Exhibit 99.4
ADMINISTRATIVE SERVICES AGREEMENT
by and between
LASALLE RE LIMITED
and
ENDURANCE SPECIALTY INSURANCE LTD.
dated May 16, 2002
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS; OTHER MATTERS
Section 1.1 Definitions....................................................1
Section 1.2 Interpretation.................................................2
ARTICLE II
APPOINTMENT; PERFORMANCE STANDARDS; NOTIFICATION
OF CONTRACTHOLDERS
Section 2.1 Appointment....................................................2
Section 2.2 Standards......................................................3
ARTICLE III
ADMINISTRATION OF EXCLUDED LIABILITIES
Section 3.1 Administration of Excluded Liabilities.........................4
ARTICLE IV
ADDITIONAL SERVICES; NOTIFICATION
OF GOVERNMENTAL INQUIRIES; PERSONNEL
Section 4.1 Additional Services............................................4
Section 4.2 Notification of Governmental Inquiries.........................5
Section 4.3 Personnel......................................................5
ARTICLE V
EXPENSES; PAYMENTS
Section 5.1 Expenses.......................................................5
Section 5.2 Sharing of Payments............................................5
ARTICLE VI
REPORTS; BOOKS AND RECORDS; ACCOUNTS
Section 6.1 Reports........................................................6
Section 6.2 Payment of Amounts.............................................6
Section 6.3 Books and Records; Access......................................6
Section 6.4 Bank Accounts..................................................8
ARTICLE VII
INABILITY TO PERFORM SERVICES
Section 7.1 Inability to Perform Services..................................9
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ARTICLE VIII
LEGAL PROCEEDINGS
Section 8.1 Regulatory Proceedings.........................................9
Section 8.2 Defense of Litigation..........................................9
Section 8.3 Communications Regarding Certain Matters......................10
ARTICLE IX
DURATION; TERMINATION
Section 9.1 Duration......................................................10
Section 9.2 Termination...................................................10
ARTICLE X
CONFIDENTIALITY
Section 10.1 Use of Confidential Information...............................10
Section 10.2 Disclosure....................................................11
ARTICLE XI
INDEMNIFICATION
Section 11.1 Indemnification by LaSalle Re.................................11
Section 11.2 Indemnification by Administrator..............................12
Section 11.3 Indemnification Procedure.....................................12
Section 11.4 Relationship to Retrocession Agreement........................12
ARTICLE XII
ARBITRATION
Section 12.1 Arbitration...................................................12
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Cooperation...................................................13
Section 13.2 Amendment, Modification and Waiver............................13
Section 13.3 Relationship..................................................13
Section 13.4 Entire Agreement..............................................13
Section 13.5 Governing Law.................................................14
Section 13.6 Severability..................................................14
Section 13.7 Counterparts..................................................14
Section 13.8 Third Party Beneficiaries.....................................14
Section 13.9 Binding; Assignment...........................................14
Section 13.10 Descriptive Headings..........................................14
Section 13.11 Use of Name...................................................15
Section 13.12 Survival......................................................15
Section 13.13 Offset........................................................15
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Section 13.14 Notices.......................................................15
Section 13.15 Conflict......................................................16
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ADMINISTRATIVE SERVICES AGREEMENT
This ADMINISTRATIVE SERVICES AGREEMENT, dated as of May 16, 2002
(hereinafter referred to as the "Administrative Services Agreement") is made and
entered into by and between LaSalle Re Limited, a Bermuda insurance company
("LaSalle Re") and Endurance Specialty Insurance Ltd., a Bermuda insurance
company ("Administrator").
W I T N E S S E T H:
WHEREAS, pursuant to a Transfer and Purchase Agreement, dated as of
the date hereof (the "Transfer and Purchase Agreement"), among LaSalle Re,
Trenwick Group Ltd., a Bermuda company and the parent company of LaSalle Re
("Trenwick" and together with LaSalle Re, the "Seller Parties") and
Administrator, the Seller Parties and Administrator have agreed, among other
things, to sell, convey and transfer to Administrator the Business (as such term
is defined in the Transfer and Purchase Agreement);
WHEREAS, pursuant to a Quota Share Retrocession Agreement, between
LaSalle Re and Administrator, dated as of the date hereof (the "Retrocession
Agreement"), LaSalle Re has agreed to cede to Administrator, and Administrator
has agreed to indemnify LaSalle Re for, one hundred percent (100%) of the
Reinsured Liabilities (as such term is defined in the Retrocession Agreement);
and
WHEREAS, LaSalle Re wishes to appoint Administrator to provide, on
an exclusive basis, all administrative services and other services with respect
to the Reinsured Contracts and Reinsured Liabilities (as such terms are defined
in the Retrocession Agreement), and Administrator desires to provide such
administrative services and other services in consideration of LaSalle Re
entering into the Retrocession Agreement.
