EXHIBIT 10.3

Multiple Line Quota Share
Reinsurance Contract
Effective: June 1, 2008
  

issued to
  
Universal Property and Casualty Insurance Company
Fort Lauderdale, Florida
  

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Table of Contents

  

Article
  

 

Page

I

 

Classes of Business Reinsured

1

II

 

Term

1

III

 

Special Termination

3

IV

 

Definitions

4

V

 

Territory (BRMA 51A)

5

VI

 

Exclusions

5

VII

 

Coverage

9

VIII

 

Loss in Excess of Policy Limits/ECO

10

IX

 

Other Reinsurance and FHCF Coverage

11

X

 

Accounting Basis

12

XI

 

Reinsurance Premium

12

XII

 

Commission

12

XIII

 

Contingent Commission

12

XIV

 

Reports and Remittances

13

XV

 

Loss Settlements

13

XVI

 

Salvage and Subrogation

14

XVII

 

Errors and Omissions (BRMA 14F)

14

XVIII

 

Offset (BRMA 36C)

14

XIX

 

Currency (BRMA 12A)

14

XX

 

Taxes (BRMA 50B)

15

XXI

 

Federal Excise Tax (BRMA 17D)

15

XXII

 

Unauthorized Reinsurance

15

XXIII

 

Original Conditions

17

XXIV

 

Third Party Rights (BRMA 52C)

17

XXV

 

Severability (BRMA 72A)

17

XXVI

 

Governing Law (BRMA 71A)

17

XXVII

 

Access to Records (BRMA 1E)

17

XXVIII

 

Confidentiality (BRMA 69D)

17

XXIX

 

Insolvency

18

XXX

 

Arbitration (BRMA 6J)

18

XXXI

 

Service of Suit (BRMA 49C)

19

XXXII

 

Mode of Execution

20

XXXIII

 

Intermediary (BRMA 23A)

20

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Multiple Line Quota Share
Reinsurance Contract
Effective: June 1, 2008
  

issued to
  
Universal Property and Casualty Insurance Company
Fort Lauderdale, Florida
(hereinafter referred to as the “Company”)
  
by
  
The Subscribing Reinsurer(s) Executing the
Interests and Liabilities Agreement(s)
Attached Hereto
(hereinafter referred to as the “Reinsurer”)
  

Article I - Classes of Business Reinsured
  

A.

By this Contract the Reinsurer agrees to reinsure the Net Liability of the
Company under its Policies in force at the effective time and date hereof or
issued or renewed at or after that time and date, and underwritten and
classified by the Company as Allied Lines, Extended Coverage, Dwelling Fire,
Homeowners Multiple Peril, Condominium Contents, Inland Marine, and Personal
Liability when written in conjunction with Dwelling Coverage, but not to include
business classified by the Company as ex-wind.
  

B.

The liability of the Reinsurer with respect to each cession hereunder shall
commence obligatorily and simultaneously with that of the Company, subject to
the terms, conditions and limitations hereinafter set forth.
  

Article II - Term
  

A.

This Contract shall become effective at 12:01 a.m., Eastern Daylight Time,
June 1, 2008, with respect to losses arising out of Loss Occurrences commencing
at or after that time and date, and shall continue in force thereafter until
terminated.
  

B.

This Contract may be terminated by either party at 12:01 a.m., Eastern Daylight
Time, on June 1, 2009, or at 12:01 a.m., Eastern Daylight Time, on any June 1
thereafter by giving to the other party not less than 90 days prior notice by
certified mail.
  

C.

If this Contract is terminated or if a Contract Year concludes while a Loss
Occurrence covered hereunder is in progress, the Reinsurer’s liability hereunder
shall, subject to the other terms and conditions of this Contract, be determined
as if the entire Loss Occurrence had occurred prior to the termination of this
Contract or prior to the conclusion of the Contract Year, provided that no part
of such Loss Occurrence is claimed against any renewal or replacement of this
Contract.
  

  

BENFIELD

Page 1

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D.

Upon termination of this Contract, the Company shall reassume the ceded unearned
premium (less any ceding commission thereon) in force at the effective time and
date of termination, whereby the Reinsurer shall have no liability for losses
occurring subsequent to the effective time and date of termination of this
Contract.
  

E.

Notwithstanding paragraph D above, at termination of this Contract, upon mutual
agreement by the parties hereto, the Reinsurer shall remain liable for all
Policies covered by this Contract that are in force at the effective time and
date of termination, until the termination, expiration or renewal of such
Policies, whichever occurs first, but not to extend beyond 12 months after the
effective time and date of termination.
  

F.

If this Contract is terminated at 12:01 a.m., Eastern Daylight Time, June 1,
2009, and does not expire in accordance with paragraph E above, the Company
shall have the option, upon 10 days written notice prior to the effective time
and date of termination of this Contract, to purchase $120,000,000 of
catastrophe limits from the Reinsurer for losses arising under Policies that
remain in force, for losses that occur during the 12-month period commencing
12:01 a.m., Eastern Daylight Time, June 1, 2009. The catastrophe limit available
to the Company shall be the lesser of $120,000,000 or the 100-year PML,
including storm surge and loss amplification, using AIR 9.5 Detailed Loss Model
and the AIR historical windstorm event set, calculated as of 12:01 a.m., Eastern
Daylight Time, June 1, 2009, less recoveries from the Florida Hurricane
Catastrophe Fund (hereinafter the “FHCF”) as established for Policies in effect
at June 1, 2009 (hereinafter the “Additional Property Catastrophe Limit”). In
the event the FHCF has not established the structure for the 2009/2010 contract
year, the catastrophe limit calculation shall be recalculated once the FHCF
2009/2010 contract year structure has been determined. The purchase price for
the Additional Property Catastrophe Limit shall be at the Reinsurer’s price, but
in no event greater than a 34.5% rate-on-line. The attachment point of the
Additional Property Catastrophe Limit shall be the lesser of $30,000,000 or
25.0% of the Additional Property Catastrophe Limit, subject to a minimum
attachment point of $15,000,000.
  

G.

Any loss payments under paragraph F above shall reduce the limit of coverage
afforded by the amounts paid, but the limit of coverage shall be reinstated from
the time of the occurrence of the loss, and for each amount so reinstated, the
Company agrees to pay an additional premium calculated at pro rata of the
Reinsurer’s premium for the Additional Property Catastrophe Limit, being pro
rata only as to the fraction of the Additional Property Catastrophe Limit so
reinstated. Nevertheless, the Reinsurer’s liability hereunder shall not exceed
the Additional Property Catastrophe Limit, in respect of any one Loss
Occurrence, and shall not exceed two times the Additional Property Catastrophe
Limit in respect of all Loss Occurrences during the 12-month period commencing
12:01 a.m., Eastern Daylight Time, June 1, 2009.
  

H.

All other terms and conditions applicable to the purchase by the Company of said
Additional Property Catastrophe Limit(s) shall be subject to mutual agreement
between the Company and the Reinsurer.
  

  

BENFIELD

Page 2

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Article III - Special Termination
  

A.

Notwithstanding the provisions of the Term Article, the Company may terminate a
subscribing reinsurer’s percentage share in this Contract at any time by giving
prior written notice to the subscribing reinsurer in the event any of the
following circumstances occur:
  

 

1.

