STOCK OPTION AGREEMENT
STOCK OPTION AGREEMENT, dated as of June 21, 1999 (the
"Agreement") by and between Trenwick Group Inc., a Delaware corporation
("Trenwick"), and Chartwell Re Corporation, a Delaware corporation ("Chartwell"
or the "Issuer").
WHEREAS, concurrently with the execution and delivery of this
Agreement, Trenwick and Chartwell are entering into an Agreement and Plan of
Merger, dated as of the date hereof (the "Merger Agreement"), which provides,
among other things, upon the terms and subject to the conditions thereof, for
the merger of Chartwell with and into Trenwick, with Trenwick as the surviving
corporation (the "Merger"); and
WHEREAS, as a condition to Trenwick's willingness to enter
into the Merger Agreement, Trenwick has requested that Chartwell agree, and
Chartwell has so agreed, to grant to Trenwick an option to purchase up to
1,918,729 shares of common stock, par value $.01 per share, of Chartwell
("Chartwell Common Stock") in accordance with the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, to induce Trenwick to enter into the Merger
Agreement, and in consideration of the foregoing and the mutual representations,
warranties, covenants and agreements set forth herein and in the Merger
Agreement, the parties hereto agree as follows:
1. Grant of Option. Subject to the terms and conditions set
forth herein, Chartwell hereby grants to Trenwick an irrevocable option
(the "Chartwell Option") to purchase up to 1,918,729 (as adjusted as set forth
herein) shares (the "Option Shares") of Chartwell Common Stock (such number of
Option Shares representing 19.9% of the number of shares of Chartwell Common
Stock issued and outstanding on the date hereof) in the manner set forth below
at a price (the "Exercise Price") of $23.82 per Option Share (which price per
share is equal to the product of the Conversion Number (as defined in the Merger
Agreement) and the closing price per share of Trenwick common stock, par value
$.01 per share, on the Nasdaq Stock Market National Market on the date hereof),
payable in cash in accordance with Section 4 hereof. Notwithstanding the
foregoing, in no event shall the number of Option Shares for which the Chartwell
Option is exercisable exceed 19.9% of the number of issued and outstanding
shares of Chartwell Common Stock. Capitalized terms used herein but not defined
herein shall have the meanings set forth in the Merger Agreement.
2. Exercise of Option. The Chartwell Option may be exercised by
Trenwick, in whole or in part, at any time or from time to time after the
Merger Agreement becomes terminable by Trenwick under circumstances which would
or could entitle Trenwick to receive the Termination Fee pursuant to Section
5.14(b) of the Merger Agreement (a "Trigger Event") (regardless of whether the
Merger Agreement is actually terminated or whether there occurs a closing
involving Chartwell); provided, that a Trigger Event shall not occur in the
circumstances contemplated by Section 5.14(b)(z) of the Merger Agreement unless
and until a Termination Fee shall be payable pursuant to Section 5.14(b)(z) of
the Merger Agreement. In the event Trenwick wishes to exercise the Chartwell
Option, Trenwick shall deliver to Chartwell a written notice (an "Exercise
Notice") specifying the total number of Option Shares it wishes to purchase.
Each closing of a purchase of Option Shares (an "Option Closing") shall occur,
but subject to the satisfaction or waiver of the conditions set forth in Section
3 hereof, at a place, on a date and at a time designated by Trenwick in an
Exercise Notice delivered at least two business days prior to the date of the
Option Closing. The Chartwell Option shall terminate upon the earlier of: (i)
the Effective Time; (ii) the termination of the Merger Agreement other than
under circumstances which also constitute a Trigger Event; or (iii) the 180th
day following a Trigger Event (or if, at the expiration of such 180 day period
the Chartwell Option cannot be exercised by reason of any applicable judgment,
decree, order, law or regulation, 10 business days after such impediment to
exercise shall have been removed or shall have become final and not subject to
appeal, but in no event under this clause (iii) later than the 365th day
following such Trigger Event). Notwithstanding the foregoing, the Chartwell
Option may not be exercised if Trenwick is in material breach of any of its
representations or warranties, or in material breach of any of its covenants or
agreements, contained in this Agreement or in the Merger Agreement. Upon the
giving by Trenwick to Chartwell of the Exercise Notice and the tender of the
applicable aggregate Exercise Price, but subject to the satisfaction or waiver
of the conditions set forth in Section 3 hereof, Trenwick shall be deemed to be
the holder of record of the Option Shares issuable upon such exercise,
notwithstanding that the stock transfer books of Chartwell shall then be closed
or that certificates representing such Option Shares shall not then be actually
delivered to Trenwick.
