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EXHIBIT 10.39
   /s/ Francis M. Colalucci
    
    10/5/2007Tower Insurance Company of New York
    
    Date/s/ Joel S. Weiner
    
    10/5/2007CastlePoint Insurance Company
    
    Date
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AGGREGATE EXCESS OF LOSS
AGREEMENT  (Hereinafter referred to as the Agreement)  Between
CASTLEPOINT INSURANCE COMPANY  (Hereinafter referred to as the Company)  And
TOWER INSURANCE COMPANY OF NEW YORK
New York, New York  (Hereinafter referred to as the Reinsurer)
 ARTICLE 1  BUSINESS COVERED
  ARTICLE 2  COMMENCEMENT AND TERMINATION
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ARTICLE 3  TERRITORY
  ARTICLE 4  EXCLUSIONS
  1.
    
    Nuclear Incident, in accordance with the following clauses attached hereto:
   2.
    
    War Risks, in accordance with the War Risks Exclusion Clause appearing in the original Policies;3.
    
    Insolvency, in accordance with the Insolvency Funds Exclusion Clause attached hereto;4.
    
    Liability assumed by the Company as a member of any pool, association or syndicate, in
accordance with the Pools, Associations and Syndicates Exclusion Clause attached hereto;5.
    
    Earthquake, when written as such;6.
    
    Liability arising out of ownership, maintenance or use of any aircraft or flight operations;
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7.
    
    Professional Liability, when written as such, however not to exclude
when written as part of a package policy or when written in
conjunction with other policies issued by the Company;8.
    
    Insolvency Risks and Financial Guarantee;9.
    
    Asbestos liabilities of any nature;10.
    
    Pollution liabilities of any nature;11.
    
    Assumed reinsurance with the exception of inter-affiliate reinsurance.
 ARTICLE 5  COVERAGE
  ARTICLE 6  NET RETAINED LINES
  ARTICLE 7  REINSURANCE PREMIUM
  ARTICLE 8  ACCOUNTS AND LOSS SETTLEMENTS
  1.
    
    Net Earned Premium;2.
    
    Ultimate Net Loss and Loss Adjustment Expenses paid;3.
    
    Ultimate Net Loss and Loss Adjustment Expenses outstanding (including IBNR).
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ARTICLE 9  CURRENCY
   ARTICLE 10  TAXES
  ARTICLE 11  RESERVES
   1.
    
    Clean, irrevocable, and unconditional evergreen letter(s) of credit
(Letter(s) of Credit) meeting the requirements of New York
Regulation 133; and/or2.
    
    A trust account meeting the requirements of New York Regulation 114.
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1.
    
    The amount of the ceded unearned premium reserve for which the Reinsurer is responsible to the Company;2.
    
    The amount of Losses and Loss Adjustment Expenses and other amounts paid by the Company for which the
Reinsurer is responsible to the Company but has not yet paid;3.
    
    The amount of ceded reserves for Losses and Loss Adjustment Expenses (including, ceded reserves for
losses incurred but not reported) for which the Reinsurer is responsible to the Company; and4.
    
    The amount of return and refund premiums paid by the Company for which the Reinsurer is responsible to
the Company but has not yet paid.
  1.
    
    Each Letter of Credit will be issued for a term of at least one year
and will include an evergreen clause, which automatically extends
the term for at least one additional year at each expiration date
unless written notice of non-renewal is given to the Company not less
than 30 days prior to said expiration date.2.
    
    The Letter of Credit must be issued or confirmed by a bank which is
authorized to issue letters of credit, which is either a member of the
Federal Reserve System or is a New York State chartered bank, and
which in all other respects satisfies the definition of a Qualified
Bank under Section 79.1(e) of New York Insurance Regulation 133. If
the Letter of Credit is issued by a bank authorized to issue letters
of credit but which is not such a Qualified Bank, then the Letter of
Credit must be confirmed by such a bank and the Letter of Credit must
meet all of the conditions set forth in Section 79.4 of New York
Insurance Regulation 133.3.
    