The subscribing reinsurer’s policyholders’ surplus (or its equivalent under the
subscribing reinsurer’s accounting system) at the beginning of any Contract Year
has been reduced by more than 20.0% of the amount of surplus (or the applicable
equivalent) 12 months prior to that date; or
  

 

2.

The subscribing reinsurer’s policyholders’ surplus (or its equivalent under the
subscribing reinsurer’s accounting system) at any time during the Contract Year
has been reduced by more than 20.0% of the amount of surplus (or the applicable
equivalent) at the date of the subscribing reinsurer’s most recent financial
statement filed with regulatory authorities and available to the public as of
the Contract Year; or
  

 

3.

The subscribing reinsurer’s A.M. Best’s rating has been assigned or downgraded
below A- and/or Standard and Poor’s rating has been assigned or downgraded below
BBB+; or
  

 

4.

The subscribing reinsurer has become merged with, acquired by or controlled by
any other entity or individual(s) not controlling the subscribing reinsurer’s
operations previously; or
  

 

5.

A State Insurance Department or other legal authority has ordered the
subscribing reinsurer to cease writing business; or
  

 

6.

The subscribing reinsurer has become insolvent or has been placed into
liquidation or receivership (whether voluntary or involuntary) or proceedings
have been instituted against the subscribing reinsurer 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 operations; or
  

 

7.

The subscribing reinsurer has reinsured its entire liability under this Contract
without the Company’s prior written consent; or
  

 

8.

The subscribing reinsurer has ceased assuming new or renewal property or
casualty treaty reinsurance business.
  

B.

In the event of such termination, the liability of the subscribing reinsurer
shall be terminated in accordance with the termination provisions of the Term
Article except that the prior written notice given the subscribing reinsurer in
paragraph A above will apply as regards notice of termination. Notwithstanding
the termination provisions of the Term Article, the Company shall have the
right, by giving the subscribing reinsurer prior notice in writing via certified
mail, to relieve the subscribing reinsurer of liability for losses occurring
subsequent to the date of termination, and, as a result, the subscribing
reinsurer shall return the unearned portion, if any, of any reinsurance premium
paid hereunder.
  

  

BENFIELD

Page 3

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Article IV – Definitions
  

A.

Contract Quarter
  

 

“Contract Quarter” as used herein shall mean the period from 12:01 a.m., Eastern
Daylight Time, June 1, 2008, to 12:01 a.m., Eastern Daylight Time, September 1,
2008, and each respective three-month period (or portion thereof) thereafter.
  

B.

Contract Year
  

 

“Contract Year” as used herein shall mean the period from 12:01 a.m., Eastern
Daylight Time, June 1, 2008, to 12:01 a.m., Eastern Daylight Time, June 1, 2009,
and each respective 12-month period (or portion thereof) thereafter that this
Contract continues in force. However, if this Contract is terminated, the final
Contract Year shall be from the beginning of the then current Contract Year
through the date of termination if this Contract is terminated on a “cutoff”
basis, or the end of the runoff period if this Contract is terminated on a
“runoff” basis.
  

C.

Declaratory Judgment Expense
  

 

“Declaratory Judgment Expense” as used herein shall mean all expenses incurred
by the Company in connection with a declaratory judgment action brought to
determine the Company’s defense and/or indemnification obligations that are
allocable to a specific claim subject to this Contract. Declaratory Judgment
Expense shall be deemed to have been incurred on the date of the original loss
(if any) giving rise to the declaratory judgment action.
  

D.

Gross Net Premiums Earned
  

 

“Gross Net Premiums Earned” as used herein is defined as Gross Premiums Earned,
less premiums paid for inuring reinsurance identified in the Other Reinsurance
and FHCF Coverage Article.
  

E.

Gross Net Written Premium
  

 

“Gross Net Written Premium” as used herein is defined as Gross Written Premium,
less premiums paid for inuring reinsurance identified in the Other Reinsurance
and FHCF Coverage Article.
  

F.

Gross Premiums Earned
  

 

“Gross Premiums Earned” as used herein is defined as ceded unearned premium at
the inception of the Contract Year, plus ceded Gross Written Premium during the
Contract Year, less ceded unearned premium at the end of the Contract Year.

G.

Gross Written Premium

 

“Gross Written Premium” as used herein is defined as gross premium written by
the Company for the classes of business reinsured hereunder, less cancellations
and return premiums, less managing general agent’s fees retained by any general
agent of the Company.
  

  
 

BENFIELD

Page 4

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H.

 

Loss Adjustment Expense
  

 

1.

“Loss Adjustment Expense,” regardless of how such expenses are classified for
statutory reporting purposes, shall mean all costs and expenses allocable to a
specific claim that are incurred by the Company in the investigation, appraisal,
adjustment, settlement, litigation, defense or appeal of a specific claim,
including court costs and costs of supersedeas and appeal bonds, and including
a) pre-judgment interest, unless included as part of the award or judgment; b)
post-judgment interest; c) legal expenses and costs incurred in connection with
coverage questions and legal actions connected thereto, including Declaratory
Judgment Expense; d) expenses and a pro rata share of salaries of the Company
field employees, and expenses of other Company employees who have been
temporarily diverted from their normal and customary duties and assigned to the
field adjustment of losses covered by this Contract; and e) advertising or other
extraordinary communication expenses incurred as a result of a covered Loss
Occurrence.
  

 

2.

Loss Adjustment Expense as defined in subparagraph 1 above does not include
unallocated loss adjustment expense. Unallocated loss adjustment expense
includes, but is not limited to, salaries and expenses of employees, other than
in (d) above, and office and other overhead expenses, other than in (e) above.
  

I.

Losses Incurred
  

 

“Losses Incurred” as used herein shall mean ceded losses and Loss Adjustment
Expense paid as of the effective date of calculation, plus the ceded reserves
for losses and Loss Adjustment Expense outstanding as of the same date, all as
respects losses arising out of Loss Occurrences commencing during the Contract
Year under consideration, plus an amount representing incurred but not reported
losses to be determined by the Company.
  

J.

Loss Occurrence
  

 

1.

Property business:
  

   

a.

“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 72 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.
  

  
 

BENFIELD

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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 epicentre of which need not necessarily be within the
territorial confines referred to in the opening subparagraph of this definition)
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 frozen pipes and tanks
and melting snow) may be included in the Company’s “Loss Occurrence.”
  

 

b.

Except for those “Loss Occurrences” referred to in i and ii of subparagraph a
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.
  

 

c.

However, as respects those “Loss Occurrences” referred to in i and ii of
subparagraph a 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
that 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.
  

 

d.

It is understood that losses arising from a combination of two or more perils as
a result of the same event shall be considered as having arisen from one “Loss
Occurrence.” Notwithstanding the foregoing, the hourly limitations as stated in
the subparagraphs above shall not be exceeded as respects the applicable perils
and no single “Loss Occurrence” shall encompass a time period greater than
168 consecutive hours.
  

2.

Liability business:
  

 

The term “Loss Occurrence” shall mean an accident or occurrence or a series of
accidents or occurrences arising out of or caused by one event.

  

BENFIELD

Page 6

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K.

Net Liability
  

 

“Net Liability” as used herein shall mean the Company’s gross liability
remaining after cessions, if any, to other reinsurance which inures to the
benefit of this Contract. Notwithstanding the foregoing, the Reinsurer’s Net
Liability shall not be increased by the Company’s inability to collect from any
reinsurance set forth in the Other Reinsurance and FHCF Coverage Article.
   

L.

