Exhibit 10.1

AMENDMENT NO. 3 TO STOCK PURCHASE AGREEMENT

This Amendment No. 3 (this “Amendment”), dated as of June 19, 2014, is made
among OneBeacon Insurance Group LLC (“Seller”), Trebuchet US Holdings, Inc.
(“Purchaser”), OneBeacon Insurance Group, Ltd. (“Seller Parent”) and Armour
Group Holdings Limited (“Purchaser Parent”). Capitalized terms used but not
defined in this Amendment have the meanings set forth in the Agreement (as
defined below).

W I T N E S S E T H :

WHEREAS, Seller, Purchaser, Seller Parent and Purchaser Parent are parties to
that certain Stock Purchase Agreement dated as of October 17, 2012, as amended
by amendments dated as of February 1, 2013 and as of October 25, 2013 and as
otherwise modified or amended prior to the date hereof (the “Agreement”); and

WHEREAS, the parties desire to amend the Agreement, as set forth in this
Amendment, among other things, in order to (i) modify the parties’ obligations
with respect to the contribution of Additional Required Capital and replace the
forms of Surplus Notes, (ii) extend the Termination Date and (iii) replace the
forms of Retained Business Reinsurance Agreement and Run-Off Business
Reinsurance Agreement.

NOW, THEREFORE, in consideration of the premises herein contained, and for other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto hereby agree as follows:

1.     Amendment to Section 5.19 Re: Contribution of Additional Required
Capital. Section 5.19 of the Agreement is hereby amended, by deleting such
Section in its entirety and replacing it with the following:

“Section 5.19    Additional Required Capital. In the event that the Pennsylvania
Department requires that capital contributions be made into OneBeacon Insurance
(either by virtue of a requirement to increase reserves or a requirement to
increase surplus, or both), such that the aggregate amount of Cash Equivalents
and Investment Assets of OneBeacon Insurance, on a consolidated basis with its
Subsidiaries, after giving effect to such capital contributions, shall exceed,
as of the Closing, the aggregate amount of Cash Equivalents and Investment
Assets of OneBeacon Insurance, on a consolidated basis with its Subsidiaries,
contemplated by the Estimated Closing Date Balance Sheet (such excess amount
referred to herein as the “Required Additional Capital Amount”), then the
provisions of this Section 5.19 shall apply. Seller shall contribute to
OneBeacon Insurance (i) an amount of Cash Equivalents (the “Seller Pari Passu
Amount”) equal to the lesser of (x) fifty percent (50%) of the Required
Additional Capital Amount or (y) the Pre-Closing Seller Contribution; and (ii)
if the Required Additional Capital Amount exceeds two times the Seller Pari
Passu Amount, an amount of Cash Equivalents of such excess, up to a maximum of
$36.65 million (the “Seller Priority Amount”). In consideration of each amount,
if any, contributed by Seller pursuant to this Section 5.19, OneBeacon Insurance
will issue a surplus note to Seller, which surplus note(s) shall be
substantially in the applicable form attached hereto as Exhibit 8 (each, a
“Surplus Note”). The Surplus Note, if any, issued in

1

--------------------------------------------------------------------------------

consideration of the Seller Pari Passu Amount (the “Seller Pari Passu Note”),
will be subordinated to the Surplus Note, if any, issued in consideration of the
Seller Priority Amount (the “Seller Priority Note”).”

2.    Amendment to Section 8.1(d) Re: Extended Termination Date. Section 8.1(d)
of the Agreement is hereby amended, by deleting “July 31, 2014” therein and
replacing such date with “December 31, 2014.”

3.    Amendment to Exhibit 8. The forms of Surplus Notes attached to the
Agreement as Exhibit 8 thereto are hereby deleted in their entirety and replaced
with the forms of Surplus Notes attached as Exhibit A to this Amendment.

4.    Amendment to Exhibits 3 and 6. The forms of Retained Business Reinsurance
Agreement and Run-Off Business Reinsurance Agreement attached respectively to
the Agreement as Exhibits 3 and 6 thereto are hereby deleted in their entirety
and replaced with the forms of Retained Business Reinsurance Agreement and
Run-Off Business Reinsurance Agreement attached as Exhibit B to this Amendment.

5.    Misreferences to Run-Off Business Reinsurance Agreement. The reference to
“Run-Off Reinsurance Agreement” in the list of Exhibits to the Agreement and the
cover page of Exhibit 6 to the Agreement is hereby deleted and replaced with
“Run-Off Business Reinsurance Agreement.”

6.    Surplus Relief from Reinsurance. Subject to any required approval of
applicable Governmental Authorities, Purchaser may elect to cause OneBeacon
Insurance to prepay all or any portion of the Surplus Notes in accordance with
the terms thereof in connection with OneBeacon Insurance entering into one or
more reinsurance agreements to provide surplus relief to replace some or all of
surplus represented by the Surplus Notes.

7.    Ratification. The Agreement, as amended hereby, is hereby ratified,
approved and confirmed in all respects.

8.    Counterparts. This Amendment may be executed in one or more counterparts,
each of which will be deemed to constitute an original, but all of which shall
constitute one and the same agreement, and may be delivered by facsimile or
other electronic means intended to preserve the original graphic or pictorial
appearance of a document.

9.    Governing Law. This Amendment and its enforcement will be governed by, and
interpreted in accordance with, the laws of the State of New York applicable to
agreements made and to be performed entirely within such state without regard to
the conflicts of law provisions thereof.

10.    Submission to Jurisdiction. Each party to this Amendment hereby submits
to the exclusive jurisdiction of (a) the United States District Court for the
Southern District of New York sitting in the Borough of Manhattan or (b) if such
court does not have jurisdiction, any state court located in the Borough of
Manhattan, including in the case of subclauses (a) and (b) above,

2

--------------------------------------------------------------------------------

any appellate courts therefrom (the “New York Courts”) for any dispute arising
out of or relating to this Amendment or the breach, termination or validity
hereof or any transactions contemplated by this Amendment. Each party to this
Amendment hereby irrevocably and unconditionally waives, to the fullest extent
permitted by Law, any objection that it may now or hereafter have to the laying
of the venue of any such proceedings brought in such court. Each of the parties
hereto irrevocably and unconditionally waives and agrees not to plead or claim
in any such court (i) that it is not personally subject to the jurisdiction of
the New York Courts for any reason other than the failure to serve process in
accordance with applicable Law, (ii) that it or its property is exempt or immune
from jurisdiction of the New York Courts or from any legal process commenced in
the New York Courts (whether through service of notice, attachment prior to
judgment, attachment in aid of execution of judgment, execution of judgment or
otherwise), and (iii) to the fullest extent permitted by applicable Law that (A)
the suit, action or proceeding in the New York Courts is brought in an
inconvenient forum, (B) the venue of such suit, action or proceeding is improper
and (C) this Amendment, or the subject matter hereof, may not be enforced in or
by the New York Courts.

11.    WAIVER OF JURY TRIAL. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY
CONTROVERSY WHICH MAY ARISE UNDER THIS AMENDMENT IS LIKELY TO INVOLVE
COMPLICATED AND DIFFICULT ISSUES AND, THEREFORE, EACH SUCH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL
BY JURY FOR ANY DISPUTE ARISING OUT OF OR RELATING TO THIS AMENDMENT OR THE
BREACH, TERMINATION OR VALIDITY HEREOF OR ANY TRANSACTIONS CONTEMPLATED BY THIS
AMENDMENT. EACH PARTY HERETO CERTIFIES AND ACKNOWLEDGES THAT (A) NEITHER THE
OTHER PARTY HERETO NOR ITS REPRESENTATIVES, AGENTS OR ATTORNEYS HAVE
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY HERETO
UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY
HERETO MAKES THIS WAIVER VOLUNTARILY AND (D) EACH PARTY HERETO HAS BEEN INDUCED
TO ENTER INTO THIS AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS OF THIS SECTION 11. ANY PARTY HERETO MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS AMENDMENT WITH ANY COURT AS WRITTEN EVIDENCE OF
THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

[Signature page follows]

3

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of
the day and year first above written.

ONEBEACON INSURANCE GROUP LLC

By:
/s/ Paul H. McDonough            

Name:
Paul H. McDonough

Title:
Senior Vice President and Chief Financial Officer

Trebuchet US Holdings, Inc.

By:
/s/ Pauline Richards            

Name:
Pauline Richards

Title:
Treasurer/Secretary

ONEBEACON INSURANCE GROUP LLC

By:
/s/ Paul H. McDonough            

Name:
Paul H. McDonough

Title:
Senior Vice President and Chief Financial Officer

ARMOUR GROUP HOLDINGS LIMITED

By:
/s/ Pauline Richards            

Name:
Pauline Richards

Title:
Chief Operating Officer

[Signature page to Amendment No. 3 to SPA]

--------------------------------------------------------------------------------

Exhibit A

Forms of Surplus Notes

[Please see attached]

--------------------------------------------------------------------------------

Exhibit A – Part 1
EXHIBIT 8 – PART 1
FORM OF SELLER PRIORITY NOTE

No.
 
 
$
 

ONEBEACON INSURANCE COMPANY

Surplus Note [due [●]]1 
ONEBEACON INSURANCE COMPANY, a property and casualty insurance company organized
under the laws of the Commonwealth of Pennsylvania (“OneBeacon”), for value
received, hereby promises to pay, subject to the Payment Restrictions (as
defined below), to [●] or its registered assigns, the principal sum of $[●], [on
[●]], and to pay interest thereon, subject to the Payment Restrictions (as
defined below), from [●] or from the most recent Scheduled Interest Payment Date
(as defined below) for which interest has been paid or duly provided for,
semi-annually in arrears on March 15 and August 31 in each year and on the date
on which this Note matures, commencing [●] (each, a “Scheduled Interest Payment
Date”), at the applicable Stated Rate, until the principal hereof is paid or
duly provided for. The payment by OneBeacon of principal and interest on this
Note shall be conditioned upon the payment restrictions set forth in paragraph 2
of this Note (the “Payment Restrictions”). Interest on this Note shall be
calculated on the basis of a 360-day year of twelve months of 30 days each.  
1.    Payment. Payments of principal of this Note shall be made only against
surrender of this Note; provided, that in the case of payment of only a portion
of principal, OneBeacon shall execute a new Note in principal amount equal to
and in exchange for the remaining portion of the principal of the Note so
surrendered. Payments of interest on this Note will be made, in accordance with
the foregoing and subject to applicable laws and regulations, (i) by wire
transfer of immediately available funds to an account maintained by the person
entitled thereto with a bank if such registered holder gives notice to
OneBeacon, not less than 15 days (or such fewer days as OneBeacon may accept at
its discretion) prior to the applicable scheduled payment date or maturity date
hereof, of the payee’s account to which payment is to be made or, (ii) if no
such notice is given, by mailing a check on or before the scheduled payment date
of such payment to the person entitled thereto at such person’s address as
provided to OneBeacon. Unless the designation of the payee’s account to which
payment is to be made is revoked, any such designation made by such holder with
respect to this Note of the payee’s account to which payment is to be made shall
remain in effect with respect to any future payments with respect to this Note
payable to such holder. In any case where the scheduled payment date or maturity
date of this Note shall be at any place of payment a day on which banking
institutions are not carrying out transactions in U.S. dollars or are authorized
or obligated by law or executive order to close, then payment of principal or
_______________________________________________________________________________

