EXHIBIT 10.29
DATED , 2002
ST. ▇▇▇▇ REINSURANCE COMPANY LIMITED
- and -
PLATINUM RE (UK) LIMITED
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BUSINESS TRANSFER AGREEMENT
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▇▇▇▇▇▇▇▇▇ AND MAY
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CONTENTS
2
PAGE
1. INTERPRETATION 4
2. TRANSFER 9
3. CONDITIONS 10
4. CONDUCT OF BUSINESS BEFORE COMPLETION 10
5. CONSIDERATION 10
6. VAT 11
7. COMPLETION 13
8. ACTION AFTER COMPLETION 13
9. TRANSFER OF CONTRACTS 16
10. OBLIGATIONS OF THE TRANSFEREE AFTER COMPLETION 17
11. APPORTIONMENT 17
12. RISK AND INSURANCE 18
13. [EMPLOYEES 18
14. DATA PROTECTION 20
15. BUSINESS RECORDS AND BUSINESS INFORMATION 20
16. ASSIGNMENT 21
17. ENTIRE AGREEMENT 21
18. REMEDIES AND WAIVERS 21
19. NOTICES 21
20. ANNOUNCEMENTS 22
21. COSTS AND EXPENSES 22
22. COUNTERPARTS 22
23. INVALIDITY 23
3
24. CONTRACTS (RIGHTS OF THIRD PARTIES) ▇▇▇ ▇▇▇▇ 23
25. CHOICE OF GOVERNING LAW 23
26. JURISDICTION 23
27. ARBITRATION 23
THIS AGREEMENT is made the day of , 2002
BETWEEN:
1. ST. ▇▇▇▇ REINSURANCE COMPANY LIMITED a company incorporated in England
(registered number 01460363) whose registered office is The St. ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇ (the "TRANSFEROR")
AND
2. PLATINUM RE (UK) LIMITED a company incorporated in England (registered
number 4413755) whose registered office is at The St. ▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇ ▇▇▇ (the "TRANSFEREE")
WHEREAS:
(A) The St. ▇▇▇▇ Companies, Inc. ("ST. ▇▇▇▇") and Platinum Underwriters
Holdings, Ltd. ("PLATINUM HOLDINGS") entered into a Formation and
Separation Agreement dated - June, 2002 (as such agreement may be amended
from time to time) (the "FORMATION AND SEPARATION AGREEMENT") setting
forth certain terms governing St. Paul's sponsorship of the organisation
of Platinum Holdings and its subsidiaries, actions to be taken in respect
of Platinum Holdings' initial public offering (the "PUBLIC OFFERING") of
its common shares and the ongoing relationships between St. ▇▇▇▇ and its
subsidiaries and Platinum Holdings and its subsidiaries after the
effective date of the Public Offering (the "CLOSING DATE").
(B) Pursuant to the Formation and Separation Agreement, the parties thereto
have agreed to procure that the Transferor will transfer (or procure the
transfer of) the Business Assets to the Transferee on the terms set out in
this Agreement with the intention that the Transferee shall be entitled to
carry on the Business in succession to the Transferor as a going concern.
(C) The Transferor carries on the Business (as defined in this Agreement) and
is the beneficial owner or is otherwise able to procure the transfer of
the Business Assets.
NOW IT IS HEREBY AGREED as follows:-
1. INTERPRETATION
1.1 In this Agreement and the schedules to it, the following words and
expressions, save where the context otherwise requires, shall have the
following meanings:-
"ACT" means Financial Services and Markets ▇▇▇
▇▇▇▇;
"AGREE FORM" in relation to any document means the
document in a form agreed by the parties to
this Agreement and initialled for the
purposes of identification by or on behalf of
them;
"ASSUMED EMPLOYEES" means those individuals listed in
Schedule 3;
"ASSUMED OBLIGATIONS" means all obligations and liabilities of the
Transferor under the Contracts;
"AUTHORISATION" means the date on which the condition listed
in Schedule 1 (Condition) is satisfied;
"AUTHORISATION DATE" means the date on which Authorisation takes
place;
"BUSINESS" means the reinsurance business of the
Transferor insofar as it relates to the
reinsurance contracts entered into or renewed
by the Transferor on or after 1st January,
2002 and so that the expression shall include
the Business Goodwill but shall exclude (i)
the assumption of responsibility for the
liabilities arising in respect of all
reinsurance business entered into or renewed
by the Transferor prior to 1st January, 2002
or the management, administration and run-off
of such reinsurance business and (ii) the
right to use the "St. ▇▇▇▇" brand and any
other brand, trade ▇▇▇▇, service ▇▇▇▇, name,
get-up, logo or device, and any Intellectual
Property and goodwill relating to any of the
foregoing, used from time to time as part of
the insurance branding of the Transferor's
Group;
"BUSINESS ASSETS" means:-
(i) all the assets relating to the
Business (including all the rights
and property relating to the assets
and the benefit of the Contracts)
as specified in the Inventory in
the Agreed Form annexed to this
Agreement; and
(ii) the Business Intellectual Property;
(iii) the Business Goodwill and the
Business Renewal Rights; and
but excluding:-
(i) the Receivables;
(ii) cash in hand or at the bank used in
the Business;
(iii) amounts recoverable in respect of
Taxation relating to the Business
Assets attributable to periods
ended on or before, or transactions
occurring on or before, Completion;
(iv) [for the avoidance of doubt, any
other item shown in the balance
sheet of the Transferor as a
current asset in respect of the
Business;]
"BUSINESS DAY" means a day (other than a Saturday or
Sunday) on which banks are open for business
(other than solely for trading and settlement
in Euros) in London;
"BUSINESS GOODWILL" means all the goodwill and connection of the
Transferor in its reinsurance business but,
for the avoidance of doubt, such expression
shall not include any of the Transferor's
goodwill in the Retained Business or in the
"St. ▇▇▇▇" brand or any other Intellectual
Property used from time to time as part of
the insurance branding of the Transferor's
Group;
"BUSINESS INFORMATION" means all information and know-how (whether
or not confidential and in whatever form
held) which is proprietary to, or in the
possession of, the Transferor;
"BUSINESS INTELLECTUAL means the intellectual property rights listed
PROPERTY" in Schedule 4 and owned by the Transferor in
connection with the Business and all other
Intellectual Property owned and exclusively
used by the Transferor in connection with the
Business but, for the avoidance of doubt,
excluding any Intellectual Property which is
excluded from the definition of "Business"
above;
[NOTE: IS ANY IP THAT IS TO BE TRANSFERRED
GOING TO REQUIRE A LICENCE BACK TO ST. ▇▇▇▇,
IN THE RUN-OFF PERIOD OR THE LONG TERM?];
[ISSUE RELATING TO PRICING MODELS JOINTLY
DEVELOPED BY US AND UK TO BE CLARIFIED]
"BUSINESS RECORDS" means all books and records owned by
the Transferor exclusively containing or
recording Business Information (including,
without limitation, all documents and other
material (including all forms of computer or
machine readable material));
"BUSINESS RENEWAL RIGHTS" means all the direct and indirect rights of
the Transferor to seek to renew reinsurance
treaties, contracts and agreements
underwritten by the Transferor and comprised
within the Business and in force on the
Closing Date;
"COMPANIES ACTS" means the Companies ▇▇▇ ▇▇▇▇, the Companies
Consolidation (Consequential Provisions) ▇▇▇
▇▇▇▇ and the Companies ▇▇▇ ▇▇▇▇;
"COMPLETION" means completion of the transfer of the
Business Assets under this Agreement;
"CONTRACTS" means all the contracts listed in [the
Inventory in the Agreed Form annexed to the
Agreement];
"DATA PROTECTION means the Data Protection ▇▇▇ ▇▇▇▇ and all
LEGISLATION" other applicable laws, statutes, regulations,
edicts, bye-laws, mandatory codes of conduct
and mandatory guidelines, existing from time
to time in respect of the processing of
personal data;
"DISCLOSED DOCUMENTS" means the documents referred to in the index
in the Agreed Form, which documents the
Transferee acknowledges have been made
available to the Transferee and its advisers;
"INTELLECTUAL PROPERTY" means all rights in inventions, patents,
designs, copyrights, trade marks, service
marks, databases, trade secrets and know-how
(whether or not any of those is registered
and including applications for registrations
of the foregoing), together with all rights
or forms of protection of a similar nature or
having equivalent or similar effect to any of
those which may subsist anywhere in the
world;
"INWARDS REINSURANCES" means all reinsurance agreements to which the
Transferor is party as a reinsurer;
"OUTWARDS REINSURANCES" means all reinsurance agreements to which the
Transferor is party as a reinsured;
"RECEIVABLES" means all payments due to the Transferor as
at Completion for goods or services supplied
by the Transferor in the course of carrying
on the Business;
"REGULATIONS" means the Transfer of Undertakings
(Protection of Employment) Regulations 1981;
"RETAINED BUSINESS" means the business carried on by the
Transferor other than the Business;
"SHARED INTELLECTUAL means all Intellectual Property owned by the
PROPERTY" Transferor at Completion and used (but not
exclusively used) by the Transferor in
connection with the Business in the twelve
months prior to Completion, including any
Intellectual Property in the assets listed in
Schedule 5 but, for the avoidance of doubt,
excluding any Intellectual Property which is
excluded from the definition of "Business"
above.
"TAX" or "TAXATION" includes (without limitation) all taxes,
levies, duties, imposts, charges and
withholdings of any nature whatsoever,
whether of the United Kingdom or elsewhere,
together with all penalties, charges and
interest relating to any of them or to any
failure to file any return required for the
purposes of any of them;
"THIRD PARTY CONSENTS" means all consents, approvals, authorisations
or waivers required from third parties for
the transfer or assignment of rights and
obligations under any Contract to the
Transferee;
"TRANSFERRED BUSINESS means all information relating to (i) the
CONFIDENTIAL INFORMATION" Business Assets and (ii) the Inwards and
Outwards Reinsurances [of a confidential
nature or that is not known to any person
other than the Transferor, the Transferee,
any of their respective groups or any of the
representatives of any of the foregoing];
"TRANSACTION DOCUMENTS" means the documents listed in Schedule 5;
"TRANSFEREE'S GROUP" means the Transferee, its subsidiaries and
subsidiary undertakings, any holding company
of the Transferee and all other subsidiaries
and subsidiary undertakings of any such
holding company from time to time;
"TRANSFEROR'S GROUP" means the Transferor, its subsidiaries
and subsidiary undertakings, any holding
company of the Transferor and all other
subsidiaries and subsidiary undertakings of
any such holding company;
"VATA 1994" means the Value Added Tax ▇▇▇ ▇▇▇▇; and
"WORKING HOURS" means 9.00 a.m. to 5.00 p.m. on a Business
Day.
