Exhibit 10.6

MULTI-LINE PER RISK

EXCESS OF LOSS REINSURANCE AGREEMENT

UNITED PROPERTY AND CASUALTY INSURANCE COMPANY

St Petersburg, Florida

EFFECTIVE: June 1, 2008

EXPIRATION: June 1, 2009

BMS

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MULTI-LINE PER RISK EXCESS OF LOSS REINSURANCE AGREEMENT

TABLE OF CONTENTS

 

ARTICLE

  

DESCRIPTION

   PAGE 1   

Business Reinsured

   1 2   

Cover

   1 3   

Term

   2 4   

Territory

   3 5   

Exclusions

   3 6   

Definitions

   5 7   

Net Retained Lines

   8 8   

Premium

   8 9   

Reinstatement

   8 10   

Notice of Loss and Loss Settlements

   9 11   

Salvage and Subrogation

   9 12   

Offset

   9 13   

Unauthorized Reinsurance

   10 14   

Taxes

   11 15   

Currency

   12 16   

Delay, Omission or Error

   12 17   

Access to Records

   12 18   

Arbitration

   12 19   

Service of Suit

   14 20   

Insolvency

   15 21   

Third Party Rights

   16 22   

Severability

   16 23   

Confidentiality

   16 24   

Entire Agreement

   16 25   

Law and Jurisdiction

   17 26   

Intermediary

   17 27   

Mode of Execution

   17

Attachments:

Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance - USA
Terrorism Exclusion Clause

 

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MULTI-LINE PER RISK

EXCESS OF LOSS REINSURANCE AGREEMENT

issued to

UNITED PROPERTY AND CASUALTY INSURANCE COMPANY

St Petersburg, Florida

(Hereinafter referred to as the “Company”)

by

the Subscribing Reinsurers executing the

attached Interests and Liabilities Contract

(Hereinafter referred to collectively as the “Reinsurer”)

ARTICLE 1

BUSINESS REINSURED

This Agreement shall cover losses occurring during the term of this Agreement
under policies, contracts and/or binders of insurance (hereinafter “Policies”),
in force at the effective date hereof or issued or renewed during the term of
this Agreement by or on behalf of the company, subject to the terms, conditions
and limitations hereinafter set forth and classified by the Company as Property
and Casualty Business, including but not limited to Homeowners and Condominium
owners Policies, written in the State of Florida.

ARTICLE 2

COVER

 

A.

As respects a loss arising out of Property Business, the Reinsurer will be
liable in respect of each and every loss, each and every Risk, for the Ultimate
Net Loss over and above an initial Ultimate Net Loss of $1,000,000 each and
every loss, each and every Risk, subject to a limit of liability to the
Reinsurer of $1,700,000 each and every loss, each and every Risk and further
subject to a limit of liability to the Reinsurer of $1,700,000 each Loss
Occurrence.

 

B.

As respects a loss arising out of a combination of Property Business and
Casualty Business, the Reinsurer will be liable in respect of each and every
Loss Occurrence, irrespective of the number and kinds of insureds or Policies in
respect of Casualty Business, and each and every risk, in respect of Property
Business, for the Ultimate Net Loss over and above an initial Ultimate Net loss
of $1,000,000 each and every Loss Occurrence, subject to a limit of liability to
the Reinsurer of $2,200,000 each and every loss Occurrence.

 

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In the event of a combined Property and Casualty Loss, for purposes of this
Agreement Casualty losses will be included in Ultimate Net Loss but will not be
recoverable hereunder.

It is warranted for purposes of this Agreement that the maximum Policy limit as
respects Casualty Business is $500,000. Any amounts greater than this maximum
limit will be reinsured elsewhere or so deemed.

The Company shall be the sole judge as to what constitutes one risk.

ARTICLE 3

TERM

This Agreement shall become effective at 12:01 a.m., Local Standard Time at the
location of the risk, June 1, 2008, and shall apply to losses arising out of
Loss Occurrences commencing at or after that time and date, and shall remain in
full force and effect until 12:01 Local Standard Time at the location of the
risk, June 1, 2009.

In the event that this Agreement is not renewed and at; the Company’s option,
run-off coverage shall be provided for all policies in force at the date of non
renewal until their natural expiry date. The Premium for this run-off period
shall be calculated by applying the adjustable rate to the unearned Premium
applicable to those policies in-force at the date of expiration.

Furthermore, with effect from 12:01 a.m. Local Standard Time at the location of
the risk, June 1, 2008, the Company may terminate or reduce a Subscribing
Reinsurer’s percentage share in this Agreement at any time by giving prior
written notice to the Subscribing Reinsurer by certified mail in the event of
any of the following:

 

1)

The Subscribing Reinsurer’s policyholders’ surplus falls by 20% or more; or

 

2)

A State Insurance Department or other legal authority orders the Subscribing
Reinsurer to ceasing writing business;

 

3)

The Subscribing Reinsurer has become insolvent or has been placed into
liquidation or receivership (whether voluntary or involuntary), or there has
been instituted against it proceedings for the appointment of a receiver,
liquidator, rehabilitator, conservator, or trustee in bankruptcy, or other agent
known by whatever name, to take possession of its assets or control of its
operation; or

 

4)

The Subscribing Reinsurer has become merged with, acquired or controlled by any
company, corporation, or individual(s) not controlling the Subscribing
Reinsurer’s operations previously; or

 

5)

The Subscribing Reinsurer’s A.M. Best’s or Standard and Poors rating is
downgraded below A- or by two grades at one time, namely A++ to A or A+ to A-.

 

6)

The Subscribing Reinsurer or ceases assuming new and renewal property treaty
reinsurance business.

