EXHIBIT 10.3


 





CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED
FROM THE EXHIBIT BECAUSE IT IS BOTH NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED.


[***] INDICATES THAT INFORMATION HAS BEEN
REDACTED.


 


REINSURANCE TRUST AGREEMENT


(hereinafter referred to as the “Agreement”)


 


entered into by and among


 


Crusader Insurance Company


(hereinafter referred to as the “Grantor”)


and


 


United Specialty Insurance Company


(hereinafter referred to as the “Beneficiary”)


 


Held By


 


Comerica Bank & Trust, National Association


Trustee


(hereinafter referred to as the “Trustee”)


 


SECTION 1.PURPOSE OF AGREEMENT


 


1.1       The
Grantor has assumed all liabilities of Beneficiary arising from insurance business subject to that certain Quota Share Reinsurance
Agreement dated effective April 1, 2020, between the Grantor, Unifax Insurance Systems, Inc. (the “General Agent”)
and the Beneficiary (hereinafter referred to as the “Reinsurance Agreement”).


 


1.2       Grantor
desires to secure the payment of its liabilities and the performance of its Obligations Under The Reinsurance Agreement. Beneficiary
reserves the right to require deposits to secure the payment of Grantor’s liabilities and performance of its Obligations
Under (i) The Reinsurance Agreement, and (ii) that certain General Agency Agreement, both dated effective April 1, 2020, between
Grantor, General Agent and Beneficiary.


 


1.3       Grantor
desires to deliver to Trustee “Securities” (as defined in Section 4.1 hereof) to be held by Trustee as collateral and
security for the sole use and benefit of Beneficiary, which securities may hereinafter be referred to as the “Trust Account,”


 


SECTION 2.SECURITY GRANTED BY GRANTOR


 


2.1       Pursuant
to the terms hereof, the Grantor hereby obligates itself to deliver to and deposit with the Trustee Securities in accordance with
Section 3 hereof as collateral and security for the Grantor’s Obligations Under The Reinsurance Agreement including the obligations
for unearned premiums reserves, if any, and reserves for losses incurred but not reported and losses reported but unpaid. The Loss
Reserves shall include all allocated loss adjustment expenses and appropriate unallocated loss adjustment expenses. For purposes
of this Agreement, the following terms shall have the following meanings:


 


		(a)	“Unearned Premiums” means, as of any given date, the aggregate premium attributable
to the unexpired coverage period of all insurance policies produced under the Reinsurance Agreement, as determined in accordance
with generally accepted accounting principles consistently applied. For this purpose, premium shall be the written premium charged
on the insurance policy for the period such policy is in force irrespective of the subsequent billing and collection of such premium.



 


		(b)	“Loss Reserves” means, as of any given date, the reserve attributable to losses incurred
but not reported and losses reported but not paid with respect to the insurance policies produced under the Reinsurance Agreement,
and shall include provision for both allocated and unallocated loss adjustment expense, in each instance as determined in accordance
with generally accepted accounting principles consistently applied.



 


		(c)	“Obligations Under The Reinsurance Agreement” and “Obligations Of The Grantor
Under The Reinsurance Agreement,” for purposes of this Agreement, share the same meaning as set forth in the Quota Share
Reinsurance Agreement.



 


The Grantor hereby agrees that the
actuarial opinion of the Beneficiary’s internal actuary shall be controlling, in its sole discretion, as to the timing and
determination of the adequacy of loss reserves established for losses incurred and outstanding on business produced under the Reinsurance
and General Agency Agreements unless the Grantor requests that the Beneficiary engage on a semi-annual basis, at the expense of
the Grantor, an independent actuarial opinion, performed by MILLIMAN USA’s Dallas office, attesting to the adequacy of loss
reserves established for losses incurred and outstanding on business produced under the Reinsurance and General Agency Agreements.
If the Grantor requests hereunder the actuarial opinion of MILLIMAN USA’s Dallas office, the Grantor hereby agrees to post
the collateral required hereunder in accordance with the actuarial analysis of the Beneficiary’s internal actuary until an
analysis is completed by MILLIMAN USA’s Dallas office.  At such time, the Grantor shall post the collateral required
hereunder in accordance with the actuarial analysis of MILLIMAN USA’s Dallas office. However, if subsequent to the receipt
of the applicable independent actuarial opinion, the Beneficiary determines in its sole discretion that there has been a significant
change in the loss reserves as compared to the applicable independent actuarial opinion, the Beneficiary’s internal actuary
shall again be controlling, in its sole discretion, as to the timing and determination of the adequacy of loss reserves established
for losses incurred and outstanding on business produced under the Reinsurance and General Agency Agreements until the Beneficiary
again engages, at the expense of the Grantor, an independent actuarial opinion, performed by MILLIMAN USA’s Dallas office,
attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced under the Reinsurance
and General Agency Agreements. Additionally, if the actuarial opinion of the Beneficiary’s internal actuary is not available,
for any reason, the Beneficiary shall engage semi-annually, at the expense of the Grantor, an independent actuarial opinion, performed
by MILLIMAN USA’s Dallas office, attesting to the adequacy of loss reserves established for losses incurred and outstanding
on business produced under the Reinsurance and General Agency Agreements.


