EXHIBIT 10.32
DATED 1ST NOVEMBER, 2002
ST. PAUL REINSURANCE COMPANY LIMITED
- and -
PLATINUM RE (UK) LIMITED
- and -
ST. PAUL MANAGEMENT LIMITED
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BUSINESS TRANSFER AGREEMENT
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Slaughter and May
One Bunhill Row
London EC1Y 8YY
Ref: GWJ/GHXC/ESYL
CA021490093
CONTENTS
PAGE
1. INTERPRETATION 2
2. TRANSFER 9
3. AUTHORISATION 11
4. CONDUCT OF BUSINESS BEFORE COMPLETION 12
5. CONSIDERATION 12
6. VAT 12
7. COMPLETION 15
8. APPORTIONMENT 15
9. RISK AND INSURANCE 16
10. EMPLOYEES 16
11. DATA PROTECTION 23
12. NON-COMPETITION 23
13. ASSIGNMENT 25
14. FURTHER ASSURANCE 26
15. ENTIRE AGREEMENT 26
16. REMEDIES AND WAIVERS 26
17. NOTICES 27
18. ANNOUNCEMENTS 27
19. COSTS AND EXPENSES 28
20. COUNTERPARTS 28
21. INVALIDITY 28
22. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999 28
23. CHOICE OF GOVERNING LAW 28
24. ARBITRATION 28
25. CONFLICT 29
SCHEDULES
PAGE
Schedule 1 (Completion arrangements) 31
Schedule 2 (Assumed Employees) 33
Schedule 3 (Business Intellectual Property) 36
Schedule 4 (Shared Intellectual Property) 38
Schedule 5 (Transaction Documents) 39
Schedule 6 (Tangible Assets) 40
Schedule 7 (Bonus Payments) 41
Schedule 8 (Existing Retention Obligations) 42
Schedule 9 (Prorated Retention Obligations) 43
AGREED FORM DOCUMENTS
Licence
THIS AGREEMENT is made the 1st day of November, 2002
BETWEEN:
1. ST. PAUL REINSURANCE COMPANY LIMITED a company incorporated in England
(registered number 01460363) whose registered office is The St. Paul
House, 27 Camperdown Street, London E1 8DS (the "TRANSFEROR")
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 (the "TRANSFEREE")
AND
3. ST. PAUL MANAGEMENT LIMITED a company incorporated in England
(registered number 00972175) whose registered office is at The
St. Paul House, 27 Camperdown Street, London E1 8DS (the "EMPLOYER")
WHEREAS:
(A) The St. Paul Companies, Inc. ("ST. PAUL") and Platinum Underwriters
Holdings, Ltd. ("PLATINUM HOLDINGS") entered into a Formation and
Separation Agreement dated 28 October, 2002 (as such agreement may be
amended from time to time) (the "FORMATION AND SEPARATION AGREEMENT")
setting forth certain terms governing St. Paul's sponsorship of the
organisation of Platinum Holdings and its subsidiaries, actions to be
taken in respect of Platinum Holdings' initial public offering (the
"PUBLIC OFFERING") of its common shares and the ongoing relationships
between St. Paul and its subsidiaries and Platinum Holdings and its
subsidiaries after the effective date of the Public Offering (the
"CLOSING DATE").
(B) Pursuant to the Formation and Separation Agreement, the parties thereto
have agreed to procure that the Transferor will transfer (or procure
the transfer of) the Business Assets to the Transferee on the terms set
out in this Agreement with the intention that the Transferee shall be
entitled to carry on the Business in succession to the Transferor as a
going concern.
(C) The Transferor carries on the Business (as defined in this Agreement)
and (further to an asset transfer agreement entered into between the
Transferor and the Employer on the date hereof) is the beneficial owner
or is otherwise able to procure the transfer of the Business Assets.
(D) The Employer employs individuals working in the Transferor's business.
(E) The Transferor intends to enter into three 100% quota share
retrocession agreements (the "UK QUOTA SHARE RETROCESSION AGREEMENTS")
with Platinum Underwriters Reinsurance Inc. on the date hereof in
respect of certain reinsurance business written or renewed (as
specified
2
in those quota share retrocession agreements) by the Transferor on or
after 1st January, 2002. The Transferor has obtained the consent of the
retrocessionaires in respect of the retrocession covers relating to
this business to include Platinum Underwriters Reinsurance Inc. as a
reinsured under such covers.
(F) The Transferor intends to enter into a 100% quota share retrocession
agreement (the "PLATINUM UK QUOTA SHARE RETROCESSION AGREEMENT") with
the Transferee in respect of certain reinsurance business written after
the Authorisation Date (as defined below) to become effective
immediately following receipt by the Transferee of the Authorisation
(as defined below).
NOW IT IS HEREBY AGREED as follows:-
1. INTERPRETATION
1.1 In this Agreement and the schedules to it, the following words and
expressions, save where the context otherwise requires, shall have the
following meanings:-
"ACT" means Financial Services and Markets Act
2000;
"AGREED FORM" in relation to any document means the
document in a form agreed by the Transferor
and the Transferee and initialled for the
purposes of identification by or on behalf
of them;
"ASSUMED EMPLOYEES" means those individuals who were employed
prior to Completion by the Employer or in
the case of Thomas Mahoney by St Paul Re
Inc. and who are listed in Schedule 2 Part 1
(underwriting staff assigned to the
Business) and in Schedule 2 Part 2 (persons
otherwise carrying out work in the Retained
Business);
"AUTHORISATION" means the authorisation of the Transferee to
carry on reinsurance business in the United
Kingdom of the classes comprised within the
Business under the Act;
"AUTHORISATION DATE" means the date on which Authorisation takes
place;
"BONUS PAYMENTS" means those 2002 annual incentive bonus
payments which are set out in Schedule 7
hereto and are based on 100% of the bonus
targets under the Transferor's 2001 bonus
targets scheme;
3
"BUSINESS" means the business of the Transferor other
than the Retained Business and so that the
expression shall include the Business
Goodwill but shall exclude (i) the
assumption of responsibility for the
liabilities arising in respect of all
reinsurance business entered into or renewed
by the Transferor or the management,
administration and run-off of such
reinsurance business; and (ii) the right to
use the "St. Paul" brand and any other
brand, trade mark, service mark, name,
get-up, logo or device, and any Intellectual
Property and goodwill relating to any of the
foregoing, used from time to time as part of
the insurance branding of the Transferor's
Group;
"BUSINESS ASSETS" means:-
(i) all the assets relating to the
Business (including all the rights
and property relating to the
assets) listed or referred to in
Schedule 6;
(ii) the Business Intellectual Property;
and
(iii) the Business Goodwill and the
Business Renewal Rights;
but excluding:-
(i) the Receivables;
(ii) cash in hand or at the bank used in
the Business;
(iii) amounts recoverable in respect of
Taxation relating to the Business
Assets attributable to periods
ended on or before, or transactions
occurring on or before, Completion;
(iv) the benefit of any reinsurance
contract entered into or renewed by
the Transferor; and
(v) for the avoidance of doubt, any
other item which would be accounted
for as a current asset in respect
of the Business in accordance with
the accounting principles and
practices adopted by the
Transferor;
4
"BUSINESS DAY" means a day (other than a Saturday or
Sunday) on which banks are open for business
(other than solely for trading and
settlement in Euros) in London;
"BUSINESS GOODWILL" means all the goodwill and connection of the
Transferor in its reinsurance business but,
for the avoidance of doubt, such expression
shall not include any of the Transferor's
goodwill in the Retained Business or in the
"St. Paul" brand or any other Intellectual
Property used from time to time as part of
the insurance branding of the Transferor's
Group;
"BUSINESS INTELLECTUAL means the intellectual property rights
PROPERTY" listed in Schedule 3 and owned by the
Transferor in connection with the Business
and all other Intellectual Property owned
and exclusively used by the Transferor in
connection with the Business but, for the
avoidance of doubt, excluding any
Intellectual Property which is excluded from
the definition of "Business" above;
"BUSINESS RENEWAL RIGHTS" means all the direct and indirect rights of
the Transferor to seek to renew reinsurance
treaties, contracts and agreements
underwritten by the Transferor and comprised
within the Business and in force on the
Closing Date;
"COMPANIES ACTS" means the Companies Act 1985, the Companies
Consolidation (Consequential Provisions) Act
1985 and the Companies Act 1989;
"COMPLETION" means completion of the transfer of the
Business Assets under this Agreement;
"COMPLETION DATE" means the date of Completion;
"DATA PROTECTION means the Data Protection Act 1998 and all
LEGISLATION" other applicable laws, statutes,
regulations, edicts, bye-laws, mandatory
codes of conduct and mandatory guidelines,
existing from time to time in respect of the
processing of personal data;
"EMPLOYER" includes any successor employer of employees
working in the Retained Business;
"EXISTING RETENTION means St Paul's retention obligations
OBLIGATIONS" contained in letters dated 31st May, 2002
from St Paul to those Assumed Employees
("SCHEDULE 8 EMPLOYEES") and for those sums
listed in Schedule 8 herein;
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"INTELLECTUAL PROPERTY" means all rights in inventions, patents,
designs, copyrights, trade marks, service
marks, databases, trade secrets and know-how
(whether or not any of those is registered
and including applications for registrations
of the foregoing), together with all rights
or forms of protection of a similar nature
or having equivalent or similar effect to
any of those which may subsist anywhere in
the world;
"KEY EMPLOYEES" means those Assumed Employees identified by
"KE" in Schedule 2;
"LIME BUSINESS PROPERTY" means those parts of the leasehold property
situated at floors one, two, three, five,
six and seven, 52 Lime Street, London, EC3M
7NL comprising approximately 7,450 square
feet;
"LIME BUSINESS PROPERTY means the leases of the Lime Business
LEASES" Property;
"PRORATED RETENTION means those retention obligations of the
OBLIGATIONS" Transferor and the Transferee to the Assumed
Employees listed in Schedule 9 ("SCHEDULE 9
EMPLOYEES") (which save in the case of Tom
Mahoney are contained in letters dated 5th
September, 2002 from the Transferor to each
of the Schedule 9 Employees) and for those
sums listed in Schedule 9 herein and which
shall be prorated between the Transferor and
the Transferee in accordance with sub-clause
10.8 herein;
"RECEIVABLES" means all payments due to the Transferor as
at Completion for goods or services supplied
by the Transferor in the course of carrying
on the Business;
"REGULATIONS" means the Transfer of Undertakings
(Protection of Employment) Regulations 1981;
"RELEVANT TRANSFER" means a relevant transfer for the purposes
of the Regulations;
6
"RETAINED BUSINESS" means the management (but not the renewal)
of all insurance and reinsurance business
written by the Transferor prior to
Completion and the writing and management of
such other reinsurance business as may be
written on or after Completion with the
prior written consent of the Transferee or
as may be written on or after Completion on
behalf of the Transferor by the Transferee
pursuant to the UK Underwriting Agency and
Underwriting Management Agreement (as
defined in the Formation and Separation
Agreement);
"SHARED INTELLECTUAL means all Intellectual Property
PROPERTY" owned by the Transferor at Completion and
used (but not exclusively used) by the
Transferor in connection with the Business
in the twelve months prior to Completion,
including any Intellectual Property in the
assets listed in Schedule 4 but, for the
avoidance of doubt, excluding any
Intellectual Property which is excluded from
the definition of "Business" above;
"TAX" or "TAXATION" includes (without limitation) all taxes,
levies, duties, imposts, charges and
withholdings of any nature whatsoever,
whether of the United Kingdom or elsewhere,
together with all penalties, charges and
interest relating to any of them or to any
failure to file any return required for the
purposes of any of them;
"TAX COUNSEL" means Tax counsel who is of at least ten
years' standing and who:
(i) is reasonably acceptable to the
Transferor and the Transferee; or
(ii) failing agreement between the
Transferor and the Transferee, is
appointed by the President from
time to time of the Law Society of
England and Wales;
"THE TRANSFEROR'S means a scheme of redundancy payments in
ENHANCED REDUNDANCY respect of an employee who qualifies
SCHEME" for redundancy payments under Part XI of the
Employment Rights Act 1996 (i.e. has 2 years
continuous service) and calculated in
accordance with the statutory redundancy
payment formula under s. 162 Employment
Rights Act 1996 save that the formula
applied is based on:
7
(i) twice the statutory age related
factor; and
(ii) the employee's week's pay, as
defined therein, is not subject to
the statutory maximum but based on
the employee's actual basic week's
pay.