    The Reinsurer and the Company agree that the Company may draw upon the
Letter(s) of Credit at any time, notwithstanding any other provisions
in the Agreement, provided such assets are applied and utilized by the
Company or any successor of the Company by operation of law,
including, without limitation, any liquidator, rehabilitator, receiver
or conservator of the Company, without diminution because of the
insolvency of the Company or the Reinsurer, only for the following
purposes:
 (i)
    
    to reimburse the Company for the Reinsurers share of premiums
returned to the owners of policies reinsured under this Agreement on
account of cancellations of such policies;(ii)
    
    to reimburse the Company for the Reinsurers share of surrenders and
benefits or losses paid by the Company under the terms and
provisions of the policies reinsured under this Agreement;(iii)
    
    to fund an account with the Company in an amount at least equal to
the deduction, for reinsurance ceded, from the Companys liabilities
for policies ceded under this Agreement. Such amount shall include,
but not be limited to, amounts for policy reserves for claims and
losses incurred (including losses incurred but not reported), loss
adjustment expenses, and unearned premiums; and
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(iv)
    
    to pay any other amounts the Company claims are due under this Agreement.
 4.
    
    The Company shall immediately return to the Reinsurer any amounts
drawn down on the Letter of Credit that are subsequently determined
not to be due.5.
    
    The issuing bank shall have no responsibility whatsoever in connection
with the propriety of withdrawals made by the Company of the
disposition of funds withdrawn, except to ensure that withdrawals are
made only upon the order of properly authorized representatives of the
Company.
  1.
    
    It is agreed that the Reinsurer shall enter into a trust agreement
(the Trust Agreement) in a form acceptable to the Company and
establish a trust account (the Trust Account) for the sole benefit
of the Company with a trustee (the Trustee), which shall be at the
time the Trust is established, and shall continue to be, either a
member of the Federal Reserve System or a New York state chartered
bank and which shall not be a parent, subsidiary or affiliate of the
Reinsurer or the Company.2.
    
    The Reinsurer agrees to deposit and maintain in said Trust Account
assets to be held in trust by the Trustee for the benefit of the
Company as security for the payment of the Reinsurers Obligations to
the Company under the Agreement. Such assets shall be maintained in
the Trust Account by the Reinsurer as long as the Reinsurer continues
to remain liable for such Obligations.3.
    
    The Reinsurer agrees that the assets deposited into the Trust Account
shall be valued according to their current fair market value and shall
consist only of currency of the United States of America, certificates
of deposit issued by a United States bank and payable in United States
legal tender, and investments of the types specified in paragraphs
(1), (2), (3), (8) and (10) of Section 1404(a) of the New York
Insurance Law, provided such investments are issued by an institution
that is not the parent, subsidiary or affiliate of either the Grantor
or the Beneficiary (Authorized Investments).4.
    
    The Reinsurer, prior to depositing assets with the Trustee, shall
execute all assignments and endorsements in blank, and shall transfer
legal title to the Trustee of all shares, obligations or any other
assets requiring assignments, in order that the Company, or the
Trustee upon direction of the Company, may whenever necessary
negotiate any such assets without consent or signature from the
Reinsurer or any other entity.5.
    
    All settlements of account under the Trust Agreement between the
Company and Reinsurer shall be made in cash or its equivalent.6.
    
    The Reinsurer and the Company agree that the assets in the Trust
Account may be withdrawn by the Company at any time, notwithstanding
any other provisions in the Agreement, provided such assets are
applied and utilized by the Company or any successor of the Company by
operation of law, including, without limitation, any liquidator,
rehabilitator, receiver or conservator of the Company, without
diminution because of the insolvency of the Company or the Reinsurer,
only for the following purposes:
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(i)
    
    to reimburse the Company for the Reinsurers share of any Losses and
Loss Adjustment Expenses paid by the Company but not received from
the Reinsurer or for unearned premiums due to the Company but not
otherwise paid by the Reinsurer under the Agreement; or(ii)
    
    to make payment to the Reinsurer of any amounts held in the Trust
Account that exceed 102% of the Reinsurers Obligations (less the
balance of credit available under any Letter(s) of Credit)
hereunder; or(iii)
    
    where the Company has received notification of termination of the
Trust Account, and where the Reinsurers entire Obligations under
the Agreement remain unliquidated and undischarged ten (10) days
prior to such termination, to withdraw amounts equal to such
Obligations (less the balance of credit available under any
Letter(s) of Credit) and deposit such amounts in a separate account,
in the name of the Company, in any United States bank or trust
company, apart from its general assets, in trust for such uses and
purposes specified in sub-paragraphs (i) and (ii) above as may
remain executory after such withdrawal and for any period after such
termination.
 7.
    
