EXHIBIT 99(c)
GUARANTEE AGREEMENT (this "Agreement"), dated as of December 8,
2003, by ABB LTD, a company organized and existing under the laws of
Switzerland (the "Guarantor"), in favor of WHITE MOUNTAINS INSURANCE GROUP,
LTD., a company existing under the laws of Bermuda, and its Affiliates (the
"Guaranteed Parties").
WHEREAS, ABB Holding AG, Zurich, a company organized and existing
under the laws of Switzerland (ABB Holding AG, Zurich, and its successors
under Section 11.6 of the Purchase Agreement, "ABB"), and Lagrummet December
nr 919 AB (under change of name to "Fund American Holdings AB"), a company
organized and existing under the laws of Sweden (the "Purchaser"), are parties
to a Purchase Agreement (the "Purchase Agreement") dated as of December 8,
2003 pursuant to which, among other things, all of the shares of ABB Insurance
Holding Sweden AB are contemplated to be sold to Purchaser and all of the
shares of Sirius America Insurance Company are contemplated to be sold to
Folksamerica Reinsurance Company; and
WHEREAS, as an inducement to and a condition of the Purchaser
entering into the Purchase Agreement, the Guarantor agrees to enter into this
Agreement.
NOW, THEREFORE, in consideration of the Purchaser entering into the
Purchase Agreement and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Guarantor hereby agrees
as follows:
SECTION 1. Definitions. All capitalized terms used but not defined
herein shall have the meanings ascribed to such terms in the Purchase
Agreement.
SECTION 2. Guarantee. The Guarantor hereby irrevocably guarantees,
as principal and not as surety, (i) the due and punctual payment of all
monetary obligations now or hereafter due and payable by ABB pursuant to the
Purchase Agreement, and (ii) the full and complete performance of all
covenants, agreements, duties and obligations applicable to ABB pursuant to
the Purchase Agreement, as if the Guarantor were party thereto (in the place
of ABB), whether such covenants, agreements, duties or obligations are
outstanding on the date hereof or arise or are incurred at any time or times
hereafter (the obligations of ABB under the Purchase Agreement specified in
clauses (i) and (ii) being referred to herein collectively as the
"Obligations"). Notwithstanding anything to the contrary contained in this
Agreement, the obligations of the Guarantor under this Agreement shall not
(other than the costs, expenses, fees and interest to be paid by the Guarantor
pursuant to Sections 6 and 9) be greater than the obligations that the
Guarantor would have if it were a party to the Purchase Agreement in the place
of ABB.
SECTION 3. Nature of Guarantee. The Guarantor guarantees that the
Obligations will be duly and punctually paid and fully and completely
performed (in each case, as if the Guarantor were ABB) strictly in accordance
with the terms of the Purchase Agreement, as applicable. If for any reason ABB
shall fail or be unable to duly and punctually pay or to fully and completely
perform, or cause to be duly and punctually
paid or fully and completely performed, any Obligation as and when the same
shall become due and payable or otherwise required to be performed, the
Guarantor shall, subject to the terms and conditions of this Agreement,
forthwith duly and punctually pay or fully and completely perform, or cause to
be duly and punctually paid or fully and completely performed, such Obligation
(in each case, as if the Guarantor were ABB). The Guarantor further agrees
that this Agreement, to the extent it requires the payment of money,
constitutes a guarantee of payment when due and not of collection and is in no
way conditioned or contingent upon any attempt to collect from ABB. It is
understood and agreed that any waiver by Purchaser of any of the terms,
provisions or conditions of the Purchase Agreement, or any amendment to or
modification of the Purchase Agreement, may all or any of them be made and
done from time to time without notice to the Guarantor, and the Guarantor's
obligations under this Agreement shall continue subject to such waiver,
amendment or modification.
SECTION 4. Continuing Guarantee. (a) The Guarantor's guarantee of
the Obligations shall continue to be effective if (i) at any time any payment
of any Obligation is rescinded or must otherwise be returned by the payee
thereof upon the insolvency, bankruptcy, reorganization or similar event of
ABB or otherwise or (ii) the obligations of the Guarantor under this Agreement
are released in consideration of a payment of money or transfer of property by
ABB or any other Person and such payment, transfer or grant is rescinded or
must otherwise be returned by the recipient thereof upon the insolvency,
bankruptcy, reorganization or similar event of ABB, such other Person or
otherwise, in each case, as though all applicable payments, transfers and
grants had not been made.