1 Note to Draft: Scheduled maturity date to be 5 years following closing.

1

--------------------------------------------------------------------------------

interest need not be made on such date at such place but may be made on the next
succeeding day at such place which is not a day on which banking institutions in
the applicable jurisdiction are not carrying out transactions in U.S. dollars or
are authorized or obligated by law or executive order to close (a “Business
Day”), with the same force and effect as if made on the scheduled payment date
or maturity date thereof, and no interest shall accrue on the amount of such
payment for the period after such date, if such payment is so made.
The “Stated Rate” shall be equal to:
(i)    for each Scheduled Interest Payment Date occurring on or prior to [March
15][August 31], [●]2, a per annum rate equal to [●]%3;
(ii)    for each Scheduled Interest Payment Date occurring after [March
15][August 31], [●]4 but on or prior to [March 15][August 31], [●]5, a per annum
rate equal to the sum of (A) (i) [●]%6, less (ii) [●]%7, plus (iii) 1.0% (such
amount, the “Base Rate”), plus (B) Three-Month LIBOR; and
(iii)    for each Scheduled Interest Payment Date occurring after [March
15][August 31], [●]8, a per annum rate equal to the sum of (A) the Base Rate,
plus (B) (i) 0.50%, multiplied by (ii) the number of consecutive five-year
periods (including any partial five-year period) occurring from [March
15][August 31], [●]9 to and including such Scheduled Interest Payment Date, plus
(C) Three-Month LIBOR.
“Three-Month LIBOR” shall be equal to three-month LIBOR as reported
_______________________________________________________________________________

2 Note to Draft: First Scheduled Interest Payment Date occurring after the fifth
anniversary of the Closing.
3 Note to Draft: Equal to (x) 4.35% plus (y) the 5-year U.S. treasury rate as
reported in the Eastern Edition of the Wall Street Journal two Business Days
prior to the Closing.
4 Note to Draft: See footnote 2.
5 Note to Draft: First Scheduled Interest Payment Date occurring after the tenth
anniversary of the Closing.
6 Note to Draft: Rate set forth in clause (i).
7 Note to Draft: Equal to the 5-year swap rate as reported in [the Eastern
Edition of the Wall Street Journal two Business Days prior to the Closing].
8 Note to Draft: See footnote 5.
9 Note to Draft: See footnote 5.

2

--------------------------------------------------------------------------------

in the Eastern Edition of the Wall Street Journal two Business Days prior to the
applicable Scheduled Interest Payment Date.
2.    Payment Restrictions. Notwithstanding anything to the contrary set forth
herein, any repayment of principal of or payment of interest on the Notes may be
made only with the prior approval of the Insurance Commissioner of the
Commonwealth of Pennsylvania (the “Commissioner”). If the Commissioner does not
approve the making of any payment or prepayment of principal of or interest on
this Note on the scheduled payment date, prepayment date or maturity date
thereof, as specified herein, the scheduled payment date, prepayment date or
maturity date, as the case may be, shall be extended and such payment, together
with interest accrued with respect thereto as contemplated by the following two
sentences, shall be made by OneBeacon on the next following Business Day on
which OneBeacon shall have the approval of the Commissioner to make such payment
together with such interest. Unless approved by the Commissioner, any repayment
of interest will only be made out of unassigned surplus. Interest will continue
to accrue on any such unpaid principal through the actual date of payment at the
Stated Rate. No interest will accrue on any interest with respect to which the
scheduled payment date has been extended, during the period of such extension.
3.    Optional Redemption; Prepayment. Subject to the prior approval of the
Commissioner and the satisfaction of the other Payment Restrictions, OneBeacon
may redeem the Notes in whole or in part at any time or from time to time at a
redemption price equal to 100% of the aggregate principal amount plus any
accrued and unpaid interest (calculated pursuant to the terms of the Notes) to
be redeemed. In addition, subject to the prior approval of the Commissioner and
the satisfaction of the other Payment Restrictions, OneBeacon shall redeem this
Note in whole or in part on March 15 of each year in an amount, if any, such
that, following such prepayment, OneBeacon’s “total adjusted capital” (as such
term is defined in, and calculated pursuant to, the risk-based capital
instructions permitted or prescribed by the insurance laws of the Commonwealth
of Pennsylvania) is equal to the product of 2.0 (or such other factor
established by the Commissioner) and OneBeacon’s “authorized control level RBC”
(as such term is defined in, and calculated pursuant to, the risk-based capital
instructions permitted or prescribed by the insurance laws of the Commonwealth
of Pennsylvania).
4.    Subordination. The principal of and interest on this Note shall not be a
liability or claim against OneBeacon, or any of its assets, except as provided
in Section 322.2 of The Insurance Company Law of 1921, as amended, of the
Commonwealth of Pennsylvania (the “Insurance Law”). This Note is subordinated to
all other liabilities of OneBeacon, except for any surplus notes the terms of
which expressly state that they are subordinated to this Note.
5.    Covenants. For so long as this Note remains outstanding or any amount
remains unpaid on this Note:
(a)    OneBeacon shall use commercially reasonable efforts to obtain the
approval of the Commissioner in accordance with Section 322.2 of the Insurance
Law for

3

--------------------------------------------------------------------------------

the payment by OneBeacon of interest on and principal of this Note on the
scheduled payment dates, prepayment date or maturity dates thereof, and, in the
event any such approval has not been obtained for any such payment or prepayment
at or prior to the scheduled payment date, prepayment date or maturity date, as
the case may be, to continue to use best efforts to obtain such approval
promptly thereafter. Not less than 45 days prior to the scheduled payment date,
prepayment date or maturity date (excluding any such maturity date which arises
as a result of the obtaining of an order or the granting of approval for the
rehabilitation, liquidation, conservation or dissolution of OneBeacon),
OneBeacon will seek the approval of the Commissioner to make each payment or
prepayment of interest on and principal of this Note. In addition, OneBeacon
shall notify in writing the holder of this Note no later than five Business Days
prior to the scheduled payment date for interest, date for the prepayment of
principal or the maturity date for principal in the event that the Commissioner
has not then approved the making of any such payment on such scheduled payment
date, prepayment date or such maturity date, and thereafter, if such payment or
prepayment has been approved by the Commissioner, shall promptly notify in
writing the holder of this Note of such approval.
(b)    Until the full principal amount of this Note and any interest incurred
thereon has been paid to the holder hereof, OneBeacon shall not, without the
prior written consent of the holder of this Note:
(i)    make any dividend or distribution to holders of its equity interests or
purchase or retire any of its equity interests;
(ii)    create, assume, incur or have outstanding any indebtedness (including
purchase money indebtedness), or become liable, whether as endorser, guarantor,
surety or otherwise, for any debt or obligation of any other person;
(iii)    cease operations, liquidate, merge, transfer, acquire or consolidate
with any entity, or dissolve or transfer or sell assets outside of the ordinary
course of business;
(iv)    amend its charter or bylaws in a manner that would adversely affect its
corporate existence, material rights (charter and statutory) or material
franchises; or
(v)    write, assume or acquire any new business (including through any
reinsurance or under existing treaties) other than pursuant to the fronting
requirements set forth in Section 5.23 of that certain Stock Purchase Agreement
between OneBeacon Insurance Group LLC, Trebuchet US Holdings, Inc. and the other
parties thereto, dated October 17, 2012, as amended from time to time.
6.    Remedies. A holder of this Note may enforce this Note only in the manner
set forth below.
(a)    In the event that any state or federal agency shall obtain an order or
grant approval for the rehabilitation, liquidation, conservation or dissolution
of OneBeacon, this Note will upon the obtaining of such order or the granting of
such

4

--------------------------------------------------------------------------------

approval immediately mature in full without any action on the part of the holder
of this Note, with payment thereon being subject to the Payment Restrictions,
and any restrictions imposed as a consequence of, or pursuant to, such
proceedings. Notwithstanding any other provision of this Note, in no event shall
any holder of this Note be entitled to declare this Note to immediately mature
or otherwise be immediately payable.
(b)    In the event that the Commissioner approves a payment of any interest on
or principal of, or any redemption payment with respect to, this Note, in whole
or in part, and OneBeacon fails to pay the full amount of such approved payment
on the date such amount is scheduled to be paid, such approved amount will be
immediately payable on such date without any action on the part of the holder of
this Note. In the event that OneBeacon fails to perform any of its other
obligations hereunder, the holder of this Note may pursue any available remedy
to enforce the performance of any provision of this Note; provided, however,
that such remedy shall in no event include the right to declare this Note
immediately payable, and shall in no circumstances be inconsistent with the
provisions of applicable law or the Payment Restrictions. A delay or omission by
the holder of this Note in exercising any right or remedy accruing as a result
of OneBeacon’s failure to perform its obligations hereunder and the continuation
thereof shall not impair such right or remedy or constitute a waiver of or
acquiescence in such non-performance by OneBeacon. To the extent permitted by
law, no remedy is exclusive of any other remedy and all remedies are cumulative.
(c)    Notwithstanding any other provision of this Note, but subject to the laws
and regulations of Pennsylvania, the right of any holder of this Note to receive
payment of the principal of and interest on this Note on or after the respective
scheduled payment date or maturity date, or to bring suit for the enforcement of
any such payment on or after such respective scheduled payment date or maturity
date, in each case subject to the Payment Restrictions, is absolute and
unconditional and shall not be impaired or affected without the consent of the
holder.
7.    Entire Agreement; Amendments. This Note represents the entire agreement
between the parties with respect to the subject matter hereof. No modification
of this Note is effective and no other agreement may modify or supersede the
terms of this Note, whether existing on the date of this Note or subsequently
entered into, unless the modification or agreement is approved in writing by
each of the Commissioner, OneBeacon and the holder of this Note.
8.    Governing Law. This Note shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania without regard to the
conflicts of laws principles of such State.
9.    Severability. In case any provision in this Note, other than the Payment
Restrictions, shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

5

--------------------------------------------------------------------------------

10.    Notices. All notices, requests, claims, demands or other communications
under this Note shall be deemed to have been duly given and made if in writing
and (a) at the time personally delivered if served by personal delivery upon the
party for whom it is intended, (b) at the time received if delivered by
registered or certified mail (postage prepaid, return receipt requested) or by a
national courier service (delivery of which is confirmed), or (c) upon
confirmation if sent by facsimile; in each case to the person at the address set
forth below, or such other address as may be designated in writing hereafter, in
the same manner, by such person:
to [●]:
[OneBeacon Insurance Group LLC
601 Carlson Parkway
Minnetonka, MN 55305
Telephone:
(952) 852-6731
(952) 852-6024

