AMENDED AND RESTATED
AGREEMENT,
SCHEMES OF ARRANGEMENT
AND
PLAN OF REORGANIZATION
BY AND AMONG
LASALLE RE HOLDINGS LIMITED,
LASALLE RE LIMITED,
TRENWICK GROUP INC.
AND
▇▇▇▇▇ HOLDINGS INTERNATIONAL LIMITED
DATED AS OF MARCH 20, 2000
TABLE OF CONTENTS
ARTICLE 1 CERTAIN DEFINITIONS.........................................2
Section 1.1. Certain Definitions................................2
ARTICLE 2 THE PLANS ..................................................6
Section 2.1. The Plans..........................................6
Section 2.2. Application to the Court; Shareholder Meetings;
Effective Time of the Plans; Closing...............6
Section 2.3. Effects of the Plans...............................7
Section 2.4. Governing Documents................................8
Section 2.5. Board of Directors of New Holdings.................8
Section 2.6. Terms of the Schemes of Arrangement: Exchange
of Securities......................................8
Section 2.7. Terms of the Plan of Reorganization: Issuance
of Securities..................................... 9
Section 2.8. Terms of the Schemes of Arrangement: Surrender
and Payment.......................................10
Section 2.9. Terms of the Plan of Reorganization: Surrender
and Payment.......................................12
Section 2.10. Voting............................................13
Section 2.11. Lost Certificates.................................13
Section 2.12. No Fractional Shares..............................13
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF TRENWICK.................14
Section 3.1. Corporation; Organization.........................14
Section 3.2. Authority; Approval and Fairness..................15
Section 3.3. Capital Structure.................................16
Section 3.4. SEC Reports; Financial Statements.................17
Section 3.5. Absence of Certain Changes or Events..............18
Section 3.6. Certain Fees......................................18
Section 3.7. No Defaults.......................................19
Section 3.8. Consents..........................................19
Section 3.9. Compliance with Applicable Law....................19
Section 3.10. Information Supplied..............................20
Section 3.11. Material Contracts................................20
Section 3.12. Taxes.............................................21
Section 3.13. Litigation........................................22
Section 3.14. Title to Properties; Leases.......................23
Section 3.15. Employees.........................................23
Section 3.16. Benefit Plans.....................................24
Section 3.17. Intellectual Property.............................29
Section 3.18. Takeover Statutes.................................30
Section 3.19. Opinion of Financial Advisor......................30
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Section 3.20. Rights Agreement..................................30
Section 3.21. Insurance Matters.................................31
Section 3.22. Liabilities and Reserves..........................32
Section 3.23. Investment Company................................32
Section 3.24. Finite Risk Reinsurance...........................32
Section 3.25. Reinsurance Contracts, Coverholders and MGAs......32
Section 3.26. Derivatives.......................................33
Section 3.27. Related Party Transactions........................33
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF
LASALLE HOLDINGS...........................................34
Section 4.1. Corporation; Organization.........................34
Section 4.2. Authority; Approval and Fairness..................35
Section 4.3. Capital Structure.................................35
Section 4.4. SEC Reports; Financial Statements.................37
Section 4.5. Absence of Certain Changes or Events..............38
Section 4.6. Certain Fees......................................38
Section 4.7. No Defaults.......................................38
Section 4.8. Consents..........................................39
Section 4.9. Compliance with Applicable Law....................39
Section 4.10. Information Supplied..............................40
Section 4.11. Material Contracts................................40
Section 4.12. Taxes.............................................41
Section 4.13. Litigation........................................42
Section 4.14. Title to Properties; Leases.......................42
Section 4.15. Approval of Schemes of Arrangement................43
Section 4.16. Employees.........................................43
Section 4.17. Intellectual Property.............................44
Section 4.18. Takeover Statutes.................................45
Section 4.19. Opinions of Financial Advisors....................45
Section 4.20. Insurance Matters.................................45
Section 4.21. Liabilities and Reserves..........................46
Section 4.22. Investment Company................................46
Section 4.23. Reinsurance Contracts, Coverholders and MGAs......46
Section 4.24. Derivatives.......................................47
Section 4.25. Related Party Transactions........................47
Section 4.26. Finite Risk Reinsurance...........................47
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ARTICLE 5 COVENANTS..................................................47
Section 5.1. Conduct of Business of Trenwick...................47
Section 5.2. Conduct of Business of LaSalle Holdings...........50
Section 5.3. No Solicitation...................................54
Section 5.4. Access to Information; Confidentiality............58
Section 5.5. Form S-4; Regulatory Matters......................58
Section 5.6. Public Announcements..............................58
Section 5.7. Supplemental Information..........................59
Section 5.8. Shareholders' Meetings............................59
Section 5.9. Trenwick Options, LaSalle Holdings Options,
LaSalle Re Options and Trenwick Warrants..........60
Section 5.10. Takeover Laws.....................................62
Section 5.11. Affiliates........................................62
Section 5.12. Stock Exchange Listing............................62
Section 5.13. Indemnification and Insurance.....................63
Section 5.14. Commercially Reasonable Efforts...................64
Section 5.15. Post-Closing Matters..............................64
Section 5.16. Employee Benefit Plans; Existing Agreements.......64
Section 5.17. Letters from Accountants..........................65
Section 5.18. Litigation........................................66
Section 5.19. Advice of Changes.................................66
Section 5.20. Trenwick Rights Agreement.........................66
Section 5.21. New Holdings Rights Agreement.....................66
Section 5.22. Assumption of Non-Voting Share Conversion
Obligation........................................66
Section 5.23. Assumption of Series B Preferred Share
Conversion Obligation.............................67
Section 5.24. Tax-Free Reorganization...........................67
ARTICLE 6 CONDITIONS TO THE PLANS....................................67
Section 6.1. Conditions to Each Party's Obligation to
Effect the Plans..................................67
Section 6.2. Additional Conditions to Trenwick's Obligation
to Effect the Plans...............................69
Section 6.3. Additional Conditions to LaSalle Holdings'
Obligation to Effect the Plans....................71
ARTICLE 7 TERMINATION AND ABANDONMENT................................72
Section 7.1. Termination by Trenwick or LaSalle Holdings.......72
Section 7.2. Termination by Trenwick...........................73
Section 7.3. Termination by LaSalle Holdings...................74
Section 7.4. Procedure and Effect of Termination...............74
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ARTICLE 8 MISCELLANEOUS PROVISIONS...................................75
Section 8.1. Non-Survival of Representations, Warranties
Covenants and Agreements..........................75
Section 8.2. Amendment and Modification........................75
Section 8.3. Waiver of Compliance; Consents....................76
Section 8.4. Severability and Validity.........................76
Section 8.5. Expenses and Obligations..........................76
Section 8.6. Parties in Interest...............................76
Section 8.7. Notices...........................................77
Section 8.8. Governing Law.....................................78
Section 8.9. Counterparts......................................78
Section 8.10. Headings..........................................78
Section 8.11. Entire Agreement; Assignment......................79
Section 8.12. Interpretation....................................79
SCHEDULES AND EXHIBITS
Schedule I Minority Shareholders
Exhibit A-1 LaSalle Stock Option Agreement
Exhibit A-2 Trenwick Stock Option Agreement
Exhibit B-1 Memorandum of Association of New Holdings
Exhibit B-2 Bye-Laws of New Holdings
Exhibit C New Holdings Directors
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AMENDED AND RESTATED AGREEMENT,
SCHEMES OF ARRANGEMENT AND PLAN OF REORGANIZATION
This Amended and Restated Agreement, Schemes of Arrangement and Plan of
Reorganization (this "Agreement") is made as of the 20th day of March, 2000, by
and among LaSalle Re Holdings Limited, a company organized under the laws of
Bermuda ("LaSalle Holdings"), LaSalle Re Limited, a company organized under the
laws of Bermuda and a majority-owned Subsidiary (as defined herein) of LaSalle
Holdings ("LaSalle Re"), Trenwick Group Inc., a Delaware corporation
("Trenwick") and ▇▇▇▇▇ Holdings International Limited, a company organized under
the laws of Bermuda which will be changing its name to Trenwick Group Ltd. prior
to the Effective Time, as defined herein, ("New Holdings"), and amends and
restates the Agreement, Scheme of Arrangement, Plan of Merger and Plan of
Reorganization (the "Original Agreement") dated as of December 19, 1999 by and
among LaSalle Holdings, LaSalle Re, Trenwick, Trenwick Group (Delaware) Inc., a
Delaware corporation and New Holdings.
WHEREAS, the issued share capital of LaSalle Re consists of voting
common shares, par value $1.00 per share ("Voting Shares"), all of which are
beneficially owned by LaSalle Holdings, and non-voting common shares, par value
$1.00 per share (the "Non-Voting Shares"), all of which are beneficially owned
by LaSalle Holdings and the shareholders of LaSalle Re listed on Schedule I
hereto (the "Minority Shareholders"). LaSalle Holdings owns 15,603,570 Voting
Shares and NonVoting Shares in the aggregate. The Minority Shareholders own
4,725,546 Non-Voting Shares in the aggregate (the "Minority Shares").
WHEREAS, the respective Boards of Directors of LaSalle Holdings,
LaSalle Re, Trenwick and New Holdings (a) deem it advisable and in the best
interests of their respective companies and shareholders to enter into this
Agreement whereby (i) each of LaSalle Holdings and LaSalle Re become
Subsidiaries of New Holdings pursuant to a scheme of arrangement between LaSalle
Holdings and the holders of its common shares, par value $1.00 per share (the
"LaSalle Holdings Shares") (the "LaSalle Holdings Scheme of Arrangement"), and a
scheme of arrangement between LaSalle Re and the holders of the Non-Voting
Shares (the "LaSalle Re Scheme of Arrangement," and together with the LaSalle
Holdings Scheme, the "Schemes of Arrangement") and (ii) the assets of Trenwick
are transferred to New Holdings pursuant to a plan of reorganization described
in Section 2.1(b) (the "Plan of Reorganization," and together with the Schemes
of Arrangement, the "Plans") as provided for herein and (b) have adopted
resolutions approving this Agreement, the Plans and the transactions
contemplated hereby;
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition and inducement to the willingness of LaSalle Holdings and
Trenwick to enter into this Agreement, LaSalle Holdings and Trenwick have
entered into (i) a Stock Option Agreement dated as of the date of the Original
Agreement and attached hereto as Exhibit A-1 (the "LaSalle Stock Option
Agreement"), pursuant to which Trenwick has granted LaSalle Holdings an option
to purchase a number of shares equal to 19.9% of the then outstanding Common
Stock, par value $0.10 per share, of Trenwick ("Trenwick Shares", which shall
refer to all such outstanding shares) and (ii) a Stock Option Agreement dated
1
as of the date of the Original Agreement and attached hereto as Exhibit A-2 (the
"Trenwick Stock Option Agreement" and together with the LaSalle Stock Option
Agreement, the "Stock Option Agreements"), pursuant to which LaSalle Holdings
has granted Trenwick an option to purchase a number of shares equal to 19.9% of
the then outstanding LaSalle Holdings Shares;
WHEREAS, concurrently with the execution and delivery of this Agreement
and as a condition and inducement to the willingness of Trenwick to enter into
this Agreement, Trenwick and the Minority Shareholders have entered into a
Shareholders Agreement pertaining to the voting of shares held of record and
beneficially in favor of the transactions contemplated hereby; and
WHEREAS, the parties hereto intend that each of the Plans shall qualify
as tax-free under the United States Internal Revenue Code of 1986, as amended
(the "Code").
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
ARTICLE 1
CERTAIN DEFINITIONS
Section 1.1. Certain Definitions. Certain capitalized terms used
in this Agreement shall have the meaning set forth below:
(a) An "Affiliate" of, or a Person "affiliated" with, a specified
Person means any Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with, the
Person specified.
(b) "Average Closing Price" means an amount equal to the average per
share closing price of a Trenwick Share as reported on the NYSE for the ten (10)
NYSE trading days immediately preceding the three (3) NYSE trading days prior to
the Effective Date (as defined below).
(c) "Business Day" means any day other than a Saturday, a Sunday or a
day on which commercial banks in Bermuda or in the State of Connecticut in the
United States of America are authorized or required by law to be closed.
(d) "Confidentiality Letters" means the letter agreements between
LaSalle Holdings and Trenwick, dated as of August 30, 1999 and November 19,
1999.
(e) "Control" (including, with correlative meanings, the terms
"controlling," "controlled by" and "under common control with"), as used with
respect to any Person, means the possession, direct or indirect, of the power
2
to direct or cause the direction of the management or policies of such Person,
whether through the ownership of voting securities, by agreement or otherwise.
(f) "Dollars" or "$" means the lawful currency of the United States of
America.
(g) "Employee Benefit Plan" means
(i) any "employee welfare benefit plan" or "employee
pension benefit plan" (as those terms are defined in
sections 3(1) and 3(2) of ERISA, respectively), other
than a "multiemployer plan" (as defined in Section
3(37) of ERISA);
(ii) any retirement or deferred compensation plan,
incentive compensation plan, stock plan, unemployment
compensation plan, vacation pay, severance pay, bonus
or benefit arrangement, insurance or hospitalization
program or any other fringe benefit arrangements for
any current or former employee, director, consultant
or agent, whether pursuant to contract, arrangement,
custom or informal understanding, which does not
constitute an employee benefit plan (as defined in
Section 3(3) of ERISA); or
(iii) any employment agreement or consulting
agreement.
(h) "ERISA" means the United States Employee Retirement Income Security
Act of 1974, as amended.
(i) "Exchange Act" means the United States Securities Exchange Act of
1934, as amended.
(j) "GAAP" means generally accepted accounting principles as in effect
in the United States of America (as such principles may change from time to
time).
(k) "Governmental Authority" means any governmental,quasi-governmental,
judicial or regulatory agency or entity or subdivision thereof with jurisdiction
over Trenwick, LaSalle Holdings, LaSalle Re, New Holdings or any of their
respective Subsidiaries or any of the transactions contemplated by this
Agreement (including, without limitation, the Corporation of Lloyd's
("Lloyd's")).
(l) "Knowledge" (i) an individual will be considered to have
"Knowledge" of a fact or matter if the individual is actually aware of the fact
or matter; (ii) an entity will be considered to have "Knowledge" of a fact or
matter if any individual who is serving, or who has at any time served, as a
senior executive of such entity has, or at any time had, Knowledge of the fact
or matter; and Trenwick and LaSalle Holdings will be considered to have
"Knowledge" of a fact or matter if Trenwick or its Subsidiaries or LaSalle
3
Holdings or its Subsidiaries, as the case may be, has Knowledge of the fact or
matter.
(m) "LaSalle Disclosure Letter" means the letter, dated as of the date
of the Original Agreement, from LaSalle Holdings to Trenwick regarding certain
matters related to this Agreement.
(n) "LaSalle Fair Market Value" means the product of (i) the average of
the closing sale price as reported on the NYSE Composite Tape for the LaSalle
Holdings Shares for the thirty (30) trading days immediately preceding the
Effective Date multiplied by (ii) the aggregate number of issued and outstanding
Voting Shares and Non-Voting Shares on the Effective Date.
(o) "Lien" means any mortgage, lien, security interest, pledge, lease
or other charge or encumbrance of any kind, including, without limitation, the
lien or retained security title of a purchase money creditor or conditional
vendor, and any easement, right of way or other encumbrance on title to real
property, and any agreement to give any of the foregoing.
(p) "Material Adverse Change" or "Material Adverse Effect" means, with
respect to any Person, any change, effect, event, condition or development,
occurrence or state of facts that is materially adverse to the business, assets,
results of operations, properties, financial or operating condition of such
party and its Subsidiaries, taken as a whole or the ability to perform
obligations under this Agreement; provided, however, that any change, effect,
event, condition or development, occurrence or state of facts resulting from or
arising in connection with (i) this Agreement, the Schemes of Arrangement, the
Plan of Reorganization or the transactions contemplated hereby or the public
announcement thereof, (ii) changes generally affecting the insurance,
reinsurance or financial services industry (including, without limitation, the
impact of any natural catastrophes causing a Net Loss from a single loss
occurrence and not in the aggregate to such Persons of $100,000,000 or less,
(iii) changes in the value of portfolio investments resulting from changes in
prevailing interest rates, (iv) changes in economic or market conditions
generally, (v) changes in laws, regulations, accounting principles, or
regulations or policies of general applicability or (vi) changes resulting from
actions or omissions of a party hereto taken with the prior written consent of
the other parties in contemplation of the Schemes of Arrangement and associated
transactions contemplated by this Agreement shall not constitute a Material
Adverse Effect for purposes of this Agreement.
(q) "Net Loss" means, with respect to any Person, the estimated amount
of all losses and loss adjustment expenses incurred or to be incurred by such
Person and its Subsidiaries in connection with the occurrence of a single
natural catastrophe occurring between the date of the Original Agreement and the
Effective Time, net of all applicable reinsurance recoverables, determined in
accordance with GAAP and generally accepted actuarial standards of practice as
applied in the insurance industry, each as in effect on the date of
determination of such Net Loss. Net Loss shall be determined as soon as
reasonably practicable following the occurrence of a natural catastrophe by the
Settlement Auditor. In the event that there is more than one Person serving as
the Settlement Auditor, Net Loss shall be determined by taking the average of
the Net Loss determinations established by each Settlement Auditor.
4
(r) "NYSE" means The New York Stock Exchange, Inc.
(s) "Permitted Liens" means, with respect to Trenwick or LaSalle
Holdings (as the case may be), (i) Liens for Taxes or other assessments or
charges of Governmental Authorities that are not yet delinquent or that are
being contested in good faith by appropriate proceedings, in each case, with
respect to which adequate reserves or other appropriate provisions are being
maintained to the extent required by GAAP; (ii) statutory Liens of landlords and
mortgagees of landlords and Liens of carriers, warehousemen, mechanics,
materialmen and other Liens imposed by law and created in the ordinary course of
business for amounts not yet more than thirty (30) days overdue or which are
being contested in good faith by appropriate proceedings, in each case, with
respect to which adequate reserves or other appropriate provisions are being
maintained to the extent required by GAAP; (iii) leases or subleases, easements,
rights-of-way, covenants, consents and Liens which do not interfere materially
with the ordinary conduct of the business of Trenwick or LaSalle Holdings (as
the case may be) and their respective Subsidiaries, taken as a whole, or detract
materially from the value of the property to which they attach or materially
impair the use thereof to such party and its Subsidiaries; and (iv) Liens
granted by Trenwick or LaSalle Holdings (as the case may be) or any of their
respective Subsidiaries to lenders pursuant to credit agreements in existence on
the date of the Original Agreement.
(t) "Person" means any individual, company, corporation, estate,
limited liability company, partnership, joint venture, association, joint stock
company, trust, unincorporated organization or government or any agency or
political subdivision thereof or other entity.
(u) "SEC" means the United States Securities and Exchange Commission.
(v) "Securities Act" means the United States Securities Act of 1933, as
amended.
(w) "Settlement Auditor" means either Ernst & Young LLP or Paragon Risk
Management Services, Inc., as shall be mutually agreed by LaSalle Holdings and
Trenwick. In the event LaSalle Holdings and Trenwick are unable to agree upon a
Settlement Auditor within 30 calendar days following the completion of a natural
catastrophe, both Ernst & Young LLP and Paragon Risk Management Services, Inc.
shall serve as the Settlement Auditor.
(x) "Subsidiary" means, with respect to a specified Person, each
company, partnership or other entity in which the specified Person owns or
controls, directly or indirectly through one or more intermediaries, fifty
percent (50%) or more of the shares or other interests having general voting
power in the election of directors or Persons performing similar functions or
rights to fifty percent (50%) or more of any distributions.
(y) "Tax" or "Taxes" means any Bermuda or United States federal, state,
local, foreign or other income, share capital, employees' income withholding,
foreign Person withholding, social security, unemployment, disability, real
property, personal property, sales, use, transfer or other tax, including any
5
interest, penalties or other additions to tax in respect to the foregoing,
whether disputed or not.
(z) "Trenwick Disclosure Letter" means the letter, dated as of the date
of the Original Agreement, from Trenwick to LaSalle Holdings regarding certain
matters related to this Agreement.
(aa) "Trenwick Fair Market Value" means the product of (i) the average
of the closing sale price as reported on the NYSE Composite Tape for the
Trenwick Shares for the thirty (30) trading days immediately preceding the
Effective Date multiplied by (ii) the number of issued and outstanding Trenwick
Shares on the Effective Date.
ARTICLE 2
THE PLANS
Section 2.1. The Plans.
(a) The Schemes of Arrangement. At the Effective Time (as defined
herein), and upon the terms and subject to the conditions hereof and subject to
the Supreme Court of the Islands of Bermuda (the "Court") exercising its
discretion and sanctioning the Schemes of Arrangement pursuant to Section 99(2)
of The Companies Act, 1981 of Bermuda, as amended (the "Companies Act"), and
making such facilitating orders as are appropriate pursuant to Section 101 of
the Companies Act, all of the issued and outstanding LaSalle Holdings Shares and
all of the issued and outstanding Minority Shares shall be transferred to New
Holdings, and holders of LaSalle Holdings Shares and Minority Shares shall
become holders of common shares of New Holdings ("New Holdings Shares") in
accordance with the terms of this Agreement.
(b) The Plan of Reorganization. At the Effective Time, upon the terms
and subject to the conditions hereof, New Holdings shall acquire all of the
assets of and shall assume all of the liabilities of Trenwick, pursuant to
Section 271 of the GCL, in exchange for New Holdings Shares which shall be
distributed to the holders of Trenwick Shares in complete liquidation of
Trenwick pursuant to Section 275 of the GCL, in a transaction intended to
qualify as a tax-free reorganization under Section 368(a) of the Code.
Section 2.2. Application to the Court; Shareholder Meetings;
Effective Time of the Plans; Closing.
(a) As soon as practicable after the date hereof, LaSalle Holdings and
LaSalle Re, acting through their respective Boards of Directors, in accordance
with applicable law shall:
6
(i) cause an application to be made to the Court, pursuant to
Section 99(1) of the Companies Act, requesting the Court to
summon such class meetings of members of LaSalle Holdings and
LaSalle Re as the Court may direct;
(ii) give notice of, convene and hold such class meetings for
the purpose of obtaining such approvals of the Schemes of
Arrangement as may be required under Section 99(2) of the
Companies Act; and
(iii) subject to such approvals being obtained, cause a
petition to be presented to the Court seeking the sanctioning
of the Schemes of Arrangement pursuant to Section 99 of the
Companies Act and file such other documents as are required to
be duly filed with the Court to effect the Schemes of
Arrangement.
(b) As soon as practicable after the date hereof, Trenwick, acting
through its Board of Directors, in accordance with applicable law shall duly
call, give notice of, convene and hold an annual or special meeting of its
stockholders for the purpose of obtaining their approval of this Agreement and
the Plan of Reorganization.
(c) Upon receipt of orders from the Court sanctioning the Schemes of
Arrangement, upon approval by the stockholders of Trenwick of this Agreement and
the Plan of Reorganization and upon the terms and subject to the satisfaction or
waiver, if permissible, of the conditions hereof, the orders sanctioning the
Schemes of Arrangement shall be duly filed with the Registrar of Companies of
Bermuda (the "Registrar"). The Schemes of Arrangement shall become effective
upon the filing of the orders of the Court with respect to the Schemes of
Arrangement with the Registrar (the time of such filing being the "Effective
Time" and the date of such filing being the "Effective Date"). The Plan of
Reorganization shall become effective at the Effective Time. Immediately prior
to such filings, a closing (the "Closing") shall be held at such time as the
last condition set forth hereunder shall be fulfilled or waived, at the New York
office of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, at
9:00 a.m. or such other place and/or time as the parties shall agree, for the
purpose of confirming the satisfaction or waiver of the conditions set forth in
Article 5. The date upon which the Closing shall occur is referred to herein as
the "Closing Date."
Section 2.3. Effects of the Plans.
(a) Effect of the Schemes of Arrangement. As of the Effective Time,
LaSalle Holdings shall be a wholly-owned Subsidiary of New Holdings and LaSalle
Re shall be, directly and indirectly through LaSalle Holdings, a wholly-owned
Subsidiary of New Holdings, and holders of LaSalle Holdings Shares and Minority
Shares shall only have the right to receive the LaSalle Consideration as set
forth in Section 2.6(c).
(b) Effect of the Plan of Reorganization. As of the Effective Time,
Trenwick shall have transferred all of its assets to New Holdings and New
Holdings shall have assumed all the liabilities of Trenwick and the holders of
7
Trenwick Shares shall only have the right to receive the Trenwick Consideration
as set forth in Section 2.7(b).
Section 2.4. Governing Documents.
(a) New Holdings.
(i) At or prior to the Closing, the memorandum of association
of New Holdings shall be in the form set forth in Exhibit B(i)
attached hereto.
(ii) At or prior to the Closing, the bye-laws of New Holdings
shall be in the form set forth in Exhibit B(ii) attached
hereto.
(b) LaSalle Holdings.
(i) The memorandum of association of LaSalle Holdings in
effect at the Effective Time shall continue to be the
memorandum of association of LaSalle Holdings until thereafter
amended or restated as provided therein and by law.
(ii) The bye-laws of LaSalle Holdings in effect at the
Effective Time, shall continue to be the bye-laws of LaSalle
Holdings until thereafter amended or restated as provided
therein and by law.
(c) LaSalle Re.
(i) The memorandum of association of LaSalle Re in effect at
the Effective Time shall continue to be the memorandum of
association of LaSalle Re until thereafter amended or restated
as provided therein and by law.
(ii) The bye-laws of LaSalle Re in effect at the Effective
Time shall continue to be the bye-laws of LaSalle Re until
thereafter amended or restated as provided therein and by law.
Section 2.5. Board of Directors of New Holdings. The parties
hereto shall procure that at or prior to the Closing, the directors of New
Holdings shall be the individuals designated in Exhibit C attached hereto, which
such directors shall constitute the entire Board of Directors of New Holdings at
such time, each of such directors to hold office in accordance with the
applicable provisions of the bye-laws of New Holdings and until their successors
shall be elected or appointed and shall duly qualify.
Section 2.6. Terms of the Schemes of Arrangement: Exchange of
Securities. Subject to Section 2.6(e), at the Effective Time, by virtue of the
Schemes of Arrangement and without any action on the part of LaSalle Holdings,
LaSalle Re or the holder of any of the following securities:
8
(a) Subject to Section 2.6(c) and Section 2.12, each LaSalle Holdings
Share and each Minority Share that is issued and outstanding immediately prior
to the Effective Time shall be transferred to New Holdings and there shall be
allotted and issued to the holder thereof such number of fully paid and
nonassessable New Holdings Shares as is equal to the LaSalle Exchange Ratio, as
defined below (the "LaSalle Consideration"). The "LaSalle Exchange Ratio" means
the product of (i) 1.0 multiplied by (ii) the quotient of (A) the LaSalle Fair
Market Value minus 50% of the amount by which any Net Loss experienced by
LaSalle Holdings exceeds $40,000,000 and is less than or equal to $60,000,000
and minus 100% of the amount by which any Net Loss experienced by LaSalle
Holdings exceeds $60,000,000 and is less than or equal to $100,000,000, divided
by (B) the LaSalle Fair Market Value. New Holdings shall issue the New Holdings
Shares to be received as LaSalle Consideration and register the Persons to whom
New Holdings Shares are issued on New Holdings' register of members. The
Non-Voting Shares held by LaSalle Holdings shall not be affected by the Schemes
of Arrangement.
