Document:

QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.1    
  

 
 

ESCROW AGREEMENT    
  

        THIS ESCROW AGREEMENT is made and entered into as of the            day
of                        , 2002, by and between USA Capital First Trust Deed
Fund, LLC, a Nevada limited-liability company (the "Fund"), USA Securities, LLC, a Nevada limited-liability company ("USA Securities"), and Wells Fargo Bank Arizona, National Association
(the "Escrow Agent"). 

        WHEREAS,
pursuant to a Registration Statement on Form S-11, as filed with the Securities and Exchange Commission and as amended by the Fund, the Fund intends to
publicly offer not less than $1,500,000.00 nor more than $120,000,000.00 of securities, consisting of a minimum of 300 membership units and a maximum of 24,000 membership units of the Fund (the
"Securities"), for which each subscriber will pay $5,000.00 per unit; and 

        WHEREAS,
the terms of the offering require that the proceeds to be received from the offering should be placed in escrow until such time as subscriptions for $1,500,000.00 of the
Securities (the "Minimum Amount") has been deposited into escrow; 

        WHEREAS,
the Securities will be offered and sold by USA Securities on behalf of the Fund; 

        WHEREAS,
the Escrow Agent is willing to accept appointment as Escrow Agent for only the expressed duties outlined herein. 

        NOW,
THEREFORE, in consideration of the premises and agreements set forth herein, the parties hereto agree as follows: 

1.    PROCEEDS TO BE ESCROWED  

        All funds received by the Fund in payment for the Securities will be promptly transmitted to the Escrow Agent by noon of the business day following the day upon
which such proceeds are received by the Fund and shall be retained in escrow by the Escrow Agent and invested as stated below. During the term of this Escrow Agreement, the Fund shall cause all checks
received by and made payable to it in payment for such Securities to be endorsed in favor of "Wells Fargo Bank fbo USA Capital First Trust Deed Fund."

        In
the event that any checks deposited in the escrow accounts prove uncollectable after the funds represented thereby have been released by the Escrow Agent to the Fund, then the Fund
shall promptly reimburse the Escrow Agent for any and all cost incurred for such, upon request, and the Escrow Agent shall deliver the returned checks to the Fund. 

2.    IDENTITY OF SUBSCRIBERS  

        The Fund shall furnish to the Escrow Agent with each delivery of funds, as provided in paragraph 1 hereof, a list of the persons who have paid money for
the purchase of the Securities showing the name, address, amount of the Securities subscribed for and the amount of money paid. All proceeds so deposited shall remain the property of the subscriber
and shall not be subject to any liens or charges by the Fund, or the Escrow Agent, or judgments or creditors' claims against the Fund, until released to the Fund as hereinafter provided. 

3.    DISBURSEMENT OF FUNDS  

        From time to time, and at the end of the third business day following the Termination Date (as defined in paragraph 4 hereof), the Escrow Agent shall
notify the Fund of the amount of the funds received hereunder. If payments of the Minimum Amount or more for the Securities are obtained at any time prior to the Termination Date and the Escrow Agent
has not received written notice from the Fund that it is abandoning the sale of the Securities, then the Escrow Agent shall pay out the escrowed funds and all earnings thereon when and as directed by
the Fund. If the Minimum Amount has not 

 

been delivered prior to the Termination Date, the Escrow Agent shall promptly return, but in no event more than thirty (30) days after the Termination Date, to each subscriber at the address
appearing on
the list of subscribers, or at such other address as shall be furnished to the Escrow Agent by the subscriber in writing, all sums paid by the subscriber pursuant to the subscriber's subscription
agreement for the Securities, without the interest earned on such funds in the escrow account, and shall then notify the Fund in writing of such refunds. 

4.    TERM OF ESCROW  

        The "Termination Date" shall be the earlier of: (a) one hundred and eighty (180) days from the date the Fund's Registration Statement on
Form S-11, as amended (File No. 333-59362), is declared effective by the Securities and Exchange Commission; (b) the date the Escrow Agent received written
notice from the Fund that it is abandoning the sale of the Securities, subject to Section 3; or (c) the one (1) year anniversary from the date of this Escrow Agreement; provided,
however, written notice of the termination of this escrow shall be provided by the Fund. 