 


2.2       During
the term of this Agreement, Grantor hereby agrees that Trustee shall act for the benefit of Beneficiary in taking delivery and
possession of the said securities pursuant to Section 3 hereof and in holding such securities as collateral for the purposes expressed
herein for Beneficiary’s benefit, and Grantor hereby grants to Trustee all powers necessary and reasonable in the performance
hereunder.


 


2.3       The
existence of the Trust Account, as security for obligations of Grantor to Beneficiary, shall not affect Grantor’s Obligations
Under The Reinsurance Agreement, nor shall the securities of the Trust Account be used as a set off by Grantor for any obligations
to Beneficiary, except for Grantor’s right to withdraw securities from the Trust Account in accordance with Section 3 or
to receive any excess securities held by Beneficiary pursuant to Section 5.5.


 


SECTION 3.DEPOSITS TO AND INVESTMENT
OF SECURITY


		 	



3.1         
Within 10 business days of the effective date of this Agreement, and within 10 business days prior to the end of each calendar
quarter thereafter, Beneficiary shall provide Grantor with a good faith estimate of the expected sum of [***]% of the Beneficiary’s
ceded Unearned Premium and Loss Reserves as of the end of the forthcoming calendar quarter (the “Estimate”). Each time
(i) the Grantor’s A.M. Best rating or outlook is at any time reduced; or (ii) the Grantor’s A.M. Best rating or outlook
is at any time removed or withdrawn such that the Grantor is not rated or unrated by A.M. Best; or (iii) the Grantor’s capital
and policyholder surplus (or its equivalent) reduces [***]percent ([***]%) or more during any rolling twelve (12) month period
measured quarterly; or (iv) the Grantor fails to maintain its CAT XOL reinsurance with coverage up to [***] dollars ($[***]) with
a [***] dollars ($[***]) retention and its multiline XOL reinsurance with coverage up to [***] ($[***]) with a [***] dollars ($[***])
retention, each provided by the Reinsurer’s reinsurers existing as of the effective date of this Agreement, provided that
the Grantor may add reinsurers with a minimum surplus of at least [***] dollars ($[***]) and an “A” rating by A.M.
Best, the components of the Estimate shall increase by [***]% (i.e. the first time the Estimate shall increase to [***]% of the
Beneficiary’s ceded Unearned Premium and Loss Reserves as of the end of the forthcoming calendar quarter, the second time
the Estimate shall increase to [***]% of the Beneficiary’s ceded Unearned Premium and Loss Reserves as of the end of the
forthcoming calendar quarter, etc.). The Grantor shall, within two business days prior to the commencement of such forthcoming
calendar quarter, fund the Reinsurance Trust in an amount equivalent to [***]% of the Estimate.


 


3.2       The
Grantor shall be entitled at any time to withdraw Securities from the Trust Account if concurrently therewith Securities (as defined
in Section 4.1 hereof) of equal or greater market value are deposited in the Trust Account, and the Trustee is authorized to permit
such substitution of Securities upon receipt of the Beneficiary’s written approval, which shall not be unreasonably withheld.


 


3.3       All
securities deposited by the Grantor (i) shall be free and clear of all encumbrances, and (ii) shall be fully negotiable or in such
form that Trustee may sell, transfer or otherwise deposit the same without any additional signature or agreement from Grantor.


 


SECTION 4.SECURITIES


 


4.1       The
term “Securities” as used herein is defined as any combination of (a) cash, or deposits held, or negotiable certificates
of deposit issued by an institution that is (i) organized or licensed under the laws of the United States or any state thereof,
(ii) is regulated, supervised and examined by U.S. federal or state authorities having regulatory authority over banks and trust
companies, and (iii) appears on the most recently issued list of approved banks published by the Securities Valuation Office of
the National Association of Insurance Commissioners, (b) United States Government issued or guaranteed bonds, bills or notes, or
(c) any other bonds with a Standard & Poor’s or Moody’s quality rating of “A” or better. All securities
and assets held in the Trust Account shall be readily marketable over a national exchange and shall be listed by the Securities
Valuation Office of the National Association of Insurance Commissioners with designations of “1-Highest Quality”. All
securities and assets held in the Trust Account shall be of the type required by the applicable laws or regulations. All such securities
shall be in conformance with the investment requirements described in the applicable laws or regulations.


