QUOTA SHARE REINSURANCE AGREEMENT
THIS QUOTA SHARE REINSURANCE AGREEMENT (this "Agreement"), made and
entered into as of November 30, 2000 by and between TRANSNATIONAL INSURANCE
COMPANY, a Connecticut property-casualty insurance company (the "Company"), and
PXRE REINSURANCE COMPANY, a Connecticut reinsurance company (the "Reinsurer").
WITNESSETH
WHEREAS the Company has adopted a plan of complete liquidation pursuant
to which Reinsurer will assume all of the outstanding insurance policies of the
Company and receive distributions of all of the assets and other liabilities of
the Company, such that the Company shall retain only the minimum capital surplus
needed to maintain its charter, insurance licenses and surplus lines
authorizations, in a tax-free liquidation pursuant to Section 332 of the
Internal Revenue Code;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE 1
BUSINESS COVERED
The Reinsurer accepts and assumes the Policy Liabilities (as defined
below) subject to any and all defenses, offsets and counterclaims to which the
Company would be entitled with respect to such Policy Liabilities, it being
expressly understood and agreed by the parties hereto that no defenses, offsets
or counterclaims are waived by the execution of this Agreement or consummation
of the transactions contemplated hereunder and that as of the Effective Date,
the Reinsurer shall be fully subrogated to all such defenses, offsets and
counterclaims.
ARTICLE 2
COVER
With respect to any and all agreements or policies of insurance or
indemnity, or agreements or treaties of reinsurance to which the Company is a
party, including, without limitation, all binders, certificates, quotes,
declarations, surety bonds, performance bonds, or otherbonds (each an "Insurance
Policy" and, collectively, the "Insurance Policies"), the Company hereby cedes,
and the Reinsurer hereby accepts as quota share reinsurance, one
hundred percent (100%) of the amount of Policy Liabilities.
ARTICLE 3
COMMENCEMENT AND TERMINATION
This Agreement shall become effective as of 12:01 A.M. Eastern Standard
Time on the date hereof (the "Effective Date"), and shall remain in full force
and effect until all obligations of the parties under this Agreement have been
fully discharged.
ARTICLE 4
POLICY LIABILITIES
The term "Policy Liabilities" shall mean all gross liabilities and
obligations of the Company based upon or arising out of the Insurance Policies
(excluding liabilities and obligations paid or otherwise discharged prior to the
Effective Date) before deduction for all applicable cessions under the Company's
ceded reinsurance programs and, in addition, shall include (i) all premium taxes
and retaliatory taxes attributable to the Insurance Policies and (ii) losses,
liabilities, costs and expenses (A) arising out of the Company's participation
in assigned risk plans, guaranty funds or governmentally mandated programs or
associations of any kind which are predicated in any way on the business
reinsured hereunder or the premium volume generated by the Insurance Policies,
regardless of when the losses, liabilities, costs or expenses are incurred, any
premium, loss or charge is assessed, or any policy under any such plan, program
or association is written, (B) arising out of the handling of any claim under
any Insurance Policy, including, but not limited to, liability arising out of
alleged or actual bad faith or negligence in rejecting a settlement within any
policy limits, in the duty to defend, in the preparation of the defense, in the
trial of any action against any policyholder or in the preparation or
prosecution of an appeal consequent upon such action and (C) arising out of
claims of reinsurers relating to the Insurance Policies, whether for additional
premiums or otherwise.
ARTICLE 5
ORIGINAL CONDITIONS
All reinsurance under this Agreement shall be subject to the same terms,
rates, conditions and waivers, and to the same modifications, alterations and
cancellations as the respective Insurance Policies (except that in the event of
the insolvency of the Company the provisions of Article 12 of this Agreement
shall apply). The Reinsurer accepts and assumes the Policy Liabilities subject
to any and all defenses, offsets and counterclaims to which the Company would be
entitled with respect to such Policy Liabilities, it being expressly understood
and agreed by the parties hereto that no defenses, offsets or counterclaims are
waived by the execution of this Agreement or consummation of the transactions
contemplated hereunder and that as of the Effective Date, the Reinsurer shall be
fully subrogated to all such defenses, offsets and counterclaims.