NOW, THEREFORE, for and in consideration of the premises and the
promises and the mutual agreements hereinafter set forth and set forth in the
Transfer and Purchase Agreement and Retrocession Agreement, the parties hereto,
intending to be legally bound, covenant and agree as follows:
ARTICLE I
DEFINITIONS; OTHER MATTERS
Section 1.1 Definitions. Capitalized and uncapitalized terms used
but not defined herein and which are defined in the Transfer and Purchase
Agreement and/or the Retrocession Agreement, shall have the meanings ascribed to
them in the Transfer and Purchase Agreement and/or the Retrocession Agreement,
as the context requires. As used in this Administrative Services Agreement, the
following terms shall have the meanings set forth herein:
"Administrative Services" shall have the meaning set forth in
Section 2.1(a) hereof.
"Bank Accounts" shall have the meaning set forth in Section 6.4
hereof.
"Excess Payments" shall have the meaning set forth in Section 5.2.
"Material Regulatory Proceeding" shall have the meaning set forth in
Section 8.1(c) hereof.
"Producers" shall mean any broker, reinsurance intermediary, agent
or other sales representative of LaSalle Re.
"Receiving Party" shall have the meaning set forth in Section 5.2.
Section 1.2 Interpretation.
(a) When a reference is made in this Administrative Services
Agreement to a Section or Article, such reference shall be to a section or
article of this Administrative Services Agreement unless otherwise clearly
indicated to the contrary. Whenever the words "include," "includes" or
"including" are used in this Administrative Services Agreement, they shall be
deemed to be followed by the words "without limitation." The words "hereof,"
"herein" and "herewith" and words of similar import shall, unless otherwise
stated, be construed to refer to this Administrative Services Agreement as a
whole and not to any particular provision of this Administrative Services
Agreement. The meaning assigned to each term used in this Administrative
Services Agreement shall be equally applicable to both the singular and the
plural forms of such term, and words denoting any gender shall include all
genders. Where a word or phrase is defined herein, each of its other grammatical
forms shall have a corresponding meaning.
(b) The parties have participated jointly in the negotiation and
drafting of this Administrative Services Agreement; consequently, in the event
an ambiguity or question of intent or interpretation arises, this Administrative
Services Agreement shall be construed as if drafted jointly by the parties
thereto, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this
Administrative Services Agreement.
ARTICLE II
APPOINTMENT; PERFORMANCE STANDARDS;
NOTIFICATION OF CONTRACTHOLDERS
Section 2.1 Appointment.
(a) LaSalle Re hereby appoints Administrator as its exclusive
agent and its attorney-in-fact to provide all necessary administrative and other
services (the "Administrative Services") with respect to the Reinsured Contracts
and the Reinsured Liabilities and all other services incidental to the
administration of the Reinsured Contracts and the Reinsured Liabilities,
including, without limitation, taking such actions as authorized or permitted by
LaSalle Re under the Assignment of Reinsurance Recoverables and Other
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Receivables attached as Exhibit B to the Retrocession Agreement (the "Assignment
Agreement"), on the terms, and subject to the limitations and conditions set
forth in this Administrative Services Agreement and the Assignment Agreement,
and Administrator hereby accepts such appointment and agrees to perform such
Administrative Services on behalf of and in the name of LaSalle Re.
(b) Administrator represents that it has and will obtain and
maintain in all material respects any and all licenses and authorities required
under Applicable Law to perform its obligations under this Administrative
Services Agreement and the Assignment Agreement.
(c) The intention of the parties hereto is that Administrator
shall perform all Administrative Services in such a manner as to minimize the
involvement of LaSalle Re and its Affiliates, subject to the requirements of any
Applicable Law that require that specific actions be taken by LaSalle Re without
the Administrator acting on its behalf.
(d) The parties agree that Administrator shall have no
responsibility whatsoever for the administration of losses incurred by LaSalle
Re in connection with the Reinsured Contracts or the Business prior to the
Effective Date, and that the administration of such matters shall be the sole
and exclusive responsibility of LaSalle Re.
Section 2.2 Standards.
(a) Subject to the provisions of this Administrative Services
Agreement, Administrator agrees that in providing the Administrative Services:
(i) it shall provide the Administrative Services consistent with the business
standards pursuant to which the Administrator administers its own reinsurance
business, which shall in no event be lower than business standards generally
applicable to the conduct of the property catastrophe reinsurance business in
Bermuda; (ii) it shall comply with (1) all Applicable Laws relating to the
Reinsured Contracts and the Reinsured Liabilities and to the conduct of the
activities contemplated hereby and (2) the terms of the Reinsured Contracts.
