Exhibit 2
FORMATION AND SEPARATION AGREEMENT
between
THE ST. ▇▇▇▇ COMPANIES, INC.
and
PLATINUM UNDERWRITERS HOLDINGS, LTD.
dated as of ____________, 2002
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.01 Definitions...................................................................................2
SECTION 1.02 Other Definitional Provisions................................................................11
ARTICLE II
CONTRIBUTION OF ASSETS; ST. ▇▇▇▇ INVESTMENT
SECTION 2.01 Transfer of Assets...........................................................................11
SECTION 2.02 Renewal Rights Information...................................................................13
SECTION 2.03 Joint Ownership..............................................................................13
SECTION 2.04 Assumption and Retention of Liabilities......................................................13
SECTION 2.05 St. ▇▇▇▇ Investment..........................................................................13
SECTION 2.06 Third Party Consents.........................................................................14
SECTION 2.07 Cash Contribution............................................................................14
ARTICLE III
INTERCOMPANY TRANSACTIONS AS OF THE CLOSING DATE; CLOSING
SECTION 3.01 Ancillary Agreements.........................................................................15
SECTION 3.02 Payment of Expenses..........................................................................19
SECTION 3.03 Closing......................................................................................20
SECTION 3.04 Closing Deliveries by St. ▇▇▇▇...............................................................20
SECTION 3.05 Closing Deliveries by the Company............................................................20
SECTION 3.06 Subsequent Exercise of Over-Allotment Option.................................................21
ARTICLE IV
SEPARATION
SECTION 4.01 Settlement of Intercompany Accounts..........................................................21
SECTION 4.02 Removal of Platinum US from Intercompany Agreements and Representation.......................22
SECTION 4.03 Discontinuing of Insurance Coverage..........................................................22
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF ST. ▇▇▇▇
SECTION 5.01 Organization, Authority and Qualification....................................................22
SECTION 5.02 Financial and Convention Statements..........................................................23
SECTION 5.03 No Conflict..................................................................................23
SECTION 5.04 Transferred Assets...........................................................................24
SECTION 5.05 St. ▇▇▇▇ Investment..........................................................................24
SECTION 5.06 Taxes........................................................................................25
SECTION 5.07 Contracts of Platinum US.....................................................................26
SECTION 5.08 No Other Representations or Warranties.......................................................26
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 6.01 Organization, Authority and Qualification....................................................26
SECTION 6.02 No Conflict..................................................................................27
SECTION 6.03 St. ▇▇▇▇ Investment..........................................................................27
SECTION 6.04 Internal Retrocession Agreements.............................................................26
SECTION 6.05 No Other Representations or Warranties.......................................................28
ARTICLE VII
NON-COMPETITION; USE OF NAME; ADMINISTRATION OF RUN-OFF CONTRACTS;
INSURANCE MATTERS
SECTION 7.01 Non-Competition..............................................................................28
SECTION 7.02 Use of Names; Non-Disparagement..............................................................31
SECTION 7.03 Standard for Administration of Run-off Business..............................................31
SECTION 7.04 Quotations for Certain Insurance Coverage....................................................31
ARTICLE VIII
TAX MATTERS
SECTION 8.01 Taxes of Platinum US.........................................................................31
SECTION 8.02 Conveyance Taxes.............................................................................33
SECTION 8.03 Tax Proceedings..............................................................................33
SECTION 8.04 Allocation of Consideration..................................................................34
SECTION 8.05 Section 197 Election.........................................................................34
SECTION 8.06 Indemnification as Adjustment................................................................34
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ARTICLE IX
CONDITIONS TO CLOSING
SECTION 9.01 Conditions to Obligations of St. ▇▇▇▇ and the Company........................................34
SECTION 9.02 Conditions to Obligations of St. ▇▇▇▇........................................................35
SECTION 9.03 Conditions to Obligations of the Company.....................................................36
ARTICLE X
INDEMNIFICATION
SECTION 10.01 General Cross Indemnification................................................................36
SECTION 10.02 Registration Statement Indemnification and Contribution......................................37
SECTION 10.03 Limitations on Indemnification Obligations...................................................40
SECTION 10.04 Procedures for Indemnification of Third Party Claims.........................................40
SECTION 10.05 Remedies Cumulative..........................................................................42
SECTION 10.06 Survival of Indemnities......................................................................42
ARTICLE XI
ACCESS TO INFORMATION; FURTHER ASSURANCES
SECTION 11.01 Access to Information........................................................................42
SECTION 11.02 Retention of Records.........................................................................43
SECTION 11.03 St. ▇▇▇▇ Confidential Information............................................................44
SECTION 11.04 Further Assurances; No Agency; Specific Performance..........................................44
ARTICLE XII
PRE-EMPTIVE RIGHTS; REPURCHASE PROGRAMS; TRANSFER RESTRICTIONS;
STANDSTILL
SECTION 12.01 Pre-Emptive Rights...........................................................................45
SECTION 12.02 Share Buy-Back Programs......................................................................47
SECTION 12.03 Transfer Restrictions; Standstill Provisions.................................................47
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01 Survival.....................................................................................48
SECTION 13.02 Governing Law; Dispute Resolution............................................................48
SECTION 13.03 Notices......................................................................................49
SECTION 13.04 Amendment and Modification...................................................................50
SECTION 13.05 Successors and Assigns.......................................................................50
SECTION 13.06 No Third Party Beneficiaries.................................................................51
SECTION 13.07 Headings.....................................................................................51
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SECTION 13.08 Severability.................................................................................51
SECTION 13.09 Waiver.......................................................................................51
SECTION 13.10 Expenses.....................................................................................51
SECTION 13.11 Public Announcement..........................................................................51
SECTION 13.12 Entire Agreement.............................................................................51
SECTION 13.13 Assignment of this Agreement.................................................................51
SECTION 13.14 Counterparts.................................................................................51
SECTION 13.15 Limit on Recovery from Company Directors and Officers........................................52
Exhibit 3.01(a) Forms of Quota Share Retrocession Agreements
(i) One hundred percent quota share retrocession agreement
(traditional) between St. ▇▇▇▇ Fire and Marine Insurance
Company and Platinum Underwriters Reinsurance, Inc.
(ii) One hundred percent quota share retrocession agreement
(non-traditional) between St. ▇▇▇▇ Fire and Marine Insurance
Company and Platinum Underwriters Reinsurance, Inc.
(iii) One hundred percent quota share retrocession agreement
(non-traditional B-1) between St. ▇▇▇▇ Fire and Marine
Insurance Company and Platinum Underwriters Reinsurance,
Inc.
(iv) One hundred percent quota share retrocession agreement
(non-traditional B-2) between St. ▇▇▇▇ Fire and Marine
Insurance Company and Platinum Underwriters Reinsurance,
Inc.
(v) One hundred percent quota share retrocession agreement
(non-traditional C) between St. ▇▇▇▇ Fire and Marine
Insurance Company and Platinum Underwriters Reinsurance,
Inc.
(vi) One hundred percent quota share retrocession agreement
(non-traditional D-1) between Mountain Ridge Insurance
Company and Platinum Underwriters Reinsurance, Inc.
(vii) One hundred percent quota share retrocession agreement
(non-traditional D-2) between Mountain Ridge Insurance
Company and Platinum Underwriters Reinsurance, Inc.
(viii) One hundred percent quota share retrocession agreement
(non-traditional D-3) between St. ▇▇▇▇ Fire and Marine
Insurance Company and Platinum Underwriters Reinsurance,
Inc.
(ix) One hundred percent quota share retrocession agreement
(non-traditional D-4) between St. ▇▇▇▇ Fire and Marine
Insurance Company and Platinum Underwriters Reinsurance,
Inc.
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(x) One hundred percent quota share retrocession agreement
(non-traditional D-Stop Loss) between Mountain Ridge
Insurance Company and Platinum Underwriters Reinsurance,
Inc.
(xi) One hundred percent quota share retrocession agreement
(non-traditional D-Spread Loss) between St. ▇▇▇▇ Fire and
Marine Insurance Company and Platinum Underwriters
Reinsurance, Inc.
(xii) One hundred percent quota share retrocession agreement
(non-traditional E) between St. ▇▇▇▇ Fire and Marine
Insurance Company and Platinum Underwriters Reinsurance,
Inc.
(xiii) One hundred percent quota share retrocession agreement
(traditional) between St. ▇▇▇▇ Reinsurance Company Limited
and Platinum Underwriters Reinsurance, Inc.
(xiv) One hundred percent quota share retrocession agreement
(non-traditional A) between St. ▇▇▇▇ Reinsurance Company
Limited and Platinum Underwriters Reinsurance, Inc.
(xv) One hundred percent quota share retrocession agreement
(non-traditional B-1) between St. ▇▇▇▇ Reinsurance Company
Limited and Platinum Underwriters Reinsurance, Inc.
(xvi) One hundred percent quota share retrocession agreement
between St. ▇▇▇▇ Reinsurance Company Limited and Platinum Re
(UK) Limited.
Exhibit 3.01(b)(i) Form of Master Services Agreement
Exhibit 3.01(b)(ii) Form of UK Master Services Agreement
Exhibit 3.01(c)(i) Form of Run-off Services Agreement
Exhibit 3.01(c)(ii) Form of UK Run-off Services Agreement
Exhibit 3.01(d) Form of Option Agreement
Exhibit 3.01(e) Form of Transitional Trademark License Agreement
Exhibit 3.01(f) Form of Registration Rights Agreement
Exhibit 3.01(g) Form of Employee Benefits and Compensation Matters Agreement
Exhibit 3.01(h) Form of Underwriting Management Agreement
Exhibit 3.01(i) Form of
(i) Assignment and Assumption Agreement among
Metropolitan Life Insurance Company, St. ▇▇▇▇ Re and
Platinum US
(ii) Assignment and Assumption Agreement among WHCHC Real
Estate Limited Partnership, St. ▇▇▇▇ Re and Platinum
US
(iii) Sublease Agreement among St. ▇▇▇▇ Reinsurance
Management Corporation and Platinum US
(iv) Assignment and Assumption Agreement among Taisei
Fire & Marine Insurance Co., St. ▇▇▇▇ Re and
Platinum US
(v) License Agreement between St. ▇▇▇▇ Re UK and
Platinum UK
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Exhibit 3.01(j) Form of UK Business Transfer Agreement
Exhibit 3.01(k) Form UK Underwriting Agency and Underwriting Management
Agreement
Exhibit 3.04(b) Form of ▇▇▇▇ of Sale
Exhibit 6.04 Form of Quota Share Retrocession Agreements between
Platinum US, as Retrocedent, and Platinum Bermuda, as
Retrocessionnaire
Schedule 1.01 List of Classes of Business Included in the Transferred
Lines
Schedule 2.01(b) Transferred Personal Property
Schedule 2.01(c) Intellectual Property
Schedule 2.01(g) Exceptions to Renewal Rights
Schedule 2.01(i) Information in Respect of Transferred Assets
Schedule 2.01(j) Information to be Provided in Respect of Reinsurance
Agreements
Schedule 2.02 Information in Respect of Renewal Rights
Schedule 3.02(a) Expenses Payable by the Company
Schedule 3.02(b) Expenses Payable by St. ▇▇▇▇
Schedule 4.02 Agreements between Platinum US and St. ▇▇▇▇ Subsidiaries to
be Terminated
Schedule 5.04(a)(i) Exceptions to Good and Marketable Title of Transferred
Assets
Schedule 5.04(a)(ii) Encumbrances on Transferred Assets
Schedule 5.06(c) Statutory Periods of Limitations
Schedule 5.06(d) Tax-related Agreements
Schedule 5.06(f) Tax Delinquencies, Claims, Audits, Examinations, Actions,
Suits, Proceedings or Investigations in Progress or Pending
Schedule 5.06(h) Platinum US Affiliated Group Membership for Tax Filings
Schedule 5.07 Contracts of Platinum US
Schedule 6.02(b) Regulatory Approvals Required to be Obtained by the Company
or its Post-Closing Subsidiaries Prior to the Closing
Schedule 7.01(a)(ii) Hiring Restrictions
Schedule 9.02(e) Form of Release
Schedule 10.02(b) St. ▇▇▇▇ Information
Schedule 10.02(c) Shared Information
Schedule 11.01 Excluded Classes
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FORMATION AND SEPARATION AGREEMENT
THIS
FORMATION AND SEPARATION AGREEMENT (this "AGREEMENT") is made and
entered into as of _______________, 2002, by and between THE ST. ▇▇▇▇ COMPANIES,
INC., a Minnesota corporation ("ST. ▇▇▇▇"), and PLATINUM UNDERWRITERS HOLDINGS,
LTD., a Bermuda company (the "COMPANY").
Recitals
WHEREAS, St. ▇▇▇▇ has sponsored the formation of the Company;
WHEREAS, the Company intends to conduct an initial public offering
(the "PUBLIC OFFERING") of its common shares, par value $0.01 per share (the
"COMMON SHARES") and a concurrent initial public offering of its equity security
units (the "UNITS") having a stated amount of $25 per Unit (the "ESU OFFERING");
WHEREAS, contingent upon the consummation of the Public Offering, at
the times specified herein and in the Reinsurance Agreements, St. ▇▇▇▇ will make
the Cash Contribution (as defined herein) to the Company and will cause certain
of its subsidiaries to, among other things, transfer and retrocede to certain
subsidiaries of the Company assets and liabilities under the Reinsurance
Agreements and transfer the Transferred Assets to the Company and its
subsidiaries, as consideration for which the Company will issue to St. ▇▇▇▇ or
its designee pursuant to the St. ▇▇▇▇ Investment (as defined herein), (i) a
number of Common Shares equal to 15% of all Common Shares outstanding following
consummation of the Public Offering, the ESU Offering and the St. ▇▇▇▇
Investment and (ii) an option pursuant to the Option Agreement (as defined
herein) under which St. ▇▇▇▇ or its designee will have the right to purchase
additional Common Shares of the Company for the prices and in the circumstances
set forth in the Option Agreement;
WHEREAS, St. ▇▇▇▇ and the Company wish to provide herein for certain
transactions to be entered into in connection with the Public Offering, the ESU
Offering and the St. ▇▇▇▇ Investment and to set forth herein certain
arrangements that will, following the consummation of the Public Offering and
the St. ▇▇▇▇ Investment, govern the relationship between them and their
Subsidiaries; and
WHEREAS, St. ▇▇▇▇, the Company, and RenaissanceRe Holdings Ltd.
("RENAISSANCERE"), a Bermuda company, have entered into an Investment Agreement
(as defined herein), which sets forth the terms of the RenaissanceRe Investment
(as defined herein) as well as certain continuing relationships between the
Company and RenaissanceRe following the completion of the Public offering and
the ESU Offering, the St. ▇▇▇▇ Investment and the RenaissanceRe Investment.
NOW, THEREFORE, in consideration of the mutual promises, covenants and
agreements set forth herein, the sufficiency of which is acknowledged, the
parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. As used in this Agreement, the following
terms have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"ACTION" means any action, suit, arbitration, inquiry, proceeding or
investigation by or before any court, any governmental or other regulatory or
administrative agency or commission or any arbitration tribunal.
"AFFILIATE" of any Person or entity means any Person which, directly
or indirectly, controls, is under common control with, or is controlled by, such
Person.
"ANCILLARY AGREEMENTS" means the Option Agreement, the Registration
Rights Agreement, the Employee Benefits and Compensation Matters Agreement, the
Underwriting Management Agreement, the Master Services Agreement, the Sublease
Agreements, the Run-off Services Agreement, the Transitional Trademark License
Agreement, the Quota Share Retrocession Agreements, and the UK Agreements, in
each case as defined and described in more detail in Section 3.01 hereof.
"ARBITRATORS" has the meaning specified in Section 13.02(b).
"BENEFICIAL OWNER" and "BENEFICIALLY OWN" means, with respect to any
Person:
(i) securities that such Person or any of such Person's
Affiliates, directly or indirectly, has the right to vote or dispose of or
has "beneficial ownership" of (as determined pursuant to Rule 13d-3 of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT")), including without limitation pursuant to any
agreement, arrangement or understanding, whether or not in writing;
PROVIDED that a Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," (A) securities tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's Affiliates until
such tendered securities are accepted for payment, purchase or exchange,
(B) any security as a result of an oral or written agreement, arrangement
or understanding to vote such security if such agreement, arrangement or
understanding: (1) arises solely from a revocable proxy given in response
to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General Rules and
Regulations under the Exchange Act, and (2) is not also then reportable by
such Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(ii) securities that are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate thereof) with which such
Person (or any of such Person's Affiliates) has any agreement, arrangement
or understanding (whether or not in writing, but excluding customary
agreements with and between underwriters and selling group members with
respect to a bona fide public offering of securities until the expiration
of forty days after the date of such acquisition), for the purpose of
acquiring, holding, voting
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(except pursuant to a revocable proxy as described in the proviso to
subparagraph (i) above) or disposing of any Voting Securities.
"BILLS OF SALE" means the Bills of Sale and Assignment (or other
appropriate instruments of transfer, including instruments of assignment
suitable for recording at the U.S. Patent & Trademark Office, the U.S. Copyright
Office or equivalent agencies in other relevant jurisdictions where applicable),
to be executed by St. ▇▇▇▇ or its Subsidiaries, as applicable, and to be
acknowledged by the Company or its Subsidiaries, as applicable) on the Closing
Date, substantially in the form of EXHIBIT 3.04(b).
"BUSINESS" means the reinsurance business of St. ▇▇▇▇, as conducted
through its division, St. ▇▇▇▇ Re.
"BUSINESS DAY" means any day excluding Saturday, Sunday and any day on
which banks in
New York,
New York, have the option by law or other governmental
action to close.
"CASH CONTRIBUTION" has the meaning specified in Section 2.07(a).
"CLOSING" has the meaning specified in Section 3.03.
"CLOSING BALANCE SHEET" has the meaning specified in Section 4.01(b).
"CLOSING DATE" has the meaning specified in Section 3.03.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COMMISSION" means the Securities and Exchange Commission.
"COMMON SHARES" has the meaning specified in the Recitals.
"COMPANY" has the meaning specified in the preamble of this Agreement.
"COMPANY INDEMNITEE" has the meaning specified in Section 10.01(a).
"COMPANY INFORMATION" has the meaning specified in Section 10.02(a).
"COMPANY LIABILITIES" means collectively, except as otherwise provided
for in this Agreement or the Ancillary Agreements, any and all Liabilities that
arise out of any act, omission, event or condition occurring or arising on or
after the Closing Date relating to the ownership, operation or use of the
business of the Company or any of its Post-closing Subsidiaries or the
Transferred Assets by the Company or any of its Post-closing Subsidiaries. For
the avoidance of doubt, the Company Liabilities do not include any Liabilities
under the federal or any other securities laws relating to the Public Offering
but do include all Liabilities relating to the Employment Agreements
irrespective of whether occurring or arising prior to, on or after the Closing
Date and all Liabilities relating to any Renewal Obligations.
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"COMPANY REGISTRATION INDEMNITEE" has the meaning specified in Section
10.02(b).
"COMPANY SUBSIDIARY" means any Subsidiary of the Company as of the
date hereof or at any time hereafter.
"CONVERTIBLE NEW SECURITIES" has the meaning specified in Section
12.01(d)(iv).
"DILUTIVE TRANSACTION" has the meaning specified in Section 12.01(a).
"DISPUTE" has the meaning specified in Section 13.02(b)(i).
"DOJ" means the Department of Justice.
"EMPLOYEE BENEFITS AND COMPENSATION MATTERS AGREEMENT" has the meaning
specified in Section 3.01(g)(i).
"EMPLOYMENT AGREEMENTS" means, collectively, (i) the employment
agreement, dated as of March 3, 2002, between St. ▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as
amended, (ii) the agreement, dated as of March 1, 2002, between St. ▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as amended, (iii) the consulting agreement, dated as of March
1, 2002, between St. ▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, (iv) the employment agreement,
dated as of May 2, 2002, between St. ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as amended, (v)
the employment agreement, dated as of July 3, 2002, between St. ▇▇▇▇ and ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, as amended, and (vi) the employment agreement, dated as of July 5,
2002, between St. ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, as amended.
"ENCUMBRANCE" means any security interest, pledge, hypothecation,
mortgage, lien (including, without limitation, environmental and tax liens),
violation, charge, lease, license, encumbrance, servient easement, adverse
claim, reversion, reverter, preferential arrangement, restrictive covenant,
condition or restriction of any kind, including, without limitation, any
restriction on the use, voting, transfer, receipt of income or other exercise of
any attributes of ownership.
"ESU OFFERING" has the meaning specified in the Recitals.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"EXCLUDED CLASSES" are those types of reinsurance contracts previously
underwritten by St. ▇▇▇▇ Re and included in the list of classes of business set
forth in Schedule 11.01.
"FIRE AND MARINE" means St. ▇▇▇▇ Fire and Marine Insurance Company, a
Minnesota corporation and a wholly owned subsidiary of St. ▇▇▇▇.
"FIRM PUBLIC OFFERING SHARES" means the Company's Common Shares issued
in the Public Offering, other than Common Shares issued as a result of exercise
of the Over-Allotment by the underwriters of the Public Offering.
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"FIRM ST. ▇▇▇▇ SHARES" has the meaning specified in Section
2.05(a)(i).
"FIRM UNITS" means the Company's Units issued in the ESU Offering,
other than Units issued as a result of exercise of the Over-Allotment by the
underwriters of the ESU Offering.
"FOREIGN CORPORATION" means a foreign corporation within the meaning
of Section 7701(a)(3) and (5) of the Code.
"FTC" means the Federal Trade Commission.
"GOVERNMENTAL AUTHORITY" means any self-regulatory organization having
jurisdiction over the parties hereto or any of the parties to any of the
Ancillary Agreements, any United States or non-United States federal, national,
supranational, state, provincial, local or similar government, governmental,
regulatory (including, without limitation, insurance regulatory) or
administrative authority, legislative body, agency or commission or any court,
tribunal or judicial or arbitral body.
"GOVERNMENTAL ORDER" means any order, writ, judgment, injunction,
decree, stipulation, determination or award entered by or with any Governmental
Authority.
"HSR ACT" means the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended.
"INDEMNIFYING PARTY" has the meaning specified in Section 10.03.
"INDEMNITEE" has the meaning specified in Section 10.03.
"INFORMATION" has the meaning specified in Section 11.01(b).
"INSURANCE PROCEEDS" means those monies (i) received by an insured
from an insurance carrier or (ii) paid by an insurance carrier on behalf of the
insured, in either case net of any applicable premium adjustments,
retrospectively rated premium adjustments, deductibles, retentions or costs paid
by such insured.
"INVESTMENT AGREEMENT" means the Investment Agreement by and among the
Company, St. ▇▇▇▇ and RenaissanceRe, dated as of September 20, 2002, pursuant to
which RenaissanceRe will, under the terms and conditions specified therein,
purchase up to 3,960,000 Common Shares of the Company in a private placement
that will close concurrently with the Public Offering, the ESU Offering and the
St. ▇▇▇▇ Investment plus as many additional Common Shares as are required in
order for it to retain its 9.9% interest (up to a maximum of 594,000 Common
Shares) and will receive, pursuant to the RenaissanceRe Option, a ten-year
option to purchase up to an additional 2,500,000 Common Shares of the Company.