 


4.2       For
purposes of this Agreement, the market value of the Securities shall be determined as follows: (a) at the time any Securities are
deposited initially with the Trustee, and as respects Securities on deposit at the end of each calendar month, the Trustee shall
in good faith place a tentative market value on the Securities and shall notify the Beneficiary of such valuation by supplement
to the Trustee’s monthly activities report; provided pursuant to Section 8.6; (b) if the Beneficiary disagrees with such
tentative market valuation, it may so notify the Trustee within 30 days after the date it receives the Trustee’s monthly
activities report and the Trustee’s supplement thereto (Beneficiary’s failure to so notify the Trustee within such
30 day period shall signify that Beneficiary agrees with such tentative market value); (c) in the event the parties cannot resolve
any difference with respect to the market value of the Securities, the market value of the security in dispute shall be determined
by the Securities Valuation Office of the National Association of Insurance Commissioners; and (d) With respect to securities on
deposit at the end of each calendar month, the Trustee shall value the securities by utilizing various standard industry pricing
services and brokerage contacts to provide current pricing information for active publicly traded securities.  The Trustee
shall attempt to provide a reasonably accurate current market value for assets not publicly traded.  Many fixed income securities
are priced on a matrix system, resulting in a mathematical approximation of price derived by computer.  Although the Trustee
will make reasonable and good faith efforts to provide accurate pricing, in some instances prices may not reflect the most accurate
pricing readily available or the true value of the asset.  The Trustee shall have no liability for such an occurrence.


 


SECTION 5.BENEFICIARY’S CLAIM ON
THE TRUST ACCOUNT


 


5.1       The
Beneficiary shall have the right to withdraw securities from the Trust Account, without diminution because of the insolvency of
the Grantor, for the purposes and to the extent specified in Sections 5.2 and 5.3 below, with written notice from the Beneficiary
to the Trustee given in accordance with Section 8.1 of this Agreement. Upon such written notice by the Beneficiary, the Trustee
shall immediately take any and all steps necessary to transfer to the Beneficiary absolute and unequivocal right, title and interest
in the requested securities and assets in the Trust Account and to deliver such securities and assets to the Beneficiary and Beneficiary
shall acknowledge to the Trustee receipt of such withdrawn securities and assets. Any dispute between Grantor and Beneficiary regarding
Beneficiary’s claim on the Trust Account shall be resolved by arbitration pursuant to Section 12. Trustee shall strictly
comply with its instructions hereunder without resorting to interpleader. Beneficiary will hold Trustee harmless if acting upon
Beneficiary’s instructions hereunder.


 


5.2 The Beneficiary has the right
to withdraw assets from the Trust Account at any time, without notice to the Grantor, subject only to written notice from the Beneficiary
to the Trustee, the Trustee having no responsibility for such withdrawal, in accordance with the terms of this Agreement. No statement
or document, other than written notice from the Beneficiary to the Trustee, shall be accepted to withdraw assets. The Beneficiary
hereby covenants to the Grantor that it shall use and apply any withdrawn assets, without diminution because of the insolvency
of the Beneficiary or the Grantor, for the following purposes only:


 


		(a)	to pay or reimburse the Beneficiary for the Grantor’s share
under the Reinsurance Agreement regarding any losses and allocated loss expenses paid by the Beneficiary but not recovered from
the Grantor, or for unearned premiums due to the Beneficiary, if not otherwise paid by the Grantor;



 


		(b)	to make payment to the Grantor of any amounts held in the Trust
Account that exceed 102% of the actual amount required to fund the Grantor’s entire Obligations Under The Reinsurance Agreement.
Trustee has no responsibility to determine whether the value of Assets exceeds 102%and may rely on the statement or notice from
Beneficiary certifying as such; or



 


		(c)	where the Beneficiary has received notification of termination of the Trust Account pursuant to
Section 11 of this agreement, and where the Grantor’s entire Obligations Under The Reinsurance Agreement remain unliquidated
and undischarged 10 days prior to the termination date, to withdraw amounts equal to 102% of such obligations and deposit such
amounts in a separate account, in the name of the Beneficiary, in any qualified United States financial institution, apart from
its general assets, in trust for the uses and purposes specified in subparagraphs (a) and (b) of this Section as may remain executory
after such withdrawal and for any period after such termination date.



 


5.3         
In the event the Beneficiary takes control of the securities pursuant to Section 5.2, such securities shall be maintained
by the Beneficiary for the purpose of securing the Obligations Under The Reinsurance Agreement, and otherwise securing the Beneficiary
under the terms of this Agreement, in the manners provided in subsection (a) or (b) of this subsection 5.3 only:


 


		(a)	such securities shall be held by the Beneficiary as an asset and maintained, on the books and records
of the Beneficiary, in an identifiable manner as “Funds Held By the Beneficiary Under the Quota Share Reinsurance Treaty”
(hereinafter referred to as “Funds Held”), to use and disburse the Funds Held for purposes described in Section 5.4.
An amount equal to the market value of the Funds Held shall be carried by the Beneficiary as a liability under its financial statement
denominated “Funds Held by Beneficiary Under Reinsurance Treaties,” and all amounts paid out of such Funds Held by
the Beneficiary shall reduce the liability of the Grantor. Any securities in excess of the amount required to pay or reimburse
Beneficiary for the purposes described herein shall be returned to Grantor, its successor or legal representative, upon the conclusion
of all further Obligations Of Grantor Under The Reinsurance Agreement.



 


		(b)	Such Securities shall be deposited in a New York Insurance Regulation 114 trust (“114 Trust”)
for the benefit of the Beneficiary, provided the Grantor's approval is not required for the Beneficiary to use and disburse funds
held in such trust for purposes described in Section 5.4.