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ARTICLE 6
ADMINISTRATION, LOSSES AND LOSS SETTLEMENTS
As of the Effective Date, the Company hereby assigns and the Reinsurer
hereby assumes sole responsibility for the payment of all losses and loss
adjustment expenses assumed herein under the Insurance Policies and the
administration and servicing of all aspects of the Insurance Policies,
including, but not limited to, the defense, adjustment, settlement and payment
of all claims arising under the Insurance Policies and the recovery of salvage
and subrogation for any losses incurred under the Insurance Policies. In
addition, the Reinsurer is hereby authorized to take such further actions as
may be necessary or desirable to effect the transactions contemplated by this
Agreement. The Reinsurer shall be entitled to the full benefit of all salvage or
subrogation recoveries. The Reinsurer shall bear all the expenses in connection
with the administration and servicing of the Insurance Policies incurred on or
after the Effective Date. The Reinsurer shall be permitted to delegate such
administrative duties and obligations but shall remain solely responsible for
the performance of such duties and obligations. If the Company determines in
its reasonable judgment that the manner of the performance of payment,
administrative or servicing responsibilities by the Reinsurer, or any party to
which such responsibilities may have been delegated, could be materially
detrimental to the Company or its business with respect to one or more of the
Insurance Policies, the Company may elect to resume sole responsibility for
payment, administration and servicing with respect to such Insurance Policies;
provided, however, that if the Company so resumes responsibility, the Company
may not settle any claim in excess of $25,000 without the Reinsurer's prior
written consent, which consent shall not be unreasonably withheld or delayed.
After the Effective Date, the Company shall within 30 days following the
Company's receipt of notice of the commencement of any claim, lawsuit or action,
or within such shorter period as may be necessary to enable the Reinsurer to
respond timely thereto (provided the Company receives such timely notice
itself), give timely notice to the Reinsurer of any claims, lawsuits or actions
made or brought against the Company and arising under or in connection with the
Insurance Policies and shall furnish to the Reinsurer copies of any summons and
complaint in connection therewith. The Reinsurer shall assume the defense of the
Company. The Reinsurer shall keep the Company informed of the progress of all
litigation handled by the Reinsurer in which the Company is a named party.
The Reinsurer shall indemnify the Company against, and hold it harmless
from, all costs, expenses, and reasonable attorneys' fees incurred in connection
with the Reinsurer's administration and servicing of the Insurance Policies,
including, but not limited to, punitive or exemplary damages or any damages,
settlements, judgments or awards of any kind whatsoever arising out of the
Reinsurer's handling of claims under the Insurance Policies or any other acts,
errors, or omissions pursuant to the terms of this Agreement. In the event that
the Company shall be required to pay any losses or loss adjustment expenses, or
any such costs, expenses or fees, the Reinsurer will reimburse the Company
promptly upon demand, but in no event later than five days following such
demand.
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ARTICLE 7
ASSIGNMENT OF REINSURANCE AGREEMENTS
As of the Effective Date, the Company shall assign, transfer and
convey, and the Reinsurer shall be bound by and assume, any and all rights and
obligations of the Company under any reinsurance agreement under which the
Company is the cedent to the extent that such reinsurance agreement relates to
the Insurance Policies ("Retrocession Agreement"), including amounts held by or
which may become due from reinsurers for losses or loss adjustment expenses on
the Insurance Policies; provided, however, that the foregoing assignment shall
be null and void immediately upon the filing of any petition or initiation of
any proceeding for the supervision, rehabilitation, conservation, or liquidation
of the Reinsurer or other proceedings for the protection of the Reinsurer's
creditors, which petition or proceedings shall have resulted in a finding by a
court or insurance regulator of competent jurisdiction of the insolvency of the
Reinsurer.
The Company shall, if reasonably requested by the Reinsurer, aid the
Reinsurer, at the Reinsurer's expense, in collection of all amounts due in
respect of the Policy Liabilities from reinsurers. The collectibility of such
reinsurance shall be the ultimate responsibility of the Reinsurer and shall be
at the risk and for the account of the Reinsurer in the event such reinsurance
is not collected.
ARTICLE 8
PREMIUMS; CONSIDERATION
The Reinsurer shall be entitled to 100% of all premiums and other
consideration received after the Effective Date by the Company or the Reinsurer
with respect to the Insurance Policies. The Company shall promptly remit and
hereby assigns to the Reinsurer any premiums and other consideration received by
it in respect of any of the Insurance Policies. Furthermore, with respect to any
such remittance the Company shall also promptly furnish Reinsurer with
appropriate information pertaining thereto to the extent the Company has such
information (e.g. the nature of the payment, source of funds, Insurance Policy
identification and period or periods to which it relates and any special rates
or instructions accompanying same). Upon execution hereof, the Reinsurer shall
assume the responsibility for billing and collecting premiums.
