EXHIBIT
10.2




ASSIGNMENT
  OF
  AMENDED
AND RESTATED OPTION AGREEMENT
  This
ASSIGNMENT OF AMENDED AND RESTATED OPTION AGREEMENT (this “Assignment”),
effective as of 12:01 a.m. on April 1, 2008, among (i) PLATINUM
UNDERWRITERS HOLDINGS, LTD., a company organized under the laws of the Islands
of Bermuda (the “Company”), (ii) THE TRAVELERS COMPANIES, INC., a company
incorporated under the laws of the State of Minnesota in the United States of
America and formerly known as The St. Paul Travelers Companies, Inc.
(“Travelers”), and (iii) UNIONAMERICA INSURANCE COMPANY LIMITED
(“Unionamerica”), a company organized under the laws of England and Wales, a
wholly owned subsidiary of Travelers and a successor-in-interest, by Part VII
transfer effective December 31, 2007, to St. Paul Reinsurance Company
Limited (now known as SPRE Limited and referred to herein as “St. Paul
Reinsurance”).
  RECITALS:
  WHEREAS,
the Company, St. Paul Reinsurance and Travelers entered into an Amended and
Restated Option Agreement dated as of January 10, 2005, which is attached
hereto as Annex 1 (the “Amended Option Agreement”), pursuant to which an option
as described therein (the “Option”) was granted to St. Paul
Reinsurance;
  WHEREAS,
upon the transfer of substantially all of the assets and liabilities of
St. Paul Reinsurance to Unionamerica pursuant to Part VII of the Financial
Services and Markets Act 2000 of the United Kingdom (the “FSMA”) and the
approval of the High Court of England, Unionamerica succeeded to the interest of
St. Paul Reinsurance for all purposes under the Option and the Amended
Option Agreement;
  WHEREAS,
Unionamerica desires to assign the Option, and all of its rights and obligations
under the Amended Option Agreement, to Travelers; and
  WHEREAS,
the Amended Option Agreement provides that Unionamerica may assign the Option to
Travelers provided that Travelers shall enter into an option agreement with the
Company that is substantially identical to the Amended Option
Agreement.
  NOW,
THEREFORE, in consideration of the mutual promises, covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
  1.  Unionamerica
hereby grants, transfers, conveys and assigns to Travelers all of Unionamerica’s
right, title and interest in and to the Option and the Amended Option Agreement,
and Travelers hereby assumes all of the obligations, and is entitled to all of
the benefits, of Unionamerica under the Option and the Amended Option Agreement,
in consideration of the payment by Travelers to Unionamerica of Nine Million,
One Hundred Forty Eight Thousand, Two Hundred Seventy Nine U. S. Dollars and
Eighty Cents ($9,148,279.80) (which constitutes the fair market value of the
Option on March 31, 2008).  Such payment is being made by
Travelers to Unionamerica concurrently with the execution of this Assignment
and, by execution and delivery of this Assignment by Unionamerica, Unionamerica
hereby acknowledges receipt of such payment from
Travelers.  Unionamerica hereby agrees, from time to time, without any
additional consideration, to execute and deliver such further separate
assignments or other instruments of conveyance or transfer as may become
necessary or desirable in order to effect the assignment of the Option and the
Amended Option Agreement.
  2.  From
and after the date hereof, Travelers shall be deemed to be “the Optionee” under
the Amended Option Agreement for all purposes, and shall have all the rights and
obligations of Unionamerica thereunder, in addition to the rights and
obligations that it had prior to the date hereof as a party to the Amended
Option Agreement.
  3.  The
parties hereto hereby agree that the Amended Option Agreement continues in full
force and effect in every respect except as modified pursuant to Section 2
hereof.
  4.  Unionamerica
represents and warrants that pursuant to Part VII of the FSMA, substantially all
of the assets and liabilities of St. Paul Reinsurance were transferred to
Unionamerica and that Unionamerica has succeeded to the interest of
St. Paul Reinsurance for all purposes under the Option and the Amended
Option Agreement.
  5.  Each
of the parties hereto represents and warrants to the other parties hereto that
(i) it has all requisite corporate power and authority to execute and
deliver this Assignment, (ii) its execution and delivery of this Assignment
has been duly and validly authorized by all necessary corporate action on the
part of such party, (iii) it has duly executed and delivered this
Assignment, and (iv) this Assignment constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its
terms.
  
  [Signature
page follows]
   
  IN
WITNESS WHEREOF, each of the parties hereto has caused this ASSIGNMENT OF
AMENDED AND RESTATED OPTION AGREEMENT to be duly executed by a duly authorized
officer as of the time, date and year first above written.
  PLATINUM
      UNDERWRITERS HOLDINGS, LTD.By:/s/
      Michael E. Lombardozzi
 Name:  Michael
      E. Lombardozzi
 Title:  Executive
      Vice President, General Counsel and Chief Administrative
      Officer
 
 THE
      TRAVELERS COMPANIES, INC.By:/s/
      Wendy C. Skjerven
 Name:  Wendy
      C. Skjerven
 Title:  Assistant
      Corporate Secretary
 
  UNIONAMERICA
      INSURANCE COMPANY LIMITED, successor-in-interest to SPRE LIMITEDBy:/s/
      Howard Eyre
 Name:  Howard
      Eyre
 Title:  Chairman
  