Facsimile:
(888) 353-6247
(888) 862-8724

Attention:
Maureen A. Phillips
Senior Vice President and General Counsel]

to the Company:
[Armour Group Holdings Limited
Bermuda Commercial Bank Building
3rd Floor, 19 Par-La-Ville Road
Hamilton HM 11
P.O. Box HM 66
Hamilton HM AX
Bermuda
Telephone: +1 (441) 292-9774
Attention: Pauline Richards]
11.    Assignment. This Note may be assigned by [●], in whole or in part, at any
time, subject to all the terms and conditions of this Note and specifically
paragraph 2. [●] and the Company shall provide the Commissioner with written
notice at least thirty (30) days prior to the intended date of the assignment.
This Note shall be canceled upon assignment, whether in whole or in part.
Concurrently with such cancellation, the Company shall issue new surplus notes
in the amount of the outstanding principal balance (a) if cancelled in whole, to
the assignee, and (b) if cancelled in part, allocated to each of the assignor
and the assignee to reflect such partial assignment, and such new surplus notes
shall contain the same terms as contained in this Note, as approved by the
Commissioner.
12.    No Third Party Beneficiaries. Nothing in this Note, expressed or implied,
shall give or be construed to give any person, firm, corporation or other
entity;

6

--------------------------------------------------------------------------------

other than the Company and [●] any legal or equitable right, remedy or claim
under or in respect to this Note or under any covenant, condition or provision
contained herein.
13.    Securities Act Compliance. [●], in consideration of the issuance hereof,
represents and warrants that it has been furnished with information sufficient
to make an informed decision to make the advance represented by this Note. [●],
by acceptance of this Note, acknowledges that this Note has been acquired in a
transaction exempt from the registration requirements of the Securities Act of
1933, as amended, and that the Company is relying, to the extent applicable,
upon such representations and warranties.
14.    Successors and Assigns. The covenants, stipulations, promises and
agreements contained in this Note shall bind and inure to the benefit of, and
shall be enforceable by the Company and [●], and their respective successors and
assigns.
  

[Signature page follows]

7

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, ONEBEACON INSURANCE COMPANY has caused this Note to be
signed by its duly authorized officer and its corporate seal to be affixed
hereto or imprinted hereon.

Dated:

ONEBEACON INSURANCE COMPANY
By: _______________________________ 
Name:
Title:

8

--------------------------------------------------------------------------------

Exhibit A – Part 2
EXHIBIT 8 – PART 2
FORM OF SELLER PARI PASSU NOTE

No.
 
 
$
 

ONEBEACON INSURANCE COMPANY

Surplus Note [due [●]]1 
ONEBEACON INSURANCE COMPANY, a property and casualty insurance company organized
under the laws of the Commonwealth of Pennsylvania (“OneBeacon”), for value
received, hereby promises to pay, subject to the Payment Restrictions (as
defined below), to [●] or its registered assigns, the principal sum of $[●], [on
[●]], and to pay interest thereon, subject to the Payment Restrictions (as
defined below), from [●] or from the most recent Scheduled Interest Payment Date
(as defined below) for which interest has been paid or duly provided for,
semi-annually in arrears on March 15 and August 31 in each year and on the date
on which this Note matures, commencing [●] (each, a “Scheduled Interest Payment
Date”), at the applicable Stated Rate, until the principal hereof is paid or
duly provided for. The payment by OneBeacon of principal and interest on this
Note shall be conditioned upon the payment restrictions set forth in paragraph 2
of this Note (the “Payment Restrictions”). Interest on this Note shall be
calculated on the basis of a 360-day year of twelve months of 30 days each.
1.    Payment. Payments of principal of this Note shall be made only against
surrender of this Note; provided, that in the case of payment of only a portion
of principal, OneBeacon shall execute a new Note in principal amount equal to
and in exchange for the remaining portion of the principal of the Note so
surrendered. Payments of interest on this Note will be made, in accordance with
the foregoing and subject to applicable laws and regulations, (i) by wire
transfer of immediately available funds to an account maintained by the person
entitled thereto with a bank if such registered holder gives notice to
OneBeacon, not less than 15 days (or such fewer days as OneBeacon may accept at
its discretion) prior to the applicable scheduled payment date or maturity date
hereof, of the payee’s account to which payment is to be made or, (ii) if no
such notice is given, by mailing a check on or before the scheduled payment date
of such payment to the person entitled thereto at such person’s address as
provided to OneBeacon. Unless the designation of the payee’s account to which
payment is to be made is revoked, any such designation made by such holder with
respect to this Note of the payee’s account to which payment is to be made shall
remain in effect with respect to any future payments with respect to this Note
payable to such holder. In any case where the scheduled payment date or maturity
date of this Note shall be at any place of payment a day on which banking
institutions are not carrying out transactions in U.S. dollars or are
_______________________________________________________________________________

1 Note to Draft: Scheduled maturity date to be 5 years following closing.
 

1

--------------------------------------------------------------------------------

authorized or obligated by law or executive order to close, then payment of
principal or interest need not be made on such date at such place but may be
made on the next succeeding day at such place which is not a day on which
banking institutions in the applicable jurisdiction are not carrying out
transactions in U.S. dollars or are authorized or obligated by law or executive
order to close (a “Business Day”), with the same force and effect as if made on
the scheduled payment date or maturity date thereof, and no interest shall
accrue on the amount of such payment for the period after such date, if such
payment is so made.
The “Stated Rate” shall be equal to:
(i)    for each Scheduled Interest Payment Date occurring on or prior to [March
15][August 31], [●]2, a per annum rate equal to [●]%3;
(ii)    for each Scheduled Interest Payment Date occurring after [March
15][August 31], [●]4 but on or prior to [March 15][August 31], [●]5, a per annum
rate equal to the sum of (A) (i) [●]%6, less (ii) [●]%7, plus (iii) 1.0% (such
amount, the “Base Rate”), plus (B) Three-Month LIBOR; and
(iii)    for each Scheduled Interest Payment Date occurring after [March
15][August 31], [●]8, a per annum rate equal to the sum of (A) the Base Rate,
plus (B) (i) 0.50%, multiplied by (ii) the number of consecutive five-year
periods (including any partial five-year period) occurring from [March
15][August 31], [●]9 to and including such Scheduled Interest Payment Date, plus
(C) Three-Month LIBOR.
_______________________________________________________________________________

2 Note to Draft: First Scheduled Interest Payment Date occurring after the fifth
anniversary of the Closing.
3 Note to Draft: Equal to (x) 4.35% plus (y) the 5-year U.S. treasury rate as
reported in the Eastern Edition of the Wall Street Journal two Business Days
prior to the Closing.
4 Note to Draft: See footnote 2.
5 Note to Draft: First Scheduled Interest Payment Date occurring after the tenth
anniversary of the Closing.
6 Note to Draft: Rate set forth in clause (i).
7 Note to Draft: Equal to the 5-year swap rate as reported in [the Eastern
Edition of the Wall Street Journal two Business Days prior to the Closing].
8 Note to Draft: See footnote 5.
9 Note to Draft: See footnote 5.

2

--------------------------------------------------------------------------------

“Three-Month LIBOR” shall be equal to three-month LIBOR as reported in the
Eastern Edition of the Wall Street Journal two Business Days prior to the
applicable Scheduled Interest Payment Date.
2.    Payment Restrictions. Notwithstanding anything to the contrary set forth
herein, any repayment of principal of or payment of interest on the Notes may be
made only with the prior approval of the Insurance Commissioner of the
Commonwealth of Pennsylvania (the “Commissioner”). If the Commissioner does not
approve the making of any payment or prepayment of principal of or interest on
this Note on the scheduled payment date, prepayment date or maturity date
thereof, as specified herein, the scheduled payment date, prepayment date or
maturity date, as the case may be, shall be extended and such payment, together
with interest accrued with respect thereto as contemplated by the following two
sentences, shall be made by OneBeacon on the next following Business Day on
which OneBeacon shall have the approval of the Commissioner to make such payment
together with such interest. Unless approved by the Commissioner, any repayment
of interest will only be made out of unassigned surplus. Interest will continue
to accrue on any such unpaid principal through the actual date of payment at the
Stated Rate. No interest will accrue on any interest with respect to which the
scheduled payment date has been extended, during the period of such extension.
3.    Optional Redemption; Prepayment. Subject to the prior approval of the
Commissioner and the satisfaction of the other Payment Restrictions, OneBeacon
may redeem the Notes in whole or in part at any time or from time to time at a
redemption price equal to 100% of the aggregate principal amount plus any
accrued and unpaid interest (calculated pursuant to the terms of the Notes) to
be redeemed. In addition, subject to the prior approval of the Commissioner and
the satisfaction of the other Payment Restrictions, OneBeacon shall redeem this
Note in whole or in part (x) on March 15 of each year in an amount, if any, such
that, following such prepayment and any concurrent dividend or distribution
pursuant to paragraph 5(b)(i), OneBeacon’s “total adjusted capital” (as such
term is defined in, and calculated pursuant to, the risk-based capital
instructions permitted or prescribed by the insurance laws of the Commonwealth
of Pennsylvania) is equal to the product of 2.0 (or such other factor
established by the Commissioner) and OneBeacon’s “authorized control level RBC”
(as such term is defined in, and calculated pursuant to, the risk-based capital
instructions permitted or prescribed by the insurance laws of the Commonwealth
of Pennsylvania) or (y) as contemplated by paragraph 5(b)(i).
4.    Subordination. The principal of and interest on this Note shall not be a
liability or claim against OneBeacon, or any of its assets, except as provided
in Section 322.2 of The Insurance Company Law of 1921, as amended, of the
Commonwealth of Pennsylvania (the “Insurance Law”). This Note is subordinated to
(x) all other liabilities of OneBeacon and (y) that certain surplus note of
OneBeacon issued to the initial holder of this Note concurrently with this Note
in the principal amount of $[●].
5.    Covenants. For so long as this Note remains outstanding or any amount
remains unpaid on this Note:

3

--------------------------------------------------------------------------------

(a)    OneBeacon shall use commercially reasonable efforts to obtain the
approval of the Commissioner in accordance with Section 322.2 of the Insurance
Law for the payment by OneBeacon of interest on and principal of this Note on
the scheduled payment dates, prepayment date or maturity dates thereof, and, in
the event any such approval has not been obtained for any such payment or
prepayment at or prior to the scheduled payment date, prepayment date or
maturity date, as the case may be, to continue to use best efforts to obtain
such approval promptly thereafter. Not less than 45 days prior to the scheduled
payment date, prepayment date or maturity date (excluding any such maturity date
which arises as a result of the obtaining of an order or the granting of
approval for the rehabilitation, liquidation, conservation or dissolution of
OneBeacon), OneBeacon will seek the approval of the Commissioner to make each
payment or prepayment of interest on and principal of this Note. In addition,
OneBeacon shall notify in writing the holder of this Note no later than five
Business Days prior to the scheduled payment date for interest, date for the
prepayment of principal or the maturity date for principal in the event that the
Commissioner has not then approved the making of any such payment on such
scheduled payment date, prepayment date or such maturity date, and thereafter,
if such payment or prepayment has been approved by the Commissioner, shall
promptly notify in writing the holder of this Note of such approval.
(b)    Until the full principal amount of this Note and any interest incurred
thereon has been paid to the holder hereof, OneBeacon shall not, without the
prior written consent of the holder of this Note:
(i)    make any dividend or distribution to holders of its equity interests or
purchase or retire any of its equity interests, unless, concurrently with such
dividend or distribution payment, the principal amount of this Note shall be
prepaid by an amount equal to the amount of such dividend or distribution
payment;
(ii)    create, assume, incur or have outstanding any indebtedness (including
purchase money indebtedness), or become liable, whether as endorser, guarantor,
surety or otherwise, for any debt or obligation of any other person;
(iii)    cease operations, liquidate, merge, transfer, acquire or consolidate
with any entity, or dissolve or transfer or sell assets outside of the ordinary
course of business;
(iv)    amend its charter or bylaws in a manner that would adversely affect its
corporate existence, material rights (charter and statutory) or material
franchises; or
(v)    write, assume or acquire any new business (including through any
reinsurance or under existing treaties) other than pursuant to the fronting
requirements set forth in Section 5.23 of that certain Stock Purchase Agreement
between OneBeacon Insurance Group LLC, Trebuchet US Holdings, Inc. and the other
parties thereto, dated October 17, 2012, as amended from time to time.

4

--------------------------------------------------------------------------------

6.    Remedies. A holder of this Note may enforce this Note only in the manner
set forth below.
(a)    In the event that any state or federal agency shall obtain an order or
grant approval for the rehabilitation, liquidation, conservation or dissolution
of OneBeacon, this Note will upon the obtaining of such order or the granting of
such approval immediately mature in full without any action on the part of the
holder of this Note, with payment thereon being subject to the Payment
Restrictions, and any restrictions imposed as a consequence of, or pursuant to,
such proceedings. Notwithstanding any other provision of this Note, in no event
shall any holder of this Note be entitled to declare this Note to immediately
mature or otherwise be immediately payable.
(b)    In the event that the Commissioner approves a payment of any interest on
or principal of, or any redemption payment with respect to, this Note, in whole
or in part, and OneBeacon fails to pay the full amount of such approved payment
on the date such amount is scheduled to be paid, such approved amount will be
immediately payable on such date without any action on the part of the holder of
this Note. In the event that OneBeacon fails to perform any of its other
obligations hereunder, the holder of this Note may pursue any available remedy
to enforce the performance of any provision of this Note; provided, however,
that such remedy shall in no event include the right to declare this Note
immediately payable, and shall in no circumstances be inconsistent with the
provisions of applicable law or the Payment Restrictions. A delay or omission by
the holder of this Note in exercising any right or remedy accruing as a result
of OneBeacon’s failure to perform its obligations hereunder and the continuation
thereof shall not impair such right or remedy or constitute a waiver of or
acquiescence in such non-performance by OneBeacon. To the extent permitted by
law, no remedy is exclusive of any other remedy and all remedies are cumulative.
(c)    Notwithstanding any other provision of this Note, but subject to the laws
and regulations of Pennsylvania, the right of any holder of this Note to receive
payment of the principal of and interest on this Note on or after the respective
scheduled payment date or maturity date, or to bring suit for the enforcement of
any such payment on or after such respective scheduled payment date or maturity
date, in each case subject to the Payment Restrictions, is absolute and
unconditional and shall not be impaired or affected without the consent of the
holder.
7.    Entire Agreement; Amendments. This Note represents the entire agreement
between the parties with respect to the subject matter hereof. No modification
of this Note is effective and no other agreement may modify or supersede the
terms of this Note, whether existing on the date of this Note or subsequently
entered into, unless the modification or agreement is approved in writing by
each of the Commissioner, OneBeacon and the holder of this Note.
8.    Governing Law. This Note shall be governed by and construed in accordance
with the laws of the Commonwealth of Pennsylvania without regard to the
conflicts of laws principles of such State.

5

--------------------------------------------------------------------------------

9.    Severability. In case any provision in this Note, other than the Payment
Restrictions, shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
10.    Notices. All notices, requests, claims, demands or other communications
under this Note shall be deemed to have been duly given and made if in writing
and (a) at the time personally delivered if served by personal delivery upon the
party for whom it is intended, (b) at the time received if delivered by
registered or certified mail (postage prepaid, return receipt requested) or by a
national courier service (delivery of which is confirmed), or (c) upon
confirmation if sent by facsimile; in each case to the person at the address set
forth below, or such other address as may be designated in writing hereafter, in
the same manner, by such person:
to [●]:
[OneBeacon Insurance Group LLC
601 Carlson Parkway
Minnetonka, MN 55305
Telephone:
(952) 852-6731
(952) 852-6024

Facsimile:
(888) 353-6247
(888) 862-8724

Attention:
Maureen A. Phillips
Senior Vice President and General Counsel]

to the Company:
[Armour Group Holdings Limited
Bermuda Commercial Bank Building
3rd Floor, 19 Par-La-Ville Road
Hamilton HM 11
P.O. Box HM 66
Hamilton HM AX
Bermuda
Telephone: +1 (441) 292-9774
Attention: Pauline Richards]
11.    Assignment. This Note may be assigned by [●], in whole or in part, at any
time, subject to all the terms and conditions of this Note and specifically
paragraph 2. [●] and the Company shall provide the Commissioner with written
notice at least thirty (30) days prior to the intended date of the assignment.
This Note shall be canceled upon assignment, whether in whole or in part.
Concurrently with such cancellation, the Company shall issue new surplus notes
in the amount of the outstanding principal balance (a) if cancelled in whole, to
the assignee, and (b) if cancelled in part, allocated to each of the assignor
and the assignee to reflect such partial assignment, and

6

--------------------------------------------------------------------------------

such new surplus notes shall contain the same terms as contained in this Note,
as approved by the Commissioner.
12.    No Third Party Beneficiaries. Nothing in this Note, expressed or implied,
shall give or be construed to give any person, firm, corporation or other
entity; other than the Company and [●] any legal or equitable right, remedy or
claim under or in respect to this Note or under any covenant, condition or
provision contained herein.
13.    Securities Act Compliance. [●], in consideration of the issuance hereof,
represents and warrants that it has been furnished with information sufficient
to make an informed decision to make the advance represented by this Note. [●],
by acceptance of this Note, acknowledges that this Note has been acquired in a
transaction exempt from the registration requirements of the Securities Act of
1933, as amended, and that the Company is relying, to the extent applicable,
upon such representations and warranties.
14.    Successors and Assigns. The covenants, stipulations, promises and
agreements contained in this Note shall bind and inure to the benefit of, and
shall be enforceable by the Company and [●], and their respective successors and
assigns.
  
[Signature page follows]

7

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, ONEBEACON INSURANCE COMPANY has caused this Note to be
signed by its duly authorized officer and its corporate seal to be affixed
hereto or imprinted hereon.

Dated:

ONEBEACON INSURANCE COMPANY
By: _______________________________ 
Name:
Title:

8

--------------------------------------------------------------------------------

Exhibit B

Forms of Retained Business Reinsurance Agreement and
Run-Off Business Reinsurance Agreement

[Please see attached]

--------------------------------------------------------------------------------

Exhibit B – Part 1

EXHIBIT 3
FORM OF RETAINED BUSINESS REINSURANCE AGREEMENT

AMENDED AND RESTATED
100% QUOTA SHARE REINSURANCE AGREEMENT (Specialty)

THIS AGREEMENT, dated as of [ ], 2014, by and between ONEBEACON INSURANCE
COMPANY, a Pennsylvania corporation (the “Company”), having an address at 601
Carlson Parkway, Suite 600, Minnetonka, MN 55305, and [ATLANTIC SPECIALTY
INSURANCE COMPANY, a New York corporation (the “Reinsurer”)]1, having an address
at [601 Carlson Parkway, Suite 600, Minnetonka, MN 55305] (this Agreement”),
amends and restates in its entirety that certain 100% Quota Share Reinsurance
Agreement (Specialty) dated as of [October 1, 2012] by and between the Company
and [the Reinsurer]2 (the “Original Agreement”).

RECITALS

This Agreement is being entered into pursuant to Section 2.2 of that certain
Stock Purchase Agreement (as amended, the “SPA”), dated October 17, 2012, by and
among OneBeacon Insurance Group LLC, Trebuchet US Holdings, Inc., and OneBeacon
Insurance Group, Ltd. and Armour Group Holdings Limited (both for the limited
purposes set forth in the SPA).

WITNESSETH:

In consideration of the mutual covenants contained herein, the Reinsurer hereby
reinsures the Company to the extent and on the terms and conditions hereinafter
set forth.

1.    (a)    “Actual Damages” means those amounts awarded to compensate for the
actual damages sustained, and not awarded as a penalty, nor fixed in amount by
statute;

(b)    “Affiliate” means, with respect to any specified person or entity, any
other person or entity that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with,
such specified person or entity, provided, however, that neither White Mountains
Insurance Group, Ltd. nor any Affiliate of White Mountains Insurance Group, Ltd.
shall be deemed to be an Affiliate of the Reinsurer or any person or entity
controlled by the Reinsurer other than OneBeacon Insurance Group, Ltd. and any
person or entity controlled by OneBeacon Insurance Group, Ltd. For purposes of
this definition, “control” (including the terms “controlled by” and “under
common control with”) with respect to the relationship between or among two (2)
or more
_______________________________________________________________________________
1    The Restructuring contemplates that ASIC will be merged into a new
Pennsylvania domiciled insurance company, OneBeacon Specialty Insurance Company
(“OBSIC”), prior to the Closing Date. In the event that merger (the “ASIC/OBSIC
Merger”) is effected prior to the Closing Date, the bracketed language will be
replaced by “OneBeacon Specialty Insurance Company, a Pennsylvania corporation
and the successor-by-merger to Atlantic Specialty Insurance Company, New York
corporation (the “Reinsurer”)”.
2     If the ASIC/OSBIC Merger is effected prior to the Closing Date, the
bracketed language will be replaced with “Atlantic Specialty Insurance Company”.

