**Exhibit 10.7.1**

 

TRUST AGREEMENT

Dated as of November 14, 2006

between

FUND AMERICAN COMPANIES, INC.

and

WHITE MOUNTAINS CAPITAL, INC., as Trustee

 

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TABLE OF CONTENTS

Page
| ARTICLE I                                        |   |
|--------------------------------------------------|--------|
|                                             |   |
| DEFINITIONS                                      |   |
|                                             |   |
| SECTION 1.01. Definitions                        | 4      |
|                                             |   |
| ARTICLE II                                       |   |
|                                             |   |
| TRUST                                            |   |
|                                             |   |
| SECTION 2.01. Establishment                      | 5      |
| SECTION 2.02. Revocation                         | 5      |
| SECTION 2.03. Grantor Trust                      | 5      |
| SECTION 2.04. Trust Assets                       | 5      |
|                                             |   |
| ARTICLE III                                      |   |
|                                             |   |
| DISBURSEMENTS                                    |   |
|                                             |   |
| SECTION 3.01. Disbursements to Berkshire         | 6      |
| SECTION 3.02. Limitations                        | 6      |
|                                             |   |
| ARTICLE IV                                       |   |
|                                             |   |
| INSOLVENCY OF  THE COMPANY                       |   |
|                                             |   |
| SECTION 4.01. Insolvency                         | 6      |
| SECTION 4.02. Procedures                         | 6      |
|                                             |   |
| ARTICLE V                                        |   |
|                                             |   |
| PAYMENTS TO THE COMPANY                          |   |
|                                             |   |
| SECTION 5.01. Payments to the Company            | 7      |
|                                             |   |
| ARTICLE VI                                       |   |
|                                             |   |
| INVESTMENT OF  TRUST                             |   |
|                                             |   |
| SECTION 6.01. Limitations on Rights of Berkshire | 7      |
| SECTION 6.02. Contributed Assets.                | 7      |
|                                             |   |

 

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| ARTICLE VII                                                |   |
|------------------------------------------------------------|--------|
|                                                       |   |
| RECORDKEEPING  AND ADMINISTRATIVE SERVICES TO BE PERFORMED |   |
|                                                       |   |
| SECTION 7.01. General                                      | 8      |
| SECTION 7.02. Accounts                                     | 8      |
| SECTION 7.03. Inspection and Audit                         | 8      |
|                                                       |   |
| ARTICLE VIII                                               |   |
|                                                       |   |
| TRUSTEE POWERS                                             |   |
|                                                       |   |
| SECTION 8.01. Trustee Powers                               | 8      |
| ARTICLE IX                                                 |   |
|                                                       |   |
| COMPENSATION AND  EXPENSES OF THE TRUSTEE                  |   |
|                                                       |   |
| SECTION 9.01. Compensation and Expenses of the  Trustee    | 9      |
|                                                       |   |
| ARTICLE X                                                  |   |
|                                                       |   |
| RESIGNATION OR  REMOVAL OF THE TRUSTEE                     |   |
|                                                       |   |
| SECTION 10.01. Resignation                                 | 10     |
| SECTION 10.02. Removal                                     | 10     |
| SECTION 10.03. Successor                                   | 10     |
| ARTICLE XI                                                 |   |
|                                                       |   |
| SUCCESSOR  TRUSTEE                                         |   |
|                                                       |   |
| SECTION 11.01. Appointment                                 | 10     |
| SECTION 11.02. Acceptance                                  | 10     |
| SECTION 11.03. Corporate Action                            | 10     |
|                                                       |   |
| ARTICLE XII                                                |   |
|                                                       |   |
| CONFIDENTIALITY                                            |   |
|                                                       |   |
| SECTION 12.01. Confidentiality                             | 11     |
|                                                       |   |
| ARTICLE XIII                                               |   |
|                                                       |   |
| AMENDMENT,  REVOCATION OR TERMINATION                      |   |
|                                                       |   |
| SECTION 13.01. Amendment                                   | 11     |
| SECTION 13.02. Revocation or Termination.                  | 11     |
|                                                       |   |

 

