Exhibit 10.16
WINTERTHUR GROUP Head Office General Guisan-Strasse 40
CH-8401 Winterthur
Telephone +41 52 261 61 10
www.winterthur.com
REGISTERED
Mr. Brian O'Hara
Chief Executive Officer
XL Insurance (Bermuda) Ltd
One Bermudiana Road
Hamilton HM11
Bermuda
John R. Dacey
CFO
john.dacey@winterthur.ch
July 27, 2004
VARIATION TO THE SPA
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WITHOUT PREJUDICE
Dear Brian,
We would like to thank you for the constructive meeting of last Thursday, 23
July 2004. We set out below certain amendments to the Second Amended and
Restated Agreement dated 15 February 2001 for the sale and purchase of
Winterthur International and between Winterthur Swiss Insurance Company
("Winterthur") and XL Insurance (Bermuda) Ltd ("XL") (the "SPA") discussed
between the parties on the occasion of the said meeting.
We refer to Clause 18.8 SPA, and write to record our and your agreement to the
following variations to the SPA and the procedure there recorded for the purpose
of permitting each of XL and Winterthur additional time for the preparation and
determination of the Seasoned Net Reserves Statement:
1. XL agrees to serve a preliminary draft Seasoned Net Reserves
Statement on Winterthur by 31 August 2004. Such preliminary
draft shall be provided without prejudice and shall contain or
be accompanied by materially the same information or
documentation (especially in electronic form) as is available
and of a type that will be required to be included in or
accompany the Seasoned Net Reserves Statement to be delivered
pursuant to Clause 4.2.2 of the SPA.
2. In the period within 90 Business Days following receipt of the
preliminary draft Seasoned Net Reserves Statement referred to
above, senior executives from our respective organisations
shall meet on a without prejudice basis to discuss the
preliminary draft Seasoned Net Reserves Statement and whether
any disputes over the content thereof should be resolved other
than through the procedure specified in the SPA.
Variation to the SPA
Page 2
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3. If XL and Winterthur do not reach agreement in relation to the
matters referred to in paragraph 2 above within such 90
Business Day period, XL shall deliver the Seasoned Net
Reserves Statement referred to in Clause 4.2.2 SPA. Unless
Winterthur serves written notice on XL requiring the delivery
of the Seasoned Net Reserves Statement, any such Statement can
only be delivered by XL to Winterthur within 30 Business Days
of the expiry of the period of 90 Business Days referred to in
paragraph 2 above. However, in the event that Winterthur
serves written notice on XL requiring the delivery of the
Seasoned Net Reserves Statement (which notice can be served by
Winterthur at any time after the service of the preliminary
draft statement under paragraph 1 above), the Seasoned Net
Reserves Statement must be delivered by XL within 30 Business
Days following the receipt by XL of the said written
notification from Winterthur. The period of time of 30
Business Days following the End Date referred to in Clause
4.2.2 of the SPA for delivery of the Seasoned Net Reserves
Statement by XL is extended accordingly. Once delivery of the
Seasoned Net Reserves Statement has occurred in accordance
with the provisions set out above, the parties shall proceed
in accordance with Clause 4.2.4 and subsequent clauses of the
SPA.
4. Solely for the purposes of the provisions of Clause 4.2.3 of
the SPA and the obligations thereby imposed on XL and the
rights thereby conferred on Winterthur (to include its
Accountants and Actuaries) the preliminary draft Statement to
be served under paragraph 1 above will be treated as if it
were the Seasoned Net Reserves Statement delivered under
Clause 4.2.2 of the SPA.
5. XL and Winterthur confirm that any amendment to the SPA as
effected by this letter shall not affect in any way the
calculation of the Seasoned Net Reserves Amount under Clause
4.2 of the SPA except as set forthwith in paragraph 3 above.
For the avoidance of doubt this letter shall 1) not in any way
affect the economic, financial or other nature of reserve
seasoning, including, without limitation, the fact that losses
occurring subsequent to June 30, 2004 are not included in the
Seasoned Net Reserves Amount and 2) not affect in any way the
determination of the date and/or rate to be used for foreign
exchange conversion of any amount in connection therewith.
6. The provisions of this letter, including the extension of time
referenced in paragraph 3 above, shall apply with equal force
and effect in relation to the provisions of SPA relating to
the Seasoned Net Premiums Receivable Statement.
7. Save as aforesaid the terms of the SPA shall remain un-amended
and in full force and effect.
Variation to the SPA
Page 3
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Kindly confirm your agreement to such variations by returning to us a copy of
this letter endorsed with your signature. Each party hereto has asserted various
legal rights against the other. Nothing herein shall operate as any waiver of
either party's rights in relation to any alleged breach of contract by the
other.
Yours sincerely,
/s/ John R. Dacey /s/ Martha Boeckenfeld
John R. Dacey Martha Boeckenfeld
Agreed by XL Insurance (Bermuda) Ltd
/s/ Brian M. O'Hara
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cc: Paul Giordano
Clive Tobin
Jerry de St. Paer