"LIABILITIES" means any and all debts, liabilities and obligations,
payments, costs and expenses, whether accrued or unaccrued, absolute or
contingent, matured or unmatured, disclosed or undisclosed, known or unknown,
liquidated or unliquidated or determined or determinable, including, without
limitation, those arising under any law and regulations
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thereunder (including, without limitation, any insurance law but excluding any
Tax law), Action or Governmental Order and those arising under any contract,
agreement, arrangement, commitment or undertaking.
"LOSSES" means any and all losses, Liabilities, claims, damages,
obligations, payments, costs and expenses, matured or unmatured, absolute or
contingent, disclosed or undisclosed, determined or determinable, accrued or
unaccrued, liquidated or unliquidated, known or unknown (including, without
limitation, the costs and expenses of any Action, threatened Action, demand,
assessment, judgment, settlement and compromise relating thereto and attorneys'
fees and any and all expenses whatsoever reasonably incurred in investigating,
preparing or defending against any such Action or threatened Action).
"MOUNTAIN RIDGE" means Mountain Ridge Insurance Company, a Vermont
insurance company.
"NEWLY HIRED EMPLOYEES" has the meaning specified in Section
3.01(g)(i).
"NEW SECURITIES" has the meaning specified in Section 12.01(a).
"OPTION AGREEMENT" has the meaning specified in Section 3.01(d).
"OPTIONAL CASH CONTRIBUTION" has the meaning specified in Section
2.07(b).
"OPTIONAL PUBLIC OFFERING SHARES" means additional Common Shares
offered upon the exercise of the Over-Allotment Option.
"OPTIONAL ST. ▇▇▇▇ SHARES" has the meaning specified in Section
2.05(a)(ii).
"OVER-ALLOTMENT OPTION" means the over-allotment option that may be
exercised by the underwriters of the Public Offering and of the ESU Offering
pursuant to the underwriting agreement relating to the Public Offering and to
the ESU Offering, as the case may be.
"PERMITTED ACQUIREE" has the meaning specified in Section 7.01(b)(ii).
"PERSON" includes an individual, a partnership, a joint venture, a
limited liability company, a corporation, a trust, an unincorporated
organization, a group and a government or other department or agency thereof.
"PLATINUM BERMUDA" means Platinum Underwriters Bermuda, Ltd., a
Bermuda insurance company and a wholly owned subsidiary of the Company.
"PLATINUM FINANCE" means Platinum Underwriters Finance, Inc., a
Delaware corporation and a wholly owned subsidiary of Platinum Regency.
"PLATINUM REGENCY" means Platinum Regency Holdings, an Irish private
unlimited company and a wholly owned subsidiary of the Company.
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"PLATINUM UK" means Platinum Re (UK) Limited, an English insurance
company and a wholly owned subsidiary of Platinum Regency.
"PLATINUM US" means Platinum Underwriters Reinsurance, Inc., a
Maryland insurance company and a wholly owned indirect subsidiary of St. ▇▇▇▇
▇▇▇▇▇ to the Closing Date, and a wholly owned subsidiary of Platinum Finance
following the Closing.
"PLATINUM US SHARES" means all the issued and outstanding shares of
common stock, par value $100 per share, of Platinum US.
"POST-CLOSING SUBSIDIARIES", with respect to either St. ▇▇▇▇ or the
Company, means collectively all of the Subsidiaries of such entity following the
Closing Date.
"PRE-CLOSING PERIODS" has the meaning specified in Section 8.01(a).
"PRE-CLOSING TAXES" has the meaning specified in Section 8.01(a).
"PRIVATE OFFERING MEMORANDUM" means the private offering memorandum
relating to the RenaissanceRe Investment.
"PROSPECTUS" means any preliminary prospectus, as amended and
supplemented from time to time, and any final prospectus filed pursuant to Rule
424(b) under the Securities Act, in each case relating to one of the
Registration Statements.
"PUBLIC OFFERING" has the meaning specified in the Recitals.
"PURCHASE CONTRACT" means the contract to purchase Common Shares
issued as part of the Units in the ESU Offering.
"PURCHASE CONTRACT AGREEMENT" means the purchase contract agreement
between the Company and JPMorgan Chase Bank, as purchase contract agent.
"QUOTA SHARE RETROCESSION AGREEMENTS" has the meaning specified in
Section 3.01(a).
"REGISTRATION INDEMNITEE" has the meaning specified in Section
10.02(b).
"REGISTRATION RIGHTS AGREEMENT" has the meaning specified in Section
3.01(f).
"REGISTRATION STATEMENTS" means the registration statements on Form
S-1, as amended and supplemented from time to time, to be filed with the
Commission under the Securities Act of 1933, as amended, relating to each of the
Public Offering and the ESU Offering.
"REGULATIONS" means the Treasury Regulations (including temporary
Regulations) promulgated by the United States Department of Treasury with
respect to the Code or other federal tax statutes.
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"REINSURANCE AGREEMENTS" means the reinsurance agreements retroceded
to one of the Company's Post-Closing Subsidiaries pursuant to the applicable
Quota Share Retrocession Agreements.
"RENAISSANCERE" has the meaning specified in the Recitals of this
Agreement.
"RENAISSANCERE INVESTMENT" means the private placement to
RenaissanceRe of Common Shares and the RenaissanceRe Option pursuant to the
Investment Agreement.
"RENAISSANCERE OPTION" means the ten-year option to purchase up to
2,500,000 Common Shares at a price per share equal to 120% of the initial public
offering price that the Company has granted to RenaissanceRe pursuant to the
Investment Agreement.
"RENEWAL OBLIGATIONS" means any obligations of St. ▇▇▇▇ and its
Subsidiaries to write or renew reinsurance treaties, contracts and agreements
incepting on or after January 1, 2002 relating to the Transferred Lines and
arising from the operation of the reinsurance business conducted by St. ▇▇▇▇ Re
prior to the Closing.
"RENEWAL RIGHTS" means all the direct and indirect rights of St. ▇▇▇▇
and its Subsidiaries to seek to renew reinsurance treaties, contracts and
agreements underwritten by St. ▇▇▇▇ Re and in force on the Closing Date relating
to the Transferred Lines, other than treaties, contracts and agreements
identified or described in SCHEDULE 2.01(g).
"REPRESENTATIVES" has the meaning specified in Section 11.01.
"RESTRICTED PERIOD" has the meaning specified in Section 7.01(a).
"RUN-OFF BUSINESS" has the meaning specified in Section 7.01(b)(i).
"RUN-OFF SERVICES" has the meaning specified in Section 3.01(c)(i).
"SECOND CLOSING" has the meaning specified in Section 3.06(a).
"SECOND CLOSING DATE" has the meaning specified in Section 3.06(a).
"SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations of the Commission promulgated thereunder.
"SHARED INFORMATION" has the meaning specified in Section 10.02(c).
"ST. ▇▇▇▇" has the meaning specified in the preamble of this
Agreement.
"ST. ▇▇▇▇ CONFIDENTIAL INFORMATION" has the meaning specified in
Section 11.03(a).
"ST. ▇▇▇▇ DESIGNEE" means an Affiliate of St. ▇▇▇▇ designated as a
party to the Option Agreement or the Registration Rights Agreement.
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"ST. ▇▇▇▇ GROUP" means any "affiliated group" (as defined in Section
1504(a) of the Code) or any other consolidated, combined, unitary or similar
group for any other Tax purpose that includes St. ▇▇▇▇.
"ST. ▇▇▇▇ INDEMNITEE" has the meaning specified in Section 10.01(b).
"ST. ▇▇▇▇ INFORMATION" has the meaning specified in Section 10.02/(b).
"ST. ▇▇▇▇ INVESTMENT" means the private placement to St. ▇▇▇▇ of
Common Shares and the St. ▇▇▇▇ Option pursuant to Section 2.05 of this
Agreement.
"ST. ▇▇▇▇ INVESTMENT OPINION" has the meaning specified in Section
9.02(d).
"ST. ▇▇▇▇ LIABILITIES" means collectively, except as otherwise
provided for in this Agreement or the Ancillary Agreements, any and all
Liabilities that arise out of any act, omission, event or condition occurring or
arising prior to the Closing Date relating to (i) the ownership, operation or
use of the business of St. ▇▇▇▇ Re or the Transferred Assets by St. ▇▇▇▇ or any
of its Subsidiaries and (ii) Platinum US. For the avoidance of doubt, the St.
▇▇▇▇ Liabilities do not include any Liabilities under the federal or any other
securities laws relating to the Public Offering or any Renewal Obligations. For
the further avoidance of doubt, St. ▇▇▇▇ Liabilities do not include Liabilities
arising out of any act or omission occurring or arising prior to the Closing
Date of any of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇ taken in furtherance of the organization of
Platinum Holdings or its Subsidiaries, the Public Offering, this Agreement, the
Registration Statements, the Ancillary Agreements or the transactions related
thereto but otherwise DO include Liabilities arising out of any act or omission
occurring or arising prior to the Closing Date of any of such individuals in
their capacities as officers of St. ▇▇▇▇ Re.
"ST. ▇▇▇▇ LICENSOR" has the meaning specified in Section 3.01(e).
"ST. ▇▇▇▇ OPTION" means the option to be granted to St. ▇▇▇▇ pursuant
to the Option Agreement.
"ST. ▇▇▇▇ PRE-CLOSING SUBSIDIARIES" has the meaning specified in
Article V.
"ST. ▇▇▇▇ RE" means the reinsurance operations of St. ▇▇▇▇ reported in
the Reinsurance segment of St. ▇▇▇▇, as reflected in its 2001 Annual Report on
Form 10-K.
"ST. ▇▇▇▇ RE (UK)" means St. ▇▇▇▇ Reinsurance Company Limited, a U.K.
insurance company and a wholly owned subsidiary of St. ▇▇▇▇.
"ST. ▇▇▇▇ REGISTRATION INDEMNITEE" has the meaning specified in
Section 10.02(a).
"ST. ▇▇▇▇ SHARES" means the Firm St. ▇▇▇▇ Shares, the Optional St.
▇▇▇▇ Shares and any Common Shares issuable to St. ▇▇▇▇ pursuant to Section 2.05
of this Agreement collectively.
"STRADDLE PERIODS" has the meaning specified in Section 8.01(a).
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"SUBLEASE AGREEMENTS" means the sublease agreements and assignments of
leases between Affiliates of St. ▇▇▇▇ and Affiliates of the Company;
substantially in the forms attached to this Agreement as EXHIBITS
3.01(i)(i)-(v).
"SUBSIDIARY" means, as to any Person, (i) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any other Person in which such Person
and/or one or more Subsidiaries of such Person has more than a 50% equity
interest at the time.
"TAX" means all federal, state, local and foreign income, profits,
franchise, gross receipts, premium, environmental, customs duty, capital stock,
severances, stamp, payroll, sales, employment, unemployment, disability, use,
property, withholding, excise, production, value added, occupancy and other
taxes, duties or assessments of any nature whatsoever, together with all
interest, penalties and additions imposed with respect to such amounts and any
interest in respect of such penalties and additions.
"TAX PROCEEDING" has the meaning specified in Section 8.03(a).
"TAX RETURNS" means all returns, reports or similar statements
(including any related exhibits and schedules) required to be filed with respect
to any Taxes, including any information return, claim or refund, amended return
or declaration of estimated tax.
"THIRD PARTY CLAIM" has the meaning specified in Section 10.04(a).
"TRANSFERRED ASSETS" has the meaning specified in Section 2.01.
"TRANSFERRED BUSINESS" means the Reinsurance Agreements and the
Transferred Assets, collectively.
"TRANSFERRED BUSINESS CONFIDENTIAL INFORMATION" means the information
set forth in Section 2.01(i), Section 2.01(j) and Section 2.02. For the
avoidance of doubt, Transferred Business Confidential Information does not
include any information relating to Excluded Classes to made available to the
Company pursuant to Section 11.01.
"TRANSFERRED LINES" are those types of reinsurance contracts
underwritten by St. ▇▇▇▇ Re and included in the list of classes of business set
forth in Schedule 1.01(a).
"UK AGREEMENTS" means the UK Business Transfer Agreement, the UK
Master Services Agreement, the UK Run-off Services Agreement, the UK
Underwriting Agency and Underwriting Management Agreement and the UK Quota Share
Retrocession Agreements.
"UK BUSINESS TRANSFER AGREEMENT" has the meaning specified in Section
3.01(j).
"UK MASTER SERVICES AGREEMENT" has the meaning specified in Section
3.01(b)(ii).
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"UK QUOTA SHARE RETROCESSION AGREEMENTS" means the quota share
retrocession agreements referred to in Sections 3.01(a)(xiii) through (xv).
"UK RUN-OFF SERVICES AGREEMENT" has the meaning specified in Section
3.01(c)(ii).
"UK UNDERWRITING AGENCY AND UNDERWRITING MANAGEMENT AGREEMENT" has the
meaning specified in Section 3.01(k).
"UNDERWRITING AGREEMENT" means the underwriting agreement among St.
▇▇▇▇, the Company and ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Co. and the other underwriters named
therein relating to the Public Offering.
"UNITS" has the meaning specified in the Recitals.
"USF&G" has the meaning specified in Section 5.04(b).
"VOTING SECURITIES" means the Common Shares and all other securities
of the Company of any kind or class having power generally to elect a majority
of the Company's directors (irrespective of whether or not at the time stock of
any class or classes of the Company shall have or might have voting power by
reason of the happening of any contingency).
"WHOLLY OWNED POST-CLOSING SUBSIDIARIES", with respect to either St.
▇▇▇▇ or the Company, means collectively all of the Wholly Owned Subsidiaries of
such entity following the Closing Date.
"WHOLLY OWNED SUBSIDIARY" means, as to any Person, (i) any corporation
100% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Wholly Owned Subsidiaries of such person and (ii) any other Person in which
such person and/or one or more Wholly Owned Subsidiaries of such Person has a
100% equity interest at the time.
SECTION 1.02 OTHER DEFINITIONAL PROVISIONS. The words "hereof",
"hereto", "herein" and "hereunder" and words of similar import when used in this
Agreement refer to this Agreement as a whole and not to any particular provision
of this Agreement; and references to any Article, Section, Exhibit or Schedule
are references to Articles, Sections, Exhibits or Schedules in or to this
Agreement unless otherwise specified.
ARTICLE II
CONTRIBUTION OF ASSETS; ST. ▇▇▇▇ INVESTMENT
SECTION 2.01 TRANSFER OF ASSETS. Effective as of the Closing Date, and
immediately after the delivery of the Firm Public Offering Shares against
payment therefor, St. ▇▇▇▇ shall, and (as necessary) shall cause its
Subsidiaries to, sell, assign, transfer, convey and deliver to the Company or
its designees, which shall acquire at the Closing from St. ▇▇▇▇ or its
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Subsidiaries, as the case may be, the following assets and properties together
with any related Company Liabilities (such assets and Company Liabilities are
collectively referred to as the "TRANSFERRED ASSETS"):
(a) the Platinum US Shares;
(b) the furniture, fixtures, computers, equipment, machinery and
other tangible personal property, and all contracts and agreements relating
thereto listed on SCHEDULE 2.01(b);
(c) the licensed rights to the intellectual property listed on
SCHEDULE 2.01(c), which includes intellectual property used in the offices
subject to the subleases and assignments of leases listed in Section 3.01(i) as
well as on the premises leased by St. ▇▇▇▇ in Tokyo and in London (it being
understood that certain rights may not be transferred without the consent of a
third party, and that while St. ▇▇▇▇ and its relevant Subsidiaries will use
commercially reasonable efforts to obtain such consents, they shall not have any
liability to the Company or any Subsidiary of the Company to the extent any such
consent is not obtained by the Closing Date and, for greater certainty, none of
St. ▇▇▇▇ nor any Subsidiary of St. ▇▇▇▇ shall be required to make any payment to
a third party to procure the transfer of rights to any intellectual property);
(d) the Employment Agreements, as follows:
(i) the employment agreement, dated as of March 3, 2002,
between St. ▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as amended, shall be assigned to the
Company;
(ii) the agreement, dated as of March 1, 2002, between St.
▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as amended, shall be assigned to the Company;
(iii) the consulting agreement, dated as of March 1, 2002,
between St. ▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ shall be assigned to Platinum US;
(iv) the employment agreement, dated as of May 2, 2002,
between St. ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, as amended, shall be assigned to
Platinum US;
(v) the employment agreement, dated as of July 3, 2002,
between St. ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, as amended, shall be assigned to
the Company; and
(vi) the employment agreement, dated as of July 5, 2002,
between St. ▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, as amended, shall be assigned
to the Company.
(e) the rights to occupy the premises that are the subject of the
Sublease Agreements as specified by such Sublease Agreements;
(f) the Newly Hired Employees and the U.K. Newly Hired Employees;
(g) the Renewal Rights other than as set forth on SCHEDULE 2.01(g);
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(h) the licensed rights to certain intellectual property provided
pursuant to the Transitional Trademark License Agreements;
(i) Information in respect of the Transferred Assets set forth in
Section 2.01(a) through (h) set forth in SCHEDULE 2.01(i); and
(j) Information in respect of Reinsurance Agreements set forth in
SCHEDULE 2.01(j).
The Transferred Assets (i) include any and all Business Assets as
defined in the UK Business Transfer Agreement, but (ii) exclude any and all
assets and properties of St. ▇▇▇▇ or any of its Affiliates other than the assets
specifically identified above.
SECTION 2.02 RENEWAL RIGHTS INFORMATION. Effective as of the Closing
Date, and promptly after the delivery of the Firm Public Offering Shares against
payment therefor, St. ▇▇▇▇ shall cause to be delivered to the Company or its
Subsidiaries the information in respect of Renewal Rights set forth in Schedule
2.02.
SECTION 2.03 JOINT OWNERSHIP. The parties agree that they shall be
joint owners of the information and records referenced in Section 2.01(i) and
(j), whether they have originals or copies of the various components thereof.
SECTION 2.04 ASSUMPTION AND RETENTION OF LIABILITIES. Effective as of
the Closing Date, the Company or one of its Post-Closing Subsidiaries shall
assume and pay, perform and discharge (when due and payable) the Company
Liabilities, and St. ▇▇▇▇ shall retain and, pay, perform and discharge (when due
and payable) the St. ▇▇▇▇ Liabilities.
SECTION 2.05 ST. ▇▇▇▇ INVESTMENT. (a) Subject to clause (b) of this
Section 2.05, the Company hereby agrees that, contingent upon the consummation
of the Public Offering, it shall sell, transfer, convey and deliver to St. ▇▇▇▇
or its designee and St. ▇▇▇▇ agrees that it shall purchase from the Company in a
transaction exempt from the registration requirements of the Securities Act:
(i) at the time of the delivery of the Firm Public Offering
Shares, 6,000,000 Common Shares (the "FIRM ST. ▇▇▇▇ SHARES"), the St. ▇▇▇▇
Option and the right to receive the Optional St. ▇▇▇▇ Shares in the
circumstances described in Section 2.05(a)(ii), in exchange for the
transfer of the Transferred Assets by St. ▇▇▇▇ pursuant to Section 2.01 and
the payment of the Cash Contribution by St. ▇▇▇▇ pursuant to Section
2.07(a), and the various agreements and undertakings of St. ▇▇▇▇ herein and
the entering into the Ancillary Agreements by St. ▇▇▇▇ and its
Subsidiaries; and
(ii) in the event of any exercise of the Over-Allotment Option
by the underwriters in the underwriters' discretion in whole or in part, at
the time of delivery of the Optional Public Offering Shares, a number of
Common Shares (the "OPTIONAL ST. ▇▇▇▇ SHARES"), to be determined in St.
Paul's discretion and notice thereof to be provided to the Company by St.
▇▇▇▇ a reasonable time prior to the Second Closing of the sale of the
Optional Public Offering Shares, such Optional St. ▇▇▇▇ Shares not to
exceed the lesser of (I) the number of Common Shares required for St. ▇▇▇▇
to retain a 15% ownership
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interest in the Company and (II) 900,000 Common Shares if the
Over-Allotment Option is exercised in full, in exchange for the payment of
the Optional Cash Contribution pursuant to Section 2.07(b),
such that in case (i) above, and in case (ii) above if St. ▇▇▇▇ exercises in
full its right to purchase Optional St. ▇▇▇▇ Shares, upon consummation of the
Public Offering, the ESU Offering, the St. ▇▇▇▇ Investment and the RenaissanceRe
Investment, St. ▇▇▇▇ will have beneficial ownership of 15% of all Common Shares
outstanding, the precise number of shares to be issued to St. ▇▇▇▇ to be rounded
down to the nearest round lot number of shares.
(b) In the event the Company and the underwriters agree to alter the
number of Firm Public Offering Shares and Optional Public Offering Shares after
the date hereof, the number of Firm St. ▇▇▇▇ Shares and Optional St. ▇▇▇▇ Shares
will be proportionately adjusted.
SECTION 2.06 THIRD PARTY CONSENTS. (a) St. ▇▇▇▇ shall use commercially
reasonable efforts to obtain prior to the Closing Date any consent, approval or
authorization necessary for the transfer of the Transferred Assets to the
Company as contemplated by this Agreement.
(b) If St. ▇▇▇▇ has not obtained any consent, approval or
authorization necessary for the transfer of any of the Transferred Assets as
contemplated by this Agreement prior to the Closing Date, St. ▇▇▇▇, for a period
of up to 12 months subsequent to the Closing Date, shall reasonably cooperate
with the Company in attempting to obtain such consents, approvals or
authorizations as promptly thereafter as practicable, PROVIDED that the Company
shall promptly reimburse St. ▇▇▇▇ for any reasonable legal and other expenses
incurred in connection with such cooperation as such expenses are incurred.
(c) St. ▇▇▇▇ ▇▇▇ not exercise any of its rights under any of the
Transferred Assets with respect to which such consent, approval or authorization
to the transfer thereof has not been obtained by the Closing Date except at the
direction of or on behalf of the Company or its Post-Closing Subsidiaries, and
the Company and its Post-Closing Subsidiaries shall be responsible for any
Company Liabilities in respect of such Transferred Assets after the Closing Date
PROVIDED that St. ▇▇▇▇ shall not be required to take any action directed by the
Company under any agreement relating to a Transferred Asset that would cause a
breach of such Agreement and St. ▇▇▇▇ or a St. ▇▇▇▇ ▇▇▇▇-Closing Subsidiary
reasonably believes that it retains liability for such breach.
SECTION 2.07 (a) CASH CONTRIBUTION. At the Closing, St. ▇▇▇▇ shall pay
to the Company the amount in cash (the "CASH CONTRIBUTION") specified as the
Cash Contribution in the final Prospectus to be filed by the Company with the
Commission pursuant to Rule 424(b) under the Securities Act in connection with
the Public Offering. St. ▇▇▇▇ shall make such Cash Contribution to the Company
in U.S. dollars, in immediately available funds, payable by wire transfer to a
bank account outside the United States of America notified by the Company to St.
