EXHIBIT
10.18


 


FORM
OF SPECIALTY PROGRAM BUSINESS POOLING AGREEMENT


 


This Specialty Program
Business Pooling Agreement (“Pooling Agreement”) by and between Tower Insurance
Company of New York (“TICNY”), an insurance company domiciled in New York,
Tower National Insurance Company (“TNIC”), an insurance company domiciled in
Massachusetts, (collectively called “Tower”),  and CastlePoint Insurance
Company (“CPIC”), an insurance company domiciled in
[             ],
is dated this      day of
               ,
200[ ], and is made effective as of 12:01 a.m.,
[             ],
200[ ],  (the “Effective Date”).


 


WHEREAS, TICNY, TNIC and CPIC are each authorized
to transact, and do transact, a multiple line property and casualty insurance
business; and


 


WHEREAS, TICNY, TNIC and CPIC desire to pool
their respective Specialty Program Business (defined below) in order to make
more efficient use of available surplus and achieve other operating
efficiencies; and


 


WHEREAS, CPIC will act as the manager of such
pool;


 


NOW, THEREFORE, for mutual considerations, the
sufficiency and receipt of which is hereby acknowledged, TICNY, TNIC and CPIC
agree as follows:


 


ARTICLE
I          Definitions


 


The following terms,
whenever used herein, shall have the following meanings:


 


“Existing
Reinsurance” shall mean reinsurance ceded by a Participating Company that is 


 

















 


in effect on the Effective Date, to
the extent that such reinsurance relates to the Specialty Program Business of
such Participating Company.


 


“Management
Fees” shall mean the management fees payable by TICNY and TNIC to CPIC pursuant
to Article XIV.


 


“Net
Liability” shall mean the loss and loss adjustment expense liability remaining
after the application of Existing Reinsurance and, with respect to CPIC, Pool
Reinsurance, in each case to the extent collectible; provided, however,
that “Net Liability” shall not include liability with respect to losses and
loss adjustment expenses incurred prior to the Effective Date.


 


“Net
Loss Ratio” shall mean, for any period of time, the ratio of Net Losses plus
loss adjustment expenses incurred during such period to Net Premium Earned for
such period.


 


“Net Losses” shall mean,
for any period of time, any and all amounts that a Participating Company is
required to pay to or on behalf of insureds for insurance claims made under its
Policies, after the application of any applicable reinsurance but not including
loss adjustment expenses.


 


“Net Premium Earned”
shall mean, for any period of time, the earned portion of premiums written by a
Participating Company after payment for reinsurance, if any.


 


“Net
Written Premium” shall mean direct premium written on the Policies covered by
this Agreement plus additions, less refunds and return premium for
cancellations and reductions (but not dividends) and less premium paid or
payable for reinsurance that inures to the benefit of the Participating
Companies.


 


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“Participating Companies” shall mean TICNY, TNIC and CPIC.


 


“Policies”
shall mean all policies, certificates, binders, contracts and agreements of
insurance covering Specialty Program Business issued or renewed on or after the
Effective Date by or on behalf of TICNY, TNIC or CPIC, as the case may be, all
of which shall be subject to this Pooling Agreement.


 


“Pool
Reinsurance” shall mean property catastrophe and excess of loss reinsurance
ceded by CPIC to an insurer that is not a Participating Company that inures to
the benefit of the Specialty Program Business Pool.


 


“Pooling
Percentages” shall be those percentages set forth on Schedule A attached, as
amended from time to time.


 


“Program
Business” shall mean narrowly defined classes of business that are underwritten
on an individual policy basis by Program Underwriting Agents on behalf of
insurance companies.


 


“Program Underwriting
Agent” means an insurance intermediary that aggregates business from retail and
general agents and manages business on behalf of insurance companies, including
functions such as risk selection and underwriting, premium collection, policy
form design and client service.


 


“Specialty Program
Business” shall mean (i) all Program Business other than Traditional Program
Business; and (ii) Traditional Program Business that Tower elects not to manage
and that CPIC elects to manage.


