AGREEMENT,
SCHEME OF ARRANGEMENT,
PLAN OF MERGER
AND
PLAN OF REORGANIZATION
BY AND AMONG
LASALLE RE HOLDINGS LIMITED,
LASALLE RE LIMITED,
TRENWICK GROUP INC.,
TRENWICK GROUP (DELAWARE) INC.,
AND
XXXXX HOLDINGS INTERNATIONAL LIMITED
DATED AS OF DECEMBER 19, 1999
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...............7
Section 2.3. Effects of the Plans...............................8
Section 2.4. Governing Documents................................9
Section 2.5. Board of Directors of New Holdings................10
Section 2.6. Terms of the Scheme of Arrangement: Exchange
of Securities.....................................10
Section 2.7. Terms of the Plan of Merger and the Plan of
Reorganization: Conversion and Issuance
of Securities.....................................11
Section 2.8. Terms of the Scheme of Arrangement: Surrender
and Payment.......................................12
Section 2.9. Terms of the Plan of Merger and the Plan
of Reorganization:
Surrender and Payment.............................14
Section 2.10. Voting............................................15
Section 2.11. Lost Certificates.................................15
Section 2.12. No Fractional Shares..............................15
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF TRENWICK........16
Section 3.1. Corporation; Organization.........................16
Section 3.2. Authority; Approval and Fairness..................17
Section 3.3. Capital Structure.................................17
Section 3.4. SEC Reports; Financial Statements.................19
Section 3.5. Absence of Certain Changes or Events..............20
Section 3.6. Certain Fees......................................20
Section 3.7. No Defaults.......................................20
Section 3.8. Consents..........................................21
Section 3.9. Compliance with Applicable Law....................21
Section 3.10. Information Supplied..............................22
Section 3.11. Material Contracts................................22
Section 3.12. Taxes.............................................23
Section 3.13. Litigation........................................24
Section 3.14. Title to Properties; Leases.......................24
Section 3.15. Employees.........................................25
Section 3.16. Benefit Plans.....................................25
Section 3.17. Intellectual Property.............................31
Section 3.18. Takeover Statutes.................................32
Section 3.19. Opinion of Financial Advisor......................32
Section 3.20. Rights Agreement..................................32
Section 3.21. Insurance Matters.................................32
Section 3.22. Liabilities and Reserves..........................33
Section 3.23. Investment Company................................33
Section 3.24. Finite Risk Reinsurance...........................34
Section 3.25. Reinsurance Contracts, Coverholders and MGAs......34
Section 3.26. Derivatives.......................................35
Section 3.27. Related Party Transactions........................35
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF LASALLE
HOLDINGS..........................................35
Section 4.1. Corporation; Organization.........................35
Section 4.2. Authority; Approval and Fairness..................36
Section 4.3. Capital Structure.................................37
Section 4.4. SEC Reports; Financial Statements.................38
Section 4.5. Absence of Certain Changes or Events..............39
Section 4.6. Certain Fees......................................40
Section 4.7. No Defaults.......................................40
Section 4.8. Consents..........................................40
Section 4.9. Compliance with Applicable Law....................41
Section 4.10. Information Supplied..............................41
Section 4.11. Material Contracts................................41
Section 4.12. Taxes.............................................42
Section 4.13. Litigation........................................43
Section 4.14. Title to Properties; Leases.......................44
Section 4.15. Approval of Scheme of Arrangement.................44
Section 4.16. Employees.........................................44
Section 4.17. Intellectual Property.............................45
Section 4.18. Takeover Statutes.................................46
Section 4.19. Opinions of Financial Advisors....................46
Section 4.20. Insurance Matters.................................46
Section 4.21. Liabilities and Reserves..........................47
Section 4.22. Investment Company................................47
Section 4.23. Reinsurance Contracts, Coverholders and MGAs......47
Section 4.24. Derivatives.......................................48
Section 4.25. Related Party Transactions........................48
Section 4.26. Finite Risk Reinsurance...........................48
ARTICLE 5 COVENANTS.........................................49
Section 5.1. Conduct of Business of Trenwick...................49