3. Conditions to Closing. The obligation of Chartwell to issue
the Option Shares to Trenwick hereunder is subject to the conditions, which
(other than the conditions described in clauses (i), (iii) and (iv) below) may
be waived by Chartwell in its sole discretion, that (i) all waiting periods, if
any, under the HSR Act, applicable to the issuance of the Option Shares
hereunder shall have expired or have been terminated; (ii) the Option Shares
shall have been approved for listing on the NYSE upon official notice of
issuance; (iii) all consents, approvals, orders or authorizations of, or
registrations, declarations or filings with, any federal, state or local
administrative agency or commission or other federal, state or local
Governmental Entity, if any, required in connection with the issuance of the
Option Shares hereunder shall have been obtained or made, as the case may be
including, without limitation, by Trenwick; and (iv) no preliminary or permanent
injunction or other order or decree by any court of competent jurisdiction, law
or regulation prohibiting or otherwise restraining such issuance shall be in
effect.
4. Payment and Delivery of Certificates.
(a) At any Option Closing, Trenwick shall pay to Chartwell
the aggregate purchase price (equal to the Exercise Price multiplied by the
number of Option Shares to be purchased at such Option Closing) for the shares
of Chartwell Common Stock purchased pursuant to the exercise of the Chartwell
Option in immediately available funds by wire transfer to a bank account
designated in writing by Chartwell; provided, however, that failure or refusal
of Chartwell to designate such account shall not preclude Trenwick from
exercising the Chartwell Option.
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(b) At any Option Closing, simultaneously with the delivery
of immediately available funds as provided in Section 4(a), Chartwell will
deliver to Trenwick a certificate or certificates representing the number of
Option Shares to be purchased by Trenwick at such Option Closing, which Option
Shares will be free and clear of all liens, claims, charges and encumbrances of
any kind whatsoever and if the option is exercised in part only, Chartwell shall
deliver a new option evidencing the rights of Trenwick thereof to purchase the
balance of the shares purchasable hereunder and (ii) Trenwick will deliver to
Chartwell a copy of this Agreement and a letter agreeing that Trenwick will not
offer to sell or otherwise dispose of such shares in violation of applicable law
or the provisions of this Agreement. If at the time of issuance of Option Shares
pursuant to an exercise of the option hereunder, Chartwell shall not have
redeemed the Chartwell Rights, or shall have issued any similar securities, then
each Option Share issued pursuant to such exercise will also represent such a
corresponding Chartwell Right or new rights with terms substantially the same as
and at least as favorable to Trenwick as are provided in the Chartwell Rights
Agreement or similar agreement then in effect. Chartwell shall pay all expenses,
and any and all United States federal, state and local taxes and other charges
that may be payable in connection with the preparation, issue and delivery of
stock certificates under this Section 4 in the name of Trenwick or its designee.