 


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“Specialty
Program Business Pool” shall mean Specialty Program Business written by or on
behalf of the Participating Companies or assumed by a Participating Company
(including such business assumed by TICNY from its affiliates), that is pooled
and allocated to each of the Participating Companies based upon their Pooling
Percentage as set forth in this Pooling Agreement.


 


“Traditional
Program Business” shall mean blocks of Program Business in excess of $5 million
in gross written premium that Tower has historically underwritten, consisting
of non-auto related personal lines and the following commercial lines of
business: retail stores and wholesale trades, commercial and residential real estate,
restaurants,  grocery stores, office and service industries,  and
artisan contractors.


 


ARTICLE
II        Cessions to Specialty Program
Business Pool


 


TICNY and TNIC shall
automatically and obligatorily cede to CPIC as reinsurance, and CPIC shall be
obligated to accept as assumed reinsurance, one hundred percent (100%) of the
Net Liabilities with respect to Policies issued or assumed by TICNY and TNIC,
to be combined with the Net Liabilities of CPIC under Policies issued or
assumed by CPIC, provided, however, that the total combined gross written
premium share of TICNY and TNIC after pooling shall not exceed $25 million for
the twelve (12) month period ending March 31, 2007, subject to a growth factor
of 25% per each twelve (12) month period thereafter.


 


ARTICLE
III      Participation in Specialty Program
Business Pool


 


CPIC shall establish the
Specialty Program Business Pool, which shall consist of the Net Liability under
all Specialty Program Business written or assumed by CPIC and Tower 


 


4

















 


(including business assumed by CPIC pursuant to this
Pooling Agreement). CPIC shall automatically and obligatorily cede to TICNY and
TNIC, and retain for CPIC’s own account, the applicable Pooling Percentages of
such Net Liability and TICNY and TNIC shall automatically and obligatorily
accept such cessions. TICNY and TNIC shall determine how the Tower Pooling
Percentage will be allocated between each of them. Such Pooling Percentages
shall be applied to all Specialty Program Business written by the Participating
Companies. Any change in the Pooling Percentages shall be made only by a
written amendment to this Pooling Agreement signed by the parties hereto or as
otherwise set forth in Article XVI of this Pooling Agreement. The Participating
Companies acknowledge that, following the acceptance or retention of a
percentage of the Specialty Program Business Pool by a Participating Company,
such pooled business shall be subject to such reinsurance as may be entered into
by such Participating Company on or after the Effective Date that is for the
benefit of such Participating Company as to its participation in the Specialty
Program Business Pool and does not inure to the benefit of the Specialty
Program Business Pool.


 


ARTICLE
IV       Reinsurance


 


CPIC, as pool manager, shall negotiate, obtain and
maintain such Pool Reinsurance as it deems appropriate with respect to the
liabilities of the Specialty Program Business Pool, which reinsurance shall
inure to the benefit of the Participating Companies according to their
respective Pooling Percentages. CPIC shall purchase property and casualty
excess of loss reinsurance and property catastrophe excess of loss reinsurance
from third party reinsurers to protect the net exposure of the Participating
Companies. The property catastrophe excess of loss reinsurance purchased by
CPIC may provide for up to approximately 10% of the combined surplus of Tower 


 


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and CPIC to be retained by the pool prior to
reinsurance by third party reinsurance companies (“Pooled Retention”). Any of
the Participating Companies also shall have the right, in its discretion, to
require CPIC to increase the Pooled Retention by an additional amount of up to
10% of the surplus of CastlePoint Reinsurance Company (“CPRe”) provided that
CPIC purchases reinsurance for such additional Pooled Retention from CPRe.


 


ARTICLE
V        Losses and Loss Adjustment
Expenses


 


A.           
All loss settlements made by CPIC with regards to the Specialty Program
Business, whether under strict policy conditions or by way of compromise, shall
be unconditionally binding upon TICNY and TNIC.


 


B.           
Each Participating Company shall be liable for its proportionate share of loss
adjustment expenses incurred under or in connection with the Policies and shall
be credited with its proportionate share of any recoveries of such expense.


