EXHIBIT 99.8
LETTER AGREEMENT
Annuity and Life Re (Holdings), Inc.
March 2, 2000
Risk Capital Reinsurance Company
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Xxxxxxxx Investments Inc.
c/o XL Capital Ltd
Cumberland House
One Victoria Street
Xxxxxxxx XX 11, Bermuda
Re: Securities Purchase Agreement
-----------------------------
Ladies and Gentlemen:
Reference is made to the Stock Repurchase Agreement (the "Repurchase
Agreement"), dated as of January 17, 2000, by and among XL Capital Ltd ("XL"),
Xxxxxxxx Investments Inc., a wholly owned subsidiary of XL (the "XL Sub"), Risk
Capital Holdings, Inc. ("RCH") and Risk Capital Reinsurance Company, a wholly
owned subsidiary of RCH (the "RCH Sub"). Pursuant to the Repurchase Agreement,
the XL Sub is selling, and RCH is repurchasing from the XL Sub, 4,755,000 shares
of RCH common stock owned by the XL Sub (the "RCH Shares"). As part of the
consideration for the sale of the RCH Shares, RCH has agreed to transfer
1,418,440 common shares (the "ALRE Shares") of Annuity & Life Re (Holdings),
Inc. ("ALRE") and warrants to purchase 100,000 common shares of ALRE (the "ALRE
Warrants"). Reference is also made to the Letter Agreement, dated as of March 4,
1998, between the RCH Sub and ALRE, relating to the RCH Sub's right to designate
one individual to be nominated as a director of ALRE (the "Letter Agreement").
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and intending to be legally bound hereby, the RCH
Sub and ALRE agree that the Letter Agreement will terminate upon the
effectiveness of this letter agreement.
For good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, and intending to be legally bound hereby, and in
order to permit XL to account for its investment in ALRE using the equity method
of accounting under U.S. generally accepted accounting principles, XL and ALRE
agree that for so long as XL or any wholly owned subsidiary of XL, including the
XL Sub, beneficially owns, alone or in the aggregate, at least 500,000 common
shares of ALRE (including for this purpose shares issuable pursuant to the ALRE
Warrants), XL shall have the right to designate one individual for election to
the board of directors of ALRE. Upon timely receipt by ALRE of XL's written
exercise of such right, ALRE shall cause such individual to be nominated for
election as a director of ALRE at the next annual general meeting of ALRE
(provided no person previously selected by XL is a member of a class of
directors of ALRE not standing for election at such meeting). The initial
designee of XL shall be Xxxxx X. X'Xxxx.
XL and ALRE agree that XL may assign its rights hereunder to the XL
Sub or any other wholly owned subsidiary of XL, in its sole discretion, and may
assign its right hereunder to any transferee of the required minimum number of
shares referred to above, and it may agree to exercise such right at the
direction of any other person, provided that it has received the prior written
consent of ALRE, such written consent not to be unreasonably withheld. XL
further agrees that it shall be reasonable for ALRE to withhold such prior
written consent in situations including, but not limited to, those in which XL
[agrees to assign its right to, or to act at the direction of, Lincoln National
Corporation, Transamerica Occidental Life Insurance Company, Reinsurance Group
of America Inc., General Re Corp., Life Re Corp., Employers Reassurance
Corporation, Swiss Reinsurance or Munich Reinsurance, or situations in which] XL
agrees to assign its right or to act at the direction of an entity where such
assignment or act would result in ALRE becoming a "controlled foreign
corporation" within the meaning set forth in the rules of the United States
Internal Revenue Code. As a condition of any such assignment or agreement to act
at the direction of any other person, such assignee or other person shall
execute a letter agreement indicating its intention to be bound by the terms of
this letter agreement (provided that no such letter agreement shall be required
in the event that XL assigns its rights to the XL Sub or any other wholly owned
subsidiary of XL, in which case XL shall remain liable for all obligations
hereunder).
This letter agreement shall become effective upon the closing of the
transactions contemplated by the Repurchase Agreement, which closing is expected
to occur on the date hereof.
Very truly yours,
ANNUITY AND LIFE RE (HOLDINGS), LTD.
--------------------------------
Name:
Title:
Acknowledged by:
Risk Capital Reinsurance Company XL Capital Ltd
-------------------------------- ---------------------------------
Name: Name:
Title: Title:
