Exhibit 10.11


 


AFFILIATION AGREEMENT


 


WHEREAS Battle Creek Mutual Insurance Company
(“BCMI”) and Nodak Mutual Insurance Company (“NMI”) believe an affiliation between the two companies, pursuant
to the terms of this Agreement, are in the best interests of the policyholders of both companies;


 


IT IS THEREFORE AGREED as follows:


 


SECTION
1


 


DEFINITIONS


 


Contract Date - December 30,
2010.


 


Effective Date - the later of
April 1, 2011, or the date of approval of the Form A by the Nebraska Department of Insurance.


 


Transaction Documents – Affiliation
Agreement, 100% Quota Share Reinsurance Agreements, Amended Shared Operations Agreement, Surplus Note and Amended and Substituted
Articles of Incorporation and By-Laws of BCMI.


 


SECTION
2


 


TRANSACTION DOCUMENTS


 


2.1.  Reinsurance Agreement.  That
NMI and BCMI will enter into a 100% Quota Share Reinsurance Agreement, a copy of which is attached hereto as Exhibit “A”
and incorporated herein, whereby BCMI cedes 100% of its net premium income and associated losses and expenses to NMI and NMI agrees
to accept such cession, effective April 1, 2011.


 


2.2.  Employee Leasing Agreement.  That
NMI and BCMI will enter into an Employee Leasing Agreement, a copy of which is attached hereto and incorporated herein as Exhibit “B,”
effective on January 1, 2011.


 


2.3.  Surplus Note.  That
BCMI has heretofore issued a Surplus Note in the amount of $3,000,000 and dated December _____, 2010, which note NMI has purchased.  A
copy is attached hereto as Exhibit “C” and incorporated herein.


 




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2.4.  Articles of Incorporation.  That
BCMI will adopt Amended and Substituted Articles of Incorporation and By-Laws, copies of which are attached hereto respectively
designated as Exhibits “D” and “E”, which will, among other things, contain provisions that (i) entitle
NMI to nominate two-thirds (2⁄3) of the Board of Directors on and after the Effective Date, so long as either the Surplus Note
or the Quota Share Agreement remain in effect; (ii) change BCMI to a non-assessable mutual; and (iii) such other provisions
as to which the parties mutually agree.


 


2.5.  Lease Agreements.  The
Zimmerman Insurance Agency, Inc. and BCMI will enter into two leases, each effective January 1, 2011.  One lease
will be that a portion of the premises at 603 South Preece Street, Battle Creek, Nebraska, will be used for an insurance agency
and the second lease will cover certain office equipment, described in the lease and used in the operation of the business.


 


SECTION
3


 


OTHER AGREEMENTS


 


3.1.  Approval and Resignations.  BCMI
agrees that to implement the approval of the Transaction Documents by the following actions:


 


a.  At the 2011 annual meeting
of the members of BCMI, it will cause all of its proxies to be voted in favor of the Transaction Documents and in favor of the
slate of nominees for election to the Board; and


 


b.  It will cause the members
of the Board of Directors and the Officers of BCMI to tender their resignations effective upon the effective date of this Agreement.


 


3.2.  By-Laws.  Prior
to, on or after the Effective Date, the Board of Directors of BCMI will adopt new By-Laws which, to the extent permitted by Nebraska
law, will follow the content of NMI’s By-Laws.  The new By-Laws shall be substantially in the form as those attached
hereto as Exhibit “E” and shall become operative on the Effective Date.


 


3.3.  BCMI Status.  From
and after the Effective Date, and subject to the terms of this Agreement, BCMI will continue to operate as a separate corporate
entity domiciled in the state of Nebraska.  NMI will provide assistance to BCMI in conducting its insurance business
with the goal of increasing its profitability and reducing its expenses.  At the discretion of the Board of Directors
of BCMI, the principal office of BCMI shall remain in Battle Creek, Nebraska, and BCMI will continue to market itself under its
current trade names, if any, subject to any regulatory approvals.


 




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SECTION
4


 


REPRESENTATIONS & WARRANTIES OF BCMI


 


4.1.  Representations and Warranties
of BCMI.  BCMI represents and warrants to NMI as of the Contract Date as follows:


 


a.  Corporate Existence and
Power.  (i) BCMI has been duly organized, is validly existing and is in good standing under the laws of the
State of Nebraska.  BCMI has all corporate powers required to carry on its business as now conducted, has all material
government licenses, authorizations, permits, consents and approvals required to carry on its business as now conducted, and is
not in violation of any of the provisions of its Articles of Incorporation, By-Laws or other organizational documents.  BCMI
has previously delivered to NMI true and complete copies of each of its Articles of Incorporation and By-Laws in effect on the
Contract Date.


 


b.  Corporate Authorization.  The
execution, delivery and performance by BCMI of this Agreement and each of the other Transaction Documents is within BCMI’s
power and has been, or will be prior to the Effective Date, duly authorized by all necessary corporate action.  Each
of the Transaction Documents constitutes a valid and legally binding agreement, enforceable against BCMI in accordance with its
respective terms, subject to (i) bankruptcy, insolvency, reorganization, moratorium, and other similar laws now or hereafter
in effect relating to or affecting creditors’ rights generally and (ii) general principles of equity.


 


c.  Governmental Authorization.  The
execution, delivery, and performance by BCMI of this Agreement and each of the other Transaction Documents requires no action by
or in respect of, or filing with, any governmental body, agency or official, except:  (i) approvals, filings and/or
notices to the Insurance Department of the State of Nebraska; (ii) filings and notices not required to be made or given until
after the closing date (the “Closing”) of the transactions contemplated herein; (iii) filings, at any time, of
tax returns, tax reports, and tax information statements; and (iv) any such action or filing as to which the failure to make
or obtain would not, individually or in the aggregate, materially impair the ability of BCMI to conduct its business or consummate
the transactions contemplated herein (the “Transactions”).


 




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d.  Financial Statements.


 


(1)  BCMI has previously made
available to NMI true and complete copies of its (a) Annual Statements for the year ended 2009, and (b) Quarterly Statement
as of and for the calendar quarter ended September 30, 2010.


 


(2)  To the best knowledge of
BCMI, since December 2004, BCMI has filed all financial statements required to be filed with or submitted to the appropriate regulatory
authorities.  Each such statement complied with all applicable laws when so filed.  Each such statement was
prepared in accordance with the statutory accounting principles in effect when so filed and presents fairly BCMI’s financial
position as of the date thereof and the related summaries of operations and changes in capital and surplus and cash flows of such
entity for the respective periods covered thereby.


 


e.  Reserves.  BCMI’s
aggregate reserves, after taking any applicable reinsurance agreements into account and deeming them to be in effect as of the
relevant dates of periods, as established or reflected in each of the December 31, 2009, and September 30, 2010, Quarterly
Statement (i) were computed in accordance with presently accepted actuarial standards consistently applied and are fairly
stated in accordance with sound actuarial principles; (ii) meet all requirements of applicable law and meet or exceed the
minimum aggregate amounts required by applicable Nebraska law; and (iii) make reasonable provision for all unpaid loss and
loss expense obligations under the terms of the insurance contracts issued by BCMI.


 




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f.  Absence of Certain Changes.  Other
than those actions contemplated by this Agreement and/or the Transaction Documents, BCMI business from the date of the September 30,
2010, Quarterly Statement to the Contract Date has been conducted in the ordinary course consistent with past practices (including,
without limitation, with regard to underwriting, pricing, actuarial, and investment policies generally) and there has not been
any (i) material transaction, commitment, contract, or agreement entered into by BCMI, other than in the ordinary course of
business consistent with past practices, or any acquisition of assets or incurrence of liabilities that is not primarily related
to the property and casualty insurance of BCMI; (ii) material change in any method of accounting or accounting practice or
policy (including, without limitation, any reserving method, practice or policy), except for any such change resulting from a concurrent
change in officially promulgated Standard Actuarial Principles of Statutory Accounting Principles in the United States, as the
case may be; (iii) employment, deferred compensation, severance, retirement, or other similar agreement entered into with
any director, officer or employee (or any amendment to any such existing agreement) or any grant of any severance or termination
pay to any director, officer or employee other than in the ordinary course of business or any change in compensation or other benefits
payable to any director, officer or employee other than in the ordinary course of business or loans or advances to any director,
officer or employee, except for travel, business and relocation expenses in the ordinary course of business consistent with past
practice; (iv) material change in marketing or underwriting practices or standards; and (v) material change in the compensation
structure of, or benefits available to, agents generally.


 


g.  No Undisclosed Material
Liabilities.  Other than liabilities or obligations provided for or reserved against in BCMI’s September 30,
2010, Quarterly Statement, liabilities incurred since such date in the ordinary course of business consistent with past practice
or liabilities to which BCMI’s reinsurance agreements would apply, BCMI has no liabilities or obligations that individually
or in the aggregate exceed $50,000.


 


h.  Material Contracts.  BCMI
has furnished or made available to NMI complete and correct copies of all material contracts, agreements and instruments to which
BCMI is a party, each as amended or modified to the date of this Agreement (collectively, the “Material Agreements”)
and each of the Material Agreements is in full force and effect and enforceable according to its terms, subject to (i) bankruptcy,
insolvency, reorganization, moratorium and other similar laws now or hereafter in effect relating to or affecting creditors’
rights generally, and (ii) general principles of equity, and there exists no material event of default or occurrence, condition
or act on the part of BCMI, or to BCMI’s knowledge, on the part of the other parties to the Material Agreements, that would
constitute (with notice or lapse of time or both) a material breach of or material default under any of the Material Agreements.


 




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i.  Environmental Matters.


 


(1)  (a)  To the best
knowledge of BCMI, BCMI has complied with all applicable environmental laws.


 


(b)  To the best knowledge of
BCMI, the properties currently owned or operated by BCMI are not contaminated with any hazardous substances requiring remediation.