    AMENDED
AND RESTATED OPTION AGREEMENT
  This AMENDED AND RESTATED OPTION
AGREEMENT (this “Agreement”), dated as of January 10, 2005, amends and
restates the OPTION AGREEMENT, dated November 1, 2002 (the “Option
Agreement”), between (i) PLATINUM UNDERWRITERS HOLDINGS, LTD., a company
organized under the laws of the Islands of Bermuda (the “Company”),
(ii) ST. PAUL REINSURANCE COMPANY LIMITED (the “Optionee”), a company
organized under the laws of England and Wales and a wholly owned subsidiary of
THE ST. PAUL TRAVELERS COMPANIES, INC., a company incorporated under the
laws of the State of Minnesota in the United States of America and formerly
known as The St. Paul Companies, Inc. (“St. Paul Travelers”), and
(iii) ST. PAUL TRAVELERS.
  RECITALS:
  WHEREAS, the Company completed an
initial public offering (the “Public Offering”) of its common shares, par value
U.S.$0.01 per share (the “Common Shares”), on November 1,
2002;
  WHEREAS, St. Paul Travelers and
the Company entered into a Formation and Separation Agreement, dated as of
October 28, 2002 (the “Formation and Separation Agreement”), pursuant to
which St. Paul Travelers agreed to purchase from the Company that number of
Common Shares determined as set forth in the Formation and Separation
Agreement;
  WHEREAS, pursuant to the Formation and
Separation Agreement, the Company, the Optionee and St. Paul Travelers
entered into the Option Agreement pursuant to which the Company granted to the
Optionee, in respect of St. Paul Travelers’ initial investment in the
Company, an option (the “Original Option”) to purchase up to 894,260 Common
Shares following the completion of the Public Offering at an exercise price of
$27.00, which equals 120 percent of the Public Offering price per Common
Share;
  WHEREAS, the parties hereto desire that
the Original Option be amended to provide that any exercise thereof shall be on
a net share settlement basis with payment by the Optionee to the Company of cash
consideration per Common Share issued upon such exercise of the then par value
of such Common Share; and
  WHEREAS, the Company has determined
that the Company will benefit from a reduction in the overhang on the market
which arises from the Original Option, the Company has no need of the capital
represented by the aggregate Original Option Price, and it is in the best
interests of the Company to amend the Original Option in accordance with the
desires of the parties hereto.
  NOW, THEREFORE, in consideration of the
mutual promises, covenants and agreements set forth herein and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree that the Option Agreement shall be
amended and restated in its entirety as follows:
   THE
OPTION (AS DEFINED BELOW) HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933.  NEITHER THE OPTION, NOR ANY INTEREST THEREIN, NOR ANY COMMON
SHARES DELIVERABLE UPON EXERCISE THEREOF MAY BE ASSIGNED OR OTHERWISE
TRANSFERRED, DISPOSED OF OR ENCUMBERED EXCEPT FOLLOWING RECEIPT BY PLATINUM
UNDERWRITERS HOLDINGS, LTD. (THE “COMPANY”) OF EVIDENCE SATISFACTORY TO IT,
WHICH MAY INCLUDE AN OPINION OF UNITED STATES COUNSEL, THAT SUCH TRANSFER DOES
NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR STATE SECURITIES LAWS AND
UPON OBTAINMENT OF ANY REQUIRED GOVERNMENT APPROVALS AND EXCEPT TO THE EXTENT
PERMITTED HEREIN.  TRANSFER (AS DEFINED IN THE COMPANY’S BYE-LAWS) OF
THE OPTION OR ANY INTEREST THEREIN, OR ANY COMMON SHARES DELIVERABLE UPON
EXERCISE THEREOF, MAY BE DISAPPROVED BY THE BOARD OF DIRECTORS OF THE COMPANY
IF, IN ITS REASONABLE JUDGMENT, IT HAS REASON TO BELIEVE THAT SUCH TRANSFER MAY
EXPOSE THE COMPANY, ANY SUBSIDIARY THEREOF, ANY SHAREHOLDER OR ANY PERSON CEDING
INSURANCE TO THE COMPANY OR ANY SUCH SUBSIDIARY TO ADVERSE TAX OR REGULATORY
TREATMENT IN ANY JURISDICTION.  COMMON SHARES OBTAINED UPON EXERCISE
OF THE OPTION ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER AS SET FORTH
