Exhibit 10.2.3


 


[EXECUTION COPY]


 


THIRD AMENDMENT TO CREDIT AGREEMENT


 


This THIRD AMENDMENT TO CREDIT
AGREEMENT, dated as of December 12, 2008 (this “Amendment”),
among (i) WHITE MOUNTAINS INSURANCE
GROUP, LTD., a company existing under the laws of Bermuda (the “Borrower”),
(ii) the undersigned Lenders, and (iii) BANK OF AMERICA, N.A., as administrative agent for the Lenders
(in such capacity, the “Administrative Agent”), amends certain
provisions of the Credit Agreement, dated as of June 19, 2007 (as amended,
the “Credit Agreement”), among the Borrower, the Lenders, Bank of
America, N.A., as Administrative Agent, Swing Line Lender and the Issuing
Lender, and Lehman Brothers Inc., as Syndication Agent.  Capitalized terms used herein without definition
shall have the meanings assigned to such terms in the Credit Agreement.


 


RECITALS


 


WHEREAS, the
Borrower has requested that the undersigned Lenders and the Administrative
Agent agree to amend certain of the terms and provisions of the Credit
Agreement, as specifically set forth in this Amendment; and


 


WHEREAS, the
undersigned Lenders and the Administrative Agent are prepared to amend the
Credit Agreement on the terms, subject to the conditions and in reliance on the
representations set forth herein;


 


NOW THEREFORE, in
consideration of the mutual agreements contained in the Credit Agreement and
herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
as follows:


 


Section 1.                                          Amendment to Credit Agreement.


 


(a)                                  Amendments
to Section 1.1 (Defined Terms). 
Section 1.1 of the Credit Agreement is hereby amended by restating
the following definitions contained in such Section in their entirety as
follows:


 


“Applicable Margin” means the applicable percentage per annum
set forth below corresponding to the Total Consolidated Debt to Total
Consolidated Capitalization Ratio as of the most recent fiscal quarter of the
Borrower for which a Compliance Certificate has been or is required to have
been delivered pursuant to Section 6.2(b):


 


	
  Pricing

  Level

  	
   

  	
  Total Consolidated Debt

  to Total Consolidated

  Capitalization Ratio

  	
   

  	
  Applicable Margin

  for

  Eurodollar Loans

  	
   

  	
  Applicable Margin

  for

  Base Rate Loans

  	
   

  
	
  I

  	
   

  	
  < 10.0%

  	
   

  	
  1.320

  	
  %

  	
  0.320

  	
  %

  
	
  II

  	
   

  	
  > 10.0% < 15.0%

  	
   

  	
  1.550

  	
  %

  	
  0.550

  	
  %

  



 

















 


	
  III

  	
   

  	
  > 15.0% < 22.5%

  	
   

  	
  1.775

  	
  %

  	
  0.775

  	
  %

  
	
  IV

  	
   

  	
  > 22.5% < 30.0%

  	
   

  	
  2.075

  	
  %

  	
  1.075

  	
  %

  
	
  V

  	
   

  	
  > 30.0%

  	
   

  	
  2.600

  	
  %

  	
  1.600

  	
  %

  



 


The Applicable Margin in effect from the Third Amendment Effective Date
through the first Business Day immediately following the date the first
Compliance Certificate is delivered to the Administrative Agent pursuant to Section 6.2(b),
shall be the Applicable Margin set forth in pricing level III.  Any increase or decrease in the Applicable
Margin resulting from a change in the Total Consolidated Debt to Total
Consolidated Capitalization Ratio, as set forth on a Compliance Certificate
delivered pursuant to Section 6.2(b), shall become effective as of
the first Business Day immediately following delivery of such Compliance Certificate;
provided, however, that if a Compliance Certificate is not
delivered when due in accordance with Section 6.2(b), then the
level V Applicable Margin shall apply as of the first Business Day after the
date on which such Compliance Certificate was required to have been delivered
until the first Business Day after the date on which such Compliance
Certificate is delivered.


 


“Base Rate” means, for any day, a fluctuating rate per annum
equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the
rate of interest in effect for such day as publicly announced from time to time
by Bank of America, N.A. as its “prime rate,” and (c) the Eurodollar Rate
for a one-month Interest Period in effect for such day (or if such day is not a
Business Day, the immediately preceding Business Day) plus 1%.  The “prime rate” is a rate set by Bank of
America, N.A. based upon various factors including Bank of America, N.A.’s
costs and desired return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be priced at,
above, or below such announced rate.  Any
change in the Base Rate due to a change in any of the foregoing shall take
effect at the opening of business on the day specified in the public announcement
of such change.