 


(c)  To the best knowledge of
BCMI, prior to or during the period of ownership or operation by BCMI, properties formerly owned or operated by BCMI were not contaminated
with hazardous substances requiring remediation by BCMI.


 


(d)  To the best knowledge of
BCMI, BCMI is not subject to liability under any environmental laws.


 


(e)  BCMI has not received any
written notice, demand, letter, claim or request for information from any governmental entity indicating that BCMI may be in violation
of or liable under any environment law.


 


(2)  BCMI has made available to
NMI, for review and copying, all environmental reports, if any, in its possession, prepared for it by third-party environmental
consultants concerning any currently or formerly owned property.


 


(3)  The following definitions
apply for purposes of this paragraph i.:


 


(a)  “Environmental laws”
means any and all foreign, federal, state or local statutes, laws, regulations, ordinances, rules or codes now in effect relating
to the environment, to the effect of the environment on human health or safety or to the use, generation, manufacturing, treatment,
disposal, storage, discharge or release of hazardous substances into the environment, including without limitation, ambient air,
surface water, groundwater or land, or the remediation thereof.


 




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(b)  “Governmental entity”
means any foreign, domestic, federal, territorial, state or local U. S. or non U. S. governmental authority, quasi-governmental
authority, instrumentality, court or government, self-regulatory organization, commission, tribunal or organization or any political
or other subdivision, department, branch or representative of any of the foregoing.


 


(c)  “Hazardous substances”
means any toxic, radioactive, caustic or otherwise hazardous substance, including petroleum and its derivatives and by-products,
or any substance having any constituent elements displaying any of the foregoing characteristics, regulated under environmental
laws.


 


j.  Properties.  BCMI
has good title to, or in the case of leased property has valid leasehold interests in, all of its property and assets (whether
real or personal, tangible or intangible), except for imperfections in title or invalidities in leasehold interests that do not,
individually or in the aggregate, materially detract from the value reflected on its September 30, 2010, Quarterly Statement,
and none of such property and assets is subject to any liens, other than those reflected on its September 30, 2010, Quarterly
Statement, liens for taxes not yet due or being contested in good faith (and for which adequate accruals or reserves have been
established), and liens that do not individually or in the aggregate materially detract from the value reflected on its September 30,
2010, Quarterly Statement or materially interfere with any present or intended use of any material property or assets.


 


k.  Insurance.  Prior
to the Closing Date, RCM has maintained insurance relating to its assets, properties, business and operations (including, without
limitation, errors and omissions insurance with respect to its employees, officers, and directors) in a manner consistent with
past practices and that is reasonable for a company of its size that is engaged in the insurance business.


 


l.  Employees.  BCMI
has no employees and it receives the services of Zimmerman Insurance Agency employees pursuant to an Shared Operations Agreement.  BCMI
agrees to use its best efforts to maintain this relationship and further agrees not to make any changes in the Shared Operations
Agreement without prior notice and consultation with NMI.


 




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m.  Taxes.  To
the best of BCMI’s knowledge:  (i) BCMI has duly filed all tax returns required to be filed by it on or prior
to the date of this Agreement and all such tax returns are true, correct and complete in all material respects and BCMI has duly
paid in full or made provision for the payment of all taxes for all periods or portions thereof; (ii) no federal, state or
local audits or other administrative proceedings or court proceedings are presently pending or, to the best of BCMI’s knowledge,
threatened with regard to any taxes or tax returns of BCMI; and (iii) BCMI has withheld and paid all federal, state and local
taxes required to have been withheld and paid in connection with amounts paid or owing to any employee, independent contractor,
creditor or other third party.


 


n.  Agents and Brokers.  BCMI
has furnished to NMI a list which contains true, complete and accurate information, to the best of BCMI’s knowledge, as of
September 30, 2010, regarding the agents and brokers (including their names, addresses, telephone numbers and gross premiums
written by line of business for the most recent 12-month period) which have generated business that is currently in force with
BCMI.


 


o.  Insurance Contracts.  To
the best knowledge of BCMI:


 


(1)  All insurance policy benefits
payable under the insurance contracts issued by BCMI pursuant to claims which have been made against such insurance contracts have,
in all material respects, been paid in accordance with the terms of the insurance contracts under which they arose, are being processed
in the ordinary course of BCMI’s business or are in dispute, except for such benefits for which BCMI believes there is a
reasonable basis to contest payment.


 


(2)  No outstanding insurance
contract issued, reinsured or underwritten by BCMI entitles the holder thereof or any other person or entity to receive dividends,
distributions or other benefits based on the revenues or earnings of BCMI or any other entity, other than those dividends and distributions
which are declared by the Board of Directors of BCMI.


 


(3)  The underwriting standards
utilized and ratings applied by BCMI conform in all material respects to industry accepted practices and the standards and ratings
required pursuant to the terms of the respective reinsurance, coinsurance or other similar contracts.


 




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(4)  To the best of BCMI’s
knowledge, each agent, at the time such agent wrote, sold or produced the business for BCMI, was duly licensed as an insurance
agent (for the type of business written, sold or produced by such agent) in the particular jurisdiction in which such agent wrote,
sold or produced such business, except where the failure to have such license would not have a material adverse effect on BCMI.


 


(5)  To the best of BCMI’s
knowledge, BCMI’s insurance agents have not violated (or with or without notice or lapse of time or both, would have violated)
any term or provision of any law, regulation or any writ, judgment, decree, injunction or similar order applicable to the writing,
sale or production of the business, except where such violation would not have a material adverse effect on the business.


 


(6)  (i) All insurance contracts
have been issued, to the extent required under applicable law, on forms approved by the insurance regulatory authority of the state
or jurisdiction where issued or, to the extent required by applicable law, have been filed with and not objected to by such authority
within the period provided for objections; and (ii) any premium rates with respect to the business required to be filed with
or approved by insurance regulatory authorities have been filed or approved and premiums charged conform thereto in all material
respects except for such noncompliance, violation or failure which, individually or in the aggregate could not reasonably be expected
to have a material adverse effect on BCMI.


 


4.2.  Representations and Warranties
of NMI.  NMI represents and warrants to BCMI as of the Contract Date as follows:


 


a.  Corporate Existence and
Power.  NMI has been duly organized, is validly existing, and is in good standing under the laws of the state of
North Dakota.  NMI has all corporate powers required to carry on its business as now conducted, has all material government
licenses, authorizations, permits, consents, and approvals required to carry on its business as now conducted, and is not in violation
of any of the provisions of its Articles of Incorporation, By-Laws or other organizational documents.


 




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b.  Corporate Authorization.  The
execution, delivery, and, subject to the receipt of any required approvals, performance by NMI of this Agreement and each of the
other Transaction Documents is within NMI’s power and has been or will be prior to the Effective Date, duly authorized by
all necessary corporate action.  Each of the Transaction Documents constitute valid and legally binding agreements, enforceable
against NMI in accordance with their respective terms, subject to (i) bankruptcy, insolvency, reorganization, moratorium,
and other similar laws now or hereafter in effect relating to or affecting creditors’ rights generally and (ii) general
principles of equity.


 


c.  Governmental Authorization.  The
execution, delivery, and performance by NMI of this Agreement and each of the other Transaction Documents requires no action by
or in respect of, or filing with, any governmental body, agency, or official on the part of NMI other than approvals, filings,
and/or notices to the North Dakota Insurance Department.


 


d.  Financial Statements.


 


(1)  NMI has previously made available
to BCMI true and complete copies of its (A) Annual Statement for the year ended 2009, and (B) Quarterly Statement as
of and for the calendar quarter ended September 30, 2010.


 


(2)  To the best knowledge of
NMI, since December 2005, NMI has filed all financial statements required to be filed with or submitted to the appropriate regulatory
authorities.  Each such statement complied with all applicable laws when so filed.  Each such statement was
prepared in accordance with the statutory accounting principles in effect when so filed and presents fairly NMI’s financial
position as of the date thereof and the related summaries of operations and changes in capital and surplus and cash flows of such
entity for the respective periods covered thereby.


 


e.  Reserves.  The
aggregate reserves of NMI, after taking any applicable pooling or reinsurance agreements into account and deeming them to be in
effect as of the relevant dates or periods, as established or reflected in each of the December 31, 2009, Annual Statement
and the September 30, 2010, Quarterly Statement, (i) were computed in accordance with presently accepted actuarial standards
consistently applied and are fairly stated in accordance with sound actuarial principles; (ii) meet all requirements of applicable
law and meet or exceed the minimum aggregate amounts required by applicable North Dakota law; and (iii) make reasonable provision
for all unpaid loss and loss expense obligations under the terms of the insurance contracts issued by NMI.


 




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f.  Absence of Certain Changes.  The
business of NMI from the date of the last quarterly statement to the date of this Agreement has been conducted in the ordinary
course consistent with past practices (including, without limitation, with regard to underwriting, pricing, actuarial, and investment
policies generally) and there has not been any material change in any method of accounting or accounting practice or policy (including,
without limitation, any reserving method, practice or policy), except for any such change resulting from a concurrent change in
officially promulgated Standard Actuarial Principles or Statutory Accounting Principles in the United States, as the case may be.


 


g.  NMI will use its best efforts
to assist BCMI to secure a rating from A. M. Best that is the equivalent of NMI’s A. M. Best rating.


 


h.  Litigation.  There
is no action, suit, investigation or proceeding pending against, nor, to the knowledge of NMI, threatened against or affecting
the property of NMI before any court or arbitrator or any governmental body, agency or official (i) in which the actual damages
alleged or sought exceed $100,000 (except for claims under any insurance policy issued by NMI); (ii) that alleges a course
of conduct that may reasonably be expected to give rise to a class action lawsuit; or (iii) that alleges bad faith and there
is a reasonable possibility of ultimate liability in excess of $100,000 over any aggregate reserves that have been established
to cover such claims, nor is there any judgment, decree, injunction or order of any governmental body, agency or official outstanding
against NMI which reasonably could be expected to have a material adverse effect upon NMI.


