EXHIBIT 10.29
DATED , 2002
FORM OF ST. ▇▇▇▇ REINSURANCE COMPANY LIMITED
-and-
PLATINUM RE (UK) LIMITED
--------------------------------------------
BUSINESS TRANSFER AGREEMENT
--------------------------------------------
▇▇▇▇▇▇▇▇▇ and May
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
Ref: GWJ/GHXC/ESYL
CONTENTS
PAGE
1. INTERPRETATION 5
2. TRANSFER 11
3. AUTHORISATION 14
4. CONDUCT OF BUSINESS BEFORE COMPLETION 14
5. CONSIDERATION 14
6. VAT 15
7. COMPLETION 17
8. APPORTIONMENT 18
9. RISK AND INSURANCE 18
10. EMPLOYEES 19
11. DATA PROTECTION 23
12. NON-COMPETITION 23
13. ASSIGNMENT 25
14. FURTHER ASSURANCE 26
15. ENTIRE AGREEMENT 26
16. REMEDIES AND WAIVERS 26
17. NOTICES 26
18. ANNOUNCEMENTS 27
19. COSTS AND EXPENSES 27
20. COUNTERPARTS 28
21. INVALIDITY 28
22. CONTRACTS (RIGHTS OF THIRD PARTIES) ▇▇▇ ▇▇▇▇ 28
23. CHOICE OF GOVERNING LAW 28
24. ARBITRATION 28
25. CONFLICT 29
SCHEDULES
PAGE
Schedule 1 (Completion arrangements) 30
Schedule 2 (Assumed Employees) 32
Schedule 3 (Business Intellectual Property) 35
Schedule 4 (Shared Intellectual Property) 37
Schedule 5 (Transaction Documents) 38
Schedule 6 (Property) 39
AGREED FORM DOCUMENTS
Inventory
4
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.
(D) The Transferor intends to enter into three 100% quota share retrocession
agreements (the "UK QUOTA SHARE RETROCESSION AGREEMENTS") with Platinum
Underwriters Reinsurance Inc. on the date hereof in respect of certain
reinsurance business written (as specified in those quota share
retrocession agreements) by the Transferor on or after 1st January, 2002
(including reinsurance business written after the date hereof and prior to
the earlier of 31st December, 2002 and the date on which authorisation of
the Transferee to carry on reinsurance business in the United Kingdom is
granted by the Financial Services Authority). The Transferor has [obtained
the consent] of the retrocessionaires in respect of the retrocession
covers relating to this business to include Platinum Underwriters
Reinsurance Inc. as a reinsured under such covers.
5
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 ▇▇▇
▇▇▇▇;
"AGREED 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;
"ASSET TRANSFER AGREEMENT" means the inter-company asset transfer
agreement dated [-] June, 2002 between St.
▇▇▇▇ Management Limited and the Transferor
providing for the transfer of certain assets
by St. ▇▇▇▇ Management Limited to the
Transferor;
"ASSUMED EMPLOYEES" means those individuals who were employed
prior to Completion by the Employer or in
the case of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ by St ▇▇▇▇ Re
Inc. and who are listed in Schedule 2 Part 1
(underwriting staff assigned to the
Business) and in Schedule 2 Part 2 (persons
otherwise working in the Retained Business);
"AUTHORISATION" means the authorisation of the Transferee to
carry on reinsurance business in the United
Kingdom of the classes comprised within the
Business under the Act;
"AUTHORISATION DATE" means the date on which Authorisation takes
place;
"BUSINESS" means the business of the Transferor other
than the Retained Business 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 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;
6
"BUSINESS ASSETS" means:-
(i) all the assets relating to the
Business (including all the rights and
property relating to the assets) as
specified in the Inventory in the
Agreed Form annexed to this Agreement;
(ii) the Business Intellectual Property;
and
(iii) the Business Goodwill and the Business
Renewal Rights;
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) the benefit of any reinsurance
contract entered into or renewed by
the Transferor; and
(v) for the avoidance of doubt, any other
item which would be accounted for as a
current asset in respect of the
Business in accordance with the
accounting principles and practices
adopted by the Transferor;
"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;
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"BUSINESS INTELLECTUAL means the intellectual property rights
PROPERTY" listed in Schedule 3 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;
"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;
"COMPLETION DATE" means the date of Completion;
"DATA PROTECTION LEGISLATION" means the Data Protection ▇▇▇ ▇▇▇▇ and all
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;
"EMPLOYER" means St. ▇▇▇▇ Management Limited;
"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;
"KEY EMPLOYEES" means those Assumed Employees identified by
"KE" in Schedule 2;
"LEADENHALL BUSINESS means the leasehold property situated at
PROPERTY" ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇;
"LEADENHALL TENANT" means St ▇▇▇▇ Management Limited (registered
number 00972175)
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"LIME BUSINESS PROPERTY" means the leasehold property situated at
floors one and seven, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇;
"LIME BUSINESS PROPERTY means the two leases of the Lime Business
LEASES" Property between The Prudential Assurance
Company Limited (1) and the Transferor (2)
dated 13th July, 1994 and 5th April, 1995
respectively;
"PROPERTY CONSENT" means the consent of any landlord or other
third party required for the assignment of
the Leadenhall Business Property to the
Transferee;
"PROPERTY TRANSFER" means the assignment of the Leadenhall
Business Property in accordance with the
relevant provisions of this agreement;
"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;
"RELEVANT TRANSFER" means a relevant transfer for the purposes
of the Regulations;
"RETAINED BUSINESS" means the management (but not the renewal)
of all insurance and reinsurance business
written by the Transferor prior to
Completion and the writing and management of
such other reinsurance business as may be
written on or after Completion with the
prior written consent of the Transferee or
as may be written on or after Completion on
behalf of the Transferor by the Transferee
pursuant to the UK Underwriting Agency and
Underwriting Management Agreement (as
defined in the Formation and Separation
Agreement);
"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 4 but, for the avoidance of
doubt, excluding any Intellectual Property
which is excluded from the definition of
"Business" above;
9
"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;
"TAX COUNSEL" means Tax counsel who is of at least ten
years' standing and who:
(i) is reasonably acceptable to both
parties to this agreement; or
(ii) failing agreement between the parties,
is appointed by the President from
time to time of the Law Society of
England and Wales;
"TRANSFERRED BUSINESS means:-
CONFIDENTIAL INFORMATION"
(i) originals or 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 the
Business Assets provided, however,
that the information about the
Business Assets shall not include
minute books and other similar records
and files including tax returns;
(ii) copies of all reinsurance agreements
entered into by the Transferor on or
after 1st January, 2002 and retroceded
to Platinum Reinsurance Inc. pursuant
to the relevant UK Quota Share
Retrocession Agreement (the
"REINSURANCE AGREEMENTS") together
with copies of all related placement
slips and binders, inuring
retrocessional contracts, actuarial
analyses, underwriting files, claims
files, correspondence with brokers,
cedants and inuring retrocessional
reinsurers, and relevant detail
(whether in hard copy, electronic
format, magnetic or other media); and
10
(iii) copies of the underwriting files and
relevant detail (whether in hard copy,
electronic format, magnetic or other
media) for contracts that were
underwritten by the Transferor in the
1997, 1998, 1999, 2000, and 2001
underwriting years and the customer
and brokers lists relevant to the
Business Renewal Rights, including
copies of contracts, placement slips
and binders, inuring retrocessional
contracts, actuarial analyses,
information pertaining to aggregate
premium and loss activity,
correspondence with brokers, cedants
and inuring retrocessional reinsurers
but excluding any information that the
Transferor reasonably believes to be
legally privileged and any individual
claims or loss information;
For the avoidance of doubt, Transferred
Business Confidential Information does not
include any information relating to Retained
Business to be made available to the
Transferee pursuant to the Formation and
Separation Agreement;
"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;
11
(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 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;
and
(M) references to a "RENEWED CONTRACT" relate to contractual rights and
obligations arising after the renewal date only.