5. Representations and Warranties of Chartwell. Chartwell hereby
represents and warrants to Trenwick that (a) Chartwell is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the corporate power and authority to enter into this
Agreement, (b) the execution and delivery of this Agreement by Chartwell and the
consummation by Chartwell of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of Chartwell and no
other corporate proceedings on the part of Chartwell are necessary to authorize
this Agreement or any of the transactions contemplated hereby, (c) this
Agreement has been duly executed and delivered by Chartwell, constitutes a valid
and binding obligation of Chartwell and, assuming this Agreement constitutes a
valid and binding obligation of Trenwick, is enforceable against Chartwell in
accordance with its terms, (d) Chartwell has taken all necessary corporate
action to authorize and reserve for issuance and to permit it to issue, upon
exercise of the Chartwell Option, and at all times from the date hereof through
the expiration of the Chartwell Option will have reserved, 1,918,729 authorized
and unissued Option Shares, such amount being subject to adjustment as provided
in Section 9, all of which, upon their issuance and delivery in accordance with
the terms of this Agreement, will be validly issued, fully paid and
nonassessable, (e) upon delivery of the Option Shares to Trenwick upon the
exercise of the Chartwell Option, Trenwick will acquire the Option Shares free
and clear of all claims, liens, charges, encumbrances and security interests of
any nature whatsoever, and (f) none of Chartwell, any of its affiliates or
anyone acting on its or their behalf has issued, sold or offered any security of
Chartwell to any person under circumstances that would cause the issuance and
sale of the Option Shares, as contemplated by this Agreement, to be subject to
the registration requirements of the Securities Act as in effect on the date
hereof and, assuming the representations of Trenwick contained in Section 6(d)
are true and correct and based on Trenwick's commitment in its letter referred
to in Section 4 hereof, the issuance, sale and delivery of the Option Shares
hereunder would be exempt from the registration and prospectus delivery
requirements of the Securities Act, as in effect on the date hereof (and
Chartwell shall not take any action which would cause the issuance, sale and
delivery of the Option Shares hereunder not to be exempt from such
requirements).
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6. Representations and Warranties of Trenwick. Trenwick
represents and warrants to Chartwell that (a) Trenwick is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has the corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder, (b) the execution and
delivery of this Agreement by Trenwick and the consummation by Trenwick of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Trenwick and no other corporate proceedings on
the part of Trenwick are necessary to authorize this Agreement or any of the
transactions contemplated hereby, (c) this Agreement has been duly executed and
delivered by Trenwick and constitutes a valid and binding obligation of
Trenwick, and, assuming this Agreement constitutes a valid and binding
obligation of Chartwell, is enforceable against Trenwick in accordance with its
terms, and (d) any Option Shares acquired upon exercise of the Chartwell Option
will be acquired for Trenwick's own account, for investment purposes only and
will not be, and the Chartwell Option is not being, acquired by Trenwick with a
view to the public distribution thereof in violation of any applicable provision
of the Securities Act.
7. Restrictions on Transfer.
(a) Restrictions on Transfer. Prior to the first anniversary
of the date on which Trenwick purchases any Option Shares hereunder (the
"Expiration Date"), Trenwick shall not, directly or indirectly, by operation of
law or otherwise, sell, assign, pledge, or otherwise dispose of or transfer any
Option Shares acquired by Trenwick pursuant to this Agreement ("Restricted
Shares") beneficially owned by it, other than in accordance with Section 7(b) or
Section 8. Subsequent to the Expiration Date, Trenwick shall not, directly or
indirectly, by operation of law or otherwise, sell, assign, pledge or otherwise
dispose of or transfer any Restricted Shares beneficially owned by it to any
purchaser, assignee, pledgee or other transferee who would, immediately after
such sale, assignment, pledge, disposition or transfer, beneficially own more
than 4.9% of the then outstanding voting power of the issuer of the Restricted
Shares, except in accordance with Section 7(b) or Section 8 and other than in
market transactions at prevailing prices.
(b) Permitted Sales. Following the termination of the Merger
Agreement, Trenwick shall be permitted to sell or transfer any Restricted
Shares beneficially owned by it if such sale is made pursuant to a tender or
exchange offer or merger that has been approved or recommended, or otherwise
determined to be fair to and in the best interests of the shareholders of
Chartwell, by a majority of the members of the Board of Directors of Chartwell
(which majority shall include a majority of directors who were directors prior
to the announcement of such tender or exchange offer or merger).
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8. Registration Rights. Following the termination of the Merger
Agreement, but not later than the second anniversary of the last date that
Trenwick acquired Option Shares under this Agreement, Trenwick (a "Designated
Holder") may by written notice (the "Registration Notice") to Chartwell (the
"Registrant") request the Registrant to register under the Securities Act all or
any part of the Restricted Shares beneficially owned by the Designated Holder
(the "Registrable Securities") pursuant to a bona fide firm commitment
underwritten public offering in which the Designated Holder and the underwriters
shall effect as wide a distribution of such Registrable Securities as is
reasonably practicable and shall use their commercially reasonable efforts to
prevent any person (including any Group (as used in Rule 13d-5 under the
Exchange Act)) and its affiliates from purchasing through such offering
Restricted Shares representing more than 1% of the outstanding shares of common
stock of the Registrant on a fully diluted basis (a "Permitted Offering"). The
Registration Notice shall include a certificate executed by the Designated
Holder and its proposed managing underwriter, which underwriter shall be an
investment banking firm of nationally recognized standing (the "Manager"),
stating that (i) they have a good faith intention to commence promptly a
Permitted Offering and (ii) the Manager in good faith believes that, based on
the then prevailing market conditions, it will be able to sell the Registrable
Securities at a per share price equal to at least 80% of the then Fair Market
Value (as defined below) of such shares. The Registrant (and/or any person
designated by the Registrant) shall thereupon have the option exercisable by
written notice delivered to the Designated Holder within 10 business days after
the receipt of the Registration Notice, irrevocably to agree to purchase all or
any part of the Registrable Securities proposed to be so sold for cash at a
price (the "Option Price") equal to the product of (i) the number of Registrable
Securities to be so purchased by the Registrant and (ii) the then Fair Market
Value of such shares. Any such purchase of Registrable Securities by the
Registrant (or its designee) hereunder shall take place at a closing to be held
at the principal executive offices of the Registrant or at the offices of its
counsel at any reasonable date and time designated by the Registrant and/or such
designee in such notice within 20 business days after delivery of such notice.
Any payment for the shares to be purchased shall be made by delivery at the time
of such closing of the Option Price in immediately available funds. As used
herein, the "Fair Market Value" of any share shall be the average of the daily
closing sales price for such share on the NYSE during the 10 NYSE trading days
prior to the fifth NYSE trading day preceding the date such Fair Market Value is
to be determined.
If the Registrant does not elect to exercise its option
pursuant to this Section 8 with respect to all Registrable Securities, it shall
use its commercially reasonable efforts to effect, as promptly as practicable,
the registration under the Securities Act of the unpurchased Registrable
Securities proposed to be so sold; provided, however, that (i) Trenwick shall
not be entitled to more than an aggregate of two effective registration
statements hereunder and (ii) the Registrant will not be required to file any
such registration statement during any period of time (not to exceed 90 days
after such request in the case of clauses (A), (B) or (C) below) when (A) the
Registrant is in possession of material non-public information which it
reasonably believes would be detrimental to be disclosed at such time and, in
the opinion of counsel to the Registrant, such information would have to be
disclosed if a registration statement were filed at that time; (B) the
Registrant is required under the Securities Act to include audited financial
statements for any period in such registration statement and such financial
statements are not yet available for inclusion in such registration statement;
or (C) the Registrant determines, in its reasonable judgment, that such
registration would interfere with any financing, acquisition or other material
transaction involving the Registrant or any of its affiliates. The Registrant
shall use its reasonable best efforts to cause any Registrable Securities
registered pursuant to this Section 8 to be qualified for sale under the
securities or blue sky laws of such jurisdictions as the Designated Holder may
reasonably request and shall continue such registration or qualification in
effect in such jurisdiction; provided, however, that the Registrant shall not be
required to qualify to do business in, or consent to general service of process
in, any jurisdiction by reason of this provision.
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The registration rights set forth in this Section 8 are
subject to the condition that the Designated Holder shall provide the Registrant
with such information with respect to such holder's Registrable Securities, the
plans for the distribution thereof, and such other information with respect to
such holder as, in the reasonable judgment of counsel for the Registrant, is
necessary to enable the Registrant to include in such registration statement all
material facts required to be disclosed with respect to a registration
thereunder.