Policy
  

 

“Policy” or “Policies” as used herein shall mean the Company’s binders, policies
and contracts providing insurance on the classes of business covered under this
Contract.
  

Article V - Territory (BRMA 51A)
  

 

The territorial limits of this Contract shall be identical with those of the
Company’s Policies.
  

Article VI - Exclusions
  

A.

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

 

1.

All reinsurance assumed by the Company, except agency reinsurance.
  

 

2.

Cargo.
  

 

3.

Difference in Conditions insurances and similar kinds of insurances, when
written as such.
  

 

4.

Mortgage Impairment insurances and other similar kinds of insurances, regardless
of how styled.
  

 

5.

Wrongful conversion, embezzlement or secretion.
  

 

6.

Financial guarantee and insolvency.
  

 

7.

Third party liability business written by the Company on a co-indemnity basis
where the Company is not the controlling carrier.
  

 

8.

Third party liability business written to apply in excess of a deductible of
more than $10,000, and third party liability business issued to apply
specifically in excess over underlying insurance.
  

 

9.

Ocean Marine (including Protection and Indemnity), Accident and Health, Title,
Surety and Credit business.
  

 

10.

Flood and/or earthquake when written as such.
  

 

11.

Automobile Liability and Physical Damage business.
  

  

BENFIELD

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12.

General Liability and Workers’ Compensation.
  

 

13.

Umbrella Liability business.
  

 

14.

Nuclear Incident as defined in the “Nuclear Incident Exclusion Clause - Physical
Damage - Reinsurance - U.S.A.” and the “Nuclear Incident Exclusion Clause -
Liability - Reinsurance - U.S.A.” attached hereto.
  

 

15.

Loss or damage caused by or resulting from war, invasion, hostilities, acts of
foreign enemies, civil war, rebellion, insurrection, military or usurped power,
or martial law or confiscation by order of any government or public authority,
but this exclusion shall not apply to loss or damage covered under a standard
Policy with a standard War Exclusion Clause.
  

 

16.

Loss or liability excluded under the provisions of the “Pools, Associations and
Syndicates Exclusion Clause” attached hereto.
  

 

17.

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.
  

 

18.

Pollution and seepage coverages excluded under the provisions of the “Pollution
and Seepage Exclusion Clause” attached hereto.
  

 

19.

Risks, other than offices, hotels, apartments, hospitals, education
establishments, public utilities (except railroad schedules) and builders risks
on the above classes where, at the time of cession, the Total Insured Value over
all interests exceeds $250,000,000.
  

   

This exclusion does not apply to Contingent Business Interruption, to interests
traditionally underwritten as Inland Marine or to Stock and/or Contents written
on a blanket basis except where the Company is aware that the Total Insured
Value of $250,000,000 is already exceeded for buildings, machinery, equipment
and direct use and occupancy at the key location.
  

   

Notwithstanding anything contained herein to the contrary, it is the mutual
intention of the parties in respect of bridges and tunnels to exclude such risks
where the Total Insured Value over all interests exceeds $250,000,000.
  

 

20.

Losses in respect of overhead transmission and distribution lines and their
supporting structures other than those on or within 150 meters (or 500 feet) of
the insured premises.
  

  

BENFIELD

Page 8

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It is understood and agreed that public utilities extension and/or suppliers
extension and/or contingent business interruption coverages are not subject to
this exclusion, provided that these are not part of a transmitters’ or
distributors’ Policy.
  

 

21.

Loss, damage, cost or expense arising out of or resulting from any act of
terrorism involving the use of any biological, chemical or nuclear agent,
material, device or weapon.
  

   

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:
  

   

a.

Involves violence against one or more persons; or
  

   

b.

Involves damage to property; or
  

   

c.

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

   

d.

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

   

e.

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

   

This definition shall also include 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.
  

B.

If the Company is bound, without the knowledge and contrary to the instructions
of the Company’s supervisory underwriting personnel, on any business falling
within the scope of one or more of the exclusions set forth above, the exclusion
shall be suspended with respect to such business until 30 days after an
underwriting supervisor of the Company acquires knowledge thereof, with the
exception of exclusions 15, 16, 18 and 21 of paragraph A above.
  

Article VII – Coverage
  

A.

As respects business subject to this Contract, the Company shall cede to the
Reinsurer and the Reinsurer agrees to accept 100% of the Company’s Net
Liability.
  

B.

The liability of the Reinsurer for loss arising out of any one Loss Occurrence
shall be 55.0% of Gross Premiums Earned, not to exceed $150,000,000. Further,
the aggregate liability of the Reinsurer shall not exceed 164% of Gross Premiums
Earned, not to exceed $450,000,000 as respects any one Contract Year for loss
arising out of events that have been assigned a PCS catastrophe serial number by
the Property Claims Services (PCS) office. The provisional Loss Occurrence limit
shall be $150,000,000 and the provisional aggregate limit shall be $450,000,000
until the Gross Premiums Earned for the Contract Year have been determined. For
the purposes of this paragraph B only, if this Contract is
  

  

BENFIELD

Page 9

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terminated on a “runoff” basis, the period from the effective date of
termination through the end of the runoff period shall be considered a separate
Contract Year.
  

C.

The Reinsurer shall be liable for its proportionate share of any catastrophe
reinstatement premium incurred by the Company in addition to the Reinsurer’s
liability listed in paragraph B of this Article.
  

D.

The Company shall purchase or be deemed to have purchased facultative
reinsurance to limit its Policy limits subject to this Contract (exclusive of
Loss in Excess of Policy Limits, Extra Contractual Obligations and Loss
Adjustment Expense) to the following:
  

 

1.

$300,000 as respects Homeowners Section II and Comprehensive Personal Liability;
  

 

2.

$1,800,000 maximum property value.
  

E.

The Company shall retain a minimum 20.0% part of 100% share of its Net Liability
ceded hereunder.
  

Article VIII - Loss in Excess of Policy Limits/ECO
  

A.

In the event the Company pays or is held liable to pay an amount of Loss in
Excess of its Policy Limit, but otherwise within the terms of its Policy
(hereinafter called “Loss in Excess of Policy Limits”) or any punitive,
exemplary, compensatory or consequential damages, other than Loss in Excess of
Policy Limits (hereinafter called “Extra Contractual Obligations”) because of
alleged or actual bad faith, negligence or fraud on its part in rejecting an
offer of settlement within Policy limits, or in the preparation of the defense
or in the trial of an action against its insured or reinsured or in the
preparation or prosecution of an appeal consequent upon such an action, or in
otherwise handling a claim under a Policy subject to this Contract, the Loss in
Excess of Policy Limits and/or the Extra Contractual Obligations shall be added
to the Company’s loss, if any, under the Policy involved, and the sum thereof
shall be subject to the provisions of the Coverage Article.
  

B.

An Extra Contractual Obligation shall be deemed to have occurred on the same
date as the loss covered or alleged to be covered under the Policy.
  

C.

Notwithstanding anything stated herein, this Contract 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 or settlement of any claim covered hereunder.
  

D.

Recoveries from any form of insurance or reinsurance which protects the Company
against claims the subject matter of this Article shall inure to the benefit of
this Contract.
  

  

BENFIELD

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Article IX - Other Reinsurance and FHCF Coverage
  

A.

The Company shall purchase FHCF coverage at the 90.0% level and Temporary
Increase in Coverage Limits at the 90.0% level, with premiums deducted and
recoveries inuring to the benefit of this Contract, whether recoverable or not.
  

