Initial Public Offering (IPO): Pre-Effective Amendment to Registration Statement (General Form) — Form S-1
Filing Table of Contents
Document/Exhibit Description Pages Size
1: S-1/A Amendment No. 1 to S-1 HTML 2.13M
25: CORRESP ¶ Comment-Response or Other Letter to the SEC 18 41K
5: EX-10.10 Ex-10.10: Termination Agreement 6 25K
6: EX-10.13 Ex-10.13: Placement Agency Agreement 18 89K
7: EX-10.14 Ex-10.14: Underwriting Agency Agreement 13 52K
8: EX-10.15 Ex-10.15: Amended and Restated Amendment No. 1 to 1 12K
Underwriting Agency Agreement
9: EX-10.16 Ex-10.16: Amendment No. 2 to Underwriting Agency 1 10K
Agreement
10: EX-10.17 Ex-10.17: Amendment No. 3 to Underwriting Agency 1 11K
Agreement
11: EX-10.18 Ex-10.18: Amendment No. 4 to Underwriting Agency 2 14K
Agreement
12: EX-10.19 Ex-10.19: Termination Letter of Underwriting 1 9K
Agency Agreement
13: EX-10.20 Ex-10.20: Software License Agreement Terms and 15 56K
Conditions
14: EX-10.28 Ex-10.28: Surplus Lines Program Administrator 16 69K
Agreement
15: EX-10.29 Ex-10.29: Insurance Letters of Credit Master 5 31K
Agreement
16: EX-10.30 Ex-10.30: Account Control Agreement 4 24K
17: EX-10.31 Ex-10.31: Amendment No. 1 to Account Control 4 18K
Agreement
18: EX-10.32 Ex-10.32: Pledge Agreement 11 52K
19: EX-10.33 Ex-10.33: Credit Agreement 39 140K
20: EX-10.34 Ex-10.34: Global Amendment Agreement 7 24K
21: EX-10.35 Ex-10.35: Agreement 5 22K
22: EX-10.36 Ex-10.36: Account Control Agreement 10 35K
23: EX-10.37 Ex-10.37: Credit Agreement 88 318K
2: EX-10.7 Ex-10.7: Administrative Services Agreement 10 42K
3: EX-10.8 Ex-10.8: Amended and Restated Administrative 17 60K
Services Agreement
4: EX-10.9 Ex-10.9: Services Agreement 4 21K
24: EX-23.3 Ex-23.3: Consent of Deloitte & Touche 1 10K
‘EX-10.8’ — Ex-10.8: Amended and Restated Administrative Services Agreement
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EXHIBIT 10.8
AMENDED AND RESTATED
ADMINISTRATIVE SERVICES AGREEMENT
THIS AMENDED AND RESTATED ADMINISTRATIVE SERVICES AGREEMENT (the
"Agreement") is made as of the 1st day of January, 2006 among (1) Newmarket
Underwriters Insurance Company, a corporation organized under the laws of New
Hampshire, ("NUIC"), (2) Allied World Assurance Company (U.S.) Inc., a
corporation organized under the laws of Delaware ("AWAC US" and together with
NUIC, the "Companies"), and (3) Lexington Insurance Company, a corporation
organized under the laws of Delaware ("LEXINGTON").
W I T N E S S E T H
WHEREAS, each of the parties hereto entered into that certain
Administrative Services Agreement, dated as of July 15, 2002 (as amended,
modified and supplemented, the "Original Services Agreement"), pursuant to which
Lexington agreed to (or cause its affiliates to) furnish the Companies with
certain office space, equipment, administrative services and personnel.
WHEREAS, the parties desire to amend and restate the Original Services
Agreement, subject to the terms and conditions hereinafter provided.
NOW, THEREFORE, it is agreed as follows:
1. Services to be provided
1.1 LEXINGTON shall furnish or cause to be furnished (in accordance with the
performance standards set forth in this Agreement) services and facilities
to the Companies required by the Companies in the ordinary course of the
business of the Companies which are denominated and classified as follows:
(a) office space at 100 Summer Street, Boston, Massachusetts at cost, which
space may be owned by LEXINGTON or one of its affiliates or may be leased
from others, and which shall include as a part thereof cleaning, elevator
service, repair and engineering services and warehouse and central files
facilities;
(b) Policy services: LEXINGTON shall bill, receive and render receipts for
premiums due to the Companies in accordance with the terms and conditions
of each policy of insurance issued and in accordance with the written
instructions of the Companies. LEXINGTON shall have full authority
hereunder to take whatever action it deems necessary or appropriate to
attempt to collect premiums, including, if so instructed by the Companies,
the cancellation of policies. LEXINGTON shall have no liability for
uncollected premiums. All premiums due to the Companies and received and
held by LEXINGTON shall be held in a fiduciary capacity.