1

--------------------------------------------------------------------------------

persons or entities, means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a person or
entity whether through the ownership of voting securities, by contract or
otherwise;

(c)    “ASA” means the Administrative Services Agreement (the “ASA”), dated as
of the Closing Date, between the Company and the Reinsurer as the administrator;

(d)    “Closing Date” shall have the meaning assigned to such term in the SPA;

(e)    “Extracontractual Damages” means any and all costs, expenses, damages,
liabilities or obligations of any kind or nature (including without limitation
attorneys fees, consequential and incidental damages, Actual Damages, Punitive
and Exemplary Damages, and Statutory Penalties) which arise out of, result from
or relate to any act or omission, whether or not in bad faith, intentional,
willful, negligent, reckless, careless or otherwise, in connection with a Policy
or any of the Liabilities, and which are not contractually covered by the
express terms and conditions of such Policy;

(f)    “Liabilities” means any and all liabilities of the Company with respect
to the Policies, including reserves for unearned premiums, losses (both reported
and incurred but not reported), Extracontractual Damages, any loss in excess of
the limits arising under or covered by a Policy, and Loss Adjustment Expenses
(both reported and incurred but not reported), and all outstanding underwriting
and other expenses, as evidenced by the books and records of the Company, but
shall not include separate company liabilities of a non-underwriting or
administrative nature which may arise from time to time, including without
limitation inter-company balances, liabilities for Federal income taxes,
expenses and taxes related to the ownership of real estate, liabilities incurred
in connection with investment transactions, or liabilities for dividends to
shareholders; provided, however, that Liabilities shall specifically exclude
liabilities related to Runoff Policies and Extracontractual Damages arising from
any action of the Company following the Effective Date, unless such action was
taken at the direction of or with the consent of the Reinsurer or by the
Reinsurer on behalf of the Company.

(g)    “Loss Adjustment Expenses” means reasonable and customary out-of-pocket
costs and expenses paid by the Company for the investigation, adjustment,
litigation (including without limitation reasonable attorneys’ fees) and
settlement of claims, as distinguished from the amount of a claimant’s recovery
from the Company in connection with such claimant’s Policy, but not including
(i) the office expenses of the Company and the salaries and expenses of its
employees, or (ii) any costs and expenses paid directly or otherwise covered by
the Reinsurer in its capacity as the administrator under the ASA;

(h)     “Policy” means a Specialty Lines contract or policy of insurance issued
by, or a reinsurance contract under which Specialty Lines business is assumed
by, the Company or one of its Affiliates;

2

--------------------------------------------------------------------------------

(i)    “Punitive and Exemplary Damages” means those damages awarded as a
penalty, the amount of which is neither governed nor fixed by statute;

(j)    “Runoff Business Reinsurance Agreement” has the meaning ascribed to that
term in the SPA;
(k)     “Runoff Business” has the meaning ascribed to that term in the Runoff
Business Reinsurance Agreement;
(l)    “Runoff Policies” has the meaning ascribed to the term “Policies” in the
Runoff Business Reinsurance Agreement;
(m)    “Specialty Lines” means (i) any industry-segmented business or risk,
regardless of size, type or class of business or risk, where the market,
industry or program is a clearly defined group of insureds with predominately
similar risk characteristics and where the policy forms, marketing,
underwriting, claims or loss control functions are designed for the unique
characteristics of the market, industry or program, reasonably and in good faith
characterized by Company, Reinsurer and their Affiliates as specialty business
or risk, together with those commercial coverages necessary to write the entire
account, and (ii) any other insurance or reinsurance business of the Company
other than the Runoff Business pursuant to Runoff Policies; and
(n)    “Statutory Penalties” are those amounts awarded as a penalty, but are
fixed in amount by statute.

All accounting terms used herein and not otherwise defined shall, where the
context reasonably allows, have the same meanings as in the Company’s Annual
Statements filed with the Pennsylvania Insurance Department.

2.    This Agreement shall be effective as of 12:01 a.m. on the Closing Date
(the “Effective Date”), and shall apply to all Policies (a) underwritten or
assumed by the Company on or after the Effective Date or (b) outstanding as of
the Effective Date and to all such risks thereafter underwritten or assumed by
the Company during the continuance of this Agreement.

3.    The Company hereby cedes and transfers to the Reinsurer, and the Reinsurer
hereby reinsures and assumes from the Company, all Liabilities incurred under or
in connection with all Policies issued by the Company on or prior to the
Effective Date.

4.    The Company hereby agrees to cede and transfer to the Reinsurer, and the
Reinsurer hereby agrees to reinsure and assume from the Company, automatically
from inception, all Liabilities of the Company incurred under or in connection
with all Policies issued by it after the Effective Date.
    
5.    As between the Reinsurer and the Company, the Reinsurer shall have the
sole benefit of, and any right to collect all reinsurance recoveries under, any
third party reinsurance agreements that provide reinsurance specifically and
solely for the Policies;

3

--------------------------------------------------------------------------------

provided, however, that the Reinsurer’s liability hereunder shall not be
affected by reason of the inability to collect from any third party
reinsurer(s), whether specific or general, any amounts that may have become due
from such reinsurer(s), whether such inability arises from the insolvency of
such other reinsurer(s) or otherwise. In the event of any inconsistency between
the provisions of this Agreement and the provisions of the SPA with respect to
reinsurance with third parties or Shared Reinsurance (as defined in the SPA),
the terms of the SPA shall govern.

6.    In consideration of the agreements of the Reinsurer herein contained, the
Company hereby agrees to assign and transfer to the Reinsurer an amount in cash
or other assets equal to the aggregate of the Company’s Liabilities assumed by
the Reinsurer as of the Effective Date.

7.    Administration and Related Matters.

(a)    As of the Effective Date, the Company hereby authorizes and empowers the
Reinsurer to collect and receive all premiums; to take charge of, adjust and pay
all Liabilities with respect to any and all Policies previously or thereafter
issued by the Company; to obtain reinsurance (in the Reinsurer’s own name and
for its own account) with respect to the Policies; and in all respects to act as
though said Policies were issued by the Reinsurer. The Company also authorizes
and empowers the Reinsurer to perform, and the Reinsurer hereby agrees to
perform, on behalf of the Company various services necessary in connection with
administration of the Policies, including, without limitation, policy
development, marketing, underwriting, policy administration, loss settlement,
accounting, maintenance of books and records, and data processing (in each case
solely with respect to the Policies and not generally for the Company).
Coincident with the exercise by the Reinsurer of the authority granted hereunder
either in whole or in part, the Reinsurer agrees to pay, all Liabilities for the
Policies and all of the Company’s underwriting, administrative and other
expenses related to the Specialty Lines business. The provisions of this Section
7 shall be subject to the ASA, and in the event of any conflict between the
terms of this Agreement and the ASA, the terms of the ASA shall govern. For the
avoidance of doubt, Section 20.10 of the ASA regarding subcontracting shall
apply to administrative services to be provided pursuant to the ASA.

(b)    Except as directed by the Reinsurer or as performed by the Reinsurer
acting on behalf of the Company in the Reinsurer’s capacity as the Administrator
under the ASA, the Company, on its own initiative, shall not change the terms or
conditions of any Policy. If the Liabilities under any of the Policies are
changed (A) because of changes made on or after the Effective Date in the terms
and conditions of the Policies effected by the Reinsurer acting pursuant to the
ASA or (B) by reason of the requirements of any governmental authority or
otherwise required by applicable law, the Reinsurer will share proportionately,
on a 100% quota share basis, in such changes, and the Company and the Reinsurer
will make all appropriate adjustments to amounts due each other under this
Agreement. With respect to any change required by reason of the requirement of
any governmental authority or otherwise required by applicable law, the Company
shall, to the extent practicable, prior to the effectiveness of any such change,
promptly notify the Reinsurer of such proposed change and afford the Reinsurer
(at the Reinsurer’s sole cost

4

--------------------------------------------------------------------------------

and expense) the opportunity, to the extent practicable, to object to such
change under applicable administrative procedures (both formal and informal).

8.    The Company hereby sells, transfers and assigns, and the Reinsurer hereby
purchases, all right, title and interest of the Company in and to assets
relating to the Specialty Lines business, including but not limited to its
agents’ balances, uncollected premiums, premium notes receivable, amounts due
for inspection services and other functions relating to underwriting operations,
and any other underwriting assets and fixed assets that may relate to the
Policies existing or arising after the Effective Date as mutually agreed by the
Company and the Reinsurer.

9.    It is agreed that the obligations of either party under this Agreement and
the ASA to transfer cash or other assets to the other party may be offset by the
reciprocal obligations of the other party so that only net amounts shall be
required to be transferred.

10.    The conditions of the reinsurance under this Agreement shall in all cases
be identical with the conditions of the Policies and their resulting
obligations.

11.    Except as otherwise required by the context of this Agreement, the
amounts of all payments due under this Agreement shall be determined on the
basis of the Company’s Annual Statements filed with the Pennsylvania Insurance
Department.

12.    All collections and payments of any kind under this Agreement shall be
settled between the parties no later than sixty (60) days following the close of
each calendar quarter, in accordance with the ASA.

13.    This Agreement shall remain in effect until the natural expiry of all
obligations of the Company under the Policies and until all obligations of the
Company and the Reinsurer hereunder have been discharged in full.

14.    The reinsurance provided by this Agreement shall be payable by the
Reinsurer directly to the Company or to its liquidator, receiver or statutory
successor on the basis of the liability of the Company under the Policies
reinsured without diminution because of the insolvency of the Company. In the
event of the insolvency of the Company, the liquidator, receiver or statutory
successor of the Company shall give written notice of the pendency of each claim
against the Company on a Policy reinsured within a reasonable time after such
claim is filed in the insolvency proceeding; and 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 which it may deem available to the Company, its liquidator, receiver or
statutory successor. The expense thus incurred by the Reinsurer shall be
chargeable, subject to court approval, against the Company as part of the
expense of liquidation to the extent of such proportionate share of the benefit
as shall accrue to the Company solely as a result of the defense undertaken by
the Reinsurer. The reinsurance shall be payable as hereinbefore in this
paragraph provided except (a) where the Policy specifically provides another
payee of such reinsurance in the event of the insolvency of the Company and (b)
where the Reinsurer with the consent of the direct insured or insureds has
assumed such

5

--------------------------------------------------------------------------------

Policy obligations of the Company as direct obligations of the Reinsurer to the
payees under such Policies and in substitution for the obligations of the
Company to such payees.

15.    Neither this Agreement nor any of the rights or obligations hereunder may
be assigned by any party hereto without the prior written consent of all other
parties hereto. Subject to the foregoing, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.

16.    Any provision of this Agreement may be amended, modified or waived if,
and only if, such amendment, modification or waiver is in writing and signed, in
the case of an amendment, by the parties hereto, or in the case of a waiver, by
the party hereto against whom the waiver is to be effective. No failure or delay
by any party hereto in exercising any right, power or privilege hereunder shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.

17.    This Agreement constitutes the entire agreement between the parties with
respect to the business being reinsured hereunder, and there are no
understandings between the parties other than as expressed in this Agreement.