1.2 In construing this Agreement, unless otherwise specified:-
(A) references to clauses, paragraphs and schedules are to clauses and
paragraphs of or schedules to this Agreement;
(B) headings to clauses and schedules are for convenience only and do not
affect the interpretation of this Agreement;
(C) the schedules and any attachments form part of this Agreement and
shall have the same force and effect as if expressly set out in the
body of this Agreement, and any reference to this Agreement shall
include the schedules and any attachments;
(D) use of any gender includes the other gender;
(E) references to a "PERSON" shall be construed so as to include any
individual, firm, company or other body corporate, government, state
or agency of a state, local or municipal authority or government body
or any joint venture, association or partnership (whether or not
having separate legal personality);
(F) any reference to a "DAY" (including within the phrase "BUSINESS DAY")
shall mean a period of 24 hours running from midnight to midnight;
(G) the expressions "HOLDING COMPANY", "SUBSIDIARY" and "SUBSIDIARY
UNDERTAKING" shall have the meaning given in the Companies Acts;
(H) references to writing shall include any modes of reproducing words in
a legible and non-transitory form;
(I) references to times of day are to London time;
(J) a reference to any statute or statutory provision shall be construed
as a reference to the same as it may have been, or may from time to
time be, consolidated, amended, modified or re-enacted;
(K) a reference to any agreement shall be construed as a reference to the
same as it may have been, or may from time to time be, amended,
modified, varied or novated;
(L) references to the knowledge, belief or awareness of the Transferor (or
similar phrases) shall be limited to the actual knowledge of [the
executive directors of Transferor]; and
(M) references to any English legal term for any action, remedy, method of
judicial proceeding, legal document, legal status, court, official or
any legal concept or thing shall in respect of any jurisdiction other
than England be treated as including what most nearly approximates in
that jurisdiction to the English legal term.
2. TRANSFER
2.1 The Transferor agrees to transfer or procure the transfer and the
Transferee agrees to accept the transfer of the Business Assets as a going
concern at and with effect from Completion, with the intention that the
Transferee shall carry on the Business in succession to the Transferor,
the Business being so carried on by the Transferee in succession to the
Transferor pending satisfaction of the condition listed in Schedule 1
(Condition) by the Transferor acting in accordance with its rights and
obligations pursuant to the UK Underwriting Agency and Underwriting
Management Agreement.
2.2 CLAUSE 2.1 shall operate as an assignment of such of the Business
Intellectual Property as is not the subject of a registration or an
application for registration with effect from Completion. Any Business
Intellectual Property which is registered or which is the subject of an
application for registration shall be assigned to the Transferee.
2.3 Where consent of a third party is required for the transfer of any
Business Asset to the Transferee, the Transferor shall use commercially
reasonable endeavours to obtain such consent. For the avoidance of doubt
the Transferor shall not be required to make any payment to any third
party to procure such consent and the Transferor shall have no liability
to the Transferee to the extent that such consent is not obtained by the
Closing Date.
2.4 The consideration for the transfers pursuant to sub-clauses 2.1 and 2.2
will be as set out in CLAUSE 5 (Consideration).
2.5 For the avoidance of doubt, Part 1 Law of Property (Miscellaneous
Provisions) ▇▇▇ ▇▇▇▇ shall not apply for the purposes of this clause.
[ST. ▇▇▇▇ AND PLATINUM TO CONSIDER WHETHER THE 1ST AND 7TH FLOORS AT ▇▇
▇▇▇▇ ▇▇▇▇▇▇ ARE TO BE ASSIGNED OR SUB-LEASED TO PLATINUM.]
2.6 The Transferor shall, with effect from Completion, grant to the Transferee
a perpetual, non-exclusive, irrevocable, royalty-free, assignable licence
(with the right to sublicense) to use the Shared Intellectual Property in
connection with the Business as developed by the Transferee after
Completion.
3. CONDITIONS
3.1 Each of the Transferor and the Transferee will use commercially reasonable
endeavours to fulfil or procure the fulfilment of the condition listed in
SCHEDULE 1 (Condition) as soon as possible and in any event before [30th
June, 2003].
3.2 The Transferee undertakes to keep the Transferor informed as to progress
towards the satisfaction of the condition listed in SCHEDULE 1 (Condition)
and in particular (but without limitation) to disclose in writing to the
Transferor anything which will or may prevent such condition from being
satisfied by [30th June, 2003] immediately where it comes to the notice of
the Transferee.
4. CONDUCT OF BUSINESS BEFORE COMPLETION
The Transferor will procure that, between the date of this Agreement and
Completion, the Business will be carried on in the ordinary and usual
course.
5. CONSIDERATION
5.1 The consideration for the transfer of the Business Assets shall be [the
issue to the Transferor of - common shares in Platinum Holdings].
5.2 The consideration shall be allocated as follows:-
(A) all the assets relating to the Business (including L[ ];
all the rights and property relating to the assets
and the benefit of the Contracts) as specified in
the Inventory in the Agreed Form annexed to this
Agreement
(B) the Business Goodwill L[ ];
(C) Business Renewal Rights L[ ]; and
(D) the Business Intellectual Property L[ ].
5.3 The consideration for the transfer of the Business Assets shall be
delivered in accordance with CLAUSE 7 (Completion) and may be adjusted
under CLAUSE 6 (VAT) and other terms of this Agreement.
6. VAT
[NOTE: IT IS IMPORTANT THAT PLATINUM RE (UK) SHOULD BE REGISTERED FOR VAT
PURPOSES.]
6.1 The Transferor and the Transferee shall use commercially reasonable
endeavours to procure that the transfer of the Business Assets under this
Agreement is treated by H.M. Customs & Excise as a transfer of a business
as a going concern for the purposes of both section 49(1) VATA 1994 and
article 5 Value Added Tax (Special Provisions) Order 1995, except that the
Transferor shall not be required by virtue of this clause to make any
appeal to any court against any determination of H.M. Customs & Excise
that the transfer does not fall to be so treated (so that any such appeal
shall be made solely in accordance with the provisions of CLAUSE 6.5).
6.2 The Transferee declares that it is [duly registered for VAT purposes under
registration number [-] or that it will become liable to be so registered
upon the transfer of the Business Assets] and that the Transferee shall
upon and immediately after Completion use the Business Assets to carry on
the same kind of business (whether or not as part of any existing business
of the Transferee) as that carried on by the Transferor in relation to the
Business Assets before Completion.
6.3 The Transferor shall be entitled to retain all the records of the Business
which under paragraph 6 of Schedule 11 to the VATA 1994 are required to be
preserved after Completion and shall request the Commissioners of H.M.
Customs & Excise to so direct in accordance with section 49(1)(b) VATA
1994. The Transferee shall render all reasonable assistance to the
Transferor in connection with such a request.