(c) Financial, financial reporting and financial management services:
LEXINGTON shall:
(i) prepare comprehensive quarterly financial statements including, but
not limited to, profit and loss statements, balance sheets and cash
flow statements; in addition, prepare monthly management reports
including statistical reports and information (including information
on outstanding loss reserves, reserves for IBNR losses and expenses)
with respect to the Companies and the Companies's business as may be
required by law or requested by the Companies;
(ii) establish, implement and manage systems for the Companies' treasury
functions and the production of historical financial statements;
(iii) maintain the general ledger for the Companies, including the
movement of cash in and out of the bank accounts and/or the movement
of securities in unregistered form;
(iv) prepare and file all required premium tax and federal excise tax
reports and returns relating to the Companies's business; and
(v) perform bookkeeping and internal financial record keeping services
related to the recording of accounts receivable, accounts payable,
payroll costs, etc.
(d) Lexington shall provide the following services to the Companies with
respect to regulatory compliance and filings: the preparation of accounts
and filing of statutory insurance financial statements (including
investment accounting services) as well as any services (other than legal
services) relating to examinations by state insurance authorities of the
Books and Records (as defined in Section 5.2 of this Agreement) of the
Companies. Lexington shall separately account for and bill for these
services to the Companies.
(e) LEXINGTON shall, during the period beginning on the date hereof and ending
on March 31, 2006, prepare filings to maintain the Companies' authorized
status with state insurance departments, although in no event shall
LEXINGTON provide legal review of any such filings.
(f) perform tax and accounting services, other than as contemplated in this
Section 1.1, as may be requested by either of the Companies from time to
time, except to the extent that such services are provided by independent
parties (e.g., Deloitte and Touche) (which third party services shall be
billed directly to and be remunerated by the Companies).
(g) Information Technology: Electronic data processing which shall include all
necessary hardware and generic software to the same specification as
provided to LEXINGTON employees. This shall include administration,
maintenance and licensing costs, helpdesk support, electronic mail and
operational management.
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(h) making withdrawals from time to time in accordance with written
authorization procedures established by the Companies from any bank
account or accounts established by the Companies in order to pay in a
timely manner, the necessary, reasonable and proper expenses of the
Companies (it being understood that any interest that accrues on funds in
such account or accounts shall be the sole property of the Companies).
Such expenses shall include: (i) claim payments under insurance and
reinsurance contracts entered into by the Companies; (ii) management fees
to be paid pursuant to Section 2 hereof; (iii) banking service fees; (iv)
fees of the firm of auditors or chartered accountants of the Companies;
(v) fees and taxes to appropriate regulatory authorities; (vi)
compensation and expenses of directors and salaries of officers of the
Companies as shall have been approved by the Board of Directors of the
Companies; (vii) communication costs; (viii) travel and entertainment
costs incurred by officers of the Companies; (ix) payments to be made
under the Investment Management Agreement, dated as of the date hereof,
between the Companies and Goldman Sachs Asset Management International,
provided that the making of such payments shall have first been approved
by the Board of Directors of the Companies or an Officer of the Company
authorized thereby; and (x) other necessary expenses incurred in the
ordinary course of business, as may be approved periodically by the
Companies;
(i) depositing all premiums and other sums collected or received on the
Companies' behalf by LEXINGTON directly and immediately in an account or
accounts established by the Companies, in the Companies' name and for the
Companies' benefit, it being understood that in no event and for no period
of time may any such premiums or other sums be deposited in an account in
the name or for the benefit of any person or entity other than the
Companies;
(j) coordinating and cooperating with representatives, including auditors, of
the Companies, providing such access to the Companies' Books and Records
and personnel as may be reasonably necessary or desirable for the Company
to monitor its investment in the Companies, evaluate the risks, systems
and business of the Companies and develop the capability of employees of
the Companies to carry out such functions;
(k) undertaking the negotiation of all trust agreements, letters of credit and
other arrangements needed for the collateralization of assumed reinsurance
contracts and the analysis as to the use of trust or other type of vehicle
which may be appropriate in the circumstances, which agreements, letters
of credit and other arrangements will be subject to the final approval of,
and execution by, the Companies;
(l) a purchasing department, provided that to the extent purchases are made by
LEXINGTON on behalf of the Companies, the actual cost of purchases, which
shall not exceed the cost at which purchases are available generally from
unaffiliated third parties, shall be billed to the applicable Company;
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(m) telephone and telephone switchboard services (provided that the actual
cost of telephone calls (but no expense allocated or otherwise of
switchboard services), which shall not exceed the cost at which such calls
are available generally from an unaffiliated third party, shall
additionally be billed to the Companies);
(n) a mail and communications department, including, without limitation, cable
and teletype, messenger, mail handling and postage services (provided that
the actual cost of any third party mail carriers shall additionally be
billed to the Company);
(o) claims handling services as permitted by law with respect to any loss
claim or suit under any NUIC or AWAC US policy which is reported during
the effective dates of this Agreement; and
(p) investment monitoring services in respect of certain portfolios (of cash,
securities and other assets) of the Companies, including quarterly reviews
of portfolios for compliance with investment restrictions imposed by state
insurance laws.