(b) For the duration of this Administrative Services
Agreement, Administrator hereby covenants that it will employ and retain staff
with the experience, skill and expertise to perform the Administrative Services
the Administrator is obligated to perform hereunder in a manner consistent with
the standards set forth in Section 2.2(a) hereof.
ARTICLE III
ADMINISTRATION OF EXCLUDED LIABILITIES
Section 3.1 .Administration of Excluded Liabilities LaSalle Re
shall retain liability and administrative responsibility for all Excluded
Liabilities.
(b) With respect to any claims (including claims for
reinsurance recoveries) presented in which both Reinsured Liabilities and
Excluded Liabilities are alleged and where the predominant claim activities and
costs relate to Excluded Liabilities, Administrator shall notify LaSalle Re and
LaSalle Re will assume the administration of such
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claim activities. Administrator shall reimburse LaSalle Re for any out-of-pocket
costs and expenses of such claim activities to the extent they relate to
Reinsured Liabilities.
(c) In the event claims (including claims for reinsurance
recoveries) are presented in connection with Reinsured Contracts, and it is in
question whether a Reinsured Liability or an Excluded Liability is at issue,
Administrator shall defend or prosecute such claim and LaSalle Re and
Administrator shall resolve the responsibility for any amount of loss, allocated
loss expense or other costs and expenses pursuant to the provisions of this
Agreement. In the event that, during the course of a claim, it becomes clear
that the claim is an Excluded Liability, Administrator shall notify LaSalle Re
and LaSalle Re will assume the administration of such claim and reimburse
Administrator's out-of-pocket costs and expenses of such claim activities to the
extent they relate solely to Excluded Liabilities.
(d) In the event that a claim (including claims for
reinsurance recoveries) presented in connection with a Reinsured Contract is not
a Reinsured Liability or is an Excluded Liability, LaSalle Re shall have the
sole responsibility to defend or prosecute such claim.
(e) With respect to those matters described in (b), (c) and
(d) of this Section 3.1, the party administering the claim shall be provided the
full cooperation of the other party and shall be responsible for reimbursing
such other party for any out-of-pocket costs and expenses incurred by such party
in providing such cooperation.
ARTICLE IV
ADDITIONAL SERVICES; NOTIFICATION OF GOVERNMENTAL INQUIRIES;
PERSONNEL
Section 4.1 Additional Services. If Administrator or LaSalle Re, as
the case may be, requires from the other party services to be provided with
respect to the Business which are not otherwise contemplated under this
Administrative Services Agreement, the Retrocession Agreement and/or the
Transfer and Purchase Agreement, the parties shall negotiate in good faith to
reach a mutually acceptable arrangement with respect to the provision of such
services. Each party shall reasonably compensate such other party for such
additional services provided by such other party.
Section 4.2 Notification of Governmental Inquiries. LaSalle Re
agrees to promptly notify Administrator with respect to the Reinsured Contracts
and the Reinsured Liabilities and any inquiries or notifications received from
Governmental Entities or Producers, including, without limitation, inquiries
regarding consumer inquiries and complaints, market conduct exams, summons and
complaints, subpoenas relating to the Reinsured Contracts and the Reinsured
Liabilities.
Section 4.3 Personnel. LaSalle Re agrees to maintain personnel to
run-off the property catastrophe business which does not constitute "Business"
as defined in the Transfer and Purchase Agreement and to meet its obligations to
Administrator under this Administrative Services Agreement, the Transfer and
Purchase Agreement and the Retrocession Agreement.
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ARTICLE V
EXPENSES; PAYMENTS
Section 5.1 Expenses. In the event Administrator incurs a cost or
an expense relating to the administration of the Reinsured Contracts, which cost
or expense is directly caused or directed by LaSalle Re or actions of LaSalle
Re, LaSalle Re shall reimburse Administrator for such cost and expense;
provided, however, any cost or expense of Administrator and reasonable out of
pocket cost or expense of LaSalle Re arising from the performance of
Administrative Services pursuant to the Assignment Agreement shall be at the
sole cost and expense of Administrator.
Section 5.2 Sharing of Payments.
(a) LaSalle Re agrees to remit and/or repay any amounts due to
Administrator pursuant to any provision of this Administrative Services
Agreement, within forty-five (45) days of the receipt of a payment request from
Administrator, together with reasonable documentation for such payment request.
Administrator agrees to remit and/or repay any amounts due to LaSalle Re
pursuant to any provision of this Administrative Services Agreement within
forty-five (45) days of the receipt of a payment request from LaSalle Re,
together with reasonable documentation for such payment request.
(b) If at any time following the date hereof any party who
shall have received any payment or distribution (whether voluntary or
involuntary) (the "Receiving Party") in excess of any payments or distributions
(whether in cash, property or security) such Receiving Party should have
received through operation of any provision of this Administrative Services
Agreement (such payments or distributions being referred as "Excess Payments"),
then such Receiving Party shall promptly pay over such Excess Payment in the
form received (duly endorsed, if necessary) to the party who should have
received such payment or distribution pursuant to any provision of this
Administrative Services Agreement.