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| ARTICLE XIV                                                          |   |
|----------------------------------------------------------------------|--------|
|                                                                 |   |
| LIMITATION OF  LIABILITY; INDEMNIFICATION                            |   |
|                                                                 |   |
| SECTION 14.01. Limitation of Liability                               | 12     |
| SECTION 14.02. Indemnification                                       | 12     |
| ARTICLE XV                                                           |   |
|                                                                 |   |
| RESIGNATION, REMOVAL  AND TERMINATION NOTICES                        |   |
|                                                                 |   |
| SECTION 15.01. Resignation, Removal and Termination  Notices         | 12     |
|                                                                 |   |
| ARTICLE XVI                                                          |   |
|                                                                 |   |
| DURATION                                                             |   |
|                                                                 |   |
| SECTION 16.01. Duration                                              | 13     |
|                                                                 |   |
| ARTICLE XVII                                                         |   |
|                                                                 |   |
| GENERAL                                                              |   |
|                                                                 |   |
| SECTION 17.01. Performance by the Trustee, its  Agents or Affiliates | 13     |
| SECTION 17.02. Entire Agreement                                      | 13     |
| SECTION 17.03. Waiver                                                | 13     |
| SECTION 17.04. Non-Assignment                                        | 13     |
| SECTION 17.05. Successors and Assigns                                | 13     |
| SECTION 17.06. Partial Invalidity                                    | 13     |
| SECTION 17.07. Section Headings                                      | 13     |
| SECTION 17.08. Counterparts                                          | 14     |
| SECTION 17.09. Facsimile and Electronic  Communications Permitted    | 14     |
|                                                                 |   |
| ARTICLE XVIII                                                        |   |
|                                                                 |   |
| GOVERNING LAW                                                        |   |
|                                                                 |   |
| SECTION 18.01. Delaware Law Controls                                 | 14     |
| SECTION 18.02. Trust Agreement Controls                              | 14     |

 

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TRUST AGREEMENT dated asof November 14, 2006, between FUND AMERICAN COMPANIES, INC., a Delawarecorporation (the “Company”) and WHITE MOUNTAINS CAPITAL, INC., a Delawarecorporation (the “Trustee”).

WITNESSETH:

WHEREAS Berkshire owns $300 million liquidationpreference of preferred stock of the Company (“the Berkshire Preferred Stock”);

WHEREAS the Company wishes to establish a trust and tocontribute to the trust assets (the “Contributed Assets”) that shall be heldtherein, subject to the claims of the Company’s creditors in the event of theCompany’s Insolvency (as herein defined), until paid to Berkshire in suchmanner and at such times as specified under the terms of the BerkshirePreferred Stock;

WHEREAS it is the intention of the parties that theContributed Assets be sufficient to pay when due all amounts required under theterms of the Berkshire Preferred Stock; and

WHEREAS the Trustee is willing to hold the aforesaidContributed Assets in trust.

NOW, THEREFORE, the parties do hereby establish the Trustand agree that the Trust shall be composed, held and disposed of as follows:

# ARTICLEI

# DEFINITIONS

## SECTION 1.01. Definitions.  The following terms as used in this Agreementhave the meaning indicated unless the context clearly requires otherwise:

 “Agreement”shall mean this Trust Agreement, as the same may be amended and in effect fromtime to time.

“Berkshire” shall mean Berkshire Hathaway, Inc., aDelaware Corporation.

“Berkshire Preferred Stock” shall mean the $300million liquidation preference of preferred stock of the Company owned byBerkshire.

“Code” shall mean the Internal Revenue Code of 1986,as it has been or may be amended from time to time.

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“Company” shall mean Fund American Companies, Inc., aDelaware corporation, or any successor to all or substantially all itsbusinesses that, by agreement, operation of law or otherwise, assumes theresponsibility of the Company under this Agreement.

“Contributed Assets” shall mean the cash contributedto the Trust by the Company, which cash will be used to acquire a portfolio offixed maturity securities issued by the U.S. government or government-sponsoredenterprises, the scheduled interest and principal payments of which areintended to be sufficient to pay when due all amounts required under the termsof the Berkshire Preferred Stock.

“Reporting Date” shall mean the last day of eachcalendar quarter and the date as of which the Trustee resigns or is removedpursuant to this Agreement.

“Trust” shall mean this Fund American Companies, Inc.Trust established by the Company and the Trustee pursuant to the provisions ofthis Agreement.