6.4 The Transferor shall preserve all the records of the Business that it is
entitled to retain pursuant to SUB-CLAUSE 6.3 for a period consistent with
the longer of its document retention policy in effect at Completion or for
a period of not less than six years from Completion (or for such longer
period as may be required by law) and, upon being given reasonable notice
by the Transferee or its agents, the Transferor shall make those
records available to the Transferee or its agents for inspection (during
Working Hours) or copying (at the Transferee's expense).
6.5 (A) If, notwithstanding the provisions of CLAUSE 6.2, H.M. Customs &
Excise shall determine that VAT is chargeable in respect of the supply
of all or any part of the Business Assets under this Agreement, the
Transferor shall notify the Transferee of that determination within
seven days of its being so advised by H.M. Customs & Excise and the
Transferee shall, unless it exercises its rights under CLAUSE 6.5(B),
pay to the Transferor in cash by way of additional consideration a sum
equal to the amount of VAT determined by H.M. Customs & Excise to be
so chargeable including any interest and penalties thereon within 14
days of the Transferor notifying the Transferee of that determination
(against delivery by the Transferor of an appropriate VAT invoice).
(B) If the Transferee disagrees with the determination of H.M. Customs &
Excise referred to in CLAUSE 6.5(A), it may, within seven days of
being notified by the Transferor of that determination, give notice to
the Transferor that it requires the Transferor to obtain a review by
the Commissioners of H.M. Customs & Excise of that determination and
the Transferor shall forthwith request the Commissioners to undertake
that review.
(C) Upon the Transferor being advised by the Commissioners of H.M. Customs
& Excise of their decision arising out of the review referred to in
CLAUSE 6.5(B), the Transferor shall forthwith notify the Transferee as
soon as possible of that decision and, if the Transferee disagrees
with that decision, the Transferee may:-
(i) give notice to the Transferor that it requires the Transferor
(subject to due compliance by the Transferee with CLAUSE 6.5(D))
to make all such appeals against that decision as the Transferee
shall reasonably request from time to time in such manner as the
Transferee shall reasonably request from time to time; or
(ii) itself make all such appeals against that decision as the
Transferee shall consider appropriate with such assistance from
the Transferor as the Transferee shall reasonably request from
time to time
and, in either such case, the Transferor shall, subject to due
compliance by the Transferee with CLAUSE 6.5(D), promptly
comply with any such request by the Transferee.
(D) The Transferor shall not be obliged to take any action under CLAUSE
6.5(C) unless the Transferee shall indemnify the Transferor against
all reasonable costs, charges and expenses that the Transferor may
properly incur in taking any such action and, in any case where an
appeal cannot be made against the decision of the Commissioners
without the Transferor accounting for the VAT referred to in CLAUSE
6.5(A), unless the Transferee shall also pay to the Transferor in cash
an amount equal to that amount (against delivery by the Transferor of
an appropriate VAT invoice).
(E) Within 14 days of the decision of the Commissioners referred to in
CLAUSE 6.5(C) or, if the Transferee shall have required any appeal or
appeals to be made in accordance with that paragraph, within 14 days
of the decision of the court or tribunal to which the final such
appeal has been made:-
(i) the Transferee shall pay to the Transferor in cash a sum equal to
the amount of VAT that has thereby been determined to be properly
chargeable in respect of the supply of all or any part of the
Business Assets under this Agreement (against delivery by the
Transferor of an appropriate VAT invoice) after deducting from
that sum any amount previously paid by the Transferee to the
Transferor under CLAUSE 6.5(D); or
(ii) if the amount previously paid by the Transferee to the Transferor
under CLAUSE 6.5(D) exceeds the VAT that has been determined to
be properly chargeable in respect of the supply referred to
above, the Transferor shall pay to the Transferee in cash an
amount equal to the excess (which payment shall be treated as a
reduction in the consideration payable for the Business) and
deliver to the Transferee an appropriate credit note for VAT
purposes.
7. COMPLETION
7.1 Completion shall take place simultaneously with the Closing (as defined in
the Formation and Separation Agreement).
7.2 At Completion the Transferor and the Transferee shall do or procure the
carrying out of those things listed in SCHEDULE 2 (Completion
arrangements).
8. ACTION AFTER COMPLETION
8.1 All notifications and correspondence relating to the Business Assets which
are received by any member of the Transferor's Group on or after
Completion shall as soon as reasonably practicable be passed to the
Transferee.
8.2 For a period of two years following the Closing Date neither the
Transferor nor any member of the Transferor's Group nor any of their
respective directors, officers or agents may employ, offer to employ or
solicit with a view to employment any of the Assumed Employees.
8.3 Subject to SUB-CLAUSES 8.4 TO 8.6 of this Agreement, for a period starting
from Completion and ending on the date two years following the Closing
Date (the "RESTRICTED PERIOD") the Transferor shall not (and shall procure
that no member of the Transferor's Group shall):
(A) offer, issue, sell, refer or promote, directly or indirectly, any
contracts, treaties or agreements of reinsurance of the same type as
those comprised in the Business provided that the Transferee or any
member of the Transferee's Group continue to
provide, during the Restricted Period, reinsurance coverage of such
types to third parties; or
(B) disclose to any person (other than the Transferor or any member of the
Transferor's Group or the Transferee or any member of the Transferee's
Group) any Transferred Business Confidential Information that relates
exclusively to the Business except in connection with (i) the
administration of reinsurance contracts with inception dates prior to
1st January, 2002 (the "RUN-OFF BUSINESS") or (ii) the Retained
Business.