Without prejudice to the rights of LEXINGTON under this Agreement (including
under Section 2.1 hereof), the Companies shall not be required to obtain any
services, including those described above, from LEXINGTON or be prohibited from
obtaining such services from parties other than LEXINGTON.
Any other services or departments found to be necessary or desirable by either
of the Companies shall be provided by LEXINGTON only after separate negotiation
and agreement by all of the parties hereto. The additional costs of any such
other services or departments shall be allocated in an equitable manner to be
agreed upon by the parties hereto.
Each of the parties shall use its reasonable best efforts to reach agreement
upon any adjustments to the scope of services provided hereunder, and
corresponding adjustments to the fees to be paid hereunder, as may reasonably be
required after the date hereof (for example, to the extent that it is mutually
agreed that services contemplated to be performed by LEXINGTON under this
Agreement should be performed by employees or other agents of the Companies or
to the extent that it is mutually agreed that LEXINGTON should assume additional
responsibilities hereunder).
1.2 LEXINGTON hereby represents and warrants to the Companies that any
software licensed or otherwise provided to the Companies hereunder by
LEXINGTON shall not infringe upon any copyrights of any other person in
any jurisdiction where a claim against either of the Companies would arise
as a result of the use of such software by the Companies. With respect to
any computer software provided to either of the Companies pursuant to
Section 1.1 hereof (other than business processing software developed for
the Companies), each of the Companies acknowledges that it hereby accepts
from LEXINGTON the non-exclusive, non-transferable, non-assignable right
to use such software solely and exclusively in connection with its
insurance operations, all in accordance with the further terms and
conditions of this Agreement. Any and all copyrights, or
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common law or statutory rights and powers, relating to any such computer
software (or any operating manuals relating thereto) shall be and remain
at all times the sole and exclusive property of LEXINGTON, and the right
of the Companies to use such computer software shall be solely as a
licensee of LEXINGTON pursuant hereto. Such computer software may not be
copied, duplicated or otherwise reproduced, in whole or in part, without
the prior written consent of LEXINGTON, and nothing therefrom may be
disclosed to any person other than those to whom such disclosure is
authorized by LEXINGTON. Such computer software shall be returned to
LEXINGTON upon termination of this Agreement and, in any event, upon
completion of the use for which they are hereby provided.
1.3 With respect to any equipment, furniture or other furnishings or fixtures,
including, without limitation, personal computers, printers, photocopiers,
facsimile machines and application servers (collectively, "Equipment")
provided to either of the Companies pursuant to Section 1.1 hereof, each
of the Companies acknowledges that such Equipment is, and at all times
during the term of this Agreement and thereafter shall remain, the
property of LEXINGTON and neither of the Companies shall have any right,
title or interest therein or thereto except as provided herein. Upon
LEXINGTON's reasonable request, the Companies shall affix and keep in a
prominent place on each item of Equipment labels, plates or other markings
indicating that the Equipment is owned by LEXINGTON. The Companies shall
not make any modifications, alterations, additions or improvements to the
Equipment without LEXINGTON's prior written consent. All such additions
and improvements shall belong to LEXINGTON. The Equipment shall remain
personal property of LEXINGTON regardless of its affixation to any realty.
The Companies shall keep the Equipment at the office space provided to the
Companies by LEXINGTON pursuant to Section 1.1 hereof and, unless
otherwise agreed to by LEXINGTON in writing, shall not remove any of the
same therefrom without LEXINGTON's prior written consent. The Companies
covenant and agree to (a) keep the Equipment in good repair, ordinary wear
and tear excepted, and comply with all laws, ordinances, regulations or
requirements of any governmental authority relating to its installation,
possession, use or maintenance and (b) keep the Equipment free and clear
of all liens and encumbrances.
1.4. During the term of this Agreement, LEXINGTON shall perform all of its
obligations under this Agreement: (a) to the best of its professional
ability; and (b) with that degree of knowledge, skill and judgment which
is exercised by it with respect to its own business and the business of
its parent and insurance and reinsurance affiliates.
1.5 LEXINGTON shall comply with all applicable laws, rules and regulations in
respect of all activities conducted by it under this Agreement.
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1.6 LEXINGTON shall be subject to the ultimate direction, limitation,
approval, control and supervision of the Companies and their respective
Boards of Directors with respect to the services provided hereunder.
2. Payment and Reimbursement of Service Fees and Costs
2.1 As remuneration for the services provided under this Agreement, the
Companies shall (in addition to the reimbursement of any costs described
herein) pay to LEXINGTON a fee constituting the actual direct and indirect
costs involved in providing the services detailed in the agreement
invoiced on a monthly basis, plus 10% over and above the invoiced costs as
a profit.
