EXHIBIT 10.34
STD(CM)(TP)G93 Member Code: 53624
LLOYD'S SECURITY AND TRUST DEED
(Letter of Credit and Bank Guarantee)
THIS DEED is made the 29th day of November One thousand nine hundred and ninety
six BETWEEN PXRE LIMITED whose registered office is at 29 ABINGDON ROAD,
KENSINGTON, LONDON W8 6AM and whose registered number is 3099078 (hereinafter
called "the Corporate Member") of the one part and the Society incorporated by
Lloyd's Act 1871 by the name of LLOYD'S (hereinafter called "the Society") of
the other part
WHEREAS:
(A) The Corporate Member has applied to become or already is a corporate
underwriting member of the Society and this Deed is made in
consideration of the Corporate Member's admission to such membership or
of the continuance of its existing membership.
(B) In order to comply with the requirement of the Society that
underwriting members should provide security in respect of their
underwriting business at Lloyd's by way of inter alia Lloyd's Deposit
the Corporate Member has agreed to enter into the covenant hereinafter
contained and has procured that a person approved by the Society to
issue letters of credit or guarantees (hereinafter called "the
Guarantor") will either provide the Trustee with an irrevocable letter
of credit or execute in favour of the Trustee a guarantee in either
case in a form which has been prescribed by the Society.
(C) The Corporate Member has executed at the same time as this Deed or will
shortly execute a deed or deeds (in a form approved by the Secretary of
State under the Insurance Companies Act 1982) entitled Lloyd's Premiums
Trust Deed declaring trusts upon which the premiums and other moneys
received by or on behalf of the Corporate Member in connection with
insurance business other than long term insurance business are to be
held.
NOW THIS DEED made for the consideration aforesaid WITNESSETH and it is hereby
AGREED AND DECLARED as follows:
1. In this Deed unless the context otherwise requires:
Definitions
"the Beneficiaries" means all persons to whom the Corporate
Member is or may at any time before the Termination Date
become financially liable by reason of any default in respect
of any of the Corporate Member's Lloyd's obligations and the
singular has a corresponding meaning
"the Council" means the Council of Lloyd's or (in relation to
any duty responsibility right power or discretion which is
hereby imposed or conferred upon the Council but which has for
the time being been delegated by the Council to the Committee
pursuant to section 6(6)(a) of Lloyd's Act 1982) the Committee
"the Committee" means the Committee of Lloyd's
"funds at Lloyd's" means, at any given time, the amount of the
funds at Lloyd's (as defined in the Membership Byelaw (No. 17
of 1993)) which at that time the Corporate Member is obliged
to maintain in respect of its insurance business other than
long term insurance business under the requirements of the
Council
"insurance" includes assurance reinsurance and reassurance
"Lloyd's obligations" in relation to the Corporate Member
means all underwriting obligations incurred by the Corporate
Member as an underwriting member of the Society at any time
before the Termination Date and includes obligations to the
Society and the Trustees and obligations arising under:
(a) The byelaws regulations rules directions or other
requirements of the Society and
(b) any deed contract instrument or other arrangement of
any kind approved by the Society
but does not include obligations arising in respect of any
letter of credit guarantee or other security given to secure
the performance of any of the said underwriting obligations in
favour of the person giving such guarantee or other security
"long term insurance business" means long term business and
includes ordinary long term insurance business as defined in
the Insurance Companies Act 1982 (or any amendment or
re-enactment thereof)
"the managing agent" means the person for the time being
acting as the Corporate Member's managing agent in respect of
any part of the Corporate Member's underwriting business at
Lloyd's
"the Premiums Trust Deed" means the deed or any one of the
deeds referred to in recital (C) hereof and includes any
further such deed which may hereafter be executed by the
Corporate Member in addition thereto or substitution therefor
"the Premiums Trustees" means the trustees for the time being
of the Premiums Trust Deed
"the Premiums Trust Fund" means the fund of premiums and other
moneys held from time to time by or under the control of the
Premiums Trustees upon the trusts of the Premiums Trust Deed
"property" includes securities and all choses in action
whether the system by which they are recorded held and
transferred is based on written documents or on computer
records or on some combination of the two
"qualifying reserves" means, at any given time, the aggregate
value of any funds at Lloyd's maintained by the Corporate