The redundancy payment under the
Transferor's Enhanced Redundancy Scheme:
(i) includes statutory redundancy
payment; and
(ii) shall not be less than 16 weeks
basic pay and more than 52 weeks
basic pay if aggregated with
payment in lieu of notice;
"TRANSFERRED BUSINESS means:-
CONFIDENTIAL INFORMATION"
(i) originals or copies of all books,
records, ledgers, files, reports,
accounts, data, plans and operating
records, whether in hard copy,
electronic format, magnetic or
other media, which are related to
the Business Assets provided,
however, that the information about
the Business Assets shall not
include minute books and other
similar records and files including
tax returns;
(ii) copies of (a) all reinsurance
agreements entered into by the
Transferor on or after 1st January,
2002 and retroceded to Platinum
Reinsurance Inc. pursuant to the
relevant UK Quota Share
Retrocession Agreement, and (b) all
reinsurance agreements entered into
by the Transferor after the
Authorisation Date and retroceded
to the Transferee pursuant to the
Platinum UK Quota Share
Retrocession Agreement (the
"REINSURANCE AGREEMENTS") together
with copies of all related
placement slips and binders,
inuring retrocessional contracts,
actuarial analyses, underwriting
files, claims files, correspondence
with brokers, cedants and inuring
retrocessional reinsurers, and
relevant detail (whether in hard
copy, electronic format, magnetic
or other media); and
8
(iii) copies of the underwriting files
and relevant detail (whether in
hard copy, electronic format,
magnetic or other media) for
contracts that were underwritten by
the Transferor in the 1997, 1998,
1999, 2000, and 2001 underwriting
years and the customer and brokers
lists relevant to the Business
Renewal Rights, including copies of
contracts, placement slips and
binders, inuring retrocessional
contracts, actuarial analyses,
information pertaining to aggregate
premium and loss activity,
correspondence with brokers,
cedants and inuring retrocessional
reinsurers but excluding any
information that the Transferor
reasonably believes to be legally
privileged and any individual
claims or loss information;
For the avoidance of doubt, Transferred
Business Confidential Information does not
include any information relating to the
Retained Business to be made available to
the Transferee pursuant to the Formation and
Separation Agreement;
"TRANSACTION DOCUMENTS" means the documents listed in Schedule 5;
"TRANSFEREE'S GROUP" means the Transferee, its subsidiaries and
subsidiary undertakings, any holding company
of the Transferee and all other subsidiaries
and subsidiary undertakings of any such
holding company from time to time;
"TRANSFEROR'S GROUP" means the Transferor, its subsidiaries and
subsidiary undertakings, any holding company
of the Transferor and all other subsidiaries
and subsidiary undertakings of any such
holding company from time to time;
"TRANSITION EXPENSES" means the provisions of Section 13.16 of the
Formation and Separation Agreement;
"VATA 1994" means the Value Added Tax Act 1994; and
"WORKING HOURS" means 9.00 a.m. to 5.00 p.m. on a Business
Day.
1.2 In construing this Agreement, unless otherwise specified:-
(A) references to clauses, paragraphs and schedules are to clauses
and paragraphs of or schedules to this Agreement;
9
(B) headings to clauses and schedules are for convenience only and
do not affect the interpretation of this Agreement;
(C) the schedules and any attachments form part of this Agreement
and shall have the same force and effect as if expressly set
out in the body of this Agreement, and any reference to this
Agreement shall include the schedules and any attachments;
(D) use of any gender includes the other gender;
(E) 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);
(F) any reference to a "DAY" (including within the phrase
"BUSINESS DAY") shall mean a period of 24 hours running from
midnight to midnight;
(G) the expressions "HOLDING COMPANY", "SUBSIDIARY" and
"SUBSIDIARY UNDERTAKING" shall have the meaning given in the
Companies Acts;
(H) references to writing shall include any modes of reproducing
words in a legible and non-transitory form;
(I) references to times of day are to London time;
(J) a reference to any statute or statutory provision 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;
(K) a reference to any agreement shall be construed as a reference
to the same as it may have been, or may from time to time be,
amended, modified, varied or novated;
(L) 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
(M) references to a "RENEWED CONTRACT" relate to contractual
rights and obligations arising after the renewal date only.
2. TRANSFER
2.1 The Transferor agrees to transfer or procure the transfer and the
Transferee agrees to accept the transfer of the Business Assets with
such title as the Transferor is required to deliver under the Formation
and Separation Agreement as a going concern at and with effect from
Completion, but so that the Business shall be carried on by the
Transferee until the earlier of the Authorisation Date and the first
anniversary of the completion of the Public Offering solely
10
as agent of the Transferor and solely in accordance with the respective
rights and obligations of the Transferor and the Transferee pursuant
to, and subject as provided in, Part B of the UK Underwriting Agency
and Underwriting Management Agreement (as defined in the Formation and
Separation Agreement) and so that following Authorisation (and only
following Authorisation), the Transferee will be entitled to assume and
carry on the Business for its own account and benefit in succession to
the Transferor. For the avoidance of doubt, following Authorisation the
Transferee shall continue to act as agent for the Transferor in
relation to certain reinsurance business in accordance with the
respective rights and obligations of the Transferor and the Transferee
pursuant to Part B of the UK Underwriting Agency and Underwriting
Management Agreement (as defined in the Formation and Separation
Agreement).
2.2 Clause 2.1 shall operate as an assignment of such of the Business
Intellectual Property as is not the subject of a registration or an
application for registration with effect from Completion. Any Business
Intellectual Property which is registered or which is the subject of an
application for registration shall be assigned to the Transferee.
2.3 The Transferor shall use commercially reasonable endeavours to obtain
prior to Completion any consent, approval or authorisation necessary
for the transfer of the Business Assets to the Transferee as
contemplated in this Agreement. If the Transferor has not obtained such
consent, approval or authorisation necessary for the transfer of any of
the Business Assets as contemplated by this Agreement prior to
Completion, the Transferor, for a period of up to 12 months subsequent
to Completion, shall reasonably co-operate with the Transferee in
attempting to obtain such consents, approvals or authorisations as
promptly thereafter as practicable, provided that the Transferee shall
promptly reimburse the Transferor for any reasonable legal and other
expenses incurred in connection with such co-operation as such expenses
are incurred. The Transferor may not exercise any of its rights under
any of the Business Assets with respect to which such consent, approval
or authorisation to the transfer thereof has not been obtained by
Completion except at the direction of or on behalf of the Transferee or
a member of the Transferee's Group, and the Transferee or such member
of the Transferee's Group shall be responsible for any Liabilities (as
defined in the Formation and Separation Agreement) in respect of such
Business Assets after Completion provided that the Transferor shall not
be required to take any action directed by the Transferee under any
agreement relating to a Business Asset that would cause a breach of
such agreement where the Transferor or a member of the Transferor's
Group reasonably believes that it retains liability for such breach.
2.4 Where consent of a third party is required for the transfer of any
Business Intellectual Property to the Transferee, the Transferor shall
use commercially reasonable endeavours to obtain such consent. For the
avoidance of doubt the Transferor shall not be required to make any
payment to any third party to procure such consent and the Transferor
shall have no liability to the Transferee to the extent that such
consent is not obtained by Completion.
2.5 The consideration for the transfer of the Business Assets pursuant to
sub-clause 2.1 will be as set out in clause 5 (Consideration).
11
2.6 Without prejudice to the Transferor's obligations to pass title in
accordance with the Formation and Separation Agreement but for the
avoidance of doubt, Part 1 Law of Property (Miscellaneous Provisions)
Act 1994 shall not apply for the purposes of this clause.
2.7 The Transferor shall, with effect from Completion, grant to the
Transferee a perpetual, non-exclusive, irrevocable, royalty-free,
assignable licence (with the right to sublicense) to use the Shared
Intellectual Property.
2.8 (A) The Transferor will grant the Transferee a licence in the
Agreed Form to use the Lime Business Property on a
non-exclusive basis.
(B) The Transferee acknowledges that the consent of the landlord
(the "LANDLORD") under the Lime Business Property Leases has
not been obtained to the Transferee's occupation of the Lime
Business Property. The Transferor has applied to the Landlord
to obtain the consent of the Landlord to the Transferee's
occupation of the Lime Business Property and will use
commercially reasonable endeavours at the cost of the
Transferee to obtain such consent. The Transferee shall pay
the professional and other fees of any landlord incurred in
connection with the application for the consent of the
Landlord to the Transferee's occupation of the Lime Business
Property. Pending the grant of such consent and if such
consent is refused, the Transferee agrees to vacate the Lime
Business Property within 40 days of the date of a written
request from the Transferor.
(C) The Transferor and the Transferee agree that the Transferee's
occupation of the Lime Business Property takes effect as a
mere licence and does not grant the Transferee exclusive
possession or grant a tenancy.
2.9 The obligations of the parties to this Agreement to carry out the
transactions contemplated by this Agreement are conditional upon the
Firm Public Offering Shares (as defined in the Formation and Separation
Agreement) having been delivered and the completion of the ESU Offering
(as defined in the Formation and Separation Agreement).
3. AUTHORISATION
3.1 From the date hereof until the first anniversary of the completion of
the Public Offering, each of the Transferor and the Transferee will use
commercially reasonable endeavours to obtain the Authorisation as soon
as possible, provided that the Transferor shall not be required to take
any action which would be prejudicial to its commercial interests
including, without limitation, contributing to the Transferee any
capital investment (other than the transfer of the Business in
accordance with this Agreement) or incurring any costs or liability.