 

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In the event the Company terminates or reduces a Subscribing Reinsurer’s
percentage share in accordance with this paragraph, the termination or reduction
will be effective for losses occurring on or after the date of the written
notice to the Subscribing Reinsurer and the premium due to the Subscribing
Reinsurer for any reduced percentage share for the Agreement Year will be
reduced on a pro rata basis for the portion of the Agreement Year which is
unexpired as of that date. If a loss has been paid under this Agreement or a
Subscribing Reinsurer’s share is terminated after November 30, 2008 then no such
return premium shall be made.

For the purpose of this clause Full Premium shall mean the fully adjusted
premium that would have been earned by the Reinsurer for the period of this
Reinsurance Agreement had it not been terminated, taking into account any
minimum premium condition and including any reinstatement premium in respect of
losses occurring prior to the date of termination.

Should this Agreement expire while a loss covered hereunder is in progress, the
Reinsurer shall be responsible for the loss in progress in the same manner and
to the same extent it would have been responsible had the Agreement expired the
day following the conclusion of the loss in progress.

ARTICLE 4

TERRITORY

This Agreement shall follow the territorial limits of the Company’s Original
Policies.

ARTICLE 5

EXCLUSIONS

This Agreement does not apply to and specifically excludes the following:

 

1.

All excess of loss reinsurance assumed by the Company.

 

2.

Reinsurance assumed by the Company under obligatory reinsurance agreements,
except as respects the following:

 

  a.

Agency reinsurance where the policies involved are to be re-underwritten in
accordance with the underwriting standards of the Company and reissued as
Company policies at the next anniversary or expiration date;

 

  b.

Reinsurance assumed as a result of the depopulation of the Florida Residential
Property and Casualty Joint Underwriting Association and/or any reinsurance
assumed from private carriers as a result of depopulations.

 

3.

Financial guarantee and/or insolvency business.

 

4.

Third party liability and medical payments business, unless written as part of a
Homeowners/Condominium Policy.

 

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5.

All liability of the Company arising by contract, operation of law, or
otherwise, from its participation or membership, whether voluntary or
involuntary, in any insolvency fund. “Insolvency Fund” includes any guaranty
fund, insolvency fund, plan, pool, association, fund or other arrangement,
however denominated, established or governed, which provides for any assessment
of or payment or assumption by the Company of part or all of any claim, debt,
charge, fee or other obligation of an insurer, or its successors or assigns,
which has been declared by any competent authority to be insolvent, or which is
otherwise deemed unable to meet any claim, debt, charge, fee or other obligation
in whole or in part.

 

6.

All Accident and Health, Fidelity, Surety, Boiler and Machinery, Workers’
Compensation and Credit business.

 

7.

All Ocean Marine business.

 

8.

Flood and/or earthquake when written as such.

 

9.

Difference in Conditions insurances and similar kinds of insurances, however
styled, insofar as they may provide coverage for losses from the following
causes:

 

  a.

Flood, surface water, waves, tidal water or tidal waves, overflow of streams or
other bodies of water or spray from any of the foregoing, all whether
wind-driven or not, except when covering property in transit; or

 

  b.

Earthquake, landslide, subsidence or other earth movement or volcanic eruption,
except when covering property in transit.

 

10.

Mortgage Impairment insurances and similar kinds of insurances, however styled.

 

11.

All automobile business.

 

12.

War Risks in accordance with the War exclusion clause of the original policies.

 

13.

Loss and/or Damage and/or Costs and/or Expenses arising from seepage and/or
pollution and/or contamination, other than contamination from smoke.
Nevertheless, this exclusion does not preclude any payment of the cost of
removal of debris of property damaged by a loss otherwise covered hereunder,
subject always to a limit of 25% of the Company’s property loss under the
applicable original policy.

 

14.

Nuclear risks as defined in the “Nuclear Incident Exclusion Clause—Physical
Damage Reinsurance” attached to and forming part of this Agreement.

 

15.

All liability arising out of mold, spores and/or fungus but this exclusion shall
not apply to those losses which follow as a direct result of a loss caused by a
peril otherwise covered hereunder.

 

16.

Terrorism, in accordance with NMA2930b, attached hereto.

 

17.

Any loss, costs or expense arising directly or indirectly related to lead based
paint.

 

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ARTICLE 6

DEFINITIONS

 

A.

The term “Ultimate net loss” as used herein is defined as the sum or sums
(including 90% of any extra contractual obligations, 90% of any loss in excess
of policy limits, and any loss adjustment expenses as hereinafter defined) paid
or payable by the Company in settlement of claims and in satisfaction of
judgments rendered on account of such claims, after deduction of all salvage,
all recoveries and all claims on inuring insurance or reinsurance, whether
collectible or not. Nothing herein shall be construed to mean that losses under
this Agreement are not recoverable until the Company’s Ultimate Net Loss has
been ascertained.

 

B.

With respect to Property Business, the term “Loss Occurrence” shall mean the sum
of all individual losses directly occasioned by any one disaster, accident or
loss or series of disasters, accidents or losses arising out of one event which
occurs within the area of one state of the United States or province of Canada
and states or provinces contiguous thereto and to one another. However, the
duration and extent of any one “Loss Occurrence” shall be limited to all
individual losses sustained by the Company occurring during any period of 168
consecutive hours arising out of and directly occasioned by the same event
except that the term “Loss Occurrence” shall be further defined as follows:

 

  (i)

As regards windstorm, hail, tornado, hurricane, cyclone, including ensuing
collapse and water damage, all individual losses sustained by the Company
occurring during any period of 96 consecutive hours arising out of and directly
occasioned by the same event. However, the event need not be limited to one
state or province or states or provinces contiguous thereto.

 

  (ii)

As regards riot, riot attending a strike, civil commotion, vandalism and
malicious mischief, all individual losses sustained by the Company occurring
during any period of 72 consecutive hours within the area of one municipality or
county and the municipalities or counties contiguous thereto arising out of and
directly occasioned by the same event. The maximum duration of 72 consecutive
hours may be extended in respect of individual losses which occur beyond such 72
consecutive hours during the continued occupation of an Assured’s premises by
strikers, provided such occupation commenced during the aforesaid period.