 


C.           
If a Participating Company pays or is held liable to pay any punitive, exemplary,
compensatory, or consequential damages (hereinafter called “Extra Contractual
Obligations”) because of alleged or actual negligence on its part in handling a
claim under a Policy, one hundred percent (100%) of such Extra Contractual
Obligations (to the extent permitted by law) shall be added to the Net
Liability, if any, of such Participating Company under the Policy involved, and
the sum thereof shall be subject to this Pooling Agreement.


 


D.           
If a Participating Company pays or is held liable to pay in connection with any
loss, amounts in excess of the limit of its original Policy, such loss in
excess of that limit having been incurred because of its failure to settle
within the Policy limit or by reason of alleged or actual


 


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negligence in rejecting an offer of
settlement or in the preparation of the defense or in the trial of any action
against the original insured or reinsured or in the preparation or prosecution
of an appeal consequent upon such action (hereinafter called an “Excess of
Policy Limits Loss”), one hundred percent (100%) of such Excess of Policy
Limits Loss (to the extent permitted by law) shall be added to the Net
Liability, if any, of such Participating Company under the Policy involved, and
the sum thereof shall be subject to this Pooling Agreement.


 


ARTICLE
VI       Salvage and Subrogation


 


Each of the Participating
Companies shall be credited with its proportionate share of salvage and
subrogation on account of losses under the Policies.


 


ARTICLE
VII     Original Conditions Apply


 


All
reinsurance under this Pooling Agreement shall be subject to the same rates,
terms, conditions and waivers, and to the same modifications and alterations as
the respective Policies. Each of the Participating Companies shall be credited
with the proportion equal to its Pooling Percentage of the original premiums
received under the Policies issued on or after the Effective Date, but after
deduction of premiums, if any, ceded under Existing Reinsurance and Pool
Reinsurance.


 


ARTICLE VIII   Ceding
Commission


 


Each of the Participating
Companies shall be charged with a ceding commission in an amount equal to such
Participating Company’s Pooling Percentage of actual commissions paid to agents
or brokers, premium taxes, guarantee fund assessments, fees and assessments for
boards, bureaus and associations, fees and assessments for industry and
residual markets, and other similar expenses incurred by the Participating
Companies on all premiums ceded hereunder but


 


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after deduction of ceding commissions or expense
reimbursement amounts recovered under Existing Reinsurance and Pool
Reinsurance.


 


ARTICLE
IX      Remittances and Reports


 


A.           
As soon as practicable consistent with its standard financial reporting
practices, but no later than thirty (30) days after the end of each calendar
month, CPIC shall submit a pooling report to TICNY and TNIC setting forth the
following information as regards the Specialty Program Business Pool:


 


1.            
Net Written Premium received during the month;


 


2.            
Net Premium Earned received during the month


 


3.            
Ceding commission thereon;


 


4.            
Losses and loss adjustment expenses paid during the month;


 


5.            
Salvage and subrogation recoveries received;


 


6.            
Recoverables under inuring reinsurance; and


 


7.            
Management Fees due.


 


B.           
The balance shown to be due a Participating Company shall be remitted within
fifteen (15) days after the issuance of the reports by CPIC on a collected
basis; provided that CPIC may retain, as manager, a reserve out of amounts
otherwise due TICNY and TNIC for the payment of amounts reasonably estimated by
CPIC to be payable during the next sixty (60) days by the Specialty Program
Business Pool and allocable to TICNY and TNIC hereunder. Such balance shall be
remitted in cash or in readily marketable securities (valued at fair market
value) in an amount equal to such balance. Should discrepancies arise in the
process of the verification of any report, such differences, once resolved,
should be remitted promptly.


 


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C.           
As soon as practicable consistent with its financial reporting practices, but
no later than thirty (30) days after the end of each calendar quarter, CPIC
shall report to TNIC and TICNY ceded unearned premium reserves and ceded
outstanding loss and loss adjustment expense reserves as regards the Specialty
Program Business as of the end of such quarter.