3.2 The Transferor and the Transferee undertakes to keep each other
informed as to progress towards the obtaining of the Authorisation and
in particular (but without limitation) to disclose in writing to each
other anything which will or may prevent the Authorisation being
obtained by the first anniversary of the completion of the Public
Offering immediately where it comes to that party's notice.
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4. CONDUCT OF BUSINESS BEFORE COMPLETION
The Transferor will procure that, between the date of this Agreement
and Completion, the Business will be carried on in the ordinary and
usual course.
5. CONSIDERATION
5.1 The consideration for the transfer of the Business Assets shall be the
grant to the Transferor of options to purchase 894,260 common shares in
Platinum Holdings with a total value of US$ 8,119,881.
5.2 The consideration shall be allocated as follows:-
(A) all the assets relating to the Business US$ 300,003; and
(including all the rights and property
relating to the assets) listed or
referred to in Schedule 6
(B) intangibles (the Business Goodwill, the US$ 7,819,878.
Business Renewal Rights and the Business
Intellectual Property)
5.3 The consideration for the transfer of the Business Assets shall be
delivered in accordance with clause 7 (Completion) and may be adjusted
under clause 6 (VAT) and other terms of this Agreement.
6. VAT
6.1 The Transferor and the Transferee shall use commercially reasonable
endeavours to procure that the transfer of the Business Assets under
this Agreement is treated by H.M. Customs & Excise as a transfer of a
business as a going concern for the purposes of both section 49(1) VATA
1994 and article 5 Value Added Tax (Special Provisions) Order 1995,
except that the parties shall not be required by virtue of this clause
to make any appeal to any court against any determination of H.M.
Customs & Excise that the transfer does not fall to be so treated (so
that any such appeal shall be made solely in accordance with the
provisions of clause 6.5).
6.2 The Transferee declares that it is duly registered for VAT purposes
under registration number 795 5701 87 and that the Transferee shall
upon and immediately after Completion use the Business Assets to carry
on the same kind of business (whether or not as part of any existing
business of the Transferee) as that carried on by the Transferor in
relation to the Business Assets before Completion.
6.3 The Transferor shall be entitled to retain all the records of the
Business which under paragraph 6 of Schedule 11 to the VATA 1994 are
required to be preserved after Completion provided that the
Commissioners of H.M. Customs & Excise so direct in accordance with
section 49(1)(b) VATA 1994. The Transferee shall render all reasonable
assistance to the Transferor in connection with the Transferor's
request to the Commissioners of H.M. Customs & Excise to so direct.
13
6.4 The Transferor shall preserve in the UK all the records of the Business
that it is entitled to retain pursuant to sub-clause 6.3 for a period
consistent with the longer of its document retention policy in effect
at Completion or for a period of not less than six years from
Completion (or for such longer period as may be required by law) and,
upon being given reasonable notice by the Transferee or its agents, the
Transferor shall make those records available to the Transferee or its
agents for inspection (during Working Hours) or copying (at the
Transferee's expense).
6.5 (A) If, notwithstanding the provisions of clause 6.2, H.M. Customs
& Excise shall determine that VAT is chargeable in respect of
the supply of all or any part of the Business Assets under
this Agreement, the Transferor shall notify the Transferee of
that determination within seven days of its being so advised
by H.M. Customs & Excise, clause 6.6 shall determine whether
the consideration payable pursuant to clause 5.1 shall be
reduced, and the Transferee shall, unless clause 6.5(B)
applies, pay to the Transferor by way of additional
consideration a sum equal to the amount of VAT so chargeable
within 14 days of the Transferor notifying the Transferee of
that determination (against delivery by the Transferor of an
appropriate VAT invoice).
(B) If the Transferor and the Transferee disagree with the
determination of H.M. Customs & Excise referred to in clause
6.5(A), or if sub-clause (F) applies, they shall obtain a
review by the Commissioners of H.M. Customs & Excise of that
determination and sub-clauses 6.5(C) to (F) (inclusive) shall
apply. The Transferor and the Transferee shall be responsible
jointly for obtaining such review and shall give each other
all reasonable assistance and co-operation in that regard.
(C) Upon the Transferor being advised by the Commissioners of H.M.
Customs & Excise of their decision arising out of the review
referred to in clause 6.5(B), the Transferor shall forthwith
notify the Transferee as soon as possible of that decision
and, if the Transferor and the Transferee disagree with that
decision or if sub-clause (F) applies, the Transferor and the
Transferee shall be responsible jointly for the making of all
such appeals against that decision as the Transferor and the
Transferee shall agree.
(D) All costs, charges and expenses properly incurred in taking
any action pursuant to sub-clauses (B) to (E) (inclusive)
shall be borne by the Transferor and the Transferee equally
and, in any case where an appeal cannot be made against the
decision of the Commissioners without the Transferor
accounting for the VAT referred to in clause 6.5(A), the
Transferee shall pay to the Transferor in cash an amount equal
to that amount (against delivery by the Transferor of an
appropriate VAT invoice).
(E) Within 14 days of the decision of the Commissioners referred
to in clause 6.5(C) or, if an appeal or appeals have been made
in accordance with that clause, within 14 days of the decision
of the court or tribunal to which the final such appeal has
been made:-
(i) the Transferee shall pay to the Transferor in cash a
sum equal to the amount of VAT that has thereby been
determined to be properly chargeable in respect of
the supply of all or any part of the Business Assets
under this Agreement (against delivery by the
Transferor of an appropriate VAT invoice) after
14
deducting from that sum any amount previously paid by
the Transferee to the Transferor under clause 6.5(D);
or
(ii) if the amount previously paid by the Transferee to
the Transferor under clause 6.5(D) exceeds the VAT
that has been determined to be properly chargeable in
respect of the supply referred to above, the
Transferor shall pay to the Transferee in cash an
amount equal to the excess (which payment shall be
treated as a reduction in the consideration payable
for the Business Assets) and deliver to the
Transferee an appropriate credit note for VAT
purposes.
(F) If one of the Transferor or the Transferee agrees with the
determination of H.M. Customs & Excise referred to in clause
6.5(A) but the other disagrees with such determination, or if
the Transferor and the Transferee disagree as to the course of
action to be taken pursuant to this clause 6 (including
whether or not to appeal a decision of H.M. Customs & Excise
or a decision of any court or tribunal and the manner of any
such appeal), then the Transferor and the Transferee shall
jointly instruct Tax Counsel in that regard and sub-clauses
(B) to (E) (inclusive) shall apply once Tax Counsel has, after
both parties have had a reasonable opportunity to make
submissions to Tax Counsel, delivered a written opinion
(taking account of all relevant factors) to both parties to
the effect that it is or is not appropriate to obtain a review
of the determination or which recommends a course of action to
be taken by the parties pursuant to this clause 6. When such
an opinion is delivered, the parties agree to apply
sub-clauses (B) to (E) (inclusive) in accordance with such
opinion.
6.6 If the Transferee is unable to recover in full input tax (if any) in
respect of any of the supplies of Business Assets pursuant to this
Agreement, then the consideration payable pursuant to clause 5.1 ("IC")
shall be reduced to the aggregate amount found by applying the
following formula to the value of the consideration allocated to each
category of asset specified in clause 5.2 and adding the totals
thereof:
1
--------------------
1 + (0.5 (0.175 - R))
where R means:
(i) in respect of supplies constituted by the transfer of Business
Assets pursuant to this Agreement which are taxable supplies,
the percentage of input tax in respect thereof which is
recoverable by the Transferee (expressed as the decimal
fraction obtained by applying the said percentage to 0.175);
and
(ii) in all other cases 0.175,
and provided that for this purpose R shall be determined in good faith
by the Transferee and shall be adjusted as necessary following any
agreement with H.M. Customs & Excise or otherwise with such
consequential adjustments being made to IC as are then appropriate
(using for the avoidance of doubt for the purpose of this recalculation
the original allocations as stated at the date of this Agreement in
clause 5.2), and so that the consideration and
15
allocation pursuant to clauses 5.1 and 5.2 shall be adjusted in
accordance with the results of the above process by the Transferor
being liable to make such payment in cash to the Transferee as is equal
to the value of any reduction in the consideration set out pursuant to
clause 5.1 and the Transferee shall make such payments of additional
consideration as are required under clause 6.5 (A) or (E) and so that
the two said amounts may be set off to the maximum extent possible
leaving a net payment, and finally so that, if pursuant to any further
application of this clause to determine IC (if R is adjusted as
referred to above), IC changes (upwards or downwards), such adjusting
payments shall be made as are necessary.
7. COMPLETION
7.1 Completion shall take place on the Closing Date, provided that this
Agreement shall become effective on that date immediately after
delivery of the Firm St. Paul Shares (as defined in the Formation and
Separation Agreement) and the completion of the ESU Offering (as
defined in the Formation and Separation Agreement).
7.2 At Completion the Transferor and the Transferee shall do or procure the
carrying out of those things listed in Schedule 1 (Completion
Arrangements).
8. APPORTIONMENT
8.1 All moneys or other items to which the Transferee is properly entitled
under the terms hereof which are received by the Transferor or any
member of the Transferor's Group on or after Completion in connection
with the Business Assets shall be held in trust by the Transferor for
the Transferee and shall be promptly paid over to the Transferee.
8.2 All moneys or other items to which the Transferor is properly entitled
under the terms hereof which are received by the Transferee or any
member of the Transferee's Group on or after Completion shall be held
in trust by the Transferee for the Transferor and shall be promptly
paid over to the Transferor.
8.3 Where anything (including any service) has been provided to the
Transferor in connection with the Business Assets prior to Completion,
but any payment has been made by the Transferee in respect of the price
or cost of it, the Transferor shall pay to the Transferee a sum equal
to the amount of that payment (excluding any amount in respect of VAT
thereon and suitably apportioned where the payment relates to the
provision of goods or a service over a period commencing prior to, and
ending after, Completion) and shall hold such sum for the Transferee
until it is promptly paid over.
8.4 Where anything (including any service) is to be provided to the
Transferee in connection with the Business Assets after Completion, but
any payment (by way of deposit, prepayment or otherwise) has been made
by the Transferor in respect of the price or cost of it before
Completion, the Transferee shall pay to the Transferor a sum equal to
the amount of that payment (excluding any amount in respect of VAT
thereon and suitably apportioned where the payment relates to the
provision of goods or a service over a period commencing prior to, and
ending after, Completion) and shall hold such sum for the Transferor
until it is promptly paid over.
16
8.5 All other prepayments and accruals relating to the Business Assets
shall, to the extent that they relate to any period commencing prior to
and ending after Completion, be apportioned on a fair and equitable
basis between the Transferor and the Transferee and an appropriate
payment shall be made to reflect that apportionment.