 


5.4       The
Beneficiary may disburse amounts from the Funds Held or 114 Trust assets for the payment of losses and refunds through the Reinsurance
Agreement pursuant to the terms of its General Agency Agreement with the Beneficiary, or to any successor appointed by the Beneficiary
to act as general agent in connection with the business subject to the Reinsurance Agreement. Also, the Beneficiary may use such
Funds Held or 114 Trust assets to reimburse itself for any amounts the Grantor is obligated under the Reinsurance Agreement, including,
but not be limited to, any losses paid, and unearned premiums refunded by the Beneficiary, and for actual costs of administration
incurred by the Beneficiary in the event the Beneficiary is required to assume control of the servicing and claims handling of
the business subject to the Reinsurance Agreement.


 


5.5       In
the event the Beneficiary takes control of the securities pursuant to Section 5.3, the Grantor shall remain obligated for amounts
due under the Reinsurance Agreement and shall be obligated to maintain, in the Funds Held by Beneficiary or 114 Trust, a value
at least equal to the Unearned Premium and Loss Reserves in accordance with Section 3.1. The Grantor’s rights and obligations
to withdraw and deposit securities from the Funds Held shall be the same as when the securities were held in the Trust Account
by the Trustee as provided in Section 3.


 


SECTION 6.INTEREST, DIVIDENDS AND EXPENSES


 


6.1       Any
interest, dividends or other investment income generated from the securities held by Trustee shall remain in the Trust Account,
subject, however, to Grantor’s right to withdraw assets from the Trust Account in accordance with Sections 3.2 and 3.3. Grantor
shall be liable for reporting and paying any income taxes arising therefrom.


 


6.2       Also,
Grantor will receive the benefit of the interest, dividends or other investment income generated from any securities taken and
held by the Beneficiary pursuant to Section 5.3.


 


6.3       All
fees and expenses charged by the Trustee for its services under the terms of this Agreement shall be paid by the Grantor. The Grantor
shall pay or reimburse the Trustee for all of the Trustee’s expenses and disbursements in connection with its duties under
this Agreement (including reasonable attorney's fees and expenses), except any such expense or disbursement as may arise from the
Trustee‘s negligence, willful misconduct, or lack of good faith. The Trustee shall be entitled to deduct its compensation
and expenses from the aggregate market value of the Trust Account should it be over the amount required in Section 3.1, subject
to the Beneficiary's prior written approval which shall not be unreasonably withheld, except that such compensation shall not be
greater than 1.0% of the corpus per annum. The Grantor and the Beneficiary jointly and severally hereby indemnify the Trustee for,
and holds it harmless against, any loss, liability, costs or expenses (including reasonable attorney's fees and expenses) incurred
or made without negligence, willful misconduct or lack of good faith on the part of the Trustee, arising out of or in connection
with the performance of its obligations in accordance with the provisions of this Agreement, including any loss, liability, costs
or expenses arising out of or in connection with the status of the Trustee and its nominee as the holder of record of the Securities
in the Trust Account. The Grantor and the Beneficiary hereby acknowledges that the foregoing indemnities shall survive the resignation
or discharge of the Trustee or the termination of this Agreement and hereby grants the Trustee a lien, right of set-off and security
interest in the portion of the aggregate market value of the Trust Account that is over the amount required in Section 3.1 for
the payment of any claim for compensation, reimbursement or indemnity hereunder.


 


SECTION 7. SECURITY INTEREST


 


7.1       The
Grantor and Beneficiary acknowledge and agree that the Assets held by the Trustee in the Trust Account hereunder have been deposited
in said Trust Account for the sole benefit of the Beneficiary and pledged by the Grantor to the Beneficiary as security for the
Grantor’s Obligations Under The Reinsurance Agreement. In furtherance of the foregoing, the Grantor hereby pledges with,
assigns to, and grants the Beneficiary a continuing first security interest in, and a lien upon the Trust Account, all Assets (and
after-acquired proceeds of all Assets) in the Trust Account, all financial assets and cash from time to time credited thereto and
all security entitlements in respect thereof pursuant to the Uniform Commercial Code as in effect from time to time in the State
of Texas (the "UCC"). The Grantor and Beneficiary are entering into this Trust to perfect the deposit of the Trust Account
Assets for the sole benefit of the Beneficiary, as well as the security interest in and lien on such collateral. Trustee acknowledges
that a security interest has been granted by the Grantor to the Beneficiary in the Trust Account and the Assets held therein. Except
as otherwise expressly stated herein, the terms defined in the UCC have the same meanings herein. In addition to whatever other
rights and remedies the Beneficiary may have thereunder, the Beneficiary shall also have all rights and remedies of an Entitlement
Holder under the UCC. Subject to the terms and conditions of this Agreement, the Trustee agrees to comply with any timely entitlement
order originated by the Beneficiary and relating to cash, financial asset credited thereto or any other Assets in the Trust Account
without further consent by the Grantor or any other person.