 


ARTICLE
X        Offset


 


Each of the Participating
Companies shall have and may exercise at any time, and from time to time, the
right to offset any balance or balances whether on account of premiums, losses
or amounts otherwise due from one Participating Company to the other under the
terms of this Pooling Agreement, subject to the provision of applicable law.


 


ARTICLE
XI      Errors and Omissions


 


Inadvertent delays, errors or omissions made in
connection with this Pooling Agreement or any transaction hereunder shall not
relieve any Participating Company from any liability that would have attached
had such delay, error or omission not occurred, provided always that such error
or omission will be rectified as soon as possible after discovery.


 


ARTICLE
XII     Access to Records


 


The files and records of each Participating Company
with respect to this Pooling Agreement and the Specialty Program Business
subject hereto shall be open to examination by any officer or director of each
of the other Participating Companies or their duly authorized representatives
during normal business hours.


 


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ARTICLE XIII   Term


 


A.           
This Pooling Agreement will become effective on the Effective Date. Either
Tower or CPIC may terminate their respective participation in the Specialty
Program Business Pool as of the date thirty six (36) months after the Effective
Date and thereafter as of the close of a calendar quarter by giving at least
six (6) months prior written notice to the other party by certified or
registered mail.


 


B.           
Tower shall have the right to terminate its participation in the Specialty
Program Business Pool at any time on or after twenty four (24) months after the
Effective Date and thereafter by giving sixty (60) days prior written notice by
certified or registered mail to CPIC if the sum of the cumulative Net Loss
Ratio for the Specialty Program Business Pool plus the Management Fee
Percentage (as defined in Article XIV) equals or exceeds 99 % for the period
from the Effective Date to the end of the calendar quarter immediately
preceding the date of such notice. If the Participating Companies cannot agree
as to the calculation of the Net Loss Ratio or Management Fee Percentage,
within 30 days of receiving the appropriate report, the calculation shall be
arbitrated. The actuarial firm of Towers Perrin shall furnish an arbiter for
Tower, and CPIC will choose another actuarial firm to furnish its arbiter.
Those two arbiters will select a third independent actuarial firm to furnish
the third arbiter.


 


C.           
This Pooling Agreement may be terminated with respect to new or renewal
business (a) at any time on or after thirty-six (36) months from the Effective
Date by mutual consent in writing by each of the Participating Companies or
(b) as of the close of a calendar quarter, upon not less than six (6)
months or sixty (60) days prior written notice, as the case may be, by a Participating
Company to the other Participating Companies of such Participating Company’s 


 


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exercise of its right to terminate its participation
in the Specialty Program Business Pool, as set forth in Paragraph A or B,
above, as the case may be.


 


D.         
If this Pooling Agreement is terminated pursuant to this Article XIII, all
rights and obligations of the Participating Companies with respect to Specialty
Program Business ceded pursuant to this Pooling Agreement prior to such
termination shall continue to be governed by the terms of this Pooling
Agreement.


 


ARTICLE XIV   Pool
Management


 


CPIC agrees to act as the
manager of the Specialty Program Business Pool and to provide management
services which shall include, but not be limited to, the following:


 


1.            
Marketing, underwriting and issuance of Policies;


 


2.            
Determining premium rates and other underwriting terms and conditions with
respect to the issuance of Policies;


 


3.            
Establishing commissions and fees to be paid to producers and/or brokers in
connection with the underwriting of Policies;


 


4.            
Establishing commissions and fees to be paid to service providers by or for the
account of the Specialty Program Business Pool;


 


5.            
Collecting premiums and other amounts due under Policies;


 


6.            
Adjusting settling, defending and paying claims under Policies;


 


7.            
Perform all administrative and policyholder services in connection with the
issuance of Policies;


 


8.            
Purchasing, managing and administering Existing Reinsurance and Pool
Reinsurance;


 


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9.            
Underwriting audit and control, product development and state filings;


 


10.         
Loss prevention/premium audit;


 


11.         
Information technology;


 


12.         
Accounting and cash management;


 


13.         
Human resources and other administrative functions; and


 


14.         
Appointing small third party insurers or their affiliates as Program
Underwriting Agents using Policies of any of the Participating Companies on the
condition that such small insurers participate as a reinsurer on the Specialty
Program Business they underwrite.


