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                                                                   Exhibit 10.12

                             LOSS PORTFOLIO TRANSFER
                              REINSURANCE CONTRACT
                               EFFECTIVE: 01/01/04

                                    Issued to

                             Century Surety Company
                                 Columbus, Ohio
                   (hereinafter referred to as the "Company")

                                       By

                      Evergreen National Indemnity Company
                                 Columbus, Ohio
                  (hereinafter referred to as the "Reinsurer")


ARTICLE I - BUSINESS REINSURED

By this Contract the Reinsurer agrees to reinsure the Ultimate Net Loss which
has accrued to the Company on losses occurring on or before the effective date
of this Contract under its policies, contracts and binders of insurance or
reinsurance (hereinafter called "policies") issued or renewed prior to the
effective date hereof and classified by the Company as Contract Surety Bonds and
Landfill Bonds, subject to the terms, conditions and limitations hereinafter set
forth.

ARTICLE II - TERM

This Contract shall become effective on January 1, 2004, and remain in force
until all outstanding loss and assignable loss adjustment expense covered under
this Contract has been settled or commuted in accordance with the provisions of
this Contract.

ARTICLE III - DEFINITIONS

A.    "Ultimate net loss" as used herein is defined as the sum or sums
      (including assignable loss adjustment expense, as hereinafter defined),
      and unrecoverable reinsurance for outstanding losses, including incurred
      but not reported losses paid by the Company in settlement of claims and in
      satisfaction of judgments rendered on account of such claims, after
      deduction of all salvage, all recoveries and all claims on inuring
      insurance or reinsurance; provided, however, that in the event of the
      insolvency of the Company, payment by the Reinsurer shall be made in
      accordance with the provisions of Article XIV. Nothing herein shall be
      construed to mean that losses under this Contract are not recoverable
      until the Company's ultimate net loss has been ascertained.

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B.    "Assignable loss adjustment expense" as used herein shall mean expenses
      assignable to the investigation, appraisal, adjustment, settlement,
      litigation, defense and /or appeal of specific claims, regardless of how
      such expenses are classified for statutory reporting purposes. Assignable
      loss adjustment expense shall include, but not be limited to, interest on
      judgments, expenses of outside adjusters, and declaratory judgment
      expenses or other legal expenses and costs incurred in connection with
      coverage questions and legal actions connected thereto, but shall not
      include office expenses or salaries of the Company's regular employees. If
      the Company elects or is forced to hire a claims handling company to
      manage its claims, then the cost of such shall be excluded from assignable
      loss adjustment expense.

ARTICLE IV - LOSS NOTICES, SETTLEMENTS AND PAYMENTS

A.    Losses shall be reported as hereinafter provided, except that the Company
      shall promptly notify the Reinsurer of any unusual circumstances affecting
      the Reinsurer's liability hereunder.

B.    All loss settlements made by the Company, provided they are within the
      terms of this Contract shall be binding upon the Reinsurer. The Reinsurer
      agrees to pay all amounts for which it may be liable as provided in
      Article VII.

ARTICLE V - SALVAGE AND SUBROGATION

The Reinsurer shall be credited with salvage (i.e., reimbursement obtained or
recovery made by the Company, less the actual cost, excluding salaries of
officials and employees of the Company and sums paid to attorneys as retainer,
of obtaining such reimbursement or making such recovery) on account of claims
and settlements involving reinsurance hereunder. Salvage thereon shall always be
used to reimburse the excess carriers in the reverse order of their priority
according to their participation before being used in any way to reimburse the
Company for its primary loss. The Company hereby agrees to enforce its rights to
salvage or subrogation relating to any loss, a part of which loss was sustained
by the Reinsurer, and to prosecute all claims arising out of such right.

ARTICLE VI - REINSURANCE CONSIDERATION

As consideration for the reinsurance provided hereunder the Company shall
deliver to the Reinsurer in cash or in securities acceptable to the Reinsurer an
amount equal to the sum of the following:

      $457,394 representing case reserves as shown in Exhibit A known as of the
      effective date, net of treaty reinsurance;

      $999,546 representing incurred but not reported reserves ("IBNR") reserve
      agreed to by the parties.




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ARTICLE VII - REPORTS AND REMITTANCES

A.    Within 45 days after the end of each calendar quarter during the term of
      this Contract, the Company shall report to the Reinsurer the following:

      1.    Summary of paid losses and assignable loss adjustment expense paid
            during the quarter;

      2.    Summary of case outstanding losses and assignable loss adjustment
            expense as of the end of the quarter, including a report of the
            carried incurred by not reported amounts;

      3.    Any other information needed by the Reinsurer to evaluate this
            Contract which is reasonably available to the Company.

The loss information shall be segregated by line of business and accident
(report) year.

B.    The Reinsurer shall pay losses within 30 days after receipt of the
      Company's quarterly report or within 75 days after the end of each
      calendar quarter, whichever is later.

