LaSalle Re Holdings Limited
Trenwick Group Ltd.
00 Xxxxxx Xxxxxx
Xxxxxxxx XX 00
Bermuda
September 27, 2000
Xx. Xxxxx X. Xxxxxxx
Member of Senior Management
European Reinsurance Company of Zurich
0 Xxx-xx-Xxxxx Xxxx
Xxxxxxxx XX 00
Bermuda
Re: Catastrophe Equity Securities Issuance Option Agreement entered into as of
July 1, 1999 (the "Agreement")
Dear Xxxxx:
Subject to the second and third sentences of this paragraph, European
Reinsurance Company of Zurich ("ERZ"), as holder of a Majority Option Interest
as defined in the Agreement, approves the Change in Control (as defined in the
Agreement) resulting from the consummation of the transactions contemplated by
the Amended and Restated Agreement, Schemes of Arrangement and Plan of
Reorganization, dated as of March 20, 2000 and amended as of June 28, 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 of LaSalle Holdings ("LaSalle
Re"), Trenwick Group Inc., a Delaware corporation ("Trenwick"), and Xxxxx
Holdings International Limited, a company organized under the laws of Bermuda
which has changed its name to Trenwick Group Ltd. ("New Holdings"), whereby (i)
holders of common shares of LaSalle Holdings ("LaSalle Common Shares"), holders
of exchangeable non-voting common shares of LaSalle Re and holders of common
stock of Trenwick will become shareholders of New Holdings and (ii) LaSalle
Holdings, LaSalle Re and the current subsidiaries of Trenwick will become
subsidiaries of New Holdings (the "Business Combination"), which Business
Combination is scheduled to close on or about September 27, 2000. As a result of
this approval, in accordance with Section 6.8 of the Agreement, the Agreement
shall remain in full force and effect; provided, however, that the Agreement
shall only remain in effect for a transition period ending at 11:59:59 p.m.,
Bermuda Time, on December 31, 2000 (the "Transition Period"), subject to payment
to the Option Writers (as defined in the Agreement) of a pro rata portion of the
Option Fee (as defined in the Agreement) that is due on October 1, 2000 for the
period from October 1, 2000 through December 31, 2000, ERZ and LaSalle Holdings
agree that immediately following the end of the Transition Period, the fact of
the Business Combination having been consummated shall constitute a Change in
Control for purposes of Section 6.8 of the Agreement.
For the avoidance of doubt, during the Transition Period, the definition of
"Company Subsidiaries" in the Agreement shall remain unchanged and shall
continue to refer exclusively to LaSalle Re, LaSalle Re Corporate Capital Ltd.,
a company formed under the laws of Bermuda, and such other direct or indirect
subsidiaries of LaSalle Holdings as may be agreed in writing between LaSalle
Holdings and the Option Writers.
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Inasmuch as the Agreement provides for the purchase by the Option Writers,
subject to the terms and conditions thereof, of Series B Preferred Shares, par
value $1.00 per share, of LaSalle Holdings ("Preferred Shares"), which are
convertible by their terms into LaSalle Common Shares, New Holdings hereby
assumes, subject to and concurrently with the consummation of the Business
Combination, the obligation to deliver to each holder of Preferred Shares, in
the event of any conversion thereof, upon the basis and upon the terms and
conditions specified in Section 6 of the Certificate of Designation, Preferences
and Rights of the Preferred Shares (the "Certificate"), in lieu of the LaSalle
Common Shares that would have been delivered upon such conversion had the
Business Combination not been consummated, common shares of New Holdings ("New
Holdings Common Shares"), provided that all references in the Certificate to
"Common Shares" shall be deemed to refer to New Holdings Common Shares rather
than to LaSalle Common Shares.
Inasmuch as LaSalle Holdings and the Option Writers have entered into a
Registration Rights Agreement, dated as of July 1, 1997 (the "Registration
Rights Agreement"), which grants the Option Writers certain registration rights
with respect to LaSalle Common Shares issued pursuant to the conversion of
Preferred Shares, New Holdings hereby assumes, subject to and concurrently with
the consummation of the Business Combination, the obligations of LaSalle
Holdings pursuant to the Registration Rights Agreement; provided that (a) such
obligations shall apply to the New Holdings Common Shares rather than the
LaSalle Common Shares; and (b) the New Holdings Common Shares rather than the
LaSalle Common Shares shall constitute Conversion Shares and Registrable
Securities for the purposes of the Registration Rights Agreement.
Please confirm the above agreement by signing and returning the enclosed
duplicate original of this letter by both fax and courier at your earliest
convenience, but in no case later than September 26, 2000. Your cooperation is
appreciated.
Sincerely,
LASALLE RE HOLDINGS LIMITED TRENWICK GROUP LTD.
By: /s/ Xxxxx Xxxxx By: /s/ Xxxx X. Del Col
----------------------- -----------------------
Name: Xxxxx Xxxxx Name: Xxxx X. Del Col
Title: SVP - Finance Title: SVP, General Counsel
and Secretary
Accepted and Agreed:
EUROPEAN REINSURANCE COMPANY OF ZURICH
By: /s/ Xxxxx X. Xxxxxxx By: /s/ Xxx Xxxxxxx
------------------------- -------------------------
Name: Xxxxx X. Xxxxxxx Name: Xxx Xxxxxxx
Title: Member of Senior Management Title: Member of Senior
Management
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