“Trustee” shall mean White Mountains Capital, Inc., aDelaware corporation, or any successor trustee appointed pursuant toArticle XI to the extent such successor agrees to serve as Trustee underthis Agreement.

# ARTICLEII

# TRUST

## SECTION 2.01. Establishment.  The Company hereby deposits with the Trusteein trust the Contributed Assets, which shall become the principal of the Trustto be held, administered and disposed of by the Trustee as provided in thisAgreement.  The Company may from time totime deposit additional assets with the Trustee in trust that shall thereuponbe added to the principal of the Trust.

## SECTION 2.02. Revocation.  The Trust hereby established shall not berevocable by the Company.

## SECTION 2.03. Grantor Trust.  The Trust is intended to be a grantor trust,of which the Company is the grantor, within the meaning of subpart E, part I,subchapter J, chapter 1, subtitle A of the Code, and shall be construed accordingly.

## SECTION 2.04. Trust Assets.  The principal of the Trust and any earningsthereon shall be held separate and apart from funds of the Company and shall beused exclusively for the uses and purposes described herein and for the generalcreditors of the Company as herein set forth. Berkshire shall have no preferred claim on, or any beneficial ownershipinterest in, any assets of the Trust. Any assets held by the Trust will be subject to the claims of theCompany’s general creditors under Federal and state law in the event ofInsolvency.

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# ARTICLEIII

# DISBURSEMENTS

## SECTION 3.01. Disbursements to Berkshire.  The Company shall deliver to the Trustee aschedule (the “Payment Schedule”) that indicates the amounts payable by theCompany in respect of the Berkshire Preferred Stock and the dates for paymentsof such amounts.  The Trustee shall, onbehalf of the Company, disburse moneys from the Trust to Berkshire inaccordance with the Payment Schedule. The Trustee shall have no responsibility to ascertain whether thePayment Schedule complies with the terms of the Berkshire Preferred Stock or ofany applicable law.  The Company shall beresponsible for any Federal or state income tax reporting or withholdingarising out of any transactions relating to the Trust.

If the principal of the Trust, and any earningsthereon, are not sufficient to make payments to Berkshire in accordance withthe Payment Schedule, the Trustee shall notify the Company.

## SECTION 3.02. Limitations.  The Trustee shall not be required to make anydisbursement in excess of the net realizable value of the assets of the Trustat the time of the disbursement.

# ARTICLEIV

# INSOLVENCYOF THE COMPANY

## SECTION 4.01. Insolvency.  The Trustee shall cease disbursement of fundsto Berkshire if the Trustee has become aware of the Company’s Insolvency inaccordance with the procedures described in Section 4.02.  The Company shall be considered “Insolvent”for purposes of this Agreement if (a) the Company is unable to pay its debts asthey become due or (b) the Company is subject to a pending proceeding as adebtor under the United States Bankruptcy Code.

## SECTION 4.02. Procedures.  At all times during the continuance of theTrust, the principal and income of the Trust shall be subject to claims ofgeneral creditors of the Company under Federal and state law as set forthbelow.

### (a) The Board of Directors and the Presidentof the Company shall have the duty to inform the Trustee in writing of theCompany’s Insolvency.  If a personclaiming to be a creditor of the Company alleges in writing to the Trustee thatthe Company has become Insolvent, the Trustee shall determine whether theCompany is Insolvent and, pending such determination, the Trustee shalldiscontinue disbursements of funds to Berkshire.

### (b) Unless the Trustee has actual knowledgeof the Company’s Insolvency, or has received notice from the Company or aperson claiming to be a

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### creditor alleging that the Company is Insolvent, the Trustee shall haveno duty to inquire whether the Company is Insolvent.  The Trustee may in all events rely on suchevidence concerning the Company’s solvency as may be furnished to the Trusteeand that provides the Trustee with a reasonable basis for making adetermination concerning the Company’s solvency; provided, however, that theTrustee may in all events rely conclusively on the assertion of the Company asto whether it is or is not Insolvent.

### (c)  Ifat any time the Trustee has determined that the Company is Insolvent, theTrustee shall discontinue disbursements of funds to Berkshire and shall holdthe assets of the Trust for the benefit of the Company’s general creditors.