Member otherwise than under this Deed in respect of its
insurance business other than long term insurance business,
such value being determined as at the most recent valuation
date applicable under the requirements of the Council relating
to funds at Lloyd's and being calculated in accordance with
those requirements
"requirements of the Council" means any requirement imposed by
any byelaw or regulation made under Lloyd's Acts 1871 to 1982,
any condition or requirement imposed or direction given under
any such byelaw or regulation, any direction given under
section 6 of Lloyd's Act 1982, any requirement imposed by or
under any undertaking given to the Society or to the Council
by the Corporate Member or the Covenantor and any other
requirement imposed or direction given by the Council under
Lloyd's Acts 1871 to 1982
"securities" includes shares stock and debentures of all
descriptions whether the system by which they are recorded
held and transferred is based on written documents or on
computer records or on some combination of the two
"Special Reserve Funds" means funds set up in accordance with
arrangements referred to in sections 452 to 456 of the Income
and Corporation Taxes Act 1988 or section 175 of, and Schedule
20 to, the Finance Act 1993 (or in each case any amendment or
re-enactment thereof) and the singular has a corresponding
meaning
"the Termination Date" means the 80th anniversary of the date
of this Deed (so that the perpetuity period applicable hereto
shall be 80 years)
"the Trustees" means the society and the other trustees for
the time being of the trusts hereby created and the singular
has a corresponding meaning
"the Trust Fund" means the letter of credit or guarantee
mentioned in recital (B) hereof and the Corporate Member's
covenant in clause 2(b) hereof and the full benefit of each of
them and all moneys or other property hereafter at any time
paid or transferred to or under the direct or indirect control
of the Trustees upon the trusts hereof and all accumulations
of income and the investments and other property hereafter for
the time being representing the same.
2. In consideration of the Corporate Member's admission as an
Corporate underwriting member of the society (or of the continuance of
Member's such membership) the Corporate member hereby:
Declaration
and (a) with the intention of establishing a binding trust
Covenant for the benefit of the Beneficiaries irrevocably
declares and directs that the Trust Fund shall
henceforth be held by the Trustees upon and with and
subject to the trusts powers and provisions set out
herein;
(b) covenants with the Trustees that if and whenever the
Trustees on or before the Termination Date serve on
the Corporate Member a written demand for the payment
of a sum on account of its funds at Lloyd's the
Corporate Member will within 30 days thereafter pay
such sum to the Trustees to be held by them upon the
trusts hereof
Provided that the Corporate Member's aggregate
liability hereunder shall be limited to the sum for
the time being required from the Corporate Member by
way of funds at Lloyd's less any qualifying reserves;
(c) covenants with the Trustees that as security for the
Corporate Member's foregoing obligation the Corporate
Member will procure that the Guarantor will:
(i) maintain in full force the letter of credit
or guarantee mentioned in recital (B)
hereof; and
(ii) from time to time so renew or extend the
said letter of credit or guarantee that it
shall at all times be valid and enforceable
for at least the next four years;
(d) covenants with the Trustees that whenever any sum is
paid to the Premiums Trustees or otherwise applied
under clause 5(b) hereof the Corporate Member will
thereafter (if so required by the Society) procure
that before any further payment is made to the
Corporate Member out of the future profits of the
Corporate Member's underwriting business at Lloyd's
there shall be paid to the Trustees out of such
profits sums equal in the aggregate to the sum so
paid or applied to be held by the Trustees as an
accretion to the Trust Fund; and
(e) by way of security for the performance of the
foregoing covenant charges the future profits of the
said business with payment of all sums from time to
time payable to the Trustees thereunder (subject to
any prior charge contained in the Premiums Trust
Deed)
and for that purpose and to that extent assigns the
said profits to the Trustees to hold upon the trusts
hereof.
3. The Trustees shall hold the Trust Fund upon trust that they
Trust to Sell may either allow the same or any part of it to remain as
or Retain actually invested so long as they think fit or may at their
discretion sell call in or convert into money the same or any
part of it and shall invest the moneys produced thereby and
any other capital moneys held upon the trusts hereof in any
investments hereby authorised with power to vary or transpose
any investments for others hereby authorised.