 


Expenses
incurred in connection with the foregoing services excluding loss adjustment
expense included in the Net Loss Ratio (the “Management Expenses”) shall be
shared between the Participating Companies based upon their respective Pooling
Percentages.


 


TICNY and TNIC shall pay
to CPIC management fees for the foregoing services (“Management Fees”) during
each calendar year of this Agreement (or part thereof) equal to (i) (A) the
management fee percentage for such year (as set forth below) (the “Management
Fee Percentage”) times (B) their respective Pooling Percentage of the gross
written premium of the Specialty Program Business for such year, net of return
premiums and net of ceded reinsurance premiums for Pool Reinsurance, less (ii)
their Pooling Percentage of (A) ceding commissions set forth in Article VIII
and (B) the shared Management Expenses as set forth above and less (iii) loss
adjustment expenses included in the Net Loss Ratio. The Management Fee
Percentage for the Specialty Program Business shall be 30% (which shall be
applied during each year as to premium written during such year) and be
adjusted based on Net Loss Ratio of the pooled business.


 


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The Management Fee
Percentage shall, on each six month anniversary of the Effective Date, increase
nine-tenths of a percentage point for every percentage point by which the Net
Loss Ratio is below 63% with a minimum Management Fee Percentage of 30% and a
maximum Management Fee Percentage of 36%, as follows:


 


	
  Net
  Loss Ratio

  	
   

  	
  Management
  Fee Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  63% or higher

  	
   

  	
  30.0

  	
  %

  
	
  62

  	
   

  	
  30.9

  	
   

  
	
  61

  	
   

  	
  31.8

  	
   

  
	
  60

  	
   

  	
  32.7

  	
   

  
	
  59

  	
   

  	
  33.6

  	
   

  
	
  58

  	
   

  	
  34.5

  	
   

  
	
  57

  	
   

  	
  35.4

  	
   

  
	
  56.33 or lower

  	
   

  	
  36.0

  	
   

  



 


Such Management Fee Percentage shall remain
provisional until all losses for a given year have been settled (or deemed
settled as set forth below). Within sixty (60) days following the end of each
year, CPIC shall calculate the Net Loss Ratio for each year that remains open
and shall forward copies of such calculations to TNIC and TICNY. The
Participating Companies will settle amounts due within ten (10) days
thereafter. The Net Loss Ratio for each year shall be deemed to be finalized
six (6) years following the close of such year or at any time before six (6)
years by mutual agreement of the Participating Companies. However, in
recognition that regulatory authorities may not approve an intercompany
transaction containing these management fees, the participating companies shall
use their best good faith effort to structure the transaction for the
Participating Companies in order that the sum of the Net Loss Ratio plus
Management Fees equals 93% for the Specialty Program Business.


 


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ARTICLE
XV     Amendments


 


This Pooling Agreement
may be amended only if in writing and signed by each Participating Company.


 


ARTICLE XVI   Adjustments
to Participation


 


CPIC may, in its sole
discretion, change the Pooling Percentages effective as of the date that is six
(6) months following the Effective Date and, from time to time, as of any six
(6) month anniversary of the Effective Date thereafter, upon not less ninety
(90) days prior written notice to TICNY and TNIC; provided, however, that the
Pooling Percentage of Tower shall at all times during the term of this Pooling
Agreement be a minimum of 15% and a maximum of 25%, and provided further,
however, that the total combined gross written premium share of TICNY and TNIC
assumed under this Pooling Agreement shall not exceed $25 million for the
twelve (12) month period ending on March 31, 2007, subject to a growth factor
of 25% per each twelve (12) month period thereafter. Each such change shall
apply to Policies issued or renewed after the effective date of such change.
Exhibit A shall be revised to reflect all such changes and the effective date
of each such change. If the maximum gross written premium after pooling is
attained in any twelve (12) month period ending March 31 as set forth herein,
then the Pooling Percentage, which shall apply to all premiums and losses on a
pro-rated basis for such period,  of Tower shall be decreased for that
twelve (12) month period, even if such Pooling Percentage is below 15%.