8.6 All notifications and correspondence relating to the Business Assets
which are received by any member of the Transferor's Group on or after
Completion shall as soon as reasonably practicable be passed to the
Transferee.
9. RISK AND INSURANCE
Risk in the Business Assets shall pass on Completion.
10. EMPLOYEES
10.1 The Transferee, the Transferor and the Employer agree that Completion
will constitute a Relevant Transfer which will take place in its
entirety on the Completion Date and the Assumed Employees listed in
Part 1 of Schedule 2 ("PART 1 EMPLOYEES") shall transfer under the
Regulations to the Transferee from the Employer on the Completion Date
upon the terms and conditions referred to in sub-clause 10.7(C).
10.2 Subject to sub-clause 10.6 (C) the Transferee, the Transferor and the
Employer agree that if there is a finding that a Relevant Transfer
shall not have occurred prior to the Authorisation, the Authorisation
will constitute a Relevant Transfer which will take place in its
entirety on the Authorisation Date and sub-clause 10.6 shall be applied
to the Part 1 Employees between the Completion Date and the
Authorisation Date and the Part 1 Employees shall thereafter transfer
under the Regulations to the Transferee from the Employer on the
Authorisation Date upon the terms and conditions referred to in
sub-clause 10.7(C).
10.3 (A) Subject to sub-clause 10.3(B) the Transferee, the Transferor
and the Employer agree that the Transferee will immediately
upon Completion make to each of the Assumed Employees listed
in Part 2 of Schedule 2 ("PART 2 EMPLOYEES") an offer in
writing to employ them under a new contract of employment, to
take effect from Completion upon the terms and conditions
referred to in sub-clause 10.7(C).
(B) In the case of the Assumed Employee Guy Butler, the
Transferee, the Transferor and the Employer agree that the
Transferee shall, prior to the Completion Date, offer Guy
Butler a six month fixed term contract of employment effective
upon Completion and the Employer shall pay Guy Butler L112,500
upon termination of his employment with the Employer (the
"SEVERANCE PAYMENT") subject to the terms of a Compromise and
Severance Agreement (including a maximum contribution towards
legal fees) (the "SEVERANCE AGREEMENT") executed by the
Employer, the Transferor, the Transferee and Guy Butler and
his legal advisor prior to Completion. The Employer, the
Transferor and the Transferee agree that the Severance Payment
and said legal fees shall be set off against the Transition
Expenses and the Employer and the Transferor shall not be
liable for any loss incurred by the Transferee in connection
with the termination of the employment of Guy Butler as an
employee of the Transferee on or
17
after Completion howsoever arising and sub-clauses 10.7(C) and
10.7(D) shall not apply in respect of Guy Butler.
10.4 The Transferee, the Transferor and the Employer agree that if for any
reason, following Completion any Part 1 Employee is found not to have
transferred to the Transferee pursuant to the Regulations, other than
by virtue of Regulation 5(4A) of the Regulations, the Transferee in
consultation with the Transferor and the Employer will as soon as is
reasonably practicable but no later than within 14 days of learning of
the said finding make to any such Part 1 Employee an offer in writing
to employ him under a new contract of employment to take effect as soon
as possible thereafter upon the terms and conditions referred to in
sub-clause 10.7(C) and in the interim unless otherwise agreed in
writing by the parties sub-clause 10.6 shall be applied by the parties.
In the event that any Part 1 Employee declines such offer, the Employer
in consultation with the Transferor may at its discretion terminate the
employment of such Part 1 Employee.
10.5 The Transferee, the Transferor and the Employer agree:
(A) if for any reason any person who is not an Assumed Employee is
found to have transferred to the Transferee pursuant to the
Regulations, the Transferee will within 14 days after becoming
aware of the finding notify the Transferor and the Employer in
writing that it does not wish to employ that person
("TRANSFEREE'S NOTIFICATION"), and the Employer will in
consultation with the Transferee and the Transferor, following
receipt of the Transferee's Notification as soon as is
reasonably practicable but no later than within 14 days of the
Transferee's Notification make to that person an offer in
writing to employ him under a new contract of employment upon
the terms and conditions referred to in sub-clause 10.7(C) or
alternatively request that the Transferee terminate the
employment of that person;
(B) once an offer has been made or the Employer has asked the
Transferee to terminate the employment of any person who is
not an Assumed Employee (or at the latest after the expiry of
14 days after the Transferee's Notification), the Transferee
may terminate the employment of the person concerned and, so
long as that termination is in accordance with the said
person's contractual entitlement subject to any duty by the
said person to mitigate loss, the Transferor will indemnify
the Transferee against any sums payable to, or on behalf of
such person in respect of the termination of his employment
and each and every liability, claim, demand, expense or cost
(including without limitation reasonable legal costs and
expenses incurred by the Transferee on a solicitor and own
client basis in settling, contesting or dealing with any such
claim or demand) on or after the Completion and against any
claims or losses arising out of such termination.
10.6 The Transferee, the Transferor and the Employer agree in the event of
sub-clause 10.2 applying or where any Part 2 Employee remains employed
by the Employer pending acceptance by him of an offer of employment by
the Transferee or as provided in sub-clause 10.4, in respect of such
Assumed Employees, between Completion and the Authorisation Date (or
where relevant earlier acceptance of the offer) the following interim
arrangements shall apply ("INTERIM ARRANGEMENTS"):
18
(A) subject to sub-clause 10.6 (C) the Employer shall and the
Transferor shall use commercially reasonable endeavours to
procure that the Employer shall in respect of those Assumed
Employees (except with the express prior written consent of
the Transferee):
(i) make each of them available to the Transferee to
provide services to the Transferee and so far as is
reasonably practicable in accordance with their
contractual duties prior to Completion;
(ii) not engage in any act or omission which gives rise to
any liability in relation to them including without
limitation for breach of contract, unfair dismissal,
and sex, race and disability discrimination and shall
comply with all obligations imposed on it by all
statutes, regulations, collective agreements, customs
and practices relevant between it and them or any
trade union or their terms of employment or any laws
relating to health and safety;
(iii) save as provided in sub-clause 10.3(B) and subject to
the provisions of sub-clauses 10.6(B)(iii) and
10.7(E)(ii) be responsible for all due salary
payments and any other emoluments in accordance with
their contracts of employment with the Employer
including tax and national insurance payments,
holiday, sick pay and all other contractual
remuneration and benefits and not subject them to any
disciplinary action, dismiss them or in any way
change the Assumed Employees' contracts of employment
(with or without those Assumed Employees' consent);
and
(iv) at the request of the Transferee and within 14 days
of the notification of the said request, terminate
the employment of any Assumed Employee to whom the
Interim Arrangements apply (for the avoidance of
doubt whether or not extended by agreement under
clause 10.6(C), in accordance with the said Assumed
Employee's contractual entitlement subject to any
duty of such person to mitigate loss ("EARLY
TERMINATION").
(B) Subject to sub-clause 10.6 (C) the Transferee shall in respect
of those Assumed Employees (except with the express prior
written consent of the Transferor and the Employer):
(i) provide work for each of them in accordance with
their contractual duties prior to Completion so far
as is reasonably practicable and subject to
sub-clause 10.6(A) have the day to day control of the
manner in which those Assumed Employees perform their
duties;
(ii) not engage in any act or omission which would, if it
were their employer, give rise to any liability in
relation to them including without limitation for
breach of contract, unfair dismissal, and sex, race
and disability discrimination or which causes the
Employer or the Transferor or of any member of the
Transferor's Group to incur such a liability and
shall comply with all obligations which if it were
their employer would be imposed on it by all
statutes, regulations, collective
19
agreements, customs and practices relevant between it
and those Assumed Employees or any trade union or the
terms of employment of the Assumed Employees or any
laws relating to health and safety; and
(iii) without prejudice to sub-clause 10.7(E)(ii) fully
reimburse the Employer on a monthly basis in respect
of all salary payments and other emoluments in
accordance with the Assumed Employees' contracts of
employment including tax and national insurance
payments, holiday and sick pay.
(C) The Transferee, the Transferor and the Employer agree that the
Interim Arrangements shall automatically terminate on 31st
March, 2003 unless otherwise extended in writing by the
parties and in respect of such Assumed Employees; and the
Employer in consultation with the Transferor and the
Transferee may after 31st March, 2003 or such later date as
agreed in writing by the parties and before 31st April, 2003
(unless otherwise extended in writing by the parties)
terminate the employment of such Assumed Employees in
accordance with their contractual entitlement subject to any
duty of the said employees to mitigate loss. The termination
of the Interim Arrangements or any Early Termination shall be
without further liability by the Transferor and the Employer
to the Transferee and by the Transferee to each of them save
that to the extent any such liability has arisen at any time
on or after Completion in consequence of the termination of
the Interim Arrangements or Early Termination in connection
with any Assumed Employee, and provided the Transferor shall
not be in breach of its obligations to the Transferee under
sub-clauses 3.1 or 3.2 herein, the Transferee will subject to
sub-clause 10.7(D) indemnify the Transferor and the Employer
against any sums properly and reasonably payable to, or on
behalf of any such Assumed Employees and each and every
liability, claim, demand, expense or cost (including without
limitation reasonable legal costs and expenses incurred by the
Transferor or the Employer on a solicitor and own client basis
in settling, contesting or dealing with any such claim or
demand) in respect of the period on or after Completion
including any claims or losses arising out of such termination
of employment.
10.7 Subject to the provisions of sub-clause 10.7(C) in respect of salaries
and other contractual emoluments and pension provision the Transferor,
the Transferee and the Employer agree:
(A) save as provided in sub-clause 10.7(E) and subject to
sub-clause 10.7(B), with effect from the later of the
Completion Date or the date on which any Assumed Employee
becomes an employee of the Transferee then in relation to that
Assumed Employee all salaries and other contractual
emoluments, tax and national insurance payments, and accrued
holiday pay shall be borne by the Transferee from that date
and all necessary apportionments shall be made;
(B) the Transferor shall reimburse the Transferee an amount equal
to the Bonus Payment paid to each Eligible Assumed Employee
pro rated for the period from 1st January, 2002 to the day
preceding the Completion Date. "ELIGIBLE ASSUMED EMPLOYEES"
are those Assumed Employees who remain employed by the
Transferee on the date of Bonus Payment (or if the Interim
Arrangements apply to the Bonus Payment, remain employed by
the Employer) which reimbursement shall be made no earlier
than the
20
date on which the Transferor and Transferee agree that the
Bonus Payments are due and payable but in any event such
reimbursement shall be made no later than 20th March, 2003.
The Transferee shall pay any such sums due to Assumed
Employees for and on behalf of any liability of the Employer.