5.    DUTY AND LIABILITY OF THE ESCROW AGENT  

        The sole duty of the Escrow Agent, other than as herein specified, shall be to receive said funds and hold them subject to release, in accordance herewith, and
the Escrow Agent shall be under no duty to determine whether the Fund is complying with requirements of this Escrow Agreement in tendering to the Escrow Agent said proceeds of the sale of said
securities. The Escrow Agent may conclusively rely upon and shall be protected in acting upon any statement, certificate, notice, request, consent, order or other document believed by it to be genuine
and to have been signed or presented by the proper party or parties. The Escrow Agent shall have no duty or liability to verify any such statement, certificate, notice, request, consent, order or
other document, and its sole responsibility shall be to act only as expressly set forth in this Escrow Agreement. The Escrow Agent shall be under no obligation to institute or defend any action, suit
or proceeding in connection with this Escrow Agreement unless first indemnified to its satisfaction. The Escrow Agent may consult counsel in respect of any question arising under this Escrow Agreement
and the Escrow Agent shall not be liable for any action taken or omitted in good faith upon advice of such counsel. 

6.    ESCROW AGENT'S FEE  

        The Escrow Agent shall be entitled to compensation for its services as stated in the fee schedule attached hereto as  Exhibit A,
 which compensation shall be paid by the Fund. The fee agreed upon for the services rendered hereunder is intended as full compensation
for the Escrow Agent's services as contemplated by this Escrow Agreement; provided, however, that in the event that the conditions for the disbursement of funds under this Escrow Agreement are not
fulfilled, or the Escrow Agent renders any material service not contemplated in this Escrow Agreement, or there is any assignment of interest in the subject matter of this Escrow Agreement, or any
material modification hereof, or if any material controversy arises hereunder, or the Escrow Agent is made a party to any litigation pertaining to this Escrow Agreement, or the subject matter hereof,
then the Escrow Agent shall be reasonably compensated for such extraordinary services and reimbursed for all costs and expenses, including
reasonable attorney's fees, occasioned by any delay, controversy, litigation or event, and the same shall be recoverable from the Fund. 

7.    INVESTMENT OF PROCEEDS  

        All funds held by the Escrow Agent pursuant to this Escrow Agreement shall constitute trust property for the purposes for which they are held. The Escrow Agent
shall invest all funds received from subscribers in: (a) government securities, which shall mean the direct obligations of, or obligations guaranteed by, the United States of America for the
payment of which guarantee or obligations the full 

2

 

faith and credit of the United States is pledged; and (b) any short-term certificate of deposit issued by, or time deposit of, a commercial banking institution that has combined
capital and surplus of not less than $500 million or its equivalent in foreign currency, whose debt is rated "A" (or higher) according to Standard & Poor's Corporation or Moody's
Investors Service, Inc. at the time as of which any investment or rollover therein is made. Any and all income earned with respect to the funds held by the Escrow Agent pursuant to this Escrow
Agreement shall constitute trust property for the benefit of the Fund and shall be remitted to the Fund at its request. 

        Notwithstanding
the foregoing, the Escrow Agent shall be prohibited from investing any funds received from subscribers in: (a) money market funds; (b) corporate equity or
debt securities; (c) repurchase agreements; (d) banker's acceptances; (e) commercial paper; or (f) municipal securities. 

8.    ISSUANCE OF CERTIFICATES  

        Until the terms of this Escrow Agreement with respect to the Securities have been met and the funds hereunder received from subscriptions for the Securities have
been released to the Fund, the Fund may not issue any certificates or other evidence of the Securities, except subscription agreements. 

9.    NOTICES  

        All notices, requests, demands, and other communications under this Escrow Agreement shall be in writing and shall be deemed to have been duly given:
(a) on the date of service if served personally on the party to whom notice is to be given; (b) on the day of transmission if sent by facsimile transmission to the facsimile number given
below, and telephonic confirmation of receipt is obtained promptly after completion of transmission; (c) on the day after delivery to Federal Express or similar overnight courier or the Express
Mail service maintained by the United States Postal Service; or (d) on the fifth day after
mailing, if mailed to the party to whom notice is to be given, by first class mail, registered or certified, postage prepaid, and properly addressed, return receipt requested, to the party as follows: 

If
to USA Capital First Trust Deed Fund, LLC: 

USA
Capital First Trust Deed Fund, LLC

c/o USA Capital Realty Advisors, LLC

4484 South Pecos Road

Las Vegas, Nevada 89121

Attn: President

Fax: 702-734-0163 

If
to Escrow Agent: 

Wells
Fargo Bank Arizona, National Association

Corporate Trust Department

MAC S4101-080

100 West Washington

Phoenix, Arizona 85003

Attn: Eunice Ortega

Phone: 602-378-2335

Fax: 602-375-2333 

Any
party may change its address for purposes of this paragraph by giving the other party written notice of the new address in the manner set forth above. 