ARTICLE VI
REPORTS; BOOKS AND RECORDS; ACCOUNTS
Section 6.1 Reports.
(a) Administrator shall collect, administer and provide to
LaSalle Re all information and data required for LaSalle Re to maintain
financial and statistical data with respect to the Reinsured Contracts and
Reinsured Liabilities and in order to permit the Seller Parties to timely make
all required regulatory reports and public financial filings. Without limiting
the generality of the foregoing, Administrator shall prepare all reports needed
by LaSalle Re in connection with the Reinsured Liabilities and the Reinsured
Contracts to enable LaSalle Re to comply with Applicable Law.
(b) Periodically, within a time frame as specified by LaSalle
Re from time to time, during the term of this Administrative Services Agreement,
there shall be
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transmitted by Administrator to LaSalle Re a summary report for the period
reported on, of all activity relating to the Reinsured Contracts and Reinsured
Liabilities. The report shall include, but not be limited to, the amount of
premiums, commissions, related expenses, reserves and paid losses, as
applicable; provided, however, that notwithstanding anything herein or in the
Retrocession Agreement, in no event shall such reports be deemed to indicate
that the Administrator has any obligation to pay to the LaSalle Re any amount in
respect of Excluded Liabilities which may be reflected on such reports.
Section 6.2 Payment of Amounts. Except to the extent that this
Administrative Services Agreement or the Retrocession Agreement provides
otherwise, all amounts shall be paid within forty-five (45) Business Days of
delivery of such report, and any amount not paid within such forty-five (45)
Business Day period shall bear simple interest at the 90-Day Treasury Rate from
the twentieth Business Day following the end of the forty-five (45) Business Day
period until the date of payment.
Section 6.3 Books and Records; Access.
(a) LaSalle Re shall on the Closing Date transfer to
Administrator in a commercially reasonable manner the Books and Records, or
copies thereof, owned by it that relate to the Reinsured Contracts, Reinsured
Liabilities or the Business.
(b) If the transfer of any Books and Records requires the
consent of any person, LaSalle Re shall secure such consent on or prior to the
date such transfer is to be made. Where such consent cannot be obtained, LaSalle
Re shall not be required to transfer the Books and Records to Administrator but
shall provide Administrator with copies of and/or access to such Books and
Records.
(c) To the extent permitted by Applicable Law, from the date
hereof until the date on which LaSalle Re has fulfilled all of its obligations
to Administrator under this Administrative Services Agreement, and at any time
(without limitation) as may be required in Administrator's reasonable judgment
in order for Administrator to comply with any Applicable Law or to perform its
obligations or responsibilities under this Administrative Services Agreement,
Administrator and its representatives may from time to time reasonably request
and LaSalle Re shall provide, at reasonable times during normal business hours,
full and open access to examine the Books and Records under the control of the
Seller Parties and their Affiliates pertaining to the Reinsured Contracts,
Reinsured Liabilities, the Business and services to be provided under this
Administrative Services Agreement and to discuss any matters relating to the
Reinsured Contracts, the Reinsured Liabilities, the Business and services to be
provided under this Administrative Services Agreement with the employees and
agents of LaSalle Re who are familiar therewith, so that Administrator shall
have sufficient opportunity to make whatever investigation it shall deem
necessary and desirable in connection with the transactions contemplated by this
Administrative Services Agreement. Such access shall include the right of
Administrator to make and retain copies of any Books and Records relating to the
Reinsured Contracts or the Reinsured Liabilities to the extent that
Administrator reasonably determines that it requires copies of any such Books
and Records in order to carry out the transactions contemplated by this
Administrative Services Agreement or for any legitimate business purposes
related to this Administrative Services Agreement.
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(d) To the extent permitted by Applicable Law, from the date
hereof until the date on which Administrator has fulfilled all of its
obligations to LaSalle Re under this Administrative Services Agreement, and at
any time (without limitation) as may be required in LaSalle's reasonable
judgment in order for LaSalle to comply with any Applicable Law or to perform
its obligations or responsibilities under this Administrative Services
Agreement, LaSalle and its representative may from time to time reasonably
request and Administrator shall provide, at reasonable times during normal
business hours, full and open access to examine the Books and Records under the
control of Administrator pertaining to the Reinsured Contracts, Reinsured
Liabilities, the Business and services to be provided under this Administrative
Services Agreement (including, but not limited to, the Books and Records
transferred to Administrator pursuant to this Section 6.3 and still then
retained by Administrator) and to discuss such Reinsured Contracts, Reinsured
Liabilities, the Business and services to be provided under the Administrative
Services Agreement with the employees and agents of Administrator who are
familiar therewith, so that LaSalle Re shall have sufficient opportunity to make
whatever investigation it shall deem necessary and desirable in connection with
the transactions contemplated by this Administrative Services Agreement. Such
access shall include the right of LaSalle Re to make and retain copies of any
Books and Records relating to the Reinsured Contracts or the Reinsured
Liabilities to the extent that LaSalle Re reasonably determines that it requires
copies of any such Books and Records in order to carry out the transactions
contemplated by this Administrative Services Agreement or for any legitimate
business purposes related to this Administrative Services Agreement.