### (d) The Trustee shall resume disbursement of funds to Berkshire inaccordance with Article III only after the Trustee has determined that theCompany is not Insolvent (or is no longer Insolvent).

# ARTICLEV

# PAYMENTSTO THE COMPANY

## SECTION 5.01. Payments to the Company.  Except as provided under Articles III and IVand Section 13.02(b) the Company shall have no right to retain or divert toothers any of the Trust assets.

# ARTICLEVI

# INVESTMENTOF TRUST

## SECTION 6.01.Limitations on Rights ofBerkshire.  As provided in Section2.04, Berkshire will not have any preferential claim to or beneficial ownershipinterest in any asset or investment of the Trust, and the rights of Berkshireunder the Trust are solely those rights afforded to Berkshire with respect tothe assets of the Company as the holder of the Berkshire Preferred Stock.  Subject to the other provisions of this ArticleVI, all rights associated with assets of the Trust shall be exercised by theTrustee or the person designated by the Trustee, and shall in no event beexercisable by or rest with any person, including Berkshire and the Company.

## SECTION 6.02. Contributed Assets.

### (a)  Investments.  The Trustee shall not invest the principaland income of the Trust and shall hold the Contributed Assets and the scheduledinterest and principal payments thereon solely for the purpose of makingdisbursements to Berkshire in accordance with the terms of the BerkshirePreferred Stock; provided, that, the Trustee shall use the ContributedAssets to acquire fixed maturity securities issued by the U.S. government orgovernment-sponsored enterprises as the Trustee is instructed in writing by theCompany from time to time.

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# ARTICLEVII

# RECORDKEEPINGAND ADMINISTRATIVE SERVICES TO BE PERFORMED

## SECTION 7.01. General.  The Trustee shall perform such recordkeepingand administrative functions as are agreed to in writing between the Companyand the Trustee.

## SECTION 7.02. Accounts.  The Trustee shall keep accurate accounts ofall investments, receipts, disbursements and other transactions hereunder, andshall report the value of the assets held in the Trust as of the last day ofeach fiscal quarter of the Company and, if not on the last day of a fiscalquarter or the date on which the Trustee resigns or is removed as provided inArticle X or this Agreement is terminated as provided in ArticleXIII.  Within 30 days following eachReporting Date or within 60 days in the case of a Reporting Date caused by theresignation or removal of the Trustee or the termination of this Agreement, theTrustee shall provide to the Company a written account setting forth allinvestments, receipts, disbursements and other transactions effected by theTrustee between the Reporting Date and the prior Reporting Date, and settingforth the value of the Trust as of the Reporting Date.

## SECTION 7.03. Inspection and Audit.  All records generated by the Trustee inaccordance with Sections 7.01 and 7.02 shall be open to inspection andaudit, during the Trustee’s regular business hours prior to the termination ofthis Agreement, by the Company or any person designated by the Company.

# ARTICLEVIII

# TRUSTEEPOWERS

## SECTION 8.01. Trustee Powers.  The Trustee shall have the following powersand authority:

#### (a)  to sell, exchange, convey,transfer or otherwise dispose of any property held in the Trust, by privatecontract or at public auction; no person dealing with the Trustee shall bebound to see to the application of the purchase money or other propertydelivered to the Trustee or to inquire into the validity, expediency orpropriety of any such sale or other disposition;

#### (b)  to cause any securities orother property held as part of the Trust to be registered in the Trustee’s ownname, in the name of one or more of its nominees and to hold any investments inbearer form, but the books and records of the Trustee shall at all times showthat all such investments are part of the Trust;

#### (c)  to keep that portion of theTrust in cash or cash balances as the Trustee may, from time to time, deem tobe in the best interest of the Trust;

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#### (d)  to make, execute,acknowledge and deliver any and all documents of transfer or conveyance and tocarry out the powers herein granted;

#### (e)  to borrow funds from a banknot affiliated with the Trustee in order to provide sufficient liquidity tomake disbursements to Berkshire in accordance with the Berkshire PreferredStock in a timely fashion;

#### (f)  to settle, compromise orsubmit to arbitration any claims (other than claims of creditors of the Companyin the event of the Company’s Insolvency), debts or damages due to or arisingfrom the Trust; to commence or defend suits or legal or administrativeproceedings; to represent the Trust in all suits and legal and administrativehearings; and to pay all reasonable expenses arising from any such action fromthe Trust if not paid by the Company;

#### (g)  to employ legal, accounting,clerical and other assistance as may be required in carrying out the provisionsof this Agreement and to pay their reasonable expenses and compensation fromthe Trust if not paid by the Company; and

#### (h)  to do all other acts,although not specifically mentioned herein, as the Trustee may deem necessaryto carry out any of the foregoing powers and the purposes of the Trust.