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 with such
title as the Transferor is required to deliver under the Formation and
Separation Agreement as a going concern at and with effect from
Completion, but so that the Business shall be carried on by the Transferee
until the earlier of the Authorisation Date and 31st December, 2002 solely
as agent of the Transferor and solely in accordance with the respective
rights and obligations of the Transferor and the Transferee pursuant to,
and subject as provided in, Part B of the UK Underwriting Agency and
Underwriting Management Agreement (as defined in the Formation and
Separation
12
Agreement) and so that following Authorisation (and only following
Authorisation), the Transferee will be entitled to assume and carry on the
Business for its own account and benefit in succession to the Transferor.
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 The Transferor shall use commercially reasonable endeavours to obtain
prior to Completion any consent, approval or authorisation necessary for
the transfer of the Business Assets as contemplated in this Agreement. If
the Transferor has not obtained such consent, approval or authorisation
necessary for the transfer of any of the Business Assets as contemplated
by this Agreement prior to Completion, the Transferor, for a period of up
to 12 months subsequent to Completion, shall reasonably co-operate with
the Transferee in attempting to obtain such consents, approvals or
authorisations 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. The Transferor may not exercise any of its
rights under any of the Business Assets with respect to which such
consent, approval or authorisation to the transfer thereof has not been
obtained by Completion except at the direction of or on behalf of the
Transferee or a member of the Transferee's Group, and the Transferee or
such member of the Transferee's Group shall be responsible for any
Liabilities (as defined in the Formation and Separation Agreement) in
respect of such Business Assets after Completion provided that the
Transferor shall not be required to take any action directed by the
Transferee under any agreement relating to a Business Asset that would
cause a breach of such agreement where the Transferor or a member of the
Transferor's Group reasonably believes that it retains liability for such
breach.
[PLEASE CONFIRM LATEST STATUS IN RELATION TO THE APPLICATION FOR
MEMBERSHIP OF THE IUA].
2.4 Where consent of a third party is required for the transfer of any
Business Intellectual Property 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 Completion.
2.5 The consideration for the transfer of the Business Assets pursuant to
sub-clause 2.1 will be as set out in CLAUSE 5 (Consideration).
2.6 Without prejudice to the Transferor's obligations to pass title in
accordance with the Formation and Separation Agreement but for the
avoidance of doubt, Part 1 Law of Property (Miscellaneous Provisions) ▇▇▇
▇▇▇▇ shall not apply for the purposes of this clause.
2.7 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.
13
2.8 (A) The Transferor authorises the Transferee to use the Lime Business
Property on a non-exclusive basis from the Completion Date until the
earlier of:
(i) the Property Completion Date of the Leadenhall Business
Property as referred in Schedule 6;
(ii) the delayed legal completion date of the Leadenhall Business
Property as determined in accordance with clause 5.1 in
Schedule 6; and
(iii) the date on which either party has given written notice to the
other to treat the Leadenhall Business Property as withdrawn
from the sale and purchase set out in this agreement in
accordance with clause 5.2 in Schedule 6.
(B) In consideration of the Transferor agreeing to permit the Transferee
to occupy the Lime Business Property, the Transferee (i) is to pay
to the Transferor on the same dates as such sums are payable
pursuant to the Lime Business Property Leases a licence fee
equivalent to all rents, service charges and other outgoings paid by
the Transferor in respect of the Lime Business Property, (ii) is to
observe and perform the covenants and conditions on the part of the
lessee in the Lime Business Property Leases, other than payment of
rents, (iii) is not to infringe any statutory requirement relating
to the Lime Business Property and (iv) is to indemnify the
Transferor in respect of all costs, claims, liabilities and expenses
incurred by the Transferor as a result of any act, neglect, default
or omission on the part of the Transferee to perform or comply with
such covenants and conditions or as a consequence of any breach of
the terms of the Lime Business Property Leases arising from the
Transferee's occupation of the Lime Business Property. The licence
fee referred in (i) above is expressed exclusive of amounts in
respect of VAT. If such fee is the consideration for a taxable
supply for VAT purposes, the Transferee shall, in addition to such
fee, pay, on receipt of a valid VAT invoice, an amount equal to any
VAT which may from time to time be chargeable in respect of supplies
made under this licence.
(C) The Transferee acknowledges that the consent of the landlord (the
"LANDLORD") under the Lime Business Property Leases has not been
obtained to the Transferee's occupation of the Lime Business
Property. The Transferor will apply to the Landlord and use
commercially reasonable endeavours to obtain the consent of the
Landlord to the Transferee's occupation of the Lime Business
Property. The Transferor shall pay the professional and other fees
of any landlord incurred in connection with the application for the
consent of the Landlord to the Transferee's occupation of the Lime
Business Property. Pending the grant of such consent and if such
consent is refused, the Transferee agrees to vacate the Lime
Business Property upon the written request of the Transferor.