(e) During the term of this Administrative Services Agreement,
Administrator shall retain all Books and Records relating to the Reinsured
Contracts, Reinsured Liabilities and the Business transferred by LaSalle Re to
the extent such Books and Records are required by Applicable Law to be retained
by either Administrator or LaSalle Re, but in any case, for at least seven (7)
years after termination of the Reinsured Contracts applicable to such Books and
Records.
(f) Each party hereto shall pay all storage and related
expenses associated with any Books and Records relating to the Reinsured
Contracts and Reinsured Liabilities, and copies thereof, that it retains in its
possession.
(g) Administrator and LaSalle Re shall provide security for
the Books and Records that are in its possession. Administrator and LaSalle Re
shall comply with all Applicable Laws, including, without limitation, privacy
laws, in connection with all such data and Books and Records. Administrator and
LaSalle Re shall cooperate with any regulatory authority having jurisdiction
over LaSalle Re in providing access to such Books and Records.
(h) Following expiration of this Administrative Services
Agreement, all Books and Records pertaining to the Reinsured Contracts and
Reinsured Liabilities shall be the sole property of Administrator, unless
otherwise provided by law or herein and provided that LaSalle Re shall have
access to such books and records to the extent required to respond to
regulatory, statistical, tax or similar inquiries or investigations and for
LaSalle Re to defend any claim against it.
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(i) In addition, LaSalle Re agrees to provide Administrator,
without cost, reasonable access to the RSG accounting system. Administrator
shall utilize the RSG accounting system solely to effectuate the performance of
its administrative and other services with respect to Reinsured Contracts and
Reinsured Liabilities pursuant to this Administrative Services Agreement.
Section 6.4 Bank Accounts. During the term of this Administrative
Services Agreement, Administrator may establish and maintain accounts with
banking institutions to provide the Administrative Services (the "Bank
Accounts"). Administrator shall have the exclusive authority over the Bank
Accounts including, without limitation, the exclusive authority to (i) open the
Bank Accounts in the name of LaSalle Re, (ii) designate the authorized
signatories on the Bank Accounts, (iii) issue drafts on and make deposits in the
Bank Accounts in the name of LaSalle Re, and (iv) make withdrawals from the Bank
Accounts. LaSalle Re shall do all things reasonably necessary to enable
Administrator to open and maintain the Bank Accounts including, without
limitation, executing and delivering such depository resolutions and other
documents as may be requested from time to time by the banking institutions.
LaSalle Re agrees that without Administrator's prior written consent or as may
be required by applicable law or regulatory authorization it shall not make any
changes to the authorized signatories on the Bank Accounts or attempt to
withdraw any funds therefrom. Administrator shall own all funds deposited in the
Bank Accounts. Administrator shall pay all fees and charges made in connection
with such accounts.
ARTICLE VII
INABILITY TO PERFORM SERVICES
Section 7.1 Inability to Perform Services. In the event that
Administrator shall be unable to perform any Administrative Service for a period
that could reasonably be expected to exceed ninety (90) days, Administrator and
LaSalle Re shall mutually agree on alternative means of providing such services.
If either party shall fail to cooperate in identifying alternative means for the
provision of the Administrative Services, the other party may procure such
Administrative Services for the Reinsured Contracts and Reinsured Liabilities by
commercially reasonable means. Administrator shall be solely responsible for all
costs incurred in restoring Administrative Services which have not been provided
due to its failure to adhere to its obligations under this Agreement.
Notwithstanding the foregoing, if Administrator is unable to provide the data
necessary for any monthly closing activities, Administrator will use its
reasonable best efforts to provide estimates of such data.
ARTICLE VIII
LEGAL PROCEEDINGS
Section 8.1 Regulatory Proceedings. The parties shall mutually
agree to an appropriate response, including which party should respond, to any
investigation or proceeding from or before any Governmental Entity relating to
the Reinsured Contracts or the Reinsured Liabilities and the parties hereby
agree to cooperate and coordinate in resolving any and all Material Regulatory
Proceedings. Neither LaSalle Re nor Administrator shall have the authority
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to institute, prosecute, defend or maintain any legal or regulatory proceedings
on behalf of the other party without the prior written consent of such other
party.