    The Reinsurer shall have the right to seek the Companys approval to
withdraw all or any part of the assets from the Trust Account and
transfer such assets to the Reinsurer, provided that the withdrawal
conforms to the following requirements:
 (i)
    
    the Reinsurer shall, at the time of withdrawal, replace the withdrawn
assets with other Authorized Investments having a market value equal
to the market value of the assets withdrawn,(ii)
    
    after such withdrawal and transfer, the market value of the Trust
Account is no less than 102% of the Reinsurers Obligations (less the
balance of credit available under any Letter(s) of Credit).
 In the event that the Reinsurer seeks the Companys approval hereunder, the
Company shall not unreasonably or arbitrarily withhold its approval.
 8.
    
    In the event that the Company withdraws assets from the Trust Account
for the purposes set forth in Paragraph (6)(i) above in excess of
actual amounts required to meet the Reinsurers Obligations to the
Company (less the balance of credit available under any Letter(s) of
Credit), or in excess of amounts determined to be due and under
Paragraph (6)(iii) above, the Company will return such excess to the
Reinsurer.9.
    
    The Company will prepare and forward at annual intervals or more
frequently as determined by the Company, but not more frequently than
quarterly to the Reinsurer a statement for the purposes of this
Article, showing the Reinsurers share of Obligations as set forth
above. If the Reinsurers share thereof exceeds the then existing
balance of the security provided, the Reinsurer will, within fifteen
(15) days of receipt of the Companys statement, but never later than
December 31 of any year, increase the amount of the letter of credit,
or Trust Account to the required amount of the Reinsurers share of
Obligations set forth in the Companys statement, but never later than
December 31 of any year. If the then existing balance of the security
provided exceeds an amount equal to 100% of the Reinsurers share
thereof, the Company will release the excess thereof to the Reinsurer
upon the Reinsurers written request.
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ARTICLE 12  OFFSET
  ARTICLE 13  ERRORS AND OMISSIONS
  ARTICLE 14  ACCESS TO RECORDS
  ARTICLE 15  INSOLVENCY
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ARTICLE 16  CONFIDENTIALITY
  ARTICLE 17  ARBITRATION
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ARTICLE 18  SERVICE OF SUIT
     ARTICLE 19  GOVERNING LAW
  ARTICLE 20  MISCELLANEOUS
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By:(Signature)(Print Name)Title:
 
  By:(Signature)(Print Name)Title:
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NUCLEAR INCIDENT EXCLUSION CLAUSE  PHYSICAL DAMAGE  REINSURANCE  USA
   I.
    
    Nuclear reactor power plants including all auxiliary property on the site, orII.
    
    Any other nuclear reactor installation, including laboratories handling
radioactive materials in connection with reactor installations, and
critical facilities as such, orIII.
    
    Installations for fabricating complete fuel elements or for processing
substantial quantities of special nuclear material, and for reprocessing,
salvaging, chemically separating, storing or disposing of spent nuclear
fuel or waste materials, orIV.
    
    Installations other than those listed in paragraph (2) III above using
substantial quantities of radioactive isotopes or other products of nuclear
fission.
  (a)
    
    where the Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or(b)
    
    where said insurance contains a provision excluding coverage for damage to property caused by or resulting
from radioactive contamination, however caused. However on and after 1st January 1960, this
sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has
been approved by the Governmental Authority having jurisdiction thereof.
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(a)
    
    substantial quantities, and(b)
    
    the extent of installation, plant or site
  (a)
    
    all policies issued by the Reassured on or before 31st December 1957
shall be free from the application of the other provisions of this
Clause until expiry date or 31st December 1960 whichever first occurs
whereupon all the provisions of this Clause shall apply.(b)
    
    with respect to any risk located in Canada policies issued by the
Reassured on or before 31st December 1958 shall be free from the
application of the other provisions of this Clause until expiry date
or 31st December 1960 whichever first occurs whereupon all the
provisions of this Clause shall apply.
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NUCLEAR INCIDENT EXCLUSION CLAUSE  LIABILITY  REINSURANCE  U.S.A.
 1.
    