 


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ARTICLE XVII  Investments


 


The investments of the
Participating Companies and any income, gains or losses derived therefrom and
expenses related thereto, are not part of, nor are they subject to the terms
of, this Pooling Agreement.


 


ARTICLE
XVIII               
Insolvency


 


A.           
In the event of the insolvency or the appointment of a liquidator, receiver or
other statutory successor of a Participating Company, any amount due such
Participating Company as a ceding party shall be payable by the accepting party
on the basis of the liability of the ceding party under the Policies reinsured
without diminution because of the insolvency of the ceding party. Payments by
the accepting party shall be made directly to the ceding party or to the
liquidator, receiver or statutory successor, except (a) where any Policy
specifically provides another payee of such reinsurance in the event of the
insolvency of the ceding party, or (b) where the accepting party, with the
consent of the direct insured or insureds, has assumed such Policy obligations
of the ceding party as direct obligations of the accepting party to payees
under such Policies and in substitution for the obligations of the ceding party
to such payees.


 


B.           
The liquidator or receiver or statutory successor of the ceding party shall
give written notice to the accepting party of the pendency of any claim against
the insolvent ceding party on the Policies reinsured within a reasonable time
after such claim is filed in the insolvency proceeding. During the pendency of
such claim, the accepting party may investigate the claim and interpose in the
proceeding where the claim is to be adjudicated, at its own expense, any
defense or defenses which it may deem available to the ceding party or its
liquidator or receiver or statutory successor. The expenses thus incurred by
the accepting party shall be chargeable,


 


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subject to court approval, against the insolvent
ceding party solely as a result of the defense undertaken by the accepting
party.


 


ARTICLE XIX   Arbitration


 


A.           
As a condition precedent to any right of action hereunder, in the event of any
dispute or difference of opinion hereafter arising with respect to this Pooling
Agreement (except as set forth in Article XIII ), it is hereby mutually agreed
that such dispute or difference of opinion shall be submitted to arbitration.
One Arbiter shall be chosen by each Participating Company that is a party to
such dispute and an Umpire shall be chosen by the Arbiters before they enter
upon arbitration, all of whom shall be active or retired disinterested
executive officers of insurance or reinsurance companies or Underwriters at
Lloyd’s of London. In the event that a Participating Company should fail to
choose an Arbiter within thirty (30) days following a written request by
another Participating Company to do so, the requesting Participating Company’s
Arbiter shall choose a second arbiter before entering upon arbitration. If the
two arbitrators are unable to agree upon the third arbitrator within thirty
(30) days of their appointment, the third arbitrator shall be selected from a
list of six individuals (three named by each arbitrator) by a judge of the
United States District Court having jurisdiction over the geographical area in
which the arbitration is to take place, or if that court declines to act, the
state court having general jurisdiction in such area.


 


B.           
Participating Companies party to the dispute shall present their case to the
Arbiters within thirty (30) days following the date of appointment of the
Umpire. The Arbiters shall consider this Pooling Agreement as an honorable
engagement rather than merely as a legal obligation and they are relieved of
all judicial formalities and may abstain from following the


 


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strict rules of law. The decision
of the Arbiters shall be final and binding on all Participating Companies; but
failing to agree, they shall call in the Umpire and the decision of the
majority shall be final and binding upon all parties. Judgment upon the final
decision of the Arbiters may be entered in any court of competent jurisdiction.


 


C.           
Each Participating Company that is a party to the dispute shall bear the
expense of its own Arbiter, and shall jointly and equally bear with the other
the expense of the Umpire and of the arbitration. In the event that the two
Arbiters are chosen by the requesting Participating Company, as above provided,
the expense of the Arbiters, the Umpire and the arbitration shall be equally
divided between the Participating Companies that are parties to the
arbitration.


