EXHIBIT 10.19
EXECUTION COPY
DATED 1ST NOVEMBER, 2002
PLATINUM UNDERWRITERS HOLDINGS, LTD.
- AND -
PLATINUM RE (UK) LIMITED
CAPITAL SUPPORT AGREEMENT
SLAUGHTER AND MAY
ONE BUNHILL ROW
LONDON EC1Y 8YY
REF: GWJ/JCD
CA023100048
CONTENTS
CLAUSE PAGE
1. INTERPRETATION........................................................... 1
2. OBLIGATION TO PROVIDE CAPITAL; CAPITAL REPAYMENT......................... 2
3. TERM AND TERMINATION..................................................... 4
4. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999............................. 5
5. REMEDIES AND WAIVERS..................................................... 5
6. AMENDMENTS............................................................... 5
7. SPECIFIC PERFORMANCE..................................................... 5
8. SUBROGATION.............................................................. 6
9. ASSIGNMENT............................................................... 6
10. SEVERABILITY............................................................. 6
11. ENTIRE AGREEMENT......................................................... 6
12. NO PARTNERSHIP........................................................... 6
13. NOTICES.................................................................. 6
14. GOVERNING LAW AND JURISDICTION........................................... 7
15. COUNTERPARTS............................................................. 8
THIS AGREEMENT is made the 1st day of November, 2002
BETWEEN
1. PLATINUM UNDERWRITERS HOLDINGS, LTD., a holding company organised under
the laws of Bermuda ("PLATINUM HOLDINGS")
AND
2. PLATINUM RE (UK) LIMITED, a company incorporated in England (registered
number 4413755) whose registered office is at The St. Paul House, 27
Camperdown Street, London, E1 8DS ("PLATINUM RE UK")
WHEREAS:
(A) Platinum Re UK is a wholly-owned subsidiary of Platinum Regency Holdings
("Regency"), an Irish unlimited company, which is in turn a wholly-owned
subsidiary of Platinum Holdings.
(B) Platinum Re UK has applied to the Financial Services Authority for
authorisation to carry on reinsurance business in the United Kingdom under
Part IV of the Financial Services and Markets Act 2000 ("Authorisation").
(C) Platinum Holdings is prepared to provide capital support to Platinum Re UK
on the terms and subject to the conditions set out in this Agreement.
NOW IT IS HEREBY AGREED as follows:
1. INTERPRETATION
1.1 In this Agreement, references to "SOURCEBOOK" are to the Interim
Prudential sourcebook: Insurers published by the Financial Services
Authority and as amended from time to time.
1.2 In construing this Agreement, unless otherwise specified:
(A) references to clauses are to clauses of this Agreement;
(B) headings to clauses are for convenience only and do not affect the
interpretation of this Agreement;
(C) use of any gender includes the other gender;
(D) references to a "PERSON" shall be construed so as to include any
individual, firm, company or other body corporate, government, state
or agency of a state, local or municipal authority or government
body or any joint venture, association or partnership (whether or
not having separate legal personality);
2
(E) any reference to a "DAY" shall mean a period of 24 hours running
from midnight to midnight;
(F) the expressions "HOLDING COMPANY", "SUBSIDIARY" and "SUBSIDIARY
UNDERTAKING" shall have the meaning given in the Companies Act 1985;
(G) the expressions "MARGIN OF SOLVENCY" and "REQUIRED MINIMUM MARGIN"
shall have the meanings given in the Sourcebook;
(H) references to writing shall include any modes of reproducing words
in a legible and non-transitory form;
(I) a reference to any statute or statutory provision or provision of
the Sourcebook shall be construed as a reference to the same as it
may have been, or may from time to time be, consolidated, amended,
modified or re-enacted;
(J) references to any English legal term for any action, remedy, method
of judicial proceeding, legal document, legal status, court,
official or any legal concept or thing shall in respect of any
jurisdiction other than England be treated as including what most
nearly approximates in that jurisdiction to the English legal term;
and
2. OBLIGATION TO PROVIDE CAPITAL; CAPITAL REPAYMENT
2.1 In the event that the accounts and statements of Platinum Re UK for any
financial year of Platinum Re UK (the "annual financial statements")
deposited by Platinum Re UK with the Financial Services Authority pursuant
to Part I of Chapter 9 of the Sourcebook show that the margin of solvency
of Platinum Re UK, determined in accordance with the rules set out in the
Sourcebook and as shown by the Form 9 filed by Platinum Re UK as part of