4. The Trustees shall stand possessed of the Trust Fund and the
Powers of income thereof:
Appointment
and (a) upon such trusts for the benefit of the Corporate
Determination Member or the Beneficiaries or any one or more of
them exclusive of the others in such shares and
subject to such terms and limitations and with such
discretionary trusts and powers exercisable by such
persons as the Society shall from time to time (for
the purpose for promoting the effective securing
of the Corporate Member's Lloyd's obligations or
the beneficial and convenient execution and
administration of the trusts hereof) by deed or
deeds revocable or irrevocable executed before the
Termination Date but without infringing the rule
against perpetuities appoint;
(b) upon trust if the Society shall at any time or times
before the Termination Date by deed declare that the
trusts hereby created are determined in respect of
the Trust Fund or any part of it to pay and transfer
the same to the Corporate Member absolutely.
5. In default of and subject to any such appointment or
Trusts declaration the Trustees shall hold the Trust Fund and its
income upon the following trusts:
(a) Until the Termination Date the income of the Trust
Fund shall be held upon and subject to the following
trusts and powers:
(i) subject as hereinafter provided upon trust
for the Corporate Member absolutely;
(ii) if and whenever the Trustees determine that
an event has occurred which brings into
operation any of the trusts or powers
contained in clause 5(b) hereof then
(subject to those trusts and powers) upon
trust to accumulate the subsequent income
and add it to the capital of the Trust Fund;
(iii) whenever the income is subject to
accumulation as aforesaid the Trustees may
at their discretion (exercisable in
accordance with the requirements of the
Council) by written instrument declare that
accumulation shall cease whereupon the
subsequent income shall be subject to all
the provisions of this clause 5(a);
(b) Until the Termination Date the Trust Fund and its
income shall be held upon and subject to the
following trusts or powers:
(i) if and whenever the Corporate Member shall
make default in respect of any of the
Corporate Member's Lloyd's obligations the
Trustees may apply the Trust Fund or its
income or any part thereof in discharging or
making good such default in such manner and
to such extent as the Trustees think fit
(whether by payment direct to the
Beneficiary affected reinsurance purchase of
claims or returns of premiums or otherwise);
(ii) if and whenever it appears to the Trustees
from a certificate or report of auditors
approved by the Council that either
(aa) insufficient assets are available in
the Premiums Trust Fund to meet the
Corporate Member's Lloyd's
obligations; or
(bb) the Corporate Member has sustained
on a closed underwriting account an
ascertained loss which has not been
funded;
The Trustees may pay or apply the Trust Fund
or its income or any part thereof in any
manner directed by the Premiums Trust Deed
for the payment or application of the
Premiums Trust Fund or may pay the same to
the Premiums Trustees as an accretion to the
Premiums Trust Fund;
(iii) if and whenever it shall be established to
the satisfaction of the Trustees that any
person (including the Society) has at any
time (with or without the knowledge and
consent of the Corporate Member) in good
faith applied moneys not belonging to the
Corporate Member in or towards the discharge
of any claim accepted by the managing agent
upon any contract of insurance underwritten
at Lloyd's by or on account of the Corporate
Member the Trustees may act under sub-clause
(b)(i) above as if the Corporate Member was
in default in respect of such claim and as
if the person so applying such moneys was a
Beneficiary;
(c) Subject as aforesaid the Trust Fund and its income
shall be held upon the following trusts:
(i) if before the Termination Date the Corporate
Member shall cease (for any reason
whatsoever) to be a person obliged under the
requirements of the Council maintain funds
at Lloyd's and it shall be established to
the satisfaction of the Trustees that all
the Corporate Member's Lloyd's obligations
have been discharged or otherwise finally
provided for the Trustees shall hold the
Trust Fund and its income upon trust for the
Corporate Member absolutely;
(ii) subject as aforesaid the Trustees shall at
the Termination Date pay and transfer the
Trust Fund and its income to the Premiums
Trustees as an accretion to the Premiums
Trust Fund and to be held by them upon the
trusts of the Premiums Trust Deed;
(d) Subject as aforesaid the Trust Fund and its income
shall be held upon trust for the Corporate Member
absolutely.