8.4 Notwithstanding SUB-CLAUSE 8.3 neither the Transferor nor any member of
the Transferor's Group is prohibited from performing the following
activities [(including without limitation, using and disclosing the
Transferred Business Confidential Information in the ordinary course of
such activities)]:
(A) engaging in any line of business in which it is engaged immediately
after Completion and for which Business Renewal Rights were not
transferred hereunder including, without limitation, administration of
the "Run-off Business" (but not including any renewals thereof),
purchasing reinsurance for its own account, reinsurance business
written through St. Paul's Discover Re operation and Lloyd's of London
operation and property catastrophe facultative reinsurance business
written by St. Paul's CATRisk Property division;
(B) acquiring any person or any interest in any person engaged in any line
of business except for an acquisition of an interest of 50% or more of
any person that generated 50% or more of its gross revenues (excluding
investment income and realised investment gains and losses) in its
most recent audited financial statement by writing property or
casualty reinsurance (a "PERMITTED ACQUIREE"), provided that any
Permitted Acquiree may not use any marks, designs, logos, slogans,
names, words or letters which include the words "St. ▇▇▇▇", "United
States Fidelity and Guaranty" or "Fire and Marine" or those that are
suggestive or, derivative thereof or any logo or ▇▇▇▇ identified with
(or likely to be confused or associated with) "St. ▇▇▇▇", "United
States Fidelity and Guaranty" or "Fire and Marine" (except as may be
required by law) in connection with its reinsurance business, if any;
(C) making investments in the ordinary course of business in any person
that is engaged primarily in the reinsurance business (i.e. a person
that in its most recent audited financial statement derived more than
85% of its gross revenues (excluding investment income and realised
investment gains and losses) from writing property or casualty
reinsurance or, in the case of a new company, that expects to derive
more than 85% of its annual gross revenues (excluding investment
income and realised investment gains and losses) from writing such
contracts), provided that the Transferor or such member of the
Transferor's Group holds any such investment as a passive investment
and does not exercise control over the management of such person, and
provided further that for so long as the Transferor or such member of
the Transferor's Group continues to own 10% or more of the ordinary
shares of such person, any such passive investment of the Transferor
or such member of the Transferor's Group may not exceed 10% of the
voting securities of such person; or
(D) soliciting, offering, issuing, selling, purchasing or referring any
contracts of reinsurance of any type to, from or with any member of
the Transferor's Group or engaging in any reinsurance activities in
connection with the Run-off Business (other than renewals thereof) or
with finite business covered by a Quota Share Retrocession Agreement
(as defined in the Formation and Separation Agreement).
8.5 SUB-CLAUSE 8.3 shall not apply to any member of the Transferor's Group
after the time such member ceases to be a member of the Transferor's
Group. For the avoidance of doubt, SUB-CLAUSE 8.3 also does not apply to
any person which on or after Completion becomes a member of the
Transferor's Group including any person that acquires all or substantially
all of the shares or assets of the Transferor through merger,
consolidation, tender offer, acquisition of assets or otherwise provided,
however, that paragraphs (B) and (C) of sub-clause 8.3 shall apply to such
person.
8.6 Transferred Business Confidential Information shall not include
information relating to the Business which is or becomes generally known
on a non-confidential basis provided that the source of such information
was not bound by a confidentiality agreement or other obligations of
confidentiality. After Completion if the Transferor or any member of the
Transferor's Group or any of their respective directors, officers or
agents is legally requested or otherwise required by (whether or not the
requirement has the force of law) any securities exchange or regulatory or
governmental body to which such person is subject or submits, wherever
situated (including (amongst other bodies) the UK Financial Services
Authority, the London Stock Exchange, The Panel on Takeovers and Mergers,
the Securities and Exchange Commission of the United States or the New
York Stock Exchange), to disclose any Transferred Business Confidential
Information, the Transferor shall (or shall procure that the relevant
member of the Transferor's Group shall) provide the Transferee with prompt
written notice of such request or requirement. If the Transferee takes any
steps to avoid or limit disclosure, the Transferor shall (or shall procure
that the relevant member of the Transferor's Group shall) shall co-operate
with the Transferee at the Transferee's expense. If, in the absence of
such protective steps (or if such protective steps fail to avoid or limit
disclosure of the relevant Transferred Business Confidential Information),
the Transferor or such member of the Transferor's Group is compelled to
disclose any Transferred Business Confidential Information, the Transferor
or such member of the Transferor's Group may disclose any such Transferred
Business Confidential Information without liability hereunder.
8.7 Commencing on the Completion Date, the Transferee shall not (and shall
procure that no member of the Transferee's Group shall) use any marks,
designs, logos, slogans, names, words or letters which include the words
"St. ▇▇▇▇", "United States Fidelity and Guaranty", "Fire and Marine" or
those that are suggestive or derivative thereof or therefrom or which are
likely to be confused or associated with such words, except:
(A) as may be required by law;
(B) for the purposes of historical identification in materials not
designed as advertising or solicitation;
(C) as provided under the Transitional Trademark License Agreement (as
defined in the Formation and Separation Agreement); and
(D) pursuant to the Underwriting Management Agreement (as defined in the
Formation and Separation Agreement) and the UK Underwriting Management
Agreement (as defined in the Formation and Separation Agreement).
8.8 Commencing on the Authorisation Date, the Transferee shall not (and shall
procure that members of the Transferee's Group shall not) use any printed
materials or other means of communication which state, suggest or imply
any affiliation with the Transferor or any member of the Transferor's
Group following Authorisation.
8.9 Each party agrees that neither it nor any member of its group shall make
any statement that would reasonably be viewed as intended to be
disparaging of the business, reputation or good name of the other.
8.10 Each party acknowledges that money damages would not be a sufficient
remedy for any breach of sub-clauses 8.7 to 8.9 by the other or any member
of its group or any of their respective directors, officers or agents.
8.11 The Transferor shall procure that each of [St. Paul's at Lloyd's], [St.
▇▇▇▇ International Insurance Company Limited] and [Union America Insurance
Company Limited] shall enter into separate deeds of covenant in terms
substantially similar to those in SUB-CLAUSES 8.3 TO 8.6 with the
Transferee.