18.    Credit for Reinsurance. The Reinsurer acknowledges that the Company’s
ability to obtain full credit on its statutory financial statements for the
reinsurance provided by this Agreement is an essential and material part of this
transaction, failing which this Agreement will not fulfill its intended purpose.
The Reinsurer shall promptly notify the Company of any event or change or
condition that is reasonably likely to result in the Reinsurer ceasing to be
authorized to engage in the business of insurance or reinsurance in the
Company’s state of domicile. In the event that Reinsurer ceases to be so
authorized, it shall immediately, but in any case within fifteen (15) days after
ceasing to be authorized, take such steps as are necessary to (a) restore such
license and authority, (b) become accredited as a reinsurer in the Company’s
state of domicile, or (c) establish a qualified trust fund or provide a letter
of credit, in each case, such that the Company shall be able to obtain full
credit on its statutory financial statements for the reinsurance provided by
this Agreement in the Company’s state of domicile.

19.    Arbitration. (a) The parties hereto agree to act in all things with the
highest good faith. However, in the event the parties hereto cannot mutually
resolve a dispute or claim which arises out of, or in connection with this
Agreement, the parties hereto agree that the dispute or claim shall be submitted
to binding arbitration, regardless of the insolvency, bankruptcy, rehabilitation
or liquidation of either party, unless the conservator, receiver, liquidator, or
statutory successor is specifically exempted from an arbitration proceeding by
applicable state law. Any arbitration shall be based upon the Procedures for the
Resolution of U.S. Insurance and Reinsurance Disputes dated September 2009 (the
“Procedures”) -- Regular Panel Version, and as supplemented or limited by this
Section 19. In the event of any conflict between the Procedures and this
Section, this Section, and not the Procedures, will control.

6

--------------------------------------------------------------------------------

(b)    Notice. Either party may initiate arbitration by providing written
notification to the other party. Such written notice shall contain a brief
statement of the issue(s), the failure on behalf of the parties to reach
amicable agreement and the date of demand for arbitration. The party to which
the notice is sent will respond to the notification in writing, within ten (10)
days of its receipt. Any notice provided by either party under this provision
shall be given as provided in Section 20.

(c)    Panel. The arbitration panel (the “Panel”) shall consist of three
disinterested arbitrators, one to be appointed by the Company, one to be
appointed by the Reinsurer and the third to be appointed by the two
party-appointed arbitrators. The third arbitrator shall serve as the umpire, who
shall be neutral. The arbitrators and umpire shall be persons who are current or
former officers or executives of a property and casualty insurer or reinsurer,
other than the parties or their Affiliates or subsidiaries, with more than ten
(10) years property and casualty insurance experience. The arbitrators will
regard this Agreement from the standpoint of practical business and equitable
principles rather than that of strict law.

(d)    Procedure.
 
(i)    Within thirty (30) days of the commencement of the arbitration
proceeding, each party shall provide the other party with the identification of
its party-appointed arbitrator, and his or her address (including telephone, fax
and e-mail information), a copy of the arbitrator’s curriculum vitae and a
completed Procedures Candidate Questionnaire, as provided for in the Procedures.
If either party fails to appoint an arbitrator within that thirty (30) day
period, the non-defaulting party will appoint an arbitrator to act as the
party-appointed arbitrator for the defaulting party. The two party-appointed
arbitrators shall seek to reach agreement on an umpire as soon as practical but
no later than thirty (30) days after the appointment of the second arbitrator.
The party-appointed arbitrators may consult, in confidence, with the party who
appointed them concerning the appointment of the umpire.

(ii)    Where the two party-appointed arbitrators have failed to reach agreement
on an umpire within thirty (30) days, as specified in subsection (i) of this
subsection (d), an umpire shall be selected in accordance with Section 6.7 of
the Procedures from potential umpires selected by each party from the Certified
Umpire List maintained by ARIAS (US). The expense of the appointment of the
umpire shall be borne equally by each party to this Agreement.

(iii)    The Panel may, in its sole discretion, make orders and directions as it
considers to be necessary for the final determination of the matters in dispute.
Such orders and directions may be necessary with regard to pleadings, discovery,
inspection of documents, examination of witnesses and any other matters relating
to the conduct of the arbitration. The Panel will have the widest discretion
permissible under the law and practice of the place of arbitration when making
such orders or directions.

7

--------------------------------------------------------------------------------

(iv)    The Panel will base their decision on the terms and conditions of this
Agreement plus, as necessary, on the customs and practices of the property and
casualty insurance and reinsurance industry rather than solely on a strict
interpretation of the applicable law; there will be no appeal from their
decision, and should either party fail to comply with the decision of the
arbitrators, the other party shall have the right to seek and receive the
assistance of any court having jurisdiction of the subject matter to enforce the
decision of the arbitrators by having the arbitrators’ decision reduced to
judgment.
  
(e)    Place of Arbitration. The arbitration shall take place in New York, New
York and shall commence no later than ninety (90) days after the appointment of
the umpire.

(f)    Venue. The federal and state courts of the State of New York sitting in
New York County shall have exclusive jurisdiction over any and all court
proceedings that either party may initiate to compel arbitration or to enforce
or confirm an arbitration award, each party hereby submitting to the personal
jurisdiction thereof, and the parties agree not to raise the objection that such
courts are not a convenient forum.

(g)    Arbitration Panel Decision. The decision of the Panel shall be in writing
and delivered to the parties promptly following the close of the arbitration
proceedings, and shall be final and binding on the parties.

(h)    Arbitration Costs. Each party shall bear the expense of its own
arbitration, including its arbitrator and outside attorney fees, and jointly and
equally bear with the other party the expenses of the umpire. Any remaining
costs of the arbitration shall be determined by the Panel, which may take into
account the law and practice of the place of arbitration.

20.    Notices. All notices, requests, claims, demands or other communications
hereunder shall be deemed to have been duly given and made if in writing and (a)
at the time personally delivered if served by personal delivery upon the party
for whom it is intended, (b) at the time received if delivered by registered or
certified mail (postage prepaid, return receipt requested) or by a national
courier service (delivery of which is confirmed), or (c) upon confirmation if
sent by facsimile; in each case to the person at the address set forth below, or
such other address as may be designated in writing hereafter, in the same
manner, by such person:

to the Reinsurer:

[ ]
[ ]
[ ]
Telephone: [ ]
Facsimile: [ ]
Attention: [ ]

8

--------------------------------------------------------------------------------

with a copy (which shall not constitute notice to Reinsurer for the purposes of
this Section 20) to:

Mayer Brown LLP
71 South Wacker Drive
Chicago, Illinois 60606
Telephone: (312) 782-0600
Facsimile: (312) 701-7711
Attention:     Edward S. Best
    
to the Company:

[●]
[●]
[●]
Telephone:    [●]
Facsimile:     [●]
Attention:     [●]

with a copy (which shall not constitute notice to the Company for the purposes
of this Section 20) to:

Edwards Wildman Palmer LLP
750 Lexington Avenue
New York, NY 10022
Telephone:     (212) 912-2789
Facsimile:     (212) 308-4844
Attention:     Nick Pearson

21.    Governing Law. This Agreement and its enforcement will be governed by,
and interpreted in accordance with, the laws of the State of New York applicable
to agreements made and to be performed entirely within such state without regard
to the conflicts of law provisions thereof.

22.    Reports; Access to Records. All reporting for the reinsurance provided
under this Agreement and access to records relating thereto shall be provided in
accordance with the ASA.

23.    Severability. The provisions of this Agreement shall be deemed severable
and the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof. If any provision of
this Agreement, or the application thereof to any person or entity or any
circumstance, is found by a court or other governmental authority of competent
jurisdiction to be invalid or unenforceable, the remainder of this Agreement and
the application of such provision to other persons, entities or circumstances
shall not be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction. If any
provision of this Agreement is so

9

--------------------------------------------------------------------------------

broad as to be unenforceable, the provision shall be interpreted to be only so
broad as would be enforceable.

24.    Survival. Notwithstanding the provisions of Section 13, Sections 9, 12,
13 through 17 and 19 through 24 shall survive the termination or expiration of
this Agreement.

25.    Errors and Omissions. Inadvertent delays, errors or omissions made by
either the Company or the Reinsurer in connection with this Agreement or any
transaction hereunder shall not relieve the other party from any liability which
would have attached to such parties had such delay, error or omission not
occurred, provided that such error or omission is rectified as soon as possible
after discovery, and provided further that the party making such error or
omission or is otherwise responsible for such delay shall be responsible for any
additional liability which attaches as a result.

26.    Counterparts. This Agreement may be executed in any number of
counterparts, which may be facsimile or email counterparts, and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which counterparts of
this Agreement taken together shall constitute but one and the same instrument.

[signature page follows]
    

10

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized officers as of the day and year first above
written.

 
ONEBEACON INSURANCE COMPANY
 
 
 
 
 
 
Attest
 
By
 
 
 
 
 
 
 
 
 
 
 
 
Secretary
 
 
 
 
 
 
 
 
 
[ATLANTIC SPECIALTY INSURANCE COMPANY]3
 
 
 
 
 
 
Attest
 
By
 
 
 
 
 
 
 
 
 
 
 
 
Secretary
 
 
 

_______________________________________________________________________________

3    If the ASIC/OSBIC Merger is effected prior to the Closing Date, the
bracketed language will be replaced by “ONEBEACON SPECIALTY INSURANCE COMPANY”.

--------------------------------------------------------------------------------

Exhibit B – Part 2

EXHIBIT 6
FORM OF RUN-OFF BUSINESS REINSURANCE AGREEMENT

AMENDED AND RESTATED
100% QUOTA SHARE REINSURANCE AGREEMENT (Runoff)

THIS AGREEMENT, dated as of [ ], 2014, by and between [ATLANTIC SPECIALTY
INSURANCE COMPANY, a New York corporation (the “Company”)]1, having an address
at 601 Carlson Parkway, Suite 600, Minnetonka, MN 55305, and ONEBEACON INSURANCE
COMPANY, a Pennsylvania corporation (the “Reinsurer”), having an address at [601
Carlson Parkway, Suite 600, Minnetonka, MN 55305] (this Agreement”), amends and
restates in its entirety that certain 100% Quota Share Reinsurance Agreement
(Specialty) dated as of [October 1, 2012] by and between [the Company]2 and the
Reinsurer (the “Original Agreement”).

RECITALS

This Agreement is being entered into pursuant to Section 2.2 of that certain
Stock Purchase Agreement (as amended, the “SPA”), dated October 17, 2012, by and
among OneBeacon Insurance Group LLC, Trebuchet US Holdings, Inc., and OneBeacon
Insurance Group, Ltd. and Armour Group Holdings Limited (both for the limited
purposes set forth in the SPA).

WITNESSETH:

In consideration of the mutual covenants contained herein, the Reinsurer hereby
reinsures the Company to the extent and on the terms and conditions hereinafter
set forth.