 


i.  Compliance With Laws.  To
the best knowledge of NMI, there does not exist any current violation by NMI of any applicable law and since January 1, 2005,
NMI has not received any written notice from any governmental entity alleging the existence of any violation of any applicable
law that could reasonably be expected to be material or directing NMI to take any remedial action.


 




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j.  Taxes.  To
the best knowledge of NMI, (i) it has duly filed all tax returns required to be filed by it on or prior to the date of this
Agreement and all such tax returns are true, correct and complete in all material respects, and NMI has duly paid in full or made
provision for the payment of all taxes for all periods or portions thereof; (ii) no federal, state or local audits or other
administrative proceedings or court proceedings are presently pending or threatened with regard to any taxes or tax returns of
NMI; and (iii) NMI has withheld and paid all federal, state and local taxes required to have been withheld and paid in connection
with amounts paid or owing to any employee, independent contractor, creditor or other third party.


 


SECTION
5


 


COVENANTS


 


5.1.  Conduct of Business Prior
to the Closing Date.  NMI and BCMI each covenant and agree that, after the date of this Agreement and prior to the
Closing (except as expressly contemplated by this Agreement or by the other Transaction Documents), it will promptly advise the
other party in writing of any material adverse effect on their respective insurance businesses or of any litigation involving such
party that could reasonably be expected to materially and adversely affect the consummation of the Transactions.


 


5.2.  Access to Information.  From
the date of this Agreement until the Closing, subject to any applicable contractual restrictions and applicable legal privileges,
and to the extent applicable law would not thereby be violated, NMI and BCMI each covenant and agree to:


 


a.  give the other party and
its authorized representatives full access (including the copying of such materials as may be reasonably requested), upon reasonable
prior notice and during normal business hours, to their respective offices, properties, books and records;


 


b.  furnish the other party,
its counsel, financial advisors, auditors, and other authorized representatives such financial and operating data and other information
relating to their respective businesses as such persons may reasonably request; and


 


c.  instruct their respective
employees, counsel, and financial advisors to cooperate with the other party in its investigations in relation to the Transactions.


 




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5.3.  Notices of Certain Events.  NMI
and BCMI each covenant and agree to promptly notify the other party of any of the following:


 


a.  any notice or other communication
received by such party from any source alleging that the consent of another person or entity is or may be required in connection
with the Transactions;


 


b.  any notice or communication
received by such party from any governmental or regulatory agency or authority relating to the Transactions;


 


c.  any actions, suits, claims
investigations or proceedings commenced or, to such party’s knowledge, threatened against, relating to or involving or otherwise
affecting such party that, if the same had been pending on the date of this Agreement would have been required to have been disclosed
or that relate to the consummation of the Transactions; and


 


d.  any breach of a representation
or warranty of the notifying party that could reasonably be expected to materially and adversely affect the consummation of the
Transactions.


 


5.4.  Proposals for Alternative
Transactions.  BCMI covenants and agrees that from the Contract Date until the Closing, it will not and will not
permit or cause any of its officers or directors to, and will direct them not to, directly or indirectly, initiate, solicit, encourage,
or otherwise facilitate any inquiries or the making of any proposal or offer with respect to:


 


a.  a merger, reorganization,
consolidation, or similar transaction involving, of any purchase of 5% or more of the assets of, or demutualization or conversion
of, BCMI, other than in connection with one or more of the Transactions; or


 


b.  a transaction involving a
pooling of the business of BCMI with another entity or any similar business combination or restructuring, other than in connection
with one or more of the Transactions (any of the foregoing (a) or (b), an “Alternative Transaction Proposal”).


 




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Until this Agreement is otherwise terminated,
BCMI further covenants and agrees that it will not and will not permit or cause any of its respective officers and directors to,
and will direct them not to, directly or indirectly, engage in any negotiations concerning, or provide any confidential information
or data to, or have any discussions with, any entity or representative of any entity relating to an Alternative Transaction Proposal,
whether made before or after the date of this Agreement, or otherwise facilitate or attempt to make or implement an Alternative
Transaction Proposal.  BCMI will immediately cease and cause to be terminated any existing activities, discussions or
negotiations with any parties conducted prior to the date of this Agreement with respect to any of the foregoing.  BCMI
will notify NMI immediately if any Alternative Transaction Proposal is received by it or any discussions or negotiations are sought
in connection with an Alternative Transaction Proposal and will notify NMI of the identity of such other entity and its representatives
and the material terms and conditions of any such proposals or offers.


 


5.5.  BCMI’s Insurance.  For
so long as BCMI remains as a participant in the Reinsurance Agreement and the Surplus Note, BCMI covenants and agrees to maintain
directors and officers liability insurance coverage and errors and omissions insurance coverage with limits of liability at least
equal to the limits under such insurance coverage as of the Contract Date.


 


5.6.  Best Efforts.  Subject
to the terms and conditions of this Agreement and the other Transaction Documents, BCMI and NMI each covenant and agree to use
their respective best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things reasonably
necessary or desirable under applicable law to consummate the Transactions.  NMI and BCMI shall:


 


a.  promptly, and in any event
within 60 days of the date of this Agreement, prepare and file all applications, notices, consents, and other documents necessary
or advisable to obtain the regulatory approvals required to consummate the Transactions under the applicable law of Nebraska and
North Dakota, respectively,


 


b.  promptly file all supplements
or amendments to such applications, notices, consents or other documents, and


 




    	 	Page 14 of 21	 



     


    

 


c.  use their best efforts to
obtain any such required regulatory approvals.  NMI and BCMI will provide each other and their respective counsel the
opportunity to review in advance and comment on all such filings.  They will keep each other informed of the status of
all matters related to such required regulatory approvals.  Further, they each covenant and agree that if any required
regulatory approval to consummate one or more of the Transactions is denied or not obtained, they will use their respective best
efforts to work together to restructure the Transaction or transactions to achieve or acquire all required regulatory approvals,
it being agreed that in all such instances the benefits sought to be derived by both parties by the Transactions and the principal
terms of the Transactions, financial or otherwise, will not change as a result of such restructuring.


 


5.7.  Fees and Expenses.  NMI
and BCMI shall each pay the costs and expenses, including legal fees, incurred by it in negotiating and preparing this Agreement,
the other Transaction Documents, and in closing and carrying out the Transactions, whether or not the Closing shall occur.


 


5.8.  Obligation to Call Policyholder
Meeting.  BCMI agrees that, within 60 days after this Agreement and related Transactions have been approved
by the Board of Directors of BCMI, it will send notice to its policyholders of the Annual Meeting for the purpose of approving
the Transactions, including but not limited to voting on the amendments to BCMI’s Articles of Incorporation and the election
of directors.


 


5.9.  Public Announcements
and Confidentiality.  NMI and BCMI each covenant and agree to consult with each other before issuing any press release
or making any public statement with respect to this Agreement, any other Transaction Document or the Transactions and, except as
may be required by applicable law, will not make any such public statement prior to such consultation.  Except as may
be required by applicable law, NMI and BCMI shall keep this Agreement, the other Transaction Documents and all other documents
and information relating to the Transactions or furnished pursuant to or in connection with the Transaction Documents or the Transactions
confidential.


 




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SECTION
6


 


TERMINATION


 


6.1.  Grounds for Termination
Prior to Closing.  This Agreement may be terminated at any time prior to the Closing:




 


a.  by mutual written agreement
of the parties; or


 


b.  by either party if the Closing
shall not have been consummated on or before June 30, 2011, provided, however, that no party may exercise the right to terminate
this Agreement under this subsection 6.1(b) if the failure to consummate the Closing was a result of a breach by such party
of any of its obligations under this Agreement or any other Transaction Document.


 


c.  by NMI if either the BCMI
Board of Directors or the members of BCMI, as applicable, fail to approve this Agreement, the other Transaction Documents, the
Transactions, or fail to approve and adopt the Amended and Restated Articles of Incorporation and Amended and Restated Bylaws of
BCMI substantially in the form attached to this Agreement.


 


d.  if all regulatory approvals
are not timely obtained.


 


e.  by either party, if any of
the other Transaction Documents are terminated, other than as a result of a breach by such party.


 


6.2.  Grounds for Termination
After Closing.  This Agreement shall be terminated at any after the Closing:


 


a.  by mutual written agreement
of NMI or BCMI; or


 


b.  by either NMI or BCMI if
there has been a material breach by the other party of any representation, warranty, covenant or agreement contained in this Agreement
or any other Transaction Document and such breach is not cured within 15 days after written notice of such breach is given
by such terminating party to the other party.


 


SECTION
7


 


DISPUTE RESOLUTION


 


7.1.  General.  The
parties shall endeavor to resolve all disputes arising out of this Agreement in an amicable manner, in accordance with Section 7.2
prior to resorting to arbitration under Section 7.3.  All material disputes between the parties arising out of or
resulting from this Agreement shall be resolved as provided in this Section 7.


 




    	 	Page 16 of 21	 



     


    

 


7.2.  Negotiations Between
Executives.  The parties shall attempt in good faith to resolve any dispute arising out of the making or performance
of or otherwise relating to this Agreement merit promptly by negotiations between executives who have authority to settle the controversy.  Any
party may give the other party written notice of any dispute not resolved in the normal course of business.  Within 20 days
after delivery of said notice, executives of both parties shall meet at a mutually acceptable time and place, and thereafter as
often as they reasonably deem necessary, to exchange relevant information and to attempt to resolve the dispute.  If
the matter has not been resolved within 60 days after the disputing party’s notice, or if the parties fail to meet within
20 days, either party may initiate arbitration under Section 7.3 hereof.  If a negotiator intends to be accompanied
at a meeting by an attorney, the other negotiator shall be given at least 7 days notice of such intention and may also be accompanied
by an attorney.  All negotiations pursuant to this clause are confidential and shall be treated as compromise and settlement
negotiations for purposes of the Federal Rules of Evidence and any comparable state provision.