3

 

10.  INDEMNIFICATION OF THE ESCROW AGENT  

        The Fund hereby indemnifies and holds harmless the Escrow Agent from and against, any and all loss, liability, cost, damage and expense, including, without
limitation, reasonable counsel fees, which the Escrow Agent may suffer or incur by reason of any action, claim or proceeding brought against the Escrow Agent arising out of or relating in any way to
this Escrow Agreement or any transaction to which this Escrow Agreement relates unless such action, claim or proceeding is the result of the willful misconduct of the Escrow Agent. The Escrow Agent
may consult counsel in respect of any question
arising under this Escrow Agreement and the Escrow Agent shall not be liable for any action taken or omitted in good faith upon advice of such counsel. 

11.  SUCCESSORS AND ASSIGNS  

        Except as otherwise provided in this Escrow Agreement, no party hereto shall assign this Escrow Agreement or any rights or obligations hereunder without the prior
written consent to the other parties hereto and any such attempted assignment without such prior written consent shall be void and of no force and effect. This Escrow Agreement shall inure to the
benefit of and shall be binding upon the successors and permitted assigns of the parties hereto. 

12.  GOVERNING LAW; JURISDICTION  

        This Escrow Agreement shall be construed, performed, and enforced in accordance with, and governed by, the internal laws of the State of Arizona, without giving
effect to the principles of conflicts of laws thereof. Each party hereby consents to the personal jurisdiction and venue of any United States District Court for the District of Arizona located in
Maricopa County, Arizona. 

13.  NON-LIABILITY  

        The Escrow Agent shall not be liable for any act or omission while acting in good faith and in the exercise of its own best judgment. Any act or omission by the
Escrow Agent pursuant to the advice of its attorneys shall be conclusive evidence of such good faith. The Escrow Agent shall have the right to consult with counsel whenever any question arises
concerning the Escrow Agreement and shall incur no liability for any delay reasonably required to obtain such advice of counsel. The Escrow Agent shall not be liable for the alteration, modification
or elimination of any right permitted or given under the instructions set forth in this Escrow Agreement and/or in any document deposited under the Escrow Agreement pursuant to any statute of
limitations or by reason of laches. The Escrow Agent shall have no further responsibility or liability whatsoever to any or all of the parties following a partial or complete distribution of the
escrowed funds pursuant to this Escrow Agreement. The Escrow Agent shall not incur any liability with respect to any act or omission in reliance upon any document, including any written notice or
instruction provided for in the Escrow Agreement. In performing its obligations hereunder, the Escrow Agent shall be entitled to presume, without inquiry, the due execution, validity and effectiveness
of all documents it receives, and also the truth and accuracy of any information contained therein. The Escrow Agent shall not be responsible or liable for any diminution of principal of the escrowed
funds or any interest penalty whatsoever, for any reason. 

14.  SEVERABILITY  

        In the event that any part of this Escrow Agreement is declared by any court or other judicial or administrative body to be null, void, or unenforceable, said
provision shall survive to the extent it is not so declared, and all of the other provisions of this Escrow Agreement shall remain in full force and effect. 

4

 

15.  AMENDMENTS; WAIVERS  

        This Escrow Agreement may be amended or modified, and any of the terms, covenants, representations, warranties, or conditions hereof may be waived, only by a
written instrument executed by the parties hereto, or in the case of a waiver, by the party waiving compliance. Any waiver by any party of any condition, or of the breach of any provision, term,
covenant, representation, or warranty contained in this Escrow Agreement, in any one or more instances, shall not be deemed to be nor construed as further or continuing waiver of any such condition,
or of the breach of any other provision, term, covenant, representation, or warranty of this Escrow Agreement. 

16.  ENTIRE AGREEMENT  

        The Escrow Agent shall not be a party to, or bound by, any agreement between the Fund and the Escrow Agent other than this Escrow Agreement. The Escrow Agent
shall have no duty to know or inquire as to the performance or nonperformance of any provision of any such agreement between the parties. 