B.

The Company may purchase FHCF Recovery Shortfall Reinsurance, with premiums
deducted and recoveries inuring to the benefit of this Contract.
  

C.

The Company shall also purchase the additional underlying limit provided by the
FHCF to Limited Apportionment Companies or companies participating in the
Capital Build-Up Incentive Program, with premiums deducted and recoveries
inuring to the benefit of this Contract, whether recoverable or not.
  

D.

The Company shall also maintain in force the following, with premiums deducted
(including reinstatement premium, if any) and recoveries inuring to the benefit
of this Contract:
  

 

1.

Multiple Layer Property Catastrophe Excess of Loss Reinsurance Contract:
   

   

Layer 1 - 100% of $140,000,000 excess $150,000,000 each Loss Occurrence;
  

   

Layer 2 - 100% of $134,000,000 excess $290,000,000 each Loss Occurrence;
  

   

Layer 3 - 100% of $125,000,000 excess $424,000,000 each Loss Occurrence.
  

 

2.

Fourth Layer Property Catastrophe Excess of Loss Reinsurance Contract
(effective July 1, 2008):
  

   

Layer 4 - 90.0% of $100,000,000 excess $549,000,000 each Loss Occurrence.
  

 

3.

Multiple Line Excess of Loss Reinsurance Contract:
  

   

Coverage A - Property - 100% of $1,300,000 excess $500,000 each Risk, each Loss
and $1,300,000 each Loss Occurrence, subject to an annual aggregate deductible
of $1,300,000; Coverage B - Liability - 100% of $1,000,000 excess $300,000 each
Loss Occurrence.
  

 

4.

Second Layer Reinstatement Premium Protection Reinsurance Contract:
  

   

100% coverage for reinstatement premium due under the following Second Excess
Layer of property catastrophe excess of loss reinsurance; $134,000,000 excess
$290,000,000 each Loss Occurrence subject to one full reinstatement with
obligatory additional premium calculated at 100% as to time and pro rata as to
amount.
  

 

5.

Third Layer Reinstatement Premium Protection Reinsurance Contract:
  

   

100% coverage for reinstatement premium due under the following Third Excess
Layer of property catastrophe excess of loss reinsurance; $125,000,000 excess
$424,000,000 each Loss Occurrence, subject to one full reinstatement with
obligatory additional premium calculated at 100% as to time and pro rata as to
amount.
  

 

6.

Additional Third Event Property Catastrophe Excess of Loss Reinsurance Contract
(effective July 1, 2008):
  

   

80.0% of $100,000,000 excess $150,000,000 each Loss Occurrence and for the term
of this contract, with Layer 1 of the Multiple Layer Property Catastrophe Excess
of Loss Reinsurance Contract inuring to this contract. For purposes of this
contract, the Ultimate Net Loss (prior to the deduction of such inuring
reinsurance) shall not exceed $290,000,000 any one Loss Occurrence.
  

  

BENFIELD

Page 11

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Article X - Accounting Basis
  

   

All premiums and losses under this Contract shall be reported on an “accident
year” accounting basis. Unless specified otherwise herein, all premiums shall be
credited to the Contract Year during which they earn, and all losses shall be
charged to the Contract Year during which they occur.
  

   

Article XI - Reinsurance Premium
  

   

The Company shall cede to the Reinsurer its proportionate share of the Gross Net
Written Premium on all Policies subject to this Contract.
  

   

Article XII - Commission
  

 

A.

The Reinsurer shall allow the Company a 31.0 % commission on Gross Written
Premium ceded to the Reinsurer hereunder. The Company shall allow the Reinsurer
return commission on return Gross Written Premium at the same rate.
  

 

B.

It is expressly agreed that the commission allowed the Company includes
provision for all dividends, commissions, taxes, and all other expenses of
whatever nature, except allocated Loss Adjustment Expense.
  

   

Article XIII - Contingent Commission
  

 

A.

The Reinsurer shall pay the Company a contingent commission equal to 50.0% of
the net profit, if any, accruing to the Reinsurer during each Contract Year
hereunder.
  

 

B.

The Reinsurer’s net profit for each Contract Year shall be calculated in
accordance with the following formula, it being understood that a positive
balance equals net profit and a negative balance equals net loss:
  

 

1.

Gross Premiums Earned for the Contract Year; less
  

 

2.

Commission allowed the Company on Gross Premiums Earned during the Contract
Year; less
  

 

3.

Premiums paid for reinsurance identified in the Other Reinsurance and FHCF
Coverage Article, including all reinstatement premiums during the Contract Year;
less
  

 

4.

Expenses incurred by the Reinsurer at 20.0% of Gross Net Premiums Earned for the
Contract Year; less
  

 

5.

Losses Incurred for the Contract Year.
  

C.

The Company shall calculate and report the Reinsurer’s net profit as promptly as
possible after the end of each Contract Year, and as promptly as possible after
the end of each 12-month period thereafter until all losses subject hereto have
been finally settled. Each such calculation shall be based on cumulative
transactions hereunder from the beginning of the Contract Year through the date
of calculation. As respects the initial calculation referred to above, any
contingent commission shown to be due the Company shall be paid by the Reinsurer
within 45 days after the end of the Contract Year. As respects each
recalculation, any additional contingent commission shown to be due the Company
shall be
  

  

BENFIELD

Page 12

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paid by the Reinsurer within 45 days after the end of the 12-month period under
consideration. Any return contingent commission shown to be due the Reinsurer
shall be paid by the Company with its report.
  

Article XIV - Reports and Remittances
  

A.

Within 30 days after the inception of this Contract, the Company shall report to
the Reinsurer the ceded unearned premium (less commission thereon) with respect
to business in force as of the effective date of this Contract. The Company
shall remit payment of this amount with the report.
  

B.

Within 30 days after the end of each Contract Quarter, the Company shall report
to the Reinsurer:
  

 

1.

Ceded Gross Written Premium for the Contract Quarter.
  

 

2.

Commission on (1) above for the Contract Quarter.
  

 

3.

Ceded premiums paid for reinsurance identified in the Other Reinsurance and FHCF
Coverage Article, including all reinstatement premiums.
  

 

4.

Ceded losses and Loss Adjustment Expense paid during the Contract Quarter (net
of any recoveries during the Contract Quarter under the “cash call” provisions
of the Loss Settlements Article).
  

 

5.

Outstanding loss reserves (including reserves for IBNR loss, if any) and Loss
Adjustment Expense reserves.
  

 

The positive balance of (1) less (2) less (3) less (4) for each Contract Quarter
shall be remitted by the Company with its report. Any balance shown to be due
the Company shall be remitted by the Reinsurer as promptly as possible after
receipt and verification of the Company’s report.
  

C.

Annually, the Company shall furnish the Reinsurer with such information as the
Reinsurer may require to complete its Annual Convention Statement.
  

Article XV - Loss Settlements
  

A.

Losses shall be reported by the Company in summary form as hereinafter provided,
but the Company shall notify the Reinsurer immediately when a specific case
involves unusual circumstances or large loss possibilities. Further, the Company
shall notify the Reinsurer whenever a claim involves a fatality, amputation,
spinal cord damage, brain damage, blindness, extensive burns or multiple
fractures, or any claim arising from sexual abuse, molestation, sexual
harassment or discrimination, regardless of liability. The Reinsurer shall have
the right to participate, at its own expense, in the defense or control of any
claim or suit or proceeding involving this reinsurance.
  

B.

All loss settlements made by the Company, whether under strict Policy conditions
or by way of compromise, except as otherwise provided in this Contract, shall be
binding upon the
  

  

BENFIELD

Page 13

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Reinsurer, and the Reinsurer agrees to pay or allow, as the case may be, its
proportion of each such settlement in accordance with the Reports and
Remittances Article. It is understood that the Reinsurer’s liability under this
Contract shall not include any ex gratia payments made by the Company. It is
agreed, however, that if the Reinsurer’s share of any loss is equal to or
greater than $50,000, the Reinsurer will pay its share of said loss (i.e., cash
call) as promptly as possible after receipt of reasonable evidence of the amount
paid by the Company.
  

C.

In the event of a claim under a Policy subject hereto, the Reinsurer shall be
liable for its proportionate share of Loss Adjustment Expense incurred by the
Company in connection therewith. The Reinsurer shall be credited with its
proportionate share of any recoveries of such expense.
  

Article XVI - Salvage and Subrogation
  

The Reinsurer shall be credited with its proportionate share of salvage or
subrogation recoveries (i.e., reimbursement obtained or recovery made by the
Company, less the Reinsurer’s proportionate share of Loss Adjustment Expense
incurred in obtaining such reimbursement or making such recovery) on account of
claims and settlements involving reinsurance hereunder. 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 if, in the Company’s opinion, it is economically
reasonable to do so.
  

Article XVII - Errors and Omissions (BRMA 14F)
  

Inadvertent delays, errors or omissions made in connection with this Contract or
any transaction hereunder shall not relieve either party from any liability
which would have attached had such delay, error or omission not occurred,
provided always that such error or omission is rectified as soon as possible
after discovery.
  

Article XVIII - 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 this Contract. 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.
  

Article XIX - Currency (BRMA 12A)
  

A.

Whenever the word “Dollars” or the “$” sign appears in this Contract, they shall
be construed to mean United States Dollars and all transactions under this
Contract shall be in United States Dollars.
  

B.

Amounts paid or received by the Company in any other currency shall be converted
to United States Dollars at the rate of exchange at the date such transaction is
entered on the books of the Company.
  

  

BENFIELD

Page 14

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Article XX - Taxes (BRMA 50B)
  

In consideration of the terms under which this Contract is issued, the Company
will not claim a deduction in respect of the premium hereon when making tax
returns, other than income or profits tax returns, to any state or territory of
the United States of America or the District of Columbia.
  

Article XXI - Federal Excise Tax (BRMA 17D)
  

A.

The Reinsurer has agreed to allow for the purpose of paying the Federal Excise
Tax the applicable percentage of the premium payable hereon (as imposed under
Section 4371 of the Internal Revenue Code) to the extent such premium is subject
to the Federal Excise Tax.
  

B.

In the event of any return of premium becoming due hereunder the Reinsurer will
deduct the applicable percentage from the return premium payable hereon and the
Company or its agent should take steps to recover the tax from the United States
Government.
  

Article XXII - Unauthorized Reinsurance
  

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

A.

As regards Policies or bonds issued by the Company coming within the scope of
this Contract, 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 subscribing reinsurer a statement showing the proportion of such
reserves which is applicable to the subscribing reinsurer. The subscribing
reinsurer hereby agrees to fund such reserves in respect of unearned premium,
known outstanding losses that have been reported to the subscribing reinsurer
and allocated Loss Adjustment Expense relating thereto, losses and allocated
Loss Adjustment Expense paid by the Company but not recovered from the
subscribing reinsurer, plus reserves for losses incurred but not reported, as
shown in the statement prepared by the Company (hereinafter referred to as
“subscribing reinsurer’s obligations”) by funds withheld, cash advances or a
Letter of Credit. The subscribing 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.
  

B.

When funding by a Letter of Credit, the subscribing 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 subscribing 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 30 days (60 days where required
by insurance regulatory authorities) prior to any expiration date the issuing
bank shall notify the
  

  

BENFIELD

Page 15

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Company by certified or registered mail that the issuing bank elects not to
consider the Letter of Credit extended for any additional period.
  

C.

The subscribing reinsurer and Company agree that the Letters of Credit provided
by the subscribing reinsurer pursuant to the provisions of this Contract may be
drawn upon at any time, notwithstanding any other provision of this Contract,
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:
  

 

1.

To reimburse the Company for the subscribing reinsurer’s obligations, the
payment of which is due under the terms of this Contract and which has not been
otherwise paid;
  

 

2.

To make refund of any sum which is in excess of the actual amount required to
pay the subscribing reinsurer’s obligations under this Contract;
  

 

3.

To fund an account with the Company for the subscribing 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 subscribing reinsurer;
  

 

4.

To pay the subscribing reinsurer’s share of any other amounts the Company claims
are due under this Contract.
  

 

In the event the amount drawn by the Company on any Letter of Credit is in
excess of the actual amount required for subparagraph 1 or 3, or in the case of
subparagraph 4, the actual amount determined to be due, the Company shall
promptly return to the subscribing 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 subscribing reinsurer.
  

D.

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.
  

E.

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

 

1.

If the statement shows that the subscribing reinsurer’s obligations exceed the
balance of credit as of the statement date, the subscribing reinsurer shall,
within 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.
  

 

2.

If, however, the statement shows that the subscribing reinsurer’s obligations
are less than the balance of credit as of the statement date, the Company shall,
within 30 days after receipt of written request from the subscribing 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.
  

BENFIELD

Page 16

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Article XXIII - Original Conditions
  

All reinsurance under this Contract shall be subject to the same rates, terms,
conditions, waivers and interpretations, and to the same modifications and
alterations as the respective Policies of the Company. However, in no event
shall this be construed in any way to provide coverage outside the terms and
conditions set forth in this Contract.
  

Article XXIV - Third Party Rights (BRMA 52C)
  

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

Article XXV - Severability (BRMA 72A)
  

If any provision of this Contract should be invalid under applicable laws, the
latter shall control but only to the extent of the conflict without affecting
the remaining provisions of this Contract.
  

Article XXVI - Governing Law (BRMA 71A)
  

This Contract shall be governed as to performance, administration and
interpretation by the laws of the State of Florida, exclusive of the rules with
respect to conflicts of law, except as to rules with respect to credit for
reinsurance in which case the applicable rules of all states shall apply.
  

Article XXVII - Access to Records (BRMA 1E)
  

The Reinsurer or its designated representatives shall have access to the books
and records of the Company on matters relating to this reinsurance at all
reasonable times for the purpose of obtaining information concerning this
Contract or the subject matter hereof.
  

Article XXVIII - Confidentiality (BRMA 69D)
  

The Reinsurer, except with the express prior written consent of the Company,
shall not directly or indirectly, communicate, disclose or divulge to any third
party, any knowledge or information that may be acquired either directly or
indirectly as a result of the inspection of the Company’s books, records and
papers. The restrictions as outlined in this Article shall not apply to
communication or disclosures that the Reinsurer is required to make to its
statutory auditors, retrocessionaires, legal counsel, arbitrators involved in
any arbitration procedures under this Contract or disclosures required upon
subpoena or other duly-issued order of a court or other governmental agency or
regulatory authority.
  

  

BENFIELD

Page 17

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Article XXIX – Insolvency

  

A.