    This Agreement does not cover any loss or liability accruing to the Cedent as a member of, or
subscriber to, any association of insurers or reinsurers formed for the purpose of covering nuclear
energy risks or as a direct or indirect reinsurer of any such member, subscriber or association.2.
    
    Without in any way restricting the operation of paragraph (1) of this Clause it is understood
and agreed that for all purposes of this Agreement all the original policies of the Cedent (new,
renewal and replacement) of the classes specified in Clause II of this paragraph (2) from the time
specified in Clause III of this paragraph (2) shall be deemed to include the following provision
(specified as the Limited Exclusion Provision):
  I.
    
    It is agreed that the policy does not apply under any liability coverage, to(injury, sickness, disease, death or destruction(bodily injury or property damage
   III.
    
    The inception dates and thereafter of all original policies as described in II above,
whether new, renewal or replacement, being policies which either
 (a)
    
    become effective on or after 1st May, 1960, or
 (b)
    
    become effective before that date and contain the Limited Exclusion Provision set out above;
provided this paragraph (2) shall not be applicable to Family Automobile Policies, Special
Automobile Policies or policies or combination policies of a similar nature, issued by the Cedent
on New York risks, until 90 days following approval of the Limited Exclusion Provision by the
Governmental Authority having jurisdiction thereof.3.
    
    Except for those classes of policies specified in Clause II of paragraph (2) and without in any
way restricting the operation of paragraph (1) of this Clause, it is understood and agreed that for
all purposes of this Agreement the original liability policies of the Cedent (new, renewal and
replacement) affording the following coverages:
 
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I.
    
    Under any Liability Coverage, to(injury, sickness, disease, death or destruction
(bodily injury or property damage
 (a)
    
    with respect to which an insured under the policy is also an insured under a nuclear
energy liability policy issued by Nuclear Energy Liability Insurance Association, Mutual Atomic
Energy Liability Underwriters or Nuclear Insurance Association of Canada, or would be an insured
under any such policy but for its termination upon exhaustion of its limit of liability; or(b)
    
    resulting from the hazardous properties of nuclear material and with respect to which (1)
any person or organization is required to maintain financial protection pursuant to the Atomic
Energy Act of 1954, or any law amendatory thereof, or (2) the insured is, or had this policy not
been issued would be, entitled to indemnity from the United States of America, or any agency
thereof, under any agreement entered into by the United States of America, or any agency thereof,
with any person or organization.
 II.
    
    Under any Medical Payments Coverage, or under any Supplementary Payments Provision
relating to(immediate medical or surgical relief,
(first aid,
to expenses incurred with respect to(bodily injury, sickness, disease or death
(bodily injury
  III.
    
    Under any Liability Coverage, to(injury, sickness, disease, death or destruction
(bodily injury or property damage
resulting from the hazardous properties of nuclear material if
 (a)
    
    the nuclear material (1) is at any nuclear facility owned by, or operated by or on behalf
of, an insured or (2) has been discharged or dispersed therefrom;(b)
    
    the nuclear material is contained in spent fuel or waste at any time possessed, handled,
used, processed, stored, transported or disposed or by or on behalf of an insured; or
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(c)
    
    (the injury, sickness, disease, death or destruction
(the bodily injury or property damage
arises out of the furnishing by an insured of services, materials, parts or equipment in
connection with the planning, construction, maintenance, operation or use of any nuclear facility,
but if such facility is located within the United States of America, its territories, or
possessions or Canada, this exclusion (c) applies only to (injury to or destruction of property at
such nuclear facility(property damage to such nuclear facility and any property thereat.
 IV.
    