 


7.3.  Arbitration.


 


a.  Written Demand.  In
the event that any dispute arising out of this Agreement is not resolved under Section 7.2 hereof, such dispute shall be submitted
to binding arbitration under this Section 7.3.  Either party may institute arbitration under this Section 7.3
by making written demand on the other party.


 


b.  Choice of Arbitrators.  In
the event that a demand by either party is made in writing on the other, each party shall appoint an individual as arbitrator and
the two so appointed shall then appoint a third arbitrator.  If either party refuses or neglects to appoint an arbitrator
within 30 days of receipt of a written notice of demand for arbitration, the other party may appoint the second arbitrator.  If
the two arbitrators do not agree on a third arbitrator within 30 days of their appointment, each of the arbitrators shall
nominate three individuals.  Each arbitrator shall then decline two of the nominations presented by each of the other
arbitrators.  The third arbitrator shall then be chosen from the remaining two nominations by drawing lots.  The
arbitrators shall be active or former officers of property and casualty insurance or reinsurance companies.  The arbitrator
shall not have a personal or financial interest in the result of the arbitration.


 




    	 	Page 17 of 21	 



     


    

 


c.  Location of Arbitration.  The
arbitration hearings shall be held in Lincoln, Nebraska, or such other place as may be mutually agreed.  Each side shall
submit its case to the arbitrators within 30 days of the selection of the third arbitrator or within such longer period as
may be agreed by the arbitrators.  The arbitrators shall not be obliged to follow judicial formalities or the rules of
evidence except to the extent required by governing law, that is, the state law of the situs of the arbitration as herein agreed;
they shall make their decisions according to the practice of the property and casualty insurance business.  The decision
rendered by a majority of the arbitrators shall be final and binding on both sides.  Such decision shall be a condition
precedent to any right of legal action arising out of the arbitrated dispute which any side may have against the others.  Judgment
upon the award rendered may be entered in any court having jurisdiction thereof.


 


d.  Arbitration Expenses.  Each
party shall pay (i) the fees and expenses of its own arbitrator, (ii) one-half of the fee and expenses of the third arbitrator
and (iii) one-half of the other expenses that the parties jointly incur directly related to the arbitration proceeding.  Other
than as set forth above each party shall bear its own costs in connection with any such arbitration including, without limitation,
(x) all legal, accounting, and other professional fees and expenses, and (y) all other costs and expenses each party
incurs to prepare for such arbitration.


 


e.  Rules of the American
Arbitration Association.  Except as provided above, arbitration shall be based, insofar as applicable, upon the Commercial
Arbitration Rules of the American Arbitration Association.


 


SECTION
8


 


MISCELLANEOUS


 


8.1.  Actions Subsequent to
Closing.  From and after the Closing, each party will, from time to time, at the reasonable request of the other
party and without further consideration (but at the expense of the requesting party) do, execute, acknowledge, and deliver all
such further acts, deeds, assignments, transfers, conveyances, certificates, and assurances as may be reasonably required by such
other party to effect the Transactions.


 




    	 	Page 18 of 21	 



     


    

 


8.2.  Entire Agreement.  This
Agreement and the other Transaction Documents, including all schedules and exhibits thereto, constitute the entire agreement between
the parties and there are no other agreements or understandings other than as expressed in this Agreement and the other Transaction
Documents.


 


8.3.  Binding Effect.  This
Agreement will apply to and inure to the benefit of and be binding upon and enforceable against each party and their respective
successors and permitted assigns.


 


8.4.  Severability.  Any
term or provision of this Agreement which is invalid or unenforceable in any jurisdiction will, as to that jurisdiction, be ineffective
to the extent of any such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions
of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other
jurisdiction.  If any provision of this Agreement is so broad as to be unenforceable, that provision will be interpreted
to be only so broad as is enforceable.


 


8.5.  Waivers and Amendments.  The
Agreement and the Exhibits attached hereto may only be amended or modified, and the terms hereof may only be waived, by a writing,
signed by each party or, in the case of a waiver, by the party entitled to the benefit of the terms being waived.


 


8.6.  Assignment.  Neither
party will have the right to assign or otherwise transfer its rights or delegate its duties under this Agreement to any third party
without the prior written consent of the other party.


 


8.7.  Governing Law.  This
Agreement will be deemed to have been made under and governed by the laws of the state of Nebraska, without regard to Nebraska
choice of law rules.


 


8.8.  Notices.  All
notices and other communications under this Agreement will be in writing and will be delivered personally or sent by confirmed
facsimile transmission or nationally recognized overnight delivery service.  Any such notice or other communication will
be deemed given upon actual delivery, in each case to the following addresses:


 




    	 	Page 19 of 21	 



     


    

 


		a.	if to NMI:



 


Jim Alexander

CEO

Nodak Mutual Insurance Company

1101 First Avenue North

P.O. Box 2502

Fargo, ND  58108-2502

Fax No. (701) 298-4333


 


With concurrent copies to:


 


Kent M. Forney

Bradshaw, Fowler, Proctor & Fairgrave, P.C.

801 Grand Avenue, Suite 3700

Des Moines, IA  50309-8004

Fax No. (515) 246-5808


 


		b.	if to BCMI:



 


Bruce Zimmerman

President

Battle Creek Mutual Insurance Company

603 South P

Battle Creek, NE  68715

Fax No.


 


With concurrent copies to:


 


William R. Kutilek

Crosby Guenzel LLP

134 South 13th Street, Suite 400

Lincoln, NE  68508

Fax No. (402) 434-7303


 


8.9.  Construction; Interpretation.  All
pronouns and any variations thereof refer to the masculine, feminine, or neuter, singular, or plural, as the context may require.  The
headings in this Agreement are for convenience of reference only and will not affect its interpretation.


 




    	 	Page 20 of 21	 



     


    

 


8.10.  Counterparts.  This
Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will
constitute one and the same instrument.


 


IN WITNESS WHEREOF, this Agreement has been
duly executed and delivered by the duly authorized officers of NMI and BCMI as of December 30, 2010.


 


	 	NODAK MUTUAL INSURANCE COMPANY


 


	 	By:	/s/ Michael J. Alexander
	 	Name:  Michael J. Alexander
	 	Title:  Executive Vice President & CEO


 


	 	BATTLE CREEK MUTUAL INSURANCE

COMPANY


 


	 	By:	/s/ Bruce Zimmerman
	 	Name:  Bruce Zimmerman
	 	Title:  President


 




    	 	Page 21 of 21	 



     


    

 


Exhibit A


 


REINSURANCE AGREEMENT


 


This Reinsurance Agreement is effective
April 1, 2011, between Battle Creek Mutual Insurance Company (“BCMI”) and Nodak Mutual Insurance Company (“NMI”).


 


WHEREAS BCMI and NMI have entered into an
Affiliation Agreement that provides, among other things, for NMI to 100% reinsure BCMI on policies it issues (the Business as defined
below);


 


IT IS THEREFORE AGREED as follows:


 


ARTICLE
I -  REINSURANCE COVERED


 


1.  Business written by BCMI
is hereby ceded 100% Quota Share to NMI, which agrees to accept such cession.


 


2.  The Business shall consist
of all policies written by BCMI with inception dates of April 1, 2011, and thereafter, including 100% of prior year loss reserve
development, net of any applicable prior reinsurance.


 


ARTICLE
II -  LIABILITY OF NMI


 


1.  The liability of NMI shall
begin simultaneously with that of BCMI.  In no event shall the reinsurance be in force and binding unless the insurance
is in force with BCMI.


 


2.  The liability of NMI shall
follow the liability of BCMI in accordance with the conditions of the reinsured policies and shall be subject to the same risks,
conditions, and modes of settlement, it being the intention of this Agreement that NMI shall follow the fortunes of BCMI in all
respects on the insurance ceded herein.


 


3.  NMI shall defend at its cost
any actions, claims, proceedings, demands, costs, damages, judgments and expenses to which BCMI may become subject pertaining to
the Business ceded under this Agreement and will hold harmless BCMI from all such matters.


 


ARTICLE
III -  REINSURANCE PREMIUMS


 


BCMI agrees to pay and NMI agrees to accept
net premiums ceded on the Business covered under this agreement.  Net Premiums shall mean gross premium written less
premiums returned on cancellations.


 


ARTICLE
IV -  CEDING COMMISSION


 


The Reinsurer shall allow Reinsured a ceding
commission on all premium ceded hereunder.  Such commission allowance includes provision for Loss Adjustment Expenses
and for Other Underwriting Expenses as reported by Reinsured in the Underwriting and Investment Exhibit, Part 3, columns 1
and 2, page 11, of the Reinsured’s Annual Statement.


 




    	 	Page 1 of 5	 



     


    

 


1.  Provisional Commission.  The
provisional ceding commission hereunder shall be 33%, subject to adjustment as set forth in the Variable Commission provisions
below.


 


2.  Variable Commission.


 


a.  Additional Commission.  When
Reinsured’s Expense Ratio for any year subject to this Agreement is greater than 33%, Reinsurer shall allow Reinsured Additional
Commission.  The amount of Additional Commission is determined by subtracting 33% from the Reinsured’s Expense
Ratio.  Reinsurer shall pay Reinsured such Additional Commission within 45 days following the conclusion of any year
subject to this Agreement.


 


b.  Return Commission.  When
Reinsured’s Expense Ratio for any year subject to this Agreement is less than 33%, Reinsured shall pay Reinsurer Return Commission.  The
amount of Return Commission is determined by subtracting the Reinsured’s Expense Ratio from 33%.  Reinsured shall
pay Reinsurer such Return Commission within 45 days following the conclusion of any year subject to this Agreement.