▇▇▇▇ two Business Days prior to the Closing Date.
(b) Upon delivery of the Optional St. ▇▇▇▇ Shares, St. ▇▇▇▇ shall pay
to the Company the amount in cash (the "OPTIONAL CASH CONTRIBUTION") equal to
the product of (i) the
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Cash Contribution and (ii) a fraction, the numerator of which is the number of
Optional St. ▇▇▇▇ Shares and the denominator of which is the number of Firm St.
▇▇▇▇ Shares. St. ▇▇▇▇ shall make such Optional Cash Contribution to the Company
in U.S. dollars, in immediately available funds, payable by wire transfer to a
bank account outside the United States of America notified by the Company to St.
▇▇▇▇ two Business Days prior to the date of delivery of the Optional St. ▇▇▇▇
Shares.
ARTICLE III
INTERCOMPANY TRANSACTIONS AS OF THE CLOSING DATE; CLOSING
SECTION 3.01 ANCILLARY AGREEMENTS. The parties hereto agree to enter
into, and (as necessary) shall cause their respective Subsidiaries to enter
into, the Ancillary Agreements, in each case (unless otherwise specified in this
Article III) effective as of the Closing Date contingent upon and immediately
after the time of the completion of the Public Offering and the ESU Offering as
follows:
(a) the following retrocession agreements (collectively, the "QUOTA
SHARE RETROCESSION AGREEMENTS"), all of which shall go into effect as of the
later of 12:01 A.M., local time, on the Business Day immediately following the
Closing Date or October 1, 2002:
(i) a Quota Share Retrocession Agreement between Fire and
Marine and Platinum US, substantially in the form of EXHIBIT 3.01(a)(i),
pursuant to which Platinum US will reinsure 100% of the liabilities of Fire
and Marine under the traditional reinsurance contracts entered into by Fire
and Marine incepting on or after January 1, 2002 and the Closing Date as
specified in an exhibit thereto, and the traditional reinsurance contracts
bound pursuant to the Underwriting Management Agreement;
(ii) a Quota Share Retrocession Agreement between Fire and
Marine and Platinum US, substantially in the form of EXHIBIT 3.01(a)(ii),
pursuant to which Platinum US will reinsure 100% of the liabilities of Fire
and Marine under the non-traditional (Form A) reinsurance contracts
incepting on or after January 1, 2002 and the Closing Date as specified in
an exhibit thereto, and the non-traditional reinsurance contracts bound
pursuant to the Underwriting Management Agreement;
(iii) a Quota Share Retrocession Agreement between Fire and
Marine and Platinum US, substantially in the form of EXHIBIT 3.01(a)(iii),
pursuant to which Platinum US will reinsure 100% of the liabilities of Fire
and Marine under the non-traditional (Form B-1) reinsurance contracts
incepting on or after January 1, 2002 and the Closing Date as specified in
an exhibit thereto, and the non-traditional reinsurance contracts bound
pursuant to the Underwriting Management Agreement;
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(iv) a Quota Share Retrocession Agreement between Fire and
Marine and Platinum US, substantially in the form of EXHIBIT 3.01(a)(iv),
pursuant to which Platinum US will reinsure 100% of the liabilities of Fire
and Marine under the non-traditional (Form B-2) reinsurance contracts
incepting on or after January 1, 2002 and the Closing Date as specified in
an exhibit thereto, and the non-traditional reinsurance contracts bound
pursuant to the Underwriting Management Agreement;
(v) a Quota Share Retrocession Agreement between Fire and
Marine and Platinum US, substantially in the form of EXHIBIT 3.01(a)(v),
pursuant to which Platinum US will reinsure 100% of the liabilities of Fire
and Marine under the non-traditional (Form C) reinsurance contracts
incepting on or after January 1, 2002 and the Closing Date as specified in
an exhibit thereto, and the non-traditional reinsurance contracts bound
pursuant to the Underwriting Management Agreement;
(vi) a Quota Share Retrocession Agreement between Mountain
Ridge and Platinum US, substantially in the form of EXHIBIT 3.01(a)(vi),
pursuant to which Platinum US will reinsure 100% of the liabilities of Fire
and Marine under the non-traditional (Form D-1) reinsurance contracts
incepting on or after January 1, 2002 and the Closing Date as specified in
an exhibit thereto, and the non-traditional reinsurance contracts bound
pursuant to the Underwriting Management Agreement;
(vii) a Quota Share Retrocession Agreement between Mountain
Ridge and Platinum US, substantially in the form of EXHIBIT 3.01(a)(vii),
pursuant to which Platinum US will reinsure 100% of the liabilities of Fire
and Marine under the non-traditional (Form D-2) reinsurance contracts
incepting on or after January 1, 2002 and the Closing Date as specified in
an exhibit thereto, and the non-traditional reinsurance contracts bound
pursuant to the Underwriting Management Agreement;
(viii) a Quota Share Retrocession Agreement between Fire and
Marine and Platinum US, substantially in the form of EXHIBIT 3.01(a)(viii),
pursuant to which Platinum US will reinsure 100% of the liabilities of Fire
and Marine under the non-traditional (Form D-3) reinsurance contracts
incepting on or after January 1, 2002 and the Closing Date as specified in
an exhibit thereto, and the non-traditional reinsurance contracts bound
pursuant to the Underwriting Management Agreement;
(ix) a Quota Share Retrocession Agreement between Fire and
Marine and Platinum US, substantially in the form of EXHIBIT 3.01(a)(ix),
pursuant to which Platinum US will reinsure 100% of the liabilities of Fire
and Marine under the non-traditional (Form D-4) reinsurance contracts
incepting on or after January 1, 2002 and the Closing Date as specified in
an exhibit thereto, and the non-traditional reinsurance contracts bound
pursuant to the Underwriting Management Agreement;
(x) a Quota Share Retrocession Agreement between Mountain
Ridge and Platinum US, substantially in the form of EXHIBIT 3.01(a)(x),
pursuant to which Platinum US will reinsure 100% of the liabilities of Fire
and Marine under the non-traditional (Form D-Stop Loss) reinsurance
contracts incepting on or after January 1, 2002
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and the Closing Date as specified in an exhibit thereto, and the
non-traditional reinsurance contracts bound pursuant to the Underwriting
Management Agreement;
(xi) a Quota Share Retrocession Agreement between Fire and
Marine and Platinum US, substantially in the form of EXHIBIT 3.01(a)(xi),
pursuant to which Platinum US will reinsure 100% of the liabilities of Fire
and Marine under the non-traditional (Form D-Spread Loss) reinsurance
contracts incepting on or after January 1, 2002 and the Closing Date as
specified in an exhibit thereto, and the non-traditional reinsurance
contracts bound pursuant to the Underwriting Management Agreement;
(xii) a Quota Share Retrocession Agreement between Fire and
Marine and Platinum US, substantially in the form of EXHIBIT 3.01(a)(xii),
pursuant to which Platinum US will reinsure 100% of the liabilities of Fire
and Marine under the non-traditional (Form E) reinsurance contracts
incepting on or after January 1, 2002 and the Closing Date as specified in
an exhibit thereto, and the non-traditional reinsurance contracts bound
pursuant to the Underwriting Management Agreement;
(xiii) a UK Quota Share Retrocession Agreement between St. ▇▇▇▇
Re UK and Platinum US, substantially in the form of EXHIBIT 3.01(a)(xiii),
pursuant to which Platinum US will reinsure 100% of the liabilities of St.
▇▇▇▇ Re UK under the traditional reinsurance contracts written by St. ▇▇▇▇
Re UK incepting on or after January 1, 2002, as specified therein;
(xiv) a UK Quota Share Retrocession Agreement between St. ▇▇▇▇
Re UK and Platinum US, substantially in the form of EXHIBIT 3.01(a)(xiv),
pursuant to which Platinum US will reinsure 100% of the liabilities of St.
▇▇▇▇ Re UK under the non-traditional (Form A) reinsurance contracts written
by St. ▇▇▇▇ Re UK incepting on or after January 1, 2002, as specified
therein;
(xv) a UK Quota Share Retrocession Agreement between St. ▇▇▇▇
Re UK and Platinum US, substantially in the form of EXHIBIT 3.01(a)(xv),
pursuant to which Platinum US will reinsure 100% of the liabilities of St.
▇▇▇▇ Re UK under the non-traditional (Form B-1) reinsurance contracts
written by St. ▇▇▇▇ Re UK incepting on or after January 1, 2002, as
specified therein; and
(xvi) a UK Quota Share Retrocession Agreement between St. ▇▇▇▇
Re UK and Platinum UK, substantially in the form of EXHIBIT 3.01(a)(xvi),
pursuant to which Platinum UK will reinsure 100% of the liabilities of St.
▇▇▇▇ Re UK under the reinsurance contracts written by St. ▇▇▇▇ Re UK
incepting on or after the day following receipt by Platinum UK of
permission from the Financial Services Authority under Part IV of the
Financial Services and Markets ▇▇▇ ▇▇▇▇, as specified therein.
(b) (i) a Master Services Agreement substantially in the form of
EXHIBIT 3.01(b)(i) between St. ▇▇▇▇ and the Company pursuant to which St. ▇▇▇▇
and/or its Post-Closing Subsidiaries other than St. ▇▇▇▇ Re UK will provide the
Company and its Subsidiaries other than Platinum UK the Transition Services (as
defined in the Master Services Agreement), including, without limitation,
payroll administration, human
-17-
resources management and electronic systems support, in each case as specified
in the applicable service schedule to the Master Services Agreement, for a
specified period of time;
(ii) a UK Master Services Agreement substantially in the form
of EXHIBIT 3.01(b)(ii) between St. ▇▇▇▇ Re UK and Platinum UK pursuant to
which St. ▇▇▇▇ Re UK will provide Platinum UK with the Transitional
Services (as defined in the UK Master Services Agreement), including,
without limitation, payroll administration and electronic systems support,
in each case as specified in the service schedule to the UK Master Services
Agreement, for a specified period of time;
(c) (i) a Run-off Services Agreement substantially in the form of
EXHIBIT 3.01(c)(i), between Fire and Marine and Platinum US pursuant to
which the Company and/or its Post-Closing Subsidiaries other than Platinum
UK will provide certain services (the "RUN-OFF SERVICES") to St. ▇▇▇▇
and/or its Post-Closing Subsidiaries other than St. ▇▇▇▇ Re UK for a
specified period of time;
(ii) a UK Run-off Services Agreement substantially in the form
of Exhibit 3.01(c)(ii), between St. ▇▇▇▇ Re UK and Platinum UK pursuant to
which Platinum UK will provide Run-off Services to St. ▇▇▇▇ Re UK for a
specified period of time;
(d) an Option Agreement, substantially in the form of EXHIBIT
3.01(d), between St. ▇▇▇▇ or a St. ▇▇▇▇ Designee and the Company, pursuant to
which St. ▇▇▇▇ or such St. ▇▇▇▇ Designee will, under the terms and conditions
specified therein, have the right to purchase up to 6,000,000 additional Common
Shares of the Company;
(e) one or more Transitional Trademark License Agreements,
substantially in the form of EXHIBIT 3.01(e), between St. ▇▇▇▇ and its relevant
Subsidiaries (the "ST. ▇▇▇▇ LICENSORS") and the Company and its Post-Closing
Subsidiaries pursuant to which the St. ▇▇▇▇ Licensors will grant to the Company
and/or its Post-Closing Subsidiaries licenses to use service marks, trademarks
and other intellectual property rights specified in such agreement for a
specified period of time;
(f) a Registration Rights Agreement, substantially in the form of
EXHIBIT 3.01(f), between St. ▇▇▇▇ or a St. ▇▇▇▇ Designee and the Company with
respect to all Common Shares of the Company held by or optioned to St. ▇▇▇▇ or
such St. ▇▇▇▇ Designee as of the Closing Date;
(g) an Employee Benefits and Compensation Matters Agreement (which
shall go into effect on the Business Day immediately following the Closing
Date), substantially in the form of EXHIBIT 3.01(g)(i), between St. ▇▇▇▇ and
Platinum US to allocate assets, liabilities and responsibilities relating to the
hiring of certain employees of St. ▇▇▇▇ and its Subsidiaries other than St. ▇▇▇▇
Re UK by the Company and its Post-Closing Subsidiaries other than Platinum UK
(the "NEWLY HIRED EMPLOYEES") and the continued participation by the Newly Hired
Employees in the benefit plans, that St. ▇▇▇▇ currently sponsors and maintains;
-18-
(h) an Underwriting Management Agreement, substantially in the form
of EXHIBIT 3.01(h)(i) pursuant to which the Company or one of its Post-Closing
Subsidiaries will provide to Fire and Marine certain underwriting services, as
specified in the Underwriting Management Agreement; and
(i) the following sublease agreements or assignments of lease
(collectively, the "SUBLEASE AGREEMENTS"):
(i) an Assignment and Assumption Agreement (Miami),
substantially in the form of EXHIBIT 3.01(i)(i), among Metropolitan Life
Insurance Company, St. ▇▇▇▇ Re and Platinum US;
(ii) an Assignment and Assumption Agreement (Chicago),
substantially in the form of EXHIBIT 3.01(i)(ii), among WHCHC Real Estate
Limited Partnership, St. ▇▇▇▇ Re and Platinum US;
(iii) a Sublease Agreement (
New York), substantially in the
form of EXHIBIT 3.01(i)(iii), between St. ▇▇▇▇ Reinsurance Management
Corporation and Platinum US;
(iv) an Assignment and Assumption Agreement (Tokyo),
substantially in the form of EXHIBIT 3.01(i)(iv), among Taisei Fire &
Marine Insurance Co., St. ▇▇▇▇ Re and Platinum US; and
(v) a License Agreement (Lime Street, London), substantially
in the form of EXHIBIT 3.01(i)(v), between St. ▇▇▇▇ Re UK and Platinum UK.
(j) a U.K. Business Transfer Agreement, substantially in the form of
EXHIBIT 3.01(j), among St. ▇▇▇▇ Re UK, Platinum UK and St ▇▇▇▇ Management
Limited, pursuant to which St. ▇▇▇▇ Re UK will transfer the assets specified
therein to Platinum UK.
(k) a U.K. Underwriting Agency and Underwriting Management Agreement,
substantially in the form of EXHIBIT 3.01(k), between St. ▇▇▇▇ Re UK and
Platinum UK, pursuant to which Platinum UK will act as the underwriting agent
for St. ▇▇▇▇ Re UK in the U.K. until the first anniversary of the completion of
the Public Offering, and pursuant to which Platinum UK will provide certain
underwriting services to St. ▇▇▇▇ Re UK.
SECTION 3.02 PAYMENT OF EXPENSES. (a) The Company shall pay (or, to
the extent incurred by and paid for by St. ▇▇▇▇ or any Affiliate thereof prior
to the Closing Date, shall, on the Closing Date, and, if incurred on or
following the Closing Date, promptly reimburse St. ▇▇▇▇ and any such Affiliate
for any and all amounts so paid) the costs, fees, disbursements and expenses set
forth in SCHEDULE 3.02(a).
(b) St. ▇▇▇▇ shall pay (or, to the extent incurred by and paid for by
the Company or any of its Post-Closing Subsidiaries on or prior to the Closing
Date shall, on the Closing Date, and, if incurred following the Closing Date,
promptly reimburse the Company and any such Post-Closing Subsidiary for any and
all amounts so paid) the costs, fees, disbursements and expenses set forth in
SCHEDULE 3.02(b).
-19-
SECTION 3.03 CLOSING. Subject to the terms and conditions of this
Agreement, all transactions contemplated by this Agreement shall be consummated
at a closing (the "CLOSING") to be held at the offices of ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ at 9:00 A.M.,
New York time, on the date of
the delivery of the Firm Public Offering Shares or at such other place (outside
the United Kingdom) or at such other time or on such other date as St. ▇▇▇▇ and
the Company may mutually agree upon in writing (the day on which the Closing
takes place being the "CLOSING DATE"); PROVIDED, HOWEVER, that except for the
Quota Share Retrocession Agreements and the Employee Benefits and Compensation
Matters Agreement, the Ancillary Agreements shall become effective immediately
after delivery of the Firm Public Offering Shares and Firm St. ▇▇▇▇ Shares and
the Quota Share Retrocession Agreements and the Employee Benefits and
Compensation Matters Agreement shall become effective at 12:01 A.M. on the
Business Day immediately following the Closing Date or, if later, on October 1,
2002.
SECTION 3.04 CLOSING DELIVERIES BY ST. ▇▇▇▇. At the Closing, St. ▇▇▇▇
shall deliver and shall cause its Post-Closing Subsidiaries to deliver to the
Company:
(a) executed copies of all Ancillary Agreements;
(b) executed copies of the Bills of Sale substantially in the form of
EXHIBIT 3.04(b) and such other instruments, in form and substance reasonably
satisfactory to the Company, as may be reasonably requested by the Company to
transfer, convey and assign the Transferred Assets (including, without
limitation, the Platinum US Shares and the Employment Agreements) to the Company
or its designee or evidence of such transfer on the public records;
(c) a certificate representing all of the Platinum US Shares, duly
endorsed or accompanied by stock powers (in form reasonably satisfactory to the
Company) in favor of Platinum Regency; and
(d) the certificate specified in Section 9.03(c);
(e) evidence reasonably satisfactory to the Company that all consents
and approvals as set forth on SCHEDULE 6.02(b) have been obtained and are in
full force and effect;
(f) the balance sheet of Platinum US dated May 31, 2002, which shall
have been prepared in accordance with accounting practices prescribed or
permitted for insurance companies by the Maryland insurance regulatory
authorities, which have been applied consistent with the financial statements of
past periods and shall in all material respects fairly present the financial
condition of Platinum US as of its date;
(g) a statement setting forth the amounts remitted to and from
Platinum US pursuant to Section 4.01(a); and
(h) the Cash Contribution.
SECTION 3.05 CLOSING DELIVERIES BY THE COMPANY. At the Closing, the
Company shall deliver to St. ▇▇▇▇:
-20-
(a) executed copies of all Ancillary Agreements;
(b) certificates representing the St. ▇▇▇▇ Shares acquired by St.
▇▇▇▇ or a St. ▇▇▇▇ Designee, registered in the name of St. ▇▇▇▇ or the
appropriate St. ▇▇▇▇ Designees;
(c) the St. ▇▇▇▇ Investment Opinion;
(d) evidence reasonably satisfactory to St. ▇▇▇▇ that all consents
and approvals as set forth in SCHEDULE 6.02(b) have been obtained and are in
full force and effect;
(e) the certificate specified in Section 9.02(c); and
(f) a receipt evidencing receipt of the Cash Contribution.
SECTION 3.06 SUBSEQUENT EXERCISE OF OVER-ALLOTMENT OPTION. (a) If the
Underwriters exercise their Over-Allotment Option at any time after the Closing
Date, a second closing (the "SECOND CLOSING") will be held at the offices of
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, at 9:00 A.M.,
New
York time, on the date of the delivery of the Optional Public Offering Shares or
at such other place (outside the United Kingdom) or such other time or on such
other date as St. ▇▇▇▇ and the Company may agree upon in writing (the day on
which the Second Closing takes place being the "SECOND CLOSING DATE").
(b) On the Second Closing Date, the Company shall deliver to St. ▇▇▇▇
(i) a certificate representing the Optional St. ▇▇▇▇ Shares acquired by St. ▇▇▇▇
or one or more St. ▇▇▇▇ Designees, registered in the name of St. ▇▇▇▇ or the
appropriate St. ▇▇▇▇ Designees, (ii) an opinion with respect to the Optional St.
▇▇▇▇ Shares in form and substance identical to the St. ▇▇▇▇ Investment Opinion
and (iii) a bring-down certificate in form and substance identical to the
certificate specified in Section 9.02(c).
(c) On the Second Closing Date, St. ▇▇▇▇ shall deliver to the Company
(i) a bring-down certificate in form and substance identical to the certificate
specified in Section 9.03(c) and (ii) Optional Cash Contribution.
ARTICLE IV
SEPARATION
SECTION 4.01 SETTLEMENT OF INTERCOMPANY ACCOUNTS. (a) Shortly prior to
the Closing Date, Platinum US shall remit to St. ▇▇▇▇ and any Post-Closing
Subsidiaries of St. ▇▇▇▇, as applicable, all amounts estimated to be owing as of
the Closing Date by Platinum US to St. ▇▇▇▇ or such Post-Closing Subsidiaries,
and St. ▇▇▇▇ and all Post-Closing Subsidiaries of St. ▇▇▇▇, as applicable, shall
remit to Platinum US all amounts estimated to be owing as of the Closing Date by
St. ▇▇▇▇ or such Post-Closing Subsidiaries of St. ▇▇▇▇ to Platinum US.
(b) As soon as reasonably practicable, but in no event later than 45
days following the Closing Date, St. ▇▇▇▇ covenants that it shall prepare and
deliver to the Company a balance sheet as of the Closing Date (the "CLOSING
BALANCE SHEET"). The Closing Balance Sheet shall be prepared in accordance with
accounting practices prescribed or permitted for insurance
-21-
companies by the Maryland insurance regulatory authorities, which have been
applied consistent with the financial statements of past periods, including the
May 31, 2002 balance sheet delivered pursuant to Section 3.04(f) and shall in
all material respects fairly present the financial condition of Platinum US as
of its date.
SECTION 4.02 REMOVAL OF PLATINUM US FROM INTERCOMPANY AGREEMENTS AND
REPRESENTATION. Except as contemplated herein, effective as of the Closing Date,
all agreements between or among St. ▇▇▇▇ and its Post-Closing Subsidiaries, on
the one hand, and Platinum US, on the other hand, shall terminate as to Platinum
US, and Platinum US shall cease being a party to any of the agreements specified
on SCHEDULE 4.02. After the Closing Date, Platinum US shall not have any
liability under any such agreement to St. ▇▇▇▇ or any Post-Closing Subsidiary of
St. ▇▇▇▇ and neither St. ▇▇▇▇ nor any Post-Closing Subsidiary of St. ▇▇▇▇ shall
have any liability under any such agreement to Platinum US. St. ▇▇▇▇ represents
that such agreements are the only agreements that it or any St. ▇▇▇▇ Subsidiary
has with Platinum US.
SECTION 4.03 DISCONTINUING OF INSURANCE COVERAGE. Effective as of the
Closing Date, Platinum US will cease to be covered under any insurance policy
covering St. ▇▇▇▇ and any of its affiliates, including directors' & officers'
and errors & omissions insurance.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF ST. ▇▇▇▇
St. ▇▇▇▇ represents and warrants to the Company, as to itself, each of
Fire and Marine, Platinum US, Mountain Ridge, St. ▇▇▇▇ Re (UK), each St. ▇▇▇▇
Designee and each St. ▇▇▇▇ Licensor (such subsidiaries, the "ST. ▇▇▇▇
PRE-CLOSING SUBSIDIARIES"), that the statements contained in this Article V are
true and correct as of the date of this Agreement and will be true and correct
as of the Closing Date:
SECTION 5.01 ORGANIZATION, AUTHORITY AND QUALIFICATION.