As consideration for the assumption of the Policy Liabilities by the
Reinsurer, the Company (i) shall transfer to the Reinsurer admitted assets
having a value equal to the Company's net unearned premium reserve and loss and
loss adjustment expenses reserves (including losses that have been incurred but
not reported), if any, attributable to the Insurance Policies, determined in
accordance with statutory accounting principles as prescribed or permitted by
the Connecticut Insurance Department, consistently applied, determined as of the
Effective Date, and (ii) does hereby assign to the Reinsurer, pursuant to
Article 7 hereof, its rights under all Retrocession Agreements.
Settlements of amounts due pursuant to this Article 8 shall occur on
the Effective Date.
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ARTICLE 9
REPORTS
Within 30 days after the end of each calendar quarter, the Reinsurer
shall furnish to the Company reports of transactions relating to the Insurance
Policies for said quarter, including all losses and allocated loss adjustment
expenses reserved, paid, and outstanding, and such other information in such
form as is reasonably requested by the Company. The Reinsurer shall prepare at
its expense and shall furnish to the Company such information and details or
transactions relating to the Insurance Policies as may be reasonably necessary
for the Company to prepare its financial statements and tax returns and to
comply with the requirements of the regulatory authorities having jurisdiction
over the Company. The Reinsurer shall provide the Company and its
representatives with continuing access as the Company may reasonably request to
the books, records and personnel of the Reinsurer relating to this Agreement,
and any administrator appointed by the Reinsurer, with respect to the Insurance
Policies and the administration thereof by the Reinsurer, such access to be
during regular business hours and upon reasonable notice.
ARTICLE 10
ERRORS AND OMISSIONS
Any inadvertent neglect, delay, omission or error shall not be held to
relieve either party hereto from any liability which would attach to it
hereunder if such neglect, delay, omission or error had not been made, providing
such neglect, delay, omission or error is rectified as soon as reasonably
practicable after discovery and will not prejudice the other party.
ARTICLE 11
BOOKS AND RECORDS
The Company shall transfer to the Reinsurer, or any administrator
appointed by the Reinsurer, the originals or copies of all books, records and
papers of the Company in its possession in connection with the Insurance
Policies, provided that the Reinsurer shall not destroy any such documents
without at least 30 days' written notice to the Company, during which time the
Company shall have the right to take possession of such documents.
ARTICLE 12
DISPUTE RESOLUTION
As a condition precedent to any right of action hereunder, if any
dispute shall arise between the Company on the one hand and Reinsurer on the
other hand, with reference to the interpretation or performance of this
Agreement, including the formation or validity thereof, or their rights with
respect to any transaction involved, whether such dispute arises before or after
the termination of this Agreement, such dispute, upon the written request of
either party, shall be submitted for resolution by arbitration to be held in New
York, New York. Within 30
5
days after receipt of such written request, each party shall select one
arbitrator (for a total of two), and such selected arbitrators shall select a
third arbitrator within 60 days after receipt of such written request for
arbitration. If either party fails to select an arbitrator within such time
period, the arbitrator that was timely selected by the other party shall serve
as the sole arbitrator. If the two arbitrators fail to agree upon the selection
of a third arbitrator within the time limit allowed, the third arbitrator shall
be selected by the two arbitrators from a panel of five arbitrators proposed by
the American Arbitration Association or, if the two arbitrators fail to agree
upon a selection within 10 days, the third arbitrator shall be selected in
accordance with the rules of the American Arbitration Association. All
arbitrators shall be active or retired disinterested officers of a property and
casualty insurance or reinsurance company. No arbitrator shall be or have been
affiliated with or employed by any party hereto or their respective affiliates.
The arbitrators shall interpret this Agreement as an honorable
engagement and not merely as a legal obligation; they are relieved of all
judicial formalities and may abstain from following the strict rules of law and
they shall make their award with a view to effecting the general purpose of this
Agreement in a reasonable manner rather than in accordance with a literal
interpretation of the language. The arbitration shall occur in a mutually
acceptable location.
The decision in writing of any two arbitrators, or of the sole
arbitrator in the event of untimely appointment, 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, and an
appeal of such award may be made upon the grounds provided for in the Federal
Arbitration Act.
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. If the panel consists of only one arbitrator
due to the failure to timely appoint a party arbitrator, each party shall pay
one-half of the fees and expenses of such arbitrator.
