Exhibit 10.71
[LOGO]Ashurst Xxxxxx Xxxxx
Guarantee Agreement
SCPIE HOLDINGS INC.
and
GOSHAWK REINSURANCE LIMITED
2002
THIS AGREEMENT is made on 2002
BETWEEN
(1) SCPIE HOLDINGS INC. whose registered address is 0000 Xxxxxxx Xxxx Xxxx,
Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx, 00000-0000 (the "Guarantor"); and
(2) GOSHAWK REINSURANCE LIMITED whose registered address is 00 Xxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxx XX00 (xxx "Reinsurer").
WHEREAS
(A) SCPIE Indemnity Company, American Healthcare Indemnity Company and
American Healthcare Specialty Insurance Company (collectively the
"Company") (1) and the Reinsurer (2) intend to enter on the date hereof
into a quota share retrocession contract in the form set out in schedule
1 hereto ("Reinsurance Agreement") and certain agreed form agreements
referred to therein and including the Security Fund Agreement and the
Trust Agreement as set out at schedule 2 hereto.
(B) The Guarantor has agreed to guarantee the obligations of the Company
under the Reinsurance Agreement, Security Fund Agreement and Trust
Agreement on and subject to the terms of this agreement.
1. GUARANTEE
1.1 In consideration for the Reinsurer entering into and assuming its
obligations under the Reinsurance Agreement, Security Fund Agreement and
Trust Agreement (together the "Transaction Agreements") the Guarantor
hereby irrevocably and unconditionally guarantees to the Reinsurer as
principal obligor the due and punctual performance and observance by the
Company of all of its obligations under each of the Transaction
Agreements ("this Guarantee"); provided that nothing in this Guarantee
shall oblige the Guarantor to act as an insurer or reinsurer in breach of
the laws of the United States.
1.2 In any action under this Guaranty the guarantor shall have all defences
available to the Company in performance of its obligations under the
Transaction Agreements.
2. CONTINUING OBLIGATION
This Guarantee is to be a continuing obligation which shall remain in
full force and effect until all of the obligations of the Company under
each of the Transaction Agreements shall have been fulfilled or shall
have expired in accordance with the terms of each such agreement and this
Guarantee is to be in addition, and without prejudice to, and shall not
merge with, any other right, remedy, guarantee, indemnity or security
which the Reinsurer may now or hereafter hold in respect of all or any of
the obligations of the Company under the Transaction Agreements.
3. REINSURER'S PROTECTIONS
The liability of the Guarantor under this Guarantee shall not be
affected, impaired or discharged by reason of any act, omission, matter
or thing which but for this provision might
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operate to release or otherwise exonerate the Guarantor from its
obligations hereunder including, without limitation:
(a) the taking, variation, compromise, renewal, release, refusal or
neglect to perfect or enforce any rights, remedies or securities
against the Company or any other person;
(b) any time or indulgence or waiver given to, or composition made with,
the Company or any other person; or
(c) the Company becoming insolvent, going into receivership or
liquidation or having a conservator, liquidator or statutory
successor (or other administrator) appointed.
4. FURTHER PROTECTION
This Guarantee shall continue in full force and effect notwithstanding:
(a) that any purported obligation of the Company or any other person to
the Reinsurer (or any security therefor) becomes wholly or partly
void, invalid or unenforceable for any reason whether or not known
to the Reinsurer or the Guarantor; or
(b) any incapacity or any change in the constitution of, or any
amalgamation or reconstruction of, the Guarantor or the Company or
any other matter whatsoever.
5. PRIMARY OBLIGATIONS
This Guarantee shall constitute the primary obligations of the Guarantor
and the Reinsurer shall not be obliged to make any demand on the Company
before enforcing its rights against the Guarantor under this Guarantee.
The Guarantor therefore agrees that this guarantee provided herein is a
guaranty of payment and performance and not of collection. The Guarantor
waives any right that any resort be had by the Reinsurer to any security,
assets, funds, or property held or actionable against by the Reinsurer as
security for the obligations of the Company, or otherwise, to the
Reinsurer, any other monetary obligations of the Company to the
Reinsurer, or the Reinsurer's rights against any other guarantor or
obligor of the obligations of the Company.
6. WAIVER
No delay or omission of the Reinsurer in exercising any right, power or
privilege under this Guarantee shall impair such right, power or
privilege or be construed as a waiver of such right, power or privilege
nor shall any single or partial exercise of any such right, power or
privilege preclude any further exercise thereof or the exercise of any
other right, power or privilege.
7. INVALIDITY
If at any time any one or more of the provisions of this Guarantee is or
becomes invalid, illegal or unenforceable in any respect under any law,
the validity, legality and enforceability of the remaining provisions
hereof shall not be in any way affected or impaired thereby.
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8. WARRANTIES
Without prejudice to the Guarantor's guarantee hereunder of the
warranties given by the Company to the Reinsurer pursuant to the
Reinsurance Agreement, which guarantee shall be subject to the same
qualifications and limitations to which such warranties are subject in
the Reinsurance Agreement, the Guarantor hereby represents and warrants
to the Reinsurer in the terms of the warranties set out in schedule 3
hereto ("Warranties"). The Guarantor's representations and warranty in
respect of each of the Warranties shall be deemed repeated continually
throughout the term of this agreement. The Guarantor undertakes that it
will disclose forthwith in writing to the Reinsurer any matter which
becomes known to it which is inconsistent with any of the Warranties
given by it hereunder or which is inconsistent with any of the warranties
given by the Company under the Reinsurance Agreement. Without restricting
the rights of the Reinsurer or the ability of the Reinsurer to claim
damages on any basis available to it, but subject to the provisions of
the second paragraph of schedule 3 hereto, if the Guarantor is in breach
of any of the Warranties or any other term of this agreement the
Guarantor shall pay to the Reinsurer on demand as damages the amount
necessary on a full indemnity basis to put the Reinsurer into the
position which would have existed if the said Warranties or other term of
this agreement had not been breached, together with all costs and
expenses incurred by the Reinsurer as a result of such breach.
9. INCORPORATION OF TERMS
The terms of Articles 19 (Notice), 20 (Waiver and Amendment), 21 (No
Partnership), 22 (No Assignment), 24 (Arbitration), 25 (Service of Suit)
and 26 (Mode of Execution) of the Reinsurance Agreement shall be deemed
incorporated into this agreement save that:
(a) for the purposes of Article 19.A (Notice) the address for notice for
the Guarantor shall be:
SCPIE Holdings Inc.
0000 Xxxxxxx Xxxx Xxxx
Xxxxx 000
Xxx Xxxxxxx
Xxxxxxxxxx
00000 - 1712
Fax: (000) 000 0000
Attention: President
(b) for the purposes of the Article 25 (Service of Suit) service of
process shall be duly served upon the Guarantor if delivered
personally or sent by registered post to 0000 Xxxxxxx Xxxx Xxxx,
Xxxxx 000, Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000 (marked for the
attention of the President of SCPIE Holdings Inc.) or to such other
person and address as the Guarantor shall notify the Reinsurer in
writing from time to time.
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10. COUNTERPARTS
This Guarantee may be executed in any number of counterparts, each of
which when so executed and delivered shall constitute an original, but
such counterparts together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this agreement to be executed
by their duly authorised representatives this 18th day of December 2002.
/s/ Xxxxxx X. Xxx, President
---------------------------------
for and on behalf of
SCPIE HOLDINGS INC.
/s/ Xxxxxxxx Xxxx /s/ X. Xxxx
---------------------------------
for and on behalf of
GOSHAWK REINSURANCE LIMITED
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SCHEDULE 1
REINSURANCE AGREEMENT
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SCHEDULE 2
TRUST AGREEMENT AND SECURITY FUND AGREEMENT
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SCHEDULE 3
Any Warranty expressed to be given "to the best of the Guarantor's knowledge and
belief" shall not be qualified in the manner stated unless the Guarantor
establishes it has made all reasonable enquiries of its directors, employees and
professional advisers (including its accountants and actuaries) and relevant
third parties to establish the truth and accuracy of that Warranty.
The Guarantor shall be under no liability in respect of a claim under any of the
Warranties at paragraphs 3, 4, and 5 of this schedule 3 unless and until the
liability of the Guarantor in respect of that claim when aggregated with the
liability of the Guarantor in respect of all other such claims under paragraphs
3, 4, and 5 of this schedule 3 shall exceed US$100,000 (and then the Reinsurer
shall be entitled to recover all and not just the excess).
1. GUARANTOR'S CAPACITY
1.1 Authorisations
The Guarantor has obtained all corporate authorisations and all other
applicable governmental, statutory, regulatory or other consents,
licences, waivers or exemptions required to empower it to enter into and
to perform its obligations under this agreement.
1.2 Proper Execution
The Guarantor's obligations under this agreement are enforceable in
accordance with their terms.
2. INSOLVENCY
2.1 No order has been made, petition presented or resolution passed, or any
other action taken, for the winding up of or for the appointment of a
liquidator, conservator or statutory successor to the Guarantor or in
relation to any part of its business and/or assets and to the best of the
Guarantor's knowledge and belief no such order, petition, resolution or
other action is pending or contemplated. No transfer of assets is being
made by the Guarantor and no obligation is being incurred by it in
connection with the transactions contemplated by this agreement and/or
the Transaction Agreements with the intent to hinder, delay, or defraud
either the present or future creditors of the Guarantor.
2.2 The Guarantor has assets exceedingly its liabilities (as such terms are
defined by Generally Accepted Accounting Principles and statutory
accounting principles applied on a consistent basis) and is not insolvent
as provided by the Uniform Fraudulent Transfer Act.
3. LEGAL COMPLIANCE
The Guarantor is in compliance with all laws, rules and regulations
applicable to the Guarantor and all elements related to its business,
operations and financial condition, including, but not limited to, its
assets, holdings and employees, as the case may be.
4. FINANCIAL CONDITION
The financial statements of the Guarantor accurately and honestly present
the Guarantor's financial condition. Since the date of the most recent
financial statements of the Company, there
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has been no adverse change in the Guarantor's business, assets or
condition (financial or otherwise).
5. LITIGATION
There are no actions, suits or proceedings pending, threatened or
contemplated against or affecting the Guarantor or its assets except for
claims (i) that are disclosed by the Guarantor in any reports filed by
the Guarantor with the United States Securities and Exchange Commission
(which reports at the date of this guarantee agreement contain no details
of current material litigation); or (ii) that do not exceed US$10,000
individually or US$100,000 in aggregate.
6. TAXES
The Guarantor has paid or caused to be paid to the proper authorities
when due all federal, state and local taxes applicable to it. The
Guarantor has filed with the proper authorities when due all federal,
state and local tax returns applicable to it.
7. OTHER AGREEMENTS
The Guarantor is not bound by any letter of intent, exclusivity
agreement, heads of agreement or equivalent agreement relating to the
Contracts (as defined in the Reinsurance Agreement) or the Company.
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