(a) Each of St. ▇▇▇▇ and the St. ▇▇▇▇ Pre-Closing Subsidiaries is
duly organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation, and in good standing in all jurisdictions in
which the failure to qualify or be in good standing could materially adversely
affect the consummation or the validity of the transactions provided for in this
Agreement or any of the Ancillary Agreements.
(b) St. ▇▇▇▇ has full corporate power and authority and has taken all
corporate action necessary to execute and deliver this Agreement and will have
taken all corporate action necessary to execute and deliver the Ancillary
Agreements to which it is a party and to perform its obligations hereunder and
thereunder. This Agreement has been, and each of the Ancillary Agreements to
which St. ▇▇▇▇ is a party will be, duly authorized, executed and delivered by
St. ▇▇▇▇; and, assuming due authorization, execution and delivery by all other
parties to such agreement, each of this Agreement and such Ancillary Agreements
constitutes or will constitute, as the case may be, the valid and legally
binding obligation of St. ▇▇▇▇, enforceable against St. ▇▇▇▇ in accordance with
its terms, subject to bankruptcy, insolvency, fraudulent transfer,
-22-
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles, except that no
representation or warranty is made regarding the indemnification and
contribution provisions of this Agreement or of the Registration Rights
Agreement.
(c) Each of the St. ▇▇▇▇ Pre-Closing Subsidiaries has full corporate
power and authority and will have taken all corporate action necessary to
execute and deliver each of the Ancillary Agreements to which it is a party and
to perform its obligations thereunder. Each of the Ancillary Agreements to which
any of the St. ▇▇▇▇ Pre-Closing Subsidiaries is a party will be duly authorized,
executed and delivered by the appropriate St. ▇▇▇▇ Pre-Closing Subsidiary and,
assuming due authorization, execution and delivery by all other parties to such
agreement, and, in the case of Platinum US, assuming also that the Maryland
Insurance Commission shall have issued an order permitting Platinum US to
underwrite accident and health insurance prior to completion of the Public
Offering, will constitute the valid and legally binding obligation of such St.
▇▇▇▇ Pre-Closing Subsidiary, enforceable against such St. ▇▇▇▇ Pre-Closing
Subsidiary in accordance with its terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
SECTION 5.02 FINANCIAL AND CONVENTION STATEMENTS. The Annual
Convention Statements required to be filed by Platinum US for the years 2000 and
2001, and the Quarterly Convention Statements required to be filed by Platinum
US during the period January 1, 2002 to the date hereof, (i) have been duly
filed with the Maryland insurance regulatory authorities and with all other
insurance regulatory authorities as required, (ii) were prepared in accordance
with accounting practices prescribed or permitted for insurance companies by the
Maryland insurance regulatory authorities, which have been applied on a basis
consistent with the past periods, and (iii) present fairly, in accordance with
such practices, the statutory financial position of Platinum US as at the date
of, and the results of its operations for the period covered by, such Annual or
Quarterly Convention Statements.
SECTION 5.03 NO CONFLICT. The authorization, execution, delivery and
performance of this Agreement and the Ancillary Agreements by St. ▇▇▇▇ and the
St. ▇▇▇▇ Pre-Closing Subsidiaries, as applicable, do not and will not:
(a) violate, conflict with or result in the breach of any provision
of the certificate of incorporation or by-laws (or similar organizational
documents) of St. ▇▇▇▇ or the St. ▇▇▇▇ Pre-Closing Subsidiaries,
(b) conflict with or violate in any material respect any law or
Governmental Order applicable to St. ▇▇▇▇ or the St. ▇▇▇▇ Pre-Closing
Subsidiaries or any of their respective assets, properties or businesses, or
(c) materially conflict with, result in any material breach of,
constitute a default (or event which with the giving of notice or lapse of time,
or both, would become a default) under, or require any authorization from, or
notification to, any Governmental Authority, or any consent under, any note,
bond, mortgage or indenture, contract, agreement, lease, sublease, license,
permit, franchise or other instrument or arrangement to which St. ▇▇▇▇ or any
-23-
of the St. ▇▇▇▇ Pre-Closing Subsidiaries is a party or by which any of such
assets or properties is bound or affected, which would have a material adverse
effect on the ability of St. ▇▇▇▇ or any of the St. ▇▇▇▇ Pre-Closing
Subsidiaries to consummate the transactions contemplated by this Agreement or
the Ancillary Agreements.
SECTION 5.04 TRANSFERRED ASSETS. (a) St. ▇▇▇▇, directly or indirectly
has, and at the Closing the Company or its designees will receive, good and
marketable title to all of the Transferred Assets (other than the Newly Hired
Employees and the Renewal Rights and the related information) except as provided
in SCHEDULE 5.04(a)(i), in each case free and clear of any Encumbrance, except
as set forth on SCHEDULE 5.04(a)(ii).
(b) With respect to the Platinum US Shares, United States Fidelity
and Guaranty Company ("USF&G"), an indirect wholly owned Subsidiary of St. ▇▇▇▇,
has good and marketable title to the Platinum US Shares, free and clear of any
Encumbrances. Assuming Platinum Finance has the requisite power and authority to
be the lawful owner of the Platinum US Shares, upon delivery to Platinum Finance
at the Closing of certificates representing the Platinum US Shares, duly
endorsed by USF&G for transfer to Platinum Finance, good and marketable title to
the Platinum US Shares will pass to Platinum Finance, free and clear of any
Encumbrances, other than those arising from acts of the Company or Platinum
Finance. The Platinum US Shares constitute validly issued, fully paid and
non-assessable shares of the capital stock of Platinum US and are not subject to
any voting trust agreement or other contract, agreement, arrangement, commitment
or understanding, including any such agreement, arrangement, commitment or
understanding restricting or otherwise relating to the voting, dividend rights
or disposition of the Platinum US Shares and there are no options, warrants or
any other rights to acquire the Platinum US Shares are outstanding.
SECTION 5.05 ST. ▇▇▇▇ INVESTMENT. (a) St. ▇▇▇▇ represents and warrants
that (i) it is capable of evaluating the merits and risks of the acquisition of
the St. ▇▇▇▇ Shares and the St. ▇▇▇▇ Option, (ii) it is acquiring the St. ▇▇▇▇
Shares and the St. ▇▇▇▇ Option for its own account, as principal, (iii) it is
acquiring the St. ▇▇▇▇ Shares and the St. ▇▇▇▇ Option for investment and not
with a view to the resale or distribution in a public offering of all or any
part of the St. ▇▇▇▇ Shares or the St. ▇▇▇▇ Option, and (iv) it has not sought
the advice of the Company with respect to the tax, accounting, legal or other
regulatory or investment issues relating to the St. ▇▇▇▇ Shares or the St. ▇▇▇▇
Option it expects to acquire pursuant to the St. ▇▇▇▇ Investment and has relied
only on the advice of its own legal counsel and other advisors.
(b) St. ▇▇▇▇ acknowledges that (i) the sale of the St. ▇▇▇▇ Shares
and the St. ▇▇▇▇ Option and the Common Shares issuable upon exercise of the St.
▇▇▇▇ Option will not be registered under any U.S. federal or state securities
laws, (ii) the St. ▇▇▇▇ Shares and the St. ▇▇▇▇ Option will be offered and sold
in reliance upon the exemptions from registration provided by the no-action
letters regarding Black Box Incorporated (publicly available June 26, 1990) and
Squadron, Ellenoff, Plesent & ▇▇▇▇▇▇ (publicly available February 28, 1992), and
applicable exemptions under state securities laws, and (iii) that the
certificates for the Common Shares and the St. ▇▇▇▇ Option purchased hereunder
and the Common Shares issuable upon exercise of the St. ▇▇▇▇ Option will bear a
legend noting that they may not be resold or transferred unless registered under
the Securities Act or pursuant to a valid exemption therefrom.
-24-
SECTION 5.06 TAXES.
(a) No material Tax liens with respect to the Transferred Assets or
assets of Platinum US have been filed.
(b) All material Tax Returns filed by or with respect to Platinum US
have been timely filed, and all such Tax Returns are true, correct and complete
in all material respects. Platinum US has timely paid (or there has been paid on
its behalf) all material Taxes that are due, or claimed or asserted by any
taxing authority to be due, from or with respect to it for the Pre-Closing
Periods.
(c) Except as disclosed in SCHEDULE 5.06(c), there are no outstanding
agreements, waivers, or arrangements extending the statutory period of
limitation applicable to any claim for, or the period for the collection or
assessment of, Taxes due from or with respect to Platinum US for any taxable
period.
(d) Except as disclosed in SCHEDULE 5.06(d), Platinum US is not a
party to, is not bound by, and has no obligation under, any Tax allocation or
sharing agreement or similar contract or arrangement. Notwithstanding any
disclosure contained in the Schedules to the Agreement, St. ▇▇▇▇ represents and
warrants that at the Closing Platinum US shall not be a party to, be bound by or
have any obligation under, any Tax allocation or sharing agreement or similar
contract or arrangement.
(e) Platinum US has materially complied with all applicable laws,
rules, and regulations relating to the payment and withholding of Taxes and has
timely withheld from employee wages and paid over to the proper governmental
authorities all material amounts required to be so withheld and paid over.
(f) Except as disclosed in SCHEDULE 5.06(f), there is no deficiency,
claim, audit, examination, action, suit, proceeding or investigation in progress
or pending or, to the knowledge of Platinum US, threatened against or with
respect to Platinum US in respect of any Taxes.
(g) No claim has ever been made by any taxing authority with respect
to Platinum US in a jurisdiction where Platinum US does not file Tax Returns
that Platinum US is or may be subject to taxation by that jurisdiction which has
not been resolved.
(h) Except as disclosed in SCHEDULE 5.06(h), Platinum US has not been
a member of an affiliated group filing consolidated, combined or unitary Tax
Returns other than a group for which St. ▇▇▇▇ was the common parent.
(i) Platinum US has not distributed the stock of any corporation in a
transaction satisfying the requirements of Section 355 of the Code since April
16, 1997, and the stock of Platinum US has not been distributed in a transaction
satisfying the requirements of Section 355 of the Code since April 16, 1997.
(j) Platinum US is not a party to any agreement, contract or
arrangements that could result, directly or indirectly, on account of the
transactions contemplated hereunder,
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separately or in the aggregate, in the payment of any "excess parachute
payments" within the meaning of Section 280G of the Code, except for Platinum
US's consulting contract with ▇▇. ▇▇▇▇▇▇.
(k) Between the date of this Agreement and the Closing Date, without
the prior written consent of the Company (such consent not to be unreasonably
withheld), Platinum US will not change any Tax accounting method or change any
material Tax election or settle or compromise any material Tax liability.
(l) Platinum US has no Subsidiaries.
SECTION 5.07 CONTRACTS OF PLATINUM US. Except for the contracts listed
on SCHEDULE 5.07, Platinum US is not party to any contract with any Person other
than St. ▇▇▇▇ or a St. ▇▇▇▇ Subsidiary.
SECTION 5.08 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Agreement and the Ancillary
Agreements, neither St. ▇▇▇▇ nor any other Person makes any express or implied
representation or warranty on behalf of or with respect to St. ▇▇▇▇ or the
Transferred Business, and St. ▇▇▇▇ hereby disclaims any representation or
warranty not contained herein or therein.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants, as to itself and as to its
Post-Closing Subsidiaries except as to Platinum US, to St. ▇▇▇▇ that the
statements contained in this Article VI are true and correct as of the date of
this Agreement and will be true and correct as of the Closing Date:
SECTION 6.01 ORGANIZATION, AUTHORITY AND QUALIFICATION.
(a) The Company and each of its Post-Closing Subsidiaries is duly
organized, validly existing and in good standing under the laws of the
jurisdiction of incorporation, and in good standing in all jurisdictions in
which the failure to qualify or be in good standing could materially adversely
affect the consummation or the validity of the transactions provided for in this
Agreement.
(b) The Company has full corporate power and authority and has taken
all corporate action necessary to execute and deliver this Agreement and will
have taken all corporate action necessary to execute and deliver the Ancillary
Agreements to which it is a party and to perform its obligations hereunder and
thereunder. This Agreement has been, and each of the Ancillary Agreements to
which the Company is a party will be, duly authorized, executed and delivered by
the Company; and, assuming due authorization, execution and delivery by all
other parties to such agreement, each of this Agreement and such Ancillary
Agreements constitutes or will constitute, as the case may be, the valid and
legally binding obligation of the Company, enforceable against the Company in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general
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applicability relating to or affecting creditors' rights and to general equity
principles, including the exercise of judicial discretion in connection
therewith except that no representation or warranty is made regarding the
indemnification and contribution provisions of this Agreement or the
Registration Rights Agreement.
(c) Each of the Company's Post-Closing Subsidiaries will have full
corporate power and authority and will have taken all corporate action necessary
to execute and deliver each of the Ancillary Agreements to which it is a party
and to perform its obligations thereunder. Each of the Ancillary Agreements to
which any of the Company's Post-Closing Subsidiaries is a party will be duly
authorized, executed and delivered by the appropriate Post-Closing Subsidiary of
the Company and, assuming due authorization, execution and delivery by all other
parties to such agreement, will constitute the valid and legally binding
obligation of such Post-Closing Subsidiary of the Company, enforceable against
such Post-Closing Subsidiary in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles, including the exercise of judicial discretion
in connection therewith.
SECTION 6.02 NO CONFLICT. The execution, delivery and performance of
this Agreement and the Ancillary Agreements by the Company and its Post-Closing
Subsidiaries, as applicable, do not and will not:
(a) violate, conflict with or result in the breach of any provision
of the certificate of incorporation, by-laws (or similar organizational
documents) of the Company and its Post-Closing Subsidiaries, as applicable,
(b) conflict with or violate any law or Governmental Order applicable
to the Company or its Post-Closing Subsidiaries or any of their respective
assets, properties or businesses, except that the performance of this Agreement
and the execution, delivery and performance of certain of the Ancillary
Agreements by the Company and its Post-Closing Subsidiaries may not occur until
the regulatory approvals specified in SCHEDULE 6.02(b) are obtained, or
(c) conflict with, result in any material breach of, constitute a
default (or event which with the giving of notice or lapse of time, or both,
would become a default) under, or require any authorization from or notification
to, any Governmental Authority, or any consent under, any note, bond, mortgage
or indenture, contract, agreement, lease, sublease, license, permit, franchise
or other instrument or arrangement to which the Company and its Post-Closing
Subsidiaries, as applicable, are party or by which any of such assets or
properties is bound or affected, which would have a material adverse effect on
the ability of the Company or any of its Post-Closing Subsidiaries to consummate
the transactions contemplated by this Agreement except that the performance of
this Agreement and the execution, delivery and performance of certain of the
Ancillary Agreement by the Company and its Post-Closing Subsidiaries may not
occur until the regulatory approvals specified in SCHEDULE 6.02(b) are obtained.
SECTION 6.03 ST. ▇▇▇▇ INVESTMENT. (a) The Company represents and
warrants to St. ▇▇▇▇ that, assuming St. ▇▇▇▇ has the requisite power and
authority to be the lawful owner of the St. ▇▇▇▇ Shares, upon issuance and
delivery to St. ▇▇▇▇ or its designees at the Closing of
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certificates representing the Firm St. ▇▇▇▇ Shares and the Optional St. ▇▇▇▇
Shares, as applicable, (i) good and marketable title to such St. ▇▇▇▇ Shares
will pass to St. ▇▇▇▇ or its designees free and clear of any Encumbrances other
than those arising from acts of the Company or its Post-Closing Subsidiaries,
and (ii) the St. ▇▇▇▇ Shares will constitute duly and validly issued, fully paid
and non-assessable shares of the capital stock of the Company.
(b) The Company acknowledges that (i) the sale of the St. ▇▇▇▇
Shares, the St. ▇▇▇▇ Option and any Common Shares issuable upon exercise of the
St. ▇▇▇▇ Shares will not be registered under any U.S. federal or state
securities laws, (ii) the St. ▇▇▇▇ Shares and the St. ▇▇▇▇ Option will be
offered and sold in reliance upon the exemptions from registration provided by
the no-action letters regarding Black Box Incorporated (publicly available June
26, 1990) and Squadron, Ellenoff, Plesent & ▇▇▇▇▇▇ (publicly available February
28, 1992), and applicable exemptions under state securities laws, and (iii) that
the certificates for the Common Shares and St. ▇▇▇▇ Option purchased hereunder,
and any Common Shares issued upon exercise of the St. ▇▇▇▇ Option, will bear a
legend noting that they may not be resold or transferred unless registered under
the U.S. Securities Act of 1933 or pursuant to a valid exemption therefrom.
SECTION 6.04 INTERNAL RETROCESSION AGREEMENTS. The Company represents
that it intends to cause each of Platinum US and Platinum UK to enter into a
Quota Share Retrocession Agreement between such subsidiary and Platinum Bermuda,
substantially in the form of EXHIBIT 6.04, pursuant to which Platinum Bermuda
will reinsure a portion of the reinsurance liabilities of such subsidiary under
all reinsurance contracts written by such subsidiary after the Closing Date
excluding business subject to the Quota Share Retrocession Agreements.
SECTION 6.05 NO OTHER REPRESENTATIONS OR WARRANTIES. Except for the
representations and warranties contained in this Agreement and the Ancillary
Agreements, neither the Company nor any other Person make any express or implied
representation or warranty on behalf of or with respect to the Company or any of
the Post-Closing Subsidiaries, and the Company hereby disclaims any
representation or warranty not contained herein or therein.
ARTICLE VII
NON-COMPETITION; USE OF NAME;
ADMINISTRATION OF RUN-OFF
CONTRACTS; INSURANCE MATTERS
SECTION 7.01 NON-COMPETITION. (a) Except as set forth in this
Agreement or any of the Ancillary Agreements, for a period of two years
following the Closing Date (the "RESTRICTED PERIOD") neither St. ▇▇▇▇ nor any of
its Post-Closing Subsidiaries nor any of their respective directors, officers or
agents may
(i) 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 St. ▇▇▇▇ has granted Renewal Rights
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to the Company provided that the Company or its Post-Closing Subsidiaries
continue to provide, during the Restricted Period, reinsurance coverage of
such types to third parties;
(ii) employ, offer to employ or solicit with a view to
employment any of the individuals listed or individuals holding positions
listed on SCHEDULE 7.01(a)(ii) to this Agreement; or
(iii) use or disclose to any Person other than the Company or
its Post-Closing Subsidiaries, any Transferred Business Confidential
Information except in connection with the administration of (x) the
Reinsurance Agreements, (y) the Run-Off Business or (z) any retained
Liabilities PROVIDED that St. ▇▇▇▇, its Post-Closing Subsidiaries and their
respective directors, officers and agents 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 St.
▇▇▇▇, its Post-Closing Subsidiaries and their respective directors,
officers and agents shall use reasonable efforts to avoid providing
Transferred Business Confidential Information to a competitor of the
Company under circumstances reasonably likely to materially impair the
value of the Renewal Rights;
PROVIDED that, in the case of Transferred Business Confidential Information that
relates to the Reinsurance Agreements, the Restricted Period shall be
indefinite.
(b) Notwithstanding any other provision of this Section 7.01 to the
contrary, neither St. ▇▇▇▇ nor any of its Post-Closing Subsidiaries is
prohibited from:
(i) engaging in any line of business in which it is engaged
immediately after the completion of the Public Offering and for which
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;
(ii) acquiring any Person or, subject to the limitation in
(iii) 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 realized investment gains and losses, in its most recent fiscal
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 St. ▇▇▇▇ and any of its Post-Closing Subsidiaries may acquire
an
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interest of more than 49% of a Person that is not a Permitted Acquiree if
St. ▇▇▇▇ or such Post-Closing Subsidiary promptly divests the property or
casualty reinsurance operations of such Person; or
(iii) soliciting, offering, issuing, selling, purchasing or
referring any contracts of reinsurance of any type to, from or with any of
its Affiliates 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 or which
the Company and its Post-Closing Subsidiaries declines to reinsure.
(c) During the Restricted Period neither St. ▇▇▇▇ nor any of its
Post-Closing Subsidiaries shall 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.
(d) Section 7.01(a)(i) and (ii) shall not be binding upon a
Post-Closing Subsidiary of St. ▇▇▇▇ after the time such Person ceases to be a
Post-Closing Subsidiary of St. ▇▇▇▇. For avoidance of doubt, Section 7.01(a)
also does not apply to any Person which on or after the Closing Date becomes an
Affiliate (other than a Post-Closing Subsidiary) of St. ▇▇▇▇, including any
Person that acquires all or substantially all of the capital stock or assets of
St. ▇▇▇▇ through merger, consolidation, tender offer, acquisition of assets or
otherwise, PROVIDED, HOWEVER, that Section 7.01(a)(ii) and (iii) shall apply to
such Person.
(e) Transferred Business Confidential Information shall not include
information relating to the Transferred 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 St. ▇▇▇▇, any of its Post-Closing Subsidiaries or any of
their respective directors, officers or agents or any Affiliate of St. ▇▇▇▇ 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, St. ▇▇▇▇ shall provide the
Company with prompt written notice of the request, requirement, subpoena or
order to permit the Company (if it so elects) to seek an appropriate protective
order preventing or limiting disclosure. If the Company seeks such an order or
takes other steps to avoid or limit disclosure, St. ▇▇▇▇ shall cooperate with
the Company at the Company's expense. If, in the absence of such protective
order, St. ▇▇▇▇, is compelled to disclose any Transferred Business Confidential
Information, St. ▇▇▇▇ ▇▇▇ disclose such Transferred Business Confidential
Information without liability hereunder.
(f) St. ▇▇▇▇ and its Post-Closing Subsidiaries shall treat any
Transferred Business Confidential Information with the same degree of care with
which it treats its own confidential information.
(g) The Company and St. ▇▇▇▇ agree that money damages would not be a
sufficient remedy for any breach of this Section 7.01 by St. ▇▇▇▇ or any of its
Post-Closing Subsidiaries or any of its or such Post-Closing Subsidiaries'
directors, officers or agents, and
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that, in addition to all other remedies, the Company shall be entitled to
specific performance and injunctive or other equitable relief as a remedy for
any such breach.
SECTION 7.02 USE OF NAMES; NON-DISPARAGEMENT. (a) Commencing on the
Closing Date, neither the Company nor any of its Post-Closing Subsidiaries and
Affiliates may 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, 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, and (iv) pursuant to the
Underwriting Management Agreement and the UK Underwriting Management Agreement.
(b) The Company shall not use and shall cause its Post-Closing
Subsidiaries to refrain from using 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 other than references to St. Paul's
ownership of the St. ▇▇▇▇ Shares or to this Agreement, the Reinsurance
Agreements or the Ancillary Agreements or the subject matter thereof.
(c) The Company and St. ▇▇▇▇ each agree that neither it nor any of
its Subsidiaries shall make any statement that would reasonably be viewed as
intended to be disparaging of the business, reputation or good name of the
other.
