EXHIBIT 10.19
ASSIGNMENT OF NET PREMIUM RECEIVABLES
BY AND BETWEEN
LASALLE BANK NATIONAL ASSOCIATION
AND
ROYAL INDEMNITY COMPANY,
ROYAL SURPLUS LINES INSURANCE COMPANY,
LANDMARK AMERICAN INSURANCE COMPANY
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JULY 1, 2003
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This ASSIGNMENT OF NET PREMIUM RECEIVABLES (the "Assignment
Agreement"), dated as of July 1, 2003, is entered into by and between Royal
Indemnity Company ("RIC"), Royal Surplus Lines Insurance Company ("RSLIC"),
Landmark American Insurance Company ("Landmark", and together with RIC and
RSLIC, the "Ceding Companies") and LaSalle Bank National Association (the
"Trustee"). Capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Acquisition Agreement (defined below).
W I T N E S S E T H
WHEREAS, the Trustee is the trustee of "Underwriters
Reinsurance Company, Grantor" trust (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").
(b) The parties hereto agree and acknowledge that
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.
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
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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 and deliver UCC financing statements 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 the mutual written consent of the Ceding Companies and
Trustee; 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 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.
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
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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.
Section 9. ARBITRATION. Any right of action hereunder or any
dispute between the parties hereto arising out of, or relating to the formation,
interpretation, performance, or breach of this Assignment Agreement, whether
such dispute arises before or after termination of this Assignment Agreement,
shall be submitted to arbitration in accordance with the terms and procedures of
Article XIII of the Quota Share Reinsurance Agreements.
Section 10. AMENDMENT. This Assignment Agreement may only be
amended or modified by a written instrument executed by the parties hereto.
Section 11. GOVERNING LAW. This Assignment Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
regardless of the laws that might otherwise govern under applicable principals
of conflicts of laws thereof.
Section 12. 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 of Delaware for the purposes
of enforcing this Assignment Agreement. If any action is brought in a state
court, the parties shall take such actions as are within their control to cause
any matter contemplated hereby to be assigned to the Chancery Court of the State
of Delaware. In
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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 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 article and
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.
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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, LANDMARK AMERICAN INSURANCE
COMPANY, and LASALLE BANK NATIONAL ASSOCIATION as of the date first above
written.
ROYAL INDEMNITY COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief
Executive Officer
ROYAL SURPLUS LINES INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief
Executive Officer
LANDMARK AMERICAN INSURANCE COMPANY
By: /s/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
Title: President and Chief
Executive Officer
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Xxxxx X. Xxxxx
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Name: Xxxxx X. Xxxxx
Title: Vice President