 


7.2       To
the extent that securities (as defined by the UCC) are deposited in the Trust Account, the parties hereto agree that (i) the Trust
Account shall be deemed a securities account; (ii) the Trustee is a securities intermediary with respect to the Trust Account;
(iii) the Trustee shall, subject to the terms of this Agreement, treat the Beneficiary as the entitlement holder with respect to
the Trust, entitled to exercise the rights that comprise all financial assets from time to time credited to the Trust Account;
(iv) each item of property (whether Securities, investment property, security, instrument, or other property, but not cash which
shall not be a financial asset for the purposes of this Agreement) credited to the Trust Account shall be treated as a financial
asset; and (v) the State of New York shall be deemed to be the securities intermediary’s jurisdiction for purposes of the
UCC.


 


7.3       The
Trustee waives, except as set forth in Section 6.3, any security interest, lien, or right to make deductions or setoffs that it
may now have or hereafter acquire in or with respect to the Trust, any financial asset credited thereto or any security entitlement
in respect thereof. Neither the financial assets credited to the Trust nor the security entitlements in respect thereof will be
subject to deduction, set-off, banker’s lien, or any other right in favor of any person other than the Beneficiary.


 


7.4       The
Trustee has not entered into, and until the termination of this Agreement will not enter into, any agreement with any person (other
than the Beneficiary and Grantor) relating to the Trust Account and/or any financial asset credited thereto pursuant to which it
has agreed, or will agree, to comply with entitlement orders of such person. The Trustee has not entered into any other agreement
with the Beneficiary or the Grantor purporting to limit or condition the obligation of the Trustee to comply with entitlement orders
as agreed above.


 


7.5       Except
for the claims and interests of the Beneficiary and the Grantor, the person executing this Agreement on behalf of the Trustee does
not know of any claim to, or interest in, the Trust Account, any financial asset credited thereto or any security entitlement in
respect thereof. If any person asserts any lien, encumbrance or adverse claim (including any writ, garnishment, judgment, attachment,
execution or similar process) against the Trust Account, any financial asset credited thereto or any security entitlement in respect
thereof, the Trustee will promptly notify the Beneficiary and the Grantor in writing thereof.


 


7.6       In
the event of any conflict between the duties and responsibilities of the Trustee under this Section 7 and the duties and responsibilities
of the Trustee under the other Sections of this Agreement, the duties and responsibilities under this Section 7 shall govern and
control.


 


 


SECTION 8.TRUSTEE’S AGREEMENT


 


8.1       The
Trustee agrees to hold and disburse the Trust Account in accordance with the provisions expressed herein. Trustee shall disburse
securities to the Beneficiary upon receipt of a duly executed and completed Affidavit by Beneficiary in accordance with the form
attached hereto as Exhibit “A”. Trustee is authorized and directed by both parties to act upon such instructions in
compliance herewith without inquiry as to the accuracy of the facts and statements made in any such affidavit and without regard
to protest by any party; provided, however, Trustee would not be expected to act contrary to any court order or any arbitration
directive pursuant to Section 12, supported by the affidavit of two of the three arbitrators.


 


8.2       The
Trust Account shall be (i) in the possession of Trustee at its offices in Detroit, Michigan, (ii) kept separate and apart from
any assets of the Trustee and any other securities held by the Trustee for whomever and for whatsoever purpose, (iii) clearly identifiable
as securities subject to this Agreement at all times while in the possession of the Trustee, and (iv) in such form that the Beneficiary
or the Trustee upon the direction of the Beneficiary may, whenever necessary, negotiate any securities in the Trust Account, without
the consent or signature from the Grantor or any other person or entity.


 


8.3       The
Trustee shall not deposit any securities of the Trust Account with correspondent banks, investment bankers, brokers or any other
third-party nor shall such securities be pledged or hypothecated by the Trustee in any manner nor shall such securities be used
by the Trustee in any manner for the benefit of the Trustee.


 


8.4       The
Trustee shall on request of the Beneficiary, or the Grantor certify in writing the securities held by the Trustee for the Beneficiary.
That certification shall include the name of the issuer of each security, the class of security, the “CUSIP” number
of each security, the number of shares of units, and the face amounts of such securities.


 


8.5       The
Trustee shall fully and completely respond to any direct inquiries of any duly authorized insurance regulatory agency of any state
concerning the Trust Account, including, but not limited to detailed inventories of securities or funds, and the Trustee will permit
the representative of any such regulatory agency to examine and audit all securities or funds held hereunder.


 


8.6       The
Trustee agrees to provide copies of monthly activities reports to the Beneficiary and the Grantor as soon as possible following
the end of each month, which reports shall show all deposits, withdrawals, substitutions and a listing of securities in the Trust
Account as of the end of the month. If neither the Grantor, nor the Beneficiary files with the Trustee written objection to any
such report within 60 days of receipt, the Grantor and Beneficiary shall be deemed to have approved such report, and the Trustee
shall be released and discharged with respect to all matters set forth in such report as though the same had been judicially settled.
The Trustee agrees to notify the Grantor and the Beneficiary within 10 days of any deposits to, or withdrawals from the Trust Account.
The Grantor and Beneficiary agree that such notice shall be provided by access to Trust Account information via Comerica Trust
Online or another transmission method selected by the Trustee and communicated to the Grantor and Beneficiary by the Trustee.


