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TERRORISM CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT
 EFFECTIVE MARCH 1, 2007
  PHILADELPHIA INSURANCE COMPANY   PHILADELPHIA INDEMNITY INSURANCE COMPANY
 BALA CYNWYD, PENNSYLVANIA, USA
   THE UNDERWRITERS AT LLOYDS




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R.C. TOWNSEND
 SEVERAL LIABILITY NOTICE
   BUREAU REFERENCE 61797 31/05/07
    
    
    
    BROKER NUMBER 0868PROPORTION
    
    SYNDICATE
    
    UNDERWRITERS%
    
    
    
    REFERENCE50.00
    
    2003
    
    NP800013773620.00
    
    2791
    
    J1107GG0319310.00
    
    2987
    
    FC881QO7A000TOTAL LINE
    
    No. OF SYNDICATES80.00
    
    3THE LIST OF UNDERWRITING MEMBERSOF LLOYDS IS IN RESPECT OF 2007YEAR OF ACCOUNT




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th
 PHILADELPHIA INSURANCE COMPANY
And
PHILADELPHIA INDEMNITY INSURANCE COMPANYBY:
    /s/ CHRISTOPHER MAGUIRETITLE: EXECUTIVE VICE PRESIDENT AND
          CHIEF
UNDERWRITING OFFICER TERRORISM CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT
 EFFECTIVE MARCH 1, 2007
  PHILADELPHIA INSURANCE COMPANY   PHILADELPHIA INDEMNITY INSURANCE COMPANY
 BALA CYNWYD, PENNSYLVANIA, USA




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PHILADELPHIA INSURANCE COMPANY
And
PHILADELPHIA INDEMNITY INSURANCE COMPANY
Bala Cynwyd, Pennsylvania, USA
 TERRORISM CATASTROPHE EXCESS OF LOSS
REINSURANCE CONTRACT
  Article I
    
    BUSINESS COVERED
    
    PAGE 1Article II
    
    COMMENCEMENT AND TERMINATION
    
    PAGE 2Article III
    
    REINSURANCE COVERAGE
    
    PAGE 2Article IV
    
    EXCLUSIONS
    
    PAGE 4Article V
    
    REINSURANCE PREMIUM
    
    PAGE 6Article VI
    
    DEFINITION OF LOSS OCCURRENCE
    
    PAGE 7Article VII
    
    NET RETAINED LINES
    
    PAGE 7Article VIII
    
    REVIEW
    
    PAGE 8Article IX
    
    REPORTS, LOSS AND LOSS SETTLEMENTS
    
    PAGE 10Article X
    
    LOSS EXCESS OF POLICY LIMITS
    
    PAGE 11Article XI
    
    ORIGINAL CONDITIONS
    
    PAGE 12Article XII
    
    ERRORS AND OMISSIONS
    
    PAGE 12Article XIII
    
    CURRENCY
    
    PAGE 13Article XIV
    
    FEDERAL EXCISE TAX AND OTHER TAXES
    
    PAGE 13Article XV
    
    ACCESS TO RECORDS
    
    PAGE 13Article XVI
    
    RESERVES
    
    PAGE 14Article XVII
    
    SERVICE OF SUIT
    
    PAGE 17Article XVIII
    
    ARBITRATION
    
    PAGE 18Article XIX
    
    INSOLVENCY
    
    PAGE 22Article XX
    
    CLAIMS COOPERATION
    
    PAGE 22Article XXI
    
    CONFIDENTIALITY
    
    PAGE 23Article XXII
    
    LATE PAYMENTS
    
    PAGE 23Article XXIII
    
    OFFSET
    
    PAGE 25Article XXIV
    
    SPECIAL TERMINATION
    
    PAGE 25Article XXV
    
    TERRORISM RECOVERY  TERRORISM RISK INSURANCE
ACT OF 2002
    
    PAGE 27Article XXVI
    
    VARIOUS OTHER TERMS
    
    PAGE 28Article XXVII
    
    INTERMEDIARY
    
    PAGE 30
 ATTACHMENT




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1. PHILADELPHIA INSURANCE COMPANY
And
PHILADELPHIA INDEMNITY INSURANCE COMPANY
Bala Cynwyd, Pennsylvania, USA
(hereinafter referred to as the Reinsured)
 TERRORISM CATASTROPHE EXCESS OF LOSS REINSURANCE CONTRACT
(hereinafter referred to as the Contract)
 ARTICLE I  BUSINESS COVERED
   Check
    
    Line of Business
    
    Check
    
    Line of Business
    
    CheckInland Marine
    
    
    
    Other CasualtyCommercial Property
    
    x
    
    Professional Liability
    
    xPersonal Lines;
however, Personal
Automobile shall be
excluded
    
    
    