 


3.  Expense Ratio.  As
used herein, Reinsured’s “Expense Ratio” for any year subject to this Agreement shall be Reinsured’s  Loss
Adjustment Expenses and for Other Underwriting Expenses (as reported by Reinsured in the Underwriting and Investment Exhibit, Part 3,
columns 1 and 2 of the Reinsured’s  Annual Statement) divided by the premium (as defined in Article III)
that Reinsured ceded to Reinsurer.


 


ARTICLE
V -  LOSS AND RESPONSIBILITIES


 


1.  BCMI shall give NMI notice
of any losses by way of quarterly listings.


 


2.  BCMI shall provide all administrative,
accounting and claims administration, and payment and processing duties required to service the business reinsured hereunder, including,
without limitation, the following:


 


a.  Effect existing and new agent
licensing and appointments;


 


b.  Print all policies, certificates,
and other forms necessary for the issuance and service of the Business;


 


c.  Pay agent commissions on the
Business;


 


d.  Pay claims on the Business;


 


e.  Prepare and forward pertinent
data relative to the Business to NMI for annual and quarterly statement purposes and income tax returns; and shall provide NMI
with such information as needed to complete such reports or returns or other such information as may be reasonably required.


 


3.  NMI agrees to accept the
decision of BCMI in denying or settling any claim.


 




    	 	Page 2 of 5	 



     


    

 


ARTICLE
VI -  ACCOUNTS


 


1.  BCMI will dispatch to NMI
a quarterly accounting within thirty (30) days after the end of each calendar quarter, setting forth the following:


 


a.  All gross premium written and
refunded.


 


b.  Agent’s commissions.


 


c.  Premium taxes thereon.


 


d.  Required reserves.


 


e.  Losses and loss adjustment expenses.


 


2.  The net balance due NMI or
BCMI shall be paid by the owing party within 10 days after the quarterly accounting is provided.


 


ARTICLE
VII -  ERRORS AND OMISSIONS


 


Should any item inadvertently be omitted
from, or credited in error on an account, such omission or error will not affect the liability of NMI and/or BCMI in regard to
any reinsurance and the mistake will be rectified as soon as possible upon discovery.


 


ARTICLE
VIII -  RESERVES


 


1.  NMI will maintain such reserves
as may be required by law or regulation with respect to premiums and claims on the business embraced by this Agreement.


 


ARTICLE
IX -  OVERSIGHTS


 


Neither NMI nor BCMI shall be prejudiced
in any way by any omission through clerical error, accident, or oversight to cede to NMI any reinsurance rightfully falling within
the terms of this Agreement, or by erroneous cancellation, either partial or total, of any cession or by omission to report or
by erroneously reporting losses, or by any other error or omission, but any such error or omission shall be corrected immediately
upon discovery.


 


ARTICLE
X -  INSPECTION OF RECORDS


 


BCMI shall have the right at any reasonable
time to inspect at the offices of NMI all books and records pertaining to the reinsurance under this Agreement.  NMI
shall have the right at any reasonable time to inspect at the offices of BCMI all books and records pertaining to the reinsurance
under this Agreement.


 


ARTICLE
XI -  ARBITRATION


 


1.  All disputes or differences
between the parties with respect to the operation or interpretation of this Agreement on which an amicable understanding cannot
be reached shall be decided by arbitration.  The arbitrators shall be empowered to decide all questions or issues and
shall be free to reach their decision from the standpoint of equity and customary practices of the insurance and reinsurance industry
rather than strictly from that of the law.


 




    	 	Page 3 of 5	 



     


    

 


2.  The arbitration shall be
held at Fargo, North Dakota.  The arbitration panel shall consist of three (3) arbitrators who must be current or former
officers of insurance companies, other than the parties to this Agreement or their affiliates or subsidiaries.  BCMI
shall select and appoint one arbitrator and NMI the other (the “Party Arbitrators”).  The Party Arbitrators
shall then select an impartial third arbitrator.


 


3.  The arbitrators shall decide
by a majority of votes, and their written decision shall be final and binding as to both parties and from which there can be no
appeal.  The cost of arbitration, including the fees of the arbitrators, shall be borne by the non-prevailing party.


 


ARTICLE
XII -  INSOLVENCY


 


In the event of the insolvency of BCMI,
all reinsurance and related administration thereto, as provided herein, shall remain in full force and effect, without diminution
because of the insolvency of BCMI.  The amount recoverable by the liquidator from the reinsurer shall not be reduced
as a result of delinquency proceedings.  Payment made directly to an insured or other creditor shall not diminish the
reinsurer’s obligation to the insurer’s estate except when either of the following applies:  (1) the
contract or other written agreement specifically provides for another payee of the reinsurance in the event of the insolvency of
the ceding insurer or (2) the assuming insurer, with the consent of the direct insured, has assumed the policy obligations
of the ceding insurer as direct obligations of the assuming insurer to the payees under the policies and in substitution for the
obligations of the ceding insurer to the payees.


 


ARTICLE
XIII -  TERMINATION


 


This Agreement shall be continuous, but
may be terminated by either party upon 12 months written notice.


 


In the event of termination, the liability
of NMI shall continue until there is a run-off of all liabilities on all policies with inception dates prior to the effective date
of termination.


 


ARTICLE
XIV -  CURRENCY


 


All amounts expressed herein are in United
States Dollars and all premium and loss payments shall be made in United States currency.


 


ARTICLE XV- OFFSET CLAUSE


 


BCMI and NMI may offset any balances, whether
on account of premiums, commissions, claims or claim adjustment expense, or any other amount(s) due from one party to the other
under this Agreement or any other reinsurance agreement previously or hereafter executed, whether acting as the reinsurer or the
ceding company.  In the event of the insolvency of any party hereto, however, offset shall only be allowed in accordance
with applicable law.


 




    	 	Page 4 of 5	 



     


    

 


ARTICLE
XV -  CHANGES


 


No separate notice, understanding or agreement
pertaining to the application of this Reinsurance Agreement, whether oral or documented in any way, that purports to waive or change
or that is in any way inconsistent with the clear intent, or any of the terms hereof, shall be binding on either NMI or BCMI unless
provided for or incorporated herein by standard terms or by special acceptance; nor shall any such notice understanding or agreement
that contradicts  the terms of this Agreement, operate as an estoppels to the assertion of any rights hereunder.


 


This Agreement shall constitute the entire
agreement between BCMI and NMI with respect to the business being reinsured hereunder and the obligations of BCMI and NMl shall
be determined solely by the terms of this Agreement.


 


ARTICLE
XVI -  SOVEREIGNTY


 


If any provision(s) of this Agreement be
declared illegal by any forum or a regulatory official, it is understood and agreed that said provision(s) will be deleted from
this Agreement, with no impact or effect upon the enforceability of the remaining provisions as a whole.


 


ARTICLE
XVII -  MISCELLANEOUS


 


1.  This Agreement may be altered
only by amendment in writing signed by an appropriate officer of each of the parties.


 


2.  This Agreement is to be considered,
construed, and interpreted under the laws of the State of Nebraska.


 


3.  Any and all prior existing
reinsurance agreements between BCMI and NMI are hereby cancelled on the effective date of this Agreement.  This Reinsurance
Agreement supersedes all prior reinsurance agreements between the parties.


 


4.  Notwithstanding anything
herein to the contrary, this Reinsurance Agreement will not be deemed effective if the Form A has not been approved by the
Nebraska Insurance Department or if the actual closing of the Agreements contemplated under the Affiliation Agreement fails to
occur.


 


IN WITNESS WHEREOF, the said BATTLE CREEK
MUTUAL INSURANCE COMPANY and NODAK MUTUAL INSURANCE COMPANY have, by their respective officers, executed and delivered these presents
in duplicate of the dates shown below.


 


	BATTLE CREEK MUTUAL	 	NODAK MUTUAL INSURANCE
	INSURANCE COMPANY	 	COMPANY


 


	/s/ Bruce Zimmerman	 	/s/ Michael J. Alexander
	Bruce Zimmerman	 	Michael J. Alexander
	President	 	Executive Vice President & CEO
	 	 	 
	Date: February 23, 2011	 	Date: February 23, 2011


 




    	 	Page 5 of 5	 



     


    

 


Exhibit B


 


EMPLOYEE LEASING AGREEMENT


 


WHEREAS, Battle Creek Mutual Insurance Company
(“BCM”) and Zimmerman Insurance Agency, Inc. (“ZIA”) have heretofore entered into a Shared Operations Agreement
dated January l, 1992; and


 


WHEREAS, the Parties wish to terminate that
Agreement by mutual consent effective January 1, 2011; and


 


WHEREAS, the Parties wish to enter into
an Employee Leasing Agreement to become effective on January 1, 2011 upon the terms set forth below;


 


IT IS THEREFORE AGREED as follows:


 


1.  BCM shall determine which
employees with the requisite skill or abilities are necessary to operate and conduct its insurance business and shall, from time
to time, notify ZIA of BCM’s requirements.


 


2.  ZIA agrees to use its best
efforts to supply employees who meet BCM’s requirements.  However, employees of ZIA shall not be responsible for
placement of reinsurance or the management of BCM’s investment portfolio.


 


3.  BCM shall have the right
at any time, in its absolute discretion, to require ZIA to withdraw the services of any designated employee.  Once an
employee ceases to provide the services covered by this Agreement, he or she shall no longer be an employee covered by this Agreement,
but will remain an employee of ZIA subject to retention or termination as ZIA may determine in its sole discretion.  Once
an employee ceases to be an employee of ZIA, he or she shall cease to be an employee covered by this Agreement.


 


4.  ZIA presently has twenty-seven
(27) employees who devote their full time and efforts to the operation and management of BCM’s insurance business and BCM
agrees to accept the services of all of those employees pursuant to the terms of this Agreement.


 


5.  ZIA is an independent contractor
and all employees it furnishes to BCM are employees of ZIA.


 


6.  ZIA is responsible for complying
with all state and federal laws or regulations relating to or governing ZIA’s employees and shall hold harmless BCM for any
penalty, deficiency or damages arising out of ZIA’s failure to comply with these requirements.


 


7.  In addition to the compliance
required under number 6 above, ZIA shall be responsible for the salaries or wages and fringe benefits, including, but not
limited to, health, life or liability insurance, and pension and 40lk plans.  ZIA shall also be responsible for all taxes
based on payroll.


 




    	 	Page 1 of 3	 



     


    

 


8.  ZIA shall carry worker’s
compensation, unemployment, liability and fidelity insurance that covers any employee leased under this Agreement.  To
the extent allowed, all such policies shall name BCM as an additional insured, with policy limits as required by BCM.  ZIA
shall annually furnish BCM with certificates or insurance evidencing the existence of such insurance.


 


9.  For its service, ZIA shall
be paid by BCM for all indirect costs that ZIA incurs in furnishing the services under this Agreement.  Indirect costs
include salaries or wages, taxes based on payroll and ZIA’s costs for any fringe benefits and costs of insurance required
by this Agreement.  It is the parties’ intention that all costs incurred by ZIA with respect to the ZIA employees
subject to this Agreement shall constitute indirect costs to be paid by BCM to ZIA.


 


10.  BCM will pay ZIA’s
indirect costs based on bi-weekly estimates submitted by ZIA.  On an annual basis, ZIA will submit an accounting, based
on GAAP, of the total of the indirect expenses of ZIA, which accounting shall reflect a credit for the bi-weekly payments and the
balance due either party.


 


11.  BCM shall be responsible
for all its direct expenses, which include consultants, accounting services, postage, printing, equipment rental, travel and any
other costs incurred directly by BCM.


 


12.  BCM agrees that it will
comply, and assure the compliance of third parties, with all health and safety laws, regulations, ordinances, directives, and rules
imposed by federal, state, or local governmental entities regarding the proper use and safety of the facilities where the employees
shall conduct the services described in this Agreement.


 


13.  This Agreement shall expire
on December 31, 2013; thereafter, the term of this Agreement shall automatically renew for successive renewal terms of one
(1) year each unless either party delivers notice to the other party at least six (6) months prior to the expiration of the existing
term or renewal term.


 


14.  This Agreement may be terminated
by either party upon thirty (30) days’ notice to the other party upon any of the following events:  (a) the
mutual agreement of the parties; (b) upon any default of a party’s obligation under this Agreement which default is
not corrected after ten (10) days written notice from the non-defaulting party; provided, however, neither party shall have the
right to terminate this Agreement based upon any default caused (in whole or in part) by such defaulting party.


 


15.  Neither party may assign
this Agreement, or its rights or obligations hereunder, without the prior written consent of the other party.


 


16.  This Agreement is only for
the benefit of the parties hereto and shall not confer any benefit or create any right or cause of action in or on behalf of any
other person.


 


17.  Upon the effective date
of this Agreement, the Shared Operations Agreement of January l, 1992 shall be deemed terminated.


 




    	 	Page 2 of 3	 



     


    

 


18.  Regardless of the date of
execution, this Agreement becomes effective on January 1, 2011.


 


DATED this 30th day of January, 2010.


 


	BATTLE CREEK MUTUAL	 	ZIMMERMAN INSURANCE AGENCY,
	INSURANCE COMPANY	 	INC.


 


	By:	/s/ Bruce Zimmerman	 	By:	/s/ Victoria J. Ashker
	Print:	Bruce Zimmerman	 	Print:	Victoria J. Ashker
	Title:	Authorized Representative	 	Title:	Authorized Representative


 




    	 	Page 3 of 3	 



     


    

 


Exhibit C


 


SURPLUS NOTE AGREEMENT


 


Battle Creek Mutual Insurance Company, a
voluntary assessment association organized under the laws of the State of Nebraska (hereinafter “Issuer”), for value
received, hereby promises to pay, subject to the approval of the Director of Insurance pursuant to Section 44-221 of the Nebraska
Revised Statutes, to Nodak Mutual Insurance Company, or registered assigns, the principal sum of three million United States dollars
($3,000,000.00) on December 30, 2040, (the Scheduled Maturity Date) and to pay interest thereon, subject to the approval of
the Director of Insurance pursuant to Section 44-221 of the Nebraska Revised Statutes, from December 30, 2010 or from
the most recent Scheduled  Interest Payment Date to which interest has been  paid or duly provided for, semi-annually
in arrears on January 1 and July 1 in each year, commencing July 1, 2011(each, a “Scheduled Interest Payment  Date”)
at the  rate of one percent (1.0%) per annum, until the  principal hereof  is paid or duly provided
for.  The date upon which any state or federal agency obtains an order or grants approval for the rehabilitation, liquidation,
conservation or dissolution of the Issuer shall also be deemed to be the Scheduled Maturity Date.  As specified herein,
all payments of principal or interest on this Security may be made only from the Issuer’s available surplus when the amount
of the Issuer’s surplus over all liabilities is double that of the amount of principal and interest then being paid and only
with the prior approval of the Director of Insurance pursuant to Section 44-221 of the Nebraska Revised Statutes.  The
interest so payable, and punctually paid or duly provided for, on any Scheduled Interest Payment Date shall be paid at the close
of business on July 1st (a “Regular Record Date”), next preceding such Scheduled Interest Payment Date.  Interest
on the Securities shall be calculated on the basis of a 360-day year of twelve 30-day months.  Any such interest not
so punctually paid or duly provided for shall forthwith cease to be payable on such Regular Record Date and shall be paid at the
close of business 15 days prior to a special record date for the payment of such interest to be fixed by the Issuer.


 


Payments of principal of the Security shall
be made only against surrender of the Security.  Payments of interest on this Security may be made, in accordance with
the foregoing and subject to applicable laws and regulations, on or before the Scheduled Interest Payment Date of such  payment.  Any
permitted payment of principal of this Security may be made by check drawn on a bank in the United States.  Notwithstanding
the forgoing, permitted payments of principal of or any interest on this Security shall be made by wire transfer to an account
maintained by the payee with a bank in the United States if the holder so elects by giving notice not less than 15 days prior to
the applicable Scheduled Maturity Date or Scheduled Interest Payment Date, Unless such designation is revoked, any such designation
made by such holder with respect to the Security shall remain  in effect with respect  to any future payments
with respect to the Security payable to such holder.


 


This Surplus Note is subordinated to policyholders,
claimants and beneficiary claims and to all other classes of creditors other than to future surplus note holders, if any.  Future
surplus notes, if any, will be pari passu with this Surplus Note.


 


[SIGNATURE PAGE TO FOLLOW]


 




    	 	Page 1 of 2	 



     


    

 


This Security may be executed by the Issuer
by manual or facsimile signatures, and such signatures may be executed on separate counterparts.


 


	Dated:  December 30, 2010.	BATTLE CREEK MUTUAL
	 	INSURANCE COMPANY


 


	 	By:	/s/ Bruce Zimmerman
	 	Print:	Bruce Zimmerman
	 	Title:	Chairman


 


ATTEST:


 


	By:	/s/ Victoria J. Ashker	 
	Print:	Victoria J. Ashker	 
	Title:	Secretary	 


 




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Exhibit D


 


AMENDED AND RESTATED ARTICLES OF

INCORPORATION OF BATTLE CREEK MUTUAL INSURANCE COMPANY


 


ARTICLE I


Name, Location and Resident
Agent


 


Section 1.  The name of this Company
shall be Battle Creek Mutual Insurance Company, and its principal place of business shall be in the city of Battle Creek, Madison
County, Nebraska.


 


Section 2.  The registered agent
of said Company shall be Bruce Zimmerman, Battle Creek, Nebraska.  The registered office shall be Battle Creek Mutual
Insurance Company, 603 S. Preece Street, Battle Creek, Nebraska 68715.


 


ARTICLE II


Nature of Business


 


Section 1.  The nature of the
business to be transacted and the objects and purposes of the Company are:  to act as a domestic mutual insurance company
under the laws of the State of Nebraska and to make all kinds of insurance permitted such Companies under the laws of the State
of Nebraska.


 


Section 2.  The Company shall
have all the privileges and powers, and may engage in any activity permitted similar Companies organized under the laws of the
State of Nebraska; and may do and perform all and every lawful act required as deemed expedient for the conduct of its business,
the ownership and its property, or the maintenance perpetuity, prosperity or welfare of the Company.


 


ARTICLE III


Investments


 


Section 1.  The Company shall
be authorized to invest its funds in a manner not prohibited by the laws of the State of Nebraska.


 


ARTICLE IV


Additional Powers


 


Section 1.  The Board of Directors
may from time to time vote to indemnify and reimburse any director or officer or former director or officer of the Company, his
or her heirs, estate or personal representatives, for any loss, cost or expense he or she may suffer, including Court costs, attorney’s
fees, and incidental expenses, and further including the amount of any payment properly made to settle or compromise any proceeding
in which such director or officer is made a party to any legal proceedings, including appeals therefrom, because of his or her
being or having been a director or officer of the Company.  Provided, however, the directors shall have no power to indemnify
or reimburse a director or officer or former director or officer of the Company in any case in which he or she shall finally be
adjudged in such proceedings to be liable for negligence or misconduct in the performance of his or her duty as such director or
officer or former director or officer.  The foregoing right to indemnity and reimbursement shall not be exclusive of
other rights to which a director or officer may be entitled by law, agreement, vote of members or otherwise.


 




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ARTICLE V


Perpetual Existence


 


Section 1.  This Company shall
have perpetual existence, unless sooner dissolved by or in accordance with the laws of the State of Nebraska.