(D) The Transferor and the Transferee agree that the Transferee's
occupation of the Lime Business Property takes effect as a mere
licence and does not grant the Transferee exclusive possession or
grant a tenancy.
14
2.9 The Transferor will procure that the Leadenhall Tenant will sell and the
Transferee will purchase the Leadenhall Business Property in accordance
with the terms of SCHEDULE 6.
3. AUTHORISATION
3.1 From the date hereof until 31st December, 2002, each of the Transferor and
the Transferee will use commercially reasonable endeavours to obtain the
Authorisation as soon as possible, provided that the Transferor shall not
be required to take any action which would be prejudicial to its
commercial interests including, without limitation, contributing to the
Transferee any capital investment (other than the transfer of the Business
in accordance with this Agreement) or incurring any costs or liability.
3.2 Each party undertakes to keep the other informed as to progress towards
the obtaining of the Authorisation and in particular (but without
limitation) to disclose in writing to the other party anything which will
or may prevent the Authorisation being obtained by 31st December, 2002
immediately where it comes to that party's notice.
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 all the rights and property relating to
the assets) as specified in the Inventory in the
Agreed Form annexed to this Agreement
(B) the Business Goodwill [ ];
(C) the Business Renewal Rights [ ]; and
(D) the Business Intellectual Property [ ].
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.
15
6. VAT
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
parties 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 provided that the Commissioners of H.M. Customs
& Excise so direct in accordance with section 49(1)(b) VATA 1994. The
Transferee shall render all reasonable assistance to the Transferor in
connection with the Transferor's request to the Commissioners of H.M.
Customs & Excise to so direct.
6.4 The Transferor shall preserve in the UK 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, clause 6.6 shall determine whether the
consideration payable pursuant to clause 5.1 shall be reduced, and
the Transferee shall, unless CLAUSE 6.5(B) applies, pay to the
Transferor by way of additional consideration a sum equal to the
amount of VAT so chargeable 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 Transferor and the Transferee disagree with the determination
of H.M. Customs & Excise referred to in CLAUSE 6.5(A), or if
SUB-CLAUSE (F) applies, they shall obtain a review by the
Commissioners of H.M. Customs & Excise of that determination and
SUB-CLAUSES 6.5(C) TO (F) (inclusive) shall apply. The Transferor
and the Transferee
16
shall be responsible jointly for obtaining such review and shall
give each other all reasonable assistance and co-operation in that
regard.
(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
Transferor and the Transferee disagree with that decision or if
SUB-CLAUSE (F) applies, the Transferor and the Transferee shall be
responsible jointly for the making of all such appeals against that
decision as the Transferor and the Transferee shall agree.
(D) All costs, charges and expenses properly incurred in taking any
action pursuant to SUB-CLAUSES (B) TO (E) (inclusive) shall be borne
by the Transferor and the Transferee equally 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), the Transferee shall 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 an appeal or appeals have been 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 Assets) and deliver to the Transferee an appropriate
credit note for VAT purposes.
(F) If either the Transferor or the Transferee does not disagree with
the determination of H.M. Customs & Excise referred to in CLAUSE
6.5(A) or the Transferor and the Transferee disagree as to the
course of action to be taken pursuant to this CLAUSE 6 (including
whether or not to appeal a decision of H.M. Customs & Excise or a
decision of any court or tribunal and the manner of any such
appeal), then SUB-CLAUSES (B) TO (E) (inclusive) shall apply only if
Tax Counsel has, once both parties have had a reasonable opportunity
to make submissions to Tax Counsel, delivered a written opinion
(taking account of all relevant factors) to both parties to the
effect that it is appropriate to obtain a review of the
determination or which recommends a course of action to be taken by
the parties pursuant to this CLAUSE 6. If such an opinion is
17
delivered, the parties agree to apply SUB-CLAUSES (B) TO (E)
(inclusive) in accordance with such opinion.
6.6 If the Transferee is unable to recover in full input tax (if any) in
respect of any of the supplies of Business Assets pursuant to this
Agreement, then the consideration payable pursuant to CLAUSE 5.1 ("IC")
shall be reduced to the aggregate amount found by applying the following
formula to the consideration allocated to each category of asset specified
in CLAUSE 5.2 and adding the totals thereof:
1
---------------
1 + (0.5 (0.175 - R))
where R means:
(i) in respect of supplies constituted by the transfer of Business
Assets pursuant to this Agreement which are taxable supplies, the
percentage of input tax in respect thereof which is recoverable by
the Transferee (expressed as the decimal fraction obtained by
applying the said percentage to 0.175); and
(ii) in all other cases 0.175,
and provided that for this purpose R shall be determined in good faith by
the Transferee and shall be adjusted as necessary following any agreement
with H.M. Customs & Excise or otherwise with such consequential
adjustments being made to IC as are then appropriate (using for the
avoidance of doubt for the purpose of this recalculation the original
allocations as stated at the date of this Agreement in CLAUSE 5.2),
and so that the consideration and allocation pursuant to CLAUSE 5.1 AND
5.2 shall be adjusted in accordance with the results of the above process,
and so that the Transferor shall be liable to make such payment to the
Transferee as is equal to the amount of any reduction in the consideration
payable pursuant to CLAUSE 5.1 and the Transferee shall make such payments
of additional consideration as are required under CLAUSE 6.5 (A) OR (E)
and so that the two said amounts may be set off to the maximum extent
possible leaving a net payment, and finally so that, if pursuant to any
further application of this clause to determine IC (if R is adjusted as
referred to above), IC changes (upwards or downwards), such adjusting
payments shall be made as are necessary.
7. COMPLETION
7.1 Completion shall take place on the Closing Date (as defined in the
Formation and Separation Agreement), provided that this Agreement shall
become effective on that date immediately after delivery of the Firm St.
▇▇▇▇ Shares (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 1 (Completion
arrangements).
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8. APPORTIONMENT
8.1 All moneys or other items to which the Transferee is properly entitled
under the terms hereof 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.
8.2 All moneys or other items to which the Transferor is properly entitled
under the terms hereof 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.
8.3 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 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 Transferee until it is
promptly paid over.
8.4 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.
8.5 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.
8.6 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.
9. RISK AND INSURANCE
Risk in the Business Assets shall pass on Completion.
