SHAREHOLDERS AGREEMENT
SHAREHOLDERS AGREEMENT (this "Agreement") dated as of December 19,
1999, by and among Trenwick Group Inc., a Delaware corporation ("Trenwick"), and
the other parties signatory hereto (each, a "Shareholder" and together, the
"Shareholders").
RECITALS
WHEREAS, simultaneously herewith Trenwick is entering into an
Agreement, Scheme of Arrangement, Plan of Merger and Plan of Reorganization,
dated as of December 19, 1999, by and among LaSalle Re Holdings, a company
organized under the laws of Bermuda ("LaSalle Holdings"), LaSalle Re Limited, a
company organized under the laws of Bermuda ("LaSalle Re"), Trenwick, Gowin
Holdings International Limited, a company organized under the laws of Bermuda
("New Holdings") and Trenwick Group (Delaware) Inc., a Delaware corporation (the
"Business Combination Agreement");
WHEREAS, the Business Combination Agreement provides that Trenwick and
LaSalle Holdings will be entering into a series of transactions pursuant to
which (i) New Holdings will become the holding company of such companies and
(ii) shareholders of LaSalle Holdings and LaSalle Re and stockholders of
Trenwick will become shareholders of New Holdings as set forth in such
agreement;
WHEREAS, each Shareholder owns that number of (i) LaSalle Holdings'
common shares, par value $1.00 per share (the "Common Shares"), and (ii) LaSalle
Re's exchangeable non-voting shares (the "Non-Voting Shares" and, together with
the Common Shares, the "Shares", which term shall include Shares which are
acquired or may be acquired upon the exercise of any and all options to acquire
Common Shares and Non-Voting Shares ("Options"), whether such Options exist on
the date hereof or otherwise) set forth next to such Shareholder's name on
Exhibit A hereto; and
WHEREAS, as a condition to its willingness to enter into the Business
Combination Agreement, Trenwick has required that each Shareholder agree, and
each Shareholder has agreed, among other things, to execute and deliver this
Agreement with respect to the Shares owned (whether by conversion or otherwise)
by such Shareholder, on the terms and conditions provided for herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
1. Voting Agreement. At any meeting of the shareholders of LaSalle
Holdings or LaSalle Re called to vote upon the Scheme of Arrangement or the
Business Combination Agreement or at any adjournment thereof or in any other
circumstances upon which a vote, consent or other approval of shareholders of
LaSalle Holdings or LaSalle Re with respect to any of the other matters referred
to below is sought, each Shareholder hereby agrees to vote (or cause to be
voted) the Shares held of record or beneficially by such Shareholder as of the
applicable record date (i) in favor of the Scheme of Arrangement, the execution
and delivery by LaSalle Holdings and LaSalle Re of the Business Combination
Agreement and the approval of the terms thereof and each of the other actions
contemplated by the Business Combination Agreement, this Agreement and any
actions required in furtherance hereof and thereof; (ii) against any action or
agreement that would, to its knowledge, result in a breach of any covenant,
representation or warranty or any other obligation or agreement of LaSalle
Holdings or LaSalle Re under the Business Combination Agreement or this
Agreement; and (iii) against the following actions (other than the Scheme and
the transactions contemplated by the Business Combination Agreement): (1) any
extraordinary corporate transaction, such as a merger, consolidation,
amalgamation or other business combination involving LaSalle Holdings or any of
its subsidiaries (including, without limitation, LaSalle Re); (2) a sale, lease
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or transfer of a material amount of assets of LaSalle Holdings or any of its
subsidiaries(including, without limitation, LaSalle Re) or a reorganization,
recapitalization, dissolution or liquidation of LaSalle Holdings or any of its
subsidiaries (including, without limitation, LaSalle Re); (3) (a) any change in
the majority of the Board of Directors of LaSalle Holdings or LaSalle Re; (b)
any material change in the present capitalization of LaSalle Holdings or LaSalle
Re or any material amendment of LaSalle Holdings' or LaSalle Re's Memorandum of
Association and Bye-laws; (c) any other material change in LaSalle Holdings' or
LaSalle Re's corporate structure or business; or (d) any other action which is
intended, or could reasonably be expected, to impede, interfere with, delay,
postpone, discourage or materially adversely affect the Scheme of Arrangement or
the transactions contemplated by the Business Combination Agreement or this
Agreement or the contemplated economic benefits of any of the foregoing. Each
Shareholder hereby revokes any proxy previously granted by it with respect to
the Shares. Each Shareholder hereby agrees, while this Agreement is in effect,
and except as contemplated hereby, not to take any action that would make any
representation or warranty of such Shareholder contained herein untrue or
incorrect or have the effect of preventing or disabling such Shareholder from
performing his or its obligations under this Agreement; provided, however, that
nothing in this Agreement shall be deemed to prohibit or restrict in any manner
any Shareholder from selling, transferring, or otherwise disposing of any Shares
or Options to any person. The provisions of this Section 1 shall terminate and
no longer bind the Shareholders at such time as the LaSalle Holdings Board of
Directors either (A) withdraws or modifies its approval and recommendation of
the Business Combination Agreement pursuant to clause (x) of the second sentence
of Section 5.3(b)(ii) thereof or (B) terminates the Business Combination
Agreement pursuant to clause (y) of the second sentence of Section 5.3(b)(ii)
thereof.