    Wet MarineLiability
    
    x
    
    Other lines of
business
    
    
    
    Line of Business
(to be filled in as
applicable)Umbrella Liability
    
    x




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2. ARTICLE II  COMMENCEMENT AND TERMINATION
  ARTICLE III  REINSURANCE COVERAGE
 Part One  Acts of Terrorism
 Section I (applicable to Loss Occurrence covered in conjunction with TRIA/ TRIEA)
   Section II (applicable to Loss Occurrence not covered in conjunction with TRIA/ TRIEA)




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3.  (i)
    
    involves violence against one or more persons; or(ii)
    
    involves damage to property; or(iii)
    
    endangers life other than that of the person committing the
action; or(iv)
    
    creates a risk to health or safety of the public or a section
of the public; or(v)
    
    involves physical loss, damage, cost, or expense caused by,
contributed to by, resulting from, or arising out of or in connection with any
action in directly responding to any act of terrorism; or(vi)
    
    are defined as such in any of the Reinsureds policy forms
that have been the subject of the Reinsurers express written prior review and
approval.
  Applicable to both Section I and Section II




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4. Part Two  Reinsurance Loss
    ARTICLE IV  EXCLUSIONS
  1.
    
    An act committed as part of the course of a war declared by
the Congress of the United States of America as set forth in Section
102(1)(B)(i) of TRIA as amended by TRIEA; or2.
    
    Seizure or illegal occupation; or




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5. 3.
    
    Confiscation, requisition, detention, legal or illegal
occupation, embargo, quarantine, or an order of public or government authority
which deprives the insured of the use or value of the property, or arising
from acts of contraband or illegal transportation or illegal trade; or4.
    
    Contingent Business Interruption, written as such, unless
specially accepted by the Reinsurers hereon; or5.
    
    Workers Compensation and Employers Liability, written as
such; or6.
    
    Pollutants or contaminants whether directly or indirectly
arising from or as consequence of the discharge of pollutants or contaminants,
which pollutants and contaminants shall include but not be limited to any
solid, liquid, gaseous or thermal irritant, contaminant or toxic or hazardous
substance or any substance the presence, existence or release of which
endangers or threatens to endanger the health, safety or welfare of persons or
the environment; or7.
    
    Electronic attack, including computer hacking or the
introduction of any form of computer virus. Notwithstanding the foregoing,
this Contract will respond to a Loss Occurrence arising from attacks involving
the use of a mobile telephone, remote control, or radio controlled device or
any other electronic device or system or such like in the launch and/or
guidance system and/or firing mechanism and/or detonation of any explosive
bomb, weapon or missile subject always to the other terms and conditions of
this Contract; or8.
    
    Increased cost occasioned by any Public or Civil Authoritys
enforcement of any ordinance or law regulating the reconstruction, repair or
demolition of any property; or9
    
    Cessation, fluctuation or variation in, or insufficiency of,
water, gas or electricity supplies and telecommunications of any type or
service; or10.
    
    Threat or hoax, in the absence of physical damage due to an
act or series of Acts of Terrorism; or11.
    
    Burglary, house  breaking, theft or larceny or caused by any
person taking part therein; or




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6. 12.
    
    Extra Contractual Obligation. Extra Contractual Obligation
means liabilities, other than a Loss Excess of Policy Limits, that are not
covered under any other provision of this Contract and which arise from the
handling of any claim on Business Covered hereunder by reason of alleged or
actual negligence, gross negligence, fraud, or bad faith on the part of the
Company.
  ARTICLE V REINSURANCE PREMIUM
 Part One  Basic Annual Premium
   Part Two  Reinstatement Premium




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7.  Part Three  No Claims Bonus
   ARTICLE VI  DEFINITION OF LOSS OCCURRENCE
   ARTICLE VII  NET RETAINED LINES




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8.     ARTICLE VIII  REVIEW
  1.
    
    Change in control of the Reinsured via a closing upon a
definitive agreement to sell or merge approved by the applicable regulatory
authorities including but not limited to (a) become merged with, acquired or
controlled by any company, corporation or individual(s) not controlling the
partys operations previously (though excluding transactions among entities
under common control); or2.
    
    a transfer by portfolio transfer of the Business Covered; or3.
    
    Material Change in the Reinsureds Underwriting Practices
that materially increases the Reinsureds underwriting exposure to a Loss
Occurrence arising from an Act of Terrorism. For the purpose of this
condition, a material change shall mean the following: (i) from inception, an
increase of 20% or USD20,000,000, whichever is greater, or




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9. more in the Total Insured Values covered in those zip codes set forth in
Schedule A, Target Area zip codes (Target Area TIV Increase) or (ii) any
material change to the Reinsureds coverage forms concerning terrorism
(Material Change), or (iii) the commencement of the Reinsured offering
terrorism coverage on a stand-alone basis (Offering of Stand-Alone
Terrorism).As used herein, the reference to a zip code or a Target Area zip code
shall mean that entire area encompassed by all zip codes within an area
described by reference only to the first three digits of a zip code.For example, an area made up of zip codes 89712, 89713, and 89714 will be
considered for the purposes of this Contract the zip code or Target
Area zip code of 897
   1.
    