 


8.7       The
Trustee hereby waives any right of offset and all other rights and remedies against or affecting the Trust Account.


 


8.8       The
Trustee may at any time resign from, and terminate its capacity hereunder by written notice of resignation, effective not less
than 90 days after receipt by both the Beneficiary and the Grantor. However, no such resignation by the Trustee shall be effective
until a successor to the Trustee shall have been duly appointed as provided in this Agreement and all the securities and assets
in the Trust Account have been duly transferred to such successor. The Beneficiary, upon receipt of such notice, shall undertake
to obtain the agreement of a qualified, successor depository, agreeable to the Grantor, to act in accordance with all agreements
of the Trustee herein. A qualified depository shall be any United States financial institution member of the Federal Reserve System.
Grantor agrees not to unreasonably withhold approval if the depository so chosen has capital and surplus of at least $100,000,000.
Upon the Trustee’s delivery of the Trust Account to the qualified, successor depository, along with a closing statement showing
all activities (as contemplated in Section 8.6) from the last monthly report, the Trustee shall be discharged of further responsibilities
hereunder.


 


SECTION 9.TRUSTEE’S RESPONSIBILITY


 


9.1       The
Trustee shall in no way be responsible for determining the amount of securities required to be deposited by the Grantor or monitoring
whether or not the securities conform to investment requirements.


 


9.2       The
Trustee is not a party to, and is not bound by or charged with notice of the Reinsurance Agreement or any other agreement out of
which this Agreement may arise.


 


9.3       The
Trustee is not responsible or liable in any manner whatsoever for the sufficiency, correctness, genuineness or validity of the
subject matter of this Agreement or any part thereof, or for the form or execution thereof, for the identity or authority of any
person executing or depositing it.


 


9.4       The
Trustee shall be protected in acting upon any written notice, request, affidavit, waiver, consent, certificate, receipt, authorization,
power of attorney or other paper or document which the Trustee in good faith believes to be genuine and that purports to be from
the Beneficiary or the Grantor.


 


9.5       The
Trustee shall be indemnified and not held liable for anything which it may do or refrain from doing in connection herewith, except
its own negligence, willful misconduct, lack of good faith, or breach of fiduciary duty. Trustee shall further be indemnified and
not held liable for transferring the Trust assets to another institution, when jointly directed to do so by the Grantor and the
Beneficiary.


 


9.6       Notwithstanding
anything else contained herein to the contrary, the Trustee acknowledges liability for any certificates lost due to theft or any
error or omission or other comparable act of the Trustee, or authorized representative thereof, and Trustee agrees that it shall
maintain fidelity or other insurance coverage applicable to such liability which shall be in addition to the full faith and credit
of the Trustee therefor.


 


SECTION 10.ACCESS TO RECORDS


 


10.1       The
Beneficiary and the Grantor shall have the right at any reasonable time to examine all papers in the possession of each other,
or with the Trustee, applicable to this Agreement and the Trust Account deposited and maintained hereunder.


 


SECTION 11.TERMINATION


 


11.1       Termination
of this Agreement shall only occur upon at least thirty (30) days written notice via certified mail from the Trustee to the Beneficiary
and Reinsurance Division of the Texas State Board of Insurance located at 333 Guadalupe Street Austin TX 78701, and the Trustee
shall release and deliver to the Grantor all securities held pursuant to this Agreement upon receipt by the Trustee of written
notice from the Beneficiary that the Grantor’s Obligations Under The Reinsurance Agreement for Unearned Premium and Loss
Reserves have been discharged, including obligations for the “run-off” of any business subject to the Reinsurance Agreement.


 


11.2       The
termination of the Reinsurance Agreement shall not terminate this Agreement, but Grantor shall continue to pay claims under the
terms of the Reinsurance Agreement as if there were no security provided under this Agreement, subject, however, to Grantor’s
right to withdraw securities from the Trust Account in accordance with Section 3, or to receive any excess securities held by Beneficiary
pursuant to Section 5.5.


 


SECTION 12.ARBITRATION


 


12.1       It
is agreed between Beneficiary and Grantor that any disagreement between such parties regarding the construction, application, or
implementation of this Agreement may be submitted to arbitration pursuant to arbitration provisions contained in the Reinsurance
Agreement. However, questions arising out of Section 3 or Section 5 require an expedited resolution pursuant to these provisions.


 


12.2       The
party invoking arbitration with respect to Section 3 or Section 5 shall notify the other party and shall provide the name of its
designated arbitrator at that time. The second party shall have 15 days from receipt of notice to designate its arbitrator, who
shall contact the first arbitrator to select a third arbitrator. Both arbitrators shall use their best efforts to obtain a third
arbitrator within 30 days. Once chosen, the three arbitrators should expeditiously resolve the issues presented by the parties.
If the party receiving notice of intent to arbitrate does not provide notice of its arbitrator within the 15 day period required,
such party shall be deemed to have waived its right to designate the second arbitrator and the arbitrator first designated shall
designate the second arbitrator. The arbitrators shall be disinterested, active or retired officers of property and casualty insurance
companies. The arbitration provisions of the Reinsurance Agreement may be referred to for guidance as to matters not specifically
provided herein.