In the event of the insolvency of the Company, this reinsurance shall be payable
directly to the Company or to its liquidator, receiver, conservator or statutory
successor, with reasonable provision for verification, on the basis of the
liability of the Company without diminution because of the insolvency of the
Company or because the liquidator, receiver, conservator or statutory successor
of the Company has failed to pay all or a portion of any claim. It is agreed,
however, that the liquidator, receiver, conservator or statutory successor of
the Company shall give written notice to the Reinsurer of the pendency of a
claim against the Company indicating the Policy or bond reinsured which claim
would involve a possible liability on the part of the Reinsurer within a
reasonable time after such claim is filed in the conservation or liquidation
proceeding or in the receivership, and that during the pendency of such claim,
the Reinsurer may investigate such claim and interpose, at its own expense, in
the proceeding where such claim is to be adjudicated, any defense or defenses
that it may deem available to the Company or its liquidator, receiver,
conservator or statutory successor. The expense thus incurred by the Reinsurer
shall be chargeable, subject to the approval of the Court, against the Company
as part of the expense of conservation or liquidation to the extent of a
proportionate share of the benefit which may accrue to the Company solely as a
result of the defense undertaken by the Reinsurer.
  

B.

Where two or more subscribing reinsurers are involved in the same claim and a
majority in interest elect to interpose defense to such claim, the expense shall
be apportioned in accordance with the terms of this Contract as though such
expense had been incurred by the Company.
  

C.

It is further agreed that, in the event of the insolvency of the Company, the
reinsurance under this Contract shall be payable directly by the Reinsurer to
the Company or its liquidator, receiver, conservator, or statutory successor,
except as provided by Section 4118(a) of the New York Insurance Law or except
(1) where this Contract specifically provides another payee of such reinsurance
in the event of the insolvency of the Company or (2) where the Reinsurer with
the consent of the direct insured or insureds has assumed such Policy
obligations of the Company as direct obligations of the Reinsurer to the payee
under such Policies and in substitution for the obligations of the Company to
such payees.
  

Article XXX - Arbitration (BRMA 6J)
  

A.

As a condition precedent to any right of action hereunder, in the event of any
dispute or difference of opinion hereafter arising with respect to this
Contract, it is hereby mutually agreed that such dispute or difference of
opinion shall be submitted to arbitration. One Arbiter shall be chosen by the
Company, the other by the Reinsurer, and an Umpire shall be chosen by the two
Arbiters before they enter upon arbitration, all of whom shall be active or
retired disinterested executive officers of insurance or reinsurance companies
or Lloyd’s London Underwriters. In the event that either party should fail to
choose an Arbiter within 30 days following a written request by the other party
to do so, the requesting party may choose two Arbiters who shall in turn choose
an Umpire before entering upon arbitration. If the two Arbiters fail to agree
upon the selection of an Umpire within 30 days following their appointment, each
Arbiter shall nominate three candidates within 10 days thereafter, two of whom
the other shall decline, and the decision shall be made by drawing lots.
  

  

BENFIELD

Page 18

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B.

Each party shall present its case to the Arbiters within 30 days following the
date of appointment of the Umpire. The Arbiters shall consider this Contract as
an honorable engagement rather than merely as a legal obligation and they are
relieved of all judicial formalities and may abstain from following the strict
rules of law. The decision of the Arbiters shall be final and binding on both
parties; but failing to agree, they shall call in the Umpire and the decision of
the majority shall be final and binding upon both parties. Judgment upon the
final decision of the Arbiters may be entered in any court of competent
jurisdiction.
  

C.

If more than one subscribing reinsurer is involved in the same dispute, all such
subscribing reinsurers shall constitute and act as one party for purposes of
this Article and communications shall be made by the Company to each of the
subscribing reinsurers constituting one party, provided, however, that nothing
herein shall impair the rights of such subscribing reinsurers to assert several,
rather than joint, defenses or claims, nor be construed as changing the
liability of the subscribing reinsurers participating under the terms of this
Contract from several to joint.
  

D.

Each party shall bear the expense of its own Arbiter, and shall jointly and
equally bear with the other the expense of the Umpire and of the arbitration. In
the event that the two Arbiters are chosen by one party, as above provided, the
expense of the Arbiters, the Umpire and the arbitration shall be equally divided
between the two parties.
  

E.

Any arbitration proceedings shall take place at a location mutually agreed upon
by the parties to this Contract, but notwithstanding the location of the
arbitration, all proceedings pursuant hereto shall be governed by the law of the
state in which the Company has its principal office.
  

Article XXXI - Service of Suit (BRMA 49C)
  

(Applicable if the subscribing reinsurer is not domiciled in the United States
of America, and/or is not authorized in any State, Territory or District of the
United States where authorization is required by insurance regulatory
authorities).
  

A.

It is agreed that in the event the subscribing reinsurer fails to pay any amount
claimed to be due hereunder, the subscribing reinsurer, at the request of the
Company, will submit to the jurisdiction of any court of competent jurisdiction
within the United States. Nothing in this Article constitutes or should be
understood to constitute a waiver of the subscribing reinsurer’s 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.
  

B.

Further, pursuant to any statute of any state, territory or district of the
United States which makes provision therefor, the subscribing reinsurer hereby
designates the party named in its Interests and Liabilities Agreement, or if no
party is named therein, 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 its 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
Contract.
  

  

BENFIELD

Page 19

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Article XXXII - Mode of Execution

  
This Contract may be executed either by an original written ink signature of
paper documents, by an exchange of facsimile copies showing the original written
ink signature of paper documents, or by electronic signature by either party
employing appropriate software technology as to satisfy the parties at the time
of execution that the version of the document agreed to by each party shall
always be capable of authentication and satisfy the same rules of evidence as
written signatures. The use of any one or a combination of these methods of
execution shall constitute a legally binding and valid signing of this Contract.
This Contract may be executed in one or more counterparts, each of which, when
duly executed, shall be deemed an original.

  
  
Article XXXIII - Intermediary (BRMA 23A)

  
Benfield Inc. is hereby recognized as the Intermediary negotiating this Contract
for all business hereunder. All communications (including but not limited to
notices, statements, premium, return premium, commissions, taxes, losses, Loss
Adjustment Expense, salvages and loss settlements) relating thereto shall be
transmitted to the Company or the Reinsurer through Benfield Inc. 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 to
constitute payment to the Company only to the extent that such payments are
actually received by the Company.

  
  
  
In Witness Whereof, the Company by its duly authorized representative has
executed this Contract as of the date undermentioned at:
  

Fort Lauderdale, Florida, this 30th day of May in the year 2008.

   /s/ Bradley I. Meier, President                                      

Universal Property and Casualty Insurance Company

  
  

BENFIELD

Page 20

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Pools, Associations and Syndicates Exclusion Clause

  
Section A:

  
Excluding:

 

(a)

All business derived directly or indirectly from any Pool, Association or
Syndicate which maintains its own reinsurance facilities.

  

     

(b)

Any Pool or Scheme (whether voluntary or mandatory) formed after March 1, 1968
for the purpose of insuring property whether on a country-wide basis or in
respect of designated areas. This exclusion shall not apply to so-called
Automobile Insurance Plans or other Pools formed to provide coverage for
Automobile Physical Damage.