6. Notwithstanding anything hereinbefore contained:
Release and
Advancement (a) The Society may at any time or times before the
Termination Date:
(i) by deed release wholly or in part all or any
of the discretionary trusts or powers hereby
conferred on the Trustees in respect of the
whole or any part of the income or capital
of the Trust Fund; or
(ii) by written instrument release wholly or in
part all or any of the Corporate Member's
outstanding obligations under clause 2
hereof;
(b) Section 32 of the Trustee Act 1925 shall apply to the
Trust Fund but as if all the provisos in subsection
(1) were omitted.
7. Subject to the requirements of the Council:
Powers of
Investment (a) Moneys to be invested hereunder may be applied or
invested in the purchase of any investments or
property for the time being authorised by the Council
for the investment of Lloyd's Deposits (whether
producing income or not and whether properly
described as investments or not and whether or not
within the range of investments authorised by law for
the investment of trust funds);
(b) Securities comprised in the Trust Fund may be
deposited with or lent (with or without security) to
any incorporated company or building society or bank
or discount house or local or governmental authority
other than any of the following:
(i) the corporate Member itself;
(ii) any company which is an associate of the
Corporate Member for the purposes of section
435 of the Insolvency Act 1986 (or any
amendment or re-enactment thereof);
(iii) any other corporate member of the Society.
(c) Any part of the Trust Fund may be pooled with other
property held in the names or under the control of
the Trustees or of the Trustees jointly with other
trustees upon the trusts of other Lloyd's Deposits or
of Lloyd's Special Reserve Funds or Premiums Trust
Funds including the Premiums Trust Fund and may
accordingly be deposited or otherwise applied
together with such other sums and without any
obligation to keep them separate;
(d) Moneys may be invested in securities or property in
any part of the world which are recorded held and
transferred by an officially established or
officially regulated system which is based wholly or
partly on computer records (including in particular
the systems currently operated in the USA under the
names of the "Fedwire" and the Depository Trust
Company).
8. In the administration of the trusts hereof
the Trustees shall have the following powers
in addition
Other Powers to those conferred on them by law:
(a) Power to cause or permit the Trust Fund or
any part of it to be held in the name or
under the direct or indirect control of any
nominee approved for the purpose by the
Council (whether or not one of the Trustees
and whether resident within or outside the
United Kingdom) and to pay the remuneration
and expenses of such nominee out of the
capital or income of the Trust Fund;
(b) Power to participate (whether directly or indirectly
through one or more nominees) in any system for the
recording holding or transferring of securities or
any choses in action which is based wholly or partly
on computer records and which is officially
established or officially regulated in any part of
the world (including in particular any system for the
transfer of securities established by the Bank of
England and the Stock Exchange under the Stock
Transfer Act 1982) and including power (when
participating indirectly) to allow a nominee for the
purpose of such participation to mix property
comprised in the Trust Fund with other property held
by that nominee for that purpose;
(c) Power to exercise the voting powers conferred on them
as the holders of any securities from time to time
comprised in the Trust Fund and to concur in and make
any arrangements in connection with any
reconstruction amalgamation or winding up of any
company whose securities are so comprised as if the
Trustees were absolute owners beneficially entitled;
(d) Power to appropriate any investment or property from
time to time forming part of the Trust Fund in its
actual state of investment to or towards any share or
interest in the Trust Fund upon making such
valuations as the Trustees think fit and without
obtaining the consent of any person;
(e) Power at any time or times by revocable written
instrument to delegate to any person for any period
and in any manner and upon any terms (including power
for the delegate to sub-delegate) the exercise of any
of the administrative powers or discretions hereby
conferred on them without being liable for the acts
or defaults of any such delegate or sub-delegate or
for any loss to the Trust Fund resulting therefrom
the power at any time by written instrument to revoke
any such delegation, and in particular power so to
delegate their powers under clause 3 hereof to any
person who appears to them to be fit and proper and
who is an authorised or exempted person within the
meaning of the Financial Services Act 1986 (or any
amendment or re-enactment thereof);
(f) Power to raise and pay out of the Trust Fund (without
prejudice to their lien thereon) any taxes charges
expenses or other outgoings for which they may be
accountable or liable as Trustees hereof or otherwise
incurred by the Society or Trustees (in whatever
capacity) in connection with these presents or the
Corporate Member's membership of the Society or
anything done in connection therewith and in this
clause 8(f) "taxes" includes any liability of the
Trustees or the Society to pay to any person (whether
by way of indemnity or otherwise) any amount for or
on account of taxes however the rights of that person
against the Trustees or the Society may arise.