 


ARTICLE VI


Policyholder Members


 


Section 1.  The Company shall
be operated as a mutual company, without capital stock.  Each policyholder shall be a member of this Company.  Policyholders
shall participate in the profits of the Company, proportionately, on the basis of premiums paid and savings or earnings of the
Company properly attributable thereto, which profits may be allocated or distributed at different rates upon different kinds of
classifications of risks insured.  The private property of the members shall not be subject to the debts of the Company.


 


ARTICLE VII


Annual Meeting of Members


 


Section 1.  The members shall
meet annually on a day prescribed in the Bylaws at the home office of the Company for the purpose of electing directors and transacting
such other business as may properly come before the members.


 


Section 2.  Each member shall
have a right to vote in person or by proxy, and shall be entitled to one vote at all annual meetings and at all special meetings
legally called.  The membership list of the Company shall be closed at a date provided in the Bylaws for the purpose
of determining the members of record for the annual or special meeting to be held.


 


ARTICLE VIII


Board of Directors and
Officers


 


Section 1.  The composition, duties
and time of meeting of the Board of Directors shall be set out in the Bylaws of the Company.


 


Section 2.  The officers to be
appointed, their duties shall be set out in the Bylaws of the Company.


 


ARTICLE IX


Amendments


 


Section 1.  Amendments to these
Articles of Incorporation shall be adopted by a two-thirds majority vote of all the directors, thereafter approved by the Department
of Insurance, and thereafter approved by a majority vote of all the members voting in person or by proxy at that annual or legally
called special meeting.  Notice of such proposed amendments to these Articles of Incorporation shall be sent to all members
of record as required in the Bylaws of the Company.


 




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ARTICLE X


Superseding of Prior
Articles


 


Section 1.  These Amended and
Restated Articles of Incorporation supersede the original articles of incorporation and all amendments thereto.


 


CERTIFICATION


 


Pursuant to application provisions of the
Nebraska Revised Statutes, as amended, the undersigned authorized representatives of the Company hereby certify that:


 


(a)  The name of the Company is
Battle Creek Mutual Insurance Company;


 


(b)  The foregoing Amended and
Restated Articles of Incorporation include amendments that have been approved by a vote of the policyholder members of the Company;


 


(c)  At the time of the membership
vote for the Amended and Restated Articles of Incorporation, the Company had 7,717 policyholder members, each entitled to cast
one vote.  The number of policyholder members voting in favor of the Amended and Restated Articles of incorporation was
7,704.  The number of members voting against was 0.  The number of votes cast in favor of the Amended and Restated
Articles of incorporation is sufficient to be deemed the act of the Company; and


 


(d)  The Amended and Restated
Articles of Incorporation were approved and adopted on February 25, 2011.


 


	 	BATTLE CREEK MUTUAL
	 	INSURANCE COMPANY


 


	 	By:	/s/ Bruce Zimmerman
	 	Print:	Bruce Zimmerman
	 	Title:	Chairperson


 


	 	By:	/s/ Victoria J. Ashker
	 	Print:	Victoria J. Ashker
	 	Title:	Secretary


 




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Exhibit E


 


RESTATED BY-LAWS


 


OF


 


BATTLE CREEK MUTUAL INSURANCE COMPANY


 


ARTICLE
I -  NAME


 


The name of this company is “BATTLE
CREEK MUTUAL INSURANCE COMPANY.”


 


ARTICLE
II -  MEMBERS


 


Section 1.  Members.  Any
person or legal entity owning a valid policy of insurance issued by the Company shall be a member of the Company, but only so long
as said policy remains in force.


 


Section 2.  Voting.  Each
member shall be entitled to one vote, in person or by proxy at any annual or special meeting of the members, regardless of the
number of policies owned by the member.


 


Except as provided by law, a majority vote
of the members present in person or by proxy and voting shall be sufficient to carry any proposition.


 


Section 3.  Meetings and Notices.


 


A.  Annual Meeting.  The
annual meeting of the members shall be on the fourth Wednesday in April at the home office of the Company in Battle Creek, Madison
County, Nebraska, for the purpose of electing directors and such other business as may come before the meeting.


 


Notice of the time and place of the annual
meeting of the members shall be contained in the policy of insurance.


 


B.  Special Meetings.  Special
meetings of the members may be called by the President upon the written request by a majority of the Board of Directors or upon
written request of twenty percent (20%) of the members.


 


Notice of a special meeting shall be in writing
and mailed to a policyholder at the policyholder’s last known address, as set forth in the records of the Company.  The
Notice shall specify the time, place and business to be transacted at such meeting.


 


Section 4.  Quorum.  A
quorum at any meeting of the members shall consist of not less than one-third (1⁄3) of the members, present in person or by
proxy, but a lesser number may adjourn the meeting to another time and place.


 




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Section 5.  Proxies.  Any
member may vote at any annual or special meeting by a proxy duly executed by the member and nominating another member as an attorney
in fact.


 


All proxies must be in a form approved by
the Company and filed with the Secretary at least five (5) days prior to the meeting.  Unless otherwise stated therein,
proxies shall be valid for eleven (11) months following the date of execution thereof.


 


Section 6.  Record Date.  The
list of policyholders existing forty-five (45) days prior to the date of the meeting shall constitute the members eligible to vote.


 


ARTICLE
III -  BOARD OF DIRECTORS


 


Section 1.  Membership and
Terms.  The Board of Directors shall consist of not less than five (5) nor more than ten (10) members, with the actual
number set, from time to time, by Resolution of the Board of Directors.


 


Directors shall be elected for a three-year
(3-year) term, and as nearly as may be, one-third (1⁄3) shall be elected annually.


 


The Board of Directors shall be appointed,
nominated and/or elected as follows:


 


A.  Appointed Directors.  During
the term of the Surplus Note or the 100% Quota Share Agreement, as described in the Affiliation Agreement, effective on or about
April 1, 2011, Nodak Mutual Insurance Company shall appoint two-thirds (2⁄3) of the members of the Board of Directors
(the “Appointed Directors”).  In the event of a vacancy in the seat of one or more of the Appointed Directors,
due to removal, resignation, death, disability, or termination of his/her appointment, Nodak Mutual Insurance Company shall have
the right to appoint a replacement Appointed Director.


 


B.  Elected Directors.  During
the term of the Affiliation Agreement made by and between the Company and Nodak Mutual Insurance Company, effective on or about
April 1, 2011, the policyholders of the Company may nominate and elect one-third (1⁄3) of the members of the Board of
Directors (the “Elected Directors”).  Prior to the effective date of the Affiliation Agreement described
above, the Board of Directors of the Company shall designate the Elected Directors from the current Board of Directors who shall
serve the remainder of their respective three (3) year terms remaining on April 1, 2011.  Elected Directors shall
each serve for a three (3) year term, and as nearly as may be, one-third (1⁄3) shall be elected annually.  Any vacancy
in the seat of one or more Elected Directors due to termination, resignation, death, disability or removal from office shall be
filled by appointment of an interim Elected Director to serve until the next Annual Meeting of the policyholders, at which time
an Elected Director will be elected by the policyholders to serve the remainder of the term of the vacant seat.  Vacancy
appointments of the Elected Directors shall be made by the remaining Elected Directors then serving on the Board of Directors.  In
the event all seats of the Elected Directors should become vacant at any one time, the Company will cause a Special Meeting of
the policyholders to be called for the purpose of filling the vacancies.


 




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Section 2.  Authority.  All
corporate powers shall be exercised by or under the authority of and the business and affairs of the Company shall be managed by
or under the direction of the Board of Directors.


 


Section 3.  Election.  Nominations
for election to the Board of Directors must be in writing and filed with the Secretary of the Company at least thirty (30) days
prior to the date of the annual meeting.


 


From nominations so made, and no others,
the members of the Board of Directors shall be so elected with the nominee receiving the highest number of votes declared elected.


 


Section 4.  Vacancies.  Except
as otherwise set forth herein, any vacancy on the Board of Directors caused by resignation, death or disqualification shall be
filled by a vote of the Board of Directors, with such person to serve the unexpired term.


 


In the event of a vacancy caused by an increase
in the number of directors, the vacancy shall be filled by a vote of the Board of Directors, with such person to serve  until
the next annual  meeting of the members.


 


Section 5.  Organization Meeting.  The
regular organizational meeting of the Board of Directors shall be held immediately after the adjournment of the members’
annual meeting, or as soon thereafter as a quorum of the Board of Directors can be obtained, for the election of officers and the
transaction of any other business which may properly be brought before the meeting, and no notice shall be required of such meeting.


 


Section 6.  Other Meetings.  Regular
meetings of the Board of Directors shall be held at such time and place as the Board of Directors may designate.  Special
meetings of the Board of Directors may be called by the President at any time or by the Secretary when requested in writing by
one-third of the entire number of Board members.  At least two (2) days written notice or electronic notice of special
meetings shall be given each member of the Board.  Attendance at any special meeting shall constitute waiver of notice.


 


Section 7.  Place of Meeting.  All
meetings of the Board of Directors shall be held at the office of the Company, unless some other place is designated therefore
in the notice of the meeting.  Unless otherwise indicated in the notice of a special meeting, any and all business may
be transacted at a special meeting.  Any or all Directors may participate in any meeting of the Board of Directors by
any means of remote communication through which the Directors may simultaneously  hear each other during such meeting,
and such participation constitutes presence in person at the meeting.


 


Section 8.  Quorum.  A
majority of the Directors holding office immediately prior to a meeting of the Board of Directors shall constitute a quorum for
the transaction of business at such meeting.  A majority vote of the Directors present in quorum shall determine any
matter not herein or by law requiring a different vote.


 


Section 9.  Compensation and
Employment, Officers and Employees.  The Board of Directors shall fix the compensation of all officers and may fix
a reasonable compensation to be paid Directors for attending meetings of the Board of Directors.  The Board of Directors
may employ or authorize the employment of such legal counsel, manager or management service, clerks, representative and other employees
as they deem necessary and may define and limit their powers and duties, and term of service.