19
10. EMPLOYEES
10.1 The Transferee and Transferor agree that Completion will constitute a
Relevant Transfer which will take place in its entirety on the Completion
Date and the Assumed Employees listed in Part 1 of Schedule 2 ("PART 1
EMPLOYEES") shall transfer under the Regulations to the Transferee from
the Employer on the Completion Date upon the terms and conditions referred
to in sub-clause 10.7(B).
10.2 The Transferee and Transferor agree that if a Relevant Transfer shall not
occur prior to the Authorisation, the Authorisation will constitute a
Relevant Transfer which will take place in its entirety on the
Authorisation Date and sub-clause 10.6 shall apply to the Part 1 Employees
between the Completion Date and the Authorisation Date and the Part 1
Employees shall thereafter transfer under the Regulations to the
Transferee from the Employer on the Authorisation Date upon the terms and
conditions referred to in sub-clause 10.7(B).
10.3 The Transferee and Transferor agree that the Transferee will immediately
upon Completion make to each of the Assumed Employees listed in Part 2 of
Schedule 2 ("PART 2 EMPLOYEES") an offer in writing to employ them under a
new contract of employment, to take effect from Completion upon the terms
and conditions referred to in sub-clause 10.7(B).
10.4 If for any reason, any Part 1 Employee is found not to have transferred to
the Transferee pursuant to the Regulations, other than by virtue of
Regulation 5(4A) of the Regulations, the Transferee in consultation with
the Transferor will as soon as is reasonably practicable but no later than
within 14 days of learning of the said finding make any such Part 1
Employees an offer in writing to employ him under a new contract of
employment to take effect as soon as possible thereafter upon the terms
and conditions referred to in sub-clause 10.7(B). In the event that any
Part 1 Employee declines such offer, the Transferor may at its discretion
procure that the Employer terminate the employment of such Part 1
Employee. So long as that termination is effected within three months
after the date of the said finding, the Transferee will indemnify the
Transferor and the Employer against any sums payable and each and every
liability, claim, demand, expense or cost (including without limitation
legal costs and expenses incurred by the Transferor on a solicitor and own
client basis in settling, contesting or dealing with any such claim or
demand) to, or on behalf of such person in respect of his employment on or
after Completion arising out of such termination.
10.5 (A) If for any reason any person who is not an Assumed Employee is found
to have transferred to the Transferee pursuant to the Regulations,
the Transferor in consultation with the Transferee will, upon
receipt of the Transferee's written notification that it does not
wish to employ that person, as soon as is reasonably practicable but
no later than within 14 days of being so notified by the Transferee,
procure that the Employer make to that person an offer in writing to
employ him under a new contract of employment upon the terms and
conditions referred to in sub-clause 10.7(B) or alternatively
request that the Transferee terminate the employment of that person.
However, the Transferee must serve the notice no later than 14 days
after becoming aware of the finding.
20
(B) Once an offer has been made or the Employer has asked the Transferee
to terminate the employment of any person who is not an Assumed
Employee (or at the latest after the expiry of 14 days after the
said notification), the Transferee may terminate the employment of
the person concerned and, so long as that termination is effected
within three months after the date of the said finding, the
Transferor will indemnify the Transferee against any sums payable
to, or on behalf of such person in respect of the termination of his
employment and each and every liability, claim, demand, expense or
cost (including without limitation legal costs and expenses incurred
by the Transferee on a solicitor and own client basis in settling,
contesting or dealing with any such claim or demand) on or after the
Completion and against any claims or losses arising out of such
termination.
10.6 In the event of sub-clause 10.2 applying or where any Part 2 Employee
remains employed by the Employer pending acceptance by him of an offer of
employment by the Transferee, then in respect of such Assumed Employees,
between Completion and the Authorisation Date (or where relevant earlier
acceptance of the relevant offer):
(A) the Transferor shall use commercially reasonable endeavours to
procure that the Employer shall in respect of those Assumed
Employees (except with the express prior written consent of the
Transferee):
(i) make each of them available to the Transferee to provide
services to the Transferee and so far as is reasonably
practicable in the same manner as prior to Completion;
(ii) not engage in any act or omission which gives rise to any
liability in relation to them including without limitation for
breach of contract, unfair dismissal, and sex, race and
disability discrimination and shall comply with all
obligations imposed on it by all statutes, regulations,
collective agreements, customs and practices relevant between
it and them or any trade union or their terms of employment or
any laws relating to health and safety; and
(iii) subject to the provisions of sub-clauses 10.6(B)(iii) and
10.7(C)(iii) be responsible for all due salary payments and
any other emoluments in accordance with their contracts of
employment with the Employer including tax and national
insurance payments, holiday, sick pay and all other
contractual remuneration and benefits and not subject them to
any disciplinary action, dismiss them or in any way change
their contracts of employment (with or without those
Employees' consent),
(B) The Transferee shall in respect of those Assumed Employees (except
with the express prior written consent of the Transferor):
(i) provide work for each of them in the same manner as prior to
Completion so far as is reasonably practicable and subject to
sub-clause 10.6(A) have the day to day control of the manner
in which those Employees perform their duties;
21
(ii) not engage in any act or omission which would, if it were
their employer, give rise to any liability in relation to them
including without limitation for breach of contract, unfair
dismissal, and sex, race and disability discrimination or
which causes the Employer or the Transferor or of any member
of the Transferor's Group to incur such a liability and shall
comply with all obligations which if it were their employer
would be imposed on it by all statutes, regulations,
collective agreements, customs and practices relevant between
it and those Employees or any trade union or the terms of
employment of the Assumed Employees or any laws relating to
health and safety; and
(iii) without prejudice to sub-clause 10.7(C)(iii), fully reimburse
the Employer on a monthly basis in respect of all salary
payments and other emoluments in accordance with the their
contracts of employment including tax and national insurance
payments, holiday and sick pay.
