Document:

<PAGE>
                                                                    EXHIBIT 10.8

                         REGISTRATION RIGHTS AGREEMENT

                                March 19, 1996

To each of the several Purchasers named in
Schedule I to the Series A Convertible Preferred
Stock Purchase Agreement of even date herewith
(each a "Purchaser" and, collectively, the
"Purchasers")

Ladies and Gentlemen:

          This will confirm that in consideration of your agreement on the date
hereof to purchase an aggregate of 804 shares (the "Preferred Shares") of Series
A Convertible Preferred Stock, $0.01 par value ("Preferred Stock"), of Teledata
Solutions, Inc., an Illinois corporation (the "Company"), pursuant to the Series
A Convertible Preferred Stock Purchase Agreement of even date herewith (the
"Purchase Agreement") between the Company and you and as an inducement to you to
consummate the transactions contemplated by the Purchase Agreement, the Company
covenants and agrees with each of you as follows:

          1. Certain Definitions. As used in this Agreement, the following terms
shall have the following respective meanings:

          "Commission" shall mean the Securities and Exchange Commission, or any
     other federal agency at the time administering the Securities Act.

          "Common Stock" shall mean the Common Stock, $no par value, of the
     Company, as constituted as of the date of this Agreement.

          "Conversion Shares" shall mean shares of Common Stock issued upon
     conversion of the Preferred Shares.

          "Exchange Act" shall mean the Securities Exchange Act of 1934, as
     amended, or any similar federal statute, and the rules and regulations of
     the Commission thereunder, all as the same shall be in effect at the time.

          "Registration Expenses" shall mean the expenses so described in
     Section 8.

          "Restricted Stock" shall mean the Conversion Shares, excluding
     Conversion Shares which have been (a) registered under the Securities Act
     pursuant to an effective registration statement filed thereunder and
     disposed of in accordance with the registration statement covering them or
     (b) publicly sold pursuant to Rule 144 under the Securities Act.
<PAGE>

          "Securities Act" shall mean the Securities Act of 1933, as amended, or
     any similar federal statute, and the rules and regulations of the
     Commission thereunder, all as the same shall be in effect at the time.

          "Selling Expenses" shall mean the expenses so described in Section 8.

          2. Restrictive Legend. Each certificate representing Preferred Shares
or Conversion Shares shall, except as otherwise provided in this Section 2 or in
Section 3, be stamped or otherwise imprinted with a legend substantially in the
following form:

          "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
          1933 OR ANY STATE SECURITIES LAWS AND MAY NOT BE TRANSFERRED OR
          OTHERWISE DISPOSED OF UNLESS IT HAS BEEN REGISTERED UNDER SUCH ACT AND
          ALL SUCH APPLICABLE LAWS OR AN EXEMPTION FROM REGISTRATION IS
          AVAILABLE."

A certificate shall not bear such legend if in the opinion of counsel
satisfactory to the Company (it being agreed that Testa, Hurwitz & Thibeault
shall be satisfactory) the securities represented thereby may be publicly sold
without registration under the Securities Act and any applicable state
securities laws.

          3. Notice of Proposed Transfer. Prior to any proposed transfer of any
Preferred Shares or Conversion Shares (other than under the circumstances
described in Sections 4, 5 or 6), the holder thereof shall give written notice
to the Company of its intention to effect such transfer. Each such notice shall
describe the manner of the proposed transfer and, if requested by the Company,
shall be accompanied by an opinion of counsel satisfactory to the Company (it
being agreed that Testa, Hurwitz & Thibeault shall be satisfactory) to the
effect that the proposed transfer may be effected without registration under the
Securities Act and any applicable state securities laws, whereupon the holder of
such stock shall be entitled to transfer such stock in accordance with the terms
of its notice; provided, however, that no such opinion of counsel shall be
required for a transfer to one or more partners of the transferor (in the case
of a transferor that is a partnership) or to an affiliated corporation (in the
case of a transferor that is a corporation). Each certificate for Preferred
Shares or Conversion Shares transferred as above provided shall bear the legend
set forth in Section 2, except that such certificate shall not bear such legend
if (i) such transfer is in accordance with the provisions of Rule 144 (or any
other rule permitting public sale without registration under the Securities Act)
or (ii) the opinion of counsel referred to above is to the further effect that
the transferee and any subsequent transferee (other than an affiliate of the
Company) would be entitled to transfer such securities in a public sale without
registration under the Securities Act. The restrictions provided for in this
Section 3 shall not apply to securities which are not required to bear the
legend prescribed by Section 2 in accordance with the provisions of that
Section.

          4. Required Registration. (a) At any time after the earliest of (i)
six months after any registration statement covering a public offering of
securities of the Company under the Securities Act shall have become effective,
(ii) six months after the Company shall have become

                                      -2-
<PAGE>

a reporting company under Section 12 of the Exchange Act, and (iii) the fifth
anniversary of the date of this Agreement, the holders of Restricted Stock
constituting at least 40% of the total shares of Restricted Stock then
outstanding may request the Company to register under the Securities Act all or
any portion of the shares of Restricted Stock held by such requesting holder or
holders for sale in the manner specified in such notice, provided that the
shares of Restricted Stock for which registration has been requested shall
constitute at least 20% of the total shares of Restricted Stock originally
issued if such holder or holders shall request the registration of less than all
shares of Restricted Stock then held by such holder or holders (or any lesser
percentage if the reasonably anticipated aggregate price to the public of such
public offering would exceed $5,000,000). For purposes of this Section 4 and
Sections 5, 6, 13(a) and 13(d), the term "Restricted Stock" shall be deemed to
include the number of shares of Restricted Stock which would be issuable to a
holder of Preferred Shares upon conversion of all Preferred Shares held by such
holder at such time, provided, however, that the only securities which the
Company shall be required to register pursuant hereto shall be shares of Common
Stock, and provided, further, however, that, in any underwritten public offering
contemplated by this Section 4 or Sections 5 and 6, the holders of Preferred
Shares shall be entitled to sell such Preferred Shares to the underwriters for
conversion and sale of the shares of Common Stock issued upon conversion
thereof. Notwithstanding anything to the contrary contained herein, no request
may be made under this Section 4 within 120 days after the effective date of a
registration statement filed by the Company covering a firm commitment
underwritten public offering in which the holders of Restricted Stock shall have
been entitled to join pursuant to Sections 5 or 6 and in which there shall have
been effectively registered all shares of Restricted Stock as to which
registration shall have been requested.

          (b)  Following receipt of any notice under this Section 4, the Company
shall immediately notify all holders of Restricted Stock from whom notice has
not been received and shall use its best efforts to register under the
Securities Act, for public sale in accordance with the method of disposition
specified in such notice from requesting holders, the number of shares of
Restricted Stock specified in such notice (and in all notices received by the
Company from other holders within 30 days after the giving of such notice by the
Company).  If such method of disposition shall be an underwritten public
offering, the holders of a majority of the shares of Restricted Stock to be sold
in such offering may designate the managing underwriter of such offering,
subject to the approval of the Company, which approval shall not be unreasonably
withheld or delayed.  The Company shall be obligated to register Restricted
Stock pursuant to this Section 4 on two occasions only, provided, however, that
such obligation shall be deemed satisfied only when a registration statement
covering all shares of Restricted Stock specified in notices received as
aforesaid, for sale in accordance with the method of disposition specified by
the requesting holders, shall have become effective and, if such method of
disposition is a firm commitment underwritten public offering, all such shares
shall have been sold pursuant thereto.

          (c)  The Company shall be entitled to include in any registration
statement referred to in this Section 4, for sale in accordance with the method
of disposition specified by the requesting holders, shares of Common Stock to be
sold by the Company for its own account, except as and to the extent that, in
the opinion of the managing underwriter (if such method of disposition shall be
an underwritten public offering), such inclusion would adversely affect the
marketing of the Restricted Stock to be sold.  Except for registration
statements on Form S-4, S-8

                                      -3-
<PAGE>

or any successor thereto, the Company will not file with the Commission any
other registration statement with respect to its Common Stock, whether for its
own account or that of other stockholders, from the date of receipt of a notice
from requesting holders pursuant to this Section 4 until the completion of the
period of distribution of the registration contemplated thereby.

          5.  Incidental Registration.  If the Company at any time (other than
pursuant to Section 4 or Section 6) proposes to register any of its securities
under the Securities Act for sale to the public, whether for its own account or
for the account of other security holders or both (except with respect to
registration statements on Forms S-4, S-8 or another form not available for
registering the Restricted Stock for sale to the public), each such time it will
give written notice to all holders of outstanding Restricted Stock of its
intention so to do.  Upon the written request of any such holder, received by
the Company within 30 days after the giving of any such notice by the Company,
to register any of its Restricted Stock, the Company will use its best efforts
to cause the Restricted Stock as to which registration shall have been so
requested to be included in the securities to be covered by the registration
statement proposed to be filed by the Company, all to the extent requisite to
permit the sale or other disposition by the holder of such Restricted Stock so
registered.  In the event that any registration pursuant to this Section 5 shall
be, in whole or in part, an underwritten public offering of Common Stock, the
number of shares of Restricted Stock to be included in such an underwriting may
be reduced (pro rata among the requesting holders based upon the number of
shares of Restricted Stock owned by such holders) if and to the extent that the
managing underwriter shall be of the opinion that such inclusion would adversely
affect the marketing of the securities to be sold by the Company therein,
provided, however, that such number of shares of Restricted Stock shall not be
reduced if any shares are to be included in such underwriting for the account of
any person other than the Company or requesting holders of Restricted Stock, and
provided, further, however, that in no event may less than one-third of the
total number of shares of Common Stock to be included in such underwriting be
made available for shares of Restricted Stock.  Notwithstanding the foregoing
provisions, the Company may withdraw any registration statement referred to in
this Section 5 without thereby incurring any liability to the holders of
Restricted Stock.