 

  (iii)

As regards earthquake (the epicenter of which need not necessarily be within the
territorial confines referred to in the opening paragraph of this Article) and
fire following directly occasioned by the earthquake, only those individual fire
losses which commence during the period of 168 consecutive hours may be included
in the Company’s “Loss Occurrence”.

 

  (iv)

As regards “Freeze”, only individual losses directly occasioned by collapse,
breakage of glass and water damage (caused by bursting of frozen pipes and
tanks) may be included in the Company’s “Loss Occurrence”.

 

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For all “Loss Occurrences”, other than (ii) above, the Company may choose the
date and time when any such period of consecutive hours commences provided that
it is not earlier than the date and time of the occurrence of the first recorded
individual loss sustained by the Company arising out of that disaster, accident
or loss and provided that only one such period of 168 consecutive hours shall
apply with respect to one event, except for any “Loss Occurrence” referred to in
sub-paragraph (i) above where only one such period of 96 consecutive hours shall
apply with respect to one event, regardless of the duration of the event.

As respects those “Loss Occurrences” referred to in (ii) above, if the disaster,
accident or loss occasioned by the event is of greater duration than 72
consecutive hours, then the Company may divide that disaster, accident or loss
into two or more “Loss Occurrences” provided no two periods overlap and no
individual loss is included in more than one such period and provided that no
period commences earlier than the date and time of the occurrence of the first
recorded individual loss sustained by the Company arising out of that disaster,
accident or loss.

No individual losses occasioned by an event that would be covered by 96 hours
clauses may be included in any “Loss Occurrence” claimed under the 168 hours
provision.

Losses directly or indirectly occasioned by:

 

  (i)

loss of, alteration of, or damage to

or

 

  (ii)

a reduction in the functionality, availability or operation of

a computer system, hardware, programme, software, data, information repository,
microchip, integrated circuit or similar device in computer equipment or
non-computer equipment, whether the property of the policyholder of the Company
or not, do not in and of themselves constitute an event unless arising out of
one or more of the following perils:

fire, lightning, explosion, aircraft or vehicle impact, falling objects,
windstorm, hail, tornado, cyclone, hurricane, earthquake, volcano, tsunami,
flood, freeze or weight of snow.

 

C.

With respect to Casualty Business, the term “Loss Occurrence” as used in this
Agreement shall mean each accident, casualty, disaster or loss, or series of
accidents, casualties, disasters or losses, arising out of or caused by one
event.

 

D.

The terms “Loss in excess of policy limits” and “extra contractual obligations”
as used herein shall be defined as follows:

 

  1.

“Loss in excess of policy limits” shall mean any amount paid or payable by the
Company in excess of its policy limits, but otherwise within the terms of its
policy, as a result of an action against it by its insured or its insured’s
assignee to recover damages the insured is legally obligated to pay because of
the

 

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Company’s alleged or actual negligence or bad faith in rejecting a settlement
within policy limits, or in discharging its duty to defend or prepare the
defense in the trial of an action against its insured, or in discharging its
duty to prepare or prosecute an appeal consequent upon such an action.

 

  2.

“Extra contractual obligations” shall mean any punitive, exemplary, compensatory
or consequential damages, other than loss in excess of policy limits, paid or
payable by the Company as a result of an action against it by its insured or its
insured’s assignee, which action alleges negligence or bad faith on the part of
the Company in handling a claim under a policy subject to this Agreement.

Notwithstanding anything stated herein, this Agreement shall not apply to any
loss in excess of policy limits or any extra contractual obligation incurred by
the Company as a result of any fraudulent and/or criminal act by any officer or
director of the Company acting individually or collectively or in collusion with
any individual or corporation or any other organization or party involved in the
presentation, defense, settlement of any claim covered hereunder.

Savings Clause (Applicable only if the Reinsurer is domiciled in the State of
New York): In no event shall coverage be provided to the extent that such
coverage is not permitted under New York law.

 

E.

The term “Loss adjustment expense” as used herein shall mean expenses assignable
to the investigation, appraisal, adjustment, settlement, litigation, defense
and/or appeal of specific claims, regardless of how such expenses are classified
for statutory reporting purposes. Loss adjustment expense shall include, but not
be limited to, interest on judgments, expenses of outside adjusters, and a pro
rata share of the salaries and expenses of the Company’s field employees
according to the time occupied adjusting such losses and expenses of the
Company’s officials incurred in connection with the losses, but excluding
salaries of the Company’s officials and any normal overhead charges, and
declaratory judgment expenses or other legal expenses and costs incurred in
connection with coverage questions and legal actions connected thereto.

 

F.

The term “Declaratory judgment expense” as used herein shall mean the Company’s
own costs and legal expense incurred in direct connection with declaratory
judgment actions brought to determine the Company’s defense and/or
indemnification obligations that are assignable to specific claims arising out
of policies reinsured by this Agreement, regardless of whether the declaratory
judgment action is considered successful or unsuccessful. Any declaratory
judgment expense will be deemed to have been incurred by the Company on the date
of the original loss, if any, giving rise to the declaratory judgment action.

 

G.

The term “Gross Net Earned Premium Income” as used herein shall mean gross
premiums earned during the period less cancellations and return premiums and
less premiums paid for reinsurance, recoveries under which shall inure to the
benefit of Reinsurers hereon.

 

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H.

The term “Agreement Year” as used herein shall be defined as the period from
12:01 a.m., Local Standard Time at the location of the risk, June 1, 2008, until
12:01 a.m., Local Standard Time at the location of the risk, June 1, 2009,
However, if this Agreement is terminated, Agreement Year as used herein shall
mean the period from 12:01 a.m., Local Standard Time at the location of the
risk, June 1, 2008 through the effective date of termination.