 


“Consolidated Net Income” means, (a) for any period ending
on or before December 31, 2007, the consolidated net income (or loss) of
the Borrower and its consolidated Subsidiaries for such period, determined on a
consolidated basis in accordance with GAAP; provided, however,
that in calculating Consolidated Net Income for any period ending on or before December 31,
2007, there shall be excluded for purposes of the calculation of Consolidated
Net Income (x) the income (or deficit) of any Person accrued prior to the
date it becomes a Subsidiary of the Borrower or is merged into or consolidated
with the Borrower or any of its Subsidiaries and (y) any effects resulting from the application of
FIN 46R, and (b) for any period ending after December 31,
2007, the consolidated net income (or loss) of the Borrower and its
consolidated Subsidiaries for such period, determined on a consolidated basis
in accordance with GAAP; provided, however, that in calculating
Consolidated Net Income for any period ending after December 31, 2007,
there shall be excluded for purposes of the calculation of Consolidated Net
Income (x) the income (or deficit) of any Person accrued prior to the date
it becomes a Subsidiary of the Borrower or is merged into or consolidated with
the Borrower or any of its Subsidiaries, (y) any effects resulting from
the application of FIN


 


2

















 


46R, and (z) the
net unrealized investment gain (or loss), less applicable related income tax
provisions (or plus applicable related income tax benefits), included in the
consolidated net income (or loss) of the Borrower.


 


“Consolidated Net Worth” means, (a) as at any date
occurring on or before December 31, 2007, the sum of all amounts that
would, in conformity with GAAP be included on a consolidated balance sheet of
the Borrower and its consolidated Subsidiaries under stockholders’ equity at
such date, plus minority interests in Subsidiaries, as determined in accordance
with GAAP; provided, however, that in calculating Consolidated
Net Worth as at any date occurring on or before December 31, 2007, there shall be excluded for purposes of the
calculation of Consolidated Net Worth any effects resulting from (x) SFAS
115 or (y) the application of FIN
46R, and (b) as at any date occurring after December 31, 2007,
the sum of all amounts that would, in
conformity with GAAP be included on a consolidated balance sheet of the
Borrower and its consolidated Subsidiaries under the stockholders’ equity at
such date, plus minority interest in Subsidiaries, as determined in accordance
with GAAP; provided, however, that in calculating Consolidated
Net Worth as of any date occurring after December 31, 2007, there shall be excluded for purposes of the
calculation of Consolidated Net Worth any effects resulting from (x) the
accumulated net unrealized gain on investments as of December 31, 2007, (y) the
net unrealized investment gain (or loss), less the net unrealized foreign
exchange gains (or losses) on investments, less applicable related income tax
provisions (or plus applicable related income tax benefits), included in the
consolidated net income (or loss) of the Borrower and (z) equity in
unrealized losses from investments in unconsolidated affiliates.


 


“Facility Fee Rate” means the applicable
percentage per annum set forth below corresponding to the Total Consolidated
Debt to Total Consolidated Capitalization Ratio as of the most recent fiscal
quarter of the Borrower for which a Compliance Certificate has been or is required
to have been delivered pursuant to Section 6.2(b):


 


	
  Pricing

  Level

  	
   

  	
  Total Consolidated Debt to Total

  Consolidated Capitalization Ratio

  	
   

  	
  Facility Fee Rate

  	
   

  
	
  I

  	
   

  	
  < 10.0%

  	
   

  	
  0.180

  	
  %

  
	
  II

  	
   

  	
  > 10.0% < 15.0%

  	
   

  	
  0.200

  	
  %

  
	
  III

  	
   

  	
  > 15.0% < 22.5%

  	
   

  	
  0.225

  	
  %

  
	
  IV

  	
   

  	
  > 22.5% < 30.0%

  	
   

  	
  0.300

  	
  %

  
	
  V

  	
   

  	
  > 30.0%

  	
   

  	
  0.400

  	
  %

  



 


The Facility Fee Rate in effect from the Third Amendment Effective Date
through the first Business Day immediately following the date the first
Compliance Certificate is delivered to the Administrative Agent pursuant to Section 6.2(b),
shall be the Facility Fee Rate set forth in pricing level III.  Any increase or decrease in the Facility Fee
Rate resulting from a change in the Total Consolidated Debt to Total
Consolidated


 


3

















 


Capitalization
Ratio, as set forth on a Compliance Certificate delivered pursuant to Section 6.2(b),
shall become effective as of the first Business Day immediately following
delivery of such Compliance Certificate; provided, however, that
if a Compliance Certificate is not delivered when due in accordance with Section 6.2(b),
then the level V Facility Fee Rate shall apply as of the first Business Day
after the date on which such Compliance Certificate was required to have been
delivered until the first Business Day after the date on which such Compliance
Certificate is delivered.