[8.12 The obligations of the parties under SUB-CLAUSES 8.3 TO 8.8 shall
absolutely determine if Authorisation has not occurred by [30th June,
2003]. For the avoidance of doubt all rights and liabilities of the
parties under this CLAUSE 8 which have accrued before such termination
shall continue to exist.]
9. TRANSFER OF CONTRACTS
9.1 Subject to CLAUSE 9.2, the Transferee shall become entitled to the
benefits of the Transferor under the Contracts and this Agreement shall
constitute an assignment of the benefit of all Contracts to the Transferee
with effect from Completion.
9.2 This Agreement shall not constitute an assignment or attempted assignment
of any Contract if the assignment or attempted assignment would constitute
a breach of (or otherwise affect the rights assigned under) such Contract.
9.3 Where a Third Party Consent is required to the assignment of the benefit
of any of the Contracts to the Transferee, the Transferor shall use
commercially reasonable endeavours to obtain any such Third Party Consent
prior to the Closing Date. Upon whichever is the later of Completion and
any such Third Party Consent being obtained, this Agreement shall
constitute an assignment of the benefit of the Contract to which that
Third Party Consent relates. If the Transferor has not obtained such
consent prior to the Closing Date, the Transferor, for a period of up to
12 months subsequent to the Closing Date, shall reasonably co-operate with
the Transferee in attempting to obtain such consent as promptly thereafter
as practicable, provided that the Transferee shall promptly reimburse the
Transferor for any reasonable legal and other expenses incurred in
connection with such co-operation as such expenses are incurred.
9.4 After Completion, and until any necessary Third Party Consent to the
assignment of a Contract is obtained, the following provisions shall apply
(except for any Contract relating to Intellectual Property or know how
where a Third Party Consent is necessary):-
(A) the Transferor shall be treated as holding the benefit of that
Contract in trust for the Transferee and any benefit will be promptly
paid over to the Transferee; and
(B) if it is permissible under the Contract, the Transferee shall perform
on behalf of the Transferor (but at the Transferee's expense), in
accordance with the provisions of CLAUSE 10.2 (Obligations of the
Transferee after Completion), the obligations of the Transferor under
that Contract.
10. OBLIGATIONS OF THE TRANSFEREE AFTER COMPLETION
10.1 Except as otherwise provided in this Agreement, the Transferee undertakes
to the Transferor that, with effect from Completion, it will properly
perform, assume, pay and discharge when due, and indemnify the Transferor
and members of the Transferor's Group against all liabilities, losses,
charges, costs, claims or demands in respect of, all Assumed Obligations.
10.2 The Transferee undertakes that from Completion it will perform the
outstanding obligations and liabilities under the Contracts.
11. APPORTIONMENT
11.1 Without limiting CLAUSE 9.4(A) (Transfer of Contracts), all moneys or
other items belonging to the Transferee which are received by the
Transferor or any member of the Transferor's Group on or after Completion
in connection with the Business Assets shall be held in trust by the
Transferor for the Transferee and shall be promptly paid over to the
Transferee.
11.2 All moneys or other items belonging to the Transferor which are received
by the Transferee or any member of the Transferee's Group on or after
Completion shall be held in trust by the Transferee for the Transferor and
shall be promptly paid over to the Transferor.
11.3 Where anything (including any service) has been provided to the Transferor
in connection with the Business Assets prior to Completion, but any
payment has been made by the Transferee in respect of the price or cost of
it, the Transferor shall pay to the Transferee a sum equal to the amount
of that payment (excluding any amount in respect VAT thereon and suitably
apportioned where the payment relates to the provision of goods or a
service over a period commencing prior to, and ending after, Completion)
and shall hold such sum for the Transferee until it is promptly paid over.
11.4 Where anything (including any service) is to be provided to the Transferee
in connection with the Business Assets after Completion, but any payment
(by way of deposit, prepayment or otherwise) has been made by the
Transferor in respect of the price or cost of it before Completion, the
Transferee shall pay to the Transferor a sum equal to the amount of that
payment (excluding any amount in respect of VAT thereon and
suitably apportioned where the payment relates to the provision of goods
or a service over a period commencing prior to, and ending after,
Completion) and shall hold such sum for the Transferor until it is
promptly paid over.
11.5 Where anything (including any service) is to be provided by the Transferee
under any of the Contracts after Completion, but any payment (whether by
way of deposit, prepayment or otherwise) in respect of the price or cost
of it has been received by the Transferor before Completion, the
Transferor shall pay to the Transferee a sum equal to the amount of that
payment (excluding any amount in respect of output VAT for which the
Transferor is required to account and suitably apportioned where the
payment relates to the provision of goods or a service over a period
commencing prior to, and ending after, Completion) and shall hold such sum
for the Transferee until it is promptly paid over.
11.6 Where anything (including any service) is provided by the Transferor under
any of the Contracts before Completion, but any payment in respect of the
price or cost of it has been received by the Transferee after Completion,
the Transferee shall pay to the Transferor a sum equal to the amount of
that payment (excluding any amount in respect of output VAT for which the
Transferee is required to account and suitably apportioned where the
payment relates to the provision of goods or a service over a period
commencing prior to, and ending after, Completion) and shall hold such sum
for the Transferor until it is promptly paid over.
11.7 All other prepayments and accruals relating to the Business Assets or the
Assumed Employees (including, without limitation, in respect of holiday
pay and bonus payments due to Assumed Employees) shall, to the extent that
they relate to any period commencing prior to and ending after Completion,
be apportioned on a fair and equitable basis between the Transferor and
Transferee and an appropriate payment shall be made to reflect that
apportionment.
12. RISK AND INSURANCE
Risk in the Business Assets shall pass on Completion.
13. [EMPLOYEES
13.1 The Regulations will apply to the transfer of the Business under this
Agreement, so that the contracts of employment of the Assumed Employees
(except in respect of terms relating to occupational pension arrangements)
will have effect from the Closing Date as if originally made between the
Transferee and the Assumed Employees.