such annual financial statements, is less than 200% of the required
minimum margin of Platinum Re UK calculated in accordance with Chapter 2
of the Sourcebook, Platinum Holdings shall within 7 days of the date of
the deposit of such annual financial statements make a loan to Platinum Re
UK in such amount as is necessary to restore the margin of solvency of
Platinum Re UK to a level equal to 200% of such required minimum margin of
Platinum Re UK. For this purpose:
(A) such loan shall be subordinated in accordance with the provisions
set out below; and
(B) in determining the amount to be so advanced by way of subordinated
loan:
(i) regard shall be had only to the gross proceeds of such loan as
an asset;
(ii) in particular, but without limitation, no account shall be
taken in the calculation of the amount required to be advanced
hereunder by way of subordinated loan of the liability to
repay such subordinated loan; and
3
(iii) in particular, but without limitation, no account shall be
taken in such calculation of paragraph 25 of Guidance Note 2.1
in volume 3 of the Sourcebook or any other rule or regulation
from time to time in force with regard to the treatment of
subordinated loans for the purposes of the maintenance of a
minimum margin of solvency.
2.2 Once Platinum Holdings shall have made any loan or loans to Platinum Re UK
pursuant to clause 2.1, in determining whether Platinum Holdings is
obliged to make any further advance to Platinum Re UK pursuant to clause
2.1 in respect of any subsequent financial year of Platinum Re UK, the
provisions of clause 2.1(B) shall apply, mutatis mutandis, in relation to
such loan or loans in determining whether, and if so the extent to which,
any such advance is required to be made.
2.3 Once Platinum Holdings shall have made any loan to Platinum Re UK pursuant
to clause 2.1, where at the end of any subsequent financial year of
Platinum Re UK the annual financial statements of Platinum Re UK for such
financial year show that the margin of solvency of Platinum Re UK,
determined in accordance with Chapter 2 of the Sourcebook (as modified by
the provisions of clause 2.2 above), exceeds 200% of the required minimum
margin of Platinum Re UK as shown by the Form 12 filed by Platinum Re UK
as part of such annual financial statements, Platinum Re UK shall within 7
days of the date of deposit of such annual financial statements repay to
Platinum Holdings (save to the extent prohibited by law from time to time)
such amount as is equal to the lesser of:
(A) the amount by which the margin of solvency of Platinum Re UK,
determined as aforesaid, exceeds 200% of such required minimum
margin of Platinum Re UK; and
(B) the principal amount then outstanding in respect of the loan made by
Platinum Holdings to Platinum Re UK pursuant to clause 2.1.
2.4 (A) Any loan made by Platinum Holdings to Platinum Re UK pursuant to
clause 2.1 shall be interest-free.
(B) Platinum Holdings acknowledges and agrees that (save as set out in
clause 2.3 or as otherwise provided in this Agreement) its rights to
repayment of any amounts advanced by it to Platinum Re UK from time
to time shall only arise and shall in all respects be subject to and
conditional on the prior satisfaction in full of all other
liabilities of Platinum Re UK save for sums due to any members of
Platinum Re UK (in their capacity as such) on a winding-up of
Platinum Re UK.
2.5 (A) The obligations of Platinum Holdings to make advances as provided in
this Agreement shall be absolute and unconditional under any and all
circumstances and shall be continuing obligations and shall not be
satisfied, discharged, impaired or otherwise affected except by
performance thereof in full in accordance with the terms of this
Agreement.
4
(B) Without prejudice to the generality of sub-clause 2.5(A) above,
Platinum Holdings shall not be released or discharged from any of
its obligations under this Agreement, nor shall any of such
obligations be in any way prejudiced or affected by:
(i) the existence of any claim, set-off or other rights which
Platinum Holdings may have at any time against Platinum Re UK
or any other person;
(ii) any amendment of, or addition or supplement to, the terms of
any reinsurance contract to which Platinum Re UK is a party;
(iii) any bankruptcy, insolvency, liquidation, amalgamation,
reconstruction, reorganisation, administration, administrative
or other receivership, or dissolution of Platinum Re UK or
Platinum Holdings; or
(iv) any other thing done or omitted or neglected to be done by any
person or any other dealing, fact, matter or thing which, but
for this provision, might operate to exonerate or discharge
Platinum Holdings from, or otherwise prejudice or affect, any
of Platinum Holdings' obligations under this Agreement.