Section 5.2. Conduct of Business of LaSalle Holdings...........52
Section 5.3. No Solicitation...................................55
Section 5.4. Access to Information; Confidentiality............59
Section 5.5. Form S-4; Regulatory Matters......................59
Section 5.6. Public Announcements..............................60
Section 5.7. Supplemental Information..........................60
Section 5.8. Shareholders' Meetings............................60
Section 5.9. Trenwick Options, LaSalle Holdings Options,
LaSalle Re Options and Trenwick Warrants..........61
Section 5.10. Takeover Laws.....................................63
Section 5.11. Affiliates........................................63
Section 5.12. Stock Exchange Listing............................63
Section 5.13. Indemnification and Insurance.....................64
Section 5.14. Commercially Reasonable Efforts...................65
Section 5.15. Post-Closing Matters..............................65
Section 5.16. Employee Benefit Plans; Existing Agreements.......65
Section 5.17. Letters from Accountants..........................66
Section 5.18. Litigation........................................67
Section 5.19. Advice of Changes.................................67
Section 5.20. Trenwick Rights Agreement.........................67
Section 5.21. New Holdings Rights Agreement.....................67
Section 5.22. Organization of Trenwick Subsidiaries.............67
Section 5.23. Assumption of Non-Voting Share Conversion
Obligation........................................68
Section 5.24. Assumption of Series B Preferred Share
Conversion Obligation.............................68
Section 5.25. Tax-Free Reorganization...........................68
ARTICLE 6 CONDITIONS TO THE PLANS...........................68
Section 6.1. Conditions to Each Party's Obligation to
Effect the Plans..................................68
Section 6.2. Additional Conditions to Trenwick's Obligation
to Effect the Plans...............................70
Section 6.3. Additional Conditions to LaSalle Holdings'
Obligation to Effect the Plans....................71
ARTICLE 7 TERMINATION AND ABANDONMENT.......................73
Section 7.1. Termination by Trenwick or LaSalle Holdings.......73
Section 7.2. Termination by Trenwick...........................74
Section 7.3. Termination by LaSalle Holdings...................74
Section 7.4. Procedure and Effect of Termination...............75
ARTICLE 8 MISCELLANEOUS PROVISIONS..........................76
Section 8.1. Non-Survival of Representations, Warranties,
Covenants and Agreements..........................76
Section 8.2. Amendment and Modification........................76
Section 8.3. Waiver of Compliance; Consents....................76
Section 8.4. Severability and Validity.........................77
Section 8.5. Expenses and Obligations..........................77
Section 8.6. Parties in Interest...............................77
Section 8.7. Notices...........................................77
Section 8.8. Governing Law.....................................79
Section 8.9. Counterparts......................................79
Section 8.10. Headings..........................................79
Section 8.11. Entire Agreement; Assignment......................79
Section 8.12. Interpretation....................................80
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
AGREEMENT, SCHEME OF ARRANGEMENT, PLAN OF MERGER
AND PLAN OF REORGANIZATION
This Agreement, Scheme of Arrangement, Plan of Merger and Plan of
Reorganization (this "Agreement") is made as of the 19th day of December, 1999,
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"), Trenwick Group (Delaware) Inc., a Delaware corporation and Xxxxx
Holdings International Limited, a company organized under the laws of Bermuda
("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
wholly-owned Subsidiaries of New Holdings pursuant to the Scheme of Arrangement
between LaSalle Holdings and its shareholders and LaSalle Re and the holders of
its Non-Voting Shares (the "Scheme of Arrangement") and (ii) the assets of
Trenwick are transferred to New Holdings pursuant to a plan of merger and
restructuring described in Section 2.1(b) (the "Plan of Merger") and a plan of
reorganization described in Section 2.1(c) (the "Plan of Reorganization"), and
together with the Scheme of Arrangement and the Plan of Merger, 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 this 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 currently 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 as of the date
of this 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 currently
outstanding Common Shares, par value $1.00 per share, of LaSalle Holdings
("LaSalle Holdings Shares", which shall refer to all such outstanding shares);
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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 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.
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(g) "Effective Time" means the later of the Scheme Effective Time and the
Reorganization Effective Time.
