UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
August 26, 2008
Tower Group, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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000-50990
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13-3894120
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(State or other jurisdiction of
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(Commission File Number)
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(IRS Employer
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incorporation)
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Identification No.)
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120 Broadway (31
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Floor), New York, NY
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10271
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(Address of principal executive offices)
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(Zip Code)
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Registrant’s telephone number, including area code
(212) 655-2000
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General Instruction
A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.133-4(c))
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TABLE OF CONTENTS
ITEM 1.01 ENTRY INTO MATERIAL DEFINITIVE AGREEMENT
On August 26, 2008, in connection with the proposed acquisition of HIG, Inc. (“Hermitage”) by
CastlePoint Reinsurance Company, Ltd. (“CPRe”), a subsidiary of CastlePoint Holdings, Ltd.
(“CastlePoint”), Tower Insurance Company of New York, Tower National Insurance Company, Preserver
Insurance Company, Mountain Valley Insurance Company, Northeast Insurance Company and Tower Risk
Management Corp. (collectively, the “Tower Entities”), each a subsidiary of Tower Group, Inc.
(“Tower”), and CPRe entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”),
pursuant to which, subject to the terms and conditions set forth therein, following CPRe’s
acquisition of Hermitage, the Tower Entities will acquire Hermitage’s operating assets, including
rights to existing insurance policy renewals and producer appointments from CPRe for $16 million in cash.
The transactions contemplated by the Asset Purchase Agreement are expected to be completed in
late December of 2008, subject to the satisfaction of certain conditions, including completion of
CPRe’s acquisition of all the issued and outstanding shares of the common stock of Hermitage and
receipt of customary regulatory approvals. However, Tower does not expect to consummate such
transactions unless Tower’s acquisition of CastlePoint is not
consummated or is delayed until after the consummation of CPRe’s
acquisition of Hermitage. If the
transactions contemplated by the Asset Purchase Agreement close, the Tower Entities and
CPRe have also agreed to extend all of the reinsurance, management
and service agreements among the companies or their respective subsidiaries for one additional year upon their expiration,
currently scheduled for March 31, 2010, at commission and management fee terms which have been set
to approximate current market terms, provided that, if the two year
extension under the merger agreement (the “merger
agreement”), dated as of August 4, 2008, among Tower,
Ocean I Corporation and CastlePoint, which is attached as
Exhibit 2.1 to Tower’s Current Report on Form 8-K/A
filed with the Securities and Exchange Commission on August 6,
2008, becomes effective on the terms and conditions set forth in
the merger agreement, the extension contemplated by the asset
purchase agreement will be for 6 months.
Under the Asset Purchase Agreement, the Tower Entities and CPRe agreed, subject to certain
limitations, to indemnify each other for breaches of their respective representations, warranties
and covenants. The parties also have the right to terminate the Asset Purchase Agreement under certain
circumstances.
In connection with CPRe’s acquisition of Hermitage and the Asset Purchase Agreement, Tower and
CastlePoint entered a Limited Waiver Agreement, pursuant to which each party waived the
applicability of certain sections of the merger agreement.
The
terms of the Asset Purchase Agreement and Limited Waiver Agreement
were unanimously approved by the
independent members of the Tower board of directors.
Copies of the Asset Purchase Agreement and the Limited Waiver Agreement are attached to this
Current Report on Form 8-K as Exhibit 2.1 and Exhibit 2.2, respectively. The Asset Purchase
Agreement and the Limited Waiver Agreement are incorporated herein by reference. The above
descriptions of the Asset Purchase Agreement and the
Limited Waiver Agreement, as well as the
transactions contemplated by those
documents, are not complete and are qualified in their entirety by reference to those
exhibits.
ITEM 8.01 OTHER EVENTS
On August 27, 2008, Tower and CastlePoint issued a joint press release entitled “Tower and
CastlePoint to Acquire Hermitage Insurance Group” announcing the
proposed acquisition of Hermitage by CPRe and the execution of the
Asset Purchase Agreement (the “Joint Press Release”). Tower is filing as
Exhibit 99.1 to this Current Report on Form 8-K a copy of the Joint Press Release and as Exhibit
99.2 to this Current Report on Form 8-K materials being used in connection with presentations to
and conversations with investors beginning the date hereof.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d)
Exhibit 2.1: Asset Purchase Agreement, dated as of August 26, 2008, among CastlePoint Reinsurance
Company, Ltd., Tower Insurance Company of New York, Tower National Insurance Company, Preserver
Insurance Company, Mountain Valley Insurance Company, Northeast
Insurance Company and Tower Risk
Management Corp.
Exhibit 2.2. Limited Waiver Agreement, dated as of August 26, 2008, between Tower Group, Inc. and
CastlePoint Holdings, Ltd.
Exhibit 99.1 Press release dated August 27, 2008 entitled “Tower and CastlePoint to Acquire
Hermitage Insurance Group”
Exhibit 99.2: Investor presentation slides to be used in connection with investor presentations
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized
Date: August 27, 2008
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Tower Group, Inc.
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By: /s/ Francis M. Colalucci
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Name:
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Francis M. Colalucci
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Title:
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Chief Financial Officer and Treasurer
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Exhibit Index
Exhibit 2.1: Asset Purchase Agreement, dated as of August 26, 2008, among CastlePoint Reinsurance
Company, Ltd., Tower Insurance Company of New York, Tower National Insurance Company, Preserver
Insurance Company, Mountain Valley Insurance Company, Northeast
Insurance Company and Tower Risk
Management Corp.
Exhibit 2.2. Limited Waiver Agreement, dated as of August 26, 2008, between Tower Group, Inc. and
CastlePoint Holdings, Ltd.
Exhibit 99.1 Press release dated August 27, 2008 entitled “Tower and CastlePoint to Acquire
Hermitage Insurance Group”
Exhibit 99.2: Investor presentation slides to be used in connection with investor presentations
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