17.  DISAGREEMENTS  

        If any disagreement or dispute arises between the parties to this Escrow Agreement concerning the meaning or validity of any provision hereunder or concerning any
other matter relating to this Escrow Agreement, the Escrow Agent shall be under no obligation to act, except under process or order of court, or until it has been adequately indemnified to its full
satisfaction, and shall sustain no liability for its failure to act pending such process, court order or indemnification. 

18.  SECTION HEADINGS  

        The section headings in this Escrow Agreement are for reference purposes only and shall not affect the meaning or interpretation of this Escrow Agreement. 

19.  COUNTERPARTS  

        This Escrow Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which shall constitute the same instrument. 

20.  TIME OF ESSENCE  

        Time is of the essence of this Escrow Agreement. 

21.  RESIGNATION  

        The Escrow Agent may resign at any time by furnishing written notice of its resignation to the Fund, where such written notice shall not be less than thirty
(30) days before the effective date of such resignation. The Escrow Agent shall have no responsibility for the appointment of a successor escrow agent. The Company shall have twenty
(20) days to designate a successor escrow agent, at which time the Escrow Agent shall promptly deliver all funds to the successor escrow agent. 

22.  REMOVAL  

        The Fund may remove the Escrow Agent at any time by furnishing to the Escrow Agent a written notice of its removal. Such resignation or removal, as the case may
be, shall be effective upon delivery of such notice. 

5

 

        IN
WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be executed the day and year first set forth above. 

	USA CAPITAL FIRST TRUST DEED FUND, LLC
	

By:	
USA CAPITAL REALTY ADVISORS, LLC
	Its:	Manager
	

 	

By:	
USA INVESTMENT PARTNERS, LLC
	 	Its:	Manager
	

 	

 	

By:	
USA COMMERCIAL MORTGAGE COMPANY
	 	 	Its:	Manager
	

 	

 	

 	

By:	
 	

    
	
 	

 
	 	 	 	 	 	    
	 	 
	 	 	 	Its:	 	    
	 	 
	
USA SECURITIES, LLC
	

 	

By:	

    
	
 	

 
	 	 	    
	 	 
	 	Its:	    
	 	 
	
WELLS FARGO BANK ARIZONA, NATIONAL ASSOCIATION

        as Escrow Agent
	

 	

By:	

    
	
 	

 
	 	 	    
	 	 
	 	Its:	    
	 	 

6

QuickLinks

Exhibit 10.1

ESCROW AGREEMENT<Page>

                                                                   Exhibit 10.16

                                OPTION AGREEMENT

NONE OF THE ST. PAUL OPTION (AS DEFINED BELOW) AND THE COMMON SHARES DELIVERABLE
UPON EXERCISE OF THE ST. PAUL OPTION HAVE BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933. NEITHER THE ST. PAUL 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. TRANSFER OF THE ST.
PAUL 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 ST.
PAUL OPTION ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER AS SET FORTH IN
SECTION 5(C) OF THIS OPTION AGREEMENT.

     This OPTION AGREEMENT is made this [27th] day of [September] 2002 between
PLATINUM UNDERWRITERS HOLDINGS, LTD., a company organized under the laws of the
Islands of Bermuda (the "Company"), and THE ST. PAUL COMPANIES, INC., a company
incorporated under the laws of the State of Minnesota in the United States of
America ("St. Paul").

                                R E C I T A L S :

     WHEREAS, the Company is contemplating an initial public offering (the
"Public Offering") of its common shares of par value U.S. $0.01 per share (the
"Common Shares");

     WHEREAS, St. Paul and the Company have entered into a Formation and
Separation Agreement, dated as of [September 23,] 2002 (the "Formation and
Separation Agreement") in which St. Paul and the Company have set forth certain
terms of their continuing relationship following the Public Offering; and

     WHEREAS, as contemplated by the Formation and Separation Agreement,
contingent upon the consummation of the Public Offering, St. Paul will
contribute cash and certain assets to

<Page>

the Company, in consideration for which the Company intends to issue to St. Paul
or its nominees, a number of Common Shares determined as set forth in the
Formation and Separation Agreement and The St. Paul Option, as defined below,
exercisable under the circumstances specified in this Agreement.