ARTICLE 7

NET RETAINED LINES

This Agreement applies only to that portion of any insurances or reinsurances
covered by this Agreement which the Company retains net for its own account
(prior to deduction of any underlying reinsurance specifically permitted in this
Agreement), and in calculating the amount of any loss hereunder and also in
computing the amount in excess of which this Agreement attaches, only loss or
losses in respect of that portion of any insurances or reinsurances which the
Company retains net for its own account shall be included.

It is understood and agreed that the amount of the Reinsurer’s liability
hereunder in respect of any loss or losses shall not be increased by reason of
the inability of the Company to collect from any other reinsurers, whether
specific or general, any amounts which may have become due from them, whether
such inability arises from the insolvency of such other reinsurers or otherwise.

ARTICLE 8

PREMIUM

An annual deposit premium of $500,000 shall be payable to Reinsurers in four
equal quarterly installments of $125,000 at July 1, 2008, October 1,
2008, January 1, 2009 and April 1, 2009.

As soon as practicable following the expiration of this Agreement, the Company
will calculate a premium at a rate of .325% of the Gross Net Earned Premium
Income.

Should the premium so calculated exceed the deposit premium paid in accordance
with the paragraphs above, the Company will immediately pay the Reinsurer the
difference. Should the calculated premium be less than the deposit premium, the
Reinsurer shall immediately return the difference, subject to a minimum premium
of $400,000.

ARTICLE 9

REINSTATEMENT

SECTION A only:

In the event all or any portion of the reinsurance hereunder is exhausted by
loss, the amount so exhausted shall be reinstated immediately from the time the
Loss Occurrence commences. For each amount of limit reinstated the Company
agrees to pay the Reinsurer an additional premium calculated at pro rata of 50%
of the Reinsurer’s premium, being pro rata only as to

 

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the fraction of the face value of this Agreement (i.e., the fraction of
$1,700,000) so reinstated. Nevertheless, the Reinsurer’s liability for losses
hereunder shall never exceed $1,700,000 in respect of each and every Loss, each
and every Risk, and shall be further limited to $3,400,000 in all during the
term of this Agreement.

ARTICLE 10

NOTICE OF LOSS AND LOSS SETTLEMENTS

The Company shall notify the Reinsurer promptly of all claims which, in the
opinion of the Company, may involve the Reinsurer, and of all subsequent
developments regarding these claims which may materially affect the position of
the Reinsurer. The notification shall be made in the form of a report, submitted
no less frequently than on a quarterly basis, that details losses paid and
expected Ultimate Net Losses for each claim related to a Loss Occurrence subject
to this Agreement.

All loss settlements made by the Company, provided they are within the terms of
the Company’s original policies and of this Agreement, shall be binding upon
Reinsurers and amounts falling to the share of Reinsurers shall be payable
without delay upon reasonable evidence of the amount being given by the Company.

ARTICLE 11

SALVAGE AND SUBROGATION (BRMA 47E)

The Reinsurer shall be credited with salvage or subrogation recoveries (i.e.,
reimbursement obtained or recovery made by the Company, less loss adjustment
expense incurred in obtaining such reimbursement or making such recovery) and
receivables from future policyholder assessments on account of claims and
settlements involving reinsurance hereunder. Salvage thereon shall always be
used to reimburse the excess carriers in the reverse order of their priority
according to their participation before being used in any way to reimburse the
Company for its primary loss. The Company hereby agrees to enforce its rights to
salvage or subrogation relating to any loss, a part of which loss was sustained
by the Reinsurer, and to prosecute all claims arising out of such rights.

ARTICLE 12

OFFSET (BRMA 36C)

The Company and the Reinsurer shall have the right to offset any balance or
amounts due from one party to the other under the terms of the Agreement. The
party asserting the right of offset may exercise such right any time whether the
balances due are on account of premiums or losses or otherwise.

 

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ARTICLE 13

UNAUTHORIZED REINSURANCE

(Applies only to a Reinsurer who does not qualify for full credit with any
insurance regulatory authority having jurisdiction over the Company’s reserves.)

As regards policies or bonds issued by the Company coming within the scope of
this Agreement, the Company agrees that when it shall file with the insurance
regulatory authority or set up on its books reserves for unearned premium and
losses covered hereunder which it shall be required by law to set up, it will
forward to the Reinsurer a statement showing the proportion of such reserves
which is applicable to the Reinsurer. The Reinsurer hereby agrees to fund such
reserves in respect of unearned premium (including but not limited to, the
unearned portion of any deposit premium installment), known outstanding losses
that have been reported to the Reinsurer and allocated loss adjustment expense
relating thereto, and losses and allocated loss adjustment expense paid by the
Company but not recovered from the Reinsurer, including ail case reserves plus
any reasonable amount estimated to be unreported from known Loss Occurrences as
shown in the statement prepared by the Company (hereinafter referred to as
“Reinsurer’s Obligations”) by funds withheld, cash advances or a Letter of
Credit. The Reinsurer shall have the option of determining the method of funding
provided it is acceptable to the insurance regulatory authorities having
jurisdiction over the Company’s reserves.

When funding by a Letter of Credit, the Reinsurer agrees to apply for and secure
timely delivery to the Company of a clean, irrevocable and unconditional Letter
of Credit issued by a bank and containing provisions acceptable to the insurance
regulatory authorities having jurisdiction over the Company’s reserves in an
amount equal to the Reinsurer’s proportion of said reserves, Such Letter of
Credit shall be issued for a period of not less than one year, and shall be
automatically extended for one year from its date of expiration or any future
expiration date unless thirty (30) days (sixty (60) days where required by
insurance regulatory authorities) prior to any expiration date the issuing bank
shall notify the Company by certified or registered mail that the issuing bank
elects not to consider the Letter of Credit extended for any additional period.

The Reinsurer and Company agree that the Letters of Credit provided by the
Reinsurer pursuant to the provisions of this Agreement may be drawn upon at any
time, notwithstanding any other provision of this Agreement, and be utilized by
the Company or any successor, by operation of law, of the Company including,
without limitation, any liquidator, rehabilitator, receiver or conservator of
the Company for the following purposes, unless otherwise provided for in a
separate Trust Agreement:

 

  (a)

to reimburse the Company for the Reinsurer’s Obligations, the payment of which
is due under the terms of this Agreement and which has not been otherwise paid;

 

  (b)

to make refund of any sum which is in excess of the actual amount: required to
pay the Reinsurer’s Obligations under this Agreement;

 

  (c)

to fund an account with the Company for the Reinsurer’s Obligations. Such cash
deposit shall be held in an interest bearing account separate from the Company’s
other assets, and interest thereon not in excess of the prime rate shall accrue
to the benefit of the Reinsurer;

 

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  (d)

to pay the Reinsurer’s share of any other amounts the Company claims are due
under this Agreement.

In the event the amount drawn by the Company on any Letter of Credit is in
excess of the actual amount required for (a) or (c), or in the case of (d), the
actual amount determined to be due, the Company shall promptly return to the
Reinsurer the excess amount so drawn. All of the foregoing shall be applied
without diminution because of insolvency on the part of the Company or the
Reinsurer.

The issuing bank shall have no responsibility whatsoever in connection with the
propriety of withdrawals made by the Company or the disposition of funds
withdrawn, except to ensure that withdrawals are made only upon the order of
properly authorized representatives of the Company.

At annual intervals, or more frequently as agreed but never more frequently than
quarterly, the Company shall prepare a specific statement of the Reinsurer’s
Obligations, for the sole purpose of amending the Letter of Credit, in the
following manner:

 

  (a)

If the statement shows that the Reinsurer’s Obligations exceed the balance of
credit as of the statement date, the Reinsurer shall, within thirty (30) days
after receipt of notice of such excess, secure delivery to the Company of an
amendment to the Letter of Credit increasing the amount of credit by the amount
of such difference,

 

  (b)

If, however, the statement shows that the Reinsurer’s Obligations are less than
the balance of credit as of the statement date, the Company shall, within thirty
(30) days after receipt of written request from the Reinsurer, release such
excess credit by agreeing to secure an amendment to the Letter of Credit
reducing the amount of credit available by the amount of such excess credit.

ARTICLE 14

TAXES

The Company will be liable for taxes (except Federal Excise Tax) on premiums
reported to the Reinsurer hereunder.

Federal Excise Tax applies only to those Reinsurers, excepting Underwriters at
Lloyd’s London and other Reinsurers exempt from the Federal Excise Tax, who are
domiciled outside the United States of America.

The Reinsurer has agreed to allow for the purposes of paying the Federal Excise
Tax 1% of the premium payable hereon to the extent such premium is subject to
Federal Excise Tax.

In the event of any return of premium becoming due hereunder the Reinsurer will
deduct 1% from the amount of the return of the Company or its agent should take
steps to recover the Tax from the U.S. Government.

 

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ARTICLE 15

CURRENCY

The currency to be used for all purposes of this Agreement shall be United
States of America currency.

ARTICLE 16

DELAY, OMISSION OR ERROR

Any inadvertent delay, omission or error shall not be held to relieve either
party hereto from any liability which would attach to it hereunder if such
delay, omission or error had not been made, providing such delay, omission or
error is rectified upon discovery.

ARTICLE 17

ACCESS TO RECORDS

The Reinsurers or their designated representatives shall have free access at any
reasonable time to view and/or copy all records of the Company which pertain in
any way to this Agreement. This article shall survive termination and remain in
force as long as any liability remains under this Agreement.

ARTICLE 18

ARBITRATION

Conditions Precedent As a condition precedent to any right of action under this
Agreement, any dispute arising out of or in connection with this Agreement
between the Company and any Reinsurer hereon (whether or not arising during the
term of this Agreement or after expiration or termination of this Agreement),
other than as to its actual formation or validity but including interpretation
or implementation of its terms, will be submitted to the decision of a board of
arbitration composed of two (2) arbitrators and an umpire meeting at a site in
the city or town in which the Company is domiciled.

Submission to Arbitration Notice requesting arbitration or any other notice made
in connection therewith will be in writing and sent certified or registered
mail, return receipt requested. The notice requesting arbitration will state in
particular all issues to be resolved in the view of the claimant, will appoint
the arbitrator selected by the claimant and will set a date for the hearing,
which date will be no sooner than ninety (90) days and no later than one hundred
and fifty (150) days from the date that the notice requesting arbitration is
mailed. Notwithstanding the foregoing, the board, at its discretion, may defer
the date for hearing, but it is the express intention of the parties that any
dispute shall be expeditiously and timely resolved but with all due
consideration to the rights of the respective parties and the board shall be
mindful of this intent. Within thirty (30) days of receipt of the claimant’s
notice, the respondent will notify the claimant of any additional issues to be
resolved in the arbitration and of the name of its appointed arbitrator.

 

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Arbitrator Board Membership The arbitrators will be active or retired
disinterested officials of insurance or reinsurance companies or Underwriting
Members of Lloyd’s who have experience of the class of business which is the
subject matter of this Agreement. The Company and the Reinsurer as aforesaid
will each appoint an arbitrator and the two (2) arbitrators will choose and
appoint an umpire who will be an active or retired disinterested official of an
insurance or reinsurance company or an Underwriting Member of Lloyd’s or an
attorney before instituting the hearing. If the respondent fails to appoint its
arbitrator within thirty (30) days after having received the claimant’s written
request for arbitration, the claimant is authorized to and will appoint the
second arbitrator. If the two (2) arbitrators fail to agree upon the appointment
of an umpire within thirty (30) days after notification of the appointment of
the second arbitrator, within ten (10) days thereof, the two (2) arbitrators
will request the American Arbitration Association to appoint an umpire for the
arbitration with the qualifications set forth above in this Article.
Notwithstanding the appointment of an umpire by the American Arbitration
Association, the arbitration proceedings shall not be governed by the American
Arbitration Association’s commercial arbitration rules. The umpire will promptly
notify in writing all parties to the arbitration of his selection.

Submission of Briefs The claimant and respondent will each submit initial briefs
to the board of arbitration outlining the issues in dispute and the basis and
reasons for their respective positions within thirty (30) days of the date of
notice of appointment of the umpire. The claimant and the respondent may submit
reply briefs within ten (10) days after filing of the initial brief(s). Initial
and reply briefs may be amended by the submitting party at any time, but not
later than ten (10) days prior to the date of commencement of the arbitration.
Reasonable responses will be allowed at the arbitration to new material
contained in any amendments filed to the briefs but not previously responded to.

Arbitration Award The board will make its award with regard to this Agreement
recognizing the custom and the usage of the insurance and reinsurance business.
The award will be in writing and will state the factual and a legal basis for
the award. The award will be based upon a hearing in which evidence will be
allowed and in which the formal rules of evidence will not apply, but in which
cross examination and rebuttal will be allowed. At its own election or at the
request of the board, either party may submit a post-hearing brief for
consideration of the board in its decision within twenty (20) days of the close
of the hearing. The board will make its award within thirty (30) days following
the close of the hearing or the submission of post-hearing briefs, whichever is
later, unless the parties consent to an extension. A decision by the majority of
the members of the board will be final and binding upon all parties to the
proceeding. Either party may apply to any court of competent jurisdiction for an
order confirming the award; a judgment of such court will thereupon be entered
on the award. If such an order is issued, the attorneys’ fees of the party so
applying and court costs will be paid by the party against whom confirmation is
sought

Arbitration Expenses Each party will bear the expense of the one arbitrator to
be selected by it and will jointly and equally bear with the other party(ies)
the expense of any stenographer requested, and of the umpire. The remaining
costs of the arbitration proceedings will be finally allocated by the board.

Discovery Subject to customary and recognized legal rules of privilege, each
party participating in the arbitration will have the obligation to produce as
witnesses to the arbitration such of its employees or those of its affiliates or
of its brokers or agents as any

 

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other participating party may request, providing always that the same witnesses
and documents be relevant to the issues before the arbitration and provided
further that the parties may mutually agree as to further discovery prior to the
arbitration. The umpire will be the final judge of rules of privilege and as to
relevancy of any witnesses and documents upon the petition of any participating
party, and may require such disclosure as he or she sees fit.

Consolidation To the extent agreed by the Company, the original arbitrating
Reinsurer and other Reinsurers hereon where the issues in dispute between the
Company and the original arbitrating Reinsurer are related or largely identical
or similar with issues in dispute between the Company and other Reinsurers
hereon, all parties may join together in a consolidated arbitration under the
terms and conditions contained in this Agreement to resolve all common issues,
provided however, that:

 

a)

the two (2) arbitrators and umpire will be appointed by the Company and the
original arbitrating Reinsurer;

 

b)

each party to a consolidated arbitration will have the right to its own
attorney, position, and related claims and defenses;

 

c)

each party will not, in presenting its position, be prevented from presenting
its position by the position put forth by any other party; and

 

d)

the cost and the expenses of the arbitration, including the fees of the
arbitrators, exclusive of attorney’s fees, which will be borne exclusively by
the respective retaining party, will be borne pro rata by each party
participating in the consolidated arbitration.

Procedure To the extent not otherwise mutually agreed or provided for in this
Article, the procedures and rules applicable to arbitration under the laws of
the state in which the Company is domiciled, will govern the procedures of the
arbitration with the appointed umpire fulfilling the role and authority of the
judge unless the parties otherwise mutually agree.

ARTICLE 19

SERVICE OF SUIT

It is agreed that in the event of the failure of the Reinsurers hereon to pay
any amount claimed to be due hereunder, the Reinsurers hereon, at the request of
the Company, will submit to the jurisdiction of a Court of competent
jurisdiction within the United States. Nothing in this Clause constitutes or
should be understood to constitute a waiver of Reinsurers’ rights to commence an
action in any Court of competent jurisdiction in the United States, to remove an
action to a United States District Court, or to seek a transfer of a case to
another Court as permitted by the laws of the United States or of any State in
the United States. It is further agreed that service of process in such suit may
be made upon Messrs Mendes and Mount, 750 Seventh Avenue, New York, New York
10019-6829, and that in any suit instituted against any one of them upon this
Agreement, Reinsurers will abide by the final decision of such Court or of any
Appellate Court in the event of an appeal.

 

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The above-named are authorized and directed to accept service of process on
behalf of Reinsurers in any such suit and/or upon the request of the Company to
give a written undertaking to the Company that they will enter a general
appearance upon Reinsurers’ behalf In the event such a suit shall be instituted.

Further, pursuant to any statute of any state, territory or district of the
United States which makes provision therefore, Reinsurers hereon hereby
designate the Superintendent, Commissioner or Director of Insurance or other
officer specified for that purpose in the statute, or his successor or
successors in office, as their true and lawful attorney upon whom may be served
any lawful process in any action, suit or proceeding instituted by or on behalf
of the Company or any beneficiary hereunder arising out of this Agreement of
insurance (or reinsurance), and hereby designate the above-named as the person
to whom the said officer is authorized to mail such process or a true copy
thereof.

ARTICLE 20

INSOLVENCY

In the event of the insolvency of the Company, the reinsurance under this
Agreement shall be payable by the Reinsurer to the Company or its liquidator,
receiver or statutory successor on the basis of the liability of the Company
under the Original Policy or policies reinsured, without diminution because of
the insolvency of the Company, except as provided by Section 4118 (a) of the New
York Insurance Law except (a) where this Agreement specifically provides another
payee for such insurance in the event of the insolvency of the Company and
(b) where a Reinsurer(s) subscribing a participation hereunder with the consent
of the original insured or insureds, has assumed such policy obligations of the
Company to such payees.