Section B:

  
It is agreed that business written by the Company for the same perils, which is
known at the time to be insured by, or in excess of underlying amounts placed in
the following Pools, Associations or Syndicates, whether by way of insurance or
reinsurance, is excluded hereunder:
  

   

Industrial Risk Insurers,

   

Associated Factory Mutuals,

   

Improved Risk Mutuals,

   

Any Pool, Association or Syndicate formed for the purpose of writing

   

                       Oil, Gas or Petro-Chemical Plants and/or Oil or Gas
Drilling Rigs,

   

United States Aircraft Insurance Group,

   

Canadian Aircraft Insurance Group,

   

Associated Aviation Underwriters,

   

American Aviation Underwriters.

  
Section B does not apply:

 

(a)

Where the Total Insured Value over all interests of the risk in question is less
than $250,000,000.

  

     

(b)

To interests traditionally underwritten as Inland Marine or stock and/or
contents written on a blanket basis.

  

     

(c)

To Contingent Business Interruption, except when the Company is aware that the
key location is known at the time to be insured in any Pool, Association or
Syndicate named above, other than as provided for under Section B(a).

  

     

(d)

To risks as follows:

  

       

Offices, Hotels, Apartments, Hospitals, Educational Establishments, Public
Utilities (other than railroad schedules) and builder’s risks on the classes of
risks specified in this subsection (d) only.

  
Where this clause attaches to Catastrophe Excesses, the following Section C is
added:

  
Section C:

  
Nevertheless the Reinsurer specifically agrees that liability accruing to the
Company from its participation in residual market mechanisms including but not
limited to:
  

 

(1)

The following so-called “Coastal Pools”:

  

       

Alabama Insurance Underwriting Association

   

Louisiana Citizens Property Insurance Corporation

   

Mississippi Windstorm Underwriting Association

   

North Carolina Insurance Underwriting Association

   

South Carolina Windstorm and Hail Underwriting Association

   

Texas Windstorm Insurance Association

  
AND
  

  

(2)

All “Fair Plan” and “Rural Risk Plan” business

  

BENFIELD

Page 1 of 2

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AND
  

 

(3)

Citizens Property Insurance Corporation (“CPIC”) and the California Earthquake
Authority (“CEA”)

  

       

for all perils otherwise protected hereunder shall not be excluded, except,
however, that this reinsurance does not include any increase in such liability
resulting from:

  

     

(i)

The inability of any other participant in such “Coastal Pool” and/or “Fair Plan”
and/or “Rural Risk Plan” and/or Residual Market Mechanisms to meet its
liability.

  

     

(ii)

Any claim against such “Coastal Pool” and/or “Fair Plan” and/or “Rural Risk
Plan” and/or Residual Market Mechanisms, or any participant therein, including
the Company, whether by way of subrogation or otherwise, brought by or on behalf
of any insolvency fund (as defined in the Insolvency Fund Exclusion Clause
incorporated in this Contract).

  

       

Section D:

  

     

(1)

Notwithstanding Section C above, in respect of the CEA, where an assessment is
made against the Company by the CEA, the Company may include in its Ultimate Net
Loss only that assessment directly attributable to each separate loss occurrence
covered hereunder. The Company’s initial capital contribution to the CEA shall
not be included in the Ultimate Net Loss.

  

     

(2)

Notwithstanding Section C above, in respect of CPIC, where an assessment is made
against the Company by CPIC, the maximum loss that the Company may include in
the Ultimate Net Loss in respect of any loss occurrence hereunder shall not
exceed the lesser of:

  

   

  

 

(a)

The Company’s assessment from CPIC for the accounting year in which the loss
occurrence commenced, or

  

         

(b)

The product of the following:

  

           

(i)

The Company’s percentage participation in CPIC for the accounting year in which
the loss occurrence commenced; and

  

             

(ii)

CPIC’s total losses in such loss occurrence.

  

Any assessments for accounting years subsequent to that in which the loss
occurrence commenced may not be included in the Ultimate Net Loss hereunder.
Moreover, notwithstanding Section C above, in respect of CPIC, the Ultimate Net
Loss hereunder shall not include any monies expended to purchase or retire bonds
as a consequence of being a member of CPIC. For the purposes of this Contract,
the Company may not include in the Ultimate Net Loss any assessment or any
percentage assessment levied by CPIC to meet the obligations of an insolvent
insurer member or other party, or to meet any obligations arising from the
deferment by CPIC of the collection of monies.

  

NOTES:

Wherever used herein the terms:

  

   

“Company”

shall be understood to mean “Company,” “Reinsured,” “Reassured” or whatever
other term is used in the attached reinsurance document to designate the
reinsured company or companies.

  

     

“Agreement”

shall be understood to mean “Agreement,” “Contract,” “Policy” or whatever other
term is used to designate the attached reinsurance document.

  

     

“Reinsurers”

shall be understood to mean “Reinsurers,” “Underwriters” or whatever other term
is used in the attached reinsurance document to designate the reinsurer or
reinsurers.

  

BENFIELD

Page 2 of 2

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Pollution and Seepage Exclusion Clause

  
  
  
This Contract excludes 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 payment of the cost
of removing 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.
  
  
  
BRMA 39A
 
 

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Nuclear Incident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)

  

1.

This Reinsurance 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 Reinsurance 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 operations of paragraphs (1) and (2) hereof,
this Reinsurance 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 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 operations of paragraphs (1), (2) and (3)
hereof, this Reinsurance 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.
  

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 (1) 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.
  

  

  

12/12/57
N.M.A. 1119
BRMA 35B
 

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Nuclear Incident Exclusion Clause - Liability - Reinsurance (U.S.A.)

(Approved by Lloyd’s Underwriters’ Fire and Non-Marine Association)
  
  

(1)

This reinsurance does not cover any loss or liability accruing to the Reassured
as a member of, or subscriber to, any association of insurers or reinsurers
formed for the purpose of covering nuclear energy risks or as a direct or
indirect reinsurer of any such member, subscriber or association.

  

 

(2)

Without in any way restricting the operation of paragraph (1) of this Clause it
is understood and agreed that for all purposes of this reinsurance all the
original policies of the Reassured (new, renewal and replacement) of the classes
specified in Clause II of this paragraph (2) from the time specified in Clause
III in this paragraph (2) shall be deemed to include the following provision
(specified as the Limited Exclusion Provision):

  

   

Limited Exclusion Provision.*

  

   

I.

It is agreed that the policy does not apply under any liability coverage, to

     

(injury, sickness, disease, death or destruction

     

(bodily injury or property damage

   

with respect to which an insured under the policy is also an insured under a
nuclear energy liability policy issued by Nuclear Energy Liability Insurance
Association, Mutual Atomic Energy Liability Underwriters or Nuclear Insurance
Association of Canada, or would be an insured under any such policy but for its
termination upon exhaustion of its limit of liability.

 

II.

Family Automobile Policies (liability only), Special Automobile Policies
(private passenger automobiles, liability only), Farmers Comprehensive Personal
Liability Policies (liability only), Comprehensive Personal Liability Policies
(liability only) or policies of a similar nature; and the liability portion of
combination forms related to the four classes of policies stated above, such as
the Comprehensive Dwelling Policy and the applicable types of Homeowners
Policies.

 

III.

The inception dates and thereafter of all original policies as described in II
above, whether new, renewal or replacement, being policies which either

   

(a)

become effective on or after 1st May, 1960, or

   

(b)

become effective before that date and contain the Limited Exclusion Provision
set out above;

     

provided this paragraph (2) shall not be applicable to Family Automobile
Policies, Special Automobile Policies, or policies or combination policies of a
similar nature, issued by the Reassured on New York risks, until 90 days
following approval of the Limited Exclusion Provision by the Governmental
Authority having jurisdiction thereof.