A registration effected under this Section 8 shall be effected
at the Registrant's expense, except for underwriting discounts and commissions
and the fees and the expenses of counsel to the Designated Holder, and the
Registrant shall provide to the underwriters such documentation (including
certificates, opinions of counsel and "comfort" letters from auditors) as are
customary in connection with underwritten public offerings as such underwriters
may reasonably require. In connection with any such registration, the parties
agree (i) to indemnify each other and the underwriters in the customary manner
(provided that the Designated Holder shall only be required to indemnify other
parties to such underwriting agreement for information relating to such
Designated Holder and supplied by it for inclusion in such registration
statement), (ii) to enter into an underwriting agreement in form and substance
customary for transactions of such type with the Manager and the other
underwriters participating in such offering and (iii) to take all further
actions which shall be reasonably necessary to effect such registration and sale
(including, if the Manager deems it necessary, participating in road show
presentations).
The Registrant shall be entitled to include (at its expense)
additional shares of its common stock in a registration effected pursuant to
this Section 8 only if and to the extent the Manager determines that such
inclusion will not adversely affect the prospects for success of such offering.
9. Adjustment upon Changes in Capitalization. Without
limitation to any restriction on Chartwell contained in this Agreement or
in the Merger Agreement, in the event of any change in Chartwell Common Stock by
reason of stock dividends, split-ups, mergers, recapitalizations, subdivisions,
conversions, combinations, exchange of shares or the like, the type and number
of shares or securities subject to the Chartwell Option, and the Exercise Price
per Option Share provided in Section 1, shall be adjusted appropriately to
restore to Trenwick its rights hereunder, including the right to purchase from
the Chartwell (or its successors) shares of Chartwell Common Stock representing
19.9% of the outstanding Chartwell Common Stock for the aggregate Exercise Price
calculated as of the date of this Agreement as provided in Section 1.
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10. Restrictive Legends. Each certificate representing shares
of Chartwell Common Stock issued to Trenwick at a Closing will have typed
or printed thereon a restrictive legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY BE REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE. SUCH SECURITIES ARE ALSO SUBJECT TO
ADDITIONAL RESTRICTIONS ON TRANSFER AS SET FORTH IN THE STOCK OPTION
AGREEMENT, DATED AS OF JUNE 21, 1999, A COPY OF WHICH MAY BE OBTAINED
FROM THE ISSUER UPON REQUEST.
It is understood and agreed that: (i) the reference to the
resale restrictions of the Securities Act in the above legend shall be removed
by delivery of substitute certificate(s) without such reference if such Option
Shares have been registered pursuant to the Securities Act, such Option Shares
have been sold in reliance on and in accordance with Rule 144 under the
Securities Act or Trenwick has delivered to Chartwell a copy of a letter from
the staff of the Securities and Exchange Commission, or an opinion of counsel,
in form and substance satisfactory to Chartwell and its counsel, to the effect
that such legend is not required for purposes of the Securities Act; (ii) the
reference to restrictions pursuant to this Agreement in the above legend shall
be removed by delivery of substitute certificate(s) without such reference if
the Option Shares evidenced by certificate(s) containing such reference have
been sold or transferred in compliance with the provisions of this Agreement and
under circumstances that do not require the retention of such reference; and
(iii) the legend shall be removed in its entirety if the conditions in the
preceding clauses (i) and (ii) are both satisfied. In addition, such
certificate(s) shall bear any other legend as may be required by law.
Certificates representing shares sold in a registered public offering pursuant
to Section 8 shall not be required to bear the legend set forth in this Section
10.