 


ARTICLE
XX     Miscellaneous Provisions


 


A.           
Headings used herein are not a part of this Pooling Agreement and shall not
affect the terms hereof.


 


B.           
All notices, requests, demands and other communications under this Pooling
Agreement must be in writing and will be deemed to have been duly given or made
as follows:  (a) if sent by registered or certified mail in the United
States return receipt requested, upon receipt; (b) if sent by reputable
overnight air courier, two business days after mailing; (c) if sent by
facsimile transmission, with a copy mailed on the same day in the manner
provided in (a) or (b) above, when transmitted and receipt is confirmed by
telephone; or (d) if otherwise actually personally delivered, when delivered.


 


C.           
This Pooling Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, permitted assigns and legal
representatives. Neither this 


 


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Pooling Agreement, nor any right or obligation
hereunder, may be assigned by any party without the prior written consent of
the other party hereto.


 


D.           
This Pooling Agreement may be executed by the parties hereto in any number of
counterparts, and by each of the parties hereto in separate counterparts, each
of which counterparts, when so executed and delivered, shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.


 


E.           
This Pooling Agreement will be construed, performed and enforced in accordance
with the laws of the State of New York without giving effect to its principles
or rules of conflict of laws thereof to the extent such principles or rules
would require or permit the application of the laws of another jurisdiction.


 


F.            
This Pooling Agreement constitutes the entire agreement between the parties
hereto relating to the subject matter hereof and supersedes all prior and
contemporaneous agreements, understandings, statements, representations and
warranties, negotiations and discussions, whether oral or written, of the
parties and there are no general or specific warranties, representations or
other agreements by or among the parties in connection with the entering into
of this Pooling Agreement or the subject matter hereof except as specifically
set forth or contemplated herein. If any provision of this Pooling Agreement is
held to be void or unenforceable, in whole or in part, (i) such holding
shall not affect the validity and enforceability of the remainder of this
Pooling Agreement, including any other provision, paragraph or subparagraph,
and (ii) the parties agree to attempt in good faith to reform such void or
unenforceable provision to the extent necessary to render such provision
enforceable and to carry out its original intent.


 


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G.           
No consent or waiver, express or implied, by any party to or of any breach or
default by any other party in the performance by such other party of its
obligations hereunder shall be deemed or construed to be a consent or waiver to
or of any other breach or default in the performance of obligations hereunder
by such other party hereunder. Failure on the part of any party to complain of
any act or failure to act of any other party or to declare any other party in
default, irrespective of how long such failure continues, shall not constitute
a waiver by such first party of any of its rights hereunder. The rights and
remedies provided are cumulative and are not exclusive of any rights or
remedies that any party may otherwise have at law or equity.


 


H.           
Except as expressly provided for in the insolvency provisions above, nothing in
this Pooling Agreement will confer any rights upon any person that is not a
party or a successor or permitted assignee of a party to this Pooling
Agreement.


 


I.            
Wherever the words “include,” “includes” or “including” are used in this
Pooling Agreement, they shall be deemed to be followed by the words “without
limitation.”


 


J.            
This Article XX shall survive the termination of this Pooling Agreement.


 


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IN
WITNESS WHEREOF,
the Participating Companies have caused this Pooling Agreement to be executed
as of the day and year first above written.


 


 


	
   

  	
  TOWER
  INSURANCE COMPANY OF NEW YORK

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TOWER
  NATIONAL INSURANCE COMPANY

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CASTLEPOINT
  INSURANCE COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


20

















 


EXHIBIT
A


 


POOLING
PERCENTAGES


 


The percentages of participation of
Net Liability of the Pooling Agreement to which this Exhibit A is attached
shall be as indicated below:


 


	
  Company

  	
   

  	
  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Tower

  	
   

  	
  15

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  CastlePoint Insurance
  Company

  	
   

  	
  85

  	
  %

  



 


21