9. (a) Nothing herein contained shall
entitle any Beneficiary to receive
any account of the Trust
Accounts and Fund or its income unless the Trustees have decided
Apportionment to pay or apply some part thereof for his benefit and
have notified him of such decision in writing.
(b) All income of the Trust Fund shall be deemed to
accrue wholly on the date of receipt and shall not be
apportionable in respect of time.
10. (a) The Society shall be entitled to
remuneration for acting as a trustee
in accordance with
Society as terms and conditions prescribed by the requirements
Trustee of the Council.
(b) The Society may retain for its own benefit any fee
commission or share of commission to which it may
become entitled by reason of any deposit loan or
other investment or application of the Trust Fund or
any part of it made in the Society's name.
(c) In the professed execution of the trusts and powers
hereof neither the Society nor the Council nor the
Committee nor any other committee sub-committee or
body of persons nor any other agent employee or
person through or by which or whom the Society the
Council or the Committee may act shall in any
circumstances incur any liability to the Corporate
Member or to any Beneficiary for negligence.
11. (a) The statutory power of appointing
new Trustees shall apply to the
trusts hereby
Trustees created and shall at all times be vested in the
Society.
(b) The Society may at any time by deed remove any
Trustee (but shall not remove a sole Trustee without
appointing at least one other in his place).
(c) A corporation may be appointed as Trustee or
custodian trustee whether or not it is within the
statutory definition of trust corporation.
(d) A trust corporation shall be entitled to remuneration
for its services in accordance with its normal
published terms from time to time and any other
Trustee (including a corporation) engaged in any
profession or business shall be entitled to be paid
all usual professional or proper charges for business
transacted time expended and acts done by him or any
partner or employee of his in connection with the
trusts hereof including acts which a trustee not
being in any profession or business could have done
personally.
(e) Any individual Trustee may act as an officer or
employee of any company whose securities are
comprised in the Trust Fund or of any subsidiary of
any such company and may retain for himself any
remuneration which he may receive as such officer or
employee notwithstanding that any votes or other
rights attached to any such securities may have been
instrumental either alone or in conjunction with
other matters or by reason of their non-exercise in
procuring or continuing for him his position as such
officer or employee or that his qualification for any
such position may be constituted wholly or partly by
the holding of such securities.
(f) In the professed execution of the trusts and powers
hereof no Trustee (including the Society) shall be
liable for any loss to the Trust Fund arising by
reason of any improper investment made in good faith
or the negligence or fraud of any delegate or agent
appointed or employed by him or by any other Trustee
(although such appointment or employment was not
strictly necessary or expedient) or by reason of any
mistakes or omissions made in good faith by any
Trustee or by reason of any other matter or thing
except wilful and individual wrongdoing on the part
of the Trustee who is sought to be made so liable.
12. (a) This Deed shall be read and
construed and take effect in all
respects in accordance with
English Law English law.
(b) The parties hereto irrevocably and unconditionally
submit for all purposes of and in connection with the
Deed to the exclusive jurisdiction of the English
Courts.
13. The marginal notes herein contained are for
reference only and shall not control the
meaning or
Marginal effect of this Deed.
Notes
IN WITNESS whereof the parties hereto have duly executed this
instrument as a deed the day and year first before written
EXECUTED AS A DEED AND
DELIVERED BY PXRE LIMITED
acting by
/s/ Gerald L. Radke
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Director
/s/ Sanford M. Kimmel
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Director/Secretary
The common Seal of Lloyd's was hereunto affixed in
the presence of [SEAL]
Authorised Signatory