ARTICLE VIII - NON-PAYMENT OF PREMIUM

The Reinsurer may terminate this Contract with 30 days prior written notice, and
shall have no liability hereunder, in the event the Company fails to pay any
reinsurance consideration for any reason, including insolvency, within ten
business days of the date such consideration is due. The Company may avoid
termination by paying any and all amounts that are delinquent on or before the
effective date of termination.

ARTICLE IX - OFFSET

The Company and the Reinsurer shall have the right to offset any balance or
amounts due from one party to the other under the terms of this Contract. The
party asserting the right of offset may exercise such right any time whether the
balances due are on account of premiums or losses or otherwise. However, in the
event of the insolvency of any party hereto, offset shall only be allowed in
accordance with applicable law.

ARTICLE X - ACCESS TO RECORDS (BRMA 1D)

The Reinsurer or its designated representatives shall have access at any
reasonable to all records of the Company which pertain in any way to this
reinsurance.

ARTICLE XI - NET RETAINED LINES (BRMA 32B)

A.    This Contract applies only to that portion of any policy which the Company
      retains net for its own account, and in calculating the amount of any loss
      hereunder and also


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      in computing the amount or amounts in excess of which this Contract
      attaches, only loss or losses in respect of that portion of that portion
      of any policy which the Company retains net for its own account shall be
      included.

B.    The amount of the Reinsurer's liability hereunder in respect of any loss
      or losses shall not be increased by reason of the inability of the Company
      to collect from any other reinsurer(s), whether such inability arises from
      the insolvency of such other reinsurers(s) or otherwise.

ARTICLE XII - ERRORS AND OMISSIONS (BRMA 14F)

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

ARTICLE XIII - TAXES (BRMA 50B)

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

ARTICLE XIV - INSOLVENCY

A.    In the event of the insolvency of the reinsured companies, this
      reinsurance shall be payable directly to the company or to its liquidator,
      receiver, conservator or statutory successor on the basis of the liability
      of the company with diminution because of the insolvency of the company or
      because the liquidator, receiver, conservator or statutory successor of
      the company has failed to pay all or a portion of any claim. It is agreed,
      however, that the liquidator, receiver, conservator or statutory successor
      of the company shall give written notice to the Reinsurer of the pendency
      of a claim against the company indicating the policy or bond reinsured
      which claim would involve a possible liability on the part of the
      Reinsurer within a reasonable time after such claim is filed in the
      conservation or liquidation proceeding or in the receivership, and that
      during the pendency of such claim, the Reinsurer may investigate such
      claim and interpose, at its own expense, in the proceeding where such
      claim is to be adjudicated, any defense or defenses that it may deem
      available to the company or its liquidator, receiver, conservator or
      statutory successor. The expense thus incurred by the Reinsurer shall be
      chargeable, subject to the approval of the Court, against the company as
      part of the expense of conservation or liquidation to the extent of a pro
      rata share of the benefit which may accrue to the company solely as a
      result of the defense undertaken by the Reinsurer.



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

ARTICLE XV - ARBITRATION

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

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

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

D.    Any arbitration proceedings shall take place at a location mutually agreed
      upon by the parties to this Contract, but notwithstanding the location of
      the arbitration, all proceedings pursuant hereto shall be governed by the
      law of the State of Ohio.



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ARTICLE XVI - SERVICE OF SUIT (BRMA 49D)

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

A.    It is agreed that in the event the Reinsurer fails to pay any amount
      claimed to be due hereunder, the Reinsurer, at the request of the Company,
      will submit to the jurisdiction of a court of competent jurisdiction
      within the United States. Nothing in this Article constitutes or should be
      understood to constitute a waiver of the Reinsurer's rights to commence an
      action in any court of competent jurisdiction in the United States, to
      remove an action to a United States District Court, or to seek a transfer
      of a case to another court as permitted by the laws of the United States
      or of any state in the United States.

B.    Further, pursuant to any statute of any state, territory or district of
      the United States which makes provision therefore, the Reinsurer hereby
      designates the Superintendent, Commissioner or Director of Insurance or
      other officer specified for the purpose in the statute, or his successor
      or successors in office, as its true and lawful attorney upon who may be
      served any lawful process in any action, suit or proceeding instituted by
      or on behalf of the Company or any beneficiary hereunder arising out of
      this Contract.

ARTICLE XVII - GOVERNING LAW

The Contract shall be governed by and construed in accordance with the laws of
the State of Ohio.

ARTICLE XVIII - AGENCY AGREEMENT

If more than one reinsured company is named as a party to this Contact, Century
Surety Company shall be deemed the agent of the other reinsured companies for
the purposes of sending or receiving notices required by the terms and
conditions of this Contract, and for purposes of remitting or receiving any
monies due any party.


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IN WITNESS WHEREOF, the parties hereto by their respective duly authorized
representatives have executed this Contract as of the dates undermentioned at:

Columbus, Ohio, this ________ day of ________________________ in the year _____.

                  _____________________________________________________
                  Century Surety Company

Columbus, Ohio, this ________ day of ________________________ in the year _____.

                  _____________________________________________________
                  Evergreen National Indemnity Company



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