1.    (a)    “Actual Damages” means those amounts awarded to compensate for the
actual damages sustained, and not awarded as a penalty, nor fixed in amount by
statute;

(b)    “Affiliate” means, with respect to any specified person or entity, any
other person or entity that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with,
such specified person or entity, provided, however, that neither White Mountains
Insurance Group, Ltd. nor any Affiliate of White Mountains Insurance Group, Ltd.
shall be deemed to be an Affiliate of the Company or any person or entity
controlled by the Company other than OneBeacon Insurance Group, Ltd. and any
person or entity controlled by OneBeacon Insurance Group, Ltd. For purposes of
this definition, “control” (including the terms “controlled by” and “under
common control with”) with respect to the relationship between or among two (2)
or more persons or entities, means the possession, directly or indirectly, of
the power to direct or
_______________________________________________________________________________

1     The Restructuring contemplates that ASIC will be merged into a new
Pennsylvania domiciled insurance company, OneBeacon Specialty Insurance Company
(“OBSIC”), prior to the Closing Date. In the event that merger (the “ASIC/OBSIC
Merger”) is effected prior to the Closing Date, the bracketed language will be
replaced by “OneBeacon Specialty Insurance Company, a Pennsylvania corporation
and the successor-by-merger to Atlantic Specialty Insurance Company, New York
corporation (the “Company”)”.
2     If the ASIC/OSBIC Merger is effected prior to the Closing Date, the
bracketed language will be replaced with “Atlantic Specialty Insurance Company”.

1

--------------------------------------------------------------------------------

cause the direction of the management and policies of a person or entity whether
through the ownership of voting securities, by contract or otherwise;

(c)    “ASA” means the Administrative Services Agreement (the “ASA”), dated as
of the Closing Date, between the Company and the Reinsurer as the administrator;

(d)    “Closing Date” shall have the meaning assigned to such term in the SPA;

(e)    “Extracontractual Damages” means any and all costs, expenses, damages,
liabilities or obligations of any kind or nature (including without limitation
attorneys fees, consequential and incidental damages, Actual Damages, Punitive
and Exemplary Damages, and Statutory Penalties) which arise out of, result from
or relate to any act or omission, whether or not in bad faith, intentional,
willful, negligent, reckless, careless or otherwise, in connection with a Policy
or any of the Liabilities, and which are not contractually covered by the
express terms and conditions of such Policy;

(f)    “Liabilities” means any and all liabilities of the Company with respect
to the Policies, including reserves for unearned premiums, losses (both reported
and incurred but not reported), Extracontractual Damages (to the extent arising
from an act or omission to act of the Reinsurer hereunder or under the ASA on or
after the Closing Date), any loss in excess of the limits arising under or
covered by a Policy, and Loss Adjustment Expenses (both reported and incurred
but not reported), and all outstanding underwriting and other expenses, as
evidenced by the books and records of the Company, but shall not include
separate company liabilities of a non-underwriting or administrative nature
which may arise from time to time, including without limitation inter-company
balances, liabilities for Federal income taxes, expenses and taxes related to
the ownership of real estate, liabilities incurred in connection with investment
transactions, or liabilities for dividends to shareholders; provided, however,
that Liabilities shall specifically exclude liabilities related to Specialty
Lines business and Extracontractual Damages arising from any action of the
Company following the Effective Date, unless such action was taken at the
direction of or with the consent of the Reinsurer or by the Reinsurer on behalf
of the Company.

(g)    “Loss Adjustment Expenses” means reasonable and customary out-of-pocket
costs and expenses paid by the Company for the investigation, adjustment,
litigation (including without limitation reasonable attorneys’ fees) and
settlement of claims, as distinguished from the amount of a claimant's recovery
from the Company in connection with such claimant’s Policy, but not including
(i) the office expenses of the Company and the salaries and expenses of its
employees, or (ii) any costs and expenses paid directly or otherwise covered by
the Reinsurer in its capacity as the administrator under the ASA;

(h)     “Policy” means (a) a Runoff Business contract or policy of insurance
issued by, or a reinsurance contract under which Runoff Business is assumed by,
the Company or one of its Affiliates on or prior to December 31, 2011, which is
reflected in the Pro Forma Balance Sheet (as defined in the SPA), and (b) a
Runoff Business contract or policy of insurance issued by, or a reinsurance
contract under which Runoff Business is

2

--------------------------------------------------------------------------------

assumed by, the Company or one of its Affiliates following December 31, 2011 but
on or prior to the Closing Date that is listed on Schedule I attached hereto;

(i)    “Punitive and Exemplary Damages” means those damages awarded as a
penalty, the amount of which is neither governed nor fixed by statute;

(j)     “Runoff Business” means the business of the Company identified as
run-off business which consists primarily of non-specialty commercial lines
business as well as national accounts, certain specialty programs and regional
agency business transferred to Liberty Mutual Insurance Group and other business
identified by the Company as run-off;
(k)    “Specialty Lines” means (i) any industry-segmented business or risk,
regardless of size, type or class of business or risk, where the market,
industry or program is a clearly defined group of insureds with predominately
similar risk characteristics and where the policy forms, marketing,
underwriting, claims or loss control functions are designed for the unique
characteristics of the market, industry or program, reasonably and in good faith
characterized by Company, Reinsurer and their Affiliates as specialty business
or risk, together with those commercial coverages necessary to write the entire
account, and (ii) any other insurance or reinsurance business of the Company
other than the Runoff Business pursuant to Policies; and
(l)    “Statutory Penalties” are those amounts awarded as a penalty, but are
fixed in amount by statute.

All accounting terms used herein and not otherwise defined shall, where the
context reasonably allows, have the same meanings as in the Company's Annual
Statements filed with the New York Department of Financial Services.

2.    This Agreement shall be effective as of 12:01 a.m. on the Closing Date
(the “Effective Date”), and shall apply to all insurance risks of every nature
whatsoever under the Policies.

3.    The Company hereby cedes and transfers to the Reinsurer, and the Reinsurer
hereby reinsures and assumes from the Company, all Liabilities incurred under or
in connection with the Policies.

4.    [Intentionally Omitted].
    
5.    As between the Reinsurer and the Company, the Reinsurer shall have the
sole benefit of, and any right to collect all reinsurance recoveries under, any
third party reinsurance agreements that provide reinsurance specifically and
solely for the Policies; provided, however, that the Reinsurer’s liability
hereunder shall not be affected by reason of the inability to collect from any
third party reinsurer(s), whether specific or general, any amounts that may have
become due from such reinsurer(s), whether such inability arises from the
insolvency of such other reinsurer(s) or otherwise. In the event of any
inconsistency between the provisions of this Agreement and the provisions of the
SPA with respect to reinsurance with third parties or Shared Reinsurance (as
defined in the SPA), the terms of the SPA shall govern.

3

--------------------------------------------------------------------------------

6.    In consideration of the agreements of the Reinsurer herein contained, the
Company hereby agrees to assign and transfer to the Reinsurer an amount in cash
or other assets equal to the aggregate of the Company's Liabilities assumed by
the Reinsurer as of the Effective Date.

7.    Administration and Related Matters.

(a)    As of the Effective Date, the Company hereby authorizes and empowers the
Reinsurer to collect and receive all premiums; to take charge of, adjust and pay
all Liabilities with respect to the Policies; to obtain reinsurance (in the
Reinsurer’s own name and for its own account) with respect to the Policies; and
in all respects to act as though the Policies were issued by the Reinsurer. The
Company also authorizes and empowers the Reinsurer to perform, and the Reinsurer
hereby agrees to perform on behalf of the Company, various services necessary in
connection with the administration of the Policies, including, without
limitation, policy administration, loss settlement, accounting, maintenance of
books and records, and data processing (in each case solely with respect to the
Policies and not generally for the Company). Coincident with the exercise by the
Reinsurer of the authority granted hereunder either in whole or in part, the
Reinsurer agrees to pay, in the first instance, all Liabilities for the
Policies. The provisions of this Section 7 shall be subject to the ASA, and in
the event of any conflict between the terms of this Agreement and the ASA, the
terms of the ASA shall govern. For the avoidance of doubt, Section 20.10 of the
ASA regarding subcontracting shall apply to administrative services to be
provided pursuant to the ASA.

(b)    Except as directed by the Reinsurer or as performed by the Reinsurer
acting on behalf of the Company in the Reinsurer’s capacity as the Administrator
under the ASA, the Company, on its own initiative, shall not change the terms or
conditions of any Policy. If the Liabilities under any of the Policies are
changed (A) because of changes made on or after the Effective Date in the terms
and conditions of the Policies effected by the Reinsurer acting pursuant to the
ASA or (B) by reason of the requirements of any governmental authority or
otherwise required by applicable law, the Reinsurer will share proportionately,
on a 100% quota share basis, in such changes, and the Company and the Reinsurer
will make all appropriate adjustments to amounts due each other under this
Agreement. With respect to any change required by reason of the requirement of
any governmental authority or otherwise required by applicable law, the Company
shall, to the extent practicable, prior to the effectiveness of any such change,
promptly notify the Reinsurer of such proposed change and afford the Reinsurer
(at the Reinsurer’s sole cost and expense) the opportunity, to the extent
practicable, to object to such change under applicable administrative procedures
(both formal and informal).

8.    The Company hereby sells, transfers and assigns, and the Reinsurer hereby
purchases, all right, title and interest of the Company in and to assets
relating to the Runoff Business, including but not limited to its agents’
balances, uncollected premiums, premium notes receivable, amounts due for
inspection services and other functions relating to underwriting operations, and
any other underwriting assets and fixed assets that may relate to the Policies
existing on or arising after the Effective Date as mutually agreed by the
Company and the Reinsurer.

4

--------------------------------------------------------------------------------

9.    It is agreed that the obligations of either party under this Agreement and
the ASA to transfer cash or other assets to the other party may be offset by the
reciprocal obligations of the other party so that only net amounts shall be
required to be transferred.

10.    The conditions of the reinsurance under this Agreement shall in all cases
be identical with the conditions of the Policies and their resulting
obligations.

11.    Except as otherwise required by the context of this Agreement, the
amounts of all payments due under this Agreement shall be determined on the
basis of the Company's Annual Statements filed with its domiciliary insurance
regulator.

12.    All collections and payments of any kind under this Agreement shall be
settled between the parties no later than sixty (60) days following the close of
each calendar quarter, in accordance with the ASA.

13.    This Agreement shall remain in effect until the natural expiry of all
obligations of the Company under the Policies and until all obligations of the
Company and the Reinsurer hereunder have been discharged in full.

14.    The reinsurance provided by this Agreement shall be payable by the
Reinsurer directly to the Company or to its liquidator, receiver or statutory
successor on the basis of the liability of the Company under the Policies
reinsured without diminution because of the insolvency of the Company. In the
event of the insolvency of the Company, the liquidator, receiver or statutory
successor of the Company shall give written notice of the pendency of each claim
against the Company on a Policy reinsured within a reasonable time after such
claim is filed in the insolvency proceeding; and 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 which it may deem available to the Company, its liquidator, receiver or
statutory successor. The expense thus incurred by the Reinsurer shall be
chargeable, subject to court approval, against the Company as part of the
expense of liquidation to the extent of such proportionate share of the benefit
as shall accrue to the Company solely as a result of the defense undertaken by
the Reinsurer. The reinsurance shall be payable as hereinbefore in this
paragraph provided except (a) where the Policy specifically provides another
payee of such reinsurance in the event of the insolvency of the Company and (b)
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 payees under such Policies and in substitution for the
obligations of the Company to such payees.