11. Profit Limitation.
(a) Notwithstanding any other provision of this Agreement
or the Merger Agreement, in no event shall Trenwick's Total Profit (as
hereinafter defined) exceed $9.0 million (such amount, the "Profit Limit") and,
if it would otherwise exceed such amount, Trenwick, at its sole election, shall,
within five business days, either (i) deliver to the Issuer for cancellation
Option Shares (valued, for purposes of this Section 11, at their Fair Market
Value on the date of such delivery), (ii) pay cash to the Issuer or refund in
cash any Termination Fee previously paid to Trenwick or reduce or waive the
amount of any Termination Fee payable to Trenwick pursuant to Section 5.14(b) of
the Merger Agreement, or (iii) undertake any combination thereof, so that
Trenwick's Total Profit shall not exceed the Profit Limit after taking into
account the foregoing actions. As used herein, "Total Profit" means the
aggregate amount (before taxes) of (i) the amount of Termination Fee received by
Trenwick pursuant to Section 5.14(b) of the Merger Agreement and any fee
received by Trenwick pursuant to Section 5.14(c) of the Merger Agreement and
(ii) (x) the net cash amounts received by Trenwick pursuant to the sale of
Option Shares (or any other securities into which such Option Shares are
converted or exchanged) to any unaffiliated party, less (y) Trenwick's purchase
price for such Option Shares.
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(b) Notwithstanding any other provision of this Agreement
or the Merger Agreement, the Chartwell Option may not be exercised for a
number of Option Shares that would, as of the date of the Exercise Notice,
result in a Notional Total Profit (as hereinafter defined) of more than the
Profit Limit and, if exercise of the Chartwell Option otherwise would exceed the
Profit Limit, Trenwick, at its discretion, may increase the Exercise Price for
that number of Option Shares set forth in the Exercise Notice so that the
Notional Total Profit shall not exceed the Profit Limit; provided, that nothing
in this sentence shall restrict any exercise of the Chartwell Option permitted
hereby on any subsequent date at the Exercise Price set forth in Section 1
hereof. As used herein, the term "Notional Total Profit" with respect to any
number of Option Shares as to which Trenwick may propose to exercise the
Chartwell Option shall be the Total Profit determined as of the date of the
Exercise Notice assuming that the Chartwell Option were exercised on such date
for such number of Option Shares and assuming that such Option Shares, together
with all other shares of Chartwell Common Stock held by Trenwick and its
subsidiaries as of such date, were sold for cash at the closing market price for
the Chartwell Common Stock on the NYSE Composite Tape at the close of business
on the preceding trading day (less customary brokerage commissions).
12. Binding Effect; No Assignment; No Third Party Beneficiaries.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns. Neither
this Agreement nor the rights or the obligations of either party hereto are
assignable, except by operation of law, or with the written consent of the other
party. Nothing contained in this Agreement, express or implied, is intended to
confer upon any person other than the parties hereto and their respective
permitted assigns any rights or remedies of any nature whatsoever by reason of
this Agreement. Any Restricted Shares sold by a party in compliance with the
provisions of Section 8 shall, upon consummation of such sale, be free of the
restrictions imposed with respect to such shares by this Agreement, unless and
until such party shall repurchase or otherwise become the beneficial owner of
such shares, and any transferee of such shares shall not be entitled to the
registration rights of such party.
13. Specific Performance. The parties recognize and agree that if
for any reason any of the provisions of this Agreement are not performed in
accordance with their specific terms or are otherwise breached, immediate and
irreparable harm or injury would be caused for which money damages would not be
an adequate remedy. Accordingly, each party agrees that, in addition to other
remedies, the other party shall be entitled to an injunction restraining any
violation or threatened violation of the provisions of this Agreement. In the
event that any action should be brought in equity to enforce the provisions of
the Agreement, neither party will allege, and each party hereby waives the
defense, that there is adequate remedy at law.
14. Entire Agreement. This Agreement, the Merger Agreement
(including any exhibits and schedules thereto) and the Confidentiality
Agreement constitute the entire agreement, and supersede all other prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter of this Agreement.
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15. Further Assurances. Each party will execute and deliver
all such further documents and instruments and take all such further action
as may be necessary in order to consummate the transactions contemplated hereby.
16. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability
of the other provisions of this Agreement, which shall remain in full force and
effect. In the event any court or other competent authority holds any provisions
of this Agreement to be null, void or unenforceable, the parties hereto shall
negotiate in good faith the execution and delivery of an amendment to this
Agreement in order, as nearly as possible, to effectuate, to the extent
permitted by law, the intent of the parties hereto with respect to such
provision and the economic effects thereof. If for any reason any such court or
regulatory agency determines that Trenwick is not permitted to acquire the full
number of shares of Chartwell Common Stock provided in Section 1 hereof (as the
same may be adjusted), it is the express intention of Chartwell to allow
Trenwick to acquire such lesser number of shares as may be permissible, without
any amendment or modification hereof. Each party agrees that, should any court
or other competent authority hold any provision of this Agreement or part hereof
to be null, void or unenforceable, or order any party to take any action
inconsistent herewith, or not take any action required herein, the other party
shall not be entitled to specific performance of such provision or part hereof
or to any other remedy, including but not limited to money damages, for breach
hereof or of any other provision of this Agreement or part hereof as the result
of such holding or order.
17. Notices. All notices, requests, claims, demands and other
communications under this Agreement shall be in writing and shall be deemed
given if (i) delivered, personally, or (ii) sent by overnight courier service
(providing proof of delivery), or (iii) telecopied (which is confirmed), or (iv)
five days after being mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to Trenwick:
Alan L. Hunte
Vice President and
Chief Financial Officer
Trenwick Group Inc.
One Canterbury Green
Stamford, CT 06901
Fax: (203) 353-5544
with a copy to:
Baker & Mc Kenzie
805 Third Avenue
New York, New York 10022
Attention: James R. Cameron
Fax: (212) 891-3835
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If to Chartwell, to:
President
Chartwell Re Corporation
Four Stamford Plaza
107 Elm Street
Stamford, CT 06902
Fax: (203) 705-2710
with a copy to:
LeBoeuf, Lamb, Greene & MacRae, L.L.P.
125 West 55th Street
New York, New York 10019
Attention: Robert S. Rachofsky
Fax: (212) 424-8500
18. Governing Law; Choice of Forum. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of
Delaware without regard to the conflicts of law principles thereof. Each of the
parties hereto (a) consents to submit itself to the personal jurisdiction of any
federal court located in the State of Delaware or any Delaware state court in
the event any dispute arises out of this Agreement or any of the transactions
contemplated by this Agreement, (b) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such 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 a federal court sitting in the state of Delaware or a Delaware state
court.
19. Interpretation. When a reference is made in this Agreement
to a Section, such reference shall be to a Section of this Agreement unless
otherwise indicated. 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 descriptive headings herein are inserted for
convenience of reference only and are not intended to be part of or to affect
the meaning or interpretation of this Agreement.
20. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but both of
which, taken together, shall constitute one and the same instrument.
21. Expenses. Except as otherwise expressly provided herein
or in the Merger Agreement, all costs and expenses incurred in connection
with the transactions contemplated by this Agreement shall be paid by the party
incurring such expenses.
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22. Amendment. This Agreement may not be amended, except by
an instrument in writing signed on behalf of each of the parties.
23. Extension; Waiver. Any agreement on the part of a party
to waive any provision of this Agreement, or to extend the time for
performance, will be valid only if set forth in an instrument in writing signed
on behalf of such party. The failure of any party to this Agreement to assert
any of its rights under this Agreement or otherwise will not constitute a waiver
of such rights.
24. Loss or Mutilation. Upon receipt by Chartwell of
evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Agreement, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Agreement, if mutilated, Chartwell will execute and deliver to Trenwick a
new Agreement of like tenor and date. Any such new Agreement executed and
delivered will constitute an additional contractual obligation on the part of
Chartwell, whether or not the Agreement so lost, stolen, destroyed, or mutilated
shall at any time be enforceable by anyone.
-11-
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective duly authorized officers as of the
date first above written.
TRENWICK GROUP INC.
By: /s/ James F. Billett, Jr.
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Name: James F. Billett, Jr.
Title: Chairman, President and
Chief Executive Officer
CHARTWELL RE CORPORATION
By: /s/ Richard E. Cole
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Name: Richard E. Cole
Title: Chairman and Chief
Executive Officer