(b) If a claim is made upon any Guaranteed Party at any time for
disgorgement, repayment or recovery of any amount or amounts or other
consideration or value received from any source whatsoever in payment,
performance, satisfaction or discharge of, or otherwise on account of, any of
the Obligations, and if such Guaranteed Party repays any such amounts, value
or consideration or otherwise becomes liable for all or any part of such claim
by reason of (i) any Order, (ii) any settlement or compromise of any Order or
(iii) the bankruptcy, insolvency or reorganization of ABB or any successor
endorser, guarantor, surety or obligor in respect of any of the Obligations,
the Guarantor shall be and remain liable hereunder for the amount, value or
consideration so repaid, or for which such Guaranteed Party otherwise is
liable, to the same extent as if such amount, value or consideration never had
been received by such Guaranteed Party, all notwithstanding any termination
hereof or the cancellation of any agreement, instrument or document evidencing
any of the Obligations. By virtue of this Agreement, the Guarantor hereby
expressly assumes any and all risks of a bankruptcy, insolvency or
reorganization with respect to ABB or any successor endorser, guarantor,
surety or obligor in respect of any of the Obligations. Notwithstanding any
other provision of this Agreement or anything to the contrary contained in the
Purchase Agreement, the Guarantor's obligations under this Agreement shall be
continuing obligations and shall survive the termination of any of the
Obligations.
SECTION 5. Release/Waiver/Rights. (a) The Guarantor hereby agrees
that it shall not be released from any of its obligations under this Agreement
by any act,
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thing or circumstance whatsoever which might, but for this provision, be
deemed a legal or equitable discharge, release or defense of a guarantor or
surety. Notwithstanding anything to the contrary contained in this Agreement,
the Guarantor shall have the benefit of all defenses, causes of action,
remedies and rights which would inure to, or could be brought by, the
Guarantor if it were a party to the Purchase Agreement in the place of ABB.
(b) Without limiting the generality of paragraph (a) above, the
Guarantor hereby unconditionally waives any and all notices that may be
required by Law or otherwise, now or hereafter in effect, including
promptness, diligence, notice of acceptance and any other notice with respect
to any of the Obligations and this Agreement and any requirement that the
Guaranteed Parties first present to, proceed against or make a demand against
ABB or otherwise exhaust any right, power or remedy under the Purchase
Agreement, before requesting payment or performance by the Guarantor hereunder
or that the Guaranteed Parties protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any other right to
take any action against ABB or any collateral.
SECTION 6. Fees and Expenses. The Guarantor agrees to pay any and
all costs, expenses and fees, including reasonable attorneys' fees and
disbursements, incurred by the Guaranteed Parties in enforcing any rights
under this Agreement, whether or not litigation or arbitration is commenced
and during all phases of litigation and arbitration.
SECTION 7. Representations and Warranties of Guarantor. The
Guarantor hereby represents and warrants, as of the date of this Agreement, to
the Guaranteed Parties as follows:
(a) Organization. The Guarantor is a company duly organized and
validly existing under the laws of Switzerland and has all requisite corporate
power and authority to own its properties and assets and to carry on its
business as presently being conducted.
(b) Power and Authority. The Guarantor has all requisite corporate
power and authority to execute, deliver and perform this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery by
the Guarantor of this Agreement and the performance by the Guarantor of the
provisions of this Agreement have been duly authorized by all necessary
corporate action (including action of the board of directors and, if required,
the shareholders) on the part of the Guarantor. This Agreement has been duly
executed and delivered by the Guarantor and, assuming the due authorization,
execution and delivery of this Agreement by White Mountains Insurance Group,
Ltd., this Agreement constitutes a legal, valid and binding obligation of the
Guarantor enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, insolvency, moratorium and other laws
affecting creditors rights generally from time to time in effect and, where
applicable, to general principles of equity.
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(c) No Conflicts. The execution and delivery by the Guarantor of
this Agreement and the performance by the Guarantor of the provisions of this
Agreement do not conflict with, or result in any violation or breach of, or
default (with or without notice or lapse of time, or both) under any provision
of (i) the organizational documents of the Guarantor or (ii) subject to the
governmental filings and other matters referred to in clause (d) below, any
Law or Order, in each case, applicable to the Guarantor or any of its
properties or assets, except, in the case of clause (ii), for any such
conflict, violation, breach or default which, individually or in the
aggregate, does not and is not reasonably likely to materially adversely
affect the ability of the Guarantor to perform its obligations hereunder.
(d) Governmental Authorizations. No consent, approval, license,
permit, order or authorization of, or registration, declaration or filing
with, any governmental authority is required to be obtained or made by or with
respect to the Guarantor in connection with the execution and delivery by the
Guarantor of this Agreement or the performance by the Guarantor of the
provisions of this Agreement, except for those the failure of which to obtain
or make, individually or in the aggregate, do not and are not reasonably
likely to materially impair the ability of the Guarantor to perform its
obligations under this Agreement.
(e) Litigation. There is no claim, action, suit, investigation of
which the Guarantor has knowledge, arbitration or legal, administrative or
other proceeding pending and, to the knowledge of the Guarantor, none is
presently threatened in writing against the Guarantor before or by any court,
governmental authority or arbitrator, which, if adversely determined,
individually or in the aggregate, is reasonably likely to materially impair
the Guarantor's ability to perform its obligations under this Agreement or to
have a material adverse effect on the financial condition of the Guarantor.
The Guarantor has not received any currently effective notices of default and
is not in default under any Orders, in each case, which individually or in the
aggregate, are reasonably likely to materially impair the Guarantor's ability
to perform its obligations under this Agreement.
SECTION 8. Survival of Representations. All of the representations
and warranties made by the Guarantor in this Agreement shall be deemed to have
been relied upon by the Guaranteed Parties and shall survive the execution and
delivery of this Agreement.
SECTION 9. Interest on Overdue Payments. Each overdue amount payable
by the Guarantor to the Guaranteed Parties under any provision of this
Agreement shall bear interest at a rate of 3% per annum, calculated on the
basis of the actual number of days elapsed over 365 from the date of delivery
of notice to the Guarantor from a Guaranteed Party of the requirement to pay
to the date on which such amount shall be paid to the applicable Guaranteed
Party.
SECTION 10. Place and Mode of Payment, etc. Each payment payable by
the Guarantor hereunder shall be made on the due date of such payment to the
applicable Guaranteed Party in Swedish kronor by electronic transfer in
immediately
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available funds and to the account designated by the applicable Guaranteed
Party in writing five (5) Business Days in advance.
SECTION 11. Payments To Be Free of Deductions. Each payment payable
by the Guarantor to the Guaranteed Parties under this Agreement shall be made
without any set-off or counterclaim whatsoever and shall be free and clear of
and without deduction for any Taxes, levies, imports, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any governmental authority unless
the Guarantor is compelled by Law to make such deduction or withholding. If
any such obligation is imposed upon the Guarantor with respect to any payment
payable by the Guarantor to the Guaranteed Parties hereunder, the Guarantor
shall pay to the Guaranteed Parties, on the date on which the said payment
shall become due and payable hereunder, such additional amount as shall be
necessary to enable the Guaranteed Parties to receive the same net amount
which the Guaranteed Parties would have received on such due date had no such
obligation been imposed upon the Guarantor. If any additional amount is paid
by the Guarantor to any Guaranteed Party for or on account of any Taxes,
levies, imports, duties, charges, fees, deductions, withholdings, compulsory
loans, restrictions or conditions pursuant to this Section 11, then, if such
Guaranteed Party at its sole discretion determines that it has received or
been granted a refund of, credit against or remission for such Taxes, levies,
imports, duties, charges, fees, deductions, withholdings, compulsory loans,
restrictions or conditions, such Guaranteed Party shall, to the extent that it
can do so without prejudice to the retention of the amount of such refund,
credit or remission, reimburse to the Guarantor such amount as such Guaranteed
Party shall, in its sole discretion, determine to be attributable to the
relevant Taxes, levies, imports, duties, charges, fees, deductions,
withholdings, compulsory loans, restrictions or conditions.