 


“GAAP” means generally accepted accounting principles in the
United States of America as in effect from time to time and set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or such other principles as may be
approved by a significant segment of the accounting profession in the United
States, except that for purposes of Section 7.1, GAAP shall be
determined on the basis of such principles in effect on the date hereof; provided,
that, for the purpose of determining Consolidated Net Income and
Consolidated Net Worth, for any period ending after December 31, 2007 or
for any date after December 31, 2007, as applicable, GAAP shall be
determined on the basis of such principles in effect on January 1, 2008.


 


(b)                                 Amendments
to Section 1.1 (Defined Terms). 
Section 1.1 of the Credit Agreement is hereby further amended by
inserting the following new definitions in such Section 1.1 in the
appropriate alphabetical order:


 


“Common Stock Exchange Amount” means $515,100,000, which amount
is an amount equal to sixty-five percent (65%) of the aggregate amount of
consideration exchanged by the Borrower for Capital Stock of the Borrower owned
by Berkshire Hathaway pursuant that certain  Exchange
Agreement, dated as of March 8, 2008 (as amended and otherwise modified
from time to time), between the Borrower, Berkshire Hathaway, and the other
parties thereto.


 


“Impacted Lender” means a Defaulting Lender or a Lender (a) as
to which an entity that controls such Lender has become insolvent or become
subject to a bankruptcy or other similar proceeding or (b) which has
defaulted in fulfilling, and continues to remain in default in fulfilling, its
obligations under one or more other credit facilities.


 


“Lehman Commitment Reduction Amount” means, as of any date, an
amount equal to (x) $57,500,000 minus (y) the Revolving Credit
Commitment of Lehman Brothers Bank, FSB on such date.


 


“Risk Participation Cash Collateral” means, with respect to any
Letter of Credit, the pledge and deposit with or delivery to the Administrative
Agent of, for the benefit of the Issuing Lender, as collateral, cash or deposit
account balances in an amount equal to (x) the Revolving Credit Percentage
of each Impacted Lender times (y) the amount available to be drawn under
such Letter of Credit, pursuant to documentation in


 


4

















 


form and
substance reasonably satisfactory to the Administrative Agent and the Issuing
Lender (which documents are hereby consented to by the Lenders).


 


“Third Amendment Effective Date” means December 12, 2008.


 


(c)                                  Amendments
to Section 2.3 (Swing Line Commitment).  Paragraph (a) of Section 2.3 of the
Credit Agreement is hereby amended by restating the proviso contained in such
paragraph (a) in its entirety as follows:


 


provided that (i) all Swing Line Loans shall
be made at the sole and absolute discretion of the Swing Line Lender, (ii) the
aggregate principal amount of Swing Line Loans outstanding at any time shall
not exceed the Swing Line Commitment then in effect (notwithstanding that the
Swing Line Loans outstanding at any time, when aggregated with the Swing Line
Lender’s other outstanding Revolving Credit Loans hereunder, may exceed the
Swing Line Commitment then in effect or such Swing Line Lender’s Revolving
Credit Commitment then in effect), and (iii) the Borrower shall not
request, and the Swing Line Lender shall not make, any Swing Line Loan if,
after giving effect to the making of such Swing Line Loan, the aggregate amount
of the Available Revolving Credit Commitments would be less than zero.


 


(d)                                 Amendments
to Section 2.4 (Procedure for Swing Line Borrowing; Refunding of Swing
Line Loans).  Paragraph (a) of Section 2.4
of the Credit Agreement is hereby amended by:


 


(i)                                     restating
the third sentence contained in such paragraph (a) in its entirety as follows:


 


If the Swing
Line Lender shall elect to fund a requested Swing Line Loan, not later than
3:00 P.M., New York City time, on the Borrowing Date specified in the
borrowing notice in respect of such Swing Line Loan, the Swing Line Lender
shall make available to the Administrative Agent at the Administrative Agent’s
Office an amount in immediately available funds equal to the amount of such
Swing Line Loan.


 


(ii)                                  inserting
the following new sentence immediately following the last sentence contained in
such paragraph (a):


 


Notwithstanding
the foregoing, if the Swing Line Lender shall elect not to fund a requested
Swing Line Loan for any reason, the Swing Line Lender shall promptly, and in
any event not later than 3:00 P.M., New York City time, on the date that
the borrowing notice in respect of such Swing Line Loan is received, notify the
Borrower and the Administrative Agent of such election.