SECTION 7.03 STANDARD FOR ADMINISTRATION OF RUN-OFF BUSINESS. St. ▇▇▇▇
shall cause its Post-Closing Subsidiaries to administer the Run-off Business at
levels of care and attention and with operating procedures that are consistent
with, the practices of St. ▇▇▇▇ in respect of other business of St. ▇▇▇▇. St.
▇▇▇▇ shall maintain all licenses and authorization required for it to administer
the Run-off Business.
SECTION 7.04 QUOTATIONS FOR CERTAIN INSURANCE COVERAGE. St. ▇▇▇▇
agrees that one or more of its Post-Closing Subsidiaries shall provide
quotations to the Company and its Subsidiaries, at normal market rates for
similarly situated Persons, for workers compensation, general liability and
property insurance coverages for the period commencing on the Closing Date and
ending December 31, 2003.
ARTICLE VIII
TAX MATTERS
SECTION 8.01 TAXES OF PLATINUM US. (a) St. ▇▇▇▇ shall be responsible
for, shall pay or cause to be paid, and shall indemnify the Company and each of
its Post-Closing Subsidiaries against any and all Pre-Closing Taxes. "PRE
CLOSING TAXES" shall mean any and all Taxes (i) imposed on the St. ▇▇▇▇ Group
(other than Platinum US) for any taxable year, (ii) that relate to Platinum US
or for which Platinum US could be liable and that in both cases are for taxable
periods or portions thereof ending on or before the Closing Date, or (iii) to
the extent not covered by clauses (i) and (ii) above, directly related to the
Transferred Assets and arising in taxable periods or portions thereof ending on
or before the Closing Date ("PRE-CLOSING PERIODS"); PROVIDED, HOWEVER, that in
each case under clauses (i), (ii) and (iii) above Taxes shall not include
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Taxes covered by Section 8.02. In the case of Taxes attributable to taxable
periods beginning on or before and ending after the Closing Date ("STRADDLE
PERIODS"), if any, the Taxes for the Pre-Closing Period shall be computed as if
such taxable period ended on the date of the Closing. Not later than five
Business Days before the due date for the payment (including in connection with
estimated payments) of any Pre-Closing Taxes, St. ▇▇▇▇ shall pay to the Company
or any of its Post-Closing Subsidiaries an amount equal to any such Pre-Closing
Taxes which are payable by the Company or any of its Post-Closing Subsidiaries.
(b) The Company shall be responsible for (i) any and all Taxes of
Platinum US that relate to Platinum US or for which Platinum US could be liable
other than Pre-Closing Taxes and (ii) any and all Taxes directly related to the
Transferred Assets and arising in taxable periods or portions thereof beginning
on or after the Closing Date. To the extent that any Taxes other than
Pre-Closing Taxes have been pre-paid on or before the Closing, the Company shall
pay to St. ▇▇▇▇ the amount of such prepaid Taxes that do not constitute
Pre-Closing Taxes.
(c) St. ▇▇▇▇ shall include the income of Platinum US for the
Pre-Closing Period in St. Paul's federal consolidated Tax Returns and any state
consolidated, combined or unitary Tax Returns that are required and that include
(i) Platinum US and (ii) any other member of St. Paul's affiliated group other
than Platinum US (the "CONSOLIDATED RETURNS"), and shall file and be responsible
for remitting all Taxes reflected on such Consolidated Returns. St. ▇▇▇▇ shall
file or cause to be filed all Tax Returns required to be filed by or with
respect to Platinum US on or before the Closing Date and shall pay all Taxes due
with respect thereto. All items relating to Platinum US and included in Tax
Returns of or with respect to Platinum US for Pre-Closing Periods (including the
Platinum US pro forma with respect to Consolidated Returns) prepared by St. ▇▇▇▇
pursuant to this Section 8.01 shall be reflected in a manner consistent with
past practices. St. ▇▇▇▇ shall provide to the Company, at least 10 days prior to
the due date (including extensions) for the filing of St. Paul's federal
consolidated tax return for the taxable year 2002, a copy of the 2002 pro forma
federal income tax return of Platinum US prepared consistent with past practice.
St. ▇▇▇▇ shall not amend a pro forma income tax return of Platinum US for a
Pre-Closing Period in which Platinum US was included in the federal consolidated
income tax return of St. ▇▇▇▇ or in any other consolidated, combined or group
tax return with St. ▇▇▇▇ or any of its Affiliates, in a manner which causes an
increase in Taxes of Platinum US for a period ending after the Closing, without
the consent of the Company, which shall not be unreasonably withheld. The
Company shall file or cause to be filed all other Tax Returns required to be
filed by or with respect to Platinum US. With respect to Tax Returns for
Straddle Periods, such Tax Returns will be duly and timely filed by the Company,
and the Company will use its commercially reasonable best efforts to assure that
such Tax Returns will be correct, accurate and complete in all material
respects. The Company shall furnish a completed copy of such Tax Returns to St.
▇▇▇▇ for St. Paul's approval (not to be unreasonably withheld or delayed) within
a reasonable time prior to the due date of such returns. Except as required by
applicable law, the Company shall not take a position with respect to any item
on any Tax Return of Platinum US for any Straddle Period which it is notified in
writing by St. ▇▇▇▇ is inconsistent with the position taken with respect to such
item on a prior Tax Return or, if inconsistent, will obtain St. Paul's prior
written consent which shall not be unreasonably withheld.
(d) Any refunds of Taxes with respect to Platinum US paid for any
period ending on or before the Closing Date (treating such date as the end of a
short taxable year for this
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purpose) shall be for the account of St. ▇▇▇▇. The Company shall, if St. ▇▇▇▇ so
requests and at St. Paul's expense, cause the relevant entity (the Company,
Platinum US or any successor) to file for and obtain any refunds to which St.
▇▇▇▇ is entitled hereunder, including through the prosecution of any
administrative or judicial proceeding which St. ▇▇▇▇, in its sole and absolute
discretion, chooses to direct such entity to pursue. The Company shall permit
St. ▇▇▇▇ to control (at St. Paul's expense) the prosecution of any such refund
claimed, and when deemed appropriate by St. ▇▇▇▇, shall cause the relevant
entity to authorize by appropriate power of attorney such person as St. ▇▇▇▇
shall designate to represent such entity with respect to such refund claimed.
Without imposing any duty of investigation on the Company, the Company shall,
and shall cause Platinum US to, notify St. ▇▇▇▇ of the existence of any facts
known to the Company that would constitute a reasonable basis for claiming a
refund of Taxes to which St. ▇▇▇▇ is entitled hereunder. The Company shall
forward to St. ▇▇▇▇ any such refund promptly after the refund is received.
SECTION 8.02 CONVEYANCE TAXES. The Company and St. ▇▇▇▇ shall each be
severally liable for one half of any real property transfer or gains, sales,
use, transfer, value added, stock transfer, and stamp taxes, any transfer,
recording, registration, and other fees and any similar Taxes which become
payable in connection with the transactions contemplated by this Agreement.
Except with respect to any U.K. stamp duty that may arise relating to the UK
Business Transfer Agreement, with the cooperation of St. ▇▇▇▇, the Company shall
file such applications and documents as shall permit any such Tax to be assessed
and paid on or prior to the Closing Date in accordance with any available
pre-sale filing procedure. St. ▇▇▇▇ shall execute and deliver all instruments
and certificates necessary to enable the Company to comply with the foregoing.
The Company shall complete and execute a resale or other exemption certificate
with respect to the inventory items sold hereunder, and shall provide St. ▇▇▇▇
with executed copies thereof.
SECTION 8.03 TAX PROCEEDINGS. (a) The Company shall promptly notify
St. ▇▇▇▇ in writing upon receipt by the Company or any of its Affiliates,
including Platinum US, of notice of any pending or threatened audit, assessment,
or judicial or administrative proceeding involving Taxes ("TAX PROCEEDING") with
respect to Platinum US for which St. ▇▇▇▇ would be required to indemnify the
Company pursuant to Section 8.01, provided that the failure of the Company to
give such notice shall not relieve St. ▇▇▇▇ of its indemnification obligation
under Section 8.01, except to the extent St. ▇▇▇▇ is materially prejudiced
thereby.
(b) St. ▇▇▇▇ shall have the right to assume sole control over a Tax
Proceeding to the extent it relates to Pre-Closing Taxes which may be the
subject of indemnification by St. ▇▇▇▇ pursuant to Section 8.01 and to employ
counsel of its choice at its expense. St. ▇▇▇▇ shall not compromise or settle
any such Tax Proceeding without the prior written consent of the Company, which
consent shall not be unreasonably withheld. If St. ▇▇▇▇ shall not assume the
defense of such Tax Proceeding, then the Company may assume sole control over
such Tax Proceeding, without relieving St. ▇▇▇▇ of its indemnification
obligation under Section 8.01, provided that St. ▇▇▇▇ ▇▇▇ participate in the
defense at its own expense.
(c) St. ▇▇▇▇ shall have the right to participate in, but not control,
at its own expense, the defense of any Tax Proceeding with respect to a Straddle
Period which may be the subject of indemnification by St. ▇▇▇▇ pursuant to
Section 8.01(a) and, with the written consent
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of the Company, and at St. Paul's sole expense, may assume the entire defense of
such Tax Proceeding. Neither party may agree to settle any such Tax Proceeding
without the prior written consent of the other party.
SECTION 8.04 ALLOCATION OF CONSIDERATION. St. ▇▇▇▇ shall deliver to
the Company a statement setting forth the allocation of the aggregate
consideration received by St. ▇▇▇▇ under this Agreement within 30 days of the
receipt by St. ▇▇▇▇ of a third party appraisal of the Transferred Assets. Such
allocation shall be determined in accordance with Section 1060 of the Code and
the Regulations promulgated thereunder, to the extent applicable. The Company,
St. ▇▇▇▇ and the Parties each agree to prepare and file all Tax Returns in
respect of all affected Taxable Periods in a manner consistent with the
allocation statement prepared by St. ▇▇▇▇.
SECTION 8.05 SECTION 197 ELECTION. Upon the request of the Company and
to the extent applicable, St. ▇▇▇▇ agrees to elect under Section
197(f)(9)(B)(ii) of the Code to (i) recognize gain on the disposition of
goodwill, going concern value and any other Section 197 intangible (as defined
in Section 197(d) of the Code), if any, for which depreciation and amortization
would not have been allowable but for Section 197, if such asset was held or
used by St ▇▇▇▇ or any of its Subsidiaries at any time on or after July 25, 1991
and on or before August 10, 1993, and (ii) pay tax on such gain in accordance
with Section 197(f)(9)(B)(ii)(II) of the Code to the extent that such election
is necessary to enable the Company or any of its affiliates to claim
amortization deductions with respect to such asset under Section 197 of the
Code; PROVIDED, HOWEVER, that St. ▇▇▇▇ shall not be required to make such
election and/or comply with clause (ii) above if it determines in its sole
discretion that the election, or the requirements of clause (ii), would cause a
detriment to St. ▇▇▇▇ or any of its Subsidiaries.
SECTION 8.06 INDEMNIFICATION AS ADJUSTMENT. The parties agree to treat
any indemnification payments made pursuant to Section 8.01 or Section 10.01
hereunder as an adjustment to the consideration given in exchange for the
Transferred Assets.
ARTICLE IX
CONDITIONS TO CLOSING
SECTION 9.01 CONDITIONS TO OBLIGATIONS OF ST. ▇▇▇▇ AND THE COMPANY.
The obligations of St. ▇▇▇▇ and the Company to consummate the transactions
contemplated by this Agreement are subject to the fulfillment, at or prior to
the Closing, of each of the following conditions:
(a) the Firm Public Offering Shares and the Firm Units shall have
been delivered;
(b) no Action shall have been commenced by any Governmental
Authority, seeking to restrain or materially and adversely alter the
transactions contemplated by this Agreement which, in the reasonable, good faith
determination of either St. ▇▇▇▇ or the Company, is likely to render it
impossible or unlawful to consummate such transactions;
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(c) the parties hereto, or their Subsidiaries, as applicable, shall
have executed and delivered to each other each of the Ancillary Agreements to
which they are a party; and
(d) all consents, approvals, authorizations, registrations, licenses
or qualifications set forth on SCHEDULE 6.02(b) with any court or governmental
authority required for the consummation of the transactions contemplated by this
Agreement or any of the Ancillary Agreements shall have been obtained, shall not
contain limitations or conditions which would materially adversely affect the
ability of the Company and its Post-Closing Subsidiaries to conduct the
Transferred Business after the Closing, and shall be in full force and effect.
SECTION 9.02 CONDITIONS TO OBLIGATIONS OF ST. ▇▇▇▇. The obligation of
St. ▇▇▇▇ to consummate the transactions contemplated by this Agreement is
subject to the fulfillment, at or prior to the Closing, of each of the following
additional conditions:
(a) the representations and warranties of the Company contained in
this Agreement shall be true and correct, as of the date hereof and as of the
Closing Date, with the same force and effect as if made as of the Closing Date;
(b) the covenants and agreements contained in this Agreement and the
Ancillary Agreements to be complied with by the Company and its Post-Closing
Subsidiaries (other than Platinum US) on or before the Closing Date shall have
been complied with in all material respects;
(c) St. ▇▇▇▇ shall have received a certificate from the Company to
the effect of Sections 9.02(a) and (b) signed by the President and Chief
Executive Officer and the Chief Financial Officer of the Company;
(d) St. ▇▇▇▇ shall have received an opinion in form and substance
satisfactory to St. ▇▇▇▇ (the "ST. ▇▇▇▇ INVESTMENT OPINIONS") from ▇▇▇▇▇▇▇, ▇▇▇▇
& ▇▇▇▇▇▇▇, Bermuda counsel to St. ▇▇▇▇, as to the due authorization, valid
issuance and non-assessability of the St. ▇▇▇▇ Shares, as well as from ▇▇▇▇▇▇▇▇
& ▇▇▇▇▇▇▇▇ as to the exemption from the registration requirements of the
Securities Act of the Firm St. ▇▇▇▇ Shares and, as a condition to the Second
Closing, St. ▇▇▇▇ Investment Opinions in respect of the Optional St. ▇▇▇▇
Shares; and
(e) St. ▇▇▇▇ shall have received signed releases from ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇ and other individuals with whom St. ▇▇▇▇ Re shall have entered into
employment agreements following the date hereof in the form attached as SCHEDULE
9.02(e).
(f) all of the deliveries required to be made by the Company at the
Closing pursuant to Section 3.05 shall have been made.
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SECTION 9.03 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The obligation
of the Company to consummate the transactions contemplated by this Agreement is
subject to the fulfillment, at or prior to the Closing, of each of the following
additional conditions:
(a) The representations and warranties of St. ▇▇▇▇ contained in this
Agreement shall be true and correct as of the Closing Date, with the same force
and effect as if made as of the Closing Date;
(b) the covenants and agreements contained in this Agreement and the
Ancillary Agreements to be complied with by St. ▇▇▇▇ and its Pre-Closing
Subsidiaries on or before the Closing Date shall have been complied with in all
material respects;
(c) the Company shall have received a certificate from St. ▇▇▇▇ to
the effect of Sections 9.03(a) and (b) signed by duly authorized officers
thereof;
(d) all of the deliveries required to be made by St. ▇▇▇▇ at the
Closing pursuant to Section 3.04 shall have been made;
(e) the Company shall have received opinions in form and substance
reasonably satisfactory to the Company from ▇▇▇▇▇▇▇▇▇ and May, A&L Goodbody and
▇▇▇▇▇▇▇, ▇▇▇▇ and ▇▇▇▇▇▇▇ as to the due organization, good standing, corporate
power and authority and licensing authority of the Company and each of its
Post-Closing Subsidiaries other than Platinum US; and
(f) the Maryland Insurance Commissioner shall have granted Platinum
US permission to write accident and health insurance.
ARTICLE X
INDEMNIFICATION
SECTION 10.01 GENERAL CROSS INDEMNIFICATION. (a) Except as otherwise
specifically set forth in any provision of this Agreement, including but not
limited to Sections 8.01, 10.02 and 10.03, or of any Ancillary Agreement, St.
▇▇▇▇ shall indemnify, defend and hold harmless the Company, its Post-Closing
Subsidiaries and their respective officers, directors, employees,
representatives and agents ("COMPANY INDEMNITEES") from and against any and all
Losses of such Company Indemnitee arising out of, by reason of or otherwise in
connection with (i) the St. ▇▇▇▇ Liabilities; or (ii) any breach by St. ▇▇▇▇,
any of its Post-Closing Subsidiaries or any Person acting on behalf of St. ▇▇▇▇
or any such Post-Closing Subsidiary of any of their representations or
warranties in, or any covenant, commitment, obligation, agreement or undertaking
to be performed or complied with by any of them under this Agreement or any
Ancillary Agreement. For the avoidance of doubt indemnification under this
Section 10.01(a) does not apply with respect to any Liabilities relating to the
Employment Agreements or the Renewal Obligations; provided that with respect to
renewals of contracts, if any, within the Transferred Lines to be renewed which
had been previously written or renewed by St. ▇▇▇▇ Re at above market rates with
the implicit or explicit expectation or understanding between the parties that
such above market rate during such period would be compensated by below market
rates applicable to future renewals of the contract St. ▇▇▇▇ shall indemnify the
Company's affected
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Post-Closing Subsidiaries for such differential, in such amounts as agreed to by
the parties after negotiating in good faith.
(b) Except as otherwise specifically set forth in any provision of
this Agreement or any Ancillary Agreement, the Company shall indemnify, defend
and hold harmless St. ▇▇▇▇, its Post-Closing Subsidiaries and their respective
officers, directors, employees, representatives and agents ("ST. ▇▇▇▇
INDEMNITEES") from and against any and all Losses of such St. ▇▇▇▇ Indemnitees
arising out of, by reason of or otherwise in connection with (i) the Company
Liabilities; or (ii) any breach by the Company, any of its Post-Closing
Subsidiaries or any Person acting on behalf of the Company or any such
Post-Closing Subsidiary of any of their representations or warranties in, or any
covenant, commitment, obligation, agreement or undertaking to be performed or
complied with by any of them under, of this Agreement or any Ancillary
Agreement.
(c) The indemnity obligations contained in this Section 10.01 are
applicable whether or not any Action or the facts or transactions giving rise to
such Action arose prior to, on or subsequent to the date of this Agreement.
SECTION 10.02 REGISTRATION STATEMENT INDEMNIFICATION AND CONTRIBUTION.
(a) Subject to Section 10.02(b) and Section 10.02(c), the Company shall
indemnify and hold harmless (which includes, for the avoidance of doubt, the
reimbursement to each St. ▇▇▇▇ Registration Indemnitee (as defined below) of any
expenses, including legal expenses, incurred by such St. ▇▇▇▇ Registration
Indemnitee in connection with investigating or defending against any Loss as
such expenses are incurred), to the full extent permitted by law, St. ▇▇▇▇, its
Post-Closing Subsidiaries, the officers, directors, employees, representatives
and agents of each of them, each Person who controls any of them (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, employees and agents of each such controlling
Person (each, a "ST. ▇▇▇▇ REGISTRATION INDEMNITEE"), from and against any and
all Losses arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the "COMPANY INFORMATION", being the
information (other than the St. ▇▇▇▇ Information and the Shared Information,
each as defined below) contained in any Registration Statement or Prospectus or
the Private Offering Memorandum, or in any amendment or supplement thereto, or
arising out of or based upon any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading. The indemnity and reimbursement obligation under this
Section 10.02(a) will be in addition to any liability that the Company may
otherwise have.
(b) St. ▇▇▇▇ shall indemnify and hold harmless (which includes, for
the avoidance of doubt, the reimbursement to each Company Registration
Indemnitee (as defined below) of any expenses, including legal expenses,
incurred by such Company Registration Indemnitee in connection with
investigating or defending against any Loss), to the full extent permitted by
law, the Company, its Post-Closing Subsidiaries, the officers, directors,
employees, representatives and agents of each of them, each Person who controls
any of them (within the meaning of Section 15 of the Securities Act or Section
20 of the Exchange Act) and the officers, directors, employees, representatives
and agents of each such controlling Person (each, a "COMPANY REGISTRATION
INDEMNITEE" and, together with the St. ▇▇▇▇ Registration Indemnitees, the
"REGISTRATION INDEMNITEES") from and against any and all Losses (including
"Damages" (if any)
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owed by the Company to RenaissanceRe pursuant to Section 10.13 of the Investment
Agreement) arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in the "ST. ▇▇▇▇ INFORMATION" in any
Registration Statement or Prospectus or the Private Offering Memorandum, or in
any amendment or supplement thereto or arising out of or based upon any omission
or alleged omission to state in the St. ▇▇▇▇ Information a material fact
required to be stated therein or necessary to make the statements in the St.
▇▇▇▇ Information not misleading. The indemnity and reimbursement obligation
under this Section 10.02(b) will be in addition to any liability that the St.
▇▇▇▇ ▇▇▇ otherwise have. For purposes of this Article X, the "St. ▇▇▇▇
Information" means the information specified as such in the copy of the
preliminary prospectus attached as Schedule10.02(b) and all similar information
in any amendment or supplement thereto or any preliminary or final prospectus.
(c) St. ▇▇▇▇ and the Company shall indemnify and hold harmless (which
includes, for the avoidance of doubt, the reimbursement to each Registration
Indemnitee of any expenses, including legal expenses, incurred by such Company
Registration Indemnitee or St. ▇▇▇▇ Registration Indemnitee in connection with
investigating or defending against any Loss), to the full extent permitted by
law, each Company Registration Indemnitee and each St. ▇▇▇▇ Registration
Indemnitee, as the case may be, from and against 50% of any and all Losses
(including "Damages" (if any) owed by the Company to RenaissanceRe pursuant to
Section 10.13 of the Investment Agreement) of each thereof arising out of or
based upon any untrue statement or alleged untrue statement of a material fact
in the "SHARED INFORMATION" in any Registration Statement or Prospectus or the
Private Offering Memorandum, or in any amendment or supplement thereto, or
arising out of or based upon any omission or alleged omission to state a
material fact required to be stated or necessary to make the statements in the
Shared Information not misleading. For purposes of this Article X, "Shared
Information" means the information specified as such in the copy of the
preliminary prospectus attached as Schedule 10.02(c) and all similar information
in any amendment or supplement thereto or any preliminary or final prospectus;
PROVIDED, HOWEVER, that if (i) any historical financial information relating to
St. ▇▇▇▇ with respect to the nine months ended September 30, 2002 is changed
after the filing with the Commission of Amendment No. 8 to the Registration
Statement relating to the Public Offering and of Amendment No. 3 to the
Registration Statement relating to the ESU Offering, and (ii) such change to
such historical financial information necessitates a corresponding change to the
pro forma financial information with respect to the nine months ended September
30, 2002 contained in such Registration Statements, such changed pro forma
financial information based on such changed historical financial information
will be deemed to be "St. ▇▇▇▇ Information" and not "Shared Information".