2.6 Platinum Holdings shall be entitled at its election to discharge its
obligations under this Clause 2 by advancing the relevant amount to
Regency and procuring Regency to advance the same amount to Platinum Re UK
on the same terms, mutatis mutandis, as the terms set out in this
Agreement. In such event, the advance of any amount by Platinum Holdings
to Regency shall be made on the basis that the obligation of Regency to
repay any amount to Platinum Holdings which shall have been advanced to it
hereunder shall be subject to Regency having been repaid such amount by
Platinum Re UK in accordance with Clause 2.3.
3. TERM AND TERMINATION
3.1 This Agreement shall take effect upon receipt by Platinum Re UK of
Authorisation and shall continue in full force and effect until the third
anniversary thereof unless terminated earlier in accordance with the
provisions of sub-clause 3.2 below.
3.2 Platinum Holdings may terminate this Agreement by written notice to
Platinum Re UK with immediate effect in the event that:
(A) Platinum Re UK ceases to write reinsurance business in the United
Kingdom; or
(B) Platinum Holdings or one of its subsidiary companies ceases to own
(directly or indirectly) a majority of the ordinary share capital of
Platinum Re UK.
3.3 On termination of this Agreement whether pursuant to Clause 3.1 or Clause
3.2, Platinum Holdings shall cease to have any further obligations under
clauses 2.1 and 2.2
5
but any such termination shall be without prejudice to Platinum Holdings'
rights under clause 2.3.
4. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
The Parties to this Agreement do not intend that any term of this
Agreement shall be enforceable, by virtue of the Contracts (Rights of
Third Parties) Act 1999, by any person who is not a party to this
Agreement.
5. REMEDIES AND WAIVERS
5.1 No failure or delay on the part of either party in exercising a right,
power or remedy provided by this Agreement or by law shall operate as a
waiver of that right, power or remedy or a waiver of any other rights,
powers or remedies.
5.2 No single or partial exercise of a right, power or remedy provided by this
Agreement or by law shall prevent further exercise of that right, power or
remedy or the exercise of another right, power or remedy.
5.3 Except as otherwise provided herein, the rights, powers and remedies
provided in this Agreement shall be cumulative and not exclusive of any
rights, powers or remedies provided by law.
6. AMENDMENTS
This Agreement may only be amended or varied in writing signed by each of
the parties hereto.
7. SPECIFIC PERFORMANCE
The parties hereto acknowledge that if any of the provisions of this
Agreement were not to be performed in accordance with their specific terms
or were otherwise to be breached, irreparable damage would occur and
damages would not be an adequate remedy. In the event of any such breach,
the aggrieved party shall be entitled, in addition to any other remedy at
law or in equity, to specific performance of the terms hereof and
immediate injunctive or other equitable relief, without the necessity of
proving the inadequacy of money damages as a remedy or of posting any bond
or other security.
8. SUBROGATION
Platinum Holdings shall have no rights (direct or indirect) of
subrogation, contribution, reimbursement, indemnification or other rights
of payment or recovery from any person (including without limitation
Platinum Re UK) for any payments made by Platinum Holdings hereunder, and
Platinum Holdings hereby waives and releases, absolutely and
unconditionally, any such rights of subrogation, contribution,
reimbursement, indemnification and other rights of recovery that it may
now have or hereafter acquire.
6
9. ASSIGNMENT
Neither Party may assign its rights under this Agreement without the prior
written consent of the other. Subject to the foregoing, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the
parties and their respective successors and assigns.
10. SEVERABILITY
If any provision of this Agreement or any part of any such provision is
held to be invalid, unlawful or unenforceable, such provision or part (as
the case may be) shall be ineffective only to the extent of such
invalidity, unlawfulness or unenforceability, without rendering invalid,
unlawful or unenforceable or otherwise prejudicing or affecting the
remainder of such provision or any other provision of this Agreement.