 


(e)                                  Amendments
to Section 2.11 (Interest Rates and Payment Dates).  Paragraphs (a) and (b) of Section 2.11
of the Credit Agreement are hereby amended by restating such paragraphs (a) and
(b) in their entirety as follows:


 


5

















 


(a)                                  Subject
to the provisions of paragraph (c) below, each Eurodollar Loan
shall bear interest on the outstanding principal amount thereof for each day
during each Interest Period with respect thereto at a rate per annum equal to
the Eurodollar Rate determined for such day plus the Applicable Margin for
Eurodollar Loans.


 


(b)                                 Each
Base Rate Loan, including Swing Line Loans, shall bear interest on the
outstanding principal amount thereof from the applicable borrowing date at a
rate per annum equal to the Base Rate plus the Applicable Margin for Base Rate
Loans.


 


(f)                                    Amendments
to Section 2.22(a) (Request for Increase).  Section 2.22(a) of the Credit
Agreement is hereby amended by restating such Section 2.22(a) in its
entirety as follows:


 


(a)                                  Request
for Increase.  Upon notice to the
Administrative Agent (which shall promptly notify the Lenders), the Borrower
may from time to time, increase the Total Revolving Credit Commitments by an
amount not to exceed (x) $25,000,000, plus (y) the Lehman Commitment
Reduction Amount, minus (z) the aggregate amount of all prior increases of
the Total Revolving Credit Commitment pursuant to this Section 2.22.  Such increase in the Total Revolving Credit
Commitments may be provided by the Lenders or Eligible Assignees designated by
the Borrower to become Lenders (pursuant to an instrument of accession in the
form of Exhibit I hereto, an “Instrument of Accession”) that are willing
to provide such increase; provided that (i) any such increase shall be in
a minimum amount of $10,000,000 and (ii) the aggregate amount of the Total
Revolving Credit Commitments after giving effect to any such increase shall not
at any time exceed $500,000,000.  Nothing
contained herein shall constitute, or otherwise be deemed to be, a commitment
on the part of any Lender to increase its Revolving Credit Commitment
hereunder.


 


(g)                                 Amendments
to Section 3.1 (L/C Commitment). 
Paragraph (b) of Section 3.1 of the Credit Agreement is hereby
amended by restating such paragraph (b) in its entirety as follows:


 


(b)                                 No Issuing Lender shall at any time
be obligated to issue any Letter of Credit hereunder if (i) such issuance
would conflict with, or cause the Issuing Lender or any L/C Participant to
exceed any limits imposed by, any applicable Requirement of Law, (ii) such
issuance would violate one or more policies of the Issuing Lender applicable to
letters of credit generally, (iii) any order, judgment or decree of any
Governmental Authority or arbitrator shall by its terms purport to enjoin or
restrain the Issuing Lender from issuing such Letter of Credit, or any Law
applicable to the Issuing Lender or any request or directive (whether or not
having the force of Law) from any Governmental Authority with jurisdiction over
the Issuing Lender shall prohibit, or request that the Issuing Lender refrain
from, the issuance of letters of credit generally, or such Letter of Credit in
particular, or (iv) any Lender is at such time an Impacted Lender, unless
such Issuing Lender has entered into arrangements (including, without
limitation, arrangements for the provision of Risk Participation Cash
Collateral) with the Borrower


 


6

















 


or such Impacted Lender which are
satisfactory to such Issuing Lender to eliminate the Issuing Lender’s risk with
respect to such Impacted Lender; provided, that, if the Borrower
provides Risk Participation Cash Collateral with respect to a Letter of Credit
requested to be issued hereunder, the Issuing Lender shall not be entitled to
rely upon the preceding clause (iv) as justification for not issuing such
Letter of Credit.  To the extent that the
Borrower provides Risk Participation Cash Collateral, the Borrower hereby
grants to the Administrative Agent, for the benefit of the Issuing Lender, a
security interest in all cash, deposit accounts and all balances therein and
all proceeds of the foregoing solely as security for the purposes described
under Section 3.3(b) hereof. 
Such Risk Participation Cash Collateral shall be maintained in blocked,
interest bearing deposit accounts with the Administrative Agent (with interest
on such amounts so deposited accruing for the account of the Borrower); provided
that (1) in the event that any Lender, on account of whom such Risk
Participation Cash Collateral was delivered, shall no longer be an Impacted
Lender, the Administrative Agent shall return to the Borrower such portion of
Risk Participation Cash Collateral attributable to such Lender together with
accrued and unpaid interest thereon, (2) in the event that any Lender, on
account of whom such Risk Participation Cash Collateral was delivered, shall
have its Revolving Credit Commitment reduced, the Administrative Agent shall
return to the Borrower such portion of the Risk Participation Cash Collateral
attributable to such Lender in proportion to the amount by which such Lender’s
Revolving Credit Commitment is so reduced together with accrued and unpaid
interest thereon, and (3) in the event that the applicable Letter of
Credit, on account of which such Risk Participation Cash Collateral was
delivered, expires or is drawn upon, and such drawing has been reimbursed by
the Borrower, the Administrative Agent shall return to the Borrower such
portion of the Risk Participation Cash Collateral attributable to such expired
Letter of Credit or such reimbursed drawing, as applicable, together with
accrued and unpaid interest thereon.