    The Reinsurer shall have the right to review the impact of
any Material Change in the Reinsureds Underwriting Practices and either
accept the change or propose a modification to the terms of this Contract;2.
    
    In the event that: (i) the Material Change in the Reinsureds
Underwriting Practices is not reported to the Reinsurer in a timely fashion or
(ii) the Reinsured does not accept the Reinsurers proposal to modify the
terms of this Contract per sub-paragraph C1. above, then the following
conditions shall apply:
 a.
    
    In respect of a Material Change or Offering
of Stand-Alone Terrorism, no coverage shall be afforded hereunder for
that portion of Net Loss from a Loss Occurrence that occurs after the
date of the Material Change/Offering of Stand-Alone Terrorism that
directly results from such Material Change and/or Offering of
Stand-Alone Terrorism.b.
    
    In respect of a Target Area TIV Increase,
the Reinsurer shall have the option to reduce the contribution to Net
Loss in a Loss Occurrence from a Target Area




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10. according to the following fraction:(Total Insured Value in applicable Target Area at the inception of
this Contract * 1.20)* divided by actual Total
Insured Value in applicable Target Area at the date of the
Loss Occurrence.*In the event that USD20,000,000 is greater than 1.2
times the Total Insured Value in the applicable Target Area
at the inception of this Contract, such amount shall be
utilized rather than 1.2 times the Total Insured Value in the
applicable Target Area at the inception of this Contract.
  ARTICLE IX  REPORTS, LOSS AND LOSS SETTLEMENTS
 Part One  Reinsured Exposures




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Part Two  Claim Reporting
     ARTICLE X  LOSS EXCESS OF POLICY LIMITS




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12.      ARTICLE XI  ORIGINAL CONDITIONS
  ARTICLE XII  ERRORS AND OMISSIONS




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13.  ARTICLE XIII  CURRENCY
  ARTICLE XIV  FEDERAL EXCISE TAX AND OTHER TAXES
   ARTICLE XV  ACCESS TO RECORDS




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14. ARTICLE XVI  RESERVES
 (Unless otherwise required by law to obtain full credit for this Contract, in recognition of the
security in place under the Lloyds Credit for Reinsurance Trust, the provisions of this Article
shall not apply to participating Lloyds syndicates
   1.
    
    Clean, irrevocable, and unconditional evergreen letter(s) of
credit issued and confirmed, if confirmation is required by the applicable
insurance regulatory authorities, by a qualified United States financial
institution as defined under the Insurance Law of the Reinsureds domiciliary
state and acceptable to the Reinsured and to insurance regulatory authorities;2.
    
    A trust account meeting at least the standards of New Yorks
Insurance Regulation 114 and the Insurance Law of the Reinsureds domiciliary
state; or3.
    
    Cash advances or funds withheld or a combination of both,
which will be under the exclusive control of the Reinsured (Funds Deposit).
  1.
    
    The amount of the ceded unearned premium reserve for which
the Reinsurer is responsible to the Reinsured;2.
    
    The amount of Net Loss and other amounts paid by the
Reinsured for which the Reinsurer is responsible to the Reinsured but has not
yet paid;




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15. 3.
    
    The amount of ceded reserves for Net Loss for which the
Reinsurer is responsible to the Reinsured;4.
    
    The amount of return and refund premiums paid by the
Reinsured for which the Reinsurer is responsible to the
Reinsured but has not yet paid.
  1.
    
    Established letter of credit (or subsequent cash deposit);2.
    
    Established trust account (or subsequent cash deposit); or3.
    
    Funds Deposit;
   1.
    
    To make payment to and reimburse the Reinsured for the
Reinsurers share of Net Loss and other amounts paid by the Reinsured under
its Policies and for which the Reinsurer is responsible under this Contract
that is due to the Reinsured but unpaid by the Reinsurer including but not
limited to the Reinsurers share of premium refunds and returns; and2.
    
    To obtain a cash advance of the entire amount of the
remaining balance under any letter of credit in the event that the Reinsured:
 a.
    
    has received notice of non-renewal or
expiration of the letter of credit or trust account;b.
    
    has not received assurances satisfactory to
the Reinsured of any required increase in the amount of the letter of
credit or trust account, or its replacement or other continuation of
the letter of credit or trust account at least thirty (30) days
before its stated expiration date;c.
    
    has been made aware that others may attempt
to attach or otherwise place in jeopardy the security represented by
the letter of credit or trust account; or




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16. d.
    
    has concluded that the trustee or issuing (or confirming) banks
financial condition is such that the security represented by the
letter of credit or trust account may be in jeopardy;
   1.
    