(d) If for any reason the foregoing indemnification is unavailable
to, or is insufficient to hold harmless, a Registration Indemnitee in respect of
any indemnifiable Loss, the Indemnifying Party shall contribute to the amount
paid or payable by such Registration Indemnitee as a result of any Loss in such
proportion as is appropriate to reflect the relative benefit and relative fault
of the Indemnifying Party, on the one hand, and the Registration Indemnitee, on
the other, in connection with the statements or omissions in the Registration
Statement or Prospectus or the Private Offering Memorandum that resulted in such
Loss, as well as any other relevant equitable considerations. The relative
benefit to St. ▇▇▇▇ shall be an amount equal to the product of (1) the number of
the St. ▇▇▇▇ Shares and (2) the initial public offering price per share for the
Public Offering Shares. The relative benefit to the Company shall be an
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amount equal to the sum of (1) the product of (A) the number of Common Shares
issued in the Public Offering and (B) the initial public offering price of the
Public Offering Shares, (2) the product of (A) the number of Common Shares
issued to RenaissanceRe pursuant to the RenaissanceRe Investment and (B) the
initial public offering price per share of the Public Offering Shares and (3)
the product of (A) the number of Units issued in the ESU Offering and (B) $25.
The relative fault of St. ▇▇▇▇ or the Company, as the case may be, shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Indemnifying Party or by
the Registration Indemnitee and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The amount paid or payable in respect of any Loss (including with respect to any
"Damages", if any, owed by the Company to RenaissanceRe pursuant to Section
10.13 of the Investment Agreement) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such claim. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For the avoidance of doubt, a St. ▇▇▇▇
Registration Indemnitee may not demand any contribution from the Company for any
Losses arising out of or based upon any St. ▇▇▇▇ Information, and the Company
may not demand any contribution from St. ▇▇▇▇ for any Losses arising out of or
based upon any Company Information. Furthermore, any contribution between the
Registration Indemnitees with respect to any Losses arising out of or based upon
any Shared Information is limited to 50% of the amount of such Loss.
(e) Notwithstanding anything to the contrary in this Agreement or any
of the Ancillary Agreements, St. Paul's aggregate liability to the Company
Registration Indemnitees under Section 10.02 (including with respect to any
"Damages" owed by the Company to Renaissance Re pursuant to Section 10.13 of the
Investment Agreement) is limited to the excess of (I) $400 million over (II) any
amounts directly paid or payable by St. ▇▇▇▇ (x) to investors in the Public
Offering and the ESU Offering in respect of claims against St. ▇▇▇▇ arising
under any Registration Statement or Prospectus, (y) to Renaissance Re in
connection with the Renaissance Re Investment, and/or (z) the underwriters of
the Public Offering and the ESU Offering pursuant to the indemnification,
contribution and/or expense reimbursement obligations of St. ▇▇▇▇ arising under
the underwriting agreements for the Public Offering and the ESU Offering. For
the avoidance of doubt, the limitation in clause (I) of the preceding sentence
applies to the Public Offering, the ESU Offering and the RenaissanceRe
Investment taken together and not individually. In the event the Company is
obligated to indemnify RenaissanceRe pursuant to Section 10.13 of the Investment
Agreement with respect to "Damages" arising out of St. ▇▇▇▇ Information or
Shared Information, St. ▇▇▇▇ and the Company agree that (i) the payment by St.
▇▇▇▇ to the Company of any amounts so owing shall be segregated from other
indemnification payments (if any) made by St. ▇▇▇▇ to the Company so that they
may be available to Renaissance Re (such segregated amounts not to exceed $40
million), and (ii) no payments shall be made by St. ▇▇▇▇ to any Company
Registration Indemnitees or others that in the aggregate exceed $360 million
prior to the satisfaction by St. ▇▇▇▇ of any obligation to indemnify the Company
in order to satisfy indemnification of any "Damages" prior to the termination
(pursuant to Section 10.06) of St. Paul's obligations under this Section 10.02.
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(f) Notwithstanding anything to the contrary in this Agreement or any
of the Ancillary Agreements, in the event of one or more Company Registration
Indemnitees make a claim for the indemnification, contribution or reimbursement
of expenses against St. ▇▇▇▇ (including with respect to any "Damages" owed by
the Company to Renaissance Re pursuant to Section 10.13 of the Investment
Agreement), St. Paul's obligation to indemnify, contribute to, or reimburse the
Company Registration Indemnitees (including with respect to any "Damages" owed
by the Company to Renaissance Re pursuant to Section 10.13 of the Investment
Agreement) under Section 10.02 with respect to such claim is conditioned on, and
only payable upon, the concurrent settlement or resolution of all claims then
outstanding at the time of such settlement or resolution against St. ▇▇▇▇ (other
than claims by the underwriters of the Public Offering and the ESU Offering)
which are then subject to the limitation on liability set forth in Section
10.02(e) provided St. ▇▇▇▇ continues in good faith to seek and assist in the
resolution or settlement of all such claims.
(g) Notwithstanding anything to the contrary in this Agreement or any
of the Ancillary Agreements, each St. ▇▇▇▇ Registration Indemnitee and each
Company Registration Indemnitee shall pay the costs and expenses of its own
legal counsel retained in connection with this Section 10.02, as such costs and
expenses are incurred, in each case subject to being reimbursed by the
applicable indemnifying party upon the final settlement or resolution of all
investor claims against the Company, St. ▇▇▇▇ and the Underwriters, in
accordance with this Section.
SECTION 10.03 LIMITATIONS ON INDEMNIFICATION OBLIGATIONS. In addition
to the limitation set forth in Section 10.02(e) with respect to St. Paul's
aggregate liability, the amount which either party hereto (an "INDEMNIFYING
PARTY") is or may be required to pay to any other party (an "INDEMNITEE")
pursuant to Sections 10.01 and 10.02 shall be reduced (including, without
limitation, retroactively) by any Insurance Proceeds or any other amounts
actually recovered by or on behalf of such Indemnitee, in reduction of the
related Loss. If an Indemnitee has received the payment required by this
Agreement from an Indemnifying Party in respect of any Loss and has subsequently
actually received Insurance Proceeds or other amounts in respect of such Loss,
then such Indemnitee shall promptly pay to such Indemnifying Party a sum equal
to the amount of such Insurance Proceeds or other amounts actually received (up
to but not in excess of the amount of any indemnity payment made hereunder). An
insurer who would otherwise be obligated to pay any claim shall not be relieved
of the responsibility with respect thereto, or, solely by virtue of the
indemnification provisions hereof, have any subrogation rights with respect
thereto, it being expressly understood and agreed that no insurer or any other
third party shall be entitled to a "windfall" (I.E., a benefit they would not be
entitled to receive in the absence of the indemnification provisions) by virtue
of the indemnification provisions hereof.
SECTION 10.04 PROCEDURES FOR INDEMNIFICATION OF THIRD PARTY CLAIMS.
Procedures for indemnification of Third Party Claims shall be as follows:
(a) If an Indemnitee receives notice or otherwise learns of the
assertion by a Person (including, without limitation, any governmental entity)
who is not a party to this Agreement or an Affiliate thereof, of any claim or of
the commencement by any such Person of any Action (a "THIRD PARTY CLAIM") with
respect to which an Indemnifying Party may be obligated to provide
indemnification pursuant to Section 10.01 or 10.02 of this Agreement, such
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Indemnitee shall give such Indemnifying Party written notice thereof promptly
after becoming aware of such Third Party Claim; PROVIDED that the failure of any
Indemnitee to give notice as provided in this Section 10.04(a) shall not relieve
the Indemnifying Party of its obligations under this Article V, except to the
extent that such Indemnifying Party is prejudiced by such failure to give
notice. Such notice shall describe the Third Party Claim in as much detail as is
reasonably possible and, if ascertainable, shall indicate the amount (estimated
if necessary) of the Loss that has been or may be sustained by such Indemnitee.
(b) An Indemnifying Party may elect to defend or to seek to settle or
compromise, at such Indemnifying Party's own expense and by such Indemnifying
Party's own counsel, any Third Party Claim. Within 30 days of the receipt of
notice from an Indemnitee in accordance with Section 10.04(a) (or sooner, if the
nature of such Third Party Claim so requires), the Indemnifying Party shall
notify the Indemnitee of its election whether the Indemnifying Party will assume
responsibility for defending such Third Party Claim, which election shall
specify any reservations or exceptions. After notice from an Indemnifying Party
to an Indemnitee of its election to assume the defense of a Third Party Claim,
such Indemnifying Party shall not be liable to such Indemnitee under this
Article X for any legal or other expenses (except expenses approved in advance
by the Indemnifying Party) subsequently incurred by such Indemnitee in
connection with the defense thereof; PROVIDED that each Indemnitee may elect to
participate in such defense, at such Indemnitee's own expense and by such
Indemnitee's own counsel (which for the avoidance of doubt shall act at the
Indemnitee's expense) but PROVIDED FURTHER that an Indemnifying Party and each
Indemnitee may agree to retain common counsel. If the defendants in any such
claim include both the Indemnifying Party and one or more Indemnitees and (i) in
any Indemnitee's reasonable judgment a conflict of interest between one or more
of such Indemnitees and such Indemnifying Party exists in respect of such claim,
(ii) if the identity of the Person that is the appropriate Indemnifying Party or
Indemnitee in respect of such claim is in dispute, (iii) if an Indemnitee
reasonably asserts that it believes that it may not be indemnified by the
Indemnifying Party for its entire exposure in respect of a Third Party Claim, or
(iv) if the Indemnifying Party shall have assumed responsibility for such claim
with reservations or exceptions that would materially prejudice such
Indemnitees, such Indemnitees shall have the right to employ separate counsel to
represent such Indemnitees and in that event the reasonable fees and expenses of
such separate counsel (but not more than one separate counsel for all such
Indemnitees reasonably satisfactory to the Indemnifying Party) shall be paid by
such Indemnifying Party subject to Section 10.02(g). If an Indemnifying Party
elects not to assume responsibility for defending a Third Party Claim, or fails
to notify an Indemnitee of its election as provided in this Section 10.04(b),
such Indemnitee may defend or (subject to the remainder of this Section 10.04(b)
and Section 10.04(d)) seek to compromise or settle such Third Party Claim at the
expense of the Indemnifying Party. Neither an Indemnifying Party nor an
Indemnitee shall consent to entry of any judgment or enter into any settlement
of any Third Party Claim which does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such Indemnitee, in the case of a
consent or settlement by an Indemnifying Party, or the Indemnifying Party, in
the case of a consent or settlement by the Indemnitee, of a written release from
all liability in respect to such Third Party Claim.
(c) If an Indemnifying Party chooses to defend any Third Party Claim,
the Indemnitee shall make available at reasonable times to such Indemnifying
Party any personnel or any books, records or other documents within its control
or which it otherwise has the ability to
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make available that are necessary or appropriate for such defense, settlement or
compromise, and shall otherwise cooperate in a reasonable manner in the defense,
settlement or compromise of such Third Party Claim.
(d) Notwithstanding anything in this Section 10.04 to the contrary,
an Indemnifying Party may not settle or compromise any claim without the prior
written consent of the Indemnitee; PROVIDED that consent to settlement or
compromise shall not be unreasonably withheld or delayed and PROVIDED FURTHER
that St. Paul's aggregate liability with respect to any such settlement or
compromise shall be subject to the provisions of Section 10.02(e) and (f). If an
Indemnifying Party notifies the Indemnitee in writing of such Indemnifying
Party's desire to settle or compromise a Third Party Claim on the basis set
forth in such notice (provided that such settlement or compromise includes as an
unconditional term thereof the giving by the claimant or plaintiff of a written
release of the Indemnitee from all liability in respect thereof) and the
Indemnitee shall notify the Indemnifying Party in writing that such Indemnitee
declines to accept any such settlement or compromise, such Indemnitee may
continue to contest such Third Party Claim, free of any participation by such
Indemnifying Party, at such Indemnitee's sole expense. In such event, the
obligation of such Indemnifying Party to such Indemnitee with respect to such
Third Party Claim shall be equal to (i) the costs and expenses of such
Indemnitee prior to the date such Indemnifying Party notifies such Indemnitee of
the offer to settle or compromise (to the extent such costs and expenses are
otherwise indemnifiable hereunder) PLUS (ii) the lesser of (A) the amount of any
offer of settlement or compromise which such Indemnitee declined to accept and
(B) the actual out-of-pocket amount such Indemnitee is obligated to pay
subsequent to such date as a result of such Indemnitee's continuing to pursue
such Third Party Claim.
(e) In the event of payment by an Indemnifying Party to any
Indemnitee in connection with any Third Party Claim, such Indemnifying Party
shall be subrogated to and shall stand in the place of such Indemnitee as to any
events or circumstances in respect of which such Indemnitee may have any right
or claim relating to such Third Party Claim against any claimant or plaintiff
asserting such Third Party Claim or against any other Person. Such Indemnitee
shall cooperate with such Indemnifying Party in a reasonable manner, and at the
cost and expense of such Indemnifying Party, in prosecuting any subrogated right
or claim.
SECTION 10.05 REMEDIES CUMULATIVE. The remedies provided in this
Article X shall be cumulative and shall not preclude assertion by an Indemnitee
of any other rights at law or in equity or the seeking of any and all other
remedies against any Indemnifying Party.
SECTION 10.06 SURVIVAL OF INDEMNITIES. The obligations of the Company
and St. ▇▇▇▇ under this Article X shall survive indefinitely, PROVIDED, HOWEVER,
that St. Paul's obligations under Section 10.02 shall survive until the second
anniversary of the Closing Date.
ARTICLE XI
ACCESS TO INFORMATION; FURTHER ASSURANCES
SECTION 11.01 ACCESS TO INFORMATION. From and after the Closing Date,
St. ▇▇▇▇ shall afford to the Company and its Post-Closing Subsidiaries and their
respective
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authorized accountants, counsel and other designated representatives
(collectively, "REPRESENTATIVES") reasonable, and reasonably prompt, access
(including using commercially reasonable efforts to give access to Persons
possessing information) during normal business hours to all data and information
that is specifically described in writing (collectively, "INFORMATION") within
the possession of St. ▇▇▇▇ or any Post-Closing Subsidiary of St. ▇▇▇▇ relating
to the Company or any Post-Closing Subsidiary of the Company, insofar as such
Information is reasonably required by the Company or such Post-Closing
Subsidiary including in connection with its preparation of regulatory reports
and filings, PROVIDED, that St. ▇▇▇▇ shall not be obliged to provide information
concerning contracts with an inception date of prior to January 1, 2002 other
than: (i) copies of the underwriting files for contracts that were underwritten
by St. ▇▇▇▇ Re in the 1997, 1998, 1999, 2000 and 2001 underwriting years and
that are within the Transferred Lines or the Excluded Classes as set forth in
Schedule 11.01; (ii) aggregate loss data for contracts that are within the
Transferred Lines or the Excluded Classes upon the Company's representation that
such information is required in connection with its business; and (iii) St. ▇▇▇▇
will also provide access to the underwriting files (but shall not provide copies
thereof) for contracts written by St. ▇▇▇▇ Re within the Transferred Lines or
the Excluded Classes in underwriting years prior to 1997 upon the Company's
representation that it requires access to such information in connection with
its business. For greater certainty, St. ▇▇▇▇ shall provide monthly aggregate
claims information relating to any individual contract having an inception date
that is prior to January 1, 2002; however, nothing herein shall require that St.
▇▇▇▇ share or provide any information concerning individual claims. Similarly,
from and after the Closing Date, the Company shall afford to St. ▇▇▇▇, any
Post-Closing Subsidiary of St. ▇▇▇▇ and their respective Representatives
reasonable access (including using commercially reasonable efforts to give
access to Persons possessing information) during normal business hours to
Information within the Company's or any Post-Closing Subsidiary of the Company's
possession that is specifically described in writing relating to St. ▇▇▇▇ or any
Post-Closing Subsidiary of St. ▇▇▇▇, insofar as such Information is reasonably
required by St. ▇▇▇▇ or a Post-Closing Subsidiary of St. ▇▇▇▇. Information may
be requested under this Article XI for, without limitation, audit, accounting,
claims, litigation (other than any claims or litigation between the parties
hereto or their Subsidiaries) and tax purposes, as well as for purposes of
fulfilling disclosure and reporting obligations and for performing this
Agreement and the transactions contemplated hereby.
SECTION 11.02 RETENTION OF RECORDS. Each of St. ▇▇▇▇ and the Company
and their respective Post-Closing Subsidiaries shall retain, and shall cause
their respective Post-Closing Subsidiaries to retain following the Closing Date,
for a period consistent with the longer of their respective document retention
policies in effect at such time or for such longer period as may be required by
applicable law or regulations, respectively, all significant information
relating to the business of the other and the other's Subsidiaries or the
obligations of the other or the other's Subsidiaries. In addition, after the
expiration of the applicable retention periods, such information may not be
destroyed or otherwise disposed of at any time, unless, prior to such
destruction or disposal, (a) the party proposing to destroy or otherwise dispose
of such information provides no less than 30 days' prior written notice to the
other, specifying in reasonable detail the information proposed to be destroyed
or disposed of, and (b) if a recipient of such notice shall request in writing
prior to the scheduled date for such destruction or disposal that any of the
information proposed to be destroyed or disposed of be delivered to such
recipient, the party proposing the destruction or disposal shall promptly
arrange for the delivery of such information as was requested at the expense of
the party requesting such information.
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SECTION 11.03 ST. ▇▇▇▇ CONFIDENTIAL INFORMATION.
(a) Neither the Company, nor any of its Post-Closing Subsidiaries nor
any of their respective directors, officers and agents may disclose any
information of a confidential nature received from St. ▇▇▇▇ (the "ST. ▇▇▇▇
CONFIDENTIAL INFORMATION").
(b) St. ▇▇▇▇ Confidential Information shall not include information,
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.
(c) If the Company, any of its Post-Closing Subsidiaries or any of
their respective directors, officers or agents 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 St ▇▇▇▇ Confidential
Information, the Company shall provide St. ▇▇▇▇ with prompt written notice of
the request, requirement, subpoena or order to permit St. ▇▇▇▇ (if it so elects)
to seek an appropriate protective order preventing or limiting disclosure. If St
▇▇▇▇ seeks such an order or takes other steps to avoid or limit disclosure, the
Company shall cooperate with St. ▇▇▇▇ at St. Paul's expense. If, in the absence
of such protective order, the Company is compelled to disclose St. ▇▇▇▇
Confidential Information, the Company may disclose such St. ▇▇▇▇ Confidential
Information without liability hereunder.
(d) The Company agrees that money damages would not be a sufficient
remedy for any breach of this Section 11.03 by the Company or any of its
Post-Closing Subsidiaries or any of their respective directors, officers or
agents, and that, in addition to all other remedies, St. ▇▇▇▇ shall be entitled
to specific performance and injunctive or other equitable relief as a remedy for
any such breach.
SECTION 11.04 FURTHER ASSURANCES; NO AGENCY; SPECIFIC PERFORMANCE. If
at any time after the Closing Date any further action is reasonably necessary or
advisable to carry out the purposes of this Agreement or any Ancillary
Agreement, the proper officers of each party to this Agreement shall take all
such action or cause the applicable Post-Closing Subsidiaries to take all such
action. Each of St. ▇▇▇▇ and its Post-Closing Subsidiaries and the Company and
its Post-Closing Subsidiaries shall use its commercially reasonable efforts to
obtain all consents and approvals, to enter into all amendatory agreements and
to make all filings and applications that may be required for the consummation
of the transactions contemplated by this Agreement and the Ancillary Agreements,
including, without limitation, all applicable governmental and regulatory
filings. Under no circumstances does this Agreement or any of the Ancillary
Agreements create an agency relationship between St. ▇▇▇▇ and the Company,
except to the extent specified in any such Ancillary Agreement. The parties each
agree and acknowledge that remedies at law for any breach of their obligations
under this Section 11.04 are inadequate and that in addition thereto each party,
as applicable, shall be entitled to seek equitable relief, including injunction
and specific performance, in the event of any such breach.
ARTICLE XII
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PRE-EMPTIVE RIGHTS; REPURCHASE PROGRAMS; TRANSFER RESTRICTIONS;
STANDSTILL
SECTION 12.01 PRE-EMPTIVE RIGHTS. (a) If the Company proposes to issue
(a "DILUTIVE TRANSACTION") any Common Shares or any securities convertible into
or exchangeable for or carrying in any way the right to acquire Common Shares
(the "NEW SECURITIES"), St. ▇▇▇▇ will have the right to subscribe for up to such
number of New Securities as is necessary to maintain St. Paul's beneficial
ownership interest in the Company at the same percentage owned immediately prior
to the Dilutive Transaction (assuming conversion or exchange of the New
Securities; PROVIDED, HOWEVER, that St. ▇▇▇▇ shall not have a right to subscribe
for any New Securities if the ownership of such New Securities would cause St.
▇▇▇▇ to be a "United States 25% Shareholder" (as defined in the bye-laws of the
Company). The precise number of New Securities to be issued to St. ▇▇▇▇ will be
rounded up to the nearest round lot number. For the avoidance of doubt, the
issuance of Common Shares upon the settlement of the Purchase Contracts forming
part of the Units is deemed to be a Dilutive Transaction.
(b) If the Company proposes to issue New Securities, it shall give
St. ▇▇▇▇ 30 days written notice of its intention, describing the type and number
of New Securities and the price and terms upon which the Company proposes to
issue the same. St. ▇▇▇▇ shall have ten days from the date of receipt of any
such notice to agree to purchase up to St. Paul's PRO RATA share of New
Securities specified above for the same price paid to the Company in connection
with such Dilutive Transaction (i.e., less underwriting discounts and
commissions) by giving written notice to the Company and stating therein the
quantity of New Securities to be purchased; PROVIDED, HOWEVER, that in
connection with an Early Settlement (as such term is defined in the Purchase
Contract Agreement) of the Purchase Contracts pursuant to Section 5.10 of the
Purchase Contract Agreement, this Section 12.01(b) shall not apply, but the
Company shall give St. ▇▇▇▇ prompt written notice of such Early Settlement.
(c) In the event that St. ▇▇▇▇ fails to exercise its preemptive right
within the ten-day notice period, the Company shall have 120 days thereafter to
sell the New Securities with respect to which St. Paul's preemptive right was
not exercised, upon the same terms specified in the Company's notice to St. ▇▇▇▇
(except that underwriting discounts and commissions may be paid), PROVIDED that
the Company shall not be obligated to issue such New Securities. To the extent
the Company does not sell all the New Securities offered within such 120-day
period, the Company shall not thereafter issue or sell such New Securities
without first again offering such securities to St. ▇▇▇▇ in the manner provided
above.