13.2 (A) If for any reason the contract of employment of any person who is not
an Assumed Employee is found or alleged to have effect after the date
of this Agreement as if originally made with the Transferee, the
Transferor, in consultation with the Transferee, will, within 14 days
of being so requested by the Transferee, make to that person an offer
in writing to employ him under a new contract of employment, to take
effect upon the termination referred to in CLAUSE 13.2(B), identical
in all respects to that person's contract of employment
immediately before the date of this Agreement. However, the Transferee
must make the request no later than [14] days after becoming aware of
the finding or allegation.
(B) Once that offer has been made (or after the expiry of [14] days after
it has been requested), the Transferee may terminate the employment of
the person concerned and, so long as that termination is effected
within [six] months after the Closing Date, the Transferor will
indemnify the Transferee against any sums payable to, or on behalf of
such person in respect of his employment on or after the Closing Date
and against any claims or losses arising out of such termination.
13.3 (A) If the contract of employment of any Assumed Employee is found or
alleged not to have effect after the date of this Agreement as if
originally made with the Transferee, other than by virtue of
Regulation 5(4A) of the Regulations, the Transferee, in consultation
with the Transferor, will, within 14 days of being so requested by the
Transferor, make to that Assumed Employee an offer in writing to
employ him under a new contract of employment, to take effect upon the
termination referred to in CLAUSE 13.3(B), on terms and conditions
which (other than the identity of the employer and any terms and
conditions relating to an occupational pension scheme) will not differ
from the corresponding provisions of the Assumed Employee's contract
of employment immediately before the date of this Agreement. However
the Transferor must make the request no later than [14] days after the
Transferor becomes aware of such finding or allegation.
(B) Once that offer has been made (or after the expiry of [14] days after
it has been requested), the Transferor shall terminate the employment
of the Assumed Employee concerned and, so long as that termination is
effected within [six] months after the Closing Date, the Transferee
shall indemnify the Transferor against sums payable to or losses
arising from, that Assumed Employee's employment from the Closing Date
and any claims or losses arising out of such termination.
13.4 All wages, salaries, liabilities in respect of the Pay As You Earn System
and National Insurance Contributions and other periodic outgoings in
respect of the Assumed Employees which relate to a period:-
(A) after the Closing Date shall be borne by the Transferee; and
(B) before the Closing Date shall be borne by the Transferor.
13.5 The Transferor shall indemnify the Transferee against any claim in respect
of:-
(A) any breach of contract or applicable law by the Transferor in respect
of any of the Assumed Employees at any time prior to the Closing Date;
(B) the termination of the employment prior to the Closing Date of any
person who was formerly assigned to the Business;
(C) subject to CLAUSE 13.6 any failure by the Transferor to comply with
its obligations under Regulation 10 of the Regulations; and
(D) any breach of CLAUSE 13.4(B).
13.6 The Transferee shall indemnify the Transferor against any claim in respect
of:-
(A) the employment of any Assumed Employee during the period after the
Closing Date including, without limitation, any changes to terms and
conditions of employment by the Transferee;
(B) any termination of the employment of any Assumed Employee by the
Transferee after the Closing Date;
(C) any failure by the Transferee to comply with its obligations under
Regulation 10(3) of the Regulations;
(D) any breach of CLAUSE 13.4(A);
(E) the change in the identity of the employer being significant and to
the detriment of the Assumed Employee; and
(F) any anticipatory breach of contract of employment or anticipatory
substantial change in the working conditions of an Assumed Employee by
the Transferee.]
13.7 [Pensions and other employee benefit provisions relevant to transfer - to
be discussed.]
14. DATA PROTECTION
The Transferee shall at all times comply with all requirements of the Data
Protection Legislation in respect of the Business including, without
limitation, by giving any necessary notification to the Data Protection
Commissioner under Section 18 of the Data Protection ▇▇▇ ▇▇▇▇ prior to
Completion.
15. BUSINESS RECORDS AND BUSINESS INFORMATION
15.1 The Transferor shall retain all the Business Records. On Completion, the
Transferor shall deliver to the Transferee copies of all books, records,
ledgers, files, reports, accounts, data, plans and operating records,
whether in hard copy, electronic format, magnetic or other media, which
are related to (i) the Business Assets and (ii) the Inwards and Outwards
Reinsurances.
15.2 The Transferor acknowledges that the Transferee wishes to inspect and/or
copy the Business Records to the extent that they relate to the Business
(whether exclusively or non-exclusively) and, accordingly, the Transferor
shall, upon being given reasonable notice by the Transferee or its agents
and subject to all rights of third parties, make such Business Records
available to the Transferee or its agents for inspection (during Working
Hours) and to the extent reasonably necessary in connection with the
operation of the Business, copying for a period of seven years from
Completion.
15.3 Notwithstanding sub-clause 15.2 the Transferor shall, upon being given
reasonable notice by the Transferee or its agents and subject to all
rights of third parties, make available to the Transferee copies of the
underwriting files for [reinsurance] contracts underwritten by the
Transferor which are of the same class as those compromised in the
Business in the underwriting years of 1997, 1998, 1999, 2000 and 2001.
16. ASSIGNMENT
This Agreement shall not be assignable by any party hereto without the
prior written consent of the other party.
17. ENTIRE AGREEMENT
17.1 Together this Agreement and the Transaction Documents constitute the whole
and only agreement between the parties relating to the transfer of the
Business Assets.
17.2 This Agreement may only be varied in writing signed by each of the
parties.
17.3 Except in the case of fraud, no party shall have any right of action
against the other party to this Agreement arising out of or in connection
with any draft, agreement, undertaking, representation, warranty, promise,
assurance or arrangement of any nature whatsoever, whether or not in
writing, relating to the subject matter of this Agreement and Transaction
Documents made or given by any person at any time prior to the date of
this Agreement except to the extent that it is repeated in this Agreement
or any Transaction Document.