(h) "Employee Benefit Plan" means
(a) 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);
(b) 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
(c) any employment agreement or consulting agreement.
(i) "ERISA" means the United States Employee Retirement Income Security Act
of 1974, as amended.
(j) "Exchange Act" means the United States Securities Exchange Act of 1934,
as amended.
(k) "GAAP" means generally accepted accounting principles as in effect in
the United States of America (as such principles may change from time to
time).
(l) "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")).
(m) "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 Holdings or its
Subsidiaries, as the case may be, has Knowledge of the fact or matter.
3
(n) "LaSalle Disclosure Letter" means the letter, dated as of the date
hereof, from LaSalle Holdings to Trenwick regarding certain matters related to
this Agreement.
(o) "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 Voting
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.
(p) "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.
(q) "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 Scheme of Arrangement, the
Plan of Merger 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 Scheme of Arrangement and Plan of
Merger and associated transactions contemplated by this Agreement shall not
constitute a Material Adverse Effect for purposes of this Agreement.
(r) "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 hereof 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.
(s) "NYSE" means The New York Stock Exchange, Inc.
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(t) "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 hereof.
(u) "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.
(v) SEC" means the United States Securities and Exchange Commission.
(w) "Securities Act" means the United States Securities Act of 1933, as
amended.
(x) "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.
(y) "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.
(z) "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
interest, penalties or other additions to tax in respect to the foregoing,
whether disputed or not.
(aa) "Trenwick Delaware" means Trenwick Group (Delaware) Inc., a
newly-formed holding company organized under the laws of the State of Delaware,
all of whose outstanding shares of capital stock are owned initially by
Trenwick, with Certificate of Incorporation, By-laws and capital structure
identical in all material respects to those of Trenwick.
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(bb) "Trenwick Delaware Shares" means the shares of common stock,
par value $.10 per share, of Trenwick Delaware outstanding from time to time.
(cc) "Trenwick Disclosure Letter" means the letter, dated as of the
date hereof, from Trenwick to LaSalle Holdings regarding certain matters
related to this Agreement.
(dd) "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.
(ee) "Trenwick Holdings Limited" means a wholly-owned subsidiary of
Trenwick organized under the laws of the United Kingdom.
(ff) "Trenwick LLC" means a Delaware limited liability company with a
single membership interest outstanding and held by Trenwick Delaware.
(gg) "Trenwick Services Limited" means a wholly-owned subsidiary of
Trenwick organized under the laws of Bermuda.
(hh) "Trenwick Subsidiary" means a wholly-owned subsidiary of
Trenwick Delaware organized under the laws of the State of Delaware.
ARTICLE 2
THE PLANS
Section 2.1 The Plans.
(a) The Scheme of Arrangement. On the Effective Date at the Scheme
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 Scheme 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.
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(b) The Plan of Merger. On the Effective Date, immediately prior to
(but subject to the consummation of) the Plan of Reorganization described in
Section 2.1(c), and upon the terms and subject to the conditions of this
Agreement:
(i) At the Merger Effective Time (as defined herein), Trenwick
shall merge with and into Trenwick LLC, pursuant to Section
264 of the General Corporation Law of the State of Delaware,
as amended (the "GCL"), with Trenwick LLC as the surviving
entity, whereupon the shareholders of Trenwick shall receive a
number of Trenwick Delaware Shares equal to the number of
Trenwick Shares owned by them in a
transaction intended to qualify as a tax-free reorganization
under Section 368(a) of the Code. At the Merger Effective
Time, the one share of common stock of Trenwick Delaware owned
by Trenwick shall be cancelled;
(ii) Trenwick LLC shall distribute to Trenwick Delaware all
of the issued and outstanding shares of Trenwick Holdings
Limited and Trenwick Services Limited;
(iii) Trenwick Delaware shall assume all undertakings and
obligations of Trenwick under this Agreement and, upon such
assumption for the purposes of Section 2.1(c) and the Plan of
Reorganization and transactions contemplated thereby, all
references to Trenwick, Trenwick Shares, Trenwick Options and
any other similar reference, respectively, under this
Agreement shall refer to Trenwick Delaware, Trenwick Delaware
Shares, options to acquire Trenwick Delaware Shares and to
such similar reference, respectively; and
(iv) Trenwick Delaware shall contribute to Trenwick Subsidiary
its entire interest in Trenwick LLC.
