Exhibit 1(a)
FUND AMERICAN COMPANIES, INC.
WHITE MOUNTAINS INSURANCE GROUP, LTD.
UNDERWRITING AGREEMENT
May 14, 2003
To the Representatives
named in Schedule I
hereto of the Under-
writers named in
Schedule II hereto
Ladies and Gentlemen:
Fund American Companies, Inc., a company organized under the laws of
the State of Delaware (the "Company"), proposes to sell to the underwriters
named in Schedule II hereto (the "UNDERWRITERS"), for whom you (the
"REPRESENTATIVES") are acting as representatives, the principal amount of the
securities identified in Schedule I hereto (the "SECURITIES"), to be issued
under an Indenture dated as of May 19, 2003 (the "ORIGINAL INDENTURE"), between
the Company, White Mountains Insurance Group, Ltd., a company existing under the
laws of Bermuda, as guarantor (the "PARENT"), and Bank One, National
Association, as trustee (the "TRUSTEE"), as supplemented by the First
Supplemental Indenture, dated as of May 19, 2003 (the "SUPPLEMENTAL INDENTURE"
and, together with the Original Indenture, as so supplemented, the "INDENTURE").
The Securities will be guaranteed on an unsecured senior basis by guarantees
("GUARANTEES") of the Parent. If the firm or firms listed in Schedule II hereto
include only the firm or firms listed in Schedule I hereto, then the terms
"Underwriters" and "Representatives", as used herein, shall each be deemed to
refer to such firm or firms. To the extent there are no additional Underwriters
listed on Schedule II other than you, the term Representatives as used herein
shall mean you, as Underwriters, and the terms Representatives and Underwriters
shall mean either the singular or plural as the context requires. Any reference
herein to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be; and
any reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to and include
the filing of any document under the Exchange Act after the Effective Date of
the Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final
Prospectus or the Final Prospectus, as the case may be, deemed
to be incorporated therein by reference.
1. REPRESENTATIONS AND WARRANTIES. The Company and the Parent, jointly and
severally, represent and warrant to, and agree with, each Underwriter as set
forth below in this Section 1. Certain terms used in this Section 1 are defined
in Section 16 hereof.
(a) The Parent and the Company meet the requirements for the use of
Form S-3 under the Act and have filed with the Commission a registration
statement (the file number of which is set forth in Schedule I hereto) on
such Form, including a basic prospectus, for registration under the Act of
the offering and sale of the Securities, and such registration statement
has become effective under the Act. The Parent may have filed one or more
amendments thereto, including a Preliminary Final Prospectus, each of which
has previously been furnished to you. The Parent will next file with the
Commission the Final Prospectus relating to the Securities in accordance
with Rules 430A and 424(b)(1) or (4). The Parent has included in such
registration statement, as amended at the Effective Date, all information
(other than Rule 430A Information) required by the Act and the rules
thereunder to be included in such registration statement and the Final
Prospectus. As filed, such final prospectus supplement shall contain all
Rule 430A Information, together with all other such required information,
and, except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished to
you prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional information and
other changes (beyond that contained in the Basic Prospectus and any
Preliminary Final Prospectus) as the Company or the Parent has advised you,
prior to the Execution Time, will be included or made therein. The
Commission has not issued any order preventing or suspending the use of the
Basic Prospectus, any Preliminary Final Prospectus or the Registration
Statement.
(b) On the Effective Date, the Registration Statement did, and when the
Final Prospectus is first filed (if required) in accordance with Rule
424(b) and on the Closing Date, the Final Prospectus (and any amendment or
supplement thereto) will, comply in all material respects with the
applicable requirements of the Act, the Exchange Act and the Trust
Indenture Act and the respective rules thereunder; on the Effective Date
and at the Execution Time, the Registration Statement did not contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading; on the Effective Date and on the
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Closing Date the Indenture did or will comply in all material respects with
the requirements of the Trust Indenture Act and the rules thereunder; and,
on the Effective Date, the Final Prospectus, if not filed pursuant to Rule
424(b), will not, and on the date of any filing pursuant to Rule 424(b) and
on the Closing Date, the Final Prospectus (together with any supplement
thereto) will not, include any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; and each document filed or to be filed pursuant to the Exchange
Act and incorporated by reference in the Final Prospectus, when read in
conjunction with all such documents, did not contain or will not contain
when so filed any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading, and complied or will comply when so
filed in all material respects with the Exchange Act and the rules and
regulations of the Commission thereunder; PROVIDED, HOWEVER, that the
Company and the Parent make no representations or warranties as to (i) that
part of the Registration Statement which shall constitute the Statement of
Eligibility and Qualification (Form T-1) under the Trust Indenture Act of
the Trustee or (ii) the information contained in or omitted from the
Registration Statement or the Final Prospectus (or any supplement thereto)
in reliance upon and in conformity with information furnished in writing to
the Company or the Parent by or on behalf of any Underwriter through the
Representatives specifically for inclusion in the Registration Statement or
the Final Prospectus (or any supplement thereto).
(c) PricewaterhouseCoopers LLP, whose reports are included or
incorporated by reference in the Basic Prospectus, Preliminary Final
Prospectus and Final Prospectus, are independent certified public
accountants with respect to the Parent and its subsidiaries and CGU
Corporation and its subsidiaries, within the meaning of the Act and the
rules and regulations adopted by the Commission thereunder.
PricewaterhouseCoopers, whose reports are included or incorporated by
reference in the Basic Prospectus, Preliminary Final Prospectus and Final
Prospectus, are independent certified public accountants with respect to
Montpelier Re Holdings Ltd. ("Montpelier"), within the meaning of the Act
and the rules and regulations adopted by the Commission thereunder. The
financial statements of the Parent and its subsidiaries, CGU Corporation
and its subsidiaries and Montpelier(including the related notes and
supporting schedules) included or incorporated by reference in the
Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus and the Final Prospectus present fairly in all material respects
the financial condition, results of operations and cash flows of the
entities purported to be shown thereby at the dates and for the periods
indicated
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and have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods indicated
and conform in all material respects with the rules and regulations adopted
by the Commission under the Act, except as otherwise noted therein; and the
supporting schedules included or incorporated by reference in the
Registration Statement, Basic Prospectus, Preliminary Final Prospectus and
Final Prospectus present fairly in all material respects the information
required to be stated therein. The PRO FORMA condensed combined financial
information included or incorporated by reference in the Basic Prospectus,
Preliminary Final Prospectus and Final Prospectus (i) is presented fairly
in all material respects, (ii) has been prepared in accordance with the
rules and regulations under the Act with respect to pro forma statements
and (iii) has been properly compiled on the bases described therein, and
the assumptions used in the preparation of the pro forma consolidated
financial information included or incorporated by reference in the Final
Prospectus are reasonable and the adjustments used therein are appropriate
to give effect to the transactions or circumstances referred to therein.
(d) Each of the Company, the Parent and each of the subsidiaries of the
Company listed on Schedule III hereto (the "DESIGNATED SUBSIDIARIES") has
been duly organized or formed and is validly existing in good standing
under the laws of the jurisdiction of its organization or formation, with
full power and authority to own, lease and operate its properties and
conduct its business and to enter into and perform its obligations under
this Agreement and the Indenture; and each of the Company, the Parent and
Designated Subsidiaries is duly qualified to do business and is in good
standing in each jurisdiction in which the character of the business
conducted by it or the location of the properties owned, leased or operated
by it make such qualification necessary, except where the failure to so
qualify would not, individually or in the aggregate, have a material
adverse effect on the condition (financial or otherwise), results of
operations, business or prospects of the Company or the Parent and their
respective subsidiaries taken as a whole (a "MATERIAL ADVERSE EFFECT"). The
Designated Subsidiaries, on an unconsolidated basis, for the year ended on
December 31, 2002 accounted for in the aggregate at least 90% of the
premiums earned (calculated in accordance with statutory accounting
principles) by the Parent and its consolidated subsidiaries in each of its
property and casualty insurance business (exclusive of the reinsurance
business) and its reinsurance business.
(e) The capitalization of the Parent as of December 31, 2002 is as set
forth in the Final Prospectus. All of the outstanding shares of capital
stock of the Parent, the Company and each Designated Subsidiary
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of the Company or the Parent that is a corporation have been duly
authorized and validly issued and are fully paid and nonassessable. Except
as disclosed in the Final Prospectus, all of the outstanding shares of
capital stock, partnership interests or other ownership interests of each
Designated Subsidiary of the Company or the Parent are owned directly or
indirectly by the Company or the Parent, as the case may be, free and clear
of any claim, lien, encumbrance, security interest, restriction upon voting
or transfer, preemptive rights or any other claim of any third party.
(f) Except as described in or contemplated by the Registration
Statement and the Final Prospectus, (i) there has not been any event or
development that has had or would reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect, from the
respective dates as of which information is given in the Final Prospectus
and (ii) since such dates, there has not been any material increase in the
long-term debt or, to the knowledge of the Company and Parent after due
inquiry, loss and loss adjustment expense reserves (net of applicable
reinsurance recoverables) for accident periods ending on or prior to
December 31, 2002 of the Company and Parent and their respective
consolidated subsidiaries.
(g) None of (i) the execution or delivery hereof by the Company and the
Parent, (ii) the consummation of the transactions contemplated hereby,
(iii) the execution and delivery of the Indenture and the Securities by the
Company and the Parent or (iv) compliance by the Company and the Parent
with all of the provisions of this Agreement, the Indenture and the
Securities, will result in a breach or violation of, or constitute a
default under, the certificate of incorporation, memorandum of association,
by-laws, partnership agreement or other governing documents of the Company,
the Parent or any of their Designated Subsidiaries, or (B) will result in a
breach or violation of, or constitute a default under, any agreement,
indenture or other instrument to which the Company, the Parent or any of
the Designated Subsidiaries is a party or by which any of them is bound, or
to which any of their properties is subject, or (C) will result in a
violation of any law, rule, administrative regulation or decree of any
court, or any governmental agency or body having jurisdiction over the
Company, the Parent, Designated Subsidiaries or any of their respective
properties, or (D) will result in the creation or imposition of any lien,
charge, claim or encumbrance upon any property or asset of the Company, the
Parent or any Designated Subsidiaries except (other than with respect to
(A) above), as would not have, individually or in the aggregate, a Material
Adverse Effect. Except for permits, consents, approvals and similar
authorizations required under the securities or "Blue Sky" laws of certain
jurisdictions, and except for such permits, consents,
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approvals and authorizations which have been obtained, no permit, consent,
approval, authorization or order of any court, governmental agency or body
or financial institution is required in connection with the consummation of
the transactions contemplated by this Agreement, the Indenture and the
Securities.
(h) This Agreement has been duly authorized, executed and delivered by
the Company and the Parent.
(i) None of the Company, the Parent or any of their respective
Designated Subsidiaries (i) is in violation of its certificate of
incorporation or by laws or other governing documents, (ii) is in default
and no event has occurred which, with notice or lapse of time or both,
would constitute such a default, in the due performance or observance of
any term, covenant or condition contained in any agreement, indenture or
other instrument to which it is a party or by which it is bound or to which
any of its properties is subject, except for any such defaults that would
not, individually or in the aggregate, have a Material Adverse Effect, or
(iii) is in violation of any insurance law or insurance regulation to which
it or its property may be subject, except for any such violations that
would not, individually or in the aggregate, have a Material Adverse
Effect.
(j) The Indenture has been duly and validly authorized, executed and
delivered by the Company and the Parent and is a valid and binding
agreement of the Company and the Parent, enforceable against the Company
and the Parent in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, fraudulent conveyance or
transfer, reorganization, liquidation, moratorium or similar laws relating
to or affecting creditors' rights generally and by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law). The Indenture (i) has been duly qualified
under the Trust Indenture Act of 1939, as amended (the "TRUST INDENTURE
ACT"), (ii) complies as to form with the requirements of the Trust
Indenture Act and (iii) conforms to the description thereof in the
Registration Statement and the Final Prospectus.
(k) The Securities have been duly and validly authorized by the Company
for issuance and sale to the Underwriters pursuant to this Agreement and,
when executed and authenticated in accordance with the provisions of the
Indenture and delivered to the Underwriters against payment therefor in
accordance with the terms hereof, will have been validly issued and
delivered, and will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture and enforceable against the
Company in accordance with their terms, except as
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enforcement thereof may be limited by bankruptcy, insolvency, fraudulent
conveyance or transfer, reorganization, liquidation, moratorium or other
similar laws relating to or affecting the enforcement of creditors' rights
generally and by general equitable principles (regardless of whether
enforcement is sought in a proceeding in equity or at law), and the
Securities conform, or will conform in all material respects, to the
description thereof in the Registration Statement and the Final Prospectus.
Neither the filing of the Registration Statement nor the offering or sale
of the Securities as contemplated by this Agreement gives rise to any
rights, other than those which have been duly waived or satisfied, for or
relating to the registration of any securities of the Company or the
Parent.
(l) The issuance and delivery of the Guarantees have been duly
authorized by all necessary corporate action of the Parent, and upon their
issuance by the Parent, will constitute the valid and binding obligations
of the Parent entitled to the benefits of the Indenture and enforceable
against the Parent in accordance with their terms, except as such
enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance or transfer, reorganization, liquidation, moratorium or other
similar laws affecting the rights and remedies of creditors generally and
except as may be subject to general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
(m) There are no contracts or other documents which are required to be
described in the Final Prospectus or filed as exhibits to the Registration
Statement or the documents incorporated by reference therein by the Act or
the Exchange Act, as the case may be, which have not been described in the
Final Prospectus or filed as exhibits to the Registration Statement or the
documents incorporated by reference therein as permitted by the Act or
Exchange Act, as the case may be.
(n) There is no litigation or governmental proceeding to which the
Company, the Parent or any of their respective subsidiaries is a party or
to which any property of the Company, the Parent or any of their respective
subsidiaries is subject or which is pending or, to the knowledge of the
Company or the Parent, threatened against the Company, the Parent or any of
their respective subsidiaries that could reasonably be expected to,
individually or in the aggregate, result in a Material Adverse Effect or
which is required to be disclosed in the Final Prospectus and is not
disclosed.
(o) Each of the Company, the Parent and their respective subsidiaries
has (i) all licenses, certificates, permits, authorizations, approvals,
franchises and other rights from, and has made all declarations
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and filings with, all federal, state and local governmental authorities
(including, without limitation, from the insurance regulatory agencies of
the various jurisdictions where it conducts business) and all courts and
other governmental tribunals (each, an "AUTHORIZATION") necessary to engage
in the business currently conducted by it in the manner described in the
Final Prospectus, except where failure to hold such Authorizations would
not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect, (ii) fulfilled and performed all obligations
necessary to maintain each authorization and (iii) no knowledge of any
threatened action, suit or proceeding or investigation that would
reasonably be expected to result in the revocation, termination or
suspension of any Authorization, the revocation, termination or suspension
of which would reasonably be expected to have a Material Adverse Effect.
Except as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect, all such Authorizations are valid and
in full force and effect and the Company, the Parent and their respective
subsidiaries are in compliance in all material respects with the terms and
conditions of all such Authorizations and with the rules and regulations of
the regulatory authorities having jurisdiction with respect thereto. No
insurance regulatory agency or body has issued any order or decree
impairing, restricting or prohibiting the payment of dividends by any
subsidiary of the Company or the Parent to its parent, other than any such
orders or decrees the issuance of which could not reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect.
(p) The 2002 statutory annual statements of each Designated Subsidiary
which is a regulated insurance subsidiary of the Company and the Parent and
the statutory balance sheets and income statements included in such
statutory annual statements together with related schedules and notes, have
been prepared, in all material respects, in conformity with statutory
accounting principles or practices required or permitted by the appropriate
insurance regulator of the jurisdiction of domicile of each such
subsidiary, and such statutory accounting practices have been applied on a
consistent basis throughout the periods involved, except as may otherwise
be indicated therein or in the notes thereto, and present fairly, in all
material respects, the statutory financial position of the such insurance
subsidiaries as of the dates thereof, and the statutory basis results of
operations of the such insurance subsidiaries for the periods covered
thereby.
(q) The Company, the Parent and their respective insurance subsidiaries
have made no material changes in their insurance reserving practices since
December 31, 2002, except where such change in such
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insurance reserving practices would not reasonably be expected to have a
Material Adverse Effect.
(r) The Company and the Parent are not aware of any threatened or
pending downgrading of any Designated Subsidiary's claims-paying ability or
financial strength rating or in the rating accorded any of the Company's,
the Parent's or any Designated Subsidiary's securities by A.M. Best
Company, Inc. or any other "nationally recognized statistical rating
organization" as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act.
(s) None of the Company, the Parent or any of their respective
subsidiaries is an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 ACT"), and subject to
regulation as an "investment company" under the 1940 Act.
(t) There are no Bermuda stamp duty, transfer or similar taxes payable
in respect of this Agreement and the Indenture (together, the "Guarantee
Agreements"). The Guarantee Agreements are not subject to ad valorem stamp
duty in Bermuda, and no registration, documentary, recording, transfer or
other similar tax, fee or charge by any Bermuda government authority is
payable in connection with the execution, delivery, filing, registration or
performance of the Guarantee Agreements.
(u) There is no capital gains, income or other tax of Bermuda imposed
by withholding or otherwise on any payment to be made to or by the Parent
pursuant to the Guarantee Agreements.
(v) Any certificate signed by any officer of the Company or the Parent
and delivered to the Representatives or counsel for the Underwriters in
connection with the offering of the Securities shall be deemed solely to be
a representation and warranty by the Company or the Parent, as applicable,
as to matters covered thereby, to each Underwriter.
2. PURCHASE AND SALE. Subject to the terms and conditions and in reliance
upon the representations and warranties herein set forth, the Company agrees to
sell to each Underwriter, and each Underwriter agrees, severally and not
jointly, to purchase from the Company, at the purchase price set forth in
Schedule I hereto the principal amount of the Securities set forth opposite such
Underwriter's name in Schedule II hereto.
3. DELIVERY AND PAYMENT. Delivery of and payment for the Securities shall
be made on the date and at the time specified in Schedule I hereto (or at such
time on such later date not more than three Business Days after the foregoing
date as the Representatives shall designate), which date and time may be
postponed by
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agreement between the Representatives and the Company or as provided in Section
8 hereof (such date and time of delivery and payment for the Securities being
herein called the "CLOSING DATE"). Delivery of the Securities shall be made to
the Representatives for the respective accounts of the several Underwriters
against payment by the several Underwriters through the Representatives of the
purchase price thereof to or upon the order of the Company by wire transfer
payable in same day funds to an account specified by the Company. Delivery of
the Securities shall be made through the facilities of The Depository Trust
Company unless the Representatives shall otherwise instruct. Time shall be of
the essence, and delivery of the Securities at the time and place specified in
this Agreement is a further condition to the obligations of each Underwriter
hereunder.
4. AGREEMENTS. Each of the Company and the Parent agrees with the several
Underwriters that:
(a) Prior to the termination of the offering of the Securities, neither
the Parent nor the Company will file any amendment of the Registration
Statement or supplement (including the Final Prospectus or any Preliminary
Final Prospectus) to the Basic Prospectus or any Rule 462(b) Registration
Statement unless either the Parent or the Company has furnished you a copy
for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object in writing. Subject
to the foregoing sentence, the Parent and the Company will cause the Final
Prospectus, properly completed, and any supplement thereto to be filed with
the Commission pursuant to the applicable paragraph of Rule 424(b) within
the time period prescribed and will provide evidence satisfactory to the
Representatives of such timely filing. The Parent and the Company will
promptly advise the Representatives (i) when the Final Prospectus, and any
supplement thereto, shall have been filed with the Commission pursuant to
Rule 424(b) or when any Rule 462(b) Registration Statement shall have been
filed with the Commission, (ii) when, prior to termination of the offering
of the Securities, any amendment to the Registration Statement shall have
been filed or become effective, (iii) of any request by the Commission or
its staff for any amendment of the Registration Statement, or any Rule
462(b) Registration Statement, or for any supplement to the Final
Prospectus or of any additional information, (iv) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding
for that purpose and (v) of the receipt by the Parent or the Company of any
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose. Each of the Parent and the Company will
use its reasonable
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efforts to prevent the issuance of any such stop order or the suspension of
any such qualification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Final Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Final Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder, the
Parent and the Company promptly will (i) prepare and file with the
Commission, subject to the first sentence of paragraph (a) of this Section
4, an amendment or supplement, or, if appropriate, a filing under the
Exchange Act, which will correct such statement or omission or effect such
compliance and (ii) supply any supplemented Final Prospectus to you in such
quantities as you may reasonably request.
(c) As soon as practicable, the Parent will make generally available to
its security holders and to the Representatives an earnings statement or
statements of the Parent and its subsidiaries which will satisfy the
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Parent and the Company will furnish to the Representatives and
counsel for the Underwriters, without charge, such number of conformed
copies of the Registration Statement (including exhibits thereto) and, so
long as delivery of a prospectus by an underwriter or a dealer may be
required by the Act, as many copies of any Preliminary Final Prospectus and
the Final Prospectus and any supplement thereto as the Representatives may
reasonably request. The Parent and the Company will pay the expenses of
printing or other production of all documents relating to the offering.
(e) The Parent and the Company will arrange, if necessary, for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Representatives may designate, will maintain such
qualifications in effect so long as required for the distribution of the
Securities, will arrange for the determination of the legality of the
Securities for purchase by institutional investors and will pay any fee of
the National Association of Securities Dealers, Inc., in connection with
its review of the offering, provided that neither the Parent nor the
Company will be required to file a consent to service of process in any
state in which it is not qualified or for which consent has not been given.
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(f) Until the business date set forth on Schedule I hereto, neither the
Parent nor the Company will, without the consent of the Representatives,
offer, sell or contract to sell, or otherwise dispose of (or enter into any
transaction which is designed to, or could be expected to, result in the
disposition (whether by actual disposition or effective economic
disposition due to cash settlement or otherwise) by the Company, the Parent
or any affiliate thereof or any person in privity with the Company, the
Parent or any affiliate thereof) directly or indirectly, or announce the
offering of, any debt securities issued or guaranteed by the Company or the
Parent (other than the Securities).
(g) The Company shall apply the net proceeds from the sale of the
Securities as set forth in the Final Prospectus.
(h) Whether or not this Agreement is terminated or the sale of the
Securities to the Underwriters is consummated, the Company and the Parent
shall, jointly and severally, pay or cause to be paid (i) all fees and
expenses (including, without limitation, all registration and filing fees
and fees and expenses of the Company's or the Parent's accountants but
excluding fees and expenses of counsel for the Underwriters) incurred in
connection with the preparation, printing, filing, delivery and shipping of
the Registration Statement (including the financial statements therein and
all amendments and exhibits thereto), the Basic Prospectus, the Preliminary
Final Prospectus, the Final Prospectus, the Indenture, the Statement of
Eligibility and Qualification of the Trustee on Form T-1 filed with the
Commission and any amendments or supplements of the foregoing and any
documents incorporated by reference into any of the foregoing and the
copying, delivery and shipping of this Agreement and Blue Sky Memoranda,
(ii) all fees and expenses incurred in connection with the preparation and
delivery to the Underwriters of the Securities (including the cost of
printing the Securities), (iii) all filing fees and fees and disbursements
of counsel to the Underwriters incurred in connection with the
qualification of the Securities under state securities or Blue Sky laws,
(iv) any fees required to be paid to rating agencies incurred in connection
with the rating of the Securities, (v) the fees, costs and charges of the
Trustee, including the fees and disbursements of counsel for the Trustee,
and (vi) all other costs and expenses incident to the performance of its
obligations hereunder for which provision is not otherwise made in this
Section. It is understood, however, that, except as provided in this
Section, Section 6 and Section 7 hereof, the Underwriters shall pay the
fees of their counsel.
5. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the Underwriters to purchase the Securities shall be subject to the accuracy of
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the representations and warranties on the part of the Company and the Parent
contained herein as of the Execution Time and the Closing Date, to the accuracy
of the statements of the Company and the Parent made in any certificates
pursuant to the provisions hereof, to the performance by the Company and the
Parent of their respective obligations hereunder and to the following additional
conditions:
(a) If filing of the Final Prospectus, or any supplement thereto, is
required pursuant to Rule 424(b), the Final Prospectus, and any such
supplement, shall have been filed in the manner and within the time period
required by Rule 424(b); no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for any
such purpose shall have been instituted or threatened; and any request of
the Commission for additional information (to be included in the
Registration Statement or the Final Prospectus or otherwise) shall have
been disclosed to the Representatives and complied with in all material
respects.
(b) The Company and the Parent shall have furnished to the
Representatives the opinion of Cravath, Swaine & ▇▇▇▇▇ LLP, counsel for the
Company and the Parent, and ▇▇▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, Bermuda counsel for
the Parent, each dated the Closing Date, substantially in the form attached
hereto as Exhibits A and B, respectively, and a 10b-5 statement from
Cravath, Swaine & ▇▇▇▇▇ LLP, substantially in the form of Exhibit C.
(c) The Representatives shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇ ▇▇▇▇▇▇, General Counsel for the Parent, dated the Closing
Date, substantially in the form of Exhibit D.
(d) The Representatives shall have received on the Closing Date an
opinion of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, General Counsel for OneBeacon Insurance
Company, dated the Closing Date, substantially in the form of Exhibit E.
(e) The Representatives shall have received on the Closing Date an
opinion of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, General Counsel for Folksamerica Holding
Company, Inc., dated the Closing Date, substantially in the form of Exhibit
F.
(f) The Representatives shall have received from ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Securities, the
Indenture, the Registration Statement, the Final Prospectus (together with
any supplement thereto) and other related matters as the Representatives
may reasonably require, and the Company and the Parent
13
shall have furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(g) Each of the Company and the Parent shall have furnished to the
Representatives a certificate of the Company or the Parent, as applicable,
signed by the Chairman of the Board or the President and the principal
financial or accounting officer of the Company or the Parent, as
applicable, dated the Closing Date, to the effect that the signers of such
certificate have carefully examined the Registration Statement, the Final
Prospectus, any supplements to the Final Prospectus and this Agreement and
that:
(i) the representations and warranties of the Company or the
Parent, as applicable, in this Agreement are true and correct in all
material respects on and as of the Closing Date with the same effect as
if made on the Closing Date and the Company or the Parent, as
applicable, has complied with all the agreements and satisfied all the
conditions on its part to be performed or satisfied at or prior to the
Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge or the
Parent's knowledge, as applicable, threatened;
(iii) since the dates as of which information is given in the
Final Prospectus (exclusive of any supplement thereto), there has not
been any event or development that has had or would reasonably be
expected to have a material adverse effect on the financial condition,
results of operation, business or property of the Company or the Parent
and their respective subsidiaries taken as a whole, whether or not
arising from transactions in the ordinary course of business, except as
set forth in or contemplated in the Final Prospectus (exclusive of any
supplement thereto); and
(iv) since the Effective Date there has occurred no event required
to be set forth in an amendment or supplement to the Registration
Statement or the Final Prospectus which has not been so set forth.
(h) At the Execution Time PricewaterhouseCoopers LLP shall have
furnished to the Representatives letters (which may refer to letters
previously delivered to one or more of the Representatives) containing
statements and information of the type customarily included in accountants'
"comfort letters" to underwriters with respect to the financial
14
statements and certain financial information contained in the Registration
Statement and the Final Prospectus (including the documents incorporated by
reference therein), dated as of the Execution Time, in form and substance
satisfactory to the Representatives.
In addition, at the Closing Date, such auditors shall have furnished to
the Representatives a letter or letters, dated as of the Closing Date, in
form and substance satisfactory to the Representatives, to the effect set
forth above.
(i) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in
the letter or letters referred to in paragraph (h) of this Section 5 or
(ii) any change, or any development involving a prospective change, in or
affecting the condition (financial or otherwise), earnings, business or
properties of the Company or the Parent and their respective subsidiaries
taken as a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the Final
Prospectus (exclusive of any supplement thereto) the effect of which, in
any case referred to in clause (i) or (ii) above, is, in the sole judgment
of the Representatives, so material and adverse as to make it impractical
or inadvisable to proceed with the offering or delivery of the Securities
as contemplated by the Registration Statement (exclusive of any amendment
thereof) and the Final Prospectus (exclusive of any supplement thereto).
(j) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's or the Parent's or any
Designated Subsidiary's debt securities or of any subsidiary's financial
strength or claims-paying ability by any "nationally recognized statistical
rating organization" (as defined for purpose of Rule 436(g) under the Act)
or any notice given of any intended or potential decrease in any such
rating or of a possible change in any such rating that does not indicate
the direction of the possible change.
(k) The Company and the Parent shall have executed and delivered the
Indenture in a form and substance reasonably satisfactory to the
Representatives.
(l) Prior to the Closing Date, the Company and the Parent shall have
furnished to the Representatives such further information, certificates and
documents as the Representatives may reasonably request.
15
(m) No Underwriter shall have been advised by either the Company or the
Parent or shall have discovered and disclosed to the Company or the Parent
that the Registration Statement or the Final Prospectus or any amendment or
supplement thereto, contains an untrue statement of fact which in the
Representatives' opinion, or in the opinion or counsel to the Underwriters,
is material, or omits to state a fact which, in the Representatives'
opinion, or in the opinion of counsel to the Underwriters, is material and
is required to be stated therein or is necessary to make the statements
therein not misleading.
(n) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange, the
Nasdaq National Market or the over-the-counter market, or trading in any
securities of the Parent on any exchange shall have been suspended, the
settlement of such trading generally shall have been materially disrupted
or minimum prices shall have been established on any such exchange or
market by the Commission, by such exchange or by any other regulatory body
or governmental authority having jurisdiction, (ii) a banking moratorium
shall have been declared by Federal or state authorities, (iii) there shall
have occurred any outbreak or escalation of hostilities, declaration by the
United States of a national emergency or war or other calamity or crisis,
(iv) there shall have occurred a material disruption of securities
settlement or clearance services or (v) there shall have occurred a
material adverse change in general domestic or international economic,
political or financial conditions, including, without limitation, as a
result of terrorist activities, the effect of which on the financial
markets in the United States shall be such, as to make it in the sole
judgment of the Representatives, impracticable or inadvisable to proceed
with the public offering or delivery of the Securities being delivered on
the Closing Date on the terms and in the manner contemplated in the Final
Prospectus.
If any of the conditions specified in this Section 5 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancellation shall be given to the Company and the Parent in writing or by
telephone or facsimile confirmed in writing.
16
The documents required to be delivered by this Section 5 shall be delivered
at the office of ▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇, counsel for the Underwriters, at ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, on the Closing Date.
6. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Underwriters set forth herein is not satisfied, because of any
termination pursuant to Section 9 hereof or because of any refusal, inability or
failure on the part of the Company or the Parent to perform any agreement herein
or comply with any provision hereof other than by reason of a default by any of
the Underwriters, the Company and the Parent, jointly and severally, will
reimburse the Underwriters severally through ▇▇▇▇▇▇ Brothers Inc. on demand for
all reasonable out of pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities, but the Company and the
Parent shall not be liable in any event to any of the Underwriters for damages
on account of loss of anticipated profits from the sale of the Securities.
7. INDEMNIFICATION AND CONTRIBUTION. The Company and the Parent, jointly
and severally, agree to indemnify and hold harmless each Underwriter, the
directors, officers, employees and agents of each Underwriter and each person
who controls any Underwriter within the meaning of either the Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Act, the
Exchange Act or other Federal or state statutory law or regulation, at common
law 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 a material fact contained in the Registration
Statement for the registration of the Securities as originally filed or in any
amendment thereof, or in the Basic Prospectus, any Preliminary Final Prospectus
or the Final Prospectus, or in any amendment thereof or supplement thereto, 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 agree to reimburse each such indemnified
party, as reasonably incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating, defending or appearing as a
third-party witness in connection with any such loss, claim, damage, liability
or action; provided, however, that with respect to any untrue statement or
omission of material fact made in any Preliminary Prospectus, the indemnity
agreement contained in this Section 7(a) shall not inure to the benefit of any
Underwriter from whom the person asserting any such loss, claim, damage or
liability purchased the securities concerned, to the extent that any such loss,
claim, damage or liability of such Underwriter occurs under the circumstance
where it shall have been determined by a court of competent jurisdiction by
final and nonappealable judgment that (i) the Company
17
or the Parent had previously furnished copies of the Final Prospectus to the
Representatives, (ii) delivery of the Final Prospectus was required by the Act
to be made to such person, (iii) the untrue statement or omission of a material
fact contained in the Preliminary Prospectus was corrected in the Final
Prospectus and (iv) there was not sent or given to such person, at or prior to
the written confirmation of the sale of such securities to such person, a copy
of the Final Prospectus. This indemnity agreement will be in addition to any
liability which the Company or the Parent may otherwise have.
(b) Each Underwriter severally, but not jointly, agrees to indemnify
and hold harmless the Company, the Parent, each of their respective
directors, each of their respective officers who signs the Registration
Statement, and each person who controls the Company or the Parent within
the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Company to each Underwriter, but only with
reference to written information relating to such Underwriter furnished to
the Company by or on behalf of such Underwriter through the Representatives
specifically for inclusion in the documents referred to in the foregoing
indemnity. This indemnity agreement will be in addition to any liability
which any Underwriter may otherwise have. The Company and the Parent
acknowledge that the statements set forth in the last paragraph of the
cover page regarding delivery of the Securities, and, under the heading
"Underwriting" or "Plan of Distribution", (i) the sentences related to
concessions and reallowances and (ii) the paragraph related to
stabilization in any Preliminary Final Prospectus or the Final Prospectus
constitute the only information furnished in writing by or on behalf of the
several Underwriters for inclusion in the documents referred to in the
foregoing indemnity.
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the prejudice by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than
the indemnification obligation provided in paragraph (a) or (b) above. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in
which case the indemnifying party shall not thereafter be
18
responsible for the fees and expenses of any separate counsel retained by
the indemnified party or parties except as set forth below); PROVIDED,
HOWEVER, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to a total of one separate counsel
(and, if reasonably necessary, one additional local counsel) and the
indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying
party to represent the indemnified party would present such counsel with a
conflict of interest, (ii) the indemnified party shall have been advised by
counsel that there may be one or more legal defenses available to such
indemnified party which are different from or additional to those available
to the indemnifying party and in the reasonable judgment of such counsel it
is advisable for the indemnified party to employ separate counsel, (iii)
the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party
will not, without the prior written consent of the indemnified parties,
settle or compromise or consent to the entry of any judgment with respect
to any pending or threatened claim, action, suit or proceeding in respect
of which indemnification or contribution may be sought hereunder (whether
or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding, in which case such consent
shall not be unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a) or (b) of
this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company, the Parent and the
Underwriters agree to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in
connection with investigating or defending same) (collectively "LOSSES") to
which the Company, the Parent and one or more of the Underwriters may be
subject in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Parent on the one hand and by the
Underwriters on the other from the offering of the Securities; provided,
however, that in no case shall any Underwriter (except as may be provided
in any agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting
discount or commission applicable to the Securities purchased by such
19
Underwriter hereunder. If the allocation provided by the immediately
preceding sentence is unavailable for any reason, the Company, the Parent
and the Underwriters shall contribute in such proportion as is appropriate
to reflect not only such relative benefits but also the relative fault of
the Company and the Parent on the one hand and of the Underwriters on the
other in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits
received by the Company and the Parent shall be deemed to be equal to the
total net proceeds from the offering (before deducting expenses) received
by it, and benefits received by the Underwriters shall be deemed to be
equal to the total underwriting discounts and commissions, in each case as
set forth on the cover page of the Final Prospectus. Relative fault shall
be determined by reference to, among other things, whether any untrue or
any alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information provided by the
Company and the Parent on the one hand or the Underwriters on the other,
the intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The Company, the Parent and the Underwriters agree that it would
not be just and equitable if contribution were determined by pro rata
allocation or any other method of allocation which does not take account of
the equitable considerations referred to above. Notwithstanding the
provisions of this paragraph (d), no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person
who controls an Underwriter within the meaning of either the Act or the
Exchange Act and each director, officer, employee and agent of an
Underwriter shall have the same rights to contribution as such Underwriter,
and each person who controls the Company or the Parent within the meaning
of either the Act or the Exchange Act, each officer of the Company or the
Parent who shall have signed the Registration Statement and each director
of the Company or the Parent shall have the same rights to contribution as
the Company or the Parent, as applicable, subject in each case to the
applicable terms and conditions of this paragraph (d). The Underwriters'
obligations in this subsection (d) to contribute are several in proportion
to their respective underwriting obligations and not joint.
8. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall fail to
purchase and pay for any of the Securities agreed to be purchased by such
Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
20
and pay for within 24 hours (in the respective proportions which the amount of
the Securities set forth opposite their names in Schedule II hereto bears to the
aggregate amount of the Securities set forth opposite the names of all the
remaining Underwriters) the Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase; provided, however, that in the event
that the aggregate amount of Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
amount of Securities set forth in Schedule II hereto, the remaining Underwriters
shall have the right to purchase within 24 hours all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting
Underwriters do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Underwriter, the Company or the Parent.
In the event of a default by any Underwriter as set forth in this Section 8, the
Closing Date shall be postponed for such period, not exceeding five Business
Days, as the Representatives shall determine in order that the required changes
in the Registration Statement and the Final Prospectus or in any other documents
or arrangements may be effected. Nothing contained in this Agreement shall
relieve any defaulting Underwriter of its liability, if any, to the Company, the
Parent and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
9. TERMINATION. This Agreement shall be subject to termination in the
absolute discretion of the Representatives, by notice given to the Company and
the Parent prior to delivery of and payment for the Securities, if at any time
prior to such time (i) the Company or the Parent shall have failed, refused or
been unable, at or prior to the Closing Date, to perform any agreement on its
part to be performed hereunder, (ii) any of the events described in Sections
5(j) or 5(n) shall have occurred or (iii) if the Underwriters shall decline to
purchase the Securities for any reason permitted under this Agreement.
10. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective agreements,
representations, warranties, indemnities and other statements of the Company,
the Parent or their respective officers and of the Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation made by or on behalf of any Underwriter, the Company or the
Parent or any of the officers, directors or controlling persons referred to in
Section 7 hereof, and will survive delivery of and payment for the Securities.
The provisions of Sections 4(h), 6 and 7 hereof shall survive the termination or
cancellation of this Agreement.
11. NOTICES. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Representatives, mailed or delivered to:
21
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Debt Capital Markets, Financial Institutions Group
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to the General Counsel at such address
with a copy to:
▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. Esq.
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
or, if sent to the Company, mailed or delivered to:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
White Mountains Insurance Group, Ltd.
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
If sent to the Parent, mailed or delivered to:
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇ 03755-2053
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
and confirmed to it at:
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
22
12. SUCCESSORS. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 7 hereof, and no other
person will have any right or obligation hereunder. The term "successors" shall
not include any purchaser of the Securities merely because of such purchase.
13. APPLICABLE LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
14. COUNTERPARTS. This Agreement may be signed in one or more counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same agreement.
15. HEADINGS. The section headings used herein are for convenience only and
shall not affect the construction hereof.
16. DEFINITIONS. The terms which follow, when used in this Agreement, shall
have the meanings indicated.
"ACT" shall mean the Securities Act of 1933, as amended.
"BASIC PROSPECTUS" shall mean the prospectus referred to in paragraph
1(a) above contained in the Registration Statement at the Effective Date,
as amended on or prior to the date of this Agreement.
"BUSINESS DAY" shall mean any day other than a Saturday, a Sunday or a
legal holiday or a day on which banking institutions or trust companies are
authorized or obligated by law to close in New York City or Bermuda.
"EFFECTIVE DATE" shall mean each date and time that the Registration
Statement, any post effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"EXECUTION TIME" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"FINAL PROSPECTUS" shall mean the form of final prospectus relating to
the Securities, including the Basic Prospectus.
23
"PRELIMINARY FINAL PROSPECTUS" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus.
"PRELIMINARY PROSPECTUS" shall mean any preliminary prospectus referred
to in paragraph 1(a) above and any preliminary prospectus included in the
Registration Statement at the Effective Date that omits Rule 430A
Information.
"REGISTRATION STATEMENT" shall mean the registration statement referred
to in paragraph 1(a) above, including exhibits and financial statements, as
amended at the Execution Time (or, if not effective at the Execution Time,
in the form in which it shall become effective) and, in the event any post
effective amendment thereto or any Rule 462(b) Registration Statement
becomes effective prior to the Closing Date (as hereinafter defined), shall
also mean such registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be. Such term shall include any
Rule 430A Information deemed to be included therein at the Effective Date
as provided by Rule 430A.
"RULE 424", "RULE 430A" and "RULE 462" refer to such rules under the
Act.
"RULE 430A INFORMATION" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"RULE 462(B) REGISTRATION STATEMENT" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b) relating
to the offering covered by the initial registration statement.
"TRUST INDENTURE ACT" shall mean the Trust Indenture Act of 1934, as
amended.
24
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the
Company, the Parent and the several Underwriters.
Very truly yours,
Fund American Companies, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
White Mountains Insurance Group, Ltd.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Secretary & Treasurer
The foregoing Agreement is hereby confirmed and accepted as of the date
specified in Schedule I hereto.
▇▇▇▇▇▇ Brothers Inc.
Banc of America Securities LLC
Credit Suisse First Boston LLC
By: ▇▇▇▇▇▇ Brothers Inc.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Senior Vice President
For themselves and the other several
Underwriters, if any, named in Schedule II
to the foregoing Agreement.
25
SCHEDULE I
Underwriting Agreement dated May 14, 2003
Registration Statement No.: 333-73012
Representatives:
▇▇▇▇▇▇ Brothers Inc.
Banc of America Securities LLC
Credit Suisse First Boston LLC
Principal Amount: $700,000,000
Public Offering Price: 99.710% of the principal amount, plus
accrued interest, if any, from May 19,
2003
Purchase price: 99.060% of the principal amount, plus
accrued interest, if any, from May 19,
2003
Interest rate: 5.875% per annum
Closing Date, Time and Location: May 19, 10:00 am (New York City time),
Cravath, Swaine & ▇▇▇▇▇ LLP
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Date referred to in Section 4(f) after which the Company may offer or sell debt
securities issued or guaranteed by the Company or the Parent without the consent
of the Representative(s): 30 days after Closing Date
I-1
SCHEDULE II
UNDERWRITERS
-------------------------------------------------------------- ------------
▇▇▇▇▇▇ Brothers Inc........................................... $427,000,000
Banc of America Securities LLC................................ 87,500,000
Credit Suisse First Boston LLC................................ 87,500,000
Banc One Capital Markets, Inc................................. 28,000,000
BNY Capital Markets, Inc...................................... 28,000,000
Fleet Securities, Inc......................................... 42,000,000
Total......................................................... $700,000,000
============
II-1
SCHEDULE III
DESIGNATED SUBSIDIARIES
OneBeacon Insurance Company
OneBeacon America Insurance Company
The Camden Fire Insurance Association
Homeland Insurance Company of New York
Northern Assurance Company of America
Pennsylvania General Insurance Company
National Farmers Union P&C Company
Folksamerica Reinsurance Company
III-1
EXHIBIT A
May 19, 2003
FUND AMERICAN COMPANIES, INC.
$700,000,000 5.875% SENIOR NOTES DUE 2013
Ladies and Gentlemen:
We have acted as special counsel for Fund American Companies, Inc., a
Delaware corporation (the "Company") and White Mountains Insurance Group, Ltd.
(the "Guarantor"), in connection with the purchase by the several Underwriters
(the "Underwriters") listed in Schedule II to the Underwriting Agreement dated
May 14, 2003 (the "Underwriting Agreement"), among ▇▇▇▇▇▇ Brothers Inc., Banc of
America Securities LLC and Credit Suisse First Boston LLC, as Representatives of
the Underwriters, the Company and the Guarantor, of $700,000,000 aggregate
principal amount of the Company's 5.875% Senior Notes Due 2013 (the "Senior
Notes"), to be issued pursuant to a Senior Indenture dated as of May 19, 2003
(the "Original Indenture") among the Guarantor, the Company and Bank One,
National Association, as trustee, as supplemented by the First Supplemental
Indenture, dated as of May 19, 2003 (the "Supplemental Indenture" and together
with the Original Indenture, as so supplemented, the "Indenture").
In that connection, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of such documents, corporate records
and other instruments as we have deemed necessary or appropriate for the
purposes of this opinion, including: (a) the Certificate of Incorporation of the
Company, as amended; (b) the By-laws of the Company; (c) resolutions adopted by
the Board of Directors of the Company on March 6, 2002; (d) the Registration
Statement on Form S-3 (Registration No. 333-73012) filed with the Securities and
Exchange Commission (the "Commission") on November 8, 2001, (the "Registration
Statement"), for registration under the Securities Act of 1933 (the "Securities
Act") of $1,000,000,000 aggregate amount of various securities of the Company,
to be issued from time to time by the Company and guaranteed by the Guarantor,
as amended by Amendment No. 1 thereto filed with the Commission on December 10,
2001; (e) the related Prospectus dated May 14, 2003, filed with the Commission
on May 16, 2003 pursuant to Rule 424(b) under the Securities Act (together with
the documents incorporated therein by reference, the "Base Prospectus"); (f) the
Prospectus Supplement dated May 14, 2003, filed with the Commission pursuant to
Rule 424(b) under the Securities Act (together with the Base Prospectus, the
"Prospectus"); (g) the Underwriting Agreement; (h) the Indenture; and (i) the
form of the Senior Notes. We have also relied upon advice from the Commission
that the Registration Statement was declared effective on December 10, 2001.
A-1
Based on the foregoing, we are of opinion as follows:
1. Based solely on a certificate from the Secretary of State of Delaware,
the Company is a corporation validly existing and in good standing under the
laws of the State of Delaware, with full corporate power and authority to own,
lease and operate its properties and conduct its businesses as described in the
Prospectus.
2. The Company has the necessary corporate power and authority to enter
into and perform its obligations under the Indenture and the Underwriting
Agreement and to file the Registration Statement.
3. The Indenture has been duly authorized, executed and delivered by the
Company, has been duly qualified under the Trust Indenture Act of 1939 and
constitutes a legal, valid and binding obligation of the Company and, assuming
the due authorization, execution and delivery of the Indenture by the Guarantor,
of the Guarantor enforceable against the Company and the Guarantor in accordance
with its terms (subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity, including concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether considered in a proceeding in equity or at law);
and the Senior Notes have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Underwriters pursuant to the Underwriting Agreement, will
constitute legal, valid and binding obligations of the Company entitled to the
benefits of the Indenture and enforceable against the Company in accordance with
their terms (subject to applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and other similar laws affecting creditors'
rights generally from time to time in effect and to general principles of
equity, including concepts of materiality, reasonableness, good faith and fair
dealing, regardless of whether in a proceeding in equity or at law).
4. The Underwriting Agreement has been duly authorized, executed and
delivered by the Company.
5. The filing of the Registration Statement has been duly authorized by the
Company.
6. No authorization, approval or other action by, and no notice to, consent
of, order of, or filing with, any United States Federal, New York or, to the
extent required under the General Corporation Law of the State of Delaware,
Delaware governmental authority or regulatory body is required for the
consummation by the Company or the Guarantor of the transactions contemplated by
the Underwriting Agreement, except such as have been obtained under the Act or
the Trust Indenture Act and such as may be required under the blue sky laws of
any jurisdiction in connection with the purchase and distribution of the Senior
Notes by the Underwriters.
A-2
7. None of the issue and sale of the Senior Notes, the consummation of any
other of the transactions contemplated by the Underwriting Agreement or the
performance of the terms of the Underwriting Agreement (i) will conflict with,
result in a breach of, will result in the creation or imposition of any Lien
upon any property of the Company or the Guarantor or their respective
subsidiaries pursuant to, or constitute a default under, the Certificate of
Incorporation or By-laws of the Company, or the terms of any indenture or other
agreement or instrument to which the Company, the Guarantor or any of their
respective subsidiaries is a party or bound and listed as an exhibit to the Form
10-K for the fiscal year ended December 31, 2002 filed with the Commission on
March 31, 2003 or to any filing made with the Commission by the Guarantor or the
Company subsequent to the filing of such Form 10-K, or (ii) will contravene any
law, rule or regulation of the United States or the State of New York or the
General Corporation Law of the State of Delaware. In connection with the
foregoing, we point out that certain of the agreements referred to in clause (i)
above are or may be governed by laws other than the laws of the State of New
York. For purposes of the opinion expressed in this paragraph, however, we have
assumed that all such agreements are governed by and would be interpreted in
accordance with the laws of the State of New York.
8. The statements made in the Prospectus under the captions "Description of
the Notes" and "Description of Debt Securities" (except for the statements
contained in the sections titled "Description of the Notes--Book-Entry; Delivery
and Form" and "Description of Debt Securities--Global Securities"), insofar as
they purport to constitute summaries of the terms of the Senior Notes, and under
the caption "U.S. Federal Income Tax Consequences", insofar as they purport to
describe the material tax consequences of an investment in the Senior Notes,
fairly summarize the matters therein described.
9. The Registration Statement became effective upon the Securities Act on
December 10, 2001, and thereupon the offering of the Senior Notes as
contemplated by the Prospectus became registered under the Securities Act and,
to our knowledge, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are pending or contemplated under the Securities Act.
10. It is not, and immediately after giving effect to the offering and sale
of the Senior Notes, it will not be, necessary to register the Guarantor or the
Company as an "investment company" under the Investment Company Act of 1940.
We are admitted to practice in the State of New York, and we express no
opinion as to any matters governed by any law other than the law of the State of
New York, the General Corporation Law of the State of Delaware and the Federal
law of the United States of America. In particular, we do not purport to pass on
any matter governed by the laws of Bermuda. We also do not purport to pass on
any law, rule or regulation, or any order or decree, having particular
applicability to the insurance industry.
A-3
We are furnishing this opinion to you, as Representatives, solely for your
benefit and the benefit of the several Underwriters. This opinion may not be
relied upon by any other person (including any person that acquires the Senior
Notes from the several Underwriters) or for any other purpose or used,
circulated, quoted or otherwise referred to for any other purpose.
Very truly yours,
▇▇▇▇▇▇ Brothers Inc.
Banc of America Securities LLC
Credit Suisse First Boston LLC,
as representatives of the Underwriters,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇-▇
▇▇▇▇▇▇▇ ▇
▇▇ ▇▇▇, ▇▇▇▇
▇▇▇▇▇▇ Brothers Inc.
DIRECT LINE: ▇▇▇-▇▇▇-▇▇▇▇
Banc of America Securities LLC E-MAIL: ▇▇▇▇▇▇▇@▇▇▇.▇▇
Credit Suisse First Boston LLC OUR REF: 3233698/corpdoc.
as representatives of the Underwriters YOUR REF:
C/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇
Dear Sirs,
WHITE MOUNTAINS INSURANCE GROUP, LTD. (THE "COMPANY")
We have acted as special Bermuda counsel to the Company in connection with
the Company's guarantee of USD$700,000,000 5.875% Senior Notes due 2013 (the
"Debt Securities") of Fund American Companies Inc. ("Fund American"). The Debt
Securities are described in the prospectus dated May 14, 2003 (the "Prospectus,
which term does not include any other documents whether or not specifically
incorporated by reference therein or attached as an exhibit of schedule thereto)
contained in the registration statement of the Company and Fund American on Form
S-3 (Registration No. 333-73012) dated 8 November, 2001, as amended by Amendment
No. 1 thereto filed with the U.S. Securities and Exchange Commission on December
10, 2001(the "Registration Statement", which term does not include any other
documents whether or not specifically incorporated by reference therein or
attached as an exhibit or schedule thereto).
For the purposes of giving this opinion, we have examined copies of the
following Agreements:
a. the Prospectus;
b. the Registration Statement;
c. a facsimile copy of an underwriting agreement dated 14 May, 2003
between the Company, Fund American and the Underwriters (such term
having herein the same meaning as therein) (the "Underwriting
Agreement");
d. a facsimile copy of an Indenture dated as of 19 May, 2003 (the
"Senior Indenture") among the Company, Fund American and Banc One,
National Association, as trustee (the "Trustee"); and
B-1
▇▇▇▇▇▇ Brothers Inc.
19 May, 2003 C&P
Page 2
e. a facsimile copy of a first supplement to the Indenture dated as
of 19 May, 2003 (the "Supplemental Indenture" and together with
the Senior Indenture, the "Indenture") among the Company, Fund
American and the Trustee.
The agreements referred to in paragraphs (c), (d) and (e) above are herein
sometimes collectively referred to herein as the "Agreements" (which term does
not include any other instrument or agreement whether or not specifically
referred to therein or attached as an exhibit or schedule thereto).
We have also reviewed and have relied upon:
a. the memorandum of continuance and the bye-laws of the Company
certified by an Officer of the Company on 16 May, 2003;
b. an extract from minutes of a meeting of the board of directors of
the Company (the "Board"), containing resolutions adopted by the
Board, held on 28 February, 2002;
c. a Certificate of Compliance under Act issued on 16 May, 2003 by or
on behalf of the Registrar of Companies in respect of the Company;
d. letters of consent from the Bermuda Monetary Authority dated 21
October, 1999 and 22 October, 1999; and
e. a copy of the Register of Members of the Company as at 31 March,
2003, duly certified to be true and correct by Equiserve Trust
Company, N.A., the Registrar and Transfer Agent of the Company.
and such other documents and have made such enquiries as to questions of Bermuda
law as we have deemed necessary in order to render the opinions set forth below.
We have assumed (a) the genuineness and authenticity of all signatures and
the conformity to the originals of all copies (whether or not certified)
examined by us and the authenticity and completeness of the originals from which
such copies were taken; (b) that where a document has been examined by us in
draft form, it will be or has been executed in the form of that draft, and where
a number of drafts of a document have been
B-2
▇▇▇▇▇▇ Brothers Inc.
19 May, 2003 C&P
Page 3
examined by us all changes thereto have been marked or otherwise drawn to our
attention, (c) the capacity, power and authority of each of the parties to the
Agreements, other than the Company, to enter into and perform its respective
obligations under the Agreements; (d) the due execution of the Agreements by
each of the parties thereto, other than the Company, and the delivery of the
Agreements by each of the parties thereto; (e) the accuracy and completeness of
all factual statements and representations made in the Agreements and other
documents reviewed by us; (f) that the resolutions contained in the Minutes
remain in full force and effect and have not been rescinded, amended or
supplemented; (g) that there is no provision of the law of any jurisdiction,
other than Bermuda, which would have any implication in relation to the opinions
expressed herein; (h) the validity and binding effect under the laws of the
State of New York (the "Foreign Laws") of the Agreements; (i) the validity under
the Foreign Laws of the submission pursuant to the Agreements to the exclusive
jurisdiction of any New York Court, (the "Foreign Courts"); (j) that at the time
of entering into the Agreements, and after entering into the Agreements, the
Company is and will be able to pay its liabilities as they become due; (k) that
none of the parties to the Agreements has carried on or will carry on
activities, other than the performance of its obligations under the Agreements,
which would constitute the carrying on of investment business in or from within
Bermuda and that none of the parties to the Agreements, other than the Company,
will perform its obligations under the Agreements in or from within Bermuda.
Our opinion in paragraph 4 below is subject to the assumption that no
selling or purchasing or other trade or business or acts are conducted in or
from within Bermuda or elsewhere in connection with the public offering of
shares in the Company which would violate Bermuda laws pertaining to
restrictions on the activities in Bermuda of persons not being local companies
or entities or Bermudians and pertaining to Bermuda foreign exchange control
restrictions on non-Bermuda dollars and non-Bermuda dollar investments by
persons deemed to be resident for Bermuda exchange control purposes.
Our opinion in paragraph 5(b) below is based solely on our review of the
Register.
The obligations of the Company under the Agreements (a) will be subject to
the laws from time to time in effect relating to bankruptcy, insolvency,
liquidation, possessory liens, rights of set-off, amalgamation, reorganization,
moratorium or any other laws or legal procedures, whether of a similar nature or
otherwise, generally affecting the rights of creditors, (b) will be subject to
statutory limitation of the time within which proceedings may be brought, (c)
will be subject to general principles of equity and, as such, specific
performance and injunctive relief, being equitable remedies, may not be
available, (d) may not be given effect to by a Bermuda court, whether or not it
was applying the Foreign Laws, if and to the extent they constitute the payment
of an amount
B-3
▇▇▇▇▇▇ Brothers Inc.
19 May, 2003 C&P
Page 4
which is in the nature of a penalty and not in the nature of liquidated damages.
Notwithstanding any contractual submission to the jurisdiction of specific
courts, a Bermuda court has inherent discretion to stay or allow proceedings in
the Bermuda courts.
We express no opinion as to the enforceability of any provision of the
Agreements which provides for the payment of a specified rate of interest on the
amount of a judgment after the date of judgment or which purports to ▇▇▇▇▇▇ the
statutory powers of the Company (Section 501(5) of the Senior Indenture does not
constitute such ▇▇▇▇▇▇).
We have made no investigation of and express no opinion in relation to the
laws of any jurisdiction other than Bermuda. This opinion is to be governed by
and construed in accordance with the laws of Bermuda and is limited to and is
given on the basis of the current law and practice in Bermuda. This opinion is
issued solely for your benefit, with respect to matters referred to herein, and
is not to be relied upon by any other person, firm or entity or in respect of
any other matter without our written consent.
On the basis of and subject to the foregoing, we are of the opinion that:
1. The Company is duly incorporated and existing under the laws of Bermuda
as an exempted company (as defined in Section 127 of the Act) and is in
good standing (meaning that it has not failed to make any required
filing with any Bermuda government authority or to pay any Bermuda
government fee or tax, which would make it liable to be struck off the
register of companies and thereby cease to exist under the laws of
Bermuda), with corporate power and authority to own its properties and
conduct its business as described under the caption "Business" in the
Prospectus.
2. The Company has the necessary corporate power and authority to enter
into and perform its obligations under the Agreements and to execute
and file the Registration Statement. The execution and delivery of the
Agreements by the Company and the performance by the Company of its
obligations thereunder will not violate the memorandum of continuance
or bye-laws of the Company nor any applicable law, regulation, order or
decree in Bermuda.
3. The Company has taken all corporate action required to authorize its
execution, delivery and performance of the Agreements and the execution
and filing of the Registration Statement. The Agreements have been duly
executed by or on behalf of the Company and constitute the valid and
B-4
▇▇▇▇▇▇ Brothers Inc.
19 May, 2003 C&P
Page 5
binding obligations of the Company enforceable in accordance with their
respective terms.
4. No order, consent, approval, licence, authorization or validation of or
exemption by any government or public body or authority of Bermuda or
any sub-division thereof is required to authorize or is required in
connection with the execution, delivery, performance and enforcement of
the Agreements, except such as have been duly obtained in accordance
with Bermuda law and which are in full force and effect.
5. (a) The authorized capital of the Company is as set forth in the
Prospectus.
(b) All of the issued share capital of the Company at 31 March, 2003
was validly issued, and such shares of the Company were fully paid
and non-assessable (meaning that no further sums are required to
be paid by the holders thereof in connection with the issue
thereof).
6. There are no Bermuda stamp duty, transfer or similar taxes payable in
respect of the Agreements. The Agreements are not subject to ad valorem
stamp duty in Bermuda, and no registration, documentary, recording,
transfer or other similar tax, fee or charge by any Bermuda government
authority is payable in connection with the execution, delivery,
filing, registration or performance of the Agreements.
7. There is no capital gains, income or other tax of Bermuda imposed by
withholding or otherwise on any payment to be made to or by the Company
pursuant to the Agreements.
8. The Company is not entitled to any immunity under the laws of Bermuda,
whether characterised as sovereign immunity or otherwise, from any
legal proceedings to enforce the Agreements in respect of itself or its
property.
9. It is not necessary or desirable to ensure the enforceability in
Bermuda of the Agreements that they be registered in any register kept
by, or filed with, any governmental authority or regulatory body in
Bermuda.
10. The Company is not registered as an insurer under the Insurance Act,
1978 of Bermuda (the "Insurance Act") and is therefore not required to
comply with the requirements of the Insurance Act applicable to
registered insurers by virtue of their registration under the Insurance
Act.
B-5
▇▇▇▇▇▇ Brothers Inc.
19 May, 2003 C&P
Page 6
11. All statements made in the Prospectus with respect to statutes,
regulations, and other laws of Bermuda fairly and accurately present
the information set forth therein.
12. The Company's agreement to the choice of law provisions set forth in
Section 13 of the Underwriting Agreement is a valid choice of law and
would be recognised and given effect to in any action brought before a
court of competent jurisdiction in Bermuda except for those laws (i)
which such court considers to be procedural in nature, (ii) which are
revenue or penal laws or (iii) the application of which would be
inconsistent with public policy, as such term is interpreted under the
laws of Bermuda.
13. The courts of Bermuda would recognise as a valid judgment, a final and
conclusive judgment in personam obtained in the federal courts of New
York against the Company based upon the Agreements under which a sum of
money is payable (other than a sum of money payable in respect of
multiple damages, taxes or other charges of a like nature or in respect
of a fine or other penalty) and would give a judgment based thereon
provided that (a) such courts had proper jurisdiction over the parties
subject to such judgment, (b) such courts did not contravene the rules
of natural justice of Bermuda, (c) such judgment was not obtained by
fraud, (d) the enforcement of the judgment would not be contrary to the
public policy of Bermuda, (e) no new admissible evidence relevant to
the action is submitted prior to the rendering of the judgment by the
courts of Bermuda and (f) there is due compliance with the correct
procedures under the laws of Bermuda.
Yours faithfully,
▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇
▇-▇
▇▇▇▇▇▇▇ ▇
▇▇▇ ▇▇, ▇▇▇▇
▇▇▇▇ AMERICAN COMPANIES, INC.
$700,000,000 5.875% SENIOR NOTES DUE 2013
Ladies and Gentlemen:
We have acted as special counsel for Fund American Companies, Inc., a
Delaware corporation (the "Company") and White Mountains Insurance Group, Ltd.
(the "Guarantor"), in connection with the purchase by the several Underwriters
(the "Underwriters") listed in Schedule II to the Underwriting Agreement dated
May 14, 2003 (the "Underwriting Agreement"), among ▇▇▇▇▇▇ Brothers Inc., Banc of
America Securities LLC and Credit Suisse First Boston LLC, as Representatives of
the Underwriters, the Company and the Guarantor, of $700,000,000 aggregate
principal amount of the Company's 5.875% Senior Notes Due 2013 (the "Senior
Notes"), to be issued pursuant to a Senior Indenture dated as of May 19, 2003
(the "Original Indenture") among the Guarantor, the Company and Bank One,
National Association, as trustee, as supplemented by the First Supplemental
Indenture, dated as of May 19, 2003 (the "Supplemental Indenture" and together
with the Original Indenture, as so supplemented, the "Indenture").
In that capacity, we participated in conferences with certain officers of,
and with the accountants and foreign counsel for, the Company and the Guarantor,
and with representatives of and counsel for the Representatives concerning the
preparation of the Prospectus Supplement dated May 14, 2003 (together with the
related Base Prospectus (as defined herein), the "Prospectus"), relating to the
Senior Notes, filed with the Securities and Exchange Commission (the
"Commission") pursuant to Rule 424(b) of the General Rules and Regulations under
the Securities Act of 1933 (the "Securities Act"). The Prospectus was filed as
part of the Registration Statement on Form S-3 (Registration No. 333-73012)
filed with the Commission on November 8, 2001 for registration under the
Securities Act of $1,000,000,000 aggregate amount of various securities of the
Company, to be issued from time to time by the Company and guaranteed by the
Guarantor, as amended by Amendment No. 1 thereto filed with the Commission on
December 10, 2001 (the "Registration Statement"), which Registration Statement
includes a prospectus dated May 14, 2003 filed with the Commission on May 16,
2003 pursuant to Rule 424(b) under the Securities Act (together with the
documents incorporated therein by reference, the "Base Prospectus"). The
documents incorporated by reference in the Registration Statement and Prospectus
were prepared and filed by the Company without our participation.
C-1
Although we have made certain inquiries and investigations in connection
with the preparation of the Registration Statement and the Prospectus, the
limitations inherent in the role of outside counsel are such that we cannot and
do not assume responsibility for the accuracy or completeness of the statements
made in the Registration Statement and Prospectus, except insofar as such
statements relate to us and except to the extent set forth in paragraph (8) of
our opinion to you dated the date hereof. Subject to the foregoing, we confirm
to you, on the basis of information gained in the course of the performance of
the services rendered above that, the Registration Statement at the time it was
deemed to be amended, and the Prospectus, as of the date of the Prospectus
Supplement and as of the date hereof (in each case except the financial
statements and other information of a statistical, accounting or financial
nature included therein, as to which we do not express any view), appeared on
their face to be appropriately responsive in all material respects to the
requirements of the Securities Act and the applicable rules and regulations
thereunder. Furthermore, subject to the foregoing, we hereby advise you that our
work in connection with this matter did not disclose any information that gave
us reason to believe that the Registration Statement at the time the
Registration Statement was deemed to be amended, contained an untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that the
Prospectus, as of the date of the Prospectus Supplement and at the date hereof,
included or includes an untrue statement of a material fact or omitted or omits
to state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading (in
each case except for the financial statements and other information of a
statistical, accounting or financial nature included therein, as to which we do
not express any view).
We are furnishing this letter to you, as Representatives, solely for the
benefit of the several Underwriters in order to assist the several Underwriters
in establishing appropriate defenses under applicable securities laws. This
letter may not be relied upon by any other person (including any person that
acquires the Senior Notes from the several Underwriters) or for any other
purpose or used, circulated, quoted or otherwise referred to for any other
purpose.
Very truly yours,
▇▇▇▇▇▇ Brothers Inc.
Banc of America Securities LLC
Credit Suisse First Boston LLC,
as representatives of the Underwriters,
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
C-2
EXHIBIT D
May 19, 2003
▇▇▇▇▇▇ Brothers Inc.
Banc of America Securities LLC
Credit Suisse First Boston LLC
as representatives of the Underwriters
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: OFFERING OF $700,000,000 5.875% SENIOR NOTES DUE 2013
-----------------------------------------------------
Ladies and Gentlemen:
I am issuing this letter in my capacity as Vice President and General
Counsel of White Mountains Insurance Group, Ltd., a company existing under the
laws of Bermuda (the "Company"), in response to the requirement in Section 5(c)
of the Underwriting Agreement, dated May 14, 2003 (the "Underwriting
Agreement"), among Fund American Companies, Inc. (the "Issuer") and the Company,
as Guarantor, on the one hand, and ▇▇▇▇▇▇ Brothers Inc., Banc of America
Securities LLC and Credit Suisse First Boston LLC as representatives of the
Underwriters on the other hand (herein referred to as "you"), relating to
$700,000,000 aggregate principal amount of the Issuer's 5.875% Senior Notes due
2013 (the "Senior Notes"). Every term which is defined in the Underwriting
Agreement and which is not given a different meaning in this letter has the same
meaning whenever it is used in this letter as the meaning it is given in the
Underwriting Agreement.
In connection with the preparation of this letter, I have, among other
things, read:
(a) the Registration Statement on Form S-3 (Registration No. 333-73012)
filed with the Securities and Exchange Commission (the "Commission") on November
8, 2001, for registration under the Securities Act of 1933 (the "Securities
Act") of $1,000,000,000 aggregate amount of various securities of the Fund
American Companies, Inc., to be issued from time to time by the Fund American
Companies, Inc. and guaranteed by the Company, as amended by Amendment No. 1
thereto filed with the Commission on December 10, 2001 (the "Registration
Statement");
(b) The prospectus supplement and prospectus dated May 14, 2003, filed with
the Securities and Exchange Commission on May 16, 2003 (together with the
Registration Statement, the "Prospectus");
(c) an executed original of the Underwriting Agreement; and
D-1
(d) a certified copy of resolutions adopted by the Board of Directors of
the Company on March 6, 2002.
Subject to the assumptions, qualifications and limitations that are
identified in this letter, I am of opinion as follows:
1. The Company is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction, within the United States,
in which the ownership or leasing of its properties or the conduct of its
business requires such qualification, other than jurisdictions in which the
failure to so qualify would not have a material adverse effect on the Company
and its subsidiaries taken as a whole.
2. To my knowledge, (a) there are not any pending or threatened actions,
suits or proceedings before any United States or New York court or governmental
agency or authority or any arbitrator against the Issuer or the Company of a
character required to be disclosed in the Registration Statement or Prospectus
which is not adequately disclosed as required, and (b) there is no contract,
indenture, mortgage, loan agreement, note, lease or other document of a
character required to be described in the Registration Statement or Prospectus,
or to be filed as an exhibit, which is not described or filed as required.
3. None of the issue and sale of the Senior Notes, the consummation of any
other of the transactions contemplated by the Underwriting Agreement or the
performance of the terms of the Underwriting Agreement will contravene, to my
knowledge, any order or decree of any United States or New York court or
government agency or instrumentality.
4. The documents incorporated by reference in the Prospectus, when they
were filed, complied in all material respects with the requirements of the
Securities Act and the Exchange Act, as applicable.
I make no representation that I have independently verified the accuracy,
completeness or fairness of the Prospectus or that the actions taken in
connection with the preparation of the Prospectus (including the actions
described in the next paragraph) were sufficient to cause the Prospectus to be
accurate, complete or fair. I am not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the Prospectus.
I have assumed for purposes of this letter: (i) each document I have
reviewed for purposes of this letter is accurate and complete; (ii) each such
document that is an original is authentic; (iii) each such document that is a
copy conforms to an authentic original; and (iv) all signatures on each such
document are genuine. I have also assumed that you have acted in good faith and
without notice of any fact which has caused you to reach any conclusions
contrary to any of the advice provided in this letter.
D-2
In preparing this letter, I have relied without independent verification
upon: (i) information contained in certificates obtained from governmental
authorities; (ii) factual information represented to be true in the Underwriting
Agreement and the Prospectus; (iii) factual information provided to me by the
Company; and (iv) factual information I have obtained from such other sources as
I have deemed reasonable in light of the matters set out in this opinion. For
purposes of numbered paragraph 1, I have relied exclusively upon certificates
issued by governmental authorities in the relevant jurisdictions and such
opinion is not intended to provide any conclusion or assurance beyond that
conveyed by those certificates. In rendering my opinion set forth in paragraphs
2 and 3, I did not review or survey any court dockets or the files of any
governmental agency.
I confirm that I do not have knowledge that has caused me to conclude that
my reliance and assumptions cited in the two immediately preceding paragraphs
are unwarranted. Whenever this letter provides advice about (or based upon) my
knowledge of any particular information or about any information which has or
has not come to my attention, such advice is based entirely on my knowledge at
the time this letter is delivered on the date it bears.
I am admitted to practice in the State of New York, and I express no
opinion as to any matters governed by any law other than the law of the State of
New York, the General Corporation Law of the State of Delaware and the Federal
law of the United States of America. In particular, I do not purport to pass on
any matter governed by the laws of Bermuda.
I am furnishing this opinion to you, as Representatives, solely for your
benefit and the benefit of the several Underwriters. This opinion may not be
relied upon by any other person (including any person that acquires the Senior
Notes from the several Underwriters) or for any other purpose or used,
circulated, quoted or otherwise referred to for any other purpose.
Sincerely,
▇▇▇▇▇▇ ▇▇▇▇▇▇
Vice President and General Counsel
White Mountains Insurance Group, Ltd.
D-3
EXHIBIT E
May 19, 2003
▇▇▇▇▇▇ Brothers Inc.
Banc of America Securities LLC
Credit Suisse First Boston LLC
as representatives of the Underwriters
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: OFFERING OF $700,000,000 5.875% SENIOR NOTES DUE 2013
-----------------------------------------------------
Ladies and Gentlemen:
I am issuing this letter in my capacity as Senior Vice President and
General Counsel for OneBeacon Insurance Company, a Pennsylvania corporation, in
response to the requirement in Section 5(d) of the Underwriting Agreement, dated
May 14, 2003 (the "Underwriting Agreement"), among Fund American Companies, Inc.
and White Mountains Insurance Group, Ltd. (the "Company"), as Guarantor, on the
one hand, and ▇▇▇▇▇▇ Brothers Inc., Banc of America Securities LLC and Credit
Suisse First Boston LLC as representatives of the Underwriters on the other hand
(herein referred to as "you"). Every term which is defined in the Underwriting
Agreement and which is not given a different meaning in this letter has the same
meaning whenever it is used in this letter as the meaning it is given in the
Underwriting Agreement. For the purposes of this opinion, the companies listed
at Schedule I are referred to as the "Group Companies".
In connection with the preparation of this letter, I have, among other
things, read:
(a) the Registration Statement on Form S-3 (Registration No. 333-73012)
filed with the Securities and Exchange Commission (the "Commission") on November
8, 2001, for registration under the Securities Act of 1933 (the "Securities
Act") of $1,000,000,000 aggregate amount of various securities of the Fund
American Companies, Inc., to be issued from time to time by the Fund American
Companies, Inc. and guaranteed by the Company, as amended by Amendment No. 1
thereto filed with the Commission on December 10, 2001 (the "Registration
Statement");
(b) The prospectus supplement and prospectus dated May 14, 2003, filed with
the Securities and Exchange Commission May 16, 2003 (together with the
Registration Statement, the "Prospectus");
E-1
(c) the Company's Annual Report on Form 10 K/A for the year ended December
31, 2002 (the "Annual Report");
(d) an executed original of the Underwriting Agreement; and
(e) a certified copy of resolutions adopted by the Board of Directors of
the Company on March 6, 2002.
Subject to the assumptions, qualifications and limitations that are
identified in this letter, I am of opinion as follows:
1. Each Group Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which the
ownership or leasing of its properties or the conduct of its business requires
such qualification, other than to the extent that the failure to be so qualified
or be in good standing would not have a Material Adverse Effect.
2. Each Group Company is a corporation validly existing and in good
standing under the laws of the jurisdiction of its incorporation, with full
corporate power and authority to own, lease and operate its properties and
conduct their business as described in the Prospectus, other than to the extent
that the failure to be so validly existing and in good standing or to have such
corporate power and authority would not, individually or in the aggregate, have
a Material Adverse Effect.
3. To my knowledge, after reasonable inquiry, there are no pending or
threatened legal or governmental proceedings against any Group Company except
for those matters disclosed in the Prospectus which, if determined adversely
would reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
4. The execution, delivery and performance of the Underwriting Agreement
(a) will not conflict with, result in a breach of, constitute a default or
create any charge, encumbrance or lien under the terms of any agreement or
instrument to which a Group Company is a party or bound other than to the extent
that the conflict, breach or default would not have a Material Adverse Effect
and (b) will not contravene the certificate of incorporation or by-laws of any
Group Company.
5. No authorization, approval or other action by, and no notice to, consent
of, order of, or filing with any state governmental authority or regulatory body
is required to be made by any of the Group Companies for the consummation of the
transactions contemplated by the Underwriting Agreement, except such as have
been obtained under the Act and such as may be required
E-2
under the blue sky laws of any jurisdiction in connection with the purchase and
distribution of the notes by the Underwriters.
6. The statements made in the Annual Report under the caption
"Business-Regulation" and in the prospectus supplement under the caption
"Business-OneBeacon-Terrorism", insofar as it purports to describe the
regulatory environment applicable to any of the Group Companies, fairly
summarize in all material respects the matters therein described.
I make no representation that I have independently verified the accuracy,
completeness or fairness of the Prospectus or that the actions taken in
connection with the preparation of the Prospectus (including the actions
described in the next paragraph) were sufficient to cause the Prospectus to be
accurate, complete or fair. I am not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the Prospectus.
I have assumed for purposes of this letter: (i) each document I have
reviewed for purposes of this letter is accurate and complete; (ii) each such
document that is an original is authentic; (iii) each such document that is a
copy conforms to an authentic original; and (iv) all signatures on each such
document are genuine. I have also assumed that you have acted in good faith and
without notice of any fact which has caused you to reach any conclusions
contrary to any of the advice provided in this letter.
In preparing this letter, I have relied without independent verification
upon: (i) information contained in certificates obtained from governmental
authorities; (ii) factual information represented to be true in the Underwriting
Agreement and the Prospectus; (iii) factual information provided to me by the
Company; and (iv) factual information I have obtained from such other sources as
I have deemed reasonable in light of the matters set out in this opinion. For
purposes of numbered paragraphs 1 and 2, I have relied exclusively upon
certificates issued by governmental authorities in the relevant jurisdictions
and such opinion is not intended to provide any conclusion or assurance beyond
that conveyed by those certificates. In rendering my opinion set forth in
paragraph 3, I did not review or survey any court dockets or the files of any
governmental agency.
I confirm that I do not have knowledge that has caused me to conclude that
my reliance and assumptions cited in the two immediately preceding paragraphs
are unwarranted. Whenever this letter provides advice about (or based upon) my
knowledge of any particular information or about any information which has or
has not come to my attention, such advice is based entirely on my knowledge at
the time this letter is delivered on the date it bears.
E-3
This letter speaks as of the time of its delivery on the date it bears. I
do not assume any obligation to provide you with any subsequent opinion or
advice by reason of any fact about which I did not have knowledge at that time,
by reason of any change subsequent to that time in any law other governmental
requirement or interpretation thereof covered by any of my opinions or advice,
or for any other reason. I am admitted to the Bar in the State of Massachusetts.
For purposes of rendering this opinion, I assume that no relevant difference
exists between the laws of the State of Massachusetts and the laws that may
govern the sale of the notes or the Prospectus.
This letter may be relied upon by the Underwriters only for the purpose
served by the provision in the Underwriting Agreement cited in the initial
paragraph of this letter in response to which it has been delivered. Without my
written consent: (i) no person other than the Underwriters may rely on this
letter for any purpose; (ii) this letter may not be cited or quoted in any
financial statement, offering circular, private placement circular or other
document; (iii) this letter may not be cited or quoted in any other document or
communication which might encourage reliance upon this letter by any person or
for any purpose excluded by the restrictions in this paragraph; and (iv) copies
of this letter may not be furnished to anyone for purposes of encouraging such
reliance.
Sincerely,
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President
and General Counsel
OneBeacon Insurance Company
E-4
SCHEDULE I
1. A.W.G. ▇▇▇▇▇, Inc.
2. American Central Insurance Company
3. American Employers' Insurance Company
4. Beacon Advertising Corporation
5. CU Lloyd's of Texas
6. General Assurance Company
7. Homeland Central Insurance Company
8. Homeland Insurance Company of New York
9. Houston General Insurance Company
10. Houston General Lloyds
11. National Farmers Union Property and Casualty Company
12. National Farmers Union Standard Insurance Company
13. OneBeacon America Insurance Company
14. OneBeacon Asset Management, Inc.
15. OneBeacon Finance Corporation
16. OneBeacon Insurance Company
17. OneBeacon Investors Co. #15
18. OneBeacon Investors Co. #16
19. OneBeacon Investors Co. #18
20. OneBeacon Investors Co. #21
21. OneBeacon Leasing, Inc.
22. OneBeacon Lloyd's Inc.
23. OneBeacon Midwest Insurance Company
24. OneBeacon Risk Management, Inc.
25. OneBeacon Services Corporation
26. Pennsylvania General Insurance Company
27. PG Insurance Company of New York
E-5
28. Potomac Insurance Company
29. Potomac Insurance Company of Illinois
30. TCH Insurance Agency, Inc.
31. The Camden Fire Insurance Association
32. The Northern Assurance Company of America
33. Traders & General Insurance Company
34. Traders & Pacific Insurance Company
35. United Security Insurance Company
36. Western States Insurance Company
37. York Insurance Company of Maine
E-6
EXHIBIT F
May 19, 2003
▇▇▇▇▇▇ Brothers Inc.
Banc of America Securities LLC
Credit Suisse First Boston LLC
as representatives of the Underwriters
c/▇ ▇▇▇▇▇▇ Brothers Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: OFFERING OF $700,000,000 5.875% SENIOR NOTES DUE 2013
-----------------------------------------------------
Ladies and Gentlemen:
I am issuing this letter in my capacity as Executive Vice President,
General Counsel & Secretary for Folksamerica Holding Company, Inc. a New York
corporation, in response to the requirement in Section 5(e) of the Underwriting
Agreement, dated May 14, 2003 (the "Underwriting Agreement"), among, Fund
American Companies, Inc. and White Mountains Insurance Group, Ltd. (the
"Company"), as Guarantor, on the one hand, and ▇▇▇▇▇▇ Brothers Inc., Banc of
America Securities LLC and Credit Suisse First Boston LLC as representatives of
the Underwriters on the other hand (herein referred to as "you"). Every term
which is defined in the Underwriting Agreement and which is not given a
different meaning in this letter has the same meaning whenever it is used in
this letter as the meaning it is given in the Underwriting Agreement. For the
purposes of this opinion, the companies listed at Schedule I are referred to as
the "Group Companies".
In connection with the preparation of this letter, I have, among other
things, read:
(a) the Registration Statement on Form S-3 (Registration No. 333-73012)
filed with the Securities and Exchange Commission (the "Commission") on November
8, 2001, for registration under the Securities Act of 1933 (the "Securities
Act") of $1,000,000,000 aggregate amount of various securities of the Fund
American Companies, Inc., to be issued from time to time by the Fund American
Companies, Inc. and guaranteed by the Company, as amended by Amendment No. 1
thereto filed with the Commission on December 10, 2001 (the "Registration
Statement");
(b) The prospectus supplement and prospectus dated May 14, 2003, filed with
the Securities and Exchange Commission on May 16, 2003 (together with the
Registration Statement, the "Prospectus");
F-1
(c) the Company's Annual Report on Form 10 K/A for the year ended December
31, 2002 (the "Annual Report");
(d) an executed original of the Underwriting Agreement; and
(e) a certified copy of resolutions adopted by the Board of Directors of
the Company on March 6, 2002.
Subject to the assumptions, qualifications and limitations that are
identified in this letter, I am of opinion as follows:
1. Each Group Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which the
ownership or leasing of its properties or the conduct of its business requires
such qualification, other than to the extent that the failure to be so qualified
or be in good standing would not have a Material Adverse Effect.
2. Each Group Company is a corporation validly existing and in good
standing under the laws of the jurisdiction of its incorporation, with full
corporate power and authority to own, lease and operate its properties and
conduct their business as described in the Prospectus, other than to the extent
that the failure to be so validly existing and in good standing or to have such
corporate power and authority would not, individually or in the aggregate, have
a Material Adverse Effect.
3. To my knowledge, after reasonable inquiry, there are no pending or
threatened legal or governmental proceedings against any Group Company except
for those matters disclosed in the Prospectus which, if determined adversely
would reasonably be expected, individually or in the aggregate, to have a
Material Adverse Effect.
4. The execution, delivery and performance of the Underwriting Agreement
(a) will not conflict with, result in a breach of, constitute a default or
create any charge, encumbrance or lien under the terms of any agreement or
instrument to which a Group Company is a party or bound other than to the extent
that the conflict, breach or default would not have a Material Adverse Effect
and (b) will not contravene the certificate of incorporation or by-laws of any
Group Company.
5. No authorization, approval or other action by, and no notice to, consent
of, order of, or filing with any state governmental authority or regulatory body
is required to be made by any of the Group Companies for the consummation of the
transactions contemplated by the Underwriting Agreement, except such as have
been obtained under the Act and such as may be required
F-2
under the blue sky laws of any jurisdiction in connection with the purchase and
distribution of the notes by the Underwriters.
6. The statements made in the Annual Report under the caption
"Business-Regulation", insofar as it purports to describe the regulatory
environment applicable to any of the Group Companies, fairly summarize in all
material respects the matters therein described.
I make no representation that I have independently verified the accuracy,
completeness or fairness of the Prospectus or that the actions taken in
connection with the preparation of the Prospectus (including the actions
described in the next paragraph) were sufficient to cause the Prospectus to be
accurate, complete or fair. I am not passing upon and do not assume any
responsibility for the accuracy, completeness or fairness of the Prospectus.
I have assumed for purposes of this letter: (i) each document I have
reviewed for purposes of this letter is accurate and complete; (ii) each such
document that is an original is authentic; (iii) each such document that is a
copy conforms to an authentic original; and (iv) all signatures on each such
document are genuine. I have also assumed that you have acted in good faith and
without notice of any fact which has caused you to reach any conclusions
contrary to any of the advice provided in this letter.
In preparing this letter, I have relied without independent verification
upon: (i) information contained in certificates obtained from governmental
authorities; (ii) factual information represented to be true in the Underwriting
Agreement and the Prospectus; (iii) factual information provided to me by the
Company; and (iv) factual information I have obtained from such other sources as
I have deemed reasonable in light of the matters set out in this opinion. For
purposes of numbered paragraphs 1 and 2, I have relied exclusively upon
certificates issued by governmental authorities in the relevant jurisdictions
and such opinion is not intended to provide any conclusion or assurance beyond
that conveyed by those certificates. In rendering my opinion set forth in
paragraph 3, I did not review or survey any court dockets or the files of any
governmental agency.
I confirm that I do not have knowledge that has caused me to conclude that
my reliance and assumptions cited in the two immediately preceding paragraphs
are unwarranted. Whenever this letter provides advice about (or based upon) my
knowledge of any particular information or about any information which has or
has not come to my attention, such advice is based entirely on my knowledge at
the time this letter is delivered on the date it bears.
This letter speaks as of the time of its delivery on the date it bears. I
do not assume any obligation to provide you with any subsequent opinion or
advice
F-3
by reason of any fact about which I did not have knowledge at that time,
by reason of any change subsequent to that time in any law other governmental
requirement or interpretation thereof covered by any of my opinions or advice,
or for any other reason. I am admitted to the Bar in the States of New Jersey
and Pennsylvania. For purposes of rendering this opinion, I assume that no
relevant difference exists between the laws of the States of New Jersey or
Pennsylvania and the laws that may govern the sale of the notes or the
Prospectus.
This letter may be relied upon by the Underwriters only for the purpose
served by the provision in the Underwriting Agreement cited in the initial
paragraph of this letter in response to which it has been delivered. Without my
written consent: (i) no person other than the Underwriters may rely on this
letter for any purpose; (ii) this letter may not be cited or quoted in any
financial statement, offering circular, private placement circular or other
document; (iii) this letter may not be cited or quoted in any other document or
communication which might encourage reliance upon this letter by any person or
for any purpose excluded by the restrictions in this paragraph; and (iv) copies
of this letter may not be furnished to anyone for purposes of encouraging such
reliance.
Sincerely,
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Executive Vice President
General Counsel & Secretary
Folksamerica Holding Company, Inc.
F-4
SCHEDULE I
--- ---------------------------------------------------------------------------
1. American Centennial Insurance Company
--- ---------------------------------------------------------------------------
2. British Insurance Company of Cayman
--- ---------------------------------------------------------------------------
3. C F Insurance Company
--- ---------------------------------------------------------------------------
4. Esurance, Inc.
--- ---------------------------------------------------------------------------
5. Folksamerica Holding Company, Inc.
--- ---------------------------------------------------------------------------
6. Folksamerica Reinsurance Company
--- ---------------------------------------------------------------------------
7. Folksamerica Specialty Underwriting Inc.
--- ---------------------------------------------------------------------------
8. IA Management Company
--- ---------------------------------------------------------------------------
9. Imperial Casualty & Indemnity Co.
--- ---------------------------------------------------------------------------
10. International American Management Company
--- ---------------------------------------------------------------------------
11. National Credit Plan Corp.
--- ---------------------------------------------------------------------------
12. Peninsula Indemnity Company
--- ---------------------------------------------------------------------------
13. Peninsula Insurance Company
--- ---------------------------------------------------------------------------
F-5