Section 8.2 Defense of Litigation. Administrator shall defend, at
its own expense and in the name of LaSalle Re when necessary, any action brought
in connection with any Reinsured Contract or relating to any Reinsured
Liability, provided, however, Administrator shall not be required to defend
Excluded Liabilities, except as set forth in Section 3.1 hereof. LaSalle Re
shall have the right, at its own expense, to engage its own separate legal
representation and to fully participate in the defense of any litigation with
respect to the Reinsured Contracts or the Reinsured Liabilities in which LaSalle
Re is named as a party without waving any rights to indemnification it may have
under Article XI hereof; provided, however, that Administrator shall have the
exclusive authority to control such litigation, and to settle any litigation if
(i) Administrator pays all settlement amounts with respect thereto, (ii) the
settlement does not involve any restriction or condition on LaSalle Re's
business other than exclusively to the Reinsured Contracts transferred pursuant
to the Transfer and Purchase Agreement and (iii) Administrator obtains a
complete and unqualified release for LaSalle Re with respect to such litigation.
Section 8.3 Communications Regarding Certain Matters. LaSalle Re
shall promptly (i) notify Administrator in writing if it receives any
information or correspondence with respect to any suit, claim, action or
proceeding relating to the Reinsured Contracts or the Reinsured Liabilities, or
any written communication threatening any of the foregoing and (ii) forward to
Administrator any documents it receives relating to any of the matters referred
to in clause (i) of this Section 8.3.
ARTICLE IX
DURATION; TERMINATION
Section 9.1 Duration. This Administrative Services Agreement shall
become effective as of the date hereof and continue until a date which is the
earlier of (A) a date which is the later of (i) the date on which none of the
Reinsured Contracts remains in force; or (ii) the date on which LaSalle Re has
no further Reinsured Liabilities; or (B) the date on which this Administrative
Services Agreement is terminated according to the provisions of Section 9.2
hereof.
Section 9.2 Termination.
(a) This Administrative Services Agreement may be terminated
at any time upon the mutual written consent of the parties hereto, which writing
shall state the effective date and relevant terms of termination.
(b) Upon any termination of this Administration Services
Agreement, such party shall retain its right to bring actions for, and receive
damages to, which it may be entitled under Applicable Law.
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ARTICLE X
CONFIDENTIALITY
Section 10.1 Use of Confidential Information. LaSalle Re and
Administrator acknowledge that they will have access to confidential and
proprietary information concerning the other party and its businesses, which
information is not readily available to the public, and acknowledge that LaSalle
Re and Administrator have taken and will continue to take reasonable actions to
ensure such information is not made available to the public. LaSalle Re and
Administrator further agree that they will not at any time (during the term
hereof or thereafter) disclose to any Person (except LaSalle Re or Administrator
and their Affiliates and the officers, directors, employees, agents and
representatives of LaSalle Re and Administrator and their Affiliates who require
such information in order to perform their duties in connection with the
services provided hereunder), directly or indirectly, or make any use of, for
any purpose other than those contemplated by the Transfer and Purchase
Agreement, this Administrative Services Agreement or the Retrocession Agreement,
any information or trade secrets relating to the Business, Reinsured Contracts,
the Reinsured Liabilities or the business affairs of LaSalle Re or
Administrator, including the identity of and/or the compensation arrangements
with, any Affiliates and Subsidiaries of LaSalle Re and Administrator, so long
as such information remains confidential.
Section 10.2 Disclosure. Administrator or LaSalle Re may disclose
confidential information in the following circumstances (or as otherwise
provided by the provisions of this Administrative Services Agreement):
(i) in response to a court order or formal discovery request
after notice to the other party (to the extent such notice is reasonably
practicable); provided, however, that such disclosure shall be limited
only to the extent that is required by such court order or formal
disclosure request;
(ii) if a proper request is made by any regulatory authority
after notice to the other party (to the extent such notice is reasonably
practicable); provided, however, that such disclosure shall be limited
only to the extent that is required by such regulatory authority;
(iii) at the proper request of LaSalle Re or Contractholder or
his/her legal representative; provided, however, that such disclosure
shall be limited only to the extent that is reasonably necessary to
satisfy such a request; or
(iv) as otherwise required by Applicable Law.
ARTICLE XI
INDEMNIFICATION
Section 11.1 Indemnification by LaSalle Re. LaSalle Re hereby
indemnifies Administrator and its Affiliates and its and their respective
officers, directors, employees, agents
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and representative against, and agrees to hold each of them harmless from any
and all Damages incurred or suffered by any of them arising out of or relating
to, (i) any Excluded Liabilities; (ii) any breach or nonfulfillment by LaSalle
Re of, or any failure by LaSalle Re to perform, any of the covenants, terms or
conditions of, or any duties or obligations under, this Administrative Services
Agreement; and (iii) any enforcement of this indemnity.