     NOW, THEREFORE, in furtherance of the transactions contemplated by the
Formation and Separation Agreement, and in consideration of the mutual promises,
covenants and agreements set forth therein and herein, the receipt and
sufficiency of which are acknowledged, the parties hereby agree as follows:

1.   (a)    The Company grants St. Paul an option (the "St. Paul Option") to
purchase for cash up to __________________ Common Shares (the "St. Paul Option
Shares") following the completion of the Public Offering.

     (b)    The St. Paul Option is exercisable, at an exercise price per Common
Share equal to ___ percent of the initial  public  offering  price per Common
Share (the "St.  Paul Option  Price"),  in whole or in part at any time prior to
the tenth  anniversary of the  completion of the Public  Offering (the "Exercise
Period").

     (c)    An "Exercise Date" is any day during an 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"). An 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)    Notwithstanding anything to the contrary in this Agreement, St.
Paul's 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 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
St. Paul Option, St. Paul shall, if necessary, dispose of such number of Common
Shares so that, immediately after any exercise of St. Paul Option, St. Paul will
not be a "United States 25% Shareholder".

     (e)    St. Paul Option Shares upon issue will rank equally in all respects
with the other Common Shares of the Company, but in no case will any St. Paul
Option Shares carry any option or other right to subscribe for further
additional shares.

     (f)    St. Paul is not, solely by virtue hereof, entitled to any rights of
a shareholder in the Company either at law or in equity.

     (g)    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

                                       -2-
<Page>

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
St. Paul Option shall entitle St. Paul to receive all Transaction Consideration
that St. Paul would have been entitled to if it had exercised the St. Paul
Option in full immediately prior to the Transaction (to the extent it remains
unexercised and without regard to the limitations in Section 1(d) hereof), in
each case upon payment by St. Paul of the St. Paul Option Price as in effect
immediately prior to such time. In determining the kind and amount of
Transaction Consideration that St. Paul would be entitled to receive in respect
of any Transaction pursuant to this Section 1(g), St. Paul 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(g) 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 St. Paul shall be entitled to receive
Transaction Consideration upon the terms and conditions provided in this Section
1(g). Notwithstanding the foregoing, if an adjustment is made pursuant to this
Section 1(g) in respect of a Transaction that involves a Change of Control (as
defined below), St. Paul shall be entitled to exercise the St. Paul Option
pursuant to this Section 1(g) without regard to Section 1(d) hereof. A
Transaction is deemed to 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 St. Paul Option in accordance with Section 1(b)
hereof, St. Paul shall provide written notice to the Company of its intention to
exercise all or a portion of the St. Paul Option at least ten (10) Business Days
prior to the intended Exercise Date (such notice must indicate the number of the
St. Paul Option Shares St. Paul intends to purchase upon exercise of the St.
Paul Option and must be in writing signed by or on behalf of St. Paul and
delivered or sent to the Company in accordance with Section (g) hereof).

     (b)    The Company shall issue and allot St. Paul Option Shares upon
exercise of the St. Paul Option and payment of the total price payable therefor.

     (c)    Concurrently with the issuance of the St. Paul Option Shares
pursuant to Section 2(b) above, St. Paul shall pay the St. Paul Option Price for
any exercise hereunder by wire transfer of immediately available funds to an
account specified at least five (5) Business Days in advance by the Company;
such St. Paul Option Price being an amount in U.S. dollars equal to the product
of (i) the number of St. Paul Option Shares that St. Paul intends to purchase
pursuant to any exercise of the St. Paul Option and (ii) the St. Paul Option
Price.

     (d)    Notwithstanding anything to the contrary in this Agreement, the St.
Paul Option

                                       -3-
<Page>

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 at any time after the date that the number of
Common Shares issuable pursuant to the Public Offering and the St. Paul
Investment has been determined:

            (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 Common Shares purchasable upon exercise of the St. Paul Option
shall be proportionately adjusted so that St. Paul 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 St. Paul 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 paragraph 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 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 St. Paul Option Shares that St. Paul may purchase thereafter upon
the exercise of the St. Paul Option will be determined by multiplying the number
of St. Paul Option Shares theretofore purchasable upon exercise of the St. Paul
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 share of Common
Shares at such record date. Such adjustment shall

                                       -4-
<Page>

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 St. Paul Option will upon such distribution be deemed to be
an option to purchase the kind and number of shares of the capital stock of the
Subsidiary which St. Paul would have been entitled to receive after such
distribution had the St. Paul Option been exercised immediately prior to such
distribution or any record date with respect thereto. The roll-over of the St.
Paul Option into an option to purchase 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 of the daily closing prices per share for the ten consecutive Trading
Days (as defined below) ending on the day before the applicable record date.
"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. The closing price
for each day is 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.