10.7 In respect of salaries and other contractual emoluments and pension
provision the Transferor and Transferee agree:
(A) with effect from the earlier of the Completion Date or the date on
which any Assumed Employee becomes an employee of the Transferee
then in relation to that Assumed Employee all salaries and other
contractual emoluments, tax and national insurance payments, and
accrued holiday pay shall be borne by the Transferee from that date
and all necessary apportionments shall be made and from the
Completion Date life insurance premiums and pension payments
pursuant to sub-clause 10.7(C)(iii) shall be borne by the
Transferee;
(B) with the exception of occupational pension arrangements and share
scheme arrangements such salaries and other contractual emoluments
shall be the same as or not substantially less favourable and giving
rise to detriment, than any Assumed Employee's terms and conditions
of employment before the Completion Date or the date on which any
Assumed Employee becomes an employee of the Transferee whichever is
the more favourable to the Assumed Employee; and
(C) (i) upon Completion or immediately following Completion to the
extent the Transferor has not already done so, the Transferor
shall use [its best endeavours] to obtain the approval of the
relevant authorities and the consent of the trustees (the
"TRUSTEES") of the St. ▇▇▇▇ Pension Plan (the "PLAN") and the
Employer to the adherence of the Transferee to the Plan for a
period not exceeding six months from the Completion Date (the
"PARTICIPATION PERIOD") in respect of those Assumed Employees
who are at the time of Completion contracted-out members of
the Plan (the "MEMBERS") and who shall either continue as or
become Members of the defined contribution section of the Plan
on the Completion Date until the Transferee ceases its
participation in the Plan;
(ii) upon Completion or immediately following Completion to the
extent the Transferor and Employer have not already procured
the execution of a Deed
22
of Adherence to the Plan by the Trustees and the Employer, the
Transferor shall use [its best endeavours] to procure such
execution and the Transferee will execute such Deed of
Adherence upon or immediately following Completion; and
(iii) the Transferee shall during the Participation Period pay
contributions to the Trustees of the Plan at the rate of 11.9%
of the Member's Basic Earnings as defined in the trust deed
and rules of the Plan comprising a 10% pension contribution
and 1.9% life insurance contribution and shall also pay to the
Employer an amount to be agreed between the Employer and the
Transferee to reflect the administration expenses of the Plan,
such contributions and expenses to be paid monthly.
10.8 The Transferee and the Transferor shall procure that their respective
obligations herein are complied with by each member of the Transferor's
Group including the Employer and each member of the Transferee's Group
respectively.
10.9 Subject to the Transferor's overriding indemnity in sub-clause 10.5(B),
the Transferee shall indemnify the Transferor and the Employer against any
breach of its employment obligations under this Agreement and each and
every liability, claim, demand, expense or cost (including without
limitation legal costs and expenses incurred by the Transferor on a
solicitor and own client basis in settling, contesting or dealing with any
such claim or demand) relating to or arising out of any claim by an
Assumed Employee transferring under the Regulations that in consequence of
the transfer of the Business to the Transferee:
(A) there has been or will be a substantial change in such employee's
terms and conditions of employment to his detriment;
(B) any act or omission of the Transferee in relation to such employee
occurring [on or] after the Completion Date including without
limitation against any claim for redundancy payments or protective
awards and any liability for wrongful dismissal or unfair dismissal
or otherwise in connection with the transfer of such employee to the
Transferee; and
(C) any claim by any trade union staff association staff body or
employee representatives (together "REPRESENTATIVES") arising out of
any act or omission by the Transferee including the Transferee's
failure to comply with its legal obligations to such Representatives
or to the Transferor including without limitation any failure by the
Transferee to comply with its obligations under Regulation 10 of the
Regulations.
10.10 Subject to the Transferee's overriding indemnity in sub-clause 10.4, 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
Completion Date;
23
(B) the termination of the employment prior to the Completion Date of
any person who was formerly assigned to the Business; and
(C) subject to clause sub-10.9(C) any failure by the Transferor to
comply with its obligations under Regulation 10 of the Regulations.
10.11 The Transferor (and the Employer so procured by the Transferor) and
Transferee shall each notify the others promptly in writing giving full
details of any matters in respect of which either the Transferor or
Employer or Transferee shall or may be entitled to claim an indemnity
under this clause 10 from the other. If the indemnifying party shall so
request in writing, the indemnified party shall consult with the
indemnifying party at all material stages regarding the care and conduct
of resisting, compounding or contesting each such matter including without
limitation any demand, claim or proceedings so as to avoid or mitigate any
loss and/or disrepute to the indemnifying party and the indemnified party
shall [at its own expense] give upon request of the indemnifying party any
co-operation, assistance or information as may be reasonably requested
which is relevant to such matters.
11. 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.
12. NON-COMPETITION
12.1 For a period of two years following the Closing Date (the "RESTRICTED
PERIOD") the Transferor may not (other than pursuant to the UK
Underwriting Agency and Management Agreement of [even date] between the
parties):-
(A) offer, issue, sell, refer or promote, directly or indirectly, any
contracts, treaties or agreements of reinsurance of the same type as
the Reinsurance Agreements or of the same type as those for which
the Transferor has transferred Business Renewal Rights to the
Transferee provided that the Transferee or members of the
Transferee's Group continue to provide, during the Restricted
Period, reinsurance coverage of such types to third parties;
(B) employ, offer to employ or solicit with a view to employment any of
the Key Employees (save that pending receipt of Authorisation,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ [other] will remain as directors of the
Transferor and the foregoing, together with [ ], will be made
available by the Transferee to the Transferor to act in their
capacities as approved persons of the Transferor for the purposes of
the Rule Book of the Financial Services Authority) or
(C) use or disclose to any person other than the Transferee or members
of the Transferee's Group, any Transferred Business Confidential
Information except in connection with the administration of (i) the
Reinsurance Agreements or (ii) the
24
Retained Business provided that the Transferor will disclose
Transferred Business Confidential Information only in the ordinary
course of business, consistent with past practice including in
connection with resolving claims and the purchase of retrocessional
coverage and provided, further, that the Transferor shall use
reasonable efforts to avoid providing Transferred Business
Confidential Information to a competitor of the Transferee under
circumstances reasonably likely to materially impair the value of
the Business Renewal Rights;
provided that, in the case of Transferred Business Confidential
Information that relates to the Reinsurance Agreements, the Restricted
Period shall be indefinite.
12.2 Notwithstanding any other provision of sub-clause 12.1 to the contrary,
the Transferor is not prohibited from:
(A) engaging in any line of business in which it is engaged immediately
after the completion of the Public Offering and for which Business
Renewal Rights were not transferred hereunder, including, without
limitation, the administration of reinsurance contracts with
inception dates prior to January 1, 2002 (the "RUN-OFF BUSINESS")
and the Reinsurance Agreements (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, subject to the limitation in (C) below, any
interest in any person engaged in any line of business except for an
acquisition of an interest of more than 49% 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
financial year for which financial statements are available, 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.