Notwithstanding any powers granted to the Trusteepursuant to this Agreement or to applicable law, the Trustee shall not have anypower that could give the Trust the objective of carrying on a business and dividingthe gains therefrom, within the meaning of Section 301.7701-2 of the Procedureand Administrative Regulations promulgated pursuant to the Code.  The Company may provide the Trustee with anopinion of counsel whether an annual fiduciary tax return should be filed forthe Trust; in the absence of such opinion, the Trustee may consult with counselto the extent it deems appropriate on such issue, and any resulting counselfees shall be charged to the Trust to the extent not paid by the Company.

# ARTICLEIX

# COMPENSATIONAND EXPENSES OF THE TRUSTEE

## SECTION 9.01. Compensation and Expenses ofthe Trustee.  The Company shall notbe required to pay a fee to the Trustee in connection with the servicesprovided by the Trustee in accordance with this Agreement.

All expenses of the Trustee relating directly to themanagement of the assets of the Trust and disbursement of funds to Berkshireshall be paid by the Company.

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The Company shall, from time to time, pay taxes of anyand all kinds whatsoever that at any time are lawfully levied or assessed uponor become payable in respect of the assets of the Trust.

# ARTICLEX

# RESIGNATIONOR REMOVAL OF THE TRUSTEE

## SECTION 10.01. Resignation.  The Trustee may resign at any time upon 90days’ notice in writing to the Company, unless a shorter period of notice isagreed upon by the Company.

## SECTION 10.02. Removal.  The Company may not remove the Trustee exceptin the event of gross negligence or willful misconduct by the Trustee inconnection with the performance of its obligations under this Agreement andupon 90 days’ notice in writing to the Trustee, unless a shorter period ofnotice is agreed upon by the Trustee.

## SECTION 10.03. Successor.  If the Trustee resigns or is removed, asuccessor shall be appointed, in accordance with Article XI, by the effectivedate of resignation or removal under Section 10.01 or 10.02.  If no such appointment has been made, theTrustee may apply to a court of competent jurisdiction for appointment of asuccessor or for instructions.  Allexpenses of the Trustee in connection with any such proceeding shall be paid bythe Company.

# ARTICLEXI

# SUCCESSORTRUSTEE

## SECTION 11.01. Appointment.  If the office of Trustee becomes vacant forany reason, the Company may in writing appoint a successor trustee under thisAgreement.  The successor trustee shallhave all the rights, powers, privileges, obligations, duties, liabilities andimmunities granted to the Trustee under this Agreement.  The successor trustee and predecessor trusteeshall not be liable for the acts or omissions of the other with respect to theTrust.

## SECTION 11.02. Acceptance.  When the successor trustee accepts itsappointment under this Agreement, title to and possession of the Trust assetsshall immediately vest in the successor trustee without any further action onthe part of the predecessor trustee.  Thepredecessor trustee shall execute all instruments and do all acts thatreasonably may be necessary or reasonably may be requested in writing by the Companyor the successor trustee to vest title to all Trust assets in the successortrustee or to deliver all Trust assets to the successor trustee.

## SECTION 11.03. Corporate Action.  Any successor of the Trustee or successortrustee, through sale or transfer of the business or trust department of theTrustee

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## or successor trustee, or through reorganization, consolidation ormerger, or any similar transaction, shall, upon consummation of thetransaction, become the successor trustee under this Agreement.

