Obligor under and in accordance
with the terms of, the Guaranteed Agreements, in each case however created,
arising or evidenced, whether direct or indirect, primary or secondary, absolute
or contingent, joint or several, and whether now or hereafter existing or due or
to become due.
(b) Guarantor hereby agrees that if for any reason (including, without
limitation, the liquidation, dissolution, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, composition or
readjustment of, or other similar proceedings affecting the status, existence,
assets or obligations of, Obligor) Obligor shall fail fully and promptly to pay
any amount payable at any time under any of the Guaranteed Agreements as and
when the same shall become due and payable, or if Obligor shall fail to perform
and discharge any agreement, covenant, indemnity or obligation of Obligor under
any of the Guaranteed Agreements, then Guarantor (i) in the event of any such
failure to make payment of any amount, shall promptly pay such amount to
Beneficiary and (ii) in the event of any failure to perform and discharge any
such agreement, covenant, indemnity or obligation, shall promptly cause the same
to be performed and discharged.
(c) The amounts payable by (including, without limitation, any
penalties or default amounts), and the agreements, covenants, indemnities and
obligations of, Obligor hereby guaranteed are hereinafter referred to
collectively as the "Guaranteed Obligations" and individually as a "Guaranteed
Obligation."
2.2 NATURE OF OBLIGATIONS. This Agreement shall constitute a guaranty of payment
when due and of performance when due and not of collection, and Guarantor
specifically agrees that it shall not be necessary, and that Guarantor shall not
be entitled to require, before or as a condition of enforcing the liability of
Guarantor under this Agreement or requiring payment or performance of the
Guaranteed Obligations by Guarantor hereunder, or at any time thereafter, that
any Person: (a) file suit or proceed to obtain judgment or assert a claim
against Obligor or any other Person that may be liable for any Guaranteed
Obligation; (b) make any other effort to obtain payment or performance of any
Guaranteed Obligation from Obligor or any other Person that may be liable for
such Guaranteed Obligation; (c) foreclose against or seek to realize upon any
security now or hereafter existing for any Guaranteed Obligation; (d) exercise
or assert any other right or remedy to which such Person is or may be entitled
in connection with any Guaranteed Obligation or any security or other guaranty
therefor; or (e) assert or file any claim against the assets of Obligor or any
other Person liable for any Guaranteed Obligation.
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Section 3. CHARACTER OF OBLIGATIONS
3.1 OBLIGATIONS NOT AFFECTED. The obligations of Guarantor pursuant to
Section 2.1 shall be continuing and irrevocable, absolute and unconditional,
primary and original, immediate and not contingent and shall remain in full
force and effect without regard to and shall not be released, discharged or in
any way affected by any circumstance or condition (other than the defense that
the Guaranteed Obligations are not due and payable or required to be performed
and discharged or the defense of payment or performance by Obligor or any other
Person that may be liable for any Guaranteed Obligation). Should any money or
performance due or owing under this Agreement not be recoverable from or
performed by Guarantor due to any reason, then, in any such case, such money or
performance shall nevertheless be recoverable from or performed by Guarantor as
though Guarantor were the principal obligor in respect thereof and not merely a
guarantor and shall be paid or performed by Guarantor forthwith.
3.2 WAIVER BY GUARANTOR. Except as herein otherwise expressly provided
or as may be required by applicable law, Guarantor hereby expressly and
irrevocably waives diligence, demand for payment, filing of claims with any
court, any proceeding to enforce any provision of any of the Guaranteed
Agreements, notice of acceptance of this Agreement, notice of the creation of
any liabilities of Obligor or any other Person, notice of nonpayment of any
Guaranteed Obligation, any right to require a proceeding first against Obligor
or any other Person, whether to xxxxxxxx any assets or to exhaust any security
for the performance of the obligations of Obligor or any other Person or
otherwise, any diligence in collection or protection of or realization upon any
Guaranteed Obligation, any obligation hereunder or any collateral security for
any of the foregoing, any right of protest, presentment, notice or demand
whatsoever, all claims of waiver, release, surrender, alteration or compromise,
and all defenses (other than the defense that the Guaranteed Obligations are
not due and payable or required to be performed and discharged and the
defense of payment or performance by Obligor or any other Person that may be
liable for any Guaranteed Obligation), set-offs, counterclaims, recoupments,
reductions, limitations, impairments or terminations, whether arising hereunder
or otherwise. Guarantor agrees that no payment made by it or for its account
pursuant to this Agreement shall entitle it, by subrogation, indemnification,
exoneration, contribution, reimbursement or otherwise to any payment by Obligor
or any other Person or from or out of any property of Obligor or any other
Person unless and until all Guaranteed Obligations are fully and finally paid
and performed, and Guarantor hereby expressly waives, to the fullest extent
possible, and shall not exercise, rights or remedies it has or may in the future
have with respect to any of the foregoing unless and until all Guaranteed
Obligations are fully and finally paid and performed.