2.2 In the event of any termination (including by expiration) of this
Agreement, LEXINGTON shall provide the Companies with an accounting of all
fees and reimbursable costs within thirty (30) days following the
effective date of such termination, and the Companies or LEXINGTON shall
upon agreement of such accounting pay to the other any further payments or
refunds such accounting shows as owing at termination within thirty (30)
days following receipt of such accounting.
2.3 In addition to monthly invoices for fees, LEXINGTON shall issue, each
month, a separate invoice for any costs permitted to be billed separately
pursuant to Section 1.1 hereof during the immediately prior month. The
Companies shall pay the amount of or otherwise reimburse LEXINGTON for any
such costs promptly upon receipt of any such invoice therefore.
2.4 For the avoidance of doubt, the parties hereto acknowledge and agree that
any and all payments due for services provided on or prior to the date
hereof pursuant to the Original Services Agreement will be paid in
accordance with the terms thereof, and any such payment obligations are
not limited or otherwise affected in any way by this Agreement.
3. Term and Termination of Agreement
3.1 The initial term of this Agreement shall commence effective as of January
1, 2006 and shall continue in force until December 31, 2006; provided,
however, that any party hereto may terminate this Agreement at any time,
for any reason, upon 90 days' prior written notice of termination to the
other parties hereto. Notwithstanding the foregoing, each of AWAC US and
NUIC may terminate this Agreement at any time for Company Cause (as
defined in Section 3.2(a) of this Agreement) and LEXINGTON may terminate
this Agreement at any time for Lexington Cause (as defined in Section
3.2(b) of this Agreement).
3.2 (a) This Agreement may be terminated by the Companies, immediately upon
the lapse of any applicable cure period, by notice served on LEXINGTON if:
(i) LEXINGTON commits a material breach of its obligations under this
Agreement, which breach shall have continued without having been cured for
a period of 60 days after notice thereof from the Companies; (ii)
LEXINGTON or
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any of its principals is engaging or has engaged during the term of this
Agreement in fraud or dishonesty or any act involving moral turpitude;
(iii) a distress, execution, sequestration or other process is levied or
enforced upon the property of LEXINGTON which is not discharged within 30
days; (iv) LEXINGTON is unable to pay its debts in the normal course of
business, which inability shall have continued for a period of 30 days;
(v) LEXINGTON ceases or threatens to cease, wholly or substantially, to
carry on its business; (vi) an encumbrancer takes possession of, or a
receiver or trustee is appointed over the whole or any part of the
undertaking, property or assets of LEXINGTON; (vii) an order is made or a
resolution is passed for the winding-up of LEXINGTON; or (viii) American
International Group, Inc. ceases to own, directly or indirectly, interests
representing more than 50% of the voting interests in LEXINGTON (any of
the foregoing (i) - (viii) of this Section 3.2(a), a "Company Cause").
(b) This Agreement may be terminated by LEXINGTON, immediately upon the
lapse of any applicable cure period, by notice served on the Companies if:
(i) the Companies or either one of them commit(s) a material breach of the
Companies' obligations under this Agreement, which breach shall have
continued without having been cured for a period of 60 days after notice
thereof from LEXINGTON; (ii) a distress, execution, sequestration or other
process is levied or enforced upon the property of the Companies or either
one of them which is not discharged within 30 days; (iii) the Companies
are unable to pay their debts in the normal course of business, which
inability shall have continued for a period of 30 days; (iv) the Companies
ceases or threatens to cease, wholly or substantially, to carry on its
business; (v) an encumbrancer takes possession of, or a receiver or
trustee is appointed over the whole or any part of the undertaking,
property or assets of either the Company or the Companies; (vi) an order
is made or a resolution is passed for the winding-up of either the Company
or the Companies; or (vii) the shareholders of the Company as of the date
hereof, taken together, cease to own, directly or indirectly, interests
representing more than 50% of the voting interests in the Company (any of
the foregoing (i) - (vii) of this Section 3.2(b), a "LEXINGTON Cause").
3.3 If this Agreement terminates pursuant to its terms on December 31, 2006,
LEXINGTON shall continue providing (a) the services set forth in Section
1.1(g) for an additional three month period following termination and (b)
the services set forth in Sections 1.1(c) and (d) only as such services
relate solely to periods ending on or before December 31, 2006. For the
avoidance of doubt, any services provided pursuant to this Section 3.3
would be subject to the payment procedures set forth in Section 2 of this
Agreement.