     (e)    Whenever the number of Common Shares purchasable by St. Paul upon
the exercise of the St. Paul Option is adjusted, as herein provided, the St.
Paul Option Price shall be adjusted by multiplying the St. Paul Option Price
immediately prior to such adjustment by a fraction, of which the numerator shall
be the number of St. Paul Option Shares purchasable upon the exercise of the St.
Paul Option immediately prior to such adjustment, and of which the denominator
shall be the number of St. Paul Option Shares purchasable immediately
thereafter.

     (f)    No adjustment in the number of St. Paul Option Shares purchasable
upon the exercise of the St. Paul Option need be made under Section 3(b) and (c)
if the Company issues or distributes, pursuant to this Agreement, to St. Paul
the shares, rights, options, warrants, securities or assets referred to in those
paragraphs which St. Paul would have been entitled to receive had the St. Paul
Option been exercised prior to the happening of such event or the record date
with

                                       -5-
<Page>

respect thereto. No adjustment need be made for a change in the par value of the
St. Paul Option Shares.

     (g)    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, St. Paul 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 St. Paul Option and the St. Paul
Option 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 St. Paul Option Shares contained in paragraphs (a) through
(f), inclusive, above; PROVIDED, HOWEVER, that the St. Paul Option 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 St. Paul Option.

     (h)    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 St.
Paul Option Price and the number of Common Shares purchasable upon the exercise
of the St. Paul 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 St. Paul Option Price or
decreasing the number of Common Shares purchasable upon the exercise of the St.
Paul Option by an amount in excess of the amount of the adjustment initially
made in respect to the issuance, sale or grant or such rights, options or
warrants.

     (i)    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
St. Paul Option Shares thereafter purchasable upon the exercise of the St. Paul
Option 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.

     (j)    The Company may at its option, at any time during the term of the
St. Paul Option, reduce the then current St. Paul Option 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

                                       -6-
<Page>

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
its authorized share capital prior to the dates upon which the St. Paul Option
shall become exercisable to a level sufficient to satisfy any exercise of the
St. Paul Option.

5.   (a)    For so long as the St. Paul 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 St.
Paul Option, including reasonably promptly furnishing the other with copies of
notices or other communications received by the Company or St. Paul, from all
third parties and governmental authorities with respect to the St. Paul Option.

     (b)    For so long as the St. Paul Option is exercisable, the Company and
St. Paul 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 St. Paul to
exercise such St. Paul 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.

6.   (a)    The St. Paul Option and the St. Paul Option Shares may not be
assigned or otherwise transferred, disposed of or encumbered by St. Paul (or any
subsequent transferee) in whole or in part except as provided in this Section 6.

     (b)    In the event of a merger of St. Paul into another person, or a sale,
transfer or lease to another person of all or substantially all the assets of
St. Paul, the St. Paul Option or the St. Paul Option Shares may be transferred
as part of such transaction to the other party to such transaction.

     (c)    On and after the date which is the second anniversary of the closing
date of the

                                       -7-
<Page>

Public Offering, St. Paul may transfer the St. Paul Option or the St. Paul
Option Shares, in whole or in part, in one or more private transaction(s) to up
to three institutional 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 St. Paul Option and the St. Paul Option
            Shares have not been registered under the Securities Act and,
            accordingly, the transferee may not offer, sell, assign, pledge or
            otherwise transfer the St. Paul Option or any St. Paul Option Shares
            except pursuant to an effective registration statement under the
            Securities Act covering such St. Paul 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 of St. Paul Option Shares, and any transfer of St. Paul
            Option and St. Paul 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 St. Paul Option
            Shares being transferred, including a registration statement filed
            pursuant to 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