Section 11.2 Indemnification by Administrator. Administrator hereby
indemnifies LaSalle Re and its Affiliates and its and their respective officers,
directors, employees, agents and representative against, and agrees to hold each
of them harmless from any and all Damages incurred or suffered by any of them
arising out of or relating to, (i) any Reinsured Liabilities; (ii) any breach or
nonfulfillment by Administrator of, or any failure by Administrator to perform,
any of the covenants, terms or conditions of, or any duties or obligations
under, this Administrative Services Agreement; (iii) any enforcement of this
indemnity; and (iv) the Bank Accounts.
Section 11.3 Indemnification Procedure. In the event either LaSalle
Re or Administrator shall have a claim for indemnity against the other party
under the terms of this Administrative Services Agreement, the parties shall
follow the procedures set forth in Article VIII of the Transfer and Purchase
Agreement.
Section 11.4 Relationship to Retrocession Agreement. Nothing
contained in this Article XI is intended to supersede any provisions of the
Retrocession Agreement.
ARTICLE XII
ARBITRATION
Section 12.1 Arbitration.
(a) If any dispute shall arise out of or with reference to
this Administrative Services Agreement or breach thereof, whether such dispute
arises before or after termination of this Administrative Services Agreement,
such dispute, upon the written request of either party, shall be submitted to
three arbitrators, one to be chosen by each party, and the third by the two so
chosen. If either party refuses or neglects to appoint an arbitrator within
thirty (30) days after the receipt of written notice from the other party
requesting it to do so, the requesting party may appoint two arbitrators. If the
two arbitrators fail to agree in the selection of a third arbitrator within
thirty (30) days of their appointment, either of the parties may apply to the
Bermuda Supreme Court for the appointment of the third arbitrator pursuant to
Section 15(1)(c) of the Bermuda Arbitration Act 1986 and in such case the person
so appointed shall be deemed and shall act as the third arbitrator. All
arbitrators shall be active or retired disinterested officers of insurance or
reinsurance companies or Underwriters at Lloyd's, London not under the control
of either party to this Administrative Services Agreement.
(b) The arbitrators shall be relieved of all judicial
formalities and may abstain from following the strict rules of evidence. Each
party shall submit its case to the arbitrators within thirty days of the
appointment of the third arbitrator.
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(c) The decision in writing of any two arbitrators, when filed
with the parties hereto, shall be final and binding on both parties. Judgment
may be entered upon the final decision of the arbitrators in any court having
jurisdiction. Each party shall bear the expense of its own arbitrator and shall
jointly and equally bear with the other party the expense of the third
arbitrator and of the arbitration. Said arbitration shall take place in Bermuda
unless some other place is mutually agreed upon by the parties to this
Administrative Services Agreement, subject to the provisions of the Bermuda
Arbitration Act 1986 or any re-enactment or statutory modification thereof.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Cooperation. The parties hereto shall cooperate in a
commercially reasonable manner in order that the duties assumed by Administrator
will be effectively, efficiently and promptly discharged. The parties hereto
will use their reasonable best efforts to (i) give effect to the intent of this
Administrative Services Agreement, the Transfer and Purchase Agreement, the
Retrocession Agreement and the Related Documents and (ii) refrain from conduct
which would frustrate the intent of any such agreement. Each party shall, at all
reasonable times under the circumstances, make available to the other party
properly authorized personnel for the purpose of consultation and decision.
Section 13.2 Amendment, Modification and Waiver. This Administrative
Services Agreement may not be amended, modified or waived except by an
instrument or instruments in writing signed and delivered on behalf of each of
the parties hereto.
Section 13.3 Relationship. LaSalle Re and Administrator are and
shall remain independent contractors and not employees of the other party.
Except as expressly granted in this Administrative Services Agreement or
otherwise by the other party in writing or as may be required by Applicable Law
or as necessary to perform the services to be provided hereunder or to obtain
the benefits hereof, no party shall have any authority, express or implied, to
act as an agent of the other party or its Subsidiaries or Affiliates under this
Administrative Services Agreement. Except as otherwise provided by this
Administrative Services Agreement or by any other agreement between the parties,
each party shall be responsible for the payment of all employment, income and
social security taxes arising in connection with the compensation payable to its
personnel involved in the provision of the services hereunder.
Section 13.4 Entire Agreement. This Administrative Services
Agreement (together with the exhibits hereto and the other agreements, documents
and instruments delivered in connection herewith) the Transfer and Purchase
Agreement, the Retrocession Agreement and the Related Documents constitute the
entire agreement among the parties with respect to the subject matter hereof and
thereof and supersede all other prior agreements and understandings, both
written and verbal, among the parties or any of them with respect to the subject
matter hereof.