(d) Notwithstanding anything in this Section 12.01 to the contrary,
the parties hereby agree that
(i) any New Securities issued pursuant to (A) any director or
employee benefit plans of the Company or (B) any acquisition transaction
engaged in by the Company are not to be deemed Dilutive Transactions and
that, consequently, no pre-emptive rights will attach with respect to New
Securities issued pursuant to clauses (A) and (B);
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(ii) St. Paul's pre-emptive rights to subscribe for New
Securities will terminate without any further action by either party hereto
at such time as St. ▇▇▇▇ beneficially owns less than 10% of the outstanding
Common Shares;
(iii) St. ▇▇▇▇ shall have no pre-emptive rights with respect to
any proposed Dilutive Transaction (A) to the extent a proposed Dilutive
Transaction is an underwritten public offering, the underwriters request a
reduction of the number of New Securities to be issued, or (B) prior to a
Dilutive Transaction a nationally recognized investment bank mutually
agreed by the parties advises St. ▇▇▇▇ and the Company in writing that St.
▇▇▇▇ exercising pre-emptive rights in connection with such Dilutive
Transaction would materially hinder or interfere with such proposed
Dilutive Transaction;
(iv) with respect to any New Securities that are securities
convertible into or exchangeable for or carrying in any way the right to
acquire Common Shares ("Convertible New Securities"), the terms of such
Convertible New Securities issuable to St. ▇▇▇▇ upon exercise of the
pre-emptive rights shall contain provisions which preclude conversion into
or exchange for the underlying Common Shares until such time as St. Paul's
ownership of Common Shares measured immediately after such conversion or
exchange is no more than 24.9% of the total number of outstanding Common
Shares. Ownership for this purpose will be determined under Section 958 of
the Internal Revenue Code of 1986, as amended (the "Code"). These special
limitations on conversions or exchanges shall lapse upon a transfer of the
Convertible New Securities by St. ▇▇▇▇ to a person with which St. ▇▇▇▇ has
no constructive ownership relationship under Section 958 of the Code; and
(v) St. ▇▇▇▇ shall have no pre-emptive rights in the event of
an issuance of Common Shares upon the conversion or exchange of New
Securities with respect to the issuance of which St. ▇▇▇▇ had pre-emptive
rights.
(e) (i) For so long as St. ▇▇▇▇ has the right to exercise any
pre-emptive rights pursuant to this Section 12.01, each party hereto shall use
its commercially reasonable efforts to obtain all authorizations, consents,
orders and approvals of all Governmental Authorities and officials that may be
or become necessary in connection with St. Paul's exercise of such rights, and
will cooperate reasonably with the other party in promptly seeking to obtain all
such authorizations, consents, orders and approvals. The parties hereto agree to
cooperate reasonably, complete and file any joint applications for any
authorizations from any Governmental Authorities reasonably necessary or
desirable to effectuate the transactions contemplated by this Section 12.01. The
parties hereto agree that they will keep each other apprised of the status of
matters relating to the exercise of the pre-emptive rights contemplated under
this Section 12.01, including reasonably promptly furnishing the other with
copies of notices or other communications received by the Company or St. ▇▇▇▇,
from all third parties and Governmental Authorities with respect to the
pre-emptive rights contemplated by this Section 12.01.
(ii) For so long as St. ▇▇▇▇ has the right to exercise any
pre-emptive rights pursuant to this Section 12.01, the Company and St. ▇▇▇▇
agree to reasonably
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promptly prepare and file, if necessary, any filing under the HSR Act with
the FTC and the Antitrust Division of the DOJ in order to enable St. ▇▇▇▇
to exercise such pre-emptive rights under this Section 12.01. Each party
hereby covenants to cooperate reasonably with the other such party to the
extent reasonably necessary to assist in making any reasonable supplemental
presentations to the FTC or the DOJ, and, if requested by the FTC or the
DOJ, to reasonably promptly amend or furnish additional information
thereunder.
(iii) Any reasonable out-of-pocket costs and expenses arising
in connection with actions taken pursuant to this Section 12.01(e) shall be
borne by St. ▇▇▇▇.
SECTION 12.02 SHARE BUY-BACK PROGRAMS. (a)In the event that the
Company determines to effect repurchases of its Common Shares (and, if
applicable, New Securities) in a repurchase program approved by its board of
directors, then St. ▇▇▇▇ must sell to the Company, on each day which any Common
Shares are so repurchased at a price equal to the average price of repurchases
by the Company on such day, such number of Common Shares necessary to limit St.
Paul's beneficial ownership interest in the Company to no more than 24.9% of the
outstanding Common Shares (on an Unadjusted Basis (as defined in the Company's
Bye-Laws)) after all such repurchases; PROVIDED, that St. ▇▇▇▇ ▇▇▇ require that
any repurchases from it by the Company must be at the average purchase price of
any repurchases effected by the Company on such day pursuant to Rule 10b-18
under the Exchange Act. The precise number of Common Shares to be repurchased by
the Company from St. ▇▇▇▇ will be rounded up to the nearest round lot number.
(b) Notwithstanding anything in this Section 12.02 to the contrary,
if (i) St. ▇▇▇▇ beneficially owns less than 24.9% of the outstanding Common
Shares on an Unadjusted Basis other than as a result of any voluntary sale of
Common Shares by St. ▇▇▇▇, and (ii) St. ▇▇▇▇ thereafter purchases Common Shares
to maintain such beneficial ownership level at 24.9% either (A) in accordance
with its pre-emptive rights under Section 12.01 or (B) in the open market, in
each case within 60 days after suffering such dilution, then any repurchases by
the Company of its Common Shares in the period that is six months plus one day
from the trade date of any such purchase by St. ▇▇▇▇ in accordance with clause
(A) or (B) may only be effected in a manner that either does not trigger St.
Paul's obligation pursuant to Section 12.02(a) to sell back Common Shares to the
Company, or would not result in any requirement by St. ▇▇▇▇ to disgorge profits
pursuant to Section 16(b) of the Exchange Act.
SECTION 12.03 TRANSFER RESTRICTIONS; STANDSTILL PROVISIONS. (a) St.
▇▇▇▇ ▇▇▇ not directly or indirectly, sell, transfer or otherwise dispose of more
than 9.9% of the Common Shares outstanding at the time of such sale, transfer or
other disposition to any Person that generates 50% or more of its gross revenue
in its most recent fiscal year for which financial statements are available, by
writing property or casualty insurance or reinsurance, except in the following
circumstances: (i) in connection with any tender offer or exchange offer made to
all holders of outstanding Common Shares; (ii) to any Wholly Owned Post-Closing
Subsidiary of St. ▇▇▇▇ provided that such subsidiary agrees in writing with the
Company to the same transfer restrictions as are contained in this Section
12.03; or (iii) in a transfer by operation of law upon consummation of a merger
or consolidation of St. ▇▇▇▇ into another Person.
-47-
(b) St. ▇▇▇▇ agrees that except as contemplated in this Agreement,
St. ▇▇▇▇ and its Subsidiaries will not, and St. ▇▇▇▇ will use its commercially
reasonable efforts to cause its Affiliates and any officer, employee, agent or
representative of St. ▇▇▇▇ or such Affiliates (collectively, the
"Representatives") to not, directly or indirectly, (i) advise or encourage any
party or entity with respect to the voting of any Voting Securities in an
attempt to cause a Change in Control of the Company, (ii) initiate or otherwise
solicit shareholders of the Company for the granting of any proxy or the
approval of one or more shareholder proposals, or induce any other party or
entity to seek any proxy or to initiate any shareholder proposal, that in any
case results or is designed to result in a Change in Control of the Company, or
(iii) directly or indirectly acquire, announce an intention to acquire, or agree
to acquire, by purchase or otherwise, beneficial ownership of any Voting
Securities, if, immediately after any such acquisition, St. ▇▇▇▇ or any
Subsidiary of St. ▇▇▇▇ would beneficially or of record own, in the aggregate,
more than 24.9% of the Voting Securities then outstanding, provided, that
nothing herein shall limit the ability of St. ▇▇▇▇ or any of its Affiliates to
discuss any matter, including a Change in Control of the Company, with
RenaissanceRe or any of its Affiliates. A "Change in Control" of the Company is
deemed to have occurred if (i) any person or group (as defined for purposes of
Section 13 of the Securities Exchange Act of 1934, as amended) (excluding the
Company or any Subsidiary thereof) becomes the beneficial owner of more than 50%
of the outstanding equity securities of the Company representing the right to
vote for the election of directors or (ii) there shall occur a merger,
consolidation or other business combination in which the Company is acquired
(unless the shareholders of the Company immediately before such business
combination own, directly or indirectly, immediately following such business
combination, at least a majority of the combined voting power of the entity
resulting from such business combination).
(c) St. ▇▇▇▇ shall use its commercially reasonable efforts to cause
all Voting Securities beneficially owned directly or indirectly by it or any
Subsidiary to be present for quorum purposes, in person or represented by proxy
at every meeting of holders of Common Shares (or, if applicable, in any matter
to be acted upon by written consent of shareholders without a meeting).
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01 SURVIVAL. All representations, covenants and agreements
contained or provided for herein shall remain operative and in full force and
effect regardless of any investigation made by or on behalf of the party
benefiting from any such covenant or agreement, and shall survive the execution
of this Agreement.
SECTION 13.02 GOVERNING LAW; DISPUTE RESOLUTION.
(a) GOVERNING LAW. This Agreement shall be governed by, and construed
in accordance with, the laws of the state of
New York, without regard to its
conflict of laws principles.
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(b) DISPUTE RESOLUTION.
(i) MANDATORY ARBITRATION. The parties hereto shall promptly
submit any dispute, claim, or controversy arising out of or relating to
this Agreement, the Ancillary Agreements (unless they specifically provide
otherwise) and/or the Transactions contemplated hereunder, including,
effect, validity, breach, interpretation, performance, or enforcement
(collectively, a "DISPUTE") to binding arbitration in
New York,
New York at
the offices of Judicial Arbitration and Mediation Services, Inc. ("JAMS")
before an arbitrator (the "ARBITRATOR") in accordance with JAMS'
Arbitration Rules and Procedures and the Federal Arbitration Act, 9 U.S.C.
Sections 1 ET SEQ. The Arbitrator shall be a former federal judge selected
from JAMS' pool of neutrals. The parties agree that, except as otherwise
provided herein respecting temporary or preliminary injunctive relief,
binding arbitration shall be the sole means of resolving any Dispute.
(ii) COSTS. The costs of the arbitration proceeding and any
proceeding in court to confirm or to vacate any arbitration award or to
obtain temporary or preliminary injunctive relief as provided in paragraph
(iii) below, as applicable (including, without limitation, actual
attorneys' fees and costs), shall be borne by the unsuccessful party and
shall be awarded as part of the Arbitrator's decision, unless the
Arbitrators shall otherwise allocate such costs in such decision.
(iii) INJUNCTIVE RELIEF. Nothing herein prevents the parties
hereto from seeking or obtaining temporary or preliminary injunctive relief
in a court for any breach or threatened breach of any provision hereof
pending the hearing before and determination of the Arbitrator. The parties
hereby agree that they shall continue to perform, or cause their
Post-Closing Subsidiaries to perform, any and all obligations under this
Agreement, and the Ancillary Agreements, including, without limitation, the
Master Services Agreement, pending the hearing before and determination of
the Arbitrator, it being agreed and understood that the failure to so
perform will cause irreparable harm to each party and its Affiliates and
that the putative breaching party has assumed all of the commercial risks
associated with such breach or threatened breach of any provision hereof by
such party.
(iv) COURTS. The parties agree that the State and Federal
courts in The City of
New York shall have jurisdiction for purposes of
enforcement of their agreement to submit Disputes to arbitration and of any
award of the Arbitrator.
SECTION 13.03 NOTICES. All notices, requests, claims, demands and
other communications hereunder and under the Ancillary Agreements 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 facsimile transmission addressed as follows (or to such other
address as a party may designate by written notice to the others) and shall be
deemed given on the date on which such notice is received:
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If to St.▇▇▇▇:
The St. ▇▇▇▇ Companies, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: General Counsel
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Company:
Platinum Underwriters Holdings, Ltd.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
Attention: Secretary
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
SECTION 13.04 AMENDMENT AND MODIFICATION. The parties may by written
agreement, subject to any regulatory approval as may be required, (a) extend the
time for the performance of any of the obligations or other acts of the parties
hereto; (b) waive any inaccuracies in the documents delivered pursuant to this
Agreement, and (c) waive compliance with or modify, amend or supplement any of
the agreements contained in this Agreement or waive or modify performance of any
of the obligations of any of the parties hereto. This Agreement may not be
amended or modified except by an instrument in writing duly signed on behalf of
the parties hereto.
SECTION 13.05 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
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SECTION 13.06 NO THIRD PARTY BENEFICIARIES. Except for the provisions
of Articles VIII and X relating to Indemnities, this Agreement is solely for the
benefit of the parties hereto and shall not be deemed to confer upon third
parties any remedy, claim, reimbursement, claim of action or other right in
excess of those existing without reference to this Agreement.
SECTION 13.07 HEADINGS. The Article and Section headings contained in
this Agreement are for reference purposes only and shall not in any way affect
the meaning or interpretation of this Agreement.
SECTION 13.08 SEVERABILITY. To the extent any provision of this
Agreement shall be invalid or unenforceable, it shall be considered deleted
herefrom and the remaining provisions of this Agreement shall be unaffected and
shall continue in full force and effect.
SECTION 13.09 WAIVER. No failure by any party 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.
SECTION 13.10 EXPENSES. Except as otherwise specified in this
Agreement or the Ancillary Agreements, all costs and expenses, including,
without limitation, fees and disbursements of counsel, financial advisors and
accountants, incurred in connection with this Agreement, the Ancillary
Agreements and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Closing Date shall have
occurred.
SECTION 13.11 PUBLIC ANNOUNCEMENT. No 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 cooperate as to the timing and contents of any such
press release or public announcement.
SECTION 13.12 ENTIRE AGREEMENT. This Agreement, the Ancillary
Agreements and any other written document executed by and between St. ▇▇▇▇ and
the Company that specifically states that such document is an Ancillary
Agreement, constitute the entire agreement of the parties hereto with respect to
the subject matter hereof and thereof and supersede all prior agreements and
undertakings, both written and oral, between St. ▇▇▇▇ and the Company with
respect to the subject matter hereof and thereof.
SECTION 13.13 ASSIGNMENT OF THIS AGREEMENT. Neither party may assign
this Agreement by operation of law or otherwise without the express written
consent of the other party; PROVIDED, HOWEVER, this Agreement may be assigned by
operation of law or otherwise without the express written consent of the St.
▇▇▇▇ and the Company to their respective Post-Closing Subsidiaries so long as
such assignment does not relieve the assigning party of liability hereunder.
SECTION 13.14 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
shall constitute one and the same instrument.
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SECTION 13.15 LIMIT ON RECOVERY FROM COMPANY DIRECTORS AND OFFICERS.
In any legal action commenced by St. ▇▇▇▇ against the Company, any of its
Post-Closing Subsidiaries or the officers and/or directors of the Company or
such Post-Closing Subsidiaries, St. ▇▇▇▇ will not recover from any officer or
director of any of the Company or its Post-Closing Subsidiaries any amount that
is in excess of the amount the Company and/or such Post-Closing Subsidiaries is
able to indemnify such officer or director, other than in the circumstance where
such indemnification of such officer or director by the Company and/or such
Post-Closing Subsidiaries is restricted due to such officer or director having
engaged in fraud, intentional misconduct or criminal acts. St. ▇▇▇▇ and the
Company agree that the officers and directors of the Company and its
Post-Closing Subsidiaries are third party beneficiaries of the agreement set
forth in this Section 13.15.
SECTION 13.16 TRANSITION EXPENSES. St. ▇▇▇▇ agrees to reimburse the
Company for up to $4,500,000 of expenses of the type referenced in
correspondence from St. ▇▇▇▇ to the Company as of the date hereof, incurred by
the Company or any of its Post-Closing Subsidiaries in connection with its first
year of operations following the Closing. Such reimbursements are payable within
10 Business Days following receipt by St. ▇▇▇▇ from the Company of documentation
reasonably satisfactory to St. ▇▇▇▇ evidencing the Company's payment of any such
expenses.
-52-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the day and year first above written.
THE ST. ▇▇▇▇ COMPANIES, INC.
By:
--------------------------
Name:
Title:
PLATINUM UNDERWRITERS HOLDINGS, LTD.
By
---------------------------
Name:
Title:
[INSERT EXHIBITS 3.01(a) - 3.04(c)]
Exhibit 3.04(b)
▇▇▇▇ of Sale and Assignment
[ ], 2002
KNOW ALL MEN BY THESE PRESENTS that pursuant to that certain
Formation
and Separation Agreement, dated as of [ ], 2002 (the "
FORMATION AND
SEPARATION AGREEMENT"), among [St. ▇▇▇▇ Entity], a [ ] corporation
("SELLER"), and Platinum Underwriters Holdings, Ltd., a Bermuda company
("BUYER"), Seller, for good and valuable consideration as recited in the
Formation and Separation Agreement, the receipt and sufficiency of which are
hereby acknowledged, does hereby grant, sell, convey, transfer, assign and
deliver to Buyer, its successors and assigns, free and clear of any Encumbrances
(except for those Encumbrances that may arise solely due to the status of Buyer
or any of its Affiliates), any and all rights, title and interest of Seller in
and to the Transferred Assets (including, without limitation, the Platinum US
Shares and the Employment Agreements), to have and to hold unto Buyer, its
successors and assigns, forever, in full satisfaction of Seller's obligations
under Section 3.04(b) of the
Formation and Separation Agreement. Capitalized
terms used but not defined herein shall have the respective meanings ascribed to
such terms in the
Formation and Separation Agreement.
This ▇▇▇▇ of Sale and Assignment is intended to implement the
provisions of Section 3.04(b) of the
Formation and Separation Agreement and
shall not be construed to enhance, extend or limit the rights or obligations of
Seller or Buyer thereunder. To the extent any provision of this instrument is
inconsistent with the
Formation and Separation Agreement, the provisions of the
Formation and Separation Agreement shall control.
THIS ▇▇▇▇ OF SALE AND ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK WITHOUT REGARD TO ITS
CONFLICT OF LAWS PRINCIPLES.
This ▇▇▇▇ of Sale and Assignment may be executed and delivered
(including by facsimile delivery) in one or more counterparts, each of which
shall be deemed to be an original by the parties executing such counterpart, but
all of which shall be considered one and the same instrument.
(SIGNATURE PAGE FOLLOWS)
IN WITNESS WHEREOF, Seller has caused this instrument to be executed
by its duly authorized officer as of the date first written above.
[ST. PAUL ENTITY]
By:
---------------------------
Name:
Title:
Accepted and Agreed
PLATINUM UNDERWRITERS HOLDINGS, LTD.
By:
------------------------------
Name:
Title
-2-
Schedule 1.01
LIST OF CLASSES INCLUDED IN THE TRANSFERRED LINES
THE BUSINESS THAT WILL BE TRANSFERRED INTO PLATINUM RE IS DEFINED BY ALL
BUSINESS INCEPTING IN THE 2002 UNDERWRITING YEAR AND BELONGING TO THE INCLUDED
CLASSES LISTED BELOW.
New York Classes
----------------
1101 PROPERTY TREATY P-R, NY
1102 PROPERTY TREATY XS - RISK, NY
1103 PROPERTY TREATY EXCESS - CAT, NY
1104 RETROCESSIONS, NY
1105 CROP-HAIL, NY
1106 CASUALTY TREATY PRO-RATA, NY
1107 CAS FIRST DOLLAR WC, NY
1108 CASUALTY TREATY EXCESS, NY
1109 CAS FIRST DOLLAR AUTO, NY (NON-PROGRAM)
1110 LPIC, NY
1111 CAS FIRST DOLLAR GL/OTHER, NY (NON-PROGRAM)
1112 NA ACCIDENT & HEALTH, NY
1128 CASUALTY TREATY EXCESS - CLASH, NY
1201 INTL PROPERTY PRO RATA, NY
1202 INTL PROPERTY TREATY EXCESS - RISK, NY
1203 INTL PROPERTY TREATY EXCESS - CAT, NY
1204 INTL CASUALTY TREATY, NY
1205 INTL MOTOR PRO-RATA, NY
1206 INTL ACCIDENT & HEALTH, NY
1298 INTL PROP OUTWARD RETRO
1301 MARINE TREATY PRO RATA, NY
1302 MARINE TREATY EXCESS, NY
1303 MARINE FACULTATIVE, NY
1307 SATELLITE XS, NY
1500 NON-TRADITIONAL
1800 CCA AIG QS
2201 INTL PROPERTY TREATY EXCESS - RISK MIAMI
2202 INTL PROPERTY PRO RATA, MIAMI
2203 INTL CASUALTY TREATY, MIAMI
2204 MARINE TREATY PRO RATA, MIAMI
2205 INTL MOTOR PRO-RATA, MIAMI
London Classes
--------------
L06 N. AM MED MAL
L08 N AM CASUALTY TREATY
L11 N. AM CAT
L17 N AM PROPERTY P-R
L18 N AM PROPERTY PER RISK
L74 MED MAL PR
L91 N. AM CROP
L21 INT'L MARINE P-R
L23 INT'L PROPERTY P-R
L24 INT'L PROPERTY PER RISK
L25 INT'L CAT
L26 INT'L MOTOR XS
L27 INT'L CASUALTY EXCESS
L32 INT'L MARINE XL
L33 U.K. PROPERTY PROPORTIONAL TREATY
L34 INT'L CASUALTY P-R
L79 SATELITE XS
L80 INT'L MOTOR LIABILITY PR
L88 INT'L NT 1999
L89 NA NT 1999
L40 N AM MOTOR PRO RATA
L41 N AM MOTOR XL
L43 N AM GL PRO RATA
L44 N AM GL XL
L48 N AM PI XL
L63 N AM PI PRO RATA
B21 BRUSSELS MARINE PR
B23 BRUSSELS INT'L PROPERTY P-R
B24 BRUSSELS INT'L PROPERTY PER RISK
B25 BRUSSELS INT'L CAT
B26 BRUSSES INT'L MOTOR
B27 BRUSSELS INT'L LIAB XS
B32 BRUSSELS INT'L MARINE XS
B34 BRUSSELS INT'L LIAB PR
B55 BRUSSELS INT'L PERSONAL ACC P-R
B60 BRUSSELS INT MOTOR PHYSICAL DAMAGE PR
B61 BRUSSELS ENGINEERING PR
B62 BRUSSELS ENGINEERING XL
B80 BRUSSELS MOTOR PRO RATA
B88 BRUSSELS NON TRADITIONAL
M21 MUNICH - MARINE PR
M23 MUNICH - INT'L PROPERTY P-R
M24 MUNICH - INT'L PROPERTY PER RISK
M25 MUNICH - INT'L CAT
M26 MUNICH - INT'L MOTOR
M27 MUNICH - INT'L LIAB XS
M32 MUNICH - INT'L MARINE XS
M34 MUNICH INT'L LIABILITY PRO RATA
M55 MUNICH INT'L PROPORTIONAL PERSONAL ACCIDENT
M60 MUNICH INTERNATIONAL MOTOR PRO RATA TREATY (MAPD)
M61 MUNICH INTERNATIONAL ENGINEERING PRO RATA TREATY
M62 MUNICH INTERNATIONAL ENGINEERING EXCESS TREATY
LL1 L1 GTR SCALEBACK EUROPE CLASS 1
LL2 L2 GTR SCALEBACK EUROPE CLASS 2
LL3 L3 GTR SCALEBACK EUROPE CLASS 3
LL5 L5 GTR SCALEBACK EUROPE CLASS 5
LF1 F1 GTR SCALEBACK EUROPE CLASS 1
LF2 F2 GTR SCALEBACK EUROPE CLASS 2
LF3 F3 GTR SCALEBACK EUROPE CLASS 3
LF5 F5 GTR SCALEBACK EUROPE CLASS 5
-2-
SCHEDULE 2.01(b)
Transferred Personal Property
All furniture, fixtures, computers, equipment, machinery and other
tangible personal property present as of the Closing Date on the premises
subject to the subleases and assignments of leases listed in SECTION 3.01(i),
such personal property present on the premises leased by St. Paul at 2-1,
Kudan-kita 4-chome, Chiyoda-ku, Tokyo and leased by St. Paul at 52 Lime Street,
London, and all contracts and agreements relating to any of the foregoing.
