Exhibit 99.2
THIRD AMENDMENT AND CONSENT
TO THE FORBEARANCE AGREEMENT
THIRD AMENDMENT AND CONSENT TO THE FORBEARANCE AGREEMENT, dated as
of December 9, 2002 (this "Third Amendment"), among TRENWICK AMERICA CORPORATION
("Trenwick America"), TRENWICK HOLDINGS LIMITED (the "Account Party"), TRENWICK
GROUP LTD. ("Holdings"), LASALLE RE HOLDINGS LIMITED ("LaSalle Holdings"), the
lending institutions party to the Credit Agreement referred to below ( each a
"Bank," and collectively, the "Banks"), and JPMORGAN CHASE BANK, as
Administrative Agent (in such capacity, the "Administrative Agent"). All
capitalized terms used herein and not otherwise defined herein shall have the
meaning provided such terms in the Forbearance Agreement and the Credit
Agreement referred to below.
W I T N E S S E T H :
WHEREAS, Trenwick America, the Account Party, Holdings, LaSalle
Holdings, the Banks and the Administrative Agent are parties to a Forbearance
Agreement dated as of November 11, 2002 (as amended, modified and/or
supplemented to, but not including the date hereof, the "Forbearance
Agreement");
WHEREAS, Trenwick America, the Account Party, the Banks and the
Administrative Agent are parties to the Credit Agreement, dated as of November
24, 1999 and Amended and Restated as of September 27, 2000 (as amended, modified
and/or supplemented to, but not including, the date hereof, the "Credit
Agreement");
WHEREAS, Holdings and the Administrative Agent are parties to the
Holdings Guaranty, dated as of September 27, 2000 (as amended, modified and/or
supplemented to, but not including, the date hereof, the "Holdings Guaranty");
WHEREAS, subject to the terms and conditions set forth below, the
parties hereto wish to amend the Forbearance Agreement as provided herein;
NOW, THEREFORE, it is agreed;
A. Amendment and Waiver
1. Section 2.1 of the Forbearance Agreement is hereby amended by deleting
the date "December 13, 2002" appearing therein and inserting the date "December
31, 2002" in lieu thereof.
2. Notwithstanding anything to the contrary contained in Section 2.2(e) of
the Forbearance Agreement, Holdings and/or its Subsidiaries may use the LaSalle
Collateral and the Cat E Put Proceeds in an aggregate amount not to exceed
approximately (pound)64,699,500 to deposit funds at Lloyd's solely to satisfy
the Lloyd's Solvency Deficit; provided that the Lloyd's
Solvency Deficit is satisfied by first, using no less than the pounds sterling
equivalent of $35,000,000 of the Cat E Put Proceeds and second, by using the
LaSalle Collateral.
3. Notwithstanding anything contained in Section 2.2(e) and 2.3 of the
Forbearance Agreement, Holdings and/or its Subsidiaries may deposit funds at
Lloyd's in an amount not to exceed approximately (pound)9,314,100, in order for
Holdings and/or its Subsidiaries to satisfy Lloyd's underwriting capacity
requirements for the 2003 year of account.
B. Miscellaneous Provisions
1. In order to induce the Banks to enter into this Third Amendment, each
Credit Party hereby represents and warrants that (i) the representations and
warranties of contained in Article IV of the Forbearance Agreement are true and
correct in all material respects on and as of the Forbearance Amendment
Effective Date (as defined below) (except with respect to any representations
and warranties limited by their terms to a specific date, which shall be true
and correct in all material respects as of such date), (ii) there exists no
Forbearance Event of Default under the Forbearance Agreement on the Forbearance
Amendment Effective Date and (iii) there exists no Default or Event of Default
under the Credit Agreement (other than the Events) on the Forbearance Amendment
Effective Date, in each case after giving effect to this Amendment.
2. This Third Amendment is limited as specified and shall not constitute
an amendment, modification, acceptance or waiver of any other provision of the
Forbearance Agreement.
3. THIS THIRD AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
4. This Third Amendment shall become effective on the date (the
"Forbearance Amendment Effective Date") when (i) the Borrower, the Account
Party, Holdings, LaSalle Holdings and the Required Banks shall have signed a
counterpart hereof (whether the same or different counterparts) and shall have
delivered (including by way of telecopier) the same to the Administrative Agent
and (ii) when Lloyd's has issued a letter of comfort in form and substance
satisfactory to the Required Banks.
5. From and after the Forbearance Amendment Effective Date, all references
in the Forbearance Agreement shall be deemed to be referenced to the Forbearance
Agreement as modified hereby.
* * *
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IN WITNESS WHEREOF, the parties hereto have caused this Forbearance
Agreement to be executed by their respective officers thereunto duly authorized,
as of the date first written above.
TRENWICK GROUP LTD.,
in its capacity as a Guarantor and
Pledgor
By /s/ Alan L. Hunte
--------------------------------------
Name: Alan L. Hunte
Title: Executive Vice President and
Chief Financial Officer
TRENWICK AMERICA CORPORATION,
in its capacity as the Borrower and
Guarantor
By /s/ Alan L. Hunte
--------------------------------------
Name: Alan L. Hunte
Title: Executive Vice President and
Chief Financial Officer
TRENWICK HOLDINGS LIMITED,
in its capacity as the Account Party
By /s/ Alan L. Hunte
--------------------------------------
Name: Alan L. Hunte
Title: Director
LASALLE RE HOLDINGS LIMITED,
in its capacity as a Guarantor and
Pledgor
By /s/ John V. Del Col
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Name: John V. Del Col
Title: Director
[Bank Signatures Intentionally Omitted]