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ARTICLE 13
INSOLVENCY PROVISIONS
In the event of the insolvency of the Company, payments due the Company
on all reinsurance made, ceded, renewed or otherwise becoming effective under
this Agreement shall be payable by Reinsurer directly to the Company or to its
liquidator, receiver, or statutory successor on the basis of the liability of
the Company under the policy or policies reinsured, without diminution because
of the insolvency of the Company. It is agreed and understood, however, (i) that
in the event of the insolvency of the Company, Reinsurer shall be given written
notice of the pendency of a claim against the Company on any Insurance Policy
within a reasonable time after such claim is filed in the insolvency proceeding
and (ii) that, during the pendency of such claim, Reinsurer may investigate such
claim and interpose, at its own expense, in the proceeding where such claim is
to be adjudicated any defenses which it may deem available to the Company or its
liquidator, receiver or statutory successor. Nothing in this Agreement shall
give any insured or any other person any rights hereunder against Reinsurer with
respect to any Insurance Policy reinsured hereunder or otherwise.
It is further understood that any expense incurred by Reinsurer
pursuant to the previous paragraph shall be chargeable, subject to court
approval, against the Company as part of the expense of liquidation to the
extent of a proportionate share of the benefit which may accrue to the Company
solely as a result of the defense undertaken by Reinsurer. Where two or more
assuming reinsurers are involved in the same claim and a majority in interest
elects to interpose defenses to such claim, the expense shall be apportioned in
accordance with the terms of this Agreement as though such expense had been
incurred by the Company.
In the event of any insolvency of Reinsurer, all of the services
performed by Reinsurer pursuant to Article 6 may, at the Company's sole option,
be assumed by the Company or the Company's designee. Reinsurer shall cooperate
fully in the transfer of services, and all books and records, to the Company or
the Company's designee, so that the Company or its designee will be able to
perform the services pursuant to Article 6 following the insolvency of Reinsurer
without interruption.
In the event of any such insolvency, Reinsurer will be responsible for
all costs incurred in either restoring such services with the Company, or
obtaining an alternative provider of the services with the Company's designee.
In addition, the Company or its designee shall be entitled to reimbursement for
all fees and expenses incurred in connection with the administration and
servicing of the Insurance Policies, including all costs, expenses and
attorneys' fees incurred in connection with the defense of any claims, lawsuits
or actions made or brought against the Company, including, without limitation,
punitive or exemplary damages or any damages, settlements, judgments or awards
of any kind whatsoever arising out of the Company's handling of claims under the
Insurance Policies.
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ARTICLE 14
GOVERNING LAW
This agreement shall be governed by and construed and enforced in
accordance with the laws of the state of New York (without regard to principles
of conflicts of law which would apply the laws of any other jurisdiction).
ARTICLE 15
SEVERABILITY
If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction to be invalid, void or unenforceable,
the Company and the Reinsurer each directs that such court interpret and apply
the remainder of this Agreement in the manner that it determines most closely
effectuates their intent in entering into this Agreement, and in doing so
particularly take into account the relative importance of the term, provision,
covenant or restriction being held invalid, void or unenforceable.
ARTICLE 16
ASSIGNABILITY
This Agreement may not be assigned by either party without the written
consent of the other party, provided, however, that the Company may assign this
Agreement to any other individual, partnership, firm, corporation, association,
trust, unincorporated organization or other entity, as well as any syndicate or
group that would be deemed to be a person under Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended, that directly, or indirectly
through one or more intermediaries, controls, is controlled by, or is under
common control with, the Company or United States Fire Insurance Company ("US
Fire") without the consent of the Reinsurer, provided that such assignment will
not release the Company of any of its obligations hereunder. This Agreement is
not intended to confer any rights upon any person other than the parties hereto
and US Fire and their respective successors and permitted assigns.
ARTICLE 17
REINSURANCE CREDIT; REINSURANCE SECURITY
SECTION 17.01 Notwithstanding any other provision of this Agreement to
the contrary, if the Reinsurer becomes unauthorized in any applicable State or
the District of Columbia or any other jurisdiction where authorization is
required by insurance regulatory authorities in order for the Company to obtain
full credit on its statutory annual statements for the reinsurance being
provided under this Agreement, the Reinsurer shall establish on behalf of the
Company such escrow accounts, trust accounts, letters of credit, premiums
withheld by the Company, similar funds or a combination thereof as required by
law to permit the Company to obtain full credit for such reinsurance in such
jurisdiction upon the request of the Company. The Reinsurer will have the option
of determining the method of funding to be utilized.
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SECTION 17.02 The Reinsurer shall promptly notify the Company of any
loss of license or authorization or other change or condition which, in the
reasonable judgment of the Reinsurer may affect the ability of the Company to
obtain credit for such reinsurance.