(b) Each LaSalle Holdings Option (as defined herein) and each LaSalle
Re Option (as defined herein) outstanding as of the Effective Time shall be
treated in accordance with the provisions of Section 5.9.
(c) Each LaSalle Holdings Share that is issued and outstanding
immediately prior to the Effective Time that is owned by LaSalle Holdings,
LaSalle Re, Trenwick, New Holdings or any Subsidiary of either of the foregoing
shall be automatically cancelled and retired and shall cease to exist, and no
cash or other consideration shall be delivered or deliverable in exchange
therefor.
(d) Each Series A Preferred Share of LaSalle Holdings or LaSalle Re
that is issued and outstanding immediately prior to the Effective Time shall
remain unchanged as a Series A Preferred Share of LaSalle Holdings or LaSalle
Re, as the case may be.
(e) In the event that this Agreement and the LaSalle Re Scheme of
Arrangement are not approved by the vote specified in Section 4.15(b), then the
LaSalle Re Scheme of Arrangement shall not be effected and the provisions of
Section 5.9(c) shall not apply.
Section 2.7. Terms of the Plan of Reorganization: Issuance of
Securities. At the Effective Time, by virtue of the Plan of Reorganization and
without any action on the part of Trenwick or the holder of any of the following
securities:
(a) Subject to Section 2.7(c) and Section 2.12, there shall be allotted
and issued to each holder of Trenwick Shares a number of fully paid and
nonassessable New Holdings Shares as is equal to the Trenwick Exchange Ratio, as
defined below (the "Trenwick Consideration"). The "Trenwick Exchange Ratio"
means the product of (i) 1.0 multiplied by (ii) the quotient of (A) the Trenwick
Fair Market Value minus 50% of the amount by which any Net Loss experienced by
Trenwick exceeds $40,000,000 and is less than or equal to $60,000,000 and minus
100% of the amount by which any Net Loss experienced by Trenwick exceeds
$60,000,000 and is less than or equal to $100,000,000, divided by (B) the
9
Trenwick Fair Market Value. If prior to the Effective Time either Trenwick,
LaSalle Holdings or LaSalle Re should split or combine the Trenwick Shares, the
LaSalle Re Shares or the Minority Shares, as applicable, pay a stock dividend or
otherwise change the Trenwick Shares, the LaSalle Re Shares or the Minority
Shares, as applicable, into any other securities, or make any other dividend or
distribution on the Trenwick Shares, the LaSalle Re Shares or the Minority
Shares, as applicable, then the Trenwick Exchange Ratio will be appropriately
adjusted to reflect such split, combination, dividend or other distribution or
changes. New Holdings shall issue the New Holdings Shares to be received as
Trenwick Consideration and register the Persons to whom such New Holdings Shares
are issued in New Holdings' register of members.
(b) Each Trenwick Option (as defined herein) outstanding as of the
Effective Time shall be treated in accordance with the provisions of Section
5.9.
(c) Each Trenwick Share that is issued and outstanding immediately
prior to the Effective Time that is owned by LaSalle Holdings, LaSalle Re,
Trenwick, New Holdings or any Subsidiary of any of the foregoing (together, in
each case, with the associated Right (as defined in Section 3.3(a)) shall be
automatically cancelled and retired and shall cease to exist, and no cash or
other consideration shall be delivered or deliverable in exchange therefor.
Section 2.8. Terms of the Schemes of Arrangement: Surrender and
Payment.
(a) Promptly after the Effective Time, New Holdings shall (i) appoint
an agent (the "LaSalle Exchange Agent") for the purpose of exchanging
certificates representing LaSalle Holdings Shares and Minority Shares for New
Holdings Shares pursuant to Section 2.6(a), (ii) deposit with the LaSalle
Exchange Agent certificates representing the aggregate LaSalle Consideration to
be paid in respect of the LaSalle Holdings Shares and the Minority Shares
(together with any dividends or distributions with respect thereto) and (iii)
send, or cause the LaSalle Exchange Agent to send, to each holder of LaSalle
Holdings Shares and each holder of Minority Shares at the Effective Time a
letter of transmittal for use in such exchange (which shall specify that the
delivery shall be effected, and risk of loss and title shall pass, only upon
proper delivery of the certificates representing LaSalle Holdings Shares or
Minority Shares (as applicable) to the LaSalle Exchange Agent).
(b) Each holder of LaSalle Holdings Shares or Minority Shares that have
been transferred to New Holdings pursuant to the Schemes of Arrangement, upon
surrender to the LaSalle Exchange Agent of a certificate or certificates
representing such shares, together with a properly completed letter of
transmittal covering such shares, shall be entitled to receive the LaSalle
Consideration payable in respect of such shares. Until so surrendered, each such
certificate shall, after the Effective Time, represent for all purposes only the
right to receive such LaSalle Consideration.
(c) If any portion of the LaSalle Consideration is to be paid to a
Person other than the registered holder of the LaSalle Holdings Shares or
Minority Shares (as applicable) represented by the certificate or certificates
surrendered in exchange therefor, it shall be a condition to such payment that
the certificate or certificates so surrendered shall be properly endorsed or
otherwise be in proper form for transfer and that the Person requesting such
10
payment shall pay to the LaSalle Exchange Agent any transfer or other Taxes
required as a result of such payment to a Person other than the registered
holder of such shares or establish to the satisfaction of the LaSalle Exchange
Agent that such Tax has been paid or is not payable.
(d) After the Effective Time, there shall be no further registrations
of transfers of LaSalle Holdings Shares or Minority Shares other than the
registration of LaSalle Holdings Shares and Minority Shares in the name of New
Holdings pursuant to Section 2.6(a). If, after the Effective Time, certificates
representing LaSalle Holdings Shares or Minority Shares are presented to LaSalle
Holdings or, subject to the provisions of Section 2.8(e), the LaSalle Exchange
Agent, they shall be cancelled and exchanged for the LaSalle Consideration in
accordance with the procedures set forth in this Section 2.8.
(e) Any portion of the LaSalle Consideration (together with any
dividends or distributions with respect to the New Holdings Shares) deposited
with the LaSalle Exchange Agent pursuant to Section 2.8(a) and any cash payment
for a fractional New Holdings Share pursuant to Section 2.12, that remains
unclaimed by the holders of LaSalle Holdings Shares or the holders of Minority
Shares twelve months after the Effective Time shall be returned to New Holdings
or an Affiliate designated by New Holdings, upon demand, and any such holder who
has not exchanged his LaSalle Holdings Shares or Minority Shares for the LaSalle
Consideration in accordance with this Section 2.8 prior to that time shall
thereafter look only to New Holdings for his claim for New Holdings Shares and
any dividends or distributions with respect to New Holdings Shares.
Notwithstanding the foregoing, New Holdings shall not be liable to any holder of
LaSalle Holdings Shares or any holder of Minority Shares for any amount paid to
a public official pursuant to applicable abandoned property laws.
(f) No dividends or other distributions with respect to the New
Holdings Shares constituting part of the LaSalle Consideration shall be paid to
the holder of any unsurrendered certificates representing LaSalle Holdings
Shares or Minority Shares until such certificates are surrendered as provided in
this Section 2.8. Upon such surrender, there shall be paid, without interest, to
the Person in whose name the certificates representing the New Holdings Shares
received in exchange for such LaSalle Holdings Shares or Minority Shares (as
applicable) are registered, (i) all dividends and other distributions in respect
of New Holdings Shares that are payable on a date subsequent to, and the record
date for which occurs after, the Effective Time and (ii) all dividends or other
distributions in respect of LaSalle Holdings Shares or Minority Shares (as
applicable) that are payable on a date subsequent to, and the record date for
which occurs on or before, the Effective Time.
(g) At and after the Effective Time, each holder of a certificate or
certificates that represented issued and outstanding LaSalle Holdings Shares or
Minority Shares immediately prior to the Effective Time shall cease to have any
rights as a shareholder of LaSalle Holdings or LaSalle Re (as applicable),
except for the right to surrender its certificate or certificates in exchange
for the LaSalle Consideration as provided in this Section 2.8.
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Section 2.9. Terms of the Plan of Reorganization: Surrender and
Payment.
(a) Promptly after the Effective Time, New Holdings shall (i) appoint
an agent (the "Trenwick Exchange Agent") for the purpose of exchanging
certificates representing Trenwick Shares for New Holdings Shares pursuant to
Section 2.7, (ii) deposit with the Trenwick Exchange Agent certificates
representing the aggregate Trenwick Consideration to be paid in exchange for the
Trenwick Shares (together with any dividends or distributions with respect
thereto) and (iii) send, or cause the Trenwick Exchange Agent to send, to each
holder of Trenwick Shares at the Effective Time a letter of transmittal for use
in such exchange (which shall specify that the delivery shall be effected, and
risk of loss and title shall pass, only upon proper delivery of the certificates
representing Trenwick Shares to the Trenwick Exchange Agent).
(b) Each holder of Trenwick Shares that has the right to receive the
Trenwick Consideration pursuant to the Plan of Reorganization, upon surrender to
the Trenwick Exchange Agent of a certificate or certificates representing such
Trenwick Shares, together with a properly completed letter of transmittal
covering such Trenwick Shares, shall be entitled to receive the Trenwick
Consideration payable in respect of such Trenwick Shares. Until so surrendered,
each such certificate shall, after the Effective Time, represent for all
purposes only the right to receive such Trenwick Consideration.
(c) If any portion of the Trenwick Consideration is to be paid to a
Person other than the registered holder of the Trenwick Shares represented by
the certificate or certificates surrendered in exchange therefor, it shall be a
condition to such payment that the certificate or certificates so surrendered
shall be properly endorsed or otherwise be in proper form for transfer and that
the Person requesting such payment shall pay to the Trenwick Exchange Agent any
transfer or other Taxes required as a result of such payment to a Person other
than the registered holder of such Trenwick Shares or establish to the
satisfaction of the Trenwick Exchange Agent that such Tax has been paid or is
not payable.
(d) After the Effective Time, there shall be no further registrations
of transfers of Trenwick Shares. If, after the Effective Time, certificates
representing Trenwick Shares are presented to Trenwick or, subject to the
provisions of Section 2.9(e), the Trenwick Exchange Agent, they shall be
cancelled and exchanged for the Trenwick Consideration in accordance with the
procedures set forth in this Section 2.9.
(e) Any portion of the Trenwick Consideration (together with any
dividends or distributions with respect to the New Holdings Shares) deposited
with the Trenwick Exchange Agent pursuant to Section 2.9(a), and any cash
payment for a fractional New Holdings Share pursuant to Section 2.12, that
remains unclaimed by the holders of Trenwick Shares twelve months after the
Effective Time shall be returned to New Holdings or an Affiliate designated by
New Holdings, upon demand, and any such holder who has not exchanged his
Trenwick Shares for the Trenwick Consideration in accordance with this Section
2.9 prior to that time shall thereafter look only to New Holdings for his claim
12
for New Holdings Shares, any cash in lieu of fractional New Holdings Shares and
any dividends or distributions with respect to New Holdings Shares.
Notwithstanding the foregoing, New Holdings shall not be liable to any holder of
Trenwick Shares for any amount paid to a public official pursuant to applicable
abandoned property laws.
(f) No dividends or other distributions with respect to the New
Holdings Shares constituting part of the Trenwick Consideration shall be paid to
the holder of any unsurrendered certificates representing Trenwick Shares until
such certificates are surrendered as provided in this Section 2.9. Upon such
surrender, there shall be paid, without interest, to the Person in whose name
the certificates representing the New Holdings Shares allotted in exchange for
such Trenwick Shares are registered, (i) all dividends and other distributions
in respect of New Holdings Shares that are payable on a date subsequent to, and
the record date for which occurs after, the Effective Time and (ii) all
dividends or other distributions in respect of Trenwick Shares that are payable
on a date subsequent to, and the record date for which occurs on or before, the
Effective Time.
(g) At and after the Effective Time, each holder of a certificate or
certificates that represented issued and outstanding Trenwick Shares immediately
prior to the Effective Time shall cease to have any rights as a stockholder of
Trenwick, except for the right to surrender its certificate or certificates in
exchange for the Trenwick Consideration as provided in this Section 2.9.
Section 2.10. Voting. In determining shareholders of New Holdings
entitled to notice of and to vote at meetings of shareholders of New Holdings,
former shareholders of record of LaSalle Holdings, LaSalle Re and Trenwick shall
not be deemed shareholders of record until the register of members of New
Holdings is amended to reflect the allotment and issue of the New Holdings
Shares to such former shareholders.
Section 2.11. Lost Certificates. If any certificate representing
Trenwick Shares, LaSalle Holdings Shares or Non-Voting Shares shall have been
lost, stolen or destroyed, upon the making of an affidavit of that fact by the
Person claiming such certificate to be lost, stolen or destroyed and, if
required by New Holdings, the posting by such Person of a bond in such
reasonable amount as the New Holdings may direct as indemnity against any claim
that may be made against it with respect to such certificate, the Trenwick
Exchange Agent or LaSalle Exchange Agent, as the case may be, will deliver in
exchange for such lost, stolen or destroyed certificate the Trenwick
Consideration or LaSalle Consideration, as the case may be, with respect to the
Trenwick Shares, LaSalle Holdings Shares or Non-Voting Shares formerly
represented thereby, without any interest thereon.
Section 2.12. No Fractional Shares. No certificates or scrip
representing fractional New Holdings Shares shall be issued in exchange for
Trenwick Shares, LaSalle Holding Shares, or NonVoting Shares, but in lieu
thereof each holder otherwise entitled to a fractional New Holdings Share (after
taking into account all Trenwick Shares, LaSalle Holdings Shares or Non-Voting
Shares, as applicable, owned by such holder) shall be entitled to receive, from
the Trenwick Exchange Agent or the LaSalle Exchange Agent, as applicable, in
accordance with the provisions of this Section 2.12, a cash payment in lieu of
such fractional New Holdings Share representing the value of such fraction,
13
which for this purpose shall be calculated by (i) multiplying such fraction by
the product of the Average Closing Price and the Trenwick Exchange Ratio in the
case of Trenwick Shares and (ii) multiplying such fraction by the product of the
Average Closing Price and the LaSalle Exchange Ratio in the case of LaSalle
Holdings Shares and Non-Voting Shares. As soon as practicable after the
determination of the amount of cash, if any, to be paid to holders of Trenwick
Shares, LaSalle Holdings Shares, or Non-Voting Shares, as applicable, in lieu of
any fractional New Holdings Share, the Trenwick Exchange Agent or the LaSalle
Exchange Agent, as applicable, shall promptly pay without interest to all
holders of Trenwick Shares, LaSalle Holdings Shares, or Non-Voting Shares, as
applicable, entitled thereto all such amounts. Holders of interests representing
fractional New Holdings Shares shall not be entitled to vote such interests or
to any other rights as a shareholder of New Holdings.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF TRENWICK
Trenwick hereby represents and warrants to LaSalle Holdings that as of
the date of the Original Agreement (except to the extent that a representation
or warranty speaks as of an earlier date), with references to "the date hereof"
or the "date of this Agreement" in this Article 3 being deemed to be references
to the date of the Original Agreement:
Section 3.1. Corporation; Organization.
(a) Except as set forth in Section 3.1(a) of the Trenwick Disclosure
Letter, each of Trenwick and its Subsidiaries is a company duly incorporated,
validly existing and in good standing (with respect to jurisdictions that
recognize such concept) under the laws of the jurisdiction of its incorporation.
Each of Trenwick and its Subsidiaries (i) is qualified, licensed or domesticated
as a foreign corporation in all jurisdictions where such qualification, license
or domestication is required to own and operate its properties and conduct its
business in the manner and at the places presently conducted; (ii) holds all
franchises, grants, licenses, certificates, permits, consents and orders, all of
which are valid and in full force and effect, from all applicable regulatory
authorities necessary to own and operate its properties and to conduct its
business in the manner and at the places presently conducted; and (iii) has full
power and authority (corporate and other) to own, lease and operate its
respective properties and assets and to carry on its business as presently
conducted and as proposed to be conducted, except where the failure to be so
qualified, licensed or domesticated or to hold such franchises, grants,
licenses, certificates, permits, consents and orders or to have such power and
authority would not, when taken together with all other such failures,
reasonably be expected to have a Material Adverse Effect on Trenwick. Trenwick
has furnished to LaSalle Holdings complete and correct copies of its certificate
of incorporation and by-laws as in effect on the date hereof. Such certificate
of incorporation and by-laws are in full force and effect and no other
constitutional documents are applicable to or binding upon Trenwick.
14
(b) Trenwick conducts its insurance and reinsurance operations through
the Subsidiaries set forth in Section 3.1(b) of the Trenwick Disclosure Letter
(collectively, the "Trenwick Insurance Subsidiaries"). Each of the Trenwick
Insurance Subsidiaries is (i) duly licensed or authorized as an insurance
company or (as applicable) a reinsurer in its jurisdiction of incorporation or
duly licensed to operate in the insurance or reinsurance business (as
applicable) in its jurisdiction of incorporation, (ii) duly licensed or
authorized as an insurance company and (as applicable) a reinsurer in each other
jurisdiction where it is required to be so licensed or authorized or duly
licensed to operate in the insurance or reinsurance business (as applicable) in
each other jurisdiction where it is required to be so licensed and (iii) duly
authorized in its jurisdiction of incorporation and each other applicable
jurisdiction to write each line of business currently written by such Trenwick
Insurance Subsidiaries, except, in any such case, where the failure to be so
licensed or authorized is not reasonably expected to have, individually or in
the aggregate, a Material Adverse Effect on Trenwick. Except as set forth in
Section 3.1(b) of the Trenwick Disclosure Letter, Trenwick has made all required
filings under applicable insurance holding company statutes except where the
failure to file is not reasonably expected to have a Material Adverse Effect on
Trenwick.
Section 3.2. Authority; Approval and Fairness.
(a) Trenwick has all requisite corporate power and authority to execute
and deliver this Agreement and, subject to the due approval and adoption of this
Agreement by its stockholders, to perform its obligations hereunder and
consummate the transactions contemplated hereby. Trenwick has all requisite
corporate power and authority to enter into the Stock Option Agreements and to
consummate the transactions contemplated thereby. The execution and delivery of
this Agreement by Trenwick, the performance by Trenwick of its obligations
hereunder and the consummation by Trenwick of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Trenwick, subject only to compliance with the provisions of Sections 271 and
275 of the GCL. No other corporate proceedings on the part of Trenwick are
necessary for the execution and delivery of this Agreement by Trenwick and,
subject to compliance with the provisions of Sections 271 and 275 of the GCL,
the performance by Trenwick of its obligations hereunder and the consummation by
Trenwick of the transactions contemplated hereby. This Agreement and the Stock
Option Agreements have been duly executed and delivered by Trenwick and
(assuming the due authorization, execution and delivery of this Agreement and
the Stock Option Agreements by LaSalle Holdings, LaSalle Re), subject to the
provisions of Sections 271 and 275 of the GCL, constitute legal, valid and
binding obligations of Trenwick, enforceable against Trenwick in accordance its
terms, subject with respect to enforceability to the effect of bankruptcy,
fraudulent conveyance, insolvency, reorganization, moratorium or similar laws
now or hereafter affecting the enforcement of creditors' rights generally and to
the availability of equitable remedies.
(b) The Board of Directors of Trenwick (the "Trenwick Board") (i) has
unanimously (by all directors present at a meeting duly called and held)
declared that it considers this Agreement, the Plan of Reorganization and the
other transactions contemplated hereby to be advisable and in the best interests
15
of Trenwick and its stockholders, and (ii) has authorized and approved in all
respects this Agreement, the Plans and the other transactions contemplated
hereby.
Section 3.3. Capital Structure.
(a) As of the date hereof, the authorized capital stock of Trenwick
consists of 30,000,000 shares of common stock with a par value of $0.10 per
share and 2,000,000 shares of preferred stock with a par value of $0.10 per
share. As of December 15, 1999, (i) 17,388,981 shares of common stock were
issued and outstanding, (ii) no shares of common stock were held as treasury
shares or by Subsidiaries of Trenwick, (iv) 200,000 shares of Series B Junior
Participating Preferred Stock were reserved for issuance upon exercise of the
rights (the "Rights") distributed to the holders of shares of common stock
pursuant to the Rights Agreement dated as of September 24, 1997 (the "Rights
Agreement"), between Trenwick and First Chicago Trust Company of New York, as
Rights Agent, and (v) no shares of preferred stock were issued or outstanding.
Section 3.3(a) of the Trenwick Disclosure Letter sets forth each plan,
arrangement or agreement pursuant to which options or stock appreciation rights
with respect to Trenwick Shares may be granted or under which such options or
stock appreciation rights have been granted and are outstanding (the "Trenwick
Option Plans") and in the aggregate the maximum number of options and stock
appreciation rights outstanding as of the date hereof and the class and number
of Trenwick Shares reserved for issue pursuant to the Trenwick Option Plans
(such options and rights being herein collectively referred to as the "Trenwick
Options"), together with a listing of the aggregate number of such Trenwick
Options which shall vest at the Effective Time as a result of the Plan of
Reorganization. Each of the outstanding shares of capital stock of each
Subsidiary of Trenwick, other than the 110,000 redeemable preferred capital
securities (liquidation amount $1,000 per security) issued by Trenwick Capital
Trust I, a Delaware statutory business trust ("Trenwick Capital"), and other
than as set forth in Section 3.3(a) of the Trenwick Disclosure Letter, is
directly or indirectly owned by Trenwick, free and clear of all Liens.
(b) Except as described in Section 3.3(b) of the Trenwick Disclosure
Letter, no bonds, debentures, notes or other indebtedness having the right to
vote (or convertible into or exercisable for securities having the right to
vote) on any matters on which stockholders may vote ("Voting Debt") of Trenwick
or any of its Subsidiaries are issued or outstanding.
(c) Except as described in Sections 3.3(a), (b) or (c) of the Trenwick
Disclosure Letter, there are no options, warrants, calls, rights, commitments or
agreements of any character to which Trenwick or any of its Subsidiaries is a
party or by which any of them is bound obligating Trenwick or any of its
Subsidiaries to issue, deliver or sell, or cause to be issued, delivered or
sold, additional shares of capital stock or any Voting Debt of Trenwick or any
of its Subsidiaries or obligating Trenwick or any of its Subsidiaries to grant,
extend or enter into any such option, warrant, call, right, commitment or
agreement. Except as set forth in this Agreement or in Section 3.3(c) of the
Trenwick Disclosure Letter, there are no outstanding contractual obligations of
Trenwick or any of its Subsidiaries to repurchase, redeem or otherwise acquire
any shares of capital stock of Trenwick or any of its Subsidiaries.
16
(d) Except as described in Section 3.3(d) of the Trenwick Disclosure
Letter or as specifically described in this Agreement and except for quarterly
dividends in an amount not in excess of $0.26 per share, since September 30,
1999, Trenwick has not (i) made or agreed to make any share split or share
dividend, or issued or permitted or agreed to permit to be issued any shares, or
securities exercisable for or convertible into shares, of capital stock of
Trenwick other than pursuant to and as required by the terms of any Trenwick
Option; (ii) repurchased, redeemed or otherwise acquired any shares of capital
stock of Trenwick; or (iii) declared, set aside, made or paid to the
stockholders of Trenwick dividends or other distributions on the outstanding
shares of capital stock of Trenwick.
Section 3.4. SEC Reports; Financial Statements.
(a) Trenwick has delivered or made available to LaSalle Holdings a true
and complete copy of each report, schedule, registration statement and
definitive proxy statement or information statement (including exhibits) filed
by Trenwick or Chartwell Re Corporation ("Chartwell") with the SEC in respect of
their respective fiscal years ending December 31, 1997 and 1998 and their
respective quarters ending after December 31, 1998 under the Securities Act and
the Exchange Act and will deliver to LaSalle Holdings promptly upon the filing
thereof with the SEC all such reports, schedules, registration statements and
proxy statements (including exhibits) as may be filed after the date hereof and
prior to the Effective Time (as such documents have since the time of their
filing been amended, including without limitation, amendments reflected in the
Joint Proxy Statement/Prospectus dated September 7, 1999 or may after their
filing, if after the date hereof, be amended, the "Trenwick SEC Reports"), which
are or will be all the documents that Trenwick was or will be required to file
with the SEC. Except as disclosed in Section 3.4(a) of the Trenwick Disclosure
Letter, as of their respective dates, the Trenwick SEC Reports complied or will
comply in all material respects with the requirements of the Securities Act or
the Exchange Act, as the case may be, and the rules and regulations of the SEC
thereunder applicable to the Trenwick SEC Reports, and none of the Trenwick SEC
Reports contained or will contain any untrue statement of a material fact or
omitted or will omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made or will be made, not misleading.
(b) As of their respective dates, the financial statements of Trenwick
included or to be included in the Trenwick SEC Reports (the "Trenwick Financial
Statements") complied or will comply as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the SEC with respect thereto, and presented or will present fairly in all
material respects the consolidated financial position of Trenwick and its
Subsidiaries and the consolidated results of operations, changes in
stockholders' equity and cash flows of Trenwick and its Subsidiaries as of the
dates and for the periods indicated, in accordance with GAAP applied on a
consistent basis, subject in the case of interim financial statements to normal
year-end adjustments and except for the absence of certain footnote information
in the unaudited statements.
17
(c) Except as set forth in, or arising out of facts or circumstances
disclosed in, filings by Trenwick with the SEC prior to the date hereof,
Trenwick and its Subsidiaries have no liabilities, debts, claims or obligations
of any nature on the date hereof, whether accrued, absolute, direct or indirect,
contingent or otherwise, whether due or to become due, that would be required to
be included on a balance sheet prepared in accordance with GAAP ("Trenwick
Liabilities"), and there is no existing condition or set of circumstances which
would reasonably be expected to result in a Trenwick Liability, except for (i)
Trenwick Liabilities incurred in the ordinary and usual course of business and
consistent with past practice since September 30, 1999, (ii) Trenwick
Liabilities incurred in connection with or as a result of the transactions
contemplated by this Agreement and (iii) Trenwick Liabilities that would not
reasonably be expected to have a Material Adverse Effect on Trenwick.
Section 3.5. Absence of Certain Changes or Events. Except in
connection with this Agreement, the Plans, the Stock Option Agreements and the
transactions contemplated hereby and thereby or except as described in Section
3.5 of the Trenwick Disclosure Letter, as disclosed in the Trenwick SEC Reports
filed and publicly available prior to the date of this Agreement (the "Filed
Trenwick SEC Reports") since the date of the most recent audited financial
statements included in the Filed Trenwick SEC Reports, Trenwick and its
Subsidiaries have conducted their business in the ordinary course consistent
with past practice, and there has not occurred (i) any event or change having
individually or in the aggregate a Material Adverse Effect on Trenwick, (ii) any
declaration, setting aside or payment of any dividend or other distribution
(whether in cash, stock or property) with respect to any of Trenwick's
outstanding capital stock, other than regular quarterly cash dividends of not
more than $0.26 per share on the Trenwick Shares and dividends paid by wholly
owned subsidiaries, (iii) (A) any granting by Trenwick or any of its
Subsidiaries to any current or former director or officer of Trenwick or its
Subsidiaries of any increase in compensation, bonus or other benefits, except
for normal increases in the ordinary course of business, (B) any granting by
Trenwick or any of its Subsidiaries to any such current or former director or
officer of any increase in severance or termination pay or (C) any entry by
Trenwick or any of its Subsidiaries into, or any amendments of, any employment,
deferred compensation, consulting, severance, termination or indemnification
agreement with any such current or former director or officer, (iv) any tax
election that individually or in the aggregate would have a Material Adverse
Effect on Trenwick or any of its tax attributes or any settlement or compromise
of any material income tax liability, or (v) any change in accounting methods,
principles or practices by Trenwick or any of its Subsidiaries materially
affecting their assets, liabilities or business, except insofar as may have been
required or permitted by a change in applicable accounting principles (including
statutory accounting practices ("SAP")).