(c) The Plan of Reorganization. On the Effective Date, upon the terms
and subject to the conditions hereof and immediately after and conditioned upon
the transactions set forth in Section 2.1(b), 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 (the time of such distribution
being the "Reorganization Effective Time") in complete liquidation of Trenwick,
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:
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(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 Scheme 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 Scheme 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 Scheme 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,
the Plan of Merger and the Plan of Reorganization.
(c) Upon receipt of orders from the Court sanctioning the Scheme of
Arrangement, upon approval by the stockholders of Trenwick of this Agreement,
the Plan of Merger and the Plan of Reorganization and upon the terms and subject
to the satisfaction or waiver, if permissible, of the conditions hereof, (i) the
order sanctioning the Scheme of Arrangement shall be duly filed with the
Registrar of Companies of Bermuda (the "Registrar") and (ii) a certificate of
merger with respect to this Agreement and the Plan of Merger (the "Certificate
of Merger") shall be duly filed with the Secretary of State of Delaware (the
"Secretary of State"). The Scheme of Arrangement shall become effective upon the
filing of the order of the Court with respect to the Scheme of Arrangement with
the Registrar (the time of such filing being the "Scheme Effective Time" and the
date of such filing being the "Effective Date"). The Plan of Merger shall become
effective upon the filing of the Certificate of Merger with the Secretary of
State (the "Merger Effective Time") on the Effective Date, with the
Reorganization Effective Time being immediately after the Merger 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 Xxxxx, Xxxxx & Xxxxx, 0000 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx 00000-0000, 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 Scheme of Arrangement. As of the Scheme 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).
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(b) Effect of the Plan of Merger and the Plan of Reorganization. As of
the Reorganization 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 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 Scheme 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 Scheme
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 Scheme 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 Scheme
Effective Time shall continue to be the bye-laws of LaSalle Re
until thereafter amended or restated as provided therein and
by law.
9
(d) Trenwick Delaware
(i) The certificate of incorporation of Trenwick Delaware in
effect at the Merger Effective Time shall continue to be the
certificate of incorporation of Trenwick Delaware until
thereafter amended or restated as provided therein and by law.
(ii) The by-laws of Trenwick Delaware in effect at the Merger
Effective Time shall continue to be the by-laws of Trenwick
Delaware until thereafter amended or restated as provided
therein and by law.
(e) Trenwick LLC
(i) The certificate of formation of Trenwick LLC in effect at
the Merger Effective Time shall continue to be the certificate
of formation of the surviving entity until thereafter amended
or restated as provided therein and by law.
(ii) The limited liability company agreement of Trenwick
Delaware in effect at the Merger Effective Time shall continue
to be the limited liability company agreement of the surviving
entity 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 byelaws of New Holdings and until their successors shall be
elected or appointed and shall duly qualify.
Section 2.6 Terms of the Scheme of Arrangement: Exchange of Securities.
At the Scheme Effective Time, by virtue of the Scheme of Arrangement and
without any action on the part of LaSalle Holdings, LaSalle Re or the holder
of any of the following securities:
(a) Subject to Section 2.12, each LaSalle Holdings Share and each
Minority Share that is issued and outstanding immediately prior to the Scheme
Effective Time (other than LaSalle Holdings Shares and Minority Shares to be
cancelled in accordance with Section 2.6(c)) 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 Scheme of Arrangement.
10
(b) Each LaSalle Holdings Option (as defined herein) and each LaSalle
Re Option (as defined herein) outstanding as of the Scheme 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) If the requisite approval of the holders of Non-Voting Shares is not
received, the Scheme of Arrangement shall relate only to LaSalle Holdings Shares
and shall not affect the NonVoting Shares.
Section 2.7 Terms of the Plan of Merger and the Plan of
Reorganization: Conversion and Issuance of Securities.