(C) with effect from the later of the Completion Date and the date
on which any Assumed Employee becomes an employee of the
Transferee save as expressly provided in this Agreement and
with the exception of occupational pension arrangements and
share scheme (save to the extent any part of either of such
benefits transfer under the Regulations) such salaries and
other contractual emoluments shall be the same as or not
substantially less favourable and giving rise to detriment
than any Assumed Employee's terms and conditions of employment
before the Completion Date or the date on which any Assumed
Employee becomes an employee of the Transferee whichever is
the more favourable to the Assumed Employee (the "EQUIVALENT
BASIS");
(D) save as in the case of Guy Butler, the Transferor's Enhanced
Redundancy Scheme applicable to Assumed Employees prior to
Completion shall continue to apply to Assumed Employees for 90
days following the Completion Date ("THE 90 DAY PERIOD") and
the Transferor shall reimburse the Transferee for the sums due
and paid to any Assumed Employee by the Transferee under the
Transferor's Enhanced Redundancy Scheme whose employment is
terminated by the Transferee during the 90 Day Period, and in
the case of Early Termination under sub-clause 10.6(A)(iv)
during the 90 Day Period, the Employer shall pay such sums due
under the Transferor's Enhanced Redundancy Scheme to any
applicable Assumed Employees in accordance with the
Transferor's Enhanced Redundancy Scheme and all such payments
shall be subject to the aggregate limit contained in the
Transition Expenses;
(E) (i) The Transferor shall use commercially reasonable
endeavours to procure the agreement of Cigna that
from Completion or as soon as is reasonably
practicable following Completion, for a period ending
on 31st December, 2002 (the "BENEFITS PARTICIPATION
PERIOD") eligible Assumed Employees and their
eligible dependants may continue to participate in
the Cigna Healthcare Plan (the "MEDICAL SCHEME") on
the same basis as the Retained Employees including
any variation or cessation to or of the Medical
Scheme howsoever arising and such participation shall
be in accordance with the Medical Scheme's rules and
provisions applicable during the Benefits
Participation Period. The Employer and the Transferor
shall following the Benefits Participation Period
have no further liability to the Transferee or the
Assumed Employees in respect of the Medical Scheme
save as provided under the Medical Scheme's rules or
legislation or any prior breach of the Medical Scheme
Rules by the Employer;
(ii) the Transferee shall pay to the Employer the
applicable contribution rates notified to the
Transferee by the Transferor or Employer including
any applicable co-payments and deductibles in respect
of the Assumed Employees and their dependants
participating in the Medical Scheme during the
Benefits Participation Period which rates shall be
calculated in accordance
21
with the Medical Scheme's rules applicable to the
Retained Employees generally during the Benefits
Participation Period; and
(iii) the Transferee shall not later than the end of the
Benefits Participation Period take all commercially
reasonable steps to provide the Assumed Employees
with an alternative medical benefit scheme on the
Equivalent Basis and the Transferee shall have no
further liability to make contributions or pay
expenses in respect of the Medical Scheme save for
any contributions then outstanding or any required by
legislation.
10.8 (A) The Transferor agrees to (i) procure that St Paul will honour
all St Paul's Existing Retention Obligations and shall be
responsible for making such payments should St Paul fail to do
so and (ii) treat the employment of the Schedule 8 Employees
with the Transferee commencing on the Completion Date as if it
were continuous service with the Employer for the purposes
only of calculating service under the Existing Retention
Obligations. For the avoidance of doubt, reference to treating
the said employees as having continuous service includes
continuous service under the Regulations where applicable.
(B) The Transferor and the Transferee agree to honour all the
Transferor's and the Transferee's Prorated Retention
Obligations in respect of the employment of the Schedule 9
Employees on a pro rata basis adopting the formula set out
below and which are detailed in Schedule 9:
(i) the Transferor shall assume and be liable for the
portion of each Prorated Retention Obligation in an
amount equal to the product of (A) the amount of each
such Prorated Retention Obligation and (B) a
fraction, the numerator of which is the number of
days from the date such Prorated Retention Obligation
was entered into through the Completion Date and the
denominator of which is the number of days from the
date such Prorated Retention Obligation was entered
into through 1st July, 2004, and
(ii) the Transferee shall assume and be liable for the
portion of each Prorated Retention Obligation in an
amount equal to the product of (A) the amount of each
such Prorated Retention Obligation and (B) a
fraction, the numerator of which is the number of
days from the Completion Date through 1st July, 2004
and the denominator of which is the number of days
from the date such Prorated Retention Obligation was
entered into through 1st July, 2004.
10.9 The Transferee and the Transferor shall procure that their respective
obligations herein are complied with by each member of the Transferor's
Group including the Employer and each member of the Transferee's Group
respectively.
10.10 Subject to the Transferor's overriding indemnity in sub-clause 10.5(B),
the Transferee shall indemnify the Transferor and the Employer solely
in respect of the period on or following Completion against any breach
of its employment obligations under this Agreement and each and every
liability, claim, demand, expense or cost (including without limitation
reasonable
22
legal costs and expenses incurred by the Transferor or the Employer on
a solicitor and own client basis in settling, contesting or dealing
with any such claim or demand) relating to or arising out of any claim
by an Assumed Employee transferring under the Regulations or any
Assumed Employee under sub-clause 10.2 in consequence of the transfer
of the Business to the Transferee for:
(A) a finding that there has been or will be a substantial change
in such employee's terms and conditions of employment to his
detriment; and
(B) any act or omission of the Transferee in relation to such
employee occurring on or after the Completion Date including
without limitation against any claim for redundancy payments
or protective awards and any liability for wrongful dismissal
or unfair dismissal or otherwise in connection with the
transfer of such employee to the Transferee.
10.11 The Transferor shall indemnify the Transferee against any claim in
respect of any breach of its employment obligations under this
Agreement and each and every liability, claim, demand, expense or cost
(including without limitation reasonable legal costs and expenses
incurred by the Transferee on a solicitor and own client basis in
settling, contesting or dealing with any such claim or demand) relating
to or arising out of any claim by an Assumed Employee or subject to
sub-clause 10.5 any other employee of the Transferor transferring under
the Regulations in consequence of the transfer of the Business to the
Transferee for:-
(A) any act or omission of the Transferor in relation to such
employee occurring prior to the Completion Date including
without limitation against any claim for redundancy payments
or protective awards and any liability for wrongful dismissal
or unfair dismissal or otherwise in connection with the
transfer of such employee to the Transferee;
(B) any claim by any trade union, staff association, staff body or
employee representatives (together "REPRESENTATIVES") arising
out of any act or omission by the Transferor in failing to
comply with its legal obligations to such Representatives
under Regulation 10 of the Regulations including, without
limitation, any failure by the Transferee to comply with its
obligations prior to and in respect of any period prior to
Completion under Regulation 10 of the Regulations; and
(C) the termination of the employment prior to the Completion Date
of any person who was formerly assigned to the Business.
10.12 The Transferee represents, warrants and undertakes that as at
Completion, it is not aware of any change to the remuneration and
benefits or any terms and conditions of the employment of Assumed
Employees that it intends to make following Completion that it has not
disclosed to the Transferor prior to Completion and acknowledges that
the Transferor is giving the indemnity in sub-clause 10.11(B) in
reliance on this warranty.
10.13 The Transferor and the Employer and the Transferee shall notify each
other promptly in writing giving full details of any matters in respect
of which either the Transferor or the Employer or
23
the Transferee shall or may be entitled to claim an indemnity under
this clause 10 from the other. If the indemnifying party shall so
request in writing, the indemnified party shall consult with the
indemnifying party at all material stages regarding the care and
conduct of resisting, compounding or contesting each such matter
including without limitation any demand, claim or proceedings so as to
avoid or mitigate any loss and/or disrepute to the indemnifying party
and the indemnified party shall at its own expense give upon request of
the indemnifying party any co-operation, assistance or information as
may be reasonably requested which is relevant to such matters.
11. DATA PROTECTION
The Transferee shall at all times comply with all requirements of the
Data Protection Legislation in respect of the Business including,
without limitation, by giving any necessary notification to the Data
Protection Commissioner under Section 18 of the Data Protection Act
1998 prior to Completion.
12. NON-COMPETITION
12.1 For a period of two years following the Closing Date (the "RESTRICTED
PERIOD") the Transferor may not (other than pursuant to the UK
Underwriting Agency and Management Agreement (as defined in the
Formation and Separation Agreement) between the parties):-
(A) offer, issue, sell, refer or promote, directly or indirectly,
any contracts, treaties or agreements of reinsurance of the
same type as the Reinsurance Agreements or of the same type as
those for which the Transferor has transferred Business
Renewal Rights to the Transferee provided that the Transferee
or members of the Transferee's Group continue to provide,
during the Restricted Period, reinsurance coverage of such
types to third parties;
(B) employ, offer to employ or solicit with a view to employment
any of the Key Employees (save that pending receipt of
Authorisation, Thomas Mahoney, Guy Butler, Michael Coldman,
Craig Pettengell and Chris Ballard will remain as directors of
the Transferor and the foregoing will be made available by the
Transferee to the Transferor to act in their capacities as
approved persons of the Transferor for the purposes of the
Rule Book of the Financial Services Authority); or
(C) use or disclose to any person other than the Transferee or
members of the Transferee's Group, any Transferred Business
Confidential Information except in connection with the
administration of (i) the Reinsurance Agreements, (ii) the
Run-Off Business (as defined in sub-clause 12.2 (A)) or (iii)
the Retained Business provided that the Transferor will
disclose Transferred Business Confidential Information only in
the ordinary course of business, consistent with past practice
including in connection with resolving claims and the purchase
of retrocessional coverage and provided, further, that the
Transferor shall use reasonable endeavours to avoid providing
Transferred Business Confidential Information to a competitor
of the Transferee under circumstances reasonably likely to
materially impair the value of the Business Renewal Rights;
24
provided that, in the case of Transferred Business Confidential
Information that relates to the Reinsurance Agreements, the Restricted
Period shall be indefinite.
12.2 Notwithstanding any other provision of sub-clause 12.1 to the contrary,
the Transferor is not prohibited from:
(A) engaging in any line of business in which it is engaged
immediately after the completion of the Public Offering and
for which Business Renewal Rights were not transferred
hereunder, including, without limitation, the administration
of reinsurance contracts with inception dates prior to 1st
January, 2002 (the "RUN-OFF BUSINESS") and the Reinsurance
Agreements (but not including any renewals thereof),
purchasing reinsurance for its own account, reinsurance
business written through St. Paul's Discover Re operation and
Lloyd's of London operation and property catastrophe
facultative reinsurance business written by St. Paul's CATRisk
Property division;
(B) acquiring any person or, subject to the limitation in (C)
below, any interest in any person engaged in any line of
business except for an acquisition of an interest of more than
49% of any person that generated 50% or more of its gross
revenues, excluding investment income and realised investment
gains and losses, in its most recent financial year for which
financial statements are available, by writing property or
casualty reinsurance (a "PERMITTED ACQUIREE"), provided that
any Permitted Acquiree may not use any marks, designs, logos,
slogans, names, words or letters which include the words "St.
Paul", "USF&G" or "F&G" or those that are suggestive or,
derivative thereof, or any logo or mark identified with "St.