11. ENTIRE AGREEMENT
This Agreement constitutes the whole and only agreement between the
parties in relation to the subject matter of this Agreement and, save to
the extent repeated in this Agreement, supersedes any previous agreement
between the parties with respect thereto.
12. NO PARTNERSHIP
Nothing in this agreement and no action taken by the parties under this
Agreement shall constitute a partnership, association, joint venture or
other co-operative entity between the parties, nor are the terms of this
Agreement intended to constitute the parties a joint employer for any
purpose.
13. NOTICES
13.1 Any notice required or permitted to be given under this Agreement shall be
given in writing to the other party at its address set out below:
if to Platinum Holdings, to:
Platinum Underwriters Holdings, Ltd.,
Clarendon House,
2 Church Street,
Hamilton HM11
Bermuda
Fax number: 441 292 4720
marked for the attention of the Company Secretary
7
if to Platinum Re UK, to:
Platinum Re (UK) Limited,
52, Lime Street,
London, EC3M 7NL
Fax number: 020 7623 6610
marked for the attention of the Company Secretary
or to such other address or fax number, and marked for the attention of
such other person, as may from time to time be notified by the relevant
party to the other party.
13.2 Any such notice shall be sent by first class post or facsimile
transmission (copied by post) or delivered by hand and shall be deemed to
be served:
(A) in the case of post, on the second business day after posting;
(B) in the case of facsimile transmission, upon successful transmission
(or, if the day of sending is not a business day in the place of
receipt, at the opening of business on the first business day in the
place of receipt thereafter); and
(C) in the case of delivery by hand, upon delivery (or, if the day of
delivery is not a business day in the place of receipt, at the
opening of business on the first business day in the place of
receipt thereafter).
14. GOVERNING LAW AND JURISDICTION
14.1 This agreement shall be governed by and construed in accordance with
English law.
14.2 (A) All disputes and differences arising under or in connection with
this Agreement shall be referred to arbitration under the
Arbitration Rules of ARIAS (UK).
(B) The Arbitration Tribunal shall consist of three arbitrators, one to
be appointed by the claimant party, one to be appointed by the
respondent party and the third to be appointed by the two appointed
arbitrators.
(C) The third member of the Tribunal shall be appointed as soon as
practicable (and no later than 28 days) after the appointment of the
two party-appointed arbitrators. The Tribunal shall be constituted
upon the appointment of the third arbitrator.
(D) The Arbitrators shall be persons (including those who have retired)
with not less than ten years' experience of insurance or reinsurance
within the industry or as lawyers or other professional advisers
serving the industry.
(E) Where a party fails to appoint an arbitrator within 14 days of being
called upon to do so or where the two party-appointed arbitrators
fail to appoint a third within 28 days of their appointment, then
upon application ARIAS (UK) will appoint an
8
arbitrator to fill the vacancy. At any time prior to appointment by
ARIAS (UK) the party or arbitrators in default may make such
appointment.
(F) The Tribunal may in its sole discretion make such orders and
directions as it considers to be necessary for the final
determination of the matters in dispute. The Tribunal shall have the
widest discretion permitted under the law governing the arbitral
procedure when making such orders or directions.
(G) The seat of arbitration shall be London.
(H) Each party shall bear the expense of its own arbitrator, and shall
jointly and equally bear with the other the expense of the third
arbitrator and of the arbitration unless otherwise directed by the
arbitrators.
(I) This Clause 14.2 shall survive termination of this Agreement.
15. COUNTERPARTS
15.1 This Agreement may be executed in any number of counterparts, and by the
parties on separate counterparts, but shall not be effective until each
party has executed at least one counterpart.
15.2 Each counterpart shall constitute an original of this Agreement, but the
counterparts shall together constitute but one and the same instrument.
IN WITNESS of which each of the parties has executed this Agreement on the day
and year first above written.
PLATINUM UNDERWRITERS HOLDINGS, LTD.
By: /s/ Jerome T. Fadden Date:
Name: Jerome T. Fadden
Title:
PLATINUM RE (UK) LIMITED
By: /s/ T.J. MAHONEY Date: 31st October, 2002
Name: T. MAHONEY
Title: CEO