 




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Section 10.  Written Action.  An
action required or permitted to be taken by the Board of Directors may be taken by written action signed by that number of Directors
that would be required to take the same action at a meeting of the Board at which all Directors are present, except as to those
matters requiring policyholder approval, in which case the written action must be signed by all members of the Board of Directors
then in office.  When action is taken in this manner, all Directors must be notified immediately of its text and effective
date.


 


Section 11.  Committees.  The
Board of Directors may appoint such committees as it deems to be in the best interests of the Company, which to the extent provided
in the resolution creating the committee, shall have and may exercise such powers as the Board of Directors may designate.


 


ARTICLE
IV -  OFFICERS


 


Section 1.  Officers, Qualifications
and Election.  The Company shall have a Chairman, a President, a Secretary, a Treasurer and such other officers,
if any, as the Board of Directors from time to time may elect.  Any number of offices or functions of those offices may
be held or exercised by the same person.  The Board of Directors may elect officers at any time.


 


Section 2.  Term of Office.  Each
officer shall hold office until his or her successor has been elected, unless a different term is specified in the resolution electing
the officer, or until his or her earlier death, resignation or removal.


 


Section 3.  Removal of Officers.  Any
officer may be removed from office at any time, with or without cause, by the Board of Directors.


 


Section 4.  Resignation.  An
officer may resign at any time by giving written notice to the Company.  A resignation will be effective upon its receipt
by the Company, unless the resignation specifies it is to be effective at some later time or upon the occurrence of some specified
later event.


 


Section 5.  Vacancies.  A
vacancy in any office may, or in the case of a vacancy in the office of President or Treasurer shall, be filled by the Board of
Directors.


 


Section 6.  Compensation.  Officers
shall receive such amounts and types of compensation for their services as shall be fixed by the Board of Directors.


 


Section 7.  Powers.  Unless
otherwise specified by the Board of Directors, each officer shall have those powers and shall perform those duties that are (i) set
forth in these By-Laws (if any are so set forth), (ii) set forth in the resolution of the Board of Directors electing that
officer or any subsequent resolution of the Board of Directors with respect to that officer’s duties, or (iii) commonly
incident to the office held.  An officer elected or appointed by the Board of Directors may, without the approval of
the Board, delegate some or all of the duties and powers of an office to other persons.


 




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Section 8.  Chairman.  The
Chairman shall preside at all meetings of the members and the Board of Directors and perform any other duties incident to such
office or assigned by the Board of Directors.


 


Section 9.  President.  The
President shall have general active management of the business of the Corporation.  In the absence of the Chairperson
of the Board, the President shall preside at all meetings of the shareholders and directors.  The President shall see
that all orders and resolutions of the Board of Directors are carried into effect.  The President shall execute and deliver,
in the name of the Company, any deeds, mortgages, bonds, contracts or other instruments pertaining to the business of the Company,
unless the authority to execute and deliver is required by law to be exercised by another person or is expressly delegated by the
Articles or By-Laws or by the Board of Directors to some other officer or agent of the Company.  The President shall
maintain records of and, whenever necessary, certify all proceedings of the Board of Directors and the shareholders and, in general,
perform all duties usually incident to the office of the President.  The President shall have such other duties as may,
from time to time, be prescribed by the Board of Directors.


 


Section 10.  Treasurer.  The
Treasurer shall keep accurate financial records of the Company.  The Treasurer shall deposit all moneys, drafts and checks
in the name of, and to the credit of, the Company in such banks and depositories as the Board of Directors shall, from time to
time, designate.  The Treasurer shall have power to endorse for deposit, all notes, checks and drafts received by the
Company.  The Treasurer shall disburse the funds of the Company, as ordered by the Board of Directors, making proper
vouchers therefore.  The Treasurer shall render to the President and the Directors, whenever requested, an account of
all transactions entered into as Treasurer and of the financial condition of the Company, and shall perform such other duties as
may, from time to time, be prescribed by the Board of Directors or by the President.


 


Section 11.  Vice Presidents.  The
Vice Presidents, if any, shall be subject to the direction and control of the Board of Directors and the President and shall have
such powers and duties as the Board of Directors, or the President, may assign to them.  If the Board of Directors elects
more than one Vice President, then it shall determine their respective titles, seniority and duties.  If the President
is absent, disqualified from acting, unable to act or refuses to act, the most senior in rank of the Vice Presidents (as determined
by the Board of Directors) shall have the powers of, and shall perform the duties of, the President.


 


Section 12.  Assistant Treasurers.  The
Assistant Treasurers, if any, shall have such powers and duties as the Board of Directors, the President and the Treasurer may
assign to them.  If the Board of Directors elects more than one Assistant Treasurer, then it shall determine their respective
titles, seniority and duties.  If the Treasurer is absent, disqualified  from acting, unable to act or refuses
to act, the most senior in rank of the Assistant Treasurers (as determined by the Board of Directors) shall have the powers of,
and shall perform the duties of, the Treasurer.


 


Section 13.  Secretary.  The
Secretary, if any, shall be subject to the direction and control of the Board of Directors and the President, and shall have such
powers and duties as the Board of Directors and the President may assign to the Secretary.


 




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ARTICLE
V -  COMMITTEES


 


Section 1.  Committees.  Members
of the Executive Committee, if there be one, or any other committee, shall be appointed for such term, and have such powers, as
the Board may designate in the resolution establishing the committee, but may be removed at any time by a vote of a majority of
all the directors.  Vacancies on a committee may be filled by vote of the Board of Directors.


 


Section 2.  Committee Meetings.  Regular
meetings of any committee may be held without notice at such times and places as the committee may fix from time to time by resolution
or as determined by the committee’s Chairman.  Special meetings of any committee may be called by a majority of
members thereof, or by the President upon not less than one (1) day’s notice stating the place, date and hour of the meeting,
which notice may be written or oral, and if mailed, shall be deemed to be delivered when deposited in the United States mail addressed
to the member of such committee at his address.  Any member of the committee may waive notice of any meeting, and no
notice of any meeting need be given to any member thereof who attends in person.  The notice of a meeting of any committee
need not state the business proposed to be transacted at the meeting.


 


Section 3.  Quorum.  A
majority of the members of any committee shall constitute a quorum for the transaction of business at any meeting thereof, and
action of any committee must be authorized by the affirmative vote of a majority of the members present at a meeting at which a
quorum is present.


 


Section 4.  Committee Action.  Any
action required or permitted to be taken by any committee at a meeting may be taken without a meeting if a consent in writing setting
forth the action so taken shall be signed by all the members of such committee.  A committee may act by written resolution
approved by all of the members, although not formally convened.


 


Section 5.  Vacancies.  Any
vacancy in any committee may be filled by a vote of a majority of the whole Board of Directors.


 


Section 6.  Removal/Resignation
of Committee Members.  Any member of any committee may be removed at any time with or without cause by resolution
adopted by a majority of the whole Board of Directors.  Any member of any committee may resign from such committee at
any time by giving notice to the President or Secretary of the Company and, unless otherwise specified therein, the acceptance
of such resignation shall not be necessary to make it effective.


 


Section 7.  Officers/Rules/Minutes
of Committees.  Each committee shall elect a presiding officer from its members and may fix its own rules of procedure
which shall not be inconsistent with these By-Laws.  It shall keep regular Minutes as specified in these By-Laws and
report the same to the Board of Directors for its information at the meeting thereof held next after proceedings shall have been
taken.


 


Section 8.  Compensation.  The
compensation, if any, and expense allowance, if any, to be paid members of a committee shall be fixed by the Board of Directors.


 




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ARTICLE
VI -  DIVIDENDS


 


To the extent allowed by applicable laws,
the Board of Directors, in its discretion, may from time to time in such manner and to such extent as it may deem advisable, fix
and determine the amount of dividends, if any, to be distributed to members, or classes or groups thereof, and for such purposes
may establish reasonable classifications or groupings of members and plans of payment based on loss ratios, size of risk, class
of business, territorial division, or any combination thereof, or any other equitable method, provided, however, such dividends
shall be paid only from part of gains and savings accumulated from the business as the Board of Directors, in its discretion, shall
deem unnecessary  for the payment of losses and expenses, for surplus requirements and for the general security of the
Company and its members.


 


ARTICLE
VII -  DIRECTORS’ LIABILITY


 


A director of the Company shall not be liable
to the Company or its members for money damages for any actions taken, or any failure to take action, or any failure to take action
as a director, except for any of the following:


 


1.  The amount of a financial
benefit received by a director to which the director is not entitled.


 


2.  An intentional infliction
of harm on the Company or the members.


 


3.  A violation of Section 21-2096
of the Nebraska Revised Statutes.


 


4.  An intentional violation
of criminal law.


 


ARTICLE
VIII -  INDEMNITY


 


The Company shall indemnify a director for
liability, as defined in § 21-20, 102, of the Nebraska Revised Statutes, or as amended, to any person for any action
taken, or failure to take any action, as a director, except liability for any of the following:


 


1.  Receipt of a financial benefit
to which the director or officer is not entitled.


 


2.  An intentional infliction
of harm on the Company or its members.


 


3.  A violation of § 21-2096
of the Nebraska Revised Statutes.


 


4.  An intentional violation
of criminal law.


 


ARTICLE
IX -  SEAL


 


The Company shall have a Company Seal in
a design selected by the Board of Directors.


 


ARTICLE
X -  AMENDMENT TO BY-LAWS


 


These By-Laws may be amended by addition,
alteration or repeal at any meeting of the Board of Directors by an affirmative vote of not less than two-thirds (2⁄3) of the
directors present, provided that written notice of the same shall have been provided to each Director at least thirty (30) days
prior to the meeting at which the same is to be considered.


 




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