▇▇▇▇", "USF&G" or "F&G" or those that are suggestive or, derivative
thereof, or any logo or ▇▇▇▇ identified with "St. ▇▇▇▇", "USF&G" or
"F&G" (except as may be required by law) in connection with its
reinsurance business, if any, provided further, however, that the
Transferor may acquire an interest of more than 49% of a person that
is not a Permitted Acquiree if the Transferor promptly divests the
property or casualty reinsurance operations of such person; or
(C) soliciting, offering, issuing, selling, purchasing or referring any
contracts of reinsurance of any type to, from or with any of its
subsidiaries or engaging in any reinsurance activities in connection
with the Run-off Business (other than renewals thereof) or with
finite business which is either covered by a Quota Share
Retrocession Agreement (as defined in the Formation and Separation
Agreement) or which the Transferee and members of the Transferee's
Group declines to reinsure.
12.3 During the Restricted Period the Transferor shall not sponsor or assist,
directly or indirectly, in the sponsorship of a newly formed property or
casualty reinsurer for so long as St. ▇▇▇▇ continues to own 10% or more of
the outstanding common shares of Platinum Holdings.
25
12.4 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 obligation of
confidentiality. If the Transferor is legally requested or required under
an order or subpoena issued by a court, administrative agency or
arbitration panel (through oral examination, interrogatories, requests for
information or documents, civil investigation demand or other legal,
administrative or arbitration processes) to disclose any Transferred
Business Confidential Information, the Transferor shall provide the
Transferee with prompt written notice of the request, requirement,
subpoena or order to permit the Transferee (if it so elects) to seek
appropriate protective steps preventing or limiting disclosure. If the
Company seeks such steps to avoid or limit disclosure, the Transferor
shall co-operate with the Transferee at the Transferee's expense. If, in
the absence of such protective steps, the Transferor is compelled to
disclose any Transferred Business Confidential Information, the Transferor
may disclose such Transferred Business Confidential Information without
liability hereunder.
12.5 The Transferor shall treat any Transferred Business Confidential
Information with the same degree of care with which it treats its own
confidential information.
12.6 Each party agrees that money damages would not be a sufficient remedy for
any breach of sub-clauses 12.1 to 12.5 by the Transferor.
12.7 Commencing on the Closing Date, the Transferee may not use any marks,
designs, logos, slogans, names, words or letters which include the words
"United States Fidelity and Guaranty", "St. ▇▇▇▇", "Fire and Marine" or
those that are suggestive or derivative thereof or likely to be confused
or associated therewith, except (i) as may be required by law, (ii) for
the purposes of historical identification in materials not designed as
advertising or solicitation, (iii) as provided under the Transitional
Trademark License Agreement (as defined in the Formation and Separation
Agreement), and (iv) pursuant to the Underwriting Management Agreement and
the UK Underwriting Agency and Underwriting Management Agreement (as
defined in the Formation and Separation Agreement).
12.8 The Transferee shall not use any printed materials or other means of
communication which state, suggest or imply any affiliation with St. ▇▇▇▇
or any of its subsidiaries following the Closing Date other than
references to St. Paul's ownership of the St. ▇▇▇▇ Shares (as defined in
the Formation and Separation Agreement) or to this Agreement, the
Reinsurance Agreements or the Ancillary Agreements (as defined in the
Formation and Separation Agreement) or the subject matter thereof.
12.9 Each party agrees that it shall not make any statement that would
reasonably be viewed as intended to be disparaging of the business,
reputation or good name of the other.
13. ASSIGNMENT
This Agreement shall not be assignable by any party hereto without the
prior written consent of the other party.
26
14. FURTHER ASSURANCE
14.1 The Transferor shall, from time to time on request, do or procure the
doing of all such acts and/or execute or procure the execution of all such
documents in a form reasonably satisfactory to the Transferee which the
Transferee may reasonably consider necessary for giving full effect to
this Agreement and securing to the Transferee the full benefit of the
rights, powers and remedies conferred upon the Transferee in this
Agreement.
14.2 The Transferee shall, from time to time on request, do or procure the
doing of all such acts and/or execute or procure the execution of all such
documents, in particular (without limitation) any instrument of assumption
and acknowledgements, in a form reasonably satisfactory to the Transferor
as the Transferor may reasonably consider necessary for giving full effect
to this Agreement or to secure to the Transferor the full benefit of the
rights, powers and remedies conferred upon the Transferor in this
Agreement.
15. ENTIRE AGREEMENT
15.1 Together this Agreement and the Transaction Documents constitute the whole
and only agreement relating to the transfer of the Business Assets.
15.2 This Agreement may only be varied in writing signed by each of the
parties.
15.3 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.
16. REMEDIES AND WAIVERS
16.1 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.
16.2 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.
16.3 The rights, powers and remedies provided in this Agreement are cumulative
and not exclusive of any rights, powers and remedies provided by law.
17. 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
27
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. [ ]
18. ANNOUNCEMENTS
18.1 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 18.2.
18.2 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.
18.3 The restrictions contained in this CLAUSE 18 shall continue to apply after
the termination of this Agreement without limit in time.
19. 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 Assets and to the preparation, execution and
carrying into effect of this Agreement and all other documents referred to
in it.
28
20. COUNTERPARTS
20.1 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.
20.2 Each counterpart shall constitute an original of this Agreement, but all
the counterparts shall together constitute but one and the same
instrument.
21. 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.
22. 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.
23. CHOICE OF GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English law.
24. ARBITRATION
24.1 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.
24.2 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.
24.3 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
29
inappropriate for him to act for any reason, such person as may be
nominated by the Committee of ▇▇▇▇▇ (UK).
24.4 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.
24.5 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.
24.6 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.
24.7 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.
24.8 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.
24.9 The award of the arbitration tribunal shall be in writing and binding upon
the parties who consent to carry out the same.
25. CONFLICT
In the event of any conflict between the provisions of this Agreement and
the Formation and Separation Agreement, the provisions of the Formation
and Separation Agreement shall prevail.
IN WITNESS whereof the parties have entered into this Agreement the day and year
first before written.
30
SCHEDULE 1
(COMPLETION ARRANGEMENTS)
1. MATTERS TO BE DEALT WITH BY THE TRANSFEROR
At Completion, the Transferor shall:
(A) Transfer of Business Assets capable of delivery
Deliver to the Transferee all the Business Assets which are capable
of transfer by delivery with the intent that legal and beneficial
title to these Business Assets shall pass by and upon delivery.