 


(h)                                 Amendments
to Section 3.3 (Drawings and Reimbursements; Funding of Participations).  Paragraph (b) of Section 3.3 of the
Credit Agreement is hereby amended by restating such paragraph (b) in its
entirety as follows:


 


(b)                                 Each
Lender (including the Lender acting as Issuing Lender) shall upon any notice
pursuant to Section 3.3(a) make funds available to the
Administrative Agent for the account of the Issuing Lender at the
Administrative Agent’s Office in an amount equal to its Revolving Credit
Percentage of the Unreimbursed Amount not later than 1:00 P.M., New York
City time, on the Business Day specified in such notice by the Administrative
Agent, whereupon, subject to the provisions of Section 3.3(a), each
Lender that so makes funds available shall be deemed to have made a Base Rate
Loan to the Borrower in such amount; provided, however, that if
any Impacted Lender shall fail to make such funds available, any Risk
Participation Cash Collateral delivered on account of such Impacted Lender for
the respective Letter of Credit shall be applied by the Administrative Agent to
the reimbursement of the Issuing Lender as required hereunder.  The Administrative Agent shall remit the
funds so received and any Risk Participation Cash Collateral so applied to the
Issuing Lender.


 


7

















 


If at any time after the Issuing Lender has been reimbursed hereunder
for any portion of any Letter of Credit with the proceeds of Risk Participation
Cash Collateral and the Administrative Agent subsequently receives from the
relevant Impacted Lender such Impacted Lender’s L/C Advance (or any portion
thereof) in respect of such payment in accordance with this Section 3.3(b),
the Administrative Agent shall distribute to the Borrower the proceeds of such
L/C Advance (or portion thereof) in the same funds as those received by the
Administrative Agent.


 


(i)                                     Amendments
to Section 7.1(a) (Maintenance of Consolidated Net Worth).  Section 7.1(a) of the Credit
Agreement is hereby amended by restating such Section in its entirety as
follows:


 


(a)                                  Maintenance
of Consolidated Net Worth.  The
Borrower shall not permit its Consolidated Net Worth, as of the end of any
fiscal quarter, commencing with the first fiscal quarter ending after the
Closing Date, to be less than an amount equal to (i) sixty-five percent
(65%) of Consolidated Net Worth of the Borrower as at the fiscal quarter ended March 31,
2007 (provided that if OneBeacon Limited is not consolidated on a balance sheet
of the Borrower in accordance with GAAP as of the end of any such fiscal
quarter after the fiscal quarter ended March 31, 2007, the amount in this clause
(i) shall be adjusted to remove sixty-five percent (65%) of the
OneBeacon Limited minority interests at March 31, 2007), plus (ii) fifty
percent (50%) of positive Consolidated Net Income for each fiscal quarter
ending after March 31, 2007, minus (iii) the Common Stock
Exchange Amount.


 


(j)                                     Amendments
to Section 7.2 (Limitations on Indebtedness).  Section 7.2 of the Credit Agreement is
hereby amended by:


 


(i)                                     deleting
the words “(other than OneBeacon Limited and its Subsidiaries)” contained in
the first sentence of paragraph (a) of such Section 7.2;


 


(ii)                                  restating
paragraph (b) of such Section 7.2 in its entirety as follows:


 


(b)                                 [Reserved.]


 


Section 2.                                          Consent
to Non-Pro Rata Reduction in Commitments.


 


(a)                                  Initial Commitment
Reduction.  The
Borrower, each Lender and the Administrative Agent hereby agree that,
notwithstanding anything to the contrary contained in Sections 2.7 or 2.14 of
the Credit Agreement, on the Third Amendment Effective Date (x) the
aggregate Revolving Credit Commitments shall be reduced by an amount equal to
$33,289,473.69 (the “Initial Commitment Reduction Amount”), and (y) such
Initial Commitment Reduction Amount shall be applied in full, on a non-pro rata
basis, to reduce the Revolving Credit Commitment of Lehman Brothers Bank, FSB (“Lehman
FSB”) to $24,210,526.31.  As of the
Third Amendment Effective Date, Schedule 1 (Commitment Schedule) to the Credit
Agreement shall be replaced in its entirety with Schedule 1 attached
hereto.