          6.  Registration on Form S-3.  If at any time (i) a holder or holders
of Preferred Shares or Restricted Stock request that the Company file a
registration statement on Form S-3 or any successor thereto for a public
offering of all or any portion of the shares of Restricted Stock held by such
requesting holder or holders, the reasonably anticipated aggregate price to the
public of which would exceed $1,000,000, and (ii) the Company is a registrant
entitled to use Form S-3 or any successor thereto to register such shares, then
the Company shall use its best efforts to register under the Securities Act on
Form S-3 or any successor thereto, for public sale in accordance with the method
of disposition specified in such notice, the number of shares of Restricted
Stock specified in such notice.  Whenever the Company is required by this
Section 6 to use its best efforts to effect the registration of Restricted
Stock, each of the procedures and requirements of Section 4 (including but not
limited to the requirement that the Company notify all holders of Restricted
Stock from whom notice has not been received and provide them with the
opportunity to participate in the offering) shall apply to such registration,
provided, however, that there shall be no limitation on the number of
registrations on Form S-3 which may be requested and obtained under this Section
6, and provided, further, however, that

                                      -4-
<PAGE>

the requirements contained in the first sentence of Section 4(a) shall not apply
to any, registration on Form S-3 which may be requested and obtained under this
Section 6.

          7.  Registration Procedures.  If and whenever the Company is required
by the provisions of Sections 4, 5 or 6 to use its best efforts to effect the
registration of any shares of Restricted Stock under the Securities Act, the
Company will, as expeditiously as possible:

          (a)  prepare and file with the Commission a registration statement
(which, in the case of an underwritten public offering pursuant to Section 4,
shall be on Form S-1 or other form of general applicability satisfactory to the
managing underwriter selected as therein provided) with respect to such
securities and use its best efforts to cause such registration statement to
become and remain effective for the period of the distribution contemplated
thereby (determined as hereinafter provided);

          (b)  prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period specified in paragraph (a) above and comply with the provisions of
the Securities Act with respect to the disposition of all Restricted Stock
covered by such registration statement in accordance with the sellers' intended
method of disposition set forth in such registration statement for such period;

          (c)  furnish to each seller of Restricted Stock and to each
underwriter such number of copies of the registration statement and the
prospectus included therein (including each preliminary prospectus) as such
persons reasonably may request in order to facilitate the public sale or other
disposition of the Restricted Stock covered by such registration statement;

          (d)  use its best efforts to register or qualify the Restricted Stock
covered by such registration statement under the securities or "blue sky" laws
of such jurisdictions as the sellers of Restricted Stock or, in the case of an
underwritten public offering, the managing underwriter reasonably shall request,
provided, however, that the Company shall not for any such purpose be required
to qualify generally to transact business as a foreign corporation in any
jurisdiction where it is not so qualified or to consent to general service of
process in any such jurisdiction;

          (e)  use its best efforts to list the Restricted Stock covered by such
registration statement with any securities exchange on which the Common Stock of
the Company is then listed;

          (f)  immediately notify each seller of Restricted Stock and each
underwriter under such registration statement, at any time when a prospectus
relating thereto is required to  be delivered under the Securities Act, of the
happening of any event of which the Company has knowledge as a result of which
the prospectus contained in such registration statement, as then in effect,
includes an untrue statement of a material fact or omits to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing;

                                      -5-
<PAGE>

          (g)  if the offering is underwritten and at the request of any seller
of Restricted Stock, use its best efforts to furnish on the date that Restricted
Stock is delivered to the underwriters for sale pursuant to such registration:
(i) an opinion dated such date of counsel representing the Company for the
purposes of such registration, addressed to the underwriters and to such seller,
stating that such registration statement has become effective under the
Securities Act and that (A) to the best knowledge of such counsel, no stop order
suspending the effectiveness thereof has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the Securities
Act, (B) the registration statement, the related prospectus and each amendment
or supplement thereof comply as to form in all material respects with the
requirements of the Securities Act (except that such counsel need not express
any opinion as to financial statements contained therein) and (C) to such other
effects as reasonably may be requested by counsel for the underwriters or by
such seller or its counsel and (ii) a letter dated such date from the
independent public accountants retained by the Company, addressed to the
underwriters and to such seller, stating that they are independent public
accountants within the meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements of the Company included in the
registration statement or the prospectus, or any amendment or supplement
thereof, comply as to form in all material respects with the applicable
accounting requirements of the Securities Act, and such letter shall
additionally cover such other financial matters (including information as to the
period ending no more than five business days prior to the date of such letter)
with respect to such registration as such underwriters reasonably may request;
and

          (h)  make available for inspection by each seller of Restricted Stock,
any underwriter participating in any distribution pursuant to such registration
statement, and any  attorney, accountant or other agent retained by such seller
or underwriter, all financial and other  records, pertinent corporate documents
and properties of the Company, and cause the Company's officers, directors and
employees to supply all information reasonably requested by any such seller,
underwriter, attorney, accountant or agent in connection with such registration
statement.

          For purposes of Section 7(a) and 7(b) and of Section 4(c), the period
of distribution of Restricted Stock in a firm commitment underwritten public
offering shall be deemed to extend until each underwriter has completed the
distribution of all securities purchased by it, and the period of distribution
of Restricted Stock in any other registration shall be deemed to extend until
the earlier of the sale of all Restricted Stock covered thereby and 120 days
after the effective date thereof.

          In connection with each registration hereunder, the sellers of
Restricted Stock will furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as reasonably shall
be necessary in order to assure compliance with federal and applicable state
securities laws.

          In connection with each registration pursuant to Sections 4, 5 or 6
covering an underwritten public offering, the Company and each seller agree to
enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions as are
customary in the securities business for such an

                                      -6-
<PAGE>

arrangement between such underwriter and companies of the Company's size and
investment stature.

          8.  Expenses.  All expenses incurred by the Company in complying with
Sections 4, 5 and 6, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel and independent
public accountants for the Company, fees and expenses (including counsel fees)
incurred in connection with complying with state securities or "blue sky" laws,
fees of the National Association of Securities Dealers, Inc., transfer taxes,
fees of transfer agents and registrars, costs of insurance and reasonable fees
and disbursements of one counsel for the sellers of Restricted Stock, but
excluding any Selling Expenses, are called "Registration Expenses". All
underwriting discounts and selling commissions applicable to the sale of
Restricted Stock are called "Selling Expenses."

          The Company will pay all Registration Expenses in connection with each
registration statement under Sections 4, 5 or 6. All Selling Expenses in
connection with each registration statement under Sections 4, 5 or 6 shall be
borne by the participating sellers in proportion to the number of shares sold by
each, or by such participating sellers other than the Company (except to the
extent the Company shall be a seller) as they may agree.

          9.  Indemnification and Contribution.  (a) In the event of a
registration of any of the Restricted Stock under the Securities Act pursuant to
Sections 4, 5 or 6, the Company will indemnify and hold harmless each seller of
such Restricted Stock thereunder, each underwriter of such Restricted Stock
thereunder and each other person, if any, who controls such seller or
underwriter within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such seller,
underwriter or controlling person may become subject under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such Restricted Stock was registered under the Securities Act
pursuant to Sections 4, 5 or 6, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse each such seller, each such underwriter and each
such controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim, damage,
liability or action, provided, however, that the Company will not be liable in
any such case if and to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission so made in conformity with information
furnished by any such seller, any such underwriter or any such controlling
person in writing specifically for use in such registration statement or
prospectus.

          (b)  In the event of a registration of any of the Restricted Stock
under the Securities Act pursuant to Sections 4, 5 or 6, each seller of such
Restricted Stock thereunder, severally and not jointly, will indemnify and hold
harmless the Company, each person, if any, who controls the Company within the
meaning of the Securities Act, each officer of the Company who signs the
registration statement, each director of the Company, each underwriter

                                      -7-
<PAGE>

and each person who controls any underwriter within the meaning of the
Securities Act, against all losses, claims, damages or liabilities, joint or
several, to which the Company or such officer, director, underwriter or
controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the registration statement under
which such Restricted Stock was registered under the Securities Act pursuant to
Sections 4, 5 or 6, any preliminary prospectus or final prospectus contained
therein, or any amendment or supplement thereof, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse the Company and each such officer, director, underwriter and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action, provided, however, that such seller will be liable
hereunder in any such case if and only to the extent that any such loss, claim,
damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in reliance upon
and in conformity with information pertaining to such seller, as such, furnished
in writing to the Company by such seller specifically for use in such
registration statement or prospectus, and provided, further, however, that the
liability of each seller hereunder shall be limited to the proportion of any
such loss, claim, damage, liability or expense which is equal to the proportion
that the public offering price of the shares sold by such seller under such
registration statement bears to the total public offering price of all
securities sold thereunder, but not in any event to exceed the proceeds received
by such seller from the sale of Restricted Stock covered by such registration
statement.

          (c) Promptly after receipt by an indemnified party hereunder of notice
of the commencement of any action, such indemnified party shall, if a claim in
respect thereof is to be made against the indemnifying party hereunder, notify
the indemnifying party in writing thereof, but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
such indemnified party other than under this Section 9 and shall only relieve it
from any liability which it may have to such indemnified party under this
Section 9 if and to the extent the indemnifying party is prejudiced by such
omission.  In case any such action shall be brought against any indemnified
party and it shall notify the indemnifying party of the commencement thereof,
the indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Section 9 for any legal expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation and of liaison with counsel so selected, provided,
however, that, if the defendants in any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have reasonably
concluded that there may be reasonable defenses available to it which are
different from or additional to those available to the indemnifying party or if
the interests of the indemnified party reasonably may be deemed to conflict with
the interests of the indemnifying party, the indemnified party shall have the
right to select a separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such

                                      -8-
<PAGE>

action, with the expenses and fees of such separate counsel and other expenses
related to such participation to be reimbursed by the indemnifying party as
incurred.

