-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LGkP5j3rvz01f3qydShlzHQIGEdggEHUIIfMZmBSOQkHYviF0xbY41Uhj09j8DrC yKu7LkU9KFUIYa069ZTGnw== 0000912057-02-034207.txt : 20020830 0000912057-02-034207.hdr.sgml : 20020830 20020830154613 ACCESSION NUMBER: 0000912057-02-034207 CONFORMED SUBMISSION TYPE: S-1 PUBLIC DOCUMENT COUNT: 21 FILED AS OF DATE: 20020830 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PLATINUM UNDERWRITERS FINANCE INC CENTRAL INDEX KEY: 0001183236 IRS NUMBER: 810566888 STATE OF INCORPORATION: DE FILING VALUES: FORM TYPE: S-1 SEC ACT: 1933 Act SEC FILE NUMBER: 333-99019-01 FILM NUMBER: 02754309 BUSINESS ADDRESS: STREET 1: 195 BROADWAY, 25TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10007 BUSINESS PHONE: 2122389288 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PLATINUM UNDERWRITERS HOLDINGS LTD CENTRAL INDEX KEY: 0001171500 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 000000000 STATE OF INCORPORATION: D0 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-1 SEC ACT: 1933 Act SEC FILE NUMBER: 333-99019 FILM NUMBER: 02754308 BUSINESS ADDRESS: STREET 1: 2 CHURCH STREET CITY: BERMUDA STATE: D0 ZIP: HM 11 BUSINESS PHONE: 4412951422 MAIL ADDRESS: STREET 1: 2 CHURCH STREET CITY: BERMUDA STATE: D0 ZIP: HM 11 S-1 1 a2088388zs-1.htm FORM S-1
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As filed with the Securities and Exchange Commission on August 30, 2002

Registration No. 333-

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

PLATINUM UNDERWRITERS HOLDINGS, LTD.		PLATINUM UNDERWRITERS FINANCE, INC.
(Exact name of registrants as specified in their charters)
Bermuda (State or other jurisdiction of incorporation or organization)		Delaware (State or other jurisdiction of incorporation or organization)
6719 (Primary standard industrial classification code number)		6719 (Primary standard industrial classification code number)
Not Applicable (I.R.S. employer identification number)		81-0566888 (I.R.S. employer identification number)

Clarendon House
2 Church Street
Hamilton HM 11
Bermuda
(441) 295-5950

195 Broadway
28th Floor
New York, New York 10007
(212) 238-9200

(Addresses, including zip code, and telephone numbers, including area code, of registrants' principal executive offices)

CT Corporation System
1633 Broadway, 30th Floor
New York, New York 10019
(800) 624-0909
(Name, address, including zip code, and telephone number, including area code, of registrants' agent for service)

Copies to:

Andrew S. Rowen, Esq.
Donald R. Crawshaw, Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
(212) 558-4000

Lois Herzeca, Esq.
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
(212) 859-8000

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 of the Securities Act of 1933, check the following box. / /

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. / /

If the delivery of the prospectus is expected to be made pursuant to Rule 434 under the Securities Act, check the following box. / /

CALCULATION OF REGISTRATION FEE

Title of Each Class of Securities to Be Registered	Amount to be Registered	Proposed Maximum Offering Price per Unit	Proposed Maximum Aggregate Offering Price(1)	Amount of Registration Fee


Adjustable Conversion-Rate Equity Security Units of Platinum Underwriters Holdings, Ltd.	5,750,000	$25	$143,750,000	$26,450

Senior Notes of Platinum Underwriters Finance, Inc.(2)	—	$—	$—	$—

Common Shares of Platinum Underwriters Holdings, Ltd. ($.01 par value)(3)	—	$—	$—	$—

Stock Purchase Contracts of Platinum Underwriters Holdings, Ltd.(4)	5,750,000	$—	$—	$—

Guarantee(5)	—	$—	$—	$—

(1): Exclusive of accrued interest and accumulated contract fee payments, if any.
(2): The Senior Notes are offered as a component of the Adjustable Conversion-Rate Equity Security Units for no additional consideration.
(3): Common Shares of Platinum Underwriters Holdings, Ltd. may be issued to the holders of Adjustable Conversion-Rate Equity Security Units upon settlement or termination of the Stock Purchase Contracts for a purchase price of $25 per unit. The actual number of Common Shares to be issued will not be determined until the date of settlement or termination of the related Stock Purchase Contract.
(4): The Stock Purchase Contracts are offered as a component of the Adjustable Conversion-Rate Equity Security Units for no additional consideration.
(5): The Guarantee of Platinum Underwriters Holdings, Ltd. is offered for no additional consideration.

The registrants hereby amend this registration statement on such date or dates as may be necessary to delay its effective date until the registrants shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, or until this registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

Subject to Completion. Dated August 30, 2002.

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

5,000,000 Units

Platinum Underwriters Holdings, Ltd.

% Adjustable Conversion-Rate Equity Security Units

This is an offering of Adjustable Conversion-Rate Equity Security Units of Platinum Underwriters Holdings, Ltd.

Each equity security unit has a stated amount of $25 and will initially consist of (a) a contract pursuant to which you agree to purchase, for $25, Common Shares of Platinum Holdings on , 2005 and (b) a 1/40, or 2.5%, ownership interest in a senior note of its subsidiary, Platinum Underwriters Finance, Inc., with a principal amount of $1,000. The ownership interest in the senior note will initially be held as a component of your unit and be pledged to secure your obligation to purchase Common Shares of Platinum Holdings under the related purchase contract. The senior notes will be guaranteed by Platinum Holdings on a senior, unsecured basis.

Platinum Holdings will make quarterly contract adjustment payments to you under the purchase contract at the annual rate of % of the stated amount of $25 per purchase contract. In addition, Platinum Finance will make quarterly interest payments on the senior notes at the initial annual rate of %. Platinum Holdings has the right to defer the contract adjustment payments on the purchase contracts, but Platinum Finance does not have the right to defer the interest payments on the senior notes. The interest rate on the senior notes will be reset, and the senior notes remarketed. The senior notes are unsecured and rank equally with all of Platinum Finance's other unsecured senior indebtedness. The units will be sold initially by the underwriters in a minimum number of 40 units.

Prior to this offering and the concurrent initial public offering of Common Shares of Platinum Holdings, there has been no public market for the units or Platinum Holdings' Common Shares.

In addition to offering these units, Platinum Holdings is concurrently offering 34,000,000 of its Common Shares, plus up to an additional 5,100,000 Common Shares if the underwriters for that offering exercise their option to purchase additional Common Shares. The completion of this offering of equity security units is subject to the completion of the initial public offering of Common Shares of Platinum Holdings.

Platinum Holdings has applied to list the normal units and the Common Shares that will be issued in the concurrent initial public offering on the New York Stock Exchange under the symbols "PTP Pr M" and "PTP", respectively.

See "Risk Factors" beginning on page 30 to read about certain factors you should consider before buying units.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.

	Per Unit	Total
Initial public offering price	$	$
Underwriting discount	$	$
Proceeds, before expenses, to Platinum Finance	$	$

The initial public offering price set forth above does not include accumulated contract adjustment payments and accrued interest, if any. Contract adjustment payments on the purchase contracts and interest on the senior notes will accrue from the date of original issuance of the units, expected to be , 2002.

To the extent that the underwriters sell more than 5,000,000 units, within 13 days from the date of this prospectus, the underwriters have the option to purchase up to an additional 750,000 units from Platinum Holdings at the initial public offering price less the underwriting discount.

The underwriters expect to deliver the units against payment in New York, New York on , 2002.

Goldman, Sachs & Co.

Prospectus dated , 2002.

PROSPECTUS SUMMARY

Platinum Underwriters Holdings, Ltd. is a newly formed company that will conduct its business through three operating subsidiaries, Platinum Underwriters Reinsurance, Inc. ("Platinum US"), Platinum Re (UK) Limited ("Platinum UK") and Platinum Underwriters Bermuda, Ltd. ("Platinum Bermuda"). Platinum UK and Platinum Bermuda are newly formed companies, while Platinum US has been in existence since 1995 and is an inactive, wholly owned subsidiary of The St. Paul Companies, Inc. Platinum UK is, and upon completion of this offering, Platinum US will be, owned through Platinum Regency Holdings ("Platinum Ireland"), a newly formed and wholly owned intermediate Irish holding subsidiary of Platinum Underwriters Holdings, Ltd. Platinum US will be owned directly by Platinum Underwriters Finance, Inc. ("Platinum Finance"), a newly formed Delaware corporation, which, upon completion of this offering, will be a wholly owned subsidiary of Platinum Ireland.

The "Company", "Platinum", "we", "us" and "our" refer to Platinum Underwriters Holdings, Ltd.'s consolidated operations, including Platinum US, unless the context otherwise indicates. "Platinum Holdings" refers solely to Platinum Underwriters Holdings, Ltd. Concurrent with the completion of this offering, St. Paul will contribute to Platinum between $ million and $ million in cash, which we refer to as the "Cash Contribution." The St. Paul Companies and its subsidiaries will also contribute to Platinum substantially all of their continuing reinsurance business and related assets, including all of the outstanding capital stock of Platinum US, referred to herein as the "Transferred Business". Reinsurance is an arrangement in which a reinsurance company indemnifies an insurer or other reinsurer, which is referred to as a "ceding company" or "cedent", against all or a portion of the insurance or reinsurance risks underwritten by the ceding company under one or more policies. "St. Paul" refers to The St. Paul Companies, Inc., which is sponsoring our formation, and, unless the context otherwise requires, its subsidiaries. "St. Paul Re" refers to the reinsurance segment of St. Paul prior to this offering, which includes the continuing business and related assets being transferred to Platinum upon completion of this offering as well as the reinsurance business that will remain with St. Paul after this offering and not be renewed and will thereafter expire when claims are ultimately resolved, which is referred to as the "run-off."

We intend to commence our property and casualty reinsurance business operations, whereby we indemnify insurers and other reinsurers against all or a portion of their insurance or reinsurance risks for property loss and related damage and negligence resulting in bodily injury or property damage, upon completion of this offering of equity security units, which we refer to as the "ESU Public Offering." Concurrently with this offering, we will offer 34,000,000 Common Shares by means of a separate prospectus, plus up to an additional 5,100,000 Common Shares if the underwriters' option to purchase additional Common Shares is exercised in full. We refer to this offering as the "Equity Public Offering." The closing of each offering is conditioned on the concurrent closing of the other offering.

Concurrently with the completion of the Equity Public Offering, St. Paul will make the Cash Contribution and contribute the Transferred Business to us in exchange for our issuance to St. Paul, on a private placement basis, of Common Shares and an option, referred to as the "St. Paul Option", which will entitle St. Paul to buy from us up to additional Common Shares under the circumstances and terms described in this prospectus. St. Paul will own % of Platinum Holdings' outstanding Common Shares following the Equity Public Offering, which Common Shares will be limited to 9.9% of the voting power of the outstanding Common Shares. If the underwriters exercise their option to purchase additional Common Shares in the Equity Public Offering, we will issue to St. Paul as many additional Common Shares as are required in order for it to retain its % interest (a maximum of additional Common Shares). In this prospectus, we refer to our

issuance to St. Paul of the % interest in our Common Shares and the St. Paul Option in exchange for the Cash Contribution and the Transferred Business as the "St. Paul Investment."

We will have a capitalization of between approximately $ million (assuming an initial public offering price of $22.50 per Common Share, a Cash Contribution of $ million and no exercise of the underwriters' options to purchase additional Common Shares or additional equity security units) and approximately $ million (assuming an initial public offering price of $23.50 per Common Share, a Cash Contribution of $ million and full exercise of the underwriters' options to purchase additional Common Shares and additional equity security units), upon completion of the Equity Public Offering, the ESU Offering and the St. Paul Investment. The determination of the amount of the Cash Contribution will be made when the terms of the Equity Public Offering are finally determined. The pro forma net tangible book value per Common Share following the Equity Public Offering, the ESU Offering and St. Paul Investment will be $ per share based on an assumed initial public offering price of $23 per Common Share (the mid-point of the range at which Platinum Holdings proposes to offer the Common Shares) and a Cash Contribution of $ million (the midpoint of the $ million to $ million range of the Cash Contribution), assuming no exercise of the underwriters' options to purchase additional Common Shares or additional equity security units.

In this prospectus, amounts are expressed in U.S. dollars and the financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), except as otherwise indicated.

The Company

General

Our objective is to provide property and casualty reinsurance coverages to a diverse clientele of insurers and select reinsurers on a worldwide basis. We will operate principally by using reinsurance brokers to market our products and principally as a lead reinsurer on treaty reinsurance business. In treaty reinsurance, a reinsurer accepts a specified portion of a category of risks insured by a ceding insurer or reinsurer. A substantial majority of our business will be written as excess-of-loss reinsurance, which indemnifies the reinsured against all or a specified portion of loss above a specified amount. We intend to organize our worldwide reinsurance business around three operating segments:

•: Global Property and Marine. The Global Property and Marine operating segment will include principally property reinsurance coverages and marine reinsurance coverages. Marine reinsurance coverages include all types of marine vessels and related warehouses and liabilities. We intend to focus our underwriting activities primarily on catastrophe excess-of-loss and per risk excess-of-loss contracts. Catastrophes are events such as hurricanes and earthquakes that produce pre-tax losses before reinsurance which, in our definition, are in excess of $10 million to us or $1 billion to the insurance industry, and per risk excess-of-loss contracts cover losses in excess of a specified level on a single risk, rather than aggregate losses for all covered risks. We intend to write other types of property reinsurance as well, including selected property proportional reinsurance, where we will share a proportional part of the original premiums and losses of the reinsured. This segment generated $315 million, or 22.8%, of Platinum's 2001 pro forma net premiums written, which are gross written premiums less premiums ceded to reinsurers.
•: Global Casualty. The Global Casualty operating segment will include principally general and automobile liability, professional liability, workers' compensation, accident and health

coverages and casualty clash (casualty clash covers losses arising from a single set of circumstances covered by more than one cedent's insurance policy or multiple claimants on one policy). We intend to focus our underwriting activities primarily on excess-of-loss reinsurance coverages. This segment generated $592 million, or 42.8%, of Platinum's 2001 pro forma net premiums written.

•: Finite Risk. The Finite Risk operating segment, which writes policies under which our aggregate risk and return are generally capped at a finite amount, will include principally non-traditional reinsurance treaties, including multi-year excess-of-loss (in which the cedent funds the agreed level of loss activity over a multi-year period, and the reinsurer charges an additional amount to provide a profit margin and to cover its costs and the risk that losses are worse than the agreed level), aggregate stop loss (which provides protection from losses arising from a wide range of circumstances in excess of an aggregate specified level), finite quota share (in which the reinsurer's losses and profit potential are capped at specified amounts), loss portfolio transfer (which typically transfers to the reinsurer all liabilities for incurred losses, subject to an aggregate loss limit specified in the contract), and adverse loss development contracts (which typically provide reinsurance coverage for losses in excess of the carried loss reserves of the ceding company at the transaction date). We intend to provide clients, either directly or through brokers, with customized solutions for their risk management and other financial management needs. We intend to focus our finite risk underwriting activities primarily on multi-year excess-of-loss and aggregate stop loss reinsurance treaties. Coverage classes within these products will primarily include property, casualty and marine exposures. This segment generated $475 million, or 34.4%, of Platinum's 2001 pro forma net premiums written.

In addition, we may write other property and casualty reinsurance on an opportunistic basis. For a discussion of the basis on which pro forma net premiums written were determined, see
"—Selected Pro Forma Financial Information and Operating Data" below.

Background and the Transferred Business

St. Paul and its subsidiaries constitute one of the oldest insurance organizations in the United States, dating back to 1853. Through its division St. Paul Re, St. Paul has been engaged in the reinsurance business since 1983. In December of 2001, in an effort to enhance the profitability of its reinsurance business, St. Paul decided to narrow the product focus of its reinsurance operations and to exit certain lines of that business. As part of this effort, St. Paul Re reduced its anticipated 2002 exposure and expenses by exiting unprofitable lines of business and reducing the number of reinsurance branch offices outside the United States. The narrowing of reinsurance product lines included exiting aviation, bond and credit reinsurance coverages, as well as certain financial risk and capital markets lines. International branch office closings included Munich, Brussels, Hong Kong, Sydney and Singapore. In addition to curtailing various reinsurance operations, St. Paul's management decided that its reinsurance business and its primary insurance business should ideally operate as separate entities because of their different risk profiles and business characteristics.

Accordingly, St. Paul determined to sponsor the formation of Platinum Holdings and its subsidiaries. Contingent upon the completion of the Equity Public Offering, St. Paul will contribute to us the Cash Contribution and the Transferred Business through the arrangements described below:

•: Cash Contribution. At the completion of the Equity Public Offering, St. Paul will make the Cash Contribution in the amount of between $ million and $ million. The determination

of the amount of the Cash Contribution will be made when the terms of the Equity Public Offering are finally determined. An assumed Cash Contribution of $ million will result in a pro forma net tangible book value per Common Share of $ following the Equity Public Offering, the ESU Offering and the St. Paul Investment based on an assumed initial public offering price of $23 per Common Share (the midpoint of the range at which Platinum Holdings proposes to offer the Common Shares) and assuming no exercise of the underwriters' options to purchase additional Common Shares or additional equity security units. Cash Contributions of $ million and $ million will result in net tangible book values of $ and $ per Common Share, respectively, assuming an initial public offering price of $22.50 and $23.50, respectively, and assuming no exercise of the underwriters' options to purchase additional Common Shares or additional equity security units.

•

Renewal Opportunities and Commitments. We will be acquiring from St. Paul Re its existing customer lists and the right to seek to renew substantially all of St. Paul Re's continuing reinsurance contracts. We also will assume commitments, if any, of St. Paul Re to offer reinsurance coverages in the future.

•

Assumed Reinsurance Contracts. Through 100% quota share retrocession agreements (the "Quota Share Retrocession Agreements"), we will reinsure substantially all of the reinsurance contracts St. Paul Re entered into on or after January 1, 2002, which we refer to as the "Assumed Reinsurance Contracts". St. Paul Re will retain all of its reinsurance exposure not being transferred to us and will administer the associated run-off. Consequently, we will not assume any underwriting exposure with respect to reinsurance contracts entered into by St. Paul prior to January 1, 2002, except as noted below with respect to finite reinsurance. We will receive as consideration cash in an amount equal to the aggregate of all loss, allocated loss adjustment expense (which is the expense incurred in settling claims), ceding commission reserves (which are commissions payable to ceding insurers) and unearned premium reserves (which are reserves equal to the difference between premiums written and premiums earned) subject to agreed upon adjustments, net of ceding commissions under the Quota Share Retrocession Agreements as of the transfer date (which is 12:01 a.m., on the later of the business day immediately following the date of the completion of the Equity Public Offering or October 1, 2002). Underwriting gain or loss with respect to the Assumed Reinsurance Contracts for the period from January 1, 2002 to the transfer date will be retained by St. Paul.

•: The terms of the Quota Share Retrocession Agreements provide, with limited exceptions, that retrocessional reinsurance, which is reinsurance obtained by a reinsurer to insure against all or a portion of its reinsurance written, purchased by St. Paul Re shall be for our expense and shall inure to our benefit in respect of the Assumed Reinsurance Contracts, providing us with remaining retrocessional reinsurance coverage for such contracts through 2002 or the earlier termination or expiration of the various retrocession agreements. We will bear all the risk associated with non-payment by third party retrocessionaires under such retrocessional reinsurance. All the Quota Share Retrocession Agreements will take effect as of 12:01 a.m. on the later of the business day immediately following the date of the completion of the Equity Public Offering or October 1, 2002. Accordingly, while St. Paul will be contractually committed to effect the transfer, the effective time of the transfer of the Assumed Reinsurance Contracts will occur after the sale to investors of Common Shares in the Equity Public Offering.
•: In the case of business written in the United States, we will have the right to underwrite specified reinsurance business on behalf of St. Paul for a period of one year following the completion of the Equity Public Offering, and we will reinsure such business

pursuant to the Quota Share Retrocession Agreements. In the case of the U.K. business, St. Paul will, if necessary, continue to write such business through the agency of Platinum UK until the earlier of December 31, 2002 or Platinum UK obtaining a license, and we will reinsure such business pursuant to the Quota Share Retrocession Agreements. This will allow us to participate in reinsurance business which is bound after the completion of the Equity Public Offering without any delay occasioned by the start-up of our operations, including the lack of required licenses, and facilitate the transition of St. Paul Re's business to us.

•: For a period of three years following the completion of the Equity Public Offering, we will underwrite on behalf of St. Paul, with the consent of St. Paul, renewals of in-force contracts of finite reinsurance. St. Paul will retrocede to us 100% of the unpaid and future losses under currently in-force contracts, and we will have the option to reinsure losses under certain renewed contracts and will be required to offer to reinsure losses under other renewed contracts, for a fair market retrocession premium pursuant to the Quota Share Retrocession Agreements. Under the Quota Share Retrocession Agreements, a portion of future premiums will be applied to settle balances related to prior year experience for the benefit of St. Paul. St. Paul will have an option to renew this arrangement with us for a subsequent period of two years. In the United Kingdom, this arrangement will be limited to finite treaties which St. Paul Re has entered into with a small number of identified cedents and any further finite treaties which may be entered into on behalf of St. Paul Re UK prior to December 31, 2002.

•: Related Assets. We will be acquiring from St. Paul tangible and intangible assets relating to the continuing businesses being transferred to us, including furniture and equipment, systems and software, assignments of leases, licenses and other assets, as well as all of the outstanding capital stock of Platinum US.
•: Employees. Upon or following the completion of the Equity Public Offering, we expect to employ approximately 150 employees previously employed by St. Paul Re.

St. Paul has agreed with us that, subject to certain exceptions, for a period of two years following the completion of the Equity Public Offering, it will not offer reinsurance of the type covered by the Assumed Reinsurance Contracts and for which we have acquired renewal rights or hire certain of our employees.

For a discussion of the share ownership interests St. Paul will obtain for its contribution of the Transferred Business, see "St. Paul's Share Ownership" below.

Our Organization

The following chart summarizes our corporate structure upon completion of the transactions contemplated by this prospectus. Our operating business will be conducted by Platinum US, Platinum UK and Platinum Bermuda. Platinum Bermuda expects to reinsure up to approximately 70% of the reinsurance written by Platinum US and a portion of the reinsurance written by Platinum UK after the Equity Public Offering, excluding business subject to the Quota Share Retrocession Agreements and except that St. Paul will continue to write reinsurance in the United Kingdom and reinsure it 100% to Platinum US until December 31, 2002 or until Platinum UK is licensed, whichever is earlier. For a discussion of potential future limits on the portion of the reinsurance written by Platinum UK after the completion of the Equity Public Offering which can be reinsured to Platinum Bermuda, see "Business—Our Business—Regulation—U.K. Regulation—Proposed Limits on Concentration of Reinsurance Exposures."

Management and Directors

We have assembled a senior management team of experienced insurance industry professionals, whose backgrounds include underwriting and marketing property and casualty reinsurance worldwide. Steven H. Newman, who is the Chairman of Platinum Holdings' Board of Directors, Jerome T. Fadden, who is Platinum Holdings' President and Chief Executive Officer, Michael D. Price, who will be Chief Underwriting Officer of Platinum US, William A. Robbie, who will be Chief Financial Officer of Platinum Holdings, Michael E. Lombardozzi, who will be General Counsel of Platinum Holdings, and Neal J. Schmidt, who will be Chief Actuary of Platinum US, in each case upon completion of the Equity Public Offering, have extensive experience in the global property and casualty reinsurance industry. The new senior management team intends to initiate a number of actions to improve the underwriting performance and profitability of the Company. These actions are described more fully under "Platinum's Strategy" below.

Our Board of Directors consists of seven members: Mr. Newman; Mr. Fadden; Jay S. Fishman, Chairman of the Board of Directors and Chief Executive Officer of The St. Paul Companies, Inc.; H. Furlong Baldwin, Chairman of Mercantile Bankshares Corporation; Jonathan F. Bank, Senior Vice President of Tawa Associates Ltd.; Dan R. Carmichael, President and Chief Executive Officer of Ohio Casualty Corporation; and Peter T. Pruitt, retired Chairman of Willis Re Inc.

Our Competitive Strengths

We believe that with our experienced management team, unencumbered capital base and the long-term potential of the business and assets of St. Paul Re obtained from St. Paul, we will have the benefits of being both an established business and a new market entrant. As a well-capitalized, focused reinsurer, we believe we will be able to expand our relationships with clients of St. Paul Re

as well as new clients to a greater extent than if our operations were part of a multi-line insurer such as St. Paul.

We intend to focus our initial marketing efforts on those brokers and their clients with which St. Paul Re has established business relationships. We feel that the existing portfolio of business generated by St. Paul Re represents a valuable asset given the renewal nature of the reinsurance industry and the importance of continuity of relationships. We believe that the market perceptions and reputation established by St. Paul Re with respect to service and responsiveness will benefit us in light of the transfer of personnel and underwriting activities from St. Paul Re to us.

Platinum's Strategy

Our goal is to achieve superior long-term returns for our shareholders, while establishing Platinum as a conservative risk manager and market leader in certain classes of property and casualty reinsurance.

•

Build our future on a strong foundation. We will commence operations with the benefit of the Transferred Business:

•: Renewal Rights and Assumed Reinsurance Contracts. Our initial portfolio will contain a diversity of business that would normally take many years to develop. We will be acquiring St. Paul Re's existing customer lists and the right to seek to renew its continuing in-force reinsurance contracts, which produced 2001 pro forma net premiums written of approximately $1.4 billion.
•: Fully operational infrastructure. We will select experienced employees from the skilled St. Paul Re employee base. These employees have broker and ceding company relationships and underwriting pricing and claims experience that will allow us to be fully staffed and operational in key underwriting and support functions.

•

Add new executive leadership to existing talent. In order to take full advantage of the historical strengths of St. Paul Re, we have significantly strengthened our senior management team with the addition of Mr. Newman and Mr. Fadden. Mr. Newman and Mr. Fadden have extensive experience in leading publicly traded reinsurance companies and intend to implement a number of initiatives to create a more focused and more profitable reinsurance business.

•: Focus on profitability, not market share. Our new management team intends to pursue a strategy that emphasizes underwriting discipline and profitability over market share. Key elements of this strategy will be prudent risk selection, appropriate pricing through strict underwriting discipline and increasing our writings of lines of business, which we believe will contribute to our long-term profitability.
•: Exercise disciplined underwriting and risk management. We intend to exercise risk management discipline by (i) maintaining a diverse spread of risk in our book of business across products and geographic zones, (ii) focusing on excess-of-loss contracts as opposed to proportional contracts, and (iii) reducing our aggregate catastrophe exposure.
•: Operate a lean and expense-focused underwriting business. We believe a lean underwriting culture will support our focus on profitability and allow us to be more responsive to changing market conditions. We intend to keep our headcount low and maintain a limited number of offices. In addition, we expect to originate most of our business from brokers, rather than directly from ceding companies or cedents, which are

insurance companies seeking reinsurance coverages, which we believe will keep our expenses low.

•: Grow our business by leveraging our global platform. We intend to operate in all three of the world's leading reinsurance markets with offices in New York, London and Bermuda. St. Paul Re has conducted authorized reinsurance activities in the United States and London for many years. Our new Bermuda subsidiary will provide us with both a new market in which to write reinsurance and the flexibility to provide reinsurance products that are best facilitated by an offshore company.
•: Operate from a position of financial strength. As a newly formed company, our initial capital position is unencumbered by any development of loss reserves for business written prior to January 1, 2002, which are reserves established to reflect estimated cost of loss payments that ultimately will be required to be paid. We expect to have between approximately $ million and $ million of equity capital following the Equity Public Offering, the ESU Offering and the St. Paul Investment to support our anticipated underwriting activities. Our investment strategy will focus on security and stability in our investment portfolio by maintaining a diversified portfolio that will consist primarily of investment grade fixed-income securities.

Recent Industry Trends

After an extended period of increased competition and eroding premiums, the reinsurance markets began experiencing improvements in rates, terms and conditions in the first quarter of 2000. These improvements continued in 2001 and were accelerated by the terrorist attack of September 11, 2001, which resulted in a range of estimated property and casualty insurance losses to the insurance industry of between $30 billion and $35 billion, the largest estimated catastrophe losses ever experienced by the industry. We believe property and other reinsurance premiums have often risen in the aftermath of significant catastrophe losses. As claims are reserved, industry surplus is depleted and the industry's capacity to write new business diminishes. At the same time, there appears to be heightened awareness that commercial properties are exposed to a variety of risks. We believe that market trends similar to those that have occurred in past cycles are developing in the current environment. With respect to January, April and July 2002 renewals, St. Paul Re experienced substantial rate increases, generally ranging from 20% to 50% depending on the line of business. We believe that the current imbalance between the increased demand for property-related insurance and reinsurance and the reduced supply of this type of coverage will continue at least for the immediate future.

St. Paul's Share Ownership

St. Paul has determined that the efficiency, profitability and competitive position of its reinsurance operations can be maximized by separating them from St. Paul's primary insurance operations. Despite the separation of the two businesses, St. Paul will continue to participate in future financial results of the reinsurance business through its ownership of Common Shares as a result of the St. Paul Investment.

In return for the Cash Contribution and the Transferred Business, we will issue Common Shares to St. Paul (so that St. Paul will own % of our outstanding Common Shares following the Equity Public Offering and the St. Paul Investment) and the St. Paul Option. St. Paul's Common Shares will be limited to 9.9% of the voting power of the outstanding Common Shares. If the underwriters exercise their option to purchase additional Common Shares in the Equity Public Offering, St. Paul will be issued additional Common Shares in order for it to retain its % interest.

In addition, we will grant St. Paul the St. Paul Option, which is a ten-year option to purchase up to Common Shares at % of the initial public offering price for the Equity Public Offering. Exercise of such option by St. Paul in full immediately after completion of the Equity Public Offering would increase its percentage interest in our Common Shares to approximately %, assuming no exercise of the underwriters' option to purchase additional Common Shares. St. Paul has agreed with us that, prior to any exercise of the St. Paul Option, it will, if necessary, dispose of a sufficient number of Common Shares so that, immediately after exercise of the St. Paul Option, St. Paul would not be a "United States 25% Shareholder" as defined under "Description of Platinum Holdings' Common Shares—Restrictions on Transfers." St. Paul has informed us that it currently intends to continue its share ownership in Platinum Holdings for the foreseeable future.

Principal Executive Offices

Platinum Holdings was organized on April 19, 2002 as a company limited by shares under Bermuda law. Platinum Holdings' principal executive offices are located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. Its telephone number is (441) 295-5950.

The ESU Offering

What are the equity security units?

Each equity security unit, which we refer to as a "unit", will initially consist of and represent:

(1) a purchase contract pursuant to which:

•: you will agree to purchase, and Platinum Holdings will agree to sell, for $25, Common Shares on , 2005 (the "share purchase date"), the number of which will be determined based on the average trading price of the Common Shares for a period preceding that date, calculated in the manner described below; and
•: Platinum Holdings will pay you contract adjustment payments on a quarterly basis at the annual rate of % of the stated amount of $25, subject to its right to defer such payments, as specified below; and

(2) a 1/40, or 2.5%, ownership interest in a senior note due , 2007 of Platinum Finance, an indirect, wholly owned subsidiary of Platinum Holdings, with a principal amount of $1,000, on which Platinum Finance will pay interest at the initial annual rate of % until a successful remarketing of the senior notes and at the reset rate (as described below) thereafter. On and prior to the share purchase date, interest will be payable quarterly in arrears and, thereafter, semi-annually in arrears. The senior notes will be guaranteed by Platinum Holdings on a senior, unsecured basis.

The ownership interests in the senior notes that are a component of your units will be owned by you, but will initially be pledged to the collateral agent for the benefit of Platinum Holdings to secure your obligations under the related purchase contracts. We refer in this prospectus to the purchase contracts, together with the pledged ownership interest in the senior notes (or, after a successful remarketing or a tax event redemption described below, the specified pledged treasury securities) as "normal units."

Each holder of normal units may elect at any time on or before the second business day prior to the share purchase date (subject to certain exceptions) to withdraw from the pledge the pledged ownership interest in the senior notes (or, after a successful remarketing or tax event redemption described below, the pledged treasury securities) underlying the normal units, thereby creating "stripped units." To create stripped units, the holder must substitute, as pledged securities, specifically identified treasury securities that will pay $25 (the amount due under the purchase contract) per unit on the share purchase date, and the pledged ownership interest in the senior notes or treasury securities will be released from the pledge and delivered to the holder. Holders of stripped units may recreate normal units by re-substituting the senior notes (or, after a successful remarketing or a tax event redemption, the applicable treasury securities) for the treasury securities underlying the stripped units.

If the senior notes are successfully remarketed or a tax event redemption occurs, in each case as described in this prospectus, the applicable ownership interest in the treasury securities will replace the ownership interest in a senior note as a component of each unit and will be pledged to the collateral agent for the benefit of Platinum Holdings to secure your obligations under the purchase contract.

What are the purchase contracts?

The purchase contract underlying a unit obligates you to purchase, and Platinum Holdings to sell, for $25, on the share purchase date, a number of newly issued Common Shares equal to the

settlement rate described below. The settlement rate will be based on the average trading price of the Common Shares for a period preceding that date, calculated in the manner described below.

What payments will be made to holders of the units and the senior notes?

If you hold normal units, Platinum Holdings will pay you quarterly contract adjustment payments on the underlying purchase contracts at the annual rate of % of the $25 stated amount through and including the share purchase date and Platinum Finance will pay you quarterly interest payments on the ownership interests in senior notes that are pledged in respect of your normal units at the initial annual rate of % through and including , 2005, the last quarterly payment date before the share purchase date. On the share purchase date, you will also receive a cash payment in respect of each of your normal units, equal to 1/40, or 2.5%, of the quarterly interest payment payable on the $1,000 principal amount of a senior note at the initial annual rate of %.

If you hold stripped units and do not separately hold senior notes, you will receive only the quarterly contract adjustment payments payable by Platinum Holdings at the annual rate of % of the $25 stated amount.

The contract adjustment payments on normal and stripped units are subject to Platinum Holdings' deferral right as described below. Platinum Finance is not entitled to defer interest payments on any senior notes, whether held as part of, or separately from, the units.

If you hold senior notes separately from the units and do not separately hold stripped units, you will receive only the interest payable on the senior notes. The senior notes, whether held separately from or as part of the units, will pay interest at the initial annual rate of % until the settlement date of a successful remarketing, as described below. If the senior notes are successfully remarketed, the rate of interest payable from the settlement date of the successful remarketing until their maturity on , 2007 will be the reset rate, which will be a rate established by the remarketing agent that meets the requirements described in this prospectus. If the remarketing agent cannot establish a reset rate on a remarketing date, the remarketing agent will not reset the interest rate on the senior notes and the interest rate will continue to be the initial annual rate of %, until the remarketing agent, on a later remarketing date prior to the share purchase date, can establish a reset rate meeting the requirements described in this prospectus.

What are the payment dates?

Subject to Platinum Holdings' deferral right in respect of the contract adjustment payments described below, contract adjustment payments will be made quarterly in arrears on each , , and , commencing on 2002 and ending on the share purchase date. Interest payments on the senior notes initially will be made quarterly in arrears on each , , and , commencing on 2002, and, following the share purchase date, semi-annually in arrears on each and until maturity on , 2007.

When can Platinum Holdings and Platinum Finance defer payments?

Platinum Holdings can defer payment of all or part of the contract adjustment payments on the purchase contracts until no later than the share purchase date. Platinum Holdings will accrue additional contract adjustment payments on any deferred installments of contract adjustment payments at a rate of % per year until paid, compounded quarterly, to but excluding the share purchase date, unless your purchase contract has been earlier settled or terminated.

Platinum Finance is not entitled to defer interest payments on the senior notes.

What is the reset rate?

In order to facilitate the remarketing of the senior notes at the remarketing price described below, the remarketing agent will reset the rate of interest on the senior notes, effective from the settlement date of a successful remarketing until their maturity on , 2007. The reset rate will be the rate sufficient to cause the then current market value of each outstanding senior note to be equal to at least 100.25% of the remarketing value described below. Resetting the interest rate on the senior notes at this rate is designed to enable the remarketing agent to remarket the senior notes in the remarketing and purchase the necessary treasury securities, the proceeds of which will be applied in settlement of the purchase contracts and to provide funds for the cash payment on the normal units due on the share purchase date.

The reset rate will be determined by the remarketing agent on the third business day (as defined below) prior to , 2005, the last quarterly payment date before the share purchase date. If the remarketing agent cannot establish a reset rate meeting these requirements on the remarketing date and, as a result, the senior notes cannot be remarketed as described below, the interest rate will not be reset and will continue to be the initial rate of the senior notes. However, the remarketing agent may thereafter attempt to establish a reset rate meeting these requirements, and the remarketing agent may attempt to remarket the senior notes, on the subsequent dates described below. If a reset rate cannot be established on a given date, the remarketing will not occur on that date. If the remarketing agent fails to remarket the senior notes that form part of normal units by the end of the third business day immediately preceding the share purchase date, Platinum Holdings will exercise its rights as a secured party with respect to such senior notes and, subject to applicable law, may retain the pledged senior notes or sell them in one or more public or private sales to satisfy in full such holder's obligation to purchase Common Shares under the related purchase contracts.

The reset of the interest rate on the senior notes in connection with a successful remarketing will not change the amount of the cash payment due to holders of normal units on the share purchase date, which, as described above, will be an amount per normal unit equal to 1/40, or 2.5%, of the quarterly interest payment payable on $1,000 principal amount of a senior note at the initial annual rate of %.

"Business day" means any day that is not a Saturday, Sunday or day on which banking institutions and trust companies in the State of New York or at a place of payment are authorized or required by law, regulation or executive order to close.

The reset rate may not exceed the maximum rate, if any, permitted by applicable law.

What is remarketing?

The remarketing agent will attempt to remarket the senior notes of holders of normal units and will use the proceeds to purchase treasury securities, which the participating holders of normal units will pledge to secure their obligations under the related purchase contracts. Holders of normal units may elect not to participate in any remarketing by following the procedures described below. The cash paid upon maturity of the pledged treasury securities underlying the normal units of such holders will be used to satisfy such holders' obligations to purchase Common Shares on the share purchase date, as well as to provide funds to make the cash payment to holders of normal units due on the share purchase date. This will be one way for holders of normal units to satisfy their obligations to purchase Common Shares under the related purchase contracts. The remarketing agent will attempt to remarket the senior notes that are included in normal units on one or more occasions starting on the remarketing date, which will be the third business day prior to , 2005 or, if the remarketing agent fails to remarket the senior notes on that date, a later date as described below. As described below, a holder of a senior note in which interests are not held as

part of normal units may elect to have the separately held senior note remarketed along with the senior notes in which interests are held as part of the normal units.

Platinum Holdings and Platinum Finance will enter into a remarketing agreement with a nationally recognized investment banking firm that will act as remarketing agent. It is currently anticipated that Goldman, Sachs & Co. will be the remarketing agent. The remarketing agent will agree to use commercially reasonable best efforts to remarket the senior notes that are included in normal units (or separately held senior notes) that are participating in the remarketing, at a price per senior note equal to at least 100.25% of the remarketing value. The "remarketing value" of a senior note will be equal to the sum of:

(1) the value at the remarketing date (or any subsequent remarketing date) of such amount of treasury securities that will pay, on or prior to the share purchase date, an amount of cash equal to the interest payment scheduled to be payable on the senior note on that date, assuming for this purpose, even if not true, that the interest rate on the senior notes remains at the initial rate; and

(2) the value at the remarketing date (or any subsequent remarketing date) of such amount of treasury securities that will pay, on or prior to the share purchase date, an amount of cash equal to the principal amount of the senior note.

The remarketing agent will use the proceeds from a successful remarketing of the senior notes included in normal units to purchase, in its discretion, the amount and the types of treasury securities described in (1) and (2) above in respect of each such senior note that has been remarketed. The remarketing agent will purchase such treasury securities in open market transactions or at treasury auction and deliver them through the purchase contract agent to the collateral agent to secure the obligations under the related purchase contracts of the holders of the normal units whose senior notes participated in the remarketing. The remarketing agent will deduct out of the proceeds in excess of the remarketing value as a remarketing fee an amount not exceeding 25 basis points (0.25%) of the total proceeds from such remarketing. The remarketing agent will remit the remaining portion of the proceeds, if any, for the benefit of the holders of the normal units participating in the remarketing.

A holder of normal units may elect not to participate in any remarketing and, instead, retain the ownership interests in senior notes underlying those normal units by delivering, in respect of each senior note to be retained, the treasury securities having the value described in (1) and (2) above, in the amount and the types specified by the remarketing agent, to the purchase contract agent on the fourth business day prior to the first day of a remarketing period (as defined below) to satisfy its obligations under the related purchase contracts. Whether or not a holder of normal units participates in the remarketing, the interest rate on the senior notes in which interests are included in those units will nevertheless be reset if the remarketing is successful.

What happens if the remarketing agent does not successfully remarket the senior notes on the remarketing date?

If the remarketing agent cannot establish a reset rate meeting the requirements described above on the remarketing date and therefore cannot remarket the senior notes participating in the remarketing on the remarketing date at a price per senior note equal to at least 100.25% of the remarketing value, the remarketing agent will attempt to establish a reset rate meeting these requirements on each of the two business days immediately following the initial proposed remarketing date. If the remarketing agent cannot establish a reset rate meeting these requirements on either of those days, it will attempt to establish such a reset rate on each of the three business days immediately preceding , 2005. If the remarketing agent cannot establish such a reset rate during that period, it will further attempt to establish such a reset rate on the third business day

immediately preceding the share purchase date. We refer to each of these periods as a "remarketing period." Any subsequent remarketing will be at a price per senior note equal to at least 100.25% of the remarketing value on the subsequent remarketing date. If the remarketing agent fails to remarket the senior notes underlying the normal units at that price by the end of the third business day immediately preceding the share purchase date, any holder of normal units that has not otherwise settled its purchase contracts in cash on the business day immediately preceding the share purchase date (but without regard to the notice requirements otherwise applicable to cash settlement) will be deemed to have directed Platinum Holdings to retain the securities pledged as collateral in satisfaction of the holder's obligations under the related purchase contracts and Platinum Holdings will exercise its rights as a secured party and may, subject to applicable law, retain or dispose of such securities to satisfy in full such holder's obligation to purchase Platinum Holdings' Common Shares under the related purchase contracts on the share purchase date. In no event will a holder of a purchase contract be liable for any deficiency between such proceeds and the purchase price for the Common Shares under the purchase contract.

If I am not a party to a purchase contract, may I still participate in a remarketing of my senior notes?

Holders of senior notes in which interests are not included as part of normal units may elect to have their senior notes included in the remarketing in the manner described in "Description of the Equity Security Units—Optional Remarketing." The remarketing agent will use commercially reasonable best efforts to remarket the separately held senior notes included in the remarketing at a price per senior note equal to at least 100.25% of the remarketing value, determined on the same basis as for the other senior notes being remarketed. After deducting as a remarketing fee an amount not exceeding 25 basis points (0.25%) of the total proceeds from such remarketing, the remaining portion of the proceeds, if any, will be remitted to the holders whose separate senior notes were remarketed in the remarketing. If a holder of senior notes elects to have its senior notes remarketed during any remarketing period but the remarketing agent fails to remarket the senior notes during such remarketing period, the senior notes will be promptly returned to the custodial agent for release to the holder at the end of that period.

What is the settlement rate?

The settlement rate is the number of newly issued Common Shares that Platinum Holdings is obligated to sell and you are obligated to purchase upon settlement of a purchase contract on the share purchase date.

The settlement rate for each purchase contract, subject to adjustment under specified circumstances, will be as follows:

•: if the applicable market value, determined as described below, of the Common Shares is equal to or greater than $ , the settlement rate will be Common Shares per purchase contract;
•: if the applicable market value of the Common Shares is less than $ but greater than $ , the settlement rate will be equal to $25 divided by the applicable market value of the Common Shares per purchase contract; or
•: if the applicable market value of the Common Shares is less than or equal to $ , the settlement rate will be Common Shares per purchase contract.

"Applicable market value" means the average of the closing price per Common Share on each of the 20 consecutive trading days ending on the third trading day immediately preceding the share purchase date.

At the option of each holder, a purchase contract may be settled early by the early delivery of cash to the purchase contract agent, as described below, in which case the settlement rate will be Common Shares per purchase contract.

Besides participating in a remarketing, how else can my obligations under the purchase contract be satisfied?

Besides participating in the remarketing, your obligations under the purchase contract may also be satisfied:

•: if you have created stripped units or elected not to participate in the remarketing, by delivering and pledging specified treasury securities in substitution for your senior notes and applying the cash payments received upon maturity of those pledged treasury securities;
•: through the early delivery of cash to the purchase contract agent on or prior to the seventh business day prior to the share purchase date in the manner described in "Description of the Equity Security Units—Early Settlement";
•: by delivering cash on the business day prior to the share purchase date for settlement of the purchase contracts in the manner described in "Description of the Equity Security Units—Notice to Settle with Cash"; or
•: if Platinum Holdings is involved in a merger, acquisition or consolidation prior to the share purchase date in which at least 30% of the consideration for the Common Shares consists of cash or cash equivalents, through an early settlement of the purchase contract as described in "Description of the Equity Security Units—Early Settlement Upon Cash Merger."

If a holder of a unit elects not to participate in a remarketing and does not give notice to the purchase contract agent that the holder intends to settle the purchase contract with cash on the share purchase date, Platinum Holdings will exercise its rights as a secured party in respect of the pledged securities to satisfy the holder's obligation to purchase Common Shares.

In addition, the purchase contracts, Platinum Holdings' related rights and obligations and those of the holders of the units, including their rights to receive accumulated contract adjustment payments or deferred contract adjustment payments and obligations to purchase Common Shares, will automatically terminate upon the occurrence of Platinum Holdings' bankruptcy, insolvency or reorganization. Upon such a termination of the purchase contracts, the pledged senior notes or treasury securities will be released and distributed to you. If Platinum Holdings becomes the subject of a case under the federal bankruptcy code, a delay may occur as a result of the imposition of an automatic stay under the bankruptcy code and continue until the automatic stay has been lifted. The automatic stay will not be lifted until such time as the bankruptcy judge agrees to lift it and allows your collateral to be returned to you. Similarly, if Platinum Holdings becomes the subject of winding up proceedings under the Bermuda Companies Act 1981, a delay may result from the automatic stay of proceedings against Platinum Holdings and may continue until the court decides to lift the stay.

If the purchase contract is settled early or is terminated as the result of Platinum Holdings' bankruptcy, insolvency or reorganization as described above, a holder will have no further right to receive any accrued contract adjustment payments or deferred contract adjustment payments.

Under what circumstances may Platinum Finance redeem the senior notes before they mature?

If the tax laws change or are interpreted by the tax authorities or the courts in a way that adversely affects our tax consequences with respect to the senior notes, then Platinum Finance

may elect to redeem the senior notes. If the senior notes are redeemed before a successful remarketing, the money received from the redemption will be used by the collateral agent to purchase a portfolio of zero-coupon U.S. treasury securities that mature on or prior to each payment date of the senior notes through the share purchase date, in an aggregate amount equal to the principal on the senior notes included in normal units and the interest that would have been due on such payment date on the senior notes included in normal units. For a holder of normal units, these treasury securities will replace the senior notes as the collateral securing such holder's obligations to purchase Common Shares under the purchase contracts. If your senior notes are not components of normal units, you, rather than the collateral agent, will receive the related redemption payment. If the senior notes are redeemed, then each unit will consist of a purchase contract for Common Shares and an ownership interest in the portfolio of treasury securities.

What is the maturity of the senior notes?

The senior notes will mature on , 2007.

What is the extent of Platinum Holdings' guarantee?

Platinum Holdings will irrevocably guarantee the payment in full of the following:

•: interest payments that are required to be paid on the senior notes; and
•: the principal amount of the senior notes.

The guarantee will be unsecured and rank equally in right of payment to all other senior unsecured debt of Platinum Holdings. In addition, Platinum Holdings is a holding company and its assets will consist primarily of the capital stock of its subsidiaries. Accordingly, Platinum Holdings will depend on dividends and other distributions from its subsidiaries in order to make payments on the guarantee. As a result, Platinum Holdings' guarantee is effectively junior to the debt and other liabilities of its subsidiaries.

The senior notes and the guarantee do not limit Platinum Holdings' or Platinum Finance's ability or the ability of their respective subsidiaries to incur indebtedness. This would include indebtedness that ranks equally with the senior notes and the guarantee.

What are the U.S. federal income tax consequences related to the units and senior notes?

If you purchase units in the offering, you will be treated for U.S. federal income tax purposes as having acquired purchase contracts and ownership interests in the senior notes constituting those units, and by purchasing the units you agree to treat the purchase contracts and ownership interests in the senior notes in that manner for all tax purposes. In addition, you agree to treat the senior notes as indebtedness of Platinum Finance for all tax purposes. You must allocate the purchase price of the units between purchase contracts and ownership interests in the senior notes in proportion to their respective fair market values, which will establish your initial tax basis in each component of the units. Platinum Holdings and Platinum Finance expect to report the fair market value of each purchase contract as $0.00 and the fair market value of each senior note as $1,000 (or $25 for each 2.5% ownership interest in a senior note).

For U.S. federal income tax purposes, we intend to treat the senior notes as contingent payment debt instruments subject to the "noncontingent bond method" of accruing original issue discount. As discussed more fully under "U.S. Federal Income Tax Consequences—Senior Notes—Original Issue Discount", the effects of this method will be (1) to require you, regardless of your usual method of tax accounting, to use an accrual method with respect to interest on the senior notes, (2) to require you, for all accrual periods through , 2005, and possibly thereafter, to accrue interest income in excess of distributions actually received by you, and (3) generally to

result in ordinary rather than capital treatment of any gain or loss on the sale, exchange or disposition of an ownership interest in the senior notes or the units to the extent attributable to the senior notes.

Because there is no statutory, judicial or administrative authority directly addressing the tax treatment of units or instruments similar to units, you are urged to consult your own tax advisor concerning the tax consequences of an investment in units. For additional information, see "U.S. Federal Income Tax Consequences."

What are the ERISA considerations?

Plans subject to Title I of the U.S. Employee Retirement Income Security Act of 1974 ("ERISA") or Section 4975 of the Internal Revenue Code of 1986 may invest in the equity units subject to the considerations set forth in "ERISA Considerations."

Will the units be listed on a stock exchange?

We have applied to list the normal units on the New York Stock Exchange under the symbol "PTP Pr M". We have no obligation and do not currently intend to apply for any separate listing of either the stripped units or the senior notes on any stock exchange.

What are the expected uses of proceeds from the offerings?

We estimate that Platinum Finance will receive net proceeds from the ESU Offering of approximately $ million, or $ million if the underwriters' option to purchase additional units is exercised in full. We anticipate that Platinum Finance will retain $20 million of the net proceeds, or $23 million if the underwriters exercise the over-allotment option in full, and contribute the rest to Platinum US, its wholly owned subsidiary. Platinum Finance intends to use the retained portion of the net proceeds of the offering to fund the interest payments on the senior notes payable on or prior to the share purchase date.

Assuming the Common Shares are offered at an initial public offering price of $23 per Common Share (the midpoint of the range at which Platinum Holdings proposes to offer the Common Shares), the net proceeds from the Equity Public Offering are estimated to be between approximately $ million (assuming no exercise of the underwriters' option to purchase additional Common Shares) and $ million (assuming full exercise of the underwriters' option to purchase additional Common Shares).

The ESU Offering—Explanatory Diagrams

The following diagrams demonstrate some of the key features of the purchase contracts, normal units, stripped units and the senior notes, and the transformation of normal units into stripped units and senior notes. The following diagrams assume that the senior notes are successfully remarketed, the interest rate on the senior notes is reset, there is no early settlement and the payment of contract adjustment payments is not deferred.

Purchase Contracts

•: Normal units and stripped units both include a purchase contract under which you agree to purchase Common Shares on the share purchase date.
•: The number of Common Shares to be purchased under each purchase contract will depend on the "applicable market value." The "applicable market value" means the average of the closing price per Common Share on each of the 20 consecutive trading days ending on the third trading day immediately preceding the share purchase date.

(1)

The "reference price" is $ , which is the initial public offering price of the Common Shares.

(2)

The "threshold appreciation price" is $ , which is % of the reference price.

(3)

For each of the percentage categories shown, the percentage of the Common Shares to be delivered on the share purchase date to a holder of normal units or stripped units is determined by dividing

•: the related number of Common Shares to be delivered, as indicated in the footnote for each such category, by
•: an amount equal to $25, the stated amount of the unit, divided by the reference price.

(4): If the applicable market value of the Common Shares is less than or equal to the reference price, the number of Common Shares to be delivered will be calculated by dividing the stated amount of $25 by the reference price.
(5): If the applicable market value of the Common Shares is between the reference price and the threshold appreciation price, the number of Common Shares to be delivered will be calculated by dividing the stated amount of $25 by the applicable market value.

(6): If the applicable market value of the Common Shares is greater than or equal to the threshold appreciation price, the number of Common Shares to be delivered will be calculated by dividing the stated amount of $25 by the threshold appreciation price.

Normal Units

•: A normal unit will consist of two components as illustrated below:
•: After a successful remarketing or tax event redemption, the normal units will include specified treasury securities in lieu of the senior notes.
•: If you hold a normal unit, you will hold an ownership interest in a senior note and, after a successful remarketing or tax event redemption, an ownership interest in specified treasury securities, but will pledge that interest to the collateral agent for the benefit of Platinum Holdings to secure your obligations under the purchase contract.
•: If you hold a normal unit, you may also substitute a specified amount of treasury securities for the ownership interest in a senior note if you decide not to participate in the remarketing.

Stripped Units

•: A stripped unit consists of two components as illustrated below:
•: If you hold a stripped unit, you own a 1/40, or 2.5%, interest in the treasury security but will pledge it to the collateral agent for the benefit of Platinum Holdings to secure your obligations under the purchase contract. The treasury security is a zero-coupon U.S. treasury security (CUSIP No. ) that matures on , 2005.

Senior Notes

•: Senior notes will have the terms illustrated below:

•

If you hold an ownership interest in a senior note that is a component of a normal unit, you have the option to either:

•: allow the ownership interest in the senior note to be included in the remarketing process, the proceeds of which will be used to purchase treasury securities, if the remarketing is successful, which will be applied to settle the purchase contract; or
•: elect not to participate in the remarketing by delivering treasury securities in substitution for the ownership interest in the senior note, the proceeds of which will be applied to settle the related purchase contract.

•

If you hold a senior note that is not a component of a normal unit, you have the option to either:

•: continue to hold the senior note the rate of which will be reset, effective from the settlement date of a successful remarketing of the senior notes; or
•: deliver the senior note to the remarketing agent to be included in the remarketing.

Transforming Normal Units into Stripped Units and Senior Notes

•: To create stripped units, you must substitute for the pledged ownership interest in the senior note (or, after a successful remarketing or tax event redemption, the pledged treasury securities) the specified zero-coupon U.S. treasury security that matures on , 2005.
•: The pledged senior note or the pledged treasury securities will be released from the pledge and delivered to you.
•: The zero-coupon U.S. treasury security together with the purchase contract would then constitute a stripped unit. The senior note (or, after a successful remarketing, treasury securities), which was previously a component of normal units, is tradable as a separate security.
•: The transformation of normal units into stripped units and senior notes and the transformation of stripped units and senior notes into normal units may generally be effected only in integral multiples of 40 units, as more fully described in this prospectus. If, however, the senior notes constituting a part of the normal units have been replaced with treasury securities due to a successful remarketing or tax event redemption, the transformation of normal units into stripped units and the recreation of normal units from stripped units may be effected only in integral multiples of units such that both the treasury securities to be deposited and the treasury securities to be released are in integral multiples of $1,000, as more fully described in this prospectus.

The following illustration depicts the transformation of 40 normal units into 40 stripped units and one $1,000 principal amount senior note.

•: After remarketing, the normal units will include ownership interests in specified U.S. treasury securities in lieu of an ownership interest in senior notes.
•: You can also transform stripped units and senior notes (or, after a successful remarketing or tax event redemption, treasury securities) into normal units. Following that transformation, the specified zero-coupon U.S. treasury security, which was previously a component of the stripped units, is tradable as a separate security.

Selected Pro Forma Financial Information and Operating Data

Financial information in this prospectus is presented in U.S. dollars and on the basis of U.S. GAAP unless otherwise indicated.

In this prospectus, we are presenting unaudited pro forma financial information of Platinum Holdings with respect to the Transferred Business, contingent upon the completion of the Equity Public Offering. This pro forma financial information is based on the terms of the agreements between Platinum and St. Paul effecting the transfer of the Transferred Business, the material terms of which are described under "Certain Relationships and Related Transactions", which we refer to herein as the "Inception Agreements."

We caution that the Platinum pro forma consolidated balance sheet and pro forma combined underwriting results presented herein are not indicative of the actual results that we expect to achieve once we commence operations. Many factors may cause our actual results to differ materially from the pro forma consolidated balance sheet and underwriting results including, but not limited to, the following:

•: Platinum's pro forma combined statement of underwriting results includes premium and loss development on business entered into prior to January 1, 2002. Under the Quota Share Retrocession Agreements, we are assuming no premium or loss development on business entered into prior to January 1, 2002. Therefore, our reported premiums written and earned and reported losses and loss adjustment expenses, which are the expenses of settling claims, in our initial years of operation could be substantially lower than as presented in Platinum's pro forma combined statement of underwriting results. As such, our reported results in our initial years of operation will not be subject to prior year development for periods prior to January 1, 2002.
•: Following the Equity Public Offering, we will report underwriting results under the Quota Share Retrocession Agreements for the period prior to the later of the business day immediately after the date of completion of the Equity Public Offering or October 1, 2002 based on the application of retroactive reinsurance accounting, resulting in the premiums earned and losses incurred by St. Paul during such period being excluded from our statement of underwriting results. Due to this exclusion, following the Equity Public Offering, our reported 2002 premiums written and earned and our net underwriting results in 2002 could be substantially different than as presented in Platinum's pro forma combined statement of underwriting results.
•: Platinum's pro forma consolidated balance sheet reflects the inception of the Quota Share Retrocession Agreements assuming transferred balances as of June 30, 2002. Platinum's actual consolidated balance sheet will report transferred amounts determined as of 12:01 a.m. on the later of the business day immediately after the date of completion of the Equity Public Offering or October 1, 2002. Accordingly, underwriting gain or loss with respect to the Assumed Reinsurance Contracts for the period from January 1, 2002 through such date will be retained by St. Paul.
•: Although we expect to continue to be afforded the benefits of most of St. Paul Re's retrocessional reinsurance program through their expiration during 2002, we may enter into retrocessional reinsurance contracts with significantly different terms and conditions from those that have been made available to us from St. Paul Re and which form the basis of our initial operations.

•: The additional and reinstatement premiums, which are premiums charged for the restoration of the limit of a catastrophe contract to its full amount after payment of losses, recorded in 2001 by St. Paul Re's Finite Risk operating segment were primarily caused by losses relating to the September 11, 2001 terrorist attack. These additional and reinstatement premiums were unusually high and not necessarily indicative of the recurring premium volume we expect to write in that business segment.
•: Platinum's pro forma financial statements continue to reflect the discounting of the liability for certain Assumed Reinsurance Contracts based on our current intention to make arrangements to permit such discounting. If we do not put such arrangements in place, reinsurance contracts of a similar type entered into in the future would be reported on an undiscounted basis.

Pro Forma Consolidated Balance Sheet Data

We have prepared our unaudited pro forma consolidated balance sheet as of June 30, 2002 to reflect our initial capitalization in the amount of $120,000 and adjusted to reflect, among other things,

•: amounts reflecting (a) the receipt of approximately $735 million, representing the estimated net proceeds from the Equity Public Offering based on an assumed initial public offering price of $23 per Common Share (the midpoint of the range at which Platinum Holdings proposes to offer the Common Shares), without giving effect to any exercise of the underwiters' option to purchase additional Common Shares, (b) the redemption of the Common Shares that were issued at inception and capital contributed prior to the Equity Public Offering, and (c) the payment of certain formation and organization expenses as discussed in Note 2 and Note 12 on pages F-5 and F-11 of this prospectus. It is further assumed that the net proceeds from the Equity Public Offering will be invested in long-term, taxable fixed income securities;
•: amounts representing the receipt of St. Paul's Cash Contribution and the contribution of the Transferred Business at historical cost in exchange for the issuance of Common Shares and the St. Paul Option. Amounts related to net tangible assets contributed to Platinum by St. Paul are recorded at St. Paul's book value as of June 30, 2002. Assets include the net assets of Platinum US (which reflect a dividend of $10 million to be made to United States Fidelity and Guaranty Company, its parent, immediately prior to St. Paul's contribution of Platinum US) as well as certain fixed assets and other intangible assets such as broker and customer lists and contract renewal rights and licenses, as well as the receipt of a Cash Contribution of $ million (the midpoint of the $ million to $ million range for the Cash Contribution);
•: amounts reflecting the receipt of approximately $120 million, representing the estimated net proceeds from this offering and recognition of the present value of future contract adjustment payments payable on the purchase contracts contained within the equity security units, without giving effect to any exercise of the underwriters' option to purchase additional equity security units. It is further assumed that the net proceeds from this offering will be invested in long-term, taxable fixed income securities; and
•: amounts reflecting Platinum entering into the Quota Share Retrocession Agreements with St. Paul Re reinsuring the Assumed Reinsurance Contracts as of June 30, 2002.

	At June 30, 2002
	($ in millions, except per share amount)
Cash and invested assets	$
Deferred acquisition costs		22
Other assets		5

Total assets	$

Unpaid losses and loss adjustment expense reserves	$	102
Unearned premium reserves		152
Debt obligations(1)		125
Other liabilities(2)
Total shareholders' equity(2)

Total liabilities and shareholders' equity	$

Book value per Common Share(2) (3)	$

(1): Reflects senior notes issued in connection with the ESU Offering.
(2): Reflects the present value of the contract adjustment payments.
(3): Reflects the issuance of Common Shares in the Equity Public Offering and the St. Paul Investment, net of $ per share of expenses incurred in connection with the Equity Public Offering and the ESU Offering.

Pro Forma Combined Underwriting Results

We have prepared our unaudited pro forma combined statements of underwriting results to represent our reinsurance business as if we had commenced our operations and the Equity Public Offering, the ESU Offering and the St. Paul Investment had been completed as of January 1, 2001. Our presentation of our pro forma underwriting results assumes that all of the Inception Agreements were entered into as of January 1, 2001. We have based our presentation on St. Paul Re's actual underwriting results for the periods presented. We have then adjusted these historical results to remove any of St. Paul Re's reinsurance businesses that will not be part of Platinum following the completion of the Equity Public Offering, including

•: amounts related to St. Paul Re's reinsurance business representing lines of business that will not be transferred to Platinum, including aviation and bond and credit reinsurance, certain financial risk and capital markets reinsurance products, and certain North American business previously underwritten in London. Platinum will not obtain the renewal rights to these lines of business and will not assume liabilities related to these lines of business, and Platinum's management does not intend to write these lines of business in the future, and
•: amounts related to St. Paul Re's allocations from the St. Paul corporate aggregate excess-of-loss reinsurance programs that will not be available to Platinum.

Except as noted above, the pro forma combined underwriting results assume that all other retrocessional reinsurance with respect to the Assumed Reinsurance Contracts entered into in 2002 and prior years will remain available to Platinum.

Our future results will depend in part on the amount of our investment income, which cannot be predicted and which will fluctuate depending upon the types of investments we select, our underwriting results and market factors. Actual tax expense in future periods will be based on underwriting results plus investment income and other income and expense items not reflected in the pro forma combined underwriting results. Our effective tax rate will reflect the proportion of income recognized by our operating subsidiaries, with Platinum US taxed at the U.S. corporate income tax rate (35%), Platinum UK taxed at the U.K. corporate tax rate (generally 30%), Platinum Ireland taxed at the Irish corporate tax rate (25% on non-trading income and 16% on trading income, the latter rate to be reduced to 12.5% as of January 1, 2003), and Platinum Bermuda taxed at a zero corporate tax rate. In 2002, we expect to have a greater portion of our income subject to U.S. taxation and U.K. taxation than we expect to have in the future because our Bermuda operations are entirely new but can be expected to grow as a proportion of our business. As a result of changes in the geographic distribution of taxable income as well as changes in the amount of our non-taxable income and expense, the relationship between our reported income before tax and our income tax expense may change significantly from one period to the next.

				Six Months Ended June 30,
				Six Months Ended June 30,						Year Ended December 31, 2001
				2002			2001			Year Ended December 31, 2001
				($ in millions)
Net premiums earned
	Net premiums written			$	602		$	576		$	1,382
	Change in unearned premiums, net				(29	)		(88	)		(80	)

		Net premiums earned			573			488			1,302
Losses and Underwriting Expenses
	Losses and loss adjustment expenses				350			344			1,440
	Policy acquisition expenses				144			149			237
	Other underwriting expenses				30			33			63

		Total underwriting losses and expenses		$	524		$	526		$	1,740

	Underwriting gain (loss)			$	49		$	(38	)	$	(438	)

Selected Ratios - U.S. GAAP
	Loss and loss adjustment expense ratio				61.2	%		70.6	%		110.6	%
	Underwriting expense ratio				30.3	%		37.1	%		23.0	%

		Combined ratio			91.5	%		107.7	%		133.6	%

Selected Ratios - Statutory
	Loss and loss adjustment expense ratio				61.2	%		70.6	%		110.6	%
	Underwriting expense ratio				28.0	%		34.7	%		23.3	%

		Combined ratio			89.2	%		105.3	%		133.9	%

			Impact of catastrophes on combined ratio (1)		(3.0)	%		3.7	%		40.9	%

(1): Excludes ceded losses under St. Paul Re's aggregate excess-of-loss treaties, because such treaties extend to non-catastrophic as well as catastrophic losses as described below. The 3% benefit from catastrophes on the June 30, 2002 combined ratio is driven by a lack of catastrophes in the first six months of 2002 and favorable loss development in 2002 on catastrophe losses incurred in prior years.

Included in the 2001 pro forma combined underwriting results are pre-tax losses related to the September 11, 2001 terrorist attack totaling $468 million. This amount includes gross losses and loss adjustment expenses of $819 million, $123 million of ceded reinsurance, $137 million of additional and reinstatement premiums and $91 million of reduced contingent commission expenses. The determination of the impact of catastrophes on the combined ratio (which is a combination of the expense ratio and the loss ratio) excludes the ceded losses under St. Paul Re's aggregate excess-of-loss treaties; these treaties provide coverage for excess losses arising from catastrophic and non-catastrophic events. The benefits of St. Paul Re's aggregate excess-of-loss treaty for 2002 will remain available to Platinum for the balance of 2002 unless earlier terminated pursuant to its terms.

Pro Forma Underwriting Results by Operating Segment

The following provides a summary of the pro forma underwriting results for our three operating segments. To provide a more meaningful indication of the underlying performance of our business segments, the results exclude the impact of St. Paul Re's aggregate excess-of-loss treaties and the impact of the September 11, 2001 terrorist attack.

		Six Months Ended June 30,
		Six Months Ended June 30,						Year Ended December 31, 2001
		2002			2001			Year Ended December 31, 2001
		($ in millions)
Net premiums written
Global Property and Marine		$	215		$	196		$	356
Global Casualty			248			288			611
Finite Risk			146			129			365

	Total	$	609		$	613		$	1,332
Underwriting gain (loss)
Global Property and Marine		$	68		$	15		$	68
Global Casualty			(29	)		(89	)		(119	)
Finite Risk			30			(6	)		(26	)

	Total	$	69		$	(80	)	$	(77	)
Combined ratio
Global Property and Marine			63.6	%		90.5	%		80.8	%
Global Casualty			112.3	%		138.1	%		122.1	%
Finite Risk			78.9	%		104.8	%		107.1	%

	Total		88.0	%		115.4	%		106.1	%

RISK FACTORS

Before investing in the units, you must carefully consider the following risk factors. These risks could materially affect our business, results of operations or financial condition and cause the trading price of the units to decline. You could lose part or all of your investment.

Risks Related to Our Business

If we are unable to implement our business strategy or operate our business as we currently expect, our results may be adversely affected.

Platinum Holdings, Platinum UK, Platinum Bermuda, Platinum Ireland and Platinum Finance were recently formed. Platinum US, a wholly owned subsidiary of St. Paul, has been in existence since 1995 as an inactive insurance company. None of these companies has any operating history. Businesses, such as ours, which are starting up or in their initial stages of development present substantial business and financial risks and may suffer significant losses. We must develop business relations, establish operating procedures, hire staff, obtain facilities, implement new systems, obtain licenses and complete other tasks appropriate for the conduct of our intended business activities. If we are unable to implement these actions to operate our business as we currently expect, our results may be adversely affected. As a result of industry factors or factors specific to Platinum, we may have to alter our anticipated methods of conducting our business, such as the nature, amount and types of risks we assume.

We may not be able to successfully continue the business being contributed by
St. Paul Re because we do not have St. Paul's established name recognition and capital base.

Although we anticipate commencing our operations with an existing reinsurance business, including renewal opportunities, broker and cedent relationships, a workforce and other tangible and intangible assets that are being contributed by St. Paul Re, we may not be able to successfully continue this business. We will not have any of the benefits which may have flowed to the business from being affiliated with St. Paul, including its name recognition, its reputation in the industry and its strong capital base. In addition, we will not have certain offices that produced 2002 business but that were closed in late 2001 and early 2002. It is possible that clients of St. Paul Re will choose not to renew expiring contracts with us and will choose to reinsure with our competitors. It is possible that cedents will choose to not do business with us because we will have a smaller capital base or lower ratings than St. Paul has or because the cedents' credit approval committees will not approve doing business with us. It is possible that clients that do renew expiring contracts with us may demand policy terms that are less favorable to us or may renew only with reduced coverage limits. In addition, certain of the Assumed Reinsurance Contracts afford the reinsured party a right to cancel coverage upon transfer of the Transferred Business to us. While we expect that few, if any, cancellations will occur, substantial cancellations would adversely affect our future results of operations, particularly in the near term. We may not be able to maintain the broker relationships established by St. Paul Re, or retain those employees of St. Paul Re who are expected to join us upon completion of the Equity Public Offering. We may not be able to build upon this base of business or operate our business as successfully as St. Paul Re. It is also possible that the restructuring of St. Paul Re that St. Paul initiated in December 2001 and the Equity Public Offering and this offering may adversely affect our ability to maintain the St. Paul Re business that is being transferred to us.

Neither our pro forma financial information nor the historical combined financial information of St. Paul Re in this prospectus is an indicator of our future actual results.

As a newly formed company, we have no actual results of operations. We are, therefore, presenting in this prospectus our pro forma financial information with respect to the reinsurance business which St. Paul will be transferring to us, as if the Equity Public Offering, this offering and

the St. Paul Investment had been completed and we had commenced our operations as of January 1, 2001. We are also presenting historical combined financial information of St. Paul Re to illustrate the underwriting results of our actual historical reinsurance business.

We caution that our pro forma financial information and the historical combined financial information of St. Paul Re presented in this prospectus are not necessarily comparable with or indicative of the actual results that we expect to achieve once we commence operations for the reasons set forth below:

•: Platinum's pro forma combined statement of underwriting results includes premium and loss development on business entered into prior to January 1, 2002. Under the Quota Share Retrocession Agreements, we are assuming no premium or loss development on business entered into prior to January 1, 2002. Therefore, our reported premiums written and earned and reported losses and loss adjustment expenses in our initial years of operation could be substantially lower than as presented in Platinum's pro forma combined statement of underwriting results. As such, our reported results in our initial years of operation will not be subject to prior year development for periods prior to January 1, 2002.
•: Following the Equity Public Offering, we will report underwriting results under the Quota Share Retrocession Agreements for the period prior to the later of the business day immediately after the date of completion of the Equity Public Offering or October 1, 2002 based on the application of retroactive reinsurance accounting, resulting in the premiums earned and losses incurred by St. Paul during such period being excluded from our statement of underwriting results. Due to this exclusion, following the Equity Public Offering, our reported 2002 premiums written and earned and our net underwriting results in 2002 could be substantially different than as presented in Platinum's pro forma combined statement of underwriting results.
•: Platinum's pro forma consolidated balance sheet reflects the inception of the Quota Share Retrocession Agreements assuming transferred balances as of June 30, 2002. Platinum's actual consolidated balance sheet will report transferred amounts determined as of 12:01 a.m. on the later of the business day immediately after the date of completion of the Equity Public Offering or October 1, 2002. Accordingly, underwriting gain or loss with respect to the Assumed Reinsurance Contracts for the period from January 1, 2002 through such date will be retained by St. Paul.
•: Although we expect to continue to be afforded the benefits of most of St. Paul Re's retrocessional reinsurance program through their expiration during 2002, we may enter into retrocessional reinsurance contracts with significantly different terms and conditions from those that have been made available to us from St. Paul Re and which form the basis of our initial operations.
•: The additional and reinstatement premiums recorded in 2001 by St. Paul Re's Finite Risk operating segment were primarily caused by losses relating to the September 11, 2001 terrorist attack. These additional and reinstatement premiums were unusually high and not necessarily indicative of the recurring premium volume we expect to write in that business segment.
•: Platinum's pro forma financial statements continue to reflect the discounting of the liability for certain Assumed Reinsurance Contracts based on our current intention to make arrangements to permit such discounting. If we do not put such arrangements in place, reinsurance contracts of a similar type entered into in the future would be reported on an un-discounted basis.

Our future consolidated financial results will also depend on the amount of our investment income, which cannot be predicted and which will fluctuate depending upon the types of

investments we select, our underwriting results and market factors, such as the level of interest rates, as well as our consolidated effective tax rate.

Intense competition could adversely affect our profitability.

The property and casualty reinsurance industry is highly competitive and, except for regulatory considerations, there are relatively few barriers to entry. We will compete with major U.S. and non-U.S. reinsurers, including several Bermuda-based reinsurers that write property and casualty reinsurance and that target the same market as we do and utilize similar business strategies.

In addition to reinsurance company competitors, other financial institutions are now able to offer services similar to those that we expect to offer. Financial institutions have also created alternative capital market products that compete with reinsurance products, such as reinsurance securitization. Such alternative products may be perceived to be more beneficial for ceding companies than reinsurance offered by reinsurance companies and may result in lower demand for certain of our products.

Since we have no operating history, many of our competitors have greater name and brand recognition than we currently do. Many of them also have more (in some cases substantially more) capital and greater marketing and management resources than we expect to have, and may offer a broader range of products and more competitive pricing than we expect to or will be able to offer.

Our competitive position will be based on many factors, including our perceived overall financial strength, ratings assigned by independent rating agencies, geographic scope of business, client relationships, premiums charged, contract terms and conditions, products and services offered (including the ability to design customized programs), speed of claims payment, reputation, experience and qualifications of employees and local presence. Since we have not yet commenced operations, we may not be able to compete successfully on any of these bases. If competition limits our ability to write new business at adequate rates, our return on capital may be adversely affected.

The September 11, 2001 terrorist attack has generated substantial new capital inflows into the reinsurance industry, increasing competition which could adversely affect our profitability.

Following the terrorist attack of September 11, 2001, a number of new reinsurers and other entities have been formed and a number of existing market participants have raised new capital in an effort to participate in an improving marketplace. These new and better financed companies are expected to increase the level of competition in the industry, which may affect our competitive position. While we believe that we and our competitors will be able to raise premium rates in the near and intermediate term, the additional competition following the September 11, 2001 terrorist attack may limit such increases or result in decreases in premium rates.

We are not yet rated by A.M. Best and this could affect our competitive position with customers.

Competition in the types of reinsurance business that we intend to underwrite is based on many factors, including the perceived financial strength of the reinsurer and ratings assigned by independent rating agencies. A.M. Best Company, Inc. ("Best's") is generally considered to be a significant rating agency with respect to the evaluation of insurance and reinsurance companies. Best's ratings are based on a quantitative evaluation of performance with respect to profitability, leverage and liquidity and a qualitative evaluation of spread of risk, reinsurance program, investments, reserves and management. Insurance ratings are used by insurers and reinsurance intermediaries as an important means of assessing the financial strength and quality of reinsurers. In addition, a ceding company's own rating may be adversely affected by the lack of a rating of its reinsurer. Therefore, the lack of a rating may dissuade a ceding company from reinsuring with us

and may influence a ceding company to reinsure with a competitor of ours that has an insurance rating.

We are not yet rated by Best's or by any other insurance rating agency. We are seeking a Best's rating of not less than " ", which we believe to be critical to our competitiveness. Failure to obtain such a rating, or, assuming we do obtain such a rating, any future rating downgrade, would significantly and adversely affect our ability to compete in a large portion of the reinsurance market in which we will operate.

Consolidation in the insurance industry could lead to lower margins for us and less demand for our reinsurance products and services.

The insurance industry is undergoing a process of consolidation as industry participants seek to enhance their product and geographic reach, client base, operating efficiency and general market power through merger and acquisition activities. These larger entities may seek to use the benefits of consolidation to, among other things, implement price reductions for their products and services. If competitive pressures compel us to reduce our prices, our operating margins would decrease.

As the insurance industry consolidates, competition for customers may become more intense and the importance of acquiring and properly servicing each customer will become greater. We could incur greater expenses relating to customer acquisition and retention, which could reduce our operating margins. In addition, insurance companies that merge may be able to enhance their negotiating position when buying reinsurance and may be able to spread their risks across a consolidated, larger capital base so that they require less reinsurance.

We are dependent on key executives.

Our success will depend in substantial part upon the continued service of Steven H. Newman as our Chairman of the Board of Directors and Jerome T. Fadden as our President and Chief Executive Officer. Mr. Fadden's employment contract will expire on March 4, 2007 unless extended. Mr. Newman will serve as a consultant to Platinum US through March 1, 2005 unless his consulting contract is extended. Our success will also depend on our ability to attract and retain additional executives and underwriting personnel. We believe that there are only a limited number of available, qualified executives in the reinsurance industry, and our inability to hire additional senior executives or the loss of the services of any of our senior executives could delay or prevent us from fully implementing our business strategy and could significantly and negatively affect our business.

Under Bermuda law, non-Bermudians (other than spouses of Bermudians) may not engage in any gainful occupation in Bermuda without a work permit. None of our executive officers is a Bermudian, and all such officers will be working in Bermuda under work permits. Mr. Fadden has obtained a temporary work permit, and we are seeking longer-term work permits from the Bermuda authorities for him as well as for Michael E. Lombardozzi, William A. Robbie and any other persons who will be employees of Platinum Holdings or Platinum Bermuda who are not Bermudian citizens. The Bermuda government recently announced a new policy that places a six-year term limit on individuals with work permits, subject to certain exemptions for key employees. It is possible that we could lose the services of one or more of these people if we are unable to obtain or renew their work permits, which could significantly and adversely affect our business.

The occurrence of severe catastrophic events may have a material adverse effect on our financial results and financial condition.

Because we intend to underwrite property and casualty reinsurance and will have large aggregate exposures to natural and man-made disasters, we expect that our loss experience generally will include infrequent events of great severity. The frequency and severity of catastrophe losses are inherently unpredictable. Consequently, the occurrence of losses from catastrophic events is likely to cause a material adverse effect on our results of operations and financial

condition. For example, St. Paul Re recorded pre-tax catastrophe losses of $135 million in 2000 and $143 million in 1999, materially impacting its results of operations during those years. In addition, catastrophes are an inherent risk of our business and a catastrophe or series of catastrophes can be expected to have a material adverse effect on our ability to write new business, and our financial condition and results of operations, possibly to the extent of eliminating our shareholders' equity and statutory surplus (which is the amount remaining after all liabilities, including loss reserves, are subtracted from all admitted assets, as determined under statutory accounting principles, which are the principles prescribed or permitted by U.S. insurance regulatory authorities). Increases in the values and geographic concentrations of insured property and the effects of inflation have historically resulted in increased severity of industry losses in recent years and we expect that those factors will increase the severity of catastrophe losses in the future.

Under the Quota Share Retrocession Agreements, St. Paul retains underwriting gain or loss with respect to the Assumed Reinsurance Contracts for the period from January 1, 2002 to the transfer date, which is 12:01 a.m. on the later of the business day immediately after the date of completion of the Equity Public Offering or October 1, 2002. Accordingly, St. Paul retains underwriting losses, if any, with respect to catastrophes arising before the transfer date to the extent reserves are established therefor as of such date. For example, St. Paul's results were adversely affected by losses relating to flooding in Europe in August 2002, for which it has estimated incurred losses of $ million as of , 2002. Platinum bears all underwriting loss from catastrophes occurring on or after the transfer date and any underwriting loss or gain resulting from reestimation of catastrophe losses established by St. Paul as of the transfer date, including development on the reserves established by St. Paul, on the basis of preliminary estimates, in respect of the August 2002 European floods. Under the Quota Share Retrocession Agreements, premiums attributable to policy periods prior to the transfer date are retained by St. Paul, and premiums attributable to periods on or following the transfer date are for Platinum's benefit. Consistent with St. Paul's accounting practices, St. Paul and Platinum intend to allocate 2002 premiums attributable to catastrophe coverage before and after the transfer date between themselves on a pro rata basis over the applicable policy period, without adjustment for seasonality that exists for certain catastrophe losses. Certain catastrophic events, such as hurricane and windstorm exposure in North America, tend to occur more frequently in the latter half of the calendar year. Accordingly, Platinum's premium income attributable to certain catastrophe coverages and earned in the period following the time of effectiveness of the Quota Share Retrocession Agreements may not, due to seasonality among other factors, sufficiently match Platinum's exposure to losses from certain catastrophic events which may occur in the remaining part of 2002.

The September 11, 2001 terrorist attack may result in government intervention impacting the insurance and reinsurance markets.

In response to the tightening of supply in certain insurance markets resulting from, among other things, the terrorist attack of September 11, 2001, the U.S. government and other governments may intervene in the insurance and reinsurance markets. Following the September 11, 2001 terrorist attack, various proposed legislation that is designed to ensure the availability of insurance coverage for terrorist acts has been introduced in the U.S. Congress. Legislation has been adopted in the U.S. House of Representatives designed, among other things, to provide federal government loans over a short-term period to commercial insurers and reinsurers for funding losses arising from terrorist acts against U.S. properties, which loans would be repaid through industry assessments and, if losses exceed a threshold, policyholder assessments. Similar, alternative legislation has been adopted in the U.S. Senate; the Senate legislation provides for direct government assistance to commercial insurers and reinsurers for covered losses that exceed a per-company "deductible." We cannot predict whether any such legislation will be enacted or

what form it may take. You should note that governmental intervention could significantly and adversely affect us by, among other things:

•: providing competing insurance and reinsurance capacity in the markets and to the customers we expect to target;
•: regulating the terms of insurance and reinsurance capacity and reinsurance policies in a manner that could significantly and adversely affect us, directly or indirectly, by requiring coverage for terrorist acts to be offered by insurers and reinsurers, benefiting our competitors, reducing the demand for our products or benefiting insurers as compared to reinsurers such as ourselves;
•: providing sources of liquidity to U.S. companies that may not be available to our non-U.S. subsidiaries; or
•: otherwise disproportionally benefiting U.S. or other foreign countries' companies over Bermuda-based companies such as Platinum Holdings and its Bermuda subsidiary.

The September 11, 2001 terrorist attack has caused uncertainty as to future insurance and reinsurance coverage for terrorist acts, and we may in the future have substantial exposure to such acts.

Following the terrorist attack of September 11, 2001, there is uncertainty in the insurance and reinsurance markets about the extent to which future coverages will extend to terrorist acts. There is also uncertainty about the definition of terrorist acts. We believe that coverage of claims that are the result of terrorist acts (as they are ultimately defined by industry and government standards) will generally be excluded from property catastrophe reinsurance contracts covering large commercial risks above specified property values, but generally will not be excluded for smaller commercial coverages, personal lines written for individuals or families or other coverages. Accordingly, we presently continue to incur exposure to terrorist acts. The extent to which coverage for terrorist acts will be offered by the insurance and reinsurance markets in the future is uncertain. Coverage for losses resulting from terrorist acts may be offered separately in the reinsurance market, and we may or may not offer such coverage in the future. If our and the insurance industry's attempts to exclude terrorist acts from contracts covering large commercial risks that exceed specified values were to fail, we could incur large unexpected losses if further terrorist attacks occur.

The failure to be effective of any of the loss limitation methods we employ could have a material adverse effect on our financial condition or our results of operations.

Our property and casualty reinsurance contracts cover unpredictable events such as hurricanes, windstorms, hailstorms, earthquakes, volcanic eruptions, fires, industrial explosions, freezes, riots, floods, and other natural or man-made disasters. We intend to seek to limit our loss exposure by writing the majority of our products on an excess-of-loss basis. We also intend to limit the aggregate amount of all treaties for each client and to execute prudent underwriting of each program written. In the case of treaties where we reinsure a proportionate part of premiums and losses, which are referred to as pro rata or proportional treaties, we intend to seek per occurrence limitations or caps on the ratio of losses to premiums, which are referred to as loss cap ratios, to limit the impact of losses from any one event. A limited number of the Assumed Reinsurance Contracts do not contain these limits, which means that there is no contractual limit to the losses that we may be required to pay pursuant to such Assumed Reinsurance Contracts. In addition, we intend to seek to limit our loss exposure by geographic diversification. Geographic zone limitations involve significant underwriting judgments, including the specification of the areas constituting the zones and the inclusion of a particular policy within a particular zone's limits. Various provisions of our policies, such as limitations or exclusions from coverage or choice of forum, may not be enforceable in the manner we intend, due to, among other things, disputes relating to coverage and choice of legal forum. Underwriting is a matter of judgment, involving important assumptions

about matters that are inherently unpredictable and beyond our control, and for which historical experience and probability analysis may not provide sufficient guidance. One or more catastrophic or other events could result in claims that substantially exceed our expectations, which could have a material adverse effect on our financial condition or our results of operations, possibly to the extent of eliminating our shareholders' equity and statutory surplus. St. Paul Re recorded net pretax losses of $556 million as a result of the September 11, 2001 terrorist attack, the most significant catastrophe to date for the property-casualty insurance industry. Contributing to the significance of these losses were certain contracts having occurrence limits that excluded natural perils but not man-made disasters. Had these occurrence limits excluded man-made disasters, St. Paul Re's losses would have been approximately $25 million lower.

We intend to purchase retrocessional reinsurance, which will subject us to credit risk and may become unavailable on acceptable terms.

In order to limit the effect on our financial condition of large and multiple losses, we intend to buy retrocessional reinsurance, which is reinsurance for our own account. From time to time, market conditions have limited, and in some cases have prevented, insurers and reinsurers from obtaining the types and amounts of reinsurance which they consider adequate for their business needs. As a result of the September 11, 2001 terrorist attack, both pricing and terms have become more severe in the retrocessional reinsurance market, which may limit our ability to obtain desired amounts of retrocessional reinsurance at acceptable pricing. If we are unable to obtain retrocessional reinsurance, our financial position and results of operations may be materially adversely affected. Moreover, the September 11, 2001 terrorist attack, threats of further terrorist attacks and the military initiatives and political unrest in Afghanistan, the Middle East and the surrounding regions have adversely affected general economic, market and political conditions, increasing many of the risks of our business. Over time, the rating agencies could re-examine the ratings affecting our industry. We may not be able to obtain our desired amounts of retrocessional reinsurance on acceptable terms. St. Paul Re had retrocessional arrangements through St. Paul, and we may not be able to obtain replacement agreements. Even if we are able to obtain such retrocessional reinsurance, we may not be able to negotiate terms as favorable to us as the terms that St. Paul Re was able to obtain through St. Paul in prior years. Loss of all or portions of our retrocessional coverage could subject us to increased exposure, which could be material.

A retrocessionaire's insolvency or its inability or unwillingness to make payments under the terms of its reinsurance treaty with us could have a material adverse effect on us. Therefore, our retrocessions subject us to credit risk because the ceding of risk to retrocessionaires does not relieve a reinsurer of its liability to the ceding companies.

If we are required to increase our loss reserves, our operating results will be adversely affected.

At any time, our loss reserves may prove to be inadequate to cover our actual losses and benefits experience. To the extent loss reserves may be insufficient to cover actual losses or loss adjustment expenses, we will have to add to these loss reserves and incur a charge to our earnings, which could have a material adverse effect on our financial condition, results of underwriting and cash flows. St. Paul Re has experienced such instances where a re-estimation of loss reserves has proved to be material and, in 2001, recorded a net additional provision of $95 million related to losses incurred in prior years. This provision reflected worse than expected loss emergence in St. Paul Re's North American Property segment, largely driven by certain property business underwritten through its London office, and in the surplus lines business. There can be no assurance that we will not experience adverse development on our loss reserves, including those initially established by St. Paul Re and transferred to us pursuant to the Quota Share Retrocession Agreements. Among the reserves to be transferred to us pursuant to the Quota Share Retrocession Agreements are reserves established by St. Paul Re in respect of flooding in

Europe in August 2002. As discussed under "The Predecessor Business—Recent Developments", these reserves represent St. Paul Re's best current estimate but are subject to both uncertainties and further development, and there can be no assurance that there will not be adverse development on such reserves following the closing of the Equity Public Offering.

Our loss reserves will not represent an exact calculation of liability, but rather will be estimates of the expected cost of the ultimate settlement of losses. We expect that all of our loss reserve estimates will be based on actuarial and statistical projections at a given time, of facts and circumstances known at that time and estimates of trends in loss severity and other variable factors, including new concepts of liability and general economic conditions. Changes in these trends or other variable factors could result in claims in excess of our loss reserves.

Unforeseen losses, the type or magnitude of which we cannot predict, may emerge in the future. These additional losses could arise from changes in the legal environment, catastrophic events, extraordinary events affecting our clients such as reorganizations and liquidations or changes in general economic conditions.

In addition, because we, like other reinsurers, will not separately evaluate each of the individual risks assumed under reinsurance treaties, we will be largely dependent on the original underwriting decisions made by ceding companies. We will be subject to the risk that our ceding companies may not have adequately evaluated the risks to be reinsured and that the premiums ceded to us may not adequately compensate us for the risks we assume.

Under U.S. GAAP, Platinum US, Platinum UK and Platinum Bermuda will not be permitted to establish loss reserves until an event occurs which may give rise to a loss. Once such an event occurs, reserves will be established based upon estimates of the total losses incurred by the ceding insurers and an estimate of the portion of such loss our three operating subsidiaries have reinsured. As a result, only loss reserves applicable to losses incurred up to the reporting date may be set aside, with no allowance for the provision of a contingency reserve to account for expected future losses. Losses arising from future events will be estimated and recognized at the time the loss is incurred and could be substantial.

The property and casualty reinsurance business is historically cyclical, and we expect to experience periods with excess underwriting capacity and unfavorable pricing.

Historically, property and casualty reinsurers have experienced significant fluctuations in operating results. Demand for reinsurance is influenced significantly by underwriting results of primary insurers and prevailing general economic and market conditions, all of which affect cedents' decisions as to the amount or portion of risk that they retain for their own accounts and consequently reinsurance premium rates. The supply of reinsurance is related to prevailing prices, the levels of insured losses and levels of industry surplus which, in turn, may fluctuate in response to changes in rates of return on investments being earned in the reinsurance industry. As a result, the property and casualty reinsurance business historically has been a cyclical industry characterized by periods of intense price competition due to excessive underwriting capacity as well as periods when shortages of capacity permitted favorable premium levels. We can expect to experience the effects of such cyclicality.

The cyclical trends in the industry and the industry's profitability can also be affected significantly by volatile and unpredictable developments, including what management believes to be a trend of courts to grant increasingly larger awards for certain damages, natural disasters (such as catastrophic hurricanes, windstorms, tornadoes, earthquakes and floods), fluctuations in interest rates, changes in the investment environment that affect market prices of and income and returns on investments and inflationary pressures that may tend to affect the size of losses experienced by primary insurance companies. Although market conditions have improved recently with respect to some lines of property and casualty reinsurance, we cannot predict whether market conditions will continue to improve, remain constant or deteriorate. A return to negative market conditions may

affect our ability to write reinsurance at rates that we consider appropriate relative to the risk assumed. If we cannot write property and casualty reinsurance at appropriate rates, our ability to transact reinsurance business would be significantly and adversely affected.

A significant amount of our invested assets will be subject to market volatility.

Our investment portfolio will consist initially of fixed income securities and, in the future, may include marketable equity securities. The fair market value of these assets and the investment income from these assets will fluctuate depending on general economic and market conditions. Fixed income and equity markets have become increasingly volatile in the last year and particularly since the events of September 11, 2001. Because substantially all of our invested assets will be classified as available for sale, changes in the market value of our securities will be reflected in our consolidated balance sheet. In addition, market fluctuations and market volatility will affect the value of our investment portfolio and could adversely affect our liquidity.

Increases in interest rates or fluctuations in currency exchange rates may cause us to experience losses.

Because of the unpredictable nature of losses that may arise under reinsurance policies, our liquidity needs can be expected to be substantial and to arise at any time. The market value of our fixed income investments will be subject to fluctuation depending on changes in various factors, including prevailing interest rates. We expect to hedge our investment portfolio against interest rate risk. Nevertheless, increases in interest rates during periods when we sell fixed income securities to satisfy liquidity needs may result in losses.

Our functional currency will be the U.S. dollar. Our operating currency generally will also be the U.S. dollar. However, the premiums receivable and losses payable in respect of a portion of our business will be denominated in currencies of other countries, principally the industrialized countries. Consequently, we may, from time to time, experience exchange gains and losses that could affect our financial position and results of operations. We do not expect to — and as a practical matter will not be able to — hedge our foreign currency exposure with respect to potential losses until a loss payable in a foreign currency occurs (after which we may match such liability with assets denominated in the same currency or enter into forward purchase contracts for specific currencies). This type of exposure could be substantial. We also do not intend to hedge our non-U.S. dollar currency exposure with respect to premiums receivable, which will be generally collected over the relevant contract term. We expect to exchange non-U.S. dollar denominated premiums upon receipt. We may make foreign currency denominated investments, generally for the purpose of improving overall portfolio yield.

Platinum UK may not be licensed in the United Kingdom at the time of completion of the Equity Public Offering, and any license, if obtained, may be subject to limitations on Platinum UK's operations.

Platinum UK has applied to the Financial Services Authority ("FSA") to write the business conducted by St. Paul Re in the United Kingdom. Platinum UK may not be licensed by the FSA at the time of the completion of the Equity Public Offering. The issuance of the license is at the discretion of the FSA and we may not be able to obtain such a license. St. Paul Re has agreed that it will continue to write reinsurance in the United Kingdom until December 31, 2002, or until Platinum UK is licensed, whichever is earlier. Platinum US will reinsure all such business, together with certain other business written by St. Paul Re UK since January 1, 2002. If Platinum UK does not obtain a license by December 31, 2002, or if the license it obtains contains material limitations, our results of operations could be materially adversely affected, and we may not be able to conduct our U.K. operations in the manner described in this prospectus.

We do not yet have in place a letter of credit facility, and failure to arrange for such a facility could affect our ability to compete for certain business.

We do not yet have in place a letter of credit facility. Failure to arrange for such a facility could adversely affect our ability to write business in certain instances where providing a letter of credit satisfies regulatory requirements permitting the ceding insurer to take statutory credit for the reinsurance.

Platinum Holdings is a holding company and, consequently, it is dependent on the payment of cash dividends or the extension of loans by Platinum US, Platinum UK and Platinum Bermuda.

Platinum Holdings is a holding company that will conduct no reinsurance operations of its own. All operations will be conducted by its wholly owned operating subsidiaries, Platinum US, Platinum UK and Platinum Bermuda. As a holding company, Platinum Holdings' cash flow will consist primarily of dividends, interest and other permissable payments from its subsidiaries. Platinum Holdings will depend on such payments to receive funds for general corporate purposes and to meet its obligations, including the payment of any dividends to its shareholders. Additionally, under the Bermuda Companies Act 1981, Platinum Holdings may declare or pay a dividend only if, among other things, it has reasonable grounds for believing that it is, or would after the payment be, able to pay its liabilities as they become due. For a discussion of the legal limitations on our subsidiaries' ability to pay dividends to Platinum Holdings, see "Management's Discussion and Analysis of Pro Forma Financial Condition and Underwriting Results—Liquidity and Capital Resources—Restrictions on Dividend Payments from Our Operating Subsidiaries" and "Business—Regulation."

The regulatory system under which we operate, and potential changes thereto, could significantly and adversely affect our business.

Platinum Holdings. As the indirect parent of Platinum US, Platinum Holdings will be subject to the insurance holding company laws of Maryland, where Platinum US is organized and domiciled. This law generally requires the insurance holding company and each insurance company directly or indirectly owned by the holding company to register with the Maryland Insurance Commissioner and to furnish annually financial and other information. Generally, all transactions affecting the insurers in the holding company system must be fair and, if material, require prior notice and approval or non-disapproval by the Maryland Insurance Commissioner.

Platinum US. Platinum US is organized and domiciled in Maryland and licensed, authorized or accredited to write reinsurance in 24 states of the United States and is seeking licenses in eight additional states. State insurance laws regulate many aspects of its reinsurance business and state insurance departments in the licensure states will supervise its reinsurance operations. Its principal insurance regulatory authority will be the Maryland Insurance Commissioner. The purpose of the state insurance regulatory statutes is to protect insureds and ceding insurance companies, not our shareholders. Among other things, Maryland regulation requires Platinum US to maintain minimum levels of capital, surplus and liquidity, and imposes restrictions on payment of dividends and distributions. These statutes and regulations may, in effect, restrict the ability of Platinum US to write new business or, as indicated above, distribute funds to Platinum Holdings. In recent years, the state insurance regulatory framework has come under increased federal scrutiny, and some state legislators have considered or enacted laws that may alter or increase state authority to regulate insurance companies and insurance holding companies. Moreover, the National Association of Insurance Commissioners (NAIC), which is an association of the senior insurance regulatory officials of all 50 states and the District of Columbia, and state insurance regulators regularly reexamine existing laws and regulations, interpretations of existing laws and the development of new laws,

which may be more restrictive or may result in higher costs to us than current statutory requirements.

Platinum UK. As described above, upon completion of the Equity Public Offering, Platinum UK may not be authorized by the FSA to conduct insurance business in the United Kingdom. However, if and when Platinum UK becomes an authorized person, its insurance business will be subject to close supervision by the FSA.

We expect the FSA will take a rigorous and proactive approach to its supervisory duties. Among other things, the FSA is seeking to strengthen its requirements for senior management arrangements, systems and controls by requiring insurance companies to maintain risk management teams, to determine and document policies for dealing with risks and to demonstrate how combinations of risks have been aggregated and mitigated. In addition, as part of an initiative to integrate regulation throughout the financial services sector, the FSA intends to place an increased emphasis on risk identification and management in relation to the prudential regulation of insurance businesses in the United Kingdom.

Further, in July 2002 the FSA issued proposals aimed at ensuring adequate diversification of an insurer's or reinsurer's exposures to reinsurers (whether intra- or extra-group). The proposals are currently in draft form. If adopted in their current form, the proposals would limit the extent to which Platinum UK could reinsure business to Platinum Bermuda, and this could adversely affect our earnings. Final rules and guidance based on these proposals are expected to be implemented in 2004. However, substantial compliance with CP143 in its draft form is likely to be an effective condition for receiving FSA authorization. See "Business—Our Business—Regulation—U.K. Regulation—Proposed Limits on Concentration of Reinsurance Exposures."

In addition, given that the framework for supervision of insurance companies in the United Kingdom is largely formed by European Union ("EU") directives (which are implemented by member states through national legislation), changes at the EU level may affect the regulatory scheme under which Platinum UK operates. A general review of EU insurance directives is currently in progress and may lead to changes such as increased minimum capital requirements.

Platinum Bermuda. Platinum Bermuda is a registered Bermuda insurance company and is subject to regulation and supervision in Bermuda. The applicable Bermuda statutes and regulations generally are designed to protect insureds and ceding insurance companies, not our shareholders. Platinum Bermuda is not registered or licensed as an insurance company in any jurisdiction outside Bermuda. Platinum Bermuda will conduct its business through its offices in Bermuda and will not maintain an office, and its personnel will not conduct any insurance activities in the United States or elsewhere. Although Platinum Bermuda does not believe it will be in violation of insurance laws of any jurisdiction outside Bermuda, inquiries or challenges to Platinum Bermuda's insurance activities may still be raised in the future.

Platinum Bermuda may be at a competitive disadvantage in jurisdictions where it is not licensed, authorized or accredited or does not enjoy an exemption from licensing. Platinum Bermuda may not be able to obtain any additional licenses, authorizations or accreditations or may be able to do so only at great cost. Many U.S. jurisdictions do not permit insurance companies to take credit for reinsurance obtained from unlicensed or non-admitted insurers on their U.S. statutory financial statements without appropriate security. We expect that Platinum Bermuda's reinsurance clients will typically require it to post a letter of credit or enter into other security arrangements, which will increase its costs of operations relative to reinsurers not required to do so. If Platinum Bermuda is unable to obtain a letter of credit facility on commercially acceptable terms or is unable to arrange for other types of security, its ability to operate its business may be severely limited.

The offshore insurance and reinsurance regulatory framework recently has become subject to increased scrutiny in many jurisdictions, including in the United States and in various states within

the United States. In the past, there have been congressional and other proposals in the United States regarding increased supervision and regulation of the insurance industry, including proposals to supervise and regulate reinsurers domiciled outside the United States. If Platinum Bermuda were to become subject to any insurance laws and regulations of the United States or any U.S. state, which are generally more restrictive than those applicable to it in Bermuda, at any time in the future, it might be required to post deposits or maintain minimum surplus levels and might be prohibited from engaging in lines of business or from writing specified types of policies or contracts. Complying with those laws could have a material adverse effect on our ability to conduct business or our results of operations.

We will be dependent on the business provided to us by reinsurance brokers and we may be exposed to liability for brokers' failure to make payments to clients for their claims.

We intend to market most of our reinsurance products through reinsurance brokers. The reinsurance brokerage industry generally, and our sources of business specifically, are concentrated. On a pro forma basis, based on net premiums written during the six months ended June 30, 2002, the five brokers from which St. Paul Re derived the largest portions of its business (with the approximate percentage of our business derived from such brokers and their affiliates) are Aon Corporation (25.5%), Marsh & McLennan Companies (20.9%), Benfield Blanch Inc. (19.6%), Willis Group Holdings (9.4%) and Towers Perrin (3.0%). Loss of all or a substantial portion of the business provided by such intermediaries could have a material adverse effect on us. In addition, at least two of these brokers have announced their intention to form new Bermuda reinsurance companies that may compete with us, and these brokers may favor their own reinsurers over other companies, including us.

In accordance with industry practice, we expect to frequently pay amounts owing in respect of claims under our policies to reinsurance brokers, for payment over to the ceding insurers. In the event that a broker fails to make such a payment, depending on the jurisdiction, we may remain liable to the ceding insurer for the deficiency. Conversely, in certain jurisdictions, when premiums for such policies are paid to reinsurance brokers for payment over to us, such premiums will be deemed to have been paid and the ceding insurer will no longer be liable to us for those amounts whether or not actually received by us. Consequently, we will assume a degree of credit risk associated with our brokers during the payment process.

Because we are dependent on certain contractual relationships with St. Paul, our principal shareholder, we may experience conflicts of interest with St. Paul that may be detrimental to our business.

Concurrently with the Equity Public Offering, in return for the Cash Contribution and the contribution of the Transferred Business, we have agreed to issue Common Shares to St. Paul and to grant to St. Paul the St. Paul Option, as described in more detail under "St. Paul Investment and Principal Shareholders." Following the Equity Public Offering and the St. Paul Investment, St. Paul will own % of our Common Shares (which shares will be limited to 9.9% of the voting power of the outstanding Common Shares), and will be able, through exercise in full of the St. Paul Option, to increase its ownership to approximately % of our Common Shares, assuming no exercise of the underwriters' option to purchase additional Common Shares. St. Paul has agreed with us that, prior to any exercise of the St. Paul Option, it will, if necessary, dispose of a sufficient number of Common Shares so that, immediately after exercise of the St. Paul Option, St. Paul will not be a "United States 25% Shareholder" as defined under "Description of Platinum Holdings' Common Shares—Restrictions on Transfer." St. Paul's interest in owning Common Shares may be different from that of other shareholders.

In connection with our formation, we have agreed with St. Paul and certain of its affiliates to enter into, among other things, a Formation and Separation Agreement, Master Services

Agreements, Quota Share Retrocession Agreements, Run-off Services Agreements and Underwriting Management Agreements. These agreements, which we refer to as the "Inception Agreements", will become effective upon the completion of the Equity Public Offering (except the Quota Share Retrocession Agreements which will take effect at 12:01 a.m., on the later of the business day immediately following the date of completion of the Equity Public Offering or October 1, 2002) and will govern our relationship with St. Paul with respect to various intercompany services, which we and St. Paul will provide one another following the completion of the Equity Public Offering. The terms of the Inception Agreements have been negotiated between Platinum and St. Paul but do not necessarily reflect terms that Platinum or St. Paul would agree to with an independent third party. Notwithstanding these contractual relationships, St. Paul (other than as restricted by the non-competition provisions of the Formation and Separation Agreement and of the UK Business Transfer Agreement), and its subsidiaries and affiliates, may from time to time compete with us, including by assisting or investing in the formation of other entities engaged in the insurance and reinsurance businesses. Conflicts of interest could also arise with respect to business opportunities that could be advantageous to St. Paul and any of its subsidiaries or affiliates, on the one hand, and us, on the other hand. Other than as specified in the Inception Agreements, St. Paul is under no obligation to deal with us on any basis other than arm's length or to treat us as a "preferred provider" or grant us any other preferential treatment. St. Paul or its subsidiaries or affiliates have entered, and may enter, into agreements and maintain relationships with numerous companies that may directly compete with us.

Risk Factors Relating to the Units

You will bear the entire risk of a decline in the price of the Common Shares.

The market value of the Common Shares you will purchase on the share purchase date may be materially lower than the price per share that the purchase contract requires you to pay. If the average of the closing price per Common Share over the 20 trading-day period ending on the third trading day immediately preceding the share purchase date is less than $ per share, you will, on the share purchase date, be required to purchase Common Shares at a price per share of $ . Accordingly, a holder of units assumes the entire risk that the market value of the Common Shares may decline and that the decline could be substantial.

You will receive only a portion of any appreciation in the Common Share price.

The aggregate market value of the Common Shares you will receive upon settlement of a purchase contract generally will exceed the stated amount of $25 only if the average of the closing price per Common Share over the 20 trading-day period ending on the third trading day immediately preceding the share purchase date equals or exceeds $ , which is referred to as the "threshold appreciation price." The threshold appreciation price represents an appreciation of % over $ . If the applicable average closing price exceeds $ , which is referred to as the "reference price", but falls below the threshold appreciation price, you will realize no equity appreciation on the Common Shares for the period during which you own a unit. Furthermore, if the applicable average closing price exceeds the threshold appreciation price, the value of the Common Shares you will receive under the purchase contract will be approximately % of the value of the Common Shares you could have purchased with $25 at the time of the ESU Offering. During the period prior to settlement, an investment in the units affords less opportunity for equity appreciation than a direct investment in the Common Shares.

The trading price of the Common Shares and the general level of interest rates and our credit quality will directly affect the trading price for the units.

It is impossible to predict whether the price of the Common Shares or interest rates will rise or fall. Our operating results and prospects and economic, financial and other factors will affect trading prices of the Common Shares and the units. In addition, market conditions can affect the capital markets generally, thereby affecting the price of the Common Shares. These conditions may include the level of, and fluctuations in, the trading prices of stocks generally and sales of substantial amounts of Common Shares in the market after the Equity Public Offering or the perception that those sales could occur. Fluctuations in interest rates may give rise to arbitrage opportunities based upon changes in the relative value of the Common Shares underlying the purchase contracts and of the other components of the units. The arbitrage could, in turn, affect the trading prices of the units.

You may suffer dilution of the Common Shares issuable upon settlement of your purchase contract.

The number of Common Shares issuable upon settlement of your purchase contract is subject to adjustment only for stock splits and combinations, stock dividends and specified other transactions that significantly modify the capital structure of Platinum Holdings. The number of Common Shares issuable upon settlement of each purchase contract is not subject to adjustment for other events, including employee stock option grants, ordinary dividends, offerings of Common Shares for cash, or in connection with acquisitions or other transactions which may adversely affect the price of the Common Shares. The terms of the units do not restrict the ability of Platinum Holdings to offer Common Shares in the future or to engage in other transactions that could dilute the Common Shares. Platinum Holdings has no obligation to consider the interests of the holders of the units in engaging in any such offering or transaction. If Platinum Holdings issues additional Common Shares, that issuance may materially and adversely affect the price of the Common Shares and, because of the relationship of the number of Common Shares holders are to receive on the share purchase date to the price of the Common Shares, such other events may adversely affect the trading price of the units.

You will have no rights as common shareholders but will be subject to all changes with respect to the Common Shares.

Until you acquire Common Shares upon settlement of your purchase contract, you will have no rights with respect to the Common Shares, including voting rights, rights to respond to tender offers and rights to receive any dividends or other distributions on the Common Shares. Platinum Holdings intends to declare and pay quarterly cash dividends beginning in the fourth quarter of 2002. Only holders of Common Shares, not holders of units, will receive such dividends. Upon settlement of your purchase contract, you will be entitled to exercise the rights of a holder of Common Shares only as to actions for which the record date occurs after the settlement date.

Your pledged securities will be encumbered.

Although holders of units will hold beneficial ownership interests in the underlying pledged senior notes or treasury securities, the holders will pledge those securities with the collateral agent to secure their obligations under the related purchase contracts. Therefore, for so long as the purchase contracts remain in effect, holders will not be allowed to withdraw their ownership interest in the pledged senior notes or treasury securities from this pledge arrangement, except upon substitution of other securities as described in this prospectus.

The secondary market for the units may be illiquid.

We are unable to predict how the units will trade in the secondary market or whether that market will be liquid or illiquid. There is currently no secondary market for the units. We have applied to list the normal units for trading on the New York Stock Exchange. We have no obligation or current intention to apply for any separate listing of the stripped units or the senior notes on any stock exchange. We have been advised by the underwriters that they presently intend to make a market for the normal units; however, they are not obligated to do so and any market making may be discontinued at any time without notice. We can give you no assurance as to the liquidity of any market that may develop for the normal units, the stripped units or the senior notes, your ability to sell such securities or whether a trading market, if it develops, will continue. In addition, in the event that sufficient numbers of normal units are converted to stripped units, the liquidity of normal units could be adversely affected. We can give you no assurance that the listing application for normal units will be accepted, or that we will make an application to list the stripped units or senior notes or, if accepted, that the normal units, stripped units or senior notes will not be delisted from the New York Stock Exchange or that trading in the normal units, stripped units or senior notes will not be suspended as a result of elections to create stripped units or recreate normal units through the substitution of collateral that causes the number of these securities to fall below the applicable requirements for listing securities on the New York Stock Exchange.

Delivery of the securities under the pledge agreement is subject to potential delay if Platinum Holdings becomes subject to a bankruptcy proceeding.

Notwithstanding the automatic termination of the purchase contracts, if Platinum Holdings becomes the subject of a case under the federal bankruptcy code, the imposition of an automatic stay under Section 362 of the federal bankruptcy code may delay the delivery to you of your securities being held as collateral under the pledge arrangement and such delay may continue until the automatic stay has been lifted. The automatic stay will not be lifted until such time as the bankruptcy judge agrees to lift it and allows your collateral to be returned to you. Similarly, if Platinum Holdings becomes the subject of winding up proceedings under the Bermuda Companies Act 1981, a delay may result from the automatic stay of proceedings against Platinum Holdings and may continue until the court decides to lift the stay.

Platinum Finance may redeem the senior notes upon the occurrence of a tax event.

Platinum Finance has the option to redeem the senior notes, on not less than 30 days' nor more than 60 days' prior written notice, in whole but not in part, at any time if a tax event occurs and continues under the circumstances described in this prospectus. See "Description of the Senior Notes—Tax Event Redemption." If Platinum Finance exercises this option, the senior notes will be redeemed at the redemption price (described later in this prospectus) plus accrued and unpaid interest, if any, to the date of redemption. If the senior notes are redeemed, Platinum Finance will pay the redemption price, plus accrued and unpaid interest, if any, to the date of redemption, in cash to the holders of ownership interests in the senior notes. If the tax event redemption occurs prior to the earlier of the share purchase date or a successful remarketing of the senior notes, the redemption price payable to you as a holder of the normal units will be distributed to the collateral agent, who in turn will apply an amount equal to the redemption price to purchase a portfolio of zero-coupon U.S. treasury securities on your behalf, and will remit the remainder of the redemption price, if any, to you, and these treasury securities will be substituted for the senior notes as collateral to secure your obligations under the purchase contracts related to the normal units. If your senior notes are not components of normal units, you, rather than the collateral agent, will receive the related redemption payments. We can give you no assurance as to the effect on the market prices for the normal units if we substitute the treasury securities as collateral in place of

any senior notes so redeemed. A tax event redemption will be a taxable event to the holders of the senior notes.

Because Platinum Holdings and Platinum Finance are each holding companies with no operations of their own, Platinum Finance's obligations under the senior notes and Platinum Holdings' obligations under the guarantee and the purchase contracts are effectively subordinated to the debt and other obligations of their respective subsidiaries.

Both Platinum Holdings and Platinum Finance are holding companies with no operations of their own. Platinum Holdings' ability to pay its obligations under the purchase contracts and the guarantee is dependent upon its ability to obtain cash dividends or loans from its subsidiaries. Similarly, Platinum Finance's ability to pay its obligations under the senior notes is dependent upon its ability to obtain cash dividends or loans from its subsidiaries. Platinum Holdings' and Platinum Finance's operating subsidiaries are separate and distinct legal entities and will have no obligation, contingent or otherwise, to pay any dividends or make any other distributions (except for payments required pursuant to the terms of intercompany indebtedness) to Platinum Holdings or Platinum Finance. Various financing arrangements, charter provisions and regulatory requirements may impose certain restrictions on the abilities of Platinum Holdings' and Platinum Finance's subsidiaries to transfer funds to Platinum Holdings and Platinum Finance in the form of cash dividends, loans or advances. See "Risks Related to Our Business—Platinum Holdings is a holding company and, consequently, it is dependent on the payment of cash dividends or the extension of loans by Platinum US, Platinum UK and Platinum Bermuda."

In addition, because Platinum Holdings and Platinum Finance are holding companies, except to the extent that Platinum Holdings or Platinum Finance have priority or equal claims against their subsidiaries as a creditor, Platinum Finance's obligations under the senior notes and Platinum Holdings' obligations under the guarantee and the purchase contracts will be effectively subordinated to the debt and other obligations of their respective subsidiaries because, as the shareholders of their subsidiaries, they will be subject to the prior claims of creditors of their subsidiaries. As of , 2002, Platinum Finance's subsidiaries had approximately $ of aggregate outstanding debt and other obligations, and, as of such date, Platinum Holdings' subsidiaries, excluding Platinum Finance's obligations under the senior notes, had approximately $ of aggregate outstanding debt and other obligations.

Platinum Holdings may defer contract adjustment payments.

Platinum Holdings has the option to defer the payment of all or part of the contract adjustment payments on the purchase contracts forming a part of the units until no later than the share purchase date. However, deferred contract adjustment payments will accrue additional contract adjustment payments at the rate of % per year (compounded quarterly) until paid. If the purchase contracts are terminated due to Platinum Holdings' bankruptcy, insolvency or reorganization, the right to receive contract adjustment payments and deferred contract adjustment payments, if any, will also terminate.

The U.S. federal income tax consequences of the purchase, ownership and disposition of the units are unclear.

No statutory, judicial or administrative authority directly addresses the treatment of the units or instruments similar to the units for U.S. federal income tax purposes. As a result, the U.S. federal income tax consequences of the purchase, ownership and disposition of the units are not entirely clear. In addition, if the senior notes are (as we believe they should be) treated as contingent payment debt instruments, any gain on the disposition of a senior note prior to the date on which the interest rate on the senior note is reset generally should be treated as ordinary interest income;

thus, the ability to offset such interest income with a loss, if any, on a purchase contract may be limited.

Assuming the senior notes are classified as contingent payment debt instruments, you will have to include interest in your taxable income in excess of current cash flows, and gain recognized on your disposition of a senior note will generally be treated as ordinary interest income.

Because of the manner in which the interest rate on the senior notes is reset, we believe the senior notes should be classified as contingent payment debt instruments subject to the "noncontingent bond method" for accruing original issue discount for United States income tax purposes. Assuming the senior notes are so treated, original issue discount will accrue from the issue date of the senior notes and will be included in your gross income for United States income tax purposes on a constant yield-to-maturity basis, regardless of your usual method of tax accounting, and adjustments will be made to reflect actual payments on the senior notes. For all accrual periods ending on or prior to , 2005, and possibly thereafter, the original issue discount that accrues on the senior notes will exceed the stated interest payments on the senior notes. In addition, any gain on the disposition of a senior note before the share purchase date will generally be treated as ordinary interest income, and the ability to offset this interest income with a loss, if any, on a purchase contract may be limited.

The trading price of the senior notes may not fully reflect the value of their accrued but unpaid interest.

The senior notes may trade at a price that does not fully reflect the value of their accrued but unpaid interest. If you dispose of your senior notes between record dates for interest payments, you will be required to include in gross income the daily portions of original issue discount through the date of disposition as ordinary income, and to add this amount to your adjusted tax basis in the senior notes disposed of. To the extent the selling price is less than your adjusted tax basis, you will recognize a loss. Some or all of this loss may be capital loss. The deductibility of capital losses for U.S. federal income tax purposes is subject to certain limitations.

Risks Related to Our Common Shares

There is no prior public market for the Common Shares.

Prior to the Equity Public Offering, there has been no public trading market for the Common Shares. If an active trading market does not develop and continue upon completion of the Equity Public Offering, the Common Shares may decline, even below the initial public offering price.

It may be difficult to enforce service of process and enforcement of judgments against us and our officers and directors.

We are a Bermuda company and certain of our officers and directors will be residents of various jurisdictions outside the United States. A substantial portion of our assets and our officers and directors, at any one time, are or may be located in jurisdictions outside the United States. Although we have irrevocably appointed CT Corporation System as an agent in New York, New York to receive service of process with respect to actions against us arising out of violations of the U.S. federal securities laws in any federal or state court in the United States relating to the transactions covered by this prospectus, it may be difficult for investors to effect service of process within the United States on our directors and officers who reside outside the United States or to enforce against us or our directors and officers judgments of U.S. courts predicated upon civil liability provisions of the U.S. federal securities laws.

Future sales of Common Shares may affect their market price.

Sales of substantial amounts of the Common Shares in the public market following the Equity Public Offering and the St. Paul Investment, or the perception that such sales could occur, could adversely affect the market price of the Common Shares and may make it more difficult for us to sell our equity securities in the future, or for shareholders to sell their Common Shares, at a time and price which they deem appropriate. Upon completion of the Equity Public Offering and the St. Paul Investment, there will be Common Shares outstanding. In the event the underwriters' option to purchase an additional 5,100,000 Common Shares is exercised, St. Paul will be issued (as part of the consideration for the Cash Contribution and the Transferred Business) in the aggregate up to an additional shares in order to maintain the proportionate initial share ownership in the Company it obtained prior to the underwriters exercising their option to purchase additional Common Shares. As a result, if the underwriters' option to purchase additional Common Shares is exercised in full and these additional shares are issued to St. Paul, there would be Common Shares outstanding upon completion of the Equity Public Offering and the St. Paul Investment. Furthermore, upon the settlement of the purchase contracts forming part of the equity security units on 2005, an additional number of Common Shares, to be determined based upon a settlement rate, will be sold to the holders of the equity security units. In that event, St. Paul may exercise its pre-emptive rights to purchase a corresponding number of Common Shares to maintain its proportionate ownership interest in Platinum Holdings. The Common Shares sold in the Equity Public Offering and issuable to the holders of equity security units on , 2005 will be freely tradeable without restriction or future registration under the Securities Act of 1933, as amended (the "1933 Act"), by persons other than "affiliates" of the Company. The Common Shares issued in the St. Paul Investment, the Common Shares issuable pursuant to the St. Paul Option and the Common Shares St. Paul may purchase upon the settlement of the purchase contracts forming part of the equity security units will be "restricted securities" within the meaning of the 1933 Act and may not be sold in the absence of registration under the 1933 Act or an exemption therefrom. St. Paul has been granted rights to require the Company to register the Common Shares issued to St. Paul pursuant to the St. Paul Investment and the St. Paul Option, upon the settlement of the purchase contracts forming part of the equity security units on , 2005, and otherwise acquired by it. Pursuant to a lock-up agreement, each of the Company and St. Paul and the Company's officers and directors has agreed that for a period of 180 days from the closing date of the Equity Public Offering it will not, without the prior written consent of Goldman, Sachs & Co., sell, offer to sell, contract to sell or otherwise dispose of any Common Shares or any other securities convertible into or exercisable or exchangeable for any Common Shares or grant options to purchase any Common Shares subject to certain limited exceptions. For a description of the St. Paul Investment, see "St. Paul Investment and Principal Shareholders". For a description of St. Paul's pre-emptive rights, see "Certain Relationships and Related Transactions—Formation and Separation Agreement—Pre-emptive Rights."

There are limitations on the ownership, transfers and voting rights of our Common Shares.

Under our bye-laws, our directors are required to decline to register any transfer of Common Shares that would result in a person (or any group of which such person is a member), beneficially owning, directly or indirectly, 10% or more of the voting shares, or in the case of St. Paul and its subsidiaries beneficially owning, directly or indirectly, 25% or more of such shares, or 25% or more of the total combined value of our issued shares. Similar restrictions apply to our ability to issue or repurchase shares. The directors also may, in their discretion, decline to register the transfer of any shares if they have reason to believe (1) that the transfer may lead to adverse tax or regulatory consequences in any jurisdiction or (2) that the transfer would violate the registration requirements of the U.S. federal securities laws or of any other jurisdiction. These restrictions would apply to a

transfer of shares even if the transfer has been executed on the New York Stock Exchange. A transferor of Common Shares will be deemed to own those shares for dividend, voting and reporting purposes until a transfer of those Common Shares has been registered on our register of shareholders. We are authorized to request information from any holder or prospective acquiror of Common Shares as necessary to give effect to the transfer, issuance and repurchase restrictions referred to above, and may decline to effect any transaction if complete and accurate information is not received as requested.

In addition, our bye-laws generally provide that any person (or any group of which such person is a member) beneficially owning, directly or indirectly, shares carrying 10% or more of the total voting rights attached to all of our outstanding voting shares, will have the voting rights attached to its issued shares reduced so that it may not exercise 10% or more of such total voting rights. Because of the attribution provisions of the U.S. Internal Revenue Code of 1986, as amended (the "Code"), and the rules of the Securities and Exchange Commission (the "SEC") regarding determination of beneficial ownership, this requirement may have the effect of reducing the voting rights of a shareholder whether or not such shareholder directly holds 10% or more of our Common Shares. Further, the directors have the authority to require from any shareholder certain information for the purpose of determining whether that shareholder's voting rights are to be reduced. Failure to respond to such a notice, or submitting incomplete or inaccurate information, gives the directors (or their designee) discretion to disregard all votes attached to that shareholder's Common Shares. See "Description of Platinum Holdings' Common Shares."

The insurance law of Maryland prevents any person from acquiring control of us or of Platinum US unless that person has filed a notification with specified information with the Maryland Insurance Commissioner and has obtained his prior approval. Under the Maryland statute, acquiring 10% or more of the voting stock of an insurance company or its parent company is presumptively considered a change in control, although such presumption may be rebutted. Accordingly, any person who acquires, directly or indirectly, 10% or more of the voting securities of Platinum Holdings without the prior approval of the Maryland Insurance Commissioner will be in violation of this law and may be subject to injunctive action requiring the disposition or seizure of those securities by the Maryland Insurance Commissioner or prohibiting the voting of those securities and to other actions determined by the Maryland Insurance Commissioner. In addition, many U.S. state insurance laws require prior notification of state insurance departments of a change in control of a non-domiciliary insurance company doing business in that state. While these pre-notification statutes do not authorize the state insurance departments to disapprove the change in control, they authorize regulatory action in the affected state if particular conditions exist such as undue market concentration. Any future transactions that would constitute a change in control of Platinum Holdings may require prior notification in those states that have adopted preacquisition notification laws.

Common Shares may be offered or sold in Bermuda only in compliance with the provisions of the Investment Business Act 1998 of Bermuda. In addition, sales of Common Shares to persons resident in Bermuda for Bermuda exchange control purposes may require the prior approval of the Bermuda Monetary Authority. Consent under the Exchange Act of 1972 (and regulations thereunder) has been obtained from the Bermuda Monetary Authority for the issue and transfer of the Common Shares being offered pursuant to this offering and between non-residents of Bermuda for exchange control purposes, provided our Common Shares remain listed on an appointed stock exchange, which includes the New York Stock Exchange. This prospectus will be filed with the Registrar of Companies in Bermuda in accordance with Bermuda law. In giving such consent, and in accepting this prospectus for filing, neither the Bermuda Monetary Authority nor the Registrar of Companies accepts any responsibility for the financial soundness of any proposal or for the correctness of any of the statements made or opinions expressed herein.

The Financial Services and Markets Act 2000 ("FSMA") regulates the acquisition of "control" of any U.K. insurance company authorized under FSMA. Any company or individual that (together with its or his associates) directly or indirectly acquires 10% or more of the shares in the parent company of a U.K. authorized insurance company, or is entitled to exercise or control the exercise of 10% or more of the voting power in such a parent company, would be considered to have acquired "control" for the purposes of the relevant legislation, as would a person who had significant influence over the management of such parent company by virtue of his shareholding in it. A purchaser of more than 10% of the Common Shares would therefore be considered to have acquired "control" of Platinum UK.

Under FSMA, any person proposing to acquire "control" over a U.K. authorized insurance company must give prior notification to the FSA of his intention to do so. The FSA would then have three months to consider that person's application to acquire "control." In considering whether to approve such application, the FSA must be satisfied both that the acquirer is a fit and proper person to have such "control" and that the interests of consumers would not be threatened by such acquisition of "control." Failure to make the relevant prior application would constitute a criminal offense.

The foregoing provisions of our bye-laws and legal restrictions will have the effect of rendering more difficult or discouraging unsolicited takeover bids from third parties or the removal of incumbent management.

Your investment could be materially adversely affected if we are deemed to be engaged in business in the United States.

Platinum Holdings and Platinum Bermuda are Bermuda companies, Platinum UK is a U.K. company, and Platinum Ireland is an Irish company. We believe that Platinum Holdings, Platinum UK, Platinum Bermuda and Platinum Ireland will each operate in such a manner that none of these companies will be subject to U.S. tax (other than U.S. excise tax on reinsurance premiums and withholding tax on certain investment income from U.S. sources) because they will not be engaged in a trade or business in the United States. Nevertheless, because definitive identification of activities which constitute being engaged in a trade or business in the United States is not provided by the Code or regulations or court decisions, the U.S. Internal Revenue Service (the "IRS") might contend that any of Platinum Holdings, Platinum UK, Platinum Bermuda or Platinum Ireland are/is engaged in a trade or business in the United States. If Platinum Holdings, Platinum UK, Platinum Bermuda or Platinum Ireland were engaged in a trade or business in the United States, and if Platinum UK, Platinum Bermuda or Platinum Ireland were to qualify for benefits under the applicable income tax treaty with the United States, but such trade or business were attributable to a "permanent establishment" in the United States, Platinum Holdings, Platinum UK, Platinum Bermuda and/or Platinum Ireland would be subject to U.S. tax at regular corporate rates on the income that is effectively connected with the U.S. trade or business, plus an additional 30% "branch profits" tax on such income remaining after the regular tax in certain circumstances, in which case our earnings and your investment could be materially adversely affected.

If you acquire 10% or more of the Common Shares, CFC rules may apply to you.

Under the Code, each "United States shareholder" of a foreign corporation that is a "controlled foreign corporation" ("CFC") for an uninterrupted period of 30 days or more during a taxable year, and who owns shares in the CFC on the last day of the CFC's taxable year must include in its gross income for U.S. federal income tax purposes its pro rata share of the CFC's "subpart F income", even if the subpart F income is not distributed. For these purposes, any U.S. person who owns, directly or indirectly through a foreign entity or through the constructive ownership rules of the Code, 10% or more of the total combined voting power of all classes of stock of a foreign corporation will be considered to be a "United States shareholder." In general, a foreign insurance company such as Platinum UK or Platinum Bermuda is treated as a CFC only if such "United States shareholders"

collectively own more than 25% of the total combined voting power or total value of our stock. St. Paul will, for federal income tax purposes, actually or constructively, own approximately % of the Common Shares upon completion of the Equity Public Offering, assuming no exercise of the underwriters' option to purchase additional Common Shares, although, pursuant to our bye-laws, the combined voting power of these shares is limited to approximately 9.9% of the combined voting power of all Common Shares. We expect that, because of the limitations on concentration of voting power of our Common Shares, the dispersion of our share ownership among holders other than St. Paul, the provisions for directed voting on matters requiring action by the shareholders of Platinum Bermuda, Platinum Ireland and Platinum UK (including the election of the members of their boards of directors) and the restrictions on transfer, issuance or repurchase of the Common Shares, you will not be subject to treatment as a "United States shareholder" of a CFC. In addition, because under our bye-laws no single shareholder (including St. Paul) is permitted to exercise, after taking into account Common Shares constructively owned or held indirectly through a foreign entity, as much as 10% of the total combined voting power of the Company, you should not be viewed as a "United States shareholder" of a CFC for purposes of these rules. There can be no assurance, however, that these rules will not apply to you. Accordingly, U.S. persons who might, directly, or indirectly through a foreign entity or through the constructive ownership rules of the Code, acquire or be deemed to acquire 10% or more of our Common Shares should consider the possible application of the CFC rules.

Under certain circumstances, you may be required to pay taxes on your pro rata share of Platinum Bermuda's and Platinum UK's related person insurance income.

If Platinum UK's or Platinum Bermuda's related person insurance income ("RPII") were to equal or exceed 20% of Platinum UK's or Platinum Bermuda's gross insurance income in any taxable year and direct or indirect insureds (and persons related to such insureds) own (or are treated as owning directly or indirectly) 20% or more of the voting power or value of the shares of Platinum UK or Platinum Bermuda, a U.S. person who owns the Common Shares of Platinum Holdings directly or indirectly on the last day of the taxable year would be required to include in its income for U.S. federal income tax purposes the shareholder's pro rata share of Platinum UK's or Platinum Bermuda's RPII for the entire taxable year, determined as if such RPII were distributed proportionately to such United States shareholders at that date regardless of whether such income is distributed. In addition, U.S. tax-exempt organizations would be required to treat RPII as unrelated business taxable income if Platinum UK's or Platinum Bermuda's RPII equaled or exceeded 20% of Platinum UK's or Platinum Bermuda's gross insurance income in any taxable year. The amount of RPII earned by Platinum UK or Platinum Bermuda (generally, premium and related investment income from the direct or indirect insurance or reinsurance of any direct or indirect U.S. shareholder of Platinum UK or Platinum Bermuda or any person related to such shareholder, including St. Paul) will depend on a number of factors, including the geographic distribution of Platinum UK or Platinum Bermuda's business and the identity of persons directly or indirectly insured or reinsured by Platinum UK or Platinum Bermuda. Some of the factors which determine the extent of RPII in any period may be beyond Platinum UK's or Platinum Bermuda's control. Consequently, there can be no assurance that Platinum UK's or Platinum Bermuda's RPII will not equal or exceed 20% of its gross insurance income in any taxable year and that ownership of its shares by direct or indirect insureds and related persons will not equal or exceed the 20% threshold described above.

The RPII rules provide that if a shareholder who is a U.S. person disposes of shares in a foreign insurance corporation that has RPII (even if the amount of RPII is less than 20% of the corporation's gross insurance income) and in which U.S. persons own 25% or more of the shares, any gain from the disposition will generally be treated as ordinary income to the extent of the shareholder's share of the corporation's undistributed earnings and profits that were accumulated during the period that the shareholder owned the shares (whether or not such earnings and profits are attributable to RPII). In addition, such a shareholder will be required to comply with certain

reporting requirements, regardless of the amount of shares owned by the shareholder. These rules should not apply to dispositions of Common Shares because Platinum Holdings will not itself be directly engaged in the insurance business and because proposed U.S. Treasury regulations appear to apply only in the case of shares of corporations that are directly engaged in the insurance business. However, the IRS might interpret the proposed regulations in a different manner and the applicable proposed regulations may be promulgated in final form in a manner that would cause these rules to apply to dispositions of our Common Shares.

Changes in U.S. federal income tax law could materially adversely affect shareholders' investment.

Recently proposed U.S. legislation targeting so-called "inversion transactions" would under certain circumstances treat a foreign corporation as a U.S. corporation for U.S. federal income tax purposes and under other circumstances would require obtaining IRS approval of the terms of related-party transactions. In addition, interest deductions on debt borrowed from or guaranteed by a related non-U.S. party would be more severely limited than under existing so-called "earnings stripping" provisions.

The Company and its subsidiaries would appear generally not to be subject to the proposed legislation directed at inversion transactions as currently drafted. However, the proposed changes to the earnings stripping provisions could impose significant restrictions on the amount of interest deductible by the Company's U.S. subsidiaries on certain debt owed to or guaranteed by related non-U.S. parties (including the surplus note to be issued by Platinum US to Platinum Ireland and the senior notes to be issued by Platinum Finance and guaranteed by the Company). We cannot predict whether the proposed legislation (or any similar legislation) will be enacted or, if enacted, what the specific provisions or the effective date of any such legislation would be, or whether it would have any effect on the Company or its subsidiaries.

If the inversion legislation were enacted and made applicable to the Company and its subsidiaries, we could be treated as a U.S. corporation. If we were treated as a U.S. corporation, we would be subject to taxation in the United States at regular corporate rates, in which case our earnings and shareholders' investments would be materially adversely affected. In addition, the U.S. tax consequences to our shareholders would be significantly different from those described below in "U.S. Federal Income Tax Consequences—Common Shares." If the inversion legislation were to so apply, however, the earnings stripping provisions would, if also enacted, be inapplicable to the extent the non-U.S. related-party lender or guarantor was treated as a U.S. corporation under the inversion legislation. Prospective investors should consult their own tax advisors regarding the U.S. tax consequences to them, in their particular circumstances, if we were treated as a U.S. corporation.

In addition, a bill has been introduced in the House of Representatives that would effectively deny—by deferring for an extended period—a U.S.-based insurer or reinsurer that reinsures or retrocedes a portion of its risk with or to a related foreign-based reinsurer or retrocedent in a low tax rate jurisdiction (such as Bermuda) a deduction for the portion of the insurance or reinsurance premium ceded to the related foreign-based party, thereby effectively subjecting all of the premium income to U.S. tax. Moreover, a senior official of the U.S. Treasury Department has also identified related party reinsurance arrangements as an area that requires study because it may result in an inappropriate shift of income from a U.S. corporate group to its foreign affiliates, implying that, were that to be the conclusion of such a study, legislation, possibly in the form of legislation imposing a premium-based tax, might be needed. Enactment of legislation of either type could materially adversely affect our earnings and shareholders' investments.

We may become subject to taxes in Bermuda after 2016.

We have received a standard assurance from the Bermuda Minister of Finance, under Bermuda's Exempted Undertakings Tax Protection Act 1966, that if any legislation is enacted in Bermuda that would impose tax computed on profits or income, or computed on any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance tax, then the imposition of any such tax will not be applicable to us or to any of our operations or our shares, debentures or other obligations until March 28, 2016. Consequently, if our Bermuda tax exemption is not extended past March 28, 2016, we may be subject to any Bermuda tax after that date. For more information on Bermuda taxation of Platinum Holdings and Platinum Bermuda, see "U.S. Federal Income Tax Consequences."

Bermuda could be subject to sanctions by a number of multinational organizations which could adversely affect Bermuda companies.

A number of multinational organizations, including the EU, the Organization for Economic Cooperation and Development ("OECD"), including its Financial Action Task Force, and the Financial Stability Forum have all recently identified certain countries as blocking information exchange, engaging in harmful tax competition or not maintaining adequate controls to prevent corruption, such as money laundering activities. Recommendations to limit such harmful practices are under consideration by these organizations, and a recent report published on November 27, 2001 by the OECD contains an extensive discussion of specific recommendations. The OECD has threatened non-member jurisdictions that do not agree to cooperate with the OECD with punitive sanctions by OECD member countries. It is unclear what these sanctions will be and if they will be imposed. Bermuda has committed to a course of action to enable compliance with the requirements of these multinational organizations. No assurance can be given, however, that the action taken by Bermuda would be sufficient to preclude all effects of the measures or sanctions described above, which if ultimately adopted could adversely affect Bermuda companies such as Platinum Holdings and Platinum Bermuda.

Some of the statements contained in this prospectus, including those using words such as "believes", "expects", "intends", "estimates", "projects", "predicts", "assumes", "anticipates", "plans" and "seeks", and variations thereof, are forward-looking statements. Forward-looking statements are statements other than of historical fact. Since Platinum has no history of operations, most of the statements relating to Platinum and its business, including statements relating to its competitive strengths and business strategies, are forward-looking statements. These forward-looking statements are subject to risks and uncertainties and are not a guarantee of future performance. In light of these risks and uncertainties, actual results may differ materially from those suggested by the forward-looking statements for various reasons, including those discussed in this section. We can provide no assurance that we will be able to conduct our business successfully, execute our strategies effectively or achieve our financial and other objectives.

As with any equity-related investment, the price of the equity security units may fluctuate widely depending on many factors, including:

•: the perceived prospects of our business in particular and the insurance, asset management, securities and financial services industries generally;
•: differences between our actual financial and operating results and those expected by investors and analysts;
•: changes in analysts' recommendations or projections;
•: changes in general economic, market and political conditions; and
•: broad market and interest rate fluctuations.

USE OF PROCEEDS

The net proceeds to be received by Platinum Finance from the ESU Offering, after deducting the underwriters' discount and estimated expenses, are estimated to be approximately $ million, or $ million if the underwriters' option to purchase additional units is exercised in full. We anticipate that approximately $20 million of the net proceeds, or $23 million if the underwriters exercise the over-allotment option in full, will be retained by Platinum Finance and the rest will be contributed to its wholly owned subsidiary, Platinum US. Platinum Finance intends to use the retained portion of the net proceeds of the ESU Offering to fund the interest payments on the senior notes payable on or prior to the share purchase date. Assuming the Common Shares are offered at an initial public offering price of $23 per Common Share (the midpoint of the range at which Platinum Holdings proposes to offer the Common Shares), the net proceeds from the Equity Public Offering are estimated to be between approximately $ (assuming no exercise of the underwriters' option to purchase additional Common Shares) and $ (assuming full exercise of the underwriters' option to purchase additional Common Shares). The Cash Contribution will result in additional proceeds of between $ million and $ million.

DILUTION

If you purchase units in this offering and hold them on the share purchase date, you will acquire Common Shares on that date and may experience dilution of your investment in Platinum Holdings. Net tangible book value per Common Share represents the amount of tangible assets less total liabilities, divided by the number of Common Shares outstanding. Dilution in net tangible book value per Common Share represents the difference between the amount per Common Share that you will pay on the share purchase date, if you purchase units in this offering and hold them on that date, for Common Shares of Platinum Holdings and the net tangible book value per Common Share, immediately after the Equity Public Offering but giving effect to our sale of the Common Shares pursuant to the purchase contracts included in the units. Since we cannot predict the net tangible book value the Common Shares will have when you purchase them on the share purchase date, we present here pro forma calculations of the dilution that would occur if the net tangible book value of the Common Shares on that date were the same as it would have been on June 30, 2002 had all the transactions referred to below occurred on that date. In addition, since the number and price of Common Shares to be purchased pursuant to the purchase contract included in each unit, or settlement rate, depends on the market value of the Common Shares prior to the share purchase date, we present these pro forma calculations for the minimum and maximum prices per Common Share to be purchased pursuant to the purchase contracts.

As described under "Description of the Equity Security Units—Description of the Purchase Contracts", the settlement rate will be $25, which is the stated amount per equity security unit, divided by (a) the reference price if the applicable market value is less than or equal to the reference price, (b) the applicable market value if the applicable market value is less than the threshold appreciation price but greater than the reference price, or (c) the threshold appreciation price if the applicable market value is equal to or greater than the threshold appreciation price. The applicable market value means the average of the closing price per Common Share on each of the 20 consecutive trading days ending on the third trading day immediately prior to the share purchase date. For purposes of this presentation, we assume that the reference price will equal the price per Common Share in the Equity Public Offering and that the threshold appreciation price will equal % of the reference price.

Because St. Paul will contribute the Cash Contribution and the Transferred Business to Platinum Holdings in return for its Common Shares and the St. Paul Option, and because Platinum Holdings will record the assets so contributed at their net book value, the initial public offering price per Common Share, as well as the price per Common Share which holders of the units will pay on the share purchase date, are higher than Platinum Holdings' pro forma net tangible book value per share as of June 30, 2002.

After giving effect to (1) St. Paul's Cash Contribution ranging from $ million to $ million and its contribution of the Transferred Business in return for Common Shares and the St. Paul Option, (2) Platinum Holdings' sale of (a) 34,000,000 Common Shares in the Equity Public Offering at an assumed initial public offering price of $23.00 per Common Share (the mid-point of the range at which Platinum Holdings proposes to offer these shares), and (b) $125 million stated amount of equity security units in this offering, after deduction of underwriting discounts and commissions and estimated formation, organization and offering expenses payable by us, resulting in net proceeds to us from both offerings of approximately $ million, and (3) Platinum Holdings' sale of the Common Shares pursuant to the share purchase contracts included in the units, Platinum Holdings' pro forma net tangible book value as of June 30, 2002 would have been approximately $ million to $ million, or $ to $ per Common Share. Depending on the settlement rate of the units and based on the assumptions outlined above, this represents an immediate dilution in pro forma net tangible book value of approximately $ to $ per equity security

unit to purchasers in this offering. For purposes of the following tables, we assume the St. Paul Cash Contribution will be at the midpoint of the range.

	Applicable Market Value
	Less than or equal to $23.00 per Share		Equal to or greater than $ per Share
St. Paul Cash Contribution (in millions)	$		$
Assumed price per Common Share pursuant to the purchase contracts included in the units on share purchase date	$	23.00	$
Net tangible book value per Common Share after this offering

Pro forma net tangible book value dilution per Common Share to investors in this offering	$		$

As Platinum Holdings is newly formed, its net tangible book value before the Equity Public Offering, this offering and the St. Paul Investment was $120,000 as of June 30, 2002.

The following tables set forth as of June 30, 2002 the total consideration paid and the average price per Common Share paid or to be paid by St. Paul, by investors in the Equity Public Offering and by investors in this offering, before deducting underwriting discounts and commissions and estimated offering expenses of $ per Common Share and $ per equity security unit payable by us related to shares and units purchased by investors, assuming the Equity Public Offering is priced at the midpoint of the range at which Platinum Holdings proposes to offer the Common Shares and that the applicable market value is as indicated.

Applicable Market Value less than or equal to $23.00 per Share

	Common Shares Purchased			Pro Forma Total Consideration
	Common Shares Purchased			Pro Forma Total Consideration				Average Price Per Common Share
	Number	Percent		Amount		Percent		Average Price Per Common Share
St. Paul			%	$			%	$
Equity Public Offering Investors	34,000,000		%		782,000,000		%	$	23.00
ESU Offering Investors			%		125,000,000		%	$	23.00

Total		100.0	%	$		100.0	%	$

Applicable Market Value equal to or greater than $ per Share

	Common Shares Purchased			Pro Forma Total Consideration
	Common Shares Purchased			Pro Forma Total Consideration				Average Price Per Common Share
	Number	Percent		Amount		Percent		Average Price Per Common Share
St. Paul			%	$			%	$
Equity Public Offering Investors	34,000,000		%		782,000,000		%	$	23.00
ESU Offering Investors			%		125,000,000		%	$

Total		100.0	%	$		100.0	%	$

The above tables do not include Common Shares issuable upon (1) exercise of the underwriters' option to purchase additional Common Shares in the Equity Public Offering and the concurrent issuance to St. Paul of additional Common Shares to maintain its proportionate share

ownership immediately following the Equity Public Offering, (2) the St. Paul Option, (3) options to be issued to our management and other employees pursuant to our employee compensation plans or (4) settlement of the purchase contracts contained in the equity security units, if any, issued upon exercise of the underwriters' option to purchase additional units in this offering. Including the underwriters' option to purchase additional shares in the Equity Public Offering (and the issuance to St. Paul of additional shares to maintain its ownership level), St. Paul's contribution would be for an average price of from $ to $ per share.

DIVIDEND POLICY

The Company intends to declare and pay quarterly cash dividends beginning with the first quarter of 2003. The declaration and payment of dividends will be at the discretion of the Board of Directors of the Company but will be prohibited if certain contract adjustment payments in respect of the equity security units are deferred, and will depend upon our results of operations and cash flows, the financial position and capital requirements of Platinum US, Platinum UK and Platinum Bermuda, general business conditions, legal, tax and regulatory restrictions on the payment of dividends and other factors the Board of Directors of the Company deems relevant. While the Company is not itself subject to any significant legal prohibitions on the payment of dividends, Platinum US will be subject to regulatory constraints imposed by Maryland insurance law, Platinum UK will be subject to regulatory constraints imposed by U.K. insurance law, Platinum Ireland will be subject to constraints imposed by Irish law, and Platinum Bermuda will be subject to regulatory constraints imposed by Bermuda insurance law, which affect their ability to pay dividends to the Company. See "Business—Our Business—Regulation." Accordingly, there is no requirement or assurance that dividends will be declared or paid in the future.

CAPITALIZATION

The following table sets forth the capitalization of the Company as of June 30, 2002 and as adjusted to give effect to the Equity Public Offering based on an assumed initial public offering price in the Equity Public Offering of $23 per Common Share (the midpoint of the range at which Platinum Holdings proposes to offer the Common Shares) and a Cash Contribution of $ million (the midpoint of the $ million to $ million range for the Cash Contribution), as well as the ESU Offering. This table assumes no exercise by the underwriters of their options to purchase up to 5,100,000 additional Common Shares or to purchase up to $18.75 million of additional equity security units in the ESU Offering.

		Actual		As Adjusted for Equity Public Offering and Cash Contribution		As Adjusted for ESU Offering			As Adjusted for Equity Public Offering, Cash Contribution and ESU Offering
Debt obligations		$	—	$	—	$	125,000,000		$	125,000,000
Shareholders' equity
	Preferred Shares, par value $0.01 per share (25,000,000 shares authorized, as adjusted; none outstanding)		—		—		—			—
	Common Shares, par value $0.01 per share (135,000,000 shares authorized; 200,000,000 shares authorized, as adjusted; 1,200,000 shares outstanding; shares outstanding, as adjusted)		120,000
	Additional paid-in capital		—				(	)⁽¹⁾
	Retained earnings		—		—

Total shareholders' equity			120,000

	Total capitalization	$	120,000	$		$			$

(1): Reflects an adjustment of approximately $ million representing the present value of the contract adjustment payments payable in connection with the purchase contracts contained in the equity security units.

RATIO OF EARNINGS TO FIXED CHARGES

The following table sets forth Platinum Holdings' ratio of earnings to fixed charges for the years and the period indicated:

		Year Ended December 31,
	Six Months Ended June 30, 2002	Year Ended December 31,
	Six Months Ended June 30, 2002	2001	2000	1999	1998	1997
Ratio of earnings to fixed charges(1)	—	—	—	—	—	—

(1): For the period from April 24, 2002 (date of inception of Platinum Holdings) through June 30, 2002, Platinum Holdings did not generate earnings or fixed charges, and therefore a ratio of earnings to fixed charges is not meaningful. For the years 1997 to 2001, St. Paul Re was the predecessor to Platinum Holdings. Since a complete income statement does not exist for St. Paul Re for those years, a ratio of earnings to fixed charges is not meaningful.

Earnings consist of income from continuing operations before income taxes plus fixed charges, net of capitalized interest. Fixed charges consist of interest expense before reduction for capitalized interest and one-third of rental expense, which is considered to be representative of an interest factor.

PRO FORMA FINANCIAL INFORMATION

•: Platinum's pro forma combined statement of underwriting results includes premium and loss development on business entered into prior to January 1, 2002. Under the Quota Share Retrocession Agreements, we are assuming no premium or loss development on business entered into prior to January 1, 2002. Therefore, our reported premiums written and earned and reported losses and loss adjustment expenses in our initial years of operation could be substantially lower than as presented in Platinum's pro forma combined statement of underwriting results. As such, our reported results in our initial years of operation will not be subject to prior year development for periods prior to January 1, 2002.
•: Following the Equity Public Offering, we will report underwriting results under the Quota Share Retrocession Agreements for the period prior to the later of the business day immediately after the date of completion of the Equity Public Offering or October 1, 2002 based on the application of retroactive reinsurance accounting, resulting in the premiums earned and losses incurred by St. Paul during such period being excluded from our statement of underwriting results. Due to this exclusion, following the Equity Public Offering, our reported 2002 premiums written and earned and our net underwriting results in 2002 could be substantially different than as presented in Platinum's pro forma combined statement of underwriting results.
•: Platinum's pro forma consolidated balance sheet reflects the inception of the Quota Share Retrocession Agreements assuming transferred balances as of June 30, 2002. Platinum's actual consolidated balance sheet will report transferred amounts determined as of 12:01 a.m., on the later of the business day immediately after the date of completion of the Equity Public Offering or October 1, 2002. Accordingly, underwriting gain or loss with respect to the Assumed Reinsurance Contracts for the period from January 1, 2002 through such date will be retained by St. Paul.
•: Although we expect to continue to be afforded the benefits of most of St. Paul Re's retrocessional reinsurance program through their expiration during 2002, we may enter into retrocessional reinsurance contracts with significantly different terms and conditions from those that have been made available to us from St. Paul Re and which form the basis of our initial operations.
•: The additional and reinstatement premiums recorded in 2001 by St. Paul Re's Finite Risk operating segment were primarily caused by losses relating to the September 11, 2001 terrorist attack. These additional and reinstatement premiums were unusually high and not necessarily indicative of the recurring premium volume we expect to write in that business segment.
•: Platinum's pro forma financial statements continue to reflect the discounting of the liability for certain Assumed Reinsurance Contracts based on our current intention to make arrangements to permit such discounting. If we do not put such arrangements in place, reinsurance contracts of a similar type entered into in the future would be reported on an undiscounted basis.

Pro Forma Consolidated Balance Sheet

We have prepared our unaudited pro forma consolidated balance sheet as of June 30, 2002 to reflect our initial capitalization in the amount of $120,000 and adjusted to reflect, among other things:

•: amounts reflecting (a) the receipt of approximately $735 million, representing the estimated net proceeds from the Equity Public Offering based on an assumed initial public offering price of $23 per Common Share (the midpoint of the range at which Platinum Holdings proposes to offer the Common Shares), without giving effect to any exercise of the underwriters' option to purchase additional Common Shares, (b) the redemption of the Common Shares that were issued at inception and capital contributed prior to the Equity Public Offering, and (c) the payment of certain formation and organization expenses as discussed in Note 2 and Note 12 on pages F-5 and F-11 of this prospectus. It is further assumed that the net proceeds from the Equity Public Offering will be invested in long-term, taxable fixed income securities;
•: amounts representing the receipt of St. Paul's Cash Contribution and the contribution of the Transferred Business at historical cost in exchange for the issuance of Common Shares and the St. Paul Option. Amounts related to net tangible assets contributed to Platinum by St. Paul are recorded at St. Paul's book value as of June 30, 2002. Assets include the net assets of Platinum US (which reflect a dividend of $10 million to be made to United States Fidelity and Guaranty Company, the parent of Platinum US, immediately prior to St. Paul's contribution of Platinum US) as well as certain fixed assets and other intangible assets such as broker and customer lists and contract renewal rights and licenses, as well as the receipt of a Cash Contribution of $ million (the midpoint of the $ million to $ million range for the Cash Contribution);
•: amounts reflecting the receipt of approximately $120 million, representing the estimated net proceeds from the ESU Offering and recognition of the present value of future contract adjustment payments payable on the purchase contracts contained within the equity security units, without giving effect to any exercise of the underwriters' option to purchase additional equity security units. It is further assumed that the net proceeds from the ESU Offering will be invested in long-term, taxable fixed income securities; and
•: amounts reflecting Platinum entering into the Quota Share Retrocession Agreements with St. Paul Re reinsuring the Assumed Reinsurance Contracts as of June 30, 2002.

					June 30, 2002 Adjustments
					June 30, 2002 Adjustments										Pro Forma Platinum
			Historical		(1)			(2)		(3)			(4)		Pro Forma Platinum
			($ in thousands)
Assets:
	Investments		$	—	$	735,080		$	—	$	120,000		$	—	$
	Cash			130		(5,230	)		—		—			232,146		—
	Deferred acquisition costs			—		—			—		—			21,794		21,794
	Office properties and equipment			—		—			—		—			—		—
	Other assets			—		—			—		5,000			—		5,000

		*Total assets*	$	130	$	729,850		$	—	$	125,000		$	253,940	$

Liabilities:
	Unpaid losses and loss adjustment expense reserves		$	—	$	—		$	—	$	—		$	102,217	$	102,217
	Unearned premium reserves			—		—			—		—			151,723		151,723
	Debt obligations			—		—			—		125,000			—		125,000
	Payable to affiliate			10		(10	)		—		—			—		—
	Other liabilities			—		—			—		—			—		—

		*Total liabilities*	$	10	$	(10	)	$	—	$	125,000		$	253,940	$

Shareholders' equity:
	Common shares		$	12	$	328		$		$	—		$	—	$
	Additional paid-in capital			108		734,632			—		(—	)		—
	Retained earnings			—		(5,100	)		—		—			—		—

		*Total shareholders' equity*	$	120	$	729,860		$	—	$	—		$	—	$

	Total liabilities and shareholders' equity		$	130	$	729,850		$	—	$	125,000		$	253,940	$

Notes to Pro Forma Consolidated Balance Sheet

The following describe amounts included in the "Adjustments" columns above:

1.: Amounts reflecting (a) the receipt of approximately $735 million, representing the estimated net proceeds from the Equity Public Offering based on an assumed initial public offering price of $23 per Common Share (the midpoint of the range at which Platinum Holdings proposes to offer the Common Shares), without giving effect to any exercise of the underwriters' option to purchase additional Common Shares, (b) the redemption of the Common Shares that were issued at inception and capital contributed prior to the Equity Public Offering, and (c) the payment of certain formation and organization expenses as discussed in Note 2 and Note 12 on pages F-5 and F-11 of this prospectus. It is further assumed that the net proceeds from the Equity Public Offering will be invested in long-term, taxable fixed income securities.
2.: Amounts representing the receipt of St. Paul's Cash Contribution and the contribution of the Transferred Business at historical cost in exchange for the issuance of Common Shares and the St. Paul Option. Amounts related to net tangible assets contributed to Platinum by St. Paul are recorded at St. Paul's book value as of June 30, 2002. Assets include the net assets of Platinum US (which reflect a dividend of $10 million to be made to United States Fidelity and Guaranty Company, the parent of Platinum US, immediately prior to St. Paul's contribution of Platinum US) as well as certain fixed assets and other intangible assets such as broker and customer lists and contract renewal rights and licenses, as well as the receipt of a Cash Contribution of $ million (the midpoint of the $ million to $ million range for the Cash Contribution).
3.: Amounts reflecting the receipt of approximately $120 million, representing the estimated net proceeds from the ESU Offering and recognition of the present value of future contract adjustment payments payable on the purchase contracts contained within the equity security units, without giving effect to any exercise of the underwriters' option to purchase additional equity security units. It is further assumed that the net proceeds from the ESU Offering will be invested in long-term, taxable fixed income securities.
4.: Amounts reflecting Platinum entering into the Quota Share Retrocession Agreements with St. Paul Re reinsuring the Assumed Reinsurance Contracts as of June 30, 2002.

Pro Forma Combined Statements of Underwriting Results for the Six Months Ended June 30, 2002 and 2001, and the Year Ended December 31, 2001

We have prepared our unaudited pro forma combined statements of underwriting results to represent our reinsurance business, as if we had commenced our operations and the Equity Public Offering, the ESU Offering and the St. Paul Investment had been completed as of January 1, 2001. Our presentation of our pro forma underwriting results assumes that all of the Inception Agreements were entered into as of January 1, 2001. We have based our presentation on St. Paul Re's actual underwriting results for the periods presented. We have then adjusted these historical results to remove any of St. Paul Re's reinsurance businesses that will not be part of Platinum following the completion of the Equity Public Offering, including:

•: amounts related to St. Paul Re's reinsurance business representing lines of business that will not be transferred to Platinum, including aviation and bond and credit reinsurance, certain financial risk and capital markets reinsurance products, and certain North American business previously underwritten in London. Platinum will not obtain the renewal rights to these lines of business and will not assume liabilities related to these lines of business, and Platinum's management does not intend to write these lines of business in the future; and

•: amounts related to St. Paul Re's allocations from the St. Paul corporate aggregate excess-of-loss reinsurance program that will not be available to Platinum.

Our future results will depend in part on the amount of our investment income, which cannot be predicted and which will fluctuate depending upon the types of investments we select, our underwriting results and market factors. Actual tax expense in future periods will be based on underwriting results plus investment income and other income and expense items not reflected in the pro forma combined statements of underwriting results. Our effective tax rate will reflect the proportion of income recognized by our operating subsidiaries, with Platinum US taxed at the U.S. corporate income tax rate (35%), Platinum UK taxed at the U.K. corporate tax rate (generally 30%), Platinum Ireland taxed at a 25% corporate tax rate on non-trading income and a 16% corporate tax rate on trading income (the latter rate to be reduced to 12.5% as of January 1, 2003), and Platinum Bermuda taxed at a zero corporate tax rate. In 2002, we expect to have a greater portion of our income subject to U.S. taxation and U.K. taxation than we expect to have in the future because our Bermuda operations are entirely new but can be expected to grow as a proportion of our business. As a result of changes in our geographic distribution of taxable income as well as changes in the amount of our non-taxable income and expense, the relationship between our reported income before tax and our income tax expense may change significantly from one period to the next.

															Adjustments
		Six Months Ended June 30, 2002										Six Months Ended June 30, 2001
				Adjustments
		Historical St. Paul Re		Adjustments					Pro Forma Platinum			Historical St. Paul Re								Pro Forma Platinum
		Historical St. Paul Re		(1)			(2)		Pro Forma Platinum			Historical St. Paul Re			(1)			(2)		Pro Forma Platinum
Net premiums earned
Net premiums written		$	663	$	(61	)		—	$	602		$	701		$	(127	)	2		$	576
Change in unearned premiums, net			19		(48	)		—		(29	)		(101	)	$	14		(1	)		(88	)

	Net premiums earned		682		(109	)		—		573			600		$	(113	)	1			488
Losses and Underwriting Expenses
Losses and loss adjustment expenses			460		(110	)		—		350			426		$	(82	)	—			344
Policy acquisition expenses			178		(34	)		—		144			188		$	(39	)	—			149
Other underwriting expenses			35		(5	)		—		30			42		$	(9	)	—			33

	Total underwriting losses and expenses	$	673	$	(149	)		—	$	524		$	656		$	(130	)	—		$	526

	Underwriting gain (loss)	$	9	$	40		$	—	$	49		$	(56	)	$	17		1		$	(38	)

Year Ended December 31, 2001

					Adjustments
		Historical St. Paul Re			Adjustments						Pro Forma Platinum
		Historical St. Paul Re			(1)			(2)			Pro Forma Platinum
		($ in millions)
Net premiums earned
Net premiums written		$	1,677		$	(228	)	$	(67	)	$	1,382
Change in unearned premiums, net			(84	)		4			—			(80	)

	Net premiums earned		1,593			(224	)		(67	)		1,302
Losses and underwriting expenses
Losses and loss adjustment expenses			1,922			(356	)		(126	)		1,440
Policy acquisition expenses			315			(78	)		—			237
Other underwriting expenses			82			(19	)		—			63

	Total losses and underwriting expenses		2,319			(453	)		(126	)		1,740

	Underwriting gain (loss)	$	(726	)	$	229		$	59		$	(438	)

Notes to Pro Forma Combined Statements of Underwriting Results

The following describe amounts deducted in the "Adjustments" columns above:

1.: Amounts related to St. Paul Re's reinsurance business representing lines of business that will not be transferred to Platinum, including aviation and bond and credit reinsurance, certain financial risk and capital markets reinsurance products, and certain North American business previously underwritten in London. Platinum will not obtain the renewal rights to these lines of business and will not assume liabilities related to these lines of business, and Platinum's management does not intend to write these lines of business in the future; and
2.: Amounts related to St. Paul Re's allocations from St. Paul's corporate aggregate excess-of-loss reinsurance program.

The following presents a reconciliation of the amounts in Adjustment column 1 to amounts in the Notes to Combined Statements of The St. Paul Companies, Inc. Reinsurance Segment (Predecessor) (on page F-34 for the six months ended June 30, 2002 and 2001, and on page F-24 for the year ended December 31, 2001).

Reconciliation of amounts for the six months ended June 30, 2002 and June 30, 2001:

	June 30, 2002						June 30, 2001
	Net Premiums Earned			Underwriting Result			Net Premiums Earned			Underwriting Result
	($ in millions)
Activity related to lines of business identified by St. Paul to be exited including certain foreign offices, plus allocation of St. Paul corporate aggregate excess-of-loss reinsurance program (per page F-24)	$	167		$	(44	)	$	177		$	(6	)
Lines of business written in St. Paul's closed foreign offices which St. Paul has exited but which are being transferred to Platinum as continuing business		(58	)		4			(64	)		(11	)

Pro forma adjustment related to lines of business written by St. Paul Re that will not be transferred to Platinum (per page 62)	$	109		$	(40	)	$	113		$	(17	)

Reconciliation of amounts for the year ended December 31, 2001:

	Net Premiums Earned			Underwriting Result
	($ in millions)
Activity related to lines of business identified by St. Paul to be exited including certain foreign offices, plus allocation of St. Paul corporate aggregate excess-of-loss reinsurance program (per page F-34)	$	362		$	(318	)
Portion of St. Paul corporate aggregate excess-of-loss reinsurance program allocated to lines of business to be exited		(24	)		20
Lines of business written in St. Paul's closed foreign offices which St. Paul has exited but which are being transferred to Platinum as continuing business		(114	)		69

Pro forma adjustment related to lines of business written by St. Paul Re that will not be transferred to Platinum (per page 63)	$	224		$	(229	)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF PRO FORMA FINANCIAL CONDITION
AND UNDERWRITING RESULTS

You should read the following pro forma discussion and analysis in conjunction with our audited consolidated balance sheet and the related notes included on pages F-3 through F-11 of this prospectus, as well as our unaudited pro forma financial information and the related notes set forth under "Pro Forma Financial Information." Our audited consolidated balance sheet and our unaudited pro forma financial information have been prepared in accordance with U.S. GAAP. The following pro forma discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from the results described or implied by the pro forma discussion and analysis and these forward-looking statements. You should read the information under "Risk Factors" for information about material risks and uncertainties that affect our business.

Overview

•: Global Property and Marine. The Global Property and Marine operating segment will include principally property and marine reinsurance coverages. We intend to focus our underwriting activities primarily on catastrophe excess-of-loss and per risk excess-of-loss contracts. We intend to write other types of property reinsurance as well, including selected property pro rata reinsurance. This segment generated $315 million, or 22.8%, of Platinum's 2001 pro forma net premiums written. Following the completion of the Equity Public Offering, we expect the proportion of our net premiums written generated by the Global Property and Marine segment to increase relative to 2001 levels.
•: Global Casualty. The Global Casualty operating segment will include principally general and automobile liability, professional liability, workers' compensation, accident and health coverages and casualty clash. We intend to focus our underwriting activities primarily on excess-of-loss reinsurance coverages. This segment generated $592 million, or 42.8%, of Platinum's 2001 pro forma net premiums written. Following the completion of the Equity Public Offering, we expect the proportion of our net premiums written generated by the Global Casualty segment to decrease relative to 2001 levels.
•: Finite Risk. The Finite Risk operating segment will include principally non-traditional reinsurance treaties, including multi-year excess-of-loss, aggregate stop loss, finite quota share, loss portfolio transfer, and adverse loss development contracts. We intend to provide clients, either directly or through brokers, with customized solutions for their risk management and other financial management needs. We intend to focus our finite risk underwriting activities primarily on multi-year excess-of-loss and aggregate stop loss reinsurance treaties. Coverage classes within these products will primarily include property, casualty and marine exposures. This segment generated $475 million, or 34.4%, of Platinum's 2001 pro forma net premiums written.

Background and the Transferred Business

St. Paul and its subsidiaries constitute one of the oldest insurance organizations in the United States, dating back to 1853. Through its division St. Paul Re, St. Paul has been engaged in the reinsurance business since 1983. In December of 2001, in an effort to enhance the profitability of its reinsurance business, St. Paul decided to narrow the product focus of its reinsurance operations and exit certain lines of that business. As part of this effort, St. Paul Re reduced its anticipated 2002 exposure and expenses by exiting unprofitable lines of business and reducing the number of reinsurance branch offices outside the United States. The narrowing of reinsurance product lines included exiting aviation, bond and credit reinsurance coverages, as well as certain financial risk and capital markets lines. International branch office closings included Munich, Brussels, Hong Kong, Sydney and Singapore. In addition to curtailing various reinsurance operations, St. Paul's management decided that its reinsurance business and its primary insurance business should ideally operate as separate entities because of their different risk profiles and business characteristics. As a result, contingent upon the completion of the Equity Public Offering, St. Paul will make the Cash Contribution and contribute the Transferred Business through the arrangements described below:

•

Cash Contribution. At the completion of the Equity Public Offering, St. Paul will make the Cash Contribution in the amount of between $ million and $ million. The determination of the amount of the Cash Contribution will be made when the terms of the Equity Public Offering are finally determined. An assumed Cash Contribution of $ million will result in a pro forma net tangible book value per Common Share of $ following the Equity Public Offering, the ESU Offering and the St. Paul Investment based on an assumed initial public offering price of $23 per Common Share (the midpoint of the range at which Platinum Holdings proposes to offer the Common Shares) and assuming no exercise of the underwriters' options to purchase additional Common Shares or additional equity security units. Cash Contributions of $ million and $ million will result in net tangible book values of $ and $ per Common Share, respectively, assuming initial public offering prices of $22.50 and $23.50, respectively, and assuming no exercise of the underwriters' options to purchase additional Common Shares or additional equity security units.

•

Renewal Opportunities and Commitments. We will be acquiring from St. Paul Re its existing customer lists and the right to seek to renew substantially all of St. Paul Re's continuing reinsurance contracts. We will also assume commitments, if any, of St. Paul Re to offer reinsurance coverages in the future.

•

Assumed Reinsurance Contracts. Through 100% quota share retrocession agreements (the "Quota Share Retrocession Agreements"), we will reinsure substantially all of the reinsurance contracts St. Paul Re entered into on or after January 1, 2002, which we refer to as the "Assumed Reinsurance Contracts." St. Paul Re will retain all of its reinsurance exposure not being transferred to us and will administer the associated run-off. Consequently, we will not assume any underwriting exposure with respect to reinsurance contracts entered into by St. Paul prior to January 1, 2002, except as noted below with respect to finite reinsurance. We will receive as consideration cash in an amount equal to the aggregate of all loss, allocated loss adjustment expense, ceding commission reserves and unearned premium reserves, subject to agreed upon adjustments, and net of ceding commissions under the Quota Share Retrocession Agreements as of the transfer date. Underwriting gain or loss with respect to the Assumed Reinsurance Contracts for the period from January 1, 2002 to the transfer date will be retained by St. Paul.

•: The terms of the Quota Share Retrocession Agreements provide, with limited exceptions, that retrocessional reinsurance purchased by St. Paul Re shall be for our expense and shall inure to our benefit in respect of the Assumed Reinsurance Contracts, providing us

with retrocessional reinsurance coverage for such contracts through 2002 or the earlier termination or expiration of the various retrocession agreements. We will bear all the risk associated with non-payment by third party retrocessionaires under such retrocessional reinsurance. All the Quota Share Retrocession Agreements will take effect as of 12:01 a.m., on the later of the business day immediately following the date of the completion of the Equity Public Offering or October 1, 2002. Accordingly, while St. Paul will be contractually committed to effect the transfer, the effective time of the transfer of the Assumed Reinsurance Contracts will occur after the sale to investors of Common Shares in the Equity Public Offering.

•: In the case of business written in the United States, we will have the right to underwrite specified reinsurance business on behalf of St. Paul for a period of one year following the completion of the Equity Public Offering, and we will reinsure such business pursuant to the Quota Share Retrocession Agreements. In the case of the U.K. business, St. Paul will continue to write such business through the agency of Platinum UK until the earlier of December 31, 2002 or Platinum UK obtaining a license, and we will reinsure such business pursuant to the Quota Share Retrocession Agreements. This will allow us to continue to participate in reinsurance business which is bound after the completion of the Equity Public Offering without any delay occasioned by the start-up of our operations, including the lack of required licenses, and facilitate the transition of St. Paul Re's business to us.
•: For a period of three years following the completion of the Equity Public Offering, we will underwrite on behalf of St. Paul, with the consent of St. Paul, renewals of in-force contracts of finite reinsurance. St. Paul will retrocede to us 100% of the unpaid and future losses under currently in-force contracts and we will have the option to reinsure losses under certain renewed contracts and will be required to offer to reinsure losses under other renewed contracts for a fair market retrocession premium pursuant to the Quota Share Retrocession Agreements. Under the Quota Share Retrocession Agreements, a portion of future premiums will be applied to settle balances related to prior year experience for the benefit of St. Paul. St. Paul will have an option to renew this arrangement with us for a subsequent period of two years. In the United Kingdom, this arrangement will be limited to finite treaties which St. Paul Re has entered into with a small number of identified cedents and any further finite treaties which may be entered into on behalf of St. Paul Re UK prior to December 31, 2002.

•: Related Assets. We will be acquiring from St. Paul tangible and intangible assets relating to the continuing businesses being transferred to us, including furniture and equipment, systems and software, assignments of leases, licenses and other assets as well as all of the outstanding capital stock of Platinum US.
•: Employees. Upon or following the completion of the Equity Public Offering, we expect to employ approximately 150 employees previously employed by St. Paul Re.

The Equity Public Offering and the transactions contemplated thereby were first announced to the public on April 25, 2002. Platinum believes St. Paul Re's withdrawal from certain business may have adversely affected premiums written during 2002 prior to the public announcement of the Equity Public Offering. Management is unable to predict how the Equity Public Offering's announcement will affect premiums written in the future. See "Risk Factors."

Our Drivers of Profitability

Revenues

We expect to derive our revenues from two principal sources, premiums from our reinsurance business and income from our investment portfolio. Reinsurance premiums are a function of the amount and type of contracts we write as well as prevailing market prices. There are many types of reinsurance contracts with unique pricing, terms and conditions and expected profit margins. Therefore, changes in the amount of premiums we will write may not be an accurate indicator of our anticipated profitability.

We expect our investment income to be a function of the average assets in our portfolio and the average yield that we earn on those assets. The investment yield will be a function of market interest rates as well as the credit quality and maturity or our invested assets. In addition, we could realize capital gains or losses on our investment portfolio as a result of changing market conditions, including, but not limited to, changes in market interest rates and changes in the market's perception of the credit quality of our invested assets. We intend to earn investment income primarily on the assets invested in our portfolio, but we may also earn revenue from investment income on premium and loss deposits withheld by our clients.

Expenses

We expect that our expenses will consist primarily of two types of expenses, loss and loss adjustment expenses, or "LAE", and operating and administrative costs. Loss and loss adjustment expenses will be a function of the amount and type of reinsurance contracts we will write. We will initially record loss and loss adjustment expenses based on an actuarial analysis of the estimated losses we expect to incur on each contract written. The ultimate loss and loss adjustment expenses will depend on the actual costs to settle these claims. We intend to increase or decrease our initial loss estimates as actual losses occur. Our ability to estimate loss and loss adjustment expenses accurately at the time of pricing our contracts will be a critical factor in determining our profitability.

Operating and administrative costs are expected to consist primarily of acquisition expenses, which are commission and brokerage fees paid to intermediaries for the production of premiums written, excise taxes and other underwriting expenses, overhead costs, interest expense and income taxes. We expect our acquisition expenses to consist principally of ceding commissions paid to cedents and brokerage commissions that represent a percentage of the premiums on reinsurance contracts written. We expect that acquisition expenses will be a function of the amount and types of contracts written. Overhead costs are expected to consist primarily of salaries and related costs. These costs will be primarily fixed in nature and will not vary with the amount of premiums written. Interest expense (including payments on the senior notes forming part of the equity security units) will be a function of outstanding borrowing or funding commitments (such as letter of credit agreements) and the contractual interest rate related to these commitments. Income taxes will be a function of our profitability and the tax rate in the various jurisdictions in which we do business.

Critical Accounting Policies

Our significant accounting policies are described in the notes to Platinum Holdings' audited consolidated balance sheet. The following is a summary of the critical accounting policies that will affect our future financial performance: premiums, reserves, reinsurance and investments.

Premiums

Premiums will be recorded at the inception of each policy, based upon information received from ceding companies and their brokers. For excess-of-loss contracts, the amount of premium is

usually contractually documented at inception, and no management judgment is necessary in accounting for this. Premiums are earned on a pro rata basis over the coverage period. For proportional treaties, the amount of premium is normally estimated at inception by the ceding company. We will account for such premium using the initial estimates, and then adjust them once a sufficient period for actual premium reporting has elapsed. For the year ended December 31, 2001, the pro forma premiums written resulting from estimate accruals were less than 25% of total premiums written. We will also accrue for reinstatement and additional premiums resulting from losses. Such accruals will be based upon actual contractual terms, and the only element of management judgment involved is with respect to the amount of loss reserves, as described below.

Reinstatement and additional premiums are written at the time a loss event occurs where coverage limits for the remaining life of the contract are reinstated under pre-defined contract terms. Reinstatement premiums are the premiums charged for the restoration of the reinsurance limit of a catastrophe contract to its full amount after payment by the reinsurer of losses as a result of an occurrence. These premiums relate to the future coverage obtained during the remainder of the initial policy term, and are earned over the remaining policy term. Additional premiums are premiums charged after coverage has expired, related to experience during the policy term, which are earned immediately.

Reserves

Under U.S. GAAP, we will not be permitted to establish loss reserves until the occurrence of an event which may give rise to a loss. Once such an event occurs, we will establish reserves based upon estimates of total losses incurred by the ceding insurers as a result of the event and our estimate of the portion of such loss we have reinsured. As a result, only loss reserves applicable to losses incurred up to the reporting date may be set aside, with no allowance for the provision of a contingency reserve to account for expected future losses. Losses arising from future events will be estimated and recognized at the time the loss is incurred and could be substantial.

Setting appropriate reserves for loss and loss adjustment expenses is an inherently uncertain process. Loss reserves will represent our estimates, at a given point in time, of ultimate settlement and adjustment costs of losses incurred (including incurred but not reported, or IBNR, losses, which are losses that have been sustained but not yet reported to the insurer). We will regularly review and update these estimates, using the most current information available to us. Consequently, the ultimate liability for a loss is likely to differ from the original estimate. Whenever we determine that any existing loss reserves are inadequate, we are required to record such change in estimate; increasing the loss reserves with a corresponding reduction, which could be material, in our operating results in the period in which the deficiency is identified. Adjustments resulting from changes in our estimates will be reflected in current income. The establishment of new reserves, or the adjustment of reserves for reported claims, could result in significant upward or downward changes to our financial condition or results of underwriting in any particular period.

The reserve for losses and loss adjustment expenses will be based upon reports, individual case estimates received from ceding companies and management's estimates. Management's estimates are used mostly to estimate IBNR loss amounts. For certain catastrophic events, there is considerable uncertainty underlying the assumptions and associated estimated reserves for losses and loss adjustment expenses. Reserves will be reviewed regularly and, as experience develops and additional information becomes known, the reserves will be adjusted as necessary. Such changes in estimate, if necessary, will be reflected in results of operations in the current period. We currently intend to make arrangements to permit us to discount the liability for certain assumed reinsurance contracts using rates based on our return on invested assets or, in many cases, on yields contractually guaranteed to us on funds held by the ceding company.

Generally, reserves are established without regard to whether we may subsequently contest the loss. We expect our policy to be to establish reserves for reported losses based upon reports received from ceding companies, supplemented by our reserve estimates.

Reinsurance

Written premiums (which are total premiums for a given period), earned premiums (which are the portion of written premiums which applies to the expired portion of the policy period), incurred losses (which are total losses, whether paid or unpaid) and LAE reflect the net effects of assumed and ceded reinsurance transactions. Reinsurance accounting is followed for assumed and ceded transactions when risk transfer requirements have been met. These requirements involve significant assumptions being made relating to the amount and timing of expected cash flows, as well as the interpretation of underlying contract terms. Reinsurance contracts that do not transfer significant insurance risk are required to be accounted for as deposits. These deposits are accounted for as financing transactions, with interest expense credited to the contract deposit. Premiums received on retroactive reinsurance contracts are not reflected in the statement of operations, but rather are recorded in the consolidated balance sheet as an increase to loss and loss adjustment expenses reserves for the liabilities assumed and as assets based on the consideration received. A deferred charge or credit is recorded for any difference between liabilities assumed and consideration received.

Investments

In accordance with our investment guidelines, our investments will initially consist of high-grade marketable fixed income securities. We may, in the future, elect to invest a portion of our funds in marketable equity securities. Investments will be carried at estimated fair value as determined by the most recently traded price of each security as of the balance sheet date. Unrealized gains and losses on our investments will be included as a separate component of shareholders' equity. Realized gains and losses on sales of investments will be determined on a specific identification basis. In addition, unrealized depreciation in the value of individual securities considered by management to be other than temporary will be charged to income in the period it is determined. Investment income will be recorded when earned and will include the amortization of premiums and discounts on investments. For a more detailed discussion, see "Business—Our Business—Investments."

Formation of Platinum Holdings and Presentation of Pro Forma Financial Information
and Historical St. Paul Re Combined Financial Information

Formation of Platinum Holdings

In connection with our formation, we have agreed with St. Paul and certain of its affiliates to enter into the Inception Agreements. They will become effective contingent upon the completion of the Equity Public Offering (except the Quota Share Retrocession Agreements which will take effect at 12:01 a.m., on the later of the business day immediately following the date of the completion of the Equity Public Offering or October 1, 2002) and will govern our relationship with St. Paul thereafter with respect to various intercompany arrangements and services. The principal terms of these agreements are summarized under "Certain Relationships and Related Transactions" in this prospectus.

Presentation of Pro Forma Financial Information and St. Paul Re Combined Financial Information

As a newly formed company, we have no actual results of operations. In this prospectus, we are therefore presenting pro forma financial information of Platinum Holdings with respect to the

reinsurance business which St. Paul will be transferring to us under the terms of the Inception Agreements, contingent upon the completion of the Equity Public Offering. This pro forma financial information is intended, under the various assumptions discussed in more detail under "Pro Forma Financial Information", to illustrate the performance of our business as if the Equity Public Offering, the ESU Offering and the St. Paul Investment had been completed and we had commenced our operations as of January 1, 2001.

We are also presenting the historical combined financial information of St. Paul Re. For a detailed discussion of the historical underwriting results of St. Paul Re, see "The Predecessor Business."

We caution that the Platinum pro forma consolidated balance sheet and pro forma combined underwriting results presented herein are not indicative of the actual results that we may achieve once we commence operations. Many factors may cause our actual results to differ materially from these pro forma consolidated balance sheet and results including, but not limited to, the following:

•: Platinum's pro forma combined statement of underwriting results includes premium and loss development on business entered into prior to January 1, 2002. Under the Quota Share Retrocession Agreements, we are assuming no premium or loss development on business entered into prior to January 1, 2002. Therefore, our reported premiums written and earned and reported losses and loss adjustment expenses in our initial years of operation could be substantially lower than as presented in Platinum's pro forma combined statement of underwriting results. As such, our reported results in our initial years of operation will not be subject to prior year development for periods prior to January 1, 2002.
•: Following the Equity Public Offering, we will report underwriting results under the Quota Share Retrocession Agreements for the period prior to the later of the business day immediately after the date of completion of the Equity Public Offering or October 1, 2002 based on the application of retroactive reinsurance accounting, resulting in the premiums earned and losses incurred by St. Paul during such period being excluded from our statement of underwriting results. Due to this exclusion, following the Equity Public Offering, our reported 2002 premiums written and earned and our net underwriting results in 2002 could be substantially different than as presented in Platinum's pro forma combined statement of underwriting results.
•: Platinum's pro forma consolidated balance sheet reflects the inception of the Quota Share Retrocession Agreements assuming transferred balances as of June 30, 2002. Platinum's actual consolidated balance sheet will report transferred amounts determined as of 12:01 a.m. on the later of the business day immediately after the date of completion of the Equity Public Offering or October 1, 2002. Accordingly, underwriting gain or loss with respect to the Assumed Reinsurance Contracts for the period from January 1, 2002 through such date will be retained by St. Paul.
•: Although we expect to continue to be afforded the benefits of most of St. Paul Re's retrocessional reinsurance program through their expiration in 2002, we may enter into retrocessional reinsurance contracts with significantly different terms and conditions from those that have been made available to us from St. Paul Re and which form the basis of our initial operations.

•: The additional and reinstatement premiums recorded in 2001 by St. Paul Re's Finite Risk operating segment were primarily caused by losses relating to the September 11, 2001 terrorist attack. These additional and reinstatement premiums were unusually high and not necessarily indicative of the recurring premium volume we expect to write in that business segment.
•: Platinum's pro forma financial statements continue to reflect the discounting of the liability for certain Assumed Reinsurance Contracts based on our current intention to make arrangements to permit such discounting. If we do not put such arrangements in place, reinsurance contracts of a similar type entered into in the future would be reported on an undiscounted basis.

Exposure to Catastrophes

As with other reinsurers, our operating results and financial condition can be adversely affected by volatile and unpredictable natural and man-made disasters, such as hurricanes, windstorms, earthquakes, floods, fires, riots and explosions. Although we will attempt to limit our exposure to acceptable levels, it is possible that an actual catastrophic event or multiple catastrophic events could have a material adverse effect on our financial condition, results of operations and cash flows. As noted above under "—Critical Accounting Policies", under U.S. GAAP, we are not permitted to establish loss reserves until the occurrence of an event which may give rise to a claim. Once such an event occurs, we will establish reserves based upon estimates of total losses incurred by the ceding insurers as a result of the event and our estimate of the portion of such loss we have insured. As a result, only loss reserves applicable to losses incurred up to the reporting date may be set aside, with no allowance for the provision of a contingency reserve to account for expected future losses. Losses arising from future events will be estimated and recognized at the time the loss is incurred and could be substantial.

Income Tax

Except in Bermuda, we will be subject to local income tax requirements in the jurisdictions in which we operate. The income tax expense reflected in our pro forma financial statements therefore reflects a number of different local tax rates, and as a result may change from one period to the next depending on both the amount and the geographic distribution of our taxable income. Actual tax expense in future periods will be based on underwriting results plus investment income and other income and expense items not reflected in the Pro Forma Consolidated Statements of Underwriting Results. Our effective tax rate will reflect the proportion of income recognized by our operating subsidiaries with Platinum US taxed at the U.S. corporate income rate (35%), Platinum UK taxed at the U.K. corporate tax rate (generally 30%), Platinum Ireland taxed at the Irish corporate tax rate (25% on non-trading income and 16% on trading income, the latter rate to be reduced to 12.5% as of January 1, 2003), and Platinum Bermuda taxed at a zero corporate tax rate. In 2002, we expect to have a greater portion of our income subject to U.S. taxation and U.K. taxation than we expect to have in the future because our Bermuda operations are entirely new but can be expected to grow as a proportion of our business over time. As a result of changes in our geographic contribution of taxable income as well as changes in the amount of our non-taxable income and expense, the relationship between our reported income before tax and our income tax expense may change significantly from one period to the next.

Pro Forma Combined Underwriting Results of Platinum Holdings

The following table summarizes our pro forma combined underwriting results for the six months ended June 30, 2002 and 2001, and for the year ended December 31, 2001, as if the Equity Public

Offering, the ESU Offering and the St. Paul Investment had been completed on January 1, 2001. For a discussion of the historical results of underwriting of St. Paul Re, see "The Predecessor Business."

				Six Months Ended June 30,
				Six Months Ended June 30,						Year Ended December 31, 2001
				2002			2001			Year Ended December 31, 2001
				($ in millions)
Net premiums earned
	Net premiums written			$	602		$	576		$	1,382
	Change in unearned premiums, net				(29	)		(88	)		(80	)

		Net premiums earned			573			488			1,302

Losses and Underwriting expenses
	Losses and loss adjustment expenses				350			344			1,440
	Policy acquisition expenses				144			149			237
	Other underwriting expenses				30			33			63

	Total losses and underwriting expenses			$	524		$	526			1,740

		Underwriting gain (loss)		$	49		$	(38	)	$	(438	)

Selected Ratios - U.S. GAAP
	Loss and loss adjustment expense ratio				61.2	%		70.6	%		110.6	%
	Underwriting expense ratio				30.3	%		37.1	%		23.0	%

	Combined ratio				91.5	%		107.7	%		133.6	%

Selected Ratios - Statutory
	Loss and loss adjustment expense ratio				61.2	%		70.6	%		110.6	%
	Underwriting expense ratio				28.0	%		34.7	%		23.3	%

	Combined ratio				89.2	%		105.3	%		133.9	%

			Impact of catastrophes on combined ratio (1)		(3.0	)%		3.7	%		40.9	%

(1): Excludes ceded losses under St. Paul Re's aggregate excess-of-loss treaties, because such treaties extend to non-catastrophic as well as catastrophic losses as described below. The 3% benefit from catastrophes on the June 30, 2002 combined ratio is driven by a lack of catastrophes in the first six months of 2002 and favorable loss development in 2002 on catastrophe losses incurred in prior years.

Included in the 2001 pro forma combined underwriting results are pre-tax losses related to the September 11, 2001 terrorist attack totaling $468 million. This amount includes gross losses and loss adjustment expenses of $819 million, $123 million of ceded reinsurance, $137 million of additional and reinstatement premiums and $91 million of reduced contingent commission expenses. The determination of the impact of catastrophes on the combined ratio excludes the ceded losses under St. Paul Re's aggregate excess-of-loss treaty; this treaty which remains available to Platinum in 2002 (unless earlier terminated pursuant to its terms), provides coverage for excess losses arising from catastrophic and non-catastrophic events.

Retrocessional Reinsurance

Our pro forma combined underwriting results for the six months ended June 30, 2002 and 2001, and for the year ended December 31, 2001 reflect the benefits of most of St. Paul Re's retrocessional reinsurance program as it relates to Platinum. The pro forma results do not reflect the effects of the St. Paul corporate aggregate excess-of-loss reinsurance program, which will not be available to Platinum in 2002 or thereafter. St. Paul Re has utilized retrocession agreements principally to increase aggregate premium capacity and to reduce the risk of loss on reinsurance underwritten. In addition, through St. Paul Re's aggregate excess-of-loss treaties, St. Paul Re has maintained catastrophe reinsurance programs for the purpose of limiting its exposure with respect to multiple claims arising from a single occurrence or event. St. Paul Re's retrocession agreements provide for recovery of a portion of claims and claims expense from retrocessionnaires. Under

these programs, on a pro forma basis, St. Paul Re ceded the following amounts to retrocessionaires:

		Six Months Ended June 30,
		Six Months Ended June 30,					Year Ended December 31, 2001
		2002			2001		Year Ended December 31, 2001
		($ in millions)
Ceded premiums written		$	42		$	70	$	167
Ceded premiums earned			25			65		165
Ceded losses and loss adjustment expenses			(27	)		105		368
Ceded underwriting expenses			4			3		8

	Net underwriting benefit (detriment)	$	(48	)	$	43	$	211

Included in the above totals were the following impacts of St. Paul Re's aggregate excess-of-loss treaties as they relate to Platinum:

		Six Months Ended June 30,
		Six Months Ended June 30,					Year Ended December 31, 2001
		2002			2001		Year Ended December 31, 2001
		($ in millions)
Ceded premiums written		$	7		$	37	$	87
Ceded premiums earned			(1	)		36		87
Ceded losses and loss adjustment expenses			(21	)		78		194

	Net underwriting benefit (detriment)	$	(20	)	$	42	$	107

Under the terms of St. Paul Re's aggregate excess-of-loss treaties, St. Paul Re remits an initial margin premium in quarterly installments to its counterparty, regardless of whether losses are ceded under the treaty. If losses are ceded under these treaties, St. Paul Re remits additional premiums ceded, plus accrued interest, to its counterparty when the related losses and loss adjustment expenses are settled. For the six months ended June 30, 2002, no losses were ceded under the 2002 treaty. Net underwriting detriment in the 2002 six-month period is driven by a commutation of a certain portion of the St. Paul Re aggregate excess-of-loss treaty. The commutation of this treaty resulted in a net loss of $14 million. This was done in conjuction with the commutation of similar assumed reinsurance treaties which resulted in a net gain of $10 million. The combined effect of these commutations resulted in a net loss of $4 million. The additional net underwriting detriment is due to $6 million of ceded premium pursuant to the St. Paul Re aggregate excess of loss treaty with respect to the 2002 accident year.

Pro Forma Combined Underwriting Results

Six Months Ended June 30, 2002 Compared to Six Months Ended June 30, 2001

Net premiums

Net premiums written for the six-month period ended June 30, 2002 increased 4.5% to $602 million from $576 million for the six-month period ended June 30, 2001, including $242 million, or 40.2%, from the Global Casualty segment, $212 million, or 35.2%, from the Global Property and Marine segment and $148 million, or 24.6%, from the Finite Risk segment. The increase in premium is due to rate increases averaging 33% across all lines of business offset by decreases in exposures as a result of the re-underwriting of the core book of business. In addition, a large quota share contract was rescinded at a cost to us of $56 million, adversely affecting net written premiums. The large quota share contract was a three year quota share reinsurance contract incepting in 1999. The coverage for 2001 was rescinded by mutual agreement with the ceding company.

Net premiums earned for the six months ended June 30, 2002 increased 17.4% to $573 million from $488 million for the six months ended June 30, 2001, reflecting the impact of price increases partly offset by the decrease in exposure.

Losses and loss adjustment expenses

Losses and loss adjustment expenses incurred were $350 million in the six months ended June 30, 2002 compared to $344 million in the six months ended June 30, 2001. The small increase as compared to the increase in earned premium is attributable to favorable development in prior underwriting years as well as increased rates impacting the current underwriting year. Favorable catastrophe development resulted in a benefit of $17 million in the six months ended June 30, 2002 and catastrophe losses resulted in an expense of an $18 million detriment in the six months ended June 30, 2001 due to the Midwest storms and Hurricane Allison. The loss and loss adjustment expense ratio, also referred to as loss ratio (which is the ratio of losses and loss adjustment expenses incurred, including estimates for claims incurred but not reported, to premiums earned) was 61.2% and 70.6% for the six months ended June 30, 2002 and 2001, respectively. Catastrophe loss development had a favorable impact on loss ratios for the six months ended June 30, 2002 of 3.0% and catastrophe losses had an unfavorable impact of 3.7% for the six months ended June 30, 2001.

Acquisition expenses

Acquisition expenses were $144 million for the six-month period ended June 30, 2002 compared to $149 million for the six-month period ended June 30, 2001. The resulting acquisition expense ratio was 25.1% for the six months ended June 30, 2002 compared to 30.4% for the six months ended June 30, 2001. The reduction in the expense ratio of 5.3% was attributable to lower commission and brokerage costs across the portfolio primarily due to an increase in writings in our Global Property segment, which carries lower commission and brokerage costs.

Other underwriting expenses

Other underwriting expenses consisted of the cost of operations associated with underwriting activities. These expenses include compensation, rent and all other general expenses associated with our underwriting activity and exclude any investment or claim related expense. Other underwriting expenses were $30 million for the six month period ended June 30, 2002 and $33 million for the six month period ended June 30, 2001. The other underwriting expense ratio for the six months ended June 30, 2002 was 5.2% compared to 6.7% for the six month period ended June 30, 2001. The decrease was attributable to the growth in premiums earned together with a decrease in underwriting expenses, principally compensation related due to a reduction of employees.

Year Ended December 31, 2001

Net premiums

Net premiums written for the year ended December 31, 2001 totaled $1,382 million, including $592 million, or 42.8%, from the Global Casualty segment, $315 million, or 22.8%, from the Global Property and Marine segment and $475 million, or 34.4%, from the Finite Risk segment. Included in net premiums written for the period were $137 million in additional and reinstatement premiums, principally as a result of losses under finite reinsurance treaties, primarily related to the September 11, 2001 terrorist attack. Net premiums earned for the full year 2001 were $1,302 million.

Losses and loss adjustment expenses

Losses and loss adjustment expenses incurred totaled $1,440 million for the year ended December 31, 2001, which included loss and loss adjustment expense payments of $652 million and a net increase in reserves for unpaid losses and loss adjustment expenses of $788 million.

For the year ended December 31, 2001, pre-tax catastrophe losses net of reinsurance totaled $744 million, of which $696 million resulted from the September 11, 2001 terrorist attack. The

majority of the remaining $48 million of catastrophe losses in 2001 were the result of a variety of storms throughout the year in the U.S., and the explosion of a chemical manufacturing plant in Toulouse, France.

The reported loss ratio of 110.6% for the year ended December 31, 2001 included a 46.7 percentage point detriment from losses incurred in the terrorist attack (not including the effects of St. Paul Re's aggregate excess-of-loss treaties). The reported loss ratio for the year ended December 31, 2001 also included a benefit from St. Paul Re's aggregate excess-of-loss treaties.

St. Paul Re's actual estimated losses for the September 11, 2001 terrorist attack were based on a variety of actuarial techniques, coverage interpretations and claims estimation methods. They included an estimate of losses incurred but not reported, and an estimate of costs related to the settlement of claims. The estimate of St. Paul Re's losses is also based on its belief that property-casualty insurance losses from the terrorist attack will total between $30 billion and $35 billion for the insurance industry. While the estimate of industry losses is subject to significant uncertainties and may change over time as additional information becomes available, Platinum will not be subject to the impact of any loss development associated with the terrorist attack in that reinsurance contracts which gave rise to the terrorist attack losses are not included in the Assumed Reinsurance Contracts and Platinum is not assuming any liability for prior period losses.

The estimated net pre-tax operating loss as a result of the terrorist attack totaled $468 million, consisting of the following components:

		Year Ended December 31, 2001
		($ in millions)
Gross losses and loss adjustment expenses		$	819
Reinsurance recoverables			(123	)
Additional and reinstatement premiums			(137	)
Reduction in reinsurance contingent commission expense			(91	)

	Total estimated pretax operating loss	$	468

The estimated net pre-tax operating loss of $468 million related to the terrorist attack would have been distributed among Platinum's intended business segments as follows:

		Year Ended December 31, 2001
		($ in millions)
Global Property & Marine		$	307
Global Casualty			32
Finite Risk			129

	Total	$	468

Acquisition expenses

Acquisition expenses were $237 million for the year ended December 31, 2001. The acquisition expenses were reduced by $91 million related to contingent commissions that are no longer payable as a result of the losses caused by the terrorist attack of September 11, 2001. This resulted in a 10.0 percentage point benefit resulting from the contingent commission adjustment described above. The resulting acquisition expense ratio, that is, acquisition expenses expressed as a percentage of earned premium, was 18.2% for the year ended December 31, 2001.

Other underwriting expenses

Other underwriting expenses were $63 million for the year ended December 31, 2001. This resulted in an other underwriting expense ratio of 4.8% for the year ended December 31, 2001.

Pro Forma Underwriting Results By Operating Segment

The following table summarizes pro forma underwriting results and combined ratios for each of our three operating segments for the six months ended June 30, 2002 and 2001, and the year ended December 31, 2001.

		Six Months Ended June 30,
		Six Months Ended June 30,						Year Ended December 31, 2001
		2002			2001			Year Ended December 31, 2001
		($ in millions)
Global Property & Marine
	Net premiums written	$	212		$	168		$	315
	Net premiums earned		187			132			311
	Losses and loss adjustment expenses		78			43			399
	Underwriting expenses		48			44			90

	Underwriting gain (loss)	$	61		$	45		$	(178	)

	Combined ratio		67.2	%		66.2	%		157.5	%

Global Casualty
	Net premiums written	$	242		$	284		$	592
	Net premiums earned		239			230			521
	Losses and loss adjustment expenses		198			226			460
	Underwriting expenses		75			84			191

	Underwriting gain (loss)	$	(34	)	$	(80	)	$	(130	)

	Combined ratio		114.3	%		134.6	%		125.0	%

Finite Risk
	Net premiums written	$	148		$	124		$	475
	Net premiums earned		147			126			470
	Losses and loss adjustment expenses		74			75			581
	Underwriting expenses		51			54			19

	Underwriting gain (loss)	$	22		$	(3	)	$	(130	)

	Combined ratio		85.4	%		102.2	%		127.5	%

Total
	Net premiums written	$	602		$	576		$	1,382
	Net premiums earned		573			488			1,302
	Losses and loss adjustment expenses		350			344			1,440
	Underwriting expenses		174			182			300

	Underwriting gain (loss)	$	49		$	(38	)	$	(438	)

	Loss and loss adjustment expense ratio		61.2	%		70.6	%		110.6	%
	Underwriting expense ratio		30.3	%		37.1	%		23.0	%

	Combined ratio		91.5	%		107.7	%		133.6	%

The following table summarizes pro forma underwriting results and combined ratios, excluding the impact of St. Paul Re's aggregate excess-of-loss treaties and the impact of the September 11,

2001 terrorist attack, for each of our three operating segments for the six months ended June 30, 2002 and 2001, and the year ended December 31, 2001:

		Six Months Ended June 30,
		Six Months Ended June 30,						Year Ended December 31, 2001
		2002			2001			Year Ended December 31, 2001
		($ in millions)
Global Property & Marine
	Net premiums written	$	215		$	196		$	356
	Net premiums earned		187			159			352
	Losses and loss adjustment expenses		71			100			194
	Underwriting expenses		48			44			90

	Underwriting gain (loss)	$	68		$	15		$	68

	Combined ratio		63.6	%		90.5	%		80.8	%

Global Casualty
	Net premiums written	$	248		$	288		$	611
	Net premiums earned		241			234			540
	Losses and loss adjustment expenses		196			240			468
	Underwriting expenses		74			83			191

	Underwriting gain (loss)	$	(29	)	$	(89	)	$	(119	)

	Combined ratio		112.3	%		138.1	%		122.1	%

Finite Risk
	Net premiums written	$	146		$	129		$	365
	Net premiums earned		144			131			360
	Losses and loss adjustment expense		62			83			276
	Underwriting expenses		52			54			110

	Underwriting gain (loss)	$	30		$	(6	)	$	(26	)

	Combined ratio		78.9	%		104.8	%		107.1	%

Total
	Net premiums written	$	609		$	613		$	1,332
	Net premiums earned		572			524			1,252
	Losses and loss adjustment expenses		329			423			938
	Underwriting expenses		174			181			391

	Underwriting gain (loss)	$	69		$	(80	)	$	(77	)

	Loss and loss adjustment expense ratio		57.6	%		80.7	%		74.9	%
	Underwriting expense ratio		30.4	%		34.7	%		31.2	%

	Combined ratio		88.0	%		115.4	%		106.1	%

The following provides a more detailed discussion of the pro forma underwriting results for our three operating segments. To provide a more meaningful analysis of the underlying performance of our business segments, discussion of segment results excludes the impact of St. Paul Re's aggregate excess-of-loss treaties and the impact of the September 11, 2001 terrorist attack.

Global Property and Marine

The Global Property and Marine operating segment will include principally property and marine reinsurance coverages. We intend to focus our underwriting activities primarily on catastrophe and excess-of-loss per risk contracts. We intend to write other types of property reinsurance as well, including selected property pro rata insurance. The following table summarizes the pro forma underwriting results of Platinum's Global Property and Marine segment for the six months ended June 30, 2002 and 2001, and the year ended December 31, 2001. The underwriting results exclude the impact of St. Paul Re's aggregate excess-of-loss treaties and the impact of the September 11, 2001 terrorist attack.

	Six Months Ended June 30,
	Six Months Ended June 30,						Year Ended December 31, 2001
	2002			2001			Year Ended December 31, 2001
	($ in millions)
Net premiums written	$	215		$	196		$	356
Net premiums earned		187			159			352
Losses and loss adjustment expenses		71			100			194
Underwriting expenses		48			44			90

Underwriting gain (loss)	$	68		$	15		$	68

Loss and loss adjustment expense ratio		37.9	%		62.7	%		55.1	%
Underwriting expense ratio		25.7	%		27.8	%		25.7	%

Combined ratio		63.6	%		90.5	%		80.8	%

Six Months Ended June 30, 2002 Compared to Six Months Ended June 30, 2001

Net premiums

Net premiums written in the Global Property and Marine segment for the six-month period ended June 30, 2002 increased 9.7% to $215 million from $196 million for the six-month period ended June 30, 2001. This increase was the result of significant price increases averaging 36%, offset by decreased exposures through re-underwriting efforts across all lines of business.

Net premiums written in the Global Property and Marine segment included $164 million in excess-of-loss reinsurance contracts and $51 million in proportional contracts.

Net premiums written in the Global Property and Marine segment grew 7.6% in the U.S. to $113 million for the six months ended June 30, 2002 compared to $105 million in the U.S. for the six months ended June 30, 2001. Net premiums written in the Global Property and Marine segment increased 12.1% outside the U.S. to $102 million for the six months ended June 30, 2002 compared to $91 million outside the U.S. in the six months ended June 30, 2001. These increases reflected the impact of price increases offset by the decrease in exposure.

Net premiums earned for the six months ended June 30, 2002 were impacted by the same factors as written premiums and increased by 17.6% to $187 million from $159 million for the six-month period ended June 30, 2001.

Losses and loss adjustment expenses

Losses and loss adjustment expenses incurred by Global Property and Marine segment were $71 million in the six months ended June 30, 2002 compared to $100 million in the six months ended June 30, 2001. The decrease in the six months ended June 30, 2002 was principally attributable to the absence of catastrophe losses and the favorable development of prior year catastrophes. The Global Property and Marine segment's loss ratio was 37.9% and 62.7% for the six-month periods ending June 30, 2002 and 2001, respectively. The absence of catastrophe losses in 2002, as well as favorable loss development from prior period catastrophes, resulted in a benefit of $14 million for the six months

ended June 30, 2002. For the six months ended June 30, 2001 catastrophe losses totaled $18 million mainly due to Hurricane Allison and the Midwest storms in 2001.

Underwriting expenses

Acquisition costs associated with the Global Property and Marine segment were $37 million for the six-month period ended June 30, 2002 compared to $31 million for the six-month period ended June 30, 2001. After deferring those costs related to the unearned portions of net premiums written, the resulting acquisition expense ratio was 20.0% for the six months ended June 30, 2002 compared to 19.4% for the six months ended June 30, 2001. The increase in the expense ratio of 0.6% was attributable to higher commission and brokerage costs reflecting an increase in proportional business, which carries a higher commission and brokerage ratio. Other underwriting expenses of the Global Property and Marine segment, including direct and allocated underwriting expenses were $11 million for the six-month period ended June 30, 2002 and $13 million for the six-month period ended June 30, 2001. The other underwriting expense ratio for the Global Property and Marine segment for the six months ended June 30, 2002 was 5.7% compared with 8.5% for the six-month period ended June 30, 2001. The decrease in the other underwriting expense ratio was attributable to the increase in written premiums and a decrease in other underwriting expenses, mainly compensation related due to a reduction of employees.

Year Ended December 31, 2001

Net premiums

Net premiums written in the Global Property and Marine segment for the year ended December 31, 2001 totaled $356 million. Net premium volume in 2001 reflected the benefit of strong rate increases throughout the segment. Price increases accelerated as the year progressed, particularly in the aftermath of the September 11, 2001 terrorist attack.

Net premiums written in the Global Property and Marine segment in the U.S. totaled $196 million in 2001. Net premiums written in the Global Property and Marine segment for ceding companies outside the U.S. totaled $160 million in 2001.

Losses and loss adjustment expenses

Losses and loss adjustment expenses incurred for the Global Property and Marine segment totaled $194 million for the year ended December 31, 2001. Losses and loss adjustment expenses incurred for the year ended December 31, 2001 included loss and loss adjustment expense payments of $190 million and a net increase in reserves for unpaid losses and loss adjustment expenses of $4 million.

Underwriting expenses

Acquisition costs for the Global Property and Marine segment were $66 million for the year ended December 31, 2001, after deferring those costs related to the unearned portion of premiums written. The resulting acquisition expense ratio was 18.7% for the year ended December 31, 2001. Other underwriting expenses of the Global Property and Marine segment, including direct and allocated underwriting expenses during 2001, totaled $24 million, resulting in an other underwriting expense ratio of 7.0%.

Global Casualty

The Global Casualty operating segment will include principally general and automobile liability, professional liability, workers' compensation, accident and health coverages and casualty clash. We intend to focus our underwriting activities primarily on excess-of-loss reinsurance coverages. The following table summarizes the pro forma underwriting results of Platinum's Global Casualty segment for the periods covered by this discussion. As with the discussion of the Global Property and Marine segment, the underwriting results below for the six months ended June 30, 2002 and 2001, and for the year ended December 31, 2001 exclude the impact of St. Paul Re's aggregate excess-of-loss treaties and the impact of the September 11, 2001 terrorist attack.

	Six Months Ended June 30,						Year Ended December 31,
	2002			2001			2001
	($ in millions)
Net premiums written	$	248		$	288		$	611
Net premiums earned		241			234			540
Losses and loss adjustment expenses		196			240			468
Underwriting expenses		74			83			191

Underwriting gain (loss)	$	(29	)	$	(89	)	$	(119	)

Loss and loss adjustment expense ratio		81.4	%		102.5	%		86.7	%
Underwriting expense ratio		30.9	%		35.6	%		35.4	%

Combined ratio		112.3	%		138.1	%		122.1	%

Six Months Ended June 30, 2002 Compared to Six Months Ended June 30, 2001

Net premiums

Net premiums written in the Global Casualty segment for the six-month period ended June 30, 2002 decreased 13.9% to $248 million from $288 million for the six-month period ended June 30, 2001. The decrease in net premiums written was primarily due to the re-underwriting of the portfolio including the rescission of a large quota share contract and a decrease in proportional reinsurance. The large quota share contract was a three year quota share reinsurance contract incepting in 1999. As a result of the strategic initiative to improve profitability and focus on core lines of business, the coverage for 2001 was rescinded by mutual agreement with the ceding company. These decreases to the portfolio were offset by significant rate increases on renewal business averaging 30% across the portfolio.

Net premiums written in the Global Casualty segment included $202 million in excess-of-loss reinsurance contracts and $46 million in proportional contracts.

Net premiums written in the Global Casualty segment declined 10.7% in the United States to $208 million for the six months ended June 30, 2002 compared to $233 million in the United States in the six months ended June 30, 2001. Net premiums written in the Global Casualty segment declined 27.3% outside the United States to $40 million for the six months ended June 30, 2002 compared to $55 million outside the United States in the six months ended June 30, 2001. The decreases reflect the rescission of the large quota share contract offset by rate increases achieved on renewal business.

Net premiums earned for the six months ended June 30, 2002 were impacted by the same factors as net premiums written and increased by 3.0% to $241 million from $234 million for the six-month period ended June 30, 2001.

Losses and loss adjustment expenses

Losses and loss adjustment expenses incurred in the Global Casualty segment were $196 million in the six months ended June 30, 2002 compared to $240 million in the six months ended June 30, 2001. The decrease is attributable to favorable development in prior underwriting years as well as increased rates impacting the current underwriting year. The Global Casualty segment's loss ratio was 81.4% and 102.5% for the six-month periods ended June 30, 2002 and 2001, respectively.

Underwriting expenses

Acquisition costs associated with the Global Casualty segment were $61 million for the six-month period ended June 30, 2002 compared to $69 million for the six month period ended June 30, 2001, after deferring those costs related to the unearned portion of premiums written. The resulting acquisition expense ratio was 25.5% for the six months ended June 30, 2002 compared to 29.8% for the six months ended June 30, 2001. The reduction in the acquisition expense ratio of 4.3% was attributable to better terms and conditions negotiated with our ceding companies. Other underwriting expenses of the Global Casualty segment, including direct and allocated underwriting expenses, were $13 million for the six-month period ended June 30, 2002 and $14 million for the six-month period ended June 30, 2001. The other underwriting expense ratio for the six months ended June 30, 2002 was 5.4% compared to 5.8% for the six-month period ended June 30, 2001. The decrease in the other underwriting expense ratio was attributable to a decrease in expenses, principally compensation related due to a reduction of employees.

Year Ended December 31, 2001

Net premiums

Net premiums written in the Global Casualty segment for 2001 included $454 million in excess-of-loss reinsurance contracts and $157 million in proportional contracts. Net premium volume reflected the benefit of significant price increases for substantially all coverages in the segment.

Net premiums written in the Global Casualty segment for ceding companies in the United States totaled $501 million in 2001. Net premiums written in the Global Casualty segment for ceding companies outside the U.S. was $110 million in 2001.

Losses and loss adjustment expenses

Losses and loss adjustment expenses incurred for the Global Casualty segment totaled $468 million for the year ended December 31, 2001. Loss and loss adjustment expenses incurred for the year ended December 31, 2001 included loss and loss expense payments of $310 million and a net increase in reserves for unpaid losses and loss adjustment expenses of $158 million.

Underwriting expenses

Acquisition costs for the Global Casualty segment were $163 million for the year ended December 31, 2001. After deferring those costs related to the unearned portion of net premiums written, the resulting acquisition expense ratio was 30.2% for the year ended December 31, 2001. Other underwriting expenses of the Global Casualty segment, including direct and allocated underwriting expenses during 2001 totaled $28 million, resulting in an other underwriting expense ratio of 5.2%.

Finite Risk

The Finite Risk operating segment will include principally non-traditional reinsurance treaties, including multi-year excess-of-loss, aggregate stop loss, finite quota share, loss portfolio transfer, and adverse loss development contracts. We intend to provide clients, either directly or through brokers, with customized solutions for their risk management and other financial management needs. We intend to focus our finite risk underwriting activities primarily on multi-year excess-of-loss and aggregate stop loss reinsurance treaties. Coverage classes within these products will primarily include property, casualty, marine and/or whole account property and casualty exposures. The following table summarizes results for the Finite Risk segment for the periods covered by this discussion. As with the discussion of our other operating segments, the pro forma underwriting results below for the six months ended June 30, 2002 and 2001, and for the year ended

December 31, 2001 exclude the impact of St. Paul Re's aggregate excess-of-loss treaties and the impact of the September 11, 2001 terrorist attack.

	Six Months Ended June 30,						Year Ended December 31,
	2002			2001			2001
	($ in millions)
Net premiums written	$	146		$	129		$	365
Net premiums earned		144			131			360
Losses and loss adjustment expenses		62			83			276
Underwriting expenses		52			54			110

Underwriting gain (loss)	$	30		$	(6	)	$	(26	)

Loss and loss adjustment expense ratio		43.4	%		63.5	%		76.6	%
Underwriting expense ratio		35.5	%		41.3	%		30.5	%

Combined ratio		78.9	%		104.8	%		107.1	%

Six Months Ended June 30, 2002 Compared to Six Months Ended June 30, 2001

Net premiums

Net premiums written in the Finite Risk segment for the six-month period ended June 30, 2002 increased 13.2% to $146 million from $129 million for the six-month period ended June 30, 2001. The increase in premiums written in the six months ended June 30, 2002 compared with the six months ended June 30, 2001 was due to one large finite quota share contract written in the fourth quarter of 2001 that has significant premium in calendar year 2002.

Net premiums written in the Finite Risk segment grew 27.5% in the United States to $88 million for the six months ended June 30, 2002 compared to $69 million in the United States in the six months ended June 30, 2001. Net premiums written in the Finite Risk segment decreased 3.3% outside the United States to $58 million for the six months ended June 30, 2002 compared to $60 million outside the United States for the six months ended June 30, 2001. The increase in U.S. business is due to the rate increases achieved on renewal business after the September 11, 2001 terrorist attack on the United States.

Net premiums earned for the six months ended June 30, 2002 were impacted by the same factors as net premiums written and increased by 9.9% to $144 million from $131 million for the six month period ended June 30, 2001.

Losses and loss adjustment expenses

Losses and loss adjustment expenses incurred in the Finite Risk segment were $62 million for the six months ended June 30, 2002 compared to $83 million in the six months ended June 30, 2001. The decrease from the six months ended June 30, 2001 was principally attributable to the commutation of an assumed aggregate stop loss treaty and the absence of large losses. The commutation of this treaty resulted in a net gain of $10 million. In the six months ended June 30, 2001, the Petrobras oil platform collapse impacted losses by $11 million. The Finite Risk segment's loss ratio was 43.4% and 63.5% for the six month periods ended June 30, 2002 and 2001, respectively.

Underwriting expenses

Acquisition costs associated with the Finite Risk segment were $46 million for the six month period ended June 30, 2002 compared to $48 million for the six month period ended June 30,

2001. After deferring those costs related to the unearned portion of net premiums written, the resulting acquisition expense ratio was 31.5% for the six months ended June 30, 2002 compared to 36.8% for the six months ended June 30, 2001. The reduction in the expense ratio of 5.3 percentage points was attributable to lower commission and brokerage costs across the portfolio. Other underwriting expenses of the Finite Risk segment, including direct and allocated underwriting expenses, were $6 million for the six-month period ended June 30, 2002 and $6 million for the six-month period ended June 30, 2001. The other underwriting expense ratio for the six months ended June 30, 2002 was 4.0% compared to 4.5% for the six-month period ended June 30, 2001. The decrease in the other underwriting expense ratio was attributable to the increase in net premiums written.

Year Ended December 31, 2001

Net Premiums

Net premiums written in the Finite Risk segment for ceding companies in the United States totaled $204 million in 2001. Net premiums written in the Finite Risk segment for ceding companies outside the U.S. totaled $161 million in 2001.

Losses and loss adjustment expenses

Losses and loss adjustment expenses incurred for the Finite Risk segment totaled $276 million for the year ended December 31, 2001. Loss and loss adjustment expenses incurred for the year ended December 31, 2001 included loss and loss expense payments of $153 million and a net increase in reserves for unpaid losses and loss adjustment expenses of $123 million.

Underwriting expenses

Acquisition costs for the Finite Risk segment were $99 million for the year ended December 31, 2001. After deferring those costs related to the unearned portion of net premiums written, the resulting acquisition expense ratio was 27.6% for the year ended December 31, 2001.

Other underwriting expenses of the Finite Risk segment, including direct and allocated underwriting expenses during 2001, totaled $11 million, resulting in an other underwriting expense ratio of 2.9%.

Liquidity and Capital Resources

Platinum Holdings is a holding company that will conduct no reinsurance operations of its own. All its reinsurance operations will be conducted through its wholly owned operating subsidiaries Platinum US (which it will own through Platinum Ireland and Platinum Finance), Platinum UK (which it will own through Platinum Ireland) and Platinum Bermuda. As a holding company, Platinum Holdings' cash flow will consist primarily of dividends, interest and other permissible payments from its subsidiaries. Platinum Holdings will depend on such payments to receive funds for general corporate purposes and to meet its obligations, including the payment of any dividends to its shareholders.

Our Liquidity Requirements

Our principal consolidated cash requirements are expected to be the payment of dividends to Platinum Holdings' shareholders, the servicing of debt (including interest payments on the senior notes and contract adjustment payments on the purchase contracts included in the equity security units issued in the ESU Offering), the acquisition of and investment in businesses, capital expenditures, premiums retroceded and payment of losses and loss adjustment expenses, policy benefits, brokerage commissions, excise taxes and operating expenses.

We intend to pay dividends on our Common Shares quarterly, beginning in the fourth quarter of 2002, subject to the recommendation of our Board of Directors. Our dividends, if any, will be paid by us in U.S. dollars. Our dividend policy in future periods will depend on a number of factors including our results of operations, our financial condition, our capital and cash requirements, general business conditions, legal, contractual and regulatory restrictions regarding the payment of dividends by us and other factors. See "Dividend Policy."

We will operate a treasury function responsible for managing our future banking relationships, capital raising activities including equity and debt issues, our overall cash, cash pooling and liquidity positions and the payment of internal and external dividends. Our subsidiaries will be responsible for managing local cash and liquidity positions.

Our Sources of Cash

Our sources of funds are expected to consist of premiums written, losses recovered from retrocedents, investment income and proceeds from sales and redemptions of investments.

In addition, we have entered into a 364 day committed credit facility with a group of banks that will permit us to make borrowings of up to $100 million in the aggregate from time to time. The credit facility contains various convenants and agreements, including a requirement that we satisfy specified tangible net worth and leverage ratios. There can be no assurance that we will be able to extend or replace this credit facility upon satisfactory terms when it terminates on June 20, 2003.

Restrictions on Dividend Payments from our Operating Subsidiaries

Bermuda. Bermuda legislation imposes limitations on the dividends that Platinum Bermuda may pay. Under the Bermuda Insurance Act, Platinum Bermuda will be required to maintain a specified solvency margin and a minimum liquidity ratio and will be prohibited from declaring or paying any dividends if doing so would cause Platinum Bermuda to fail to meet its solvency margin and its minimum liquidity ratio. Under the Bermuda Insurance Act, Platinum Bermuda will be prohibited from paying dividends of more than 25% of its total statutory capital and surplus at the end of the previous fiscal year unless it files an affidavit stating that the declaration of such dividends has not caused it to fail to meet its solvency margin and minimum liquidity ratio. The Bermuda Insurance Act will also prohibit Platinum Bermuda from declaring or paying dividends without the approval of the Supervisor of Insurance of Bermuda if Platinum Bermuda failed to meet its solvency margin and minimum liquidity ratio on the last day of the previous fiscal year. Additionally, under the Companies Act, Platinum Bermuda may declare or pay a dividend only if it has no reasonable grounds for believing that it is, or would after the payment, be unable to pay its liabilities as they become due, or that the realizable value of its assets would thereby be less than the aggregate of its liabilities and its issued share capital and share premium accounts. See "Business—Our Business—Regulation—Bermuda."

United States. Platinum US is subject to regulation by the State of Maryland. Under Maryland insurance law, Platinum US may pay dividends out of surplus, provided it must give the Maryland Insurance Commissioner at least thirty days' prior notice before paying an "extraordinary dividend" or making an "extraordinary distribution". Extraordinary dividends and extraordinary distributions are dividends or distributions which, together with any other dividends and distributions paid during the immediately preceding twelve-month period, would exceed the lesser of

(1): ten percent of Platinum US's statutory policyholders' surplus (as determined under statutory accounting principles) as of December 31 of the prior year and
(2): Platinum US's net investment income excluding realized capital gains (as determined under statutory accounting principles) for the twelve-month period ending on

December 31 of the prior year, plus any amounts of net investment income (excluding realized capital gains) in the three preceding years which have not been distributed.

These statutory limitations are subject to change. Platinum US may not pay extraordinary dividends or make extraordinary distributions until either the thirty-day notice period has expired (without the Maryland Insurance Commissioner disapproving such payment) or the Maryland Insurance Commissioner has approved the payment within that period. Extraordinary dividends and extraordinary distributions may only be paid out of earned surplus.

In addition, Platinum US must give ten days' prior notice to the Maryland Insurance Commissioner of its intention to pay any dividend or make any distribution other than an extraordinary dividend or extraordinary distribution. The Maryland Insurance Commissioner has the right to prevent payment of such a dividend or such a distribution if he determines, in his discretion, that after the payment thereof Platinum US's policyholders' surplus would be inadequate or could cause Platinum US to be in a hazardous financial condition.

As it is not engaged in the insurance business, Platinum Finance is not subject to the restrictions on dividend payments or distributions set forth above.

United Kingdom. U.K. law prohibits Platinum UK from declaring a dividend to its stockholders unless it has "profits available for distribution". The determination of whether a company has profits available for distribution is based on its accumulated realized profits less its accumulated realized losses. While the United Kingdom insurance regulatory laws impose no statutory restrictions on a general insurer's ability to declare a dividend, the insurance regulator in the United Kingdom strictly controls the maintenance of each insurance company's solvency margin within its jurisdiction and may restrict Platinum UK from declaring a dividend at a level which the regulator determines would adversely affect Platinum UK's solvency requirements. It is common practice in the United Kingdom to notify the regulator in advance of any significant dividend payment.

Ireland. Platinum Ireland is currently a holding company incorporated under the laws of Ireland. Irish law prohibits Platinum Ireland from declaring a dividend to its stockholders unless it has "profits available for distribution" as determined under Irish law. As Platinum Ireland is not currently a regulated entity, there are no insurance or other regulatory laws applicable to the payment of dividends by Platinum Ireland.

Establishment of Loss Reserves by Our Insurance Subsidiaries

reserves for reported claims, could result in significant upward or downward changes to our financial condition or results of operations in any particular period.

Functional Currency

Our functional currency will be the U.S. dollar. Our operating currency will generally also be the U.S. dollar. However, premiums receivable and losses payable in respect of a portion of our business will be denominated in currencies of other countries, principally the industrialized countries. Consequently, we may, from time to time, experience currency exchange gains and losses that could affect our financial position and results of operations. We do not expect to and as a practical matter will not be able to hedge our non-U.S. dollar currency exposure with respect to potential loss until a loss payable in a non-U.S. dollar currency occurs, after which we may match such liability with assets denominated in the same currency or enter into forward purchase contracts for specific currencies. This type of exposure could be substantial. We also do not intend to hedge our non-U.S. dollar currency exposure with respect to premiums receivable, which will be generally collected over the relevant contract term. We expect to exchange non-U.S. dollar denominated premiums upon receipt. We may make foreign currency investments, generally for the purpose of improving overall portfolio yield.

Investment of Funds

With the exception of cash holdings, our funds will be primarily invested initially in fixed income securities, the market value of which is subject to fluctuation depending on changes in prevailing interest rates. We may in the future elect to also invest a portion of our funds in marketable equity securities. We expect to hedge our investment portfolio against interest rate risk. Nevertheless, an increase in interest rates may result in losses, both realized and unrealized, on our investments.

We do not expect our investment portfolio to include options, warrants, swaps, collars or similar derivative instruments. Our investment policy guidelines will provide that financial futures and options and foreign exchange contracts may not be used in a speculative manner, but may be used, subject to certain numerical limits, only as part of a defensive strategy to protect the market value of the portfolio. Also, we do not expect our portfolio to contain any investments in real estate or mortgage loans.

Posting of Security by Our Non-U.S. Operating Subsidiaries

Platinum UK and Platinum Bermuda are not licensed, approved or accredited as reinsurers anywhere in the United States and therefore, under the terms of most of their contracts in the United States, they will have to provide security to reinsureds to cover unpaid liabilities in a form acceptable to state insurance commissioners. Typically, this type of security will take the form of a letter of credit issued by an acceptable bank, the establishment of a trust, or a cash advance. Platinum UK and Platinum Bermuda are expected to obtain letters of credit through commercial banks. In turn, Platinum UK and Platinum Bermuda will provide the banks security by giving the banks liens over certain of Platinum UK's and Platinum Bermuda's investments.

Capital Expenditures; Inflation

None of Platinum Holdings, Platinum US, Platinum UK and Platinum Bermuda will have any material commitments for capital expenditures upon the completion of the Equity Public Offering.

Platinum US, Platinum UK and Platinum Bermuda will estimate the effect of inflation on their business and reflect these estimates in the pricing of their reinsurance contracts when estimating reserves. The actual effects of inflation on the results of the operating subsidiaries cannot be accurately known until claims are ultimately settled. Levels of inflation also affect investment returns.

Exposures to Market Risk

Market risk can be described as the risk of change in fair value of a financial instrument due to changes in interest rates, equity prices, creditworthiness, foreign exchange rates or other factors. We seek to mitigate that risk by a number of actions, as described below.

Interest Rate Risk

Our exposure to market risk for changes in interest rates will be concentrated in our investment portfolio once we commence operations. Changes in investment values attributable to interest rate changes will be mitigated, however, by corresponding and partially offsetting changes in the economic value of our insurance reserves. This exposure will be monitored through periodic reviews of our consolidated asset and liability positions. Estimates of cash flows, as well as the impact of interest rate fluctuations relating to the investment portfolio and insurance reserves, will be modeled and reviewed periodically.

Credit Risk

Our investment portfolio is expected to include initially fixed maturities and short-term investments, which will be subject to credit risk. This risk is defined as the potential loss in market value resulting from adverse changes in the borrower's ability to repay the debt. Our investment objective will be to earn competitive relative returns by investing in a diversified portfolio of securities. Credit risk will be actively managed through stringent review and analysis of the creditworthiness of all potential investments.

We will also have other receivable amounts subject to credit risk. The most significant of these are reinsurance recoverables. To mitigate the risk of these counterparties' nonpayment of amounts due, we will establish business and financial standards for reinsurer approval, incorporating ratings by major rating agencies and considering then-current market information.

Equity Price Risk

Our investment portfolio may in the future include marketable equity securities, which will be carried on our consolidated balance sheet at market value. These securities have exposure to price risk, which is defined as the potential loss in market value resulting from an adverse change in prices. If we invest in equity securities, our objective with respect to such investments will be to earn competitive relative returns by investing in a diverse portfolio of high-quality, liquid securities. Portfolio characteristics are expected to be analyzed regularly and market risk will be actively managed through a variety of modeling techniques. If we invest in equity securities, our holdings are expected to be diversified across industries, and concentrations in any one company or industry will be limited by parameters established by senior management, as well as by statutory requirements.

Foreign Currency Exposure

Our exposure to market risk for changes in foreign exchange rates will be concentrated in our insurance reserves denominated in foreign currencies. In addition, there may be foreign currency exposure in our investment portfolio related to those investments that are denominated in foreign currencies. Cash flows from foreign operations are expected to be the primary source of funds for purchases of investments denominated in foreign currencies. Those investments will be purchased primarily to hedge insurance reserves and other liabilities denominated in the same currency, effectively reducing foreign currency exchange rate exposure at the Platinum consolidated level.

BUSINESS

Industry Overview

General

Reinsurance is an arrangement in which an insurance company, referred to as the reinsurer, agrees to assume from another insurance company, referred to as the ceding company, all or a portion of the insurance risks that the ceding company has underwritten under one or more insurance contracts. In return, the reinsurer receives a premium for the insured risks that it assumes from the ceding company. Reinsurance, however, does not discharge the ceding company from its liabilities to policyholders. Reinsurance provides ceding insurers with three principal benefits: a reduction in net liability on individual risks, catastrophe protection from large or multiple losses and assistance in maintaining acceptable financial ratios. Reinsurance also provides a ceding company with additional underwriting capacity by permitting it to accept larger risks and write more business than would be possible without an accompanying increase in capital and surplus.

During the period between the time premiums are received by the reinsurer and the time that the reinsurer must pay losses and loss adjustment expenses, the reinsurer has an opportunity to invest the funds received as premiums, less expenses. This investment activity can make a significant contribution to a reinsurer's profitability.

Types of Reinsurance

Property and Casualty Reinsurance

Reinsurance is typically classified into two categories, property and casualty, or non-life, reinsurance and life reinsurance. We intend to write property and casualty reinsurance. We do not currently intend to write any life reinsurance.

Property insurance protects an insured against financial loss arising out of the loss of property caused by an insured peril. Examples of property reinsurance are property catastrophe and property per-risk coverages. Property catastrophe insurance protects an insured against losses arising out of multiple claims for a single event while property per-risk insurance protects an insured against loss arising out of a single claim for a single event.

Casualty insurance protects an insured against financial loss arising out of loss or damage to persons other than the insured or property belonging to a third party. Examples of casualty insurance are general and automobile liability, professional liability, workers' compensation, and accident and health.

Although property reinsurance involves a high degree of volatility, property reinsurance claims are generally reported soon after the event giving rise to the claim and tend to be assessed and paid relatively expeditiously. In comparison, there tends to be a greater time lag between the occurrence, reporting and payment of casualty reinsurance claims. Additionally, as compared with property reinsurance, casualty reinsurance tends to involve greater diversity of exposures and variation in contract terms, pose greater challenges in capturing underwriting information and casualty reinsurance results are also more likely to be affected by the claims handling process.

Excess-of-loss and Proportional Reinsurance

Reinsurance can be written on either an excess-of-loss basis or a pro rata, or proportional, basis. We expect that a substantial majority of the reinsurance we will underwrite will be excess-of-loss reinsurance.

In the case of excess-of-loss reinsurance, the reinsurer, in return for a negotiated premium, assumes all or a specified portion of the ceding company's risks in excess of a specified amount, which amount is referred to as the ceding company's retention or the reinsurer's attachment point,

subject to a negotiated reinsurance contract limit. For example, property catastrophe excess-of-loss reinsurance provides coverage to a primary insurer when aggregate losses and loss adjustment expenses from a single occurrence of a peril covered under a portfolio of primary insurance contracts written by the primary insurer exceed the attachment point specified in the reinsurance contract with the primary insurer. Property per-risk excess-of-loss-reinsurance provides coverage to a primary insurer in excess of its retention level on a single risk. A risk in this context might mean the insurance coverage on a single property location. Because a reinsurer providing excess-of-loss reinsurance does not assume a direct proportion of the ceding company's risk, the premiums that the ceding company pays to the reinsurer are not directly proportional to the premiums that the ceding company receives. Instead, excess-of-loss reinsurance contracts provide a reinsurer flexibility in determining premiums at specific retention levels, independent of the premiums charged by primary insurers, and based upon its own underwriting assumptions.

Excess-of-loss property and casualty reinsurance is often written in layers. One or a group of reinsurers accepts the risk just above the ceding company's retention up to a specified amount, at which point another reinsurer or a group of reinsurers accepts the excess liability up to an additional specified limit or the excess liability reverts to the ceding company. The reinsurer taking on the risk just above the ceding company's retention is typically said to write lower layer excess reinsurance. Lower layers are also referred to as working layers. A claim that reaches just beyond the ceding company's retention will create a claims payment for the lower layer reinsurer, but not for the reinsurers of any higher layers. In a limited number of cases, reinsurance is also written on an aggregate stop-loss basis to protect the ceding company's total portfolio from extraordinary losses resulting from the aggregation of individual risks.

In the case of proportional reinsurance, the reinsurer assumes a predetermined portion of the ceding company's risks under the covered insurance contract or contracts. The frequency of claims under a proportional reinsurance contract is usually greater than under an excess-of-loss contract. Premiums that the ceding company pays to a reinsurer for proportional reinsurance are a predetermined portion of the premiums that the ceding company receives from its insured, consistent with the proportional sharing of risk. In addition, in proportional reinsurance, the reinsurer generally pays the ceding company a ceding commission. The ceding commission is usually based on the ceding company's cost of generating the business being reinsured, which includes commissions, premium taxes and assessments of the ceding company's own operating expenses. A profit commission or increased ceding commission may be included and paid to the ceding company if the loss experience is profitable. The ceding commission may also be affected by competitive factors.

Treaty and Facultative Reinsurance

Reinsurance can be written either through treaty or facultative reinsurance arrangements. In treaty reinsurance, the ceding company cedes, and the reinsurer assumes, a specified portion of a type or category of risks insured by the ceding company. In facultative reinsurance, the ceding company cedes, and the reinsurer assumes, all or part of a specific risk or risks. We plan to underwrite substantially all treaty reinsurance, and we do not expect to underwrite facultative reinsurance except in very limited and opportunistic circumstances.

Generally in the industry, treaty reinsurers do not separately evaluate each of the individual risks assumed under their treaties and are largely dependent on the original risk underwriting decisions made by the ceding company's underwriters. Accordingly, reinsurers will carefully evaluate the ceding company's risk management and underwriting practices, as well as claims settlement practices and procedures, in deciding whether to provide treaty reinsurance and in appropriately pricing the treaty.

Generally, reinsurers who provide facultative reinsurance do so separately from their treaty operations. Facultative reinsurance normally is purchased by ceding companies for risks not covered by their reinsurance treaties, for amounts in excess of the monetary limits of their reinsurance treaties and for unusual and complex risks. In addition, facultative risks often provide coverages for relatively severe exposures which results in greater volatility. Reinsurers who provide facultative coverage solely, or through distinct operations, experience relatively high underwriting expenses and, in particular, personnel costs, because each risk is individually underwritten and administered. The ability to evaluate separately each risk reinsured, however, increases the probability that the reinsurance underwriter can price the contract to reflect more accurately the risks involved. Because of the transactional nature of the business and the greater risks generally involved, margins on facultative business are usually higher than on treaty business.

Non-traditional/Finite Reinsurance

Non-traditional/finite reinsurance involves structured reinsurance solutions tailored to meet an individual cedent's strategic and financial objectives. Property and casualty risks can be reinsured on a non-traditional/finite basis. Often these reinsurance solutions provide reinsurance protection across a company's entire insurance portfolio. For instance, a whole account aggregate stop loss, whether single year or multi-year in design, provides protection for a company from deterioration in its accident year results. Another common solution is a loss portfolio transfer, which can take many forms, and which is frequently used to assist companies in efficiently and effectively exiting lines of business or facilitating insurance entity sales transactions. With increasing frequency, non-traditional/finite reinsurance has been utilized in various ways to assist companies in managing property catastrophe exposures and other loss exposures from single or multiple events which, in the aggregate, could be significant. Because of the constantly changing industry and regulatory framework, as well as the changing market demands facing insurance companies, the approaches utilized in non-traditional/finite programs are constantly evolving and will continue to do so. We expect to be active participants in the non-traditional/finite reinsurance business.

In particular, non-traditional/finite reinsurance products are utilized by customers whose needs may not be met efficiently through traditional reinsurance products, specifically, customers who seek to dampen volatility associated with the insurance or reinsurance pricing cycle, adjust their exposure to specific geographic areas or lines of business, increase their level of retention over a period of time, minimize existing and potential liabilities in connection with extraordinary corporate events, such as a merger or acquisition, and manage their capital during periods of rapid growth. These customers use non-traditional/finite products principally to mitigate volatility in earnings and capital as well as to transfer insurance risks. The structure of the product will depend on whether the concern about volatility relates primarily to statutory capital and loss ratios, or to reported earnings under the customer's accounting basis for investors, e.g., International Accounting Standards, U.S. GAAP or other sovereign GAAP. Income tax treatment will also affect the products' structure. The more widely used finite products have similar features but differing terms and limits, depending on the customer's requirements.

Broker and Direct Reinsurance

Reinsurance can be written through reinsurance brokers or directly with ceding companies. We believe that a ceding company's decision to select either the broker market or the direct market is influenced by various factors including, among others, market capacity, market competition, the value of the broker's advocacy on the ceding company's behalf, the spread of risk, flexibility in the terms and conditions, an ability to efficiently compare the analysis and quotes of several reinsurers, the speed of a reinsurance placement, the historical relationship with the reinsurer and the efficiency of claims settlement with respect to a coverage. Through the use of reinsurance brokers, a reinsurer may be able to avoid the need to develop a large staff dedicated to particular

reinsurance markets and to maintain the flexibility to move into other reinsurance markets when it perceives opportunities. We believe that the use of reinsurance brokers will allow us to avoid the significant fixed cost of maintaining a sales force. We believe that brokers are particularly useful in assisting clients in arranging excess-of-loss reinsurance programs. We expect to underwrite a substantial majority of our reinsurance through brokers and, to a much more limited extent, may also contract directly with ceding companies.

Retrocession

Reinsurers typically purchase reinsurance to cover their own risk exposure or to increase their capacity. Reinsurance of a reinsurer's business is called retrocession. Reinsurance companies cede risks under retrocessional agreements to other reinsurers, known as retrocessionaires, for reasons similar to those that cause primary insurers to purchase reinsurance. These reasons include reducing liability on individual risks, protecting against catastrophic losses, stabilizing financial ratios and obtaining additional underwriting capacity. We plan to purchase and issue retrocessional policies.

Reinsurance Industry Conditions and Trends

The reinsurance industry historically has been cyclical, characterized by periods of price competition due to excessive underwriting capacity as well as periods when shortages of underwriting capacity have permitted favorable pricing.

Cyclical trends in the industry and the industry's profitability can also be affected significantly by volatile and unpredictable developments, including natural and other disasters, such as hurricanes, windstorms, earthquakes, floods, fires, explosions and other catastrophic events, including terrorist attacks, the frequency and severity of which are inherently unpredictable. We believe that property and casualty reinsurance rates often rise in the aftermath of significant catastrophe losses. As claims are reserved, the industry's capacity to write new business diminishes. The industry is also affected by changes in the propensity of courts to expand insurance coverage and grant large damage awards, as well as fluctuations in interest rates and other changes in the economic environment that affect market prices of investments.

As a result of favorable loss levels and strong investment returns beginning in 1995, the reinsurance industry entered a cycle of increased competition and industry capacity, which pushed property and casualty premium rates down. However, in 1999, there were several significant worldwide catastrophic events, which resulted in insured losses of approximately $31 billion. These losses, and the subsequent contraction of capacity in the market, fueled improvements in rates, terms and conditions beginning with January 2000 renewals. These improvements continued in 2001 with a number of catastrophic events in the first half of the year, and were accelerated by the terrorist attack of September 11, 2001. With insured losses estimated to be in the range of $30 billion to $35 billion, the terrorist attack resulted in the largest insured losses ever experienced by the industry. By comparison, the largest insured catastrophic event prior to the attack was Hurricane Andrew in 1992 with $20 billion in estimated losses.

We believe that the insured losses of 2001 have reduced the industry's capacity to write new business. At the same time, it appears that the heightened awareness that commercial properties are exposed to a variety of risks, and the perception that certain regions of the world may be underinsured, have increased the demand for property-related insurance and reinsurance. As a result, with respect to January, April and July 2002 renewals, St. Paul Re experienced substantial rate increases, generally ranging from 20% to 50% depending on the line of business. We expect that the current imbalance between the increased demand for property-related insurance and reinsurance and the reduced supply of this type of coverage will continue to fuel improved rates, terms and conditions for at least the immediate future.

Following the terrorist attack of September 11, 2001, there is uncertainty in the insurance and reinsurance markets about the extent to which future coverages will extend to terrorist acts. There is also uncertainty about the definition of terrorist acts. We believe that coverage of claims that are the result of terrorist acts (as they are ultimately defined by industry and government standards) will generally be excluded from property catastrophe reinsurance contracts covering large commercial risks, above specified property values, but generally will not be excluded for smaller commercial coverages, personal lines or other coverages. Accordingly, we expect that we will incur exposure to terrorist acts. The effect of potential U.S. and other governmental intervention on the insurance and reinsurance markets we serve, including on the extent to which coverage for terrorist acts will be offered by the insurance and reinsurance markets in the future, is uncertain. Coverage for losses resulting from terrorist acts may be offered separately in the reinsurance market, and we may or may not offer such coverage in the future. If our and the insurance industry's attempts to exclude coverage for terrorist acts were to fail, we could incur large unexpected losses if further terrorist attacks occur.

Our Business

General

Platinum Holdings is a newly formed Bermuda insurance holding company. Our objective is to provide on a worldwide basis, through our licensed operating subsidiaries Platinum US, Platinum UK and Platinum Bermuda, property, casualty, marine, accident and health and finite reinsurance coverages to a diverse clientele of insurers and select reinsurers. Platinum UK and Platinum Bermuda are newly formed companies and, as such, have no prior operating history or loss reserve run-off. Platinum US was formed in 1995 and is a licensed insurance company and wholly owned subsidiary of St. Paul incorporated and domiciled in the state of Maryland. Platinum US has been an inactive company with no prior operating history and no exposure to adverse loss development. Upon completion of the Equity Public Offering, we will own Platinum US and Platinum UK through Platinum Ireland, our newly formed and wholly owned intermediate Irish holding subsidiary. We expect that Platinum Ireland will conduct no business operations of its own other than owning Platinum US (through Platinum Finance, which will conduct no business operations of its own other than to raise funds for Platinum US through the issuance of senior notes constituting part of the equity security units offered hereby) and Platinum UK. However, we intend to explore the possibility of using Platinum Ireland as a platform for the development of a reinsurance business concentrating on continental Europe. The following chart summarizes our corporate structure upon completion of the transactions discussed in this prospectus.

We intend to organize our worldwide reinsurance business around the following three operating segments: Global Property and Marine, Global Casualty and Finite Risk. In each of our operating segments we intend to offer our reinsurance solutions to providers of commercial and personal lines of property insurance as well as casualty insurance. We expect to underwrite most of our reinsurance through brokers but we may also contract directly with ceding companies, which will give us the flexibility to pursue business in accordance with our ceding companies' preferred reinsurance purchasing channels. We intend to write substantially all of our reinsurance business through treaties rather than on a facultative basis, and a substantial majority on an excess-of-loss basis rather than on a proportional basis.

We expect to operate principally as a lead or quoting reinsurer on the treaties in which we participate. Generally, the lead or quoting reinsurer negotiates with the ceding company and the broker to establish the proposed terms of coverage, including the premium rate and retention level for excess-of-loss contracts. When not acting as the leading or quoting reinsurer on a particular treaty, we may seek to actively negotiate additional terms or conditions. We believe that, consistent with our underwriting strategy, operating as a lead or quoting reinsurer will allow us to establish walk-away prices and focus on profitability rather than market share. In addition to the benefit of leading negotiations of contract terms and prices, we believe that operating as a lead or quoting reinsurer will aid us in the development of close and continuing relationships with brokers and ceding companies. We also believe that operating as a lead or quoting reinsurer will result in our receiving solicitations from brokers for a broader range of business and provide us with greater access to preferred risks.

Competitive Strengths

We believe that we will have the benefits of being both an established business and a new market entrant because of our management's reputation and St. Paul Re's experience and contacts in the reinsurance market, our unencumbered capital base and our expectation that the Assumed Reinsurance Contracts and our right to seek to renew St. Paul Re's other contracts will be a long-term source of business to us. As a well-capitalized company with reinsurance as our single focus, we believe we will be able to expand our relationships with existing clients and establish relationships with new clients.

We expect our initial portfolio to contain a variety of businesses which we believe would normally take a significant time to develop. Upon completion of the Equity Public Offering, we expect to be diversified across several types of coverage with approximately two-thirds of our premiums coming from traditional property and casualty reinsurance and one-third from finite reinsurance. We believe that the existing portfolio of business generated by St. Paul Re represents a valuable asset given the renewal nature of the reinsurance industry and the importance of continuity of relationships and information.

We believe that the market perceptions and reputation established by St. Paul Re with respect to service and responsiveness will benefit us in light of the transfer of personnel and underwriting activities from St. Paul Re to us. We also believe that we will enjoy a reputation with our brokers and clients for promptly responding to underwriting submissions and consistent underwriting standards that emphasize long term profitability over premium growth or market share.

We believe that the use of reinsurance brokers as our principal source of business provides us with an advantage over direct writers in adjusting treaty participations upward or downward to reflect changing market conditions, as well as discontinuing any participation in treaties if rates and terms are no longer attractive. In addition, we believe that the use of reinsurance brokers will allow us to avoid the significant fixed cost of maintaining a sales force. Furthermore, we believe that access to new opportunities on new treaties for existing clients or new clients are facilitated by using the broker distribution channel, due to the syndicated placement of the business.

Platinum's Strategy

•

Build our future on a strong foundation. We will commence operations with the benefit of the Transferred Business:

•: Renewal Rights and Assumed Reinsurance Contracts. Our initial portfolio will contain a diversity of business that would normally take many years to develop. We will be acquiring St. Paul Re's existing customer lists and the right to seek to renew its continuing in-force reinsurance contracts, which produced 2001 pro forma net premiums written of approximately $1.4 billion. Our business is expected to be diversified between property contracts, which tend to be short-tail in nature (where ultimate losses are known relatively quickly), and casualty contracts, which tend to be long-tail in nature (where ultimate losses may not be known for many years). Property catastrophe reinsurance will be a principal focus and will initially constitute a diversified global book of business in excess of $100 million in annual net premiums written.
•: Fully operational infrastructure. We will select experienced employees from the skilled St. Paul Re employee base. These employees have broker and ceding company relationships and underwriting pricing and claims experience that will allow us to be fully staffed and operational in key underwriting and support functions. We believe that this strong foundation will allow us to offer clients and brokers a full range of products, support and service immediately following the completion of the Equity Public Offering.

•

Add new executive leadership to existing talent. In order to take full advantage of the historical strengths of St. Paul Re, we have significantly strengthened our senior management team with the addition of Mr. Newman and Mr. Fadden. Mr. Newman and Mr. Fadden have extensive experience in leading publicly traded reinsurance companies and intend to implement a number of initiatives to capitalize on the strengths of St. Paul Re to create a more focused and more profitable reinsurance business. We expect these initiatives to include implementing a new underwriting strategy, improving risk management and reducing operating expenses.

•: Focus on profitability, not market share. Our new management team intends to pursue a strategy that emphasizes underwriting discipline and profitability over market share. Key elements of this strategy will be prudent risk selection, appropriate pricing through strict underwriting discipline and adjusting our business mix to respond to changing market conditions. We intend to increase our writing of lines of business, such as property catastrophe excess-of-loss and property risk excess- of-loss, which we believe will contribute to our long-term profitability.
•: Exercise disciplined underwriting and risk management. We intend to exercise risk management discipline by (i) maintaining a diverse spread of risk in our book of business across products and geographic zones, (ii) focusing on excess-of-loss contracts as opposed to proportional contracts, and (iii) reducing our aggregate catastrophe exposure relative to historical levels through more sophisticated management of property catastrophe aggregate exposures.
•: Operate a lean and expense-focused underwriting business. We believe a lean underwriting culture will support our focus on profitability and allow us to be more responsive to changing market conditions. We intend to keep our headcount low and maintain a limited number of offices. We expect to have approximately 150 employees at the completion of the Equity Public Offering. The number of underwriting offices was reduced by St. Paul Re from ten at January 1, 2001 to five as of June 30, 2002. In

addition, we expect to originate most of our business from brokers, rather than directly from ceding companies, which we believe will keep our expenses low.

•: Grow our business by leveraging our global platform. We intend to operate in all three of the world's leading reinsurance markets with offices in New York, London and Bermuda. St. Paul Re has conducted authorized reinsurance activities in the U.S. and London for many years, and has been well established as a lead underwriter in excess casualty, property catastrophe and certain other classes of reinsurance. Our new Bermuda subsidiary will provide us with both a new market in which to write reinsurance and the flexibility to provide reinsurance products that are best facilitated by an offshore company.
•: Operate from a position of financial strength. As a newly formed company, our initial capital position is unencumbered by any development of loss reserves for business written prior to January 1, 2002. We intend to operate the Company with a target capitalization consistent with our ratings objectives. We expect to have between approximately $ million and $ million of equity capital following the Equity Public Offering, the ESU Offering and the St. Paul Investment to support our anticipated underwriting activities. Our investment strategy will focus on security and stability in our investment portfolio by maintaining a diversified portfolio that will consist primarily of investment grade fixed-income securities. We believe these factors, combined with our strict underwriting discipline, will allow us to maintain our strong financial position and to be opportunistic when market conditions are most attractive.

Our Lines of Business

We intend to organize our worldwide reinsurance business around the following three operating segments: Global Property and Marine, Global Casualty and Finite Risk. On the pro forma basis described under "Pro Forma Financial Information", we had net premiums written of $1,382 million for the year ended December 31, 2001, $602 million for the six months ended June 30, 2002, and $583 million for the six months ended June 30, 2001. We expect that our global reinsurance business will be comprised primarily of the types of reinsurance set forth below, which we have grouped in accordance with our three operating segments. The following table sets forth, on a pro forma basis, the distribution by operating segment and by type of reinsurance, of our net premiums written for the year ended December 31, 2001, and the six month periods ended June 30, 2002 and 2001. For a more detailed discussion of the pro forma combined results of underwriting, see "Management's Discussion and Analysis of Pro Forma Financial Condition and Underwriting Results."

			Six Months Ended June 30,
			Six Months Ended June 30,							Year Ended December 31, 2001
			2002			2001				Year Ended December 31, 2001
			$	% Total		$		% Total		$		% Total
						($ in millions)
Global Property and Marine
	Excess-of-loss		162	27	%		132	23	%	$	249	18	%
	Proportional		50	8	%		36	6	%		66	5

		Total Global Property and Marine	212	35	%		168	29	%		315	23

Global Casualty
	Excess-of-loss		197	33	%		208	36	%		440	32
	Proportional		45	7	%		76	13	%		152	11

		Total Global Casualty	242	40	%		284	49	%		592	43

Finite Risk			148	25	%		124	22	%		475	34

	Total		602	100	%	$	576	100	%	$	1,382	100	%

The following table sets forth, on a pro forma basis, the distribution by operating segment and by location of the cedent of our net premiums written for the year ended December 31, 2001, and the six months ended June 30, 2002 and 2001.

			Six Months Ended June 30,
			Six Months Ended June 30,						Year Ended December 31, 2001
			2002			2001			Year Ended December 31, 2001
			$	% Total		$	% Total		$		% Total
						($ in millions)
Global Property and Marine
	United States		112	18	%	91	16	%	$	173	13	%
	International		100	17	%	77	13	%		142	10

		Total Global Property and Marine	212	35	%	168	29	%		315	23

Global Casualty
	United States		203	34	%	230	40	%		485	35
	International		39	6	%	54	9	%		107	8

		Total Global Casualty	242	40	%	284	49	%		592	43

Finite Risk
	United States		89	15	%	67	12	%		266	19
	International		59	10	%	57	10	%		209	15

		Total Finite Risk	148	25	%	124	22	%		475	34

	Total		602	100	%	576	100	%	$	1,382	100	%

Global Property and Marine

The Global Property and Marine operating segment will include principally property and marine reinsurance coverages that will be written both in the United States and international markets. We expect that the majority of the property business will consist of catastrophe excess-of-loss reinsurance treaties. We expect that this global operating segment will also include property per risk excess-of-loss treaties and property pro rata treaties. We expect that marine reinsurance will include coverage for hull and cargo as well as third party marine coverages for "protection and indemnity" and excess liabilities, primarily under excess-of-loss treaties. We may write a limited amount of other types of reinsurance on an opportunistic basis. Following the completion of the Equity Public Offering we expect the proportion of our net premiums written generated by the Global Property and Marine segment to increase relative to 2001 levels.

•: Property. We expect that our property reinsurance activities will emphasize catastrophe excess-of-loss reinsurance. Such contracts will provide a defined limit of liability, permitting us to quantify our aggregate maximum loss exposure. By contrast, maximum liability under pro rata contracts is more difficult to quantify precisely within the occurrence limits that are normally part of the contracts. Quantification of loss exposure will be fundamental to our ability to manage our loss exposure through geographical zone limits and program limits.
In addition, when our pricing standards are met, we may, to a limited extent, write other property coverages, including per risk excess-of-loss or pro rata treaties. In writing per risk excess-of-loss business we intend to avoid lower layers in favor of higher layers. These lines will diversify risk (although they involve some catastrophe exposure) and thus reduce the volatility in results of operations caused by catastrophes.

Excess-of-loss contracts will also help us to control our underwriting results by increasing our flexibility to determine premiums for reinsurance at specific retention levels, independent of the premiums charged by primary insurers, and based upon our own underwriting assumptions. Also, because primary insurers typically retain a larger loss exposure under excess-of-loss contracts, we believe that they have a greater incentive to underwrite risks and adjust losses in a prudent manner.

•: Marine. We intend to provide reinsurance coverage of marine and offshore energy insurance programs. We expect that coverages reinsured will include hull damage, protection and indemnity, cargo damage and general marine liability. We expect that such reinsurance treaties will include excess-of-loss as well as proportional treaties. We will emphasize excess-of-loss treaties that provide for an evaluation using experience and exposure pricing models.

Global Casualty

The Global Casualty segment will include principally general and automobile liability, professional liability, workers' compensation, accident and health and casualty clash coverages. We also expect to include accident and health reinsurance treaties in the form of self-insured aggregate medical stop loss coverages, which go into effect when a self-insuring employer's total group health insurance claims attain a certain level, as well as other types of coverages as opportunities develop. We intend to generally write reinsurance coverage in this segment through excess-of-loss treaties, including umbrella coverages, which protect against losses in excess of amounts covered by other policies, although we expect to reinsure selected classes of casualty business on a pro rata basis, including accident and health business. Following the completion of the Equity Public Offering, we expect the proportion of our net premiums written generated by the Global Casualty segment to decrease relative to 2001 levels.

•: General and Automobile Liability. We intend to reinsure accident and casualty risks and collision damage of motor vehicles. Automobile insurance can include coverage in three major areas—casualty, accident benefits and physical damage. Casualty insurance provides coverage payment for injuries and for property damage to third parties. Accident benefits insurance provides coverage for loss of income and medical and rehabilitation expenses for insured persons who are injured in an automobile accident, regardless of fault. Physical damage insurance provides for payment of damages to an insured automobile arising from a collision with another object or from other risks such as fire or theft.
In addition, we expect to provide a broad range of coverage for reinsurance of industrial, manufacturer, operational, environmental, product and general third party liability. We expect that our general and automobile liability reinsurance products will generally be written on an excess-of-loss basis. We may, however, consider selected accounts to be written on a proportional or pro rata basis to the extent that such business satisfies our profitability standards.

•: Professional Liability. We intend to write reinsurance treaties for professional liability programs, including directors and officers liability insurance and errors and omissions liability insurance. We expect that, in most circumstances, the underlying insurance products will be written on a claims-made form, which requires claims related to the liabilities insured under the policy to be submitted to the insurer while the policy is in force. We intend to employ underwriters and pricing actuaries who specialize in professional liability and we expect to seek to reinsure professional liability programs and lines of casualty business where and to the extent we believe past experience permits a reasonably accurate estimation of premium adequacy. We intend, however, to underwrite new exposures after a comprehensive evaluation of the capability of the ceding company, a clear understanding of the type of product, and establishment of underwriting and operating procedures.
•: Workers' Compensation. We intend that our workers' compensation coverages will provide flexible solutions that can help our clients manage their global workers' compensation risks. We expect to reinsure workers' compensation on a per-claimant basis as well as on a catastrophe occurrence basis. We expect that our workers' compensation reinsurance offerings will range from complete coverage of a full workers' compensation program to specific carve-out coverages that address a client's targeted concerns.
•: Accident and Health. We intend to provide accident and health reinsurance, typically in the form of self-insured aggregate medical stop-loss coverages, referred to as "employers stop loss covers." On a less frequent basis, we also expect to write medical providers stop-loss, first dollar health insurance and other reinsurance of health providers. We expect to rely principally on managing general underwriters as intermediaries in connection with this line of business.
•: Casualty Clash. We expect that our casualty clash coverages will cover losses arising from a single set of circumstances (an occurrence) covered by more than one cedent's insurance policy or multiple claimants on one policy. We expect to limit our exposure to a proportion of the cedent's loss in excess of a specified per occurrence retention up to a specified limit.

Finite Risk

The Finite Risk operating segment will include principally finite reinsurance solutions to cedents whose needs may not be met efficiently through traditional reinsurance products. We intend to focus on providing such clients with customized solutions for their risk management and other financial management needs. Whether working directly with the client or through a broker, we will seek to develop client-specific solutions after spending time with the client to understand its business needs. We intend to take a uniform risk assessment approach throughout our worldwide operations as the classes of risks underwritten through finite products will generally be consistent with the classes covered using traditional products. See "—Underwriting and Risk Management." The four main categories of finite products that we intend to sell are described below:

•: Multi-year excess of loss. These reinsurance contracts often complement cedents' traditional excess-of-loss reinsurance programs. They may involve any type of risk, but most often they cover property and marine. In general, these contracts are designed so that the cedent funds the normal level of loss activity over a multi-year period. The reinsurer charges an additional margin to provide a profit margin and to cover its costs and the risk that losses are worse than normal. This type of product will often carry an up-front premium plus additional premiums which are dependent on the magnitude of losses claimed by the ceding company under the contract. The ceding company generally also participates in a profit sharing arrangement under this type of reinsurance contract if the business covered does not generate excessive losses.
•: Aggregate stop loss. Aggregate stop loss reinsurance contracts provide broad protection against a wide range of contingencies that are difficult to address with traditional reinsurance.

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They can be offered on a single or multi-year basis, and provide either catastrophic or attritional loss protection.

•: Finite quota share. Finite quota share reinsurance contracts limit the reinsurer's underwriting exposure while allowing the cedent surplus and expense ratio relief.
•: Loss portfolio transfer and adverse loss development. These types of reinsurance contracts are considered retroactive reinsurance as they cover past periods for which the loss events have already occurred, but where all claims have not yet been made or paid. Retroactive finite reinsurance products remain an attractive solution for certain clients, who may, for example, wish to exit a particular line of business, facilitate a business acquisition (where the reinsurance contract effectively replaces the seller's requirement to provide a loss reserve guarantee to the purchaser), or stabilize statutory capital. Typically, a loss portfolio transfer will transfer to the reinsurer all risks underwritten, subject to an aggregate loss limit established in the contract. Adverse loss development products provide reinsurance coverage for losses in excess of the carried loss reserves of the ceding company at the transaction date, or in some cases at a mutually agreed attachment point, in excess of existing loss reserves.

Marketing

We intend to market our reinsurance products worldwide through our underwriting offices and non-exclusive relationships with more than 50 of the leading reinsurance brokers active in the U.S. and non-U.S. markets for property catastrophe reinsurance and other categories of reinsurance in which we will be active.

On a pro forma basis, based on net premiums written during the three months ended June 30, 2002, the five brokers from which St. Paul Re derived the largest portions of its business (with the approximate percentage of St. Paul Re's business derived from such brokers and their affiliates) are Aon Corporation (25.5%), Marsh & McLennan Companies (20.9%), Benfield Blanch Inc. (19.6%), Willis Group Holdings (9.4%) and Towers Perrin (3.0%). The loss of any of these top five brokers could have a material effect on the amount of reinsurance business that we obtain and consequently the reinsurance premiums that we receive. On a pro forma basis, during the year ended December 31, 2001, St. Paul Re had in force reinsurance contracts with 146 ceding companies that were not derived from a reinsurance broker; otherwise, products are marketed exclusively through brokers. All brokerage transactions are entered into on an arm's-length basis. During 2001, on a pro forma basis, one ceding insurer accounted for more than 6% of St. Paul Re's premiums written and no other single ceding insurer accounted for more than 3%. Based on the Company's strategy, which includes our intention to employ key St. Paul Re personnel and to maintain our presence in our lines of business, management expects to maintain strong relationships with these brokers.

We expect that brokers will perform data collection, contract preparation and other administrative tasks, enabling us to market our reinsurance products cost effectively by maintaining a small staff. We intend to rely largely on reinsurance brokers to market our products. We believe that by relying largely on reinsurance brokers, we will be able to avoid the expense and regulatory complications of worldwide offices, thereby minimizing fixed costs associated with marketing activities. We believe that by maintaining close relationships with brokers, we will be able to obtain access to a broad range of potential reinsureds.

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The following table sets forth, on a pro forma basis, net premiums written and the percentage of St. Paul Re's premiums allocated to the geographic location of the ceding company for St. Paul Re's aggregate operations. For a more detailed discussion of the pro forma results of underwriting, see "Management's Discussion and Analysis of Pro Forma Financial Condition and Underwriting Results."

	Six Months Ended June 30,
	Six Months Ended June 30,								Year Ended December 31, 2001
	2002				2001				Year Ended December 31, 2001
	$		%		$		%		$		%
	($ in millions)
North America (ex Caribbean)	$	422	70	%	$	397	69	%	$	968	70	%
Caribbean		36	6			29	5			83	6
Latin America		6	1			6	1			14	1
Far East		18	3			29	5			55	4
Continental Europe		36	6			52	9			110	8
United Kingdom		78	13			57	10			138	10
Other		6	1	%		6	1	%		14	1	%

	$	602	100	%	$	576	100	%	$	1,382	100	%

Underwriting and Risk Management

We intend to have a disciplined approach to underwriting and risk management that emphasizes a profit orientation rather than a premium volume or market-share oriented approach. In addition to geographic zones, we intend to seek to limit our overall exposure to risk by limiting the amount of reinsurance we will supply in accordance with a particular program or contract, so as to achieve diversification within and across geographic zones.

We expect our risk management to use a variety of means, including the use of contract terms, diversification criteria and probability analysis and the analysis of comparable historical loss experience. We will monitor concentrations of casualty risk by industry and classes of risk. We intend to estimate the impact of certain catastrophic events using catastrophe modeling software and contract information to evaluate our exposure to losses from individual contracts and in the aggregate. For example, we expect that the majority of the natural catastrophe reinsurance we will write will relate to exposures within the United States, Europe and Japan. Accordingly, we will monitor our exposure to natural catastrophic events that affect these regions, such as U.S. hurricane, California earthquake, European windstorm and Japanese typhoon or earthquake events.

We will seek to limit our potential loss, pre tax, but after reinstatement and other premiums received due to the loss, from a single one-in-250-year catastrophe on a probable maximum loss basis, after giving effect to our retrocessional programs, to no more than 30% of our shareholders' equity. There can be no assurance that our underwriting risk management procedures and our retrocessional programs will successfully limit actual losses to such amount and losses from a single catastrophe may materially exceed such amount. The intended limitation in probable maximum loss exposure will rely significantly on our retrocessional programs and the availability of retrocessional coverage in the future. There have been, and in the future may be, periods when retrocessional coverage is not available at all or at rates and levels which would be acceptable. Loss of all or portions of our retrocessional coverage could subject us to increased exposure, which could be material. A limited number of the Assumed Reinsurance Contracts do not contain loss cap ratios, which means that there is no contractual limit to the losses that we may be required to pay pursuant to such Assumed Reinsurance Contracts.

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Substantially all property reinsurance business with natural peril catastrophe exposure will have occurrence limits. Substantially all high layer property, casualty and marine excess-of-loss business will also contain aggregate limits in the contracts, with limited reinstatements of an occurrence limit, which restore the original limit under the contract after the limit has been depleted by losses incurred on that treaty. We intend to use our proprietary models to assess the pricing adequacy, underwriting profitability and investment returns to be expected from our reinsurance underwriting. We expect that our actuarial and underwriting departments will work together to establish an accurate pricing model for these purposes.

In addition, we will have available for our use the historical loss experience of St. Paul Re to assist us in pricing individual treaties and overall lines of business. We believe that this information provides us with a significant benefit in the underwriting of future contracts and in the renewal thereof. We expect to maintain the normal maximum program limits described under "—Geographic Diversification" below. We will also attempt to distribute our exposure across a range of attachment points, or the amount of claims that have to be borne by the ceding insurer before our reinsurance coverage applies. Attachment points will vary and will be based upon an assessment of the ceding insurer's market share of property perils in any given geographic zone to which the contract relates, as well as the capital needs of the ceding insurer.

Before we review any program proposal, we intend to consider the appropriateness of the cedent, including the quality of its management and its capital and risk management strategy. In addition, we intend to require that each proposed reinsurance program include information on the nature of the perils to be included and detailed aggregate information as to the location or locations of the risks covered under the catastrophe contract. We would also expect to request information on the cedent's loss history for the perils being reinsured, together with relevant underwriting considerations, which would impact exposures to catastrophe reinsurers. We expect to first evaluate exposures on new programs in light of the overall zone limits in any given catastrophe zone, together with program limits and contract limits, to ensure a balanced and disciplined underwriting approach. If the program meets all these initial underwriting criteria, we expect to then evaluate the proposal in terms of its risk/reward profile to assess the adequacy of the proposed pricing and its potential impact on our overall return on capital.

We plan to extensively use sophisticated modeling and other technology in our underwriting process. We expect that each submission received will be registered on the reinsurance data system that we will use for both underwriting and aggregate control purposes. This system will enable both management and underwriters to have on-line information regarding both individual exposures and zonal aggregate concentrations. We expect that submissions will be recorded to determine and monitor their status as being pending, authorized, or bound.

In addition to the reinsurance data system, we expect to use computer modeling to measure and estimate loss exposure under both simulated and actual loss scenarios and in comparing exposure portfolios to both single and multiple events. We expect to contract with Applied Insurance Research for the use of Cattrader and EQE for the use of Equecat, and we also plan to use RMS models as part of our modeling approach. We expect to take an active role in the evaluation of these commercial catastrophe pricing models, providing feedback to the modeling companies to improve the efficiencies of these models. These computer-based loss modeling systems utilize Best's data and direct exposure information obtained from our clients to assess each client's catastrophe management approach and adequacy of their program's protection. We believe that modeling is a very important part of the underwriting criteria for catastrophe exposure pricing. We expect to apply proprietary analysis of the catastrophe exposure to supplement the model output in certain territories. The majority of our expected client base also use one or more of the various modeling consulting firms in their exposure management analysis. In addition, we

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intend to sometimes perform or contract for additional modeling analysis when reviewing our global commitments. We expect that the combination of reinsurance system information, together with the various commercial models we expect to employ, will enable us to monitor and control our acceptance of exposure on a global basis. We also intend to use proprietary risk modeling systems to measure expected losses for perils other than hurricane and earthquake and that include allowances for expenses and profit in pricing.

We expect to seek to limit our overall exposure to risk by pursuing a disciplined underwriting strategy which will limit the amount of reinsurance we will supply in accordance with a particular program or contract so as to achieve diversification within and across geographical zones. Commencing January 2002, St. Paul Re has maintained normal maximum program limits of $5 million on risk programs, $6 million on casualty clash programs and $20 million on property catastrophe programs. In a small number of instances, we may exceed these limits. A limited number of the Assumed Reinsurance Contracts do not contain loss cap ratios, which means that there is no contractual limit to the losses that we may be required to pay pursuant to such Assumed Reinsurance Contracts.

We intend to establish a procedure for underwriting control to ensure that all acceptances are made in accordance with our underwriting policy and aggregate control. We expect that each underwriting individual will be given an underwriting authority limit, and that underwriting amounts above those limits will have to be submitted for approval to the chief underwriting officer.

Generally, about 50% of premiums we write each year are expected to be for contracts which have effective dates in January, about 20% in April, about 20% in July and the remainder at other times throughout the year. Premiums are generally due in installments over the contract term, with each installment generally received within 30 days after the due date.

Geographic Diversification

We intend to seek, based on the location of the risk, to diversify our exposure across geographic zones around the world in order to obtain a favorable spread of risk. We intend to limit the coverage we provide for risks located in particular zones, so as to maintain our aggregate loss exposure from all contracts covering risks believed to be located in that zone, to a predetermined level. We intend to monitor concentrations of risk in any particular geographic area, and to seek to avoid accumulations of property risks located in areas considered to have a higher probability of natural catastrophes, such as the West Coast states, the Gulf Coast and Southeastern United States, as well as the Caribbean, Japan, Northern Europe and other exposed international territories.

We expect to establish the predetermined levels referred to in the prior paragraph annually on the basis of, and as a proportion of, shareholders' equity. If a proposed reinsurance program would cause the limit then in effect to be exceeded, we would expect to decline the program, regardless of its desirability, unless we utilize retrocessional coverage, thereby reducing the net aggregate exposure to the maximum limit permitted, or less. If we were to suffer a net financial loss in any fiscal year, thus reducing shareholders' equity, we would attempt to reduce the limits per zone in the following year, with the possible effect that we would thereafter reduce existing business in a zone exceeding such limit.

We intend to track our catastrophe exposures in all significant countries around the world. We intend to maintain a database of our exposures in each country and to conservatively estimate our probable maximum loss in each country for the perils to which that country is subject (e.g., earthquakes, hurricanes, and floods.) We expect to base our estimates on catastrophe models and underwriting assessments. In addition, we expect to use catastrophe modeling to review exposures

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on events that cross country borders such as wind events that may affect the Caribbean and Florida or the United Kingdom and Continental Europe. The largest exposures are expected to be in the United States for earthquake and hurricane, in the United Kingdom for flood and wind, and in Japan for earthquake and wind.

We recognize that events may affect more than one zone, and to the extent we intend to reinsure a ceding insurer with a loss exposure in more than one zone, we intend to consider such potential loss in testing its limits in all such affected zones. For example, a program with worldwide exposure may be subject to limits in the North America zones as well as other zones around the world, as applicable. This results in very substantial "double-counting" of exposures in determining utilization of an aggregate within a given zone. Consequently, the total sum insured may be less than the sums of utilized aggregates for all of the zones.

Retrocessional Reinsurance

We expect to obtain retrocessional reinsurance to, among other things, reduce volatility in general, and to increase our capacity offered on individual reinsurance programs.

The major types of retrocessional coverage we expect to purchase will include the following:

•: specific coverage for certain property, marine and casualty exposures,
•: catastrophe coverage for property business, and
•: corporate level coverage for the potential accumulation or aggregation of exposures across some or all of our operations.

We may purchase further retrocessional coverage on an opportunistic basis.

We expect that our decisions with respect to purchasing retrocessional coverage will consider both the potential coverage and market conditions with respect to the pricing, terms, conditions and availability of such coverage, with the aim of securing cost-effective protection. We expect that the level of retrocessional coverage will vary over time, reflecting the underwriter's and/or our view of the changing dynamics of both the underlying exposure and the reinsurance markets.

We expect that, prior to entering into a retrocessional agreement, we will analyze the financial strength and rating of each retrocessionaire. We expect that retrocessional coverage will generally be derived from companies rated "A" or better by Best's. Afterwards, the financial performance and rating status of all material retrocessionaires will be monitored. Retrocession agreements do not relieve us from our obligations to the insurers and reinsurers from whom we assume business. The failure of retrocessionaires to honor their obligations could result in losses to us.

For 2002, St. Paul Re purchased an accident year aggregate excess-of-loss retrocession agreement which provides up to $200 million of coverage if the accident year loss ratio exceeds a specified loss ratio attachment point for the 2002 accident year. This retrocessional agreement will cover risks retained by St. Paul Re and risks underwritten by Platinum with respect to the 2002 accident year. The attachment point is net of inuring retrocessions and includes adjustable premium provisions that effectively cause the Company to pay to the retrocessionaire, on a pre-tax income basis, up to 50% of such ceded losses, through additional premiums.

Platinum Bermuda expects to reinsure up to approximately 70% of Platinum US's and a portion of Platinum UK's reinsurance written by each of them after the Public Offering excluding business subject to the Quota Share Retrocession Agreements. St. Paul will write reinsurance in the United Kingdom and reinsure it 100% to us until December 31, 2002 or the date on which Plantinum UK

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receives its authorization (if earlier). For a discussion of potential future limits on the portion of the reinsurance written by Platinum UK after the Equity Public Offering which can be reinsured to Platinum Bermuda, see "Business—Our Business—Regulation—U.K. Regulation—Proposed Limits on Concentration of Reinsurance Exposures."

Claims Administration

With respect to the Assumed Reinsurance Contracts, claims will be managed by St. Paul's claims department, with our supervision and management, pursuant to a Run-off Services Agreement described below under "Certain Relationships and Related Transactions—Run-off Services Agreements." We will reimburse St. Paul for costs of managing these claims. Platinum may, at its discretion and expense, take over administration of any specific claims. Our own claims department will administer claims arising under our contracts other than the Assumed Reinsurance Contracts.

The responsibilities of the claims department will include reviewing initial loss reports, monitoring claims handling activities of clients, requesting additional information where appropriate, establishing initial case reserves and approving payment of individual claims. We expect that authority for payment and establishing reserves will always be established in levels, depending upon rank and experience.

In addition to managing reported claims and conferring with ceding companies on claims matters, we expect that the claims department will conduct periodic audits of specific claims and the overall claims procedures of our clients at the offices of ceding companies. We expect to rely on the ability to monitor effectively the claims handling and claims reserving practices of ceding companies in order to establish the proper reinsurance premium for reinsurance agreements and to establish proper loss reserves. Moreover, prior to accepting certain risks, we expect that our underwriters will often request that the claims department conduct pre-underwriting claims audits of prospective ceding companies. Through these audits, we intend to attempt to evaluate the ceding company's claims-handling practices, including the organization of their claims department, their fact-finding and investigation techniques, their loss notifications, the adequacy of their reserves, their negotiation and settlement practices and their adherence to claims-handling guidelines. Following these audits, we expect that the claims department will provide feedback to the ceding company, including an assessment of the claims operation and, if appropriate, recommendations regarding procedures, processing and personnel.

Reserves

We are required by applicable insurance laws and regulations and U.S. GAAP to establish reserves for payment of losses and loss adjustment expenses that will arise from our products. These reserves will be balance sheet liabilities representing estimates of future amounts required to pay losses and loss adjustment expenses for insured claims which have occurred at or before the balance sheet date, whether already known to us or not yet reported. Significant periods of time can elapse between the occurrence of an insured claim, its reporting by the insured to the primary insurance company and from the insurance company to its reinsurance company. Loss reserves fall into two categories: reserves for reported losses and loss adjustment expenses and reserves for incurred but not reported, or IBNR, losses and loss adjustment expenses.

Upon receipt of a notice of claim from a ceding company, we will establish a case reserve for the estimated amount of the ultimate settlement. Case reserves are usually based upon the amount of reserves reported by the primary insurance company and may subsequently be supplemented or reduced as deemed necessary by our claims department. We will also establish reserves for loss

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amounts incurred but not yet reported, including expected development of reported claims. These IBNR reserves will include estimated legal and other loss adjustment expenses. We will calculate IBNR reserves by using generally accepted actuarial techniques. We will utilize actuarial tools that rely on historical and pricing information and statistical models as well as our pricing analyses. We will revise these reserves for losses and loss adjustment expenses as additional information becomes available and as claims are reported and paid.

Loss reserves will represent our estimates, at a given point in time, of the ultimate settlement and administration costs of claims incurred, and it is possible that the ultimate liability may exceed or be less than such estimates. Such estimates will not be precise because, among other things, they are based on predictions of future developments and estimates of future trends in claim severity and frequency and other variable factors such as inflation and currency exchange rates. During the claim settlement period, it will often become necessary to refine and adjust the estimates of liability on a claim either upward or downward, and any such adjustment would affect our results of operations in the period when the adjustment is determined. Even after such adjustments, ultimate liability may materially exceed or be less than the revised estimates. In contrast to casualty losses, which frequently can be determined only through lengthy, unpredictable litigation, property losses tend to be reported promptly and settled within a shorter period of time.

Our estimates of reserves from reported and unreported losses and related reinsurance recoverable assets will be reviewed and updated. Adjustments resulting from changes in our estimates will be reflected in current income. The analysis relies upon the basic assumption that past experience, adjusted for the effect of current developments and likely trends, is an appropriate basis to estimate our current loss and loss adjustment expense liabilities. Because estimation of loss reserves is an inherently uncertain process, quantitative techniques frequently have to be supplemented by professional and managerial judgment. In addition, trends that have affected development of reserves in the past may not necessarily occur or affect reserve development to the same degree in the future.

The uncertainty inherent in loss estimation is particularly pronounced for long-tail lines such as umbrella, general and professional liability and automobile liability, where information, such as required medical treatment and costs for bodily injury claims, will only emerge over time. In the overall reserve setting process, provisions for economic inflation and changes in the social and legal environment are considered. The uncertainty inherent in the reserving process for primary insurance companies is even greater for the reinsurer. This is because of, but not limited to, the time lag inherent in reporting information from the insurer to the reinsurer and differing reserving practices among ceding companies. As a result, actual losses and loss adjustment expenses may deviate, perhaps materially, from expected ultimate costs reflected in our current reserves.

In setting reserves, we expect to utilize the same integrated, multi-disciplinary approach that we expect to use to establish our reinsurance prices. We expect that, after an initial analysis by members of our actuarial staff, preliminary results will be shared with appropriate underwriters, pricing actuaries, claims and finance professionals and, as appropriate, senior management. Final actuarial recommendations will incorporate feedback from these professionals. To the extent reserves prove to be insufficient to cover actual losses and loss adjustment expenses after taking into account available retrocessional coverage, we would have to augment such reserves and incur a charge to earnings in the period during which such reserves are augmented that could be material.

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losses incurred up to the reporting date may be set aside, with no allowance for the provision of a contingency reserve to account for expected future losses. Losses arising from future events will be estimated and recognized at the time the loss is incurred and could be substantial.

Investments

General Guidelines. We intend to develop investment guidelines for the management of our investment portfolio by third party investment managers. Although these guidelines are expected to stress diversification of risk, preservation of capital and market liquidity, investments will be subject to market-wide risks and fluctuations, as well as risks inherent in particular securities. The primary objective of the portfolio, to be set forth in the guidelines, will be to maximize investment returns consistent with appropriate safety, diversification, tax and regulatory considerations and to provide sufficient liquidity to enable us to meet our obligations on a timely basis. These guidelines will be subject to oversight and change at the discretion of our Board of Directors.

Our investment strategy will take into consideration the risks inherent in property catastrophe and other reinsurance. For this reason management expects that our investment policy will be conservative with a strong emphasis on high quality, fixed maturity investments. We expect that the guidelines will include limitations with respect to the maximum effective maturity. The duration of the portfolio will vary according to decisions taken by the investment advisors on the outlook for interest rate movements, subject to limitations set forth in the guidelines. The duration limitations set forth in the guidelines are expected to take into consideration the estimated duration of the reinsurance liabilities in the business.

Initially, we expect to invest only in investment grade securities. We do not currently intend to invest any of our portfolio in equity securities, although we may do so in the future. We do not intend to invest in real estate or other classes of alternative investments. We expect that our investment guidelines will contain restrictions and limitations designed to provide diversification across our portfolio, including limitations on the portion of the portfolio that may be invested in the securities of any single issue or issuer, with the exception of sovereign governments or agencies, including supernational agencies, with prescribed minimum ratings. Our investment managers may be instructed to invest some of the investment portfolio in currencies other than U.S. dollars based upon the business we anticipate writing, the exposures and loss reserves on our books, or regulatory requirements. We expect that our investment guidelines will provide that financial futures and options and foreign exchange contracts may not be used in a speculative manner but may be used, subject to certain numerical restrictions set by the Board of Directors, only as part of a defensive strategy to protect the market value of investments.

Insurance company investments must comply with applicable laws and regulations which prescribe the kind, quality and concentration of investments. In general, these laws and regulations permit investments, within specified limits and subject to some qualifications, in federal, state and municipal obligations, corporate bonds, preferred and common equity securities, mortgage loans, real estate and some other investments.

Investment Management Agreement. We expect to enter into an investment management agreement, effective upon completion of the Equity Public Offering, with Alliance Capital Management L.P., which will provide investment advisory services to us.

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Valuation. We expect to classify our entire investment portfolio as available-for-sale. All of our fixed income securities will be carried at their estimated fair value, with the difference between amortized cost and the fair value, net of any deferred taxes, to be charged or credited directly to our shareholders' equity. We will calculate the fair value based on quoted market prices, as reported by reputable market data providers such as Bloomberg, Reuters or Telerate. If quoted market prices are not available, fair values will be estimated either based on values obtained from independent pricing services or on a cash flow estimate. Cash equivalents and short-term investments will be carried at cost, which we expect will approximate fair value. Realized gains and losses on disposal of investments will be determined based upon specific identification of the cost of investments sold and will be recorded in our statements of operations. We will monitor the unrealized difference between the cost and the estimated fair value of the securities in our portfolio. If the value of any of our investments declines in a manner that we believe is other than temporary, we will write down that investment and will record a realized loss on our statement of operations.

Competition

The property and casualty reinsurance industry is highly competitive and, except for regulatory considerations, there are relatively few barriers to entry. We will compete with insurers and reinsurers worldwide, many of which have greater financial, marketing and management resources than ours. Some of our competitors are large financial institutions who have reinsurance divisions, while others are specialty reinsurance companies. Financial institutions have also created alternative capital market products that compete with reinsurance products, such as reinsurance securitization. Our principal competitors vary by type of business. Bermuda-based reinsurers are significant competitors on property catastrophe business. Lloyd's of London syndicates are significant competitors on marine business. On international business, the large European reinsurers are significant competitors. Large U.S. direct reinsurers, as well as lead U.S.-based broker market reinsurers, are significant competitors on U.S. casualty business. On an overall basis, we expect that our most significant competitors will include General Re, Munich Re, Swiss Re, Employers Re, Lloyd's of London, XL Capital, ACE, Converium Holding, Everest Re and PartnerRe.

Recently, several individuals and companies in the reinsurance industry have established new, well-capitalized Bermuda-based reinsurers to benefit from improved market conditions following the September 11, 2001 terrorist attack, and several existing competitors have raised additional capital or have announced plans to do so. Many of the reinsurers who have entered the reinsurance markets have or could have more capital than we will have. In addition, there may be established companies or new companies of which we are not aware that may be planning to commit capital to this market. Competition in the types of reinsurance business that we underwrite is based on many factors, including premium charges and other terms and conditions offered, services provided, ratings assigned by independent rating agencies, speed of claims payment, claims experience, perceived financial strength and experience and reputation of the reinsurer in the line of reinsurance to be written. The full effect of this additional capital on the reinsurance market and on the terms and conditions of the reinsurance contracts of the types we expect to write may not be known for some time.

The reinsurance industry is highly concentrated. We estimate that, based on 2000 net premiums written, the four largest reinsurers currently have a market share of approximately 49%, and the next ten largest property and casualty reinsurers currently have a market share of approximately 30%. Reinsurance companies have sought in recent years to expand their existing markets, obtain critical mass in new markets, including life reinsurance, and further diversify risk. At the same time, consolidation in the worldwide insurance industry has created a smaller group of large ceding companies that are retaining an increasing proportion of their business.

We are aware of a number of initiatives by traditional as well as new capital market participants to produce alternative products (such as reinsurance securitizations, catastrophe bonds and various

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derivatives such as swaps) that may compete with certain types of reinsurance, such as property catastrophe. Over time, these numerous initiatives could significantly affect supply, pricing and competition in our industry.

Ratings

Best's is generally considered to be a significant rating agency with respect to the evaluation of insurance and reinsurance companies. Best's ratings are based on a quantitative evaluation of performance with respect to profitability, leverage and liquidity and a qualitative evaluation of spread of risk, reinsurance program, investments, reserves and management. Insurance ratings are used by insurers and reinsurance intermediaries as an important means of assessing the financial strength and quality of reinsurers. In addition, a ceding company's own rating may be adversely affected by the lack of a rating of its reinsurer. Therefore, the lack of a rating may dissuade a ceding company from reinsuring with us and may influence a ceding company to reinsure with a competitor of ours that has an insurance rating.

Employees

Currently, we employ Jerome T. Fadden, our President and Chief Executive Officer. None of our employees is expected to be subject to collective bargaining agreements. We expect to employ approximately 150 employees of St. Paul Re.

Mr. Fadden has obtained a temporary work permit, and we are seeking longer-term work permits from the Bermuda authorities for him as well as for William A. Robbie, Michael E. Lombardozzi and any other employees of Platinum Holdings or Platinum Bermuda who are not Bermuda citizens. Permits obtained will expire at various times over the next several years. We have no reason to believe that these permits would not be extended upon request at their respective expirations. However, the Bermuda government recently announced a new policy that places a six-year term limit on individuals with work permits, subject to certain exceptions for key employees.

Subsidiaries

Platinum UK and Platinum Bermuda are wholly owned operating subsidiaries of Platinum Holdings. Platinum UK was formed as a U.K. company on April 10, 2002, and Platinum Bermuda was formed as a Bermuda company on May 9, 2002. Platinum US was formed as a Maryland company in 1995 and is a wholly owned subsidiary of St. Paul. We own Platinum UK through Platinum Ireland and, upon completion of the Equity Public Offering, will own Platinum US through Platinum Finance, which will be a wholly owned subsidiary of Platinum Ireland, our wholly owned intermediate holding subsidiary. Platinum Finance was formed as a Delaware corporation on May 10, 2002. Platinum Ireland was formed as an Irish company on May 3, 2002. Platinum Holdings will enter into a capital support agreement for the benefit of one or more of our operating company subsidiaries, the effect of which is to assure that, at all times, those subsidiaries will have adequate capital and surplus.

Our Facilities

Platinum Holdings' registered office is located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. We expect to enter into a lease agreement in Bermuda for approximately 5,000 to 10,000 square feet of office space. We will sublet a portion of the office space at that location to Platinum Bermuda for use as its principal offices.

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The principal offices of Platinum US will be located at 195 Broadway, New York, New York, where Platinum US will sub-lease from St. Paul approximately 50,000 square feet of office space. The term of the lease ends January 1, 2003. We are currently exploring the possibility of leasing space at 195 Broadway after January 1, 2003 and are also considering options to replace the office space at 195 Broadway with a new facility.

We expect that the principal offices of Platinum UK will be located at 122 Leadenhall Street, London, where (subject to landlord's consent) St. Paul will sub-let to Platinum UK approximately 9,000 square feet of office space. The term of the sub-lease is expected to end in 2008.

Platinum US will enter into sub-lease agreements or assignments of leases with St. Paul with respect to approximately 4,000 square feet of office space in Chicago, 6,300 square feet of office space in Miami and expects to enter into a sub-lease or assignment of lease of approximately 600 square feet of office space in Tokyo. The terms of these leases will end in 2005, 2006 and 2003 respectively.

Legal Proceedings

In the normal course of business, we may become involved in various claims and legal proceedings. We are not currently aware of any pending or threatened material litigation.

Regulation

General

The business of reinsurance is regulated in most countries, although the degree and type of regulation varies significantly from one jurisdiction to another. Reinsurers are generally subject to less direct regulation than primary insurers. In Bermuda, we operate under relatively less intensive regulatory regimes. However, in the United States and in the United Kingdom licensed reinsurers must comply with financial supervision standards comparable to those governing primary insurers. Accordingly, Platinum US and Platinum UK are subject to extensive regulation under applicable statutes. In the United States, those statutes delegate regulatory, supervisory and administrative powers to state insurance commissioners.

Potential Legislative and Industry Changes

We are aware of a number of new, proposed or potential legislative or industry changes that may impact upon the worldwide demand for reinsurance.

•: Following the September 11, 2001 terrorist attack, various proposed legislation was introduced in the U.S. Congress designed to ensure the availability of insurance coverage for terrorist acts. Legislation has been adopted in the U.S. House of Representatives designed, among other things, to provide federal government loans over a short-term period to commercial insurers and reinsurers for funding losses arising from terrorist acts against U.S. properties, which loans would be repaid through industry assessments and, if losses exceed a threshold, policyholder assessments. Similar, alternative legislation has been adopted in the U.S. Senate; the Senate legislation provides for direct government assistance to commercial insurers and reinsurers for covered losses that exceed a per-company "deductible." Adoption of legislation may also provide insurance and reinsurance capacity in the markets and to the customers we expect to target and regulate the terms of insurance and reinsurance capacity and reinsurance policies in a manner which could materially adversely affect us, directly or indirectly, by requiring coverage for terrorist acts to be offered by insurers and/or reinsurers, benefiting our competitors, reducing the demand for reinsurance or benefiting insurers as compared to reinsurers such as us, providing sources of liquidity to U.S.-based companies, or disproportionately benefiting U.S. or other foreign countries' companies over Bermuda-based companies such as ourselves. Legislation may be introduced in other jurisdictions.

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•: Over the last few years capital markets participants, including exchanges and financial intermediaries, have developed financial products such as risk securitizations, intended to compete with traditional reinsurance. We are also aware of many potential initiatives by capital market participants to produce additional alternative products that may compete with the existing catastrophe reinsurance markets.

We are unable to predict the extent to which the foregoing new, proposed or potential initiatives may affect the demand for our products or the risks which may be available for us to consider underwriting.

Bermuda

As a holding company, Platinum Holdings is not subject to Bermuda insurance regulations.

The Insurance Act, which regulates the insurance business of Platinum Bermuda, provides that no person may carry on any insurance business in or from within Bermuda unless registered as an insurer under the Insurance Act by the Bermuda Monetary Authority, which is responsible for the day-to-day supervision of insurers. Under the Insurance Act, insurance business includes reinsurance business. The Authority, in deciding whether to grant registration, has broad discretion to act as the Authority thinks fit in the public interest. The Authority is required by the Insurance Act to determine whether the applicant is a fit and proper body to be engaged in the insurance business and, in particular, whether it has, or has available to it, adequate knowledge and expertise. The registration of an applicant as an insurer is subject to its complying with the terms of its registration and such other conditions as the Authority may impose from time to time. Platinum Bermuda has been registered with the Authority.

An Insurance Advisory Committee appointed by the Bermuda Minister of Finance advises the Authority on matters connected with the discharge of the Authority's functions and sub-committees thereof supervise and review the law and practice of insurance in Bermuda, including reviews of accounting and administrative procedures. The day-to-day supervision of insurers is the responsibility of the Bermuda Registrar of Companies.

The Insurance Act imposes on Bermuda insurance companies solvency and liquidity standards and auditing and reporting requirements and grants to the Authority powers to supervise, investigate and intervene in the affairs of insurance companies. Certain significant aspects of the Bermuda insurance regulatory framework are set forth below.

Classification of Insurers. The Insurance Act distinguishes between insurers carrying on long-term business and insurers carrying on general business. There are four classifications of insurers carrying on general business with Class 4 insurers subject to the strictest regulation. Platinum Bermuda is registered as a Class 4 insurer and is regulated as such under the Insurance Act.

Cancellation of Insurer's Registration. An insurer's registration may be canceled by the Authority on certain grounds specified in the Insurance Act, including failure of the insurer to comply with its obligations under the Insurance Act or if, in the opinion of the Authority, the insurer has not been carrying on business in accordance with sound insurance principles.

Principal Representative. An insurer is required to maintain a principal office in Bermuda and to appoint and maintain a principal representative in Bermuda. For the purpose of the Insurance Act, the principal office of Platinum Bermuda is at our principal executive offices in Bermuda, and Platinum Bermuda's principal representative will be our President and Chief Executive Officer. Without a reason acceptable to the Authority, an insurer may not terminate the appointment of its principal representative, and the principal representative may not cease to act as such, unless 30 days' notice in writing to the Authority is given of the intention to do so. It is the duty of the principal representative, within 30 days of reaching the view that there is a likelihood of the insurer

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for which the principal representative acts becoming insolvent or that a reportable "event" has, to the principal representative's knowledge, occurred or is believed to have occurred, to make a report in writing to the Authority setting out all the particulars of the case that are available to the principal representative. Examples of such a reportable "event" include failure by the insurer to comply substantially with a condition imposed upon the insurer by the Authority relating to a solvency margin or liquidity or other ratio.

Independent Approved Auditor. Every registered insurer must appoint an independent auditor who will annually audit and report on the statutory financial statements and the statutory financial return of the insurer, both of which, in the case of Platinum Bermuda, are required to be filed annually with the Authority. The independent auditor of Platinum Bermuda must be approved by the Authority and may be the same person or firm which audits Platinum Bermuda's financial statements and reports for presentation to its shareholders. Platinum Bermuda's independent auditor is KPMG LLP.

Loss Reserve Specialist. As a registered Class 4 insurer, Platinum Bermuda will be required to submit an opinion of its approved loss reserve specialist with its statutory financial return in respect of its loss and loss adjustment expense provisions. The loss reserve specialist, who will normally be a qualified casualty actuary, must be approved by the Authority. Neal J. Schmidt, who will be the Chief Actuary of Platinum US, has been approved to act as Platinum Bermuda's loss reserve specialist.

Statutory Financial Statements. An insurer must prepare annual statutory financial statements. The Insurance Act prescribes rules for the preparation and substance of such statutory financial statements (which include, in statutory form, a balance sheet, an income statement, a statement of capital and surplus and notes thereto). The insurer is required to give detailed information and analyses regarding premiums, claims, reinsurance and investments. The statutory financial statements are not prepared in accordance with U.S. GAAP and are distinct from the financial statements prepared for presentation to the insurer's shareholders under the Companies Act, which financial statements will be prepared in accordance with U.S. GAAP. Platinum Bermuda, as a general business insurer, will be required to submit the annual statutory financial statements as part of the annual statutory financial return. The statutory financial statements and the statutory financial return do not form part of the public records maintained by the Authority.

Annual Statutory Financial Return. Platinum Bermuda is required to file with the Authority a statutory financial return no later than four months after its financial year end (unless specifically extended). The statutory financial return for an insurer includes, among other matters, a report of the approved independent auditor on the statutory financial statements of such insurer, solvency certificates, the statutory financial statements themselves, the opinion of the loss reserve specialist and a schedule of reinsurance ceded. The solvency certificates must be signed by the principal representative and at least two directors of the insurer who are required to certify, among other matters, whether the minimum solvency margin has been met and whether the insurer complied with the conditions attached to its certificate of registration. The independent approved auditor is required to state whether in its opinion it was reasonable for the directors to so certify. Where an insurer's accounts have been audited for any purpose other than compliance with the Insurance Act, a statement to that effect must be filed with the statutory financial return.

Minimum Solvency Margin and Restrictions on Dividends and Distributions. Under the Insurance Act, the value of the general business assets of a Class 4 insurer, such as Platinum

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Bermuda, must exceed the amount of its general business liabilities by an amount greater than the prescribed minimum solvency margin. Platinum Bermuda:

(1)

is required, with respect to its general business, to maintain a minimum solvency margin equal to the greatest of:

(A): $100,000,000;
(B): 50% of net premiums written (being gross premiums written less any premiums ceded by Platinum Bermuda, but Platinum Bermuda may not deduct more than 25% of gross premiums when computing net premiums written); and
(C): 15% of loss and other insurance reserves;

(2): is prohibited from declaring or paying any dividends during any financial year if it is in breach of its minimum solvency margin or minimum liquidity ratio or if the declaration or payment of such dividends would cause it to fail to meet such margin or ratio (and if it has failed to meet its minimum solvency margin or minimum liquidity ratio on the last day of any financial year, Platinum Bermuda is prohibited, without the approval of the Authority, from declaring or paying any dividends during the next financial year);
(3): is prohibited from declaring or paying in any financial year dividends of more than 25% of its total statutory capital and surplus (as shown on its previous financial year's statutory balance sheet) unless it files with the Authority (at least seven days before payment of such dividends) an affidavit stating that it will continue to meet the required margins;
(4): is prohibited, without the approval of the Authority, from reducing by 15% or more its total statutory capital as set out in its previous year's financial statements, and any application for such approval must include an affidavit stating that it will continue to meet the required margins; and
(5): is required, at any time it fails to meet its solvency margin, within 30 days (45 days where total statutory capital and surplus falls to $75 million or less) after becoming aware of that failure or having reason to believe that such failure has occurred, to file with the Authority a written report containing certain information.

Additionally, under the Companies Act, Platinum Holdings and Platinum Bermuda may declare or pay a dividend only if Platinum Holdings or Platinum Bermuda, as the case may be, has no reasonable grounds for believing that it is, or would after the payment be, unable to pay its liabilities as they become due, or that the realizable value of its assets would thereby be less than the aggregate of its liabilities and its issued share capital and share premium accounts.

Minimum Liquidity Ratio. The Insurance Act provides a minimum liquidity ratio for general business insurers. An insurer engaged in general business is required to maintain the value of its relevant assets at not less than 75% of the amount of its relevant liabilities. Relevant assets include cash and time deposits, quoted investments, unquoted bonds and debentures, first liens on real estate, investment income due and accrued, accounts and premiums receivable and reinsurance balances receivable. There are certain categories of assets which, unless specifically permitted by the Authority, do not automatically qualify as relevant assets, such as unquoted equity securities, investments in and advances to affiliates and real estate and collateral loans. The relevant liabilities are total general business insurance reserves and total other liabilities less deferred income tax and sundry liabilities (by interpretation, those not specifically defined).

Supervision, Investigation and Intervention. The Authority may appoint an inspector with extensive powers to investigate the affairs of an insurer if the Authority believes that an investigation is required in the interest of the insurer's policyholders or persons who may become policyholders. In order to verify or supplement information otherwise provided to the Authority, the Authority may

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direct an insurer to produce documents or information relating to matters connected with the insurer's business.

If it appears to the Authority that there is a risk of the insurer becoming insolvent, or that it is in breach of the Insurance Act or any conditions imposed upon its registration, the Authority may, among other things, direct the insurer (1) not to take on any new insurance business, (2) not to vary any insurance contract if the effect would be to increase the insurer's liabilities, (3) not to make certain investments, (4) to realize certain investments, (5) to maintain in, or transfer to the custody of, a specified bank, certain assets, (6) not to declare or pay any dividends or other distributions or to restrict the making of such payments and/or (7) to limit its premium income.

Disclosure of Information. In addition to powers under the Insurance Act to investigate the affairs of an insurer, the Authority may require certain information from an insurer (or certain other persons) to be produced to it. Further, the Authority has been given powers to assist other regulatory authorities, including foreign insurance regulatory authorities, with their investigations involving insurance and reinsurance companies in Bermuda but subject to restrictions. For example, the Authority must be satisfied that the assistance being requested is in connection with the discharge of regulatory responsibilities of the foreign regulatory authority. Further, the Supervisor must consider whether to cooperate is in the public interest. The grounds for disclosure are limited and the Insurance Act provides sanctions for breach of the statutory duty of confidentiality.

Certain Other Considerations. Platinum Holdings and Platinum Bermuda will each also need to comply with the provisions of the Companies Act regulating the payment of dividends and making of distributions from contributed surplus. A company is prohibited from declaring or paying a dividend, or making a distribution out of contributed surplus, if there are reasonable grounds for believing that: (a) the company is, or would after the payment be, unable to pay its liabilities as they become due, or (b) the realizable value of the company's assets would thereby be less than the aggregate of its liabilities and its issued share capital and share premium accounts.

Although Platinum Bermuda is incorporated in Bermuda, it is classified as a non-resident of Bermuda for exchange control purposes by the Authority. Pursuant to its non-resident status, Platinum Bermuda may hold any currency other than Bermuda Dollars and convert that currency into any other currency (other than Bermuda Dollars) without restriction.

As "exempted" companies, Platinum Holdings and Platinum Bermuda may not, without the express authorization of the Bermuda legislature or under a license granted by the Minister of Finance, participate in certain business transactions, including: (1) the acquisition or holding of land in Bermuda (except that held by way of lease or tenancy agreement which is required for its business and held for a term not exceeding 50 years, or which is used to provide accommodation or recreational facilities for its officers and employees and held with the consent of the Bermuda Minister of Finance, for a term not exceeding 21 years); (2) the taking of mortgages on land in Bermuda in excess of $50,000; or (3) the carrying on of business of any kind for which it is not licensed in Bermuda, except in certain limited circumstances such as doing business with another exempted undertaking in furtherance of our business or Platinum Bermuda's business (as the case may be) carried on outside Bermuda. Platinum Bermuda is a licensed reinsurer in Bermuda, and so may carry on activities in Bermuda that are related to and in support of its reinsurance business.

The Bermuda government actively encourages foreign investment in "exempted" entities like Platinum Holdings that are based in Bermuda, but do not operate in competition with local businesses. As well as having no restrictions on the degree of foreign ownership, Platinum Holdings and Platinum Bermuda are not currently subject to taxes on income or dividends or to any foreign exchange controls in Bermuda. In addition, there currently is no capital gains tax in Bermuda.

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Under Bermuda law, non-Bermudians (other than spouses of Bermudians) may not engage in any gainful occupation in Bermuda without the specific permission of the appropriate governmental authority. Such permission may be granted or extended upon showing that, after proper public advertisement, no Bermudian (or spouse of a Bermudian) is available who meets the minimum standards for the advertised position. None of our executive officers is a Bermudian, and all such officers will be working in Bermuda under work permits. The Bermuda government recently announced a new policy that places a six-year term limit on individuals with work permits, subject to certain exceptions for key employees.

U.S. Regulation

Platinum US is organized and domiciled in the State of Maryland and licensed, authorized or accredited to write reinsurance in 24 states of the United States and is seeking licenses in eight additional states. State insurance laws regulate many aspects of its reinsurance business and state insurance departments in the licensure states will supervise its insurance operations. Its principal insurance regulatory authority will be the Maryland Insurance Administration.

U.S. Insurance Holding Company Regulation of Platinum Holdings, Platinum Ireland and Platinum Finance

Platinum Holdings and Platinum Ireland as the indirect parents of Platinum US and Platinum Finance as the direct parent of Platinum US will be subject to the insurance holding company laws of Maryland, where Platinum US is organized and domiciled. These laws generally require the insurance holding company and each insurance company directly or indirectly owned by the holding company to register with the insurance department of the state of Maryland and to furnish annually financial and other information about the operations of companies within the holding company system. Generally, all transactions among companies in the holding company system affecting Platinum US, including sales, loans, reinsurance agreements, service agreements and dividend payments, must be fair and, if material or of a specified category, require prior notice and approval or non-disapproval by the Maryland Insurance Commissioner.

The insurance laws of Maryland prevent any person from acquiring control of Platinum Holdings, Platinum Ireland, Platinum Finance or Platinum US unless that person has filed a notification with specified information with the Maryland Insurance Commissioner and has obtained his prior approval. Under the Maryland statutes, acquiring 10% or more of the voting stock of an insurance company or its parent company is presumptively considered a change of control, although such presumption may be rebutted. Accordingly, any person who acquires, directly or indirectly, 10% or more of the voting securities of Platinum Holdings without the prior approval of the Maryland Insurance Commissioner will be in violation of these laws and may be subject to injunctive action requiring the disposition or seizure of those securities by the Maryland Insurance Commissioner or prohibiting the voting of those securities and to other actions determined by the Maryland Insurance Commissioner. In addition, many U.S. state insurance laws require prior notification of state insurance departments of a change in control of a non-domiciliary insurance company doing business in that state. While these pre-notification statutes do not authorize the state insurance departments to disapprove the change in control, they authorize regulatory action in the affected state if particular conditions exist such as undue market concentration. Any future transactions that would constitute a change in control of Platinum Holdings, Platinum Ireland or Platinum Finance may require prior notification in those states that have adopted pre-acquisition notification laws.

These laws may discourage potential acquisition proposals and may delay, deter or prevent a change of control of Platinum Holdings, including through transactions, and in particular unsolicited

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transactions, that some or all of the shareholders of Platinum Holdings might consider to be desirable.

State Insurance Regulation of Platinum US

The terms and conditions of reinsurance agreements generally are not subject to regulation by any U.S. state insurance department with respect to rates or policy terms. This contrasts with primary insurance agreements, the rates and policy terms of which are generally closely regulated by state insurance departments. As a practical matter, however, the rates charged by primary insurers do have an effect on the rates that can be charged by reinsurers.

State insurance authorities have broad administrative powers with respect to various aspects of the reinsurance business, including: licensing to transact business, admittance of assets to statutory surplus, regulating unfair trade and claims practices, establishing reserve requirements and solvency standards, and regulating investments and dividends. State insurance laws and regulations require Platinum US to file financial statements with insurance departments everywhere it is licensed or authorized to do or accredited to do business, and the operations of Platinum US are subject to examination by those departments at any time. Platinum US will prepare statutory financial statements in accordance with accounting practices and procedures prescribed or permitted by these departments. State insurance departments conduct periodic examinations of the books and records, financial reporting, policy filings and market conduct of insurance companies domiciled in their states, generally once every three to five years. Examinations are generally carried out in cooperation with the insurance departments of other states under guidelines promulgated by the NAIC.

Under Maryland insurance law, Platinum US may pay dividends out of surplus, provided it must give the Maryland Insurance Commissioner at least thirty days' prior notice before paying an "extraordinary dividend" or making an "extraordinary distribution". Extraordinary dividends and extraordinary distributions are dividends or distributions which, together with any other dividends and distributions paid during the immediately preceding twelve-month period, would exceed the lesser of

(1): ten percent of Platinum US's statutory policyholders' surplus (as determined under statutory accounting principles) as of December 31 of the prior year; and
(2): Platinum US's net investment income excluding realized capital gains (as determined under statutory accounting principles) for the twelve-month period ending on December 31 of the prior year, plus any amounts of net investment income (excluding realized capital gains) in the three preceding years which have not been distributed.

In addition, Platinum US must give ten days' prior notice to the Maryland Insurance Commissioner of its intention to pay any dividend or make any distribution other than an extraordinary dividend or extraordinary distribution. The Maryland Insurance Commissioner has the right to prevent payment of such a dividend or such a distribution if he determines, in his discretion, that after the payment thereof, Platinum US's policyholders' surplus would be inadequate or could cause Platinum US to be in a hazardous financial condition.

In order to enhance the regulation of insurers' solvency, the NAIC adopted a model law to implement risk-based capital ("RBC") requirements for life, health, and property and casualty

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insurance companies. Maryland has adopted the NAIC's model law. The RBC calculation, which regulators use to assess the sufficiency of an insurer's capital, measures the risk characteristics of a company's assets, liabilities and certain off-balance sheet items. RBC is calculated by applying factors to various asset, premium and liability items. Within a given risk category, these factors are higher for those items with greater underlying risk and lower for items with lower underlying risk. Insurers that have less statutory capital than the RBC calculation requires are considered to have inadequate capital and are subject to varying degrees of regulatory action depending upon the level of capital inadequacy. The RBC ratios of Platinum US are intended to be well above the ranges that would require any regulatory or corrective action.

The NAIC assists state insurance supervisory officials in achieving insurance regulatory objectives, including the maintenance and improvement of state regulation. From time to time various regulatory and legislative changes have been proposed in the insurance industry, some of which could have an effect on reinsurers. The NAIC has instituted its Financial Regulatory Accreditation Standards Program ("FRASP") in response to federal initiatives to regulate the business of insurance. FRASP provides a set of standards designed to establish effective state regulation of the financial condition of insurance companies. Under FRASP, a state must adopt certain laws and regulations, institute required regulatory practices and procedures, and have adequate insurance department personnel to enforce such items in order to become an "accredited" state. The NAIC determines whether individual states should be accredited, and each state's accreditation is determined by the NAIC periodically. If a state is not accredited or loses its accreditation, accredited states are not able to accept certain financial examination reports of insurers prepared solely by the regulatory agency in such unaccredited state. The state of Maryland is currently accredited under FRASP.

Operations of Platinum UK and Platinum Bermuda

Platinum UK and Platinum Bermuda are not admitted to do business in the United States. However, the insurance laws of each state of the United States and of many other countries regulate the sale of insurance and reinsurance within their jurisdictions by non-domestic insurers and reinsurers such as Platinum UK and Platinum Bermuda, which are not admitted to do business within such jurisdictions. Such sale of insurance or reinsurance within a jurisdiction where the insurer is not admitted to do business is generally prohibited. We do not intend that Platinum Bermuda maintain an office or solicit, advertise, settle claims or conduct other insurance activities in any jurisdiction other than Bermuda—or, in the case of Platinum UK, London—where the conduct of such activities would require Platinum UK and Platinum Bermuda to be so admitted.

In addition to the regulatory requirements imposed by the jurisdictions in which they are licensed, reinsurers' business operations are affected by regulatory requirements in various states of the United States governing "credit for reinsurance" which are imposed on their ceding companies. In general, a ceding company which obtains reinsurance from a reinsurer that is licensed, accredited or approved by the jurisdiction or state in which the reinsurer files statutory financial statements is permitted to reflect in its statutory financial statements a credit in an aggregate amount equal to the liability for unearned premiums (which are that portion of premiums written which applies to the unexpired portion of the policy period) and loss reserves and loss expense reserves ceded to the reinsurer. Platinum UK and Platinum Bermuda are not licensed, accredited or approved in any state in the U.S. The great majority of states, however, permit a credit to statutory surplus resulting from reinsurance obtained from a non-licensed or non-accredited reinsurer to be offset to the extent that the reinsurer provides a letter of credit or other acceptable security arrangement. A few states do not allow credit for reinsurance ceded to non-licensed reinsurers except in certain limited circumstances and others impose additional requirements that

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make it difficult to become accredited. Platinum UK or Platinum Bermuda may be subject to reinsurance premium excise taxes in the US (1%) and certain other jurisdictions.

We do not believe that Platinum UK and Platinum Bermuda are in violation of insurance laws of any jurisdiction in the United States. There can be no assurance, however, that inquiries or challenges to Platinum UK's or Platinum Bermuda's reinsurance activities will not be raised in the future.

U.K. Regulation

General

The framework for supervision of insurance companies in the United Kingdom is largely formed by EU Directives which are required to be implemented in member states through national legislation. Directives aim to harmonize insurance regulation and supervision throughout the EU by laying down minimum standards in key areas, and requiring member states to give mutual recognition to each other's standards of prudential supervision.

On December 1, 2001, the FSA assumed its full powers and responsibilities under FSMA. The FSA is now the single statutory regulator responsible for regulating deposit taking, insurance, investment and most other financial services business. It is a criminal offense for any person to carry on a regulated activity in the United Kingdom unless that person is authorized by the FSA or falls under an exemption.

Insurance business (which includes reinsurance business) is authorized and supervised by the FSA. Insurance business in the United Kingdom is divided between two main categories: long-term insurance (which is primarily investment-related) and general insurance (for example, building and contents cover and motor (automobile) insurance). Under FSMA, effecting or carrying out any contract of insurance, whether general or long-term, is a regulated activity requiring authorization.

Platinum UK has applied to the FSA to write the business conducted by St. Paul Re in the United Kingdom. Platinum UK may not be licensed by the FSA at the time of the completion of the Equity Public Offering. The issuance of the license is at the discretion of the FSA and we may not be able to obtain such a license. St. Paul Re has agreed that it will continue to write reinsurance in the United Kingdom until December 31, 2002 or until Platinum UK is licensed, whichever is earlier. Platinum US will reinsure all such business, together with certain other business written by St. Paul Re UK since January 1, 2002. If Platinum UK does not obtain a license by December 31, 2002, or if the license it obtains contains material limitations, our results of operations could be materially adversely affected, and we may not be able to conduct our U.K. operations in the manner described in this prospectus.

Supervision

In its role as supervisor of insurance companies, the primary objective of the FSA is to fulfill its responsibilities under the FSMA regime relating to the safety and soundness of insurance companies with the aim of strengthening, but not guaranteeing, the protection of insureds. The FSA carries out this prudential supervision of insurance companies through the collection of information from statistical returns, through review of accountants' reports, by visits to insurance companies and through regular formal interviews.

The FSA has adopted a risk-based approach to the supervision of insurance companies. Under this approach the FSA performs a formal risk assessment of every insurance company or group carrying on business in the United Kingdom during each supervisory period, which varies in length according to the risk profile of the insurer. The FSA performs the risk assessment by analyzing information which it receives during the normal course of its supervision, such as regular prudential

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returns on the financial position of the insurance company, or which it acquires through a series of meetings with senior management of the insurance company. After each risk assessment, the FSA will inform the insurer of its views on the insurer's risk profile. This will include details of any remedial action which the FSA requires and the likely consequences if this action is not taken.

Solvency Requirements

The Interim Prudential Sourcebook for Insurers requires that insurance companies maintain a margin of solvency at all times in respect of any general insurance undertaken by the insurance company, the calculation of which in any particular case depends on the type and amount of insurance business a company writes. The method of calculation of the solvency margin is set out in the Interim Prudential Sourcebook for Insurers, and for these purposes, an insurer's assets and its liabilities are subject to specific valuation rules set out in the Interim Prudential Sourcebook for Insurers. Failure to maintain the required solvency margin is one of the grounds on which wide powers of intervention conferred upon the FSA may be exercised.

Restrictions on Dividend Payments

U.K. law prohibits Platinum UK from declaring a dividend to its stockholders unless it has "profits available for distribution." The determination of whether a company has profits available for distribution is based on its accumulated realized profits less its accumulated realized losses. While the United Kingdom insurance regulatory laws impose no statutory restrictions on a general insurer's ability to declare a dividend, the FSA strictly controls the maintenance of each insurance company's solvency margin within its jurisdiction and may restrict Platinum UK from declaring a dividend at a level which the FSA determines would adversely affect Platinum UK's solvency requirements. It is common practice in the United Kingdom to notify the FSA in advance of any significant dividend payment.

Reporting Requirements

U.K. insurance companies must prepare their financial statements under the Companies Act 1985 (as amended), which requires the filing with Companies House of audited financial statements and related reports. Under the Interim Prudential Sourcebook for Insurers, audited accounts must be filed with the FSA within two months and 15 days (or three months where the delivery of accounts is made electronically).

Equalization Reserves

Each insurance company writing property, aviation, marine, business interruption or nuclear insurance or reinsurance business is required by the Interim Prudential Sourcebook for Insurers to maintain an equalization reserve in respect of business written in the financial years ending on or after December 23, 1996 calculated in accordance with the provisions of the Interim Prudential Sourcebook for Insurers.

Insurance companies writing credit insurance business must maintain equalization reserves calculated in accordance with certain provisions of the Interim Prudential Sourcebook for Insurers as related specifically to credit insurance business.

Supervision of Management

The FSA closely supervises the management of insurance companies through the approved persons regime, by which any appointment of persons to a position of significant influence within an authorized person must be approved by the FSA.

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Change of Control

FSMA regulates the acquisition of "control" of any U.K. insurance company authorized under FSMA. Any company or individual that (together with its or his associates) directly or indirectly acquires 10% or more of the shares in the parent company of a U.K. authorized insurance company, or is entitled to exercise or control the exercise of 10% or more of the voting power in such a parent company, would be considered to have acquired "control" for the purposes of the relevant legislation, as would a person who had significant influence over the management of such parent company by virtue of his shareholding in it. A purchaser of more than 10% of the Common Shares would therefore be considered to have acquired "control" of Platinum UK.

Under FSMA, any person proposing to acquire "control" over a U.K. authorized insurance company must give prior notification to the FSA of his intention to do so. The FSA would then have three months to consider that person's application to acquire "control." In considering whether to approve such application, the FSA must be satisfied that both the acquirer is a fit and proper person to have such "control" and that the interests of consumers would not be threatened by such acquisition of "control." Failure to make the relevant prior application would constitute a criminal offense.

Intervention and Enforcement

The FSA has extensive powers to intervene in the affairs of an authorized person. FSMA imposes on the FSA statutory obligations to monitor compliance with the requirements imposed by FSMA, and to enforce the provisions of FSMA and its related secondary legislation. The FSA has power, among other things, to enforce—and take disciplinary measures in respect of—breaches of both the Interim Prudential Sourcebook for Insurers and breaches of the conduct of business rules generally applicable to authorized persons.

FSMA permits the FSA to refer matters directly to its enforcement division in order to implement disciplinary or regulatory action, but more commonly enforcement action is preceded by the exercise of the FSA's interventionist supervisory powers.

The FSA has a general power on giving notice to require information and documents from authorized persons that the FSA reasonably requires in connection with the exercise of its functions under the regulatory regime. The FSA also has two distinct statutory powers to appoint investigators.

Under section 167 of FSMA, the FSA or the Secretary of State may appoint suitably competent persons to conduct an investigation on its behalf into the nature, conduct or state of the business of an authorized person, a particular aspect of that business or the ownership or control of an authorized person where there is general concern about an authorized person but the circumstances of the case do not suggest a specific breach or contravention of the regulatory regime.

By contrast, under section 168 of FSMA, the FSA or the Secretary of State may order an investigation if there appear to be circumstances suggesting that certain specified breaches or offenses under the regulatory regime have occurred (for example, breach of the general prohibition on performing regulated activities without suitable permission or misconduct by an approved person). Investigators appointed under section 168 have significantly wider powers than investigators appointed under section 167.

The FSA may also require an authorized person to provide a report prepared by certain skilled professionals to be approved by the FSA on any matter about which the FSA has required or could require the provision of documents.

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The FSA has many enforcement powers available to use against an authorized or approved person. These include public censure, unlimited fines and, in serious cases, the power to revoke or vary permission to carry on regulated activities or an individual's approval. A serious case is one involving, among other things, the failure of an authorized person to satisfy the threshold conditions or the FSA considering that an approved person is no longer fit and proper to perform the function in question. In addition, the FSA may revoke an authorized person's permission if it is necessary to protect the interests of consumers or potential consumers.

The FSA has further powers to obtain injunctions against authorized persons and to impose or seek restitution orders where persons have suffered loss. Once the FSA has made a decision to take enforcement action (other than in the case of an application to the court for an injunction or restitution order) against an authorized or approved person, the person affected may refer the matter to the Financial Services Tribunal, a quasi-judicial entity staffed and operated independently of the FSA and administered by the Lord Chancellor's Department. Appeal from the Tribunal on a matter of law lies to the Court of Appeal provided that either the Tribunal or the Court of Appeal grants permission.

Finally, the FSA is granted the power to prosecute criminal offenses arising under FSMA, and to prosecute insider dealing under Part V of the Criminal Justice Act 1993, and breaches of money laundering regulations. The FSA's stated policy is to pursue criminal prosecution in all appropriate cases.

Proposed Limits on Concentration of Reinsurance Exposures

In July 2002, the FSA issued a consultation paper ("CP143") which sets forth proposed reforms to strengthen both the capital regime and systems and controls requirements for insurers and reinsurers subject to the FSA's jurisdiction. CP143 includes proposals aimed at ensuring adequate diversification of an insurer's or reinsurer's exposures to reinsurers (whether intra- or extra-group). In particular, it proposes a rebuttable presumption that an insurer or reinsurer must limit the gross earned premiums paid to a single reinsurer (or group of related reinsurers) to a maximum of 20% of the insurer's or reinsurer's projected gross earned premiums in any financial year in order to meet prudential requirements. If an insurer or reinsurer wishes to exceed this limit, it must first satisfy the FSA that this is appropriate. In addition, the relevant guidance indicates that an insurer or reinsurer would be permitted to take into account certain acceptable loss mitigation techniques, such as effective security arrangements, in assessing the overall adequacy of the diversification of its reinsurance exposure.

CP143 also proposes to limit an insurer's or reinsurer's exposure to a single reinsurer (or group of related reinsurers) to 100% of its capital by requiring it to alert its FSA supervisor if it approaches or has exceeded this limit, explaining why it considers that prudent provision is or is not required for the excess exposure.

CP143 is currently in draft form. The final rules and guidance, the ultimate form of which may or may not differ from the contents of CP143, are expected to take effect in 2004 and will apply to Platinum UK.

Substantial compliance with CP143 in its draft form is likely to be an effective condition for receiving FSA authorisation.

Ireland Regulation

As a holding company, Platinum Ireland is not subject to Irish insurance regulation. Platinum Ireland will initially function as a holding company. In the future, it may be used to carry out reinsurance activities in Ireland or the European Union outside of the United Kingdom, provided that the necessary regulatory approvals are first obtained.

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MANAGEMENT

Our Directors and Executive Officers

We are assembling a new management team of experienced insurance industry professionals led by Steven H. Newman, who is Chairman of the Board, and Jerome T. Fadden, who is President and Chief Executive Officer. The following table provides information regarding those persons who are directors and executive officers of Platinum Holdings:

Name	Age	Position at Platinum Holdings
Steven H. Newman	59	Chairman of the Board of Directors; Chairman of the Executive Committee
Jerome T. Fadden	45	President, Chief Executive Officer and Director; member of the Executive Committee
Michael D. Price	35	Chief Underwriting Officer, Platinum US (upon completion of the Equity Public Offering)
William A. Robbie	51	Chief Financial Offer (upon completion of the Equity Public Offering)
Michael E. Lombardozzi	40	General Counsel (upon completion of the Equity Public Offering)
Neal J. Schmidt	45	Executive Vice President and Chief Actuary, Platinum US (upon completion of the Equity Public Offering)
H. Furlong Baldwin	70	Director; Chairman of the Audit Committee

Jonathan F. Bank	59	Director; member of the Compensation and Audit Committees
Dan R. Carmichael	57	Director; member of the Compensation and Audit Committees
Jay S. Fishman	49	Director; member of the Executive Committee
Peter T. Pruitt	69	Director; Chairman of the Compensation Committee

Biographical information about the foregoing persons for at least the last five years is as follows:

Steven H. Newman has been the Chairman of the Board of Platinum Holdings since June 2002. He was Chairman of the Board of Directors of Swiss Re America from May 2000 to October 2000, and Chairman of the Board and Chief Executive Officer of Underwriters Re Group from 1987 to 2000. Prior to joining Underwriters Re, Mr. Newman served as Executive Vice President and then President of the Home Insurance Company from 1983 to 1986, and Vice President and Casualty Actuary at American International Group from 1969 to 1982. He also served as an Advisory Director for HCC Insurance Holdings, Inc. from November 2000 to August 2002, Chairman of the Board of GCR Holdings, a Bermuda catastrophe reinsurer, from 1995 to 1997 and a Director of Capital Re from 1995 to 1998. Mr. Newman has served as President of the Casualty Actuarial Society and Chairman of the Reinsurance Association of America. He has represented the United States at United Nations conferences dealing with international insurance and reinsurance issues.

Jerome T. Fadden has been the President, Chief Executive Officer, Acting Chief Financial Officer, Acting Chief Accounting Officer and a Director of Platinum Holdings since April 2002. In addition, he has been the President and Chief Executive Officer of St. Paul Re since March 2002. Prior to joining St. Paul Re, Mr. Fadden had been employed by UBS PaineWebber where he served as Chief Financial Officer from November 1999 through March 2001, and then Director of Strategic Development in the Office of the Chairman. Prior to joining UBS PaineWebber, from November 1998

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to August 1999, Mr. Fadden was Executive Vice President and Chief Financial Officer of Equus Re, a start up reinsurance operation sponsored by Kemper Insurance. Mr. Fadden served as Executive Vice President and Chief Financial Officer of NAC Re Corp. from July 1996 through September 1998. Mr. Fadden served in a variety of senior management positions at The Travelers Group, including Treasurer as well as Chief Financial Officer of The Travelers Group's property and casualty insurance unit, The Gulf Insurance Group.

Michael D. Price will be the Chief Underwriting Officer at Platinum US upon completion of the Public Offering and has been Chief Underwriting Officer of St. Paul Re since June 2002. Mr. Price served as Chief Operating Officer of Associated Aviation Underwriters Incorporated, which is a subsidiary of Global Aerospace Underwriting Managers Ltd. specializing in aerospace insurance, from March 2001 through May 2002. He was Senior Vice President and Chief Underwriting Officer of Underwriters Re Group, Inc. from May 1998 until the acquisition of Underwriters Re Group, Inc. by Swiss Re America Holding Corporation in May 2000; thereafter, Mr. Price held the position of Chief Underwriting Officer at Swiss Re America Holding Corporation until September 2000. From July 1995 through May 1998, Mr. Price was employed by London Life and Casualty Reinsurance Corporation, most recently as President, and prior thereto he was a project manager at Milliman and Robertson, Inc. He is a fellow of the Casualty Actuarial Society and a member of the American Academy of Actuaries.

William A. Robbie, who became Executive Vice President and Chief Financial Officer of St. Paul Re in August 2002, will be Executive Vice President and Chief Financial Officer of Platinum Holdings upon completion of the Public Offering. Mr. Robbie has held various positions with XL Capital Ltd. and its subsidiaries since 1997, including Executive Vice President—Financial Services, Senior Vice President—Treasurer and Executive Vice President, Chief Financial Officer and Chief Administrative Officer of XL Mid Ocean Reinsurance in Hamilton, Bermuda. Mr. Robbie also has held senior management positions with several insurance companies, including the Prudential Insurance Company of America, The Continental Corporation, Monarch Capital Corporation and Aetna Life & Casualty. Mr. Robbie began his career with Ernst & Ernst (now Ernst & Young LLP) and is a certified public accountant.

Michael E. Lombardozzi, who became Executive Vice President and General Counsel of St. Paul Re in August 2002, will be Executive Vice President and General Counsel of Platinum Holdings upon completion of the Public Offering. Mr. Lombardozzi was Senior Vice President—Planning and Operations of W.R. Berkley Corporation from December 2001 to July 2002. From January 2001 to June 2001 he was Senior Vice President, Secretary and General Counsel of Orius Corporation. From January 1994 to January 2001 he was Senior Vice President, Secretary and General Counsel of Berkley Insurance Company. From 1986 to 1994 he was an associate with the law firm of Willkie Farr & Gallagher.

Neal J. Schmidt has been an Executive Vice President and Chief Actuary of St. Paul Re since 1998 and will serve as Executive Vice President and Chief Actuary of Platinum US upon completion of the Public Offering. Mr. Schmidt served as the Senior Vice President-Specialty Lines Underwriting of St. Paul Re from 1995 through 1998 and as Chief Actuary from 1986 through 1995. Prior to joining St. Paul Re, he held positions in reinsurance and insurance with the Home Insurance Company. Mr Schmidt is a fellow of the Casualty Actuarial Society and a Member of the American Academy of Actuaries.

H. Furlong Baldwin is the Chairman of Mercantile Bankshares Corporation, which is a bank holding corporation. Mr. Baldwin began his career with Mercantile in 1956 when it was known as the Mercantile-Safe Deposit & Trust Company, eventually becoming President and then Chief Executive Officer of the company, a position he held from 1976 until 2001. He is a Governor of the National Association of Securities Dealers, a past chairman of the Association of Bank Holding Companies and a past president of the Maryland Bankers Association. Mr. Baldwin is a trustee of

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the Marine Corps Heritage Foundation, the Marine Corps University and the Virginia Historical Society and is a member of the Council on Foreign Relations. From May 1998 to May 2002, Mr. Baldwin was a director of St. Paul and from 1968 to 1998, he was a director of USF&G Corporation, which was acquired by St. Paul in 1998.

Jonathan F. Bank has been Senior Vice President of Tawa Associates Ltd., which is engaged in the acquisition, restructuring and management of property and casualty companies in run off, since May 2001. From September 1999 through May 2001, he was the Insurance Practice Leader of PricewaterhouseCoopers' U.S. insurance/reinsurance regulatory and restructuring practice group. Prior thereto, Mr. Bank was a partner at the law firm of Chadbourne & Parke LLP, where he specialized in insurance and reinsurance dispute resolution and related regulatory matters. Mr. Bank is a member of the state bars of California, New York and Nebraska. He also served on the Advisory Committee on Reinsurance for the National Association of Insurance Commissioners.

Dan R. Carmichael has been President, Chief Executive Officer and a director of Ohio Casualty Corporation, a property and casualty insurance company, since December 2000. From 1995 through 2000, Mr. Carmichael served as President and Chief Executive Officer of IVANS, Inc., an industry-owned organization that provides electronic communications services to insurance, healthcare and related organizations. Prior thereto, he served as Chairman, President and Chief Executive Officer of Anthem Casualty Insurance Group. Mr. Carmichael is also a director of Alleghany Corporation, a holding company engaged through its subsidiaries in the insurance, industrial minerals and steel fasteners businesses, and he serves as a trustee of the American Institute for Chartered Property Casualty Underwriters, the Insurance Institute of America and the Griffith Foundation for Insurance Education.

Jay S. Fishman has been the Chairman, Chief Executive Officer and President of The St. Paul Companies, Inc., and director of The John Nuveen Company, since October 2001. Prior to that date, Mr. Fishman was employed as Chairman, President and Chief Executive Officer of The Travelers Insurance Group and as Chief Operating Officer—Finance and Risk of Citigroup, Inc. Mr. Fishman held various executive positions with Citigroup and its predecessor since 1989 and with Travelers since 1993.

Peter T. Pruitt was Chairman of Willis Re Inc., a reinsurance intermediary, from June 1995 until his retirement in December 2001. He also served as Chief Executive Officer of Willis Re Inc. from June 1995 through September 1999, and as Executive Vice President of Willis Corroon Corporation from November 1993 through June 1995. Prior thereto, Mr. Pruitt held various positions at Frank B. Hall & Co., an insurance brokerage firm, including President and Chief Operating Officer from August 1985 through November 1992. Mr. Pruitt served as a trustee of the College of Insurance (now St. John's University School of Risk Management) from 1986 until his retirement in 2001. He also served as a trustee of the Insurance Institute of America and the American Institute for Property and Liability Underwriters.

Number and Terms of Directors

Our Board of Directors consists of seven members, each of whose term of office will expire at the annual shareholders' meeting in 2003. Under our bye-laws, directors will be elected at each annual general meeting of shareholders, in each case by an ordinary resolution of the shareholders. Candidates for election will be nominated by the Board.

Directors may take action by a majority of the votes cast at a duly called and held meeting at which a quorum is present. A majority of directors in office at any time, or such greater number as the shareholders may from time to time determine, constitutes a quorum for all purposes.

The foregoing summarizes certain provisions of our bye-laws, which are subject to Bermuda law. See "Description of Platinum Holdings' Common Shares."

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Committees of the Board of Directors

Our Board of Directors has an Executive Committee, a Compensation Committee and an Audit Committee, each of which reports to the Board. The Executive Committee has the authority to oversee our general business and affairs to the fullest extent permitted by Bermuda law. The Compensation Committee has the authority to establish compensation policies and recommend compensation programs to the Board of Directors; it also administers the 2002 Share Incentive Plan and the Capital Accumulation Plan, as described below. The Audit Committee is responsible for meeting with our independent accountants regarding, among other issues, audits and adequacy of our accounting and control systems. The Audit Committee consists entirely of independent directors.

Compensation of Directors

The Company will compensate each director (other than any director who is an employee of the Company) in the amount of $25,000 per year as a retainer fee and an additional $2,500 per meeting of the Board of Directors if the director attends in person, or an additional $1,000 per meeting if the director attends by telephone. The Company will compensate directors in the amount of $1,500 per meeting of any Board committee attended by such director and an additional $5,000 per year for each committee chairperson. Fees for the Chairman of the Board and proposed stock option grants for non-employee directors are described below.

Platinum Share Unit Plan for Nonemployee Directors

Platinum has adopted a Share Unit Plan for Nonemployee Directors which will become effective upon the completion of the Equity Public Offering. Under the Share Unit Plan, 50% of all fees earned by a nonemployee director (including retainer fees, meeting fees and committee fees) during each calendar quarter are automatically converted into the number of "Share Units" that have a value at the end of such calendar quarter equal to the amount of fees earned. Each Share Unit is a non-voting unit of measurement which is valued at the public trading price of the Common Shares. In addition to the 50% mandatory deferral, each nonemployee director may elect to have up to a total of 100% of the director's fees converted into Share Units, provided the election is made before the start of the calendar year in which the fees are earned. A nonemployee director will receive distributions under the Share Unit Plan following the expiration of five calendar years following the year in which his fees were originally converted into Share Units, or following termination of his service on the Board of Directors, if earlier. Each distribution under the Share Unit Plan will be made, at the discretion of the Board, either in cash or in Common Shares or some combination thereof.

Non-qualified Share Options for Nonemployee Directors

Under Platinum's 2002 Share Incentive Plan described below, an initial non-qualified share option covering 25,000 Common Shares will be granted to each of the nonemployee directors other than Mr. Newman upon the completion of the Equity Public Offering at the initial public offering price. The options will have a ten-year term and will vest in equal annual installments on each of the first three anniversaries of the date of grant, subject to accelerated vesting in the event of a "Change in Control" (as defined in the Share Incentive Plan). Following the Equity Public Offering, nonemployee directors will be eligible to receive option grants under the Share Incentive Plan in the sole discretion of the Compensation Committee.

Arrangements with the Chairman of the Board

Mr. Newman has entered into a letter agreement with St. Paul (which will be assigned to Platinum Holdings upon completion of the Equity Public Offering), pursuant to which he agreed to

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serve as Chairman of Platinum Holdings' Board of Directors upon completion of the Equity Public Offering. As Chairman of the Board, he will be entitled to receive an annual fee of $60,000 and a fee of $5,000 for each meeting of the Board of Directors that he attends (not to exceed $20,000 per year). Upon completion of the Equity Public Offering, Mr. Newman will receive a stock option grant to purchase 975,000 Common Shares at the initial public offering price. The option will have a ten-year term and will vest in equal annual installments on each of the first three anniversaries of the date of grant. Under the agreement, Platinum Holdings will indemnify Mr. Newman, to the fullest extent permitted by law, if he is made or threatened to be made a party to a proceeding by reason of his being or having been a director of Platinum Holdings.

Mr. Newman also has entered into a letter agreement with St. Paul (which will be assigned to Platinum US upon completion of the Equity Public Offering), pursuant to which he will provide consulting services to Platinum US through February 28, 2005 (which date may be automatically extended from year to year). During the consulting term, Mr. Newman will perform services as reasonably requested, including assisting with the establishment and development of the reinsurance business of Platinum US. During the consulting term, Mr. Newman will receive an annual consulting fee of $270,000 and will be eligible to receive an annual incentive equal to $440,000 at target, and a maximum incentive equal to 200% of target following the Equity Public Offering; provided that he will receive, no later than February 28, 2003, a minimum incentive for calendar year 2002 of $366,670. The objectives for Mr. Newman's annual incentive following the Equity Public Offering will be determined by the Compensation Committee of the Board of Directors of Platinum Holdings in consultation with Mr. Newman. On April 15, 2002, Mr. Newman received a one-time incentive payment of $100,000 from St. Paul. Mr. Newman is subject to certain confidentiality, non-compete and non-solicitation provisions under the agreement. Mr. Newman's consulting services for Platinum US will be performed through SHN Enterprises, Inc., which he has established for estate planning purposes and of which he is the sole shareholder.

Our Executive Officers

The following information is a summary of the employment arrangements that we expect to be applicable to our President and Chief Executive Officer and our other executive officers, and a description of the incentive plans that we expect to be in place, upon completion of the Equity Public Offering:

Jerome T. Fadden. Mr. Fadden has an employment agreement with St. Paul for a five-year term that began March 4, 2002, subject to one-year renewal terms thereafter, pursuant to which he has agreed to serve as our President and Chief Executive Officer. Upon the completion of the Public Offering, St. Paul will assign all of its rights and obligations under the employment agreement to Platinum Holdings. Mr. Fadden will receive a base annual salary of at least $650,000 following the Equity Public Offering. He will be eligible to receive a target annual bonus of 125% of base salary and a maximum annual bonus of 200% of the target bonus following the Public Offering, and for 2002 he will receive a minimum annual bonus of 125% of his base annual salary. The objectives for Mr. Fadden's annual bonus will be determined by the Compensation Committee of the Board of Directors, in consultation with Mr. Fadden. The agreement provides for the purchase and maintenance by Platinum of a term life insurance policy in the amount of $4 million payable to a beneficiary designated by Mr. Fadden, and that Mr. Fadden will be entitled to the reimbursement of reasonable Bermuda housing expenses (estimated at $25,000 per month), among other employee benefits and perquisites specified in the agreement. On June 1, 2002, Mr. Fadden received a sign-on bonus of $250,000 from St. Paul. Mr. Fadden also received an initial grant of stock options to purchase up to 100,000 shares of St. Paul common stock, which are subject to the terms of the St. Paul stock option plan and which vest in four equal annual installments on the first four anniversaries of the date of grant. Upon completion of the Equity Public Offering, Mr. Fadden will forfeit such St. Paul stock options to the extent they are unvested and will receive a stock

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option grant to purchase 975,000 Common Shares at the initial public offering price. The options will have a ten-year term and will vest in equal annual installments on each of the first three anniversaries of the date of grant.

If Mr. Fadden's employment is terminated by us without "cause" or by Mr. Fadden for "good reason" (each as defined in the agreement), he will receive a payment equal to three times the sum of his base salary and the greater of his target bonus and his bonus for the preceding year, and any base salary or other amounts accrued or owing through the date of termination, provided that Mr. Fadden executes a release of claims, and up to three years of medical and dental coverage and immediate vesting of all outstanding stock options. In addition, all outstanding stock options will remain exercisable for the lesser of five years and the remainder of their term. If Mr. Fadden's employment is terminated by us for cause or by Mr. Fadden other than for good reason, he will receive no further payments, compensation or benefits under the agreement (other than amounts accrued prior to termination of employment) and all vested options will remain exercisable for 30 days after termination. In the event his employment is terminated due to death or "disability" (as defined in the agreement), he will receive his base salary through the date of termination and an annual bonus (at target level), prorated through the date of termination. In addition, all outstanding stock options will immediately vest and will remain exercisable (but not beyond their term) for three years, in the case of a disability termination, and one year, in the case of death. In the event Mr. Fadden's employment is terminated under circumstances described in the agreement within two years after a change in control of the Company, Mr. Fadden will be entitled to certain severance benefits. In the event Mr. Fadden is subject to excise tax on any severance payments made to him under the agreement, we will make a gross-up payment to compensate him for such tax liability. Mr. Fadden is subject to certain confidentiality, non-compete and non-solicitation provisions under the agreement.

Michael D. Price. Mr. Price has an employment agreement with St. Paul Re for a three-year term beginning June 3, 2002. Upon the completion of the Equity Public Offering, St. Paul Re will assign all of its rights and obligations under the employment agreement to Platinum US. Assuming completion of the Equity Public Offering, Mr. Price will serve as the Chief Underwriting Officer of Platinum US following the Public Offering. Mr. Price will receive a base annual salary of at least $400,000 following the Equity Public Offering, and he will be eligible to receive a minimum annual bonus of 50% of base salary. On June 3, 2002, Mr. Price received a sign-on bonus of $100,000 from St. Paul Re. Upon completion of the Equity Public Offering, Mr. Price will receive a stock option grant to purchase 300,000 Common Shares at the initial public offering price. The option will have a ten-year term and will vest, subject to continued employment, in three equal annual installments on each of the first two anniversaries of the completion of the Equity Public Offering and on June 3, 2005. Mr. Price is also entitled to the reimbursement of reasonable moving and temporary housing expenses (not exceeding $30,000).

If Mr. Price's employment is terminated by Platinum US without "cause" or by Mr. Price for "good reason" (each as defined in the agreement), he will receive a payment equal to any bonus payments to which he would have been entitled during the term of the agreement which have not been previously paid, 50% of his then current base salary and any base salary or other amounts accrued and owing through the date of termination, provided that Mr. Price executes a release of claims. If Mr. Price's employment is terminated by Platinum US for cause or by Mr. Price other than for good reason, he will receive no further payments, compensation or benefits under the agreement (other than amounts accrued prior to termination of employment). Mr. Price is subject to certain confidentiality and non-solicitation provisions under the agreement.

William A. Robbie. Mr. Robbie has an employment agreement with St. Paul Re for a three-year term beginning August 5, 2002, subject to one-year renewal terms thereafter. Upon the completion of the Equity Public Offering, St. Paul Re will assign all of its rights and obligations under the

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employment agreement to Platinum Holdings. Assuming completion of the Equity Public Offering, Mr. Robbie will serve as Executive Vice President and Chief Financial Officer of Platinum Holdings. Mr. Robbie will receive a base annual salary of at least $350,000 following the Equity Public Offering. He will be eligible to receive a target annual bonus of 75% of base salary and a maximum annual bonus of 100% of base salary following the Equity Public Offering, and for 2002 he will receive a minimum annual bonus of 50% of base salary prorated for the period of his employment with St. Paul Re and Platinum Holdings during the year. On August 5, 2002, Mr. Robbie received a sign-on bonus of $200,000 from St. Paul Re. Upon completion of the Equity Public Offering, Mr. Robbie will receive a stock option grant to purchase 150,000 Common Shares at the initial offering price. The option will have a ten-year term and will vest, subject to continued employment, in equal annual installments on each of the first four anniversaries of the completion of the Equity Public Offering. Mr. Robbie will be entitled to the reimbursement of reasonable housing and living expenses (not exceeding $15,000 per month) following completion of the Equity Public Offering to the extent that he establishes a residence in Bermuda.

If Mr. Robbie's employment is terminated by Platinum Holdings without "cause" or by Mr. Robbie for "good reason" (each as defined in the agreement), he will receive a payment equal to the sum of one year's base salary and target bonus and any base salary or other amounts accrued or owing through the date of termination, provided that Mr. Robbie executes a release of claims. If Mr. Robbie's employment is terminated by Platinum Holdings for cause or by Mr. Robbie for other than good reason, he will receive no further payments, compensation or benefits under the agreement (other than amounts accrued prior to termination of employment). Mr. Robbie is subject to certain confidentiality and non-solicitation provisions under the agreement.

Michael E. Lombardozzi. Mr. Lombardozzi has an employment agreement with St. Paul Re for a three-year term beginning August 5, 2002, subject to one-year renewal terms thereafter. Upon the completion of the Equity Public Offering, St. Paul Re will assign all of its rights and obligations under the employment agreement to Platinum Holdings. Assuming completion of the Equity Public Offering, Mr. Lombardozzi will serve as Executive Vice President and General Counsel of Platinum Holdings. Mr. Lombardozzi will receive a base annual salary of at least $350,000 following the Equity Public Offering. He will be eligible to receive a target annual bonus of 75% of base salary and a minimum annual bonus of 50% of base salary following the Equity Public Offering, and for 2002 he will receive a minimum annual bonus of 50% of base salary prorated for the period of employment with St. Paul Re and Platinum Holdings during the year. On August 5, 2002, Mr. Lombardozzi received a sign-on bonus of $275,000 from St. Paul Re. Upon completion of the Equity Public Offering, Mr. Lombardozzi will receive a stock option grant to purchase 150,000 Common Shares at the initial offering price. The option will have a ten-year term and will vest, subject to continued employment, in equal annual installments on each of the first four anniversaries of the completion of the Equity Public Offering. Mr. Lombardozzi will be entitled to the reimbursement of reasonable housing and living expenses (not exceeding $15,000 per month) following completion of the Equity Public Offering to the extent that he establishes a residence in Bermuda.

If Mr. Lombardozzi's employment is terminated by Platinum Holdings without "cause" or by Mr. Lombardozzi for "good reason" (each as defined in the agreement), he will receive a payment equal to the sum of one year's base salary and target bonus and any base salary or other amounts accrued or owing through the date of termination, provided that Mr. Lombardozzi executes a release of claims. If Mr. Lombardozzi's employment is terminated by Platinum Holdings for cause or by Mr. Lombardozzi for other than good reason, he will receive no further payments, compensation or benefits under the agreement (other than amounts accrued prior to termination of employment). Mr. Lombardozzi is subject to certain confidentiality and non-solicitation provisions under the agreement.

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Neal J. Schmidt. Mr. Schmidt will serve as Executive Vice President and Chief Actuary of Platinum US following the Equity Public Offering. Mr. Schmidt will receive a base annual salary of $350,000 following the Equity Public Offering, and he will be eligible to receive a target annual bonus of 75% of base salary. For 2002, he will receive an annual bonus of at least $175,000 provided that he is continuously employed by St. Paul Re or Platinum US through the date of payment, which is expected to be March 31, 2003, or if his employment is terminated other than for cause prior to that date. In addition to an annual bonus, Mr. Schmidt will receive, no later than July 1, 2004, a retention bonus of $175,000 provided that he is continuously employed by St. Paul Re or Platinum US through July 1, 2004 or if his employment is terminated other than for cause prior to that date. Upon completion of the Equity Public Offering, Mr. Schmidt will receive a stock option grant to purchase 150,000 Common Shares at the initial public offering price. The option will have a ten-year term and will vest, subject to continued employment, in equal annual installments on each of the first four anniversaries of the date of grant.

Platinum 2002 Share Incentive Plan

Platinum has adopted the 2002 Share Incentive Plan, which will become effective upon completion of the Equity Public Offering. The Plan provides for the grant of share options, share appreciation rights, share units and restricted shares. The material features of the Plan are summarized below.

Purpose. The purpose of the Plan is to advance the interests of the Company and its shareholders by attracting, retaining and motivating key personnel upon whose judgment, initiative and effort the successful conduct of the Company's operations is largely dependent. The Plan is also intended to further align the interests of employees, officers, insurance agents, consultants, advisors and directors with those of the shareholders by promoting the ownership of Common Shares by these individuals.

Reservation of Shares. A total of 6,000,000 Common Shares are reserved for issuance under the Plan (including Common Shares reserved for issuance to our directors and executive officers set forth in any employment or consulting agreement), which will be made available from authorized but unissued shares or from reacquired shares. If any shares that are the subject of an award are not issued and cease to be issuable for any reason, these shares will no longer be charged against the maximum share limitations and may again be made subject to awards. In addition, the number of Common Shares exchanged by a participant as payment to Platinum Holdings of the exercise price or tax withholding upon exercise of an option will be added to the share reserve. The maximum number of Common Shares that may be made subject of restricted share awards under the Plan is limited to 1,000,000 Common Shares. In the event of recapitalizations, reclassifications or other specified events affecting Platinum or the Common Shares, appropriate and equitable adjustments may be made to the number and kind of shares available for grant, as well as to other maximum limitations, under the Plan, and the number and kind of shares or other rights and prices under outstanding awards.

Administration. The Plan will be administered by the Compensation Committee of the Board of Directors of Platinum Holdings. The Compensation Committee shall, to the extent deemed necessary or advisable by the Board, be constituted so as to comply with the "non-employee director" requirements of Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the "outside director" requirements of Section 162(m) of the Code. Subject to the limitations set forth in the Plan, the Compensation Committee has the authority to determine the persons to whom awards are granted, the types of awards to be granted, the time at which awards will be granted, the number of shares, units or other rights subject to each award, the exercise, base or purchase price of an award, the time or times at which the award will become vested, exercisable or payable, and the duration of the award. The Compensation Committee will have the

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right, from time to time, to delegate to one or more officers of the Company the authority of the Committee to grant and determine the terms and conditions of awards, subject to certain limitations.

Eligibility. Awards under the Plan may be granted to any employee, officer, director, insurance agent, consultant or advisor of Platinum Holdings or any of its subsidiaries. Recipients of awards will be selected from time to time by the Compensation Committee in its sole discretion.

Share Options. Share options granted under the Plan may be issued as either incentive options (within the meaning of Section 422 of the Code), or as non-qualified options. The exercise price of an option will be determined by the Compensation Committee, provided that the exercise price per share will not be less than the fair market value of a Common Share on the date of the grant of the option. The Compensation Committee will determine the vesting requirements and the term of exercise of each option, including the effect of termination of employment or service of a participant. The maximum term of a share option will be ten years from the date of grant. To exercise an option, the participant must pay the exercise price, subject to specified conditions, in cash or in Common Shares, through a broker-assisted "cashless exercise", by combination of any of the above methods or other method approved by the Compensation Committee, and must pay any required tax withholding amounts. The Compensation Committee may also grant "reload options" for the number of Common Shares tendered by a participant to cover the exercise price or withholding tax upon the exercise of a share option under the Plan. Under the Code, the maximum value of Common Shares (determined at the time of grant) that may be subject to incentive options that become exercisable by an employee in any one year is limited to $100,000. The maximum number of Common Shares that may be covered under options granted under the Plan to any individual in any calendar year is 1,000,000 Common Shares.

Share Appreciation Rights. A share appreciation right may be granted either in tandem with an option or without a related option. A share appreciation right entitles the participant, upon exercise, to receive a payment based on the excess of the fair market value of a Common Share on the date of exercise over the base price of the right (which may not be less than the fair market value of a Common Share on the date of grant), multiplied by the number of shares as to which the right is being exercised. The maximum term of a share appreciation right will be ten years from the date of grant. No more than 1,000,000 Common Shares may be subject to share appreciation rights granted under the Plan to any one participant during any calendar year. Share appreciation rights may be payable in cash or in Common Shares or in a combination of both. Share appreciation rights may also be granted together with related dividend equivalent rights.

Share Units. An award of share units gives the participant the right to receive payment at the end of a vesting period based on the value of the Common Share at the time of vesting. Share units are subject to vesting requirements, restrictions and conditions to payment as the Compensation Committee determines are appropriate. Such vesting requirements may be based on the continued employment of the participant for a specified time period or on the attainment of specified business performance goals established by the Committee. Share unit awards are payable in cash or in Common Shares or in a combination of both. Share units may also be granted together with related dividend equivalent rights.

Restricted Share Awards. A restricted share award represents Common Shares that are issued subject to restrictions on transfer and vesting requirements as determined by the Compensation Committee. Vesting requirements may be based on the continued employment of the participant for specified time periods and on the attainment of specified business performance goals established by the Compensation Committee. Subject to the transfer and vesting restrictions of the award, the participant will have the rights of a shareholder of Platinum Holdings, including all voting and

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dividend rights, during the restriction period, unless the Committee determines otherwise at the time of the grant.

Change In Control. The Compensation Committee may, in an award agreement, provide for the effect of a change in control on an award. These provisions may include the acceleration of vesting of an award, the elimination or modification of performance or other conditions, the extension of the time for exercise or realizing gain from an award, the acceleration of payment, cash settlement of an award or other adjustments that the Compensation Committee considers appropriate.

Term; Amendment and Termination. The term of the Plan is ten years. The Board may terminate or amend the Plan at any time, subject to shareholder approval under certain circumstances provided in the Plan. However, no amendment of the Plan will adversely affect the rights under any previously granted award.

Effective upon completion of the Equity Public Offering, each of Messrs. Newman and Fadden will receive options to purchase 975,000 Common Shares; Mr. Price will receive an option to purchase 300,000 Common Shares; and Messrs. Robbie, Lombardozzi and Schmidt will each receive an option to purchase 150,000 Common Shares. In addition, other employees of the Company will receive options to purchase in the aggregate 1,345,000 Common Shares, and each of the nonemployee directors of the Company other than Mr. Newman will receive options to purchase 25,000 Common Shares, in each case effective upon completion of the Equity Public Offering. All of these options will have an exercise price per Common Share equal to the initial public offering price per Common Share and a term of ten years, and will provide for the grant of reload options in accordance with the terms of the 2002 Share Incentive Plan.

Platinum Capital Accumulation Plan

Platinum has adopted the Capital Accumulation Plan (the "CAP Plan"), which will become effective upon completion of the Equity Public Offering. The CAP Plan provides for the payment of a portion of a participant's annual bonus compensation in the form of restricted shares or in share options. The material features of the CAP Plan are summarized below.

Purpose. The purpose of the CAP Plan is to advance the interests of Platinum Holdings and its shareholders by attracting, retaining and motivating key personnel upon whose judgment, initiative and effort the successful conduct of Platinum Holdings' operations is largely dependent. The CAP Plan is also intended to further align the interests of officers, employees and consultants with those of the shareholders by promoting the ownership of Common Shares by these individuals.

Available Shares. No Common Shares are separately authorized for issuance under the CAP Plan. All Common Shares subject to awards under the CAP Plan shall be taken from the Common Shares reserved under the 2002 Share Incentive Plan, as adjusted under the terms thereof.

Administration. The CAP Plan will be administered by the Compensation Committee of the Board of Directors of Platinum Holdings. The Compensation Committee shall, to the extent deemed necessary or advisable by the Board, be constituted so as to comply with the "non-employee director" requirements of Rule 16b-3 under the Exchange Act and the "outside director" requirements of Section 162(m) of the Code. Subject to the limitations set forth in the CAP Plan, the Compensation Committee has the authority to determine which employees are eligible to participate in the CAP Plan, the number of restricted shares or share options to be awarded, the vesting schedule of the share awards and the other terms and conditions of participation. The Compensation Committee will have the right, from time to time, to delegate to one or more officers

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of Platinum Holdings the authority of the Committee to grant and determine the terms and conditions of awards, subject to certain limitations.

Eligibility. Awards under the CAP Plan may generally be granted to any officer or other employee or consultant of Platinum Holdings or its subsidiaries who is entitled to bonus or incentive awards and is designated by the Compensation Committee to participate based on such criteria as the Committee deems appropriate. Upon designation by the Compensation Committee, participation in the CAP Plan is generally mandatory, although the Committee may in certain circumstances make participation elective.

Restricted Shares. A portion of each participant's annual bonus compensation, determined in the discretion of the Compensation Committee, will be paid in the form of restricted shares. The price of the restricted shares for purposes of determining the number of shares to be issued may be discounted from fair market value (as defined in the CAP Plan) at the discretion of the Compensation Committee (to a maximum of 25%) in order to reflect the impact of the restricted nature and potential forfeiture of the shares. The participant is not able to sell, pledge or otherwise dispose of the restricted shares, except by will or the laws of descent and distribution, for a period of two years, or such other period, and subject to such conditions, as may be determined by the Compensation Committee. In the event that the participant has been continuously employed by Platinum Holdings or its subsidiaries upon expiration of the restricted period, the participant shall obtain full dispositive power over his or her shares. The Compensation Committee may provide, in its discretion, that the restrictions on the restricted shares immediately lapse upon certain termination of the participant's employment or upon the death, disability or retirement of a participant.

Share Options. The Compensation Committee may in its discretion permit a participant to elect to receive up to one-third of his or her award in the form of a grant of non-qualified options. The Compensation Committee will determine the number of options to be awarded in lieu of each share of restricted shares. The exercise price of an option will be determined by the Compensation Committee, provided that the exercise price per share will not be less than the fair market value of a Common Share on the date of the grant of the option. The Compensation Committee will determine the vesting requirements and the term of exercise of each option, including the effect of termination of employment or service of a participant, provided, that unless the Committee provides otherwise, the option will become vested and exercisable on the second anniversary of the date of grant if the participant has been continuously employed by Platinum Holdings or its subsidiaries. The term of a share option will be ten years from the date of grant unless otherwise provided by the Compensation Committee. To exercise an option, the participant must pay the exercise price, subject to specified conditions in cash or in Common Shares, through a broker-assisted "cashless exercise," or by combination of any of the above methods approved by the Committee and must pay any required tax withholding amounts.

Change In Control. The Compensation Committee may, in an award agreement, provide for the effect of a change in control on an award of restricted shares or share options. These provisions may include the lapse of restrictions or the acceleration of vesting of an award, the elimination or modification of any conditions, the extension of the time for exercise, provision for cash settlement of an award or other adjustments that the Compensation Committee considers appropriate.

Term, Amendment and Termination. The term of the CAP Plan is ten years. The Board may amend the CAP Plan at any time, subject to shareholder approval under certain circumstances provided in the CAP Plan or terminate the CAP Plan at any time, in each case, except as would adversely affect outstanding awards without participant consent. However, no amendment of the CAP Plan will adversely affect the rights under any previously granted award.

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ST. PAUL INVESTMENT AND PRINCIPAL SHAREHOLDERS

We expect to enter into a Formation and Separation Agreement relating to, among other things, the St. Paul Investment, which is the issuance of an aggregate of Common Shares, or % of the outstanding Common Shares, as well as the St. Paul Option described below, to St. Paul in return for the Cash Contribution and St. Paul's contribution of the Transferred Business and its agreement to enter into various agreements with us. If the underwriters exercise their option to purchase up to an additional 5,100,000 Common Shares in the Equity Public Offering in whole or in part, St. Paul will be issued additional Common Shares in order for it to retain the % interest, or up to Common Shares.

As part of the consideration for the Cash Contribution and St. Paul's contribution of the Transferred Business, we will grant St. Paul the St. Paul Option, which is a ten-year option, exercisable in whole or in part, to purchase, at % of the initial public offering price, up to Common Shares.

The principal terms of the St. Paul Option are described under "Certain Relationships and Related Transactions—Option Agreement."

The following table shows St. Paul's ownership following the Equity Public Offering and St. Paul Investment, reflecting no exercise and full exercise of the underwriters' option to purchase additional Common Shares:

Shares Issued to St. Paul with No Over-Allotment Option Exercised		Shares Issued to St. Paul If Underwriters' Over-Allotment Option Exercised in Full		Ownership of Common Shares by St. Paul following the Equity Public Offering and St. Paul Investment

St. Paul's address is 385 Washington Street, St. Paul, Minnesota 55102. The Company is not aware of any potential 5% beneficial owner of Common Shares other than St. Paul.

The completion of the St. Paul Investment under the Formation and Separation Agreement is conditioned upon completion of the Equity Public Offering. The closing of the St. Paul Investment will occur simultaneously with the completion of the Equity Public Offering. The completion of the Equity Public Offering and the completion of the ESU Offering are conditioned on each other.

St. Paul has been granted rights to require the Company to register all of the Common Shares St. Paul acquires pursuant to the St. Paul Investment, the St. Paul Option or otherwise as provided under the Formation and Separation Agreement. See "Shares Eligible For Future Sale" and "Certain Relationships and Related Transactions."

Messrs. Newman, Fadden and Carmichael have indicated an intent to purchase Common Shares in the Equity Public Offering as follows:

Mr. Newman		Common Shares with an aggregate purchase price of $1 million
Mr. Fadden		Common Shares with an aggregate purchase price of between $150,000 and $200,000
Mr. Carmichael		2,500 Common Shares

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In addition, our directors and executive officers have been granted stock options effective upon completion of the Equity Public Offering. The following table sets forth the number of Common Shares subject to the options granted to our directors and executive officers.

Name of Beneficial Owner	Number of Common Shares subject to Stock Options expected to be granted upon completion of the Equity Public Offering	Percent of Class(1)

Steven H. Newman	975,000	%
Jerome T. Fadden	975,000	%
Michael D. Price	300,000	*
Neal J. Schmidt	150,000	*
William A. Robbie	150,000	*
Michael E. Lombardozzi	150,000	*
H. Furlong Baldwin	25,000	*
Dan R. Carmichael	25,000	*
Jonathan F. Bank	25,000	*
Jay S. Fishman	25,000	*
Peter T. Pruitt	25,000	*
Directors and executive officers as a group	2,825,000	%

(1): Assuming that Common Shares are outstanding upon completion of the Equity Public Offering, which excludes (i) Common Shares which may be issued pursuant to the underwriters' option to purchase additional Common Shares, and additional Common Shares to be issued to St. Paul if the underwriters exercise their option, (ii) Common Shares which may be issued pursuant to the St. Paul Option, (iii) Common Shares which may be issued pursuant to the Platinum 2002 Share Incentive Plan and (iv) Common Shares which may be issued pursuant to the purchase contracts that are part of the equity security units issued in the ESU Offering.
*: Less than 1%.

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SHARES ELIGIBLE FOR FUTURE SALE

Prior to the Equity Public Offering, there has been no public market for the Common Shares, and no predictions can be made as to the effect, if any, that market sales of Common Shares or the availability of Common Shares for sale will have on the market price prevailing from time to time. Public or private sales of substantial amounts of Common Shares, or the perception that such sales could take place, may adversely affect prevailing market prices of the Common Shares as well as the ability of the Company to raise additional capital in the public equity markets at a desirable time and price.

Upon completion of the Equity Public Offering, the ESU Offering and the St. Paul Investment, Platinum Holdings will have outstanding Common Shares (assuming the underwriters' option to purchase additional Common Shares is not exercised), 34,000,000 of which will have been sold in the Equity Public Offering and of which will have been issued in the St. Paul Investment as described under "St. Paul Investment and Principal Shareholders." In the event the underwriters' option to purchase additional Common Shares is exercised in full, St. Paul will be issued (as part of the consideration for the Transferred Business) up to an aggregate of Common Shares in order to maintain its % initial share ownership in Platinum Holdings. As a result, if the underwriters' option to purchase additional Common Shares is exercised in full and St. Paul is issued these additional Common Shares, there would be outstanding an additional Common Shares. Furthermore, upon the settlement of the purchase contracts forming part of the units on , 2005, an additional number of Common Shares, to be determined based upon a settlement rate, will be sold to the holders of the units. In that event, St. Paul may exercise its pre-emptive rights to purchase a corresponding number of Common Shares to maintain its proportionate ownership interest in Platinum Holdings. In addition, St. Paul may acquire up to an additional Common Shares through exercise of the St. Paul Option, and the purchase contracts underlying the units to be sold in the ESU Offering obligate us to sell, for $25, on , 2005, a number of newly issued Common Shares equal to a settlement rate based on the average trading price of our Common Shares at that time. The Common Shares sold in the Equity Public Offering and issuable to the holders of units on , 2005 will be freely transferable without restriction or further registration under the 1933 Act, except for any of those Common Shares owned at any time by an "affiliate" of the Company within the meaning of Rule 144 under the 1933 Act (which sales will be subject to volume limitations and certain other restrictions). The Common Shares issued in the St. Paul Investment or upon exercise of the St. Paul Option and the Common Shares St. Paul may purchase upon the settlement of the purchase contracts forming part of the units, will be deemed "restricted securities" as defined in Rule 144 under the 1933 Act and may not be resold in the absence of registration under the 1933 Act or pursuant to an exemption from such registration, including the exemption provided by Rule 144 under the 1933 Act.

In connection with the St. Paul Investment, Platinum Holdings granted St. Paul the right to require the registration of its Common Shares under the 1933 Act. See "Certain Relationships and Related Transactions—Registration Rights Agreement with St. Paul."

Platinum Holdings, its officers and directors, and St. Paul have agreed with the underwriters not to dispose of or hedge any of the Common Shares or securities convertible into or exchangeable for Common Shares during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of Goldman, Sachs & Co. This agreement does not apply to any existing employee benefit plans.

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PLATINUM UNDERWRITERS FINANCE, INC.

Platinum Finance is a Delaware corporation created with the filing of a certificate of incorporation with the Secretary of State of the State of Delaware on May 10, 2002. The certificate of incorporation is in the form filed as an exhibit to the registration statement of which this prospectus forms a part. As of the date hereof, Platinum Finance has no indebtedness and no subsidiaries. Immediately after the completion of this offering, Platinum Finance will own all of the outstanding capital stock of Platinum US.

Platinum Finance was formed in order to:

(a) issue the senior notes; and

(b) contribute a portion of the proceeds of the senior notes to Platinum US. It may engage in activities necessary, appropriate, convenient or incidental to these purposes, but may also engage in other financings and activities.

The senior notes will initially be pledged and held by the collateral agent to secure the obligations of the holders of units under the related purchase contracts. The senior notes will be unsecured and guaranteed by Platinum Holdings on a senior, unsecured basis.

The senior notes will rank equally with all of Platinum Finance's future unsecured senior indebtedness but will be effectively subordinated to any indebtedness or other obligations of Platinum Finance's subsidiaries. Neither Platinum US nor Platinum UK is currently expected to issue preferred stock but Platinum US is expected to owe Platinum Regency $100 million pursuant to a surplus note. Other than with respect to interest payments due on the senior notes on or prior to the share purchase date, which will be funded out of proceeds of the offering retained by Platinum Finance, all distributions on the senior notes will be made available through the receipt of dividends by Platinum Finance from Platinum US.

ACCOUNTING TREATMENT

The net proceeds from the sale of the units will be allocated between the purchase contracts and the senior notes in our consolidated financial statements based on the underlying fair value of each instrument. The present value of the purchase contract adjustment payments will be initially charged to shareholders' equity, with an offsetting credit to liabilities. Subsequent contract adjustment payments will be allocated between this liability account and interest expense based on a constant rate calculation over the life of the transaction.

The purchase contracts are forward transactions in the Common Shares. Upon settlement of a purchase contract, Platinum Holdings will receive $25 pursuant to that purchase contract and will issue the requisite number of Common Shares. The $25 Platinum Holdings receives will be credited to shareholders' equity and allocated between the Common Shares and additional paid-in capital accounts.

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DESCRIPTION OF THE EQUITY SECURITY UNITS

We summarize below the principal terms of the equity security units, which are referred to as the "units", and the purchase contracts and senior notes which comprise the units. The following description is not complete, and we refer you to the agreements which will govern your rights as a holder of units. See "Available Information."

Overview

Each unit will have a stated amount of $25. Each unit will initially consist of and represent:

(1) a purchase contract pursuant to which:

•: you will agree to purchase, and Platinum Holdings will agree to sell, for $25, Common Shares on the share purchase date, the number of which will be determined by the settlement rate described below, based on the average trading price of the Common Shares for a period preceding the share purchase date, calculated in the manner described below; and
•: Platinum Holdings will pay you contract adjustment payments on a quarterly basis at the annual rate of % of the stated amount of $25, subject to its right to defer such payments as specified below; and

(2) a 1/40, or 2.5%, ownership interest in a senior note due , 2007 of Platinum Finance, an indirect, wholly owned subsidiary of Platinum Holdings, with a principal amount of $1,000, on which Platinum Finance will pay interest at the initial annual rate of % until the settlement date of a successful remarketing of the senior notes and at the reset rate (as described below) thereafter. On and prior to the share purchase date, interest will be payable quarterly in arrears and, thereafter, semi-annually in arrears. The senior notes will be guaranteed by Platinum Holdings on a senior, unsecured basis.

The ownership interests in senior notes that are a component of your units will be owned by you, but will initially be pledged to the collateral agent for the benefit of Platinum Holdings to secure your obligations under the related purchase contracts. Each holder of normal units may elect at any time on or before the second business day prior to the share purchase date (subject to certain exceptions) to withdraw from the pledge the pledged senior notes or, after a successful remarketing or tax event redemption described below, the pledged treasury securities underlying the normal units by substituting, as pledged securities, specifically identified treasury securities that will pay at maturity an amount equal to the aggregate principal amount of the senior notes or treasury consideration, as the case may be, for which substitution is being made. Upon such substitution, the pledged senior notes or pledged treasury securities, as the case may be, will be released from the pledge and delivered to the holder. The normal units would then become "stripped units." Holders of stripped units may recreate normal units by re-substituting senior notes or, after a successful remarketing or a tax event redemption, the applicable specified treasury securities, for the treasury securities underlying the stripped units.

Platinum Holdings will enter into:

•: a purchase contract agreement with JPMorgan Chase Bank, as purchase contract agent, governing the appointment of the purchase contract agent as the agent and attorney-in-fact for the holders of the units, the purchase contracts, the transfer, exchange or replacement of certificates representing the units and certain other matters relating to the units; and
•: a pledge agreement with State Street Bank, as collateral agent, custodial agent and securities intermediary, creating a pledge and security interest for its benefit to secure the obligations of holders of units under the purchase contracts.

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As a beneficial owner of the units, you will be deemed to have:

•: irrevocably agreed to be bound by the terms of the purchase contract agreement, the pledge agreement and your purchase contract for so long as you remain a beneficial owner of such units; and
•: appointed the purchase contract agent under the purchase contract agreement as your agent and attorney-in-fact to enter into and perform the purchase contract and pledge agreement on your behalf and in your name.

In addition, as a beneficial owner of the units, you will be deemed by your acceptance of the units to have agreed, for all tax purposes, to treat yourself as the owner of the related interests in the senior notes or the treasury securities, as the case may be, and to treat your interest in the senior notes as Platinum Finance's indebtedness.

We will allocate the entire purchase price of each unit to the ownership interest in the related senior note and none to the related purchase contract on our consolidated financial statements.

Creating Stripped Units and Recreating Normal Units

Holders of normal units will have the ability to "strip" those units and take delivery of the pledged senior notes or, after a successful remarketing or tax event redemption, the pledged treasury securities, creating "stripped units," and holders of stripped units will have the ability to recreate normal units from their stripped units by depositing senior notes or, after a successful remarketing or tax event redemption, the applicable treasury securities as described in more detail below. Holders who elect to create stripped units or recreate normal units will be responsible for any related fees or expenses.

Creating Stripped Units

Each holder of normal units may create stripped units and withdraw the pledged senior notes or, after a successful remarketing or tax event redemption, the pledged treasury securities underlying the normal units by substituting, as pledged securities, the treasury securities described below in a total principal amount at maturity equal to the aggregate principal amount of the senior notes or treasury securities, as the case may be, for which substitution is being made. Holders of normal units may create stripped units at any time on or before the second business day prior to the share purchase date, except that they may not create stripped units during the period from four business days prior to the first day of any remarketing period until the expiration of three business days after the end of that period.

Because treasury securities are issued in integral multiples of $1,000, holders of normal units may make the substitution only in integral multiples of 40 normal units. However, after a successful remarketing of the senior notes or the occurrence of a tax event redemption, the holders may make the substitution only in integral multiples of normal units such that both the treasury securities to be deposited and the treasury securities to be released are in integral multiples of $1,000. In order to create 40 stripped units, a normal unit holder must substitute, as pledged securities, zero-coupon U.S. treasury securities (CUSIP No. ) which mature on , 2005 and will pay $1,000 at maturity. Upon creation of the stripped units, the treasury securities will be pledged with the collateral agent to secure your obligation to purchase the Common Shares under your purchase contract, and the pledged senior notes or, after a successful remarketing or tax event redemption, the pledged treasury securities underlying the normal units will be released to the unit holder.

To create stripped units, you must:

•: deposit with the collateral agent the treasury securities described above, which will be substituted for the pledged senior notes or, after a successful remarketing or tax event

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redemption, the pledged treasury securities underlying your normal units and pledged to the collateral agent to secure your obligation to purchase the Common Shares under your purchase contract;

•: transfer the normal units to the purchase contract agent; and
•: deliver a notice to the purchase contract agent stating that you have deposited the specified treasury securities with the collateral agent and are requesting that the purchase contract agent instruct the collateral agent to release to you the pledged senior notes or, after a successful remarketing or tax event redemption, the pledged treasury securities underlying the normal units.

Upon the deposit and the receipt of an instruction from the purchase contract agent, the collateral agent will effect the release to the purchase contract agent of the underlying pledged senior notes or, after a successful remarketing or tax event redemption, the pledged treasury securities from the pledge under the pledge agreement free and clear of Platinum Holdings' security interest. The purchase contract agent will:

•: cancel the related normal units;
•: transfer to you the underlying pledged senior notes or, after a successful remarketing or tax event redemption, the pledged treasury securities; and
•: deliver to you the stripped units.

Any senior notes or treasury securities, as the case may be, released to you will be tradable separately from the resulting stripped units. Interest on the senior notes will continue to be payable in accordance with their terms.

Recreating Normal Units

Each holder of stripped units may recreate normal units by substituting, as pledged securities, senior notes or, after a successful remarketing or tax event redemption, the applicable treasury securities then constituting a part of the normal units for the treasury securities underlying the stripped units. Holders may recreate normal units at any time on or before the second business day prior to the share purchase date, except that they may not recreate normal units during the period from four business days prior to the first day of any remarketing period until the expiration of three business days after the end of that period.

Upon recreation of normal units, the senior notes or, after a successful remarketing or tax event redemption, the applicable treasury securities will be pledged with the collateral agent to secure the holder's obligation to purchase Common Shares under the purchase contract, and the treasury securities underlying the stripped units will be released to the unit holder. Because treasury securities are issued in integral multiples of $1,000, holders of stripped units may make the substitution only in integral multiples of 40 stripped units. If, however, treasury securities have replaced the senior notes as a component of the normal units as the result of a successful remarketing of the senior notes or a tax event redemption, holders of the stripped units may make this substitution at any time on or prior to the second business day immediately preceding the share purchase date, but using the applicable treasury securities instead of senior notes and only in integral multiples of stripped units such that both the treasury securities to be deposited and the treasury securities to be released are in integral multiples of $1,000.

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To recreate normal units from stripped units, you must:

•

deposit with the collateral agent:

•: if the substitution occurs prior to a successful remarketing of the senior notes or the occurrence of a tax event redemption, senior notes having an aggregate principal amount equal to the aggregate stated amount of your stripped units; or
•: if the substitution occurs after a successful remarketing of the senior notes or the occurrence of a tax event redemption, the applicable treasury securities then constituting a part of the normal units;

•: transfer the stripped units to the purchase contract agent; and
•: deliver a notice to the purchase contract agent stating that you have deposited the senior notes or, after a successful remarketing or tax event redemption, the applicable treasury securities with the collateral agent and are requesting that the purchase contract agent instruct the collateral agent to release to you the pledged treasury securities underlying those stripped units.

The senior notes or, after a successful remarketing or tax event redemption, the applicable treasury securities will be substituted for the pledged treasury securities underlying your stripped units and will be pledged with the collateral agent to secure your obligation to purchase Common Shares under your purchase contract.

Upon the deposit and receipt of an instruction from the purchase contract agent, the collateral agent will effect the release to the purchase contract agent of the underlying pledged treasury securities from the pledge under the pledge agreement free and clear of Platinum Holdings' security interest. The purchase contract agent will:

•: cancel the related stripped units;
•: transfer to you the underlying treasury securities; and
•: deliver to you the normal units.

Current Payments

If you hold normal units, you will receive payments consisting of:

•: quarterly contract adjustment payments on the purchase contracts payable by Platinum Holdings at the annual rate of % of the $25 stated amount through and including the share purchase date;
•: quarterly interest payments on the senior notes pledged in respect of your normal units at the annual rate of % of the principal amount until a successful remarketing of the senior notes; and
•: if your senior notes are successfully remarketed, a cash payment on the share purchase date in respect of each of your normal units equal to 1/40, or 2.5%, of a quarterly interest payment payable on the $1,000 principal amount of a senior note at the initial annual rate of %.

If you hold stripped units and do not separately hold senior notes, you will receive only quarterly contract adjustment payments on the purchase contracts payable by Platinum Holdings at the annual rate of % of the $25 stated amount through and including the share purchase date. However, you will be required for U.S. federal income tax purposes to recognize original issue discount on the pledged treasury securities on a constant yield basis or acquisition discount on the treasury securities when it is paid or accrues generally in accordance with your regular method of tax accounting.

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The contract adjustment payments are subject to deferral by Platinum Holdings until no later than the share purchase date as described below. If Platinum Holdings defers any of these payments, Platinum Holdings will accrue additional payments on the deferred amounts at the annual rate of % until paid. Platinum Finance is not entitled to defer interest payments on the senior notes.

Both Platinum Holdings and Platinum Finance are holding companies with no operations of their own. Platinum Holdings' ability to pay its obligations under the purchase contracts and the guarantee is dependent upon its ability to obtain cash dividends or obtain loans from its subsidiaries. Similarly, Platinum Finance's ability to pay its obligations under the senior notes is dependent upon its ability to obtain cash dividends or obtain loans from its subsidiaries. Platinum Holdings' and Platinum Finance's operating subsidiaries are separate and distinct legal entities and will have no obligation, contingent or otherwise, to pay any dividends or make any other distributions (except for payments required pursuant to the terms of intercompany indebtedness) to Platinum Holdings or Platinum Finance. Various financing arrangements, charter provisions and regulatory requirements may impose certain restrictions on the abilities of Platinum Holdings' and Platinum Finance's subsidiaries to transfer funds to Platinum Holdings and Platinum Finance in the form of cash dividends, loans or advances. See "Business—Regulation."

In addition, because Platinum Holdings and Platinum Finance are holding companies, except to the extent that Platinum Holdings or Platinum Finance have priority or equal claims against their subsidiaries as a creditor, Platinum Finance's obligations under the senior notes and Platinum Holdings obligations under the guarantee and the purchase contracts will be effectively subordinated to the debt and other obligations of their respective subsidiaries because, as the shareholders of their subsidiaries, they will be subject to the prior claims of creditors of their subsidiaries. As of , 2002, Platinum Finance's subsidiaries had approximately $ of aggregate outstanding debt and other obligations and, as of such date, Platinum Holdings' subsidiaries, excluding Platinum Finance's obligations under the senior notes, had approximately $ of aggregate outstanding debt and other obligations.

If you hold senior notes separately from the units and do not separately hold stripped units, you will receive only the interest payable on the senior notes. The senior notes, whether held separately from or as part of the units, will pay interest at the initial annual rate of % of the principal amount of $1,000 per senior note until the settlement date of a successful remarketing. If there is a successful remarketing of the senior notes, the rate of interest payable from the settlement date of the successful remarketing until their maturity on , 2007 will be the reset rate, which will be a rate established by the remarketing agent that meets the requirements described under "—Remarketing." However, if a reset rate meeting the requirements described in this prospectus cannot be established on a remarketing date, the interest rate will not be reset on such date and will continue to be the initial annual rate of %, until a reset rate meeting the requirements described in this prospectus can be established on a later date no later than the third business day prior to the share purchase date. If no remarketing occurs prior to the share purchase date, the initial rate will continue to be the rate at which the senior notes accrue interest until maturity of the senior notes.

Contract adjustment payments and interest payments on the senior notes payable for any period will be computed (1) for any full quarterly period on the basis of a 360-day year of twelve 30-day months and (2) for any period shorter than a full quarterly period, on the basis of a 30-day month and, for periods of less than a month, on the basis of the actual number of days elapsed per 30-day month. Contract adjustment payments and interest on the senior notes will accrue from the date of original issuance and will be payable quarterly in arrears on , , and of each year, commencing on , 2002; provided, however, that following the share purchase date, interest on the senior notes shall be payable

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semi-annually in arrears on and of each year. Contract adjustment payments shall cease accruing on the share purchase date. However, if the purchase contracts are settled early, at your option, or terminated (upon the occurrence of certain events of bankruptcy, insolvency or reorganization with respect to Platinum Holdings), the right to receive contract adjustment payments and deferred contract adjustment payments will also terminate.

Platinum Finance's obligations with respect to the senior notes will be unsecured and will rank equally with all of its other unsecured and unsubordinated debt. See "Description of the Senior Notes" below. Platinum Holdings' guarantee of Platinum Finance's obligations with respect to the senior notes will be unsecured and will rank equally in right of payment to all other senior unsecured debt of Platinum Holdings. Platinum Holdings' obligations with respect to contract adjustment payments will be subordinate and junior in right of payment to its obligations under its senior debt.

Contract adjustment payments and interest payments on the senior notes will be payable to the holders of units as they are registered on the books and records of the purchase contract agent on the relevant record dates. So long as the units remain in book-entry only form, the record date will be the business day prior to the relevant payment dates. Contract adjustment payments will be paid through the purchase contract agent, which will hold amounts received in respect of the contract adjustment payments for the benefit of the holders of the purchase contracts that are a part of such units. Subject to any applicable laws and regulations, each interest payment on the senior notes will be made as described under "Global Clearance and Settlement" below. If the units do not remain in book-entry only form, the relevant record dates will be the 15th calendar day prior to the relevant payment dates. If any date on which these payments and distributions are to be made is not a business day, then amounts payable on that date will be made on the next day that is a business day (and so long as the payment is made on the next business day, without any interest or other payment on account of any such delay). However, if such business day is in the next calendar year, payment will be made on the prior business day, in each case with the same force and effect as if made on the payment date.

Option to Defer Contract Adjustment Payments

Platinum Holdings may, at its option and upon prior written notice to the holders of the units and the purchase contract agent, defer payment of all or part of the contract adjustment payments on the related purchase contracts forming a part of normal units and stripped units until no later than the share purchase date. However, deferred contract adjustment payments will accrue additional contract adjustment payments at the rate of % per year (compounding on each succeeding payment date) until paid. If you elect to settle your purchase contracts early, or the purchase contracts are terminated upon the occurrence of certain events of bankruptcy, insolvency or reorganization with respect to Platinum Holdings, your right to receive contract adjustment payments and deferred contract adjustment payments will also terminate.

In the event that Platinum Holdings elects to defer the payment of contract adjustment payments on the purchase contracts until the share purchase date, each holder of normal units and stripped units will receive on the share purchase date in respect of the deferred contract adjustment payments, in lieu of a cash payment, a number of Common Shares equal to (a) the aggregate amount of deferred contract adjustment payments payable to the holder divided by (b) the applicable market value of the Common Shares (as defined below under "—Description of the Purchase Contracts").

Platinum Holdings will not issue any fractional Common Shares with respect to the payment of deferred contract adjustment payments on the share purchase date. In lieu of fractional shares otherwise issuable with respect to such payment of deferred contract adjustment payments, the holder will be entitled to receive an amount in cash equal to the fraction of a Common Share,

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calculated on an aggregate basis with respect to all such payments you are entitled to receive, multiplied by the applicable market value of the Common Shares.

In the event Platinum Holdings exercises its option to defer the payment of contract adjustment payments, then until the deferred contract adjustment payments have been paid, it will not declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of Platinum Holdings' capital stock other than:

•: purchases, redemptions or acquisitions of shares of its capital stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or agents or a share purchase or dividend reinvestment plan, or the satisfaction by Platinum Holdings of its obligations pursuant to any contract or security outstanding on the date of such event;
•: as a result of a reclassification of capital stock or the exchange or conversion of one class or series of its capital stock for another class or series of its capital stock;
•: the purchase of fractional interests in shares of its capital stock pursuant to the conversion or exchange provisions of the capital stock or the security being converted or exchanged;
•: dividends or distributions in its capital stock (or rights to acquire its capital stock), or repurchases, redemptions or acquisitions of its capital stock in connection with the issuance or exchange of its capital stock (or securities convertible into or exchangeable for shares of its capital stock); or
•: redemptions, exchanges or repurchases of any rights outstanding under a shareholder rights plan or the declaration or payment thereunder of a dividend or distribution of or with respect to rights in the future.

Platinum Holdings' subsidiaries will not be restricted from making any similar payments on their capital stock if Platinum Holdings exercises its option to defer payments of any contract adjustment payments.

Description of the Purchase Contracts

Each purchase contract underlying a unit, unless earlier terminated, or earlier settled at your option or upon specified mergers and other transactions described below, will obligate you to purchase, and Platinum Holdings to sell, for $25, on the share purchase date a number of newly issued Common Shares equal to the settlement rate.

The settlement rate, subject to adjustment under certain circumstances as described under "—Anti-dilution Adjustments" below, will be as follows:

•: If the "applicable market value" of the Common Shares (which is the average of the closing price per Common Share on each of the 20 consecutive trading days ending on the third trading day immediately preceding the share purchase date) is equal to or greater than the threshold appreciation price of $ (which is % above $ , which is the initial public offering price of the Common Shares) then the settlement rate (which is equal to $25 divided by $ ) will be Common Shares per purchase contract. Accordingly, if the market price for the Common Shares increases to an amount that is greater than $ on the settlement date, the aggregate market value of the Common Shares issued upon settlement of each purchase contract, assuming that this market value is the same as the applicable market value of the Common Shares, will be greater than $25, and if the market price equals $ the aggregate market value of those shares, assuming that this market value is the same as the applicable market value of the Common Shares, will equal $25.

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•: If the applicable market value of the Common Shares is less than $ but greater than $ , the settlement rate will be equal to $25 divided by the applicable market value of Common Shares per purchase contract. Accordingly, if the market price for the Common Shares increases but that market price is less than $ on the settlement date, the aggregate market value of the Common Shares issued upon settlement of each purchase contract, assuming that this market value is the same as the applicable market value of the Common Shares, will equal $25.
•: If the applicable market value of the Common Shares is less than or equal to $ , the settlement rate (which is equal to $25 divided by $ ) will be Common Shares per purchase contract. Accordingly, if the market price for the Common Shares decreases to an amount that is less than $ on the settlement date, the aggregate market value of the Common Shares issued upon settlement of each purchase contract, assuming that this market value is the same as the applicable market value of the Common Shares, will be less than $25, and if the market price equals $ , the aggregate market value of those shares, assuming that this market value is the same as the applicable market value of the Common Shares, will equal $25.

For purposes of determining the applicable market value for the Common Shares, the closing price of the Common Shares on any date of determination means the closing sale price or, if no closing sale price is reported, the last reported sale price of the Common Shares on the New York Stock Exchange on that date. If the Common Shares are not listed for trading on the New York Stock Exchange on any date, the closing price of the Common Shares on any date of determination means the closing sale price as reported in the composite transactions for the principal U.S. securities exchange on which the Common Shares are listed, or if the Common Shares are not so listed on a U.S. securities exchange, as reported by the Nasdaq stock market, or, if the Common Shares are not so reported, the last quoted bid price for the Common Shares in the over-the-counter market as reported by the National Quotation Bureau or similar organization or, if that bid price is not available, the market value of the Common Shares on that date as determined by a nationally recognized independent investment banking firm retained by Platinum Holdings for this purpose.

A trading day is a day on which the Common Shares (1) are not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business and (2) have traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of the Common Shares by the close of business on such day.

Settlement

Settlement of the purchase contracts will occur on the share purchase date, unless:

•: you have settled the related purchase contract prior to the share purchase date through the delivery of cash to the purchase contract agent in the manner described in "—Early Settlement";
•: Platinum Holdings is involved in a merger, acquisition or consolidation prior to the share purchase date in which at least 30% of the consideration for the Common Shares consists of cash or cash equivalents, and you have settled the related purchase contract through an early settlement as described in "—Early Settlement Upon Cash Merger"; or
•: an event described under "—Termination of Purchase Contracts" below has occurred.

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The settlement of the purchase contracts on the share purchase date will occur as follows:

•: for the stripped units or normal units that include pledged treasury securities, the cash payments on the treasury securities will automatically be applied to satisfy in full your obligation to purchase the Common Shares under the purchase contracts; and
•: for the normal units in which the related senior notes remain a part of the normal units because of a failed remarketing, Platinum Holdings will exercise its rights as a secured party to dispose of the senior notes in accordance with applicable law in order to satisfy in full your obligation to purchase Common Shares under the purchase contracts.

In either event, the Common Shares will then be issued and delivered to you or your designee, upon payment of the applicable consideration, presentation and surrender of the certificate evidencing the units, if the units are held in certificated form, and payment by you of any transfer or similar taxes payable in connection with the issuance of the Common Shares to any person other than you.

Prior to the date on which the Common Shares are issued in settlement of the purchase contracts, the Common Shares underlying the related purchase contracts will not be deemed to be outstanding for any purpose and you will have no rights with respect to the Common Shares, including voting rights, rights to respond to tender offers and rights to receive any dividends or other distributions on the Common Shares, by virtue of holding the purchase contracts.

No fractional Common Shares will be issued by Platinum Holdings pursuant to the purchase contracts. In lieu of fractional shares otherwise issuable, you will be entitled to receive an amount in cash equal to the fraction of a Common Share, calculated on an aggregate basis in respect of the purchase contracts you are settling, multiplied by the applicable market value.

Remarketing

The senior notes held by each holder of normal units will be remarketed in a remarketing, unless the holder elects not to participate in the remarketing. In the event of a successful remarketing, the proceeds of such remarketing will be used to purchase treasury securities, which will be pledged to secure the obligations of such participating holder of normal units under the related purchase contract. Cash payments received upon maturity of the pledged treasury securities underlying the normal units of such holder will be used (1) to satisfy such holder's obligation to purchase Common Shares on the share purchase date and (2) to make a cash payment to such holder on the share purchase date of an amount per normal unit equal to 1/40, or 2.5%, of a quarterly interest payment payable on the $1,000 principal amount of a senior note at the initial annual rate of %.

Unless a holder of normal units delivers treasury securities in the amount and the types specified by the remarketing agent, as described below, the senior notes that are included in the normal units will be remarketed on the remarketing date, or, if the remarketing agent fails to remarket the senior notes on such date, a later date as described below. The remarketing date will be the third business day preceding , 2005, the last quarterly payment date before the share purchase date.

Platinum Holdings and Platinum Finance will enter into a remarketing agreement with a nationally recognized investment banking firm, pursuant to which that firm will agree, as remarketing agent, to use commercially reasonable best efforts to remarket the senior notes that are included in normal units (or separately held senior notes) that are participating in the remarketing, at a price per senior note equal to at least 100.25% of the remarketing value. It is currently anticipated that Goldman, Sachs & Co. will be the remarketing agent.

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The "remarketing value" of a senior note will be equal to the sum of:

(1): the value at the remarketing date (or any subsequent remarketing date described below) of such amount of treasury securities that will pay, on or prior to the share purchase date, an amount of cash equal to the interest payment scheduled to be payable on the senior note on that date, assuming for this purpose, even if not true, that the interest rate on the senior notes remains at the initial rate; and
(2): the value at the remarketing date (or any subsequent remarketing date) of such amount of treasury securities that will pay, on or prior to the share purchase date, an amount of cash equal to the principal amount of the senior note.

For purposes of (1) and (2) above, the value on the remarketing date (or any subsequent remarketing date) of the treasury securities will assume that (a) the treasury securities are highly liquid treasury securities maturing on or within 35 days prior to the share purchase date (as determined in good faith by the remarketing agent in a manner intended to minimize the cash value of the treasury securities) and (b) those treasury securities are valued based on the ask-side price of the treasury securities at a time between 9:00 a.m. and 11:00 a.m., New York City time, selected by the remarketing agent, on the remarketing date (or any subsequent remarketing date). as determined on a third-day settlement basis by a reasonable and customary means selected in good faith by the remarketing agent, plus accrued interest to that date.

The remarketing agent will use the proceeds from the successful remarketing of the senior notes included in normal units to purchase, in its discretion, the amount and the types of treasury securities described in (1) and (2) above in respect of each such senior note that has been remarketed. The remarketing agent will purchase such treasury securities in open market transactions or at treasury auction and deliver them through the purchase contract agent to the collateral agent to secure the obligations under the related purchase contracts of the holders of the normal units whose senior notes participated in the remarketing. The remarketing agent will deduct as a remarketing fee, after allowing for the aggregate purchase price of such treasury securities, an amount not exceeding 25 basis points (0.25%) of the total proceeds from such remarketing. The remarketing agent will remit the remaining portion of the proceeds, if any, to the holders of the normal units participating in the remarketing.

Alternatively, a holder of normal units may elect not to participate in the remarketing and, instead, retain the senior notes underlying those normal units by delivering, in respect of each senior note to be retained, the treasury securities described in (1) and (2) above, in the amount and the types specified by the remarketing agent, to the purchase contract agent on or prior to the fourth business day prior to the first day of a remarketing period and such treasury securities will be pledged to secure the obligations of such non-participating holder under the related purchase contracts. Cash payments received upon maturity of such pledged treasury securities will be used (1) to satisfy such holders obligation to purchase common shares pursuant to such holder's purchase contracts and (2) to make a payment to such holder on the share purchase date of an amount per unit equal to a quarterly interest payment on a 1/40 ownership interest of a senior note at the initial annual rate of %. If a holder of senior notes does not participate in the remarketing, the interest rate on such senior notes will nevertheless be reset if the remarketing is successful.

The purchase contract agent will give holders notice of the remarketing, including the specific treasury securities (including the CUSIP numbers and/or the principal terms thereof) that must be delivered by holders that elect not to participate in the remarketing, on the seventh business day prior to the first day of a remarketing period. A holder electing not to participate in the remarketing must notify the purchase contract agent of such election and deliver such specified treasury securities to the purchase contract agent not later than 10:00 a.m., New York City time, on the fourth business day prior to the first day of a remarketing period. A holder that notifies the purchase

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contract agent of such election but does not so deliver the treasury securities and a holder that does not notify the purchase contract agent of its intention to make a cash settlement will be deemed to have elected to participate in the remarketing.

In order to facilitate the remarketing of the senior notes at the remarketing price described above, the remarketing agent will reset the rate of interest on the senior notes, effective from the settlement date of a successful remarking until their maturity on , 2007. The reset rate will be the rate sufficient to cause the then current market value of each senior note to be equal to at least 100.25% of the remarketing value. If the remarketing agent cannot establish a reset rate meeting such requirements on the remarketing date and therefore cannot remarket the senior notes participating in the remarketing on the remarketing date at a price per senior note equal to at least 100.25% of the remarketing value, the remarketing agent will attempt to establish a reset rate meeting these requirements on each of the two immediately following business days. If the remarketing agent cannot establish a reset rate meeting these requirements on either of those days, it will attempt to establish such a reset rate on each of the three business days immediately preceding , 2005. If the remarketing agent cannot establish such a reset rate during that period, it will further attempt to establish such a reset rate on the third business day immediately preceding the share purchase date. We refer to each of these periods as "remarketing periods" in this prospectus. Any such remarketing will be at a price per senior note equal to at least 100.25% of the remarketing value on the subsequent remarketing date. If the remarketing agent fails to remarket the senior notes at that price by the end of the third business day immediately preceding the share purchase date, any holder of normal units that has not otherwise settled its purchase contracts in cash by the business day immediately preceding the share purchase date (but without regard to the notice requirements described below under "—Notice to Settle with Cash") will be deemed to have directed Platinum Holdings to retain the securities pledged as collateral in satisfaction of such holder's obligations under the related purchase contract, and Platinum Holdings will exercise its rights as a secured party with respect to such securities and may, subject to applicable law, retain the securities or sell them in one or more public or private sales to satisfy in full such holder's obligation to purchase the Common Shares under the related purchase contracts on the share purchase date.

Unless the purchase contracts have been settled early, the obligation of a holder of purchase contracts to pay the purchase price for the Common Shares under the underlying purchase contracts on the share purchase date is a non-recourse obligation payable solely out of the proceeds of the senior notes or treasury securities pledged as collateral to secure the purchase obligation. In no event will a holder of a purchase contract be liable for any deficiency between such proceeds and the purchase price for the Common Shares under the purchase contract.

We will cause a notice of any failed remarketing period to be published on the fourth business day immediately following such period, by publication in a daily newspaper in the English language of general circulation in New York City, which is expected to be The Wall Street Journal. We will also release this information by means of Bloomberg and Reuters (or successor or equivalent) newswire. In addition, Platinum Holdings will request, not later than seven nor more than 15 calendar days prior to the remarketing period, that the depositary (initially The Depository Trust Company) notify its participants holding senior notes, normal units and stripped units of the remarketing period.

Optional Remarketing

On or prior to the fourth business day immediately preceding the first day of a remarketing period, but no earlier than the payment date immediately preceding , 2005, holders of senior notes that are not included as part of normal units may elect to have their senior notes included in the remarketing by delivering their senior notes along with a notice of this election to

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the custodial agent. The custodial agent will hold these senior notes in an account separate from the collateral account in which the securities pledged to secure the holders' obligations under the purchase contracts will be held. Holders of senior notes electing to have their senior notes remarketed will also have the right to withdraw that election on or prior to the fourth business day immediately preceding the first day of the relevant remarketing period.

On the business day immediately preceding the first day of a remarketing period, the custodial agent will deliver these separate senior notes to the remarketing agent for remarketing. The remarketing agent will use commercially reasonable best efforts to remarket the separately held senior notes included in the remarketing on the remarketing date at a price per senior note equal to at least 100.25% of the remarketing value. After deducting as a remarketing fee an amount not exceeding 25 basis points (0.25%) of the total proceeds from such remarketing, the remarketing agent will remit to the collateral agent the remaining portion of the proceeds, if any, for payment to such participating holders.

If, as described above, the remarketing agent cannot remarket the senior notes during a remarketing period, the remarketing agent will promptly return the senior notes to the custodial agent to release to the holders following the conclusion of that period.

Early Settlement

At any time not later than 10:00 a.m., New York City time, on the seventh business day prior to , 2005, a holder of units may settle the related purchase contracts by delivering to the purchase contract agent immediately available funds in an amount equal to $25 multiplied by the number of purchase contracts being settled provided that, at such time, if so required under the U.S. federal securities laws, there is in effect a registration statement covering the Common Shares to be delivered in respect of the purchase contracts being settled. If such registration is required, Platinum Holdings will use its commercially reasonable efforts to file and obtain effectiveness of such registration statement. Holders may settle the related purchase contracts early only in integral multiples of 40.

No later than the third business day after an early settlement, Platinum Holdings will issue and deliver, and the holder will be entitled to receive, Common Shares for each unit early settled, regardless of the market price of the Common Shares on the date of early settlement, subject to adjustment under the circumstances described under "—Anti-dilution Adjustments" below. At that time, the holder's right to receive future contract adjustment payments and any deferred contract adjustment payments will terminate. The holder will also receive ownership interests in the senior notes or treasury securities underlying those units.

Notice to Settle with Cash

Unless treasury securities have replaced the ownership interests in the senior notes as a component of normal units as a result of a successful remarketing of the ownership interests in the senior notes, a tax event redemption has occurred or the purchase contract has been settled early or otherwise terminated, a holder of normal units may settle the related purchase contract with separate cash prior to 11:00 a.m., New York City time, on the business day immediately preceding the share purchase date. A holder of a normal unit wishing to settle the related purchase contract with separate cash must notify the purchase contract agent by presenting and surrendering the normal unit certificate evidencing the normal unit at the offices of the purchase contract agent with the form of "Notice to Settle by Separate Cash" on the reverse side of the certificate completed and executed as indicated on or prior to 5:00 p.m., New York City time, on the seventh business day immediately preceding the share purchase date. If a holder who has given notice of its intention to settle the related purchase contract with separate cash fails to deliver the cash to the collateral agent prior to 11:00 a.m., New York City time, on the business day immediately preceding

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the share purchase date, such holder will be deemed to have directed us to retain the related senior note in full satisfaction of the holder's obligation to purchase Common Shares under the related purchase contract.

Early Settlement Upon Cash Merger

Prior to the share purchase date, if Platinum Holdings is involved in a merger, acquisition or consolidation in which at least 30% of the consideration for its Common Shares consists of cash or cash equivalents ("cash merger"), then on or after the date of the cash merger each holder of the units will have the right to accelerate and settle the related purchase contract at the settlement rate in effect immediately before the cash merger. This right is referred to as the "merger early settlement right." Platinum Holdings will provide each of the holders with a notice of the completion of a cash merger within five business days thereof. The notice will specify a date, which shall be not less than 20 nor more than 30 calendar days after the date of the notice, on which the merger early settlement will occur and a date by which each holder's merger early settlement right must be exercised. The notice will set forth, among other things, the applicable settlement rate and the amount of the cash, securities and other consideration receivable by the holder upon settlement. To exercise the merger early settlement right, you must deliver to the purchase contract agent, on or before 5:00 p.m., New York City time, on the day specified in the notice, the certificate evidencing your units, if the units are held in certificated form, and payment of the applicable purchase price in the form of a certified or cashier's check. If you exercise the merger early settlement right, Platinum Holdings will deliver to you on the merger early settlement date the kind and amount of securities, cash or other property that you would have been entitled to receive if the purchase contract had been settled immediately before the cash merger at the settlement rate in effect at such time. You will also receive the senior notes or treasury securities underlying those units. If you do not elect to exercise your merger early settlement right, your units will remain outstanding and continue to be subject to normal settlement on the share purchase date.

Anti-dilution Adjustments

The formula for determining the settlement rate and the number of Common Shares to be delivered upon an early settlement will be adjusted, without duplication, if certain events occur, including:

(1): the payment of a dividend or other distributions on the Common Shares in Common Shares;
(2): the issuance to all holders of the Common Shares of rights, options or warrants, other than pursuant to any dividend reinvestment, share purchase or similar plans, entitling them to subscribe for or purchase the Common Shares at less than the current market price (as defined below);
(3): subdivisions, splits and combinations of the Common Shares;
(4): distributions to all holders of Common Shares of evidences of indebtedness, shares of capital stock, securities, cash or other assets (excluding any dividend or distribution covered by clause (1) or (2) above and any dividend or distribution paid exclusively in cash or in connection with a "spin-off" as described below);
(5): distributions (other than regular quarterly, semi-annual or annual cash dividends) consisting exclusively of cash to all holders of the Common Shares in an aggregate amount that, when combined with (a) other all-cash distributions (other than regular quarterly, semi-annual or annual cash dividends) made within the preceding 12 months and (b) the cash and the fair market value, as of the date of expiration of the tender or exchange offer referred to below, of the consideration payable in respect of any tender or exchange offer

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(other than consideration payable in respect of any odd-lot tender offer) by Platinum Holdings or one of its subsidiaries for the Common Shares concluded within the preceding 12 months, exceeds 10% of Platinum Holdings' aggregate market capitalization (such aggregate market capitalization being the product of the current market price of the Common Shares multiplied by the number of Common Shares then outstanding) on the date fixed for the determination of shareholders entitled to receive such distribution; and

(6): the successful completion of a tender or exchange offer made by Platinum Holdings or one of its subsidiaries for the Common Shares that involves an aggregate consideration that, when combined with (a) any cash and the fair market value of other consideration payable in respect of any other tender or exchange offer (other than consideration payable in respect of any odd-lot tender offer) by Platinum Holdings or one of its subsidiaries for its Common Shares concluded within the preceding 12 months and (b) the aggregate amount of any all-cash distributions (other than regular quarterly, semi-annual or annual cash dividends) to all holders of Common Shares made within the preceding 12 months, exceeds 10% of Platinum Holdings' aggregate market capitalization on the date of expiration of such tender or exchange offer.

The "current market price" per Common Share on any day means the average of the closing price per Common Share on each of the 20 consecutive trading days ending on the earlier of the day preceding the day in question and the day before the "ex date" with respect to the issuance or distribution requiring such computation. For purposes of this paragraph, the term "ex date", when used with respect to any issuance or distribution, means the first date on which the Common Shares trade without the right to receive the issuance or distribution.

In the case of reclassifications, consolidations, mergers, sales or transfers of assets or other transactions that cause the Common Shares to be converted into the right to receive other securities, cash or property, each purchase contract then outstanding would, without the consent of the holders of units, become a contract to purchase only the kind and amount of such securities, cash or property instead of Common Shares. In such event, on the share purchase date the settlement rate then in effect will be applied to the value on the share purchase date of the securities, cash or property a holder would have received if it had held the shares covered by the purchase contract when the applicable transaction occurred. Holders have the right to settle their obligations under the purchase contracts early in the event of certain cash mergers as described under "—Early Settlement Upon Cash Merger."

If at any time Platinum Holdings makes a distribution of property to its common shareholders that would be taxable to the shareholders as a dividend for U.S. federal income tax purposes (that is, distributions, evidences of indebtedness or assets, but generally not stock dividends or rights to subscribe for capital stock), and, pursuant to the settlement rate adjustment provisions of the purchase contract agreement, the settlement rate is increased, that increase may be deemed to be the receipt of taxable income to holders of units. See "U.S. Federal Income Tax Consequences—Purchase Contracts—Adjustment to Settlement Rate."

In the case of the payment of a dividend or other distribution on the Common Shares of shares of capital stock of any class or series, or similar equity interests, of or relating to a subsidiary or other business unit, which we refer to as a "spin-off", the settlement rate in effect immediately before the close of business on the record date fixed for determination of shareholders entitled to receive that distribution will be increased by multiplying:

•: the settlement rate by
•: a fraction, the numerator of which is the current market price per Common Share plus the fair market value, determined as described below, of those shares of capital stock or similar

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equity interests so distributed applicable to one Common Share and the denominator of which is the current market price per Common Share.

The adjustment to the settlement rate under the preceding paragraph will occur on the date that is the earlier of:

•: the tenth trading day following the effective date of the spin-off; and
•: the date of the securities being offered in the initial public offering of the spin-off, if that initial public offering is effected simultaneously with the spin-off.

For purposes of this section, "initial public offering" means the first time securities of the same class or type as the securities being distributed in the spin-off are offered to the public for cash.

In the event of a spin-off that is not effected simultaneously with an initial public offering of the securities being distributed in the spin-off, the fair market value of the securities to be distributed to holders of the Common Shares means the average of the closing sale prices of those securities over the first 10 trading days following the effective date of the spin-off. Also, for purposes of such a spin-off, the current market price of the Common Shares means the average of the closing sale prices of the Common Shares over the first 10 trading days following the effective date of the spin-off.

If, however, an initial public offering of the securities being distributed in the spin-off is to be effected simultaneously with the spin-off, the fair market value of the securities being distributed in the spin-off means the initial public offering price, while the current market price of the Common Shares means the closing sale price of the Common Shares on the trading day on which the initial public offering price of the securities being distributed in the spin-off is determined.

In addition, Platinum Holdings may increase the settlement rate if its board of directors deems it advisable to avoid or diminish any income tax to holders of the Common Shares resulting from any dividend or distribution of shares (or rights to acquire shares) or from any event treated as a dividend or distribution for income tax purposes or for any other reasons.

Adjustments to the settlement rate will be calculated to the nearest 1/10,000th of a share. No adjustment in the settlement rate will be required unless the adjustment would require an increase or decrease of at least one percent in the settlement rate. If an adjustment is not required to be made because it would not increase or decrease the settlement rate by at least one percent, then the adjustment will be carried forward and taken into account in any subsequent adjustment.

Platinum Holdings will be required, as soon as practicable following the occurrence of an event that requires or permits an adjustment in the settlement rate, to provide written notice to the purchase contract agent of the occurrence of that event. Platinum Holdings will also be required to deliver a statement setting forth in reasonable detail the method by which the adjustment to the settlement rate was determined and setting forth the revised settlement rate.

Each adjustment to the settlement rate will result in a corresponding adjustment to the number of Common Shares issuable upon early settlement of a purchase contract.

Pledged Securities and Pledge Agreement

The ownership interests in the senior notes or treasury securities underlying the units will be pledged to the collateral agent for Platinum Holdings' benefit. Under the pledge agreement, the pledged securities will secure the obligations of holders of units to purchase Common Shares under the related purchase contracts. A holder of a unit cannot separate or separately transfer the purchase contract from the pledged securities underlying the unit. Your rights to the pledged securities will be subject to the security interest created by the pledge agreement. You will not be

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permitted to withdraw the pledged securities related to the units from the pledge arrangement except:

•: to substitute specified treasury securities for the related pledged ownership interests in the senior notes or other pledged treasury securities in order to create a stripped unit;
•: to substitute ownership interests in the senior notes or specified treasury securities for the related pledged treasury securities upon the recreation of a normal unit;
•: upon delivering specified treasury securities when electing not to participate in a remarketing; or
•: upon the termination or early settlement of the purchase contracts.

Subject to Platinum Holdings' security interest and the terms of the purchase contract agreement and the pledge agreement:

•: each holder of normal units that include ownership interests in the senior notes will retain ownership of the interests in the senior notes and will be entitled through the purchase contract agent and the collateral agent to all of the rights of a holder of ownership interests in the senior notes, including interest payments, voting, redemption and repayment rights; and
•: each holder of units that include treasury securities will retain ownership of the treasury securities.

Platinum Holdings will have no interest in the pledged securities other than its security interest.

Quarterly Payments on Pledged Securities

The collateral agent, upon receipt of quarterly payments on the pledged securities underlying the normal units, will distribute those payments to the purchase contract agent, which will, in turn, distribute that amount to persons who were the holders of normal units on the record date for the payment. As long as the normal units remain in book-entry only form, the record date for any payment will be one business day before the relevant payment date.

Termination of Purchase Contracts

The purchase contracts, Platinum Holdings' related rights and obligations and those of the holders of the units, including their rights to receive accumulated contract adjustment payments or deferred contract adjustment payments and obligations to purchase Common Shares, will automatically terminate upon the occurrence of particular events of Platinum Holdings' bankruptcy, insolvency or reorganization.

Upon such a termination of the purchase contracts, the collateral agent will release the securities held by it to the purchase contract agent for distribution to the holders. If a holder would otherwise have been entitled to receive less than $1,000 principal amount at maturity of any treasury security upon termination of the purchase contract, the purchase contract agent will dispose of the security for cash and pay the cash to the holder. Upon termination, however, the release and distribution may be subject to a delay. If Platinum Holdings becomes the subject of a case under the federal bankruptcy code, a delay in the release of the pledged ownership interests in the senior notes or treasury securities may occur as a result of the imposition of an automatic stay under the bankruptcy code and continue until the automatic stay has been lifted. The automatic stay will not be lifted until such time as the bankruptcy judge agrees to lift it and allow your collateral to be returned to you.

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The Purchase Contract Agreement

Distributions on the units will be payable, purchase contracts will be settled and transfers of the units will be registrable at the office of the purchase contract agent in the Borough of Manhattan, The City of New York. In addition, if the units do not remain in book-entry only form, payment of distributions on the units may be made, at our option, by check mailed to the address of the persons shown on the unit register.

If any quarterly payment date or the share purchase date is not a business day, then any payment or settlement required to be made on that date will be made on the next business day (and so long as the payment is made on the next day that is a business day, without any interest or other payment on account of any such delay), except that, in the case of a payment only, if the next business day is in the next calendar year, the payment will be made on the prior business day with the same force and effect as if made on the payment date.

If your units are held in certificated form and you fail to surrender the certificate evidencing your units to the purchase contract agent on the share purchase date, the Common Shares issuable in settlement of the related purchase contracts will be registered in the name of the purchase contract agent. These shares, together with any distributions on them, will be held by the purchase contract agent as agent for your benefit, until the certificate is presented and surrendered or you provide satisfactory evidence that the certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the purchase contract agent and us.

If your units are held in certificated form and (1) the purchase contracts have terminated prior to the share purchase date, (2) the related pledged securities have been transferred to the purchase contract agent for distribution to the holders and (3) you fail to surrender the certificate evidencing your units to the purchase contract agent, the pledged securities that would otherwise be delivered to you and any related payments will be held by the purchase contract agent as agent for your benefit, until you present and surrender the certificate or provide the evidence and indemnity described above.

The purchase contract agent will not be required to invest or to pay interest on any amounts held by it before distribution.

No service charge will be made for any registration of transfer or exchange of the units, except for any applicable tax or other governmental charge.

Modification

The purchase contract agreement and the pledge agreement will contain provisions permitting Platinum Holdings and the purchase contract agent, and in the case of the pledge agreement, the collateral agent, to modify the purchase contract agreement or the pledge agreement without the consent of the holders for, among other things, the following purposes:

•: to evidence the succession of another person to Platinum Holdings' obligations;
•: to add to the covenants for the benefit of holders or to surrender any of Platinum Holdings' rights or powers under those agreements so long as such covenants or such surrender do not adversely affect the validity, perfection or priority of the security interests granted or created under the pledge agreement;
•: to evidence and provide for the acceptance of appointment of a successor purchase contract agent or a successor collateral agent, custodial agent or securities intermediary; or
•: to cure any ambiguity, to correct or supplement any provisions that may be inconsistent, or to make any other provisions with respect to such matters or questions, provided that such action shall not adversely affect the interest of the holders.

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The purchase contract agreement, the pledge agreement and the purchase contracts may be amended or modified with the consent of the holders of a majority of the units at the time outstanding. However, no modification or amendment may, without the consent of the holder of each outstanding unit affected by the modification or amendment:

•: change any payment date;
•: change the amount or type of pledged securities required to be pledged to secure obligations under the units, impair the right of the holder of any units to receive distributions on the pledged securities underlying the units or otherwise materially adversely affect the holder's rights in or to the pledged securities;
•: reduce any contract adjustment payment or change the place or currency of that payment or increase any amounts payable by holders in respect of the units or decrease any other amounts receivable by holders in respect of the units;
•: impair the right to institute suit for the enforcement of any purchase contract or the right to receive any contract adjustment payments;
•: reduce the number of Common Shares purchasable under any purchase contract, increase the price to purchase Common Shares on settlement of any purchase contract, change the share purchase date or otherwise materially adversely affect the holder's rights under any purchase contract; or
•: reduce the above stated percentage of outstanding units the consent of whose holders is required for the modification or amendment of the provisions of the purchase contract agreement, the pledge agreement or the purchase contracts.

No Consent to Assumption

Each holder of units, by acceptance of the units, will under the terms of the purchase contract agreement and the units be deemed expressly to have withheld any consent to assumption (i.e., affirmance) of the related purchase contracts by Platinum Holdings or its trustee if it becomes the subject of a case under the federal bankruptcy code.

Consolidation, Merger, Sale or Conveyance

Platinum Holdings will agree in the purchase contract agreement that it will not (1) merge with or into or consolidate with any other entity or (2) sell, assign, transfer, lease or convey all or substantially all of its properties and assets to any person or entity unless:

•: Platinum Holdings is the continuing entity or the successor entity is organized under the laws of the Bermuda or the U.S. or any state thereof or the District of Columbia;
•: the successor entity expressly assumes Platinum Holdings' obligations under the purchase contract agreement, the pledge agreement, the purchase contracts, the guarantee of the Notes and the remarketing agreement; and
•: Platinum Holdings is not, or the successor entity is not, immediately after such merger, consolidation, sale, assignment, transfer, lease or conveyance, in default in the performance of any of its obligations under the purchase contract agreement, the pledge agreement, the purchase contracts or the remarketing agreement.

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Title

Platinum Holdings, the purchase contract agent and the collateral agent and any agent of Platinum Holdings, the purchase contract agent and the collateral agent may treat the registered holder of any units as the absolute owner of those units for the purpose of making payment and settling the related purchase contracts and for all other purposes regardless of any notice to the contrary.

Defaults under the Purchase Contract Agreement

Within 30 days after the occurrence of any default by Platinum Holdings in any of its obligations under the purchase contract agreement of which a responsible officer of the purchase contract agent (as defined in the purchase contract agreement) has actual knowledge, the purchase contract agent will give notice of such default to the holders of the units unless such default has been cured or waived.

The purchase contract agent is not required to enforce any of the provisions of the purchase contract agreement against Platinum Holdings. Each holder of units shall have the right to institute suit for the enforcement of any payment of contract adjustment payments then due and payable and the right to purchase Common Shares as provided in such holder's purchase contract and generally exercise any other rights and remedies provided by law.

Governing Law

The purchase contract agreement, the pledge agreement and the purchase contracts will be governed by and construed in accordance with, the laws of the State of New York, without regard to its principles of conflicts of laws.

Global Units

Platinum Holdings will issue the units in the form of a global security registered in the name of Cede & Co., as nominee for the Depository Trust Company. For a discussion of the global securities, see "Global Clearance and Settlement."

Replacement of Units Certificates

If physical certificates are issued, Platinum Holdings will replace any mutilated certificate at your expense upon surrender of that certificate to the purchase contract agent. Platinum Holdings will replace certificates that become destroyed, lost or stolen at your expense upon delivery to Platinum Holdings and to the purchase contract agent of satisfactory evidence that the certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the purchase contract agent and Platinum Holdings.

Platinum Holdings, however, is not required to issue any certificates representing units on or after the business day immediately preceding the earlier of the share purchase date or the date the purchase contracts terminate. In place of the delivery of a replacement certificate following the share purchase date, the purchase contract agent, upon delivery of the evidence and indemnity described above, will deliver the Common Shares issuable pursuant to the purchase contracts included in the units evidenced by the certificate, or, if the purchase contracts have terminated prior to the share purchase date, transfer the pledged senior notes or the pledged securities related to the units evidenced by the certificate.

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Information Concerning the Purchase Contract Agent

JPMorgan Chase Bank will initially act as purchase contract agent. The purchase contract agent will act as the agent and attorney-in-fact for the holders of units from time to time. The purchase contract agreement will not obligate the purchase contract agent to exercise any discretionary authority in connection with a default under the terms of the purchase contract agreement, the pledge agreement, the purchase contract or the pledged securities.

The purchase contract agreement will contain provisions limiting the liability of the purchase contract agent. The purchase contract agreement will contain provisions under which the purchase contract agent may resign or be replaced. Resignation or replacement of the purchase contract agent would be effective upon the appointment of a successor.

The purchase contract agent and its affiliates are among a number of banks with which Platinum Holdings, Platinum Finance and their subsidiaries and affiliates maintain various banking and trust relationships.

Information Concerning the Collateral Agent

State Street Bank will initially act as collateral agent. The collateral agent will act solely as our agent and will not assume any obligation or relationship of agency or trust for or with any of the holders of the units except for the obligations owed by a pledgee of property to the owner thereof under the pledge agreement and applicable law.

The pledge agreement will contain provisions limiting the liability of the collateral agent. The pledge agreement will contain provisions under which the collateral agent may resign or be replaced. Resignation or replacement of the collateral agent would be effective upon the appointment of a successor.

The collateral agent and its affiliates are among a number of banks with which Platinum Holdings, Platinum Finance and their subsidiaries and affiliates maintain various banking and trust relationships.

Miscellaneous

The purchase contract agreement will provide that Platinum Holdings will pay all fees and expenses related to:

•: the enforcement by the purchase contract agent of the rights of the holders of the units; and
•: with certain exceptions, stock transfer and similar taxes attributable to the initial issuance and delivery of Common Shares upon settlement of the purchase contracts.

Should you elect to create stripped units or recreate normal units, you will be responsible for any fees or expenses payable in connection with the substitution of the applicable pledged securities, as well as any commissions, fees or other expenses incurred in acquiring the pledged securities to be substituted, and we will not be responsible for any of those fees or expenses.

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DESCRIPTION OF THE SENIOR NOTES

The Senior Notes Will Be Issued Under the Indenture

As required by U.S. federal law for all bonds and notes of companies that are publicly offered, the senior notes are governed by a document called the "indenture." The indenture is a contract among Platinum Finance, as issuer, Platinum Holdings, as guarantor, and JPMorgan Chase Bank, which acts as trustee. The trustee has two main roles. First, the trustee can enforce your rights against Platinum Finance or Platinum Holdings if either of them defaults. There are some limitations on the extent to which the trustee acts on your behalf, as described below. Second, the trustee performs administrative duties for Platinum Finance, such as sending you interest payments, transferring your senior notes to a new buyer if you sell them and sending you notices.

The indenture and its associated documents contain the full legal text of the matters described in this section. The indenture and the senior notes are governed by New York law. Platinum Finance has filed a copy of the indenture with the SEC as part of the registration statement. See "Available Information" for information on how to obtain a copy of the indenture.

Because this section is a summary, it does not describe every aspect of the senior notes and the indenture. This summary is subject to and qualified in its entirety by reference to all the provisions of the indenture, including definitions of certain terms used in the indenture. For example, in this section capitalized words are used to signify defined terms that have been given special meaning in the indenture. The meanings are described for only the more important terms. In addition, references in parentheses refer to certain sections of the indenture. Whenever reference is made to particular sections of the indenture or terms defined in the indenture, those sections or defined terms are incorporated by reference.

Platinum Finance May Issue Other Series of Debt Securities

The indenture permits Platinum Finance to issue different series of debt securities from time to time. The senior notes will be a single, distinct series of debt securities. A summary of the terms of the senior notes is provided below under "—Overview of the Senior Notes." The indenture does not limit the aggregate amount of debt securities that Platinum Finance may issue, nor does it limit the number of other series or the aggregate amount of any particular series.

The indenture and the senior notes do not limit the ability of Platinum Finance or Platinum Holdings to incur other debt or to issue other securities. Also, Platinum Finance and Platinum Holdings are not subject to financial or similar restrictions by the terms of the senior notes, except for certain "restrictive covenants" described below. When reference is made to a series of debt securities, it is intended to mean a series, such as the senior notes, issued under the Indenture. When reference is made to the senior notes or these senior notes, it is intended to mean the senior notes offered by means of this prospectus.

Overview of the Senior Notes

Interest

The title of the senior notes will be % Senior Guaranteed Notes due 2007. The senior notes will mature on , 2007. The senior notes will bear interest from the original issuance date or from the most recent interest payment date on which interest has been paid or duly provided for, as the case may be. The senior notes will initially pay interest at the annual rate of % quarterly in arrears on each , , and , commencing on , 200 . After the share purchase date, the senior notes will pay interest semi-annually in arrears on each and until maturity. If the senior notes are successfully remarketed, the amount of interest accrued with respect to any period commencing on

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or after the settlement date of the successful remarketing and ending on or prior to their maturity on , 2007 will be calculated at the reset rate described under "Description of the Equity Security Units—Remarketing." If the remarketing agent cannot establish a reset rate meeting the requirements described under "Description of the Equity Security Units—Remarketing", the remarketing agent will not reset the interest rate on the senior notes and the reset rate will continue to be the initial annual rate of %, until the remarketing agent can establish such a reset rate on a later date no later than the third business day prior to the share purchase date, and if a reset rate cannot be established by such date, the initial rate will continue to be the rate at which the senior notes accrue interest until maturity. The senior notes are not redeemable prior to their stated maturity except as described below and will not have the benefit of a sinking fund.

Platinum Holdings will irrevocably guarantee on a senior and unsecured basis the payment in full of the interest payments that are required to be paid on the senior notes and the principal amount of the senior notes, as further described under "Description of the Guarantee" below.

The amount of interest payable for any period will be computed on the basis of a 360-day year consisting of twelve 30-day months. The amount of interest payable for any period shorter than a full quarterly or semi-annual period for which interest is computed will be computed on the basis of the actual number of days elapsed in the 90-day period. In the event that any date on which interest is payable on the senior notes is not a business day, the payment of the interest payable on that date will be made on the next succeeding day that is a business day, without any interest or other payment in respect of the delay, except that, if the business day is in the next succeeding calendar year, then the payment will be made on the immediately preceding business day, in each case with the same force and effect as if made on the scheduled payment date.

Both Platinum Holdings and Platinum Finance are holding companies with no operations of their own. Platinum Finance's ability to pay its obligations under the senior notes is dependent upon its ability to obtain cash dividends or obtain loans from its subsidiaries. Similarly, Platinum Holdings' ability to pay its obligations under the guarantee is dependent upon its ability to obtain cash dividends or obtain loans from its subsidiaries. Platinum Holdings' and Platinum Finance's operating subsidiaries are separate and distinct legal entities and will have no obligation, contingent or otherwise, to pay any dividends or make any other distributions (except for payments required pursuant to the terms of intercompany indebtedness) to Platinum Holdings or Platinum Finance. Various financing arrangements, charter provisions and regulatory requirements may impose certain restrictions on the abilities of Platinum Holdings' and Platinum Finance's subsidiaries to transfer funds to Platinum Holdings and Platinum Finance in the form of cash dividends, loans or advances. See "Business—Regulation."

In addition, because Platinum Holdings and Platinum Finance are holding companies, except to the extent that Platinum Holdings or Platinum Finance have priority or equal claims against their subsidiaries as a creditor, Platinum Finance's obligations under the senior notes and Platinum Holdings' obligations under the guarantee will be effectively subordinated to the debt and other obligations of their respective subsidiaries because, as the shareholders of their subsidiaries, they will be subject to the prior claims of creditors of their subsidiaries. As of , 2002, Platinum Finance's subsidiaries had approximately $ of aggregate outstanding debt and other obligations, and, as of such date, Platinum Holdings' subsidiaries, excluding Platinum Finance's obligations under the senior notes, had approximately $ of aggregate outstanding debt and other obligations.

There are no provisions in either the indenture or the senior notes that protect the holders in the event that Platinum Finance incurs substantial additional indebtedness, whether or not in connection with a change in control. In addition, there are no provisions in the guarantee that

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protect the holders in the event that Platinum Holdings or its subsidiaries incur substantial additional indebtedness, whether or not in connection with a change in control.

Remarketing

The senior notes will be remarketed as described under "Description of the Equity Security Units—Remarketing."

Optional Remarketing

Under the purchase contract agreement, on or prior to the fourth business day immediately preceding the first day of a remarketing period but no earlier than the payment date immediately preceding , 2005, holders of senior notes that are not included as part of normal units may elect to have their senior notes included in the remarketing by delivering their senior notes along with a notice of this election to the collateral agent. The collateral agent will hold such senior notes in an account separate from the collateral account in which the securities pledged to secure the holders' obligations under the purchase contracts will be held. Holders of senior notes that are not included in normal units and that elect to have their notes remarketed will also have the right to withdraw that election on or prior to the fourth business day immediately preceding the first day of the relevant remarketing period.

Tax Event Redemption

If a tax event occurs and is continuing, Platinum Finance may, at its option, redeem the senior notes in whole, but not in part, at any time at a price, referred to as the "redemption price," equal to, for each senior note, the redemption amount referred to below plus accrued and unpaid interest, if any, to the date of redemption. Installments of interest on senior notes which are due and payable on or prior to a redemption date will be payable to holders of the senior notes registered as such at the close of business on the relevant record dates. If, following the occurrence of a tax event, Platinum Finance exercises its option to redeem the senior notes, the proceeds of the redemption will be payable in cash to the holders of the senior notes. If a tax event redemption occurs prior to a successful remarketing of the senior notes, the redemption price for the senior notes forming part of normal units at the time of the tax event redemption will be distributed to the collateral agent, who in turn will purchase the applicable treasury portfolio described below on behalf of the holders of normal units and remit the remainder of the redemption price, if any, to the purchase contract agent for payment to such holders. The treasury portfolio will be substituted for the redeemed senior notes and will be pledged to the collateral agent to secure the obligations of the holders of the normal units to purchase shares of the Common Shares under the purchase contracts.

"Tax event" means the receipt by Platinum Finance of an opinion of nationally recognized tax counsel experienced in such matters to the effect that there is more than an insubstantial risk that interest payable by Platinum Finance on the senior notes on the next interest payment date will not be deductible, in whole or in part, by Platinum Finance for U.S. federal income tax purposes as a result of (i) any amendment to, change in, or announced proposed change in, the laws, or any regulations thereunder, of the United States or any political subdivision or taxing authority thereof or therein affecting taxation (other than any such amendment, change or announced proposed change to the so-called "earnings stripping" provisions of Section 163(j) of the Internal Revenue Code, which limit the ability of U.S. corporations to deduct interest on certain debt owed to or guaranteed by related foreign persons), (ii) any amendment to or change in an official interpretation or application of any such laws or regulations by any legislative body, court, governmental agency or regulatory authority or (iii) any official interpretation, pronouncement or application that provides for a position with respect to any such laws or regulations that differs from the generally accepted

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position on the date of this prospectus, which amendment, change or proposed change is effective or which interpretation or pronouncement is announced on or after the date of this prospectus.

If a tax event redemption occurs prior to a successful remarketing of the senior notes, the treasury portfolio to be purchased on behalf of the holders of the normal units will consist of a portfolio of zero-coupon U.S. treasury securities consisting of interest or principal strips of U.S. treasury securities that mature on or prior to the share purchase date in an aggregate amount equal to the aggregate principal amount of the senior notes included in the normal units on the tax event redemption date and with respect to each scheduled interest payment date on the senior notes that occurs after the tax event redemption date and on or before , 2005, interest or principal strips of U.S. treasury securities that mature on or prior to that interest payment date in an aggregate amount equal to the aggregate interest payment that would be due on the aggregate principal amount of the senior notes included in the normal units on that date if the interest rate of the senior notes were not reset, effective from the settlement date of a successful remarketing. These treasury securities are non-callable by Platinum Finance.

Solely for purposes of determining the treasury portfolio purchase price in the case of a tax event redemption date occurring after either a successful remarketing of the senior notes or the share purchase date, "treasury portfolio" shall mean a portfolio of zero-coupon U.S. treasury securities consisting of principal or interest strips of U.S. treasury securities that mature on or prior to , 2007 in an aggregate amount equal to the aggregate principal amount of the senior notes outstanding on the tax event redemption date and with respect to each scheduled interest payment date on the senior notes that occurs after the tax event redemption date, interest or principal strips of U.S. treasury securities that mature on or prior to that interest payment date in an aggregate amount equal to the aggregate interest payment that would be due on the aggregate principal amount of the senior notes outstanding on the tax event redemption date.

"Redemption amount" means for each senior note the product of the principal amount of the senior note and a fraction the numerator of which is the treasury portfolio purchase price and the denominator of which is, in the case of a tax event redemption occurring prior to a successful remarketing of the senior notes, the aggregate principal amount of senior notes included in normal units, and in the case of a tax event redemption date occurring after a successful remarketing of the senior notes, the aggregate principal amount of the senior notes. Depending on the amount of the treasury portfolio purchase price, the redemption amount could be less than or greater than the principal amount of the senior notes.

"Treasury portfolio purchase price" means the lowest aggregate price quoted by a primary U.S. government securities dealer in New York City to the quotation agent on the third business day immediately preceding the tax event redemption date for the purchase of the treasury portfolio for settlement on the tax event redemption date.

"Quotation agent" means each of Goldman, Sachs & Co. or its successor or any other primary U.S. government securities dealer in New York City selected by Platinum Finance.

Notice of any redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each registered holder of senior notes to be redeemed at its registered address. Unless Platinum Finance defaults in payment of the redemption price, on and after the redemption date, interest shall cease to accrue on the senior notes. In the event any senior notes are called for redemption, neither Platinum Finance nor the trustee will be required to register the transfer of or exchange the senior notes to be redeemed during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption and ending at the close of business on the day of such mailing.

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Form and Denomination

Platinum Finance will issue the senior notes that are released from the pledge following the substitution or early settlement in the form of a global security registered in the name of Cede & Co., as nominee of DTC. For a discussion of global securities, see "Global Clearance and Settlement."

Exchange and Transfer of Definitive Notes. If Platinum Finance issues definitive senior notes, you may have your senior notes broken into more senior notes of the same series of smaller authorized denominations or combined into fewer senior notes of the same series of larger authorized denominations, as long as the total principal amount is not changed. (Section 305) This is called an "exchange."

You may exchange or transfer definitive senior notes at the office of the trustee. The trustee acts as Platinum Finance's agent for registering senior notes in the names of Holders and transferring senior notes. Platinum Finance may change this appointment to another entity or itself. The entity performing the role of maintaining the list of registered Holders is called the "Security Registrar." (Section 305)

You will not be required to pay a service charge to transfer or exchange definitive senior notes, but you may be required to pay for any tax or other governmental charge associated with the exchange or transfer. The transfer or exchange will only be made if the Security Registrar is satisfied with your proof of ownership.

Platinum Finance may cancel the designation of any particular transfer agent. Platinum Finance may also approve a change in the office through which any transfer agent acts. (Section 1002)

Payments

Platinum Finance will pay interest to you if you are a direct Holder listed in the trustee's records at the close of business on a particular day in advance of each Interest Payment Date, even if you no longer own the senior note on the Interest Payment Date. That particular day is called the "Regular Record Date." (Section 307) The Regular Record Date relating to an Interest Payment Date for any senior note will be the business day next preceding an Interest Payment Date. Holders buying and selling senior notes must work out between them how to compensate for the fact that Platinum Finance will pay all the interest for an interest period to the one who is the registered Holder on the Regular Record Date. The most common manner is to adjust the sales price of the senior notes to prorate interest fairly between buyer and seller. This prorated interest amount is called "accrued interest."

Platinum Finance will pay interest, principal, any premium and any other money due on the senior notes at the corporate trust office of the trustee in New York City. That office is currently located at , New York, New York. You must make arrangements to have your payments picked up at or wired from that office. Platinum Finance may also choose to pay interest by mailing checks.

Platinum Finance may also arrange for additional payment offices, and may cancel or change these offices, including use of the trustee's corporate trust office. These offices are called "Paying Agents." Platinum Finance may also choose to act as its own Paying Agent. Platinum Finance must notify you of changes in the Paying Agents for the senior notes. (Section 1002)

Notices

Platinum Finance and the trustee will send notices regarding the senior notes only to direct Holders, using their addresses as listed in the trustee's records. (Sections 101 and 106)

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Regardless of who acts as Paying Agent, all money paid by Platinum Finance to a Paying Agent that remains unclaimed at the end of one year after the amount is due to direct Holders will be repaid to Platinum Finance. After that one-year period, you may look only to Platinum Finance or Platinum Holdings for payment and not to the trustee, any other Paying Agent or anyone else. (Section 1003)

Overview of Remainder of This Description

In the remainder of this description "you" or "your" refer to direct Holders and not "street name" or other indirect holders of senior notes. As an indirect holder of an interest in the Global Note, you should read the subsection above entitled "Form and Denomination."

The remainder of this description summarizes:

•: your rights under several special situations, such as if Platinum Finance or Platinum Holdings merges with another company or if Platinum Finance wants to change a term of the senior notes;
•: promises each of Platinum Finance and Platinum Holdings makes to you about how each will run its business, or certain business actions that Platinum Finance and Platinum Holdings promise not to take (known as "restrictive covenants"); and
•: your rights if Platinum Finance defaults or experiences other financial difficulties.

Special Situations

Mergers and Similar Events

Platinum Finance and Platinum Holdings are generally permitted to consolidate with or merge into any other person. In this section, "person" refers to any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision of a government or governmental agency. Each of Platinum Finance and Platinum Holdings is also permitted to sell substantially all of its assets to any other person, or to buy substantially all of the assets of any other person. However, Platinum Finance or Platinum Holdings may not take any of these actions unless all the following conditions are met:

•: Where Platinum Finance or Platinum Holdings merges out of existence or sells all or substantially all of its assets, the other person must be organized under the laws of a State or the District of Columbia or under Federal law, or in the case of Platinum Holdings, Bermuda, and it must agree to be legally responsible for the senior notes in the case of Platinum Finance, or in the case of Platinum Holdings, the guarantee. Upon assumption of Platinum Finance's or Platinum Holdings' obligations by such a person in such circumstances, Platinum Finance and Platinum Holdings, as the case may be, shall be relieved of all obligations and covenants under the indenture and the senior notes and the guarantee, as the case may be.
•: The merger, sale of all or substantially all of Platinum Finance's or Platinum Holdings' assets or other transaction must not cause a default on the senior notes, and Platinum Finance and Platinum Holdings, as the case may be, must not already be in default unless the merger or other transaction would cure the default. For purposes of this no-default test, a default would include an Event of Default that has occurred and not been cured, as described below under "—What is an Event of Default?" A default for this purpose would also include any event that would be an Event of Default if Platinum Finance or Platinum Holdings received the required

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notice of its default or if under the indenture the default would become an event of default after existing for a specified period of time.

•: It is possible that the merger, sale of all or substantially all of Platinum Finance's or Platinum Holdings' assets or other transaction would cause some of its property to become subject to a mortgage or other legal mechanism giving lenders preferential rights in that property over other lenders or over its general creditors if Platinum Finance or Platinum Holdings, as the case may be, fails to pay them back. If a merger or other transaction would create any Liens on its property, Platinum Finance or Platinum Holdings, as the case may be, shall if such Liens were not permitted grant an equivalent or higher-ranking Lien on the same property to you and the other direct Holders of the Securities. (Section 801)

Modification and Waiver

There are three types of changes Platinum Finance can make to the indenture and the senior notes.

Changes Requiring Your Approval. First, there are changes that cannot be made to the indenture without your specific approval. Following is a list of those types of changes:

•: change the Stated Maturity of the principal or interest on a senior note;
•: reduce any amounts due on a senior note;
•: reduce the amount of principal payable upon acceleration of the Maturity of a senior note following an Event of Default;
•: change the place or currency of payment for a senior note;
•: impair your right to sue for payment;
•: reduce the percentage in principal amount of the senior notes, the approval of the Holders of which is needed to modify or amend the indenture or the rights of holders of the senior notes;
•: reduce the percentage in principal amount of the senior notes, the approval of the Holders of which is needed to waive compliance with certain provisions of the indenture or to waive certain defaults;
•: modify any other aspect of the provisions dealing with modification and waiver of the indenture, except to increase the percentage required for any modification or to provide that other provisions of the indenture may not be modified or waived without your consent; and
•: change in any manner adverse to the interests of the Holders the obligations of Platinum Holdings in respect of the due and punctual payment of principal and interest on the senior notes. (Section 902)

Changes Not Requiring Approval. The second type of change does not require any vote by Holders of the senior notes. This type is limited to corrections and clarifications and certain other changes that would not adversely affect Holders of the senior notes. Similarly, Platinum Finance does not need any approval to make changes that affect only debt securities to be issued under the indenture after the changes take effect. Platinum Finance may also make changes or obtain waivers that do not adversely affect a particular senior note, even if they affect other senior notes or other debt securities issued under the indenture. In those cases, Platinum Finance needs only to obtain any required approvals from the Holders of the affected senior notes or other debt securities.

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Changes Requiring a Majority Vote. Any other change to the indenture and the senior notes would require the following approval:

•: If the change affects only the senior notes, it must be approved by the Holders of a majority in principal amount of the senior notes.
•: If the change affects the senior notes as well as one or more other series of debt securities issued under the indenture, it must be approved by the Holders of a majority in principal amount of each series affected by the change. In each case, the required approval must be given by written consent. Most changes fall into this category.

The same vote would be required for Platinum Finance to obtain a waiver of a past default. However, Platinum Finance cannot obtain a waiver of a payment default or any other aspect of the indenture or the senior notes listed in the first category described previously under "—Changes Requiring Your Approval" unless Platinum Finance obtains your individual consent to the waiver. (Section 513)

Further Details Concerning Voting. Senior notes will not be considered outstanding, and therefore not eligible to vote, if Platinum Finance or Platinum Holdings has deposited with the trustee or any paying agent other than Platinum Finance or Platinum Holdings or set aside in trust for you money for their payment or redemption. (Section 101)

Platinum Finance will generally be entitled to set any day as a record date for the purpose of determining the Holders of outstanding senior notes that are entitled to vote or take other action under the indenture. In certain limited circumstances, the trustee will be entitled to set a record date for action by Holders. If Platinum Finance or the trustee sets a record date for a vote or other action to be taken by Holders of senior notes, that vote or action may be taken only by persons who are Holders of outstanding senior notes on the record date and must be taken within 180 days following the record date or another period that Platinum Finance may specify (or as the trustee may specify, if it set the record date). Platinum Finance may shorten or lengthen (but not beyond 180 days) this period from time to time. (Section 104)

"Street name" and other indirect holders should consult their banks or brokers for information on how approval may be granted or denied if Platinum Finance seeks to change the indenture or the senior notes or request a waiver.

Limitations on Liens

Platinum Finance covenants that, so long as any of the senior notes remain outstanding, it will not create or assume any Indebtedness for money borrowed which is secured by a Lien upon the voting stock of Platinum US or any future significant subsidiary, without equally and ratably securing the senior notes (and, if Platinum Finance elects, any other of its Indebtedness that is not subordinate to the senior notes and with respect to which the governing instruments regulate, or pursuant to which Platinum Finance is otherwise obligated, to provide such security) by a Lien ranking ratably with and equally to (or prior to) such secured Indebtedness for so long as such Indebtedness is so secured. The foregoing does not apply to any Lien upon the voting stock of any significant subsidiary in place prior to the acquisition of the subsidiary by Platinum Finance.

Default and Related Matters

Ranking

The senior notes are not secured by any property or assets of Platinum Finance. Accordingly, your ownership of senior notes means you are one of Platinum Finance's unsecured creditors. The senior notes are not subordinated to any of Platinum Finance's other debt obligations and therefore

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they rank equally with all of Platinum Finance's other unsecured and unsubordinated indebtedness. The guarantee will be unsecured and rank equally in right of payment to all other senior unsecured debt of Platinum Holdings.

Events of Default

You will have special rights if an Event of Default occurs and is not cured, as described later in this subsection.

What is an Event of Default? The term "Event of Default" means any of the following:

•: Principal or any premium on a senior note is not paid on its due date.
•: Interest on a senior note is not paid within 30 days of its due date.
•: Platinum Finance or Platinum Holdings remains in breach of a restrictive covenant or any other term of the indenture for 90 days after Platinum Finance or Platinum Holdings, as the case may be, receives a notice of default stating Platinum Finance or Platinum Holdings, as the case may be, is in breach. The notice must be sent by either the trustee or Holders of at least 25% of the principal amount of the senior notes.
•: The guarantee ceases to be in full force and effect.
•: a default by Platinum Finance or Platinum Holdings under any debt for money borrowed having an aggregate principal amount outstanding of at least $25 million, or a default by Platinum Finance or Platinum Holdings under any mortgage, indenture or instrument under which there may be issued or may be secured or evidenced any debt for money borrowed of Platinum Finance or Platinum Holdings having an aggregate principal amount outstanding of at least $25 million, whether such debt exists now or is created later, which default (A) results because Platinum Finance or Platinum Holdings did not pay any part of the principal of such debt when the principal was due after any applicable grace period expires or (B) causes the debt to become due and payable before the date on which it would otherwise have become due, without, in the case of clause (A), such debt being discharged or without, in the case of clause (B), such debt being discharged or such acceleration having been rescinded or annulled, both within 10 days after the trustee or the holders of at least 25% in principal amount of the senior notes give Platinum Finance or Platinum Holdings notice of the default and require that Platinum Finance or Platinum Holdings remedy the breach.
•: Platinum Finance or Platinum Holdings files for bankruptcy or certain other events in bankruptcy, insolvency or reorganization occur.

Remedies If an Event of Default Occurs. If an Event of Default has occurred and has not been cured, the trustee or the Holders of at least 25% in principal amount of the senior notes may declare the entire principal amount of all the senior notes due and immediately payable. This is called a declaration of acceleration of Maturity. If an Event of Default occurs because of certain events in bankruptcy, insolvency or reorganization, the principal amount of all the senior notes will be automatically accelerated, without any action by the trustee or any Holder. A declaration of acceleration of Maturity may be cancelled by the Holders of at least a majority in principal amount of the senior notes. (Section 502)

Except in cases of default, where the trustee has some special duties, the trustee is not required to take any action under the indenture at the request of any Holders unless the Holders offer the trustee reasonable protection from expenses and liability (called an "indemnity"). (Section 603) If reasonable indemnity is provided, the Holders of a majority in principal amount of the senior notes outstanding may direct the time, method and place of conducting any lawsuit or

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other formal legal action seeking any remedy available to the trustee. These majority Holders may also direct the trustee in performing any other action under the indenture. (Section 512)

Before you bypass the trustee and bring your own lawsuit or other formal legal action or take other steps to enforce your rights or protect your interests relating to the senior notes, the following must occur:

•: You must give the trustee written notice that an Event of Default has occurred and remains uncured.
•: The Holders of at least 25% in principal amount of all outstanding senior notes must make a written request that the trustee take action because of the Event of Default, and must offer reasonable indemnity to the trustee against the cost and other liabilities of taking that action.
•: The trustee must have not taken action for 90 days after receipt of the above notice and offer of indemnity.
•: No direction inconsistent with this written request has been given to the trustee during the same 90-day period by the Holders of a majority in principal amount of outstanding senior notes. (Section 507)

However, you are entitled at any time to bring a lawsuit for the payment of money due on your senior note on or after the due date of that payment. (Section 508)

"Street name" and other indirect holders should consult their banks or brokers for information on how to give notice or direction to or make a request of the trustee and to make or cancel a declaration of acceleration.

Each of Platinum Finance and Platinum Holdings will furnish to the trustee every year a written statement of two of its officers certifying that to their knowledge it is in compliance with the indenture and the senior notes, or else specifying any default. (Section 1006)

Regarding the Trustee

JPMorgan Chase Bank is the trustee under the indenture. The trustee shall be subject to all the duties and responsibilities specified with respect to an indenture trustee under the Trust Indenture Act. The trustee and its affiliates have performed services for Platinum Finance and Platinum Holdings and their affiliates in the ordinary course of business.

Guarantee

Under the guarantee, Platinum Holdings will irrevocably and unconditionally guarantee, on a senior and unsecured basis, the payment in full of the following:

•: interest payments that are required to be paid on the senior notes; and
•: the principal amount of the senior notes.

The guarantee will be unsecured and rank equally in right of payment to all other senior unsecured debt of Platinum Holdings. In addition, Platinum Holdings is a holding company and its assets will consist primarily of the capital stock of its subsidiaries. Accordingly, Platinum Holdings will depend on dividends and other distributions from its subsidiaries in order to make payments on the guarantee. Platinum Holdings' guarantee is effectively junior to the debt and other liabilities of its subsidiaries.

The senior notes and the guarantee do not limit Platinum Holdings' or Platinum Finance's ability or the ability of their subsidiaries to incur indebtedness. This would include indebtedness that ranks equally with the senior notes and the guarantee.

The guarantee will be governed by, and construed in accordance with, the laws of the State of New York.

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GLOBAL CLEARANCE AND SETTLEMENT

Platinum Holdings will issue the units and Platinum Finance will issue the senior notes that are released from the pledge following the substitution of the applicable treasury securities or early settlement, in the form of a global security, or Global Security, registered in the name of Cede & Co., as nominee of DTC. We refer to the global security representing the units as the Global Unit and to the global security representing the senior notes as the Global Note. Each global security will be issued only in fully registered form and the Global Note will be issued without interest coupons.

You may hold your beneficial interests in a Global Security directly through DTC if you have an account at DTC, or indirectly through organizations that have accounts at DTC.

What is a Global Security? A global security is a special type of indirectly held security in the form of a certificate held by a depositary for the investors in a particular issue of securities. Since Platinum Holdings and Platinum Finance choose to issue the units and the senior notes in the form of a global security, the ultimate beneficial owners can only be indirect holders. This is done by requiring that the Global Units and the Global Notes be registered in the name of a financial institution selected by Platinum Holdings or Platinum Finance, as appropriate, and by requiring that the units included in the Global Units and the senior notes included in the Global Note not be transferred to the name of any other direct holder unless the special circumstances described below occur.

The financial institution that acts as the sole direct holder of a Global Security is called the "Depositary." Any person wishing to own a unit or a senior note must do so indirectly by virtue of an account with a broker, bank or other financial institution that in turn has an account with the Depositary. In the case of the units and the senior notes, DTC will act as depositary and Cede & Co. will act as its nominee.

Except under the limited circumstances described below or upon the creation of normal units, a Global Security may be transferred, in whole and not in part, only to DTC, to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in a Global Security will be represented, and transfers of such beneficial interests will be made, through accounts of financial institutions acting on behalf of beneficial owners either directly as account holders, or indirectly through account holders, at DTC.

Beneficial interests in the Global Unit will be in multiples of $25 and beneficial interests in the Global Note will be in multiples of $1,000.

Special Investor Considerations for Global Securities. As an indirect holder, an investor's rights relating to the Global Security will be governed by the account rules of the investor's financial institution and of the Depositary, DTC, as well as general laws relating to securities transfers. Platinum Holding and Platinum Finance will not recognize this type of investor as a holder of units or senior notes and instead will deal only with DTC, the Depositary that holds the Global Securities.

An investor in units or separate senior notes should be aware that because these securities will be issued only in the form of global securities:

•: The investor cannot get units or senior notes registered in his or her own name.
•: The investor cannot receive physical certificates for his or her interest in the units or senior notes.
•: The investor will be a "street name" holder and must look to his or her own bank or broker for payments on the senior notes and protection of his or her legal rights relating to the units or senior notes.

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•: The investor may not be able to sell interests in the units or senior notes to some insurance companies and other institutions that are required by law to own their securities in the form of physical certificates.
•: DTC's policies will govern payments, transfers, exchanges and other matters relating to the investor's interest in the Global Securities. Platinum Finance and the trustee have no responsibility for any aspect of DTC's actions or for its records of ownership interests in the Global Note. Likewise, Platinum Holdings and the purchase contract agent have no responsibility for any aspect of DTC's actions or for its records of ownership interests in the Global Unit. None of Platinum Finance, Platinum Holdings, the trustee or the purchase contract agent supervises DTC in any way.

Description of DTC. DTC has informed Platinum Holdings and Platinum Finance that:

DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act.

DTC was created to hold securities for financial institutions that have accounts with it, and to facilitate the clearance and settlement of securities transactions between the account holders through electronic book-entry changes in their accounts, thereby eliminating the need for physical movement of certificates. DTC account holders include securities brokers and dealers, banks, trust companies and clearing corporations. Indirect access to the DTC system is also available to banks, brokers, dealers and trust companies that clear through, or maintain a custodial relationship with, a DTC account holder, either directly or indirectly.

DTC's rules are on file with the SEC.

DTC's records reflect only the identity of its participants to whose accounts beneficial interests in the Global Securities are credited. These participants may or may not be the owners of the beneficial interests so recorded. The participants will be responsible for keeping account of their holdings on behalf of their beneficial owners.

Definitive Securities

In a few special situations described in the next paragraph, a Global Security will terminate and interests in it will be exchanged for physical certificates representing senior notes or units, as the case may be. After that exchange, the choice of whether to hold the senior notes or units directly or in "street name" (in computerized book-entry form) will be up to the investor. Investors must consult their own bank or broker to find out how to have their interests in units or senior notes transferred to their own name, so that they will be direct holders.

The special situations for termination of the Global Securities are:

•: When DTC notifies Platinum Finance or Platinum Holdings, as the case may be, that it is unwilling, unable or no longer qualified to continue as Depositary.
•: Platinum Holdings elects to terminate its arrangement with the Depositary with respect to the units.
•: In the case of the Global Note, when an event has occurred that constitutes, or with the giving of notice or passage of time would constitute, an Event of Default and has not been cured. See "Description of the Senior Notes—Default and Related Matters—Events of Default."

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•: In the case of a Global Unit, whenever continuing default by Platinum Holdings in respect of its obligations under one or more purchase contracts has occurred.

Platinum Finance would issue definitive Notes:

•: only in fully registered form;
•: without interest coupons; and
•: in denominations of $1,000 and even multiples of $1,000 except that a senior note held as part of a normal unit represents an ownership interest of 1/40th, or 2.5%, of a senior note in aggregate principal amount of $1,000 and will therefore correspond to the stated amount of $25 per normal unit.

Platinum Holdings would issue definitive Units:

•: only in fully registered form; and
•: in denominations of $25 and even multiples of $25.

When a Global Security terminates, DTC (and not Platinum Finance, Platinum Holdings, the purchase contract agent or the trustee) is responsible for deciding the names of the institutions that will be the initial direct holders.

Exercise of Legal Rights under the Units and the Senior Notes

Platinum Holdings' and Platinum Finance's obligations, as well as the obligations of the purchase contract agent and the trustee and those of any third parties employed by Platinum Finance, Platinum Holdings, the purchase contract agent or the trustee, run only to persons who are registered as holders of units or senior notes, as the case may be. Platinum Finance and Platinum Holdings do not have obligations to you so long as the units or senior notes you hold are issued in the form of Global Securities, or if definitive securities are issued, if you hold in "street name" or by other indirect means. For example, once Platinum Holdings or Platinum Finance makes payment to the registered holder, it has no further responsibility for the payment even if that holder is legally required to pass the payment along to you as a "street name" customer but does not do so.

So long as you hold units or senior notes as a beneficial interest in a global security or if Platinum Holdings or Platinum Finance issues definitive securities and you hold them in "street name", you should check with the institution through which you hold your beneficial interest to find out, among other things:

•: how it handles securities payments and notices;
•: whether it imposes fees or charges;
•: how it would handle voting if ever required;
•: whether and how you can instruct it to send you securities registered in your own name so you can be a direct holder as described below; and
•: how it would pursue rights under the senior notes or units if there were a default or other event triggering the need for holders to act to protect their interests.

Payment and Paying Agents

The trustee will make payments of principal of, and interest and any premium on, each Global Note to Cede & Co., the nominee for DTC, as the registered owner. The purchase contract agent will make contract adjustment payments on each Global Unit to Cede & Co., the nominee for DTC,

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as the registered owner. The principal of, and interest and any premium on, the Global Note and the contract adjustment payments on the Global Unit will be payable in immediately available funds in U.S. dollars.

We understand that it is DTC's current practice, upon DTC's receipt of any payment of principal of, or interest or any premium on, global securities such as the Global Unit and the Global Note, to credit the accounts of DTC account holders with payment in amounts proportionate to their respective beneficial interests in the stated amount of the Global Unit or principal amount of the Global Note as shown on the records of DTC. Payments by DTC participants to owners of beneficial interests in the Global Unit or Global Note held through these participants will be the responsibility of the participants, as is now the case with securities held for the accounts of customers registered in "street name."

Neither Platinum Finance, Platinum Holdings, the purchase contract agent nor the trustee will have any responsibility or liability for any aspect of DTC's or its participants' records relating to, or payments made on account of, beneficial ownership interests in the Global Units or Global Note or for maintaining, supervising or reviewing any records relating to these beneficial ownership interests.

"Street name" holders and other owners of beneficial interests in a Global Note should consult their banks or brokers for information on how they will receive payments.

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DESCRIPTION OF PLATINUM HOLDINGS' COMMON SHARES

The following description of the share capital of Platinum Holdings summarizes certain provisions of Platinum Holdings' bye-laws. A copy of Platinum Holdings' bye-laws is incorporated by reference into the Registration Statement of which this prospectus is a part. All references in this description to "we", "us", "our" and the "Company" refer to Platinum Holdings unless the context otherwise requires.

General

At the completion of the Equity Public Offering, the ESU Offering and the St. Paul Investment, our authorized share capital will consist of: (i) 200,000,000 Common Shares, par value $0.01 per share, of which Common Shares will be outstanding (assuming the underwriters' option to purchase additional Common Shares is not exercised) and (ii) 25,000,000 preferred shares, par value $0.01 per share, none of which will be outstanding.

Common Shares

Holders of Common Shares have no pre-emptive, redemption, conversion or sinking fund rights, provided, however, that pursuant to the Formation and Separation Agreement, Platinum Holdings has granted St. Paul the pre-emptive rights specified therein. See "Certain Relationships and Related Transactions—Formation and Separation Agreement." Subject to the limitation on voting rights described below, holders of Common Shares are entitled to one vote per share on all matters submitted to a vote of holders of Common Shares. Most matters to be approved by holders of Common Shares require approval by a simple majority vote. The holders of at least 75% of the Common Shares voting in person or by proxy at a meeting must generally approve an amalgamation with another company. In addition, a resolution to remove our auditor before the expiration of its term of office must be approved by at least two-thirds of the votes cast at a meeting of the shareholders of the Company. The quorum for any meeting of our shareholders is two or more persons holding or representing a majority of the outstanding Common Shares on an unadjusted basis. Our Board of Directors has the power to approve our discontinuation from Bermuda to another jurisdiction. The rights attached to any class of shares, common or preferred, may be varied with the consent in writing of the holders of at least 75% of the issued shares of that class or with the sanction of a resolution passed by a majority of the votes cast at a separate general meeting of the holders of the shares of the class in accordance with the Bermuda Companies Act.

In the event of a liquidation, dissolution or winding-up of the Company, the holders of Common Shares are entitled to share equally and ratably in the assets of the Company, if any, remaining after the payment of all debts and liabilities of the Company and the liquidation preference of any outstanding preferred shares. All outstanding Common Shares are fully paid and nonassessable. Authorized but unissued shares may, subject to any rights attaching to existing shares, be issued at any time and at the discretion of the Board of Directors without the approval of the shareholders of the Company with such rights, preferences and limitations as the Board may determine.

Limitation on Voting Rights

Each Common Share has one vote on a poll of the shareholders, except that, if and for as long as the number of issued Controlled Shares (as defined below) of any person would constitute 10% or more of the combined voting power of the issued Common Shares of the Company (after giving effect to any prior reduction in voting power as described below), each issued Controlled Share,

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regardless of the identity of the registered holder thereof, will confer a fraction of a vote as determined by the following formula:

(T - - C) ÷ (9.1 × C)

Where:		(1)		"T" is the aggregate number of votes conferred by all the issued Common Shares immediately prior to that application of the Formula with respect to such issued Controlled Shares adjusted to take into account any prior reduction taken with respect to any issued Controlled Shares pursuant to the "sequencing provision" described below; and
		(2)		"C" is the number of issued Controlled Shares attributable to that person. "Controlled Shares" of any person refers to all Common Shares owned by that person, whether (i) directly, (ii) with respect to persons who are U.S. persons, by application of the attribution and constructive ownership rules of Sections 958(a) and 958(b) of the Code or (iii) beneficially, directly or indirectly, within the meaning of Section 13(d)(3) of the Exchange Act, and the rules and regulations thereunder.

The formula will be applied successively as many times as may be necessary to ensure that no person will be a 10% Shareholder (as defined below) at any time (the "sequencing provision"). For the purposes of determining the votes exercisable by shareholders as of any date, the formula will be applied to the Common Shares of each shareholder in declining order based on the respective numbers of total Controlled Shares attributable to each shareholder. Thus, the formula will be applied first to the votes of Common Shares held by the shareholder to whom the largest number of total Controlled Shares is attributable and thereafter sequentially with respect to the shareholder with the next largest number of total Controlled Shares. In each case, calculations are made on the basis of the aggregate number of votes conferred by the issued Common Shares as of such date, as reduced by the application of the formula to any issued Common Shares of any shareholder with a larger number of total Controlled Shares as of such date. "10% Shareholder" means a person who owns, in the aggregate, (i) directly, (ii) with respect to persons who are U.S. persons, by application of the attribution and constructive ownership rules of Sections 958(a) and 958(b) of the Code or (iii) beneficially, directly or indirectly, within the meaning of Section 13(d)(3) of the Exchange Act, issued Common Shares of the Company carrying 10% or more of the total combined voting rights attaching to all issued Common Shares.

Because of the voting limitation described in the preceding paragraph, the Common Shares owned by St. Paul will have reduced voting rights. Should St. Paul dispose of some or all of the Common Shares it owns, the reduced voting rights with respect to the Common Shares disposed of by St. Paul will be eliminated (except if the disposition is to any other person who holds, or who as a result of such transaction would hold, 10% or more of our total voting rights), and those Common Shares thereafter will be entitled to full voting rights, subject to future dilution to avoid creating a 10% shareholder. Therefore, the voting power of the Common Shares held by all of our shareholders other than St. Paul will be diluted upon any such disposition by St. Paul. Although St. Paul has informed us that it currently intends to continue its share ownership in Platinum Holdings for the foreseeable future, there can be no assurance in this regard.

Our directors are empowered to require any shareholder to provide information as to that shareholder's beneficial ownership of Common Shares, the names of persons having beneficial ownership of the shareholder's Common Shares, relationships, associations or affiliations with other shareholders or any other facts the directors may deem relevant to a determination of the number of Controlled Shares attributable to any person. Our directors may disregard the votes attached to the Common Shares of any holder failing to respond to such a request or submitting incomplete or untrue information.

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Our directors retain certain discretion to make such final adjustments to the aggregate number of votes attaching to the Common Shares of any shareholder that they consider fair and reasonable in all the circumstances to ensure that no person will be a 10% Shareholder at any time.

Restrictions on Transfer

Our bye-laws contain several provisions restricting the transferability of Common Shares. The directors are required to decline to register a transfer of Common Shares if they have reason to believe that the result of such transfer would be (i) that any person other than a St. Paul Person would become or continue to be a 10% Shareholder or (ii) that a St. Paul Person would become or continue to be a United States 25% Shareholder, in each case without giving effect to the limitation on voting rights described above. Similar restrictions apply to the Company's ability to issue or repurchase Common Shares. "St. Paul Person" means any of St. Paul and its affiliates following the completion of the Equity Public Offering and "United States 25% Shareholder" means a U.S. person who owns, directly or by application of the constructive ownership rules of Sections 958(a) and 958(b) of the Code, 25% or more of either (i) the total combined voting rights attaching to the issued Common Shares and the issued shares of any other class of the Company or (ii) the total combined value of the issued Common Shares and any other issued shares of the Company, determined pursuant to Section 957 of the Code.

Our directors also may, in their absolute discretion, decline to register the transfer of any Common Shares if they have reason to believe (i) that the transfer may expose us, any of our subsidiaries, any shareholder or any person ceding insurance to any of our subsidiaries to adverse tax or regulatory treatment in any jurisdiction or (ii) that registration of the transfer under the 1933 Act or under any U.S. state securities laws or under the laws of any other jurisdiction is required and such registration has not been duly effected. In addition, our directors may decline to approve or register a transfer of shares unless all applicable consents, authorizations, permissions or approvals of any governmental body or agency in Bermuda, the United States or any other applicable jurisdiction required to be obtained prior to such transfer shall have been obtained.

We are authorized to request information from any holder or prospective acquiror of Common Shares as necessary to give effect to the transfer, issuance and repurchase restrictions described above, and may decline to effect any transaction if complete and accurate information is not received as requested.

Conyers, Dill & Pearman, our Bermuda counsel, has advised us that while the precise form of the restrictions on transfer contained in our bye-laws is untested, as a matter of general principle, restrictions on transfers are enforceable under Bermuda law and are not uncommon. A proposed transferee will be permitted to dispose of any Common Shares purchased that violate the restrictions and as to the transfer of which registration is refused. The proposed transferor of those Common Shares will be deemed to own those Common Shares for dividend, voting and reporting purposes until a transfer of such Common Shares has been registered on the register of shareholders of the Company.

If the directors refuse to register a transfer for any reason, they must notify the proposed transferor and transferee within 30 days of such refusal. Our bye-laws also provide that our Board of Directors may suspend the registration of transfers for any reason and for such periods as it may determine, provided that it may not suspend the registration of transfers for more than 45 days in any period of 365 consecutive days.

Our directors may designate our Chief Executive Officer to exercise their authority to decline to register transfers or to limit voting rights as described above, or to take any other action, for as long as the Chief Executive Officer is also a director.

The voting restrictions and restrictions on transfer described above may have the effect of delaying, deferring or preventing a change in control of us.

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Preferred Shares

Pursuant to our bye-laws and Bermuda law, our Board of Directors by resolution may establish one or more series of preferred shares having a number of shares, designations, relative voting rights, dividend rates, liquidation and other rights, preferences, limitations and powers as may be fixed by the Board of Directors without any further shareholder approval which, if any preferred shares are issued, will include restrictions on voting and transfer intended to avoid having us constitute a "controlled foreign corporation" for U.S. federal income tax purposes. If our Board of Directors issues preferred shares conferring any voting rights, it will amend our bye-laws to apply the limitations on the voting rights discussed above under "—Limitation on Voting Rights" to those preferred shares. Any rights, preferences, powers and limitations as may be established could also have the effect of discouraging an attempt to obtain control of the Company. The issuance of preferred shares could also adversely affect the voting power of the holders of our Common Shares, deny such holders the receipt of a premium on their Common shares in the event of a tender or other offer for the Common Shares and depress the market price of the Common Shares. We have no current plans to issue any preferred shares.

Bye-laws

Our bye-laws provide for our corporate governance, including the establishment of share rights, modification of those rights, issuance of share certificates, imposition of a lien over shares in respect of unpaid amounts on those shares, calls on shares which are not fully paid, forfeiture of shares, the transfer of shares, alterations of capital, the calling and conduct of general meetings, proxies, the appointment and removal of directors, conduct and power of directors, the payment of dividends, the appointment of an auditor and our winding-up.

Our bye-laws provide that our Board of Directors shall be elected annually and shall not be staggered. Shareholders may only remove a director for cause prior to the expiration of that director's term at a special meeting of shareholders at which a majority of the holders of shares voting thereon vote in favor of that action.

Our bye-laws also provide that if our Board of Directors in its absolute discretion determines that share ownership by any shareholder may result in adverse tax, regulatory or legal consequences to us, any of our subsidiaries or any other shareholder, then we will have the option, but not the obligation, to repurchase all or part of the shares held by such shareholder to the extent the Board of Directors determines it is necessary to avoid such adverse or potential adverse consequences. The price to be paid for such shares will be the fair market value of such shares.

Platinum Holdings' bye-laws and those of Platinum Bermuda and Platinum Ireland provide that matters required to be submitted to a vote of their shareholders are required to be submitted to Platinum Holdings' shareholders and the shareholders of such subsidiaries are required to vote the subsidiaries' shares in accordance with and in proportion to the vote of Platinum Holdings' shareholders.

Transfer Agent

Our registrar and transfer agent for the Common Shares is Mellon Investor Services LLC.

Differences in Corporate Law

The Companies Act differs in certain material respects from laws generally applicable to U.S. corporations and their shareholders. Set forth below is a summary of certain significant provisions of the Companies Act (including modifications adopted pursuant to our bye-laws) applicable to us, which differ in certain respects from provisions of Delaware corporate law, which is the law that governs many U.S. public companies. The following statements are summaries, and do not purport to deal with all aspects of Bermuda law that may be relevant to us and our shareholders.

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Interested Directors. Our bye-laws provide that transactions we enter into in which a director has an interest are not voidable by us, nor can the interested director be liable to us for any profit realized pursuant to such transactions, provided the nature of the interest is disclosed at the first opportunity at a meeting of directors, or in writing to the directors. Under Delaware law, such a transaction would not be voidable if (i) the material facts as to the interested director's relationship or interests are disclosed or are known to the board of directors and the board in good faith authorized the transaction by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors constitute less than a quorum, (ii) the material facts as to the director's relationship or interest and as to the transaction are disclosed or are known to the shareholders entitled to vote on the transaction and the transaction is specifically approved in good faith by vote of the shareholders or (iii) the transaction is fair to the corporation as of the time it is authorized, approved or ratified by the board of directors, a committee of the board of directors or the shareholders. Under Delaware law, the interested director could he held liable for a transaction in which that director derived an improper personal benefit.

Mergers and Similar Arrangements. We may acquire the business of another Bermuda company or a company incorporated outside Bermuda and carry on such business when it is within the objects of our memorandum of association. In the case of an amalgamation, we may amalgamate with another Bermuda company or with an entity incorporated outside Bermuda. A shareholder who did not vote in favor of the amalgamation may apply to a Bermuda court for a proper valuation of his or her shares if he or she is not satisfied that fair value has been offered for those shares. The court ordinarily would not disapprove the transaction on that ground absent evidence of fraud or bad faith. Under Delaware law, with certain exceptions, a merger, consolidation or sale of all or substantially all the assets of a corporation must be approved by the board of directors and the holders of a majority of the outstanding shares entitled to vote thereon. Under Delaware law, a stockholder of a corporation participating in certain major corporate transactions may, under certain circumstances, be entitled to appraisal rights pursuant to which the stockholder may receive cash in the amount of the fair value of the shares held by that stockholder (as determined by a court) in lieu of the consideration that stockholder would otherwise receive in the transaction. Delaware law does not provide stockholders of a corporation with voting or appraisal rights when the corporation acquires another business through the issuance of its stock or other consideration (i) in exchange for the assets of the business to be acquired, (ii) in exchange for the outstanding stock of the corporation to be acquired; (iii) in a merger of the corporation to be acquired with a subsidiary of the acquiring corporation or (iv) in a merger in which the corporation's certificate of incorporation is not amended and the corporation issues less than 20% of its common stock outstanding prior to the merger.

Takeovers. Bermuda law provides that where an offer is made for shares of another company and, within four months of the offer, the holders of not less than 90% of the shares which are the subject of the offer (other than shares held by or for the offeror or its subsidiaries) accept, the offeror may by notice require the nontendering shareholders to transfer their shares on the terms of the offer. Dissenting shareholders may apply to the court within one month of the notice objecting to the transfer. The burden is on the dissenting shareholders to show that the court should exercise its discretion to enjoin the required transfer, which the court will be unlikely to do unless the offer is obviously and convincingly unfair. Delaware law provides that a parent corporation, by resolution of its board of directors and without any shareholder vote, may merge with any subsidiary of which it owns at least 90% of the outstanding shares of each class of stock that is entitled to vote on the transaction. Upon any such merger, dissenting stockholders of the subsidiary would have appraisal rights.

Shareholder's Suit. The rights of shareholders under Bermuda law are not as extensive as the rights of shareholders under legislation or judicial precedent in many U.S. jurisdictions. Class actions and derivative actions are generally not available to shareholders under the laws of

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Bermuda. However, the Bermuda courts ordinarily would be expected to follow English case law precedent, which would permit a shareholder to commence an action in our name to remedy a wrong done to us where the act complained of is alleged to be beyond our corporate power or is illegal or would result in the violation of our memorandum of association or bye-laws. Furthermore, consideration would be given by the court to acts that are alleged to constitute a fraud against the minority shareholders or where an act requires the approval of a greater percentage of shareholders than actually approved it. The winning party in such an action generally would be able to recover a portion of attorneys' fees incurred in connection with such action. Class actions and derivative actions generally are available to stockholders under Delaware law for, among other things, breach of fiduciary duty, corporate waste and actions not taken in accordance with applicable law. In such actions, the court has discretion to permit the winning party to recover attorneys' fees incurred in connection with such action.

Indemnification of Directors. Our bye-laws indemnify our directors and officers in their capacity as such in respect of any loss arising or liability attaching to them by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which a director or officer may be guilty in relation to us other than in respect of his own willful neglect, willful default, fraud or dishonesty. Under Delaware law, a corporation may indemnify a director or officer of the corporation against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in defense or an action, suit or proceeding by reason of such position if (i) the director or officer acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation and (ii) with respect to any criminal action or proceeding, if the director or officer had no reasonable cause to believe his conduct was unlawful.

Inspection of Corporate Records. Members of the general public have the right to inspect our public documents available at the office of the Registrar of Companies in Bermuda, which will include our memorandum of association (including our objects and powers) and alterations to our memorandum of association, including any increase or reduction of our authorized capital. Our shareholders have the additional right to inspect our bye-laws, minutes of general meetings and our audited financial statements, which must be presented to the annual general meeting of shareholders. Our register of shareholders is also open to inspection by shareholders without charge, and to members of the public for a fee. We are required to maintain a share register in Bermuda but may establish a branch register outside Bermuda. We are required to keep at our registered office a register of our directors and officers which is open for inspection by members of the public without charge. Bermuda law does not, however, provide a general right for shareholders to inspect or obtain copies of any other corporate records. Delaware law permits any stockholder to inspect or obtain copies of a corporation's stockholder list and its other books and records for any purpose reasonably related to such person's interest as a stockholder.

Enforcement of Judgments and Other Matters. We have been advised by Conyers, Dill & Pearman, our Bermuda counsel, that there is doubt as to whether the courts of Bermuda would enforce (1) judgments of United States courts obtained in actions against us or our directors and officers, as well as the experts named in this prospectus who reside outside the United States predicated upon the civil liability provisions of the United States federal securities laws and (2) original actions brought in Bermuda against us or our directors and officers, as well as the experts named in this prospectus who reside outside the United States predicated solely upon United States federal securities laws. There is no treaty in effect between the United States and Bermuda providing for such enforcement, and there are grounds upon which Bermuda courts may not enforce judgments of United States courts. Certain remedies available under the laws of U.S. jurisdictions, including certain remedies available under the U.S. federal securities laws, would not be allowed in Bermuda courts as contrary to Bermuda's public policy.

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U.S. FEDERAL INCOME TAX CONSEQUENCES

The following is a discussion of the material U.S. federal income tax consequences of the purchase, ownership and disposition of the units, the ownership interests in the senior notes, treasury securities and purchase contracts that are or may be the components of a unit, and the Common Shares acquired under a purchase contract. Except for matters where it is explicitly stated that we will not receive an opinion of counsel, this discussion is the opinion of Sullivan & Cromwell, our U.S. tax counsel (subject to the qualifications, assumptions and factual determinations set forth in this discussion). Except where otherwise indicated, this discussion only applies to U.S. holders (defined below) who purchase units in the initial offering at their original offering price and hold the units, the ownership interests in senior notes, treasury securities, purchase contracts and the Common Shares as capital assets (generally, assets held for investment). This discussion is based upon the Internal Revenue Code of 1986 as amended (the "Code"), treasury regulations (including proposed treasury regulations) issued thereunder, Internal Revenue Service ("IRS") rulings and pronouncements and judicial decisions now in effect, all of which are subject to change, possibly with retroactive effect.

This discussion does not address all aspects of U.S. federal income taxation that may be relevant to U.S. holders in light of their particular circumstances, such as U.S. holders who are subject to special tax treatment (for example, (1) banks, regulated investment companies, insurance companies, dealers in securities or currencies, tax-exempt organizations or traders in securities who elect to mark to market, (2) persons holding units, senior notes or the Common Shares as part of a straddle, hedge, conversion transaction or other integrated investment, or (3) persons whose functional currency is not the U.S. dollar). In addition, this discussion does not address alternative minimum taxes or any state, local or foreign tax laws.

For purposes of this discussion, "U.S. holder" means (1) a person who is a citizen or resident of the United States, (2) a domestic corporation, (3) an estate whose income is subject to U.S. federal income tax regardless of its source, or (4) a trust if a United States court is able to exercise primary supervision over the trust's administration and one or more United States persons are authorized to control all substantial decisions of the trust. Prospective investors that are not U.S. holders should refer to "Non-United States Holders" below and are urged to consult their tax advisors with respect to the U.S. federal income tax consequences of an investment in units, including the potential application of U.S. withholding taxes.

Risk of Recharacterization

No statutory, administrative or judicial authority directly addresses the treatment of units or instruments similar to units for U.S. federal income tax purposes. As a result, no assurance can be given that the IRS or a court will agree with the tax consequences described below. The discussion below assumes that, for U.S. federal income tax purposes, (i) the senior notes and the purchase contracts will be treated as separate securities, (ii) the purchase contracts will be treated as forward contracts to purchase Common Shares and the contract adjustment payments will be treated as payments to U.S. holders for investing in such contracts and (iii) the senior notes will be treated as indebtedness of Platinum Finance. Nevertheless, the IRS could conceivably assert a different position with respect to one or more of the foregoing points, and were such position to prevail, a U.S. holder could experience tax consequences that are different from those described herein. For example, if the IRS were to assert successfully that the purchase contracts and the senior notes should be treated as a single contingent debt instrument, the principal consequences to holders would be that (a) the holder's acquisition of Common Shares pursuant to the purchase contracts would result in taxable gain or loss, (b) any such gain would be ordinary income rather than capital gain, and (c) a holder's gain from disposition of the units prior to maturity would likewise be ordinary income rather than capital gain. Prospective investors are urged to consult their tax

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advisors with respect to the U.S. federal income tax consequences of the purchase, ownership and disposition of units, the ownership interests in senior notes and the Common Shares of Platinum Holdings acquired under a purchase contract in light of their own particular circumstances, as well as the effect of any state, local or foreign tax laws.

Normal Units

Allocation of Purchase Price. A U.S. holder's acquisition of a normal unit will be treated as the acquisition of a unit consisting of two components, an ownership interest in the senior note and the related purchase contract. The purchase price of each unit will be allocated between the ownership interest in the senior note and the purchase contract constituting the unit, in proportion to their respective fair market values at the time of purchase. Such allocation will establish the U.S. holder's initial tax basis in the ownership interest in the senior note and the purchase contract. Platinum Holdings and Platinum Finance expect to report the fair market value of each senior note as $1,000.00 (or $25.00 for each 2.5% ownership interest in a senior note) and the fair market value of each purchase contract as $0.00. This allocation will be binding on each U.S. holder (but not on the IRS) unless such U.S. holder explicitly discloses a contrary position on a statement attached to the U.S. holder's timely filed U.S. federal income tax return for the taxable year in which a unit is acquired. Thus, absent such disclosure, a U.S. holder should allocate the purchase price for a unit in accordance with the values reported by us. The remainder of this discussion assumes that this allocation of the purchase price of a unit will be respected for U.S. federal income tax purposes. If these allocations are not respected ultimately, the timing and amount of interest income reported by the U.S. holders and the amount of capital gain or loss ultimately realized upon the disposition of the Common Shares acquired pursuant to the purchase contracts could be impacted.

Ownership of Senior Notes or Treasury Securities. For U.S. federal income tax purposes, a U.S. holder will be treated as owning the applicable ownership interest in the senior notes or treasury securities constituting a part of the units owned. Platinum Holdings and Platinum Finance (under the terms of the units) and each U.S. holder (by acquiring units) agree to treat the ownership interests in the senior notes or treasury securities constituting a part of the units as owned by such U.S. holder for all tax purposes, and the remainder of this discussion assumes such treatment. The U.S. federal income tax consequences of owning ownership interests in the senior notes or treasury securities are discussed below (see "—Senior Notes", "—Stripped Units" and "—Treasury Securities Purchased on Remarketing or a Tax Event Redemption").

Sales, Exchanges or Other Taxable Dispositions of Units. If a U.S. holder sells, exchanges or otherwise disposes of units in a taxable disposition, such U.S. holder will be treated as having sold, exchanged or disposed of each of the purchase contract and the ownership interest in the senior note (or treasury securities) that constitute such unit. The proceeds realized on such disposition will be allocated between the purchase contract and the ownership interest in the senior note (or treasury securities) in proportion to their respective fair market values. As a result, as to each of the purchase contract and the senior note (or treasury securities), a U.S. holder generally will recognize gain or loss equal to the difference between the portion of the proceeds received by such U.S. holder that is allocable to the purchase contract and the ownership interest in the senior note (or treasury securities) and such U.S. holder's adjusted tax basis in the purchase contract and the ownership interest in the senior note (or treasury securities). For treatment of amounts received with respect to contract adjustment payments or deferred contract adjustment payments, see "—Purchase Contracts—Contract Adjustment Payments and Deferred Contract Adjustment Payments" below.

In the case of the purchase contract and the treasury securities, such gain or loss generally will be capital gain or loss except that amounts received with respect to accrued but unpaid interest on treasury securities will be treated as ordinary income to the extent not previously taken into income.

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Such gain or loss generally will be long-term capital gain or loss if the U.S. holder held the units for more than one year immediately prior to such disposition. Long-term capital gains of individuals are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations. The rules governing the determination of the character of gain or loss on the disposition of an ownership interest in a senior note are summarized below under "—Senior Notes—Sales, Exchanges, Remarketing or Other Taxable Dispositions of Senior Notes." Because gain on the disposition of an ownership interest in a senior note generally should be treated as ordinary interest income and loss on the disposition of an ownership interest in a senior note should be treated as ordinary loss to the extent of the U.S. holder's prior inclusions of original issue discount (as described in more detail below), dispositions of a unit consisting of a purchase contract and an ownership interest in a senior note before the interest reset date may give rise to capital gain or loss on the purchase contract and ordinary income or loss on the ownership interest in the senior note, which must be reported separately for U.S. federal income tax purposes.

If the sale, exchange or other disposition of a unit occurs when the purchase contract has a negative value, we believe that a U.S. holder should be considered to have received additional consideration for the ownership interest in the senior note (or treasury securities) in an amount equal to such negative value and to have paid such amount to be released from such U.S. holder's obligations under the related purchase contract. Because, as discussed below, any gain on the disposition of an ownership interest in a senior note prior to the interest reset date generally will be treated as ordinary interest income for U.S. federal income tax purposes, the ability to offset such interest income with a loss on the purchase contract may be limited. Due to the lack of authority directly addressing the treatment of a sale, exchange or other disposition of a unit (or an instrument similar to a unit) at a time when the purchase contract has negative value, such treatment is unclear and counsel will not render an opinion on such treatment. U.S. holders should consult their tax advisors regarding a disposition of a unit at a time when the purchase contract has a negative value.

Senior Notes

Classification of the Senior Notes. In connection with the issuance of the senior notes, our U.S. tax counsel, Sullivan & Cromwell, will deliver an opinion that, under current law, and based on certain representations, facts and assumption set forth in the opinion, the senior notes should be classified as indebtedness for U.S. federal income tax purposes.

Platinum Holdings and Platinum Finance (under the terms of the senior notes) and each U.S. holder (by acquiring an ownership interest in the senior notes) agree to treat the senior notes as indebtedness of Platinum Finance for all tax purposes. The remainder of this discussion assumes such treatment.

Original Issue Discount. Because of the manner in which the interest rate on the senior notes is reset, we believe that the senior notes should be classified as contingent payment debt instruments subject to the "noncontingent bond method" for accruing original issue discount, as set forth in the applicable treasury regulations. Platinum Holdings and Platinum Finance intend to treat the senior notes in that manner, and the remainder of this discussion assumes that the senior notes will be so treated for U.S. federal income tax purposes. Because of the lack of direct authority addressing the classification of senior notes (or notes with terms similar to senior notes) as contingent payment debt obligations, such classification is unclear and counsel will not render an opinion on such classification.

As discussed more fully below, the effects of applying the noncontingent bond method will be (1) to require each U.S. holder, regardless of such holder's usual method of tax accounting, to use an accrual method with respect to the interest income on the ownership interest in the senior notes,

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(2) to require each U.S. holder to accrue interest income in excess of interest payments actually received for all accrual periods through , 200 , and possibly for accrual periods thereafter, and (3) generally to result in ordinary, rather than capital, treatment of any gain and any loss (to the extent such loss does not exceed the U.S. holder's prior inclusions of original issue discount on the ownership interest in the senior note) on the sale, exchange or other disposition of an ownership interest in the senior notes. See "—Senior Notes—Sales, Exchanges, Remarketing or Other Taxable Dispositions of Senior Notes" below.

A U.S. holder will be required to accrue original issue discount on a constant yield to maturity basis based on the "comparable yield" of the senior notes. The comparable yield of the senior notes generally will be the rate at which Platinum Finance would issue a fixed rate noncontingent debt instrument with terms and conditions similar to the senior notes. Platinum Finance is required to provide the comparable yield and a projected payment schedule, based on the comparable yield, to holders of the senior notes. Platinum Finance has determined that the comparable yield is % and the projected payments are $ on , 200 , $ for each subsequent quarter ending on or prior to , 200 and $ for each semi-annual payment period ending after , 200 . Platinum Finance has also determined that the projected payment for the senior notes, per $1,000 of principal amount, at the maturity date is $ , or $ for each 2.5% ownership interest in a senior note (which includes the stated principal amount of the senior notes as well as the final projected interest payment).

The amount of original issue discount on a senior note for each accrual period is determined by multiplying the comparable yield of the senior note (adjusted for the length of the accrual period) by the senior note's adjusted issue price at the beginning of the accrual period. Based on the allocation of the purchase price of each unit described above (see "—Normal Units—Allocation of Purchase Price"), the adjusted issue price of each senior note, per $1,000 of principal amount, at the beginning of the first accrual period will be $1,000, or $25 for each 2.5% ownership interest in a senior note, and the adjusted issue price of each senior note at the beginning of each subsequent accrual period will be equal to $1,000, or $25 for each 2.5% ownership interest in a senior note increased by any original issue discount previously accrued by such U.S. holders on such senior note (or ownership interest therein) and decreased by the amount of projected payments on such senior note (or ownership interest therein) through such date. The amount of original issue discount so determined will then be allocated on a ratable basis to each day in the accrual period that such U.S. holders hold the senior note (or ownership interest therein).

If, after the date on which the interest rate on the senior notes is reset, the remaining amounts of principal and interest payable differ from the payments set forth on the projected payment schedule, negative or positive adjustments reflecting such difference should generally be taken into account by a U.S. holder as adjustments to interest income in a reasonable manner over the period to which they relate. We expect to account for any such difference with respect to a period as an adjustment for that period.

A U.S. holder is generally bound by the comparable yield and projected payment schedule provided by Platinum Finance. If a U.S. holder decides to use its own comparable yield and projected payment schedule, it must explicitly disclose this fact and the reason that it has used its own comparable yield and projected payment schedule. In general, this disclosure must be made on a statement attached to the U.S. holder's timely filed U.S. federal income tax return for the taxable year that includes the date of its acquisition of the ownership interests in the senior notes. The comparable yield and projected payment schedule are supplied by Platinum Finance solely for computing income under the noncontingent bond method for U.S. federal income tax purposes and do not constitute projections or representations as to the amounts that such U.S. holder will actually receive as a result of owning ownership interests in the senior notes or units.

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Because income with respect to the senior notes will constitute interest for U.S. federal income tax purposes, corporate holders of units (or senior notes) will not be entitled to the dividends-received deduction with respect of such income.

Tax Basis in Senior Notes. A U.S. holder's tax basis in the ownership interest in the senior notes will equal the portion of the purchase price for the units allocated to the ownership interests in the senior notes as described above (see "—Normal Units—Allocation of Purchase Price"), increased by the amount of original issue discount included in income with respect to the ownership interests in the senior notes and decreased by the amount of projected payments with respect to the ownership interest in the senior notes through the computation date.

Sales, Exchanges, Remarketing or Other Taxable Dispositions of Senior Notes. A U.S. holder will recognize gain or loss on a disposition of ownership interest in the senior notes (including a tax event redemption or upon the remarketing of the senior notes) in an amount equal to the difference between the amount realized by such U.S. holder on the disposition of the ownership interest in the senior notes and such U.S. holder's adjusted tax basis in such ownership interest in the senior notes. Selling expenses incurred by such U.S. holder, including the remarketing fee, will reduce the amount of gain or increase the amount of loss recognized by such U.S. holder upon a disposition of the ownership interests in the senior notes. Gain recognized on the disposition of the ownership interest in the senior notes prior to the date on which the interest rate on the senior notes is reset will be treated as ordinary interest income. Loss recognized on the disposition of the ownership interest in the senior notes prior to the interest rate reset date will be treated as ordinary loss to the extent of such U.S. holder's prior inclusions of original issue discount on the ownership interest in the senior note. Any loss in excess of such amount will be treated as a capital loss. In general, gain recognized on the disposition of the ownership interest in the senior notes on or after the interest rate reset date will be ordinary interest income to the extent attributable to the excess, if any, of the total remaining principal and interest payments due on the ownership interest in the senior notes over the total remaining payments set forth on the projected payment schedule for the ownership interest in the senior notes. Any gain recognized in excess of such amount and any loss recognized on such a disposition will generally be treated as a capital gain or loss. Long-term capital gains of individuals are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations.

Purchase Contracts

Acquisition of the Common Shares of Platinum Holdings Under a Purchase Contract. A U.S. holder generally will not recognize gain or loss on the purchase of Platinum Holdings' Common Shares under a purchase contract, except with respect to any cash paid to a U.S. holder in lieu of a fractional share of the Common Shares, which should be treated as paid in exchange for such fractional share. A U.S. holder's aggregate initial tax basis in the Common Shares acquired under a purchase contract should generally equal the purchase price paid for such Common Shares, plus the properly allocable portion of such U.S. holder's adjusted tax basis (if any) in the purchase contract (see "—Normal Units—Allocation of Purchase Price"), less the portion of such purchase price and adjusted tax basis allocable to the fractional share. The holding period for the Common Shares acquired under a purchase contract will commence on the day following the acquisition of such Common Shares.

Early Settlement of Purchase Contract. The purchase of Platinum Holdings' Common Shares upon early settlement of a purchase contract will be treated as described above (see"—Purchase Contracts—Acquisition of Platinum Holdings' Common Shares Under a Purchase Contract"). A U.S. holder of units will not recognize gain or loss on the return of such U.S. holder's proportionate share of ownership interests in the senior notes or treasury securities upon early settlement of a

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purchase contract and will have the same adjusted tax basis and holding period in such senior notes or treasury securities as before such early settlement.

Termination of Purchase Contract. If a purchase contract terminates, a U.S. holder of units will recognize gain or loss equal to the difference between the amount realized (if any) and such U.S. holder's adjusted tax basis (if any) in the purchase contract at the time of such termination. Any such gain or loss will be capital and generally will be long-term capital gain or loss if the U.S. holder held the purchase contract for more than one year prior to such termination. Long-term capital gains of individuals are eligible for reduced rates of taxation. The deductibility of capital losses is subject to limitations. A U.S. holder will not recognize gain or loss on the return of such U.S. holder's proportionate share of ownership interests in the senior notes or treasury securities upon termination of the purchase contract and such U.S. holder will have the same adjusted tax basis and holding period in such ownership interests in the senior notes or treasury securities as before such termination.

Adjustment to Settlement Rate. A U.S. holder of units might be treated as receiving a constructive dividend distribution from us if (1) the settlement rate is adjusted and as a result of such adjustment such U.S. holder's proportionate interest in our assets or earnings and profits is increased and (2) the adjustment is not made pursuant to a bona fide, reasonable anti-dilution formula. An adjustment in the settlement rate would not be considered made pursuant to such a formula if the adjustment were made to compensate a U.S. holder for certain taxable distributions with respect to Platinum Holdings' Common Shares. Thus, under certain circumstances, an increase in the settlement rate might give rise to a taxable dividend to a U.S. holder of units even though such U.S. holder would not receive any cash related thereto.

Contract Adjustment Payments and Deferred Contract Adjustment Payments.

Because there is no direct authority addressing the treatment of the contract adjustment payments or deferred contract adjustment payments, such treatment is unclear and counsel will not render an opinion on such treatment. Contract adjustment payments and deferred contract adjustment payments may constitute taxable ordinary income to a U.S. holder when received or accrued, in accordance with such U.S. holder's regular method of tax accounting. To the extent we are required to file information returns with respect to the contract adjustment payments or deferred contract adjustment payments, we intend to report such payments as taxable ordinary income to U.S. holders. U.S. holders should consult their tax advisors concerning the treatment of contract adjustment payments and deferred contract adjustment payments, including the possibility that any contract adjustment payment or deferred contract adjustment payment may be treated as a loan, purchase price adjustment, rebate or payment analogous to an option premium, rather than being includible in income on a current basis.

The treatment of contract adjustment payments and deferred contract adjustment payments could affect a U.S. holder's adjusted tax basis in a purchase contract or the Common Shares of Platinum Holdings received under a purchase contract or the amount realized by a U.S. holder upon the sale or disposition of a unit or the termination of a purchase contract. In particular,

•: amounts received on a sale or disposition of a unit or on termination of a purchase contract with respect to any accrued but unpaid contract adjustment payments or deferred contract adjustment payments that have not been included in a U.S. holder's income may be treated as ordinary income,
•: any deferred contract adjustment payments that have been taken into income at the time they accrued but that are no longer payable to a U.S. holder because the purchase contract has been terminated by reason of the bankruptcy of Platinum Holdings may give rise to an ordinary deduction in the year in which it ceases to be payable;

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•: any contract adjustment payments or deferred contract adjustment payments that have been included in a U.S. holder's income, but that have not been paid to such U.S. holder, may increase such U.S. holder's adjusted tax basis in the purchase contract, and
•: any contract adjustment payments or deferred contract adjustment payments that have been paid to a U.S. holder, but that have not been included in such U.S. holder's income, may either reduce such U.S. holder's adjusted tax basis in the purchase contract or result in an increase in the amount realized on a termination or disposition of the purchase contract.

Common Shares

Dividends. Distributions to U.S. holders with respect to the Common Shares will be treated as ordinary dividend income to the extent of Platinum Holdings' current or accumulated earnings and profits as determined for U.S. federal income tax purposes, subject to the discussion below relating to the potential application of the "controlled foreign corporation", "related person insurance income", or "passive foreign investment company" rules. Such dividends will not be eligible for the dividends-received deduction allowed to U.S. corporations under the Code. The amount of any distribution in excess of Platinum Holdings' current and accumulated earnings and profits will first be applied to reduce your tax basis in the Common Shares, and any amount in excess of tax basis will be treated as gain from the sale or exchange of your Common Shares.

Classification of Platinum Holdings, Platinum UK, Platinum Bermuda or Platinum Ireland as a Controlled Foreign Corporation. Each "United States shareholder" of a foreign corporation that is a "controlled foreign corporation" ("CFC") for an uninterrupted period of 30 days or more during a taxable year, and who owns shares in the CFC directly or indirectly through foreign entities on the last day of the CFC's taxable year must include in its gross income for U.S. federal income tax purposes its pro rata share of the CFC's "subpart F income", even if the subpart F income is not distributed. If Platinum Holdings, Platinum Bermuda, Platinum Ireland and/or Platinum UK is deemed to be a CFC, substantially all of Platinum Holdings' income and that of each of Platinum Bermuda and Platinum Ireland will be subpart F income. Any U.S. corporation, citizen, resident or other U.S. person who owns, directly or indirectly through foreign persons, or is considered to own (by application of the rules of constructive ownership set forth in Code section 958(b), applying to family members, partnerships, estates, trusts or controlled corporations or holders of certain options, including for these purposes, holders of our equity security units) 10% or more of the total combined voting power of all classes of stock of the foreign corporation will be considered to be a "United States shareholder". A foreign insurance company such as Platinum UK or Platinum Bermuda is treated as a CFC (other than for purposes of related person insurance income, as described below) only if its "United States shareholders" collectively own more than 25% of the total combined voting power or total value of the corporation's stock. Because of the limitations on concentration of voting power of our Common Shares, the dispersion of Platinum Holdings' share ownership among holders other than St. Paul and its subsidiaries, the provisions for directed voting on matters requiring action by the shareholders of Platinum Bermuda, Platinum UK and Platinum Ireland, including the election of members of the board of directors, and the restrictions on transfer, issuance or repurchase of Common Shares, you should not be subject to treatment as a United States shareholder of a CFC. However, these prophylactic provisions have not been tested in court and it is possible that they could be challenged by the Internal Revenue Service and found to be ineffective in preventing CFC status from arising. Because Platinum Holdings' bye-laws provide that no single shareholder (including St. Paul) is permitted to hold as much as 10% of the total combined voting power of Platinum Holdings, shareholders of Platinum Holdings should not be viewed as United States shareholders of a CFC for purposes of these rules. Again, there can be no assurance that these ownership limitations will be effective. Assuming they are effective, however, neither the indirect foreign tax credit nor the intercompany dividends received deduction attributable

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to U.S. source income will be available to U.S. corporate holders of the Common Shares who, absent such provision, would qualify therefor.

RPII Companies. Different definitions of "United States shareholder" and "controlled foreign corporation" are applicable in the case of a foreign corporation which earns "related person insurance income" ("RPII"). RPII is defined in Code section 953(c)(2) as any "insurance income" attributable to policies of insurance or reinsurance with respect to which the person (directly or indirectly) insured is a "United States shareholder" or a "related person" to such a shareholder. In general, and subject to certain limitations, "insurance income" is income (including premium and investment income) attributable to the issuing of any insurance or reinsurance contract in connection with risks located in a country other than the country under the laws of which the controlled foreign corporation is created or organized and which would be taxed under the portions of the Code relating to insurance companies if the income were the income of a domestic insurance company.

The term "related person" for this purpose means someone who controls or is controlled by the United States shareholder or someone who is controlled by the same person or persons which control the United States shareholder. "Control" is measured by either more than 50% in value or more than 50% in voting power of stock, applying constructive ownership principles similar to the rules of section 958 of the Code. A corporation's pension plan is ordinarily not a "related person" with respect to the corporation unless the pension plan owns, directly or indirectly through the application of constructive ownership rules similar to those contained in section 958, more than 50%, measured by vote or value, of the stock of the corporation. For purposes of inclusion of Platinum UK's or Platinum Bermuda's RPII in the income of United States shareholders, unless an exception applies, the term "United States shareholder" includes all U.S. persons who own, directly or indirectly, any amount (rather than 10% or more) of Platinum UK's or Platinum Bermuda's stock. Platinum UK or Platinum Bermuda will be treated as a controlled foreign corporation for RPII purposes if such persons collectively own directly, indirectly or constructively 25% or more of the stock of Platinum UK or Platinum Bermuda by vote or value. St. Paul will, for federal income tax purposes, actually or constructively own approximately % of the Common Shares of Platinum Holdings upon completion of the Equity Public Offering. Accordingly, unless an exception applies, it is likely that Platinum UK and Platinum Bermuda will each be treated as a CFC for purposes of the RPII rules.

RPII Exceptions. The special RPII rules do not apply if:

•: direct or indirect insureds and persons related to such insureds, whether or not U.S. persons, are treated at all times during the taxable year as owning less than 20% of the voting power and less than 20% of the value of the stock of Platinum UK or Platinum Bermuda, as applicable,
•: RPII, determined on a gross basis, is less than 20% of Platinum UK's or Platinum Bermuda's gross insurance income for the taxable year, as applicable,
•: Platinum UK or Platinum Bermuda elects to be taxed on its RPII as if the RPII were effectively connected with the conduct of a United States trade or business and to waive all treaty benefits with respect to RPII and meets certain other requirements, or
•: Platinum UK or Platinum Bermuda elects to be treated as a United States corporation.

Platinum UK and Platinum Bermuda have not and do not intend to make either of the elections described above. Additionally, as subsidiaries of St. Paul may be reinsured by Platinum UK and/or Platinum Bermuda, persons related to insureds may indirectly own more than 20% of the value of the stock of Platinum UK and Platinum Bermuda. Thus, only the second exception may be available.

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Where none of these exceptions applies, each U.S. person who owns directly or indirectly shares in Platinum Holdings (and therefore, indirectly in Platinum UK and Platinum Bermuda) at the end of any taxable year, will be required to include in its gross income for United States federal income tax purposes its share of RPII of Platinum UK and/or Platinum Bermuda for the entire taxable year. This inclusion will be determined as if such RPII were distributed proportionately only to such United States shareholders holding Common Shares at the end of the taxable year. The inclusion will be limited to the current-year earnings and profits of Platinum UK or Platinum Bermuda, as applicable, reduced by the shareholder's pro rata share, if any, of certain prior-year deficits in earnings and profits.

Computation of RPII. In order to determine how much RPII each of Platinum UK and Platinum Bermuda has earned in each taxable year, we will obtain and rely upon information from Platinum UK's and Platinum Bermuda's insureds and reinsureds to determine whether any of the insureds, reinsureds or other persons related to such insureds or reinsureds own our shares and are U.S. persons. Each year, each of Platinum UK and Platinum Bermuda will send a letter after the most recent taxable year to each person who was a policyholder to represent whether it was a United States shareholder of the Company or related to a United States shareholder during the year. For any taxable year in which Platinum UK's or Platinum Bermuda's gross RPII is 20% or more of its gross insurance income for the year, we may also seek information from our shareholders as to whether direct or indirect owners of our shares at the end of the year are U.S. persons so that the RPII may be determined and apportioned among such persons. To the extent we are unable to determine whether a direct or indirect owner of shares is a U.S. person, we may assume that such owner is not a U.S. person, thereby increasing the per share RPII amount for all United States shareholders.

Apportionment of RPII to United States Shareholders. If Platinum UK's or Platinum Bermuda's RPII for any future taxable year is 20% or more of its gross insurance income, every U.S. person directly or indirectly owning Common Shares on the last day of that year will be required to include in gross income its share of Platinum UK's or Platinum Bermuda's RPII for such year, whether or not distributed. A U.S. person owning Common Shares during our taxable year but not on the last day of the taxable year for which Platinum Bermuda and/or Platinum UK is a controlled foreign corporation within the meaning of the RPII provisions of the Code, which would normally be December 31, is not required to include in gross income any part of Platinum UK's or Platinum Bermuda's RPII. Correspondingly, a U.S. person directly or indirectly owning Common Shares on the last day of the taxable year in which Platinum UK or Platinum Bermuda is a controlled foreign corporation for purposes of these provisions is required to include in its income its pro rata share of the RPII for the entire year, even though it did not own the Common Shares for the entire year.

Information Reporting. Each U.S. person who is a direct or indirect shareholder of Platinum Holdings on the last day of its taxable year must attach to the income tax or information return it would normally file for the period which includes that date a Form 5471 if Platinum UK or Platinum Bermuda is a CFC for RPII purposes for any continuous thirty-day period during its taxable year, whether or not any net RPII income is required to be reported. Platinum UK or Platinum Bermuda, as the case may be, will not be considered to be a CFC for this purpose and, therefore, Form 5471 will not be required, for any taxable year in which Platinum UK's or Platinum Bermuda's gross RPII constitutes less than 20% of its gross insurance income. For any year in which Platinum UK's or Platinum Bermuda's gross RPII constitutes 20% or more of its gross insurance income, we intend to provide Form 5471 to our direct or indirect United States shareholders for attachment to the returns of such shareholders. The amounts of the RPII inclusions may be subject to adjustment based upon subsequent IRS examination. A tax-exempt organization will be required to attach Form 5471 to its information return in the circumstances described above. Failure to file Form 5471 may result

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in penalties. In addition, U.S. persons who at any time acquire 10% or more of our shares will have an independent obligation to file Form 5471.

Tax-Exempt Shareholders. Tax-exempt entities will be required to treat certain subpart F insurance income, including RPII, that is includible in income by the tax-exempt entity as unrelated business taxable income.

Distributions; Basis; Exclusion of Distributions from Gross Income. A U.S. holder's tax basis in Platinum Holdings' Common Shares will be increased by the amount of any RPII that the shareholder includes in income. The shareholder may exclude from income the amount of any distribution by Platinum Holdings to the extent of the RPII included in income for the year in which the distribution was paid or for any prior year. The U.S. holder's tax basis in Platinum Holdings' Common Shares will be reduced by the amount of such distributions that are excluded from income. While, in certain circumstances, a U.S. shareholder may be able to exclude from income distributions with respect to RPII that a prior shareholder included in income, that exclusion will not generally be available to holders who purchase Common Shares in the Equity Public Offering, pursuant to a purchase contract or in the public trading markets and are therefore unable to identify the previous shareholder and demonstrate that such shareholder had previously included the RPII in income.

Dispositions of Common Shares. Subject to the discussion below relating to the potential application of Code section 1248 or the passive foreign investment company rules, you will recognize a gain or loss for United States federal income tax purposes upon the sale or exchange of any Common Shares equal to the difference between the amount realized upon such sale or exchange and the holder's basis in the Common Shares. If the holder's holding period for these Common Shares is more than one year, any gain will be subject to tax at a current maximum marginal tax rate of 20% (18% if the holding period is more than five years) for individuals and 35% for corporations.

Code section 1248 provides that if a U.S. person disposes of stock in a foreign corporation and such person owned directly, indirectly through certain foreign entities or constructively 10% or more of the voting shares of the corporation at any time during the five-year period ending on the date of disposition when the corporation was a CFC, any gain from the sale or exchange of the shares may be treated as ordinary income to the extent of the CFC's earnings and profits during the period that the shareholder held the shares (with certain adjustments). A 10% U.S. shareholder may in certain circumstances be required to report a disposition of shares of a CFC by attaching IRS Form 5471 to the U.S. income tax or information return that it would normally file for the taxable year in which the disposition occurs. Code section 953(c)(7) generally provides that section 1248 also will apply to the sale or exchange of shares in a foreign corporation if the foreign corporation would be taxed as an insurance company if it were a domestic corporation, regardless of whether the shareholder is a 10% shareholder or whether RPII constitutes 20% or more of the corporation's gross insurance income. Existing Treasury regulations do not address whether Code section 1248 and the requirement to file Form 5471 would apply if the foreign corporation is not a CFC but the foreign corporation has a subsidiary that is a CFC or that would be taxed as an insurance company if it were a domestic corporation (although, as discussed above, shareholders of 10% or more of the shares of Platinum Holdings will have an independent obligation to file Form 5471 in respect of the taxable year in which they reach the 10% threshold). Code section 1248 and the requirement to file Form 5471 should not apply to dispositions of Common Shares because (i) we should not have any U.S. shareholders that own directly, indirectly or constructively 10% or more of the voting power of the Common Shares, and (ii) we are not directly engaged in the insurance business and, under proposed regulations, Code sections 953 and 1248 appear to be applicable only in the case of shares of corporations that are directly engaged in the insurance business. However, the IRS might

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interpret the proposed regulations in a different manner and the proposed regulations may be amended or promulgated in final form so as to provide that Code section 1248 and the requirement to file Form 5471 will apply to dispositions of Common Shares.

Foreign Tax Credit. If U.S. persons own a majority of the Company's shares, only a portion of the current income inclusions under the CFC, RPII and passive foreign investment company rules, if any, and of dividends paid by us (including any gain from the sale of Common Shares that is treated as a dividend under section 1248 of the Code) will be treated as foreign source income for purposes of computing a shareholder's U.S. foreign tax credit limitation.

Uncertainty as to Application of RPII. Regulations interpreting the RPII provisions of the Code exist only in proposed form. It is not certain whether these regulations will be adopted in their proposed form or what changes might ultimately be made or whether any such changes, as well as any interpretation or application of the RPII rules by the IRS, the courts or otherwise, might have retroactive effect. Accordingly, the meaning of the RPII provisions and their application to Platinum UK and Platinum Bermuda is uncertain. These provisions include the grant of authority to the U.S. Treasury to prescribe "such regulations as may be necessary to carry out the purposes of this subsection, including . . . regulations preventing the avoidance of this subsection through cross insurance arrangements or otherwise". In addition, there can be no assurance that the IRS will not challenge any determinations by Platinum UK or Platinum Bermuda as to the amount, if any, of RPII that should be includible in your income or that the amounts of the RPII inclusions will not be subject to adjustment based upon subsequent IRS examination. Each U.S. person considering an investment in Common Shares should consult its tax advisor as to the effects of these uncertainties.

Passive Foreign Investment Companies. Sections 1291 through 1298 of the Code contain special rules applicable to foreign corporations that are "passive foreign investment companies" ("PFICs"). In general, a foreign corporation will be a PFIC during a given year if:

•: 75% or more of its income constitutes "passive income" or
•: 50% or more of its assets produce passive income.

If we were to be characterized as a PFIC during a given year, U.S. holders would be subject to a penalty tax at the time of their sale at a gain of, or receipt of an "excess distribution" with respect to, their Common Shares, unless such shareholders elected to be taxed on their pro rata share of our earnings whether or not such earnings were distributed or elected to be taxed on the investment in Common Shares on a mark-to-market basis. In general, a shareholder receives an "excess distribution" if the amount of the distribution is more than 125% of the average distribution with respect to the stock during the three preceding taxable years (or shorter period during which the taxpayer held the stock). In general, the penalty tax is equivalent to an interest charge on taxes that are deemed due during the period the U.S. holder owned the shares, computed by assuming that the excess distribution or gain (in the case of a sale) with respect to the shares was taxed in equal portions at the highest applicable tax rate on ordinary income throughout the holder's period of ownership. The interest charge is equal to the applicable rate imposed on underpayments of U.S. federal income tax for such period.

For the above purposes, passive income is defined to include income of the kind which would be foreign personal holding company income under Code section 954(c), and generally includes interest, dividends, annuities and other investment income. The PFIC statutory provisions, however, contain an express exception for income "derived in the active conduct of an insurance business by a corporation which is predominantly engaged in an insurance business . . . ."

This exception is intended to ensure that income derived by a bona fide insurance company is not treated as passive income, except to the extent such income is attributable to financial reserves

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in excess of the reasonable needs of the insurance business. We expect, for purposes of the PFIC rules, that each of Platinum UK and Platinum Bermuda will be predominantly engaged in an insurance business and is unlikely to have financial reserves in excess of the reasonable needs of its insurance business. The PFIC statutory provisions contain a look-through rule stating that, for purposes of determining whether a foreign corporation is a PFIC, such foreign corporation shall be treated as if it received "directly its proportionate share of the income .. . ." and as if it "held its proportionate share of the assets . . ." of any other corporation in which it owns at least 25% by value of the stock. While no explicit guidance is provided by the statutory language, under this look-through rule we should be deemed to own the assets and to have received the income of Platinum Holdings' insurance subsidiaries directly for purposes of determining whether Platinum Holdings qualifies for the insurance exception. This interpretation of the look-through rule is consistent with the legislative intention generally to exclude bona fide insurance companies from the application of PFIC provisions; there can, of course, be no assurance as to what positions the IRS or a court might take in the future. Each U.S. person considering an investment in Common Shares should consult its tax advisor as to the effects of the PFIC rules.

Other. Except as discussed below under "Backup Withholding Tax and Information Reporting" with respect to backup withholding, dividends paid by Platinum Holdings will not be subject to U.S. withholding tax.

Transfer Reporting Requirements

A U.S. person (including a tax exempt entity) that purchases Platinum Holdings' Common Shares in the Equity Public Offering may be required to file a Form 926 or similar form with the IRS if the cost of such purchases, including the cost of certain related purchases and purchases by related persons, exceeds $100,000. In the event such person fails to file any such required form, such person could be required to pay a penalty equal to 10% of the gross amount paid for such Common Shares (subject to a maximum penalty of $100,000, except in cases involving intentional disregard). U.S. persons should consult their own tax advisors with respect to this or any other reporting requirement which may apply with respect to their acquisition of Platinum Holdings' Common Shares.

Proposed U.S. Tax Legislation

Recently proposed U.S. legislation targeting so-called "inversion transactions", if enacted, would under certain circumstances treat a foreign corporation as a U.S. corporation for U.S. federal income tax purposes and under other circumstances would require obtaining IRS approval of the terms of related-party transactions. In addition, interest deductions on debt borrowed from or guaranteed by a related non-U.S. party would be more severely limited than under existing so-called "earnings stripping" provisions.

Platinum Holdings and its subsidiaries would appear not to be subject to the proposed legislation directed at inversion transactions as currently drafted. However, the proposed changes to the earnings stripping provisions could impose significant restrictions on the amount of interest deductible by Platinum Holdings' U.S. subsidiaries on certain debt owed to or guaranteed by related non-U.S. parties (including the surplus note to be issued by Platinum US to Platinum Ireland and the senior notes to be issued by Platinum Finance and guaranteed by Platinum Holdings). We cannot predict whether the proposed legislation (or any similar legislation) will be enacted or, if enacted, what the specific provisions or the effective date of any such legislation would be, or whether it would have any effect on us or our subsidiaries.

If the inversion legislation were enacted and made applicable to Platinum Holdings or its subsidiaries, Platinum Holdings could be treated as a U.S. corporation. If Platinum Holdings were

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treated as a U.S. corporation, it would be subject to taxation in the U.S. at regular corporate rates. The U.S. tax consequences to the U.S. and non-U.S. holders of Common Shares would be significantly different from those described in the preceding sections. If the inversion legislation were to so apply, however, the earnings stripping provisions would, if also enacted, be inapplicable to the extent the non-U.S. related-party lender or guarantor was treated as a U.S. corporation under the inversion legislation. Prospective investors should consult their tax advisors regarding the U.S. tax consequences to them, in their particular circumstances, if we were treated as a U.S. corporation.

Stripped Units

Substitution of Treasury Securities to Create Stripped Units. A U.S. holder of normal units who delivers treasury securities to the collateral agent in substitution for ownership interests in senior notes or other pledged securities generally will not recognize gain or loss upon the delivery of such treasury securities or the release of the senior notes or other pledged securities to such U.S. holder. Such U.S. holder will continue to take into account items of income or deduction otherwise includible or deductible, respectively, by such U.S. holder with respect to such treasury securities and ownership interests in senior notes or other pledged securities, and the purchase contract will not be affected by such delivery and release. In general, a U.S. holder will be required for U.S. federal income tax purposes to recognize original issue discount on the treasury securities on a constant yield basis, or acquisition discount on the treasury securities when it is paid or accrues generally in accordance with such U.S. holder's normal method of accounting. U.S. holders should consult their own tax advisors concerning the tax consequences of purchasing, owning and disposing of the treasury securities so delivered to the collateral agent.

Substitution of Senior Notes to Recreate Normal Units. A U.S. holder of stripped units who delivers ownership interests in senior notes to the collateral agent in substitution for pledged treasury securities generally will not recognize gain or loss upon the delivery of such ownership interests in the senior notes or the release of the pledged treasury securities to such U.S. holder. Such U.S. holder will continue to take into account items of income or deduction otherwise includible or deductible, respectively, by such holder with respect to such pledged treasury securities and such senior notes. Such U.S. holder's tax basis in the ownership interests in the senior notes, the pledged treasury securities and the purchase contract will not be affected by such delivery and release. U.S. holders should consult their own advisors concerning the tax consequences of purchasing, owning and disposing of the treasury securities so released to them.

Treasury Securities Purchased on Remarketing or a Tax Event Redemption

A remarketing or a tax event redemption will be a taxable event for U.S. holders, which will be subject to tax in the manner described above under "—Senior Notes—Sales, Exchanges, Remarketing or Other Taxable Dispositions of Senior Notes."

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Ownership of Treasury Securities. In the event of a remarketing of the senior notes or a tax event redemption prior to the share purchase date, Platinum Holdings and Platinum Finance (under the terms of the units) and each U.S. holder (by acquiring units) agree to treat the U.S. holder's share of the treasury securities constituting a part of its units as owned by the U.S. holder for U.S. federal income tax purposes. In such a case, the U.S. holder will be required to include in income any amount earned on its pro rata share of the treasury securities for U.S. federal income tax purposes. The remainder of this discussion assumes that U.S. holders will be treated as the owners of their share of the treasury securities constituting a part of such units for U.S. federal income tax purposes.

Interest Income and Original Issue Discount. In the event of a remarketing of the senior notes, the treasury securities may, and in the event of a tax event redemption prior to the share purchase date, the treasury securities will, consist of stripped treasury securities. Following a remarketing of the senior notes or a tax event redemption prior to the share purchase date, U.S. holders will be required to treat their pro rata portion of each stripped U.S. treasury security as a bond that was originally issued on the date the collateral agent acquired the relevant treasury securities and that has original issue discount equal to their pro rata portion of the excess of the amounts payable on such treasury securities over the value of the treasury securities at the time the collateral agent acquires them on behalf of U.S. holders. U.S. holders will be required to include such original issue discount (but not acquisition discount on short-term treasury securities as described below) in income for U.S. federal income tax purposes as it accrues on a constant yield to maturity basis, regardless of their regular method of tax accounting. To the extent that a payment from the treasury securities made in respect of a scheduled interest payment on a remarketed or tax event redeemed senior note exceeds the amount of such original issue discount allocable to such treasury securities, such payment will be treated as a return of a U.S. holder's investment in the treasury securities and will not be considered current income for U.S. federal income tax purposes.

In the case of any treasury security with a maturity of one year or less from the date of its issue (or from the date the collateral agent acquired the relevant treasury security in the case of any stripped treasury security), U.S. holders will generally be required to include acquisition discount in income as it accrues only if they are accrual basis taxpayers. U.S. holders that are accrual basis taxpayers will generally accrue such acquisition discount on a straight-line basis, unless they make an election to accrue such acquisition discount on a constant yield to maturity basis.

Tax Basis of U.S. Holders in their Share of Treasury Securities. The initial tax basis of U.S. holders in their share of treasury securities will equal their pro rata portion of the amount paid by the collateral agent for the treasury securities. A U.S. holder's adjusted tax basis in its share of the treasury securities will be increased by the amount of original issue discount included in income with respect thereto and decreased by the amount of cash received in respect of its share of the treasury securities.

Sales, Exchanges or Other Dispositions of a U.S. Holder's Share of Treasury Securities. U.S. holders that obtain the release of their share of the treasury securities and subsequently dispose of such interest will recognize gain or loss on such disposition in an amount equal to the difference between the amount realized upon such disposition and such U.S. holders' adjusted tax basis in the treasury securities, except that amounts received with respect to accrued but unpaid interest on treasury securities will not be treated as part of the amount realized, but rather, will be treated as ordinary interest income to the extent not previously taken into income.

Non-United States Holders

The following discussion only applies to non-U.S. holders. A "non-U.S. holder" is a holder that is not a U.S. person for U.S. federal income tax purposes. Non-U.S. holders that may be subject to

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special rules, such as "controlled foreign corporations," "passive foreign investment companies" or "foreign personal holding companies" should consult their own tax advisors to determine the U.S. federal, state and local foreign tax consequences that may be relevant to them in their particular circumstances. This discussion assumes, as noted above, that for United States federal income tax purposes, the purchase contracts and the senior notes will be respected as separate securities and the senior notes will be classified as indebtedness. In addition, Platinum Holdings and Platinum Finance (under the terms of the senior notes) and each non-U.S. holder (by acquiring an ownership interest in the senior notes) agree to treat the senior notes as indebtedness of Platinum Finance for all tax purposes. If the senior notes were nonetheless recharacterized, depending on the nature of the recharacterization, payments under the senior notes could become subject to United States withholding at a 30% rate, unless reduced by treaty.

United States Federal Withholding Tax. The 30% United States federal withholding tax will not apply to any payment of principal or interest (including original issue discount) on the ownership interest in the senior notes or treasury securities provided that the non-U.S. holder:

•: does not actually (or constructively) own 10% or more of the total combined voting power of all classes of stock of Platinum Finance entitled to vote;
•: is not a controlled foreign corporation that is related to Platinum Finance through stock ownership;
•: is not a bank whose receipt of interest on the senior notes or treasury securities is described in section 881(c)(3)(A) of the Code; and
•: provides its name and address on IRS Form W-8BEN (or other applicable form), and certifies, under penalties of perjury, that it is not a United States person, or (b) if normal units, stripped units, senior notes or treasury securities are held through certain foreign intermediaries or foreign partnerships, satisfies the certification requirements of applicable U.S. Treasury regulations.

The 30% U.S. federal withholding tax will not apply to any contract adjustment payments, dividends paid on the Common Shares acquired under a purchase contract or any gain realized on the sale, exchange, or other disposition of normal units, stripped units, treasury securities, senior notes and Platinum Holdings' Common Shares acquired under the purchase contract. However, interest income including original issue discount and any gain treated as ordinary income realized on the sale, exchange or other disposition of a senior note will be subject to withholding in certain circumstances unless the conditions described above are met.

United States Federal Income Tax. If a non-U.S. holder is engaged in a trade or business in the United States and interest (including original issue discount) on the ownership interest in the senior notes or treasury securities, dividends on Platinum Holdings' Common Shares, or to the extent they constitute taxable income, contract adjustment payments from the purchase contracts are effectively connected with the conduct of that trade or business, such holder will be subject to United States federal income tax on the interest, dividends or contract adjustment payments on a net income basis (although exempt from the 30% withholding tax, if otherwise applicable), in the same manner as if the holder were a U.S. person as defined under the Code. The non-U.S. holder must satisfy certain certification and disclosure requirements in order to establish its exemption from withholding with respect to interest on the ownership interest in the senior notes or treasury securities that is effectively connected income. In addition, a non-U.S. holder that is a foreign corporation may be subject to a branch profits tax equal to 30% (or lower applicable treaty rate) of its earnings and profits for the taxable year, subject to adjustments, that are effectively connected with the conduct by the holder of a trade or business in the United States. For this purpose, interest on the ownership interest in the senior notes or treasury securities, dividends on the Common

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Shares and, to the extent they constitute taxable income, the contract adjustment payments from the purchase contracts will be included in earnings and profits.

Any gain realized on the disposition of a treasury security, an ownership interest in a senior note (to the extent not treated as interest income under the contingent payment debt rules), purchase contract or the Common Shares generally will not be subject to United States federal income tax unless:

•: that gain is effectively connected with the conduct of a trade or business by the non-U.S. holder in the United States; or
•: the non-U.S. holder is an individual who is present in the United States for 183 days or more in the taxable year of that disposition, and certain other condition are met.

Backup Withholding Tax and Information Reporting

U.S. Holders. Unless a U.S. holder is an exempt recipient, such as a corporation, payments with respect to units, senior notes, purchase contracts, treasury securities or the Common Shares, the proceeds received with respect to a fractional Common Share upon the settlement of a purchase contract, and the proceeds received from the sale of units, ownership interests in senior notes, purchase contracts, treasury securities or the Common Shares, may be subject to information reporting and may also be subject to U.S. federal backup withholding tax if such U.S. holder fails to supply accurate taxpayer identification numbers or otherwise fails to comply with applicable U.S. information reporting or certification requirements. The U.S. federal backup withholding tax rate for 2002 is 30% (scheduled to be reduced gradually to 28% by the year 2006). Any amounts so withheld generally will be allowed as a credit against the U.S. holder's U.S. federal income tax liability.

Non-U.S. Holders. In general, the amount of interest paid to a non-U.S. holder and the tax withheld with respect to such interest must be reported annually to the IRS and the holder. In general, no backup withholding will be required regarding payments of interest to a non-U.S. holder on ownership interests in senior notes or treasury securities provided that we do not have actual knowledge or reason to know that the holder is a United States person and the holder has satisfied the certification requirements described above under "Non-United States Holders—United States Federal Withholding Tax."

In addition, no information reporting or backup withholding will be required regarding (i) dividend payments or contract adjustment payments made within the United States or (ii) the proceeds of the sale of normal units, stripped units, ownership interests in senior notes, treasury securities, or Platinum Holdings' Common Shares made within the United States or conducted through certain United States financial intermediaries if, in each case:

•: the payor receives the required certification with respect to the non-U.S. holder and does not have actual knowledge or reason to know that the holder is a United States person; or
•: the holder otherwise establishes an exemption.

Backup withholding may apply if the non-U.S. holder fails to comply with applicable U.S. information reporting or certification requirements.

Any amounts withheld under the backup withholding rules will be allowed as a refund or a credit against the non-U.S. holder's United States federal income tax liability provided the required information is furnished to the IRS.

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ERISA CONSIDERATIONS

The following is a summary of certain considerations associated with the acquisition, holding and disposition of units (and the securities underlying such units) by employee benefit plans that are subject to Title I of the U.S. Employee Retirement Income Security Act of 1974, as amended ("ERISA"), plans, individual retirement accounts and other arrangements that are subject to Section 4975 of the Code or provisions under any federal, state, local, non-U.S. or other laws or regulations that are similar to such provisions of the Code or ERISA (collectively, "similar laws"), and entities whose underlying assets are considered to include "plan assets" of such plans, accounts and arrangements (each, a "plan").

This summary is based on the provisions of ERISA and the Code (and the related regulations and administrative and judicial interpretations) as of the date hereof. This summary does not purport to be complete, and no assurance can be given that future legislation, court decisions, administrative regulations, rulings or administrative pronouncements will not significantly modify the requirements summarized herein. Any such changes may be retroactive and may thereby apply to transactions entered into prior to the date of their enactment or release.

General Fiduciary Matters

ERISA and the Code impose certain duties on persons who are fiduciaries of a plan subject to Title I of ERISA or Section 4975 of the Code and prohibit certain transactions involving the assets of a plan and its fiduciaries or other interested parties. Under ERISA and the Code, any person who exercises any discretionary authority or control over the administration of such a plan or the management or disposition of the assets of such a plan, or who renders investment advice for a fee or other compensation to such a plan, is generally considered to be a fiduciary of the plan. Plans may purchase units (and the securities underlying such units) subject to the investing fiduciary's determination that the investment satisfies ERISA's fiduciary standards and other requirements under ERISA, the Code or similar laws applicable to investments by the plan.

In considering an investment in units using a portion of the assets of any plan, a fiduciary should determine whether the investment is in accordance with the documents and instruments governing the plan and the applicable provisions of ERISA, the Code or any similar law relating to a fiduciary's duties to the plan including, without limitation, the prudence, diversification, liquidity, exclusive benefit, delegation and prohibited transaction provisions of ERISA, the Code and any other applicable similar laws.

Any insurance company proposing to invest assets of its general account in the securities should consider the extent that such investment would be subject to the requirements of ERISA in light of the U.S. Supreme Court's decision in John Hancock Mutual Life Insurance Co. v. Harris Trust and Savings Bank, 114 S.Ct. 517 (1993), which in certain circumstances treats those general account assets as assets of a plan for purposes of the fiduciary responsibility provisions of ERISA and the prohibited transaction rules of ERISA and the Code. In addition, such potential investor should consider the effect of any subsequent legislation or other guidance that has or may become available relating to that decision, including Section 401(c) of ERISA and the regulations promulgated thereunder.

Prohibited Transaction Issues

Section 406 of ERISA and Section 4975 of the Code prohibit plans subject to Title I of ERISA or Section 4975 of the Code from engaging in specified transactions involving plan assets with persons or entities who are "parties in interest," within the meaning of ERISA, or "disqualified persons," within the meaning of Section 4975 of the Code, unless an exemption is available. A party in interest or disqualified person who engages in a non-exempt prohibited transaction may be

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subject to excise taxes and other penalties and liabilities under ERISA and the Code. In addition, the fiduciary of the plan that engages in such a non-exempt prohibited transaction may be subject to penalties and liabilities under ERISA and the Code.

If the units are purchased by a plan, the units (and the securities underlying such units) will be deemed to constitute "plan assets" and the acquisition, holding and disposition of the units (and the securities underlying such units) may constitute or result in a direct or indirect prohibited transaction under Section 406 of ERISA and/or Section 4975 of the Code, if Platinum Holdings, Platinum Finance, or any subsequent seller, is a party in interest or disqualified person with respect to such plan, unless an exemption is available. In this regard, the U.S. Department of Labor has issued prohibited transaction class exemptions, or "PTCEs," that may apply to these transactions. These class exemptions include, without limitation, PTCE 84-14 respecting transactions determined by independent qualified professional asset managers, PTCE 90-1 respecting insurance company pooled separate accounts, PTCE 91-38 respecting bank collective investment funds, PTCE 95-60 respecting life insurance company general accounts, and PTCE 96-23 respecting transactions determined by in-house asset managers. Each of these PTCEs contains conditions and limitations on its application. Fiduciaries of plans which consider purchasing units (and the securities underlying such units) in reliance on any of these or any other PTCEs should carefully review such PTCE to assure it is applicable.

Accordingly, by its purchase of the units (and the securities underlying such units), each holder, and the fiduciary of any plan that is a holder, will be deemed to have represented and warranted on each day from and including the date of its purchase of the units (and the securities underlying such units) through and including the date of satisfaction of its obligation under the purchase contract and the disposition of any such unit (and any security underlying such unit) either (i) that it is not a plan or (ii) that the acquisition, holding and the disposition of any unit (and any security underlying such unit) by such holder does not and will not constitute a prohibited transaction under ERISA or Section 4975 of the Code or other similar laws because an exemption (which, in the case of a plan subject to ERISA or the Code, shall be a PTCE) is available with respect to such transactions and the conditions of such exemption have been satisfied.

In addition, each plan that is a holder and the fiduciary of such plan will be deemed to have represented and warranted to Platinum Holdings, Platinum Finance and the remarketing agent that such participation in the remarketing program will not constitute or result in a prohibited transaction under ERISA or Section 4975 of the Code or other similar laws for which an exemption is not available.

The foregoing discussion is general in nature and is not intended to be all-inclusive. Each plan should consult its own ERISA and tax advisors and/or counsel regarding the consequences of an investment in the units (and the securities underlying such units).

The sale of units (and the securities underlying such units) shall not be deemed a representation by Platinum Holdings or Platinum Finance that the investment meets all relevant legal requirements with respect to plans generally or any particular plan or that such an investment is appropriate for plans generally or any particular plan.

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UNDERWRITING

Platinum Holdings, Platinum Finance and the underwriters named below have entered into an underwriting agreement with respect to the units being offered. Subject to certain conditions, each underwriter has severally agreed to purchase the number of units set forth in the following table.

Underwriters		Number of Units
Goldman, Sachs & Co.




	Total	5,000,000

The underwriters are committed to take and pay for all of the units being offered, if any are taken, other than the units covered by the option described below unless and until this option is exercised.

The completion of the ESU Offering is conditioned upon the consummation of the concurrent Equity Public Offering of Platinum Holdings' Common Shares.

If the underwriters sell more units than the total number set forth in the table above, the underwriters have an option to buy up to an additional 750,000 units from Platinum Holdings to cover such sales. The underwriters may exercise that option within 13 days from the date of this prospectus. If any units are purchased pursuant to this option, the underwriters will severally purchase units in approximately the same proportions as set forth above.

The following table shows the per unit and total underwriting discounts and commissions to be paid to the underwriters by Platinum Finance. These amounts are shown assuming both no exercise and full exercise of the underwriters' option to purchase 750,000 additional units.

Paid by Platinum Finance		No Exercise			Full Exercise
Per Unit		$			$
Total		$			$

Units sold by the underwriters to the public will initially be offered at the initial public offering price set forth on the cover of this prospectus. Any units sold by the underwriters to securities dealers may be sold at a discount from the initial public offering price of up to $ per unit from the initial public offering price. Any such securities dealers may resell any units purchased from the underwriters to certain other brokers or dealers at a discount from the initial public offering price of up to $ per unit from the initial public offering price. If all the units are not sold at the initial public offering price, the underwriters may change the offering price and the other selling terms.

The units are a new issue of securities with no established trading market. Platinum Holdings has been advised by the underwriters that the underwriters presently intend to make a market in the units but they are not obligated to do so and may discontinue market making at any time without notice. No assurance can be given as to the liquidity of the trading market for the units.

Platinum Holdings and Platinum Finance have agreed with the underwriters not to dispose of or hedge any units, purchase contracts, senior notes or Platinum Holdings' Common Shares (other than the Common Shares to be offered and sold in the concurrent Equity Public Offering and St. Paul Investment) or securities convertible into or exchangeable for purchase contracts, units, senior notes or Platinum Holdings' Common Shares (other than the units offered in this offering) during the period from the date of this prospectus continuing through the date that is 180 days after the

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date of this prospectus, without the prior written consent of Goldman, Sachs & Co. This agreement does not apply to any issuance by Platinum Holdings under existing employee benefit plans. See "Shares Eligible for Future Sale" for a discussion of certain transfer restrictions.

Prior to the ESU Offering and the concurrent Equity Public Offering, there has been no public market for the units or Platinum Holdings' Common Shares. The annual rate of the contact adjustment payments, the reference price and threshold appreciation price of the purchase contracts and the initial annual interest rate on the senior notes included in the units will be negotiated among Platinum Holdings, Platinum Finance and the representatives of the underwriters. Among the factors to be considered in determining these terms of the units, in addition to prevailing market conditions, will be the initial public offering price of Platinum Holdings' Common Shares set in the concurrent Equity Public Offering, Platinum Holdings' historical performance, estimates of Platinum Holdings' business potential and earnings prospects, an assessment of Platinum Holdings' management and the consideration of the above factors in relation to market valuation of companies in related businesses.

Platinum Holdings has applied to list the normal units on the New York Stock Exchange under the symbol "PTP Pr M".

In connection with the ESU Offering, the underwriters may purchase and sell units in the open market. These transactions may include short sales, stabilizing transactions and purchases to cover positions created by short sales. Short sales involve the sale by the underwriters of a greater number of units than they are required to purchase in the ESU Offering. "Covered" short sales are sales made in an amount not greater than the underwriters' options to purchase additional units from Platinum Holdings in the ESU Offering. The underwriters may close out any covered short position by either exercising their option to purchase additional units or purchasing units in the open market. In determining the source of units to close out the covered short position, the underwriters will consider, among other things, the price of units available for purchase in the open market as compared to the price at which they may purchase units through their option to purchase additional units from Platinum Holdings. "Naked" short sales are any sales in excess of such option. The underwriters must close out any naked short position by purchasing units in the open market. A naked short position is more likely to be created if the underwriters are concerned that there may be downward pressure on the price of the units in the open market after pricing that could adversely affect investors who purchase in the ESU Offering. Stabilizing transactions consist of various bids for or purchases of units made by the underwriters in the open market prior to the completion of the ESU Offering.

The underwriters also may impose a penalty bid. This occurs when a particular underwriter repays to the underwriters a portion of the underwriting discount received by it because the representatives have repurchased units sold by or for the account of such underwriter in stabilizing or short covering transactions.

Purchases to cover a short position and stabilizing transactions may have the effect of preventing or retarding a decline in the market price of the units, and together with the imposition of the penalty bid, may stabilize, maintain or otherwise affect the market price of the units. As a result, the price of the units may be higher than the price that otherwise might exist in the open market. If these activities are commenced, they may be discontinued at any time. These transactions may be effected on the New York Stock Exchange, in the over-the-counter market or otherwise.

Each underwriter has represented, warranted and agreed that (i) it has not offered or sold and, prior to the expiry of a period of six months after the date of issue of the units, will not offer or sell any units to persons in the United Kingdom, except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances that have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of

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Securities Regulations 1995; (ii) it has only communicated or caused to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act of 2000 (the "FSMA")) received by it in connection with the issue or sale of any units in circumstances in which section 21(1) of the FSMA does not apply to Platinum Holdings; and (iii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the units in, from or otherwise involving the United Kingdom.

The units may not be offered, sold, transferred or delivered in or from The Netherlands, as part of their initial distribution or as part of any re-offering, and neither this prospectus nor any other document in respect of the ESU Offering may be distributed or circulated in The Netherlands, other than to individuals or legal entities which include, but are not limited to, banks, brokers, dealers, institutional investors and undertakings with a treasury department, who or which trade or invest in securities in the conduct of a business or profession.

A prospectus in electronic format will be made available on the websites maintained by one or more of the lead managers of this offering and may also be made available on websites maintained by other underwriters. The underwriters may agree to allocate a number of units to underwriters for sale to their online brokerage account holders. Internet distributions will be allocated by the lead managers to underwriters that may make Internet distributions on the same basis as other allocations.

Platinum Holdings and Platinum Finance have agreed to indemnify the several underwriters against certain liabilities, including liabilities under the 1933 Act.

The underwriters do not expect sales to discretionary accounts to exceed five percent of the total number of units offered.

Platinum Finance and Platinum Holdings estimate that their share of the total expenses of the ESU Offering, excluding underwriting discounts and commissions, will be approximately $ .

Several of the underwriters and their affiliates have provided from time to time, and expect to provide in the future, investment and commercial banking and financial advisory services to Platinum Holdings, Platinum Finance, St. Paul and their respective affiliates in the ordinary course of business, for which they have received and may continue to receive customary fees and commissions. The lead managing underwriter, Goldman, Sachs & Co., is currently acting as lead managing underwriter of the concurrent Equity Public Offering.

To a limited extent, St. Paul has agreed to pay certain indemnification obligations of Platinum Holdings and Platinum Finance to the underwriters if Platinum Holdings or Platinum Finance fail to pay in specified circumstances.

VALIDITY OF THE SECURITIES

The validity of the purchase contracts, the Common Shares issuable upon their settlement and the guarantee under Bermuda law will be passed upon for Platinum Holdings by Conyers, Dill & Pearman, Hamilton, Bermuda. The validity of the purchase contracts, the senior notes and the guarantee will be passed upon for Platinum Holdings and Platinum Finance by Sullivan & Cromwell and for the underwriters by Fried, Frank, Harris, Shriver & Jacobson (a partnership including professional corporations), New York, New York, in each case in reliance on the opinion of Conyers, Dill & Pearman with respect to Bermuda law. Sullivan & Cromwell is also advising St. Paul, the sponsor of Platinum Holdings, in connection with the establishment of Platinum Holdings. Furthermore, Platinum Holdings is being advised as to certain matters in connection with its organization and the Equity Public Offering by Sullivan & Cromwell. Dewey Ballantine LLP has advised Platinum Holdings and Platinum Finance regarding certain matters, including agreements between Platinum Holdings and its affiliates and St. Paul and its affiliates.

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EXPERTS

The consolidated balance sheet of Platinum Underwriters Holdings, Ltd. and the combined statements of identifiable underwriting assets and liabilities, underwriting results, identifiable underwriting cash flows and combined financial statement schedules of The St. Paul Companies, Inc. Reinsurance Underwriting Segment (Predecessor) included in the Registration Statement have been audited by KPMG LLP, independent auditors, as set forth in their reports appearing herein. The statements and combined financial statement schedules referred to above are included in reliance upon such reports of KPMG LLP, given upon the authority of such firm as experts in accounting and auditing. The audit report covering Predecessor's December 31, 2001, 2000 and 1999 combined statements contains an explanatory paragraph that states that the combined statements are not intended to be a complete presentation of Predecessor's or St. Paul's financial position, results of operations, or cash flows.

AVAILABLE INFORMATION

Upon completion of this offering, we will file annual, quarterly and current reports, proxy statements and other information with the SEC. You may read and copy any documents filed by us at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. Our SEC filings will also be available over the internet at the SEC's website at http://www.sec.gov. We intend to list the Common Shares on the NYSE. Upon listing, periodic reports, proxy statements and other information concerning Platinum Holdings will be available for review at the New York Stock Exchange, Inc., 20 Broad Street, New York, New York 10005. After the completion of the Equity Public Offering, we expect to provide annual reports to our shareholders that include financial information reported on by our independent public accountants and quarterly reports containing unaudited interim financial information for the first three fiscal quarters of each fiscal year.

We have filed a registration statement on Form S-1 with the SEC (File No. 333- ). This prospectus is a part of the registration statement and does not contain all of the information in the registration statement. Whenever a reference is made in this prospectus to one of our contracts or other documents, please be aware that the reference is not necessarily complete and that you should refer to the exhibits that are a part of the registration statement for a copy of the contract or other document. You may review a copy of the registration statement at the SEC's public reference room in Washington, D.C. as well as through the SEC's internet site.

ENFORCEABILITY OF CIVIL LIABILITIES UNDER UNITED STATES FEDERAL SECURITIES LAWS AND OTHER MATTERS

Platinum Holdings is a Bermuda company, and certain of its officers and directors are or will be residents of various jurisdictions outside the United States. A substantial portion of the assets of Platinum Holdings and of such officers and directors, at any one time, are or may be located in jurisdictions outside the United States. In particular, Platinum Bermuda is also a Bermuda corporation. Therefore, it ordinarily could be difficult for investors to effect service of process within the United States on Platinum Holdings or any of these officers and directors who reside outside the United States or to recover against Platinum Holdings or any such individuals on judgments of courts in the United States, including judgments predicated upon civil liability under the U.S. federal securities laws. Notwithstanding the foregoing, Platinum Holdings has irrevocably agreed that it may be served with process with respect to actions against us arising out of violations of the U.S. federal securities laws in any federal or state court in the U.S. relating to the transactions covered by this prospectus by serving CT Corporation System, 1633 Broadway, 30th Floor, New York, New York 10019, telephone 1-800-624-0909, its United States agent appointed for that purpose. Nevertheless, it may be difficult for you to effect service of process within the United States upon Platinum

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Holdings' directors, officers and experts who reside outside the United States or to enforce in the United States judgments of U.S. courts obtained in actions against Platinum Holdings or its directors and officers, as well as the experts named in this document, who reside outside the United States. Platinum Holdings has been advised by Conyers, Dill & Pearman, its Bermuda counsel, that there is doubt as to whether the courts of Bermuda would enforce (1) judgments of U.S. courts obtained in actions against such persons or Platinum Holdings predicated upon the civil liability provisions of the U.S. federal securities laws and (2) original actions brought in Bermuda against such persons or Platinum Holdings predicated solely upon U.S. federal securities laws. There is no treaty in effect between the United States and Bermuda providing for such enforcement, and there are grounds upon which Bermuda courts may not enforce judgments of U.S. courts. Certain remedies available under the laws of U.S. jurisdictions, including certain remedies available under the U.S. federal securities laws, would not be allowed in Bermuda courts as contrary to Bermuda's public policy.

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THE PREDECESSOR BUSINESS

We present below selected historical combined financial data of St. Paul Re. Our pro forma underwriting results presented under "Management's Discussion and Analysis of Pro Forma Financial Condition and Underwriting Results" in this prospectus show that our 2001 net premiums written, as adjusted for the business not transferred and the exclusion of the St. Paul corporate aggregate excess-of-loss reinsurance program, represent approximately 82% of St. Paul Re's net premiums written for the same period. Also, we are assuming no premium or loss development on business entered into prior to January 1, 2002. Accordingly, we caution that St. Paul Re's underwriting results and St. Paul Re's combined statements presented in this prospectus are not indicative of the actual results that we will achieve once we commence operations. For a detailed discussion of our pro forma combined statements of underwriting results, see "Pro Forma Financial Information".

In addition to the effect of the non-transfer of certain portions of St. Paul Re's business to us and the exclusion of the St. Paul corporate aggregate excess-of-loss reinsurance program, other factors may cause our actual results to differ materially from St. Paul Re's results. For example, although we continue to be afforded the benefits of St. Paul Re's retrocessional program for the remainder of 2002, we may enter into reinsurance contracts with significantly different terms and conditions from those that have been made available to St. Paul Re from St. Paul and which form the basis of St. Paul Re's results. Furthermore, the additional premiums recorded in 2001 by St. Paul Re's finite risk business primarily associated with the September 11, 2001 terrorist attack were exceedingly high and not necessarily indicative of the recurring premium volume we expect to write in that business segment. In addition, St. Paul Re's combined statements reflect the discounting of the liability for certain assumed reinsurance contracts using rates up to 7.5%, based on its return on invested assets or, in many cases, on yields contractually guaranteed to it on funds held by the ceding company, as permitted by the state of domicile of a company included in St. Paul Re. It is our current intention to make arrangements to permit such discounting to a similar extent as St. Paul Re, which may include the organization and licensing of a U.S. subsidiary in addition to Platinum U.S. If arrangements permitting us to discount reserves to the same extent as St. Paul Re are not made, reinsurance contracts of a similar type entered into in the future would be reported on an undiscounted basis.

As further discussed in the Notes under "Pro Forma Combined Statements of Underwriting Results for the six months ended June 30, 2002 and 2001, and the year ended December 31, 2001", the following table illustrates the difference between Platinum's pro forma financial information and St. Paul Re's for the year ended December 31, 2001.

	Year Ended December 31, 2001
	Historical St. Paul Re			Pro Forma Platinum
	($ in millions)
Net premiums earned	$	1,593		$	1,302
Underwriting losses and expenses
Losses and loss adjustment expenses		1,922			1,440
Underwriting expenses		397			300

Total underwriting losses and expenses		2,319			1,740

Underwriting gain (loss)	$	(726	)	$	(438	)

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Selected Combined Financial Data

Five-year Summary of St. Paul Re Selected Combined Financial Data

		Six Months Ended June 30,
		2002			2001			2001			2000			1999			1998			1997
		($ in millions)
Net premiums written		$	663		$	701		$	1,677		$	1,073		$	913		$	1,017		$	1,155
Net premiums earned			682			600			1,593			1,121			878			1,003			1,198
Losses and loss adjustment expenses			460			426			1,922			811			500			658			819
Underwriting expenses			213			230			397			424			302			341			379

Underwriting gain (loss)		$	9		$	(56)		$	(726	)	$	(114	)	$	76		$	4		$	—

Statutory combined ratio:
	Loss and loss expense ratio		67.4	%		71.0	%		120.6	%		72.3	%		57.0	%		65.6	%		68.4	%
	Underwriting expense ratio		29.2	%		36.5	%		25.1	%		39.7	%		35.1	%		33.3	%		31.1	%

	Combined ratio		96.6	%		107.5	%		145.7	%		112.0	%		92.1	%		98.9	%		99.5	%

	Adjusted combined ratio*		93.1	%		116.2	%		117.6	%		120.4	%		109.2	%		98.9	%		99.5	%

	Impact of catastrophes on combined ratio**		(1.5)	%		2.7	%		40.4	%		12.0	%		16.3	%		8.6	%		0.3	%

*: For purposes of meaningful comparison, adjusted combined ratios in 1999 - 2001 exclude the impact of the reinsurance treaties described in Note 8 to the combined statements, and in 2001, the impact of the September 11, 2001 terrorist attack.
**: Excludes ceded losses under the St. Paul corporate aggregate excess-of-loss reinsurance program and St. Paul Re's aggregate excess-of-loss treaties.

Recent Developments

As discussed below, St. Paul Re was not affected by catastrophes in the first six months of 2002. However, in August 2002, heavy rains and flooding caused substantial loss of life and property in parts of Europe. Based on preliminary information available to it, and applying customary actuarial techniques applicable to catastrophe events, St. Paul Re has incurred estimated losses of $ million in respect of this event as of , 2002. St. Paul Re and after the completion of the Equity Public Offering, Platinum, will revise this estimate if additional information suggests that such action is appropriate. Total catastrophe losses to date in 2002 have been lower than management's expectations.

Management's Discussion and Analysis of Financial Condition and
Underwriting Results of the Predecessor Business

The following discussion and analysis pertains to the operating results of the Reinsurance underwriting segment of St. Paul, for the years ended December 31, 2001, 2000 and 1999, and for the six-month periods ended June 30, 2002 and 2001. This discussion and analysis should be read in conjunction with St. Paul Re's combined statements and related notes found on pages F-13 to F-28, because they contain important information that is helpful in evaluating St. Paul Re's operating results and financial condition.

St. Paul Re's operations include the underwriting results of certain insurance and reinsurance subsidiaries in St. Paul's group of companies, as well as the underwriting results of the reinsurance departments of St. Paul Fire and Marine Insurance Company, and United States Fidelity and

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Guaranty Company ("USF&G"), St. Paul's two largest U.S. insurance subsidiaries. The financial results reported herein for St. Paul Re reconcile to St. Paul's reinsurance segment results reported in St. Paul's audited consolidated financial statements for each year in the three-year period ended December 31, 2001, which are included in St. Paul's 2001 Annual Report to Shareholders, and in St. Paul's June 30, 2002 Quarterly Report on Form 10-Q (unaudited).

It is the practice of St. Paul to evaluate the performance of its property-casualty insurance underwriting segments on the basis of underwriting results. Therefore, this discussion focuses on each segment's performance based on underwriting results. St. Paul does not allocate assets or investment income to its respective underwriting segments, and therefore, neither assets nor surplus are specifically identifiable for St. Paul Re. As a result, the following discussion and analysis focuses almost exclusively on those factors influencing underwriting performance for each of St. Paul Re's four business segments. Those segments, whose results are analyzed in more detail later in this discussion, are as follows: North American Casualty, North American Property, International, and Finite Risk.

In the years prior to 2002, St. Paul Re generally underwrote traditional treaty and facultative reinsurance for property, casualty, ocean marine, surety, accident and health and certain specialty classes of coverage for leading property and casualty insurance companies worldwide. St. Paul Re also underwrote certain types of "non-traditional" reinsurance, which provides limited traditional underwriting risk combined with financial risk protection. In late 2001, St. Paul announced a series of actions designed to improve its profitability, including plans to narrow the product offering and geographic presence of its reinsurance operations. As a result, in January 2002, St. Paul Re began focusing almost exclusively on the following types of reinsurance coverages: property catastrophe, excess-of-loss casualty, marine and traditional finite.

Critical Accounting Policies

St. Paul Re's significant accounting policies are described in the notes to St. Paul's Reinsurance Underwriting Segment (Predecessor)'s Combined Statements. The following is a summary of the critical accounting policies that affected the components comprising St. Paul Re's underwriting performance: premiums, reserves and reinsurance.

Premiums

Premiums were recorded at the inception of each policy, based upon information received from ceding companies and their brokers. For excess-of-loss contracts, the amount of premium was usually contractually documented at inception, and no management judgment was necessary in accounting for this. Premiums were earned on a pro rata basis over the contract period. For proportional treaties, the amount of premium was normally estimated at inception by the ceding company. St. Paul Re accounted for such premium using the initial estimates, and then adjusted them once a sufficient period for actual premium reporting had elapsed, normally around three years. For the year ended December 31, 2001 the net amount of premium written resulting from estimate accruals was less than 25% of total premiums written. St. Paul Re also accrued for reinstatement premiums resulting from losses. Such accruals were based upon actual contractual terms, and the only element of management judgment involved was with respect to the amount of loss reserves, as described below.

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initial policy term, and are earned over the remaining policy term. Additional premiums are premiums charged after coverage has expired, related to experience during the policy term, which are earned immediately.

Reserves

Under U.S. GAAP, St. Paul Re was not permitted to establish loss reserves until the occurrence of an event which may give rise to a loss. Once such an event occurred, St. Paul Re established reserves based upon estimates of total losses incurred by the ceding insurers as a result of the event and St. Paul Re's estimate of the portion of such loss it has reinsured. As a result, only loss reserves applicable to losses incurred up to the reporting date may be set aside, with no allowance for the provision of a contingency reserve to account for expected future losses. Losses arising from future events will be estimated and recognized at the time the loss is incurred and could be substantial.

Setting appropriate reserves is an inherently uncertain process. Loss reserves represent St. Paul Re's estimates, at a given point in time, of ultimate settlement and adjustment costs of losses incurred (including IBNR losses). St. Paul Re regularly reviewed and updated these estimates, using the most current information available. Consequently, the ultimate liability for a loss was likely to differ from the original estimate. Whenever St. Paul Re determined that any existing loss reserves were inadequate, St. Paul Re was required to record such change in estimate; increasing the loss reserves with a corresponding negative impact, which could be material, in St. Paul Re's underwriting results in the period in which the deficiency was identified. The establishment of new reserves, or the adjustment of reserves for reported claims, could result in significant upward or downward changes to St. Paul Re's financial condition or results of underwriting in any particular period.

The reserve for losses and loss adjustment expenses was based upon reports, individual case estimates received from ceding companies, and management's estimates. St. Paul Re management's estimates were used mostly to estimate IBNR loss amounts. For certain catastrophic events, there was considerable uncertainty underlying the assumptions and associated estimated reserves for losses and loss adjustment expenses. Reserves were reviewed regularly and, as experience developed and additional information became known, the reserves were adjusted as necessary. Such changes in estimate, if necessary, were reflected in results of operations in the current period.

Liabilities for unpaid losses and LAE related to certain assumed reinsurance contracts are discounted to the present value of estimated future payments. The liabilities related to these reinsurance contracts were discounted based on our return on invested assets, or in many cases, on yields contractually guaranteed to us on funds held by the ceding company, as permitted.

Reinsurance

Written premiums, earned premiums, and incurred losses and LAE reflected the net effects of assumed and ceded reinsurance transactions. Reinsurance accounting was followed for assumed and ceded transactions when risk transfer requirements had been met. These requirements involved significant assumptions being made related to the amount and timing of expected cash flows, as well as the interpretation of underlying contract terms. Assumed reinsurance contracts that did not transfer significant insurance risk were required to be accounted for as deposits. These deposits were accounted for as financing transactions, with interest expense credited to the contract deposit. Premiums received on retroactive reinsurance contracts are not reflected in the statement of operations, but rather are recorded in the combined statement of identifiable underwriting assets and liabilities as an increase to loss and loss adjustment expenses reserves for

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the liabilities assumed and as assets based on the consideration received. A deferred charge or credit is recorded for any difference between liabilities assumed and consideration received.

Consolidated Overview

The following table summarizes St. Paul Re's results for the periods presented.

			Six Months Ended June 30,					Year Ended December 31,
			2002		2001			2001			2000			1999
			($ in millions)
Net premiums earned
	Net premiums written		$	663	$	701		$	1,677		$	1,073		$	913
	Change in unearned premiums			19		(101	)		(84	)		48			(35	)

		Net premiums earned		682		600			1,593			1,121			878
Losses and underwriting expenses
	Losses and loss adjustment expenses			460		426			1,922			811			500
	Policy acquisition expenses			178		188			315			336			220
	Other underwriting expenses			35		42			82			88			82

	Total losses and underwriting expenses			673		656			2,319			1,235			802

		Underwriting gain (loss)		9		(56	)	$	(726	)	$	(114	)	$	76

Six Months Ended June 30, 2002 vs. Six Months Ended June 30, 2001

Net premiums written declined $38 million for the six months ended June 30, 2002 compared to the six months ended June 30, 2001. The decrease in net premiums written in 2002 was primarily due to the reduced volume from the lines of business targeted for exit as part of St. Paul's strategic initiative to improve profitability. In addition, the rescission of a large quota share contract in the second quarter of 2002 also contributed to the decrease in volume. The premium decline was partially offset by new business written in the accident and health line of business and by rate increases. Reinsurance rates continued to increase in 2002, primarily in response to the terrorist attack in the United States in September 2001. Rate increases on business renewed on January 1, 2002 averaged approximately 33% across all business segments.

The $65 million improvement in underwriting results reflected the impact of substantial rate increases on 2002 renewals, as well as favorable prior year development on catastrophe losses, absence of current year catastrophe losses and benefits derived from exiting unprofitable lines of business.

Year Ended December 31, 2001 vs. Year Ended December 31, 2000

The 56% increase in net written premiums in 2001 was principally driven by new business growth in the North American Casualty and North American Property segments, additional premiums recorded for prior underwriting years in the North American Casualty segment, and strong price increases in all segments. Price increases continued throughout 2001 in response to the growing demand for reinsurance coverages, and those increases accelerated during the fourth quarter in the aftermath of the September 11, 2001 terrorist attack. In 2000, net premium growth was driven by new business opportunities in the non-traditional reinsurance market and price increases across virtually all lines of traditional reinsurance coverage.

Underwriting results in 2001 were dominated by losses resulting from the terrorist attack, which totaled $556 million. Excluding those losses, underwriting results in 2001 were still significantly

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worse than in 2000, with deterioration centered in the North American Casualty and Finite Risk segments. Catastrophe losses (excluding the September 11, 2001 terrorist attack) totaled $92 million in 2001, driven by losses from the explosion of a chemical plant in Toulouse, France and Tropical Storm Allison in the United States. Catastrophe losses in 2000 totaled $135 million and were primarily the result of additional loss development from European storms occurring near the end of 1999.

The deterioration in 2000 underwriting results compared with 1999 was due to significant adverse loss development from years prior to 2000, including development from the European storms at the end of 1999. Adverse prior-year loss development on retrocessional business written in St. Paul Re's London operations also played a significant role in 2000's underwriting loss. In addition, the North American treaty casualty business accounted for $131 million of underwriting losses in 2000.

Retrocessional Reinsurance

St. Paul Re's underwriting results for 2001, 2000 and 1999 reflect the benefits of its retrocessional reinsurance program. Under this program, St. Paul Re purchases reinsurance for its own benefit, to limit the effect on its financial condition and operating results of large and multiple losses. Under this program, St. Paul Re ceded the following amounts to reinsurers:

		Six Months Ended June 30,					Year Ended December 31,
		2002			2001		2001		2000		1999
		($ in millions)
Net premiums written		$	39		$	102	$	177	$	254	$	318
Net premiums earned			29			94		172		260		314
Losses and loss adjustment expenses			(28	)		144		396		386		377
Underwriting expenses			4			6		14		13		30

	Net underwriting benefit	$	(53	)	$	56	$	238	$	138	$	93

Included in the above totals were the impacts of the St. Paul corporate aggregate excess-of-loss reinsurance programs that were entered into effective on January 1 of each year except 2002 and St. Paul Re's aggregate excess-of-loss-treaty, a separate aggregate excess-of-loss treaty exclusive to St. Paul Re. St. Paul chose not to have a corporate aggregate excess-of-loss reinsurance program in place in 2002. Coverage under the St. Paul corporate aggregate excess-of-loss reinsurance programs was triggered when incurred insurance losses and loss adjustment expenses spanning all segments of St. Paul's business exceeded accident year attachment loss ratios specified in the treaty. In addition, St. Paul Re's results benefited from St. Paul Re's aggregate excess-of-loss-treaty in each year. These treaties are collectively referred to hereafter as the "reinsurance treaties".

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The following table describes the combined impact of these cessions under the reinsurance treaties on St. Paul Re's results.

			Six Months Ended June 30,						Year Ended December 31,
			2002			2001			2001			2000		1999
			($ in millions)
St. Paul Corporate Aggregate Excess-of-Loss Reinsurance Program:
	Ceded premiums written		$	—		$	2		$	(67	)	$	80	$	89
	Ceded losses and loss adjustment expenses			—			—			(126	)		140		164
	Ceded earned premiums			—			1			(67	)		80		89

		Net pretax benefit (detriment)		—			(1	)		(59	)		60		75

St. Paul Re's Aggregate Excess-of-Loss Treaties:
	Ceded premiums written			5			45			119			55		62
	Ceded losses and adjustment expenses			(25	)		102			278			122		150
	Ceded earned premiums			(3	)		43			119			55		62

		Net pretax benefit (detriment)		(22	)		59			159			67		88

Combined Total:
	Ceded premiums written			5			47			52			135		151
	Ceded losses and loss adjustment expenses			(25	)		102			152			262		314
	Ceded earned premiums			(3	)		44			52			135		151

		Net pretax benefit (detriment)		(22	)		58		$	100		$	127	$	163

St. Paul was not party to a corporate all-lines aggregate excess-of-loss treaty in 2002. In 2001, St. Paul did not cede any losses to the St. Paul corporate aggregate excess-of-loss reinsurance program, but did reallocate benefits from its 2000 and 1999 treaties among its business segments, resulting in a detriment to St. Paul Re's reported results for calendar year 2001. This reallocation was necessary to reflect the impact of differences between St. Paul's actual 2001 experience on losses ceded to the St. Paul corporate aggregate excess-of-loss reinsurance program in 2000 and 1999, by segment, and the anticipated experience on those losses in 2000 and 1999, when the initial segment allocation was made. The impact of the 2000 and 1999 St. Paul corporate aggregate excess-of-loss reinsurance program was allocated to St. Paul Re based on St. Paul Re's underwriting results relative to the underwriting results of St. Paul's other underwriting segments.

Net underwriting detriment in the 2002 six-month period was driven by a commutation of a certain portion of the St. Paul Re aggregate excess-of-loss treaty. The commutation of this treaty resulted in a net loss of $14 million. This was done in conjunction with the commutation of similar assumed reinsurance treaties which resulted in a net gain of $10 million. The combined effect of these commutations resulted in a net loss of $4 million.

The combined net pretax benefit (detriment) of the reinsurance treaties was allocated to St. Paul Re's business segments as follows:

	Six Months Ended June 30,					Year Ended December 31,
	2002			2001		2001		2000		1999
	($ in millions)
North American Casualty		(6	)		4	$	13	$	42	$	28
North American Property		(3	)		35		40		49		60
International		(4	)		16		30		36		51
Finite Risk		(9	)		3		17		0		24

Total	$	(22	)	$	58	$	100	$	127	$	163

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September 11, 2001 Terrorist Attack

On September 11, 2001, terrorists hijacked four commercial passenger jets in the United States. Two of the jets were flown into the World Trade Center towers in New York, N.Y., causing their collapse. The third jet was flown into the Pentagon building in Washington, D.C., causing severe damage, and the fourth jet crashed in rural Pennsylvania. This terrorist attack caused significant loss of life and resulted in unprecedented losses for the property and casualty insurance industry. St. Paul Re's estimated net pretax loss incurred as a result of the terrorist attack totaled $556 million in 2001, distributed among business segments as follows:

		Year Ended December 31, 2001
		($ in millions)
North American Property		$	233
North American Casualty			32
International			162
Finite Risk			129

	Total	$	556

St. Paul Re continually evaluated the adequacy of the net loss provision recorded, based on claim experience, collections from its reinsurers, and other factors. In the first six months of 2002, St. Paul Re did not record any additions or reductions to its original estimated loss provision recorded in 2001 for the terrorist attack. Through June 30, 2002, St. Paul Re had made net loss payments totaling $110 million related to the attack since it occurred, of which $107 million were made in the first six months of 2002.

For further information related to the terrorist attack, refer to the Notes to The St. Paul Companies, Inc. Reinsurance Underwriting Segment (Predecessor) Combined Statements beginning on page F-20 of this prospectus.

Elimination of One-Quarter Reporting Lag

In the first quarter of 2000, St. Paul Re eliminated the one-quarter reporting lag for its reinsurance operations based in the United Kingdom ("St. Paul Re-U.K.") in order to report the results of those operations on a current basis. As a result, St. Paul Re's results for 2000 include St. Paul Re-U.K.'s results for the fourth quarter of 1999 and all of 2000. The incremental impact of eliminating the reporting lag, which consists of St. Paul Re-U.K.'s results for the three months ended December 31, 2000, was as follows.

	Year Ended December 31, 2000
	($ in millions)
Net premiums written	$	7
Net premiums earned		51
Underwriting loss		(10	)

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Underwriting Results By Segment

The following table summarizes written premiums, underwriting results, statutory combined ratios and adjusted combined ratios (as described in the footnote to the table) for each of St. Paul Re's business segments for the last three years. These segments are managed in a carefully coordinated fashion with strong elements of centralized control. As a result, management monitors and evaluates the financial performance of these segments principally based on their underwriting results. Following the table are detailed analyses of each segment's results.

		Six Months Ended June 30,						Year Ended December 31,
		2002			2001			2001			2000			1999
		($ in millions)
North American Casualty
	Net premiums written	$	228		$	296		$	667		$	340		$	262
	Net premiums earned		271			261			588			319			245
	Losses and loss adjustment expenses		230			274			584			261			61
	Underwriting expenses		91			96			219			134			109

	Underwriting gain (loss)	$	(50	)	$	(109	)	$	(215	)	$	(76	)	$	75

	Combined ratio		117.9	%		141.4	%		135.4	%		124.9	%		68.8	%
	Adjusted combined ratio*		115.3	%		142.6	%		131.5	%		131.4	%		82.2	%
North American Property
	Net premiums written	$	110		$	75		$	216		$	170		$	207
	Net premiums earned		125			75			216			204			196
	Losses and loss adjustment expenses		74			36			381			133			153
	Underwriting expenses		35			33			67			72			71

	Underwriting gain (loss)	$	16		$	6		$	(232	)	$	(1	)	$	(28	)

	Combined ratio		88.0	%		92.8	%		207.3	%		104.6	%		112.6	%
	Adjusted combined ratio*		85.1	%		127.6	%		116.9	%		122.2	%		134.8	%
International
	Net premiums written	$	174		$	174		$	248		$	145		$	160
	Net premiums earned		120			108			242			188			160
	Incurred losses and loss adjustment expenses		52			25			289			128			102
	Underwriting expenses		28			30			62			70			79

	Underwriting gain (loss)	$	40		$	53		$	(109	)	$	(10	)	$	(21	)

	Combined ratio		62.5	%		45.5	%		143.8	%		111.6	%		114.0	%
	Adjusted combined ratio*		58.9	%		64.0	%		89.5	%		125.0	%		134.7	%
Finite Risk
	Net premiums written	$	151		$	156		$	546		$	418		$	284
	Net premiums earned		166			156			547			410			277
	Incurred losses and loss adjustment expenses		104			91			668			289			184
	Underwriting expenses		59			71			49			148			43

	Underwriting gain (loss)	$	3		$	(6	)	$	(170	)	$	(27	)	$	50

	Combined ratio		97.8	%		106.7	%		131.6	%		106.2	%		85.8	%
	Adjusted combined ratio*		91.8	%		108.3	%		114.2	%		106.2	%		94.9	%

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Total
	Net premiums written		$	663		$	701		$	1,677		$	1,073		$	913
	Net premiums earned			682			600			1,593			1,121			878
	Incurred losses and loss adjustment expenses			460			426			1,922			811			500
	Underwriting expenses			213			230			397			424			302

		Underwriting result	$	9		$	(56	)	$	(726	)	$	(114	)	$	76

	Loss and loss expense ratio			67.4	%		71.0	%		120.6	%		72.3	%		57.0	%
	Underwriting expense ratio			29.2	%		36.5	%		25.1	%		39.7	%		35.1	%

	Combined ratio			96.6	%		107.5	%		145.7	%		112.0	%		92.1	%

	Adjusted combined ratio*			93.1	%		116.2	%		117.6	%		120.4	%		109.2	%

*: For purposes of meaningful comparison, adjusted combined ratios in all periods presented exclude the impact of the reinsurance treaties described before the table and the September 11, 2001 terrorist attack.

Six Months Ended June 30, 2002 vs. Six Months Ended June 30, 2001

Loss Ratio

The loss ratio measures insurance losses and loss adjustment expenses incurred as a percentage of earned premiums.

St. Paul Re's reported loss ratio for the six months ended June 30, 2002 was 67.4%, compared with 71.0% in the same 2001 period. The 3.6 percentage point improvement in the loss ratio was primarily due to rate increases across all segments and the exit of unprofitable lines of business, tempered by deteriorating results in discontinued lines of business (surplus lines, bond and credit).

Expense Ratio

St. Paul Re's reported expense ratio for the six months ended June 30, 2002 was 29.2%, compared with 36.5% in the same period of 2001. The significant improvement in the expense ratio was due to the exiting of unprofitable lines of business.

Year Ended December 31, 2001 vs. Years Ended December 31, 2000 and December 31, 1999

Loss Ratio

St. Paul Re's reported loss ratio in 2001 included a 42.6 percentage point detriment from losses incurred in the terrorist attack. The reported loss ratios in 2001, 2000 and 1999 also included benefits from the reinsurance treaties.

Catastrophe losses totaled $880 million in 2001, of which $788 million was due to the September 11, 2001 terrorist attack. Most of the other $92 million of catastrophe losses were the result of a variety of storms throughout the year in the U.S. and the explosion of a chemical

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manufacturing plant in Toulouse, France. In 2000 and 1999, catastrophe losses totaled $135 million and $143 million, respectively. Additional loss development arising from severe windstorms that struck portions of Europe in late 1999 and severe flooding in the United Kingdom drove the 2000 total. Major events contributing to the 1999 total included Hurricane Floyd, earthquakes in Taiwan and Turkey, and European windstorms.

Expense Ratio

St. Paul Re's reported expense ratio in 2001 included an 8.2 percentage point benefit resulting from a $91 million reduction in contingent commissions that had been accrued prior to September 11, 2001. The magnitude of losses from the terrorist attack resulted in the reversal of that accrual. The reported expense ratios in 2001, 2000 and 1999 included detriments from the reinsurance treaties. No underwriting expenses were ceded under the treaties; however, the expense ratios in all three years included the effects of written premiums ceded under the treaties.

During 2000, St. Paul Re reduced its estimate of ultimate losses on certain non-traditional reinsurance business by $56 million, and made a corresponding increase in its estimate of reserves for contingent commissions by $66 million. Although these changes in estimate did not have a significant impact on underwriting results for the year, they did distort the components of the combined ratio in 2000. Excluding these changes, the loss ratio would have been 89.8%, and the expense ratio would have been 29.8% (both excluding the benefits of the reinsurance treaties).

The following pages provide a more detailed discussion of results for the years ended December 2001, 2000 and 1999 and for the three month and six-month periods ended June 30, 2002 and 2001 produced by St. Paul Re's four business segments. To provide a more meaningful analysis of the underlying performance of St. Paul Re's business segments, the discussion of segment results excludes the impact of the September 11, 2001 terrorist attack in 2001 and the reinsurance treaties in all three years. The impact of the terrorist attack on individual segment results and the impact of the reinsurance treaties were discussed earlier in this prospectus.

North American Casualty

The North American Casualty segment consisted of casualty reinsurance underwritten for customers with exposures in the United States and Canada. In 2001, the following types of casualty coverages were offered: general, workers' compensation, auto, medical professional, non-medical professional, directors and officers, employment practices, surplus lines, umbrella and environmental impairment. This segment also included accident and health reinsurance coverages. As discussed earlier in this prospectus, in 2002, St. Paul narrowed its reinsurance product focus in an effort to improve profitability. As a result, the North American Casualty segment offered the following coverages in the first six months of 2002: general and automobile liability, professional liability, workers' compensation, accident and health coverages and casualty clash. The following

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table summarizes results for this segment for the periods presented, and excludes the impact of the reinsurance treaties and the September 11, 2001 terrorist attack.

	Six Months Ended June 30,						Year Ended December 31,
	2002			2001			2001			2000			1999
	($ in millions)
Net premiums written	$	233		$	296		$	679		$	400		$	288
Percentage increase (decrease) over prior year		(21	)%					70	%		39	%
Underwriting gain (loss)	$	(44	)	$	(113	)	$	(195	)	$	(114	)	$	47
Loss and loss adjustment expense ratio		82.9	%		106.2	%		95.7	%		94.6	%		42.1	%
Underwriting expense ratio		32.4	%		36.4	%		35.8	%		36.8	%		40.1	%

Combined ratio		115.3	%		142.6	%		131.5	%		131.4	%		82.2	%

Six Months Ended June 30, 2002 vs. Six Months Ended June 30, 2001

The $63 million decrease in net premiums written was primarily due to the rescission of a large quota share contract in the second quarter of 2002. The premium volume was also impacted by a decline in premiums resulting from lines of business being exited. Rate increases averaged 29% in the first six months of 2002, and new business written in the accident and health reinsurance market served to partially offset the decline in premiums.

The $69 million reduction in underwriting losses compared with the six months ended June 30, 2001 is attributable to improved rates and risk selection, as well as less unfavorable development in casualty business written in prior years.

2001 vs. 2000

A significant portion of the 70% increase in net written premium volume over 2000 was due to additional premiums recorded on business from the underwriting years 2000 and 1999. St. Paul Re had been conservative in recording estimated premiums from ceding companies in a soft market environment, but as rate increases began to accelerate faster than anticipated, it was determined that estimated premiums to be received from cedents for the underwriting years 2000 and 1999 were under accrued. St. Paul Re recorded the increase in premium from those years in 2001 as the revenue materialized. In addition, new business from large quota share contracts accounted for approximately $65 million of premium growth in 2001, and accident and health new business contributed approximately $51 million to premium volume for the year.

The reported underwriting result in 2001 included losses from underwriting years prior to 2001. These losses were centered in surplus lines and first-dollar auto reinsurance coverages. The surplus lines losses primarily resulted from higher than expected frequency of losses associated with program business. In particular, the experience attributable to certain black car and tow truck programs was worse than expected. In addition, competitive market conditions in the earlier underwriting years contributed to a soft pricing environment for surplus lines reinsurance in those years. The first-dollar auto losses in 2001 were primarily the result of unfavorable emergence stemming from the binders and professional indemnity book.

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2000 vs. 1999

The 39% increase in net premium volume in 2000 compared with 1999 was largely driven by new business. In 2000, St. Paul Re entered the accident and health market to take advantage of significant improvements in the medical stop loss market. This business accounted for $33 million of written premiums in 2000. In addition, a large quota share treaty also contributed $45 million in new premium volume in 2000. North American surplus lines casualty business written by St. Paul Re's London operations increased by $23 million in 2000, due to price increases and the withdrawal of other surplus lines underwriters in London.

The reported underwriting loss for 2000 deteriorated significantly to $114 million, compared with an underwriting profit of $47 million in 1999. In 2000, St. Paul Re started to experience an increase in claims reported from underwriting years 1997 through 1999 which had not been evident in 1999.

North American Property

The North American Property segment consisted of property reinsurance business underwritten for customers with exposures in the United States and Canada. In 2001, coverages offered included proportional, per-risk, excess-of-loss reinsurance and excess and surplus lines insurance, and catastrophe treaties. This segment also included the results of retrocessional reinsurance business, and crop and agricultural reinsurance. As discussed earlier in this prospectus, in 2002, St. Paul narrowed its reinsurance product focus in an effort to improve profitability. As a result, the North American Property segment offered the following coverage in the first six months of 2002: property catastrophe, property pro rata and property risk excess-of-loss. The following table summarizes results for this segment for the periods presented, and excludes the impact of the reinsurance treaties and the September 11, 2001 terrorist attack.

	Six Months Ended June 30,						Year Ended December 31,
	2002			2001			2001			2000			1999
	($ in millions)
Net premiums written	$	110		$	107		$	230		$	218		$	254
Percentage increase (decrease) over prior year		3	%					6	%		(14	%)
Underwriting gain (loss)	$	19		$	(29	)	$	(39	)	$	(51	)	$	(87	)
Loss and loss adjustment expense ratio		56.4	%		96.0	%		88.1	%		91.6	%		106.1	%
Underwriting expense ratio		28.7	%		31.6	%		28.8	%		30.6	%		28.7	%

Combined ratio		85.1	%		127.6	%		116.9	%		122.2	%		134.8	%

Six Months Ended June 30, 2002 vs. Six Months Ended June 30, 2001

The $3 million increase in net premiums written was due to rate increases that averaged 31% in the first six months of 2002, which more than offset the significant decline in business volume resulting from St. Paul Re's withdrawal from or reduction in several lines of business in this segment.

The improvement in underwriting results in 2002 reflected the impact of exiting unprofitable lines of business, rate increases, a lack of significant catastrophe losses and favorable development on prior year catastrophe losses.

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2001 vs. 2000

The 6% increase in premium volume in 2001 over 2000 was primarily due to rate increases throughout this segment, the impact of which was substantially offset by a deliberate reduction in business volume for crop reinsurance and retrocessional reinsurance due to unfavorable treaty terms and conditions. Price increases for risk excess-of-loss reinsurance grew substantially as the year progressed, reflecting the impact of poor results on prior treaties. Proportional premium volume grew nearly 40% over 2000, primarily due to price increases.

The improvement in underwriting results compared with 2000 was primarily due to a reduction in retrocessional reinsurance losses. St. Paul Re began exiting unprofitable lines of the retrocessional market in 2000, and by the end of 2001, underwrote a minimal amount of that business. Proportional reinsurance coverages produced improved results over 2000, largely due to favorable loss development on 1999 and prior underwriting years. These improvements were partially offset by deterioration in North American reinsurance results from business underwritten in London. In addition, excess-of-loss reinsurance results in 2001 suffered from the effects of tropical storm Allison, which struck the southeastern United States in the spring. Crop reinsurance losses were significant in 2001, due to adverse loss development on both 2001 and 2000 underwriting year business. Several hailstorms in the U.S. played a major factor in the 2001 underwriting year losses. In addition, crop reinsurance results in 2001 reflected the negative impact of competitive market conditions in prior years that resulted in a soft pricing environment for this business.

2000 vs. 1999

The 14% decline in net premium volume in 2000 compared with 1999 reflected an intentional reduction in business volume due to concerns about underlying price levels, catastrophe exposures and unsatisfactory treaty terms. Retrocessional net premiums declined approximately 27%, and proportional volume was down 45% from 1999 levels. Near the end of 2000, some underlying price improvement emerged due to the continuing deterioration in results for reinsurers.

With the exception of catastrophe business, all lines of business recorded unprofitable results in 2000. Excess-of-loss business showed improvement over 1999, due to the lack of catastrophe losses and favorable prior-year development. Proportional business results deteriorated from 1999, due to loss development from the 1999 underwriting year. Per risk excess-of-loss results were also worse than 1999. Crop reinsurance results in 2000 deteriorated from 1999, and retrocessional business from the London market produced significant losses despite a declining book of business.

International

In 2001, St. Paul Re's International segment underwrote property and casualty reinsurance for customers domiciled outside of North America. This segment also included results from marine and aerospace business for customers located throughout the world, because of the global nature of those exposures. As discussed earlier in this prospectus, in 2002, St. Paul narrowed its reinsurance product focus in an effort to improve profitability. As a result, the International segment offered the following coverages in the first six months of 2002: property catastrophe, property pro rata, property risk excess-of-loss and marine coverages. The following table summarizes results for this segment for the periods presented, and excludes the impact of the reinsurance treaties and the September 11, 2001 terrorist attack.

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	Six Months Ended June 30,						Year Ended December 31,
	2002			2001			2001			2000			1999
	($ in millions)
Net premiums written	$	176		$	184		$	255		$	176		$	212
Percentage increase (decrease) over prior year		(4	)%					45	%		(17	)%
Underwriting gain (loss)	$	44		$	37		$	24		$	(47	)	$	(73	)
Loss and loss adjustment expense ratio		39.6	%		42.4	%		65.8	%		88.9	%		96.5	%
Underwriting expense ratio		19.3	%		21.6	%		23.7	%		36.1	%		38.2	%

Combined ratio		58.9	%		64.0	%		89.5	%		125.0	%		134.7	%

Six Months Ended June 30, 2002 vs. Six Months Ended June 30, 2001

The $8 million decrease in net premiums written in 2002 was due to St. Paul Re's decision to exit the aviation market and close certain international offices. Rate increases averaging 39% in the International segment partially offset these declines.

The $7 million increase in underwriting gain was mainly attributable to favorable development on prior year reserves across all lines. Also contributing to the increase in underwriting gain is the absence of catastrophe losses in the period and significant rate increases achieved in 2002.

2001 vs. 2000

The 45% increase in net premiums over 2000 reflected improving market conditions in 2001, characterized by significant rate increases and increasingly favorable terms and conditions on new and renewal business during the year. The magnitude of year-over-year premium growth in 2001 was partially aided by St. Paul Re's deliberate actions in 2000 to reduce premium volume in certain underperforming lines of business, including proportional treaty business and low-level per risk excess-of-loss business. Net premium growth in 2001 was centered in property coverages, where rate increases averaged 33% for the year. For marine coverages, rate increases averaged 20% in 2001.

During 2001, St. Paul Re sought to take advantage of market conditions and realign its portfolio by further reducing underperforming business volume, and expanding new business in virtually all of its remaining operations. The significant improvement in the loss ratio compared with 2000 reflected the success of those efforts, and also reflected a significant decline in catastrophe losses. In 2001, the only major catastrophe affecting the International segment (excluding the September 11, 2001 terrorist attack) was the explosion of a chemical plant in Toulouse, France, which resulted in $13 million of incurred losses. By contrast, 2000 results included a cumulative total of $34 million of catastrophe losses, the majority of which resulted from additional loss development from severe windstorms that struck portions of Europe in late 1999.

2000 vs. 1999

The 17% decline in 2000 net premiums written compared with 1999 resulted from St. Paul Re's deliberate reduction in pro rata property business volume due to unacceptable underwriting conditions. In addition, St. Paul Re changed the method it used to estimate reinsurance premiums in the International segment for the 1999 underwriting year following St. Paul's merger with USF&G Corporation in 1998 and the subsequent integration of F&G Re, the reinsurance department of USF&G into St. Paul Re's operations. Throughout the majority of 2000, worldwide reinsurance market conditions remained unfavorable, and St. Paul Re maintained a cautious approach to premium growth in the International arena. However, the spate of large catastrophe losses which

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occurred in late 1999 and affected calendar year 2000 results proved to be the catalyst for an increase in property catastrophe reinsurance pricing. In the last quarter of 2000, the soft market conditions that had prevailed for several years began to improve, laying the groundwork for significantly improved operating conditions in 2001.

Although 2000 was relatively free from major natural catastrophes, adverse development from the aforementioned 1999 catastrophic events contributed significantly to St. Paul Re's reported results in 2000. Of the $34 million of catastrophe losses incurred in 2000, the only significant events that actually occurred in 2000 were a series of storm and flood losses in the United Kingdom, which resulted in losses of $13 million.

In 1999, market conditions were difficult due to excess capacity and severe competition in the reinsurance sector. Overall pricing continued to be inadequate as worldwide reinsurers competed for market share in a stagnant worldwide non-life insurance market. St. Paul Re's International segment loss ratio in 1999 suffered from a total of $63 million of catastrophe losses resulting from earthquakes in Taiwan and Turkey, Typhoon Bart in Japan, Hurricane Floyd, and the severe windstorms in Northern Europe.

Finite Risk

In 2001, St. Paul Re's Finite Risk segment underwrote non-traditional reinsurance treaties for leading insurance and reinsurance companies worldwide. Non-traditional reinsurance combines limited traditional underwriting risk with financial risk protection and is generally utilized by sophisticated insurers who are willing to share in a portion of their insurance losses. Products include multi-year excess-of-loss treaties, aggregate stop loss treaties, finite quota share treaties, loss portfolio transfers, and adverse loss development covers. This segment also included bond and credit reinsurance coverages. As discussed earlier in this prospectus, in 2002, St. Paul narrowed its reinsurance product focus in an effort to improve profitability. As a result, the Finite Risk segment offered the following coverages in the first six months of 2002: multi-year excess-of-loss, aggregate stop loss, finite quota share, loss portfolio transfer and adverse loss development contracts. The following table summarizes results for this segment for the periods presented, and excludes the impact of the reinsurance treaties and the September 11, 2001 terrorist attack.

	Six Months Ended June 30,						Year Ended December 31,
	2002			2001			2001			2000			1999
	($ in millions)
Net premiums written	$	149		$	161		$	424		$	418		$	311
Percentage increase (decrease) over prior year		(7	)%					1	%		34	%
Underwriting gain (loss)	$	11		$	(10	)	$	(57	)	$	(28	)	$	26
Loss and loss adjustment expense ratio		56.8	%		62.2	%		80.7	%		70.5	%		77.3	%
Underwriting expense ratio		35.0	%		46.1	%		33.5	%		35.7	%		17.6	%

Combined ratio		91.8	%		108.3	%		114.2	%		106.2	%		94.9	%

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Six Months Ended June 30, 2002 vs. Six Months Ended June 30, 2001

The $12 million decrease in net premiums written in the first six months of 2002 was due to St. Paul Re's decision to exit the bond and credit market; however, that decline was offset by a $25 million positive premium adjustment related to one finite quota share contract.

The $11 million underwriting gain in the first six months of 2002 included a $10 million favorable impact due to a commutation of an aggregate excess-of-loss treaty, offset by adverse prior-year marine and aviation loss development, as well as adverse loss experience on the bond and credit business in runoff. The $10 million loss in the 2001 period was primarily due to an $11 million loss related to the Petrobras oil platform collapse in March 2001.

2001 vs. 2000

Net written premiums grew slightly in 2001 over an abnormally large premium base in 2000 that had resulted from three large new contracts and additional premiums related to a specific contract. Bond and credit reinsurance coverages accounted for $63 million of net written premium volume in 2001, compared with $62 million in 2000.

The deterioration in underwriting results in 2001 was primarily due to $31 million of losses generated by bond and credit reinsurance, of which $15 million resulted from surety bond losses related to Enron Corporation's bankruptcy filing in late 2001. Bond and credit losses in 2000 totaled $2 million. In addition, the Finite Risk segment incurred $39 million of losses from three major marine and aviation events: the collapse of the Petrobras oil platform; a terrorist group's ground attack on commercial airliners in Sri Lanka; and the chemical plant explosion in Toulouse, France.

2000 vs. 1999

Net written premiums in 2000 increased $107 million over 1999, of which $67 million collectively resulted from the origination of two new loss portfolio transfer contracts and one new finite quota share treaty. In addition, $47 million of additional written premiums were recognized on a specific aggregate stop-loss contract due to adverse loss development.

Additional loss development from the severe storms that struck portions of Europe in late 1999 accounted for $36 million of underwriting losses in 2000 in the Finite Risk segment. However, $52 million in underwriting profits were recognized in 2000 from five large treaties that were either commuted or experienced favorable loss development.

During 2000, the Finite Risk segment reduced its estimate of ultimate losses on certain non-traditional reinsurance business by $56 million, and correspondingly increased its estimate of profit commission reserves by $66 million. Excluding these changes, the loss ratio would have been 84.2%, and the expense ratio would have been 19.6%.

Capital Resources and Liquidity

St. Paul Re's primary sources of capital resources and liquidity were premium revenues received from its reinsurance business, and capital contributions, when necessary, from St. Paul. As a component of St. Paul's consolidated operations, St. Paul Re was dependent upon St. Paul to provide the necessary capital to adequately support the level of its business operations.

Exposures to Market Risk

Market risk can be described as the risk of change in fair value of a financial instrument due to changes in interest rates, equity prices, creditworthiness, foreign exchange rates or other factors. As a component of St. Paul's consolidated operations with no invested assets of its own, St. Paul Re

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had no direct exposure to these various types of market risk, except for the potential impact of changes in foreign currency exchange rates on its insurance reserves. St. Paul actively managed its exposure to such foreign currency risks by purchasing investments denominated in foreign currencies to hedge insurance reserves denominated in the same currencies, which effectively reduced its foreign currency exchange rate exposure.

Reserves for Losses and Loss Adjustment Expenses for Predecessor Business

General Information

Losses represent the amounts paid, or expected to be paid, to ceding companies for events that have occurred. The cost of investigating, resolving and processing these claims are known as loss adjusting expenses, or LAE. Reserves are established that reflect the estimated unpaid total cost of these two items. These reserves include estimates of the total cost of claims that were reported, but not yet paid, and the cost of claims incurred but not yet reported or IBNR. The reserves for unpaid losses, and LAE at December 31, 2001 cover claims that were incurred not only in 2001 but also in prior years. Loss reserves are reduced for estimates of salvage and subrogation.

Because many of the reinsurance coverages offered by St. Paul Re involve losses that may not ultimately be settled for many years after they are incurred, subjective adjustments as to ultimate exposure to losses are an integral and necessary component of the loss reserving process. The inherent uncertainties of estimating loss reserves are further exacerbated for reinsurers by the significant times that often elapse between the occurrence of an insured loss, the reporting of that loss to the primary insurer and, ultimately to the reinsurer, and the primary insurers payment of that loss and subsequent indemnification by the reinsurer. Reserves are recorded by considering a range of estimates bounded by a high point and a low point. Within that range, management's best estimate is recorded. Reserves are continually reviewed, using various statistical and actuarial techniques to analyze current claim costs, frequency and severity data, and prevailing economic, social and legal factors. Reserves established in prior years are adjusted as loss experience develops and new information becomes available. Adjustments to previously estimated reserves are reflected in financial results in periods in which they are made.

While the carried reserves make a reasonable provision for unpaid loss and LAE obligations, it should be noted that the process of estimating required reserves does, by its very nature, involve uncertainty. The level of uncertainty can be influenced by factors such as the existence of long-tail coverage (when loss payments may occur for several years) and changes in claims handling practices, as well as factors noted above, and actual claim payments and LAE could be significantly different than estimates.

Liabilities for unpaid losses and LAE related to certain assumed reinsurance contracts are discounted to the present value of estimated future payments. Prior to discounting, these liabilities totaled $306.4 million, $198.7 million, and $72.7 million at December 31, 2001, 2000 and 1999 respectively. The total discounted liability reflected on our combined statements of identifiable underwriting assets and liabilities was $264.9 million, $146.7 million and $47.6 million at December 31, 2001, 2000 and 1999, respectively. During 2001, $33 million of discount was amortized and $85 million of additional discount was accrued. The liabilities related to these reinsurance contracts were discounted using rates up to 7.5%, based on our return on invested assets or, in many cases, on yields contractually guaranteed to us on funds held by the ceding company, as permitted by the state of domicile, the Vermont Department of Banking, Insurance, Securities and Healthcare Administration.

229

Ten-year Development

The table below presents a development of net loss and LAE reserve liabilities and payments for the years 1992 through 2001. The top line on the table shows the estimated liability for unpaid losses and LAE, net of reinsurance recoverables, recorded at the balance sheet date for each of the years indicated.

In 1997, St. Paul changed the method by which it assigned loss activity to a particular year for assumed reinsurance written by our U.K.-based reinsurance operation, a component of St. Paul Re. Prior to 1997, that loss activity was assigned to the year in which the underlying reinsurance contract was written. In 1997, our analysis indicated that an excess amount of loss activity was being assigned to prior years because of this practice. As a result, we implemented an improved procedure in 1997 that more accurately assigns loss activity for this business to the year in which it occurred. This change had the impact of increasing favorable development on previously established reserves by approximately $110 million in 1997. There was no net impact on total incurred losses, however, because there was a corresponding increase in the provision for current year loss activity in 1997. Development data for individual years prior to 1997 in this table were not restated to reflect this new procedure because reliable data to do so was not available.

The upper portion of the table, which shows the re-estimated amounts relating to the previously recorded liabilities, is based upon experience as of the end of each succeeding year. These estimates are either increased or decreased as further information becomes known about individual claims and as changes in the trend of claim frequency and severity become apparent.

The "Cumulative redundancy (deficiency)" line on the table for any given year represents the aggregate change in the estimates for all years subsequent to the year the reserves were initially established. For example, the 1992 net reserve of $2,265 million developed to $2,231 million, or a $34 million redundancy, by the end of 1994. By the end of 2001, the 1992 reserve had developed a redundancy of $518 million. The changes in the estimate of 1992 loss reserves were reflected in operations during the past nine years. Likewise, the deficiency that developed with respect to year-end 2000 reserves was reflected in our results of operations for 2001.

In 1993, St. Paul Re adopted the provisions of SFAS No. 113, "Accounting and Reporting for Reinsurance of Short-Duration and Long-Duration Contracts". This statement required, among other things, that reinsurance recoverables on unpaid losses and LAE be shown as an asset, instead of the prior practice of netting this amount against insurance reserves for balance sheet reporting purposes.

The middle portion of the table, which includes data for only those periods impacted since the adoption of SFAS No. 113 (the years 1992 through 2001), represents a reconciliation between the net reserve liability as shown on the top line of the table and the gross reserve liability as shown in St. Paul Re's combined statements of identifiable underwriting assets and liabilities on page F-13 of this prospectus. This portion of the table also presents the gross re-estimated reserve liability as of the end of the latest re-estimation period (December 31, 2001) and the related re-estimated reinsurance recoverable.

The lower portion of the table presents the cumulative amounts paid with respect to the previously recorded liability as of the end of each succeeding year. For example, as of December 31, 2001, $1,573 million of the currently estimated $1,747 million of net losses and LAE that have been incurred for the years up to and including 1992 have been paid. Thus, as of December 31, 2001, it is estimated that $174 million of net incurred losses and LAE have yet to be paid for the years up to and including 1992.

Caution should be exercised in evaluating the information shown in this table. It should be noted that each amount includes the effects of all changes in amounts for prior periods. For

230

example, the portion of the development shown for year-end 1996 reserves that relates to 1991 losses is included in the cumulative redundancy (deficiency) for the years 1991 through 1996.

In addition, the table presents calendar year data. It does not present accident or policy year development data, which some readers may be more accustomed to analyzing. The social, economic and legal conditions and other trends which have had an impact on the changes in the estimated liability in the past are not necessarily indicative of the future. Accordingly, readers are cautioned against extrapolating any conclusions about future results from the information presented in this table.

Note 4 to the combined statements, on page F-22 of St. Paul Re's combined statements, includes a reconciliation of beginning and ending loss reserve liabilities for each of the last three years and is incorporated herein by reference. Additional information about our reserves is contained in Note 4 of St. Paul Re's combined statements on page F-22 of this prospectus.

Analysis of Loss and Loss Adjustment Expense (LAE) Development

	Year ended December 31,
	1992		1993		1994		1995		1996		1997		1998		1999		2000			2001
									($ in millions)
Net liability for unpaid losses and LAE	$	2,265	$	2,189	$	2,241	$	2,424	$	2,695	$	3,116	$	3,226	$	2,855	$	2,666		$	3,693

Liability re-estimated as of:
One year later		2,225		2,179		2,218		2,431		2,758		3,040		3,058		2,730		2,761
Two years later		2,231		2,158		2,246		2,476		2,689		2,712		2,754		2,744
Three years later		2,211		2,179		2,272		2,423		2,239		2,447		2,739
Four year later		2,231		2,202		2,225		2,065		2,094		2,439
Five years later		2,262		2,168		1,874		1,853		2,073
Six years later		2,238		1,803		1,681		1,841
Seven years later		1,870		1,649		1,669
Eight years later		1,749		1,646
Nine years later		1,747
Ten years later
Gross cumulative redundancy (deficiency)
Cumulative redundancy (deficiency)	$	518	$	542	$	572	$	583	$	622	$	677	$	487	$	111	$	(95	)		—

231

Net liability for unpaid losses and LAE		$	2,265	$	2,189	$	2,241	$	2,424	$	2,695	$	3,116	$	3,226	$	2,855	$	2,666		$	3,693
Reinsurance recoverable on unpaid losses			714		687		694		674		669		613		251		596		902			1,256
	Gross Liability		2,979		2,876		2,935		3,098		3,365		3,729		3,477		3,451		3,568			4,949
	Gross re-estimated liability
	One year later		2,931		2,865		2,909		3,113		3,436		3,208		3,356		3,325		3,664
	Two years later		2,939		2,841		2,946		3,166		2,917		3,039		3,069		3,428
	Three years later		2,916		2,871		2,979		2,715		2,714		2,784		3,123
	Four year later		2,944		2,901		2,579		2,491		2,474		2,837
	Five years later		2,984		2,553		2,352		2,279		2,505
	Six years later		2,684		2,302		2,154		2,312
	Seven years later		2,423		2,143		2,182
	Eight years later		2,294		2,176
	Nine years later		2,324
	Ten years later
	Gross cumulative redundancy (deficiency)	$	655	$	700	$	754	$	786	$	860	$	893	$	354	$	23	$	(96	)		—

Cumulative amount of net liability paid through:
	One year later	$	492	$	369	$	339	$	365	$	357	$	414	$	696	$	780	$	663
	Two years later		768		620		579		599		640		967		1,318		1,343
	Three years later		951		792		736		780		1,071		1,425		1,650
	Four years later		1,079		905		863		1,117		1,416		1,640
	Five years later		1,154		998		1,134		1,375		1,544
	Six years later		1,212		1,217		1,336		1,453
	Seven years later		1,399		1,391		1,387
	Eight years later		1,544		1,431
	Nine years later		1,573
	Ten years later
Cumulative amount of gross liability paid through:
	One year later	$	551	$	410	$	376	$	397	$	381	$	439	$	746	$	838	$	706
	Two years later		861		689		643		650		685		1,033		1,410		1,435
	Three years later		1,068		882		817		847		1,152		1,523		1,760
	Four years later		1,212		1,007		957		1,217		1,525		1,749
	Five years later		1,297		1,110		1,258		1,500		1,661
	Six years later		1,362		1,355		1,483		1,584
	Seven years later		1,572		1,548		1,539
	Eight years later		1,734		1,593
	Nine years later		1,767
	Ten years later

232

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL INFORMATION

		Page
Platinum Underwriters Holdings, Ltd.
Independent Auditors' Report		F-2
Consolidated Balance Sheet		F-3
Notes to Consolidated Balance Sheet		F-4
The St. Paul Companies, Inc. Reinsurance Underwriting Segment (Predecessor)
Independent Auditors' Report		F-12
Combined Statements—As of December 31, 2001, 2000 and 1999		F-13
Notes to Combined Statements—As of December 31, 2001, 2000 and 1999		F-16
Combined Statements—As of June 30, 2002 and 2001 (unaudited)		F-29
Notes to Combined Statements—As of June 30, 2002 and 2001 (unaudited)		F-32

F-1

INDEPENDENT AUDITORS' REPORT

The Board Of Directors And Shareholder
Platinum Underwriters Holdings, Ltd.:

We have audited the accompanying consolidated balance sheet of Platinum Underwriters Holdings, Ltd. and subsidiaries (the Company) as of June 30, 2002. This financial statement is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statement referred to above presents fairly, in all material respects, the financial position of Platinum Underwriters Holdings, Ltd. and subsidiaries as of June 30, 2002, in conformity with accounting principles generally accepted in the United States of America.

/s/ KPMG LLP

Minneapolis, Minnesota
August 29, 2002

F-2

PLATINUM UNDERWRITERS HOLDINGS, LTD.

CONSOLIDATED BALANCE SHEET

June 30, 2002

ASSETS
Cash	$	120,000
Cash held in trust		10,000

Total assets	$	130,000

LIABILITIES
Payable to affiliate	$	10,000

SHAREHOLDER'S EQUITY
Common Shares—(par value $0.01; 135,000,000 shares authorized; 1,200,000 shares issued and outstanding)	$	12,000
Additional paid-in capital		108,000

Total shareholder's equity	$	120,000

Total liabilities and shareholder's equity	$	130,000

See accompanying notes to consolidated balance sheet.

F-3

1. Organization

Platinum Underwriters Holdings, Ltd. ("Platinum Holdings") was incorporated on April 19, 2002 and was capitalized on April 24, 2002 under the laws of Bermuda, to hold subsidiaries that provide property, casualty, and other reinsurance to insurers and reinsurers on a worldwide basis. Platinum Holdings will operate through wholly owned subsidiaries established and to be established or acquired, including Platinum Underwriters Reinsurance, Inc. ("Platinum US"), Platinum Re (UK) Limited ("Platinum UK"), and Platinum Underwriters Bermuda, Ltd. ("Platinum Bermuda") (collectively referred to as the "Company"). Platinum Holdings owns Platinum Bermuda directly and will own Platinum US, Platinum UK and Platinum Underwriters Finance, Inc. ("Platinum Finance") through Platinum Regency Holdings ("Platinum Ireland"), a wholly owned intermediate Irish holding company.

Platinum Bermuda was incorporated on May 9, 2002 under the laws of Bermuda and is licensed under the Bermuda Insurance Act of 1978, as amended (the "Bermuda Insurance Act") and related regulations.

Platinum US (formerly named USF&G Family Insurance Company) was incorporated in 1995 under the laws of Maryland and is licensed under the Maryland insurance laws and related regulations. Platinum US will be acquired by Platinum Holdings at the time of the consummation of Platinum Holdings' initial public offering (the "Public Offering").

Platinum UK was incorporated on April 10, 2002 under the laws of the United Kingdom and has applied to be licensed under the Financial Services and Market Act 2000 ("FSMA") and related regulations.

Platinum Regency was incorporated on May 3, 2002 under the laws of Ireland.

Platinum Finance was incorporated on May 10, 2002 under the laws of Delaware.

The Company's initial capitalization of $120,000, as reflected in the consolidated balance sheet, was provided by an organizing trust.

On May 29, 2002, Platinum Holdings completed a 100-for-1 stock split of its Common Shares, resulting in 135,000,000 shares authorized and 1,200,000 shares issued and outstanding, all with a par value of $0.01.

Concurrent with the Public Offering, the Company has agreed to sell Common Shares and an option to purchase additional Common Shares to The St. Paul Companies, Inc. ("St. Paul") in a private placement in exchange for cash and certain assets contributed by St. Paul. This private placement is discussed in more detail in Note 3.

Also, concurrent with the Public Offering is an offering of equity security units discussed in Note 3.

2. Summary of Significant Accounting Policies

Accounting Principles

These financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

The Company's business will be written through various underwriting subsidiaries, which will be required to file statutory financial statements with state and foreign regulatory authorities. The accounting principles used to prepare these statutory financial statements may differ from U.S. GAAP.

F-4

2. Summary of Significant Accounting Policies (Continued)

Financial Statements

For the period from April 24, 2002 (date of inception) through June 30, 2002, the Company did not commence operations and therefore did not generate any revenues or related expenses. During this period, the Company was capitalized for $120,000, as discussed in Note 1.

Due to nominal activity, the Company has not included consolidated statements of operations, comprehensive income, shareholder's equity and cash flows.

Consolidation

The June 30, 2002 balance sheet consolidates the balance sheets of Platinum Holdings, Platinum Bermuda, Platinum Regency and Platinum UK, with Platinum UK capitalized on a very nominal basis. Platinum Finance will be acquired by Platinum Holdings prior to the consummation of Platinum Holdings' Public Offering, at which time the balance sheet of Platinum Finance will be consolidated into the balance sheet of Platinum Holdings. Platinum US will be acquired by Platinum Holdings on the consummation of Platinum Holdings' Public Offering, at which time the balance sheet of Platinum US will be consolidated into the balance sheet of Platinum Holdings. Through June 30, 2002, Platinum US has been a non-operating subsidiary of St. Paul and has written no insurance business, although it is licensed to do so in a number of states. Its only activity to date relates to approximately $19 million of investment grade fixed income and short-term investment securities. Prior to St. Paul's contribution of Platinum US, a dividend of $10 million will be made by Platinum US to United States Fidelity and Guaranty Company, its parent, subject to approval by the Maryland Insurance Administration. Transactions between the Company and its subsidiaries or among subsidiaries are eliminated in consolidation.

Cash

Cash of $10,000, provided by St. Paul, is held in trust at Conyers, Dill & Pearman on behalf of Platinum Holdings to be utilized to pay specified formation expenses.

Upon closing of the Public Offering this amount will be repaid to St. Paul.

Organizational Costs

Costs incurred by the Company relating to its organization will be expensed as incurred.

As the Company becomes active in the underwriting of reinsurance, it intends to record transactions based on the following accounting policies, which are consistent with U.S. GAAP.

Use of Estimates

The Company's financial statements will include estimates and assumptions that have an effect on the amounts reported. The most significant estimates will be those relating to reserves for losses and loss adjustment expenses. These estimates will be continually reviewed and adjustments made as necessary, but actual results could be significantly different than expected at the time such estimates are made. Results of changes in estimates will be reflected in results of operations in the period in which the change is made.

F-5

Premiums Earned

Assumed reinsurance premiums will be recognized as revenues proportionately over the coverage period. Premiums earned will be recorded in the statements of operations, net of our cost to purchase reinsurance. Premiums not yet recognized as revenue will be recorded in the balance sheet as unearned premiums, gross of any ceded unearned premiums. Written and earned premiums, and the related costs, which have not yet been reported to the Company will be estimated and accrued. Due to the time lag inherent in reporting of premiums by cedents, such estimated premiums written and earned, as well as related costs, may be significant. Differences between such estimates and actual amounts will be recorded in the period in which the actual amounts are determined.

Reinstatement and additional premiums will be accrued as provided for in the provisions of assumed reinsurance contracts and based on experience under such contracts. Reinstatement premiums are the premiums charged for the restoration of the reinsurance limit of a catastrophe contract to its full amount after payment by the reinsurer of losses as a result of an occurrence. These premiums relate to the future coverage obtained during the remainder of the initial policy term, and are earned over the remaining policy term. Additional premiums are premiums charged after coverage has expired, related to experience during the policy term, which are earned immediately. An allowance for uncollectible premiums will be established for possible non-payment of such amounts due, as deemed necessary.

Insurance Losses and Loss Adjustment Expenses

Losses represent the amounts paid, or expected to be paid, to ceding companies for events that have occurred. The costs of investigating, resolving and processing these claims are known as loss adjustment expenses ("LAE"). These items will be recorded on the Company's statements of operations, net of ceded reinsurance, meaning that gross losses and loss adjustment expenses incurred will be reduced by the amounts recovered or expected to be recovered under retrocessional contracts.

Reinsurance

Written premiums, earned premiums, and incurred losses and loss adjustment expenses will reflect the net effects of assumed and ceded reinsurance transactions. Reinsurance accounting will be followed for assumed and ceded transactions when risk transfer requirements have been met. These requirements involve significant assumptions being made related to the amount and timing of expected cash flows, as well as the interpretation of underlying contract terms. Assumed reinsurance contracts that do not transfer significant insurance risk are required to be accounted for as deposits. These contract deposits will be accounted for as financing transactions, with interest expense credited to the contract deposit.

Insurance Reserves

The reserves for losses and LAE will be estimated based on reports received from ceding companies, supplemented by the Company's estimates of reserves for which ceding company reports have not been received and by the Company's own historical experience. To the extent that the Company's own historical experience is inadequate for estimating reserves, such estimates may

F-6

be based upon industry experience and management's judgment. These reserves will include estimates of the total cost of claims that were reported, but not yet paid, and the cost of claims incurred but not yet reported ("IBNR"). Loss reserves will be reduced for estimated amounts of salvage and subrogation recoveries. Estimated amounts recoverable from reinsurers on unpaid losses and LAE will be reflected as assets. We currently intend to make arrangements to permit us to discount the liability for certain assumed reinsurance contracts using rates based on our return on invested assets or, in many cases, on yields contractually guaranteed to us on funds held by the ceding company.

For reported losses, reserves will be established on a "case" basis within the parameters of coverage provided in the underlying insurance policy and reinsurance agreement. For IBNR losses, reserves will be estimated using established actuarial methods. Case and IBNR reserve estimates will consider such variables as past loss experience, changes in legislative conditions, changes in judicial interpretation of legal liability and policy coverages, and inflation.

Because many of the reinsurance coverages offered by the Company will likely involve claims that may not ultimately be settled for many years after they are incurred, subjective judgments as to ultimate exposure to losses will be an integral and necessary component of the loss reserving process. The inherent uncertainties of estimating loss reserves are further exacerbated for reinsurers by the significant amount of time that often elapses between the occurrence of an insured loss, the reporting of that loss to the primary insurer and, ultimately to the reinsurer, and the primary insurer's payment of that loss and subsequent indemnification by the reinsurer. Reserves will be recorded considering a range of estimates bounded by a high and low point. Within that range, management's best estimate will be recorded. Reserves will be continually reviewed, using a variety of statistical and actuarial techniques to analyze current claim costs, frequency and severity data, and prevailing economic, social and legal factors. Reserves established in prior years will be adjusted as loss experience develops and new information becomes available. Adjustments to previously estimated reserves will be reflected in financial results in the periods in which they are made. It should be noted that the process of estimating required reserves does, by its very nature, involve uncertainty. The level of uncertainty can be influenced by factors such as the existence of long tail coverage (when loss payments may not occur for several years) and changes in claim handling practices, as well as the factors noted above, and actual claim payments and LAE could be significantly different from the estimates.

Policy Acquisition Expenses

The costs directly related to the acquisition of reinsurance contracts are referred to as policy acquisition expenses and consist of commissions and other direct underwriting expenses. Although these expenses are incurred when a reinsurance contract is written, such expenses will be deferred and amortized over the same period as the corresponding premiums are recorded as earned revenues.

On a regular basis, an analysis of the recoverability of the deferred policy acquisition expenses, in relation to the expected recognition of revenues, including anticipated investment income will be performed. Any adjustments will be reflected as period costs. Should the analysis indicate that the acquisition costs are unrecoverable, further analyses are completed to determine if a reserve is required to provide for losses which may exceed the related unearned premiums.

F-7

Foreign Currency Translation

The Company's functional currency will be the United States dollar. Foreign currency transactions will be remeasured to the functional currency, and the resulting foreign exchange gains or losses will be reflected in income. The remeasurement will be calculated using current exchange rates for the balance sheet amounts and average exchange rates for revenues and expenses.

Investments

The Company's entire fixed income portfolio will be classified as available-for-sale, and thus will be carried at estimated fair value, with the difference between amortized cost and fair value charged or credited directly to shareholders' equity. Fair values will be based on quoted market prices, where available, from a third-party pricing service. If quoted market prices are not available, fair values will be estimated using values obtained from independent pricing services or a cash flow estimate will be used. Short-term investments will be carried at cost, which the Company expects will approximate fair value.

If the Company invests in equity securities in the future, such securities will also be classified as available for sale and will be carried at estimated fair value, based on quoted market prices obtained from a third-party pricing service.

Realized gains and losses on disposal of investments will be determined based upon specific identification of the cost of investments sold and will be recorded in the Company's statements of operations.

The difference between the cost and estimated fair value of investments will be monitored. If any of the Company's investments experience a decline in value that is believed to be other than temporary, the investment will be written down and a realized loss will be recorded on the Company's statement of operations. For investments carried at estimated fair value, the difference between cost and fair value, net of any deferred taxes, will be recorded as a part of Shareholders' equity.

Cash equivalents will be carried at amortized cost, which the Company expects will approximate fair value, and will include all securities that, at their purchase date, have a maturity of less than ninety days.

Equity Security Units

The net proceeds from the sale of the units will be allocated between the purchase contracts and the senior notes in the Company's consolidated financial statements based on the underlying fair value of each instrument. The present value of the purchase contract adjustment payments will be initially charged to shareholders' equity, with an offsetting credit to liabilities. Subsequent contract adjustment payments will be allocated between this liability account and interest expense based on a constant rate calculation over the life of the transaction.

The purchase contracts are forward transactions in the Company's Common Shares. Upon settlement of a purchase contract, the Company will receive $25 pursuant to that purchase contract and will issue the requisite number of Common Shares. The $25 the Company receives will be credited to shareholders' equity and allocated between the Company's Common Shares and additional paid-in capital accounts.

F-8

Income Taxes

Income taxes will be recorded under the liability method. Deferred income tax assets or liabilities will be recorded based on differences between tax basis and financial statement amounts that will result in taxable or deductible amounts in future years. A valuation allowance will be established for deferred tax assets where it is more likely than not that future tax benefits will not be realized.

Earnings per Common Share

The calculation of earnings per Common Share will be based upon the weighted average number of Common Shares outstanding adjusted for options outstanding and outstanding purchase contracts relating to the equity security units.

3. Formation and Separation Agreement and Initial Public Offering

Concurrent with the Public Offering, the Company will, pursuant to a Formation and Separation Agreement to be entered into with St. Paul, issue Common Shares to St. Paul in a private placement as well as an option to purchase additional Common Shares at any time during the 10 years following the Public Offering in exchange for cash and certain assets described in Note 4. The Company refers to this private placement as the "St. Paul Investment". The number of shares to be issued to St. Paul will be determined prior to completion of the initial public offering. The additional shares which St. Paul will have an option to purchase as well as the price to be paid by St. Paul, will also be determined prior to completion of the initial public offering. The number of shares to be sold to St. Paul pursuant to the St. Paul Investment is designed to hold its ownership in the Company, following the Public Offering, at an ownership level under 25%, but with the voting power limited to 9.9% of the outstanding Common Shares. The number of shares privately placed will be subject to increase proportionately to the extent the underwriters exercise their over-allotment option to purchase additional Common Shares from Platinum Holdings. In order to maintain the ownership level, the total number of shares to be sold to St. Paul is also subject to adjustment if the number of Common Shares offered in the Public Offering is changed hereafter.

Concurrently with the Public Offering, the Company will offer equity security units for an aggregate offering price of $125 million, plus up to an additional $18.75 million if the underwriters' option to purchase additional units is exercised in full (the "ESU Offering"), by means of a separate prospectus. Each unit will consist of (a) a contract to purchase Common Shares from Platinum Holdings in 2005 and (b) a senior note of Platinum Finance due in 2007.

4. Acquisition of Assets from St. Paul

In exchange for the ownership interest discussed in Note 3, St. Paul will contribute cash to the Company and transfer to the Company certain tangible assets used in St. Paul's reinsurance operation, including the net assets of Platinum US as well as certain fixed assets such as furniture and equipment, systems and software. Intangible assets to be transferred include broker lists, contract renewal rights and licenses. These assets will be recorded at the values as reflected on St. Paul's books at the time of the transfer.

F-9

5. Related Party Transactions

In connection with the organization, initial financing and commencement of operations of the Company, the Company plans to enter into various agreements with St. Paul and its affiliates. These agreements will be put in place to support the operations of Platinum Holdings.

6. Taxation

Under current Bermuda law, the Company will not be required to pay any taxes in Bermuda on either income or capital gains. The Company has received from the Minister of Finance of Bermuda an assurance under The Exempted Undertakings Tax Protection Act, 1966 of Bermuda that in the event of any such taxes being imposed, the Company will be exempted until 2016. There will be no withholding taxes imposed on dividend distributions from Bermuda.

Under current United States law, Platinum US will be subject to the 35% statutory tax rate. A 5% withholding tax will apply to dividends distributed from Platinum US to Platinum Ireland provided Platinum Ireland is entitled to the benefits of the U.S.-Irish Tax Treaty and meets certain other requirements. Gross reinsurance premiums related to U.S. risks that are paid to Platinum Bermuda will be subject to a 1% U.S. excise tax. Platinum UK may file for exemption from this excise tax under the U.S.-U.K. Treaty if it satisfies the requirements of the Treaty. Dividend distributions from the Company to its U.S. shareholders will be subject to U.S. corporate income tax. Shareholders holding less than 10% of the voting power of the Company's shares are not entitled to a dividends-received deduction for earnings related to Platinum US and are not entitled to a U.S. foreign tax credit for foreign taxes paid on earnings related to Platinum UK or Platinum Ireland.

Under current United Kingdom law, Platinum UK will be taxed at the U.K. corporate tax rate (generally 30%). There will be no withholding tax on dividends distributed from Platinum UK to Platinum Ireland.

Under current Irish law, Platinum Ireland will be taxed at a 25% corporate tax rate on non-trading income and a 16% corporate tax rate on trading income (the latter to be reduced to 12.5% as of January 1, 2003). There will be no withholding tax on dividends distributed from Platinum Ireland to the Company.

7. Employee Benefit Plans and Stock Option Plans

The Company intends to offer benefit plans and stock option plans to its employees as a form of compensation.

8. Reinsurance

The Company's ceded reinsurance program will be structured to protect its operations from potential losses in excess of acceptable levels. Reinsurers will be expected to honor their obligations under ceded reinsurance contracts. In the event these companies are unable to honor their obligations, the Company will pay these amounts. Allowances for uncollectible reinsurance will be established for possible nonpayment of such amounts due, as deemed necessary.

Upon the commencement of the Company's operations, it will enter into Quota Share Retrocession Agreements with St. Paul to transfer to the Company, St. Paul's rights and obligations, under specified ceded reinsurance contracts.

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9. Segment Information

Platinum Holdings will have three reportable segments, which will consist of Global Property and Marine, Global Casualty and Finite Risk. These segments are consistent with the global manner in which Platinum Holdings' leadership intends to manage the business.

The Global Property and Marine segment will include principally property and marine reinsurance coverages that will be written by Platinum Holdings, both in the United States and foreign markets. The majority of the property business will consist of catastrophe excess-of-loss reinsurance treaties. The segment will also include property per-risk excess-of-loss treaties and North American property surplus lines treaties. Marine reinsurance will include coverages for hull and cargo, primarily under excess-of-loss treaties.

The Global Casualty segment will include principally general casualty, automotive casualty, workers compensation, and environmental coverages. This segment will also include professional liability coverages, including directors and officers, and errors and omissions reinsurance. Also included will be accident and health reinsurance in the United States, in the form of self-insured medical stop loss coverages. Reinsurance coverages throughout the global casualty segment will generally be in the form of excess-of-loss treaties, including umbrella coverages.

The Finite Risk segment will include principally non-traditional reinsurance treaties for leading insurance companies worldwide. Products will include multi-year funded excess-of-loss treaties, aggregate stop loss treaties, finite quota share treaties, loss portfolio transfers and adverse loss development covers. The classes of risks written through finite products will generally be consistent with the classes covered by Platinum Holdings' traditional reinsurance products.

The accounting policies of the segments will be the same as those described in the summary of significant accounting policies.

10. Statutory Requirements and Dividend Restrictions

Platinum Holdings' insurance subsidiaries will be subject to certain limitations on dividends that may be paid to Platinum Holdings based on solvency or other regulatory requirements in each jurisdiction. Such limitations generally require that dividends be paid from surplus and may require regulatory approval prior to payment.

11. Credit Facility Disclosure

Platinum Holdings has entered into a 364 day committed credit facility with a group of banks which will provide $100 million of aggregate borrowing capacity. The credit facility contains various covenants and agreements, including the requirement to maintain a specified tangible net worth and leverage ratios, and terminates on June 20, 2003 unless extended with the consent of the banks.

12. Contingent Liabilities

Expenses have been incurred associated with maintenance of the Company, including insurance costs, legal fees, bank expenses and salaries. These expenses have been paid by St. Paul, and the Company has agreed to reimburse St. Paul upon completion of the Public Offering. Total expenses incurred under this agreement as of June 30, 2002 were $5.1 million. Upon completion of the Public Offering, the Company will record these as liabilities on its consolidated financial statements.

F-11

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
The St. Paul Companies, Inc.:

We have audited the accompanying combined statements of identifiable underwriting assets and liabilities of The St. Paul Companies, Inc. Reinsurance Underwriting Segment (Predecessor) as of December 31, 2001, 2000 and 1999, and the related combined statements of underwriting results and identifiable underwriting cash flows for each of the years in the three-year period ended December 31, 2001. The combined statements are the responsibility of the Predecessor's management. Our responsibility is to express an opinion on these combined statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the combined statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall combined statement presentation. We believe that our audits provide a reasonable basis for our opinion.

The accompanying combined statements were prepared to present the historical underwriting results and identifiable cash flows of the Predecessor and the asset and liability balances specifically attributable to reinsurance underwriting operations of The St. Paul Companies, Inc. (St. Paul) as described in Note 1. The combined statements do not contain an allocation of St. Paul's equity structure, investment portfolio assets, investment income, or cash flows from investing and financing activities. Accordingly, the combined statements are not intended to be a complete presentation of Predecessor's or St. Paul's financial position, results of operations, or cash flows.

In our opinion, the combined statements referred to above present fairly, in all material respects, the identifiable underwriting assets and liabilities of The St. Paul Companies, Inc. Reinsurance Underwriting Segment (Predecessor) as of December 31, 2001, 2000 and 1999, and its underwriting results and its identifiable underwriting cash flows for each of the years in the three-year period ended December 31, 2001 in conformity with accounting principles generally accepted in the United States of America.

In connection with our audits of the combined statements, we also have audited the related combined financial statement schedules III through V, as listed in the index in Item 16(b) of Form S-1. These financial statement schedules are the responsibility of the Predecessor's management. Our responsibility is to express an opinion on these financial statement schedules based on our audits.

In our opinion, based on our audits such combined financial statement schedules III through V, when considered in relation to the combined statements taken as a whole, present fairly, in all material respects, the information set forth therein.

/s/ KPMG LLP
Minneapolis, Minnesota
April 23, 2002

F-12

THE ST. PAUL COMPANIES, INC.

REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR)
COMBINED STATEMENTS OF UNDERWRITING RESULTS

		Year Ended December 31,
		2001			2000			1999
		($ in millions)
Net premiums earned
Net premiums written		$	1,677		$	1,073		$	913
Change in unearned premiums			(84	)		48			(35	)

	Net premiums earned		1,593			1,121			878

Underwriting deductions
Losses and loss adjustment expenses			1,922			811			500
Policy acquisition expenses			315			336			220
Other underwriting expenses			82			88			82

	Total underwriting deductions		2,319			1,235			802

	Underwriting gain (loss)	$	(726	)	$	(114	)	$	76

See notes to combined statements.

F-13

THE ST. PAUL COMPANIES, INC.

REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR)
COMBINED STATEMENTS OF IDENTIFIABLE UNDERWRITING ASSETS AND LIABILITIES

			As of December 31,
			2001			2000			1999
			($ in millions)
Identifiable Assets
Reinsurance recoverables:
	Unpaid losses		$	1,256		$	902		$	596
	Paid losses			38			37			47
Premium receivable				720			528			530
Reserve for uncollectible premiums receivable				(13	)		(11	)		(10	)
Funds held by reinsureds				495			386			246
Deferred acquisition costs				107			86			87
Ceded unearned premiums				25			20			25

		Total identifiable assets	$	2,628		$	1,948		$	1,521

Identifiable Liabilities
Loss and loss adjustment expense reserves			$	4,949		$	3,568		$	3,451
Assumed paid losses payable				78			87			52
Unearned premium reserves				401			315			376
Reinsurance premiums payable				215			208			243
Underwriting expenses payable				181			262			200
Funds held under reinsurance treaties				169			71			52
Profit commission reserves				110			196			140
Financial reinsurance Liability				67			27			0

		Total identifiable liabilities	$	6,170		$	4,734		$	4,514

See notes to combined statements.

F-14

THE ST. PAUL COMPANIES, INC.

REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR)
COMBINED STATEMENTS OF IDENTIFIABLE UNDERWRITING CASH FLOWS

	Year Ended December 31,
	2001			2000			1999
	($ in millions)
Premiums collected, net	$	1,536		$	1,252		$	979
Loss and loss adjustment expenses paid		(952	)		(1,013	)		(905	)
Policy acquisition expenses paid		(398	)		(411	)		(298	)
Other underwriting expenses paid		(124	)		(42	)		58

Cash provided by (used by) underwriting	$	62		$	(214	)	$	(166	)

See notes to combined statements.

F-15

THE ST. PAUL COMPANIES, INC.

REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR)

NOTES TO COMBINED STATEMENTS

1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying combined statements pertain to the Reinsurance underwriting segment of The St. Paul Companies, Inc. ("St. Paul"), for the years ended December 31, 2001, 2000 and 1999. The Reinsurance underwriting segment of St. Paul is the predecessor to Platinum Underwriters Holdings, Ltd. and is hereinafter referred to as "Predecessor." Predecessor statements are presented on a combined basis, including certain insurance and reinsurance subsidiaries within the St. Paul group, as well as the underwriting results of the reinsurance departments of St. Paul Fire and Marine Insurance Company ("Fire and Marine") and United States Fidelity and Guarantee Company ("USF&G"), St. Paul's two largest U.S. insurance subsidiaries.

The statements of underwriting results reconcile to the Reinsurance underwriting segment results as reported in St. Paul's audited consolidated financial statements for each year in the three-year period ended December 31, 2001, which are included in St. Paul's Annual Report to Shareholders. It is the practice of St. Paul to evaluate the performance of its property-liability insurance underwriting segments on the basis of underwriting results.

The statements of identifiable underwriting assets and liabilities represent those balances that are specifically attributable to the reinsurance underwriting operations of St. Paul. St. Paul manages its property-liability investment portfolio in the aggregate, as part of a separate segment and does not allocate assets, or investment income, to its respective underwriting segments. There is also no equity structure allocated to Predecessor. For these reasons, a complete Predecessor balance sheet is not maintained.

Similarly, the statement of identifiable underwriting cash flows includes only cash flow activity that is specifically attributable to the underwriting operations of Predecessor, and does not include any cash flows from investing and financing activities.

Accounting Principles

The accompanying combined statements are prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP").

Predecessor's business is written by several of St. Paul's underwriting subsidiaries, which are required to file financial statements with state and foreign regulatory authorities. The accounting principles used to prepare these statutory financial statements follow prescribed or permitted accounting principles, which differ from U.S. GAAP. Prescribed statutory accounting practices include state laws, regulations and general administrative rules issued by the state of domicile as well as a variety of publications and manuals of the National Association of Insurance Commissioners ("NAIC"). Permitted statutory accounting practices encompass all accounting practices not so prescribed, but allowed by the state of domicile.

Elimination of One-Quarter Reporting Lag

In the first quarter of 2000, Predecessor eliminated the one-quarter reporting lag for its reinsurance operations based in the United Kingdom ("St. Paul Re U.K.") in order to report the results of those operations on a current basis. As a result, Predecessor's results for 2000 include St. Paul Re U.K.'s results for the fourth quarter of 1999 and all quarters of 2000. The incremental

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impact of eliminating the reporting lag, which consists of St. Paul Re-U.K.'s results for the three months ended December 31, 2000, was as follows.

	Year Ended December 31, 2000
	($ in millions)
Net premiums written	$	7
Net premiums earned		51
Underwriting loss		(10	)

Use of Estimates

These combined statements include estimates and assumptions that have an effect on the amounts reported. The most significant estimates are those relating to reserves for losses and loss adjustment expenses. These estimates are continually reviewed and adjustments are made as necessary, but actual results could be significantly different than expected when estimates were made.

Net Premiums Earned

Assumed reinsurance premiums are recognized as revenues proportionately over the coverage period. Net premiums earned are recorded in the statement of underwriting results, net of our cost to purchase reinsurance. Net premiums not yet recognized as revenue are recorded in the balance sheet as unearned premiums, gross of any ceded unearned premiums. Written and earned premiums, and the related costs, which have not yet been reported to Predecessor are estimated and accrued. Due to the time lag inherent in reporting of premiums by cedents, such estimated premiums written and earned, as well as related costs, may be significant. Differences between such estimates and actual amounts are recorded in the period in which the actual amounts are determined.

Reinstatement and additional premiums are accrued as provided for in the provisions of assumed reinsurance contracts and based on experience under such contracts. Reinstatement premiums are the premiums charged for the restoration of the reinsurance limit of a catastrophe contract to its full amount after payment by the reinsurer of losses as a result of an occurrence. These premiums relate to the future coverage obtained during the remainder of the initial policy term, and are earned over the remaining policy term. Additional premiums are premiums charged after coverage has expired, related to experience during the policy term, which are earned immediately. An allowance for uncollectible premiums is established for possible non-payment of such amounts due, as deemed necessary.

Insurance Losses and Loss Adjustment Expenses

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results net of ceded reinsurance, meaning that gross losses and loss adjustment expenses incurred are reduced by the amounts recovered or expected to be recovered under retrocessional contracts.

Reinsurance

Written premiums, earned premiums, and incurred losses and loss adjustment expenses reflect the net effects of assumed and ceded reinsurance transactions. Reinsurance accounting is followed for assumed and ceded transactions when risk transfer requirements have been met. These requirements involve significant assumptions being made related to the amount and timing of expected cash flows, as well as the interpretation of underlying contract terms. Assumed reinsurance contracts that do not transfer significant insurance risk are required to be accounted for as deposits. These contract deposits are accounted for as financing transactions, with interest expense credited to the contract deposit.

Insurance Reserves

The reserves for losses and LAE are estimated based on reports received from ceding companies, supplemented with analysis by the claims department and actuaries of Predecessor. These reserves include estimates of the total cost of claims that were reported, but not yet paid, and the cost of claims incurred but not yet reported ("IBNR"). Loss reserves are reduced for estimated amounts of salvage and subrogation recoveries. Estimated amounts recoverable from reinsurers on unpaid losses and LAE are reflected as assets.

For reported losses, reserves are established on a "case" basis within the parameters of coverage provided in the underlying insurance policy or reinsurance agreement. For IBNR losses, reserves are estimated using established actuarial methods. Case and IBNR reserve estimates consider such variables as past loss experience, changes in legislative conditions, changes in judicial interpretation of legal liability and policy coverages, and inflation.

Because many of the reinsurance coverages offered by Predecessor involve claims that may not ultimately be settled for many years after they are incurred, subjective judgments as to ultimate exposure to losses are an integral and necessary component of the loss reserving process. The inherent uncertainties of estimating loss reserves are further exacerbated for reinsurers by the significant amount of time that often elapses between the occurrence of an insured loss, the reporting of that loss to the primary insurer and, ultimately to the reinsurer, and the primary insurer's payment of that loss and subsequent indemnification by the reinsurer. Reserves are recorded by considering a range of estimates bounded by a high and low point. Within that range, management's best estimate is recorded. Reserves are continually reviewed, using a variety of statistical and actuarial techniques to analyze current claim costs, frequency and severity data, and prevailing economic, social and legal factors. Reserves established in prior years are adjusted as loss experience develops and new information becomes available. Adjustments to previously estimated reserves are reflected in financial results in the periods in which they are made.

While we believe the carried reserves make a reasonable provision for unpaid loss and LAE obligations, it should be noted that the process of estimating required reserves does, by its very nature, involve uncertainty. The level of uncertainty can be influenced by factors such as the

F-18

existence of long tail coverage (when loss payments may not occur for several years) and changes in claim handling practices, as well as the factors noted above, and actual claim payments and LAE could be significantly different from the estimates.

Liabilities for unpaid losses and LAE related to certain assumed reinsurance contracts are discounted to the present value of estimated future payments. Prior to discounting, these liabilities totaled $306.4 million, $198.7 million, and $72.7 million at December 31, 2001, 2000 and 1999, respectively. The total discounted liability reflected on our combined statements of identifiable underwriting assets and liabilities was $264.9 million, $146.7 million and $47.6 million at December 31, 2001, 2000 and 1999, respectively. The liabilities related to these reinsurance contracts were discounted using rates up to 7.5%, based on our return on invested assets or, in many cases, on yields contractually guaranteed to us on funds held by the ceding company, as permitted by the Vermont Department of Banking, Insurance, Securities and Healthcare Administration.

Policy Acquisition Expenses

The costs directly related to the acquisition of reinsurance contracts are referred to as policy acquisition expenses and consist of commissions and other direct underwriting expenses. Although these expenses are incurred when a reinsurance contract is written, such expenses are deferred and amortized over the same period as the corresponding premiums are recorded as earned revenues.

On a regular basis, an analysis of the recoverability of the deferred policy acquisition expenses, in relation to the expected recognition of revenues, including anticipated investment income is performed. Any adjustments are reflected as period costs. Should the analysis indicate that the acquisition costs are unrecoverable, further analyses are completed to determine if a reserve is required to provide for losses that may exceed the related unearned premiums.

Foreign Currency Translation

Functional currencies are assigned to foreign operations, which are generally the currencies of the local operating environment. Foreign currency amounts are remeasured to the functional currency, and the resulting foreign exchange gains or losses are reflected in income, outside of underwriting results. Functional currency amounts are then translated into U.S. dollars. The unrealized gain or loss from this translation is recorded in St. Paul's equity. Both the remeasurement and translation are calculated using current exchange rates for the balance sheet amounts and average exchange rates for revenues and expenses.

2. Related Party Transactions

The following summarizes Predecessor's related party transactions:

Reinsurance Transactions with Affiliates

Predecessor cedes certain business to two affiliated special purpose entities ("SPE") which were established by St. Paul for the purpose of increasing Predecessor's capacity to write certain

F-19

excess-of-loss reinsurance, principally property, marine, and aviation. The most significant of these agreements is with George Town Re. George Town Re was established by St. Paul in 1996 for the purpose of entering into a single reinsurance treaty with Predecessor, providing an additional $45.1 million of underwriting capacity over a 10-year period. Premiums ceded under these agreements were $5.2 million in 2001, $4.3 million in 2000, and $11.1 million in 1999. Losses ceded under these agreements totaled $9.8 million in 2001, $5.4 million in 2000, and $12.4 million in 1999.

Predecessor assumes certain primary business from other business segments of St. Paul. Premiums assumed under these agreements were $25.8 million in 2001, $6.2 million in 2000, and $7.6 million in 1999. Losses assumed under these agreements were $18.6 million in 2001, $7.7 million in 2000, and $1.6 million in 1999. Predecessor paid commissions of $9.5 million in 2001, $2.3 million in 2000, and $2.7 million in 1999, related to business assumed under these agreements.

Management Agreements with Affiliates

St. Paul management has entered into various agreements with affiliated parties, under arm's length terms. Under these agreements, the affiliated parties have agreed to perform investment management services for St. Paul Re U.K., guarantee the performance of St. Paul obligations, make funds available under a revolving loan agreement, and provide certain reinsurance coverage. Included in underwriting expenses are certain expenses allocated to Predecessor from St. Paul, including costs such as corporate communications and marketing, corporate finance, corporate actuarial, corporate tax, corporate audit, legal services, corporate executives, corporate human resources, and employee benefit costs. These allocated costs totaled $3.2 million, $6.3 million and $1.8 million in 2001, 2000, and 1999, respectively.

Other Transactions with Affiliates

Mountain Ridge Insurance Company ("Mountain Ridge"), one of the insurance legal entities included in Predecessor, holds notes receivable from St. Paul. Amounts due under these notes receivable totaled $59 million, $37 million and $17 million as of December 31, 2001, 2000 and 1999, respectively. Principal and all accrued interest on these notes are payable on demand. These demand notes are reflected as an asset and as additional paid-in capital, as permitted by the State of Vermont Department of Banking, Insurance, Securities and Healthcare Administration.

3. September 11, 2001 Terrorist Attack

On September 11, 2001, terrorists hijacked four commercial passenger jets in the United States. Two of the jets were flown into the World Trade Center towers in New York, NY, causing their collapse. The third jet was flown into the Pentagon building in Washington, DC, causing severe damage, and the fourth jet crashed in rural Pennsylvania. This terrorist attack caused significant loss of life and resulted in unprecedented losses for the property-casualty insurance industry.

Estimated gross losses and loss adjustment expenses incurred as a result of the terrorist attack totaled $931 million. The estimated net underwriting loss of $556 million from that event included an estimated benefit of $143 million from cessions made under various reinsurance agreements, a net

F-20

$141 million benefit from additional and reinstatement premiums, and a $91 million reduction in contingent commission expenses.

The estimated losses were based on a variety of actuarial techniques, coverage interpretation and claims estimation methodologies, and included an estimate of losses incurred but not reported, as well as estimated costs related to the settlement of claims. The estimate of losses is also based on the belief that property and casualty insurance losses from the terrorist attack will total between $30 billion and $35 billion for the insurance industry. This estimate of industry losses is subject to significant uncertainties and may change over time as additional information becomes available. A material increase in the estimate of industry losses would likely cause a corresponding material increase to Predecessor's provision for losses related to the attack.

The estimated underwriting loss of $556 million is recorded in the accompanying 2001 combined statement of underwriting results in the following line items:

		($ in millions)
Net premiums earned		$	141
Losses and loss adjustment expenses			(788	)
Other underwriting expenses			91

	Total underwriting loss	$	(556	)

The estimated underwriting loss of $556 million was distributed among Predecessor's segments as follows:

		($ in millions)
North American Property		$	233
North American Casualty			32
International			162
Finite Risk			129

	Total underwriting loss	$	556

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4. Reserves for Losses and Loss Adjustment Expenses

Reconciliation of Loss Reserves

The following table represents a reconciliation of beginning and ending loss and loss adjustment expense ("LAE") reserves for each of the last three years.

			Year Ended December 31,
			2001			2000			1999
			($ in millions)
Loss and LAE reserves at beginning of year, as reported			$	3,568		$	3,451		$	3,477
Less reinsurance recoverables on unpaid losses at beginning of year				(902	)		(596	)		(251	)

Net loss and LAE reserves at beginning of year				2,666			2,855			3,226
Provision for losses and LAE for claims incurred:
	Current year			1,827			936			668
	Prior years			95			(125	)		(168	)

		Total incurred		1,922			811			500

Losses and LAE payment for claims incurred:
	Current year			(232	)		(220	)		(175	)
	Prior years			(663	)		(780	)		(696	)

		Total paid		(895	)		(1,000	)		(871	)

	Net loss and LAE reserves at end of year			3,693			2,666			2,855
Plus reinsurance recoverables on unpaid Losses at end of year				1,256			902			596

Loss and LAE reserves at end of year, as reported			$	4,949		$	3,568		$	3,451

In 2001, prior year development was attributable to several lines of business. The North American Property segment continued to have worse than expected loss emergence, largely driven by certain property business underwritten through Predecessor's London office. Also included in this emergence was an increase in the reserve position of the surplus lines business which exhibited poor loss development in the 1999 and 2000 accident years.

A reduction in prior year losses was recorded for both 2000 and 1999. In both years, favorable prior year loss development was primarily attributable to better than expected loss emergence on the Casualty Excess book of business. As older underwriting years are maturing, they continue to display favorable emergence and current indications are significantly better than the initial ultimate loss estimates.

Environmental and Asbestos Reserves

Predecessor continues to have exposure, through its reinsurance of primary insurance contracts written many years ago, to claims alleging injury or damage from environmental pollution or seeking payment for the cost to clean up polluted sites. In addition, Predecessor has received asbestos injury claims tendered under general casualty policies that it reinsures.

F-22

The following table summarizes Predecessor's combined environmental and asbestos reserves balance at December 31, 2001 and 2000. Amounts in the "net" column are reduced by retrocessions.

	December 31,
	2001				2000
	Gross		Net		Gross		Net
	($ in millions)
Environmental	$	18	$	8	$	25	$	11
Asbestos		13		4		17		5

Total environmental and asbestos reserves	$	31	$	12	$	42	$	16

5. Employee Benefit Plans

Employees of Predecessor participate in various employee benefit, stock incentive, and retirement plans administered by St. Paul. Predecessor reimburses St. Paul for costs associated with these plans. The following summarizes underwriting expenses recorded by Predecessor in connection with each of these plans.

		Year Ended December 31,
		2001		2000		1999
		($ in millions)
Retirement Plans		$	6.2	$	3.8	$	1.8
Post Retirement Plans			0.3		0.3		0.3
Variable Stock Option Plan			0.1		0.6		0.8

	Total	$	6.6	$	4.7	$	2.9

In addition, St. Paul sponsors a stock based incentive program, the Long-Term Incentive Plan ("LTIP"), which is exclusive to certain employees of Predecessor. Underwriting expenses (benefits) recorded by Predecessor in connection with the LTIP totaled ($2.3) million in 2001, ($4.0) million in 2000, and $2.0 million in 1999.

6. Commitments and Contingencies

Financial Guarantees

We are contingently liable for a financial guarantee in the form of a credit enhancement, with total exposure of approximately $15 million as of December 31, 2001.

Lease Commitments

A portion of Predecessor's business activities is conducted in rented premises. Predecessor also enters into leases for equipment, such as office machines and computers. Total rental expense was $5.8 million in 2001, $9.3 million in 2000 and $9.2 million in 1999.

F-23

Certain leases are non-cancelable, and Predecessor would remain responsible for payment even if the space or equipment was no longer utilized. On December 31, 2001, the minimum rents for which Predecessor would be liable under these types of leases are as follows: $6.9 million in 2002, $3.4 million in 2003, $1.7 million in 2004, $.8 million in 2005, $.8 million in 2006, and $2.8 million thereafter.

Legal Matters

In the ordinary course of conducting business, we have been named as defendants in various lawsuits. Some of these lawsuits attempt to establish liability under reinsurance contracts issued by our underwriting operations. Plaintiffs in these lawsuits are asking for money damages or to have the court direct the activities of our operations in certain ways. It is possible that the settlement of these lawsuits may be material to our results of operations and liquidity in the period in which they occur. However, we believe the total amounts that we, and our subsidiaries, will ultimately have to pay in these matters will have no material effect on our overall financial position.

7. Fourth Quarter 2001 Strategic Review

In December 2001, St. Paul announced the results of a strategic review of all of its operations, which included a decision to exit a number of businesses and countries. These decisions included the narrowing of product offerings and geographic presence relative to Predecessor's businesses. As part of that review, it was determined that Predecessor would no longer underwrite aviation or bond and credit reinsurance, or offer certain financial risk and capital markets reinsurance products. Predecessor would also substantially reduce the North American business underwritten in London. Predecessor would focus on several areas, including property catastrophe reinsurance, excess-of-loss casualty reinsurance, marine and traditional finite reinsurance.

The following table presents the net premiums earned and underwriting results for 2001, 2000 and 1999 for the businesses to be exited under these actions, including the allocation of St. Paul's corporate excess-of-loss reinsurance programs.

	Year Ended December 31,
	2001			2000			1999
	($ in millions)
Net premiums earned	$	362		$	307		$	116
Underwriting results		(318	)		(84	)		(153	)

8. Reinsurance

The primary purpose of Predecessor's ceded reinsurance program, including the aggregate excess-of-loss coverages discussed below, is to protect its operations from potential losses in excess of acceptable levels. Reinsurers are expected to honor their obligations under ceded reinsurance contracts. In the event these companies are unable to honor their obligations, Predecessor will pay these amounts. Allowances have been established for possible nonpayment of such amounts due.

F-24

The largest concentrations of total reinsurance recoverables and ceded unearned premiums at December 31, 2001 were with Underwriters Re-Bermuda ("Underwriters Re") and with General Reinsurance Corporation ("Gen Re"). Gen Re, accounting for approximately 11.6% of Predecessor's recoverables, is rated "A++" by A.M. Best, "Aaa" by Moody's and "AAA" by Standard and Poor's for its financial strength. Although Underwriters Re (accounting for approximately 20.4% of Predecessor's recoverables) is not rated by the major rating agencies, these recoverables are fully collateralized with funds held and letters of credit.

Predecessor's underwriting results in 2001, 2000 and 1999 were impacted by the St. Paul corporate aggregate excess-of-loss reinsurance program that were entered into effective January 1 of each year (hereinafter referred to as the "St. Paul corporate program"). Coverage under the St. Paul corporate program treaties was triggered when St. Paul's incurred insurance losses and LAE across all lines of business exceeded accident year attachment loss ratios specified in the treaty. Predecessor results also benefited from a separate aggregate excess-of-loss reinsurance treaty, exclusive to Predecessor in each year that were unrelated to the St. Paul corporate program. The combined impact of these treaties (together the "reinsurance treaties") is included in the table that follows.

		Year Ended December 31,
		2001			2000		1999
		($ in millions)
St. Paul Corporate Aggregate Excess-of-Loss Reinsurance Program
Ceded premiums written		$	(67	)	$	80	$	89
Ceded losses and loss adjustment expenses			(126	)		140		164
Ceded premiums earned			(67	)		80		89

	Net underwriting benefit (detriment)	$	(59	)	$	60	$	75

Predecessor Aggregate Treaty
Ceded premiums written		$	119		$	55	$	62
Ceded losses and loss adjustment expenses			278			122		150
Ceded premiums earned			119			55		62

	Net underwriting benefit	$	159		$	67	$	88

Combined total
Ceded premiums written		$	52		$	135	$	151
Ceded losses and loss adjustment expenses			152			262		314
Ceded premiums earned			52			135		151

	Net underwriting benefit	$	100		$	127	$	163

The impact of the 2000 and 1999 St. Paul corporate aggregate excess-of-loss reinsurance program treaties was allocated to Predecessor, based on its incurred losses and LAE, relative to both the incurred losses and LAE of St. Paul's other underwriting segments, and the loss ratio attachment point as prescribed in the contracts. The 2001 amounts shown above include the

F-25

impact of a reallocation of premiums and losses ceded in 2000 and 1999. This reallocation was necessary to reflect the impact of differences between St. Paul's actual 2001 experience on losses ceded to the corporate program in 2000 and 1999, by segment, and the anticipated experience on those losses in 2000 and 1999 when the initial segment allocation was made.

During 2001, St. Paul did not cede losses to its corporate aggregate excess-of-loss reinsurance program. Ceded written and earned premiums in 2001 included $2 million representing the allocation to Predecessor of the initial deposit premiums under the 2001 corporate aggregate excess-of-loss reinsurance program treaty.

The effect of assumed and ceded reinsurance on premiums written, premiums earned and insurance losses and loss adjustment expenses is as follows (including the impact of the reinsurance treaties):

		Year Ended December 31
		2001		2000		1999
		($ in millions)
Premiums Written
Assumed		$	1,854	$	1,327	$	1,231
Ceded			177		254		318

	Net premiums written	$	1,677	$	1,073	$	913

Premiums Earned
Assumed		$	1,765	$	1,381	$	1,192
Ceded			172		260		314

	Total premiums earned	$	1,593	$	1,121	$	878

Insurance Losses and Loss Adjustment Expenses
Assumed		$	2,318	$	1,197	$	877
Ceded			396		386		377

Total insurance losses and loss adjustment expenses		$	1,922	$	811	$	500

9. Segment Information

Predecessor has four reportable segments, which consist of North American Property, North American Casualty, International, and Finite Risk. These segments are consistent with the manner in which Predecessor's business has been managed.

The North American Property segment consists of property reinsurance business underwritten for customers domiciled in the United States and Canada. Coverages offered included proportional, per-risk, excess-of-loss and surplus lines reinsurance, and catastrophe treaties. This segment also includes retrocessional reinsurance business and crop and agricultural reinsurance. The North American surplus lines business center has been aggregated with the North American Property segment as the aggregation is consistent with Predecessor's management structure and the business center meets the aggregation criteria required for external segment reporting.

F-26

The North American Casualty segment consists of casualty reinsurance underwritten for customers domiciled in the United States and Canada. Casualty coverages offered include general workers' compensation, medical professional, non-medical professional, directors and officers, employment practices, umbrella and environmental impairment. The Accident and Health business center, which consists predominantly of North American Risks, is aggregated with the North American Casualty segment as the aggregation is consistent with Predecessor's management structure and the business center meets the aggregation criteria required for external reporting. In addition, Predecessor has one significant account which includes both property and casualty business, but is managed as a business center within the North American Casualty segment. For this reason, this business center, which meets the aggregation criteria for external segment reporting, has been aggregated with the North American Casualty segment.

The International segment underwrites property and casualty reinsurance for customers domiciled outside of North America. This segment also includes the results from marine and aerospace business due to the global nature of those exposures.

The Finite Risk segment underwrites non-traditional reinsurance treaties for leading insurance companies worldwide. Non-traditional reinsurance combines limited traditional underwriting risk with financial risk protection and is generally utilized by large commercial customers who are willing to share in a portion of their insurance losses. Due to Predecessor's management structure, the Bond and Credit business center has been aggregated with the Finite Risk segment. This business center meets the aggregation criteria required for external segment reporting.

Predecessor monitors and evaluates the performance of its segments based principally on their underwriting results. Assets are not specifically identifiable for these segments. The accounting policies of the segments are the same as those described in the summary of significant accounting policies.

Geographic Areas

The following summary presents financial data of Predecessor's operations based on their location.

		Year Ended December 31,
		2001		2000		1999
		($ in millions)
Net Premiums Earned
U.S.		$	1,097	$	810	$	656
Non-U.S.			496		311		222

	Total net premiums earned	$	1,593	$	1,121	$	878

F-27

Segment Information

The summary below presents net premiums earned and underwriting results for Predecessor's reportable segments.

		Year Ended December 31,
		2001			2000			1999
		($ in millions)
Net Premiums Earned
North American Property		$	216		$	204		$	196
North American Casualty			588			319			245
International			242			188			160
Finite Risk			547			410			277

	Total net premiums earned	$	1,593		$	1,121		$	878

Underwriting Gain/(Loss)
North American Property		$	(232	)	$	(1	)	$	(28	)
North American Casualty			(215	)		(76	)		75
International			(109	)		(10	)		(21	)
Finite Risk			(170	)		(27	)		50

	Total underwriting gain/(loss)	$	(726	)	$	(114	)	$	76

Each of Predecessor's segments generates a significant volume of reinsurance premiums through two reinsurance brokers. Total premiums written through these two brokers totaled $587 million, $518 million, and $512 million for the years ended December 31, 2001, 2000 and 1999, respectively.

10. Quarterly Results of Operations (Unaudited)

The following is an unaudited summary of Predecessor's quarterly results for the last two years.

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
	($ in millions)
2001
Net premiums written	$	421		$	280		$	584		$	392
Net premiums earned		303			297			533			460
Underwriting loss		(22	)		(35	)		(512	)		(157	)

	First Quarter			Second Quarter			Third Quarter			Fourth Quarter
	($ in millions)
2000
Net premiums written	$	384		$	192		$	248		$	249
Net premiums earned		311			219			262			329
Underwriting loss		(71	)		(30	)		(13	)		(0	)

The fourth quarter of 2001 included the impact of a $56 million increase in Predecessor's estimate of losses incurred as a result of the September 11, 2001 terrorist attack.

F-28

THE ST. PAUL COMPANIES, INC.

REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR)

COMBINED STATEMENTS OF UNDERWRITING RESULTS

(Unaudited)

		Six Months Ended June 30,
		2002		2001
		($ in millions)
Net premiums earned
Net premiums written		$	663	$	701
Change in unearned premiums			19		(101	)

	Net premiums earned		682		600

Underwriting deductions
Losses and loss adjustment expenses			460		426
Policy acquisition expenses			178		188
Other underwriting expenses			35		42

	Total underwriting deductions		673		656

	Underwriting gain (loss)	$	9	$	(56	)

See notes to combined statements.

F-29

THE ST. PAUL COMPANIES, INC.

REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR)

COMBINED STATEMENTS OF IDENTIFIABLE ASSETS AND LIABILITIES

(Unaudited)

			As of June 30,
			2002			2001
			($ in millions)
Identifiable assets
Reinsurance recoverables:
	Unpaid losses		$	1,190		$	1,019
	Paid losses			38			78
Premium Receivable				687			576
Reserve for uncollectible premiums receivable				(28	)		(19	)
Funds held by reinsureds				540			446
Deferred policy acquisition costs				88			108
Ceded unearned premiums				35			28

		Total identifiable assets	$	2,550		$	2,236

Identifiable liabilities
Loss and loss adjustment expense reserves			$	4,822		$	3,663
Assumed paid losses payable				80			66
Unearned premium reserves				394			418
Reinsurance premiums payable				288			307
Underwriting expenses payable				147			293
Funds held under reinsurance treaties				145			95
Profit commission reserves				107			216
Financial reinsurance liability				106			51

		Total identifiable liabilities	$	6,089		$	5,109

See notes to combined statements.

F-30

THE ST. PAUL COMPANIES, INC.

REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR)

COMBINED STATEMENTS OF IDENTIFIABLE CASH FLOWS

(Unaudited)

	Six Months Ended June 30,
	2002			2001
	($ in millions)
Premiums collected, net	$	829		$	718
Loss and loss adjustment expenses paid		(573	)		(485	)
Policy acquisition expenses paid		(186	)		(221	)
Other underwriting expenses paid		(132	)		(22	)

Cash used by underwriting	$	(62	)	$	(10	)

See notes to combined statements.

F-31

THE ST. PAUL COMPANIES, INC.

REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR)

NOTES TO COMBINED STATEMENTS

(Unaudited)

1. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying combined financial statements pertain to the Reinsurance underwriting segment of The St. Paul Companies, Inc. ("St. Paul"), for the six-month periods ended June 30, 2002 and 2001. The Reinsurance underwriting segment of St. Paul is the predecessor to Platinum Underwriters Holdings, Ltd. and is hereinafter referred to as "Predecessor". Predecessor financial statements are presented on a combined basis, including certain insurance and reinsurance subsidiaries within the St. Paul group, as well as the underwriting results of the reinsurance departments of St. Paul Fire and Marine Insurance Company ("Fire and Marine") and United States Fidelity and Guarantee Company ("USF&G"), St. Paul's two largest U.S. insurance subsidiaries.

The statements of underwriting results reconcile to the Reinsurance underwriting segment results as reported in St. Paul's June 30, 2002 Form 10-Q as filed with the Securities and Exchange Commission. It is the practice of St. Paul to evaluate the performance of its property-liability insurance underwriting segments on the basis of underwriting results.

The statements of identifiable assets and liabilities represent those balances that are specifically attributable to the underwriting operations of Predecessor. St. Paul manages its property-liability investment portfolio in the aggregate, as part of a separate segment and does not allocate assets, or investment income, to its respective underwriting segments. There is also no equity structure allocated to Predecessor. For these reasons, a complete Predecessor balance sheet is not maintained.

Similarly, the statement of identifiable cash flows includes only cash flow activity that is specifically attributable to the underwriting operations of Predecessor, and does not include any cash flows from investment and financing activities.

Reference should be made to the Notes to Combined Statements on pages F-16 to F-28 of this document. The amounts in those notes have not changed materially except as in the ordinary course of business or as otherwise disclosed in these notes.

2. Reinsurance

The primary purpose of Predecessor's ceded reinsurance program is to protect its operations from potential losses in excess of acceptable levels. Reinsurers are expected to honor their obligations under ceded reinsurance contracts. In the event these companies are unable to honor their obligations, Predecessor will pay these amounts. Allowances have been established for possible nonpayment of such amounts due.

In 2002, St. Paul is not party to an all-lines, corporate excess-of-loss reinsurance treaty. In the three preceding years, cessions made under such treaties had a significant impact on Predecessor's reported financial results. In 2001, St. Paul was party to such an agreement that incepted on January 1 of that year. Coverage under that treaty was not triggered in the first six months of 2001. However, Predecessor recorded ceded written premiums of $2 million and ceded earned premiums of $1 million in those six months representing Predecessor's share of the initial premium paid for this treaty.

F-32

Predecessor was party to a separate aggregate excess-of-loss reinsurance treaty, unrelated to the corporate treaty, in both 2002 and 2001. Coverage has not been triggered under that treaty in the 2002, however in the first six months of 2002, Predecessor recorded ceded written premiums of $5 million, ceded earned premiums of $(3) million, and ceded loss and loss and loss adjustment expenses of $(25) million, for a net detriment of $22 million as a result of this treaty. Included in the net detriment for the quarter was a $14 million detriment due to the partial commutation of the 1999 and 2001 aggregate excess-of-loss reinsurance treaties. For the six months ended June 30, 2001, Predecessor ceded $45 million of written premiums, $43 million of earned premiums and $102 million of losses and loss adjustment expenses, for a net benefit of $59 million as a result of this treaty.

The effect of assumed and ceded reinsurance on premiums written, premiums earned and insurance losses and loss adjustment expenses was as follows:

		Six Months Ended June 30,
		2002			2001
		($ in millions)
Premiums Written
Assumed		$	702		$	803
Ceded			39			102

	Net premiums written	$	663		$	701

Premiums Earned
Assumed		$	711		$	694
Ceded			29			94

	Total premiums earned	$	682		$	600

Insurance Losses and Loss Adjustment Expenses
Assumed		$	432		$	570
Ceded			(28	)		144

	Total net insurance losses and loss adjustment expenses	$	460		$	426

3. Segment Information

Predecessor has four reportable segments: North American Property, North American Casualty, International, and Finite Reinsurance. These segments are consistent with the manner in which Predecessor's business has been managed.

Predecessor monitors and evaluates the performance of its segments based principally on their underwriting results. Assets are not specifically identifiable for these segments.

F-33

The summary below presents premiums earned and underwriting results for Predecessor's reportable segments.

		Six Months Ended June 30,
		2002			2001
		($ in millions)
Premiums earned
North American Property		$	125		$	75
North American Casualty			271			261
International			120			108
Finite Reinsurance			166			156

	Total premiums earned	$	682		$	600

Underwriting gain (loss)
North American Property		$	16		$	6
North American Casualty			(50	)		(109	)
International			40			53
Finite Reinsurance			3			(6	)

	Total underwriting gain/(loss)	$	9		$	(56	)

4. Exited Lines of Business

The following table presents the net premiums earned and underwriting results for the six months ended June 30, 2002 and 2001 for the lines of business to be exited, announced as part of St. Paul's December 2001 strategic review. Based on the relative results of the exited business and the continuing business, during the six months ended June 30, 2001, no portion of the corporate aggregate excess-of-loss reinsurance program was allocated to the exited business. During the six months ended June 30, 2002, St. Paul did not enter into a corporate aggregate excess-of-loss reinsurance program.

	Six Months Ended June 30,
	2002			2001
	($ in millions)

Net premiums earned	$	167		$	177
Underwriting results		(44	)		(6	)

F-34

5. Subsequent Event-George Town Re Commutation

George Town Re was established by St. Paul in 1996 for the purpose of entering into a single reinsurance treaty with Predecessor, providing additional underwriting capacity to Predecessor over a 10 year period. The agreement with George Town Re was terminated on July 8, 2002 and George Town Re was liquidated. Management does not expect there to be a material impact on Predecessor's underwriting results from this transaction.

6. Subsequent Event-European Flooding Catastrophe Losses

In August 2002, heavy rains and flooding caused substantial loss of life and property in parts of Europe. Based on preliminary information available, and applying customary actuarial techniques applicable to catastrophe events, Predecessor has estimated that incurred losses in respect of this event could be material to Predecessor's third quarter 2002 underwriting results.

F-35

No dealer, salesperson or other person is authorized to give any information or to represent anything not contained in this prospectus. You must not rely on any unauthorized information or representations. This prospectus is an offer to sell only the units offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus is current only as of its date.

TABLE OF CONTENTS

		Page
Prospectus Summary		1
Risk Factors		30
Use of Proceeds		53
Dilution		54
Dividend Policy		57
Capitalization		58
Ratio of Earnings to Fixed Charges		59
Pro Forma Financial Information		60
Management's Discussion and Analysis of Pro Forma Financial Condition and Underwriting Results		66
Business		90
Management		123
St. Paul Investment and Principal Shareholders		134
Certain Relationships and Related Transactions		136
Shares Eligible for Future Sale		147
Platinum Underwriters Finance, Inc.		148
Accounting Treatment		148
Description of the Equity Security Units		149
Description of the Senior Notes		169
Global Clearance and Settlement		179
Description of Platinum Holdings' Common Shares		183
U.S. Federal Income Tax Consequences		189
ERISA Considerations		205
Underwriting		207
Validity of the Securities		209
Experts		210
Available Information		210
Enforceability of Civil Liabilities under the United States Federal Securities Laws and Other Matters		210
The Predecessor Business		212
Index to Consolidated Financial Statements and Financial Information		F-1

Through and including , 2002 (the 25th day after the date of this prospectus), all dealers effecting transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This is in addition to a dealer's obligation to deliver a prospectus when acting as an underwriter and with respect to an unsold allotment or subscription.

5,000,000 Units

Platinum Underwriters Holdings, Ltd.

% Adjustable
Conversion-Rate Equity
Security Units

PROSPECTUS

Goldman, Sachs & Co.

PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution

The following table sets forth expenses and costs payable by Platinum Underwriters Holdings, Ltd. ("Platinum Holdings") and Platinum Underwriters Finance, Inc. ("Platinum Finance") expected to be incurred in connection with the issuance and distribution of the securities described in this Registration Statement. All amounts are estimated except for the Securities and Exchange Commisson's registration fee and the National Association of Securities Dealers Inc.'s filing fee.

	Amount to be paid
Securities and Exchange Commission registration fee	$	26,450
NASD filing fee		14,875
Legal fees and expenses		520,000
NYSE listing fees and expenses		50,425
Accounting fees and expenses		25,000
Printing and engraving fees		200,000
Miscellaneous		10,000

Total	$	846,750

Item 14. Indemnification of Directors and Officers

Section 98 of the Companies Act 1981 provides generally that a Bermuda company may indemnify its directors, officers and auditors against any liability which by virtue of Bermuda law otherwise would be imposed on them, except in cases where such liability arises from the fraud or dishonesty of which such director, officer or auditor may be guilty in relation to the company. Section 98 further provides that a Bermuda company may indemnify its directors, officers and auditors against any liability incurred by them in defending any proceeding, whether civil or criminal, in which judgment is awarded in their favor or in which they are acquitted if granted relief by the Supreme Court of Bermuda in certain proceedings arising under Section 281 of the Companies Act.

Platinum Holdings has adopted provisions in its bye-laws that provide that it shall indemnify its officers and directors to the maximum extent permitted under the Companies Act.

In addition, the Underwriting Agreement filed as Exhibit 1 to the Registration Statement provides for indemnification of Platinum Holdings, its officers and its directors by the Underwriters under certain circumstances.

The by-laws of Platinum Finance provide that Platinum Finance shall indemnify to the fullest extent permitted by law any person made, or threatened to be made a party to an action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person or, such person's testator or intestate is or was a director, officer or employee of Platinum Finance or serves or served at the request of Platinum Finance any other enterprise as a director, officer or employee.

The certificate of incorporation also provides that a director will not be personally liable to Platinum Finance or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent that the exemption from liability or limitation thereof is not permitted by the Delaware General Corporation Law.

Section 145 of the Delaware General Corporation Law permits indemnification against expenses, fines, judgments and settlements incurred by any director, officer or employee of a company in the event of pending or threatened civil, criminal, administrative or investigative proceedings, if such person was, or was threatened to be made, a party by reason of the fact that he or she is or was a director, officer or employee of the company. Section 145 also provides that

II-1

the indemnification provided for therein shall not be deemed exclusive of any other rights to which those seeking indemnification may otherwise be entitled.

In addition, the Underwriting Agreement filed as Exhibit 1 to the Registration Statement provides for indemnification of Platinum Finance, its officers and its directors by the Underwriters under certain circumstances.

Item 15. Recent Sales of Unregistered Securities

Platinum Holdings was incorporated in April 19, 2002 under the laws of Bermuda. Platinum Holdings expects to enter into a Formation and Separation Agreement pursuant to which, among other things, it will sell Common Shares in a private placement to The St. Paul Companies, Inc. (the number of shares being subject to adjustment as provided therein), contingent upon completion of the offering registered by this Registration Statement. The St. Paul Companies, Inc. is the sole purchaser in the private placement and is a "qualified institutional buyer" as such term is defined in Rule 144A under the Securities Act of 1933. Accordingly, the private placement will be made in reliance upon the exemptions from registration provided in such circumstance by the no-action letters regarding Black Box Incorporated (publicly available June 26, 1990) and Squadron, Ellenoff, Plesent & Lehrer (publicly available February 28, 1992). The Formation and Separation Agreement is filed as Exhibit 2 to this Registration Statement.

Item 16. Exhibits and Financial Statement Schedules

(a) Exhibits

Exhibit Number		Description
1		Form of Underwriting Agreement.
2		Form of Formation and Separation Agreement.*
3.1		Memorandum of Association of Platinum Holdings.*
3.2		Form of Restated Bye-Laws of Platinum Holdings.*
3.3		Certificate of Incorporation of Platinum Finance.
3.4		By-Laws of Platinum Finance.
4.1		Form of Certificate of the Common Shares, par value $0.01 per share, of Platinum Holdings.*
4.2		Form of Indenture.
4.3		Form of Indenture Supplement.
4.4		Form of Purchase Contract Agreement.
4.5		Form of Pledge Agreement.
4.6		Form of Senior Note of Platinum Finance (included in Exhibit 4.3).
4.7		Form of Guarantee of Platinum Holdings (included in Exhibit 4.3).
4.8		Form of Normal Unit (included in Exhibit 4.4).
4.9		Form of Stripped Unit (included in Exhibit 4.4).
5.1		Opinion of Conyers, Dill & Pearman.†
5.2		Opinion of Sullivan & Cromwell.
8		Opinion of Sullivan & Cromwell as to certain tax matters.
10.1		Employment Agreement between Jerome T. Fadden and The St. Paul Companies, Inc.*
10.2		Letter Agreement between Steven H. Newman and The St. Paul Companies, Inc.*
10.3		Employment Agreement between Michael D. Price and St. Paul Re, Inc.*
10.4		Letter Agreement between Steven H. Newman and The St. Paul Companies, Inc.*
10.5		Form of Employee Benefits and Compensation Matters Agreement.*

II-2

10.6		Form of Master Services Agreement.*
10.7		Form of U.K. Master Services Agreement.*
10.8		Form of Runoff Services Agreement.*
10.9		Form of U.K. Runoff Services Agreement.*
10.10		Form of Transitional Trademark License Agreement.*
10.11		Form of Registration Rights Agreement.*
10.12		Form of Underwriting Management Agreement.*
10.13		Form of U.K. Underwriting Agency and Underwriting Management Agreement.*
10.14		Form of Assignment and Assumption Agreement.*
10.15		Form of Sub Lease Agreement.*
10.16		Form of Option Agreement.*
10.17		Form of 100% Quota Share Retrocession Agreement (Traditional).*
10.18		Form of 100% Quota Share Retrocession Agreement (Non-Traditional - D-1).*
10.19		Form of 100% Quota Share Retrocession Agreement (Non-Traditional - A).*
10.20		Form of 100% Quota Share Retrocession Agreement (Non-Traditional - B-1).*
10.21		Form of 100% Quota Share Retrocession Agreement (Non-Traditional - B-2).*
10.22		Form of 100% Quota Share Retrocession Agreement (Non-Traditional - C).*
10.23		Form of 100% Quota Share Retrocession Agreement (Non-Traditional - D-2).*
10.24		Form of 100% Quota Share Retrocession Agreement (Non-Traditional - D Stop Loss).*
10.25		Form of 100% Quota Share Retrocession Agreement (Non-Traditional - D Spread Loss).*
10.26		Form of 100% Quota Share Retrocession Agreement (Non-Traditional - D-3).*
10.27		Form of 100% Quota Share Retrocession Agreement (Non-Traditional - D-4).*
10.28		Form of 100% Quota Share Retrocession Agreement (Non-Traditional - E).*
10.29		Form of U.K. Business Transfer Agreement.*
10.30		Form of UK 100% Quota Share Retrocession Agreement (Traditional).*
10.31		Form of UK 100% Quota Share Retrocession Agreement (Non-Traditional - A).*
10.32		Form of UK 100% Quota Share Retrocession Agreement (Non-Traditional - B-1).*
10.33		Form of 364-Day Credit Agreement.*
10.34		Amendment to the Letter Agreement between Jerome T. Fadden and The St. Paul Companies, Inc.*
10.35		Amendment to the Letter Agreement between Steven H. Newman and The St. Paul Companies, Inc.*
10.36		Amendment to the Letter Agreement between Michael D. Price and St. Paul Re., Inc.*
10.37		Form of Trust Agreement.*
10.38		Form of Trust Agreement.*
10.39		Form of Trust Agreement.*
10.40		Employment Agreement between William Robbie and St. Paul Re, Inc.*
10.41		Employment Agreement Between Michael Lombardozzi and St. Paul Re, Inc. *
12		Computation of ratios of earnings to fixed charges and of earnings to combined fixed charges and preferred stock dividends.*
23.1		Consent of KPMG LLP.
23.2		Consent of Conyers, Dill & Pearman (included in Exhibit 5.1).
23.3		Consent of Sullivan & Cromwell (included in Exhibit 5.2).

II-3

23.4		Consent of Sullivan & Cromwell (included in Exhibit 8).
24.1		Power of Attorney for Platinum Holdings.
24.2		Power of Attorney for Platinum Finance.
25.1		Statement of Eligibility of Trustee on Form T-1 under the Trust Indenture Act of 1939, as amended, of JPMorgan Chase Bank to act as Trustee under the Senior Debt Indenture for the Senior Notes of Platinum Finance.
25.2		Statement of Eligibility of Trustee on Form T-1 under the Trust Indenture Act of 1939, as amended, of JPMorgan Chase Bank to act as Trustee under the Senior Debt Indenture for the Guarantee by Platinum Holdings of the Senior Notes of Platinum Finance.

*: Incorporated by reference from Registration Statement No. 333-86909 of Platinum Underwriters Holdings, Ltd.
†: To be filed by amendment.

(b) Financial Statement Schedules of Predecessor

Schedule III		Supplementary Insurance Information
Schedule IV		Reinsurance
Schedule V		Valuation and Qualifying Accounts

Item 17. Undertakings

The undersigned Registrants hereby undertake:

(a) To provide to the underwriters at the closing specified in the underwriting agreements, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

(b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrants pursuant to the foregoing provisions described under "Item 14. Indemnification of Directors and Officers" above, or otherwise, the Registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment to the Registrants of expenses incurred or paid by a director, officer or controlling person of the Registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrants will, unless in the opinion of their counsels the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

(c)(1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrants pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this registration statement as of the time it was declared effective.

(2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hamilton, Bermuda, on the 30th day of August, 2002.

		PLATINUM UNDERWRITERS HOLDINGS, LTD.
		By:		/s/ JEROME T. FADDEN Name: Jerome T. Fadden Title: President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on August 30, 2002:

Name		Title
/s/ STEVEN H. NEWMAN * Steven H. Newman		Chairman of the Board of Directors
/s/ JEROME T. FADDEN Jerome T. Fadden		President, Chief Executive Officer, Principal Financial Officer, Principal Accounting Officer and Director
/s/ H. FURLONG BALDWIN * H. Furlong Baldwin		Director
/s/ JONATHAN F. BANK * Jonathan F. Bank		Director
/s/ DAN R. CARMICHAEL * Dan R. Carmichael		Director
/s/ JAY S. FISHMAN * Jay S. Fishman		Director
/s/ PETER T. PRUITT * Peter T. Pruitt		Director
/s/ DONALD PUGLISI * Donald Puglisi		Authorized Representative in the United States

*By:

/s/ JEROME T. FADDEN

Jerome T. Fadden, Attorney-in-fact

II-5

Pursuant to the requirements of the Securities Act of 1933, Platinum Underwriters Finance, Inc. has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hamilton, Bermuda, on the 30th day of August, 2002.

		PLATINUM UNDERWRITERS FINANCE, INC.
		By:		/s/ JEROME T. FADDEN Name: Jerome T. Fadden Title: President and Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities indicated on August 30, 2002:

Name		Title

/s/ STEVEN H. NEWMAN * Steven H. Newman		Chairman of the Board of Directors
/s/ JEROME T. FADDEN Jerome T. Fadden		President, Chief Executive Officer and Director
/s/ WILLIAM A. ROBBIE * William A. Robbie		Director and Principal Financial and Accounting Officer

*By:

/s/ JEROME T. FADDEN

Jerome T. Fadden, Attorney-in-fact

II-6

QuickLinks

PROSPECTUS SUMMARY
The Company
The ESU Offering
The ESU Offering—Explanatory Diagrams
Selected Pro Forma Financial Information and Operating Data
Pro Forma Consolidated Balance Sheet Data
Pro Forma Combined Underwriting Results
Pro Forma Underwriting Results by Operating Segment
RISK FACTORS
USE OF PROCEEDS
DILUTION
DIVIDEND POLICY
CAPITALIZATION
RATIO OF EARNINGS TO FIXED CHARGES
PRO FORMA FINANCIAL INFORMATION
Year Ended December 31, 2001
MANAGEMENT'S DISCUSSION AND ANALYSIS OF PRO FORMA FINANCIAL CONDITION AND UNDERWRITING RESULTS
Formation of Platinum Holdings and Presentation of Pro Forma Financial Information and Historical St. Paul Re Combined Financial Information
BUSINESS Industry Overview
Our Business
MANAGEMENT
ST. PAUL INVESTMENT AND PRINCIPAL SHAREHOLDERS
SHARES ELIGIBLE FOR FUTURE SALE
PLATINUM UNDERWRITERS FINANCE, INC.
ACCOUNTING TREATMENT
DESCRIPTION OF THE EQUITY SECURITY UNITS
DESCRIPTION OF THE SENIOR NOTES
GLOBAL CLEARANCE AND SETTLEMENT
DESCRIPTION OF PLATINUM HOLDINGS' COMMON SHARES
U.S. FEDERAL INCOME TAX CONSEQUENCES
ERISA CONSIDERATIONS
UNDERWRITING
VALIDITY OF THE SECURITIES
EXPERTS
AVAILABLE INFORMATION
ENFORCEABILITY OF CIVIL LIABILITIES UNDER UNITED STATES FEDERAL SECURITIES LAWS AND OTHER MATTERS
THE PREDECESSOR BUSINESS
Selected Combined Financial Data
Recent Developments
Management's Discussion and Analysis of Financial Condition and Underwriting Results of the Predecessor Business
Capital Resources and Liquidity
Exposures to Market Risk
Reserves for Losses and Loss Adjustment Expenses for Predecessor Business
Analysis of Loss and Loss Adjustment Expense (LAE) Development
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND FINANCIAL INFORMATION
INDEPENDENT AUDITORS' REPORT
PLATINUM UNDERWRITERS HOLDINGS, LTD. CONSOLIDATED BALANCE SHEET June 30, 2002
INDEPENDENT AUDITORS' REPORT
THE ST. PAUL COMPANIES, INC. REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR) COMBINED STATEMENTS OF UNDERWRITING RESULTS
THE ST. PAUL COMPANIES, INC. REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR) COMBINED STATEMENTS OF IDENTIFIABLE UNDERWRITING ASSETS AND LIABILITIES
THE ST. PAUL COMPANIES, INC. REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR) COMBINED STATEMENTS OF IDENTIFIABLE UNDERWRITING CASH FLOWS
THE ST. PAUL COMPANIES, INC. REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR) NOTES TO COMBINED STATEMENTS
THE ST. PAUL COMPANIES, INC. REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR) COMBINED STATEMENTS OF UNDERWRITING RESULTS (Unaudited)
THE ST. PAUL COMPANIES, INC. REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR) COMBINED STATEMENTS OF IDENTIFIABLE ASSETS AND LIABILITIES (Unaudited)
THE ST. PAUL COMPANIES, INC. REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR) COMBINED STATEMENTS OF IDENTIFIABLE CASH FLOWS (Unaudited)
THE ST. PAUL COMPANIES, INC. REINSURANCE UNDERWRITING SEGMENT (PREDECESSOR) NOTES TO COMBINED STATEMENTS (Unaudited)
PART II INFORMATION NOT REQUIRED IN THE PROSPECTUS
SIGNATURES
EX-1 3 a2088388zex-1.txt EXHIBIT 1 EXHIBIT 1 PLATINUM UNDERWRITERS HOLDINGS, LTD. PLATINUM UNDERWRITERS FINANCE, INC. 5,000,000 [ ]% ADJUSTABLE CONVERSION-RATE EQUITY SECURITY UNITS ---------------- FORM OF UNDERWRITING AGREEMENT September __, 2002 Goldman, Sachs & Co. [Co-Representatives] As representatives of the several Underwriters named in Schedule I hereto, c/o Goldman, Sachs & Co. 85 Broad Street, New York, New York 10004 Ladies and Gentlemen: Platinum Underwriters Holdings, Ltd., a Bermuda company (the "Company") proposes, subject to the terms and conditions stated herein, to enter into the Purchase Contracts (the "Purchase Contracts") with you on behalf of the Underwriters named in Schedule I hereto (the "Underwriters"). The Purchase Contracts are evidenced by the Unit Certificates and are referred to in the Purchase Contract Agreement, to be dated as , 2002 (the "Purchase Contract Agreement"), between the Company and JPMorgan Chase Bank, as Purchase Contract Agent (the "Purchase Contract Agent"), underlying an aggregate of 5,000,000 -% Adjustable Conversion-rate Equity Security Units with a stated amount of $25 (the "Firm Units"). In connection therewith, the Company and its indirect subsidiary, Platinum Underwriters Finance, Inc., a Delaware corporation ("Platinum Finance"), propose, subject to the terms and conditions stated herein, that Platinum Finance issue and sell to the Underwriters an aggregate of $125,000,000 of -% senior notes (the "Senior Notes"), guaranteed by the Company on a senior, unsecured basis (the "Guarantees"). The Senior Notes and the Guarantees will be issued pursuant to an Indenture, to be dated as of , 2002 (the "Base Indenture"), between the Company, Platinum Finance and JPMorgan Chase Bank, as Trustee (the "Trustee"), as supplemented by the First Supplemental Indenture, to be dated as of , 2002 (the "First Supplemental Indenture and, together with the Base Indenture, the "Indenture") between the Company, Platinum Finance and the Trustee. In connection with the Purchase Contract Agreement, pursuant to the Pledge Agreement, to be dated as of , 2002 (the "Pledge Agreement"), among the Company, the Purchase 1 Contract Agent and , as collateral agent and securities intermediary (the "Collateral Agent"), the Senior Notes issued hereunder initially will be pledged by the Purchase Contract Agent on behalf of the holders of the Units to secure such holders' obligations to the Company under the Purchase Contracts underlying such Units. The rights to purchase newly issued Common Shares, par value $0.01 per share, of the Company (the "Issuable Common Shares") under a Purchase Contract, together with an ownership interest in a Pledged Note or Pledged Treasury Consideration or a Pledged Treasury Security securing such Purchase Contract, subject to (a) the obligations owed to the Company under such Purchase Contract and (b) the pledge arrangements under the Pledge Agreement securing the foregoing obligations, collectively constitute an Adjustable Conversion-rate Equity Security Unit (a "Unit"). Unless the context otherwise requires, for purposes of this Agreement, the act of entering into a Purchase Contract underlying a Unit and purchasing an ownership interest in a Note underlying a Unit shall be referred to as a "purchase" of such Unit. In addition to the purchase of Firm Units subject to the terms and conditions herein, the Company and Platinum Finance propose to grant the Underwriters an option to purchase up to 750,000 additional Units (the "Optional Units"). The Firm Units and any Optional Units purchased by the Underwriters are herein called the "Units". Concurrently with the offering of the Units, the Company is making an initial public offering of Common Shares (the "Firm Shares") and, at the election of the underwriters of such offering (the "Common Shares Underwriters"), up to an additional Common Shares (the "Optional Shares" and, together with the Firm Shares, the "Shares"), by means of a separate prospectus (the "Common Shares Prospectus") and pursuant to a separate underwriting agreement (the "Common Shares Underwriting Agreement"). On or prior to the First Time of Delivery (as defined in Section 5 hereof) or immediately thereafter, (i) The St. Paul Companies, Inc., a Minnesota corporation ("St. Paul"), and its subsidiaries that are engaged in the reinsurance business will (A) contribute $ million in cash and (B) retrocede certain reinsurance agreements, and contribute certain assets specified in Section 2.01 of the Formation and Separation Agreement (as defined in Schedule II hereof) (such reinsurance agreements and such assets collectively, the "Business"), to the Company and its subsidiaries and (ii) the Company will issue to St. Paul (A) __________ Common Shares at the First Time of Delivery and (B) up to ________ additional Common Shares in the event the Underwriters elect to purchase Optional Shares (the actions described in the foregoing clauses (i) and (ii), the "Transaction"). The Company will conduct the Business through its wholly-owned operating subsidiaries, Platinum Underwriters Reinsurance, Inc., a Maryland corporation that, prior to the First Time of Delivery, is indirectly owned by St. Paul ("Platinum US"), Platinum Re (UK) Limited, a U.K. company ("Platinum UK"), and Platinum Underwriters Bermuda, Ltd., a Bermuda company ("Platinum Bermuda"). The Company will own Platinum US and Platinum UK through its wholly-owned intermediate holding subsidiary, Platinum Regency Holdings, an Ireland company ("Platinum Ireland" and, together with Platinum UK and Platinum Bermuda, the "Non-U.S. Subsidiaries"). Platinum US will be owned directly by Platinum Finance, which is a wholly-owned subsidiary of Platinum Ireland. As used in this Agreement, the "Filed Agreements" shall mean those agreements set forth on Schedule II hereto, each of which has been or will be executed and delivered in connection with the Transaction. Capitalized terms used herein without definition shall be used as defined in the Purchase Contract Agreement (as defined herein). 1. The Company and Platinum Finance, jointly and severally, represent and warrant to, and agree with, each of the Underwriters that: 2 (a) A registration statement on Form S-1 (File No. 333-....) (the "Initial Registration Statement") in respect of the Units, the Purchase Contracts and the Senior Notes underlying the Units, the Guarantees and the Issuable Common Shares (collectively, the "Securities"), has been filed with the Securities and Exchange Commission (the "Commission"); the Initial Registration Statement and any post-effective amendment thereto, each in the form heretofore delivered to you, and, excluding exhibits thereto, to you for each of the other Underwriters, have been declared effective by the Commission in such form; other than a registration statement, if any, increasing the size of the offering (a "Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the "Act"), which became effective upon filing, no other document with respect to the Initial Registration Statement has heretofore been filed with the Commission; and no stop order suspending the effectiveness of the Initial Registration Statement, any post-effective amendment thereto or the Rule 462(b) Registration Statement, if any, has been issued and no proceeding for that purpose has been initiated or, to the knowledge of the Company, threatened by the Commission (any preliminary prospectus included in the Initial Registration Statement or filed with the Commission pursuant to Rule 424(a) of the rules and regulations of the Commission under the Act is hereinafter called a "Preliminary Prospectus"; the various parts of the Initial Registration Statement and the Rule 462(b) Registration Statement, if any, including all exhibits thereto and including the information contained in the form of final prospectus filed with the Commission pursuant to Rule 424(b) under the Act in accordance with Section 6(a) hereof and deemed by virtue of Rule 430A under the Act to be part of the Initial Registration Statement at the time it was declared effective (but excluding Form T-1), each as amended at the time such part of the Initial Registration Statement became effective or such part of the Rule 462(b) Registration Statement, if any, became or hereafter becomes effective, are hereinafter collectively called the "Registration Statement"; and such final prospectus, in the form first filed pursuant to Rule 424(b) under the Act, is hereinafter called the "Prospectus"); (b) No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission; each Preliminary Prospectus, at the time of filing thereof, conformed in all material respects to the requirements of the Act and the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act") and, in each case, the rules and regulations of the Commission thereunder, and did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; PROVIDED, HOWEVER, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company or Platinum Finance by an Underwriter through Goldman, Sachs & Co. expressly for use therein; (c) The Registration Statement conforms, and the Prospectus and any further amendments or supplements to the Registration Statement or the Prospectus will conform, in all material respects to the requirements of the Act and the Trust Indenture Act and, in each case, the rules and regulations of the Commission thereunder, and do not and will not, as of the applicable effective date as to the Registration Statement and any amendment thereto, and as of the applicable filing date as to the Prospectus and any amendment or supplement thereto, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; PROVIDED, HOWEVER, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company or Platinum Finance by an Underwriter through Goldman, Sachs & Co. expressly for use therein; 3 (d) None of the Company, any of its subsidiaries or the Business has sustained since December 31, 2001, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus; and, since the respective dates as of which information is given in the Registration Statement and the Prospectus, there has not been any change in the capital stock or the capital or surplus or long-term debt of the Company, any of its subsidiaries or the Business or any material adverse change, or any development involving a prospective material adverse change, in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of the Company and its subsidiaries, taken as a whole, or of the Business, otherwise than as set forth or contemplated in the Prospectus; (e) At the First Time of Delivery, the Company and its subsidiaries will have good title to all personal property described in the Prospectus as being owned by them upon consummation of the Transaction, in each case free and clear of all liens, encumbrances and defects except such as are described in the Prospectus or such as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and its subsidiaries; and at the First Time of Delivery, any real property and buildings held under lease by the Company and its subsidiaries will be held by them under valid, subsisting and enforceable sub-leases and assignments of leases with such exceptions as are not material and do not materially interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries. The Company does not own any real property; (f) The Company has been duly incorporated and is validly existing as a company in good standing under the laws of Bermuda, with corporate power and authority to own its properties and conduct its business as described in the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification, or is subject to no material liability or disability by reason of the failure to be so qualified in any such jurisdiction; each subsidiary of the Company has been duly incorporated and is validly existing as a corporation or a company in good standing under the laws of its jurisdiction of organization, with corporate power and authority to own its properties and conduct its business as described in the Prospectus, and has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each jurisdiction in which it owns or leases properties or conducts any business, or will own or lease property or conduct business at the First Time of Delivery, so as to require such qualification, or is subject to no material liability or disability by reason of the failure to be so qualified in any such jurisdiction; (g) Each of this Agreement, the Jurisdiction Agreement, dated as of the date hereof (the "Units Jurisdiction Agreement"), among the Company, Platinum Finance, St. Paul and the Underwriters, the Common Shares Underwriting Agreement and the Jurisdiction Agreement, dated as of the date hereof (the "Common Shares Jurisdiction Agreement" and together with the Units Jurisdiction Agreement, the "Jurisdiction Agreements"), among the Company, St. Paul and the Common Shares Underwriters, has been duly authorized, executed and delivered by the Company; and each of this Agreement and the Units Jurisdiction Agreement has been duly authorized, executed and delivered by Platinum Finance; (h) Except as described in the Prospectus, each of the Company and its subsidiaries (i) was formed solely for the purpose of engaging in the Transaction and the transactions contemplated hereby and by the Common Shares Underwriting Agreement and the Filed Agreements and operating 4 the Business after the First Time of Delivery and (ii) has not engaged in any business activities, conducted any operations, entered into any agreements or contracts, incurred any liabilities, or owned any assets or property, other than in connection with the Transaction and the transactions contemplated hereby and by the Common Shares Underwriting Agreement and the Filed Agreements; (i) The Company has an authorized capitalization as set forth in the Prospectus, and all of the issued shares of capital stock of the Company have been duly authorized and validly issued, are fully paid and non-assessable and conform in all material respects to the description of the capital stock contained in the Prospectus; all of the issued shares of capital stock of each subsidiary of the Company have been duly authorized and validly issued, are fully paid and non-assessable and will be owned directly or indirectly by the Company at the First Time of Delivery, free and clear of all liens, encumbrances, equities or claims; except as described in the Prospectus under the captions "Certain Relationships and Related Transactions--Formation and Separation Agreement--Pre-Emptive Rights" and "Certain Relationships and Related Transactions--Option Agreement", the holders of outstanding shares of capital stock of the Company are not entitled to preemptive or other rights to acquire the Shares; there are no outstanding securities convertible into or exchangeable for, or warrants, rights or options to purchase from the Company, or obligations of the Company to issue, Common Shares or any other class of capital stock of the Company (except for the Units and as set forth in the Prospectus under the captions "Management", "Certain Relationships and Related Transactions--Option Agreement" and "Underwriting"); there are no restrictions on subsequent transfers of the Shares under the laws of Bermuda or the United States (other than, pursuant to the securities laws of the United States, by affiliates of the Company and other than as described in the Prospectus under the caption "Description of Platinum Holdings' Common Shares"); and no party has the right to require the Company to register securities except as disclosed in the Prospectus; (j) All of (i) the Shares to be issued and sold by the Company to the Common Shares Underwriters under the Common Shares Underwriting Agreement and (ii) the Common Shares to be issued by the Company to St. Paul in the Transaction (the "St. Paul Investment Shares"), have been duly authorized and, when issued and delivered against payment therefor as provided in the Common Shares Underwriting Agreement and the Formation and Separation Agreement, respectively, will be validly issued and fully paid and non-assessable and will conform in all material respects to the description of the Common Shares contained in the Prospectus; and the Issuable Common Shares have been duly authorized and reserved for issuance and, when issued and delivered in accordance with the provisions of the Purchase Contracts, the Purchase Contract Agreement and the Pledge Agreement, will be validly issued and fully paid and non-assessable and will conform to the description of the Common Shares contained in the Prospectus or to any amended or supplemented description of the Common Shares contained in a then effective report or registration statement filed pursuant to the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the issuance of Issuable Common Shares will not be subject to any preemptive or other similar right; (k) The Units have been duly authorized and, when duly executed, authenticated and delivered against payment therefor as provided herein and in the Purchase Contract Agreement, will constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles, and will be in the form contemplated by, and will be entitled to the benefits of, the Purchase Contract Agreement; at the First Time of Delivery, the Units will conform in all material respects to the 5 description thereof contained in the Prospectus; and the issuance of the Units is not subject to preemptive or other similar rights; (l) The Purchase Contracts underlying the Units have been duly authorized by the Company and, when duly executed, authenticated and delivered as provided herein and in the Purchase Contract Agreement, will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; at the First Time of Delivery, the Purchase Contracts will conform in all material respects to the description thereof contained in the Prospectus; and the issuance of the Purchase Contracts is not subject to any preemptive or similar rights; (m) The Indenture has been duly qualified under the Trust Indenture Act; and at the First Time of Delivery, the Indenture will conform in all material respects to the description thereof contained in the Prospectus; (n) The Senior Notes have been duly authorized by Platinum Finance and, when the Senior Notes are duly executed, authenticated, issued and delivered as provided herein and in the Indenture, the Senior Notes will constitute valid and legally binding obligations of Platinum Finance, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles, and will be in the form contemplated by, and will be entitled to the benefits of, the Indenture; and at the First Time of Delivery, the Senior Notes will conform in all material respects to the description thereof contained in the Prospectus; (o) The Guarantees have been duly authorized by the Company and, upon the due execution, authentication, issuance and delivery of the Senior Notes and the due endorsement of the Guarantees thereon, such Guarantees will have been duly executed and delivered and will constitute valid and binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles, and will be entitled to the benefits of the Indenture; and at the First Time of Delivery, the Guarantees will conform in all material respects to the description thereof contained in the Prospectus; (p) The Remarketing Agreement to be entered into by the Company, Platinum Finance, the Purchase Contract Agent and the Remarketing Agent, has been duly authorized by each of the Company and Platinum Finance and, when executed and delivered by each of the Company and Platinum Finance, will be duly executed and delivered by each of the Company and Platinum Finance; and at the time of such execution and delivery, the Remarketing Agreement will conform in all material respects to the description thereof contained in the Prospectus; (q) The Pledge Agreement creates, as collateral security for the performance when due by the holders from time to time of the Units of their respective obligations under the Purchase Contracts constituting part of such Units, a legal, valid and perfected security interest (as defined in the Uniform Commercial Code, as adopted and in effect in the State of New York (the "New York UCC")) in favor of the Collateral Agent for the benefit of the Company, in the right, title and interest of such holders in the securities and other assets and interests pledged to the Collateral Agent pursuant to the Pledge Agreement (the "Pledged Securities"); (r) The Units and the Issuable Common Shares have been approved for listing on the New York Stock Exchange (the "Exchange"), subject to notice of issuance, and at each Time of Delivery, 6 the Units issued at or prior to such Time of Delivery, and the Issuable Common Shares relating to such Units, upon notice of issuance, will be listed on the Exchange; (s) The issue and sale of the Securities, the Shares and the St. Paul Investment Shares, the compliance by each of the Company and Platinum Finance with all of the provisions of this Agreement and the Units Jurisdiction Agreement, the compliance by the Company with all of the provisions of the Common Shares Underwriting Agreement and the Common Shares Jurisdiction Agreement, and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or give rise to a right of termination under (i) the memorandum of association or bye-laws or other organizational document of the Company or any of its subsidiaries, (ii) any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the properties or assets of the Company or any of its subsidiaries is subject, or (iii) any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties, except, in the case of clause (ii) or (iii), as would not, individually or in the aggregate, have a material adverse effect on the consolidated financial position, shareholders' equity or results of operations of the Company and its subsidiaries (taken as a whole) following the First Time of Delivery, or affect the due authorization and valid issuance of the Securities, the Shares or the St. Paul Investment Shares; (t) Neither the Company nor any of its subsidiaries is in violation of its memorandum of association or bye-laws or other organizational documents or in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement, lease or other agreement or instrument to which it is a party or by which it or any of its properties may be bound; (u) The statements set forth in the Prospectus under the captions "Business--Regulation", "St. Paul Investment and Principal Shareholders", "Certain Relationships and Related Transactions", "Description of Platinum Holdings' Common Shares", "Description of the Equity Security Units", "Description of the Senior Notes", "Certain Tax Considerations" and "Underwriting", insofar as they purport to describe the provisions of the laws and documents referred to therein, are true and complete in all material respects; (v) Other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which the Company, any of its subsidiaries or the Business is a party or of which any property of the Company, any of its subsidiaries or the Business is the subject which, if determined adversely to the Company, any of its subsidiaries or the Business, would individually or in the aggregate have a material adverse effect on the consolidated financial position, shareholders' equity or results of operations of the Company and its subsidiaries, taken as a whole, or of the Business following the First Time of Delivery; and, to the best of the Company's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; (w) Each of the Filed Agreements when executed and delivered prior to the First Time of Delivery will have been duly authorized, executed and delivered by the Company or a subsidiary of the Company, as the case may be, and, assuming that parties to the Filed Agreements other than the Company and its subsidiaries have the power and authority to enter into and perform such agreements and that such agreements have been duly authorized, executed and delivered by such parties and constitute valid and binding agreements of such parties, will constitute a valid and binding agreement of the Company and each of its subsidiaries, as the case may be, enforceable against the 7 Company and each of its subsidiaries, in accordance with its terms, except that (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium, or other laws now or hereafter in effect affecting creditors' rights generally, (ii) the enforceability thereof is subject to the general principles of equity (whether such enforceability is considered in a proceeding in equity or at law), and (iii) no representation or warranty is made with respect to the enforceability of indemnification and contribution provisions relating to violations under the Act contained in the Formation and Separation Agreement (as defined in Schedule II hereto) and the Registration Rights Agreement (as defined in Schedule II hereto); (x) Except as described in the Prospectus, no consent, approval, authorization, registration or qualification of or with any governmental agency or body or any court is required to be obtained or made by the Company or any of its subsidiaries for the issue and sale of the Securities, the Shares and the St. Paul Investment Shares or the consummation of the Transaction and the transactions contemplated by this Agreement, the Common Shares Underwriting Agreement, the Jurisdiction Agreements and the Filed Agreements, except (i) the registration under the Act and the Exchange Act, of the Shares and the Securities, (ii) such consents, approvals, authorizations, registrations or qualifications as may be required under or state securities, Blue Sky or insurance securities laws in connection with the purchase and distribution of the Securities by the Underwriters and the Shares by the Common Shares Underwriters under the Common Shares Underwriting Agreement, (iii) the filing of the Prospectus under the Bermuda Companies Act 1981 in connection with the issue and sale of the Shares, (iv) such consents, approvals, authorizations, registrations or qualifications as may be required and have been obtained from the Bermuda Monetary Authority, (v) such consents, approvals, authorizations, registrations or qualifications that have been obtained or made under the Trust Indenture Act or the Insurance Laws (as defined below) of the State of Maryland, Bermuda and Ireland and (vi) such consents, approvals, authorizations, registrations or qualifications the failure of which to obtain or make would not, individually or in the aggregate have a material adverse effect on the consolidated financial position, shareholders' equity or results of operations of the Company and its subsidiaries, taken as a whole, following the First Time of Delivery, or affect the due authorization and valid issuance of the Securities, the Shares or the St. Paul Investment Shares; (y) The execution, delivery and performance of each of the Filed Agreements by each of the parties thereto and the consummation of the Transaction and the transactions therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or give rise to a right of termination under (i) the memorandum of association or bye-laws or other organizational document of the Company or any of its subsidiaries, (ii) any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the properties or assets of the Company or any of its subsidiaries is subject, or (iii) any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any of its subsidiaries or any of their properties, except, in the case of clause (ii) or (iii), as would not, individually or in the aggregate, have a material adverse effect on the consolidated financial position, shareholders' equity or results of operations of the Company and its subsidiaries, taken as a whole, following the First Time of Delivery, or affect the due authorization and valid issuance of the Securities, the Shares or the St. Paul Investment Shares; (z) Neither the Company nor Platinum Finance is or, after giving effect to the offering and sale of the Shares, the St. Paul Investment Shares and the Units, will be an "investment company", as such term is defined in the Investment Company Act of 1940, as amended (the "Investment Company Act"); 8 (aa) Except as described in the Prospectus, each of the Company and its subsidiaries is duly licensed as an insurance holding company or as an insurer or reinsurer, as the case may be, under the insurance laws (including laws that relate to companies that control insurance companies) and the rules, regulations and interpretations of the insurance regulatory authorities thereunder (collectively, "Insurance Laws"), of each jurisdiction in which the conduct of its business as described in the Prospectus requires such licensing, except for such jurisdictions in which the failure of the Company and its subsidiaries to be so licensed would not, individually or in the aggregate, have a material adverse effect on the consolidated financial position, shareholder's equity or results of operations of the Company and its subsidiaries, taken as a whole, following the First Time of Delivery. Each of the Company and its subsidiaries has made all required filings under applicable holding company statutes or other Insurance Laws in each jurisdiction where such filings are required, except for such jurisdictions in which the failure to make such filings would not, individually or in the aggregate, have a material adverse effect on the consolidated financial position, shareholder's equity or results of operations of the Company and its subsidiaries, taken as a whole, following the First Time of Delivery. Except as described in the Prospectus, each of the Company and its subsidiaries has all other necessary authorizations, approvals, orders, consents, certificates, permits, registrations and qualifications of and from all insurance regulatory authorities necessary to conduct their respective businesses as described in the Prospectus and all of the foregoing are in full force and effect, except where the failure to have such authorizations, approvals, orders, consents, certificates, permits, registrations or qualifications or their failure to be in full force and effect would not, individually or in the aggregate, have a material adverse effect on the consolidated financial position, shareholder's equity or results of operations of the Company and its subsidiaries, taken as a whole, following the First Time of Delivery. None of the Company or any of its subsidiaries has received any notification from any insurance regulatory authority or other governmental authority in the United States, Bermuda, Ireland, the United Kingdom or elsewhere to the effect that any additional authorization, approval, order, consent, certificate, permit, registration or qualification is needed to be obtained by either the Company or any of its subsidiaries; and no insurance regulatory authority has issued any order or decree impairing, restricting or prohibiting the payment of dividends by the Company or any of its subsidiaries; (bb) On or prior to the First Time of Delivery or immediately thereafter, the Company and its subsidiaries will own or possess or will be licensed to use, or will be able to acquire on reasonable terms, all material patents, patent rights, licenses, inventions, copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures), trademarks, services marks and trade names that are necessary for the Company and its subsidiaries to be able to conduct the business of reinsurance in the manner and to the extent described in the Prospectus, and none of the Company or any of its subsidiaries has received any notice of infringement of or conflict with asserted rights of others with respect to any of the foregoing, except for those which, if determined adversely to the Company or any of its subsidiaries, would not have a material adverse effect on the consolidated financial position, shareholder's equity or results of operations of the Company and its subsidiaries taken as a whole following the First Time of Delivery; (cc) Each of the Company and its subsidiaries has filed all statutory financial returns, reports, documents and other information required to be filed pursuant to the applicable Insurance Laws of the United States and the various states thereof, Bermuda, Ireland, the United Kingdom and each other jurisdiction applicable thereto, and has duly paid all taxes (including franchise taxes and similar fees) it is required to have paid under the applicable Insurance Laws of the United States and the various states thereof, Bermuda, Ireland, the United Kingdom and each other jurisdiction applicable 9 thereto, except where the failure, individually or in the aggregate, to file such return, report, document or information or to pay such taxes would not have a material adverse effect on the consolidated financial position, shareholders' equity or results of operations of the Company and its subsidiaries, taken as a whole, following the First Time of Delivery; and each of the Company and its subsidiaries maintains its books and records in accordance with, and is otherwise in compliance with, the applicable Insurance Laws of the United States and the various states thereof, Bermuda, Ireland, the United Kingdom and each other jurisdiction applicable thereto, except where the failure to so maintain its books and records or be in compliance would not individually or in the aggregate have a material adverse effect on the consolidated financial position, shareholders' equity or results of operations of the Company and its subsidiaries, taken as a whole, following the First Time of Delivery; (dd) Any tax returns required to be filed by the Company or any of its subsidiaries in any jurisdiction have been filed and any material taxes, including any withholding taxes, excise taxes, penalties and interest, assessments and fees and other charges due or claimed to be due from such entities have been paid, other than any of those being contested in good faith and for which adequate reserves have been provided or any of those currently payable without penalty or interest; (ee) The Company and Platinum Bermuda have received from the Bermuda Minister of Finance an assurance under The Exempted Undertakings Tax Protection Act, 1966 of Bermuda to the effect set forth in the Prospectus under the caption "Certain Tax Considerations--Taxation of the Company, Platinum US, Platinum UK, Platinum Bermuda and Platinum Ireland--Bermuda," and the Company has not received any notification to the effect (and is not otherwise aware) that such assurance may be revoked or otherwise not honored by the Bermuda government; (ff) The Company and its subsidiaries have not taken, and have no plan or intention to take, directly or indirectly, any action that would or would be reasonably expected to cause or result in (i) the Company and/or any Non-U.S. Subsidiary being treated as engaged in a trade or business within the United States for purposes of the Internal Revenue Code of 1986, as amended (the "Code"), (ii) the Company and/or any Non-U.S. Subsidiary being treated as a passive foreign investment company within the meaning of section 1297 of the Code, (iii) the Company and/or any Non-U.S. Subsidiary being treated as a controlled foreign corporation within the meaning of section 957 of the Code or (iv) any shareholder of the Company having "related party insurance income" inclusions for U.S. federal income tax purposes as a result of being a shareholder of the Company; (gg) No stamp or other issuance or transfer taxes or duties and no capital gains, income, withholding or other taxes are payable by or on behalf of the Underwriters to Bermuda or any political subdivision or taxing authority thereof or therein in connection with the sale and delivery by the Company of the Securities to or for the respective accounts of the Underwriters or the sale and delivery outside Bermuda by the Underwriters of the Securities to the initial purchasers thereof; and no registration, documentary, recording, transfer or other similar tax, fee or charge by any Bermuda government authority is payable in connection with the execution, delivery, filing, registration or performance of this Agreement; (hh) It is not necessary to register under the Act the St. Paul Investment Shares to be sold to St. Paul, because the issuance of such shares will be exempt from registration under the Act; (ii) There are no currency exchange control laws or withholding taxes, in each case of Bermuda, the United Kingdom or Ireland (or any political subdivision or taxing authority thereof), that would be applicable to the payment of dividends (i) on the Shares by the Company (other than as may apply to residents of Bermuda for Bermuda exchange control purposes) or (ii) by any of the Company's subsidiaries to the Company. The Bermuda Monetary Authority has designated the 10 Company and Platinum Bermuda as nonresident for exchange control purposes and has granted permission for the issue and transfer of the Shares (including permission for the issue or transfer of up to 20% of the Company's shares in issue from time to time to persons resident in Bermuda for exchange control purposes), subject to the condition that the Common Shares of the Company shall be listed on the Exchange or any other appointed stock exchange. Such permission has not been revoked and is in full force and effect, and the Company has no knowledge of any proceedings planned or threatened for the revocation of such permission. The Company and Platinum Bermuda are "exempted companies" under Bermuda law and have not (i) acquired and do not hold any land in Bermuda, other than that held by way of lease or tenancy for terms of not more than 21 years, without the express authorization of the Bermuda legislature, (ii) taken mortgages on land in Bermuda to secure an amount in excess of $50,000, without the consent of the Bermuda Minister of Finance, (iii) acquired any bonds or debentures secured by any land in Bermuda (other than certain types of Bermuda government securities), or (iv) conducted their business in a manner that is prohibited for "exempted companies" under Bermuda law. Neither the Company nor Platinum Bermuda has received notification from the Bermuda Monetary Authority or any other Bermuda governmental authority of proceedings relating to the modification or revocation of its designation as nonresident for exchange control purposes, its permission to issue and transfer the Shares, or its status as an "exempted company"; (jj) Under the Units Jurisdiction Agreement, each of the Company and Platinum Finance has validly and irrevocably submitted to the non-exclusive jurisdiction of any United States Federal or State court in the Borough of Manhattan, the City of New York, State of New York (a "New York Court") with respect to suits, actions or proceedings arising out of or in connection with violations of United States federal securities laws relating to offers and sales of the Units and has validly and irrevocably waived, to the fullest extent permitted by law, any objections that it may now or hereafter have to the laying of venue of any such suit, action or proceeding brought in any New York Court based on or arising under this Agreement or any claims that any such suit, action or proceeding brought in any New York Court has been brought in an inconvenient forum; and, under the Units Jurisdiction Agreement, the Company has duly and irrevocably appointed CT Corporation System as its agent to receive service of process with respect to actions arising out of or in connection with any such suit, action or proceeding, and service of process on CT Corporation System effected in the manner set forth in the Units Jurisdiction Agreement will be effective under the laws of Bermuda to confer personal jurisdiction over the Company; (kk) Immediately following the First Time of Delivery, St. Paul will have transferred to the Company and its subsidiaries those assets, liabilities and businesses that, together with the Filed Agreements, are necessary for the Company and its subsidiaries to be able to conduct the Business in the manner and to the extent described in the Prospectus; (ll) The Company has not taken, directly or indirectly, any action that has constituted or that was designed to or which has constituted or which might reasonably be expected to cause or result in, under the Exchange Act or otherwise, the stabilization or manipulation of the price of any security of St. Paul or the Company to facilitate the sale or resale of the Units; (mm) The historical financial statements and schedules of Predecessor (as defined in the Prospectus) included in the Prospectus and the Registration Statement (i) present fairly in all material respects the identifiable underwriting assets and liabilities of The St. Paul Companies, Inc. Reinsurance Underwriting Segment as of December 31, 2001, 2000 and 1999, and its underwriting results and its identifiable underwriting cash flows for each of the years in the three-year period ended December 31, 2001 in conformity with accounting principles generally accepted in the United States 11 of America, and (ii) comply as to form in all material respects with the applicable accounting requirements of the Act; (nn) Immediately following the First Time of Delivery, the Company will repurchase and cancel the Common Shares held by Codan Trust Company Limited, and immediately following such repurchase and cancellation, St. Paul and the holders of the Shares will be the only holders of issued and outstanding Common Shares; and (oo) KPMG, LLP, who have certified certain financial statements of the Company, its subsidiaries and the Business, are independent public accountants as required by the Act and the rules and regulations of the Commission thereunder. 2. St. Paul represents and warrants to, and agrees with, each of the Underwriters that: (a) St. Paul has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Minnesota; and each subsidiary of St. Paul that is a party to a Filed Agreement has been duly incorporated and is validly existing as a corporation or a company in good standing under the laws of its jurisdiction of organization, with corporate power and authority to own its properties and conduct its business as described in the Prospectus; (b) Each of this Agreement, the Common Shares Underwriting Agreement and the Jurisdiction Agreements has been duly authorized, executed and delivered by St. Paul; (c) All consents, approvals, authorizations, orders, registrations, clearances and qualifications of or with any court or governmental agency or body having jurisdiction over St. Paul or any of its subsidiaries or any of their properties required for the execution and delivery by St. Paul of this Agreement, the Common Shares Underwriting Agreement and the Jurisdiction Agreements to be duly and validly authorized have been obtained or made and are in full force and effect; (d) The compliance by St. Paul with all applicable provisions of this Agreement, the Common Shares Underwriting Agreement and the Jurisdiction Agreements and the consummation of the transactions herein and therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or give rise to a right of termination under (i) the certificate of incorporation or bylaws of St. Paul, (ii) any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which St. Paul is a party or by which St. Paul is bound or to which any of the properties or assets of St. Paul is subject, or (iii) any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over St. Paul or any of its properties, except, in the case of clause (ii) or (iii), as would not, individually or in the aggregate, have a material adverse effect on the consolidated financial position, shareholders' equity or results of operations of St. Paul and its subsidiaries, taken as a whole, or of the Business; (e) Each of the Filed Agreements when executed and delivered prior to the First Time of Delivery will have been duly authorized, executed and delivered by St. Paul or a subsidiary of St. Paul, as the case may be, and, assuming that parties to the Filed Agreements other than St. Paul have the power and authority to enter into and perform such agreements and that such agreements have been duly authorized, executed and delivered by such parties and constitute valid and binding agreements of such parties, will constitute a valid and binding agreement of St. Paul and its subsidiaries, enforceable against St. Paul and its subsidiaries, as the case may be, in accordance with its terms, except that (i) such enforcement may be subject to bankruptcy, insolvency, reorganization, moratorium, or other laws now or hereafter in effect affecting creditors' rights generally, (ii) the enforceability thereof is subject to the general principles of equity (whether such enforceability is considered in a proceeding in equity or at law), and (iii) no representation or warranty 12 is made with respect to the enforceability of the indemnification and contribution provisions relating to violations under the Act contained in the Formation and Separation Agreement and the Registration Rights Agreement; (f) Except as described in the Prospectus, no consent, approval, authorization, registration or qualification of or with any governmental agency or body or any court is required to be obtained or made by St. Paul or any of its subsidiaries for the consummation of the Transaction and the transactions contemplated by this Agreement, the Common Shares Underwriting Agreement, the Jurisdiction Agreements and the Filed Agreements, except (i) such as have been obtained or made under the Insurance Laws of the State of Maryland, Bermuda and Ireland and (ii) such consents, approvals, authorizations, registrations or qualifications the failure of which to obtain or make would not, individually or in the aggregate, have a material adverse effect on the consolidated financial position, shareholders' equity or results of operations of St. Paul and its subsidiaries, taken as a whole, or of the Business; (g) The execution, delivery and performance of each of the Filed Agreements by St. Paul or any of its subsidiaries party thereto and the consummation of the Transaction and the transactions therein contemplated will not conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or give rise to a right of termination under (i) the certificate of incorporation or bylaws or other organizational documents of St. Paul or any of its subsidiaries, (ii) any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which St. Paul or any of its subsidiaries is a party or by which St. Paul or any of its subsidiaries is bound or to which any of the properties or assets of St. Paul or its subsidiaries is subject, or (iii) any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over St. Paul, any of its subsidiaries, or any of their properties, except, in the case of clause (ii) or (iii), as would not, individually or in the aggregate, have a material adverse effect on the consolidated financial position, shareholders' equity or results of operations of St. Paul and its subsidiaries, taken as a whole, or of the Business; (h) The historical financial statements and schedules of Predecessor included in the Prospectus and the Registration Statement present fairly in all material respects the underwriting results of Predecessor as of the dates and for the periods indicated, comply as to form with the applicable accounting requirements of the Act and have been prepared in conformity with generally accepted accounting principles applied on a consistent basis throughout the periods involved (except as otherwise noted therein); (i) Other than as set forth in the Prospectus, there are no legal or governmental proceedings pending to which St. Paul or any of its subsidiaries in respect of the Business is a party or of which any property of St. Paul or any of its subsidiaries in respect of the Business is the subject which, if determined adversely to St. Paul or any of its subsidiaries in respect of the Business, would individually or in the aggregate have a material adverse effect on the consolidated financial position, shareholders' equity or results of operations of St. Paul and its subsidiaries, taken as a whole, or of the Business; and to St. Paul's knowledge, no such proceedings are threatened or contemplated by governmental authorities or threatened by others; and (j) St. Paul and its subsidiaries in respect of the Business has not sustained since December 31, 2001, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus; and, since December 31, 2001, there has not been any material adverse change, or any development 13 involving a prospective material adverse change, in or affecting the general affairs, management or results of operations of St. Paul or any of its subsidiaries in respect of the Business, otherwise than as set forth or contemplated in the Prospectus; (k) Under the Units Jurisdiction Agreement, St. Paul has validly and irrevocably submitted to the non-exclusive jurisdiction of any New York Court with respect to suits, actions or proceedings arising out of or in connection with violations of United States federal securities laws relating to offers and sales of the Units and has validly and irrevocably waived, to the fullest extent permitted by law, any objections that it may now or hereafter have to the laying of venue of any such suit, action or proceeding brought in any New York Court based on or arising under this Agreement or any claims that any such suit, action or proceeding brought in any New York Court has been brought in an inconvenient forum; and (l) KPMG, LLP, who have certified certain financial statements of St. Paul, its subsidiaries and the Business, are independent public accountants as required by the Act and the rules and regulations of the Commission thereunder. 3. Subject to the terms and conditions herein set forth, (a) the Company and each of the Underwriters, severally and not jointly, agree to enter into the Purchase Contracts underlying the number of Firm Units set forth opposite the name of such Underwriter in Schedule I hereto, (b) Platinum Finance agrees that it will issue and sell to each of the Underwriters, and each of the Underwriters agrees, severally and not jointly, to purchase from Platinum Finance, at a purchase price of ____% of the principal amount thereof, the principal amount of Senior Notes underlying the number of Firm Units set forth opposite the name of such Underwriter in Schedule I hereto, and (c) in the event and to the extent that the Underwriters shall exercise the election to enter into additional Purchase Contracts underlying Optional Units as provided below, (i) the Company and each of the Underwriters, severally and not jointly, agree to enter into that number of additional Purchase Contracts as to which such election shall have been exercised (to be adjusted by you so as to eliminate fractional Purchase Contracts) determined by multiplying the aggregate number of additional Purchase Contracts the Underwriters elect to purchase by a fraction, the numerator of which is the maximum number of Optional Units set forth opposite the name of such Underwriter in Schedule I hereto and the denominator of which is the maximum number of Optional Units set forth in total opposite the names of all such Underwriters in Schedule I hereto and (ii) Platinum Finance agrees that it will issue and sell to each of the Underwriters and each of the Underwriters agrees, severally and not jointly, to purchase from Platinum Finance at the purchase price set forth in clause (a) of this Section 3, an aggregate amount of Senior Notes underlying such additional Purchase Contracts. The Company hereby grants to the Underwriters the right to enter into, at their election, Purchase Contracts underlying up to 750,000 Optional Units and Platinum Finance hereby grants the Underwriters the right to purchase from Platinum Finance at their election up to an aggregate of $18,750,000 principal amount of Senior Notes underlying such Optional Units, for the sole purpose of covering overallotments in the sale of the Firm Units; provided, however that the Underwriters may exercise such overallotment elections only in integral multiples of 40 Optional Units. Any such election to enter into such additional Purchase Contracts and purchase such Senior Notes may be exercised only by written notice from you to the Company and Platinum Finance, given within a period of 13 calendar days after the date of this Agreement and setting forth the aggregate number of such additional Purchase Contracts to be entered into and principal amount of Senior Notes to be purchased and the date on which the related Optional Units are to be delivered, as determined by you but in no event earlier than the First Time of Delivery (as defined in Section 5 hereof) or, unless you, 14 the Company and Platinum Finance otherwise agree in writing, earlier than two or later than ten business days after the date of such notice. 4. (a) Upon the authorization by you of the release of the Firm Units, the several Underwriters propose to offer the Firm Units for sale upon the terms and conditions set forth in the Prospectus. (b) Each Underwriter agrees that it will not offer, sell or deliver any of the Units in any jurisdiction outside the United States except under circumstances that will result in compliance by the Company and the several Underwriters with the applicable laws thereof, and that it will take at its own expense whatever action is required to permit its purchase and resale of the Units in such jurisdictions. Each Underwriter understands that no action has been taken to permit a public offering in any jurisdiction outside the United States where action would be required for such purpose. Each Underwriter agrees not to cause any advertisement of the Units to be published in any newspaper or periodical or posted in any public place and not to issue any circular relating to the Units, except in any case with Goldman, Sachs & Co.'s express written consent and then only at its own expense. (c) Each Underwriter represents, warrants and agrees that: (i) it has not offered or sold and, prior to the expiry of a period of six months from the closing of the offering of the Units, will not offer or sell any Units to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (ii) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of the Financial Services and Markets Act 2000 (the "FSMA")) received by it in connection with the issue or sale of any Units in circumstances in which section 21(1) of the FSMA does not apply to the Company; and (iii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Units in, from or otherwise involving the United Kingdom. 5. (a) The Units to be purchased by each Underwriter hereunder, in definitive form, and in such authorized denominations and registered in the name of Cede & Co. and shall be delivered by or on behalf of the Company and Platinum Finance to Goldman, Sachs & Co., through the facilities of The Depository Trust Company ("DTC"), for the account of such Underwriter, against payment by or on behalf of such Underwriter of the purchase price therefor by wire transfer of Federal (same-day) funds to the account specified by Platinum Finance to Goldman, Sachs & Co. at least forty-eight hours in advance. The Company will cause the certificates representing the Units to be made available for checking and packaging at least twenty-four hours prior to the Time of Delivery (as defined below) with respect thereto at the office of [Sullivan & Cromwell, 125 Broad Street, New York, New York 10004] [DTC or its designated custodian] (the "Designated Office"). The time and date of such delivery and payment shall be, with respect to the Firm Units, 9:30 a.m., New York City time, on ............., 2002 or such other time and date as Goldman, Sachs & Co., the Company and Platinum Finance may agree upon in writing, and, with respect to the Optional Units, 9:30 a.m., New York time, on the date specified by Goldman, Sachs & Co. in the written notice given by Goldman, Sachs & Co. of the Underwriters' election to purchase such Optional Units, or such other time and date as Goldman, Sachs & Co., the Company and Platinum Finance may 15 agree upon in writing. Such time and date for delivery of the Firm Units is herein called the "First Time of Delivery", such time and date for delivery of the Optional Units, if not the First Time of Delivery, is herein called the "Second Time of Delivery", and each such time and date for delivery is herein called a "Time of Delivery". (b) The documents to be delivered at each Time of Delivery by or on behalf of the parties hereto pursuant to Section 9 hereof, including the cross receipt for the Units and any additional documents requested by the Underwriters pursuant to Section 9(p) hereof, will be delivered at the offices of Sullivan & Cromwell, 125 Broad Street, New York, New York 10004 (the "Closing Location"), and the Units will be delivered at the Designated Office, all at such Time of Delivery. A meeting will be held at the Closing Location at 2:00 p.m., New York City time, on the New York Business Day next preceding such Time of Delivery, at which meeting the final drafts of the documents to be delivered pursuant to the preceding sentence will be available for review by the parties hereto. For the purposes of this Section 5, "New York Business Day" shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York are generally authorized or obligated by law or executive order to close. 6. The Company and Platinum Finance agree, jointly and severally, with each of the Underwriters: (a) To prepare the Prospectus in a form approved by you and to file such Prospectus pursuant to Rule 424(b) under the Act not later than the Commission's close of business on the second business day following the execution and delivery of this Agreement, or, if applicable, such earlier time as may be required by Rule 430A(a)(3) under the Act; to make no further amendment or any supplement to the Registration Statement or Prospectus which shall be disapproved by you promptly after reasonable notice thereof; to advise you, promptly after it receives notice thereof, of the time when any amendment to the Registration Statement has been filed or becomes effective or any supplement to the Prospectus or any amended Prospectus has been filed and to furnish you with copies thereof; to advise you, promptly after it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or Prospectus, of the suspension of the qualification of the Securities for offering or sale in any jurisdiction, of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing of the Registration Statement or Prospectus or for additional information; and, in the event of the issuance of any stop order or of any order preventing or suspending the use of any Preliminary Prospectus or Prospectus or suspending any such qualification, promptly to use its reasonable best efforts to obtain the withdrawal of such order; (b) Promptly from time to time to take such action as you may reasonably request to qualify the Securities for offering and sale under the securities laws of such jurisdictions as you may request and to comply in all material respects with such laws so as to permit the continuance of sales and dealings therein in such jurisdictions for as long as may be necessary to complete the distribution of the Securities, provided that in connection therewith neither the Company nor Platinum Finance shall be required to qualify as a foreign corporation or to file a general consent to service of process in any jurisdiction or become subject to taxation in any jurisdiction; 16 (c) Prior to 10:00 A.M., New York City time, on the New York Business Day next succeeding the date of this Agreement and from time to time, to furnish the Underwriters with written and electronic copies of the Prospectus in New York City in such quantities as you may reasonably request, and, if the delivery of a prospectus is required at any time prior to the expiration of nine months after the time of issue of the Prospectus in connection with the offering or sale of the Units and if at such time any event shall have occurred as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered, not misleading, or, if for any other reason it shall be necessary during such period to amend or supplement the Prospectus in order to comply with the Act or the Trust Indenture Act, to notify you and upon your request to prepare and furnish without charge to each Underwriter and to any dealer in securities as many written and electronic copies as you may from time to time reasonably request of an amended Prospectus or a supplement to the Prospectus which will correct such statement or omission or effect such compliance, and in case any Underwriter is required to deliver a prospectus in connection with sales of any of the Units at any time nine months or more after the time of issue of the Prospectus, upon your request but at the expense of such Underwriter, to prepare and deliver to such Underwriter as many written and electronic copies as you may reasonably request of an amended or supplemented Prospectus complying with Section 10(a)(3) of the Act; (d) To make generally available to its securityholders as soon as practicable, but in any event not later than eighteen months after the effective date of the Registration Statement (as defined in Rule 158(c) under the Act), an earnings statement of the Company and its subsidiaries (which need not be audited) complying with Section 11(a) of the Act and the rules and regulations thereunder (including, at the option of the Company, Rule 158); (e) During the period beginning from the date hereof and continuing to and including the date 180 days after the date of the Prospectus, not to offer, sell, contract to sell or otherwise dispose of, except as provided hereunder, any Units, Purchase Contracts, Senior Notes, Common Shares or any securities of the Company or Platinum Finance that are substantially similar to the Units, Purchase Contracts, Senior Notes or Common Shares, including but not limited to any securities that are convertible into or exchangeable for, or that represent the right to receive, Common Shares or any such substantially similar securities (other than (i) the Shares issued pursuant to the Common Stock Underwriting Agreement, (ii) the St. Paul Investment Shares issued to St. Paul, and (ii) securities issued pursuant to any director or employee stock option or benefit plans existing on, or upon the conversion or exchange of convertible or exchangeable securities outstanding as of, the date of this Agreement), without the prior written consent of Goldman, Sachs & Co.; (f) To make available to its shareholders all information as required by the Exchange Act; (g) During a period of five years from the effective date of the Registration Statement, to furnish to you copies of all reports or other communications (financial or other) furnished to shareholders, and to deliver to you (i) as soon as they are available, copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange on which any class of securities of the Company is listed; and (ii) such additional non-confidential information concerning the business and financial condition of the Company as you may from time to time reasonably request (such financial statements to be on a 17 consolidated basis to the extent the accounts of the Company and its subsidiaries are consolidated in reports furnished to its shareholders generally or to the Commission); (h) To use the net proceeds received by it from the sale of the Units pursuant to this Agreement in the manner specified in the Prospectus under the caption "Use of Proceeds"; (i) To use its best efforts to list, subject to notice of issuance, the Units and the Issuable Common Shares on the Exchange. (j) To file with the Commission such information on Form 10-Q or Form 10-K as may be required by Rule 463 under the Act; (k) If the Company and Platinum Finance elect to rely upon Rule 462(b), the Company and Platinum Finance shall file a Rule 462(b) Registration Statement with the Commission in compliance with Rule 462(b) by 10:00 P.M., Washington, D.C. time, on the date of this Agreement, and the Company and Platinum Finance shall at the time of filing either pay to the Commission the filing fee for the Rule 462(b) Registration Statement or give irrevocable instructions for the payment of such fee pursuant to Rule 111(b) under the Act; (l) Prior to or contemporaneously with the First Time of Delivery, to take all actions necessary in order to consummate the Transaction and the concurrent offering of Common Shares by the Company; (m) Immediately upon receipt of payment for the Firm Shares, the Company shall cause all of the Common Shares held by Codan Trust Company Limited to be repurchased and cancelled; (n) To reserve and keep available at all times, free of preemptive rights, Issuable Common Shares to satisfy the obligation of the Company to issue Common Shares pursuant to the Purchase Contracts; and (o) To enter into the Remarketing Agreement with a nationally recognized investment banking firm at least one month prior to , 2005, such Remarketing Agreement to contain provisions that are consistent in all material respects with the descriptions in the Prospectus of the rights and obligations of each of the Company, Platinum Finance, the Purchase Contract Agent and the Remarketing Agent under the Remarking Agreement. 7. St. Paul agrees with each of the Underwriters that, during the period beginning from the date hereof and continuing to and including the date 180 days after the date of the Prospectus, it will not offer, sell, contract to sell or otherwise dispose of any Common Shares, Units, Purchase Contracts, Senior Notes or any securities of the Company or Platinum Finance that are substantially similar to the Common Shares, Units, Purchase Contracts or Senior Notes including but not limited to any securities that are convertible into or exchangeable for, or that represent the right to receive, Common Shares or any such substantially similar securities, without the prior written consent of Goldman, Sachs & Co. 8. The Company, Platinum Finance and St. Paul covenant and agree with the several Underwriters that the Company, Platinum Finance and St. Paul will pay or cause to be paid the following: (i) the fees, disbursements and expenses of the counsel and accountants of the Company and Platinum Finance in connection with the registration of the Securities under the Act and all other expenses in connection with the preparation, printing and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers; (ii) the cost of printing or 18 producing any Agreement among Underwriters, this Agreement, the Blue Sky Memorandum, closing documents (including any compilations thereof) and any other documents in connection with the offering, purchase, sale and delivery of the Securities; (iii) all expenses in connection with the qualification of the Securities for offering and sale under state securities laws as provided in Section 6(b) hereof, including the reasonable fees and disbursements of counsel for the Underwriters in connection with such qualification and in connection with the Blue Sky survey; (iv) all fees and expenses in connection with listing the Units and the Issuable Common Shares on the Exchange; (v) the filing fees incident to, and the reasonable fees and disbursements of counsel for the Underwriters in connection with, securing any required review by the National Association of Securities Dealers, Inc. of the terms of the sale of the Securities; (vi) the cost and charges of any transfer agent or registrar; (vii) any fees charged by securities rating services for rating the Units; (viii) the cost of preparing the Securities and any certificates thereof and any agreements, documents and instruments incident thereto; (ix) the fees and expenses of the Purchase Contract Agent and Collateral Agent, and any agent of the Purchase Contract Agent and the Collateral Agent, and the fees and disbursements of any counsel for the Purchase Contract Agent, Collateral Agent or Remarketing Agent in connection with the Purchase Contract Agreement, Pledge Agreement or Remarketing Agreement; (x) the fees and expenses of the Trustee under the Indenture, and any agent of the Trustee, and the fees and disbursements of any counsel for the Trustee in connection with the Indenture and the Notes; and (xi) all other costs and expenses incident to the performance of its obligations hereunder which are not otherwise specifically provided for in this Section. It is understood, however, that, except as provided in this Section, and Sections 10 and 13 hereof, the Underwriters will pay all of their own costs and expenses, including the fees of their counsel, stock transfer taxes on resale of any of the Units by them, and any advertising expenses connected with any offers they may make. 9. The obligations of the Underwriters hereunder, as to the Units to be delivered at each Time of Delivery, shall be subject, in their discretion, to the condition that all representations and warranties and other statements of the Company, Platinum Finance and St. Paul herein are, at and as of such Time of Delivery, true and correct, the condition that the Company, Platinum Finance and St. Paul shall have performed all of their respective obligations hereunder theretofore to be performed, and the following additional conditions: (a) The Prospectus shall have been filed with the Commission pursuant to Rule 424(b) within the applicable time period prescribed for such filing by the rules and regulations under the Act and in accordance with Section 6(a) hereof; if the Company and Platinum Finance have elected to rely upon Rule 462(b), the Rule 462(b) Registration Statement shall have become effective by 10:00 P.M., Washington, D.C. time, on the date of this Agreement; no stop order suspending the effectiveness of the Registration Statement or any part thereof shall have been issued and no proceeding for that purpose shall have been initiated or threatened by the Commission; and all requests for additional information on the part of the Commission shall have been complied with to your reasonable satisfaction; (b) Fried, Frank, Harris, Shriver & Jacobson, counsel for the Underwriters, shall have furnished to you such written opinion or opinions (a draft of each such opinion is attached as Annex II(a) hereto), dated such Time of Delivery in a form or forms acceptable to you, and such counsel shall have received such papers and information as they may reasonably request to enable them to render such opinion or opinions; (c) Sullivan & Cromwell, counsel for the Company and Platinum Finance, shall have furnished to you their written opinion or opinions (a draft of such opinion or opinions are 19 attached as Annex II(b) hereto), dated such Time of Delivery, in form and substance satisfactory to you, to the effect that: (i) Assuming each of this Agreement, the Common Shares Underwriting Agreement and the Jurisdiction Agreements has been duly authorized, executed and delivered by the Company under Bermuda law, each of this Agreement, the Common Shares Underwriting Agreement and the Jurisdiction Agreements has been duly executed and delivered by the Company. (ii) Each of this Agreement, the Common Shares Underwriting Agreement and the Jurisdiction Agreements has been duly authorized, executed and delivered by St. Paul. (iii) Platinum US has been duly incorporated and is an existing corporation in good standing under the laws of the State of Maryland, with corporate power and authority to conduct its business as described in the Prospectus. (iv) All of the outstanding shares of Platinum US's common stock have been duly authorized and validly issued and are fully paid and non-assessable. Platinum Finance is the registered owner of 50,000 shares of Platinum US's common stock, and such shares constitute all of the outstanding shares of Platinum US's capital stock. (v) Platinum Finance has been duly incorporated and is an existing corporation in good standing under the laws of the State of Delaware, with corporate power and authority to conduct its business as described in the Prospectus. (vi) All of the outstanding shares of Platinum Finance's common stock have been duly authorized and validly issued and are fully paid and non-assessable. Platinum Ireland is the registered owner of 100 shares of Platinum Finance's common stock, and such shares constitute all of the outstanding shares of Platinum Finance's capital stock. (vii) To such counsel's knowledge, the only agreement in which the Company has agreed to register any securities is the Registration Rights Agreement. (viii) Assuming that each of the Formation and Separation Agreement and the Registration Rights Agreement has been duly authorized, executed and delivered by the Company under Bermuda law, the Formation and Separation Agreement and the Registration Rights Agreement have been duly authorized, executed and delivered by the Company, and constitute valid and legally binding obligations of the Company enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles, except that such counsel expresses no opinion as to the enforceability of any indemnification or contribution provisions relating to violations under any federal or state securities laws contained in the Formation and Separation Agreement and the Registration Rights Agreement. (ix) The Formation and Separation Agreement and the Registration Rights Agreement have been duly authorized, executed and delivered by St. Paul and constitute valid and legally binding obligations of St. Paul enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles, except that such counsel expresses no opinion as to the enforceability of any 20 indemnification or contribution provisions relating to violations under any federal or state securities laws contained in the Formation and Separation Agreement and the Registration Rights Agreement. (x) Assuming that each of the Filed Agreements, (other than the Formation and Separation Agreement and the Registration Rights Agreement) that is governed by New York law and to which the Company is a party has been duly authorized, executed and delivered by the Company under Bermuda law, each of such agreements has been duly authorized, executed and delivered by the Company and constitutes a valid and legally binding obligation of the Company enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (xi) Each of the Filed Agreements (other than the Formation and Separation Agreement and the Registration Rights Agreement) that is governed by New York law and to which St. Paul is a party, has been duly authorized, executed and delivered by St. Paul and constitutes a valid and legally binding obligation of St. Paul enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (xii) Each of the Filed Agreements that is governed by New York law and to which Platinum Finance is a party has been duly authorized, executed and delivered by Platinum Finance and constitutes a valid and legally binding obligation of Platinum Finance enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (xiii) Each of this Agreement and the Units Jurisdiction Agreement has been duly authorized, executed and delivered by Platinum Finance. (xiv) Each of the Filed Agreements that is governed by New York law and to which Platinum US is a party has been duly authorized, executed and delivered by Platinum US and constitutes a valid and legally binding obligation of Platinum US enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles, except that such counsel expresses no opinion as to the enforceability of any leases, sub-leases or assignments of leases or other agreements relating to real property constituting a Filed Agreement. (xv) Each of the Filed Agreements that is governed by New York law and to which St. Paul Fire and Marine Insurance Company, a Minnesota corporation and a wholly owned subsidiary of St. Paul ("Fire and Marine"), is a party, has been duly authorized, executed and delivered by Fire and Marine and constitutes a valid and legally binding obligation of Fire and Marine enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (xvi) No consent, approval, authorization or order of, or qualification with, any United States federal or New York State governmental body or agency is required for the issue and sale of the Units, the Shares or the St. Paul Investment Shares, except such as 21 may be required by the Act, the Exchange Act, the Trust Indenture Act and the securities or Blue Sky laws of the State of New York. (xvii) The execution, delivery and performance by Platinum US of its obligations under each of the Filed Agreements to which it is a party will not (a) violate Platinum US's certificate of incorporation or by-laws, (b) result in a default under or breach of any of the Filed Agreements to which it is a party, or (c) violate any Federal law of the United States or law of the State of New York applicable to Platinum US; provided, however, that, for the purposes of this paragraph (xvii), such counsel expresses no opinion with respect to Federal or state securities laws, other antifraud laws or fraudulent transfer laws; provided, further, that insofar as performance by Platinum US of its obligations under such agreements is concerned, such counsel expresses no opinion as to bankruptcy, insolvency, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights. (xviii) The execution, delivery and performance by Platinum Finance of its obligations under each of the Filed Agreements to which it is a party will not (a) violate Platinum Finance's certificate of incorporation or by-laws, (b) result in a default under or breach of any of the Filed Agreements to which it is a party, or (c) violate any Federal law of the United States or law of the State of New York applicable to Platinum Finance; provided, however, that, for the purposes of this paragraph (xvii), such counsel expresses no opinion with respect to Federal or state securities laws, other antifraud laws or fraudulent transfer laws; provided, further, that insofar as performance by Platinum Finance of its obligations under such agreements is concerned, such counsel expresses no opinion as to bankruptcy, insolvency, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights. (xix) The Remarketing Agreement to be entered into by the Company, Platinum Finance, the Purchase Contract Agent and the Remarketing Agent, has been duly authorized by Platinum Finance, and the holders of the Senior Notes will be entitled to the benefits of the Remarketing Agreement and the Purchase Contract Agreement, in each case in respect of the remarketing of the Senior Notes; (xx) Based on such counsel's examination of the Order of the Maryland Insurance Administration, dated June 21, 2002, approving or acknowledging that no regulatory approval is required for, inter alia, the transactions contemplated by the Filed Agreements to which the Company or Platinum US is a party, and the issuance to Platinum US by the New York State Insurance Department of a license to engage in the reinsurance business, all statutory and regulatory consents, authorizations, approvals and filings required to be obtained or made by or on behalf of the Company and Platinum US under the insurance laws of the State of Maryland and the insurance laws of the State of New York to consummate the transactions contemplated by the Filed Agreements to which the Company or Platinum US is a party, and in the case of Platinum US, to conduct its business as described in the Prospectus, have been obtained or made. (xxi) Assuming that the Units being delivered at such Time of Delivery have been duly authorized, executed, authenticated, issued and delivered by the Company under Bermuda law, the Units have been duly authorized, executed, authenticated, issued and delivered by the Company, and assuming due execution by the Purchase Contract Agent as attorney-in-fact of the holders thereof and due authentication by the Purchase 22 Contract Agent and upon payment and delivery in accordance with this Agreement, such Units will constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles, and are in the form contemplated by, and are entitled to the benefits of, the Purchase Contract Agreement; and the issuance of the Units is not subject to preemptive or other similar rights; (xxii) Assuming the Purchase Contracts underlying the Units being delivered at such Time of Delivery have been duly authorized, issued and delivered by the Company under Bermuda law, the Purchase Contracts underlying the Units being delivered at such Time of Delivery have been duly authorized, issued and delivered and constitute valid and legally binding obligations of the Company, enforceable against the Company in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; and the issuance of the Purchase Contracts is not subject to preemptive or other similar rights; (xxiii) The Indenture has been duly qualified under the Trust Indenture Act; (xxiv) The Senior Notes underlying the Units being delivered at such Time of Delivery have been duly authorized, executed, authenticated, issued and delivered by Platinum Finance and constitute valid and legally binding obligations of Platinum Finance, enforceable against Platinum Finance in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles; the Senior Notes are in the form contemplated by, and are entitled to the benefits of, the Indenture; (xxv) Assuming the Guarantees underlying the Units being delivered at such Time of Delivery have been duly authorized by the Company under Bermuda law, such Guarantees have been duly authorized and upon the due execution, authentication, issuance and delivery of the Senior Notes pursuant to this Agreement and the Indenture, and upon the Guarantees being duly endorsed on the Senior Notes and executed, such Guarantees will have been duly issued and delivered will constitute valid and binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles, and are entitled to the benefits of the Indenture; (xxvi) Under the NY UCC in effect at such Time of Delivery, the Pledge Agreement creates, as collateral security for the performance when due by the holders of the Units under the respective Purchase Contracts, a legal and valid security interest (as that term is defined in the New York UCC) in favor of the Collateral Agent for the benefit of the Company, in the right, title and interest of such holders in all of the Pledged Securities that constitute "securities" (as that term is defined in Section 8-102(a)(15) of the New York UCC); and in the case of such Pledged Securities that are certificated (as defined in the New York UCC), such security interest shall be perfected upon delivery of such certificates (endorsed in blank) to the Collateral Agent and, assuming that neither the Collateral Agent nor the Company has notice on or prior to the date of such delivery of an 23 adverse claim with respect to such Pledged Securities, the Collateral Agent will acquire a security interest in the Pledged Securities free of any adverse claim (as that term in defined in the New York UCC); in the case of Pledged Securities that are credited by a securities intermediary (as defined in the New York UCC) to a securities account (as defined in the New York UCC) in the name of a Collateral agent, the Collateral Agent shall have a perfected security interest in all security entitlements (as defined in the New York UCC) relating to such Pledged Securities; (xxvii) Under the laws of the State of New York relating to submission to jurisdiction, pursuant to the Units Jurisdiction Agreement, (i) each of the Company, Platinum Finance and St. Paul has validly and irrevocably submitted to the non-exclusive jurisdiction of any New York Court and has validly and irrevocably waived any objection to the venue of a proceeding in any such court, and (ii) the Company has validly appointed CT Corporation System as its authorized agent for the purpose and to the extent described in the Units Jurisdiction Agreement, and service of process effected on such agent in the manner set forth therein will be effective to confer valid personal jurisdiction over the Company, assuming, in each of clauses (i) and (ii), (a) with respect to the Company only, the validity of such actions under Bermuda law and (b) the due authorization, execution and delivery of this Agreement by or on behalf of the Underwriters. (xxviii) Registration of the Company or Platinum Finance under the Investment Company Act is not required. (xxix) The issuance of the St. Paul Investment Shares pursuant to the Formation and Separation Agreement does not require registration under the Act. (xxx) The statements made in the Prospectus under the captions "Description of the Equity Security Units" and "Description of the Senior Notes", insofar as they purport to constitute a summary of the terms of the Securities and the Filed Agreements relating to the Securities, and under the captions "Business--Our Business--U.S. Regulation--U.S. Insurance Holding Company Regulation of Platinum Holdings" and "-- -- --State Insurance Regulation of Platinum US", insofar as they relate to summaries of the provisions of the insurance laws of the State of Maryland therein described, are accurate, fair and complete. Such counsel shall also furnish to you its written opinion that the Registration Statement, as of its effective date, and the Prospectus, as of the date of the Prospectus, appeared on their face to be appropriately responsive in all material respects to the requirements of the Act, the Trust Indenture Act and the applicable rules and regulations of the Commission thereunder. Further, nothing that came to such counsel's attention in the course of its review has caused such counsel to believe that the Registration Statement, as of its effective date, contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein not misleading or that the Prospectus, as of the date of the Prospectus, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Also, nothing that has come to such counsel's attention has caused such counsel to believe that the Prospectus, as of the date and time of delivery of this letter, contained any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. 24 Such counsel may state that its opinions are solely for the benefit of the several Underwriters and may not be relied upon by any other person. (d) Conyers, Dill & Pearman, outside Bermuda counsel for the Company, shall have furnished to you their written opinion (a draft of such opinion is attached as Annex II(c) hereto), dated such Time of Delivery, in form and substance satisfactory to you, to the effect that: (i) Each of the Company and Platinum Bermuda is a limited liability company duly incorporated and existing under the laws of Bermuda in good standing ("good standing" meaning solely that it has not failed to make any filing with any Bermuda governmental authority or to pay any Bermuda government fee or tax which would make it liable to be struck off the Register of Companies and thereby cease to exist under the laws of Bermuda). (ii) Each of the Company and Platinum Bermuda has the power and capacity to acquire by purchase or otherwise and hold, sell, dispose of and deal in real property situated outside Bermuda and in personal property of all kinds wheresoever situated. (iii) The Company has the necessary corporate power and authority, pursuant to its Memorandum of Association, to carry on its business as described in the Registration Statement. Platinum Bermuda has the necessary corporate power and authority, pursuant to its Memorandum of Association, to carry on its business as described in the Registration Statement, including its insurance and reinsurance business as described in the Registration Statement, and was registered as a Class 4 insurer in terms of the Insurance Act 1978 effective [ ] 2002 and subject to Platinum Bermuda being capitalized with US $[ ] is authorized to carry on business in that capacity as described in the Registration Statement subject to the provisions of the Insurance Act, 1978 and the regulations promulgated thereunder, and the conditions set out in Schedule I to the Certificate of Registration, issued by the Registrar of Companies to Platinum Bermuda, dated [ ] 2002. No further approvals of the insurance regulatory, governmental or administrative body or authority of Bermuda are required for the conduct of such business by each of the Company and Platinum Bermuda respectively. (iv) Each of the Company and Platinum Bermuda has the necessary corporate power and authority to enter into and perform its obligations under the Documents (as defined in Annex II(c) hereto). The execution and delivery of the Documents by the Company and Platinum Bermuda and the performance by the Company and Platinum Bermuda of their respective obligations thereunder including, but not limited to, in the case of the Company, the issue and sale of the Shares, the St. Paul Investment Shares, the Units (and the Purchase Contracts and the Guarantees underlying such Units) and the Issuable Common Stock and the performance of the transactions contemplated by the Documents and the Registration Statement, will not violate the memorandum of association or bye-laws of the Company or of Platinum Bermuda nor any applicable law, regulation, order or decree in Bermuda. (v) Each of the Company and Platinum Bermuda has taken all corporate action required to authorize its execution, delivery and performance of the Documents. The Documents have been duly executed and delivered by or on behalf of the Company or Platinum Bermuda, as applicable, and constitute the valid, binding and enforceable 25 obligations of the Company or Platinum Bermuda, as applicable, in accordance with the terms thereof. (vi) The Remarketing Agreement to be entered into by the Company, Platinum Finance, the Purchase Contract Agent and the Remarketing Agent, has been duly authorized by the Company and, when executed and delivered by each of the Company, will be duly executed and delivered by of the Company; and at the time of such execution and delivery, the Remarketing Agreement will conform in all material respects to the description thereof contained in the Prospectus; (vii) The Guarantees have been duly authorized by the Company. (viiii) The Company has taken all corporate action required to duly authorize its execution and delivery to the SEC of the Registration Statement. (ix) No order, consent, approval, licence, authorisation or validation of, registration with or exemption by any government or public body or authority of Bermuda or any sub-division thereof is required to authorise or is required in connection with the execution, delivery, performance and enforcement of the Documents, except such as have been duly obtained in accordance with Bermuda law. (x) No order, consent, approval, license, authorization or validation of, registration with or exemption by any government or public body or authority of Bermuda or any sub-division thereof is required to authorize or is required in connection with the valid issue and sale of the Shares, the St. Paul Investment Shares and the Units, except such as have been duly obtained in accordance with Bermuda law. (xi) It is not necessary or desirable to ensure the enforceability in Bermuda of the Documents that they be registered in any register kept by, or filed with, any governmental authority or regulatory body in Bermuda. (xii) The Company has an authorized share capitalization as described in the Registration Statement. Upon payment in cash or in kind by the Underwriters, the St. Paul Purchasers (as defined in Annex II(c) hereto) and the Common Shares Underwriters for the Units, the St. Paul Investment Shares and the Shares, respectively, in accordance with this Agreement, the Formation and Separation Agreement and the Common Shares Underwriting Agreement, respectively, the Units, the St. Paul Investment Shares and the Shares will be duly authorized and validly issued, fully paid and nonassessable ("nonassessable" meaning that no further sums are required to be paid by the holders thereof in connection with the issue thereof). (xiii) Based solely on such counsel's review of the bye-laws of the Company and the Register of Members of the Company, and except as disclosed in the Prospectus under the captions "Certain Relationships and Related Transactions - Formation and Separation Agreement - Pre-Emptive Rights", "Certain Relationships and Related Transactions - Option Agreement", "Description of the Equity Security Units", "Management" and "Underwriting", the Company has no (i) outstanding securities or other obligations convertible into or exchangeable or exercisable for shares in the authorized share capital of the Company, or (ii) outstanding rights to subscribe for or purchase, or options for the purchase of, or agreement providing for the issuance (contingent or otherwise) of, or calls, commitments or claims of any character relating to, any shares in the authorized share capital of the Company, or (iii) securities convertible 26 into or exchangeable or exercisable for any shares in the authorized share capital of the Company, or (iv) obligation (in the nature of the existence of a pre-emptive or similar right) to offer the shares in the authorized share capital of the Company to any shareholder of the Company prior to the sale of the Units, the Shares or the St. Paul Investment Shares. (xiv) Subject to the requirement that shares of the Company are listed on the New York Stock Exchange or on another appointed stock exchange (as defined in section 2(1) of the Companies Act 1981, the Company has received permission under the Exchange Control Act 1972 (and Regulations made thereunder) from the Bermuda Monetary Authority for: (i) the issue and subsequent free transferability of the Company's shares, up to the amount of its authorised capital from time to time, to and among persons non-resident of Bermuda for exchange control purposes; (ii) the issue and subsequent free transferability of up to 20% of the Company's shares in issue from time to time to persons resident in Bermuda for exchange control purposes; and (iii) the issue of options, warrants, depository receipts, rights, loan notes and other securities of the Company and the subsequent free transferability thereof. (xv) The Shares and the St. Paul Investment Shares conform to the description of the Company's Common Shares found in the Prospectus under the caption "Description of Platinum Holdings' Common Shares". (xvi) The issue and sale of the Shares, the St. Paul Investment Shares and the Units by the Company pursuant to the Documents will not constitute unlawful financial assistance by the Company under Bermuda law. (xvii) The form of certificates for the Shares and the St. Paul Investment Shares conforms to the requirements of Bermuda law. (xviii) Based solely on such counsel's review of a certified copy of the Register of Members of Platinum Bermuda dated [ ] 2002, all of the issued common shares of Platinum Bermuda have been duly authorised and validly issued, fully paid and non-assessable (as such term is defined above) and are registered in the name of the Company. (xix) Based solely on such counsel's review of a certified copy of the Register of Members of the Company dated [ ] 2002, all of the issued Common Shares of the Company have been duly authorised and validly issued, fully paid and non-assessable (as such term is defined above) and are registered in the name of Codan Trust Company Limited (the "Purpose Trust"). (xx) The Company has a contractual right to and has taken all necessary corporate action other than the payment of the repurchase price of US$120,000 to effect the repurchase of the Common Shares held by the Purpose Trust and upon the receipt of the payment of the repurchase price of US$120,000 by the Purpose Trust, the Company shall be entitled, without any further action by the Company or the Purpose Trust, to cancel the Common Shares held by the Purpose Trust by making the appropriate entry in the Register of Members of the Company, and thereafter the Purpose Trust will not have any rights as a member of the Company. (xxi) The Documents will not be subject to ad valorem stamp duty in Bermuda and no registration, documentary, recording, transfer or other similar tax, fee or charge is 27 payable in Bermuda in connection with the execution, delivery, filing, registration or performance of the Documents or the issue and delivery of the St. Paul Investment Shares, the Shares and the Units to the St. Paul Purchasers, the Underwriters and the Units Underwriters, respectively, pursuant to the Formation and Separation Agreement, this Agreement and the Units Underwriting Agreement, respectively. (xxii) Under current Bermuda law there is no Bermuda income tax, withholding tax, capital gains tax, capital transfer tax, estate or inheritance tax, payable by investors who are not resident in Bermuda (or are deemed not to be resident in Bermuda for Bermuda exchange purposes). (xxiii) The Company and Platinum Bermuda have received from the Bermuda Minister of Finance an assurance under The Exempted Undertakings Tax Protection Act 1966 of Bermuda to the effect that in the event Bermuda enacts any legislation imposing tax computed on profits or income, or computed on any capital asset, gain or appreciation, or any tax in the nature of estate duty or inheritance tax, then such tax will not apply to the Company and Platinum Bermuda or to any of their operations or their shares, debentures or other obligations, until March 28, 2016. This assurance will not prevent the application of any tax or duty on persons ordinarily resident in Bermuda or the application of any tax payable in accordance with the provisions of The Land Tax Act 1967 of Bermuda or otherwise payable in relation to any property leased to the Company or Platinum Bermuda. (xxiv) The statements in the Prospectus under the captions "Management's Discussion and Analysis of Pro Forma Financial Condition and Underwriting Results - Liquidity and Capital Resources - Restrictions on Dividend Payments from our Operating Subsidiaries - Bermuda", "Business - Regulation - Bermuda", "Description of Platinum Holdings' Common Shares", "Certain Tax Considerations - Taxation of the Company, Platinum US, Platinum UK, Platinum Bermuda and Platinum Ireland - Bermuda", "Certain Tax Considerations -Taxation of Shareholders - Bermuda Taxation", the fourth paragraph set forth under the caption "Risk Factors - Risks Related to Our Common Shares - There are limitations on the ownership, transfers and voting rights of our Common Shares", and, the first and second paragraphs under "Item 14. Indemnification of Directors and Officers" in Part II of the Registration Statement insofar as such statements constitute summaries of the legal matters referred to therein, fairly present the information called for with respect to such legal matters and documents and fairly summarize the matters referred to therein. (xxv) The Company can sue and be sued in its own name under the laws of Bermuda. (xxvi) The choice of the Foreign Laws (as defined in Annex II(c) hereto) as the governing law of the Documents is a valid choice of law and would be recognized and given effect to in any action brought before a court of competent jurisdiction in Bermuda, except for those laws (i) which such court considers to be procedural in nature, (ii) which are revenue or penal laws or (iii) the application of which would be inconsistent with public policy, as such term is interpreted under the laws of Bermuda. The submission in the Documents to the non-exclusive jurisdiction of the Foreign Courts (as defined in Annex II(c) hereto) is valid and binding upon the Company. 28 (xxvii) The courts of Bermuda would recognise as a valid judgment, a final and conclusive judgment in personam obtained in the Foreign Courts against the Company based upon the Documents under which a sum of money is payable (other than a sum of money payable in respect of multiple damages, taxes or other charges of a like nature or in respect of a fine or other penalty) and would give a judgment based thereon provided that (a) such courts had proper jurisdiction over the parties subject to such judgment, (b) such courts did not contravene the rules of natural justice of Bermuda, (c) such judgment was not obtained by fraud, (d) the enforcement of the judgment would not be contrary to the public policy of Bermuda, (e) no new admissible evidence relevant to the action is submitted prior to the rendering of the judgment by the courts of Bermuda and (f) there is due compliance in seeking validation of such judgment with the correct procedures under the laws of Bermuda. (xxviii) Under Section 16 of the Companies Act 1981, the bye-laws of the Company shall bind the Company and the members of the Company to the same extent as if such bye-laws had been signed and sealed by each such member, and contain covenants on the part of each such member to observe all the provisions of the bye-laws of the Company, except, as provided in Section 17 of the Companies Act 1981, no member of the Company shall be bound by an alteration made in the bye-laws after the date on which he became a member, if and so far as the alteration requires him to take or subscribe for more shares than the number held by him at the date on which the alteration is made, or in any way increases his liability as at that date to contribute to the share capital of, or otherwise to pay money to, the Company (unless the member agrees in writing, either before or after the alteration is made, to be bound thereby). (xxix) Based solely on a search of the Register of Charges, maintained by the Registrar of Companies pursuant to Section 55 of the Companies Act 1981, conducted at [ ] on [ ], there are no registered charges registered against the Company or Platinum Bermuda. (xxx) Based solely upon a search of the Cause Book of the Supreme Court of Bermuda conducted at [ ] on [ ], there are no judgments, nor legal or governmental proceedings pending in Bermuda to which either of the Company or Platinum Bermuda is a party. (xxxi) Neither the Underwriters, the Units Underwriters nor the St. Paul Purchasers will be deemed to be resident, domiciled or carrying on business in Bermuda by reason only of the execution, performance and enforcement of the Documents. (xxxii) Each of the Underwriters, the Units Underwriters and the St. Paul Purchasers has standing to bring an action or proceedings before the appropriate courts in Bermuda for the enforcement of the Documents. It is not necessary or advisable in order for any Underwriter, Units Underwriter or St. Paul Purchaser to enforce its rights under the Documents, including the exercise of remedies thereunder, that it be licensed, qualified or otherwise entitled to carry on business in Bermuda. (xxxiii) The Company and Platinum Bermuda have been designated as non-resident for the purposes of the Exchange Control Act, 1972 and as such are free to acquire, hold and sell foreign currency and securities. No currency exchange control laws or withholding taxes of Bermuda apply to the payment of dividends (a) on the Common Shares by the Company or (b) by Platinum Bermuda to the Company, except in each 29 case as described in or contemplated by the Registration Statement; and Platinum Bermuda is not currently prohibited by any Bermuda law or governmental authority, directly or indirectly, from paying any dividends to the Company, from making any other distributions on its capital stock, from repaying to the Company any loans or advances to it from the Company or from transferring any of its property or assets to the Company, except as summarized in the Registration Statement. (xxxiv) Neither the Company nor Platinum Bermuda is entitled to any immunity under the laws of Bermuda, whether characterized as sovereign immunity or otherwise, from any legal proceedings to enforce the Documents in respect of itself or its property. (xxxv) The procedure for the service of process on the Company through C.T. Corporation System in New York, New York, United States of America, acting as agent for the Company, as set out in sections [1(kk) and 14] of this Agreement, would be effective, in so far as Bermuda law is concerned, to constitute valid service of the proceedings on the Company. (e) Slaughter & May, outside U.K. counsel for the Company, shall have furnished to you their written opinion or opinions (a draft of such opinion or opinions attached as Annex II(d) hereto), dated such Time of Delivery, in form and substance satisfactory to you, to the effect that: (i) Each of Platinum UK and St. Paul Reinsurance Company Limited, a wholly-owned subsidiary of St. Paul ("St. Paul Re UK"), is a validly existing limited liability company duly incorporated under the laws of England and registered in England and has power and authority under its Memorandum of Association to own leasehold property and conduct its business as described in the Prospectus. St. Paul Management Limited, a wholly-owned subsidiary of St. Paul ("SPML") is a validly existing limited liability company duly incorporated under the laws of England and registered in England. (ii) Platinum Ireland is the duly registered holder of [two] ordinary shares of [one pound] each in Platinum UK and such shares are all of the issued shares of Platinum UK and all such shares have been duly and validly authorized and issued. (iii) Provided that each of the Underwriters complies with its obligations under Sections 4(b) and 4(c) of this Agreement (notwithstanding Section 9 of this Agreement), the issue and sale of the Units being delivered at each Time of Delivery in the manner described in the Prospectus, the issue and sale of the Shares and the St. Paul Investment Shares and the compliance by the Company, Platinum Finance and St. Paul with all of the provisions of this Agreement and the Common Shares Underwriting Agreement, as applicable, and the consummation of the transactions herein and therein contemplated will not conflict with or result in any violation of the provisions of (i) the Memorandum or Articles of Association of Platinum UK, St. Paul Re UK or SPML, or (ii) any statute or statutory instrument of the United Kingdom, or (iii) any rule or regulation of the Financial Services Authority set out in the Financial Services Authority Handbook. (iv) Each of the UK Agreements (as defined in Annex II(d) hereto) to which Platinum UK is a party has been duly authorized and executed by Platinum UK, and constitutes a valid and binding agreement of Platinum UK enforceable against Platinum UK. 30 (v) Each of the UK Agreements to which St. Paul Re UK is a party has been duly authorized and executed by St. Paul Re UK, and constitutes a valid and binding agreement of St. Paul Re UK enforceable against St. Paul Re UK. (vi) Each of the UK Agreements to which SPML is a party has been duly authorized and executed by SPML, and constitutes a valid and binding agreements of SPML enforceable against SPML. (vii) Assuming that each of the UK Agreements to which a person other than Platinum UK, St. Paul Re UK or SPML is a party has been duly authorized and executed by such person, each such UK Agreement constitutes a valid and binding agreement of such person enforceable against such person. (viii) Except as provided in the Prospectus, neither Platinum UK, St. Paul Re UK nor SPML is required to obtain any consent, approval, authorization or order of, or make any filing with, the Financial Services Authority or any other regulatory body in the United Kingdom in order to perform their respective obligations under the UK Agreements and, in the case of Platinum UK and except as provided in the Prospectus, to conduct its business as described in the Prospectus. (ix) The execution, delivery and performance by Platinum UK of each of the UK Agreements to which Platinum UK is a party and the consummation of the transactions therein contemplated will not conflict with or result in any violation of (i) the Memorandum or Articles of Association of Platinum UK, or (ii) any statute or statutory instrument of the United Kingdom, or (iii) any rule or regulation of the Financial Services Authority set out in the Financial Services Authority Handbook. (x) The execution, delivery and performance by St. Paul Re UK of each of the UK Agreements to which St. Paul Re UK is a party and the consummation of the transactions therein contemplated will not conflict with or result in any violation of (i) the Memorandum or Articles of Association of St. Paul Re UK, or (ii) any statute or statutory instrument of the United Kingdom, or (iii) any rule or regulation of the Financial Services Authority set out in the Financial Services Authority Handbook. (xi) The execution, delivery and performance by SPML of each of the UK Agreements to which SPML is a party and the consummation of the transactions therein contemplated will not conflict with or result in any violation of (i) the Memorandum or Articles of Association of SPML, or (ii) any statute or statutory instrument of the United Kingdom, or (iii) any rule or regulation of the Financial Services Authority set out in the Financial Services Authority Handbook. (xii) The statements set forth in the Prospectus and listed in Schedule 2 to Annex II(d) hereof, insofar as they purport to describe the provisions of the laws and documents referred to therein, are accurate and fair. Such counsel shall also furnish to you its written opinion that the discussions set forth under each of the headings "The United Kingdom" and "United Kingdom Taxation" in the section entitled "Certain Tax Consequences" in the Prospectus, insofar as they relate to United Kingdom tax law and Inland Revenue practice, are a fair summary of the material United Kingdom tax laws and Inland Revenue practices referred to therein. 31 (f) A&L Goodbody, outside Irish counsel for the Company, shall have furnished to you their written opinion (a draft of such opinion is attached as Annex II(e) hereto), dated such Time of Delivery, in form and substance satisfactory to you, to the effect that: (i) Platinum Ireland has been duly incorporated under the laws of Ireland. Based only on searches carried out in the Irish Companies Office and the Central Office of the High Court on [ ], 2002 Platinum Ireland is validly existing under the laws of Ireland and no steps have been taken or are being taken to appoint a receiver, examiner or liquidator over it or to wind it up and Platinum Ireland has the corporate power and authority to own its property and to conduct its business as described in the Prospectus and is duly qualified to transact its business in Ireland. (ii) All of the issued shares of Platinum Ireland have been duly and validly authorized and issued, are fully paid and are not subject to calls for any additional payments. Ten thousand (10,000) shares have been issued, nine thousand, nine hundred and ninety nine (9,999) registered in the name of the Company and one registered in the name of Platinum Bermuda. To the best of such counsel's knowledge, based on a Certificate of Jerome T. Fadden, all the issued shares are free and clear of all liens, encumbrances, equities or claims. (iii) Based only on the Certificate of Jerome T. Fadden and searches carried out in the Central Office of the High Court, such counsel does not know of any legal or governmental proceedings pending or threatened in Ireland to which Platinum Ireland is a party or to which any of the properties of Platinum Ireland is subject. (iv) Based on the Certificate of Jerome T. Fadden, there is no indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which Platinum Ireland is a party or by which Platinum Ireland is bound or to which any of the property or assets of Platinum Ireland is subject, nor is such counsel actually aware of any such agreement referred to in this paragraph. (v) Based only on the Certificate of Jerome T. Fadden, Platinum Ireland is not in violation of its Certificate of Incorporation or its Memorandum or Articles of Association. (vi) Based only on the description of the Transaction in the Prospectus, Platinum Ireland is not required under Irish law to obtain any consent, approval, authorization or order of, or make any filling with, any governmental agency or body or any court in Ireland to conduct its business, pay any dividends or consummate the Transaction and based only on the description thereof in the Prospectus, the transactions contemplated by the Filed Agreements. (vii) Based only on the description of the Transaction in the Prospectus, the consummation of the Transaction and based only on the description thereof in the Prospectus, the transactions contemplated in the Filed Agreements will not result in any violation of the Certificate of Incorporation or the Memorandum and Articles of Association of Platinum Ireland, any Irish statute, any rule or regulation of any governmental agency or body of Ireland having general application, or based only on the Certificate of Jerome T. Fadden and on searches in the Central Office of the High Court on [], any order of any court of Ireland. (viii) Based only on the descriptions in the Prospectus and the Common Shares Prospectus, the issue and sale of the Units being delivered at such Time of Delivery, the 32 issue and sale of the Shares and the St. Paul Investment Shares and the compliance by the Company, Platinum Finance and St. Paul with all of the provisions of this Agreement and the Common Shares Underwriting Agreement, as applicable, and the consummation of the transactions herein and therein contemplated will not result in any violation of the Certificate of Incorporation or the Memorandum and Articles of Association of Platinum Ireland, any Irish statute, any rule or regulation of any governmental agency or body of Ireland having general application or based only on the Certificate of Jerome T. Fadden and on searches in the Central Office of the High Court on [ ], 2002, any order of any court of Ireland. (ix) The statements in the Prospectus under the captions "Management's Discussion and Analysis of Pro Forma Financial Condition and Underwriting Results--Liquidity and Capital Resources--Restrictions on Dividend Payments from our Operating Subsidiaries--Ireland", "Business--Regulation--Ireland Regulation" and "Certain Tax Considerations--Taxation of the Company, Platinum US, Platinum UK, Platinum Bermuda and Platinum Ireland--Ireland" insofar as such statements constitute summaries of the legal matters, documents or proceedings referred to therein, fairly present the requirements of Irish law with respect to such legal matters, documents and proceedings and fairly summaries the matters referred to therein. (x) Based only on the Certificate of Jerome T. Fadden, Platinum Ireland has not received any notification from any insurance regulatory authority or other governmental authority to the effect that any authorization not already held by Platinum Ireland, approval, order, consent, certificate, permit, registration or qualification is needed to be obtained, to conduct its business as described in the Prospectus or to pay any dividends. (xi) Based only on the Certificate of Jerome T. Fadden and searches carried out in the Irish Companies Office, Platinum Ireland has filed all statutory financial returns, reports, documents and other information required to be filed under Irish law and Platinum Ireland maintains its books and registers required by the Companies Acts 1963 to 2001 of Ireland in accordance with those Acts. (g) Bruce A. Backberg, Senior Vice President and Corporate Secretary of St. Paul, shall have furnished to you his written opinion (a draft of such opinion is attached as Annex II(f) hereto), dated such Time of Delivery, in form and substance satisfactory to you, to the effect that: (i) Each of St. Paul and Fire and Marine has been duly incorporated and is an existing corporation in good standing under the laws of the State of Minnesota. (ii) Fire and Marine has been duly qualified as a foreign corporation for the transaction of business and is in good standing under the laws of each jurisdiction in which it owns or leases properties or conducts any business so as to require such qualification or is subject to no material liability or disability by reason of failure to be so qualified in any such jurisdiction. (iii) Each of this Agreement, the Units Underwriting Agreement and the Jurisdiction Agreements has been duly authorized, executed and delivered by St. Paul. (iv) Assuming that each of the Filed Agreements that is governed by a law other than Minnesota law or New York law and to which St. Paul or Fire and Marine is a party has been duly executed and delivered under the applicable law, each such Filed 33 Agreement has been duly authorized, executed and delivered by St. Paul or Fire and Marine, as the case may be. (v) Each of the Filed Agreements that is governed by New York law and to which St. Paul is a party has been duly authorized, executed and delivered by St. Paul. (vi) Each of the Filed Agreements that is governed by Minnesota law and to which Fire and Marine is a party has been duly authorized, executed and delivered by Fire and Marine and constitutes a valid and legally binding obligation of Fire and Marine enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (vii) Assuming that each of the Filed Agreements that is governed by Minnesota law and to which Platinum US is a party has been duly authorized, executed and delivered by Platinum US under the laws of the State of Maryland, each such Filed Agreement has been duly authorized, executed and delivered by Platinum US and constitutes a valid and legally binding obligation of the Company enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (viii) To such counsel's knowledge, there are no legal or governmental proceedings pending to which St. Paul or Fire and Marine, in each case in respect of the Business, is a party or of which the Business is the subject, which, if determined adversely to St. Paul and Fire and Marine, as the case may be, would individually or in the aggregate (after giving effect to any applicable insurance, reinsurance or reserves therefor) have a material adverse effect on the consolidated financial position, shareholders' equity or results of operations of Platinum and its subsidiaries taken as a whole at the First Time of Delivery; and, to such counsel's knowledge, no such proceedings are threatened by governmental authorities or by others. (ix) The compliance by St. Paul with the provisions of the Filed Agreements to which St. Paul is a party and the consummation of the transactions contemplated in such agreements will not (i) result in a default under or breach of any agreement or instrument known to me to which St. Paul is a party or by which St. Paul is bound or to which any of the property or assets of St. Paul is subject, (ii) violate the provisions of St. Paul's Restated Articles of Incorporation, as amended, or By-laws, as amended, or (iii) violate any statute or any order, rule or regulation known to me of any court or governmental agency or body having jurisdiction over St. Paul or any of its properties, provided that such counsel is expressing no opinion under this clause (iii) with respect to the indemnification and contribution provisions relating to federal and state securities laws contained in the Formation and Separation Agreement and the Registration Rights Agreement. (x) The compliance by St. Paul with the provisions of this Agreement, the Common Shares Underwriting Agreement and the Jurisdiction Agreements and the consummation of the transactions therein contemplated will not (i) result in a default under or breach of any agreement or instrument known to such counsel to which St. Paul is a party or by which St. Paul is bound or to which any of the property or assets of St. 34 Paul is subject, or (ii) violate the provisions of St. Paul's Restated Articles of Incorporation, as amended, or By-laws, as amended. (xi) The compliance by Fire and Marine with the provisions of the Filed Agreements to which Fire and Marine is a party and the consummation of the transactions therein contemplated will not (i) result in a default under or breach of any agreement or instrument known to such counsel to which Fire and Marine is a party or by which Fire and Marine is bound or to which any of the property or assets of Fire and Marine is subject, (ii) violate the provisions of the Articles of Incorporation, as amended, or By-laws, as amended, of Fire and Marine, or (iii) violate any statute or any order, rule or regulation known to such counsel of any court or governmental agency or body having jurisdiction over Fire and Marine or any of its properties. (xii) Neither St. Paul nor Fire and Marine is in violation of its Restated Articles of Incorporation, as amended, or its Articles of Incorporation, as amended, respectively, or its By-laws, as amended, or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any agreement or instrument known to me to which it is a party or by which it or any of its properties is or may be bound, except where any such default does not have or would not reasonably be expected to have a material adverse effect on Platinum and its subsidiaries taken as a whole. (xiii) Based on such counsel's examination of the Order of the Maryland Insurance Administration, dated June 21, 2002, approving or acknowledging that no regulatory approval is required for, inter alia, the transactions contemplated by the Filed Agreements to which St. Paul or Fire and Marine is a party, and the issuance to Platinum US by the New York State Insurance Department of a license to engage in the reinsurance business, no consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body is required for the consummation by St. Paul or Fire and Marine of the transactions contemplated by the Underwriting Agreement or the Filed Agreements to which either is a party, except the registration under the Act and the Exchange Act of the Common Shares, and such consents, approvals, authorizations, registrations or qualifications as may be required under Maryland insurance laws and New York insurance laws, which have been obtained, or such as may be required under other state insurance laws or foreign laws or as may be required by state securities or Blue Sky laws in connection with the purchase and distribution of the Common Shares by the Underwriters. (xiv) All statutory and regulatory consents, authorizations, approvals and filings required to be obtained or made by or on behalf of St. Paul and Fire and Marine under the insurance laws of the State of Minnesota to consummate the transactions contemplated by the Filed Agreements to which St. Paul or Fire and Marine are a party have been obtained or made. (xv) To such counsel's knowledge, neither St. Paul nor Fire and Marine has received any notification from any insurance authority, commission or other insurance regulatory body to the effect that any license from such authority, commission or body is needed to be obtained by St. Paul or Fire and Marine, in each case in respect of the Business, or that St. Paul or Fire and Marine is not in compliance with any applicable insurance laws, in each case in respect of the Business, except where such failure to 35 obtain such license or to be in such compliance would not, individually or in the aggregate (after giving effect to any applicable insurance, reinsurance or reserves therefor), have a material adverse effect on the consolidated financial position or shareholders' equity of Platinum and its subsidiaries taken as a whole at the First Time of Delivery. Such counsel may state that his opinion is solely for the benefit of the several Underwriters and may not be relied upon by any other person. (h) Bruce Saul, Vice President-Corporate, Legal Services of St. Paul, shall have furnished to you his written opinion (a draft of such opinion is attached as Annex II (g) hereto), dated such Time of Delivery, in form and substance satisfactory to you, to the effect that (all capitalized terms used but not defined in the subparagraphs of this Section 9(h) have the meanings specified in such opinion): (i) Each of USF&G and Platinum US has been duly incorporated and is an existing corporation in good standing under the laws of the State of Maryland and, in the case of Platinum US, has corporate power and authority to conduct its business as described in the Prospectus. (ii) All of the issued shares of capital stock of Platinum US have been duly authorized and validly issued, are fully paid and non-assessable, and , immediately prior to the First Time of Delivery, were owned by USF&G, free and clear of all liens, encumbrances, equities or claims. (iii) Each of the Filed Agreements to which USF&G or Platinum US is a party has been duly authorized, executed and delivered by USF&G and Platinum US, as the case may be. (iv) Each of the Filed Agreements that is governed by Maryland law and to which Platinum US is a party constitutes a valid and legally binding obligation of Platinum US enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (v) Assuming that each of the Filed Agreements that is governed by Maryland law has been duly authorized, executed and delivered by each party thereto (other than Platinum US) under the laws of jurisdiction where such party is domiciled, each such Filed Agreement has been duly authorized, executed and delivered by each party thereto and constitutes a valid and legally binding obligation of such party enforceable in accordance with its terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles. (vi) To such counsel's knowledge, there are no legal or governmental proceedings pending to which USF&G or Platinum US is a party, which, if determined adversely to USF&G or Platinum US, as the case may be, would individually or in the aggregate (after giving effect to any applicable insurance, reinsurance or reserves therefor) have a material adverse effect on the consolidated financial position, shareholders' equity or results of operations of Platinum and its subsidiaries, taken as a whole, following the First Time of Delivery (as such term is defined in the Underwriting Agreement); and, to such counsel's knowledge, no such proceedings are threatened by governmental authorities or by others. 36 (vii) The compliance by USF&G and Platinum US with the provisions of the Filed Agreements to which USF&G or Platinum US is a party and the consummation of the transactions therein contemplated will not (i) result in a default under or breach of any agreement or instrument known to me to which USF&G or Platinum US is a party or by which USF&G or Platinum US is bound or to which any of the property or assets of USF&G or Platinum US is subject, (ii) violate the provisions of USF&G's or Platinum US's Articles of Incorporation, as amended, or By-laws, as amended, or (iii) violate any statute or any order, rule or regulation known to me of any court or governmental agency or body having jurisdiction over USF&G or Platinum US or any of their properties. (viii) Neither USF&G nor Platinum US is in violation of its articles of incorporation or by laws or in default in the performance or observance of any obligation, agreement, covenant or condition contained in any agreement or instrument known to me to which it is a party or by which it or any of its properties is or may be bound, except where any such default does not have or would not reasonably be expected to have a material adverse effect on Platinum and its subsidiaries taken as a whole. (ix) Based on such counsel's examination of the Order of the Maryland Insurance Administration, dated June 21, 2002, approving or acknowledging that no regulatory approval is required for, inter alia, the transactions contemplated by the Filed Agreements to which USF&G or Platinum US is a party, no statutory or regulatory consent, authorization, approval or filing is required to be obtained or made under the laws of Maryland in connection with such transactions or the transactions contemplated by the Underwriting Agreement or the Formation and Separation Agreement other than such as have been obtained or made, and other than such as may be required under Maryland securities or Blue Sky laws. (x) Each of USF&G and Platinum US is, and, in the case of Platinum US, will continue to be immediately following the First Time of Delivery, a duly licensed insurance company under the insurance laws of the State of Maryland. (xi) To such counsel's knowledge, Platinum US has not received any notification from any insurance authority, commission or other insurance regulatory body to the effect that Platinum US is not in compliance with any applicable insurance laws. (xii) The statements made under the captions "Business-Our Business-Regulation-U.S. Regulation-U.S. Insurance Holding Company Regulation of Platinum Holdings" and "-- -- --State Insurance Regulation of Platinum US" in the Prospectus insofar as they relate to summaries of provisions of the insurance laws of the State of Maryland therein described are accurate, fair and complete. Such counsel may state that his opinion is solely for the benefit of the several Underwriters and may not be relied upon by any other person. (i) On the date of the Prospectus at a time prior to the execution of this Agreement, at 9:30 a.m., New York City time, on the effective date of any post-effective amendment to the Registration Statement filed subsequent to the date of this Agreement and also at each Time of Delivery, KPMG, LLP shall have furnished to you a letter or letters, dated the respective dates of delivery thereof, in form and substance satisfactory to you, to the effect set forth in Annex I hereto (the executed copy of the letter delivered prior to the execution of this Agreement is attached as Annex I(a) hereto and a draft of the form of letter to be delivered on 37 the effective date of any post-effective amendment to the Registration Statement and as of each Time of Delivery is attached as Annex I(b) hereto); (j) (i)(A) Neither the Company nor any of its subsidiaries shall have sustained since April 24, 2002, any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus, and (B) since April 24, 2002, there shall not have been any change in the capital stock, capital or surplus or long-term debt of the Company or any of its subsidiaries or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, shareholders' equity or results of operations of the Company and its subsidiaries, taken as a whole, otherwise than as set forth or contemplated in the Prospectus, the effect of which, in any such case described in clause (A) or (B), is in the judgment of the Representatives so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Units being delivered at such Time of Delivery on the terms and in the manner contemplated in the Prospectus; (ii)(A) Neither St. Paul nor any of its subsidiaries in respect of the Business shall have sustained since December 31, 2001, any loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Prospectus, and (B) since December 31, 2001, there shall not have been any change, or any development involving a prospective change, in or affecting the general affairs, management or results of operations of St. Paul and its subsidiaries in respect of the Business, otherwise than as set forth or contemplated in the Prospectus, the effect of which, in any such case described in clause (A) or (B), is in the judgment of the Representatives so material and adverse as to make it impracticable or inadvisable to proceed with the public offering or the delivery of the Units being delivered at such Time of Delivery on the terms and in the manner contemplated in the Prospectus; (k) On or after the date hereof (i) no downgrading shall have occurred in the rating accorded the Company's debt securities or the Company's financial strength or claims paying ability by any "nationally recognized statistical rating organization", as that term is defined by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii) no such organization shall have publicly announced that it has under surveillance or review, with possible negative implications, its rating of any of the Company's debt securities or the Company's financial strength or claims paying ability; (l) On or after the date hereof there shall not have occurred any of the following: (i) a suspension or material limitation in trading in securities generally on the Exchange; (ii) a suspension or material limitation in trading in the Company's securities on the Exchange; (iii) a general moratorium on commercial banking activities in New York or London declared by the relevant authorities or a material disruption in commercial banking or securities settlement or clearance services in the United States or the United Kingdom; (iv) a change or development involving a prospective change in Bermuda taxation affecting the Company or the Shares or the transfer thereof; (v) the outbreak or escalation of hostilities involving the United States, the United Kingdom or Bermuda or the declaration by the United States, the United Kingdom or Bermuda of a national emergency or war or (vi) the occurrence of any other calamity or crisis or any change in financial, political or economic conditions in the United States, the United Kingdom, Bermuda or elsewhere, if the effect of any such event specified in clause (v) or (vi) 38 in the judgment of the Representatives makes it impracticable or inadvisable to proceed with the public offering or the delivery of the Units being delivered at such Time of Delivery on the terms and in the manner contemplated in the Prospectus; (m) The Units and the Issuable Common Shares to be sold at such Time of Delivery shall have been duly listed, subject to notice of issuance, on the Exchange; (n) The Company has obtained and delivered to the Underwriters executed copies of an agreement from (i) each of the parties to whom any St. Paul Investment Shares will be delivered at such Time of Delivery and (ii) each of the Company's officers and directors, in each case, substantially to the effect set forth in Section 6(e) hereof in form and substance satisfactory to you; (o) The Company and Platinum Finance shall have complied with the provisions of Section 6(c) hereof with respect to the furnishing of prospectuses on the New York Business Day next succeeding the date of this Agreement; (p) Each of the Company and Platinum Finance shall have furnished or caused to be furnished to you at such Time of Delivery certificates of officers of the Company and Platinum Finance, respectively, reasonably satisfactory to you as to the accuracy of the representations and warranties of the Company and Platinum Finance, as applicable, herein at and as of such Time of Delivery, as to the performance by the Company and Platinum Finance of all of their respective obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsections (a) and (j)(i) of this Section 9 and as to such other matters as you may reasonably request; (q) St. Paul shall have furnished or caused to be furnished to you at such Time of Delivery certificates of officers of St. Paul reasonably satisfactory to you as to the accuracy of the representations and warranties of St. Paul herein at and as of such Time of Delivery, as to the performance by St. Paul of all of its obligations hereunder to be performed at or prior to such Time of Delivery, as to the matters set forth in subsection (j)(ii) of this Section 9 and as to such other matters as you may reasonably request; (r) All conditions to the consummation of the Transaction, as set forth in the Filed Agreements, shall have been satisfied or waived prior to the First Time of Delivery; and (s) The closing of the offering of the Shares under the Common Shares Underwriting Agreement shall have occurred simultaneously with the closing of the offering of Units hereunder. 10. (a) The Company and Platinum Finance, jointly and severally, will indemnify and hold harmless each Underwriter against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement or the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that neither the Company nor Platinum Finance shall be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue 39 statement or omission or alleged omission made in any Preliminary Prospectus, the Registration Statement or the Prospectus or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company or Platinum Finance by any Underwriter through Goldman, Sachs & Co. expressly for use therein. (b) Each Underwriter will indemnify and hold harmless the Company, Platinum Finance and St. Paul against any losses, claims, damages or liabilities to which the Company, Platinum Finance or St. Paul, as the case may be, may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Preliminary Prospectus, the Registration Statement or the Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in any Preliminary Prospectus, the Registration Statement or the Prospectus or any such amendment or supplement in reliance upon and in conformity with written information furnished to the Company and Platinum Finance by such Underwriter through Goldman, Sachs & Co. expressly for use therein; and will reimburse the Company, Platinum Finance and St. Paul for any legal or other expenses reasonably incurred by the Company, Platinum Finance or St. Paul, as the case may be, in connection with investigating or defending any such action or claim as such expenses are incurred. (c) Promptly after receipt by an indemnified party under subsection (a) or (b) above of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party and St. Paul in writing of the commencement thereof; but the omission so to notify the indemnifying party and St. Paul shall not relieve the indemnifying party from any liability which it may have to any indemnified party otherwise than under such subsection. In case any such action shall be brought against any indemnified party and it shall notify the indemnifying party and St. Paul of the commencement thereof, the indemnifying party (and, if it is reasonably likely that St. Paul will be liable to make any payment pursuant to Section 10(e) hereof, St. Paul at its own expense) shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party (and, if the indemnifying party is the Company, St. Paul) shall not be liable to such indemnified party under such subsection for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any indemnified party. (d) If the indemnification provided for in this Section 10 is unavailable to or insufficient to hold harmless an indemnified party under subsection (a) or (b) above in respect of any losses, claims, 40 damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by the Company and Platinum Finance on the one hand and the Underwriters on the other from the offering of the Units. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under subsection (c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company and Platinum Finance (which for purposes of this subsection (d) shall include the fault of St. Paul) on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative benefits received by the Company and Platinum Finance on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company and Platinum Finance bear to the total underwriting discounts and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or Platinum Finance (which for purposes of this subsection (d) shall be deemed to include, without limitation, the information described in Schedule III hereto) on the one hand or the Underwriters on the other and the Company's and Platinum Finance's (which for purposes of this subsection (d) shall include St. Paul's), on the one hand, and the Underwriter's, on the other, relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and Platinum Finance and the Underwriters agree that it would not be just and equitable if contributions pursuant to this subsection (d) were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions in respect thereof) referred to above in this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Units underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters' obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint. (e) In the event that the Company and Platinum Finance fail to fulfill when due any of their payment obligations under subsections (a) or (d) of this Section 10 because it has not obtained the necessary funds from internal sources (due to insurance regulatory or other legal restrictions) or external sources, St. Paul agrees to make all such payments to the same extent as the Company or Platinum Finance is obligated to do so; provided, however, that notwithstanding anything to the contrary in this Section 10, (i) St. Paul's aggregate liability to the Underwriters under this subsection (e) and to the Common Shares Underwriters under Section 10(e) of the Common Shares 41 Underwriting Agreement, taken together, shall not exceed the excess of (I) $400 million over (II) the sum of (x) any indemnification, contribution or reimbursement of expense payments paid or payable by St. Paul to the Company pursuant to Section 10.02 of the Formation and Separation Agreement and (y) any damages or other amounts paid or payable by St. Paul to investors purchasing Units pursuant to the Prospectus, and any amendment or supplement thereto, or Common Shares pursuant to the Common Shares Prospectus, and any amendment or supplement thereto, and (ii) St. Paul's obligation to make a payment under this subsection (e) shall arise only in the event, and to the extent, that the related obligation of the Company or Platinum Finance to make a payment to the Underwriters under subsections (a) and (d) of this Section 10 relates to the information described in Schedule III hereto and Schedule III to the Common Shares Underwriting Agreement. The Company, Platinum Finance, St. Paul and the Underwriters understand that the identification of items in Schedule III hereto is made solely for the purposes of defining St. Paul's obligations to the Underwriters pursuant to this subsection (e) and for no other purpose. St. Paul must advise Goldman, Sachs & Co. in writing 60 days prior to paying or agreeing to pay an amount pursuant to clauses (i)(II)(x) or (y) of the second preceding sentence that would reduce St. Paul's remaining aggregate potential liability to the Underwriters pursuant to clause (ii) to below $100 million. (f) The obligations of the Company, Platinum Finance and St. Paul under this Section 10 shall be in addition to any liability which the Company, Platinum Finance and St. Paul may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section 10 shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each officer and director of the Company, Platinum Finance and St. Paul (including any person who, with his or her consent, is named in the Registration Statement as about to become a director of the Company) and to each person, if any, who controls the Company within the meaning of the Act. 11. (a) If any Underwriter shall default in its obligation to purchase the Units which it has agreed to purchase hereunder at a Time of Delivery, you may in your discretion arrange for you or another party or other parties to purchase such Units on the terms contained herein. If within thirty-six hours after such default by any Underwriter you do not arrange for the purchase of such Units, then the Company and Platinum Finance shall be entitled to a further period of thirty-six hours within which to procure another party or other parties reasonably satisfactory to you to purchase such Units on such terms. In the event that, within the respective prescribed periods, you notify the Company and Platinum Finance that you have so arranged for the purchase of such Units, or the Company and Platinum Finance notify you that they have so arranged for the purchase of such Units, you or the Company and Platinum Finance shall have the right to postpone such Time of Delivery for a period of not more than seven days, in order to effect whatever changes may thereby be made necessary in the Registration Statement or the Prospectus, or in any other documents or arrangements, and the Company and Platinum Finance agree to file promptly any amendments to the Registration Statement or the Prospectus which in your opinion may thereby be made necessary. The term "Underwriter" as used in this Agreement shall include any person substituted under this Section with like effect as if such person had originally been a party to this Agreement with respect to such Units. (b) If, after giving effect to any arrangements for the purchase of the Units of a defaulting Underwriter or Underwriters by you and the Company and Platinum Finance as provided in subsection (a) above, the aggregate number of such Units which remains unpurchased does not exceed one-eleventh of the aggregate number of all the Units to be purchased at such Time of 42 Delivery, then the Company and Platinum Finance shall have the right to require each non-defaulting Underwriter to purchase the number of shares which such Underwriter agreed to purchase hereunder at such Time of Delivery and, in addition, to require each non-defaulting Underwriter to purchase its pro rata share (based on the number of Units which such Underwriter agreed to purchase hereunder) of the Units of such defaulting Underwriter or Underwriters for which such arrangements have not been made; but nothing herein shall relieve a defaulting Underwriter from liability for its default. (c) If, after giving effect to any arrangements for the purchase of the Units of a defaulting Underwriter or Underwriters by you and the Company and Platinum Finance as provided in subsection (a) above, the aggregate number of such Units which remains unpurchased exceeds one-eleventh of the aggregate number of all the Units to be purchased at such Time of Delivery, or if the Company and Platinum Finance shall not exercise the right described in subsection (b) above to require non-defaulting Underwriters to purchase Units of a defaulting Underwriter or Underwriters, then this Agreement (or, with respect to the Second Time of Delivery, the obligations of the Underwriters to purchase and of the Company and Platinum Finance to sell the Optional Units) shall thereupon terminate, without liability on the part of any non-defaulting Underwriter or the Company and Platinum Finance, except for the expenses to be borne by the Company and Platinum Finance and the Underwriters as provided in Section 8 hereof and the indemnity and contribution agreements in Section 10 hereof; but nothing herein shall relieve a defaulting Underwriter from liability for its default. 12. The respective indemnities, agreements, representations, warranties and other statements of the Company, Platinum Finance, St. Paul and the several Underwriters, as set forth in this Agreement or made by or on behalf of them, respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation (or any statement as to the results thereof) made by or on behalf of any Underwriter, or any officer or director or controlling person of any Underwriter, the Company, Platinum Finance or St. Paul, or any officer or director or controlling person of the Company, Platinum Finance or St. Paul, and shall survive delivery of and payment for the Units. 13. If this Agreement shall be terminated pursuant to Section 11 hereof, neither the Company nor Platinum Finance shall then be under any liability to any Underwriter except as provided in Sections 8 and 10 hereof; but, if for any other reason, any Units are not delivered by or on behalf of the Company and Platinum Finance as provided herein, the Company and Platinum Finance will reimburse the Underwriters through you for all out-of-pocket expenses approved in writing by you, including fees and disbursements of counsel, reasonably incurred by the Underwriters in making preparations for the purchase, sale and delivery of the Units not so delivered, but neither the Company nor Platinum Finance shall then be under any further liability to any Underwriter except as provided in Sections 8 and 10 hereof. 14. In respect of any judgment or order given or made for any amount due hereunder that is expressed and paid in currency (the "judgment currency") other than United States dollars, the party against whom such judgment or order has been given or made will indemnify each party in whose favor such judgment or order has been given or made (the "Indemnitee") against any loss incurred by the Indemnitee as a result of any variation as between (i) the rate of exchange at which the United States dollar amount is converted into the judgment currency for the purpose of such judgment or order and (ii) the rate of exchange at which the Indemnitee is able to purchase United States dollars with the amount of the judgment currency actually received by such Indemnitee. The foregoing indemnity shall constitute a separate and independent obligation of the Company and the Underwriters and shall continue in full force and effect notwithstanding any such judgment or order as 43 aforesaid. The term "rate of exchange" shall include any premiums and costs of exchange payable in connection with the purchase of or conversion into United States dollars. 15. In all dealings hereunder, you shall act on behalf of each of the Underwriters, and the parties hereto shall be entitled to act and rely upon any statement, request, notice or agreement on behalf of any Underwriter made or given by you jointly or by Goldman, Sachs & Co. on behalf of you as the Representatives. All statements, requests, notices and agreements hereunder shall be in writing, and if to the Underwriters shall be delivered or sent by mail, telex or facsimile transmission to you as the representatives in care of Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004, Attention: Registration Department; and if to the Company shall be delivered or sent by mail to the address of the Company set forth in the Registration Statement, Attention: Secretary; and if to Platinum Finance shall be delivered or sent by mail to the address of Platinum Finance set forth in the Registration Statement; and if to St. Paul shall be delivered to The St. Paul Companies, Inc., 385 Washington Street, St. Paul, Minnesota 55102, Attention: Secretary; provided, however, that any notice to an Underwriter pursuant to Section 10(c) hereof shall be delivered or sent by mail, telex or facsimile transmission to such Underwriter at its address set forth in its Underwriters' Questionnaire, or telex constituting such Questionnaire, which address will be supplied to the Company and Platinum Finance by you upon request. Any such statements, requests, notices or agreements shall take effect upon receipt thereof. 16. This Agreement shall be binding upon, and inure solely to the benefit of, the Underwriters, the Company, Platinum Finance and St. Paul and, to the extent provided in Sections 10 and 12 hereof, the officers and directors of the Company, Platinum Finance and St. Paul and each person who controls the Company, Platinum Finance, St. Paul or any Underwriter, and their respective heirs, executors, administrators, successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. No purchaser of any of the Units from any Underwriter shall be deemed a successor or assign by reason merely of such purchase. 17. Time shall be of the essence of this Agreement. As used herein, the term "business day" shall mean any day when the Commission's office in Washington, D.C. is open for business. 18. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICTS OF LAWS RULES OF SUCH STATE. 19. This Agreement may be executed by any one or more of the parties hereto in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts shall together constitute one and the same instrument. 20. The Company is authorized, subject to applicable law, to disclose any and all aspects of this potential transaction that are necessary to support any U.S. federal income tax benefits expected to be claimed with respect to such transaction and all materials of any kind (including tax opinions and other tax analyses) related to those benefits, without the Underwriters imposing any limitation of any kind. [SIGNATURE PAGE FOLLOWS] . 44 If the foregoing is in accordance with your understanding, please sign and return to us eight counterparts hereof, and upon the acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof shall constitute a binding agreement among each of the Underwriters, the Company, Platinum Finance and St. Paul. It is understood that your acceptance of this letter on behalf of each of the Underwriters is pursuant to the authority set forth in a form of Agreement among Underwriters, the form of which shall be submitted to the Company for examination upon request, but without warranty on your part as to the authority of the signers thereof. Very truly yours, PLATINUM UNDERWRITERS HOLDINGS, LTD. By: ......................................... Name: Title: PLATINUM UNDERWRITERS FINANCE, INC. By: ......................................... Name: Title: THE ST. PAUL COMPANIES, INC. By: ......................................... Name: Title: Accepted as of the date hereof: GOLDMAN, SACHS & Co. [Co-Representatives] BY:...................................... (Goldman Sachs & Co.) On behalf of each of the Underwriters SCHEDULE I

1 SCHEDULE II

II-5 SCHEDULE III 1. In any Preliminary Prospectus or the Prospectus, or any amendment or supplement thereto, the following information: o All information (including both text and tables) in the following sections: "Pro Forma Financial Information", "Management's Discussion and Analysis of Pro Forma Financial Condition and Underwriting Results", "St. Paul Investment and Principal Shareholders" and "The Predecessor Business"; o All information (including both text and tables) in the "Prospectus Summary" section under the captions "--Background and the Transferred Business", "--St. Paul's Share Ownership", "--Selected Pro Forma Consolidated Financial Information and Operating Data"; o The information set forth in each table in the "Business" section under the captions "Our Business--Our Lines of Business" and "Our Business--Marketing"; o All text of the second paragraph in the "Business" section under the caption "Our Business--Marketing"; o All information (including both text and tables) on pages [ ]; o The following phrases and sentences: o "At January 1, 2001, St. Paul Re had approximately 398 employees" and "from a total of 398 employees who were employed by St. Paul Re as of January 1, 2001"; o "The number of underwriting offices was reduced by St. Paul Re from ten at January 1, 2001 to five as of March 31, 2002"; o "With respect to January 2002 renewals, St. Paul Re experienced substantial rate increases, generally ranging from 20% to 50% depending on the line of business"; o "Commencing January 2002, St. Paul Re has maintained normal maximum program limits of $5 million on risk programs, $6 million on casualty clash programs and $20 million on property catastrophe programs"; and o "St. Paul Re has conducted authorized reinsurance activities in the U.S. and London for many years, and has been well established as a lead underwriter in excess casualty, property catastrophe and certain other classes of reinsurance". 2. In the Registration Statement, or any amendment or supplement thereto, the following information: III-1 o In Part II, all information (including both text and tables) set forth under the captions "Financial Statement Schedules of Predecessor--Schedule III--Supplementary Insurance Information", "Financial Statement Schedules of Predecessor--Schedule IV--Reinsurance", and "Financial Statement Schedules of Predecessor--Schedule V--Valuation and Qualifying Accounts". III-2 ANNEX I Pursuant to Section 9(i) of the Underwriting Agreement, the accountants shall furnish letters to the Underwriters to the effect that: (i) They are independent certified public accountants with respect to the Company and its subsidiaries within the meaning of the Act and the applicable published rules and regulations thereunder; (ii) In their opinion, the financial statements and any supplementary financial information and schedules (and, if applicable, financial forecasts and/or pro forma financial information) examined by them and included in the Prospectus or the Registration Statement comply as to form in all material respects with the applicable accounting requirements of the Act and the related published rules and regulations thereunder; and, if applicable, they have made a review in accordance with standards established by the American Institute of Certified Public Accountants of the unaudited consolidated interim financial statements, selected financial data, pro forma financial information, financial forecasts and/or condensed financial statements derived from audited financial statements of the Company and Predecessor (as such term is defined in the Prospectus) for the periods specified in such letter, as indicated in their reports thereon, copies of which have been separately furnished to the representatives of the Underwriters (the "Representatives"); (iii) They have made a review in accordance with standards established by the American Institute of Certified Public Accountants of the [unaudited condensed consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows] included in the Prospectus as indicated in their reports thereon copies of which have been separately furnished to the Representatives and on the basis of specified procedures including inquiries of officials of the Company and St. Paul who have responsibility for financial and accounting matters regarding whether the unaudited condensed consolidated financial statements referred to in paragraph (vi)(A)(i) below comply as to form in all material respects with the applicable accounting requirements of the Act and the related published rules and regulations, nothing came to their attention that cause them to believe that the unaudited condensed consolidated financial statements do not comply as to form in all material respects with the applicable accounting requirements of the Act and the related published rules and regulations; (iv) The unaudited selected financial information with respect to [the consolidated results of operations and financial position] of Predecessor for the five most recent fiscal years included in the Prospectus agrees with the corresponding amounts (after restatements where applicable) in the audited consolidated financial statements for such five fiscal years which were included or incorporated by reference in the St. Paul's Annual Reports on Form 10-K for such fiscal years; (v) They have compared the information in the Prospectus under selected captions with the disclosure requirements of Regulation S-K and on the basis of limited procedures specified in such letter nothing came to their attention as a result of the foregoing procedures that caused them to believe that this information does not conform in all material respects with the disclosure requirements of Items 301, 302, 402 and 503(d), respectively, of Regulation S-K; (vi) On the basis of limited procedures, not constituting an examination in accordance with generally accepted auditing standards, consisting of a reading of the unaudited financial A-1 statements and other information referred to below, a reading of the latest available interim financial statements of St. Paul, the Company and their respective subsidiaries, inspection of the minute books of St. Paul, the Company and their respective subsidiaries since the date of the latest audited financial statements included in the Prospectus, inquiries of officials of St. Paul, the Company and their respective subsidiaries responsible for financial and accounting matters and such other inquiries and procedures as may be specified in such letter, nothing came to their attention that caused them to believe that: (A) (i) the [unaudited consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows] included in the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Act and the related published rules and regulations, or (ii) any material modifications should be made to the [unaudited condensed consolidated statements of income, consolidated balance sheets and consolidated statements of cash flows] included in the Prospectus for them to be in conformity with generally accepted accounting principles; (B) any other unaudited income statement data and balance sheet items included in the Prospectus do not agree with the corresponding items in the unaudited consolidated financial statements from which such data and items were derived, and any such unaudited data and items were not determined on a basis substantially consistent with the basis for the corresponding amounts in the audited consolidated financial statements included in the Prospectus; (C) the unaudited financial statements which were not included in the Prospectus but from which were derived any unaudited condensed financial statements referred to in clause (A) and any unaudited income statement data and balance sheet items included in the Prospectus and referred to in clause (B) were not determined on a basis substantially consistent with the basis for the audited consolidated financial statements included in the Prospectus; (D) any unaudited pro forma consolidated condensed financial statements included in the Prospectus do not comply as to form in all material respects with the applicable accounting requirements of the Act and the published rules and regulations thereunder or the pro forma adjustments have not been properly applied to the historical amounts in the compilation of those statements; (E) as of a specified date not more than five days prior to the date of such letter, there have been any changes in the consolidated capital stock (other than issuances of capital stock upon exercise of options and stock appreciation rights, upon earn-outs of performance shares and upon conversions of convertible securities, in each case which were outstanding on the date of the latest financial statements included in the Prospectus) or the capital or surplus, or any increase in the consolidated long-term debt of the Company and its subsidiaries, or any decreases in consolidated net current assets or stockholders' equity or other items specified by the Representatives, or any increases in any items specified by the Representatives, in each case as compared with amounts shown in the latest balance sheet included in the Prospectus, except in each case for changes, increases or decreases which the Prospectus discloses have occurred or may occur or which are described in such letter; and A-2 (F) for the period from the date of the latest financial statements included in the Prospectus to the specified date referred to in clause (E) there were any decreases in consolidated net revenues or operating profit or the total or per share amounts of consolidated net income or other items specified by the Representatives, or any increases in any items specified by the Representatives, in each case as compared with the comparable period of the preceding year and with any other period of corresponding length specified by the Representatives, except in each case for decreases or increases which the Prospectus discloses have occurred or may occur or which are described in such letter; and (vii) In addition to the examination referred to in their report(s) included in the Prospectus and the limited procedures, inspection of minute books, inquiries and other procedures referred to in paragraphs (iii) and (vi) above, they have carried out certain specified procedures, not constituting an examination in accordance with generally accepted auditing standards, with respect to certain amounts, percentages and financial information specified by the Representatives, which are derived from the general accounting records of St. Paul, the Company and their respective subsidiaries, which appear in the Prospectus, or in Part II of, or in exhibits and schedules to, the Registration Statement specified by the Representatives, and have compared certain of such amounts, percentages and financial information with the accounting records of St. Paul, the Company and their respective subsidiaries and have found them to be in agreement. A-3 EX-3.3 4 a2088388zex-3_3.txt EXHIBIT 3.3 EXHIBIT 3.3 CERTIFICATE OF INCORPORATION OF PLATINUM UNDERWRITERS FINANCE, INC. FIRST. The name of the corporation is Platinum Underwriters Finance, Inc. SECOND. The address of the corporation's registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street in the City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. THIRD. The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. FOURTH. The total number of shares which the corporation shall have authority to issue is 100 shares of Common Stock, and the par value of each of such shares is $1.00. FIFTH. The name and mailing address of the incorporator is Matthew G. Frankle, Esq., c/o Sullivan & Cromwell, 125 Broad Street, New York, New York 10004. SIXTH. Upon filing of this Certificate of Incorporation, and until successors are elected and qualified, Jerome T. Fadden shall serve as the sole director of the corporation. SEVENTH. The board of directors of the corporation is expressly authorized to adopt, amend or repeal by-laws of the corporation. EIGHTH. Elections of directors need not be by written ballot except and to the extent provided in the by-laws of the corporation. NINTH. A director of the corporation shall not be liable to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except to the extent that such exemption from liability or limitation thereof is not permitted under the Delaware General Corporation Law as currently in effect or as the same may hereafter be amended. No amendment, modification or repeal of this Article NINTH shall adversely affect any right or protection of a director that exists at the time of such amendment, modification or repeal. IN WITNESS WHEREOF, I have signed this certificate of incorporation this 10th day of May, 2002. /s/ Matthew G. Frankle ---------------------- Matthew G. Frankle -2- EX-3.4 5 a2088388zex-3_4.txt EXHIBIT 3.4 EXHIBIT 3.4 BY-LAWS OF PLATINUM UNDERWRITERS FINANCE, INC. ARTICLE I STOCKHOLDERS Section 1.1 ANNUAL MEETINGS. An annual meeting of stockholders shall be held for the election of directors at such date, time and place either within or without the State of Delaware as may be designated by the Board of Directors from time to time. Any other proper business may be transacted at the annual meeting. Section 1.2 SPECIAL MEETINGS. Special meetings of stockholders may be called at any time by the Chairman of the Board, if any, the Vice Chairman of the Board, if any, the President or the Board of Directors, to be held at such date, time and place either within or without the State of Delaware as may be stated in the notice of the meeting. Section 1.3 NOTICE OF MEETINGS. Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, date and hour of the meeting, and, in the case of a special meeting, the purpose or purposes for which the meeting is called. Unless otherwise provided by law, the written notice of any meeting shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder's address as it appears on the records of the Corporation. Section 1.4 ADJOURNMENTS. Any meeting of stockholders, annual or special, may be adjourned from time to time, to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 1.5 QUORUM. At each meeting of stockholders, except where otherwise provided by law or the certificate of incorporation or these by-laws, the holders of a majority of the outstanding shares of stock entitled to vote on a matter at the meeting, present in person or represented by proxy, shall constitute a quorum. In the absence of a quorum of the holders of any class of stock entitled to vote on a matter, the holders of such class so present or represented may, by majority vote, adjourn the meeting of such class from time to time in the manner provided by Section 1.4 of these by-laws until a quorum of such class shall be so present or represented. Shares of its own capital stock belonging on the record date for the meeting to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity. Section 1.6 ORGANIZATION. Meetings of stockholders shall be presided over by the Chairman of the Board, if any, or in the absence of the Chairman of the Board by the Vice Chairman of the Board, if any, or in the absence of the Vice Chairman of the Board by the President, or in the absence of the President by a Vice President, or in the absence of the foregoing persons by a chairman designated by the Board of Directors, or in the absence of such designation by a chairman chosen at the meeting. The Secretary, or in the absence of the Secretary an Assistant Secretary, shall act as secretary of the meeting, but in the absence of the Secretary and any Assistant Secretary the chairman of the meeting may appoint any person to act as secretary of the meeting. Section 1.7 VOTING; PROXIES. Unless otherwise provided in the certificate of incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of stock held by such stockholder which has voting power upon the matter in question. Each stockholder entitled to vote at a meeting of stockholders or to express consent or dissent to corporate action in writing without a meeting may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from its date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power, regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the Corporation generally. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with the Secretary of the Corporation. Voting at meetings of stockholders need not be by written ballot unless the holders of a majority of the outstanding shares of all classes of stock entitled to vote thereon present in person or represented by proxy at such meeting shall so determine. Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. In all other matters, unless otherwise provided by law or by the certificate of incorporation or these by-laws, the affirmative vote of the holders of a majority of the shares present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. Where a separate vote by class or classes is required, the affirmative vote of the holders of a majority of the shares of such class or classes present in person or represented by proxy at the meeting shall be the act of such class or classes, except as otherwise provided by law or by the certificate of incorporation or these by-laws. Section 1.8 FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. -2- In order that the Corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board of Directors. If no record date has been fixed by the Board of Directors, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the Corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the Corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the Corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action. In order that the Corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders entitled to exercise any rights in respect of any change, conversion or exchange of stock, or for the purpose of any other lawful action, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted, and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto. Section 1.9 LIST OF STOCKHOLDERS ENTITLED TO VOTE. The Secretary shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the time and place of the meeting during the whole time thereof and may be inspected by any stockholder who is present. ARTICLE II BOARD OF DIRECTORS Section 2.1 POWERS; NUMBER; QUALIFICATIONS. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, except as may be otherwise provided by law or in the certificate of incorporation. The Board of Directors shall consist of one or more members, the number thereof to be determined from time to time by the Board. Directors need not be stockholders. Section 2.2 ELECTION; TERM OF OFFICE; RESIGNATION; REMOVAL; VACANCIES. Each director shall hold office until his or her successor is elected and qualified or until his or her earlier -3- resignation or removal. Any director may resign at any time upon written notice to the Board of Directors or to the President or the Secretary of the Corporation. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein no acceptance of such resignation shall be necessary to make it effective. Any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. Unless otherwise provided in the certificate of incorporation or these by-laws, vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class or from any other cause may be filled by a majority of the directors then in office, although less than a quorum, or by the sole remaining director. Any director elected or appointed to fill a vacancy shall hold office until the next annual meeting of the stockholders. Section 2.3 REGULAR MEETINGS. Regular meetings of the Board of Directors may be held at such places within or without the State of Delaware and at such times as the Board may from time to time determine, and if so determined notice thereof need not be given. Section 2.4 SPECIAL MEETINGS. Special meetings of the Board of Directors may be held at any time or place within or without the State of Delaware whenever called by the Chairman of the Board, if any, by the Vice Chairman of the Board, if any, by the President or by any two directors. Reasonable notice thereof shall be given by the person or persons calling the meeting. Section 2.5 PARTICIPATION IN MEETINGS BY CONFERENCE TELEPHONE PERMITTED. Unless otherwise restricted by the certificate of incorporation or these by-laws, members of the Board of Directors, or any committee designated by the Board, may participate in a meeting of the Board or of such committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this by-law shall constitute presence in person at such meeting. Section 2.6 QUORUM; VOTE REQUIRED FOR ACTION. At all meetings of the Board of Directors one-third of the entire Board shall constitute a quorum for the transaction of business. The vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board unless the certificate of incorporation or these by-laws shall require a vote of a greater number. In case at any meeting of the Board a quorum shall not be present, the members of the Board present may adjourn the meeting from time to time until a quorum shall be present. Section 2.7 ORGANIZATION. Meetings of the Board of Directors shall be presided over by the Chairman of the Board, if any, or in the absence of the Chairman of the Board by the Vice Chairman of the Board, if any, or in the absence of the Vice Chairman of the Board by the President, or in their absence by a chairman chosen at the meeting, the Secretary, or in the absence of the Secretary an Assistant Secretary, shall act as secretary of the meeting, but in the absence of the Secretary and any Assistant Secretary the chairman of the meeting may appoint any person to act as secretary of the meeting. Section 2.8 ACTION BY DIRECTORS WITHOUT A MEETING. Unless otherwise restricted by the certificate of incorporation or these by-laws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all -4- members of the Board or of such committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee. Section 2.9 COMPENSATION OF DIRECTORS. Unless otherwise restricted by the certificate of incorporation or these by-laws, the Board of Directors shall have the authority to fix the compensation of directors. ARTICLE III COMMITTEES Section 3.1 COMMITTEES. The Board of Directors may designate one or more committees, each committee to consist of one or more of the directors of the Corporation. The Board may designate one or more directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. In the absence or disqualification of a member of a committee, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members constitute a quorum, may unanimously appoint another member of the Board to act at the meeting in the place of any such absent or disqualified member. Any such committee, to the extent provided in the resolution of the Board of Directors or in these by-laws, shall have and may exercise all the powers and authority of the Board of Directors in the management of the business and affairs of the Corporation, and may authorize the seal of the Corporation to be affixed to all papers which may require it; but no such committee shall have the power or authority in reference to the following matters: (i) approving or adopting, or recommending to the stockholders, any action or matter expressly required by law to be submitted to stockholders for approval, (ii) adopting, amending or repealing these By-Laws or (iii) removing or indemnifying directors. Section 3.2 COMMITTEE RULES. Unless the Board of Directors otherwise provides, each committee designated by the Board may adopt, amend and repeal rules for the conduct of its business. In the absence of a provision by the Board or a provision in the rules of such committee to the contrary, a majority of the entire authorized number of members of such committee shall constitute a quorum for the transaction of business, the vote of a majority of the members present at a meeting at the time of such vote if a quorum is then present shall be the act of such committee, and in other respects each committee shall conduct its business in the same manner as the Board conducts its business pursuant to Article II of these by-laws. ARTICLE IV OFFICERS Section 4.1 OFFICERS; ELECTION. As soon as practicable after the annual meeting of stockholders in each year, the Board of Directors shall elect a President and a Secretary, and it may, if it so determines, elect from among its members a Chairman of the Board and a Vice Chairman of the Board. The Board may also elect one or more Vice Presidents, one or more Assistant Vice Presidents, one or more Assistant Secretaries, a Treasurer and one or more Assistant Treasurers and such other officers as the Board may deem desirable or appropriate and may give any of them such further designations or alternate titles as it considers desirable. Any number of offices may be held by the same person unless the certificate of incorporation or these by-laws otherwise provide. -5- Section 4.2 TERM OF OFFICE; RESIGNATION; REMOVAL; VACANCIES. Unless otherwise provided in the resolution of the Board of Directors electing any officer, each officer shall hold office until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any officer may resign at any time upon written notice to the Board or to the President or the Secretary of the Corporation. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein no acceptance of such resignation shall be necessary to make it effective. The Board may remove any officer with or without cause at any time. Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation, but the election of an officer shall not of itself create contractual rights. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise may be filled by the Board at any regular or special meeting. Section 4.3 POWERS AND DUTIES. The officers of the Corporation shall have such powers and duties in the management of the Corporation as shall be stated in these by-laws or in a resolution of the Board of Directors which is not inconsistent with these by-laws and, to the extent not so stated, as generally pertain to their respective offices, subject to the control of the Board. The Secretary shall have the duty to record the proceedings of the meetings of the stockholders, the Board of Directors and any committees in a book to be kept for that purpose. The Board may require any officer, agent or employee to give security for the faithful performance of his or her duties. ARTICLE V STOCK Section 5.1 CERTIFICATES. Every holder of stock in the Corporation shall be entitled to have a certificate signed by or in the name of the Corporation by the Chairman or Vice Chairman of the Board of Directors, if any, or the President or a Vice President, and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, of the Corporation, representing the number of shares of stock in the Corporation owned by such holder. If such certificate is manually signed by one officer or manually countersigned by a transfer agent or by a registrar, any other signature on the certificate may be a facsimile. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. Section 5.2 LOST, STOLEN OR DESTROYED STOCK CERTIFICATES; ISSUANCE OF NEW CERTIFICATES. The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner's legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate. ARTICLE VI MISCELLANEOUS Section 6.1 FISCAL YEAR. The fiscal year of the Corporation shall be determined by the Board of Directors. -6- Section 6.2 SEAL. The Corporation may have a corporate seal which shall have the name of the Corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board of Directors. The corporate seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced. Section 6.3 WAIVER OF NOTICE OF MEETINGS OF STOCKHOLDERS, DIRECTORS AND COMMITTEES. Whenever notice is required to be given by law or under any provision of the certificate of incorporation or these by-laws, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors or members of a committee of directors need be specified in any written waiver of notice unless so required by the certificate of incorporation or these by-laws. Section 6.4 INDEMNIFICATION OF DIRECTORS, OFFICERS AND EMPLOYEES. The Corporation shall indemnify to the full extent permitted by law any person made or threatened to be made a party to any action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person or such person's testator or intestate is or was a director, officer or employee of the Corporation or serves or served at the request of the Corporation any other enterprise as a director, officer or employee. Expenses, including attorneys' fees, incurred by any such person in defending any such action, suit or proceeding shall be paid or reimbursed by the Corporation promptly upon receipt by it of an undertaking of such person to repay such expenses if it shall ultimately be determined that such person is not entitled to be indemnified by the Corporation. The rights provided to any person by this by-law shall be enforceable against the Corporation by such person who shall be presumed to have relied upon it in serving or continuing to serve as a director, officer or employee as provided above. No amendment of this by-law shall impair the rights of any person arising at any time with respect to events occurring prior to such amendment. For purposes of this by-law, the term "Corporation" shall include any predecessor of the Corporation and any constituent corporation (including any constituent of a constituent) absorbed by the Corporation in a consolidation or merger; the term "other enterprise" shall include any corporation, partnership, joint venture, trust or employee benefit plan; service "at the request of the Corporation" shall include service as a director, officer or employee of the Corporation which imposes duties on, or involves services by, such director, officer or employee with respect to an employee benefit plan, its participants or beneficiaries; any excise taxes assessed on a person with respect to an employee benefit plan shall be deemed to be indemnifiable expenses; and action by a person with respect to an employee benefit plan which such person reasonably believes to be in the interest of the participants and beneficiaries of such plan shall be deemed to be action not opposed to the best interests of the Corporation. Section 6.5 INTERESTED DIRECTORS; QUORUM. No contract or transaction between the Corporation and one or more of its directors or officers, or between the Corporation and any other corporation, partnership, association or other organization in which one or more of its directors or officers are directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his or her or their votes are counted for such purpose, if: (1) the material facts as to his or -7- her relationship or interest and as to the contract or transaction are disclosed or are known to the Board or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested directors, even though the disinterested directors be less than a quorum; or (2) the material facts as to his or her relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereon, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (3) the contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board, a committee thereof or the stockholders. Common or interested directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction. Section 6.6 FORM OF RECORDS. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect the same. Section 6.7 AMENDMENT OF BY-LAWS. These by-laws may be amended or repealed, and new by-laws adopted, by the Board of Directors, but the stockholders entitled to vote may adopt additional by-laws and may amend or repeal any by-law whether or not adopted by them. -8- EX-4.2 6 a2088388zex-4_2.txt EXHIBIT 4.2 EXHIBIT 4.2 ================================================================================ PLATINUM UNDERWRITERS FINANCE, INC. ISSUER and PLATINUM UNDERWRITERS HOLDINGS, LTD. GUARANTOR to JPMORGAN CHASE BANK TRUSTEE ------------ FORM OF INDENTURE Dated as of -, 2002 GUARANTEED DEBT SECURITIES ------------ ================================================================================ Platinum Underwriters Finance, Inc. Reconciliation and tie between Trust Indenture Act of 1939 and Indenture, dated as of -, 2002

- ---------------- NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a part of the Indenture. TABLE OF CONTENTS ---------------

-iv- INDENTURE, dated as -, 2002, among Platinum Underwriters Finance, Inc., a corporation duly organized and existing under the laws of the State of Delaware, having its principal office at - (herein called the "COMPANY"), and Platinum Underwriting Holdings, Ltd., a Bermuda corporation duly organized and existing under the laws of Bermuda, having its principal office at - - (hereinafter called the "GUARANTOR"), and JPMorgan Chase Bank, a New York banking corporation duly organized and existing under the laws of the State of New York, having its principal office at 450 West 33rd Street, New York, New York as Trustee (herein called the "TRUSTEE"). RECITALS OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its unsecured and unsubordinated debentures, notes or other evidences of indebtedness (herein called the "SECURITIES"), to be issued in one or more series as in this Indenture provided. All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done. RECITALS OF THE GUARANTOR The Guarantor desires to make the Guarantees as provided for herein. All things necessary to make this Indenture a valid agreement of the Guarantor, in accordance with its terms, have been done. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of series thereof, as follows: ARTICLE ONE Definitions and Other Provisions of General Application Section 101. DEFINITIONS. For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires: (1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; (2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles, and, except as otherwise herein expressly provided, the term "generally accepted accounting principles" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted at the date of such computation; and (4) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision. Certain terms, used principally in Article Six, are defined in that Article. "ACT", when used with respect to any Holder, has the meaning specified in Section 104. "AFFILIATE" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control" when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing. "AUTHENTICATING AGENT" means any Authenticating Agent appointed pursuant to Section 614 to authenticate Securities and which, initially, shall be the Trustee. "BOARD OF DIRECTORS" means either the board of directors of the Company or the Guarantor, as the case may be, and any duly authorized committee of such boards. "BOARD RESOLUTION" means a copy of a resolution certified by the Corporate Secretary or an Assistant Corporate Secretary of the Company or the Guarantor, as the case may be, to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, and delivered to the Trustee. "BUSINESS DAY", when used with respect to any Place of Payment, means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in that Place of Payment are authorized or obligated by law to close. "COMMISSION" means the Securities and Exchange Commission, as from time to time constituted, created under the Exchange Act, or, if at any time after the execution of this instrument such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "COMPANY" means the Person named as the "Company" in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor corporation. "COMPANY REQUEST" or "COMPANY ORDER" and "GUARANTOR REQUEST" and "GUARANTOR ORDER" means respectively, a written request or order signed in the name of the Company or the Guarantor, as the case may be, by the Chairman of the Board, the President or a -2- Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company or the Guarantor, as the case may be, and delivered to the Trustee. "CORPORATE TRUST OFFICE" means the principal office of the Trustee in The City of New York, at which at any particular time its corporate trust business in such City may be administered. At the date hereof, such office is located at 450 West 33rd Street, New York, New York 10001, Attention: Institutional Trust Services. "CORPORATION" includes corporations, associations, companies and business trusts. "DEFAULTED INTEREST" has the meaning specified in Section 307. "DEPOSITORY" means, with respect to the Securities of any series issuable or issued in whole or in part in the form of one or more Global Securities, the clearing agency registered under the Exchange Act specified for that purpose as contemplated by Section 301. "EVENT OF DEFAULT" has the meaning specified in Section 501. "EXCHANGE ACT" means the Securities Exchange Act of 1934 as it may be amended and any successor act thereto. "GLOBAL SECURITY" means a security bearing the legend specified in Section 202 evidencing all or part of a series of Securities, authenticated and delivered to the Depository for such series or its nominee, and registered in the name of such Depository or nominee. "GUARANTEE" means any guarantee of the Guarantor endorsed on a Security, authenticated and delivered pursuant to this Indenture and shall include the Guarantee set forth in Article 13. "GUARANTOR" means the Person named as the "Guarantor" in the first paragraph of this instrument until a successor corporation shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Guarantor" shall mean such successor corporation. "HOLDER" means a Person in whose name a Security is registered in the Security Register. "INDENTURE" means this instrument as originally executed or as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and shall include the terms of particular series of Securities established as contemplated by Section 301. "INTEREST", when used with respect to an Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity. "INTEREST PAYMENT DATE", when used with respect to any security, means the Stated Maturity of an installment of interest on such Security. -3- "MATURITY", when used with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise. "OFFICERS' CERTIFICATE" means a certificate signed by the Chairman of the Board, the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company or the Guarantor, as the case may be, and delivered to the Trustee. One of the officers signing an Officers' Certificate given pursuant to Section 1006 shall be the principal executive, financial or accounting officer of the Company or the Guarantor, as the case may be. "OPINION OF COUNSEL" means a written opinion of counsel, who may be counsel for the Company or the Guarantor, as the case may be. "ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which provides for an amount less than the principal amount thereof to be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502. "OUTSTANDING", when used with respect to Securities, means, as of the date of determination, all Securities theretofore authenticated and delivered under this Indenture, except: (i) Securities theretofore cancelled by the Trustee or delivered to the Trustee for cancellation; (ii) Securities for whose payment or redemption money in the necessary amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company or the Guarantor) in trust or set aside and segregated in trust by the Company or the Guarantor (if the Company or the Guarantor shall act as its own Paying Agent) for the Holders of such Securities; PROVIDED that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; and (iii) Securities which have been paid pursuant to Section 306 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, other than any such Securities in respect of which there shall have been presented to the Trustee proof satisfactory to it that such Securities are held by a protected purchaser in whose hands such Securities are valid obligations of the Company; PROVIDED, HOWEVER, that in determining whether the Holders of the requisite principal amount of the Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder, (i) the principal amount of an Original Issue Discount Security that shall be deemed to be Outstanding shall be the amount of the principal thereof that would be due and payable as of the date of such determination upon acceleration of the Maturity thereof pursuant to Section 502, (ii) the principal amount of a Security denominated in a foreign currency or currencies shall be the U.S. dollar equivalent, determined on the date of original issuance of such Security, of the principal amount (or, in the case of an Original Issue Discount Security, the -4- U.S. dollar equivalent on the date of original issuance of such Security of the amount determined as provided in (i) above) of such Security, and (iii) Securities owned by the Company or the Guarantor or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which the Trustee knows to be so owned shall be so disregarded. Securities so owned which have been pledged in good faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the Trustee the pledgee's right so to act with respect to such Securities and that the pledgee is not the Company or the Guarantor or any other obligor upon the Securities or any Affiliate of the Company or of such other obligor. "PAYING AGENT" means any Person authorized by the Company or the Guarantor to pay the principal of (and premium, if any) or interest on any Securities on behalf of the Company or the Guarantor, as the case may be. "PERSON" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, limited liability company, unincorporated organization or government or any agency or political subdivision thereof. "PLACE OF PAYMENT", when used with respect to the Securities of any series, means the place or places where the principal of (and premium, if any) and interest on the Securities of that series are payable as specified as contemplated by Section 301. "PREDECESSOR SECURITY" of any particular Security means every previous Security evidencing all or a portion of the same debt as that evidenced by such particular Security and, for the purposes of this definition, any Security authenticated and delivered under Section 306 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen Security. "REDEMPTION DATE", when used with respect to any Security to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture. "REDEMPTION PRICE", when used with respect to any Security to be redeemed, means the price at which it is to be redeemed pursuant to this Indenture. "REGULAR RECORD DATE" for the interest payable on any Interest Payment Date on the Securities of any series means the date specified for that purpose as contemplated by Section 301. "RESPONSIBLE OFFICER", when used with respect to the Trustee, means any officer of the Trustee with direct responsibility for the administration of this Indenture and also means, with respect to a particular corporate trust matter, any other officer of the Trustee to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "SECURITIES" has the meaning stated in the first recital of this Indenture and more particularly means any Securities authenticated and delivered under this Indenture. "SECURITY REGISTER" and "SECURITY REGISTRAR" have the respective meanings specified in Section 305. -5- "SPECIAL RECORD DATE" for the payment of any Defaulted Interest means a date fixed by the Trustee pursuant to Section 307. "STATED MATURITY", when used with respect to any Security or any installment of principal thereof or interest thereon, means the date specified in such Security as the fixed date on which the principal of such Security or such installment of principal or interest is due and payable. "TRUSTEE" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean or include each Person who is then a Trustee hereunder, and if at any time there is more than one such Person, "Trustee" as used with respect to the Securities of any series shall mean the Trustee with respect to Securities of that series. "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939 as in force at the date as of which this instrument was executed, except as provided in Section 905; PROVIDED, however, that in the event the Trust Indenture Act of 1939 is amended after such date, "Trust Indenture Act" means, to the extent required by such amendment, the Trust Indenture Act of 1939 as amended. "U.S. GOVERNMENT OBLIGATIONS" has the meaning specified in Section 1404. "VICE PRESIDENT", when used with respect to the Company, Guarantor or the Trustee, means any vice president, whether or not designated by a number or a word or words added before or after the title "vice president". Section 102. COMPLIANCE CERTIFICATES AND OPINIONS. Except as otherwise expressly provided by this Indenture, upon any application or request by the Company or the Guarantor to the Trustee to take any action under any provision of this Indenture, the Company or the Guarantor, as the case may be, shall furnish to the Trustee an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that in the opinion of such counsel such action is authorized or permitted by this Indenture and that all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include (1) a statement that each individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; -6- (3) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and (4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. Section 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of any officer of the Company or the Guarantor may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company or the Guarantor stating that the information with respect to such factual matters is in the possession of the Company or the Guarantor, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. Section 104. ACTS OF HOLDERS. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company or the Guarantor or both of them. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "ACT" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 601) conclusive in favor of the Trustee and the Company or the Guarantor, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by a certificate of a notary public or other officer authorized by law to take acknowledgments of deeds, certifying -7- that the individual signing such instrument or writing acknowledged to him the execution thereof. Where such execution is by a signer acting in a capacity other than his individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority. The fact and date of the execution of any such instrument or writing, or the authority of the Person executing the same, may also be proved in any other manner which the Trustee deems sufficient. (c) The ownership of Securities shall be proved by the Security Register. (d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Trustee, the Company or the Guarantor in reliance thereon, whether or not notation of such action is made upon such Security. Section 105. NOTICES, ETC., TO TRUSTEE, COMPANY AND GUARANTOR. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (1) the Trustee by any Holder or by the Company or the Guarantor shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, Attention: Institutional Trust Services, or (2) the Company or the Guarantor by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company addressed to it at the address of its principal office specified in the first paragraph of this instrument with a copy to the Guarantor addressed to it at the address specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company or the Guarantor, as the case may be. Section 106. NOTICE TO HOLDERS; WAIVER. Where this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at his address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. -8- In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. Section 107. CONFLICT WITH TRUST INDENTURE ACT. If any provision hereof limits, qualifies or conflicts with another provision hereof which is required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control. Section 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. Section 109. SUCCESSORS AND ASSIGNS. All covenants and agreements in this Indenture by the Company or the Guarantor shall bind its respective successors and assigns, whether so expressed or not. Section 110. SEPARABILITY CLAUSE. In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 111. BENEFITS OF INDENTURE. Nothing in this Indenture or in the Securities, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture. Section 112. GOVERNING LAW. This Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York. Section 113. LEGAL HOLIDAYS. In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall not be a Business Day at any Place of Payment, then (unless otherwise provided in Section 301 of this Indenture or in the Securities) payment of interest or principal (and premium, if any) need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or Redemption Date, or at the Stated Maturity, provided that no interest shall accrue with respect to such payment, for the period from and after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be. -9- ARTICLE TWO Security Forms Section 201. FORMS GENERALLY. The Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange or depository therefor or as may, consistently herewith, be determined by the officers executing such Securities, as evidenced by their execution thereof. The Guarantees by the Guarantor to be endorsed on the Securities of each series shall be in substantially the form set forth in this Article, or in such other form as shall be established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, in each case with such appropriate insertions, omissions, substitutions and other corrections as are required or permitted by this Indenture or any indenture supplemental hereto, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith be determined by the officers executing such Guarantees, as evidenced by their execution of such Guarantees. If the form of Securities or the related Guarantee of any series is established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and the Guarantor, as the case may be, and delivered to the Trustee at or prior to the delivery of the Company Order and Guarantor Order contemplated by Section 303 for the authentication and delivery of such Securities. The Trustee's certificates of authentication shall be in substantially the form set forth in this Article. The definitive Securities shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, provided that such method is permitted by the rules of any securities exchange on which such securities may be listed, all as determined by the officers executing such Securities, as evidenced by their execution of such Securities. Section 202. FORM OF FACE OF SECURITY. [Insert any legend required by the Internal Revenue Code and the regulations thereunder.] Platinum Underwriters Finance, Inc. ...................................... No. .......... $ .......... Platinum Underwriters Finance, Inc. a corporation duly organized and existing under the laws of the State of Delaware (herein called the "COMPANY", which term includes any -10- successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to ............................................ or registered assigns, the principal sum of ....................... Dollars on ...................................... ............... [IF THE SECURITY IS TO BEAR INTEREST PRIOR TO MATURITY, INSERT --, and to pay interest thereon from ........... or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually on ................ and ................ in each year, commencing ..........., at the rate of ...% per annum, until the principal hereof is paid or made available for payment [IF APPLICABLE INSERT --, provided that any principal and premium, and any such installment of interest, which is overdue shall bear interest at the rate of ....% per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand]. The interest so payable shall be calculated on the basis of a 360-day year of twelve 30-day months. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest, which shall be the ...... or ....... (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture]. [IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT -- The principal of this Security shall not bear interest except in the case of a default in payment of principal upon acceleration, upon redemption or at Stated Maturity and in such case the overdue principal and any overdue premium shall bear interest at the rate of ...% per annum (to the extent that the payment of such interest shall be legally enforceable), from the dates such amounts are due until they are paid or made available for payment. Interest on any overdue principal or premium shall be payable on demand. [Any such interest on overdue principal or premium which is not paid on demand shall bear interest at the rate of ......% per annum (to the extent that the payment of such interest on interest shall be legally enforceable), from the date of such demand until the amount so demanded is paid or made available for payment. Interest on any overdue interest shall be payable on demand.] Payment of the principal of (and premium, if any) [IF APPLICABLE, INSERT - and any such interest on this Security] will be made at the office or agency of the Company maintained for that purpose in New York, New York, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts [IF APPLICABLE, INSERT -- ; PROVIDED, HOWEVER, that at the option of the Company payment of interest may be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register]. Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. -11- Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal. Dated:................. PLATINUM UNDERWRITERS FINANCE, INC. By .................. Attest: ................................. Section 203. FORM OF REVERSE OF SECURITY. This Security is one of a duly authorized issue of securities of the Company (herein called the "SECURITIES"), issued and to be issued in one or more series under an Indenture, dated as of ____________ (herein called the "INDENTURE", which term shall have the meaning assigned to it in such instrument), between the Company and JPMorgan Chase Bank, as Trustee (herein called the "TRUSTEE", which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. This Security is one of the series designated on the face hereof [IF APPLICABLE, INSERT --, limited in aggregate principal amount to $...........]. [IF APPLICABLE, INSERT -- The Securities of this series are subject to redemption upon not more than 60 or less than 30 days' notice by mail,] [IF APPLICABLE, INSERT -- (1) on ......... in any year commencing with the year ..... and ending with the year ...... through operation of the sinking fund for this series at a Redemption Price equal to 100% of the principal amount, and (2)] at any time [on or after .........., 20..], as a whole or in part, at the election of the Company, at the following Redemption Prices (expressed as percentages of the principal amount): If redeemed [on or before .............., __%, and if redeemed] during the 12-month period beginning ........ of the years indicated.

-12- and thereafter at a Redemption Price equal to .....,% of the principal amount, together in the case of any such redemption [IF APPLICABLE, INSERT -- (whether through operation of the sinking fund or otherwise)] with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.] [IF APPLICABLE, INSERT -- The Securities of this series are subject to redemption upon not more than 60 or less than 30 days' notice by mail, (1) on ............ in any year commencing with the year .... and ending with the year .... through operation of the sinking fund for this series at the Redemption Prices for redemption through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below, and (2) at any time [on or after ..........., as a whole or in part, at the election of the Company, at the Redemption Prices for redemption otherwise than through operation of the sinking fund (expressed as percentages of the principal amount) set forth in the table below: If redeemed during the 12-month period beginning ............ of the years indicated,

and thereafter at a Redemption Price equal to .....% of the principal amount, together in the case of any such redemption (whether through operation of the sinking fund or otherwise) with accrued interest to the Redemption Date, but interest installments whose Stated Maturity is on or prior to such Redemption Date will be payable to the Holders of such Securities, or one or more Predecessor Securities, of record at the close of business on the relevant Record Dates referred to on the face hereof, all as provided in the Indenture.] [Notwithstanding the foregoing, the Company may not, prior to ............, redeem any Securities of this series as contemplated by [Clause (2) of] the preceding paragraph as a part of, or in anticipation of, any refunding operation by the application, directly or indirectly, of moneys borrowed having an interest cost to the Company (calculated in accordance with generally accepted financial practice) of less than .....% per annum.] [The sinking fund for this series provides for the redemption on .......... in each year beginning with the year ........ and ending with the year ...... of [not less than] $....... [("mandatory sinking fund") and not more than $..........] aggregate principal amount of Securities of this series. [Securities of this series acquired or redeemed by the Company otherwise than -13- through [mandatory] sinking fund payments may be credited against subsequent [mandatory] sinking fund payments otherwise required to be made -- in the inverse order in which they become due.] In the event of redemption of this Security in part only, a new Security or Securities of this series and of a like tenor for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the cancellation hereof. [IF THE SECURITY IS NOT AN ORIGINAL ISSUE DISCOUNT SECURITY,-- If an Event of Default with respect to Securities of this series shall occur and be continuing, the principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture.] [IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, -- If an Event of Default with respect to Securities of this series shall occur and be continuing, an amount of principal of the Securities of this series may be declared due and payable in the manner and with the effect provided in the Indenture. Such amount shall be equal to -- INSERT FORMULA FOR DETERMINING THE AMOUNT. Upon payment (i) of the amount of principal so declared due and payable and (ii) of interest on any overdue principal, premium and overdue interest (in each case to the extent that the payment of such interest shall be legally enforceable), all of the Company's obligations in respect of the payment of the principal of and premium and interest, if any, on the Securities of this series shall terminate.] [The Indenture contains provisions for defeasance at any time of [the entire indebtedness of this Security or] [certain restrictive covenants and Events of Default with respect to this Security] [, in each case] upon compliance with certain conditions set forth therein.] The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the majority of the Holders in principal amount of the Securities at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of each series at the time Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security. No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium, and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of and any premium and interest on this Security are payable, duly endorsed by, or -14- accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. Prior to due presentment for registration of transfer of this Note, the Company, the Guarantor, the Trustee, any paying agent and the Registrar may deem and treat the registered holder hereof as the absolute owner hereof (whether or not this Note shall be overdue and notwithstanding any notice of ownership or writing hereon made by anyone other than the Registrar) for the purpose of receiving payment of or on account of the principal hereof and premium, if any, and interest due hereon and for all other purposes, and neither the Company, the Guarantor nor the Trustee nor any paying agent nor any Registrar shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of or the interest on this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture, against any incorporator, shareholder, officer or director, past, present or future, as such, of the Company or the Guarantor or of any predecessor or successor corporations, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released. The Securities of this series are issuable only in registered form without coupons in denominations of $........ and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary. The Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York. All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture. Section 204. FORM OF GUARANTEE. For value received, Platinum Underwriters Holdings, Ltd., a corporation organized under the laws of Bermuda (herein called the "GUARANTOR", which term includes any successor corporation under the Indenture referred to in the Note upon which this Guarantee is -15- endorsed), hereby fully and unconditionally guarantees to the Holder of the Note upon which this Guarantee is endorsed, and to the Trustee on behalf of such Holder, the due and punctual payment of the principal of, premium, if any, and interest on such Note, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, according to the terms of such Note and of the Indenture. In case of the failure of the Company punctually to make any such payment of principal, premium, if any, or interest, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Company. The Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of such Note or the Indenture, the absence of any action to enforce the same, any waiver or consent by the Holder of such Note or by the Trustee with respect to any provisions thereof or of the Indenture, the obtaining of any judgment against the Company or any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. The Guarantor hereby waives the benefits of division and discussion, diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to such Note or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged except by complete performance of the obligations contained in such Note and in this Guarantee. The Holder of the Note upon which this Guarantee is endorsed is entitled to the further benefits relating hereto set forth in the Indenture. No reference herein to the Indenture and no provision of this Guarantee or of the Indenture shall alter or impair the guarantee of the Guarantor, which is absolute and unconditional, of the due and punctual payment of the principal of and interest on the Note upon which this Guarantee is endorsed. This Guarantee shall be governed by and construed in accordance with the laws of the State of New York. All terms used in this Guarantee which are defined in the Indenture shall have the meanings assigned to them in the Indenture. This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the Note upon which this Guarantee is endorsed shall have been executed by the Trustee under the Indenture by the manual signature of one of its authorized signatories. IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly executed. PLATINUM UNDERWRITERS HOLDINGS, LTD. By: _____________________________ -16- Name: Title: Attest: By: ______________________________ Name: Title: Section 205. FORM OF LEGEND FOR GLOBAL SECURITIES. Any Global Security authenticated and delivered hereunder shall bear a legend in substantially the following form: "This Security is a Global Security within the meaning of the Indenture hereinafter referred to and is registered in the name of a Depository or a nominee thereof. This Security may not be exchanged in whole or in part for a Security registered, and no transfer of this Security in whole or in part may be registered in the name of any person other than such Depository or a nominee thereof, except in the limited circumstances described in the Indenture." Section 206. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The Trustee's certificates of authentication shall be in substantially the following form: -17- This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. JPMORGAN CHASE BANK, as Trustee By ................................. Authorized Officer ARTICLE THREE The Securities Section 301. AMOUNT UNLIMITED; ISSUABLE IN SERIES. The aggregate principal amount of Securities which may be authenticated and delivered under this Indenture is unlimited. The Securities may be issued in one or more series. There shall be established in or pursuant to a Board Resolution of the Company or the Guarantor, as the case may be, and, subject to Section 303, set forth, or determined in the manner provided, in an Officers' Certificate, or established in one or more indentures supplemental hereto, prior to the issuance of Securities and the Guarantees to be endorsed thereon of any series, (1) the title of the Securities of the series (which shall distinguish the Securities of the series from Securities of any other series); (2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and delivered under this Indenture (except for Securities authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Securities of the series pursuant to Section 304, 305, 306, 906 or 1107 and except for any Securities which, pursuant to Section 303, are deemed never to have been authenticated and delivered hereunder); (3) the Person to whom any interest on a Security of the series shall be payable, if other than the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest; (4) the date or dates on which the principal of the Securities of the series is payable or the method of determination thereof; -18- (5) the rate or rates at which the Securities of the series shall bear interest, if any, the date or dates from which such interest shall accrue, the Interest Payment Dates on which such interest shall be payable and the Regular Record Date for the interest payable on any Interest Payment Date; (6) the place or places where the principal of (and premium, if any) and interest on Securities of the series shall be payable; (7) the period or periods within which, the price or prices at which, and the terms and conditions upon which, Securities of the series may be redeemed, in whole or in part, at the option of the Company; (8) the obligation, if any, of the Company to redeem or purchase Securities of the series pursuant to any sinking fund or analogous provisions or at the option of a Holder thereof, the condition, if any, giving rise to such obligation and the period or periods within which, the price or prices at which and the terms and conditions upon which, Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such obligation and any provisions for the remarketing of such securities; (9) any provisions necessary to permit or facilitate the issuance, payment or conversion of any Securities of the series that may be converted into securities or other property other than Securities of the same series (including shares of the Company's common or preferred stock or other Securities of the Company) and of like tenor, whether in addition to, or in lieu of, any payment of principal or other amount and whether at the option of the Company or otherwise; (10) if other than denominations of $1,000 and any integral multiple thereof, the denominations in which Securities of the series shall be issuable; (11) the currency or currencies, including composite currencies, in which payment of the principal of and any premium and interest on the Securities of the series shall be payable if other than the currency of the United States of America and, if so, whether the securities of the series may be discharged other than as provided in Article Four; (12) if the principal of or any premium or interest on any Securities of the series is to be payable, at the election of the Company or the Holder thereof, in one or more currencies, composite currencies or currency units other than that or those in which such Securities are stated to be payable, the currency, currencies, composite currency, composite currencies or currency units in which the principal of or any premium or interest on such Securities as to which such election is made shall be payable, the periods within which and the terms and conditions upon which such election is to be made and the amount so payable (or the manner in which such amount shall be determined and the calculation agent, if any, with respect thereto); (13) if the amount of payments of principal of and any premium or interest on the Securities of the series may be determined with reference to an -19- index, a formula or any other method, the manner in which such amounts shall be determined and the calculation agent, if any, with respect thereto; (14) whether the Securities of the series shall be issued in whole or in part in the form of one or more Global Securities and, in such case, the Depository with respect to such Global Security or Securities and the circumstances under which any such Global Security may be exchanged for Securities registered in the name of, and any transfer of such Global Security may be registered in the name of, a Person other than such Depository or its nominee, if other than as set forth in Section 305; (15) if other than the principal amount thereof, the portion of the principal amount of Securities of the series which shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 502; (16) the application, if any, of Section 1402 or 1403 to the Securities of any series; (17) the place or places where, subject to the provisions of Section 1001, the principal of and any premium or interest on Securities of the series shall be payable, any Securities of the series may be surrendered for registration of transfer, Securities of the series may be surrendered for exchange and notices and demands to or upon the Company in respect of the Securities of the series and this Indenture may be served; (18) the right, if any, of the Company or a third party to redeem or purchase Securities of the series and the period or periods within which, the price or prices at which and the terms and conditions upon which Securities of the series shall be redeemed or purchased, in whole or in part, pursuant to such right; (19) any terms applicable to Original Issue Discount, if any, (as that term is defined in the Internal Revenue Code of 1986 and the regulations thereunder) including the rate or rates at which such Original Issue Discount, if any, shall accrue; (20) any addition to or change in the Events of Default which apply to any Securities of the series and any change in the right of the Trustee or the requisite Holders of such Securities to declare the principal amount thereof due and payable pursuant to Section 502; (21) any proposed listing on any national or foreign securities exchange of the Securities of the series; and (22) any other terms of the series (which terms shall not be inconsistent with the provisions of this Indenture). All Securities of any one series shall be substantially identical except as to denomination and except as may otherwise be provided in or pursuant to the Board Resolution -20- referred to above and (subject to Section 303) set forth in the Officers' Certificate or in any such indenture supplemental hereto. If any of the terms of the series are established by action taken pursuant to a Board Resolution, a copy of an appropriate record of such action shall be certified by the Secretary or an Assistant Secretary of the Company and the Guarantor and delivered to the Trustee at or prior to the delivery of the Officers' Certificate setting forth the terms of the series. Such Board Resolution may provide general terms or parameters for securities of such series and may provide that the specific terms of particular securities of such series, and the Persons authorized to determine such terms or parameters, may be determined in accordance with or pursuant to the Company Order for authentication and delivery of such securities. Section 302. DENOMINATIONS. The Securities of each series shall be issuable in registered form without coupons in such denominations as shall be specified as contemplated by Section 301. In the absence of any such provisions with respect to the Securities of any series, the Securities of such series shall be issuable in denominations of $1,000 and any integral multiple thereof. Section 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The Securities shall be executed on behalf of the Company by its Chairman of the Board, its Chief Executive Officer, its President or one of its Vice Presidents. The signature of any of these officers on the Securities may be manual or facsimile. Securities bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities of any series executed by the Company to the Trustee for authentication, together with a Company Order for the authentication and delivery of such Securities, and the Trustee in accordance with the Company Order shall authenticate and deliver such Securities. If the form or terms of the Securities of the series have been established in or pursuant to one or more Board Resolutions as permitted by Sections 201 and 301, in authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, an Opinion of Counsel stating, (a) if the form of such Securities has been established by or pursuant to Board Resolution as permitted by Section 201, that such form has been established in conformity with the provisions of this Indenture; (b) if the terms of such Securities have been established by or pursuant to Board Resolution as permitted by Section 301, that such terms have been established in conformity with the provisions of this Indenture; and (c) that such Securities, when authenticated and delivered by the Trustee and issued by the Company in the manner and subject to any conditions -21- specified in such Opinion of Counsel, will constitute valid and legally binding obligations of the Company, enforceable in accordance with their terms, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting the enforcement of creditors' rights and to general equity principles. If such form or terms have been so established, the Trustee shall not be required to authenticate such Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee. Notwithstanding the provisions of Section 301 and of the preceding paragraph, if all Securities of a series are not to be originally issued at one time, it shall not be necessary to deliver the Officers' Certificate otherwise required pursuant to Section 301 or the Company Order and Opinion of Counsel otherwise required pursuant to such preceding paragraph at or prior to the time of authentication of each Security of such series if such documents are delivered at or prior to the time of authentication upon original issuance of the first Security of such series to be issued. Each Security shall be dated the date of its authentication. Neither any Security nor the Guarantee endorsed thereon, shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for herein executed by the Trustee by manual signature, and such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and delivered hereunder and is entitled to the benefits of this Indenture. Notwithstanding the foregoing, if any Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Security to the Trustee for cancellation as provided in Section 309 together with a written statement (which need not comply with Section 102 and need not be accompanied by an Opinion of Counsel) stating that such Security has never been issued and sold by the Company, for all purposes of this Indenture such Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Indenture. Reference is made to Section 1302 concerning the execution and delivery of the Guarantees. Section 304. TEMPORARY SECURITIES. Pending the preparation of definitive Securities of any series, the Company may execute, and upon Company Order the Trustee shall authenticate and deliver, temporary Securities which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued and having endorsed thereon Guarantees executed by the Guarantor substantially of the tenor of the definitive Guarantees, and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Securities and such Guarantees may determine, as evidenced by their execution of such Securities and such Guarantees. -22- If temporary Securities of any series are issued, the Company will cause definitive Securities of that series to be prepared without unreasonable delay. After the preparation of definitive Securities of such series, the temporary Securities of such series shall be exchangeable for definitive Securities of such series upon surrender of the temporary Securities of such series at the office or agency of the Company in a Place of Payment for that series, without charge to the Holder. Upon surrender for cancellation of any one or more temporary Securities of any series the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a like principal amount of definitive Securities of the same series and of a like tenor of authorized denominations. Until so exchanged the temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series. Section 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. The Company shall cause to be kept at the Corporate Trust Office of the Trustee a register (the register maintained in such office and in any other office or agency of the Company in a Place of Payment being herein sometimes collectively referred to as the "SECURITY REGISTER") in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of Securities and of transfers of Securities. The Trustee is hereby appointed "SECURITY REGISTRAR" for the purpose of registering Securities and transfers of Securities as herein provided. Upon surrender for registration of transfer of any Security of any series at the office or agency in a Place of Payment for that series, the Company shall execute, and the Trustee shall authenticate and deliver, in the name of the designated transferee or transferees, one or more new Securities of the same series, of any authorized denominations and of a like aggregate principal amount and tenor having endorsed thereon a Guarantee or Guarantees executed by the Guarantor. At the option of the Holder, Securities of any series may be exchanged for other Securities of the same series of any authorized denominations and of a like aggregate principal amount and tenor, upon surrender of the Securities to be exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and deliver, the Securities which the Holder making the exchange is entitled to receive having endorsed thereon a Guarantee or Guarantees executed by the Guarantor. All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Securities surrendered upon such registration of transfer or exchange. Every Security presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar duly executed, by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange of Securities, but the Company may require payment of a sum sufficient to cover any tax or other -23- governmental charge that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 304, 906 or 1107 not involving any transfer. The Company shall not be required (i) to issue, register the transfer of or exchange Securities of any series during a period beginning at the opening of business 15 days before the day of the mailing of a notice of redemption of Securities of that series selected for redemption under Section 1104 and ending at the close of business on the day of such mailing, or (ii) to register the transfer of or exchange any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. Notwithstanding the foregoing, no Global Security shall be registered for transfer or exchange, or authenticated or delivered, pursuant to this Section 305 or Sections 304, 306, 906 or 1107 in the name of a Person other than the Depository for such Security or its nominee until (i) the Depository with respect to a Global Security notifies the Company that it is unwilling or unable to continue as Depository for such Global Security or the Depository ceases to be a clearing agency registered under the Exchange Act, (ii) the Company executes and delivers to the Trustee a Company Order that such Global Security shall be so transferable and exchangeable or (iii) there shall have occurred and be continuing an Event of Default with respect to the Securities of such series. Upon the occurrence in respect of any Global Security of any series of any one or more of the conditions specified in clauses (i), (ii) or (iii) of the preceding sentence or such other conditions as may be specified as contemplated by Section 301 for such series, such Global Security may be registered for transfer or exchange for Securities registered in the names of, or authenticated and delivered to, such Persons as the Depository with respect to such series shall direct. Except as provided in the preceding paragraph, any Security authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, any Global Security, whether pursuant to this Section, Section 304, 306, 906 or 1107 or otherwise, shall also be a Global Security and bear the legend specified in Section 205. Section 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If any mutilated Security is surrendered to the Trustee, the Company shall execute and the Trustee shall authenticate and deliver in exchange therefor a new Security of the same series and of like tenor and principal amount having endorsed thereon a Guarantee executed by the Guarantor and bearing a number not contemporaneously outstanding. If there shall be delivered to the Company, the Guarantor and the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company, the Guarantor or the Trustee that such Security has been acquired by a protected purchaser, the Company shall execute and upon its request the Trustee shall authenticate and deliver, in lieu of any such destroyed, lost or stolen Security, a new Security of the same series and of like tenor and principal amount having endorsed thereon a Guarantee executed by the Guarantor and bearing a number not contemporaneously outstanding. -24- In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security. Upon the issuance of any new Security under this Section, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security of any series and the Guarantee endorsed thereon, issued pursuant to this Section in lieu of any destroyed, lost or stolen Security shall constitute an original additional contractual obligation of the Company in the case of the Security and the Guarantor in the case of the Guarantee endorsed therein, whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Securities of that series and the Guarantee endorsed thereon, duly issued hereunder. The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities. Section 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. Unless otherwise provided as contemplated by Section 301 with respect to any series of Securities, interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name that Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest. Any interest on any Security of any series which is payable, but is not punctually paid or duly provided for, on any Interest Payment Date (herein called "DEFAULTED INTEREST") shall forthwith cease to be payable to the Holder on the relevant Regular Record Date by virtue of having been such Holder, and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below: (1) The Company may elect to make payment of any Defaulted Interest to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security of such series and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the benefit of the Persons entitled to such Defaulted Interest as in this Clause provided. Thereupon the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after -25- the receipt by the Trustee of the notice of the proposed payment. The Trustee shall promptly notify the Company of such Special Record Date and, in the name and at the expense of the Company, shall cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder of Securities of such series at his address as it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities of such series (or their respective Predecessor Securities) are registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following Clause (2). (2) The Company may make payment of any Defaulted Interest on the Securities of any series in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Securities may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such manner of payment shall be deemed practicable by the Trustee. Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. Section 308. PERSONS DEEMED OWNERS. Prior to due presentment of a Security for registration of transfer, the Company, the Guarantor, the Trustee and any agent of the Company, the Guarantor or the Trustee may treat the Person in whose name such Security is registered as the owner of such Security for the purpose of receiving payment of principal of (and premium, if any) and (subject to Section 307) interest on such Security and for all other purposes whatsoever, whether or not such Security be overdue, and neither the Company, the Guarantor, the Trustee nor any agent of the Company, the Guarantor or the Trustee shall be affected by notice to the contrary. None of the Company, the Guarantor, the Trustee or any agent of the Company, the Guarantor or the Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a security in global form or for maintaining, supervising or receiving any records relating to such beneficial ownership interests. Section 309. CANCELLATION. All Securities surrendered for payment, redemption, registration of transfer or exchange or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee and shall be promptly cancelled by it. The Company or the Guarantor may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company or the Guarantor may have acquired in any manner whatsoever, and may deliver to the Trustee (or to any other Person for delivery to the Trustee) for cancellation any Securities previously authenticated hereunder which the Company has not issued and sold, and all Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities -26- cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Securities held by the Trustee shall be disposed of in accordance with its normal procedures unless otherwise directed by a Company Order. Section 310. COMPUTATION OF INTEREST. Except as otherwise specified as contemplated by Section 301 for Securities of any series, interest on the Securities of each series shall be computed on the basis of a 360-day year of twelve 30-day months. Section 311. CUSIP NUMBERS. The Company in issuing the Securities may use a "CUSIP", "CINS", or "ISIN" number (if then generally in use), and the Company and the Trustee shall use such "CUSIP" "CINS", or "ISIN" number in notices of redemption or exchange as a convenience to Holders; PROVIDED that any such notice shall state that no representation is made as to the correctness of such "CUSIP" "CINS", or "ISIN" number either as printed on the Securities or as contained in any notice of redemption or exchange and that reliance may be placed only on the other identification numbers printed on the Securities; and PROVIDED further that failure to use "CUSIP" "CINS", or "ISIN" numbers in any notice of redemption or exchange shall not affect the validity or sufficiency of such notice. The Company shall promptly notify the Trustee of any change in "CUSIP" "CINS", or "ISIN" number for the Securities. ARTICLE FOUR Satisfaction and Discharge Section 401. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture shall upon Company Request cease to be of further effect (except as to any surviving rights of registration of transfer or exchange of Securities herein expressly provided for), and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture, when (1) either (A) all Securities theretofore authenticated and delivered (other than (i) Securities which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 306 and (ii) Securities for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 1003) have been delivered to the Trustee for cancellation; or (B) all such Securities not theretofore delivered to the Trustee for cancellation (i) have become due and payable, or -27- (ii) will become due and payable at their Stated Maturity within one year, or (iii) are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for the purpose an amount sufficient to pay and discharge the entire indebtedness on such Securities not theretofore delivered to the Trustee for cancellation, for principal (and premium, if any) and interest to the date of such deposit (in the case of Securities which have become due and payable) or to the Stated Maturity or Redemption Date, as the case may be; (2) the Company or the Guarantor has paid or caused to be paid all other sums payable hereunder by the Company; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture have been complied with. Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the Trustee under Section 607, the obligations of the Company to any Authenticating Agent under Section 614 and, if money shall have been deposited with the Trustee pursuant to subclause (B) of clause (1) of this Section, the obligations of the Trustee under Section 402 and the last paragraph of Section 1003 shall survive. Section 402. APPLICATION OF TRUST MONEY. Subject to provisions of the last paragraph of Section 1003, all money deposited with the Trustee pursuant to Section 401 shall be held in trust and applied by it, in accordance with the provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent (including the Company or the Guarantor acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled thereto, of the principal (and premium, if any) and interest for whose payment such money has been deposited with the Trustee. ARTICLE FIVE Remedies Section 501. EVENTS OF DEFAULT. "EVENT OF DEFAULT", wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any -28- judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body): (1) default in the payment of any interest upon any Security of that series when it becomes due and payable, and continuance of such default for a period of 30 days; or (2) default in the payment of the principal of (or premium, if any, on) any Security of that series at its Maturity; or (3) default in the deposit of any sinking fund payment, when and as due by the terms of a Security of that series; or (4) default in the performance, or breach, of any covenant or warranty of the Company or the Guarantor in this Indenture (other than a covenant or warranty a default in whose performance or whose breach is elsewhere in this Section specifically dealt with or which has expressly been included in this Indenture solely for the benefit of a series of Securities other than that series), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company and the Guarantor by the Trustee or to the Company, the Guarantor and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of that series a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "NOTICE OF DEFAULT" hereunder; or (5) the entry by a court having jurisdiction in the premises of (A) a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or (B) a decree or order adjudging the Company a bankrupt or insolvent, or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under any applicable Federal or State law, or appointing a custodian, receiver, liquidator, assignee, trustee, sequestrator or other similar official of the Company or of any substantial part of its property, or ordering the winding up or liquidation of its affairs, and the continuance of any such decree or order for relief or any such other decree or order unstayed and in effect for a period of 90 consecutive days; or (6) the commencement by the Company of a voluntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or of any other case or proceeding to be adjudicated a bankrupt or insolvent, or the consent by it to the entry of a decree or order for relief in respect of the Company in an involuntary case or proceeding under any applicable Federal or State bankruptcy, insolvency, reorganization or other similar law or to the commencement of any bankruptcy or insolvency case or proceeding against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under any applicable Federal or State law, or the consent by it to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator or similar official of the Company or of any -29- substantial part of its property, or the making by it of an assignment for the benefit of creditors, or the admission by it in writing of its inability to pay its debts generally as they become due, or the taking of corporate action by the Company in furtherance of any such action; or (7) the Guarantee of the Guarantor ceases to be in full force and effect, or the Guarantor shall deny or disaffirm its obligations under the Guarantee; or (8) the Company defaults with respect to indebtedness for money borrowed resulting in acceleration of such indebtedness having an aggregate principal amount in excess of $? million and such acceleration is not rescinded or annulled within 30 days after there has been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the holders of at least 25% in aggregate principal amount of the outstanding Guaranteed Debt Securities of that series, a written notice specifying such acceleration and stating that such Notice is a "Notice of Default" hereunder; or (9) any other Event of Default provided with respect to Securities of that series. Upon receipt by the Trustee of any Notice of Default pursuant to this Section 501 with respect to Securities of a series all or part of which is represented by a Global Security, a record date shall be established for determining Holders of Outstanding Securities of such series entitled to join in such Notice of Default, which record date shall be at the close of business on the day the Trustee receives such Notice of Default. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such Notice of Default, whether or not such Holders remain Holders after such record date; PROVIDED, HOWEVER, that unless Holders of at least 25% in principal amount of the Outstanding Securities of such series, or their proxies, shall have joined in such Notice of Default prior to the date which is the ninetieth day after such record date, such Notice of Default shall automatically and without further action by any Holder be cancelled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, (i) after expiration of such 90-day period, a new Notice of Default identical to a Notice of Default which has been cancelled pursuant to the proviso to the preceding sentence or (ii) during any such 90-day period, an additional Notice of Default with respect to any new or different fact or circumstance permitting the giving of a Notice of Default with respect to Securities of such series, in either of which events a new record date shall be established pursuant to the provisions of this Section 501. Section 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an Event of Default with respect to Securities of any series at the time Outstanding occurs and is continuing, then and in every such case the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of that series may declare the principal amount (or, if any of the Securities of that series are Original Issue Discount Securities, such portion of the principal amount of such Securities as may be specified in the terms thereof) of all of the Securities of that series to be due and payable immediately, by a notice in writing to the Company and the Guarantor (and to the Trustee if given by Holders), and upon any such declaration such principal amount (or specified amount) shall become immediately due and payable. -30- At any time after such a declaration of acceleration with respect to Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in principal amount of the Outstanding Securities of that series, by written notice to the Company, the Guarantor and the Trustee, may rescind and annul such declaration and its consequences if (1) the Company or the Guarantor has paid or deposited with the Trustee a sum sufficient to pay (A) all overdue interest on all Securities of that series, (B) the principal of (and premium, if any, on) any Securities of that series which have become due otherwise than by such declaration of acceleration and interest thereon at the rate or rates prescribed therefor in such Securities, (C) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate or rates prescribed therefor in such Securities, and (D) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel; and (2) all Events of Default with respect to Securities of that series, other than the non-payment of the principal of Securities of that series which have become due solely by such declaration of acceleration, have been cured or waived as provided in Section 513. No such rescission shall affect any subsequent default or impair any right consequent thereon. Upon receipt by the Trustee of written notice declaring such an acceleration, or rescission and annulment thereof, with respect to Securities of a series all or part of which is represented by a Global Security, a record date shall be established for determining Holders of Outstanding Securities of such series entitled to join in such notice, which record date shall be at the close of business on the day the Trustee receives such notice. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether or not such Holders remain Holders after such record date; PROVIDED, HOWEVER, that unless such declaration of acceleration, or rescission and annulment, as the case may be, shall have become effective by virtue of the requisite percentage having joined in such notice prior to the day which is the ninetieth day after such record date, such notice of declaration of acceleration, or rescission and annulment, as the case may be, shall automatically and without further action by any Holder be cancelled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, of Securities of any series from giving, (i) after expiration of such 90-day period, a new written notice of declaration of acceleration, or rescission and annulment thereof, as the case may be, that is identical to a written notice which has been cancelled pursuant to the proviso to the preceding sentence or (ii) during any such 90-day period an additional written notice of declaration of acceleration with respect to any other Event of -31- Default with respect to Securities of such series, or an additional written notice of rescission or annulment of any declaration of acceleration with respect to any other Event of Default with respect to Securities of such series, in either of which events a new record date shall be established pursuant to the provisions of this Section 502. Section 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE. The Company covenants that if (1) default is made in the payment of any interest on any Security when such interest becomes due and payable and such default continues for a period of 30 days, or (2) default is made in the payment of the principal of (or premium, if any, on) any Security at the Maturity thereof, the Company will, upon demand of the Trustee, pay to it, for the benefit of the Holders of such Securities, the whole amount then due and payable on such Securities for principal (and premium, if any) and interest and, to the extent that payment of such interest shall be legally enforceable, interest on any overdue principal (and premium, if any) and on any overdue interest, at the rate or rates prescribed therefor in such Securities, and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. If the Company fails to pay such amounts forthwith upon such demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the sums so due and unpaid, may prosecute such proceeding to judgment or final decree and may enforce the same against the Company, the Guarantor or any other obligor upon such Securities and collect the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company, the Guarantor or any other obligor upon such Securities, wherever situated. If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy. Section 504. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relating to the Company, the Guarantor or any other obligor upon the Securities or the property of the Company, the Guarantor or of such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company or the Guarantor for the payment of overdue principal or interest) shall be entitled and empowered, by intervention in such proceeding or otherwise, -32- (i) to file and prove a claim for the whole amount of principal (and premium, if any) and interest owing and unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial proceeding, and (ii) to collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 607. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Securities or the rights of any Holder thereof or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. Section 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES. All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable benefit of the Holders of the Securities in respect of which such judgment has been recovered. Section 506. APPLICATION OF MONEY COLLECTED. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal (or premium, if any) or interest, upon presentation of the Securities and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee under Section 607, including the reasonable fees and expenses of its counsel; and SECOND: To the payment of the amounts then due and unpaid for principal of (and premium, if any) and interest on the Securities in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the amounts due and payable on such Securities for principal (and premium, if any) and interest, respectively. -33- Section 507. LIMITATION ON SUITS. No Holder of any Security of any series shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of that series; (2) the Holders of not less than 25% in principal amount of the Outstanding Securities of that series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (3) such Holder or Holders have offered to the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; (4) the Trustee for 90 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (5) no direction inconsistent with such written request has been given to the Trustee during such 90-day period by the Holders of a majority in principal amount of the Outstanding Securities of that series; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other of such Holders, or to obtain or to seek to obtain priority or preference over any other of such Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all of such Holders. Section 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND INTEREST. Notwithstanding any other provision in this Indenture, the Holder of any Security shall have the right, which is absolute and unconditional, to receive payment of the principal of (and premium, if any) and (subject to Section 307) interest on such Security on the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on the Redemption Date) and to institute suit for the enforcement of any such payment, and such rights shall not be impaired without the consent of such Holder. Section 509. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case, subject to any determination in such proceeding, the Company, the Trustee and the Holders shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted. -34- Section 510. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities in the last paragraph of Section 306, no right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 511. DELAY OR OMISSION NOT WAIVER. No delay or omission of the Trustee or of any Holder of any Securities to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by the Holders, as the case may be. Section 512. CONTROL BY HOLDERS. The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Securities of such series, PROVIDED that (1) such direction shall not be in conflict with any rule of law or with this Indenture, and (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction. Upon receipt by the Trustee of any written notice directing the time, method or place of conducting any such proceeding or exercising any such trust or power, with respect to Securities of a series all or part of which is represented by a Global Security, a record date shall be established for determining Holders of Outstanding Securities of such series entitled to join in such notice, which record date shall be at the close of business on the day the Trustee receives such notice. The Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to join in such notice, whether or not such Holders remain Holders after such record date; PROVIDED, HOWEVER, that unless the Holders of a majority in principal amount of the Outstanding Securities of such series shall have joined in such notice prior to the day which is the ninetieth day after such record date, such notice shall automatically and without further action by any Holder be cancelled and of no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from giving, (i) after expiration of such 90-day period, a new notice identical to a notice which has been cancelled pursuant to the proviso to the preceding sentence or (ii) during any such 90-day period, a new direction contrary to or different from such direction, in either of which events a new record date shall be established pursuant to the provisions of this Section 512. -35- Section 513. WAIVER OF PAST DEFAULTS. Subject to Section 502, the Holders of a majority in principal amount of the Outstanding Securities of any series may, by notice to the Trustee, waive an existing or past default with respect to the Securities of such series and its consequences, except a default (1) in the payment of principal of (or premium, if any) or interest on any Security of such series, or in the deposit of any sinking fund payment when and as due, (2) in respect of a covenant or provision hereof which under Article Nine cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected, or (3) in respect of an existing or past default described in clause (4), (5) or (6) of Section 501, which may be waived by the Holders of a majority in principal amount of all Outstanding Securities voting together as a single class. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to waive any past default hereunder. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to waive any default hereunder, whether or not such Holders remain Holders after such record date; PROVIDED, HOWEVER, that unless such majority in principal amount shall have waived such default prior to the date which is the ninetieth day after such record date, any such waiver previously given shall automatically and without further action by any Holder be cancelled and of no further effect. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. Section 514. UNDERTAKING FOR COSTS. All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of the Outstanding Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest on any Security on or after the Stated Maturity or Maturities expressed in such Security (or, in the case of redemption, on or after the Redemption Date). -36- Section 515. WAIVER OF STAY OR EXTENSION LAWS. The Company and the Guarantor covenant (to the extent that they may lawfully do so) that they will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and the Company and the Guarantor (to the extent that it may lawfully do so) hereby expressly waive all benefit or advantage of any such law and covenants that they will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. ARTICLE SIX The Trustee Section 601. CERTAIN DUTIES AND RESPONSIBILITIES. The duties and responsibilities of the Trustee shall be as provided by the Trust Indenture Act. Notwithstanding the foregoing, no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Whether or not therein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. Section 602. NOTICE OF DEFAULTS. If a default occurs hereunder with respect to Securities of any series, the Trustee shall give the Holders of Securities of such series notice of such default as and to the extent provided in the Trust Indenture Act, PROVIDED, HOWEVER, that in the case of any default of the character specified in Section 501(4) with respect to Securities of such series, no such notice to Holders shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term "DEFAULT" means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series. Section 603. CERTAIN RIGHTS OF TRUSTEE. Subject to the provisions of Section 601: (a) the Trustee may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Company or the Guarantor mentioned herein shall be sufficiently evidenced by a Company Request or -37- Company Order or a Guarantor Request or Guarantor Order, as the case may be, or as otherwise expressly provided herein and any resolution of the Board of Directors of the Company or the Guarantor may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate; (d) the Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine the books, records and premises of the Company or the Guarantor, or both, personally or by agent or attorney; (g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder; (h) the Trustee shall not be liable for any action taken, suffered, or omitted to be taken by it in good faith and reasonably believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture; (i) the Trustee shall not be charged with knowledge of any default or Event of Default with respect to the Securities unless either (1) a Responsible Officer shall have actual knowledge of such default or Event of Default or (2) written notice of such default or Event of Default shall have been given to the Trustee by the Company or by any Holder of the Securities; and -38- (j) the permissive rights of the Trustee enumerated herein shall not be construed as duties. Section 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The recitals contained herein and in the Securities, except the Trustee's certificates of authentication, shall be taken as the statements of the Company or the Guarantor, as the case may be, and the Trustee or any Authenticating Agent assumes no responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the Securities or the Guarantees. The Trustee or any Authenticating Agent shall not be accountable for the use or application by the Company of Securities or the proceeds thereof. Section 605. MAY HOLD SECURITIES. The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other agent of the Company or the Guarantor, in its individual or any other capacity, may become the owner or pledgee of Securities and, subject to Sections 608 and 613, may otherwise deal with the Company and the Guarantor with the same rights it would have if it were not Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other agent. Section 606. MONEY HELD IN TRUST. Money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed with the Company or the Guarantor, as the case may be. Section 607. COMPENSATION AND REIMBURSEMENT. The Company and the Guarantor, joint and severally, agree (1) to pay to the Trustee from time to time reasonable compensation for all services rendered by it hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its negligence or bad faith; and (3) to indemnify the Trustee for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance or administration of the trust or trusts hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. -39- When the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 501(5) and 501(6), the expenses (including the reasonable charges and expenses of its counsel) and the compensation for the services are intended to constitute expenses of administration under any applicable Federal or State bankruptcy, insolvency, reorganization, or other similar law. To secure the Company's and Guarantor's payment obligations in this Section 607, the Trustee shall have a lien prior to the Securities on all money or property held or collected by the Trustee, in its capacity as Trustee, except money or property held in trust to pay principal of, premium, if any, and interest on particular Securities. The provisions of this Section 607 shall survive the resignation or removal of the Trustee and the termination of this Indenture. Section 608. DISQUALIFICATION; CONFLICTING INTERESTS. The Trustee for the Securities of any series issued hereunder shall be subject to the provisions of Section 310(b) of the Trust Indenture Act during the period of time provided for therein. In determining whether the Trustee has a conflicting interest as defined in Section 310(b) of the Trust Indenture Act with respect to the Securities of any series, there shall be excluded this Indenture with respect to Securities of more than one series. Section 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at all times be one (and only one) trustee hereunder with respect to the Securities of each series, which may be the Trustee hereunder for Securities of one or more other Securities, which shall be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws (including the Trust Indenture Act) to exercise corporate trust powers, having a combined capital and surplus of at least $50,000,000. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, and the extent permitted by the Trust Indenture Act, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. Section 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. (a) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee in accordance with the applicable requirements of Section 611. (b) The Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company and the Guarantor. If the instrument of acceptance by a successor Trustee required by Section 611 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. -40- (c) The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and to the Company. (d) If at any time: (1) the Trustee shall fail to comply with 0 and shall fail to resign after written request therefor by the Company, by the Guarantor or by any Holder who has been a bona fide Holder of a Security for at least six months, or (2) the Trustee shall cease to be eligible under Section 609 and shall fail to resign after written request thereof by the Company, the Guarantor or by any such Holder, or (3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company by a Board Resolution may remove the Trustee with respect to all securities, or (ii) subject to Section 514, any Holder who has been a bona fide Holder of a Security for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities and the appointment of a successor Trustee or Trustees. (e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of that or those series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the applicable requirements of Section 611. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any Series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 611, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any Series shall have been so appointed by the Company or the Holders and accepted appointment in the manner required by Section 611, any Holder who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. (f) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series to all Holders of Securities of such series in the manner provided in Section 106. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office. -41- Section 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (a) In case of the appointment hereunder of a successor Trustee with respect to all Securities, every such successor Trustee so appointed shall execute, acknowledge and deliver to the Company, to the Guarantor and to the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee; but, on the request of the Company, the Guarantor or the successor Trustee, such retiring Trustee shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder. (b) In case of the appointment hereunder of a successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the Guarantor, the retiring Trustee and each successor Trustee with respect to the Securities of one or more series shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (1) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, each successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (2) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (3) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co- trustees of the same trust and that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee; and upon the execution and delivery of such supplemental indenture the resignation or removal of the retiring Trustee shall become effective to the extent provided therein and each such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company, the Guarantor or any successor Trustee, such retiring Trustee shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates. (c) Upon request of any such successor Trustee, the Company and the Guarantor shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (a) and (b) of this Section, as the case may be. (d) No successor Trustee shall accept its appointment unless at the time of such acceptance such successor Trustee shall be qualified and eligible under this Article. -42- Section 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation succeeding to all or substantially all the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, provided such corporation shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated, but not delivered, by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. Section 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY OR GUARANTOR. The Trustee shall comply with Section 311(a) of the Trust Indenture Act with respect to each series of Securities for which it is Trustee. Section 614. APPOINTMENT OF AUTHENTICATING AGENT. At any time when any of the Securities remain Outstanding the Trustee may appoint an Authenticating Agent or Agents with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of such series issued upon exchange, registration of transfer or partial redemption thereof or pursuant to Section 306, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent shall be acceptable to the Company and shall at all times be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to act as Authenticating Agent, having a combined capital and surplus of not less than $50,000,000 and subject to supervision or examination by Federal or State authority. If such Authenticating Agent publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such Authenticating Agent shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, such Authenticating Agent shall resign immediately in the manner and with the effect specified in this Section. Any corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any corporation succeeding to the corporate agency or corporate trust business of an Authenticating Agent, shall continue to be an Authenticating Agent, provided such corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. -43- An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and to the Company and the Guarantor. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and to the Trustee. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall give notice of such appointment, to all Holders of Securities of the series with respect to which such Authenticating Agent will serve in the manner provided in Section 106. Any successor Authenticating Agent upon acceptance of its appointment hereunder shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. The Company agrees to pay to each Authenticating Agent from time to time reasonable compensation for its services under this Section. If an appointment with respect to one or more series is made pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to the Trustee's certificate of authentication, an alternate certificate of authentication in the following form: This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. JPMORGAN CHASE BANK, as Trustee By_______________________ As Authenticating Agent By_______________________ Authorized Officer ARTICLE SEVEN Holders' Lists and Reports by Trustee, Company and Guarantor Section 701. COMPANY AND GUARANTOR TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS. The Company and the Guarantor will furnish or cause to be furnished to the Trustee (a) semi-annually, not later than June 30 and December 31 in each year, a list, in such form as the Trustee may reasonably require, of the names and addresses of the Holders as of the preceding June 15 or December 15, as the case may be, and -44- (b) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company or the Guarantor of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished; EXCLUDING from any such list names and addresses received by the Trustee in its capacity as Security Registrar; provided that the Company and Guarantor shall not be obligated to provide such a list of Holders at any time that such list would not differ from the last such list provided by the Company and the Guarantor to the Trustee under this Section 701. Section 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS. (a) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 701 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 701 upon receipt of a new list so furnished. (b) If three or more Holders (herein referred to as "APPLICANTS") apply in writing to the Trustee, and furnish the Trustee reasonable proof that each such applicant has owned a Security for a period of at least six months preceding the date of such application, and such application states that the applicants desire to communicate with the other Holders with respect to their rights under this Indenture or under the Securities and is accompanied by a copy of the form of proxy or other communication which such applicants propose to transmit, then the Trustee shall, within five business days after the receipt of such application, at its election, either (i) afford such applicants access to the information preserved at the time by the Trustee in accordance with Section 702(a), or (ii) inform such applicants as to the approximate number of Holders whose names and addresses appear in the information preserved at the time by the Trustee in accordance with Section 702(a), and as to the approximate cost of mailing to such Holders the form of proxy or other communication, if any, specified in such application. If the Trustee shall elect not to afford such applicants access to such information, the Trustee shall, upon the written request of such applicants, mail to each Holder whose name and address appear in the information preserved at the time by the Trustee in accordance with Section 702(a) a copy of the form of proxy or other communication which is specified in such request, with reasonable promptness after a tender to the Trustee of the material to be mailed and of payment, or provision for the payment, of the reasonable expenses of mailing, unless within five days after such tender the Trustee shall mail to such applicants and file with the Commission, together with a copy of the material to be mailed, a written statement to the effect that, in the opinion of the Trustee, such mailing would be contrary to the best interest of the Holders or would be in violation of applicable law. Such written statement shall specify the basis of such opinion. If the Commission, after opportunity for a hearing upon the objections specified in the written statement so filed, shall enter an order refusing to sustain any of such objections or if, after the entry of an order sustaining one or more of such objections, the Commission shall find, after notice and opportunity for hearing, that all the objections so sustained have been met and shall enter an order so declaring, the Trustee shall mail copies of such material to all such -45- Holders with reasonable promptness after the entry of such order and the renewal of such tender; otherwise the Trustee shall be relieved of any obligation or duty to such applicants respecting their application. (c) Every Holder of Securities, by receiving and holding the same, agrees with the Company, the Guarantor and the Trustee that neither the Company, the Guarantor nor the Trustee nor any agent of either of them shall be held accountable by reason of the disclosure of any such information as to the names and addresses of the Holders in accordance with Section 702(b) regardless of the source from which such information was derived, and that the Trustee shall not be held accountable by reason of mailing any material pursuant to a request made under Section 702(b). Section 703. REPORTS BY TRUSTEE. (a) Within 60 days of each May 15, the Trustee shall transmit to Holders such reports concerning the Trustee and its actions under this Indenture as may be required pursuant to the Trust Indenture Act in the manner provided pursuant thereto. (b) A copy of each such report shall, at the time of such transmission to Holders, be filed by the Trustee with each stock exchange upon which the Securities are listed, with the Commission and with the Company. The Company will notify the Trustee when the Securities are listed on any stock exchange. Section 704. REPORTS BY THE COMPANY. The Company shall: (1) file with the Trustee, within 15 days after the Company is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company is not required to file information, documents or reports pursuant to either of said Sections, then it shall file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Exchange Act in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations; (2) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and (3) transmit by mail to all Holders, as their names and addresses appear in the Security Register, within 30 days after the filing thereof with the Trustee, such summaries of any information, documents and reports required to -46- be filed by the Company pursuant to paragraphs (1) and (2) of this Section as may be required by rules and regulations prescribed from time to time by the Commission. ARTICLE EIGHT Consolidation, Merger, Conveyance, Transfer or Lease Section 801. COMPANY OR GUARANTOR MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS. Neither the Company nor the Guarantor shall consolidate with or merge into any other Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, and neither the Company nor the Guarantor shall permit any Person to consolidate with or merge into the Company or the Guarantor, as the case may be, or convey, transfer or lease its properties and assets substantially as an entirety to the Company or the Guarantor, as the case may be, unless: (1) in case the Company or Guarantor shall consolidate with or merge into another Person or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the Person formed by such consolidation or into which the Company or Guarantor, as the case may be, is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company or Guarantor, as the case may be, substantially as an entirety shall be a corporation, partnership or trust organized and existing under the laws of the United States of America, any State thereof or the District of Columbia or, in the case of the Guarantor, Bermuda, and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the principal of (and premium, if any) and interest on all the Securities and the performance of every covenant of this Indenture on the part of the Company or Guarantor, as the case may be, to be performed or observed; (2) immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company or Guarantor or a Subsidiary as a result of such transaction as having been incurred by the Company or Guarantor or such Subsidiary at the time of such transaction, no Event of Default, and no event which, after notice or lapse of time or both, would become an Event of Default, shall have happened and be continuing; (3) if, as a result of any such consolidation or merger or such conveyance, transfer or lease, properties or assets of the Company or Guarantor , as the case may be, would become subject to a mortgage, pledge, lien, security interest or other encumbrance which would not be permitted by this Indenture, the Company or Guarantor or such successor corporation or Person, as the case may be, shall take such steps as shall be necessary effectively to secure the Securities equally and ratably with (or prior to) all indebtedness secured thereby; and (4) the Company or Guarantor, as the case may be, has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that -47- such consolidation, merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. Section 802. SUCCESSOR PERSON SUBSTITUTED. Upon any consolidation by the Company or the Guarantor, as the case may be, with or merger by the Company or the Guarantor, as the case may be, into any other Person or any conveyance, transfer or lease of the properties and assets of the Company or Guarantor, as the case may be, substantially as an entirety in accordance with Section 801, the successor Person formed by such consolidation or into which the Company or the Guarantor, as the case may be, is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of the Company or Guarantor, as the case may be, under this Indenture with the same effect as if such successor Person had been named as the Company or the Guarantor, as the case may be, herein, and thereafter, except in the case of a lease, the predecessor Person shall be relieved of all obligations and covenants under this Indenture and the Securities. ARTICLE NINE Supplemental Indentures Section 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. Without the consent of any Holders, the Company and the Guarantor, when authorized by Board Resolutions, and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, in form satisfactory to the Trustee, for any of the following purposes: (1) to evidence the succession of another Person to the Company or the Guarantor and the assumption by any such successor of the covenants of the Company or the Guarantor herein and in the Securities or the Guarantees; or (2) to add to the covenants of the Company or the Guarantor for the benefit of the Holders of all or any series of Securities (and if such covenants are to be for the benefit of less than all series of Securities, stating that such covenants are expressly being included solely for the benefit of such series) or to surrender any right or power herein conferred upon the Company or the Guarantor; or (3) to add any additional Events of Default; or (4) to add to or change any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the issuance of Securities in bearer form, registerable or not registerable as to principal, and with or without interest coupons, or to permit or facility the issuance of Securities in uncertificated form; or -48- (5) to change or eliminate any of the provisions of this Indenture, provided that any such change or elimination shall become effective only when there is no Security Outstanding of any series created prior to the execution of such supplemental indenture which is entitled to the benefit of such provision; or (6) to secure the Securities pursuant to the requirements of Section 1005 or otherwise; or (7) to establish the form or terms of Securities of any series as permitted by Sections 201 and 301; or (8) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 611(b); or (9) to add to or change any of the provisions of this Indenture with respect to any Securities that by their terms may be converted into securities or other property other than Securities of the same series and of like tenor, in order to permit or facilitate the issuance, payment or conversion of such Securities; or (10) to qualify or maintain qualification of this Indenture under the Trust Indenture Act; or (11) to cure any ambiguity, to correct or supplement any provision herein which may be inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture, PROVIDED such action shall not adversely affect the interests of the Holders of Securities of any series in any material respect. Section 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. With the consent of the Holders of a majority in principal amount of the Outstanding Securities affected by such supplemental indenture voting together as a single class, by Act of said Holders delivered to the Company, the Guarantor and the Trustee, the Company and the Guarantor, when authorized by Board Resolutions, and the Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture; PROVIDED, HOWEVER, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Security affected thereby, (1) change the Stated Maturity of the principal of, or any installment of principal of or interest on, any Security, or reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption thereof, or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 502, or change any Place of Payment where, or the coin or currency in which, any Security or any -49- premium or the interest thereon is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date), or (2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or (3) modify any of the provisions of this Section, Section 513 or Section 1007, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby, PROVIDED, HOWEVER, that this clause shall not be deemed to require the consent of any Holder with respect to changes in the references to "the Trustee" and concomitant changes in this Section and Section 1007, or the deletion of this proviso, in accordance with the requirements of Sections 611(b) and 901(8); or (4) change in any manner adverse to the interests of the Holders of any Outstanding Securities the terms and conditions of the obligations of the Guarantor in respect of the due and punctual payment of the principal thereof (and premium, if any) and interest, if any, thereon or any sinking fund payments provided in respect thereof. A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which has expressly been included solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to consent to any indenture supplemental hereto. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to consent to such supplemental indenture, whether or not such Holders remain Holders after such record date; PROVIDED, HOWEVER, that unless such consent shall have become effective by virtue of the requisite percentage having been obtained prior to the date which is the ninetieth day after such record date, any such consent previously given shall, automatically and without further action by any Holder, be cancelled and of no further effect. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. Section 903. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trusts created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 601) shall be fully protected in relying upon, in addition to the documents required by Section 102, an Opinion of -50- Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Section 904. EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby. Section 905. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the Trust Indenture Act as then in effect. Section 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES. Securities authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture may be prepared and executed by the Company, the Guarantees endorsed thereon may be executed by the Guarantor and such Securities may be authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series. ARTICLE TEN Covenants Section 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. The Company covenants and agrees for the benefit of each series of Securities that it will duly and punctually pay the principal of (and premium, if any) and interest on the Securities of that series in accordance with the terms of the Securities and this Indenture. Section 1002. MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain in each Place of Payment for any series of Securities an office or agency where Securities of that series may be presented or surrendered for payment, where Securities of that series may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Company in respect of the Securities of that series and this Indenture may be served. The Company will give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, and the Company hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. -51- The Company may also from time to time designate one or more other offices or agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; PROVIDED, HOWEVER, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in each Place of Payment for Securities of any series for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. Section 1003. MONEY FOR SECURITIES PAYMENTS TO BE HELD IN TRUST. If the Company or the Guarantor shall at any time act as its own Paying Agent with respect to any series of Securities, it will, on or before each due date of the principal of (and premium, if any) or interest on any of the Securities of that series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum sufficient to pay the principal (and premium, if any) or interest so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided and will promptly notify the Trustee of its action or failure so to act. Whenever the Company and the Guarantor shall have one or more Paying Agents for any series of Securities, it will, on or before each due date of the principal of (and premium, if any) or interest on any Securities of that series, deposit with a Paying Agent a sum sufficient to pay the principal (and premium, if any) or interest so becoming due, such sum to be held in trust for the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act. The Company will cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent will: (1) hold all sums held by it for the payment of the principal of (and premium, if any) or interest on Securities of that series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided; (2) give the Trustee notice of any default by the Company (or any other obligor upon the Securities of that series) in the making of any payment of principal (and premium, if any) or interest on the Securities of that series; and (3) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money. -52- Any money deposited with the Trustee or any Paying Agent, or then held by the Company or the Guarantor, in trust for the payment of the principal of (and premium, if any) or interest on any Security of any series and remaining unclaimed for one year after such principal (and premium, if any) or interest has become due and payable shall be paid to the Company or the Guarantor, as the case may be, on Company Request or Guarantor Request, as the case may be, or (if then held by the Company or the Guarantor) shall be discharged from such trust; and the Holder of such Security shall thereafter, as an unsecured general creditor, look only to the Company (or to the Guarantor pursuant to its Guarantee) for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company or the Guarantor as trustee thereof, shall thereupon cease. Section 1004. CORPORATE EXISTENCE. Subject to Article Eight, each of the Company and the Guarantor will do or cause to be done all things necessary to preserve and keep in full force and effect its corporate existence and all licenses and permits material to the normal conduct of its business; PROVIDED, HOWEVER, that neither the Company nor the Guarantor shall not be required to preserve any such right or franchise if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and the Guarantor, as the case may be, and that the loss thereof is not disadvantageous in any material respect to the Holders. Section 1005. LIMITATION ON LIENS. The Company will not, and will not permit any Designated Subsidiary to, directly or indirectly, create, issue, assume, incur or guarantee any indebtedness for money borrowed which is secured by a mortgage, pledge, lien, security interest or other encumbrance of any nature on any of the Voting Stock of a Designated Subsidiary unless the Outstanding Securities (together with such other indebtedness of the Company or such Designated Subsidiary then existing or thereafter created which is not subordinate to the Outstanding Securities as the Company may elect) shall be secured equally and ratably with (or prior to) such secured indebtedness for money borrowed so long as such secured indebtedness for money borrowed shall be so secured. This Section shall not prevent the sale or other disposition of a Designated Subsidiary. For purposes of this Section, "Voting Stock" means all classes of stock (including any and all shares, interests, participations or other equivalents (however designated) of corporate stock) then outstanding of a Designated Subsidiary normally entitled to vote in elections of directors. For purposes of this Section, "DESIGNATED SUBSIDIARY" means Platinum Underwriters Reinsurance Inc. and any other Subsidiary the assets of which, determined as of the last day of the most recent calendar quarter ended at least 30 days prior to the date of such determination and in accordance with generally accepted accounting principles as in effect on the last day of such calendar quarter, exceed 20% of the Consolidated Assets of the Company. For purposes of this Section, "CONSOLIDATED ASSETS OF THE COMPANY" means the assets of the Company and its consolidated subsidiaries, to be determined as of the last day of the most recent calendar quarter ended at least 30 days prior to the date of such determination and in accordance with generally accepted accounting principles as in effect on the last day of such calendar quarter. -53- Section 1006. STATEMENT BY OFFICERS AS TO DEFAULT. Each of the Company and the Guarantor will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company and the Guarantor, as the case may be, ending after the date hereof, an Officers' Certificate, stating whether or not to the best knowledge of the signers thereof the Company or the Guarantor, as the case may be, is in default in the performance and observance of any of the terms, provisions and conditions of Sections 1001 to 1006, inclusive, and if the Company or the Guarantor, as the case may be, shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. Section 1007. WAIVER OF CERTAIN COVENANTS. The Company and the Guarantor may omit in any particular instance to comply with any term, provision or condition set forth in Sections 1002 to 1005, inclusive, if before the time for such compliance the Holders of a majority in principal amount of the Outstanding Securities shall, by Act of such Holders, waive compliance in such instance with such term, provision or condition. In the event that there shall be included in this Indenture any covenant, other than a covenant to pay principal, premium (if any) and interest, solely for the benefit of one or more, but less than all, series of Securities, then, unless otherwise expressly provided with respect to such covenant, the Company and the Guarantor may similarly omit in any particular instance to comply with any term, provision or condition of such covenant if before the time of such compliance the holders of a majority in principal amount of all Outstanding Securities entitled to the benefit of such covenant, by Act of such Holders, acting together as a single class, waive compliance in such instance with such term, provision or condition. No such waiver contemplated by this Section 1007 shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the Guarantor and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to waive any such term, provision or condition. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to waive any such term, provision or condition hereunder, whether or not such Holders remain Holders after such record date; PROVIDED, HOWEVER, that unless the Holders of at least a majority in principal amount of (i) the Outstanding Securities or (ii) the Outstanding Securities of such series, as the case may be, shall have waived such term, provision or condition prior to the date which is 90 days after such record date, any such waiver previously given shall automatically and without further action by any Holder be cancelled and of no further effect. ARTICLE ELEVEN Redemption of Securities Section 1101. APPLICABILITY OF ARTICLE. Securities of any series which are redeemable before their Stated Maturity shall be redeemable in accordance with their terms and (except as otherwise specified as contemplated by Section 301 for Securities of any series) in accordance with this Article. -54- Section 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of the Company to redeem any Securities shall be evidenced by a Board Resolution. In case of any redemption at the election of the Company of less than all the Securities of any series, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities of such series to be redeemed. In the case of any redemption of Securities prior to the expiration of any restriction on such redemption provided in the terms of such Securities or elsewhere in this Indenture, the Company shall furnish the Trustee with an Officers' Certificate evidencing compliance with such restriction. Section 1103. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.. If less than all the Securities of any series are to be redeemed, the particular Securities to be redeemed shall be selected not less than 60 days prior to the Redemption Date by the Trustee, from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions (equal to the minimum authorized denomination for Securities of that series or any integral multiple thereof) of the principal amount of Securities of such series of a denomination larger than the minimum authorized denomination for Securities of that series. The Trustee shall promptly notify the Company in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal amount of such Securities which has been or is to be redeemed. Section 1104. NOTICE OF REDEMPTION. Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address appearing in the Security Register. All notices of redemption shall state: (1) the Redemption Date, (2) the Redemption Price, (3) if less than all the outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption, the principal amounts) of the particular Securities to be redeemed, -55- (4) that on the Redemption Date the Redemption Price will become due and payable upon each such Security to be redeemed and, if applicable, that interest thereon will cease to accrue on and after said date, (5) the place or places where such Securities are to be surrendered for payment of the Redemption Price, and (6) that the redemption is for a sinking fund, if such is the case. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company. Section 1105. DEPOSIT OF REDEMPTION PRICE. On or prior to any 10:00 a.m., New York City time, on Redemption Date, the Company or the Guarantor shall deposit with the Trustee or with a Paying Agent (or, if the Company or the Guarantor is acting as its own Paying Agent, segregate and hold in trust as provided in Section 1003) an amount of money sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities which are to be redeemed on that date. Section 1106. SECURITIES PAYABLE ON REDEMPTION DATE. Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company and the Guarantor shall default in the payment of the Redemption Price and accrued interest) such Securities shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice, such Security shall be paid by the Company or the Guarantor at the Redemption Price, together with accrued interest to the Redemption Date; PROVIDED, HOWEVER, that installments of interest whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the relevant Record Dates according to their terms and the provisions of Section 307. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal (and premium, if any) shall, until paid, bear interest from the Redemption Date at the rate prescribed therefor in the Security. Section 1107. SECURITIES REDEEMED IN PART. Any Security which is to be redeemed only in part shall be surrendered at a Place of Payment therefor (with, if the Company, the Guarantor or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company, the Guarantor and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Security or Securities of the same series and of like tenor, of any authorized denomination as requested by such Holder, in aggregate principal amount equal to and in exchange for the unredeemed portion of the principal of the -56- Security so surrendered having endorsed thereon a Guarantee or Guarantees executed by the Guarantor. ARTICLE TWELVE Sinking Funds Section 1201. APPLICABILITY OF ARTICLE. The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of a series except as otherwise specified as contemplated by Section 301 for Securities of such series. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of Securities of any series is herein referred to as an "optional sinking fund payment". If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 1202. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series. Section 1202. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES. The Company or the Guarantor (1) may deliver Outstanding Securities of a series (other than any previously called for redemption) and (2) may apply as a credit Securities of a series which have been redeemed either at the election of the Company pursuant to the terms of such Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, in each case in satisfaction of all or any part of any sinking fund payment with respect to the Securities of such series required to be made pursuant to the terms of such Securities as provided for by the terms of such series; PROVIDED that such Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. Section 1203. REDEMPTION OF SECURITIES FOR SINKING FUND. Not less than 90 days prior to each sinking fund payment date for any series of Securities, the Company will deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting Securities of that series pursuant to Section 1202 and will also deliver to the Trustee any Securities to be so delivered. Not less than 60 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 1103 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 1104. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 1106 and 1107. -57- ARTICLE THIRTEEN Guarantees Section 1301. GUARANTEE. The Guarantor hereby unconditionally guarantees to each Holder of a Security authenticated and delivered by the Trustee, and to the Trustee on behalf of each such Holder, the due and punctual payment of the principal of (and premium, if any) and interest, if any, on each such Security and the due and punctual payment of any sinking fund payments provided for pursuant to the terms of such Security when and as the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, call for redemption or otherwise, in accordance with the terms of such Security and of this Indenture. In case of the failure of the Company punctually to make any such payment of principal (or premium, if any) or interest, if any, or sinking fund payment, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Company. The Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of such Security or this Indenture, the absence of any action to enforce the same, any waiver or consent by the Holder of such Security or by the Trustee with respect to any provisions thereof or of this Indenture, the obtaining of any judgment against the Company or any action to enforce the same or any other circumstances which might otherwise constitute a legal or equitable discharge or defense of a guarantor. The Guarantor hereby waives the benefits of division and discussion, diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect of such Security or the indebtedness evidenced thereby or with respect to any sinking fund payment required pursuant to the terms of such Security and all demands whatsoever, and covenants that this Guarantee will not be discharged except by complete performance of the obligations contained in the Securities and in the Guarantees. If the Trustee or the Holder of any Security is required by any court or otherwise to return to the Company or the Guarantor, or any custodian, receiver, liquidator, trustee, sequestrator or other similar official acting in relation to the Company or the Guarantor, any amount paid to the Trustee or such Holder in respect of a Security, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. The Guarantor further agrees, to the fullest extent that it lawfully may do so, that, as between the Guarantor, on the one hand, and the Holders and the Trustee, on the other hand, the maturity of the obligations guaranteed hereby may be accelerated as provided in Article Five hereof for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition extant under any applicable bankruptcy law preventing such acceleration in respect of the obligations guaranteed hereby. The Guarantor shall be subrogated to all rights of the Holders of the Securities of a particular series against the Company in respect of any amounts paid by the Guarantor on account of the Securities of such Series pursuant to the provisions of the Guarantees of this Indenture; PROVIDED, HOWEVER, that the Guarantor shall not be entitled to enforce or to receive any payments arising out of, or based upon, such right of subrogation until the principal of (and premium, if any) and interest, if any, on all Securities of such series issued hereunder shall have been paid in full. -58- Section 1302. EXECUTION AND DELIVERY OF GUARANTEES. To evidence its guarantee provided in Section 1301, the Guarantor hereby agrees to execute the Guarantees, in a form established pursuant to Section 201, to be endorsed on each Security authenticated and delivered by the Trustee. Each such Guarantee shall be executed on behalf of the Guarantor by its Chairman of the Board, Chief Executive Officer, President or one of its Vice Presidents or its Treasurer under a facsimile of its corporate seal reproduced thereon and attested by its Secretary or one of its Deputy Secretaries. The signature of any of these officers on the Guarantees may be manual or facsimile. Guarantees bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Guarantor shall bind the Guarantor, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of the Securities upon which such Guarantees are endorsed or did not hold such offices at the date of such Securities. The delivery of any Security by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Guarantee endorsed thereon on behalf of the Guarantor. The Guarantor hereby agrees that its Guarantee set forth in Section 1301 shall remain in full force and effect notwithstanding any failure to endorse on each Security a notation of such Guarantee. ARTICLE FOURTEEN Defeasance and Covenant Defeasance Section 1401. APPLICABILITY OF ARTICLE; COMPANY'S OPTION TO EFFECT DEFEASANCE OR COVENANT DEFEASANCE. If pursuant to Section 301 provision is made for either or both of (a) defeasance of the Securities of a series under Section 1402 or (b) covenant defeasance of the Securities of a series under Section 1303, then the provisions of such Section or Sections, as the case may be, together with the other provisions of this Article Fourteen, shall be applicable to the Securities of such series, and the Company may at its option by Board Resolution, at any time, with respect to the Securities of such series, elect to have either Section 1402 (if applicable) or Section 1403 (if applicable) be applied to the Outstanding Securities of such series upon compliance with the conditions set forth below in this Article Fourteen. Section 1402. DEFEASANCE AND DISCHARGE. Upon the Company's exercise of the above option applicable to this Section, the Company shall be deemed to have been discharged from its obligations with respect to the Outstanding Securities of such series on and after the date the conditions precedent set forth below are satisfied (hereinafter, "DEFEASANCE"). For this purpose, such defeasance means that the Company shall be deemed to have paid and discharged the entire indebtedness represented by the Outstanding Securities of such series and to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder: (A) the rights of Holders of Outstanding Securities of such series to receive, solely from the trust fund -59- described in Section 1404 as more fully set forth in such Section, payments of the principal of (and premium, if any) and interest on such Securities when such payments are due, (B) the Company's obligations with respect to such Securities under Sections 304, 305, 306, 1002 and 1003 and such obligations as shall be ancillary thereto, (C) the rights, powers, trusts, duties, immunities and other provisions in respect of the Trustee hereunder and (D) this Article Fourteen. Subject to compliance with this Article Fourteen, the Company may exercise its option under this Section 1402 notwithstanding the prior exercise of its option under Section 1403 with respect to the Securities of such series. Following a defeasance, payment of the Securities of such series may not be accelerated because of an Event of Default. Section 1403. COVENANT DEFEASANCE. Upon the Company's exercise of the above option applicable to this Section, the Company shall be released from its obligations under (i) Section 1005, (ii) the occurrence of an event specified in Section 501(4) (with respect to Section 1005) shall not be deemed an Event of Default and (iii) any other section, clause or provision applicable to such Securities that are determined pursuant to Section 301 to be subject to this provision with respect to the Outstanding Securities of such series on and after the date the conditions precedent set forth below are satisfied (hereinafter, "COVENANT DEFEASANCE"). For this purpose, such covenant defeasance means that, with respect to the Outstanding Securities of such series, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such Section or Clause whether directly or indirectly by reason of any reference elsewhere herein to any such Section or Clause or by reason of any reference in any such Section or Clause to any other provision herein or in any other document, but the remainder of this Indenture and such Securities shall be unaffected thereby. Following a covenant defeasance, payment of the Securities of such series may not be accelerated because of or by reference to the Sections specified above in this Section 1403. Section 1404. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE. The following shall be the conditions precedent to application of either Section 1402 or Section 1403 to the Outstanding Securities of such series: (1) the Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 609 who shall agree to comply with the provisions of this Article Thirteen applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities, (A) money in an amount, or (B) U.S. Government Obligations which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment, money in an amount, or (C) a combination thereof, sufficient, without reinvestment, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge, (i) the principal of (and premium, if any) and interest on the Outstanding Securities of such series to maturity or redemption, as the case may be, and (ii) any mandatory sinking fund payments or analogous payments applicable to the Outstanding Securities of such series on the due dates thereof. -60- Before such a deposit the Company may make arrangements satisfactory to the Trustee for the redemption of Securities at a future date or dates in accordance with Article Eleven, which shall be given effect in applying the foregoing. For this purpose, "U.S. GOVERNMENT OBLIGATIONS" means securities that are (x) direct obligations of the United States of America for the payment of which its full faith and credit is pledged or (y) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America, which, in either case, are not callable or redeemable at the option of the issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section 3(a)(2) of the Securities Act of 1933, as amended) as custodian with respect to any such U.S. Government Obligation or a specific payment of principal of or interest on any such U.S. Government Obligation held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the U.S. Government Obligation or the specific payment of principal of or interest on the U.S. Government Obligation evidenced by such depository receipt. (2) No Event of Default or event which with notice or lapse of time or both would become an Event of Default with respect to the Securities of such series shall have occurred and be continuing (A) on the date of such deposit or (B) insofar as subsections 501(5) and (6) are concerned, at any time during the period ending on the 121st day after the date of such deposit or, if longer, ending on the day following the expiration of the longest preference period applicable to the Company in respect of such deposit (it being understood that the condition in this clause (B) is a condition subsequent and shall not be deemed satisfied until the expiration of such period). (3) Such defeasance or covenant defeasance shall not (A) cause the Trustee for the Securities of such series to have a conflicting interest as defined in 0 or for purposes of the Trust Indenture Act with respect to any securities of the Company or (B) result in the trust arising from such deposit to constitute, unless it is qualified as, a regulated investment company under the Investment Company Act of 1940, as amended. (4) Such defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under, this Indenture or any other agreement or instrument to which the Company is a party or by which it is bound. (5) In the case of an election under Section 1402, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (x) the Company has received from, or there has been published by, the Internal Revenue Service a ruling, or (y) since the date of this Indenture there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the Holders of the Outstanding Securities of such series will not recognize income, gain or loss for -61- Federal income tax purposes as a result of such defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same time as would have been the case if such defeasance had not occurred. (6) In the case of an election under Section 1403, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of the Outstanding Securities of such series will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred. (7) Such defeasance or covenant defeasance shall be effected in compliance with any additional terms, conditions or limitations which may be imposed on the Company in connection therewith pursuant to Section 301. (8) The Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for relating to either the defeasance under Section 1402 or the covenant defeasance under Section 1403 (as the case may be) have been complied with. Section 1405. DEPOSITED MONEY AND U.S. GOVERNMENT OBLIGATIONS TO BE HELD IN TRUST; OTHER MISCELLANEOUS PROVISIONS. Subject to the provisions of the last paragraph of Section 1003, all money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee -- collectively, for purposes of this Section 1405, the "TRUSTEE") pursuant to Section 1404 in respect of the Outstanding Securities of such series shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent (but not including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities, of all sums due and to become due thereon in respect of principal (and premium, if any) and interest, but such money need not be segregated from other funds except to the extent required by law. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the money or U.S. Government Obligations deposited pursuant to Section 1404 or the principal and interest received in respect thereof. Anything herein to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or U.S. Government Obligations held by it as provided in Section 1404 which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an equivalent defeasance or covenant defeasance. Section 1406. REINSTATEMENT. If the Trustee or the Paying Agent is unable to apply any money in accordance with Section 1402 or 1403 by reason of any order or judgment or any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's -62- obligations under the Securities of such series shall be revived and reinstated as though no deposit had occurred pursuant to this Article Fourteen until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 1402 or 1403; PROVIDED, HOWEVER, that if the Company makes any payment of principal of (and premium, if any) any such Security following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Securities to receive such payment from the money held by the Trustee or the Paying Agent. This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. -63- IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as of the day and year first above written. PLATINUM UNDERWRITERS FINANCE, INC., as Issuer [SEAL] By: ________________________________ Name: Title: Attest: __________________ PLATINUM UNDERWRITERS HOLDINGS, LTD., as Guarantor [SEAL] By: ________________________________ Name: Title: Attest: __________________ JPMORGAN CHASE BANK, as Trustee [SEAL] By: ________________________________ Name: Title: Attest: __________________ STATE OF ) ) ss.: COUNTY OF ) On the __ day of _________, 2002, before me personally came ____________, to me known, who, being by me duly sworn, did depose and say that he is a __________________of Platinum Underwriters Finance, Inc., one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. ------------------------------------------------- STATE OF ) ) ss.: COUNTY OF ) On the __ day of _________, 2002, before me personally came ____________, to me known, who, being by me duly sworn, did depose and say that he is a __________________of Platinum Underwriters Holdings, Ltd., one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. ------------------------------------------------- STATE OF ) ) ss.: COUNTY OF ) On the __ day of _____________, 2002, before me personally came __________________, to me known, who, being by me duly sworn, did depose and say that he is a _______________ of JPMorgan Chase Bank, one of the corporations described in and which executed the foregoing instrument; that she knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that she signed her name thereto by like authority. ----------------------------------------------- EX-4.3 7 a2088388zex-4_3.txt EXHIBIT 4.3 EXHIBIT 4.3 - -------------------------------------------------------------------------------- PLATINUM UNDERWRITERS FINANCE, INC., AS ISSUER AND PLATINUM UNDERWRITERS HOLDINGS, LTD, AS GUARANTOR TO JPMORGAN CHASE BANK, AS TRUSTEE FORM OF FIRST SUPPLEMENTAL INDENTURE DATED AS OF -, 2002 - -------------------------------------------------------------------------------- FIRST SUPPLEMENTAL INDENTURE, dated as of -, 2002 (the "First Supplemental Indenture"), among PLATINUM UNDERWRITERS FINANCE, INC., a corporation duly organized and existing under the laws of the State of Delaware (the "Company"), PLATINUM UNDERWRITERS HOLDINGS, LTD., a Bermuda corporation (the "Guarantor"), and JPMORGAN CHASE BANK, a New York banking corporation, as trustee (the "Trustee"). WHEREAS, the Company and the Guarantor executed and delivered the indenture, dated as of -, 2002 (the "Base Indenture"), to the Trustee to provide for the future issuance of the Company's guaranteed debt securities (the "Securities"), to be issued from time to time in one or more series as might be determined by the Company under the Base Indenture; WHEREAS, pursuant to the terms of the Base Indenture, the Company desires to provide for the establishment of a new series of its Securities to be known as its -% Senior Guaranteed Notes due 2007 (the "Notes"), the form and substance of such Notes and the terms, provisions and conditions thereof to be set forth as provided in the Base Indenture and this First Supplemental Indenture (together, the "Indenture"); and WHEREAS, the Company and the Guarantor have requested that the Trustee execute and deliver this First Supplemental Indenture and satisfy all requirements necessary to make this First Supplemental Indenture a valid instrument in accordance with its terms, and to make the Notes, when executed by the Company and authenticated and delivered by the Trustee, the valid obligations of the Company and all acts and things necessary have been done and performed to make this First Supplemental Indenture enforceable in accordance with its terms, and the execution and delivery of this First Supplemental Indenture has been duly authorized in all respects: NOW, THEREFORE, in consideration of the purchase and acceptance of the Notes by the Holders thereof, and for the purpose of setting forth, as provided in the Indenture, the form and substance of the Notes and the terms, provisions and conditions thereof, the Company and the Guarantor covenant and agree with the Trustee as follows: ARTICLE I DEFINITIONS Section 1.1. DEFINITION OF TERMS. Unless otherwise provided herein or unless the context otherwise requires: (a) a term defined in the Base Indenture has the same meaning when used in this First Supplemental Indenture; (b) a term defined anywhere in this First Supplemental Indenture has the same meaning throughout; (c) the singular includes the plural and vice versa; (d) headings are for convenience of reference only and do not affect interpretation; (e) the following terms have the meanings given to them in the Purchase Contract Agreement (as defined below): Failed Remarketing; Last Failed Remarketing; Normal Units; Purchase Contract Agent; Remarketing Agreement; Remarketing Date; Remarketing Value; Separate Notes; Subsequent Remarketing Date; and Underwriting Agreement; (f) the following terms have the meanings given to them in this Section 1.1(f): "Interest Rate" shall have the meaning set forth in Section 2.5. "Over-Allotment Option" shall mean the option granted to the underwriters pursuant to the Underwriting Agreement to purchase up to an additional 750,000 Normal Units. "Purchase Contract Agreement" shall mean the Purchase Contract Agreement, dated as of -, 2002, between the Company and -, as purchase contract agent. "Reset Agent" means a nationally recognized investment banking firm chosen by the Company to determine the Reset Rate. "Reset Date" shall mean the date following the Remarketing Date or a Subsequent Remarketing Date, as applicable, on which the trades in a successful remarketing of the Notes pursuant to the Purchase Contract Agreement and the Remarketing Agreement settle. "Reset Rate" means the lowest interest rate per annum (rounded to the nearest one-thousandth (0.001) of one percent per annum), as determined by the Reset Agent, that the Notes shall bear in order for the Notes to have a market value at the Remarketing Date or any Subsequent Remarketing Date, as the case may be, of at least 100.25% of the Remarketing Value, assuming, for this purpose, even if not true, that all of the Notes are held as components of Normal Units and will be remarketed. ARTICLE II GENERAL TERMS AND CONDITIONS OF THE NOTES Section 2.1. DESIGNATION, PRINCIPAL AMOUNT AND AUTHORIZED DENOMINATION. There is hereby authorized a series of Securities designated the -% Senior Guaranteed Notes due 2007, limited in aggregate principal amount to $125,000,000, which amount to be issued shall be as set forth in any Company Order for the authentication and delivery of Notes pursuant to the Base Indenture and which amount may be increased by up to $18,750,000 in the event the Over-Allotment option is exercised. The Notes shall be issuable in denominations of $1000 and integral multiples thereof except that a Note held as part of a Normal Unit represents an ownership interest of 1/40th, or 2.5%, of a Note in aggregate principal amount of $1000 and will therefore correspond to the stated amount of $25 per Normal Unit. 2 Section 2.2. MATURITY. The Stated Maturity Date of the Notes will be -, 2007. Section 2.3. FORM AND PAYMENT. (a) The Notes, on original issuance, shall be issued in the form of (i) one or more definitive, fully registered Notes registered initially in the name of JPMorgan Chase Bank, as Purchase Contract Agent and (ii) one fully registered Global Notes registered in the name of The Depository Trust Company ("DTC"), as Depository, or its nominee, and deposited with the Trustee, as custodian for DTC, for credit by DTC to the respective accounts of beneficial owners of the Separate Notes represented thereby (or such other accounts as they may direct). (b) The principal of and the interest on the Notes shall be payable at the Office or Agency of the Company maintained for that purpose; PROVIDED, HOWEVER, that payment of interest may be made at the option of the Company by check mailed to the registered Holder at such address as shall appear in the Register or by wire transfer to an account appropriately designated by the Holder entitled thereto. Section 2.4. GLOBAL NOTE. (a) DTC shall serve as the initial Depository for the Global Note. (b) Unless and until it is exchanged for definitive Notes in registered form in accordance with Section 305 of the Base Indenture, a Global Note may be transferred, in whole but not in part, only to another nominee of the Depository, or to a successor Depository selected or approved by the Company or to a nominee of such successor Depository. Section 2.5. INTEREST AND INTEREST RATE RESET. (a) Each Note will bear interest from its Issue Date or from the most recent Interest Payment Date to which interest has been paid or duly provided for, as the case may be, initially at the rate of -% per annum (the "Interest Rate") up to but excluding the Reset Date; provided, however, that in the event that a Last Failed Remarketing occurs, each Note shall continue to bear interest at the Interest Rate until the principal of the Notes is paid or made available for payment. In the event the Notes are successfully remarketed pursuant to the Purchase Contract and Remarketing Agreement, each Note shall bear interest at the Reset Rate from the Reset Date to the date on which the principal of the Notes is paid or made available for payment; PROVIDED that any principal and installment of interest which is overdue shall bear interest (to the extent that payment of such interest is enforceable under applicable law) at the Interest Rate up to but excluding the Reset Rate, if any, and thereafter at the Reset Rate, from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand. Interest on the Notes initially shall be payable quarterly in arrears on [-, -, - and -] of each year (each, an "Interest Payment Date"), commencing [-], 2002, and then semi-annually in arrears on the Interest Payment Dates of - and - of each year, commencing -, 2005, until the principal thereof is paid or made available for payment. (b) The amount of interest payable for any period will be computed on the basis of a 360-day year consisting of twelve 30-day months. Except as provided in the following sentence, 3 the amount of interest payable for any period shorter than a full quarterly or semi-annual, as applicable, period for which interest is computed will be computed on the basis of the actual number of days elapsed in such a 90-day or 180-day period, as applicable. In the event that any date on which interest is payable on the Notes is not a Business Day, then payment of interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. The Notes do not have the benefit of any sinking fund obligation. ARTICLE III FORM OF NOTE Section 3.1. FORM OF NOTE. The Notes and the Trustee's Certificate of Authentication to be endorsed thereon are to be substantially in the following forms: [IF THE NOTE IS A GLOBAL NOTE, INSERT - This Note is a Global Note within the meaning of the Indenture hereinafter referred to and is registered in the name of the Depository or a nominee of the Depository. This Note is exchangeable for Notes registered in the name of a person other than the Depository or its nominee only in the limited circumstances described in the Indenture, and no transfer of this Note (other than a transfer of this Note as a whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository) may be registered except in limited circumstances. Unless this Note is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) to the issuer or its agent for registration of transfer, exchange or payment, and any Note issued is registered in the name of Cede & Co. or such other name as requested by an authorized representative of The Depository Trust Company and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.] No. CUSIP No. $ ----------------- 4 PLATINUM UNDERWRITERS FINANCE, INC. -% SENIOR GUARANTEED NOTE DUE 2007 PLATINUM UNDERWRITERS FINANCE, INC., a Delaware corporation (the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to ___________________, the principal sum of ______ dollars ($______________) on [-], 2007 (such date is hereinafter referred to as the "Stated Maturity Date"), and to pay interest on said principal sum from -, 2002, or from the most recent interest payment date initially at the rate of -% per annum (the "Interest Rate") up to, but excluding, the Reset Date; provided, however, that in the event a Last Failed Remarketing occurs, this Note shall continue to bear interest at the Interest Rate until the principal of the Notes is paid or made available for payment. In the event the Notes are successfully remarketed pursuant to the Purchase Contract and Remarketing Agreement this Note shall bear interest at the Reset Rate, from the Reset Date to the date on which principal hereof is paid or made available for payment; PROVIDED that any principal and installment of interest which is overdue shall bear interest (to the extent that payment of such interest is enforceable under applicable law) at the Interest Rate up to but excluding, the Reset Date, if any, and thereafter at the Reset Rate, from the dates such amounts are due until they are paid or made available for payment, and such interest shall be payable on demand. Interest on this Note initially shall be payable quarterly in arrears on [-, -, -, and -] of each year (each, an "Interest Payment Date"), commencing -, 2002, and then semi-annually in arrears on the Interest Payment Dates of - and - of each year, commencing on - -, 2005 until the principal hereof is paid or made available for payment. The amount of interest payable on any Interest Payment Date shall be computed on the basis of a 360-day year consisting of twelve 30-day months. Except as provided in the following sentence, the amount of interest payable for any period shorter than a full quarterly or semi-annual period, as applicable, for which interest is computed will be computed on the basis of the actual number of days elapsed in such a 90-day or 180-day period. In the event that any date on which interest is payable on this Note is not a Business Day, then payment of interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. The interest installment so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the person in whose name this Note is registered at the close of business on the regular record date for such interest installment, which as long as any Notes are represented by a Global Note shall be the close of business on the Business Day next preceding such Interest Payment Date; PROVIDED, HOWEVER, if pursuant to the terms of the Indenture the Notes are no longer represented by a Global Note, the Company may select such regular record date for such interest installment which shall be more than one Business Day but less than 60 Business Days prior to such Interest Payment Date. Any such interest installment not punctually paid or duly provided for shall forthwith cease to be payable to the registered Holders on such regular record date and may be paid to the Person in whose name this Note is registered at the close of business on a special record date to be fixed by the Trustee for the payment of such defaulted interest, notice whereof shall be given to the registered Holders of this series of Notes not less than 10 days prior to such special record date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange all as more fully provided in the Indenture. The principal of and the interest on this Note shall be payable at the Office or Agency of the Company maintained for that purpose in any coin or currency of the United States of America that at the 5 time of payment is legal tender for payment of public and private debts; PROVIDED, HOWEVER, that payment of interest may be made at the option of the Company by check mailed to the registered Holder at such address as shall appear in the Register or by wire transfer to an account appropriately designated by the Holder entitled thereto. Reference is hereby made to the further provisions of this Note set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if fully set forth at this place. Unless the certificate of authorization hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Note and the Guarantee endorsed herein shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 6 IN WITNESS WHEREOF, the Company has caused this instrument to be executed under its corporate seal. Dated: PLATINUM UNDERWRITERS FINANCE, INC. By: -------------------------------- Name: Title: Attest: -------------------- CERTIFICATE OF AUTHENTICATION This is one of the Notes of the series designated herein referred to in the within-mentioned Indenture. JPMORGAN CHASE BANK, as Trustee By: -------------------------------- Authorized Officer 7 (FORM OF REVERSE OF NOTE) This Note is one of a duly authorized series of the Senior Guaranteed Notes of the Company (herein sometimes referred to as the "Securities"), specified in the Indenture hereinafter referred to, all issued or to be issued in one or more series under and pursuant to an Indenture dated as of -, 2002 (the "Base Indenture"), duly executed and delivered among the Company, Platinum Underwriters Holdings, Ltd., as guarantor (herein called the "Guarantor") and JPMorgan Chase Bank, as Trustee (the "Trustee") (such Base Indenture as supplemented by the First Supplemental Indenture, dated -, 2002, the "Indenture"), to which Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Securities. By the terms of the Indenture, the Securities are issuable in series that may vary as to amount, date of maturity, rate of interest and in other respects as provided in the Indenture. This series of Securities is limited in aggregate principal amount as specified in said First Supplemental Indenture. If a Tax Event shall occur and be continuing, the Company may, at its option, redeem the Notes then Outstanding in whole (but not in part) at any time ("Tax Event Redemption") at a Redemption Price equal to, for each Note, the Redemption Amount (as herein defined) plus accrued and unpaid interest thereon, to the date of redemption (the "Tax Event Redemption Date"). If such Tax Event Redemption occurs prior to a successful remarketing pursuant to Section - of the Purchase Contract Agreement, the Redemption Price payable with respect to the Notes pledged to the Collateral Agent (as herein defined) under the Pledge Agreement dated as of -, 2002 by and among the Company, State Street Bank, as Collateral Agent, Custodial Agent and Securities Intermediary (the "Collateral Agent"), and JPMorgan Chase Bank, as Purchase Contract Agent and Trustee (the "Pledge Agreement"), will be paid to the Collateral Agent on the Tax Event Redemption Date on or prior to 12:00 p.m., New York City time, by wire transfer in immediately available funds at such place and at such account as may be designated by the Collateral Agent in exchange for the Notes pledged to the Collateral Agent; in such event, the Collateral Agent shall apply such Redemption Price pursuant to the terms of the Purchase Contract Agreement and the Pledge Agreement. Notice of any redemption will be mailed at least 30 days but not more than 60 days before the Tax Event Redemption Date to each registered Holder of Notes of this Series to be redeemed at its registered address as more fully provided in the Indenture. Unless the Company defaults in payment of the Redemption Price, on and after the Tax Event Redemption Date interest shall cease to accrue on such Notes of this Series. "Tax Event" means the receipt by the Company of an opinion of a nationally recognized tax counsel experienced such matters, to the effect that there is more than an insubstantial risk that interest payable by the Company on the Notes on the next Interest Payment Date will not be deductible, in whole or in part, by the Company for United States federal income tax purposes as a result of (a) any amendment to, or change (including any announced proposed change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein affecting taxation (other than any such amendment, change or announced proposed change to the so-called "earnings stripping" provisions of Section 163(j) of the Internal Revenue Code, which limit the ability of U.S. corporations to deduct interest on certain debt owed to or guaranteed by related foreign persons), (b) any amendment to or change in an official interpretation or application of such laws or regulations by any legislative body, 8 court, governmental agency or regulatory authority or (c) any official interpretation or pronouncement that provides for a position with respect to such laws or regulations that differs from the generally accepted position on -, 2002, which amendment, change or proposed change is effective or which interpretation or pronouncement is announced on or after -, 2002. "Quotation Agent" means Goldman, Sachs & Co. or any of its successors or any other primary U.S. government securities dealer in The City of New York selected by the Company. "Redemption Amount" means, for each Note, the product of (i) the principal amount of such Note and (ii) a fraction whose numerator is the applicable Treasury Portfolio Purchase Price (as herein defined) and whose denominator is the applicable Tax Event Redemption Principal Amount (as herein defined). "Tax Event Redemption Principal Amount" means (i) in the case of a Tax Event Redemption Date occurring prior to a successful remarketing of the Notes pursuant to the Purchase Contract Agreement, the aggregate principal amount of Notes included in Normal Units on such date, and (ii) in the case of a Tax Event Redemption Date occurring after a successful remarketing of the Notes pursuant to the Purchase Contract Agreement, the aggregate principal amount of the Notes. "Treasury Portfolio Purchase Price" means the lowest aggregate price quoted by a primary U.S. government securities dealer in New York City to the Quotation Agent on the third Business Day immediately preceding the Tax Event Redemption Date for the purchase of the Treasury Portfolio for settlement on the Tax Event Redemption Date. "Treasury Portfolio" means: (i) if a Tax Event Redemption occurs prior to a successful remarketing of the Notes pursuant to the provisions of the Purchase Contract Agreement, a portfolio of zero-coupon U. S. Treasury securities consisting of principal or interest strips of U.S. Treasury securities that mature on or prior to -, 2005 in an aggregate amount equal to the applicable Tax Event Redemption Principal Amount and with respect to each scheduled Interest Payment Date on the Notes that occurs after the Tax Event Redemption Date and on or before -, 2005, interest or principal strips of U.S. Treasury securities that mature on or prior to such Interest Payment Date in an aggregate amount equal to the aggregate interest payment that would be due on the applicable Tax Event Redemption Principal Amount on such date if the interest rate of the Notes were not reset on the Reset Date, and (ii) solely for purposes of determining the Treasury Portfolio Purchase Price in the case of a Tax Event Redemption Date occurring after a successful remarketing of the Notes pursuant to the Purchase Contract Agreement, a portfolio of zero-coupon U.S. Treasury securities consisting of principal or interest strips of U.S. Treasury securities that mature on or prior to the Maturity Date in an aggregate amount equal to the applicable Tax Event Redemption Principal Amount and with respect to each scheduled Interest Payment Date on the Notes that occurs after the Tax Event Redemption Date and on or before the Maturity Date, interest or principal strips of U.S. Treasury securities that mature on or prior to such Interest Payment Date in an aggregate amount equal to the aggregate interest payment that would be due on the applicable Tax Event Redemption Principal Amount of the Notes Outstanding on the Tax Event Redemption Date. The Notes do not have the benefit of any sinking fund obligation. 9 In case an Event of Default, as defined in the Indenture, shall have occurred and be continuing, the principal of all of the Notes may be declared, and upon such declaration shall become, due and payable, in the manner, with the effect and subject to the conditions provided in the Indenture. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the Guarantor and the rights of the Holders of the Notes under the Indenture at any time by the Company, the Guarantor and the Trustee with the consent of the majority of the Holders in principal amount of the Notes at the time Outstanding. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Notes at the time Outstanding, on behalf of the Holders of all the Notes, to waive compliance by the Company or the Guarantor, or both, with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note. No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and premium, if any, and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, this Note is transferable by the registered Holder hereof on the Register of the Company, upon surrender of this Note for registration of transfer at the office or agency of the Trustee in the City of New York and State of New York accompanied by a written instrument or instruments of transfer in form satisfactory to the Company or the Trustee duly executed by the registered Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of authorized denominations and for the same aggregate principal amount and series will be issued to the designated transferee or transferees. No service charge will be made for any such transfer, but the Company may require payment of a sum sufficient to cover any tax, assessment or other governmental charge payable in relation thereto. Prior to due presentment for registration of transfer of this Note, the Company, the Guarantor, the Trustee, any paying agent and the Registrar may deem and treat the registered holder hereof as the absolute owner hereof (whether or not this Note shall be overdue and notwithstanding any notice of ownership or writing hereon made by anyone other than the Registrar) for the purpose of receiving payment of or on account of the principal hereof and premium, if any, and interest due hereon and for all other purposes, and neither the Company, the Guarantor nor the Trustee nor any paying agent nor any Registrar shall be affected by any notice to the contrary. No recourse shall be had for the payment of the principal of or the interest on this Note, or for any claim based hereon, or otherwise in respect hereof, or based on or in respect of the Indenture, against any incorporator, shareholder, officer or director, past, present or future, as such, of the Company or the Guarantor or of any predecessor or successor corporations, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or 10 penalty or otherwise, all such liability being, by the acceptance hereof and as part of the consideration for the issuance hereof, expressly waived and released. The Indenture imposes certain limitations on the ability of the Company and the Guarantor to, among other things, merge or consolidate with any other Person or sell, assign, transfer, lease or convey all or substantially all of its properties and assets. All such covenants and limitations are subject to a number of important qualifications and exceptions. The Company and Guarantor must report periodically to the Trustee on compliance with the covenants in the Indenture. The Notes of this series are issuable only in registered form without coupons, in denominations of $1000 and any integral multiple thereof except that a Note held as part of a Normal Unit represents an ownership interest of 1/40th, or 2.5%, of a Note in aggregate principal amount of $1000 and will therefore correspond to the stated amount of $25 per Normal Unit. As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series so issued are exchangeable for a like aggregate principal amount of Notes of this series of a different authorized denomination, as requested by the Holder surrendering the same. [IF NOTE IS A GLOBAL NOTE, INSERT - This Note is a Global Note and is subject to the provisions of the Indenture relating to Global Notes, including the limitations in Section 305 of the Base Indenture on transfers and exchanges of Global Notes.] All terms used in this Note that are defined in the Indenture shall have the meanings assigned to them in the Indenture. This Note and the Guarantee endorsed herein shall be governed by and construed in accordance with the laws of the State of New York. 11 GUARANTEE For value received, Platinum Underwriters Holdings, Ltd., a corporation organized under the laws of Bermuda (herein called the "Guarantor", which term includes any successor under the Indenture referred to in the Note upon which this Guarantee is endorsed), hereby fully and unconditionally guarantees to the Holder of the Note upon which this Guarantee is endorsed, and to the Trustee on behalf of such Holder, the due and punctual payment of the principal of, premium, if any, and interest on such Note, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, according to the terms of such Note and of the Indenture. In case of the failure of the Company punctually to make any such payment of principal, premium, if any, or interest, the Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at the Stated Maturity or by declaration of acceleration, call for redemption or otherwise, and as if such payment were made by the Company. The Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of such Note or the Indenture, the absence of any action to enforce the same, any waiver or consent by the Holder of such Note or by the Trustee with respect to any provisions thereof or of the Indenture, the obtaining of any judgment against the Company or any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. The Guarantor hereby waives the benefits of division and discussion, diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest or notice with respect to such Note or the indebtedness evidenced thereby and all demands whatsoever, and covenants that this Guarantee will not be discharged except by complete performance of the obligations contained in such Note and in this Guarantee. The Holder of the Note upon which this Guarantee is endorsed is entitled to the further benefits relating hereto set forth in the Indenture. No reference herein to the Indenture and no provision of this Guarantee or of the Indenture shall alter or impair the guarantee of the Guarantor, which is absolute and unconditional, of the due and punctual payment of the principal of and interest on the Note upon which this Guarantee is endorsed. This Guarantee shall be governed by and construed in accordance with the laws of the State of New York. All terms used in this Guarantee which are defined in the Indenture shall have the meanings assigned to them in the Indenture. This Guarantee shall not be valid or obligatory for any purpose until the certificate of authentication on the Note upon which this Guarantee is endorsed shall have been executed by the Trustee under the Indenture by the manual signature of one of its authorized signatories. 12 IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly executed. PLATINUM UNDERWRITERS HOLDINGS, LTD. By: --------------------------------- Name: Title: Attest: By: ------------------------------- Name: Title: 13 ASSIGNMENT FOR VALUE RECEIVED, the undersigned assigns and transfers this Note to: - --------------------------------------------------------- - --------------------------------------------------------- - --------------------------------------------------------- (INSERT ASSIGNEE'S SOCIAL SECURITY OR TAX IDENTIFICATION NUMBER) - --------------------------------------------------------- - --------------------------------------------------------- - --------------------------------------------------------- (INSERT ADDRESS AND ZIP CODE OF ASSIGNEE) agent to transfer this Note on the Register. The agent may substitute another to act for him or her. Dated: Signed: ----------------------------- Signature Guarantee: (SIGN EXACTLY AS YOUR NAME APPEARS ON THE OTHER SIDE OF THIS NOTE) Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. 14 ARTICLE IV ORIGINAL ISSUE OF NOTES Section 4.1. ORIGINAL ISSUE OF NOTES. Notes in the aggregate principal amount of $o (which amount may be increased by up to $o in the event the Over-Allotment Option is exercised) may, upon execution of this First Supplemental Indenture, be executed by the Company and delivered to the Trustee for authentication, and the Trustee shall thereupon authenticate and deliver said Notes in accordance with a Company Order. The Issue Date of the Notes shall be -, 2002. ARTICLE V MISCELLANEOUS Section 5.1. RATIFICATION OF BASE INDENTURE. The Base Indenture, as supplemented by this First Supplemental Indenture, is in all respects ratified and confirmed, and this First Supplemental Indenture shall be deemed part of the Base Indenture in the manner and to the extent herein and therein provided. Section 5.2. GOVERNING LAW. THIS FIRST SUPPLEMENTAL INDENTURE AND EACH NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Section 5.3. NOT RESPONSIBLE FOR RECITALS. The recitals contained in this First Supplemental Indenture, except the Trustee's certificate of authentication, shall be taken as the statements of the Company and the Guarantor, and the Trustee assumes no responsibility for their correctness and makes no representation as to the validity or sufficiency of this First Supplemental Indenture. Section 5.4. COUNTERPARTS. This First Supplemental Indenture may be executed in any number of counterparts each of which shall be an original; but such counterparts shall together constitute but one and the same instrument. 15 IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed by their respective officers thereunto duly authorized, on the date or dates indicated in the acknowledgments and as of the day and year first above written. PLATINUM UNDERWRITERS FINANCE, INC., as Issuer [SEAL] By: --------------------------------- Name: Title: Attest: -------------------- PLATINUM UNDERWRITERS HOLDINGS, LTD., as Guarantor [SEAL] By: --------------------------------- Name: Title: Attest: -------------------- JPMORGAN CHASE BANK, as Trustee [SEAL] By: --------------------------------- Name: Title: Attest: -------------------- STATE OF ) ) ss.: COUNTY OF ) On the __ day of _________, 2002, before me personally came ____________, to me known, who, being by me duly sworn, did depose and say that he is a __________________ of Platinum Underwriters Finance, Inc., one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. ---------------------------------- STATE OF ) ) ss.: COUNTY OF ) On the __ day of _________, 2002, before me personally came ____________, to me known, who, being by me duly sworn, did depose and say that he is a __________________ of Platinum Underwriters Holdings, Ltd., one of the corporations described in and which executed the foregoing instrument; that he knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that he signed his name thereto by like authority. ---------------------------------- STATE OF ) ) ss.: COUNTY OF ) On the ___ day of _____________, 2002, before me personally came __________________, to me known, who, being by me duly sworn, did depose and say that he is a _______________ of JPMorgan Chase Bank, one of the corporations described in and which executed the foregoing instrument; that she knows the seal of said corporation; that the seal affixed to said instrument is such corporate seal; that it was so affixed by authority of the Board of Directors of said corporation, and that she signed her name thereto by like authority. ---------------------------------- EX-4.4 8 a2088388zex-4_4.txt EXHIBIT 4.4 EXHIBIT 4.4 PLATINUM UNDERWRITERS HOLDINGS, LTD. AND JPMORGAN CHASE BANK, AS PURCHASE CONTRACT AGENT FORM OF PURCHASE CONTRACT AGREEMENT DATED AS OF , 2002

iii PURCHASE CONTRACT AGREEMENT, dated as of -, 2002, between Platinum Underwriters Holdings, Ltd., a Bermuda corporation (the "Company"), and JPMorgan Chase Bank, a New York banking corporation, acting as purchase contract agent and attorney-in-fact for the Holders of Units from time to time (the "Agent"). RECITALS The Company has duly authorized the execution and delivery of this Agreement and the Certificates evidencing the Units. All things necessary to make the Purchase Contracts, when the Certificates are executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Agent, as provided in this Agreement, the valid obligations of the Company, and to constitute this Agreement a valid agreement of the Company, in accordance with its terms, have been done. WITNESSETH: For and in consideration of the premises and the purchase of the Units by the Holders thereof, it is mutually agreed as follows: ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION SECTION 1.1 DEFINITIONS. For all purposes of this Agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular, and nouns and pronouns of the masculine gender include the feminine and neuter genders; (b) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States; (c) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision; and (d) the following terms have the meanings given to them in this Section 1.1(d): "Act" when used with respect to any Holder, has the meaning specified in Section 1.4(a). "Affiliate" has the same meaning as given to that term in Rule 405 of the Securities Act or any successor rule thereunder. "Agent" means the Person named as the "Agent" in the first paragraph of this agreement until a successor Agent shall have become such pursuant to the applicable provisions of this Agreement, and thereafter "Agent" shall mean such Person. "Agent-purchased Treasury Consideration" has the meaning specified in Section 5.4(b)(i). "Agreement" means this agreement as originally executed or as it may from time to time be supplemented or amended by one or more agreements supplemental hereto entered into pursuant to the applicable provisions hereof. "Applicable Market Value" has the meaning specified in Section 5.1(c). "Applicants" has the meaning specified in Section 7.12(b). "Bankruptcy Code" means Title 11 of the United States Code, or any other law of the United States that from time to time provides a uniform system of bankruptcy laws. "Beneficial Owner" means, with respect to a Book-Entry Interest, a Person who is the beneficial owner of such Book-Entry Interest as reflected on the books of the Clearing Agency or on the books of a Person maintaining an account with such Clearing Agency (directly as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency). "Board of Directors" means either the Board of Directors of the Company or the Executive Committee of such Board or any other committee of such Board duly authorized to act generally or in any particular respect for the Board hereunder. "Board Resolution" means (i) a copy of a resolution certified by the Secretary or the Assistant Secretary of the Company to have been duly adopted by the Board of Directors and to be in full force and effect on the date of such certification, (ii) a copy of a unanimous written consent of the Board of Directors or (iii) a certificate signed by the authorized officer or officers to whom the Board of Directors has delegated its authority, and in each case, delivered to the Agent. 2 "Book-Entry Interest" means a beneficial interest in a Global Certificate, ownership and transfers of which shall be maintained and made through book entries by a Clearing Agency as described in Section 3.6. "Business Day" means any day that is not a Saturday, Sunday or day on which banking institutions and trust companies in The City of New York or at a place of payment are authorized or required by law, regulation or executive order to close. "Capital Stock" means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated, whether voting or non-voting) corporate stock or similar interests in other types of entities. "Cash Merger" has the meaning set forth in Section 5.10(a). "Cash Merger Date" means the date on which a Cash Merger is consummated. "Cash Settlement" has the meaning set forth in Section 5.4(a). "Certificate" means a Normal Units Certificate or a Stripped Units Certificate. "Clearing Agency" means an organization registered as a "clearing agency" pursuant to Section 17A of the Exchange Act that is acting as a depositary for the Units and in whose name, or in the name of a nominee of that organization, shall be registered a Global Certificate and which shall undertake to effect book-entry transfers and pledges of the Units. "Clearing Agency Participant" means a broker, dealer, bank, trust company, clearing corporation, other financial institution or other Person for whom from time to time the Clearing Agency effects book-entry transfers and pledges of securities deposited with the Clearing Agency. "Closing Price" has the meaning specified in Section 5.1(c). "Collateral" has the meaning specified in Section 2.1(a) of the Pledge Agreement. "Collateral Agent" means State Street Bank, a -, as Collateral Agent under the Pledge Agreement until a successor Collateral Agent shall have become such pursuant to the applicable provisions of the Pledge Agreement, and thereafter "Collateral Agent" shall mean the Person who is then the Collateral Agent thereunder. 3 "Collateral Substitution" has the meaning specified in Section 3.13(a). "Common Shares" means the Common Shares, par value $0.01 per share, of the Company. "Company" means the Person named as the "Company" in the first paragraph of this Agreement until a successor shall have become such pursuant to the applicable provisions of this Agreement, and thereafter "Company" shall mean such successor. "Constituent Person" has the meaning specified in Section 5.6(b). "Contract Adjustment Payments" means, in the case of Normal Units and Stripped Units, the amount payable by the Company in respect of each Purchase Contract constituting a part of such Unit, which amount shall be equal to [ ]% per year of the Stated Amount, in each case computed (i) for any full quarterly period on the basis of a 360-day year of twelve 30-day months and (ii) for any period shorter than a full quarterly period, on the basis of a 30-day month, and for periods of less than a month, on the basis of the actual number of days elapsed per 30-day month, plus any Deferred Contract Adjustment Payments accrued pursuant to Section 5.3. "Corporate Trust Office" means the corporate trust office of the Agent at which, at any particular time, its corporate trust business shall be principally administered, which office at the date hereof is located at 450 West 33rd Street, New York, New York 10001, Attention: Institutional Trust Services. "Coupon Rate" means the percentage rate per annum at which each Note will bear interest initially. "Current Market Price" has the meaning specified in Section 5.6(a)(8). "Custodial Agent" means State Street Bank, a -, as Custodial Agent under the Pledge Agreement until a successor Custodial Agent shall have become such pursuant to the applicable provisions of the Pledge Agreement, and thereafter "Custodial Agent" shall mean the Person who is then the Custodial Agent thereunder. "Default" means a default by the Company in any of its obligations under this Agreement. "Deferred Contract Adjustment Payments" has the meaning specified in Section 5.3(a). "Depositary" means, initially, DTC, until another Clearing Agency becomes its successor. 4 "DTC" means The Depository Trust Company, the initial Clearing Agency. "Early Settlement" has the meaning specified in Section 5.9(a). "Early Settlement Amount" has the meaning specified in Section 5.9(a). "Early Settlement Date" has the meaning specified in Section 5.9(a). "Early Settlement Rate" has the meaning specified in Section 5.9(b). "Exchange Act" means the Securities Exchange Act of 1934 and any statute successor thereto, in each case as amended from time to time, and the rules and regulations promulgated thereunder. "Expiration Date" has the meaning specified in Section 1.4(f). "Expiration Time" has the meaning specified in Section 5.6(a)(6). "Failed Remarketing" has the meaning specified in Section 5.4(b)(ii). "Fair Market Value" with respect to securities distributed in a Spin-Off means (a) in the case of any Spin-Off that is effected simultaneously with an Initial Public Offering of such securities, the initial public offering price of those securities and (b) in the case of any other Spin-Off, (i) the average of the Sale Price of those securities over the first ten Trading Days after the effective date of such Spin-Off or (ii) if the Sale Price is required to be defined without regard to the price on any Trading Days, the Sale Price as of the effective date of such Spin-Off. "Global Certificate" means a Certificate that evidences all or part of the Units and is registered in the name of a Depositary or a nominee thereof. "Holder" means the Person in whose name the Unit evidenced by a Normal Units Certificate and/or a Stripped Units Certificate is registered in the related Normal Units Register and/or the Stripped Units Register, as the case may be. "Indenture" means the Indenture, dated as of -, 2002, among Platinum Underwriters Finance, Inc., the Company and the Trustee pursuant to which the Notes are to be issued, as originally executed and delivered and as it may from time to time be supplemented or amended by one or more indentures supplemental thereto entered into pursuant to the applicable provisions thereof and shall include the terms of a particular series established as contemplated thereof. 5 "Initial Public Offering" with respect to a Spin-Off means the first time securities of the same class or type as the securities being distributed in such Spin-Off are bona fide offered to the public for cash. "Issuer Order" or "Issuer Request" means a written order or request signed in the name of the Company by the Chief Executive Officer, the Chief Financial Officer, the President, any Vice-President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary (or other officer performing similar functions) of the Company and delivered to the Agent. "Last Failed Remarketing" has the meaning specified in Section 5.4(b)(ii). "Merger Early Settlement" has the meaning specified in Section 5.10(a). "Merger Early Settlement Amount" has the meaning specified in Section 5.10(b). "Merger Early Settlement Date" has the meaning specified in Section 5.10(a)(i). "Non-electing Share" has the meaning specified in Section 5.6(b). "Normal Unit" means the collective rights and obligations of a Holder of a Normal Units Certificate in respect of a 1/40 undivided beneficial interest in a Note or the appropriate Treasury Consideration, as the case may be, subject in each case to the Pledge thereof, and the related Purchase Contract. "Normal Units Certificate" means a certificate evidencing the rights and obligations of a Holder in respect of the number of Normal Units specified on such certificate, substantially in the form of Exhibit A hereto. "Normal Units Register" and "Normal Units Registrar" have the respective meanings specified in Section 3.5(a). "Notes" means the -% Senior Notes due - 2007 of Platinum Underwriters Finance, Inc. issued under the Indenture and guaranteed by the Company. "NYSE" has the meaning specified in Section 5.1(c). "Officers' Certificate" means a certificate signed by the Chief Executive Officer, the Chief Financial Officer, the President or any Vice-President, and by the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary (or other officer performing similar functions) of the Company and delivered to the Agent. 6 "Opinion of Counsel" means an opinion in writing signed by legal counsel, who may be an employee of or counsel to the Company or an Affiliate and who shall be reasonably acceptable to the Agent. "Opt-out Treasury Consideration" has the meaning specified in Section 5.4(b)(iv). "Outstanding Units" means, as of the date of determination, all Normal Units or Stripped Units evidenced by Certificates theretofore authenticated, executed and delivered under this Agreement, except: (i) If a Termination Event has occurred, (A) Stripped Units and (B) Normal Units for which the related Notes or the appropriate Treasury Consideration, as the case may be, has been theretofore deposited with the Agent in trust for the Holders of such Normal Units; (ii) Normal Units and Stripped Units evidenced by Certificates theretofore cancelled by the Agent or delivered to the Agent for cancellation or deemed cancelled pursuant to the provisions of this Agreement; and (iii) Normal Units and Stripped Units evidenced by Certificates in exchange for or in lieu of which other Certificates have been authenticated, executed on behalf of the Holder and delivered pursuant to this Agreement, other than any such Certificate in respect of which there shall have been presented to the Agent proof satisfactory to it that such Certificate is held by a bona fide purchaser in whose hands the Normal Units or Stripped Units evidenced by such Certificate are valid obligations of the Company; provided, that in determining whether the Holders of the requisite number of the Normal Units or Stripped Units have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Normal Units or Stripped Units owned by the Company or any Affiliate of the Company shall be disregarded and deemed not to be outstanding, except that, in determining whether the Agent shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Normal Units or Stripped Units which a Responsible Officer of the Agent knows to be so owned shall be so disregarded. Normal Units or Stripped Units so owned which have been pledged in good faith may be regarded as Outstanding Units if the pledgee establishes to the satisfaction of the Agent the pledgee's right so to act with respect to such Normal Units or Stripped Units and that the pledgee is not the Company or any Affiliate of the Company. "Payment Date" means each -, -, - and -, commencing -, 2002. 7 "Person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Platinum Underwriters Finance" means Platinum Underwriters Finance, Inc., a Delaware corporation. "Pledge" means the pledge under the Pledge Agreement of the Notes, the Treasury Securities or the appropriate Treasury Consideration, in each case constituting a part of the Units, property, cash, securities, financial assets and security entitlements of the Collateral Account (as defined in the Pledge Agreement) and any proceeds of any of the foregoing. "Pledge Agreement" means the Pledge Agreement, dated as of the date hereof, by and among the Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary and the Agent, on its own behalf and as attorney-in-fact for the Holders from time to time of the Units. "Pledged Notes" has the meaning set forth in Section 2.1(c) of the Pledge Agreement. "Pledged Treasury Consideration" has the meaning set forth in Section 2.1(c) of the Pledge Agreement. "Pledged Treasury Securities" has the meaning set forth in Section 2.1(c) of the Pledge Agreement. "Predecessor Certificate" means a Predecessor Normal Units Certificate or a Predecessor Stripped Units Certificate. "Predecessor Normal Units Certificate" of any particular Normal Units Certificate means every previous Normal Units Certificate evidencing all or a portion of the rights and obligations of the Company and the Holder under the Normal Units evidenced thereby; and, for the purposes of this definition, any Normal Units Certificate authenticated and delivered under Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Normal Units Certificate shall be deemed to evidence the same rights and obligations of the Company and the Holder as the mutilated, destroyed, lost or stolen Normal Units Certificate. "Predecessor Stripped Units Certificate" of any particular Stripped Units Certificate means every previous Stripped Units Certificate evidencing all or a portion of the rights and obligations of the Company and the Holder under the Stripped Units evidenced thereby; and, for the purposes of this definition, any Stripped Units Certificate authenticated and delivered under Section 3.10 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Stripped Units 8 Certificate shall be deemed to evidence the same rights and obligations of the Company and the Holder as the mutilated, destroyed, lost or stolen Stripped Units Certificate. "Purchase Contract," when used with respect to any Unit, means the contract forming a part of such Unit and obligating the Company to sell and the Holder of such Unit to purchase Common Shares on the terms and subject to the conditions set forth in Article Five. "Purchase Contract Settlement Fund" has the meaning specified in Section 5.5. "Purchase Price" has the meaning specified in Section 5.1(a). "Purchased Shares" has the meaning specified in Section 5.6(a)(6). "Quotation Agent" means each of _____________ and _____________ or any of their respective successors or any other primary U.S. government securities dealer in New York City selected by the Company. "Record Date" for the payment of a distribution payable on any Payment Date means, as to any Global Certificate, the Business Day next preceding such Payment Date, and as to any other Certificate, the 15th calendar day preceding such Payment Date. "Redemption Amount" means, for each Note, the product of (i) the principal amount of such Note and (ii) a fraction whose numerator is the applicable Treasury Portfolio Purchase Price and whose denominator is the applicable Tax Event Redemption Principal Amount. "Redemption Price" means the redemption price per Note equal to the Redemption Amount plus any interest on such Note accrued and unpaid as of the interest Payment Date, if any, preceding the Tax Event Redemption Date. "Register" means the Normal Units Register and the Stripped Units Register, as applicable. "Registrar" means the Normal Units Registrar and the Stripped Units Registrar, as applicable. "Remarketing Agent" has the meaning specified in Section 5.4(b)(i). "Remarketing Agreement" means the Remarketing Agreement to be entered into by and among the Company, Platinum Underwriters Finance, the Remarketing Agent and the Agent. 9 "Remarketing Date" means the third Business Day preceding -, 2005. "Remarketing Fee" has the meaning specified in Section 5.4(b)(i). "Remarketing Period" means each of (i) the three Business Day period beginning on the Remarketing Date and ending after the two immediately following Business Days; (ii) the three Business Day period immediately preceding -, 2005; and (iii) the third Business Day immediately preceding the Share Purchase Date. "Remarketing Rate" means the percentage rate per year at which each Note will bear interest on and following the Reset Date. "Remarketing Value" means the sum of (i) the value at the Remarketing Date or any Subsequent Remarketing Date, as the case may be, of U.S. Treasury securities that will pay, on or prior to the Share Purchase Date, an amount of cash equal to the aggregate interest payments that are scheduled to be payable on that date, on (1) the Notes which are included in Normal Units and (2) the Separate Notes, in each case, which are participating in the remarketing, assuming for that purpose, even if not true, that the interest rate on the Notes is equal to the Coupon Rate, and (ii) the value at the Remarketing Date or any Subsequent Remarketing Date, as the case may be, of U.S. Treasury securities that will pay, on or prior to the Share Purchase Date, an amount of cash equal to the aggregate Stated Amount of (1) such Notes that are included in Normal Units and (2) the Separate Notes, in each case, which are participating in the remarketing; provided that for purposes of clauses (i) and (ii) above, the Remarketing Value shall be calculated on the assumptions that (x) the U.S. Treasury securities are highly liquid and mature on or within 35 days prior to the Share Purchase Date, as determined in good faith by the Remarketing Agent in a manner intended to minimize the cash value of the U.S. Treasury securities, and (y) the U.S. Treasury securities are valued based on the ask-side price of such U.S. Treasury securities at a time between 9:00 a.m. and 11:00 a.m., New York City time, selected by the Remarketing Agent, on the Remarketing Date or any Subsequent Remarketing Date, as the case may be, as determined on a third-day settlement basis by a reasonable and customary means selected in good faith by the Remarketing Agent, plus accrued interest to that date. "Reorganization Event" has the meaning specified in Section 5.6(b). 10 "Reset Date" means the date following the Remarketing Date or a subsequent Remarketing Date, as applicable, on which the trades in a successful remarketing of the Notes, pursuant to the provisions of Section 5.4, settle. "Responsible Officer" means, when used with respect to the Agent, any officer within the Institutional Trust Services unit of the Agent (or any successor unit or department of the Agent) located at the Corporate Trust Office of the Agent who has direct responsibility for the administration of this Agreement and, for the purposes of Section 7.1(b)(2), shall also include any officer of the Agent to whom any corporate trust matter is referred because of such person's knowledge of and familiarity with the particular subject. "Sale Price" of any securities distributed in a Spin-Off on any Trading Day means the closing sale price per share (or if no closing sale price is reported, the average of the bid and ask prices or, if more than one in either case, the average of the average bid and average ask prices) on such Trading Day as reported in composite transactions for the principal U.S. securities exchange on which such securities are traded or, if such securities are not listed on a U.S. national or regional securities exchange, as reported by the Nasdaq Stock Market, or if such securities are not so reported, the last quoted bid price for such securities in the over-the-counter market as reported by the National Quotation Bureau or similar organization, or, if such bid price is not available, the market value of such securities on such date as determined by a nationally recognized independent investment banking firm retained by the Company for this purpose. "Securities Act" means the Securities Act of 1933 and any statute successor thereto, in each case as amended from time to time, and the rules and regulations promulgated thereunder. "Securities Intermediary" means State Street Bank, a - corporation, in its capacity as Securities Intermediary under the Pledge Agreement, together with its successors in such capacity. "Senior Indebtedness" means indebtedness of any kind of the Company unless the instrument under which such indebtedness is incurred expressly provides that it is in parity or subordinate in right of payment to the Contract Adjustment Payments. "Separate Notes" has the meaning set forth in the Pledge Agreement. "Settlement Date" means any Early Settlement Date or Merger Early Settlement Date or the Share Purchase Date. "Settlement Rate" has the meaning specified in Section 5.1(a). "Share Purchase Date" means -, 2005. 11 "Spin-Off" means a dividend or other distribution on the Common Shares of shares of Capital Stock of any class or series, or similar equity interests, of or relating to a subsidiary or other business unit of the Company. "Stated Amount" means, with respect to any one Normal Unit or Stripped Unit, $25, and with respect to any one Note, $1,000. "Stripped Unit" means the collective rights and obligations of a Holder of a Stripped Units Certificate in respect of a 1/40 undivided beneficial interest in a Treasury Security, subject to the Pledge thereof, and the related Purchase Contract. "Stripped Units Certificate" means a certificate evidencing the rights and obligations of a Holder in respect of the number of Stripped Units specified on such certificate, substantially in the form of Exhibit B hereto. "Stripped Units Register" and "Stripped Units Registrar" have the respective meanings specified in Section 3.5(a). "Subsequent Remarketing" has the meaning specified in Section 5.4(b)(ii). "Subsequent Remarketing Date" means any date on which the Remarketing Agent attempts a Subsequent Remarketing in accordance with Section 5.4 hereof, such date in no event to be later than the three Business Days immediately preceding the Share Purchase Date. "Tax Event" means the receipt by the Company of an opinion of a nationally recognized tax counsel experienced in such matters, which may be Sullivan & Cromwell, to the effect that there is more than an insubstantial risk that interest payable by Platinum Underwriters Finance on the Notes on the next Payment Date will not be deductible, in whole or in part, by Platinum Underwriters Finance for United States federal income tax purposes, as a result of (a) any amendment to, or change (including any announced proposed change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein affecting taxation, (b) any amendment to or change in an official interpretation or application of such laws or regulations by any legislative body, court, governmental agency or regulatory authority or (c) any official interpretation or pronouncement that provides for a position with respect to such laws or regulations that differs from the generally accepted position on _________, 2002, which amendment, change or proposed change is effective or which interpretation or pronouncement is announced on or after __________, 2002. "Tax Event Redemption" means, if a Tax Event shall occur and be continuing, the redemption of the Notes, at the option of Platinum Underwriters 12 Finance, in whole but not in part, on not less than 30 days nor more than 60 days' prior written notice. "Tax Event Redemption Date" means the date upon which a Tax Event Redemption is to occur. "Tax Event Redemption Principal Amount" means (i) in the case of a Tax Event Redemption Date occurring prior to a successful remarketing of the Notes pursuant to Section 5.4 hereof, the aggregate principal amount of Notes included in Normal Units outstanding on such date, and (ii) in the case of a Tax Event Redemption Date occurring after either a successful remarketing of the Notes pursuant to Section 5.4 hereof or the Share Purchase Date, the aggregate principal amount of the Notes outstanding on such date. "Tax Event Redemption Treasury Consideration" means, with respect to a Normal Unit and the U.S. Treasury securities in the Treasury Portfolio, (A) a 1/40, or 2.5%, undivided beneficial ownership interest in a $1,000 principal or interest amount of a principal or interest strip in a U.S. Treasury security included in such Treasury Portfolio which matures on or prior to , 2005 and (B) for each scheduled interest Payment Date on the Notes that occurs after the Tax Event Redemption Date and on or before the Share Purchase Date a -% undivided beneficial ownership interest in a $1,000 principal or interest of a principal or interest strip in a U.S. Treasury security included in the Treasury Portfolio that matures on or prior to that interest Payment Date. "Termination Date" means the date, if any, on which a Termination Event occurs. "Termination Event" means the occurrence of any of the following events: (i) at any time on or prior to the Share Purchase Date, a judgment, decree or court order shall have been entered granting relief under the Bankruptcy Code or any other similar federal or state law, adjudicating the Company to be insolvent, or approving as properly filed a petition seeking reorganization or liquidation of the Company, and, unless such judgment, decree or order shall have been entered within 60 days prior to the Share Purchase Date, such decree or order shall have continued undischarged and unstayed for a period of 60 days; (ii) at any time on or prior to the Share Purchase Date, a judgment, decree or court order for the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of the Company or of its property, or for the winding up or liquidation of its affairs, shall have been entered, and, unless such judgment, decree or order shall have been entered within 60 days prior to the Share Purchase 13 Date, such judgment, decree or order shall have continued undischarged and unstayed for a period of 60 days; or (iii) at any time on or prior to the Share Purchase Date, the Company shall file a petition for relief under the Bankruptcy Code or any other similar federal or state law, or shall consent to the filing of a bankruptcy proceeding against it, or shall file a petition or answer or consent seeking reorganization or liquidation under the Bankruptcy Code or any other similar federal or state law, or shall consent to the filing of any such petition, or shall consent to the appointment of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency of it or of its property, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due. "Threshold Appreciation Price" has the meaning specified in Section 5.1(a). "TIA" means the Trust Indenture Act of 1939, and any statute successor thereto, in each case as amended from time to time, and the rules and regulations promulgated thereunder. "Trading Day" has the meaning specified in Section 5.1(c). "Treasury Consideration" means the Agent-purchased Treasury Consideration, the Opt-out Treasury Consideration or the Tax Event Redemption Treasury Consideration. "Treasury Portfolio" means: (i) if a Tax Event Redemption occurs prior to a successful remarketing of the Notes pursuant to the provisions of Section 5.4 hereof, a portfolio of (A) zero-coupon U.S. Treasury securities consisting of principal or interest strips of U.S. Treasury securities that mature on or prior to the Share Purchase Date in an aggregate amount equal to the applicable Tax Event Redemption Principal Amount and (B) with respect to each scheduled interest Payment Date on the Notes that occurs after the Tax Event Redemption Date and on or before the Share Purchase Date, interest or principal strips of U.S. Treasury securities that mature on or prior to such interest Payment Date in an aggregate amount equal to the aggregate interest payment that would be due on the applicable Tax Event Redemption Principal Amount on such date if the interest rate of the Notes were not reset on the Reset Date, and (ii) solely for purposes of determining the Treasury Portfolio Purchase Price in the case of a Tax Event Redemption Date occurring after either of a successful remarketing of the Notes or the Share Purchase Date, a portfolio of (A) zero-coupon U.S. Treasury securities consisting of principal or interest strips of U.S. Treasury securities that mature on or prior to -, 2007 in an aggregate amount equal to the applicable Tax Event Redemption Principal Amount and (B) with respect to each scheduled interest Payment Date on the Notes that occurs after the Tax Event Redemption 14 Date and on or before -, 2007, interest or principal strips of U.S. Treasury securities that mature on or prior to such interest Payment Date in an aggregate amount equal to the aggregate interest payment that would be due on the applicable Tax Event Redemption Principal Amount. "Treasury Portfolio Purchase Price" means the lowest aggregate price quoted by a primary U.S. government securities dealer in New York City to the Quotation Agent on the third Business Day immediately preceding the Tax Event Redemption Date for the purchase of the Treasury Portfolio for settlement on the Tax Event Redemption Date. "Treasury Security" means a zero-coupon U.S. Treasury security (CUSIP Number -) maturing on -, 2005 that will pay $1,000 on such maturity date. "Trustee" means JPMorgan Chase Bank, a New York banking corporation, as trustee under the Indenture and the First Supplemental Indenture, or any successor thereto. "Underwriting Agreement" means the Underwriting Agreement relating to the Units dated -, 2002 among the Company, Platinum Underwriters Finance, Inc. and the underwriters named therein. "Unit" means a Normal Unit or a Stripped Unit. "Vice-President" means any vice-president, whether or not designated by a number or a word or words added before or after the title "vice-president." SECTION 1.2 COMPLIANCE CERTIFICATES AND OPINIONS. Except as otherwise expressly provided by this Agreement, upon any application or request by the Company to the Agent to take any action under any provision of this Agreement, the Company shall furnish to the Agent an Officers' Certificate stating that all conditions precedent, if any, provided for in this Agreement relating to the proposed action have been complied with and, if requested by the Agent, an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Agreement relating to such particular application or request, no additional certificate or opinion need be furnished. Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Agreement shall include: (a) a statement that the individual signing such certificate or opinion has read such covenant or condition and the definitions herein relating thereto; 15 (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such individual, he or she has made such examination or investigation as is necessary to enable such individual to express an informed opinion as to whether or not such covenant or condition has been complied with; and (d) a statement as to whether, in the opinion of such individual based on his or her knowledge, such condition or covenant has been complied with. SECTION 1.3 FORM OF DOCUMENTS DELIVERED TO AGENT. (a) In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. (b) Any certificate or opinion of an officer of the Company may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company stating that the information with respect to such factual matters is in the possession of the Company unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Agreement, they may, but need not, be consolidated and form one instrument. SECTION 1.4 ACTS OF HOLDERS; RECORD DATES. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Agreement to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered 16 to the Agent and, where it is hereby expressly required, to the Company. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Agreement and (subject to Section 7.1) conclusive in favor of the Agent and the Company, if made in the manner provided in this Section. (b) The fact and date of the execution by any Person of any such instrument or writing may be proved in any manner which the Agent deems sufficient. (c) The ownership of Units shall be proved by the Normal Units Register or the Stripped Units Register, as the case may be. (d) Any request, demand, authorization, direction, notice, consent, waiver or other Act of the Holder of any Certificate shall bind every future Holder of the same Certificate and the Holder of every Certificate issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done, omitted or suffered to be done by the Agent or the Company in reliance thereon, whether or not notation of such action is made upon such Certificate. (e) The Company may set any day as a record date for the purpose of determining the Holders of Outstanding Units entitled to give, make or take any request, demand, authorization, direction, notice, consent, waiver or other action provided or permitted by this Agreement to be given, made or taken by Holders of Units. If any record date is set pursuant to this paragraph, the Holders of the Outstanding Normal Units and the Outstanding Stripped Units, as the case may be, on such record date, and no other Holders, shall be entitled to take the relevant action with respect to the Normal Units or the Stripped Units, as the case may be, whether or not such Holders remain Holders after such record date; provided that no such action shall be effective hereunder unless taken on or prior to the applicable Expiration Date by Holders of the requisite number of Outstanding Units on such record date. Nothing in this paragraph shall be construed to prevent the Company from setting a new record date for any action for which a record date has previously been set pursuant to this paragraph (whereupon the record date previously set shall automatically and with no action by any Person be cancelled and of no effect), and nothing in this paragraph shall be construed to render ineffective any action taken by Holders of the requisite number of Outstanding Units on the date such action is taken. Promptly after any record date is set pursuant to this paragraph, the Company, at its own expense, shall cause notice of such record date, the proposed action by Holders and the applicable Expiration Date to be given to the Agent in writing and to each Holder of Units in the manner set forth in Section 1.6. 17 (f) With respect to any record date set pursuant to this Section, the Company may designate any date as the "Expiration Date" and from time to time may change the Expiration Date to any earlier or later day; provided that no such change shall be effective unless notice of the proposed new Expiration Date is given to the Agent in writing, and to each Holder of Units in the manner set forth in Section 1.6, on or prior to the existing Expiration Date. If an Expiration Date is not designated with respect to any record date set pursuant to this Section, the Company shall be deemed to have initially designated the 180th day after such record date as the Expiration Date with respect thereto, subject to its right to change the Expiration Date as provided in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be later than the 180th day after the applicable record date. SECTION 1.5 NOTICES. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Agreement to be made upon, given or furnished to, or filed with: (a) the Agent by any Holder or by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and personally delivered, mailed, first-class postage prepaid, telecopied or delivered by overnight air courier guaranteeing next day delivery, addressed to and received by the Agent at JPMorgan Chase Bank, Attention: Institutional Trust Services, telecopy: (212) 946-8154, or at any other address furnished in writing by the Agent to the Holders and the Company; or (b) the Company by the Agent or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and personally delivered, mailed, first-class postage prepaid, telecopied or delivered by overnight air courier guaranteeing at least second day delivery, addressed to and received by the Company at Platinum Underwriters Holdings, Ltd. ?, Attention: ?, telecopy: ?, or at any other address furnished in writing to the Agent by the Company; or (c) the Collateral Agent by the Agent, the Company or any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and personally delivered, mailed, first-class postage prepaid, telecopied or delivered by overnight air courier guaranteeing next day delivery, addressed to and received by the Collateral Agent at ?, Attention: ?, telecopy: (212) ?, or at any other address furnished in writing by the Collateral Agent to the Agent, the Company and the Holders; or 18 (d) the Trustee by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing and personally delivered, mailed, first-class postage prepaid, telecopied or delivered by overnight air courier guaranteeing next day delivery, addressed to and received by the Trustee at JPMorgan Chase Bank, Attention: Institutional Trust Services, telecopy: (212) 946-8154, or at any other address furnished in writing by the Trustee to the Company. SECTION 1.6 NOTICE TO HOLDERS; WAIVER. (a) Where this Agreement provides for notice to Holders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to each Holder affected by such event, at its address as it appears in the applicable Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Holders is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such notice with respect to other Holders. Where this Agreement provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders shall be filed with the Agent, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. (b) In case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Agent shall constitute a sufficient notification for every purpose hereunder. SECTION 1.7 EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. SECTION 1.8 SUCCESSORS AND ASSIGNS. All covenants and agreements in this Agreement by the Company shall bind its successors and assigns, whether so expressed or not. SECTION 1.9 SEPARABILITY CLAUSE. In case any provision in this Agreement or in the securities shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions hereof and thereof shall not in any way be affected or impaired thereby. 19 SECTION 1.10 BENEFITS OF AGREEMENT. Nothing in this Agreement or in the Units, express or implied, shall give to any Person, other than the parties hereto and their successors hereunder and, to the extent provided hereby, the Holders, any benefits or any legal or equitable right, remedy or claim under this Agreement. The Holders from time to time shall be beneficiaries of this Agreement and shall be bound by all of the terms and conditions hereof and of the Units evidenced by their Certificates by their acceptance of delivery of such Certificates. SECTION 1.11 GOVERNING LAW. This Agreement and the Units shall be governed by and construed in accordance with the laws of the State of New York. SECTION 1.12 LEGAL HOLIDAYS. (a) In any case where any Payment Date shall not be a Business Day, then (notwithstanding any other provision of this Agreement or the Normal Units Certificates) payments on the Units shall not be made on such date, but such payments shall be made on the next succeeding day which is a Business Day with the same force and effect as if made on such Payment Date, provided that no interest shall accrue or be payable by the Company in respect of such payment for the period from and after any such Payment Date, except that if such next succeeding Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day with the same force and effect as if made on such Payment Date. (b) If any date on which Contract Adjustment Payments are to be made on the Purchase Contracts is not a Business Day, then payment of the Contract Adjustment Payments payable on that date will be made on the next succeeding day which is a Business Day, and no interest or additional payment will be paid in respect of the delay. However, if that Business Day is in the next succeeding calendar year, the payment will be made on the immediately preceding Business Day with the same force and effect as if made on that Payment Date. (c) In any case where the Share Purchase Date shall not be a Business Day, then (notwithstanding any other provision of this Agreement or the Certificates), the Purchase Contracts shall not be performed on such date, but the Purchase Contracts shall be performed on the next succeeding day which is a Business Day with the same force and effect as if performed on the Share Purchase Date. 20 SECTION 1.13 COUNTERPARTS. This Agreement may be executed in any number of counterparts by the parties hereto, each of which, when so executed and delivered, shall be deemed an original, but all such counterparts shall together constitute one and the same instrument. SECTION 1.14 INSPECTION OF AGREEMENT. A copy of this Agreement shall be available at all reasonable times during normal business hours at the Corporate Trust Office for inspection by any Holder. SECTION 1.15 APPOINTMENT OF FINANCIAL INSTITUTION AS AGENT FOR THE COMPANY. The Company may appoint a financial institution (which may be the Collateral Agent) to act as its agent in performing its obligations and in accepting and enforcing performance of the obligations of the Agent and the Holders, under this Agreement and the Purchase Contracts, by giving notice of such appointment in the manner provided in Section 1.5 hereof. Any such appointment shall not relieve the Company in any way from its obligation hereunder. SECTION 1.16 NO WAIVER. No failure on the part of the Company, the Agent, the Collateral Agent, the Securities Intermediary or any of their respective agents to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by the Company, the Agent, the Collateral Agent, the Securities Intermediary or any of their respective agents of any right, power or remedy hereunder preclude any further exercise thereof or the exercise of any right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law. ARTICLE II CERTIFICATE FORMS SECTION 2.1 FORMS OF CERTIFICATES GENERALLY. (a) The Normal Units Certificates (including the form of Purchase Contract forming part of the Normal Units evidenced thereby) shall be in substantially the form set forth in Exhibit A hereto, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange or quotation system on which the Normal Units are listed or quoted for trading or any depositary therefor, or as may, consistently herewith, be 21 determined by the officers of the Company executing such Normal Units Certificates, as evidenced by their execution of the Normal Units Certificates. (b) The definitive Normal Units Certificates shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers of the Company executing such Normal Units Certificates, consistent with the provisions of this Agreement, as evidenced by their execution thereof. (c) The Stripped Units Certificates (including the form of Purchase Contracts forming part of the Stripped Units evidenced thereby) shall be in substantially the form set forth in Exhibit B hereto, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange or the quotation system on which the Stripped Units may be listed or quoted for trading or any depositary therefor, or as may, consistently herewith, be determined by the officers of the Company executing such Stripped Units Certificates, as evidenced by their execution of the Stripped Units Certificates. (d) The definitive Stripped Units Certificates shall be printed, lithographed or engraved on steel engraved borders or may be produced in any other manner, all as determined by the officers of the Company executing such Stripped Units Certificates, consistent with the provisions of this Agreement, as evidenced by their execution thereof. (e) Every Global Certificate authenticated, executed on behalf of the Holders and delivered hereunder shall bear a legend in substantially the following form: "THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED ON THE REVERSE HEREOF) AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT." Unless this Certificate is presented by an authorized representative of the Depositary Trust Company (55 Water Street, New York, New York) to the Company or its agent. 22 SECTION 2.2 FORM OF AGENT'S CERTIFICATE OF AUTHENTICATION. (a) The form of the Agent's certificate of authentication of the Normal Units shall be in substantially the form set forth on the form of the Normal Units Certificates. (b) The form of the Agent's certificate of authentication of the Stripped Units shall be in substantially the form set forth on the form of the Stripped Units Certificates. ARTICLE III THE UNITS SECTION 3.1 TITLE AND TERMS; DENOMINATIONS. (a) The aggregate number of Normal Units and Stripped Units, if any, evidenced by Certificates authenticated, executed on behalf of the Holders and delivered hereunder is limited to 5,000,000 (5,750,000 if the underwriters' option to purchase additional Normal Units pursuant to the Underwriting Agreement is exercised in full), except for Certificates authenticated, executed on behalf of the Holder and delivered upon registration of transfer of, in exchange for, or in lieu of, other Certificates pursuant to Section 3.4, 3.5, 3.10, 3.13, 3.14, 5.9, 5.10 or 8.5. (b) The Certificates shall be issuable only in registered form and only in denominations of a single Unit and any integral multiple thereof. SECTION 3.2 RIGHTS AND OBLIGATIONS EVIDENCED BY THE CERTIFICATES. (a) Each Normal Units Certificate shall evidence the number of Normal Units specified therein, with each such Normal Unit representing the ownership by the Holder thereof of a 1/40 undivided beneficial interest in a Note or the appropriate Treasury Consideration, as the case may be, subject to the Pledge of such interest in the Note or the Treasury Consideration, as the case may be, by such Holder pursuant to the Pledge Agreement, and the rights and obligations of the Holder thereof and the Company under one Purchase Contract. The Agent as attorney-in-fact for, and on behalf of, the Holder of each Normal Unit shall pledge, pursuant to the Pledge Agreement, the interest in the Note or the Treasury Consideration forming a part of such Normal Unit, to the Collateral Agent and grant to the Collateral Agent a security interest in the right, title, and interest of such Holder in such interest in the Note or Treasury Consideration for the benefit of the Company, to secure the obligation of such Holder under the related Purchase Contract to purchase the Common Shares of the Company. Prior to the purchase of Common Shares under each Purchase Contract, such Purchase Contract shall not entitle the Holder of the related Normal Units Certificates to 23 any of the rights of a holder of Common Shares, including, without limitation, the right to vote or receive any dividends or other payments or to consent or to receive notice as a shareholder in respect of the meetings of shareholders or for the election of directors of the Company or for any other matter, or any other rights whatsoever as a shareholder of the Company. (b) Each Stripped Units Certificate shall evidence the number of Stripped Units specified therein, with each such Stripped Unit representing the ownership by the Holder thereof of a 1/40 undivided beneficial interest in a Treasury Security, subject to the Pledge of such interest in such Treasury Security by such Holder pursuant to the Pledge Agreement, and the rights and obligations of the Holder thereof and the Company under one Purchase Contract. Prior to the purchase of Common Shares under each Purchase Contract, such Purchase Contract shall not entitle the Holder of the related Stripped Units Certificates to any of the rights of a holder of Common Shares, including, without limitation, the right to vote or receive any dividends or other payments or to consent or to receive notice as a shareholder in respect of the meetings of shareholders or for the election of directors of the Company or for any other matter, or any other rights whatsoever as a shareholder of the Company. SECTION 3.3 EXECUTION, AUTHENTICATION, DELIVERY AND DATING. (a) Subject to the provisions of Sections 3.13 and 3.14, upon the execution and delivery of this Agreement, and at any time and from time to time thereafter, the Company may deliver Certificates executed by the Company to the Agent for authentication, execution on behalf of the Holders and delivery, together with its Issuer Order for authentication of such Certificates, and the Agent in accordance with such Issuer Order shall authenticate, execute on behalf of the Holders and deliver such Certificates. (b) The Certificates shall be executed on behalf of the Company by the Chief Executive Officer, the Chief Financial Officer, the President, any Vice-President, the Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary (or other officer performing similar functions) of the Company and delivered to the Agent. The signature of any of these officers on the Certificates may be manual or facsimile. (c) Certificates bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Certificates or did not hold such offices at the date of such Certificates. (d) No Purchase Contract evidenced by a Certificate shall be valid until such Certificate has been executed on behalf of the Holder by the manual signature of an authorized officer of the Agent, as such Holder's attorney-in-fact. 24 Such signature by an authorized officer of the Agent shall be conclusive evidence that the Holder of such Certificate has entered into the Purchase Contract or Purchase Contracts evidenced by such Certificate. (e) Each Certificate shall be dated the date of its authentication. (f) No Certificate shall be entitled to any benefit under this Agreement or be valid or obligatory for any purpose unless there appears on such Certificate a certificate of authentication substantially in the form provided for herein executed by an authorized officer of the Agent by manual signature, and such certificate upon any Certificate shall be conclusive evidence, and the only evidence, that such Certificate has been duly authenticated and delivered hereunder. SECTION 3.4 TEMPORARY CERTIFICATES. (a) Pending the preparation of definitive Certificates, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the Holders, and deliver, in lieu of such definitive Certificates, temporary Certificates which are in substantially the form set forth in Exhibit A or Exhibit B hereto, as the case may be, with such letters, numbers or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as may be required by the rules of any securities exchange on which the Normal Units or Stripped Units, as the case may be, are listed or quoted for trading or any depositary transfer, or as may, consistently herewith, be determined by the officers of the Company executing such Certificates, as evidenced by their execution of the Certificates. (b) If temporary Certificates are issued, the Company will cause definitive Certificates to be prepared without unreasonable delay. After the preparation of definitive Certificates, the temporary Certificates shall be exchangeable for definitive Certificates upon surrender of the temporary Certificates at the Corporate Trust Office, at the expense of the Company and without charge to the Holder. Upon surrender for cancellation of any one or more temporary Certificates, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the Holder, and deliver in exchange therefor, one or more definitive Certificates of like tenor and denominations and evidencing a like number of Normal Units or Stripped Units, as the case may be, as the temporary Certificate or Certificates so surrendered. Until so exchanged, the temporary Certificates shall in all respects evidence the same benefits and the same obligations with respect to the Normal Units or Stripped Units, as the case may be, evidenced thereby as definitive Certificates. 25 SECTION 3.5 REGISTRATION; REGISTRATION OF TRANSFER AND EXCHANGE. (a) The Agent shall keep at the Corporate Trust Office a register (the "Normal Units Register") in which, subject to such reasonable regulations as it may prescribe, the Agent shall provide for the registration of Normal Units Certificates and of transfers of Normal Units Certificates (the Agent, in such capacity, the "Normal Units Registrar") and a register (the "Stripped Units Register") in which, subject to such reasonable regulations as it may prescribe, the Agent shall provide for the registration of the Stripped Units Certificates and transfers of Stripped Units Certificates (the Agent, in such capacity, the "Stripped Units Registrar"). (b) Upon surrender for registration of transfer of any Certificate at the Corporate Trust Office, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the designated transferee or transferees, and deliver one or more new Certificates of like tenor and denominations, registered in the name of the designated transferee or transferees, and evidencing a like number of Normal Units or Stripped Units, as the case may be. (c) At the option of the Holder, Certificates may be exchanged for other Certificates, of like tenor and denominations and evidencing a like number of Normal Units or Stripped Units, as the case may be, upon surrender of the Certificates to be exchanged at the Corporate Trust Office. Whenever any Certificates are so surrendered for exchange, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the Holder, and deliver the Certificates which the Holder making the exchange is entitled to receive. (d) All Certificates issued upon any registration of transfer or exchange of a Certificate shall evidence the ownership of the same number of Normal Units or Stripped Units, as the case may be, and be entitled to the same benefits and subject to the same obligations, under this Agreement as the Normal Units or Stripped Units, as the case may be, evidenced by the Certificate surrendered upon such registration of transfer or exchange. (e) Every Certificate presented or surrendered for registration of transfer or for exchange shall (if so required by the Company or the Agent) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Agent duly executed by the Holder thereof or its attorney duly authorized in writing. (f) No service charge shall be made for any registration of transfer or exchange of a Certificate, but the Company and the Agent may require payment from the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange 26 of Certificates, other than any exchanges pursuant to Sections 3.6, 3.9 and 8.5 not involving any transfer. (g) Notwithstanding the foregoing, the Company shall not be obligated to execute and deliver to the Agent, and the Agent shall not be obligated to authenticate, execute on behalf of the Holder and deliver, any Certificate presented or surrendered for registration of transfer or for exchange on or after the Business Day immediately preceding the earlier of the Share Purchase Date or the Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of the applicable conditions specified above in this Section and receipt of appropriate registration or transfer instructions from such Holder, the Agent shall, (i) if the Share Purchase Date has occurred, deliver the Common Shares issuable in respect of the Purchase Contracts forming a part of the Units evidenced by such Certificate, (ii) in the case of Normal Units, if a Termination Event shall have occurred prior to the Share Purchase Date, transfer the Notes or the appropriate Treasury Consideration, as applicable, relating to such Normal Units, or (iii) in the case of Stripped Units, if a Termination Event shall have occurred prior to the Share Purchase Date, transfer the Treasury Securities relating to such Stripped Units, in each case subject to the applicable conditions and in accordance with the applicable provisions of Article V. SECTION 3.6 BOOK-ENTRY INTERESTS. The Certificates, on original issuance, will be issued in the form of one or more fully registered Global Certificates, to be delivered to the Depositary or a nominee or custodian thereof by, or on behalf of, the Company. Such Global Certificate shall initially be registered on the books and records of the Company in the name of Cede & Co., the nominee of the Depositary, and no Beneficial Owner will receive a definitive Certificate representing such Beneficial Owner's interest in such Global Certificate, except as provided in Section 3.9. The Agent shall enter into a customary agreement with the Depositary if so requested by the Company. Unless and until definitive, fully registered Certificates have been issued to Beneficial Owners pursuant to Section 3.9: (a) the provisions of this Section 3.6 shall be in full force and effect; (b) the Company and the Agent shall be entitled to deal with the Clearing Agency for all purposes of this Agreement (including the payment of Contract Adjustment Payments, if any, and receiving approvals, votes or consents 27 hereunder) as the Holder of the Units and the sole holder of the Global Certificate(s) and shall have no obligation to the Beneficial Owners; (c) to the extent that the provisions of this Section 3.6 conflict with any other provisions of this Agreement or any Certificate, the provisions of this Section 3.6 shall control; and (d) the rights of the Beneficial Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Beneficial Owners and the Clearing Agency and/or the Clearing Agency Participants. The Clearing Agency will make book-entry transfers among Clearing Agency Participants and receive and transmit payments of Contract Adjustment Payments to such Clearing Agency Participants. SECTION 3.7 NOTICES TO HOLDERS. Whenever a notice or other communication to the Holders is required to be given under this Agreement, the Company or the Company's agent shall give such notices and communications to the Holders and, with respect to any Units registered in the name of a Clearing Agency or the nominee of a Clearing Agency, the Company or the Company's agent shall, except as set forth herein, have no obligations to the Beneficial Owners. SECTION 3.8 APPOINTMENT OF SUCCESSOR CLEARING AGENCY. If any Clearing Agency elects to discontinue its services as securities depositary with respect to the Units, the Company may, in its sole discretion, appoint a successor Clearing Agency with respect to the Units. SECTION 3.9 DEFINITIVE CERTIFICATES. If (i) a Clearing Agency notifies the Company that it is unwilling or unable to continue its services as securities depositary with respect to the Units and a successor Clearing Agency is not appointed within 90 days after such discontinuance pursuant to Section 3.8, (ii) the Company elects to terminate the book-entry system arrangements through the Clearing Agency with respect to the Units, or (iii) there shall have occurred and be continuing a default by the Company in respect of its obligations under one or more Purchase Contracts, 28 then upon surrender of the Global Certificates representing the Book-Entry Interests with respect to the Units by the Clearing Agency, accompanied by registration instructions, the Company shall cause definitive Certificates to be delivered to Beneficial Owners in accordance with the instructions of the Clearing Agency. The Company shall not be liable for any delay in delivery of such instructions and may conclusively rely on and shall be protected in relying on, such instructions. SECTION 3.10 MUTILATED, DESTROYED, LOST AND STOLEN CERTIFICATES. (a) If any mutilated Certificate is surrendered to the Agent, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the Holder, and deliver in exchange therefor, a new Certificate at the cost of the Holder, evidencing the same number of Normal Units or Stripped Units, as the case may be, and bearing a Certificate number not contemporaneously outstanding. (b) If there shall be delivered to the Company and the Agent (i) evidence to their satisfaction of the destruction, loss or theft of any Certificate, and (ii) such security or indemnity at the cost of the Holder as may be required by them to hold each of them and any agent of either of them harmless, then, in the absence of notice to the Company or to a Responsible Officer of the Agent that such Certificate has been acquired by a bona fide purchaser, the Company shall execute and deliver to the Agent, and the Agent shall authenticate, execute on behalf of the Holder, and deliver to the Holder, in lieu of any such destroyed, lost or stolen Certificate, a new Certificate, evidencing the same number of Normal Units or Stripped Units, as the case may be, and bearing a Certificate number not contemporaneously outstanding. (c) Notwithstanding the foregoing, the Company shall not be obligated to execute and deliver to the Agent, and the Agent shall not be obligated to authenticate, execute on behalf of the Holder, and deliver to the Holder, a Certificate on or after the Business Day immediately preceding the earlier of the Share Purchase Date or the Termination Date. In lieu of delivery of a new Certificate, upon satisfaction of the applicable conditions specified above in this Section and receipt of appropriate registration or transfer instructions from such Holder, the Agent shall (i) if the Share Purchase Date has occurred, deliver the Common Shares issuable in respect of the Purchase Contracts forming a part of the Units evidenced by such Certificate, or (ii) if a Termination Event shall have occurred prior to the Share Purchase Date, transfer the Notes, the appropriate Treasury Consideration or the Treasury Securities, as the case may be, evidenced thereby, in each case subject to the applicable conditions and in accordance with the applicable provisions of Article V. 29 (d) Upon the issuance of any new Certificate under this Section, the Company and the Agent may require the payment by the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Agent) connected therewith. (e) Every new Certificate issued pursuant to this Section in lieu of any destroyed, lost or stolen Certificate shall constitute an original additional contractual obligation of the Company and of the Holder in respect of the Unit evidenced thereby, whether or not the destroyed, lost or stolen Certificate (and the Units evidenced thereby) shall be at any time enforceable by anyone, and shall be entitled to all the benefits and be subject to all the obligations of this Agreement equally and proportionately with any and all other Certificates delivered hereunder. (f) The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Certificates. SECTION 3.11 PERSONS DEEMED OWNERS. (a) Prior to due presentment of a Certificate for registration of transfer, the Company and the Agent, and any agent of the Company or the Agent, may treat the Person in whose name such Certificate is registered on the Register as the owner of the Units evidenced thereby, for the purpose of receiving quarterly payments on the Notes or Treasury Consideration, receiving payment of Contract Adjustment Payments, if any, and any Deferred Contract Adjustment Payments, performance of the Purchase Contracts and for all other purposes whatsoever, whether or not any such payments shall be overdue and notwithstanding any notice to the contrary, and neither the Company nor the Agent, nor any agent of the Company or the Agent, shall be affected by notice to the contrary. (b) Notwithstanding the foregoing, with respect to any Global Certificate, nothing herein shall prevent the Company, the Agent or any agent of the Company or the Agent, from treating the Clearing Agency as the sole Holder of such Global Certificate or from giving effect to any written certification, proxy or other authorization furnished by any Clearing Agency (or its nominee), as a Holder of such Global Certificate, with respect to such Global Certificate or impair, as between such Clearing Agency and owners of beneficial interests in such Global Certificate, the operation of customary practices governing the exercise of rights of such Clearing Agency (or its nominee) as a Holder of such Global Certificate. 30 SECTION 3.12 CANCELLATION. (a) All Certificates surrendered (i) for delivery of Common Shares on or after any Settlement Date; (ii) upon the transfer of Notes or Treasury Consideration or Treasury Securities, as the case may be, after the occurrence of a Termination Event or pursuant to an Early Settlement or Merger Early Settlement, or a Collateral Substitution or an establishment or re-establishment of a Normal Unit; or (iii) upon the registration of a transfer or exchange of a Unit shall, if surrendered to any Person other than the Agent, be delivered to the Agent and, if not already cancelled, shall be promptly cancelled by it. The Company may at any time deliver to the Agent for cancellation any Certificates previously authenticated, executed on behalf of the Holder and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Certificates so delivered shall, upon Issuer Order, be promptly cancelled by the Agent. No Certificates shall be authenticated, executed on behalf of the Holder and delivered in lieu of or in exchange for any Certificates cancelled as provided in this Section, except as expressly permitted by this Agreement. All cancelled Certificates held by the Agent shall be disposed of by the Agent in accordance with its then customary procedures. (b) If the Company or any Affiliate of the Company shall acquire any Certificate, such acquisition shall not operate as a cancellation of such Certificate unless and until such Certificate is delivered to the Agent cancelled or for cancellation. SECTION 3.13 ESTABLISHMENT OF STRIPPED UNITS. (a) A Holder may separate the Pledged Notes or Pledged Treasury Consideration, as applicable, from the related Purchase Contracts in respect of the Normal Units held by such Holder by substituting for such Pledged Notes or Pledged Treasury Consideration, as the case may be, Treasury Securities that will pay at the Share Purchase Date an amount equal to the aggregate Stated Amount of such Normal Units (a "Collateral Substitution"), at any time from and after the date of this Agreement and on or prior to the second Business Day immediately preceding the Share Purchase Date, by (i) depositing with the Collateral Agent Treasury Securities having an aggregate principal amount equal to the aggregate Stated Amount of such Normal Units, and (ii) transferring the related Normal Units to the Agent accompanied by a notice to the Agent, substantially in the form of Exhibit D hereto, stating that the Holder has transferred the relevant amount of Treasury Securities to the Collateral Agent and requesting that the Agent instruct the Collateral Agent to release the Pledged Notes or Pledged Treasury Consideration, as the case may be, underlying such Normal Units, whereupon the Agent shall promptly give such instruction to the Collateral Agent, substantially in the form of Exhibit C hereto. Notwithstanding the foregoing, a Holder may not separate the Pledged Notes or Pledged Treasury Consideration from the related 31 Purchase Contracts in respect of the Normal Units held by such Holder during the periods beginning on the fourth Business Day prior to the first day of any Remarketing Period and ending on the third Business Day after the end of such Remarketing Period. Upon receipt of the Treasury Securities described in clause (i) above and the instruction described in clause (ii) above, in accordance with the terms of the Pledge Agreement, the Collateral Agent will release to the Agent, on behalf of the Holder, such Pledged Notes or Pledged Treasury Consideration from the Pledge, free and clear of the Company's security interest therein, and upon receipt thereof the Agent shall promptly: (x) cancel the related Normal Units; (y) transfer the Pledged Notes or Pledged Treasury Consideration, as the case may be, to the Holder; and (z) authenticate, execute on behalf of such Holder and deliver a Stripped Units Certificate executed by the Company in accordance with Section 3.3 evidencing the same number of Purchase Contracts as were evidenced by the cancelled Normal Units. (b) Holders who elect to separate the Pledged Notes or Pledged Treasury Consideration, as the case may be, from the related Purchase Contract and to substitute Treasury Securities for such Pledged Notes or Pledged Treasury Consideration shall be responsible for any fees or expenses payable to the Collateral Agent for its services as Collateral Agent in respect of the substitution, and the Company shall not be responsible for any such fees or expenses. (c) Holders may make Collateral Substitutions (i) if Treasury Securities are being substituted for Pledged Notes, only in integral multiples of 40 Normal Units, or (ii) if the Collateral Substitutions occur after a successful remarketing of the Notes pursuant to the provisions of Section 5.4 or after a Tax Event Redemption, as the case may be, only in integral multiples of Normal Units such that the Treasury Securities to be deposited and the Treasury Consideration to be released are in integral multiples of $1,000. (d) In the event a Holder making a Collateral Substitution pursuant to this Section 3.13 fails to effect a book-entry transfer of the Normal Units or fails to deliver a Normal Units Certificate to the Agent after depositing Treasury Securities with the Collateral Agent, the Pledged Notes or Pledged Treasury Consideration, as the case may be, constituting a part of such Normal Units, and any distributions on such Pledged Notes or Pledged Treasury Consideration shall be held in the name of the Agent or its nominee in trust for the benefit of such Holder, until such Normal Units are so transferred or the Normal Units Certificate is so delivered, as the case may be, or, with respect to a Normal Units Certificate, such Holder provides evidence satisfactory to the Company and the Agent that 32 such Normal Units Certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the Agent and the Company. (e) Except as described in this Section 3.13, for so long as the Purchase Contract underlying a Normal Unit remains in effect, such Normal Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Normal Unit in respect of the Pledged Note or the Pledged Treasury Consideration, as the case may be, and the Purchase Contract comprising such Normal Unit may be acquired, and may be transferred and exchanged, only as a Normal Unit. SECTION 3.14 REESTABLISHMENT OF NORMAL UNITS. (a) A Holder of Stripped Units may reestablish Normal Units at any time from and after the date of this Agreement and on or prior to the second Business Day immediately preceding the Share Purchase Date, by (i) depositing with the Collateral Agent the Notes or the appropriate Treasury Consideration (identified and calculated by reference to the Treasury Consideration then comprising Normal Units), as the case may be, then comprising such number of Normal Units as is equal to the number of such Stripped Units and (ii) transferring such Stripped Units to the Agent accompanied by a notice to the Agent, substantially in the form of Exhibit D hereto, stating that the Holder has transferred the relevant amount of Notes or the appropriate Treasury Consideration, as the case may be, to the Collateral Agent and requesting that the Agent instruct the Collateral Agent to release the Pledged Treasury Securities underlying such Stripped Unit, whereupon the Agent shall promptly give such instruction to the Collateral Agent, substantially in the form of Exhibit C hereto. Notwithstanding the foregoing, a Holder may not reestablish Normal Units during the periods beginning on the fourth Business Day prior to the first day of any Remarketing Period and ending on the third Business Day after the end of such Remarketing Period. Upon receipt of the Notes or the appropriate Treasury Consideration, as the case may be, described in clause (i) above and the instruction described in clause (ii) above, in accordance with the terms of the Pledge Agreement, the Collateral Agent will release to the Agent, on behalf of the Holder, such Pledged Treasury Securities from the Pledge, free and clear of the Company's security interest therein, and upon receipt thereof the Agent shall promptly: (x) cancel the related Stripped Units; (y) transfer the Pledged Treasury Securities to the Holder; and (z) authenticate, execute on behalf of such Holder and deliver a Normal Units Certificate executed by the Company in accordance with Section 3.3 evidencing the same number of Purchase Contracts as were evidenced by the cancelled Stripped Units. 33 (b) Holders of Stripped Units may reestablish Normal Units (i) if Notes are being substituted for the Pledged Treasury Securities, only in integral multiples of 40 Stripped Units for 40 Normal Units or (ii) if the reestablishment occurs after a successful remarketing of the Notes pursuant to the provisions of Section 5.4 or after a Tax Event Redemption, as the case may be, only in integral multiples of Stripped Units such that the Treasury Consideration to be deposited and the Treasury Securities to be released are in integral multiples of $1,000. (c) Except as provided in this Section 3.14, for so long as the Purchase Contract underlying a Stripped Unit remains in effect, such Stripped Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Stripped Unit in respect of the Pledged Treasury Securities and Purchase Contract comprising such Stripped Unit may be acquired, and may be transferred and exchanged, only as a Stripped Unit. SECTION 3.15 TRANSFER OF COLLATERAL UPON OCCURRENCE OF TERMINATION EVENT. Upon the occurrence of a Termination Event and the transfer to the Agent of the Notes or the appropriate Treasury Consideration or the Treasury Securities, as the case may be, underlying the Normal Units and the Stripped Units pursuant to the terms of the Pledge Agreement, the Agent shall request transfer instructions with respect to such Notes or the appropriate Treasury Consideration or Treasury Securities, as the case may be, from each Holder by written request mailed to such Holder at its address as it appears in the Normal Units Register or the Stripped Units Register, as the case may be. Upon book-entry transfer of the Normal Units or Stripped Units or delivery of a Normal Units Certificate or Stripped Units Certificate to the Agent with such transfer instructions, the Agent shall transfer the Notes, the appropriate Treasury Consideration or the Treasury Securities underlying such Normal Units or Stripped Units, as the case may be, to such Holder by book-entry transfer, or other appropriate procedures, in accordance with such instructions. In the event a Holder of Normal Units or Stripped Units fails to effect such transfer or delivery, the Notes, the appropriate Treasury Consideration or the Treasury Securities, as the case may be, underlying such Normal Units or Stripped Units, as the case may be, and any distributions thereon, shall be held in the name of the Agent or its nominee in trust for the benefit of such Holder, until such Normal Units or Stripped Units are transferred or the Normal Units Certificate or Stripped Units Certificate is surrendered or such Holder provides satisfactory evidence that such Normal Units Certificate or Stripped Units Certificate has been destroyed, lost or stolen, together with any indemnity that may be required by the Agent and the Company. In the case of the Treasury Portfolio or any Treasury Securities, the Agent may dispose of the subject securities for cash and pay the applicable portion of such cash to the Holders in lieu of such Holders' Treasury Securities, where such Holder would otherwise have been entitled to receive less than $1,000 of any such security. 34 SECTION 3.16 NO CONSENT TO ASSUMPTION. Each Holder of a Unit, by acceptance thereof, shall be deemed expressly to have withheld any consent to the assumption (i.e., affirmance), under Section 365 of the Bankruptcy Code or otherwise, of the Purchase Contract by the Company, any receiver, liquidator or person or entity performing similar functions or its trustee in the event that the Company becomes the debtor under the Bankruptcy Code or subject to other similar state or federal law providing for reorganization or liquidation. SECTION 3.17 CUSIP NUMBERS. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Agent shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; PROVIDED that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Agent of any changes in the "CUSIP" numbers. ARTICLE IV THE NOTES SECTION 4.1 PAYMENT OF INTEREST; RIGHTS TO INTEREST PAYMENTS PRESERVED; NOTICE. (a) A payment on any Note or Treasury Consideration, as the case may be, which is paid on any Payment Date shall, subject to receipt thereof by the Agent from the Collateral Agent as provided by the terms of the Pledge Agreement, be paid to the Person in whose name the Normal Units Certificate (or one or more Predecessor Normal Units Certificates) of which such Note or the appropriate Treasury Consideration is a part is registered at the close of business on the Record Date for such Payment Date. (b) Each Normal Units Certificate evidencing Notes delivered under this Agreement upon registration of transfer of or in exchange for or in lieu of any other Normal Units Certificate shall carry the rights to interest accrued and unpaid, and to accrue interest, which were carried by the Notes underlying such other Normal Units Certificate. (c) In the case of any Normal Unit with respect to which Early Settlement of the underlying Purchase Contract is effected on an Early Settlement Date, or with respect to which Merger Early Settlement of the underlying Purchase Contract is effected on a Merger Early Settlement Date, or with respect to which Cash Settlement is effected on the Business Day immediately preceding 35 the Share Purchase Date, or with respect to which a Collateral Substitution is effected, in each case on a date that is after any Record Date and on or prior to the next succeeding Payment Date, payments on the Note or the appropriate Treasury Consideration, as the case may be, underlying such Normal Unit otherwise payable on such Payment Date shall be payable on such Payment Date notwithstanding such Early Settlement, Merger Early Settlement, Cash Settlement or Collateral Substitution, as the case may be, and such payments shall, subject to receipt thereof by the Agent, be payable to the Person in whose name the Normal Units Certificate (or one or more Predecessor Normal Unit Certificates) was registered at the close of business on such Record Date. Except as otherwise expressly provided in the immediately preceding sentence, in the case of any Normal Unit with respect to which Early Settlement, Merger Early Settlement or Cash Settlement of the underlying Purchase Contract is effected, or with respect to which a Collateral Substitution has been effected, payments on the related Notes or payments on the appropriate Treasury Consideration that would otherwise be payable after the applicable Settlement Date or after such Collateral Substitution, as the case may be, shall not be payable hereunder to the Holder of such Normal Unit; provided, that to the extent that such Holder continues to hold the separated Notes that formerly comprised a part of such Holder's Normal Units, such Holder shall be entitled to receive any payments on such separated Notes. SECTION 4.2 NOTICE AND VOTING. Under and subject to the terms of the Pledge Agreement and this Agreement, the Agent will be entitled to exercise the voting and any other consensual rights pertaining to the Pledged Notes but only to the extent instructed by the Holders as described below. Upon receipt of notice of any meeting at which holders of Notes are entitled to vote or upon any solicitation of consents, waivers or proxies of holders of Notes, the Agent shall, as soon as practicable thereafter, mail to the Holders of Normal Units a notice (a) containing such information as is contained in the notice or solicitation, (b) stating that each Holder on the record date set by the Agent therefor (which, to the extent possible, shall be the same date as the record date for determining the holders of Notes entitled to vote) shall be entitled to instruct the Agent as to the exercise of the voting rights pertaining to the Pledged Notes underlying their Normal Units and (c) stating the manner in which such instructions may be given. Upon the written request of any Holder of Normal Units on such record date, the Agent shall endeavor insofar as practicable to vote or cause to be voted, in accordance with the instructions set forth in such request, the maximum number of Pledged Notes as to which any particular voting instructions are received. In the absence of specific instructions from the Holder of a Normal Unit, the Agent shall abstain from voting the Pledged Note underlying such Normal Unit. The Company hereby agrees, if applicable, to solicit Holders of Normal Units to timely instruct the Agent in order to enable the Agent to vote such Pledged Notes. 36 SECTION 4.3 TAX EVENT REDEMPTION. Upon the occurrence of a Tax Event Redemption prior to the successful remarketing of the Notes pursuant to the provisions of Section 5.4, the Company may elect to instruct in writing the Collateral Agent to apply, and upon such written instruction, the Collateral Agent shall apply, out of the aggregate Redemption Price for the Notes that are components of Normal Units, an amount equal to the Tax Event Redemption Principal Amount to purchase on behalf of the Holders of Normal Units the Treasury Portfolio and promptly remit the remaining portion of such Redemption Price to the Agent for payment to the Holders of such Normal Units. The Treasury Portfolio will be substituted for the Pledged Notes, and will be pledged to the Collateral Agent in accordance with the terms of the Pledge Agreement to secure the obligation of each Holder of a Normal Unit to purchase the Common Shares under the Purchase Contract constituting a part of such Normal Unit. Following the occurrence of a Tax Event Redemption prior to a successful remarketing of the Notes pursuant to the provisions of Section 5.4, the Holders of Normal Units and the Collateral Agent shall have such security interests, rights and obligations with respect to the Treasury Portfolio as the Holder of Normal Units and the Collateral Agent had in respect of the Notes, as the case may be, subject to the Pledge thereof as provided in Articles II, III, IV, V and VI of the Pledge Agreement, and any reference herein or in the Certificates to the Note shall be deemed to be a reference to such Treasury Portfolio and any reference herein or in the Certificates to interest on the Notes shall be deemed to be a reference to corresponding distributions on the Treasury Portfolio. The Company may cause to be made in any Normal Unit Certificates thereafter to be issued such change in phraseology and form (but not in substance) as may be appropriate to reflect the substitution of the Treasury Portfolio for Notes as collateral. The Company shall cause notice of any Tax Event Redemption to be mailed, at least 30 calendar days but not more than 60 calendar days before such Tax Event Redemption Date, to each Holder of Notes to be redeemed at its registered address. Upon the occurrence of a Tax Event Redemption after the successful remarketing of the Notes, the Redemption Price will be payable in cash to the holders of the Notes. SECTION 4.4 CONSENT TO TREATMENT FOR TAX PURPOSES. Each Holder of a Normal Unit or a Stripped Unit, by its acceptance thereof, covenants and agrees to treat itself as the owner, for federal, state and local income and franchise tax purposes of (i) the related Notes or the appropriate Treasury Consideration, in the case of the Normal Units, or (ii) the Treasury Securities, in the case of the Stripped Units. Each Holder of a Normal Unit, by its acceptance thereof, further covenants and agrees to treat the Notes as indebtedness of the Company for federal, state and local income and franchise tax purposes. 37 ARTICLE V THE PURCHASE CONTRACTS; THE REMARKETING SECTION 5.1 PURCHASE OF COMMON SHARES. (a) Each Purchase Contract shall, unless an Early Settlement has occurred in accordance with Section 5.9, or a Merger Early Settlement has occurred in accordance with Section 5.10, obligate the Holder of the related Unit to purchase, and the Company to sell, on the Share Purchase Date at a price equal to $25 (the "Purchase Price"), a number of newly issued Common Shares equal to the Settlement Rate unless, on or prior to the Share Purchase Date, there shall have occurred a Termination Event with respect to the Unit of which such Purchase Contract is a part. The "Settlement Rate" is equal to, (i) if the Applicable Market Value (as defined below) is equal to or greater than $- (the "Threshold Appreciation Price"), - Common Shares per Purchase Contract, (ii) if the Applicable Market Value is less than the Threshold Appreciation Price, but is greater than $-, the number of Common Shares per Purchase Contract equal to the Stated Amount of the related Unit divided by the Applicable Market Value, and (iii) if the Applicable Market Value is equal to or less than $-, - Common Shares per Purchase Contract, in each case subject to adjustment as provided in Section 5.6 (and in each case rounded upward or downward to the nearest 1/10,000th of a share). (b) No fractional Common Shares will be issued by the Company with respect to the payment of Contract Adjustment Payments on the Share Purchase Date. In lieu of fractional shares otherwise issuable with respect to such payment of Contract Adjustment Payments, the Holder will be entitled to receive an amount in cash as provided in Section 5.12. (c) The "Applicable Market Value" means the average of the Closing Price per Common Share on each of the 20 consecutive Trading Days ending on the third Trading Day immediately preceding the Share Purchase Date or, in the event of a Cash Merger contemplated by Section 5.10, the Cash Merger Date. The "Closing Price" of the Common Shares on any date of determination means the closing sale price (or, if no closing price is reported, the last reported sale price) of the Common Shares on the New York Stock Exchange (the "NYSE") on such date or, if the Common Shares are not listed for trading on the NYSE on any such date, as reported in the composite transactions for the principal United States securities exchange on which the Common Shares are so listed, or if the Common 38 Shares are not so listed on a United States securities exchange, as reported by The Nasdaq Stock Market, or, if the Common Shares are not so reported, the last quoted bid price for the Common Shares in the over-the-counter market as reported by the National Quotation Bureau or similar organization, or, if such bid price is not available, the market value of the Common Shares on such date as determined by a nationally recognized independent investment banking firm retained for this purpose by the Company. A "Trading Day" means a day on which the Common Shares (A) are not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business and (B) have traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of the Common Shares at the close of business on such day. (d) Each Holder of a Unit, by its acceptance thereof, irrevocably authorizes the Agent to enter into and perform the related Purchase Contract on its behalf as its attorney-in-fact (including the execution of Certificates on behalf of such Holder), agrees to be bound by the terms and provisions thereof, covenants and agrees to perform its obligations under such Purchase Contract, consents to the provisions hereof, irrevocably authorizes the Agent as its attorney-in-fact to enter into and perform the Pledge Agreement on its behalf as its attorney-in-fact, and consents to and agrees to be bound by the Pledge of the Notes, the appropriate Treasury Consideration or the Treasury Securities pursuant to the Pledge Agreement; provided that upon a Termination Event, the rights of the Holder of such Unit under the Purchase Contract may be enforced without regard to any other rights or obligations. Each Holder of a Unit, by its acceptance thereof, further covenants and agrees, that, to the extent and in the manner provided in Section 5.4 and the Pledge Agreement, but subject to the terms thereof, payments in respect of the Pledged Notes, the Pledged Treasury Consideration or the Pledged Treasury Securities to be paid upon settlement of such Holder's obligations to purchase Common Shares under the Purchase Contract, shall be paid on the Share Purchase Date by the Collateral Agent to the Company in satisfaction of such Holder's obligations under such Purchase Contract and such Holder shall acquire no right, title or interest in such payments. (e) Upon registration of transfer of a Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee) under the terms of this Agreement, the Purchase Contracts underlying such Certificate and the Pledge Agreement, and the transferor shall be released from the obligations under this Agreement, the Purchase Contracts underlying the Certificate so transferred and the Pledge Agreement. The Company covenants and agrees, and each Holder of a Certificate, by its acceptance thereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. 39 SECTION 5.2 CONTRACT ADJUSTMENT PAYMENTS. (a) Subject to Section 5.3 herein, the Company shall pay, on each Payment Date, the Contract Adjustment Payments, if any, payable in respect of each Purchase Contract to the Person in whose name a Certificate (or one or more Predecessor Certificates) is registered on the Register at the close of business on the Record Date next preceding such Payment Date in such coin or currency of the United States as at the time of payment shall be legal tender for payments. The Contract Adjustment Payments, if any, will be payable at - or, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person's address as it appears on the Register or by wire transfer to the account designated by a prior written notice by such Person. (b) Upon the occurrence of a Termination Event, the Company's obligation to pay Contract Adjustment Payments (including any accrued Deferred Contract Adjustment Payments), if any, shall cease. (c) Each Certificate delivered under this Agreement upon registration of transfer of or in exchange for or in lieu of any other Certificate (including as a result of a Collateral Substitution or the re-establishment of a Normal Unit) shall carry the rights to Contract Adjustment Payments, if any, accrued and unpaid, and to accrue Contract Adjustment Payments, if any, which were carried by the Purchase Contracts underlying such other Certificates. (d) Subject to Sections 5.4, 5.9 and 5.10, in the case of any Unit with respect to which Early Settlement or Merger Early Settlement of the underlying Purchase Contract is effected on an Early Settlement Date or a Merger Early Settlement Date, respectively, or in respect of which Cash Settlement of the underlying Purchase Contract is effected on the Business Day immediately preceding the Share Purchase Date, or with respect to which a Collateral Substitution or an establishment or re-establishment of a Normal Unit pursuant to Section 3.14 is effected, in each case on a date that is after any Record Date and on or prior to the next succeeding Payment Date, Contract Adjustment Payments on the Purchase Contract underlying such Unit otherwise payable on such Payment Date shall be payable on such Payment Date notwithstanding such Cash Settlement, Early Settlement, Merger Early Settlement, Collateral Substitution or establishment or re-establishment of Normal Units, and such Contract Adjustment Payments shall, subject to receipt thereof by the Agent, be paid to the Person in whose name the Certificate evidencing such Unit (or one or more Predecessor Certificates) was registered at the close of business on such Record Date. Except as otherwise expressly provided in the immediately preceding sentence, in the case of any Unit with respect to which Early Settlement or Merger Early Settlement or Cash Settlement of the underlying Purchase Contract is effected on an Early Settlement Date or Merger Early Settlement Date or on the Business Day immediately preceding the Share Purchase Date, as the case may be, or with 40 respect to which a Collateral Substitution or an establishment or re-establishment of a Normal Unit has been effected, Contract Adjustment Payments, if any, that would otherwise be payable after the Early Settlement Date, or Merger Early Settlement Date, Collateral Substitution or such establishment or re-establishment with respect to such Purchase Contract shall not be payable. (e) The Company's obligations with respect to Contract Adjustment Payments (including any accrued or Deferred Contract Adjustment Payments) will be subordinated and junior in right of payment to the Company's obligations under any Senior Indebtedness. (f) In the event (x) of any payment by, or distribution of assets of, the Company of any kind or character, whether in cash, property or securities, to creditors upon any dissolution, winding-up, liquidation or reorganization of the Company, whether voluntary or involuntary or in bankruptcy, insolvency, receivership or other proceedings, or (y) subject to the provisions of Section 5.2(h) below, that (i) a default shall have occurred and be continuing with respect to the payment of principal, interest or any other monetary amounts due and payable on any Senior Indebtedness and such default shall have continued beyond the period of grace, if any, specified in the instrument evidencing such Senior Indebtedness (and the Agent shall have received written notice thereof from the Company or one or more holders of Senior Indebtedness or their representative or representatives or the trustee or trustees under any indenture pursuant to which any such Senior Indebtedness may have been issued), or (ii) the maturity of any Senior Indebtedness shall have been accelerated because of a default in respect of such Senior Indebtedness (and the Agent shall have received written notice thereof from the Company or one or more holders of Senior Indebtedness or their representative or representatives or the trustee or trustees under any indenture pursuant to which any such Senior Indebtedness may have been issued), then: (i) the holders of all Senior Indebtedness shall first be entitled to receive, in the case of clause (x) above, payment in full of all amounts due or to become due upon all Senior Indebtedness and, in the case of subclauses (i) and (ii) of clause (y) above, payment of all amounts due thereon, or provision shall be made for such payment in money or money's worth, before the Holders of any of the Units are entitled to receive any Contract Adjustment Payments on the Purchase Contracts underlying the Securities; (ii) any payment by, or distribution of assets of, the Company of any kind or character, whether in cash, property or securities, to which the Holders of any of the Securities would be entitled except for the provisions of Sections 5.2(e) through (q), including any such payment or distribution which may be payable or deliverable by reason of the payment 41 of any other indebtedness of the Company being subordinated to the payment of such Contract Adjustment Payments on the Purchase Contracts underlying the Securities, shall be paid or delivered by the Person making such payment or distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders of such Senior Indebtedness or their representative or representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of such Senior Indebtedness may have been issued, ratably according to the aggregate amounts remaining unpaid on account of such Senior Indebtedness held or represented by each, to the extent necessary to make payment in full of all Senior Indebtedness remaining unpaid after giving effect to any concurrent payment or distribution (or provision therefor) to the holders of such Senior Indebtedness, before any payment or distribution is made of such Contract Adjustment Payments to the Holders of such Securities; and (iii) in the event that, notwithstanding the foregoing, any payment by, or distribution of assets of, the Company of any kind or character, whether in cash, property or securities, including any such payment or distribution which may be payable or deliverable by reason of the payment of any other indebtedness of the Company being subordinated to the payment of Contract Adjustment Payments on the Purchase Contracts underlying the Securities, shall be received by the Agent or the Holders of any of the Securities when such payment or distribution is prohibited pursuant to Sections 5.2(e) through (q), such payment or distribution shall be paid over to the holders of such Senior Indebtedness or their representative or representatives or to the trustee or trustees under any indenture pursuant to which any instruments evidencing any such Senior Indebtedness may have been issued, ratably as aforesaid, for application to the payment of all Senior Indebtedness remaining unpaid until all such Senior Indebtedness shall have been paid in full, after giving effect to any concurrent payment or distribution (or provision therefor) to the holders of such Senior Indebtedness. (g) For purposes of Sections 5.2(e) through (q), the words "cash, property or securities" shall not be deemed to include shares of stock of the Company as reorganized or readjusted, or securities of the Company or any other Person provided for by a plan of reorganization or readjustment, the payment of which is subordinated at least to the extent provided in Sections 5.2(e) through (q) with respect to such Contract Adjustment Payments on the Securities to the payment of all Senior Indebtedness which may at the time be outstanding; PROVIDED that (i) the indebtedness or guarantee of indebtedness, as the case may be, that constitutes Senior Indebtedness is assumed by the Person, if any, resulting from any such reorganization or readjustment, and (ii) the rights of the holders of 42 the Senior Indebtedness are not, without the consent of each such holder adversely affected thereby, altered by such reorganization or readjustment. (h) Any failure by the Company to make any payment on or perform any other obligation under Senior Indebtedness, other than any indebtedness incurred by the Company or assumed or guaranteed, directly or indirectly, by the Company for money borrowed (or any deferral, renewal, extension or refunding thereof) or any indebtedness or obligation as to which the provisions of Sections 5.2(e) through (g) shall have been waived by the Company in the instrument or instruments by which the Company incurred, assumed, guaranteed or otherwise created such indebtedness or obligation, shall not be deemed a default or event of default if (i) the Company shall be disputing its obligation to make such payment or perform such obligation and (ii) either (A) no final judgment relating to such dispute shall have been issued against the Company which is in full force and effect and is not subject to further review, including a judgment that has become final by reason of the expiration of the time within which a party may seek further appeal or review, and (B) in the event a judgment that is subject to further review or appeal has been issued, the Company shall in good faith be prosecuting an appeal or other proceeding for review and a stay of execution shall have been obtained pending such appeal or review. (i) Subject to the payment in full of all Senior Indebtedness, the Holders of the Securities shall be subrogated (equally and ratably with the holders of all obligations of the Company which by their express terms are subordinated to Senior Indebtedness of the Company to the same extent as payment of the Contract Adjustment Payments in respect of the Purchase Contracts underlying the Securities is subordinated and which are entitled to like rights of subrogation) to the rights of the holders of Senior Indebtedness to receive payments or distributions of cash, property or securities of the Company applicable to the Senior Indebtedness until all such Contract Adjustment Payments owing on the Securities shall be paid in full, and as between the Company, its creditors other than holders of such Senior Indebtedness and the Holders, no such payment or distribution made to the holders of Senior Indebtedness by virtue of Sections 5.2(e) through (q) that otherwise would have been made to the Holders shall be deemed to be a payment by the Company on account of such Senior Indebtedness, it being understood that the provisions of Sections 5.2(e) through (q) are and are intended solely for the purpose of defining the relative rights of the Holders, on the one hand, and the holders of Senior Indebtedness, on the other hand. (j) Nothing contained in Sections 5.2(e) through (q) or elsewhere in this Agreement or in the Securities is intended to or shall impair, as among the Company, its creditors other than the holders of Senior Indebtedness and the Holders, the obligation of the Company, which is absolute and unconditional, to pay to the Holders such Contract Adjustment Payments on the Securities as and 43 when the same shall become due and payable in accordance with their terms, or is intended to or shall affect the relative rights of the Holders and creditors of the Company other than the holders of Senior Indebtedness, nor shall anything herein or therein prevent the Agent or any Holder from exercising all remedies otherwise permitted by applicable law upon default under this Agreement, subject to the rights, if any, under these Sections 5.2(e) through (q), of the holders of Senior Indebtedness in respect of cash, property or securities of the Company received upon the exercise of any such remedy. (k) Upon payment or distribution of assets of the Company referred to in these Sections 5.2(e) through (q), the Agent and the Holders shall be entitled to rely upon any order or decree made by any court of competent jurisdiction in which any such dissolution, winding up, liquidation or reorganization proceeding affecting the affairs of the Company is pending or upon a certificate of the trustee in bankruptcy, receiver, assignee for the benefit of creditors, liquidating trustee or agent or other Person making any payment or distribution, delivered to the Agent or to the Holders, for the purpose of ascertaining the Persons entitled to participate in such payment or distribution, the holders of the Senior Indebtedness and other indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to these Sections 5.2(e) through (q). (l) The Agent shall be entitled to rely on the delivery to it of a written notice by a Person representing himself to be a holder of Senior Indebtedness (or a trustee or representative on behalf of such holder) to establish that such notice has been given by a holder of Senior Indebtedness or a trustee or representative on behalf of any such holder or holders. In the event that the Agent determines in good faith that further evidence is required with respect to the right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to Sections 5.2(e) through (q), the Agent may request such Person to furnish evidence to the reasonable satisfaction of the Agent as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled to participate in such payment or distribution and any other facts pertinent to the rights of such Person under Sections 5.2(e) through (q), and, if such evidence is not furnished, the Agent may defer payment to such Person pending judicial determination as to the right of such Person to receive such payment. (m) Nothing contained in Sections 5.2(e) through (q) shall affect the obligations of the Company to make, or prevent the Company from making, payment of the Contract Adjustment Payments, except as otherwise provided in these Sections 5.2(e) through (q). (n) Each Holder of Securities, by his acceptance thereof, authorizes and directs the Agent on his, her or its behalf to take such action as may be necessary or appropriate to effectuate the subordination provided in Sections 44 5.2(e) through (q) and appoints the Agent his, her or its attorney-in-fact, as the case may be, for any and all such purposes. (o) The Company shall give prompt written notice to the Agent of any fact known to the Company that would prohibit the making of any payment of moneys to or by the Agent in respect of the Securities pursuant to the provisions of this Section 5.2. Notwithstanding the provisions of Sections 5.2(e) through (q) or any other provisions of this Agreement, the Agent shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment of moneys to or by the Agent, or the taking of any other action by the Agent, unless and until the Agent shall have received written notice thereof mailed or delivered to a Responsible Officer of the Agent from the Company, any Holder, any paying agent or the holder or representative of any Senior Indebtedness; PROVIDED that if at least two Business Days prior to the date upon which by the terms hereof any such moneys may become payable for any purpose, the Agent shall not have received with respect to such moneys the notice provided for in this Section 5.2, then, anything herein contained to the contrary notwithstanding, the Agent shall have full power and authority to receive such moneys and to apply the same to the purpose for which they were received and shall not be affected by any notice to the contrary that may be received by it within two Business Days prior to or on or after such date. (p) The Agent in its individual capacity shall be entitled to all the rights set forth in this Section 5.2 with respect to any Senior Indebtedness at the time held by it, to the same extent as any other holder of Senior Indebtedness and nothing in this Agreement shall deprive the Agent of any of its rights as such holder. (q) No right of any present or future holder of any Senior Indebtedness to enforce the subordination herein shall at any time or in any way be prejudiced or impaired by any act or failure to act on the part of the Company or by any noncompliance by the Company with the terms, provisions and covenants of this Agreement, regardless of any knowledge thereof which any such holder may have or be otherwise charged with. (r) Nothing in this Section 5.2 shall apply to claims of, or payments to, the Agent under or pursuant to Section 7.7 hereof. With respect to the holders of Senior Indebtedness, (i) the duties and obligations of the Agent shall be determined solely by the express provisions of this Agreement; (ii) the Agent shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Agreement; (iii) no implied covenants or obligations shall be read into this Agreement against the Agent; and (iv) the Agent shall not be deemed to be a fiduciary as to such holders. 45 SECTION 5.3 DEFERRAL OF CONTRACT ADJUSTMENT PAYMENTS. (a) The Company shall have the right, at any time prior to the Share Purchase Date, to defer the payment of any or all of the Contract Adjustment Payments otherwise payable on any Payment Date, but only if the Company shall give the Holders and the Agent written notice of its election to defer each such deferred Contract Adjustment Payment (specifying the amount to be deferred) at least ten Business Days prior to the earlier of (i) the next succeeding Payment Date or (ii) the date the Company is required to give notice of the Record Date or Payment Date with respect to payment of such Contract Adjustment Payments to the NYSE or other applicable self-regulatory organization or to Holders of the Units, but in any event not less than one Business Day prior to such Record Date. Any Contract Adjustment Payments so deferred shall, to the extent permitted by law, accrue additional Contract Adjustment Payments thereon at the rate of -% per year (computed on the basis of a 360-day year of twelve 30-day months), compounding on each succeeding Payment Date, until paid in full (such deferred installments of Contract Adjustment Payments, if any, together with the additional Contract Adjustment Payments, if any, accrued thereon, being referred to herein as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment Payments, if any, shall be due on the next succeeding Payment Date except to the extent that payment is deferred pursuant to this Section 5.3. No Contract Adjustment Payments may be deferred to a date that is after the Settlement Date and no such deferral period may end other than on a Payment Date. If the Purchase Contracts are terminated upon the occurrence of a Termination Event, the Holder's right to receive Contract Adjustment Payments, if any, and Deferred Contract Adjustment Payments, will terminate. (b) In the event that the Company elects to defer the payment of Contract Adjustment Payments on the Purchase Contracts until a Payment Date prior to the Share Purchase Date, then all Deferred Contract Adjustment Payments, if any, shall be payable to the registered Holders as of the close of business on the Record Date immediately preceding such Payment Date. (c) In the event that the Company elects to defer the payment of Contract Adjustment Payments on the Purchase Contracts until the Share Purchase Date, each Holder will receive on the Share Purchase Date in lieu of a cash payment a number of Common Shares (in addition to a number of Common Shares equal to the Settlement Rate) equal to (A) the aggregate amount of Deferred Contract Adjustment Payments payable to such Holder (net of any required tax withholding on such Deferred Contract Adjustment Payment, which shall be remitted to the appropriate taxing jurisdiction) divided by (B) the Applicable Market Value. (d) No fractional Common Shares will be issued by the Company with respect to the payment of Deferred Contract Adjustment Payments on the Share 46 Purchase Date. In lieu of fractional shares otherwise issuable with respect to such payment of Deferred Contract Adjustment Payments, the Holder will be entitled to receive an amount in cash as provided in Section 5.12. (e) In the event the Company exercises its option to defer the payment of Contract Adjustment Payments then, until the Deferred Contract Adjustment Payments have been paid, the Company shall not declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of the Company's Capital Stock other than: (i) purchases, redemptions or acquisitions of shares of Capital Stock of the Company in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or agents or a share purchase or dividend reinvestment plan, or the satisfaction by the Company of its obligations pursuant to any contract or security outstanding on the date the Company exercises its right to defer the payment of Contract Adjustment Payments; (ii) as a result of a reclassification of the Company's Capital Stock or the exchange or conversion of one class or series of the Company's Capital Stock for another class or series of the Company's Capital Stock; (iii) the purchase of fractional interests of the Company's Capital Stock pursuant to the conversion or exchange provisions of such Capital Stock or the security being converted or exchanged; (iv) dividends or distributions in the Company's Capital Stock (or rights to acquire the Company's Capital Stock) or repurchases, acquisitions or redemptions of the Company's Capital Stock in exchange for or out of the net cash proceeds of the sale of the Company's Capital Stock (or securities convertible into or exchangeable for shares of the Company's Capital Stock); or (v) redemptions, exchanges or repurchases of any rights outstanding under a shareholder rights plan or the declaration or payment thereunder of a dividend or distribution of or with respect to rights in the future. SECTION 5.4 PAYMENT OF PURCHASE PRICE; REMARKETING. (a) Unless a Tax Event Redemption, successful remarketing of the Notes pursuant to the provisions of this Section 5.4 or Termination Event has occurred, or a Holder of a Unit has settled the underlying Purchase Contract through an Early Settlement pursuant to Section 5.9 or a Merger Early Settlement 47 pursuant to Section 5.10, each Holder of a Normal Unit may pay in cash ("Cash Settlement") the Purchase Price for the Common Shares to be purchased pursuant to a Purchase Contract if such Holder notifies the Agent by use of a notice in substantially the form of Exhibit E hereto of its intention to make a Cash Settlement. Such notice shall be made on or prior to 5:00 p.m., New York City time, on the seventh Business Day immediately preceding the Share Purchase Date. The Agent shall promptly notify the Collateral Agent of the receipt of such a notice from a Holder intending to make a Cash Settlement. (i) A Holder of a Normal Unit who has so notified the Agent of its intention to make a Cash Settlement is required to pay the Purchase Price to the Collateral Agent prior to 11:00 a.m., New York City time, on the Business Day immediately preceding the Share Purchase Date in lawful money of the United States by certified or cashiers' check or wire transfer, in each case in immediately available funds payable to or upon the order of the Company. Any cash received by the Collateral Agent will be paid to the Company on the Share Purchase Date in settlement of the Purchase Contract in accordance with the terms of this Agreement and the Pledge Agreement. (ii) If a Holder of a Normal Unit fails to notify the Agent of its intention to make a Cash Settlement in accordance with paragraph (a)(i) above, such failure shall constitute an event of default and the Holder shall be deemed to have consented to the disposition of the Pledged Notes pursuant to the remarketing as described in paragraph (b) below. If a Holder of a Normal Unit does notify the Agent as provided in paragraph (a)(i) above of its intention to pay the Purchase Price in cash, but fails to make such payment as required by paragraph (a)(i) above, such failure shall also constitute an event of default; however, the Notes of such a Holder will not be remarketed but instead the Collateral Agent, for the benefit of the Company, will exercise its rights as a secured party with respect to such Notes, including but not limited to those rights specified in subsection (b)(iii) below. (b) (i) Unless a Tax Event Redemption has occurred, the Company and Platinum Underwriters Finance shall engage a nationally recognized investment bank (the "Remarketing Agent") pursuant to a Remarketing Agreement to be mutually agreed on by the Company, Platinum Underwriters Finance, the Agent and the Remarketing Agent, but providing for remarketing procedures substantially as set forth below to sell the Notes of Holders of Normal Units, other than Holders that have elected not to participate in the remarketing pursuant to the procedures set forth in clause (iv) below, and holders of Separate Notes that have elected to participate in the remarketing pursuant to the procedures set forth in Section 4.5(d) of the Pledge Agreement. On the seventh Business Day prior to first day of each Remarketing Period, the Agent shall give 48 Holders of Normal Units and holders of Separate Notes notice of the remarketing in a daily newspaper in the English language of general circulation in The City of New York (which is expected to be THE WALL STREET JOURNAL) including the specific U.S. Treasury security or securities (including the CUSIP number and/or the principal terms of such Treasury security or securities) described in clause (iv) below, that must be delivered by Holders of Normal Units that elect not to participate in the remarketing pursuant to clause (iv) below no later than 10:00 a.m., New York City time, on the fourth Business Day preceding the first day of such Remarketing Period. The Company or the Agent, at the Company's request, shall request not later than seven nor more than 15 calendar days prior to any Remarketing Period, that the Clearing Agency notify the Clearing Agency participants of such Remarketing Period. The Agent shall notify, by 10:00 a.m., New York City time, on the third Business Day preceding the first day of such Remarketing Period, the Remarketing Agent and the Collateral Agent of the aggregate number of Notes of Normal Unit Holders to be remarketed. On the third Business Day preceding the first day of such Remarketing Period, no later than by 10:00 a.m., New York City time, pursuant to the terms of the Pledge Agreement, the Custodial Agent will notify the Remarketing Agent of the aggregate number of Separate Notes to be remarketed. No later than 10:00 a.m., New York City time, on the Business Day immediately preceding the first day of such Remarketing Period, the Collateral Agent and the Custodial Agent, pursuant to the terms of the Pledge Agreement, will deliver for remarketing to the Remarketing Agent all Notes to be remarketed. Upon receipt of such notice from the Agent and the Custodial Agent and such Notes from the Collateral Agent and the Custodial Agent, the Remarketing Agent will, on the Remarketing Date, use its commercially reasonable best efforts to sell such Notes on such date at an aggregate price equal to at least 100.25% of the Remarketing Value. The Remarketing Agent will use the proceeds from a successful remarketing to purchase the appropriate U.S. Treasury securities (the "Agent-purchased Treasury Consideration") with the CUSIP numbers, if any, selected by the Remarketing Agent, described in clauses (i)(1) and (ii)(1) of the definition of Remarketing Value related to the Notes of Holders of Normal Units that were remarketed. On or prior to the third Business Day following the Remarketing Date or any Subsequent Remarketing Date on which the Notes are successfully remarketed, the Remarketing Agent shall deliver such Agent-purchased Treasury Consideration to the Agent, which shall thereupon deliver such Agent-purchased Treasury Consideration to the Collateral Agent. The Collateral Agent, for the benefit of the Company, will thereupon apply such Agent-purchased Treasury Consideration, in accordance with the Pledge Agreement, to secure such Holders' obligations under the Purchase Contracts. In the event of a successful remarketing pursuant to this Section 5.4, the Remarketing Agent will deduct as a remarketing fee an amount not exceeding 25 basis points (.25%) of the total proceeds from the remarketing (the "Remarketing Fee"). The Remarketing Agent will remit (1) the portion of the proceeds from the remarketing attributable to the Separate Notes to the holders of Separate Notes that were remarketed and (2) the 49 remaining portion of the proceeds, less those proceeds used to purchase the Agent-purchased Treasury Consideration, to the Agent for the benefit of the Holders of the Normal Units that were remarketed, all determined on a pro rata basis, in each case, on or prior to the third Business Day following the Remarketing Date or any Subsequent Remarketing Date on which the Notes were successfully remarketed. Holders whose Notes are so remarketed will not otherwise be responsible for the payment of any Remarketing Fee in connection therewith. (ii) If, in spite of using its commercially reasonable best efforts, the Remarketing Agent cannot remarket the Notes included in the remarketing at a price equal to at least 100.25% of the Remarketing Value on the Remarketing Date, the Remarketing Agent will attempt to establish a Remarketing Rate meeting these requirements on each of the two immediately following Business Days. If the Remarketing Agent cannot establish a Remarketing Rate meeting these requirements on either of those days, the remarketing in such period will be deemed to have failed (a "Failed Remarketing"). In the event of a Failed Remarketing with respect to the first Remarketing Period, the Remarketing Agent will undertake the procedures set forth in clause (i) above in each of the three Business Days in the second Remarketing Period. In the event of a Failed Remarketing in the second Remarketing Period, the Remarketing Agent will further attempt to establish such a Remarketing Rate on the third Business Day immediately preceding the Share Purchase Date. If, in spite of using its commercially reasonable best efforts, the Remarketing Agent fails to remarket the Notes underlying the Normal Units at a price equal to at least 100.25% of the Remarketing Value in accordance with the terms of the Pledge Agreement by 4:00 p.m., New York City time, on the third Business Day immediately preceding the Share Purchase Date, the "Last Failed Remarketing" will be deemed to have occurred. Each remarketing attempt that takes place in accordance with this Section 5.4 after the Remarketing Date is referred to herein as a "Subsequent Remarketing." Within three Business Days following the date of a Failed Remarketing or the Last Failed Remarketing, as the case may be, the Remarketing Agent shall return any Notes delivered to it to the Collateral Agent and the Custodial Agent, as applicable. The Collateral Agent, for the benefit of the Company, may exercise its rights as a secured party with respect to such Notes, including those actions specified in (b) (iii) below; provided that if upon the Last Failed Remarketing, the Collateral Agent exercises such rights for the benefit of the Company with respect to such Notes, any accumulated and unpaid interest on such Notes will become payable by Platinum Underwriters Finance to the Agent for payment to the Holders of the Normal Units to which such Notes relate. Such payment will be made by Platinum Underwriters Finance on or prior to 11:00 a.m., New York City time, on the Share Purchase Date in lawful money of the United 50 States by certified or cashier's check or wire transfer in immediately available funds payable to or upon the order of the Agent. The Company will cause a notice of any Failed Remarketing and of the Last Failed Remarketing to be published on the fourth Business Day following each Failed Remarketing and the Last Failed Remarketing, as the case may be, in a daily newspaper in the English language of general circulation in The City of New York, which shall be THE WALL STREET JOURNAL, if such newspaper is then so published. The company will also release this information by means of Bloomberg and Reuters newswire. (iii) With respect to any Notes which constitute part of Normal Units which are subject to the Last Failed Remarketing, the Collateral Agent for the benefit of the Company reserves all of its rights as a secured party with respect thereto and, subject to applicable law and Section 5.4 (e) below, may, among other things, (A) retain such Notes in full satisfaction of the Holders' obligations under the Purchase Contracts or (B) sell such Notes in one or more public or private sales or otherwise. (iv) A Holder of Normal Units may elect not to participate in the remarketing and retain the Notes underlying such Units by notifying the Agent of such election and delivering the specific U.S. Treasury security or securities (including the CUSIP number and/or the principal terms of such security or securities) identified by the Agent (as having been based solely on the identification that the Remarketing Agent shall have advised the Agent) that constitute the U.S. Treasury securities described in clauses (i) and (ii) of the definition of Remarketing Value relating to the retained Notes (as if only such Notes were being remarketed) (the "Opt-out Treasury Consideration") to the Agent not later than 10:00 a.m., New York City time, on the fourth Business Day prior to the beginning of any Remarketing Period. Upon receipt thereof by the Agent, the Agent shall deliver such Opt-out Treasury Consideration to the Collateral Agent, which will, for the benefit of the Company, thereupon apply such Opt-out Treasury Consideration to secure such Holder's obligations under the Purchase Contracts. On the Business Day immediately preceding the first day of a Remarketing Period, the Collateral Agent, pursuant to the terms of the Pledge Agreement, will deliver the Pledged Notes of such Holder to the Agent. Within three Business Days following the last day of such Remarketing Period, (A) if the remarketing was successful, the Agent shall distribute such Notes to the Holders thereof, and (B) if there was a Failed Remarketing on such date, the Agent will deliver such Notes to the Collateral Agent, which will, for the benefit of the Company, thereupon apply such Notes to secure such Holders' obligations under the Purchase Contract and return the Opt-out Treasury Consideration delivered by such Holders to such Holders. A Holder that does not so deliver the Opt-out Treasury Consideration or does 51 not so notify the agent of its election not to participate in the remarketing pursuant to this clause (iv) shall be deemed to have elected to participate in the remarketing. (c) Upon the maturity of the Pledged Treasury Securities underlying the Stripped Units and, in the event of a successful remarketing or a Tax Event Redemption, the Pledged Treasury Consideration underlying the Normal Units, on the Share Purchase Date, the Collateral Agent shall remit to the Company an amount equal to the aggregate Purchase Price applicable to such Units, as payment for the Common Shares issuable upon settlement thereof without needing to receive any instructions from the Holders of such Units. In the event the payments in respect of the Pledged Treasury Securities or the Pledged Treasury Consideration underlying a Unit is in excess of the Purchase Price of the Purchase Contract being settled thereby, the Collateral Agent will distribute such excess to the Agent for the benefit of the Holder of such Unit when received. (d) Any distribution to Holders of excess funds and interest described in Section 5.4 (b) and (c) above shall be payable at the Corporate Trust Office or, at the option of the Holder or the holder of Separate Notes, as applicable, by check mailed to the address of the Person entitled thereto at such address as it appears on the Register or by wire transfer to an account maintained in the United States specified by the Holder or the holder of Separate Notes, as applicable. (e) The obligations of each Holder to pay the Purchase Price are non-recourse obligations and are payable solely out of the proceeds of any Collateral pledged to secure the obligations of the Holders (except to the extent paid by Cash Settlement, Early Settlement or Merger Early Settlement) and in no event will Holders be liable for any deficiency between such payments and the Purchase Price. (f) Notwithstanding anything to the contrary herein, the Company shall not be obligated to issue any Common Shares in respect of a Purchase Contract or deliver any certificates therefor to the Holder of the related Unit unless the Company shall have received payment in full of the aggregate Purchase Price for the Common Shares to be purchased thereunder by such Holder in the manner herein set forth. SECTION 5.5 ISSUANCE OF COMMON SHARES. Unless a Termination Event shall have occurred on or prior to the Share Purchase Date or an Early Settlement or a Merger Early Settlement shall have occurred, on the Share Purchase Date, upon the Company's receipt of payment in full of the Purchase Price for the Common Shares purchased by the Holders pursuant to the foregoing provisions of this Article and subject to Section 5.6(b), the Company shall issue and deposit with the Agent, for the benefit of the Holders of the Outstanding Units, one or more certificates representing the newly issued Common Shares, registered in the 52 name of the Agent (or its nominee) as custodian for the Holders (such certificates for Common Shares, together with any dividends or distributions for which both a record date and payment date for such dividend or distribution has occurred after the Share Purchase Date, being hereinafter referred to as the "Purchase Contract Settlement Fund"), to which the Holders are entitled hereunder. Subject to the foregoing, upon surrender of a Certificate to the Agent on or after the Share Purchase Date, together with settlement instructions thereon duly completed and executed, the Holder of such Certificate shall be entitled to receive in exchange therefor a certificate representing that number of whole Common Shares which such Holder is entitled to receive pursuant to the provisions of this Article V (after taking into account all Units then held by such Holder) together with cash in lieu of fractional shares as provided in Section 5.12 and any dividends or distributions with respect to such shares constituting part of the Purchase Contract Settlement Fund, but without any interest thereon, and the Certificate so surrendered shall forthwith be cancelled. Such shares shall be registered in the name of the Holder or the Holder's designee as specified in the settlement instructions provided by the Holder to the Agent. If any Common Shares issued in respect of a Purchase Contract are to be registered to a Person other than the Person in whose name the Certificate evidencing such Purchase Contract is registered, no such registration shall be made unless the Person requesting such registration has paid any transfer and other taxes required by reason of such registration in a name other than that of the registered Holder of such Certificate or has established to the satisfaction of the Company that such tax either has been paid or is not payable. SECTION 5.6 ADJUSTMENT OF SETTLEMENT RATE. (a) Adjustments for Dividends, Distributions, Stock Splits, Etc. (1) STOCK DIVIDENDS. In case the Company shall pay or make a dividend or other distribution on the Common Shares in Common Shares, the Settlement Rate, as in effect at the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such dividend or other distribution shall be increased by dividing such Settlement Rate by a fraction of which the numerator shall be the number of Common Shares outstanding at the close of business on the date fixed for such determination and the denominator shall be the sum of such number of Common Shares and the total number of Common Shares constituting such dividend or other distribution, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this paragraph (1), the number of Common Shares at the time outstanding shall not include shares held in the treasury of the Company but shall include any shares issuable in respect of any scrip certificates issued in lieu of fractions of Common Shares. The Company will not pay any dividend or make any distribution on Common Shares held in the treasury of the Company. 53 (2) SHARE PURCHASE RIGHTS. In case the Company shall issue rights, options or warrants to all holders of its Common Shares (that are not available on an equivalent basis to Holders of the Units upon settlement of the Purchase Contracts underlying such Units) entitling them, for a period expiring within 45 days after the record date for the determination of shareholders entitled to receive such rights, options or warrants, to subscribe for or purchase Common Shares at a price per share less than the Current Market Price per Common Share on the date fixed for the determination of shareholders entitled to receive such rights, options or warrants (other than pursuant to a dividend reinvestment, share purchase or similar plan), the Settlement Rate in effect at the opening of business on the day following the date fixed for such determination shall be increased by dividing such Settlement Rate by a fraction, the numerator of which shall be the number of Common Shares outstanding at the close of business on the date fixed for such determination plus the number of Common Shares which the aggregate of the offering price of the total number of Common Shares so offered for subscription or purchase would purchase at such Current Market Price per Common Share and the denominator of which shall be the number of Common Shares outstanding at the close of business on the date fixed for such determination plus the number of Common Shares so offered for subscription or purchase, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this paragraph (2), the number of Common Shares at any time outstanding shall not include shares held in the treasury of the Company but shall include any shares issuable in respect of any scrip certificates issued in lieu of fractions of Common Shares. The Company shall not issue any such rights, options or warrants in respect of Common Shares held in the treasury of the Company. (3) STOCK SPLITS; REVERSE SPLITS. In case outstanding Common Shares shall be subdivided or split into a greater number of Common Shares, the Settlement Rate in effect at the opening of business on the day following the day upon which such subdivision or split becomes effective shall be proportionately increased, and, conversely, in case outstanding Common Shares shall each be combined into a smaller number of Common Shares, the Settlement Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision, split or combination becomes effective. (4) DEBT OR ASSET DISTRIBUTIONS. (i) In case the Company shall, by dividend or otherwise, distribute to all holders of its Common Shares 54 evidences of its indebtedness or assets (including securities, but excluding any rights or warrants referred to in paragraph (2) of this Section, shares of capital stock of any class or series, or similar equity interests, of or relating to a subsidiary or other business unit in the case of a Spin-Off referred to in the next paragraph, or any dividend or distribution paid exclusively in cash and any dividend or distribution referred to in paragraph (1) of this Section), the Settlement Rate shall be adjusted so that the same shall equal the rate determined by dividing the Settlement Rate in effect immediately prior to the close of business on the date fixed for the determination of shareholders entitled to receive such distribution by a fraction, the numerator of which shall be the Current Market Price per Common Share on the date fixed for such determination less the then fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution filed with the Agent) of the portion of the assets or evidences of indebtedness so distributed applicable to one Common Share and the denominator of which shall be such Current Market Price per Common Share, such adjustment to become effective immediately prior to the opening of business on the day following the date fixed for the determination of shareholders entitled to receive such distribution. In any case in which this paragraph (4) is applicable, paragraph (2) of this Section shall not be applicable. (ii) In the case of a Spin-Off, the Settlement Rate in effect immediately before the close of business on the record date fixed for determination of stockholders entitled to receive that distribution will be increased by multiplying the Settlement Rate by a fraction, the numerator of which is the Current Market Price per Common Share plus the Fair Market Value of the portion of those shares of Capital Stock or similar equity interests so distributed applicable to one Common Share and the denominator of which is the Current Market Price per Common Share. Any adjustment to the settlement rate under this paragraph 4(ii) will occur on the date that is the earlier of (1) the tenth Trading Day following the effective date of the Spin-Off and (2) the date of the securities being offered in the Initial Public Offering of the Spin-Off, if that Initial Public Offering is effected simultaneously with the Spin-Off. (5) CASH DISTRIBUTIONS. In case the Company shall, (i) by dividend or otherwise, distribute to all holders of its Common Shares cash (excluding any cash that is distributed in a Reorganization Event to which Section 5.6(b) applies or as part of a distribution referred to in paragraph (4) of this Section) in an aggregate amount that, combined together with (ii) the aggregate amount of any other distributions to all holders of its Common Shares made exclusively in cash (other than regular quarterly, semi-annual or annual cash dividends) within the 12 months preceding the 55 date of payment of such distribution and in respect of which no adjustment pursuant to this paragraph (5) or paragraph (6) of this Section has been made and (iii) the aggregate of any cash plus the fair market value as of the date or expiration of the tender or exchange offer referred to below (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution filed with the Agent) of consideration payable in respect of any tender or exchange offer (other than consideration payable in respect of any odd-lot tender offer) by the Company or any of its subsidiaries for all or any portion of the Common Shares concluded within the 12 months preceding the date of payment of the distribution described in clause (i) above and in respect of which no adjustment pursuant to this paragraph (5) or paragraph (6) of this Section has been made, exceeds 10% of the product of the Current Market Price per Common Share on the date for the determination of holders of Common Shares entitled to receive such distribution times the number of Common Shares outstanding on such date, then, and in each such case, immediately after the close of business on such date for determination, the Settlement Rate shall be increased so that the same shall equal the rate determined by dividing the Settlement Rate in effect immediately prior to the close of business on the date fixed for determination of the shareholders entitled to receive such distribution by a fraction (A) the numerator of which shall be equal to the Current Market Price per Common Share on the date fixed for such determination less an amount equal to the quotient of (x) the combined amount distributed or payable in the transactions described in clauses (i), (ii) and (iii) above and (y) the number of Common Shares outstanding on such date for determination and (B) the denominator of which shall be equal to the Current Market Price per Common Share on such date for determination. (6) TENDER OFFERS. In case (i) a tender or exchange offer made by the Company or any subsidiary of the Company for all or any portion of the Common Shares shall expire and such tender or exchange offer (as amended upon the expiration thereof) shall require the payment to shareholders (based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of Purchased Shares) of an aggregate consideration having a fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution filed with the Agent) that when combined together with (ii) the aggregate of the cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution filed with the Agent), as of the expiration of such tender or exchange offer (other than consideration payable in respect of any odd-lot tender offer), of consideration payable in respect of any other tender or exchange offer, by the Company or any subsidiary of the Company for all or any portion of 56 the Common Shares expiring within the 12 months preceding the expiration of such tender or exchange offer and in respect of which no adjustment pursuant to paragraph (5) of this Section or this paragraph (6) has been made and (iii) the aggregate amount of any distributions to all holders of the Company's Common Shares made exclusively in cash (other than regular quarterly, semi-annual or annual cash dividends) within the 12 months preceding the expiration of such tender or exchange offer and in respect of which no adjustment pursuant to paragraph (5) of this Section or this paragraph (6) has been made, exceeds 10% of the product of the Current Market Price per Common Share as of the last time (the "Expiration Time") tenders could have been made pursuant to such tender or exchange offer (as it may be amended) times the number of Common Shares outstanding (including any tendered shares) on the Expiration Time, then, and in each such case, immediately prior to the opening of business on the day after the date of the Expiration Time, the Settlement Rate shall be adjusted so that the same shall equal the rate determined by dividing the Settlement Rate immediately prior to the close of business on the date of the Expiration Time by a fraction (A) the numerator of which shall be equal to (x) the product of (I) the Current Market Price per Common Share on the date of the Expiration Time and (II) the number of Common Shares outstanding (including any tendered shares) on the Expiration Time less (y) the amount of cash plus the fair market value (determined as aforesaid) of the aggregate consideration payable to shareholders based on the transactions described in clauses (i), (ii) and (iii) above (assuming in the case of clause (i) the acceptance, up to any maximum specified in the terms of the tender or exchange offer, of Purchased Shares), and (B) the denominator of which shall be equal to the product of (x) the Current Market Price per Common Share as of the Expiration Time and (y) the number of Common Shares outstanding (including any tendered shares) as of the Expiration Time less the number of all shares validly tendered and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the "Purchased Shares"). (7) RECLASSIFICATION. The reclassification of Common Shares into securities including securities other than Common Shares (other than any reclassification upon a Reorganization Event to which Section 5.6(b) applies) shall be deemed to involve (i) a distribution of such securities other than Common Shares to all holders of Common Shares (and the effective date of such reclassification shall be deemed to be "the date fixed for the determination of shareholders entitled to receive such distribution" and the "date fixed for such determination" within the meaning of paragraph (4) of this Section), and (ii) a subdivision, split or combination, as the case may be, of the number of Common Shares outstanding immediately prior to such reclassification into the number of Common 57 Shares outstanding immediately thereafter (and the effective date of such reclassification shall be deemed to be "the day upon which such subdivision or split becomes effective" or "the day upon which such combination becomes effective," as the case may be, and "the day upon which such subdivision, split or combination becomes effective" within the meaning of paragraph (3) of this Section). (8) "CURRENT MARKET PRICE". The "Current Market Price" per Common Share means (a) on any day the average of the Closing Price per Common Share on each of the 20 consecutive Trading Days ending on the earlier of the day in question and the day before the "ex date" with respect to the issuance or distribution requiring such computation, (b) in the case of any Spin-Off that is effected simultaneously with an Initial Public Offering of the securities being distributed in the Spin-Off, the Closing Price of the Common Shares on the Trading Day on which the initial price of the securities being distributed in the Spin-Off is determined, and (c) in the case of any other Spin-Off, the average of the Closing Prices per Common Share over the first 10 Trading Days after the effective date of such Spin-Off. For purposes of this paragraph, the term "ex date," when used with respect to any issuance or distribution, shall mean the first date on which the Common Shares trades regular way on such exchange or in such market without the right to receive such issuance or distribution. (9) CALCULATION OF ADJUSTMENTS. All adjustments to the Settlement Rate shall be calculated to the nearest 1/10,000th of a Common Share (or if there is not a nearest 1/10,000th of a share to the next lower 1/10,000th of a share). No adjustment in the Settlement Rate shall be required unless such adjustment would require an increase or decrease of at least one percent therein; provided, that any adjustments which by reason of this subparagraph are not required to be made shall be carried forward and taken into account in any subsequent adjustment. If an adjustment is made to the Settlement Rate pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a), an adjustment shall also be made to the Applicable Market Value solely to determine which of clauses (i), (ii) or (iii) of the definition of Settlement Rate in Section 5.1(a) will apply on the Share Purchase Date. Such adjustment shall be made by multiplying the Applicable Market Value by a fraction, the numerator of which shall be the Settlement Rate immediately after such adjustment pursuant to paragraph (1), (2), (3), (4), (5), (6), (7) or (10) of this Section 5.6(a) and the denominator of which shall be the Settlement Rate immediately before such adjustment; provided, that if such adjustment to the Settlement Rate is required to be made pursuant to the occurrence of any of the events contemplated by paragraph (1), (2), (3), (4), (5), (7) or (10) of this Section 5.6(a) during the period taken into consideration for 58 determining the Applicable Market Value, appropriate and customary adjustments shall be made to the Settlement Rate. (10) INCREASE OF SETTLEMENT RATE. The Company may make such increases in the Settlement Rate, in addition to those required by this Section, as it considers to be advisable in order to avoid or diminish any income tax to any holders of Common Shares resulting from any dividend or distribution of Capital Stock or issuance of rights or warrants to purchase or subscribe for stock or from any event treated as such for income tax purposes or for any other reasons. (b) Adjustment for Consolidation, Merger or Other Reorganization Event. In the event of (1) any consolidation or merger of the Company with or into another Person (other than a merger or consolidation in which the Company is the continuing corporation and in which the Common Shares outstanding immediately prior to the merger or consolidation is not exchanged for cash, securities or other property of the Company or another corporation), (2) any sale, transfer, lease or conveyance to another Person of the property of the Company as an entirety or substantially as an entirety, (3) any statutory exchange of securities of the Company with another Person (other than in connection with a merger or acquisition), or (4) any liquidation, dissolution or winding up of the Company other than as a result of or after the occurrence of a Termination Event (any such event, a "Reorganization Event"), each Common Share covered by each Purchase Contract forming part of a Unit immediately prior to such Reorganization Event shall, after such Reorganization Event, be converted for purposes of the Purchase Contract into the kind and amount of securities, cash and other property receivable in such Reorganization Event (without any interest thereon, and without any right to dividends or distribution thereon which have a record date that is prior to the Share Purchase Date per share of Common Stock) by a holder of Common Shares that (i) is not a Person with which the Company consolidated or into which the Company merged or which merged into the Company or to which such sale or transfer was made, as the case may be (any such Person, a "Constituent Person"), or an Affiliate of a Constituent Person to the extent such Reorganization Event provides for different treatment of Common Shares held by Affiliates of the Company and non-Affiliates, and (ii) failed to exercise his rights of election, if any, as to the kind or amount of securities, cash and other property receivable upon such Reorganization Event 59 (provided that if the kind or amount of securities, cash and other property receivable upon such Reorganization Event is not the same for each Common Share held immediately prior to such Reorganization Event by a Person other than a Constituent Person or an Affiliate thereof and in respect of which such rights of election shall not have been exercised ("Non-electing Share"), then for the purpose of this Section the kind and amount of securities, cash and other property receivable upon such Reorganization Event by each Non-electing Share shall be deemed to be the kind and amount so receivable per Common Share by a plurality of the Non-electing Shares). On the Share Purchase Date, the Settlement Rate then in effect will be applied to the value on the Share Purchase Date of such securities, cash or other property. In the event of such a Reorganization Event, the Person formed by such consolidation, merger or exchange or the Person which acquires the assets of the Company or, in the event of a liquidation or dissolution of the Company, the Company or a liquidating trust created in connection therewith, shall execute and deliver to the Agent an agreement supplemental hereto providing that the Holder of each Outstanding Unit shall have the rights provided by this Section 5.6. Such supplemental agreement shall provide for adjustments which, for events subsequent to the effective date of such supplemental agreement, shall be as nearly equivalent as may be practicable to the adjustments provided for in this Section. The above provisions of this Section shall similarly apply to successive Reorganization Events. SECTION 5.7 NOTICE OF ADJUSTMENTS AND CERTAIN OTHER EVENTS. (a) Whenever the Settlement Rate is adjusted as herein provided, the Company shall: (i) forthwith compute the Settlement Rate in accordance with Section 5.6 and prepare and transmit to the Agent an Officers' Certificate setting forth the Settlement Rate, the method of calculation thereof in reasonable detail, and the facts requiring such adjustment and upon which such adjustment is based; and (ii) as soon as practicable following the occurrence of an event that requires an adjustment to the Settlement Rate pursuant to Section 5.6 (or if the Company is not aware of such occurrence, as soon as practicable after becoming so aware), provide a written notice to the Agent of the occurrence of such event and a statement setting forth in reasonable detail the method by which the adjustment to the Settlement Rate was determined and setting forth the adjusted Settlement Rate. (b) The Agent shall not at any time be under any duty or responsibility to any Holder of Units to determine whether any facts exist which may require any adjustment of the Settlement Rate, or with respect to the nature or extent or calculation of any such adjustment when made, or with respect to the method employed in making the same. The Agent shall not be accountable with respect 60 to the validity or value (or the kind or amount) of any Common Shares, or of any securities or property, which may at the time be issued or delivered with respect to any Purchase Contract, and the Agent makes no representation with respect thereto. The Agent shall not be responsible for any failure of the Company to issue, transfer or deliver any Common Shares pursuant to a Purchase Contract or to comply with any of the duties, responsibilities or covenants of the Company contained in this Article. SECTION 5.8 TERMINATION EVENT; NOTICE. The Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights of Holders to receive accumulated Contract Adjustment Payments, if any, or any Deferred Contract Adjustment Payments and obligations of Holders to purchase Common Shares, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Agent or the Company, if, on or prior to the Share Purchase Date, a Termination Event shall have occurred. Upon and after the occurrence of a Termination Event, the Normal Units shall thereafter represent the right to receive the Notes or the appropriate Treasury Consideration, as the case may be, forming a part of such Normal Units, and the Stripped Units shall thereafter represent the right to receive the Treasury Securities forming a part of such Stripped Units, in each case in accordance with the provisions of Section 4.3 of the Pledge Agreement. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two Business Days thereafter give written notice to the Agent, the Collateral Agent and to the Holders, at their addresses as they appear in the Register. SECTION 5.9 EARLY SETTLEMENT. (a) Subject to and upon compliance with the provisions of this Section 5.9, Purchase Contracts underlying Units having an aggregate Stated Amount equal to $1,000 or an integral multiple thereof may, at the option of the Holder thereof, be settled early ("Early Settlement") on or prior to 10:00 a.m., New York City time, on the seventh Business Day immediately preceding the Share Purchase Date. Holders of Stripped Units may only effect Early Settlement of the related Purchase Contracts in integral multiples of 40 Stripped Units, and if Treasury Consideration has been substituted for the Notes as a component in the Normal Units due to a successful remarketing or the occurrence of a Tax Event Redemption, Purchase Contracts underlying such Normal Units may only be settled early in integral multiples of Normal Units such that the Treasury Consideration to be deposited and the Treasury Consideration to be released are in integral multiples of $1,000. In order to exercise the right to effect Early Settlement with respect to any Purchase Contracts, the Holder of the Certificate evidencing the related Units shall deliver such Certificate to the Agent at the Corporate Trust Office duly endorsed for transfer to the Company or in blank with the form of Election to Settle Early on the reverse thereof duly completed 61 and accompanied by payment payable to the Company in immediately available funds in an amount (the "Early Settlement Amount") equal to (A) the product of (i) the Stated Amount of such Units multiplied by (ii) the number of Purchase Contracts with respect to which the Holder has elected to effect Early Settlement, plus (B) if such delivery is made with respect to any Purchase Contracts during the period from the close of business on any Record Date next preceding any Payment Date to the opening of business on such Payment Date, an amount equal to the Contract Adjustment Payments, if any, payable on such Payment Date with respect to such Purchase Contracts; provided that no payment shall be required pursuant to clause (B) of this sentence if the Company shall have elected to defer the Contract Adjustment Payments which would otherwise be payable on such Payment Date. Except as provided in the immediately preceding sentence and subject to Section 5.2(d), no payment or adjustment shall be made upon Early Settlement of any Purchase Contract on any Contract Adjustment Payments accrued on such Purchase Contract or on account of any dividends on the Common Shares issued upon such Early Settlement. If the foregoing requirements are first satisfied with respect to Purchase Contracts underlying any Unit at or prior to 5:00 p.m., New York City time, on a Business Day, such day shall be the "Early Settlement Date" with respect to such Unit and if such requirements are first satisfied after 5:00 p.m., New York City time, on a Business Day or on a day that is not a Business Day, the "Early Settlement Date" with respect to such Units shall be the next succeeding Business Day. (b) Upon Early Settlement of any Purchase Contract by the Holder of the related Units, the Company shall issue, and the Holder shall be entitled to receive, - Common Shares on account of such Purchase Contract (the "Early Settlement Rate"). The Early Settlement Rate shall be adjusted in the same manner and at the same time as the Settlement Rate is adjusted pursuant to Section 5.6. As promptly as practicable after Early Settlement of Purchase Contracts in accordance with the provisions of this Section 5.9, the Company shall issue and shall deliver to the Agent at the Corporate Trust Office a certificate or certificates for the full number of Common Shares issuable upon such Early Settlement together with payment in lieu of any fraction of a share, as provided in Section 5.12. (c) No later than the third Business Day after the applicable Early Settlement Date the Company shall cause (i) the Common Shares issuable upon Early Settlement of Purchase Contracts to be issued and delivered, and (ii) the related Pledged Notes or Pledged Treasury Consideration, in the case of Normal Units, or the related Pledged Treasury Securities, in the case of Stripped Units, to be released from the Pledge by the Collateral Agent and transferred, in each case, to the Agent for delivery to the Holder thereof or the Holder's designee. (d) Upon Early Settlement of any Purchase Contracts, and subject to receipt of Common Shares from the Company and the Pledged Notes, Pledged 62 Treasury Consideration or Pledged Treasury Securities, as the case may be, from the Collateral Agent, as applicable, the Agent shall, in accordance with the instructions provided by the Holder thereof on the applicable form of Election to Settle Early on the reverse of the Certificate evidencing the related Units, (i) transfer to the Holder the Pledged Notes, Pledged Treasury Consideration or Pledged Treasury Securities, as the case may be, forming a part of such Units, and (ii) deliver to the Holder a certificate or certificates for the full number of Common Shares issuable upon such Early Settlement together with payment in lieu of any fraction of a share, as provided in Section 5.12. (e) In the event that Early Settlement is effected with respect to Purchase Contracts underlying less than all the Units evidenced by a Certificate, upon such Early Settlement the Company shall execute and the Agent shall authenticate, execute on behalf of the Holder and deliver to the Holder thereof, at the expense of the Company, a Certificate evidencing the Units as to which Early Settlement was not effected. (f) If such a registration statement is so required, the Company covenants and agrees to use its reasonable best efforts to (A) have in effect a registration statement covering the shares of Common Stock to be delivered in respect of the Purchase Contracts being settled and (B) provide a prospectus in connection therewith, in each case in a form that the Agent may use in connection with such Early Settlement. SECTION 5.10 EARLY SETTLEMENT UPON CASH MERGER. (a) In the event of a merger or consolidation of the Company of the type described in clause (1) of Section 5.6(b) in which the Common Shares outstanding immediately prior to such merger or consolidation are exchanged for consideration consisting of at least 30% cash or cash equivalents (any such event a "Cash Merger"), then the Company (or the successor to the Company hereunder) shall be required to offer the Holder of each Unit the right to settle the Purchase Contract underlying such Unit prior to the Share Purchase Date ("Merger Early Settlement") as provided herein. On or before the fifth Business Day after the consummation of a Cash Merger, the Company or, at the request and expense of the Company, the Agent, shall give all Holders notice of the occurrence of the Cash Merger and of the right of Merger Early Settlement arising as a result thereof. The Company shall also deliver a copy of such notice to the Agent and the Collateral Agent. Each such notice shall contain: (i) the date, which shall be not less than 20 nor more than 30 calendar days after the date of such notice, on which the Merger Early Settlement will be effected (the "Merger Early Settlement Date"); 63 (ii) the date, which shall be on or one Business Day prior to the Merger Early Settlement Date, by which the Merger Early Settlement right must be exercised; (iii) the Settlement Rate in effect as a result of such Cash Merger and the kind and amount of securities, cash and other property receivable by the Holder upon settlement of each Purchase Contract pursuant to Section 5.6(b); (iv) a statement to the effect that all or a portion of the Purchase Price payable by the Holder to settle the Purchase Contract will be offset against the amount of cash so receivable upon exercise of Merger Early Settlement, as applicable; and (v) the instructions a Holder must follow to exercise the Merger Early Settlement right. (b) To exercise a Merger Early Settlement right, a Holder shall deliver to the Agent at the Corporate Trust Office on or before 5:00 p.m., New York City time, on the date specified in the notice the Certificate(s) evidencing the Units with respect to which the Merger Early Settlement right is being exercised duly endorsed for transfer to the Company or in blank with the form of Election to Settle Early on the reverse thereof duly completed and accompanied by payment payable to the Company in immediately available funds in an amount equal to the Early Settlement Amount less the amount of cash that otherwise would be deliverable by the Company or its successor upon settlement of the Purchase Contract in lieu of Common Shares pursuant to Section 5.6(b) and as described in the notice to Holders (the "Merger Early Settlement Amount"). (c) On the Merger Early Settlement Date, the Company shall deliver or cause to be delivered (i) the net cash, securities and other property to be received by such exercising Holder, equal to the Settlement Rate as adjusted pursuant to Section 5.6, in respect of the number of Purchase Contracts for which such Merger Early Settlement right was exercised, and (ii) the related Pledged Notes or Pledged Treasury Consideration, in the case of Normal Units, or Pledged Treasury Securities, in the case of Stripped Units, to be released from the Pledge by the Collateral Agent and transferred, in each case, to the Agent for delivery to the Holder thereof or its designee. In the event a Merger Early Settlement right shall be exercised by a Holder in accordance with the terms hereof, all references herein to Share Purchase Date shall be deemed to refer to such Merger Early Settlement Date. (d) Upon Merger Early Settlement of any Purchase Contracts, and subject to receipt of such net cash, securities or other property from the Company and the Pledged Notes, Pledged Treasury Consideration or Pledged Treasury Securities, as the case may be, from the Collateral Agent, as applicable, the Agent 64 shall, in accordance with the instructions provided by the Holder thereof on the applicable form of Election to Settle Early on the reverse of the Certificate evidencing the related Units, (i) transfer to the Holder the Pledged Notes, Pledged Treasury Consideration or Pledged Treasury Securities, as the case may be, forming a part of such Units, and (ii) deliver to the Holder such net cash, securities or other property issuable upon such Merger Early Settlement together with payment in lieu of any fraction of a share, as provided in Section 5.12. (e) In the event that Merger Early Settlement is effected with respect to Purchase Contracts underlying less than all the Units evidenced by a Certificate, upon such Merger Early Settlement the Company (or the successor to the Company hereunder) shall execute and the Agent shall authenticate, execute on behalf of the Holder and deliver to the Holder thereof, at the expense of the Company, a Certificate evidencing the Units as to which Merger Early Settlement was not effected. SECTION 5.11 CHARGES AND TAXES. The Company will pay all stock transfer and similar taxes attributable to the initial issuance and delivery of the Common Shares pursuant to the Purchase Contracts and in payment of any Deferred Contract Adjustment Payments; provided, that the Company shall not be required to pay any such tax or taxes which may be payable in respect of any exchange of or substitution for a Certificate evidencing a Unit or any issuance of a Common Share in a name other than that of the registered Holder of a Certificate surrendered in respect of the Units evidenced thereby, other than in the name of the Agent, as custodian for such Holder, and the Company shall not be required to issue or deliver such Common Share certificates or Certificates unless and until the Person or Persons requesting the transfer or issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. SECTION 5.12 NO FRACTIONAL SHARES. No fractional shares or scrip representing fractional Common Shares shall be issued or delivered upon settlement on the Share Purchase Date or upon Early Settlement or Merger Early Settlement of any Purchase Contracts. If Certificates evidencing more than one Purchase Contract shall be surrendered for settlement at one time by the same Holder, the number of full Common Shares which shall be delivered upon settlement shall be computed on the basis of the aggregate number of Purchase Contracts evidenced by the Certificates so surrendered. Instead of any fractional Common Share which would otherwise be deliverable upon settlement of any Purchase Contracts on the applicable Settlement Date or upon Early Settlement or Merger Early Settlement, the Company, through the Agent, shall make a cash payment in respect of such fractional shares in an amount equal to the value of such fractional shares times the Applicable Market Value. The Company shall provide the Agent from time to time with 65 sufficient funds to permit the Agent to make all cash payments required by this Section 5.12 in a timely manner. ARTICLE VI REMEDIES SECTION 6.1 UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PURCHASE CONTRACT ADJUSTMENT PAYMENTS AND PURCHASE COMMON SHARES. The Holder of any Unit shall have the right, which is absolute and unconditional, (a) subject to the right of the Company to defer payment thereof pursuant to Section 5.3, and to the forfeiture of any Deferred Contract Adjustment Payments upon Early Settlement pursuant to Section 5.9 or upon Merger Early Settlement pursuant to Section 5.10 or upon the occurrence of a Termination Event, to receive payment of each installment of the Contract Adjustment Payments, if any, with respect to the Purchase Contract constituting a part of such Unit on the respective Payment Date for such Unit, and to institute suit for the enforcement of such right to receive Contract Adjustment Payments, and (b) to purchase Common Shares pursuant to the Purchase Contract constituting a part of such Unit and to institute suit for the enforcement of any such right to purchase Common Shares, and such rights shall not be impaired without the consent of such Holder. SECTION 6.2 RESTORATION OF RIGHTS AND REMEDIES. If any Holder has instituted any proceeding to enforce any right or remedy under this Agreement and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to such Holder, then and in every such case, subject to any determination in such proceeding, the Company and such Holder shall be restored severally and respectively to their former positions hereunder and thereafter all rights and remedies of such Holder shall continue as though no such proceeding had been instituted. SECTION 6.3 RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Certificates in Section 3.10(f), no right or remedy herein conferred upon or reserved to the Holders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any 66 right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. SECTION 6.4 DELAY OR OMISSION NOT WAIVER. No delay or omission of any Holder to exercise any right or remedy upon a default shall impair any such right or remedy or constitute a waiver of any such right. Every right and remedy given by this Article or by law to the Holders may be exercised from time to time, and as often as may be deemed expedient, by such Holders. SECTION 6.5 UNDERTAKING FOR COSTS. All parties to this Agreement agree, and each Holder of a Unit, by its acceptance of such Unit shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Agreement, or in any suit against the Agent for any action taken, suffered or omitted by it as Agent, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; provided that the provisions of this Section shall not apply to any suit instituted by the Company, to any suit instituted by the Agent, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% of the Outstanding Units, or to any suit instituted by any Holder for the enforcement of distributions on any Notes or Contract Adjustment Payments, if any, on any Purchase Contract on or after the respective Payment Date therefor in respect of any Unit held by such Holder, or for enforcement of the right to purchase Common Shares under the Purchase Contract constituting part of any Unit held by such Holder. SECTION 6.6 WAIVER OF STAY OR EXTENSION LAWS. The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Agreement; and the Company (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, but will suffer and permit the execution of every such power as though no such law had been enacted. 67 ARTICLE VII THE AGENT SECTION 7.1 CERTAIN DUTIES AND RESPONSIBILITIES. (a) (1) The Agent undertakes to perform, with respect to the Units and Separate Notes, such duties and only such duties as are specifically set forth in this Agreement and the Pledge Agreement, and no implied covenants or obligations shall be read into this Agreement against the Agent; and (2) in the absence of bad faith, willful misconduct or negligence on its part, the Agent may, with respect to the Units and Separate Notes, conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Agent and conforming to the requirements of this Agreement, but in the case of any certificates or opinions which by any provision hereof are specifically required to be furnished to the Agent, the Agent shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Agreement (but need not confirm or investigate the accuracy of the mathematical calculations or other facts stated therein). (b) No provision of this Agreement shall be construed to relieve the Agent from liability for its own grossly negligent action, its own grossly negligent failure to act, or its own willful misconduct, except that: (1) this paragraph (b) shall not be construed to limit the effect of paragraph (a) of this Section; (2) the Agent shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it shall be proved that the Agent was grossly negligent in ascertaining the pertinent facts; and (3) no provision of this Agreement shall require the Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers. (c) Whether or not therein expressly so provided, every provision of this Agreement relating to the conduct or affecting the liability of or affording protection to the Agent shall be subject to the provisions of this Section. (d) The Agent is authorized to execute and deliver the Pledge Agreement in its capacity as Agent. The Agent shall be entitled to all of the rights, privileges, immunities and indemnities contained in this Agreement with 68 respect to any duties of the Agent under, or actions taken, omitted to be taken or suffered by the Agent pursuant to the Pledge Agreement. SECTION 7.2 NOTICE OF DEFAULT. Within 30 days after the occurrence of any default by the Company hereunder of which a Responsible Officer of the Agent has actual knowledge, the Agent shall transmit by mail to the Company and the Holders of Units, as their names and addresses appear in the applicable Register, notice of such default hereunder, unless such default shall have been cured or waived. SECTION 7.3 CERTAIN RIGHTS OF AGENT. Subject to the provisions of Section 7.1: (a) the Agent may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties; (b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by an Officers' Certificate, Issuer Order or Issuer Request, and any resolution of the Board of Directors of the Company may be sufficiently evidenced by a Board Resolution; (c) whenever in the administration of this Agreement the Agent shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Agent (unless other evidence be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate of the Company; (d) the Agent may consult with counsel and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (e) the Agent shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, other evidence of indebtedness or other paper or document, but the Agent, in its discretion, may make reasonable further inquiry or investigation into such facts or matters related to the execution, delivery and performance of the Purchase Contracts as it may see fit, and, if the Agent shall determine to make such further inquiry or investigation, it shall be given a reasonable opportunity to examine the 69 books, records and premises of the Company, personally or by agent or attorney; and (f) the Agent may execute any of the powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys or an Affiliate of the Agent and the Agent shall not be responsible for any misconduct or negligence on the part of any agent or attorney or an Affiliate appointed with due care by it hereunder. SECTION 7.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF UNITS. The recitals contained herein and in the Certificates shall be taken as the statements of the Company and the Agent assumes no responsibility for their accuracy. The Agent makes no representations as to the validity or sufficiency of either this Agreement or of the Units, or of the Pledge Agreement or the Pledge. The Agent shall not be accountable for the use or application by the Company of the Units or the proceeds therefrom or in respect of the Purchase Contracts. SECTION 7.5 MAY HOLD UNITS. Any Registrar or any other agent of the Company, or the Agent and its Affiliates, in their individual or any other capacity, may become the owner or pledgee of Units and may otherwise deal with the Company, the Collateral Agent or any other Person with the same rights it would have if it were not Registrar or such other agent, or the Agent. SECTION 7.6 MONEY HELD IN CUSTODY. Money held by the Agent in custody hereunder need not be segregated from the Agent's other funds except to the extent required by law or provided herein. The Agent shall be under no obligation to invest or pay interest on any money received by it hereunder except as otherwise agreed in writing with the Company. SECTION 7.7 COMPENSATION AND REIMBURSEMENT. The Company agrees: (a) to pay to the Agent from time to time reasonable compensation for all services rendered by it hereunder; (b) except as otherwise expressly provided herein, to reimburse the Agent upon its request for all reasonable expenses, disbursements and advances incurred or made by the Agent in accordance with any provision of this Agreement (including the reasonable compensation and the reasonable expenses and disbursements of its agents and counsel), except any such expense, 70 disbursement or advance as may be attributable to its negligence, willful misconduct or bad faith; and (c) to indemnify the Agent and any predecessor Agent for, and to hold it harmless against, any loss, liability or expense incurred without negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of its duties hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. The Agent shall promptly notify the Company of any third party claim which may give rise to the indemnity hereunder and give the Company the opportunity to control the defense of such claim with counsel reasonably satisfactory to the indemnified party, and no such claim shall be settled without the written consent of the Company, which consent shall not be unreasonably withheld. For purposes of this Section 7.7, "Agent" shall include any predecessor Agent; provided, however, that the negligence, bad faith or willful misconduct of any Agent hereunder shall not affect the rights of any other Agent hereunder. The provisions of this Section 7.7 shall survive the termination of this Agreement, the satisfaction or discharge of the Units and/or the Separate Notes and/or the resignation or removal of the Agent. SECTION 7.8 CORPORATE AGENT REQUIRED; ELIGIBILITY. There shall at all times be an Agent hereunder which shall be a corporation organized and doing business under the laws of the United States of America, any State thereof or the District of Columbia, authorized under such laws to exercise corporate trust powers, having (or being a member of a bank holding company having) a combined capital and surplus of at least $50,000,000, subject to supervision or examination by federal or state authority and having a Corporate Trust Office in the Borough of Manhattan, The City of New York, if there be such a corporation, qualified and eligible under this Article and willing to act on reasonable terms. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of said supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Agent shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. SECTION 7.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR. (a) No resignation or removal of the Agent and no appointment of a successor Agent pursuant to this Article shall become effective until the 71 acceptance of appointment by the successor Agent in accordance with the applicable requirements of Section 7.10. (b) The Agent may resign at any time by giving written notice thereof to the Company 60 days prior to the effective date of such resignation. If the instrument of acceptance by a successor Agent required by Section 7.10 shall not have been delivered to the Agent within 30 days after the giving of such notice of resignation, the resigning Agent may petition any court of competent jurisdiction for the appointment of a successor Agent. (c) The Agent may be removed at any time by Act of the Holders of a majority in number of the Outstanding Units delivered to the Agent and the Company. (d) If at any time: (1) the Agent fails to comply with Section 310(b) of the TIA, as if the Agent were an indenture trustee under an indenture qualified under the TIA, after written request therefor by the Company or by any Holder who has been a bona fide Holder of a Unit for at least six months; or (2) the Agent shall cease to be eligible under Section 7.8 and shall fail to resign after written request therefor by the Company or by any such Holder; or (3) the Agent shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Agent or of its property shall be appointed or any public officer shall take charge or control of the Agent or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; then, in any such case, (x) the Company by a Board Resolution may remove the Agent, or (y) any Holder who has been a bona fide Holder of a Unit for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Agent and the appointment of a successor Agent. (e) If the Agent shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Agent for any reason, the Company, by a Board Resolution, shall promptly appoint a successor Agent and shall comply with the applicable requirements of Section 7.10. If no successor Agent shall have been so appointed by the Company and accepted appointment in the manner required by Section 7.10, any Holder who has been a bona fide Holder of a Unit for at least six months may, on behalf of itself and all others similarly 72 situated, petition any court of competent jurisdiction for the appointment of a successor Agent. (f) The Company shall give, or shall cause such successor Agent to give, notice of each resignation and each removal of the Agent and each appointment of a successor Agent by mailing written notice of such event by first-class mail, postage prepaid, to all Holders as their names and addresses appear in the applicable Register. Each notice shall include the name of the successor Agent and the address of its Corporate Trust Office. SECTION 7.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. (a) In case of the appointment hereunder of a successor Agent, every such successor Agent so appointed shall execute, acknowledge and deliver to the Company and to the retiring Agent an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Agent shall become effective and such successor Agent, without any further act, deed or conveyance, shall become vested with all the rights, powers, agencies and duties of the retiring Agent. On the request of the Company or the successor Agent, such retiring Agent shall, upon payment of its charges, execute and deliver an instrument transferring to such successor Agent all the rights, powers and trusts of the retiring Agent and shall duly assign, transfer and deliver to such successor Agent all property and money held by such retiring Agent hereunder. (b) Upon request of any such successor Agent, the Company shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Agent all such rights, powers and agencies referred to in paragraph (a) of this Section. (c) No successor Agent shall accept its appointment unless at the time of such acceptance such successor Agent shall be qualified and eligible under this Article. SECTION 7.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS. Any Person into which the Agent may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Agent shall be a party, or any Person succeeding to all or substantially all the corporate trust business of the Agent, shall be the successor of the Agent hereunder, provided such Person shall be otherwise qualified and eligible under this Article, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Certificates shall have been authenticated and executed on behalf of the Holders, but not delivered, by the Agent then in office, any successor to such Agent shall adopt such authentication and execution and deliver the 73 Certificates so authenticated and executed with the same effect as if such successor Agent had itself authenticated and executed such Units. SECTION 7.12 PRESERVATION OF INFORMATION; COMMUNICATIONS TO HOLDERS. The Agent shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders received by the Agent in its capacity as Registrar. SECTION 7.13 NO OBLIGATIONS OF AGENT. Except to the extent otherwise provided in this Agreement, the Agent assumes no obligation and shall not be subject to any liability under this Agreement, the Pledge Agreement or any Purchase Contract in respect of the obligations of the Holder of any Unit thereunder. The Company agrees, and each Holder of a Certificate, by such Holder's acceptance thereof, shall be deemed to have agreed, that the Agent's execution of the Certificates on behalf of the Holders shall be solely as agent and attorney-in-fact for the Holders, and that the Agent shall have no obligation to perform such Purchase Contracts on behalf of the Holders, except to the extent expressly provided in Article V. SECTION 7.14 TAX COMPLIANCE. (a) The Agent, on its own behalf and on behalf of the Company, will comply with all applicable certification, information reporting and withholding (including "backup" withholding) requirements imposed by applicable tax laws, regulations or administrative practice with respect to (i) any payments made with respect to the Units or (ii) the issuance, delivery, holding, transfer, redemption or exercise of rights under the Units. Such compliance shall include, without limitation, the preparation and timely filing of required returns and the timely payment of all amounts required to be withheld to the appropriate taxing authority or its designated agent. (b) The Agent shall comply with any reasonable written direction timely received from the Company with respect to the execution or certification of any required documentation and the application of such requirements to particular payments or Holders or in other particular circumstances, and may for purposes of this Agreement conclusively rely on any such direction in accordance with the provisions of Section 7.1(a)(2). (c) The Agent shall maintain all appropriate records documenting compliance with such requirements, and shall make such records available, on written request, to the Company or its authorized representative within a reasonable period of time after receipt of such request. 74 ARTICLE VIII SUPPLEMENTAL AGREEMENTS SECTION 8.1 SUPPLEMENTAL AGREEMENTS WITHOUT CONSENT OF HOLDERS. Without the consent of any Holders, the Company and the Agent, at any time and from time to time, may enter into one or more agreements supplemental hereto, in form satisfactory to the Company and the Agent, for any of the following purposes: (a) to evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company herein and in the Certificates; or (b) to add to the covenants of the Company for the benefit of the Holders, or to surrender any right or power herein conferred upon the Company; or (c) to evidence and provide for the acceptance of appointment hereunder by a successor Agent; or (d) to make provision with respect to the rights of Holders pursuant to the requirements of Section 5.6(b) or 5.10; or (e) to cure any ambiguity, to correct or supplement any provisions herein which may be inconsistent with any other provisions herein, or to make any other provisions with respect to such matters or questions arising under this Agreement, provided such action shall not adversely affect the interests of the Holders. SECTION 8.2 SUPPLEMENTAL AGREEMENTS WITH CONSENT OF HOLDERS. (a) With the consent of the Holders of not less than a majority of the outstanding Purchase Contracts voting together as one class, by Act of said Holders delivered to the Company and the Agent, the Company, when authorized by a Board Resolution, and the Agent may enter into an agreement or agreements supplemental hereto for the purpose of modifying in any manner the terms of the Purchase Contracts, or the provisions of this Agreement or the rights of the Holders in respect of the Units; provided, however, that, except as contemplated herein, no such supplemental agreement shall, without the consent of the Holder of each Outstanding Unit affected thereby: (1) change any Payment Date; 75 (2) change the amount or the type of Collateral required to be Pledged to secure a Holder's obligations under the Purchase Contract, impair the right of the Holder of any Purchase Contract to receive distributions on the related Collateral (except for the rights of Holders of Normal Units to substitute the Treasury Securities for the Pledged Notes or Pledged Treasury Consideration or the rights of holders of Stripped Units to substitute Notes or appropriate Treasury Consideration for the Pledged Treasury Securities) or otherwise materially adversely affect the Holder's rights in or to such Collateral; (3) reduce any Contract Adjustment Payments or any Deferred Contract Adjustment Payment, or change any place where, or the coin or currency in which, any Contract Adjustment Payment is payable or increase any amounts payable in respect of the Units or decrease any other amounts receivable by Holders in respect of the Units; (4) impair the right to institute suit for the enforcement of any Purchase Contract, any Contract Adjustment Payment, if any, or any Deferred Contract Adjustment Payment, if any; (5) reduce the number of Common Shares to be purchased pursuant to any Purchase Contract, increase the price to purchase Common Shares upon settlement of any Purchase Contract, change the Share Purchase Date or otherwise materially adversely affect the Holder's rights under any Purchase Contract; or (6) reduce the percentage of the outstanding Purchase Contracts the consent of whose Holders is required for any such supplemental agreement; provided, that if any amendment or proposal referred to above would adversely affect only the Normal Units or the Stripped Units, then only the affected class of Holder as of the record date for the Holders entitled to vote thereon will be entitled to vote on or consent to such amendment or proposal, and such amendment or proposal shall not be effective except with the consent of Holders of not less than a majority of such class; provided, however, that no such agreement, whether with or without the consent of Holders, shall affect Section 3.16. (b) It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed supplemental agreement, but it shall be sufficient if such Act shall approve the substance thereof. 76 SECTION 8.3 EXECUTION OF SUPPLEMENTAL AGREEMENTS. In executing, or accepting the additional agencies created by, any supplemental agreement permitted by this Article or the modifications thereby of the agencies created by this Agreement, the Agent shall be entitled to receive and (subject to Section 7.1) shall be fully protected in relying upon, an Officer's Certificate and an Opinion of Counsel stating that the execution of such supplemental agreement is authorized or permitted by this Agreement. The Agent shall enter into any such supplemental agreement which does not materially adversely affect the Agent's own rights, duties or immunities under this Agreement or otherwise. SECTION 8.4 EFFECT OF SUPPLEMENTAL AGREEMENTS. Upon the execution of any supplemental agreement under this Article, this Agreement shall be modified in accordance therewith, and such supplemental agreement shall form a part of this Agreement for all purposes; and every Holder of Certificates theretofore or thereafter authenticated, executed on behalf of the Holders and delivered hereunder shall be bound thereby. SECTION 8.5 REFERENCE TO SUPPLEMENTAL AGREEMENTS. Certificates authenticated, executed on behalf of the Holders and delivered after the execution of any supplemental agreement pursuant to this Article may, and shall if required by the Agent, bear a notation in form approved by the Agent as to any matter provided for in such supplemental agreement. If the Company shall so determine, new Certificates so modified as to conform, in the opinion of the Agent and the Company, to any such supplemental agreement may be prepared and executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Agent in exchange for Outstanding Certificates. ARTICLE IX CONSOLIDATION, MERGER, SALE OR CONVEYANCE SECTION 9.1 COVENANT NOT TO MERGE, CONSOLIDATE, SELL OR CONVEY PROPERTY EXCEPT UNDER CERTAIN CONDITIONS. The Company covenants that, so long as any Units are outstanding, it will not (a) merge with or into or consolidate with any other Person or (b) sell, assign, transfer, lease or convey all or substantially all of its properties and assets to any Person or group of affiliated Persons in one transaction or a series of related transactions, unless (i) either the Company shall be the continuing entity, or the successor (if other than the Company) shall be a Person, other than an individual, organized and existing under the laws of Bermuda or the United States of America or a State thereof or the District of Columbia and such Person shall expressly assume all the obligations of the Company under the Purchase Contracts, the guarantees of the Notes, this Agreement, the 77 Remarketing Agreement and the Pledge Agreement by one or more supplemental agreements in form reasonably satisfactory to the Agent and the Collateral Agent, executed and delivered to the Agent and the Collateral Agent by such Person, and (ii) the Company or such successor, as the case may be, shall not, immediately after such merger or consolidation, or such sale, assignment, transfer, lease or conveyance, be in default in the performance of any covenant or condition hereunder, under any of the Purchase Contracts, under the Remarketing Agreement or under the Pledge Agreement. SECTION 9.2 RIGHTS AND DUTIES OF SUCCESSOR CORPORATION. (a) In case of any such consolidation, merger, sale, assignment, transfer, lease or conveyance and upon any such assumption by a successor entity in accordance with Section 9.1, such successor entity shall succeed to and be substituted for the Company with the same effect as if it had been named herein as the Company. Such successor entity thereupon may cause to be signed, and may issue either in its own name or in the name of the Company, any or all of the Certificates evidencing Units issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Agent; and, upon the order of such successor corporation, instead of the Company, and subject to all the terms, conditions and limitations in this Agreement prescribed, the Agent shall authenticate and execute on behalf of the Holders and deliver any Certificates which previously shall have been signed and delivered by the officers of the Company to the Agent for authentication, execution on behalf of the Holder and delivery, and any Certificate evidencing Units which such successor entity thereafter shall cause to be signed and delivered to the Agent for that purpose. All the Certificates so issued shall in all respects have the same legal rank and benefit under this Agreement as the Certificates theretofore or thereafter issued in accordance with the terms of this Agreement as though all of such Certificates had been issued at the date of the execution hereof. (b) In case of any such consolidation, merger, sale, assignment, transfer, lease or conveyance such change in phraseology and form (but not in substance) may be made in the Certificates evidencing Units thereafter to be issued as may be appropriate. SECTION 9.3 OPINION OF COUNSEL GIVEN TO AGENT. The Agent, subject to Sections 7.1 and 7.3, shall receive an Opinion of Counsel as conclusive evidence that any such consolidation, merger, sale, assignment, transfer, lease or conveyance, and any such assumption, complies with the provisions of this Article and that all conditions precedent to the consummation of any such consolidation, merger, sale, assignment, transfer, lease or conveyance have been met. 78 ARTICLE X COVENANTS SECTION 10.1 PERFORMANCE UNDER PURCHASE CONTRACTS. The Company covenants and agrees for the benefit of the Holders from time to time of the Units that it will duly and punctually perform its obligations under the Purchase Contracts in accordance with the terms of the Purchase Contracts and this Agreement. SECTION 10.2 MAINTENANCE OF OFFICE OR AGENCY. (a) The Company will maintain in the Borough of Manhattan, The City of New York an office or agency where Certificates may be presented or surrendered for acquisition of Common Shares upon settlement of the Purchase Contracts on any Settlement Date and for transfer of Collateral upon occurrence of a Termination Event, where Certificates may be surrendered for registration of transfer or exchange, for a Collateral Substitution or reestablishment of Normal Units and where notices and demands to or upon the Company in respect of the Units and this Agreement may be served. The Company will give prompt written notice to the Agent of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Agent with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office, and the Company hereby appoints the Agent as its agent to receive all such presentations, surrenders, notices and demands. (b) The Company may also from time to time designate one or more other offices or agencies where Certificates may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York for such purposes. The Company will give prompt written notice to the Agent of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates as the place of payment for the Units the Corporate Trust Office and appoints the Agent at its Corporate Trust Office as paying agent in such city. SECTION 10.3 COMPANY TO RESERVE COMMON SHARES. The Company shall at all times prior to the Share Purchase Date reserve and keep available, free from preemptive rights, out of its authorized but unissued Common Shares the full number of Common Shares issuable against tender of 79 payment in respect of all Purchase Contracts constituting a part of the Units evidenced by Outstanding Certificates. SECTION 10.4 COVENANTS AS TO COMMON SHARES. The Company covenants that all Common Shares which may be issued against tender of payment in respect of any Purchase Contract constituting a part of the Outstanding Units will, upon issuance, be duly authorized, validly issued, fully paid and nonassessable. 80 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. PLATINUM UNDERWRITERS HOLDINGS, LTD. By: ___________________________________ Name: Title: JPMORGAN CHASE BANK, as Purchase Contract Agent By: ___________________________________ Name: Title: EXHIBIT A FORM OF NORMAL UNITS CERTIFICATE (FORM OF GLOBAL CERTIFICATE LEGEND) [THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED ON THE REVERSE HEREOF) AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT. Unless this Certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) to the Company or its agent for registration of transfer, exchange or payment, and any Certificate issued is registered in the name of Cede & Co., or such other name as requested by an authorized representative of The Depository Trust Company, and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein. ] (Form of Face of Normal Units Certificate) Platinum Underwriters Holdings, Ltd. ___% Adjustable Conversion Rate Equity Security Units No._______________ CUSIP No. Number of Normal Units __________ This Normal Units Certificate certifies that _____ is the registered Holder of the number of Normal Units set forth above. Each Normal Unit represents (i) either (a) a 1/40, or 2.5%, beneficial ownership interest of the Holder in one % Senior Note due 2007 (the "Note") of Platinum Underwriters Finance, Inc., a Delaware corporation, having a principal amount of $1,000, subject to the Pledge of such Note by such Holder pursuant to the Pledge Agreement, or (b) if the Note has been remarketed by the Remarketing Agent (or if the Holder has elected not to have the Note remarketed or a Tax Event Redemption has occurred), the appropriate Treasury Consideration, subject to the Pledge of such Treasury Consideration by such Holder pursuant to the Pledge Agreement, and (ii) the rights and obligations of the Holder under one Purchase Contract with Platinum Underwriters Holdings, Ltd., a Bermuda corporation (the "Company"). All capitalized terms used herein which are defined in the Purchase Contract Agreement have the meaning set forth therein. A-1 Pursuant to the Pledge Agreement, the interest in the Note or the appropriate Treasury Consideration, as the case may be, constituting part of each Normal Unit evidenced hereby has been pledged to the Collateral Agent, for the benefit of the Company, to secure the obligations of the Holder under the Purchase Contract comprising a part of such Normal Unit to purchase Common Shares of the Company. Prior to the purchase of Common Shares under each Purchase Contract, such Purchase Contracts shall not entitle the Holders of Normal Units Certificates to any of the rights of a holder of Common Shares, including without limitation, the right to vote or receive any dividends or other payments or to consent or to receive notice as stockholders in respect of the meetings of stockholders, or for the election of directors of the Company or for any other matter or any other rights whatsoever as stockholder of the Company. The Pledge Agreement provides that all payments in respect of the Pledged Notes or Pledged Treasury Consideration received by the Collateral Agent shall be paid by the Collateral Agent by wire transfer in same day funds (i) in the case of (A) quarterly cash distributions on Normal Units which include Pledged Notes or Pledged Treasury Consideration and (B) any payments in respect of the Notes or Treasury Consideration, as the case may be, that have been released from the Pledge pursuant to the Pledge Agreement, to the Agent to the account designated by the Agent, no later than 10:00 a.m., New York City time, on the Business Day such payment is received by the Collateral Agent (provided that in the event such payment is received by the Collateral Agent on a day that is not a Business Day or after 9:00 a.m., New York City time, on a Business Day, then such payment shall be made no later than 9:30 a.m., New York City time, on the next succeeding Business Day) and (ii) in the case of payments in respect of any Pledged Notes or Pledged Treasury Consideration, as the case may be, to be paid upon settlement of such Holder's obligations to purchase Common Shares under the Purchase Contract, to the Company on the Share Purchase Date (as defined herein) in accordance with the terms of the Pledge Agreement, in full satisfaction of the respective obligations of the Holders of the Normal Units of which such Pledged Notes or Pledged Treasury Consideration are a part under the Purchase Contracts forming a part of such Normal Units. Quarterly distributions on Normal Units which include Pledged Notes or Pledged Treasury Consideration which are payable quarterly in arrears on -, -, -, and - each year, commencing - -, 2002 (a "Payment Date"), shall, subject to receipt thereof by the Agent from the Collateral Agent, be paid to the Person in whose name this Normal Units Certificate (or a Predecessor Normal Units Certificate) is registered at the close of business on the Record Date for such Payment Date. Each Purchase Contract evidenced hereby obligates the Holder of this Normal Units Certificate to purchase, and the Company to sell, on -, 2005 (the "Share Purchase Date"), at a price equal to $25 (the "Stated Amount"), a number of Common Shares, $0.01 par value per share ("Common Shares"), of the Company, equal to the Settlement Rate, unless on or prior to the Share Purchase Date there shall have occurred a Termination Event or an Early Settlement or Merger Early Settlement with respect to the Normal Units of which such Purchase Contract is a part, all as provided in the Purchase Contract Agreement, as defined and more fully described on the reverse hereof. The A-2 Purchase Price (as defined herein) for the Common Shares purchased pursuant to each Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the Share Purchase Date by application of payments received in respect of the Pledged Notes or the Pledged Treasury Consideration pledged to secure the obligations of the Holder under such Purchase Contract. Payments on the Notes or the appropriate Treasury Consideration will be payable at the office of the Agent in The City of New York or, at the option of the Company, by check mailed to the address of the Person entitled thereto as such address appears on the Normal Units Register or by wire transfer to an account specified by the Company. The Company shall pay on each Payment Date in respect of each Purchase Contract forming part of a Normal Unit evidenced hereby an amount (the "Contract Adjustment Payments") equal to -% per year of the Stated Amount, computed on the basis of a 360-day year of twelve 30-day months, subject to deferral at the option of the Company as provided in the Purchase Contract Agreement and more fully described on the reverse hereof (provided that if on any date on which Contract Adjustment Payments are to be made on the Purchase Contracts is not a Business Day, then payment of the Contract Adjustment Payments payable on that date will be made on the next succeeding day which is a Business Day, and no interest or payment will be paid in respect of the delay, except that if such next succeeding Business Day is in the next succeeding calendar year, such payment will be made on the immediately preceding Business Day). Such Contract Adjustment Payments shall be payable to the Person in whose name this Normal Units Certificate (or a Predecessor Normal Units Certificate) is registered at the close of business on the Record Date for such Payment Date. Contract Adjustment Payments will be payable at the office of the Agent in The City of New York or, at the option of the Company, by check mailed to the address of the Person entitled thereto as such address appears on the Normal Units Register. Reference is hereby made to the further provisions set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Agent by manual signature, this Normal Units Certificate shall not be entitled to any benefit under the Pledge Agreement or the Purchase Contract Agreement or be valid or obligatory for any purpose. A-3 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. Dated: ____________ PLATINUM UNDERWRITERS HOLDINGS, LTD. By: __________________________________ Name: Title: HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Purchase Contracts evidenced hereby) By: JPMORGAN CHASE BANK, not individually but solely as Attorney-in-Fact of such Holder By:_______________________________ Name: Title: A-4 AGENT'S CERTIFICATE OF AUTHENTICATION This is one of the Normal Units Certificates referred to in the within mentioned Purchase Contract Agreement. JPMORGAN CHASE BANK, as Purchase Contract Agent Dated:__________________ By:__________________________________ Authorized Officer A-5 (Form of Reverse of Normal Units Certificate) Each Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement, dated as of -, 2002 (as may be supplemented from time to time, the "Purchase Contract Agreement"), between the Company and JPMorgan Chase Bank, as Purchase Contract Agent (including its successors thereunder, herein called the "Agent"), to which Purchase Contract Agreement and supplemental agreements thereto reference is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Agent, the Company, and the Holders and of the terms upon which the Normal Units Certificates are, and are to be, executed and delivered. All defined terms used but not defined in this Certificate have the meanings ascribed to them in the Purchase Contract Agreement. Each Purchase Contract evidenced hereby obligates the Holder of this Normal Units Certificate to purchase, and the Company to sell, on the Share Purchase Date at a price equal to $25 (the "Purchase Price"), a number of Common Shares of the Company equal to the Settlement Rate, unless, on or prior to the Share Purchase Date, there shall have occurred a Termination Event or a Cash Settlement, Early Settlement or Merger Early Settlement with respect to the Unit of which such Purchase Contract is a part. The "Settlement Rate" is equal to (a) if the Applicable Market Value (as defined below) is equal to or greater than $- (the "Threshold Appreciation Price"), - Common Shares per Purchase Contract, (b) if the Applicable Market Value is less than the Threshold Appreciation Price but is greater than $-, the number of Common Shares per Purchase Contract equal to the Stated Amount divided by the Applicable Market Value and (c) if the Applicable Market Value is equal to or less than $-, - Common Shares per Purchase Contract, in each case subject to adjustment as provided in the Purchase Contract Agreement. No fractional Common Shares will be issued upon settlement of Purchase Contracts, as provided in the Purchase Contract Agreement. The "Applicable Market Value" means the average of the Closing Price per Common Share on each of the 20 consecutive Trading Days ending on the third Trading Day immediately preceding the Share Purchase Date or, in the event of a Cash Merger, the Cash Merger Date. The "Closing Price" of the Common Shares on any date of determination means the closing sale price (or, if no closing sale price is reported, the last reported sale price) of the Common Shares on the New York Stock Exchange (the "NYSE") on such date or, if the Common Shares are not listed for trading on the NYSE on any such date, as reported in the composite transactions for the principal United States securities exchange on which the Common Shares are so listed, or if the Common Shares are not so listed on a United States national or regional securities exchange, as reported by The Nasdaq Stock Market, or, if the Common Shares are not so reported, the last quoted bid price for the Common Shares in the over-the-counter market as reported by the National Quotation Bureau or similar organization, or, if such bid price is not available, the market value of the Common Shares on such date as determined by a nationally recognized independent investment banking firm retained for this purpose by the Company. A-6 A "Trading Day" means a day on which the Common Shares (A) are not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business and (B) has traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of the Common Shares at the close of business on such day. Each Purchase Contract evidenced hereby may be settled prior to the Share Purchase Date through Cash Settlement, Early Settlement or Merger Early Settlement, in accordance with the terms of the Purchase Contract Agreement. In accordance with the terms of the Purchase Contract Agreement, the Holder of this Normal Units Certificate shall pay the Purchase Price for the Common Shares purchased pursuant to each Purchase Contract evidenced hereby (i) by effecting a Cash Settlement, an Early Settlement or Merger Early Settlement, (ii) by application of payments received in respect of the Pledged Treasury Consideration acquired from the proceeds of a remarketing of the related Pledged Notes underlying the Normal Units represented by this Normal Units Certificate as contemplated by Section 5.4 of the Purchase Contract Agreement or (iii) if the Holder has elected not to participate in the remarketing, by application of payments received in respect of the Pledged Opt-out Treasury Consideration deposited by such Holder in respect of such Purchase Contract or (iv) if a Tax Event Redemption has occurred prior to the successful remarketing of the Notes as contemplated by Section 5.4 of the Purchase Contract Agreement, by application of payments received in respect of the Pledged Treasury Consideration purchased by the Collateral Agent on behalf of the Holder of this Normal Units Certificate. If, as provided in the Purchase Contract Agreement, upon the occurrence of a Last Failed Remarketing the Collateral Agent, for the benefit of the Company, exercises its rights as a secured creditor with respect to the Pledged Notes related to this Normal Units Certificate, any accrued and unpaid interest on such Pledged Notes will become payable by the Company to the Holder of this Normal Units Certificate in the manner provided for in the Purchase Contract Agreement. The Company shall not be obligated to issue any Common Shares in respect of a Purchase Contract or deliver any certificates therefor to the Holder unless it shall have received payment in full of the aggregate Purchase Price for the Common Shares to be purchased thereunder in the manner herein set forth. Under and subject to the terms of the Pledge Agreement and the Purchase Contract Agreement, the Agent will be entitled to exercise the voting and any other consensual rights pertaining to the Pledged Notes, but only to the extent instructed by the Holders as described below. Upon receipt of notice of any meeting at which holders of Notes are entitled to vote or upon the solicitation of consents, waivers or proxies of holders of Notes, the Agent shall, as soon as practicable thereafter, mail to the Holders of Normal Units a notice (a) containing such information as is contained in the notice or solicitation, (b) stating that each such Holder on the record date set by the Agent therefor (which, to the extent possible, shall be the same date as the record date for determining A-7 the holders of Notes entitled to vote) shall be entitled to instruct the Agent as to the exercise of the voting rights pertaining to the Pledged Notes constituting a part of such Holder's Normal Units and (c) stating the manner in which such instructions may be given. Upon the written request of any Holder of Normal Units on such record date, the Agent shall endeavor insofar as practicable to vote or cause to be voted, in accordance with the instructions set forth in such requests the maximum number of Pledged Notes as to which any particular voting instructions are received. In the absence of specific instructions from the Holder of a Normal Unit, the Agent shall abstain from voting the Pledged Note evidenced by such Normal Unit. The Normal Units Certificates are issuable only in registered form and only in denominations of a single Normal Unit and any integral multiple thereof. The transfer of any Normal Units Certificate will be registered and Normal Units Certificates may be exchanged as provided in the Purchase Contract Agreement. The Normal Units Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents permitted by the Purchase Contract Agreement. No service charge shall be required for any such registration of transfer or exchange of a Normal Units Certificate, but the Company and the Agent may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Certificates, other than exchanges not involving any transfer as provided for in the Purchase Contract Agreement. The Holder of a Normal Unit may substitute for the Pledged Notes or Pledged Treasury Consideration securing its obligations under the related Purchase Contract Treasury Securities in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. From and after such Collateral Substitution, the Unit for which such Pledged Treasury Securities secures the Holder's obligation under the Purchase Contract shall be referred to as a "Stripped Unit." A Holder that elects to substitute Treasury Securities for Pledged Notes or Pledged Treasury Consideration, thereby creating Stripped Units, shall be responsible for any fees or expenses payable in connection therewith. Except as provided in the Purchase Contract Agreement, for so long as the Purchase Contract underlying a Normal Unit remains in effect, such Normal Unit shall not be separable into its constituent parts, and the rights and obligations of the Holder of such Normal Units in respect of the Pledged Note or Pledged Treasury Consideration and Purchase Contract comprising such Normal Unit may be acquired, and may be transferred and exchanged, only as a Normal Unit. A Holder of Stripped Units may reestablish Normal Units at any time from and after the date of the Purchase Contract Agreement and on or prior to the second Business Day immediately preceding the Share Purchase Date by depositing with the Collateral Agent the Notes or the appropriate Treasury Consideration in exchange for the release of the Pledged Treasury Securities in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. Subject to the next succeeding paragraph, the Company shall pay, on each Payment Date, the Contract Adjustment Payments, if any, payable in respect of each Purchase Contract to the Person in whose name the Normal Units Certificate (or one or A-8 more Predecessor Normal Units Certificates) evidencing such Purchase Contract is registered on the Normal Units Register at the close of business on the Record Date next preceding such Payment Date. The Contract Adjustment Payments, if any, will be payable at the Corporate Trust Office or, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person's address as it appears on the Normal Units Register or by wire transfer to the account designated by such Person in writing. The Company shall have the right, at any time prior to the Share Purchase Date, to defer the payment of any or all of the Contract Adjustment Payments otherwise payable on any Payment Date, but only if the Company shall give the Holders and the Agent written notice of its election to defer each such Contract Adjustment Payments as provided in the Purchase Contract Agreement. Any Contract Adjustment Payments so deferred shall, to the extent permitted by law, accrue additional Contract Adjustment Payments thereon at the rate of -% per year (computed on the basis of a 360-day year of twelve 30-day months), compounding on each succeeding Payment Date, until paid in full (such deferred installments of Contract Adjustment Payments, if any, together with the additional Contract Adjustment Payments, if any, accrued thereon, are referred to herein as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment Payments, if any, shall be due on the next succeeding Payment Date except to the extent that payment is deferred pursuant to the Purchase Contract Agreement. No Contract Adjustment Payments may be deferred to a date that is after the Share Purchase Date and no such deferral period may end other than on a Payment Date. In the event that the Company elects to defer the payment of Contract Adjustment Payments on the Purchase Contracts until a Payment Date prior to the Share Purchase Date, then all Deferred Contract Adjustment Payments, if any, shall be payable to the registered Holders as of the close of business on the Record Date immediately preceding such Payment Date. The Company's obligations with respect to Contract Adjustment Payments (including any accrued or Deferred Contract Adjustment Payments) will be Subordinated and junior in right of payment to the Company's obligations under any Senior indebtedness. In the event that the Company elects to defer the payment of Contract Adjustment Payments on the Purchase Contracts until the Share Purchase Date, the Holder of this Normal Units Certificate will receive on the Share Purchase Date, in lieu of a cash payment, a number of Common Shares (in addition to the number of Common Shares equal to the Settlement Rate) equal to (i) the aggregate amount of Deferred Contract Adjustment Payments payable to the Holder of this Normal Units Certificate divided by (ii) the Applicable Market Value. In the event the Company exercises its option to defer the payment of Contract Adjustment Payments, then, until the Deferred Contract Adjustment Payments have been paid, the Company shall not, and will not permit any subsidiary of the A-9 Company to, declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of the Company's Capital Stock other than (i) purchases, redemptions or acquisitions of shares of the Company's Capital Stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or agents or a stock purchase or dividend reinvestment plan, or the satisfaction by the Company of its obligations pursuant to any contract or security outstanding on the date the Company exercises its rights to defer the Contract Adjustment Payments; (ii) as a result of a reclassification of the Company's Capital Stock or the exchange or conversion of one class or series of the Company's Capital Stock for another class or series of the Company's Capital Stock; (iii) the purchase of fractional interests in shares of any series of the Company's Capital Stock pursuant to the conversion or exchange provisions of such Capital Stock or the security being converted or exchanged; (iv) dividends or distributions in any series of the Company's Capital Stock (or rights to acquire Capital Stock) or repurchases, acquisitions or redemptions of the Company's Capital Stock in connection with the issuance or exchange of any series of the Company's Capital Stock (or securities convertible into or exchangeable for shares of the Company's Capital Stock); or (v) redemptions, exchanges or repurchases of any rights outstanding under a shareholder rights plan or the declaration or payment thereunder of a dividend or distribution of or with respect to rights in the future. The Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights of the Holders to receive accumulated Contract Adjustment Payments, if any, or any Deferred Contract Adjustment Payments and the obligations of the Holders to purchase Common Shares, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Agent or the Company, if, on or prior to the Share Purchase Date, a Termination Event shall have occurred. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two Business Days thereafter give written notice to the Agent, the Collateral Agent and to the Holders, at their addresses as they appear in the Normal Units Register. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the Pledged Notes or Pledged Treasury Consideration from the Pledge in accordance with the provisions of the Pledge Agreement. Upon registration of transfer of this Normal Units Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee, except as may be required by the Agent pursuant to the Purchase Contract Agreement), under the terms of the Purchase Contract Agreement, the Purchase Contracts evidenced hereby and the Pledge Agreement and the transferor shall be released from the obligations under the Purchase Contract Agreement, the Purchase Contracts evidenced by this Normal Units Certificate and the Pledge Agreement. The Company covenants and agrees, and the Holder, by its acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. A-10 The Holder of this Normal Units Certificate, by its acceptance hereof, irrevocably authorizes the Agent to enter into and perform the related Purchase Contracts forming part of the Normal Units evidenced hereby on his behalf as his attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Purchase Contracts by the Company or its trustee in the event that the Company becomes the subject of a case under the Bankruptcy Code, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform such Holder's obligations under such Purchase Contracts, consents to the provisions of the Purchase Contract Agreement, authorizes the Agent to enter into and perform the Pledge Agreement on such Holder's behalf as attorney-in-fact, and consents to the Pledge of the Notes or the appropriate Treasury Consideration underlying this Normal Units Certificate pursuant to the Pledge Agreement. The Holder further covenants and agrees, that, to the extent and in the manner provided in the Purchase Contract Agreement and the Pledge Agreement, but subject to the terms thereof, payments in respect of the Pledged Notes or the Pledged Treasury Consideration to be paid upon settlement of such Holder's obligations to purchase Common Shares under the Purchase Contract, shall be paid on the Share Purchase Date by the Collateral Agent to the Company in satisfaction of such Holder's obligations under such Purchase Contract and such Holder shall acquire no right, title or interest in such payments. The obligations of each Holder to pay the Purchase Price are non-recourse obligations and except to the extent paid by Cash Settlement, Early Settlement or Merger Early Settlement, are payable solely out of the proceeds of any Collateral pledged to secure the obligations of the Holders and in no event will Holders be liable for any deficiency between such payments and the Purchase Price. Notwithstanding anything to the contrary herein, the Company shall not be obligated to issue any Common Shares in respect of a Purchase Contract or deliver any certificates therefor to the Holder of the related Unit unless the Company shall have received payment in full of the aggregate Purchase Price for the Common Shares to be purchased thereunder by such Holder in the manner herein set forth. Each Holder of any Unit, and each Beneficial Owner thereof, by its acceptance thereof or of its interest therein, further agrees to treat (i) itself as the owner of the related Notes, Treasury Consideration or Treasury Securities, as the case may be, and (ii) the Notes as indebtedness of Platinum Underwriters Finance, Inc. in each case, for United States federal, state and local income and franchise tax purposes. Subject to certain exceptions, the provisions of the Purchase Contract Agreement may be amended with the consent of the Holders of a majority of the Purchase Contracts. The Purchase Contracts shall for all purposes be governed by, and construed in accordance with, the laws of the State of New York. The Company, the Agent and its Affiliates and any agent of the Company or the Agent may treat the Person in whose name this Normal Units Certificate is registered as the owner of the Normal Units evidenced hereby _______ quarterly payments of ____for the purpose of receiving quarterly payments of interest on the Notes A-11 or the Treasury Consideration, as the case may be, receiving payments of Contract Adjustment Payments, if any, and any Deferred Contract Adjustment Payments, performance of the Purchase Contracts and for all other purposes whatsoever, whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Company, the Agent, such Affiliates nor any such agent shall be affected by notice to the contrary. The Purchase Contracts shall not, prior to the settlement thereof, entitle the Holder to any of the rights of a holder of Common Shares. A copy of the Purchase Contract Agreement is available for inspection at the offices of the Agent. A-12 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian -------------------------------- (cust) (minor) Under Uniform Gifts to Minors Act -------------------------------- (State) TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. A-13 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (Please insert Social Security or Taxpayer I.D. or other Identifying Number of Assignee) - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- (Please Print or Type Name and Address Including Postal Zip Code of Assignee) the within Normal Units Certificates and all rights thereunder, hereby irrevocably constituting and appointing ____________________________ attorney to transfer said Normal Units Certificates on the books of Platinum Underwriters Holdings, Ltd. with full power of substitution in the premises. Dated: Signature: ----------------- ------------------------------ NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Normal Units Certificates in every particular, without alteration or enlargement or any change whatsoever. Signature Guarantee: ------------------------------------------------- A-14 SETTLEMENT INSTRUCTIONS The undersigned Holder directs that a certificate for Common Shares deliverable upon settlement on or after the Share Purchase Date of the Purchase Contracts underlying the number of Normal Units evidenced by this Normal Units Certificate be registered in the name of, and delivered, together with a check in payment for any fractional share, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: Signature: ------------------ ---------------------------- Signature Guarantee: ------------------ (if assigned to another person) If shares are to be registered in REGISTERED HOLDER the name of and delivered to a Person other than the Holder, Please print name and address of please (i) print such Person's Registered Holder: name and address and (ii) provide a guarantee of your signature: - ------------------------------------ ----------------------------------- Name Name - ------------------------------------ ----------------------------------- Address Address Social Security or other Taxpayer Identification Number, if any A-15 ELECTION TO SETTLE EARLY The undersigned Holder of this Normal Units Certificate hereby irrevocably exercises the option to effect Early Settlement in accordance with the terms of the Purchase Contract Agreement with respect to the Purchase Contracts underlying the number of Normal Units evidenced by this Normal Units Certificate specified below. The option to effect Early Settlement may be exercised only with respect to Purchase Contracts underlying Normal Units with an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The undersigned Holder directs that a certificate for Common Shares deliverable upon such Early Settlement be registered in the name of, and delivered, together with a check in payment for any fractional share and any Normal Units Certificate representing any Normal Units evidenced hereby as to which Early Settlement of the related Purchase Contracts is not effected, to the undersigned at the address indicated below unless a different name and address have been indicated below. Pledged Notes or Pledged Treasury Consideration deliverable upon such Early Settlement will be transferred in accordance with the transfer instructions set forth below. If Common Shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: Signature: ----------- --------------------------- Signature Guarantee: Signature Guarantee: --------------- ----------------- Number of Units evidenced hereby as to which Early Settlement of the related Purchase Contracts is being elected: If Common Shares are to be REGISTERED HOLDER registered in the name of and delivered to and Pledged Notes or Please print name and address of Pledged Treasury Consideration are Registered Holder: to be transferred to a Person other than the Holder, please print such Person's name and address: - ------------------------------------ ----------------------------------- Name Name - ------------------------------------ ----------------------------------- Address Address Social Security or other Taxpayer Identification Number, if any Transfer instructions for Pledged Notes or Pledged Treasury Consideration transferable upon Early Settlement or a Termination Event: A-16 [TO BE ATTACHED TO GLOBAL CERTIFICATES] SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE The following increases or decreases in this Global Certificate have been made:

A-17 EXHIBIT B FORM OF STRIPPED UNITS CERTIFICATE (FORM OF GLOBAL CERTIFICATE LEGEND) [THIS CERTIFICATE IS A GLOBAL CERTIFICATE WITHIN THE MEANING OF THE PURCHASE CONTRACT AGREEMENT (AS HEREINAFTER DEFINED) AND IS REGISTERED IN THE NAME OF A CLEARING AGENCY OR A NOMINEE THEREOF. THIS CERTIFICATE MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A CERTIFICATE REGISTERED, AND NO TRANSFER OF THIS CERTIFICATE IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH CLEARING AGENCY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE PURCHASE CONTRACT AGREEMENT. Unless this Certificate is presented by an authorized representative of The Depository Trust Company (55 Water Street, New York, New York) to the Company or its agent for registration of transfer, exchange or payment, and any Certificate issued is registered in the name of Cede & Co., or such other name as requested by an authorized representative of The Depository Trust Company, and any payment hereon is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest herein.] Form of Face of Stripped Units Certificate No. CUSIP No. Number of Stripped Units This Stripped Units Certificate certifies that _________ is the registered Holder of the number of Stripped Units set forth above. Each Stripped Unit represents (i) a 1/40 undivided beneficial ownership interest in a Treasury Security, subject to the Pledge of such interest in such Treasury Security by such Holder pursuant to the Pledge Agreement, and (ii) the rights and obligations of the Holder under one Purchase Contract with platinum Underwriters Holdings, Ltd., a Bermuda corporation (the "Company"). All capitalized terms used herein which are defined in the Purchase Contract Agreement have the meaning set forth therein. Pursuant to the Pledge Agreement, the Treasury Security constituting part of each Stripped Unit evidenced hereby has been pledged to the Collateral Agent, for the benefit of the Company, to secure the obligations of the Holder under the Purchase Contract comprising a part of such Stripped Unit to purchase Common Shares of the Company. Prior to the purchase of Common Shares under each Purchase Contract, such Purchase Contracts shall not entitle the Holders of Normal Units Certificates to any of the rights of a holder of Common Shares, including without limitation, the right to vote or B-1 receive any dividends or other payments or to consent or to receive notice as stockholders in respect of the meetings of stockholders, or for the election of directors of the Company or for any other matter or any other rights whatsoever as stockholder of the Company. Each Purchase Contract evidenced hereby obligates the Holder of this Stripped Units Certificate to purchase, and the Company to sell, on -, 2005 (the "Share Purchase Date"), at a price equal to $25 (the "Stated Amount"), a number of Common Shares, $0.01 par value per share ("Common Shares"), of the Company, equal to the Settlement Rate, unless on or prior to the Share Purchase Date there shall have occurred a Termination Event or an Early Settlement or Merger Early Settlement with respect to the Stripped Units of which such Purchase Contract is a part, all as provided in the Purchase Contract Agreement and more fully described on the reverse hereof. The Purchase Price (as defined herein) for the Common Shares purchased pursuant to each Purchase Contract evidenced hereby, if not paid earlier, shall be paid on the Share Purchase Date by application of payments received in respect of the Pledged Treasury Securities pledged to secure the obligations of the Holder under such Purchase Contract in accordance with the terms of the Pledge Agreement. The Company shall pay on each Payment Date in respect of each Purchase Contract forming part of a Stripped Unit evidenced hereby an amount (the "Contract Adjustment Payments") equal to -% per year of the Stated Amount, computed on the basis of a 360-day year of twelve 30-day months, subject to deferral at the option of the Company as provided in the Purchase Contract Agreement and more fully described on the reverse hereof (provided that if on any date on which Contract Adjustment Payments are to be made on the Purchase Contracts is not a Business Day, then payment of the Contract Adjustment Payments payable on that date will be made on the next succeeding day which is a Business Day, and no interest or payment will be paid in respect of the delay, except that if such next succeeding Business Day is in the next succeeding calendar year, such payment will be made on the immediately preceding Business Day). Such Contract Adjustment Payments shall be payable to the Person in whose name this Stripped Units Certificate (or a Predecessor Stripped Units Certificate) is registered at the close of business on the Record Date for such Payment Date. Contract Adjustment Payments will be payable at the office of the Agent in the City of New York or, at the option of the Company, by check mailed to the address of the Person entitled thereto as such address appears on the Normal Units Register. Reference is hereby made to the further provisions set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place. Unless the certificate of authentication hereon has been executed by the Agent by manual signature, this Stripped Units Certificate shall not be entitled to any benefit under the Pledge Agreement or the Purchase Contract Agreement or be valid or obligatory for any purpose. B-2 IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. Dated: ____________ PLATINUM UNDERWRITERS HOLDINGS, LTD. By: ____________________________________ Name: Title: HOLDER SPECIFIED ABOVE (as to obligations of such Holder under the Purchase Contracts evidenced hereby) By: JPMORGAN CHASE BANK, not individually but solely as Attorney-in-Fact of such Holder By:_________________________________ Name: Title: B-3 AGENT'S CERTIFICATE OF AUTHENTICATION This is one of the Stripped Units Certificates referred to in the within-mentioned Purchase Contract Agreement. JPMORGAN CHASE BANK, as Purchase Contract Agent By:____________________________ Authorized Officer B-4 (Form of Reverse of Stripped Units Certificate) Each Purchase Contract evidenced hereby is governed by a Purchase Contract Agreement, dated as of -, 2002 (as may be supplemented from time to time, the "Purchase Contract Agreement"), between the Company and JPMorgan Chase Bank, as Purchase Contract Agent (including its successors thereunder, herein called the "Agent"), to which the Purchase Contract Agreement and supplemental agreements thereto reference is hereby made for a description of the respective rights, limitations of rights, obligations, duties and immunities thereunder of the Agent, the Company and the Holders and of the terms upon which the Stripped Units Certificates are, and are to be, executed and delivered. Each Purchase Contract evidenced hereby obligates the Holder of this Stripped Units Certificate to purchase, and the Company to sell, on the Share Purchase Date at a price equal to $25 (the "Purchase Price"), a number of Common Shares of the Company equal to the Settlement Rate, unless, on or prior to the Share Purchase Date, there shall have occurred a Termination Event or a Cash Settlement, an Early Settlement or Merger Early Settlement with respect to the Unit of which such Purchase Contract is a part. The "Settlement Rate" is equal to (a) if the Applicable Market Value (as defined below) is equal to or greater than $- (the "Threshold Appreciation Price"), - Common Shares per Purchase Contract, (b) if the Applicable Market Value is less than the Threshold Appreciation Price but is greater than $-, the number of Common Shares per Purchase Contract equal to the Stated Amount divided by the Applicable Market Value and (c) if the Applicable Market Value is equal to or less than $-, - Common Shares per Purchase Contract, in each case subject to adjustment as provided in the Purchase Contract Agreement. No fractional Common Shares will be issued upon settlement of Purchase Contracts, as provided in the Purchase Contract Agreement. The "Applicable Market Value" means the average of the Closing Price per Common Share on each of the 20 consecutive Trading Days ending on the third Trading Day immediately preceding the Share Purchase Date or in the event of a Cash Merger, the Cash Merger Date. The "Closing Price" of the Common Shares on any date of determination means the closing sale price (or, if no sale closing price is reported, the last reported sale price) of the Common Shares on the New York Stock Exchange (the "NYSE") on such date or, if the Common Shares are not listed for trading on the NYSE on any such date, as reported in the composite transactions for the principal United States securities exchange on which the Common Shares are so listed, or if the Common Shares are not so listed on a United States national or regional securities exchange, as reported by The Nasdaq Stock Market, or, if the Common Shares are not so reported, the last quoted bid price for the Common Shares in the over-the-counter market as reported by the National Quotation Bureau or similar organization, or, if such bid price is not available, the market value of the Common Shares on such date as determined by a nationally recognized independent investment banking firm retained for this purpose by the Company. B-5 A "Trading Day" means a day on which the Common Shares (A) are not suspended from trading on any national or regional securities exchange or association or over-the-counter market at the close of business and (B) has traded at least once on the national or regional securities exchange or association or over-the-counter market that is the primary market for the trading of the Common Shares at the close of business of such day. Each Purchase Contract evidenced hereby may be settled prior to the Share Purchase Date through Cash Settlement, Early Settlement or Merger Early Settlement, in accordance with the terms of the Purchase Contract Agreement. In accordance with the terms of the Purchase Contract Agreement, the Holder of this Stripped Units Certificate shall pay the Purchase Price for the Common Shares purchased pursuant to each Purchase Contract evidenced hereby (i) by effecting a Cash Settlement, an Early Settlement or Merger Early Settlement or (ii) by application of payments received in respect of the Pledged Treasury Securities underlying the Stripped Units represented by this Stripped Units Certificate. The Company shall not be obligated to issue any Common Shares in respect of a Purchase Contract or deliver any certificates therefor to the Holder unless it shall have received payment in full of the aggregate Purchase Price for the Common Shares to be purchased thereunder in the manner herein set forth. The Stripped Units Certificates are issuable only in registered form and only in denominations of a single Stripped Unit and any integral multiple thereof. The transfer of any Stripped Units Certificate will be registered and Stripped Units Certificates may be exchanged as provided in the Purchase Contract Agreement. The Stripped Units Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents permitted by the Purchase Contract Agreement. No service charge shall be required for any such registration of transfer or exchange of a Stripped Units Certificate, but the Company and the Agent may require payment from the Holder of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Certificates, other than exchanges not involving any transfer as provided for in the Purchase Contract Agreement. The Holder of a Stripped Unit may substitute for the Pledged Treasury Securities securing its obligations under the related Purchase Contract Notes or the appropriate Treasury Consideration in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. From and after such Collateral Substitution, the Unit for which such Pledged Notes or Pledged Treasury Consideration secures the Holder's obligation under the Purchase Contract shall be referred to as a "Normal Unit." A Holder that elects to substitute Notes or the appropriate Treasury Consideration for Pledged Treasury Securities, thereby reestablishing Normal Units, shall be responsible for any fees or expenses payable in connection therewith. Except as provided in the Purchase Contract Agreement, for so long as the Purchase Contract underlying a Stripped Unit remains in effect, such Stripped Unit shall not be separable B-6 into its constituent parts, and the rights and obligations of the Holder of such Stripped Unit in respect of the Pledged Treasury Security and the Purchase Contract comprising such Stripped Unit may be acquired, and may be transferred and exchanged, only as a Stripped Unit. A Holder of Normal Units may establish Stripped Units at any time from and after the date of the Purchase Contract Agreement and on or prior to the second Business Day immediately preceding the Share Purchase Date by depositing with the Collateral Agent Treasury Securities in exchange for the release of the Pledged Notes or the appropriate Pledged Treasury Consideration in accordance with the terms of the Purchase Contract Agreement and the Pledge Agreement. Subject to the next succeeding paragraph, the Company shall pay, on each Payment Date, the Contract Adjustment Payments, if any, payable in respect of each Purchase Contract to the Person in whose name the Stripped Units Certificate (or one or more Predecessor Stripped Units Certificates) evidencing such Purchase Contract is registered on the Stripped Units Register at the close of business on the Record Date next preceding such Payment Date. Contract Adjustment Payments, if any, will be payable at the Corporate Trust Office or, at the option of the Company, by check mailed to the address of the Person entitled thereto at such Person's address as it appears on the Stripped Units Register or by wire transfer to the account designated by such Person in writing. The Company shall have the right, at any time prior to the Share Purchase Date, to defer the payment of any or all of the Contract Adjustment Payments otherwise payable on any Payment Date, but only if the Company shall give the Holders and the Agent written notice of its election to defer each such Contract Adjustment Payments as provided in the Purchase Contract Agreement. Any Contract Adjustment Payments so deferred shall, to the extent permitted by law, accrue additional Contract Adjustment Payments thereon at the rate of -% per year (computed on the basis of a 360-day year of twelve 30-day months), compounding on each succeeding Payment Date, until paid in full (such deferred installments of Contract Adjustment Payments, if any, together with the additional Contract Adjustment Payments, if any, accrued thereon, are referred to herein as the "Deferred Contract Adjustment Payments"). Deferred Contract Adjustment Payments, if any, shall be due on the next succeeding Payment Date except to the extent that payment is deferred pursuant to the Purchase Contract Agreement. No Contract Adjustment Payments may be deferred to a date that is after the Share Purchase Date and no such deferral period may end other than on a Payment Date. In the event that the Company elects to defer the payment of Contract Adjustment Payments on the Purchase Contracts until a Payment Date prior to the Share Purchase Date, then all Deferred Contract Adjustment Payments, if any, shall be payable to the registered Holders as of the close of business on the Record Date immediately preceding such Payment Date. B-7 In the event that the Company elects to defer the payment of Contract Adjustment Payments on the Purchase Contracts until the Share Purchase Date, the Holder of this Stripped Units Certificate will receive on the Share Purchase Date, in lieu of a cash payment, a number of Common Shares (in addition to the number of Common Shares equal to the Settlement Rate) equal to (i) the aggregate amount of Deferred Contract Adjustment Payments payable to the Holder of this Stripped Units Certificate divided by (ii) the Applicable Market Value. In the event the Company exercises its option to defer the payment of Contract Adjustment Payments, then, until the Deferred Contract Adjustment Payments have been paid, the Company shall not, and will not permit any subsidiary of the Company to, declare or pay dividends on, make distributions with respect to, or redeem, purchase or acquire, or make a liquidation payment with respect to, any of the Company's Capital Stock other than (i) purchases, redemptions or acquisitions of shares of the Company's Capital Stock in connection with any employment contract, benefit plan or other similar arrangement with or for the benefit of employees, officers, directors or agents or a stock purchase or dividend reinvestment plan, or the satisfaction by the Company of its obligations pursuant to any contract or security outstanding on the date the Company exercises its rights to defer the Contract Adjustment Payments; (ii) as a result of a reclassification of the Company's Capital Stock or the exchange or conversion of one class or series of the Company's Capital Stock for another class or series of the Company's Capital Stock; (iii) the purchase of fractional interests in shares of the Company's Capital Stock pursuant to the conversion or exchange provisions of such Capital Stock or the security being converted or exchanged; (iv) dividends or distributions in any series of the Company's Capital Stock (or rights to acquire Capital Stock) or repurchases, acquisitions or redemptions of the Company's Capital Stock in connection with the issuance or exchange of any series of the Company's Capital Stock (or securities convertible into or exchangeable for shares of the Company's Capital Stock); or (v) redemptions, exchanges or repurchases of any rights outstanding under a shareholder rights plan or the declaration or payment thereunder of a dividend or distribution of or with respect to rights in the future. The Purchase Contracts and all obligations and rights of the Company and the Holders thereunder, including, without limitation, the rights of the Holders to receive accumulated Contract Adjustment Payments, if any, or any Deferred Contract Adjustment Payments, and the obligations of the Holders to purchase Common Shares, shall immediately and automatically terminate, without the necessity of any notice or action by any Holder, the Agent or the Company, if, on or prior to the Share Purchase Date, a Termination Event shall have occurred. Upon the occurrence of a Termination Event, the Company shall promptly but in no event later than two business days thereafter give written notice to the Agent, the Collateral Agent and to the Holders, at their addresses as they appear in the Stripped Units Register. Upon and after the occurrence of a Termination Event, the Collateral Agent shall release the Pledged Treasury Securities from the Pledge in accordance with the provisions of the Pledge Agreement. B-8 Upon registration of transfer of this Stripped Units Certificate, the transferee shall be bound (without the necessity of any other action on the part of such transferee, except as may be required by the Agent pursuant to the Purchase Contract Agreement), under the terms of the Purchase Contract Agreement, the Purchase Contracts evidenced hereby and the Pledge Agreement and the transferor shall be released from the obligations under the Purchase Contract Agreement, the Purchase Contracts evidenced by this Stripped Units Certificate and the Pledge Agreement. The Company covenants and agrees, and the Holder, by his acceptance hereof, likewise covenants and agrees, to be bound by the provisions of this paragraph. The Holder of this Stripped Units Certificate, by its acceptance hereof, irrevocably authorizes the Agent to enter into and perform the related Purchase Contracts forming part of the Stripped Units evidenced hereby on his behalf as its attorney-in-fact, expressly withholds any consent to the assumption (i.e., affirmance) of the Purchase Contracts by the Company or its trustee in the event that the Company becomes the subject of a case under the Bankruptcy Code, agrees to be bound by the terms and provisions thereof, covenants and agrees to perform such Holder's obligations under such Purchase Contracts, consents to the provisions of the Purchase Contract Agreement, authorizes the Agent to enter into and perform the Pledge Agreement on such Holder's behalf as attorney-in-fact, and consents to the Pledge of the Treasury Securities underlying this Stripped Units Certificate pursuant to the Pledge Agreement. The Holder further covenants and agrees, that, to the extent and in the manner provided in the Purchase Contract Agreement and the Pledge Agreement, but subject to the terms thereof, payments in respect of the Pledged Treasury Securities, to be paid upon settlement of such Holder's obligations to purchase Common Shares under the Purchase Contract, shall be paid on the Share Purchase Date by the Collateral Agent to the Company in satisfaction of such Holder's obligations under such Purchase Contract and such Holder shall acquire no right, title or interest in such payments. The obligations of each Holder to pay the Purchase Price are non-recourse obligations and except to the extent paid by Early Settlement or Merger Early Settlement, are payable solely out of the proceeds of any Collateral pledged to secure the obligations of the Holders and in no event will Holders be liable for any deficiency between such payments and the Purchase Price. Each Holder of any Unit, and each Beneficial Owner thereof, by its acceptance thereof or of its interest therein, further agrees to treat (i) itself as the owner of the related Notes, Treasury Consideration or Treasury Securities, as the case may be, and (ii) the Notes as indebtedness of the Platinum Underwriters Finance, Inc., in each case, for United States federal, state and local income and franchise tax purposes. Subject to certain exceptions, the provisions of the Purchase Contract Agreement may be amended with the consent of the Holders of a majority of the Purchase Contracts. B-9 The Purchase Contracts shall for all purposes be governed by and deemed to be a contract under, and construed in accordance with, the laws of the State of New York, without regard to conflicts of laws principles thereof. The Company, the Agent and its Affiliates and any agent of the Company or the Agent may treat the Person in whose name this Stripped Units Certificate is registered as the owner of the Stripped Units evidenced hereby for the purpose of receiving any Contract Adjustment Payments, if any, and any Deferred Contract Adjustment Payments performance of the Purchase Contracts and for all other purposes whatsoever, whether or not any payments in respect thereof be overdue and notwithstanding any notice to the contrary, and neither the Company, the Agent, such Affiliate, nor any such agent shall be affected by notice to the contrary. The Purchase Contracts shall not, prior to the settlement thereof, entitle the Holder to any of the rights of a holder of Common Shares. A copy of the Purchase Contract Agreement is available for inspection at the offices of the Agent. B-10 ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations: TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian -------------------------------- (cust) (minor) Under Uniform Gifts to Minors Act -------------------------------- (State) TEN ENT - as tenants by the entireties JT TEN - as joint tenants with right of survivorship and not as tenants in common Additional abbreviations may also be used though not in the above list. B-11 ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto - ----------------------------------------------------------------------- - ----------------------------------------------------------------------- (Please insert Social Security or Taxpayer I.D. or other Identifying Number of Assignee) - ----------------------------------------------------------------------- - ----------------------------------------------------------------------- (Please Print or Type Name and Address Including Postal Zip Code of Assignee) the within Stripped Units Certificates and all rights thereunder, hereby irrevocably constituting and appointing ____________________________ attorney to transfer said Stripped Units Certificates on the books of Platinum Underwriters Holdings, Ltd. with full power of substitution in the premises. Dated: Signature: ----------------- ------------------------- NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Stripped Units Certificates in every particular, without alteration or enlargement or any change whatsoever. Signature Guarantee: -------------------------------------------------- B-12 SETTLEMENT INSTRUCTIONS The undersigned Holder directs that a certificate for Common Shares deliverable upon settlement on or after the Share Purchase Date of the Purchase Contracts underlying the number of Stripped Units evidenced by this Stripped Units Certificate be registered in the name of, and delivered, together with a check in payment for any fractional share, to the undersigned at the address indicated below unless a different name and address have been indicated below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: Signature: -------------- ------------------------------ Signature Guarantee: -------------------- (if assigned to another person) If shares are to be registered in REGISTERED HOLDER the name of and delivered to a Person other than the Holder, Please print name and address of please (i) print such Person's Registered Holder: name and address and (ii) provide a guarantee of your signature: - ------------------------------------ ----------------------------------- Name Name - ------------------------------------ ----------------------------------- Address Address Social Security or other Taxpayer Identification Number, if any B-13 ELECTION TO SETTLE EARLY The undersigned Holder of this Stripped Units Certificate hereby irrevocably exercises the option to effect Early Settlement in accordance with the terms of the Purchase Contract Agreement with respect to the Purchase Contracts underlying the number of Stripped Units evidenced by this Stripped Units Certificate specified below. The option to effect Early Settlement may be exercised only with respect to Purchase Contracts underlying Stripped Units with an aggregate Stated Amount equal to $1,000 or an integral multiple thereof. The undersigned Holder directs that a certificate for Common Shares deliverable upon such Early Settlement be registered in the name of, and delivered, together with a check in payment for any fractional share and any Stripped Units Certificate representing any Stripped Units evidenced hereby as to which Early Settlement of the related Purchase Contracts is not effected, to the undersigned at the address indicated below unless a different name and address have been indicated below. Pledged Treasury Securities deliverable upon such Early Settlement will be transferred in accordance with the transfer instructions set forth below. If shares are to be registered in the name of a Person other than the undersigned, the undersigned will pay any transfer tax payable incident thereto. Dated: Signature: ----------- ------------------------------ Signature Guarantee: -------------------- Number of Units evidenced hereby as to which Early Settlement of the related Purchase Contracts is being elected: If Common Shares are to be in REGISTERED HOLDER the name of and delivered to and Pledged Treasury Securities Please print name and address of are to be transferred to a Person Registered Holder: other than the Holder, please print such Person's name and address: - ------------------------------------ ----------------------------------- Name Name - ------------------------------------ ----------------------------------- Address Address Social Security or other Taxpayer Identification Number, if any Transfer instructions for Pledged Treasury Securities, transferable upon Early Settlement or a Termination Event: B-14 [TO BE ATTACHED TO GLOBAL CERTIFICATES] SCHEDULE OF INCREASES OR DECREASES IN GLOBAL CERTIFICATE The following increases or decreases in this Global Certificate have been made:

B-15 EXHIBIT C INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT State Street Bank - - - - - - Attention: - Re: Equity Security Units of Platinum Underwriters HOLDINGS, LTD. (THE "COMPANY") We hereby notify you in accordance with Section 4.1 of the Pledge Agreement, dated as of -, 2002, among the Company, you, as Collateral Agent, Custodial Agent and Securities Intermediary, and us, as Purchase Contract Agent and as attorney-in-fact for the holders of [Normal Units] [Stripped Units] from time to time, that the holder of securities listed below (the "Holder") has elected to substitute [$ _______ aggregate principal amount of Treasury Securities (CUSIP No. _____)] [$_______ principal amount of Notes or the appropriate Treasury Consideration, as the case may be,] in exchange for the related [Pledged Notes or Pledged Treasury Consideration] [Pledged Treasury Securities (CUSIP No. ____),] held by you in accordance with the Pledge Agreement and has delivered to us a notice stating that the Holder has transferred [Treasury Securities] [Notes or the appropriate Treasury Consideration] to you, as Collateral Agent. We hereby instruct you, upon receipt of such [Pledged Treasury Securities] [Pledged Notes or Pledged Treasury Consideration], and upon the payment by such Holder of any applicable fees, to release the [Notes or Treasury Consideration, as the case may be,] [Treasury Securities] related to such [Normal Units] [Stripped Units] to us in accordance with the Holder's instructions. Date: ----------------- JPMORGAN CHASE BANK, As Purchase Contract Agent under the Purchase Contract Agreement, dated as of -, 2002, between the Company and the Purchase Contract Agent By: ----------------------------------- Name: Title: C-1 Please print name and address of Registered Holder electing to substitute [Treasury Securities] [Notes or Treasury Consideration, as the case may be,] for the [Pledged Notes or Pledged Treasury Consideration, as the case may be,] [Pledged Treasury Securities]: Name Address Social Security or other Taxpayer Identification Number, if any C-2 EXHIBIT D INSTRUCTION TO PURCHASE CONTRACT AGENT JPMorgan Chase Bank 450 West 33rd Street New York, New York 10001 Attn: Institutional Trust Services Re: Equity Security Units of Platinum Underwriters Holdings, Ltd. (The "Company") ----------------------------------------------- The undersigned Holder hereby notifies you, as Purchase Contract Agent under the Purchase Contract Agreement, dated as of -, 2002, between the Company and you, that it has delivered to State Street Bank, as Collateral Agent, Custodial Agent and Securities Intermediary [$_________ aggregate principal amount of Treasury Securities] [$_________ principal amount of Notes or the appropriate Treasury Consideration, as the case may be,] in exchange for the related [Pledged Notes or Pledged Treasury Consideration, as the case may be,] [Pledged Treasury Securities] held by the Collateral Agent, in accordance with Section 4.1 of the Pledge Agreement, dated as of -, 2002, among you, the Company and the Collateral Agent. The undersigned Holder has paid the Collateral Agent all applicable fees relating to such exchange. The undersigned Holder hereby instructs you to instruct the Collateral Agent to release to you on behalf of the undersigned Holder the [Pledged Notes or Pledged Treasury Consideration, as the case may be,] [Pledged Treasury Securities] related to such [Normal Units] [Stripped Units]. Date: By: ------------------------------------- Signature Guarantee: -------------------- Dated: Please print name and address of Registered Holder: Name Social Security or other Taxpayer Identification Number, if any Address EX-4.5 9 a2088388zex-4_5.txt EXHIBIT 4.5 EXHIBIT 4.5 PLATINUM UNDERWRITERS HOLDINGS, LTD. STATE STREET BANK AS COLLATERAL AGENT, CUSTODIAL AGENT AND SECURITIES INTERMEDIARY AND JPMORGAN CHASE BANK AS PURCHASE CONTRACT AGENT FORM OF PLEDGE AGREEMENT DATED AS OF -, 2002 TABLE OF CONTENTS ARTICLE I DEFINITIONS SECTION 1.1 Definitions...................................................................2 ARTICLE II PLEDGE; CONTROL AND PERFECTION SECTION 2.1 The Pledge....................................................................4 SECTION 2.2 Control and Perfection........................................................6 ARTICLE III PAYMENTS ON COLLATERAL SECTION 3.1 Payments......................................................................8 SECTION 3.2 Application of Payments.......................................................9 ARTICLE IV SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES SECTION 4.1 Collateral Substitution and the Creation of Stripped Units....................9 SECTION 4.2 Collateral Substitution and the Re-Creation of Normal Units..................10 SECTION 4.3 Termination Event............................................................10 SECTION 4.4 Early Settlement; Merger Early Settlement; Cash Settlement...................11 SECTION 4.5 Remarketing; Application of Proceeds; Settlement.............................12 ARTICLE V VOTING RIGHTS -- NOTES SECTION 5.1 Exercise by Purchase Contract Agent..........................................14 ARTICLE VI RIGHTS AND REMEDIES; TAX EVENT REDEMPTION SECTION 6.1 Rights and Remedies of the Collateral Agent..................................15 SECTION 6.2 Substitutions................................................................16 SECTION 6.3 Tax Event Redemption.........................................................16 ARTICLE VII REPRESENTATIONS AND WARRANTIES; COVENANTS SECTION 7.1 Representations and Warranties of the Holders................................17 SECTION 7.2 Representations and Warranties of the Collateral Agent, Custodial Agent and Securities Intermediary..................................17 SECTION 7.3 Covenants....................................................................18 ARTICLE VIII THE COLLATERAL AGENT SECTION 8.1 Appointment, Powers and Immunities...........................................18 SECTION 8.2 Instructions of the Company..................................................20 SECTION 8.3 Reliance.....................................................................20 SECTION 8.4 Rights in Other Capacities...................................................20 SECTION 8.5 Non-Reliance on Collateral Agent.............................................21 SECTION 8.6 Compensation and Indemnity...................................................21 SECTION 8.7 Failure to Act...............................................................22 SECTION 8.8 Resignation..................................................................22 SECTION 8.9 Right to Appoint Agent or Advisor............................................24 SECTION 8.10 Survival.....................................................................24 SECTION 8.11 Exculpation..................................................................24 ARTICLE IX AMENDMENT SECTION 9.1 Amendment Without Consent of Holders.........................................24 SECTION 9.2 Amendment with Consent of Holders............................................25 SECTION 9.3 Execution of Amendments......................................................26 SECTION 9.4 Effect of Amendments.........................................................26 SECTION 9.5 Reference to Amendments......................................................26 ARTICLE X MISCELLANEOUS SECTION 10.1 No Waiver....................................................................26 SECTION 10.2 GOVERNING LAW................................................................27 SECTION 10.3 Notices......................................................................27 SECTION 10.4 Successors and Assigns.......................................................27 SECTION 10.5 Counterparts.................................................................28 SECTION 10.6 Severability.................................................................28 SECTION 10.7 Expenses, Etc................................................................28 SECTION 10.8 Security Interest Absolute...................................................28 SECTION 10.9 Waiver of Jury Trial.........................................................29

EXHIBIT A Instruction from Purchase Contract Agent to Collateral Agent EXHIBIT B Instruction to Purchase Contract Agent EXHIBIT C Instruction to Custodial Agent Regarding Remarketing EXHIBIT D Instruction to Custodial Agent Regarding Withdrawal from Remarketing PLEDGE AGREEMENT PLEDGE AGREEMENT, dated as of -, 2002 (this "Agreement"), among Platinum Underwriters Limited, Ltd., a Bermuda corporation (the "Company"), State Street Bank, -, not individually but solely as collateral agent (in such capacity, together with its successors in such capacity, the "Collateral Agent"), as custodial agent (in such capacity, together with its successors in such capacity, the "Custodial Agent") and as "securities intermediary" as defined in Section 8-102(a)(14) of the Code (as defined herein) (in such capacity, together with its successors in such capacity, the "Securities Intermediary"), and JPMorgan Chase Bank, a New York banking corporation, not individually but solely as purchase contract agent and as attorney-in-fact of the Holders from time to time of the Units (in such capacity, together with its successors in such capacity, the "Purchase Contract Agent") under the Purchase Contract Agreement (as defined herein). Terms used but not otherwise defined herein have the meanings ascribed to them in the Purchase Contract Agreement. RECITALS WHEREAS, the Company and the Purchase Contract Agent are parties to the Purchase Contract Agreement, dated as of the date hereof (as modified and supplemented and in effect from time to time, the "Purchase Contract Agreement"), pursuant to which there may be issued Units having a Stated Amount of $25 per Unit, all of which will initially be Normal Units. WHEREAS, each Normal Unit will be comprised of (a) a Purchase Contract and (b) either beneficial ownership of (i) a 1/40, or 2.5%, ownership interest in a Note having a $1,000 principal amount or (ii) following the remarketing of the Notes in accordance with the Purchase Contract Agreement and the Remarketing Agreement or a Tax Event Redemption in accordance with the Purchase Contract Agreement and the terms of the Notes, the appropriate Treasury Consideration. WHEREAS, in accordance with the terms of the Purchase Contract Agreement, a holder of Normal Units may separate the Notes or the appropriate Treasury Consideration, as applicable, from the related Purchase Contracts by substituting for such Notes or the appropriate Treasury Consideration, as the case may be, Treasury Securities that will pay in the aggregate an amount equal to the aggregate Stated Amount of such Normal Units. Upon such separation, the Normal Units will become Stripped Units. Each Stripped Unit will be comprised of (a) a Purchase Contract and (b) a 1/40 undivided beneficial interest in a Treasury Security. WHEREAS, pursuant to the terms of the Purchase Contract Agreement and the Purchase Contracts, the Holders, from time to time, of the Units have irrevocably authorized the Purchase Contract Agent, as attorney-in-fact of such Holders, among other things, to execute and deliver this Agreement on behalf of such Holders and to grant the pledge provided hereby of the Notes, any Treasury Consideration and any Treasury Securities delivered in exchange therefor to secure each Holder's obligations under the related Purchase Contract, as provided herein and subject to the terms hereof. NOW, THEREFORE, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company, the Collateral Agent, the Securities Intermediary, the Custodial Agent and the Purchase Contract Agent, on its own behalf and as attorney-in-fact of the Holders from time to time of the Units, agree as follows: ARTICLE I DEFINITIONS SECTION 1.1 Definitions For all purposes of this agreement, except as otherwise expressly provided or unless the context otherwise requires: (a) capitalized terms used but not defined herein are used as defined in the Purchase Contract Agreement; (b) the defined terms in this Agreement have the meanings assigned to them in this Article and include the plural as well as the singular; and (c) the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision. "Agreement" means this agreement as originally executed or as it may from time to time be supplemented or amended by one or more agreements supplemental hereto entered into pursuant to the applicable provisions hereof. "Code" has the meaning specified in Section 6.1 hereof. "Collateral" has the meaning specified in Section 2.1 hereof. "Collateral Account" means the securities account (number -) maintained at - - in the name "JPMorgan Chase Bank, as Purchase Contract Agent on behalf of the holders of certain securities of Platinum Underwriters Holdings, Ltd., Collateral Account subject to the security interest of State Street Bank, as Collateral Agent, for the benefit of Platinum Underwriters Holdings, Ltd., as pledgee" and any successor account. "Collateral Agent" has the meaning specified in the first paragraph of this Agreement. -2- "Company" means the Person named as the "Company" in the first paragraph of this Agreement until a successor shall have become such, and thereafter "Company" shall mean such successor. "Custodial Agent" has the meaning specified in the first paragraph of this Agreement. "Intermediary" means any entity that in the ordinary course of its business maintains securities accounts for others and is acting in that capacity. "Pledge" has the meaning specified in Section 2.1 hereof. "Pledged Notes" has the meaning specified in Section 2.1 hereof. "Pledged Treasury Consideration" has the meaning specified in Section 2.1 hereof. "Pledged Treasury Securities" has the meaning specified in Section 2.1 hereof. "Proceeds" means all interest, dividends, cash, instruments, securities, financial assets (as defined in Section 8-102(a)(9) of the Code) and other property from time to time received, receivable or otherwise distributed upon the sale, exchange, collection or disposition of the Collateral or any proceeds thereof. "Purchase Contract Agent" has the meaning specified in the first paragraph of this Agreement. "Purchase Contract Agreement" has the meaning specified in the Recitals. "Securities Intermediary" has the meaning specified in the first paragraph of this Agreement. "Security Entitlement" has the meaning set forth in Section 8-102(a) (17) of the Code. "Separate Notes" means any Notes that are not Pledged Notes. "TRADES Regulations" means the regulations of the United States Department of the Treasury, published at 31 C.F.R. Part 357, as amended from time to time. Unless otherwise defined herein, all terms defined in the TRADES Regulations are used herein as therein defined. "Transfer" means, with respect to the Collateral and in accordance with the instructions of the Collateral Agent, the Purchase Contract Agent or the Holder, as applicable: -3- (i) in the case of Collateral consisting of securities which cannot be delivered by book-entry or which the parties agree are to be delivered in physical form, delivery in appropriate physical form to the recipient accompanied by any duly executed instruments of transfer, assignments in blank, transfer tax stamps and any other documents necessary to constitute a legally valid transfer to the recipient; (ii) in the case of Collateral consisting of securities maintained in book-entry form by causing a "securities intermediary" (as defined in Section 8-102(a)(14) of the Code) to (a) credit a "security entitlement" (as defined in Section 8-102(a)(17) of the Code) with respect to such securities to a "securities account" (as defined in Section 8-501(a) of the Code) maintained by or on behalf of the recipient and (b) to issue a confirmation to the recipient with respect to such credit. In the case of Collateral to be delivered to the Collateral Agent, the securities intermediary shall be the Securities Intermediary and the securities account shall be the Collateral Account. In addition, any Transfer of Treasury Securities and Treasury Consideration hereunder shall be made in accordance with the TRADES Regulations and other applicable law. ARTICLE II Pledge; Control and Perfection SECTION 2.1 The Pledge (a) The Holders from time to time acting through the Purchase Contract Agent, as their attorney-in-fact, and the Purchase Contract Agent, as such attorney-in-fact, hereby pledge and grant to the Collateral Agent, for the benefit of the Company, as collateral security for the performance when due by such Holders of their respective obligations under the related Purchase Contracts, a security interest in all of the right, title and interest of the Purchase Contract Agent and such Holders in: (i) (A) the Notes, Treasury Consideration or Treasury Securities constituting a part of the Units, (B) any Treasury Securities delivered in exchange for any Notes or Treasury Consideration, as applicable, in accordance with Section 4.1 hereof, and (C) any Notes or Treasury Consideration, as applicable, delivered in exchange for any Treasury Securities in accordance with Section 4.2 hereof, in each case that have been Transferred to or otherwise received by the Collateral Agent and not released by the Collateral Agent to such Holders under the provisions of this Agreement; -4- (ii) the Collateral Account and all securities, financial assets, security entitlements, cash and other property credited thereto and all Security Entitlements related thereto; and (iii) all Proceeds of the foregoing (all of the foregoing, collectively, the "Collateral"). (b) Prior to or concurrently with the execution and delivery of this Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the Units, shall cause the Notes comprising a part of the Normal Units to be Transferred to the Collateral Agent for the benefit of the Company. (c) The pledge provided in this Section 2.1 is herein referred to as the "Pledge" and the Notes (including any Notes that are delivered pursuant to Section 6.2 hereof), Treasury Consideration and Treasury Securities subject to the Pledge, excluding any Notes, Treasury Consideration or Treasury Securities released from the Pledge as provided in Sections 4.1 and 4.2 hereof, respectively, are hereinafter referred to as "Pledged Notes," "Pledged Treasury Consideration" and "Pledged Treasury Securities," respectively. Subject to the Pledge and the provisions of Section 2.2 hereof, the Holders from time to time shall have full beneficial ownership of the Collateral. For purposes of perfecting the Pledge under applicable law, including, to the extent applicable, the TRADES Regulations or the Uniform Commercial Code as adopted and in effect in any applicable jurisdiction, the Collateral Agent shall be the agent of the Company as provided herein. Whenever directed by the Collateral Agent acting on behalf of the Company, the Securities Intermediary shall have the right to reregister the Notes or any other securities held in physical form in its name. (d) Except as may be required in order to release Notes or Treasury Consideration, as applicable, in connection with a Tax Event Redemption or with a Holder's election to convert its investment from a Normal Unit to a Stripped Unit, or except as otherwise required to release Notes as specified herein, neither the Collateral Agent, the Custodial Agent nor the Securities Intermediary shall relinquish physical possession of any certificate evidencing Notes, Treasury Securities or Treasury Consideration, as applicable, prior to the termination of this Agreement. If it becomes necessary for the Securities Intermediary to relinquish physical possession of a certificate in order to release a portion of the Notes evidenced thereby from the Pledge, the Securities Intermediary shall use its best efforts to obtain physical possession of a replacement certificate evidencing any Notes remaining subject to the Pledge hereunder registered to it or endorsed in blank within fifteen days of the date it relinquished possession. The Securities Intermediary shall promptly notify the Company and the Collateral Agent of the Securities Intermediary's inability to obtain possession of any such replacement certificate as required hereby. -5- SECTION 2.2 Control and Perfection (a) In connection with the Pledge granted in Section 2.1, and subject to the other provisions of this Agreement, the Holders from time to time acting through the Purchase Contract Agent, as their attorney-in-fact, hereby authorize and direct the Securities Intermediary (without the necessity of obtaining the further consent of the Purchase Contract Agent or any of the Holders), and the Securities Intermediary agrees, to comply with and follow any instructions and entitlement orders (as defined in Section 8-102(a)(8) of the Code) that the Collateral Agent may deliver upon the written direction of the Company with respect to the Collateral Account, the Collateral credited thereto and any Security Entitlements with respect to any thereof. In the event the Securities Intermediary receives from the Holders or the Purchase Contract Agent entitlement orders which conflict with entitlement orders received from the Collateral Agent, the Securities Intermediary shall follow the entitlement orders received from the Collateral Agent. Such instructions and entitlement orders may, without limitation, direct the Securities Intermediary to transfer, redeem, assign, or otherwise deliver the Notes, the Treasury Consideration and the Treasury Securities, and any Security Entitlements with respect thereto or sell, liquidate or dispose of such assets through a broker designated by the Company, and to pay and deliver any income, proceeds or other funds derived therefrom to the Company. The Holders from time to time acting through the Purchase Contract Agent hereby further authorize and direct the Collateral Agent, as agent of the Company, to, upon written direction of the Company, itself issue instructions and entitlement orders, and to otherwise take action, with respect to the Collateral Account, the Collateral credited thereto and any Security Entitlements with respect thereto, pursuant to the terms and provisions hereof, all without the necessity of obtaining the further consent of the Purchase Contract Agent or any of the Holders. The Collateral Agent shall be the agent of the Company and shall act only in accordance with the terms hereof or as otherwise directed in writing by the Company. Without limiting the generality of the foregoing, the Collateral Agent shall issue entitlement orders to the Securities Intermediary when and as required by the terms hereof or as otherwise directed in writing by the Company. (b) The Securities Intermediary hereby confirms and agrees that: (i) all securities or other property underlying any financial assets credited to the Collateral Account shall be registered in the name of the Securities Intermediary, or its nominee, indorsed to the Securities Intermediary, or its nominee, or in blank or credited to another Collateral Account maintained in the name of the Securities Intermediary and in no case will any financial asset credited to the Collateral Account be registered in the name of the Purchase Contract Agent, the Collateral Agent, the Company or any Holder, payable to the order of, or specially indorsed to, the Purchase Contract Agent, the Collateral Agent, the Company or any Holder except to the extent the foregoing have been specially indorsed to the Securities Intermediary or in blank; -6- (ii) all property delivered to the Securities Intermediary pursuant to this Agreement (including, without limitation, any Notes, Treasury Consideration or Treasury Securities) will be promptly credited to the Collateral Account; (iii) the Collateral Account is an account to which financial assets are or may be credited, and the Securities Intermediary shall, subject to the terms of this Agreement, treat the Purchase Contract Agent as entitled to exercise the rights of any financial asset credited to the Collateral Account; (iv) the Securities Intermediary has not entered into, and until the termination of this Agreement will not enter into, any agreement with any other Person relating to the Collateral Account and/or any financial assets credited thereto pursuant to which it has agreed to comply with entitlement orders (as defined in Section 8-102(a)(8) of the Code) of such other Person; and (v) the Securities Intermediary has not entered into, and until the termination of this Agreement will not enter into, any agreement with the Company, the Collateral Agent or the Purchase Contract Agent purporting to limit or condition the obligation of the Securities Intermediary to comply with entitlement orders as set forth in this Section 2.2 hereof. (c) The Securities Intermediary hereby agrees that each item of property (whether investment property, financial asset, security, instrument or cash) credited to the Collateral Account shall be treated as a "financial asset" within the meaning of Section 8-102(a)(9) of the Code. (d) In the event of any conflict between this Agreement (or any portion thereof) and any other agreement now existing or hereafter entered into, the terms of this Agreement shall prevail. (e) The Purchase Contract Agent hereby irrevocably constitutes and appoints the Collateral Agent and the Company, with full power of substitution, as the Purchase Contract Agent's attorney-in-fact to take on behalf of, and in the name, place and stead of the Purchase Contract Agent and the Holders, any action necessary or desirable to perfect and to keep perfected the security interest in the Collateral referred to in Section 2.1. The grant of such power-of-attorney shall not be deemed to require of the Collateral Agent any specific duties or obligations not otherwise assumed by the Collateral Agent hereunder. Notwithstanding the foregoing, in no event shall the Collateral Agent or Securities Intermediary be responsible for the preparation or filing of any financing or continuation statements in the appropriate jurisdictions or responsible for maintenance or perfection of any Security Interest hereunder. -7- ARTICLE III PAYMENTS on Collateral SECTION 3.1 Payments So long as the Purchase Contract Agent is the registered owner of the Pledged Notes, Pledged Treasury Consideration or Pledged Treasury Securities, it shall receive all payments thereon. If the Pledged Notes are reregistered such that the Collateral Agent becomes the registered holder, all payments of the principal of, or interest on, the Pledged Notes and all payments of the principal of, or cash distributions on, any Pledged Treasury Consideration or Pledged Treasury Securities, that are received by the Collateral Agent and that are properly payable hereunder shall be paid by the Collateral Agent by wire transfer in same day funds: (i) in the case of (A) quarterly cash distributions on Normal Units which include Pledged Notes or Pledged Treasury Consideration, as the case may be, and (B) any payments of principal or, if applicable, any Tax Event Redemption Treasury Consideration, (as specified in clause (B) of the definition of such term) with respect to any Notes or Treasury Consideration, as the case may be, that have been released from the Pledge pursuant to Section 4.3 hereof, to the Purchase Contract Agent, for the benefit of the relevant Holders of the Normal Units, to the account designated by the Purchase Contract Agent for such purpose no later than 10:00 a.m., New York City time, on the Business Day such payment is received by the Collateral Agent (provided that in the event such payment or payment instructions are received by the Collateral Agent on a day that is not a Business Day or after 9:00 a.m., New York City time, on a Business Day, then such payment shall be made no later than 9:30 a.m., New York City time, on the next succeeding Business Day); (ii) in the case of any payments with respect to any Treasury Securities that have been released from the Pledge pursuant to Section 4.3 hereof, to the Holders of the Stripped Units to the accounts designated by the Purchase Contract Agent in writing for such purpose no later than 2:00 p.m., New York City time, on the Business Day such payment is received by the Collateral Agent (provided that in the event such payment or payment instructions are received by the Collateral Agent on a day that is not a Business Day or after 10:00 a.m., New York City time, on a Business Day, then such payment shall be made no later than 10:30 a.m., New York City time, on the next succeeding Business Day); and (iii) in the case of payments in respect of any Pledged Notes, Pledged Treasury Consideration or Pledged Treasury Securities, as the case may be, to be paid upon settlement of such Holder's obligations to purchase Common -8- Shares under the Purchase Contract, to the Company on the Share Purchase Date in accordance with the procedure set forth in Section 4.5(a) or 4.5(b) hereof, in full satisfaction of the respective obligations of the Holders under the related Purchase Contracts. SECTION 3.2 Application of Payments All payments received by the Purchase Contract Agent as provided herein shall be applied by the Purchase Contract Agent pursuant to the provisions of the Purchase Contract Agreement. If, notwithstanding the foregoing, the Purchase Contract Agent shall receive any payments of principal on account of any Notes or Treasury Consideration, as applicable, that, at the time of such payment, are Pledged Notes or Pledged Treasury Consideration, as the case may be, or a Holder of a Stripped Unit shall receive any payments of principal on account of any Treasury Securities that, at the time of such payment, are Pledged Treasury Securities, the Purchase Contract Agent or such Holder shall hold the same as trustee of an express trust for the benefit of the Company (and promptly deliver the same over to the Company) for application to the obligations of the Holders under the related Purchase Contracts, and the Holders shall acquire no right, title or interest in any such payments of principal so received. ARTICLE IV SUBSTITUTION, RELEASE, REPLEDGE AND SETTLEMENT OF NOTES SECTION 4.1 Collateral Substitution and the Creation of Stripped Units At any time on or prior to the second Business Day immediately preceding the Share Purchase Date, a Holder of Normal Units shall have the right to substitute Treasury Securities for the Pledged Notes or Pledged Treasury Consideration, as the case may be, securing such Holder's obligations under the Purchase Contracts comprising a part of such Normal Units, in integral multiples of 40 Normal Units, or after a successful remarketing of the Notes pursuant to the Purchase Contract Agreement or a Tax Event Redemption, in integral multiples of Normal Units so that Treasury Securities to be deposited and the applicable Treasury Consideration, as the case may be, to be released are in integral multiples of $1,000, by (a) Transferring to the Collateral Agent Treasury Securities having an aggregate principal amount equal to the aggregate Stated Amount of such Normal Units and (b) delivering such Normal Units to the Purchase Contract Agent, accompanied by a notice, substantially in the form of Exhibit B hereto, to the Purchase Contract Agent stating that such Holder has Transferred Treasury Securities to the Collateral Agent pursuant to clause (a) above (stating the principal amount, the maturities and the CUSIP numbers of the Treasury Securities Transferred by such Holder) and requesting that the Purchase Contract Agent instruct the Collateral Agent to release from the Pledge the Pledged Notes or Pledged Treasury Consideration related to such Normal Units, whereupon the Purchase Contract Agent shall promptly give such instruction to the Collateral Agent in the form provided in Exhibit A to the Purchase Contract Agreement; -9- provided that, such Holder may not substitute such Treasury Securities for such Pledged Notes or Pledged Treasury Consideration pursuant to this Section 4.1 during the period from four Business Days prior to any Remarketing Period until the expiration of three Business Days after the end of such Remarketing Period. Upon receipt of Treasury Securities from a Holder of Normal Units and the related instruction from the Purchase Contract Agent, the Collateral Agent shall release the Pledged Notes or Pledged Treasury Consideration and shall promptly Transfer such Pledged Notes or Pledged Treasury Consideration free and clear of any lien, pledge or security interest created hereby, to the Purchase Contract Agent. All items Transferred and/or substituted by any Holder pursuant to this Section 4.1, Section 4.2 or any other Section of this Agreement shall be Transferred and/or substituted free and clear of all liens, claims and encumbrances. SECTION 4.2 Collateral Substitution and the Re-Creation of Normal Units At any time on or prior to the second Business Day immediately preceding the Share Purchase Date, a Holder of Stripped Units shall have the right to reestablish Normal Units (a) consisting of the Purchase Contracts and Notes in integral multiples of 40 Normal Units, or (b) after a remarketing of the Notes pursuant to the Purchase Contract Agreement or a Tax Event Redemption, consisting of the Purchase Contracts and the appropriate Treasury Consideration (identified and calculated by reference to the Treasury Consideration then comprising Normal Units) or the appropriate portion of the Treasury Portfolio in integral multiples of Stripped Units so that the Treasury Consideration to be deposited and the Treasury Securities to be released are in integral multiples of $1,000, by (x) Transferring to the Collateral Agent Notes or the appropriate Treasury Consideration, as the case may be, then comprising such number of Normal Units as is equal to such Stripped Units and (y) delivering such Stripped Units to the Purchase Contract Agent, accompanied by a notice, substantially in the form of Exhibit B hereto, to the Purchase Contract Agent stating that such Holder has transferred Notes or Treasury Consideration to the Collateral Agent pursuant to clause (a) above and requesting that the Purchase Contract Agent instruct the Collateral Agent to release from the Pledge the Pledged Treasury Securities related to such Stripped Units, whereupon the Purchase Contract Agent shall give such instruction to the Collateral Agent in the form provided in Exhibit A. Upon receipt of the Notes or the appropriate Treasury Consideration, as the case may be, from such Holder and the instruction from the Purchase Contract Agent, the Collateral Agent shall release the Pledged Treasury Securities and shall promptly Transfer such Treasury Securities, free and clear of any lien, pledge or security interest created hereby, to the Purchase Contract Agent. SECTION 4.3 Termination Event (a) Upon receipt by the Collateral Agent of written notice from the Company or the Purchase Contract Agent that there has occurred a Termination Event, the Collateral Agent shall release all Collateral from the Pledge and shall promptly Transfer any Pledged Notes or Pledged Treasury Consideration, as the case may be, and Pledged Treasury Securities to the Purchase Contract Agent for the benefit of the Holders of the -10- Normal Units and the Stripped Units, respectively, free and clear of any lien, pledge or security interest or other interest created in favor of the Collateral Agent hereby. (b) If such Termination Event shall result from the Company's becoming a debtor under the Bankruptcy Code, and if the Collateral Agent shall advise the Purchase Contract Agent in writing that the Collateral Agent shall for any reason be unable to promptly effectuate the release and Transfer of all Pledged Notes, Pledged Treasury Consideration or Pledged Treasury Securities, as the case may be, as provided by this Section 4.3, the Purchase Contract Agent shall: (i) use its reasonable best efforts to obtain an opinion of a nationally recognized law firm reasonably acceptable to the Collateral Agent to the effect that, as a result of the Company's being the debtor in such a bankruptcy case, the Collateral Agent will not be prohibited from releasing or Transferring the Collateral as provided in this Section 4.3, and shall deliver such opinion to the Collateral Agent within ten days after the occurrence of such Termination Event, and if (y) the Purchase Contract Agent shall be unable to obtain such opinion within ten days after the occurrence of such Termination Event or (z) the Collateral Agent shall continue, after delivery of such opinion, to refuse to effectuate the release and Transfer of all Pledged Notes, Pledged Treasury Consideration or Pledged Treasury Securities, as the case may be, as provided in this Section 4.3, then the Purchase Contract Agent shall within fifteen days after the occurrence of such Termination Event commence an action or proceeding in the court with jurisdiction of the Company's case under the Bankruptcy Code seeking an order requiring the Collateral Agent to effectuate the release and transfer of all Pledged Notes, Pledged Treasury Consideration or Pledged Treasury Securities, as the case may be, as provided by this Section 4.3 or (ii) commence an action or proceeding like that described in subsection (i) hereof within ten days after the occurrence of such Termination Event. SECTION 4.4 Early Settlement; Merger Early Settlement; Cash Settlement Upon written notice to the Collateral Agent by the Purchase Contract Agent that one or more Holders of Units have elected to effect Early Settlement, Merger Early Settlement or Cash Settlement of their respective obligations under the Purchase Contracts forming a part of such Units in accordance with the terms of the Purchase Contracts and the Purchase Contract Agreement (setting forth the number of such Purchase Contracts as to which such Holders have elected to effect Early Settlement, Merger Early Settlement or Cash Settlement), and that the Purchase Contract Agent has received from such Holders, and paid to the Company as confirmed in writing by the Company, the related Early Settlement Amounts, Merger Early Settlement Amounts or Cash Settlement Amounts, as the case may be, pursuant to the terms of the Purchase -11- Contracts and the Purchase Contract Agreement and that all conditions to such Early Settlement, Merger Early Settlement or Cash Settlement, as the case may be, have been satisfied, then the Collateral Agent shall release from the Pledge (a) Pledged Notes or Pledged Treasury Consideration, as the case may be, in the case of a Holder of Normal Units or (b) Pledged Treasury Securities, in the case of a Holder of Stripped Units, relating to such Purchase Contracts as to which such Holders have elected to effect Early Settlement, Merger Early Settlement or Cash Settlement, and shall Transfer all such Pledged Notes, Pledged Treasury Consideration or Pledged Treasury Securities, as the case may be, free and clear of any lien, pledge or security interest created hereby, to the Purchase Contract Agent for the benefit of the Holders. SECTION 4.5 Remarketing; Application of Proceeds; Settlement (a) Pursuant to the Purchase Contract Agreement, the Purchase Contract Agent shall notify, by 10:00 a.m., New York City time, on the third Business Day preceding the first day of any Remarketing Period, the Remarketing Agent and the Collateral Agent of the aggregate principal amount of Notes comprising part of Normal Units to be remarketed. The Collateral Agent shall, by 10:00 a.m., New York City time, on the Business Day immediately preceding the first day of any Remarketing Period, without any instruction from Holders of Normal Units, deliver (i) the Pledged Notes to be remarketed to the Remarketing Agent for remarketing and (ii) the remaining Pledged Notes to the Purchase Contract Agent for distribution to the Holders that have elected not to participate in the remarketing in accordance with the Purchase Contract Agreement. The Remarketing Agent will deliver the Agent-purchased Treasury Consideration (as defined in the Purchase Contract Agreement) purchased from the proceeds of the remarketing to the Purchase Contract Agent, which shall thereupon deliver such Agent-purchased Treasury Consideration to the Collateral Agent. Upon receipt of the Agent-purchased Treasury Consideration from the Purchase Contract Agent following a successful remarketing, the Collateral Agent, for the benefit of the Company, shall thereupon hold such Agent-purchased Treasury Consideration to secure such Holders' obligations under the Purchase Contracts. On the Share Purchase Date, the Collateral Agent shall apply that portion of the payments received in respect of the Pledged Treasury Consideration equal to the aggregate Stated Amount of the related Normal Units to satisfy in full the obligations of such Holders of Normal Units to pay the Purchase Price under the related Purchase Contracts. The remaining portion of such Proceeds, if any, shall be distributed by the Collateral Agent to the Purchase Contract Agent for payment to each Holder of a Normal Unit a cash payment in an amount equal to 1/40, or 2.5%, of a quarterly interest payment on the $1000 principal amount of a Senior Note at the initial annual rate of - %. (b) Promptly following a Failed Remarketing, the Notes delivered to the Remarketing Agent and the Purchase Contract Agent pursuant to Section 4.5(a) shall be returned to the Collateral Agent, together with written notice from the Remarketing Agent of the Failed Remarketing. The Collateral Agent, for the benefit of the Company, shall thereupon hold such Notes to secure the obligations of Holders of Normal Units -12- under the Purchase Contracts. The Remarketing Agent shall make one or more attempts to remarket the Notes in accordance with the procedures set forth in the Purchase Contract Agreement and the Remarketing Agreement between the Remarketing Date and the Share Purchase Date, provided that the requirements of Section 5.4(b)(ii) of the Purchase Contract Agreement have been met. If by 4:00 p.m., New York City time, on the third Business Day immediately preceding the Share Purchase Date the Remarketing Agent has failed to remarket the Notes at a price equal to at least 100.25% of the Remarketing Value (as described in the Purchase Contract Agreement), the "Last Failed Remarketing" shall be deemed to have occurred. In this case, the Remarketing Agent shall advise the Collateral Agent in writing that it cannot remarket the related Pledged Notes of such Holders of Normal Units and the Notes delivered to the Remarketing Agent pursuant to Section 4.5(a) shall promptly be returned to the Collateral Agent. The Collateral Agent, for the benefit of the Company will, at the written direction of the Company, deliver or dispose of the Pledged Notes in accordance with the Company's written instructions to satisfy in full, from any such disposition or retention, such Holders' obligations to pay the Purchase Price for the Common Shares; provided that if upon a Failed Remarketing or the Last Failed Remarketing, as the case may be, the Collateral Agent delivers or disposes of the Pledged Notes in accordance with the written instructions of the Company, any accrued and unpaid interest on such Notes will become payable by the Company to the Purchase Contract Agent for payment to the Holder of the Normal Units to which such Notes relate in accordance with the Purchase Contract Agreement. (c) In the event a Holder of Stripped Units has not made an Early Settlement, Merger Early Settlement or Cash Settlement of the Purchase Contracts underlying its Stripped Units, such Holder shall be deemed to have elected to pay for the Common Shares to be issued under such Purchase Contracts from the payments received in respect of the related Pledged Treasury Securities. Without receiving any instruction from any such Holder of Stripped Units, the Collateral Agent shall apply such payments to the settlement of such Purchase Contracts on the Share Purchase Date pursuant to written instructions from the Purchase Contract Agent. In the event the payments received in respect of the related Pledged Treasury Securities are in excess of the aggregate Purchase Price of the Purchase Contracts being settled thereby, the Collateral Agent shall distribute such excess, when received, to the Purchase Contract Agent for Holders of Stripped Units. (d) Pursuant to the Remarketing Agreement and Purchase Contract Agreement, on or prior to the fourth Business Day preceding the first day of any Remarketing Period, but no earlier than the Payment Date immediately preceding - -, 2005, holders of Separate Notes may elect to have their Separate Notes remarketed by delivering their Separate Notes, together with a notice of such election, substantially in the form of Exhibit C hereto, to the Custodial Agent. On the third Business Day prior to the first day of any Remarketing Period, by 10:00 a.m., New York City time, the Custodial Agent shall notify the Remarketing Agent of the principal amount of such Separate Notes to be remarketed. The Custodial Agent will hold such Separate Notes in -13- an account separate from the Collateral Account. A holder of Separate Notes electing to have its Separate Notes remarketed will also have the right to withdraw such election by written notice to the Custodial Agent, substantially in the form of Exhibit D hereto, on or prior to the fourth Business Day immediately preceding the first day of any Remarketing Period, upon which notice the Custodial Agent will return such Separate Notes to such holder. On the Business Day immediately preceding the first day of any Remarketing Period, the Custodial Agent will deliver to the Remarketing Agent for remarketing all Separate Notes delivered to the Custodial Agent pursuant to this Section 4.5(d) and not withdrawn pursuant to the terms hereof prior to such date. The portion of the proceeds from such remarketing equal to the amount calculated in respect of such Separate Notes as set forth in Section 5.4(b) of the Purchase Contract Agreement will automatically be remitted by the Remarketing Agent to the Custodial Agent for the benefit of the holders of such Separate Notes. In addition, after deducting as the remarketing fee an amount not exceeding 25 basis points (.25%) of the total proceeds of such remarketing of such Separate Notes, the Remarketing Agent will remit to the Custodial Agent the remaining portion of the proceeds, if any, for such holders. If, despite using commercially reasonable best efforts, the Remarketing Agent advises the Custodial Agent in writing that there has been a Failed Remarketing, the Remarketing Agent will promptly return such Notes to the Custodial Agent for redelivery to the holders of such Separate Notes. For purposes of this Section 4.5(d), a "holder" of a Separate Notes shall mean the Person in whose name such Separate Notes is registered on the books of the registrar for the Notes. ARTICLE V Voting Rights -- Notes SECTION 5.1 Exercise by Purchase Contract Agent The Purchase Contract Agent may exercise, or refrain from exercising, any and all voting and other consensual rights pertaining to the Pledged Notes or any part thereof for any purpose not inconsistent with the terms of this Agreement and in accordance with the terms of the Purchase Contract Agreement; provided that the Purchase Contract Agent shall not exercise or, as the case may be, shall not refrain from exercising such right if, in the judgment of the Company, such action would impair or otherwise have a material adverse effect on the value of all or any of the Pledged Notes; and provided, further, that the Purchase Contract Agent shall give the Company and the Collateral Agent at least five Business Days' prior written notice of the manner in which it intends to exercise, or its reasons for refraining from exercising, any such right. Upon receipt of any notices and other communications in respect of any Pledged Notes, including notice of any meeting at which holders of Notes are entitled to vote or solicitation of consents, waivers or proxies of holders of Notes, the Collateral Agent shall use reasonable efforts to send promptly to the Purchase Contract Agent such notice or communication, and as soon as reasonably practicable after receipt of a written request therefor from the Purchase -14- Contract Agent, execute and deliver to the Purchase Contract Agent such proxies and other instruments in respect of such Pledged Notes (in form and substance satisfactory to the Collateral Agent) as are prepared by the Purchase Contract Agent with respect to the Pledged Notes. ARTICLE VI Rights and Remedies; TAX EVENT REDEMPTION SECTION 6.1 Rights and Remedies of the Collateral Agent (a) In addition to the rights and remedies available at law or in equity, after an event of default under the Purchase Contracts, the Collateral Agent shall have all of the rights and remedies with respect to the Collateral of a secured party under the Uniform Commercial Code (or any successor thereto) as in effect in the State of New York from time to time (the "Code") (whether or not the Code is in effect in the jurisdiction where the rights and remedies are asserted) and the TRADES Regulations and such additional rights and remedies to which a secured party is entitled under the laws in effect in any jurisdiction where any rights and remedies hereunder may be asserted. Wherever reference is made in this Agreement to any section of the Code, such reference shall be deemed to include a reference to any provision of the Code which is a successor to, or amendment of, such section. Without limiting the generality of the foregoing, such remedies may include, to the extent permitted by applicable law, (i) retention of the Pledged Notes or other Collateral in full satisfaction of the Holders' obligations under the Purchase Contracts or (ii) sale of the Pledged Notes or other Collateral in one or more public or private sales or otherwise at the written direction of the Company. (b) Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, in the event the Collateral Agent is unable to make payments to the Company on account of any Pledged Treasury Consideration or Pledged Treasury Securities as provided in Article III hereof in satisfaction of the obligations of the Holder of the Units of which such Pledged Treasury Consideration or Pledged Treasury Securities, as applicable, is a part under the related Purchase Contracts, the inability to make such payments shall constitute an event of default under the Purchase Contracts and the Collateral Agent shall have and may exercise, with reference to such Pledged Treasury Securities or such Pledged Treasury Consideration, as applicable, and such obligations of such Holder, any and all of the rights and remedies available to a secured party under the Code and the TRADES Regulations after default by a debtor, and as otherwise granted herein or under any other law. (c) Without limiting any rights or powers otherwise granted by this Agreement to the Collateral Agent, the Collateral Agent is hereby irrevocably authorized to receive and collect all payments of (i) the principal amount of, or interest on, the Pledged Notes, or (ii) the principal amount of the Pledged Treasury Consideration or -15- Pledged Treasury Securities, subject, in each case, to the provisions of Article III, and as otherwise granted herein. (d) The Purchase Contract Agent, individually and as attorney-in-fact for each Holder of Units, agrees that, from time to time, upon the written request of the Company or the Collateral Agent (acting upon the written request of the Company), the Purchase Contract Agent or such Holder shall execute and deliver such further documents and do such other acts and things as may be necessary, including as the Company or the Collateral Agent (acting upon the written request of the Company) may reasonably request in order to maintain the Pledge, and the perfection and priority thereof, and to confirm the rights of the Collateral Agent hereunder. The Purchase Contract Agent shall have no liability to any Holder for executing any documents or taking any such acts requested by the Company or the Collateral Agent (acting upon the written request of the Company) hereunder, except for liability for its own negligent act, its own negligent failure to act, its own bad faith or its own willful misconduct. SECTION 6.2 Substitutions Whenever a Holder has the right to substitute Treasury Securities, Notes, or Treasury Consideration, as the case may be, for Collateral held by the Collateral Agent, such substitution shall not constitute a novation of the security interest created hereby. SECTION 6.3 Tax Event Redemption Upon the occurrence of a Tax Event Redemption prior to the Share Purchase Date or the earlier successful remarketing of the Notes pursuant to Section 5.4 of the Purchase Contract Agreement and the receipt of the Redemption Price of the Pledged Notes by the Collateral Agent, the Collateral Agent will, at the written direction of the Company, apply an amount, out of such Redemption Price, equal to the aggregate Redemption Amount with respect to the Pledged Notes to purchase on behalf of the Holders of Normal Units the Tax Event Redemption Treasury Consideration and promptly remit the remaining portion of such Redemption Price, if any, to the Purchase Contract Agent for payment to the Holders of Normal Units. The Collateral Agent shall transfer the Tax Event Redemption Treasury Consideration to the Collateral Account to secure the obligation of all Holders of Normal Units to purchase Common Shares of the Company under the Purchase Contracts constituting a part of such Normal Units, in substitution for the Pledged Notes. Thereafter the Collateral Agent shall have such security interests, rights and obligations with respect to the Tax Event Redemption Treasury Consideration as it had in respect of the Pledged Notes as provided in Articles II, III, IV, V and VI, and any reference herein to the Notes shall be deemed to be reference to such Tax Event Redemption Treasury Consideration, and any reference herein to interest on the Notes shall be deemed to be a reference to corresponding distributions on such Tax Event Redemption Treasury Consideration. -16- ARTICLE VII Representations and Warranties; Covenants SECTION 7.1 Representations and Warranties of the Holders The Holders from time to time, acting through the Purchase Contract Agent as their attorney-in-fact (it being understood that the Purchase Contract Agent shall not be liable for any representation or warranty made by or on behalf of a Holder), hereby represent and warrant to the Collateral Agent, which representations and warranties shall be deemed repeated on each day a Holder Transfers Collateral that: (a) such Holder has the power to grant a security interest in and lien on the Collateral; (b) such Holder is the sole beneficial owner of the Collateral and, in the case of Collateral delivered in physical form, is the sole holder of such Collateral and is the sole beneficial owner of, or has the right to Transfer, the Collateral it Transfers to the Collateral Agent, free and clear of any security interest, lien, encumbrance, call, liability to pay money or other restriction other than the security interest and lien granted under Section 2.1; (c) upon the Transfer of the Collateral to the Collateral Account, the Collateral Agent, for the benefit of the Company, will have a valid and perfected first priority security interest therein (assuming that any central clearing operation or any Intermediary or other entity not within the control of the Holder involved in the Transfer of the Collateral, including the Collateral Agent, gives the notices and takes the action required of it hereunder and under applicable law for perfection of that interest and assuming the establishment and exercise of control pursuant to Section 2.2); and (d) the execution and performance by the Holder of its obligations under this Agreement will not result in the creation of any security interest, lien or other encumbrance on the Collateral other than the security interest and lien granted under Section 2.1 or violate any provision of any existing law or regulation applicable to it or of any mortgage, charge, pledge, indenture, contract or undertaking to which it is a party or which is binding on it or any of its assets. SECTION 7.2 Representations and Warranties of the Collateral Agent, Custodial Agent and Securities Intermediary The Collateral Agent, Custodial Agent and Securities Intermediary (each an "Agent") hereby represents and warrants: (a) The - is a banking corporation duly incorporated and validly existing under the laws of -; -17- (b) The execution, delivery and performance by the Collateral Agent, the Custodial Agent and the Securities Intermediary of this Agreement have each been duly authorized by all necessary corporate action on the part of each such Agent; this Agreement has been duly executed and delivered by the Collateral Agent, the Custodial Agent and the Securities Intermediary and constitutes a valid and legally binding obligation of each of the Agents, enforceable against such Agents in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability relating to or affecting creditors' rights and to general equity principles; (c) The execution, delivery and performance by the Collateral Agent, the Custodial Agent and the Securities Intermediary of this Agreement do not violate or constitute a breach of the Articles of Incorporation or By-Laws of any of such Agents; and (d) No consent of any federal or state banking authority is required for the execution and delivery of, or performance by the Agents of their respective obligations under, this Agreement. SECTION 7.3 Covenants The Holders from time to time, acting through the Purchase Contract Agent as their attorney-in-fact (it being understood that the Purchase Contract Agent shall not be liable for any covenant made by or on behalf of a Holder), hereby covenant to the Collateral Agent that for so long as the Collateral remains subject to the Pledge: (a) neither the Purchase Contract Agent nor such Holders will create or purport to create or allow to subsist any mortgage, charge, lien, pledge or any other security interest whatsoever over the Collateral or any part of it other than pursuant to this Agreement; and (b) neither the Purchase Contract Agent nor such Holders will sell or otherwise dispose (or attempt to dispose) of the Collateral or any part of it except for the beneficial interest therein, subject to the pledge hereunder, transferred in connection with the Transfer of the Units. ARTICLE VIII The Collateral Agent SECTION 8.1 Appointment, Powers and Immunities (a) The Collateral Agent shall act as agent for the Company hereunder of this -18- Agreement, together with such other powers as are reasonably incidental thereto. Each of the Collateral Agent, the Custodial Agent and the Securities Intermediary: (i) shall have no duties or responsibilities except those expressly set forth in this Agreement and no implied covenants or obligations shall be inferred from this Agreement against any of them, nor shall any of them be bound by the provisions of any agreement by any party hereto beyond the specific terms hereof; (ii) shall not be responsible for any recitals contained in this Agreement, or in any certificate or other document referred to or provided for in, or received by it under, this Agreement, the Units or the Purchase Contract Agreement, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement (other than as against the Collateral Agent), the Units or the Purchase Contract Agreement or any other document referred to or provided for herein or therein or for any failure by the Company or any other Person (except the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be) to perform any of its obligations hereunder or thereunder or, except as expressly required hereby, for the existence, validity, perfection, priority or maintenance of any security interest created hereunder; (iii) shall not be required to initiate or conduct any litigation or collection proceedings hereunder (except in the case of the Collateral Agent, pursuant to directions furnished under Section 8.2, subject to Section 8.6); (iv) shall not be responsible for any action taken or omitted to be taken by it hereunder or under any other document or instrument referred to or provided for herein or in connection herewith or therewith, except for its own negligence, bad faith or willful misconduct; and (v) shall not be required to advise any party as to selling or retaining, or taking or refraining from taking any action with respect to, the Units or other property deposited hereunder. Subject to the foregoing, during the term of this Agreement, the Collateral Agent shall take all reasonable action in connection with the safekeeping and preservation of the Collateral hereunder. (b) No provision of this Agreement shall require the Collateral Agent, the Custodial Agent or the Securities Intermediary to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. In no event shall the Collateral Agent, the Custodial Agent or the Securities Intermediary be liable for any amount in excess of the value of the Collateral or for any special, indirect, individual, consequential damages or lost profits or loss of business, arising in connection with this Agreement. Notwithstanding the foregoing, the Collateral Agent, -19- the Custodial Agent, the Purchase Contract Agent and Securities Intermediary, each in its individual capacity, hereby waive any right of set-off, banker's lien, liens or perfection rights as securities intermediary or any counterclaim with respect to any of the Collateral. (c) The Collateral Agent, Custodial Agent and Securities Intermediary shall have no liability whatsoever for the action or inaction of any Clearing Agency or any book-entry system thereof. In no event shall any Clearing Agency or any book-entry system thereof be deemed an agent or subcustodian of the Collateral Agent, Custodial Agent and Securities Intermediary. SECTION 8.2 Instructions of the Company. The Company shall have the right, by one or more instruments in writing executed and delivered to the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, to direct the time, method and place of conducting any proceeding for the realization of any right or remedy available to the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, or of exercising any power conferred on the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, or to direct the taking or refraining from taking of any action authorized by this Agreement; provided that (i) such direction shall not conflict with the provisions of any law or of this Agreement and (ii) the Collateral Agent, the Custodial Agent and the Securities Intermediary shall each receive indemnity reasonably satisfactory to it as provided herein. Nothing in this Section 8.2 shall impair the right of the Collateral Agent in its discretion to take any action or omit to take any action which it deems proper and which is not inconsistent with such direction. SECTION 8.3 Reliance Each of the Securities Intermediary, the Custodial Agent and the Collateral Agent shall be entitled conclusively to rely upon any certification, order, judgment, opinion, notice or other communication (including, without limitation, any thereof by telephone or facsimile) reasonably believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons (without being required to determine the correctness of any fact stated therein), and upon advice and statements of legal counsel and other experts selected by the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be. As to any matters not expressly provided for by this Agreement, the Collateral Agent, the Custodial Agent and the Securities Intermediary shall in all cases be fully protected in acting, or in refraining from acting, hereunder in accordance with instructions given by the Company in accordance with this Agreement. SECTION 8.4 Rights in Other Capacities The Collateral Agent, the Custodial Agent and the Securities Intermediary and their affiliates may (without having to account therefor to the Company) accept deposits from, lend money to, make their investments in and generally engage in any kind of -20- banking, trust or other business with the Purchase Contract Agent, any Holder of Units and any holder of Separate Notes (and any of their respective subsidiaries or affiliates) as if it were not acting as the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, and the Collateral Agent, the Custodial Agent and the Securities Intermediary and their affiliates may accept fees and other consideration from the Purchase Contract Agent, any Holder of Units or any holder of Separate Notes without having to account for the same to the Company; provided that each of the Securities Intermediary, the Custodial Agent and the Collateral Agent covenants and agrees with the Company that it shall not accept, receive or permit there to be created in favor of itself (and waives any right of set-off or banker's lien with respect to) and shall take no affirmative action to permit there to be created in favor of any other Person, any security interest, lien or other encumbrance of any kind in or upon the Collateral and the Collateral shall not be commingled with any other assets of any such Person. SECTION 8.5 Non-Reliance on Collateral Agent None of the Securities Intermediary, the Custodial Agent or the Collateral Agent shall be required to keep itself informed as to the performance or observance by the Purchase Contract Agent or any Holder of Units of this Agreement, the Purchase Contract Agreement, the Units or any other document referred to or provided for herein or therein or to inspect the properties or books of the Purchase Contract Agent or any Holder of Units. The Collateral Agent, the Custodial Agent and the Securities Intermediary shall not have any duty or responsibility to provide the Company or the Remarketing Agent with any credit or other information concerning the affairs, financial condition or business of the Purchase Contract Agent, any Holder of Units or any holder of Separate Notes (or any of their respective subsidiaries or affiliates) that may come into the possession of the Collateral Agent, the Custodial Agent or the Securities Intermediary or any of their respective affiliates. SECTION 8.6 Compensation and Indemnity The Company agrees: (a) to pay each of the Collateral Agent, the Custodial Agent and the Securities Intermediary from time to time such compensation as shall be agreed in writing between the Company and the Collateral Agent, Custodial Agent or the Securities Intermediary, as the case may be, for all services rendered by each of them hereunder and (b) to indemnify the Collateral Agent, the Custodial Agent and the Securities Intermediary (which for purposes of this paragraph, in each case, shall include its directors, officers, employees and agents) for, and to hold each of them harmless from and against, any loss, liability or reasonable out-of-pocket expense incurred without negligence, willful misconduct or bad faith on its part, arising out of or in connection with the acceptance or administration of its powers and duties under this Agreement, including the reasonable out-of-pocket costs and expenses (including reasonable fees and expenses of counsel) of defending itself against any claim or liability in connection with the exercise -21- or performance of such powers and duties or collecting such amounts. The Collateral Agent, the Custodial Agent and the Securities Intermediary shall each promptly notify the Company of any third party claim which may give rise to the indemnity hereunder and give the Company the opportunity to control the defense of such claim with counsel reasonably satisfactory to the indemnified party and no such claim shall be settled without the written consent of the Company, which consent shall not be unreasonably withheld. SECTION 8.7 Failure to Act In the event of any ambiguity in the provisions of this Agreement or any dispute between or conflicting claims by or among the parties hereto or any other Person with respect to any funds or property deposited hereunder, the Collateral Agent, Custodial Agent and the Securities Intermediary shall be entitled, after prompt notice to the Company and the Purchase Contract Agent, at its sole option, to refuse to comply with any and all claims, demands or instructions with respect to such property or funds so long as such dispute or conflict shall continue, and neither the Collateral Agent, Custodial Agent nor the Securities Intermediary shall be or become liable in any way to any of the parties hereto for its failure or refusal to comply with such conflicting claims, demands or instructions. The Collateral Agent, Custodial Agent and the Securities Intermediary shall be entitled to refuse to act until either (i) such conflicting or adverse claims or demands shall have been finally determined by a court of competent jurisdiction or settled by agreement between the conflicting parties as evidenced in a writing, reasonably satisfactory to the Collateral Agent, Custodial Agent or the Securities Intermediary, as the case may be, or (ii) the Collateral Agent, the Custodial Agent or the Securities Intermediary, as the case may be, shall have received security or an indemnity reasonably satisfactory to the Collateral Agent, Custodial Agent or the Securities Intermediary, as the case may be, sufficient to save the Collateral Agent, Custodial Agent or the Securities Intermediary, as the case may be, harmless from and against any and all loss, liability or reasonable out-of-pocket expense which the Collateral Agent, Custodial Agent or the Securities Intermediary, as the case may be, may incur by reason of its acting without bad faith, willful misconduct or negligence. The Collateral Agent, Custodial Agent or the Securities Intermediary may in addition elect to commence an interpleader action or seek other judicial relief or orders as the Collateral Agent, Custodial Agent or the Securities Intermediary, as the case may be, may deem necessary. Notwithstanding anything contained herein to the contrary, neither the Collateral Agent, Custodial Agent nor the Securities Intermediary shall be required to take any action that is in its reasonable opinion contrary to law or to the terms of this Agreement, or which would in its reasonable opinion subject it or any of its officers, employees or directors to liability. SECTION 8.8 Resignation Subject to the appointment and acceptance of a successor Collateral Agent, Custodial Agent or Securities Intermediary, as provided below, (a) the Collateral Agent, Custodial Agent and the Securities Intermediary may resign at any time by giving notice -22- thereof to the Company and the Purchase Contract Agent as attorney-in-fact for the Holders of Units, (b) the Collateral Agent, Custodial Agent and the Securities Intermediary may be removed at any time by the Company and (c) if the Collateral Agent, Custodial Agent or the Securities Intermediary fails to perform any of its material obligations hereunder in any material respect for a period of not less than 20 days after receiving written notice of such failure by the Purchase Contract Agent and such failure shall be continuing, the Collateral Agent, Custodial Agent or the Securities Intermediary may be removed by the Purchase Contract Agent. The Purchase Contract Agent shall promptly notify the Company of any removal of the Collateral Agent, the Custodial Agent or the Securities Intermediary pursuant to clause (c) of the immediately preceding sentence. Upon any such resignation or removal, the Company shall have the right to appoint a successor Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be. If no successor Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, shall have been so appointed and shall have accepted such appointment within 30 days after the retiring Collateral Agent's, Custodial Agent's or Securities Intermediary's giving of notice of resignation or such removal, then the retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, may at the Company's expense petition any court of competent jurisdiction for the appointment of a successor Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be. Upon removal of the Collateral Agent, Custodial Agent or Securities Intermediary, no fees paid to the retiring Collateral Agent, Custodial Agent or Securities Intermediary pursuant to Section 8.6(a) of this Agreement shall be refunded. Each of the Collateral Agent, Custodial Agent and the Securities Intermediary shall be a bank which has an office in New York, New York with a combined capital and surplus of at least $50,000,000. Upon the acceptance of any appointment as Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, hereunder by a successor Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, such successor shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, and the retiring Collateral Agent, Custodial Agent or Securities Intermediary, as the case may be, shall take all appropriate action to transfer any money and property held by it hereunder (including the Collateral) to such successor. The retiring Collateral Agent, Custodial Agent or Securities Intermediary shall, upon such succession, be discharged from its duties and obligations as Collateral Agent, Custodial Agent or Securities Intermediary hereunder. After any retiring Collateral Agent's, Custodial Agent's or Securities Intermediary's resignation hereunder as Collateral Agent, Custodial Agent or Securities Intermediary, the provisions of this Section 8.8 shall continue in effect for its benefit in respect of any actions taken or omitted to be taken by it while it was acting as the Collateral Agent, Custodial Agent or Securities Intermediary. Any resignation or removal of the Collateral Agent hereunder shall be deemed for all purposes of this Agreement as the simultaneous resignation or removal of the Custodial Agent and the Securities Intermediary hereunder. Any corporation into which the Collateral Agent, the Custodial Agent or the Securities Intermediary, in its individual capacity, may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Collateral Agent in its individual capacity shall be a party, or any corporation to which substantially all the corporate trust business of the Collateral Agent in its individual capacity may be transferred, shall be the Collateral Agent, the Custodial Agent, or the Securities Intermediary, as the case may be, respectively, under this Agreement without further act. SECTION 8.9 Right to Appoint Agent or Advisor The Collateral Agent shall have the right to appoint agents or advisors in connection with any of its duties hereunder, and the Collateral Agent shall not be liable for any action taken or omitted by, or in reliance upon the advice of, such agents or advisors selected in good faith. The appointment of agents (other than legal counsel) pursuant to this Section 8.9 shall be subject to prior consent of the Company, which consent shall not be unreasonably withheld. SECTION 8.10 Survival The provisions of this Article VIII shall survive termination of this Agreement and the resignation or removal of the Collateral Agent, the Custodial Agent or the Securities Intermediary. SECTION 8.11 Exculpation Anything in this Agreement to the contrary notwithstanding, in no event shall any of the Collateral Agent, the Custodial Agent or the Securities Intermediary or their officers, employees or agents be liable under this Agreement to any third party for indirect, special, punitive or consequential loss or damage of any kind whatsoever, including lost profits, whether or not the likelihood of such loss or damage was known to the Collateral Agent, the Custodial Agent or the Securities Intermediary, or any of them, incurred without any act or deed that is found to be attributable to negligence, bad faith or willful misconduct on the part of the Collateral Agent, the Custodial Agent or the Securities Intermediary. ARTICLE IX AMENDMENT SECTION 9.1 Amendment Without Consent of Holders Without the consent of any Holders or the holders of any Separate Notes, the Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary and the Purchase Contract Agent, at any time and from time to time, may amend this Agreement, in form satisfactory to the Company, the Collateral Agent, the Custodial Agent, the -24- Securities Intermediary and the Purchase Contract Agent, for any of the following purposes: (i) to evidence the succession of another Person to the Company, and the assumption by any such successor of the covenants of the Company; or (ii) to add to the covenants of the Company for the benefit of the Holders, or to surrender any right or power herein conferred upon the Company so long as such covenants or such surrender do not adversely affect the validity, perfection or priority of the security interests granted or created hereunder; or (iii) to evidence and provide for the acceptance of appointment hereunder by a successor Collateral Agent, Custodial Agent, Securities Intermediary or Purchase Contract Agent; or (iv) to cure any ambiguity, to correct or supplement any provisions herein which may be inconsistent with any other such provisions herein, or to make any other provisions with respect to such matters or questions arising under this Agreement, provided such action shall not adversely affect the interests of the Holders. SECTION 9.2 Amendment with Consent of Holders With the consent of the Holders of not less than a majority of the Purchase Contracts at the time outstanding, by Act of said Holders delivered to the Company, the Purchase Contract Agent or the Collateral Agent, as the case may be, the Company, when duly authorized, the Purchase Contract Agent, the Collateral Agent, the Custodial Agent and the Securities Intermediary may amend this Agreement for the purpose of modifying in any manner the provisions of this Agreement or the rights of the Holders in respect of the Units; provided, however, that no such supplemental agreement shall, without the consent of the Holder of each Outstanding Unit adversely affected thereby, (i) change the amount or type of Collateral underlying a Unit (except for the rights of holders of Normal Units to substitute the Treasury Securities for the Pledged Notes or the Pledged Treasury Consideration, as the case may be, or the rights of Holders of Stripped Units to substitute Notes or the appropriate Treasury Consideration, as applicable, for the Pledged Treasury Securities), impair the right of the Holder of any Unit to receive distributions on the underlying Collateral or otherwise adversely affect the Holder's rights in or to such Collateral; or (ii) otherwise effect any action that would require the consent of the Holder of each Outstanding Unit affected thereby pursuant to the Purchase Contract Agreement if such action were effected by an agreement supplemental thereto; or -25- (iii) reduce the percentage of Purchase Contracts the consent of whose Holders is required for any such amendment. It shall not be necessary for any Act of Holders under this Section to approve the particular form of any proposed amendment, but it shall be sufficient if such Act shall approve the substance thereof. SECTION 9.3 Execution of Amendments In executing any amendment permitted by this Section, the Collateral Agent, the Custodial Agent, the Securities Intermediary and the Purchase Contract Agent shall be entitled to receive and (subject to Section 6.1 hereof, with respect to the Collateral Agent, and Section 7.1 of the Purchase Contract Agreement, with respect to the Purchase Contract Agent) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and that all conditions precedent, if any, to the execution and delivery of such amendment have been satisfied and, in the case of an amendment pursuant to Section 9.1, that such amendment does not adversely affect the validity, perfection or priority of the security interests granted or created hereunder. SECTION 9.4 Effect of Amendments Upon the execution of any amendment under this Article IX, this Agreement shall be modified in accordance therewith, and such amendment shall form a part of this Agreement for all purposes; and every Holder of Certificates theretofore or thereafter authenticated, executed on behalf of the Holders and delivered under the Purchase Contract Agreement shall be bound thereby. SECTION 9.5 Reference to Amendments Certificates authenticated, executed on behalf of the Holders and delivered after the execution of any amendment pursuant to this Article IX may, and shall if required by the Collateral Agent or the Purchase Contract Agent, bear a notation in form approved by the Purchase Contract Agent as to any matter provided for in such amendment. If the Company shall so determine, new Certificates so modified as to conform, in the opinion of the Purchase Contract Agent and the Company, to any such amendment may be prepared and executed by the Company and authenticated, executed on behalf of the Holders and delivered by the Purchase Contract Agent in accordance with the Purchase Contract Agreement in exchange for outstanding Certificates. -26- ARTICLE X MISCELLANEOUS SECTION 10.1 No Waiver No failure on the part of any party hereto or any of its agents to exercise, and no course of dealing with respect to, and no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise by any party hereto or any of its agents of any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law. SECTION 10.2 GOVERNING LAW THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without limiting the foregoing, the above choice of law is expressly agreed to by the Securities Intermediary, the Collateral Agent, the Custodial Agent and the Holders from time to time acting through the Purchase Contract Agent, as their attorney-in-fact, in connection with the establishment and maintenance of the Collateral Account, which law, for purposes of the Code, shall be deemed to be the law governing all Security Entitlements related thereto. In addition, such parties agree that, for purposes of the Code, New York shall be the Securities Intermediary's jurisdiction. The Company, the Collateral Agent and the Holders from time to time of the Units, acting through the Purchase Contract Agent as their attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York state court sitting in the Borough of Manhattan in New York City for the purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Company, the Collateral Agent and the Holders from time to time of the Units, acting through the Purchase Contract Agent as their attorney-in-fact, irrevocably waive, to the fullest extent permitted by applicable law, any objection which they may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. SECTION 10.3 Notices Unless otherwise stated herein, all notices, requests, consents and other communications provided for herein (including, without limitation, any modifications of, or waivers or consents under, this Agreement) shall be given or made in writing (including, without limitation, by telecopy) delivered to the intended recipient at the "Address for Notices" specified below its name on the signature pages hereof or, as to any party, at such other address as shall be designated by such party in a notice to the other parties. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given when personally delivered or, in the case of a -27- mailed notice or notice transmitted by telecopier, upon receipt, in each case given or addressed as aforesaid. SECTION 10.4 Successors and Assigns This Agreement shall be binding upon and inure to the benefit of the respective successors and assigns of the Company, the Collateral Agent, the Custodial Agent, the Securities Intermediary and the Purchase Contract Agent, and the Holders from time to time of the Units, by their acceptance of the same, shall be deemed to have agreed to be bound by the provisions hereof and to have ratified the agreements of, and the grant of the Pledge hereunder by, the Purchase Contract Agent. SECTION 10.5 Counterparts This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart. SECTION 10.6 Severability If any provision hereof is invalid and unenforceable in any jurisdiction, then, to the fullest extent permitted by law, (i) the other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties hereto as nearly as may be possible and (ii) the invalidity or unenforceability of any provision hereof in any jurisdiction shall not affect the validity or enforceability of such provision in any other jurisdiction. SECTION 10.7 Expenses, Etc. The Company agrees to reimburse the Collateral Agent, the Securities Intermediary and the Custodial Agent for: (a) all reasonable out-of-pocket costs and all reasonable expenses of the Collateral Agent, the Custodial Agent and the Securities Intermediary (including, without limitation, the reasonable fees and expenses of counsel to the Collateral Agent, the Custodial Agent and the Securities Intermediary), in connection with (i) the negotiation, preparation, execution and delivery or performance of this Agreement and (ii) any modification, supplement or waiver of any of the terms of this Agreement; (b) all reasonable costs and expenses of the Collateral Agent (which for purposes of this paragraph shall include its directors, officers, employees and agents) (including, without limitation, reasonable fees and expenses of counsel) in connection with (i) any enforcement or proceedings resulting or incurred in connection with causing any Holder of Units to satisfy its obligations under the Purchase Contracts forming a part of the Units and (ii) the enforcement of this Section 10.7; and -28- (c) all transfer, stamp, documentary or other similar taxes, assessments or charges levied by any governmental or revenue authority in respect of this Agreement or any other document referred to herein and all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated hereby. SECTION 10.8 Security Interest Absolute All rights of the Collateral Agent and security interests hereunder, and all obligations of the Holders from time to time hereunder, shall be absolute and unconditional irrespective of: (a) any lack of validity or enforceability of any provision of the Purchase Contracts or the Units or any other agreement or instrument relating thereto; (b) any change in the time, manner or place of payment of, or any other term of, or any increase in the amount of, all or any of the obligations of Holders of Units under the related Purchase Contracts, or any other amendment or waiver of any term of, or any consent to any departure from any requirement of, the Purchase Contract Agreement or any Purchase Contract or any other agreement or instrument relating thereto; or (c) any other circumstance which might otherwise constitute a defense available to, or discharge of, a borrower, a guarantor or a pledgor. SECTION 10.9 Waiver of Jury Trial EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. -29- IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written. PLATINUM UNDERWRITERS HOLDINGS, LTD. By: ------------------------------------ Name: Title: Address for Notices: Platinum Underwriters Holdings, Ltd. - - Attention: - Telecopy: - Telephone: - JPMorgan Chase Bank, as Purchase Contract Agent and as attorney-in-fact of the Holders from time to time of the Units By: ------------------------------------ Name: Title: Address for Notices: - - - Attention: Institutional Trust Services Telecopy: - Telephone: - -30- State Street Bank, as Collateral Agent, Custodial Agent and Securities Intermediary By: ------------------------------------ Name: Title: Address for Notices: - - - - Attention: - Telecopy: - Telephone: - -31- EXHIBIT A INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT State Street Bank - - - - - - Attention: - Re: Equity Security Units of Platinum Underwriters HOLDINGS, LTD. (THE "COMPANY") We hereby notify you in accordance with Section [4.1] [4.2] of the Pledge Agreement, dated as of -, 2002, (the "Pledge Agreement") among the Company, yourselves, as Collateral Agent, Custodial Agent and Securities Intermediary and ourselves, as Purchase Contract Agent and as attorney-in-fact for the holders of [Normal Units] [Stripped Units] from time to time, that the holder of Units listed below (the "Holder") has elected to substitute [$_____ aggregate principal amount of Treasury Securities (CUSIP No. _____)] [$_______ aggregate principal amount of Notes or $_____ aggregate principal amount of Treasury Consideration (CUSIP No. _____)] in exchange for the related [Pledged Notes or Pledged Treasury Consideration] [Pledged Treasury Securities] held by you in accordance with the Pledge Agreement and has delivered to us a notice stating that the Holder has Transferred [Treasury Securities] [Notes or the Treasury Consideration] to you, as Collateral Agent. We hereby instruct you, upon receipt of such [Pledged Treasury Securities] [Pledged Notes or Pledged Treasury Consideration], to release the [Notes or the Treasury Consideration] [Treasury Securities] related to such [Normal Units] [Stripped Units] to us in accordance with the Holder's instructions. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. Date: ----------------- JPMORGAN CHASE BANK, as Purchase Contract Agent By: --------------------------------- Name: Title: A-1 Please print name and address of Registered Holder electing to substitute [Treasury Securities] [Notes or Treasury Consideration] for the [Pledged Notes or the Pledged Treasury Consideration] [Pledged Treasury Securities]: Name: Social Security or other Taxpayer Identification Number, if any: Address: A-2 EXHIBIT B INSTRUCTION TO PURCHASE CONTRACT AGENT JPMorgan Chase Bank as Purchase Contract Agent 450 West 33rd Street New York, New York 10001 Attention: Institutional Trust Services Re: Equity Security Units of Platinum Underwriters HOLDINGS, LTD. (THE "COMPANY") The undersigned Holder hereby notifies you that it has delivered to State Street Bank, as Collateral Agent, [$_______ aggregate principal amount of Treasury Securities (CUSIP No. _____)] [$_______ aggregate principal amount of Notes or $_____ principal amount of Treasury Consideration (CUSIP No. _____)] in exchange for the related [Pledged Notes or Pledged Treasury Consideration] [Pledged Treasury Securities] held by the Collateral Agent, in accordance with Section 4.1 of the Pledge Agreement, dated as of -, 2002 (the "Pledge Agreement"), between you, the Company and the Collateral Agent. The undersigned Holder hereby instructs you to instruct the Collateral Agent to release to you on behalf of the undersigned Holder the [Pledged Notes or the Pledged Treasury Consideration] [Pledged Treasury Securities] related to such [Normal Units] [Stripped Units]. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. Date: Signature: ---------------------- ------------------------------------ Signature Guarantee: -------------------------- Please print name and address of Registered Holder: Name: Social Security or other Taxpayer Identification Number, if any: Address: B-1 EXHIBIT C INSTRUCTION TO CUSTODIAL AGENT REGARDING REMARKETING State Street Bank - - - - - - Attention: - Re: NOTES OF PLATINUM UNDERWRITERS FINANCE, INC. --------------------------------------------- The undersigned hereby notifies you in accordance with Section 4.5(d) of the Pledge Agreement, dated as of -, 2002 (the "Pledge Agreement"), among Platinum Underwriters Holdings, Ltd., yourselves, as Collateral Agent, Securities Intermediary and Custodial Agent, and JPMorgan Chase Bank, as Purchase Contract Agent and as attorney-in-fact for the Holders of Normal Units and Stripped Units from time to time, that the undersigned elects to deliver on the fourth Business Day immediately preceding the first day of the Remarketing Period commencing on __________, 2005 $__________ aggregate principal amount of Notes for delivery to the Remarketing Agent for remarketing pursuant to Section 4.5(d) of the Pledge Agreement. The undersigned will, upon request of the Remarketing Agent, execute and deliver any additional documents deemed by the Remarketing Agent or by the Company to be necessary or desirable to complete the sale, assignment and transfer of the Notes tendered hereby. The undersigned hereby instructs you, upon receipt of the proceeds of such remarketing from the Remarketing Agent, net of amounts payable to the Remarketing Agent in accordance with the Pledge Agreement, to deliver such proceeds to the undersigned in accordance with the instructions indicated herein under "A. Payment Instructions." The undersigned hereby instructs you, in the event of [a/the Last] Failed Remarketing upon receipt of the Notes tendered herewith from the Remarketing Agent, to deliver such Notes to the person(s) and the address(es) indicated herein under "B. Delivery Instructions." With this notice, the undersigned hereby (i) represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Notes tendered hereby and that the undersigned is the record owner of any Notes tendered herewith in physical form or a participant in The Depository Trust Company ("DTC") and the beneficial owner of any Notes tendered herewith by book-entry transfer to your account at DTC and (ii) agrees to be bound by the terms and conditions of Section 4.5(d) of the Pledge Agreement. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. C-1 Date: ----------------------- Signature: --------------------------------- Signature Guarantee: Name: ------------------------------------- (Please Print) Address: ---------------------------------- (Please Print) Country: Zip Code: Telecopy (include country code if outside U.S.): Telephone (include country code if outside U.S.): (Tax Identification or Social Security Number): A. PAYMENT INSTRUCTIONS Proceeds of the remarketing should be paid by check in the name of the person(s) set forth below and mailed to the address set forth below. Name(s): ------------------------------------ (Please Print) Address: ------------------------------------ (Please Print) Zip Code: Country: Telecopy (include country code if outside U.S.): Telephone (include country code if outside U.S.): (Tax Identification or Social Security Number): C-2 B. DELIVERY INSTRUCTIONS In the event of [a/the Last] Failed Remarketing, Notes which are in physical form should be delivered to the person(s) set forth below and mailed to the address set forth below. Name(s): ------------------------------------ (Please Print) Address: ------------------------------------ (Please Print) Zip Code: Country: Telecopy (include country code if outside U.S.): Telephone (include country code if outside U.S.): (Tax Identification or Social Security Number): In the event of [a/the Last] Failed Remarketing, Notes which are in book-entry form should be credited to the account at The Depository Trust Company set forth below. Name of Account Party: DTC Account Number: C-3 EXHIBIT D INSTRUCTION TO CUSTODIAL AGENT REGARDING WITHDRAWAL FROM REMARKETING State Street Bank - - - - - - - - Attention: - Re: NOTES OF PLATINUM UNDERWRITERS FINANCE, INC. --------------------------------------------- The undersigned hereby notifies you in accordance with Section 4.5(d) of the Pledge Agreement, dated as of -, 2002 (the "Pledge Agreement"), among Platinum Underwriters Holdings, Ltd., yourselves, as Collateral Agent, Securities Intermediary and Custodial Agent, and JPMorgan Chase Bank, as Purchase Contract Agent and as attorney-in-fact for the Holders of Normal Units and Stripped Units from time to time, that the undersigned elects to withdraw the $_____ aggregate principal amount of Notes delivered to the Custodial Agent on ___________, 2005 for remarketing pursuant to Section 4.5(d) of the Pledge Agreement. The undersigned hereby instructs you to return such Notes to the undersigned in accordance with the undersigned's instructions. With this notice, the Undersigned hereby agrees to be bound by the terms and conditions of Section 4.5(d) of the Pledge Agreement. Capitalized terms used herein but not defined shall have the meaning set forth in the Pledge Agreement. Date: -------------------------- Signature: ------------------------------- Signature Guarantee: Name(s): ------------------------------------ (Please Print) Address: ------------------------------------ (Please Print) Zip Code: Country: Telecopy (include country code if outside U.S.): Telephone (include country code if outside U.S.): D-1 (Tax Identification or Social Security Number): A. DELIVERY INSTRUCTIONS In the event of [a/the Last] Failed Remarketing, Notes which are in physical form should be delivered to the person(s) set forth below and mailed to the address set forth below. Name(s): ------------------------------------ (Please Print) Address: ------------------------------------ (Please Print) Zip Code: Country: Telecopy (include country code if outside U.S.): Telephone (include country code if outside U.S.): (Tax Identification or Social Security Number): In the event of [a/the Last] Failed Remarketing, Notes which are in book-entry form should be credited to the account at The Depository Trust Company set forth below. Name of Account Party: DTC Account Number: D-2 EX-5.2 10 a2088388zex-5_2.htm EXHIBIT 5.2

Exhibit 5.2

August 30, 2002

Platinum Underwriters Finance, Inc.,
    c/o Platinum Underwriters Holdings, Ltd.,
        Clarendon House,
            2 Church Street
                Hamilton, HM 11
                    Bermuda.

Platinum Underwriters Holdings, Ltd.,
    Clarendon House,
        2 Church Street
            Hamilton, HM 11
                Bermuda.

Ladies and Gentlemen:

        In connection with the registration under the Securities Act of 1933 (the "Act") of (a) $143,750,000 principal amount of guaranteed senior notes due 2007 (the "Notes") of Platinum Underwriters Finance, Inc., a Delaware corporation ("Platinum Finance"); (b) the purchase contracts ("Purchase Contracts") to purchase common shares, par value $0.01 per share ("Common Shares"), of Platinum Underwriters Holdings, Ltd., a Bermuda corporation ("Platinum Holdings"); (c) $143,750,000 stated amount of equity security units ("Units") of Platinum Holdings, which represent ownership of the Purchase Contracts and the Notes, (d) the Common Shares issuable pursuant to the Purchase Contracts ("Purchase Contract Shares") and (e) the guarantee by Platinum Holdings of the payment of the principal of, premium, if any, and interest on the Notes (the "Guarantee" and, together with the Notes, Purchase Contracts, Units and Purchase Contract Shares, the "Securities"), we, as your counsel, have examined such corporate records, certificates and other documents, and such questions of law, as we have considered necessary or appropriate for the purposes of this opinion.

        Upon the basis of such examination, we advise you that, in our opinion:

        (1)    When the Registration Statement relating to the Securities (the "Registration Statement") has become effective under the Act, an indenture (the "Indenture") among Platinum Holdings, Platinum Finance and JPMorgan Chase Bank, as trustee (the "Trustee"), and a first supplemental indenture among Platinum Holdings, Platinum Finance and the Trustee (the "First Supplemental Indenture") to the Indenture relating to the Notes (each substantially in the form filed as an exhibit to the Registration Statement) have been duly authorized, executed and delivered by each of the parties thereto, the terms of the Notes and of their issuance and sale have been duly established in conformity with the Indenture and the First Supplemental Indenture so as not to violate any applicable law or result in a default under or breach of any agreement or instrument binding upon Platinum Finance and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over Platinum Finance, and the Notes have been duly executed and authenticated in accordance with the Indenture and the First Supplemental Indenture and issued and sold as contemplated in the Registration Statement, the Notes will constitute valid and legally binding obligations of Platinum Finance, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles.

        (2)    When the Registration Statement has become effective under the Act, a purchase contract agreement (the "Purchase Contract Agreement") relating to the Purchase Contracts and the Units substantially in the form filed as an exhibit to the Registration Statement has been duly authorized, executed and delivered by each of the parties thereto, the terms of the Purchase Contracts and the Units and of their respective issuance and sale have been duly established in conformity with the Purchase Contract Agreement so as not to violate any applicable law or result in a default under or breach of any agreement or instrument binding upon Platinum Holdings and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over Platinum Holdings, and the Unit certificates have been duly executed and authenticated in accordance with the Purchase Contract Agreement and issued and sold as contemplated in the Registration Statement, the Purchase Contracts and the Units evidenced by the Unit certificates will constitute valid and legally binding obligations of Platinum Holdings, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles.

        (3)    When the Registration Statement has become effective under the Act, the Indenture and First Supplemental Indenture have been duly authorized, executed and delivered by each of the parties thereto so as not to violate any applicable law or result in a default under or breach of any agreement or instrument binding upon Platinum Finance or Platinum Holdings and so as to comply with any requirement or restriction imposed by any court or governmental body having jurisdiction over Platinum Holdings, and the Notes entitled to the benefit of the Guarantee have been duly issued and sold as contemplated by the Registration Statement, the Guarantee will constitute a valid and legally binding obligation of Platinum Holdings, subject to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and similar laws of general applicability relating to or affecting creditors' rights and to general equity principles.

        The foregoing opinion is limited to the Federal laws of the United States and the laws of the State of New York, the laws of Bermuda and the General Corporation Law of the State of Delaware, and we are expressing no opinion as to the effect of the laws of any other jurisdiction. With respect to all matters of Bermuda law, we have relied upon the opinion, dated the date hereof, of Conyers, Dill & Pearman, and our opinion is subject to the same assumptions, qualifications and limitations with respect to such matters as are contained in such opinion of Conyers, Dill & Pearman.

        Also, we have relied as to certain matters on information obtained from public officials, officers of Platinum Finance and Platinum Holdings and other sources believed by us to be responsible.

        We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the references to us under the heading "Validity of Securities." In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Act.

Very truly yours,

/s/  SULLIVAN & CROMWELL

EX-8 11 a2088388zex-8.htm EXHIBIT 8

Exhibit 8

        August 30, 2002

Platinum Underwriters Holdings, Ltd.
Clarendon House, 2 Church Street
Hamilton HM 11, Bermuda

Platinum Underwriters Finance, Inc.
195 Broadway, 28th Floor
New York, NY 10007

Ladies and Gentlemen:

        We have acted as United States tax counsel to Platinum Underwriters Holdings, Ltd. ("Holdings") and Platinum Underwriters Finance, Inc. ("Finance") in connection with the Registration Statement on Form S-1 filed by Holdings and Finance on the date hereof with the Securities and Exchange Commission (the "Registration Statement") and hereby confirm to you that the disclosure as to matters of United States federal income tax law as set forth under the heading "U.S. Federal Income Tax Consequences" in the Prospectus included in the Registration Statement constitutes our opinion, except to the extent such disclosure expressly states that any statements therein do not constitute our opinion.

        We hereby consent to the filing with the Securities and Exchange Commission of this letter as an exhibit to the Registration Statement and the reference to us under the heading "U.S. Federal Income Tax Consequences". In giving such consent, we do not hereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or the rules and regulations of the Securities and Exchange Commission thereunder.

Very truly yours,

/s/  SULLIVAN & CROMWELL

EX-23.1 12 a2088388zex-23_1.htm EXHIBIT 23.1
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Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
The St. Paul Companies, Inc.
Platinum Underwriters Holdings, Ltd.
Platinum Underwriters Finance, Inc.:

        We consent to the inclusion in the Registration Statement on Form S-1 of Platinum Underwriters Holdings, Ltd. and Platinum Underwriters Finance, Inc. and the related prospectus of our report dated April 23, 2002 with respect to the combined statements of identifiable underwriting assets and liabilities of The St. Paul Companies Inc. Reinsurance Underwriting Segment (Predecessor) as of December 31, 2001, 2000 and 1999 and the related combined statements of underwriting results and identifiable underwriting cash flows for each of the years in the three-year period ended December 31, 2001, and related combined financial statement schedules III through V, and of our report dated August 29, 2002 with respect to the consolidated balance sheet of Platinum Underwriters Holdings, Ltd. as of June 30, 2002, which reports appear in the Registration Statement on Form S-1 and to the reference to our firm under the heading "Experts" in the prospectus of Platinum Underwriters Holdings, Ltd. The audit report covering Predecessor's December 31, 2001, 2000 and 1999 combined statements contains an explanatory paragraph that states that the combined statements are not intended to be a complete presentation of Predecessor's or St. Paul's financial position, results of operations or cash flows.

Minneapolis, Minnesota
August 29, 2002

/s/ KPMG LLP

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CONSENT OF INDEPENDENT AUDITORS
EX-24.1 13 a2088388zex-24_1.txt EXHIBIT 24.1 EXHIBIT 24.1 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jerome T. Fadden, William A. Robbie, Michael E. Lombardozzi, and each of them severally, his true and lawful attorney-in-fact with power of substitution and resubstitution to sign in his name, place and stead, in any and all capacities, to do any and all things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Act of 1933 (the "Securities Act"), and any rules, regulations and requirements of the Securities and Exchange Commission in connection with the registration under the Securities Act of [ ]% Adjustable Conversion-Rate Equity Security Units of Platinum Underwriters Holdings, Ltd. consisting of (i) purchase contracts of Platinum Underwriters Holdings, Ltd. and (ii) guaranteed senior notes of Platinum Underwriters Finance, Inc. (the "Units"), including specifically, but without limiting the generality of the foregoing, the power and authority to sign his name in his respective capacity as a member of the Board of Directors or officer of Platinum Underwriters Holdings, Ltd., to a Registration Statement on Form S-1 and/or such other form or forms as may be appropriate to be filed with the Commission as any of them may deem appropriate in respect of the Units, to any and all amendments thereto (including post-effective amendments), to any related Rule 462(b) registration statement and to any other documents filed with the Securities and Exchange Commission, as fully for all intents and purposes as he might or could do in person, and hereby ratifies and confirms all said attorneys-in-fact and agents, each acting alone, and his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
NAME TITLE DATE ---- ----- ---- /s/ Steven H. Newman Chairman of the Board of - ------------------------------- Directors Steven H. Newman /s/ Jerome T. Fadden President, Chief Executive - ------------------------------- Officer, Principal Financial Jerome T. Fadden Officer, Principal Accounting Officer and Director /s/ H. Furlong Baldwin - ------------------------------- Director H. Furlong Baldwin /s/ Jonathan F. Bank - ------------------------------- Director Jonathan F. Bank /s/ Dan R. Carmichael - ------------------------------- Director Dan R. Carmichael /s/ Jay S. Fishman - ------------------------------- Director Jay S. Fishman /s/ Peter T. Pruitt - ------------------------------- Director Peter T. Pruitt /s/ Donald J. Puglisi Authorized Representative in the - ------------------------------- United States Donald J. Puglisi
EX-24.2 14 a2088388zex-24_2.txt EXHIBIT 24.2 EXHIBIT 24.2 POWER OF ATTORNEY KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Jerome T. Fadden, William A. Robbie, Michael E. Lombardozzi , and each of them severally, his true and lawful attorney-in-fact with power of substitution and resubstitution to sign in his name, place and stead, in any and all capacities, to do any and all things and execute any and all instruments that such attorney may deem necessary or advisable under the Securities Act of 1933 (the "Securities Act"), and any rules, regulations and requirements of the Securities and Exchange Commission in connection with the registration under the Securities Act of [ ]% Adjustable Conversion-Rate Equity Security Units of Platinum Underwriters Holdings, Ltd. consisting of (i) purchase contracts of Platinum Underwriters Holdings, Ltd. and (ii) guaranteed senior notes of Platinum Underwriters Finance, Inc. (the "Units"), including specifically, but without limiting the generality of the foregoing, the power and authority to sign his name in his respective capacity as a member of the Board of Directors or officer of Platinum Underwriters Finance, Inc., to a Registration Statement on Form S-1 and/or such other form or forms as may be appropriate to be filed with the Commission as any of them may deem appropriate in respect of the Units, to any and all amendments thereto (including post-effective amendments), to any related Rule 462(b) registration statement and to any other documents filed with the Securities and Exchange Commission, as fully for all intents and purposes as he might or could do in person, and hereby ratifies and confirms all said attorneys-in-fact and agents, each acting alone, and his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
NAME TITLE DATE ---- ----- ---- /s/ Steven H. Newman Chairman of the Board of - ------------------------------- Directors Steven H. Newman /s/ Jerome T. Fadden President, Chief Executive - ------------------------------- Officer, Principal Accounting Jerome T. Fadden Officer and Director /s/ William A. Robbie Treasurer, Executive Vice - ------------------------------- President, Chief Financial William A. Robbie Officer, and Director
EX-25.1 15 a2088388zex-25_1.txt EXHIBIT 25.1 EXHIBIT 25.1 ------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ---------------------------------------- JPMORGAN CHASE BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) -------------------------------------------- PLATINUM UNDERWRITERS FINANCE, INC. (Exact name of obligor as specified in its charter) DELAWARE 81-0566888 (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) 195 BROADWAY 28TH FLOOR NEW YORK, NEW YORK 10007 (Address of principal executive offices) (Zip Code) -------------------------------------- GUARANTEED SENIOR NOTES (Title of the indenture securities) -------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor and Guarantors. If the obligor or any Guarantor is an affiliate of the trustee, describe each such affiliation. None. -2- Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 26TH day of August, 2002. JPMORGAN CHASE BANK By /s/ Gregory P. Shea -------------------------------- Gregory P. Shea Assistant Vice President -3- Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF JPMorgan Chase Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 2002, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin ...................................................................... $ 20,772 Interest-bearing balances .............................................................. 10,535 Securities: Held to maturity securities ................................................................. 419 Available for sale securities ............................................................... 59,953 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices ................................................. 6,054 Securities purchased under agreements to resell ........................................ 74,680 Loans and lease financing receivables: Loans and leases held for sale ......................................................... 11,686 Loans and leases, net of unearned income ............................................... $168,109 Less: Allowance for loan and lease losses .............................................. 3,241 Loans and leases, net of unearned income and allowance .............................................................................. 164,868 Trading Assets .............................................................................. 179,236 Premises and fixed assets (including capitalized leases) .................................... 5,999 Other real estate owned ..................................................................... 60 Investments in unconsolidated subsidiaries and associated companies ................................................................... 376 Customers' liability to this bank on acceptances outstanding ............................................................................ 273 Intangible assets Goodwill ............................................................................ 2,156 Other Intangible assets ............................................................. 5,786 Other assets ................................................................................ 38,554 TOTAL ASSETS ................................................................................ $581,407 ======== - 4 - LIABILITIES Deposits In domestic offices .................................................................... $ 158,559 Noninterest-bearing .............................. $ 65,503 Interest-bearing ................................. 93,056 In foreign offices, Edge and Agreement subsidiaries and IBF's ............................................................... 129,207 Noninterest-bearing .............................. $ 9,645 Interest-bearing ................................. 119,562 Federal funds purchased and securities sold under agree- ments to repurchase: Federal funds purchased in domestic offices ............................................ 15,942 Securities sold under agreements to repurchase ......................................... 88,781 Trading liabilities ......................................................................... 105,568 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) .............................................. 12,583 Bank's liability on acceptances executed and outstanding .................................... 278 Subordinated notes and debentures ........................................................... 9,249 Other liabilities ........................................................................... 26,053 TOTAL LIABILITIES ........................................................................... 546,220 Minority Interest in consolidated subsidiaries .............................................. 100 EQUITY CAPITAL Perpetual preferred stock and related surplus ............................................... 0 Common stock ................................................................................ 1,785 Surplus (exclude all surplus related to preferred stock) ................................... 16,304 Retained earnings ........................................................................... 17,013 Accumulated other comprehensive income ...................................................... (15) Other equity capital components ............................................................. 0 TOTAL EQUITY CAPITAL ........................................................................ 35,087 --------- TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL .................................... $ 581,407 =========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) HELENE L. KAPLAN ) WILLLIAM H. GRAY III ) -5- EX-25.2 16 a2088388zex-25_2.txt EXHIBIT 25.2 EXHIBIT 25.2 ------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 ------------------------- FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE ------------------------------------------- CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ---------------------------------------- JPMORGAN CHASE BANK (Exact name of trustee as specified in its charter) NEW YORK 13-4994650 (State of incorporation (I.R.S. employer if not a national bank) identification No.) 270 PARK AVENUE NEW YORK, NEW YORK 10017 (Address of principal executive offices) (Zip Code) William H. McDavid General Counsel 270 Park Avenue New York, New York 10017 Tel: (212) 270-2611 (Name, address and telephone number of agent for service) -------------------------------------------- PLATINUM UNDERWRITERS HOLDINGS, LTD. (Exact name of obligor as specified in its charter) BERMUDA NOT APPLICABLE (State or other jurisdiction of (I.R.S. employer incorporation or organization) identification No.) CLARENDON HOUSE 2 CHURCH STREET HAMILTON BERMUDA HM 11 (Address of principal executive offices) (Zip Code) -------------------------------------------- GUARANTEE OF GUARANTEED SENIOR NOTES OF PLATINUM UNDERWRITERS FINANCE, INC. (Title of the indenture securities) -------------------------------------------- GENERAL Item 1. General Information. Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department, State House, Albany, New York 12110. Board of Governors of the Federal Reserve System, Washington, D.C., 20551 Federal Reserve Bank of New York, District No. 2, 33 Liberty Street, New York, N.Y. Federal Deposit Insurance Corporation, Washington, D.C., 20429. (b) Whether it is authorized to exercise corporate trust powers. Yes. Item 2. Affiliations with the Obligor and Guarantors. If the obligor or any Guarantor is an affiliate of the trustee, describe each such affiliation. None. - 2 - Item 16. List of Exhibits List below all exhibits filed as a part of this Statement of Eligibility. 1. A copy of the Restated Organization Certificate of the Trustee dated March 25, 1997 and the Certificate of Amendment dated October 22, 2001 (see Exhibit 1 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 2. A copy of the Certificate of Authority of the Trustee to Commence Business (see Exhibit 2 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 3. None, authorization to exercise corporate trust powers being contained in the documents identified above as Exhibits 1 and 2. 4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to Form T-1 filed in connection with Registration Statement No. 333-76894, which is incorporated by reference.) 5. Not applicable. 6. The consent of the Trustee required by Section 321(b) of the Act (see Exhibit 6 to Form T-1 filed in connection with Registration Statement No. 33-50010, which is incorporated by reference). On November 11, 2001, in connection with the merger of The Chase Manhattan Bank and Morgan Guaranty Trust Company of New York, the surviving corporation was renamed JPMorgan Chase Bank. 7. A copy of the latest report of condition of the Trustee, published pursuant to law or the requirements of its supervising or examining authority. 8. Not applicable. 9. Not applicable. SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee, JPMorgan Chase Bank, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York and State of New York, on the 26TH day of August, 2002. JPMORGAN CHASE BANK By /s/ Gregory P. Shea ---------------------------- Gregory P. Shea Assistant Vice President - 3 - Exhibit 7 to Form T-1 Bank Call Notice RESERVE DISTRICT NO. 2 CONSOLIDATED REPORT OF CONDITION OF JPMorgan Chase Bank of 270 Park Avenue, New York, New York 10017 and Foreign and Domestic Subsidiaries, a member of the Federal Reserve System, at the close of business June 30, 2002, in accordance with a call made by the Federal Reserve Bank of this District pursuant to the provisions of the Federal Reserve Act.
DOLLAR AMOUNTS ASSETS IN MILLIONS Cash and balances due from depository institutions: Noninterest-bearing balances and currency and coin ................................. $ 20,772 Interest-bearing balances ......................... 10,535 Securities: Held to maturity securities ............................ 419 Available for sale securities .......................... 59,953 Federal funds sold and securities purchased under agreements to resell Federal funds sold in domestic offices ............ 6,054 Securities purchased under agreements to resell ... 74,680 Loans and lease financing receivables: Loans and leases held for sale .................... 11,686 Loans and leases, net of unearned income $168,109 Less: Allowance for loan and lease losses 3,241 Loans and leases, net of unearned income and allowance ......................................... 164,868 Trading Assets.......................................... 179,236 Premises and fixed assets (including capitalized leases) 5,999 Other real estate owned................................. 60 Investments in unconsolidated subsidiaries and associated companies .............................. 376 Customers' liability to this bank on acceptances outstanding ....................................... 273 Intangible assets Goodwill ....................................... 2,156 Other Intangible assets ........................ 5,786 Other assets ........................................... 38,554 TOTAL ASSETS ........................................... $581,407 ======== - 4 - LIABILITIES Deposits In domestic offices ......................................... $ 158,559 Noninterest-bearing ............. $ 65,503 Interest-bearing ................ 93,056 In foreign offices, Edge and Agreement subsidiaries and IBF's ...................................... 129,207 Noninterest-bearing .......... $ 9,645 Interest-bearing ................ 119,562 Federal funds purchased and securities sold under agreements to repurchase: Federal funds purchased in domestic offices ................. 15,942 Securities sold under agreements to repurchase .............. 88,781 Trading liabilities .............................................. 105,568 Other borrowed money (includes mortgage indebtedness and obligations under capitalized leases) ................... 12,583 Bank's liability on acceptances executed and outstanding ......... 278 Subordinated notes and debentures ................................ 9,249 Other liabilities ................................................ 26,053 TOTAL LIABILITIES ................................................ 546,220 Minority Interest in consolidated subsidiaries ................... 100 EQUITY CAPITAL Perpetual preferred stock and related surplus .................... 0 Common stock ..................................................... 1,785 Surplus (exclude all surplus related to preferred stock) ........ 16,304 Retained earnings ................................................ 17,013 Accumulated other comprehensive income ........................... (15) Other equity capital components .................................. 0 TOTAL EQUITY CAPITAL ............................................. 35,087 --------- TOTAL LIABILITIES, MINORITY INTEREST, AND EQUITY CAPITAL ......... $ 581,407 =========
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby declare that this Report of Condition has been prepared in conformance with the instructions issued by the appropriate Federal regulatory authority and is true to the best of my knowledge and belief. JOSEPH L. SCLAFANI We, the undersigned directors, attest to the correctness of this Report of Condition and declare that it has been examined by us, and to the best of our knowledge and belief has been prepared in conformance with the in- structions issued by the appropriate Federal regulatory authority and is true and correct. WILLIAM B. HARRISON, JR. ) HELENE L. KAPLAN ) WILLLIAM H. 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