Paul", "USF&G" or "F&G" (except as may be required by law) in
connection with its reinsurance business, if any, provided
further, however, that the Transferor may acquire an interest
of more than 49% of a person that is not a Permitted Acquiree
if the Transferor promptly divests the property or casualty
reinsurance operations of such person; or
(C) soliciting, offering, issuing, selling, purchasing or
referring any contracts of reinsurance of any type to, from or
with any of its subsidiaries or engaging in any reinsurance
activities in connection with the Run-Off Business (other than
renewals thereof) or with finite business which is either (i)
covered by a Quota Share Retrocession Agreement (as defined in
the Formation and Separation Agreement), a UK Quota Share
Retrocession Agreement or the Platinum UK Quota Share
Retrocession Agreement, or (ii) which the Transferee and
members of the Transferee's Group declines to reinsure.
12.3 During the Restricted Period the Transferor shall not sponsor or
assist, directly or indirectly, in the sponsorship of a newly formed
property or casualty reinsurer for so long as St. Paul continues to own
10% or more of the outstanding common shares of Platinum Holdings.
12.4 Transferred Business Confidential Information shall not include
information relating to the Business which is or becomes generally
known on a non-confidential basis provided that the source of such
information was not bound by a confidentiality agreement or other
obligation of confidentiality. If the Transferor is legally requested
or required under an order or subpoena issued by a court,
administrative agency or arbitration panel (through oral examination,
25
interrogatories, requests for information or documents, civil
investigation demand or other legal, administrative or arbitration
processes) to disclose any Transferred Business Confidential
Information, the Transferor shall provide the Transferee with prompt
written notice of the request, requirement, subpoena or order to permit
the Transferee (if it so elects) to seek appropriate protective steps
preventing or limiting disclosure. If the Transferee seeks such steps
to avoid or limit disclosure, the Transferor shall co-operate with the
Transferee at the Transferee's expense. If, in the absence of such
protective steps, the Transferor is compelled to disclose any
Transferred Business Confidential Information, the Transferor may
disclose such Transferred Business Confidential Information without
liability hereunder.
12.5 The Transferor shall treat any Transferred Business Confidential
Information with the same degree of care with which it treats its own
confidential information.
12.6 The Transferor and the Transferee agree that money damages would not be
a sufficient remedy for any breach of sub-clauses 12.1 to 12.5 by the
Transferor.
12.7 Commencing on the Closing Date, the Transferee may not use any marks,
designs, logos, slogans, names, words or letters which include the
words "United States Fidelity and Guaranty", "St. Paul", "Fire and
Marine" or those that are suggestive or derivative thereof or likely to
be confused or associated therewith, except (i) as may be required by
law, (ii) for the purposes of historical identification in materials
not designed as advertising or solicitation, (iii) as provided under
the Transitional Trademark License Agreement (as defined in the
Formation and Separation Agreement), and (iv) pursuant to the
Underwriting Management Agreement and the UK Underwriting Agency and
Underwriting Management Agreement (as defined in the Formation and
Separation Agreement).
12.8 Save to the extent required pursuant to the UK Underwriting Agency and
Underwriting Management Agreement (as defined in the Formation and
Separation Agreement), the Transferee shall not use any printed
materials or other means of communication which state, suggest or imply
any affiliation with St. Paul or any of its subsidiaries following the
Closing Date other than references to St. Paul's ownership of the St.
Paul Shares (as defined in the Formation and Separation Agreement) or
to this Agreement, the Reinsurance Agreements or the Ancillary
Agreements (as defined in the Formation and Separation Agreement) or
the subject matter thereof.
12.9 The Transferor and the Transferee agrees that it shall not make any
statement that would reasonably be viewed as intended to be disparaging
of the business, reputation or good name of the other.
13. ASSIGNMENT
This Agreement shall not be assignable by any party hereto without the
prior written consent of the other parties.
26
14. FURTHER ASSURANCE
14.1 The Transferor shall, from time to time on request, do or procure the
doing of all such acts and/or execute or procure the execution of all
such documents, in particular (without limitation) any documents
required to assign any registered Business Intellectual Property, in a
form reasonably satisfactory to the Transferee which the Transferee may
reasonably consider necessary for giving full effect to this Agreement
and securing to the Transferee the full benefit of the rights, powers
and remedies conferred upon the Transferee in this Agreement.
14.2 The Transferee shall, from time to time on request, do or procure the
doing of all such acts and/or execute or procure the execution of all
such documents, in particular (without limitation) any instrument of
assumption and acknowledgements, in a form reasonably satisfactory to
the Transferor as the Transferor may reasonably consider necessary for
giving full effect to this Agreement or to secure to the Transferor the
full benefit of the rights, powers and remedies conferred upon the
Transferor in this Agreement.
15. ENTIRE AGREEMENT
15.1 Together this Agreement and the Transaction Documents constitute the
whole and only agreement relating to the transfer of the Business
Assets.
15.2 This Agreement may only be varied in writing signed by each of the
parties.
15.3 Except in the case of fraud, no party shall have any right of action
against the any other party or parties to this Agreement arising out of
or in connection with any draft, agreement, undertaking,
representation, warranty, promise, assurance or arrangement of any
nature whatsoever, whether or not in writing, relating to the subject
matter of this Agreement and Transaction Documents made or given by any
person at any time prior to the date of this Agreement except to the
extent that it is repeated in this Agreement or any Transaction
Document.
16. REMEDIES AND WAIVERS
16.1 No failure by any of the parties to this agreement to take any action
or assert any right hereunder shall be deemed to be a waiver of such
right in the event of the continuation or repetition of the
circumstances giving rise to such right, unless expressly waived in
writing.
16.2 The single or partial exercise of any right, power or remedy provided
by law or under this Agreement shall not preclude any other or further
exercise of it or the exercise of any other right, power or remedy.
16.3 The rights, powers and remedies provided in this Agreement are
cumulative and not exclusive of any rights, powers and remedies
provided by law.
27
17. NOTICES
All notices hereunder shall be in writing and shall be deemed to have
been duly given if delivered by hand (with receipt confirmed) or by
certified mail, postage prepaid and return receipt requested, or by
facsimile transmission, addressed as follows (or to such other address
as a party to this agreement may designate by written notice to the
other) and shall be deemed given on the date on which such notice is
received:
Party and title of individual Address Facsimile no.
- ----------------------------- ------- -------------
Transferor St Paul Reinsurance Company 020 7488 6345
f.a.o. Company Secretary Limited
27 Camperdown Street
London E1 8DS
Transferee Platinum Re (UK) Limited 020 7623 6610
f.a.o. Company Secretary 52 Lime Street
London EC3M 7NL
Employer St Paul Management Limited 020 7488 6345
f.a.o. Company Secretary 27 Camperdown Street
London E1 8DS
18. ANNOUNCEMENTS
18.1 None of the parties to this agreement shall make, or cause to be made,
any press release or public announcement in respect of this agreement
or the transactions contemplated hereby or otherwise communicate with
any news media without the prior written consent of the other parties
and the parties shall co-operate as to the timing and contents of any
such press release or public announcement. This clause does not apply
in the circumstances described in clause 18.2.
18.2 A party may, after consultation with the other parties, make an
announcement concerning the transfer of Business Assets or any
ancillary matter if required by:-
(A) law; or
(B) any securities exchange or regulatory or governmental body to
which any party is subject or submits, wherever situated,
including (amongst other bodies) the UK Financial Services
Authority, the London Stock Exchange, The Panel on Takeovers
and Mergers, the Securities and Exchange Commission of the
United States or the New York Stock Exchange whether or not
the requirement has the force of law.
28
18.3 The restrictions contained in this clause 18 shall continue to apply
after the termination of this Agreement without limit in time.
19. COSTS AND EXPENSES
Except as otherwise stated in this Agreement (or any agreement referred
to in this Agreement), each of the parties to this Agreement shall pay
its own costs and expenses in relation to the negotiations leading up
to the transfer of the Business Assets and to the preparation,
execution and carrying into effect of this Agreement and all other
documents referred to in it.
20. COUNTERPARTS
20.1 This Agreement may be executed in any number of counterparts, and by
the Transferor, the Transferee and the Employer on separate
counterparts, but shall not be effective until each party has executed
at least one counterpart.
20.2 Each counterpart shall constitute an original of this Agreement, but
all the counterparts shall together constitute but one and the same
instrument.
21. INVALIDITY
If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any
jurisdiction, that shall not affect or impair:-
(A) the legality, validity or enforceability in that jurisdiction
of any other provision of this Agreement; or
(B) the legality, validity or enforceability under the law of any
other jurisdiction of that or any other provision of this
Agreement.
22. CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
The parties to this Agreement do not intend that any term of this
Agreement should be enforceable, by virtue of the Contracts (Rights of
Third Parties) Act 1999, by any person who is not a party to this
Agreement.
23. CHOICE OF GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English law.
24. ARBITRATION
24.1 All matters in difference between the parties arising under, out of or
in connection with this Agreement, including formation and validity,
and whether arising during or after the period of this Agreement, may
be referred by any of the parties to this agreement to an arbitration
tribunal in the manner hereinafter set out.
29
24.2 Unless the parties appoint a sole arbitrator within 14 days of one
receiving a written request from the other for arbitration, the
claimant (the party requesting arbitration) shall appoint its
arbitrator and give written notice thereof to the respondent. Within 14
days of receiving such notice the respondent shall appoint its
arbitrator and give written notice thereof to the claimant, failing
which the claimant may apply to the appointor hereafter named to
nominate an arbitrator on behalf of the respondent.
24.3 The appointor shall be the Chairman for the time being of the A.I.D.A.
Reinsurance and Insurance Arbitration Society of the UK ("ARIAS (UK)")
or, if he is unavailable or it is inappropriate for him to act for any
reason, such person as may be nominated by the Committee of ARIAS (UK).
24.4 Before they enter upon a reference the two arbitrators shall appoint a
third arbitrator. Should they fail to appoint such a third arbitrator
within 30 days of the appointment of the respondent's arbitrator then
any of them or either of the parties concerned may apply to the
appointor for the appointment of the third arbitrator. The three
arbitrators shall decide by majority. If no majority can be reached the
verdict of the third arbitrator shall prevail. He shall also act as
chairman of the tribunal.
24.5 Unless the parties otherwise agree the arbitration tribunal shall
consist of persons (including those who have retired) with not less
than ten years' experience of insurance or reinsurance as persons
engaged in the industry itself or as lawyers or other professional
advisers.
24.6 The arbitration tribunal shall, so far as is permissible under the law
and practice of the place of arbitration, have power to fix all
procedural rules for the holding of the arbitration including
discretionary power to make orders as to any matters which it may
consider proper in the circumstances of the case with regard to
pleadings, discovery, inspection of the documents, examination of
witnesses and any other matter whatsoever relating to the conduct of
the arbitration and may receive and act upon such evidence whether oral
or written, strictly admissible or not as it shall in its discretion
think fit.