18. REMEDIES AND WAIVERS
18.1 No failure by either party to this agreement to take any action or assert
any right hereunder shall be deemed to be a waiver of such right in the
event of the continuation or repetition of the circumstances giving rise
to such right, unless expressly waived in writing.
18.2 The single or partial exercise of any right, power or remedy provided by
law or under this Agreement shall not preclude any other or further
exercise of it or the exercise of any other right, power or remedy.
18.3 The rights, powers and remedies provided in this Agreement are cumulative
and not exclusive of any rights, powers and remedies provided by law.
19. NOTICES
All notices hereunder shall be in writing and shall be deemed to have been
duly given if delivered by hand (with receipt confirmed) or by certified
mail, postage prepaid and return receipt requested, or by facsimile
transmission, addressed as follows (or to such other address as a party to
this agreement may designate by written notice to the other) and shall be
deemed given on the date on which such notice is received:
Party and title of individual Address Facsimile no.
----------------------------- ------- -------------
Transferor [ ] [ ]
f.a.o. [ ]
Transferee [ ] [ ]
f.a.o. [ ]
20. ANNOUNCEMENTS
20.1 Neither party to this agreement shall make, or cause to be made, any press
release or public announcement in respect of this agreement or the
transactions contemplated hereby or otherwise communicate with any news
media without the prior written consent of the other party and the parties
shall co-operate as to the timing and contents of any such press release
or public announcement. This clause does not apply in the circumstances
described in CLAUSE 20.2.
20.2 A party may, after consultation with the others, make an announcement
concerning the transfer of Business Assets or any ancillary matter if
required by:-
(A) law; or
(B) any securities exchange or regulatory or governmental body to which
any party is subject or submits, wherever situated, including (amongst
other bodies) the UK Financial Services Authority, the London Stock
Exchange, The Panel on Takeovers and Mergers, the Securities and
Exchange Commission of the United States or the New York Stock
Exchange whether or not the requirement has the force of law.
20.3 The restrictions contained in this CLAUSE 23 shall continue to apply after
the termination of this Agreement without limit in time.
21. COSTS AND EXPENSES
Except as otherwise stated in this Agreement (or any agreement referred to
in this Agreement), each of the Transferor and the Transferee shall pay
its own costs and expenses in relation to the negotiations leading up to
the transfer of the Business and to the preparation, execution and
carrying into effect of this Agreement and all other documents referred to
in it.
22. COUNTERPARTS
22.1 This Agreement may be executed in any number of counterparts, and by the
Transferor and the Transferee on separate counterparts, but shall not be
effective until each party has executed at least one counterpart.
22.2 Each counterpart shall constitute an original of this Agreement, but all
the counterparts shall together constitute but one and the same
instrument.
23. INVALIDITY
If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any jurisdiction,
that shall not affect or impair:-
(A) the legality, validity or enforceability in that jurisdiction of any
other provision of this Agreement; or
(B) the legality, validity or enforceability under the law of any other
jurisdiction of that or any other provision of this Agreement.
24. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
The parties to this Agreement do not intend that any term of this
Agreement should be enforceable, by virtue of the Contracts (Rights of
Third Parties) ▇▇▇ ▇▇▇▇, by any person who is not a party to this
Agreement.
25. CHOICE OF GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English law.
26. JURISDICTION
The courts of England are to have jurisdiction to settle any dispute
arising out of or in connection with this Agreement. Any Proceedings
arising out of or in connection with this Agreement may therefore be
brought in the English courts. This jurisdiction agreement is irrevocable
and is for the exclusive benefit of the Transferor.
27. ARBITRATION
27.1 Subject to CLAUSE 27.10, all matters in difference between the parties
arising under, out of or in connection with this Agreement, including
formation and validity, and whether arising during or after the period of
this Agreement, may be referred by either party to an arbitration tribunal
in the manner hereinafter set out.
27.2 Unless the parties appoint a sole arbitrator within 14 days of one
receiving a written request from the other for arbitration, the claimant
(the party requesting arbitration) shall appoint its arbitrator and give
written notice thereof to the respondent. Within 14 days of receiving such
notice the respondent shall appoint its 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.
27.3 The appointor shall be the Chairman for the time being of the ▇.▇.▇.▇.
Reinsurance and Insurance Arbitration Society of the UK ("▇▇▇▇▇ (UK)") or,
if he is unavailable or it is inappropriate for him to act for any reason,
such person as may be nominated by the Committee of ▇▇▇▇▇ (UK).
27.4 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 days of the appointment of
the respondent's arbitrator then any of them or either of the parties
concerned may apply to the appointor for the appointment of the third
arbitrator. The three arbitrators shall decide by majority. If no majority
can be reached the verdict of the third arbitrator shall prevail. He shall
also act as chairman of the tribunal.
27.5 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.
27.6 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.
27.7 All costs of the arbitration shall be determined by the arbitration
tribunal who may, taking into account the law and practice of the place of
arbitration, direct to and by whom and in what manner they shall be paid.
27.8 Unless the parties otherwise agree, the place of arbitration shall be
London, England and, for the avoidance of doubt, the arbitration tribunal
shall apply English law.
27.9 The award of the arbitration tribunal shall be in writing and binding upon
the parties who consent to carry out the same.
27.10 If any matter in difference between the parties under this Agreement is
related to a matter of difference in the United States of America, such
matter will be subject to whatever arbitration procedure applied to the
matter of difference in the United States of America, provided that the
arbitrator or arbitrators shall apply English law in respect of those
aspects of the matter which relate to the matter in difference between the
parties under this Agreement.
IN WITNESS whereof the parties have entered into this Agreement the day and year
first before written.
Signed by )
for and on behalf of )
ST. ▇▇▇▇ REINSURANCE )
COMPANY LIMITED
Signed by )
for and on behalf of )
PLATINUM RE (UK) LIMITED )