# ARTICLEXII

# CONFIDENTIALITY

## SECTION 12.01. Confidentiality.  The parties to this Agreement recognize that,in the course of implementing and providing the services defined herein, eachparty may disclose to the other confidential information.  All such confidential information and otherproprietary information disclosed by any party shall remain the sole propertyof the party disclosing the same, and any receiving party shall have nointerest or rights with respect thereto if so designated by the disclosingparty to the receiving party.  Each partyagrees to maintain all such confidential information in trust and confidence tothe same extent that it protects its own proprietary information, and not todisclose such confidential information to any third party without the writtenconsent of the party that originally disclosed such proprietaryinformation.  Each party further agreesto take all reasonable precautions to prevent any unauthorized disclosure ofsuch confidential information.  Inaddition, each party agrees not to disclose or make public to anyone, in anymanner, the terms of this Agreement, except to its legal and accountingadvisers, or as required by law, or in connection with a potential corporatetransaction, without the prior written consent of the other parties.

All information received and all records prepared andmaintained by the Trustee shall be held in confidence by the Trustee, except asrequired by applicable law.  Except tothe extent expressly authorized under this Agreement, the Trustee shall nothold itself out as a representative or agent of the Company.

# ARTICLEXIII

# AMENDMENT,REVOCATION OR TERMINATION

## SECTION 13.01. Amendment.  This Agreement may not be amended.

## SECTION 13.02. Revocation or Termination.

### (a) Except as set forth in paragraph (b) of this Section 13.02, the Trustmay not be revoked and this Agreement may not be terminated.

### (b)  Onthe date when the Berkshire Preferred Stock is redeemed in full and the Companyhas no further obligations with respect to such stock, the Trust shallautomatically be revoked and this Agreement shall terminate.  At such time, the Trustee shall forthwithtransfer and deliver to such individual or entity as the Company shalldesignate in writing all cash and assets then constituting the Trust.  If by the termination

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### date, the Company has not notified the Trustee in writing as to whomthe assets and cash are to be transferred and delivered, the Trustee may bringan appropriate action or proceeding for leave to deposit the assets and cash ina court of competent jurisdiction.  TheTrustee shall be reimbursed by the Company for all costs and expenses of theaction or proceeding including, without limitation, reasonable attorneys’ feesand disbursements.

# ARTICLEXIV

# LIMITATIONOF LIABILITY; INDEMNIFICATION

## SECTION 14.01.Limitation of Liability.  Trustee shall not be liable for any claims,losses, liabilities, damages or expenses (including attorneys’ fees andexpenses) (collectively referred to herein as “Losses”) or action taken oromitted or for any loss or injury resulting from its actions or its performanceor lack of performance of its duties hereunder in the absence of its grossnegligence or willful misconduct.  In noevent shall Trustee be liable (i) for special, consequential or punitivedamages, or (ii) any Losses due to forces beyond the control of Trustee,including without limitation strikes, work stoppages, acts of war or terrorism,insurrection, revolution, nuclear or natural catastrophes or acts of God, andinterruptions, loss or malfunctions of utilities, communications or computer(software and hardware) services.

## SECTION 14.02.Indemnification.  The Company shall be liable for, and shallindemnify Trustee and hold Trustee harmless from and against, any and allLosses howsoever arising from or in connection with this Agreement or theperformance of Trustee’s duties hereunder, the enforcement of this Agreementand disputes between the parties hereto, provided, however, that nothingcontained herein shall require that Trustee be indemnified for its grossnegligence or willful misconduct.

# ARTICLEXV

# RESIGNATION,REMOVAL AND TERMINATION NOTICES

## SECTION 15.01. Resignation, Removal andTermination Notices.  All notices ofresignation, removal or termination under this Agreement must be in writing andmailed to the party to which the notice is being given by certified orregistered mail, return receipt requested, to the Company c/o Thomas L.Forsyth, Esq., OneBeacon Insurance Group LLC, One Beacon Street, Boston, MA02108, and to the Trustee c/o White Mountains Capital, Inc., 80 South Main St.,Hanover, NH 03755, or to such other addresses as the parties have notified eachother of in the foregoing manner.

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# ARTICLEXVI

# DURATION

## SECTION 16.01. Duration.  The Trust shall continue in effect until theBerkshire Preferred Stock is redeemed in full and the Company has no furtherobligations with respect to such stock subject, however, to the provisions ofthis Agreement relating to amendment or termination.