3.4 If this Agreement is terminated (other than services provided pursuant to
Section 3.3), (a) any fees payable under Section 2 of this Agreement with
respect to the performance of LEXINGTON under this Agreement will be
determined to the effective date of termination; (b) on or as of the
termination date, the Companies shall be entitled to require LEXINGTON to
carry out one or more of the following: (i) deliver to the Companies or
its designee, in a mutually agreeable
7
format, all the Books and Records, however generated, relating to the
Companies's business including any off-line storage and security copies of
data relating to the Companies's business; (ii) store on magnetic, optical
or other media all or any of the information then stored on-line relating
the Companies's business and to deliver such media, in a mutually
agreeable format, to the Companies or its designee; (iii) make and deliver
to the Companies or its designee such printouts of information relating to
the Companies's business as the Companies may reasonably require; and (iv)
use its reasonable best efforts to obtain for the Company direct licenses
to use, or to procure the sale to the Company of, any third party software
used during the term of this Agreement (including any software owned by
LEXINGTON); (c) LEXINGTON shall cooperate fully with the Companies or its
designee in performing its obligations under this Section 3.3, and (d) the
following provisions of this Agreement will survive the termination:
Sections 1.2, 1.3, 6, 7, 8, 9, 10, 11 and 15.
4. Representations and Warranties
4.1 Representations and Warranties of LEXINGTON
LEXINGTON represents and warrants as of the date hereof as follows: (a)
LEXINGTON is a company duly incorporated, validly existing and in good
standing under the laws of Delaware; (b) the execution, delivery and
performance by LEXINGTON of this Agreement are within LEXINGTON's
corporate powers, have been duly authorized by all necessary corporate
action, do not contravene (i) LEXINGTON's memorandum of association or
bye-laws; or (ii) law or any regulation or contractual restriction binding
on or affecting LEXINGTON; (c) no authorization or approval or other
action by, and no notice to or filing with, any governmental authority is
required for the due execution, delivery and performance by LEXINGTON of
this Agreement except for such filings with, and approvals of such
governmental authorities as will have been made and obtained prior to the
date of this Agreement; and (d) this Agreement is the legal, valid and
binding obligation of LEXINGTON enforceable against LEXINGTON in
accordance with its terms.
4.2. Representations and Warranties of the Companies
Each of the Companies represents and warrants as of the date hereof as
follows: (a) it is a company duly incorporated, validly existing and in
good standing under the laws of its state of incorporation as stated
herein; (b) the execution, delivery and performance by it of this
Agreement are within its corporate powers, have been duly authorized by
all necessary corporate action, do not contravene (i) its memorandum of
association or bye-laws; or (ii) law or any regulation or contractual
restriction binding on or affecting it; (c) no authorization or approval
or other action by, and no notice to or filing with, any governmental
authority is required for the due execution, delivery and performance by
it of this Agreement except for such filings with, and approvals of such
governmental authorities as will have been made and obtained prior to the
date of this Agreement; and (d) this
8
Agreement is its legal, valid and binding obligation enforceable against
it in accordance with the terms of this Agreement.
5. Right of the Companies to Inspect Records
5.1 LEXINGTON shall keep, in a manner and form approved by or acceptable to
the Companies, true and complete Books and Records of all the Companies's
business conducted under and pursuant to this Agreement.
5.2 LEXINGTON shall maintain all records with regard to the Companies's
business separately from the records of its other businesses, provided
that the Companies may use identical computer and other systems so long as
information with regard to the Companies is maintained separately and in
an identifiable manner. The Companies shall have the right at all times
during LEXINGTON's business hours, and at its own expense, to inspect the
records of LEXINGTON (or any entity employed by LEXINGTON for any such
purpose) relating to the facilities, services, space or equipment provided
hereunder. The term "Books and Records" shall mean all materials, books
and records and data in whatever form or medium (a) furnished by the
Companies to LEXINGTON in connection with the performance by LEXINGTON of
its obligations under this Agreement; (b) generated by LEXINGTON in
connection with the performance by LEXINGTON of its obligations under this
Agreement; or (c) that in any way pertain to the performance of the
obligations of LEXINGTON under this Agreement, including books of account,
insurance and reinsurance policies and contracts entered into by the
Companies and all correspondence related thereto, underwriting files,
claim and reserving files, data on premium and claim payments and any and
all materials, books and records and data relating to Companies' business.
6. Ownership of Books and Records by the Companies
6.1 All Books and Records kept by LEXINGTON in connection with the Companies's
business managed by LEXINGTON shall be and remain the sole property of the
Companies and will remain the property of the Companies following
termination of this Agreement, including all databases maintained by
LEXINGTON relating to the Companies' accounting, insurance or other
records and whether or not such data is maintained on information systems
owned by LEXINGTON or the Companies or neither. All such Books and Records
shall be delivered to the Companies upon termination of this Agreement.