Section 3.6. Certain Fees. No finder, broker, agent, financial advisor
or other intermediary other than DLJ has acted on behalf of Trenwick in
connection with this Agreement or the transactions contemplated hereby, or is
entitled to any payment in connection herewith. Trenwick has provided to LaSalle
Holdings copies of Trenwick's engagement letter with DLJ in connection with this
Agreement and the transactions contemplated hereby.
18
Section 3.7. No Defaults. Neither Trenwick no any of its
Subsidiaries is in default or violation (and no event has occurred which with
notice or lapse of time or both would constitute a default or violation) of its
certificate of incorporation or by-laws or other governing document, or any
material agreement, mortgage, indenture, debenture, trust, lease, license or
other instrument or obligation to or by which it or any of its properties is
subject or bound (the "Trenwick Instruments"), except for such defaults or
violations as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Trenwick. Except as set forth in Section
3.7 of the Trenwick Disclosure Letter, the execution, delivery and performance
of this Agreement and the taking of any other action contemplated by this
Agreement will not (i) result in any violation of or be in conflict with or
constitute a breach or default (with or without notice or lapse of time or both)
under (a) the certificate of incorporation or by-laws of Trenwick or its
Subsidiaries or (b) any of the other Trenwick Instruments, except for any such
violation of, conflict with, breach of or default under which would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Trenwick, (ii) result in or constitute an event entitling any
party to a Trenwick Instrument to effect an acceleration of the maturity of any
indebtedness of Trenwick or any of its Subsidiaries or an increase in the rate
of interest presently in effect with respect to such indebtedness, except for
any such accelerations or increases which would not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect on Trenwick or
(iii) result in the creation of any Lien upon any of the properties or assets of
Trenwick, except for Permitted Liens and any Liens which would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
Trenwick.
Section 3.8. Consents.
(a) Except as set forth in Section 3.8 of the Trenwick Disclosure
Letter and except for compliance with the provisions of Sections 271 and 275 of
the GCL and the approval of Lloyd's, no consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any Governmental Authority ("Consent") is required on the part of
Trenwick or any of its Subsidiaries in connection with the execution, delivery
and performance by Trenwick of this Agreement and the consummation by Trenwick
of the transactions contemplated hereby, except those required by (i) compliance
with any applicable requirements of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976, as amended (the "HSR Act"), (ii) United States federal and state
securities or "Blue Sky" laws and (iii) where failure to obtain such Consent
would not be reasonably expected to have a Material Adverse Effect on Trenwick.
(b) Other than the affirmative vote of the holders of more than 50% of
the issued and outstanding Trenwick Shares (with each share having one vote per
share) required to approve and adopt this Agreement and the Plan of
Reorganization, there is no other vote, consent or approval of the holders of
any class of shares of Trenwick necessary to approve and adopt this Agreement,
the Plan of Reorganization and the transactions contemplated hereby.
Section 3.9. Compliance with Applicable Law. Each of Trenwick and
its Subsidiaries is in compliance with all licenses, permits and other
authorizations, domestic or foreign, necessary to conduct its respective
19
business, except where failure to have or comply with such licenses, permits and
authorizations would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on Trenwick. Neither Trenwick nor any of
its Subsidiaries is in default or violation (and no event has occurred which
with notice or the lapse of time or both would constitute a default or
violation) of any judgment, decree, order, law, statute, rule or regulation of
any Governmental Authority, except for such defaults or violations as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Trenwick. Subject to obtaining the Consents referred to in
Section 3.8, the execution, delivery and performance of this Agreement by
Trenwick and the consummation by Trenwick of the transactions contemplated
hereby prior to the date or dates as of which the representations and warranties
herein are made or deemed made, will not result in any default or violation of
any judgment, decree, order, law, statute, rule or regulation of any
Governmental Authority applicable to Trenwick or its Subsidiaries, except for
such defaults or violations as would not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect on Trenwick.
Section 3.10. Information Supplied. None of the information
supplied or to be supplied by Trenwick for inclusion or incorporation by
reference in the Registration Statement on Form S-4 (the "Form S-4") to be filed
with the SEC by New Holdings relating to the New Holdings Shares comprising
LaSalle Consideration and Trenwick Consideration will, at the time the Form S-4
is filed with the SEC, at any time it is amended or supplemented or at the time
it becomes effective under the Securities Act, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances under
which such statements were made, not misleading. The letters to shareholders,
notices of meetings, proxy statements and forms of proxies to be distributed to
shareholders of LaSalle Holdings and stockholders of Trenwick, respectively, in
connection with the Plans and the transactions contemplated hereby, except
information supplied by LaSalle Holdings in writing for inclusion in the Joint
Proxy Statement (as defined herein), will not, as of the date the Joint Proxy
Statement is first mailed to such shareholders and on the date of the meetings
of Trenwick's stockholders or LaSalle Holdings' shareholders, as the case may
be, and the date of any postponement or adjournment thereof, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. The information
and documents referred to in the previous two sentences are herein referred to
as the "Joint Proxy Statement." All documents that Trenwick is responsible for
filing with any Governmental Authority in connection with the transactions
contemplated hereby will comply as to form in all material respects with the
provisions of any applicable law.
Section 3.11. Material Contracts. Except as set forth in Section
3.11 of the Trenwick Disclosure Letter:
(a) All of the contracts of Trenwick and its Subsidiaries that are
required to be described in the Trenwick SEC Reports or to be filed as exhibits
thereto (including, without limitation, contracts of Chartwell) are described
20
described in the Trenwick SEC Reports or filed as exhibits thereto and are in
full force and effect.
(b) Neither Trenwick nor any of its Subsidiaries is a party to any
agreement containing any provision or covenant limiting in any material respect
the ability of Trenwick or any of its Subsidiaries (or New Holdings or any of
its Subsidiaries subsequent to the Effective Time) to (i) sell any products or
services of or to any other Person, (ii) engage in any line of business in any
geographical area or (iii) compete with or to obtain products or services from
any Person or limiting the ability of any Person to provide products or services
to Trenwick or any of its Subsidiaries.
(c) Neither Trenwick nor any of its Subsidiaries is a party to or bound
by any contract, agreement or arrangement which would cause the rights or
obligations of any party thereto to change in the event of the Plans, except for
any such contract, agreement or arrangement which would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
Trenwick.
Section 3.12. Taxes. Except as provided in Section 3.12 of the
Trenwick Disclosure Letter:
(a) Trenwick and its Subsidiaries have filed or caused to be filed with
the appropriate United States federal, state, local, foreign and other
Governmental Authorities, all Tax returns, information returns and reports
required to be filed on or prior to the date hereof (taking into account all
valid extensions). All such Tax returns, information returns and reports are
complete and accurate in all material respects.
(b) Trenwick and its Subsidiaries have paid in full or made adequate
provision (in accordance with GAAP) for the payment of all Taxes shown to be due
on the Tax returns referred to in Section 3.12(a). All material written
assessments of Taxes due and payable by or on behalf of Trenwick or any of its
Subsidiaries have either been paid or provided for (in accordance with GAAP) or
are being contested in good faith by appropriate proceedings.
(c) There are no material Tax claims pending against Trenwick or any of
its Subsidiaries and Trenwick does not know of any threatened claim for Tax
deficiencies or any basis for such claims, no material issues have been raised
in any examination by any taxing authority with respect to Trenwick or any of
its Subsidiaries which, by application of similar principles, reasonably could
be expected to result in a proposed deficiency for any other period not so
examined, and there are not now in force any waivers or agreements by Trenwick
or any of its Subsidiaries for the extension of time for the assessment of any
material Tax, nor has any such waiver or agreement been requested by any taxing
authority. Neither Trenwick nor any of its Subsidiaries has any liability for
any material United States federal, state, local, foreign or other Taxes of any
corporation or entity other than Trenwick and its Subsidiaries.
21
(d) There are no Liens on any of the assets of Trenwick or any of its
Subsidiaries that arose in connection with any failure (or alleged failure) to
pay any Taxes (other than Taxes that are not due as of the date hereof).
(e) Trenwick and its Subsidiaries have withheld and paid all United
States federal, state, local, foreign and other Taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third party.
(f) To Trenwick's knowledge, Section 3.12(f) of the Trenwick Disclosure
Letter discloses, with respect to the year ended December 31, 1998 and for the
period commencing January 1, 1999 and ending on the date of the Trenwick
Disclosure Letter, (i) each insurance or reinsurance transaction by Trenwick or
any of its Subsidiaries directly with stockholders of Trenwick and (ii) each
insurance or reinsurance transaction by Trenwick or any of its Subsidiaries
directly or indirectly with Persons related to stockholders of Trenwick and not
disclosed in clause (i) above, which would cause Trenwick or any of its
Subsidiaries to have any "related person insurance income" within the meaning of
Section 953(c)(2) of the Code.
(g) To Trenwick's knowledge, Trenwick and its Subsidiaries did not have
for the year ended December 31, 1998, and Trenwick does not expect Trenwick or
any of its Subsidiaries to have for the period ending at the Effective Time
(treating such period as if it were a taxable year), "related person insurance
income" within the meaning of Section 953(c)(2) of the Code in excess of the
exceptions provided in Sections 953(c)(3)(A) and (B) of the Code.
(h) To Trenwick's knowledge, except as disclosed in Section 3.12(h) of
the Trenwick Disclosure Letter, neither Trenwick nor any of its Subsidiaries is,
nor has Trenwick or any of its Subsidiaries ever been, a "controlled foreign
corporation" within the meaning of Section 957(a) or 957(b) of the Code.
(i) A representation with respect to Taxes contained in this Section
3.12 shall be deemed to be accurate unless an inaccuracy contained therein would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Trenwick.
Section 3.13. Litigation. Except as disclosed in the Trenwick SEC
Reports filed prior to the date hereof or in Section 3.13 of the Trenwick
Disclosure Letter, there are no actions, suits, claims, proceedings or
investigations pending against or, to the knowledge of Trenwick, threatened
against or affecting, Trenwick or any of its Subsidiaries or any of their
respective properties or any syndicates managed by a Lloyd's or other managing
agency which is a Subsidiary of Trenwick ("Trenwick Managing Agency") before any
Governmental Authority or otherwise which (a) would be expected to have,
individually or in the aggregate, a Material Adverse Effect on Trenwick, (b) in
any manner challenges or seeks to prevent, enjoin, alter or delay the
transactions contemplated hereby or (c) alleges criminal action or inaction. As
of the date hereof, neither Trenwick nor its Subsidiaries or any of their
respective properties is subject to any order, writ, judgment, injunction,
decree, determination or award having, or which would reasonably be expected to
have, a Material Adverse Effect on Trenwick or which would prevent or delay the
22
consummation of the transactions contemplated hereby. Except as disclosed in the
Trenwick SEC Reports filed prior to the date hereof, there are no pending or, to
the knowledge of Trenwick, threatened claims for indemnification by Trenwick or
any of its Subsidiaries in favor of directors, officers, employees and agents of
Trenwick or any of its Subsidiaries.
Section 3.14. Title to Properties; Leases Except as set forth in
Section 3.14(a) of the Trenwick Disclosure Letter, each of Trenwick and its
Subsidiaries has good and marketable title to, and is the lawful owner of, or
has the right to use pursuant to a license or otherwise, all of the tangible and
intangible assets, properties and rights used in its businesses and all tangible
and intangible assets, properties and rights reflected on the balance sheet of
Trenwick dated September 30, 1999 or acquired since September 30, 1999, free and
clear of all Liens (other than Permitted Liens) and material defects. Trenwick
and its Subsidiaries own no real property. Section 3.14(b) of the Trenwick
Disclosure Letter sets forth all material real property and personal property
leases of Trenwick and its Subsidiaries. All such leases are valid, binding and
enforceable against Trenwick or its Subsidiaries (and, to the knowledge of
Trenwick and its Subsidiaries, each other party thereto) in accordance with
their respective terms, and there does not exist, under any lease of real
property or personal property, any material defect or any event which, with
notice or lapse of time or both, would constitute a material default by the
Trenwick or its Subsidiaries, as the case may be, or, to the knowledge of
Trenwick and its Subsidiaries, by any other party thereto.
Section 3.15. Employees.
(a) Section 3.15(a) of the Trenwick Disclosure Letter lists all
employment contracts and similar arrangements between Trenwick or any of its
Subsidiaries and their respective executive officers and all plans and
arrangements pursuant to which Trenwick or any of its Subsidiaries is obligated
to make any payment or confer any material benefit upon any officer, director,
employee or agent of Trenwick or any of its Subsidiaries as a result of or in
connection with any of the transactions contemplated by this Agreement or any
transaction or transactions resulting in a change of control of Trenwick or any
of its Subsidiaries (including as a result of a termination of employment in
connection with any of such events). Except as described in Section 3.15(a) of
the Trenwick Disclosure Letter and except as would not reasonably be expected to
have a Material Adverse Effect on Trenwick, (a) Trenwick and its Subsidiaries
have complied with all laws relating to the employment of labor, including
provisions thereof relating to wages, hours, equal opportunity and collective
bargaining and (b) no labor dispute with employees of Trenwick or any of its
Subsidiaries exists or, to the knowledge of Trenwick, is threatened. The
severance costs associated with the acquisition of Chartwell and related
workforce reductions have been identified and are as set forth in Section
3.15(a) of the Trenwick Disclosure Letter.
(b) Except as set forth in Section 3.15(b) of the Trenwick Disclosure
Letter, neither Trenwick nor any of its Subsidiaries is a party to any
collective bargaining or other labor union contract applicable to Persons
employed by Trenwick or any of its Subsidiaries, no collective bargaining
agreement is being negotiated by Trenwick or any of its Subsidiaries and
Trenwick has no knowledge of any activities or proceedings of any labor union to
23
organize any of their respective employees. There is no labor dispute, strike or
work stoppage against Trenwick or any of its Subsidiaries pending or, to
Trenwick's knowledge, threatened which may interfere with the respective
business activities of Trenwick or any of its Subsidiaries, except where such
dispute, strike or work stoppage would not reasonably be expected to have a
Material Adverse Effect on Trenwick.
(c) Trenwick has made all necessary notifications to and received all
necessary consents from Lloyd's and the Financial Services Authority with
respect to the employment of personnel requiring such notification or consents.
Section 3.16. Benefit Plans.
(a) (i) Each Employee Benefit Plan maintained or contributed to, or
required to be maintained or contributed to, by Trenwick or any of its
Subsidiaries for the benefit of any present or former U.S. officer, employee or
director of Trenwick or any of its Subsidiaries (all the foregoing collectively
referred to hereinafter as "Trenwick Benefit Plans") has been administered
substantially in accordance with its terms and any related trust agreement or
insurance contract has been administered substantially in accordance with its
terms. Trenwick, its Subsidiaries and all the Trenwick Benefit Plans, and any
related trust agreements or insurance contracts, are in substantial compliance
with the applicable provisions of ERISA, the Code, all other applicable laws and
all applicable collective bargaining agreements.
(ii) None of Trenwick or any other person or entity that
together with Trenwick is treated as a single employer under
Section 414 of the Code (each a "Trenwick Commonly Controlled
Entity") has incurred any material liability under Title IV of
ERISA (other than for the payment of benefits or the timely
payment of Pension Benefit Guaranty Corporation insurance
premiums, in either case in the ordinary course) or under
Section 412(f) or 412(n) of the Code, and no condition exists
which could reasonably be expected to present a risk of
Trenwick or any Commonly Controlled Entity incurring such a
material liability.
(iii) Neither Trenwick nor any Trenwick Commonly Controlled
Entity is obligated to contribute to any "multiemployer plan"
(as defined in Section 3(37) or Section 4001(a)(3) of ERISA)
or has any material liability, including current or potential
withdrawal liability (within the meaning of Section 4201 of
ERISA) with respect to any multiemployer plan.
(iv) Except as contemplated by Section 2.4 or as disclosed in
the Filed Trenwick SEC Documents or in Section 3.16(a)(iv) of
the Trenwick Disclosure Schedule, since the date of the most
recent audited financial statements included in the Filed
Trenwick SEC Documents, there has not been any adoption or
amendment by Trenwick or any of its Subsidiaries of any
collective bargaining agreement or any Trenwick Benefit Plan.
24
Except as disclosed in the Filed Trenwick SEC Documents
or in Section 3.16 (a)(iv) of the Trenwick Disclosure
Schedule, there exist no employment, consulting, change
in control, severance, termination or indemnification
agreements, arrangements or understandings between Trenwick
or any Subsidiary and any current or former employee, officer
or director of Trenwick or any Subsidiary or any Trenwick
Benefit Plan.
(v) All material contributions and other payments required to
be made by Trenwick and its subsidiaries to any Trenwick
Benefit Plan prior to the date hereof have been made and all
accruals required to be made under any Trenwick Benefit Plan
have been made. There is no claim, dispute, grievance, charge,
complaint, restraining or injunctive order, litigation or
proceeding pending, or, to the knowledge of Trenwick,
threatened or anticipated (other than routine claims for
benefits) against or relating to any Trenwick Benefit Plan or
against the assets of any Trenwick Benefit Plan which could
reasonably be expected to result in the imposition of any
material liability of Trenwick. Neither Trenwick nor any of
its Subsidiaries has communicated generally to employees or
specifically to any employee regarding any future increase of
benefit levels (or future creations of new benefits) with
respect to any Trenwick Benefit Plans.
(vi) Each Trenwick Benefit Plan can be terminated or otherwise
discontinued without any liability to Trenwick or any
Subsidiary that would reasonably be expected to have a
Material Adverse Effect. With respect to each Trenwick Benefit
Plan subject to Title IV of ERISA and with respect to each
plan of a Trenwick Commonly Controlled Entity subject to Title
IV of ERISA (each a "Trenwick Defined Benefit Plan") Trenwick
Defined Benefit Plan (i) no termination of any Trenwick
Defined Benefit Plan has occurred pursuant to which all
liabilities have not been satisfied in full, and no event has
occurred and no condition exists that could reasonably be
expected to result in Trenwick or any Trenwick Commonly
Controlled Entity incurring liability under Title IV of ERISA
or could constitute grounds for terminating any Trenwick
Defined Benefit Plan; (ii) each Trenwick Defined Benefit Plan
which is subject to Part 3 of Subtitle B of Title I of ERISA
or Section 412 of the Code, has been maintained in compliance
with the minimum funding standards of ERISA and the Code and
no such Trenwick Defined Benefit Plan has incurred any
"accumulated funding deficiency," as defined in Section 412 of
the Code and Section 302 of ERISA, whether or not waived;
(iii) neither Trenwick nor any Trenwick Commonly Controlled
Entity has sought or received a waiver of its funding
requirements with respect to any Trenwick Defined Benefit Plan
and all material contributions payable with respect to each
Defined Benefit Plan have been timely made; (iv) no reportable
event, within the meaning of Section 4043 of ERISA, and no
event described in Section 4062 or 4063 of ERISA, has occurred
with respect to any Trenwick Defined Benefit Plan; (v) the
aggregate accumulated benefit obligations of each Trenwick
Defined Benefit Plan subject to Title IV of ERISA (as of the
25
date of the most recent actuarial valuation prepared for
such Trenwick Defined Benefit Plan) do not exceed the fair
market value of the assets of such Trenwick Defined Benefit
Plan (as of the date of such valuation); and (vi) no amendment
has been made to any Trenwick Defined Benefit Plan that has
required or would require the provision of security under
ERISA Section 307 or Code Section 401(a)(29).
(vii) The execution, delivery and performance of this
Agreement and the transactions contemplated hereby will not in
and of themselves result in the imposition of any federal
excise tax with respect to any Trenwick Benefit Plan.
(viii) Neither Trenwick nor any Subsidiary maintains or
contributes (or has maintained or contributed to) any Trenwick
Benefit Plan which provides, or has a liability to provide,
life insurance, medical, severance, or other employee welfare
benefits to any employee upon his retirement or termination of
employment, except as may be required by Section 4980B of the
Code.
(ix) Neither Trenwick nor any of its subsidiaries maintains or
contributes to a trust, organization or association described
in any of the Sections 501(c)(9), 501(c)(17) or 501(c)(2) of
the Code.
(x) Favorable determination letters have been received from
the Internal Revenue Service with respect to each Trenwick
Benefit Plan which is intended to comply with the provisions
of Section 401(a) of the Code, and each such Trenwick Benefit
Plan complies in form and in operation in all material
respects with the requirements of a "qualified plan" under
Section 401(a) of the Code.
(xi) Neither Trenwick nor any of its Subsidiaries, nor any of
their respective directors, officers, employees or, to the
knowledge of Trenwick any other "fiduciary," as such term is
defined in Section 3(21) of ERISA, has any liability for
failure to comply with ERISA or the Code for any action or
failure to act in connection with the administration or
investment of the Trenwick Benefit Plans.
(xii) There has been no act or acts which would result in a
disallowance of a deduction or the imposition of a tax
pursuant to Section 4980B, or with regard to plan years
beginning before December 31, 1988, Section 162(i) of the Code
as in effect immediately prior to the enactment of the
Technical and Miscellaneous Revenue Act of 1988, or any
regulations promulgated thereunder, whether final, temporary
or proposed. No event has occurred with respect to which
Trenwick or any of its subsidiaries could be liable for a tax
imposed by Chapter 43 of Subtitle A of the Code, or for a
civil penalty or other liability under Section 502(c) or
Section 501(l) of ERISA. Each Trenwick Benefit Plan that is a
"group health plan" as defined in Section 607 of ERISA
complies in all material respects and has been operated in
substantial compliance in all respects with Part 7 of Title I,
Subtitle B of ERISA and Subtitle K of the Code.
26
(xiii) With respect to each of the Trenwick Benefit Plans,
Trenwick has delivered to LaSalle Holdings true and complete
copies of: (a) the plan documents, including any related trust
agreements, insurance contracts or other funding arrangements,
or a written summary of the terms and conditions of the plan
if there is no written plan document; (b) the most recent
determination letter received from the Internal Revenue
Service; (c) the most recent IRS Form 5500; (d) the most
recent actuarial valuation; (e) the most recent financial
statement; (f) all material correspondence with the Internal
Revenue Service, the Department of Labor and the Pension
Benefit Guaranty Corporation with respect to the past three
plan years other than IRS Form 5500 filings and PBGC premium
payments; and (g) the most recent summary plan description.
(xiv) None of the payments contemplated by any Trenwick
Employee Benefit Plans would, in the aggregate, constitute
excess parachute payments (as defined in Section 280G of the
Code (without regard to subsection (b)(4) thereof)).
(xv) Except as disclosed in the Section 3.16(a)(xv) of the
Trenwick Disclosure Letter, the consummation of the Plan of
Reorganization (or the approval thereof by the parties'
respective shareholders) and the other transactions
contemplated by this Agreement, will not (x) entitle any
employees or directors of Trenwick or of any Trenwick Commonly
Controlled Entity, directly or indirectly to severance pay;
(y) accelerate the time of payment or vesting or trigger any
payment of compensation or benefits under, or increase the
amount payable or trigger any other material obligation
pursuant to, any of the Trenwick Benefit Plans; or (z) result
in any breach or violation of, or default under any of the
Trenwick Benefit Plans.
(b) Except as would not have a Material Adverse Effect on Trenwick,
except as set forth in Section 3.16(b) of the Trenwick Disclosure Letter and so
far as ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. English, ▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
who are senior management of Trenwick's international operations, are aware:
(i) There is no existing or threatened or pending industrial
or trade dispute involving Trenwick International Limited
("Trenwick International") and any of the employees of
Trenwick International and there are no facts known or which
would on reasonable inquiry be known to Trenwick International
which might indicate that there may be any such dispute
(excluding the Plan of Reorganization and the transactions
contemplated by this Agreement). There are no agreements or
arrangements (whether oral or in writing or existing by reason
of custom and practice and whether or not legally binding)
between Trenwick International and any trade union or other
employees' representatives or organization concerning or
affecting the employees of Trenwick International and there
are no trade unions or other employees' representatives
whom Trenwick International recognizes to any extent for
27
collective bargaining purposes nor, so far as Trenwick
International is aware, has Trenwick International done any
act which might be construed as recognition.
(ii) Trenwick International has given no notice of any
redundancies to the U.K. Secretary of State nor started
consultations with any independent trade union or employees'
representatives within the preceding period of one year in
relation to any employees of Trenwick International. No
circumstances have arisen under which Trenwick International
is likely to be required to pay damages for wrongful dismissal
or breach of contract, to make any contractual or statutory
redundancy payment or make or pay any compensation in respect
of unfair dismissal, to make any other payment under any
employment protection legislation or to reinstate or re-engage
any former employee. No circumstances have arisen under which
Trenwick International is likely to be required to pay damages
or compensation, or suffer any penalty or be required to take
corrective action or be subject to any form of discipline
under the Employment Rights ▇▇▇ ▇▇▇▇, the Trade Union and
Labor Relations (Consolidation) ▇▇▇ ▇▇▇▇, the Transfer of
Undertakings (Protection of Employment) Regulations 1981, the
Sex Discrimination ▇▇▇ ▇▇▇▇, the Equal Pay ▇▇▇ ▇▇▇▇, the
Treaty of Rome or any Directive or recommendation made
pursuant to it, the Race Relations ▇▇▇ ▇▇▇▇ or the Disability
Discrimination ▇▇▇ ▇▇▇▇. So far as Trenwick International is
aware, there are no current, pending or threatened claims of
any type against Trenwick International by any existing or
former employees or directors of Trenwick International or by
any existing or former consultants to Trenwick International.
(iii) There are no existing service or other agreements or
contracts between Trenwick International and any of its
directors or executives or employees which cannot be lawfully
terminated by six calendar months' notice or less without
giving rise to any claim for damages or compensation other
than a statutory redundancy payment or a claim for unfair
dismissal depending on the circumstances of the termination.
Trenwick International has complied with all its material
obligations under all legislation, regulations and other
requirements having the force of law (including, without
limitation, orders and awards) in connection with its
employees, directors and consultants.
(iv) Trenwick International is not involved in negotiations
(whether with employees or any trade union or other employees'
representatives) to vary the terms and conditions of
employment or engagement of any of its employees, directors or
consultants and has not made any representations, promises,
offers or proposals to any of its employees, directors or
consultants or to any trade union or other employees'
representatives concerning or affecting the terms and
conditions of employment or engagement of any of its
employees, directors or consultants.
28
(v) Trenwick International has discharged its obligations in
full in relation to salary, wages, fees, commission, bonuses,
overtime pay, holiday pay, sick pay and all other benefits and
emoluments relating to its employees, consultants and
directors in respect of all prior periods.