SECTION 12. Further Assurances, etc. The Guarantor will, at any time
and from time to time upon the written request of a Guaranteed Party, and at
the expense of the Guarantor, execute and deliver, or cause to be executed and
delivered, any and all such further assurances and other agreements and
instruments and take or cause to be taken such other action as may be
reasonably requested by a Guaranteed Party in order to give full effect to
this Agreement and to maintain and reserve all of the rights, remedies, powers
and privileges of the Guaranteed Parties hereunder.
SECTION 13. Notices. All notices and other communications that are
required or permitted to be given under this Agreement shall be in writing, in
the English language and shall be deemed to have been duly given or made as
of: (i) the time of delivery, if delivered personally against written receipt;
or (ii) the time faxed to the recipient (if the appropriate answerback or fax
confirmation shall have been received). All such notices and communications
shall be delivered to the following addresses or numbers (or at such other
address or number for a party as shall be specified by like notice):
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If to a Guaranteed Party:
White Mountains Insurance Group, Ltd.
80 South Main Street
Hanover, New Hampshire 03755-2053
U.S.A.
Fax No.: 603-643-4592
Attention: Robert L. Seelig
Vice President & General Counsel
If to the Guarantor:
ABB Ltd
PO Box 8131
CH-8050 Zurich
Switzerland
Fax No.: +41-43-317-7992
Attention: General Counsel
SECTION 14. Amendments. This Agreement may not be amended except by
an instrument in writing signed on behalf of each of the parties hereto by
their duly authorized representatives.
SECTION 15. No Waiver; Remedies. No failure on the part of the
Guaranteed Parties to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. This Agreement may be enforced by the
Guaranteed Parties from time to time as often as the occasion therefor may
arise and without any requirement on the part of the Guaranteed Parties first
to exercise any rights against ABB or against any other Person or to exhaust
any remedies available to the Guaranteed Parties against ABB or against any
other Person or to resort to any other source or means of obtaining payment or
enforcing performance of the Obligations or any of them. The remedies herein
provided are cumulative and not exclusive of any remedies provided by Law or
in equity.
SECTION 16. Effective Date. The Guarantor's obligations hereunder
shall arise irrevocably as of the date first above written.
SECTION 17. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, regardless of
the laws that might otherwise govern under applicable principles of conflicts
of laws thereof.
SECTION 18. Pre-Closing Dispute Resolution. (a) Any action or
proceeding initiated prior to the Closing and arising out of or relating to
this Agreement or any transaction contemplated hereby shall be brought in the
United States District Court for the Southern District of New York, or, if a
party cannot acquire jurisdiction in
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such federal court, shall be brought in the courts of the State of New York,
County of New York, Borough of Manhattan (and the parties shall seek to have
the matter tried by the Special Commercial Part of the New York Supreme
Court), and each of the parties irrevocably submits to the exclusive
jurisdiction of each such court in any such action or proceeding, waives any
objection it may now or hereafter have to venue or to convenience of forum,
agrees that all claims in respect of the action or proceeding shall be heard
and determined only in any such court and agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court;
provided, however, that any such action or proceeding which remains
outstanding at the Closing shall be withdrawn from such court on or prior to
the Closing Date and submitted to arbitration pursuant to Section 19 without
prejudicing in any way any claim of either party thereto. For the avoidance of
doubt, any action or proceeding brought under this Section 18 for which a
judgment has been rendered shall not be deemed an outstanding action or
proceeding at the Closing and neither party may submit such judgment to
arbitration under Section 19 after the Closing or otherwise appeal or seek to
review such judgment. The parties agree that any or all of them may file a
copy of this paragraph with any court as written evidence of the knowing,
voluntary and bargained agreement among the parties irrevocably to waive any
objections to venue or to convenience of forum. Process in any action or
proceeding referred to in the first sentence of this Section may be served on
any party anywhere in the world.