6.2 The Companies shall maintain such Books and Records for a period of ten
(10) years or for the period as may be required under their respective
records retention policies if longer or for such longer period of time as
may be required by law or any applicable court order and LEXINGTON shall
have reasonable access to and the right to inspect such Books and Records
during such period for (i) LEXINGTON's preparation of tax returns,
including, but not limited to, any inquiries by any governmental or
regulatory authority in respect of the taxes of
9
LEXINGTON or (ii) LEXINGTON's response to any claims, lawsuits, legal
proceedings or investigations.
6.3 Notwithstanding any other provision of this Section 6, Section 3.4 or this
Agreement generally, LEXINGTON shall have the right to retain, at its own
expense, a copy of any Books and Records and the original computer back-up
tapes which contain information relating to both the business and
operations of LEXINGTON or it affiliates and the Companies; provided that
LEXINGTON shall maintain such Books and Records and tapes for a period of
ten (10) years or for the period as may be required under its records
retention policy if longer or for such longer period of time as may be
required by law or any applicable court order and further provided that
the Companies shall have reasonable access to and the right to inspect and
make a copy of such copy of the Books and Records and original tapes to
the extent they relate to the business and operations of either of the
Companies or to respond to any tax matters, claims, lawsuits, legal
proceedings or investigations.
7. Confidentiality
7.1 LEXINGTON hereby acknowledges that, as a result of its performance of
services for the Companies under this Agreement, it has and will acquire
non-public information with respect to the Companies and their respective
affairs, including: (a) information relating to the business, finances,
methods of operation, business plans, marketing strategies and other
information relating to the Companies and customers of the Companies and
(b) other trade secrets and proprietary information of the Companies
(hereinafter collectively referred to as "Confidential Information").
7.2 During the term of this Agreement and at all times thereafter, LEXINGTON
shall, and shall cause each of its directors, officers, employees and
agents (such Persons, collectively "Covered Persons") to, keep
confidential (to the extent required hereby) all Confidential Information
that any of them may obtain and to not to use such Confidential
Information for any purpose other than in the course of the performance of
this Agreement.
7.3 The foregoing restrictions shall not apply with respect to any
Confidential Information (a) previously known to LEXINGTON through a
source not bound by any obligation to keep the Confidential Information
confidential, (b) lawfully obtained by LEXINGTON, other than its capacity
as the provider of services to the Companies under this Agreement, from
sources not bound by any obligation to keep such Confidential Information
confidential, or (c) the disclosure of which to any director, officer,
employee or agent of LEXINGTON is necessary to carry out the purposes of
this Agreement, provided, however, that such disclosure referred to in
this clause (c) shall be limited to the extent reasonably necessary to
protect the rights of the Companies with respect to its Confidential
Information, and that as a condition to disclosing any Confidential
Information to any person who is not bound by a duty of confidentiality to
LEXINGTON and its clients,
10
LEXINGTON shall require that such person enter into a confidentiality
agreement with the Companies on terms satisfactory to the Companies. In
addition, notwithstanding anything to the contrary provided in this
Agreement, the restrictions upon use and disclosure of information under
this Section 7 shall not apply to any information developed by, and/or
provided to the Companies or LEXINGTON by, American International Group,
Inc. (to the extent that American International Group, Inc. is not subject
to any confidentiality obligation to the Companies with respect thereto)
or any of its affiliates (to the same extent) other than information
generated by LEXINGTON in connection with the performance by LEXINGTON of
its obligations under this Agreement.
7.4 LEXINGTON may disclose any Confidential Information if and as required as
a result of any governmental investigation, court order, subpoena,
deposition, interrogatory, request for documents, civil investigative
demand, or similar legal duress, and to the extent reasonably necessary
for LEXINGTON or any of its affiliates to comply with applicable
securities laws and regulations and stock exchange requirements and the
applicable regulations of other regulatory agencies having jurisdiction
over LEXINGTON or any of its affiliates.
7.5 Notwithstanding anything provided in this Section 7, Confidential
Information may be disclosed with the prior written consent of the Board
of Directors of the Company or the Companies, as the case may be.
8. Indemnification
8.1 The Companies hereby, jointly and severally, indemnify and hold LEXINGTON
and each of its directors, officers, servants, agents and employees
(collectively, "LEXINGTON Indemnitees"), harmless from and agrees to
defend each of them from and against all and any manner of liabilities,
suits, claims, damages and expenses ("Losses") arising out of or in
connection with the performance by LEXINGTON of its obligations hereunder
(other than those Losses that are the result of willful misconduct, bad
faith or gross negligence on the part of any of the LEXINGTON Indemnitees,
with respect to which LEXINGTON shall remain liable).