 


8

















 


(b)                                 Subsequent
Commitment Reductions.  The Borrower,
each Lender and the Administrative Agent hereby agree that, notwithstanding anything
to the contrary contained in Sections 2.7 or 2.14 of the Credit Agreement, at
any time the Revolving Credit Commitment of Lehman FSB exceeds the Revolving
Credit Loans of Lehman FSB then outstanding, the Borrower may elect, upon three
Business Days’ prior written notice to the Administrative Agent, to (x) reduce
the aggregate Revolving Credit Commitments by an amount up to the amount of
such excess (such elected reduction amount being hereinafter referred to as a “Subsequent
Lehman Reduction Amount”), and (y) apply such Subsequent Lehman
Reduction Amount in full, on a non-pro rata basis, to reduce the Revolving
Credit Commitment of Lehman FSB; provided that (i) no Default
exists or would result therefrom, (ii) Lehman FSB is then a Defaulting
Lender and (iii) such reduction would not violate applicable Law
(including, without limitation, any stay or moratorium imposed under any Debtor
Relief Law or proceeding instituted by the Federal Deposit Insurance
Corporation).  The Borrowers and the
Lenders hereby agree that the Administrative Agent shall be permitted to update
Schedule 1 (Commitment Schedule) to the Credit Agreement (as amended pursuant
to paragraph (a) above) from time to time to reflect any reduction in the
Revolving Credit Commitments pursuant to this paragraph (b).


 


Section 3.                                          Conditions
Precedent.  This Amendment shall
become effective as of the date first written above upon (a) execution
hereof by the Borrower, the Guarantors, the Administrative Agent and the
Majority Lenders (other than each Defaulting Lender), (b) the
Administrative Agent’s receipt, for the account of each Lender (other than each
Defaulting Lender) which provides written consent to this Amendment on or prior
to 5:00 p.m. (New York City time) on December 12, 2008, a fee in the
amount of 15 basis points times the Revolving Credit Commitment of such Lender,
which fee shall be deemed fully earned and non-refundable upon receipt thereof,
(c) the Administrative Agent’s receipt of evidence (including, without
limitation, any notice for the termination of commitments and any payoff
letters), reasonably satisfactory to the Administrative Agent, that the Credit
Agreement, dated as of November 14, 2006 (as amended), among OneBeacon
U.S. Holdings, Inc. (f/k/a Fund American Companies, Inc.), OneBeacon
Insurance Group, Ltd., the lenders party thereto, Bank of America, N.A., as
administrative agent, swing line lender and the issuing lender, and Lehman
Brothers Inc., as syndication agent, has been, or is being, terminated
concurrently with the effectiveness of this Amendment, and (c) the
Administrative Agent’s receipt, for the account of each Person entitled
thereto, of all other fees and expenses that are due and payable on or prior to
the effective date hereof.


 


Section 4.                                          Continued
Validity of Loan Documents. 
Except for the amendments to the Credit Agreement set forth in Section 1
hereof, this Amendment shall not, by implication or otherwise, limit, impair,
constitute a waiver of or otherwise affect any rights or remedies of the
Administrative Agent or any Lender under any of the Loan Documents, nor alter,
modify, amend or in any way affect any of the rights, remedies, obligations or
any covenants of the Borrower or any Guarantor contained in any of the other
Loan Documents, all of which are ratified and confirmed in all respects and
shall continue in full force and effect.


 


Section 5.                                          Representations
and Warranties.  Each of the
Borrower and the Guarantors (each, a “Loan Party”) hereby represents and
warrants to the Administrative Agent and the Lenders as follows:


 


9

















 


(a)                                  Due
Execution and Authorization; Legal, Valid and Binding Obligation.  This Amendment has been duly executed and
delivered by such Loan Party.  The
execution and delivery and performance by such Loan Party of this Amendment is
within such Person’s corporate powers and has been duly authorized by all
necessary action on its part.  This
Amendment, the Credit Agreement as amended hereby and all other Loan Documents
to which such Person is a party constitute the legal, valid and binding
obligations of such Person, enforceable against such Person in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar Laws affecting the
enforcement of creditors’ rights generally and by general equitable principles
(whether enforcement is sought by proceedings in equity or at law).


 


(b)                                 No
Legal Bar.  The execution and
delivery by such Loan Party of this Amendment and the performance by such
Person of this Amendment and the Credit Agreement as amended hereby, will not
violate any Requirement of Law or any Contractual Obligation of such Loan Party
or any of its Subsidiaries and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation, except
to the extent such violation or Lien could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.