ARTICLE 18
NOTICES
Any notice or other communication required or permitted hereunder shall
be in writing and shall be deemed given if delivered personally, by facsimile
(which is confirmed) or sent by overnight courier (providing proof of delivery),
to the parties at the following address:
If to the Company, to:
Transnational Insurance Company
c/o United States Fire Insurance Company
P.O. Box 1973
305 Madison Avenue
Morristown, New Jersey 07960-1973
Attention: Mary Jane Robertson
Facsimile: 973-490-6612
with a copy to:
Shearman & Sterling
Commerce Court West
199 Bay Street
Suite 4405, P.O. Box 247
Toronto, Ontario MSL lE8
Attention: Brice T. Voran
Facsimile: (416) 360-2958
If to the Reinsurer, to:
PXRE Reinsurance Company
399 Thornhall Street, 14th Floor
Edison, New Jersey 08837
Attention: Chief Financial Officer
Facsimile: (732) 906-9157
with a copy to:
Morgan Lewis Bockius LLP
101 Park Avenue
New York, New York 10078
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Attention: F. Sedgwick Browne
Facsimile: (212) 309-6273
Any party may, by notice given in accordance with this Article 18 to the
other parties, designate another address or person for receipt of notices
hereunder provided that notice of such a change shall be effective upon receipt.
ARTICLE 19
AMENDMENTS
This Agreement may not be changed, altered or modified unless the same
shall be in writing executed by the parties hereto.
ARTICLE 20
ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the parties
hereto relating to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, negotiations and discussions,
whether oral or written, of the parties, and there are no general or specific
warranties, representations or other agreements by or among the parties in
connection with the entering into of this Agreement or the subject matter hereof
except as specifically set forth or contemplated herein or therein.
ARTICLE 21
COUNTERPARTS
This Agreement may be executed and delivered in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
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IN WITNESS WHEREOF, the parties have entered into this Quota Share
Agreement as of the date first written above.
TRANSNATIONAL INSURANCE COMPANY
By JAMES F. DORE
---------------------------
Name: James F. Dore
Title: Chief Financial Officer and
Executive Vice President
PXRE REINSURANCE COMPANY
By GORDON FORSYTH, III
---------------------------
Name: Gordon Forsyth, III
Title: Executive Vice President
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ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT (the "Agreement") is entered into as of November
30, 2000 between Transnational Insurance Company, a Connecticut corporation (the
"Company"), and PXRE Reinsurance Company, a Connecticut corporation (the
"Assuming Company").
WHEREAS the Company has adopted a plan of complete liquidation pursuant to
which Assuming Company will assume all of the outstanding insurance policies of
the Company and receive distributions of all of the assets and other liabilities
of the Company, such that the Company shall retain only the minimum capital
surplus needed to maintian its charter, insurance licenses and surplus lines
authorizations, in a tax-free liquidation pursuant to Section 332 of the
Internal Revenue Code.
NOW, THEREFORE, IN CONSIDERATION OF the foregoing premises and the mutual
convenats and agreements contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Assumption. Assuming Company agrees to assume, and hereby does assume,
all of the liabilities of the Company existing immediately prior to the Closing
and all liabilities incurred by the Company after the Closing which arise out of
activities of the Company prior to the Closing or out of activities of any
affiliate of the Company prior to the Closing, in each case whether matured or
unmatured, inchoate or choate, and whether known or unknown to Assuming Company
or the Company as of the date hereof, but excluding (i) liability of the Company
arising from the actions or ommissions of United States Fire Insurance ("US
Fire"), or actions or omissions taken or made by Assuming Company or the Company
at the request of US Fire or with US Fire's consent in connection with the
change of control of the Company, as further provided in the Stock Purchase
Agreement dated as of October 5, 2000 between Assuming Company and US Fire and
(ii) any liability for any agreement or policy of insurance or indemnity, or any
agreement or treaty of reinsurance, including, without limitation, all binders,
certificates, quotes, declarations, surety bonds, performance bonds, or other
bonds (each an "Insurance Policy" and collectively, the "Insurance Policy"),
which liability is the subject of the Reinsurance Agreement dated the date
hereof between the Company and Assuming Company (the liabilities assumed but not
excluded, the "Assumed Liabilities"). Assuming Company assumes and accepts all
of the Assumed Liabilities subject to any and all defenses, setoffs and
counterclaims to which the Company would be entitled with respect of such
Assumed Liabilities against third parties, it being expressly understood and
agreed by the parties hereto that no such defenses, setoffs or counterclaims are
waived by execution of this Agreement or the consummation of the transactions
contemplated hereunder, that on the date hereof Assuming Company shall be fully
subrogated to all defenses, offsets and counterclaims and that
Assuming Company shall have the ability to contest, in good faith, any claim or
liability asserted in respect of any Assumed Liability by any individual,
partnership, firm, corporation, association, trust, unincorporated organization
or other entity, as well as any syndicate or group that would be deemed to be a
person under Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(a "Person") other than US Fire or the Company, so long as Assuming Company's
contest of any such claim does not result in a claim of liability or any
security interest, pledge, mortage, lien (including, without limitation,
environmental and tax liens), charge, encumbrance, adverse claim, preferrential
arrangement 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 against US Fire, the Company or any of their
respective assets and properties.