24.7 All costs of the arbitration shall be determined by the arbitration
tribunal who may, taking into account the law and practice of the place
of arbitration, direct to and by whom and in what manner they shall be
paid.
24.8 Unless the parties otherwise agree, the place of arbitration shall be
London, England and, for the avoidance of doubt, the arbitration
tribunal shall apply English law.
24.9 The award of the arbitration tribunal shall be in writing and binding
upon the parties who consent to carry out the same.
25. CONFLICT
In the event of any conflict between the provisions of this Agreement
and the Formation and Separation Agreement, the provisions of the
Formation and Separation Agreement shall prevail.
30
IN WITNESS whereof the parties have entered into this Agreement the day and year
first before written.
31
SCHEDULE 1
(COMPLETION ARRANGEMENTS)
1. MATTERS TO BE DEALT WITH BY THE TRANSFEROR
At Completion, the Transferor shall:
(A) Transfer of Business Assets capable of delivery
Deliver to the Transferee all the Business Assets which are
capable of transfer by delivery with the intent that legal and
beneficial title to these Business Assets shall pass by and
upon delivery.
(B) Other Matters
Deliver to the Transferee:
(i) the Ancillary Agreements (as defined in the Formation
and Separation Agreement) to which the Transferor is
a party duly executed by the Transferor;
(ii) all relevant National Insurance and PAYE records
fully completed and showing that payments are
up-to-date; and
(iii) a copy of the minutes of a meeting of the directors
of the Transferor authorising the execution by the
Transferor of this Agreement and all other relevant
documents to which the Transferor is a party referred
to in this Agreement.
(C) Vacant Possession of Lime Business Property
The Transferor shall give vacant possession of the Lime
Business Property (and of the other Business Assets capable of
possession) to the Transferee, pursuant to the licence in the
Agreed Form which shall be executed and delivered to the
Transferee at Completion.
2. MATTERS TO BE DEALT WITH BY THE TRANSFEREE
Following compliance by the Transferor with its obligations under
paragraph 1 above, the Transferee:
(A) shall deliver to the Transferor a copy of the minutes of a
meeting of the directors of the Transferee authorising the
execution by the Transferee of this
32
Agreement and all other relevant documents to which the
Transferee is a party referred to in this Agreement; and
(B) shall deliver to the Transferor duly executed documentation
granting options to the Transferor to purchase 894,260 common
shares in Platinum Holdings in consideration for the transfer
of the Business Assets by the Transferor to the Transferee.
33
SCHEDULE 2
(ASSUMED EMPLOYEES)
Part 1 Assumed Employees
KEY
PLATINUM UK FUNCTIONS SURNAME FORENAME EMPLOYEES
INTERNATIONAL UNDERWRITING
Underwriter: Casualty Archer Clive KE
Underwriting Ballard Chris KE
Director/General Manager
Underwriter Brudenell Samuel
Trainee Actuary Chan TJ
Underwriter Dean Jonathan
Underwriter Dekens Stephan
Underwriter Dudley Kerry
Actuary Gates Paul
Underwriter Property Fishman Len KE
Secretary Forsey Gwen
Underwriter Haynes Stephen KE
Managing Director Mahoney Tom KE
Underwriter Manning Andrew
Underwriter and Actuary Pettengell Craig
Underwriter Pomeroy Mark
Underwriter Robins Stuart
34
KEY
PLATINUM UK FUNCTIONS SURNAME FORENAME EMPLOYEES
Actuary Ross Fiona KE
Underwriting secretary Smith Cath
Underwriting Technician Stevenson Gary
Secretary Streeter Kim
Underwriting Actuary (part Tinson Jane
qualified)
Underwriter & Actuary Waters Les
35
PART 2
SUPPORT SERVICES SURNAME FORENAME
Accounts Assist Dean Christine
Finance Controller Boddy Stephen KE
Finance Director Butler Guy KE
Claims Manager Coldman Michael KE
Claims Handler Dawson Matthew
PA/HR Heddle Marie
IT Technical Howells David
IT Systems Development Lucas Charlie KE
Underwriting Admin Read Jacquie
Actuary Shah Minesh KE
Accounts Assistant Weaving Paul
36
SCHEDULE 3
(BUSINESS INTELLECTUAL PROPERTY)
The following underwriting pricing models (being identified by their directory
file names, as at 19 June, 2002:
T:\PCMODELS\2002Models\......
AGGFFT02
AGGHM02
AggSim5PO2
AggSimLN02
CASXPO02
Exper02
GENXPO02
INTCAT02
INTILW02
IntMtr02
LOSSDI02
NAILW02
PROPXP02
ProRat02
PRORAT02
SCHEDP02
WCRETR02
WCXPO02
37
T:\Pricing\2002\UK Cat\Aggregates\Processed Aggs\.......
\Aggs_UK2002_AreaConsolid_290900.xls
\Aggs_UK2002_district_fudge.xls
\Aggs_UK2002_Sector_Filter_CMP.xls
\Aggs_UK2002_Sector_RMS.xls
\Aggs_UK2002_Sector_Thames.xls
\RMS Sectors.xls
\Thames Sectors.xls
S:\Marine\Pricing\2002\Cargo and Specie.......
\Limits_profile_3.xls
\Limits_profile_estimation.xls
\profile generator_cargo.xls
S:\Marine\Pricing\2002\Hull\.........
\Hull Model 2002 CMP.xls
\Limits profile Hull.xls
\profile generator.xls
T:\Pricing\PCModels_Dev\UKcat2001small_2002.xls
S:\Marine\Pricing\2002\rig\pricing 2002 model.xls
S:\Marine\Pricing\2002\Satellite\Satellite Pricing Model 2002.xls
S:\Marine\Pricing\2002\Clashmod.WK4
38
SCHEDULE 4
(SHARED INTELLECTUAL PROPERTY)
ARS - Actuarial Reserving System.
SWAT - Financial Reporting System.
Fred - Financial Reporting Database.
Oil Rig database.
Underwriting Treaties Database.
Claims Lotus Notes databases.
39
SCHEDULE 5
(TRANSACTION DOCUMENTS)
Formation and Separation Agreement
UK Underwriting Agency and Underwriting Management Agreement
40
SCHEDULE 6
(TANGIBLE ASSETS)
The tangible assets shall consist of a fair apportionment between the Transferor
and the Transferee of the furniture, fixtures, computers, equipment, machinery
and other physical assets situated on the Closing Date on the premises to be
occupied by the Transferee under licence from the Transferor, such that the
Transferee will be able to carry on its business in the ordinary course.
41
SCHEDULE 7
(BONUS PAYMENTS)
FORENAME SURNAME 2002 TARGET OR GUARANTEED BONUS @ $1.45=L
Clive Archer L 31,850 $ 46,183
Christopher Ballard L 50,400 $ 73,080
Stephen Boddy L 13,000 $ 18,850
Samuel Brudenell L 6,000 $ 8,700
Chieh Chan L 4,314 $ 6,255
Michael Coldman L 27,720 $ 40,194
Matthew Dawson L 5,550 $ 8,048
Jonathon Dean L 9,450 $ 13,703
Christine Dean L 6,640 $ 9,628
Stephan Dekens L 9,600 $ 13,920
Kerry Dudley L 15,505 $ 22,482
Leonard Fishman L 32,375 $ 46,944
Gwen Forsey L 0 $ 0
Paul Gates L 20,800 $ 30,160
Stephen Haynes L 21,875 $ 31,719
Marie Heddle L 4,275 $ 6,199
David Howells L 5,100 $ 7,395
Charles Lucas L 11,078 $ 16,063
Thomas Mahoney L 94,828 $137,500
Andrew Manning L 21,700 $ 31,465
Craig Pettengell L 46,200 $ 66,990
Mark Pomeroy L 3,825 $ 5,546
Jacqueline Read L 7,080 $ 10,266
Stuart Robins L 9,650 $ 13,993
Fiona Ross L 15,000 $ 21,750
Minesh Shah L 16,500 $ 23,925
Catherine Smith L 2,475 $ 3,589
Gary Stevenson L 3,000 $ 4,350
Kim Streeter L 2,130 $ 3,089
Jane Tinson L 6,225 $ 9,026
Leslie Waters L 20,360 $ 29,522
Paul weaving L 4,875 $ 7,069
L529,379 $767,600
42
SCHEDULE 8
(EXISTING RETENTION OBLIGATIONS)
PAYMENT ELIGIBLE TO RECEIVE IF PAYMENT ELIGIBLE TO RECEIVE IF
EMPLOYED BY ST. PAUL OR EMPLOYED BY ST. PAUL OR
TRANSFEREE THROUGH TRANSFEREE THROUGH
NAME OF EMPLOYEE JUNE 1, 2002 JUNE 1, 2003
- ------------------- --------------------------------- ------------------------------
Clive Archer $50,000 $50,000
- ------------------- --------------------------------- ------------------------------
Christopher Ballard $50,000 $50,000
- ------------------- --------------------------------- ------------------------------
Leonard Fishman $50,000 $50,000
- ------------------- --------------------------------- ------------------------------
Thomas Mahoney $50,000 $50,000
- ------------------- --------------------------------- ------------------------------
Craig Pettengell $50,000 $50,000
- ------------------- --------------------------------- ------------------------------
43
SCHEDULE 9
(PRORATED RETENTION OBLIGATIONS)
NAME SALARY RETENTION % RETENTION $ DATE
- -------------------------------------------------------------------------
ARCHER,CLIVE L 91,000 0.25 L 22,750 07/01/2004
BALLARD,CHRIS L126,000 0.25 L 31,500 07/01/2004
BODDY,STEVE L 65,000 0.25 L 16,250 07/01/2004
COLDMAN,MICHAEL L 79,200 0.25 L 19,800 07/01/2004
DEAN,JONATHON L 47,250 0.25 L 11,813 07/01/2004
DEKENS,STEPHAN L 48,000 0.25 L 12,000 07/01/2004
DUDLEY,KERRY L 44,300 0.25 L 11,075 07/01/2004
FISHMAN,LEN L 92,500 0.25 L 23,125 07/01/2004
GATES,PAUL L104,000 0.4 L 41,600 07/01/2004
HAYNES,STEPHEN L 62,500 0.25 L 15,625 07/01/2004
HOWELLS,DAVID L 31,000 0.25 L 7,750 07/01/2004
LUCAS,CHARLIE L 55,388 0.25 L 13,847 07/01/2004
MANNING,ANDREW L 62,000 0.25 L 15,500 07/01/2004
MAHONEY,THOMAS L189,655 0.5 L 94,828 07/01/2004
PETTENGELL,CRAIG L132,000 0.25 L 33,000 07/01/2004
ROBINS,STUART L 48,250 0.25 L 12,063 07/01/2004
ROSS,FIONA L 75,000 0.4 L 30,000 07/01/2004
SHAH,MINESH L 82,500 0.5 L 41,250 07/01/2004
WATERS,LES L101,800 0.25 L 25,450 07/01/2004
L479,225
POWER OF ATTORNEY
ST. PAUL MANAGEMENT LIMITED
This POWER OF ATTORNEY is made the 31st day of October, 2002
by St. Paul Management Limited (the "GRANTOR").