    As used in this endorsement:
hazardous properties include radioactive, toxic or explosive properties; nuclear material
means source material, special nuclear material or by-product material; source material, special
nuclear material and by-product material have the meanings given to them in the Atomic Energy
Act of 1954 or in any law amendatory thereof; spent fuel means any fuel element or fuel
component, solid or liquid, which has been used or exposed to radiation in a nuclear reactor;
waste means any waste material (1) containing by-product material and (2) resulting from the
operation by any person or organization of any nuclear facility included within the definition of
nuclear facility under paragraph (a) or (b) thereof; nuclear facility means
 (a)
    
    any nuclear reactor,(b)
    
    any equipment or device designed or used for (1) separating the isotopes of uranium or
plutonium, (2) processing or utilizing spent fuel, or (3) handling, processing or packaging waste,(c)
    
    any equipment or device used for the processing, fabricating or alloying of special
nuclear material if at any time the total amount of such material in the custody of the Insured at
the premises where such equipment or device is located consists of or contains more than 25 grams
of plutonium or uranium 233 or any combination thereof, or more than 250 grams of uranium 235,(d)
    
    any structure, basin, excavation, premises or place prepared or used for the storage or
disposal of waste,
and includes the site on which any of the foregoing is located, all operations conducted on
such site and all premises used for such operations; nuclear reactor means any apparatus designed
or used to sustain nuclear fission in a self-supporting chain reaction or to contain a critical
mass of fissionable material;(with respect to injury to or destruction of property, the word injury or destruction
(property damage includes all forms of radioactive contamination of property.(includes all forms of radioactive contamination of property.
 V.
    
    The inception dates and thereafter of all original policies affording coverages specified
in this paragraph (3), whether new, renewal or replacement, being policies which become effective
on or after 1st May, 1960, provided this paragraph (3) shall not be applicable to
 (i)
    
    Garage and Automobile Policies issued by the Cedent on New York risks, or
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(ii)
    
    Statutory liability insurance required under Chapter 90, General Laws of Massachusetts,
until 90 days following approval of the Board Exclusion Provision by the Governmental Authority
having jurisdiction thereof.
 4.
    
    Without in any way restricting the operation of paragraph (1) of this Clause, it is
understood and agreed that paragraphs (2) and (3) above are not applicable to original liability
policies of the Cedent in Canada and that with respect of such policies this Clause shall be deemed
to include the Nuclear Energy Liability Exclusion Provisions adopted by the Canadian Underwriters
Association or the Independent Insurance Conference of Canada.
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WAR RISK EXCLUSION CLAUSE (REINSURANCE)
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INSOLVENCY FUND EXCLUSION CLAUSE
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POOLS, ASSOCIATIONS AND SYNDICATES EXCLUSION CLAUSE
 
 (a)
    
    All business derived directly or indirectly from any Pool, Association, or Syndicate which
maintains its own reinsurance facilities.(b)
    
    Any Pool or Scheme (whether voluntary or mandatory) formed after March 1, 1968 for the
purpose of insurance property whether on a country-wide basis or in respect of designated areas.
This exclusion shall not apply to so-called Automobile Insurance Plans or other Pools formed to
provide coverage for Automobile Physical Damage.
 
 (a)
    
    Where the Total Insured Value over all interests of the risk in question is less than $250,000,000.(b)
    
    To interests traditionally underwritten as Inland Marine or stock and/or contents written on a blanket basis.(c)
    
    To Contingent Business Interruption, except when the Company is aware that the key location is known at the
time to be insured in any Pool, Association, or Syndicate named above other than as provided for under
Section B(a).
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(d)
    
    To risks as follows:
Offices, Hotels, Apartments, Hospitals, Educational Establishments, Public Utilities, (other
than railroad schedules) and builders risks on the classes of risks specified in this subsection
(d) only. Where this clause attaches to Catastrophe Excesses, the following Section C is added:
 
 (1)
    
    The following so-called Coastal Pools:
Alabama Insurance Underwriting Association
Florida Windstorm Underwriting Association
Louisiana Insurance Underwriting Association
Mississippi Windstorm Underwriting Association
North Carolina Insurance Underwriting Association
South Carolina Windstorm and Hail Underwriting Association
Texas Catastrophe Property Insurance Association
  (2)
    
    All Fair Plan and Rural Risk Plan business for all perils otherwise protected
hereunder shall not be excluded, except, however, that this reinsurance does not include any
increase in such liability resulting from:
 (i)
    
    The inability of any other participant in such Coastal Pool and/or Fair Plan and/or
Rural Risk Plan to meet its liability.(ii)
    
    Any claim against such Coastal Pool and/or Fair Plan and/or Rural Risk Plan or any
participant therein, including the Company, whether by way of subrogation or otherwise, brought by
or on behalf of any insolvency fund (as defined in the Insolvency Fund Exclusion Clause
incorporated in this Contract).
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