          (d)  In order to provide for just and equitable contribution to joint
liability under the Securities Act in any case in which either (i) any holder of
Restricted Stock exercising rights under this Agreement, or any controlling
person of any such holder, makes a claim for indemnification pursuant to this
Section 9 but it is judicially determined (by the entry of a final judgment or
decree by a court of competent jurisdiction and the expiration of time to appeal
or the denial of the last right of appeal) that such indemnification may not be
enforced in such case notwithstanding the fact that this Section 9 provides for
indemnification in such case, or (ii) contribution under the Securities Act may
be required on the part of any such selling holder or any such controlling
person in circumstances for which indemnification is provided under this Section
9; then, and in each such case, the Company and such holder will contribute to
the aggregate losses, claims, damages or liabilities to which they may be
subject (after contribution from others) in such proportion so that such holder
is responsible for the portion represented by the percentage that the public
offering price of its Restricted Stock offered by the registration statement
bears to the public offering price of all securities offered by such
registration statement, and the Company is responsible for the remaining
portion; provided, however, that, in any such case, (A) no such holder will be
required to contribute any amount in excess of the public offering price of all
such Restricted Stock offered by it pursuant to such registration statement; and
(B) no person or entity guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) will be entitled to contribution
from any person or entity who was not guilty of such fraudulent
misrepresentation.

          10.  Chances in Common Stock or Preferred Stock.  If, and as often as,
there is any, change in the Common Stock or the Preferred Stock by way of a
stock split, stock dividend, combination or reclassification, or through a
merger, consolidation, reorganization or recapitalization, or by any other
means, appropriate adjustment shall be made in the provisions hereof so that the
rights and privileges granted hereby shall continue with respect to the Common
Stock or the Preferred Stock as so changed.

          11.  Rule 144 Reporting.  With a view to making available the benefits
of certain rules and regulations of the Commission which may at any time permit
the sale of the Restricted Stock to the public without registration, at all
times after 90 days after any registration statement covering a public offering
of securities of the Company under the Securities Act shall have become
effective, the Company agrees to:

          (a)  make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act;

          (b)  use its best efforts to file with the Commission in a timely
manner all reports and other documents required of the Company under the
Securities Act and the Exchange Act; and

          (c)  furnish to each holder of Restricted Stock forthwith upon request
a written statement by the Company as to its compliance with the reporting
requirements of such Rule 144

                                      -9-
<PAGE>

and of the Securities Act and the Exchange Act, a copy of the most recent annual
or quarterly report of the Company, and such other reports and documents so
filed by the Company as such holder may reasonably request in availing itself of
any rule or regulation of the Commission allowing such holder to sell any
Restricted Stock without registration.

          12.  Representations and Warranties of the Company.  The Company
represents and warrants to you as follows:

          (a)  The execution, delivery and performance of this Agreement by the
Company have been duly authorized by all requisite corporate action and will not
violate any provision of law, any order of any court or other agency of
government, the Charter or By-laws of the Company or any provision of any
indenture, agreement or other instrument to which it or any or its properties or
assets is bound, conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under any such indenture, agreement
or other instrument or result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any of the properties or assets of
the Company.

          (b)  This Agreement has been duly executed and delivered by the
Company and constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms.

          13.  Miscellaneous.

          (a)  All covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto (including without
limitation transferees of any Preferred Shares or Restricted Stock), whether so
expressed or not, provided, however, that registration rights conferred herein
on the holders of Preferred Shares or Restricted Stock shall only inure to the
benefit of a transferee of Preferred Shares or Restricted Stock if (i) there is
transferred to such transferee at least 20% of the total shares of Restricted
Stock originally issued pursuant to the Purchase Agreement to the direct or
indirect transferor of such transferee or (ii) such transferee is a partner,
shareholder or affiliate of a party hereto.

          (b)  All notices, requests, consents and other communications
hereunder shall be in writing and shall be delivered in person, mailed by
certified or registered mail, return receipt requested, or sent by telecopier or
telex, addressed as follows:

          if to the Company or any other party hereto, at the address of such
     party set forth in the Purchase Agreement;

          if to any subsequent holder of Preferred Shares or Restricted Stock,
     to it at such address as may have been furnished to the Company in writing
     by such holder;

or, in any case, at such other address or addresses as shall have been furnished
in writing to the Company (in the case of a holder of Preferred Shares or
Restricted Stock). or to the holders of

                                      -10-
<PAGE>

Preferred Shares or Restricted Stock (in the case of the Company) in accordance
with the provisions of this paragraph.

          (c)  This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.

          (d)  This Agreement may not be amended or modified, and no provision
hereof may be waived, without the written consent of the Company and the holders
of at least two-thirds of the outstanding shares of Restricted Stock.

          (e)  This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

          (f)  The obligations of the Company to register shares of Restricted
Stock under Sections 4, 5 or 6 shall terminate on the fifteenth anniversary of
the date of this Agreement.

          (g)  If requested in writing by the underwriters for the initial
underwritten public offering of securities of the Company, each holder of
Restricted Stock who is a party to this Agreement shall agree not to sell
publicly any shares of Restricted Stock or any other shares of Common Stock
(other than shares of Restricted Stock or other shares of Common Stock being
registered in such offering), without the consent of such underwriters, for a
period of not more than 270 days following the effective date of the
registration statement relating to such offering; provided, however, that all
persons entitled to registration rights with respect to shares of Common Stock
who are not parties to this Agreement, all other persons selling shares of
Common Stock in such offering, all persons holding in excess of 1% of the
capital stock of the Company on a fully diluted basis and all executive officers
and directors of the Company shall also have agreed not to sell publicly their
Common Stock under the circumstances and pursuant to the terms set forth in this
Section 13(g).

          (h)  Notwithstanding the provisions of Section 7(a), the Company's
obligation to file a registration statement, or cause such registration
statement to become and remain effective, shall be suspended for a period not to
exceed 90 days in any 24-month period if there exists at the time material non-
public information relating to the Company which, in the reasonable opinion of
the Company, should not be disclosed.

          (i)  The Company shall not grant to any third party any registration
rights more favorable than or inconsistent with any of those contained herein,
so long as any of the registration rights under this Agreement remains in
effect.

                                      -11-
<PAGE>

          (j)  If any provision of this Agreement shall be held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability shall
attach only to such provision and shall not in any manner affect or render
illegal, invalid or unenforceable any other provision of this Agreement, and
this Agreement shall be carried out as if any such illegal, invalid or
unenforceable provision were not contained herein.

          Please indicate your acceptance of the foregoing by signing and
returning the enclosed counterpart of this letter, whereupon this Agreement
shall be a binding agreement between the Company and you.

                                       Very truly yours,

                                       TELEDATA SOLUTIONS, INC.

                                       By:  ____________________________

                                       Title:  _________________________

AGREED TO AND ACCEPTED as of the date first above written.

Purchasers named in Schedule I to the Purchase Agreement:

ARCH VENTURE FUND II, L.P.

By:  ARCH Management Partners II, L.P., its General Partner

     By:  ARCH Venture Partners, L.P. its General Partner

          By:  ARCH Venture Corporation, its General Manager

               By: ____________________________________
                     Keith Crandell
                     Managing Director

                                      -12-
<PAGE>

ARCH II PARALLEL FUND, L.P.

By:  ARCH Management Partners II, L.P., its General Partner

     By:  ARCH Venture Partners, L.P., its General Partner

          By:  ARCH Venture Corporation, its General Manager

               By:_____________________
                  Keith Crandell
                  Managing Director

WILLIAM BLAIR CAPITAL PARTNERS V., L.P.

By:  William Blair Capital Partners, LLC, its General Partner

     By:_________________________________

     Title: ______________________________

                                      -13-
<PAGE>

                                AMENDMENT NO. 1
                                       TO
                         REGISTRATION RIGHTS AGREEMENT

     AMENDMENT NO. 1, dated as of December 20,1996 by and among Teledata
Solutions, Inc., an Illinois corporation (the "Company"), certain holders of the
Company's outstanding securities (collectively, the "Existing Investors") and
those purchasers listed in Schedule I to the Series B Convertible Preferred
Stock Purchase Agreement (the "Purchase Agreement") dated the date hereof
(collectively, including such purchasers who participate in any Additional
Closing (as defined in the Purchase Agreement) and who execute a counterpart to
this Agreement, the "Purchasers").

     WHEREAS, the Company and the Existing Investors are parties to that
Registration Rights Agreement (the "Registration Rights Agreement") by and among
the Company and the parties named therein dated as of the 19th day of March
1996; and

     WHEREAS, the Purchasers are purchasing from the Company and the Company is
issuing and selling to the Purchasers up to 1,599,888 shares (the "Series B
Shares") of Series B Convertible Preferred Stock, par value $.01, ("Series B
Stock") of the Company at the aggregate purchase price of up to $6,000,000
pursuant to the Purchase Agreement, and

     WHEREAS, it is a condition to the purchase of the Series B Shares that the
Registration Rights Agreement be amended to grant the Purchasers certain rights
thereunder, and the parties hereto desire to amend the Registration Rights
Agreement as set forth below;

     NOW, THEREFORE in consideration of the foregoing and the promises and
covenants contained herein, the parties hereby agree as follows:

1.   That Section 1 be and hereby is amended to add the following definition in
     appropriate alphabetical order:

     "Preferred Shares" shall mean shares of the Company's Series A Convertible
     Preferred Stock, par value $.01 and Series B Convertible Preferred Stock,
     par value $.01.

2.   Capitalized terms used but not otherwise defined herein shall have the
     meanings ascribed to them in the Registration Rights Agreement.

3.   In all other respects, the Registration Rights Agreement is hereby
     ratified, confirmed and approved, and all terms thereof shall remain in
     full force and effect.

4.   This Amendment No. 1 may be executed in counterparts, each of which shall
     constitute an original, but all of which, when taken together, shall
     constitute but one agreement.

                      [Signature Pages Follow Immediately]

                                      -14-
<PAGE>

                                  COMPANY:

                                  TELEDATA SOLUTIONS, INC.

                                  By:_______________________________________
                                     Name:
                                     Title:

                                  EXISTING AND NEW PURCHASERS:

                                  ARCH VENTURE FUND II, L.P.

                                  By:  ARCH Management Partners II, L.P., its
                                       General Partner

                                       By:  ARCH Venture Partners, its General
                                            Partner

                                       By:  ARCH Venture Corporation, its
                                            General Partner

                                            By:_____________________
                                               Keith Crandell
                                               Managing Director

                                  ARCH II PARALLEL FUND, L.P.

                                  By:  ARCH Management Partners II, L.P., its
                                       General Partner

                                  By:  ARCH Venture Partners, L.P., its
                                       General Partner

                                       By:  ARCH Venture Corporation, its
                                            General Manager

                                            By:_____________________
                                               Keith Crandell
                                               Managing Director

                                      -15-
<PAGE>

                                   WILLIAM BLAIR CAPITAL PARTNERS V., L.P.

                                   By:  William Blair Capital Partners, LLC, its
                                        General Partner

                                        By:_________________________________

                                        Name: ______________________________

                                   NEW PURCHASERS:

                                   ALLSTATE INSURANCE COMPANY

                                   By: ______________________________________

                                   By: ______________________________________
                                             its Authorized Signatories

                                   ARCH VENTURE FUND III, L.P.

                                   By:  ARCH Venture Partners, LLC, its General
                                        Partner

                                   By:______________________________________
                                        Keith Crandell
                                        Managing Director

                                      -16-
<PAGE>

                                AMENDMENT NO. 2
                                       TO
                         REGISTRATION RIGHTS AGREEMENT

     AMENDMENT NO. 2, dated as of March 11, 1998 by and among Apropos
Technology, Inc. (FKA "Teledata Solutions, Inc."), an Illinois corporation (the
"Company"), certain holders of the Company's outstanding securities
(collectively, the "Existing Investors") and the person listed under the heading
"New Investor" on the signature pages hereto (together with the Existing
Investors, the "Purchasers").

     WHEREAS, the Company and the Existing Investors are parties to that
Registration Rights Agreement (the "Registration Rights Agreement") by and among
the Company and the parties named therein dated as of the 19th day of March
1996, as amended by Amendment No. 1 to Registration Rights Agreement dated
December 20, 1996; and

     WHEREAS, certain of the Purchasers are purchasing from the Company and the
Company is issuing and selling to such Purchasers an aggregate of 1,152,737
shares (the "Series C Shares") of Series C Convertible Preferred Stock, par
value $.01, of the Company (the "Series C Stock") at the aggregate purchase
price of $8,000,000 pursuant to the certain Series Convertible Preferred Stock
Purchase Agreement dated as of March 11, 1998 between the Company and such
Purchasers (the "Purchase Agreement"); and

     WHEREAS, it is a condition to the purchase of the Series C Shares that the
Registration Rights Agreement be further amended to grant the Purchasers certain
rights thereunder, and the parties hereto desire to amend the Registration
Rights Agreement as set forth below;

     NOW, THEREFORE in consideration of the foregoing and the promises and
covenant contained herein, the parties hereby agree as follows:

1.   That Section 1 of the Registration Rights Agreement be and hereby is
     amended to restate the definition of "Preferred Shares" to read in its
     entirety as follows:

          "Preferred Shares" shall mean shares of the Company's
          Series A Convertible Preferred Stock, par value $.01,
          Series B Convertible Preferred Stock, par value $.01,
          and Series Convertible Preferred Stock, $.01 par value
          per share.

2.   Capitalized terms used but not otherwise defined herein shall have the
     meanings ascribed to them in the Registration Rights Agreement.

3.   In all other respects, the Registration Rights Agreement is hereby
     ratified, confirmed and approved, and all terms thereof shall remain in
     full force and effect.

4.   This Amendment No. 2 may be executed in counterparts, each of which shall
     constitute an original, but all of which, when taken together, shall
     constitute but one agreement.
                      [Signature Pages Follow Immediately]

                                      -17-
<PAGE>

     IN WITNESS WHEREOF, the Company, the Existing Investors and the New
Investor have executed this Amendment No. 2 as of the day and year first above.

                                    COMPANY:

                                    APROPOS TECHNOLOGY, INC

                                    By:_______________________________________
                                       Name:
                                       Title:

                                    EXISTING INVESTORS:

                                    ARCH VENTURE FUND II, L.P.

                                    By:  ARCH Management Partners II, L.P., its
                                         General Partner

                                         By:  ARCH Venture Partners, its General
                                              Partner

                                              By:  ARCH Venture Corporation, its
                                                   General Partner

                                                   By:_____________________
                                                      Keith Crandell
                                                      Managing Director

                                    ARCH II PARALLEL FUND, L.P.

                                    By:  ARCH Management Partners II, L.P., its
                                         General Partner

                                         By:  ARCH Venture Partners, L.P., its
                                              General Partner

                                              By:  ARCH Venture Corporation, its
                                                   General Manager

                                                   By:_____________________
                                                      Keith Crandell
                                                      Managing Director

                                      -18-
<PAGE>

                              WILLIAM BLAIR CAPITAL PARTNERS V., L.P.

                              By:  William Blair Capital Partners, LLC, its
                                    General Partner

                                    By:
                                        ---------------------------------

                                    Name:
                                          ------------------------------

                              ALLSTATE INSURANCE COMPANY

                              By:
                                  --------------------------------------

                              By:
                                  --------------------------------------
                                         its Authorized Signatories

                              ARCH VENTURE FUND III, L.P.

                              By:  ARCH Venture Partners, LLC, its General
                                   Partner

                              By:
                                  --------------------------------------
                                    Keith Crandell
                                    Managing Director

                              NEW INVESTOR:

                              OHIO PARTNERS, LTD.

                              By:
                                  --------------------------------------

                              Title:
                                     -------------------------------------

                                      -19-
<PAGE>

                                AMENDMENT NO. 3
                                       TO
                         REGISTRATION RIGHTS AGREEMENT

     AMENDMENT NO. 3, dated as of February __, 2000, by and among Apropos
Technology, Inc. (f/k/a Teledata Solutions, Inc.), an Illinois corporation (the
"Company"), certain holders of the Company's outstanding securities
(collectively, the "Existing Investors") and Catherine R. Brady ("Brady"
together with the Existing Investors, the "Purchasers").

     WHEREAS, the Company and the Existing Investors are parties to that certain
Registration Rights Agreement by and among the Company and the parties named
therein and dated as of March 19, 1996, as amended by Amendment No. 1 to the
Registration Rights Agreement dated December 20, 1996 and Amendment No. 2 to the
Registration Rights Agreement dated March 11, 1998 (as amended, the
"Registration Rights Agreement"); and

     WHEREAS, pursuant to a letter agreement between Catherine R. Brady
("Brady") and the Company dated February __, 2000, the Company agreed to use its
reasonable best efforts to have Brady become a Purchaser under the Registration
Rights Agreement on the terms and subject to the conditions contained herein;
and

     WHEREAS, the parties hereto desire to amend the Registration Rights
Agreement as set forth below;

     NOW, THEREFORE, in consideration of the foregoing and the promises and
covenants contained herein, the parties hereby agree as follows:

     1.  That Section 1 of the Registration Rights Agreement be and hereby is
amended to insert the definition of "Brady Shares" and restate the definition of
"Restricted Stock" to read in its entirety as follows:

          "Brady Shares" shall mean all of the 1,173,510 shares (after giving
     effect to the Company's 7 for 4 stock split to take effect immediately
     prior to the consummation of the Company's initial public offering) of
     Common Stock of the Company owned by Brady."

          "Restricted Stock" shall mean (A) the Conversion Shares and (B) with
     respect to all Sections of the Registration Rights Agreement except
     Sections 4, 6 and 8, the Brady Shares, but excluding any Conversion Shares
     or Brady Shares that have been either (i) registered under the Securities
     Act pursuant to an effective registration statement filed thereunder and
     disposed of in accordance with the registration statement covering them, or
     (ii) publicly sold pursuant to Rule 144 under the Securities Act."

     2.  That Section 5 of the Registration Rights Agreement be and hereby is
amended by adding the following phrase to the end of second sentence of the
Section 5:

                                      -20-
<PAGE>

          provided, however, that, notwithstanding anything in this Agreement to
          the contrary, with respect to the Brady Shares, the registration
          rights provided in this Section 5 shall not become effective with
          respect to any Restricted Stock held by Brady until each Existing
          Investor has sold (or been provided by the Company with an opportunity
          pursuant to Sections 4, 5 or 6 of this Agreement to sell) Common
          Shares pursuant to Sections 4, 5 or 6 of this Agreement for aggregate
          net proceeds representing a Pro-Rata Portion of such Existing
          Investor's Common Shares equivalent to Brady's Portion (with the
          Average Price measured at a computation date of the filing date of
          each registration statement).

     3.  Brady hereby acknowledges that she has no right to (i) any registration
rights pursuant to Section 4 or 6 of the Registration Rights Agreement and (ii)
have any of her expenses reimbursed by the Company pursuant to Section 8 or any
other provision of the Registration Rights Agreement.

     4.  For purposes of this Amendment, the following capitalized terms shall
have the meaning set forth below:

          "Average Price" shall mean the average of the closing prices for the
Common Shares over the 20 trading days preceding the fifth trading day prior to
the date of computation.

          "Brady's Portion" shall mean that portion of Brady Shares represented
by a fraction, the numerator of which is the amount of gross proceeds, less
underwriting discount received by Brady in the Company's initial public offering
("IPO"), and the denominator of which is the total number of shares owned by
Brady at the time of the IPO, multiplied by the offering price to the public.

          "Pro-Rata Portion" shall mean a fraction, the numerator of which is
the aggregate gross proceeds less underwriting discounts received by the
Existing Investor in a sale or sales subsequent to the IPO, and the denominator
of which is the total number of shares owned by the Existing Investor at the
date of this Amendment multiplied by the Average Price in effect at the time the
computation is made.

     5.  Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in the Registration Rights Agreement.

     6.  In all other respects, the Registration Rights Agreement is hereby
ratified, confirmed and approved, and all other terms thereof shall remain in
full force and effect.

     7.  This Amendment No. 3 may be executed in counterparts, each of which
shall constitute an original, but all of which, when taken together, shall
constitute but one agreement.

                            [Signature Pages Follow]

                                      -21-
<PAGE>

     IN WITNESS WHEREOF, the Company, the Existing Investors and Catherine R.
Brady have executed this Amendment No. 3 as of the day and year first written
above.

                                 COMPANY:

                                 APROPOS TECHNOLOGY, INC.

                                 By:
                                     ------------------------
                                 Name:  Kevin G. Kerns
                                 Title:  President

                                 ----------------------------
                                 Catherine R. Brady

                                 EXISTING INVESTORS:

                                 ARCH VENTURE FUND II, L.P.

                                 By:  ARCH Management Partners II, L.P, its
                                      General Partner

                                   By: ARCH Venture Partners, L.P, its General
                                       Partner

                                       By:   ARCH Venture Corporation, its
                                             general partner

                                       By:
                                           -----------------------
                                       Name:
                                            ----------------------
                                       Title:
                                             ---------------------

                                     -22-
<PAGE>

                                 ARCH II PARALLEL FUND, L.P.

                                 By: ARCH Management Partners II, L.P, its
                                     General Partner

                                   By: ARCH Venture Partners, L.P, its General
                                       Partner

                                       By: ARCH Venture Corporation, its
                                           general partner

                                       By:
                                          -----------------------------
                                       Name:
                                            ---------------------------
                                       Title:
                                             --------------------------

                                 WILLIAM BLAIR CAPITAL PARTNERS V, L.P.

                                 By:  William Blair Capital Partners, LLC, its
                                      general partner

                                     By:
                                         ------------------------------
                                     Name:
                                           ----------------------------
                                     Title:
                                           ----------------------------

                                 ALLSTATE INSURANCE COMPANY

                                 By:
                                    -----------------------------------

                                 By:
                                    -----------------------------------
                                        Its authorized signatories

                                 ARCH VENTURE FUND III, L.P.

                                 By:   ARCH Venture Partners, LLC

                                     By:
                                         ------------------------------
                                     Name:
                                           ----------------------------
                                     Title:
                                            ---------------------------

                                 OHIO PARTNERS, LTD.

                                 By:
                                     ----------------------------------
                                 Name:
                                      ---------------------------------
                                 Title:
                                       --------------------------------

                                     -23-<PAGE>

                                                                    Exhibit 10.1

                   AMENDED AND RESTATED EMPLOYMENT AGREEMENT
                   -----------------------------------------

         THIS AGREEMENT, made and entered into as of October 1, 1999 (the
"Effective Date"), amends and restates the agreement entered into as of October
1, 1998 by and between Guy Hengesbaugh (the "Executive") and LaSalle Re Limited
(the "Company");

                               WITNESSETH THAT:
                               ---------------

         WHEREAS, the parties desire to enter into this Agreement pertaining to
the employment of the Executive by the Company;

         NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, it is hereby covenanted and agreed by the Executive and the
Company as follows:

         1. Performance of Services. The Executive's employment with the Company
            ------------------------
shall be subject to the following:

(a)      Subject to the provisions of this Agreement, the Company hereby agrees
         to employ the Executive as the President and Chief Executive Officer of
         the Company and the President and Chief Operating Officer of LaSalle Re
         Holdings Limited (the "Holding Company") during the Agreement Term (as
         defined below), and the Executive hereby agrees to remain in the employ
         of the Company during the Agreement Term.

(b)      During the Agreement Term, while the Executive is employed by the
         Company, the Executive shall devote, subject to paragraph 1(f), his
         full time, energies and talents to performing his duties under this
         Agreement.

(c)      The Executive agrees that he shall perform his duties faithfully and
         efficiently subject to the directions of the Board of Directors of the
         Company (the "Board"). The Executive's duties may include providing
         services for the Company, the Holding Company, and the Subsidiaries (as
         defined below), as determined by the Board; provided that the Executive
         shall not, without his consent, be assigned tasks that would be
         inconsistent with his position at the Company. The Executive will have
         such authority and power as are inherent to the undertakings applicable
         to his position and necessary to carry out his responsibilities and the
         duties required of him hereunder.

(d)      While the Executive is employed by the Company, he shall be subject to
         the duties that reasonably apply to the Company's officers and
         employees (including, without limitation, the duty of loyalty to the
         Company).

(e)      The Company may change the Executive's title and duties in the event of
         reorganization, restructuring, or similar circumstances, except that
         the Executive shall have a senior

                                       1
<PAGE>

         executive position at all times during the Agreement Term while he is
         employed by the Company.

(f)      Notwithstanding the foregoing provisions of this paragraph 1, during
         the Agreement Term, the Executive may devote reasonable time to
         activities other than those required under this Agreement, including
         the supervision of his personal investments, and activities involving
         professional, charitable, educational, religious and similar types of
         organizations, speaking engagements, membership of the boards of
         directors of other organizations, and similar type of activities, to
         the extent that such other activities do not inhibit or prohibit the
         performance of the Executive's duties under this Agreement, or conflict
         in any material way with the business of the Company, the Holding
         Company, or any Subsidiary; provided, however, that except as otherwise
         expressly provided in this Agreement, the Executive shall not serve on
         the board of any business, or hold any position with any business
         without the consent of the Board of the Company.

(g)      The Executive will be required to maintain a residence in Bermuda while
         employed by the Company.

(h)      The Company will use its reasonable best efforts to maintain a Bermuda
         work permit for the Executive. The Executive shall cooperate with the
         Company and the appropriate authorities in maintaining such permit. The
         Executive's employment by the Company is conditioned upon the Company's
         ability to keep current all required work permits, and except as
         provided in this paragraph 1(h), the Company shall have no further
         obligation to the Executive if, after employing its reasonable best
         efforts, it is unable to maintain such permits. If despite the
         Company's best efforts to maintain the Bermuda work permit, the work
         permit is terminated or revoked by the Government of Bermuda through no
         fault of the Executive, then the Executive shall be deemed to have
         received written notice from the Company that his Date of Termination
         is the date on which the termination or revocation of his or her work
         permit is effective, and the Executive shall be entitled to the
         benefits provided for Termination by the Company under Section 3(g). In
         addition, the Company shall reimburse the Executive for reasonable
         costs actually incurred by the Executive and the members of his or her
         immediate family to relocate to the nation in which the Executive
         maintains citizenship; provided, however, that such reimbursement shall
         be made only if such relocation occurs within a reasonable time
         following such Date of Termination. The reasonableness of the cost and
         time of relocation shall be determined by the Board of Directors of the
         Company.

(i)      Subject to the provisions of this Agreement, the Executive shall not be
         required to perform services under this Agreement during any period
         that he is Disabled. The Executive shall be considered "Disabled"
         during any period in which he has a physical or mental disability which
         renders him incapable, after reasonable accommodation, of performing
         his duties under this Agreement. In the event of a dispute as to
         whether the Executive is Disabled, the Company may refer the same to a
         licensed practicing

                                       2
<PAGE>

         physician of the Company's choice, and the Executive agrees to submit
         to such tests and examination as such physician shall deem appropriate.

(j)      The "Agreement Term" shall be the period beginning on the Effective
         Date and ending on the second anniversary of the Effective Date;
         provided, however, that beginning on the Effective Date, such Agreement
         Term shall automatically be renewed daily, such that at any time on or
         after the Effective Date, the remaining term shall equal two years.
         However, such additional day-to-day renewals may be terminated by
         either party be delivering written notice of such termination to the
         other party, in accordance with the requirements of paragraph 18. The
         cessation of the automatic renewals shall be effective on the date such
         written notice is deemed to be given to the other party in accordance
         with paragraph 18, such that the Agreement term shall end on the
         two-year anniversary of the date such written notice is deemed given to
         the other party. For purposes of this Agreement, a Notice of
         Termination, as described in paragraph 3(i), shall be deemed to be a
         notice to terminate day-to-day renewals.

(k)      For purposes of this Agreement, the term "Subsidiary" shall mean any
         company (regardless of whether incorporated) during any period in which
         50% or more of the total combined voting power of all classes of stock
         (or other ownership interest) entitled to vote is owned, directly or
         indirectly, by the Company.

         2. Compensation. Subject to the provisions of this Agreement, during
            ------------
the Agreement Term, while he is employed by the Company, the Company shall
compensate the Executive for the Executive's services as follows:

(a)      Salary. The Executive shall receive, for each 12-consecutive month
         ------
         period beginning on the Effective Date and each anniversary thereof, in
         substantially equal monthly or more frequent installments, an annual
         base salary of $450,000 (the "Salary"); provided that an additional
         amount of $12,500 shall be paid to the Executive in a lump sum as soon
         as practicable following the Effective Date, so that the annual base
         salary of the Executive will have effectively been $450,000 retroactive
         to July 1, 1999. In no event shall the Salary of the Executive be
         reduced to an amount that is less than the amount specified in this
         paragraph (a), or to an amount that is less than the amount that he was
         previously receiving, except to the extent that reductions of the same
         percentage are being made at the same time to the salaries of all other
         Company officers in the corporate office at or above the vice-president
         level, and such Salary shall be restored to its prior level when, and
         to the same extent, as the restoration that applies to the other
         officers.

(b)      Bonus. The Executive shall be entitled to receive bonuses from the
         -----
         Company in accordance with the provisions of Exhibit A, which is
         attached to and forms a part of this Agreement.

(c)      Disability. The Executive shall receive from the Company disability
         ----------
         income replacement coverage which will provide for replacement of
         income at a commercially reasonable rate

                                       3
<PAGE>

         during any period in which the Executive is Disabled if the disability
         arose during the Agreement Term and prior to the Executive's Date of
         Termination. During any period while the Executive is Disabled, and is
         otherwise entitled to receive Salary under this Agreement, any Salary
         payments to the Executive shall be reduced by the amount of any
         benefits paid for the same period of time under the Company's
         disability income replacement coverage.

(d)      Pension. The Company will provide the Executive with a defined
         -------
         contribution savings plan, into which the Company will make a
         contribution for each fiscal year equal to 10% of the Salary paid to
         the Executive for such fiscal year. The plan will also provide that the
         Executive may make annual contributions equal to or less than the
         Company's contribution.

(e)      Automobile. The Company will provide the Executive with an allowance
         ----------
         toward the cost of an automobile in Bermuda, the amount of which will
         be approved by the Compensation Committee. The Company will assume
         responsibility for the cost of insurance, maintenance and similar
         items. The Executive's personal use of the automobile will be
         permitted. This perquisite shall be governed by the rules and
         limitations set down from time to time by the Company.

(f)      Club. The Company will reimburse the Executive for periodic dues for
         ----
         his membership in clubs located in Bermuda in an amount not to exceed
         $2,400 per fiscal year. The Company will not reimburse initiation fees
         for club membership under this Agreement, in light of reimbursements
         made by the Company to the Executive's prior employer with respect to
         initiation fees for club membership for the period during which the
         Executive performed services for the Company but was employed by the
         prior employer.

(g)      Housing/Living Allowance. The Company shall provide the Executive with
         ------------------------
         a housing and living expense allowance at the annual rate of $120,000
         for the Agreement Term, with such allowance to be payable to the
         Executive in monthly instalments.

(h)      Tax, Accounting and Financial Planning. The Company will reimburse the
         --------------------------------------
         Executive for reasonable expenses, not to exceed $5,000 per fiscal
         year, for tax, accounting, and financial planning services.

(i)      Other Benefits. Except as otherwise specifically provided to the
         --------------
         contrary in this Agreement, the Executive shall be provided with the
         welfare benefits and other fringe benefits to the same extent and on
         the same terms as those benefits are provided by the Company from time
         to time to the Company's other senior management employees. However,
         the Company shall not be required to provide a benefit or perquisite
         under this paragraph 2(i) if such benefit or perquisite would duplicate
         (or otherwise be the same type as) a benefit or perquisite specifically
         required to be provided under another provision of this Agreement.

                                       4
<PAGE>

(j)      Expenses. The Company will reimburse the Executive for reasonable
         --------
         expenses for entertainment, traveling, meals, lodging and similar items
         in promoting the Company's business which the Executive documents on a
         form used by the Company to report business expenses.

(k)      Indemnification. The Company shall maintain officers liability
         ---------------
         insurance in commercially reasonable amounts (as reasonably determined
         by the Board), and the Executive shall be covered under such insurance
         to the same extent as other senior management employees of the Company.
         The Executive shall be eligible for indemnification by the Company
         under the Company's bye-laws as currently in effect. The Company agrees
         that it shall not take any action that would impair the Executive's
         rights to indemnification under the Company's bye-laws, as currently in
         effect.

(l)      Holiday/Vacation. The Executive shall be subject to the holiday and
         ----------------
         vacation policy that applies to other senior executives of the Company.

(m)      Dollar Amounts. As used in this Agreement, "dollars" or numbers
         --------------
         preceded by the symbol "$" shall mean amounts in United States Dollars.

         3. Termination. The Executive's employment during the Agreement Term
            -----------
may be terminated by the Company or the Executive without any breach of this
Agreement only under the circumstances described in paragraphs 3(a) through
3(g):

(a)      Death.  The Executive's employment will terminate upon his death.
         -----

(b)      Permanently Disabled. The Company may terminate the Executive's
         --------------------
         employment if he is Permanently Disabled. "Permanently Disabled" means
         that the Executive is eligible for benefits under the Company's
         long-term disability plan.

(c)      Cause. The Company may terminate the Executive's employment at any time
         -----
         for Cause. "Cause" shall mean:

         (i)      the wilful and continued failure by the Executive to
                  substantially perform his duties with the Company (other than
                  any such failure resulting from the Executive's being
                  Disabled), within a reasonable period of time after a written
                  demand for substantial performance is delivered to the
                  Executive by the Board, which demand specifically identifies
                  the manner in which the Board believes that the Executive has
                  not substantially performed his duties;

         (ii)     the wilful engaging by the Executive in conduct which is
                  demonstrably and materially injurious to the Company or the
                  Holding Company, monetarily or otherwise; or

                                       5
<PAGE>

         (iii)    the engaging by the Executive in egregious misconduct
                  involving serious moral turpitude to the extent that, in the
                  reasonable judgment of the Compensation Committee, the
                  Executive's credibility and reputation no longer conform to
                  the standard of the Company's executives.

         For purposes of this Agreement, no act, or failure to act, on the
         Executive's part shall be deemed "wilful" unless done, or omitted to be
         done, by the Executive not in good faith and without reasonable belief
         that the Executive's action or omission was in the best interest of the
         Company or the Holding Company.

(d)      Constructive Discharge. If the Executive (i) provides written notice to
         ----------------------
         the Company of the occurrence of a material breach of this Agreement by
         the Company, which specifically identifies the manner in which the
         Executive believes that the breach has occurred; (ii) the Company fails
         to correct such breach within a reasonable time after such notice; and
         (iii) the Executive resigns within the 60-day period following the
         occurrence of such breach, then the Executive shall be considered to
         have been constructively discharged.

(e)      Resignation by Executive. The Executive may resign for any reason by
         ------------------------
         giving the Company ninety (90) days prior written notice, except the
         Executive will be treated as having resigned under this paragraph 3(e)
         only if he has not been constructively discharged under paragraph 3(d).

(f)      Mutual Agreement. This Agreement may be terminated at any time by the
         ----------------
         mutual agreement of the parties. Any termination of the Executive's
         employment by mutual agreement of the parties will be memorialized by
         an agreement which is reduced in writing and signed by the Executive
         and the Chairman of the Compensation Committee.

(g)      Termination by Company. The Company may terminate the Executive's
         ----------------------
         employment at any time for any reason by giving the Executive prior
         written notice, except the Executive's employment will not be treated
         as having been terminated under this paragraph 3(g) if the termination
         is for reasons of being Permanently Disabled or for Cause.

(h)      Date of Termination. "Date of Termination" means the last day the
         -------------------
         Executive is employed by the Company, provided that the Executive's
         employment is terminated in accordance with the foregoing provisions of
         this paragraph 3.

(i)      Notice of Termination. Any termination of the Executive's employment by
         ---------------------
         the Company or the Executive (other than a termination pursuant to
         paragraph 3(a) or paragraph 3(f)) must be communicated by a written
         Notice of Termination to the other party hereto. For purposes of this
         Agreement, a "Notice of Termination" means a dated notice which
         indicates the specific termination provision in this Agreement relied
         on and which sets forth in reasonable detail the facts and
         circumstances, if any, claimed to

                                       6
<PAGE>

         provide a basis for termination of the Executive's employment under the
         provision so indicated.

         4. Rights Upon Termination. This paragraph 4 describes the payments and
            -----------------------
benefits to be provided to the Executive after his Date of Termination:

(a)      Payment of Previously Earned Amounts. The Executive shall receive
         ------------------------------------
         payment of accrued but unpaid Salary, vacation pay and, if expressly
         provided for in paragraph 4(d), a pro rata portion of his bonus (if
         any), in each case for the period ending with the Executive's Date of
         Termination.

(b)      No Severance Payments. If the Executive's Date of Termination occurs
         ---------------------
         during or after the end of the Agreement Term, or because of (i) the
         Executive's death, (ii) his being Permanently Disabled (paragraph
         3(b)), (iii) his termination for Cause (paragraph 3(c)), or (iv) his
         resignation (paragraph 3(e)), then, except as otherwise expressly
         provided for in this Agreement, no payments shall be due to the
         Executive under this Agreement for periods after the Date of
         Termination.

(c)      Salary Continuation. If the Executive's Date of Termination occurs
         -------------------
         during the Agreement Term because of (i) his discharge by the Company
         for reasons other than Cause (described in paragraph 3(c)), or (ii) his
         constructive discharge (described in paragraph 3(d)), the Executive
         shall continue to receive Salary payments (at the rate in effect on the
         Date of Termination) in monthly or more frequent instalments through
         the earliest of: (i) the last day of the Agreement Term; (ii) the date
         of the Executive's death, or (iii) the date, if any, of the breach by
         the Executive of the non-competition requirements of paragraph 7, the
         confidentiality requirements of paragraph 8 or the non- disparagement
         requirements of paragraph 9.

(d)      Pro rata Bonus. Except as otherwise provided in this paragraph 4(d),
         --------------
         the Executive shall not receive a bonus for the fiscal year in which
         the Executive's Date of Termination occurs. If the Executive's Date of
         Termination occurs during the Agreement Term as a result of (i) the
         Executive's death (ii) his being Permanently Disabled (paragraph 3(b)),
         (iii) his discharge by the Company for reasons other than Cause
         (described in paragraph 3(c)), or (iv) his constructive discharge
         (described in paragraph 3(d)), the Executive shall receive a pro rata
         portion of the bonus which would have been paid pursuant to Exhibit A
         for the fiscal year in which the Executive's Date of Termination
         occurs. Such portion, if any, shall be calculated for the period ending
         on the Date of Termination and shall be paid to the Executive (or his
         estate) within a reasonable period of time after the Company calculates
         the bonus amount, if any, for all employees for the fiscal year.

(e)      Housing/Living Expenses, Medical Benefits. If the Executive is entitled
         -----------------------------------------
         to Salary Continuation payments pursuant to paragraph 4(c), the
         Executive shall receive a housing and living expense allowance
         (described in paragraph 2(g)) and may continue to participate in the
         medical and dental plans in which he participated on the day before his

                                       7
<PAGE>

         Date of Termination through the earlier of: (i) the last day for which
         the Executive receives Salary Continuation payments pursuant to
         paragraph 4(c); or (ii) three (3) months after the Executive's Date of
         Termination. Participation in the medical and dental plans is subject
         to the Executive's payment of the applicable employee portion of the
         monthly premium cost, if any. If the Company ceases offering the
         medical and dental plans in which the Executive participated on the day
         before his Date of Termination to Company employees during this time,
         the Executive may elect to participate in any other medical or dental
         plan offered by the Company to its employees, provided however, that
         the Executive shall be responsible for paying the applicable employee
         portion of the monthly premium cost.

(f)      Other Programs. No benefits shall be payable to the Executive under any
         --------------
         other severance pay arrangement or similar arrangement maintained by
         the Company or any Subsidiary. Except as otherwise expressly provided
         in this Agreement, no other payments or benefits shall be due to the
         Executive following the Date of Termination (except as otherwise
         specifically provided under the terms of an employee benefit plan or
         arrangement).

         5. Duties on Termination. Subject to the provisions of this Agreement,
            ---------------------
during the period beginning on the date of delivery of a Notice of Termination,
and ending on the Date of Termination, the Executive shall continue to perform
his duties as set forth in this Agreement, and shall also perform such services
for the Company and the Holding Company as are necessary and appropriate for a
smooth transition to the Executive's successor, if any. Notwithstanding the
foregoing provisions of this paragraph 5, the Company may suspend the Executive
from performing his duties under this Agreement following the delivery of a
Notice of Termination providing for the Executive's resignation, or delivery by
the Company of a Notice of Termination providing for the Executive's termination
of employment for any reason; provided, however, that during the period of
suspension (which shall end on the Date of Termination), the Executive shall
continue to be treated as employed by the Company for other purposes, and his
rights to compensation or benefits shall not be reduced by reason of the
suspension.

         6. Non-competition. While the Executive is employed by the Company, and
            ---------------
during the Non-Competition Period (as defined below)

         (A)      the Executive agrees that he will not directly or indirectly:

                  (i) perform services in a senior management-related position
                  for a direct competitor of the Company (or any successor
                  corporation into which the Company and Holding Company may be
                  merged or consolidated); for purposes of this paragraph 6, a
                  related position shall include, but not be limited to, a chief
                  executive officer or president;

                                       8
<PAGE>

                  (ii) except in connection with any duties as on officer or
                  employee of the Company or Holding Company (or any successor
                  corporation into which they may be merged or consolidated),
                  solicit, divert or attempt to solicit or divert any party who
                  is, was, or was solicited to become, a customer or of the
                  Company at any time during the Agreement Term, provided that
                  this restriction shall not apply to any activity on behalf of
                  a business that does not actually or potentially compete with
                  the activities of the Company (or any successor corporation
                  into which the Company and Holding Company may be merged or
                  consolidated);

                  (iii) employ, solicit for employment or encourage to leave
                  their employment, in each case, either as an employee, agent
                  or representative, any person who was during the two-year
                  period prior to such employment, solicitation or encouragement
                  or is an officer, employee, agent or representative of the
                  Company (or any successor corporation into which the Company
                  and Holding Company may be merged or consolidated);

         (B)      If at any time any of the provisions of this paragraph 6 shall
                  be determined to be invalid or unenforceable by reason of
                  being vague or unreasonable as to duration, area, scope of
                  activity or otherwise, then this paragraph 6 shall be
                  considered divisible (with the other provisions to remain in
                  full force and effect) and the invalid or unenforceable
                  provisions shall become and be deemed to be immediately
                  amended to include only such time, area, scope of activity and
                  other restrictions, as shall be determined to be reasonable
                  and enforceable by the court or other body having jurisdiction
                  over the matter, and Executive expressly agrees that this
                  Agreement, as so amended, shall be valid and binding as though
                  any invalid or unenforceable provision had not been included
                  herein.

         (C)      For purposes of this paragraph 6, "Non-Competition Period"
                  shall be determined as follows:

                  (i)      If the Executive's Date of Termination occurs under
                           circumstances described in paragraph 3(e) (relating
                           to the Executive's resignation), the Non-Competition
                           Period shall be the period beginning on the Date of
                           Termination, and ending on the twelve-month (12)
                           anniversary of the Date of Termination.

                  (ii)     If the Executive's Date of Termination occurs under
                           circumstances other than those described in paragraph
                           3(e) (relating to the Executive's resignation), the
                           Non-Competition Period shall be the period beginning
                           on the Date of Termination and ending on the last day
                           of the Agreement Term; provided, however, that if the
                           Executive is entitled to salary continuation payments
                           in accordance with

                                       9
<PAGE>

                           paragraph 4(c), and if such salary continuation
                           payments are discontinued prior to the last day of
                           the Agreement Term, then the Non-Competition Period
                           will end on the date that the last salary
                           continuation payment is made to the Executive (unless
                           such discontinuance is as a result of the Executive's
                           breach of this paragraph 6, paragraph 7, or paragraph
                           8).

Nothing in this paragraph 6, paragraph 7 or paragraph 8 shall be construed as
limiting the Executive's duty of loyalty to the Company while he is employed by
the Company or any other duty he may otherwise have to the Company while he is
employed by the Company.

         7. Confidential Information. Except as may be required by the lawful
            ------------------------
order of a court or agency of competent jurisdiction, or except to the extent
that the Executive has express authorization from the Company, the Executive
agrees to keep secret and confidential indefinitely all non-public information
(including, without limitation, information regarding litigation and pending
litigation) concerning the Company, the Holding Company, and the Subsidiaries
which was acquired by or disclosed to the Executive during the course of his
employment with the Company, or during the course of his consultation with the
Company following his termination of employment (regardless of whether
consultation is pursuant to paragraph 9), and not to disclose the same, either
directly or indirectly, to any other person, firm, or business entity, or to use
it in any way. To the extent that the Executive obtains information on behalf of
the Company, the Holding Company, or any of the Subsidiaries that may be subject
to attorney-client privilege as to the Company's attorneys, the Executive shall
take reasonable steps to maintain the confidentiality of such information and to
preserve such privilege. Nothing in the foregoing provisions of this paragraph 7
shall be construed so as to prevent the Executive from using, in connection with
his employment for himself or an employer other than the Company, the Holding
Company, or any of the Subsidiaries, knowledge which was acquired by him during
the course of his employment with the Company, the Holding Company, and the
Subsidiaries, and which is generally known to persons of his experience in other
companies in the same industry.

         8. Non-Disparagement. The Executive agrees that, while he is employed
            -----------------
by the Company, and after his Date of Termination, he shall not make any false,
defamatory or disparaging statements about the Company, the Holding Company, the
Subsidiaries, or the officers or directors of the Company, the Holding Company,
or the Subsidiaries that are reasonably likely to cause material damage to the
Company, the Holding Company, the Subsidiaries, or their officers or directors.
While the Executive is employed by the Company, and after his Date of
Termination, the Company agrees, on behalf of itself, the Holding Company, and
the Subsidiaries, that neither the officers nor the directors of the Company,
the Holding Company, or the Subsidiaries shall make any false, defamatory or
disparaging statements about the Executive that are reasonably likely to cause
material damage to Executive.

         9. Defense of Claims. The Executive agrees that, for the period
            -----------------
beginning the Effective Date, and continuing for a reasonable period after the
Executive's termination of employment

                                       10
<PAGE>

with the Company, the Executive will cooperate with the Company, the Holding
Company and the Subsidiaries in defense of any claims that may be made against
the Company, the Holding Company and the Subsidiaries, and will cooperate with
the Company, the Holding Company or the Subsidiaries in the prosecution of any
claims that may be made by the Company, the Holding Company or the Subsidiaries,
to the extent that such claims may relate to services performed by the Executive
for the Company. The Executive agrees to promptly inform the Company if he
becomes aware of any lawsuits involving such claims that may be filed against
the Company, the Holding Company or the Subsidiaries. The Company agrees to
reimburse the Executive for all of the Executive's reasonable out-of-pocket
expenses associated with such cooperation, including travel expenses. For
periods after the Executive's employment with the Company terminates, the
Company agrees to provide reasonable compensation to the Executive for such
cooperation. The determination of the reasonableness of such compensation shall
take into account information provided to the Company by the Executive or
otherwise known to the Company, which may include, without limitation, (a) the
Executive's rate of compensation at the time he ceased employment with the
Company, and whether he is then receiving other compensation payments from the
Company; (b) the Executive's rate of compensation at the time of such
cooperation; (c) the amount of time required of the Executive for such
cooperation; (d) difficulty of the issues as to which the cooperation is
required; (e) the amount of inconvenience to the Executive resulting from such
cooperation (including consideration of factors such as the amount of travel
required of the Executive, the effect on other commitments of the Executive, and
the amount of advance notice provided to the Executive); and (f) whether such
cooperation would be legally required in the absence of the requirements of this
paragraph 9. The Executive also agrees to promptly inform the Company if he is
asked to assist in any investigation of the Company, the Holding Company or the
Subsidiaries (or their actions) that may relate to services performed by the
Executive for the Company, regardless of whether a lawsuit has then been filed
against the Company, the Holding Company or the Subsidiaries with respect to
such investigation.

         10. Excise Tax Gross-Up. If the Executive becomes entitled to payment
             -------------------
in accordance with paragraph 4, then with respect to such payment under
paragraph 4 (and with respect to any other payment made to the Executive,
including without limitation, the vesting of an option or other cash or non-cash
benefit or property, whether pursuant to the terms of this Agreement or any
other plan, arrangement, or agreement with the Company) (the "Total Payments"),
if such Total Payments are or become subject to the tax imposed by Section 4999
of the United States Internal Revenue Code of 1986, as amended (the "Code") (or
any similar tax that may hereafter be imposed) (the "Excise Tax"), the Company
shall pay to Employee as soon as practicable after such Excise Tax becomes due,
an additional amount (the "Gross-up Payment") (which shall include, without
limitation, reimbursement for any penalties and interest that may accrue in
respect of such Excise Tax) such that the net amount retained by Executive,
after reduction for any Excise Tax (including any penalties or interest thereon)
on the Total Payments and after any reduction for any federal, state and local
income or employment tax and Excise Tax on the Gross-up Payment provided for by
this paragraph 10, but before reduction for any federal, state, or local income
or employment tax on the Total Payments, shall be equal to the sum of (a) and
(b), where (a) is the Total Payments, and (b) is an amount equal to the product
of any deductions disallowed for federal, state, or local income tax purposes
because of the inclusion of the Gross-

                                       11
<PAGE>

up Payment in Employee's adjusted gross income multiplied by the highest
applicable marginal rate of federal, state, or local income taxation,
respectively, for the calendar year in which the Gross-up Payment is to be made.

         11. Remedies. The Executive acknowledges that the Company or the
             --------
Holding Company would be irreparably injured by a violation of paragraph 6,
paragraph 7, or paragraph 8, and he agrees that the Company, in addition to any
other remedies available to it for such breach or threatened breach, shall be
entitled to a preliminary injunction, temporary restraining order, or other
equivalent relief, restraining the Executive from any actual or threatened
breach of either paragraph 6, paragraph 7 or paragraph 8. The Company
acknowledges that the Executive would be irreparably injured by a violation of
paragraph 8, and the Company agrees that the Executive, in addition to any other
remedies available to him for such breach or threatened breach, shall be
entitled to a preliminary injunction, temporary restraining order, or other
equivalent relief, restraining the Company from any actual or threatened breach
of paragraph 8. If a bond is required to be posted in order for the Company or
the Executive to secure an injunction or other equitable remedy, the parties
agree that said bond need not be more than a nominal sum.

         12. Nonalienation. The interests of the Executive under this Agreement
             -------------
are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors of the
Executive or the Executive's beneficiary.

         13. Amendment. This Agreement may be amended or canceled only by mutual
             ---------
agreement of the parties in writing without the consent of any other person. So
long as the Executive lives, no person, other than the parties hereto, shall
have any rights under or interest in this Agreement or the subject matter
hereof.

         14. Applicable Law. The provisions of this Agreement shall be construed
             --------------
in accordance with the laws of Bermuda, without regard to the conflict of law
provisions of any jurisdiction. All disputes shall be arbitrated or litigated
(whichever is applicable) in Bermuda.

         15. Severability. The invalidity or unenforceability of any provision
             ------------
of this Agreement will not affect the validity or enforceability of any other
provision of this Agreement, and this Agreement will be construed as if such
invalid or unenforceable provision were omitted (but only to the extent that
such provision cannot be appropriately reformed or modified).

         16. Waiver of Breach. No waiver by any party hereto of a breach of any
             ----------------
provision of this Agreement by any other party, or of compliance with any
condition or provision of this Agreement to be performed by such other party,
will operate or be construed as a waiver of any subsequent breach by such other
party or any similar or dissimilar provisions and conditions at the same or any
prior or subsequent time. The failure of any party hereto to take any action by
reason of such breach will not deprive such party of the right to take action at
any time while such breach continues.

                                       12
<PAGE>

         17 Successors. This Agreement shall be binding upon, and inure to the
            ----------
benefit of, the Company and its successors and assigns and upon any person
acquiring, whether by merger, consolidation, purchase of assets or otherwise,
all or substantially all of the Company's assets and business.

         18 Notices. Notices and all other communications provided for in this
            -------
Agreement shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid, or sent
by facsimile or prepaid overnight courier to the parties at the addresses set
forth below (or such other addresses as shall be specified by the parties by
like notice). Such notices, demands, claims and other communications shall be
deemed given:

(a)      in the case of delivery by overnight service with guaranteed next day
         delivery, the next day or the day designated for delivery;

(b)      in the case of certified, registered or similar mail delivery, five
         days after deposit in the local mail; or

(c)      in the case of facsimile, the date upon which the transmitting party
         received confirmation of receipt by facsimile, telephone or otherwise;

provided, however, that in no event shall any such communications be deemed to
be given later than the date they are actually received. Communications that are
to be delivered by the mail or by overnight service are to be delivered to the
addresses set forth below:

to the Company:

         LaSalle Re Limited
         25 Church Street
         Hamilton HMFX, Bermuda

or to the Executive:

         Guy Hengesbaugh
         25 Church Street
         Hamilton, HMFX, Bermuda

All notices to the Company shall be directed to the attention of the chief
executive officer of the Company, with a copy to the Secretary of the Company.
Each party, by written notice furnished to the other party, may modify the
applicable delivery address, except that notice of change of address shall be
effective only upon receipt.

         19. Arbitration of All Disputes. In the event of any dispute,
             ---------------------------
controversy or claim arising out of or in relation to this Agreement, or the
breach, termination or invalidity thereof, the parties hereto agree to proceed
to arbitration. The number of arbitrators shall be three (3), to be

                                       13
<PAGE>

appointed in the absence of the parties agreement by the Appointment Committee
of the Chartered Institute of Arbitrators Bermuda Branch. The procedure to be
followed shall be that as laid down in the Arbitration Act of 1986. The place of
arbitration shall be Bermuda and the language of the arbitration shall be
English. The decision and award of the arbitral tribunal is final and binding on
the parties. For the avoidance of doubt, the parties agree that judgment may be
entered and any award made by the Tribunal in any Federal Court in the United
States (or any other jurisdiction where a party to this agreement is located).

         20. Survival of Agreement. Except as otherwise expressly provided in
             ---------------------
this Agreement, the rights and obligations of the parties to this Agreement
shall survive the termination of the Executive's employment with the Company.

         21. Entire Agreement. Except as otherwise noted herein, this Agreement,
             ----------------
including any Exhibit(s) attached hereto, constitutes the entire agreement
between the parties concerning the subject matter hereof and supersedes all
prior and contemporaneous agreements, if any, between the parties relating to
the subject matter hereof. The enforceability of this Agreement shall not cease
or otherwise be adversely affected by the termination of the Executive's
employment with the Company.

         22. Acknowledgment by Executive. The Executive represents to the
             ---------------------------
Company that he is knowledgeable and sophisticated as to business matters,
including the subject matter of this Agreement, that he has read this Agreement
and that he understands its terms. The Executive acknowledges that, prior to
assenting to the terms of this Agreement, he has been given a reasonable time to
review it, to consult with counsel of his choice, and to negotiate at arm's-
length with the Company as to the contents. The Executive and the Company agree
that the language used in this Agreement is the language chosen by the parties
to express their mutual intent, and that no rule of strict construction is to be
applied against any party hereto. The Executive represents and warrants that he
is not, and will not become a party to any agreement, contract, arrangement or
understanding, whether of employment or otherwise, that would in any way
restrict or prohibit him from undertaking or performing his duties in accordance
with this Agreement.

         23. Titles and Headings. Titles and headings in this Agreement are for
             -------------------
ease of reference and convenience only, and shall not be construed to affect the
meaning of any provision of this Agreement.

                                       14
<PAGE>

         IN WITNESS THEREOF, the Executive has hereunto set his hand, and the
Company has caused these presents to be executed in its name and on its behalf,
and its corporate seal to be hereunto affixed, all as of the day and year first
above written.

                                         /s/ Guy Hengesbaugh
                                         -------------------------------------
                                         Guy Hengesbaugh

                                         LASALLE RE LIMITED

                                         By: /s/ Clement S. Dwyer, Jr.
                                             ---------------------------------
                                             Clement S. Dwyer, Jr.
                                             Chairman, Compensation Committee

                                       15
<PAGE>

                                   EXHIBIT A
                                   ---------

                               BONUS COMPUTATION
                               -----------------

         A-1. Purpose. This Exhibit A is attached to and forms a part of the
              -------
employment agreement (the "Agreement") between Guy Hengesbaugh (the "Executive")
and LaSalle Re Limited (the "Company"). The purpose of this Exhibit A is to set
forth the terms of the bonus program described in paragraph 2(b) of the
Agreement.

         A-2. Guidelines. The bonus shall be determined in accordance with the
              ----------
following guidelines:

 .        A discretionary bonus may be awarded annually by the Board of the
         Company after considering the recommendation of the Compensation
         Committee of the Company.

 .        A non-discretionary bonus shall be earned and paid annually based upon
         the Company's Return on Equity (defined below) achieved for each fiscal
         year of the Company, while the Executive is employed by the Company.

 .        The non-discretionary annual bonus calculation will be based on the
         Company's Return on Equity earned each year. If the Company's Return on
         Equity for any year exceeds 10%, the bonus will be paid according to
         the following formula:

         .        For each 1% improvement in Return on Equity above 10%, an
                  amount equal to 10.0 % of The Executive's Salary will be paid.

         .        For each 1% improvement in Return on Equity above 22.5%, an
                  amount equal to 15.0 % of The Executive's Salary will be paid.

         .        For Return on Equity results between whole percentages (but
                  above 10%), the percentage of Salary awarded will be increased
                  by interpolation.

         .        The "Return on Equity" for any fiscal year shall be equal to
                  the net income of the Company for the fiscal year, divided by
                  shareholders' equity at the beginning of the period (as
                  determined on the basis of U.S. generally accepted accounting
                  principles). For purposes of this calculation any unrealized
                  appreciation or depreciation of the Company's investments
                  shall be disregarded (both as to the numerator and the
                  denominator). Payments made to CNA Financial Corporation or
                  its affiliates under the Underwriting Support Services
                  Agreement will not reduce net income in determining the Return
                  on Equity.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00001-of-00352.parquet"}]]