2. Cooperation. The Company shall cooperate fully with Assuming Company in
effecting the transactions contemplated by this Agreement, including, without
limitation, executing and delivering all books, records, files, papers, tapes,
microfilms, electronic storage media and any other documents (each a "Document"
and, collectively, the "Documents") reasonably determined to be necessary by
Assuming Company. The Company and Assuming Company shall, whenever and as often
as reasonably requested to do so by the other party, do such other and further
acts, execute, acknowledge and deliver such Documents and instruments, approvals
or consents as are necessary or proper in order to complete, insure and perfect
the transactions contemplated hereby, including, without limitation, giving the
other parties prompt notice of any matter which such parties believes materially
affects the Assumed Liabilities or the obligations of the parties thereto.
3. Governing Law. This Agreement shall be governend by the laws of the
State of New York applicable to contracts made and performed in such State
without giving effect to any conflict of laws principals that would apply the
laws of any other jurisdiction.
4. Amendment; Assignment. The provisions of this Agreement may not be
amended, waived or modified unless such amendment, waiver or modification is in
writing and signed by the parties hereto. This Agreement may not be assigned by
operation of law or otherwise without the express written consent of Assuming
Company and the Company (which consent may be granted or withheld in the sole
discretion of Assuming Company or the Company); provided, however, that the
Company may assign this Agreement to any other Person that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, the Company or US Fire without the consent of
Assuming Company provided that such assignment wlll not release the Company of
any of its obligations hereunder.
5. Captions. The captions inserted herein are only for the convenience of
reference of the parties and are in no way intended to modify, alter, define or
interpret the obligations of the parties set forth in this Agreement.
Nothing expressed or implied in this Assumption Agreement is intended to
confer upon any Person, other than Assuming Company, US Fire, the Company and
their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Assumption Agreement.
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This Assumption Agreement may be executed in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
6. Notices. All notices, requests, claims, demands or other communications
hereunder shall be in writing and shall be given or made (and shall be deemed to
have been duly given or made upon receipt) by delivery in person, by courier
service, by cable, by fax, by telegram, by telex or by registered or certified
mail (postage prepaid, return receipt requested) to the respective parties
addressed as follows:
(a) if to the Company or its successor:
Transnational Insurance Company
c/o United States Fire Insurance Company
P.O. Box 1973
305 Madison Avenue
Morristown, New Jersey 07960-1973
Fax: (973) 490-6612
Attention: Mary Jane Robertson
with a copy to:
Shearman & Sterling
Commerce Court West
199 Bay Street, Suite 4405
Toronto, Ontario M5L 1E8
Fax: (416) 360-2958
Attention: Brice T. Voran
(b) if to Assuming Company:
PXRE Reinsurance Company
399 Thornhall Street, 14th Floor
Edison, New Jersey 08837
Fax: (732) 906-9157
Attention: James F. Dore
with a copy to:
Morgan Lewis & Bockius LLP
101 Park Avenue
New York, New York 10178
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Fax: (212) 309-6273
Attention: F. Sedgwick Browne
Either party may change the address to which notices and other Documents are to
be sent to it, by notice to the other party hereto.
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IN WITNESS WHEREOF, the parties hereto have caused this Assumption
Agreement to be executed on their behalf by their duly authorized officers as of
the date first written above.
TRANSNATIONAL INSURANCE COMPANY
By: James F. Dore
--------------------------------------
Name: James F. Dore
Title: Chief Financial Officer and
Executive Vice President
PXRE REINSURANCE COMPANY
By: Gordon Forsyth, III
--------------------------------------
Name: Gordon Forsyth, III
Title: Executive Vice President