(B) Other Matters
Deliver to the Transferee:
(i) the [ANCILLARY AGREEMENTS] duly executed by the Transferor;
(ii) all relevant National Insurance and PAYE records fully
completed and showing that payments are up-to-date;
(iii) a copy of the minutes of a meeting of the directors of the
Transferor authorising the execution by the Transferor of this
Agreement and all other relevant documents to which the
Transferor is a party referred to in this Agreement; and
(iv) [a release or certificate of non-crystallisation duly executed
by the chargee of any charge subsisting over any of the
Business Assets] [IS THERE ANY SECURITY OVER ANY OF THE
BUSINESS ASSETS?].
(C) Vacant Possession of Lime Business Property
The Transferor shall give vacant possession of the Lime Business
Property (and of the other Business Assets capable of possession) to
the Transferee.
2. MATTERS TO BE DEALT WITH BY THE TRANSFEREE
Following compliance by the Transferor with its obligations under
PARAGRAPH 1 above, the Transferee:
(A) shall deliver to the Transferor a copy of the minutes of a meeting
of the directors of the Transferee authorising the execution by the
Transferee of this
31
Agreement and all other relevant documents to which the Transferee
is a party referred to in this Agreement; and
(B) shall deliver to the Transferor a certificate, duly executed by
Platinum Holdings in favour of the Transferor, for [ ] common
shares in Platinum Holdings in consideration for the transfer of the
Business Assets by the Transferor to the Transferee.
32
SCHEDULE 2
(ASSUMED EMPLOYEES)
Part 1 Assumed Employees
PLATINUM UK FUNCTIONS SURNAME FORENAME KEY
EMPLOYEES
INTERNATIONAL
UNDERWRITING/SOLUTIONS
Underwriter: Casualty ▇▇▇▇▇▇ ▇▇▇▇▇ KE
Former Underwriter/General ▇▇▇▇▇▇▇ ▇▇▇▇▇ KE
Manager
Underwriter ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Trainee Actuary ▇▇▇▇ ▇▇
Underwriter ▇▇▇▇ ▇▇▇▇▇▇▇▇
Underwriter ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Underwriter ▇▇▇▇▇▇ ▇▇▇▇▇
Actuary ▇▇▇▇▇ ▇▇▇▇
Underwriter Property ▇▇▇▇▇▇▇ ▇▇▇ KE
Underwriter ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ KE
Managing Director ▇▇▇▇▇▇▇ ▇▇▇ KE
Underwriter ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Underwriter and Actuary ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
underwriter ▇▇▇▇▇▇▇ ▇▇▇▇
Underwriter ▇▇▇▇▇▇ ▇▇▇▇▇▇
Actuary ▇▇▇▇ ▇▇▇▇▇ KE
33
Underwriting secretary ▇▇▇▇▇ Cath
Underwriter ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Secretary ▇▇▇▇▇▇▇▇ ▇▇▇
Underwriting Actuary (part ▇▇▇▇▇▇ ▇▇▇▇
qualified)
Underwriter & Actuary ▇▇▇▇▇▇ ▇▇▇
34
PART 2
SUPPORT SERVICES SURNAME FORENAME
Accounts Assist ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Finance Controller ▇▇▇▇▇ ▇▇▇▇▇▇▇ KE
Finance Director ▇▇▇▇▇▇ ▇▇▇ KE
Claims Manager ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ KE
Claims Handler ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
PA/HR ▇▇▇▇▇▇ ▇▇▇▇▇
IT Technical ▇▇▇▇▇▇▇ ▇▇▇▇▇
IT Systems Development ▇▇▇▇▇ ▇▇▇▇▇▇▇ KE
Underwriting Admin Read ▇▇▇▇▇▇▇
Actuary ▇▇▇▇ ▇▇▇▇▇▇ KE
IT Technical ▇▇▇▇▇ ▇▇▇▇▇
Accounts Assistant ▇▇▇▇▇▇▇ ▇▇▇▇
35
SCHEDULE 3
(BUSINESS INTELLECTUAL PROPERTY)
The following underwriting pricing models (being identified by their directory
file names, as at 19 June, 2002:
T:\PCMODELS\2002Models\......
AGGFFT02
AGGHM02
AggSim5PO2
AggSimLN02
CASXPO02
Exper02
GENXPO02
INTCAT02
INTILW02
IntMtr02
LOSSDI02
NAILW02
PROPXP02
ProRat02
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇
36
T:\Pricing\2002\UK Cat\Aggregates\Processed Aggs\.......
\Aggs_UK2002_AreaConsolid_290900.xls
\Aggs_UK2002_district_fudge.xls
\Aggs_UK2002_Sector_Filter_CMP.xls
\Aggs_UK2002_Sector_RMS.xls
\Aggs_UK2002_Sector_Thames.xls
\RMS Sectors.xls
\Thames Sectors.xls
S:\Marine\Pricing\2002\Cargo and Specie.......
\Limits_profile_3.xls
\Limits_profile_estimation.xls
\profile generator_cargo.xls
S:\Marine\Pricing\2002\Hull\.........
\Hull Model 2002 CMP.xls
\Limits profile Hull.xls
\ profile generator.xls
T: \ Pricing\PCModels_Dev\UKcat2001small_2002.xls
S:\Marine\Pricing\2002\rig\pricing 2002 model.xls
S:\Marine\Pricing\2002\Satellite\Satellite Pricing Model 2002.xls
S:\Marine\Pricing\2002\Clashmod.WK4
37
SCHEDULE 4
(SHARED INTELLECTUAL PROPERTY)
ARS - Actuarial Reserving System.
SWAT - Financial Reporting System.
▇▇▇▇ - Financial Reporting Database.
Oil Rig database.
Underwriting Treaties Database.
Claims Lotus Notes databases.
38
SCHEDULE 5
(TRANSACTION DOCUMENTS)
Formation and Separation Agreement
UK Underwriting Agency and Underwriting Management Agreement
Asset Transfer Agreement
39
SCHEDULE 6
(PROPERTY)
1. MATTERS TO WHICH THE SALE IS SUBJECT
The Leadenhall Business Property is sold subject to and (where
appropriate) with the benefit of the following matters:
(A) all local land charges and all matters capable of registration as
local land charges;
(B) all notices served and orders, demands, proposals or requirements
made by any local or other competent authority;
(C) all exceptions and reservations of whatever nature, all rights of
way, water, light, air or other rights, easements, quasi-easements,
servitudes and wayleaves (whether constituted in the title deeds or
otherwise); and
(D) the covenants, obligations and conditions on the part of the lessee
contained in the lease by which the Leadenhall Tenant holds the
Leadenhall Business Property.