# ARTICLEXVII

# GENERAL

## SECTION 17.01. Performance by the Trustee,its Agents or Affiliates.  TheCompany acknowledges and authorizes that the services to be provided under thisAgreement shall be provided by the Trustee, its agents or affiliates, and thatcertain of such services may be provided pursuant to one or more othercontractual agreements or relationships.

## SECTION 17.02. Entire Agreement.  This Agreement contains all the terms agreedupon between the parties with respect to the subject matter hereof.

## SECTION 17.03. Waiver.  No waiver by either party of any failure orrefusal to comply with an obligation hereunder shall be deemed a waiver of anyother or subsequent failure or refusal to so comply.

## SECTION 17.04. Non-Assignment.  Payments to Berkshire under the Trust, ifany, may not be anticipated, assigned (either at law or in equity), alienated,pledged, encumbered or subjected to attachment, garnishment, levy, execution orother legal or equitable process.

## SECTION 17.05. Successors and Assigns.  The stipulations in this Agreement shallinure to the benefit of, and shall bind, the successors and assigns of therespective parties.

## SECTION 17.06. Partial Invalidity.  If any term or provision of this Agreement orthe application thereof to any person or circumstances shall, to any extent, beinvalid or unenforceable, the remainder of this Agreement, or the applicationof such term or provision to persons or circumstances other than those as towhich it is held invalid or unenforceable, shall not be affected thereby, andeach term and provision of this Agreement shall be valid and enforceable to thefullest extent permitted by law.

## SECTION 17.07. Section Headings.  The headings of the various sections andsubsections of this Agreement have been inserted only for the purposes ofconvenience and are not part of this Agreement and shall not be deemed in anymanner to modify, explain, expand or restrict any of the provisions of thisAgreement.

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## SECTION 17.08. Counterparts.  This Agreement may be executed in one or morecounterparts (including via facsimile), each of which shall be deemed to be anoriginal, but all of which together shall constitute one and the sameinstrument and shall become effective when one or more counterparts have beensigned by each party and delivered to the other party.  The signature of any of the parties to anycounterpart or copy of this Agreement shall be sufficient evidence of itsjoining in the creation of the Trust and of its designation of the Trusteenamed herein.

## SECTION 17.09. Facsimile and ElectronicCommunications Permitted.  Allrequirements in this Agreement that notifications, directions or othercommunications be in writing may be satisfied by facsimile and/or electronicdelivery to the facsimile number, e-mail or other electronic address as shallhave been provided by one party to the other in writing, except for (a) therequirement relating to notices of resignation, removal or termination asdescribed in Section 15.01 and (b) the initial notice by one party to the otherof an acceptable facsimile number, e-mail or other address.  Any changes by one party to any facsimilenumber, e-mail or other address previously provided to the other party pursuantto this Section 17.09 shall also be transmitted in writing.

# ARTICLEXVIII

# GOVERNINGLAW

## SECTION 18.01. Delaware Law Controls.  This Agreement is being made in the State ofDelaware, and the Trust shall be administered as a Delaware trust.  The validity, construction, effect andadministration of this Agreement shall be governed by and interpreted inaccordance with the laws of the State of Delaware.

## SECTION 18.02. Trust Agreement Controls.  The Trustee is not subject to the terms ofthe Berkshire Preferred Stock and, in the event of any conflict between theterms of the Berkshire Preferred Stock and the provisions of this Agreement,the provisions of this Agreement shall control.

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IN WITNESS WHEREOF, the parties hereto have causedthis Agreement to be executed by their duly authorized officers as of the dayand year first above written.
|        | FUND AMERICAN  COMPANIES, INC., |
|--------|---------------------------------|
|   |                            |   |
|   |                            | By:/s/ Frederick  J. Turcotte |
|   |                            |   |
|   |                            |   | Name: | Frederick J. Turcotte |
|   |                            |   | Title: | Vice President and Treasurer |

 
|        | WHITE MOUNTAINS CAPITAL, INC.                     |
|--------|---------------------------------------------------|
|   | (solely in its capacity as Trustee of the Trust), |
|   |                                              |   |
|   |                                              | By:/s/ Reid T. Campbell |
|   |                                              |   |
|   |                                              |   | Name: | Reid T. Campbell |
|   |                                              |   | Title: | Managing Director and President |

 

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