3.3 REINSTATEMENT. Guarantor agrees that this Agreement shall be
automatically reinstated if and to the extent that for any reason any payment
or performance by or on behalf of Obligor, or any other Person that may have
paid a Guaranteed Obligation, is rescinded or rendered incomplete or must be
otherwise restored by the Beneficiary, whether as a result of any proceedings
in bankruptcy or reorganization or otherwise.
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Section 4. RIGHTS OF THIRD PARTIES
This Agreement is made for the benefit of, and shall be enforceable by,
Beneficiary and its successors and assigns to the extent of its interest
hereunder. This Agreement shall not be construed to create any right in any
Person other than Beneficiary and its successors and assigns or to be a contract
in whole or in part for the benefit of any Person other than Beneficiary and its
successors and assigns.
Section 5. REPRESENTATIONS AND WARRANTIES
Guarantor hereby represents and warrants to Beneficiary as set forth in
this Section 5.
5.1 DUE INCORPORATION, ETC. Guarantor is a mutual insurance company
domiciled, validly existing and in good standing under the laws of the State of
New Jersey and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as they are now owned,
leased and operated. Guarantor is licensed or qualified to do business and is
in good standing as a foreign entity in each jurisdiction where (a) the nature
of the properties owned, leased or operated by it or the businesses transacted
by it require such licensing or qualification and (b) the failure to be so
licensed, qualified or in good standing would adversely affect Guarantor's
ability to perform its obligations hereunder or would materially and adversely
affect Guarantor.
5.2 DUE AUTHORIZATION. Guarantor has all requisite corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution,
delivery and performance by Guarantor of this Agreement and the consummation by
Guarantor of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate proceedings and no other corporate
proceedings on the part of Guarantor are necessary to authorize the execution,
delivery and performance by Guarantor of this Agreement or the consummation
of the transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by Guarantor and constitutes a legal, valid and
binding obligation of Guarantor, enforceable against Guarantor in accordance
with its terms, except as such enforceability may be limited by bankruptcy,
insolvency, moratorium or similar laws affecting creditors' rights generally
and except as rights to specific enforcement may be limited by the application
of equitable principles (whether such equitable principles are applied in a
proceeding at law or in equity).
5.3 CONSENTS; NO CONFLICTS. No consent, authorization, order or
approval of, or filing or registration with, any governmental authority,
board or other regulatory authority is required for or in connection with
the execution, delivery and performance by Guarantor of this Agreement and the
consummation of the transactions contemplated hereby, except those already
duly obtained or made. The execution, delivery and performance by Guarantor of
this Agreement and the consummation by Guarantor of the transactions
contemplated hereby do not and will not, with or without the giving of notice or
the passage of time, or both, (a) violate any provision of the Governing
Instruments of Guarantor, (b) violate, result in a breach of or constitute a
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default under or give rise to a right of termination or cancellation of, or
accelerate the performance required by any terms of, as the case may be, any
contract, lease, license, mortgage, note, permit or instrument to which
Guarantor is a party or by which any of its assets are bound, (c) violate any
law, regulation, judgment, order, writ, injunction or decree of any court,
governmental body (domestic or foreign) or administrative agency of any
jurisdiction applicable to Guarantor or (d) require the consent or approval of
any third parties; other than, in the case of (b) and (d), such violations,
breaches, defaults, terminations, cancellations and accelerations which would
not, in the aggregate, reasonably be expected to have a Material Adverse Effect
on Guarantor.
5.4 ACCESS TO INFORMATION. Guarantor now has and will continue
to have independent means of obtaining such information concerning the
affairs, financial condition and business of Obligor as Guarantor desires to
obtain. Except as set forth in the Stock Purchase Agreement, no party hereto
shall have any duty or responsibility to provide Guarantor with any credit
or other information concerning the affairs, financial condition or business of
Obligor or other Persons that may come into its possession. Guarantor has
executed this Agreement based solely on its own knowledge and investigation
of Obligor and other Persons and their financial condition.