2. Representations and Warranties of Trenwick. Trenwick hereby
represents and warrants to each Shareholder that the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby have
been duly and validly authorized by the Board of Directors of Trenwick and no
other corporate proceedings on the part of Trenwick are necessary to authorize
this Agreement or to consummate the transactions contemplated hereby. This
Agreement has been duly and validly executed and delivered by Trenwick and
constitutes a valid and binding agreement of Trenwick, enforceable against
Trenwick in accordance with its terms, except that such enforceability (i) may
be limited by bankruptcy, insolvency, moratorium or other similar laws affecting
or relating to enforcement of creditors' rights generally and (ii) is subject to
general principles of equity.
3. Representations and Warranties of the Shareholders. Each Shareholder
hereby represents and warrants, severally and not jointly, to Trenwick as
follows:
(a) Ownership of Shares and Options. Such Shareholder, as of
the date hereof, (i) is the owner of the number of Shares and Options
set forth next to such Shareholder's name on Exhibit A hereto and (ii)
has the sole power to vote (or to give any consent that may be required
in respect of such Shares and Options) and dispose of such Shares and
Options.
(b) Power; Binding Agreement. Such Shareholder has the legal
capacity, power and authority to enter into and perform all of its
obligations under this Agreement. The execution, delivery and
performance of this Agreement by such Shareholder will not violate any
other agreement to which such Shareholder is a party including, without
limitation, any voting agreement, shareholders agreement or voting
trust. This Agreement has been duly and validly authorized, executed
and delivered by such Shareholder and constitutes a valid and binding
agreement of such Shareholder, enforceable against such Shareholder in
accordance with its terms, except that such enforceability (i) may be
limited by bankruptcy, insolvency, moratorium or other similar laws
affecting or relating to enforcement of creditors' rights generally and
(ii) is subject to general principles of equity.
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(c) No Conflicts. (A) No filing by such Shareholder with, and
no permit, authorization, consent or approval of, any state, federal or
foreign public body or authority is necessary for the execution of this
Agreement by such Shareholder and the consummation by such Shareholder
of the transactions contemplated hereby and (B) neither the execution
and delivery of this Agreement by such Shareholder nor the consummation
by such Shareholder of the transactions contemplated hereby nor
compliance by such Shareholder with any of the provisions hereof shall
(1) conflict with or result in any breach of any provision of the
certificate of incorporation, by-laws, trust or charitable instruments
(or similar documents) of such Shareholder, (2) result in a violation
or breach of, or constitute (with or without notice or lapse of time or
both) a default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of the
terms, conditions or provisions of any note, bond, mortgage, indenture,
license, contract, agreement or other instrument or obligation to which
such Shareholder is a party or by which he or it or any of his or its
properties or assets may be bound or (3) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to such
Shareholder or any of his or its properties or assets, except in the
case of (A) or (B) for violations, breaches or defaults which would not
in the aggregate materially adversely affect the ability of such
Shareholder to perform its obligations hereunder.
4. Adjustments to Prevent Dilution, Etc. In the event of a stock
dividend or distribution, or any change in LaSalle Holdings' or LaSalle Re's
capital shares by reason of any share dividend, split-up, reclassification,
recapitalization, combination or the exchange of shares, the term "Shares" shall
be deemed to refer to and include the Shares as well as all such stock dividends
and distributions and any shares into which or for which any or all of the
Shares may be changed or exchanged.
5. Miscellaneous.
(a) Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and may
not be amended except by a writing signed by the parties. Except as specifically
provided herein, this Agreement is not assignable by any of the parties,
provided that none of the transactions described in Sections 2.1(b) and 2.1(c)
of the Business Combination Agreement shall be considered an assignment by
Trenwick. This Agreement shall be binding upon the respective successors of the
parties and upon transferees of the Shares who are Affiliates of the
transferring Shareholder.
(b) 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 received if so given) by hand delivery, telegram, telex
or telecopy, or by mail (registered or certified mail, postage prepaid, return
receipt requested) or by any courier service, such as Federal Express, providing
proof of delivery. All communications hereunder shall be delivered to the
respective parties at the following addresses:
If to a Shareholder, to the address of such Shareholder indicated on
Exhibit A hereto.