    Upon the complete and final liquidation and discharge of all
of the Reinsurers Obligations to the Reinsured under this Contract; or2.
    
    In the event the Reinsurer subsequently provides alternate or
replacement security consistent with the terms hereof and acceptable to the
Reinsured.




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17.     ARTICLE XVII  SERVICE OF SUIT




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18.    ARTICLE XVIII  ARBITRATION




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19.




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20.




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21.




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22. ARTICLE
XIX  INSOLVENCY
     ARTICLE XX  CLAIMS COOPERATION




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ARTICLE XXI  CONFIDENTIALITY
   ARTICLE XXII  LATE PAYMENTS




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24.




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25. ARTICLE
XXIII  OFFSET
  ARTICLE XXIV  SPECIAL TERMINATION
  1.
    
    The Reinsurer ceases active underwriting operations or a
State Insurance Department or other legal authority orders the Reinsurer to
cease writing business in all jurisdictions; or2.
    
    The Reinsurer has: a) become insolvent, b) been placed under
supervision (voluntarily or involuntarily), c) been placed into liquidation or
receivership, or d) had instituted against it proceedings for the appointment
of a supervisor, receiver, liquidator, rehabilitator, conservator or trustee
in bankruptcy, or other agent known by whatever name, to take possession of
its assets or control of its operations; or3.
    
    The Reinsurers (a) policyholders surplus (PHS) has been
reduced by whichever is greater, (i) twenty percent (20%) of the amount of PHS
at the inception of this Contract or (ii) twenty percent (20%) of the amount
of PHS stated in its last filed quarterly or annual statutory statement with
its state of domicile; or (b) AM Bests insurer financial strength rating
becomes less than A- (N.B. as respects alien Reinsurers, a Standard & Poors
Insurance Rating of less than BBB will apply; as respects Lloyds Syndicates
where an AM Best insurer financial strength rating is not available, a
reduction of the Reinsurers S&P Lloyds Syndicate Assessment (LSA) ranking
from the LSA ranking that was in effect at either the inception of this
Contract or the beginning of the most current annual term of this Contract
will apply); or4.
    
    The Reinsurer has entered into a definitive agreement to (a)
become merged with, acquired or controlled by any company, corporation or
individual(s) not affiliated with or controlling the partys operations
previously; or (b) directly or indirectly




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26.  5.
    
    There is either (a) a severance or obstruction of free and
unfettered communication and/or normal commercial or financial intercourse
between the United States of America and the country in which the Reinsurer is
incorporated or has its principal office as a result of war, currency
regulations or any circumstances arising out of political, financial or
economic uncertainty; or (b) a severance (of any kind) of any two or more of
the following executives of the Reinsurer from active employment of the
Reinsurer during the most recent sixty (60) day period: President, Chief
Underwriting Officer, Chief Actuary, Chief Claims Officer or Chief Financial
Officer.




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27.   ARTICLE XXV  TERRORISM RECOVERY  TERRORISM RISK INSURANCE ACT OF 2002




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28.    ARTICLE XXVI  VARIOUS OTHER TERMS




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29.




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30. ARTICLE XXVII  INTERMEDIARY




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SCHEDULE A
 TARGET AREA ZIP CODES
 ZIP CODE
    
    US STATE
    
    US COUNTY10022
    
    NEW YORK
    
    NEW YORK89109
    
    NEVADA
    
    CLARK10017
    
    NEW YORK
    
    NEW YORK10036
    
    NEW YORK
    
    NEW YORK10019
    
    NEW YORK
    
    NEW YORK10020
    
    NEW YORK
    
    NEW YORK60606
    
    ILLINOIS
    
    COOK10001
    
    NEW YORK
    
    NEW YORK10038
    
    NEW YORK
    
    NEW YORK22102
    
    VIRGINIA
    
    FAIRFAX10004
    
    NEW YORK
    
    NEW YORK10021
    
    NEW YORK
    
    NEW YORK60603
    
    ILLINOIS
    
    COOK55402
    
    MINNESOTA
    
    HENNEPIN92618
    
    CALIFORNIA
    
    ORANGE23607
    
    VIRGINIA
    
    NEWPORT NEWS CITY90245
    
    CALIFORNIA
    
    LOS ANGELES (REST OF)60611
    
    ILLINOIS
    
    COOK94104
    
    CALIFORNIA
    
    SAN FRANCISCO90278
    
    CALIFORNIA
    
    LOS ANGELES (REST OF)92101
    
    CALIFORNIA
    
    SAN DIEGO