                                       -8-
<Page>

            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 St. Paul Option
            Share shall be held in book-entry form, and each certificate
            representing a St. Paul 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 HAVE NOT BEEN REGISTERED UNDER
            THE U.S. SECURITIES ACT OF 1933 (THE "SECURITIES ACT") AND MAY NOT
            BE OFFERED, SOLD, ASSIGNED, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT
            PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER 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 SET FORTH IN THE OPTION
            AGREEMENT, DATED AS OF [SEPTEMBER 27,] 2002, BETWEEN THE ST. PAUL
            COMPANIES, INC. 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 AGREEMENT. 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 St.
            Paul Option Shares in accordance with clause (i) or (iii) of Section
            6(c)(ii)(B), and upon the surrender of any certificate or
            certificates representing such St. Paul Option Shares to the Company
            (or such agent), the Company shall cause to be issued in exchange

                                       -9-
<Page>

            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 St. Paul 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 St. Paul
            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 in Section 6(d) below) immediately after such transfer
            (assuming for purposes of this determination that the St. Paul
            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 St. Paul 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 (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 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.

     (d)    In connection with any transfer of all or a portion of the St. Paul
Option pursuant to Section 6(c), the Company shall prepare an option agreement
substantially identical to this Agreement (or, in the case of a partial
transfer, option agreements) issuable to the transferee (and transferor, in the
case of partial transfer) upon surrender to the Company of the existing option
agreement upon consummation of the transfer. Upon said consummation, the
transferee shall have such rights and obligations with respect to the number of
St. Paul Option Shares covered by the portion of the St. Paul Option transferred
to such transferee as the rights and obligations of St. Paul hereunder. 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

                                      -10-
<Page>

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.

     (e)    Any transferee of all or part of the St. Paul Option pursuant to
Section 6(c) hereof (or any subsequent transferee who holds any portion of the
St. Paul Option as a result of a transfer pursuant to this Section 6(e)) may
transfer, in whole but not in part, its portion of the St. Paul Option to a
subsequent transferee; PROVIDED that any such transfer shall be subject to the
terms and conditions set forth in Section 6(c) and 6(d) hereof.

7.   The issuance of share certificates upon the exercise of the St. Paul Option
shall be without charge to St. Paul. The Company shall pay, and indemnify St.
Paul 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 St. Paul Option or the
resulting issuance of Common Shares.

8.   This Agreement may not be amended except in a written instrument signed by
the Company and St. Paul.

9.   All notices,  requests, claims, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if delivered by
hand (with receipt confirmed), or by certified mail, postage prepaid and return
receipt requested, or by facsimile 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 St. Paul:

     The St. Paul Companies, Inc.
     385 Washington Street
     St. Paul, MN 55102
     Attention: General Counsel
     Facsimile: (410) 205-6967

     with a copy to:

     Donald R. Crawshaw
     Sullivan & Cromwell
     125 Broad Street
     New York, New York 10004
     Facsimile:  (212) 558-3588

                                      -11-
<Page>

     If to the Company:

     Platinum Underwriters Holdings, Ltd.
     Clarendon House
     2 Church Street
     Hamilton HM11
     Bermuda
     Attention: General Counsel
     Facsimile: (441) 292-4720

     with a copy to:
     Linda E. Ransom
     Dewey Ballantine LLP
     1301 Avenue of the Americas
     New York, New York 10019
     Facsimile: (212) 259-6333

10.  This Agreement and the Formation and Separation  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.  This  Agreement may not be assigned by any party hereto, except to a party
to whom St. Paul transfers the St. Paul Option or St. Paul Option Shares in
accordance with Section 6(c), and then only in accordance with that section.

            13.    The headings contained in this Agreement are for convenience
            only and do not affect the meaning or interpretation of this
            Agreement.

14.  (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. Sections 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

                                      -12-
<Page>

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 paragraph (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 14 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.

15.  Capitalized terms used but not defined in this Agreement have the meanings
specified in the Formation and Separation Agreement.

16.  This Agreement becomes effective contingent upon the consummation of the
Public Offering automatically and with no action on the part of any person.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be signed and
attested by its duly authorized officers and to be dated as of [September 27],
2002.

                                                PLATINUM UNDERWRITERS HOLDINGS,
                                                LTD.

                                                By:
                                                  ------------------------------
                                                  Name:
                                                  Title:

                                      -13-
<Page>

                                                THE ST. PAUL COMPANIES, INC.

                                                By:
                                                  ------------------------------
                                                  Name:
                                                  Title:

                                      -14-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00043-of-00352.parquet"}]]