If to Trenwick:
Trenwick Group Inc.
One Canterbury Green
Stamford, Connecticut 06901
Attention: Steve Bensinger and
John Del Col, Esq.
Facsimile No.: (203) 353-5544
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with a copy to:
Baker & McKenzie
805 Third Avenue
New York, New York 10022
Attention: James R. Cameron, Esq.
Facsimile No.: (212) 891-3835
If to New Holdings:
Gowin Holdings International Limited
c/o Appleby Spurling & Kempe
Cedar House
41 Cedar Avenue
P.O. Box Hm 1179
Hamilton Bermuda HMEX
Attention: Warren Cabral
Facsimile No: (441) 292-8666
With a copy to:
Baker & McKenzie
805 Third Avenue
New York, New York 10022
Attention: James R. Cameron, Esq.
Facsimile No.: (212) 891-3835
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
(c) Notification by Shareholder. Each Shareholder shall notify Trenwick
from time to time, upon request, of the number of Shares beneficially owned by
such Shareholder.
(d) Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Delaware without regard to any laws or regulations
relating to choice of laws (whether of the State of Delaware or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Delaware.
(e) Cooperation. Subject to the terms and conditions of this Agreement,
each of the parties hereby agrees to use its best efforts to take, or cause to
be taken, all action and to do, or cause to be done, all things necessary,
proper or advisable under applicable laws, rules and regulations to consummate
and make effective the actions contemplated by this Agreement. In case at any
time after the execution of this Agreement, further action is necessary or
desirable to carry out the purposes of this Agreement, the proper officers and
directors of each of the parties shall take all such necessary or desirable
action.
(f) Specific Performance. Each of the parties hereto recognizes and
acknowledges that a breach by it of any covenants or agreements contained in
this Agreement will cause the other party to sustain damages for which it would
not have an adequate remedy at law for money damages, and therefore, each of the
parties hereto agrees that in the event of any such breach the aggrieved party
shall be entitled to the remedy of specific performance of such covenants and
agreements and injunctive and other equitable relief in addition to any other
remedy to which it may be entitled, at law or in equity.
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(g) Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same Agreement.
(h) Definitions. Capitalized terms used but not defined herein shall
have the meanings set forth in the Business Combination Agreement.
(i) Descriptive Headings. The descriptive headings used 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.
(j) Severability. Whenever possible, each provision or portion of any
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
(k) Termination. Unless earlier terminated as provided herein, this
Agreement shall terminate, without further liability or obligation of the
parties hereto, including liability for damages, upon the earlier of (i) the
180th calendar day following the termination of the Business Combination
Agreement in accordance with its terms and (ii) consummation of the Scheme of
Arrangement.
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IN WITNESS WHEREOF, this Agreement has been executed by or on behalf of
each of the parties hereto, all as of the date first above written.
TRENWICK GROUP INC.
By:/s/ James F. Billett, Jr.
----------------------------------
Name: James F. Billett, Jr.
Title: Chairman, President and Chief
Executive Officer
SHAREHOLDERS:
COMBINED INSURANCE COMPANY OF AMERICA
By: /s/ Michael A. Conway
---------------------------------
Name: Michael A. Conway
Title: Senior Vice President
VIRGINIA SURETY COMPANY, INC.
By: /s/ Michael A. Conway
---------------------------------
Name: Michael A. Conway
Title: Vice President
AON RISK CONSULTANTS (BERMUDA) LTD.
By: /s/ Michael A. Conway
---------------------------------
Name: Michael A. Conway
Title: Authorized Agent
CONTINENTAL CASUALTY COMPANY
By: /s/ Robert V. Deutsch
---------------------------------
Name: Robert V. Deutsch
Title: Senior Vice President and Chief
Financial Officer
CNA (BERMUDA) SERVICES LIMITED
By: /s/ Robert V. Deutsch
---------------------------------
Name: Robert V. Deutsch
Title: Authorized Agent
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EXHIBIT A
NUMBER OF
NUMBER OF EXCHANGEABLE
COMMON SHARES NON-VOTING OPTIONS
SHAREHOLDER NAME OF LASALLE SHARES OF AND/OR
AND ADDRESS HOLDINGS LASALLE RE WARRANTS
- --------------------
Combined Insurance Company
of America 322,715 1,221,750 0
Virginia Surety Company, Inc. 322,715 1,221,750 0
Aon Risk Consultants (Bermuda) Ltd. 555,244 0 0
Continental Casualty Company 1,425,354 1,963,896 0
CNA (Bermuda) Services Limited 0 318,150 0