If the Company should become insolvent, then the liquidator, receiver or
statutory successor of the Company shall give written notice to the Reinsurer of
the pendency of any claim against the Company which is likely to produce a loss
under this Agreement within a reasonable time after such claim if filed in the
insolvency proceeding; during the pendency of such claim, the Reinsurer under
this Agreement may investigate such claim and interpose, at its own expense, in
the proceeding where such claim is to be adjudicated, any defense or defenses
which the Reinsurer may deem available to the Company or its liquidator or
receiver or statutory successor. The expense thus incurred by the Reinsurer
shall be chargeable, subject to court approval, against the insolvent Company as
part of the expense of liquidation to the extent of the benefit which may accrue
to the Company solely as a result of the defense undertaken by the Reinsurer.

If those Reinsurers subscribing a majority participation in this Agreement elect
to interpose defense to a claim, the expense shall be apportioned in accordance
with the terms of this Agreement as though such expenses had been incurred by
the Company.

Should the Company go into liquidation or should a receiver be appointed the
Reinsurer shall be entitled to deduct from any sums which may be due or may
become due to the Company under this Agreement, any sums which are due to the
Reinsurer by the Company under this Agreement and which are due at a fixed or
stated date, as well as any other sums due to the Reinsurer which are permitted
to be offset under applicable law.

 

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ARTICLE 21

THIRD PARTY RIGHTS (BRMA 52C)

This Agreement is solely between the Company and the Reinsurer, and in no
instance shall any other party have any rights under this Agreement except as
expressly provided otherwise in the Insolvency Article.

ARTICLE 22

SEVERABILITY

If any provision of this Agreement shall be rendered illegal or unenforceable by
the laws, regulations or public policy of any state, such provision shall be
considered void in such state, but this shall not affect the validity or
enforceability of any other provision of this Agreement or the enforceability of
such provision in any other jurisdiction.

ARTICLE 23

CONFIDENTIALITY

For a period of three years following the termination or expiration of this
Agreement, the contracting parties undertake to regard the terms of this
Agreement (and any confidential, proprietary information relating thereto
provided in writing to such other party) as confidential, with the parties to
effect the same prudence and care afforded by such party to its own
confidential, proprietary information. Each party further agrees that it shall
not disclose any of such information to any third party without the prior
written consent of the other party or except as may be required by applicable
law or regulation, or by legal process (including without limitation as may be
required by United States Federal tax law or regulation), or to the auditors,
professional advisors, accountants, retrocessionaires, related managing general
agents, directors or officers of such party with a reasonable need to know such
information. Except as expressly set forth above, the parties agree and
acknowledge that this Article is not intended to restrict or limit the conduct
of the other party’s current or proposed business.

ARTICLE 24

ENTIRE AGREEMENT (BRMA 74B)

This Agreement constitutes the entire agreement between the parties. In no event
shall this Agreement provide any guarantee of profit, directly or indirectly,
from the Reinsurer to the Company or from the Company to the Reinsurer. This
Agreement may be clarified, amended or modified only by written agreement signed
by both parties. Such written agreement shall become part of this Agreement.

 

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ARTICLE 25

LAW AND JURISDICTION

This Agreement shall be governed by the laws of the State of Florida and shall
be subject to the jurisdiction of the courts of the United States of America
(subject to the provisions of the Service of Suit Clause (U.S.A.).

ARTICLE 26

INTERMEDIARY

BMS Intermediaries Ltd., One America Square, London, EC3N 2LS is hereby
recognized as the Intermediary negotiating this Agreement for all business
hereunder. All communications (including but not limited to notices, statements,
premiums, return premiums, commissions, taxes, losses, loss adjustment expense,
salvages and loss settlements) relating thereto shall be transmitted to the
Company or the Reinsurer through BMS Intermediaries Ltd. Payments by the Company
to the Intermediary shall be deemed to constitute payment to the Reinsurer.
Payments by the Reinsurer to the Intermediary shall be deemed only to constitute
payment to the Company to the extent that such payments are actually received by
the Company.

ARTICLE 27

MODE OF EXECUTION

A. This Agreement may be executed by:

 

  1.

an original written ink signature of paper documents;

 

  2.

an exchange of facsimile copies showing the original written ink signature of
paper documents;

 

  3.

electronic signature technology employing computer software and a digital
signature or digitizer pen pad to capture a person’s handwritten signature in
such a manner that the signature is unique to the person signing, is under the
sole control of the person signing, is capable of verification to authenticate
the signature and is linked to the document signed in such a manner that if the
data is changed, such signature is invalidated.

 

B.

The use of any one or a combination of these methods of execution shall
constitute a legally binding and valid signing of this Agreement. This Agreement
may be executed in one or more counterparts, each of which, when duly executed,
shall be deemed an original.

Signed in St Petersburg, Florida this                          day of
                , 2008

 

For and on behalf of the Company   

 

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TERRORISM EXCLUSION

Notwithstanding any provision to the contrary within this reinsurance agreement
or any endorsement thereto, it is agreed that this reinsurance agreement
excludes loss, damage, cost, or expense directly or indirectly caused by,
contributed to by, resulting from, or arising out of or in connection with any
act of terrorism, as defined herein, regardless of any other cause or event
contributing concurrently or in any other sequence to the loss.