5.5 SOLVENCY. The execution, delivery and performance by Guarantor
of this Agreement will not render Guarantor insolvent, nor is it being made in
contemplation of Guarantor's insolvency. Guarantor does not have unreasonably
small capital with which to carry on its business.
Section 6. MISCELLANEOUS.
6.1 EXPENSES. Guarantor shall pay to or reimburse Beneficiary for, and
agrees to indemnify and hold harmless Beneficiary from and against, all costs
and expenses, including, without limitation, reasonable attorneys' fees and
disbursements, incurred by Beneficiary in connection with enforcing this
Agreement or any of its rights hereunder. In the event of any litigation
involving Guarantor and Beneficiary in connection with this Agreement, a court
of applicable jurisdiction may award reimbursement of attorneys' fees and
disbursements to either Guarantor or Beneficiary as such court deems
appropriate.
6.2 AMENDMENT. This Agreement may be amended, modified or supplemented
but only in writing signed by Guarantor and Beneficiary.
6.3 NOTICES. Any notice, request, instruction or other document to be
given hereunder by a party hereto or a Beneficiary shall be in writing and shall
be deemed to have been given (a) when received if given in person or by courier
or a courier service, (b) on the date of transmission if sent by telex,
facsimile or other wire transmission (receipt confirmed) or (c) three (3)
business days after being deposited in the mail, certified or registered,
postage prepaid. Notice shall be given as set forth in the Stock Purchase
Agreement.
6.4 WAIVERS. The failure of a party hereto or any Beneficiary at any
time or times to require performance of any provision hereof shall in no manner
affect its right at a later time to enforce the same. No delay in exercising any
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right shall operate as a waiver or impair such right. No single or partial
exercise of any right shall preclude any other or further exercise thereof or
the exercise of any other right. No waiver by a party hereto or any Beneficiary
of any condition or of any breach of any term, covenant, representation or
warranty contained in this Agreement shall be effective unless in writing,
and no waiver in any one or more instances shall be deemed to be a further or
continuing waiver of any such condition or breach in other instances or a waiver
of any other condition or breach of any other term, covenant, representation
or warranty.
6.5 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
6.6 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
Guarantor and its successors and permitted assigns and shall inure to the
benefit of, and may be enforced by, Beneficiary and its successors and assigns;
provided, that no assignment of any of the rights or obligations of Guarantor
under this Agreement shall be made by Guarantor without the prior written
consent of Beneficiary.
6.7 FURTHER ASSURANCES. Guarantor will, at Guarantor's expense, do,
execute, acknowledge and deliver all and every such further acts, deeds,
agreements, instruments and assurances as may be reasonably necessary or
appropriate in order to protect the right, title and interest of Beneficiary
hereunder.
6.8 SEVERABILITY. If any provision of this Agreement shall be held
invalid, illegal or unenforceable, the validity, legality or enforceability of
the other provisions hereof shall not be affected thereby, and there shall
be deemed substituted for the provision at issue a valid, legal and enforceable
provision as similar as possible to the provision at issue.
6.9 ENTIRE UNDERSTANDING. This Agreement, together with the Stock
Purchase Agreement and the Guaranteed Agreements, set forth the entire agreement
and understanding of the parties hereto with respect to the subject matter
hereof and supersede any and all prior agreements, arrangements and
understandings among the parties relating to the subject matter hereof.
6.10 APPLICABLE LAW. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of New York
without giving effect to the principles of conflicts of law thereof.
6.11 HEADINGS. The headings of Sections have been included herein
for convenience only and shall not constitute a part of this Agreement for any
other purpose. References in this Agreement to Sections are to Sections of
this Agreement unless otherwise indicated.
6.12 TERM. Subject to reinstatement as set forth in Section 3.3, this
Agreement shall be in effect until payment and performance in full of all
Guaranteed Obligations.
* * *
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IN WITNESS WHEREOF, the parties have signed this Agreement on the date first
written above.
THE PRUDENTIAL COMPANY OF
AMERICA
By: /S/ XXXXXX XXXX
Name: Xxxxxx Xxxx
Title: Vice President
GIBRALTAR CASUALTY COMPANY
By: /S/ XXXXXX XXXX
Name: Xxxxxx Xxxx
Title: President
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