(vi) There are no pension, share option, share incentive, life
assurance, disability or similar schemes, arrangements or
obligations for any employees or directors of Trenwick
International, and Trenwick International has no obligations
(whether legally binding or established by custom) to pay any
pension or make any other payment after retirement or death or
otherwise to provide "relevant benefits" within the meaning of
Section 612 of the U.K. Income and Corporation Taxes Act 1988
or to make any payment for the purpose of providing such
"relevant benefits" to or in respect of any person who is now
or has been an officer or employee of Trenwick International
and is not a party to any scheme or arrangement having as its
purpose or one of its purposes the making of such payments or
the provision of such benefits.
(vii) All Employee Benefit Plans comply with and have at all
times complied with the provisions of the relevant legislation
and the requirements of the Pension Schemes Office and the
Contributions Agency affecting schemes approved under Chapter
I of Part XIV of the U.K. Income and Corporation Taxes ▇▇▇
▇▇▇▇. Trenwick International and the trustees of such schemes
have duly complied with their respective obligations under the
trust deeds and the rules thereof and under the aforementioned
legislation and requirements. All amounts due to the trustees
thereof or to any insurance company in connection therewith
have been paid.
(viii) Neither Trenwick International nor the trustees of any
pension scheme is engaged in any litigation or arbitration
proceedings in respect of any Employee Benefit Plan or any
benefit provided thereunder in relation to the employees or
former employees of Trenwick International and there are no
current submissions or referrals to the Pensions Ombudsman or
to the Occupational Pensions Advisory Service in respect of
Trenwick International or any pension scheme.
(ix) No Employee Benefit Plan in which employees or former
employees of Trenwick International participate or have
participated has been or is in the process of being (or is
proposed to be) wound up (in whole or in part) or closed to
new entrants (in whole or in part).
Section 3.17. Intellectual Property. Trenwick and its Subsidiaries own
or possess, or have all necessary rights and licenses in, all patents, patent
rights, licenses, inventions (whether or not patentable or reduced to practice),
copyrights (whether registered or unregistered), know-how (including trade
secrets and other unpatented and/or unpatentable proprietary or confidential
information, systems or procedures), registered and unregistered trademarks,
service marks and trade names and other intellectual property rights
(collectively, "Intellectual Property") necessary to conduct their business as
29
conducted and proposed to be conducted except to the extent that the failure of
Trenwick or its Subsidiaries to own or have such rights and licenses in such
Intellectual Property would not reasonably be expected to have a Material
Adverse Effect on Trenwick. Neither Trenwick nor any of its Subsidiaries have
received any unresolved notice of, or is aware of any fact or circumstance that
would give any Person a right to assert, infringement or misappropriation of, or
conflict with, asserted rights of others or invalidity or unenforceability of
any Intellectual Property owned by Trenwick or any of its Subsidiaries with
respect to any of the foregoing which, singly or in the aggregate, would
reasonably be expected to have a Material Adverse Effect on Trenwick. To the
knowledge of Trenwick, the use of such Intellectual Property to conduct the
business and operations of Trenwick and its Subsidiaries as conducted or
proposed to be conducted does not infringe on the rights of any person in any
case where such infringement would reasonably be expected to have a Material
Adverse Effect on Trenwick. To the knowledge of Trenwick, no person is
challenging, infringing on or otherwise violating any right of Trenwick or any
of its Subsidiaries with respect to any Intellectual Property owned by and/or
licensed to Trenwick or any of its Subsidiaries. Except as set forth in Section
3.17 of the Trenwick Disclosure Letter, neither the execution of this Agreement
or the Stock Option Agreements nor the consummation of the transactions
contemplated hereby or thereby will result in a loss or limitation in the rights
and licenses of Trenwick to use or enjoy the benefit of any Intellectual
Property employed by Trenwick or any of its Subsidiaries in connection with its
business as conducted or proposed to be conducted where such loss or limitation,
individually or in the aggregate, would reasonably be expected to have a
Material Adverse Effect on Trenwick. Following the Effective Date, Trenwick's
Intellectual Property may be used by New Holdings or any of its Subsidiaries,
except to the extent that failure to be so able to use Trenwick's Intellectual
Property would not have a Material Adverse Effect on New Holdings or any of its
Subsidiaries.
Section 3.18. Takeover Statutes. No "fair price," "moratorium,"
"control share acquisition" or other similar anti-takeover statute or regulation
enacted under any Delaware law is applicable to the Plans, the Stock Option
Agreements or the other transactions contemplated hereby or thereby. Trenwick
has taken all corporate action necessary to render the provisions of Section 203
of the GCL inapplicable to the Plans, the Stock Option Agreements and the other
transactions contemplated hereby and thereby.
Section 3.19. Opinion of Financial Advisor. Trenwick has received
the written opinion of ▇▇▇▇▇▇▇▇▇, Lufkin & ▇▇▇▇▇▇▇▇ ("DLJ"), dated December 16,
1999, to the effect that, as of such date, the Trenwick Exchange Ratio is fair
to Trenwick from a financial point of view, a copy of which written opinion will
be delivered to LaSalle Holdings.
Section 3.20. Rights Agreement.
(a) Trenwick and its Board of Directors have taken all necessary
actions, including the amendment to the Rights Agreement, so that the execution
and delivery of this Agreement, the LaSalle Stock Option Agreement or the
consummation of the transactions contemplated hereby and thereby will not (i)
cause any of the Rights to become exercisable, (ii) cause LaSalle Holdings or
30
New Holdings to be an Acquiring Person (as defined in the Rights Agreement) or
(iii) trigger other provisions of the Rights Agreement, including giving rise to
a Distribution Date (as defined in the Rights Agreement), and the Expiration
Date (as defined in the Rights Agreement) of the Rights shall occur immediately
prior to the Effective Time. Such amendment shall be in full force and effect
from and after the date hereof.
(b) Trenwick has taken all necessary action with respect to all of the
outstanding Rights so that, as of immediately prior to the Effective Time, (i)
none of Trenwick, New Holdings, LaSalle Holdings, LaSalle Re and Acquisition
will have any obligations under the Rights or the Rights Agreement and (ii) the
holders of the Rights will have no rights under the Rights or the Rights
Agreement.
Section 3.21. Insurance Matters.
(a) All insurance, reinsurance and coinsurance treaties or agreements,
including retrocessional agreements, to which Trenwick or any Trenwick Insurance
Subsidiary or any syndicate managed by any Trenwick Managing Agency is a party
or under which Trenwick or any Trenwick Insurance Subsidiary or any syndicate
managed by any Trenwick Managing Agency, has any existing rights, obligations or
liabilities are in full force and effect, except for such treaties or agreements
the failure to be in full force and effect of which are not reasonably expected
to have, individually or in the aggregate, a Material Adverse Effect on
Trenwick.
(b) Prior to the date hereof, Trenwick has delivered or made available
to LaSalle Holdings a true and complete copy of the most recent actuarial
reports prepared by actuaries, independent or otherwise, with respect to
Trenwick or any Trenwick Insurance Subsidiary since December 31, 1998 and all
attachments, addenda, supplements and modifications thereto (the "Trenwick
Actuarial Analyses"). The information and data furnished by Trenwick or any
Trenwick Insurance Subsidiary to its independent actuaries in connection with
the preparation of Trenwick Actuarial Analyses were accurate in all material
respects.
(c) Except as disclosed in Section 3.21 of the Trenwick Disclosure
Letter:
(i) All in-force primary insurance policies issued by Trenwick
or any of its Insurance Subsidiaries are, to the extent
required under applicable insurance laws, rules or
regulations, on forms and at rates approved by the insurance
regulatory authority of the jurisdiction where issued or have
been filed with and not objected to by such authority within
the period provided for objection, except as would not
individually or in the aggregate have a Material Adverse
Effect on Trenwick.
(ii) To the knowledge of Trenwick, except as would not
individually or in the aggregate have a Material Adverse
Effect on Trenwick, each insurance agent or solicitor,
including, without limitation, salaried employees of Trenwick
or any Insurance Subsidiary appointed as an insurance agent or
solicitor, at the time which agent or solicitor wrote, sold,
31
solicited or produced business for such insurer since January
1, 1996, was duly licensed as an insurance agent (for the type
of business written sold, solicited or produced by such
insurance agent or solicitor in the particular jurisdiction
in which such agent or solicitor wrote, sold, solicited or
produced such business).
Section 3.22. Liabilities and Reserves. Except for instances where
the failure of the following statements to be true would not reasonably be
expected to have a Material Adverse Effect on Trenwick, (a) the reserves carried
on the financial statements of each Trenwick Insurance Subsidiary for future
insurance policy benefits, losses, claims and similar purposes were, as of the
respective dates of such financial statements, in compliance with the
requirements for reserves established by the insurance departments of the
jurisdiction of such Trenwick Insurance Subsidiary or (as the case may be) by
Lloyd's, were determined in accordance with generally accepted actuarial
standards and principles consistently applied and were fairly stated in
accordance with sound actuarial and statutory accounting principles (it being
understood that no representation or warranty is made in this Agreement to the
effect that such reserves will prove to be adequate to cover the actual amount
of liabilities that are eventually paid after the date hereof); and (b) the
admitted assets of each Trenwick Insurance Subsidiary as determined under
applicable laws or under Lloyd's regulations are in an amount at least equal to
the minimum amounts required by applicable laws or regulations.
Section 3.23. Investment Company. Neither Trenwick nor any of its
Subsidiaries conducts activities of, or is otherwise deemed under applicable law
to control, an "investment adviser" as such term is defined in Section 2(a)(20)
of the Investment Company Act of 1940, as amended (the "Investment Company
Act"), whether or not registered under the Investment Advisers Act of 1940, as
amended (the "Investment Advisers Act"). Neither Trenwick nor any of its
Subsidiaries is an "investment company" as defined under the Investment Company
Act and neither Trenwick nor any of its Subsidiaries sponsors any Person that is
such an investment company.
Section 3.24. Finite Risk Reinsurance. Except as set forth in
Section 3.24 of the Trenwick Disclosure Letter, none of Trenwick's Insurance
Subsidiaries has ceded business pursuant to a reinsurance agreement that does
not meet the conditions for reinsurance accounting as provided by the Statement
of Financial Accounting Standards No. 113, "Accounting and Reporting for
Reinsurance of Short-Duration and Long-Term Contracts."
Section 3.25. Reinsurance Contracts, Coverholders and MGAs.
(a) Section 3.25 of the Trenwick Disclosure Letter contains a true and
complete list of all managing general agents ("MGAs") and coverholders with whom
each Subsidiary of Trenwick does business that have been appointed within the
twelve (12) months preceding the date of this Agreement and all in force
contracts, treaties or arrangements regarding the credit of reinsurance,
coinsurance, excess insurance (collectively, the "Reinsurance Contracts") which
generate premium income in excess of $1,000,000. Except as would not,
individually or in the aggregate, have a Material Adverse Effect on Trenwick:
32
(i) each of the foregoing Reinsurance Contracts is valid and binding in
accordance with its terms, and is in full force and effect and (ii) neither the
Subsidiaries of Trenwick nor, to the knowledge of Trenwick, or other party
thereto, is in default in any material respect with respect to any such
Reinsurance Contract, nor to the knowledge of Trenwick does any condition exist
that with notice or lapse of time or both would constitute such a material
default thereunder. Except as set forth in Section 3.25 of the Trenwick
Disclosure Letter, none of the contracts, treaties or arrangements which
generate premium income in excess of $1,000,000 involving the MGAs or
coverholders with whom each Subsidiary of Trenwick does business contain "change
of control" provisions and no such Reinsurance Contract contains any provision
providing that any such other party thereto may terminate, cancel or commute the
same by reason of the transactions contemplated by this Agreement or any other
provision which would be altered or otherwise become applicable by reason of
such transactions, and no party has given notice of termination, cancellation or
commutation of any such Reinsurance Contract or that it intends to terminate,
cancel or commute any such Reinsurance Contract as a result of the transactions
contemplated hereby.
(b) Except as set forth in Section 3.25 of the Trenwick Disclosure
Letter, Trenwick America Reinsurance Company ("TARCO") is entitled under
applicable insurance laws, rules and regulations to take credit in its statutory
financial statements in accordance with Chapter 22 of the NAIC Accounting
Practices and Procedures Manual for Property and Casualty Insurance Companies as
in effect on the date hereof, with respect to those Reinsurance Contracts to
which it is a party and all such amounts are properly reflected in the statutory
financial statements of TARCO. Except as set forth in Section 3.25 of the
Trenwick Disclosure Letter, Trenwick International is entitled under applicable
insurance laws, rules and regulations to take credit in its statutory financial
statements in accordance with Lloyd's regulations as in effect on the date
hereof, with respect to those Reinsurance Contracts to which it is a party and
all such amounts are properly reflected in the statutory financial statements of
Trenwick International. Each of Trenwick, TARCO and Trenwick International has
no knowledge of any disputes as to reinsurance or retrocessional coverage under,
or any terms of provisions of, any such Reinsurance Contract except as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Trenwick. To the knowledge of Trenwick and TARCO and Trenwick
International, the financial condition of any other party to any such
Reinsurance Contract is not impaired to the extent that a default thereunder
could reasonably be expected to occur.
Section 3.26. Derivatives. As of the date hereof, other than as set
forth in Section 3.26 of the Trenwick Disclosure Letter, neither Trenwick nor
any of its Subsidiaries is a party to any futures or option contracts, swaps,
▇▇▇▇▇▇ or similar instruments which, individually or in the aggregate, could
have a Material Adverse Effect on Trenwick.
Section 3.27. Related Party Transactions. Except as set forth in
Section 3.27 of the Trenwick Disclosure Letter, since September 30, 1999, there
have been no transactions, agreements, arrangements or understandings between
Trenwick and its Subsidiaries, on the one hand, and Trenwick affiliates (other
than wholly-owned Subsidiaries of Trenwick) or other Person, on the other hand,
in existence as of the date hereof that are or would be required to be disclosed
in the Trenwick SEC Reports in accordance with Item 404 of Regulation S-K under
the Securities Act.
33
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF LASALLE HOLDINGS
LaSalle Holdings hereby represents and warrants to Trenwick and the
Minority Shareholders that as of the date of the Original Agreement (except to
the extent that a representation or warranty speaks as of an earlier date), with
references to "the date hereof" or the "date of this Agreement" in this Article
4 being deemed to be references to the date of the Original Agreement:
Section 4.1. Corporation; Organization.
(a) Except as set forth in Section 4.1(a) of the LaSalle Disclosure
Letter, each of LaSalle Holdings and its Subsidiaries is a company duly
organized, validly existing and in good standing (with respect to jurisdictions
that recognize such concept) under the laws of the jurisdiction of its
organization. Each of LaSalle Holdings and its Subsidiaries (i) is qualified,
licensed or domesticated as a foreign company in all jurisdictions where such
qualification, license or domestication is required to own and operate its
properties and conduct its business in the manner and at the places presently
conducted; (ii) holds all franchises, grants, licenses, certificates, permits,
consents and orders, all of which are valid and in full force and effect, from
all applicable Bermuda and foreign regulatory authorities necessary to own and
operate its properties and to conduct its business in the manner and at the
places presently conducted; and (iii) has full power and authority (corporate
and other) to own, lease and operate its respective properties and assets and to
carry on its business as presently conducted and as proposed to be conducted,
except where the failure to be so qualified, licensed or domesticated or to hold
such franchises, grants, licenses, certificates, permits, consents and orders or
to have such power and authority would not, when taken together with all other
such failures, reasonably be expected to have a Material Adverse Effect on
LaSalle Holdings. LaSalle Holdings has furnished to Trenwick complete and
correct copies of its memorandum of association and bye-laws as in effect on the
date hereof. Such memorandum of association and bye-laws are in full force and
effect and no other constitutional documents are applicable to or binding upon
LaSalle Holdings.
(b) LaSalle Holdings conducts its reinsurance operations through the
Subsidiaries set forth in Section 4.1(b) of the LaSalle Disclosure Letter
(collectively, the "LaSalle Reinsurance Subsidiaries"). Each of the LaSalle
Reinsurance Subsidiaries is (i) duly licensed or authorized as a reinsurer in
its jurisdiction of organization or duly licensed to operate in the reinsurance
business (as applicable) in its jurisdiction of organization, (ii) duly licensed
or authorized as a reinsurer in each other jurisdiction where it is required to
be so licensed or authorized or duly licensed to operate in the reinsurance
business in each other jurisdiction where it is required to be so licensed and
(iii) duly authorized in its jurisdiction of organization and each other
applicable jurisdiction to write each line of business currently written by such
34
LaSalle Reinsurance Subsidiaries, except, in any such case, where the failure to
be so licensed or authorized is not reasonably expected to have, individually or
in the aggregate, a Material Adverse Effect on LaSalle Holdings. Except as set
forth in Section 4.1(b) of the LaSalle Disclosure Letter, LaSalle Holdings has
made all required filings under applicable insurance holding company statutes
except where the failure to file is not reasonably expected to have a Material
Adverse Effect on LaSalle Holdings.
Section 4.2. Authority; Approval and Fairness.
(a) LaSalle Holdings has all requisite corporate power and authority to
execute and deliver this Agreement and, subject to the due approval and adoption
of this Agreement by its shareholders, to perform its obligations hereunder and
consummate the transactions contemplated hereby. LaSalle Holdings has all
requisite corporate power and authority to enter into the Stock Option
Agreements and to consummate the transactions contemplated thereby. The
execution and delivery of this Agreement by LaSalle Holdings, the performance by
LaSalle Holdings of its obligations hereunder and the consummation by LaSalle
Holdings of the transactions contemplated hereby have been duly authorized by
all necessary corporate action on the part of LaSalle Holdings, subject only to
compliance with the provisions of Section 99 of the Companies Act. No other
corporate proceedings on the part of LaSalle Holdings are necessary for the
execution and delivery of this Agreement by LaSalle Holdings and, subject to
compliance with the provisions of Section 99 of the Companies Act, the
performance by LaSalle Holdings of its obligations hereunder and the
consummation by LaSalle Holdings of the transactions contemplated hereby. This
Agreement and the Stock Option Agreements have been duly executed and delivered
by LaSalle Holdings and, assuming the due authorization, execution and delivery
hereof and thereof by Trenwick, New Holdings and Acquisition, and subject to the
provisions of Section 99 of the Companies Act constitutes the legal, valid and
binding obligations of LaSalle Holdings, enforceable against LaSalle Holdings in
accordance its terms, subject with respect to enforceability to the effect of
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or
similar laws now or hereafter affecting the enforcement of creditors' rights
generally and to the availability of equitable remedies.
(b) The Board of Directors of LaSalle Holdings (the "LaSalle Board")
(i) has unanimously (by all directors present at a meeting duly called and held)
declared that it considers this Agreement, the Schemes of Arrangement and the
other transactions contemplated hereby to be advisable and in the best interests
of LaSalle Holdings and its shareholders and (ii) has authorized and approved in
all respects this Agreement, the Plans and the other transactions contemplated
hereby.
Section 4.3. Capital Structure.
(a) As of the date hereof, the authorized share capital of LaSalle
Holdings is $100,000,000 comprised of 100,000,000 shares with a par value of
$1.00 per share. As of December 15, 1999, (i) 15,603,652 LaSalle Holdings Shares
were issued and outstanding, (ii) no LaSalle Holdings Shares were held as
treasury shares or by Subsidiaries of LaSalle Holdings and (ii) 3,000,000 Series
A Preferred Shares were issued and outstanding. In addition, there are 4,000,000
Series B Preferred Shares of LaSalle Holdings reserved for issuance pursuant
35
to the CatEPut, which shares are convertible into LaSalle Holdings Shares.
Section 4.3(a) of the LaSalle Disclosure Letter sets forth each plan,
arrangement or agreement pursuant to which options or stock appreciation rights
with respect to LaSalle Holdings Shares or shares of LaSalle Re may be granted
or under which such options or stock appreciation rights have been granted and
are outstanding (the "LaSalle Option Plans") and in the aggregate the maximum
number of options and stock appreciation rights outstanding as of the date
hereof and the class and number of LaSalle Holdings Shares or shares of LaSalle
Re reserved for issuance pursuant to the plan, arrangement or agreement (such
options and rights being herein collectively referred to as the "LaSalle
Holdings Options" and the "LaSalle Re Options," as the case may be), together
with a listing of the aggregate number of such LaSalle Holdings Options and
LaSalle Re Options which shall vest at the Effective Time as a result of the
Schemes of Arrangement. Except as set forth in Section 4.3(a) of the LaSalle
Disclosure Letter, each of the outstanding shares of each Subsidiary of LaSalle
Holdings, other than the Non-Voting Shares owned by the Minority Shareholders,
is directly or indirectly owned by LaSalle Holdings, free and clear of all
Liens.
(b) Except as described in Section 4.3(b) of the LaSalle Disclosure
Letter, as of the date hereof, no Voting Debt of LaSalle Holdings or any of its
Subsidiaries is issued or outstanding.
(c) Except as described in Section 4.3(a), (b) or (c) of the LaSalle
Disclosure Letter, as of the date hereof, there are no options, warrants, calls,
rights, commitments or agreements of any character to which LaSalle Holdings or
any of its Subsidiaries is a party or by which any of them is bound obligating
LaSalle Holdings or any of its Subsidiaries to issue, deliver or sell, or cause
to be issued, delivered or sold, additional shares or any Voting Debt or
obligating LaSalle Holdings or any of its Subsidiaries to grant, extend or enter
into any such option, warrant, call, right, commitment or agreement. Except as
set forth in this Agreement or in Section 4.3(c) of the LaSalle Disclosure
Letter, as of the date hereof, there are no outstanding contractual obligations
of LaSalle Holdings or any of its Subsidiaries to repurchase, redeem or
otherwise acquire any shares of LaSalle Holdings or any of its Subsidiaries.
(d) Except as described in Section 4.3(d) of the LaSalle Disclosure
Letter or as specifically described in this Agreement and except for quarterly
dividends in an amount not in excess of $0.375 per LaSalle Holdings Share and
$1.0938 per Series A Preferred Share, since June 30, 1999, LaSalle Holdings has
not (i) made or agreed to make any share split or share dividend, or issued or
permitted or agreed to permit to be issued any shares, or securities exercisable
for or convertible into shares, of LaSalle Holdings other than pursuant to and
as required by the terms of any LaSalle Holdings Option; (ii) repurchased,
redeemed or otherwise acquired any shares of LaSalle Holdings; or (iii)
declared, set aside, made or paid to the shareholders of LaSalle Holdings
dividends or other distributions on the outstanding shares of LaSalle Holdings.
(e) Except as described in Section 4.3(e) of the LaSalle Disclosure
Letter or as specifically described in this Agreement and except for quarterly
dividends in an amount not in excess of $0.375 per Minority Share, since
36
June 30, 1999, LaSalle Re has not (i) made or agreed to make any share split or
share dividend, or issued or permitted or agreed to permit to be issued any
shares, or securities exercisable for or convertible into shares, of LaSalle Re
other than pursuant to and as required by the terms of any LaSalle Re Option;
(ii) repurchased, redeemed or otherwise acquired any shares of LaSalle Re; or
(iii) declared, set aside, made or paid to the shareholders of LaSalle Re (other
than LaSalle Holdings) dividends or other distributions on the outstanding
shares of LaSalle Re.
Section 4.4. SEC Reports; Financial Statements. Except as set
forth in Section 4.4 of the LaSalle Disclosure Letter,
(a) LaSalle Holdings has delivered or made available to Trenwick a true
and complete copy of each report, schedule, registration statement and
definitive proxy statement or information statement (including exhibits) filed
by LaSalle Holdings with the SEC in respect of its fiscal years ending September
30, 1997 and 1998 and its quarters ending after September 30, 1998 under the
Securities Act and the Exchange Act and will deliver to Trenwick promptly upon
the filing thereof with the SEC all such reports, schedules, registration
statements and proxy statements (including exhibits) as may be filed after the
date hereof and prior to the Effective Time (as such documents have since the
time of their filing been amended or may after their filing, if after the date
hereof, be amended, the "LaSalle SEC Reports"), which are or will be all the
documents that LaSalle Holdings was or will be required to file with the SEC.
Except as disclosed in Section 4.4(a) of the LaSalle Disclosure Letter, as of
their respective dates, the LaSalle SEC Reports complied or will comply in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and the rules and regulations of the SEC thereunder
applicable to the LaSalle SEC Reports, and none of the LaSalle SEC Reports
contained or will contain any untrue statement of a material fact or omitted or
will omit to state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made or will be made, not misleading.
(b) As of their respective dates, the financial statements of LaSalle
Holdings included or to be included in the LaSalle SEC Reports (the "LaSalle
Financial Statements") complied or will comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC with respect thereto and present or will present
fairly in all material respects the consolidated financial position of LaSalle
Holdings and its Subsidiaries and the consolidated results of operations,
changes in shareholders' equity and cash flows of LaSalle Holdings and its
Subsidiaries as of the dates and for the periods indicated, in accordance with
GAAP applied on a consistent basis, subject in the case of interim financial
statements to normal year-end adjustments and except for the absence of certain
footnote information in the unaudited statements.
(c) Except as set forth in, or arising out of facts or circumstances
disclosed in, filings by LaSalle Holdings with the SEC prior to the date hereof,
LaSalle Holdings and its Subsidiaries have no liabilities, debts, claims or
obligations of any nature on the date hereof, whether accrued, absolute, direct
or indirect, contingent or otherwise, whether due or to become due, that would
be required to be included on a balance sheet prepare in accordance with
37
GAAP ("LaSalle Liabilities"), and there is no existing condition or set of
circumstances which would reasonably be expected to result in a LaSalle
Liability, except for (i) LaSalle Liabilities incurred in the ordinary and usual
course of business and consistent with past practice since June 30, 1998, (ii)
LaSalle Liabilities incurred in connection with or as a result of the
transactions contemplated by this Agreement and (iii) LaSalle Liabilities that
would not reasonably be expected to have a Material Adverse Effect on LaSalle
Holdings.
Section 4.5. Absence of Certain Changes or Events. Except in
connection with this Agreement, the Plans, the Stock Option Agreements and the
transactions contemplated hereby and thereby, as disclosed in the LaSalle SEC
Reports filed and publicly available prior to the date of this Agreement (the
"Filed LaSalle SEC Reports") since the date of the most recent audited financial
statements included in the Filed LaSalle SEC Reports, LaSalle Holdings and its
Subsidiaries have conducted their business in the ordinary course consistent
with past practice, and there has not occurred (i) any event or change having
individually or in the aggregate a Material Adverse Effect on LaSalle Holdings,
(ii) any declaration, setting aside or payment of any dividend or other
distribution (whether in cash, stock or property) with respect to any of LaSalle
Holdings's outstanding capital stock, other than regular quarterly dividends in
an amount payable in cash not in excess of $1.0938 per Series A Preferred Share
and quarterly dividends in an amount payable in cash not in excess of $0.375 per
LaSalle Holdings Share, Voting Share and Non-Voting Share and dividends paid by
wholly owned Subsidiaries, (iii) (A) any granting by LaSalle Holdings or any of
its Subsidiaries to any current or former director or officer of LaSalle
Holdings or its Subsidiaries of any increase in compensation, bonus or other
benefits, except for normal increases in the ordinary course of business, (B)
any granting by LaSalle Holdings or any of its Subsidiaries to any such current
or former director or officer of any increase in severance or termination pay or
(C) any entry by LaSalle Holdings or any of its Subsidiaries into, or any
amendments of, any employment, deferred compensation, consulting, severance,
termination or indemnification agreement with any such current or former
director or officer, (iv) any tax election that individually or in the aggregate
would have a Material Adverse Effect on LaSalle Holdings or any of its tax
attributes or any settlement or compromise of any material income tax liability,
or (v) any change in accounting methods, principles or practices by LaSalle
Holdings or any of its Subsidiaries materially affecting their assets,
liabilities or business, except insofar as may have been required or permitted
by a change in applicable accounting principles (including SAP).