(a) At the Merger Effective Time, by virtue of the Plan of Merger
and without any action on the part of any of the entities described in
Section 2.1(b) or the holder of any of the following securities:
(i) Each Trenwick Share that is issued and outstanding
immediately prior to the Merger Effective Time (other than
Trenwick Shares to be cancelled in accordance with Section
2.7(d)) shall be cancelled and extinguished and converted into
the right to receive one fully paid and nonassessable Trenwick
Delaware Share. If prior to the Merger 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. Trenwick Delaware
shall issue the Trenwick Delaware Shares to be received as
Trenwick Delaware Consideration and register the Persons to
whom such Trenwick Delaware Shares are issued in Trenwick
Delaware's register of stockholders.
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(ii) Each Trenwick Option (as defined herein) outstanding as
of the Merger Effective Time shall be treated in accordance
with the provisions of Section 5.9.
(iii) Each Trenwick Share that is issued and outstanding
immediately prior to the Merger 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.
(b) Subject to Section 2.12, at the Reorganization Effective Time, by
virtue of the Plan of Reorganization and without any action on the part of any
of the entities described in Section 2.1(c) or the holder of any of the
following securities, there shall be allotted and issued to each holder of
Trenwick Delaware 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 Trenwick Fair Market
Value. 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.
Section 2.8 Terms of the Scheme of Arrangement: Surrender and Payment.
(a) Promptly after the Scheme 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
Scheme 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 Scheme 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 Scheme Effective Time, represent for all purposes
only the right to receive such LaSalle Consideration.
12
(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
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 Scheme 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 Scheme 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 Scheme 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 Scheme 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 Scheme Effective Time.
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(g) At and after the Scheme Effective Time, each holder of a
certificate or certificates that represented issued and outstanding LaSalle
Holdings Shares or Minority Shares immediately prior to the Scheme 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.
Section 2.9 Terms of the Plan of Merger and the Plan of
Reorganization: Surrender and Payment.
(a) Promptly after the Reorganization 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 Reorganization 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 have been converted into a
right to receive the Trenwick Consideration pursuant to the Plan of Merger and
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
Reorganization 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 Reorganization Effective Time, there shall be no further
registrations of transfers of Trenwick Shares. If, after the Reorganization
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.
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(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
Reorganization 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 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 into which such Trenwick
Shares were converted 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 Reorganization 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 Merger Effective Time.
(g) At and after the Merger Effective Time, each holder of a
certificate or certificates that represented issued and outstanding Trenwick
Shares immediately prior to the Merger 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.
15
Section 2.12 No Fractional Shares. No certificates or scrip
representing fractional New Holdings Shares shall be issued upon the
conversion of 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, 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:
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
16
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.
(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 264 and
271 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 264 and 271 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 Section 264 and 271 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,
17
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 Merger and the other
transactions contemplated hereby to be advisable and in the best interests 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) 17,397,809 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 Merger Effective Time as a result of the Plan of
Merger. 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.
18
(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.
19
(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.
20
Section 3.7 No Defaults. Neither Trenwick 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
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 264 and
271 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 Xxxx-Xxxxx-Xxxxxx 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, the Plan of Merger 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
21
this Agreement, the Plan of Merger, 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
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.
22
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 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.
23
(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 Merger 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
consummation of the transactions contemplated hereby. Except as disclosed in the
24
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.
25
(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
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.
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.
26
(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
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).
27
(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.
28
(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
Merger (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 Xxxxxx X. Xxxxxxx, Xxxxxxx X. English, Xxxxxx Xxxxx and Xxxxxx Xxxxxxx,
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 Merger 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 collective
bargaining purposes nor, so far as Trenwick International is
aware, has Trenwick International done any act which might be
construed as recognition.
29
(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 Xxx 0000, the Trade Union and Labor Relations
(Consolidation) Xxx 0000, the Transfer of Undertakings
(Protection of Employment) Regulations 1981, the Sex
Discrimination Xxx 0000, the Equal Pay Xxx 0000, the Treaty of
Rome or any Directive or recommendation made pursuant to it,
the Race Relations Xxx 0000 or the Disability Discrimination
Xxx 0000. 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.
30
(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 Xxx
0000. 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, icenses, inventions (whether or not patentable or reduced to
practice), copyrights (whether registered or unregistered), know-how
31
(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 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 Xxxxxxxxx, Lufkin & Xxxxxxxx ("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.