IN SECTION 6 OF THIS AGREEMENT.
  1.  (a)           
The Company grants the Optionee an option (the “Option”) to purchase up to
894,260 Common Shares (the “Option Shares”) in accordance with the terms of this
Agreement.
  (b)  The
Option is exercisable, in whole or in part at any time prior to November 1,
2012 (the “Exercise Period”), at an exercise price per Common Share (the
“Exercise Price”) equal to $27.00 less the then par value of such Common Share,
as such Exercise Price is adjusted from time to time pursuant hereto, which
Exercise Price shall be paid by reducing the number of Common Shares obtainable
upon exercise of the Option as provided in Section 1(d) hereof.  As
additional consideration, in connection with any exercise of the Option, the
Optionee must pay the applicable Cash Consideration to the Company in accordance
with Section 2 below.
  (c)  The
Option may be exercised on any day during the Exercise Period, other than a
Saturday, Sunday or other day on which banking institutions in New York City or
Bermuda are authorized or obligated by law or executive order to close (a
“Business Day”).  The Option may be exercised as provided herein until
12:01 A.M., New York City time, on the first day after the expiration of
the Exercise Period.
  (d)  Upon any
exercise of the Option, the Exercise Price shall be paid by reducing the number
of Option Shares obtainable upon such exercise so as to yield a number of Option
Shares issuable upon such exercise equal to the product of (x) the number of
Option Shares issuable as of the Notice Date (if payment of the Exercise Price
were being made in cash) and (y) the Exchange Ratio.  For purposes
hereof, (i) “Exchange Ratio” means a fraction, the numerator of which is the
excess of the Market Price per Common Share over the Exercise Price per share as
of the Notice Date and the denominator of which is the Market Price per Common
Share; (ii) “Market Price” means the average of the daily Closing Price per
Common Share for each of the five consecutive Trading Days ending on the Notice
Date (the “Pre-Notice Average”) plus the average of the daily Closing Price per
Common Share for each of the five consecutive Trading Days immediately following
the Notice Date (the “Post-Notice Average”) divided by two; provided, however, that the
Post-Notice Average shall not exceed the Pre-Notice Average multiplied by 1.025
nor be less than the Pre-Notice Average multiplied by 0.975; (iii) “Trading Day”
means each Monday, Tuesday, Wednesday, Thursday and Friday, other than any day
on which the Common Shares are not traded on the applicable securities exchange
or on the applicable securities market; (iv) “Closing Price” means the reported
last sale price regular way or, in case no such reported sale takes place on
such day, the average of the reported closing bid and asked prices regular way,
in either case on the New York Stock Exchange or, if the Common Shares are not
listed or admitted to trading on such Exchange, on the principal national
securities exchange on which the Common Shares are listed or admitted to trading
or, if not listed or admitted to trading on any national securities exchange, on
the NASDAQ National Market or, if the Common Shares are not listed or admitted
to trading on any national securities exchange or quoted on the NASDAQ National
Market, the average of the closing bid and asked prices in the over-the-counter
market as furnished by any New York Stock Exchange member firm reasonably
selected from time to time by the Board of Directors of the Company for that
purpose; and (v) “Notice Date” means the date upon which the Company receives
written notice (which shall be signed on behalf of the Optionee and delivered or
sent to the Company in accordance with Section 9 hereof) from the Optionee of
the Optionee’s exercise of the Option, provided that the Company shall receive
such notice no later than 11:59 pm Bermuda time on such date.
  
  (e)  No
fractional Common Share shall be issued upon any exercise of the
Option.  In lieu of a fractional Common Share, the Optionee shall be
entitled to receive cash for the value of the fractional Common Share, which
cash payment shall be equal to the product of (i) the fraction represented
by the fractional Common Share that would have been issued absent this Section
1(e) and (ii) the Market Price.
  (f)  In
connection with any exercise of the Option, the Market Price, the Exercise
Price, and the number of Option Shares to be issued (after giving effect to the
payment of the Exercise Price as provided in Section 1(d) hereof) will be
determined by the Company within three Business Days after the last Trading Day
included in the Post-Notice Average (the “Determination Date”).
  (g)  Notwithstanding
anything to the contrary in this Agreement, St. Paul Travelers’ beneficial
ownership interest in the Common Shares may not at any time and under any
circumstances be equal to or exceed that percentage of the Common Shares
outstanding that would cause St. Paul Travelers to be a “United States 25%
Shareholder” as defined in the Company’s bye-laws as in effect as of the
completion of the Public Offering.  It is agreed and understood that,
prior to any exercise of the Option, St. Paul Travelers shall, if
necessary, dispose (or cause the Optionee to dispose, as applicable) of such
number of Common Shares so that, immediately after any exercise of the Option,
St. Paul Travelers will not be a “United States 25%
Shareholder.”
  (h)  The
Option Shares upon issue will rank equally in all respects with the other Common
Shares of the Company, but in no case will any Option Shares carry any option or
other right to subscribe for further additional shares.
  (i)  Neither
the Optionee nor St. Paul Travelers is, solely by virtue hereof, entitled
to any rights of a shareholder in the Company either at law or in
equity.
  (j)  Upon any
merger, amalgamation, consolidation, scheme of arrangement or similar
transaction involving the Company and any third party that is not a subsidiary
of the Company, or any sale of all or substantially all the assets of the
Company to any third party that is not a subsidiary of the Company (each, a
“Transaction”) in which all holders of Common Shares become entitled to receive,
in respect of such shares, any capital stock, rights to acquire capital stock or
other securities of the Company or of any other person, any cash or any other
property, or any combination of the foregoing (collectively, “Transaction
Consideration”), the Option shall entitle the Optionee, upon exercise thereof
and payment by the Optionee of the Cash Consideration, to receive all
Transaction Consideration that the Optionee would have been entitled to if it
had exercised the Option in full immediately prior to the Transaction (without
regard to the limitations in Section 1(g) hereof).  In determining the
kind and amount of Transaction Consideration that the Optionee would be entitled
to receive in respect of any Transaction pursuant to this Section 1(j), the
Optionee shall be entitled to exercise any rights of election as to the kinds
and amounts of consideration receivable in such Transaction that are provided to
holders of Common Shares in such Transactions.  Any adjustment in
respect of a Transaction pursuant to this Section 1(j) shall become effective
immediately after the effective time of such Transaction, retroactive to any
record date therefor.  The Company shall take such action as is
necessary to ensure that the Optionee shall be entitled to receive Transaction
Consideration upon the terms and conditions provided in this Section
1(j).  Notwithstanding the foregoing, if an adjustment is made
pursuant to this Section 1(j) in respect of a Transaction that involves a Change
of Control (as defined below), the Optionee shall be entitled to exercise the
Option pursuant to this Section 1(j) without regard to Section 1(g)
hereof.  A Transaction is deemed to have involved a “Change of
Control” if the beneficial owners of the outstanding Common Shares immediately
prior to the effective time of such Transaction are not the beneficial owners of
a majority of the total voting power of the surviving or acquiring entity in the
Transaction, as the case may be, immediately after such effective
time.
  2.  (a)           To
exercise the Option in accordance with Section 1 hereof, the Optionee shall
provide written notice to the Company of its intention to exercise all or a
portion of the Option.  Such notice must indicate the number of Option
Shares the Optionee intends to purchase upon exercise of the Option (prior to
giving effect to the payment of the Exercise Price pursuant to Section 1(d)
hereof).
  (b)  On the
Determination Date, the Company shall deliver written notice to the Optionee of
the number of Option Shares to which the Optionee is entitled as a result of the
exercise of the Option.  Upon payment by the Optionee to the Company
of the Cash Consideration (which may be made by check, cash or wire transfer),
the Company shall promptly (but in no event later than the third Business Day
after receipt of such payment from the Optionee) deliver to the Optionee the
Option Shares, and shall pay to the Optionee the cash in lieu of any fractional
Common Share, which may be paid by check, cash or wire transfer.  The
“Cash Consideration” means an amount equal to the product of (i) the number of
Option Shares to which the Optionee is entitled as a result of the exercise of
the Option (after giving effect to the payment of the Exercise Price pursuant to
Section 1(d) hereof) and (ii) the then per share par value of a Common
Share.  Any increase in the par value of the Common Shares from $0.01
per Common Share which would have the effect of increasing the Cash
Consideration, other than in the case of any of the actions described in Section
3(a)(B) and 3(a)(C) hereof which includes a proportionate adjustment in the par
value, shall be subject to the prior written consent of the
Optionee.
  (c)  Notwithstanding
anything to the contrary in this Agreement, the Option may not be exercised
under this Agreement unless the required regulatory approvals set forth in
Section 5 shall have been obtained.
  3.  (a)           In
case the Company:
  (A)  declares
or pays a dividend or makes any other distribution with respect to its capital
stock in Common Shares such that the number of Common Shares outstanding is
increased,
  (B)  subdivides
or splits-up its outstanding Common Shares, such that the number of Common
Shares outstanding is increased,
  (C)  combines
its outstanding Common Shares into a smaller number of Common Shares
or
  (D)  effects
any reclassification of the Common Shares other than a change in par value
(including any such reclassification in connection with an amalgamation or
merger in which the Company
 is the surviving entity or a
reincorporation of the Company),
  the
number of Option Shares issuable upon exercise of the Option shall be
proportionately adjusted so that the Optionee will be entitled to receive the
kind and number of Common Shares or other securities of the Company which it
would have been entitled to receive after the happening of any of the events
described above if the Option had been exercised immediately prior to the
happening of such event or any record date with respect thereto.  An
adjustment made pursuant to this Section 3(a) shall become effective immediately
after the effective date of such event retroactive to the record date, if any,
for such event.
  
 (b)  In case
the Company issues rights, options or warrants to all holders of its outstanding
Common Shares entitling them to subscribe for or purchase Common Shares at a
price per Common Share which is lower at the record date mentioned below than
the then Current Market Value (as defined in Section 3(d)), the number of Option
Shares that the Optionee may purchase thereafter upon the exercise of the Option
(prior to giving effect to the payment of the Exercise Price pursuant to
Section 1(d) hereof) will be determined by multiplying the number of Option
Shares theretofore purchasable upon exercise of the Option by a fraction, of which
the numerator is the sum of (A) the number of Common Shares outstanding on the
record date for determining shareholders entitled to receive such rights,
options or warrants plus (B) the number of additional Common Shares offered for
subscription or purchase, and of which the denominator shall be the sum of (A)
the number of Common Shares outstanding on the record date for determining
shareholders entitled to receive such rights, options or warrants plus (B) the
number of shares which the aggregate offering price of the total number of
Common Shares so offered would purchase at the Current Market Value (as defined
below in Section 3(d)) per Common Share at such record date.  Such
adjustment shall be made whenever such rights, options or warrants are issued,
and shall become effective immediately after the record date for the
determination of shareholders entitled to receive such rights, options or
warrants.
  (c)  In the
event the Company distributes to all holders of its Common Shares any of the
capital stock of any of its subsidiaries (each, a “Subsidiary”), the Option will
upon such distribution be deemed to be an option to acquire the kind and number
of shares of the capital stock of the Subsidiary which the Optionee would have
been entitled to receive after such distribution had the Option been exercised
immediately prior to such distribution or any record date with respect
thereto.  The roll-over of the Option into an option to acquire shares
of capital stock of the applicable Subsidiary pursuant to this Section 3(c) will
become effective immediately after the effective date of the distribution of
shares of the capital stock of the applicable Subsidiary to shareholders of the
Company described above.
  (d)  For the
purpose of any computation under Section 3(b), the “Current Market Value” of
such Common Shares on a specified date is deemed to be the average daily Closing
Price per Common Share for each of the ten consecutive Trading Days ending on
the day before the applicable record date.
  (e)  In the
event the Company shall, in any calendar year, by dividend or otherwise,
distribute to all or substantially all holders of its Common Shares (the
“Current Distribution”) (i) any dividend or other distribution of cash,
evidences of indebtedness, or any other assets or properties (other than as
described in Sections 3(a) through 3(c) above) or (ii) any options, warrants or
other rights to subscribe for or purchase any of the foregoing, with a fair
value (as determined in good faith by the Company’s Board of Directors) per
Common Share that, when combined with the aggregate amount per Common Share paid
in respect of all other such distributions to all or substantially all holders
of its Common Shares within such calendar year, exceeds (1) for calendar year
2003, the Initial Dividend (as defined below) or (2) for any subsequent calendar
year, an amount equal to the Initial Dividend increased at a rate of 10% per
annum from January 1, 2003, compounded annually on December 31 of each year
commencing in 2003 (such excess of the Current Distribution being herein
referred to as the “Excess Distribution Amount”), the per share Exercise Price
in effect immediately prior to the close of business on the date fixed for such
payment shall be reduced by the Excess Distribution Amount, such reduction to
become effective immediately prior to the opening of business on the day
following the date fixed for such payment.  The “Initial Dividend”
means the distributions described in items (i) and (ii) above per Common Share
paid by the Company to all or substantially all holders of its Common Shares
during the 2003 calendar year as determined by the Company’s Board of Directors,
up to a maximum of $0.44 per Common Share.
  (f)  Whenever
the number of Common Shares purchasable by the Optionee upon the exercise of the
Option is adjusted, as herein provided, the Exercise Price shall be adjusted by
multiplying the Exercise Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Option Shares
purchasable upon the exercise of the Option immediately prior to such
adjustment, and of which the denominator shall be the number of Option Shares
purchasable immediately thereafter (in each case, prior to giving effect to the
payment of the Exercise Price pursuant to Section 1(d)
hereof).
  (g)  No
adjustment in the number of Option Shares issuable upon the exercise of the
Option need be made under Section 3(b) and (c) if the Company issues or
distributes, pursuant to this Agreement, to the Optionee the shares, rights,
options, warrants, securities or assets referred to in those Sections which the
Optionee would have been entitled to receive had the Option been exercised prior
to the happening of such event or the record date with respect
thereto.  Other than for adjustments in the Cash Consideration (which
are subject to Section 2(b) hereof), no adjustment need be made for a change in
the par value of the Option Shares.
  (h)  For the
purpose of this Section 3, the term “Common Shares” shall mean (i) the class of
stock consisting of the Common Shares of the Company, or (ii) any other class of
stock resulting from successive changes or reclassification of such shares other
than consisting solely of changes in par value.  In the event that at
any time, as a result of an adjustment made pursuant to Section 3(a) above, the
Optionee will become entitled to receive any securities of the Company other
than Common Shares, thereafter the number of such other securities so receivable
upon exercise of the Option and the Exercise Price of such securities will be
subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Option Shares
contained in Sections 3(a) through 3(f), inclusive, above; provided, however, that the
Exercise Price will at no time be less than the aggregate par value of the
Common Shares or other securities of the Company obtainable upon exercise of the
Option.
  (i)  In the
case of Section 3(b), upon the expiration of any rights, options or warrants or
if any thereof shall not have been exercised, the Exercise Price and the number
of Common Shares purchasable upon the exercise of the Option shall, upon such
expiration, be readjusted and shall thereafter be such as they would have been
had they been originally adjusted (or had the original adjustment not been
required, as the case may be) as if (A) the only Common Shares so issued were
the Common Shares, if any, actually issued or sold upon the exercise of such
rights, options or warrants and (B) such Common Shares, if any, were issued or
sold for the consideration actually received by the Company upon such exercise
plus the aggregate consideration, if any, actually received by the Company for
the issuance, sale or grant of all such rights, options or warrants whether or
not exercised; provided, further, that no such
readjustment may have the effect of increasing the Exercise Price or decreasing
the number of Common Shares purchasable upon the exercise of the Option by an
amount in excess of the amount of the adjustment initially made in respect of
the issuance, sale or grant or such rights, options or warrants.
  (j)  In the
case of Section 3(b), on any change in the number of Common Shares deliverable
upon exercise of any such rights, options or warrants, other than a change
resulting from the
antidilution provisions hereof, the number of Option Shares thereafter
purchasable shall forthwith be readjusted to such number as would have been
obtained had the adjustment made upon the issuance of such rights, options or
warrants not converted prior to such change (or rights, options or warrants
related to such securities not converted prior to such change) been made upon
the basis of such change.
  (k)  The
Company may at its option, at any time during the term of the Option, reduce the
then current Exercise Price to any amount and for any period of time deemed
appropriate by the Board of Directors of the Company, including such reductions
in the Exercise Price as the Company considers to be advisable in order that any
event treated for Federal income tax purposes as a dividend of stock or stock
rights shall not be taxable to the recipients.
  4.  The
Company undertakes to use commercially reasonable efforts to increase (if
necessary) its authorized share capital to a level sufficient to satisfy any
exercise of the Option.
  
  5.  (a)           For
so long as the Option is exercisable hereunder, each party hereto shall
(i) use its commercially reasonable efforts to obtain all authorizations,
consents, orders and approvals of all governmental authorities and officials
that may be or become necessary for the performance of its obligations pursuant
to this Agreement and (ii) cooperate reasonably with the other party in
promptly seeking to obtain all such authorizations, consents, orders and
approvals.  The parties hereto agree to cooperate reasonably, complete
and file any joint applications for any authorizations from any governmental
authorities reasonably necessary or desirable to effectuate the transactions
contemplated by this Agreement.  The parties hereto agree that they
will keep each other apprised of the status of matters relating to the exercise
of the Option, including reasonably promptly furnishing the other with copies of
notices or other communications received by the Company or the Optionee, from
all third parties and governmental authorities with respect to the
Option.
 
 (b)  For so
long as the Option is exercisable, the Company and the Optionee agree to
reasonably promptly prepare and file, if necessary, any filing under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”)
with the Federal Trade Commission (the “FTC”) and the Antitrust Division of the
Department of Justice (the “DOJ”) in order to enable the Optionee to exercise
such Option pursuant to this Agreement.  Each party hereby covenants
to cooperate reasonably with the other such party to the extent reasonably
necessary to assist in making reasonable supplemental presentations to the FTC
or the DOJ, and, if requested by the FTC or the DOJ, to reasonably promptly
amend or furnish additional information thereunder.
  (c)  Any
reasonable out-of-pocket costs and expenses arising in connection with actions
taken pursuant to this Section 5 shall be borne by St. Paul
Travelers.
  6.  (a)  The Option
and the Option Shares may not be assigned or otherwise transferred, disposed of
or encumbered by the Optionee (or any subsequent transferee) in whole or in part
except as provided in this Section 6.  Notwithstanding anything to the
contrary in this Agreement, the Optionee may, at any time, assign or otherwise
transfer, dispose or encumber the Option or the Option Shares in whole or in
part to St. Paul Travelers or any direct or indirect wholly owned
subsidiary thereof, provided that such transferee shall enter into an option
agreement with the Company that is substantially identical to this
Agreement.
  (b)  In the
event of a merger of the Optionee into another person, or a sale, transfer or
lease to another person of all or substantially all the assets of the Optionee,
the Option or the Option Shares may be transferred as part of such transaction
to the other party to such transaction.
  (c)  On and
after January 10, 2005, the Optionee may transfer the Option or the Option
Shares, in whole or in part, in one or more private transaction(s) to up to
three institutional accredited investors; provided, however, that any
proposed transfer is conditioned upon:
  (i)  receipt
by the Company of evidence satisfactory to it, which may include an opinion of
United States counsel, that such transfer would not require registration under
the Securities Act or state securities laws and upon the obtainment of any
required government approvals (which approvals the Company agrees to use
commercially reasonable efforts to assist in obtaining); and
  (ii)  the
proposed transferee executing and delivering instruments reasonably acceptable
to the Company acknowledging:
  (A)  that the
transferee may not offer, sell, assign, pledge or otherwise transfer the Option
or any Option Shares except pursuant to an effective registration statement
under the Securities Act of 1933, as amended (the “Securities Act”), covering
such Option Shares or pursuant to an available exemption from the registration
requirements of the Securities Act and in compliance with all applicable state
securities laws;
  (B)  that the
Company is entitled to decline to register any transfer (as defined in the
Company’s bye-laws) of Option Shares, and any transfer of Option and Option
Shares shall be void, unless (i) such transfer is made pursuant to and in
accordance with Rule 144 (provided that the
Company (or its designated agent for such purpose) may request a certificate
satisfactory to it of compliance by the transferor with the requirements of Rule
144), (ii) such transfer is made pursuant to another available exemption from
the registration requirements of the Securities Act (provided that, if not
already a party hereto, the intended transferee agrees to abide by the
provisions of this Section 6(c)(ii), and provided, further, that, if the
Company requests, the transferor first provides the Company (or such agent) with
evidence satisfactory to it, which may include an opinion of U.S. counsel
satisfactory to the Company, to the effect that such transfer is made pursuant
to another available exemption from the registration requirements of the
Securities Act), (iii) such transfer is made pursuant to an effective
registration statement under the Securities Act covering the Option Shares being
transferred, including a registration statement filed pursuant to the
Registrations Rights Agreement dated November 1, 2002 between the Company
and St. Paul Travelers (the
“Registration Rights Agreement”), and in all cases pursuant to this clause (B)
such transfer is in compliance with all applicable state securities laws (the
Company being entitled to waive or modify the foregoing transfer requirements,
generally or in any particular case, to the extent that it determines, on advice
of U.S. counsel, that compliance with such requirements is not necessary to
ensure compliance with the Securities Act or any applicable state securities
laws, or such modification is necessary to ensure compliance with the Securities
Act or any applicable state securities laws, as the case may be) and (iv) such
transferee agrees to be bound by the provisions of this Agreement;
  (C)  that,
except as provided below, no Option Share shall be held in book-entry form, and
each certificate representing a Option Share shall be evidenced by a certificate
bearing a restrictive legend (the “Legend”) substantially in the form set forth
below:
  THE
COMMON SHARES EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD, ASSIGNED, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE U.S. SECURITIES ACT OF 1933 (THE “SECURITIES ACT”) OR AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS.  SUCH SHARES MAY NOT
BE HELD IN BOOK-ENTRY FORM.  SUCH SHARES ARE ALSO SUBJECT TO
RESTRICTIONS ON TRANSFER (AS DEFINED IN THE BYE-LAWS OF THE COMPANY) SET FORTH
IN THE AMENDED AND RESTATED OPTION AGREEMENTS, EACH DATED AS OF JANUARY 10,
2005, AMONG THE ST. PAUL TRAVELERS COMPANIES, INC., CERTAIN WHOLLY OWNED
SUBSIDIARIES THEREOF AND PLATINUM UNDERWRITERS HOLDINGS, LTD. (THE “COMPANY”),
WHICH MAY REQUIRE, AMONG OTHER THINGS, THE PRIOR RECEIPT BY THE COMPANY FROM THE
TRANSFEROR OR THE TRANSFEREE OF EVIDENCE SATISFACTORY TO IT, WHICH MAY INCLUDE
AN OPINION OF U.S. COUNSEL OR UNDERTAKINGS TO BE BOUND BY SUCH
AGREEMENTS.  SUCH SHARES ARE ALSO SUBJECT TO RESTRICTIONS IN THE
BYE-LAWS OF THE COMPANY, INCLUDING RESTRICTIONS ON TRANSFER AND VOTING INTENDED
TO ENSURE THAT NO PERSON BECOMES OR IS DEEMED TO BECOME A 10% SHAREHOLDER OF THE
COMPANY (AS EXPLAINED IN SUCH BYE-LAWS).
  