2. VACANT POSSESSION
The Leadenhall Business Property is sold with vacant possession of the
whole on the date which is 3 months after the Completion Date (the
"PROPERTY COMPLETION DATE").
3. TITLE
The Transferee shall be deemed to be purchasing with full knowledge of the
contents of all deeds and other documents of title complete and accurate
copies of which have been supplied to the Transferee before the date of
this agreement.
4. PROPERTY CONSENTS
4.1 If a Property Consent remains to be obtained as at the Property Completion
Date this paragraph shall continue to apply until the relevant Property
Consent shall have been obtained or until this agreement shall cease to
apply to the Leadenhall Business Property in accordance with the terms of
this agreement.
4.2 The Transferor shall procure that the Leadenhall Tenant will use
reasonable endeavours at its own expense to obtain the Property Consent.
40
4.3 The Transferee shall supply all references and other evidence and
information reasonably required by any landlord in order to obtain the
Property Consent and shall comply with any conditions referred to in the
lease under which the Leadenhall Business Property is held or any other
conditions reasonably imposed by any landlord as conditions of giving the
Property Consent which shall include (but without limitation) the lodging
of any security with the landlord.
4.4 The Transferor shall pay the professional and other fees of any landlord
incurred in connection with the applications for the Property Consent.
4.5 If the Property Consent shall not have been obtained by the Property
Completion Date the Transferor shall procure that the Leadenhall Tenant
will in relation to the Leadenhall Business Property:
(A) at its own expense make and pursue an application to the Court for a
declaration that the Property Consent is being withheld unreasonably
(where the relevant landlord is not entitled to withhold consent in
such a manner); and
(B) at its own expense apply to the relevant landlord for its consent to
an underlease to the Transferee for a term equal to the residue of
the term of the relevant lease (less three days) and otherwise on
the same terms of such lease in which case the expression "Property
Consent" shall be deemed to include the consent sought by such
application.
5. DELAYED LEGAL COMPLETION
5.1 If a Property Consent has not been obtained by the Property Completion
Date in relation to the Leadenhall Business Property then the date for
legal completion of the purchase of the Leadenhall Business Property shall
be postponed to the ten Business Days after the earlier of:
(A) evidence is provided to the Transferee's Solicitors that the
Property Consent has been obtained;
(B) the expiration of the period for the lodging of an appeal against a
decision of a court of competent jurisdiction that the Property
Consent is being unreasonably withheld without such appeal being
lodged; and
(C) the Transferee (if it so elects) giving notice that it wishes to
complete the Property Transfer notwithstanding the non-issue of the
Property Consent.
5.2 If any Property Consent has not been obtained by the date which is 3
months after the Property Completion Date in relation to the Leadenhall
Business Property then either party may by written notice to the other and
at any time thereafter unless and until
41
such Property Consent is in fact obtained elect by written notice or
notices to treat the Leadenhall Business Property so affected as withdrawn
from the sale and purchase set out in this agreement so that the parties'
obligations in respect of the Leadenhall Business Property shall end
immediately after the relevant notice is served without limiting any
accrued rights of action.
6. APPORTIONMENTS
6.1 All rents, rates and other outgoings in respect of the Leadenhall Business
Property for the period before the Property Completion Date shall be borne
by the Leadenhall Tenant and for any period after the Property Completion
Date shall, subject to PARAGRAPH 5 (Delayed legal completion), be borne by
the Transferee.
6.2 All rents and other periodical payments receivable in respect of the
Leadenhall Business Property for any period of time before the Property
Completion Date shall belong to and be payable to the Leadenhall Tenant
and for any period of time after that day shall, subject to PARAGRAPH 5
(Delayed legal completion) belong to and be payable to the Transferee.
7. THE PROPERTY TRANSFER
7.1 Subject to PARAGRAPH 7.3, on the Property Completion Date or, if later, on
legal completion the Transferor will procure that the Leadenhall Tenant
shall deliver a duly executed Property Transfer of the Leadenhall Business
Property to the Transferee or as the Transferee may direct and the
Transferor will procure that the Leadenhall Tenant assigns with full title
guarantee.
7.2 The Transferor and the Leadenhall Tenant will not by reason of the
covenants implied by statute or otherwise expressed in any Property
Transfer of the Leadenhall Business Property be deemed to covenant
expressly or impliedly that the obligations contained in any lease of the
Leadenhall Business Property relating to its state and condition have been
complied with and the Property Transfer will contain a declaration to that
effect.
7.3 If the Leadenhall Tenant has applied to the relevant landlord for its
consent to an underlease in accordance with PARAGRAPH 4.5(B) and the
Leadenhall Tenant has obtained such consent (but has not obtained a
consent for the transfer or assignment), on legal completion the
Transferor will procure that the Leadenhall Tenant delivers a duly
executed underlease of the Leadenhall Business Property to the Transferee
or as the Transferee may direct and the Transferee will accept the
underlease and will deliver a duly executed counterpart to the Leadenhall
Tenant.
42
8. STANDARD CONDITIONS
Insofar as the same are applicable and are not inconsistent with the
express terms of this agreement the Standard Conditions of Sale (3rd
Edition) are incorporated in this agreement except that:
(A) (i) "transfer" means the Property Transfer;
(ii) "working day" means Business Day;
(B) Conditions 1.1.1(a), 1.2, 1.3, 1.4, 2, 3.3.2(b), (c) and (e), 4.1.1,
4.2.1, 4.3.2, 5.1.2, 5.2, 6.1, 6.3.1, 6.3.2, 6.3.6, 6.4, 6.5, 6.7,
6.8, 7.1, 7.2, 7.3, 7.5, 7.6, 8.1.3, 8.2.4, 8.2.5, 8.3 and 9 shall
not apply; and
(C) the words "at least five working days" shall be deleted from
condition 8.2.6.
Signed by )
for and on behalf of )
ST. ▇▇▇▇ REINSURANCE )
COMPANY LIMITED
Signed by )
for and on behalf of )
PLATINUM RE (UK) LIMITED )