8.2. Indemnification Procedures
(a) In the case of any claim asserted by a third party against a party
entitled to indemnification under this Section 8 (the "Indemnified
Party"), notice shall be given by the Indemnified Party to the party
required to provide indemnification (the "Indemnifying Party")
promptly after such Indemnified Party has actual knowledge of any
claim as to which indemnity may be sought, and the Indemnified Party
shall permit the Indemnifying Party (at the expense of such
Indemnifying Party) to assume the defense of any claim or any
Litigation resulting therefrom, provided that: (i) counsel for the
Indemnifying Party who shall conduct the defense of such claim or
litigation shall be satisfactory to the Indemnified Party, and the
Indemnified Party
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may participate in such defense at such Indemnified Party's expense;
and (ii) the failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its
indemnification obligation under this Agreement except to the extent
that such failure results in a lack of actual notice to the
Indemnifying Party and such Indemnifying Party is materially
prejudiced by way of any forfeiture of rights or defenses or
otherwise as a result of such failure to give notice.
(b) Except with the prior written consent of the Indemnified Party, no
Indemnifying Party, in the defense of any such claim or litigation,
shall consent to entry of any judgment or enter into any settlement
that provides for injunctive or other non-monetary relief affecting
the Indemnified Party or that does not include as an unconditional
term thereof the giving by each claimant or plaintiff to such
Indemnified Party of a release from all liability with respect to
such claim or litigation. The parties shall cooperate in the defense
of any claim or litigation brought under this Section 8.2 and the
records of each shall be available to the other with respect to such
defense.
8.3 The Companies shall maintain insurance coverage of the kinds and in the
amounts that is appropriate for their businesses. LEXINGTON shall be the
sole loss payee with respect to insurance for damage to or loss of
Equipment and LEXINGTON shall be an additional named insured on the
Companies' comprehensive liability insurance. The Companies shall deliver
to LEXINGTON a certificate of insurance with respect thereto. Said
insurance shall provide that it cannot be amended or canceled without the
insurer first giving LEXINGTON not less than 60 days' prior written notice
thereof.
8.4 LEXINGTON shall maintain insurance coverage of the kinds and in the
amounts that is appropriate for its business, including errors and
omissions liability insurance coverage.
9. Employee Matters.
(a) Except as specifically provided in Section 9(b) below, neither
Company nor any of their respective affiliates shall, during the
period beginning on the date hereof and concluding on the 18-month
anniversary of the termination or expiration of this Agreement,
solicit the employment of, or hire, any employee of LEXINGTON or its
affiliates without the prior written consent of LEXINGTON, which
consent shall be confirmed in writing by an Executive Vice President
of LEXINGTON.
(b) Upon the expiration or termination of this Agreement, the Companies
may make offers of employment to all of the employees of LEXINGTON
that spend greater than 50% of their time providing services to the
Companies pursuant to this Agreement ("Service Employees"). The
Companies shall jointly and severally indemnify LEXINGTON against
any and all Losses relating to any Service Employee who does not
receive an offer of
12
employment from the Companies upon the expiration or termination of
this Agreement ("Excluded Employees"), including (i) any
employment-related Losses with respect to any Excluded Employee and
(ii) any Losses related to severance or similar payments due to any
Excluded Employee in accordance with the American International
Companies Personnel Manual, specifically Policy No. 412 (Severance
Pay) and Policy No. 415 (Reduction in Force).
10. Arbitration
(a) Resolution of Disputes, Choice of Law & Venue - As a condition
precedent to any right arising hereunder, any dispute not resolved
by mediation between the Companies and Lexington arising out of the
provisions of this Agreement or concerning its interpretation or
validity, whether arising before or after termination of this
Agreement, shall be submitted to arbitration in the manner
hereinafter set forth, and shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving
effect to the principles of conflict of laws thereof.
(b) Composition of Panel - Unless the parties agree upon a single
arbitrator within fifteen (15) days after the receipt of a notice of
intention to arbitrate, all disputes shall be submitted to an
arbitration panel composed of two arbitrators and an umpire chosen
in accordance with Section 10(c) hereof.
(c) Appointment of Arbitrators - The members of the arbitration panel
shall be chosen from persons knowledgeable in the insurance
business. Unless a single arbitrator is agreed upon, the party
requesting arbitration (hereinafter referred to as the "claimant")
shall appoint an arbitrator and give written notice thereof by
certified mail, to the other party (hereinafter referred to as the
"respondent") together with his notice of intention to arbitrate.
Within thirty (30) days after receiving such notice, the respondent
shall also appoint an arbitrator and notify the claimant thereof by
certified mail. Before instituting a hearing, the two arbitrators so
appointed shall choose an umpire. If, within twenty (20) days after
the appointment of the arbitrator chosen by the respondent, the two
arbitrators fail to agree upon the appointment of any umpire, each
of them shall nominate three individuals to serve as umpire, of whom
the other shall decline two and the umpire shall be chosen from the
remaining two by drawing lots. The name of the individual first
drawn shall be the umpire.
(d) Failure of Party to Appoint an Arbitrator - If the respondent fails
to appoint an arbitrator within thirty (30) days after receiving a
notice of intention to arbitrate, the claimant's arbitrator shall
appoint an arbitrator on behalf of the respondent, such arbitrator
shall then, together with the claimant's arbitrators, choose an
umpire as provided in Section 10(c) hereof.