32
(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
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.
33
(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,
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
34
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:
(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, xxxxxx 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.
35
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF LASALLE HOLDINGS
LaSalle Holdings hereby represents and warrants to Trenwick and the
Minority Shareholders that:
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
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.
36
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 Scheme 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) 15,603,570 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 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
37
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 Scheme Effective Time as a result of the Scheme 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 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.
38
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 prepared in accordance with 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.
39
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, Xxxxxxx Xxxxx
Xxxxxx Inc. and Aon Capital Markets, Inc., 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 letter with
Lazard Freres & Co. LLC, Xxxxxxx Xxxxx Xxxxxx Inc. and Aon Capital Markets, Inc.
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
40
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.
41
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.
42
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.
43
(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 Scheme 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
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.
44
Section 4.15 Approval of Scheme of Arrangement. Other than the
affirmative vote of the holders of at least seventy-five percent (75%) of the
issued and outstanding LaSalle Holdings Shares (with each LaSalle Holding Share
having one vote per share) and at least seventy-five percent (75%) of the issued
and outstanding Non-Voting Shares (with each Non-Voting Share having one vote
per share) to approve and adopt this Agreement and the Scheme of Arrangement,
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 Scheme 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
(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
45
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 Scheme 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
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.
46
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 Xxxxxxx Xxxxx
Xxxxxx 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.
Section 4.21 Liabilities and Reserves.
47
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.
48
(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, xxxxxx 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 this Agreement to the
Effective Time, Trenwick shall, and shall cause each of its Subsidiaries to,
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
49
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 this 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 hereof
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
hereof;
(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;
(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
50
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 hereof (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;
51
(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 hereof;
(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 this Agreement 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:
52
(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 this 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 Non-Voting Shares and the record dates and payment dates relating
thereto, it being the intention of the parties that holders of LaSalle Holdings
Shares and NonVoting Shares will not receive two dividends for any single
calendar quarter with respect to their LaSalle Holdings Shares and Non-Voting
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 hereof 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 hereof;
(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;
(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 hereof
(including, without limitation, the granting
53
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;
(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;
54
(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 hereof;
(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.
Section 5.3 No Solicitation.
(a) No Solicitation by Trenwick.
55
(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
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
56
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
request or Trenwick Takeover Proposal and the identity of the
Person making such request or 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.
(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
57
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
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
58
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.
Section 5.4 Access to Information; Confidentiality. Between the
date of this 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
59
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 this 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 to be issued with respect to the transactions contemplated by this
Agreement, the Plans and the Stock Option Agreements shall be in the form hereto
agreed 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 this
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.
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).
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(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 Merger 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
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
Scheme 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).
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(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.
(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 Scheme
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 Scheme 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 Xxxxxx X. Xxxxx and LaSalle Re, if Xxxxxx X. Xxxxx
exercises any of his stock appreciation rights during the
period beginning at the Scheme 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 Scheme
Effective Time.
(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.
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(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.
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 hereof, 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.
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(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 this 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.
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
65
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.
(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 Merger 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 Scheme 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
66
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.
(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.
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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 Organization of Trenwick Subsidiaries. During the
period from the date of this Agreement to the Effective Time, Trenwick shall
organize Trenwick LLC and Trenwick Subsidiary and shall cause each such
Subsidiary to enter into the transactions described in Section 2.1(b) of this
Agreement by executing a joinder hereto, subject to obtaining stockholder
approval pursuant to Section 264 and Section 271 of the GCL.
Section 5.23 Assumption of Non-Voting Share Conversion Obligation.
In the event that the Scheme of Arrangement is not approved by the holders of at
least seventy-five percent (75%) of the issued and outstanding Non-Voting
Shares, then, prior to the consummation of the Scheme of Arrangement with
respect to the LaSalle Holdings Shares, 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 5.24 Assumption of Series B Preferred Share Conversion
Obligation. Prior to the Scheme 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 Scheme of Arrangement not been consummated.