Section 4.6. Certain Fees. No finder, broker, agent, financial
advisor or other intermediary, other than Lazard Freres & Co. LLC, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Inc. and Aon Capital Markets, have acted on behalf of LaSalle Holdings in
connection with this Agreement or the transactions contemplated hereby or is
entitled to any payment in connection herewith. LaSalle Holdings has provided to
Trenwick copies of LaSalle Holdings' engagement letters with Lazard Freres & Co.
LLC, ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Inc. and Aon Capital Markets in connection with this
Agreement and the transactions contemplated hereby.
Section 4.7. No Defaults. Neither LaSalle Holdings nor any of its
Subsidiaries is in default or violation (and no event has occurred which with
notice or lapse of time or both would constitute a default or violation) of its
memorandum of association or bye-laws or other governing document or any
material agreement, mortgage, indenture, debenture, trust, lease, license or
38
other instrument or obligation to or by which it or any of its properties is
subject or bound (the "LaSalle Instruments"), except for such defaults or
violations as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on LaSalle Holdings. Except as set forth in
Section 4.7 of the LaSalle Disclosure Letter, the execution, delivery and
performance of this Agreement and the taking of any other action contemplated by
this Agreement will not (i) result in any violation of or be in conflict with or
constitute a breach or default (with or without notice or lapse of time or both)
under (a) the memorandum of association or bye-laws of LaSalle Holdings or its
Subsidiaries or (b) any of the other LaSalle Instruments, except for any such
violation of, conflict with, breach of or default under which would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on LaSalle Holdings, (ii) result in or constitute an event
entitling any party to a LaSalle Holdings Instrument to effect an acceleration
of the maturity of any indebtedness of LaSalle Holdings or any of its
Subsidiaries or an increase in the rate of interest presently in effect with
respect to such indebtedness, except for any such accelerations or increases
which would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on LaSalle Holdings or (iii) result in the
creation of any Lien upon any of the properties or assets of LaSalle Holdings,
except for Permitted Liens and any Liens which would not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect on LaSalle
Holdings.
Section 4.8. Consents. Except as set forth in Section 4.8 of the
LaSalle Disclosure Letter and except for compliance with the provisions of
Section 99 of the Companies Act, the approval of Lloyd's, the consent of the
Court to the Plans and the filing of the order or orders of the Court pursuant
to Section 2.2 of this Agreement, no Consent is required on the part of LaSalle
Holdings or any of its Subsidiaries in connection with the execution, delivery
and performance by LaSalle Holdings of this Agreement and the consummation by
LaSalle Holdings of the transactions contemplated hereby, except those required
by (i) compliance with any applicable requirements of the HSR Act, (ii) United
States federal and state securities or "Blue Sky" laws and (iii) where failure
to obtain such Consent would not reasonably be expected to have a Material
Adverse Effect on LaSalle Holdings.
Section 4.9. Compliance with Applicable Law. Each of LaSalle Holdings
and its Subsidiaries is in compliance with all licenses, permits and other
authorizations, domestic or foreign, necessary to conduct its respective
business, except where failure to have or comply with such licenses, permits and
authorizations would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect on LaSalle Holdings. Neither LaSalle
Holdings nor any of its Subsidiaries is in default or violation (and no event
has occurred which with notice or the lapse of time or both would constitute a
default or violation) of any judgment, decree, order, law, statute, rule or
regulation of any Governmental Authority, except for such defaults or violations
as would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect on LaSalle Holdings. Subject to obtaining the Consents
referred to in Section 4.8, the execution, delivery and performance of this
Agreement by LaSalle Holdings and the consummation by LaSalle Holdings of the
transactions contemplated hereby prior to the date or dates as of which the
representations and warranties herein are made or deemed made, will not result
in any default or violation of any judgment, decree, order, law, statute, rule
or regulation of any Governmental Authority applicable to LaSalle Holdings or
its Subsidiaries, except for such defaults or violations as would not reasonably
be expected to have, individually or in the aggregate, a Material Adverse Effect
on LaSalle Holdings.
39
Section 4.10. Information Supplied. None of the information
supplied or to be supplied by LaSalle Holdings for inclusion or incorporation by
reference in the Form S-4 to be filed with the SEC by New Holdings relating to
the New Holdings Shares comprising LaSalle Consideration and Trenwick
Consideration will, at the time the Form S-4 is filed with the SEC, at any time
it is amended or supplemented or at the time it becomes effective under the
Securities Act, contain any untrue statement of a material fact or omit to state
any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which such statements
were made, not misleading. The letters to shareholders, notices of meetings,
proxy statements and forms of proxies to be distributed to shareholders of
LaSalle Holdings and stockholders of Trenwick, respectively, in connection with
the Plans and the transactions contemplated hereby, except information supplied
by Trenwick in writing for inclusion in the Joint Proxy Statement, will not, as
of the date the Joint Proxy Statement is first mailed to such shareholders and
on the date of the meetings of LaSalle Holdings' shareholders or Trenwick's
stockholders, as the case may be, and the date of any postponement or
adjournment thereof, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading. All documents that LaSalle Holdings is responsible for
filing with any Governmental Authority in connection with the transactions
contemplated hereby will comply as to form in all material respects with the
provisions of any applicable law.
Section 4.11. Material Contracts. Except as set forth in Section
4.11 of the LaSalle Disclosure Letter:
(a) All of the contracts of LaSalle Holdings and its Subsidiaries that
are required to be described in the LaSalle SEC Reports or to be filed as
exhibits thereto are described in the LaSalle SEC Reports or filed as exhibits
thereto and are in full force and effect.
(b) Neither LaSalle Holdings nor any of its Subsidiaries is, as of the
date hereof, party to any agreement containing any provision or covenant
limiting in any material respect the ability of LaSalle Holdings or any of its
Subsidiaries (or New Holdings or any of its Subsidiaries subsequent to the
Effective Time) to (i) sell any products or services of or to any other Person,
(ii) engage in any line of business in any geographical area or (iii) compete
with or to obtain products or services from any Person or limiting the ability
of any Person to provide products or services to LaSalle Holdings or any of its
Subsidiaries.
(c) Neither LaSalle Holdings nor any of its Subsidiaries is a party to
or bound by any contract, agreement or arrangement which would cause the rights
or obligations of any party thereto to change in the event of the Plans, except
for any such contract, agreement or arrangement which would not reasonably be
expected to have, individually or in the aggregate, a Material Adverse Effect on
LaSalle Holdings.
40
Section 4.12. Taxes. Except as provided in Section 4.12 of the
LaSalle Disclosure Letter:
(a) To LaSalle Holdings' knowledge, neither LaSalle Holdings nor any of
its Subsidiaries has, nor has it had, any income which is, or has been, subject
to the United States federal income tax as income which is effectively connected
with the conduct of a trade or business within the United States, within the
meaning of Section 882(a)(1) of the Code. LaSalle Holdings and its Subsidiaries
have filed or caused to be filed with the appropriate United States federal,
state, local, foreign and other Governmental Authorities, all Tax returns,
information returns and reports required to be filed on or prior to the date
hereof (taking into account all valid extensions). All such Tax returns,
information returns and reports are complete and accurate in all material
respects.
(b) LaSalle Holdings and its Subsidiaries have paid in full or made
adequate provision (in accordance with GAAP) for the payment of all Taxes shown
to be due on the Tax returns referred to in Section 4.12(a). All material
written assessments of Taxes due and payable by or on behalf of LaSalle Holdings
or any of its Subsidiaries have either been paid or provided for (in accordance
with GAAP) or are being contested in good faith by appropriate proceedings.
(c) There are no material Tax claims pending against LaSalle Holdings
or any of its Subsidiaries and LaSalle Holdings does not know of any threatened
claim for Tax deficiencies or any basis for such claims, no material issues have
been raised in any examination by any taxing authority with respect to LaSalle
Holdings or any of its Subsidiaries which, by application of similar principles,
reasonably could be expected to result in a proposed deficiency for any other
period not so examined, and there are not now in force any waivers or agreements
by LaSalle Holdings or any of its Subsidiaries for the extension of time for the
assessment of any material Tax, nor has any such waiver or agreement been
requested by any taxing authority. Neither LaSalle Holdings nor any of its
Subsidiaries has any liability for any material United States federal, state,
local, foreign or other Taxes of any corporation or entity other than LaSalle
Holdings and its Subsidiaries.
(d) There are no Liens on any of the assets of LaSalle Holdings or any
of its Subsidiaries that arose in connection with any failure (or alleged
failure) to pay any Taxes (other than Taxes that are not due as of the date
hereof).
(e) LaSalle Holdings and its Subsidiaries have withheld and paid all
United States federal, state, local, foreign and other Taxes required to have
been withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third party.
(f) To LaSalle Holdings' knowledge, Section 4.12(f) of the LaSalle
Disclosure Letter discloses, with respect to the year ended September 30, 1998
and for the period commencing October 1, 1998 and ending on the date of the
LaSalle Disclosure Letter, (i) each insurance or reinsurance transaction by
LaSalle Holdings or any of its Subsidiaries directly with shareholders of
LaSalle Holdings and (ii) each insurance or reinsurance transaction by LaSalle
Holdings or any of its Subsidiaries directly or indirectly with Persons related
to shareholders of LaSalle Holdings and not disclosed in clause (i) above, which
would cause LaSalle Holdings or any of its Subsidiaries to have any "related
person insurance income" within the meaning of Section 953(c)(2) of the Code.
41
(g) To LaSalle Holdings' knowledge, LaSalle Holdings and its
Subsidiaries did not have for the year ended September 30, 1998, and LaSalle
Holdings does not expect LaSalle Holdings or any of its Subsidiaries to have for
the period ending at the Effective Time (treating such period as if it were a
taxable year), "related person insurance income" within the meaning of Section
953(c)(2) of the Code in excess of the exceptions provided in Sections
953(c)(3)(A) and (B) of the Code.
(h) To LaSalle Holdings' knowledge, neither LaSalle Holdings nor any of
its Subsidiaries is, nor has LaSalle Holdings or any of its Subsidiaries ever
been, a "controlled foreign corporation" within the meaning of Section 957(a) or
957(b) of the Code.
(i) A representation with respect to Taxes contained in this Section
4.12 shall be deemed to be accurate unless an inaccuracy contained therein would
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on LaSalle Holdings.
Section 4.13. Litigation. Except as disclosed in the LaSalle SEC
Reports filed prior to the date hereof or in Section 4.13 of the LaSalle
Disclosure Letter, there are no actions, suits, claims, proceedings or
investigations pending against or, to the knowledge of LaSalle Holdings,
threatened against or affecting, LaSalle Holdings or any of its Subsidiaries or
any of their respective properties before any Governmental Authority or
otherwise which (a) would be expected to have, individually or in the aggregate,
a Material Adverse Effect on LaSalle Holdings, (b) in any manner challenges or
seeks to prevent, enjoin, alter or delay the transactions contemplated hereby or
(c) alleges criminal action or inaction. As of the date hereof, neither LaSalle
Holdings nor its Subsidiaries or any of their respective properties is subject
to any order, writ, judgment, injunction, decree, determination or award having,
or which would reasonably be expected to have, a Material Adverse Effect on
LaSalle Holdings or which would prevent or delay the consummation of the
transactions contemplated hereby. Except as disclosed in the LaSalle SEC Reports
filed prior to the date hereof, there are no pending or, to the knowledge of
LaSalle Holdings, threatened claims for indemnification by LaSalle Holdings or
any of its Subsidiaries in favor of directors, officers, employees and agents of
LaSalle Holdings or any of its Subsidiaries.
Section 4.14. Title to Properties; Leases. Except as set forth in
Section 4.14(a) of the LaSalle Disclosure Letter, each of LaSalle Holdings and
its Subsidiaries has good and marketable title to, and is the lawful owner of,
or has the right to use pursuant to a license or otherwise, all of the tangible
42
and intangible assets, properties and rights used in its businesses and all
tangible and intangible assets, properties and rights reflected on the balance
sheet of LaSalle Holdings dated June 30, 1999 or acquired since June 30, 1999,
free and clear of all Liens (other than Permitted Liens) and material defects.
LaSalle Holdings and its Subsidiaries own no real property. Section 4.14(c) of
the LaSalle Disclosure Letter sets forth all material real property and personal
property leases of LaSalle Holdings and its Subsidiaries. All such leases are
valid, binding and enforceable against LaSalle Holdings or its Subsidiaries
(and, to the knowledge of LaSalle Holdings and its Subsidiaries, each other
party thereto) in accordance with their respective terms, and there does not
exist, under any lease of real property or personal property, any material
defect or any event which, with notice or lapse of time or both, would
constitute a material default by the LaSalle Holdings or its Subsidiaries, as
the case may be, or, to the knowledge of LaSalle Holdings and its Subsidiaries,
by any other party thereto.
Section 4.15. Approval of Schemes of Arrangement. Other than (a)
the affirmative vote of the holders of at least seventy-five percent (75%) of
the LaSalle Holdings Shares that are represented and voted, either in person or
by proxy, at the shareholder meeting and class meeting called for the purpose of
approving and adopting this Agreement and the LaSalle Holdings Scheme of
Arrangement, which holders must also constitute a majority of the record holders
who are present and voting, either in person or by proxy, at each such meeting,
and (b) the affirmative vote of the holders of at least seventy-five percent
(75%) of the Non-Voting Shares that are represented and voted, either in person
or by proxy, at the shareholder meeting and class meeting called for the purpose
of approving and adopting this Agreement and the LaSalle Re Scheme of
Arrangement, which holders must also constitute a majority of the record holders
who are present and voting, either in person or by proxy, at each such meeting,
there is no other vote, consent or approval of the holders of any class of
shares of LaSalle Holdings or LaSalle Re necessary to approve and adopt this
Agreement, the Schemes of Arrangement and the transactions contemplated hereby.
Section 4.16. Employees.
(a) Section 4.16(a) of the LaSalle Disclosure Letter lists, as of the
date hereof, all employment contracts and similar arrangements between LaSalle
Holdings or any of its Subsidiaries and their respective executive officers and
all plans and arrangements pursuant to which LaSalle Holdings or any of its
Subsidiaries is obligated to make any payment or confer any material benefit
upon any officer, director, employee or agent of LaSalle Holdings or any of its
Subsidiaries as a result of or in connection with any of the transactions
contemplated by this Agreement or any transaction or transactions resulting in a
change of control of LaSalle Holdings or any of its Subsidiaries (including as a
result of a termination of employment in connection with any of such events).
Except as described in Section 4.16(a) of the LaSalle Disclosure Letter and
except as would not reasonably be expected to have a Material Adverse Effect on
LaSalle Holdings, (i) LaSalle Holdings and its Subsidiaries have complied with
all laws relating to the employment of labor, including provisions thereof
relating to wages, hours, equal opportunity and collective bargaining, (ii) no
labor dispute with employees of LaSalle Holdings or any of its Subsidiaries
exists or, to the knowledge of LaSalle Holdings, is threatened, (iii) each
Employee Benefit Plan maintained by LaSalle Holdings or any of its Subsidiaries
43
(each a "LaSalle Employee Benefit Plan") conforms to, and its administration is
in conformity with, all applicable laws, no liability has been or is expected to
be incurred by LaSalle Holdings or any of its Subsidiaries with respect to any
LaSalle Employee Benefit Plan, except as expressly provided by such plan, (iv)
no LaSalle Employee Benefit Plan is subject to ERISA, (v) LaSalle Holdings has
made available to Trenwick a true and correct copy of each of the LaSalle
Employee Benefit Plans and all applicable trust agreements and all contracts
relating thereto or to the funding thereof, (vi) all LaSalle Employee Benefit
Plans intended to satisfy applicable Tax qualification requirements, or other
requirements necessary to secure favorable Tax or other legal treatment, comply
in all material respects with such requirements and (vii) adequate accruals for
all obligations under the LaSalle Employee Benefit Plans are reflected in the
LaSalle Financial Statements. Except as described in Section 4.16(a) of the
LaSalle Disclosure Letter, no agreement, contract or arrangement to which
LaSalle Holdings or any of its Subsidiaries is a party would result in a payment
that would not be deductible as a result of Section 280G of the Code.
(b) Except as set forth in Section 4.16(b) of the LaSalle Disclosure
Letter, neither LaSalle Holdings nor any of its Subsidiaries is a party to any
collective bargaining or other labor union contract applicable to Persons
employed by LaSalle Holdings or any of its Subsidiaries, no collective
bargaining agreement is being negotiated by LaSalle Holdings or any of its
Subsidiaries and LaSalle Holdings has no knowledge of any activities or
proceedings of any labor union to organize any of their respective employees.
There is no labor dispute, strike or work stoppage against LaSalle Holdings or
any of its Subsidiaries pending or, to LaSalle Holdings' knowledge, threatened
which may interfere with the respective business activities of LaSalle Holdings
or any of its Subsidiaries, except where such dispute, strike or work stoppage
would not reasonably be expected to have a Material Adverse Effect on LaSalle
Holdings.
(c) Except as disclosed in the Section 4.16(c) of the LaSalle
Disclosure Letter, the consummation of the Schemes of Arrangement (or the
approval thereof by the parties' respective shareholders) and the other
transactions contemplated by this Agreement, will not (x) entitle any employees
or directors of LaSalle or of any LaSalle Holdings Commonly Controlled Entity,
directly or indirectly to severance pay; (y) accelerate the time of payment or
vesting or trigger any payment of compensation or benefits under, or increase
the amount payable or trigger any other material obligation pursuant to, any of
the LaSalle Benefit Plans; or (z) result in any breach or violation of, or
default under any of the LaSalle Benefit Plans.
Section 4.17. Intellectual Property. LaSalle Holdings and its
Subsidiaries own or possess, or have all necessary rights and licenses in, all
Intellectual Property necessary to conduct their business as conducted and
proposed to be conducted except to the extent that the failure of LaSalle
Holdings or its Subsidiaries to own or have such rights and licenses in such
Intellectual Property would not reasonably be expected to have a Material
Adverse Effect on LaSalle Holdings. Neither LaSalle Holdings nor any of its
Subsidiaries have received any unresolved notice of, or is aware of any fact or
circumstance that would give any Person a right to assert, infringement or
misappropriation of, or conflict with, asserted rights of others or invalidity
or unenforceability of any Intellectual Property owned by LaSalle Holdings or
any of its Subsidiaries with respect to any of the foregoing which, singly or in
the aggregate, would reasonably be expected to have a Material Adverse Effect on
LaSalle Holdings. To the knowledge of LaSalle Holdings, the use of such
Intellectual Property to conduct the business and operations of LaSalle Holdings
and its Subsidiaries as conducted or proposed to be conducted does not infringe
on the rights of any person in any case where such infringement would reasonably
be expected to have a Material Adverse Effect on LaSalle Holdings. To the
knowledge of LaSalle Holdings, no person is challenging, infringing on or
44
or otherwise violating any right of LaSalle Holdings or any of its Subsidiaries
with respect to any Intellectual Property owned by and/or licensed to LaSalle
Holdings or any of its Subsidiaries. Except as set forth in Section 4.17 of the
LaSalle Disclosure Letter, neither the execution of this Agreement or the
LaSalle Stock Option Agreement nor the consummation of the transactions
contemplated hereby or thereby will result in a loss or limitation in the rights
and licenses of LaSalle Holdings to use or enjoy the benefit of any Intellectual
Property employed by LaSalle Holdings or any of its Subsidiaries in connection
with its business as conducted or proposed to be conducted where such loss or
limitation, individually or in the aggregate, would reasonably be expected to
have a Material Adverse Effect on LaSalle Holdings. Following the Effective
Date, LaSalle Holdings Intellectual Property may be used by New Holdings or any
of its Subsidiaries, except to the extent that failure to be so able to use
LaSalle's Intellectual Property would not have a Material Adverse Effect on New
Holdings or any of its Subsidiaries.
Section 4.18. Takeover Statutes. No "fair price," "moratorium,"
"control share acquisition" or other similar anti-takeover statute or regulation
enacted under any Bermuda law is applicable to the Plans, the Stock Option
Agreements or the other transactions contemplated hereby or thereby.
Section 4.19. Opinions of Financial Advisors. The LaSalle Board has
received the separate opinions of Lazard Freres & Co. LLC and ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Inc., dated December 16, 1999, to the effect that, as of such date, the
LaSalle Exchange Ratio is fair to the holders of LaSalle Holdings Shares from a
financial point of view, copies of the written opinions of which will be
delivered to Trenwick.
Section 4.20. Insurance Matters.
(a) All insurance, reinsurance and coinsurance treaties or agreements,
including retrocessional agreements, to which LaSalle Holdings or any LaSalle
Holdings Reinsurance Subsidiary is a party or under which LaSalle Holdings or
any LaSalle Holdings Reinsurance Subsidiary has any existing rights, obligations
or liabilities are in full force and effect, except for such treaties or
agreements the failure to be in full force and effect of which are not
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect on LaSalle Holdings.
(b) Prior to the date hereof, LaSalle Holdings has delivered or made
available to Trenwick a true and complete copy of the most recent actuarial
reports prepared by actuaries, independent or otherwise, with respect to LaSalle
Holdings or any LaSalle Holdings Reinsurance Subsidiary since September 30, 1998
and all attachments, addenda, supplements and modifications thereto (the
"LaSalle Actuarial Analyses"). The information and data furnished by LaSalle
Holdings or any LaSalle Holdings Reinsurance Subsidiary to its independent
actuaries in connection with the preparation of the LaSalle Actuarial Analyses
were accurate in all material respects.
(c) LaSalle Re does not currently issue and has not issued any primary
insurance policies in the United States.
45
Section 4.21. Liabilities and Reserves.
Except for instances where the failure of the following statements to
be true would not reasonably be expected to have a Material Adverse Effect on
LaSalle Holdings, (a) the reserves carried on the financial statements of each
LaSalle Holdings Reinsurance Subsidiary for future insurance policy benefits,
losses, claims and similar purposes were, as of the respective dates of such
financial statements, in compliance with the requirements for reserves
established by the insurance departments of the jurisdiction of such LaSalle
Holdings Reinsurance Subsidiary or (as the case may be) by Lloyd's, were
determined in accordance with generally accepted actuarial standards and
principles consistently applied, and were fairly stated in accordance with sound
actuarial and statutory accounting principles (it being understood that no
representation or warranty is made in this Agreement to the effect that such
reserves were in fact adequate to cover the actual amount of liabilities that
are eventually paid after the date hereof); and (b) the admitted assets of each
LaSalle Holdings Reinsurance Subsidiary as determined under applicable laws or
under Lloyd's regulations are in an amount at least equal to the minimum amounts
required by applicable laws or regulations.
Section 4.22. Investment Company. Neither LaSalle Holdings nor any of
its Subsidiaries conducts activities of, or is otherwise deemed under applicable
law to control, an "investment adviser" as such term is defined in Section
2(a)(20) of the Investment Company Act, whether or not registered under the
Investment Advisers Act. Neither LaSalle Holdings nor any of its Subsidiaries is
an "investment company" as defined under the Investment Company Act and neither
LaSalle Holdings nor any of its Subsidiaries sponsors any Person that is such an
investment company.
Section 4.23. Reinsurance Contracts, Coverholders and MGAs.
(a) Section 4.23 of the LaSalle Disclosure Letter contains a true and
complete list of all MGAs and coverholders with whom each Subsidiary of LaSalle
Holdings does business that have been appointed within the twelve (12) months
preceding the date of this Agreement and all in force Reinsurance Contracts
which generate premium income in excess of $1,000,000 to which each Subsidiary
of LaSalle Holdings is a party as the cedent thereunder or by or to which each
Subsidiary of LaSalle Holdings is bound or subject as the cedent thereunder, as
each such Reinsurance Contract may have been amended, modified or supplemented.
Except as would not, individually or in the aggregate, have a Material Adverse
Effect on LaSalle Holdings: (i) each of the foregoing Reinsurance Contracts is
valid and binding in accordance with its terms, and is in full force and effect
and (ii) neither the Subsidiaries of LaSalle Holdings nor, to the knowledge of
LaSalle Holdings, or other party thereto, is in default in any material respect
with respect to any such Reinsurance Contract, nor to the knowledge of LaSalle
Holdings does any condition exist that with notice or lapse of time or both
would constitute such a material default thereunder. Except as set forth in
Section 4.23 of the LaSalle Disclosure Letter, none of the contracts, treaties
or arrangements involving the MGAs or coverholders which generate premium income
in excess of $1,000,000 with whom each Subsidiary of LaSalle Holdings does
business contain "change of control" provisions and no such Reinsurance Contract
contains any provision providing that any such other party thereto may
terminate, cancel or commute the same by reason of the transactions contemplated
by this Agreement or any other provision which would be altered or otherwise
become applicable by reason of such transactions, and no party has given notice
of termination, cancellation or commutation of any such Reinsurance Contract or
that it intends to terminate, cancel or commute any such Reinsurance Contract as
a result of the transactions contemplated hereby.
46
(b) Except as set forth in Section 4.23 of the LaSalle Disclosure
Letter, LaSalle Re is entitled under applicable insurance laws, rules and
regulations to take credit in its statutory financial statements in accordance
with applicable Bermuda law as in effect on the date hereof, with respect to the
Reinsurance Contracts listed in Section 4.23 of the LaSalle Disclosure Letter
and all such amounts are properly reflected in the statutory financial
statements of LaSalle Re. Each of LaSalle Holdings and LaSalle Re has no
knowledge of any disputes as to reinsurance or retrocessional coverage under, or
any terms of provisions of, any such Reinsurance Contract. To the knowledge of
LaSalle Holdings and LaSalle Re, the financial condition of any other party to
any such Reinsurance Contract is not impaired to the extent that a default
thereunder could reasonably be expected to occur.
Section 4.24. Derivatives. As of the date hereof, other than as set
forth in Section 4.24 of the LaSalle Disclosure Letter, neither LaSalle Holdings
nor any of its Subsidiaries is a party to any futures or option contracts,
swaps, ▇▇▇▇▇▇ or similar instruments which, individually or in the aggregate,
could have a Material Adverse Effect on LaSalle Holdings.
Section 4.25. Related Party Transactions. Except as set forth in
Section 4.25 of the LaSalle Disclosure Letter, since June 30, 1999, there have
been no transactions, agreements, arrangements or understandings between LaSalle
Holdings and its Subsidiaries, on the one hand, and LaSalle Holdings' affiliates
(other than wholly-owned Subsidiaries of LaSalle Holdings) or other Persons, on
the other hand, in existence as of the date hereof that are or would be required
to be disclosed in the LaSalle SEC Reports in accordance with Item 404 of
Regulation S-K under the Securities Act.
Section 4.26. Finite Risk Reinsurance. Except as set forth in
Section 4.26 of the LaSalle Disclosure Letter, none of LaSalle's Reinsurance
Subsidiaries has ceded business pursuant to a reinsurance agreement that does
not meet the conditions for reinsurance accounting as provided by the Statement
of Financial Accounting Standards No. 113, "Accounting and Reporting for
Reinsurance of Short-Duration and Long-Term Contracts."
ARTICLE 5
COVENANTS
Section 5.1. Conduct of Business of Trenwick. Except as expressly
contemplated by this Agreement, the Stock Option Agreements, as set forth in
Section 5.1 of the Trenwick Disclosure Letter or as consented to in writing by
LaSalle Holdings, during the period from the date of the Original Agreement to
the Effective Time, Trenwick shall, and shall cause each of its Subsidiaries to,
47
conduct its operations and (to the extent it is able to control them) the
operations of the syndicates managed by the Trenwick Managing Agencies only in,
and neither Trenwick nor any of its Subsidiaries shall take any action and shall
not take any action in relation to the syndicates managed by the Trenwick
Managing Agencies (to the extent they are able to control them) except in, the
ordinary and usual course of business and consistent with past practice, and
Trenwick and its Subsidiaries will use all commercially reasonable efforts to
preserve intact their business organization, to keep available the services of
their officers and employees and to maintain advantageous relationships with and
the goodwill of their customers, business partners and others having business
relationships with Trenwick or its Subsidiaries or the syndicates managed by the
Trenwick Managing Agencies, as the case may be. Without limiting the generality
of the foregoing, prior to the Effective Time, neither Trenwick nor any of its
Subsidiaries will, except as expressly contemplated by this Agreement, without
the prior written consent of LaSalle Holdings:
(a) split, combine or reclassify any shares of its capital stock,
declare, pay or set aside for payment any dividend or other distribution payable
in cash, stock, property or otherwise in respect of its capital stock or
directly or indirectly redeem, purchase or otherwise acquire any shares of any
class of capital stock or other securities, other than regular quarterly
dividends (other than those payable to Trenwick) in an amount payable in cash
not in excess of $0.26 per share; after the date of the Original Agreement,
LaSalle Holdings and Trenwick will coordinate with each other regarding the
declaration of dividends in respect of the Trenwick Shares and the record dates
and payment dates relating thereto, it being the intention of the parties that
holders of Trenwick Shares will not receive two dividends, or fail to receive
one dividend, for any single calendar quarter with respect to their Trenwick
Shares and the New Holdings Shares any such holder receives in exchange therefor
in accordance with the Plans;
(b) authorize for issuance, issue, sell, grant, pledge, dispose of or
encumber, deliver or agree or commit to issue, sell, pledge or deliver (whether
through the issue or granting of any options, warrants, commitments,
subscriptions, rights to purchase or otherwise) any shares of any class of
capital stock of Trenwick or any Subsidiary or any securities convertible into
or exercisable or exchangeable for shares of any class of capital stock of
Trenwick, except as required by agreements as in effect as of the date of the
Original Agreement and disclosed in Section 5.1(b) of the Trenwick Disclosure
Letter, or amend any of the terms of any such securities or agreements
outstanding as of the date of the Original Agreement;
(c) (i) incur or assume any debt, except for borrowings, in each case,
in the ordinary course of business consistent with past practices, (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person, except in
the ordinary course of business, (iii) make any loans or advances to any Person
other than loans or advances of out-of-pocket expenses incurred in connection
with the business of Trenwick or its Subsidiaries, (iv) pledge or otherwise
encumber shares of capital stock of Trenwick or its Subsidiaries or (v) mortgage
or pledge any of its material assets, tangible or intangible, or create any Lien
thereupon other than Permitted Liens;
48
(d) except as may be required by law or as contemplated by this
Agreement, including Section 5.9, enter into, adopt or amend or terminate any
bonus, profit sharing, compensation, severance, termination, change of control,
stock option, stock appreciation right, restricted stock, performance unit,
stock equivalent, stock purchase agreement, pension, retirement, deferred
compensation, employment, consulting, fringe benefit, severance or other
Employee Benefit Plan; or enter into or amend any employment or severance
agreement with any director, officer, employee or agent of Trenwick or any of
its Subsidiaries; or increase in any manner the salary, wages, bonus, commission
or other compensation or benefits of any director, officer, employee or agent of
Trenwick or any of its Subsidiaries, except, (i) in connection with the
promotion of any director, officer, employee or agent of Trenwick or any of its
Subsidiaries or (ii) for increases in the ordinary course of business and
consistent with past practice which in the aggregate do not exceed 10%; or hire
employees at the level of Vice President or above; or pay any benefit not
required by any plan and arrangement as in effect as of the date of the Original
Agreement (including, without limitation, the granting of stock options, stock
appreciation rights or performance units);
(e) acquire (by merger, amalgamation, consolidation or acquisition of
stock or assets or otherwise) any corporation, partnership, joint venture,
association or other business organization or division thereof or make any
material investment either by purchase of stock or securities, contributions to
capital, property transfer or acquisition (including by lease) of any material
amount of properties or assets of any other Person, except for the purchase of
investment stock or securities in the ordinary course of business;
(f) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, contingent or otherwise) against Trenwick or any of its
Subsidiaries, its directors, officers, employees or agents, other than the
payment, discharge or satisfaction in the ordinary course of business and
consistent with past practice of claims for contractual benefits under any
insurance or reinsurance contract under which Trenwick or any of its
Subsidiaries or syndicates managed by any of its Subsidiaries is the insurer or
reinsurer;
(g) amend or propose to amend the certificate of incorporation, by-laws
or any similar document of Trenwick or any of its Subsidiaries;
(h) adopt a plan or resolutions providing for the complete or partial
liquidation, dissolution, amalgamation, consolidation, restructuring,
recapitalization or other reorganization of Trenwick or any of its Subsidiaries;
(i) except as set forth in Section 5.1(i) of the Trenwick Disclosure
Letter, enter into any new lines of business (other than in or related to the
insurance or reinsurance business) or otherwise make material changes to the
operation of its business or its loss reserve;
(j) except as set forth in Section 5.1(j) of the Trenwick Disclosure
Letter, sell (whether by amalgamation, consolidation or otherwise), lease,
transfer or dispose of any material assets (including without limitation, rights
of renewal) outside the ordinary course of business consistent with past
practice or enter into any material commitment or transaction outside the
ordinary course of business consistent with past practices;
49
(k) authorize or make or commit to make any capital expenditures,
except for transactions in the ordinary course of business consistent with past
practice (but in no event in excess of $1,000,000 in the aggregate) or pursuant
to agreements or commitments entered into by Trenwick or any of its Subsidiaries
prior to the date of the Original Agreement;
(l) make any Tax elections or settle or compromise any material United
States federal, state, local or other foreign income Tax liability, or waive or
extend the statute of limitations in respect of any such Taxes;
(m) except as may be required as a result of a change in law or in
GAAP, change any of the accounting principles or practices used by it;
(n) amend the Rights or the Rights Agreement in any manner adverse to
LaSalle Holdings;
(o) enter into any agreement providing for the acceleration of payment
or performance or other consequence as a result of a change in control of
Trenwick or any of its Subsidiaries;
(p) resolve, commit or agree to take any of the foregoing actions or
any action which would make any representation or warranty in Article 3
materially untrue or incorrect;
(q) make any material change in its retrocessional agreements or
arrangements, including without limitation converting any of its funds withheld
stop loss reinsurance agreements into another type of reinsurance agreement or
entering into new funds withheld stop loss reinsurance agreements or
arrangements or stop loss reinsurance agreements or arrangements that attach at
an attachment point less than the expected loss ratio;
(r) make any material change in its reinsurance agreements or
arrangements;
(s) enter into any agreement or arrangement that limits or otherwise
restricts Trenwick or any of its Subsidiaries or any successor thereto or that
could, after the Effective Time, limit or restrict New Holdings and its
Subsidiaries or any successor thereto, from engaging or competing in any line of
business or in any geographic area; or
(t) enter into any new transaction, agreement, arrangement or
understanding with any other Persons that would be required to be disclosed in
the Trenwick SEC Reports in accordance with Item 404 of Schedule S-K under the
Securities Act.
Section 5.2. Conduct of Business of LaSalle Holdings. Except as
expressly contemplated by this Agreement, the Stock Option Agreements or as set
forth in Section 5.2 of the LaSalle Disclosure Letter or as consented to in
writing by Trenwick, during the period from the date of the Original Agreement
50
to the Effective Time, LaSalle Holdings shall, and shall cause each of its
Subsidiaries to, conduct its operations only in, and neither LaSalle Holdings
nor any of its Subsidiaries shall take any action except in, the ordinary and
usual course of business and consistent with past practice, and LaSalle Holdings
and its Subsidiaries will use all commercially reasonable efforts to preserve
intact their business organization, to keep available the services of their
officers and employees and to maintain advantageous relationships with and the
goodwill of their customers, business partners and others having business
relationships with LaSalle Holdings or its Subsidiaries, as the case may be.
Without limiting the generality of the foregoing, prior to the Effective Time,
neither LaSalle Holdings nor any of its Subsidiaries will, except as expressly
contemplated by this Agreement, without the prior written consent of Trenwick:
(a) split, combine or reclassify any shares, declare, pay or set aside
for payment any dividend or other distribution payable in cash, shares, property
or otherwise in respect of its shares or directly or indirectly redeem, purchase
or otherwise acquire any shares of any class of capital stock or other
securities, other than regular quarterly dividends (other than those payable to
LaSalle Holdings) in an amount payable in cash not in excess of $1.0938 per
Series A Preferred Share and quarterly dividends in an amount payable in cash
not in excess of $0.375 per LaSalle Holdings Share and Non-Voting Share; after
the date of the Original Agreement, LaSalle Holdings and Trenwick will
coordinate with each other regarding the declaration of dividends (other than
those payable to LaSalle Holdings) in respect of the Series A Preferred Shares,
LaSalle Holdings Shares and NonVoting Shares and the record dates and payment
dates relating thereto, it being the intention of the parties that holders of
LaSalle Holdings Shares and Non-Voting Shares will not receive two dividends for
any single calendar quarter with respect to their LaSalle Holdings Shares and
NonVoting Shares and the New Holdings Shares any such holder receives in
exchange therefor in accordance with the Plans;
(b) authorize for issuance, issue, sell, grant, pledge, dispose of or
encumber, deliver or agree or commit to issue, sell, pledge or deliver (whether
through the issue or granting of any options, warrants, commitments,
subscriptions, rights to purchase or otherwise) any shares of any class of
LaSalle Holdings or any Subsidiary or any securities convertible into or
exercisable or exchangeable for shares of any class of LaSalle Holdings, except
as required by agreements as in effect as of the date of the Original Agreement
and disclosed in Section 5.2(b) of the LaSalle Disclosure Letter, or amend any
of the terms of any such securities or agreements outstanding as of the date of
the Original Agreement;
(c) (i) incur or assume any debt, except for borrowings, in each case,
in the ordinary course of business consistent with past practices, (ii) assume,
guarantee, endorse or otherwise become liable or responsible (whether directly,
contingently or otherwise) for the obligations of any other Person, except in
the ordinary course of business, (iii) make any loans or advances to any Person
other than loans or advances of out-of-pocket expenses incurred in connection
with the business of LaSalle Holdings or its Subsidiaries, (iv) pledge or
otherwise encumber shares of LaSalle Holdings or its Subsidiaries or (v)
mortgage or pledge any of its material assets, tangible or intangible, or create
any Lien thereupon other than Permitted Liens;
51
(d) except as may be required by law or as contemplated by this
Agreement, including Section 5.9, enter into, adopt or amend or terminate any
bonus, profit sharing, compensation, severance, termination, change of control,
stock option, stock appreciation right, restricted stock, performance unit,
stock equivalent, stock purchase agreement, pension, retirement, deferred
compensation, employment, consulting, fringe benefit, severance or other
Employee Benefit Plan; or enter into or amend any employment or severance
agreement with any director, officer, employee or agent of LaSalle Holdings or
any of its Subsidiaries; or increase in any manner the salary, wages, bonus,
commission or other compensation or benefits of any director, officer, employee
or agent of LaSalle Holdings or any of its Subsidiaries, except, (i) in
connection with the promotion of any director, officer, employee or agent of
LaSalle Holdings or any of its Subsidiaries or (ii) for increases in the
ordinary course of business and consistent with past practice for employees
below the level of Vice President, in the aggregate case not to exceed 5%; or
hire employees at the level of Vice President or above; or pay any benefit not
required by any plan and arrangement as in effect as of the date of the Original
Agreement (including, without limitation, the granting of stock options, stock
appreciation rights or performance units);
(e) acquire (by merger, amalgamation, consolidation or acquisition of
stock or assets or otherwise) any corporation, partnership, joint venture,
association or other business organization or division thereof or make any
material investment either by purchase of stock or securities, contributions to
capital, property transfer or acquisition (including by lease) of any material
amount of properties or assets of any other Person, except for the purchase of
investment stock or securities in the ordinary course of business;
(f) pay, discharge or satisfy any claims, liabilities or obligations
(absolute, accrued, contingent or otherwise) against LaSalle Holdings or any of
its Subsidiaries, its directors, officers, employees or agents, other than the
payment, discharge or satisfaction in the ordinary course of business and
consistent with past practice of claims for contractual benefits under any
insurance or reinsurance contract under which LaSalle Holdings or any of its
Subsidiaries or any syndicates managed by any of its Subsidiaries is the insurer
or reinsurer;
(g) amend or propose to amend the memorandum of association, bye-laws
or any similar document of LaSalle Holdings or any of its Subsidiaries;
(h) propose to adopt a plan or resolutions providing for the complete
or partial liquidation, dissolution, amalgamation, consolidation, restructuring,
recapitalization or other reorganization of LaSalle Holdings or any of its
Subsidiaries;
(i) except as set forth in Section 5.2(i) of the LaSalle Disclosure
Letter, enter into any new lines of business (whether or not part of the
insurance or reinsurance business) or change any policy forms, investment
policies or guidelines or otherwise make material changes to the operation of
its business or its loss reserve;
52
(j) except as set forth in Section 5.2(j) of the LaSalle Disclosure
Letter, sell (whether by amalgamation, consolidation or otherwise), lease,
transfer or dispose of any material assets (including without limitation, rights
of renewal) outside the ordinary course of business consistent with past
practice or enter into any material commitment or transaction outside the
ordinary course of business consistent with past practices;
(k) authorize or make or commit to make any capital expenditures,
except for transactions in the ordinary course of business consistent with past
practice (but in no event in excess of $350,000 in the aggregate) or pursuant to
agreements or commitments entered into by LaSalle Holdings or any of its
Subsidiaries prior to the date of the Original Agreement;
(l) make any Tax elections or settle or compromise any material
Bermuda, United States federal, state, local or other foreign income Tax
liability, or waive or extend the statute of limitations in respect of any such
Taxes;
(m) except as may be required as a result of a change in law or in
GAAP, change any of the accounting principles or practices used by it;
(n) enter into any agreement providing for the acceleration of payment
or performance or other consequence as a result of a change in control of
LaSalle Holdings or any of its Subsidiaries;
(o) resolve, commit or agree to take any of the foregoing actions or
any action which would make any representation or warranty in Article 4
materially untrue or incorrect;
(p) make any material change in its retrocessional agreements or
arrangements, including without limitation converting any of its funds withheld
stop loss reinsurance agreements into another type of reinsurance agreement or
entering into new funds withheld stop loss reinsurance agreements or
arrangements or stop loss reinsurance agreements or arrangements that attach at
an attachment point less than the expected loss ratio;
(q) make any material change in its reinsurance agreements or
arrangements;
(r) enter into any agreement or arrangement that limits or otherwise
restricts LaSalle Holdings or any of its Subsidiaries or any successor thereto
or that could, after the Effective Time, limit or restrict New Holdings and its
Subsidiaries or any successor thereto, from engaging or competing in any line of
business or in any geographic area; or
(s) enter into any new transaction, agreement, arrangement or
understanding with any other Persons that would be required to be disclosed in
the LaSalle SEC Reports (excluding the amendment to the CatEPut) in accordance
with Item 404 of Schedule S-K under the Securities Act.
Nothing in this Section 5.2 shall preclude LaSalle Holdings or LaSalle
Re from implementing a new pension plan or amending existing pension plans, to
comply with Bermuda law.
53
Section 5.3. No Solicitation.
(a) No Solicitation by Trenwick.
(i) Trenwick shall not, nor shall it permit any of its
Subsidiaries to, nor shall it authorize or permit any of its
directors, officers or employees or any investment banker,
financial advisor, attorney, accountant or other
representative retained by it or any of its Subsidiaries to,
and it shall use commercially reasonable efforts to ensure
that such Persons do not directly or indirectly, (x) solicit,
initiate or encourage (including by way of furnishing
information), or take any other action designed to facilitate,
any inquiries or the making of any proposal which constitutes
any Trenwick Takeover Proposal (as defined below) or (y)
participate in any discussions or negotiations regarding any
Trenwick Takeover Proposal; provided, however, that if, at any
time the Board of Directors of Trenwick determines in good
faith, after consultation with outside counsel, that it is
necessary to do so in order to comply with its fiduciary
duties to the stockholders of Trenwick under applicable law,
Trenwick may, in response to a Trenwick Superior Proposal (as
defined in Section 5.3(a)(ii)) which was not solicited by it
or which did not otherwise result from a breach of this
Section 5.3(a)(i), and subject to providing prior written
notice of its decision to take such action to LaSalle Holdings
and compliance with Section 5.3(a)(iii), (x) furnish
information with respect to Trenwick and its Subsidiaries to
any Person making a Trenwick Superior Proposal pursuant to a
customary confidentiality agreement (as determined by Trenwick
after consultation with its outside counsel) and (y)
participate in discussions or negotiations regarding such
Trenwick Superior Proposal. For purposes of this Agreement,
"Trenwick Takeover Proposal" means any inquiry, proposal or
offer from any Person relating to any direct or indirect
acquisition or purchase of a business that constitutes 15% or
more of the net revenues, net income or assets of Trenwick and
its Subsidiaries, taken as a whole, or 15% or more of any
class of equity securities of Trenwick or any of its
Subsidiaries, any tender offer or exchange offer that if
consummated would result in any Person beneficially owning
15% or more of any class of equity securities of Trenwick or
any of its Subsidiaries, or any merger, consolidation,
amalgamation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving
Trenwick or any of its Subsidiaries, other than the
transactions contemplated by this Agreement or the Stock
Option Agreements.
(ii) Except as expressly permitted by this Section 5.3(a),
neither the Board of Directors of Trenwick nor any committee
thereof shall (x) withdraw or modify, or propose publicly to
withdraw or modify, in a manner adverse to LaSalle Holdings,
the approval or recommendation by such Board of Directors or
such committee of this Agreement and the transactions
contemplated hereby, (y) approve or recommend, or propose
publicly to approve or recommend, any Trenwick Takeover
54
Proposal, or (z) cause Trenwick to enter into any letter of
intent, agreement in principle, acquisition agreement or other
similar agreement (each a "Trenwick Acquisition Agreement")
related to any Trenwick Takeover Proposal. Notwithstanding the
foregoing, the Board of Directors of Trenwick (x) may withdraw
or modify its approval and recommendation of this Agreement
and the transactions contemplated hereby if the Board of
Directors of Trenwick determines in good faith that it has the
fiduciary duty to do so under applicable law and (y) may
terminate this Agreement and concurrently with or after such
termination, if it so chooses, cause Trenwick to enter into
any Trenwick Acquisition Agreement with respect to any
Trenwick Superior Proposal, but only at a time that is after
the fifth business day following LaSalle Holdings' receipt of
written notice advising LaSalle Holdings that the Board of
Directors of Trenwick is prepared to accept a Trenwick
Superior Proposal, specifying the material terms and
conditions of such Trenwick Superior Proposal and identifying
the person making such Trenwick Superior Proposal. For
purposes of this Agreement, a "Trenwick Superior Proposal"
means any proposal made by a third party to acquire, directly
or indirectly, including pursuant to a tender offer, exchange
offer, merger, consolidation, business combination,
recapitalization, liquidation, dissolution or similar
transaction, for consideration consisting of cash and/or
securities, more than 50% of the combined voting power of the
Trenwick Shares then outstanding or all or substantially all
the assets of Trenwick and otherwise on terms which the Board
of Directors of Trenwick determines in its good faith judgment
(after receiving the advice of a financial advisor of
nationally recognized reputation) to be more favorable to
Trenwick's stockholders than this Agreement and the
transactions contemplated hereby and for which financing, to
the extent required, is then committed or which, in the good
faith judgment of the Board of Directors of Trenwick, is
reasonably capable of being obtained by such third party.
(iii) In addition to the obligations of Trenwick set forth in
subparagraphs (a) (i) and (a) (ii) of this Section 5.3,
Trenwick shall immediately advise LaSalle Holdings orally and
in writing of any request for information or of any Trenwick
Takeover Proposal, the material terms and conditions of such
reques or Trenwick Takeover Trenwick Takeover Proposal.
Trenwick will keep LaSalle Holdings reasonably informed
of the status and details (including amendments or proposed
amendments) of any such request or Trenwick Takeover Proposal.
(iv) Nothing contained in this Section 5.3(a) shall prohibit
Trenwick from taking and disclosing to its stockholders a
position contemplated by Rule 14e-2(a) promulgated under the
Exchange Act or from making any disclosure to Trenwick's
stockholders if, in the good faith judgment of the Board of
Directors of Trenwick, after consultation with outside
counsel, failure so to disclose would be inconsistent with its
obligations under applicable law.
55
(b) No Solicitation by LaSalle Holdings.
(i) LaSalle Holdings shall not, nor shall it permit any of its
Subsidiaries to, nor shall it authorize or permit any of its
directors, officers or employees or any investment banker,
financial advisor, attorney, accountant or other
representative retained by it or any of its Subsidiaries to,
and it shall use commercially reasonable efforts to ensure
that such Persons do not directly or indirectly, (x) solicit,
initiate or encourage (including by way of furnishing
information), or take any other action designed to facilitate,
any inquiries or the making of any proposal which constitutes
any LaSalle Holdings Takeover Proposal (as defined below) or
(y) participate in any discussions or negotiations regarding
any LaSalle Holdings Takeover Proposal; provided, however,
that if, at any time the Board of Directors of LaSalle
Holdings determines in good faith, after consultation with
outside counsel, that it is necessary to do so in order to
comply with its fiduciary duties to shareholders of LaSalle
Holdings under applicable law, LaSalle Holdings may, in
response to a LaSalle Holdings Superior Proposal (as defined
in Section 5.3(b)(ii)) which was not solicited by it or which
did not otherwise result from a breach of this Section
5.3(b)(i), and subject to providing prior written notice of
its decision to take such action to Trenwick and compliance
with Section 5.3(b)(iii), (x) furnish information with respect
to LaSalle Holdings and its Subsidiaries to any Person making
a LaSalle Holdings Superior Proposal pursuant to a customary
confidentiality agreement (as determined by LaSalle Holdings
after consultation with its outside counsel) and (y)
participate in discussions or negotiations regarding such
LaSalle Holdings Superior Proposal. For purposes of this
Agreement, "LaSalle Holdings Takeover Proposal" means any
inquiry, proposal or offer from any Person relating to any
direct or indirect acquisition or purchase of a business that
constitutes 15% or more of the net revenues, net income or
assets of LaSalle Holdings and its Subsidiaries, taken as a
whole, or 15% or more of any class of equity securities of
LaSalle Holdings or any of its Subsidiaries, any tender offer
or exchange offer that if consummated would result in any
person beneficially owning 15% or more of any class of equity
securities of LaSalle Holdings or any of its Subsidiaries, or
any merger, consolidation, amalgamation, business combination,
recapitalization, liquidation, dissolution or similar
transaction involving LaSalle Holdings or any of its
Subsidiaries, other than the transactions contemplated by
this Agreement or the Stock Option Agreements.
(ii) Except as expressly permitted by this Section 5.3(b),
neither the Board of Directors of LaSalle Holdings nor any
committee thereof shall (x) withdraw or modify, or propose
publicly to withdraw or modify, in a manner adverse to
Trenwick, the approval or recommendation by such Board of
Directors or such committee of this Agreement and the
transactions contemplated hereby, (y) approve or recommend, or
propose publicly to approve or recommend, any LaSalle Holdings
Takeover Proposal, or (z) cause LaSalle Holdings to enter into
any letter of intent, agreement in principle, acquisition
agreement or other similar agreement (each a "LaSalle Holdings
56
Acquisition Agreement") related to any LaSalle Holdings
Takeover Proposal. Notwithstanding the foregoing, the Board of
Directors of LaSalle Holdings (x) may withdraw or modify its
approval and recommendation of this Agreement and the
transactions contemplated hereby if the Board of Directors of
LaSalle Holdings determines in good faith that it has the
fiduciary duty to do so under applicable law and (y) may
terminate this Agreement and concurrently with or after such
termination, if it so chooses, cause LaSalle Holdings to enter
into any LaSalle Holdings Acquisition Agreement with respect
to any LaSalle Holdings Superior Proposal, but only at a time
that is after the fifth business day following Trenwick's
receipt of written notice advising Trenwick that the Board of
Directors of LaSalle Holdings is prepared to accept a LaSalle
Holdings Superior Proposal, specifying the material terms and
conditions of such LaSalle Holdings Superior Proposal and
identifying the person making such LaSalle Holdings Superior
Proposal. For purposes of this Agreement, a "LaSalle Holdings
Superior Proposal" means any proposal made by a third party to
acquire, directly or indirectly, including pursuant to a
tender offer, exchange offer, merger, consolidation,
amalgamation, business combination, recapitalization,
liquidation, dissolution or similar transaction, for
consideration consisting of cash and/or securities, more than
50% of the combined voting power of LaSalle Holdings Shares
then outstanding or all or substantially all the assets of
LaSalle Holdings and otherwise on terms which the Board of
Directors of LaSalle Holdings determines in its good faith
judgment (after receiving the advice of a financial advisor of
nationally recognized reputation) to be more favorable to
LaSalle Holdings' stockholders than this Agreement and the
transactions contemplated hereby and for which financing, to
the extent required, is then committed or which, in the good
faith judgment of the Board of Directors of LaSalle Holdings,
is reasonably capable of being obtained by such third party.
(iii) In addition to the obligations of LaSalle Holdings set
forth in subparagraphs (b)(i) and (b)(ii) of this Section 5.3,
LaSalle Holdings shall immediately advise Trenwick orally and
in writing of any request for information or of any LaSalle
Holdings Takeover Proposal, the material terms and conditions
of such request or LaSalle Holdings Takeover Proposal and
the identity of the person making such request or LaSalle
Holdings Takeover Proposal. LaSalle Holdings will keep
Trenwick reasonably informed of the status and details
(including amendments or proposed amendments) of any such
request or LaSalle Holdings Takeover Proposal.
(iv) Nothing contained in this Section 5.3(b) shall prohibit
LaSalle Holdings from taking and disclosing to its
stockholders a position contemplated by Rule 14e-2(a)
promulgated under the Exchange Act or from making any
disclosure to LaSalle Holdings' shareholders if, in the good
faith judgment of the Board of Directors of LaSalle Holdings,
after consultation with outside counsel, failure so to
disclose would be inconsistent with its obligations under
applicable law.