WHEREAS:
In connection with an initial public offering of the common shares of Platinum
Underwriters Holdings, Ltd. the Grantor will be executing an Asset transfer
Agreement, whereby certain assets of the Grantor are to be transferred St. Paul
Reinsurance Company Limited and a UK Business Transfer Agreement, whereby
certain assets used in the reinsurance business carried on by St. Paul
Reinsurance Company Limited are to be transferred by that company to Platinum Re
(UK) Limited (the "AGREEMENTS").
NOW THIS DEED WITNESSETH as follows:
1. The Grantor hereby appoints any director of the Grantor for the time
being, to act jointly or severally, with full power to appoint a
substitute or substitutes, as its true and lawful attorneys (the
"ATTORNEYS" and each an "ATTORNEY") for it and its name and on its
behalf to execute, whether under hand or as a deed, the Agreements and
all other documents incidental thereto, and to take all other action
required by the Grantor in connection with, and to give effect to, the
Agreements as the Attorney, in his absolute discretion, thinks fit.
2. The Grantor irrevocably and unconditionally undertakes to:
(i) ratify and confirm whatever the Attorneys may do in its name
or on its behalf in exercising the powers contained in this
Deed; and
(ii) indemnify its Attorneys against all actions, proceedings,
claims, costs, expenses and liabilities of every description
arising from the exercise, or the purported exercise in good
faith, on or before the date specified in paragraph 3 below,
of any of the powers conferred by this Deed other than any
such actions, proceedings, claims, costs, expenses and
liabilities resulting from the gross negligence or wilful
misconduct of the Attorneys.
3. The Grantor hereby declares that this Power of Attorney shall be
irrevocable until, and will expire at, close of business on 8 November,
2002.
4. A reference in this deed to "Attorneys" is to be read as a reference to
them jointly and each of them severally.
5. This power of Attorney shall be governed by, and construed in
accordance with, English law.
2
IN WITNESS whereof this power of attorney has been executed and delivered as a
deed the day and year first before written.
EXECUTED as a DEED by ) /s/ T. J. Mahoney (Director)
St. Paul Management Limited ) -----------------
/s/ G. R. Butler (Director/Secretary)
-----------------
DEED OF APPOINTMENT
ST. PAUL MANAGEMENT LIMITED
This DEED OF APPOINTMENT is made the 31st day of October, 2002.
NOW THIS DEED WITNESSETH as follows:
I, Thomas Joseph Mahoney, hereby appoint any director for the time being of
Platinum Underwriters Holdings, Ltd., Platinum Underwriters Reinsurance, Inc. or
Platinum Regency Holdings, or Charles Collis, James MacDonald, Christopher
Garrod, David Doyle or any partner for the time being of the Bermuda law firm
Conyers Dill & Pearman, to act as my substitute or substitutes for the purposes
of the Power of Attorney made by St. Paul Management Limited in my favour on 31
October, 2002, a copy of which is attached to this letter.
IN WITNESS whereof this DEED OF APPOINTMENT has been executed and delivered as a
deed the day and year first before written.
Signed as a deed by ) /s/ T. J. Mahoney
Thomas Joseph Mahoney ) --------------------------------------
) (Signature of individual)
in the presence of:
Witness's signature: /s/ A. N. Anderson
--------------------------------------
Name (print): ANDREW ANDERSON
Occupation: SOLICITOR
Address: ONE BUNHILL ROW LONDON ECI
POWER OF ATTORNEY
ST. PAUL REINSURANCE COMPANY LIMITED
This POWER OF ATTORNEY is made the 31st day of October, 2002
by St. Paul Reinsurance Company Limited (the "GRANTOR").
WHEREAS:
In connection with an initial public offering of the common shares of Platinum
Underwriters Holdings, Ltd. the Grantor will be executing an Asset Transfer
Agreement, whereby certain assets of St. Paul Management Limited are to be
transferred to the Grantor, and a UK Business Transfer Agreement, whereby
certain assets used in the reinsurance business carried on by the Grantor are to
be transferred by the Grantor to Platinum Re (UK) Limited (the "AGREEMENTS").
NOW THIS DEED WITNESSETH as follows:
1. The Grantor hereby appoints any director of the Grantor for the time
being, to act jointly or severally, with full power to appoint a
substitute or substitutes, as its true and lawful attorneys (the
"ATTORNEYS" and each an "ATTORNEY") for it and in its name and on its
behalf to execute, whether under hand or as a deed, the Agreements and
all other documents incidental thereto, and to take all other action
required by the Grantor in connection with, and to give effect to, the
Agreements as the Attorney, in his absolute discretion, thinks fit.
2. The Grantor irrevocably and unconditionally undertakes to:
(i) ratify and confirm whatever the Attorneys may do in its name
or on its behalf in exercising the powers contained in this
Deed; and
(ii) indemnify its Attorneys against all actions, proceedings,
claims, costs, expenses and liabilities of every description
arising from the exercise, or the purported exercise in good
faith, on or before the date specified in paragraph 3 below,
of any of the powers conferred by this Deed other than any
such actions, proceedings, claims, costs, expenses and
liabilities resulting from the gross negligence or wilful
misconduct of the Attorneys.
3. The Grantor hereby declares that this Power of Attorney shall be
irrevocable until, and will expire at, close of business on 8 November,
2002.
4. A reference in this deed to "Attorneys" is to be read as a reference to
them jointly and each of them severally.
5. This Power of Attorney shall be governed by, and construed in
accordance with, English law.
2
IN WITNESS whereof this power of attorney has been executed and delivered as a
deed the day and year first before written.
EXECUTED as a DEED by ) /s/ T. J. Mahoney (Director)
St. Paul Reinsurance ) -----------------
Company Limited ) /s/ G. R. Butler (Director/Secretary)
-----------------
DEED OF APPOINTMENT
ST. PAUL REINSURANCE COMPANY LIMITED
This DEED OF APPOINTMENT is made the 31st day of October, 2002.
NOW THIS DEED WITNESSETH as follows:
I, Thomas Joseph Mahoney, hereby appoint any director for the time being of
Platinum Underwriters Holdings, Ltd., Platinum Underwriters Reinsurance, Inc. or
Platinum Regency Holdings, or Charles Collis, James MacDonald, Christopher
Garrod, David Doyle or any partner for the time being of the Bermuda law firm
Conyers Dill & Pearman, to act as my substitute or substitutes for the purposes
of the Power of Attorney made by St. Paul Reinsurance Company Limited in my
favour on 31 October, 2002, a copy of which is attached to this letter.
IN WITNESS whereof this DEED OF APPOINTMENT has been executed and delivered as a
deed the day and year first before written.
Signed as a deed by ) /s/ T. J. Mahoney
Thomas Joseph Mahoney ) ---------------------------
) (Signature of individual)
in the presence of:
Witness's signature: /s/ A. N. Anderson
-------------------
Name (print): ANDREW ANDERSON
Occupation: SOLICITOR
Address: ONE BUNHILL ROW LONDON ECI
POWER OF ATTORNEY
PLATINUM RE (UK) LIMITED
This POWER OF ATTORNEY is made the 31st day of October, 2002
by Platinum Re (UK) Limited (the "GRANTOR").
WHEREAS:
In connection with an initial public offering of the common shares of Platinum
Underwriters Holdings, Ltd. the Grantor will be executing a UK Business Transfer
Agreement (the "AGREEMENT") whereby certain assets used in the reinsurance
business carried on by St. Paul Reinsurance Company Limited are to be
transferred by that company to the Grantor.
NOW THIS DEED WITNESSETH as follows:
1. The Grantor hereby appoints any director of the Grantor for the time
being, to act jointly or severally, with full power to appoint a
substitute or substitutes, as its true and lawful attorneys (the
"ATTORNEYS" and each an "ATTORNEY") for it and in its name and on its
behalf to execute, whether under hand or as a deed, the Agreement and
all other documents incidental thereto, and to take all other action
required by the Grantor in connection with, and to give effect to, the
Agreement as the Attorney, in his absolute discretion, thinks fit.
2. The Grantor irrevocably and unconditionally undertakes to:
(i) ratify and confirm whatever the Attorneys may do in its name
or on its behalf in exercising the powers contained in this
Deed; and
(ii) indemnify its Attorneys against all actions, proceedings,
claims, costs, expenses and liabilities of every description
arising from the exercise, or the purported exercise in good
faith, on or before the date specified in paragraph 3 below,
of any of the powers conferred by this Deed other than any
such actions, proceedings, claims, costs, expenses and
liabilities resulting from the gross negligence or wilful
misconduct of the Attorneys.
3. The Grantor hereby declares that this Power of Attorney shall be
irrevocable until, and will expire at, close of business on 8 November,
2002.
4. A reference in this deed to "Attorneys" is to be read as a reference to
them jointly and each of them severally.
5. This Power of Attorney shall be governed by, and constructed in
accordance with, English law.
2
IN WITNESS whereof this power of attorney has been executed and delivered as a
deed the day and year first before written.
EXECUTED as a DEED by ) /s/ T. J. Mahoney
Platinum Re (UK) Limited ) ------------------- (Director)
) /s/ G. R. Butler
------------------- (Director/Secretary)
DEED OF APPOINTMENT
PLATINUM RE (UK) LIMITED
This DEED OF APPOINTMENT is made the 31st day of October, 2002.
NOW THIS DEED WITNESSETH as follows:
I, Thomas Joseph Mahoney, hereby appoint any director for the time being of
Platinum underwriters Holdings, Ltd., Platinum Underwriters Reinsurance, Inc. or
Platinum Regency Holdings, or Charles Collis, James MacDonald, Christopher
Garrod, David Doyle or any partner for the time being of the Bermuda law firm
Conyers Dill & Pearman, to act as my substitute or substitutes for the purposes
of the Power of Attorney made by Platinum Re (UK) Limited in my favour on 31
october, 2002, a copy of which is attached to this letter.
IN WITNESS whereof this DEEP OF APPOINTMENT has been executed and delivered as
a deed the day and year first before written.
Signed as a deed by ) /s/ T. J. Mahoney
Thomas Joseph Mahoney ) --------------------------
) (Signature of individual)
in the presence of:
witness's signature: /s/ A. N. Anderson
--------------------------
Name (print): ANDREW ANDERSON
Occupation: SOLICITOR
Address: ONE BUNHILL ROW LONDON ECI
44
Signed by /s/ Charles Collis )
as attorney for and on behalf of )
ST. PAUL REINSURANCE )
COMPANY LIMITED )
Signed by /s/ Charles Collis )
as attorney for and on behalf of )
PLATINUM RE (UK) LIMITED )
Signed by /s/ Charles Collis )
as attorney for and on behalf of )
ST. PAUL MANAGEMENT )
LIMITED )