Section 5.25 Tax-Free Reorganization. Trenwick, New Holdings and
LaSalle Holdings shall each use its best efforts to cause the exchange described
in Section 2.1(c) to be treated as a reorganization within the meaning of
Section 368(a) of the Code and to cause the Scheme 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 Xxxxx &
XxXxxxxx under Section 6.1(h), Section 6.2(g) and Section 6.3(h) will rely and
upon which the opinion of Xxxxx, Xxxxx & Xxxxx 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 Scheme of
Arrangement shall have been obtained.
(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.
69
(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 Plan of Merger 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) Xxxxx, Xxxxx & Xxxxx Opinion. New Holdings and LaSalle Holdings
shall have received an opinion of Xxxxx, Xxxxx & Xxxxx, 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 Scheme of Arrangement will qualify as
an exchange under Section 351(a) of the Code, (ii) no gain or loss will be
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 Scheme 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 Scheme 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 Scheme of Arrangement, and (v) no gain or loss will be
recognized by United States transferors of Non-Voting Shares who own 5%,
actually or
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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
Scheme 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) Xxxxx & XxXxxxxx Opinion. New Holdings and Trenwick shall have
received an opinion of Xxxxx & XxXxxxxx, 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 this
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.
(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).
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(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) Xxxxx & XxXxxxxx Opinion. New Holdings and Trenwick shall have
received an opinion of Xxxxx & XxXxxxxx, 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 this
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.
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 this 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
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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.
(h) Xxxxx & XxXxxxxx 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 Xxxxx & XxXxxxxx, 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.
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(i) No Material Adverse Change. At any time after the date of this
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 earlier of the Scheme Effective Time or Merger 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;
(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
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(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.
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).
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(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.
(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.
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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 earlier
of the Merger Effective Time or the Scheme 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 Merger 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 Scheme 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.
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.
77
Section 8.5 Expenses and Obligations. Each of the parties shall pay its
own expenses incurred in connection with the negotiation and preparation of
this Agreement, the performance of its covenants herein and the effectuation of
the transactions contemplated hereby, 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).
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
00 Xxxxxx Xxxxxx
X.X. Xxx XX 0000
Xxxxxxxx XX FX, Bermuda
Fax: (000) 000-0000
Attention: Xxx X. Xxxxxxxxxxx
with a copy to:
Xxxxx, Xxxxx & Xxxxx
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
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if to Trenwick before the Effective Date, to:
Trenwick Group Inc.
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Fax: (000) 000-0000
Attention: Xxxx X. Del Col, Esq.
with a copy to:
Xxxxx & XxXxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
if to LaSalle Holdings, Trenwick or New Holdings after the Effective
Date:
Xxxxx Holdings International Limited
c/x Xxxxxxx Xxxxxxxx & Xxxxx
Xxxxx Xxxxx
00 Xxxxx Xxxxxx
P.O. Box HM 1178
Xxxxxxxx XX EX, Bermuda
Fax: (000) 000-0000
Attention: Xxxxxx Xxxxxx, Esq.
with a copy to:
Xxxxx & XxXxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, 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.
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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 Scheme of
Arrangement being governed by Bermuda law and matters relating to the Plan of
Merger 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.
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 all
transactions contemplated by Section 2.1(b) and (c) 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
80
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/ Xxx X. Xxxxxxxxxxx
-------------------------------------
Name: Xxx X. Xxxxxxxxxxx
Title: President and Chief Executive
Officer
LASALLE RE LIMITED
By: /s/ Xxx X. Xxxxxxxxxxx
-------------------------------------
Name: Xxx X. Xxxxxxxxxxx
Title: President and Chief Executive
Officer
XXXXX HOLDINGS INTERNATIONAL LIMITED
By: /s/ Xxxx X. Del Col
-------------------------------------
Name: Xxxx X. Del Col
Title: Director
TRENWICK GROUP INC.
By: /s/ Xxxxx X. Xxxxxxx, Xx.
-------------------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: Chairman, President and Chief
Executive Officer
TRENWICK GROUP (DELAWARE) INC.
By: /s/ Xxxxx X. Xxxxxxx, Xx.
------------------------------------
Name: Xxxxx X. Xxxxxxx, Xx.
Title: Chairman, President and Chief
Executive Officer
