XL VOTING AGREEMENT
VOTING AGREEMENT, dated as of January 10, 2000 (this "Agreement"), among
Risk Capital Holdings, Inc., a Delaware corporation ("RCHI"), Folksamerica
Holding Company, Inc., a New York corporation ("FHC"), and Garrison Investments
Inc. ("GI") and XL Capital Ltd, a Cayman Islands exempted limited company ("XL"
and together with GI, the "Stockholder").
WHEREAS, on the date hereof, RCHI and Risk Capital Reinsurance Company, a
stock insurance company organized under the laws of the State of Nebraska and a
wholly owned subsidiary of RCHI ("RCRe," and together with RCHI, the "Seller")
propose to enter into an Asset Purchase Agreement dated as of the date hereof
(as such agreement may be amended in immaterial respects, the "Asset Purchase
Agreement"; capitalized terms not otherwise defined herein being used herein
shall have the meanings assigned to such terms in the Asset Purchase Agreement)
with FHC and Folksamerica Reinsurance Company, a stock insurance company
organized under the laws of the State of New York ("FRC," and together with FHC,
the "Purchaser"), pursuant to which Purchaser will purchase and the Seller will
sell the assets comprising the Assumed Business;
WHEREAS, as of the date hereof, the Stockholder owns (both beneficially and
of record) 4,755,000 shares of common stock of RCHI (the "Common Stock");
WHEREAS, as an inducement for the Purchaser to enter into the Asset
Purchase Agreement, the Stockholder has agreed to enter into this Agreement
governing the voting of the shares of Common Stock owned as of the date hereof
and which may hereafter be acquired by the Stockholder prior to the Termination
Date (the "Shares") and the disposition of the Shares;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, and intending to be legally bound hereby, the
parties hereto hereby agree as follows:
1. Title; Voting of Shares. a. The Stockholder represents and warrants that
the Shares set forth above are all the securities of RCHI owned, either of
record or beneficially, by the Stockholder. The Stockholder represents and
warrants that it owns all such Shares free and clear of all security interests,
liens, claims, pledges, options, rights of first refusal, agreements,
limitations on the Stockholder's voting rights, charges and other encumbrances
of any nature whatsoever, other than the Stock Repurchase Agreement, dated as of
January 17, 1999 ("Repurchase Agreement"), by and among XL, GI, RCHI and RCRe
pursuant to which RCHI has agreed to repurchase all of the shares of Common
Stock held by XL and GI on the terms set forth therein, and, except pursuant to
this Agreement, the Stockholder has not
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appointed or granted any proxy, which appointment or grant is still effective,
with respect to the Shares.
b. The Stockholder shall, until the Termination Date, cause the Shares then
owned by such Stockholder to be voted at any meeting of the stockholders of
RCHI, at any adjournment thereof or in any consent in lieu of such a meeting in
favor of the Asset Purchase Agreement and the transactions contemplated thereby.
For the purposes of this Agreement, "Termination Date" shall mean the earliest
of (i) the termination of the Asset Purchase Agreement in accordance with its
terms, (ii) the Closing Date, (iii) the termination of this Agreement by the
mutual written agreement of the parties hereto, (iv) the date on which the Asset
Purchase Agreement and the transactions contemplated thereby shall have been
approved by the affirmative vote of the stockholders of RCHI by the requisite
vote in accordance with applicable law, (v) any material amendment to the Asset
Purchase Agreement, (vi) the closing of the transactions contemplated by the
Repurchase Agreement or (vii) July 31, 2000.
2. Irrevocable Proxy. Only with respect to the approval of the Asset
Purchase Agreement and the transactions contemplated thereby and for no other
purpose, the Stockholder hereby grants to, and appoints FHC and the president of
FHC, in his capacity as an officer of FHC, and any individual who shall
hereafter succeed to such office of FHC, and any other designee of FHC, each of
them individually, the Stockholder's proxy and attorney-in-fact (with full power
of substitution) to vote or act by written consent with respect to the Shares
until the Termination Date. This proxy is coupled with an interest and shall be
irrevocable; provided that this proxy shall terminate on the Termination Date.
3. No Disposition or Encumbrance of Shares or Warrants. The Stockholder
hereby covenants and agrees that, until the Termination Date, the Stockholder
shall not, and shall not offer or agree to, sell, transfer, tender, assign,
hypothecate or otherwise dispose of, or create or permit to exist any security
interest, lien, claim, pledge, option, right of first refusal, agreement,
limitation on the Stockholder's voting rights, charge or other encumbrance of
any nature whatsoever with respect to, the Shares; provided that the Stockholder
shall be permitted to transfer the Shares (i) to any wholly owned subsidiary of
the Stockholder that agrees to be bound by the terms of this Agreement, (ii) to
RCHI or any wholly-owned subsidiary of RCHI, or (iii) to any other person that
expressly assumes and agrees to be bound by this Agreement.
4. Miscellaneous.
a. Amendment and Modification. This Agreement may be amended, modified or
supplemented only by written agreement signed by the parties hereto.
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b. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
EXECUTED IN AND TO BE PERFORMED IN THAT STATE WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW.
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IN WITNESS WHEREOF, each of the undersigned has duly executed this
Agreement, as of the date first written above.
RISK CAPITAL HOLDINGS, INC.
By: /s/ Peter A. Appel
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Name: Peter A. Appel
Title: Executive Vice President and
Chief Operating Officer
FOLKSAMERICA HOLDING COMPANY, INC.
By: /s/ Donald Emeigh
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Name: Donald Emeigh
Title: Sr. Vice President, General
Counsel & Secretary
Stockholder:
XL CAPITAL LTD
By: /s/ Paul S. Giordano
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Name: Paul S. Giordano
Title: Executive Vice President, General
Counsel and Secretary
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GARRISON INVESTMENTS INC.
By: /s/ Paul S. Giordano
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Name: Paul S. Giordano
Title: Assistant Secretary