  

     

(3)

Except for those classes of policies specified in Clause II of paragraph (2) and
without in any way restricting the operation of paragraph (1) of this Clause, it
is understood and agreed that for all purposes of this reinsurance the original
liability policies of the Reassured (new, renewal and replacement) affording the
following coverages:

  

     

Owners, Landlords and Tenants Liability, Contractual Liability, Elevator
Liability, Owners or Contractors (including railroad) Protective Liability,
Manufacturers and Contractors Liability, Product Liability, Professional and
Malpractice Liability, Storekeepers Liability, Garage Liability, Automobile
Liability (including Massachusetts Motor Vehicle or Garage Liability)

  

     

shall be deemed to include, with respect to such coverages, from the time
specified in Clause V of this paragraph (3), the following provision (specified
as the Broad Exclusion Provision):

  

   

Broad Exclusion Provision.*

  

   

It is agreed that the policy does not apply:

  

   

I.

Under any Liability Coverage to

     

(injury, sickness, disease, death or destruction

     

(bodily injury or property damage

   

(a)

with respect to which an insured under the policy is also an insured under a
nuclear energy liability policy issued by Nuclear Energy Liability Insurance
Association, Mutual Atomic Energy Liability Underwriters or Nuclear Insurance
Association of Canada, or would be an insured under any such policy but for its
termination upon exhaustion of its limit of liability; or

   

(b)

resulting from the hazardous properties of nuclear material and with respect to
which (1) any person or organization is required to maintain financial
protection pursuant to the Atomic Energy Act of 1954, or any law amendatory
thereof, or (2) the insured is, or had this policy not been issued would be,
entitled to indemnity from the United States of America, or any agency thereof,
under any agreement entered into by the United States of America, or any agency
thereof, with any person or organization.

Page 1 of 2

 

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II

.Under any Medical Payments Coverage, or under any Supplementary Payments
Provision relating to

   

(immediate medical or surgical relief

   

(first aid,

 

to expenses incurred with respect to

   

(bodily injury, sickness, disease or death

   

(bodily injury

 

resulting from the hazardous properties of nuclear material and arising out of
the operation of a nuclear facility by any person or organization.

III.

Under any Liability Coverage to

   

(injury, sickness, disease, death or destruction

   

(bodily injury or property damage

 

resulting from the hazardous properties of nuclear material, if

 

(a)

the nuclear material (1) is at any nuclear facility owned by, or operated by or
on behalf of, an insured or (2) has been discharged or dispersed therefrom;

 

(b)

the nuclear material is contained in spent fuel or waste at any time possessed,
handled, used, processed, stored, transported or disposed of by or on behalf of
an insured; or

 

(c)

the

     

(injury, sickness, disease, death or destruction

     

(bodily injury or property damage

   

arises out of the furnishing by an insured of services, materials, parts or
equipment in connection with the planning, construction, maintenance, operation
or use of any nuclear facility, but if such facility is located within the
United States of America, its territories, or possessions or Canada, this
exclusion (c) applies only to

     

(injury to or destruction of property at such nuclear facility

     

(property damage to such nuclear facility and any property thereat.

IV.

As used in this endorsement:

 

“hazardous properties” include radioactive, toxic or explosive properties;
“nuclear material” means source material, special nuclear material or byproduct
material; “source material”, “special nuclear material”, and “byproduct
material” have the meanings given them in the Atomic Energy Act of 1954 or in
any law amendatory thereof; “spent fuel” means any fuel element or fuel
component, solid or liquid, which has been used or exposed to radiation in a
nuclear reactor; “waste” means any waste material (1) containing byproduct
material and (2) resulting from the operation by any person or organization of
any nuclear facility included within the definition of nuclear facility under
paragraph (a) or (b) thereof; “nuclear facility” means

 

(a)

any nuclear reactor,

 

(b)

any equipment or device designed or used for (1) separating the isotopes of
uranium or plutonium, (2) processing or utilizing spent fuel, or (3) handling
processing or packaging waste,

 

(c)

any equipment or device used for the processing, fabricating or alloying of
special nuclear material if at any time the total amount of such material in the
custody of the insured at the premises where such equipment or device is located
consists of or contains more than 25 grams of plutonium or uranium 233 or any
combination thereof, or more than 250 grams of uranium 235,

 

(d)

any structure, basin, excavation, premises or place prepared or used for the
storage or disposal of waste, and includes the site on which any of the
foregoing is located, all operations conducted on such site and all premises
used for such operations; “nuclear reactor” means any apparatus designed or used
to sustain nuclear fission in a self-supporting chain reaction or to contain a
critical mass of fissionable material;

     

(With respect to injury to or destruction of property, the word “injury” or
“destruction,”

     

(“property damage” includes all forms of radioactive contamination of property,

     

(includes all forms of radioactive contamination of property.

V.

The inception dates and thereafter of all original policies affording coverages
specified in this paragraph (3), whether new, renewal or replacement, being
policies which become effective on or after 1st May, 1960, provided this
paragraph (3) shall not be applicable to

   

(i)

Garage and Automobile Policies issued by the Reassured on New York risks, or

   

(ii)

statutory liability insurance required under Chapter 90, General Laws of
Massachusetts, until 90 days following approval of the Broad Exclusion Provision
by the Governmental Authority having jurisdiction thereof.

(4)

Without in any way restricting the operation of paragraph (1) of this Clause, it
is understood and agreed that paragraphs (2) and (3) above are not applicable to
original liability policies of the Reassured in Canada and that with respect to
such policies this Clause shall be deemed to include the Nuclear Energy
Liability Exclusion Provisions adopted by the Canadian Underwriters’ Association
or the Independent Insurance Conference of Canada.

  

 

  
  

*NOTE.

The words printed in italics in the Limited Exclusion Provision and in the Broad
Exclusion Provision shall apply only in relation to original liability policies
which include a Limited Exclusion Provision or a Broad Exclusion Provision
containing those words.

  
21/9/67

N.M.A. 1590
 

Page 2 of 2

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Interests and Liabilities Agreement

  
of
  
Everest Reinsurance Company
A Delaware Corporation
(hereinafter referred to as the “Subscribing Reinsurer”)
  
with respect to the
  

Multiple Line Quota Share
Reimbursement Contract
Effective: June 1, 2008

  
Issued to and duly executed by
  
Universal Property and Casualty Insurance Company
Fort Lauderdale, Florida

  
 
The Subscribing Reinsurer hereby accepts a 60% share in the interests and
liabilities of the “Reinsurer” as set forth in the attached Contract captioned
above.
  
This Agreement shall become effective at 12:01 a.m., Eastern Daylight Time, June
1, 2008, and shall remain in force until terminated in accordance with the
provisions of the attached Contract.
  
The Subscribing Reinsurer’s share in the attached Contract shall be separate and
apart from the shares of the other reinsurers, and shall not be joint with the
shares of the other reinsurers, it being understood that the Subscribing
Reinsurer shall in no event participate in the interests and liabilities of the
other reinsurers.
  

In Witness Whereof, the Subscribing Reinsurer by its duly authorized
representative has executed this Agreement as of the date undermentioned at:
  
Liberty Corner, New Jersey, this 5th day of June in the year 2008.

  

     

Everest Reinsurance Company

BENFIELD