57
Section 5.4. Access to Information; Confidentiality. Between the
date of the Original Agreement and the Effective Time, each of LaSalle Holdings
and Trenwick shall, and shall cause each of its respective Subsidiaries to,
afford the other party and its officer, employees and authorized representatives
(including, without limitation, attorneys, auditors, financial advisors and
actuaries) of the other reasonable access during normal business hours during
the period prior to the Effective Time to all its personnel, offices and other
facilities and to its books and records and will permit such party and its
authorized representatives to make such inspections of its financial and
operating data and other information with respect to its business and properties
as such party and its authorized representatives may from time to time
reasonably request. No information or knowledge obtained in any investigation
pursuant to this Section 5.4 shall affect or be deemed to modify any
representation or warranty contained in the Agreement or the conditions to the
obligations of the parties to consummate the Plans. The confidentiality of all
such documents and information furnished in connection with the transactions
contemplated by this Agreement shall be governed by the terms of the
Confidentiality Letter.
Section 5.5. Form S-4; Regulatory Matters. As soon as is reasonably
practicable following the date of the Original Agreement, LaSalle Holdings and
Trenwick shall prepare and file with the SEC, pursuant to Rule 14a-6(a) under
the Exchange Act, the Joint Proxy Statement and a registration statement of New
Holdings on Form S-4 with respect to the transactions contemplated by this
Agreement. LaSalle Holdings and Trenwick shall cause New Holdings to file the
Form S-4 promptly after the conclusion of the SEC's review of the Joint Proxy
Statement. Each of LaSalle Holdings and Trenwick shall provide reasonable
opportunity for the other to review and comment upon the contents of the Joint
Proxy Statement and the Form S-4 and shall not include therein or omit therefrom
any information or supplement to which counsel to the other shall reasonably
object or specifically request (as the case may be). After the date of the
mailing of the Joint Proxy Statement, each of LaSalle Holdings and Trenwick
agrees promptly to notify the other of and to correct or supplement any
information which either of them shall have furnished for inclusion in the Joint
Proxy Statement that shall have become false or misleading in any material
respect. Trenwick and LaSalle Holdings shall use all commercially reasonable
efforts to have the Joint Proxy Statement cleared by the SEC under the Exchange
Act and the Form S-4 declared effective under the Securities Act as promptly as
practicable after such filing. New Holdings shall also take any action (other
than qualifying to do business in any jurisdiction in which it is not now so
qualified or to file a general consent to service of process) required to be
taken under any applicable state securities and "Blue Sky" laws in connection
with the issue of New Holdings Shares in accordance with the Plans and upon the
exercise of New Holdings Options (as defined herein) and each of LaSalle
Holdings and Trenwick shall furnish all information concerning itself and its
shareholders as may reasonably be requested in connection with any such action.
Section 5.6. Public Announcements. LaSalle Holdings and Trenwick shall
not issue any press release or otherwise make any public statements with respect
to the Plans, this Agreement or the transactions contemplated hereby without
first consulting with each other, and providing each other the opportunity to
review, comment upon and concur as to the wording, timing and media for such
press release or statement, except for any press release or statement as may be
required by applicable law, court process or the obligation pursuant to any
listing statement with any national securities exchange, in which case notice
shall be given to the other party prior to the issuance of such press release or
the dissemination of such written material. The parties agree that the initial
press release, if any, to be issued with respect to the execution of this
Agreement and the transactions contemplated hereby shall be in a form agreed to
by the parties.
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Section 5.7. Supplemental Information. Prior to the Effective Time,
each party will promptly disclose in writing to the other parties any matter
hereafter arising which, if existing, occurring or known at the date of the
Original Agreement would have been required to be disclosed to such other
parties. Each party shall promptly advise the other parties of such party's
knowledge of any Material Adverse Effect. Except where prohibited by applicable
statutes and regulations, each party shall promptly provide the other (or its
counsel) with copies of all filings, material notices or material communications
made by such party with any Governmental Authority (including the SEC or NYSE)
in connection with this Agreement or the Stock Option Agreements, or the
transactions contemplated hereby or thereby. No information provided to a party
pursuant to this Section 5.7 shall be deemed to cure any breach of any
representation of or warranty made in this Agreement unless the party receiving
such information specifically agrees thereto in writing.
Section 5.8. Shareholders' Meetings. LaSalle Holdings and LaSalle
Re shall each request the Court to convene a special meeting of its respective
shareholders (and, if necessary, classes of shareholders), with the meeting of
LaSalle Holdings to occur first, and Trenwick, acting through its Board of
Directors, shall in accordance with the GCL call a special meeting of its
stockholders (and, if necessary, classes of stockholders), and shall give notice
of, convene and hold such special meetings as soon as practicable, but in no
event more than 45 days, after the Form S-4 is declared effective by the SEC for
the purpose of approving this Agreement and all actions contemplated hereby. In
connection with such meetings, each of LaSalle Holdings, LaSalle Re and Trenwick
shall mail the Joint Proxy Statement to its respective shareholders as promptly
as practicable. The respective Boards of Directors of each of LaSalle Holdings,
LaSalle Re and Trenwick shall submit for approval and adoption by its respective
shareholders the matters to be voted upon at such meetings and shall, subject to
their fiduciary duties after having consulted with and considered the advice of
outside counsel, include in the Joint Proxy Statement the recommendation of its
respective Board of Directors that the shareholders vote in favor of the
approval and adoption of this Agreement and the Plans and each such party shall
(subject to the fiduciary duties of its Board of Directors) use all commercially
reasonable efforts to secure such approval and adoption. LaSalle Holdings,
LaSalle Re and Trenwick shall coordinate and cooperate with respect to the
timing of such meetings and shall endeavor to hold such meetings on the same
day.
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Section 5.9. Trenwick Options, LaSalle Holdings Options, LaSalle
Re Options and Trenwick Warrants.
(a) Trenwick Options.
(i) At the Effective Time, each outstanding Trenwick Option
shall be replaced by an option (a "New Holdings Option") to
acquire New Holdings Shares, the terms of which shall be no
less favorable than the terms currently applicable to such
Trenwick Option, under a new stock option plan to be
established by New Holdings for such purposes before the
Closing Date (the "New Holdings Option Plan"), all as provided
in Section 5.9(a)(ii).
(ii) The cancellation of Trenwick Options and replacement with
New Holdings Options shall comply in all respects with, and
shall be performed in accordance with, the methodology
prescribed by the provisions of Section 424(a) of the Code and
the regulations thereunder and each New Holdings Option shall
provide the option holder with termination rights that are no
less favorable to such holder than were provided under the
Trenwick Option for which it was replaced as of the Effective
Time. The parties contemplate that, consistent with the
methodology prescribed by Section 424(a) of the Code and the
applicable regulations thereunder (A) the number of New
Holdings Shares subject to such New Holdings Option will be
determined by multiplying the number of Trenwick Shares
subject to Trenwick Options by the Trenwick Exchange Ratio
(rounded to the next higher whole number with respect to each
holder thereof) and (B) the exercise price under such New
Holdings Option will be determined by dividing the exercise
price per share under the Trenwick Option in effect
immediately prior to the Effective Time by the Trenwick
Exchange Ratio and rounding the exercise price thus determined
to the nearest whole cent (a half-cent shall be rounded to the
next higher whole cent).
(iii) As promptly as practicable after the Effective Time, New
Holdings shall issue to each holder of an outstanding Trenwick
Option a document evidencing the New Holdings Option having
the terms provided for in Sections 5.9(a)(i) and (ii) and
effective as of the Effective Time.
(b) LaSalle Holdings Options.
(i) At the Effective Time, each outstanding LaSalle Holdings
Option shall be replaced by a New Holdings Option, the terms
of which shall be no less favorable than the terms currently
applicable to such LaSalle Holdings Option, under the New
Holdings Option Plan, all as provided in Section 5.9(b)(ii).
(ii) The cancellation of LaSalle Holdings Options and
replacement with New Holdings Options shall comply in all
respects with, and shall be performed in accordance with, the
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methodology prescribed by the provisions of Section 424(a) of
the Code and the regulations thereunder and each New Holdings
Option shall provide the option holder with termination rights
that are no less favorable to such holder than were provided
under the LaSalle Holdings Option for which it was replaced as
of the Effective Time. The parties contemplate that,
consistent with the methodology prescribed by Section 424(a)
of the Code and the applicable regulations thereunder (A) the
number of New Holdings Shares subject to such New Holdings
Option will be determined by multiplying the number of LaSalle
Holdings Shares subject to LaSalle Holdings Options by the
LaSalle Exchange Ratio (rounded to the next higher whole
number with respect to each holder thereof) and (B) the
exercise price under such New Holdings Option will be
determined by dividing the exercise price per share under the
LaSalle Holdings Option in effect immediately prior to the
Effective Time by the LaSalle Exchange Ratio and rounding the
exercise price thus determined to the nearest whole cent (a
half-cent shall be rounded to the next higher whole cent).
(iii) As promptly as practicable after the Effective Time, New
Holdings shall issue to each holder of an outstanding LaSalle
Holdings Option a document evidencing the New Holdings Option
having the terms provided for in Sections 5.9(b)(i) and (ii)
and effective as of the Effective Time.
(c) LaSalle Re Options. Subject to Section 2.6(e):
(i) Pursuant to Section 2(H) of that certain Amended and
Restated Option Agreement dated November 27, 1995 among
LaSalle Holdings, LaSalle Re and each of the optionholders
listed on Schedule I thereto, from and after the Effective
Time, each holder of an outstanding option to acquire
Non-Voting Shares shall be entitled, upon payment of the
exercise price thereof, to receive, at such holder's election,
either (i) the number of Non-Voting Shares covered by such
option or (ii) the number of New Holdings Shares that such
holder would have received pursuant to Section 2.6(a) (plus,
if applicable, the amount of cash payable in lieu of a
fractional share that such holder would have received pursuant
to Section 2.12) if such holder had exercised such option
immediately prior to the Effective Time. LaSalle Re undertakes
to use commercially reasonable efforts to obtain the consent
of each of the holders of such options to the cancellation of
such options and replacement thereof with New Holdings
Options, the terms of which shall be no less favorable than
the terms currently applicable to such options.
(ii) Pursuant to Section 2(F) of that certain Stock
Appreciation Rights Agreement dated as of April 1, 1994
between ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ and LaSalle Re, if ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
exercises any of his stock appreciation rights during the
period beginning at the Effective Time and ending on November
22, 2003, he shall be entitled to receive the number of New
Holdings Shares that he would have received pursuant to
Section 2.6(a) (plus, if applicable, the amount of cash
payable in lieu of a fractional share that he would have
received pursuant to Section 2.12) if he had exercised such
stock appreciation rights immediately prior to the Effective
Time.
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(d) Registration of Options. If the New Holdings Options issued
pursuant to Sections 5.9(a), (b) and (c) are not already covered by an effective
registration statement, New Holdings will file a registration statement as
promptly as practicable after the Effective Time, which registration statement
will cover the New Holdings Shares issuable upon exercise of the New Holdings
Options granted in substitution of Trenwick Options, LaSalle Holdings Options
and LaSalle Re Options, and New Holdings will use all commercially reasonable
efforts to cause such registration statement to become effective under the
Securities Act and to maintain such registration statement in effect until the
exercise or termination of all such New Holdings Options.
(e) Trenwick Warrants. At the Effective Time, each then outstanding
warrant of Trenwick shall be assumed by New Holdings in accordance with its
terms.
Section 5.10. Takeover Laws. The parties shall use all commercially
reasonable efforts to exempt the transactions contemplated by this Agreement
from, and otherwise act to eliminate or minimize the effects of any applicable
takeover or change of control law.
Section 5.11. Affiliates.
(a) At least five days prior to the Closing Date, Trenwick shall
deliver to LaSalle Holdings a letter identifying all persons who are anticipated
to be, at the time of the Trenwick stockholders meeting, "affiliates" of
Trenwick for purposes of Rule 145 under the Securities Act ("Rule 145").
Trenwick shall furnish such information and documents as LaSalle Holdings may
reasonably request for the purpose of reviewing such letter. Trenwick shall use
all commercially reasonable efforts to cause each Person who is identified as an
"affiliate" in such letter to deliver to LaSalle Holdings, prior to the Closing
Date, a written agreement in connection with restrictions on affiliates under
Rule 145, in a form mutually agreeable to Trenwick and LaSalle Holdings.
(b) At least five days prior to the Closing Date, LaSalle Holdings
shall deliver to Trenwick a letter identifying all Persons who are anticipated
to be, at the time of the LaSalle Holdings shareholders meeting, "affiliates" of
LaSalle Holdings for purposes of Rule 145. LaSalle Holdings shall furnish such
information and documents as Trenwick may reasonably request for the purpose of
reviewing such letter. LaSalle Holdings shall use all commercially reasonable
efforts to cause each Person who is identified as an "affiliate" in such letter
to deliver to Trenwick, prior to the Closing Date, a written agreement in
connection with restrictions on affiliates under Rule 145, in a form mutually
agreeable to Trenwick and LaSalle Holdings.
Section 5.12. Stock Exchange Listing. Trenwick, LaSalle Holdings and
New Holdings shall use all commercially reasonable efforts to cause the New
Holdings Shares to be issued in accordance with the Plans and the New Holdings
Shares to be reserved for issue upon exercise of New Holdings Options to be
approved for listing on the NYSE, subject to official notice of issuance, prior
to the Closing Date.
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Section 5.13. Indemnification and Insurance.
(a) From and after the Effective Time, New Holdings shall indemnify,
defend and hold harmless each Person who is, or has been at any time prior to
the date hereof or who becomes prior to the Effective Time, an officer or
director of Trenwick and LaSalle Holdings (the "Indemnified Parties") against
all losses, expenses, claims, damages and liabilities arising out of the
transactions contemplated by this Agreement to the fullest extent permitted or
required under applicable law (including, without limitation, reasonable
attorneys' fees). Subject to any limitations imposed by Bermuda law and public
policy, to the extent applicable, New Holdings agrees that all rights to
indemnification existing in favor of current and former directors and officers
of Trenwick, LaSalle Holdings or any of their respective Subsidiaries as
provided in such corporation's certificate of incorporation or by-laws (or
analogous documents) or existing indemnification agreements, as in effect as of
the date of the Original Agreement, with respect to matters occurring through
the Effective Time, shall survive the Plans and shall continue in full force and
effect, and New Holdings shall guarantee the obligations of Trenwick and LaSalle
Holdings in respect thereof; provided, however, that this shall not limit the
ability of New Holdings to effect any corporate restructuring of its
Subsidiaries.
(b) New Holdings shall cause to be maintained for a period of not less
than six years from the Effective Time the directors' and officers' insurance
and, fiduciary liability insurance indemnification policies currently maintained
by Trenwick and LaSalle Holdings to the extent that such policies provide
coverage for events occurring prior to the Effective Time (the "D&O Insurance")
for any of the Indemnified Parties so long as the annual premium therefor would
not be in excess of two hundred percent (200%) of the last annual premium paid
prior to the date of the Original Agreement (two hundred percent (200%) of such
premium, the "Maximum Premium"); provided, however, that New Holdings may, in
lieu of maintaining such existing D&O Insurance as provided above, cause no less
favorable coverage to be provided under any policy maintained for the benefit of
the directors and officers of Trenwick, LaSalle Holdings or any of their
respective Subsidiaries, so long as (i) the insurance company providing such
coverage thereof has an A.M. Best Company rating of A or better and (ii) the
material terms thereof are no less advantageous to the Indemnified Parties than
the existing D&O Insurance. If the existing D&O Insurance expires, is terminated
or cancelled or if the premium for such D&O Insurance exceeds the Maximum
Premium during such six-year period, New Holdings will cause to be obtained, to
the extent commercially available, replacement D&O Insurance as can be obtained
for the remainder of such six-year period for a premium not in excess of the
Maximum Premium on terms and conditions no less advantageous to the Indemnified
Parties than the existing D&O Insurance.
(c) The provisions of Section 5.13 are in addition to, and not in
substitution for any rights that an Indemnified Party may have under the
applicable certificate of incorporation, memorandum of association, or by-laws,
bye-laws or agreements with Trenwick and LaSalle Holdings or any of their
respective Subsidiaries or under applicable law. New Holdings agrees to pay all
costs and expenses (including fees and expenses of counsel) that may be incurred
by an Indemnified Party in successfully enforcing the indemnity or other
obligations under this Section 5.13. The provisions of this Section 5.13 shall
survive the Closing and are intended for the benefit of, and shall be
enforceable by, each of the Indemnified Parties, their heirs and their
representatives.
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Section 5.14. Commercially Reasonable Efforts. Upon the terms and
subject to the conditions and other agreements set forth in this Agreement, each
of the parties hereto will use commercially reasonable efforts to take, or cause
to be taken, all actions and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable to consummate and make effective, in the most expeditious manner
possible, the transactions contemplated by this Agreement (including with
respect to Trenwick, the reduction of any taxation of Trenwick arising from the
Plan of Reorganization) and shall use all commercially reasonable efforts to
obtain all waivers, permits, consents and approvals and to effect all
registrations, filings and notices with or to third parties or Governmental
Authorities which are necessary or desirable in connection with the transactions
contemplated by this Agreement. If, at any time after the Effective Time any
further action is necessary or desirable to carry out the purposes of this
Agreement, the proper officers or directors of each of the parties hereto shall
take such action.
Section 5.15. Post-Closing Matters.
(a) LaSalle Holdings, Trenwick and their respective Affiliates shall
(and, following the Effective Time, New Holdings shall) take no action with
respect to the stock, assets or liabilities of LaSalle Holdings or Trenwick,
including, without limitation, the filing of Tax returns or reports, that would
be inconsistent with the qualification of the Plans as tax-free under Section
351 of the Code; provided, however, that Trenwick, LaSalle Holdings and their
respective Affiliates may file with the appropriate Governmental Authorities and
execute all documents necessary to consummate the Plans and other transactions
contemplated by this Agreement.
(b) Upon request, New Holdings shall use commercially reasonable
efforts to cooperate with any LaSalle Holdings shareholder or any Trenwick
stockholder in the completion and administration of a gain recognition agreement
under Section 367 of the Code.
Section 5.16. Employee Benefit Plans; Existing Agreements.
(a) For a period of at least one year after the Effective Time, New
Holdings will cause (i) the employees of Trenwick and its Subsidiaries who are
employed immediately after the Effective Time ("Trenwick Employees") to be
provided with employee benefits under Employee Benefit Plans maintained by New
Holdings ("New Holdings Plans") which are no less favorable in the aggregate
than benefits provided to Trenwick Employees immediately prior to the Effective
Time; and (ii) the employees of LaSalle Holdings and its Subsidiaries who are
employed immediately after the Effective Time ("LaSalle Holdings Employees") to
be provided with employee benefits under the New Holdings Plans which are no
less favorable in the aggregate than benefits provided to LaSalle Holdings
Employees immediately prior to the Effective Time, except for the termination of
the LaSalle Re Holdings Limited Employee Stock Purchase Plan.
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(b) With respect to each New Holdings Plan, for purposes of determining
eligibility to participate, vesting and entitlement to benefits, including for
severance benefits and vacation entitlement (but not for accrual of pension
benefits except to the extent that past service credit is provided in a similar
manner to both Trenwick Employees and LaSalle Holdings Employees), service with
Trenwick and its Subsidiaries by Trenwick Employees employed immediately after
the Effective Time shall be treated as service with New Holdings and service
with LaSalle Holdings and its Subsidiaries by LaSalle Holdings Employees
employed immediately after the Effective Time shall be treated as service with
New Holdings; provided, however, that such service shall not be recognized to
the extent that such recognition would result in a duplication of benefits. Such
service also shall apply for purposes of satisfying any waiting periods,
evidence of insurability requirements or the application of any preexisting
condition limitations. Trenwick Employees and LaSalle Holdings Employees shall
be given credit for amounts paid under a corresponding benefit plan during the
same period for purposes of applying deductibles, copayments and out-of-pocket
maximums as though such amounts had been paid in accordance with the terms and
conditions of the New Holdings Plan.
(c) Except with respect to those plans and arrangements listed in
Section 5.16 of the Trenwick Disclosure Letter or the LaSalle Disclosure Letter
(as applicable), following the Effective Time, New Holdings shall honor in
accordance with their terms (i) all employment, severance and other compensation
agreements and arrangements existing on or prior to the execution of this
Agreement which are between Trenwick and any director, officer or employee
thereof and which have been disclosed in Section 3.16 of the Trenwick Disclosure
Letter and previously have been delivered to LaSalle Holdings and (ii) all
employment, severance and other compensation agreements and arrangements
existing on or prior to the execution of this Agreement which are between
LaSalle Holdings and any director, officer or employee thereof and which have
been disclosed in Section 4.16(a) of the LaSalle Disclosure Letter and
previously have been delivered to Trenwick.
(d) It is understood and agreed between the parties that all provisions
contained in this Agreement with respect to employee benefit plans or employee
compensation are included for the sole benefit of the respective parties hereto
and do not and shall not create any right in any other person, including, but
not limited to, any LaSalle Holdings Employee or any Trenwick Employee, any
participant in any benefit or compensation plan or any beneficiary thereof.
Section 5.17. Letters from Accountants.
(a) LaSalle Holdings shall use all commercially reasonable efforts to
cause to be delivered to Trenwick two letters from Deloitte & Touche LLP, its
independent public accountants, one dated a date within two business days before
the date on which the Form S-4 shall become effective and one dated a date
within two business days before the Effective Date, each addressed to Trenwick,
in form and substance reasonably satisfactory to Trenwick and comparable in
scope and substance to comfort letters customarily delivered by independent
public accountants in connection with registration statements similar to the
Form S-4 and transactions such as those contemplated by this Agreement.
65
(b) Trenwick shall use its best efforts to cause to be delivered to
LaSalle Holdings two letters of PricewaterhouseCoopers LLP, its independent
public accountants, one dated a date within two business days before the date on
which the Form S-4 shall become effective and one dated a date within two
business days before the Effective Date, each addressed to LaSalle Holdings, in
form and substance reasonably satisfactory to LaSalle Holdings and comparable in
scope and substance to comfort letters customarily delivered by independent
public accountants in connection with registration statements similar to the
Form S-4 and transactions such as those contemplated by this Agreement.
Section 5.18. Litigation. Each of Trenwick and LaSalle Holdings shall
(to the extent their interests do not diverge) cooperate in the defense of any
litigation against Trenwick or LaSalle Holdings, as applicable, and its
directors and officers relating to the transactions contemplated by this
Agreement, the Plans and the Stock Option Agreements.
Section 5.19. Advice of Changes. Each of Trenwick and LaSalle Holdings
agrees that it shall give the other party prompt notice of (i) any
representation or warranty made by it contained in this Agreement that is
qualified as to materiality becoming untrue or inaccurate in any respect or any
such representation or warranty that is not so qualified becoming untrue or
inaccurate in any material respect or (ii) the failure by it to comply with or
satisfy in any material respect any covenant, condition or agreement to be
complied with or satisfied by it under this Agreement; provided, however, that
no such notification shall affect the representations, warranties, covenants or
agreements of the parties or the conditions to the obligations of the parties
under this Agreement.
Section 5.20. Trenwick Rights Agreement. The Board of Directors of
Trenwick shall take all further action (in addition to that referred to in
Section 3.20) reasonably requested in writing by LaSalle Holdings in order to
render the Trenwick Rights inapplicable to transactions contemplated by this
Agreement, the Plans and the Stock Option Agreements to the extent provided
herein and in the Trenwick Rights Plan amendment.
Section 5.21. New Holdings Rights Agreement. The Board of Directors of
New Holdings shall take all action necessary to implement a shareholders rights
plan (the "New Holdings Rights Agreement"), substantially similar to the
Trenwick Rights Agreement and Trenwick Rights, except as otherwise contemplated
by Section 5.21 of the Trenwick Disclosure Letter or as otherwise agreed by
Trenwick and LaSalle Holdings, with such other changes as are set forth on
Section 5.21 of the Trenwick Disclosure Letter and such changes therein as may
be agreed by Trenwick and LaSalle Holdings, effective as of the Effective Time.
Section 5.22. Assumption of Non-Voting Share Conversion Obligation. In
the event that this Agreement and the LaSalle Re Scheme of Arrangement are not
approved by the vote specified in Section 4.15(b), then, prior to the
consummation of the LaSalle Holdings Scheme of Arrangement, New Holdings shall
assume by written instrument the obligation to deliver one New Holdings Share in
exchange for each Non-Voting Share surrendered for exchange pursuant to that
certain Conversion Agreement dated as of November 27, 1995 among LaSalle
Holdings, LaSalle Re and each of the Persons listed on Schedule I thereto.
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Section 5.23. Assumption of Series B Preferred Share Conversion
Obligation. Prior to the Effective Time, New Holdings shall assume by written
instrument the obligation to deliver to the holders of any Series B Preferred
Shares, par value $1.00 per share, of LaSalle Holdings ("Series B Preferred
Shares"), upon the basis and upon the terms and conditions specified in the
Certificate of Designation, Preferences and Rights of the Series B Preferred
Shares with respect to the conversion of such Series B Preferred Shares, and in
lieu of the LaSalle Holdings Shares immediately theretofore receivable upon such
conversion, such shares of stock, securities or assets as may be issued or
payable with respect to or in exchange for a number of LaSalle Holdings Shares
equal to the number of LaSalle Holdings Shares immediately theretofore so
receivable had the Schemes of Arrangement not been consummated.
Section 5.24. Tax-Free Reorganization. Trenwick, New Holdings and
LaSalle Holdings shall each use its best efforts to cause the exchange described
in Section 2.1(b) to be treated as a reorganization within the meaning of
Section 368(a) of the Code and to cause the Schemes of Arrangement to be treated
as tax-free under Section 351 of the Code and to cause the delivery of the
certificates of officers and opinions upon which the opinions of ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇ under Section 6.1(h), Section 6.2(g) and Section 6.3(h) will rely and
upon which the opinion of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ under Section 6.1(g) will rely.
ARTICLE 6
CONDITIONS TO THE PLANS
Section 6.1. Conditions to Each Party's Obligation to Effect the Plans.
The respective obligations of each party to this Agreement to consummate the
Plans and to effect the actions referred to in Section 2.2(c) shall be subject
to the following conditions:
(a) Stockholder Approvals. This Agreement, the Plans and the other
transactions contemplated hereby shall have been approved and adopted by any
requisite vote or consent of (i) the relevant classes of Trenwick's stockholders
as required by the GCL, Trenwick's certificate of incorporation and by-laws and
(if applicable), the NYSE and (ii) the relevant classes of LaSalle Holdings'
shareholders as required by the Companies Act and (if applicable) the NYSE and
LaSalle Holdings' bye-laws, and orders of the Court sanctioning the Schemes of
Arrangement shall have been obtained.
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(b) Third Party Consents.
(i) Both of Trenwick and LaSalle Holdings shall have received
all consents and approvals required by any lender or equity
provider as further set forth in Section 6.1(b) of the
Trenwick Disclosure Letter and the LaSalle Disclosure Letter,
respectively.
(ii) Those regulatory and other approvals required to
consummate the Plans and the other transactions contemplated
hereby, including but not limited to any applicable Lloyd's
approval and those approvals specified in Section 3.8 of the
Trenwick Disclosure Letter and Section 4.8 of the LaSalle
Disclosure Letter, shall have been obtained (without any terms
or conditions to such approvals which would impose material
and adverse limitations on the ability of New Holdings and its
Subsidiaries to conduct their business after the Effective
Time, which would require changes to the terms of the Plans
which would be material and adverse to New Holdings, LaSalle
Holdings or Trenwick or which would change the consideration
payable to shareholders in accordance with the Plans) and
shall remain in full force and effect and all statutory
waiting periods in respect thereof shall have expired.