An act of terrorism includes any act, or preparation in respect of action, or
threat of action designed to influence the government de jure or de facto of any
nation or any political division thereof, or in pursuit of political, religious,
ideological, or similar purposes to intimidate the public or a section of the
public of any nation by any person or group(s) of persons whether acting alone
or on behalf of or in connection with any organization(s) or government(s) de
jure or de facto, and which:

 

  (i)

involves violence against one or more persons; or

 

  (ii)

involves damage to property; or

 

  (iii)

endangers life other than that of the person committing the action; or

 

  (iv)

creates a risk to health or safety of the public or a section of the public; or

 

  (v)

is designed to interfere with or to disrupt an electronic system.

This reinsurance agreement also excludes loss, damage, cost, or expense directly
or indirectly caused by, contributed to by, resulting from, or arising out of or
in connection with any action in controlling, preventing, suppressing,
retaliating against, or responding to any act of terrorism.

Notwithstanding the above and subject otherwise to the terms, conditions, and
limitations of this reinsurance agreement in respect only of personal lines this
reinsurance agreement will pay actual loss or damage (but not related cost or
expense) caused by any act of terrorism provided such act is not directly or
indirectly caused by, contributed to by, resulting from, or arising out of or in
connection with biological, chemical, or nuclear pollution or contamination.

19/12/01

NMA2930B

 

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NUCLEAR INCIDENT EXCLUSION CLAUSE - PHYSICAL-DAMAGE - REINSURANCE - U.S.A.

 

1.

This Contract does not cover any loss or liability accruing to the Reassured,
directly or indirectly, and whether as Insurer or Reinsurer, from any Pool of
Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear
Energy risks.

 

2.

Without in any way restricting the operation of paragraph (1) of this Clause,
this Contract does not cover any loss or liability accruing to the Reassured,
directly or indirectly and whether as Insurer or Reinsurer, from any insurance
against Physical Damage (including business interruption or consequential loss
arising out of such Physical Damage) to:

 

  I.

Nuclear reactor power plants including all auxiliary property on the site, or

 

  II.

Any other nuclear reactor, installation, including laboratories handling
radioactive materials in connection with reactor installations, and “critical
facilities” as such, or

 

  III.

Installations for fabricating complete fuel elements or for processing
substantial quantities of “special nuclear material,” and for reprocessing,
salvaging, chemically separating, storing or disposing of “spent” nuclear fuel
or waste materials, or

 

  IV.

Installations other than those listed in paragraph (2) III above using
substantial quantities of radioactive isotopes or other products of nuclear
fission.

 

3.

Without in any way restricting the operation of paragraphs (1) and (2) hereof,
this Contract does not cover any loss or liability by radioactive contamination
accruing to the Reassured, directly or indirectly, and whether as Insurer or
Reinsurer, from any insurance on property which is on the same site as a nuclear
reactor power plant or other nuclear installation and which normally would be
insured therewith except that this paragraph (3) shall not operate.

 

  (a)

where Reassured does not have knowledge of such nuclear reactor power plant or
nuclear installation, or

 

  (b)

where the said insurance contains a provision excluding coverage for damage to
property caused by or resulting from radioactive contamination, however caused.
However, on and after 1st January, 1960 this sub-paragraph (b) shall only apply
provided the said radioactive contamination exclusion provision has been
approved by the Governmental Authority having jurisdiction thereof.

 

4.

Without in any way restricting the operation of paragraphs (1), (2) and
(3) hereof, this Contract does not cover any loss or liability by radioactive
contamination accruing to the Reassured, directly or indirectly, and whether as
Insurer or Reinsurer, when such radioactive contamination is a named hazard
specifically insured against.

 

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5.

It is understood and agreed that this Clause shall not extend to risks using
radioactive isotopes in any form where the nuclear exposure is not considered by
the Reassured to be the primary hazard.

 

6.

The term “special nuclear material” shall have the meaning given it in the
Atomic Energy Act of 1954 or by any law amendatory thereof.

 

7.

Reassured to be sole judge of what constitutes:

 

  (a)

substantial quantities, and

 

  (b)

the extent of installation, plant or site.

Note - Without in any way restricting the operation of paragraph (I) hereof, it
is understood and agreed that

 

  (a)

all policies issued by the Reassured on or before 31st December 1957 shall be
free from the application of the other provisions of this Clause until expiry
date or 31st December 1960 whichever first occurs whereupon all the provisions
of this Clause shall apply.

 

  (b)

with respect to any risk located in Canada policies issued by the Reassured on
or before 31st December 1958 shall be free from the application of the other
provisions of this Clause until expiry date or 31st December 1960 whichever
first occurs whereupon all the provisions of this Clause shall apply.

In accordance with NMA 1119 (12/12/57)

 

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Contract No. A84522002

INTERESTS AND LIABILITIES CONTRACT

to

MULTI-LINE PER RISK

EXCESS OF LOSS REINSURANCE AGREEMENT

issued to

UNITED PROPERTY AND CASUALTY INSURANCE COMPANY

St Petersburg, Florida

(hereinafter referred to as the “Company”)

by

(hereinafter referred to as the “Subscribing Reinsurer”)

The Subscribing Reinsurer’s share in the Interests and Liabilities of the
Reinsurers as set forth in the AGREEMENT attached hereto and made part of this
Contract shall be for the percentage stated below.

The share of the Subscribing Reinsurer in the Interests and Liabilities of the
Reinsurers in respect of the said AGREEMENT shall be separate and apart from the
shares of the other Subscribing Reinsurers to the said AGREEMENT, and the
Interests and Liabilities of the Subscribing Reinsurer shall not be joint with
those of the other Subscribing Reinsurers and in no event shall the Subscribing
Reinsurer participate in the Interests and Liabilities of the other Subscribing
Reinsurers.

The terms of this Interests and Liabilities Contract shall be from 12:01 a.m.
Local Standard Time at the location of the risk, 1st June, 2008, to 12:01 am
Local Standard Time at the location of the risk, 1st June, 2009.

Signed in _________________ this _____ day of ____________, 2008

 

  

 

For and on behalf of the Subscribing Reinsurer:

  

Participation hereon:

 

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