SCHEDULE 2.01(c)
Intellectual Property
LICENSES TO BE
PRODUCT NAME TRANSFERRED TO PLATINUM
-------------------------------------------------------------------------------------
GRS SOFTWARE
Actuate 1
Actuate E-analysis 2 CPU Server
Actuate Designer 3 Workstation
Sybase's Powerbuilder 10
Sybase's Adaptive Server 4
Sybase's Replication Server 2
Sybase's EAS Enterprise 2
Sybase's EAS Developer 5
Merant's PVCS HP UX 5
Merant's PVCS WINTEL 5
Embarcadero's Rapid SQL for Sybase 6
Embarcadero's Rapid SQL Debugger for Sybase 6
Embarcadero's DB Artisan Oracle 3
Embarcadero's DB Artisan Sybase 3
SAS- Window Base 2
K-Station/Websphere Portal 2
Sametime 1
Quickplace 1
Domino.doc 1
Domino Workflow 1
Learning Space 1
Oracle Financials 1
Oracle Database 9i 1
Oracle HR 1
Oracle FSA Server 1
Panorama's Novaview Server
Panorama's Novaview Client
@Risk 2
Axco 1
Exceed 5 30
French Assistant 1
GHOST 6.3 180
Lotus 1.2.3 v9 63
Lotus Communications CEO Bundle 180
MS Project 98 4
MS FrontPage 98 2
MS Project 2000 6
MS Visual C++ v4.0
MS WinInstall 3
NAV Corporate Edition 7.x 180
LICENSES TO BE
PRODUCT NAME TRANSFERRED TO PLATINUM
-------------------------------------------------------------------------------------
OrgPlus 3
Rational Test Studio License (SQA) 5
Snagit 10
Spanish Assistant 3
Spanish Proffing Tools 13
XTND Connect PC / for Palms and other mobil devices 7
Visio 2000 3
WinBatch 1
ARCSERVE LICENSES :
Advaced Edition 7
Workgroup Edition 1
Disaster Recovery Option 3
Open File Agent 16
Client Agent 11
Lotus Notes Agent 6
SAN Option 4
Advanced Edition 10
Back up Agent for SQL 7
Open File Agent 47
Client Agent 30
Tape Library Option 5
Disaster Recovery Option 3
(ARCserve licenses require product specification)
CITRIX (▇▇▇▇▇▇▇.▇▇▇):
Citrix Load Balancing Services 1
Citrix Load Balancing Services 1
Citrix User License Pack 50
Citrix User License Pack 50
MetaFrame 1.8 - Feature Release 1 Upgrade 1
MetaFrame 1.8 - Feature Release 1 Upgrade 1
MetaFrame 1.8 for Win2000 with Subscription 15
MetaFrame 1.8 for Win2000 with Subscription 15
CITRIX (ALL OTHER):
Citrix User License Pack 100
Citrix Load Balancing Services 2
MetaFrame 1.8 - Feature Release 1 Upgrade 2
MetaFrame 1.8 for Win2000 Migration 2
LICENSES TO BE
PRODUCT NAME TRANSFERRED TO PLATINUM
-------------------------------------------------------------------------------------
(Citrix licenses require product specification and specific
license amounts
Citrix Load Balancing Services
Citrix Load Balancing Services
Citrix Load Balancing Services
Citrix Load Balancing Services
Citrix Secure ICA Services - North American Edition
MetaFrame 1.8 Feature Release 1 Upgrade
MetaFrame 1.8 Feature Release 1 Upgrade
MetaFrame 1.8 Feature Release 1 Upgrade
MetaFrame 1.8 Feature Release 1 Upgrade
MetaFrame 1.8 for Win2000 Migration
MetaFrame 1.8 for Win2000 Migration
MetaFrame 1.8 for Win2000 Migration with Subscription
MetaFrame 1.8 for Win2000 Migration with Subscription
MetaFrame 1.8 for Win2000 Migration with Subscription
MetaFrame 1.8 for Windows Migration with Subscription
MetaFrame 1.8 for Windows Migration with Subscription
MetaFrame 1.8 for Windows with Subscription
SOFTWARE LICENSES IN USE BY OPERATIONS:
(HP LICENSES REQUIRE FURTHER ANALYSIS)
HP UX 11.0 OS LTU 6
HP Mirror Disk 6
HP Glance Plus 6
HP C++ Compiler 2
HP C++ Developers Kit 2
HP OV OmniBack (Backup Manager LTU) 1
HP OV OmniBack (Backup Agent LTU) 8
HP OV NNM Enterprise 1
BMC SQL Backtrack for Sybase 3
BMC O-Backtrack for Oracle 2
Cisco Works 2000 1
Cisco Router IOS 11
Cisco PIX Unrestricted Bundle 8
Cisco PIX Failover Bundle 8
Cisco 3-DES 2
IBM 5722-SS1 Operating System/400 1
IBM 5722-CM1 Communications Utilities 1
IBM 5722-ST1 DB2 & SQL Development Kit 1
IBM 5722-WDS Websphere Development Studio 1
IBM 5722-DS1Business Graphics Utilities 1
IBM 5722-QU1 Query Tools 1
IBM 5722-DB1 S/38 Utilities 1
IBM 5722-XW1 Client Access 30
LICENSES TO BE
PRODUCT NAME TRANSFERRED TO PLATINUM
-------------------------------------------------------------------------------------
IBM 5722-PT1 Performance Tools 1
IBM 5733-SW1 Software Subscription (1 Year) 1
IBM PSF-400 Print Services Facility 1
MS ISA Server Enterprise Edition 1
Surf Control SuperScout 1
Winsyslog 1
RSA Ace Server 2
Verisign Certificates 2
Solaris 8 3
RedHat Linux 1
Avaya Audox VM Software(NY) 1
Avaya phone switch software(NY) 1
Avaya Audox VM Software(Morristown) 1
Avaya phone switch software(Morristown) 1
Lucent Merlin Messaging VM Software(Chicago) 1
Lucent Merlin Magix Switch Software(Chicago) 1
Precovery(Disaster Recovery software) 1
London Phone VM Software 1
London Phone Switch Software 1
NAI Sniffer 1
MICROSOFT PRODUCTS:
Office Pro Win32 English SA MVL 180
Windows Advanced Svr English SA MVL 28
Windows CAL English SA MVL 180
Windows CAL 2000 English MSELECT 180
SQL Server 2000 1 Server & 4 CALS
MS Services for Unix 3.0 2
GWI HELP DESK PACKAGE:
c.Support Starter - 1 Server & 5 Tech-user licenses 1
c.Support IT Remote Server 1
c.Support Additional Tech-User 13
CCL-Licenses -0-500 Customer 1
c.Support Starter-Pak 2yr Maintenance 1
c.Support IT Remote Server 2yr. Maintence 1
c.Support Additional Tech User 2yr Maint 13
c.Support source code 1
Quick Start 2-day any single application 1
On site training 2
SCHEDULE 2.01(g)
Exceptions to Renewal Rights
None.
SCHEDULE 2.01(i)
Information in Respect of Transferred Assets
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 Transferred Assets set
forth in Section 2.01(a) through (f), including, without limitation, the pro
forma tax and financial records of Platinum US, PROVIDED, HOWEVER, that the
information about the Transferred Assets shall not include minute books (other
than those of Platinum US) and other similar records and files including tax
returns.
SCHEDULE 2.01(j)
Information to be Provided in
Respect of Reinsurance Agreements
Copies of all Reinsurance Agreements, 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).
SCHEDULE 2.02
Information in Respect of Renewal Rights
Copies of the underwriting files and relevant detail (whether in hard
copy, electronic format, magnetic or other media) for contracts that were
underwritten by St. Paul Re in the 1997, 1998, 1999, 2000, and 2001 underwriting
years and the customer and brokers lists relevant to the Renewal Rights, in each
case relating to the Transferred Lines, 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 St. Paul reasonably believes to be attorney-client privileged
and any individual claims or loss information.
SCHEDULE 3.02(a)
EXPENSES PAYABLE BY THE COMPANY
1. Fees, disbursements and expenses of David Greenfield of KPMG LLP and his
team.
2. Fees, disbursements and expenses of Dewey Ballantine LLP.
3. Fees, disbursements and expenses of Conyers Dill & Pearman, Slaughter and
May and A&L Goodbody for work done in connection with the formation and
licensing of the Company, Platinum Bermuda, Platinum UK and Platinum
Regency, and all registration, filing, licensing and organization fees and
Taxes in connection therewith, except (i) any income, gains, franchise, and
similar taxes imposed on St. Paul or any of its Affiliates with respect to
the transfer of the Transferred Business and (ii) any conveyance Taxes
covered by Section 8.02.
4. Registration, filing and listing fees, including SEC, NASD and NYSE.
5. Printing and engraving expenses.
6. Underwriters' commission and fees as required by the Underwriting
Agreement.
7. Any costs in connection with qualification under state securities laws.
8. Transfers agent and registrar fees.
9. Fees and expenses associated with establishing a line of credit and
obtaining ratings.
10. Costs associated with the change of Platinum US's name.
11. 50% of the initial bonus and relocation expenses advanced by St. Paul to
the Company in respect of Michael Price.
12. Any other fees and expenses relating to the organization and initial public
offering of the Company and the operation of its business that St. Paul or
another party has not specifically agreed to pay.
SCHEDULE 3.02(b)
EXPENSES PAYABLE BY ST. PAUL
1. Fees, disbursements and expenses of KPMG LLP other than those specifically
allocated to the Company.
2. Fees, disbursements and expenses of Sullivan & Cromwell.
3. Fees, disbursements and expenses of Conyers Dill & Pearman, Slaughter and
May and A&L Goodbody for work on the intercompany agreements and for (i)
any income, gains, franchise, and similar taxes imposed on St. Paul or any
of its Affiliates with respect to the transfer of the Transferred Business
and (ii) any conveyance Taxes covered by Section 8.02.
4. Fees, disbursements and expenses of consultants engaged by St. Paul,
including without limitation Sam Liss.
SCHEDULE 4.02
Agreements between Platinum US and St. Paul or St. Paul Subsidiaries
to be Terminated
1. Bulk Reinsurance Contract, dated as of November 30, 1995, between Platinum
Underwriters Reinsurance, Inc. and United States Fidelity and Guaranty
Insurance Company.
2. Agreement for Services and Other Resources, dates as of April 27, 1998,
between St. Paul Fire and Marine Insurance Company and Platinum
Underwriters Reinsurance, Inc.
3. Agreement for Investment Management Services, dates as of April 27, 1998,
between The St. Paul Companies, Inc. and Platinum Underwriters Reinsurance,
Inc.
4. Tax Sharing Agreement, dated as of April 25, 1998, between The St. Paul
Companies, Inc., USF&G Corporation and each of the subsidiary members of
the USF&G Corporation Affiliated Group that has executed the Agreement.
SCHEDULE 5.04(a)(i)
Exceptions to Good and Marketable Title of Transferred Assets
St. Paul makes no representations as to the marketable title to the
Employment Agreements and information (including, but not limited to, personnel
files and employee records and reports) relating to the Newly Hired Employees.
Certain rights to the intellectual property listed on SCHEDULE 2.01(c)
may not be transferred without the consent of a third party. While St. Paul and
its relevant Subsidiaries will use commercially reasonable efforts to obtain
such consents, they shall not have any liability to the Company or any
Subsidiary of the Company to the extent any such consent is not obtained by the
Closing Date and, for greater certainty, none of St. Paul nor any Subsidiary of
St. Paul shall be required to make any payment to a third party to procure the
transfer of rights to any intellectual property.
SCHEDULE 5.04(a)(ii)
Encumbrances on Transferred Assets
The photocopying, printing, facsimile, mailroom and beverage service
equipment included in the Transferred Assets is subject to various lease
agreements with third parties.
SCHEDULE 5.06(c)
Statutory Periods of Limitations
Platinum US's Federal tax statutory period of limitations has been extended for
tax years 12/31/1995, 12/31/1996, 12/31/1997 and 4/24/1998 until 12/31/2002 and
for tax year 12/31/1998 until 9/15/2003.
SCHEDULE 5.06(d)
Tax-related Agreements
Platinum US is part of a tax sharing agreement, dated as of April 25, 1998,
between The St. Paul Companies, Inc., USF&G Corporation and each of the
subsidiary members of the USF&G Corporation that have executed the Agreement. As
provided in Section 4.02 and the associated schedule, this agreement will be
terminated effective as of the closing date.
SCHEDULE 5.06(f)
Tax Delinquencies, Claims, Audits, Examinations,
Actions, Suits, Proceedings or Investigations in
Progress or Pending
Platinum US is included in the consolidated Federal tax audit of the USF&G
Corporation consolidated group through 4/24/1998. Platinum US is included in the
consolidated Federal audit of The St. Paul Companies, Inc. consolidated group
for years ending 12/31/1998 through 12/31/2000. No adjustments have been
proposed to Platinum US in either audit and none are expected.
SCHEDULE 5.06(h)
Platinum US Affiliated Group Membership
for Tax Filings
Platinum US filed a Federal tax return as part of the USF&G Corporation
consolidated Federal tax return from its formation until 4/24/1998. After USF&G
Corporation and The St Paul Companies, Inc. merged on 4/24/1998, Platinum US
filed its Federal tax return as part of the St Paul Companies, Inc. consolidated
tax group.
SCHEDULE 5.07
Contracts of Platinum US
Custody Agreement made as of December 13, 1995 by and between Platinum
Underwriters Reinsurance, Inc. and First National Bank of Maryland, a Maryland
banking corporation.
SCHEDULE 6.02(b)
Regulatory Approvals Required to be Obtained by the Company or its Post-Closing
Subsidiaries Prior to the Closing
Maryland Consent to Change of Control, Name Change, Additional Business Lines
(including, without limitation, accident and health insurance), and the
Ancillary Agreements to which Platinum US is a Party.
Bermuda Insurance License.
New York License.
SEC declaration of effectiveness of the Registration Statements relating to the
Public Offering and the ESU Offering.
SCHEDULE 7.01(a)(ii)
Hiring Restrictions
Any officer of the Company designated as an Assistant Vice President or more
senior.
SCHEDULE 9.02(e)
FULL AND COMPLETE RELEASE
(a) I, __________, as a material inducement to The St. Paul
Companies, Inc. ("St. Paul") to enter into the Formation and Separation
Agreement between The St. Paul Companies, Inc. and Platinum Underwriters
Holdings, Ltd., dated as of June __, 2002, (the "Formation Agreement") and for
other good and valuable consideration, the receipt of which is hereby
acknowledged, for myself and my heirs, executors, administrators and assigns, do
hereby knowingly and voluntarily release and forever discharge St. Paul and all
of its Affiliates (as defined in the Formation Agreement), parents, subsidiaries
and related entities, and all of its past, present and future respective agents,
officers, directors, shareholders, employees, attorneys and assigns from any
federal, state or local charges, claims, demands, actions, liabilities, suits,
or causes of action, at law or equity or otherwise and any and all rights to or
claims for continued employment after the Closing Date (as defined in the
Formation Agreement), attorneys fees or damages (including contract,
compensatory, punitive or liquidated damages) or equitable relief, which I may
ever have had, have now or may ever have or which my heirs, executors or assigns
can or shall have, against any or all of them, whether known or unknown, on
account of or arising out of my employment with St. Paul or the separation
thereof; provided, however, that the foregoing shall not constitute a release of
(i) any claim for indemnification or insurance relating to my acts or omissions
that constitute "St. Paul Liabilities," as defined in the Formation Agreement,
nor (ii) any claim for compensation or benefits that is accrued through the
Closing Date but unpaid under the terms of my employment agreement with the St.
Paul dated ________, 2002.
(b) This release includes, but is not limited to rights and
claims arising under the Age Discrimination in Employment Act of 1967, as
amended by the Older Workers Benefit Protection Act of 1990 ("ADEA"), Title VII
of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 1981, the
Americans with Disabilities Act, the Worker Adjustment and Retraining
Notification Act, the Fair Labor Standards Act, the Family and Medical Leave
Act, any state or local human rights statute or ordinance, any claims or rights
of action relating to breach of contract, public policy, personal or emotional
injury, defamation, additional compensation, or fringe benefits. I specifically
waive the benefit of any statute or rule of law which, if applied to this
release, would otherwise exclude from its binding effect any claims not now
known by me to exist. This release does not purport to waive claims arising
under these laws after the date hereof.
(c) I covenant and agree not to sue or bring any action, whether
federal, state, or local, judicial or administrative, now or at any future time,
against St. Paul, its Affiliates, its or their respective agents, directors,
officers or employees, with respect to any claim released hereby or arising out
of my employment with St. Paul or its Affiliates. Nevertheless, this release
does not purport to limit any right I may have to file a charge under the ADEA
or other civil rights statute or to participate in an investigation or
proceeding conducted by the Equal Employment Opportunity Commission or other
investigatory agency. This release does, however, waive and release any right to
recover damages under the ADEA or other civil rights statute.
I represent and warrant that I have not sold, assigned, transferred,
conveyed or otherwise disposed of to any third-party, by operation of law or
otherwise, any action, cause of action, suit, debt, obligation, account,
contract, agreement, covenant, guarantee, controversy, judgment, damage, claim,
counterclaim, liability or demand of any nature whatsoever relating to any
matter covered by this release.
(d) I hereby acknowledge that I have been granted at least
twenty-one (21) days within which to consider this release. This duly executed
release must be RECEIVED by St. Paul by the close of the business day on the
twenty-first (21st) day after the date hereof. The Agreement must be delivered
to St. Paul personally or by certified mail, to the attention of the General
Counsel at the address indicated below. I further acknowledge that I have been
advised to consult with legal counsel prior to executing this release. I
understand that if I execute this release prior to the expiration of twenty-one
(21) days, or choose to forgo the advice of legal counsel, I do so freely and
knowingly, and waive any and all future claims that such action or actions would
affect the validity of this release. I understand that I may cancel this release
at any time on or before the seventh (7th) day following the date on which I
sign the release. To be effective, the decision to cancel must be in writing and
delivered to St. Paul, personally or by certified mail, to the attention of the
General Counsel at the address indicated below on or before the seventh (7th)
day after I sign this release.
All notices hereunder must be mailed by first class mail or by
certified mail addressed as follows:
The St. Paul Companies, Inc. or St. Paul Re, Inc.
385 Washington Street
St. Paul, Minnesota 55102
Attention: General Counsel
This release is the complete understanding between me and St. Paul in
respect of the subject matter of this release and supersedes all prior
agreements relating to the same subject matter. I have not relied upon any
representations, promises or agreements of any kind except those set forth
herein in signing this release.
In the event that any provision of this release should be held to be
invalid or unenforceable, each and all of the other provisions of this release
shall remain in full force and effect. If any provision of this release is found
to be invalid or unenforceable, such provision shall be modified as necessary to
permit this release to be upheld and enforced to the maximum extent permitted by
law. This release is to be governed by and construed and enforced in accordance
with the laws of the State of New York without reference to rules relating to
conflict of laws. This release inures to the benefit of St. Paul, its Affiliates
and its successors and assigns. I have carefully read this release, fully
understand each of its terms and conditions, and intend to abide by this release
in every respect. As such, I knowingly and voluntarily sign this release.
----------------------
[Name]
Dated as of [_______ __, 2002]
SCHEDULE 10.02(b)
St. Paul Information
[Insert S-1 "letter" mark-up]
SCHEDULE 10.02(c)
Shared Information
[Insert S-1 "letter" mark-up]
SCHEDULE 11.01
Excluded Classes
THE FOLLOWING BUSINESS IS TO BE EXCLUDED FROM TRANSFER.
New York Classes
----------------
1109 CAS FIRST DOLLAR AUTO, NY (PROGRAM)
1111 CAS FIRST DOLLAR GL/OTHER, NY (PROGRAM)
1304 OMPT_AVT
1305 AVIATION XS, NY
1306 SATELLITE PRO RATA, NY
1401 BOND, NY
1402 CREDIT, NY
1403 OTHER SPECIALTY, NY
1600 FAC RUNOFF
1606 CASUALTY FAC REDHAWK, NY
2601 INTL PROPERTY FACULTATIVE, MIAMI
3201 MOTOR PRO-RATA, SINGAPORE
3203 INTL PROPERTY PRO RATA, SINGAPORE
3204 INTL PROPERTY EXCESS, SINGAPORE
3205 INTL CASUALTY TREATY, SINGAPORE
3301 MARINE TREATY PRO RATA, SINGAPORE
3601 INTL PROPERTY FACULTATIVE, SINGAPORE
4201 MEDICAL MALPRACTICE, SYDNEY
4202 CASUALTY TREATY, SYDNEY
CREDIT, SYDNEY
ART, SIDNEY
L12 N. AM PROF
L13 INTL PROF
L14 NA PROPERTY BINDERS
L98 U.S. RUN-OFF BUSINESS
L20 LMX/RETRO PROP
L22 LMX/RETRO CAS
L30 N AM CAS E&S
L31 N AM BINDERS CAS
L15 AVIATION
L19 INT'L CREDIT
L35 FINANCIAL LONG TAIL
L67 SATTELITE
R21 MARINE RUNOFF
R22 CASUALTY RETRO RUNOFF
L97 INT PROPERTY RUNOFF
L98 NA CASUALTY RUNOFF
B36 BRUSSELS FINANCIAL LINES SHORT TAIL PR
B37 BRUSSELS FINANCIAL LINES SHORT TAIL XL
B56 BRUSSELS NON-MARINE FAC PRO RATA
B57 BRUSSELS NON-MARINE FAC EXCESS
B58 BRUSSELS MARINE FAC PRO RATA
B59 BRUSSELS MARINE FAC EXCESS
B67 BRUSSELS SATELLITE PR
B77 BRUSSELS AVIATION LIABILITY PRO RATA TREATY
B78 BRUSSELS AVIATION HULL PRO RATA TREATY
B90 BRUSSELS FIN LINES PRO RATA
M97 MUNICH INT'L RUN-OFF BUSINESS
LL4 L4 GTR SCALEBACK EUROPE CLASS 4
LF4 F4 GTR SCALEBACK EUROPE CLASS 4