 


(c)                                  Representations
and Warranties in Loan Documents. 
All representations and warranties of each Loan Party set forth in the
Credit Agreement and in any other Loan Document are true and correct in all
material respects on and as of the date hereof to the same extent as though
made on and as of such date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true and correct in all material
respects on and as of such earlier date.


 


(d)                                 No
Default.  No Default or Event of
Default has occurred and is continuing.


 


Section 6.                                          Ratification.  Except as expressly amended or waived hereby,
the Credit Agreement, the other Loan Documents and all documents, instruments
and agreements related thereto, are hereby ratified and confirmed in all
respects and shall continue in full force and effect.  The Credit Agreement, together with this
Amendment, shall be read and construed as a single agreement.  All references in the Loan Documents to the
Credit Agreement or any other Loan Document shall hereafter refer to the Credit
Agreement or any other Loan Document as amended hereby.


 


Section 7.                                          Counterparts;
Integration; Effectiveness.  This
Amendment may be executed in counterparts (and by different parties hereto in
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract.  Delivery of an executed counterpart of a
signature page to this Amendment by telecopier (or electronic mail (in PDF
format)) shall be effective as delivery of a manually executed counterpart of
this Amendment.


 


Section 8.                                          Miscellaneous.  This
Amendment constitutes the entire agreement of the parties with respect to the
subject matter hereof and supersedes any prior understandings or agreements
which may have existed with respect thereto. 
Except as expressly provided


 


10

















 


herein,
this Amendment shall not, by implication or otherwise, limit, impair,
constitute a waiver of or otherwise affect any rights or remedies of the
Administrative Agent or any Lender under the Credit Agreement or the other Loan
Documents, nor alter, modify, amend or in any way affect any of the obligations
or covenants contained in the Credit Agreement or any of the other Loan
Documents, all of which are ratified and confirmed in all respects and shall
continue in full force and effect.  To the
extent there is any inconsistency between the terms and provisions of any Loan
Document and the terms and provisions of this Amendment, the terms and
provisions of this Amendment shall govern. 
The headings used in this Amendment are for convenience of reference
only and shall not in any way be deemed to limit, define or describe the scope
and intent of this Amendment or any provision hereof.  This Amendment shall be binding upon and
inure to the benefit of the Administrative Agent, each of the Lenders and each
of the Loan Parties, and to each of their respective successors in title and
assigns.  This Amendment may not be
modified or amended except in a manner permitted by Section 10.1 of the
Credit Agreement.  In making proof of
this Amendment, it shall not be necessary to produce or account for more than
one such counterpart.


 


Section 9.                                          Costs
and Expenses.  Pursuant to Section 10.5
of the Credit Agreement, all reasonable out-of-pocket costs and expenses
incurred or sustained by the Administrative Agent in connection with this
Amendment, including all Attorney Costs of the Administrative Agent in
producing, reproducing and negotiating this Amendment, will be for the account
of the Borrower whether or not this Amendment is consummated.


 


Section 10.                                   Governing
Law.  THIS AMENDMENT AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY).


 


11
















 


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


 


	
   

  	
  Borrower:

  
	
   

  	
   

  
	
   

  	
  WHITE MOUNTAINS INSURANCE GROUP,

  
	
   

  	
  LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


Third Amendment to Credit Agreement


 

















 


	
   

  	
  BANK OF AMERICA, N.A.,
  as

  
	
   

  	
  Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


Third Amendment to Credit Agreement


 

















 


	
   

  	
  BANK OF AMERICA, N.A.,
  as

  
	
   

  	
  a Lender, Issuing Lender and Swing Line Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


Third Amendment to Credit Agreement


 

















 


	
   

  	
  BNP PARIBAS, as

  
	
   

  	
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


Third Amendment to Credit Agreement


 

















 


	
   

  	
  THE BANK OF NEW YORK MELLON,
  as

  
	
   

  	
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


Third Amendment to Credit Agreement


 

















 


	
   

  	
  THE BANK OF TOKYO-MITSUBISHI UFJ.