15.    Neither this Agreement nor any of the rights or obligations hereunder may
be assigned by any party hereto without the prior written consent of all other
parties hereto. Subject to the foregoing, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.

16.    Any provision of this Agreement may be amended, modified or waived if,
and only if, such amendment, modification or waiver is in writing and signed, in
the case of an amendment, by the parties hereto, or in the case of a waiver, by
the party hereto

5

--------------------------------------------------------------------------------

against whom the waiver is to be effective. No failure or delay by any party
hereto in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.

17.    This Agreement constitutes the entire agreement between the parties with
respect to the business being reinsured hereunder, and there are no
understandings between the parties other than as expressed in this Agreement.

18.    Credit for Reinsurance. The Reinsurer acknowledges that the Company’s
ability to obtain full credit on its statutory financial statements for the
reinsurance provided by this Agreement is an essential and material part of this
transaction, failing which this Agreement will not fulfill its intended purpose.
The Reinsurer shall promptly notify the Company of any event or change or
condition that is reasonably likely to result in the Reinsurer ceasing to be
authorized to engage in the business of insurance or reinsurance in the
Company’s state of domicile. In the event that Reinsurer ceases to be so
authorized, it shall immediately, but in any case within fifteen (15) days after
ceasing to be authorized, take such steps as are necessary to (a) restore such
license and authority, (b) become accredited as a reinsurer in the Company’s
state of domicile, or (c) establish a qualified trust fund or provide a letter
of credit, in each case, such that the Company shall be able to obtain full
credit on its statutory financial statements for the reinsurance provided by
this Agreement in the Company’s state of domicile.

19.    Arbitration. (a) The parties hereto agree to act in all things with the
highest good faith. However, in the event the parties hereto cannot mutually
resolve a dispute or claim which arises out of, or in connection with this
Agreement, the parties hereto agree that the dispute or claim shall be submitted
to binding arbitration, regardless of the insolvency, bankruptcy, rehabilitation
or liquidation of either party, unless the conservator, receiver, liquidator, or
statutory successor is specifically exempted from an arbitration proceeding by
applicable state law. Any arbitration shall be based upon the Procedures for the
Resolution of U.S. Insurance and Reinsurance Disputes dated September 2009 (the
“Procedures”) -- Regular Panel Version, and as supplemented or limited by this
Section 19. In the event of any conflict between the Procedures and this
Section, this Section, and not the Procedures, will control.

(b)    Notice. Either party may initiate arbitration by providing written
notification to the other party. Such written notice shall contain a brief
statement of the issue(s), the failure on behalf of the parties to reach
amicable agreement and the date of demand for arbitration. The party to which
the notice is sent will respond to the notification in writing, within ten (10)
days of its receipt. Any notice provided by either party under this provision
shall be given as provided in Section 20.

(c)    Panel. The arbitration panel (the “Panel”) shall consist of three
disinterested arbitrators, one to be appointed by the Company, one to be
appointed by the Reinsurer and the third to be appointed by the two
party-appointed arbitrators. The third arbitrator shall serve as the umpire, who
shall be neutral. The arbitrators and umpire shall be persons who are current or
former officers or executives of a property and casualty insurer or reinsurer,
other than the parties or their Affiliates or subsidiaries, with more than

6

--------------------------------------------------------------------------------

ten (10) years property and casualty insurance experience. The arbitrators will
regard this Agreement from the standpoint of practical business and equitable
principles rather than that of strict law.

(d)    Procedure.
 
(i)    Within thirty (30) days of the commencement of the arbitration
proceeding, each party shall provide the other party with the identification of
its party-appointed arbitrator, and his or her address (including telephone, fax
and e-mail information), a copy of the arbitrator’s curriculum vitae and a
completed Procedures Candidate Questionnaire, as provided for in the Procedures.
If either party fails to appoint an arbitrator within that thirty (30) day
period, the non-defaulting party will appoint an arbitrator to act as the
party-appointed arbitrator for the defaulting party. The two party-appointed
arbitrators shall seek to reach agreement on an umpire as soon as practical but
no later than thirty (30) days after the appointment of the second arbitrator.
The party-appointed arbitrators may consult, in confidence, with the party who
appointed them concerning the appointment of the umpire.

(ii)    Where the two party-appointed arbitrators have failed to reach agreement
on an umpire within thirty (30) days, as specified in subsection (i) of this
subsection (d), an umpire shall be selected in accordance with Section 6.7 of
the Procedures from potential umpires selected by each party from the Certified
Umpire List maintained by ARIAS (US). The expense of the appointment of the
umpire shall be borne equally by each party to this Agreement.

(iii)    The Panel may, in its sole discretion, make orders and directions as it
considers to be necessary for the final determination of the matters in dispute.
Such orders and directions may be necessary with regard to pleadings, discovery,
inspection of documents, examination of witnesses and any other matters relating
to the conduct of the arbitration. The Panel will have the widest discretion
permissible under the law and practice of the place of arbitration when making
such orders or directions.

(iv)    The Panel will base their decision on the terms and conditions of this
Agreement plus, as necessary, on the customs and practices of the property and
casualty insurance and reinsurance industry rather than solely on a strict
interpretation of the applicable law; there will be no appeal from their
decision, and should either party fail to comply with the decision of the
arbitrators, the other party shall have the right to seek and receive the
assistance of any court having jurisdiction of the subject matter to enforce the
decision of the arbitrators by having the arbitrators’ decision reduced to
judgment.
  
(e)    Place of Arbitration. The arbitration shall take place in New York, New
York and shall commence no later than ninety (90) days after the appointment of
the umpire.

7

--------------------------------------------------------------------------------

(f)    Venue. The federal and state courts of the State of New York sitting in
New York County shall have exclusive jurisdiction over any and all court
proceedings that either party may initiate to compel arbitration or to enforce
or confirm an arbitration award, each party hereby submitting to the personal
jurisdiction thereof, and the parties agree not to raise the objection that such
courts are not a convenient forum.

(g)    Arbitration Panel Decision. The decision of the Panel shall be in writing
and delivered to the parties promptly following the close of the arbitration
proceedings, and shall be final and binding on the parties.

(h)    Arbitration Costs. Each party shall bear the expense of its own
arbitration, including its arbitrator and outside attorney fees, and jointly and
equally bear with the other party the expenses of the umpire. Any remaining
costs of the arbitration shall be determined by the Panel, which may take into
account the law and practice of the place of arbitration.

20.    Notices. All notices, requests, claims, demands or other communications
hereunder shall be deemed to have been duly given and made if in writing and (a)
at the time personally delivered if served by personal delivery upon the party
for whom it is intended, (b) at the time received if delivered by registered or
certified mail (postage prepaid, return receipt requested) or by a national
courier service (delivery of which is confirmed), or (c) upon confirmation if
sent by facsimile; in each case to the person at the address set forth below, or
such other address as may be designated in writing hereafter, in the same
manner, by such person:

to the Reinsurer:

[ ]
[ ]
[ ]
Telephone: [ ]
Facsimile: [ ]
Attention: [ ]

with a copy (which shall not constitute notice to Reinsurer for the purposes of
this Section 20) to:

Edwards Wildman Palmer LLP
750 Lexington Avenue
New York, NY 10022
Telephone:     (212) 912-2789
Facsimile:     (212) 308-4844
Attention:     Nick Pearson
    
to the Company:

[●]
[●]

8

--------------------------------------------------------------------------------

[●]
Telephone:    [●]
Facsimile:     [●]
Attention:     [●]

with a copy (which shall not constitute notice to the Company for the purposes
of this Section 20) to:

Mayer Brown LLP
71 South Wacker Drive
Chicago, Illinois 60606
Telephone: (312) 782-0600
Facsimile: (312) 701-7711
Attention:     Edward S. Best

21.    Governing Law. This Agreement and its enforcement will be governed by,
and interpreted in accordance with, the laws of the State of New York applicable
to agreements made and to be performed entirely within such state without regard
to the conflicts of law provisions thereof.

22.    Reports; Access to Records. All reporting for the reinsurance provided
under this Agreement and access to records relating thereto shall be provided in
accordance with the ASA.

23.    Severability. The provisions of this Agreement shall be deemed severable
and the invalidity or unenforceability of any provision shall not affect the
validity or enforceability of the other provisions hereof. If any provision of
this Agreement, or the application thereof to any person or entity or any
circumstance, is found by a court or other governmental authority of competent
jurisdiction to be invalid or unenforceable, the remainder of this Agreement and
the application of such provision to other persons, entities or circumstances
shall not be affected by such invalidity or unenforceability, nor shall such
invalidity or unenforceability affect the validity or enforceability of such
provision, or the application thereof, in any other jurisdiction. If any
provision of this Agreement is so broad as to be unenforceable, the provision
shall be interpreted to be only so broad as would be enforceable.

24.    Survival. Notwithstanding the provisions of Section 13, Sections 9, 12,
13 through 17 and 19 through 24 shall survive the termination or expiration of
this Agreement.

25.    Errors and Omissions. Inadvertent delays, errors or omissions made by
either the Company or the Reinsurer in connection with this Agreement or any
transaction hereunder shall not relieve the other party from any liability which
would have attached to such parties had such delay, error or omission not
occurred, provided that such error or omission is rectified as soon as possible
after discovery, and provided further that the party making such error or
omission or is otherwise responsible for such delay shall be responsible for any
additional liability which attaches as a result.

9

--------------------------------------------------------------------------------

26.    Counterparts. This Agreement may be executed in any number of
counterparts, which may be facsimile or email counterparts, and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed to be an original and all of which counterparts of
this Agreement taken together shall constitute but one and the same instrument.

[signature page follows]
    

10

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their respective duly authorized officers as of the day and year first above
written.

 
ONEBEACON INSURANCE COMPANY
 
 
 
 
 
 
Attest
 
By
 
 
 
 
 
 
 
 
 
 
 
 
Secretary
 
 
 
 
 
 
 
 
 
[ATLANTIC SPECIALTY INSURANCE COMPANY]3
 
 
 
 
 
 
Attest
 
By
 
 
 
 
 
 
 
 
 
 
 
 
Secretary
 
 
 

_______________________________________________________________________________

3     If the ASIC/OSBIC Merger is effected prior to the Closing Date, the
bracketed language will be replaced by “ONEBEACON SPECIALTY INSURANCE COMPANY”.

--------------------------------------------------------------------------------

SCHEDULE I

Runoff Policies issued following 12/31/11