(b) Each party hereby waives, to the fullest extent permitted by
applicable Law, any right it may have to a trial by jury in respect of any
action or proceeding arising prior to the Closing and out of or relating to
this Agreement or any transaction contemplated hereby. Each party (a)
certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such party would not, in the event
of any action, suit or proceeding, seek to enforce the foregoing waiver and
(b) acknowledges that it and the other parties have been induced to enter into
this Agreement, by, among other things, the mutual waiver and certifications
in this Section.
SECTION 19. Post-Closing Dispute Resolution. Any action or
proceeding initiated after the Closing and out of or relating to this
Agreement shall be determined, at the request of either party, by arbitration
in the English language conducted in London, England, in accordance with the
then-existing International Arbitration Rules of the American Arbitration
Association (the "Rules"). The arbitration shall be conducted by three (3)
arbitrators, of which each party shall appoint one (1) arbitrator and the two
(2) arbitrators thus appointed shall appoint the presiding arbitrator (the
"Chairman"). The Chairman shall (i) be admitted to practice as an attorney and
counselor at law in the State of New York; (ii) be a partner or of counsel or
retired partner or retired of counsel at a prominent United States-based law
firm; and (iii) have expertise in mergers and acquisitions and international
arbitration. The arbitrators shall permit the parties to adduce expert
testimony in connection with any action or proceeding under this Section 19
and shall consider such expert testimony in rendering their awards. The
arbitrators shall give reasonably detailed justifications for their awards in
any proceeding and any award rendered by the arbitrator shall be final,
binding and unappealable and may be entered by any court having jurisdiction
thereof. The parties hereby agree to the institution of any available "fast
track" or other mechanisms or
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procedures that would have the effect of streamlining or increasing the speed
of the arbitration. Any controversy concerning whether a dispute is an
arbitrable dispute, whether arbitration has been waived, whether an assignee
of this Agreement is bound to arbitrate, or as to the interpretation or
enforceability of this paragraph shall be determined by the arbitrators. In
their award, the arbitrators shall allocate, in their discretion, among the
parties to the arbitration, all costs of the arbitration, including the fees
and expenses of the arbitration proceedings and reasonable attorneys' fees,
costs and expert witness expenses of the parties. The parties hereto agree to
comply with any award made in any such arbitration proceedings that has become
final in accordance with the Rules and agree to the entry of a judgment in any
jurisdiction upon any award rendered in such proceedings becoming final under
the Rules. The arbitrators shall be entitled, if appropriate, to award any
remedy in such proceedings, including monetary damages, specific performance
and all other forms of legal and equitable relief including punitive damages
(to the extent not prohibited by this Agreement).
SECTION 20. Enforcement. The parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached.
SECTION 21. Entire Agreement; Assignment. This Agreement constitutes
the entire agreement and understanding of the parties hereto and supersedes
all prior agreements and understandings, both written and oral, between the
parties hereto with respect to the subject matter hereof. Neither the
Guarantor nor any of the Guaranteed Parties may assign its rights hereunder or
delegate any of its covenants, agreements, duties or obligations hereunder
without the prior written consent of the other party, and any such purported
assignment or purported delegation shall be null and void. All covenants,
agreements, duties, obligations, rights, remedies, powers, privileges and
preferences of each party to this Agreement shall be binding upon and inure to
the benefit of its permitted successors and assigns.
SECTION 22. Severability. If at any time any provision of this
Agreement is or becomes invalid, illegal or unenforceable under the laws of
the State of New York, the validity, legality and enforceability of the
remainder of this Agreement shall not be affected. In the event any provision
is held in any proceeding pursuant to Section 18 or 19 to be invalid, illegal
or unenforceable, the parties shall replace that provision with a new
provision permitted by the laws of the State of New York and having an
economic effect as close as possible to the deficient provision.
SECTION 23. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
SECTION 24. Headings. The headings of this Agreement are for
convenience only and shall not be construed to affect the meaning or
construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
ABB LTD
by /s/ Erich Koefer /s/ Daniel Shindleman
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Name: Erich Koefer Daniel Shindleman
Title: Group Vice President
WHITE MOUNTAINS INSURANCE GROUP, LTD.
by /s/ Dennis Beaulieu
--------------------------------------
Name: Dennis Beaulieu
Title: Secretary
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