  
	
   

  	
  LTD., NEW YORK BRANCH,
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


Third Amendment to Credit Agreement


 

















 


	
   

  	
  DEUTSCHE BANK AG NEW YORK 

  
	
   

  	
  BRANCH, as a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


Third Amendment to Credit Agreement


 

















 


	
   

  	
  HSBC BANK USA, N.A.,
  as

  
	
   

  	
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


Third Amendment to Credit Agreement


 

















 


	
   

  	
  JP MORGAN CHASE BANK, N.A.,
  as

  
	
   

  	
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


Third Amendment to Credit Agreement


 

















 


	
   

  	
  PNC BANK, as

  
	
   

  	
  a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


Third Amendment to Credit Agreement


 
















 


	
   

  	
  THE ROYAL BANK OF SCOTLAND,

  
	
   

  	
  PLC, as a Lender

  
	
   

  	
   

  
	
   

  	
  By: GREENWICH CAPITAL MARKETS,

  
	
   

  	
  INC., as agent for The Royal Bank of

  
	
   

  	
  Scotland plc

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


Third Amendment to Credit Agreement


 

















 


	
   

  	
  STATE STREET BANK AND TRUST

  
	
   

  	
  COMPANY, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


Third Amendment to Credit Agreement


 

















 


	
   

  	
  WELLS FARGO BANK, NATIONAL

  
	
   

  	
  ASSOCIATION, as a
  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  



 


Third Amendment to Credit Agreement


 

















 


RATIFICATION OF GUARANTY


 


Each of the
undersigned Guarantors hereby (a) acknowledges and consents to the
foregoing Amendment and the Borrower’s execution thereof, (b) joins the foregoing Amendment for the sole purpose of consenting to and
being bound by the provisions of Sections 5 and 6 thereof and (c) ratifies
and confirms all of their respective obligations and liabilities under the Loan
Documents to which any of them is a party and ratifies and confirms that such
obligations and liabilities extend to and continue in effect with respect to,
and continue to guarantee the obligations of the Borrower under the Loan
Documents.


 


	
   

  	
  LONE TREE INSURANCE GROUP LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LONE TREE HOLDINGS LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


Third Amendment to Credit Agreement


 

















 


SCHEDULE 1


 


(Commitment Schedule)


 


	
  Lender

  	
   

  	
  Revolving Credit

  Commitment

  	
   

  	
  Revolving Credit

  Commitment Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  $

  	
  57,500,000.00

  	
   

  	
  13.017575216

  	
  %

  
	
  1000 W. Temple Street

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mail Code: CA9-705-07-05

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Los Angeles, CA 90012-1514

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The Bank of New York Mellon

  	
   

  	
  $

  	
  60,000,000.00

  	
   

  	
  13.583556748

  	
  %

  
	
  One Wall Street

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New York, NY 10286

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Bank of Tokyo — Mitsubishi UFJ. Ltd., NY
  Branch

  	
   

  	
  $

  	
  50,000,000.00

  	
   

  	
  11.319630623

  	
  %

  
	
  1251 Avenue of the Americas

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New York, NY 10020-1104

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deutsche Bank AG, New York Branch

  	
   

  	
  $

  	
  50,000,000.00

  	
   

  	
  11.319630623

  	
  %

  
	
  60 Wall Street

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New York, NY 10005

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  JPMorgan Chase Bank, N.A.

  	
   

  	
  $

  	
  50,000,000.00

  	
   

  	
  11.319630623

  	
  %

  
	
  270 Park Avenue

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4th Floor

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New York, NY 10017

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  HSBC Bank USA, N.A.

  	
   

  	
  $

  	
  35,000,000.00

  	
   

  	
  7.923741436

  	
  %

  
	
  452 Fifth Avenue

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5th Floor

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New York, NY 10018

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Royal Bank of Scotland plc

  	
   

  	
  $

  	
  35,000,000.00

  	
   

  	
  7.923741436

  	
  %

  
	
  101 Park Avenue

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New York, NY 10178

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lehman Brothers Bank, FSB

  	
   

  	
  $

  	
  24,210,526.31

  	
   

  	
  5.481084300

  	
  %

  
	
  745 7th Avenue

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5th Floor

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New York, NY 10019

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BNP Paribas

  	
   

  	
  $

  	
  20,000,000.00

  	
   

  	
  4.527852249

  	
  %

  
	
  787 7th Avenue

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New York, NY 10019

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PNC Bank

  	
   

  	
  $

  	
  20,000,000.00

  	
   

  	
  4.527852249

  	
  %

  
	
  249 Fifth Avenue

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  One PNC Plaza

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Pittsburgh, PA 15222

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  State Street Bank and Trust Company

  	
   

  	
  $

  	
  20,000,000.00

  	
   

  	
  4.527852249

  	
  %

  
	
  225 Franklin Street

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Boston, MA 02110

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Wells Fargo Bank, N.A.

  	
   

  	
  $

  	
  20,000,000.00

  	
   

  	
  4.527852249

  	
  %

  
	
  90 South 7th Street

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minneapolis, MN 55401

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
  $

  	
  441,710,526.31

  	
   

  	
  100.000000000

  	
  %