(c) No Injunctions or Restraints. No order, decree or injunction of any
court or agency of competent jurisdiction shall be in effect, and no law,
statute or regulation shall have been enacted or adopted, that enjoins,
prohibits or makes illegal consummation of any of the transactions contemplated
hereby; provided, however, that each of LaSalle Holdings and Trenwick shall have
used all commercially reasonable efforts to prevent any such rule, regulation,
injunction, decree or other order, and to appeal as promptly as possible any
injunction, decree or other order that may be entered.
(d) Form S-4. The Form S-4 shall have been declared effective by the
SEC and shall not be subject to a stop order or threatened stop order.
(e) HSR Act. Any waiting period (and any extension thereof) applicable
to the Plans under the HSR Act shall have terminated or expired.
(f) NYSE Listing. The New Holdings Shares to be issued to holders of
Trenwick Shares, LaSalle Holdings Shares and Minority Shares upon consummation
of the Plans shall have been authorized for trading on the NYSE, subject to
official notice of issuance.
(g) ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇ Opinion. New Holdings and LaSalle Holdings
shall have received an opinion of ▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇, dated the Effective
Date, on the basis of facts, representations and assumptions set forth in such
opinion that are consistent with the facts existing on the Effective Date,
substantially to the effect that (i) the Schemes of Arrangement will qualify as
an exchange under Section 351(a) of the Code, (ii) no gain or loss will be
68
recognized by United States transferors of LaSalle Holdings Shares who, actually
or constructively within the meaning of Section 958 of the Code, own less than
5% of both the total voting power and the total value of the shares of New
Holdings immediately after the Plans upon the receipt of solely New Holdings
Shares pursuant to the Schemes of Arrangement, (iii) no gain or loss will be
recognized by United States transferors of LaSalle Holdings Shares who own 5% or
more of the total voting power or the total value of the New Holdings Shares
immediately after the Plans upon the receipt of solely New Holdings Shares
pursuant to the Schemes of Arrangement, provided that such United States
transferors enter into gain recognition agreements meeting the requirements of
United States Treasury Regulation ss.1.367(a)-8, (iv) no gain or loss will be
recognized by United States transferors of Non-Voting Shares who, actually or
constructively within the meaning of Section 958 of the Code, own less than 5%
of both the total voting power and the total value of the shares of New Holdings
immediately after the Plans upon the receipt of solely New Holdings Shares
pursuant to the Schemes of Arrangement, and (v) no gain or loss will be
recognized by United States transferors of Non-Voting Shares who own 5%,
actually or constructively within the meaning of Section 958 of the Code, or
more of the total voting power or the total value of the New Holdings Shares
immediately after the Plans upon the receipt of solely New Holdings Shares
pursuant to the Schemes of Arrangement, provided that such United States
transferors enter into gain recognition agreements meeting the requirements of
United States Treasury Regulation 1.367(a)-8. In rendering such opinion, counsel
may require and rely upon representations contained in certificates of officers
of LaSalle Holdings, LaSalle Re, Trenwick, New Holdings, foreign counsel and
others.
(h) ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Opinion. New Holdings and Trenwick shall have
received an opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, dated the Effective Date, on the basis
of facts, representations and assumptions set forth in such opinion that are
consistent with the facts existing on the Effective Date substantially to the
effect that (i) no gain or loss will be recognized by United States shareholders
of Trenwick upon the receipt of solely New Holdings Shares pursuant to the Plan
of Reorganization (except with respect to cash received in lieu of a fractional
share interest in New Holdings Shares), and (ii) the Plan of Reorganization will
qualify as a tax-free reorganization within the meaning of Section 368(a). In
rendering such opinion, counsel may require and rely upon representations
contained in certificates of officers of LaSalle Holdings, LaSalle Re, Trenwick
and New Holdings.
Section 6.2. Additional Conditions to Trenwick's Obligation to Effect
the Plans. The obligation of Trenwick to consummate the Plans and to effect the
actions referred to in Section 2.2(c) shall be further subject to the following
conditions unless waived in accordance with Section 8.3:
(a) Performance of Obligations of LaSalle Holdings. LaSalle Holdings
shall have performed in all material respects the obligations and covenants to
be performed by it at or prior to the Effective Time.
(b) Representations and Warranties. The representations and warranties
of LaSalle Holdings contained in this Agreement that are qualified as to
materiality shall be true and correct and the representations and warranties of
LaSalle Holdings contained in this Agreement that are not so qualified shall be
true and correct in all material respects, in each case as of the date of the
Original Agreement and (except to the extent such representations and warranties
speak as of an earlier date) as of the Closing Date as though made as of and on
the Closing Date, except for such failure or failures to be true and correct (or
true and correct in all material respects) as would not have or be reasonably
expected to have, individually or in the aggregate, a Material Adverse Effect on
LaSalle Holdings.
69
(c) Compliance with Conditions. Trenwick shall receive customary
closing documents in form and substance reasonably satisfactory to it, including
a certificate of an executive officer of LaSalle Holdings certifying compliance
with the conditions set forth in Sections 6.2(a) and (b).
(d) Comfort Letters. Trenwick shall have received from Deloitte &
Touche LLP the letters described in Section 5.17(a).
(e) Consents and Approvals. Trenwick shall have received evidence, in
form and substance reasonably satisfactory to it, that all consents and
approvals set forth in Section 4.8 of the LaSalle Disclosure Letter have been
obtained.
(f) Fiduciary Duties. The Board of Directors of LaSalle Holdings shall
not have (A) withdrawn or modified or changed in a manner adverse to Trenwick
its approval or recommendation of this Agreement in order to approve and permit
LaSalle Holdings to execute a definitive agreement relating to a LaSalle
Holdings Superior Proposal (as defined in Section 5.3(b)(ii)), and (B)
determined in good faith, after consultation with outside legal counsel to
LaSalle Holdings that the failure to take such action as set forth in the
preceding clause (A) is reasonably likely to result in the breach of the
respective Board of Directors' fiduciary duties under applicable law.
(g) ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Opinion. New Holdings and Trenwick shall have
received an opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, dated the Effective Date, on the basis
of facts, representations and assumptions set forth in such opinion that are
consistent with the facts existing on the Effective Date substantially to the
effect that Trenwick shall treat the Plan of Reorganization as a taxable
disposition of assets directly held by Trenwick, but that Trenwick shall not be
subject to U.S. federal income tax in excess of $60.0 million with respect to
such gain. In rendering such opinion, counsel may require and rely upon
representations contained in certificates of officers of LaSalle Holdings,
LaSalle Re, Trenwick and New Holdings, including representations regarding the
adjusted tax basis of the assets of Trenwick. In addition, in rendering such
opinion, counsel may require and rely upon opinions prepared by valuation
experts, including opinions regarding the fair market value of the assets of
Trenwick, foreign counsel and others.
(h) No Material Adverse Change. At any time after the date of the
Original Agreement there shall not have occurred any Material Adverse Change
relating to LaSalle Holdings; provided, that this condition shall no longer be
applicable following the approval of the LaSalle Holdings' shareholders.
70
Section 6.3. Additional Conditions to LaSalle Holdings' Obligation to
Effect the Plans. The obligation of LaSalle Holdings to consummate the Plans and
to effect the actions referred to in Section 2.2(c) shall be further subject to
the following conditions unless waived in accordance with Section 8.3:
(a) Performance of Obligations of Trenwick. Trenwick shall have
performed in all material respects the obligations and covenants to be performed
by it at or prior to the Effective Time.
(b) Representations and Warranties. The representations and warranties
of Trenwick contained in this Agreement that are qualified as to materiality
shall be true and correct and the representations and warranties of Trenwick
contained in this Agreement that are not so qualified shall be true and correct
in all material respects, in each case as of the date of the Original Agreement
and (except to the extent such representations and warranties speak as of an
earlier date) as of the Closing Date (immediately prior to the Effective Time
and after giving effect to any internal reorganizations of Trenwick and its
Subsidiaries), as though made as of and on the Closing Date (immediately prior
to the Effective Time and after giving effect to any internal reorganizations of
Trenwick and its Subsidiaries), except for such failure or failures to be true
and correct (or true and correct in all material respects) as would not have or
be reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect on Trenwick.
(c) Compliance with Conditions. LaSalle Holdings shall receive
customary closing documents in form and substance reasonably satisfactory to it,
including a certificate of an executive officer of Trenwick certifying
compliance with the conditions set forth in Sections 6.3(a) and (b).
(d) Comfort Letters. LaSalle Holdings shall have received from
PricewaterhouseCoopers LLP the letters described in Section 5.17(b).
(e) Consents and Approvals. LaSalle Holdings shall have received
evidence, in form and substance reasonably satisfactory to it, that all consents
and approvals set forth in Section 3.8 of the Trenwick Disclosure Letter have
been obtained.
(f) Rights Agreement. Trenwick shall have taken all necessary action
pursuant to Section 3.20 so that, as of immediately prior to the Effective Time,
(i) none of Trenwick, New Holdings and LaSalle Holdings will have any
obligations under the Rights or the Rights Agreement and (ii) the holders of the
Rights will have no rights under the Rights or the Rights Agreement.
(g) Fiduciary Duties. The Board of Directors of Trenwick shall not have
(A) withdrawn or modified or changed in a manner adverse to LaSalle Holdings its
approval or recommendation of this Agreement in order to approve and permit
Trenwick to execute a definitive agreement relating to a Trenwick Superior
Proposal (as defined in Section 5.3(a)(ii)), and (B) determined in good faith,
after consultation with outside legal counsel to Trenwick that the failure to
take such action as set forth in the preceding clause (A) is reasonably likely
to result in the breach of the respective Board of Directors' fiduciary duties
under applicable law.
71
(h) ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ Opinion. In addition to those matters set forth in
Section 6.3(h) of the Trenwick Disclosure Letter, New Holdings and Trenwick
shall have received an opinion of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, dated the Effective Date, on
the basis of facts, representations and assumptions set forth in such opinion
that are consistent with the facts existing on the Effective Date substantially
to the effect that Trenwick shall treat the Plan of Reorganization as a taxable
disposition of assets directly held by Trenwick, but that Trenwick shall not be
subject to U.S. federal income tax in excess of $40.0 million with respect to
such gain. In rendering such opinion, counsel may require and rely upon
representations contained in certificates of officers of LaSalle Holdings,
LaSalle Re, Trenwick and New Holdings, including representations regarding the
adjusted tax basis of the assets of Trenwick. In addition, in rendering such
opinion, counsel may require and rely upon opinions prepared by valuation
experts, including opinions regarding the fair market value of the assets of
Trenwick, foreign counsel and others.
(i) No Material Adverse Change. At any time after the date of the
Original Agreement, there shall not have occurred any Material Adverse Change
relating to Trenwick; provided, that this condition shall no longer be
applicable following the approval of the Trenwick stockholders.
ARTICLE 7
TERMINATION AND ABANDONMENT
Section 7.1. Termination by Trenwick or LaSalle Holdings. Anything
herein contained to the contrary notwithstanding, this Agreement may be
terminated and the Plans contemplated hereby may be abandoned at any time prior
to the Effective Time, whether before or after approval of the Plans by the
shareholders of LaSalle Holdings and LaSalle Re or the stockholders of Trenwick,
respectively:
(a) by the mutual written consent of LaSalle Holdings and Trenwick;
(b) by either LaSalle Holdings or Trenwick by written notice to
the other:
(i) if the Effective Time shall not have occurred on or before
June 30, 2000; provided, however, that the right to terminate
this Agreement under this Section 7.1(b)(i) shall not be
available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in,
the failure of the Effective Time to occur on or before such
date;
(ii) if a Governmental Authority shall have issued a final and
nonappealable order, decree or ruling or taken any other
action (which order, decree, ruling or other action the
parties hereto shall use their commercially reasonable efforts
to lift), in each case, permanently restraining, enjoining or
otherwise prohibiting the transactions contemplated by this
Agreement and such order, decree, ruling or other action shall
have become final and nonappealable;
72
(iii) if the required approval of the classes of stockholders
of Trenwick shall not have been obtained by reason of the
failure to obtain the required vote at a duly held meeting of
such stockholders or at any adjournment or postponement
thereof; provided, that, if the terminating party is Trenwick,
Trenwick shall not be in material breach of its obligations
under Section 5.8;
(iv) if the required approval of the shareholders of LaSalle
Holdings and LaSalle Re shall not have been obtained by reason
of the failure to obtain the required vote at a duly held
meeting of such shareholders or at any adjournment or
postponement thereof; provided, that, if the terminating party
is LaSalle Holdings, LaSalle Holdings shall not be in material
breach of its obligations under Section 5.8; or
(v) if any single natural catastrophe shall have occurred
which would result in Net Losses to LaSalle Holdings and its
Subsidiaries or to Trenwick and its Subsidiaries of
$100,000,000 or more.
Section 7.2. Termination by Trenwick.
(a) Trenwick may terminate this Agreement prior to the Effective Time
if LaSalle Holdings (x) breaches or fails in any material respect to perform or
comply with any of its covenants and agreements contained herein or (y) breaches
its representations or warranties and such breach would have or would be
reasonably likely to have a Material Adverse Effect on LaSalle Holdings and its
Subsidiaries, in each case such that the conditions set forth in Section 6.2(a)
or 6.2(b) would not be satisfied; provided, however, that if such breach is
cured by the breaching party within ten (10) days following the discovery of
such breach, Trenwick may not terminate this Agreement pursuant to this Section
7.2.
(b) Trenwick may terminate this Agreement prior to the Effective Time
if LaSalle Holdings has (A) withdrawn or modified or changed in a manner adverse
to Trenwick its approval or recommendation of this Agreement, or (B) determined
in good faith, after consultation with outside legal counsel to LaSalle Holdings
that the failure to take such action as set forth in the preceding clause (A) is
reasonably likely to result in the breach of the respective Board of Directors'
fiduciary duties under applicable law.
(c) Prior to the Effective Time, Trenwick may terminate this Agreement
as provided in Section 5.3(a)(ii); provided, that Trenwick shall have given
LaSalle Holdings forty-eight (48) hours advance notice of any termination
pursuant to this Section 7.2(b) and that Trenwick shall have paid LaSalle
Holdings the Trenwick Termination Fee required to be paid by Trenwick pursuant
to Section 7.4(b) hereof. Trenwick agrees to notify LaSalle Holdings promptly if
it is no longer prepared to accept the Trenwick Superior Proposal.
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Section 7.3. Termination by LaSalle Holdings.
(a) LaSalle Holdings may terminate this Agreement prior to the
Effective Time if Trenwick (x) breaches or fails in any material respect to
perform or comply with any of its covenants and agreements contained herein or
(y) breaches its representations or warranties and such breach would have or
would be reasonably likely to have a Material Adverse Effect on Trenwick and its
Subsidiaries, in each case such that the conditions set forth in Section 6.3(a)
or 6.3(b) would not be satisfied; provided, however, that if such breach is
cured by the breaching party within ten (10) days following the discovery of
such breach, LaSalle Holdings may not terminate this Agreement pursuant to this
Section 7.3(a).
(b) LaSalle Holdings may terminate this Agreement prior to the
Effective Time if Trenwick has (A) withdrawn or modified or changed in a manner
adverse to LaSalle Holdings its approval or recommendation of this Agreement, or
(B) determined in good faith, after consultation with outside legal counsel to
Trenwick that the failure to take such actions as set forth in the preceding
clause (A) is reasonably likely to result in the breach of the respective Board
of Directors' fiduciary duties under applicable law.
(c) Prior to the Effective Time, LaSalle Holdings may terminate this
Agreement as provided in Section 5.3(b)(ii); provided, that LaSalle Holdings
shall have given Trenwick forty-eight (48) hours advance notice of any
termination pursuant to this Section 7.3(b) and that LaSalle Holdings shall have
paid Trenwick the LaSalle Termination Fee required to be paid by LaSalle
Holdings pursuant to Section 7.4(c) hereof. LaSalle Holdings agrees to notify
Trenwick promptly if it is no longer prepared to accept the LaSalle Holdings
Superior Proposal.
Section 7.4. Procedure and Effect of Termination.
(a) In the event of the termination of this Agreement, except as set
forth in Section 7.4(b) and Section 7.4(c), none of the parties hereto shall
have any obligation to perform hereunder from and after the date of such
termination, except that Sections 5.4 (the last sentence only)
(Confidentiality), 5.6 (Public Announcements), 8.5 (Expenses and Obligations),
8.7 (Notices) and 8.8 (Governing Law) shall survive such termination and remain
in full force and effect notwithstanding such termination. No termination hereof
shall relieve any party from any liability resulting from any breach of any of
its representations, warranties, covenants or agreements set forth in this
Agreement.
(b) If this Agreement is terminated by (i) any party pursuant to
Section 7.1(b)(i) or 7.1(b)(iii), and in either case there shall have been made
or commenced a Trenwick Takeover Proposal, which Trenwick Takeover Proposal
shall not have been absolutely and unconditionally withdrawn and abandoned as of
the date of such termination, (ii) Trenwick pursuant to Section 7.2(c) or (iii)
LaSalle Holdings pursuant to Section 7.3(a) if there is a Trenwick Takeover
Proposal outstanding at the time of the breach or 7.3(b), then Trenwick shall
pay LaSalle Holdings a non-refundable termination fee of $12,000,000, plus
expenses not to exceed $2,000,000 (the "Trenwick Termination Fee"), which amount
shall be payable by wire transfer of same-day funds prior to, and as a condition
of, the effectiveness of such termination.
74
(c) If this Agreement is terminated by (i) any party pursuant to
Section 7.1(b)(i) or 7.1(b)(iii), and in either case there shall have been made
or commenced a LaSalle Holdings Takeover Proposal, which LaSalle Holdings
Takeover Proposal shall not have been absolutely and unconditionally withdrawn
and abandoned as of the date of such termination, (ii) LaSalle Holdings pursuant
to Section 7.3(c) or (iii) Trenwick pursuant to Section 7.2(a) if there is a
LaSalle Holdings Takeover Proposal outstanding at the time of the breach or
7.2(b), then LaSalle Holdings shall pay Trenwick a non-refundable termination
fee of $12,000,000, plus expenses not to exceed $2,000,000 (the "LaSalle
Termination Fee"), which amount shall be payable by wire transfer of same-day
funds prior to, and as a condition of, the effectiveness of such termination.
ARTICLE 8
MISCELLANEOUS PROVISIONS
Section 8.1. Non-Survival of Representations, Warranties, Covenants and
Agreements. None of the representations, warranties, covenants or agreements
contained in this Agreement or in any Disclosure Letter, Exhibit or any document
delivered pursuant to this Agreement shall survive the Closing, except for those
covenants and agreements contained in this Agreement that by their terms apply
or are to be performed in whole or in part after the Closing.
Section 8.2. Amendment and Modification. Subject to applicable law,
this Agreement may be amended, modified or supplemented only by written
agreement signed on behalf of each party hereto at any time prior to the
Effective Time with respect to any of the terms contained herein except that (i)
after the meetings of the stockholders of Trenwick as contemplated by Section
5.8, Trenwick Consideration to be paid pursuant to this Agreement to the holders
of Trenwick Shares shall in no event be decreased and the form of consideration
to be received by the holders of such Trenwick Shares in the Plan of
Reorganization shall in no event be altered without the approval of such
holders, (ii) after the meetings of the shareholders of LaSalle Holdings as
contemplated by Section 5.8, LaSalle Consideration to be paid pursuant to this
Agreement to the holders of LaSalle Holdings Shares shall in no event be
decreased and the form of consideration to be received by the holders of such
LaSalle Holdings Shares in the Schemes of Arrangement shall in no event be
altered without the approval of such holders, and (iii) after the meetings of
the stockholders of Trenwick, LaSalle Holdings or LaSalle Re as contemplated by
Section 5.8, there shall be made no amendment that by law requires further
approval by such stockholders without the further approval of such stockholders.
75
Section 8.3. Waiver of Compliance; Consents.
(a) Any failure of any party to this Agreement to comply with any
obligation, covenant, agreement or condition herein may be waived by written
instrument executed by each other party to this Agreement, but such waiver or
failure to insist upon strict compliance with such obligation, covenant,
agreement or condition shall not operate as a waiver of, or estoppel with
respect to, any subsequent or other failure.
(b) Whenever this Agreement requires or permits consent by or on behalf
of any party hereto, such consent shall be given in writing in a manner
consistent with the requirements for a waiver of compliance as set forth in this
Section 8.3.
Section 8.4. Severability and Validity. The provisions set forth in
this Agreement are severable. If any term, provision, covenant or restriction of
this Agreement is held by record of competent jurisdiction or other authority to
be invalid, void or unenforceable in any jurisdiction or against its regulatory
or public policy, the remainder of this Agreement, and the application of such
provision to other Persons or circumstances, shall not be affected thereby and
shall remain valid and enforceable in such jurisdiction, and any such invalidity
or unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Upon a determination
that any term, provision, covenant or restriction is invalid, void or
unenforceable or against the regulatory or public policy of the governing
jurisdiction, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible to the fullest extent permitted by applicable law in an acceptable
manner to the end that the transactions contemplated by this Agreement are
fulfilled to the extent possible.
Section 8.5. Expenses and Obligations. Each of the parties shall
pay its own expenses incurred in connection with the negotiation and preparation
of the Original Agreement and this Agreement, the performance of its covenants
herein and therein and the effectuation of the transactions contemplated hereby
and thereby, including, without limitation, all fees and disbursements of its
respective legal counsel, advisors and accountants; provided, however, that
nothing in this Section 8.5 shall negate any obligation of either LaSalle
Holdings or Trenwick to pay the termination fee specified in Sections 7.4(b) and
(c). Each of the LaSalle Holdings and Trenwick shall bear and pay one-half of
the filing fees, printing expenses and mailing costs incurred in connection with
(1) the filing, printing and mailing of the Form S-4 and the Joint Proxy
Statement (including SEC filing fees) and (2) the filings of any required
premerger notification and report forms under the HSR Act (including filing
fees) and one-half of the fees of the Settlement Auditor. In the event that the
transactions contemplated by this Agreement are not consummated, each of the
parties shall indemnify and hold harmless the other parties against any claim
for fees or commissions of brokers, finders, agents or bankers retained or
purportedly retained by the indemnitor party in connection with the transactions
contemplated by this Agreement.
Section 8.6. Parties in Interest. This Agreement shall be binding
upon and inure solely to the benefit of each party hereto and nothing in this
Agreement, express or implied, is intended to confer upon any other Person any
rights or remedies of any nature whatsoever under or by reason of this
Agreement, except for Section 5.13 (which is intended to be for the benefit of
the Persons referred to therein and may be enforced by such Persons).
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Section 8.7. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by facsimile
(which is confirmed) or sent by overnight courier (providing proof of delivery)
or by registered or certified mail (postage prepaid, return receipt requested),
to the other party at the following address (or at such other address for a
party as shall be specified by like notice):
if to LaSalle Holdings before the Effective Date, to:
LaSalle Re Holdings Limited
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇ FX, Bermuda
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
if to Trenwick before the Effective Date, to:
Trenwick Group Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. Del Col, Esq.
with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
77
if to LaSalle Holdings, Trenwick or New Holdings after the Effective
Date:
▇▇▇▇▇ Holdings International Limited
c/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
P.O. Box HM 1178
▇▇▇▇▇▇▇▇ ▇▇ EX, Bermuda
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq.
with a copy to:
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
or to such other address as the person to whom notice is given may have
previously furnished to the other in writing in the manner set forth above.
Section 8.8. Governing Law. Except for Article 2, which shall be
governed by and construed in accordance with the laws of Bermuda and Delaware,
as applicable according to the context thereof (i.e., with matters relating to
the Schemes of Arrangement being governed by Bermuda law and matters relating to
the Plan of Reorganization being governed by Delaware law), this Agreement shall
be governed by and construed in accordance with the laws of the State of
Delaware, without regard to the conflicts of laws rules thereof. In addition,
each of the parties hereto (a) consents to submit itself to the personal
jurisdiction of any Delaware Court in the event any dispute arises out of this
Agreement or any of the transactions contemplated by this Agreement and (b)
agrees that it will not attempt to deny or defeat such personal jurisdiction or
venue by motion or other request for leave from any such Delaware Court, and (c)
agrees that it will not bring any action relating to this Agreement or any of
the transactions contemplated by this Agreement in any court other than any
Delaware Court.
Section 8.9. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be an original, and all of which shall be
considered one and the same agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other party.
Section 8.10. Headings. The Article and Section headings contained in
this Agreement are solely for the purpose of reference, are not part of the
agreement of the parties and shall not affect in any way the meaning or
interpretation of this Agreement. References to Articles or Sections, unless
otherwise specified, are to Articles and Sections of this Agreement.
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Section 8.11. Entire Agreement; Assignment. This Agreement, including
the documents and instruments referred to herein and therein, and the
Confidentiality Letters embodies the entire agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein.
There are no agreements, restrictions, promises, representations, warranties,
covenants or undertakings, other than those expressly set forth or referred to
herein. This Agreement supersedes all prior agreements and understandings
between the parties with respect to such subject matters. This Agreement shall
not be assigned by operation of law or otherwise, except with the prior written
consent of each other party hereto; provided, that the transactions contemplated
by Section 2.1(b) shall not be considered an assignment by operation of law or
otherwise for purposes of this Section 8.11. Any assignment in violation of the
preceding sentence shall be void. Subject to the preceding two sentences, this
Agreement will be binding upon, inure to the benefit of, and be enforceable by,
the parties and their respective successors and assigns.
Section 8.12. Interpretation. When a reference is made in this
Agreement to an Article, Section, Exhibit, Letter or Schedule, such reference
shall be to an Article or Section of, or an Exhibit, Letter or Schedule to, this
Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." The phrase "made
available" in this Agreement shall mean that the information referred to has
been made available if requested by the party to whom such information is to be
made available. The words "hereof", "herein" and "hereunder" and the words or
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement. All terms defined
in this Agreement shall have the defined meanings when used in any certificate
or other document made or delivered pursuant hereto unless otherwise defined
therein. The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such term. Any agreement, instrument or
statute defined or referred to herein or in any agreement or instrument that is
referred to herein means such agreement, instrument or statute as from time to
time amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes. References to a person are also to its permitted
successors and assigns.
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IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be signed and sealed on its behalf by its duly authorized officers,
all as of the day and year first above written.
LASALLE RE HOLDINGS LIMITED
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: President and Chief Executive
Officer
LASALLE RE LIMITED
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title: President and Chief Executive
Officer
▇▇▇▇▇ HOLDINGS INTERNATIONAL LIMITED
By: /s/ ▇▇▇▇ ▇. Del Col
-------------------------------
Name: ▇▇▇▇ ▇. Del Col
Title: Director
TRENWICK GROUP INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Chairman, President and
Chief Executive Officer
80
IN WITNESS WHEREOF, Trenwick Group (Delaware) Inc. has caused this
Agreement to be signed and sealed on its behalf by its duly authorized officer,
all as of the day and year first written above in accordance with Section 8.2 of
the Original Agreement to reflect its agreement to the amendment and restatement
of the Original Agreement but agrees that it is no longer a party to this
Agreement.
TRENWICK GROUP (DELAWARE) INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
------------------------------
Its: Chairman, President and
Chief Executive Officer
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