 (D)  that the
transferee shall become a party to the Registration Rights Agreement, with the
attendant rights and obligations thereunder; provided, further, that any
proposed transfer may be disapproved by the Board of Directors of the Company
if, in their reasonable judgment, they have reason to believe that such transfer
may expose the Company, any subsidiary thereof, any shareholder or any person
ceding insurance to the Company or any such subsidiary to adverse tax or
regulatory treatment in any jurisdiction.  In connection with or
following any
transfer of Option Shares in accordance with clause (i) or (iii) of Section
6(c)(ii)(B) (except in the case of a transfer of Option Shares to an “affiliate”
of the Company, as such term is defined in the Securities Act, in accordance
with clause (i) of Section 6(c)(ii)(B)), and upon the surrender of any
certificate or certificates representing such Option Shares to the Company (or
such agent), the Company shall cause to be issued in exchange therefor a new
certificate or certificates that represent the same Common Shares and do not
bear the Legend (or shall permit such shares to be held in book-entry
form).  The Company shall use commercially reasonable efforts to cause
each Option Share transferred as contemplated by clause (i) or (iii) of Section
6(c)(ii)(B) to be duly listed on each securities exchange, and to be accepted
for quotation in each interdealer quotation system, on or in which any Common
Shares are listed or quoted at the time of such transfer (provided that the
approval for such listing or quotation has been obtained by the Company), in
each case so that the Option Share so transferred will be freely transferable on
each such exchange and in each such system to the same extent as the Common
Shares then listed thereon or quoted therein; and
  (E)  such
transferee shall not become a “10% Shareholder” (as defined below in this
Section 6(c)) immediately after such transfer (assuming for purposes of this
determination that the Option Shares were actually owned by the transferee);
and
  (iii)  such
transfer not resulting, directly or indirectly, in a transfer to any Specified
Person (as defined below) of more than 9.9% of the Common Shares outstanding at
the time of such transfer, or the right to acquire pursuant to the Option more
than 9.9% of the Common Shares outstanding at the time of such transfer, except
in the following circumstances: (A) in connection with any tender offer or
exchange offer made to all holders of outstanding Common Shares; (B) to any
Post-Closing Subsidiary of St. Paul Travelers (as defined in the Formation
and Separation Agreement) provided that such
subsidiary agrees in writing with the Company to the same transfer restrictions
as are contained in this Section 6(c); or (C) a transfer by operation of law
upon consummation of a merger or consolidation of St. Paul Travelers into
another Person (as defined in the Formation and Separation
Agreement).  For purposes of this Section 6(c)(iii), “Specified
Person” means any Person that generates 50% or more of its gross revenue in its
most recent fiscal year for which financial statements are available by writing
property or casualty insurance or reinsurance.
  As used
herein, “10% Shareholder” means a person who owns, in aggregate, (i) directly,
(ii) with respect to persons who are United States 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 United States Securities Exchange Act of 1934, issued
shares of the Company carrying 10% or more of the total combined voting rights
attaching to all issued shares.
  (d)  In
connection with any proposed transfer of all or a portion of the Option pursuant
to Section 6(c), the Company shall prepare an option agreement (or, in the case
of a partial transfer,
option agreements) substantially identical to this Agreement with the transferee
(and transferor, in the case of partial transfer) upon surrender to the Company
of the existing option agreement prior to the consummation of the transfer. Upon
the execution of such option agreement by the transferee and the Company and the
consummation of the transfer, the transferee shall have such rights and
obligations with respect to the number of Option Shares covered by the portion
of the Option transferred to such transferee as the rights and obligations of
the Optionee to such portion hereunder.
  (e)  Any
transferee of all or part of the Option pursuant to Section 6(c) hereof (or any
subsequent transferee who holds any portion of the Option as a result of a
transfer pursuant to this Section 6(e)) may transfer, in whole but not in part,
the Option to a subsequent transferee; provided that any
such transfer shall be subject to the terms and conditions set forth in Sections
6(c) and 6(d) hereof.
  7.  The
issuance of share certificates upon the exercise of the Option shall be without
charge to the Optionee.  The Company shall pay, and indemnify the
Optionee from and against, any issuance, stamp, documentary or other taxes
(other than transfer taxes and income taxes), or charges imposed by any
governmental body, agency or official by reason of the exercise of the Option or
the resulting issuance of Option Shares.
  8.  This
Agreement may not be amended except in a written instrument signed by the
Company and the Optionee.
  9.  All
notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be given by facsimile and by e-mail transmission addressed
as follows (or to such other address as a party may designate by written notice
to the others) and shall be deemed given on the date on which such notice is
received:
  If to the
Optionee:
  The
St. Paul Travelers Companies, Inc.
 385
Washington Street
 St. Paul,
Minnesota   55102
 Attention:  General
Counsel
 Facsimile:       (651)
310-5853
 E-mail:             kspence@spt.com
 
 with a
copy to:
  Donald R.
Crawshaw
 Sullivan
& Cromwell
 125 Broad
Street
 New York,
New York  10004
 Facsimile:       (212)
558-3588
 E-mail:            crawshawd@sullcrom.com
   
  If to the
Company:
  Platinum
Underwriters Holdings, Ltd.
 The
Belvedere Building
 69 Pitts
Bay Road
 Pembroke,
HM 08
 Bermuda
 Attention:     
Michael E. Lombardozzi
 
 Facsimile:      (441)
292-4720
 
 with a
copy to:
  Linda E.
Ransom
 Dewey
Ballentine LLP
 1301
Avenue of the Americas
 New York,
New York  10019
 Facsimile:       (212)
259-6333
 E-mail:             lransome@dbllp.com
 
 10.  This
Agreement, the Formation and Separation Agreement and the Registration Rights
Agreement (which, for the avoidance of doubt, shall apply to any Common Shares
issued under this Agreement in the same manner as to any Common Shares that were
issuable under the Option Agreement) constitute the entire agreement between the
parties hereto with respect to the subject matter hereof and supersede all prior
agreements and understandings, oral and written, between the parties hereto with
respect to the subject matter hereof.
  11.  This
Agreement shall inure to the benefit of and be binding upon the parties hereto,
and their respective successors and permitted assigns.  Nothing in
this Agreement, expressed or implied, is intended to confer on any person other
than the parties hereto, and their respective successors and permitted assigns,
any rights, remedies, obligations or liabilities under or by reason of this
Agreement.
  12.  St. Paul
Travelers shall, in its capacity as the parent company of the Optionee, cause
the Optionee to comply with the provisions of this Agreement.
  13.  This
Agreement may not be assigned by any party hereto, except to a party to whom the
Optionee transfers the Option or Option Shares in accordance with Section 6 of
this Agreement, and then only in accordance with that section.
  14.  The
headings contained in this Agreement are for convenience only and do not affect
the meaning or interpretation of this Agreement.
  15.  (a)This Agreement
shall be governed by, and construed in accordance with, the law of the State of
New York (without regard to principles of conflict of laws).
  (b)  The
parties hereto shall promptly submit any dispute, claim, or controversy arising
out of or relating to this Agreement, including effect, validity, breach,
interpretation, performance, or enforcement (collectively, a “Dispute”) to
binding arbitration in New York, New York at the offices of Judicial Arbitration
and Mediation Services, Inc. (“JAMS”) before an arbitrator (the “Arbitrator”) in
accordance with JAMS’ Comprehensive Arbitration Rules and Procedures and the
Federal Arbitration Act, 9 U.S.C. §§ 1 et seq.  The Arbitrator shall
be a former judge selected from JAMS’ pool of neutrals.  The parties
agree that, except as otherwise provided herein respecting temporary or
preliminary injunctive relief, binding arbitration shall be the sole means of
resolving any Dispute.  Judgment on any award of the Arbitrators may
be entered by any court of competent jurisdiction.
  (c)  The costs
of the arbitration proceeding and any proceeding in court to confirm or to
vacate any arbitration award or to obtain temporary or preliminary injunctive
relief as provided in Section 14(d) below, as applicable (including, without
limitation, actual attorneys’ fees and costs), shall be borne by the
unsuccessful party and shall be awarded as part of the Arbitrator’s decision,
unless the Arbitrator shall otherwise allocate such costs in such
decision.
  (d)  This
Section 15 shall not prevent the parties hereto from seeking or obtaining
temporary or preliminary injunctive relieve in a court for any breach or
threatened breach of any provision hereof pending the hearing before and
determination of the Arbitrator.  The parties hereby agree that they
shall continue to perform their obligations under this Agreement pending the
hearing before and determination of the Arbitrator, it being agreed and
understood that the failure to so provide will cause irreparable harm to the
other party hereto and that the putative breaching party has assumed all of the
commercial risks associated with such breach or threatened breach of any
provision hereof by such party.
  (e)  The
parties agree that the State and Federal courts in The City of New York shall
have jurisdiction for purposes of enforcement of their agreement to submit
Disputes to arbitration and of any award of the Arbitrator.
  16.  Capitalized
terms used but not defined in this Agreement have the meanings specified in the
Formation and Separation Agreement.
   
  IN WITNESS WHEREOF, each of the parties
hereto has caused this AGREEMENT to be duly executed by a duly authorized
officer as of the date and year first above written.
   PLATINUM
      UNDERWRITERS HOLDINGS, LTD.By:/s/
      Gregory E.A. Morrison
 Name:  Gregory
      E.A. Morrison
 Title:  President
      and Chief Executive Officer
 
 THE
      ST. PAUL TRAVELERS COMPANIES, INC.By:/s/
      Samuel Liss
 Name:  Samuel
      Liss
 Title:  Executive
      Vice President– Business
Development
 
  ST.
      PAUL REINSURANCE COMPANY LIMITEDBy:/s/
      Alistair J.S. Gunn
 Name:  Alistair
      J.S. Gunn
 Title:  Director