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Section 13.5 Governing Law. This Administrative Services Agreement
shall be governed by and construed in accordance with the laws of Bermuda,
without regard to the conflicts of laws principles thereof.
Section 13.6 Severability. Any term or provision of this
Administrative Services Agreement which is invalid or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable
the remaining terms and provisions of this Administrative Services Agreement or
affecting the validity or enforceability of any of the terms or provisions of
this Administrative Services Agreement in any other jurisdiction. If any
provision of this Administrative Services Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as would
be enforceable.
Section 13.7 Counterparts. This Administrative Services Agreement
may be executed in counterparts, each of which shall be deemed to be an
original, but all of which shall constitute one and the same agreement.
Section 13.8 Third Party Beneficiaries. Nothing in this
Administrative Services Agreement, express or implied, is intended to or shall
confer upon any person other than the parties hereto any rights, benefits or
remedies of any nature whatsoever under or by reason of this Administrative
Services Agreement.
Section 13.9 Binding; Assignment. This Administrative Services
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns and legal representatives. Neither
this Administrative Services Agreement, nor any rights, interests or obligations
hereunder, may be directly or indirectly assigned, delegated, sublicensed or
transferred by any party to this Administrative Services Agreement, in whole or
in part, to any other person (including any bankruptcy trustee) by operation of
Law or otherwise, whether voluntarily or involuntarily, without the prior
written consent of the parties hereto, which consent shall not be unreasonably
withheld.
Section 13.10 Descriptive Headings. The descriptive article and
section headings herein are inserted for convenience of reference only and are
not intended to be part of or to affect the meaning or interpretation of this
Administrative Services Agreement.
Section 13.11 Use of Name. Except as otherwise set forth in the
Transfer and Purchase Agreement, the Retrocession Agreement or any of the
Related Documents, neither party shall use the name, trademark, service mark,
logo or identification of the other party without the other party's prior
written consent.
Section 13.12 Survival. The provisions of Article IX, Article XI and
Article XIII hereof shall survive the termination of this Administrative
Services Agreement.
Section 13.13 Offset. Any debts or credits incurred on and after the
date hereof in favor of or against either LaSalle Re or Administrator with
respect to this Administrative Services Agreement, the Retrocession Agreement,
the Assignment Agreement and the Transfer and Purchase Agreement are deemed
mutual debts or credits, as the case may be, and shall be set off, and only the
balance and shall be allowed or paid.
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Section 13.14 Notices. All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given (and shall
be deemed to have been duly given upon receipt) by delivery in person, by
telecopy (which is confirmed), or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties to this
Administrative Services Agreement as follows:
If to LaSalle Re:
LaSalle Re Limited
25 Church Street
Hamilton HM 11 Bermuda
Attention: James F. Billett, Jr.
Telephone: (441) 292-4985
Telecopy: (441) 292-2656
With a copy to (which shall not constitute notice to LaSalle Re for
purposes of this Section 13.14):
Trenwick America Corporation
One Canterbury Green
Stamford, Connecticut 06901
Attention: John Del Col
Telephone: (203) 602-3074
Telecopy: (203) 921-5536
and
Baker & McKenzie
805 Third Avenue
New York, New York 10022
Attention: James R. Cameron, Esq.
Telephone: (212) 891-3930
Facsimile: (212) 891-3835
If to Administrator:
Endurance Specialty Insurance Ltd.
Crown House
4 Par-la-ville Road
Hamilton HM 08 Bermuda
Attention: James Kroner
Telephone: (441) 278-0430
Telecopy: (441) 278-0401
With a copy to (which shall not constitute notice to the
Administrator for purposes of this Section 13.14):
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Robert J. Sullivan, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
Four Times Square
New York, New York 10036
Telephone No.: 212-735-2930
Telecopy No.: 212-735-2000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above. In
no event shall the provision of notice pursuant to this Section 13.14 constitute
notice for service of any writ, process or summons in any suit, action or other
proceeding.
Section 13.15 Conflict. In the event of any conflict between the
terms of this Administrative Services Agreement and the Retrocession Agreement,
the terms of the Retrocession Agreement shall control.
* * * * *
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IN WITNESS WHEREOF, this Administrative Services Agreement has been
duly executed by a duly authorized officer of each party hereto as of the date
first above written.
LASALLE RE LIMITED
By: \s\ Guy D. Hengesbaugh
-----------------------------------------
Name: Guy D. Hengesbaugh
Title: President and Chief Executive
Officer
ENDURANCE SPECIALTY INSURANCE LTD.
By: \s\ Kenneth J. LeStrange
-----------------------------------------
Name: Kenneth J. LeStrange
Title: Chief Executive Officer