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(e) Submission of Dispute to Panel - Unless otherwise extended by the
arbitration panel or agreed to by the parties, each party shall
submit its case to the panel within thirty (30) days after the
selection of the umpire.
(f) Procedure Governing Arbitration - All proceedings before the panel
shall be informal and the panel shall not be bound by the formal
rules of evidence. The panel shall have the power to fix all
procedural rules relating to the arbitration proceeding. In reaching
any decision, the panel shall give due consideration to the customs
and usage's of the insurance business.
(g) Arbitration Award - The arbitration panel shall render its decision
within thirty (30) days after termination of the proceeding, which
decision shall be in writing, stating the reasons therefore. The
decision of the majority of the panel shall be final and binding on
the parties to the proceeding.
(h) Cost of Arbitration - Unless otherwise allocated by the panel, each
party shall bear the expense of its own arbitrator and shall jointly
and equally bear with the other parties the expense of the umpire
and the arbitration.
11. Notices
All communications provided for hereunder shall be in writing, and if to
the Companies, mailed or delivered to each of the Companies at 100 Summer
Street, Boston, MA, Attention: President, or if to LEXINGTON, mailed or
delivered to LEXINGTON at its office at 100 Summer Street, Boston, MA,
Attention: President, or addressed to either party at any address that
such party may hereafter designate by written notice to the other party.
12. Entire Agreement; Amendment
This Agreement constitutes the entire agreement between the parties with
respect to the provision of administrative services to the Companies by
LEXINGTON and supersedes and extinguishes any warranty, representation or
arrangement previously given or made with respect thereto, other than
those expressly set out herein. The express terms hereof supersede any
course of performance or usage of the trade. This Agreement may not be
amended except in writing signed by each of the parties hereto.
13. No Waiver
Neither the failure nor delay on the part of any party in exercising any
right, remedy, power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right,
remedy, power or privilege preclude any other or further exercise of the
same or of any other right, remedy, power or privilege, nor shall any
waiver of any right or remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver
14
hereunder shall be effective unless it is in writing and is signed by the
party asserted to have granted such waiver.
14. Successors and Assigns
The provisions of this Agreement shall be binding upon and shall inure to
the benefit of and be enforceable by each of the parties hereto. This
Agreement and any rights pursuant hereto shall not be assignable by any
party hereto.
15. Governing Law; Submission to Jurisdiction
This Agreement shall be governed by and construed in accordance with the
laws of Delaware, without reference to the principles of conflicts of law
thereof. If any suit is instituted by any of the parties to enforce any of
the terms or conditions of this Agreement, each of the parties hereby
submits to the exclusive jurisdiction of and venue in the United States
District Court of Delaware or the Delaware Court of Common Pleas or the
Delaware Superior Court, as appropriate.
16. Relationship of the Parties
The Companies, the Company and LEXINGTON are independent of one another.
Nothing in this Agreement shall be deemed to create: (a) a joint venture
or partnership between the parties; (b) a relationship of employer and
employee; (c) a relationship of principal and agent; or (d) any
relationship other than independent parties contracting with each other
solely for the purpose of carrying out the provisions of this Agreement.
17. Counterparts
This Agreement may be executed in any number of counterparts, each of
which shall be an original with the same effect as if the signatures
thereto and hereto were upon the same instrument, and such counterparts
together shall constitute one and the same instrument.
18. Headings
The section headings contained herein are for convenience only and shall
not alter or limit or define the provisions hereof.
19. Severability
In the event that any word, sentence, paragraph, provision, section,
subsection or article of this Agreement is found to be void or voidable,
the remainder of this Agreement shall nevertheless be legal and binding
with the same force and effect as though the void or voidable parts were
deleted.
15
20. Further Assurances
Each of the parties to this Agreement shall, from time to time as
reasonably requested to do so by the other party do, execute, acknowledge
and deliver any and all such other and further acts, assignments,
transfers and any instruments of further assurance, approvals and consents
as are necessary or proper in order to complete, ensure and perfect the
consummation of the transactions contemplated hereby.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in Boston, Massachusetts on the date first written above.
NEWMARKET UNDERWRITERS INSURANCE COMPANY
By: /s/ Richard E. Jodoin
-----------------------
Name: Richard E. Jodoin
Title: President
ALLIED WORLD ASSURANCE COMPANY (U.S.) INC.
By: /s/ Richard E. Jodoin
-----------------------
Name: Richard E. Jodoin
Title: President
LEXINGTON INSURANCE COMPANY
By: /s/ Nicholas E. Anselmo
---------------------------------------------
Name: Nicholas E. Anselmo
Title: Executive Vice President
Dates Referenced Herein and Documents Incorporated by Reference
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