 


12.3       The
Beneficiary and the Grantor agree to be bound by the final or any interim findings and directives of the arbitrators, including
the immediate deposit or return of securities or assets to the Trust Account if so directed.


 


SECTION 13.CONSTRUCTION AND EFFECT


 


13.1       This
Agreement and all proceedings pursuant hereto shall be governed by the laws of the State of Texas.


 


13.2       This
Agreement shall be binding upon and shall inure to the benefit of the parties hereto, their successors and assigns.


 


13.3(a)In the event of the
failure of the Grantor to perform its Obligations Under The Reinsurance Agreement or the terms of this Agreement, Grantor, at the
request of the Beneficiary, shall submit to the jurisdiction of any court of competent jurisdiction in any State of the United
States, will comply with all requirements necessary to give such court jurisdiction, and will abide by the final decision of such
court or of any Appellate Court in the event of an appeal.


(b)       The
parties, after consulting (or having had the opportunity to consult) with counsel of their choice, each knowingly and voluntarily
waives its right to trial by jury in any action, proceeding or counterclaim brought by any of the parties hereto against another
party on any matters whatsoever arising out of or in any way connected with this Agreement. 


 


13.4       The
Grantor shall be deemed to have designated the State Board of Insurance in any state in which business is produced, or a designated
attorney, as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted
by or on behalf of the Beneficiary. This provision, however, is not intended to conflict with or override the obligation of the
parties to arbitrate their disputes.


 


13.5       This
Agreement is not subject to any conditions or qualifications outside of this Agreement and is not conditioned upon any other agreements
or documents.


 


SECTION 14.NOTICES


 


14.1       Unless
otherwise specifically provided herein, every notice required or permitted to be given under this Agreement shall be given in writing
to an officer of the party to whom it is directed by actual delivery to the address, or by telecopy message to the number, as follows:


 


Grantor:


 


Crusader Insurance Company


Attn: Michael Budnitsky


26050 Mureau Road


Calabasa, CA 91302-3171


 


Beneficiary:


 


United Specialty
Insurance Company


1900 L. Don Dodson Drive


Bedford, Texas 76021


 


Trustee:


Comerica Bank & Trust, N.A.


411 West Lafayette Boulevard


Detroit, MI 48226


Attn: Sandy Truman-Swayne,
MC 3462


 


Any party to this Agreement may change
the address and telecopy number above set out by giving the other parties notice of such change in the manner specified for notice
in this Agreement.


 


SECTION 15.EFFECTIVE DATE


 


15.1       This
Agreement shall be effective April 1, 2020.


 


 


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left blank. Signatures appear on next page.]




    	 



    	 



    

 


IN WITNESS WHEREOF, the
parties hereto by their respective duly authorized officers have executed this Agreement.


 


BENEFICIARY


UNITED SPECIALTY INSURANCE COMPANY


 


 


By: /s/ David Cleff


Its: EVP


Date:4-3-2020


 


 


GRANTOR


CRUSADER INSURANCE COMPANY


 


 


By: /s/ Cary L. Cheldin


Its: President


Date:4-1-20


 


 


Trustee


Comerica
Bank & Trust, National Association


 


 


By: /s/ Sandra Swayne


Its: Vice President


Date:April 6, 2020


 


 


 




    	 



    	 



    

EXHIBIT A


 


CERTIFICATION OF WITHDRAWAL OF SECURITIES


 


 


Reference is made to that
certain Reinsurance Trust Agreement dated effective April 1, 2020, by and among Crusader Insurance Company, as “Grantor,”
United Specialty Insurance Company, as “Beneficiary,” and Comerica Bank & Trust, National Association, as “Trustee”
(the “Agreement”). Section 5 of the Agreement sets forth circumstances under which the Beneficiary may withdraw securities
from the Trust Account. Beneficiary hereby certifies to Trustee, pursuant to Section 8 of the Agreement that the following event
has occurred which entitles Beneficiary to withdraw securities from the Trust Account:


 


.


 


Capitalized terms used herein
and not otherwise defined shall have the respective meanings ascribed to such terms in the Agreement.


 


 


Dated: UNITED
SPECIALTY INSURANCE COMPANY


 


 


 


By:


Its:


 


 


THE STATE OF TEXAS§


§


COUNTY OF TARRANT§


 


I, , a Notary Public, do hereby
certify that on this the  day of  , 20__, personally appeared before me , who declared that he
is  of the corporation executing the foregoing instrument, and being by me first duly sworn, acknowledged that he signed
the foregoing document in the capacity therein set forth and declared that the statements therein contained are true.


 


IN WITNESS WHEREOF, I hereunder set my hand
and seal of office, the date and year before written.


 


 


 


Notary Public in and


for the State of Texas


 


My Commission expires: 


 




    	 



    	 



    

Comerica Bank


New Account Client Questionnaire


 


 


	 


Account Name:


 


 


	 


Anticipated Conversion Date:


 


 


		A.	Due Diligence Questions:



 


		q	Please state the nature of your business:



	 
	 


 


 


		q	What is the primary geographic market area where you conduct business?



	 


 


 


	 


		q	Please provide your Taxpayer Identification Number:



 


 


		q	Please provide the following documents (those that apply):



		-	Certified Articles of Incorporation



		-	IRS Letter regarding tax-exempt status



		-	Trust Agreement



		-	Government issued business license



		-	Partnership Agreement



		-	Financial Statements and/or Annual Reports



		-	IRS Form W-9



 


	 


		q	Where will the assets/funds be coming from?



 


	 


		q	What will be the market value of the initial funding?



 


	 


		q	If frequent deposits will be made, what do you anticipate the market value to be after 12 months?



 


 


		q	Are there third party deposits into or withdrawals from the account (e.g., checks, wire transfers, etc.)?



	Yes	 	No	 


 


 


		q	Will the account be sending wire transfers to and/or receiving wire transfers from a foreign entity? 



	Yes	 	No	 


 


 


 


 


		B.	Captive Insurance Accounts Only



 


	 


		q	Account Domicile



 


 


	 


		q	What is the captive structure?



 


 


	 


		q	Name of Parent Company (if applicable) 



 


 


		q	Has the company taken a 953(d) election? 



	Yes	 	No	 


 


 


If yes, please provide a copy of
the IRS approval letter


If no, please provide an IRS Form W-8BEN


 


	 


		q	Captive Manager



 


	 


		q	Contact Name 



	 


 


		q  Phone Number	



	 


 


		q	E-mail Address



 


		q	Is the account a Reinsurance Trust? 



	Yes	 	No	 


 


 


If yes, please provide contact details
for the beneficiary:


 


 


	 


Firm Name


 


	 


Contact Name 


 


	 


Phone Number


	 


 


E-mail Address


 


 


 


 


 


 


 


 


 


 


 


		C.	Account Set-Up Questions (for all accounts):



 


		q	Who should receive statements?



 


	 


Name:


 


	 


Address: 


	 


 


 


 


	 	Monthly	 	Quarterly	 	Annually


How Often:


 


 


	 


 


Name:


 


	 


Address: 


	 


 


 


 


	 	Monthly	 	Quarterly	 	Annually


How Often:


 


 


	 


		q	Do you need a consolidated statement to combine all accounts?



 


 


		q	Do you require paper copies of statements mailed to you or will you be retrieving statements from Custody On-line?



	 	Mail paper statements
	 	Custody On-line will be utilized for statement retrieval


 


 


 


 


		q	Please provide the following information for the individual at your current custodian who will be handling the transfer of
assets to Comerica (if applicable).



	 


 


Contact Name 


 


	 


Firm Name


 


	 


Phone Number 


 


	 


Fax Number


	 


 


E-mail Address


 


 


 


 


 


		q	Please provide the following information for the main contact at your organization (individual who will handle day to day issues).



 


	 


Name 


 


	 


Phone Number 


	 


 


Fax Number


	 


 


E-mail Address


 


 


 


		q	Cash Accounting



	 	Dual Cash Accounting (principal and income cash separated)
	 	Single Cash Accounting (principal and income cash combined)


 


 


 


 


 


		q	If cost basis and tax acquisition dates will be supplied to us by someone other than the current custodian, please provide
the details:



	 


 


 


		q	What write-down method should be used on your account for sale transactions?



	 


(i.e., LIFO, FIFO, Average, etc.)
NOTE: The default option is FIFO


 


 


	 


		q	Is amortization/accretion reporting required?



If yes, using which method: 


	 	Constant Yield (default option)
	 	Straight Line


 


 


 


 


 


	 


		q	What is the Fiscal Year End? 



 


 


		q	If your account holds mutual funds, please specify your preferred method for income and capital gains distributions:



 


	Dividends	 	Cash
	 	 	Reinvest
	 	 	 
	Capital Gains	 	Cash
	 	 	Reinvest


 


 


		q	Select party responsible for proxy voting (usually determined by agreement or contract with investment management firm):



	 	Client
	 	Appointed Investment Manager
	 	Comerica
	 	Other


 


 


 


		q	If applicable, please provide contact information for outside Investment Managers



 


	 


Contact Name 


	 


 


Firm Name


 


	 


Phone Number


 


	 


E-mail Address


 


 


		q	Please provide any special reporting requirements



	 
	 
	 
	 
	 


 


		D.	Other 



 


		q	Will Comerica be maintaining records for outside collective funds or other investments that will not be held at one of Comerica’s
depositories? If so, please provide the details:



	 
	 
	 


 


		q	If applicable, please provide contact information for your investment consultant, actuary or other service providers we may
work with in servicing your account:



 


	 


Contact Name 


	 


 


Firm Name


 


	 


Phone Number


 


	 


E-mail Address


 


 


 


 





	 


Contact Name 


	 


 


Firm Name


 


	 


Phone Number


 


	 


E-mail Address


 


 


 


 


		q	We direct charge the account for our services on a quarterly basis. Please provide the name and address of the person to receive
a copy of our invoice:



 


	 


Name:


 


	 


Address: 


	 


 


 


 


	   
	
         

         



 


Client Signature:


 


Date Signed: