Exhibit 10.5

EXECUTION VERSION

LIMITED WAIVER AND AMENDMENT AGREEMENT

THIS LIMITED WAIVER AND AMENDMENT AGREEMENT, dated as of March 3, 2013 (this
“Agreement”) is between Tower Group, Inc., a Delaware corporation (the
“Borrower”), each lender party hereto (collectively, the “Lenders” and
individually, a “Lender”), and Bank of America, N.A., as Administrative Agent,
Fronting Bank and L/C Administrator (“Bank of America”).

WHEREAS, the Borrower, the Lenders and Bank of America are parties to the
Amended and Restated Credit Agreement, dated as of February 15, 2012 (as
amended, the “Credit Agreement”). Terms defined in the Credit Agreement are,
unless otherwise defined herein or the context otherwise requires, used herein
as defined therein.

WHEREAS, the Borrower has given notice to the Administrative Agent and the
Lenders that as of December 31, 2012 it was not in compliance with
Section 7.10(c) of the Credit Agreement, and such non-compliance constitutes an
Event of Default pursuant to Section 8.01(b) of the Credit Agreement (the “RBC
Default”).

WHEREAS, the Lenders have agreed to waive the RBC Default but only pursuant to
and upon the terms and conditions of this Agreement (the “Limited Waiver”).
Consistent with the foregoing, nothing contained herein is intended or shall be
deemed to constitute an acknowledgment, representation, warranty, covenant, or
other agreement on the part of the Lenders that they have agreed or they will
agree (i) to enter into any amendment to the Credit Agreement and the other Loan
Documents on any terms and conditions other than as set forth herein or (ii) to
any waiver relating to any Default or Event of Default other than the RBC
Default.

NOW, THEREFORE, in consideration of the premises and for other good and valuable
consideration (the receipt and sufficiency of which are hereby acknowledged),
the parties hereto agree as follows:

1. LIMITED WAIVER. Subject to the terms and conditions of this Agreement, the
Lenders hereby agree to, and extend to the Borrower, the Limited Waiver, it
being initially effective upon the effectiveness of this Agreement pursuant to
the provisions of Section 6 hereof; provided that the Risk Based Capital Ratio
of Tower Insurance Company of New York is at least 153% as of December 31, 2012.

2. ADDITIONAL COVENANTS.

2.1 Notices from Applicable Insurance Regulatory Authority. The Borrower shall
promptly provide the Administrative Agent with a copy of any notice of
disapproval or other communication from the Applicable Insurance Regulatory
Authority with respect to the proposed amendments to become effective as of
January 1, 2013 to the pooling and reinsurance agreements of the Borrower and
its Affiliates that would result in a pro forma Risk Based Capital Ratio for
Tower Insurance Company of New York of at least 175% (the “Pooling Amendments”).

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2.2 Notice to Holders of Convertible Securities. The Borrower will not provide a
notice to any holder of Convertible Securities with respect to the optional
tender arising from the Merger that would require payment to be made to such
holders before April 9, 2013.

3. EVENTS OF DEFAULT. Any of the following shall be an Event of Default under
the Credit Agreement: (a) the Borrower fails to comply with either of the
covenants set forth in Section 2 of this Agreement, (b) any representation,
warranty, certification or statement of fact made or deemed made by or on behalf
of the Borrower or any Subsidiary herein shall be incorrect or misleading when
made or deemed made or (c) the Pooling Amendments shall have been disapproved by
the Applicable Insurance Regulatory Authority and on or before April 5, 2013,
the Borrower shall not have delivered to the Administrative Agent a pro forma
calculation in form satisfactory to the Administrative Agent demonstrating that
the Risk Based Capital Ratio of Tower Insurance Company of New York as of
March 31, 2013 is at least 175%.

4. MODIFICATION TO SECOND AMENDMENT. Notwithstanding anything set forth in the
Second Amendment to Credit Agreement and Consent, dated as of November 26, 2012
(as amended pursuant to the extension letter dated as of January 23, 2013, the
“Second Amendment”) among the Borrower, the Lenders and Bank of America, in
addition to the conditions set forth in Section 2.2 of the Second Amendment, the
replacement of Schedule 2.01 to the Credit Agreement (the increase in
Commitments) set forth in Section 2.01(d) of the Second Amendment shall not
become effective until (i) the Pooling Amendments shall have been deemed
approved, or if disapproved by the Applicable Insurance Regulatory Authority,
the Borrower shall have delivered to the Administrative Agent a pro forma
calculation in form satisfactory to the Administrative Agent demonstrating that
the Risk Based Capital Ratio of Tower Insurance Company of New York as of
March 31, 2013 is at least 175% and (ii) this Agreement shall have been executed
and delivered by all Lenders.

5. REAFFIRMATION. All provisions of the Credit Agreement and the other Loan
Documents shall continue in full force and effect in accordance with the
provisions thereof, and the Borrower reaffirms all its agreements under the
Credit Agreement and the Loan Documents, notwithstanding the occurrence of the
RBC Default.

6. CONDITIONS TO EFFECTIVENESS. This Agreement will be effective once this
Agreement shall have been executed and delivered by the Borrower, the
Administrative Agent, and the Required Lenders.

7. REPRESENTATIONS AND WARRANTIES. To induce the Lenders and the Administrative
Agent to enter into this Agreement, the Borrower represents and warrants to the
Administrative Agent and each Lender as follows:

7.1 Due Authorization, Non-Contravention, etc. The execution, delivery and
performance of this Agreement by the Borrower are within its powers, have been
duly authorized by all necessary action, and do not:

(a) contravene its Organization Documents;

(b) contravene any contractual restriction, law or governmental regulation or
court decree or order binding on or affecting the Borrower or any of its
Subsidiaries; or

 

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(c) result in, or require the creation or imposition of, any Lien on any of the
properties of the Borrower or any of its Subsidiaries.

7.2 Defaults. The RBC Default is the only Default or Event of Default that has
occurred and is continuing.

7.3 Credit Agreement Representations and Warranties. The representations and
warranties set forth in Article VI of the Credit Agreement are true and correct
with the same effect as if made as of the date hereof (unless stated to relate
solely to an earlier date, in which case such representations and warranties
shall be true and correct as of such earlier date).

7.4 Risk Based Capital Ratio. The Risk Based Capital Ratio of Tower Insurance
Company of New York as of December 31, 2012 is at least 153%.

7.5 Filing. The necessary filing with the Applicable Insurance Regulatory
Authority with respect to the Pooling Amendments has been made, and the Pooling
Amendments shall be deemed approved if the Applicable Insurance Regulatory
Authority has not disapproved such Pooling Amendments on or prior to April 5,
2013.

7.6 Validity, etc. This Agreement constitutes the legal, valid and binding
obligation of the Borrower enforceable against the Borrower in accordance with
its terms.

8. MISCELLANEOUS.

8.1 Limited Waiver; Continuing Effectiveness, etc. This Agreement shall be
strictly limited to its terms. In this Agreement, the Lenders waive no Default
or Event of Default, whether presently or subsequently existing except for the
RBC Default. This Agreement shall be deemed to be an amendment to the Credit
Agreement, and the Credit Agreement, as amended hereby, shall remain in full
force and effect and is hereby ratified, approved and confirmed in each and
every respect. After the amendments set forth herein have become effective, all
references to the Credit Agreement in the Loan Documents or in any other
document, instrument, agreement or writing shall be deemed to refer to the
Credit Agreement as amended hereby. Each other Loan Document is hereby ratified,
approved and confirmed in each and every respect.

8.2 Payment of Costs and Expenses. The Borrower agrees to pay on demand all
reasonable expenses of the Administrative Agent (including the reasonable fees
and out-of-pocket expenses of counsel to the Administrative Agent) in connection
with the negotiation, preparation, execution and delivery of this Agreement and
the transactions contemplated hereby.

8.3 Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such provision and such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.

8.4 Headings. The various headings of this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of this
Agreement or any provisions hereof.

 

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8.5 Execution in Counterparts. This Agreement may be executed by the parties
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.

8.6 Governing Law. THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK.

8.7 Successors and Assigns. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
assigns.

[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.

 

TOWER GROUP, INC. By:  

/s/ William E. Hitselberger

Name:  

William E. Hitselberger

Title:  

EVP and CFO

Limited Waiver and Amendment Agreement

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BANK OF AMERICA, N.A., as

Administrative Agent, L/C Administrator, Fronting Bank and Lender

By:  

/s/ Tiffany Burgess

Name:  

Tiffany Burgess

Title:  

Vice President

Limited Waiver and Amendment Agreement

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JPMORGAN CHASE BANK, N.A. By:  

/s/ Hector J. Varona

Name:  

Hector J. Varona

Title:  

Vice President

Limited Waiver and Amendment Agreement

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KEYBANK NATIONAL ASSOCIATION By:  

/s/ Wayne K. Guessfond

Name:  

Wayne K. Guessfond

Title:  

Sr. Vice President

Limited Waiver and Amendment Agreement

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PNC BANK, NATIONAL ASSOCIATION By:  

/s/ Gustavus A. Bahr

Name:  

Gustavus A. Bahr

Title:  

Senior Vice President

Limited Waiver and Amendment Agreement

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WELLS FARGO BANK, N.A. By:  

/s/ Robert P. Callahan, Jr.

Name:  

Robert P. Callahan, Jr

Title:  

Director

Limited Waiver and Amendment Agreement

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THE NORTHERN TRUST COMPANY By:  

/s/ Chris McKean

Name:  

Chris McKean

Title:  

Senior Vice President

Limited Waiver and Amendment Agreement